Monday, September 27, 2010

Customer Classifications

Take a careful look at your customer list. Some of them are great customers. Some are just so-so. And, some of them may not be worth keeping.

It will help your business if you start classifying each customer in one of 4 categories:

1) Customer. This is a customer who has bought one of your products or who you performed a one-time service for.

2) Repeat customer. Here is someone who was impressed enough with your offering to buy again.

3) Referral. Here is a customer who was so satisfied with what you sell that they are willing to let you reference them to new prospects.

4) Advocate. This is the top of the food chain! This customer recommends your business to others without ever being asked to.

If you want to build a powerful business, you need to develop plans and actions that move each of the first 3 levels into level 4. Because level 4 is where your business gets the brass ring.

Next week’s blog: Overled & Undermanaged???

Wednesday, September 22, 2010

Why Should Anyone Follow You?

Needless to say, if you’re the leader of your business, you’ve got to have followers. So, you’d better know what it takes to lead effectively.

A Harvard Business Review article several years back lists the basic ingredients of vision, energy, authority, and strategic direction. But….if you’re going to be an inspirational leader; one whom people will want to follow, you’d better also include the following four principles:

1) You need to selectively show your weaknesses. By exposing some (and the operative word here is some) vulnerability, you’ll reveal your approachability and humanity.

2) You need to rely heavily on intuition to gauge the appropriate timing and course of your actions. “Soft” data will help you know when and how to act.

3) You need to display a “tough empathy” leadership style. Inspirational leaders empathize passionately and realistically with people. And, they care intensely about the work their employees do.

4) You need to reveal your differences. This way you’ll capitalize on what's unique about yourself.

If you employ the following principles along with basic strong management practices, you will excel at inspiring your people; in capturing their hearts, minds and souls.

Next week’s blog: Customer Classifications

Tuesday, September 21, 2010

Which Business Should You Start?

So, you’ve decided to go into your own business. Hopefully, you’ve taken the personal inventory test from Blog #1 and you fit the necessary personality traits that will improve your chances for success.

Now, which business will be the right one for you? Consider the following 4 basic principles:

1) A business that matches your expertise. Do you really know the ins and outs of the daily workings of the business you plan on entering? If not, on-the-job training can lead to ruin.

2) A business that has an identifiable niche. Any fool with some disposable income can start a gift shop in the mall. And, most of those fools end up broke! Before you plunk down your hard earned money, ask yourself “what is the unique selling proposition (USP) of this business? If you have an USP, you’ve got a great chance for success.

3) A business that offers sufficient margins for profitability. I’m not talking about a product that you mark up 100% and think a 50% margin must be great. Instead you need to fully understand all of your direct and indirect costs. And those costs must be less than your sales prices. This means knowing completely what all of your expenses are and whether or not you can sell enough product or service to leave you with a profit at the end of the day.

4) A business that offers the potential for recurring revenue. It’s a heck of lot easier to make money in business if you have repeat customers. Otherwise, you have to sell a very high end, expensive product or service in order to make a profit. Generally, an expensive product or service has a long sales cycle which, unless you’ve got a very rich uncle, can drain your capital and cause bankruptcy.

If your business has these 4 basic principles, you have a good chance of being successful.

Next week’s blog: Why Should Anyone Follow You?

Wednesday, September 8, 2010

Why Should You Go Into Your Own Business?

So you can earn a fortune? Maybe you’re stuck in a dead-end job? But, better yet you have an idea - an idea that wakes you up in the middle of the night, an itch that you just can’t scratch. Entrepreneurs have a burning desire to create, to build something. And they have confidence in themselves. Entrepreneurs may be dreamers but they are generally not wild-eyed gamblers. Instead, they take, or should take, only calculated risks.

If you’re one of those calculated risk takers, then go ahead. Cross the Rubicon and plunge in. But remember, 9 out of 10 businesses fail within the first 5 years. So, before you jump in, take the following 7 personal inventory aptitude test:

Do you…
1) Have a high energy level? Because you’ll need every bit of energy you’ve got.
2) Possess a success background? Winners have a tendency to keep winning. Losers have a tendency to keep losing. That applies to business in spades.
3) Have a high tolerance for uncertainty? There are no guarantees in business, only good judgment decisions that oftentimes works out favorably.
4) Handle enormous stress appropriately and successfully? If you can’t accept that there will be many sleepless nights, stay working for someone else.
5) Have spousal or partner support? If you come home each night with a carping partner, these negative attitudes will drag you down and hurt your chances for success.
6) Have a well thought out and written business plan? Sure, luck can be an important aspect of any successful business, but it takes a heck of lot more than luck to win.
7) Have you strong leadership skills?. You’ll be the captain of the ship and in order to navigate successfully, you’ll have to have people around you who are willing to follow your direction.

If you possess all or most of these aptitudes, you’ll have a better than even chance of building a successful business; one that will lead to personal satisfaction and the possibility significant wealth.

Next week’s blog: What Is The Right Type Of Business To Start?