Just because your business is making money doesn’t mean it’s stable. Stability is the ability to withstand a temporary problem, such as a decrease in sales, lack of capital or loss of a key employee or customer. Analyzing your cash flow and a variety of negative scenarios will help you determine whether or not your business is financially stable.
Step 1 Review your production and overhead expenses and determine their costs per unit. Determine your profit margin per unit at your current sales levels. Calculate your profit margins based on lower sales levels to determine at what sale volume level you will no longer be profitable.
Step 2 Create a cash flow budget that shows exactly when your income will arrive and when payments are due. Creating a budget that uses monthly averages for expenses such as insurance premiums and sales doesn’t prepare you for times when you’ll need extra cash to pay bills. Analyze your cash flow budget to determine if you will need to decrease spending in certain months or obtain a loan or credit line to pay bills during certain months. Discuss whether or not you need to strengthen your accounts receivable monitoring and collection processes.
Step 3 Review your customer list, ranking customers by sales volume. Calculate the effect of losing each customer, and two customers at once, on your ability to stay in business. Re-calculate your production and overhead costs per unit based on specific customer losses to determine if you will make a profit at these sales levels. Create a plan to reduce your dependency on one or two accounts if you can’t survive without them.
Step 4 Re-do your annual budget based on different sales levels to determine your ability to withstand a decrease in sales. Re-calculate your production and overhead costs per unit based on these sales levels to determine if you will make a profit. Create budgets that automatically trigger spending changes when your sales decrease.
Step 5 Discuss the effects of losses of key employees. Determine the costs to bring a replacement on board for each key employee and the loss of productivity or sales a departure will have on your company. Have a detailed written job description for each key employee and ask each to prepare an operating manual for his department or function for use by his replacement.
Step 6 Examine your lines of credit and determine the effect on your business if you lose one or more lender. Discuss whether you can quickly replace that credit line and the effects on your business of losing key sources of credit for 30, 60 or 90 days or longer. Create a plan for operating without credit to determine how long you can do so.
Review Your Target Market: The idea is to finely tune your target customer by placing them into groups with similar needs so you can align your appropriate products/services to fit those needs. The more you identify applicable categories, the more areas available to approach or create opportunities later. For example, maybe your target is middle class men, age 45-65, living in metro areas with families, interested in classic cars and mechanics that frequent local events and festivals of the same nature.
Identify potential partnerships with complementary businesses. Make a list of local businesses or organizations that offer products or services to the segments both partners have in common. This allows both partners to benefit from the relationship and keeps your customers returning. For instance, if you own a pet grooming salon, some likely partners might be pet supply and food stores, maybe a juice or coffee place everyone walks their dog by or even non-commercial partners like local parks or shelters.
Develop a “Pilot” Campaign: Start small, so you can test the results of a small campaign geared at your newly developed target audience in conjunction with your partner(s). You can promote a product/service “freebie” or one of your products/services at a discounted rate with a high perceived value, but low cost to you. For example, if you own a spa, perhaps give a free 30 minute massages when you bring your mother for Mother’s day (free massage with the purchase of one massage) offered to your top 25 clients and 25 clients of the nearest luxury hair salon. This way, you manage the cost and the exclusivity of the promotion.
Measure, measure, measure. How do you know if your efforts worked or failed? After developing the pilot campaign strategy, setup the appropriate metrics. Start with setting goals e.g. 25 new clients in 60 days and two local partnerships. Then, if you choose to market your promotions via email measure the amount of new leads that came in from the eblasts through click-through rates (CTR) or by prepping your materials, software, staff and the like to ask “how did you hear about us?” On your website, you can use tracking URLS or lead capture forms on a landing page that ask for contact information. If you’re using printed material or advertisements use phone tracking services such as Mongoose Metrics, Marchex, or Call Source before you begin printing your materials.
Customer Service: Truly emphasizing the importance of genuine customer services goes a long way in creating the experience many customers will often not only return for, but pay more for versus less expensive competitors. Offering service primarily based on care and trust on an individual basis creates an opportunity for a friendly relationship with your business and you as an extension of your business. When communicating with your clients speak through the social perspectives of the business i.e. the aspects your employees, your clients, or even your vendors would find notable. Just the same, assure you or the appropriate team member responds to customer concerns, complaints, and praises in a timely and personal fashion without bias. “Do your best with the best attitude.”
Review the Results of Your Campaign: Review your web analytics for web visit behaviors, how long your clients spent searching your content, the most influential pages on your site, and the geographic location of your visitors to start. Once you map out all of the channels you used e.g. email, web, print advertising you can review which channels helped bring in the most new customers; identifying the most and least profitable. Review all of your leads and new sales and connect them back with their original channel in a spreadsheet or use your customer relationship management (CRM) software. Then, begin to continuously optimize and target your efforts with the power of customer intel!
Maintain Communication: Collecting contact information whether electronically or in person is crucial to maintaining a relationship with your clients, and especially your best clients. Set up an e-mail marketing system and send personal emails of “welcome,” “thanks,” or “revisits” for things like oil changes that occur every so often, checkups etc. through automated email marketing services like Constant Contact. Be sure to communicate: relevant and valuable information methodically, notable information (i.e. promotions, achievements like a new location etc.), positive and negative changes to products or services. You don’t have to sell constantly, just stay on their mind. The key is communicating a healthy, transparent mix of your business’ happenings to stimulate a sense of customer value.
Ask for Referrals: Who? Your 20%, the loyal, and the new. Use your current client base and your top two or three most profitable marketing channels to communicate and remind how you fit a need, made life easier, or more enjoyable. Ask your best and/or most loyal customers for recommendations via social media if appropriate and don’t forget to include the links to your pages! Assure that your newest clients hear from you within the first 10 days of their purchase for good measure and recollection.
Host an Informational Workshop at Your Business Invite your best customers and have them bring a friend. You can even offset sales period declines by hosting the event during your “slow season” in conjunction with a special offer for that day.
Loyalty Programs: A brilliant source of rewarding your customers and attracting new ones on the basis of adding an element of exclusivity in addition to offering an opportunity to save on purchases and much more.
Public relations is key to any successful business venture. For budget-conscious small businesses, however, hiring a PR firm is out of the question. What's a resource-strapped business owner to do? Take the do-it-yourself route, of course. But DIY doesn't always mean effective. To help you get the most of your self-launched PR campaigns, here are some DIY PR resources you shouldn't miss.
Localist You don't need a full-fledged marketing team to launch a successful PR event. Check out Localist, an interactive online calendaring platform that aims to help small businesses with limited marketing resources manage promotional events.
How it works: After signing up for an account, start by inputting planned events, importing your current calendar or uploading events in bulk. Take advantage of time-saving features like recurring schedules, venue matching (enter the venue name and Localist will automatically populate its address and other information) and automatic event merging to avoid duplicates. To make your event even more successful, Localist also allows you to create an online community where attendees and target audiences can check-in to events, add comments, write reviews and upload photos. The platform is also Google Analytics-friendly, allowing you track conversations about your event, how many shares and follows events have and other valuable insights.
Cost: Localist starts at $19 a month. This starter plan includes unlimited events, a custom domain, responsive design for enhanced video mobile access and more.
Help a reporter out (HARO) Share your expertise and get free publicity. Help A Reporter Out, commonly referred to as HARO by media folks, gives you direct access to reporters, bloggers and journalists from all types of publications and media properties who are looking for sources with your expertise.
How it works: Sign up as a source and HARO will send queries from journalists to your inbox in batches throughout the day. If any of the queries is a good fit for your expertise and business, pitch your response and qualifications directly to the journalist by email for a possible interview or direct quote.
MuckRack Find the right journalist and blogger to tell your story or become a source. MuckRack helps businesses search their database of more than 20,000 journalists and media contacts. Features include inbox alerts, direct email pitches to journalists, social sharing data and media list creation and organization.
How it works: Sign up as a PR pro or marketer by clicking on the "Find Journalists" button, then choose a subscription plan. Start searching for journalists by name, keywords and phrases, beats, outlets, Twitter accounts, hashtags, media properties and other categories.
Cost: Starts at $179 a month.
PRWeb Maximize your reach and attract new business online. PRWeb publishes press releases across the Web on search engines, blogs, major news sites and websites — no tech or PR skills necessary.
How it works: Write an effective and engaging press release for your business, announcement or event (PRWeb offers a library of resources to help you do this, including free tutorials and press release examples). Add video, keywords, extra distribution channels and other optional features. Plug your press release into PRWeb's template and hit 'Submit.' PRWeb's editors will then check your release and you're good to go.
Cost: Starts at $99 per press release.
Handle Your Own PR Can't afford a PR agency? Handle Your Own PR (HYOPR) is a DIY PR service that gives you all the tools you need to create media lists and get free publicity for your small business. HYOPR's comprehensive PR library includes tips, tools and other resources to help you successfully launch your own PR campaigns.
How it works: Start with the "How To Do It" tab. There you'll learn everything from getting started with PR to media basics (releases, targeting, lists and scheduling) and the do's and don'ts of connecting and following up with media contacts.
Cost: HYOPR is free to use. Users can also purchase media lists starting at $80, depending on the niche.
MyBlogGuest Reach highly targeted audiences by writing quality guest posts on major blogs. MyBlogGuest connects bloggers with brands and content creators to share their expertise, build links and cross-promote their offerings.
How it works: Sign up for a MyBlogGuest account. Search for guest blogging opportunities or post an ad in the forums for free. You can also post content directly in the Articles Gallery for blog owners to find (requires a GO PRO account).
Cost: Sign up and browse the forums for free. Full-featured accounts start at $50 per month.
HootSuite Find leads and discover your biggest social media influencers. HootSuite is a social media management tool that lets you manage multiple social media accounts in a single dashboard to help automate social media marketing, while increasing engagement. HootSuite can also help you monitor top content, likes and shares, traffic sources and other metrics with reporting modules like Facebook Insight and Google Analytics.
How it works: Sign in with Twitter, Facebook, Google+ or your email address, then set up "streams" for each social media account.
Cost: Free for up to three social media profiles.
Google Alerts A PR rep's job isn't just to get publicity for clients, but also to track where they are being placed and mentioned. But you don't need fancy software to do the same for your business — Google Alerts lets you monitor your presence online and find out where you appear on the Web, what people are saying about you and how your PR campaigns compare to that of your competitors.
How it works: Google Alerts are sent directly to your inbox. Create an alert by entering a search query — such as the name of your business, competitors, industry and other related keywords — and setting up the frequency and types of alerts you wish to receive.
LinkedIn LinkedIn is a great place to connect with colleagues and even find a job. It's also an excellent resource for finding journalists, budget-friendly PR reps and other professionals who can help you get your PR campaigns off the ground.
How it works: Use LinkedIn's search function and filters to find the journalists, publications and PR professionals. For better search results and to contact non-connections, purchase a Premium account.
Cost: Free, with Premium plans starting at $29.99 a month.
Originally published on Business News Daily.
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