Monday, December 20, 2010

Bottoms Up! – Use a ‘reverse’ income statement to achieve your business goals

"Begin with the end in mind". You may know this as the second habit in Steven Covey's book, "The 7 Habits of Highly Effective People". Did you know it's also the power behind the 'reverse' income statement?
When crafting your business' 2011 goals, don't start with a sales target. Instead, establish your profit target first. Then use the 'reverse' income statement to figure out what business activities are required to meet the target.
You may hate reading accounting reports, but the 'reverse' income statement ("RIS") is one tool you'll love using. It's not a traditional profit and loss statement like the one your accountant prepares.
Instead, you construct a RIS using only the 7 levers that drive the bottom line of every business. These 7 levers are only things you'll need to ensure that you'll meet your profit target:
  1. # of new business leads
  2. % of leads that result in a new customer
  3. % of prior customers who purchase from you this year (customer retention)
  4. Average sale amount
  5. Number of transactions/year per customer
  6. Gross margin %
  7. Fixed cost amount
Here's how one company put these RIS levers to work to create its 2011 plan (the name has been disguised).
In 2010, Turicum Dental Associates turned a profit of $47,885 after all fixed and variable expenses, including the dentist's/owner's salary. Turicumt wanted to develop a plan to grow its 2011 profit to $85,000. Enter the RIS.

Friday, December 10, 2010

Articulate Your Business Goals Now

The legendary chemist and microbiologist Louis Pasteur once said, "Chance favors the prepared mind." When I think about my career over the past 20-plus years, I recognize many times when indeed luck or chance seemed to come my way. Interestingly enough, opportunities seemed to appear when I was most prepared to accept these challenges.

How does being prepared for opportunities truly help a business owner succeed? 
The Product Development & Management Assn. conducted a study to evaluate the relationship between clarity of ideas and success and found that low clarity resulted in 23% of businesses achieving success while a whopping 85% of businesses achieved success when they were very clear and articulate about their goals and ideas. When you give words to your ideas and vision, they have a significantly higher chance of becoming reality.

Articulating your goals is clearly a method of preparing your mind and your company for opportunity. Therefore, today’s tip is simple: Write down your top three business goals for the next six months. Do it right now—before you have the chance to get involved with some part of your business that is calling you. Once you have these goals written down, post them in your office or a place where you will see them every day to remind yourself why you’re getting up each morning and going to work (even if that’s just down the hall in your bunny slippers).

Beth Goldstein, President, Marketing Edge Consulting Group, Boston MA

Thursday, December 9, 2010

What Can A Business Coach Do For Me?

Have you ever considered getting a business coach?  

Do you know what a business coach is or does?  There are coaches for athletes, singers, actors, musicians, golfers and more.  So, why would a Business Coach be considered so different?  For most entrepreneurs, they have no less a commitment than the actor, or athlete; yet the notion of a business coach remains foreign or considered only when the business is in trouble.

On the other hand, great business leaders as notable as Apple’s Steve Jobs and Google’s Eric Schmidt share one thing in common: They both rely on a mentor and business coach.

Here’s advice from a real business owner.  

Tuesday, December 7, 2010

Hear "Not Yet" Instead of "No": Increase Your New Client Count by 25%

How would you like a 25% increase in new clients? "How?" I'm sure you are asking. Well, you start by answering this all important question.

What do you usually do when you hear NO from a prospective client?

Think carefully because how you answer this question will tell you a lot. This question can reveal whether you are maximizing your marketing efforts or squandering them.

You see, it's not unusual to hear NO when you're in business. Chances are you hear it on a daily basis. The problem is not with the NO. The problem is what happens next.

Tuesday, November 30, 2010

Guarantee Success!

Do you measure your sales conversion rate? If so, is it as high as you would like it to be? The chances are that there is room for improvement for most businesses. If you are spending money on advertising and marketing to effectively buy prospective customers and not converting those prospects into buying customers, then you are wasting money.

One of the reasons that people don’t buy from you is that they perceive that they are taking risks in purchasing your product or service. These risks include not being satisfied with the product or service, it not being what they really need, not getting value for money or not getting what they paid for. So how can you help customers to overcome their fear of these perceived risks and make buying from you a safer option?

Thursday, November 11, 2010

5 Reasons To Make Your Bucket List Today

Haven’t seen the movie starring Morgan Freeman and Jack Nicholson? Give it a try.

In a nutshell, your “bucket list” is a list of the 100 things you want to do (places to go, people to meet, things to do) before you die ("kick the bucket").

Why create a bucket list?

Thinking about your list will remind you of your 'why.' So often, we are consumed by 'how' to do something (how to have a better life, make more money, spend time with family, etc.). In the process we overlook ‘why’ we want these things.  In essence, if we don't know 'why', the 'how' makes little difference. The 'why' defines our purpose and helps to provide some motivation to persist in spite of the challenges along the way.
  1. Periodically reviewing your list is a great way to re-energize. How often do we find ourselves so busy running on the 'hamster-wheel' of life that we lose sight of the bigger picture? By refreshing our perspective, we sharpen our focus and get back on track. Consider this: what are you more motivated to work for-what you want or what somebody else wants you to have?
  2. Your reward list is ready to go. One of the most difficult things to do is to reward ourselves when we achieve a goal or milestone. We rationalize: "But there is still so much to do!" You work hard, don't you? You deserve something special. Once you make this list, you have no excuse to deprive yourself. Now, when you set some great personal or business goals, you select the reward that accompanies their achievement.

The Two Most Expensive Words You Can Ever Say

"I know." We hear kids say it all the time, and as adults we think to ourselves that with age comes wisdom. But how often do we say it ourselves - when we don’t really know?

In this ultra fast world, where the speed of information supplied to us often leaves us too little time to stop and really think past a glance and consider other possibilities.

So consider this... how much are you costing yourself? How much time? How much money? And how much stress are you costing yourself by telling yourself that “I know that”.

By assuming that you “know” about a certain subject, are you stopping yourself from seeing that issue in a different light?… a different perspective? A perspective that might see you take a different action, one that could solve a problem you’ve had?

Many people only stick with what they know – or what they think they know for many reasons. They feel fear of failure, or feel that as the boss they are supposed to know or are simply trapped by their own success in to thinking they know everything they need to know.