The Art of Saying “Yes!”
The phone call at our two-year-old publicity service company was inquiring if our film crew was available to shoot a news film of the Atlantic City Baby Parade. The honest answer should have been, “I think you called the wrong number, we don’t make films.” Instead, we said “Yes, let’s talk” and asked for more details about the project.
As a fledgling communications company we produced and distributed press material to reach all media in the proper format — but not film. Included was a TV service that placed six 8×10 still photos and script on live, women’s interest daytime TV shows. Here was an opportunity to convert a wrong number into a new service about which we knew very little, other than some companies did them.
When the price with our client was established, we hired a company to shoot, edit and distribute the publicity TV news film – and we all went on location with the client understanding that the film crew worked for us. It was so successful that two of us enrolled in film school.
We were a publicity company that now had a new and profitable product to offer. Over the years we produced 2,000 message films – all because of a wrong number and our ability to recognize an opportunity. Think very carefully before you tell a customer “No, we don’t do that”. You may be missing a great opportunity!
Use the comment box to tell me your ideas on how to recognize a good business opportunity.
Alvin Roselin, SCORE New York
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February 4, 2010
The common accounting methods are called the “cash method” or the “accrual method”.
Under the “cash method”, the accounting for sales is deemed to occur when payment is received and expenses are accounted for when payment is made.
Under the “accrual method”, sales are deemed to occur and are accounted for when the revenue is earned, whether paid for or not, and costs are accounted for when expenses are incurred, even if not yet paid. An example is a painting company which incurs cost when their materials are invoiced to them and books sales when it bills the customer at the end of the job. The expenses and the billing are charged to the month when they were invoiced, even though they were not necessarily paid or paid for until some time after that.
Most small businesses use the “cash method” of accounting because of its simplicity. However, as your business grows, the accrual method gives you a better picture of your business, assuming that accounts receivable are not an issue.
If significant inventory is necessary , the “accrual method” may have to be used. A combination/ hybrid method may also be permissible. For example, if inventories are necessary to account for your income, you must use the accrual method for purchases and sales. However you can use the cash method for all other items of income and expenses. Federal IRS rules lead to some accounting method choices and require permission from the IRS if changes become necessary. See your IRS office for direction or consult with an accountant well-informed on the current rules and their interpretation. The accrual method of accounting may be required of all businesses with gross sales over a certain amount.
Even if you use the accrual method of accounting to help you to manage your business, your IRS return will be filed on a cash basis. If you are planning the sale or purchase of a company, it is important that everyone understands which accounting method is being used for review and why there might be any significant differences.
Bill Haman, SCORE Cincinnati
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February 3, 2010
I received a copy of a news release from The SBA Georgia District Office that their loan volume in 2009 increased by 83% over 2008. I don’t have 2006 0r 07’s figures, but my sense is that even with this substantial increase, 09’s levels are still below previous years lending.
There have been numerous articles and interviews the past year lamenting the lack of funding available to the small business community. In my workshops, entrepreneur classes and business roundtables that I facilitate, the most common complaint that I hear is that banks are not making loans to small business. I concur with this assessment, but wonder, if you had loans readily available to you, would you be hiring new team members or how would you use the proceeds to grow your business?
Steve Bloom, SCORE Atlanta
February 2, 2010
Its growing. It is definitely important. And, for good reason, its everywhere. But, is social media marketing a line-item in your 2010 budget? Isn’t it free? Trouble is, many business owners know little about social media so planning and budget management is a real business challenge.
To many the processes are confusing, complicated and the results frustrating. Is that you? Let’s consider a few myths of social media.
One: Social Media is Free
Yes, you can quickly create a presence on the top three social media sites – Facebook, LinkedIn and Twitter. And, you can create accounts on other sites such as Blogger, YouTube, Flickr and Digg. That too is almost free but incorporating the tools into a business marketing system that produces meaningful results requires time, marketing savvy and money. Social media marketing is far from free.
Two: Social media profiles are brief bios or short company descriptions
You don’t need to spend much time on your social media profiles or bios; right? Unfortunately, that’s far from the case. Those that understand the strategy and importance of social media profiles are obtaining far better results than those that don’t. Profiles are very important and need to match your business goals and objectives.
Three: Anyone can do it in-house
Ask yourself, do you have the experience? Are you using the most appropriate strategies and the right tools? Fact is, few businesses have in-house teams with the experience required to launch an effective social media marketing campaign. And, many lack the resolve to allocate the necessary resources needed to obtain meaningful results.
Social media marketing is a fundamental shift in the way individuals network, organize information and communicate. Today, businesses are leveraging technology in more ways than you can possibly imagine. Ask your SCORE advisor for assistance developing a plan for your business if you need help.
Please leave a comment below if you have specific questions about social media. Anything to tell us with respect to the lessons you learned last year with social media marketing?
Greg Magnus, Richmond SCORE
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January 30, 2010
Think from the Customer’s Perspective
Remember that old advertising adage, “Sell the Sizzle Not the Steak.” Of course, it referred to getting the readers attention by making the promise of a memorable dining experience – rather than the availability of a well-prepared meal to satisfy your hunger. Those marketing experts used the phrase as a metaphor in appealing to a customer’s perceived desire to get the most benefit from a product.
People don’t just buy products or services. They buy the benefits that fulfill their needs, which are derived from the products.
The best sales people in the world understand human nature almost intuitively. Think of how much more you can sell if you see their needs or wants from THEIR perspective and not from yours. You must sell your product or service because that’s your business. They will only buy if it satisfies THEIR needs. So, once you ascertain what your customer’s real needs and wants are, you can adapt your sales approach to exactly fit what they want to buy.
Leave comments of some of your favorite sales ideas and they’ll be used in future posts.
Alvin Roselin, SCORE New York
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January 28, 2010
What You Need to Know
You should definitely prepare a Personal Financial Statement as an integral part of planning your business. If you plan to apply for a bank loan, a personal financial statement will be required. Since a new business usually has little or no assets, the bank will want you to provide the necessary collateral personally. They will want to determine your capacity to make loan payments if the business is not able to do so. The bank’s first concern is being sure that they will recoup their loan either from the company or from you personally.
Even if you do not plan to get bank financing, you should complete a personal financial statement, so you fully understand your financial situation… how much you can afford to put into the business,,, how much you have to cover possible contingencies… how much you have left to live on and to meet personal and family emergencies. You will be the largest investor in your business in terms of finances and personal time and effort. If a bank deems it necessary to understand your personal financial situation before agreeing to bet on your success, you should deem it necessary to be fully aware of your situation as well. In effect, you are acting as a bank and loaning the new venture the necessary money. Put the least amount possible in as capital and the rest in as a loan.
In the SCORE Template Gallery, you can find a “live template” for a Personal Financial Statement (as well as many other useful templates) which you and any partners should complete that you will need. Each bank will have its own form which will be similar.
It is strongly suggested that you take the time to fill out this financial statement as part of your business planning to understand your financial capability to go into business and to determine what additional funding may be required.
Bill Haman, SCORE Cincinnati
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January 27, 2010
When You Should & Shouldn’t Freeze Your Credit
I have discussed in previous blogs the availability of credit, the SBA initiatives, the difficulty in securing financing and today would like to share a financial planning tool that you might want to consider.
Accessing credit is still difficult in this environment. Your business consistently requires you to update your business plan, but have you considered freezing your credit report? This tool is one of the most effective ways to protect your economic identity. Sealing your credit information is seamless and inexpensive and all three credit bureaus participate in the process. Most important, when you need to have others gain access to your credit information for loan applications and other services, it can be done quickly and cheaply.
Each state has different requirements but the costs to freeze your credit will range from $3 to $10 per bureau, a cost effective procedure to protect your identity. The cost to temporarily ”thaw” your credit report for one creditor for a specific period of time ranges from free to $10 per agency.
ClarkHoward.com suggests: When shouldn’t you freeze your credit.
“If your credit reports are accessed often for work or because you create new accounts with various financial institutions on a regular basis, it is not suggested that you freeze your accounts. The costs to continually “thaw” your reports would tend to be excessive.”
You can freeze your credit at the following bureaus through these links:
Continued Success!
Steve Bloom, SCORE Atlanta
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January 26, 2010
Importance of Social Networking for Your Business
Not convinced you should consider social networking for your business? Then take a look at the numbers:
- More than 350 million users are active on Facebook
- 50% of active users log on to Facebook in any given day
- More than 35 million users update their status each day
- More than 55 million status updates posted each day
- More than 2.5 billion photos uploaded and 3.5 million events created each month
- More than 700,000 local businesses have active Pages on Facebook
- Pages have created more than 5.3 billion fans
- Reference: Facebook stats
And, its not just Facebook anymore. For example, Google and other search engines use social media content when determining the ranking of web pages (SEO). Yes, Facebook is good for SEO and it has been very good for businesses for some time now. (more…)
January 23, 2010
Quality is Key, Not Price
You’ve heard the old adage about selling – the sale begins when the customer says no. That’s when you start getting creative and thinking of ways to make that sale. I developed an approach – or a mantra – in my 40 years of trying to convince a client to use my services. I’ve always tried to hone my selling technique to a point that brings the customer to the conclusion: The quality remains long after the price is forgotten!
As a producer of message films – PSAs and video news releases – I found that many of our competitors offered the “same” services at a lower price. Undoubtedly, they were good mechanics and knew how to produce a film. So, it was my objective to convince the client, especially a new client, that my company would ALWAYS deliver the clearest, most creative message that would reach & change the attitudes of their target audience. We were experienced communicators, not just film production technicians.
Especially now, during this recession, it must be quality and service plus the perceived guarantee that the buyers will get more than their money’s worth. Don’t rely on competitive pricing because you do get what you pay for.
Quoting an associate: “When a SCORE client proposes their competitive advantage to be price, I always tell them that price differentials are only for commodities. I tell them they should be the highest price supplier.”
When selling creatively you must convince the customer that they will get MORE than what they pay for and, odds are, you will make the sale.
If you have some interesting sales tips, use the comment box to share them with me.
Alvin Roselin, SCORE New York
View posts by Alvin
January 21, 2010
Four Key Financial Statements You Need
Cash Flow Forecast: This is the most important financial working tool for your business. If you run out of cash, you will probably go out of business. The forecast should itemize by month all of the income and expenses expected by month. For each period, at the top is the available cash at the beginning of the period, then a listing of all the forecast income and expense items and ending with the cash available at the end of the period.
The bottom line cash flow will show any negative cash flow over the period forecast. This indicates the total funding that will be needed and when it will be needed. It is highly recommended that a 10-15% contingency be included to help assure that there is sufficient funding. Next to each forecast column is an actual column into which period actuals are inserted.
Profit and Loss Statement: This statement is similar in format to the Cash Flow Statement but includes other items which are necessary to calculate income or loss for tax purposes. The P&L Statement would exclude such non-deductible expense items as principal payments on a loan and cost of capital equipment but would include amounts for depreciation and amortization. This is the key statement to determine when the business will become profitable.
Balance Sheet: A balance sheet is a summarized statement of the financial condition of a business at a specific date. It lists all assets such as capital property, inventory, cash and accounts receivable as well as liabilities such as long and short term debt and accounts payable. The difference of Assets less Liabilities is Net Worth.
Breakeven Analysis: It is important to be able to calculate how many units, at a given price, need to be sold in a period of time to break even.This can also be used to evaluate price changes, changes in cost of sales, or in fixed or variable expenses.
Bill Haman, SCORE Cincinnati
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January 20, 2010
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