Tag Archives: Small Business

Raise Your Prices Now

Raise Prices NowRaising your prices is never easy, and the timing always sucks. But it’s an inevitable fact in most business models, so the key is learning how to best raise prices and still keep your customer base.

Our economy is giving everyone permission to raise their prices now.

With gas going up, airlines charging for everything and milk prices skyrocketing, Americans are getting used to hearing that prices on just about anything is going up. Which should give you a little bit of a free pass (well, almost).

The idea is not to exploit the opportunity, but to accept that customer spending might go down, and your margins might’ve been tight for a long time, and it’s simply the right time to raise prices, even if your costs haven’t gone up in the last six months.

It will be a while before price increases are as easily accepted as they are now.

Of course, if you can lower prices, that might be even better. It could make you a hero. But whatever you do, don’t allow your prices to just stay the same. Either capitalize on the opportunity to increase margins, or capitalize on increased volume via the marketing advantage of lower prices. But don’t let those prices stay the same.

NFL Draft: Lessons in Strategy

Watching the NFL Draft can be a rather fascinating process, as it was this past weekend. There’s so much excitement in the thought of grabbing that amazing talent and seeing your favorite team add to their roster, not knowing if they’re going to pan out in the end. Over the past few years, the draft has become quite a complex event, with trades up, and trades down, and trades for players, etc.

Unlike the days at the playground when two captains were picked to choose who they wanted on their kickball team, today’s NFL team management can’t simply pick the best players available. There’s a lot more to consider, and each consideration is something we as entrepreneurs must also take into account on a regular basis.

Here are some quick considerations on the draft and strategy that I hope you can easily translate into your own planning:

  1. Consider your needs. More than anything, a team’s specific needs influences the draft pick more than anything. Sure, there might be a stud quarterback waiting to get picked up, but if you’ve already got your QB of the future, then you don’t need another one. Address other needs, or support your QB by getting him a better wide receiver. Each team goes into the draft with certain positional needs they want to meet, which narrows their picks down significantly. By focusing on your area of needs, you can easily wade through the murky waters to find the types of players/opportunities that will help out the most.
  2. Consider the market. This year was not a good draft for wide receivers, so you didn’t see any picked in the first round. There are plenty of teams that need a wide receiver, but since the market for them is low, there’s no need wasting a first round pick on something you can easily get in the second or third round. Knowing the market – or better, the opportunities that the current market is providing – has significant bearing on your decisions. It doesn’t make since to invest too heavily in the best choice from a sub-par group. Either go for value (later rounds) or put it off (next year’s draft).
  3. Consider the timing. The funny thing with the NFL Draft is that no team can get everything they need to make an immediate impact. You have to choose filling certain needs and leaving other needs still empty. It becomes a question of timing: will picking up the linebacker this year have a significant impact on the team over the next three years, or will getting that cornerback? Can I put off getting the linebacker until next year and still be ok? Again, the ability to focus and plan becomes huge in the draft. The Dolphins definitely can’t fix their team in just a single year’s draft, so they picked up lots of foundational positions they know can help over the long haul. However, the Giants, having already won a Super Bowl, attached their need for secondary defense to make their team even stronger, and it will directly, positively affect their success next year. That’s just where there team is at this point.
  4. Consider your reality. Speaking of the Dolphins, you gotta know when you suck and have lots to work on, or when you are only one small fix away from making great things happen. Look at the Chiefs this year: they are clearly rebuilding, so they got rid of some of their current talent (Jared Allend) and managed to pick up additional picks in the draft. The players they picked up this year will exercise huge influence on the team for years to come, but it took admitting that you’re not winning the Super Bowl in the next couple years to make that happen. We often times hang on to our strategies for too long, not willing to define reality. The sooner you can accurately pinpoint where your business is, the sooner you can pinpoint the areas you need to address to get better.
  5. Consider your customers. Or in this case, your customers. The Atlanta Falcons picked up Matt Ryan, a quaterback from Boston College. Some people think Ryan will be great, others not so much. But the key for the Falcons has more to do with giving their fans, who’ve had a horrible year (Michael Vick, Bobby Petrino), something to hold onto. Yes, you could probably add a nice offensive lineman here, but fans don’t get excited about the offensive line. Fans like quarterbacks, and that’s what the Falcons are giving their fans. Always consider your customers – they mean too much to your business to simply overlook. Yes, they may occassionally sway you from making smart decisions, and you have to know when and where to draw the line, but often the simplest acts of good will and open communication can do wonders.

Most Profitable, Least Profitable Small Businesses to Start

Forbes magazine has published a fairly interesting article on where the profits are, and where they ain’t, in small business (< $10 mil. a year).

Thanks to Up the Ladder for pointing the way.

So, in extremely short form (I promise, the article is worth reading), here’s the list based on pre-tax profit margin averages.

The Most Profitable Small Businesses:

  1. Accounting services – I guess it pays to love spreadsheets.
  2. Legal services – I guess it pays to figure out ways to bend the rules.
  3. Dental services – Didn’t Seinfeld once wonder if they were actual doctors, then fell victim to a horrible “anti-Dentite” label?
  4. Designers – They make it a broad category – interior design, architects, graphic designers – but it’s still good news for all you freelancers.
  5. “Other” health professionals – like chiropractors.
  6. Outpatient care – It seems like there’s a new one popping up on another corner every other weekend in Dallas (along with nail salons).
  7. Insurance brokers – I really have nothing to say about this.
  8. Doctors – Surprisingly low, actually, but I guess they shell it out in payroll and insurance.
  9. Medical and Diagnostic Labs – Couldn’t they have put all the health businesses in one category?
  10. Depository Credit Intermediary – This one is surprising, and ironic. People who help people with their credit troubles are one of the most profitable small businesses you can start.

The Least Profitable Small Businesses to Start:

  1. Community Care Facilities – high payrolls, run by Medicare, Medicaid and a shortage in nurses
  2. “Other Support” Services – OK, that’s a little broad, but this goes mostly to all those services that are in highly competitive fields where the low price always wins.
  3. Beverage Manufacturers – includes soft drinks, juices and wineries, where there are so many competitors that the new guy can’t cut through.
  4. Real Estate Related Services – the market is down, what more needs to be said?
  5. Bakeries and Tortilla Manufacturing – huh?
  6. Recreation and Amusement Centers – gyms, ski resorts, etc. High, high payroll just to keep it open.
  7. Auto Vehicle Parts Manufacturing – again, only the low-cost wins, and there can only be one of those.
  8. Specialty Retailers – your niche markets like music stores. Yes, Big Box retailers are taking over here, but at the same time, if you can really, really nail the niche in a location that wants it, I actually think specialty retail could be very profitable. But that’s a lot of ifs.
  9. Alcohol resellers – kinda surprises me. You’d think this is a high profit, high traffic business, with relatively little needs for manpower. Maybe it’s the extensive inventory necessary to be open that actually makes you close.
  10. Hotels – If a room ain’t filled, they ain’t making money. That’s why there’s really no such thing as a set rate these days.

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  1. Why Businesses Have To Leverage Web 2.0
  2. Which Websites Get the Most of Our Time?

We Need More Organizers

Read this post and click the link on the Common Sense PR blog. The link highlights axioms of Fred Ross, Sr., and I haven’t read anything this good in a long, long time.

I appears as though what most of us are most impressed with are organizers, not leaders. Here are my favorite points from his list:

An organizer is not someone who leads but someone who gets behind people and pushes.

90% of organizing is follow-up.

Good organizers never give up – they get the opposition to do that.

To win the hearts and minds of people, forget the dry facts and statistics; tell them the stories that won you to the cause.

The only way to organize is to organize, not to sit around and jaw about it.

I dare you to read through the list and not find at least three points that hit home. Do us a favor and write your favorites in the comments below.

Making Connections vs. Making Impressions

Make a Connection Handshake - 200I lucked out this weekend and was able to meet and receive a presentation from Bruce Painter at a local DSWA event in Dallas. As detailed on his website, Bruce is a coach extrordinaire for both professionals and families, and he’s possibly best known as the author of The Giving Zone, a “roadmap for a contributing, winning, prosperous, and happy life.”

During his presentation, Bruce asked us all to simply greet each other, with the simple purpose of acknowledging the person you’re meeting. Sounds pretty basic, but in doing this with professionals who are clearly much better and more deliberate than I am, I realized something quite profound:

There’s a big difference between making an impression and making a connection.

I’m guilty of trying to make impressions. The signs of doing so go something like this: you often forget someone’s name, mainly because you never really heard it to begin with. You were too busy trying to think about what you were going to say next, how firm your hand shake is, and maybe the tone of your voice. Your primary concern is making a good impression.

There’s nothing wrong with wanting to make a good impression, and there’s nothing wrong with wanting to communicate effectively. However, it’s focused on you. You’re focused on how the person you’re meeting perceives your words, your posture, your vocal qualities, your hand shake. It’s very different from making a connection.

Making a connection focuses on the other guy. You try to relate to their name, their story, their words. You make genuine eye contact and you say things that are genuine responses, not canned. You value relationships enough to make hearing and understanding what they are saying is the priority right now.

Ironically, the best impressions are almost always made because a connection has been made. Yet, the mindset required for them both could not be more different.

What’s Your Oboe?

Tuning Up Your Small BusinessMy wife and I spent our Friday night at the Meyerson in Dallas listening to Amy Grant and band play with the Dallas Pops Orchestra behind. It was nice, especially for my wife who is one of the biggest Amy Grant fans on the planet.

As things got started, the orchestra began the tuning process. You know the one: you hear a single note, then lots of single notes from different instruments, and then all sonic hell breaks loose for about 30 seconds. And then they just stop.

I had forgotten that the oboe is always the instrument that starts things off. The rest of the orchestra tunes to the oboe, apparently because oboes cannot adjust intonation like other instruments. In other words, the oboe is the standard for the rest of the orchestra to compare to. It is ground zero.

Everyone needs the occassional tune-up, but what are you tuning to? What is your standard, your ground zero? In the case of business and marketing, it’s entirely too easy and too tempting to chase projects beyond your area of strategic focus. Sometimes it’s a wise move; sometimes it’s not. However, it’s inevitable, at least to a certain degree.

The key is knowing what your oboe is, and taking time on a regular basis to tune accordingly. Is your firm dedicated to providing marketing help to small business? Check in every once in a while to be sure you’re not chasing too many large corporations. Are you a designer or writer who specializes and shines in the B2B market? Then limit what you chase in the B2C world.

Identify your oboe and schedule time for tuning. Otherwise, you’ll end up tuning to a trombone or timpani, and nobody wants that.

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Hourly Rates, Eliot Spitzer and Formulas for Follow-Up: 9 Links Worth a Read

Great reading from the past few weeks – enjoy!

  1. Charging By Project, Not By the Hour: If you keep up with my blog on a regular basis, you know I’m anti-hourly rates. The Freelance Switch, one of my favorite new blogs, nails it on the head in this post. In Skellie’s words, “Setting up timers and staring at a clock can feel a little like office work.”
  2. Spitzer Can’t Communicate His Way Out of Sex Scandal: Common Sense PR captures the uselessness of damage control in the Eliot Spitzer ordeal. As Eric begins, There are times when the public is willing to forgive the indiscretions of public figures. This ain’t one of them.”
  3. The Power of Free Samples: Interesting study using instant formula samples given free to new mothers as they left the hospital. I’m not convinced this translates well into many other industries, but it’s still intriguing.
  4. The 8 Types of Creative Directors:FUNNY! I actually like the 8 Types of Bad Creative Critiques more.
  5. The Proper Way to Throw a Golf Club: Because we all need to get better at this.
  6. Advertising’s Legendary Letter by Bill Bernbach: It was 1947, and a young creative director saw the writing on the wall for his now big ad agency in an industry that was still in its adolescence at best. Very inspiring, and still very relevant. My favorite quote: “The danger lies In the natural tendency to go after tried-and-true talent that will not make us stand out in competition but rather make us look like all the others.”
  7. 11 Ways for Web Designers to Gain Exposure: Useful, common-sense tips on how to get the word out if you’re a web designer.
  8. 6 Reasons to become Self-Employed: Wisebread shares some pretty good reasons for doing it yourself in the business realm. I think the most appealing to me is no vacation days.
  9. A Simple Formula for Follow-Up: Ever get stuck in copying and pasting a follow-up email to prospects and clients? Ilise thinks you’re missing out – here’s some good advice on little things that could make a big difference.

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