Three Keys to Small Business Success

We’ve all heard the old adage, “If you keep doing what you’re doing, you’ll keep getting what you’re getting.” If what you’re getting isn’t good enough anymore, you need to CHANGE things. Success in business requires three things in this sequence:

1. Effective Marketing

2. Good Management

3. Clever Economy

Effective Marketing

Many business owners make the mistake of cutting back on marketing when cash-flow gets tight and wind up cutting their own throats. In tough economic times, your marketing has to be bigger and more effective than ever! That’s why it’s listed as No. 1 above. Note that Clever Economy is No. 3. Don’t “economize” on marketing or you’ll run out of fuel (clients, customers, income) and there won’t be anything left to manage or economize upon! Effective Marketing means:

* Finding those promotions and ads that WORKED WELL IN THE PAST and getting them back out UNCHANGED and in volume

* Surveying your target public very thoroughly to find out what the CURRENT hot-buttons are, precisely how to word your message, what images convey those concepts without words, and from which channels your target public is willing to receive such communication

* Closely monitoring response rates and tweaking what’s necessary to increase those response rates

There are many disciplines of expertise required to conduct and sustain a truly effective marketing campaign – Market Research, Public Surveys, Ad Design & Layout, Graphics Design, Ad Display & Placement, Merchandising, Web Mastering, Internet Marketing, Search Engine Optimization, Social Media Marketing, Marketing Analytics, Public Relations, Sales, etc. If you don’t have the in-house expertise for any one of these things, you must out-source it to someone competent.

Don’t mope about how “business is slow”. DO something about it and don’t be cheap about it. Marketing is the horse the pulls the cart. The more you feed him, the faster you’ll get where you want to go if done competently.

Good Management

Good management is measured by the ability to keep delivery and income rising. Notice that I didn’t say “ability to produce a profit.” That comes under Clever Economy. If Management simply concentrates on increasing the volume of getting out good quality products and services that people actually need at a value price, by natural law the income will flow back. So, exchange of valuable products and services has to be Management’s highest priority. If that is concentrated upon by management, the economics will be there for growth and solvency. If Management doesn’t, it won’t. That’s why this is No. 2 in the list above. Management’s job is creating quality products and services that fulfill a real and known need of their target publics; creating and maintaining channels for getting those valuable products and services to their publics; exchanging those valuable products and services with the end-user for income; and ensuring those products and services achieve better-than-expected results per the end-user. With that actually happening, clever economy is a piece of cake. Without that happening, economy becomes a bureaucratic nightmare.

Clever Economy

Lack of good management as described above is what got us into the current economic situation and the steps that are being taken to “fix” the economy are only making it worse – fiat currency from whole-cloth loaned to government at interest and pumped out in high volume as bailouts to mismanaged profit-motivated vested interests and political cronies whose products and services are artificially inflated in value so as to support non-producers and “balance the books” at tax-payer expense. That’s not clever economy. It is criminal economy.

Clever economy consists of:

* Ensuring Management has the wherewithal for high-volume production of valuable products and services and the abundant promotion thereof

* Ensuring there is at least a 150% return on any dollar spent

* Ensuring that income and reserves are greater than outgo

The means by which this is accomplished are:

* Allocating a high (at least 14%) fixed percentage of Corrected Gross Income to promotion and advertising and never cutting it back

* Identifying clearly the products or services of the company and publishing written statements thereof to all personnel

* Identifying clearly and in writing what each position in the company is supposed to be producing from their respective hats

* Implementing appropriate metrics for measuring the volume and quality of each position’s product and analyzing these weekly for the critical number(s) that need to be moved the following week

* Issuing the corresponding directives and gaining rapid compliance thereto

* Implementing an incentive plan that truly inspires excellence

* Replacing the non-producers with competent and ethical producers

* Collecting all receivables when due or earlier

* Creating an untouchable reserve disguised as a necessary ongoing expense and never touching it

* Mitigating risk

* Reducing expenses but not promotion and marketing

NOTE: Instead of “downsizing” personnel or cutting the marketing budget, make sure you’re getting the best deal possible on Cost of Goods and supplies. Another good target for expense reduction is your office rent or commercial mortgage payment as both are subject to negotiation and/or modification – especially in this climate.

If you need assistance on any of this, don’t hesitate to CONTACT US. The cost of procrastination can be staggering and can never be made back.