Where does your business stand?
Whatever your business, it is positioned somewhere on the following line:
Price Taker Price Maker
Price Takers
Price takers operate in businesses where the selling price of products / services is largely dictated by market conditions and many competitors. Examples of extreme price takers include cleaning contractors, personal tax preparers, petrol stations and convenience stores.
As a result price takers are pretty well limited to 3 basic options when attempting to achieve better profitability.
- Lowering costs and working on cashflow management
- Increasing revenues without sacrificing margins
- Juggling the overall product / service sales mix by marketing and promoting higher margin lines
Price Makers
Price makers operate in businesses where the sales price of products / services is determined by quality, consistency of delivery and service, reputation and abstract factors such as desirability and status. Price makers are concerned with margin quality rather than revenues and generally use marketing to reinforce reputation and reliability rather than sales of specific products or services. Examples of price makers include high grade cosmetics, consultants (sometimes), genuine innovators (product or service) and some patent holders.
Price makers increase profitability by:
- Opening new outlets, licensing, increasing distribution
- Improving contact and reputation with existing purchasers and suppliers
- Keeping the faith on margin quality, return on equity and targeted capital spending
No matter where your business stands it is important to develop a ‘signature’. For example – I go there for the pancakes (cafe); she didn’t waste my time and came up with a productive solution (consultant); delivery and after sales service was excellent (e-commerce); they were friendly and helpful (anyone).
Details on the issues and potential solutions involved with this topic are dealt with in the ebook -
Investing In Your Own Business
Guest – Freda L. Thomas MBA
Freda is a very experienced and focused business consultant based in New York. Her latest award winning book - Starting Your Own Business – is now available in Ebook and hard copy versions.
It’s about approach, service, and results
By Freda L. Thomas, MBA
As a business owner, you already know that these days, it’s not enough to simply show up and offer a service or sell a product.
A focused approach is needed in order to win the attention of the discriminating consumer, that’s if you sell a product, or the discerning client if your company provides a service.
How do you get focused?
- Determine what exactly are you offering?
- Does your company offer a unique spin on a common way of doing things?
- Is your product/packaging/distribution channel so unique that it distinguishes your from the competition?
- Is there some technological advancement that you can introduce to help streamline the process of either getting your product to market or introducing a service to new and existing clients?
Why is what you do needed? What specific business problem or opportunity will your services/product address?
- Does your product or service solve a problem?
- Does it make the customer feel good physically or mentally?
- Will your service improve operational efficiencies?
- Does your company provide needs assessments for any future projects, insuring that the customer remains knowledgeable regarding your ability to manage upcoming opportunities?
How will the client/customer be better off after having worked with you?
What’s really different about your firm, its services, results or approach?
- Do you have a unique distribution channel that takes into account a diminished impact on the environment?
- Do you offer free shipping?
- Is your packaging unique, something that sets you apart from the competition?
- Are you ninja on customer service?
- Are you relentless when it comes to customer feedback, sending out surveys, calling the customer to follow-up once a project is completed or a product delivered, determining their likes/dislikes about your company?
What quantifiable benefits and results can your client/customer expect?
- Do you offer guarantees?
- Can you provide evidence of prior customer’s support for your products/services and satisfaction with what you do?
- Do you have specialized certification?
- Have you won any awards for governing your firm in a certain manner?
How will these questions help you get more customers and improve the bottom line? If you’re not clear about your value proposition, that’s what asking these questions can help you clarify, so that you have a more precise understanding of what you do and why a firm or consumer should buy your product/service instead of the competitors. Getting clear will help you develop a strategic approach to going after new business as well as how to retain the customers that you have.
It’s a new year, a good time to get clear about what you do and how you can achieve greater success over the next ten months.
Check out my book, “Starting Your Own Business” to help you develop a strategic approach to getting the type of results you want for your business. To learn more about my firm, visit http://www.consultflt.com/
Guest – Dan Norris from Web Control Room
Free Tool Lets Small Businesses Monitor Web Performance in 1 Place
FOR IMMEDIATE RELEASE – 29 February 2012
Burleigh Heads, QLD, For Immediate Release – How’s business? It’s a question small business owners are
asked a lot. But it’s one that is increasingly difficult to answer because of the complexities of running a modern business. WebControlRoom.com is a free tool that
has been developed to help small businesses answer this question by providing a real time performance report with data from various sources in the one
place.
In order to thrive, small business owners need
to keep their eye on many different measures to know not only if they are on track now but whether things are heading in the right direction for the future.
Because of the myriad of different services used by small business owners these days, particularly web savvy ones, it’s not easy to get an overall picture of how things
are tracking without logging into a lot of different places and manually piecing together the puzzle.
After battling with this issue himself, Australian small business web expert Dan Norris developed a free tool,
WebControlRoom.com to do exactly that. By talking to popular small business services like Xero, Mail Chimp, Google Analytics etc, WebControlRoom.com is able to present
a one page chart showing the key stats all in the one place giving business owners the important information in seconds.
But unlike other dashboard type services, WebControlRoom.com is not just about pretty charts, Dan explains. “Big companies love pretty charts. But small business wants the right information, quickly. By focusing in on month by month comparison data, the tool makes it clear which areas of your business are going well and which ones need attention”.
“Small business owners can open their report each day from their computer or their mobiles and within a few seconds identify issues or see areas that are performing well”.
Examples of the charts include current Google rankings so business owners can stay in top of how their site ranks for their chosen keywords and newsletter opens from Mail Chimp or Klout score to measure the engagement of their audience. Revenue charts from Xero show how this month’s revenue compares to last month and colour and size coding on all charts makes is quick to pinpoint problem areas or see spikes in results.
In total there are 9 services and many more on the way and there is a slim lined version for mobiles that loads whenever the service is accessed from a mobile.
Other than supporting more services, plans for the future include a smart messaging system that provides users with sponsored improvement messages related to their performance.
WebControlRoom.com is available for free to the public as a beta release now.
About Web Control Room
WebControlRoom.com (beta) is a free tool that provides a 1-page summary of how you are tracking by talking to the systems you use in your business. 1300 760 363 | WebControlRoom.com
Copyright © 2012 Web Control Room. All Rights Reserved.
SMSF – True Crime Story
One trustee of a SMSF takes the assets, the remaining trustee is left with a penalty tax bill
A husband and wife are trustees of a self-managed superannuation fund. Unbeknown to the wife, the husband illegally withdraws all the assets, some $3.4 million, and leaves the country.
The ATO assesses the fund as non-complying, and hits the wife with tax and penalties of $3 million. Although it acknowledged that she was not complicit in the fraud, the Administrative Affairs Tribunal confirmed the tax assessment.
This is a true story.
Lesson: a super fund trustee cannot dodge responsibility by leaving all decisions to the other trustee.
Investing In Your Own Business – Q&A
Q. Is now a good time to start or rejuvenate a business?
A. We could say that anytime is a fair time to develop a business, but only if you’re fit and ready. However it is interesting to note that many well known companies were started in recessionary conditions – General Electric, IBM, Hyatt, Apple, Fedex, Microsoft, Hewlett Packard, Twitter, Zynga, Groupon – to name just a few. There are logical reasons for this, here’s 7 -
- Good investors recognize (and any business operator is essentially an investor) the need to be counter intuitive in order to obtain an edge. They know that recessionary conditions can offer significant opportunities: assets are cheaper; cycles change and longer term planning carries increased rewards.
- When times are bad, large businesses usually react by cutting variable costs; leaving potential openings for more nimble players.
- Competition reduces and established businesses look for new suppliers.
- Purchasers tend to look for value (not necessarily price driven) and reliability during recessions.
- Service standards are better regarded. Good staff are easier to find.
- Suppliers tend to offer better credit terms once you have a record as a good payer.
- If the recession is partly based on structural grounds, opportunities are available in new industries.
You will need a smart business plan and definite sources of capital to avoid becoming a recession victim.
Q. How does Investing In Your Own Business help my business?
A. This ebook reviews the strategies and positioning needed in order to develop and grow a successful business. It doesn’t offer a magic formula for guaranteed success (there are none) but does take readers through the major factors putting the odds of success in their favour.
Q. Is Investing In Your Own Business a business school style textbook, full of accounting and business jargon?
A. No – we have kept the jargon to the minimum. The ebook is as clear & concise as we can make it (in our opinion).
Q. What do you know anyway?
A. We have started, operated and managed several businesses in our time. For 15 years now we have operated Andersen Bowe, an accounting – business – tax consultancy. Over this time we have dealt with dozens of businesses and shared in their mistakes and successes. And also noticed the common threads with both.
Q. Why do you use the word ‘investing’?
A. Developing a business successfully partly requires an ‘investment’ in capital, commitment, longer term planning and effective positioning.
it’s complicated
Australia’ s economic landscape continues to give mixed signals. Not analysis, just brief comments.
Positive
- Capital investment continues to power along : mining + 60% last 12 months; manufacturing +29% last 12 months; other industries + 10% last 12 months. These figures are impressive and should lead to profit and productivity growth over the medium term (2-5 years).
- We’re gradually moving away from an unsustainable consumption and residential property boom to a more sustainable production and export orientated economy.
- Debt levels of large companies have declined significantly; improving potential financial capacity in the medium term.
Negative
- Employment conditions look set to deteriorate over 2012; with unemployment passing 6% +.
- For whatever reason, people are feeling worse off than they really are. Maybe just a phase!
- In contrast to the big end of town, small and medium enterprises (as a group) haven’t reduced debt levels, increasing vulnerability should a severe domestic downturn develop.
paraprosdokians
Definition of a paraprosdokian – a figure of speech where the latter part of a sentence or phrase is unexpected. Very useful in business. Some examples:
Do not argue with an idiot. He will drag you down to his level and beat you with experience.
Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad.
To steal ideas from one person is plagiarism. To steal from many is research.
I didn’t say it was your fault, I said I was blaming you.
Women will never be equal to men until they can walk down the street with a bald head and beergut and still think they are sexy.
You don’t need a parachute to skydive. You only need one to skydive twice.
Going to church doesn’t make you religious any more than standing in a garage makes you a car.
When tempted to fight fire with fire, remember that fire departments usually use water.
Retail Rebellion
Retailers are going through difficult times at present and much is made of the online threat to bricks & mortar traders. However online threats run third when compared to the 2 major issues directly threatening Australian retailers.
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Blog
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03.04.2012
Where does your business stand?
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05.03.2012
Guest – Freda L. Thomas MBA
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29.02.2012
Guest – Dan Norris from Web Control Room
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20.01.2012
SMSF – True Crime Story
