In my professional experience as a sales and marketing
coach/consultant, I've had the opportunity to work with
a number of small business owners on various issues related
to sales and marketing. The owners who are struggling to
keep their businesses afloat tend to engage in some, or
all, of the following mistakes that reduce profitability.
Mistake #1: They fail to market or market
inconsistently. Once you have committed to owning and running
a business you must be equally committed to marketing and
selling the products and services of that business. It is
difficult, if not impossible, to stay and remain profitable
without a commitment to ongoing concerted marketing.
Solution: Market all the time, every time.
Mistake #2: They
hesitate to "ask for the sale". Rather than seeming pushy
or obnoxious they let profit-producing opportunities pass
them by. They worry more about what someone thinks of them
than they do about bringing more money into their business.
If you find it difficult to "ask for the sale", you can
be sure that you're not bringing in as much money as you
could be.
Solution: Practice asking for the sale.
Mistake #3: They don't ask for help or
assistance in the aspects of the business where they most
need it. Most business owners possess strengths in a particular
area but whether by necessity or ignorance they often end
up working in areas that aren't part of their strengths.
When business is not going as it should they delay or procrastinate
in asking for help. Each day that goes by with your business
running at less than maximum efficiency means dollars lost
from your pocket.
Solution: Get expert advice from an attorney,
accountant, or other service professional before you really
need it.
Mistake #4: They don't follow up with
past customers. It is usually much easier to reactivate
a former customer than it is to attract a new one. If you
are not following up with past customers on a regular basis
you are reducing your profitability potential.
Solution: Develop and implement a regular
method for customer follow up.
Mistake #5: They don't take regular stock
of their expenses. Savvy business owners regularly appraise
their business expenses and find ways to reduce costs without
sacrificing quality. If you haven't completed a cost analysis
lately, you might be paying more than you need to be, which
will reduce your profitability.
Solution: At least once per quarter review
expenses and negotiate for adjustments as appropriate.
Mistake #6: They spend large amounts on
glossy, slick marketing materials and expect business to
pour in without any additional effort. Glossy brochures
and slick marketing materials are a nice addition to more
active forms of marketing such as meeting people, calling
people and speaking to people. Brochures and business cards,
no matter how beautiful, do not replace direct contact.
If you are spending money on flashy marketing materials
rather than marketing directly you will be less profitable
than you could be.
Solution: Take those glossy brochures
and hand them out directly to people at the next possible
opportunity.
Mistake #7: They spend a significant amount
of time in low-return activities (as measured by dollars
and personal satisfaction). If you are spending the majority
of your day completing tasks which are administrative in
nature and/or which can be easily completed by other people
you are reducing your profitability.
Solution: Track your time and figure out
how much you're making per hour. Hire an assistant if you
are spending the bulk of your time in administrative work.
Mistake #8: They charge less than they
desire. This challenge seems to arise especially for consultants,
coaches and solo entrepreneurs who sell services. It is
often tempting to accept less money than you need - so you
get "some money" rather than "no money". After time, working
for too little can leave you exhausted and resentful and
it takes a deep cut out of your profitability.
Solution: Commit that, at the next opportunity,
you will ask for full fee. And then do it.
Mistake #9: They make infrequent or no
use of technology which could save them time and effort.
As a business owner, you have a fixed amount of time and
energy within which you must maximize your profits. Technology
can help you do this in the form of autoresponders, voicemail,
wireless internet connections, speech recognition software
and the like. All of these tools are designed to save you
time and effort. If you are not making consistent use of
technology in your business you are likely not as profitable
as you could be.
Solution: Look for ways that you can make
your business processes more efficient by using inexpensive
technology.
Mistake #10: They adhere to outdated business
models or plans. If you do not stay up with the trends in
your business you will notice a steady decline in your profitability.
Solution: Attend meetings and conferences
that will keep you on target with your market. Implement
new means of doing business and update your business plan
at least every couple of years.
If you are serious about improving your business' profitability,
start by implementing the suggested solutions to these ten
common mistakes. Together, these solutions will help you
make more money and have more fun in your business. Try
them and see.
(c) 2004 Dr. Rachna D. Jain. All rights in all media reserved.