Mar 20, 2014 | Governance, Management, Small business
Cash flow is the lifeblood of every business, from the one person micro business working out of their garage, to the largest multinational. To call it “Lifeblood” sounds like a cliché, but the thing about clichés is that generally they are true.
Working as I do with small businesses, cash is a priority, and whilst I concentrate on the strategies and marketing planning and implementation, there is no point going there unless the cash flow is robust, or in the case of start-ups, has been sufficiently considered to offer confidence.
Unfortunately, the owner/managers of most SME’s are lousy at cash flow management.
Amongst the first questions I ask after engagement, and quite often before , are:
- How do you manage your cash flow? and,
- Can I see your debtors reports?
In response to the first, I am looking for:
- The management routines, preferably daily, but at least weekly review of cash and its management, with forecasts, action points and outcomes recorded.
- A calendar that identifies the timing of expenses and expected revenue. I also want to be assured that the calendar is a part of the review process, not something wheeled out once a year during the budgeting process.
- A rigorous process of following up debtors. You do not have to be aggressive, rude, or inconsiderate of the debtors position, but it needs to be regular, informed, and be a key part of the CEO’s management agenda. It should include escalation points that reflect trading terms, after which increased pressure is applied to debtors. This may vary with the customer, for example chain supermarkets routinely do not pay inside 60 days, but generally, once a debt goes beyond about 75 days, experience tells me that they become very hard to collect without cost and significant effort.
- Clear, simple, and up to date Trading Terms that are articulated and applied consistently.
- Immediate and clear follow up processes to manage customer discounts and claims, particularly where cooperative promotional activity is present or where there is an imbalance of relationship power, as there is with chain supermarkets.
In response to the second, I like to see the debtors report, clearly broken into appropriate categories, logically, 30, 60, and 90 days, pulled off the top of the desk, or out of the “favourites” list indicating that they are a document in constant use, updated and maintained.
Cash is too important to the left to the accountants to manage alone, it needs to be a key priority for the boss, that way, everyone else knows it is important.
Mar 19, 2014 | Marketing, Small business, Social Media
Who in business does not carry a business card of some sort, from the standard 9 X 5 bit of cardboard to the “it” thing of a USB with a resume, and published material as well as contact details on it?
It used to be that having a business card was just a cost of being in business, just like an office, some furniture, a phone line, the sign over the door, and so on.
There is a new one, the cost of an online presence.
Like all things, some do it better than others, make it really work for them, but if you want to be in business in the 21st century, you have the entry cost of a digital presence just to keep the doors open.
At the basic level, an online presence, a website, twitter account, facebook page is a it like the old business card, it is the first reference point people have for you, but they are not much more, and can be counterproductive if not done with a reasonable level of professionalism.
Two thirds of Australian SME’s that do have a “presence” take a DIY route, using family, friends, or the office intern to create and manage their digital presence, with the attendant problems, but almost half still do not have any presence at all. None! Nada! How can that be in 2014?
There are increasingly widely available the tools to make it relatively cheap and easy for SME’s to have a web presence, the starting point of successful marketing. Services like those provided by my old” tech-head” mates at Imagehaven, who as a part of their service menu, offer a great entry level service backed up by deep technical knowledge.
Would you go to a network meeting without a business card?
Mar 5, 2014 | Marketing, Small business, Social Media
Recently I have been talking to SME’s about their engagement with digital tools, and getting some pretty disturbing responses.
Many when asked will say they are engaged, because their phone is connected to google maps so they can find their way home at 3am. Not setting out to mislead me asking the question, it is just that they do not know what they do not know.
Several pieces of research around suggest that around 40% of Australian SME’s do not have a website, and a large proportion of those who do are not using them as much beyond an electronic brochure. The “last updated” box is the giveaway, even if from the content it is obvious.
At the other end of the scale, there are a few who have just so much data and options at their disposal, and often so much conflicting advice coming in, that they are paralysed with indecision.
Somewhere along the line I recall a comment, probably by Avinash Kaushik where he said something like “given me an extra hundred dollars to spend any way I like on data, and I would choose to spend $10 on the data, the other $90 on people who could understand and use it”.
Sorting the quality insights and ideas from the tsunami of stuff coming at us is the marketing challenge of the century. Automating it is only half the task, the GIGO effect takes over very quickly, you have to really understand it.
For the beginners at this stuff I advise just two measures:
- Bounce rate,
- Conversion rate.
All the other metrics that you can develop and that are now freely available can be hugely valuable, but knowing these two is a bit like knowing where the brakes and accelerator are in your car, essential for productive progress.
Quality of visitors beats quantity every time, and these two measures together give you that insight.
Feb 17, 2014 | Communication, Customers, Marketing, Small business
Digital and email marketing is just the C21st version of direct snail-mail. Why is it then that we despair when our email open rates are only 2%, when that is all most direct mail campaigns ever got?
I think we are looking at things from the wrong end of the telescope.
Direct mail, and email campaigns can be hugely successful, we have all seen and heard of those successes, and when you look at them, the reason for the success is nothing tricky, but plain common sense.
The offer was personalised and compelling
The audience was engaged and willing
The communication channel delivered the offer with a minimum of fuss
The offer was easy to access
The creative in the communication was, well, creative and appropriate to the intended audience.
Those unsuccessful campaigns we see seem to concentrate on the above list in reverse order, worrying about the layouts smart photos, intriguing puns, and all the rest of the creative artifices, relegating the value of the offer to a specific audience, and the way that offer is communicated to the bottom of the pile.
Want success with direct mail/e-mail, get the customer to the front of the queue, worry about the rest later.
Feb 10, 2014 | Change, Communication, Marketing, Small business
The most powerful way to get someone to agree with your idea is to ask them the leading question, and have them give you the answer you want.
Ronald Regan used this technique a lot.
He did not tell the American people during his election campaign: “your economic situation has deteriorated over the last 48 months”, instead he asked the famous question: “Are you better off now than you were 4 years ago?”. The answer was a resounding “NO” which led to the obvious follow up question:” What do you need to change?”
Resoundingly, he was elected.
Asking a question compels a response, and the formulation of the words to convey that response in turn provokes a deeper, more intensive processing of the question, and leaves less room for ambiguity in the way the receiver responds.
It is the beginning of an engagement process.
However, it does not always work.
Ever noticed how pollies never answer the question asked unless the answer suits them?
Watching the 7.30 report a few minutes ago (Aussie readers will know what that is) the Opposition leader, in response to pointed questioning about the announcement by Toyota today that they will cease manufacturing cars in Australia, simply pointed out that in the 5 months since the Abbott Government had been elected, all three car-makers had announced production would cease. As if the last 25 years, overvalued $A, and small scale of the domestic market had no impact.
To anyone with half a brain watching, his failure to at least address the question in some modest way, simply corroded his credibility.
So, answering a question well is as much an art as asking them, and can be used to turn the tables.
Next time you see a really good salesman, just watch and listen, and learn.
Feb 3, 2014 | Branding, Communication, Marketing, Small business, Social Media
One of the questions I am most often asked is “how do we make this go viral”. To my mind it is also one of the silliest.
The objective of “social” weather it be media, or a drink in the pub, is engagement with others. The objective of viral is, well… not sure, apart from entertaining shocking, scamming ,infecting and occasionally informing people we do not know, will probably never meet, and who will have no impact on our lives.
However, the manner of the diffusion of content on the net logically has an impact on the level of engagement an individual will have with any piece of shared content.
Something that is “e-broadcast” to everyone on a list by an unknown person or institution to the individual receivers, is unlikely to have high open and resend rates, so will not go far. By contrast, something sent selectively to individuals with whom there is already a connection of some sort will have a higher open and resend rate.
It is these open and resend metrics that count, in effect an endorsement from a sender you know that it is worth your time to open the link.
The return on effort is definitely with social, not viral.
