New Commercial Business Loans from the SBA
July 31, 2005
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New Commercial Business Loans from the Small Business Administration (SBA)
If you are seeking a loan guarantee from the SBA, there are other aspects of the SBA 7(a) Loan Program you should know about.
You should be aware of the general terms and condition to expect if SBA is involved in the financial assistance. While the terms of SBA guaranteed loans are negotiated between you and the financial institution, you can expect the following:
Maturity: The actual approved maturity varies according to the prudent economic life of the assets being financed and the applicant’s ability to repay — subject to the following maximums:
- For working capital: maturity up to 7-10 years
- For machinery & equipment: maturity up to 10-25 years
- For building construction or purchase: maturity up to 25 years
Maturity is a function of a business’s ability to repay. All loans supported by the SBA shall be repaid over the shortest possible time period, without causing undue hardship to the cash flow of the business.
When loan proceeds will be used for a combination of purposes, the maximum maturity can be a weighted average of those maturities, which results in level payments. Or, it can be the sum of equal monthly installments on the allowable maturities for each purpose, which results in unequal payments, with a higher requirement for repayment during the initial term of the loan.
Interest Rates
Interest rates are negotiated with the lender. They are tied to the prime rate and may be fixed or variable. However, these rates cannot exceed SBA maximums of up to 2.25 percent over prime for loans of less than seven years, and up to 2.75 over prime for loans of seven years or longer. Loans of $50,000 or less may be subject to slightly higher rates in order to induce lenders to make these smaller loans.
The interest rate for guaranteed loans reflect prevailing market rates and can either be fixed over the life of the loan or can fluctuate with the market. Most 7(a) loans are amortized with a variable rate structure.
Percentage of Guarantee
The SBA provides its guaranty on only a portion of the total financing provided by the lender, not the entire amount. This is done to both stretch the limited resources of the SBA so it can reach more small businesses and to make sure the lender maintains a certain amount of risk on every loan. As a result, there is a lender share and an SBA share of each loan. The SBA share is also known as the guaranteed portion.
The maximum amount of SBA’s share may not exceed $750,000 to any one business, including its affiliates. By law, there are several specific exceptions:
- The Pollution Control Loan Program, which has an SBA share limitation of $1,000,000;
- The International Trade Loan Program, which has an SBA share limitation of $1,000,000 unless this type of loan is accompanied by an Export Revolving Line of Credit loan where the combined limit is increased to $1,250,000; and
- The DELTA Loan Program, which has a total dollar limit of $1,250,000.
The maximum amount of SBA’s guaranty may not exceed 75 percent regardless of the total dollar amount of the loan to any one business, including its affiliates. By law, there are several specific exceptions:
SBA may guaranty up to 80 percent of any loan for $100,000 or less, unless the applicant has other loans guaranteed by SBA which in combination with the proposed loan exceed $100,000 in total.
- SBA can guaranty a loan under the DELTA program for 80 percent.
- SBA can guaranty a loan under the Export Working Capital Loan Program up to 90 percent.
Therefore, for all loans except as referenced above, the maximum loan amount with the maximum percentage of guaranty would be $1.0 million with a 75 percent guaranty. In this case the SBA share would be $750,000.
There is no prohibition against SBA making loans over $1.0 million, but in these cases, the percentage of guaranty would be less than the maximum. As an example, SBA could provide a 50 percent guaranty on a loan for $1.5 million.
Guarantee Fee
When a guaranty loan is approved, the participating lender must pay SBA a guaranty fee. This fee can, and almost always is, passed on to the borrower at disbursement. The borrower can pay this fee from the working capital loan proceeds of the loan. This fee is based on the maturity of the loan and the amount of the SBA share.
For loans with a maturity of 12 months or less, the fee is 1/4 of 1.0 percent of the guaranteed portion of the loan.
For loans with a maturity exceeding 12 months, the fee is:
- 3.0 percent on the first $250,000 SBA share;
- 3.5 percent on the next $250,000 of SBA’s share; and
- 3.875 percent on the final portion of SBA share.
Example: On a loan for the total amount of $600,000 with a 75 percent guaranty, the guaranteed portion would equal $450,000. The guaranty fee would be $7,500 ($250,000 X 0.03) plus $7,000 ($200,000 X 0.035) for a total of $14,500.
More in the New Business Loans 101 Series
How People Evaluate Proposals
July 28, 2005
This article is short but packed with valuable insights. Take the time to print it off, re-read it later and think about what the author says.
People Are Either Internally Or Externally Motivated
People EVALUATE things, people and situations based upon either an internal or external frame of reference or context. You can be more effective in communicating with them by aligning with their context or frame of reference.
Internal People evaluate things based upon what they think. They provide their own motivation and want to make their own decisions. They are often perceived as stubborn and find it difficult to accept direction from other people. They might ask you for your opinion, but do not mistake that for them asking for your assistance in making a decision, they will still want to make up their own mind.
- Tell them its up to them, only you can decide what is right for you, agree with them.
External People do things because of what they perceive other people think. They have difficulty deciding for themselves. They want to know what other people think, what the experts say, who else is using the product and whether or not the product is popular.
- Show them testimonials, 3rd party references etc.
The next time you interview an employee, customer or business partner look for the things they say and the way they say it — if you listen carefully they will reveal whether they are external or internal. Try the tips and ideas mentioned above, they are powerful and they work.
Naming Your Company - How To BOOST Your Image!
July 27, 2005
Choosing a memorable name for your company has never been more important. Look at these statistics:
- It was only in 2000 that Inktomi announced there were more than 1 billion pages on the Internet.
- Today Google has over 8,058,044,651 web pages indexed, new pages are being added each day!
In the beginning, an Internet company would succeed simply by placing an e or and i in front of its name. Another strategy was to .com your name and then grab all the good keyword names such as Drug.com, Wine.com and advertise it to the hilt.
Business Name Should Reflect or Communicate Value
For example, when we first started our company we named it the Carpediem Group Inc. Now before you start laughing there is a good marketing lesson in what we have done to reposition our company over the last five years.
First, let me explain the mistakes we made when we chose that name:
- it had meaning to us: our ego was stroked and we felt it communicated a development focus and a sense of urgency;
- no one could spell or pronounce the name: on the phone, or in person, I would constantly have to spell the name to people;
- most people did not understand the name: if you did not know Latin or were not involved in personal development, the name was not memorable. However, at least 10 times someone has commented on the “seize the day” connotation. Only ten times!
Needless to say, one of our biggest marketing mistakes! Now what have we done? We have given our company a new name:
- The Company Workshop: this name communicates our primary benefit or value — we provide business developmental services, processes or workshops for business owners.
- Web site names: we have since registered a number of domain names starting with BusinessQuickTips.com, BusinessTipoftheDay.com and My MarketingManager.com, to name a few.
Each of these names communicates a sense of value or benefits to prospective clients. The Company Workshop and the domain names mentioned above all communicate a ’story’ at the core of our business philosophy. Take The Company Workshop, for example. Our core belief is that business development is a process and takes time. The name is part of our story or presentation.
Other naming tips:
- A short name has better potential for being remembered. Examples include eBay.com, Netscape, Yahoo! and of course, Amazon;
- Can people spell it? Our first name, Carpediem Group, was difficult for most people to spell;
- Availability: make sure your name is available. With worldwide competition and more people trademarking and protecting assets, you must make sure your name will not invoke a potential law suit or conflict with an existing company;
- Is it memorable? If people do not remember it, they cannot use it;
- Is it easy to pronounce? If it is difficult to roll off the tongue, it is also easy to forget.
- Make it easy to spell. Kwik Kopy Printing is a memorable name with a value/benefit statement that is easy to remember.
5 Indicators Of Lousy Customer Service? Are You Guilty?
July 27, 2005
No one likes to think they have lousy customer service — in fact I think we often have difficulty admitting that we are guilty. Here are my observations and experience I had recently with a supplier/partner recently:
1) Broken commitments: this basically comes down to over promising and under delivering. Making promises and then failing to follow through is a problem — it becomes a big problem when it happens again and again.
2) Not returning phone calls: it does not happen to me very often — I will give anyone the benefit of the doubt. But when it keeps happening after we have talked specifically about improving communication and they agreed to call me back within a specific time frame and do not call — I get angry, feel taken for granted, overlooked and ignored. Not exactly the type of relationship anyone would want to have with a customer is it?
Be courteous. If you are going to be tied up and unable to return phone calls — the least you can do is change the message on your system so that callers will understand that you are not going to be able to respond quickly — or provide them with an option to speak with someone else who could help. If you are in sales or customer service there is no excuse for not being accessible — technology can help keep you in touch with your customers, use it!
3) Not answering e-mails: there are solutions i.e. wireless e-mail, an auto responder stating you are out and will return the message within a specific period of time. BTW I read a report recently that most online companies are not able to answer customer service e-mails faster than 24-48 hours. That is a shame. They should at least be answered the same day. Another option is to get someone else to read, prioritize or even answer your e-mail.
4) Telling people you have been really busy: do you think your customer really cares that you have been busy with something or someone else? She cares about herself, her needs and wants. Hey we are all busy — when you use being busy as an excuse for not responding or doing something you promised — you basically communicate that someone else is more important than I am. Bad, bad idea.
5) Telling the customer that your project is not as high a priority as some other: HELLO! What a stupid thing to say. What a great way to insult someone. If you are unable to handle the project or not meet a commitment — be proactive about it, apologize and tell the customer how you plan to handle the situation. You will be respected and show your commitment to the project.
Someone once said — People do not know how much you know — until they know how much you care. In sales and customer service this means being proactive, keeping your commitments and working hard to maintain communication. Is that too much to ask?
Two Things Nobody Will Tell You About The Problem With Your Sales Pitch
July 27, 2005
The original question was: my current sales pitch does not seem to be working. How can I find out what I need to change?
Most of the time the source of the problem is either failing to listen to your prospect, or not being able to connect the dots between their problem and your solution (your product or service).
1) Listen To The Prospect
Remember, your customer does NOT care about you, your products or services! They care about themselves! Your job is to show them that you care.
How do you know if someone cares? The primary tool most people use is to listen to what is being said.
Key Point
If a customer begins to open up to you and share, make sure you let them know that you heard it. Simply, paraphrase what they said. When they hear it, they will know you heard them! This automatically translates into trust. Trust is the foundation of every business relationship. If there is no business relationship, there is no sale
For example, I was making a presentation once and the prospect said: Sounds good to me! — I then repeated back to him Sounds good? Great! Let us do up the paper work so we can get started.
A client told me about his frustration with a supplier and I asked him: What have been the implications of ______ problem? He proceeded to tell me what it cost in time, energy and a lost business opportunity. The information he provided told me a lot about his values — what was important to him. In other words, he told me how to sell him!
2) Trying To Control The Meeting With Your Presentation
When I speak of control I mean using a formal presentation to make your sales presentation. Do not rely totally on your presentation to make the deal. You are making the presentation. People buy from people — the tools you utilize (brochure, power point presentation, etc.) are there to help put some structure around the information. They help you communicate — you make the deal.
Second Key Point
Question: who is in control of a conversation? The one talking or the one listening?
Answer: I say the one who is listening is in control.
As you are busy talking, the other person has the ability to just sit back and create perceptions, make decisions and form judgments — they are in control. Because you cannot read their minds and unless they do more talking than than you, you will never truly know what they are thinking! If you do not know what they are thinking or do not let them talk, how in the world can you expect to make a deal?
The only way to control a presentation is to make sure the other people are talking more than you! Plus make sure you are armed with good open-ended questions that you can pull out and use when appropriate to keep them talking. For example,avoid simple questions that elicit a yes/no response. They do not help you to understand how the customer is progressing in the sales process.
Change Your Thinking
Stop thinking of things from a presentation viewpoint.
Start to think of your sales presentation or proposal more like an interview — like a good reporter trying to get all the facts.
Every sales interview must uncover the prospects need or want. The only reliable way of accomplishing this is through the consistent application of PROBING QUESTIONS that cause the prospect to reveal themselves. Now that is control!
Stop Talking! Start Listening!
July 27, 2005
A common myth is powerful speech and the ability to articulate are the skills which make someone able to influence another.
Effective Communication Is Not A One Way Street
The power to influence comes from the ability to LISTEN, empathize and connect with someone. Why? Because the one who is listening is the one in control of a conversation.
Stop Thinking About The Next Thing You Are Going To Say
Powerful LISTENING skills begin with learning how to remain EXTERNAL in a conversation. This means being able to shut off your self talk for the time you are with someone and just listen. When the person is finished, you can think and respond.
In its most basic form being EXTERNAL means caring more about the other person’s feelings than your own. That means you have to LISTEN.
Beware Of Your Negative Self Talk
If you have a lot of negative self talk and are worried about what you are going to say next, you will not HEAR what the other person is saying to you.
Everyone has been in the presence of someone who really cared about and understood them. You really felt HEARD by this person and instinctively TRUST them.
Show Them You Care
A wise person once said, ‘People don’t care how much you know until THEY know how much you CARE.’
In a conversation the only way they will know if you care is if you LISTEN and then reflect back to them what they have said. I am not suggesting you immediately parrot back what they say — that would be annoying. Rather, paraphrase what they said and add your comments, observations and thoughts to the conversation.
Listening is the foundation of effective communication. Control the conversation by listening!
Three Ways A Small Business Can Attract Talented Personnel
July 27, 2005
The issue of attracting personnel to a small business is a challenge. Therefore, the answer you seek lies in the proper selection of the right type of personnel. Here are my insights on how to attract the right people:
- Small Businesses Need Leaders: in a small business there is much more of an opportunity for employees to test and flex their leadership wings. Provide prospective employees with opportunities to manage, control and operate key areas of the business.
- Small Business = Big Opportunity: most small businesses are often forced to make do. For an aggressive, hungry individual determined to make a reputation and earn a promotion — this is an ideal opportunity. They can dive in and help. In the process they gain experience, knowledge and skills they would not have had an opportunity to develop.
- Small Business = Being Close To The Owner: in a small business you are anything but a number. Close relationships develop between employees, employers and suppliers. There are people who like small, informal groups. They would make great prospects for a small business.
Obviously, anything you can do to offer profit sharing, health benefits and retirement plans will go a long way to help attract the right people. However, it does not matter how much you try — the wrong person in the wrong job is a losing proposition. Start with the right people and you will be all right.
Recruiting Guidelines
- Screen Applicants: when recruiting screen for indivduals seeking leadership opporunities.
- Growth Oriented Individuals: look for individuals that have a history of seeking promotions and personal growth and development.
- Smaller Is Better: use your greatest asset — your small size as a carrot for people sick of working in a big company or being taken for granted. They will work hard in a smaller company where they feel appreciated.
I Am Buying A Franchise — How Do I Get A Loan?
July 27, 2005
I am looking to buy a coffee house franchise called ________. I have no clue on how to get a loan from the bank. Do I need a proposal? What should it include? How do I start?
The franchise should be able to help. After all, it will have been through this before and will know all the questions a bank asks. It might even have a business plan you can use. Read more
How Do People Make Decisions?
July 27, 2005
Making a decision is quick. It happens in a moment. But getting ready to make a decision can take a long time.
Understanding how people make decisions can help in communicating with them more effectively and help them arrive at a decision, faster.
People make DECISIONS because it either looks right, feels right, sounds right or makes sense to them. We often tell ourselves we make decisions based upon logic and reason, but often a decision is an emotional one that we justify with logic.
Looks Right People make decisions based upon how they see a picture in their minds of how it literally looks right. They like examples or graphs, etc. Show them pictures, paint them a mental picture with words. They trust what they can see.
Sounds Right People do things because they hear a series of words which sounds right to them. They like to hear about things. Tell them about your product, pay attention to your voice intonation to ensure it shows confidence and sincerity.
Feels Right People makes decisions best by letting them try the product out so they can get a good feeling about it. They literally feel a sensation in their body that feels right.
Makes Sense People need reasons for what you want them to do that makes sense. Give them facts, data and reasons. Answer the ‘why’ for them. They use information in a way that produces a feeling that ‘makes sense’ to them.
Communication Tips
Listen for obvious conversational clues. Listen for key phrases in your conversation “Well that makes sense to me!” or “Looks OK to me.” Another is “Oh, that feels good!”
By listening to what people say, asking questions and observing their behaviours, they will literally tell you how they go about making a decision.
Selecting Targeted Search Engine Keyword Phrases
July 27, 2005
Often, clients frequently ask their search engine optimization company to target general and highly competitive search engine keyphrases. Targeting such terms is usually not worth the effort. Anysearch engine optimization expert worth his/her salt will tell you that the keyphrase selection process is the single most important step in a search engine optimization campaign.
Once you select the correct keywords how can you refine the keywords to increase relevance?
Use Modifiers To Transform Keywords Into Highly Competitive Keywords
The good news is that today more than ever it is important to accurately write your keyword phrases to target your best customers and prospects.
By adding a simple modifier you can take an ultra-competitive, general keyphrase and transform it into a phrase that attracts the exact people who are looking for what you offer, and for which high rankings are attainable. A classic case of “less is more”.
The first and most obvious modifier is geographic. If your products or services are limited by geographic area, it is probably not worth going after a highly competitive term that does not specify a region. For example, a homebuilder who works exclusively in the Houston area would probably not find it worth his time or effort to target the general keyphrase “homebuilders”, considering that good positions for one word keyphrases are exceedingly difficult to obtain and that the vast majority of people who type this keyphrase are not looking for a homebuilder in the Houston area. Adding geographic modifiers (in this case “Houston homebuilders” or “homebuilders in Houston”) makes search engine keyphrases easier to target and also attracts a much more targeted visitor.
If you only sell blue cars, and there are many other colors of cars available to the public, a large percentage of people searching for “cars” are probably not your target audience. As with geographic modifiers, the addition of descriptive adjectives makes your search engine keyphrases easier to target (”blue cars” will almost always be easier to target than “cars” alone). Also like geographic modifiers, descriptive adjectives help attract visitors who are looking for exactly the products or services that you offer.
Why should you expend huge amounts of effort to achieve high rankings for a phrase when the traffic from it isn’t comprised primarily of your ideal visitors?
Descriptive Nouns = Targeted Traffic
Likewise adding a descriptive noun can take a keyphrase that attracts diverse, non targeted traffic and transform it into a phrase that attracts exactly the type of traffic that you seek.
For example, you own a company that specializes in internet marketing. When you consider the keyphrase “internet marketing”, it’s easy to see that a person searching for that phrase can have many motivations - not the least of which would be trying to learn how to do it themselves. When you add a descriptive noun modifier, such as “companies”, “consultants”, or “firms”, you are suddenly targeting exactly the type of traffic you want - someone who is at the point where they are looking for a company that offers the service (not information on the service itself).
Of course, as with all other modifiers, this also has the additional benefit of making the keyphrase much easier to target.
Think of the Searcher
Consider the likely motivation of the searcher when you are trying to decide upon keyphrases, and there are many modifiers which generally (but not always) attract the wrong type of traffic. These low quality modifiers include “free”, “sample”, “ideas”, “advice”, etc.
Adding low quality modifiers would give you terms such as “email marketing advice”, “email marketing ideas”, “free email marketing”, etc. These terms would probably attract what can be called “conversion traffic”. Are there a handful of these people, clearly looking to do things on their own, that might convert to paying customers? Certainly.
Should you make an effort to attract this traffic when you have better terms, such as “email marketing consultants” or “email marketing firms”, to target? Probably not.
Modifiers in search engine phrases are used for two main reasons:
- to increase the percentage of ideal prospects in the traffic the phrase attracts.
- to find terms that are easier to target on search engines.
Adding the right modifiers to your search engine keyphrases will increase your chances of success and drive better quality prospects to your small business web site.
How accurate are web log reports?
July 27, 2005
Well that depends. To answer the question requires an understanding of a few important facts.
Server Configuration
All log analysis tools report statistics based on the contents of the log files. With many types of servers, the log files accurately describe the traffic on the server (i.e. each file or page viewed by a visitor is shown in the log data).
However, web log files are trickier, due to the effects of caches, proxies, and dynamic IP addresses.
Caches are locations outside of the web server where previously-viewed pages or files are stored, to be accessed quickly in the future. Most web browsers have caches, so if you view a page and then return in the future, your browser will display the page without contacting the web server, so you’ll see the page but the server will not log your access. Other types of caches save data for entire organizations or networks. These caches make it difficult to track traffic, because many views of pages are not logged and cannot be reported by log analysis tools.
Accuracy Is Approximate
Caches interfere with all statistics, so unless you’ve defeated the cache in some way (see below), your web server statistics will not represent the actual viewings of the site.
The logs are, however, the best information available in this case, and the statistics are far from useless. Caching means that none of the numbers you see are accurate representations of the number of pages actually views, bytes transferred, etc. However, you can be reasonably sure that if your traffic doubles, your web stats will double too.
Put another way, web log analysis is a very good way of determining the relative performance of your web site, both to other web sites and to itself over time. This is usually the most important thing, anyway– since nobody can really measure true “hits,” when you’re comparing your hits to someone else hits, both are affected by the caching issues, so in general you can compare them successfully.
If Accuracy Is Paramount…
If you really need completely accurate statistics, there are ways of defeating caches.
There are headers you can send which tell the cache not to cache your pages, which usually work, but are ignored by some caches.
A better solution is to add a random tag to every page, so instead of loading /index.html, they load /index.html?XASFKHAFIAJHDFS. That will prevent the page from getting cached anywhere down the line, which will give you complete accurate page counts (and paths through the site).
For instance, if someone goes back to a page earlier in their path, it will have a different tag the second time, and will be reloaded from the server, relogged, and your path statistics will be accurate.
Defeating Cache Can Reduce Website Performance
However, by disabling caching, you’re also defeating the point of caching, which is performance optimization– so your web site will be slower if you do this. Many choose to do it anyway, at least for brief intervals, in order to get “true” statistics.
Dynamic IP Addresses & Proxies
The other half of the problem is dynamic IP addresses, and proxies. This affects the “visitor” counts, in those cases where visitors are computed based on the unique hosts.
Depending, on your which web log analysis software you use, it may assume that each unique originating hostname or IP is a unique visitor, but this is not generally true. A single visitor can show up as multiple IP addresses if they are routed through several proxy servers, or if they disconnect and dial back in, and are assigned a new IP address.
Multiple visitors can also show up as a single IP address if they all use the same proxy server. Because of these factors, the visitor numbers (and the session numbers, which depend on them) are not particularly accurate unless visitor cookies are used (see below). Again, however, it’s a reasonable number to throw around as the “best available approximation” of the visitors, and these numbers tend to go up when your traffic goes up, so they can be used as effective comparative numbers.
Cookies Can Help
As with caching, the unique hosts issue can be solved through web server configuration. Many people use visitor cookies (a browser cookie assigned to each unique visitor, and unique to them forever) to track visitors and sessions accurately.
Some web log reporting software can be configured to use these visitor cookies as the visitor ID, by extracting the cookie using a log filter, and putting it in the “visitor id” field. This isn’t as foolproof as the cache-fooling method above, because some people have cookies disabled, but most have them enabled, so visitor cookies usually provide a very good approximation of the true visitors.
If you get really tricky you can configure web log stats software and/or your server to use the cookie when it’s available, and the IP address when it’s not (or even the true originating IP address, if the proxy passes it). Better yet, you can use the concatenation of the IP address and the user-agent field to get even closer to a unique visitor id even in cases where cookies are not available. So you can get pretty close to accurate visitor information if you really want to.
Know Your Web Log Reporting Software Capabilities
Not all web log analysis software is created equal. Most small business sites use whatever their web host provides. Surprisingly, many of the small business web site owners I have spoke to do not even look at their web log stats.
Webalizer is a common stats software freeware program that many hosts use but it is very limited in what it shows. For, example it doe s not display search engine hits and keyword phrases used by visitors to find your web site. In that sense I think it is quite useless.
AWSTATS is another freeware web log stats application that is PHP based and at least includes the search engine hits and keyword phrases in it’s standard report.
Webtrends is a robust application with a robust price designed for the serious web site owner who simply must know exactly what is happening with their web site. If you can afford the price it will allow you to manipulate your log stats in mant different ways.
Conclusion
Using a default setup (caching allowed, no visitor cookies), all web log analysis software will report hits and page views based on the log data. However, this will not precisely represent the actual traffic to the site and is the same for any other log analysis tool.
There are other tools like Sawmill 6 that goes further into the speculative realm than some tools by reporting visitors, sessions, and paths through the site. With some effort, your server can be configured to make these numbers fairly accurate.
Even if you don’t, however, you can still use this as valuable comparative statistics, to compare the growth of your site over time, or to compare one of your sites to another.
Do you have the right stuff to buy a business?
July 22, 2005
This show eneded up longer than I had anticipated.
In this show:
What is the right stuff?
Sample from my book
Comfort zone
Learning zone
Anxiety zone
Book: Deep Suvival: Who livesm who dies and why.
Base hits, home runs or grand slams?
What is management?
July 21, 2005
It is the ability to get something done through people. Good management is being able to get the work done without devaluing the person. Successful employment for each person depends on the trustworthiness of the manager.
Employees are not tools you use to get the job done, then toss them back until you need them again. Beware, this devalues them as individuals. Your goal as a manager is to unlock the employee’s potential by creating an environment that:
- is safe for them to push themselves to new levels of performance;
- helps them understand and use time more effectively;
- helps them set more meaningful and inspiring goals;
- improves the use of their creativity;
- better handles and copes with their stress.
Effective managers teach, coach and invest in the employee’s personal growth. Most performance problems are personal growth or attitude problems. It takes time to teach employees how to solve problems vs. solving the problem for them. If a manager wants to stop being a ‘fireman’ putting out fires he/she must invest in some preventative training so the fires do not start in the first place.
Ask and answer this question: What is the real problem or issue? Keep asking the question until you get an answer.
Small Business Local Web Sites Spell Growing Opportunity
July 21, 2005
Survey Reveals Online Research Patterns For Local Products/Services
More and more, your potential clients are forsaking those heavy Yellow Pages paper books for Google and other engines. It’s easy and fast to do a search for “lawn care The Woodlands” — and if you don’t find one in the town of Edmonton, widen the search to “lawn care Houston” — try widening your search with Yellow Pages!
How could it? After all, how much can you possibly accomplish in a small rectangle, on a big yellow page crammed with other ads?
Survey Reveals Preferred Methods To Find A Local Products/Services
Last November, The Kelsey Group and ComStat, Inc. conducted a telephone study using a representative sample of U.S. households. It sought to determine what specific source consumers and business owners were using to find local product/service providers and whether Internet penetration had changed local shopping behavior.
The survey found that 81% of users had Internet access either at work or home and about 40% had high-speed access at home. Despite these penetration rates, the survey also found that the top methods used for local shopping were still traditional, “offline” sources: printed yellow pages and local newspapers.
Important Differences Discovered With Online Buyers
In early February 2004, The Kelsey Group and BizRate.com jointly conducted an online survey of more than 5,000 online buyers (made at least one purchase in the previous year). Search behavior was divided into non-commercial (”not looking for anything to buy”) and commercial (”looking for a business, shopping or doing research before buying”).
64% of people said that search engines that were the “main way” they find things on the Internet
6% percent said that search engines were “the only way” they find things online.
A majority in comparison did however, not rate search engines better than:
- Internet Yellow Pages
- Online vertical directories
- Telephone directory assistance.
Considering that only a few years ago using the internet to find a local business was not really considered - now search engines are on par with other media.
Differences Between General Population & Internet Savvy Consumers
The difference in the two surveys can be partly accounted for by the fact there were two different survey groups: a representative sample of the U.S. population as a whole vs. a self-selected population of users who are somewhat more “Internet savvy” or sophisticated than the general U.S. population.
The November study also revealed that people are increasingly using multiple sources for local shopping/business information.
Small Business & Geographic Targeted Advertising
The flip side of local search is geographically targeted advertising. Small business is the largest potential market. The U.S. has roughly 10 million small businesses, the majority of which have fewer than nine employees and conduct most of their business within 50 miles of their physical locations.
There are lots of dollars at stake in the local market. Depending on whose numbers you choose to believe local advertising market is worth somewhere between $22 billion and $94 billion. That includes all forms of advertising and marketing, from yellow pages and newspapers to direct mail, magazines and local TV and radio. And the larger number includes national advertisers targeting local markets.
To achieve any sizeable revenues from the local market, paid search needs to gain small business advertiser adoption. But how much of the small business market will pay-per-click (PPC) are able to penetrate?
Participants were uncertain about how the PPC auction process worked and how to determine appropriate price levels for their keywords/ads. They were uncertain about how much they might wind up spending, especially in view of the need to spend more than competitors to achieve desirable placement on search results pages. This was a significant concern despite being told they could “cap their spend.”
Participants were also skeptical about the kinds of leads they would get. While most of them wanted more traffic to their websites, they didn’t want “insomniacs who are just doing random searches and click-throughs.” All the participants were concerned about getting qualified or quality leads and didn’t want “traffic for traffic’s sake” or “a lot of junky calls.”
Obviously, you should be cautious about drawing broad conclusions from this anecdotal data. However, their concerns were:
- The complexity and time involved in keyword bid-campaign management.
- Limited ad inventory and competition between national and small business advertisers for that inventory.
- The absence of local sales channels to “push” PPC to small business advertisers.
- The lack of websites among as much as 70% of small businesses.
Still Confusion & Skepticism Even Among Heavy Internet Users
Of the businesses that had websites (all of the focus group participants were heavy Internet and search users). Surprisingly there existed confusion and skepticism among this group toward paid search. For example:
- Many participants liked the idea that PPC would enable them to calculate return-on-investment. They also liked the idea that PPC could be a cost-effective or low-cost method of customer acquisition. However, they were skeptical of the accuracy of this claim.
- Uncertain about how the auction process worked and how to determine appropriate price levels for their keywords/ads. They were uncertain about how much they might wind up spending, especially in view of the need to spend more than competitors to achieve desirable placement on search results pages. This was a significant concern despite being told they could “cap their spend.”
- Were skeptical about the kinds of leads they would get. While most of them wanted more traffic to their websites, they didn’t want “insomniacs who are just doing random searches and click-throughs.” All the participants were concerned about getting qualified or quality leads and didn’t want “traffic for traffic’s sake” or “a lot of junky calls.”
- These businesses would be inclined to try PPC if it was “simple” and they could get a “free trial.” They also liked the idea of an “independent consultant” rather than a “salesman” who could be available to help them with set up and support.
Despite many appealing aspects, participants generally believed that PPC was best suited to large, e-commerce businesses rather than to small businesses.
Local Business Web Sites Spell Growing Opportunity
Use your website to stay “top-of-mind” and deepen relationships with customers through an e-zine and build sales, too — for example, “It’s spring, which means it’s time for aerating and fertilizing your lawn.”
Local businesses leverage their local expertise and knowledge for global clients, selling their goods online, even through online auctions.
A Local Small Business Website Can…
- Attract hundreds, even thousands, of pre-qualified and pre-sold visitors, many of whom become new business, per day.
- Nurture, encourage and develop the relationship you already maintain with existing customers, increasing both loyalty and repeat business?
- A website commands undivided attention. Once they are on your site, you have their total attention (unlike a crowded Yellow Pages page)!
- Develop new ways to monetize your skills and knowledge.
- Give you the ability to update frequently and to reach your clients with seasonal specials, interesting tidbits, etc.
It’s time to develop a solid web presence, generate targeted traffic, built loyalty through a newsletter and get the edge on your local competition, and add new income streams.
How should I announce to customers that my business is moving across town?
July 21, 2005
Take a multi-pronged approach. Moving your business is a very important and critical issue. Turn this into a marketing and customer reward opportunity.
Beware - Customer Perceptions and Concerns!
Most businesses do most of their business with people in the general geographic location of where the business is located. Your customers may view your business move in one of three ways:
- Disappointment some people in the general area may not like the idea of you moving across town.
- Welcome for customers that are in the general vicinity of the new location they will welcome the idea.
- Indifference: this is probably the one that is most difficult to deal with — as these customers may be the most volatile and difficult to communicate with.
Here is how I would approach the project:
- Segment my customer list: categorize customers based upon geographic location i.e. those in the general area of the old location and those close to the new location.
- Create two announcements: I would then create two separate announcements with different content and messages. First, detail the advantages — larger premises, new equipment, expanded product line etc. as the reasons for the move stress how the move will allow you to actually serve them better. This announcement is for the customers in the old geographic area. Next, create another announcement that focuses on the fact that you are moving into the new area to serve them better.
- In a second mailing: after you are settled into the new location — invite both groups to an reopen house at the new location and provide a special incentive or bonus if they come to the open house. You may also consider a delivery service for those who just cannot get to the new location.
If you do not have a customer list — then create one quick! Or else hand out your announcements as customers come in.
How to get a loan from the Small Business Administration
July 18, 2005
In this podcast…
- SBA Loan Application Precedures
- The Basic Loan Application
- Getting Help with your Loan Application
- Tips working with lenders
Score Link http://www.sba.gov/gopher/Local-Information/Service-Corps-Of-Retired-Executives
SBDC Link
http://www.sba.gov/gopher/Local-Information/Small-Business-Development-Centers
Self Help link to the Business Plan Coach
Have question or comments?
email: gregbd@gmail.com
Toll free: 1-866-281-8281
Success In Sales Is A Numbers Game!
July 17, 2005
If you have been in the sales profession for long - you have heard a lot of ideas, philosophies and concepts presented as essential to a successful sales career. Some of them include:
- communication skills;
- closing strategies;
- presentation tools;
- pre-qualifying your prospect;
- networking;
- asking for referrals;
- after sales follow up;
- etc.
Each of these are important. There is one that surpases all of them…
Sales Activity!
Even if you master all of the issues mentioned above - if you fail to maintain the proper activity levels - you will not make as much money as you deserve. So here is a formula you can use to help you prepare and make more money.
Take The Sales Activity Challenge!
The most successful sales people track their progress daily and know exactly how much and what type of activity they need to meet their goals. Do you know your ratios? Answer these questions:
- How many leads do you need to end up with one a qualified prospect?
- How many qualified prospects do you need to get a new customer?
Below I’ve prepared a worksheet to assist you in calculating what your activity should be. Get a blank sheet of paper and answer these questions. Have fun!
Eight StepsTo Calculate Your Activity Goals
- What my monthly income goal?
- What will be my average commission/sale?
- Divide your monthly income goal (1) by average commission/sale (from Q 2) = number of sales required.
- What do I expect my close ratio to be?
- Take the number of sales (3) and divide it by your expected close ratio (4). This will give you the number of presentations required.
- What will be my close ratio in getting appointments?
- Take the answer to (5) and divide it by your expected conversion ratio (6). This will give you the number of qualified prospects required.
- What will be my conversion ratio be from a cold lead to qualified prospect?
- Take the answer to (7) and divide it by your expected conversion ratio (8) and multiply x 100. This will tell you how many raw leads you will need to start with each month unless your ratios change.
Now that you have finished the math and have your numbers it is time to focus. Focus on how to:
- increase the total number of raw leads;
- create a tracking system;
- increase your closing skills to improve your ratios.
Depending on your sales skills and sales goals you may need to get help. Ask another sales associate to look at your numbers and provide you with some feedback. Sit down and create a plan PLUS be prepared to - track your results. If you are not prepared to track your performance - get out of sales! Do something else.
Because if you do not track your performance and results you will not likely attain your goals. It is very important! Tracking will help you grow and improve your skills - best of all you will make more money… good luck!
Recruiting Employees And The Performance Process
July 17, 2005
If not number one, this issue certainly makes the Top 10 list for “Things I was not prepared for when I started my business.”
Due to the significant regional differences in employment law, I will not attempt to cover that area. Contact local, state or federal governments for the legal view on hiring an employee. I would also suggest contacting an attorney to understand your rights and obligations as an employer.
The key to happy customers is happy, motivated and caring employees. In my opinion it starts in the recruiting and performance process. Even if you do a good job with the recruiting, the performance review is what will keep you and the employee on track.
It is an opportunity to encourage, motivate and, if necessary, discipline your staff. Performance reviews are vital to building trust, setting expectations and correcting potential problems. So how can you do an independent appraisal of your employees performance? Truth is, you probably cannot. On some level, we all have a bias on important issues. Here are some tips for evaluating an employee’s performance.
Performance evaluation tips
- Ability to supervise: how would you rate the supervisor’s ability to organize, plan and lead subordinates?
- Customer Service: does this employee have a warm and sociable attitude towards customers?
- Personal Appearance: what impression does your employee’s personal appearance make?
- Personality Characteristics: how would you rate their ability to get along with others?
- Growth Potential: does this person have the ability to teach and lead others? Are they able to learn and adapt quickly?
- Safety & Office Appearance: does this person demonstrate an ability to follow the rules? How well do they look after the equipment or office space they are provided?
- Attendance: does this person show up for work, or are they routinely absent without permission?
- Attitude: how willing is this person to carry out instructions and cooperate with you and fellow employees? Are they a team player? Do you observe passive resistance or blatant argumentative tendencies?
- Ability to change: is this person able to adapt to changing conditions and learn quickly?
- Initiative: to what degree does this employee think constructively and take appropriate action? How much supervision does this person require? Are they fair and balanced in decision making?
- Dependability: how much does this person work conscientiously and in line with instructions? How much do you have to check and verify their work?
- Quantity of work: is there a satisfactory amount of output? Do they over promise or under deliver? Are they slow or do they work hard and turn out more work than required?
- Job Knowledge: to what level do they understand all phases of work? Do they excel at the job or do they lack knowledge in the job or certain areas?
- Quality of work: is there a consistent level of performance in meeting or exceeding quality standards?
You can use the above list to screen potential employees, as well. Simply pose questions to the employee and the references they have provided. I like to talk to at least one person from each of the following:
- family member: are there any potential family issues that could inhibit this persons performance? Is this person able to articulate past employment history?
- past employer: which of the areas in the above list does the past employer feel this person struggled with ? What were this person’s good traits?
- friend: again I am looking for someone who can articulate this person’s history, strengths and weaknesses.
What type of business is right for me?
July 17, 2005
Well that depends on…
Personal Priorities: realistic expectations, your intent, income, amount of work.
Start Up: starting a small, small business, increased risk, inventor, concepts, reasons businesses fail, best for an entrepreneur.
Buy a Franchise: managers mindset, reduced risk, type of franchises to watch out for, generally proven systems. Case study.
Buy Existing Business: reduced risk, established cash flow, known entity, established presence in market, maximize profit, more reliable income, expand by entering new markets.
The nice surprise at the end of the podcast is from by Rob Costlow, titlked ‘Family’ and you can get this track at and more of Rob’s work at http://music.podshow.com
Partnership Breakdown - Control Issues
July 16, 2005
When a business partnership begins to breakdown one of the issues that is often unresolved is one of ‘control’. Control is an important issue for a business. For some personality types they simply cannot function without a significant amount of control.
Often you will hear one of the partners say, “Why are you trying to change me?” or “I am here earlier and stay later than you! Now you are going to tell me Read more
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