Understanding and Managing Cash Flow

Key to New Business or any Business Success

Recession Proof Your Business

10 Ways to Beat a Downturn in the Economy

By Alvah Parker, Score NE Mass Counselor

There is lots of talk of recession these days. Here are 10 actions you can take to bolster your chances for your business to survive and thrive through rough times. The best time to start is right now!

1. Check Financials Regularly
When customers are under financial strain bills don't get paid, contracts get cancelled, and engagements are terminated. Checking your own financial documents (cash flow, accounts receivable, accounts payable, etc.) is imperative. Make adjustments to your business plan and daily action plan to compensate for lost or late payments.

2. Spend Smarter
Now is not a good time to buy big ticket items unless you know they will pay for themselves in a very short time frame. Put off purchases except essentials until market conditions improve. Even in good times it is important to cost justify your large expenses. What is the payback? How long does it take?

3. Write and Follow a Marketing Plan
When business is slow your time must be spent in marketing your business. Having a solid marketing plan will keep you focused on the steps you need to take. Marketing does not need to be costly but it does need to be done consistently.

4. Network
Now is the time to solidify your network. Talk to old customers, referrers, suppliers and other business owners. Networking works both ways. See how you can help them and then see if there are ways they can help you.

5. Focus on Retaining and Servicing Current Customers -
How else can you help the clients you have? Listen to them. Find out their needs during a business slow down. See how you can offer your service in a way that helps them weather the slow down.

6. Hold on to Good Employees
It is hard to find good employees so if you have them resist the temptation to cut your staff. If someone isn't performing however you can not afford to keep them on. Now is the time to get tough.

7. Don't Complain
Complaining about the economy is not productive and lowers morale. As the leader of your business it is up to you to motivate your staff by describing your vision of your business. You must show excitement about it so that they "catch" your enthusiasm.

8. Renegotiate contracts if possible
Vendors are often willing to renegotiate contracts when customers are having trouble paying bills. Ask vendors for better payment terms for those services under contract. If some of your services are not under contract, either negotiate one with lower payments or ask for a reduction in your monthly fees.

9. Bill Regularly
Have a regular schedule for sending your bills and stick to it. Delays in billing will mean your customers will pay you later. This can have a cascading effect so that you have to delay paying your bills. Late payments of your bills could mean extra fees for you and might even mean your salary and your staffs' salaries are jeopardized.

10. Take Good Care of Yourself
Worry and stress are not healthy for you or your business. Do whatever is necessary to keep yourself feeling confident, rested and relaxed. Getting support from others is often helpful. Your SCORE Counselors can help your business to stay strong even during an economic slowdown.

A Six-Month Plan for Transitioning from Employee to Entrepreneur

By Score www.score.org

Aspiring entrepreneurs often wonder how long it takes to get a small business started. The answer is, “it depends.” Some new enterprises can be up and running in a matter of weeks; others may require several months or more of diligent planning. If you currently have a job, you can pursue your small business ambitions without risking your family’s financial security (assuming, of course, that your research doesn’t interfere with your 9-to-5 responsibilities). If you’re unemployed or facing a layoff, you’re obviously eager to move things along.

A good rule of thumb is to allow six months to make a complete transition from employee to entrepreneur. By following the steps below, you’ll be able to wisely invest this time in building a sound foundation for your new business, and your future.

Assess Your Personal Strengths & Experience
Determine if you have experience in the business you are planning to start. If you don't have experience, how will you get it? An honest and thorough review of your experience and education should give you some leads about whether a particular venture is right for you. Be honest; your review must consider both personal weaknesses and strengths.
Be sure to consider the most common reason why a small business does not succeed: lack of management skills such as record keeping, personnel management, market analysis, communication skills and taxes. Many universities, community colleges and adult learning programs offer courses and seminars in these and related topics.

Begin Planning What Your Business Will Sell or Do
Ask other small business owners how they got started, what mistakes they made, and how they’d do things differently. Research your potential markets and determine whether there’s enough demand to sustain your proposed business. And, examine your idea from the customer’s point of view. What will you offer to attract them, especially if you’re competing with existing businesses?

Attend a SCORE Workshop on Starting a Business

This is a great way to learn the nuts and bolts of launching a business from veterans of the business world. The workshops cover the process of building a sound business plan with tips on information resources, legal considerations, working with lending institutions and other important topics.

Work With a SCORE Counselor on Different Aspects of Your Business
Experienced business counselors make valuable sounding boards to answer questions, evaluate ideas and point you in the right direction to find additional information. Depending on the nature of your business idea, you may work with one SCORE volunteer counselor or several.

Develop a Business Plan to See that the Business is Viable
The information you gain from research, workshops and conversations with SCORE counselors will help you understand everything necessary to start and manage your small business. Now, it’s time to put your plan on paper. Don’t worry if the answers lead to more questions. Reevaluation is an ongoing process, even for long-standing businesses. And, as you address and eliminate unknowns, you greatly increase your chances of success.

Finalize Your Plan & Gather the People and Money to Start Your Business
If you’ve prepared a thorough business plan, you’ll be ready to make a strong case for acquiring the resources you need to bring your small business planning into the “home stretch.” You’ll know what banks to approach, where to “set up shop,” how to market yourself and contact potential customers, who to hire, and what other tasks necessary to make the big jump.

Ready to Roll?
Don’t worry if, after six months, you feel unsure about moving forward. Many variables involved with starting a small business are beyond your control. Your research may also reveal that the wisest course is to wait and gain additional experience, explore other ideas or simply put your entrepreneurship dreams aside temporarily.

But if everything is ready, you’ll enjoy that proud moment when you can look at yourself in the mirror with confidence and say, “Hi boss!”

Keep your customers coming back!

In these difficult economic times, businesses will have to work harder to invite their
Customers back to do business or make purchases. If you do not give some good reasons to your customer to stay with you, your competitors will give them good reasons to leave.

The profitability of a business depends obviously on customer retention and satisfaction. Keeping your current customers is much easier and far less expensive than it is to get new customers or clients. Marketing surveys across the world confirm that keeping one existing customer is about five times more profitable than attracting one new one. To get a new customer, you have to convince someone who doesn’t know you. He or she has no particular reason to trust you. Why they will take a chance on you? Normally, a person will have to see or hear your message for a number of times before even considering you. Winning a new customer is literally a struggle.

With an existing customer, you have already done the hardest part of successfully winning your customer’s trust and confidence. At this point, you need a good customer retention strategy to have customers stay with you. You need to build a good rapport with your customers and make them feel special and valued.

Customer retention marketing
The aim of customer retention marketing is to convert buyers into loyal, long term customers. Loyal customers will return to you without even considering alternatives. Of course loyalty also has a lot to do with your company’s continuous delivery of superior value. The business must first satisfy the customer repeatedly to win customer loyalty. Customer loyalty plays a major role in sustaining profit growth.

For business, customer retention marketing is more than just an important consideration. It is easy to sell something to anybody once but the trick is to do it again and again. Top companies are able to create successful customer retention marketing plans and execute them accordingly

Here are some key principles –

Customers will return to you if they are happy and feel valued.
Marketers can take advantage of this behavior by offering promotions of various types. Promotion can be of different types starting from discounts and sweepstakes to loyalty programs and higher concept approaches such as thank-you notes and birthday cards. Promotions influence behavior such as offering announcements of special sales for loyal customers, or giving discounts to customers who return within a very limited time frame to use your services..

Businesses need to keep and analyze customer buying behavior.
Let’s take an example of some average customer behavior. Calculate the number of days between the first and the second purchases of every customer who has made at least two purchases. Suppose you find it to be 30 days. If a customer does not make second purchase within 30 days after the first one, you should react by organizing a promotion..

Customer retention marketing necessitates allocating marketing resources. You have to recognize some marketing activities and customers that will generate higher profits than others. One way to shrink your budget is to steadily allocate more of your marketing budget to more efforts with loyal customers. When you have a choice, instead of spending the same amount of marketing money on each customer, you spend more on some, and less on others. Customer retention marketing is all about allocating resources to the most profitable promotions, and them delivering them to the right customer at the right time. Customer data helps to reach the predictably known buyers, and saves lot of time and money on unprofitable marketing activities.

Your frontline staff needs to understand the importance of Customer Retention. You need to remind those who deal directly with your customers how much each customer is worth to your business. All business profits are ultimately earned from conducting successful relationships with customers. Customer retention plans helps to keep existing customers content and first-time customers coming back for more.

© 2008 Sumit Pty Ltd. All rights reserved.

If you’re waiting for the recovery …Don’t

By Mark Rosenzweig, Score NE Mass Counselor

Many people when faced with rapid change, like an ostrich, put their head in the sand and wait for the change to go away. In business, that is a sure way to disaster. You need to adjust to the change and find ways to benefit from it. We are currently going through one of the biggest changes in economic conditions in decades and sitting by and wringing our hands just won’t cut it. Here are some things that can help you weather the storm, and you should start implementing them today.

Focus on Cash
Although we hear a lot about the credit crunch and how our banking system is frozen, for the small business it is always tough to raise cash, so managing it wisely is critical and never more so than today.

First, look to reduce spending in every way possible. Some actions seem simple to put in place, such as reducing heating in the store; since most customers are dressed for the outside temperature, your customers won’t mind and your employees will have to add some sweaters. Look at lighting, store hours or factory hours; if you can shrink them, you reduce the operating cost. Can you reduce some of the staff expenses – no free coffee, etc.? Can you redistribute the work to avoid overtime or reduce staffing to fit the current volume levels?

Second, generate cash or preserve it by reducing inventory. Return inventory you don’t need to your vendors and get cash refunds. Sell off inventory at reduced prices to raise cash for other expenses. You might lose future profit, but you get cash to pay your bills. Order less. With factories having less business, lead times are shrinking, and you can reorder if you need to and get merchandise quickly. Cut back on supplies, and share suppliers between departments. Collect fiercely. If you sell on terms, start your collection process before they are due to make sure you get paid. (The squeaky wheel does get the grease!) If you vendors give you terms, take them if you have the cash to spare, but for all others, stretch your payments out as long as your vendor will tolerate.

Third, talk to your bank. If you have a loan, see if you can renegotiate it for better terms, or a longer period. If you have a line of credit, can you get a larger line or better terms? Work with your banker, and think about what the SBA can do to guarantee your loan if that will help. Ask your Score office for assistance in finding other banks interested in loans to small businesses like yours.

Fourth, talk to your landlord if you rent your space. Landlords don’t want empty space, so you may be able to get a temporary roll back in rent, or at least put off any escalations that may be coming in your lease. It never hurts to ask.

Fifth, prepare a 6-8 month cash projection. See how healthy is the cash flow. Write down the assumptions. Play “what if” game to build contingencies. So if any of the assumptions does not happen, you know what to do.

Lastly, use your cash smartly: If you have cash, and have needs, maybe this is time to negotiate deals. For example if you need a truck, it may be the time to buy it. If your cash flow looks poor and your projections do not look to make it sustainable, you may have to close the doors. Before you take that step, come into Score with your analysis, and let’s see if we can give you ideas to make it better.

Focus on Customers
Depending on your business, the exact methods of focusing on customers may vary, but the basics are pretty much the same. Make contact early and often. Develop reasons why the customer will benefit from coming into the store, or talking with you. Clearly sales and discounts are appealing, but we have become a jaded society on sales. Some stores seem to be permanently having a sale, and pretty soon people just expect it. Think about the value proposition you can offer. Why would the customer be better off buying from you rather than someone else, and why buy know rather than later? It is not an easy question to answer, but if you can, you have the most powerful weapon to build your business.

You will need to do more for your customer than in the past to earn their business and more than your competitors who are trying to steal your customers. Helping people to carry their purchases to their cars or offering samples are some of the ways to do this. Give out next visit coupons (with an expiration date), so the customers you do have come back more often. Create events like after hours wine and cheese party to shop the store in a more relaxed and fun atmosphere. Deliver small gifts to your key customers as a way of saying thanks for your business, and reminding them of your interest in their business.

Ask if the customers find everything they are looking for. What would they like to see next time they visit? Here is a personal example: I was in a store in Boston few weeks ago. I finished my shopping but not my shopping list. As I was going to pay, one staff person asked if I found everything I wanted. I replied “yes, but I am still missing a couple of items”. Then, she took my shopping list and walked me to the shelves. They were all there; I just had not seen them. One simple question made my life easy and sales in her pocket.

Focus on Marketing
Get out the word. Network at every opportunity. Join the Chamber of Commerce if you are not already a member, and get involved. Attend business related society meetings as well as thing like Rotary, Knights of Columbus and other organizations where your customers spend time. Get involved in the town and its activities. Find out who at the local paper you can talk with to get articles about you and your business in the local newspaper and magazines. Attend trade shows and any mixers they may offer. Spread the word, and keep your business in their minds.

If your competitor is closing, move in to his markets. Buy his customer lists and if he has good people, make the tough call, and trade up by hiring them and letting your less qualified people go. Go to his customers, and ask how you can help them, and work hard at gaining their business.

Review your market and customers. Is your market down because of the general economy or a shift in purchasing power or needs? Will you market recover or do you need to find new markets by repositioning your operations to healthier opportunities? Can you diversify? If you sell left handed widgets, how about right handed ones?

The Bottom Line
Waiting for the recover won’t cut it. We are facing a prolonged downturn, and those who survive and prosper will do it by being proactive. Change is difficult, but not changing is not an option. Get busy today, and fight for every customer and every dollar.

Marketing Your Business on Search Engines

When it comes to marketing your business online, few tactics may be as effective as using search engines. After all, the first stop customers and prospects make online to find information on products and services like yours is usually a site such as Google, MSN or Yahoo!. The challenge, however, is ensuring that they see your business in their search results.

Unfortunately, there are no ways to guarantee that your site will show up in a relevant search. But there are steps you can take to help improve the chances that qualified prospects can find you online. Marketing on search engines may be most critical for businesses with a strong online presence– it should be considered as a primary area of ad spending for e-commerce businesses where a click to the right product may result in a quick sale. For other businesses, determining how much effort and money you put into this area may depend on how important your website is to your prospecting efforts. In either case, marketing on search engines can be affordable and easy enough that it is may be worth testing as a way to find new customers.

SEO and SEM
Using search engines for promotion comes down to two similarly-named but different disciplines – search engine optimization (SEO) and search engine marketing (SEM).

• SEO involves creating your company’s website in such a way that it ranks high in search results when an appropriate term is used. SEO generally takes some technical know-how, as well as an understanding of the various algorithms search engines use. It’s not for the faint-hearted.

• SEM, on the other hand, requires less technical knowledge and can often be done effectively in-house. SEM generally refers to pay-per-click ads that show up in search engine results. They are offered by programs like Google Adwords that let you create ads that appear above or next to---usually to the right of---the “natural” or “unpaid” search results. By purchasing ads based on keywords, you can reach customers when they are actively looking for information on your type of offerings. And you pay only when the searcher clicks on your ad.

Marketing Your Business on Search Engines
If only it were that easy. Used incorrectly, SEM programs can be inefficient. For example, if your ad attracts browsers instead of buyers, you’ll find yourself paying for traffic that doesn’t generate sales.

SEM Guidelines

Use these guidelines to help avoid some possible pitfalls of search engine marketing.

• Set your budget
  It may seem obvious, but don’t bid more than you can afford for a keyword. Defining what a visitor is worth is as much art as science, but as a start you may want to estimate how much a typical customer nets you in profits, and multiply that by the likelihood that a site visitor will become a customer. In most SEM programs, the advertiser paying the most shows up highest in the results. But paying for the top position may not have much affect on how often your ad is clicked. For popular searches, users may go several pages deep, so having your ad featured on the much less expensive second or third page can still get results. Depending on the search engine you use, it also may be possible to set a daily budget for your search advertising, helping to control your campaign costs.

• Think like your target audience
  What search terms would a hot prospect use when looking for your business online? It’s easy to know what you would search for, but what about everyone else? Ask your customers what search terms they would use. Go online and run a few sample searches yourself. What keywords bring up your competitors? These may be the ones to consider.
  
  
• Create limits
  To find the most qualified buyers, make your keyword choices highly specific by using descriptive phrases instead of individual words. For example, “shoes” may be too general; “women’s Italian shoes” is better. Also, many SEM programs have ways to limit your ad delivery, which can keep it from showing up in inappropriate searches. “Exact matching” makes sure your ad shows up only when there is an exact keyword match. “Negative keywords” keep your ad from being delivered when there’s a term that could have two meanings (for instance, the word “virus” can be used by both computer-software and flu-symptom searchers). Geographic limits allow for regional or even city-level targeting.
  
  
• Test and retest
  Consider varying your keyword purchases, your rankings and your ad language to see what generates the best results. For example, try combinations of broad keywords with low ranking and run split tests with different ad copy.

• Don’t forget second-tier search engines
  Keep in mind that you’ll be competing with a lot of business owners for keywords on the leading search engines. There are quite a few search sites on the Web; look for those that cater to a particular industry, interest, geography or other niche. These options can be more affordable and still have a sizable impact.

Think like a Search Engine
To get the results you want from your search engine programs, it helps to learn about how search engines work. The major search sites (Google, MSN and Yahoo!) provide basic explanations of their engines and ad programs, and may even have an online tutorial. Once you’re comfortable with search engine terminology, use this worksheet to plan your campaign.

1. Who is your target customer? Profile your most profitable customers to frame your thinking about the terms they may use for searches.
2. What is the goal of your search engine marketing program. Successful SEM campaigns can be measured by click-throughs (or site traffic), site engagement (i.e. demos, downloads, completed contact forms, new subscriptions to your newsletter, etc.) or sales. Prioritize your objectives.
3. What keywords and phrases do you think your prospects use to find you? Brainstorm primary and secondary terms that best describe your offerings and audience.
4. What keywords and phrases do prospects actually use? Speak to your customers about the search terms they would use. Check this list against the list you created in step 3.
5. What ‘negative keywords’ can you use? When you use a negative keyword, you ad will not show up when that term is used. For instance, a used bookstore might want to use the negative keyword “textbook” to keep away people searching for used textbooks.
6. How can you create an effective ad? Look at ads for companies like yours. Try to find the shortest way to describe the unique benefit of your offering, and exactly who your target audience is. If you can, show your ad to a few customers or prospects to get their reactions.
7. What’s your budget? How much are you willing to pay per click, and in total? You’ll need to calculate the value of getting a customer to your site.

Copyright © 2005-2007 American Express Company. All Rights Reserved. The information contained in this document is meant for advisory purposes only. American Express accepts no liability for any outcome of its use.

Local small business SCORES a big one!

• a successful stock buyout of two company Directors, and
• a technology transfer from the UK to the United States.

Don't Undercharge for Your Services

by Jeffrey Moses

It takes money to make money…. How much will you need?

By Laurie Christiansen, Score Accredited Business Counselor

During these uncertain economic times when the jobless rates continue to increase, as some doors close others will open. If you have ever considered starting your own business, this may be the time and opportunity to change your life’s direction and travel down a new path. You have a good idea for a business but you’re not sure how to decide if you should try it or not. One of the reasons people often don’t start a business is that they cannot figure out how much money they will need to be successful. And one of the main reasons start ups fail is because they underestimated what it will cost to make the start up profitable.

Here is a quick exercise to test your idea for a new business. Do this with a friend or relative, someone who knows what you want to do or has been in business himself/herself. All you need is some paper, a calculator and an Internet connection.

1. Determine what your approximate start-up costs would be.
Once you determine what business you would like to go into, start developing what your one-time start-up costs would be. Determine the location of your business and begin building your first worksheet (this is where Google will be helpful). Include rental space deposits (first, last), security, initial stocking of inventory, deposits for utilities, vehicle purchase or lease cost, supplies needed, insurance binders, build out of the rental space, if planned, furniture and equipment, initial advertising and marketing costs, licenses and anything additional that might be required to be purchased and in place before you can open for business. Total the start-up costs.

2. Make a similar list with estimates for your recurring monthly expenses.
A good guide for this is the list of expenses on a 1040 Schedule C (Profit and Loss from Business). You can print out a blank form from IRS.gov. Estimate your monthly rent, vehicle operational and maintenance costs, payroll, insurance, heat and utilities, advertising and marketing expense, replenishment of supplies and inventory, and any additional recurring costs that need to be paid on a monthly basis. Total your monthly expenses. Don’t forget to pay yourself.

3. Do an income projection, month by month, starting with month1, month2, etc. for the first year.
This is tricky to do and will require that you put on your marketing hat. How are you going to get customers? How will you get your business known in the community? What will you do to increase your revenue steadily until you are established and in the black? Advertising is expensive; direct mail is also expensive and produces minimal returns, so how will you get the word out? This is where creativity and working with a friend or relative can help because there are innovative ideas to promote a new business that don’t cost a lot of money. If you have more than one source of income, total your income projections (i) by month.

4. Graph information from 2 & 3 onto a blank piece of paper.
This is a critical step, but it can be hard. Draw a rough graph, as below, where you track your total cumulated recurring expenses (e) amount by month. Then track your total projected cumulated income amount by month in the same way. The importance of this step is to determine – granted it is just an estimate – the point in time when your income will surpass your expenses. In the example below, this will occur in month6. In order to stay in business until month6 you need to have enough operating capital to cover the difference between your income and expenses for the first 6 months.

5. The answer from #4 combined with your one-time start up costs in #1 will tell you what cash you will need to get started.
This can be a daunting figure but is just the starting point. Go back and see if reductions in start-up costs and expenses can be made. Retest your income assumptions. Make what adjustments you can. When projecting your income try several income scenarios; conservative, best guess, or optimistic, for example. That way, if you have funds for the conservative projections and you do better, life just gets easier and your chances to succeed better.

If you are comfortable with the numbers and you are ready to take the next step, make an appointment and come to the SCORE office nearest you (you can find it on www.scorenemass.org ) for free and confidential business counseling to help you refine your plans, to help you with your business planning and to help you get started.

Sales Strategies in an Economic Downturn

By Rod Means, SCORE Marketing Advisory Council

17 Cheap or Free Marketing Ideas

How can you get your business noticed? And, what's more important in these
tough economic times, how can you get noticed without breaking your budget?
by Kathy Yakal, Buzz up! on Yahoo!

In this economy, you need all the help you can get to ensure that your business is noticed amid all the noise. Marketing is the key, but which approach to take? The first thing that may pop into your mind is to send out e-mail blasts or hire a consultant. While these are good ideas, everyone's already doing the first, and the latter can be pricey. Besides, there are lots of things you can do on your own that are cheap or free.

Increase visibility in your community.
Join local organizations that provide business networking opportunities, or start your own. Do volunteer work for a large charity. You'd be surprised at the marketing support such activities can bring.

Participate in online marketing groups.
Search Twitter and other social-networking sites for groups meeting to discuss marketing. For example, Understanding Marketing holds a chat and Q&A session on Twitter that focuses on small-business marketing. It's live each Tuesday from 8 to 9 p.m. eastern time. Search #smbiz on Tweetgrid.com.

Submit information to blogs.
Blog writers are always looking for content for their sites. Target appropriate ones and send them press releases or descriptive e-mails.

Reward existing customers.
Offer an exclusive incentive to your regular customers-only your regular customers. Notify them via e-mail or other contact methods, and direct them to an otherwise inaccessible page on your Web site where the offer appears.

Get your customers to bring in new customers.
Offer an incentive like a discount to customers who get a new customer to make a transaction with your business.

Spruce up your Web site.
Stale sites don't attract business. Fresh, frequently updated Web sites show your customers you're a vibrant and active business. Let users subscribe to get update notices, then update frequently.

Provide free, helpful information to your customers.
Such content should be related to your type of business and can include tips, hints, reviews, and other information that can help drive sales. For example, a business selling paint can provide a guide to selecting the best paint for different uses. Such informative content is often available from suppliers. Use it.Offer your non-competing business customers a link exchange.

A link exchange is much like a bulletin board at your business that holds your customers' business cards. The more links your business has to their Web sites, the better your search engine placement, and the greater the number of people who see your business's links, the more will visit you.

Use downtime for marketing.
When times are slow, keep employees busy contacting customers. Create e-mail marketing documents your employees can send to individual customers. Personal contact with customers gets results. Mass e-mails are less effective and, given today's e-mail spam filters, may not be seen by many. Go for quality contacts rather than quantity.

Visit your own Web site frequently.
Look for ways it can be improved. Too often, small business Web sites load slowly, are poorly organized, and are difficult to navigate. Fix bottlenecks that impede customers and look for ways to get customers to act. Make sure all links work and lead to up-to-date content. Test campaigns with printable coupons and other incentives. For more tips, see our story "Build a better Web site" (www.pcmag.com/article2/0,2817,2193395,00.asp),

Get active in the online community.
Encourage employees to do the same. Don't spam discussion forums or other social sites, but don't be afraid to use signature lines containing links to your Web site. Establish common-sense rules for yourself and your employees regarding these social-networking and discussion sites, and always strive to be positive and helpful on them.

Check out your suppliers' Web sites thoroughly.
Add links on your site to informative and helpful content on those sites. Many corporate sites offer instructional videos and other material that can inform your customers and lead them back to you, ready to do business.

Get a toll-free phone number.
It makes you look more professional and encourages business-and the fees aren't as high as you might think.

Launch a blog on your site and update it daily.
Nothing reads "I don't care" like a blog whose most recent entry is days old. Assign this task to employees who can write and spell-an illiterate blog is worse than no blog at all. Introduce people to your company and its staff. Highlight products. Run contests and give away company swag. Announce specials and upcoming product-line changes. Establish a "customer-of-the-month" tradition and do regular write-ups. Surely there's something you can say to your customers daily.

Yes, use Facebook and Twitter.
Having a Facebook page may not earn you any new business, but not having one may cause customers to ask why you don't. Take some good pictures of your offices and your employees (unless you'd rather leave those details to your customers' imaginations), or, in some fashion, put a more human face on your company identity. Twitter is a young technology, and everyone's scrambling to figure out useful applications. In the meantime, let your customers at least follow you, and implement a strategy similar to what you're using in your blog. In 140 characters, that is.

Visit online marketing sites.
Good Marketing Ideas is an excellent site, with plenty of useful tips. The suggestions here cost little or nothing to implement, and will likely lead you to resources you might never have thought of on your own.

Never surrender.
Getting new and potential customers to notice you is an ongoing-and sometimes uphill-battle, and one you can't ever stop fighting. Pick a new idea every week or two and implement it, no matter how small it is. Call a meeting of employees, order a pizza for lunch, and brainstorm; offer an incentive for ideas you implement. Before long, your marketing might just pay off in new sales-and happier, more involved customers.

I've got an idea for a business... Now what do I do?

How to Maximize Your SCORE Meeting

By Jeffery Clack, Score Accredited Business Counselor

• Be on time. Know how to get to the location of your meeting, where to park and how long it will take to get there.
• Think about what you want from the meeting. What is your goal or what do you want to learn. Come prepared with written questions that you need to get answers to.
• Be prepared to write down ideas and actions to take. If you have a voice-recording device, you might like to use it to gather all the conversation.
• Bring examples of your marketing materials.
• Bring your company's financial statements.
• Identify business areas where you want immediate help: for example sales, marketing, partnership agreement, web site, finances, managing people, dealing with vendors, starting a new business, pricing, or how to survive in a bad economy.

• Listen carefully. When you talk stay on subject. Don't wander off.
• Don't just talk to fill the time. Stay focused on what you want to get from the meeting
• Give feedback if you don't understand what is being said or if it isn't addressing your question.
• Leave time at the end of a meeting (i.e., 40 minutes into a 1 hour meeting) to review what you have learned and what questions have yet to be answered.

• Identify dates to complete your assigned actions.
• Decide if a follow-up visit would be helpful. If it is to be a SCORE Meeting, you can make your appointment with the Chamber or counselors before you leave.

Why You Need a Non-Disclosure Agreement

FUNDING A START UP OR NEW BUSINESS

By Dave Evans, SCORE Accredited Business Counselor, Chapter 411, Northeast Massachusetts

How do you find the cash to start up a business? This is THE question most asked by budding entrepreneurs. The reality is that there is no pot of money for new businesses to just dip into to get their business started. No free grants to get your great idea going, no one handing out thousands or millions of dollars to anyone with a pet project.
There is a hierarchy for financing that you need to understand if you want to launch a new business and it begins here:

1. FFF (friends, family and fools) …
   Since the idea for the business is yours, be prepared to come up with your own cash (savings, investments, sale of asset[s]), money from relatives or from trusting friends. If you don't have enough cash then; find a partner or group of partners to either invest and work with you. Alternatively, locate limited partners who will invest with no control but who will share the profits. There is no one else more closely involved in the idea than you. You take the risk. Start small if you don’t have much cash.
2. FUNDING FROM RETAINED EARNINGS …
   If you are among the few who actually get a business idea up and off the ground successfully, then wisely put the earnings back into the business. Use that money to grow the business from the earnings. Don’t squander these funds, they are precious because they can be the life blood to make the business bigger and earn even more money; the cash itself is an earning asset.
3. BANK LOANS backed by SBA guarantee(s)…
   Assuming yours is a U.S. based business with assets in the Continental United States, once your business has proven its ability to earn money consistently, a bank, when supported by a U.S. government guarantee of repayment, will often show interest in providing appropriate loan assistance. As you can see banks are not the first place to go for money. They will, however, take an interest when you have proven your business is viable and profitable. As you can imagine, they want to keep their depositors’ money as safe as possible, they don’t want to take big risks with it.
   
   At this point, most small businesses continue on with a combination of the first three funding sources under-girding them.For fast growing companies
   For those businesses that are capable of becoming publicly owned---usually providing products or services with national or world-wide appeal---additional options exist.
4. Angel Financing
   Fast growing businesses will need lots of cash to afford all their new business activity. These firms often seek ANGEL FINANCING. Angels are folks who can see that they will be able to make a lot of money by either selling the company to a larger firm later on or taking it to the next step, VENTURE CAPITAL (VC). To obtain their investment you have to give up a good part of your ownership to them. They are taking the lion's share of the risk by putting their money into the business. You need to think this through carefully since it is rare to be able to get more then one shot at this. You have to give up a large part of the business to receive the funds and in most cases the angle investor will want to sell the business quickly to make his money back and more.
   
   http://en.wikipedia.org/wiki/Angel_investor
   
   
5. Venture Capitalists
   Venture Capitalists will only take on business financing if they see that they will be able to take the company PUBLIC. VCs will want to see a seasoned and proven management team in the business. If they don't see all of what they want for staffing, strategy or structure---and, IF they take on the project (a very big IF)---they will make the desired changes and take control of the business operations. At this point many entrepreneurs bow out of their company taking their newly earned assets---usually shares of the now publicly traded stock---with them and start over again with some other business idea.
   
   http://en.wikipedia.org/wiki/Venture_capital

Financing a start up is not easy and there is little financial easy money to be found. But if you really believe in your idea and are willing to put your money into it, others will come to help.

• Start with a clear plan.
• Know the scope of the real costs to start up and get to profitability.
• Then, get help with the next steps from Score.

No.1 Time Management Skill: Doing Nothing

By Lyndsay Swinton

You can improve your time management skills by doing nothing. Sounds impossible? Okay you’re right; you have to do something but not very much.

The skill of time management is about knowing what to do and when. And one other important tip, but we’ll share that secret later…..

Got to run, people to see, places to go…

Busy managers are always on the go. They have noisy phones, bursting email inboxes, back-to-back meetings, and they grab lunch on the run. But hang on, if they’re so great, why are they doing so much?
Being busy is not the same as being effective
A key time management skill is knowing what to do and when to do it. Imagine this… The phone rings while you’re answering emails and a colleague is fast approaching your desk. What do you do?
a) Answer the phone, whilst reading your emails. Your colleague will have to wait.
b) Stop everything and talk to your colleague.
c) Ignore the phone and your colleague and keep working on emails.
d) None of the above.
Answer – d) there is no one correct answer!
How could I be so mean to ask a trick question? Simple, I wanted to demonstrate that there are always 101 factors affecting decisions about how best to manage your time. Only you know the right answer.
Tune-up your time management skills
The mental checklist for time management decision-making goes something like this.
1. What is the most important thing for me to be doing right now?
2. What deadlines have I got?
3. What happens if I don’t do this? (this is the top time management question :>)
Let’s look at each of these in turn...
What’s most important?
Good relationships with your colleagues, that’s what’s most important. Effective managers make time for people because they know in the long run it will pay back many times more. Back to the colleague approaching your desk. He just wants to go for coffee... If you’ve got a great relationship with this person, then maybe defer the invitation so you can finish up your emails. If you need to get to know him better or smooth out some conflict, then go for it. If thinking about relationships in terms of payback seems calculated and ruthless, then get used to it. This is what good time managers do. It is just another time management skill. The 10 minutes spent going for coffee may uncover why you’ve had to chase your colleague for that report and get it resolved then and there.
Is there a deadline?
If deadlines are looming then they win. After all, in olden days a prisoner would be shot if they crossed the deadline! (Don’t you just love the original meanings of words? :>)
But is your deadline negotiable? Can you buy extra time and do it later or de-scope the work and do less but on time? Your careful relationship management will work wonders for you when time is tight.
If the deadline is non-negotiable, quit moaning and go do it, or you’ll get shot!
Back to the ringing phone… It’s shouting loudly, demanding urgent attention. Unless you’re in customer services or expecting an important call, consider using voicemail to your advantage. Avoid switching from “email mode” to “phone mode” and back where possible as it steals time and affects your concentration.
What will happen if….?
Will the world stop turning if you don’t do something or do it in a different way? Don’t fool yourself into being busy by thinking you’re work is invaluable or perfect.
Question the value of everything you do and how you do it.

• Think through your routine tasks or tasks that simply take too much time – are you doing them for a reason or from habit?
• Stop sending that report and see who notices.
• Prepare online answers to “frequently asked questions”.
• Delegate to a colleague.
• Redesign the process.
It may take time to save time, but it’s pays dividends in the long term and makes your job more interesting.

Slow down, you go too fast
I hope you’re getting the idea by now – the sum of all time management skills is knowing what to do and when. Busy managers are not effective managers if they don’t stop and think;
• Is this important?
• Is this urgent?
• Do I have to do this
• Can I do this differently?

Asking these four simple questions will revolutionize your time management skills. Put time in your diary today to become a more effective time manager.

By Lyndsay Swinton
Owner, Management for the Rest of Us
www.mftrou.com

Make The Sale: 8 Smart Tips

By Rieva Lesonsky, CEO, GrowBiz Media

When the going gets tough, the tough…start selling. With apologies to singer/songwriter Billy Ocean, in times like these entrepreneurs need to focus on bringing in the money. That means selling more. To help you do just that, here are eight smart tips to help you boost your bottom line.

1. Knowledge is power, so you and any employees or outside sales reps need to be fully
up-to-date on what you sell--and what your competitors offer as well.

2. When you started your business, hopefully you defined your USP (unique selling proposition). That’s what makes your product or service stand out from the competition. Is your USP still working, or does it need tweaking?

3. Remember, your job is not to sell your products or services. Instead, it’s to sell prospects on the benefits of doing business with you. Frame your sales pitch around what’s in it for them, not what’s in it for you.

4. Make sure you’re selling to the decision-maker. Don’t waste your time pitching your goods and services to people who can’t say “yes.” Hopefully you’ve done your research and discovered that your prospects not only have a need for what you’re selling, but also can afford to pay for it.

5. Sales are not just momentary transactions. They’re about building trust and forging relationships, which turns prospects into clients. People are going to question you, your prices, your customer service policies and more. Giving them straight answers builds the trust factor.

6. All clients have objections. Your job is to overcome them. This means listening more than you talk. It’s crucial you uncover your client’s pain points. What are their challenges? Then explain how you can solve them.

7. Even if you’re not going to sell online, you need a Web site. Having a Web presence helps consumers find you (if you optimize your site), boosts your marketing power and makes it easier to do business with you.

8. Keep talking. If you make the sale, follow up periodically to make sure your customers are satisfied and to see if they need anything else from you. If they are happy, ask for testimonials and referrals. If you don’t make the sale, ask why they didn’t buy from you. Take what you learn and incorporate it into your sales process.


BizSuccessTips Editor Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that provides information, products and services to help marketers connect with small businesses and to help small-business owners start and grow their companies. A nationally recognized small-business expert, Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs. For more about GrowBiz Media or to contact Rieva, visit www.growbizmedia.com.

Profit Planning Revs up Results

By Jerry Glenn, SCORE District Director

It was a smart move, that so many of you slowed hiring and capital spending while inventories dwindled, according to NFIB’s Small Business Economic Trends - January 2009. Profits are impacted by overhead and your quick response to rein in costs is a big help in weathering a recession that still has months for us to work through.
It takes time for the economy to improve that’s true. But, if you wait it out with no strategy, you could miss out on future opportunities. You can profit even in a recession it just takes a step back to:

• Focus your mind.
• Redefine your plan.
• Seek out opportunities.
• Dedicate yourself to client retention.
• Surround yourself with supporters.

Now is a good time to revisit your business plan, which may not have been updated since you initially developed it. Don’t get bogged down in the document. Ask your self the following questions:

Customers
Has my customer base changed?
Has my product/service offering changed?
How often/how many new customers have I obtained in the last year?

Competitors
Do I have new competitors? Who?
Do I have more/fewer competitors? Why?
What are the current competitive threats to my business?

Price Points
It is never a good idea to cut your price, even in tough economic times. If you do cut your prices, only do it for a limited time encouraging customers to “act now.” This should be a last resort effort. Look at two large retailers Home Depot and Macy’s. Both had sales and profit declines in the fourth quarter of 2008, but Home Depot’s results were much better than Macy’s “because [they] held margins by not cutting the price,” while Macy’s had terrible results due to across the board price cuts.

Business Partners
Look for businesses that you can partner with to cross-promote your products and services while sharing the costs. For example, a laundry mat offers free detergent with each washer load and the free detergent is paid for by both the owner of the laundry mat and the supplier of the detergent. The price was not reduced, but there is a unique incentive for the customer with a specific start and end date, which will get the customer to “act now.”
Profit with sales this year. Explore new markets, new prospects and new products and pitches. This year, the three Ps of marketing your business are: prospects, products and pitches. All three may need to change a bit to get you to a profitable year.

You can do it. Surround yourself with mentors who you can talk to plan for success. It’s amazing the difference it makes just talking through your ideas. Think of planning as preparing yourself for success with a clear profit picture in mind.

New Markets
As you review your business plan, ask yourself where else you can sell your product or service. Go back to those customers who have not bought from you in a while. Have a compelling reason for them to buy from you now, such as improved service, different products or greater customer satisfaction just to name a few. Does it make sense to enter new geographic markets? Have any competitors in that market left or ‘retrenched, waiting for better times’?

Update Your Offerings
After reviewing your business plan is it necessary to change or update your product or service offering? Will product or service changes or additions allow you to sell more to your existing customers? An “update” here could mean a redesign of your web site, starting a blog, joining a social network. Essentially any way you can expand your reach to potential customers. The reason newspapers across the country are closing is due to lack of readership. People are moving to the internet for their news and information…and to find your business!

Improve Your Pitch
Thoroughly understand your product and service and why someone should buy it from you. Use written testimonials from some of your satisfied customers.
• Tell your story in five minutes or less. • Use demos to illustrate your story.
• Practice to perfect your pitch “before” the sales call.
• Listen well. Ask questions & really listen to the client’s needs and concerns.

The bottom line is practice makes perfect. Be a dedicated practitioner in client connection. You are the owner. Your time, care and connection in the sales process will bring results. In these times, you can be tenacious & focus on seeking out new opportunities.

Meet with a SCORE mentor to review your updated sales plan. You might even practice your sales story with him or her as well.

Jerry Glenn is the past president and CEO of Armstrong DLW Flooring. He has served in sales and executive management roles, growing sales and profits in a multi-million dollar enterprise. He is a District Director with SCORE Lancaster in Pennsylvania.

12 Sure-Fire Steps to Improve Your Retail Sales

By Bob Nelson

The purpose of any business is to bring in customers which can only be accomplished through marketing. If your cash registers don't ring something is wrong and you had better find out what fast because in today's competitive retail world getting results is what counts.

Successful retailers aren't any more talented or intelligent than you are, they simply have learned to do things in a different way and make money in the process. Use the following 12 steps to improve your retail sales, you'll simplify your efforts, multiply
profits and increase the odds of success.

1. Know Yourself
Having your own business is more than just creating a job for yourself. Your basic roles are in marketing, finance and administration including personnel. To get the best results, it is rare for one person to play all these roles equally well. You must know which parts you can handle yourself and which parts you're going to need help with.

2. Plan Ahead
Many stores are run by well-intended people but who don't have all the information they need to do their job. This includes a clear idea of market segment, target markets, customer service, product selection, marketing mix, promotional activities and pricing tactics. If you want to succeed you need a well thought out business plan that helps you make the right decisions.

3. Know the Industry
You can gain the greatest competitive edge if you have an intimate knowledge of your business. To thrive and prosper you must be committed to learn and to have the desire and energy to accomplish your goals. Below are five main reasons why most businesses fail:

1. Lack of Industry Knowledge
2. Lack of Vision
3. Poor Market Strategy
4. Failure to Establish Goals
5. Inadequate Capitalization

4. Understand Your Customer
Make it your business to give your customers what they want and they will do business and buy from you. The products and services you provide should reflect your customers needs and wants. Think in your customers' terms; buy, show, sell and say things that interest them, not just what interests you. Remember, it is the customer that determines whether or not you succeed.

5. Keep Good Financial Records
If you don't know where your money is going, it will soon be gone. The "game of business" is played with computers; and, the score is evaluated in dollars and cents. Good financial records are like the instruments on an airplane, they alert you to your height, direction, and speed. Without them you’re flying blind with no controls to guide you to your destination.

6. Manage Your Cash
It doesn't matter how unique and wonderful your store is your business can’t survive without cash flow. Money coming into your store is the vital component that keeps your business financially healthy. If you budget wisely and know the interval of your monthly income and expenses, you won't have to worry about running out of money.

7. Use Sound Management Practices
As a store owner, you are also a manager. You have to make decisions, offer customer service, manage time and resources and know how to merchandise and run the business better than anyone working for you. Give your employees the opportunity for growth, treat them fairly, pay them what they’re worth and they will help make your business successful.

8. Develop a Distinctive Image
Your image is important and is a function of your marketing efforts and materials. Customer’s create their perceptions of your business from your name, web site appearance, store location, products, prices, visual merchandising, signs, displays,
business cards, newsletters, advertising material, customer service and anything else that relates to your business.

9. Control Your Inventory
All retail stores need to manage inventory. It is your money sitting on a shelf and represents a large portion of your business investment. The retailer who merely watches the store’s shelves can’t maintain a proper balance between the right amount of merchandise and probable customer demand. Without adequate control, slow-moving inventory becomes dated and very costly.

10. Buy and Price For Profit
To understand retailing one must start with the concept that the price of your merchandise is nothing more than a temporary estimate of what the customer is willing to spend. In devising your overall pricing strategy, a practical approach can be based on the function of supply and demand. To be more competitive join buying groups and seek out manufacturer discounts that allow you to purchase merchandise below wholesale prices. By offering better values, you'll be able to attract more customers and offer more opportunities to shop at your store.

11. Learn From The Pros
In today’s explosive markets, making the right moves is absolutely essential, there is little room for error. Without knowing how to navigate through these fast-moving times, it can be a tricky and even a self-destructive experience. Because of the emotional and sometimes difficult decisions that must be made, the crucial difference is having fresh ideas with an impartial business position.

12. Ask For Help When You Need It
Remember, getting results is what counts. Don't be too proud to ask for help, we all need help sometimes. It is important to recognize that what you don't know can end up costing you money, hurt the odds of success and greatly reduce the chance of achieving your business goals. Hiring an expert with specialized skills can be the most profitable decision you can make to protect both your business and financial future.

© 2004 Bob Nelson
Bob Nelson is president of POWER Retailing. For free information on how to simplify your marketing efforts and add dollars to your bottom line, visit www.retailing.com. For practical answers to specific business questions, call him at 480/460-1965 or contact him by email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Persistence Pays

By Alvah Parker, Score Accredited Counselor
Chapter 411, Northeast Massachuestts

As a chemistry teacher many years ago I instructed my students to heat iron filings and sulfur. Each time they did the result was exactly the same –iron sulfide.

Wouldn't it be nice if marketing worked the same way? Then all the career and business tips you have read would work immediately. Network at a meeting one evening and the next morning tons of potential new clients call you. That would be wonderful and you would love it! So would I!

I talk to dozens of people every month who are trying to develop their businesses. The single biggest expectation is that the result will be immediate and when it isn't the person just stops the activity. "Oh networking doesn't work for me. I go to a meeting, hand out lots of business cards and no one ever calls."

The thing about marketing is that it isn't fast and it also isn't that predictable. What works for one person or business doesn't necessarily work for everyone. Finding what works for you and your business is the important part.

Developing your own unique marketing strategy is often done by trial and error. Because there may be errors before success, it can be discouraging and scary. Having a SCORE Counselor to work with will keep you focused and upbeat during the process.

There are also many variables when it comes to networking. What event do you choose to go to? How do you identify the people you want to meet? What do you say when you meet them? How do you make sure you can continue the conversation if you want to?

Bob Berg in his book titled Endless Referrals says that people do business with people they "know, like and trust". What about you? How do you make buying decisions?

Business decisions usually involve money – your own or someone else's. To justify the decision you will have to believe whatever is presented by the person making the offer. Certainly knowing, liking and trusting that person plays a big part. Some of us make decisions quickly. Others take time to make up their minds.

Once you have met a prospect the next step is up to you. Use your creativity to come up with marketing tools and techniques that make you memorable and trusted. There may be methods that suit you and/or your business more than others. You also may notice some methods work better for you than others.

The point is that to find the group of marketing methods that work for you, you must stick with it. You want to meet lots of prospects. Not all of them will be interested in you or your product or service. The step after "meet lots of prospects" is to have them get to know you better so that eventually they do feel comfortable doing business with or hiring you. Too many business owners never get to that step.

Take Action

1. Review the networking groups you attend. Go to a meeting with the intention of meeting one or two who will be good potential clients or referral sources for you.
2. Find a new networking group to try. Make sure it is a good place to meet potential clients or referral sources. Go to a meeting.
3. Read Endless Referrals by Bob Berg for more networking tips.
4. Make a list of the marketing methods you enjoy. Think about your current prospects. Use some of these methods to close the business.

A Source of Revenue You May Be Neglecting - Your Past Clients

By Precision Marketing Group http://www.precisionmarketinggroup.com

Much of marketing is about laying a strong foundation for sales, bringing qualified leads to the door and staying connected and top of mind with existing customers. These goals can be achieved in a variety of ways, including:

• Messaging and branding
• Website optimization and search engine marketing
• Company newsletters and blogs
• Direct mail campaigns
• Telemarketing
• Advertising
• Social media efforts
• Speaking and publishing within your industry

But there is one group that often gets neglected in a company's marketing plan - the past or inactive clients. We have found that these people can be an outstanding source of business.

Why are your past or inactive clients so valuable?

They know you and, hopefully, like you.

They understand your products and services and the value you provide.

They have paid you money in the past - and they may just do it again!

Past Clients - Getting Them Back in the Fold
So how can you tap into this valuable source of business - those clients who may have faded away, who may not have your business top of mind?

Luckily, there is no rocket science here. But it does take time, and it requires an understanding of the fundamentals of marketing;

• having a clear message,
• staying visible, and
• making it as easy as possible for customers to engage with you.

Many of the same ways that you keep in touch with prospects and customers work with past clients. They include your newsletter or blog, social media, personal phone calls and emails, sending relevant articles and resources to let them know you were thinking of them, etc. The key to success is to have a process in place and to execute it.

3-Step Process for Re-Engaging Past Clients

1. Identify them - and ask yourself if you want to reengage.
   Carve out some time to go through the Inactive Client files - ours are located conveniently in our Customer Relationship Management (CRM) system. If you use Act!, Salesforce or any other CRM system, it should be easy to locate your inactive clients. Once you've pulled them out, decide whether you want to make an effort to reengage them. While we all have clients we love working with, the reality is that there are some we don't - and we may simply be happy that they are gone. And that's OK.
2. Create categories of how you want to reengage. When we sat down to do this exercise, we created categories for inactive clients that we wanted to take to lunch, those who we wanted simply to make sure were on our newsletter list, and those we wanted to include in a direct mail campaign.
3. Track your progress- Make the commitment to revisit the Inactive list to see how you are doing. Have you taken those clients to lunch? Called the ones you said you would? Mapped out your direct mail campaign?

With this approach, you can make sure you are leveraging a potentially powerful source of new business.

From Active to Inactive Client - A Smooth Transition
Now that you've learned how to re-engage past customers you've lost touch with, you can take an important step to make sure you don't "lose" anyone again!

Make sure that you are transitioning your active clients to inactive clients in a strategic way, so they don't simply fade away and forget you. We call this "closing the loop" and we think it's so important that we'll be devoting a future newsletter entirely to that topic. For now, here are some things we recommend:

• Share the results you've achieved, ask for a testimonial.
  When you wrap up a project or assignment, it's tempting to move quickly onto the next one. But taking the time to do a "debrief" with your client about what was accomplished can reap rewards by ending the engagement on a positive note. If your client is open to giving a testimonial, have someone call him or her for a quick interview and then draft some testimonials. These comments, once approved by the client, can be used in sales letters, in marketing materials, on your website and in customer stories.
• Make sure they subscribe to your newsletter and/or blog.
  All prospects and definitely all current clients should be asked to become subscribers to your newsletter but if it hasn't happened, make sure it does before your project is over. We have re-engaged with several past clients in recent months, all because they have received an issue of our newsletter that compelled them to get in touch again.
• Connect to them on LinkedIn, have them follow you on Twitter, or ask them to become a fan through Facebook.
  Social media outlets are keeping businesses connected round the clock, long after assignments have ended, so take advantage by making sure that clients are engaged with your firm at this level.

By transitioning active to inactive clients successfully and keeping past clients engaged in your business, you will be practicing "marketing that makes money!"

Valuing A Small Business For Sale

By Jeffrey Clack & Peter Siegel
SCORE Counselors Chapter 411, Northeast Massachusetts

Correctly pricing your business for sale is related to many decisions,

• will the available cash flow of the business be able to pay the debt of a loan,
• will the deal as structured or priced be attractive to financing sources,
• "cash" price vs. "loan" price and how these factors figure into the equation.

Here are various methods to consider in determining your selling price. In most cases you should use a number of them together.

1. Market Approach

In a strong economy your business may achieve a higher price than in a slower economy. The type of business, the number of local and national competitors, and the start-up costs for a similar business all are market factors. It comes down to what will someone pay for your business in the current market?

2. Adjusted Net Income

Adjusted net income is the total amount of cash produced by your business. It's a figure that includes the profits, the owner's salary and all of the many cash-related benefits which are enjoyed by the principals of small businesses. Those benefits can include the use of a company car, the company-paid premiums for health, life and auto insurance, plus personal expenditures tucked into travel and entertainment, subscriptions and similar business "expense" categories. Interest expense should be added to adjusted net income, along with accounting entries—such as depreciation and amortization—that can divert money to the owner's pocket so that it never appears on the bottom line of the P&L.

3. Multiplier Method

The multiplier method takes the adjusted net income and multiplies it by a factor of how attractive the business is. A low risk business is one where high market demand is reflected in a fairly strong multiple. Its multiple might be in the range of two to three times annual adjusted net income. A one or two multiple, on the other hand, would be associated with an enterprise in which the buyer is assuming greater risk. An example is a retail store near a large shopping area, which leaves the buyer of the smaller business vulnerable to the competitive marketing activities of much larger companies. More commonly available businesses, such as restaurants, are priced with a lower multiple - in the one to two range - to reflect the abundance of this kind of business available for sale at any one time. It's purely a matter of supply and demand.

4. Importance of Deal Structure/Terms

The terms of a transaction are critical in calculating a price. When sellers demand all cash for their businesses, for example, the market tells us that they can expect to receive about 60% to 80% of the sum they would have gotten by taking a down payment and financing the balance.

A deal that requires a lot of cash up front, in relation to the expected amount of adjusted cash flow, will place a greater burden on the buyer. That principle, translated into the language of the marketplace, means the business will only be appealing at a low price. If, on the other hand, the level of adjusted net income supports the buyer's ability to make payments to the seller in order to purchase the business the offered opportunity will interest more potential buyers and the result is a higher achievable sales price.

5. Existing Customers Value

The customer purchase history for your product or service is extremely valuable. The more customer information you have including contact information, purchase history, contact profile information (personal information, preferences, work history), and your sales engagement history with the account – the more valuable your customer data is related to the sale price for your business. And how concentrated are your sales by customer? Do 20% of your customers provide 80% of your income? Whatever your sales concentration is, it can be used to your marketing advantage.

6. Asset Value

All your hard assets have value. Any equipment, computers, vehicles, materials, etc. represents a value in the sale of your business. They can be valued by market value or depreciated value on your books.

In Summary

Valuing your business depends on many variables – some which you control (fixed assets, customer data) and some that you don’t (current market conditions). Do your homework utilizing all your best resources: accountant, tax advisor, lawyer, and SCORE counselors. You must assume the buyer has done their homework with their resources as well.