Saturday, August 1, 2020
As a business owner or manager, during the last 18 months you have been faced with shrinking profit margins and fewer customers lining up to purchase your once thought to be “hot products or services.” The question of how to survive these seemingly tough times usually results in answers such as…”we have to lay off more workers” or, “…let’s close the office located in Suburbia”.
The problem with this approach is that…when the economy rebounds, you will be looking to re-hire those very people you laid off in the first place. Unfortunately, you may discover that they have moved on to other jobs, gone back to school, or start their own businesses. You have then put yourself in a situation where you have to now hire and train a new employee or hire a more experienced worker who can “hit the ground running”.
Laying off employees during economic downturns should be a “last resort”. Well, at least not until you have explored all other avenues, namely trying the strategies I have outlined below. I will even go one step further. If you have already implemented some (if not all) of these strategies, or have made them an integral part of your company’s operating culture, chances are you have not cancelled your long-planned vacation to the Bahamas.
Additionally, although these key strategies can be adopted by businesses regardless of size, they are primarily geared towards Small Businesses. The definition of a small business will obviously vary by industry and, more importantly, it may depend on the business owner’s personal assessment. Regardless, you can find out the classification of your business as defined by the Small Business Association (SBA) by going to http://www.sba.gov
1. Schedule Weekly Budget Meetings. The assumption is that you have a budget. You may be surprised at how many small businesses either (a) don’t spend the time to develop a proper budget or, (b) don’t have a regular budget review process. Use the meeting to challenge managers and supervisors to find ways to reduce expenses in their respective departments (and reward them). Have the managers call in via conference calls if you have satellite offices in various parts of the country or globally. Make sure they are prepared with arguments to justify the budgets of their various departments and plans on how to cut costs.
2. Set up a Profit Committee/Task Force. This should be employee-driven. Challenge them to contribute ideas but, more importantly, reward them for good ideas that actually get implemented.
3. Revamp your performance reviews. Are the employees (especially Senior Managers) objectives aligned with company goals (i.e. increase sales, reduce expenses, improve customer service)? Are the goals more than simply rhetoric or “feel good” words? Simply put, are the objectives specific enough and…can you really “MEASURE” the progress?
4. Review your “Turnover” ratios. Profits are quickly eaten up by idle inventory a late-paying customers. Incorporate these items as a part of your budget review process. Work closely with your vendors to reduce case packs, or get simply get rid of items that don’t sell! Offer to settle with your late-paying customers or arrange for installment payments on outstanding receivables. Getting something is better than nothing in tough economic times.
5. Rely on the leverage you have with your vendors. Partnerships should be more than just “talk”. Negotiate better terms, i.e. try to increase “days to pay” for your invoices. Even taking an extra 5 days per month on a base of business valued at $1 million annually can earn your business extra interest of over $3,000, after taxes. That’s real money!
6. Change your Payroll Cycle. If you are on a weekly payroll cycle, consider moving to bi-weekly. If you are paying bi-weekly, consider moving to semi-monthly (15th and 30th). Perform a cost-benefit analysis to make sure this makes sense for your business. You can reduce payroll processing costs which can be significant especially if you have a fairly large employee base.
7. Get on the “green” bandwagon early. Become more energy efficient. Who knows…you may even qualify for tax breaks. Get employees in the habit of turning off lights when they leave conference rooms. Installing sensors for rooms or areas used infrequently may be something to think about. Turn off computers and unplug office equipment at the end of each day. According to the government’s ENERGY STAR program, 40% of the electricity that home electronics use is consumed while the products are turned off. I would imagine this applies to office equipment as well.
8. Meet with your banker. Set up a meeting right away. Not only will you be building a critical relationship (one that too many managers neglect), but ask them for ideas. They have the benefit of seeing what works (or doesn’t) for other businesses so feel free to pick their brain. Best of all…it’s free advice! Discuss things like…putting extra cash in Money Market accounts, CD’s etc. See if you can move your operating account to an interest bearing checking account. While the interest earned may not be “earth shattering”, it is still money earned without doing anything different. If there is a limit on the amount of checks that can be written in such an account, analyze the fees that the bank may charge vs. the interest that can be earned. Pay bills electronically and offer direct deposit for your employees to reduce any check writing fees. Also, are you carrying too high balance of a balance in your checking account? Work with your accountant and take a look at your cash flow to see if some of that idle money can be earning interest elsewhere.
9. Trim your travel budget (if you still have one). Telephone and/or Video Conference will save you tons of cash. Also, are the seminars and conferences you attend every year really paying off? Maybe attending 2 instead of 4 will reap the same benefits.
10. Renegotiate contracts. Bring in service providers (telephone, software, etc,) and consultants to discuss current contracts and reduce fees. Take a look at your leases (office equipment, rent, etc.). Also, are you taking full advantage of any “hidden deals” and/or discounts? Have you been paying attention to the invoices in an effort to avoid “overcharges”? Take advantage of the economic downturn. No one wants to lose a customer at this point. Where appropriate, bring other providers in to bid for your business. Caution: don’t hire them simply because they are cheap!
11. Tax strategies. If you invest a lot in equipment and are incurring high business equipment taxes Explore states with business-friendly tax codes. There are benefits to setting up an “equipment holding” company in a low tax state. Business losses and write-offs may also result in your business qualifying for various tax breaks and deductions. Talk to a good tax attorney about how to maximize these and other tax deductions for your business.
12. Budget for “reserves”. In other words, have a “contingency” or “miscellaneous” account as a line item in your budget. A good starting point would be to set aside 5% – 10% of all your total expenses for unforeseen circumstances. Keep in mind, if we could predict the future, we would all be millionaires. Incorporating the “reserve” account as an “expense” item is simply good business policy.
13. Look at your health insurance benefits. If you haven’t spoken to your Insurance Rep in a while, now would be a good time. You should be reviewing your policy every six months anyway. A slight change in your workforce level can have a significant impact on the employer (and employee) is your contract coming up for renewal? Can you break the contract without incurring any fees? You may be able to find a good deal out there without sacrificing coverage.
14. Conduct annual invoice audits. Look closely at the invoices received from your vendors. If you don’t have a good system for monitoring the invoices before they are paid, you may be surprised at the number of duplicate or erroneous payments that can occur. An extra “0″ added to a $1,000 invoice results in a $10,000 payment and a $9,000 mistake. Incentivize your employees when they discover these errors. For example, if they recover monies, split it with them. It’s a “win-win” deal!
15. Go after abandoned customers. If a competitor closed its doors, that should spell “O P P O R T U N I T Y”. The customer may be cutting back, but when things get better or they find a new job, they will be back. You will want to make sure you are well positioned to fill the gap left by your competitor.
16. Explore new sales markets. As strange as it may seem, an economic downturn is the perfect time to look for opportunities in new markets. Territories once shunned (especially overseas) now deserve a second or third look. Again, get ideas from your employees.
17. Stay involved in your community. Don’t cut back on your sponsorship of community events and charitable donations. The money spent on the uniforms for the Little League Baseball team is “big deal”. People remember this stuff. Those people are potential customers or good referral sources. Actually, its worth much more than the tons of money you spent for the sign at your local Major League Baseball stadium. You know…the one that nobody notices!
18. Do you twitter? Do you have a presence on the social networking sites? Yes, I do mean Facebook, Twitter, MySpace, etc. Are your employees set up on LinkedIn? Even if you are a “Mom and Pop” type businesses, consider paying one of your tech savvy employees 15 or 20 cents extra a week to post updates and monitor these sites for you if you do not have the “know how.”
19. Part-time and Independent Contractors. Before you consider laying off, explore the possibility of reducing hours or changing the status of an employee to “Independent Contractor”. The employees will still appreciate having an income and, at the same time, you will save money on payroll taxes and/or health insurance contributions you were obligated to.
20. Finally…be honest with employees. Don’t tell them today things are great, and then tomorrow start laying off. On the other hand, if things are really tough, let them know. If you build an honest relationship and take the time to let you know how much you appreciate their effort, they will “go to bat” for you during the tough times. If you do have to resort to laying them off, they will understand even if it hurts. Chances are, if you have implemented the other 19 strategies mentioned her and made them an integral part of your company’s culture, your employees will be the ones saving your company from going under in an economic downturn.
Author: Donald Harper
Article Source: EzineArticles.com
Thursday, July 31, 2014
We make it our responsibility to know you and your business. LaMothe Services will work closely with you to ensure that the solutions we provide are tailored to meet your unique needs and challenges. We are committed to your success. Our job is to enter into collaborative relationships with you as our client and take on those assignments that provide dramatic increases in growth and profitability.
LaMothe Services will provide you with the resources to optimize every opportunity.
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At LaMothe Services our highest priority is satisfied customers. We are proud to serve you and work hard to earn your business. Call 727-458-8333 to schedule your free personal 40 minute consultation. There's no obligation, only opportunity.
Monday, September 9, 2013
“Don’t hate on Facebook.” Give it a chance before you decide to curse it to hell as an annoying social site that is a waste of time. If you STILL aren’t using Facebook for yourself, you won’t be able to understand how to use it for anyone else.
Create your “internet marketer” profile. I prefer when people give it their own personal touch. Add some (and only some) albums of cool pictures for me to see what you are like. Myself among many others are dying to judge you. This sounds a lot worse than it actually is.
By now, you probably already know over 200 people on Facebook. Whether they are your actually friends, or authors of the blogs you read. The #1 Simple Step of Social Media Success is to connect with these people, according to Chris Winfield. Facebook makes it really easy for you, and separates these people into networks, and clubs. You already know who you should be conversing with. In most cases, networking professionals will accept your friend request.
Some of these people, you might not have gotten a chance to talk to at the latest convention and now you are looking at mobile uploads of their children. This really is a wonderful tool.
Here are 10 reasons why you should STILL be using Facebook as a Marketing Professional:
1. Join all the groups that relate to you and add connections: Start conversations with people you look up to in the industry. Possibly gain a friend request or two hundred.
2. Promote your blog or other blogs you are promoting on your profile, using BlogFriends. You spent hours perfecting the perfect blog post, now everyone knows.
3. Draw attention to yourself quickly: Upload a new album, post a note, poke people (occasionally), comment on everyone’s stuff. Being popular on Facebook can easily transfer over to real life.
4. Set up real life connections: Introduce yourself to your Facebook friends. Start a relationship. These people are also voters on Social News sites, and blog writers, and good people to know.
5. Research information for clients and Gain Knowledge: Dive head first into groups and read what people are saying about your clients. Excellent for those who are practicing Reputation Management. Read forums, participate, research, and get to work!
6. Network before big events: With SMX West coming up, there are tons of groups to join. See who will be there. Set up a meeting with these people by sending them a message on Facebook, or just simply join the group so people will know you will be there as well. Look at their profile, if they have recent news, you will have a conversation starter at the convention.
7. Update your Status: I hate to say it but those people who tie in their Twitter with their Facebook status are super helpful. If you become a regular status updater, people will always take interest in whatever your doing. It’s like reality TV. *Congratulations to Glen Allsopp who just PASSED HIS DRIVING TEST! 38m ago*
8. Applications Help: It’s true that many applications are annoying. But the Stumble Upon application is awesome! It shows on your profile and news feed what you are Stumbling, so this way everyone else knows, and will also stumble if they are interested.
9. Facebook is Improving: The ever changing controls are sometimes annoying but helpful. You can edit your preferences in the news feeds and see what you want to see. You can also control what people see about you with privacy and security settings.
10. Facebook Profiles Rank- If clients are looking you up, they might like the fact that your profile comes up (but they might not). In this case, it works the same as LinkedIn. So make sure to keep it as Professional as the business you run. *For example: While hiring, I did a search and found a possible employee Facebook page and lets just say they weren’t hired based on the profile picture alone. This could have totally worked in their favor, if I saw a nice clean page with nice comments from Coworkers, friends, a link to their blog, etc.
So… Why Not? It’s totally up to you how you want to use it. If you choose not to use Facebook, then don’t. If you just want to use to it watch what everyone else is doing, that is fine too. You don’t have to add every application, or give drinks to your Top Friends. You can totally make what you want of it.
I hope that this post helps people who are still “Hating” and helps them find success with Facebook conversations, like I have in many ways.
If you have any other reasons or ideas why Marketing Professionals should STILL be using Facebook, please let me know!
Thursday, February 9, 2012
Creating Interest and Loyalty
Employing greener practices in your place of business creates interest and loyalty from a variety of sources, like your consumers, investors, and your own employees. The National Restaurant Association (NRA) also supports this theory: “(There is) growing interest by consumers in wanting to frequent restaurants or feeling more positive about frequenting restaurants that are instituting green practices,” said Sue Hensley, senior vice president of communications for the NRA. “I don’t see consumers’ interest waning in that area.”
Showcasing Your Sustainable Efforts
You may be surprised to find your customers and associates have been waiting on you to capitalize on their enthusiasm, creativity and loyalty. According to Merchant Circle, this is one marketing opportunity that small businesses can easily take advantage of. Adding/improving upon more socially responsible service offerings also increases public image and stakeholder engagement. A company with a positive reputation often has the competitive edge.
Offsetting Climbing Energy Costs
A restaurant’s profit is typically only 3-9 percent of its total revenue. The money saved on operating costs adds directly to the bottom line, so saving 20 percent on energy operating costs through no-cost, low-cost and investment energy improvements can increase your profit as much as one-third. Check out a full list of best management practices for your business sector here.
Tips to Get You Started
The key for a business owner is to still provide goods and services at a profit, while sustaining the environment. Here is a list of some of the key elements to start thinking about when first taking on sustainable practices for your small business:
* Set goals — Identify your purpose, whether your goal is to cut costs or to be environmentally responsible, or both.
*Watch the bottom line —Implementing sustainable practices that provide no return on investment are not practical or wise.
* Start small — Look at reducing energy, even if it’s as simple as unplugging charges while not in use. Switch to CFL or LED lighting—you don’t need to wait to phase these in; your overall energy reduction justifies the immediate switch—and then progress to purchasing energy-saving appliances. Realign procedures to maximize energy efficiency.
*Look upstream — Find sustainable suppliers and sourcing. Know the environmental impact all your sources have on your business.
*Look downstream —Examine your waste stream. Look for ways to reduce, reuse and recycle.
*Build green — Implement green building practices. There is even an option to seek a Leadership in Energy and Environmental Design (LEED) certification.
*Invest in people — Investing in the community and your own employees is an essential component to sustainability.
*Learn more – Join and support sustainable organizations and attend their education events.
*Get certified—Invest in a Life Cycle Assessment or seek an audit from a third-party certifier, if applicable.
*Tell others—Share your story with customers so they know not only where your products originate, but also why they should buy your product over others, especially if it costs more. For more, read “True Restaurant Sustainability: More Success, Better Future,” published by NetWorld Alliance.
*Avoid “Green Washing” —Part of being profitable while being green for small businesses is gaining a loyal customer base and creating interest. It is easy for consumers today to be skeptical of all of the “green” talk that is going on.
Catherine Corley is Vice President of Strategy for Sam’s Club, which published the white paper, “How to Be Green and Stay Lean: How Being Sustainable Can Save Your Business Money.”
Tuesday, June 28, 2011
How to Build a Sound Marketing Plan for Your Small Business
Not unlike a business plan, a marketing plan can play an important role in the success of your small business. While the plan is primarily for your own purposes, it should include:
*Your products and/or services
*Your demographic audience
*Methods of selling
*Your geographic market
*Your competition and your competitive edge
*An overview of the marketing tools available: Media outlets, PR possibilities, community activities, conferences, potential speaking engagements, and so on.
The final objective of your marketing plan is to define who you are trying to reach, what you are selling, how you will reach this audience, and how much it will cost to do. You will then devise a means of communicating your message to your audience.
Just as you do in your business plan, you will need to pull the many pieces together to demonstrate how you will reach your target audience. For example, if your plan is to increase the sale of your brand of healthy popcorn to a teen market, you might show how you will distribute samples at school activities, sponsor a series of events for teens, and propose articles on the health benefits of your popcorn to teen-oriented magazines and Web sites.
Within your marketing plan show how you will use diverse methods to get your message across, including different forms of media, product samples, sponsorship and so on. Also, maintain a level of marketing at all times. During slower seasons you may just want to keep your brand in front of your audience, while in busier seasons you will need a more aggressive approach. Define such a strategy in your plan.
As a small business, you can make a big impact by seeking out media that appeal to your niche market. Keep in mind that marketing is a long-term effort and slow and steady typically wins the race — or in this case, the customers.
Tuesday, January 12, 2010
LaMothe Services, LLC
Q: I really have no choice but to start a business as I have been out of work for too long. I'm excited about getting going but what should I be on the lookout for -- what mistakes can I avoid? Ed
A: This is a good, smart question. While it is true that small business owners tend to be an enthusiastic, optimistic bunch, that same enthusiasm can be a hindrance when we think that all of our ideas are great ideas.
Here, then, are the 5 Most Common Start-up Mistakes (and how to avoid them):
5. Not looking before leaping: Sometimes you have to jump right into a new business -- an opportunity presents itself, the time is perfect, whatever. But far more often you do not have to dive in headfirst (and you should not).
Take a breath, slow down, stand back, and take a critical look at your venture before investing too much time or money.
- What could go wrong?
- What part of your plan is weakest?
- What if things don't go as planned?
- What's the deal with your competition?
This sort of critical analysis will serve you well. It can help to point out danger signs and potentially save you from making an expensive mistake.
4. Starting with the wrong legal structure: No, there is nothing juicy about this tip, but it is vital nonetheless. Most small businesses start out as sole proprietorships. Most small businesses are making a big mistake.
Legally speaking (and I can say that as I am a "recovering attorney"), a sole proprietorship offers you no protection. If something goes wrong with the business, you personally are on the hook. But if you incorporate, the corporation is a separate legal entity from you. That is a main reason why people incorporate or form LLCs.
3. Lack of a marketing and advertising plan: When you start a new business, it is like being alone in a dark room -- you know you are there, but no one else does. The only way you can turn on the light and let people know you are out there is by advertising and marketing your business.
Read some books about marketing (my book, The Small Business Bible, might be a good place to start). Take some online courses. But trial and error is, unfortunately, the best teacher in this regard. Market and advertise your business, and then do it some more.
2. Undercapitalization: Yes, it is true that most start-ups begin with less than optimal funding, and yes, it is also true that many small business have overcome that obstacle, but it is also true that you will have a far higher likelihood of success if you have enough money to start properly.
At least enough to run the business and live for six months, while you get established. You simply don't want to be forced into having to choose between paying the rent and running the ad as you are trying to get your business off the ground.
And the #1 preventable start-up mistake is...
1. Having no website or a bad website: Your website is your business card in this century. One of the first things potential new customers will do is Google you and look for your site. Having no site, or maybe worse, a bad site, can kill your nascent business. And since it is so easy to get a professional site these days for next to nothing, there is no excuse for not having a great site, right from the get-go.
(Runners up: Not having a social media strategy, not being passionate about your choice, or failing to take advantage of all the free help out there.)
Steven D. Strauss is one of the country's leading small business experts. The senior USATODAY.com small business columnist, his latest book is the Small Business Bible. A lawyer, author, and public speaker, Steve speaks around the world about small business and entrepreneurship, including a recent visit to the United Nations. He has been on CNN, MSNBC, ABC, and The O'Reilly Factor among many others, and his business column, Ask an Expert, appears weekly at USATODAY.com. .
Saturday, December 12, 2009
In recent years, the notion of a “green economy” has gathered steam. The conversation accelerated when the economy worsened and unemployment rose and suddenly, a green economy was seen by many as a pathway out of the current economic situation.
Studies in 2008 found that 2 million jobs in two years could be created from adopting green practices, and 4.2 million green jobs by 2038. Similarly, in a survey of more than 100 primarily fortune 500 companies, 47 percent said that they were increasing their investment in green product development this year.
The same survey found, however, that 46 percent of companies’ environmental, health and safety budgets will remain the same in 2009 as they were in 2008, despite the economy. These statistics highlight the challenge today’s companies face when trying to make changes to become more socially responsible on a tight budget.
Your business — and the millions of other small businesses in America — can make an enormous impact on the environment through sustainable initiatives. But how do you accomplish your desire to “do good” without sacrificing the bottom line? And what tools are available to help you in your journey?
Fortunately, there are ways of gaining access to investment capital. One out of every nine dollars under professional management in the U.S. is involved in socially responsible investing, adding up to more than $2 trillion. That number represents a huge pool of money being invested in companies that are working to become more sustainable, as reported by Merchant Circle — an online community dedicated to connecting local businesses and their customers. This goes to show that capital investors are looking for companies showing green platforms in which to invest.
On the flip side, many companies have found cost savings by looking into conservation strategies and finding there was much fat to be cut. For example, through energy conservation and the use of renewable energy, IBM claims it has saved more than $100 million since 1998, while simultaneously avoiding more than 1.28 million tons of CO2 emissions. And Wal-mart estimates it will save $7 million annually on electricity by replacing incandescent light bulbs in its stores’ ceiling fan displays with super efficient compact fluorescent light bulbs.
Companies that have adopted alternative fuel and energy solutions are able to lower their exposure to oil price volatility while increasing energy efficiency, according to ChiefExecutive.net’s “It’s Not Easy Being Green.”
Learning by the examples set by companies both big and small, while also following simple steps aimed at reducing your company’s environmental impact, can set you on a path to saving money and saving the planet.