TIDBITS-10

T.I.D. – Today’s Inspirational Devotion

"In this age, which believes that there is a short cut to everything, the greatest lesson to be learned is that the most difficult way is, in the long run, the easiest." – Henry Miller

Henry Valentine Miller (1891-1980) was an American novelist and painter. He was known for breaking with existing literary forms and developing a new sort of 'novel' that is a mixture of novel, autobiography, social criticism, philosophical reflection, one that is distinctly always about and expressive of the real-life. He also wrote travel memoirs and essays of literary criticism and analysis.


B.I.T.S - Business Improvement Tips & Strategies

Recession-Proof Your Business: Volume 6 – The Four M’s of Profit

Even a brilliant business strategist will fail without profit. Adherence to the “Four M’s of Profit” can help guarantee success when times are tough.

Management
Profitable companies are well managed. To manage a business effectively requires a blueprint for employee and team training, a current and useful database of contacts, leads, and customers, a good budget and strong accounting practices, and skillful use of time and resources. Intelligent managers know how to systemize routine procedures to streamline them, while humanizing the exceptions.

That means that, for example, while customer service systems should be consistent and follow written guidelines and rules, customer service depends upon well-trained humans to spontaneously solve the problems that are unexpected or out of the ordinary. They do so by understanding the core values of the company and internalizing those to beneficially represent the business under all circumstances.

Money
Strategies for dealing with money will make or break profitability. A successful approach to managing money will involve several key components. Those include auditing costs and setting budgets that are understood and followed by everyone in the business. Next, margins need to be increased – even if only gradually – in order to fatten profits. By keeping prices stagnant the average business will begin to lose money automatically, just because of the demands placed on money by ordinary annual inflation.

A better approach is to proactively raise prices, concentrate on enhanced customer service to justify the increases, and in that way dramatically boost net profits without alienating customers. Discounts and giveaways should be discontinued, but replaced with profitable programs such as in-house financing and credit card acceptance to make it easier for customers to buy and pay for their purchases.

Marketing
Marketing should be not so much about selling, but more about buying. Marketing of products and services is too often done solely from the perspective of the seller, rather than the buyer or customer, and those marketing campaigns seldom work. Those businesses that focus on marketing as a form of customer service will tap into the needs and desires of their targeted audience in a way that translates more easily into increased business and revenue.

Customer-centric marketing revolves around offering real value and it also involves such strategies as “up-selling” to customers. They buy a deluxe model versus a standard model, for instance, and pay a premium in order to enjoy bigger benefits from the upgrade. “Cross-selling” – where a company sells other products to enhance the primary purchase, is also effective. Rather than just buying the burger, for example, the customer also buys fries and a soft drink to go with it. “Down-selling” works well when a customer might otherwise not buy anything. Accommodate their budgetary demands and make a customer for life, rather than trying to sell them what they can’t afford and losing them to a competitor.

Merchandise
Taking a top-down or macro view of business merchandise can be a valuable exercise for a business owner, because the products and services sold help define the entire business model and guide the direction of sales and revenue. First of all, when given a choice between one item of merchandise and another, look at the potential profit margins and choose the one that delivers the most bang for the buck.

Sales of computer printers, for example, peaked and then slowed down after most consumers bought one because they do not need to be replaced very often. But ink has to be replaced continually; so most manufacturers focus on selling ink rather than printers. They will practically give away a printer just to snag a customer who will then have to return again and again to buy ink refills. In other words, these printer manufacturers used to be in the printer business and sold ink to promote that product. Now they are in the ink business and sell printers in order to support their new business model. But all the while they are making profit by knowing where it comes from and how to nab it.

Identify which products are profitable, and focus on selling those. Other ways to manage merchandise include stocking only higher priced and faster-moving items in the inventory, selling exclusive lines that others don’t offer, and carrying private label merchandise. Selling only quality merchandise – and making that part of an overall brand identity – is always a wise approach and can generally deliver higher margins because people pay more for prestige, status, and excellence.