• Dennis Kelley

    David Kelley

    Dennis Kelley is a seasoned professional with over 30 years experience leading teams and coaching people to success. Dennis is in high demand as a speaker, consultant, trainer and an author... Read More

    David Kelley

  • Inspirational Quote

    “The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” -- Michalangelo
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  • June 2018
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Quick…When I Say Salesmen What Comes to Mind?

salesWhen I ask most people that question the typical responses are a wrinkle of their nose and words like, pushy, intrusive, won’t take no for an answer, an interruption, and even rude. It is a reaction born from experience and stereotypes. Just think of the last time you interacted with someone trying to sell you something. Was the experience a good one? Did you find yourself becoming defensive?

Salespeople who act in ways that make us uncomfortable have confronted us all.  For example, there is the sales person that just would not leave you alone or tried to push you into buying something you didn’t need. Not all of our experiences have been bad, but they are the ones we remember…and tell others about! The good experiences tend to be ones that feel right and you did not feel pressured into the purchase. The salesperson may have been very persuasive, but their style and approach did not leave you feeling pressured.

Many times, I find my clients struggling with the concept of truly selling in their business. They are concerned others will see their business in this same negative light. “If I’m just nice to my customers and give them a good product, then they will buy,” is the common position many owners take.

But, here’s the real shocker…we are all salespeople! That’s right; we are all salespeople.  We sell every day…in our personal life, with our spouse, kids, friends and others we meet, during our normal daily activities. In your business life, you are selling to your employees, co-workers, vendors, and yes, even with your customer.

You see, selling occurs anytime you are trying to persuade someone else. In fact, the most successful sales people are those who can talk to people, listen actively, and uncover their needs to reach agreement. Selling is actually a very positive activity and extremely important in every business. No business can survive if selling is not a key priority that is practiced and coached daily.

It is also critical to understand your sales numbers. Three areas you must focus on in order to improve your results are: your conversion of prospects into paying customers, the average amount each customer spends with you each time they make a purchase and how many times they buy from you. Let’s take a quick look at each one.

Sales conversion rate – set up a simple process to measure the number of prospects your business generates and how many of them make a purchase. Your business already generates prospects so converting more of those prospects to paying customers is a low-cost way to increase revenues. This includes how many people contact your business through website visits, phone calls, personal visits, pro-active salesperson contacts, etc. Improve your conversion rate and your marketing efficiency increases making your business more profitable.

Average amount sold to each client – measure the average ticket size per sale in your business. Increasing this average through cross-selling and up-selling will increase revenues very cost effectively. Your average will increase by offering your prospects and clients additional services or adding value to their purchase. It goes without saying that this must be done ethically and be in the interest of the client. However, there are many ways to increase the average amount sold. Some of these include offering additional products or services, service agreements, or other valuable items that are in the best interest of the customer.

Number of times a customer buys from you – keeping your current customers coming back again and again is cheaper than finding new people to buy from you all the time. Build a base of loyal customers and keep them coming back to grow your business. Successful businesses know how to keep their customers coming back while also attracting new ones. Build customer loyalty programs, communicate with them on a regular basis, understand and meet their on-going needs and be sure to thank them for their business.

I define selling as “professionally helping others to buy.”  Note the term professionally as that is a critical part of the process.  It is not about being pushy, rude, aggressive, etc.  It is about finding a need and showing the prospect how to meet the need through your business and its products…professionally. 

Changing perceptions, either yours or those of your team, about what selling is and how to do it will help you grow your business revenue and even more importantly your profits. 

Now go sell, sell, sell…professionally!

To your success,
Dennis

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What if It Cost You Money to Buy Time

Lost time = lost money!

Lost time = lost money!

If you are a solo-preneur, a sole-proprietor or a small business owner, then one of the biggest double edged swords in your business is that you don’t pay “cash” for the inventory of time you sell. One edge of the sword is the amount of money you can make selling your time. The other edge of the sword is the self-defeating tendency to give away your time for free since there’s no hard cost associated with it.

Your time is one of the most valuable assets you have. Giving it away for free just doesn’t add up. Think about it like this. Imagine that every day you show up at work and before you can begin work you have to pay $800 to purchase a bucket with eight gallons of liquid time in it. You have to sell those eight gallons during the day. If you don’t then you won’t have the cash you need to buy your liquid time tomorrow. Of course, your goal is to sell those eight gallons for more than $800 so you can make a profit. 

Also, the bucket has a small hole in and will leak liquid time and there isn’t anything you can do about it. This hole represents the amount of time wasted from interruptions, distractions and delusions during the day. In order to not lose too much of your valuable time, you need to stay focused on selling it quickly. The more time you waste the more time runs out of the bucket and won’t be available to sell.

Regardless of the type of business you are in, you have to ask yourself if you are being honest with yourself. Are you frustrated every day because you know that you are wasting your time on insignificant things that you really shouldn’t be focused on? It happens all the time where business owners become so bogged down in the day-to-day minutiae and don’t sell their time for the maximum value.

Becoming or staying profitable is all about doing less insignificant activity! Remember, you can buy a bucket full of time for a personal assistant or virtual assistant for a lot less than what you can sell your time for. You can outsource your bookkeeping. You can delegate less valuable task to subordinates, or simply cut out those things that aren’t necessary. 

The real key is having the discipline and accountability to minimize “procrastination” or “avoidance” behaviors yourself. If you take a hard look at your day you’ll know what I mean. Staring at your emails while they download, surfing the web, doing non-productive tasks and the list goes on and on while your bucket continues to leak your time away!

One of the biggest mistakes small business owners make is letting the fear of paying for an assistant hold them back. They see the cash expenditure required and tell themselves that someday they will be able to afford it. Meanwhile, they will continue to perform administrative duties they could pay someone $8 – $9 an hour to do while they could be selling their time (products, services, advice, etc.) for 5, 10 or even 20 times that amount. 

Ask yourself, how much an hour of your time really is worth. If you were out doing the things necessary to build your business, sell your products or services how fast could your business grow? How much would you need to sell in order to cover the cost of a part-time or even full-time assistant? Way too many businesses are held back from reaching their full potential because the owner isn’t applying their skills and talents to the most important part of the business. 

Your bucket continues to leak all over the floor while you are doing the minor work that best fits someone else’s skills. Make the decision to invest your time in those things that will bring the highest return for your business. If you want to someday become successful enough to step back and enjoy the fruits of your labor, then you need to begin right now. Be honest with yourself and evaluate how much of your time is leaking out of the bucket each day and then fix it.

Build a Successful Business Through the Art of Budgeting

Budget Your Way to Success

Budget Your Way to Success

Statistics show that only 43% of small businesses that have employees prepare a budget that projects revenues, expenses and profit. If you include sole proprietor type businesses then that number is closer to 80%. There are many reasons for this staggering statistic. Many owners simply believe their business is too small to need to budget. Others feel they don’t have enough money to worry about budgeting. Probably the biggest reason small business owners don’t manage their business with a budget is that they don’t like to do it and they don’t know how to do it. 

What is a budget? A budget is a plan that establishes goals for how you will manage the financial resources and expenditures for your business. It is a simple equation of revenues (sales) minus expenses (costs) to determine profit. An annual budget, commonly referred to as an operating plan, broken down into monthly projections allows you to capture infrequent expenditures as well as see trends and the seasonality of your business. 

A budget creates the plan that allows you to determine if you are making progress toward your goals. It gives you the information you need to make informed, intelligent decisions about how to run your business successfully. Budgeting is important because it helps you determine if you have enough money to fund operations, expand the business and create profit and long-term wealth for the owner. Every small business owner should budget, no matter the size of the business. 

In 84% of small businesses, the owner or a partner prepares the budget. This can be done in conjunction with your accountant or CPA. There is nothing difficult about this task, however, most small business owners are not familiar with the process and therefore avoid it. 

Business budgets do not need to be a monster. You can create simple and effective business forecasts using a simple set of guidelines. If you are still unsure of how to approach it, ask your CPA or a trusted business peer. There are also many great resources from books to on-line programs to seminars on the subject. Accept the fact that there will be a learning curve in both how to create a budget as well as how to use it to manage the business decisions. 

Here are some guidelines to follow in creating an operating plan and using it to build a strong company that provides a great return for you. 

Review Your Financial History or Industry Standards

If you have been in business for a few years, pull out your records from the past 2 or 3 years and build a spreadsheet of the revenues and expenses. Break the expenses into fixed costs and variable costs and by easily identifiable categories. If your business is new, research industry standards to determine your starting point. Not all businesses are alike, but there are similarities. You can also check the IRS Website to get an idea of what percentage of revenue goes to various cost groupings. Once you have this information, you will be ready to build your forecast. 

Build a Spreadsheet with Your Expected Results

Construct a spreadsheet to estimate the dollar amount to budget for each revenue category and expense category. Review your history and / or research to determine how much to budget for each category. As your revenues increase, your expenditure for materials and other variable costs will also increase. Be sure to consider this as you create your spreadsheet. Factor in any seasonality to your estimates. Don’t just decide what your annual expense is and divide it by twelve unless your business has not seasonality or you are not expecting growth. Don’t forget to budget for marketing and promotion to build your business. 

Look for Ways to Reduce Costs

Now that you have your revenues and expenses plugged into the spreadsheet, take a look at the difference between the two. This is your profit. Is it as large as you want it to be? Fine-tune your numbers by looking for ways to cut cost. Where can you get a better deal from suppliers or make adjustments that will add to your bottom line? Or you can reallocate to give you more money for marketing that will improve results. Every penny saved in expenses will boost the bottom line. Small changes can add up quickly. 

Err on the Side of Conservative

Watching expenses and cutting wherever possible is important however, you still need to be conservative in your estimates. Be realistic in your revenue expectations and build in some cushion for expenses, as there will always be surprises along the way. 

Review Your Results Against the Plan Regularly

After each month, compare your actual result to your budget. Look for any variances and make sure you can explain them. By understanding why you missed the budget you will be able to better manage the results. If costs increased then maybe you need to review pricing or service providers. Are lower revenues a result of ineffective marketing, pricing or some other factor? If necessary, make some minor adjustments to the plan to improve your forecast for upcoming periods. By actively reviewing your results, you will quickly get a clear picture of your business and be in a position to manage it effectively. 

Use Your Budget as a Form of Restraint

The budget is not intended to constrain your business but to help you restrain from making poor decisions. Sticking to a solid plan is the most effective teacher of fiscal restraint and teaches discipline. However, don’t let the plan keep you from busting the budget on occasion should something exceptional occur. As an example, if you have discovered a marketing program that drives exceptional results, invest more in it even if it exceeds the budget. Take advantage of opportunities that arise to grow your business and adjust your plan accordingly. 

Budgeting is an easy but essential process that all business owners should use to forecast results. The goal is to provide enough fiscal discipline to keep your business running smoothly and growing to ensure success. In addition to the operating budget, it is critical to develop a cash flow budget to monitor cash levels. This is a separate but critical budget for business owners. Learning to apply the fiscal discipline of budgeting to your business will keep the business healthy. 

To your success,
Dennis

More Great Learning Tools Available

0f5a1v1dI’ve talked before about a great product that I recommend and use for my own business called iLearningGlobal.com.  The worldwide launch of the program occured at the end of March and the program is in an amazing growth pattern right now. Thousands of people around the world are seeing the value in this continuous learning program and taking advantage of it. These are the people looking to build their wealth, success and personal growth. 

The team at iLearningGlobal are introducting new products all the time. One of the new programs is called The E.D.G.E Business Training Program.  It is an incredible 52-week training and development package designed to specifically give personal, small & medium size businesses the EDGE to succeed, even in today’s economy. The unique format to this system ensures you will have up-to-the-minute, cutting-edge information and strategies along with action plans, implementation systems, accountability and support.

Some of the topics covered include; business strategy, tax strategy, asset protection, hiring, team development, sales, leadership and much more.

Vist www.ilearningglobal.biz/dkelley57 to learn more about this program and all the rest of the great content available through this great program.

To your success…

One Simple Idea to Increase Revenues

Watch Sales Grow
Watch Sales Grow

Here is a simple idea that will help you increase your revenue with just a little focus and effort.

Calculate the dollar amount of each sale that you make. Take the total dollar amount of sales you make and divide it by the number of sales made. This will give you the average of each sale you make and a starting point for measuring your improvements.
Once you know what your average is, make it your goal to increase this average. Start a simple system for keeping track of your average on a daily or weekly basis and keep a record of it. Your objective is to create ideas to increase the average.
These will be the sales tactics you employ. Some ideas to get you started include;
  • focus your sales on the higher dollar value items
  • use suggestive selling to add items of value to the sale. Think about Wendy’s and their supersizing strategy
  • bundle items that compliment each other to create a package that creates value for the customer and a profitable sale for you
  • add service contracts or similar support programs to the sale

You get the idea. Come up with your own list by brainstorming with your team. There are many ways to do this that can benefit your business. Just be sure to keep your customers at the forefront of your thoughts. Make sure you are adding value to their relationship with your business.

Just making this one minor adjustment to your sales process can increase sales significantly adding profits to your bottom line.

To Your Success,
Dennis

Will Your Banker Be There for You When You Need Them?

handshakeThe media and many political leaders have been waging an all out assault on the banking industry of late. Some of it is certainly justified given the current state of our financial system and many of the excesses that have been uncovered. However, to vilify all banks and bankers is simply wrong. The blame for the problems should not be spread equally to all banks.
 
The relationship you maintain with your bank and your banker is very important. This relationship has never been more important than today. Banks are running scared and have clamped down on their lending criteria. There is also a lack of liquidity in many banks. However, there is some money to lend for borrowers that qualify. Banks want to, and need to, lend money to businesses with strong results and a good credit rating. It is critical to their success to do so. Lending may be tight today, but it will loosen up and you want to be in a good position to take advantage of it when you need to. 
 
Banks are looking to reduce their credit exposure and risk in order to clean up their portfolios. Rest assured that if you have borrowed money, they are watching your business closely for signs of trouble. If you have not borrowed but may need to do so in the future, then building or maintaining a strong relationship today will improve your chances of being approved later. 

Think about your business and the role your bank and your banker play in your business. The bank provides necessary services – both lending and deposit accounts – to keep your business running. Your banker should be looked at as a partner that can help you weather the bad times and provide the services you need in the good times.  
 
Your specific financial needs and the availability of money create an atmosphere of security or potential risk depending on your present situation. Here is a list of the seven things you should do to keep your banker close and build their confidence in you and your business so they will be there when you need them.  

  1. Create a business friendship with your banker. People do business with people they know, like, trust and believe in. Meet you banker for breakfast, lunch, or dinner. Take in a ball game or set up informal meetings to keep in touch. Help them to get to know you. This will lead to trust which is an important component in the banking relationship.
  2. Make sure your banker knows and likes your business. Show passion and enthusiasm about your business to your banker. When you schedule a meeting hold it at your business, not their office. Let them see how your business operates and what you do. If they need to defend a credit application to an underwriter, they will be in a much better position to do so if the banker understands your business and can speak to what you do and how you do it.
  3. Keep them informed of financial developments in your business. Be proactive and provide them with financial statements at agreed upon intervals. If there are positive improvements in your sales and profits, make sure to point these out to your banker. If there are significant changes in financial obligations, like leases or debt, let them know. Make them feel as though they are an integral part of your business and its success.
  4. Borrow money before you need it. Never wait until your business must borrow money to ask for it. Establish a business line of credit or borrow for working capital while the business is in a position not to need it. Then when the time comes that you need the money to manage cash flow you will have it available. The worst time to borrow money is when you are in desperate need of it. As your business grows ask for your credit line to be reviewed and increased.
  5. Be very strategic about when and how you ask for a loan. When you apply for credit don’t just call up the banker and ask for the money. Meet with the banker and present a marketing plan and a repayment plan along with your credit application. Show them you have already determined your needs and how you will use the money to create cash flow to repay the loan. Bankers tend to discount the pie-in-the-sky projections in business plans, so instead show them in no uncertain terms how this money will be put to work to grow your business.
  6. Pay on time, all the time. Especially in turbulent times like in today’s economy, be sure to pay all your obligations on time. Banks are paying close attention to your industry and to your business. If they get the slightest hint that something may be going wrong they will probably act. This may mean a suspension or reduction of your credit line. It also will make it much harder if not impossible to borrow more money when you need it. Sloppy payment history is simply not tolerated in difficult times like these.
  7. Make referrals to your banker. Give them leads as often as you can. If you believe in your bank and your banker then tell your business friends. Once a month arrange a breakfast or lunch to introduce your banker to a prospect. Bankers love to get referrals and the more you give them the more valuable your relationship becomes to the bank. 

Developing and maintaining a mutually beneficial relationship with your banker will pay big dividends for you and your business. Too many business owners take their banker for granted and only pay attention to them when they want something. If you have the attitude that your banker is the only one who needs to work on the relationship, then now is the time to change your perspective. Make it a win / win situation for both of you and the financial management of your business will be much stronger.

Creating and Keeping a Healthy Business- Part IV

gearsThis is part four in the series about the critical steps you must focus on and understand in order to build and maintain a healthy business. In the first part I addressed the importance of key financial drivers to your business. The second part focused on truly understanding your business and how it works – how it makes money and what drives it. In the last post I reviewed the importance of establishing the shared values for your business and why it is important to communicate this culture to your team.

The fourth critical step is to have a realistic and complete understanding of the competitive environment you operate in. This is not just those direct competitors in your marketplace but also the overall environment in which your business operates. Here are a few questions to ask yourself about this:

  • Where is your industry on the product life cycle? Are you in an industry in its infancy, in a growth mode, at its peak or in decline?
  • How much does the competitive environment directly affect your business? Is your product/service unique in the marketplace or are you competing with everyone else on the same value proposition?
  • How does this environment align with your beliefs and personal goals?
  • Who are my main competitors, how do they position themselves, why would someone do business with them instead of me and what do I like and dislike about them?
  • What does my target customer really want or need from their relationship with someone in my industry?

The better you understand what is happening in your market the better you can build your strategy to compete.  Most business owners tend to just look at the few competitors that are taking business from them. The most successful companies look at the competitive environment and determine what the marketplace wants and then fills that need.

It may mean adjusting how you do business or bringing new products to the marketplace. The important thing is to understand what your target market wants and needs and figuring out how to position your business as the solution. If you stay attuned to the target audience instead of just trying to one-up your local competitor you will be the market leader and success will follow.

Thanks for tuning into this series. I hope you have found it helpful and would love to hear your feedback.

To Your Success,
Dennis