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By creekmoremarketing 30 Jul, 2015
The 7(a) Loan Program, SBA’s most common loan program, includes financial help for businesses with special requirements. Learn more about the 7a loan program by watching the short video below.
By creekmoremarketing 29 Jul, 2015
By creekmoremarketing 29 Jul, 2015

Are all Your Customers Created Equal?

 

“The customer is always right.”
“We have to take care of the customer no matter what.”
“The customer focused business is a successful business.”

 

We’ve all heard or probably said those things.

 

Have you ever had a customer that you were always happy to see and were happy to see you? Your transactions always went well, were profitable and they never complained about price, paid on time or early and generally were a pleasure to work with. You probably found yourself looking for ways to make them even happier, right?  This was why you started this business, right?

 

Then there’s the customer that complains about everything, never happy, never satisfied, complains about the price, demands discounts, pays late, and is overly demanding. Everything is a crisis and is never his fault. Your stomach tightens and you can feel the perspiration on your forehead the moment you see his number on the caller ID. It shouldn’t be this hard. It would be great if you didn’t have to deal with this customer but sales are sales and you just have to put up with it.

 

Wouldn’t it be great if all customers were like our best customer? How great would it be to only have to deal with the great customers? Well, maybe it’s time to fire some of those pain-in-the-neck customers and, believe me, this will be one of the hardest things you’ll ever do. We as business owners only think about that next customer, that next sale. If we take a deeper look, we may see that all customers are not created equally and, more importantly, some customers are not worth having.

 

We’ve all heard of the Pareto Principle, that 80% of our revenue usually comes from 20% of our customers. What if there was a way to use the Pareto Principle to really concentrate on your best customers, meet their needs efficiently and have plenty of time to think of ways to make their experience with you better. What if you could forget about all those other customers that are constantly complaining and demanding this or that taking up far too much of your time. There is – fire those customers!

 

So how do you know which are the best customers to get rid of?

 

Try these steps to identify customers you may want to fire:
1. Copy your customer list down the first column on an Excel spreadsheet.
2. Across the top columns, list all the attributes of a great customer: profit generator, pays on time or early, orders regularly, etc.
3. In each attribute, rate the customer from 1 – 5 with 1 being worst and 5 being best. After the last column sum the row to get that customer’s score. You can then use the sort function to sort your list from best to worst by using the sum column.

 

Now that you’ve objectively identified your problem customers, you have to come up with a plan. Here are some strategies to think about:

 

Fix what you can fix. Review each problem customer and think about all the things that cause you pain. Are there ways that this customer can be saved? What can be done to eliminate the problems? Maybe there are solutions that can be used to save the relationship.

 

Be honest. You don’t want your customer bad mouthing you to other potential customers so you need to be very sensitive as you explain your decision. Tell the customer that you have worked hard to service their needs but feel they would be a better fit elsewhere. Refer them to a competitor and make the introduction for them. Follow up to make sure that the transition went well.

 

Don’t look back. You’ll miss the lost revenue at first but the extra time will allow you to focus on maximizing sales from your remaining customers. The most likely outcome will be a drop in sales but usually your gross profit will hold steady.

 

Look in the mirror. If you seem to continually attract the customer from hell, perhaps the problem is you. Maybe your marketing is not targeting your ideal customer. If you did the customer analysis you should know who your ideal customer is now. Test different marketing tactics to attract only that customer.

By creekmoremarketing 29 Jul, 2015
Get Your Business Online.
By creekmoremarketing 29 Jul, 2015

Several years ago, the business I owned at that time was struggling and finding cash just to operate was a daily problem. Needless to say, I wasn’t sleeping very well. One day, my CPA called and said the company’s tax return was ready and wanted me to stop by and go over it. When I arrived at his office, he had a big smile on his face as he extended his arm to shake my hand.

 

“Fantastic job,” he said, “you’ve really turned this company around and I’m impressed how profitable it now is.”

 

Me, profitable? I had just been wondering how I was going to find enough cash to make payroll on Friday. I decided to come clean with him.

 

“The truth is, I probably don’t deserve your praise because I don’t have enough cash to make payroll on Friday and I’m really not sure I can keep the doors open for much longer,” I said looking down in shame. “How can I be profitable when I don’t have any money? Where did it all go?”

 

He was quiet for a few moments. Slowly, he picked up the tax return and slipped it into a big white envelope with his company logo emblazoned on it and placed it on the desk in front of me.

 

“Do you know the difference between cash and profit?” he asked quietly.

 

“What do you mean? Aren’t they the same?”

 

“Not at all,” he said. “Let me explain. Profit is only an accounting term used to define the result of the accounting equation: Sales minus cost of sales and expenses equal profit. It’s very simple. We sell something, pay our bills and whatever is leftover we call profit.”

 

“Cash, however, is not generated by some equation. Cash is generated only through the receipt of cash in some manner, either through sales, borrowing or taking in investment dollars. When we pay our expenses, whether they are for equipment, materials, labor or taxes, we must use cash to do so. For example, when your company gets a new contract, you usually have to buy about $20,000 worth of equipment to place at the new customer’s location before you get the first new sales dollar. And, you need to pay those suppliers off in about 60 days, correct? And, you won’t bring in enough profit in those 60 days to pay that bill, correct?” He paused so I could think about this.

 

“Now, on your profit and loss statement, it will show that you had both an increase in sales and an increase in profit. You as the business owner spend most of your time trying to grow your business by increasing customers and sales. The problem, and one that most business owners fail to realize, is that increased sales cost money.”

 

“Most businesses need new assets to support an increase in sales and these new assets need to be paid for usually before the new sales can generate sufficient profit to cover the increased cost. Sometimes it is new equipment, new staff or a big order of materials. Sales growth has to be planned and, fortunately, there are tools that you can use to make sure you can afford to grow and take advantage of new opportunities.”

 

“Let me ask you this,” he asked, “how do you decide what bills to pay and when?” he asked.

 

“Well, lately I go online and check the bank balance and will pay whoever is calling and threatening the most,” I said being very honest.

 

“That’s what I thought,” he chuckled. “Cash is the most precious resource that any business possesses. You have to plan carefully who you pay this week as well as the rest of the month, next three months and the year. The only way to do this is to forecast your cash inflows and outflows on a weekly and plan 13 weeks forward. It can be hard at first, but if you do this habitually, you will be able to predict when you will be short on cash and hopefully find ways around the shortfall.”

 

“You mentioned ‘tools’ that I should be using to plan my cash inflows and outflows. What are they?” I asked.
He pulled out a single piece of paper from the top drawer of his desk and handed it to me. It was a copy of a spreadsheet with 14 columns and was full of numbers.

 

“This is my firm’s cash forecast and we use it every week. I’ll send you a blank template that you can customize for your company,” he replied. “Try it for a couple of weeks and if you get stuck, give me a call and I’ll help,” he said as he stood up.
I knew my time was up and shaking his hand, I thanked him again and again.

 

This is a true story and learning how to forecast my cash inflows and outflows allowed me to grow my business methodically and kept me sane. If this is your story too, send me an email and I will be happy to send you a template that you can use to forecast your cash. If you need help to get started, call our office. Once I started using the template, it wasn’t long before I was sleeping much better.

David Oetken
Director Louisville SBDC

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By Robbi Meisel 06 Jan, 2017

LEXINGTON, Ky., (Jan. 5, 2017) – The Kentucky Small Business Development Center significantly contributed to the state and federal economy during the 2014-15 fiscal year, according to an independent study conducted by James J. Chrisman, professor of management, Mississippi State University. The study was completed in June 2016 and shows that small businesses working with the center increased sales and employment figures at a greater percentage than an average business in Kentucky. KSBDC clients increased sales by 14.4 percent versus 3.8 percent, and increased employment levels by 15.1 percent compared to 1.5 percent.

Other findings from the Chrisman study:

  • KSBDC clients created 1,156 new jobs.
  • For every dollar invested in the program, $2.63 returned to the economy.
  • For every dollar invested in KSBDC counseling services, $9.47 returned to the economy.
  • KSBDC clients obtained $58.9 million in financing.
  • KSBDC clients increased incremental sales in Kentucky by $108.4 million.
  • KSBDC clients generated $8.55 million dollars in state and federal tax revenue.
  • Clients gave KSBDC staff a 4.7 on a 5-point scale for knowledge and expertise.
  • Clients recommended KSBDC services 98 percent of the time.

“KSBDC staff work very hard to serve Kentucky small businesses. We are very proud of the results of this independent, third-party research and are very pleased with the impact produced by our network,” said Becky Naugle, state director.

The Kentucky Small Business Development Center, part of the University of Kentucky College of Agriculture, Food and Environment, is a network of 13 offices located throughout the state. The center helps existing and start-up businesses succeed by offering high quality, in-depth and hands-on services. KSBDC is a partner program with the U.S. Small Business Administration. For more information on KSBDC services, visit their website, http://www.ksbdc.org/ .

 

Writer: Roberta Meisel , 859-257-7668

 

UK College of Agriculture, Food and Environment, through its land-grant mission, reaches across the commonwealth with teaching, research and extension to enhance the lives of Kentuckians.

 

By Robbi Meisel 18 Oct, 2016

LEXINGTON, Ky., (Oct. 18, 2016) –The Office of Veterans Business Development recognized Patricia Krausman, director of the Elizabethtown Small Business Development Center, as one of the six most outstanding instructors for the 2016 Boots 2 Business program.

Boots to Business is an entrepreneurial education and training program offered by the U.S. Small Business Administration. It is a training track within the U.S. Department of Defense’s Transition Assistance Program. The curriculum provides valuable assistance for transitioning service members who are exploring business ownership or other self-employment opportunities. The program leads them through the key steps for evaluating business concepts and providing the foundation required to develop a business plan. In addition, participants are introduced to Small Business Administration partners and resources.

The recognition was based on the instructors’ contributions and dedication to the program and to service members, veterans and spouses in their business ownership endeavors. Nominations for this achievement came from Small Business Administration offices across the country.

Krausman has provided business management consulting and training for more than 20 years. In 2009, she developed and served as the director of the Kentucky Small Business Development Center’s Veterans Assistance Program, the resource for veteran business support and advocacy. Additionally, she was chosen as A Veteran’s Small Business Advocate of the Year in 2013 by the Kentucky Small Business Administration. She takes an active role in her work and advocacy, serving as a member of the Kentucky Commission on Small Business Advocacy, the Lincoln Trail Workforce Development Board and the Governor’s Veterans Interagency Task Force. She was awarded the prestigious Kentucky Association for Economic Development Allied Professional of the Year in 2014.

“The Kentucky Small Business Development Center has a long-standing commitment to veterans and veteran-owned businesses. Boots 2 Business is a program specifically designed by the Small Business Administration and its resource partners to ensure that veterans have expert guidance and direction in their path to entrepreneurship,” Krausman said. “It’s an honor to be included in the recognition of outstanding instructors for the national SBA Boots 2 Business program. Veterans are exceptional entrepreneurs, and it is rewarding to have the opportunity to support them in their successful transition to small-business ownership.”

The Kentucky Small Business Development Center, part of the University of Kentucky College of Agriculture, Food and Environment, is a network of 13 offices located throughout the state. The center helps existing and start-up businesses succeed by offering high quality, in-depth and hands-on services. KSBDC is a partner program with the U.S. Small Business Administration. For more information on KSBDC services, visit their website, http://www.ksbdc.org/ .

 

Photo provided by the Kentucky Small Business Development Center –Patricia Krausman. ©KSBDC

 

Writer: Roberta Meisel , 859-257-7668

UK College of Agriculture, Food and Environment, through its land-grant mission, reaches across the commonwealth with teaching, research and extension to enhance the lives of Kentuckians.

 

By Robbi Meisel 14 Jun, 2016

LEXINGTON, Ky. – In anticipation of the many business opportunities that could stem from the construction of a new federal prison in Roxana, the Kentucky Small Business Development Center, in partnership with Letcher County Fiscal Court, is sponsoring When Opportunity Knocks, a luncheon and resource fair from 11 a.m. to 1 p.m. EDT June 22 at the Pine Mountain Grill in Whitesburg.

During lunch, local business owners will share how they answered the knock of opportunity and found success. The event is free and seating is limited; preregistration is required. Reservations can be made online at http://tinyurl.com/j9rdjtf .

At the event, organizers will discuss a three-part series of training events. Series topics will include general business and government contracting. The first event will take place 6 p.m. Tuesday, July 12 at the Whitesburg campus of Southeast Kentucky Community and Technical College. Training will also take place at 6 p.m. July 26 and August 9. Prior to each training event, a resource fair will begin at 4 p.m.

For more information, visit http://www.ksbdc.org/moving-forward-letcher-county or email Shawn Rogers at movingforwardletcher@ksbdc.org .

KSBDC, part of the University of Kentucky College of Agriculture, Food and Environment, is a network of 13 offices located throughout the state. The center helps existing and start-up businesses succeed by offering high quality, in-depth and hands-on services. KSBDC is a partner program with the U.S. Small Business Administration. For more information on KSBDC services, visit their website, http://www.ksbdc.org/ .

Other partners include: Kentucky Small Business Development Centers at Pikeville and Ashland, Southeast Small Business Development Center, Small Business Administration, Southeast Kentucky Community and Technical College, Kentucky Procurement Technical Assistance Center, Southeast Kentucky Economic Development, Kentucky Highlands Investment Corporation, Mountain Association for Community Economic Development, Kentucky Innovation Network – Pikeville , Kentucky River Area Development District, Eastern Kentucky Concentrated Employment Program, Federation of Appalachian Housing Enterprises Inc. and Kentucky Finance and Administration Cabinet – Minority and Women Business Enterprise Certification.

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