Customer Relationship Management

CRM stands for Customer Relationship Management. It is a strategy that describes about customer’s needs and behaviors in order to develop stronger relationships with them. Good customer relationships are the heart for business success. It can be defined as a process that helps to bring together lots of information about customers, sales, marketing effectiveness, responsiveness and market trends.

Finding and keeping customers is the crucial aspect of every business. Customer Relationship Management (CRM) is the way for businesses to approach customer relations systematically and efficiently. The main factor about CRM is the focus on actively managing customer relations in an organized and strategic manner.

Goal of CRM

CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. With CRM, a business can:

provide better customer service
make call centers more efficient
cross sell products more effectively
simplify marketing and sales processes
discover new customers
increase customer revenues

For CRM to be truly effective an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. CRM has many potential benefits. It can help companies identify their best customers, enrich and individualize customer contact, manage marketing campaigns, reduce customer response times, and serve wide geographical regions. In addition, it can help to build long-term, profitable customer relations. CRM is important because it's cheaper and more efficient to retain existing customers.

Is Customer Relationship Management (CRM) right for small businesses?

CRM is not only right for small business but some do argue that small businesses do better CRM than large ones. Small businesses are more flexible and responsive to customers and have simpler IT infrastructures. CRM in large organizations involves massive software implementations which can be avoided in small firms. Significant enhancements to customer relationships are well within reach of small businesses.

Small businesses can implement CRM by:
Analyzing the customer data and acting on that data;
targeting marketing and other communications
providing enhanced after-sales support and service.

E-mail, web sites and simple databases can all help accomplish these three goals.

What causes CRM projects to fail?
There are several reasons for the failure. From initial, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support. There are many reasons a customer or client may leave:

They felt pricing was too high or unfair.
They had an unresolved complaint.
They took a competitors offer.

While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and retain their customer base ultimately fail. One of the key components in marketing and business growth is to spend the majority of time and effort nurturing customer relationships, so that you get business from existing clients and customers. This is a strategy that will move you forward in increasing your sales by 50% without increasing budget.

CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. According to industry view, CRM consists of:
Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team.

Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes.
Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits.



Sources –: http://searchcrm.techtarget.com/sDefinition/0,,sid11_gci213567,00.html
http://guide.darwinmag.com/technology/enterprise/crm/

Financing a Business

Managing the finances of a business is one of the most crucial challenges an owner needs to face. Sound financial decisions judge the difference between profit and loss, or can say success and failure.

There are several options for financing a business. Generally, banks and investors are unlikely to provide funding unless the company has a track record of sales. Money that finances business is called capital. Bank loans approved for day-to-day business operations have characteristics that make them different from those approved for equipment purchases (long term capital or capital assets). Before the company plans for financing, it needs to know how much capital the business needs that involve writing a business plan. Both knowledge and planning are required to manage it well.
The financial statements are critically important to the success of a business. Financial statements can be used as a roadmap on business journey to economic success. Most business owners don't realize that financial statements have a value that goes far beyond their use to prepare tax returns or loan applications.
Types of Financing:

Basically, there are two types of funding sources available to companies –

1) Equity (Ownership) – In this, business owners give up some ownership in exchange for funds. Most small businesses use limited equity financing. As with debt financing, additional equity often comes from non- professional investors such as friends, relatives, employees, customers, or industry colleagues. However, the most common source of professional equity funding comes from venture capitalists. Relinquishing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing.

2) Loans (Debt) - Many companies seek business loans, called debt financing, to launch or grow their business. There are many sources for debt financing such as banks, savings and loans, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. Traditionally, banks have been the major source of small business funding. Lenders commonly require the borrower's personal guarantee which ensures that the borrower has a sufficient personal interest at stake to give paramount attention to the business. For most borrowers this is a burden, but also a necessity. Loan (debt) financing option is the most common means of financing a small business.

Ways to Finance Small Business:

There are twelve common methods to finance a small business as follows:

1) Personal Savings

2) Credit Cards

3) Home Equity Loans

4) Friends and Family

5) Bank Loans

6) Lines of Credit

7) The Small Business Administration (SBA)

8) Vendor Financing

9) State Resources

10) Life Insurance

11) Retirement Plans

12) Grants


Sources : http://www.cbsc.org/osbw/session3/finance.cfm
http://www.sba.gov/starting_business/financing

5 Steps to Developing Tag Lines for Your Product, Business, or Website

A tag line is the one or two line descriptor that often comes after a product logo or company name. It is one of those things that looks simple but isn't. Large companies pay advertising agencies a lot of money to develop tag lines for their companies and brands.

Many companies, however, do not have a large enough budget to hire an advertising agency. If you belong to one of these small budget businesses, do not despair. With some creativity and persistence you can develop your own tag lines.

First, decide what you want to communicate with your tag line.

Second, prepare to brainstorm.

Third, brainstorm taglines.

Fourth, consolidate your list.

Fifth, choose the one best tag line

Source: http://www.websitemarketingplan.com

What are the most common mistakes made when writing a business plan?

There are many errors made by inexperienced business plan writers or business owners who fail to see why their plan was not accepted. But on the other side of the table, the following mistakes are common:

1. Ignoring the Competition: A business does not operate in a vacuum. There are direct and indirect competitors who will fight tooth and nail to retain their customer base and market share. All too often, the business team will state that their product and service is so great that there are no competitors. This inward attention on the business shows investors that the management is over-confident and may not foresee external factors that can impact the business.

2. Incredible Financial Projections: A growing company is what investors want to see and the growth patterns should be realistic and attainable.

3. One Billion Consumers: Claiming your market size as huge and customers as everybody will quickly lose all the credibility of your plan and business. Maybe in the future you can attack different market segments but for now focus on one or two niches you can effectively serve. By showing you deeply understand the clients in a narrow market and can serve their needs, you'll win over the confidence of your banker or investors.

4. Procrastination: Many business owners under estimate the time and effort required to build a successful business plan. Don't delay. If you need capital in six months, now is the time to put together a plan and raise the money.

5. The Big Deal: A business may have signed a big contact with a major company and over-emphasis of this deal can be perceived as a weakness. If 80% of your revenues are based on a one-company contract, your company could tank if the deal goes sour. Highlight that your company is adept at forging strategic partnerships or winning big contracts and this skill will be utilized to diversify the client base.

Source: http://sbinformation.about.com

5 steps to hitting your direct mail targets

E-mail and Internet marketing may be attracting buzz, but there are still strong incentives to send printed messages directly to customers whom you select. Direct mail gives you complete control over who sees your marketing, in contrast to advertising in print, online-mail, Web sites, or television.

For small businesses, where sales leads and customer contact information so often fall through the cracks, being able to market pinpointed prospects with postcards, flyers, catalogs, or personalized notes is a terrific opportunity. A well-crafted, road-tested direct mail package represents a cost-effective sales cycle all on its own, including advertising message, presentation, special offer, call to action and ultimately, deal closer.

If you take the time to do it right, direct marketing can generate gratifying and measurable results. Oddly enough, it's the latest electronic tools that are driving interest in commercial mail marketing. One consumer's throwaway is another prospect's prize, which puts value in the eye of your prospect. So the key to getting results from direct mail is a precisely targeted mailing list.

You need the right message in front of the right customers at the right time to get the buy-in. Many experts say that 40 percent of direct mail's success will depend on the list.

If you're a realtor, for example, think about a postcard campaign offering your services—and perhaps an invitation to a seminar about retirement communities—to home-owning parents whose youngest has just headed off to college. Or consider the effect of an insurance agency that specializes in business and property policies mailing personalized letters to companies that have just moved into new digs. That's the potential of electronic tools. Here are the steps to take that will reel in results.

1. Define Your Objectives
2. Test Your Return on Investment (ROI)
3. Polish the Offer
4. Reward Response
5. One Message Won't Do

Source: http://www.microsoft.com/smallbusiness/

8 Winning Tips to Make Your Financial Plan Profitable

A curious thing happens to entrepreneurs in the spring of every year. You wake up one day and realize you had better figure out how much money was made last year in order to pay your taxes. But wait, shouldn't a business owner already know how much money he or she made last year, last quarter, or last month? Don't wait. Develop your financial plan today.

If you don't keep track of how much money you're making, you have no idea whether your business is successful or not. You can't tell how well your marketing is working. You need to know what your net profit is. If you don't, there's no way you can know how to increase it.

To be successful in business, you need to make a financial plan and check it against the facts on a monthly basis, then take immediate action to correct any problems.

1. Create a Financial Plan: Estimate how much revenue you expect to bring in each month, and project what your expenses will be. If you need it, get help from business planning books, software, or an accountant.

2. Review the Plan Monthly: Even if time is taken to prepare a financial plan with profit and loss projections, it often sits in a desk drawer. It's not enough to have a plan -- you have to review it regularly.

3. Lost Profits Can't be Recovered: When comparing your projections to reality and finding earnings too low or expenses too high, the conclusion often is, "I'll make it up later." The problem is that you really can't make it up later; every month profits are too low is a month that is gone forever.

4. Make Adjustments Right Away: If revenues are lower than expected, increase efforts in sales and marketing or look for ways to increase your rates. If overhead costs are too high, find ways to cut back. There are other businesses like yours around. What is their secret for operating profitably?

5. Think Before you Spend: When considering any new business expense, including marketing and sales activities, evaluate the increased earnings you expect to bring in against its cost before you proceed to make a purchase. You can often increase your profitability simply by delaying expenses to a later month, quarter, or year.

6.Don't be Afraid to Hire: Retailers and restaurateurs wouldn't consider operating without employees, but many service businesses limit themselves by being understaffed. Almost any business can benefit from hired or contracted help. You can better use your talents for generating revenue than for running errands and filing.

7. Pay Yourself a Salary: If you are incorporated, you may already be doing this. If not, allocate an amount to owner's compensation on a monthly basis. Each month that your business meets its profitability goal, pay yourself the full amount. When you miss your target, dock your "pay" and when you exceed it, pay yourself a "bonus." Writing yourself a monthly paycheck will give you a strong incentive to keep your business profitable.

8. It's About Profit, Not Revenue: It doesn't matter how many thousands of dollars you are bringing in each month if your expenses are almost as high, or higher. Many high-revenue businesses have gone under for this very reason -- don't be one of them.

Source: http://sbinformation.about.com/cs/accounting/a/fplan.htm

CREDIT CARD FRAUDS

Credit Card Fraud is one of the biggest threats to business establishments today. However, to combat the fraud effectively, it is important to first understand the mechanisms of executing a fraud. Credit card fraudsters employ a large number of modus operandi to commit fraud. In simple terms, Credit Card Fraud is defined as:

“When an individual uses another individuals credit card for personal reasons while the owner of the card and the card issuer are not aware of the fact that the card is being used. Further, the individual using the card has no connection with the cardholder or issuer, and has no intention of either contacting the owner of the card or making repayments for the purchases made”.

Credit card frauds are committed in the following ways:

1. An act of criminal deception (mislead with intent) by use of unauthorized account and/or personal information
2. Illegal or unauthorized use of account for personal gain
3. Misrepresentation of account information to obtain goods and/or services.

Contrary to popular belief, merchants are far more at risk from credit card fraud than the ardholders. While consumers may face trouble trying to get a fraudulent charge reversed, merchants lose the cost of the product sold, pay chargeback fees, and fear from the risk of having their merchant account closed. Increasingly, the card not sent scenario, such as shopping on the internet poses a greater threat as the merchant the web site) is no longer protected with advantages of physical verification such as signature check, photo identification, etc. In fact, it is almost impossible to perform any of the ‘physical world’ checks necessary to detect who is at the other end of the transaction. This makes the internet extremely attractive to fraud perpetrators.

According to a recent survey, the rate at which internet fraud occurs is 12 to 15 times higher than ‘physical world’ fraud. However, recent technical developments are showing some promise to check fraud in the card not present scenario.

In such a scenario it is vary difficult to say who is at a greater risk the merchant or the customer and a recent survey also said that the fraud done for the year 2005 in credit card was around 500 pounds. If that is the size of this business then it is sending signals that this is a very alarming threat to the credit card business. And also that not only will the customers lose faith in the credit card business but rather it could be the merchant who could be losing faith in the as he is the one who is at the receiving end.

Application Frauds in Credit Card

This type of fraud occurs when a person falsifies an application to acquire a credit card.
Application fraud can be committed in three ways:
Assumed identity, where an individual illegally obtains personal information of
another individual and opens accounts in his or her name, using partially
legitimate information.
Financial fraud, where an individual provides false information about his or her financial status to acquire credit.
Not-received items (NRIs) also called postal intercepts occur when a card is stolen from the postal service before it reaches its owner’s destination.

LOST/ STOLEN CARDS A card is lost/stolen when a legitimate account holder receives a card and loses it or someone steals the card for criminal purposes. This type of fraud is in essence the easiest way for a fraudster to get hold of other individual's credit cards without investment in technology. It is also perhaps the hardest form of traditional credit card fraud to tackle.

ACCOUNT TAKEOVER This type of fraud occurs when a fraudster illegally obtains a valid customers’ personal information. The fraudster takes control of (takeover) a legitimate account by either providing the customers account number or the card number. The fraudster then contacts the card issuer, masquerading as the genuine cardholder, to ask that mail be redirected to a new address. The fraudster reports card lost and asks for a replacement to be sent.

FAKE AND COUNTERFEIT CARDS The creation of counterfeit cards, together with lost / stolen cards pose highest threat in credit card frauds. Fraudsters are constantly finding new and more innovative ways to create counterfeit cards. Some of the techniques used for creating false and counterfeit cards are listed below:

1. Erasing the magnetic strip: A fraudster can tamper an existing card that has been acquired illegally by erasing the metallic strip with a powerful electro-magnet. The fraudster then tampers with the details on the card so that they match the details of a valid card, which they may have attained, e.g., from a stolen till roll. When the
fraudster begins to use the card, the cashier will swipe the card through the terminal several times, before realizing that the metallic strip does not work. The cashier will then proceed to manually input the card details into the terminal. This form of fraud has high risk because the cashier will be looking at the card closely to read the numbers. Doctored cards are, as with many of the traditional methods of credit card fraud, becoming an outdated method of illicit accumulation of either funds or goods.

2. Creating a fake card: A fraudster can create a fake card from scratch using sophisticated machines. This is the most common type of fraud though fake cards require a lot of effort and skill to produce. Modern cards have many security features all designed to make it difficult for fraudsters to make good quality forgeries. Holograms have been introduced in almost all credit cards and are very difficult to forge effectively. Embossing holograms onto the card itself is another problem for card forgers.

3. Altering card details: A fraudster can alter cards by either re-embossing them — by applying heat and pressure to the information originally embossed on the card by a legitimate card manufacturer or by re-encoding them using computer software that encodes the magnetic stripe data on the card.

4. Skimming: Most cases of counterfeit fraud involve skimming, a process where genuine data on a card’s magnetic stripe is electronically copied onto another. Skimming is fast emerging as the most popular form of credit card fraud. Employees/cashiers of business establishments have been found to carry pocket skimming devices, a battery-operated electronic magnetic stripe reader, with which they swipe customer's cards to get hold of customer’s card details. The fraudster does this whilst the customer is waiting for the transaction to be validated through the card terminal. Skimming takes place unknown to the cardholder and is thus very difficult, if not impossible to trace. In other cases, the details obtained by skimming are used to carry out fraudulent card-not-present transactions by fraudsters. Often, the cardholder is unaware of the fraud until a statement arrives showing purchases they did not make.

5. White plastic: A white plastic is a card-size piece of plastic of any color that a fraudster creates and encodes with legitimate magnetic stripe data for illegal transactions. This card looks like a hotel room key but contains legitimate magnetic stripe data that fraudsters can use at POS terminals that do not require card validation or verification (for example, petrol pumps and ATMs).

FRAUD PREVENTION AND MANAGEMENT

With all the negative impacts of fraudulent credit card activities – financial and product losses, fines, loss of reputation, etc, and technological advancements in perpetrating fraud – it's easy for merchants to feel victimized and helpless. However, technological advancements in preventing fraud have started showing some promise to combat fraud. Merchants and Acquirers & Issuers are creating innovative solutions to bring down on fraudulent transactions and lower merchant chargeback rates. One of the main challenges with fraud prevention is the long time lag between the time a fraudulent transaction occurs and the time when it gets detected, i.e., the cardholder initiates a chargeback. Analysis shows that the average lag between the transaction date and the chargeback notification could be as high as 72 days. This means that, if no fraud prevention is in place, one or more fraudsters could easily generate significant damage to a business before the affected stakeholders even realize the problem.

Fraud Prevention Technologies: While fraudsters are using sophisticated methods to gain access to credit card information and perpetrate fraud, new technologies are available to help merchants to detect and prevent fraudulent transactions. Fraud detection technologies enable merchants and banks to perform highly automated and sophisticated screenings of incoming transactions and flagging suspicious transactions. While none of the tools and technologies presented here can by itself eliminate fraud, each technique provides incremental value in terms of detection ability. As it will be discussed later, the best practice implementations often utilize several of these fraud prevention techniques, if not all of the tools discussed here. The various fraud prevention techniques are discussed below:

MANUAL REVIEW: This method consists of reviewing every transaction manually for signs of fraudulent activity and involves a exceedingly high level of human intervention. This can prove to be very expensive, as well as time consuming. Moreover, manual review is unable to detect some of the more prevalent patterns of fraud, such as use of a single credit card multiple times on multiple locations (physical or web sites) in a short span.

ADDRESS VERIFICATION SYSTEM: This technique is applicable in card not present scenarios. Address Verification System (AVS) matches the first few digits of the street address and the ZIP code information given for delivering/billing the purchase to the corresponding information on record with the card issuers. A code representing the level of match between these addresses is returned to the merchant. AVS is not much useful in case of international transactions.

CARD VERIFICATION METHODS: The Card Verification Method3 (CVM) consists of a 3- or 4-digit numeric code printed on the card but is not embossed on the card and is not available in the magnetic stripe. The merchant can request the cardholder to provide this numeric code in case of card-notpresent transaction and submit it with authorization. The purpose of CVM is to ensure that the person submitting the transaction is in possession of the actual card, since the code cannot be copied from receipts or skimmed from magnetic stripe. Although CVM provides some protection for the merchant, it doesn’t protect them from transactions placed on physically stolen cards. Furthermore, fraudsters who have temporary possession of a card could, in principle, read and copy the CVM code.

NEGATIVE AND POSITIVE LISTS: A negative list is a database used to identify high-risk transactions based on specific data fields. An example of a negative list would be a file containing all the card numbers that have produced chargebacks in the past, used to avoid further fraud from repeat offenders. Similarly a merchant can build negative lists based on billing names, street addresses, emails and internet protocols (IPs) that have resulted in fraud or attempted fraud, effectively blocking any further attempts. A merchant/acquirer could create and maintain a list of high-risk countries and decide to review or restrict orders originating from those countries. Another popular example of negative list is the SAFE file distributed by MasterCard to merchants and member banks. This list contains card numbers, which could be potentially used by fraudsters, e.g., cards that have been reported as lost or stolen in the immediate recent past. Positive files are typically used to recognize trusted customers, perhaps by their card number or email address, and therefore bypass certain checks. Positive files represent an important tool to prevent unnecessary delays in processing valid orders.

PAYER AUTHENTICATION: Payer authentication is an emerging technology that promises to bring in a new level of security to business-to-consumer internet commerce. The first implementation of this type of service is the Verified by Visa (VbV) or Visa Payer Authentication Service (VPAS) program, launched worldwide by Visa in 2002. The program is based on a Personal Identification Number (PIN) associated with the card, similar to those used with ATM cards, and a secure direct authentication channel between the consumer and the issuing bank. The PIN is issued by the bank when the cardholder enrolls the card with the program and will be used exclusively to authorize online transactions. When registered cardholders check out at a participating merchant’s site, they will be prompted by their issuing bank to provide their password. Once the password is verified, the merchant may complete the transaction and send the verification information on to their acquirer.

LOCKOUT MECHANISMS: Automatic card number generators represent one of the new technological tools frequently utilized by fraudsters. These programs, easily downloadable from the Web, are able to generate thousands of ‘valid’ credit card numbers. The traits of frauds initiated by a card number generator are the following:
• Multiple transactions with similar card numbers (e.g. same Bank Identification Number (BIN))
• A large number of declines Acquiring banks/merchant sites can put in place prevention mechanisms specifically
designed to detect number generator attacks.

FRAUDULENT MERCHANTS: Both MasterCard and Visa publish a list of merchants who have been known for being involved in fraudulent transactions in the past. These lists (NMAS - from Visa and MATCH- from MasterCard) could provide useful information to acquirers right at the time of merchant recruitment preventing potential fraudulent transaction.

Impact of Fraud on Merchants

Merchants are the most affected party in a credit card fraud, particularly more in the card-not-present transactions, as they have to accept full liability for losses due to fraud. Whenever a legitimate cardholder disputes a credit card charge, the card-issuing bank will send a chargeback to the merchant (through the acquirer), reversing the credit for the transaction. In case, the merchant does not have any physical evidence (e.g. delivery signature) available to challenge the cardholder’s dispute, it is almost impossible to reverse the chargeback. Therefore, the merchant will have to completely absorb the cost of the fraudulent transaction. In fact, this cost consists of several components, which could add up to a significant amount. The cost of a fraudulent transaction consists of:

1. Cost of goods sold: Since it is unlikely that the merchandise will be recovered in a case of fraud, the merchant will have to write off the value of goods involved in a fraudulent transaction. The impact of this loss will be highest for low-margin merchants.

2. Shipping cost: More relevant in a card-not-present scenario. Since the shipping cost is usually bundled in the value of the order, the merchant will also need to absorb the cost of shipping for goods sold in a fraudulent transaction. Furthermore, fraudsters typically request high-priority shipping for their orders to enable rapid completion of the fraud, resulting in high shipping costs.

3. Card association fees: Visa and MasterCard have put in place fairly strict programs that penalize merchants generating excessive charge backs. Typically, if a merchant exceeds established chargeback rates for any three-month period (e.g. 1% of all transactions or 2.5% of the total dollar volume), the merchant could be penalized with a fee for every chargeback. In extreme cases, the merchant’s contract to accept cards could be terminated.

4. Merchant bank fees: In addition to the penalties charged by card associations, the merchant has to pay an additional processing fee to the acquiring bank for every chargeback.

5. Administrative cost: Every transaction that generates a chargeback requires significant administrative costs for the merchant. On average, each chargeback requires one to two hours to process. This is because processing a chargeback requires the merchant to receive and research the claim, contact the consumer, and respond to the acquiring bank or issuer with adequate documentation.

6. Loss of Reputation: Maintaining reputation and goodwill is very important for merchants as excessive chargebacks and fraud monitoring could both drive cardholders away from transacting business with a merchant.

Impact of Fraud on Banks (Issuer/Acquirer) : Based on the scheme rules defined by both MasterCard and Visa, it is sometimes possible that the Issuer/Acquirer bears the costs of fraud. Even in cases when the Issuer/Acquirer is not bearing the direct cost of the fraud, there are some indirect costs that will finally be borne by them. Like in the case of chargebacks issued to the merchant, there are administrative and manpower costs that the bank has to incur. The issuers and acquirers also have to make huge investments in preventing frauds by deploying sophisticated IT systems for detection of fraudulent transactions.

Package Deals Bring in the Money

Savvy salesmanship involves more than just writing up a sales slip when a customer is ready to buy. So take a look at your sales staff and train them in ways to double or triple sales by using the “add- on” technique.
Stay alert to chances for add-ons and your company could increase average sales by 25 percent or more.
Add-ons have always bee the modus operandi for auto dealers; As soon as the customer says, "I’ll take it," the salesman offers to throw in extra features like an extended warranty or deluxe wheels for a "bundled" price.
Or take a tip from the car wash that offers bare-bones service for $8 but thows in a wax and vacuum job for an extra $4.
Most customers choose the package deal, For them it's a better deal and for you, it's a more profitable sale -- and a better value.
If you operate a service station, for example, offer a discount package deal for an oil change and a tire rotation. Your overall profit margin percentage will be lower but your profits will pick up as more and more customers opt for the additional products and services.
Better yet, they’ll walk away knowing they got a great deal with plans to come back for more.

Source :

http://www.morebusiness.com/running_your_business/

Common Barriers in Business Planning

Omission: Business Plan is considered Top Secret by Top Management. It is shrouded in so much secrecy that many key employees don’t know what the game plan is for their own company. Middle managers, who must orchestrate the real work, don’t have a clear sense of priorities and front line customer-contact personnel are often clueless. The fear of the possibility that this vital information may fall into the hands of competitors overpowers the simple reality that “the troops” need to know the plan if they are to be effective.

Commission: the executive team is unable to have a meaningful conversation around the future of the company because they fundamentally lack a common shared vocabulary to do so. One sure sign of trouble is when the leadership team starts to use key strategic words and concepts, interchangeably. This leads to a misuse of such very different words as mission, vision, goals, objectives, strategy, tactics, etc. so that pretty soon no one really understands what is being said. These conversations inevitably go around in circles, with little resolution and lots of frustration.

Missing in Action Plan: “The Plan” in these companies is little more than an aggregation of numbers including departmental budgets, a P &L, and perhaps a Balance Sheet. Virtually no thought has been given to the strategies and tactical actions required to make the numbers. Management can’t realistically see where they are going because they haven’t charted the course.

The Everything but the Kitchen Sink Plan: At the other extreme are those companies (some mid-sized and most large companies) that produce voluminous Plans, often requiring 2, 3, or even 4 inch binders. As rigorous as these documents appear to be, they create a problem that is both ironic and insidious. The vast quantity of words obscures the view and actually clouds management’s understanding of the key business drivers that shape their ultimate success or failure.

The Annual Business Plan represents the single most important opportunity for the Executive Team to step up and take control over the future of their business. In many companies, this golden opportunity to provide true leadership is derailed by four common, but preventable problems. Top management in these companies must come to grips with the simple fact that they can’t expect to win out in the competitive marketplace if they are losing “strategic ground” inside their own conference room.


Source: http://www.morebusiness.com .

THE ABC's OF GETTING A SMALL BUSINESS LOAN

Predicting the future is obviously risky. But given the current volatility and uncertainty of the marketplace, it would be very safe to predict that financial institutions will be extremely thorough in reviewing your small business loan application.

Most financial institutions require three consecutive year-end tax returns, financial statements and interim reports. Occasionally, exceptions will be made for younger companies if they have a fair share of unencumbered assets and a quantifiable market.

You will also need the following documents:
1. balance sheet
2. profit and loss statement
3. accounts receivable and payable aging
4. debt schedule
5. management's discussion or analysis of operations
6. projections for the coming 12 months personal and business tax returns

Unused and available bank credit lines or other credit facilities are also factors in the loan approval process. They reveal whether there is a sufficient reserve to buffer minor cash flow problems. For example, a lender will question whether those resources are sufficient to address a seasonal need for extra funds.

Source: https://www.smallbizlending.com

How Marketing Creates Value

Marketing will determine your target market. The people who are most likely to want your product or service based on several criteria. Age, occupation, education, income, marital status to name just a few. Market Research will help you decide if there is truly a need for your product. Marketing will help you position your product in the minds of your target market. Using all the information from the above sources you can now create value and attach that value to your product or service.

Once you determine there is a need for your product you can begin to demonstrate that need to a target market that has that need but is not being filled by current products or services.
Marketing will show you that you have the right product, who the right customers are, where they are, and how to reach them with a message that will make them buy. Until marketing has determined all these things no advertising should take place.

Marketing matches the product to the right customers that have a need for it. This is the real value of marketing because, as I've said so many times, advertising must always be an investment, never an expense. It must produce more revenue than it costs.

Source: http://www.smalltownmarketing.com/value.html

How to Build Your Business with Gift Certificates

At one time or another we've all purchased gift certificates for someone. Although they don't have the mystique of hours of shopping for the right gift, they are convenient and are almost certainly a guaranteed sale for your store.

However, one of the questions I always ask in my seminars and workshops is... "What do you give the person who buys the gift certificate?"

The most common answer?... "The Gift Certificate."

Imagine that someone thinks enough of your store to actually recommend you to a friend who may become a life long customer. And they receive nothing for doing that for your business? I suggest you turn gift certificates into a "double sale."

How to make a double sale from a gift certificate? Give the person buying the gift certificate a discount on their next visit. Perhaps they and the recipient will return to the store and shop together.


Source: http://www.smalltownmarketing.com/gift.html