￼ The Top Questions Small Business Owners Are Asking
You might be curious about what kinds of questions are business owners asking. I bet you are more curious about the answers that will help your small business. I am guessing that if you are like of the business owners I mentor you want to make more money, Yes?
Above all, I am here to help you
First, here are the top questions we have received over the past months from business owners just like you. They are in no special order.
- What are some good practices for food businesses, including restaurants and grocery stores?
- How do you find local small businesses?
- Starting a business after college?
- What are the most important political issues for small business owners?
- Did your favorite small business close?
- What is possible in your local small business?
- Which local small businesses do you visit regularly?
- Do I need help with my tax returns?
In this article, I will address local small business owners and their needs and will also provide relevant information for all small business owners. Business ownership can be easier.
Let’s dive in!
Local Small Business Owners
Hindsight is always 2020. Odd to say when the year IS 2020! Yet, we are in an interesting time as business owners.
In addition, there is so much we don’t comprehend. We are questioning how to move forward. Those who own a local small business are faced with many issues. As a local business, I am guessing you have most likely lost revenue. Am I right? And I believe you are worried about what the permanent changes from the Corona Virus will be. Accurate?
I understand that the top concern of every local small business right now is how to develop and maintain their business successfully.
I will share what I’ve been consulting local small business to do. These ideas can be put to use immediately by you and can make a big difference for your business.
As a local business, I suggest you first:
Hire A Business Coach/Consultant
Being en entrepreneur can be lonely. In these pandemic times creating income is a serious issue. If you have never had to pivot your business or relaunch your business you might not have proven strategies. This isn’t the time to play a guessing game. There is no time to hope your ideas will work. You must quickly rebuild your local business. A business coach/consultant will have strategies and tools that are proven to work.
They will listen to you. Therefore you can also share your personal frustrations and issues with your coach/consultant. Get the clarity a coach/consultant brings. They will have an understanding of your issues. Coaching/consulting is vital for your success.
Similarly, one of my client family members said, “I am grateful to talk about my issues and fears.” Another client said, ” I am more grateful that I get to see opportunities which I might have missed”. My advice? Don’t go it alone. In conclusion, Now more than ever you need someone in your corner. A good business coach/consultant will serve as your voice of reason. They will pull back the curtain. Let them give you proven steps you need to move your business forward.
Steven Covey said to begin with the end in mind. Most local businesses I have mentored have done this backward. They have begun by setting goals and then figuring out how to manage their time. This is a big mistake. First I recommend you learn to generate more leads. Then you work on closing more sales. Next, you increase the number of sales. You will then move into increasing prices, exploding profits and finally, we will go to setting goals and managing time. I know your big goal is to get more sales by credit card or gift card or check or cash. Wait one minute.
Let me explain…
Once you map out the areas I mentioned you can formulate goals. After you create a roadmap you can plan adequate time for implementation and completion.
Go back to the 80/20 rule. 20% of what you do as a local business owner each day generates 80% of your revenue. Put it this way – small incremental changes produce major results.
Minimize Your Overhead
Can you reduce your lease? Can you get a lower cost internet and phone provider? What services do you currently pay for that you might not need? Ask for discounts. Renegotiate deals and most of all innovate. Marketing and innovation make money. Instead of putting your major focus on sales, you need to look at cash going out the door. When you lower your overhead you can make fewer sales and still thrive.
Small Business Owners
There are five areas you will want to focus on that can double your revenue. We will briefly look at all five.
It goes without saying, you, just like the local business owner, also should hire a business coach/consultant to transform your business fast.
I have consulted with small businesses for years and a 50% increase in these four areas is child’s play.
Here we go!
Generating More Leads
What types of marketing are you using right now for your business? What do you plan to use? Want to know the secret of marketing? I bet you do!
The secret is…
There is a hidden formula that enables you to literally dominate your profession and niche. Your marketing must enter the conversation taking place in the head of your prospects.
That conversation revolves around 2 things:
- there’s a problem the prospect has and doesn’t want
- there is a result the prospect wants but doesn’t have
There’s a hidden formula that will enable you to create marketing so powerful, your prospects will come to the conclusion that they would be an absolute idiot to buy from anyone else but you.
This formula will allow you to out-market and out-sell all of your competition.
Here it is:
Interrupt – Engage – Educate – Offer
The interrupt is your marketing’s headline and it must address the problem your prospects have that they don’t want.
Engage is your marketing subheadline and it must promise the result the prospects want but don’t have.
Educate focuses on what it is you do that makes you unique.
Something your competition doesn’t offer that you do. Something of tremendous value to your prospects.
For example, I have helped small business clients create these offers:
A dentist offers dental insurance to patient’s who don’t have it
A child care facility guarantees your preschooler will be reading at a first-grade level before entering kindergarten
A real estate broker guarantees to sell your home within 29 days or they sell it for free
The offer is something so compelling and valuable to your prospects that it’s irresistible.
Closing More Sales
What is your current or past sales conversion process? How do you get the prospect to hand their money to you? Do they easily give you their credit cards? Why don’t prospects end up buying from you? Would you like to convert 30%-50% of those non-buying prospects into sales?
You must use a down-sell strategy. Use this when a prospect declines your product or service offering. Offer them an alternative at a lower price. The goal is to turn the prospect into a client so you realize some short time financial benefit. At the same time, you gain the opportunity to do business with them again in the future.
Let’s look at an example from one of my client family members:
A florist sells a dozen roses for $50. Just one $25 alternative down-sell would net an additional $8,000 annually.
I helped this florist create down-sells for floral alternatives for weddings, lower-priced options for funerals, and more.What Can You Down-Sell?
Would you like to increase your sales by 30% or more? Then you also want to up-sell.
Then you want to offer a higher grade or quality or size of the item that the customer is interested in. Do this at the point when the customer is ready to buy.
Think McDonald’s. “Would you like your meal supersized?”
Cross-selling is where you offer other products or services which complement the item the customer is interested in. This is done when they are ready to buy.
Using McDonald’s again, “Do you want fries with that?”.
34% of prospects will buy additional products or services at the time of their original purchase if they are asked to do so.
Here Is Another Client Example For You
An auto service center added an annual program with my help.
Oil changes used to cost $30 to $40. Now they offer them for $10 to $15. They discovered the secret to increasing sales was to get in front of more prospects. This lets them up-sell and cross-sell more often. By the way, upsells and cross-sells are where you will make the most profit.
By performing the oil change at their cost, they attract five times the average number of customers. 34% of their customers agree to additional, higher-priced services.
Would you like to charge more for what you sell?
First and foremost, stop discounting!
Did you know if some businesses discount their price by a mere 10% they now have to sell 50% more just to break even?
For example, if you sell a widget for $100 and you have a 30% profit margin, you make $30 for every widget you sell.
That means your cost basis for that widget is $70.
If you discount that widget 10% and sell it for $90 instead of $100, your cost basis is still $70.
Now you’re only making $20 in profit instead of $30.
For this business to make $1,000 in profit selling their widgets at $100 each, they would need to sell 33.3 widgets ($30 x 33.3 widgets = $1,000).
They have to sell 50% more widgets to get back to their original profit margin.
But when was the last time you saw a business offer a measly 10% discount?
Most of the time they offer 20% to 40% discounts. Then they scratch their heads wondering why they are going broke.
The secret to higher prices is to increase the value you offer.
The biggest mistake business owners make is thinking that prospects only shop price.
In reality, most of them do shop for price. They only shop price because the business owners give them no other option.
When everyone sells the exact same thing, what’s the only differentiating factor? Price!
Think About This…
You walk into a grocery store and there are 2 tables loaded with red delicious apples. The apples on both tables are identical. One table is $.50 per apple. The other $1.00. Which apple would you buy?
Now suppose the apples priced at $1.00 had a sign that said they were organically grown.
You have just introduced a new value proposition that justifies paying the higher price.
Create more value in what you offer and you can easily increase your pricing.
I suggest you consider bundling and grouping together certain products to create packages that are then sold to clients.
Now you have an “apples to oranges” comparison and have removed price from the equation.
Let me share another client family member example with you.
One Of My Clients Is A Home Builder …
He typically contracts with certain suppliers that offer him huge volume discounts, especially for electronics.
I had him work out a deal where he agreed to buy multiple packages of a whole-house entertainment and security system including a :
- 50 inch HDTV
- complete high-quality surround sound system
- a complete home security system including surveillance cameras at all home entry points
- complete fire protection and monitoring system
The retail price for this package was $22,800 installed. But the builder acquired them in volume for around $6,500 since installation would not be part of their costs.
Since the builder already has the home stripped to the studs, installation can be handled during the actual project by their crew for pennies on the dollar.
Now imagine this builder competing with other builders in a moderately priced neighborhood.
All the builders offered homes in the $150,000 price range.
My client offered their homes for $156,500 which included the additional $6,500 out of pocket expense he had. And his homes come standard with a $22,800 home entertainment and full security system for free!
Which builder would you buy from?
In fact, what if this builder offered that new home for $160,000? Would that additional $3,500 prevent anyone from buying this home?
And does it still look like a much better deal than the $150,000 home without the system?
If the additional $3,500 increase did make a difference due to loan qualification standards for certain prospects, the builder always has the option of reducing the price back to $156,500.
He could even maintain his original price of $150,000 and lower his profit margin on each home sold.
This would allow him to potentially double his normal sales volume and practically double his overall profits every year.
After all, he is still making around a 30% profit at $150,000.
Are you starting to see the potential here?
Can you create new products or services using this strategy?
Would you like to increase your total revenue by 10%?
There are 2 major ways to increase your overall profitability. Increase revenue or decrease your cost of doing business.
Let’s focus on increasing your revenue. That one is really easy!
Simply raise your prices.
When was the last time you raised your prices by at least 10%?
Most businesses believe that any price increase, no matter how small, will lead to a mass exodus of all their customers.
So, Let’s Determine The Financial Impact To Put This
Strategy Into Context
Let’s say you sell a widget for $100 and decide to increase that price 10% to $110.
Will that small increase really lead to a loss of customers?
A few may leave, but they are most likely your biggest price shoppers that show no loyalty or patronage to your business.
But even though there may be some customer attrition … to what extent?
The business is now making an additional $10. All of which is profit.
That’s a 33% profit increase.
For this business to make $1,000 in profit selling their widgets at $100 each, they would need to sell 33.3 widgets.
But by increasing their price 10% they only need to sell 21 widgets.
That means that just to break even, this business would have to lose 25% of its customers over a measly 10% price increase.
This isn’t going to happen.
Of course, we err on the side of caution and test the increase on a small scale to gauge the reaction.
There simply is no faster or easier way to generate additional revenue.
Raise your prices tomorrow!
Setting Goals/Managing Time
Now that we’ve completed the other areas we are ready to talk about setting goals and managing time.
Over the next few days write down the goals you have for your business.
Start with where you are right now. Use each area I talked about in this article. Then write down where you want to be in 5 years. Also, put down what is stopping you from accomplishing each goal.
Of course, be sure your goals are SMART – specific, measurable, attainable, relevant, and timely.
As you review the areas discussed in this article see where they fit in your goals and objectives for your business.
This will enable you to create a realistic roadmap for you to follow over the next several months and years.
As you develop and standardize the steps within your roadmap, you will create a successful business model.
I challenge you to implement these strategies. I invite you to discuss them in the comments as you apply them to your business.
I’d like to have my team meet with you for just 45 minutes and help you implement the strategies.
Would you like to actually monetize these strategies in your specific business?
Will you be my next featured case study?
You can get this consult to overcome your biggest business challenge as we create your blueprint and profit acceleration plan!