Recipe For Success

Solopreneurs and owners of small businesses can benefit from what can be called a basic recipe consisting of time-tested business practices that will put you on the path to building a profitable enterprise that will make you proud.

Business strategy

Every business needs a strategy and a business plan is a very helpful tool that supports you as you implement your strategy to develop and launch your venture.  A complex strategy or business plan aren’t necessary to achieve success.  A one-page business strategy and a five-page business plan may do the job, as long as both are well thought out and executed.

A good business strategy (and plan) defines and drives the activities and behaviors of the entire organization. Without it, the business becomes a rudderless ship, lost at sea.  A well-conceived business strategy and properly written business plan reflect and support the business model and always address marketing, operations, finance, staffing and customer service, at a minimum.

Business model

The business model is the plan for how your company will generate revenues and make a profit. The business model answers the questions “Who is the customer and what does that customer value?” As a result, your business model must also spell out the company’s value proposition and what differentiates your products and services from those of competitors.

The business model will keep company leaders focused on the core markets and measuring success as defined by the business strategy.  Here you’ll detail a step-by-step action plan to operate profitably within your marketplace.

Marketing

In order to develop a realistic and potentially effective marketing strategy, it is essential to thoroughly research the most likely target customers for the venture.  What problem or goal will be solved with your products or services—what is the customer motive for doing business with you? How much will potential customers pay to obtain the solutions that your venture will offer?

Finding out which competitive products target customers use to get their needs met is another essential marketing research function.  As well, you must learn the type of marketing and information gathering outreach that potential customers will find and respond to.  An effective marketing strategy addresses how you will:

  • Identify target customers
  • Identify the products or services now used  (competitive products)
  • Describe how you will promote your products and services to those customers
  • Explain the positioning strategy for products and services
  • Discuss the branding strategy
  • Describe the sales strategy
  • Address the pricing strategy
  • Identify advertising and social media marketing activities

Sales

The sales strategy that you adopt will depend on your target customers, your access to those customers and the competitive landscape.  You may be able to build referral arrangements and strategic alliances that allow you to generate enough sales to be profitable.  On the other hand, cold calling may be the most effective way to generate sales for your organization.  The preferred selling approach a company uses is defined in its marketing plan.

Operations

Predictable, practical and streamlined business operations processes are a must.  The customer experience is closely linked to what happens in the behind-the-scenes delivery systems of products and services.  Think of it this way—when you go to your favorite breakfast place to get a muffin and coffee, you expect to receive what you’ve ordered with a minimum of fuss. That is how you start your day because it’s convenient and it makes you feel good.  You, business owner and leader, must create a similar experience for your customers if you intend to retain them.  Smooth business operations also play a role in building good word-of-mouth for your business.  Fail to develop a good operations plan and things could blow up in your face as disappointed customers spread the word about your shortcomings.

Unfortunately, many businesses give short shrift to the operations section of their business plan.  The purpose of thinking through operations processes is to increase business productivity and reduce costs as you offer the same (or better) outcomes to each customer, time and again.  There may be some trial and error along the way, but most of all it takes thought and planning.

Successful businesses understand the need to continually improve business processes, to become more efficient and productive and even to respond to market changes faster, all the while providing excellent service to customers.

Technology

While technology is important, it needn’t be complex or costly to be effective.  Up-to-date technology products enable upgrades within any number of segments of your company: product manufacture, delivery of services, inventory management, payment systems, sales and distribution, marketing functions, quality control and customer service.

Finance

A realistic financial plan is the cornerstone of building a profitable enterprise.  Every business requires a financial roadmap and budget, along with the discipline to follow it.  You must anticipate and plan for business start-up or expansion costs,  projected sales and with a break-even analysis, project at what point in the future the business can be positioned to make a profit.

The financial plan ensures that the business owner understands the sources of business launch or expansion funding (will a bank loan or a partner be necessary?). A financial plan reminds owners where and how to spend money and it provides ways to measure progress, promote healthy cash-flow and warn of impending shortfalls.

Customer service

Smart business leaders treat customers well, because they are aware that there can be no business without customers who make purchases that create revenue and lead to profits. Integrate customer service into your business practices and review those practices frequently to ensure that they are having the intended effect of facilitating customer satisfaction, repeat business and referrals.

Thanks for reading,

Kim

Image: Fragment of mural located in the Templo Mayor Museum in Mexico City, where thousands of artifacts excavated from the ruins of Tenochtitlan, capital of the Aztec Empire (and now known as Mexico City) are displayed.

 

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The Art of the Sale: How Marketing, Branding and Advertising Help Revenues

Today, I respectfully offer you a tutorial. Our inquiry will focus on the essence of doing business: selling. The purpose of starting a business is to generate sales, produce revenues and earn a profit.  If a business cannot generate a certain threshold of sales, business expenses cannot be paid and the owner’s investment will be negatively impacted. To curtail mounting debts, the business must close.

Over the past 10 years or so I’ve noticed, sometimes with amusement and other times with dismay,  that the word selling seems to make people feel uncomfortable.  I noticed that frequently, aspiring business owners and Freelance solopreneurs, who must find customers and earn money that is derived from the exchange of money for the products or services that their ventures would produce and provide, avoided the word sell. Instead, the word market was substituted.

Many self-employed professionals are uncomfortable with the process of selling, so they’ve decided to banish the very word. It’s as if selling is now perceived as crass or pushy. That is a shame.  The sales profession is one of the oldest on earth and honorable. Selling is one of the foundations of civilization and selling skills are among the most useful anyone can have; it is the ultimate transferable skill.  Selling makes the world go round, because we wouldn’t have much of a world without it. The ability to sell is far more valuable than the ability to code (yes, really!).

So we can agree that the success of a business is dependent upon sales?  Now, let’s go back to the process of marketing.  The American Marketing Association defines marketing as:

The activities and processes for creating, communicating and delivering information about products and services that have value for customers. Marketing is a set of processes that are interconnected and interdependent with other business functions aimed at achieving the interest of (prospective) customers.

Marketing consists of using information, in words or pictures, to promote products and services and persuade potential customers to make purchases.  Customers have an array of motives that drive their purchases.  Marketing campaigns are designed to appeal to the motives of selected customer groups (e.g., parents, young professionals, adolescent males) that research has shown are potential customers for the product or service in question.  The purpose of marketing is to communicate with and appeal to targeted customer groups and persuade them that (your) products and services will satisfy one or more of their needs or desires.

So we can agree that generating sales is dependent upon marketing campaign promotion that is directed at the most promising customers for your products and services? I hope we can also agree that marketing and sales, while on the same continuum, are not one and the same.  Let’s move forward on the path and consider branding.

Branding campaigns are designed to enhance and expand marketing messages by differentiating and distinguishing the reputation of products and services available in the marketplace.  Products, services and individuals can, through an effective branding campaign, acquire a powerful reputation, recognition and loyalty among customers, fans and the general public.  That reputation is known as the brand.

A company logo is usually associated with products that have acquired sufficient popularity and sales to be considered a brand. That logo is instantly recognized and conveys the essence of the brand to its loyal fans, as well as those who may not use the product.  The product name itself will come to symbolize a powerful brand, as does Coca-Cola.

Now let’s take your marketing and branding messages to the public and that brings us to the next stop along the marketing continuum, advertising.  There are more ways to advertise than ever before, thanks to the digital age,  but do not underestimate the value of traditional methods.  The century-old medium that is radio remains a highly effective advertising tool, as do billboards.  Taxi cabs and city buses (and bus stops) announce local events, such as the circus coming to town.  Newspapers and magazines continue to be packed with eye-catching ads.

Content marketing, which many call the new advertising, continues to grow in influence.  It’s approach is indirect and it is presented as relevant information.  Content marketing is stealth advertising that uses primarily written information conveyed in blogs and newsletters to provide information about topics that would be of interest to prospective users of the products or services sold by the company.  The purpose of content marketing is to build an audience of regular readers who trust the source (you) and would feel confident enough to do business with you.

Then there are the social media platforms that are now in the mix. Regardless of the name social media marketing, when used for business purposes it is advertising: the Instagram photos of your wedding venue, the video clip of you accepting an award at the Rotary Club, the webinar posted to your website and LinkedIn profile.

If your marketing strategy and campaigns have been effective and enabled the development of a trustworthy brand and memorable advertising campaigns, your business will attract paying customers. Your business venture will generate sales and you can declare yourself a winner.  Let’s sum up our tutorial:

MARKETING:  How you envision and describe your company. The verbal, voice and visual messages used to promote your products or services. The business owner identifies the market positioning strategy for the company, based on populations predicted to  become customers: mid-market, luxury, or bargain, hipsters, seniors, adventure travelers.  Product positioning impacts all marketing campaigns and messages, the branding strategy and advertising choices.

BRAND:  The company reputation, what it is known for. How others perceive your company.

ADVERTISING:  How and where you portray and describe your company to the public: in print or digital, visual or audio formats placed in Popular Mechanics, Harper’s Bazaar, subway stations, flyers tucked onto car windshields, or Twitter.  Advertising usually costs money.

SALE:  The ultimate goal and final step of the marketing process.  The exchange of money (or another valuable item or service) for the purchase of a product or service.

Thanks for reading,

Kim

Photograph of Cher by Richard Avedon (1986)                                                                 Courtesy of the Ogden Museum of Southern Art in New Orleans, LA

Client Acquisition Tips

According to client acquisition coach and best-selling author Brian Hilliard (Networking Like A Pro [2017] with David Alexander and Ivan Misner), the most vital task for B2B service providers is to organize and articulate your company’s services in a way that makes it easy for prospective clients to understand what you do.  As the in-house marketing and sales expert, the Freelancer must create marketing messages and sales pitches that enable prospects to figure out how and when to work with you.

Yet the unfortunate tendency is for Freelancers to present their services as all things to all people, preventing prospects from getting a handle on what you can do for them (and I’ve done this, BTW).  Casting a wide net may seem like a winning strategy, but in reality it often results in a bewildered and frustrated prospect who doesn’t know how to use your expertise—so they don’t. It’s essential to help prospects see solutions in your services if you expect to make sales and build a client list.  Getting specific is the way to do it, Hilliard says:

  • Promote your services to prospects with the motive and money to do business
  • Define your services using terminology and selling points that the prospect will understand
  • Demonstrate that you can deliver requested services and ensure desired outcomes
  • Price at a level that clients accept and also generates a good profit for you

In your next prospect meeting, when you’re asked “Tell me more about what you do?” give an example of how you’d implement the basic option and the premium option of a service that fits with what s/he might need.  Since you will have become specific, you can expect that your prospect will then become comfortable enough to reveal specifics about his/her reason for speaking with you.  When you hear the details, you can then provide  more precisely tailored versions of your basic and premium options.

Next, although it will take both courage and discipline, stop talking and let the prospect ask questions or provide feedback on your proposed solutions. Expect to be asked if you’re able to further customize a solution and of course you’ll gladly do so.  Whatever you can do to add value will increase your chance of getting the sale.

Finally, there will be the price negotiation.  Ask for the amount of the project budget, to increase the chance that you’ll present an acceptable (verbal) estimate for your services.  If it seems to you that in order to provide the requested services your estimate might somewhat exceed the client’s budget, be willing to negotiate.  When you’ve shown the prospect that you can speak to and address what s/he needs, you’ll probably sign a contract and a new client will join your roster.

Thanks for reading,

Kim

Image: Isidor Kaufmann (1853-1921, Austro-Hungarian) A Business Secret, 1917      private collection

Exit Loyalty, Enter Relevance: The New 5 P’s of Marketing

Which quality best supports and encourages B2B buying decisions? In the 21st century, that quality is relevance.  According to a recent survey by Kantar Retail Consulting, whose North American division is based in Boston, MA, 71% of B2B and B2C customers feel that loyalty-incentive marketing promotional programs do not cause them to feel more loyal toward a company.  It has become evident that regardless of your industry, customers are doing business with you based on the perceived relevance of your products and services to their needs and priorities.  Attempting to buy loyalty with discounts, rebates, rewards, or swag bags is not as effective as it used to be.

A 2017 study by the global consulting firm Accenture found that U.S. businesses lose $1 Trillion a year in annual revenue to competitors because their (former) customers no longer consider them to be relevant.  The study results appear to indicate that to succeed, businesses must be perceived as fulfilling customers’ immediate needs as they occur. Personalization is helpful, but it is best applied in support of relevance.  The authors recommend that companies structure the customer experience  to deliver as does a butler or concierge.

So how do business leaders navigate the paradigm shift? Joshua Bellin, Robert Wollan and John Zeally of Accenture recommend that organization leaders move on from the former gold standard of marketing, the 4 Ps—Product, Place, Price, Promotion.  No disrespect to the 4 Ps, they served companies well for decades, but customer behavior and expectations have changed over the past 10 years or so.  The 4 Ps are unfortunately rather narrow and product-focused for our times.  Today, it’s about delivering customized solutions, especially for B2B customers.

Furthermore, a close reading of purchasing data indicates that the usual product-focused market segment labels, e.g., discount, luxury, or environmentally conscious consumers can no longer consistently predict purchasing choices.  The needs of all consumers, regardless of socioeconomic status and sociopolitical ideology, vary according to their immediate priorities and context.  In response, Zeally et al. suggest that companies expand their marketing guideposts to include these updated 5 Ps:

Purpose:           Customers feel that the company shares and advances their values.

Partnership:    Customers feel the company relates to them and works well with them.

Pride:                 Customers feel good about using the company’s products and  services.

Protection:        Doing business with the company makes customers feel confident.

Personalized:  Customers feel that their experiences with the company are always  tailored to their goals, priorities and needs.

The “what have you done for me lately?” mindset has replaced loyalty, to a large degree. Perhaps it’s a sign of the entitled and narcissistic culture in which we in the U.S. live.  Customer preferences are in constant flux. Short-term strategies and goals are often the norm.

Some companies are able to thrive in this environment, perhaps most notably the global retailer Zara, founded in Galicia, Spain. “Fast Fashion” is the guiding force.  In the 1980s, the company invested heavily in design, manufacturing and distribution systems capable of reacting to market trends very quickly.  As a result, Zara is on top of nearly every trend in women’s, children’s and men’s fashion and customers eat it up.  As of March 2018, there are 2,251 Zara boutiques in 96 countries.

Smaller companies and Freelancers cannot come close to being able to match the power of Zara, but it is possible to leverage relationships and personalization to encourage your current and prospective customers to share what is important to them and discuss how you can meet their needs today and in the future.  You probably already know that all too many of your customers will move on and do business with another company that seems to offer a better mousetrap without even discussing their needs with you first.  It is discouraging, I know.

The best defense is to be found in the 5 Ps.  Start with Personalization and move to Purpose, so that you can make it known that your company can advance the customer’s goals.  Segue next to Protection and use the trust that you develop to encourage prospects to feel confident about doing business with you.

Thanks for reading,

Kim

Photograph: Lurch (Ted Cassidy), the Addams family butler, in an episode of The Addams Family  (1964 – 1966, ABC-TV)

Machine Learning: Coming To A Freelancer Near You

Machine learning is a ground breaking technology that uses Artificial Intelligence to allow computer systems to automatically “learn” from the patterns of the user’s online browsing choices, without the need to program the system to do so.  Many of us became familiar with AI and machine learning through movie choices offered to us on Netflix or music on iHeartRadio.  Think also of the Digital Personal Assistants Siri and Amazon Alexa, other applications of AI and machine learning that many have embraced.  Machine learning focuses on developing computer programs that can access data, analyze that data (to find patterns) and then use that information to “learn.”

Machine learning and AI are slowly filtering down the food chain from global and national corporations to regional operations.  Start-up entrepreneurs are launching enterprises that employ machine learning and early adopter Freelance consultants will soon be able to incorporate machine learning beyond what we may already be doing with Siri and Netflix.  In particular, marketing is poised to become a primary utilization of the technology, in businesses of every size.

About a year or two ago, you noticed that when you visited a particular website and then returned to Facebook, LinkedIn, or your chosen online homepage, an ad from the site you visited would soon pop up and tempt you with an offer.  The phenomenon is called “real-time” by marketing specialists and it’s driven by the data that your browsing history generates via machine learning and AI.  It’s a manifestation of being responsive to a potential customers’ interests as a way to fill the sales funnel and facilitate a sale.

To take AI and machine learning a few steps closer to ordinary mortals on planet Earth, these tools are uniquely suited to B2B marketing, because they limit the (costly) trial-and-error activities that haunt every online or off-line marketing campaign.  Now, your marketing activities, whether presented in an online display ad, social media posts, or content marketing outreach, will be seen by those whose online searches indicate that they are likely to be interested in exploring your products and services.

Machine learning, augmented by AI, will allow marketing specialists to greatly reduce the wasteful expenditures inherent in every marketing budget and direct those valuable dollars toward self-qualified leads who have a much greater potential to become paying customers.  Your marketing campaigns cannot help but become more cost-effective whether online or offline, print ads in traditional publications, banner ads on individually targeted websites, social media posts, or email marketing.

Speaking of social media posts, machine learning allows marketing specialists to monitor trending topics on various platforms, i.e., topics that currently resonate with particular market segments.  Certain of those memes can become the basis of content for blogs, newsletters, email marketing and other promotional activities.

Finally, let’s circle back to what machine learning has been doing for Netflix and iHeartRadio, which in marketing speak is called demand forecasting.  When movie and music choices are offered to you, the goal is to give you what you want before you know you want it.  Current algorithms are doing a pretty good job of doing that now, but more sophisticated algorithms are in development, with predicting accuracy refined by machine learning and AI.  What is offered will still be a guess and just a suggestion, but for many of us, at least once in a while, we’ll receive an offer that we cannot refuse.

Thanks for reading,

Kim

display.png   Happy Valentine’s Day!

Photograph: Jean Jennings (l) and Frances Bilas programming ENIAC (Electronic Numerical Integrator and Computer), the first large-scale computer to run at electronic speed   Courtesy of the University of Pennsylvania (1946)

Finally Figuring Out Social Media

Consider, if you will, that you are using all of your company’s social media platforms like a naïve amateur, no matter how long you’ve been active on Facebook or how quickly you jumped onto Twitter and Instagram.  Chances are you do not have a realistic definition of social media marketing campaign success.  You cannot demonstrate meaningful ROI for the strategies you’ve employed.

The fact of the matter is, you are using the wrong measurements to document social media marketing campaign success.  You have been misled and you are confused.  Followers, shares, comments and likes are widely considered the gold standard social media metrics, but does that “engagement” correlate with or generate sales revenue and referrals? Let’s lift the curtain and sort this out.

It’s time to think about social media marketing in the way you do traditional marketing campaigns, including advertising and sales strategies, and apply the same expectations.  Social media campaigns are marketing campaigns, too, and not a stand-alone entity.  Please shift your social media marketing goals and objectives to what is tangible and measurable and bring real value to your customers and organization.  Various social media platforms can take a credible supporting role in the following marketing goals, for example:

  • Raising brand awareness
  • New product or service launch
  • Lead generation
  • Increasing sales
  • Special events promotion
  • Facilitating and/or improving customer service
  • Obtaining donations (not-for-profit sector)
  • Recruiting volunteers (not-for-profit sector)

Once you’ve identified your marketing goals, determine which platforms seem most suitable for your message and which will reach the selected target market groups.  Then, select the content—blog, tweeted updates, YouTube videos, Instagram photos, announcements on Facebook, for example—that will most effectively communicate your message and resonate with your target markets.

Be aware that unlike traditional marketing methods, which fly at 30,000 feet, social media outreach is an ongoing conversation and the best way to attract and retain visitors and followers who might convert into your customers and referrers is to get personal.  Use social media to speak directly to your audience.  Answer questions that will help to familiarize them with your products and services and understand their features, advantages and benefits.  Display visual images of your brand and what it stands for. Include audiovisuals that let influencers give testimonials.  Solve problems, deliver timely information.  Be a cool and helpful friend.

To help you schedule and manage the integration of multi-platform social media campaigns and ongoing outreach across various departments in a larger business organization, investigate Buffer and Hootesuite, or other social media management services.

Now, to measure the effectiveness of your campaigns.  On your own, you can record selected Key Performance Indicators that immediately precede your revised social media strategies.  In six months and then again in 12 months, revisit those KPIs.  Additionally, Google Analytics is a useful tool to sort through social media activity on all of your channels and report on engagement that leads to a sale processed on the company website, event registrations, signs-ups to receive your blog or newsletter, not-for-profit organization fundraising donations received and requests for additional product or service information, for example.

When you approach social media marketing campaigns correctly, you can receive lots of actionable information.  But in order to receive information that will make a difference in you company’s bottom line, you need to ask the right questions and apply the right metrics.

Thanks for reading,

Kim

Photograph: Teletype operator (circa 1941-1945) courtesy of the National Archives           Teletype technology allowed typed messages to be transmitted electronically from point to point to a single or multiple recipients, including sent and received messages. The teletypewriter evolved through many upgrades, starting in 1835 and it was adopted by the Federal Aviation Administration in 1938.  Essentially, teletype was early email.

Survey Results: How Freelancers Market Our Services (2016 – 2017)

Hello everyone and welcome to post-summertime reality.  We’re heading into the fourth quarter and whether or not you’re on track to meet your 2017 earnings goal, the time for a big push to help you end the year strong has arrived.  Marketing will play a big role in your revenue-generating strategy, but as was discussed in my August 15 post, do what you can to create a marketing budget so that your clever strategies and tactics will make it off the drawing board Your Marketing Plan Is Meaningless Until You Assign A Budget

In this post, I’ll share the results of what appears to be a credible survey of 1,700 Freelancers and small business owners that was conducted in December 2016 by FreshBooks, a Toronto company that sells cloud-based accounting solutions designed for Freelance professionals and small business owners  http://freshbooks.com.  Let’s look at what the folks at FreshBooks have to tell us about the practices, priorities and challenges of Freelance consultants and small business owners:

Who were the survey participants?

  • 65% male and 35% female
  • 51% Baby Boomers (age 50 + years);  34% Generation X (age 35 – 49 years);           15% Millennials (age < 35 years)
  • 65% have earned at least a Bachelor’s degree
  • 55% operate as Sole Proprietors, with no formal legal business structure
  • < 10 employees in the business
  • 15% in business < 2 years
  • 42% have no retirement account (median survey age was 50 years)
  • 23% earned < $20K in 2016
  • 23% earned $21K – $50K in 2016
  • 29% earned $51K – $100K in 2016
  • 24% earned $101K + in 2016

What kinds of marketing tactics are most often used?

Tactics considered most effective:

  • 67% ask for referrals, from clients or personal relationships
  • 47% have referral partners (e.g., at business association networking groups)
  • 39% speak and/or teach
  • 23 % use content marketing (especially blogs and newsletters)

Tactics considered somewhat effective:

  • 51% attend industry/ professional association events
  • 48% join business networking associations (e.g., chambers of commerce)
  • 44% entertain prospects (anything from coffee to drinks and dinner)
  • 44% use social media marketing
  • 24% use email marketing

Tactics considered least effective:

  • 32% purchase ads in print or online publications
  • 19% post on industry online forums (e.g., LinkedIn groups)

Age has a statistically significant impact on the types of marketing tactics employed and on the success rate of those tactics.  Baby Boomers have a much better success rate obtaining referrals, probably because they’ve lived long enough to develop those types of relationships.  Millennials have great success with content marketing and social media, no doubt because they grew up with the internet and they’re comfortable and adept with online communications.

Millennial Generation preferred marketing tactics:

  • 42% Content marketing
  • 30% Social media
  • 30% Referrals

Baby Boom Generation preferred marketing tactics:

  • 47% Referrals
  • 26% Content marketing
  • 22% Social media

Finally, marketing and sales are the mechanisms that promote market share and revenue growth and put the venture on the road to earning the desired profit margins that will secure its financial standing.  Yet, small business owners and Freelance consultants devote little time to business development (i.e., prospecting for new client acquisitions). which is supported by the right marketing strategies and tactics.  Most feel that signing new clients and retaining them is difficult:

  • 65% feel they need to find new clients
  • 85% consider business development a challenge
  • 75% devote less than one-quarter of their time to business development
  • 51% feel that they’re too busy with client work to prospect or sell
  • 40% devote one-tenth or less of their time to prospecting
  • 37% are uncomfortable selling
  • 25% feel they’ve found the right balance between making sales calls and performing client work

In order to build and sustain the business, it is necessary to attract and retain clients that you can reliably bill at a certain minimum amount; figure out how to describe and sell a value proposition that makes your services appear desirable to a critical mass of clients; performing client projects that you can price to ensure the desired profit margin; and effectively managing the business’ financial strategies.  As was discussed in my August 22 post, Only Those Who Have Money Can Borrow Money , the survey also examined the access to capital that Freelance consultants and small business owners have, or don’t have:

  • 20% used bank financing to launch their ventures
  • 25% were turned down for business
  • 52% feel that big banks are not designed to serve the needs of Freelancers or small business owners

Next week we’ll weave together the threads laid out here,  examine and analyze the picture that emerges and use some small data to help our respective business ventures get big ROI as we enter the fourth quarter.

Thanks for reading,

Kim

Japanese surfer works his plan to win gold at the 2020 Tokyo Olympics   Photograph: Kyodo News (2017)

 

 

 

Your Marketing Plan Is Meaningless Until You Assign A Budget

Oh, how you love to talk about planning—your business plan, financial plan, vacation plan and what I think is most often discussed—your marketing plan.  Congratulations to you if you’ve drawn up an official marketing plan for your venture.  But if you intend to transfer your plan from the page to reality, you must assign it a budget.  Somehow, that practical reality is sometimes glossed over.  Ask a Freelancer or business owner what the company’s annual marketing budget is and you’re likely to be met with a blank stare or incoherent stammering.  That is not the ideal response, my friend! So today, let’s learn how to estimate a reasonable budget for a B2B annual marketing plan.

Laurel Mintz, founder and CEO of Elevate My Brand, a Los Angeles digital marketing agency, has developed what she calls “marketing math,” to help her clients determine what would be  a realistic B2B marketing budget range for their organizations.  According to Ms. Mintz:

New companies in business for one to five years would be wise to allot 12 – 20 % of  gross or projected revenues on marketing activities.

Established companies in business for more than five years are advised to commit 6 – 12 % of gross or projected revenues to marketing activities.

Those figures seemed rather hefty, at least they did to me and maybe you agree.   According to Laurel Mintz,  if a new business generates just $35,000 in after-tax bottom line revenues, she nevertheless feels that the owner should devote $4,200 – $7,000 annually to a marketing budget.  Ouch! I mean, how does one pay the living expenses and taxes and health insurance when in the salad days of a start-up?

Think of it like this—no one said that self-employment, whether Freelance solopreneur or entrepreneur, was going to be either easy or inexpensive.  Just like you set aside money for other vital expenses, marketing deserves a budget, too, because without marketing you could wind up presiding over a stunted venture that never gains traction and never fulfills its potential.

Marketing activities, whether innovative or predictable, give the venture a needed push into target markets.  Marketing promotes the expansion of prospective clients who will flow into the sales funnel, distinguishes the organization from competitors, establishes and promotes the brand, justifies the pricing structure and keeps the enterprise at top of mind and positioned to beckon clients and referrers.

Now for the cold water—there are no guarantees in marketing and the ROI is notoriously tricky to quantify.  But realize that marketing is all about testing and that means (calculated) risk.  If you approve a certain sum of money to devote to the year’s marketing activities, you might achieve all of your marketing campaign goals, or do twice as well, or only half as well as you projected

Risk is real in marketing, but it’s mitigated by your awareness of how your clients have been known to respond to the marketing tactics that you can afford.  Research shows that if you conduct marketing  activities that resonate with your target clients and are within budget, then over time,  the marketing campaigns will enhance the bottom line and your brand.  Treat marketing activities as an investment that will surely pay off and allocate funds each year.

Marketing  campaigns are all about planning, budget and execution.  If meager finances make you feel that the budget formula given here is too risky for your venture, then focus on planning and execution and roll out “sweat equity” campaigns that utilize tactics that cost time instead of dollars, such as content marketing, face to face networking and social media.  Just do it.

Thanks for reading,

Kim

Director and actress Ida Lupino on the set of The Hitch-Hiker (1953)                    Photograph courtesy of RKO Pictures/ Photofest

 

Which Conference Will Be Worth It?

The Events Industry Council reports that there are more than 1.8 million conventions, meetings and trade shows held in the U.S. held every year.  Big hotel chains and convention centers make oodles of money providing the space.  Along with the venue special events sales staff, whose careers are built on selling space to sponsoring organizations, the waiters and bartenders, concierges and doormen, even the cab drivers, love to see the events roll in.

No doubt, each of those meetings brings a lot of value to the target audience.  The speakers can be top drawer and topics compelling, the venue fabulous and audience members fascinating, but if none of this leads to even a limited number of billable hours, then you will not have received what you paid for.  Writing it off on your taxes yields only about a 35% savings and you don’t receive it until many months after the fact.

Many industry and premier networking group conferences can cost $500 for a one-day event that along with the speakers includes continental breakfast, lunch and light refreshments at two breaks.  Oftentimes, the admission fees are calculated with the expectation that attendees will be high-ranking corporate execs who are able to expense the cost to their companies.  As a result, independently employed professionals regularly forgo a number of conferences that draw the decision-makers they need to meet because unless one has been to a given conference previously, there is no telling if the networking will be good and therefore worth the risk of paying a high ticket price.

If you decide to go the high-profile marketing route and become an exhibitor, your cost is likely to resemble a full-page 4-color ad in an industry magazine.  The exhibitor booth fee can be $3500, with additional costs for Wi-Fi and branded give-aways like tote bags, pens, umbrellas and the like and the custom table-cloth you must order to display your company name and logo.  If you will stay overnight, add hotel bills that will include a discount but can nevertheless exceed $200 daily and the cost to park can be $40 per 24 hours.  Figuring out the attendance profile of a conference is paramount, so that you can calculate your ROI.

First, think about your business products and services and your ideal clients and start filtering out what doesn’t align with your objectives.  If your business is B2B, you’ll look for an audience of business people who give you either product sales or billable hours.  If you’re a start-up looking for investors, then you’ll look to attend programs that draw venture capital specialists.  You don’t need to attend the largest conferences, just those that put you in front of those people who have the motive to do business with you.

Further, if you are investing in an exhibitor booth, check the conference schedule and look for down time between speakers that will encourage attendees to visit the exhibitor area and get to know who is there.  If time has not been scheduled, you could find out that you’ve paid dearly to look at the other exhibitors and not interact with the target audience you hoped to meet.

But whether you will attend to make a marketing splash, find an investor, or recruit a good client or two through networking, you never know until you get there because every conference has its own personality.  At some events, the people talk and at others I’m sorry to say, they don’t.  Before you jump in and commit big money as an exhibitor, attend as a civilian and test the waters.  If the conference is two or more days, attend one day and be sure to attend the day that has a scheduled networking dinner or reception.

Now, may I share good news with you? My eighth anniversary as your faithful diarist, the author of “Freelance: The Consultant’s Diary,” occurred in June. I’ve earned the special citation from WordPress that you see here.  Heartfelt thanks to those of you who read!

Thank you for your support,

Kim

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Business Forecasting Helps You Make Money

Summer 2017 will officially arrive on June 21 and the warm temperatures promise to seduce us with sunshine and flowers. Summer is the primary vacation season and many businesses slow down with its arrival , with the exception of tourist industry service providers and wedding planners and their usual sub-contractors: caterers, florists, photographers, DJs and videographers, many of whom are Freelancers.  The rest of us, however, have to get creative and try to maintain our discipline and resolve as the heat and humidity conspire against ambition.  This lovely time of year can present a real financial challenge for Freelancers.  How can we remain productive and scare up some billable hours? Summer is the ideal time to devote attention to positioning  your venture to make money in the fourth quarter and beyond.

I suggest that you conduct business forecasting at your organization this summer. Business forecasting is the cornerstone of business planning and business planning is the foundation of enabling business profitability.  Forecasting helps business owners and Freelancers to objectively examine the monetary value of each revenue stream that the venture generates, so that it becomes very clear which lines of business are making money and the amount of profitability of each line.  Forecasting shows you where you should devote your resources and in that way generate increased billable hours, revenues and profits.

Forecasting in your Freelance venture is crucial: client work, teaching assignments, writing assignments, subcontracting work for other Freelancers and maybe even an under-the-radar odd job along the way to fatten the coffers are among the business activities in which we engage to maintain cash-flow.  It’s very useful to know which of these lines of business is worth more attention and those that you may want to drop, since the returns are meager.

Let’s face reality—we B2B Freelance service providers often don’t know when our next client will come along, or what s/he will want to spend on services when that happens.  It’s so easy to wind up scrambling from new client to new client without getting much repeat business, or adequate control over our earning capacity. That’s why it’s vital that we:

  1. Identify where the earning potential really is (and it might not be client work)
  2. Create strategies and action plans that promote successful participation in those of your business activities that are the most profitable

There are thousands of Freelancers who make their real money not from client work, which can be both scarce and erratic, but on other related business lines.  For hiilucky Freelancers who have national renown, that could be book sales, paid speaking engagements and paid writing assignments.  For others, it’s their coaching business that is the real profit engine.  In such cases, the client work is necessary to lend credibility and enable access to the other, much more profitable, activities.

So how does one conduct business forecasting? If you use Intuit QuickBooks software, you can build a model on that system.  If you have at least three or four years’ of client data in QuickBooks, you will receive much valuable, actionable information about your business, including:

  • Profitability and profit margins
  • Average revenue /client
  • Average billable hours /client

If you keep your financial data on Excel, review the past five years’ of invoices (or as far back as possible in a newer venture) and identify your top five or ten most lucrative revenue streams, whether that is client work or other related projects.  Invoice dates will reveal seasonal revenue generating patterns and the invoices will remind you of which of your services sells the most and which the least.  Billable hours and hourly or project fee rates should also be noted. It will take longer to generate the data, but as with QuickBooks, much valuable and actionable data can be extracted from your Excel based financials.

There are two basic methods of business forecasting, Qualitative and Quantitative. Qualitative forecasting models are based on market research and they’re most effective in predicting short-term cycles. Quantitative forecasting models are based on data and the approach is more effective than the qualitative model in predicting long-term cycles.

There are various types of quantitative forecasting approaches and for small and medium size business forecasting, the Time Series Method is most useful.  The Time Series Method uses historical financial data to predict future results.  When you go to your bank for a business loan and five years’ of your financials are requested, the loan officer is using the Time Series Method to predict whether you will be able to generate enough cash-flow and sales revenues to repay the loan on time.

Once you have your financials in hand, Step 2 of Business Forecasting is the development of a marketing plan that contains strategies and action plans that create the road map that your organization will follow as you seek to expand those business lines that generate the most revenues for you and consider dropping those that perform poorly.

When you see with irrefutable data that reveals which of your services brings home the most money, you will likely get a clearer picture of your ideal clients and the messages and marketing platforms that resonate with them.  An amended pricing strategy and/or sales distribution method may be instituted, as might tweaking of your business model.

Business forecasting reveals patterns in client activity that are often overlooked and the process allows you to anticipate demand for your services, reveals which services historically have produced the greatest sales revenues, reveals the types of clients that spend the most with you and in general, shows on what side the toast is buttered.

With objective confirmation of your best client categories and most popular services, you can concentrate on how to access those clients, including bigger budget clients within the categories and you’ll know how best to sell to them.  You will work not only hard, but also smart, to grow your client list and increase billable hours, revenues and profits and that will be the best use of your time during this glorious summer.

Thanks for reading,

Kim