Casual Articles - Business

You're Killing Your Own Business
There is one thing that will absolutely kill the growth of most businesses at one point or another. Although it is intended to make sure that you are properly prepared for the journey ahead, it often stunts the growth of your business.The funny thing about this is that every business class I've ever taken during my coursework absolutely glorifies the importance of this one factor. The factor that I am speaking of is "planning". Although, a theoretically sound plan is helpful in attaining your business goals, it's frequently a stumbling block for growth. Why? You ask.... THE EXPLANATIONWell,it's simple. Often times business owners and entrepreneurs will spend the majority of their time preparing and not enough of time actually implementing. We usually use planning time as a cover for procrastination, which we all know will cause failure.If a cook spends most of his time planning the meal and not much time cooking, there would be a disaster on every plate (not to mention a plethora of food borne illnesses:)). This is the disaster that a lot of entrepreneurs create within their businesses.We often over analyze, over plan, overreact, over...you get the point. We, as entrepreneurs, have to learn to K.i.s.s.(Keep It Super Simple) our business. This way you will not waste countless hours planning to avoid some imaginary disaster; or perfecting a secondary function while neglecting a primary one.WHAT YOU SHOULD BE DOINGSpend your time producing the basic functions of your business. These are the functions that are essential for growth. If you are a blogger...write posts. You can work on templates later. If you are a speaker...better your speech. Don't waste time becoming familiar with the audio system.If you concentrate on your pr

ment of a joint partnership throughout both organizations.

2: Consignment is Just Another Program/Project
Because consignment is a total organizational philosophy on both the customer’s part and the supplier’s part, implementation extends beyond the purchasing department. Consignment requires organization, education and training, especially with front line supervision and labor on the shop floor.

3: Consignment is Easy and Can be Implemented Quickly
Consignment is not easy although consignment customers may think so. However, you can make it easy because of your years of experience, expertise and support from your IT department. Consignment requires organizational change and, in some cases, physical plant changes. Cultural transition barriers can extend the process. Sustaining the continuous improvement philosophy of consignment is critically dependent on organizational transition.

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Financial stability. Since consignment involves the physical transfer of inventory to your customer’s location before he has paid, you should be sure that he will remain solvent throughout the program. Financial reports are the preferred method of validating stability.

• Minimum level of revenue desired. This needs to b

Management Foibles...When 20 Bucks and Ego Is More Important than a Decade of Customer Loyalty
Trust me, management has their foibles! When is it that 20 bucks and a store manager’s ego become more important than a decade of loyalty from a customer? In my opinion, Never! Little things can be much more costly to your profitability than one might imagine.I recently had an experience that clearly demonstrated the crucial need for better training at all levels, from entry-level employees to management. This situation occurred at a local tire store, one that is part of a national chain—of which will go unnamed—but claims in their name to be pros with tires. The store manager made the decision that $20 in his cost on labor, and his need to be right was more important to him than a loyal 10-year customer.Let’s Review the Benefit of from 10 Years of Customer Loyalty:>New tires (sets of four) on 3 cars—approximately 8 sets at an average of $300 per set equals a minimum of $2,400 in retail sales.>Satisfied customer recommendations to friends and business acquaintances—in this particular case the bare minimum is referral benefit is a fleet of 18 cars and trucks that moved their account to this particular store five years ago based on my recommendation. This referral has resulted in approximately 9 sets of car and truck tires purchased yearly by the company. At an average of $400 (truck & SUV tires are more expensive), the yearly sale to this company is $3,600.>The bare bones minimum value this store received from one customer’s loyalty and referrals for 10-years is $20,400.Let’s Review What the Store Will Most Assuredly Lose in the Coming Decade from the Manager’s Seemingly Inconsequential $20 Decision:>Within the next 2 months, the store will lose the sales on sets of tires for both a minivan and an SUV equaling a minimum of $700.>Over the coming decade the store will also lose, not accounting for inflation, at the very least the same $2,400 from my 3 cars, and most likely more.>After telling the above-ment

Once upon a time

Once upon a time, many years ago there was a young, ambitious salesman selling flat rolled steel. This energetic young man called on one potentially large account for months and months with zero success. He was going nowhere fast. The only thing he got from the rather large, burly looking professional purchasing agent was frustration. The purchasing agent knew the young salesman was short on experience. The young salesman felt that the purchasing agent actually enjoyed watching him squirm month after month. This young salesman, being enthusiastic and energetic, tried every sales technique he had ever learned. Of course, the scruffy old purchasing agent was familiar with every one of them and had seen them many times before. Nothing seemed to work on this guy. The young man just couldn’t reach him. So, he went back to something very basic that most of us in sales (especially we Baby Boomers) learned from day one. The young salesman reflected on the words spoken by his most cherished mentor, “Build a relationship son. Get the man to like you and he’ll tell you how to do business with him.”

Expectations

Well, the young man tried and tried, but even that didn’t seem to work. He was ready to give up. He was tired of repeatedly hearing that same pathetic purchasing agent’s theme song, “I’m happy with my current suppliers.”

The young salesman was not smart enough, did not have enough scar tissue and was not confident enough to reply, “Maybe that’s because you have set your expectations way too low.” Instead he resorted to his secret weapon, his rarely used prideful technique that only came out when all else failed – He begged. “Mr. Customer, is there anything I can do, anything at all that will convince you to give me a chance to do business with you?”

Have you ever been in the midst of a sales presentation and feel a knockout punch land on your chin? Well, that’s how the reply felt to the young salesman. “Look, we have a partnership with our current supplier. The only way you could ever do business with me is if you gave me our steel for free,” the purchasing agent barked. The young salesman was devastated; He saw the thrill of victory vanish before his eyes, as he tasted the agony of final defeat. He walked away from that call with his tail between his legs. The young salesman was down and depressed. He was in one of those typical valleys anybody who is or has ever been in sales recognizes. The best way to pull ourselves out is to make a buddy call – a call on one of our best customers, based not on revenue but on friendship; one of those frequent calls we make and get criticized for making because the sales volume doesn’t justify the number of times we visit.

“He was a friend,” the young salesman thought. So he told him the story. His friend and customer was sympathetic, understanding and even though he didn’t offer any advice, the young salesman recaptured his spirit. That night as he sat on his front porch reflecting on the day, he thought, “Why not? Why not give him our product for free?” Full of excitement, the next morning he went directly to his boss, the owner of the small privately held company. He convinced the owner of the integrity of his new plan.

A concept was born

The concept of consignment in steel distribution was born. That happened in the mid 1980’s. Consignment was already being used in the fastener industry but I do not recall anybody in the steel distribution industry using it. But, as we, the young salesman and me, his boss, found out, the concept of consignment can work in any industry. It was a tough sell, not so much to the customer, but to me as his boss. But, we did it and it was successful. The prospect this young salesman almost walked away from became our largest account, purchasing over $4 million by the end of the second year. It became a learning experience for both of us and we both profited from it. And the large burly looking purchasing agent actually did become one of the young salesman’s closest friends.

Consignment can become a very effective marketing tool if it is used correctly. The emphasis is on using it correctly. A consignment partnership should not be considered without establishing specific criteria for selecting appropriate accounts up front. This is extremely important to you, the supplier. We call this selection criteria the “Rules of Engagement.”

In contrast to the normal Rules of Engagement in selling, consignment Rules of Engagement are predetermined by the supplier, not the customer. Of course, the rules can be modified with proper approval to fit different situations. However, a consignment partnership must be a win-win relationship in order to be successful.

Rules of Engagement

The specific criteria that need to be determined before a consignment partnership is offered include:

• What is the minimum annual sales volume you are willing to accept?

• What are the minimum annual gross margin dollars you are willing to accept?

• Are financial statements available for your review?

• Is the customer financially secure?

• How much risk/investment are you willing to accept in off-site customer inventory?

Answers to these preliminary questions need to be established in addition to others that may pertain to your product and industry.

An Assessment of the Consignment Partnership

Even today in many industries, consignment is on the leading edge of custom designed cost reduction programs. Initiatives focus on total cost, not price, in order to move to the next level of partnering, surpassing expensive JIT programs that have high administrative costs and service risks. The major objective of a consignment partnership is to reduce costs by eliminating inventory and duplicate effort, as well as reducing shrinkage and lowering transaction and handling costs. It is also effective in reducing scrap, rework, equipment downtime, lead-time and over production.

As consignment becomes recognized in the marketplace as the “way of the future,” caution should be exercised due to the lack of experience and misconceptions by the competition.

Misconceptions include:

1: Consignment is a Supplier Program
Consignment does not start with a company/supplier seminar where you ask the customer how much he wants to stock on his floor. Consignment is complex, requiring supplier professional expertise, state of the art technological MIS and a true commitment of a joint partnership throughout both organizations.

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Minimum level of revenue desired. This needs to be

All You've Got To Lose Is Everything
Everything, that is, if you ignore those folks whose behaviors have the greatest effect on your business.What those people see and believe about your enterprise, pretty well determines what their follow-on behaviors will be - for example, do business with you, or move on to someone else.Is that what you want? Of course not. So let's do something about it.While I recognize that there are other factors bearing on the success of your business, this one is simply too important, and its impact too severe and too immediate, to ignore.You get this airplane off the ground by listing your top outside audiences who, when they like you OR ignore you, you feel it.In other words, they are groups of people important to you whom we refer to as target audiences or target publics. The one MOST important to you, we call your key target audience. And that's why you must list them in priority order so you know where you really need to direct your resources.How do you determine who thinks what about you? Sounds like work, but you must continually monitor that key target audience (and probably others). Are you bothered by what they tell you? Is there a perception problem? If there is, we know it usually turns into a behavior problem, so something must be done about it now, at the perception stage.What you've just done is establish your public relations goal - a specific behavior flowing from an equally specific perception, which we'll work on creating starting right now.Now that you've got a public relations goal, you need a public relations strategy. Lucky for you (and for all of us), there are only three possible strategies. Create opinion among that target audience where there may be none, change existing opinion, or reinforce it. We've picked "create" so let's proceed.With your goal and strategy in hand, you begin thinking "messages." And I mean persuasive messages carefully

hat only came out when all else failed – He begged. “Mr. Customer, is there anything I can do, anything at all that will convince you to give me a chance to do business with you?”

A concept was born

Rules of Engagement

The specific criteria that need to be determined before a consignment partnership is offered include:

• What is the minimum annual sales volume you are willing to accept?

• What are the minimum annual gross margin dollars you are willing to accept?

• Are financial statements available for your review?

• Is the customer financially secure?

• How much risk/investment are you willing to accept in off-site customer inventory?

Answers to these preliminary questions need to be established in addition to others that may pertain to your product and industry.

An Assessment of the Consignment Partnership

As consignment becomes recognized in the marketplace as the “way of the future,” caution should be exercised due to the lack of experience and misconceptions by the competition.

Misconceptions include:

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Minimum level of revenue desired. This needs to b

Taking Charge of the Job Interview
You are not alone if you dislike job interviews. Many senior-level executives, accustomed to being in control, are uncomfortable with the uncertainty of the interview situation. The good news is that you can take charge of every interview, by using a common interview technique to your advantage.I’m referring to the technique of behavioral interviewing, which simply means that interviewers ask very specific questions about real situations. The theory is that your past behavior is the best predictor of how you will behave in the future, so employers probe your background for clues.Let’s imagine that XYZ company is looking for a Marketing VP who can generate a lot of buzz with a small budget. In order to understand your experience in this area, an behavioral interviewer will ask:“Tell me about a time when you had to promote a product with very little cash.”or :“Describe a time when you created a lot of excitement about a new launch using non-traditional marketing techniques.”Behavioral interviewing has become quite common over the last 15 years and, you may well have experienced it yourself, either as an interviewer, or an interviewee. Provided you are prepared (and we’ll talk about this in a moment) a behavioral interview gives you an excellent opportunity to talk in detail about your experiences and accomplishments.Unfortunately, many interviews still follow the old format – the questions may be arbitrary, sometimes based on the content of your resume, sometimes on the preoccupations of the interviewer. They may also be very general in nature. For example, if the XYZ company isn’t using behavioral interviewing, they may ask VP candidates a question such as: “How much experience do you have working with a small budget?” This question doesn’t invite the same detailed response as the request for a specific example – but who needs an invite? The secret to wowing them

A concept was born

Rules of Engagement

The specific criteria that need to be determined before a consignment partnership is offered include:

• What is the minimum annual sales volume you are willing to accept?

• What are the minimum annual gross margin dollars you are willing to accept?

• Are financial statements available for your review?

• Is the customer financially secure?

• How much risk/investment are you willing to accept in off-site customer inventory?

Answers to these preliminary questions need to be established in addition to others that may pertain to your product and industry.

An Assessment of the Consignment Partnership

As consignment becomes recognized in the marketplace as the “way of the future,” caution should be exercised due to the lack of experience and misconceptions by the competition.

Misconceptions include:

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Minimum level of revenue desired. This needs to b

Use Contrast To Maximize The Size Of Each Sale
We are affected when we are introduced to two vastly different alternatives in succession. We know that contrasting two alternatives can distort or amplify our perceptions of things. Generally, if the second item is quite different from the first, we will tend to see them even more differently than they actually are. As a Master Persuader, you can use this contrast to steer your audience toward the object of your persuasion. The use of contrast is based on our perception of items or events that happen one right after the other. If you've had a rotten day because you found out you're losing your job and you come home to a new scratch on your car, you will have a vastly different reaction than if you were having a great day because you're getting a promotion and then came home to the scratch on your car. It's the same scratch, but there are very different perceptions and reactions to it, depending on your personal circumstances.This is all about human perception. The human mind has to find a benchmark of comparison to make judgments, especially when we are talking about unfamiliar situations. People need to make comparisons with their past experience and knowledge. By presenting your prospects with contrast, you are creating those comparisons for them. The mind can't process everything at once and so it develops shortcuts to help make decisions. Instead of making a completely internal judgment, we look for boundaries, patterns, and polar opposites. We want to know the difference between our options, so we naturally contrast the two items. We mentally place things in our mind from best to worst, first to last, or highest to lowest. Do you want your prospects to compare your product or service to a second-hand used car or to a Rolls Royce? You get to decide where you want them to start their benchmark.Have you ever taken your car to your mechanic and he tells you that you might need new brakes, a new transmission, a new fan belt,

• What is the minimum annual sales volume you are willing to accept?

• What are the minimum annual gross margin dollars you are willing to accept?

• Are financial statements available for your review?

• Is the customer financially secure?

• How much risk/investment are you willing to accept in off-site customer inventory?

Answers to these preliminary questions need to be established in addition to others that may pertain to your product and industry.

An Assessment of the Consignment Partnership

As consignment becomes recognized in the marketplace as the “way of the future,” caution should be exercised due to the lack of experience and misconceptions by the competition.

Misconceptions include:

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Minimum level of revenue desired. This needs to b

Mystery Shopping - An Excellent Part Time Job Or Additional Income Source
Though the name itself may seem a bit mysterious, the concept of mystery shopping is actually straightforward. Also referred to as secret shopping, performance evaluations, service checks and frontline evaluations to name a few, mystery shopping allows companies to obtain a “snapshot in time” by trained researchers who know in advance what they are to evaluate. It provides management a method to quickly yet efficiently evaluate their business practices, deliverables, and employees from the perspective of a non-biased consumer.Mystery shoppers visit or call businesses posing as ordinary customers and provide detailed evaluations of their experience using written reports or questionnaires.Mystery shopping is used in a wide variety of industries such as retail, restaurants, financial institutions, convenience stores and gas stations, service providers, manufacturers, department stores, travel and entertainment, etc.Though there is a certain level of responsibility and professionalism required to be an effective mystery shopper, you should never have to pay to get a job. There are dozens of companies claiming that by paying them a registration fee they will send you job opportunities and teach you the steps to becoming a shopper. This may be true, but is also completely unnecessary.The legitimate mystery shopping companies in the industry NEVER charge fees to the shopper. Training, tips for improvement, and shopping opportunities are provided free to registered shoppers. Mystery shoppers are either paid a pre-arranged fee for a particular shop, a reimbursement for a purchase or a combination of both. Though it is possible to make a living solely from mystery shopping, it is not very common. Most shoppers view this as a second income source or as a way to obtain fully reimbursed meals, products, and services.The registration process with leading mystery shopping companies has improved over the years. Most provide a simple online form th

ment of a joint partnership throughout both organizations.

Implementation of consignment requires a plan, an implementation team, a commitment from both parties and staying power to build a partnership seeking continuous cost savings.

How do you know if consignment is right for a particular account?

First, determine which accounts may or may not be eligible for consignment. At a minimum, you should consider the following:

• Minimum level of revenue desired. This needs to be determined to justify the investment not only of inventory, but of other resources to manage the program.

• Minimum volume level on items. The consignment program involves a level of overhead that may not be supportable on low turnover items.

• Integrity of customer. No matter how thorough your consignment agreement, all such programs involve a high level of trust between parties. How easy are they to do business with?

It is very important, then, to complete a diagnostic review. The diagnostic review, initiated by your sales support team, is the first step in preparing for consignment. The review involves your entire organization and represents a complete and thorough assessment of the customer’s current operating environment. It provides the base of reference for all future consignment activities. It is primarily a data collection and operational analysis effort which defines the consignment opportunities and the challenges that must be met for implementation. It includes an assessment of:

• Operations

• Material Flow

• Material Storage

• Organization

• Market Requirements

The diagnostic review results in a thorough understanding of the barriers, constraints and opportunities to implementing the consignment partnership. It provides the baseline for assessing improvement opportunities and for developing the consignment strategy. Failure to perform the diagnostic review significantly reduces the probability of success for consignment implementation. This can often negate any cost savings generated by the concept itself.

Once an account is determined eligible and the diagnostic review has been completed, further development of the rules of engagement include:

• Minimum turn rate

• Number of items to be consigned

• Stocking location

• Who will do the count

• How damaged goods will be handled

• What the replenishment cycle will be

• What the billing procedure will be

• What the billing cycle will be

Other criteria that is specific to the customer in question should be added to this list.

JIT on Steroids

Consignment partnerships act like Just-in-Time programs on steroids. They provide all the benefits of Just-in-Time without the high transaction cost, purchasing management stress and risk of stock outs.

It is extremely important to get as much specific information as possible directly from the customer. When you do your “cost savings analysis” and your “price is not the same as cost demonstration,” you will face less of a challenge if the bulk of your information comes from the customer, thereby increasing their perceived accuracy of your assumptions.

The following information is critical to the success of your sales presentation. Your objective is to get as much accurate information as possible from the customer. That information should include:

• Average volume of purchases on items being considered for consignment

• Average inventory of purchases on items being considered for consignment

• Average number of turns on items being considered for consignment

• Average cost per transaction (Customer generally doesn’t know the answer to this one, but use whatever number he guesses. Industries average between $30 per transaction to as high as $85 per transaction.)

• Annual average inventory write-offs

• Cost of cycle counting

• Cost of annual physical inventory including reconciliation

• Number of stock outs per year and cost of a stock out If your customer can’t answer these questions, try to help them come up with their best guesstimate before you resort to using industry estimates. The idea is that it is difficult for the customer to challenge a number that they created.

Consignment Benefits

Consignment benefits, pure and simple, equate to cost reductions. These cost reductions include: • Reduction or redeployment of personnel

• Reduction of transaction costs

• Reduction of handling costs

• Reduction of insurance costs

• Reduction of inventory taxes

• Vendor consolidations

• Reduction of interest costs

• Elimination of opportunity costs

• Elimination of stockouts

A primary objective of consignment is to reduce the customer’s cost of carrying inventory. This includes the cost of money, shrinkage, taxes, handling and storage. Typically, these handling costs range from 18-30% of the average inventory value.

Additional benefits to the customer include:

• Flexibility

o Material is always in stock at no cost until the material is released for production. Quantities available can be altered to meet peak demands as well as downturns.

• Reduction of dollar investment in inventory

o Consignment partnership provides an alternate use of capital and customers will not be invoiced for material until released for production. It also provides emergency safety stock for production with no inventory investment cost.

• Shorter lead times

o Normal lead times would be approximately 1-2 days, however, the consignment partnership eliminates lead time as material is always in stock and available at the customer’s plant.

• Assures growth opportunity

o Consignment partnerships provide the availability of consistent quality. Quantities and pricing are not subject to restrictions based on changing market conditions. Consignment partnerships enable us to effectively manage the supply chain, thus ensuring the lowest total cost.

• Pricing

o Pricing will be consistent regardless of quantity used. (No Extras) The price for one item is the same as the price for 100 items.

• Vendor reduction

o Reducing the number of vendors, consolidating sizes, parts, communication and administration can contribute to overall cost reductions – substantial reduction in debits and credits.

• General

o The intent of this program is designed to offer overall cost reductions, flexibility in scheduling, improved cash flow, reduction in inventory and investment, assured growth opportunities and to enhance long-term vendor relationships.

This results in the true meaning of partnership, a win-win relationship. A customer may ask the question, “How can you provide all these services without charging a substantial premium on pricing?” The answer is simple. Consignment is a partnership that provides benefits to both parties. Your benefits as a suppli

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What would you do if you knew you couldn't fail? What haven't you done, because you were afraid you would fail? Failures are the halfway point between trying and success. If you don't try, you won't fail, if you don't fail, have you really tried?

Most business executives know the importance for updating disclosure documents and investor prospectuses. Failure to keep updated documents can and often will lead to litigation anytime an investor loses money unexpectedly. In franchising if a franchisee fails, files bankruptcy or is terminated for cause most franchisors realize that this can also trigger litigation or legal issues, even if they are settled in arbitration.

I just recently read some more data that shows that internet marketing is going to become increasingly harder to make money at in the very near future.

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