Small Business Will Continue Cuts in Spending, Hiring – Wells Fargo/Gallup

 

Dec. 16, 2012

By double-digits, small-business owners have been retreating on their spending and hiring, and will continue to retrench, according to the Wells Fargo/Gallup Small Business Index.

The November 2012 research clearly shows many small-business owners are pessimistic. Such conclusions have also been drawn by National Federation of Independent business, which reported small businesspeople are depressed by their prospects.

The Wells Fargo/Gallup report also reports such economizing is a reflection of the times. Ordinarily, such pessimism fades in a short amount of time. But the study shows small businesses have cut back multiple times since the Great Recession.

Worse, the trend will continue.

 

The study indicates small-business owners are the most apprehensive they’ve been since W3 2010. Twenty percent will increase their capital spending, which is worse since July 2012. Thirty-four percent will cut back, also an increasingly bad indicator. Forty-five percent anticipate no change.

Net capital spending was down in 2012.

The small businesses that expect to increase spending, the 18 percent, is almost identical to 2011. The 40 percent that spent less in 2012 is similar to 2011 when 43 percent cut back. 

Finally, the study concludes small businesses probably hope to make large capital expenditures when the economy improves.

Unfortunately, from my observations in articles about public policy and the astute economic analyses by a noted economist, don’t count on improvement any time soon.

From the Coach’s Corner, in this portal, you can find hundreds of proven solutions in these categories: Marketing/sales, finance, planning, operations, tech and HR.

Some days you’re the dog; some days you’re the hydrant.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

 

7 Tips to Tweet Your Way to a Great New Job – Seriously

 

If you play it smart, you can take advantage of the 500-million Twitter account-holders to get a new job or career. Sure, it’s a daunting task, but the potential for success is terrific.

You can tweet to link up with the right people — just as well, if not better, than LinkedIn. But that’s not to say that you shouldn’t use LinkedIn and other social media. You have to make an investment in your time and energy – some research and careful thought.

For the sake of explanation, let’s consider a job search in “advertising,” but you can apply the following principles to your situation. These strategies will work in most professions. Coordinate your footwork with a blog, but more on that later.

Here’s how to tweet your way to a new job in seven ways:

1. Social analytics with Topsy. Geared for marketers and journalists, Topsy can also help professionals develop information to benefit their careers. Topsy Pro Analytics provides data of billions upon billions of tweets and other social posts. It also will help users obtain multi-year posts as well as real-time tweet activity. You can take productive action in your job search – examining hashtags, images, links, subjects, terms, trends and videos.

Access to trends is especially beneficial, especially because the information is current and topical. On a daily basis, Topsy indexes geographic locales, influence, language and social sentiment. This means users can target top influencers and learn the pros and cons about topics, and their impacts.

2. A good job search is all about relevance with relevant people. Firstly, you have to find them after you know what subject matter is relevant for your career goal. For example, advertising professionals should search topics related to advertising and marketing, and then click on “people” in the module on the left side. In this way, you’ll discover a lot of people who are in your profession. If you know which companies for which you want to work, you can search for them, too. You’ll come across the companies’ decision-makers. Follow them and retweet their posts.

3. The value of hashtags. Businesses often use hashtags to categorize their tweets by keywords, e.g. “advertising job” or “job available.” You can, too. (See Twitter’s hashtag explanation.)

4. Twitter lists. To stay organized in your job search, create Twitter lists. So people know you’re not just a spammer, create a list in the hypothetical example, “advertising professional.” Then, tweet in this list the tweets of advertising or marketing professionals. In this way, you’re likely to attract followers. 

5. Using Twitter chats. In real-time, you can tweet about your preferred topics. Use this as an opportunity to start a dialogue by asking questions. To save time and effort by not having to constantly refresh your page, you can solve this by entering the hashtag into TweetChat. You’ll get an automatic refresh.

6. Naturally, only tweet pertinent topics. OK, by now you’ve got access to the right people. So only tweet links for your particular profession. If you have enough space, include your opinion to enhance your reputation.

7. Launch an appropriate blog. On your blog, insert links to your tweets. So when prospective bosses search for your name, you’ll create a favorable impression by demonstrating relevant insights that will be appealing.

From the Coach’s Corner, see these related tips:

• Top 11 Tips for a Great Elevator Pitch
• Stand Out: Get a Job Interview with a Great Resume
• Job Hunting? Tips to Land Your Dream Job with Style, Substance
• Discouraged in Job Hunting? Powerful Tips for the Best Job
• Need a Career Change? 10 Steps for a Career Makeover
• 5 Tips to Shine in Your Online Job Application

“Commitment leads to action. Action brings your dream closer.”

-Marcia Wieder

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Even Ordinary Folks Need 10 Best Strategies for Estate Planning

 

It’s a mistake to think estate taxes only apply to the super rich. Estate taxes hurt ordinary folks.

Estate taxes are especially problematic for farmers and small businesspeople, alike, who own their buildings and have capital tied up in equipment to grow crops or to produce products.

The drought is devastating many farmers — they can’t get hay for their animals and they have fewer crops to sell. The sour economy has made it difficult for most small businesses to find customers.

Needless to say, both are job creators. Unfortunately, many family farms and small businesses have been sold because the heirs couldn’t afford the estate taxes.

One might think that public officials would be sympathetic. But published reports indicate the two presidential campaigns have stark differences in how they would approach taxes and estate planning for passing assets to heirs.

Republican vice presidential candidate Paul Ryan has a long congressional history on taxes – he would do away with the estate tax.

As his potential boss, GOP presidential candidate Mitt Romney also calls for eliminating the estate tax.

President Barack Obama’s approach is vastly different. He wants to reinstate the 45 percent estate tax above the $3.5 million level. Other Democrats have called for a 55 percent estate tax.

At this writing, the estate tax is 35 percent over $5 million.

If you want to preserve assets as much as possible for your children, talk with a qualified estate attorney about these 10 basics:  

1. Estate planning is important in tax issues. True, a living spouse gets all proceeds without being taxed. However, beneficiaries – including your children – may be subject to paying an estate tax. So estate planning helps to insure that your heirs will inherit the maximum possible while minimizing taxes.
2. Be very selective in choosing an executor. Until taxes are paid and assets are distributed, your executor will be handling all the important details. You’ll need to pick one with financial knowledge and unquestioned honesty. Otherwise, your estate might be tied up with the Internal Revenue Service and lawsuits among jealous parties – to name just a couple of issues.
3. Create a will. Unless you have a will, a court will make the decision on whom gets the assets and how much. Indicate in your will how you want your estate to go to your heirs, even if your assets are small.
4. Consider a family trust. Trusts aren’t just for the rich. A well thought out trust will protect your assets by making certain they will go where you want. Other benefits – trusts keep ex-partners/spouses of beneficiaries from getting their hands on your assets, and trusts can designate when your children get your money. Some children are too irresponsible to receive a large sum of money at an early age.
5. Gifting as an option before you pass away. Legally, you can gift $13,000 in money or other assets annually to an heir without anyone being subject to the gift tax. In this way, your heirs keep more of your assets instead of the federal government.
6. Estate planning should be fine-tuned when necessary. Nothing ever stays the same. Because conditions and situations change, you should review your estate planning upon the death of your partner. That’s because you’ll have to change the list of beneficiaries, if your partner dies first.
7. Retirement accounts need attention, too. You should consider talking with your account managers – to specify beneficiaries in IRAs or other retirement accounts. If you don’t – and you only name names in your will – the estate settlements will take much longer than necessary.
8. Joint accounts with your partner will simplify financial issues. It takes time for a partner to legally get access to your accounts on your passing, and vice versa. Remember, there will be new and continuous expenses that will have to be paid. Such headaches would be avoided with joint accounts.
9. Before you remarry, do a pre-nuptial. If you remarry, you’ll probably want your estate to go to your children instead of your new partner. A good estate attorney will write an effective pre-nuptial agreement. Then, your executor won’t have any problems distributing your assets.
10. Financial issues should be co-managed. The passing of a loved one can be very traumatic and heartbreaking. It’s much worse when the surviving spouse doesn’t have a clue about the finances. Both spouses should have a working knowledge about family finances.

Note: The IRS released a new draft version of Form 706, the Estate (and Generation-Skipping Transfer) Tax Return.

So, get busy if you want to effectively make certain your estate wishes are carried out. Establish a good estate plan, and remember how to vote if you want tax fairness.

From the Coach’s Corner, see these related topics:

• Is it Too Much to Ask for Civility and Honesty from Mr. Reid and the Press?
• 7 Capitalism Principles for Economic Growth, Prosperity
• Nonpartisan Study: Obama’s Tax Plan Hits 53% of Business Earnings

“There is one difference between a tax collector and a taxidermist – the taxidermist leaves the hide.”

-Mortimer Caplan 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

8 Strategies When Sales Drop and Costs Cut into Your Profits

 

If your sales are down and costs are hurting your profits, you’re certainly not alone. This is still not a good economy.

Gas prices are hurting business and consumers in many states. The drought has hurt corn production. Prices for peanut butter and coffee have increased. Airlines are adding seats to cut legroom for passengers. Sales are down in some home improvement at major retailers.

So challenges exist everywhere, not just with you. The irony is you can do something about it.

Here are eight strategies:

1. Turn the problem into an advantage. Consider making a bigger product and charging a higher price. If you have products with good margins, use them as loss leaders to entice customers to buy your other products.
2. Use traditional tactics. Determine your break-even point. Reduce the size of your product, if you think your customers won’t care. Your customers might notice but many will still probably buy to avoid paying higher prices.
3. Recycle and reuse. Look for more ways to save money in your operations. Plan better delivery routes to use less gas. Avoid upgrading software. Purchase pre-owned products. Partner with your employees and incentivize them to come up with money-saving/money-making ideas.
4. Negotiate. Business relationships are important. But if you can’t afford your vendors’ prices, try negotiating.
5. Change your vendors. If your vendors aren’t willing to negotiate, look for others with which to do business.
6. Close the office and go home. Work from your home. More and more businesspeople are using technology to telecommute. Talk with your CPA. You’ll avoid paying office rent, and you’ll be able to take a write0ff at tax time if you dedicate space for business.
7. Increase your prices. Hopefully, your branding is strong, and your customer satisfaction ranks high. Warn your customers and explain why you must increase prices, and express empathy and appreciation for their business. Provide more added-value – if it doesn’t hurt your bottom line any further. Fine tune your customer service
8. Expand marketing economically. Bone up on social media, get more opportunities as a guest speaker, find strategic alliances for cross-promotion, write press releases and discuss possible trade-out opportunities with the media. Radio stations are known to give free advertising in exchange for products and services.

If all else fails and you really feel you can’t raise prices – then don’t. Just accept your situation and keep on truckin’.

From the Coach’s Corner, actually, you can find countless strategies on this business portal in the Finance and Marketing/Sales categories.

“The worst crime against working people is a company which fails to operate at a profit.”
-Samuel Gompers

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Best Buy’s Lessons from Trying to Sell at the Cheapest Price

 

Updated Oct. 14, 2012

Best Buy is a troubled company. Some of it’s challenges stem from unfair Internet competition, and it feels compelled to match the prices of online competitors in this year’s holiday selling season. That’s not good for a company that has brick-and-mortar sales expenses.

But in other ways, the company has caused its own problems.

Best Buy’s net income fell 90 percent in the second quarter, and has a new CEO. The old CEO resigned his position and left the board in the wake of the discounter’s financial problems. Then, he engineered a plan to buy Best Buy, but to no avail.

You might recall earlier year Best Buy tried to lower its expenses by $800 million by 2015 in closing 50 of its superstores and by laying off 400 employees. Instead, it will focus on 100 new smaller stores to sell mobile products.

“In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Brian J. Dunn, CEO of Best Buy, in announcing the cutbacks before he resigned.

“As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints – closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations – all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability,” he added.

Whew, that’s a mouthful. It appears to be an attempt to create a smokescreen about its business-model issues. 

True, Best Buy has been hurt somewhat by the Internet, especially Amazon.com. The consumer practice of “showrooming” has been devastating. Consumers visit retailers like Best Buy to check out products, but then go online to buy at the cheapest price.

Best Buy is also hurt by the manufacturers. If you buy a product at Best Buy and register a purchase, you’ll be inundated via e-mail by the manufacturer. It seems almost daily – manufacturers the likes of Lenovo and Hewlett-Packard are trying to sell products to consumers directly. 

However, most purchasers want a test drive before they buy a new tech product. Though not known for selling the newest products, Costco makes it work by creating trust with great customer-service policies. Costco also has a better clientele — small businesspeople and high net-worth shoppers. Most are unlikely to pull the showrooming nonsense.

Poor business model

Historically, no company has ever been profitable solely by trying to sell electronics products at the lowest price. It simply isn’t a viable business model. Actually, it doesn’t work in any sector.

For a sustainable business model, customers have to perceive sufficient value.

When shoppers enter Best Buy stores, they perceive that too many employees only want to sell products, and not provide a service.  But Best Buy really needs to invigorate sales with 11 customer retention, referral strategies. 

Further from my perspective in the Pacific Northwest, here are my observations after shopping at Best Buy stores: 

1. Failure to deliver with mediocre prices
2. Poorly dressed salespeople
3. Inconsistent product knowledge among salespeople, and some knew less than I did
4. Some salespeople were condescending and rude (in particular – Springfield, OR)

Clearly, customer service and sales training are in order. The latter three reasons are enough to drive customers elsewhere. It’s important to get strong results from an HR training investment.

Also, it’s important to understand why people will buy from you – remember it’s always an emotional decision.

Admittedly, about 18 percent of customers – blue-collar and professionals, alike – will only buy if you’re selling at the cheapest price in the marketplace. That’s also helped cause the annoying consumer practice of showrooming.

Assuming you’re selling products of value, avoid those people. They are the most troublesome.

Even if they buy, they’re more likely to show up the next day demanding to return their purchase. Even if they keep the purchase, they complain the loudest and longest.

Focus on people who are motivated by price and value.

For them, here are the five value perceptions of what your customers sub-consciously think in motivating them to buy from you:

Employees, Spokespersons – 52 percent. The key characteristics are integrity, judgment, friendliness and knowledge. Remember, about 70 percent of your customers will buy elsewhere because they feel they’re being taken for granted by your employees. And customers normally will not tell you why they switched to your competitor.

Image of Company – 15 percent. They are concerned about the image of your company in the community. Cause-related marketing is a big plus in forging a positive image. So is cleanliness and good organization.

Quality of Product or Service Utility – 13 percent. The customer is asking the question – “What will this do for me?”

Convenience –12 percent. Customers like easy accessibility to do business with you. That includes your Web site, telephoning you, and the convenience of patronizing your business.

Price – 8 percent. Price is important, but it’s the least concern among the five value-motivating perceptions. Use the eight simple strategies to give you pricing power.

From the Coach’s Corner, here are three salient resource links about sales and profit:

• Do You Know What Drives Your Profit?
• Profits: How to Save on Sales Opportunity Costs
• The Seven Steps to Higher Sales
• 11 Sales Strategies to Outsell Your Big Competitors

“Where you start is not as important as where you finish.”

-Zig Ziglar

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Football Lessons For Growth – 9 Steps For Strategic Alliance Success

 

En route to the first two Super Bowl wins in the 1960s, I recall three factors about Vince Lombardi’s Green Bay Packers – they were intense, skilled and balanced.

A fourth factor – they kept it simple. Even as a kid watching them on TV, I could almost anticipate most of their plays depending on the situations they faced.

Those days for me, they were the most exciting team to watch on TV. That was also thanks to the few words of minimalist sportscaster Ray Scott: “Hornung…touchdown…Green Bay!”

Paul Hornung was a complete player – a star halfback who also kicked field goals and passed for touchdowns.

Called the “Golden Boy,” he was a source for great metaphors in business. He was called to duty in the U.S. Army in the 1961 season. But somehow he was able to play on Sunday. In the NFL championship game vs. the New York Giants, he was named the game’s MVP.

Later, we learned why he was allowed Army leave on Sunday to play football. Coach Lombardi knew President John F. Kennedy. The legendary coach never seemed to overlook an opportunity in order to win.

Two years later, the flamboyant star was suspended indefinitely for gambling on games. But Coach Lombardi’s influence in the league and a contrite Hornung made his return possible the next season. Again, it was a lesson in networking for businesspeople.

As often is the case, sports offers lessons on strategic management and planning.

The NFL provides great metaphors for business success. Many businesspeople also know the importance of becoming stronger by teaming with others. By combining resources, companies succeed in meeting the needs of customers.

All such traits – passion, best practices, simplicity and strategic partnerships – contribute to winning in business. That’s why success stems from what you know – and whom you know – helps a business to be stronger in taking advantage of opportunities for growth via management, marketing and stability.

Naturally, to attract strategic partners, it’s important to be an attraction.

Here are nine steps:

1. Take an inventory. Evaluate your strengths and weaknesses, which have to be improved upon. You should demonstrate positive financials, stability, and vision.
2. Analyze your potential partner’s and alliance opportunities and threats.
3. Develop benchmarks. Determine in advance how you will measure success.
4. Be cautious and detached. Take baby steps – get engaged – don’t get married right away. As in marketing, remember this tenet about your prospective relationship, “test…test…test.”
5. Consider it an investment of your time and resources. Remember the Golden Rule. Take it seriously if your partner is to take you seriously.
6. Create a paper trail. Both parties must know what’s expected, how they’ll benefit, and if they do.
7. Leverage expertise of outside participants. That includes a mentor and professionals who understand the industries of both partners.
8. Make communication a key component of the relationship. Not via e-mail or telephone, but in-person visits.
9. Seek constant, ongoing improvement. Fine-tune as you go.

Oh, and make sure your strategic partner adheres to the nine standards.

From the Coach’s Corner, here are related resource links:

• Planning – Need a Game Changer? Ford, Seahawks Are Good Case Studies
• Helpful Career, Biz Tips from UCLA’s Longtime Broadcaster

Winners don’t wait for chances, they take them. 

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Profit Drivers – How and Why to Partner with Your Employees

 

If you want maximum profit, consider partnering with your employees.

“Key employees – in fact, all employees – will be more valuable to a company if they understand what drives profit and improves cash flow for the business,” says leading financial consultant Roni Fischer.

Ms. Fischer explains typical obstacles to profit:

• A furniture retailer might have employees who believe every conceivable product should be stocked for easy sales, but workers don’t understand the need for diligent inventory management so cash isn’t tied up unnecessarily. 
• Because of the economic downturn, some sales people want to discount prices. They don’t understand the need to sell products at full price to preserve profit margins. 
• Sales persons might focus on prospecting for new customers rather than nurturing existing relationships. They don’t appreciate that retaining customer loyalty by providing added value to those who are already buying your products is much more cost effective than pursuing new customers. 

Ms. Fischer knows the greatest asset that any company has is its human capital.  

“The best way in which to engage and empower these employees is by sharing management’s vision, goals and sales targets with the company’s personnel,” she explains. “Employees in every department can impact the profitability and cash flow of the business. When staff members understand how their roles impact the bottom line – and are financially incented to achieve the company’s goals – they become key partners in the business.” 

She recommends key profit-making roles and contributions by departments: 

Marketing – Ensuring that marketing campaigns focus on “benefits” – how their products respond to a customer’s “pain” or “need” (rather than merely detailing the features of the product) – maximizes sales.

Sales – Focusing on products with the highest gross profit margins, rather than top line revenue dollars, increases profitability. Structuring commission schedules to reward more profitable sales redirects emphasis to those products and relationships that are most financially lucrative. Partnering sales with finance to collect outstanding accounts receivable balances – before sales commission checks are cut – escalates cash flow.

Operations / Manufacturing – Streamlining manufacturing and operational processes to eliminate waste and minimize defects conserves cash. Accurately planning production levels in response to marketing’s projections enhances the likelihood of having sufficient inventory to meet customer demand (thereby maximizing sales) and minimizes overproduction (which generates costly excess inventory). 

Finance – Collaboratively developing budgets that incorporate input from all company departments and tracking performance against these budgets provides a means of quantifying the company’s activities.  Translating these budgets into cash flow projections helps ensure adequate capital for payroll-related expenses, production, sales and administrative expenses, R&D, capital expenditures, etc. Evaluating credit worthiness of potential customers and determining when to offer payment terms minimizes the risk of non-collection of accounts receivable balances. 

Human Resources – Communicating management’s vision, goals and objectives provides the framework for training and empowering employees to optimize their personal contributions toward achieving these goals.  Incenting employees with three-tiered bonus compensation plans reflecting individual, group and overall company performance enables all employees to share in the company’s success. 

Management – Strategically guiding the business and empowering the employees to partner with Management in attaining the company goals capitalizes on the business’ human resource assets.  

“One tool that can be exceedingly effective in guiding, tracking and communicating the company’s performance is the flash report,” she points out. “This one-page document incorporates key performance indicators (KPIs), or critical success factors, that management has identified drive the company’s success. Typically these relate to sales, collections, cash balance, accounts receivable, loan balance, accounts payable and backlog.”  

How KPIs are best utilized 

“Updated daily by 9:00 a.m., with the KPIs compared against the monthly and year-to-date budget, the flash report should be shared with as many people in the company as possible so that all departments understand their roles and can assume a sense of ‘ownership’ in achieving the company’s goals,” Ms. Fischer explains. 

Ms. Fischer is president of RLF Associates, Inc. in the Los Angeles area. As a leading consultant for over 25 years, she provides expert financial and management solutions for firms ranging from start-up companies to multi-hundred million dollar corporations. 

See more of Ms. Fischer’s insights: Budgeting Basics for a Micro Business.

Her Web site: www.rlfassociates.com.

(Note: She is a fellow member of Consultants West, www.consultantswest.com, a roundtable of veteran consultants in the Los Angeles area.)

From the Coach’s Corner, here’s a related resource link: Accounting / Finance – Why and How to Determine Your Break-Even Point

“I never lost money by turning a profit.”
-Bernard Baruch

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Consultants / Service Firms: Why Hourly Billing Isn’t Best

 

One of the first lessons I learned in business-performance consulting was to sell results, not my time.

During the tail end of the 1990 recession, I had purchased a five-year-old print-marketing firm. Quickly, I realized I was overlooking opportunities for growth. My newly acquired company soon evolved into a full-service management consulting firm, which I incorporated into a vision plan.

Technically, it didn’t become a pure consulting firm, it was more of a hybrid – consulting and management services. Some clients required more than my advice and information. They needed some heavy lifting.

Here’s a case study:

One of my early clients was a big office-furniture retailer, which grew too big without proper planning. We did the retailer’s print-marketing projects, but in client meetings after the owner complained bitterly to me about his sales staff, I offered to set up a sales-management program.

It was an highly chaotic situation. The whole sales and customer-service culture had to be fixed.

Initially, my outsourcing services were labor intensive as the sales staff was dysfunctional, and it got away with a lot of nonsense, which was hurting profits.

For example, salespeople were desperate to make sales to indecisive customers. Often, a salesperson arranged for free delivery of an eight-foot mahogany conference-room table to the customer’s business for a 30-day trial look-see – without payment or any safeguards for the retailer. Half the time, the table was returned – with a big scratch. The sales-opportunity costs were enormous.

Therefore, in addition to showing the client how to conduct meetings, I literally had to provide ethics, communication, sales and management training.

Valuable lessons

But I quickly learned I hadn’t initially set boundaries with the client.

After solving the major issues – getting his staff to work better – I was anxious to turn my attention to other clients. But my client was so accustomed to my being there every day, he expected it indefinitely.

He also didn’t understand why I only trained and advised him so he didn’t have to fire anybody, which would have increased his payroll even higher. He didn’t get why I didn’t have legal authority and why I always used my own materials.

So, the lessons prompted me to use a different upfront process – to sell results with benchmarks, to train the client about how I deliver results, and to explain how I’m paid and the timeline to expect.

It’s a relationship that requires trust by both parties.

To facilitate the relationship-building process, I changed my focus with strategies to build trust with clients.

Businesspeople want strong results that include:

• Efficiency
• Information
• Innovation
• Objectivity
• Productivity

This means projects are completed on schedule, within budget, and with measurable results.

To be able to accomplish such objectives, I had decided against hourly billing – I had to charge enough for my time to cover my business expenses, but some prospective clients had sticker shock from hourly rates.

Sometimes, the prospective client didn’t value some services as others. They thought I should provide them with a multi-tiered billing depending on the services. I had to get it ingrained in my mind that my time, consideration and energy were just as valuable whether I was training a class, mentoring one-on-one or writing advertising copy. All services had the same value.

Value pricing

So unless it was a big prospect who insisted on hourly billing, I began to talk to each prospect about investing in projects for strong results. I saved a ton of grief and time by charging retainers. I began to work off the retainer without nickel-and-diming clients for miscellaneous charges. Only on occasion would I bill for miscellaneous expenses, after getting approval in advance.

In contrast, professional service firms like hourly billing. They use software to track time. Candidly, if I hired a CPA or attorney, I insisted on knowing in advance what their total charges would be. I had heard horror stories. For example, the timer wouldn’t be stopped when the professional ducked into the lunchroom for a cup of coffee or took a phone call – or the hourly increments would be rounded up.

Further, whether I was hiring a professional-service firm or quoting a project fee, I wanted the focus to be on the work at-hand. I didn’t want to hire someone to get paid for tracking their time. As a consultant, most businesses have never hired me unless they had challenges they couldn’t solve. So I wanted to spend my time on providing results, not watching the clock.

In other words, my reputation depended on my ability to prevent negative surprises, so I’ve always offered value-pricing based on a retainer. Oh, and I stopped spending my valuable hours on penning proposals. The prospect and I will chat about the situation, and I’ll present a short letter of agreement, but I won’t incur any sales-opportunity costs to write proposals.

Remember, clients don’t want to pay for your time.

From the Coach’s Corner, here are 60 ground rules for effective client service.

“Hiring consultants to conduct studies can be an excellent means of turning problems into gold; your problems into their gold.”

-Norman R. Augustine

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Why Northwest Partnership Led to Solutions for High Jet Fuel Costs

 

In news coverage about the airline industry, there are countless worldwide news reports about the plight of most airlines suffering from high fuel costs. A typical headline – Airlines React to Rising Fuel Costs by Cutting Service and Flights.

So, it’s about airline jobs, and commerce – enhanced aviation service for businesspeople and consumers. ‎Fuel expenses constitute as much as 30 percent of an airline’s operational costs.

But an aviation biofuel industry is taking hold in the Pacific Northwest, thanks to a  partnership called Sustainable Aviation Fuels Northwest (SAFN), which produced results from a 10-month study in May, 2011. In effect, the report is a SWOT analysis for developing public policy and biofuels for the airline industry.

The study’s partners: Boeing (NYSE: BA), Alaska Airlines (NYSE: ALK), Portland International Airport, Seattle-Tacoma International Airport, Spokane International Airport and Washington State University.

“It is critical to the future of aviation that we develop a sustainable supply of aviation biofuels,” said Boeing Commercial Airplanes President and CEO Jim Albaugh. “Airlines are particularly vulnerable to oil price volatility, and the aviation community must address this issue to maintain economic growth and further mitigate the environmental impacts of our industry.”

So how will it be possible?

“The Pacific Northwest has the diverse feedstocks, fuel-delivery infrastructure and political will needed to create a viable biofuels industry capable of reducing greenhouse gases and meeting the future fuel demands of the aviation industry,” states the SAFN’s press release . “Creating an aviation biofuels industry, however, will depend upon securing early government policy support to prioritize the aviation industry in U.S. biofuel development.”

SAFN indicates a biofuels industry for aviation is the next logical step.

“Alaska Airlines has made significant strides in reducing its environmental impact by enhancing the efficiency of its operations, including using satellite-based flying technology and investing in the most fuel-efficient airplanes in their class – but efficiency is only part of the answer,” said Alaska Air Group Chairman and CEO Bill Ayer.

“In order for the aviation sector to continue its impressive record of fuel efficiency and emissions reduction while continuing to grow, it is important that a sustainable supply of aviation biofuels is developed,” added Mr. Ayer.

SAFN explains how it can be accomplished.

“To make a sustainable biofuels industry a reality, the study outlines an integrated approach recommending the use of many diverse feedstock and technology pathways, including oilseeds, forest residues, solid waste and algae,” according the SAFN press statement.” In addition, the study outlines the long-term importance of securing aviation biofuels as a top government priority and using the aviation industry to drive growth in domestic production.”

The SAFN study encompassed the full gamut from biomass production to airline usage.

“However, as with any new energy supply, political support at the state and federal level is critical in the early stages of development,” cautioned the press release. “While the study does not advocate for permanent government support, it recognizes that focused public investments and parity with other biofuels programs will be needed to place the industry on an economically competitive basis.”

Port of Portland is one of the three Northwest airports that are participating in SAFN.

“The Northwest is uniquely positioned to serve as a blueprint for developing a U.S.-based, sustainable aviation biofuels industry,” said Steve Schreiber, Port of Portland aviation director.

The Port of Seattle says biofuels for aviation are an environmental solution.

“Airports have been leaders for years in finding ways to reduce their environmental footprint, from clean fuel sources for taxis and shuttles to electrification of ground equipment and pre-conditioned air, but in order to take the next big step we have to address emissions from aircraft,” said Bill Bryant, Port of Seattle commission president.

“We can’t get there without biofuels. It not only will help the sustainability of the Northwest but also the aviation industry,” he asserted.

Spokane International Airport says biofuels is important for competitiveness.

“We can no longer base our future on imported petroleum, especially if the United States wants to remain an aviation leader,” said Lawrence J. Krauter, chief executive officer, Spokane International Airport. “The SAFN study proves domestic biofuels are feasible and offers an economic opportunity for us to remain competitive as an industry and move toward a sustainable, domestic fuel supply.”

Washington State University makes a prediction.

“WSU will combine our world-class biofuel and agricultural researchers along with significant institutional assets to leverage the Northwest’s abundance of agricultural and natural resources necessary to create a dynamic new aviation fuels industry,” said Dr. John Gardner, vice president for Advancement and External Affairs at Washington State University.

“The long-term payback will be a stateside industry that greatly enhances our traditional economic strengths; from farming and forestry to engineering and aerospace, creating new opportunities and new jobs for the Northwest,” added Dr. Gardner.

SAFN originated in 2010 with more than 40 partners.

My sense:

Congratulations to SAFN stakeholders. No one wants to inflate the Washington state or federal budget. But surely with this study, we’re half way to more environmental and fuel-efficient solutions.

Who knows? Boeing will sell more jets. Alaska Airlines will become even more successful. WSU will enhance its already terrific reputation. And the regional airports will get even better.

Besides, a biofuel proposal that includes the productive use of algae? Terrific. I don’t know about you, but my allergies might disappear.

Fly, fly, fly away!

From the Coach’s Corner, here’s more on SAFN: www.safnw.com.

“Where there is an open mind there will always be a frontier.”

-Charles F. Kettering

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.