Tip:
Highlight text to annotate it
X
Good afternoon everyone and thanks so much for joining us today for the first webinar
in the small business week series. We're very proud to be bringing you this webinar on behalf
of the Queensland Government. And you can see there on the screen if you would like
to Tweet today we would very much like you to do that direct to the Queensland government's
Twitter handle, which is @businessqldgov, of course the business area there, and there
is a hash tag today of #qldbiz, so feel free to text, chat, during the presentation or
after and tell us what you thought. We are today, of course, talking about strengthening
your business, so I was really pleased to see such a lot of people registering for this
topic because it's an important one and it's sort of something that every business should
be thinking of, really. No matter how successful you are, you can always do things to make
it stronger and to be successful into the future and not just today as well. So here's
what we've got on the agenda today. The importance of being customer-centric: thinking about
your customers; we all like to think we do do that, but at times we do it better than
others. Trends that can affect your business; strategies
to strengthen your business; improving cash flow; people, because they are after all a
big part of your business and you can certainly make your business stronger by getting the
right people and looking after them; and then systems as well, which with the advent of
the technology age is certainly something that you should be looking at. There will
be an opportunity to ask questions at the end, though you are very welcome to interact
with us by text chat throughout the session. I'll give you a little tip on how to do that
on this screen. So what you should be able to see is something like this in front of
you. If you actually click on that red arrow up
the top left there it should expand your menu and give you a little section there where
you can actually type me in a question, a comment, a smiley face, whatever you feel
like sending. So just to make sure that you've got the hang of that, I'd love you all to
drop me a little text chat right now, just to say hello, and when they start coming through
I'll continue. Brilliant. Lots of people saying hi and hello and a few names I recognise too,
so welcome to all the people who have done webinars with us before, and an extra big
welcome if this is your first webinar too. All right. Apart from being able to text chat
us at any time, you're very welcome to raise your hand. That's signified here in this red
area, so simply click on it to put your hand up and we'll know towards the end that you
would like to ask a question and we'll give you the opportunity to do so. I should also
mention that today facilitating with me is Anthony Viner, so if you are struggling with
anything technical or have questions you're welcome to text chat direct to him and he
will do his best to respond to you. Now, I haven't introduced myself. For those
of you I haven't met before, my name is Yvette Adams and we've won a lot of awards as a company
and I'm proud to have won a lot of awards as a business owner as well, both locally,
regionally and nationally. I've actually started five businesses. I started
out young. My first business was when I was 17, so I look back and I think, "Well, I've
always really been an entrepreneur, I just didn't know what it was called at the time.
I've sold two of those businesses and these days I focus on two of them. The Creative
Collective is who is delivering this today. We developed and deliver this great content
from the Queensland government; and I also have a new start-up called AwardsHub.com,
which is an online portal. If you're interested in finding out business awards, you could
enter. You can feel free to go and have a look at that.
We work with start-ups right through to really big companies and we work with them locally
here on the Sunshine Coast but also across Australia, and we even do interact with people
internationally. And why not? We live in this digital age so let's make the most of it.
I like to mention to people that I am a mum. My kids are six and nine so I don't know what
the jungle of being a parent is like. It's pretty hectic sometimes but it's all possible
with good planning and organisation and getting new tips and tricks from things like these,
webinars, is a really good way to work out how to be effective and efficient with your
time as well. I absolutely love training and assisting others and I love getting feedback,
too, on how we can do it better, so I welcome that at any time.
So to get into the presentation, the first thing � the big question I want you to ask
yourselves is what does your customer actually want? That might sound like a really simple
question and you might think you know what your customer wants but I want to explore
that a little bit more because if you can actually understand that at quite a deep level
you really will strengthen your business. We have seen with clients we have worked with,
and you probably know some yourselves, those that think they know what the customers want
and they order a new product line or manufacture things or provide a certain service in a certain
way at a certain price point, but actually the customers don't want that and they're
not checking in often enough to find out what it is they really want, so let's explore this
concept a bit more. This screenshot may be a little blurry, you
may not be able to read it, and if you can't, don't worry too much, but I wanted to let
you know that apart from being customer-centric you need to also look at the big picture.
There are always mega-trends or macro sort of things going on in the world which will
impact on your business and some clever guys � they're futurists called Ross Dawson and
Richard Watson � they actually created this trend blend diagram. They released it 2007,
I believe, the first time. This is the most recent one from 2010. I'm going to get Anthony
to send you through a link if you want to have a proper look at the full PDF in your
own time, but you can see some of the bigger - I guess, topics going on which our impacting
most businesses and some more so than others depending on what it is you do.
We've got power shifting towards the east, as in the Asian markets; we've got an ageing
population, the world around; globalisation, that's very much a case; urbanisation, but
then interestingly enough in the middle there, localism is happening; personalisation, when
I was in Silicon Valley very recently that was a big buzzword where people were saying,
you know, they don't want to walk into a hotel and get treated like a number, they want to
walk in and have their favourite music playing and their favourite bottle of wine waiting
for them and their bed made in the way that they liked and their name personalised on
the card so they really do feel like a good customer and a guest, so there are big trend
is towards that stuff; digitalisation, which is an area I know a lot about and very passionate
about, and certainly we're all seeing, I believe, the effects of the digital age and that will
only continue; sustainability and environmental change; debt is still a big issue for the
world, and off that comes anxiety. There are lots of sort of more micro-trends within that
that you as a business need to be aware of. So to move onto the next slide, I really want
to challenge you to think about the major trends that could affect your business or
that are affecting your industry because if you can kind of anticipate rather than just
react to this stuff, you'll be in a much better place.
So it's hard sometimes when you started a business or created a product and you really
love it and, you know, it's your baby, but sometimes you've just got to make an executive
business decision and realise that things have to change in order to strengthen your
business. There might be even cases where you have to get rid of product lines as well.
So I'd love you to text in if there's something on the screen there you can see that definitely
is already impacting on your business or could potentially impact on your business. If I
were to look at that I'd have to say, let's see, exponential growth and innovations and
inventions. You know, we operate in this technology industry and it's just constantly changing.
I mean, I have to change my slides all the time, I have to do a lot of research to keep
up, so that's a challenge and an issue I have to be aware of.
So let's have a look at what's coming in from you, "Seasonal businesses, too much rain,"
so environmental impacts; just a couple coming in from a couple of people. Please feel free
to text in which of these are impacting on your business too, okay? I'd love to keep
knowing that as I continue. Now, with all of this going on I'm really curious to know
how many of you would like more revenue. Put up your hands if you would like more revenue.
I'd expect to see a sea of hands. There wouldn't be too many people, would there, who don't
want more money? Okay, so the ones that aren't putting up their hands, I'm presuming you
haven't worked out how to put up your hands yet. I'm going to presume that most of you
want to generate more revenue. Lots of people in businesses, to strengthen their business,
they scratch their heads and they go, "How can I make more money? I don't know what to
do about it." I can give you a code and, you know, Queensland
government has actually given you the code and the workbook that has been made available
to you, it's three very simple ways and they're on-screen. You either have to get more customers,
or get a greater value for every sale you make, or you need to increase the frequency
of your sales. Now, in some cases you can get those going on in a multiplier effect,
so more than one of those. But if you were to achieve just one of those you will actually
find that your business is strengthened, it has more revenue. So have any of you focused
on 1, 2 or 3, and have you seen what impact it has had on your business? I would love
you to text chat that in as well. Great. And a few more people have contributed
to the last slide. Lawrence says, "Changes in life expectancy are impacting on him, changes
to family life, Chinese market hurting us on price." "More customers," says someone
else. Okay, and that's Russell, must be replying to my latest question, so he's saying more
customers. Is that something you've done, Russell, or you would like to do and you think
that would generate more revenue? I am interested, but I am also going to keep the presentation
moving, so please do still send it through. Okay. Once you have a customer a thing you
need to know the strength in your business is that it's much cheaper to keep them than
it is to keep marketing for new business. Often we'll sit down with a business and they
will say, "We want a market. We want more business," and we'll say, "Well, that's great,
but what have you done with your existing customers? What's your defection rate? How
many customers are you losing, how often? And they won't actually know those stats off
the top of their head. So this is a little exercise I encourage you to go ahead and do;
work out your customer defection rate. It says here just by reducing that by 5 per cent
can actually increase your profits 25 to 85 per cent, so that's a pretty easy way to strengthen
your business. And if you are losing more than 10 to 30 per
cent, which is very average, then you probably have a bit of a problem. If you're losing
less � it does of course depend on the industry and a bunch of other factors � but you're
doing quite well. So I hope those benchmarks are quite useful to you. But, you know, ask
yourself, "Are your customers happy with your products, services or company?" And, "What
are your strategies to retain profitable customers?" I'd love you to share some of those with us
as well. So here are some customer retention strategies
that are in the workbook that was supplied as part of registering for the session. One
is identifying the timing and frequency of promotions. You know, how often are you going
out there and reminding them that you're there? Think about it yourself; you see a company,
you see an offer, you think, "That's good, I want to do that," but you don't because
something distracts you or it's just not the right time. Unless someone actually comes
back to you with that offer, even though you were totally keen on it, you were really interested
in the offer, you may not have taken it just because they didn't come back to you've the
second time. So make sure you do go out, but there is always a balance, of course, with
not doing it too often. Know your customers: you know, you can do
surveys, you can have focus groups, you can run competitions where you solicit information,
and that can also help you retain customers if you really get to know them. Do the unexpected:
I always think of Richard Branson when I read that one because he's always doing crazy stuff
and customers loved him for it, for being outlandish. That may or may not be your strategy
or your personality, but, you know, sometimes sending them an unexpected card or gift or
note could be a really nice thing. Connecting them to information: that's one of my favourites,
if I see a link or an opportunity I think, "They'd love that," I forward it on, and they
usually really appreciate it. Use partnerships to build retention: who could you partner
with that offers a similar but not the same sort of offer that would help your clients
like your service? So for instance if you were a hairdresser you could partner with
a beautician and do some kind of package offer and that you would both benefit from and you'll
build customers and retain them as well. Use your database to maximise the personalisation
of offers. There's nothing worse, is there, when you get an email and it's, you know,
"Dear Yvette, here's an offer for" � I don't know � "male grooming products," and you're
thinking, "Well, I'm not a male and I don't really want those products." Really it's a
good idea to segment your database and just send out information that would be most of
relevance to them. That can be a bit of work but if you use a good e-marketing system � there
are some to do it � I know we've segmented ours by local stuff. We know Townsville people
don't want to know about Sunshine Coast events so we don't send that stuff, we just send
them the stuff that they're most interested in.
There are loyalty programs; there is delivering a good customer service, that's obviously
key; keeping your company at the top of the customers' minds by using a diverse marketing
mix. They're just a few strategies and I hope I've got your ideas going. And make sure that
you do have a look at the workbook too. Really sit down, maybe with your team or partner,
to go into this in a bit more depth. Now, looking at the screen, who here is familiar
with the 80/20 rule? Raise your hands if you've heard of this, you know exactly what I'm on
about. Okay, there are few hands going up but not so many.
For those of you who haven't heard of it, it is a well-known fact that actually 20 per
cent of your customers � only a small segment � actually give you about 80 per cent of
your business. If you do an analysis on most businesses, that is the case. So to maximise
your profit and do well as a business you need to grow profitable lines and customers.
So really fun � it's actually quite a fun exercise to do and it's one that we as a company
tend to do at the end of each year, is go through our list and classify them into A's,
B's, and C's. So As, we call them awesome, and the way we
classify them � you may like to take our lead or you might like to modify it slightly
to your own business � they are great people to deal with, they're polite, they're courteous,
they respect us, they appreciate us, they spend a lot with us and we get great results
with them. So it's just all in all a beautiful thing. They spend usually quite regularly
with us as well, so they're our awesome customers. They're usually the ones who are giving us
80 per cent of our business. They're the ones we really need to look after.
Then we have B for basic, so they might be customers who have bought from us once or
twice, they're not too bad as customers, but they're not amazing either. They wouldn't
fall into the A bracket, but, you know, usually the B's, we'll keep them on and we can also
work out how can we make the B's turn into A's? How can we get them to spend more or
more frequently? Going back to those things we looked at before, or how can we get them
to value us and our services? In many cases there may be a need for education in that
zone because they really don't understand what's possible, your knowledge, what it costs,
how long it takes, all that sort of thing, particularly when you're in a service-based
industry. Now, C, I'll be a bit harsh here. C sometimes are the clients you actually want
to cull, C-U-L-L. They're the casual clients. They
might have bought from you once and never again.
They're usually the whingers, they're usually the ones that take the longest to pay, if
they pay at all, and they're the ones you really do want to often get rid of, so it's
a case of going and segmenting those and then working out strategies to segment them away.
Some strategies we've played with in the past ourselves is increasing our rates, which they
can't always afford. It's sometimes even going as far as firing them and sending them a letter
and saying, "We just don't think we're a good fit." Occasionally connecting them to someone
we think would be a better fit for them. So there are a few strategies in there. Go through
that process. It might seem like a painful one, but jeez, when you're focusing on the
awesome clients your profit margins do a look a whole lot better.
Has anyone ever done this exercise themselves? Classifying their clients and even maybe having
to make some difficult decisions and cutting some? Send me through a yes or a no or any
comments or raise your hands as well if you like. Dappo says no, he's never done it. Is
it something you think you might do, Dappo? Do you think it could strengthen your business?
"Certainly." Fantastic, I'm glad to hear you've got a tip already today.
Okay. So apart from really looking very analytically at your customers, you also need to look very
analytically at your product or service lines. Now, I know in the audience today we're going
to have very different businesses. I'm sure some of you are product driven, some of you
are service driven, but whatever it is you're selling, you need to ask yourself is it profitable?
And secondly: can it be profitable? Even if it's not now, what would it take to make it
so? Are they likely to grow in the future? And do they form a part of the strategic plan
for your business? How we approach this is we actually got a
business coach in, because like I said earlier, when you're close to a product and it is your
baby it can be really hard to let it go if you've invested a lot into developing this
product and a lot of time and maybe money as well. So we did a number of exercises with
our amazing business advisor and she gave us some terminology, which I'd like to share
with you because it really worked for us. She got us to put our different products � even
though they're services, we're now referring to them as products � into rising stars
category, ones that we think are on the up, there's more and more demand for them and
we think they have a lot more potential to go, so we called them rising stars.
The second category, we had our cash cows. They were our same old-same old, things that
have always performed fairly well but they're not really going places either. So they're
our cash cows, it's where we get most of our cash. And then we had products that we called
our dogs, the products that just weren't making money, that were taking a lot of time, that
were causing a lot of issues in the business, and we basically worked out that the dogs
were the ones we needed to retire. So a pretty important exercise to do. The other point
I'd like to make is that you really need to do this process quite often, depending on
what business you're in. For us, we're a very dynamic business. You
know, one of our products is social media, so within that stuff just changes in terms
of what we're offering and how we're offering it. So you need to � I'm going to steal
a term from Silicon Valley � always be in a state of perpetual beta. Now, beta is a
term for technology which basically means first release, and it's often very minimal,
what features it has, but in Silicon Valley they basically release products or services
just with minimal features and then they're constantly trying to keep them innovative
and update them and change them and make them better and better based on customer feedback.
So it's a really good business model, actually, to try out yourself.
Who's sitting there thinking, you know, you might need to dog some products, or you could
go through that rising star and cash cow/ dog sort of model, or just ask these very
pertinent questions on the screen and that could be a good sort of exercise for your
business. Just to read out some comments that are coming through, and I hope you don't mind
me sharing those. Helen shared she has gone through the A B C principles and, "The customer
was costing us more in time an effort than their overall spend." That's so common for
the C customers. They always take the most time and it's quite scary, isn't it, when
you identify that they're costing you more than you're bringing in from them, so they
definitely need to be cut, don't they? John says he's worked for a company that's classified
customers A B C on net profit contribution and it's good to realise some high volume
customers may be at the same margin and sometimes are at a loss. So that's absolutely true too.
Chandra said, "We recently had to let go of a dog but we were happy that all people using
the service transferred to our cash cow." So there you go, that's a great result and
I bet your profit margins are looking better too. Dappo has made the call that, "Changing
one's products or strategies frequently could confuse clients." Look, that's a really good
call, Dappo. We're probably not suggesting you change your whole product range but, you
know, make small changes, so out of our suite of � we have about 15 products � we actually
only dogged one and we moved some of them into different categories. What was really
interesting to us was that some that were cash cows back in January are now actually
rising stars, so they can switch between categories as well. They can change. So no, I'm not necessarily
saying to do this across your whole product range, but just look at it like that, analytically.
Don't get too, I guess, emotional about it, and maybe even get outside help because that
can help you to look at it analytically. Right, moving on, market trends, there are
lots of different marketing trends that can assist you in strengthening your business
to basically make it last a long time and be profitable. I really want to emphasise
here � and again, I'm coming from sort of a bias point, but I see it work every day
� is the need to digitise and operate a business online and looking to, if you're
not already doing it, online marketing strategies. I can tell you time and time again they do
tend to provide the best return on investment. Now, if you're doing traditional marketing
and it's working, sure, don't change it, but if you're not exploring, at least trialling
online marketing, you really do need to look at it.
Some other sort of marketing trends is we are seeing people on brands rather than assets.
Once upon a time McDonald's was all about, for instance, buying up real estate and having
these amazing assets everywhere, prime real estate, which it certainly still has but its
brand integrity is just important, for instance. I mean, they have had some negative media
recently, as recently as this week, and really your value is in your brand, so making sure
you have a good reputation and people think fondly of your brand and want to do business
with your brand is pretty important too. Customise your marketing rather than talk
to a mass market. A lot of people come and see us and I will say, "Who is your target
market?" And they will say, "Oh, everyone." My answer to that is usually you actually
can't market without a target market. Once you do customise it and you understand your
customer profiles your marketing is much more customised and it actually just hits the mark.
It doesn't mean you won't do business or accept business from other places, but really think
about your ideal client. You can see on the bottom one there, that's
very true, that things have evolved as a trend from a marketing monologue where you're putting
out messages on TV and on fliers and on websites and going, "This is who we are. This is what
we do," to a customer dialogue. And a customer really expects that. It's a two-way communication,
is what a dialogue means. So, you know, things like social media, that's so much better in
lots of ways than a website because on a website, sure, they can fill in a form and you will
respond, but it's not instant; whereas on social media they can write one little message
and you might write one little message back. It's a very dynamic-type conversation, which
is why I'm such a big fan of social media among other reasons.
And on that note, if you're interested in finding out more about social media and its
suitability to your business, you might want to jump on the Introduction to Social Media
workshop we've got on as part of this series, which is happening next Wednesday, same time.
You could also find more products and services that can be sold to the same customer rather
than pursuing market share, so that's about getting the frequency and the value up. And
what else can I tell you? Focusing on the retention rather than the attraction is another
key point, which is a really big thing for this whole webinar.
So getting your marketing right. Look, people come to us as marketing professionals and
they think they just want you to tell them, "This is what you should do and absolutely
it's going to work." Well, it would be nice to be in that position, but the fact is every
business is so different, so what we tend to say is, "We're going to test this out;
then we are going to measure it; then we're going to change it so that it works even better;
and when we've got it right we'll repeat the process." And only when you've been through
that a few times over is your marketing usually working really well. So you've got to have
some perseverance, you've got to ask the right questions, and you've got to be working with
a team that is understanding that process and isn't just going, "Yeah, we'll take your
money, we'll throw up a website, we'll do some spend and we'll just leave it sitting
there." It's kind of a constant process and you should be working with them quite closely.
I've already made the point that online tends to be more measurable than off-line, which
is also why it's a really good thing to use. The other thing is I guess when you say measure;
you really need to think about what is it that you want to measure for your business?
What is the definition of success? So if you were to market and it was to work, how would
you know it has worked? You know, would it have worked because the phone is ringing?
Is it inquiries you're after? Would it have worked because you've got a bunch of online
forms completed? Is that what you're going for, like leads? Would it have worked if you're
actually making sales? So look, it's different for everybody.
So in order to measure, you've really got to have some good systems in place. Google
Analytics is an online statistical and free tool I recommend every business have installed
on their web site. Just out of interest, hands up if you do have Google Analytics installed
and you do regular check it to see how the website is performing, because it's pretty
important that you do have that. Okay, quite a few hands up. For those of you who haven't
got your hands up on that one, I really encourage you to. Google Analytics is like the heartbeat
of your online side of your business, which can give you great insights. You know, it
can show that people are searching for this type of word and landing on your site and
actually making sales, so you know you need to sell more of those things or make that
particular product more prominent on your front page and so on. It can give you great
analysis. What about your CRM or tracking inquiries?
Often I'll say to people, "Did that marketing work?" And they'll go, "No, it didn't work."
And I'll say, "Well, how many inquiries did you get?" And they will go, "I don't know,
a few." And it's all a bit vague. So you really need to get some mechanisms
in place where the staff who are answering the phone or accepting the emails make a mark.
And it can be as simple as: line, line, line; four lines; line through; there are five inquiries.
But you need to have a system to funnel that in. I will admit it has taken our company
a long time to get that right. We were measuring really well online but we were finding the
off-line stuff really hard to measure. But over time through, I guess, bringing this
discussion are that team meetings, I've found that, you know, now they understand the need
to do this and be able to have trends from one month to another of when inquiries were
high, how that translated into leads and sales, so they know that they can hit their targets.
And all of my staff are empowered with targets, which I find works really well as well.
So in short on this slide as a bit of homework, I really encourage you to go away and evaluate
your current marketing activities and the spend and to be able to say how well it's
working and what you might need to do to refine it and keep on with that. It's an ongoing
process, and we are sorry, you don't just do it and get it right and that's the end
of it. Okay, moving on. Pricing. Now, this part is
probably one of the most difficult parts for business. You just don't always know what
the right price is. I know over the years I started off very low and I've increased
my prices. I think we've increased our value of what we can offer as a company. But there
are some other methods on screen that you could look at, if you haven't thought of these,
to get your pricing right. One is cost plus, so that is where you work out what is your
cost on the goods and you add a percentage on it to determine a selling price. So I know
a lot of retailers, for instance, might increase by 100 per cent. However, I was talking to
a fashion outlet and she was saying 200 per cent is what she adds onto her wholesale rate,
which I was pretty impressed by. Coffee, did you know, is about a 400 per cent mark-up,
which is why people in the coffee business do quite well, although there are an awful
lot of them in the market now. So that's one method, anyway.
Market based. Some of you are such a competitive market you actually can't choose your price,
you have to see what is being done in the market already and kind of gone along with
that. That is a strategy. Sometimes you can be mindful that that's what they're charging
but still charge more if you can come up with a good value proposition that positions your
business as being worth more against someone else. A way we've done that that I'm a big
fan of, for instance, is business awards. You know, we can say, "We're the best for
that. So we you can go with another company; yes, they're cheaper, but if you look at this
award and our credibility and all of our knowledge over here, we know that we're worth that more."
And sometimes people are prepared to pay a bit more to get the right result.
Skimming. This is an interesting one, where you set the price high and you don't go to
lots of sales but you just go for a higher profit, thus skimming the market. So for some
people, you know, where they have quite an exclusive kind of premium brand, that's really
the method. They're saying, "I don't want lots of customers, I only want a few, but
I want a few that are going to pay me a lot and I'll just work really well on them and
there will be a higher profit margin in that." So that's fine if you get the numbers you
need to achieve that. I guess you'd need to do some forecasts to work out if that is a
viable pricing model for you. The penetration pricing is yet another one,
where you set the selling price low to get customers' interest and to get a foothold
in the market. So there's also a term called "loss leading" that's similar to that where
you basically even take as much of a loss and you say, "I know I'm not going to make
money on this first sale, but once I've got them in I'm going to upsell them from there."
You may remember � and they're still kind of there � there are all those coupons and
things. They're kind of a penetration pricing or loss leading exercise because usually the
give away a bunch of new services to get people in the door and on your database and then
it's up to you to sell them other stuff or make them a repeat client, which is when you
actually start getting the money. So love to know, actually, text me in, what
pricing systems are you using? Any of those on the screen there or something else that
you found works really well to you? Give me some information and I'll be happy to share
it with the others. Russell says his is market-based, so that's probably because you're in a competitive
market, I'm presuming. Jane said hers is market-based, so that's interesting.
See, this is the great thing about this type of webinar, isn't it, because I can share
with you what the others are saying and you can go, "Oh well, I'm not the only one," so
that's quite nice to know, isn't it? Cher says market-based as well. Tammy says her
husband's mechanical business uses the skimming method, so that's interesting. "Penetration
pricing while the business is new," says Jennifer Cooper. That's a good strategy, actually,
when the business is new, you may need to do that. Judy says market-based, it is a travel
industry, so I can understand exactly why you would do that. Market-based, a lot of
you are saying, cost plus and market-based; penetration pricing from someone else; cost
plus used a couple; market-based. There's an awful lot of market-based coming from � and
Sally says, "We're a design, manufacture and sell both retail and wholesale and use a combination
of all four." So out of all of that � and thank you for
everyone who is making comments, it's great interaction to see � I guess hopefully there
are some on the board that you can go, "Wow, I haven't tried that one. Maybe I will," or
also to know, "Ah, that's what it's called, what I'm doing." Maybe you weren't even aware
of that. Or maybe if you are, just to get reassurance that you're on the right track.
Now, one of the biggest mistakes I see businesses do � and it actually puts them out of business
� is discounting, because they start off and maybe things are going so well so they
think by just discounting the price they'll get more business and be better off, but it
turns into quite a sort of downward and vicious cycle, actually, and this table hopefully
explains to you just how dangerous it can be, particularly in economic slowdown like
we've been in for quite a long time, there's lots of temptation to discount to get people
in. I mean, look at all the TV ads you see, "We've discounted this," and, "Today only,"
and they're down, down, down, and 70 per cent off, and it seems unreal that they could actually
withhold that sort of discount. Anyway, if your present margin, what you're
making, is 20 per cent or 30 per cent or 40 per cent or 50 per cent and you reduce the
price by 10 or 20 or 30 per cent, then to produce the same gross revenues your sales
volume must go up significantly. So this is where people get it wrong. The part at the
blue bottom might actually explain it a bit better. If you're operating on a 30 per cent
gross profit and then you did a 10 per cent sale; that doesn't sound like much, does it?
10 per cent, probably a lot of us have done that before. You would actually need to get
an additional 50 per cent to maintain a 30 per cent profitability. So, you know, I discounting
10 per cent you might see more sales going on, but your profit level might actually drop
so you might actually not be worth doing it at all.
If you're interested in this topic, there is a great book I've read on this topic which
I might get Anthony to text through, it's called The Power of Positive Profit, so you
could go ahead and Google that. My brother gave me that book. He's sort of in business
as well and he said, "Read it and you'll never discount again and you'll see why so many
businesses go out of business." So hopefully that's a good little tip."
Distribution. Now, this slide is going to be more relevant to some of you than others.
Some of you don't actually distribute, you know, physical products. Some of you provide
services and you can only distribute � or effectively a certain area, so the likes of
hairdressers, doctors, massage therapists, personal trainers, they can only ever usually
service and local area unless they go online, which is where distribution suddenly got a
whole lot interesting. Did you know there's a crazy stat actually on this distribution?
It's a slight side note, but it is that the number of envelopes being sent by Aussie Post
has of course significantly gone down due to email, social media and other online communication;
the number of packages being sent or arriving is significantly going up because of all the
online shopping were doing, so that's a pretty interesting phenomena to be aware of.
But look, whatever it is that you do do, when it comes to distribution the questions to
ask yourselves are there on the screen: what is the most convenient and cost-effective
way that customers can have access to our products? So just before this webinar I was
looking at a business model of a client who sells sports coaching books and they're very
firm on the fact that they want other people to warehouse those. They don't want those
in their house, they don't want to be selling out a book here and book there, so they're
doing what is effectively called drop shipping, that is where someone else has the warehouse
and posts it out. Now, around the world these massive logistical warehouses are growing
at a phenomenal rate because of the online shopping phenomena, so that's something to
be aware of: if you are physically housing stuff, could it be done cheaper, faster, easier
from there? How can you expose target customers to your
products even though they may not be aware of you? That's also a customer reach thing.
So for instance SEO is one that comes to mind, search engine optimisation: they're are not
aware of you, they don't know what your book titles are called, but they search relevant
words and your book appears, then you have a chance of reaching those customers.
Look, there's resellers, is another distribution model. You don't actually worry about how
you get it to them, you have other people out there selling and then getting it to them.
Warehouse management, which we talked about. Integration: you might need to integrate bundling
with other products to give a complete solution to customers' requirements. So you might require
resellers and you might need technology and so on to do that.
So I want to ask you the question: are you happy with your current distribution and could
you explore new ones? Is there anything else that you would like to ask or discuss in this
topic? There are a few interesting questions coming through and I'd really like to pick
up as many of them as I can so we'll do that towards the end. Not too many comments coming
through on distribution. Perhaps a lot of you are locally based businesses that aren't
doing physical distribution. Okay. Oops, I went to slide too far. Right,
strategy. I can't emphasise this slide another, to be honest. The businesses that do the best
have a good, solid strategy that they review often, that their whole team is on-board with,
and that they effectively implement. It's that simple. So if you kind of in your head
kind of know what you want to do, it's just not solid enough. So you need to put together
a strategy, it doesn't need to be long. I've even seen one-page strategies, which are very
effective. Some of the key questions you need to ask yourself to strengthen your business
are: where are we now? So, you know, what are your gross profit margins? What are you
selling? What's your revenue? How many staff do you have? All of that stuff.
Goals and objectives: where do we want to go? What money do you want to be turning over?
What profit margin do you want? How big you want to be? How do you want to be known around
Australia or the world: as the leading something or other? What is it that you actually want?
What's the end goal? And then strategy is the in between bit: how will we actually get
there? So it's making a roadmap that you can work out exactly how the going to make that
happen. So, curious, hands up if you have a clear
strategy and you could comfortably answer all the questions on screen right now here
today: you're up to date, your rollover it, you know exactly what you're doing. Hands
up. Amanda is feeling confident, so is Jana, and the rest of you are dead quiet. No, we
might have another one; it's a shout-out, Annette and Lawrence as well. Good on you
four people, but out of 68 people that could be better. This is your homework: three simple
questions. Go away and answer it. Do it with the workbook in hand, there are spaces where
you can complete the sorts of questions. And again, it will really strengthen your business.
On that note, you may or may not need some help with business professional. You know,
there are marketing consultants, there are business coaches, and there are accountants.
They can all, with the right person on-board, help you determine your strategy. I've done
a lot of strategic planning and development and consulting in the last six months and
I feel clearer than ever about the strategic direction of our business and I believe if
you were to ask our staff they would also say the same thing. Before, we had a bit of
an idea about what we're doing, but these days we're super crystal clear.
Okay, growth strategies. Bringing your existing products to a new market. So who here wants
to grow their business? Hands up if you are � at start I know you're definitely going
to have your hand up, or if you are at any point at all and you just want to grow it,
that would be a good thing for you. And growth could be defined by revenue, the number of
products you sell, the staff you have, all sorts of things. Great. Most of you want to
grow your business. I would have thought so. So there are a few ways you can do that in
terms of strategies. You can bring your existing products to new markets, is one where you
can grow; or you can develop new products for new or existing markets.
So if you think back to those globalisation Macro mega-trends, you know, there are some
opportunities in there, actually. You can look at it from the negative, which is, "Oh
my gosh, this is going to impact on my business," or you can look at it from the positive and
think, "How can I make this work, business." So on the new or existing markets I did highlight
the point that the growth of the Asian markets, you know, they've got this huge up-swell from
more of them going into the middle-class, more of them seeking international travel
and services of the middle class, so how can you be tapping into that? There's one consideration.
When you're evaluating a new market, though, let's say you did say, "I would like to get
my products into Asia," you need to look at all these things, depending on what the product
is, of course, again. Transportations costs; regulatory approvals; consumer affordability;
pricing. Over there, expected price per unit; respect the intellectual property, which is
a big, big important thing in Asia; legal infrastructure; determining the total customer
base, and so on. So you can read all those things on the screen. I want to highlight
with this, though, that it's a really good idea to get some expertise involved.
You absolutely can and potentially should do this stuff, but in terms of feasibility,
viability, get some professional advice on board. You know, Austrade is of course, if
you're looking at international markets, the government's overall body for assisting companies
to do that sort of thing. Your local council may also be able to assist you with that.
I've just been reading the Sunshine Coast's draft economic strategy and I know that in
there they're wanting to help businesses connect those global markets and to grow in that way
because it would be good for the local economy, so they're all for protecting it.
There can be grants and things available to help you export, so that's something to be
aware of. But look, for you looking at new markets could be taking it from a very localised
business to an online business, which means you can service Australia or even the world
online. So yes, take the personal trainer who just took his local clients down to the
local park and did so many hours a week; but if you were able to offer those services a
Google hang-out or webinar, suddenly things just got a whole lot more interesting. So
there are lots of different growth strategies available to you and I hope I've given you
some ideas on that front. Another thing on the customer side of things
and being strategic about that, we've already talked about the A B C and the 80/20 rule,
but let's look at the customer management on another level, and that is that you probably
have some high value customers with a low payment risk, as in they bring a lot of business
to you, they always pay, that's not a risk; then you have high value customers with high
payment risk, and this quadrant goes round, so every scenario is covered; low value customer
with low payment risk; and low value customer with a high payment risk.
So I'd like you to consider which percentage of your customers would fall into which quadrant
and whether being more conscious of this and planning to move them into other quadrants
could strengthen your business. So for instance, the ones who are low value and a high payment
risk � they don't pay their bills or you have suspicions that their company is not
doing very well � they're probably ones that you want to get rid of because they are
a high risk to you and your business. The ones that are low value but low payment risk,
not so bad, you know, they're not really impacting so much. Any of the high payment risks are
an issue. So you could be offering to do direct debit, payment plans, and really keeping an
eye on, I guess, your overall debt collection; having good systems in place and procedures
to ensure that those are enforced. Any comments on that from the audience there?
Greg says he's re-jigging his now and Russell says, "The strategy is in the hands of my
wife." Russel, you must trust your wife and she must know a lot about this kind of stuff,
I guess. And if any of you are watching this webinar and are thinking, "Oh gee, I'd really
like our company to see this," the rest of the team or partners and so on, these webinars
are recorded and made available to you post webinar too.
Okay, planning for growth and strengthening your business. We're getting into the last
few slides. Key to this is really reviewing your business performance to date. What once
was may no longer be. Just because you have had this stellar product that has performed
for a long time and done really well doesn't mean it will next week or even next year.
And, you know, I guess the stability of business is kind of gone, business as we knew it. Things
change very quickly. Customers like change; trends move quickly; technology drives trends;
there are lots in it, so you kind of need to start to love data. Now, there has been
again a word that has been bandied around a lot lately, and that's big data. What that
basically means is the world is creating data at quite a rate of knots and you as a business
owner have access to this data if you want to. So let's just take Google Analytics as
one example. If you were to put that on your website and if you actually start looking
at it, it will give you insights as to what you could do differently. But if you don't
even look at it, if you don't analyse and do something with the data then there's really
no point in having it. Using that data you can also, from maybe your
accounts and things, use financial modelling to analyse different growth scenarios. There
are different templates available to help you with financial modelling from the workbook
and other aspects of the business.qld.gov.au website. So here's an example on screen. And
I don't know about you, but maths has never been my real strength, so I sometimes look
at spread sheets and numbers and calculations and think, "Oh my gosh, it just bamboozles
my mind," but over time I've definitely rolled my sleeves up and gone, "No, you need to know
this stuff, it's important," and I've just pulled in help where I've needed help.
So I have a fantastic accountant these days, he's very responsive. I'll just say � I
won't say his name, "Such and such, I need you to produce me a spread sheet that will
help me analyse this," because know what questions to ask. And he'll do it up and I'll enter
the data and I'll say, "Does this look right?" He might pick up the odd incorrect formula
and go from there. Or sometimes I won't have the time for that and I'll literally say to
him, "I want to know this. Find it out for me," and he'll produce me some spreadsheets.
I've also empowered my staff to be able to do that. I've empowered each of my product
managers, if you like, to manage that aspect of their business and at any time I will ask
them for reports and ask them to come up with solutions to things that aren't working their
way. When you're looking at growth strategies,
as well as looking back you need to look forwards, so you can use these same types of models
to make strategic business decisions. This one on your screen is straight out of your
workbook and it's basically a financial model for a gym. They were looking at new members
by subscription period, you know, one month, one year and so on. And if they were to, I
guess, increase those by 10 per cent and so on, what would that mean. And so that helped
them do some projections and let their staff know how many new memberships and so on they
had to sell. Not only that, by doing this you can plan for seasonal peaks and troughs.
So if your business � and I've already some of you did say it is � is subject to climatic
changes; you know, in Queensland here we all have rainy season, we all have the Christmas
period which for some is very busy and for some is very quiet. Plan for that. You know,
put it into what you think will happen and whether a project, a strategy, a growth strategy
or so on is viable. Has anyone done this before or does this themselves
and/or do you have help? Who do you get to help you with this kind of stuff? Elizabeth
said, "We're in a period of major refocus with potential for key revenue stream to dry
up. Doing lots of analysis around costs and using online marketing to seek to expand into
new markets." So that's great, looks like you're using a lot of the strategies we've
shared. Elizabeth says, "I do a lot of your financial modelling in a fair bit of detail.
I'm an accountant." So you're the opposite to me, Elizabeth, aren't you? You love this
sort of thing. And I love people like you that love doing it, so I surround myself with
great people that I can call on. Like I said, just ask the question and they'll do it or
give it a go myself and get their professional opinion on who it's working.
Kelly said, "I do this as part of my yearly planning and adjust each quarter, depending
on what has happened." Really good idea. And look, depending on how competitive your business
is and what sort of market you're in, you may need to do it more often than yearly.
Some of you, yearly is fine, some of you might have to do it really quite regularly. All
right, in the interests of time we'll push on.
Cash. Cash makes the world go round. Cash flow is key to business. And there are pretty
much two reasons why most businesses fail. Did you know that? Just two: either growth,
they don't grow fast enough or they grow too fast, either too fast or too slow; and cash
flow or the lack of it. So sometimes, you know, they've actually won
the business, they've billed the business, but sometimes the company actually hasn't
paid them, therefore the cash is tight and they can't pay their bills and they can go
under from that. I saw that happen a fair bit in the downturn. You know, people made
out like there wasn't enough business around. In lots of cases I saw there was, it's just
that people weren't paying their bills. So if you have got a strategy in place to your
changing marketplace, once you've got that and your financial models we've been talking
about, then you have to develop and put in place policies and actions to service that.
Most businesses, the cash flow goes something like this, though I do appreciate it will
vary depending on whether you hold inventory and so on. Most people, you know, get some
cash in from � and payments to buy their raw materials, they produce the goods, and
then they get the customer payments, which is the cash, that they create more items with.
So you do need to think about ways that you can get this in faster, more effectively,
to get more cash up front and all that sort of stuff to keep this cash flow going, because
it's a pretty important part of your business, as I say.
Here's another way of looking at the typical process: usually an order is received; the
value when the sales order's value is fulfilled; the invoice, when the invoice is issued; and
collection. So your challenge today � another bit of homework � is to go away, have a
good, serous think about how long each of the processes takes in your business and whether
they can be sped up. I'm going to boast a little bit just now: we use an online account
system and it has been revolutionary to our business. We implemented it in 2009 so a lot
of people are just getting into these online account systems now, but we have maintained
even through the GFC about a nine or 10-day average payment time.
Now, we work with hundreds of clients. Our average value per order varies greatly from
a minimal $60 to, you know, five and $10,000, but the reason we've been able to achieve
that is we have this debt collection system that automates a lot of the process. So how
our process goes is we estimate, we invoice, we always do a minimum 50 per cent up front,
and then there are intervals at different times depending on the project. We always
get the total money in before the value is provided. So let's say it's a web site, the
web site does not go live until full payment is made. The printing does not get sent to
print unless the full payment is made, because it's always � always those clients who say,
"I'll pay you. Please let it go. I'm on a deadline," that rush you � that don't pay,
in my experience. Anyway, once those invoices have been issued
we have an automated system that we say, "Our payment terms are seven days," and it issues
them at seven days and says, "At seven days it's due." And then at 10 days it says, "It's
now overdue," even though it's only three days later. They get four messages within
a month, and that's without any human interaction or anyone remembering to do it. From my point
of view there's too much error if you leave it to the accounts girl to manually remember
to do it and manually email or call them. And with this you have a record. So our system
is four automated messages; after that the accounts girl does hit the phones. She gives
them basic warnings and after that it's pretty much straight onto the debt collection agency.
So it's a pretty swift old process and as a result of that our debt collection is very
good. That's a system you may like to look at improving. It can dramatically improve
your business. Talita is asking me, "Is that Xero?" No, it's
not actually Xero. We do use Xero but we use it for our BAS and accounting requirements.
We actually use another one called FreshBooks that does the automated reminders. We would
love Xero to get those into place but they don't have them just yet.
Speeding up receivables. So here are a lot of ideas again direct out of your workbook,
which you can refer to. I've already alluded to this, send the invoice as quickly as possible.
You know, these crazy businesses that wait till the end of the month to bill, you're
going to take another month to get the money. Bill in the day it happens. Another strategy
with the technology that is out there now is to empower your sales force and empower
all of your staff to be billing. Why should one person in accounts be the biller? Why
don't you have the guys on the road doing the sales with their iPhone or iPad actually
raising invoices, which feed back into your home base or online system? That's totally
possible, it's just about getting the right system for your needs.
Don't hesitate to use debt collection services. Some people feel bad about doing that but,
you know, this is the cold, hard truth: if a company has contracted you to do the business
and signed off an agreement, you have all of that in writing, and then not paid; you
know, you've given them the value, they should absolutely be sent to the debt collectors.
So don't be too � I guess, what's the word � shy about that. Keep records, including
clients' reasons for slow payment. We have a CRM where every interaction with the client
is logged. So say our accounts girl decided to stop or
couldn't come in because she was sick, if that client rang up, any of our staff could
look at their client record and see exactly what they said, when they said it, and we
could keep the process going. Down the bottom there: aim for partial payment where you know
that the customer may be experiencing financial pain. Having said that we're pretty tough,
we do have a heart and if a client communicates with us and lets us know what's going on,
we will usually negotiate. We would rather have money in than nothing in, so that's a
principle you may like to adopt yourself as well.
Some people do discounts for early payment, so if they do it within seven days, 5 or 10
per cent off. That's another strategy. We do, for our hosting bills, because we were
finding there were small amounts of people were paying them: pay up front for this year,
get 10 per cent off, and pay up front for six months, get 5 per cent off. That certainly
got a bit of traction as well. Look, there are a bunch of other options on there. You
can implement what works for your business. It is an important area, though, again worth
spending a bit of time on to improve your cash flow and strengthen your business.
So you can also improve your cash flow through accounts payables: not paying them the moment
they come in but paying them nearer to the due date. Inventory: not carrying too much,
I see particularly perishables, you know, things like cafes and that, you don't want
to have all this food that's just going to go off that you're going to chuck out so try
and get a feel for what goes on and go with the ebb and flow of that. Supplier relationships:
you know, can you negotiate better terms? Have you been doing a lot of trade with a
certain supplier and can you get a lesser rate? It is worth asking.
We had that discussion on Monday at our team meeting and I said, "Gosh, this company, we've
been working with them for years. When was the last time someone picked up the phone
and said, �Hey, we put a lot of business through you, can we get a bit of a discount,
please?'" So that's now on their to-do list this week. Factoring in debtor finance is
another option; inventory finance; production warehouse finance; and just generally getting
your operating costs down. You want to all run lean, mean machines when it comes to your
business, so just look at all your expenses on a regular basis.
I actually sit down and physically go through them with my bookkeeper every month, we have
a scheduled appointment. I'm a bit of a Donald Trump � apparently he does this too �I
look at every single line item and I work out what has been spent and I pick up on stuff
that is unnecessary and find ways to remove it. Sometimes there has been costs incurred
by other staff that really shouldn't have been, sometimes there is recurrent stuff going
on that you can eliminate by putting in place other tactics. So that is also a good tactic
to improve your cash flow. Now, just two more major points to make, they
are the people, the lifeblood of your business. So look, productivity, we all want our staff
to be productive, but actually realising that is a whole other thing, which you will all
probably appreciate if you have staff. We've been doing a lot of work on this lately and
again, I'm very frank and open to say it's not easy. What we've done is make them all
keep time sheets online and we're reviewing those each week to say, "What did you actually
do and what did you actually bill?" So it's actually very open and people can see what
value they're contributing to the company. Communicating with your staff is key. I was
really impressed when I was in Silicon Valley. Mark Zuckerberg � you've probably heard
of him, the founder of Facebook � he has a massive courtyard and 3500 staff and every
two weeks they have a meeting in that courtyard and he communicates with his staff, him and
the other management, and they're very honest about what's going on, the good, the bad and
the ugly, and it's basically their way of being transparent and saying, "Don't believe
the media, we'll tell you firsthand what's really going on." And he actually encourages
them to come with a point of view and challenge what he's saying. Like, they'll ask questions
and if they're not challenging enough you'll say, "Come with a more challenging question.
Is that all you've got for me?" So that's something you can learn from Mark Zuckerberg
himself. Motivating your staff, incentivising your
staff. No good just buying them movie tickets if that's the last thing they want. Ask them
what they want and give them prizes, set targets. Alliances and partnerships: leverage people
by getting other good people around you. You know, when we cut a deal, like we get an accountant
on board, we don't just get an accountant, we also look for ways that we could be supplying
them business and they supply us business and all of that. We always think quite broadly,
so consider that for your business as well. Most people, I find, they're very, very open
to that. Look, there are a lot of costs associated
with employing employees, which I know only too well myself, and a lot of you will be
well aware that superannuation costs are going up, they've just gone up 0.25, you need to
pay your staff a minimum of, I believe, 9.25 per cent now, but ask your accountant that.
And it will be going up to as much as 12 per cent, so you need to factor that into your
cash flow. Annual leave, long service, termination, there are all sorts of things. So if you don't
understand what they actually are, sit down and go through and get those costs. I found
a really good exercise is just going through and going: every single week, what are the
costs associated with staff that we just need to have in the bank to do? And going from
there. Also on the screen, regular meetings: I'm
a big fan of those. We have them every week of a Monday, we call them a focus meeting.
They're are short, they're half an hour. I find people come in from the weekend and there
are just as much benefit for me as they are to the staff, and we basically go around the
room and say, "What have you got on this week?" So it's a way of communicating to each other,
negotiating on priorities, and for me to let them all know what I deem priorities as the
CEO as well. Set goals and make them accountable: that's
something we've done. As I said, we have product owners, they have to report quarterly on how
their products are performing and they just have a few headings, they have to do a little
summary, they have to do achievements in that quarter and issues, and then basically show
their financials. So it's a one-page for each one, it is not too gruelling but it's a great
way for them to reflect and review what is happening and hopefully get fired up to go
forwards. I could go on about some of these other points but I'm very conscious of time
so I'll make sure that you do refer to the workbook to get some more out of that slide
as well. Systems are another very important way to
strengthen your business. My mantra on this is basically work smarter, not harder. So
basically go through and consider how adopting technology could assist you in creating a
competitive advantage. I can tell you right now people in your industry, whatever it is,
are adopting technology. So if you do not you will be at a disadvantage because they
will be doing business more efficiently, more effectively than you. Now, there are so many
technologies you can get and they don't have to cost you an arm and a leg. They're not
necessarily for the big enterprise companies now. Even if you're very small and your budget
is very minimal that our excellent solutions out there.
As I alluded to, we've been fully Cloud since 2009. It pleases me to see so many companies
starting to look at that. Some of them are doing it gradually, some of them are going
boots and all. But look, if you want to sell online, you can and you should. You want to
track what attractions you have with your customers, there are ways to do that without
too much extra work. Accounting and knowing what resources you need, that's possible.
If you run a fleet of cars or other vehicles you can do that too. Online project management;
communications; storage, there are so many ways that you can get these systems to help
communication and flow and just getting things done. So go through and consider what technology
you might need. Just because you've always used a certain system and even, dare I say
it, because you've invested a lot of money into one particular system, doesn't always
mean that it's serving you now. You know, I did a systems audit for a company
not so long ago and they'd invested about $20,000 in thing about two years ago but basically
two years is a really long time and there were the better systems that could service
them better and so we implemented something new for them that has already improved their
cash flow and effectiveness. So sometimes spending more might be a bit scary, but as
you can see on the bottom, you've really got to consider the commercial costs of not investing.
If you weren't to invest, how much is it going to cost you in the long run due to lack of
productivity and so on? So take a good look at those.
Your business value: if you are to do all of these things I've been describing in this
webinar you actually have a pretty good shot at increasing the value of your business.
So you need to just work on it and not in it all the time. Basically everything I'm
suggesting is working on it and not in it. It's very hard to do if you are purely on
operations, but you know, give yourself � may be block out a half day a week or, you know,
work late one night or get up early one morning and start looking at the stuff, because if
you do you can really improve your business. Now, the value of a business, if you were
to sell it tomorrow, they're going to be looking at things like the profit margins and whether
they can be improved; the stability of the business; its competitive edge; the maturity
of the industry; how reliant the business is on the current owner. So if you were to
get in place some of those systems that will make the business perhaps less reliant on
you, that's going to help. It's going to help you get a competitive advantage; strengthening
your business through some of the things we've done will make it more stable and hopefully
make a profit margins bigger. And also some that people don't always think
of, size of the database. If I was to buy up your business I'd certainly want to know
how many names am I buying and how active are they and what details do you have on them
so I can market to them; what systems do you have in place and what trademarks or brand
value do you have? Is it a well-known brand? Is it trademarked? Because if it is, that's
worth a whole lot more. So have you considered how you can make your business more valuable?
Are you taking any steps in these areas? I'd love you to text in what your thoughts are
on making your business more valuable. Cool. On to forecasts. You also need to ask
yourself, "What is our company worth today? How can we fund our growth? You know, do you
need loans? Do you need some investors? Do you need to sell part of the business? What
are your options? Should we purchase? What's your next venture? Could you buy something
versus build it in terms of software and systems, and other items? And do you have any acquisition
plans? You know, in Silicon Valley they're doing all of this very much so, and that's
why they're doing so well. There's a massive venture capital sort of market, there's lots
of angel investing. They are acquiring companies, they are purchasing, they're doing all sorts
of stuff. So, you know, when you're a small business
it's hard to think this way if that's where you're at, but you do have options. You've
got to keep a nice open mind and basically do what you're doing. Get information on board
so you can make really great decisions. Great quote down there from Edward de Bono, very
famous man, of course, "You can analyse the past, but you need to design the future, and
that is the difference between suffering the future and enjoying it." Because if basically
you don't make changes, you will suffer in business, because business as we know it is
completely being changed.
Finally, risks. Even if you do all of this you don't want something to come in and sweep
you off your feet hat you didn't expect. So I guess with risk you've got to look at how
likely is each one to occur; how strongly is it likely to affect your business; and
how can you mitigate against it happening now? We're actually doing a session that goes
into risk in a lot more detail. Business continuity planning is the topic, if you'd like to jump
on and register for that one coming up in the next few days as well.
Right, in summary. We've covered a lot of ground. I feel like this is a pretty content-heavy
webinar and I really am available for questions now but I'm pretty sure we've gone a bit overtime.
A business must be customer-centric; we've talked about that. We've looked at some trends,
and I encourage you to go off and look at other trends that could impact on your business
and work those into your strategy. Look at ways you could generate more revenue, grow,
improve your cash flow; what could you do differently with people to strengthen your
business; and what systems could you implement to strengthen your business? If you just look
at some of those key points and actually implement them, you'll have a really good shot at strengthening
your business. So look, I've referred to the workbook a lot.
There are probably quite a few answers to your questions in there, but let's go back
through and answer some of the questions that have come through on text message. I'll get
Anthony to alert me now to the ones that he hasn't managed to answer, and we may even
have some time to un-mute some of you and answer some questions too.
Okay, so first one. He's got them all queued up for me, he's very good. Lyn says, "I'm
wanting to sell icing decorations for cakes. I've not started the business yet. I'm wondering
how I would set a price on such items." Okay, so good point, Lyn. You probably want to refer
back to that pricing slide and/or look at the workbook, but you've got a few pricing
models in there. Probably the most straightforward one is that cost-plus model where you basically
work out: what are my costs to produce these cakes? So you'll have to look at the ingredients,
your electricity � what else would there be � telephone, Internet, things you need
to run that business � and then what all those costs are. So it might work out, let's
say, $2 a cupcake. Then you might say, "Right, well if that's the case I need to make $5
a cupcake because I need to make $3. I need to sell this many cupcakes and therefore that
would make me enough to get a wage out of it," if that's what you're trying to do. So
I hope that sort of method would help you. You may want to go and sit down with a professional,
an accountant, to actually nut out those figures, because sometimes it can be hard to think
of all the costs you'll have and work out how much that then translates into a per unit,
but accountants and other professionals are usually pretty clever at that.
All right, Kelly says, "Is there somewhere you can go to find out more about drop shipping."
I would just Google it, to be honest. There'll be lots and lots of stuff on line. No one
sort of portal comes to mind for me. I mean, Amazon is a big drop shipper, so you can actually
sell your stuff through them, potentially, but I would just literally Google around and
perhaps even go onto some of the Facebook groups. There's one called Queensland Business
where there are 3000 very active businesses in Queensland, and you may like to ask them
that question. I'm always amazed when I pose questions to stuff I don't know much about,
but there's always some expert lurking in there and usually some great links and things
to go and have a look at. So I'll go actually up to Sarah. She's given
a great tip here. She, for some of the business planning templates, went to business.qld.gov.au
and used them to cash flow her personal finances, "Which was a slightly different purpose, but
it worked well for me." Thanks for reminding me, Sarah. There are lots of really great
templates on the business.qld.gov.au web site, which I'll get Anthony to text through. We
do feature it on the last slide as well, but I encourage you to go through and have a look
at those as well. Kelly says, "Do you have any recommendations
of CRMs?" I'm always a bit cautious, Kelly, in recommending systems because there are
so many out there and they all vary in their price point and their features, so here's
my recommendation: you go to look at them and you click on two pages: number 1, features,
what does this thing do; number 2, price point, can my business afford it, do I seek the value
in that? Having said that, we do have a page on the Creative Collective, it's called Technology,
where we list a bunch of systems that we really like and/or use or recommend. One of them
on that list, you will see, is one called Capsule. It's quite an affordable CRM. There
are a number of others, though, so encourage you to go across and have a look at those.
John says, "Re the People section, do you guys do regular performance reviews and an
annual or half-yearly formal performance appraisal, not just sales, financials, but also behavioural?"
Yes, John, we totally do. My brother is in HR and he, I guess, has been guiding me through
that. Had I not had a brother in the HR I don't know if I would have. We do quarterly
performance reviews and they are a bit of a chat, not very formal. I'll basically ask
wide open questions like, "How are you liking working here? Anything I can do to make it
better?" And open up the lines of communication. It's a chance to have a one-on-one, it's a
chance for that staff member to tell me any concerns or for me to understand where they're
at and what possible training they need, skills development; also where they want to go and
try and offer those career options, so yes, we do.
We also do an annual more formal performance review. For those we may bring in an external
HR advisor. We do give them ratings for each of their items on their job description out
of four. It's kind of like a report card. The feedback we get is a lot of staff have
never actually had a performance review before working here, and then for those who have,
certainly not to the detail we give it, but we find them wonderful. I find them really
valuable and I think the staff find them good feedback and a good opportunity to have some
open communication about their behaviour, performance, et cetera. So yes, absolutely,
very important. Okay. Wendy says, "Can you or any listeners
recommend an online project and task management system that you are using or have used for
a small business?" So very similar answer there, Wendy, to the CRM one. I know lots
of online project and task management systems. In terms of finding one that suits you, though,
you'd have to look into it. Again on our technology page we do list one, Basecamp, that we use
and love, but whether it's suitable for your business, I don't know. Have a look at it.
There are lots of others around. I really should add to that list, actually, because
I know of a lot of others but I just haven't managed to get them up there yet.
John said, "Agree with your positive comments re an effective performance appraisal system."
Yes, pretty important stuff. Right, we'll just have another look through. Rob has offered
up, "Google have an open source CRM as a starting point as it's free." So there you go, that's
a great tip. I'm just going through the list. Tammy says, "I have a water carting business.
I deliver bulk water for residential purposes. Finding fliers are working but I've tried
Facebook but I'm not sure how to get more sales on line. Any ideas?" Tammy, that's a
big question. We're actually running a webinar on attracting new customers in the coming
days, so encourage you to register for that and it will give you a whole hour on how to
get people to buy from you, come to you for business, so you might find that useful
Any other questions? Matthew says, "Is anyone doing Fulfilment by Amazon?" So he'd like
to throw that out there. You can feel free to text chat that in if you are. Okay. Chandra
has offered up, "TeamworkPM is good for project management," so there's another one to check
out. Okay. I might just now � put all your hands down and I'll ask if any of you would
like to ask me question, to just raise your hand. Okay, we've got Leanne with her hand
up. Just un-muting you now. Hi, Leanne, did you have a question?
I didn't, actually. I didn't. I just notice � don't worry. I thought my hand was up
so I was putting it down. Okay. No worries. I'll just mute you again.
I'm looking up and down the line. Doesn't seem to be any more questions, so we will
wrap it up. Look, I've alluded to the fact that Queensland government has some really
great resources. First port of call should be their business.qld.gov.au web site. They're
now very much on social media, so if you haven't already Tweeted, a reminder, you can Tweet
them at @businessqldgov, and don't forget to use the hash tag #qldbiz and tell everyone
on Twitter what you thought of today and we'll re-tweet. Thanks for joining us today and
we look forward to having you back on a future webinar.