November 19th 2008
The first step in designing your ad campaign is to define your customer. You need to be very specific about the age, gender, marital status, geographic location, religion, political affiliation, occupation, educational level, and so on so that you can buy the proper ad placement. Continue Reading »
October 29th 2008
I’d say now is the time to take a careful look at your personal development program. Are there ways it can be enhanced? Every day, you are either learning or deteriorating. You are either closer to or farther away from your goals. Learn to model the best in your field. Find those who excel in your industry and benchmark what will work for you. Pay the price to become an expert in your field. Continue Reading »
July 11th 2008
You probably have several stationery stores. People hoard paper, stationery and office sundries. Get them to have a big turn-out, and see how many pens, pencils, rubbers, clips and stapling machines they are hoarding. Then collect everything together and put it back into your office stationery stores. The same applies to letterheads, envelopes, photocopying paper etc. You could quite easily find that you have one or two months’ stationery purchases in stock around the offices, plus another two or three months’ in the stores. So why not get it under better control (you may even find you don’t have to buy stationery and sundries for a couple of months)?
Some companies leave stationery buying to a secretary or senior clerk. However, there is much more to buying than placing orders with the same supplier. One of your buying staff may make a sizeable impression on your purchase prices, obtaining competitive quotations and considering contracts with large quantity discounts. Continue Reading »
July 10th 2008
At some point you may receive a bill for legal costs that seems staggeringly out of proportion to what you had originally envisaged. Unless you keep a close watch on the situation you may find that, having put a certain matter into the legal system, the various aspects that can be pursued soon add up to a heavy bill. Having started on this process, it may become difficult to back out, with the result that, what was at first deemed to be a fairly minor exercise develops into a campaign, each stage of which incurs more cost.
So, we should judge the merits of taking legal action or of using the services of the legal profession in the same commercial way that we would purchase other goods or services for the company. Unfortunately we don’t usually do this because we just don’t know what is going on behind the legal scenes. Consequently, we tend to accept professional charges as being fair for the job carried out, relying on the solicitor or lawyer to invoice according to the time and costs he incurs on our problem. Continue Reading »
July 8th 2008
Large-scale production brings certain economies with it especially in times of stability or growth, but in periods of retraction large-scale facilities can be too costly. Ensure that establishment costs are affordable for both high and low levels of activity.
Firms often work with facilities which have grown over the years as demand has developed. But are they what you really need now and for the future? Assess your ideal facilities objectively and compare them with what you have at present; you will at least have a picture of the changes you might make. Continue Reading »
June 27th 2008
Your pricing policies are first and foremost intended to result in a profit for your company. There are several instances where an adjustment in price can achieve a particular objective, such as:
You should always proceed with utmost caution and remember that the main objective is to achieve a profit for each and every item you sell. Continue Reading »
June 12th 2008
My business plan should include how I intend to approach the complicated issue of advertising. The issues that should be addressed include:
It’s the rare business that can build beyond a meager beginning without advertising. At the very least, most businesses should have a presence in the Yellow Pages. At the other end of the spectrum, entertainment firms such as nightclubs or movie theaters have to spend a good portion of their start-up money getting out the word that they’re in town. Continue Reading »
May 11th 2008
Each month or quarter you should be determining the company book value. This is the net worth figure on your financial statement. It’s the difference between your total assets and total liabilities using all the rules of accounting and taxation. As you’ll see, this has very little to do with the actual worth of your company.
You would only rarely want to sell a successful business for less than liquidation value. You might do so to provide continued employment for loyal staffers, or some types of deals might include your continued employment or the receipt of certain royalties unrelated to the sale price. You arrive at the liquidation value by adjusting each asset to take into consideration its real value, as opposed to its book value. Next, you adjust liabilities to account for any amounts that aren’t going to be realized. Finally, there’s a cost of liquidation. Let’s look at all three for some examples: Continue Reading »
February 20th 2008
Do you plan to hire a sales force? Or use sales representatives? Or telemarketing? Or direct mail? Or retail outlets?
The answers may seem self-evident, based on your past experience or your knowledge of your industry. Celestial Seasonings sells its tea through supermarkets and other food retailers. Pizza Hut sells its pizza through freestanding fast-food restaurants. And People Express (now part of Continental Airlines) sells its tickets primarily via travel agencies, airport ticket counter locations, and over the phone.
Increasingly, though, creative entrepreneurs are looking for alternative sales approaches. Thus, a Boston-area maker of stereo products decided to avoid the traditional retail outlets and sell a new compact stereo system door to door with its own sales force. The firm avoided the crowded retail shelves and kept margins higher than discount-minded retailers will allow. A number of distributors of women’s clothing have been extremely successful selling via direct-mail catalogs rather than through traditional retail boutiques. And Home Shopping Network became very successful selling traditional department store goods through a nonstop television show. Continue Reading »
February 8th 2008
When your largest customer dominates its industry, you can expect to share in its good fortune. This is self-evident to the executives at Keystone Foods and J. R. Simplot, two privately held (hence unranked) companies that supply McDonald’s restaurants in the United States with, respectively, meat and potatoes. They are among the many suppliers whose fruitful collaborations with the fast food chain have lasted decades, after starting with nothing but a handshake agreement.
When customer and supplier interests are so intricately entwined, the concept of teaming up with customers assumes another dimension in addition to those we have discussed thus far. As a result, my fourth strategy for winning collaborator customers calls for more than specialized expertise and a close relationship. It entails a radical commitment—not easily reversed—to joint success. Here the primary emphasis changes to the physical and strategic interlocking of the supplier’s and customer’s businesses. Continue Reading »
