Do Business Well

My business plan should include how I intend to approach the complicated issue of advertising. The issues that should be addressed include:

1. How much will I budget for advertising the first year?
2. What basis will I use for determining your budget in the second and ensuing years?
3. Whom do I expect to reach with my message?
4. What advertising media will I use to reach my audience?
5. What message do I expect to convey with my campaign?

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 »

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Accounts receivable aging. If you allow your customers to purchase from you on account you will find that not all of them pay you according to terms. In fact, you will likely end up having some customers who take quite a while to pay . . . if not forever.

To track the quality of your customers‘ payments and as an aid to your collection effort you will want to produce an aging report of your A/R. Generally, it will look like this:

By spreading your receivables in this way, you get a picture of your situation with outstanding accounts. ACME, Century, and Falcon are probably okay. B-One needs some attention, but Dave’s is serious. E-Plus is a bit past due, but it is a small amount. The situation with Dave’s has even caused your entire aging to be skewed. It is very serious indeed to have 37 percent of your outstanding balances in the ninety-day column. Continue Reading »

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Another important aspect of the change in your company from survival oriented to management oriented is the way in which you establish goals and monitor them. The following questions are designed to take you through a process of developing a new set of goals for your company:

1. What do you want the company to do for you in the next twenty years? Ten years? Five years? Twelve months? Are you primarily interested in the income stream that can be generated? Is wealth building as opposed to income generation your most important desire? Possibly you’d prefer a lighter work schedule, even if it meant less income. Will you be happy if you aren’t growing? Is it a high priority for you to broaden markets?

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ASSET VALUE

For most companies the asset value should represent the lowest amount below which the owner might just as well liquidate. There are only two differences between asset value and liquidation value. In calculating asset value you don’t have the costs of liquidation and you can be more generous in appraising certain assets than you might be if you had to liquidate.

INDUSTRY STANDARD VALUE

It’s common in many industries to have a valuation method. Travel agencies are generally valued at ten times annual commission. Manufacturers’ reps, on the other hand, are generally only worth one year’s commission. Magazines use a certain number of dollars per subscriber. Manufacturers might expect to get between two and ten times annual earnings. Continue Reading »

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The reality of good promotional activities is that they take time. You can’t just leap out of bed and decide to have an 80-per-cent off sale when you get to work. Planning four to six months inadvance is about right.

This way you can do a little each day and have your Mother’s Day promotion, for instance, run smoothly, with time to spare to fix up the bits you may forget, such as the window notices, ordering envelopes or mailing your best customers for a preview day.

If you do a little each day it does not break up your normal working day too much and adds another interest to your life. Why not use the Saatchi & Saatchi three-month cycle for promotional activities? You could plan to have four similar promotions for your client and prospect base each year. Your planning processes would become quite repetitive and therefore much easier to do. Continue Reading »

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This depends entirely on your application of the basics. A small network will be up and running within three to four months, providing a moderate return. A large network with a big customer base requires a few years to develop. Exactly what you achieve depends on the effort you put into your business. It is almost impossible to indicate how successful you will be. The figures that follow illustrate the type of results that can be achieved.

How much work is required? If you make contacts telephonically, you may have to make 200 to 250 telephone calls to get 20 distributors. Of these, a quarter will be active hunters for more business and the balance will be product users giving useful word- of-mouth recommendations, but not actively searching for business. Continue Reading »

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Bill Ashton, vice president of corporate accounts, explains how educating doctors and nurses works: “We have what we call an Anemia Management Institute, where we train nurses and health care providers to be better at everything associated with managing anemia of a dialysis patient,” he says. “For example, when you go into a dialysis center, and the patient’s hematocrit [the ratio between red blood cells and white blood cells] is not going up as it should be, and you are increasing the dose, what’s the cause of that? Well, it may be they have an infection. It may be that they’ve got hemorrhoids and they’ve got bleeding. They may just be nonresponders, and they have low iron levels—we’ve done a lot of research around that particular area. In fact, we have almost written the book on quality guidelines about how to treat anemia, basically through our own research and our own data-bases. So we’re actually training nurses—we put them through a two-day training program that teaches them how to treat the anemia better.” Continue Reading »

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