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| Bert is the brains of the website, he gobbles up information and then - using his number crunching mathematical formulae - he'll set you on the road to a better business future. |
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| Money: Making It and Saving It |
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| Making Money |
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It may surprise you to know that the UK is the world's fourth largest economy. We also have the highest proportion of small and medium sized businesses in Europe. We now have 1.8 million VAT registered businesses in the UK. The growth in GDP is also the highest of the major European economies. So the environment for UK business is thriving. However, there is considerable variation underlying the statistics and major differences exist between the top 25% and the bottom 25% businesses in all major areas measured. (You can find out more on this in the Knowledge bank and from your Bert report). So why the differences? Here's my personal view.
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| Customers |
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We are all customers. Here's a little exercise for you to do when you have a couple of minutes to spare. Close your eyes and think about the last poor shopping experience you had. Imagine going into the store. Remember what it looked like, how you felt at the time and what you heard the salesman say. Stay there in your thoughts for a minute and really live the experience.
Now ask yourself a question: Was the product the problem or was it the way you were treated? Nine times out of ten, the product isn't the problem. In fact I'll bet you went somewhere else and bought the same or similar thing. It's the way you were treated that made it a bad experience for you.
Now put yourself in your customer's shoes. What sort of treatment do they get from your business? Do you ever ask them? How do you handle complaints? Let's face it, there are very few products that don't have competition and even fewer that sell themselves. What makes the difference is how you deal with your customers. Surprisingly little market research or advertising is undertaken by smaller companies and I'll bet that those who do the least are also at the bottom of the UK league table. The first thing to understand about making money is that you need customers. The more you know about them the better.
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| Making more money |
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When it boils down to it there are only a few simple (legal) methods of making money. Selling stuff to other people, investing and gambling. The last two might even be combined! Assuming you have researched your customers, made them aware of your product and service, and got them to buy from you at least once, how do you make more money? Keeping it simple, there are a few ways to do it. Find more customers, sell more to your existing customers or increase your prices. Keeping more of what you make is covered in the next section.
Happy customers will usually buy from you again. They may give a good testimonial to people they know and bring you referral business. There are ways to increase referrals by providing information and incentives. Carefully targeted direct mail and websites are cost effective ways to bring in new business. Telephone sales campaigns are still useful but make sure you comply with the new regulations regarding this type of contact.
Take every opportunity to maximise each customer's potential. If you have several offerings, always make sure that you understand enough about your customer to offer them something else interesting. Have a look at some of the better websites…they always offer further opportunities to sell you something else by logging your preferences. It's a tactic that non -e-commerce businesses would do well to copy.
Have a good look at your processes for customer quotes. Do you always call to follow up a quote you have made? Often this is an opportunity to tailor the quote to the customer needs and steal a march on the competition. In terms of pricing, make sure you are valuing your product or services correctly. Check the competition. If you are charging too much or too little it will affect the volume you sell.
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| Saving money |
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It is sometimes easy to get carried away with making money and pay less attention to what you are spending and what you owe. According to the Department of Trade and Industry statistics, far too many companies fail the acid test. The acid test compares the value of liquid assets to the value of current liabilities. If the ratio is less than one it means that the company does not have enough liquid assets to cover its current liabilities. Over 25% of UK companies are in this position.
Making sure you have the right business infrastructure and a good accountant are critical to making profit i.e. making more money than it costs you to sell stuff to people. The productivity of your business has a whole raft of variables associated with it. (Check some of them out with Bert). If you have the right people and processes, you will ensure a level of productivity which will keep your profits at a reasonable level.
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| Finding money |
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There are a few businesses which continue to be self financing. For the rest, you sometimes need to find money. My advice would be to check out all the potential sources before making a decision. What is right for you may not be right for someone else. You mainly have two choices: Equity (getting people to invest in your business) or Debt (getting people to lend you money). Equity sources can be from personal contacts, company sources, banks, venture capitalists, private placements or IPOs (Initial Public Offerings). Loans may be acquired from personal sources, suppliers and clients, government loans and grants, operating lines of credit, term loans or financing and leasing companies. Either way, the investor or lender's first consideration will be proof that you can service the debt. A good business plan and evidence of productivity in your business dealings are good ways of convincing other people to invest or lend you money. If you haven't got the resources to do this yourself, get some help, otherwise your ambitions, hopes and desires may never be realised.
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| Opportunity |
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The environment is right for business in the UK. If you have a good product or service there are plenty of opportunities to sell, both in the UK and increasingly overseas. Put your company in the top 25% of UK businesses. Look after your customers and your money and you will be successful. Get some help when you need it. And here's to an enjoyable future.
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| Gems of wisdom |
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Making Money
“Business is the art of extracting money from another man’s pocket without resorting to violence.” Max Amsterdam
“Doing business without advertising is like winking at a girl in the dark. You know what you’re doing, but nobody else does.” Stewart Britt
“Happiness is a positive cash flow.” Fred Adler
“There are some people who, in a fifty-fifty proposition, insist on getting the hyphen too.” Lawrence Peter
“There is nothing more demoralizing than a small but adequate income.” Edmund Wilson
"A criminal is a person with predatory instincts who has not sufficient capital to form a corporation." Howard Scott
"The only reason I made a commercial for American Express was to pay for my American Express bill." Peter Ustinov
"Gentlemen prefer bonds." Andrew Mellon
"Every morning I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work." Robert Orben
"Money is something you have to make in case you don't die." Max Asnas
"Whoever said money can't buy happiness simply didn't know where to go shopping." Bo Derek
"They were a people so primitive they did not know how to get money, except by working for it." Joseph Addison
Dad
The boss called one of his employees into the office.
"Rob," he said, "you've been with the company for a year. You started off in the post room, one week later you were promoted to a sales position, and one month after that you were promoted to district manager of the sales department. Just four short months later, you were promoted to vice-chairman. Now it's time for me to retire, and I want you to take over the company. What do you say to that?"
"Thanks," said the employee.
"Thanks?" the boss replied. "Is that all you can say?"
"I suppose not," the employee said. "Thanks, Dad."
Efficiency
“A business is too big when it takes a week for gossip to go from one end of the office to the other.”
“No business opportunity is ever lost. If you fumble it, your competitors will find it.”
“Business is like a car. It won’t run itself, except downhill.”
“I cannot give you a formula for success, but I can give you the formula for failure: “Try to please everybody.” Herbert Swope
“Even if you are on the right track, you will get run over if you just sit there.” Will Rogers
“Life is like a bicycle. You don’t fall off unless you stop pedaling.” Claude Pepper
"If advertisers spent the same amount of money on improving their products as they do on advertising then they wouldn't have to advertise them." Will Rogers
"We didn't actually overspend our budget. The allocation simply fell short of our expenditure." Keith Davis
"More and more these days I find myself pondering how to reconcile my net income with my gross habits." John Nelson
"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." JP Getty
"Anyone who lives within their means suffers from a lack of imagination." Oscar Wilde
"Money is just the poor man's credit card." Marshall McLuhan
“At too many companies, the boss shoots the arrow of managerial performance, and then hastily paints the bulls-eye around the spot where it lands.” Warren Buffet
“One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” Elbert Green Hubbard
Whistle blower
An American manufacturer is showing his machine factory to a potential customer from Albania. At noon, when the lunch whistle blows, two thousand men and women immediately stop work and leave the building.
"Your workers, they're escaping!" cries the visitor. "You've got to stop them."
"Don't worry, they'll be back," says the American. And indeed, at exactly one o'clock the whistle blows again, and all the workers return from their break.
When the tour is over, the manufacturer turns to his guest and says, "Well, now, which of these machines would you like to order?"
"Forget the machines," says the visitor. "How much do you want for that whistle?"
Taxes and red tape
"I told the Inland Revenue I didn't owe them a penny because I lived near the seaside." Ken Dodd
"I'm spending a year dead for tax reasons." Douglas Adams
"Only one thing is impossible for God: To find any sense in any copyright law on the planet." Mark Twain
"A verbal contract isn't worth the paper it's written on." Samuel Goldwyn
"Today's payslip has more deductions than a Sherlock Holmes novel." >Raymond Cvikota
“The law of triviality…means that the time spent on any item on the agenda will be in inverse proportion to the sum involved” Cyril Northcote Parkinson
“Meetings are by definition a concession to deficient organisation. For one either meets or one works. One cannot do both at the same time.” Peter F Drucker
“The first 90% of the project takes the first 90% of the time. The last 10% of the project takes the last 90% of the time”
“Don’t tell me that worry doesn’t do any good. I know better. The things I worry about don’t happen”
Tax
The following is an actual letter that was attached to a 1998 US tax return . . . which resulted in an immediate audit.
Attn: IRS
Enclosed is my 1998 tax return & payment. Please take note of the attached article from USA Today newspaper. In the article, you will see that the Pentagon is paying $171.50 for hammers and NASA has paid $600.00 for a toilet seat.
Please find enclosed four toilet seats (value $2400) and six hammers (value $1029). This brings my total payment to $3429.00. Please note the overpayment of $22.00 and apply it to the "Presidential Election Fund," as noted on my return. Might I suggest you the send the above mentioned fund a 1.5 inch screw." (See attached article...HUD paid $22.00 for a 1.5 inch Phillips head screw.)
It has been a pleasure to pay my tax bill this year, and I look forward to paying it again next year.
Sincerely,
A satisfied taxpayer
The law
A man was driving down the road. He passed a traffic camera and saw it Flash.
Astounded that he had been caught speeding when he was doing the speed limit, he turned around and, going even slower, he passed the camera.
Again, he saw it flash. He couldn't believe it! So he turned and, going a snail's pace, he passed the camera. AGAIN, he saw the camera flash. He guessed it must have a fault, and home he went. Four weeks later he received 3 traffic fines in the mail, all for not wearing a seatbelt.
Source: http://www.emmitsburg.net/humor/index.htm
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