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Mistakes Can Cost Money and Customers - 3 Tips for Avoiding Them.
We all make mistakes. Why? Simply because we are human. The better we are at avoiding mistakes, however, the less it will cost us in the long run. Money is one obvious cost. Credibility and customer confidence is the greater risk.
Sid Kemp, in his article "Learn From Your Mistakes," estimates that "continued incompetence costs our society billions of dollars a year." Yes, he said BILLIONS. What if we could reduce this cost, in both time and money resources, by not making them in the first place?
To work toward that objective, consider these three ingredients:
- Have a standard, preferably written, set of steps for delivering your product or service. This is called a process. If you follow your process, it is easier both for you, and anyone you hire, to deliver what is expected.
- Know what your most costly step is. In other words, if that step gets flubbed, you will either lose money or lose a customer. Then, monitor that step like a hawk.
- Have a predetermined way for handling problems and complaints. When the inevitable flub happens, know what you will do.
- Give your subordinates the power to act based upon that process.
- Minimize the inconvenience to your customer or client. Your response must make sense to them. (See this blog "You Don't Make Sense").
Mistakes can be learning opportunities, too. For a few thoughts on that, see this article by Sid Kemp, for Entrepreneur.com. Head mistakes off at the pass and most of the time you will get the results that both you and your customers expect.
E-mail us if you would like help with defining or improving your processes.
© 2009 DMMI Associates LLC – All rights reserved
Your Business Vision - 5 Factors to Consider.
How do you see your business? What will it look like the day you start up? After 1 year passes? 2 years? 5 years?
To increase the likelihood that you will succeed over the long haul, answer all parts of that question for yourself. Write it down.
Oh, I know, it is much easier and simpler just to get things going. Unfortunately, that's a short-sighted perspective. Remember: The easy path rarely serves you well. Did you win any little league games without practicing with your team? How about learning to play piano -- or whatever your musical instrument of choice may have been? Practice may not make perfect, but it definitely makes it better.
How you define your business' vision will shape your mission for it. The two together will shape all of the marching orders for both you and any employees you hire. If you start marching without it, you will eventually hit an immovable wall.
Below is a starter list for bringing your vision into focus.
- Who will your customers be?
- What will you provide for them?
- What will, and should, they expect from you?
- What range or scope of products and services will you cover?
- Caution: Your business cannot be all things to all people.
See this SBA overview on "Finding a Niche."
- Start with what you are truly good at.
- Stick to that.
- Be able to do that with excellence.
- Expand after you master the step above.
- Do you see yourself with employees?
- How you answer this will drive many factors - not the least of which is your Business Plan.
- Will you have them Day One or hire them later?
- How big will your company grow?
- Is the sky the limit?
- How many employees would be too many for you?
- At what point in time will you leave your company?
- Retirement? Will you stick around as an Emeritus? .
- Will you, or can you, leave your children in charge when you leave?
One of my clients is led by a 2nd generation descendant. Oh yes, and Grandpa Tippy, President Emeritus, has an office -- but rarely uses it. The firm is in good hands.
Lay out a chart for yourself and answer these questions for each phase of your business. Keep it simple. You can make notes in a spiral notebook. Just make sure you get it done. Then, and only then, start your business.
DMMI Associates is here to help you to find and use the best possible business growth resources available to you.
E-mail us for help with getting and keeping your business running well.
© 2009 DMMI Associates LLC – All rights reserved
Five Critical Factors for a Micro-Business Start-up.
If you are among the 25 million plus people that will be running a micro-business by the end of 2009 [Ref. SmallBizTrends.com] this entry is for you. Some will fold this year, but many more will start up. Here are a few tips for staying among the "thrivers" in the bunch.
- Cash is the lifeblood of your business; therefore:
- Know what the payback or return will be for planned expenditures.
Base this on your own evaluations, not what the sales rep tells you.
- If you have a paying job, keep it as long as possible. You may be sleep deprived, but your bank account and your household will suffer less. That being said,...
- Get the highest quality (not most expensive) tools and equipment of your trade, that you can afford.
- Good business cards. See this checklist.
- A laptop computer, with wireless LAN, webcam, a big hard drive, and lots of RAM.
- Make a "must have" and a "like to have" list of other items.
- Avoid debt and credit card purchases. Use them prudently, if at all.
- Lease what makes economic sense, to conserve cash and yield tax advantages.
- Invest in your web presence. The internet is the next great business growth frontier.
- Choose a logical domain name. Don't pay more than $15 for one year to register it. Avoid the super-cheap services; there are hidden, costly inconveniences.
- Put up a website. It does not have to be fancy, but it must meet your business development needs.
- Avoid using your kids, best friend, or neighbors' kids for this purpose. Use professionals or a user-friendly service.
IMG Online Business, one of our technology partners, has excellent packages. You may try it from the link above.
- Set up business-specific e-mail.
- If hosting stretches your budget too far, at first, use forwarding from your parked site's registrar.
- Get set up to use e-mail software, such as Outlook, so you can send professional looking messages, A.S.A.P..
- Learn your market quickly and sell, sell, sell.
- Customers will not auto-magically appear.
- If you cannot sell your product or service, get someone who can.
- Sales skills will not guarantee success, but the business cannot grow without someone who has, and uses, them.
DMMI Associates believes in bringing world-class solutions and resources to you.
E-mail us for help with any topics mentioned above.
© 2009 DMMI Associates LLC – All rights reserved
How Steep Is Your Learning Curve?
Eventually most of us learn. We either learn through experience, formal education and training, or pain avoidance -- a.k.a. "The School of Hard Knocks." Mistakes that cause us pain or cost us money can be effective learning tools. The downside is that they are expensive, both in terms of time and resources.
So, ask yourself: How much time and money can you afford to waste? Yes, I said "waste" as opposed to "invest" -- the preferred approach. The key difference: An investment has an expected, measurable return. Conversely: Time lost is irreplaceable. Revenues, i.e.: money, left unearned is also in essence, wasted. Missed opportunities will cost you, one way or another. And yes, I speak from my own experience as one whose education has included courses from Hard Knocks U.
So... In the spirit of saving some of you both time and money, here is an opportunity to invest a couple of hours in your personal business "book of knowledge." Your only investment for the session is your time. I guarantee you a great ROI.
Do you know already what scripts you should be flipping to:
- shorten your learning curves and
- help you to grow your business faster?
Here's the link for the September 15th newsletter, from my brilliant associates over at Lushin, with some thoughts on that subject. To register for their 2-hour Executive Briefing on September 23rd, just click here or the <Register Here> link in the newsletter.
Take 2 minutes, as well, to see Paul Lushin's video explaining "Life's Scripts" at Lushin TV.
DMMI Associates believes in bringing great solutions and resources to you.
E-mail us for help setting a course for stable growth.
Sales Revenues Minus Costs Equals: PROFITS.
Fear not. Cost Accounting is not the formidable beast in the real world that it was in business school. Well, okay; maybe it is. The painful truth is: To stay in business, you cannot avoid it, at least at a basic level. There is only one way to know if you are pricing your product or service correctly. Costs must be reasonably estimated before you sell anything. Detailed knowledge of the three main factors listed below should drive all your pricing decisions.
- Labor - That part of the cost of goods and services attributable to wages, especially for direct labor. For more details on Labor Costs use this resource at Answers.com.
- Materials - the cost of the raw materials that go directly into a product. From the BNET Dictionary.
- Overhead - expenses that are not directly tied to making or delivering a specific product or service. See this page at BNET for more details.
So, start your business on the right path. Get a handle on your costs from Day One and monitor them closely.
DMMI Associates can help you with measuring your costs, if you need it.
E-mail us for help getting started.
DMMI can help you to set a course for stable business growth.
How You Set Up Your Business Can Save or Cost You Money.
Our objective here at DMMI Associates LLC is to get good, timely information into your hands. No wheel reinventing here today, simply some justified kudos.
This is the best 2-minute summary that we've ever seen on how your business structure choice can drive your income taxes up, or down. "Is Your Structure Costing You Money?" produced by Entrepreneur Magazine's Video Network. The video provides an overview of tax implications to consider.
Fair warning: it's preceded and followed by about 15 seconds of commercial advertising. They have expenses and production costs, too!
Your business will be one of the following types, even if by default.
- Sole Proprietorship. – It's all on you: what you do, how you do it, along with all the liabilities. Income is taxed directly to you, as an individual.
- Partnerships can be two or more business owners, splitting everything evenly, or in different proportions according to a written partnership agreement.
- Limited Liability Corporations - LLCs are supposed to do just that: limit your liabilities. The recommendation offered in the video is right on target.
- A Sub-chapter S Corporation or "S Corp" was the original hybrid corporation, but proved a bit cumbersome for many small business owners. The LLC was borne as a result.
- C Corporations are the more classic structures that we know Big Business by. Your company doesn't have to be big to use it. The choice just needs to make sense from a net earnings perspective. There are LLCs with hundreds of employees, for example. The choice was driven largely by the tax numbers.
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© 2009 DMMI Associates LLC – All rights reserved
