What would you do if one of your major customers went under, owing you a substantial sum?

Would you be able to secure what was owed to you, or recover goods they had not paid for?

Sadly, my personal experience is that if you are an unsecured creditor you would be lucky to see anything at all. Most of my clients have, at some

point, had to deal with this scenario. Making sure we stay “above the line” here, what can be done to minimise the risk of “losing our shirts?” A good start is accepting that bad stuff happens and how we come out the other end is, to a large extent, down to how we choose to deal with the situation.

Basics

This may all look like common sense so it never ceases to surprise me how uncommon these basic “rules of the game” are.

• Start with a cashflow projection that is updated weekly or at worst monthly. Forewarned is forearmed.
• Establish clear credit control procedures, make sure your customers understand them, and be seen to implement them firmly and consistently
• Check credit references before offering credit terms
• Maintain an honest and open relationship with your customers and encourage them to share information with you
• Do not extend credit limits without good reason
• Monitor customer accounts religeously and grade them
• Look out for warnings. One of the first signs of strain is that a customer’s payment period begins to lengthen. Act quickly and with purpose e.g. Arrange to meet with them, at their offices, to discuss the situation (see 3 above), ask if you can see their accounts and projections, suggest that they take smaller deliveries, more frequently, until the situation improves, or negotiate a repayment schedule for aged debt
• Get paid up front for the whole amount if possible or at least a sizeable percenatge. If product makes up a substantial part of the sale, cover this up front at least.
• If they won’t talk to you, get rid of them - you’re not a bank there to shore up their business!
• Measure your cash collection performance not just your aged debtors report.

Your terms and credit control process

• Have a process - here’s a simple and effective credit control process
• Don’t extend generous credit terms to your customers without sound commercial reasons and even then not until they’ve demonstrated mastery of their own business and you are confident in their trustworthyness.
• Have standard 15 or even 7 day terms - only offering to extend when you’re confident in your customer
• Specify terms as ‘payment received’ within 15 days rather than ‘payment sent’ in 15 days
• Include your terms on your invoice
• Sending out a letter before the invoice is due asking for confirmation that the order was received - this pre-empts the ‘I mislaid/don’t remember receiving your invoice’ excuse
• Include Retention of Title clauses in your contracts to increase your chances of repossessing any unused stocks of your products held by an insolvent customer
• Where possible, obtain guarantees from directors or other group companies
• Where substantial sums are involved, consider taking out insurance against a customer’s failure to pay

Take timely, proportional and appropriate action

If a customer does get in difficulty keep communication channels open and work with them to resolve the situation. In general, you have much more chance of recovering what’s owed to you if a rescue plan is put into place rather than the company going into liquidation. That said, have courage and take action quickly and purposefully to protect you and your business.

Systemising your cash collection is a fundamental element in mastering your finances, one of the 4 foundation stones to a commercial, profitable enterprise that can work without you.

Helping business owners move their businesses forward often involves getting them to think differently - to look at challenges, bottlenecks and problems through new lenses to get that different perspective that leads to great light-bulb moments and essential breakthroughs.

Here are a few tools that have helped me over the years.

• Challenge assumptions: For every situation, you have a set of key assumptions. Challenging these assumptions gives you a whole new spin on possibilities e.g assume you can do something and find as many ways as possible of “just doing it” rather than
  directly addressing “the problem”
• Think in reverse: If you feel you cannot think of anything new, try turning things upside-down. Instead of focusing on how you could solve a problem consider how could you create the problem e.g. If you’re looking of ways of improving your business, try asking “how could we trash the business in 90 days?”
• Draw: The idea is not to draw masterpieces but to express yourself in pictures instead of words. Your brain will make different connections. because you’re not relying on verbal reasoning alone.  Try Mind-Mapping.
  
• Reword the problem: Stating the problem differently often leads to different ideas e.g.You’ll come with different ideas if you ask “how to we make work easier” as opposed to “how do we increase productivity”



• Get someone else’s perspective: Ask different people what they would do if faced with your challenge. Approach several different kinds of people, from outside your business who will ask very different questions to those you’d ask yourselves and approach your challenge from many different directions.
• Believe in your ability to find a solution: Believe that you are creative, believe that ideas will come to you; positive reinforcement helps you perform better.
• Relax. Take time out to think: Nap, go for a walk, listen to music, play with your child, take a break from formal idea-generating. Your mind needs the rest. Ever remembered something when you stopped trying to remember it or had a lightbulb moment that seemed to come from nowhere?
• Play the “If I were” game: Ask yourself “If I were …” how would I address this challenge? What would you do if you were Tom Hanks, Leonardo da Vinci, Muhammad Ali, Flash Gordon … You could really have some fun with this. Get into character and think of your alternative self’s traits, attributes and skills and apply them to your challenge.
• Change your environment: Sometimes changing the setting changes your thought process. Go to a nearby coffee shop instead of the conference room in your office, or hold your discussion while walking round a local park. Have a brainstorming session on a boat.
• Shutting out distractions: Keep your thinking space both literally and mentally clutter-free. Put your Smartphone in Airplane mode, close the door, divert your phone calls and then think.
• Have a laugh: Creative stuff comes when we’re in “play” mode. Fine killjoys and miserable people and donate the proceeds to charity.

What’s worked for you?

1. Know your target
Really successful marketing campaigns
have one thing in common - the messages and calls to action are
specific to the target. You sell orthopaedic beds then talk to people
who have back pain or have difficulty sleeping. Research done at this
easrly stage will save you enormous amounts of money and wasted effort.

2. Craft powerful headlines
Whether you’re writing a
newspaper ad, email message or press release, you must create a
powerful headline. Research suggests that your headline is the most
important part of your ad. You have one chance to get your target to
stop, linger over and get drawn into your ad., website, advertorial or
article. Don’t waste it.


3. Make an irresistible and relevant offer
People respond to great
offers that have value and are relevant to them. Research shows that
40% of the response that you receive is directly related to your offer.
In today’s competitive marketplace, you need to present your client or
customer with an offer that they simply can’t resist. Make it easy for
your target to realise the offer. Keep it simple with as little effort
required from the prospect as is realistically possible.

4. A clear call to action.

Every single time you reach
out to your target audience you must direct your prospective client or
customer to take a specific action. This action can be to call a
freephone number, send an SMS message, visit a website, place an order,
request a call-back or scan a QR code. If you fail to tell your
prospect exactly what you want them to do, they won’t do anything. Take
your prospect by the hand and show them what they need to do next in
order to guide them through your sales process.


5. Build a warm list.

Talk to prospects regularly.
Keep drip feeding value. Ask them to pass on the goodness via Linkedin,
Twitter, Facebook, Digg, Stumbled Upon etc. Ask your customers and
clients to recommend you to friends and colleagues for an even higher
level of “free” value. Dropbox is a great example of this where they
give you more online storage space in return for getting others to use
the service. Growing a warm list is perhaps one of the most important
jobs for any small business.


6. Touch your prospective clients and customers many times
Consumers are exposed to
thousands of marketing messages every day. Recent research suggests
that your clients and customers will need to see your marketing message
between seven and twelve times before they even take notice. That means
you can never rely on sending one message to your prospects; instead,
you need to send repeated messages to them over and over again. Decide
how you will deliver your message and then make sure to develop and
continue a relationship with your prospect in an ongoing process.
By the way, the warmer the list the fewer touches needed to realise a
positive return on your investment.

7. Measure everything
It is absolutely vital that
you take time to measure the effectiveness of your various marketing
campaigns. This can be done with simple spreadsheets or CRM systems. No
matter how you measure your marketing, you must understand what is
working and what isn’t so that you dump what isn’t and do more of what
is. Common sense? You’d be surprised! You can have a limitless
marketing budget so long as every pound or dollar you invest returns
several more in sales and lifetime value.

8. Keep up a dialogue with your current customers.

You’ve spent valuable time
and money acquiring new customers and you need to make sure they come
back to you time and time again. Make sure that you communicate with
your customers on a regular basis, ask for their feedback, thank and
reward them for their business and continue to provide value to them
over the long-term. Think of your customers as an abundant river an
inch wide and a mile deep. How far are you reaching into the potential
of every customer you have?

… oh, and here’s a 9th for
fun

9. Know your numbers
Take a look here for a great calculator
to help you figure out what you have to do to get the bottom line
results you want - whether at a whole Company level or campaign level.

Wishing you every success …

No matter how good a solicitor, accountant, plumber, electrician, hairdresser, IT consultant or builder you are, you’re really in the business of marketing, and your marketing engine needs to be running constantly and consistently whilst you go about doing whatever it is yo do.

If you’ve been to one of my business building workshops or seminars you’ll know that investing time on the basics of Who, Where, What, When and How pay huge dividends in the form of well targeted and cost effective campaigns that are 100% congruent with your values and your goals.

Quite often I find that my clients think of new clients and customers when they think of the “Who” and often, at first, overlook the massive potential that exists within their community of inactive, sleeping or dormant customers. These are the clients who haven’t purchased from you in the last one to two years, and have gone quiet. They don’t buy your products or services any more and they have stopped interacting with you and your brand. There are many reasons why they may have “left” you and it’s important to find out why. Research shows that by far and away the most common reason for customer loss is perceived indifference (over two thirds in fact) but you’ll need to do your own research. Go to them and ask them. At the same time find out why they bought from you in the first place and how have their needs changed.

Then, develop specific marketing campaigns that focus specifically on engaging with them at a personal level. There’s no room for bland boiler plated stuff here. These people know you and you know them. At some time you did good business together so don’t treat them like strangers.

• Use your research to figure out their hot buttons and market specifically to them.
• Remind them about the results you deliver for your customers. Show them what you can do for them.
• Educate them in how things have moved on and the benefits your clients now enjoy.
• Set up regular (permission based) communication with them.
• Offer value. What can you do for them?
• Be proactive

What do you do to re-engage your dormant customers?

Over the past week or two the number of times I’ve had to ask people to be specific about something has been quite an eye opener. Knowing what you want, when you want it and in what measure not only means you can take appropriate, focused and timely action, but so can other people around you who can help you achieve whatever it is you’re working on.

Action, in the right measure, and at the right time is the lifeblood of business growth. No wonder, then, that inaction, more often than not caused by vagueness of purpose, is one of the leading killers of growth and prosperity.

If you’re in goal setting mode right now make sure your yardstick is that old standard S.M.A.R.T. with a real emphasis on “Specific”. Think of it this way. If you were planning a holiday you wouldn’t generally say “I’m heading West-ish”. You’d know the country, the area, and the resort plus your transportation in all phases of travel and the documentation you need to complete the journey with least hassle. So why is it that when it comes to planning the future of a business, so many business owners out there will use language like “we’re hoping to” or “we’ll do more than last year” or worst of all “no idea”. Sure it takes some thinking about and people need to set time aside to do that regularly. Remember, a transatlantic airliner is technically off-course for 90% of the journey but uncannily hits a tiny strip of tarmac in the right city at the right time just about every single time.

If you want to land your business, your projects and your decisions on the button then being specific about your destination, your outcome, is absolutely key to success.

Time then to take a look at your emails, proposals, requests for pricing, marketing plans and materials, sales targets, proposals, tender responses, business plans, staff communication and ask yourself “Am I being specific enough here?”. “Will the recipient of this message really understand what I am saying, what outcome I desire, what action I want them to take (or I am going to take) and why (in terms of the value of the actions).

A great book to read on this is Andy Bounds’ “The Jelly Effect” which is a real thought provoker and full of practical ideas on improving the impact and effectiveness of your communications.

If you’re looking for some clarity on your own goals in life then take a look at “Goal Mapping” by Brian Mayne which takes a very right brained approach to goal setting taht works effectively at a subconscious level.

Make it happen. Be specific!

Off the back of some recent seminars and client events it struck me how difficult many people find setting themselves stretching and motivating goals, be they personal or financial in nature.

Business owners complain how difficult it is to plan anything, and that forecasting is a waste of time because everything changes all the time anyway, and, worse still, there’s no point planning because “I know I’ll only be disappointed when I don’t achieve it”.

Hmmm, interesting.

In the words of Anatole France (poet, journalist and writer) - “To accomplish great things, we must not only act but also dream; not only plan, but also believe”

This means if businesses are to do more than survive, they must be led by someone who believes, at the deepest levels, that they will succeed, no matter what, and who strives daily to reach for an envisioned future that means something to all the stakeholders.

Henry Ford was no fool when he said “Whether you think you can, or that you can’t, you’re probably right”

Business owners and especially those of owner managed businesses are often so tied up in the daily “doing” of their business that they invariably and with astonishing speed forget what it is they’re busting a gut for. If that sounds like you it’s about time you revisited what it is exactly you want from your business and more importantly what it is that your business is helping you achieve. So what’s your “bucketlist“? What 101 things do you want to have done so when your ninety-six and a half and sitting with your great-granddaughter on your lap and she asks “tell me a story”, you won’t have to reach for a book but have your own adventures to tell.

If you’re stuck for ideas and need a bit of inspiration then visit 43 Things or Barefoot List where people share their desires and goals.

Life and business must have meaning and reward to be worthwhile and your business is just one of the ways you will achieve what you want to achieve. Make sure your business is working for you and not against you.

I like a good business book especially ones I can motor through in short order (a weekend or less).  One such I came across over the weekend is “Go-givers Sell more” by Bob Burg and John David Mann.  If Tom Hopkins has good words for a sales book it must be worth a look.

My key learning was the importance of focusing on giving value throughout the sales process and not on chasing the sale which automatically makes the process all about them (your prospect) and not about you.  The biggest thing here is the mindshift required to move from “I’ll give a bit of value so I get x back” to “I’ll just give value”.  It takes you from the danger zone of appearing needy, to a position of relaxed strength and confidence.  Now that’s what I call a helpful shift.  Sounds simple doesn’t it. 

Every sales person worth his or her salt will have been trained and will have practiced asking open questions to get the prospect to talk, to open up and to help the rapport building process.  This in itself is great.  The trouble is most sales people can’t wait to look for the opening that allow them to practice all their great trial closing and closing techniques.  Urrrrgh!  Have you ever been on the receiving end of “great technique”.  Me too.  I hate it with a passion.  That means my ever increasingly astute and better educated prospects will also feel negative in the same situation.  Jeffrey Gitomer has it absolutely spot-on in his “Little Red Book of Selling” when he says “Give value first, don’t add it.”

If you can make the process, the experience, all about them, give value, help your prospect move forward themselves, be genuinely curious about them and appreciative of what’s really important to them, then you will be able to make it easy for them to appreciate and invest in whatever it is you have to offer.

There’s a great acronym in sales - ABC - always be closing.  Has it had it’s day?  How about “AGV” -  Always Give Value? Not as catchy maybe but a million times more effective.

What do you think?

Would you take on an employee for £30,000 a year and then never check to see if they accomplished anything or even showed up to work. Mad question?  Not really … especially when the “employee” is your marketing effort.

Take the prospect who honestly told me they stopped advertising in a well known directory after being in it for years with full and half page advertisements because it was “too expensive”.  Compared to what I wonder?  That was a question they couldn’t answer because they admitted they’d not measured the results they were getting or at least not paid attention to the results they were getting.
 
The parallel with the £30,000 employee is obvious - it is vital that we test and measure the results from our marketing to make informed decisions on what to increase, decrease, add and subtract.

Here are a few simple ideas to make sure you really know the return you’re getting from any and all your marketing efforts.

1. Define your purpose for the marketing investment: If the purpose of the marketing is to drive revenues and profits, then the measurements of success need to reflect that. If the purpose is something else, then adjust your measurements accordingly.  As Covey says .. “Begin with the end in mind” - start with a purpose
  
2. Track your leads and record the prospects’ data: At the very minimum always ask the prospect some version of “How did you hear about us?” Collect their information and put it in a database that you can slice and dice to get at useful information. The goal is to know how many leads (and ultimately how much profit) per week are coming from each marketing medium and then to be able to follow up those leads in a planned and systematic way.  From experience I know this is a huge leak in the pipeline for most businesses.
  
3. Know your key numbers: Marketing is simply a matter of buying clients for less than their lifetime values and the key to making your marketing an effective investment rather than a cost is to keep the acquisition cost as low as possible while driving the lifetime value as high as possible. Do you know your numbers?
  
4. Use the information you collect to make educated decisions: Once you record the information over time, you will know the acquisition cost for each marketing technique as well as the number of new clients acquired by each technique. You will undoubtedly notice a significant difference in the lifetime value of clients from different techniques. Build the information over time and use it to determine how to allocate your budget.

The main point here is to start systematically recording the information now to increase your revenues and build your decision making database.

Whatever you do, make sure you’re getting a great return on your investment from that £30,000 employee!

Remember this one?  Written by Spencer Johnson and published in 1998, Who Moved My Cheese is a motivational parable. It describes change in one’s work and life and typical reactions to change.  It sold 26 million copies and remained on the New York Times business bestseller for almost five years - and with good reason.

The book certainly has it’s detractors but the core messages are as true today as they’ve ever been;

Change Happens - They Keep Moving The Cheese
Anticipate Change - Get Ready For The Cheese To Move
Monitor Change - Smell The Cheese Often So You Know When It Is Getting Old
Adapt To Change Quickly - The Quicker You Let Go Of Old Cheese, The Sooner You Can Enjoy New Cheese
Change - Move With The Cheese
Enjoy Change! - Savor The Adventure And Enjoy The Taste Of New Cheese!
Be Ready To Change Quickly And Enjoy It Again & Again - They Keep Moving The Cheese

Great businesses thrive on change because it provides the catalyst for new thinking, new directions, new energy and new opportunity.  Uncomfortable undoubtedly, but worth it!  Just think about it for a moment - Did you ever achieve anything worthwhile when you were comfortably cosy inside your comfort zone.

So, what are you going to change tomorrow that moves you and your business forward?

A Lesson from Dickens

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way …”

Charles Dickens - A Tale of Two Cities (1859)

However you look at it, recessionary times are full of opportunity.  Even at it’s worst, per capita GDP, that is, the amount of money each member of the UK population generated, was 93.5% of pre-recession levels.  Of course, some industries, like construction and the motor industry, have been hit harder than others, but the truth is that there’s still a huge amount of business being done, every day. True, the decision making process may be lengthened and buyers a little more cautious, but your customers are still buying products and services every day.  Your job is to make sure that it’s still a no-brainer for your customers to continue to choose you rather than someone else and to continue to recommend you to potential customers. 

Sadly, those businesses, built on boom times, with little regard for the rules of cyclical economic seasons, have found it particularly tough, whilst the best run businesses are, in the main, still there, and still doing good business. In fact, many are thriving, despite the doom and gloom that so many preach.

So, what makes the difference between failure, surviving and thriving?  Here’s my take on the question …

1. Know what you’re about, why you do what you do, and who you do it with.

2. Focus on long term customer value not short term profitability. It costs between 7 and 10 times more to win a new customer than to trade profitably with an existing one. Businesses lose more customers through a perceived indifference than for any other reason so what are you doing to cultivate, grow and sustainably harvest your existing customer base? Do you have a referral-centred business? Do your customers know how much you love them?  Do all your efforts go into delighting your customers and not just satisfying them?  It’s often the smallest things that make the difference.  When was the last time you sent a handwritten note of thanks for someone’s business?
If ever there was a time to have to really understand your value proposition and know how to sell it well, it’s in a recession. Buyers have a heightened awareness of the need to seek “best value”.  That doesn’t mean cheapest, by the way. It’s an old question but here it comes anyway.  What’s your USP and how are you putting your money where your mouth is?  Quick hint: Do the Feature - Benefit - So what exercise.  The “So what” answers the question “what does my product or service really does for my customer?” What real pain does it fix?

3. Keep the marketing engine spinning. When others are being over cautious, or have no funds because they blew it all when times were rosy, ramp up your marketing.  Be at the front of the queue before the queue has even formed. 

4. Sell like there’s no tomorrow.  William Purkey wrote;

“You’ve gotta dance like there’s nobody watching,

Love like you’ll never be hurt,

Sing like there’s nobody listening,

And live like it’s heaven on earth.”

How true. Nothing happens in business unless you sell, so do what it takes (ethically and responsibly of course).  Not comfortable with this?  Take Jim Rohn’s advice … “Work harder on yourself than on your job”.  Get over yourself and get on with it. Take a course, buy a book, or even get a coach to help you.

5. Have the right people around you.  Hire for attitude.  People whose hearts are in the right place and who’s values support and are fully congruent with your business goals and vision will do what they have to do and learn what they have to learn to be a part of something great.  Your brand, ultimately, comes down to the customer experience and that means the day to day interactions that your prospects, customers, friends, allies, and suppliers have with you and your colleagues.  Are your processes and people up to making sure this is as good as it can ever get?

6. Learn from traditional farming. Business is seasonal and cyclical. Good farmers prepare the land, sow crops, nurture their investment, harvest and store surplus for when conditions get worse.  Good businesses do the same thing.  As sure as eggs are eggs, business experiences seasons. Ask yourself, “What can we do to make sure we’re in a great place to be warm cosy and comfortable during the harshest winter?”

None of this is particularly difficult.  Yes it takes hard work, attention to detail, diligence, great decision making, planning, forethought, imagination, creativity and clarity of purpose.  Work on it every day, consistently and not only will you thrive, no matter what the business environment throws at you but you will also be developing a business that works effectively across the board.

What will you do differently tomorrow to make sure your business is in the best possible place to thrive whatever the economic weather?

What do you believe makes the difference between bare survival and continued health and profit? 

For a great dose of common business sense this Autumn why not get along to one of Brad Sugars’ UK events.  The very entertaining Brad is back in the UK as part of his global Business is Booming tour and is absolutely free as long as you use code 1755Gary when you book online.  Here’s a short preview …