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Public Speaking, Presentation Skills & Media Training

 

If your customers are other businesses, then this is for you. There are several buying trends I’ve seen within my own company that you need to be ready for. The buying trends include consolidation, pricing, and stability.

Remember happy customers recommend you to their network!

Public Speaking, Presentation Skills & Media Training

 

As a small business owner, how do you know when you’re ready to go after big customers?

“I think you have to be really honest with yourself because if you’re expecting to hit a home run right away it’s just not going to happen,”

That quote above is from me when I was featured on the Welsh Wire podcast. On the podcast, I was interviewed by President and CEO of Welsh & Associates, Sheri Welsh. Welsh & Associates is an executive search and professional recruiting services company.

The Welsh Wire Podcast is one of their resources they offer employers and job seekers.

Give the Welsh Wire Podcast a listen as leaders from a wide array of small to mid-size West Michigan companies weigh in and share their experience and insight on a variety of business topics. These topics include employee retention challenges and recruitment success stories.

In this episode, I discuss with Sheri that small businesses have to be ready for their big break. “One of the things I say to people is have you built out a really good infrastructure for your business? Do you have really good processes in place? Because if you haven’t, it will be chaos.”

I also discuss how small business owners have to be willing to adapt to whatever billing and reporting procedures are required by a big client.

Listen to Sheri’s entire interview with me.

 

Subscribe to The Welsh Wire podcast on iTunes for additional informative, entertaining interviews with West Michigan business leaders.

 

Interested in having me as a guest on your podcast? Contact me here.

Public Speaking, Presentation Skills & Media Training

 

My most favorite thing to talk about is small business. And my most favorite people to talk to are small business owners. And in this NSBA Leadership Group Presentation Video, I discuss what we deal with as a small business owner from wearing many hats to the legislative update.

And one thing to remember is the National Small Business Association (NSBA) has your back as a small business owner.

Joining me in this presentation is Todd McCracken, CEO of the NSBA.

Public Speaking, Presentation Skills & Media Training

eCommerce Business article by Jock Purtle of Digital Exists

If you’re like any other entrepreneur that wants to sell their business, you want to get the highest price possible.

To get the maximum value for the sale of your eCommerce store, you need to pay close attention to the timing of the sale.  Perfect timing can mean the difference of tens of thousands of extra dollars in your pocket.

For some entrepreneurs, they may get the best result by selling during the peak season for their business.  For others, though, getting maximum value could mean introducing a new product to your catalog to provide a quick growth trend.

Regardless of this information, the multiples you can get when you sell your business can be substantially higher if you time the sale and hold off until that time is right.

Let’s take a look at some of the biggest factors that affect how much you can ask for your business.

content provided by Jock Purtle.

#1 – The Lifecycle Of A Business

Every business in existence has a life cycle, regardless where the business is located or what products and services they sell.

There are 4 different stages businesses go through: idea, growth, maturing, and declining.  The declining phase can be slowed or even halted by diversifying.

By understanding exactly where your business is at in the declining phase, you can figure out whether or not now is the right time to sell, or if you’re going to need to put in more work to increase your asking price.

Let’s take a look at 2 different businesses to give you a better idea of the possibilities.

One of the businesses is 5 years old, and the other is 3 years old.  They’re both in the eCommerce sector, and both turnover $500,000 per year.  This delivers a net profit of $150,000 for each business, both of which have 1 employee.

The first business has 5 years of established revenue history and shows linear growth, with annual compound growth of 50% over the course of its life.

The second business has a 3-year history and shows linear growth with an annual compound growth of 400%.

Which business is worth more, in your opinion?

Looking at the information we’ve given you, you would assume that the first business has reached the mature stage, while the second one is still likely to be in the startup or growth phases.

Given that their turnover and net profits are equal, the second business should easily outperform the first business over the course of those same 5 years, assuming everything else remains the same.

This means that even if your business has reached the maturity phase, it isn’t necessarily worth less.

If your business is considered mature, like the first one in our example, you don’t necessarily want to start panicking.  There are far more risks associated with buying a younger business that hasn’t already reached the mature phase.

If you have placed a fair value on the business, you don’t want to rush and drop the price because it doesn’t look as good on paper as the second business in the example.

The fact that your business has proven to be stable over a longer period of time and has the history of growth to back it up will make it far more likely that you’ll get a higher price when you find an investor.

Knowing which phase your business is in will make it a lot easier to figure out whether now is the right time for you to sell, or not.  If you are peaking in your growth phase, or have already reached the mature phase, the time is perfect for you to sell.

However, if your business is starting to decline, it may be worth it for you to hold off and attempt to stimulate growth by launching a new product or renewing a big contract.

#2 – Launching New Products

Adding a new product to your eCommerce business catalog can be a great way to make sure you’re extending the life of your business.  As older products become saturated in your market, introducing new products can provide a quick influx of sales.

Investors are always going to look at your business in a favorable light if they see that there is still potential, even if the business has reached the maturity phase.

You can display clear ROI information after you’ve launched new products to justify the potential that is still left in the business.

Knowing this, however, doesn’t necessarily mean you should be launching products right before the sale just to bump up your asking price.  Sometimes, it may be even more profitable for you to save the new product launch for your investor, and work that launch into the asking price.

Let’s look at one example so you get a better understanding.

Let’s assume that a business is generating mid six-figures and they want to sell.  The business is focused on selling digital products inside of the health industry.

They have a large amount of data to back up their asking price, their traffic sources are sustainable, and growth is headed upwards.

The owner went back and forth on their decision to launch a new product while their business was listed for sale.  They considered saving the launch for their investor after the deal had gone through.

Launching a new product during the sale of the business would have increased their profits and diversified their revenue, while also extending the lifecycle of their business — all factors that increase the value and asking price of the business.

Based on their own estimations, launching the new product would have added an additional $50,000 to $100,000 in revenue, along with another $5,000 per month in recurring income.

The owner viewed the launch as a way to say “farewell” to their business and create increased revenues for their new investor after they took over control of the business.

In this example, it makes sense to launch the product, right?  You are right by saying yes, but launching a new product isn’t always so simple and straightforward.

Although, in this example, it seemed like a no-brainer to launch the new product, most times it’s actually better to hold off, for a couple different reasons.

First, the income generated by the launch isn’t going to affect the sale price.  It’s only going to help the seller and not give any benefits to the investor.  Even though it may seem like you would benefit from the launch, you put your investor in a bad spot.

Not only are they taking ownership of your business, but they’re also going to be forced to simultaneously manage a new product launch.

Also, your knowledge and expertise are going away.  Launching the product before selling it could leave your investor wondering whether you attempted to pump and dump it.

The odds are high that the launch will actually do more damage than solve problems.

It’s always advisable to hold off on the product launch because you can show the history of other launches and use that information to help justify a higher asking price. And, your investor will know that they have a new product ready to go whenever they’re prepared.

If you want to profit from the launch, negotiate an earnout with the investor to get a piece of the pie after they have successfully transitioned into the business and decide to launch the product. This is the ultimate win-win situation for you and your investor.

#3 – The Time Of Year

Quite a few businesses go through ebbs and flows, based on the time of year

As an eCommerce business owner, you have probably already noticed this with a massive spike in your sales between October through January.  Consider that most investors are not going to want to purchase your business when it’s coming off the back of a busy season.

If you do have to sell, you’re going to want to delay the sale until you’re around halfway through the season to help your investor sustain the momentum after they take over the business.

You’ll also want to think about your tax implications and how to minimize the liabilities from the sale.  You’ll need to plan ahead and talk to an accountant about what you’re responsible for when you finalize the sale.

#4 – Trends In Your Industry

Once you’ve figured out the best time to sell based on your product’s lifecycles and the potential seasonality of your business, you should look at any industry data that is available to ensure you are choosing a time to sell that is favorable for you.

Like any other asset, there are forces in play, like supply and demand. Understanding how you can take advantage of those forces could help you get higher offers from investors.

Selling while the market is considered to be “hot” means that investors will have a large number of businesses from which to choose and it could be hard for you to get the highest value out of the sale of your own business.

To figure out whether the market is favorable, speak with a business broker who has a bird’s eye view and can help you learn about the different trends and investor activity.

To Sum It Up…

When it comes to selling your eCommerce business, there are many factors to consider.  “It’s critical that you sell at the right time, and for the right reasons.” – Jock Purtle

If you think that selling your business quickly, or selling because you’re burnt out are good decisions, you’re almost always going to end up getting reduced offers because you didn’t properly prepare for the sale.

In general, the more time you give yourself to implement your exit strategy and focus on hitting the right timing, the higher your chances of selling for the maximum value.

 

This guest post was written by Jock Purtle of Digital Exits. To learn more about Jock Purtle and his company, visit Digital Exists.

 

 

Public Speaking, Presentation Skills & Media Training

Any entrepreneur can tell you that when they were starting a business, financing was a major component.

Starting a business? One of the most critical decisions is the approach. Do you quit your job? Wade into a new venture while still employed full-time? Do you work part-time for someone else to help ease the budget crunch? If you have lost your job, do you just make the leap?

The answer comes down to one word – MONEY.

Financing a start-up is not easy. According to the National Small Business Association, “64 percent of small businesses used financing in 2017, 29% used credit cards. Almost 30 percent were not able to obtain adequate financing.” That is telling because small businesses usually take out starter loans to buy equipment, open an office or purchase some type of inventory.

When I started my business, I had lost a job. (Actually, I got fired … but that’s a whole different story.) This was the job I moved back home to take. My father told me at the time there was no kitchen big enough for two Greek women, so I bought a starter house. Now I was single, unemployed and had a mortgage.

I always knew I wanted to start my own business. I just did not think it would be that soon. It was time to decide. What I did next is what many entrepreneurs do – I got a job to help finance my start-up. That might not sound very entrepreneurial – but for me, it worked! I took a position as an adjunct faculty member for a University. For two years, I taught full-time while getting the business up and running. I took out a small loan and put my house up as collateral. I worked out of my home to market the fledgling company, secure clients and set up systems. When asked to teach for a third year, I declined. For the business to go to the next level it needed more of my time and attention.

I know that many would say this was the safe way to start out. Some might question if I was an effective teacher. I would argue that I was being responsible. And, students got the benefit of instruction from a working professional. Of course, there is a downside to working during a start-up.

The hours can be overwhelming.

You must not “short” your employer. You must give the job your full attention while you are there. And it goes without saying, you should not work on your business while someone else is paying for your time. Clearly define a plan to make the big leap to working full-time in your own business. Otherwise, it simply won’t happen. Set a deadline and stick to it.

There are many different paths to starting a business. Use your savings and take the leap. Go for a loan or crowdfunding. Work during your start-up. The important thing is not how you start, but that you build a foundation so the business will last.

Let’s connect on Instagram.

Photo by Braden Collum on Unsplash

Public Speaking, Presentation Skills & Media Training

 

It may surprise you to find that there is a negative growth for business startups. That is, there are more deaths of small businesses than there are of business startups. Shocking isn’t it? Many would have you believing entrepreneurship is at an all-time high, when it isn’t. Want to know why?

Public Speaking, Presentation Skills & Media Training

Customer service. It is critical to maintaining long-term relationships with customers. Organizations like Nordstrom and Disney have shared their secrets to great service over the years. Michael Brown challenged the traditional thinking on customer service in his book, Fresh Notes on Customer Service. His premise is customers should come second and the emphasis should be on employees, who if treated well, will provide outstanding service. Other books and articles offer lots of tips about how to train your employees and create a culture that values service. I think the biggest key to service is one that is often overlooked. It’s the customer you choose to serve.

I know it seems obvious, but I believe you can only achieve great customer service if you are serving the right customers for your business. This means you need to focus on who the customer (client) is long before you serve them. Too often a company tries to be all things to all people. Upfront you should consider how your products, services, and approach to doing business match your customer’s requirements.

If your customer needs you to do a lot of custom work and you are only structured to provide standard product, you will disappoint.

If your lead time is two to three weeks and your consumer is constantly calling at the last minute, you will disappoint.

If your customer likes a lot of personal attention, meetings, and phone calls, and you want the process to be more online and automated, you will disappoint.

If you like to be on the cutting edge and constantly innovating, and your customer wants to do the same thing over and over, you will disappoint, not to mention you will get frustrated and annoyed.

So, before you think about how to service a client, consider whether it is a client you want. Ask yourself: Is the work something that fits well into your existing workflow, processes, and the capabilities of your company? Would it be a stretch to deliver what your customer is asking for, or require a capital investment you are not prepared to make, like adding inventory? What if it just isn’t work you are ramped up to do? If the work is not part of your core capabilities, it takes longer to accomplish. You simply may not be able to provide timely service. You really need to think about whether the client can, and will be, good for your business in the long-term.

Once you get the client, you need to perform, and unfortunately, most don’t. A recent study by SuperOffice that benchmarked customer service stated, “Most companies know what they need and should deliver excellent customer service. But interestingly enough, research shows that while 80% of businesses believe they provide excellent customer service, in fact only 8% of customers believe they are actually receiving excellent service.”

Did you know I conduct workshops for businesses and I am a speaker for hire? Here’s my speaking packet.

Public Speaking, Presentation Skills & Media Training

 

Recently I had the pleasure of sitting down with Michael Rogers of the Small Business Association of Michigan on Facebook Live. During this exciting interview, we discussed video and how it works for small business marketing and communications.

Public Speaking, Presentation Skills & Media Training

Small business advocate: Access to capital is critical for small business owners.

 

Ask any small business person about the challenges they face and at least one will be access to capital. In simple terms M-O-N-E-Y. Often no one wants to lend you money when you need it. When you don’t need it, everyone wants to lend you money.

Another issue is the paperwork and complexity to apply for loans. When I needed cash to launch my business, I started in a pretty traditional way. I took stacks of paper and went from bank to bank. It was time consuming, but it worked. The first loan was under $100,000, typical for small business. Small business lending statistics have been consistent recently. Over 70% of small businesses are looking for loans less than $250,000, and more than 60% want loans less than $100,000. These are generally the loans a lot of lenders don’t want to handle because they prefer bigger, more profitable transactions.

The good news is today there are many more options from alternative lending sources.

Recently I heard a speech on small business credit and capital by Nat Hoopes, Executive Director from the Marketplace Lending Association. He spoke about the growth of financial technology also known as “fintech”. Essentially, fintech refers to an industry made up of companies who use technology to compete with traditional institutions, like banks. Peer-to peer lending sites like Lending Club and Funding Circle are members of the Marketplace Lending Association.

While doing research for my book Small Business for Big Thinkers, I profiled one online lender, On Deck, and learned a lot about why borrowers turn to this kind of funding. For one thing, alternative lending sources make the borrowing process fast, simple, and transparent. Unlike the reams of paper you need to submit with some other types of loans, the application process is usually one page online and takes about ten to fifteen minutes to complete. Often these companies approve loans based on three months of bank processing, or three months of merchant processing.

Here’s the part that really makes you take notice.  Decisions can be delivered in as fast as one business day, and funding in as fast as two business days.

It makes you wonder how alternative lending sources approve businesses and react so quickly when some traditional ones cannot? It’s all about the technology that seamlessly aggregates digital information – such as cash flow, merchant processing information, and social data – to evaluate the true health of a business.

Of course, you can expect to pay more for money from these sources, but this does not seem to bother some small companies. Those I spoke with believe speed and ease are the top priority. Some experts also believe paying a higher interest rate is not necessarily bad. Business owners who pay more may be better prepared when the artificially low rate cap comes off interest rates.

Small businesses need to consider all the options when searching for affordable credit. They also need to consider the risks, because how you manage money and your credit is one of the most critical aspects of business. The alternative market won’t discipline you. You must to do that.

If you need a primer on what is happening, check out the Harvard Business School report The State of Small Business Lending: Innovation and Technology and the Implications for Regulation by Karen Gordon and Mills Brayden McCarthy. I hope articles like this help as I love being your small business advocate.

 

Interested in having me speak at your next event? You can view my speaking packet here.