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January 03, 2002

Table of Contents

Welcome

Quote of the Week

Staff Article - Goal Setting for the New Year

Tax Tip of the Week

Guest Article - Beat Your Competition Without Cutting Your Price

Parting Comments

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Welcome

Thank you for subscribing to the Peak Small Business Center Small Business Newsletter! We take our obligation to provide you with useful information very seriously. As a result, we always welcome your input on articles or other information you would like to see presented here.

As most of you know, we have switched to a text-based version of our newsletters. Many of our readers subscribe to our newsletters from places on the web other than our website. On our website, you can choose whether you want to receive the html version or text. At other sites on the web, you don't have the choice. As a result, we saw a lot of "bounces" due to the size of the html newsletter and many were having a problem viewing the html version in their email clients. For those of you who prefer the html version, you can find both the Small Business and Home Business versions on our website at the following locations:

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sbnl_jan0302.htm

If you still prefer to receive the html version in your email inbox, let us know by emailing us at:
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Our guest article this week is "Beat Your Competition Without Cutting Your Price," by Bob LeDuc. We think you will enjoy it.

If you have suggestions for future content, or have issues that you would like to see specifically addressed, please send an email to let us know. Our staff articles are focused directly on issues raised by you, our readers. We want to give you what you want to see! If we use your article topic in one of our newsletters, we will send you 100 hits to the website of your choice! So please, send in your topic ideas!
 


Quote of the Week

I have noticed that nothing I have never said ever did me any harm.
--Calvin Coolidge


Staff Article

Goal Setting for the New Year

by: SBC Staff

If you haven't done so already, it's time to start planning your business strategies for the new year. You should never begin a year without knowing where you want to end it. As the old saying goes, if you fail to plan, you plan to fail.

Planning is not an exercise only for large companies. In fact, smaller businesses are probably more in need of planning than their larger counterparts. A large business may be able to survive if it doesn't plan or plans poorly. A small business normally does not have the resources to waste on poor planning.

An adequate plan for the year will include both short term and long term components. It is important to identify the overall goals for the year, but equally important to identify the small targets along the way that must be hit in order to stay on track.

SETTING YOUR OVERALL GOALS

First and foremost, be very, very specific and make sure your goals are reduced to writing. Don't write "This is the year my business will create enough profit for me to retire." You must be more specific. This phrase can be broken down into multiple goals that are easily defined, easily tracked, and easy to break down into multiple small steps to be taken during the year.

For example, the following goal statements might all be derived from the vague goal statement given above:

* We will increase sales by 20 percent during the first six months of the year, and by 30 percent during the last six months.

* While increasing sales we will hold cost of sales and expenses to a modest six percent increase for the year.

* We will use our increased profits to pay off our credit lines by yearend and be debt free.

* and so on.

You'll need to prepare at least high-level income and expense projections in order to evaluate how realistic your overall goals are. What might seem totally realistic in words might seem quite impossible in numbers. If the 20 percent increase in sales during the first six months of the year requires an increase in advertising of 20 percent, your goal of only a six percent increase in expenses might be blown. Then again, it might not. You need to run the numbers to find out.

CREATING YOUR SHORT TERM GOALS

Your short term goals are composed of the individual steps you must take to accomplish your overall goals. Take each of your overall goals and list the steps required to accomplish them. Once again, be specific.

For example, what will it take to increase sales by 20 percent during the first six months of the year? Your short term goals with respect to this one overall goal might be:

* We will increase spending on our five most effective advertising campaigns (list them specifically) by 30 percent.

* We will train our sales people to cross sell products and services to our existing customer base. We will identify at least one additional product or service needed by every customer in our current customer base.

* We will aggressively pursue "target market A" by focused special sales promotions and targeted discounts.

* And so on.

Once again, you'll need to incorporate these assumptions into your  projections to make sure they make sense and are sufficient to accomplish your goals. Set up specific time lines for each step so you can track your progress.

If your progress slips on any short term item, you'll have to reevaluate your ability to accomplish your overall goals or possibly adjust your strategy. The important thing is to enable yourself to react by knowing where you stand at any point in time.

If you haven't actively set goals and prepared financial projections in the past, you may find that your assumptions are way off base.  For example, let's say you find out that increasing advertising in your five most effective advertising programs by 30 percent only results in a five percent increase in sales, but that your focus on selling into your existing customer base simply explodes your revenue. Let's further assume that this is exactly the opposite of what you thought would happen.

Your projections will be wrong, but you will have learned some very valuable information that will benefit you for years to come.  Chances are you wouldn't have noticed what was happening without setting both the long and short term goals, preparing the projections and then tracking your results.

OTHER GOALS

The goal setting process will help you to identify other areas of your business where improvement might be required. For example, if one of your goals is to increase spending in your five most effective advertising programs, you need to know very precisely how effective your advertising programs are. If you don't have a system in place to track the effectiveness of your advertising, this will inhibit your ability to properly plan and implement your strategies. So one of your goals should be to implement such a system.

Also, don't concentrate so much on numbers that you lose track of other processes that could increase profits and make your business more valuable. Set goals for improving efficiency and building the intangible value of your business.

THE BOTTOM LINE

This article gives you some broad guidelines for plotting your strategy for the coming year. Use them to stimulate your thoughts about your own business and then sit down and dedicate some time to the process. No one really likes to set goals, subgoals and prepare projections, but it is absolutely necessary if you are going to grow your business to its full potential.

Copyright 2001, all rights reserved
 


Tax Tip of the Week

Did you lease computer or other equipment during the last year? Need some additional deductions for 2001? If your lease runs for the useful life of the equipment and contains a below market value purchase option, you may be able to treat the lease as a purchase.  If you treat the lease as a purchase, you'll have to recompute the lease as if you purchased the equipment under a financing arrangement. Your total payments under the lease will be part principal and part interest. The principal portion of the lease would qualify as the purchase price of the equipment and could be written off in full during the current year as a Section 179 deduction (subject to certain limitations). The interest would be deductible each year as the payments for the equipment are made. The overall effect of this tip is to load the deduction into 2001. It will reduce your deductions in future years since your lease payments will not be deductible as equipment lease expense.
 


Guest Article

BEAT YOUR COMPETITION WITHOUT CUTTING YOUR PRICE
Copyright 2001 By Bob Leduc
 

One way to beat your competition is to charge less for a similar product or service. But you can also beat your competition when your price is higher. One of the best ways to avoid price competition is to become a specialist in a narrowly defined targeted market.

RELATING IS MORE IMPORTANT THEN PRICING

I recently spoke with the creator of a marketing program for new business owners. He could have confronted the established competition and competed with a lower price. Instead he decided to target prospects in 2 types of businesses he had worked with before -- insurance sales and MLM marketing. He knew a lot about the operation of each business and the people who worked in them.

He created a separate web site for each type of business and customized the content to appeal specifically to prospects in that business. The site for insurance sales people looked the same as the site for MLM marketers. But the content was totally different.

His plan worked. Sales are running almost 50 percent ahead of projection ...even with a price that's 15 percent higher than similar programs. He built a successful business in a highly competitive market by becoming a specialist.

CUSTOMERS LIKE TO BUY FROM A SPECIALIST

People like to do business with a specialist who has a unique insight into their situation. They feel confident about getting what they expect from a product or service when it is proposed by somebody who understands them and their unique needs.

Most customers or clients will even pay a little more to buy from somebody who thinks like them. It's worth it to avoid the risk of being disappointed because they bought from somebody who didn't know anything about their special situation.

YOU'LL SELL MORE AS A SPECIALIST

Targeting a niche market enables you to design your sales messages with great precision. You can cater to specifically defined interests of prospects and communicate with them in their own style. More people will buy when they feel you are talking directly to them about their individual needs.

SPECIAL BENEFIT: When you deliver results as a specialist you also establish yourself as an expert in your field. Customers will automatically refer other prospects to you. They value what you did for them. And they're confident you can deliver the same results for others.

3 SIMPLE STEPS TO BECOMING A SPECIALIST

Becoming a specialist is easier than you may think. You can accomplish it in 3 simple steps:

1. Divide your primary market into several narrowly defined markets.

2. Take each market, one at a time, and learn everything you can about the prospects in it.

3. Revise your marketing approach and selling materials to appeal to the specific needs of prospects in each new market. Use their own unique language and style of communication.

TIP: Existing customers who match the profile of prospects in a market you've targeted can help you develop your sales approach for that market. Contact some of them and ask why they bought your product or service. What do they like best about it? Why did they choose you instead of a competitor? They'll give you a lot of information you can use to develop your appeal to other prospects who are like them.

You'll always have competitors. But you don't have to lower your price to compete with them. Instead, become a specialist and cater to prospects in a narrowly defined targeted market. Your understanding and insight into their unique situation will establish you as the expert in your field. They'll want to do business with YOU even if you don't offer the lowest price.

*****

Bob Leduc retired from a 30 year career of recruiting sales
personnel and developing sales leads. He is now a Sales Consultant.
Bob recently wrote a manual for small business owners titled "How to
Build Your Small Business Fast With Simple Postcards" and several
other publications to help small businesses grow and prosper. For
more information...
mailto:BobLeduc@aol.com?subject=Postcards
Phone: (702) 658-1707 (After 10 AM Pacific time)
Or write: Bob Leduc, PO Box 33628, Las Vegas, NV 89133
 


Parting Comments

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