January 03, 2002
Table of Contents
Quote of the Week
Staff Article - Goal Setting for the New
Tax Tip of the Week
Guest Article - Beat Your
Competition Without Cutting Your Price
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Quote of the Week
have noticed that nothing I have never said ever did me any harm.
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
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
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.
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
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
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
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
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
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
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
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
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
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
Phone: (702) 658-1707 (After 10 AM Pacific time)
Or write: Bob Leduc, PO Box 33628, Las Vegas, NV 89133
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