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Increase Profitability

Growing to Profitability

A new entrepreneur faces a steep learning curve with no mentoring.

Ed Hatton

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Challenge

An entrepreneur started a website to provide youth with a free service for employment and small business opportunities. The income comes from web publishing and affiliate programmes. He has no IT background and has to learn operations, marketing, finance and everything at once. He also doesn’t have anybody to bounce new ideas off.

SOLUTION

This entrepreneur, operating in a rural area, wanted to make a difference to young people and small businesses. The website breaks even but he is frustrated at the slow growth and his own lack of knowledge. This is a near-universal problem with new businesses, the learning curve is both steep and multi-disciplined. Affordable advisors are hard to identify.

Learning and getting advice

Finding appropriate learning opportunities and information while running a new business is a challenge. There are many courses advertised and choosing the right one is crucial for entrepreneurs on tight budgets and limited free time.

Start with the free information on the Internet. Entrepreneur magazine’s website at www.entrepreneurmag.co.za is a valuable resource, so is the SME Toolkit (www.southafrica.smetoolkit.org) and many others. There are many great business blogs which start-ups can follow at no cost, including my own at http://marketingstrategy.co.za. It takes time and patience to search for good information, but this is time very well spent.

Entrepreneurs should not be afraid to ask for advice, but only when they have done the basics. Many business people are happy to help, but don’t expect them to come up with answers when the entrepreneur has been too lazy to investigate options. Start with a successful business nearby that is not in competition with yours and ask the managers for assistance. This works well in the Internet world, where free advice is a part of life. Coaches and mentors are available for a fee, but set the expectations and budget in advance.

Will the idea work?

The entrepreneur’s second concern is marketing, but before thinking about marketing, all entrepreneurs should be able to answer the question: How can I satisfy customer needs profitably and sustainably?

His business addresses a huge need, but he must show evidence that he is satisfying the need, not just attracting browsers. His challenge is measuring the success rate and then getting enough seekers and providers to use the site. If that happens advertisers and service providers will be attracted to his site.

Will his business model work sustainably? Will it generate sufficient cash flow? The entrepreneur must plan how and when this will happen, and test the plan for potential weak spots. Then he needs access to experienced mentors to check his assumptions and act as sounding boards. All start-ups should investigate where they can pose questions to experienced business people. This may be by asking questions over the Internet as this entrepreneur did, or by finding a local mentor.

Marketing

Once the entrepreneur is clear about which audiences he needs to communicate with, and his target numbers, including site visits, successes, advertisers and service providers, he can start to structure marketing promotions. The business is Internet-based so it makes sense to use the Internet as the primary marketing medium. Beware, there are many incompetents styling themselves as Internet experts. Check references with a knowledgeable source.

Social media engagement, email campaigns to companies, SMS notifications to job seekers, RSS feeds from sites that publish tenders and offer jobs and reciprocal links to blogs and sites providing useful information should all generate traffic, and a percentage of these will become jobs filled and tenders won. The learning curve on how to use these tools is steep but can be done with the free resources on the net. Look in the help files and forums on Facebook, WordPress and Google as well as the many blogs. There are many free or low cost e-books and courses on website design, web marketing and attracting visitors to websites. The rules of engagement on the Internet change all the time though, so this means an ongoing commitment to learning.

Ed Hatton is the owner of The Marketing Director and has consulted to and mentored SMBs in strategy, marketing and sales for almost 20 years. He co-authored an entrepreneurship textbook and is passionate about helping entrepreneurs to succeed.

Increase Profitability

What To Look Out For When Seeking A Mentor Or Coach

There is value in choosing a mentor or coach to help you build your business, says Dr John Demartini. Here he offers some sound advice on how to go about doing this so that you benefit from the experience.

Dr John Demartini

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When I was in practice I noticed many doctors attempting to build a business would seek out mentorship from management consultants, from people who have already been down that path. And there’s wisdom from learning from foresight and not learning from trial and error. But there’s a pitfall – I noticed that not everybody is able to do or sustain the actions that these consultants would suggest. Where some would follow and immediately go and succeed, there were others who would sometimes feel self defeated because they couldn’t sustain the actions that the consultants would suggest and recommend.

So a small percentage would excel and do extremely well. But there were those who would spend their money on the coaching and they’d never get anything in return.  So the question is – what made the few excel with the help of a coach, consultant or mentor? And why is it that the majority of them didn’t do as well? And it boils down to how congruent the actions of the coach or consultant are with the values of the person that’s striving to build a business.

I have listened to numerous professional consultants all offering slightly different information about how to build a business. I have taken and learned from all of them. Some of them would suggest things I just couldn’t do – it just wasn’t me – and other things that I could do. And when I couldn’t do something, the coaches and consultants believed I just was not disciplined, not driven. They would imply that I didn’t have the drive… Their material works, but I wasn’t following it.

And those of you who have had the same experience will understand what I’m saying. And you need to know that the reason you don’t do what these coaches suggest is because it’s not aligning to your values. So you are labeled lazy, undisciplined, not driven. You are given these labels instead of realising that you’re self defeating because what they suggest is not congruent with your values. And so you go to different consultants until you finally find the one who matches, whose values are aligned with yours.

So it’s important to not envy and imitate somebody with a drastically different set of values. If you’re seeking a coach or mentor, make sure the coach/mentor has a value system that is closely enough aligned to yours or you will be setting yourself up to fail. Just because somebody is successful doesn’t mean if they are your coach or mentor that they will have the values that will lead you to that same form of success. You need to either shift your values to be able to succeed in their system or you need to find the mentor that aligns more with your values. Otherwise you’ll be beating yourself up thinking there’s something wrong with you when there’s nothing wrong with you. When you find the right mentor, you will take off.

So you either have to change your values to match the objectives of the coach, or change the coach to match the truth of your own values.

So the bottom line is, if you’re going to get mentorship, coaching or consulting from somebody, don’t just select the person because they’re successful. Select them because they’re successful and they have some alignment with your mission and your values. Make sure you select your mentorship and a consultant that is truly valuable to you; don’t live in a fantasy about who you are.

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Increase Profitability

The Link Between Scaling, Relationship Building And Technology

It is the first solution of its kind in South Africa, this platform supports entrepreneurs to effectively establish legal foundations in their businesses for optimum growth and overall business success.

Nicolene Schoeman-Louw

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The challenges and opportunities of this new world and that the world is more connected than ever. The constraints of distance is no longer applicable and as a result business has little constraining borders. Networking is therefore still a component in key relationship building.

It brings me to my real point – in a world so busy and connected, what we cannot make more of is time and time, unlike any other commodity is invaluable when it comes to forging important relationships and sustaining them. So, if technology can break barriers when it comes to legal cost and time spent on it… why not? Especially when so many have experienced the consequences of not documenting the most important relationships in their business.

The SchoemanLaw SME Self- Service DeskTM is the ideal tool for any member-based organisation wanting to capacitate and empower members. It is an affordable and reliable online solution for start-ups and SMEs, where Users can customise and download their own contracts online and in minutes. It is the first solution of its kind in South Africa, this platform supports entrepreneurs to effectively establish legal foundations in their businesses for optimum growth and overall business success.

The following documents are examples of those available on the platform (currently hosting over 35 documents / agreement types):

  • Confidentiality and Non-Disclosure Agreement (“NDA”)
  • Independent Contractor Agreement
  • JV Agreement
  • MOI and Shareholder’s Agreement
  • T&C’s
  • Supplier Agreement
  • Letter Demanding Payment
  • Various HR Documents and Company Resolutions
  • BBBEE Affidavits (EME and generic QSE)

and many more!

Prices range from R195 and R895 per document if downloaded on a pay- as- you- need- basis or R249 / R495 per month on a subscription basis, this is over 75% less than usual rates if traditionally drafted by an Attorney. What is more, Users have the support of a Law Firm not only having created, but who maintains the platform and supports each User. We even offer customisable solutions. So, there support and a solution for any business regardless of size and industry are on offer.

The platform is easy to use, no prior legal training is required, and Users are supported through help texts, free podcasts, videos and training events. In the case of a legal incident occurring, you can consult with an attorney with the click of a button.

The platform is also ever evolving and completely customer- driven.  Documents are added as and when customers request them. All the documents are also frequently updated to ensure that they align to the latest best practice. There is no need to leave your legal needs unattended ever again!  The SchoemanLaw SME Self- Service DeskTM  therefore ensures that SMEs are no longer invisible and capacitates them to free up time needed to build relationships, grow and scale their businesses.

Empower your business today, go to: https://www.schoemanlaw.co.za/online-legal-services/

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Increase Profitability

5 Winning Ways To Strengthen Your Bottom Line This Year

Let’s get down to the nuts and bolts of your profitability.

Revel Africa

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The beginning of the year is upon us, and the question everyone is asking is, “How are we going to make this year more profitable than 2018?” Break away sessions to strategies are always good, however, the most effective organisations know that the best ideas didn’t come from high-level planning, rather, they come from the field.

1. Your winning market

The saying goes, ‘The riches are in the niches.’ This year, stop spreading your sales focus thinly across several markets. Review your data on the which niche or subgroup of buyers make up your best customers. Then laser focus your best sales efforts and talent on these prospects this year. If you don’t have data on your buyers, then make a commitment to invest in your CRM software this year, so that next year your focus can be accurate.

Related: How Excellent Customer Service Affects Your Business’ Bottom Line

2. Your winning product or service

Don’t let chance dictate which sale you focus on, rather identify which of your products or services has the highest margins. Your data will tell you which products or services you should focus your sales efforts on this year, and which you should phase out, or simply terminate immediately.

3. Win more customers

You have a big budget for your lead generation, but invest more this year on optimising your lead conversion rate. No matter what industry you are in, or if you convert leads digitally or face to face, your ability to turn leads into sales is a potent leverage point to increase profits. For example, if you increase your conversion from 20% to 25%, that 5% increase in conversion will lead to a 20% or more increase in profitability (assuming your costs stay steady.)

Consider a sales coach to refresh your sales team’s conversion strategy, or review your digital data, landing pages, and automation strategy with a reputable digital marketing agency.

4. Whittle down waste

One immediate way to see your bottom line improve this year is to keep a tight rein on your sales team giving out discounts and freebies, and on your production team’s unregulated wastage. You’ll be surprised when you add it all up how much profit you’ve lost this way. Set boundaries over what is and isn’t okay for your sales team to do during the sales cycle.

Rather create bonuses or value adds that they can add in that have high perceived value but low cost of goods sold. For example, you might offer two free training classes to a new customer when they buy a year’s subscription to your software service.

A training class has a high value, but likely costs very little to add more seats to the room. As far as your production team goes, if you haven’t already, you should invest in business software that tracks productivity in your team, as well as in your machinery and equipment, to improve efficiency and reduce wastage. This alone is worth the investment costs of the software.

Related: Strong Company Culture Fattens The Bottom Line

5. Say ‘No’ to scope creep

Scope creep is when your customer alters the scope of your product or service after the initial agreement of work has been signed off, but with no alteration to the initial quote.  It is excessively common and can be very detrimental to a bottom line in service businesses.

This year, be clear about what is and isn’t on offer in the quote, and if there are any adjustments down the road, inform the client upfront of these additional costs. Wait for approval before starting the work. Be clear about prices for common extras that clients may want and let them know you’d be happy to provide these additional items for them at these pre-agreed prices. This could also be an opportunity for gentle upselling.

With this in mind, may 2019 see your bottom line grow from strength to strength.

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