Monday, February 28, 2011

Inventory Management Part I: Warehouse or Wherehouse?

INVENTORY MANAGEMENT SYSTEMS: Is Your Warehouse a “Where? House?”
Why implementing an efficient Inventory Management System can increase profits.
contributed by Bill Donnelly, Bac2Profit LLC

Success starts with a vision, and visions are realized through effective planning. Effective plans are what separate the winners from the rest of the pack (called competitive edge) and having a solid plan will make operations run smoother, eliminating profit-eroding errors.

The benefits for you may be significant. Successful Inventory Management Systems can reduce warehouse operating expenses by 10 to 35%, or up to 1.0% point to the bottom line (assuming warehouse operations expense is equal to 2.0 to 3.0 of sales). Imagine what a 10 to 35% reduction in inventory carrying costs would translate into $$$ savings!

Maintaining an accurate count of the products in your warehouse by quantity and location will allow you to monitor and regulate storage at the SKU level, as well as, the corresponding shipping and receiving traffic. Keeping the “where?” out of your warehouse will make your business more profitable, while lowering stress levels for you, your customers and employees.

Are inventory transactions (i.e. internal movement, decrements, receipts, etc.), that can make major differences to your financial results, being accurately tracked? Have you evaluated your inventory tracking system lately? Is it as efficient as it needs to be? If not, what have you done to improve?

Thanks to Bill of Bac2Profit for Parts I & II on this topic. Check out his blog at: and OED's Community at for more operational tips and insights.

Friday, February 25, 2011

Is Your Small Business Exporting?

The Wall St. Journal is reporting today on growth initiatives by the federal government in regard to trade imbalances. These goals are aimed squarely at a sector often left out in the export game: Small Business.

Very interesting article, and raises some questions we need to pass along:
  • Do you know small businesses exporting?
  • If not, why not?
The article, written by Sudeep Reddy, is excerpted below with continuation at the jump:
"U.S. trade officials are ramping up their export-growth initiative by targeting a key constituency that often feels left behind in the economic recovery: small businesses.

In an interview, U.S. Commerce Secretary Gary Locke said large U.S. corporations — which have vast marketing staffs around the world — already get “the full force of government” to help close contracts with governments and companies abroad.

But smaller firms haven’t gotten the same attention until recently, Locke said. Now they’ve become a central part of the Obama administration’s outreach effort as it aims to double American exports over five years. Expanding exports at U.S. firms would boost their sales and likely lead them to create more jobs, from engineering offices to factory floors.

'We need to help the small- and medium-sized companies,' he said. 'If they really want to grow their revenues and diversify their revenues, they need to look at the fact that 95% of the world’s consumers live outside the U.S.'

This month, several agencies — including Commerce, the Small Business Administration, Export-Import Bank and the United States Trade Representative — launched a nationwide tour to visit cities around the U.S. and work with local governments and nonprofits to encourage smaller companies to export.  They carry a key set of statistics: Only 1% of U.S. companies export, and 58% of those firms export to just one country, typically to Canada or Mexico. The officials are trying to get smaller firms connected with the U.S. export machine, such as the Export-Import Bank, which provides financing for firms looking to export and can guarantee payments by foreign buyers." read more

Tuesday, February 22, 2011

Reducing Account Receivables Puts Cash in your Pocket

OED Certifed Advisor Dana Komar gives one pretty solid way to build cashflow. We could all use a little more of that, couldn't we?
Ignoring your outstanding receivables can restrict you from having enough cash flow to properly invest in your company or to pay your vendors on time. This can earn you a reputation as an unreliable business partner or result in unnecessary spending on late payment fees. If this the case, you have to make sure you are not creating the situation yourself by allowing your customers too long of a collection period compared to your payment terms. There are a few things you can do to reduce the time lag between when your customers buy the product and when you receive payment, without wasting time hassling them.

For instance, the faster you invoice them after the order, the sooner their payment deadline will be. To make this easy on yourself, email your invoices rather than using snail mail. It is important to have the exact due date the invoice, rather than just the terms. Make it easy for your customers by allowing them to pay electronically and by credit card. PayPal is a secure convenient payment method and you can put a link right in your invoice email. Also, be sure to have clear penalties for late payments. Your vendors have them, so why shouldn’t you?

Monday, February 21, 2011


OED is once again providing a $500 prize and promo pack to a deserving small business! Simply visit for details and the application.

Applications are being accpeted now through March 15. Winner will be announced March 31. Enter and share the link with your colleagues, clients, vendors... you name it! Entrepreneurs helping entrepreneurs~ It's what OED's all about!

The OED500 is a quarterly program sponsored by The Organization for Entrepreneurial Development. OED is a 501(c)(3) whose mission is to support entrepreneurs through a variety of media and methods such as live training, professional development, webinars, networking events, knowledge base access, and idea exchanges.   

Wednesday, February 16, 2011

What makes a great ad?

The answer is almost too simple.

A good ad is one that works. Your phone rings. Buyers walk through your store door. Your salespeople have prospects to see. Your e-mail order forms are full.

On the other hand, bad advertising is one of the most disappointing experiences a small business can have. You spend your hard-earned ad dollars with high hopes, only your hopes and expectations dashed with a complete lack of response.

Here are three critical items to keep in mind to make your ads draw customers and sales:

1. Figure out what means the most to your best prospects. What do you offer that they'll value most? State that best benefit clearly and prominently in your ad. If you've got lots of space or radio time, repeat your benefit at least three times.

2. Tell your prospect to buy. Ads that don't come right out and ask for the sale usually fall short. Tell your prospect to buy, why they should buy, how they should buy, and when to buy. Take a look at pricey ads designed for big companies. They almost always tell you exactly who they think needs their product or service, which store or web site you can buy it from, how to get to that location, what kind of cards or financing they take, and when the offer will begin and end.

3.Finally, pick your advertising media carefully. Don't advertise a specialty service for a particular industry in your daily newspaper unless your town is dominated by that particular industry. Instead, chose a trade publication that specifically targets that one industry.

4.Simple? Yes it is, as long as you make the whole advertising process a real PROCESS!

Do a features, advantages and benefits work-up and determine your key benefits.

Talk to you customers and find out why THEY buy.

Use professionals where you can – they can save you hours and dollars by helping you develop a process that works and once it’s developed – you have it forever.

Monday, February 14, 2011

Test Your New Products--Without Spending a Fortune

Can small companies really expect to do the same level of product testing as large corporations with multi-million dollar marketing budgets?

While they usually can't spend the same amount of money, owners of small businesses have significant advantages not only in product testing, but in the whole area of market research: They usually have extensive familiarity with the marketplace.

Owners can use their experience to develop product testing programs that aren't necessarily very expensive. Still and all, business owners should be prepared to conduct research that includes the following components:

1. Doing a survey. This requires constructing a questionnaire, locating prospective customers, and getting their answers to the questions (typically by telephone or via a mailed questionnaire). Some major corporations even conduct these kinds of surveys in supermarkets or shopping centers. With some representative sampling of several hundred prospects, it is possible to draw conclusions about what they want or don't want. Unfortunately, this is an expensive and time-consuming approach to market research that most entrepreneurs don't have either the money or the patience for.

2. Interview potential customers. The focus group approach entails getting five to ten prospective or existing customers together in a group for an hour or two to probe their feelings about a particular product or service. While the results aren't statistically reliable because such a small group is being sampled, the input is extremely valuable. Many successful entrepreneurs lean toward the second approach, trying to compensate for the absence of statistically meaningful responses by listening carefully as people respond to questions and ideas.

3. Assessing the competition. If there is one area where successful entrepreneurs agree that academic type research can be useful, it is in the area of competitive information. They know that it is essential to know as much about the competition as is humanly possible, and the best place to get that aside from on-site observations is at libraries, through electronic data bases, and via literature put out by competitors.

4. Learning from others. Has your competition already tried your idea? Are they still using it? Why or why not? Answering such questions can help you avoid errors and learn from the mistakes of others.

5. Testing a prototype. A prototype of a product or service is basically a trial version--a single model or small batch of product or an experimental version of a service. Prototypes become more important as the expense of the product or service rises. The last thing a new company with a $10,000 or $20,000 product wants to encounter is a serious flaw or customer complaint after hundreds or thousands of the product have been produced.

Clearly, owners of small businesses can compensate for their lack of major marketing budgets with careful planning and close listening. The key for owners is to use their knowledge of the marketplace to ask the right questions and fill in the missing data that leads to successful decisions.

Saturday, February 12, 2011


"Change your thoughts and you change your world." - Norman Vincent Peale

"When I was young, I observed that nine out of ten things I did were failures. So I did ten times more work." - George Bernard Shaw

“The person who chooses to try something and fails is a far greater person than the person who chooses to try nothing and succeeds!”

“The difference between the successful person and the unsuccessful person is that the successful person is willing to do that which the unsuccessful person is not!”

Wednesday, February 9, 2011

Time Management and the Business Owner - The 13 Month Year

Time! It can be your worst enemy or your best friend...depending on how well you manage it. The successful business owner recognizes it as his or her most precious asset.

Time in perspective: We all get the same allotment of 24 hours each day. For the disorganized who squander their time, letting it slip through their fingers, it is an enemy. But for those who know how to marshal time to their advantage, it is a good friend. It allows them a comfortable pace all week, to take weekends off, to enjoy their families, and still accomplish twice as much as the rest of the world.

Time offers a special challenge for the business owner. That's because the job appears never to be done. The lucky ones get burnout; others get heart attacks. It's no way to live. And it's certainly no way to run a business.

For a business owner, time management is not just a nice idea. It's the cornerstone for building better, stronger, faster and more profitable business.

To improve both the quality and the quantity of the time available to you each working day, follow these simple guidelines:
1. Do a "time audit." Using 15-minute intervals, record how you make use of your time during a typical work day. A common complaint of many business owners is that they don't have enough time to get everything done. However, simply conducting a time audit from time to time will generally show a number of easy-to-correct time wasters.
2. Establish priorities and measurable goals. If you don't know what you want to achieve, then it doesn't matter what you do to achieve it. Without priorities and goals, every action is a time waster.
3. Eliminate busy work, tasks you simply don't need to do...all things that do not lead either directly or indirectly to your business's growth and profitability. Look for ways to cut unnecessary steps out of work routines. If it isn't important, don't do it. Every action during work time should be goal-directed -- whether it's a phone call to a supplier, business meeting or a golf game. If it's not, stop doing it.
4. Invest in daily planning. Taking just ten minutes each day to map out projects and tasks on a "To Do" list can save hours of wasted time. Planning empowers you to move systematically through the important tasks of the day without wondering what to do next. Caution: Don't make the common mistake of planning out every minute. Leave a little open time to handle the unexpected. Otherwise, you'll end up playing a frantic game of catch-up day after day.
5. Delegate! Delegate! Delegate! If you're like most business owners, you have a difficult time letting things out of your grasp. But that's exactly what you must train yourself to do. Delegate everything you can...not simply what you must. Not only will you have more time for things that only you can handle, but your business will profit, as well.
6. Make a pledge to never work weekends or evenings. This forces you to structure your time more efficiently...and allows you to enjoy some of the benefits of the life you are working to build.
7. Live in two distinct worlds. When you work, focus all your attention on the business of business and maintain a strong, demanding pace. But when you break from work, break completely. This means no briefcases home on weekends or even thinking about work when you should be relaxing. Instead, make your free time really free. This will improve the quality of work time and family time.
8. Add time to your day by coming in a bit earlier each morning or by cutting out such time wasters as television in the evening. You'll be amazed how it can pay off. Try building what's called the 13-month year.
The 13-month year: There's only so much you can do to make your time usage more efficient. Once you crank up the quality, add some quantity, as well. Say you are currently working eight hours a day...from eight to five, with an hour break for lunch.
Add a single extra hour each day. There are plenty of places to find the time without impacting your personal time. Start an hour earlier, stay an hour later, divide up two half hours at the start and end of the day, or cut your lunch hour in half. Just make sure you don't slice into family time or weekends... which are crucial for recharging your batteries.
The results can be incredible. Adding just one hour a day means five extra hours a week or an average of 22 hours more a month. If you normally take four weeks vacation, this single hour each day can generate an extra month of business an additional two weeks vacation.
The bottom line: You don't have to become a time management expert to capitalize on the benefits of more effective use of your time. But keep in mind that the better you become at organizing yourself and your time, the more you will improve the odds that you will achieve your goals and keep your business both productive and profitable. Because time is more than money. Time -- specifically, how well you use it -- is a key element of long-term business success...and personal satisfaction.

Friday, February 4, 2011

Is A Plan Enough?

OED Certifed Advisor Dana Komar discusses the need for planning, and the equally great need to revisit it to be sure it's as fluid as the world can be.

You have a plan…but that’s not enough to be successful in your business.
The only thing certain in life is uncertainty. How many times have you heard that saying? As a good business owner you know the way to manage uncertainty is to have a plan when it comes to all aspects of your business – strategy, marketing, operational processes, etc. Unfortunately, the reality is that only in the rarest of circumstances does your plan work out exactly as you want or expect it to. When this happens, it is very easy to let your pride take over and continue to forge ahead in the same direction you were going, even though it may not make sense anymore – like forcing a square peg into a round hole. This will certainly cause you to experience extreme frustration and discouragement, ultimately leading you to failure.

That is why simply having a plan isn’t enough. Your plan needs to be fluid and adaptable so that you can handle the unexpected as reality unfolds. The first thing to do is review your plan and ask yourself what could go wrong? How will you know if and when it does go wrong? You need to create observable measurements that you can use to monitor your progress and let you know if you are on the right track. Some examples are a revenue target, a budgeted cost, or a level of customer satisfaction. Come up with a list of adjustments you can make to put things back on track, depending on what could go wrong. This could include a list of alternative sales and promotion methods, other potential suppliers, or a variety of customer reward programs.

The most important things are to go through this exercise ahead of time and proactively review your progress along the way. Waiting until things go wrong to come up with a contingency plan increases your propensity to become frustrated and respond by sticking to your original plan no matter what. By preparing for a variety of circumstances, you will be in a better position to handle the situation as soon as it arises, which will allow you to maintain your momentum and focus. Just remember that in the end, it is better to be proud of your ability to adapt your plan, build on what you have already done and learn from your mistakes, rather than be proud of creating a plan that doesn’t work.

Tuesday, February 1, 2011

Advertising and Public Relations

That is the kind of ad I like. Facts, facts, facts. - Samuel Goldwyn (1882–1974), U.S. film producer.

Advertising is the paid form of a non-personal message communicated through various media.

Advertising is persuasive and informational and is designed to influence the purchasing behavior and/or thought patterns of the target audience.

The most powerful advertising is advertising that can accomplish two things effectively.

First, it must remove all of the risk from the prospect's side, thereby making it risk-free for the client/customer to respond to your ad. This is critical because most of the people who will answer you ad have never done business with you before! When you assume the risk FIRST, you make it easy for your prospect to pick up the phone or come in and begin a dialogue with your company… all without risk.

The next thing that is important is that you must offer something of value to the person who makes the effort to visit or pick up the phone and call your company. Use videos, special reports, booklets, newsletters, fact sheets, or other "free" items that appear to have significant value to the prospect. This is especially effective if the information is not available elsewhere.

Actions Speak Loudest in Keeping Customers Satisfied

Actions Speak Loudest in Keeping Customers Satisfied
 “First we will be the best, and then we will be the first.” – Grant Tinker – American TV executive
The key to customer satisfaction is service, and there is no limit to the best customer service.
Take the example of a software copying company that had worked over the weekend to meet the deadline of an established customer. After the company finished the duplicating and packaging on Sunday, it received a call from the customer complaining that the prototype copy of the software was bad. Never mind that the customer had previously verified the prototype.
The company immediately sent a new prototype and worked literally around the clock to finish the order only one day late. Moreover, the company declined payment for the extra work. At the customer's insistence, the company agreed to bill for $2,500 labor only. A check soon arrived, but for $5,000 instead of the requested $2,500. A case of champagne accompanied the check. The goodwill created by this special service was incalculable.
Making it happen. Here are some suggestions for keeping customers happy over the long term:
1. Top service starts at the top. The most important way for a CEO to signal support for a service orientation is by his or her actions, not words.
2. Don't neglect maintenance and repairs. Even if you only break even, don't turn customers off by failing to offer maintenance and repair work or doing it poorly.
3. Monitor your customers. Try to contact all customers, either by phone or letter, at least once a year to check with them as to how well you are serving their needs. This survey can be as simple as asking customers to rate your performance on a scale of 1 to 10.