New Business Direction LLCMy inability to say “no” led me there. It was the place I feared the most – a room full of people, all eyes on me, making a presentation to an audience of my peers.
So, how did I get there?
I had been approached by The Home Builders and Remodelers Association, of which I have been a member since the late 1980s. They had asked me to present a topic of my choosing – one that would promote my business and educate the members.
Caught off-guard, I’d said, “Sure. I’d love to.”
The words came out of my mouth so fast, it was as if I was possessed.
“Who said that?” I asked myself. “How did that just happen? What was I thinking? Now what?”
Panic began to set in. “Breathe in, breath out, 1, 2, 3…….breathe.” I had to remind myself of this over and over just to keep from passing out. Thanks to Toastmasters, I’m ready to take on all kinds of exciting new challenges. I can feel the fear, and do it anyway.
After years of anxiety about public speaking, suddenly, there I was, facing my fear head on.
I didn’t know how I would pull it off, but I had made a promise, so I had to make it work. Little did I know, as soon as I’d committed, the Law of Attraction already had been set into motion.
Not long after, a friend of mine called to tell me that Toastmasters was starting a new club in town. She wanted to go. Perfect timing. Toastmasters was exactly what I needed, when I needed it. The universe had delivered for me.
The support was amazing. I found camaraderie with others who shared similar goals and fears. I practiced public speaking, received constructive criticism, and watched videotapes that helped me recognize and control my nervous movements. Through the Toastmasters experience, I began to build confidence and overcome my life-long fear of public speaking.
Today, two and a half years later, not only did I make it through that first presentation to the Home Builders Association, but I’ve also have given scores of other speeches: four tax conferences; the QuickBooks Boot Camp Series at the Granite State College Technology Center; the New Hampshire Tax and Accounting Professionals; a panel discussion in New Orleans at the Scaling New Heights conference; and the Successful Implementations at Scaling New Heights at Atlantis in the Bahamas earlier this year.
None of this would have been possible without Toastmasters. While I still get butterflies before standing in front of an audience, now, instead of panicking, I feel a positive sense of excitement and confidence, which complements my newly acquired public speaking skills.
I actually feel like I know what I’m doing. I’m more confident in everything I do, from client and employee interactions, to presentations at board of directors meetings. Thanks to Toastmasters, I’m ready to take on all kinds of exciting new challenges. I can feel the fear, and do it anyway.
If you’re looking for more ways to bring in additional revenue, then a VIP revenue stream is one option for many businesses. Here are a couple of examples:
A plastic surgeon has a long waiting line of patients. The surgeon sets up a special membership fee of $3,000 per year for patients who wish to work with her. These patients get first access to her appointment schedule. They get priority surgery dates and personal care. Her other patients that do not pay are able to see her physician assistant. She earns an extra $300K — insurance-hassle-free — for the hundred patients who join her VIP group.
A pizza restaurant always has long lines during rush hours. The owner sets up a VIP membership of $75 per year for customers who want to bypass the long lines. He dedicates one of his cash registers to the VIP line and staffs it accordingly during rush hour. He sends specials by email and a birthday coupon to the VIP members. Five hundred customers sign up, grossing an extra $37,500 with little or no additional expenses.
A consultant has a couple of clients that want to have access to her 24/7. She sets up a special retainer of $1,500 per month for these clients and provides her cell number. Since they are busy CEOs, they only call a few times a year, but when they do, she drops everything to be of service. With four clients on retainer, it’s an extra $72K per year for a few days of work.
No matter who your clientele is, there are always a few who demand extraordinary service and are willing to pay extra for it. Capitalize on this by adding a VIP revenue stream to your offerings.
What you include in your VIP package will vary by industry, but here are a few thoughts:
- Increased access to you
- Special service, perhaps via another phone line or checkout lane
- Invitation to exclusive events or sales or previews
- Free gift wrapping
- Free shipping
- Special gifts
- Friends are free
- A richer experience
- Birthday acknowledgement
A VIP offering is not the same as a points program. A points program encourages volume sales, while a VIP program is all about special perks, exclusivity, and a higher level of service.
Does your business lend itself to a VIP offering? If so, give it a try.
Sometimes, the most telling numbers in your business are not necessarily on the monthly reports. Although the foundation of your finances revolves around the balance sheet and income statement, there are a few numbers that, when known and tracked, can make a huge impact on your business decision-making. Here are five:
1. Revenue per employee.
Even if you are a solo business owner, revenue per employee can be an interesting number. It’s easy to compute: take total revenue for the year and divide by the number of employees you had during the year. You may need to average the number in case you had turnover or adjust it for part-time employees.
Whether your number is good or bad depends on the industry you’re in as well as a host of other factors. Compare it to prior years; is the number increasing (good) or decreasing (not so good)? If it’s decreasing you might want to investigate why. It could be you have many new employees who need training so that your productivity has slipped. It could also be that revenue has declined.
2. Customer acquisition cost.
If you’ve ever watched Shark Tank®, you know that CAC is one of the most important numbers for investors. This is how much it costs you in marketing and selling costs to acquire a new client. Factors such as annual revenue, or even lifetime value of a client will affect how low or high you can allow this number to go.
3. Cash burn rate.
How fast do you go through cash? The cash burn rate calculates this for you. Compute the difference between your starting and ending cash balances and divide that number by the number of months it covers. The result is a monthly value. This is especially important for startups that have not shown a profit yet so they can figure out how much cash they need to borrow or raise to fund their venture.
4. Revenue per client.
Revenue per client is a good measure to compare from year to year. Are clients spending more or less with you, on average, than last year?
5. Customer retention.
If you are curious as to how many customers return year after year, you can compute your client retention percentage. Make a list of all the customers who paid you money last year. Then create a list of customers who have paid you this year. (You’ll need to two full years to be accurate). Merge the two lists. Count how many customers you had in the first year. Then count the customers who paid you money in both years. The formula is:
Number of customer who paid you in both years / Number of customers in the first or prior year * 100 = Customer retention rate as a percentage
New customers don’t count in this formula. You’ll be able to see what percentage of customers came back in a year. You can also modify this formula for any length of time you wish to measure.
Try any of these five metrics so you’ll gain richer financial information about your business’s performance. And as always, if we can help, be sure to reach out.
If you grant credit to customers, then you have a balance in accounts receivable. DSO stands for Days Sales Outstanding, and this helps you measure how fast your receivables are being converted to cash.
Here’s how to calculate it:
DSO = Accounts receivable balance / Annual net credit sales * 365.
DSO is measured in days and it represents how many days it takes to collect the customer invoice balance and convert it to cash.
Whether the DSO measure is “good” or not varies by industry as well as the terms you’ve set for your clients. If you’ve set your invoices to be due in 30 days and your DSO is 45 days or less, that’s pretty good. If you’ve set your invoices to be due in 10 days and your DSO is 60 days, then you might want to consider a more aggressive collection policy to speed up your cash flow.
Here are some tips to reduce DSO:
1. Invoice clarity.
Make sure your invoices are accurate and clear. Make it clear whom to make the check out to, where to mail it, the due date, and the amount due. All of these features should be easy to find on the invoice.
2. Consider discounts.
A common discount term is 2/10, net 30. This means the customer can take two percent off their invoice if they pay in 10 days; otherwise they owe the whole amount in 30 days. If you have customers from large companies, discounts are often required by policy to be taken and this can speed up your payments from them.
3. Consider electronic payments.
Going paperless with your invoicing as well as your payment process can speed up the entire billing cycle. Customers getting their bills earlier will also pay earlier.
What’s your DSO? If you need help calculating it, give us a call.
Are you interested in being known for your extraordinary customer service? Or perhaps you just want your customers to feel like it’s easy to work with you or purchase from you. If so, try these five tips for five-star client service.
1. A good old-fashioned handwritten thank you note.
Almost extinct, this customer pleaser shows you are willing to go the extra mile for a personal touch and connection with your client. You can purchase boxes of thank you notes from any stationery store or order them with your company logo from a local printer.
2. Remember your customer’s preferences.
High-end hotels are good at remembering what you like, and almost any business can add this idea by using a CRM – customer relationship management system – that stores customer preferences, order history, last conversations, and any notes you want to remember about the client. The trick is keeping the system notes updated and using them when it counts.
3. Deliver an unexpected extra.
When your customer least expects it, give them more than what they paid for. This manifests itself in many ways, depending on your business type. Here are some examples:
- Restaurants: Give an appetizer, dessert, or coffee at no charge or pick up the bill of a regular once in a while.
- Retail or offices: Offer an unexpected beverage and fruit tray or snacks like you would find at a spa or country club.
- Real estate: Provide a list of local phone numbers, a fancy map or GPS app, or coupons to restaurants you partner with.
- Construction: Offer a tool, a warranty, a list of reliable repairmen, or a full set of replacement lightbulbs.
- Landscaping: Offer a birdfeeder, a fertilizer schedule, or a lawn tool.
- Any office: Partner with a business that has your same client base and exchange coupons so that you have a book of them to give to all your clients.
4. Give clients your cell number.
Giving clients your personal or business cell number is not as risky as you might think. Very few clients will actually call you. Surprisingly, the goodwill you gain by sharing your personal number far outweighs any disruption. But here’s a warning – don’t share your number with sales reps of vendors; you’ll get relentless calls every day from them.
5. Offer a VIP membership.
Some customers care about and are willing to pay more for excellent service, and others don’t. Separate your customer base by offering a VIP membership. By paying a nominal fee each year, these members get priority access to your appointment time, sales, overnight shipping, or whatever else you can distinguish. The good news is it’s a new revenue stream as well.
Choose one of these ideas and implement it to increase your customer service to five stars.
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Tips & Tricks in QuickBooks®
