Author Archives: Coach

About Coach

Terry Misfeldt is President and Trail Boss of Brand Irons, a business and marketing consulting firm based in Green Bay, Wisconsin. Terry has conducted numerous feasibility studies and prepared a number of business plans to secure financing for clients. Terry and Brand Irons specialize in creating corporate brand identities based on the results of studies and plans to market businesses successfully.

Owning A Business – Part Eight

If you’ve been reading the first seven installments in this series, you probably realize owning a business is more complicated than most people believe. Yes, you can just hang a sign and get started, but becoming as successful as  you dream you can be takes more than that.

One bit of advice we offer clients is to build key relationships. Yes, you need capable, qualified people around you within your organizational structure. They are the backbone of your corporate culture. You also need professional people as counselors outside of your company.

Your banker or financial institution comprises one piece of that advisory board. That person needs to know what’s going on within the business so they can be supportive during lean times and offer suggestions to enhance your margins. For that to happen, you need to communicate with them on a consistent basis.

Same goes for your Certified Public Accountant (CPA). This individual may not need to meet with you on a monthly basis, but he or she is available to provide guidance on cash flow and other aspects of your financial statements.

A third piece of your advisory panel is your legal counsel. Attorneys are there to minimize your risk and protect your assets. Have yours review legal documents such as contracts, non-disclosure agreements, and yes, even your advertising to prevent any legal liability. It’s better to pay legal fees up front than to lose your company over a technicality.

Your insurance agents are part of your team as well. Meet with them whenever something changes in your business, such as acquisition of a new piece of equipment. Make sure you have adequate coverage for eventualities, and trust that person to scale back on premiums when they can (as President Reagan often said; Trust But Verify!).

We would be remiss to not include your marketing and business consultant. Engaging the right people saves you money, and helps you make money in the process. Ask for recommendations and interview the candidates for your comfort level instead of taking the first one you meet.

Brand Your Work – Work Your Brand

Owning A Business – Part Seven

Owning your business involves more than walking in the door every day and saying: Let’s see what happens today. Your strategy for success could be as simple as developing key activities. Identifying annual activities can even be broken down into monthly and  weekly plans. These activities need to accomplish your goals.

Know your goals.

First things first

#3 on Stephen Covey’s 7 habits of highly effective people

Then you can develop easy-to-implement business and marketing strategies. Avoid making complicated plans. When you encounter tasks or areas where you or your team lack understanding, engage a consultant familiar with that area. If you have tax liability issues with out-of-state customers or vendors, involve your tax authority or Certified Professional Accountant (CPA). Professional consultants exist to reduce your risks, save you money, and make your life and work easier.

Some business owners find they are most productive early in the morning. They get to the office before other employees. They have time to work without worrying about the phone ringing or people popping their head in with problems. If this description fits you, make sure you make it productive time. Develop a list of tasks you need to accomplish. Start with the most important. If it’s payroll, get it done. If it’s strategic consideration about expansion, take the time to think things through.

As you go through these tasks, develop what your list of activities. Prioritize those critical to the growth and overall success of your business. You need to know what must be done to drive sales, meet production goals, increase efficiency, manage your team, and keep customers satisfied. Any activity that fails to have positive influence in one of these areas should be considered non-essential. Eliminate it from your priorities.

Focus on key activities.

Whatever are not key activities waste your valuable time. Would you rather spend time earning an extra $10,000 today or lose $5,000 on an  unproductive challenge?

Brand Your Work – Work Your Brand

 

 

Owning A Business – Part Six

Business owners often struggle with financial issues. Examples are finding additional sources of revenue to keep cash flowing, and controlling cost factors that can prove crippling. In some cases with owning a business, the vicious cycle is unending.Revenue streams

Consider soft drink companies that discover revenue streams with certain products or market areas. They carve niches in those areas and pursue market share against their competitors. At some point, market saturation occurs and while the revenue stream doesn’t dry up, it doesn’t produce at the same level consistently. In fact, it may slowly ebb.

The solution is to look for alternatives. This is where professional consulting advice can prove valuable in assessing market acceptance. Adding new consumers in different markets is one option. Adding different products is another option that involves the risk of diluting the existing market. Instead of owning 40 percent of market share, the company has divided that percentage into – perhaps – 30 percent for one product and 10 percent for the other.

The company has also incurred the cost of developing an additional brand, adding production capacity to get the product into the consumer’s hands, labor, and the marketing expense of advertising. Those costs may be justified if market research verifies the need to diversify and identifies consumer demand sufficient to warrant the effort. The hard decisions come when market research shows the demand doesn’t exist or diversification is not a viable option.

If a business owner has commissioned sales people, cutting back on those costs is often one of the first considerations, when it should be the last. Remember how revenue is generated: Sales! Look instead at more efficient production or distribution methods. Consider changing processes or procedures to trim waste and enhance margins. People should come before profits, and most business owners realize that – but without profits it’s hard to stay afloat.

Brand Your Work – Work Your Brand

Owning A Business – Part Five

Now that you know who your customers are, what they’re buying, and the value you offer them, it’s time to consider the message delivery channels. This is generally considered to be the area where you advertise your business, and it is one of the most challenging aspects of business ownership.

Get your message through

Choosing the right method to deliver your message is important.

Where do you spend your advertising dollars? You need to know what you want your ads to do:

  • Create exposure
  • Increase brand awareness
  • Get paying customers in the door
  • Generate a return on the investment
  • Build brand loyalty

Modern advertising theory holds that customers must first know you exist. They will then investigate and vet you to determine if you’re legit and how you’re different. Then they purchase. Age, gender, lifestyles, and other consumer demographics determine how best to deliver your message.

When you think about texts, most people respond almost immediately when they hear the text message alert. Whether it calls them to action on your behalf is another matter.

Consumers will vet your company by checking out your website or social media presence, so take care to ensure it achieves your goal and purpose of being relevant to the message.

TV commercials can build brand awareness and create a sense of urgency, but remember most consumers with a DVR (digital video recorder) fast forward through commercials.

Direct mail and other print channels can be effective if targeted to specific consumers and delivered with a definite call to action. Newspaper and magazine ads can work if the message resonates with the readers and are designed for maximum impact.

As the business owner, consider engaging a professional marketing firm to manage your advertising, but you must make the ultimate decision on how much to spend and where. If your ads fail to achieve your objectives, make the necessary changes.

Brand Your Work – Work Your Brand

Owning A Business – Part Four

When you have clarity on your products and/or services and know your target audience, take the time to go back to the reason you wanted to own your business. This is the foundation of the value proposition you, your company, and its products and/or services offer to consumers.

What is your value proposition?

Clients want to know what makes you different.

Your value proposition identifies what makes your business different.

One of the most common questions business owners are being asked today: What makes you different?

What the consumer is asking, in essence, is why should I buy from you?

 

Let’s look at the example of what a value proposition might look like for owning a storage facility as your business venture. In most communities, there is usually more than one storage facility because we humans have accumulated stuff we don’t have room for in our homes.

So what are distinguishing features of your facility that appeal to potential customers?

Do you offer 24-hour access? Is it lighted outside and in each unit? Is it paved or gravel? Are there concrete floors? Are units insulated? What do you charge per month? Do  you offer discounts for longer rental periods? Are pallets available to raise items off the floor?

Once you have answers to questions your prospective clients are likely to ask, compare your facility to the competition and you should wind up with a fairly solid value proposition that differentiates you from those competitors. Maybe it’s location and convenience or ease of access for trucks and trailers.

When a prospective customer asks what makes you different, you need to give them a succinct value proposition. In the case of storage units, it might be that you offer clean, safe, and economical protection for their assets.

Take the time to think it through, and when you have your proposition, see how it resonates with customers. Modify it if you must. We’re here to help if you need assistance.

Brand Your Work – Work Your Brand

Owning A Business – Part Three

You’ve had some time to evaluate your products or services from the perspective of your customers, so now you have a much better perspective on what owning your business means to them. This third part of business ownership involves consumer demographics: How well you know who your customers are, why they buy from you, and what may or may not bring them back to your business.

Owning a business involves knowing your clients

How well do you know your prospects and customers?

You would be amazed at how many business owners, when asked who needs their product or services, answer “everyone” can use what we offer. Banish that thought!

Sure, everyone needs to drink water, but why should they drink the water you produce when there are several brands on the shelves and some that comes out of the tap in their home? They ask, before they purchase: What makes you different?

The secret lies in knowing your customer demographics as well as you possibly can. Are they women or men? What ethnicity? Young, older, or more mature? Where do they live, primarily? Where do they work? What are their hobbies or interests? Are they active in the community as volunteers? What hits their hot button? If they’re a couple, who’s most likely to make the buying decision?

This laundry list about your customers can be rather extensive, but as you’ll see, it’s important to know so you have perspective on how to reach them. If they purchase clothes at outlet retailers, they may be more likely to listen to country radio than if they shop at higher end retailers.

How do they get around? Do they take public transportation, walk, or drive a vehicle? Signs in train stations or billboards along the highway may be avenues to reach them.

Do they listen to the radio, and when? What genre, and how many different options are there? Sponsorship and advertisements become possibilities, and the same holds true if they watch television programs. Keep in mind that certain generations use a digital video recorder (DVR) and fast forward through commercials. Viewing preferences are constantly changing, which merits considering professionals to assist in identifying prospective customers and appropriate channels to reach them with your message.

Engaging a professional marketing firm can save you money and help you wade through the swamps of advertising possibilities. The focus needs to be on getting returns from your investment.

Brand Your Work – Work Your Brand 

Owning A Business – Part Two

Once you’ve taken the time to think about why you want to own a business, and considered corporate structure, legal, and accounting issues, it’s time to think about your products or services as they relate to your customers. That should come sooner, but as you will find out, the knowledge about your customers is vital to profitable business ownership.

First, consider this: What are you selling?

Business ownership means knowing what you sell.

Does the customer buy what you’re selling?

It’s not as simple as selling your landscaping service or furniture. That may be what you intend to market to consumers, but where business owners come up short is in believing that’s what the customers will buy. Far from it.

Let’s get specific. Owning a landscaping business can range from mowing lawns and plowing snow to designing landscapes for new homes or commercial properties and everything in between. The skills and expertise of you and your crews are essential to the brand your company portrays to the public and convey a certain value to the proposition.

So flip the coin to the customer’s point-of-view: What they’re buying is, in one case, more time they don’t want to spend mowing their own lawn, raking leaves, or shoveling snow. The other extreme is having landscape design (and implementation) that matches their lifestyle, whether it’s where they can entertain friends or showcase their home in the neighborhood … or whatever other reason.

Owning your furniture business involves products more than services, although design and delivery are aspects that involve customer expectations. So, do you sell couches, love seats, beds, mattresses, chairs, dressers, and shelves? Yes. Is that what your customers come in to purchase? Yes, but …

Are they purchasing functional pieces with certain styles that fit their decor or color schemes? Or do they insist on mid-century modern? In either case, it’s more about the lifestyle they want to have. Price certainly comes into play, but your success and profitability as a business owner lies in being able to learn and know what appeals to your customers.

As you can begin to see, there is considerable thought that needs to go into business ownership, and we’re just getting started. In part three, we’ll spend some time on how to identify your customers.

Brand Your Work – Work Your Brand

 

Owning A Business – Part One

Owning a business is relatively easy. Operating a successful, profitable enterprise is an entirely different and more complicated matter.

The easy version is to figure out if you want a sole proprietorship, LLC, S, C, or other corporate designation and get a EIN, then open a bank account. You are now a business owner!

Hanging a shingle does not mean customers can find you.

Hanging a shingle does not mean customers can find you.

That may be what you think, but let’s look at what you don’t know. Most business owners don’t know what they don’t know about owning a business, so let’s scratch the surface with these few things from a long laundry list, in no specific order. Come back for more in part 2.

  • The first question you need to ask is why? Why do you want to own a business? Did you get fired? Believe you can do it better than your employer? Are you setting it up for your children to take over some day, and if that’s your reason, will want it? Do you want to be free from having someone else tell you what to do; and do you understand that consumers will always be your boss? Is this your retirement plan, and will it even make money? Or are you doing this because you believe you have a great product or service to offer people?
  • When you look at a corporate structure, consider if anyone else will be involved in the business. Are there going to be partners? Will they be equals or subordinates? Investors? Family members, including a spouse? How do you want to handle taxes? These are questions you will be asked by the professional who helps you set up the corporate structure, and you are wise to engage a business attorney to assist you with establishing bylaws, if necessary, as well as operating agreements and other legal documentation to protect your assets. Check to see if they are qualified to assist with patents, copyrights, trademarks, and any other intellectual property rights you may want to protect.
  • Do you know what EIN stands for? It’s the Employer Identification Number you need for tax purposes, both for filing your corporate returns and for your customers to report their financial relationship with your business. Engaging a Certified Public Accountant or Enrolled IRS Agent (EA) to assist with your corporate tax obligations, including quarterly payroll, is another wise decision. Your accountant can help make sure your chart of accounts is set up correctly, that you’re operating on either cash or accrual basis, and that your financial reports (cash flow, profit & loss, balance sheet, etc.) are accurate. They know the questions to ask, which is why we strongly encourage engaging professionals to help you.

We haven’t even scratched the surface or discussed branding and marketing and customer relations and location and many other aspects of operating a business, so check back for part two next week.

Brand Your Work – Work Your Brand

Business Viability

If we’ve heard one story about someone wanting to start a restaurant, we’ve heard a dozen. The idea of opening and operating a restaurant most likely stems from a bad experience where someone feels they can do a better job than what they encountered. It could be that there is a belief they’re a good cook, or they have children who suggested mom and dad open a restaurant. In any case, the horror stories are more common than tales of success.

Here’s why, and the reasons apply to more than restaurants.

More than once we’ve heard about the person who wants to take over an existing restaurant that failed and closed. We even heard of one restaurant owner who closed a franchise operation and claimed they would reopen at the same location as a “different” restaurant. Could location have been a factor? Or could hiring a majority of the same employees drive a stake into the new operation?

There have been fast food franchises that have torn down one building and relocated to the other side of the street, simply because the old location was not accessible to customers who wanted to avoid turning left into the restaurant. Location is key.

When it comes to any business, it pays to do some diligence and investigate issues such as traffic flow, residential population, ease of access, and other establishments nearby that are capable of or already bringing potential customers to the location.  If you can do that yourself, great; if not, consider a professionally conducted competitive market analysis or feasibility study. Realize that the cost of acquiring that information could help you avoid moving forward on a project that is destined to fail … and spending much more money in the process.

Besides location, you have to consider your management team, target market segments, value proposition, revenue streams, various cost factors, and key resources, among others. All of these are part of developing a business model.

To go back to restaurants, for example, far too often the owner chooses to employ managers to run the operation in their stead. Unless those managers have a vested interest in the endeavor, they could ruin the business by the way they manage the employees, treat the consumers, and handle inventory and other financial matters. Ever hear stories of managers embezzling funds?

Have you identified the various market segments likely to patronize your business or use your products? What are their buying habits? Do you have a value proposition that resonates with them and is relevant to their needs and wants? Do you know how to reach them with effective advertising that provides a return on your marketing investment? What makes your business different from the other ones that provide the same product or service? It’s one of the first question certain consumers will ask.

Now ask yourself: How much money can I realistically expect to make from this business? On this step, it is critical that you are brutally honest with yourself. Leave your emotional attachment to the idea or suggestion out of the decision making process!

As part of this evaluation, ask yourself the long range question: Why am I doing this?

We are here to help you take the time to think through that question.

Brand Your Work – Work Your Brand

 

Get the Facts!

One of the most critical elements in making a business decision is having the facts.  Put aside the emotional aspect of starting, buying, expanding, or selling a business.  Consider the logical information that’s available; the business side of the deal.

A recent project involved a competitive market analysis for a client that wanted to expand a high margin portion of its business to a different market segment.  The investment involved millions of dollars, so it made sense to spend a couple thousand to learn if it was a feasible project and whether there was a significant enough volume to warrant the expansion.

Yes, this type of research takes time.  If it’s an emotional decision, the time factor can put undue pressure on getting the facts.  As we have discovered in conducting numerous market research studies, the path to a decisive outcome often takes many diverse turns.  One bit of information may indicate the choice is quite clear, while the next piece of data spins the decision in the opposite direction.  It requires all the facts to provide a clear picture, and that takes time.

In the recent effort, what looked like relevant information turned out to be at least two years old.  While it may still be pertinent, further research is required from additional sources to verify the validity of the information.  Some sources are more reliable than others, so as professionals, we are required to double check and, at times, triple check the resource to determine the accuracy of the data.

As you should assume, the world of business can change quite rapidly.  For instance, we determined that a major international company had a subsidiary that looked promising for the client’s expansion project.  Digging deeper, we learned the subsidiary had been sold to a group of private investors and re-branded under a totally separate corporate umbrella.  Despite the potential for change, the time eventually arrives when a decision needs to be made.

Get the facts, and you have a higher percentage chance at success.  Then, when you’re ready to market your new strategy, you can bring the emotion back into the equation and move forward.

Brand Your Work – Work Your Brand