Thursday, October 28, 2010
Principles of Small Business
For the past 4 years or so, I have worked for a couple of different small roofing businesses. Along the way, I have learned a few things that I think are worth passing along. 1. Never pay full price for advertising. Advertisers make a ton of profit off of every company that advertises with them; they can afford to cut the costs and 'show some love' in order to get your business. So, make nice, sweet talk, and never, ever pay full price.
2. You have not because you ask not. If you want the sale, ask for it. If you want the customer to give you a referral, ask for it. And, if you want those supplies at a lower cost, ask for it. My boss has been invited over for dinner and lunch by his customers simply because he is likable, and he asks!
Another good example: We had an magazine advertiser who was selling a particular spot for about $1500. The boss asked for a discount and got it down to $1300. We then asked for a further discount and got it down to about $1000. That's a good discount! Well, my boss said, just for fun, ask him to lower it another $300. We did it more or less for kicks, and just to see what he would say. (This was all taking place by email) We thought he'd get mad, but instead he emailed back that he had discussed it with his supervisor, and he would give us the ad at $700! The point: We asked.
3. Most people are generally lazy, so ask two or three times. Why? Because, they will try to take the lazy way out rather than checking, making the phone call, reading the directions, etc.
Here's an example: I called over to Lowe's, and asked to talk to someone about roofing shingles. I asked the guy on the other end a question,
"Do you carry such and such shingle?"
"Um, no. No, I don't think so."
"Are you positive that you don't have it?"
"Um, yeah." (I still didn't believe him.)
"Would you mind walking down the aisle and taking a look for me?"
Sure, there was a risk that I would tick him off, but when he came back, he had to admit that the item was in stock.
The same conversation works with bank tellers, delivery men, and employees!
4. Test and measure everything! At the small roofing and siding company that I work for, we keep track of everything: advertising costs, leads per promotion, jobs per promotion, conversion rates, trends, etc.
I know that last month my salesman was given X number of leads, and that he converted that number to Y number of jobs, and that this brought in Z amount of revenue.
I know that those leads came from two flyers, a postcard, Angie's List, and passing out a business card at a restaurant. I know exactly how much those ads cost the company to generate, and what the profit was per job. (I love bean counting!)
Why is this important? Well, for example, we almost dropped our radio advertising. We had spent about $8000 in advertising with a particular radio station, but we weren't getting very many leads for our money; the boss wanted to drop them. But, I figured out that we had brought in about $40,000 in revenue over the past year from the radio station leads. With our profit margin set at 20%, after paying for labor and materials, we had made $8000 for the year year . . . from a radio spot that cost us $8000 for the year. We weren't making a profit, but we weren't losing any either.
Where we had originally planned on dumping the radio spot altogether, but after seeing the numbers, we decided to keep the spot, and the branding exposure that came with it.
5. Hire a Mentor and do what they say! The first small business that I worked for hired a business mentor (for $50,000!), but didn't implement any of the action steps that were suggested. The mentor in question had built and sold something like four or five businesses himself!
The second small business, where I currently work, is at least trying to follow through with our coach's recommendations. We've written out vision statements, mission statements, 90-day plans, 3 month goals, etc.
The difference is that one business is doing well, and one was avoiding calls from collection agencies. The Scriptures say, "Where no counsel is, the people fall: but in the multitude of counsellors there is safety" and "For by wise counsel thou shalt make thy war: and in multitude of counsellors there is safety." (Prov. 11:14, 24:6)
6. Get more training! It's the same reason that you hire a mentor: you don't know everything. So, when you think you know something, take another course on it. When you're an expert salesman, go to a seminar on 'closing the sale,' when you're an expert at roofing take a 'Top of the House' training class from Owens Corning. Never stop learning.
7. Frame it and hang it. Let others know about all this training that you've been getting.
I used to find it distasteful when I'd walk into someone's office and see a bunch of plaques on the wall. How egotistical, I thought. How self-promoting. Now, with my new boss, I've seen that he doesn't have to brag - the plaques do the talking for him. They are hanging in the foyer, and they say that he is a professional, he is well-trained, and he is knowledgeable.
The plaques are there to make sure nobody misunderstands his goofy side.
There are other lessons: Give the hourly employee opportunities to make more money (rewards and incentives), Give to charities and poor people, Spend more time on the hiring process so you don't have to fire them later on, Invest back into the business, and, Say, 'No' when you don't want the job, even if it will make you money.
What lessons have you learned from your job?
2. You have not because you ask not. If you want the sale, ask for it. If you want the customer to give you a referral, ask for it. And, if you want those supplies at a lower cost, ask for it. My boss has been invited over for dinner and lunch by his customers simply because he is likable, and he asks!
Another good example: We had an magazine advertiser who was selling a particular spot for about $1500. The boss asked for a discount and got it down to $1300. We then asked for a further discount and got it down to about $1000. That's a good discount! Well, my boss said, just for fun, ask him to lower it another $300. We did it more or less for kicks, and just to see what he would say. (This was all taking place by email) We thought he'd get mad, but instead he emailed back that he had discussed it with his supervisor, and he would give us the ad at $700! The point: We asked.
3. Most people are generally lazy, so ask two or three times. Why? Because, they will try to take the lazy way out rather than checking, making the phone call, reading the directions, etc.
Here's an example: I called over to Lowe's, and asked to talk to someone about roofing shingles. I asked the guy on the other end a question,
"Do you carry such and such shingle?"
"Um, no. No, I don't think so."
"Are you positive that you don't have it?"
"Um, yeah." (I still didn't believe him.)
"Would you mind walking down the aisle and taking a look for me?"
Sure, there was a risk that I would tick him off, but when he came back, he had to admit that the item was in stock.
The same conversation works with bank tellers, delivery men, and employees!
4. Test and measure everything! At the small roofing and siding company that I work for, we keep track of everything: advertising costs, leads per promotion, jobs per promotion, conversion rates, trends, etc.
I know that last month my salesman was given X number of leads, and that he converted that number to Y number of jobs, and that this brought in Z amount of revenue.
I know that those leads came from two flyers, a postcard, Angie's List, and passing out a business card at a restaurant. I know exactly how much those ads cost the company to generate, and what the profit was per job. (I love bean counting!)
Why is this important? Well, for example, we almost dropped our radio advertising. We had spent about $8000 in advertising with a particular radio station, but we weren't getting very many leads for our money; the boss wanted to drop them. But, I figured out that we had brought in about $40,000 in revenue over the past year from the radio station leads. With our profit margin set at 20%, after paying for labor and materials, we had made $8000 for the year year . . . from a radio spot that cost us $8000 for the year. We weren't making a profit, but we weren't losing any either.
Where we had originally planned on dumping the radio spot altogether, but after seeing the numbers, we decided to keep the spot, and the branding exposure that came with it.
5. Hire a Mentor and do what they say! The first small business that I worked for hired a business mentor (for $50,000!), but didn't implement any of the action steps that were suggested. The mentor in question had built and sold something like four or five businesses himself!
The second small business, where I currently work, is at least trying to follow through with our coach's recommendations. We've written out vision statements, mission statements, 90-day plans, 3 month goals, etc.
The difference is that one business is doing well, and one was avoiding calls from collection agencies. The Scriptures say, "Where no counsel is, the people fall: but in the multitude of counsellors there is safety" and "For by wise counsel thou shalt make thy war: and in multitude of counsellors there is safety." (Prov. 11:14, 24:6)
6. Get more training! It's the same reason that you hire a mentor: you don't know everything. So, when you think you know something, take another course on it. When you're an expert salesman, go to a seminar on 'closing the sale,' when you're an expert at roofing take a 'Top of the House' training class from Owens Corning. Never stop learning.
7. Frame it and hang it. Let others know about all this training that you've been getting.
I used to find it distasteful when I'd walk into someone's office and see a bunch of plaques on the wall. How egotistical, I thought. How self-promoting. Now, with my new boss, I've seen that he doesn't have to brag - the plaques do the talking for him. They are hanging in the foyer, and they say that he is a professional, he is well-trained, and he is knowledgeable.
The plaques are there to make sure nobody misunderstands his goofy side.
There are other lessons: Give the hourly employee opportunities to make more money (rewards and incentives), Give to charities and poor people, Spend more time on the hiring process so you don't have to fire them later on, Invest back into the business, and, Say, 'No' when you don't want the job, even if it will make you money.
What lessons have you learned from your job?
Tuesday, October 26, 2010
Labor Not to be Rich
Proverbs 23:4 gives some excellent advice for acquiring wealth. It says, "Labour not to be rich: cease from thine own wisdom."
We've seen that wealth is the fruit of a wise life, but we are to seek the root, not the fruit. Now, we see that laboring to get rich is the WRONG way to get rich. It seems like the right thing to do, but , as Solomon says, cease from thine own wisdom.
A study was done on a group of business owners. Some were in business because they loved what they were doing, some because they were very good at what they were doing, and some were in business for altruistic reasons - they enjoyed helping others through their business. Of these small business owners, 80% were still in business (and doing well) five years later.
Another group of business owners were in the business just to make a profit. They were laboring to be rich. They were more easily disenchanted. They made wrong business decisions, such as not investing in the 'ambiance' that customers enjoy because they viewed it as an unnecessary investment. The result? Only 20% were in business five years later.
What does this mean to us? God wants us to prosper. He also knows that life usually operates upside-down to how we think it operates, so he gives us instructions to help us out.
Listen to him. Enjoy your business. Be passionate, and others will be drawn to you.
What do you think?
We've seen that wealth is the fruit of a wise life, but we are to seek the root, not the fruit. Now, we see that laboring to get rich is the WRONG way to get rich. It seems like the right thing to do, but , as Solomon says, cease from thine own wisdom.
A study was done on a group of business owners. Some were in business because they loved what they were doing, some because they were very good at what they were doing, and some were in business for altruistic reasons - they enjoyed helping others through their business. Of these small business owners, 80% were still in business (and doing well) five years later.
Another group of business owners were in the business just to make a profit. They were laboring to be rich. They were more easily disenchanted. They made wrong business decisions, such as not investing in the 'ambiance' that customers enjoy because they viewed it as an unnecessary investment. The result? Only 20% were in business five years later.
What does this mean to us? God wants us to prosper. He also knows that life usually operates upside-down to how we think it operates, so he gives us instructions to help us out.
Listen to him. Enjoy your business. Be passionate, and others will be drawn to you.
What do you think?
Monday, October 25, 2010
The Universe is For Me
In Psalm 56:9, we find the declaration, "for God is for me." And Romans 8:31 ask, " If God be for us, who can be against us?" God is on my side. The Creator is on my side. The One who yields all the power of the universe is on my side.
Think about that!
If the Creator is on my side, how could his creation be against me? If the Creator favors me, then certainly circumstances favor me! The universe blesses me because it is the tool of the Creator who blesses me.
"He that spared not his own Son, but delivered him up for us all, how shall he not with him also freely give us all things?" (Romans 8:32) "For all the promises of God in him are yea, and in him Amen, unto the glory of God by us." (2 Cor. 1:20)
All created things work together for my good, because the Creator of all things is FOR me!
Think about that!
If the Creator is on my side, how could his creation be against me? If the Creator favors me, then certainly circumstances favor me! The universe blesses me because it is the tool of the Creator who blesses me.
"He that spared not his own Son, but delivered him up for us all, how shall he not with him also freely give us all things?" (Romans 8:32) "For all the promises of God in him are yea, and in him Amen, unto the glory of God by us." (2 Cor. 1:20)
All created things work together for my good, because the Creator of all things is FOR me!
Friday, October 22, 2010
God Will Do Anything for His Glory
God answers the prayer that accomplishes his will, that pleases him. For this reason, it seems easier to believe God for things when I'm teaching a Sunday school class, or being otherwise preoccupied with my Father's business. It also seems easier to have faith that God will provide things like the financial support for a short term missionary trip.
But God is not selfish. God gave his own Son to die on the Cross for us. That is, he put our wishes above his own. And that led me to this thought:
God is even MORE APT to do that which blesses us than he is to do those things that please himself.
Romans 8:32, "He that spared not his own Son, but delivered him up for us all, how shall he not with him also freely give us all things?"
Wow. How does that affect your view of an abundant life?
Thursday, October 14, 2010
Your Grace is Enough
I just heard a song on the radio:
♪ Your grace is enough. Your grace is enough. Your grace is enough for me. ♫
As I listened, I found myself disagreeing. I don't think that grace is enough, if by 'enough' you mean 'all there is.' There is a sense in which I used to view grace as an end unto itself, a finish line - once you're saved, you're done. Period. How many Christians are chained to their chairs by the lackadaisical, energy-sucking belief that they have received grace, but that they are not free to follow their hearts' desires?
Grace is not supposed to be the end, it is supposed to be the beginning. Grace unshackles us so that we can run, reach and strive for an abundant life. It is the gunshot that signals the start of the race. It is the door flying open before the thoroughbred. It is freedom, and it is rocket fuel.
I first came across the concept of empowerment when I worked for Sears in the '80's. My manager told me that I was allowed to make decisions that affected customers, and that there were no wrong decisions; that is, I would not be reprimanded in any way as long as I did what I thought was best. To be sure, I didn't believe him at first. There was no way that he was giving that kind of freedom and power to the lowest man on the totem pole. But he was! And, it gave me confidence and strength to know that he was! It made me a better employee.
Empowerment. That's grace. The freedom from failure. The freedom to achieve. Grace is enough. But, it is not meant to be the end. It is not meant to lock you into a pew or a ministry. It is meant to free YOU, not make you a clone. So reach, strive, and reign in life.
Attempt. Succeed. Rejoice!
I welcome your thoughts and comments. :)
♪ Your grace is enough. Your grace is enough. Your grace is enough for me. ♫
As I listened, I found myself disagreeing. I don't think that grace is enough, if by 'enough' you mean 'all there is.' There is a sense in which I used to view grace as an end unto itself, a finish line - once you're saved, you're done. Period. How many Christians are chained to their chairs by the lackadaisical, energy-sucking belief that they have received grace, but that they are not free to follow their hearts' desires?
Grace is not supposed to be the end, it is supposed to be the beginning. Grace unshackles us so that we can run, reach and strive for an abundant life. It is the gunshot that signals the start of the race. It is the door flying open before the thoroughbred. It is freedom, and it is rocket fuel.
I first came across the concept of empowerment when I worked for Sears in the '80's. My manager told me that I was allowed to make decisions that affected customers, and that there were no wrong decisions; that is, I would not be reprimanded in any way as long as I did what I thought was best. To be sure, I didn't believe him at first. There was no way that he was giving that kind of freedom and power to the lowest man on the totem pole. But he was! And, it gave me confidence and strength to know that he was! It made me a better employee.
Empowerment. That's grace. The freedom from failure. The freedom to achieve. Grace is enough. But, it is not meant to be the end. It is not meant to lock you into a pew or a ministry. It is meant to free YOU, not make you a clone. So reach, strive, and reign in life.
Attempt. Succeed. Rejoice!
I welcome your thoughts and comments. :)
Saturday, October 9, 2010
No Future, No Hope
I remember watching a show where some folks were hypnotized into believing that they either had no past or no future. Those with no past were able to function normally; they just didn't remember anything before the day of being hypnotized. However, those who had their future removed from them, immediately sank into depression. Their hope was gone, and so was their drive to accomplish anything.In the Bible, Paul told us that 'evil communications corrupt good manners.' He was specifically referring to the heresy which states that there is no resurrection from the dead, and he logically explained how such a belief would lead to a corruption of right living.
Evil communications do corrupt good manners. In my opinion, the belief that the Lord Jesus could come back at any moment robs the believer of his future. I know, I've been there. I've sat in the pew and heard the sermons and songs tell me over and over that I have no certain future on this earth. I know young men who didn't go to college because, well, why bother? I myself have felt that way ~ Hopeless.
I personally don't hold to the very prevalent heresy which is known today as the imminent (i.e., could happen at any time) pre-tribulation rapture of the church. I used to, but then I spent over six months of intense research into both sides of this issue, and I came to the conclusion that it is not a biblical doctrine. Over the past five years, I have only become more convinced.
In order to be successful, you have to believe that you can set a goal, and that you have time to reach that goal.
What do you believe about your future?
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