Monthly Archives: October 2011

Good Bank Relations Will Aid Small Businesses

By Chemeketa SBDC

Money is always on the minds of small business owners, whether it’s earning it, spending it or using it strategically. In this economy, money is a particularly hot topic for those looking for financing, for money to start a business, expand one or keep one afloat.

Unfortunately, financing for a small business is not like going to the grocery store — there are not endless options and instant gratification. If you are hoping to secure financing, especially in this lending environment, it will be more like farming, where getting what you want takes time, effort and an understanding of the big picture.

In June, the Chemeketa Small Business Development Center sponsored a panel called “R U Bankable” which included representatives from different banks across the Willamette Valley. They answered questions about whether their respective banks are currently lending to small business, what lenders are really looking for, and what if they deny someone access to capital, what then? While the panelists certainly mentioned credit scores, collateral, equity and other numbers related criteria, the strongest theme of the discussion was the need for small business’ to develop a relationship with their bank.

What does having a relationship with your small business’ bank look like? If you think about how much you trust your business’ attorney, CPA, or insurance agent, you want to know and trust your banker in the same way. You want them to be a part of your team, a key part of your business’ success.

Here are some tips on how to build a relationship with your banker:

-Let go of the notion that banks are just institutions that keep your money for you and then won’t let you have any extra when you need it the most.

-Pick a bank you want to have a relationship with — bigger isn’t always better, nor is smaller. Choose the bank that makes sense for the success of your business.

-Start slow. You don’t need to approach your banker with a loan application during your first meeting. Ask them for recommendations and let them know that you value their role in your business.

-Spend the time to allow your banker to know you beyond numbers in an Excel spreadsheet. The more your banker knows about your business, they better they will be able to help you. Keep your banker
informed and allow them to be a strategic advisor for your business.

-Ask your banker to visit your business. Give them a tour or a sampler. This will make your business real for them and help them value what you do.

-Be willing to share both good and bad news with your banker. This will build credibility and trust and allow your banker to help when they can.

-If your bank turns you down, don’t think of it as rejection. Find out what their expectations are, what you can do to get a “yes.” When your bank says “no,” they may mean “not yet.”

Joanne Scharer is a business adviser at Chemeketa Small Business Development Center and owner of All Writing Matters. She can be reached at sbdc@chemeketa. edu. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.

Posted in Money & Finance | Comments Off

Relax and be Prepared for Networking Events

By Chemeketa SBDC

Networking events can be a great way for small businesses to meet new customers and get your business’s name, and your own, out in the public. But it is not something that everyone enjoys. Here are a few tips to help bring up your comfort level as you get into the networking swing.

-Put it into perspective. Relax. Although first impressions are important, unless you make a major social gaffe, you probably aren’t going to ruin the business if you aren’t the wittiest, smoothest talker at the gathering. Your goal is to help spread the word about your services and products, but don’t set the bar so high for yourself that you think you have to convert everyone in the room into an instant client. It won’t happen.

-Networking is a building process. Each event is an opportunity to meet some potential new clients. But it is doubtful that one event will determine your future success and happiness.

-Be prepared. If you have a hard time thinking of things to talk about, think ahead. Formulate a one-minute speech about your business. At some events, you won’t have time to work much more than that into the conversation. As a backup, you can think of items that can fill up to five minutes. What sets your business apart? What are the strengths of your services or products? Get your thoughts together before you are put on the spot and freeze up.

-Do some homework on a few of the other participants and guests. You’ll feel a lot more comfortable and might find it easier to initiate conversation if you have a little knowledge about some of the attendees. A quick glance at some websites, Facebook, LinkedIn, or even ads ahead of time can give you a bit of familiarity and a head start on conversational topics.

-Dress appropriately. Find out what the dress code at a particular event is (business casual, formal, etc.) and dress to suit. This will help with your comfort level.

-Take plenty of business cards and always have a few where they are easy to get. The grungy one hiding in the bottom of your large purse will take a while to find and won’t look good!

-Don’t be too self-focused. Remember, other people may also be nervous and uncomfortable in networking sessions. You won’t stand out. The event isn’t all about you anyway, and everyone’s eyes aren’t upon you. And since everyone else came to present their business, as long as you share a little about yourself and get your business’s name out, you can be a good conversationalist by being a good listener. As you get more comfortable in the networking situation, you can then share more and do more of the talking.

-Avoid uncomfortable silences. If the conversation lags, don’t let it turn into awkward moments. If you can’t think of any more to say about yourself or your business, ask questions of others. Try to formulate them so they aren’t answered with a simple yes or no. Think of some of these questions before you go to have safely stored in your networking toolbox when needed.

-Don’t be stupid. Yes, that is pretty blunt. But don’t let a business networking event go bad because you imbibed in too much alcohol, told off-color jokes or talked negatively about others. The person across from you might be related to your story’s main character!

Marcia Bagnall is the director of the Chemeketa Small Business Development Center and the instructor of the Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High St. NE in downtown Salem or call (503) 399-5088.

Posted in Marketing Ideas, Small Biz Management | Comments Off

A New Year, a New Marketing Strategy

By Chemeketa SBDC

Join us as we gather a panel of marketing experts to assist you in creation and implementation of your email and social media planning campaign for 2012. This class is designed for experienced users of Constant Contact and will be helping you integrate Constant Contact into your social media plans.

Here’s what will covered:

Top 10 things every email should have
Focus your message for better results
Engaging your customers for increased Lifetime Value
Why you should avoid writing only about your business and products
The power of combining social media and email marketing
Q & A

Please bring a sample of one of your emails (printed) for discussion.

Date/Time: Thursday, November 10, 1 – 2:30 pm
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: FREE
Registration and Information: 503.399.5088

Panel members

Dana Pethia, Marketing Expert, Constant Contact (Pacific Region)
With a passion for building great customer relationships, Dana applies more than 20 years experience in marketing, branding, public relations, community relations, and donor development. She is dedicated to helping small businesses, nonprofits, and member organizations convert casual customers, donors, and members into raving fans through online marketing. Dana is a member of several community and business development boards in the Pacific Northwest and has been sought after as a speaker for her businesses expertise and motivational style.

Jodi Herrling, Principal, @YourService Marketing
In 2006 I took a leap of faith and stepped apprehensively into the world of innovative marketing and public relations and @ Your Service Marketing and Consulting was born! I am able to combine photography, design, and content creation with my natural communication skills to create interesting and engaging newsletters and promotions that deliver results. @ Your Service Marketing provides a host of services for our clients, from consulting on how to increase profits and boost employee morale, to creating single and multi-year marketing plans that implement a variety of mediums (direct mail, e-mail marketing, social media networking) and project planning (creation, implementation, and management). Our strategies, once implemented, produce tangible, measurable results, such as increasing your client base, as well as increasing your profits.

AYS works with numerous businesses in the Willamette Valley, as well as across the country to create innovative and effective marketing solutions in a world of ever-shifting, ever-evolving marketing strategies.

Lisa Smith, Owner, CustomerConnect
Lisa has over 20 years’ experience helping businesses grow and achieve their goals. In her roles as marketing director, motivational speaker and business consultant, she has worked with hundreds of organizations across the country, including Toyota, Intel, United Way and US Dept of Fish & Wildlife. With a dedication to helping organizations large and small build relationships with people, she brings standard-setting best practices of the big companies to the small business. Lisa is the owner of CustomerConnect, which provides custom email marketing services tailored to the unique goals, needs and budgets of small businesses.

Posted in Marketing Ideas, SBDC News & Info | Comments Off

The Power of Email Marketing – Constant Contact

By Chemeketa SBDC

More than 475,000 businesses use Constant Contact to help grow their business! Learn how to build relationships that are the key to the success of your business with easy, inexpensive and highly effective email marketing. Together, we’ll explore the basics of what email marketing is, why it works so well, how it easily integrates with social networking sites, and how to use it in your business planning and marketing strategy to achieve your business goals.

You’ll learn how to master email marketing communications with a comprehensive look at best practices and winning strategies for getting and keeping quality subscribers, increasing deliverability and open rates, writing good headlines and content, saving time, and getting readers to take action:

● Reach more people with your message
● Create email campaigns that get results
● Get your emails opened and read
● Write compelling subject lines and copy
● Interpret email campaign results (open-rates, bounce-rates, click-thru rates)
● Examples of successful email campaigns

This session is suitable for all experience levels. Anyone interested in learning more about email marketing. Participants do not need to be a Constant Contact customer to attend. All information provided can be applied regardless of the system or service you are using for Email Marketing.

Date/Time: August 28, 9 - 10:30 am
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: FREE
Click here for registration and information

Posted in Marketing Ideas, SBDC News & Info | Comments Off

Do Homework to See How Labor Costs Measure Up

By Chemeketa SBDC

What are your labor costs? It’s an excellent question for any business owner, and one that should be asked on a regular basis. This number also should be tracked over time to understand trends and inform you when corrective action needs to be taken.

As your company grew, you probably added staffers to perform specific tasks — naturally. When you started, you might have had a one-person office that answered the telephone, kept the books, did the correspondence, billing, etc. As you grew, you may now have a bookkeeper, receptionist and a customer service representative. The same increase is likely on a manufacturer’s production floor or a retailer’s sales floor or a service company’s staffing patterns. And, on the surface that makes sense. Where once you had five employees supporting $50,000 in sales, you might have 50 staffers handling $3 million.

But a true test of your productivity is the percentage of the cost of sales that your labor requires. On a direct basis — the actual cost to produce or provide your service/product — the number should remain about even, and go down as you gain efficiencies with increased size. Restaurants, for example, often have labor costs that run around 30 percent. Service businesses, on the other hand might exceed 40 percent.

After your best cost level has been established, you need to make sure you keep within your goal. If you don’t know the average for your business, check with your industry association. If you have historical records, compare your actual costs with industry averages.

You would then compare your cost of labor to your revenues. For example, if the 5 employees cost you $12,000 supporting $50,000 in sales you have a 24 percent cost of labor to sales (12/50). But then you added full-time staff, managers, production, sales help, etc., for a total of 50 employees for total payroll of $1.2 million to support the $3 million in sales. Your cost of labor to sales has risen to 40 percent (12/30). That increase from 24 percent to 40 percent is the area that should be analyzed. There may be good reasons for it, but the key thing is that you know and understand the facts and the reasons behind them.

The raw numbers can be misleading or masking a management decision that needs to be explored. We need to be comparing percentage of increase (or decrease) of expenses to sales and personnel expense is a critical area for small businesses to consider. If you decide that you must “retrench,” be sure that you are working with all the facts.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program . The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High St. NE. in downtown Salem or call (503) 399-5088.

Posted in Employees, Money & Finance | Comments Off

What Businesses Can Learn from Steve Jobs

By Chemeketa SBDC

What Businesses Can Learn from Steve Jobs

The business world, and indeed the whole world, was saddened to hear about the death of Apple’s co-founder and creative genius Steve Jobs this week. He had a larger than life persona and made enormous contributions to the world’s technology and the U.S. economy. Here are a few lessons he taught that can benefit your business:

- Innovation is essential, even if it doesn’t pan out every time. Jobs said “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.” No one succeeds 100% of the time; the important thing is to continue to innovate and move your business forward.

- Hiring smart, dedicated people is a key to success. Don’t be afraid to surround yourself with people whose skill sets and intellectual capacities compliment your own. Not even Jobs could manage to innovate and execute by himself, and neither can you. Here’s what he said about the creative minds at Apple about 15 years ago: “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” He also said “Great things in business are not done by one person; they are done by a team of people.”

- Excellence should be your main focus. At the end of the day, it’s the best competitive edge small businesses have. “Be a yardstick of quality,” Jobs was quoted as saying. Create a business vision for yourself where your company is the quality leader; make it hard for your competitors to stand next to you.

- Trying to be all things to all people is a losing proposition. Apple is focused on a small group of key products, and it’s a sensible strategy. A well-known quote from Jobs is “That’s been one of my mantras — focus and simplicity.” He also said, “It comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.”

- Succession planning is imperative. You don’t need to wait until a terminal illness or other crisis strikes you or a key employee. Start planning now for how you eventually will get out of your business. And along those lines, put together contingency plans for unexpected emergencies and worst-case scenarios. Jobs was very clear on the limited time he had left to him, and instead of burying his head in the sand, he helped his company face the future.

- Keeping a balance between work and family is valuable. Jobs was a famously private person, but by all accounts dedicated to his wife and children. He made time for the people in his life who were important to him, and that means the rest of us can, too.

Posted in Success Stories | Comments Off

To Succeed in Business, Know the Risks

By Chemeketa SBDC

To succeed in business, know the risks

You’ve heard the statistics on business failures and how difficult it is for new businesses to survive. According to the U.S. Small Business Administration, 30 percent of new start-ups won’t last the first two years, and by the five-year mark, one-half of all new businesses will be gone.

Why does this happen? And more importantly, how can you prevent this from happening to you? Here are some very common reasons for new business failure.

- Starting up in industries where others are shutting down. Obviously you aren’t launching a business selling typewriters or rotary phones. But many industries are experiencing radical downturns such as the music industry, book stores, printing businesses and many others. You don’t want to be on the back end of changes in consumer demand, technology and other market forces.

- Not paying attention to your numbers. This can include neglect of your books, inattention to what your bookkeeper is doing, going ahead with something without testing assumptions, taking wild guesses about whether there’s demand out there or not.

- Setting prices that are entirely too low. It’s impossible to be the low-cost leader without economies of scale. Don’t play this game! Walmart and other discount stores will eat you up.

- Running a mediocre business to begin with. Customers will not return to a business that treats them poorly, has shoddy merchandise, and is altogether not worth patronizing. If you’re working harder and harder to attract new customers while not having any repeat customers, there’s probably a good reason.

- Underestimating costs. You can easily spend your way right out of business by paying too much for labor, materials and/or overhead. This puts you in a bad position with cash flow, and will doom your operation.

- Growing too rapidly. Sadly, a business that grows too fast is often one growing in haphazard ways, is chronically short of cash, and doesn’t have time to train new employees sufficiently nor implement sane systems. It’s like a car at top speed that will spin out of control and crash.

- Not having an adequate cash cushion. Seasonality, business cycles, unexpected events, huge orders, and economic trends all lead to an unevenness in cash flow. You need a cushion (that you’ve built up in the good times) to help you get through the lean times.

- Having dysfunctional management. This opens a Pandora’s box of misery, turnover, conflict, and unhappiness. Don’t let this happen to you! Pay careful attention to the dynamics of leadership in your business, solicit feedback on a regular basis, and seek help if you’re the one with the problems.

- Not bothering to do any planning. Winging it is a poor strategy, to say the least. Make sure to spend enough time thinking about where the business is going, and what happens along the way. This includes contingency planning for the inevitable sidetracks that life will put you on.

Posted in Small Biz Management, Start-up | Comments Off