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Issue 1 “We have those sales figures Steve, I just need to go through the paperwork and tally them up…”

How can you boost sales? There are many options, however two obvious ways are: review your current sales process, and develop your sales staff.

The issue

So I arrive at my new clients premises to do the exploratory meeting and see if I can help them boost their sales. First step? Review the process.

In response to a question like “So how are sales going at the minute?” I often get wordy answers which talk about results in a very general way. I enjoy hearing the owners’ perspective on it; it’s good to get a feel for their industry & business from their point of view.

However it’s when I start asking for specifics, “What volume of enquiries are you getting?” that I regularly get a response along the lines of: “We have that figure Steve; I just need to go through the paperwork and work it out…”

The response

It’s been said before, but I’ll say it again “if you can’t (or in this case don’t) measure it, you can’t manage it”

If you’re already tracking your enquiries – great! Be mindful here; are you only tracking this in terms of knowing where your valuable marketing budget should be spent? This is crucial of course, but it would be useful to know how effective you are with each of those leads wouldn’t it?

There are many ways to measure sales effectiveness, but here are some basic measurements that can help build a picture of your current business performance:

  1. Sales
    • a. Sales by number (volume of sales)
    • b. Sales in good old pounds sterling (value of sales)
    • c. Sales Conversion rate = ‘Total Sales’ divided by ‘Total Enquiries’
  2. Sales’ Cost
    • Cost of an Enquiry = ‘Total Marketing Spend’ divided by ‘Total Enquiries’
    • Cost of a Customer = ‘Total Marketing Spend’ divided by ‘Total New Customers’
    • Total Cost of a Customer = ‘Total Costs’ divided by ‘Total New Customers’
  3. Sales’ Value
    • ‘Average Worth’ of a customer = ‘Total Revenue’ divided by ‘Number of Customers’
    • …it’s also worth looking at the average lifetime of a customer.
    • ..and the most popular product choice.

N.B. The above calculations should have specific timeframes. To use the most obvious examples: Weekly, Monthly, Quarterly & Annual.

Interesting to note, often well established companies struggle to provide these figures, though the reasons be different from a start up business: perhaps they have too many measurements (can’t see the wood for the trees) or simply with the passage of time their ‘Key Performance Indicators’ are no longer ‘Key’ anymore!

So you want to boost your sales? You need to lead your salespeople! Current frontline sales-relevant figures are the first step!

Action: Does this relate to you & your business? If so, based on the above, what will you STOP doing, START doing and CONTINUE doing today?

Related Articles: This is the first in the series: “Boosting sales: Things my new business clients say to me” which follows this introductory piece ‘Your new business is exciting isn’t it!? DON’T talk about it!’ See it here: Part 1 Part 2

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It’s official 2009 could be one of the hardest years ever for any business.

Business will be tough and attracting customers will be a challenge. Whilst you may not be able to influence how much customers spend with you, one thing you can do is to CONTROL YOUR COSTS.

So lets get back to some basics about costs. There are two types of costs

VARIABLE and FIXED.

Variable costs change in relation to the amount you sell or supply. Examples would be the stock for the business, packaging, postage or delivery costs etc.

Fixed costs remain constant and do not change regardless of your level of sales. Examples would be the rent you pay on your premises, electricity bills, your accountants fees, bank charges and so on.

So how can you control your costs?

The very first thing to do is to write down all of your costs and to decide if they are fixed or variable.

This is a good exercise as it will establish exactly how much you are spending each day / week / month.

Once you have established all of your costs the next task is to reduce them – yes it can be done and it would not be unrealistic to set a target of between 10% to 20%.

Remember, anything saved on costs immediately means more profit for your business.

Reducing Variable Costs

Lets start with the variable ones first as these can be changed quickly and so should have an immediate benefit on your profit.

Have a look at the list.

  • What can you reduce or eliminate?
  • What can you re-negotiate, put out to tender or shop around for a better deal. It is a buyers market at the moment so don’t be afraid to ask. Barter and negotiate hard.
  • Can you get discounts by buying in bulk?

If a supplier does not offer a discount – ask for one! You will be surprised at what you can achieve if you ask. So be ruthless and say you will go elsewhere if the price is not reduced.

Examples of where savings can be made are:

  • send invoices and delivery notes by email instead of printing them or only provide them if requested. This saves on paper, printing and postage costs.
  • use less packaging for products or charge for none essential items eg carrier bags.

Reducing Fixed Costs

These may take a little more time to alter but can actually result in higher savings. So they should not be ignored.

The target here should be to reduce all costs. So challenge everything you are spending. You may have to put some effort in but your hard work will result in huge savings.

Examples of where you can make savings:

  • on rent, ask your landlord for a rent reduction or a rent holiday
  • shop around for cheap utilities such as electricity and gas
  • change banks regularly to take advantage of free banking periods
  • shop around for savings on professional fees eg. accounting fees. By paying these monthly some accountants will provide a fixed fee service.
  • change your business telephone, internet or broadband packages to take advantage of special deals.

Remember:

  • be harsh
  • be ruthless
  • negotiate hard
  • challenge all fixed costs
  • do not be complacent

Control your costs and Beat the Credit Crunch

 
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The current economic climate is having an impact on businesses large and small. Many are suffering while others are discovering new opportunities. In fact, some people who have recently lost their job, be it through redundancy or otherwise, are thinking about launching their own business. What is clear is that the uncertainty in the economy means that researching a business’ market has never been more important.

Market research is an important tool for any person who wants to launch a business and for small firms looking to grow their business by launching new products or services. Market research involves scientifically-led studies to collect necessary market information, enabling entrepreneurs to make the right commercial decisions.

It’s an essential stage in the business start-up process but many entrepreneurs don’t do it – not least because of the supposed cost. Market research determines the feasibility of a project and it’s a way to adapt a business’ strategy (communication, pricing policy, products range…)

What it is…

It’s important to carry out market research in order to:

  • confirm an idea
  • make a project credible
  • professionalize the setting-up approach
  • convince financial partners and others

Online research has revolutionised market research, providing both opportunities and challenges to researchers and research users. Online market research has grown rapidly in recent years as a key form of data collection for primary research activities.

What it offers…

Online market research offers both large and small research focussed organisations the chance to eliminate the costs involved with face-to-face, postal and telephone data collection.

There are a number of benefits to commissioning online research, including:

  • Easier targeting of respondents across numerous segmentation variables provides access to a precise and qualitative panel which ensures the collation of reliable data on sensitive issues.
  • Multi-country projects no longer need to be an obstacle to research – worldwide research can be conducted at the click of a button.
  • An inexpensive way to conduct large research projects – it is possible to get hundreds of responses for less than a thousand pounds.
  • Most large research suppliers have access panels which provide an easily accessible, reliable respondent base which can respond promptly to online questionnaires.
  • It allows for a very rapid turnaround – research can be undertaken and results received within a few days as opposed to several weeks involved with face-to-face and postal data collection methods.
  • The use of video, images and audio for richer questionnaire environments will return a greater quality data.

For a business which needs to gain a general view from a large cross-section of the population, and in as short a time as possible, there is no doubt that online research offers a viable benefit.

Starting a business?

Launching a new product or service?  

Test the market first!

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If you MUST advertise, or feel an overwhelming desire to pay lots of money to see your company in print, then for goodness sake THINK about your advert and what the person reading it needs.

Here are my top five DON’Ts for advertising:

  1. DON’T write long and waffly copy – keep it short, sweet and to the point
  2. DON’T forget to include your contact details … seriously, there are companies that forget these.  How can potential customers get in touch?
  3. DON’T use a small font that makes the advert hard to read … especially if you are using a small font to fit in more copy – read tip 1 again
  4. DON’T use a stock photo or image that most others in your industry use as you will just blend in with everyone else … a quick search of osteopaths in the yellow pages will show you what I mean
  5. DON’T forget a call-to-action … this is a reason for the reader to call you and not to get in touch with the company advertising next to you.  A free report or discount with a code to quote (so you know which advert they are responding to) will work wonders.
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Does this sound familiar?

Are you one of the many who spent a few pounds on setting up a Limited Company but now find you are being swamped by letters from HMRC and Companies House.

As accountants in a practice specialising in start-up businesses, we often hear from people who are late in filing their accounts or annual return but just have no idea what any of it means or where to start.

Setting up the company was easy and probably took less than 24 hours but it means a life time of legal responsibilities.

So if you are in this position or are about to set up a Company, just stop for a moment to read this and it will become clear as to what you have got yourself into.

For a limited company you will need to complete the following:-

An Annual Return

This is a snap shot of information about the Company at a point in time eg. who are the shareholders, directors etc. This if often confused with the accounts but is very different.

This must be filed at Companies House along with a fee of £15 if electronic or £30 if paper.

Annual Accounts

Although Companies House only require an abbreviated set of accounts to be filed, which look easy to prepare, HMRC do require a full set of accounts including a detailed profit and loss account and directors report.

Companies House and HMRC are very different government departments and do not work together. So do not assume that just because you have filed some with one of them, the other gets it as well.

CT 600 Corporation Tax Return

Along with the full set of accounts, HMRC will require a CT 600 to be completed.

This is not a straight forward form and, unless you have experience, it is best left to professionals to complete.

Annual Self Assessment

Regardless of how much they earn, each director of the Company has to complete a self assessment which should show all of their income from every source, not just from the company.

Annual Employer Returns

Any business which employs staff has a number of reporting requirements eg. P35, P14, P11D etc.

Quarterly VAT Returns

Any business, not just companies, whose turnover exceeds VAT threshold in the previous 12 months has to register and account for VAT. The biggest mistake made here is assuming that the need to register relates to the accounting year rather than the previous 12 months from the current date.

Registering for VAT means the completion of a quarterly VAT return. This is due at the end of the month following the quarter end date. So it is essential that the accounts are kept up to date so that this can be completed on time.

Late filing of any of the above returns will result in a fine, penalties and interest. In the case of your accounts you can be fined by both Companies House and HMRC. The fines start at £100 and increase from there up to the possibility of a criminal conviction for significant late filing of documents.

It doesn’t end there of course. Even when you have stopped trading you have to file dormant accounts each year or if you decide to close the company down there is even a long winded process to follow for that.

So in its life time a Company can cost you a significant amount of time and money to meet the plethora of filing responsibilities.

Yes of course this cost is tax allowable, except for the fines and in many cases there are tax advantages to operating as a Limited Company.

However, just make sure you know what you are getting into before you start so there are no great surprises later.

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