Tag Archives: profitability

Open Up for Higher Pricing!

Open Up for Higher Pricing!

By Talmar Anderson

There are a lot of the ways that a business owner can effect change to raise their rates (accessibility, highly responsive customer service, for more READ this). Today I wanted to talk about where the idea of demand driven rate, fee or price increases are rooted. Stay with me because this will work for you whether you are in a service industry or own a product driven company.

Do you know that person you see and they instantly make you feel relaxed, you smile and feel like you could tell them anything without judgment?  I just saw one of my favorite people. Truthfully we have not worked together simply because I have yet to need her services and products (thankfully). I have immense respect for her expertise and achievements. I recognize her success and potential (sometimes better than her!).  I refer her to anyone that may even possibly have a need for her services. She is worth her weight in gold and I can look the referral in the eye and know, whatever she is charging, the value will always be there. How does she do it?

Brilliance + kindness + listener = High Value (set your own fee / price)

Open your big beautiful mind.
Open your warm friendly heart.
Open up space in the moment to hear.

If your market can consistently receive exactly what they expect from your company as a deliverable AND you apply these 3 extra pieces…You are a leader in your industry. Look in the mirror! “Hi Awesome!” These extra pieces will draw the ideal client. And that client WANTS not just what you sell but what is sold by YOUR company!

Brilliance, your expertise, is why you are so damn good!  Own it. You DO know your product or service better than others. You understand the customers’ problem and offer a solution that is helpful to your target market. Do others offer it? Maybe yes. But not as well as you. Walking in that expertise let’s a prospect believe in you and happily pay your increased pricing.

Kindness, friendly customer-centric services, operational processes and personalities can draw a cult following and raving fans.  This is where word of mouth will outshine the marketing efforts for an industry leader. Well treated clients that can feel the kindness before, during and after every sale will refer over, and over again. If they can feel that just by seeing you out networking or entering your office or store, they will not be leaving to save a few dollars with a different company. Kindness is priceless!

Listener. The root of all success. Let your customers not just be heard but feel like they have been heard. Make sure your company communicates not just to them but with them!  Listening is critical if you want to know what problems your market is experiencing. Focus and presence of mind are the hallmarks of caring and consideration. Really hear not just what they are saying but how they feel about the problem.  This will give your company the opportunity to respond both in communications as well as product and service offerings. Delivering the right solution instead of selling what you already have is always going to allow for higher fees!

If your clients want what YOUR FIRM offers, not just what is available on the open market, then the value of your offering has increased. Ask Starbucks about that. Let your customers set the value of what your company sells. Sell to your market for high value items. Not your competitors market.

Certainly if you sell to low income families, you can absolutely price yourself out of the market’s capacity to pay. Then we look for other ways for your company to generate revenue and build on the strong connection of your high value market position.

However, too often I see the opposite. Business owners set middle of the road pricing because they fear “the market won’t bear it”. Maybe it is your own fear of rejection or even fear of success. Often, convincing ourselves of the high value is a huge self-esteem exercise.

I challenge you to price your services and products off of what YOUR CLIENT value! As I told my rockstar-basketball playing niece, “Of course, you should be missing a basket once in a while! If you never miss a shot, you are not pushing yourself to be the best. Your team needs the best of you”. Higher fees allow us to build and deliver better products and services. Your business and customers need the best of you.

Not coincidentally, these 3 distinguishers truly are the mark of great leaders too.  Use them to lead you to higher profits.

Now Go! Grow!

 

Want more Talmar in your brain? Sign up HERE!

Advertisements

How Long Does It Take?

How Long Does It Take?
By Talmar Anderson

A growing company has needs.  You need process. Then you need to write it down to create repeatable procedures.  I know you have heard it before. These are key steps allowing us to hire and have others help grow your company. Today I want to ask you how long does it take to produce each of your services? What about each of your products?  How much time goes into the design much less the manufacturing? How long does it take to just write your proposals? Yes!  It is time to talk about time tracking. Stay with me because this is the secret sauce to successful businesses!

This is not about capturing the details for billing your clients (though we can talk about how this directly determines your true profitability HERE).  I often hear “Oh I don’t bill my clients that way” as an excuse to skip this step. However, as a business owner you need to understand where the bulk of the time is specifically spent within your company to deliver services and products. It is within these details that you can understand how best to create space for high demand or growth periods of your company.

For many small companies, outsourced independent contractors are used to start filling in when demand grows.  I both support and recommend this for most companies as they can be ultra-responsive to client needs and take their time to understand their growth.  Is it consistent?  Is the company going to continue trending up?  What could you be doing to help grow the company faster if you were not completing the deliverables?  As your company’s growth is proven to be the norm then this is when my clients and I sit down to really look at the future of the organizational structure.  If scaling and growth is part of your plan then bringing “employees” into the fold will be a next step.

Why employees?

  • Consistency of quality
  • Availability of labor – IC’s can take on other work and this could leave your clients hanging.
  • Control over brand and reputation.  – them representing you by how they dress, how they answer the phone; how they structure their signature…all influences perception on the size and strength of your growing company!
  • Legacy – building a company that employs people is rewarding on many levels

By only considering invoices from independent contracts for dollar value as a cost of goods expense type, it will be that much harder when you are ready to bring those roles in house.  Getting the time tracking under control for forecasting and strategic planning is taking charge of your business! The more you can understand how long it takes for each task the more success and easier it will be when you are ready to hire.

We need to understand HOW the sausage is made to be sure that we structure our business correctly.  Begin by determining how each service or product is developed then list out each of the separate tasks involved.  Assign time to each project and task. Then over time we begin capturing the length of time it takes to complete each task.  As you start to document these details we will be developing a history.  Depending upon your need and the industry this could take two weeks to two years.  There are a lot of time tracking softwares (i.e., Toggl) out there. Heck, even your project management software wants you to do this and likely has time tracking capabilities. The key is to start capturing the details NOW.

If you are a business plan writer, you may think that your best course of action is to hire writers to help you compose the documents for your clients.  Most business owners would go this route and may eventually experience some help.  This may create a little space for a new client or two.

However, if you start breaking out tasks specifically you may find that researching each client’s industry details and trends can take twice as long.  In this case, your historical data can steer you to hire a researcher and creating double the freedom and space for further growth and development! Understanding how exactly your company works will set you down the path of hiring for the correct positions to allow for less stress, efficiency of focus and, say it with me everyone, profitability.

It is through this type of process that you move from throwing darts with your eyes closed to making strong decisions about the future of your own company.

Now GO! Grow!

Want more Talmar In your brain? Sign up for the mailing list HERE!

A Startegic Plan for Your Strategic Planning?

A Strategic Plan for Your Strategic Planning?
By Talmar Anderson

Have you heard the following words but thought it sounded like something lofty that only big or super successful companies do?  Company retreats. Quarterly strategy sessions.  Meeting with an advisory board.  Are these words you hear but think…”Oh I can’t WAIT until I have the luxury to spend a WHOLE day planning!”….errr, bummer.  “Bummer?”, you ask. Why am I disappointed for you? Because you have missed the understanding that making this time is a discipline…not luxury.  You are missing the concept that without purposefully creating a safe space to sit, think and consider…change cannot come.  Certainly not as easily or quickly as if you applied purpose and intention behind it! Strategic planning is the “HOW” to your “What” for goals and vision.

Having said that, strategic planning sessions can be less than useful if you do not have a focused idea of where the meeting needs to go.  In a seemingly conflicting idea, the best strategy planning sessions allow for the fluidity of conversation and inspiration to take the lead.

In great strategy sessions you may come up with some brilliant new concept. In that same meeting you and your team may talk it completely out of implementation. And that is OK!  If coming out of a strategy session leads to understanding where your business IS NOT going you have created clarity, saved resources and can more easily focus company messaging.  That is progress!

Regardless of stage of growth, strategy planning is when we look at our current goals to consider how they are working, what possible changes we could make and which direction to move forward.  Often goals are refined or even changed. These can be annual assessments. Quarterly sessions work for some, including Talmar It Up clients.  This allows us to piece out concepts and not try to do it all at once.  One quarter it may be diversification and possible new incomes strategies.  The next quarter it might be shifting independent contractors to employees.  The next may be about analyzing and understanding workloads and true profitability. Maybe the forth will be brainstorming on strategic partnerships for the next year. All those sessions would support an annual goal that includes doubling net income and positioning for a second office within 3 years.

Committing to the time and scheduling these meetings create intent and permission to NOT be working on client needs, sales conversations and other traditional day-to-day profit driving actions.  Prioritizing a client need of an earlier delivery deadline is actually hurting you company.  You can easily set a reasonable client expectation that can be calendared around your strategy sessions. It is up to you to prioritize this company need of space and focus. In the end you will serve this client and all of your clients much better!

Strategic planning is where you get to STOP letting your business control your days, stress level and time sucks. You get to schedule a chunk (I use a minimum of 3 hours with my clients) that brings together controlled surroundings, brains and an agenda.

If you are using strategic planning, make sure you are getting the most out of it! Try these Talmar It Up requirements:

  • An agenda…it can be as simple as a concept but KNOW what you want to be focused upon. If you have a long list then prioritize what needs to be completed first. Do not move on until fully considered.  Some sessions will only address one topic. This is the meeting where you do NOT speed through the agenda.
  • Other brains. This could include your staff, a mentor, a coach or a full group of experts that act as you advisory board. The benefit of having different experiences and perspectives is priceless. Sincerely.
  • A set timeframe. You can talk circles around any topic.  To be productive, a time limit will create an ending and thus decisions!
  • Documentation – At Talmar It Up, we record the audio AND create written action plans for all of our strategy sessions. This creates a resource to help re-focus or clarify in times of stress.

And the number one MUST do for successful strategy planning sessions…

  • Follow up and implementation. One person needs to be in charge of creating movement for the company on these strategic plans. I am looking at you!  CEO/ Founder / Head Everything. This is the job description.

Strategic planning is the discipline and commitment that allows you the opportunity to create a business and life that includes luxury! ***mic drop***

 

Want more Talmar in your brain? Sign up HERE

Strategic Planning?
Are You Making it Hard on Yourself?

By Talmar Anderson

Have you been working on your strategic plans? So you’ve got your long term and short term goals laid out.  Maybe your deadlines are based on quarterly milestones.  You are excited.  This IS going to be epic.  You have big dreams and new products to launch. You are investing in industry specific education and growing your team.  As you are spinning in your chair from the inspiration coursing through you, you notice the inbox and receipts pile.  “It’s ok” you tell yourself.  I’ll get to the last three months of paperwork later.  Let’s get back to the shiny new stuff.

Hear that?  It’s the sound of another year of making business hard for yourself running to slap you upside the head!

Before you go forward with new ideas (especially if it truly may be the “one” that puts your company over the top) you must KNOW your company.  And I mean, know it inside and out.  Not just “have a pretty good idea”…this saying is almost as bad as “it depends” for pricing models.  (You can read about that stinker HERE).

So, do you know your company? Do you know which product or service brought in the most cash over the last 12 months?  Do you know which product or service was most profitable over the last 12 months?

Do you understand that those two questions are different?  Understanding the answers to even just these 2 questions can help determine;

  • How to budget marketing for future campaigns
  • Which new products or services should be launched first
  • What position to hire for next

And yes, the list can go on.  I think you get this point.  But the real point of this blog post is that if you are not staying current with the “paperwork” in your business, you are creating your own chaos!  That’s right, I’m calling you out.

Bookkeeping must be current to allow for real time profitability analysis and performance reporting. This leads into the metrics that the rest of your data and reporting can be measured against for true understanding of what does or does not work in your company.  Once anything is 3 months behind, that is a WHOLE quarter of metrics, you cannot even consider it in your strategic plans.  If it has been longer….well, you are throwing darts in the dark.  Instead of poking an eye out, you are wasting company money and efforts basing plans on outdated numbers.

That example is not the only metric you need. Do you understand your current clients? (What do they have in common? What exactly are they buying? Why do they buy?).

You need to understand who is buying and who is not to buying to be able to effectively steer and grow your company.  You need to know how your clients are finding you – exactly how they are getting to you!

Strategic planning focuses so much on the possibilities. It creates excitement, hope and motivation.  However, if it is not coming from a place of insight and historical consideration then these plans are not really the strong decisions of a business owner.  Without the understanding of how YOUR business has worked and currently is working, your plans are similar to buying a lottery ticket.  Sure you made plans and took the step to purchase the ticket but you cannot significantly affect your chance of winning beyond there.  Are you effecting change in your business?  Because, you need to KNOW to GROW!

P.S. If you are interested in “Knowing” your business, working with Talmar It Up will help.
Talmar It Up’s Know to Grow program is launching in January.  Send me a quick email if you want to find out more!

Nerve-racking! Operational Growth and Cash Flow

By Talmar Anderson
Originally published May 15, 2014

As an owner, we start our companies by handling it all ourselves.  Our next steps will be finding ways to sell more and deliver more.  This growth is often directly and easily tracked performance through growing revenues and profit margins. But when a company has need for an operations team, development and growth does not always directly deliver revenues.  However, it is precisely this operational growth of process and support teams that is required to set up a company for success.

You are counting the time you bill your clients as well as the time you built into your labor costs for production of your offering. Forecasting and covering these variable costs is easy and offers a security.  You know how many widgets you need to sell to receive “X” dollars in revenue. However, when forecasting organizational growth we need to ensure that all of the operational and salaried sales functions we develop get forecast under your fixed costs.  You logically understand that to grow the business, you can expect your expenses to increase. Emotionally, this can be a little frustrating and even depressing.

Knowing why we are hiring will allow us to feel a sense of satisfaction and deserved achievement.  Your business will require all kinds of growth throughout its many transitions. Be sure that you acknowledge the reason and create metrics for its success.  Panic can cause us to start cutting these long fought for, defined, developed, trained and implemented positions and processes! Go back to your reasons and goals for your sense of progress.

Start preparing yourself by taking the time to write the goals that you expect to achieve through this growth project.  By writing down our expected results, we can see the progress and quell the panic that may come with an increased monthly outlay of cash.

Did you build an operational structure that supports you pulling yourself out of day to day operations? How many hours do you expect to be freed up? I recommend that you have a plan for that extra time or it can turn into a lot of watching the cash flows. A plan to free up 5 hours a week to write your memoirs is quantifiable and will allow progress that is measurable. This does not directly bring cash in to our account and that has to be considered.

Most of my clients started growing their businesses by outsourcing their bookkeeping processes. If you are thinking about doing this write down your reasons.

  • Do you need more complete and consistent reports for stronger decision making?
  • Is one of the reasons because it stresses you out trying to understand the accounting concepts?

Both are great reasons and supportive of the business, your vision and your mission.  But neither directly grows the bank account. The bookkeeping systems are required if you plan to build a successful company.

Another example is management. If you are bringing on a site manager, is it to:

  • Add a layer of responsiveness for your staff?
  • Freeing up time on your own calendar by off-loading some of the daily tasks and allow space for strategic planning?
  • To create stronger oversight of the consistency of service delivery and product performance?

All supportive and necessary processes in a growing company but these do not move the decimal point in the checkbook, right?

What can you do if you know you are going to grow more and more anxious with the investment in your operations processes and team?  Slow the progress and split some of the time and money investment in a new / additional revenue push.  Can freeing your time from the operation processes allow for a business development push? Can the hours now open on your calendar allow development and launch of a long thought of quick to market service or product? Can freeing an existing staff member that is brilliant with clients from doing the bookkeeping allow for more billable hours to be invoiced monthly? Knowing your personal stress triggers allows us to plan for rapid or slow progress that is satisfying AND rewarding.

How you grow should be specific to YOU and your comfort level.  Understanding what processes are needed and how to organize your team comes with an understanding that you are investing in your company’s foundation just as if you were buying equipment in a factory. Planning can make it less stressful and keep you focused.

 

Diversification does not need to break trust

By Talmar Anderson
Originally published Oct. 9, 2013

Knowing you niche is great.  Define it and your processes.  I say keep doing it until you are brilliant at it and your clients are telling everyone else you are brilliant at it.  Then you can look around for ways to grow AND protect your business. Along with all the other growth plans (more clients = more profit = RULE the World) comes a time when a business owner considers whether to diversify.  There are many ways and many reasons to do it. You know me and that whole risk mitigation I keep talking about, there are steps you need to ensure are part of the process to help lead to success when diversifying.

Often times, strategic planning centers around growing profits. Sometimes even dramatic growth is considered.  During strategic sessions different ideas come forward.  Merge with a complimentary company?  Start selling a product to expand on the services you currently offer?  Start offering a service that supports the products you already sell? Even just finding a new way to package what your company already offers to enter a new target market is diversification that needs to have the process behind it that will pave the way for success.

If there is a time to spend some money it is during the market research around diversification. First and foremost, ensure there is a market.  Crazy talk, I know.  Successful business owners in one area can fall victim to the “super great” idea.  Because YOU are excited and it seems right to you is just the starting point. Your excitement is helpful but should not be the decision point.  Let’s make sure that it is not only a great idea but that people will actually pay for it. No problem, you did that once before when you started your business.

Now here is where an existing company needs to take the process out a little further before officially deciding to go forward.  We need to make sure your existing clients and referral sources think it is a “Super great” idea.  More specifically, are they offended, confused or disagreeable to the diversification?  Do they think it is a good fit? You need to reach out to YOUR people and see if they will support it.

Let’s look at an example. A physical trainer has a stellar reputation for being able to help his clients become healthier and, consequently, happier people.  Easy to promote and align yourself with this guy.  Now he finds a great product.  It makes perfect sense to the trainer because he KNOWS his clients have a hard time getting to all of their veggies every day.   It is not his product but he is partnering with this company to offer supplements that help replace the nutrients people may be missing out by not eating all their veggies daily. He plans to sell them through his facility as a way to “help” out his clients and generate a revenue stream that is not contingent on booking hours of the day. But after investing and executing partnership agreements and stocking up on the product he is losing training clients.  He finds out his core client base loves working out with him and his team BUT the majority is working toward healthy eating and the chemicals in the supplement are freaking them out.  The clients thought he was about good health and their perception is that the supplements are not part of healthy living.  New clients have a harder time understanding the trainer’s brand…remember healthier for happier lives.  Much as they all agree that they have a hard time eating their veggies every day, it is not enough of a problem to the client.  Trust is broken through the confusion.  No trust. No business.

The business owner now needs to spend time and money rebranding and trying to rebuild that trust.  If he had done all of his research he would have found out the concerns of HIS clients.  He could have been in front of the education and branding tie in for current clients.  He may have even planned for losing some clients because the diversification would allow for a much stronger business in the end. The key is to be proactive here.  You will not lose trust if you announce your change of direction and address any specific hesitations from the beginning. This does not mean that all of the clients will stay or agree with the change but any parting of ways will not cause irreparable damage to your reputation in this situation.  If 99% of your clients say they won’t pay for it and don’t think it is necessary, you are looking at a major shift and building a whole new business essentially.  Is it worth it?

The other sticky wicket you need to consider is your staff.  They can just as easily break the trust between your company and your clients.  I simple memo and “this is how we sell it” can be catastrophic.   You need to plan for and allow time for an introduction and education of your employees.  If the veggie supplement makes sense to you and you take the time to share the details it will help tremendously.  Take the time to let them voice their concerns (good practice for the clients).  Plan for workshops offering how they can talk to the clients about not just the new product but why it works with your company.  They will be asked what they think about the product and the “new change” as well.  Give them advice and encouragement and then they can support the company and its effort.

I do love the idea of diversification to ensure companies are not too reliant on one client, one revenue source, or one market.  It is hard work to bring new ways into a working “machine”, but you can do it.  It’s just like starting a business out of thin air.

Profitability is spelled C O N S I S T E N C Y

By Talmar Anderson
Originally published Aug. 22, 2013

When looking at your company from the higher macro level – there is a simple step that can bring profitability and help build that path to success.  Have you ever worked with someone who had an “Open Door” policy? Some can do it and some cannot.   Have you worked with the person that touted that little gem but truthfully was neither in their office often enough or shut down ideas as quickly as you could ask “got a minute?”?  Maybe you have been fortunate enough to work with the person who actually had an open door to go along with the “Open Door” policy.  THAT manager was open to new ideas.  They were quick to address concerns and even followed up on any unanswered questions.  By applying consistency throughout your company you will be taking control of a major requirement for that success – trust.  What your company actually does is just the beginning.

Start just by consistently communicating your vision! Understanding not just what your company does but where your company is going allows you to take advantage of opportunities that are correct for your company.  Making sure that your business partners, staff and clients know what you offer and what you are planning for the future allows for them to become part of your expanded team.  They will better be able to send you information or people who can help progress you towards that vision. Clarity of your vision for the business helps allow you to be consistent about what you need.

Consistency in management equals a successful team.  When hiring, training and managing employees it is imperative to build realistic expectations.  Consistency in communicating to staff their responsibilities for delivering, interacting with co-workers and clients, or communicating their own progress and needs will help to build loyal employees. And it lies squarely on you and the management team. If you say you have an open door policy, you have to actually make yourself available to your staff on a consistent basis! If you are requiring time sheets by noon on Friday then do not follow-up on Wednesday the following week.  Upholding your policies and procedures allows staff to trust that those rules really do apply all of the time and can create a strong working environment.

If you have any clients at all and you plan for retention of those clients, delivering on your product or service is a must!  You need to have a process, ideally documented, that is adhered to for each contract. Another expectation can be set, and therefore further promote trust, by also communicating the general process to the client. Setting and meeting expectations allows for success to be recognized.  Your engagement communication needs to discuss how changes to pricing and deadline or any other possible influencers would be addressed.  Consistent process and communication on these points will create another opportunity to build the company’s reputation.

The saying, if it walks like a duck and quacks like a duck well….you certainly aren’t going to be looking for a fuzzy bear at the end of that sentence. By reacting, delivering, communicating and attending events in a consistent manner you allow for employees, vendors, clients and the public to understand and develop expectations.  Consistently delivering on those expectations allows for trust to grow and your business to thrive.