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6 Marketing myths that can derail your business
Nick Roberts • May 20, 2015
Marketing is a vital business activity yet generally misunderstood by many business owners. You may be fantastic at what you do but unless you can market yourself or your business you're unlikely to succeed as a business owner.
- Marketing is the same as advertising. Far from it - advertising is just one type of marketing, whereas marketing is everything you do to promote your business to both existing and prospective customers, including obvious activities like asking for referrals, networking and Social Media as well as less obvious things like how you answer the telephone, your business name and the speed of response to customer enquiries or orders
- Marketing is a cost. Not so, effective marketing is an investment, since the more you spend, more customers and business should be generated for your business.
- You're better off trying to reduce outgoings than working to produce more income. At the very most, you could probably cut your costs by say 25% before your business suffers to the point where it cannot function effectively and the quality of your service or products plunge. On the other hand, the potential to increase your profits by producing more sales or by higher gross profit margins is virtually unlimited.
- You can delegate marketing (to an employee or marketing agency). Marketing is so important to your business it is vital to organise this yourself, closely supervise marketing activities and spend a significant proportion of your time marketing.
- You don't have to spend much time on marketing. If you want your business to grow and be successful, you should spend a third to one-half of your time on marketing. Many business owners spend no time at all on marketing, mistakenly thinking that business and customers just roll in the door by themselves, retreating to their comfort zone of working in their business. What happens when the next recession arrives?
- Marketing costs should be strictly budgeted. If you understand the lifetime value of your customers i.e. how much they are worth to you over the time they continue to buy from you (to calculate this multiply the average number of times they buy from you over the year by your average $ sale and by the number of years they stay a customer) and know how much it costs you to acquire a customer then the amount you can spend on marketing is endless providing the money you make from your customers is more than your customer acquisition cost.
If your marketing needs a boost, contact nick@abac.co.nz , ring 0800 ASK NICK, for more on marketing, visit our list of services.
Nick Roberts has marketed his way to success by starting the Accountancy + Business Advice Centre from scratch with no clients whatsoever into a thriving busy practice with new clients coming on board every week.
High, low or somewhere in the middle? Where to pitch realistic charge-out rates is a common question facing trades, service and professional businesses.
In fact it's probably one of the most difficult areas of business. You have to be careful not to underprice as this will reduce profits, but at the same time, overpricing could turn customers away.
Setting charge out rates is just as important as marketing and delivering a fantastic service. You can do these two things excellently and then undo the lot by setting charge out rates too low or too high. This means pricing is a complex strategy that should be carefully undertaken and reviewed.
Read more here
Do you wonder sometimes why your Council rates are so high and what they do with all the money? Especially when you see Council workers (as hard working as I'm sure they are) using leaf blowers on the Havelock North to Hastings cycle path?
Finding the money to pay your rates is hard enough as it is, but when you're in business and you have a bad year it's even harder, so did you know you can get a rates rebate if your income drops below a minimum threshold? The threshold level varies depending on your income and situation, but for example, a household with an income of $30,000 and one or two kids could get a $600 rates rebate. And then, even better, you can take the kids to Splash Planet and get in cheaply with a copy of your rates bill!
For further details click here, or email Nick for help if you're not sure what to do next.
n previous blogs we've talked about cutting ACC costs by switching to ACC Cover Plus Extra. However, you need to make sure that if you reduce the level of your ACC cover, that you have adequate life cover in the event of your untimely demise.
This is because ACC pay out Fatal Death Benefits, the amount of which depends on your income for ACC purposes and the amount of the ACC payout can be very substantial.
A spouse is entitled to 60% of the 80% ACC entitlement for 5 years whilst children (via the spouse) will receive the benefits until they turn 18 at 20% each up to 40% in total.
Take, for example, an earner on $80,000 income who dies an accidental death with a spouse and two children of 4 and 7. Collectively they will receive benefits of $1,049,600. If, on the other hand, the earner had reduced his ACC income to $22,464 the benefits would reduce to $368,410, a very substantial reduction indeed!
So, if you want to reduce your ACC premiums by switching to ACC Cover Plus Extra, you have three options:
Take care not to die accidentally!
Get adequate life cover
Stay single without any dependants!
If you need help with ACC, contact me at Accountancy + Business Advise Centre.
The availability of your annual financials is a wonderful opportunity to review your business performance. You can discover how to improve your business as well as refresh your enthusiasm and drive in the business.
Click here to read seven ways you can use your annual financials to improve your business.
Your annual financial statements have their uses, but by their very nature, they are far too historical to be of any use in managing or improving your business.
The most valuable financial accounts you can get your hands on are interim accounts prepared periodically - monthly for larger businesses or quarterly or bi-monthly for smaller businesses in line with your GST return periods. There is a strong correlation between the availability of interim accounts and business survival.
Find out here what having interim accounts to hand means for you
These are the four most common courses of action you can take if you can't pay your tax:
o get some advice (we'll be happy to help) and take action today!
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Preparing an annual cash flow forecast can tell you a lot about your business. It can warn you with plenty of time to spare that you're not going to have enough cash to survive the next year without getting additional working capital - which is vitally important to know. Or it could be the wake-up call you need to make some changes in your business. You might need to make a tweak or two, like increasing prices or shedding ineffective staff, or you could discover something more serious, such as you're in a twilight business and it's time to move on.
Read more on how to prepare and read your forecast here.
Just how much do you know about your business? No, not about what you sell, or how you make or deliver your products and services, I mean the really important things that determine whether you're going to make it through to retirement or maybe even successfully selling your business.
These are my top eight favourite things each and every one of us business owners should know about our businesses.
I've said this before (and no doubt I'll say it again) but I'm always surprised at the lack of simple systems utilised in owner-managed businesses. Using the word "systems" can be off-putting because people immediately think it's going to be too complex, too costly or too time consuming but a system can be very, very simple.
Using systems makes a huge difference to the way a business operate, read more here.