Business Strategy

Professional Painters - Do YOU want to show up on Google’s first page in the top ranked search terms for painting contractors in your local area and get leads?

Advisors On Target has added a new service and we want our clients and newsletter readers to have the first opportunity to see what we have going on and to participate if you are interested. Advisors On Target and Web Strategy Lab have teamed up to launch Pro Painting Net, which we believe will be of tremendous value to our clients.

Are you ready to get better business results online?  Then claim YOUR local service area now with your own Pro Painting Net Mini-Site!

All 3 of our On Target Beta-Testers are on the front page of Google for the top ranking search term with their locale! This happened within days.

Some of you may be able to say you are already on the top 10 listings in Google, if so, Congratulations. But most of you are not ranking where one of your sites have the best chance of being found.

Would you like to be here? Look at these results for Painting Contractor and On Target group member, Mario Guertin

Now you too can be a part of Pro Painting Net - a network of websites built around the highest volume painting-related keywords on the search engines. What’s in it for you?

• You get your own 3-page ‘mini-sites’ optimized for local searches for your painting services in any of your service areas.
• You get exclusive rights on any PPN Domain to any service area you choose - and you define the service areas.
• You get quality backlinks to your existing website.
• You benefit from the success of every other member of the Network.
• By the way, it’s very affordable

Your Mini-site is meant to be a piece of your online presence – another way to get you found and will in most cases rank faster and higher than you can get your “main” website to rank for the top search terms

But does it really work? We asked 3 On Target Members to be beta-testers for this new program, one in a small market and two in larger markets but using a the name of a local service area within the larger market as a key word. Here are our Beta Tester stats from March 1, 2009 for the term “house painting” followed by the local name: continue

“What’s your online strategy?” I recently asked a group of business owners this question, and heard everything from “I don’t think I really need a website for my business” to “I’m number one in Google for ‘widget installation’ and my Adwords ROI is over 200 percent” - quite a range of tactics, quite a difference in results. But these business owners all shared one thing in common - not one of them had a complete online strategy.

It’s a pretty good bet that you don’t have one either.

You may already get some good business results online. You may already use some smart online tactics. Congratulations for being ahead of the curve. But you can’t afford to be complacent. The competition is about to get a lot tougher, because every day more of your competitors are using the same online tactics you use.

Not only is your competition getting tougher, but the online environment continues to change. Every day more people use online search as their primary way to find a local business. Search engines like Google constantly adjust the way they rank sites in their search results. Endless new web-based applications are invented that could streamline your business operations. Business owners who stay on top of the changes are rewarded; those who don’t are punished. Which are you? continue

Large companies often leave smaller market segments unserviced since they don’t represent, for them, a sufficiently profitable target. A small business can capitalize on these unmet needs by developing a product or service that fills the gap. You can think of a niche market as a narrowly defined group of potential customers.

A niche market can be a built on developing a product for a particular consumer demographic, such as manufacturing kosher milk products to meet the dietary requirements of particular religious groups. Many service firms have grown their business by deciding to build up expertise in how a certain industry works and focusing on attracting clients from that industry based on the expertise they can offer. Others will concentrate on a particular service line such as a dentist who specializes in pediatric work. Still other businesses concentrate their resources on marketing to a particular region, so they could be said to operate in a geographic niche. The competitive advantage of being in a niche market derives from being alone there and of being able to offer a level of expertise others can’t match or perfectly filling a particular need.

Niche market businesses are frequently small scale since they tend to focus on identifiable sub segments of a larger market such as cleaning blinds instead of cleaning offices in general. But it’s an error to think that that is a necessary association. The First Commerce Bank, in Charlotte, N.C became hugely profitable concentrating on servicing small business clients and some accounting firms have moved into the big league through providing advice to clients in specific industries or occupations.

There are three basic ground rules for making niche
marketing work for you.

1. Develop a detailed marketing plan:a well developed marketing plan is the key to successful niche marketing. It has to be very specific about the basic business concept - what you are selling, who you are selling it to, why they would buy it (the benefit to the customer) and how you will make money out of it.

2. Appoint a niche champion:the secret to tapping into a niche market and working it to get the best return is to know just what it is the consumer will really value from the product or service you are offering. If you need to, find a niche champion with the knowledge and experience in the product/service that will enable you to develop just the right package. If your niche marketing initiative is really a subsidiary line of business within a larger organization, for instance preparing a line of gluten-free products within a general bakery business, ensure the project is properly funded and the niche champion has sufficient authority and respect to be able to keep the project on track. Don’t throw away the opportunity through bad planning and execution.

3. Market hard: niche marketing succeeds or fails on its success in connecting with exactly the right kind of customer. Both the target market and the marketing channels that will most likely reach them should be closely defined. Give careful consideration to what marketing messages will work best as ‘hot buttons’ for prospects and will prompt them to purchase the product. Marketing spend may not need to be large but it does need to be well focused so as to get your name known within the target market and educate them to the benefits of using your product/service. In the case of gluten-free bakery products, you could advertise in health food stores, food bars, natural healing centers and healthy living publications.

The famous entertainer Bill Cosby once said, “I don’t know what the secret of success is, but I know the secret of failure and that was trying to please everybody.” The same wisdom applies in business as in entertainment. For many businesses, large and small, creating a product or offering a service that satisfies the needs of a niche market has been a recipe for success.

Information for this article is sourced from RAN ONE.

f you are planning to sell your business, it’s clearly an advantage to have an objective idea of what it is worth. Even though ultimately a business is worth what a buyer is willing to pay, it’s easy for a seller to undervalue and lose out in the deal or to unrealistically overvalue and miss out on attracting buyers.

Many companies are oddly reluctant to invest in getting an accurate valuation. Even among owners who had tried to sell their business at one stage, a survey reported by CFO.com found that only 12% of them had ever had a formal valuation done. This is surprising. Guessing the value to put on your biggest asset is really risking your future.

There are a number of different valuation methods and different methods may be appropriate for different types of business. For example, if you run a services business there’s little point in evaluating it based on the value of its physical assets. Other methods consider intangibles such as ‘goodwill’, which are difficult to put a figure on but can represent a significant element of the value of some businesses. And value may also be in the eye of the beholder - it will actually be worth different amounts to different people depending on their reason for wanting a business.

A variety of factors are taken into account in ensuring that a valuation is accurate and useful. Primarily, the valuation needs to be in line with hard data, particularly your current and past financial position. Some valuation methods focus on financial data such as profit levels, asset value, cash flow and debt carried by the business. Other factors are not so cut-and-dried. The valuation might incorporate financial projections for the next three to five years. It might consider intangible assets, such as intellectual property like patents and trademarks, brand names and goodwill. You also need to consider the context. Your own company may be doing very well but its value will be diminished if it is part of an industry that is in serious difficulty or in decline overall.

There are over a dozen different valuation methods. The crudest methods operate by rule-of-thumb or ‘multiples’. For example, landscape businesses are estimated to be worth 1 to 1.5 times their discretionary earnings plus the value of their capital assets. However, multiples only give a rough, industry wide ballpark figure for business value. They do not necessarily give the real value of a particular business. More accurate methods include the ‘balance sheet’ approach, which basically subtracts business liabilities from assets. The ‘adjusted book value’ method is similar but uses current market value rather than purchase price or depreciated value.

Retail and manufacturing businesses are generally assessed according to the value of their assets, given that they tend to store large amounts of value in their inventory or capital assets while service company valuation is based on the ‘capitalization of income valuation’ method, which places a heavy emphasis on intangible assets. It’s also possible to calculate the value of a private company by comparing it with an equivalent public company and making appropriate adjustments. Business value can also be estimated by anticipating cash flow over a three to five year period and adjusting that into current dollar terms.

A current valuation can be important at times other than sale. There are numerous business and legal situations that require a detailed valuation, among them: when considering a merger or acquisition; when seeking investment capital; when buying out a partner or implementing an employee stock ownership plan. A properly determined valuation inevitably enters into less pleasant activities such as shareholder disputes and divorce settlements. Tax minimization planning can involve business value, for example in developing estate and gift transfers.

A valuation can also indicate how your business compares to its direct competitors. It can identify the strengths and weaknesses of your business. When a valuation identifies weaknesses, it can help you focus on building long term value into your business. This will improve your outlook in terms of succession and estate planning.

With this many potential situations requiring a business valuation it’s important to have an up-to-date professional estimate of the real value of your business. To get a valid and commercially useful valuation you will need to work closely with a professional who has experience in the area. Your accountant already has a good understanding of your business and will be able to advise you on which valuation method will be best suited to your business circumstances.

Information for this article is sourced from RAN ONE.

A business plan is a roadmap that sets out your route for the development of your business. It doesn’t tell you just about the current state of the business, its strengths and its weaknesses, it will also show up the opportunities and what needs to be done to stay ahead of the competition.

You might think you know all this now and don’t have to write it down. But what if something happened to you and someone else had to take over the operation? What would they need to know so it was still there and profitable when you returned? This is the kind of information contained in your business plan and its good insurance against the unknown.

It clarifies your objectives What are your goals? These will be in your business plan, the original goals you had plus any additional objectives that arise in the course of business. Your business plan spells out the goals and shows the milestones along the way that tell you how close you are to achieving them. Goals are flexible and can be as varied as achieving a certain level of turnover or simply acquiring new customers. It’s important, however, that each is presented in the same way as a target with milestones or indicators that will let you measure how near you are to achieving it.

It contains your business vision A vision is your description of how the business will look at a specific date usually three or five years from the time the statement is written. This is another part of a business plan that is regularly updated and describes how the business will look from the outside (to customers) and from the inside (to management and staff) when it has achieved the goals that are presently set.

It outlines your company’s mission statement The mission statement is another expression of the businesses’ long term goals. The mission of all businesses is to conduct profitable business of course, but it should also have other intangible goals covering such issues as morality and ethics. How do you want your business to treat its customers? How does your business want to treat its team members? The mission statement is both long term and ongoing - a statement of principles of business conduct and behavior that rests above the metrics of commerce.

Cover all the management essentials Businesses are organic in nature, changing constantly but always with growth in mind. Your business plan is also organic - an ongoing record of the changes in your business as well as a structure for the changes that will take place in the future and their intended consequences. Here are just a few of the many possible elements that can be incorporated into your business plan:

• Your products - The present and planned range of products you sell, together with any product development your firm undertakes to create its own products
• Your management structure - A statement of positions, responsibilities and authorities
• Your finances - How the business is funded and how it will repay its loans, your company’s credit policy and how it will be enforced
• Your marketing plan - How your business will be marketed, the promotional budget, the target market, future plans for expansion, and
• Your succession plan - When you intend to leave the business and how you will realize its maximum value

Every business should have an up-to-date and functional business plan. It will tell you where the business is going and how it’s going to get there. It will focus the efforts of you, your management and the rest of your team on the drivers that will bring you what you want from the business. It is, in other words, a map to the future of your enterprise.

Information in this article is sourced from RAN ONE, Inc

Retirement - you may already have a date in mind, a particular birthday or after a certain number of years in the CEO’s position, but will the money be there to support your retirement needs when the date rolls around? Many people get to their hoped for retirement date only to find their finances are insufficient and their dreams need to be put on hold. Planning for your retirement from the business should be a long term and well thought out process so that it can happen when you want it to. There are a number of steps you can take to set a realistic retirement date.

First, you must determine what your financial needs will be during your retirement, and that means budgeting for an unknown number of years. Some financial planners use 70 percent to 75 percent of pre-retirement income as a general rule, but this only applies if your financial needs actually decrease after your retirement.

Similarly, a little forward planning can allow you to minimize your expenses and reduce or eliminate many debts by the time you expect to retire, for example, by paying off existing mortgages and other long term debt obligations.

Regardless of the post-retirement income you think you’ll need, experience shows that most retirees find they need more than they originally anticipated, so it’s always wise to include a contingency in your estimates of the income required.

Still, for many business people what they are really relying on is a good sale price for their business as the major contributor to their retirement income. That means some expert advice from an evaluator. But there is still a piece of the jigsaw missing – you could be taking the opportunity of the years between now and your retirement to actually improve the value of your business by improving its cash flow. As an experienced business owner you’ll have an appreciation of the importance of cash flow. It’s always referred to as the ‘lifeblood’ of a company and rightly so, and it will also have a major bearing on the value of the business at time of sale, and therefore on when you can actually retire from your company.

Cash flow is what buyers want

The first consideration is that when you’re looking for someone to buy your business they’ll be looking carefully at its cash flow. The cash flow generated by the organization is what gives the business its real value. To put it another way, nobody pays for ‘potential’; what they purchase is a machine that makes money.

It’s cash flow that will enable the buyer to pay you for the business, and that’s equally important if you’re selling out to employees or expecting a member of the younger generation to take over and provide an income flow for your years of retirement. It’s absolutely essential that you have a forecast of your cash flow up to the time of your projected retirement – and as far beyond as estimates can be made. If the forecast indicates that the firm’s cash flow won’t be sufficient to cover all your objectives then you may have to do one of the following:

• Set a later retirement date
• Phase out your departure from the business
• Find a purchaser with cash instead of financing a relative into the business
• Find ways to increase the value of the business so it brings a higher sale price
• Reduce your retirement lifestyle expectations

Take steps to improve your cash flow

It might prove a painful reality check, but preparing an estimate of the business’ future cash flow is an essential part of retirement planning and a reminder that your long term dreams rely on how well you manage the business’ operations to maximize it.

Information in this article is sourced from RAN ONE, Inc