Mistake No.3

Wasting Money On Marketing That Doesn’t Work

I would like to clarify this mistake a little more by saying that all businesses will spend money on ineffective marketing, but it is a matter of learning from that mistake which will allow a business to grow and be successful. The best way to avoid continually spending money on marketing which doesn’t work is to test and measure, then tweaking your marketing efforts to get a better result.

Virtually everyone I speak to has spent money on marketing that doesn’t work. I’ll include myself in that because over the years I’ve spend tens of thousands of dollars on advertisements, faxes, direct mail and other marketing that has pulled little or no response. When it happens, you think yourself, “I am not going to do that again”. But then sooner or later a magazine will phone up with a last-minute offer that seems just too good to be true. If you can relate to this, you’ll like the solution. You see I eventually discovered the right way to spend my marketing budget so that it gets results rather than flushing it down the toilet. To achieve this, I have
read hundreds of books on marketing, sought out some of the best marketing experts in the world and had them coach me.

Having learnt what works and what doesn’t, I then spent nine years testing all the different strategies and then working with over 1000 other companies to share information with them too. Finally, I recently teamed up with Australian marketing expert Carolyn Phillips and between us we have put all the information into a Training programme entitled, ‘Profit Booster Kit’. Of course you don’t need to buy the profit booster Kit, but if you choose to, it will show you how to double your profits in only 49 days and gives you over 297 tried, tested and proven strategies on a plate ready to use.

- Keith Banfield

Mistake No.2

Not Allocating Any Money For Marketing

Not putting aside a budget for marketing is a grave mistake which many businesses make. Usually this is because business owners haven’t quite grasped the benefits of marketing, and somehow believes that their business will survive by shear WOM (Word of Mouth) or luck. Of course WOM is an extremely effective way of drawing attention to your business, but it wouldn’t be possible if no one even knows your business exists! Even businesses which already have existing customers need to spend on marketing in order to draw in more customers as well as keeping competition out of their way.

Think of your business like a brand new shiny car sitting out there on your driveway. Doesn’t it look great? So where would you like to go in your car? Certainly, if you want it to go forward, you’ll need to put some petrol or diesel into it. Indeed, it doesn’t matter how good your car is, unless it is moving forward you’ll never get the full value from it.

Now let’s liken that to your business. The petrol or diesel is your marketing, because without it your business will be going nowhere fast. So why is it, that so many small business owners simply do not have a budget allocated for marketing? How can they hope to drive their business without a marketing budget? The truth is that many small business owners have picked at a bit of advertising, perhaps tried sending out some glossy brochures only to find that they received little or nothing back from it, leaving them feeling despondent, annoyed at losing the money they spent and of course frustrated at not knowing how to get it right.

If you want your business to be successful, you need to allocate a marketing budget and spend it wisely. Which leads us nicely onto the next biggest mistake made by small business owners.

- Keith Banfield

Mistake No.1

Not Knowing Who Your Customers Really Are

Any marketer would know that knowing who your customers are is essential to your success in business. Besides the obvious demographic information (age, sex, geographic location), you need to know very specifically what characteristics make your customer. In another words, what interests your customers so that you know exactly what will grab their attention.

Whatever business you are running, it is essential to know who your customers are. Amazingly, one of the biggest mistakes made by small business owners is to not know who their customers specifically are. For example, if you were to ask the question, “who would you like as a customer?” Sadly, the all too common response is, “well anyone will do”.

So what do your customers look like? How old are they? What business are they in? Where are they geographically? Are they male or female? In other words, how could you specifically define who you are trying to attract as a potential customer?

- Keith Banfield

Here’s a very high level summary of how the budget is going affect you… looking at it, it will affect everybody in their own little way but nothing dramatic so that any one group is severely advantaged or disadvantaged (I think)

Below are just summary with not much details (except the bits that I think is more interesting). If you want more details please visit The Federal Budget

For the Retiring…

• Reduction of concessional contribution cap from 1 July 2009
• Temporary reduction of the Government co-contribution from 1 July 2009 to 30 June 2014
• Extension of 50% minimum pension draw down relief from 1 July 2009
• New Zealand retirement savings portability scheme
• Age pension age to increase to age 67 from 1 July 2017
• Increase in government support pension amount from 20 September 2009
• New pension supplement from 20 September 2009
• Pension Bonus Scheme closed to new entrants from 20 September 2009

For the Working Class People
The tax rates has changed slightly

Income Threshold Tax rate

• $0 – $6,000                  0%
• $6,001 – $35,000         15%
• $35,001 – $80,000       30%
• $80,001 – $180,000     38%
• $180,000+                   45%

the threshold for 30% tax rate has been increased from $34,000 to $35,000 and the 40% tax rate has been reduced to 38%.

Other Changes include:

• Changes to income tax exemption for income earned by Australians working overseas from 1 July 2009
• Private Health Insurance Rebate from 1 July 2010
• Paid Parental Leave from 1 January 2011
• Reform of family payments from 1 July 2009

For Low Income Earners
The Government will increase the Medicare levy low income threshold to $17,794 for individuals and $30,025 for individuals in families. The additional amount of threshold for
each dependent child or student will also increase to $2,757.

The Medicare levy threshold for pensioners below age pension age will also be increased to $25,299. This is to ensure that pensioners below age pension age will not have a Medicare liability where they don’t have an income tax liability.

For the First Home Owners

• 1 July 2009 – 30 September 2009:    $14,000 for established homes or $21,000 for new homes
• 1 October 2009 – 31 December 2009:   $10,500 for established homes or $14,000 for new homes
• After 1 January 2009:    $7,000 for established homes or $7,000 for new homes

For Small Businesses

• Additional small business and general business tax break from 13 December 2008
• Modified Pay As You Go (PAYG) instalments relief for small business from 1 July 2009
• Tightening access to non-commercial business losses from 1 July 2009
• Small business CGT concessions

That’s it from me, but keep an eye out for the May Success Tips Newsletter… I’ll be going into a bit more detail about the First Home Owner Grant and just the stock market in general – as I write the US Market is just about to open, the S&P500 has fallen from a high of around 929 to 884 (about 5% from the high of 929) which is the first decent correction since early March 2009

Most small business are built on the same business model and hence have the same profit drivers. when thinking about small business strategy, small businesses all have certain key similarities.

• customers
• goods/services
• cost of goods/services

Before thinking about strategies to attract more customers customers we need to understand the two main drivers which leads to a customer.

1. how many people know about your business and the good/services that you provide?
2. how many of them can you attract to become your customers?

Once a small business has acquired a customers, the obvious next step is how much money do we make from this customer. To understand this we need to understand the two drivers of revenue or gross income.

1. how much does the good/services sell for?
2. how many good/services does the customer buy?

Another way of seeing this is:

1. how much value in a basket of good/services?
2. how many times does the customer purchase in a given period?

In short, to find out how much revenue is generated per customer we need to know how much and how many.

Lastly, once a small business finds out how much revenue each customer is bringing for the business they need to understand their cost of acquiring the customer, goods/services. The driver for this is:

1. Profit Margin

Obviously the higher the better, but businesses in certain industry group or businesses that sell certain type of goods/services will tend to have different margin. auto-manufacturers have lower margins compared to online business selling ebooks.

Summary
The five key drivers to small business profits are:

1. Leads
2. Conversion
3. Revenue per Transaction
4. Number of Transactions
5. Profit Margins

To find out more about the 5 key drivers of a business and strategies to improve each areas go download your 5 Free Gifts and you will discover the following:

• Discover five effective ways for expanding your business
• How business coaching can increase your turnover and help you achieve business success
• Learn the secret to creating serious cash flow and leveraging time and money
• Master the technique of franchising and handling a growing business
• Become a successful entrepreneur with credible marketing and sales skills.

Creativity in Business is always something business owners are thinking about to get ‘ahead’ of the game or to get an edge over the competition.

I thought I’ll share a Joke to tickle some of your brain cells to get things going… Hopefully things sparks some creative ideas in your mind.

Young Jack bought a horse from a farmer for $100.00. The farmer agreed to deliver the horse the next day. The next day he drove up with no trailer and said, ‘Sorry son, but I have some bad news, the horse died.’ Jack replied, ‘ That’s OK then just give me my money back.’ The farmer said, ‘Can’t do that. I went down town and spent it already.’ Jack said, ‘Ok, then, just bring me the dead horse.’ The farmer asked, ‘What are you going to do with him? Jack said, ‘I’m going to raffle him off.’ The farmer said, ‘You can’t raffle off a dead horse!’ Jack said, ‘Sure I can. Watch me. I just won’t tell anybody he’s dead.’

A month later, the farmer met up with Jack and asked, ‘What happened with that dead horse?’ Jack said, ‘I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898.00.’ The farmer said, ‘Didn’t anyone complain?’ Jack said, ‘Just the guy who won. So I gave him his two dollars back.’ Jack eventually grew up and now works in a town near you.

Hope you had a good laugh and maybe even some creative ideas! Obviously, it’s a good idea to have integrity and honesty when you’re doing business. Creativity in business is not always about coming up with new ideas or doing something new. Creative ideas can come from doing existing things differently or presenting it in a different way.

Here’s some other Business related topics which might help with your business innovation – Business Resources