Business Coaching

For any business to be successful, you have to find your niche, that space that no other business occupies but yours. But not every niche is the same.

Some are smaller than others and some are bigger, but can any niche be a business?

From adult kickball leagues to dog-waste pickup and dart-league franchises, there are business opportunities that are extremely niche-oriented.

But, the question is, do these kinds of businesses really have a big enough niche to make money?

Some of these businesses are clearly part time, like the Dart Leagues. You can own a franchise for a one-time fee of $500 and are only obligated to spend six hours per week on the business.

There is very little risk in a venture like that, but what’s the payoff?

But if you investigate WAKA, the World Adult Kickball Association, you’ll find that the buy-in for a franchise can cost as much as $50,000 and any franchisees are required to work full-time in the kickball business.

That’s quite an investment, both in resources and time, and it remains to be seen how successful their franchising model will be, considering they’ve only been franchising since early 2011.

The fact is WAKA has been around since 1998. It is currently in 35 states with about 4000 teams participating, so, obviously, the company is doing something right.

But are the fees paid by players and teams and the sponsorship of local bars enough to make this a legitimately good franchising deal for prospective entrepreneurs?

Once you’ve invested your $50,000 or so (depending on market) how long will it take you to recoup your investment?

And what are they doing differently that any person could do, without buying into a franchise? After all, couldn’t anyone organize a league without buying a franchise?

And finally, what proprietary advantages does the company have that individual operators wouldn’t?

These niche businesses, like WAKA, have managed to generate revenue and grow by focusing on a small, “hungry” segment of population. But does that translate into real cashflow and profits?

Time will tell.

The main lesson is to really investigate your narrow niche.

Is it really enough to support sustainable growth, cashflow and profit?

Is it something people already buy and is the niche a unique segment of a larger proven segment?

A recent independent study on the value and effectiveness of business coaching conducted by the UK-based Cogent Research has provided some interesting data about the overall impact of business coaching and its effect on business.

The UK research comes on the heels of a recent U.S. study of coached companies in South Florida that showed that, despite the recession, these companies had grown revenues by more than $12 million over the last year.

That study also showed coached businesses saw a return on investment (ROI) of 7.5-to-1, or $7.50 in return for every $1 invested in coaching. Some of the more interesting numbers discovered by Cogent in the U.K. included:

•    74 percent of ActionCOACH coached businesses increased sales last year compared to only 43 percent of non-coached businesses

•    There was a 30 percent average annual sales growth in ActionCOACH coached businesses compared to only 13 percent in non-coached businesses

•    53 percent of ActionCOACH coached businesses increased profits last year compared to only 35 percent of non-coached businesses

•    77 percent of ActionCOACH coached businesses forecast growth in profit in next 12 months

•    30 percent of ActionCOACH coached businesses increased their profits in the last 12 months by more than £50,000

•    56 percent of ActionCOACH coached businesses increased their workforce compared to only 14 percent of non-coached businesses

•    91 percent of ActionCOACH coached businesses have a plan for the next quarter compared to only 37 percent in non-coached businesses

•    97 percent  of coached businesses would recommend coaching to other small and medium enterprises.

In their report, Cogent also noted that, “Businesses generally who had adopted formalised procedures such as those recommended by ActionCOACH appeared to not only have weathered the adverse trading conditions of the previous twelve months but have actually increased sales, profits and workforce.”

So what’s the key to continued business success in this difficult economic environment? There are 15,000 businesses coached every week around the world that will tell you the key is working with an ActionCOACH.

We have all heard read the reports. Our world is in an economic downturn. Many say it’s a severe recession while others use the word depression but regardless of the label, business owners are only concerned with how their numbers look.

For some, such as those in discretionary industries like apparel and travel, you are among the hardest hit.  We all know that eventually customers will purchase and profits will return but what can we do right now to preserve customers and profits?

There are two actions to take right now to ride out the tough economic times.

First, businesses must find the value in their current customer base.

In other words, business owners need to understand that the greatest asset of their business is their current customer base.

It costs upwards of six to eight times more to acquire a new customer than to sell an existing product to an existing customer, so in our current “economic winter,” it is vital to treat current customers well and find ways to add value to your current product and/or service line.

While some companies would have us believe that they are customer centered, in reality that may not be the case.  When the phones are ringing wildly with sales, customers are crowding showrooms and battling over the last item on the shelf, some owners forget that their customer’s money was earned by hours of hard work and because of that they are going to maximize the value they receive for the money they spend.

A great customer experience is the key to creating and maintaining a business relationship. As Dale Carnegie said, having a genuine interest in somebody is the first step to that person feeling valued.

Second, businesses must streamline. While it seems logical to think that having a larger range of products which appeal to the widest of range of people would be the best way to increase sales, some successful business owners to think differently.

Diversity doesn’t mean that you have a great business. It may be more profitable to sell lower volume items at higher price points and higher profit margins.

While product diversity may be important if you are a large scale retail establishment who is known for being the one place that customers can shop for just about everything, the specialty business owner may have a different focus.

In this case, selling the highest profit margin products may make more sense.  Product bundling and customer appreciation days may increase the perceived value while preserving a high profit margin.  Businesses rarely survive over the long term by focusing on low prices.

Finally, keep in mind, downturns force companies to pare marginal products and services, and focus on what they do best.

This is one of those times.

There is no denying that when the economic climate is challenging, streamlining operations is pivotal to the bottom line but remember that those customers who have believed in your business in the past are the best assets you have.

Don’t offer more, but, instead, optimize the value of our current offerings.

You can buy the cheaper office supplies but don’t discount the customer’s experience.

One of the keys to running a successful business is making it easy for customers to buy from you, which is why most businesses accept credit and debit cards.

Since many people don’t even carry cash these days, the proliferation of plastic payment has cut into revenues and profits for businesses, making it harder and harder for some smaller businesses to even accept credit or debit cards.

The amount that businesses pay in fees on purchases made with cards can cost a business thousands, if not millions of dollars, depending on the business. Credit card fees can be particularly onerous with rates of anywhere from two to more than four percent paid by merchants on every transaction. For small business owners, that can make a real difference in the bottom line.

But the issues with debit card payments can be even bigger with many small businesses.

Today debit cards are the number one form of non-cash payment in the United States and from 2006 through 2009, debit card transactions rose from 25 to 38 billion. In 2009 those transactions accounted for $16 billion in transaction fees that went to the issuing banks.

Obviously businesses are losing a ton of revenue and profits in these transactions, but many businesses don’t have any other option. They have to make it easy for customers to buy from them in an increasingly cash-free world.

Legislation will be taking affect on October 1st that will lower the rates that businesses pay on debit and credit card purchases, but will those changes be enough to help small businesses grow?

Right now, businesses pay an average of 44 cents for each debit card payment they accept. On October 1st that amount will go down considerably, to just 21 cents per transaction thanks to new legislation.

But while that drop may seem like a lot, it’s actually a compromise.

Originally the Federal Reserve was going to knock down these fees to an average of about 12 cents per transaction, but the banks that issue debit cards cried foul so the Fed decided to come up with a compromise cost: 21 cents per debit card transaction.

For small business owners, it’s still a large fee and it’s important to remember that while 21 cents is the average charge, many debit card transactions are small, everyday purchases.

The problem this leads to is two-fold.

Businesses have to pass the cost of these charges to their customers, even customers that buy with cash. And because everything is more expensive, the costs weigh on the entire business, making it less likely that small businesses can hire workers or reinvest in themselves.

The irony is that in this particular case big business joined with small business to lobby against the banks keeping rates high.

The large lesson we can learn is to make sure you know all of your numbers and have systems in place to ensure the rates you have to pay are more than covered by your company’s growth.

Is the metric of sales per square foot really the “magic” that so many retailers make it out to be?

For big businesses, the metric of sales per square foot is a great way to understand how different shops perform. If the Best Buy in Las Vegas isn’t performing at the same level as a Best Buy in Phoenix, sales per square foot is a fantastic tool to begin to understand why.

If we take a look at some numbers, we can see that some well-known retail giants do very well per square foot. For instance, Apple does a great job of utilizing every inch of their retail stores. They record incredible sales of nearly $6000 per square feet while other high end retailers can’t even approach those numbers. Such big names lag behind, including Tiffany’s, whose sales per square foot metric is just over $3000, Coach is at a very patriotic $1776 per square feet and even Best Buy is at just $880 per square feet.

But there is another metric you can use to measure your sales, average sales per customer.

Among those four companies, Apple clearly does the best job in generating repeat business and accentuating their average sale per customer thanks to those repeat purchases.

In other words, they increase their average sale per customer and that, in turn, boosts their sales per square foot.

This is even more important for small and medium sized businesses that have just one or maybe a handful of stores.

Of course small business owners want to know what works and what doesn’t in the layout and approach of their store, but by figuring out the average dollar sale is for each and every customer, you can begin to figure out how much profit you make on each of them and, taking it a step further, you can build marketing and advertising campaigns that are profitable both in the short and long term.

Mark Twain once said, “There are lies, damn lies and statistics,” and most business owners know there is still some truth to that phrase.

If you take your numbers out of context, then yes, sales per square feet can become the important metric for retailers. But there are better ways to figure out the strength of your sales numbers and putting more value into average sale per customer is a great way to start.

Owners of small or medium sized businesses are often on an island, with no one to turn to when they need some help. The ones that most easily navigate those troubled waters are business owners who have learned what’s important and what isn’t when running a business and more often than not, they learn this information by working with some type of mentor.

Many people can take on the role of a mentor. A mentor can be a good friend who is willing to tell you the truth, not what you want to hear. A mentor can be another business owner who has faced those challenges in the past or even be a Business Coach who is, by definition an unreasonable friend who will always have your business’ best interests at heart.

So no matter who your mentor is, whether they’re just a friend, a family member of even a Business Coach, here are five things they should be able to do for you.

A mentor should hold you accountable:

Business owners may neglect the management and marketing of their business by postponing certain tasks and putting the non-essential ahead of the essential. This is a great way to doom a business.

When you work with a mentor, failing to complete your goals and having your business lapse is simply unacceptable. Your mentor won’t tell you what you want to hear, but what you need to hear to get your business moving in the right direction and keep you accountable for everything that happens in regard to your business.

A mentor will help you refine your ideas into practice:

You may have great ideas, but how will you see them through to implementation? There may be some ideas you can put into practice easily, but others will be raw and need to be refined before you implement them.

Working with a mentor, gives you access to their vast knowledge and wealth of experience. That alone will help you make the changes you need to make in an easier fashion.

A mentor will have a wealth of ideas to grow your business:

Your mentor has seen it and been there before. Through your relationship with your mentor, you will learn and understand principles of business you may not have known before.

Most importantly, you can use the lessons learned from your mentor and can apply them for the rest of your business life.

Mentors have the contacts you need:

Ideally, you should choose a mentor who has been in business and not only knows the basics of running one, but also has a good reputation with the community at large. In this way, you can use your mentor as a networking tool to grow your business.

Your mentor has contacts and knows where to find the information that can help you and your business. They are a valuable resource, so use them as much as possible.

A mentor is someone outside of your business, looking in:

You may be caught up in the day to day of your business, but the right mentor or even Business Coach takes a fresh look at you and your business.

A mentor or coach knows what to look for when it comes to the issues plaguing your business because they can see what your customers see. With this knowledge and vision, your mentor will always give you feedback that will help you build the strongest business possible.

So who are you working with to grow your business? Do you have a mentor or coach that is helping you along the path to success? If you don’t, what are you waiting for?

Every business, whether big or small, needs a social media presence but you have to remember that, while you want to keep it interesting, you don’t want to offend anybody and there can be a fine line.

You don’t want to have a social media presence that is all drunken pictures and stripper poles, but at the same time you also don’t want to bore potential and existing customers to death.

Neither of these will help your business, so how do you walk the line to give customers something interesting, while remaining professional?

You want to keep your customers coming back,  so you should have a social media presence that is professional, engaging and solidifies the message you want to spread about your business.

Keep in mind that, as opposed to some other forms of marketing, social media isn’t a one-time thing.

You want your customers to follow you, watch what you do and give you feedback through platforms like Twitter and Facebook. Ideally your customers are an active part of your social media presence and the only way to create that is to keep your presence interesting and relevant.

The personal touch is often enough to build your presence because if people think they are talking to an actual person on the other end of the social media line, they are more inclined to keep the conversation going, just remember to not make it too personal. In other words, engage but always be professional and remember your company’s Facebook page isn’t the same as your personal page.

When building a professional presence, the person engaging customers has to be someone that customers like and want to interact with. One of the best ways to do this is by showing the team having fun at work.

You might post pictures of your team having fun, interesting things that happen during the workday or anything interactive and interesting that customers and leads might want to know about.

Also remember that today people use applications, better known as apps, to navigate the web so the days of internet browsing are long in the past, another reason to keep your online presence fun and vibrant.

Just remember to keep the pictures of your late night at the bars exclusively for your personal social media accounts.

Are we headed for a lost decade in the United States? In the 1990s Japan experienced a massive recession which led to their “Lost Decade” a time in which Japanese economic expansion came to an almost complete halt.

Now, as the United States experiences economic growing pains, we are faced with the possibility that it could happen in this country.

But, while we’ve been mired in a painfully slow recovery from a major recession, some statistics show things are getting incrementally better, if you know where to look for them.

One area that is a positive is the change in the number of small-business bankruptcy filings from the fourth quarter of 2009 to the fourth quarter of 2010. According to Equifax, over that time, bankruptcies dropped by 18 percent from the fourth quarter of 2008 through the fourth quarter of 2009, which was the height of the recession.

Of course, when we take these numbers in a vacuum, they don’t tell us much but if we look at them in the context of the economy we can see some interesting things. First, weak businesses that weren’t prepared for the economic winter are no longer around and, secondly, the small businesses that remain are doing a better job of leveraging their resources so they should be stronger in the long run.

Let’s focus specifically on the first point: Businesses that weren’t strong enough have collapsed and their owners have filed for bankruptcy.

Sure, some well-run small businesses met their respective ends as well, but an economic recession brings problems and challenges to the surface so they can’t be ignored like they can during strong economic times.

Poorly run businesses are most likely to suffer in this scenario because they don’t have the resources or managerial talent to withstand it. Companies that have strong plans and talented leadership in place are not as vulnerable to those extreme economic circumstances.

Quite simply, economic downturns mean real trouble for poorly run businesses, but it also offers terrific opportunities for well run businesses. A well run business has the ability to change on the fly and adapt to difficult times. And, maybe most importantly, a well-run business is in position to reap the benefits of the struggles our economy has experienced.

A recession weeds out poorly run businesses, but even poorly run businesses have their share of customers, who need to buy from someone. If you’ve been competing with one of those businesses, you have a new group of customers you may be able to bring to your business.

If strong businesses can take advantage of this scenario to grow, we may be able to avoid our own “Lost Decade” but only time will tell.

Have you ever answered a question with a question? That habit can be awfully annoying in your personal life, but in the world of business, it’s a great way you build your conversion rate.

If you can get a conversation rolling with any of your customers, you’ll learn more about them and the way your business is perceived than you can imagine.

Would that make a difference to your conversion rate? The answer is most definitely yes.

Asking questions increases your conversion rate by building rapport with your customer and ensures that the sale becomes their idea and not yours.

If it were easy, everyone would do it, but too many businesses fail to ask simple questions because it means their team has to be skilled at active listening.

You can ask questions about your customers’ work, business, kids or hobbies, as long as you’re listening with sincere interest.

It can even be helpful to write down some of the answers so you can remember important information for future communication.

People will buy from you once if they like you, but they won’t come back unless they trust you and your business.

You build that trust by developing relationships over time, by asking questions and listening. By having these conversations, you find out what your customer’s needs are, giving you the ability to fill those needs more easily.

Most importantly for any business, you can generate a legion of “Raving Fans” this way. By building rapport and attaching importance to each conversation, the relationship grows naturally, until buying from you is a natural thing.
This isn’t easy for everyone.

Have you ever found yourself talking too much or saying things you shouldn’t?

If you have, you know that once you find yourself doing all the talking you are no longer in control. The person asking questions sets the direction for the conversation and you want to direct your customers to buy, and by asking questions you remain in control of the conversation.

If the customer is dominating the conversation by asking you questions make sure you answer the question with a question, but vary the questions that you ask, don’t simply respond with “why?”

Take the time to engage the customer and start to ask relevant questions that will lead them toward a purchase.

Questions can guide consumer interest, discover a need and give accurate information. In doing so, asking questions will also help you build rapport and referrals through the “Raving Fans” you develop.

If you haven’t started answering questions with questions, begin to develop those scripts today and see how it can help your business grow.

As much as the world changes, it stays the same. The recent purchase of Skype by Microsoft for more than $8 billion is an extreme example of this because, for all the talk about the brand of Skype itself, what Microsoft was really buying was Skype’s massive customer list.

In 2010, Skype had 170 million connected users who logged over 207 billion minutes of voice and video conversations.

There is massive opportunity for growth with Skype, but the company has been around since 2003 and hasn’t exactly been a big earner.

The company reported a $6.9 million net loss last year, on nearly $860 million in revenue. It reported $686 million in long-term debt, and slightly more than $1 billion in liabilities.

In the purchase, Microsoft assumed Skype’s debts and liabilities in what was, to this date, the largest acquisition Microsoft has ever made.

This isn’t the first time Skype has been bought. In 2005, Skype was bought by Ebay for $2.6 billion but the partnership did not work out and eBay sold its 65% share in Skype for $1.9 billion in 2009.

Microsoft plans to integrate the service into X-Box Live and the Windows Phone but there’s little doubt they already possess the technology to do this without buying Skype.

So why buy Skype?

For all those customers who are already proficient with the service and are naturally ready to buy other Microsoft products.

As Microsoft continues to lose market share (their stock price has dropped nine percent over the last year) the company needs to find new ways to compete.

Adding Skype’s customer list gives Microsoft access to customers that are relatively early adopters of technology, who’ll want to buy the latest, hottest thing, but might not have thought of Microsoft products in the past.

This deal is just another sign that as much as technology changes, the basics of business, like buying a customer list, stay the same.