Sonoma County: News and Notes

I am getting ready for my Webinar today titled “Sales for the Non-Sales Person”. If you have any desire to view a recording of the Webinar, just let me know! Next Month, I will be doing a Goal Setting Webinar. Details on that next week.

I went to the Santa Rosa Chamber Mixer last week at the Flamingo Hotel. It always strikes me that these events are not as productive for people as they might be. It is a great place to introduce yourself to others in the local business community. It is not a place to close business, but you never know who you might meet.

I did my usual joking around with Steve Lyman of the Chamber about how to be more successful in making new connections there. The main point of that exercise is to build the pod of people that you are chatting with in a way that you can easily bring new folks into the conversation as they walk by. It helps a great deal and you can be building credibility as you do so. Once a pod gets going, you can move on and start another. By the end of the evening you will have met as many people as you want to.

Which leads me to the second point of this post. For some folks, mixers are fun ways of getting out inexpensively and chatting with a few friends. For many of us, Networking events are a type of marketing. The challenge that I see is that few people know the basics on how to work at a Networking event. Yes, have a Glass of Wine and a Snack. But remember, if you are Network Marketing the the operative word is netWORK.

Like anything else, that means you should have a plan. Above, I gave you a way to building groups to talk to. More importantly, you need to set goals for yourself about the type of people that you want to meet and how many you want to get cards from. Remember I did say that this was work.

Most importantly, you need to have a Follow-Up Strategy. You got the card. What now? I will sometimes go to a lower value event with the idea of seeing who will follow-up with me first. Normally, not one card I have handed out nets any acknowledgement. I am a perfectly good potential client and referral partner. I have been in Santa Rosa since 1997 and I know many people in Sonoma County and elsewhere. I have over 1,200 connections on LinkedIn. You have no idea who I know. So, if you went to an event and didn’t contact the people that you got cards from then why did you go?

People will get from me at least a Thank You e-mail and a request to connect via LinkedIn. If there is somebody that I might introduce them to, I will do the introduction in 48 hours.

Over the rest of the year there are plenty of Networking Events here in Sonoma County. The Santa Rosa Chamber does 1 mixer a month. Santa Rosa Connections once per quarter. And there plenty of other groups having events and gatherings. If this is part of your plan, then now is a great time to make it work for you.

Have a great week!

Jim Sackman
Focal Point Business Coaching
http://www.jimsackman.com/
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

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Starting a New Business – Working our Way into a Financial Plan

 

The last few weeks we took a look at two ways of looking at Sales and Marketing. The primary reason to look at these elements of a business is that ALL businesses have Sales and Marketing. The details of other parts of the business are unique. The secondary element of getting to a revenue plan in place.

In either case, you should expect to have to do a bit of math at this point. The best way to create a financial plan is using a spreadsheet like Microsoft Excel. You don’t have to do it that way. You can do some basics with pen and paper or in your head. In the longer term, we want to be able to do some “What If” scenarios and it just simpler to use a spreadsheet program for that. You also want to use formulas wherever possible because of that. If you use hard numbers, it becomes a bit harder to propagate changes across the plan.

The next thing you need to think about is Time. You should expect to do at least 2 years worth of Financial Projections on a monthly basis. It often takes that amount of time to become profitable (or at least Cash Flow Positive). We need a plan to get there and so, expect to run numbers out that far! On a first pass through don’t try to get perfect. Use simple formulas to create forecasts going forward.

If we start with the revenue side, go back to the work that you did at estimating the average time between new customers to create a view to the number of customers in a month. So for example, if you think you will be able to land 10 new customers a month then you would have 10, 20, 30, 40, 50, etc. at the start of your company. You can multiply this by what you came up with with your Average Sales Price to get to a Revenue number. Over time you can look at repeat business, customer retention rates, and other things to fine tune the numbers. But you now should have the very first revenue projection for your business. Now take a step back and ask in your mind 2 questions: Do the numbers make sense? and Does this Revenue plan give me enough Money at the end of the Plan? Remember we are just at the Revenue line and you are going to be working on the Profit Line after we deduct all the expenses.

Now go back to the expense side with the same idea. How much money are you going to have to spend on Sales and Marketing? This is not just salaries and commissions. The cost for websites, business cards, banners, flyers, and advertising are among the costs that need to be considered. One simple way to get started is by estimating Marketing costs at a flat cost plus a percentage of revenues. That way costs increase as Sales increase and there is an upfront cost.

If you think about that, you can see that most of the time you will have to expend much of that money before you have customers. This is why you need this plan. That initial money has to come from somewhere. It might be your pocket. It might be an SBA Loan. But you need a plan to help tell you how much. We have just started to get to that number.

So, actions for yourself to get started:
– Expect to build at least 2 year plan in a spreadsheet
– Start with very simple formulas – we can make it more complicated later
– Know your goal to start – we need to understand how much cash is required to get started.

Have a great day!

Jim Sackman
Focal Point Business Coaching
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

 

Net Neutrality Friday

I thought this week I would post some thoughts on the one type of company that might be hurt by any implementation of “Fast Lanes”. These are small streaming video providers. For this post, I will use my model for this as Twitch TV. They provide a number of videos and streams to the Gaming Community (Video Games not Casino Games).

The thing is what people fear is that having a “Fast Lane” will become a mandatory requirement for that kind of company to deliver videos to consumers. Now Twitch does not do enough video to hit any ISPs radar screen in terms of the amount of bandwidth. But the delivery mechanism is critical to the success of Twitch TV. There is no other mechanism for Twitch to deliver content today. That might change in the future as frankly there is no reason that they could do not make a stream that could be sent to providers over their video infrastructure.

But that does raise a point. If the ISP makes the streaming delivery too expensive, would that not make a company like Twitch TV want to do a channel and sell it? There was already a Gaming Oriented channel that has devolved into something more general (G4TV). If you look at any channel lineup, it is clear that video providers are taking just about anything they can get their hands on. There are so many channels and so little good content that there is an imbalance the other way.

There is also the notion that we can freely publish our own videos on a site like Youtube and that Youtube might be impacted. Well, its possible. But I think Google has too much power to be bullied by the ISPs. If you have seen the outcry when the NFL network gets cut off, imagine losing Google or Youtube at an ISP.

I think there will eventually be a balance here, which means I think that any fears are likely overrated. You might need a “Fast Lane” for streamed 4K video, but I think that is the extent of things. Even then, I think that this will end up being problematic. My best guess is that we will end up in a stalemate. Yes, it is possible that one side or the other will win. But I think we are looking at a draw, for premium content. Next week, I want to take a look at the non-premium content provider.

Jim Sackman
Focal Point Business Coaching
http://www.jimsackman.com/
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

Sonoma County: News and Notes

 

As I head into my Webinar next week titled “Sales for the Non-Sales Person” (Click HERE to register for this event, I wanted to remind everyone that I am a Brian Tracy Certified Sales Trainer. As many of you are aware, Brian is an Author, Lecturer and Consultant Globally. I am bringing you his wisdom and mine for no cost but a bit of your time. It would seem to me to be a great way for many people to grow their revenue!

Summertime can be a doldrum in many cases. People are on vacation and many businesses slow down. This is a great time to set yourself up for a great Fall. You should take time to reach out to potential business partners that you have not been able to get to. They might have time now that things are slow. This is especially true here in Sonoma County. Companies that are in the Wine Business are going to go radio silent after Labor Day for the Crush. Speak now or hold your peace until November!

My friend Kathleen Melen has an entire series of Marketing Workshops. The next one is coming up August 19th and is titled “Marketing Systemization . . . Creating Your Marketing machine”. This LINK can be used to view the event and register. Kathleen is a great marketer and I highly recommend that you check out her event.

On a similar note, I will be doing a joint Workshop in September with my friends from N2 Publishing (Skyhawk Living and Fountaingrove Life Magazines) as well as Fuze. Check out this LINK to some very interesting technology from Fuze. As we get closer to the event, I will be able to provide a few more details about it.

The good news for me is that I am going to a Chamber Event at the Races at the Fair in August. I hope to see many of you there. I bought the tickets back at the Santa Rosa Chamber Gala earlier this year. Should be fun!

Have a great day!

Jim Sackman
Focal Point Business Coaching
http://www.jimsackman.com/
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

Planning a New Business – A Different Look at Revenue Planning

Last week we looked at the way to build a Revenue Plan for a company, and this week I want to take a different angle at this task. This came up with a Client last week as well. Timing like this is just wonderful. I was already thinking about the topic and it came up. Meant I had a great set of content handy for that meeting. Luck favors the prepared!

In this case, the Client I was talking to was a company that does Signs and Graphics Design. They were introduced to a new customer of their own. This company was started as a Sign Company and moved into Graphics Design. The customer was looking into a Graphics Design job for a Flyer. I asked my Client if he was going to just do the design or print the Flyers as well.

His response was that he offered to the Client to do the printing if they wanted. My challenge to this was to make the printing the primary offer. Then he could find a partner to do the printing, mark up the price a bit and make more money on the job. There are some forms of Signs that he does that for, so it made sense to me.

The reason I went there was three Concepts that are linked in this case: Cost of Customer Acquisition, Life Value of a Customer and Incremental Margin. In this case, the Customer Acquisition cost was fixed. The time and effort put into it was already expended. The Life Value of the Customer would go up if there were additional services that could be sold. This would create Incremental Margin Dollars in the deal (even if the Margin Percentage went down). The Graphics Design would have to go to some printer, so why not my Client’s Printer? There was essentially no more work involved and the potential for additional profit.

This leads me back to Cost of Customer Acquisition. When a Customer comes on board, you will have spent some amount of time and money to get him or her. All of that expense needs to be balanced by the profit from the purchases that a customer will make. If you add that together, this becomes the Life Value of the Customer (which can be calculated as either Revenue or Profit). To make a sustainable business, the Life Value of the Customer (in Profit) needs to exceed the Cost of Customer Acquisition.

There are several ways to improve this Formula from where you are today. Examples are:

– Focus on Ideal Clients. Ideal Clients are those most likely to buy your products and services. If you spend your time and money on them, it will lower your Cost of Customer Acquisition.
– Offer more Products and Services (aka Bundle). If you can offer more, then the average transaction value increases. If each transaction takes no additional resource, then you have increased your Life Value of a Client. This provides more Incremental Margin.
– Improve Customer Retention. By keeping existing customers happy, you will lower the Cost of Customer Acquisition. All research shows that keeping an existing customer is much cheaper than attracting a new one. On top of that, by getting repeat business you have improved the Life Value of a Client.

So when you think about building a Marketing and Sales Model as we have discussed. Keep this part in mind as well. Build your company to minimize the Cost of Customer Acquisition and maximize the Life Value of a Client. The easiest way to do this is through Customer Retention.

Jim Sackman
Focal Point Business Coaching
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

 

Net Neutrality Friday

As a follow up to last week’s news, there has been action on the Aereo front. The Copyright Office has issued an opinion that it doesn’t think Aereo is a Cable Company. Okay, that is not the Courts ruling anything yet but might confuse folks. There is a special section of copyright law assoicated with Cable Companies. All the content that gets broadcasted is copyrighted (or at least lots and lots of it are). To simplify things, there is an exception to copyright law to make it simple to not have to get consents all the time when some new broadcast happens.

The deadline for commentary on the Net Neutrality Notice of Proposed Rule Making (NPRM) is upon us. Thank goodness. The rhetoric is flying and there are some pieces coming in from some of the heavyweights in the debate. I have no idea what will happen as a final result, but many people will not be happy no matter what happens.

I wanted to add on this a bit of information about mobile and Internet Access. The IP stack that is used in Cell Phones is different than that used on a Land Line or WiFi. That is to allow the phone to move between cells and keep the same IP address. If we use a phone analogy, think of it the same way that a Cell Phone has to keep the same phone number no matter where it is located. I have a friend that has an Atlanta Area Code Cell Phone (404) but lives in Sonoma County. It is a bit more difficult with Mobile Internet because the location can change in the middle of a transaction. The way that works is that a Cell Phone actually connects to the Cell Carrier who in turn hands the Cell Phone off to the Internet. From an Internet perspective, your phone is always behind the Cell Carrier.

The reason that this is important is that you can see that it makes it more costly for Cell Companies to run Internet Data around. There are not a lot of these handoff points. That is why you generally have a lot more limits and a lot more cost for Mobile Internet than you do for Fixed Internet service. Given the growth in Mobile Data, you need to keep that in the forefront of your mind when you think about Fast Lanes or more accurately higher levels of service quality.

If video is a problem in the fixed world it is even a bigger challenge in the mobile one. I doubt I will spend any time on my cell with Netflix but I know people do. I generally use my tablet over WiFi for Netflix. I can tether my tablet to my phone, but it is a rare case where I do it. Younger people are more phone focused and my son regularly watches videos on his phone. I think its a generational thing.

One other thing to think about with mobile video. Given the small screen sizes, the amount of bandwidth required for a high definition picture is a lot smaller than on a TV. But the bandwidths are much more limited as well. The reality is that the basic science behind wireless, cable, fiber optic and twisted pair copper transmission is all the same. We are propogating electro-magnetic waves through a medium from a transmitter to a receiver. The worst transmission medium is the air (aka wireless). The best today is fiber optic. The science in this area is almost 100 years old and the technology about 50 years old. What we have been able to do is add more processing at a lower cost to improve communications. But the rules that have been written around this by Shannon and Nyquist have not changed.

Have a great weekend!

Jim Sackman
Focal Point Business Coaching
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

Sonoma County: News and Notes

 

I want to remind folks about my next Webinar, “Sales for the Non-Sales Person”. Click HERE to register for this event. This webinar won’t turn folks that are not Professional Sales folks into Master Sale people. Consider this a start to or an extension of an educational process. Attendees will get a number of useful tips and techniques. If you register for the event, I will be sending out a 20% off E-Coupon for a Sales Mentoring Program. The Coupons are transferable so you will be able to share the cost savings with someone else!

I saw an interesting chart in this week’s North Bay Business Journal. It detailed the building permits issued in 2013 in Sonoma County. The good news is that there was a significant uptick in the value of residential housing. The twist is that the vast majority of the building is in multi-dwelling units. Single Family Home permits were in the middle of the range of that from 2008. Multi-Family units are back to a rate that was typical before the Real Estate Bubble.

Non-Residential Real Estate Construction seems to be recovering even more slowly. The value of construction was about flat from 2012 to 2013. This level is about 1/2 that of the level before the bubble. Pure Commercial Real Estate is leading the growth. The laggard is Industrial Construction. The level of Industrial Construction is concerning as the cumulative value since 2008 is about the same as a bad year before 2008.

One thing to remember about the chart is that the total value of construction in 1993 was about $363M. The value in 2013 was $317M. Long term negative growth is clearly not good for the economy, but it is not clear if the chart took inflation to account. If it was not, then the 1993 building was worth $586M in 2013 dollars.

The question is what can we do about it? It is not clear that there is anything practical that will be done anytime soon. I would think the upgrades to our transportation infrastructure will add value. It is not clear to me that people want more Industrial Construction in Sonoma County. I would hope to have some expansion to help balance our economy. We won’t be the South Bay or the East Bay but we need to be more diverse than Napa.

Have a great week!

Jim Sackman
Focal Point Business Coaching
Change Your Business – Change Your Life!
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis