Everyone is worried about the slow economy and the high prices that are driving us all nuts. Nightly news spotlights keys to help with gas and where to eat out.
Family oriented magazines are quick to tell us how to make a little extra cash. All of this is well and good, but I ran across a newsletter that made me scratch my head in wonderment, to say the least.
It suggested that this might be a good time to start a company because many are closing their doors and this would mean you would have less competition.
Advice on these types of issues is only wise if economically sound. In other words, does it adhere to economic principles? The person writing this newsletter obviously didn’t have a clue about economic competition.
In a competitive market things are going well if more businesses are opening. That means there are more sales available. If businesses are shutting down, this means a shrinking market and that it is definitely not a place to think about a startup. The basic misunderstanding is that people think that competition means you can’t get as much. Competition in all other parts of life means someone wins and someone loses. In an active competitive market there can be a lot of winners.
Startups require funding and that is nigh to impossible to come by these days with the state of the credit markets.
The other tip that I see in several places deals with real estate. We all know that the real estate market is a mess. Therefore, it is being advised if you have the money, invest since prices are lower.
The problem I fear is even more horrendous than has been talked about. I have a friend with a financed condo with a mortgage scenario so awful she may never be able to refinance, let alone keep the home she worked hard for. Not only did she buy with no money down, but she has two mortgages. One bank isn’t going to finance the total value of the property. Well, since she had the condo the value of the property has gone down $65K. Can you imagine?
She only had three more years before her mortgages change to adjustable rates. There are government programs out there to help. But the bottom line is no one can refinance when the value has gone down. That would leave her holding the bag for the difference. I can’t see property values recovering that much that fast.
I am sure as I know the sun is going to come up tomorrow that she isn’t the only one holding such a mortgage package.
This leaves the question for potential investors. You buy when the value is down. How long will it be before you can make a profit? There is no one out there with a crystal ball for the real estate market.
Keep your ears open on tips to help us get through this time. But ask yourself before jumping; does this make sense in the long run?
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For more samples of my work: www.bellbusinessreport.com
Filed under: Blogroll, Business Advice | Tags: communication, nuts and bolts
If you are still in the habit of using ‘corporateease’ when you write memos, brochures, pamphlets and other materials related to your business, it is time to get over it.
I was recently asked to write a direct marketing piece for an upcoming seminar for practicing real estate agents for their continue education requirements. I was sent the text of the brochure and came away pulling my hair and shaking my head. Phrases like “comprehensive technology strategy” were thrown around generously. Deployment and web marketing were also used.
The text seemed to all boil down to how to use the Net, specifically the Web, to get ahead in the real estate game. While we are at it, let’s make sure the rest of the office is on board. We are also going to show you how to do it cheaply. What the text tried to get across was simple, but the jargon made it difficult.
If your memos sound similar, you have a problem. There is another whole group of consumers, potential clients, etc., that don’t talk like that. It makes no common sense to rattle on with ‘corporateease’ that should have been abolished 20 years ago. Apparently, there is a group that didn’t get the memo.
Of course, another explanation could be that the loss of secretarial and assistants has thrown the efficient use of language back a decade or so. I spent many days as a secretary. The executive that could compose his own letters in anything sounding like logical English was as rare as an untapped source of oil.
If you are working in a corporate environment that rattles on like this, you can make some changes that will make the world a much better place.
It is my firm belief that one of the reasons corporate types revert back to this type of language is because the effect is confusing. I had to read this brochure more times than I want to mention to try and figure out what the actual important points were. The bottom line was the brochure really didn’t say anything specific. The wording infers that some sort of teaching will be happening. It doesn’t, however, say exactly what. So, if the seminar doesn’t go off well, the attendees really can’t complain.
The best way to describe what is lacking in this type of communication is the ‘nuts and bolts’ of the idea. I got that notion from an editor many years ago. “You don’t have enough nuts and bolts to get your idea across.” It was and still is very helpful advice.
If you are going over some written communication you are about to send out, ask yourself this one question, “Can the main point be summed up in a sentence or two?” If not, then you have some work to do.
On the cautionary side, most corporate folks and some entrepreneurs don’t like having their communications criticized. So, in order to affect any change, you are going to have move cautiously. Openly stating that a memo doesn’t say anything specific will only cause ruffled feathers. Change a few sentences into your own wording and eventually, light bulbs will flash.
You will be glad you did. Effective communication, with the right amount of nuts and bolts, makes every phase of business run smoother. Good communication saves money. A first reading that gets the point across gets the job done faster.
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Unless you have been hiding under a rock, you will know that there has been a bank failure in California. Below find the nity gritty from the Wikipedia page on the subject.
“IndyMac Federal Bank, FSB (Federal Savings Bank) is a bridge bank created to manage assets and liabilities of IndyMac Bank, FSB until they can be disposed of. IndyMac Federal Bank is the largest savings and loan in the Los Angeles area and the seventh largest mortgage originator in the United States. The failure of IndyMac Bank on July 11, 2008, was the second or third largest bank failure in United States history, and the largest failure of a regulated thrift
(A thrift is a financial institution other than a bank.)
IndyMac Bank was founded as Countrywide Mortgage Investment in 1985 by David Loeb and Angelo Mozil.”
Now that you know what the headline writers left out, this might sound like something you have heard of. Countrywide has been in the news for months because of their sloppy mortgage lending. It was only a matter of time because this house of cards came falling down.
The question is do you know your banker well enough to sleep well at night. You don’t want to find yourself in the same position as these poor folks standing outside wailing about they are scared they will not see their money. Even though they had been assured that anything up to $100 k was safe, some customers still wanted to simply “…get my money and out it where it is safe.”
There were a couple of links in one Los Angeles Times article that some other banks might find themselves in the near future because of their own mortgage lending. Take a look at your bank and research their mortgage loan business. Think this might be too much trouble? You might just be reserving yourself a seat in a line down the road when the Feds come calling.
We all know that the blame is being laid on bad mortgage lending. Consumers have to take accountability for some part of this mess. If they hadn’t gone along with the mortgages, this wouldn’t have happened. If they had known enough to pay heed to the FDIC warning about them covering only $100K, they might not have been on the losing end.
If consumers learned to follow the basic rule of all investment advice, ‘diversify their assets,’ we wouldn’t be in half the trouble that is probably coming down the pike.
Take responsibility for your investment and do your research as this not the last bank failure. And, don’t think for a minute this only happened because customers got worried and started demanding their money.
The personal financial health rests only on one set of shoulders, your own.
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We are all seeking the best price on everything these days. We are clutching those dollars so tight the images might jump off.
Retailers have become sneakier than ever in an attempt to get our dollars. A large grocery store chain recently announced it was going to offer sales like the departments stores, “eight hours only.” When the news finally got around to the story, it didn’t surprise me to see prices that didn’t make me think twice about not wasting my time shopping there.
The stores are making loud noises in hopes that you will jump just because they say so without thinking twice. One grocery chain that I shop in has a few extras that help from time to time. They have buy one get one free deals. However, only once have I found an offer that the initial price on the product hadn’t been upped. I almost grabbed a big container of ice cream one day when I saw, “get one free” sign on the most expensive ice cream. I looked a little longer and discovered that the store brand was half the price and equaled the same if you bought two. I only really needed one.
Then there is the something I started noticing more lately. If you see a good price, look at the amount you are buying. More often than not, when it comes to items where there are few choices, a lower price may mean a smaller container. I snatched a big container of ice cream at the corner store today because I didn’t want to take the time to go the few extra blocks. It occurred to me that the container just didn’t seem to be as big as it used to be. What used to be a two quart container is now just 1.5.
One could get eye stain trying to read all the fine print.
Those of us on tight budgets have an even harder time. No one is charged more than those in this demographic category. A recent episode of Judge Judy dealt with a woman who had used one of those chains that rent you furniture with the idea that you eventually buy it. It appeals to those with bad credit and low incomes. It turned out that the game console ended up costing twice as much if the consumer had been able to go out and use a credit card and buy it.
For those stuck with buying minutes on cell phones, they are getting phone coverage but paying outrageous costs compared to those who have a contract with a phone company.
There will be more lures to try and get you into stores. Don’t jump every time you see the word sale. Sales are only relevant if the price is really a good one and if you are in need of the object.
On the other hand, when it comes to your business, make sure if you offer a discount to customers, make sure that it truly is a discount. Don’t fall into the trap of everyone else out there. If you are true and honest with your business, then you will still be ahead of the rest of the crowd.
Times are going to get tougher with the rumbling in the economy. California had a bank failure last week, allegedly the second worst in history. The Dow fell so far that the news commentators were asking whether or not it was time to panic.
Keep your nose to the ground for changes. Read the fine print on every transaction you take on. Make sure you keep your mind open for more than one way to make money. Anyone who doesn’t is going to have it even tougher.
But, on a cheery note, there will be an increasing number of sales than ever before. Keep your ears open and jump on the ones that are right for you.
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Everyone is pinching pennies so tight the images are flying off. There isn’t a newspaper or magazine that isn’t discussing the mess the economy is in.
Despite the scary headlines, if you are a business owner or manager, you have to find a way to market your business despite the downturn in the markets. Marketing has to become as important to you as breathing if you wish to stay in business.
When is the last time that you updated your business card and had a new batch run? Yes, I know they cost money. Do you keep a good number with you when you are out and around doing errands, personal or business? Once you get a new order what do you do with them. Are they sitting on your desk staring at you?
I don’t care if you are one person shop or manage a team of 20, it has never been more urgent that you get the brand name of your company out in front of consumers in general.
Buying is going to slow way down in the next year. Consumers are always more apt to deal with a brand name they are familiar with.
Take an opportunity to expand your network in your general community. There are a number of ways this can be done. Yes, it takes time. But, it relatively cheaper than buying ads in local newspapers. One ad these days can cost as much as a membership in a Chamber of Commerce.
There is always Kiwanis’s and Toastmasters. Both organizations give you a chance to meet additional people that will now know you and your business.
Everyone is an expert in something. Hopefully, you have an area of expertise that is directly connected to your business. Check out your local weekly papers and see if you can convince the editor to allow you to write a weekly column. You wouldn’t get paid for the writing, but you will get great publicity. Getting published in the paper or getting a story written about you is better than any ad you can purchase.
If your business is already a Chamber member, offer to host the next networking meeting. There is, of course, the need for a budget. But it is nothing compared to an ad campaign. This way you have a group that you can immediately network with regarding your business.
If there is a good cause that needs money in your city or region, get involved in the fund raising. Once started, send out press releases to the nearby newspapers until one finally bites and writes a story about what you are up to.
Use an area of expertise to teach a continuing education class. Again, you will have a captive audience. You can interweave stories about your work experience into the class. If your students like you, they will talk about you to others.
Don’t hesitate to call customers you haven’t seen for awhile. If you don’t have a database of your regulars, then you are in more trouble than this article can help you with.
During these times, it will never be more important to remember that all business is selling. Keep that in front of your mind whenever you are out in public. You never know when an opportunity to spread the word may come up.
Market on.
For more samples of my work: www.bellbusinessreport.com
Laura Bell
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Here’s simple insight on how to cope.
Can we reasonably answer the question, just how bad is it? It’s easier than the analysts would have your think. Contrary to popular beliefs, the true definition of inflation is, “a state of constant rising prices.” You got it. We have it. It’s bad. It doesn’t require percentage comparison to last year’s quarter, it’s in our faces every time we go to the store or stop at the gas station. We know how bad it is every time we go through the checkout line. We have TROUBLE.
We are at the point that there are workers running around changing prices. Not only are prices up, but the amount in the package is less. Seeing this takes a veteran shopper. Loaves of bread in major super markets are half the size they use to be. Restaurants that used to be known for their large portions are cutting way down.
Don’t take your anger out on the distributors. Both grocery stores and gas stations have large overheads and very small profit margins. Whenever the price increases from their distributor, they have to pay more in order to have the product available. It is hurting some to the point of questioning where they stay open for business. Smaller gas station owners are closing up shop.
During most inflationary times, there is an urge to shop, shop, and shop some more. The idea is money looses its value during inflation. If you wait, it will cost you more. There is a new twist this time around. People are scared of long run consequences because of the problems with mortgages and the fear of more layoffs. No one wants long term bills they might not be able to pay. The country, as well the world, is in a big fat pickle.
The mortgage mess is just a part of it. Gas prices have been rising for quite awhile. No one has stepped in to increase the effort of alternative energy. Oh yes, we all know about alternative fuel cars. There total numbers are small compared to the whole enchilada. What most consumers are not aware of is that the price of fuel effects everything. Goods need to be shipped for distribution. When our gas goes up, other fuel products move in the same direction. Then, there is air travel. Their fuel moves up just like ours. They have been screaming lately about their need to raise rates and nick pick you with charges for the extra carry on luggage. If you are a frequent flier, don’t think for a minute that it is over.
This is a gloomy picture. We have prices going up; jobs at risk; customers squeezing every nickel they have; and thousands of homes on the market which few buyers. There is no prediction as to when things will get better.
Here are some cautionary notes that will help you cope better than the average Joe. Don’t get into a long-term contract for anything you can do without it. I don’t care how great the deal sounds on paper today. Since the future is cloudy, there is good chance home prices might go down further, wait. Don’t fall for the fancy ads for products requiring a long-term contract. I don’t care how long they promise you don’t have to pay, you will pay and probably extra since they held the note so long before they started getting payments.
If there was ever a time to have a secondary skill that will earn you dollars, it’s now. If you don’t have one, develop one. I don’t care if it is knitting scarves for friends or catering school events with your prize winning cupcakes. Find one and start filing a profits and loss statement every year with your income tax. This plan will increase cash flow during the year and increase you income tax refund.
Because times are uncertain, the stock markets are jumping all around the place. Unless you have money you can live without, now is not the time to play in the stock market.Encourage any teens in your house to find a summer job. Incentive: they will have a better back-to-school wardrobe and it wouldn’t all come out of your pocket.
Don’t make any change in lifestyle, business, or long term purchases that you can’t get out of real fast, if the economy takes a turn for the worse.
Become an overly cautionary consumer and encourage others you know to do the same.
For more samples of my work: www.bellbusinessreport.com
Laura Bell
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This should be obvious by the gas prices going through the ceiling. Has everyone forgotten that there is a simple premise controlling this, despite the politics involved? Anyone ever heard of supply and demand?
Yet, we just keep showing up to the pump so the news reporters can have someone to talk to. When it gets down to it, Americans love to complain. They also take victimhood on very easily.
Consumers bury their head in the sand until, it is time to take a breath and give an opinion. No one has bothered to tell most of them that they do have a say in matters of pricing. Stop buying so much and watch the price go down.
Yes, I understand that we all have to get to work, the store and our entertainment sites. However, it can be done differently. I know that Americans don’t like changing their transportation habits. When BART was started in the San Francisco Bay area years ago now, it took quite awhile to get the consumers to come on board.
During earlier gas problems, in the Los Angeles area, we had the Diamond lane. It didn’t go over so hot, but it is still there and now back in use. We still have ride-share Thursdays after more than a decade. The only publicity it still gets is the announcement on one local radio station. Then companies got into the van-pool idea. It went over well in the last company I worked for. Then, there is flex time. It can allow for workers doing four days with 10 hour slots. One day being left out of the drive-to-work scenario.
It’s time to take the volunteer aspect out of the picture. As, it is evident that isn’t working. These changes need to be mandatory. Corporations need to pay for workers’ bus passes if they choose that alternative method of transportation. Organizing rideshare programs should be mandatory for all companies with employees that live outside of the city limits. A certain percentage of workers need to have telecommuting assignments. Most customer service is done through telecommuting. In 2007, the Consumer Electronics Association, claim there were 3.9 million Americans telecommute.
Consumers are going to have to rethink how they do their shopping and entertaining. Shopping trips with friends and coworkers can be fun. Going to the movies in a group will save. We live in an age where time is of the essence. None of us have enough of it. Saving gas on group trips will save us all in the long run despite the extra time being consumed.
Next time you think about shopping, going out for the weekend, reach for the phone first and see what your friends or relatives have planned. If you are driving to work by yourself, approach your employer with some of these ideas and see what can be worked out.
Bus transportation is available in most cities. I understand that some of it is better than others. It isn’t easy. I take the bus. I also know that the buses are usually half empty most of the time. Challenge yourself to see what ways you can come up with to keep you away from the gap pump.
Consumers do make a difference when they shift their buying power. It’s the only thing I know that can make a dramatic change in this situation.
For samples of my work: www.bellbusinessreport.com
Laura Bell
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We have all seen the television commercials where someone is throwing off the shackles of working for someone else and launching his own. Freedom to do your own thing is the theme. And, of course, while you are it, come and buy our products.
If this is the picture you have in your head while planning to go out on your own, it is time to think again. For every choice in life, there is a price. Throwing off the shackles of working for someone else comes with a hefty price tag.
The question: are you willing to pay the price. Following are a few key areas to keep in mind.
Never start your own business because your budget is being strained by the limitations of your current paycheck. It is ok to take on a part-time gig selling others’ products during such a tight time, but don’t expect instant answers. I can remember when my husband and I were having a tough time and it was suggested we go back into Shaklee. It cost money to become a rep. It took phone calls to get sales and it took gas money to get around. We had none of these resources. But a similar situation could work if you have contacts already as potential customers.
Running your own business is a dream compared to being an employee. However, there will be times when it is going to be a nightmare. Are you prepared to deal with the times, when no matter what you do, no new clients show up at the door, while the ones you have seem to be slipping into the background. It happens.
What about tight and unexpected deadlines? How are you going to handle having to stay up all night to deliver a contract that means moving ahead? What if your spouse and children show up and demand your presence at the home front? How are you going to explain it to them? Do you have a family that will be able to deal with these issues without creating relationship issues that will further strain you? You need to answer these questions before you start.
What about questions? Remember when you had a boss or a coworker to go when a project wasn’t going exactly right? Have you been networking with self-employed professionals so you will have someone to call and ask for advice?
One doesn’t get to be sick when you are starting out. What are you going to do with a splitting headache when a project is due at the printers? Think this one out before getting started.
Business does not coming flocking in just because you open the doors and had an announcement in the newspaper. It takes some heavy duty work. There is advertising, networking and all over general marketing. From time to time, new entrepreneurs bring in clients from their previous positions. This will not keep a business going long. You will have to tackle the need for more clients and accept it as a fact of life if you want to stay in business.
And, those were just a few of the nuts and bolts that I came up with in a few minutes. Running your own business is the most difficult task you take on in life. It can also be the most rewarding.
For more samples of my work: www.bellbusinessreport.com
Laura Bell
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I have heard several small business owners whine about a workload and claim they couldn’t possibly market for new clients. This would put them under pressure that couldn’t handle.
You don’t ever want to find yourself in the position of turning down work. The only way to avoid it is to plan ahead.
Most all community colleges as well as universities offer opportunities for business students to work as interns during their course of studies.
Interns are just like any other potential employee, some are worth having and some aren’t. Look around your region and check out potential interns after your doors are open for awhile. Make some phone calls and set up appointments. Don’t take on this during a time when you are swamped. Do it beforehand.
Take the time to establish a phone relationship with several department heads and let them know your needs. That way, if your appointments don’t work out, the department head just might do some digging for you.
Take working with an intern seriously and do just as much screening as you would do with a permanent employee. And, who knows, if the semester works out and your business continues to grow, he/she just might be back as an employee.
If you are not lucky enough to live around any college, you may want to look to teens, either in your family or your colleagues. They can turn out to be great assistants. A side benefit is they can use their experience with you as a leg-up when they go out and look for their first real job.
It also helps to know others in your same profession. Belong to professional organizations, so you may have a chance to offer a work overload to someone who you are already familiar with.
New business owners frequently have short-term huge projects. It wouldn’t be wise to bring someone on full term if they just have to be let go a couple of months down the road.
Now that you have these keys, don’t be afraid of having too many projects come in. During my time running my own public relations firm, I used my teenagers and members of my writing groups. My best friend brought in interns every semester. It worked out well for all involved.
It simply takes planning and acknowledging that an overload is going to bang on your door as sure as the sun is going to rise tomorrow. Failing to plan for it could be tragic to your business. Don’t let it happen
For more samples of my work: www.bellbusinessreport.com
Laura Bell
‘
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You have to be under a rock if you haven’t read the news about our economy’s craziness. The stories overflow to every part of the newspaper. The economic slowdown seems to be on everyone’s mind. There was a whole section of the increase of food prices and how rice has become scare in the latest Business Week.
Small business owners are feeling the crunch. So the question is: who will stay afloat and who is going to close their doors.
The major issue is simple: can you convince your customers that they need rather than want your product or service. You may also have to rethink the major markets you target. I read several magazines dealing with direct marketing. I just came across a short piece saying that many are zeroing in on teenagers. Many teens have money to spend as long as times haven’t gotten so tough their allowances have disappeared.
There are certain products that consumers want, compared to need. These purchases slowdown when customers’ money gets tight. A good example is the ads all over television for new mattresses. We all know that if push comes to shove, a lumpy mattress problem can be solved by shoving a board under it. However, running an ad with a medical endorsement going on about how new mattress improves your sleep and health can put the ball back on your side of the court.
Eating out, car washes, high grade meat, vacations and a new wardrobe are all products and services that can easily become one of the things worried consumers will decide to do without for the time being. The substitution effect will take hold. Where can they get a product or service cheaper will be high on their priority list. Sales, enticements and constant marketing tools keeping you in front of your consumer is the only chance you have to keep him/her coming back during these trying times.
Keep in mind how much teens buy. They spend a ton of cash from allowances and extras they receive during divorce. Many have the ability to shop for their own clothes these days without resorting to bringing Mom or Dad along. Toss the idea around and see if you can find a way to add them to your market.
Product mix is also a key issue during recessions. If you are only selling appliances, you might consider adding refurbished models. If you decide to go that route, make a lot of noise about it with your marketing. You also might consider adding extended warranties as a part of the deal. Adding something to your product offerings is also a very legitimate reason for getting in touch with old customers to let them know about this change.
Finally, and not least. Don’t cut back on advertising. The only companies who stem the tide during slow times are the ones who continue marketing. This doesn’t mean that you can’t find a way to trim the fat out of your marketing budget. Interns and teenagers can be good substitutes for fulltime employees for marketing tasks.
Keep your eyes on the economic measurements. They are all over the media. You couldn’t miss them if you tried; and keep a sharp eye on your competition. It will pay off in the long run.
For more samples of my work: www.bellbusinessreport.com
Laura Bell
writer@well.com
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