Small Business Tips - Get control of your finances

Managing your cash flow and controlling expenses

No matter how good your product or service might be - if you can't manage the financial side of your business, then you won't prosper ..... And chances are, you won't even survive.

This is the brutal reality of running your own business .... At the end of the day, if you don't have enough money in the bank to pay your bills, then it won't be long before you're forced out of the game. By all means, you have to be part visionary to start up a business - but you've still got to be aware of the numbers and do your sums as well.

So for this article, I went in search of someone who could offer us some good practical tips on how to control your finances and cash flow when you're running a small business. And I'm pleased to say that I found someone suitably qualified ....

Cherry Birch has over 25 years experience working and consulting in the financial services industry across Australia, the U.K and Malaysia. She is a Chartered Accountant who delivers tailored financial training to medium size and larger corporate sized organisations – but has a special interest in supporting small business owners gain greater control over their finances. Cherry is the founder of Financial Training Australia.

She is passionate about providing business owners and their key staff with improved financial literacy – so they can make better decisions that lead to more profitable business outcomes. I recently posed Cherry some questions about her own experience in starting up her business - and asked for some tips on financial management that would help small business owners......

1. What originally motivated you to start your own business – and what keeps you motivated now?

Well like many others I was made redundant from a large consultancy when their business was going through a down cycle and they wanted to transfer me from a fixed cost to a variable one! It was not exactly well thought through because my role was made redundant 3 weeks after it had been created. I have so much admiration for those who start their own business when they are currently employed. I think it is so much easier when you effectively have nothing to lose. I did contemplate applying for other senior consulting roles but I had been thinking of my own business for some years and so this was the impetus to go for it!

One thing that I love about running my own business is being able to be true to your own values. This has meant that I have turned down work when I felt it would have meant compromising my values. Also I have been able to develop some great relationships with my clients  - I truly enjoy working with them – and I enjoy the freedom of being able to run my business my way.

I recall once being criticised by one senior manager for apparently not being good at “closing sales” – he thought I should have been adopting a “hard sell” approach to get business. However I’m convinced that my commitment to a more relationship-based sales approach has been one of the keys to my being in business for more than 11 years!

2. Over the past 10+ years, you’ve consulted with many hundreds of business owners advising them on how to improve their financial management and control systems … What have you found to be the most common mistakes small business owners make with their finances?

Most of my clients are medium to large sized businesses so I may not be so qualified to answer this question, but then it begs the question as to whether small business put enough value in training their staff. We used to use the phrase - “If you think training is expensive, try calculating the cost of ignorance!”

I know there is the question of viability of training with the smaller numbers of staff in a small business, but there are still ways to make it cost effective.

I think generally small business often makes the mistake of being reluctant to invest in their people. Also I think it is so important to have adequately qualified accounting and bookkeeping staff, so you can rely on the reports that are produced. Additionally, small business owners must ensure they understand and check these financial reports – whether it be the monthly profit and loss statement or next quarters cash flow projections.

Business owners need to realise that their finance person might be great at producing various reports but they still have to be able to interpret the report and identify if there are any finance issues needing to be addressed . So unless the owners understand these financial reports, they are missing out on a vital control.

3. Cash flow can be a bane for small business – any quick tips on how to manage this?

Businesses simply run out of cash and yet many managers and business owners are often too busy to give this important aspect of their business enough attention.  The two primary areas in which most businesses tie up cash are receivables (the money owed to you by your customers) and inventories (stock)

Whilst you need both to run a successful business, money tied up in these areas can be “dead” money, since it is not working for you, and so can seriously affect your growth, profitability and even survival prospects.

Recognising the importance of cash to run your business, and having healthy practices in place so you can positively manage it, will assist your business to thrive. Managing cash flow becomes even more critical during difficult economic times. 

In my consulting with the Birch Consulting Group, we have developed ten essential questions about cash management practices, that can assist business owners to identify whether they are maximising the cash in their bank account.

Get paid promptly

i)            Do you have an objective for the management of receivables?

Calculate your receivable days (how quickly your clients actually pay you) and compare this to your  payment terms and conditions? ….. If your receivable days (time it takes to receive money owed to you) comes to 90 days and yet your terms are say 30 days – you will  most likely encounter cash flow problems!

ii)           Do you invoice promptly?

Invoice for monies owed in a timely manner. The quicker you invoice the earlier you are  likely to be paid.  This is even more vital if you run a service business; issue the invoice   promptly while the work is clear in their mind, otherwise the longer the delay in issuing the invoice, the more queries you may receive.

iii)          Do you ensure that disputed items on invoices are cleared promptly?

How many times have your customers used a query on a small part of the invoice as an excuse to delay payment on the whole amount?  Ask them if they are in agreement with the rest of the invoice and get them to pay the non disputed amount while you investigate their query.  Then clearly establish the disputed issue and work towards resolution so that you can receive the balance of the monies due.

iv)         When did you last review your credit terms?

Credit terms are not necessarily set in stone and can be changed – so providing you consider any potential effect on sales, shorten them but ensure you inform your  customers.  Often small business is at the mercy of big business, or competitors, in terms of their payment terms. However many of your key customers will have a specific date by which they need to receive your invoice in order to get it processed for  payment in that month. Miss that date and you could wait another 30 days to get your money.

v)           What follow up of outstanding invoices do you undertake?

If you do not chase, some clients will take advantage.  Good customer relationships can play a big part in influencing client payment practices, but for the slow payers you just need to be persistent.  If your client has cash flow problems they will often pay the noisiest first.

Manage stock levels

        vi)         Have you recently reviewed your management of Inventory?

How many days stock do you need to hold?  What are your current inventory levels of raw materials, work in progress and finished goods and do you closely monitor their levels in relation to your sales? Ensure you consider how quickly you can get stock to fulfil an order if the stock isn’t on hand.

vii)        Do you have a clear strategy?

Are you holding one of everything or do you have a limited number of fast moving lines? …… If you are a FMCG company (Fast Moving Consumer Goods), remind yourself of what the “F” is supposed to stand for! 

viii)       Is there wasted space in your warehouse or office?

Could you realistically move to a warehouse or an office, half  the size of your present one?  It would save you an enormous amount of money and whilst it would be hard at first, and may incur initial moving costs, the long term benefits may save your business.  You and your staff can learn to adapt and manage, if forced to do so.

ix)         Are you guilty of keeping JIC inventories – rather than JIT?

Most of you will have heard of “Just in Time” – where you do not hold inventory but get your suppliers to deliver it JIT straight onto the production line.  This requires an efficient production process and reliable suppliers (remember they want your business as much as you want your clients to remain loyal). However what about all those stocks that you are holding JIC – “Just In Case”? Challenge yourself as to the real probability of them being required, harden yourself and get rid of them – they are taking up costly space.

x)           Are you holding any obsolete inventories?

Again, if they are obsolete, grit your teeth and cut your losses, clear them out and free up the space. Conduct a regular review of your stock holdings and be realistic as to what you do need to satisfy your profit generating clients.


           4.   Cherry, you’ve seen many new small businesses fail within the first two years of start-up – and yet others succeed....... In addition to the financial management mistakes that you mentioned earlier, what other factors have you found contribute to the success or failure of a business in getting through the challenging start-up phase?

Get good advice. Ask other small successful business owners to recommend professionals and providers to help you. Very few people are unwilling to help and make recommendations. Realise although it may feel like you are alone, but you do not need to be.

Seek networking opportunities and plan to catch up with others on a regular basis to have an outlet to discuss your business problems. It can be lonely and you have some good weeks and some bad ones – good to have others to talk to who understand since they have been there before.

I remember when I first started attending consultant networking meetings, speaking to another consultant who had been running her own business for 16 years. She told me it took her 5 years to stop being paranoid about where the next job was coming from!! ….. That made me feel so much better to realise I was not the only one that suffered from that type of uncertainty! I think I was like that for the first 2 years of my business. However, having survived that tenuous “start-up” stage, for the past 9 years I have been more anxious about how my business was going to cope with the demand that we generate!!

5.   What should a small business owner consider when selecting an accountant for their business?

Brian I am cautious about giving advice on this, since I no longer practice as an accountant, but here goes:

• Be clear on what you want  - do you want someone to just do your books for tax purposes – for compliance - or do you want an accountant who is going to give you tips and advice?
• Again ask for recommendations from others
• Meet with a few to see if they speak a language you can understand!

I engaged my own tax accountant once I started my own business since whilst I am a qualified chartered accountant I am not a tax expert and besides I am not an expert on Australian tax.

6.   Last question Cherry ..... What about small business owners who are looking to grow their business – any advice? There have been many instances of SME’s expanding and growing too quickly and subsequently over-committing themselves to bankruptcy – so how do you avoid this problem?

I think this goes back to the question re cash flow.

Put together a business plan to ensure you have thought through the extra cash resources you need for expansion. Also challenge yourself to ensure you are not being over optimistic ...

Go through the worst case scenario, assess the likelihood of this and check that you could indeed handle it, if it has more than a 10% chance of occurring.

Cash flow is the hardest thing to predict, so do some cash flow budgeting for a few months and then compare it with the actuals to see how good you are at predicting cash flows. Hopefully this will give you confidence in going forward.

Do your growth plans really have to be done all at once – or can they be implemented more gradually so as to reduce risk.

I designed a training course on How to Write a Compelling Business Case this year – it has been very popular. Whether you are a manager in a large corporate or you are running your own small business, you need to think carefully before committing any significant expenditure to an expansion initiative. A cost-benefit analysis can ensure that your passions and ambitions are harnessed in a measured way. Success in business comes from equal contributions from the heart and the head.

There is no escape from the need for good management and disciplined planning …. This is the key - that you develop sound systems and procedures as part of working on the business – so that over time, you will not have to work so much in your business.

Thank you very much Cherry - you've shared some great tips. Particularly in relation to preventing cash flow problems - which goes to the heart of the viability of a business. I've seen too many small business owners over the years become highly stressed and pressured, because of problems created in this area. And those pressures can so easily then start infiltrating into other parts of life - impacting on family relationships and becoming a source of tension and conflict. So I'm hoping our readers consider your advice and perhaps evaluate some of the financial practices and processes within their business. Bye for now.

About the interviewer
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

Mental toughness and running a small business

What is mental toughness, you may well ask?

It's one of those qualities many of us are able to readily recognise in our sporting heroes - whether it's tennis, football, soccer, basketball or athletics. They embody the ability to hang in there and persevere, even though they're being out-scored or out-pointed by their competition.

We admire them for their tenacity to keep on fighting, despite "the odds" being against them. They have that mental toughness to avoid letting any thoughts of defeat or despair take hold. They steadfastly refuse to allow any fear of failure to paralyse them and prevent them from whole-heartedly continuing to compete.

They continue to push themselves to the limits of their capabilities - consistently striving to find ways of improving their performance.


Business and sport share much in common
                                                                            
Running a small business and playing competitive sport both require you to be aware of your competitors. Your success will be measured not just by the quality of your own decisions and actions - but also by how these compare to those of your competitors.

You enter the game with a goal and a particular strategy in mind .... But circumstances can change, the playing conditions can turn out to be quite different to what you'd anticipated - and so you you've got to be able to adapt.

In sport, we've seen numerous instances where the player with more heart beats the player with more "natural ability". In business, we've seen the same dynamic where the entrepreneur with greater "grit" achieves more success than the one with more so-called "intelligence"

Sometimes, you'll make mistakes ....... You make the wrong decision - or your execution on part of the plan was flawed. ....... Yep, even the best players will sometimes get it wrong - and so too have business people like Steve Jobs and Walt Disney and Richard Branson

But the one's with mental toughness bounce back. They learn from their mistakes - and then start moving forward again.. 

And when you're running a small business, like when you're competing in sport, you've got to be able to "read the game" and be willing to change your game-plan when it proves necessary ....... You've got to be able to admit when something's not working - which takes some humility - before you can begin to turn things around  ........Not everyone can do this. By the way, you might be interested in some tips on related topics like Self-Motivation and also Focus

So, what are some keys that can help you to develop your mental toughness? Here are seven ....

1. Decide what you need to focus your attention upon - clarify your goal or your priority. Avoid letting distractions get in the way and diverting your attention from what is important
2. Expect there will likely be some set-backs along the way - but view these as temporary. Remain optimistic that you can turn things around by learning, growing and improving. When problems arise, focus on finding a solution rather than becoming immersed in the effects of the problem 
3. Identify in difficult situations what is within your control - and what is beyond your control. Don't waste time and effort worrying about those things outside of your control
4. To be successful in business, like sport, you need to be well trained. And then learn to trust your training, trust your process, when the pressure is on. So ensure that you've invested time and effort in regular and consistent training that develops your business skills over time - and which in turn will help to foster your self-belief
5. Motivation can sometimes wane - but developing good business routines, systems and self-disciplines leads to consistency of performance. Mental toughness is developed by consistently doing the things that you know you should do
6. Avoid allowing your mind to dwell on mistakes - by all means you've got to learn from them - but then it's about drawing a line in the sand and moving forward
7. Remind yourself of some of your achievements, so as renew your faith in the strengths and capabilities that you posses, that will enable you to get through any difficult times

Here's a short video clip that offers tips for athletes on how to develop mental toughness - offering some good insight into how your mind can be either a friend or a foe and affect your performance.... . I think ALL of the tips are equally relevant if you are running a small business  See what you think ....

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About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

A young entrepreneur having a Monsta impact in the surf-wear business

Building a good business can be the pathway to fulfillment and freedom

One of the things that I really enjoy about this blog, is that I get the chance to connect with all different types of people who share my interest in learning how to more effectively run and grow a successful small business. People that come from different backgrounds - with businesses from a range of different industries, based not just here in Australia, but all around the world.

And so many of these business owners have stories about achieving success that can inspire us in our own journey - as well as lessons and tips they freely share which serve to inform and educate. Well, keep on reading folks, 'cause you're going to hear about a young man who offers you plenty of both!

Although business should not dominate our entire life - boy it plays such an integral role in determining our overall sense of well-being, don't you think? .…. We need to find a way to get the business part right and also gain satisfaction from what we are doing. Building a good business provides us with financial security - which in turn offers us freedom to choose the lifestyle that we want. When it all comes together,  then life becomes a whole lot more enjoyable.

And much more stress-free when we’re not worrying about whether we can pay the bills!

Yes, you're in business to make money - but what else?

There's nothing wrong with being in business to make money. To stay in business of course you need to be making more money that what you're spending…... But running your own business doesn’t have to be just about profits and making money - it can meet other needs as well. 

How you run and approach your business is a reflection of who you are – it reflects your values and your priorities, and mirrors what you stand for in your life.

And on this theme of values, this post features an interview with a remarkable young entrepreneur making his mark in the billion dollar surf-wear industry.

His name is Cameron Greenwood, and his motivation in business is to have a positive influence on the world and to inspire young people to follow their passion and dreams. And quite frankly, my gut tells me that within the next few years you’ll be hearing a lot more about this 22 year-old young man and his small business based in Melbourne, Australia, called Monsta Surf.

Cam Greenwood - founder of Monsta Surf

He is building an enormous following in social media (approaching 30,000 Facebook followers), and in the space of just a couple of years is experiencing a solid, consistent rate of growth in sales around the globe for his range of surf-wear, surf-boards and accessories. Here’s what he had to say about his experience so far ….

• Cam, what was your motivation in starting your business – and what keeps you motivated now?

I had always been really interested in surfboard design and in 2012 I started making surfboards in a small storeroom in my backyard. In March 2012, I wanted to label my surfboards and thought of the name Monsta. My partner drew up the first Monsta logo and that’s how Monsta was born. On 7 June 2012 I created the Monsta Surfboards Facebook page. In the first year I was selling surfboards to my friends and through Facebook as well as starting to sell hats, hoodies and singlets.

I think I always had a dream to run a surf company but I didn’t really plan to grow Monsta to what it has become. It grew very quickly and I just went with it. In the first year Monsta had grown to 1000 likes on Facebook and it was then that I realized I had an opportunity to build Monsta into a business selling surfboards and clothing. A year later we had more than 15,000 followers

I saw that I had already created a solid following on Facebook and from this, was receiving a lot of interest in the brand and clothing. I believed I had the opportunity to grow Monsta into a successful business and I believed that it was feasible based on the interest around Melbourne and through leveraging the rapidly growing Facebook following. We  now have 25,000 active Facebook followers, with 30,000 projected by early next year.

I was driven by my passion to pursue my dream to create a surf brand that inspires people and was also influenced by the support from my close friends. After being part of a mission trip to the Huruma Children’s Home in Kenya in 2012, I set a goal to provide financial help with the education of these Kenyan children and wanted to achieve this through having my own business. A component of the annual profit of the business is now allocated to the Huruma Children’s Home through the Monsta Foundation.

Today, I am motivated by my passion to use Monsta as a platform to positively influence the world. I would love to bring cultural reform to the surf scene.

• You were studying business and commerce at university ....... How does that compare to what you’ve actually learned running your own small business?

Everything I have learnt through my commerce degree has been very helpful for the business but the lessons and skills I have learned from actually stepping out and running my own business have been priceless. All of the projects I have undertaken for Monsta have taught me new skills, given me new experiences, developed new capabilities, grown my resources and networks, and has constantly challenged myself and the brand to grow.

I have currently deferred my course to focus on Monsta this semester - but I do plan to go back and study part time next year to finish my degree.

• How have you approached marketing your business? ........ You have amassed quite a significant following on Facebook in a relatively short time, what is your approach to leveraging social media in your marketing?

The way that I approach social media is quite different to most brands. I build personal relationships with Monsta’s ‘tribe’ of followers who take ownership of the brand and spread the word. Most brands use social media with selling being their inherent interest. Basically I use our social media outlets as a platform to share a unique view of the world.

Over time, I have learned to focus on what makes a great, provocative and engaging image while aligning images with the interests of our target customer. I’m very proud of the strong presence Monsta has on social media and we really do have a ‘tribe’ like following with advocates from all around the world.

• What advice would you offer to young entrepreneurs?

I’m passionate about doing what you love and having a red hot crack. I think it’s great for young people to follow their dreams and to not settle for a lifestyle that does not fulfil them. There will always be many challenges and there is lots of things that I wish someone had told me before I launched Monsta. So here are ten tips for the young entrepreneur who is about to enter the battle field:

-     Do what you love: Don’t start a business simply because it seems like a great business idea, do it because you aren’t passionate about it and its what you love. Business built around your passions and strengths will have a greater chance of succeeding. Yes, creating a profitable business is very important, but its just as important that your work is fulfilling. Think about it, you spend most of your life working, so you may as well love what you do!

-     Lead with character: Do what is right because it’s the right thing to do, regardless of the cost to you or your business.

-     Focus on your niche: One of the most important factors in building a successful business is the ability to stand out from the many competitors in your field. One of the best ways to do this is by focusing and catering to a specific niche. Being more specific will help you stand out as well as attracting and marketing to the right audience which will save a heap of time and money. Juggling multiple projects or ideas will limit your productivity and effectiveness. When starting out, do one thing perfectly, not lots of different things poorly.

-     Take calculated risks: The best part of being a young entrepreneur is that you are young and aren’t responsible for much. This is the time to take risks, but make sure you have done your homework before you spend last years wage on your new venture. If you don’t calculate, your business will eventually fail. Projections, strategy options and plans must be in place to avoid making a wild decision.

-     Know your limits: No one can do everything, so don’t try to be a one man show. Surround yourself with mentors and advisors who will help you become a better leader and business person.

-     Stay lean: Scale down pricey plans and large expenditures when starting out. It is very tough to borrow money and it is quite stressful having a big liability so if you need large sums of money to launch your venture, go back to the drawing board. Simplify your business ideas to start small and then refine your concepts as you go.

-     Take advantage of social media: Social media is one of the most useful tools for advertising your venture. Not only can you build up online relationships with your customers but it is also very cost effective and a measurable way of advertising.

-     Keep innovating: even if you think your business or product is perfect, there will always be room to improve. Once your product is out there, you must continue to improve, expand and develop what you’ve created. This is how you remain competitive.



-     Treat people with respect: Success is defined by who you are and how you treat the people around you ...... In particular I think, how you treat the people that you don't need anything from and the compassion that you show, when no-one's watching. For me, that speaks louder than the car you drive or the clothes you wear or the balance of your bank account.

-     Stay healthy: As lame as it sounds, you will be much more productive if you take good care of yourself. Entrepreneurship and start ups are not a 9-5 job, they are a lifestyle and once you become passionate about your venture it will be with you until all hours of the night. I remember having nights where I would be working on a new idea until the sun came up but trust me, you will burn out and make yourself less productive in the long run. Eat right, exercise and prioritise your time for your loved ones and yourself.

Finally, what are your future aspirations for the business?

I believe that God has blessed me with Monsta in order to use it as a platform to positively influence the world. I have lots of dreams and ideas tucked away and I am hoping that one day our foundation can raise enough money to take the kids of the Huruma Childrens Home surfing down the coast of Kenya!

Ultimately, I want the brand’s legacy to be reflected in the lives it influences and I am super excited to see what the future holds.

Thank you to Cam Greenwood …… I’m confident that this young purposeful man will achieve his goals – and that his story will be an inspiration to other young people who want to make a difference. And by the way, you might be interested in this article "Are You Playing To Your Strengths"  and if you're looking for some tips on starting your own business "How to become an entrepreneur"

About the interviewer
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

To be successful in your business, know when to walk away

Winners know when to quit

If you run a business or have been thinking of starting your own small business, you've probably heard a lot about the importance of persistence and tenacity, and never giving up.

You may have taken to heart the motto "Winners never quit and quitters never win" ....... Well, get ready for a jolt, because Seth Godin says that's all NONSENSE !

Persistence can sometimes be wasted energy

Who's Seth Godin, some of you will ask? ..... Seth Godin is the founder of the online mega-successful business, Squidoo. He is a best selling author of numerous business books and he is a firm advocate of knowing when to walk away from a venture that is not proving to be a worthwhile investment of your time, money and effort.

In his book "The Dip - The secret to success is knowing when to quit and when to stick" Godin says that winners know when to quit, but they do it at the right time.

The Dip refers to the long road between setting yourself a goal and the journey involved with eventually succeeding in achieving it. Initially there is a sense of excitement, hope and optimism which has motivated you to try something new ....... but then along the way there will come the inevitable obstacles, pitfalls and barriers that you will encounter.

There can be pain, intense frustration and disappointment - and a considerable investment of energy and endurance is required to have any chance of finishing what you started. But if you can get to the other side of this pain, and get through this "dip", then you can emerge stronger, smarter and more capable.

Achieving your goal can bring tremendous feelings of satisfaction - as well as perhaps significant material rewards, depending upon the nature of the goal. The critical question to ask yourself is, will the goal be worth it? Is the pay-off you're going to receive worth what you will investing to get through the dip? Or is your time, energy and effort going to be better served by being directed towards a different venture?

Godin observes that there are some people who invest a lot of their time and effort in battling the hardships - only to give up just before they are about to emerge out of the dip. This is like a marathon runner who has run 20 miles only to quit with one lap to go - what a wasted effort!

The other thing Godin says you've got to watch out for, is what he calls the "cul de sac". He says if you get into a dip, at least if you push hard enough you stand a chance of getting out and things improve. But if you're in a cul-de-sac, then no matter how hard you push you stay where you - like a car spinning it's wheels, using up petrol but going nowhere.

So before you enter the dip, be sure the new goal that you're setting yourself in your business -  or the new project you're about to initiate, or the new product line you're looking at releasing - is worthy of pushing yourself hard and persevering through to the finish line. Otherwise it's simply going to be a drain on your energy and divert you from other initiatives that could prove much more productive.

It's just dumb to persevere with a no-win situation

So remember Godin's advice, winners recognise when to quit early - and when to go the distance.

Good generals know which battles to fight - and the battles to walk away from. As Kenny Rogers sang in the Gambler, "You've got to know when to hold  'em,  know when to fold 'em, know when to walk away - and know when to run". You should never allow the fear of a loss of face to prevent you from making the wise decision.

Don't be afraid to walk away from a no-win situation. Know when an investment is just not producing a satisfactory return - and don't be scared to sometimes simply cut your losses and quit.

By the way, if you decide to push through, you might like to get some tips on mental toughness

Here's a cute summary of the "The Dip" philosophy, explained by a six year old (with a bit of prompting from his dad)

About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

Internet Marketing Tips for the Small Business Budget

If you run a small business, then I'd be willing to bet that you appreciate the potential power of the internet to drive growth in your business. Either that, or you're an ostrich sticking it's head in the ground .... which can't be true, because you're reading this post!

 

Savvy business owners recognise that one way or another, potential customers are either using search engines like Google to find a provider of their product or service - or are referring to their social media networks for guidance to help them with buying decisions.

 

I recently had the opportunity to connect with Jayne Day, who is a specialist in the field of internet marketing. Jayne is the founder and director of Webonize, an online marketing agency based in Newcastle, Australia.  Jayne teaches and consults with small business owners on how to get noticed online and attract more clients. I asked Jayne some questions about her experiences in running her own business - and also to share some tips on internet marketing ......

 

What motivated you to start your own business?

Webonize is my third business and my second business based online.  I like having the creative freedom and lifestyle that can be created from having your own business.  Webonize was founded due to the passion I have for assisting other small business owners with their online marketing strategies.

 

What do you find most frustrating or stressful about running your own business – and what are the rewards that have made it worthwhile?

Thankfully, I don't have many aspects of my business that I find stressful.  My major obstacle has been maintaining the high level of service that I aim to provide my clients while balancing the large amount of enquiries and clients that I am working with.  While I have a couple of people that work with me, I am very hands-on in the way I run my business because I like to do the majority of the work myself and all client consultation is with me. 

 

The rewards certainly out-weigh the challenges.  Although I do work long hours, I choose the times each day that I work and I regularly work late at night so that I can spend the afternoons with my children.  I have created the business so that it offers me the flexibility of being able to work around my family.

Jayne, you’ve consulted with many small business owners, advising them on their online marketing strategies – what are the common mistakes that you’ve seen?

Most small business owners that I consult with, don't have a strategy in place. They are just guessing as they go along.  Having a complete strategy in place will see much greater results for the time and effort. Everything you do online should be complementing each other - with the ultimate goal of driving more traffic to your website so as generate more sales.

Another common mistake is not being clear on your "ideal client".  Your ideal client profile should be very defined so that all your marketing messages are speaking directly to this particular market - in the language they speak and in the places they hang-out. If your messages are too broad, then you run the risk that you won't appeal to anyone.

What about SEO – what have you found are some of the things that SME’s typically overlook or simply don’t understand about how to achieve ranking success with their websites?

Keywords are the first, most misunderstood concept of SEO.  Keywords are the words that people type into search engines (eg. Google) to perform a particular search.  Most people guess what keywords they should be using and then try to rank for those keywords.  To be successful with your search engine optimisation, the keywords that you are targeting are the first and most important step in your SEO campaign.

Ensure these particular keywords appear in the Title tag of your page and also in the meta-Description for the page (you may need to ask your webmaster to make these changes). And also ensure that these keywords are woven naturally into the text and content of the page itself.

You want to make sure that you are targeting keywords that your ideal clients or customers are actually using when they enter in their searches.  There is no benefit at all in ranking on the first page of Google for a keyword phrase that no-one is using.  You want to be ranking for keywords that are actually going to bring in traffic to your website, and preferably traffic that will result in sales.  The sales might come straight away or they may come in the future.

The need for careful selection of the keywords you target applies as much to paid advertising as it does to ranking well for organic search performance. There may be some small business owners reading this who are as yet unsure of what I mean when I refer to paid results versus organic  performance

Let me explain this ....... An internet marketing strategy will often comprise some carefully selected paid advertising - which may include search engines and sometimes  Facebook (depending upon your target market)

For example, using Goodge Adwords pay-per-click online advertising means you might bid maybe $2.00 in order for your website to appear on the first page of Google search results for a particular search phrase. However, this amount is only paid if your ad (which contains a link to your website) is actually clicked. Whereas working on improving the organic (natural) search performance of your website means you pay nothing when your link is clicked on. The paid advertised results appear on the right side of the search results - and the organic (unpaid) on the left side of a computer screen. Premium advertising appears as "starred" results at the top of the page, which cost even more if they are clicked.

In addition to all of this, email marketing might also be considered as another component of your marketing strategy. You'd be surprised at the number of small business owners who are overlooking the potential treasures in their existing customer data-bases - and simply failing to leverage them when they initiate new promotions or are running a seasonal "sale". Mind you, there are still many small business owners who don't yet understand the importance of building a customer email data-base ..... and this is something we help them to do. 

For small business owners with limited time and equally limited budgets, what strategies and platforms would you recommend in building an online presence?

First of all, come up with a strategy.  Even if it is only very basic.  You need to know what you are doing and why you are doing it and how it is going to benefit  your business. This comes back once again to knowing your ideal client.  You want to know what is going to appeal to them and also where they are spending their time.  You don't want to be spending  a lot of time building a Twitter profile, for example, if your ideal clients don't even have a Twitter profile.

When first starting off, don't become overwhelmed with all the options.  Start small and gradually build on your strategy once you have one area or platform mastered.  So your first step might be Facebook marketing and once you have that flowing nicely, then move onto your next social media platform, which might be YouTube, Twitter, Pinterest or Instagram for example.  But keep it all in line with your overall strategy aimed at engaging with your particular target market. Same with anything you do with your blogs, guest posts, videos, webinars - it's wasted effort unless it's helping you to connect with your target market

Another thing to remember is, social media isn't going to give you instant sales.  Social media is used to make connections and build relationships with others. You build relationships by providing them with value and good quality content. Once you have gained some trust and credibility, then these relationships begin to be established - and then your sales will naturally follow.

I know that one of the areas that gives you satisfaction is helping women entering small business – do you feel that women face their own particular set of challenges in turning their visions into reality?

I certainly don't like to generalise, but I do find that many women struggle more with confidence and the fear of failure when starting their own business.  I love being able to help women find the confidence required to make their business successful.  

Any final tips on internet marketing for either the budding entrepreneur or the small business owner seeking to grow and expand?

While most online marketing strategies come free, or with a minimal cost, keep in mind that your time represents money.  Make sure that the time you are spending is giving you a worthwhile return on that investment. Otherwise, consider outsourcing this function, so that you can focus on playing to your strengths in your business.

You also don't want to invest too much time creating profiles on social media platforms that you don't own and ultimately don't have any control over.  Make sure you maintain a very strong focus on what you do own in the online space, and that is your own website.  Spend time creating quality content that is regularly published on your website, that your clients will find useful. Ensure the strategy you have in place will drive followers from social media back to your website - otherwise your social media time investment becomes mere "fluff"

 

Thanks to Jayne, for sharing some of her internet marketing experience with us.
 

Other related posts - SEO Tips for Small Business and also Getting Found by Google
 

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About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile