With the sprouting of numerous Software-as-a-service(SaaS) companies sprouting in the business.
Like all businesses, SaaS startups need cash to survive and remain in the business. To ensure the same, a good pricing strategy plays an important part.
The initial years for any business are very crucial for the long-term success, with many challenges to overcome and lessons to be learned.
We see around that the economy is booming, yet small business failure is flat? It’s because macroeconomic successes have nothing to do with the day-to-day operations of small companies. Continue reading “3 technologies a small business should use for better cash flow”
We all know that an invoice is raised for the product or service rendered by a business. But do you know a simple invoice can help you to generate more sales for your business?
Lets’ define cash in a scientific way. If we take the company as a human body then cash is the blood. Then why blood, because it’s the most needed thing same as oxygen. A human can’t survive without blood and oxygen and a company can’t run without money, which is cash and human resource, which is an employee.
Every year many startups have been joining the startup journey but few exist for a longer period. The only way to survive in this competitive world is to have a strong marketing or business growth strategy.
When the liabilities of a company or entity become higher than assets, this situation called insolvency and the company called as insolvent.
Financial planning is a key growth factor for small businesses. Financial planning includes budget planning, cash-flow management, Income & expense management, investment planning etc.
Accounting errors is a common mistake always likely to happen in businesses. But these small mistakes can hamper your business in a bigger way.
On 23rd meeting of GST council Finance minister Arun Jaitley announced some major changes in tax rates which provide some relief to tax payers.
GST council also reduced GST tax rates for service sector (Restaurant, Handicraft & Aviation) to simplify taxation process and promote ease of doing business.
Relaxation for Service Providers:
Service providers within Rs.20 Lakh turnover are free from GST registration. This is also applicable on those who provide inter-state services and through any e-commerce portal.
There is no good news from this 23rd meeting for restaurants. Restaurants can’t avail any input tax credit with remaining tax rate of 5%.
Services export to Nepal and Bhutan are exempt from GST charges also they can avail input tax credit facility. Continue reading “Major changes announced on 23rd GST council meeting”
GST marked as the biggest tax reforms in India since 1947. It’s a unified tax implemented by current BJP Government with an aim to erase all state or central government indirect taxes. GST subsumes 11 Indirect taxes that were levied on the sale of goods and services by central or state Government. GST made indirect taxation process simpler for small and medium scale enterprises. It will also boost economic growth in a long run. New small businesses will be benefited from this new tax law as they have to pay less tax under composition scheme (SMEs with Rs.20 – Rs.50Lakh turnover).
As we are saying that GST made taxation easier. So, let’s have a look at its registration process. In this article we will cover all details regarding GST registration with below-mentioned points:
Since its implementation on 1st July, 2017 GST has been always in the news due to its high tax rates & bit complicated tax slabs also Govt faces lots of criticism for it.
Recently RBI forecast GDP growth rate at 7.3% (2017-18), which is lower than last year’s GDP growth rate. To main economic stability and for a higher GDP growth Government decided to revise tax rates.
On 6th October Finance Minister Arun Jaitley announced new tax rates after a long & fruitful discussion with GST council members.
The GST council slashed rates on 27 items and 12 services.
Here are the details of revised tax rates on goods:
I’m not a good marketer. Neither a good sales person. ( my mom warned me not to use businessman and salesman in my words, so I’m writing sales person 😛 ) But when I’m in sales mood my conversion rates in sales go real higher. So here is a little secrete that can improve your sales much higher, as high as 20-35%. Especially effective for people who also understand what their service or product really is.
When meeting a customer don’t talk project or price from the start. Listen to your customers explaining why they want the product in the first place. In web design business, I used to ask, “What do you think a website can do for you?” or like, “Why do you want a website for your business?” You know it’s different than I’m telling what we do and how we are different.
Then listen. Listen till they drain up all their motivations and influencers who told them to make a website in the first place. This is really wonderful. You get to know who they really are. What’s the situation of their business. How their friends make them to think about designing a website can solve their issues. I heard like “My offline business is doing good. But you know I’m missing ways to scale up my market reach and sales. My XYZ friend who came for a dinner last month told me by creating a website I can get lots of inquiries from people who are searching for services like me. Also my YYN I HATE THAT GUY competitor is growing by creating a website.”
Then see when influencers are these, you can’t talk a lot about branding and colors. You should be better talking about if this piece of design can solve their issue. You also need to tell, what else may be required to scale this up too, like may be SEO etc. if you want.
Then I agree to what he said, “Yes! We could improve the sales of XXR OF OUR SWEET CLIENT to some X% by creating a better website.” And they inquire more and I try to confine the discussion to few more lines.
Then I ask, “How does your company want to represent it to your client? What’s the way you do market? And what your customers ask you often when doing sales?” or “I heard about XX company in your space. How is your solution or customer segment is different than them?” See here you are gathering ways you can make them successful online too. For new businesses it may be difficult to get a real picture.
Then listen to them carefully. See I don’t talk the design, look and feel of the website. I talk about their vision of their own company. Listen to phrases like “We want to be caring”, “We are actually good at XX, which can solve XX in the whole process”, “We make products with lot of care and heart”, “As we grow we want to be different than other companies and make our customers save more”, “We hate this, the other company is doing”. If you are listening to stuffs like our customers love it, then it’s time making customers the center piece.
Understand, for every company owner, his company is really good and he wants his company should look good as their sales man. And frankly they don’t know what color is best for them or what style, they just saw it somewhere or think of that would be best. It’s your job to recommend them a color. But understand their brand color and why these colors are or should be there. If indeed.
And when it comes to telling about price, just tell what your best upper price is. Never hesitate to tell. Or else they’ll feel you are cheating them. If they are that comfortable, which often they become, when they reach to this point. They would tell either “OK! that sounds good when should I pay?” or they would tell, “look I don’t have this amount of money?” or “The others say XX REAL LOW PRICE, your price is really high”.
If you get the first one then congratulations. You owe me a treat
If you got the last two, this is the time to tell why you are different. They just experienced a bit of it. It’ll help them compare the money they are paying vs the benefit they’ll get for it. If possible you can give them a ROI demo. And then tell how taking low money like others force you not to do good work. Explain them your expenses including salaries etc. if you can. People don’t want to hurt you. They would be OK and love to help you and also themselves.
If they stick to the price stuff, you should understand they are not yet well convinced. Often I say thank you at this stage, because I knew my time is much worthier. And I say “loved talking to you, You can look for X, Y and Z good designer out there who work at low price. They may help you? Wishes for your business, it’s just that my expenses are little higher and I can’t help reduce it :)” Don’t make them feel guilty. Sometimes they bring you more clients or comeback when they have money.
But if you feel the customer worth it, then you can ask, “What should be the price, you think?” And tell “See I can provide you this much in that price and you’ll be loosing XXX”. Look customers love getting value more than the discounts, though discounts can quicken the process. Read my upcoming book “3 Ways to Price: Part-I” releasing coming Sunday, before giving a discount.
Understand sometimes customers really don’t have money to pay you. That’s OK. If you can’t help with price, just refer them to others. I usually tell “Ask me any other help when you need like advise on designs if I’ll have time, I’d love you help you grow.” Sometimes I sit with the customer to figure out where they should start with the little money and then as some money flows in how to improve bit by bit.
But if you need to get to the conclusion. You need to understand why something is important for them and why they put money into it. Customers often don’t tell you what they exactly need from a service and you can’t guess either. Better ask them to explain, why it’s important. You’ll figure things out much better.
We see many businesses trying to get a lot of income in a highly competitive market by providing their services and product really cheap. While this is not a bad thing to be known as Low Price King if you did your maths on pricing and how to deliver in the budget, many among you file losses due to avoidance of Rule No1 of this market. i.e. “Be Lean & Stick to the plan”
You could be able to provide products because you figured out the volume to sell, maintaining the operation etc. Like in the case of Wal-Mart or BigBazaar in India, they have a very great supply chain to make them be able to do it.
So it’s important for your business not to be slightly over budget in any field. The major problem comes in Operations. You need to be lean and should use perfect tools and checks (bound by time & budget) in place to do so.
Let me give you an example:
If a small shop will sell 500 pieces of AwesomeCheapThing at $1 each day with a profit margin of just 5cents, he gets (5×500)/100 = $25 in profit each day. Let’s see if one day its supply truck came late by just 1 hour which reduced its sell to mere 450 pieces for that day. He lost 5×50 = $2.5 on direct sell. But if we analyze what he actually lost, we got to know he pays his sells man for that 1 hour without selling anything + electricity cost etc + he spent little extra for inventory of that 50 pieces which made his loss to little more higher making that product price to sell at $1.5. But we guys have a tendency to neglect such minor stuff and we just think that we lost only $2.5 for that day.
But the guy who is selling it at $10 and sells only 3 pieces may not have that much of trouble and all extras can be adjusted to his profit.
So if you guys operate in a low-profit environment, being lean and on time makes sense else you might be doing just another business that’s losing the only issue here is that you don’t know where you lost it. You can stick as some high strength glue to your operation plans. Losing is not a bad thing but knowing where exactly you lost is really crucial for you.
Training and education are important part of a healthy organization. You need to help employees improve their skills. Also you need to take business coaching continuously. That way you always remain more knowledgeable, advanced and well functioning organization.
WHAT ALL YOU NEED TRAINING AT:
- Technical & job oriented : New coding language, new form of marketing, sales and customer support.
- Communications & behavioral : You can reduce 30% work load just by communicating better amongst your teammates and to customers.
- Cultural & team-coordination : If you have all people share same cultural philosophy for your organization, you’ll attract more customers and good staffs to your organization. And team-coordination training make your team to work to achieve the same goal.
- Customer Induction : This is not a training but an education. Monthly once you need to invite one of your customer to your place for 3-4 hours, or may be on a dinner. Gather all of your team. Let the customer tell their story. How they do shopping and how they use your product or service. And make all the employees, be it marketing person, sales person, accountant, managers, HR person, product people or your office staff, to understand how they can improve the experience for your customer.
- Listening & questioning methodologies : Although it’s a part of communications training, I want to highlight it as a regular exercise. Every week, your employees should learn to question and then listen to the other person. This exercise will gradually boost the performance, understanding, confidence and ultimately the creativeness and innovativeness of each person.
NOW HERE’S MULTIPLE METHODS TO DO THIS:
- Have a small library. Else here an eLibrary with Kindle.
- Subscribe to Udemy etc annual plan for your team.
- Invite expert speakers or trainers to your organization.
- Sponsor your employees to workshop events.
Now what are the other training that should be included? What are other sources of training?
At 8i Creations we were helping businesses and design firms to bring more conversions/orders/inquiries from their websites. Here’s what I’ll sum up as the best practices. (Please don’t inquire 8i creations, we are no more accepting projects)
1. Define your business in 5 words. Headline it on your home page.
2. Solve 3 questions that customer would be asking when coming to a page & follow it up with a contact number/email id/form for further discussion.
3. Navigation text is important. Name links as customer would like to search it, not what your product name is. Eg. “SEO” may be defined as “Increase website visitors”. Similarly ‘Machine for tamarind processing’ is more suitable navigation text that ‘HP terminator 500’. Dharma Agrotech, one of our clients, has a multipurpose machine that can process Peeper as well as Groundnuts. But their customers may not search that way. See how we created different links to the same product. And the conversion was wonderful.
4. Be definitive about who your customers are and who are not.
5. Use videos & photos to describe your products and how it’ll benefit customers. Real photos can make you more authentic than stock images.
6. Customer testimonials are powerful. Use their photos or videos.
7. Clear and simple looking websites convert in an average 5 times more visitors than a website that looks very flashy & complex.
8. Give yourself a face. Put your pictures, pictures of where from you work and a complete address.
9. Invest money in SEO & Blogging if you can afford the money and time. It worths it. The more people come to your site, more you can convert.
10. And most importantly, make contact methods clear, visible and within quick reach. If your phone number is only at “contact us” page, you’ll loose 50% of possible leads. Wit says, convert them as soon as they make their decision. The low touch the contacts will be the better. Phone number or a form is better than only email id.
11. Did I forget to mention about content? Spend on a good content writer. Clear and conversational content are your best investment. Else ask the person-in-charge of your marketing or sales, if he/she’s good at content writing.
It works in this order:
1. More people know about your site: SEO & Blog
2. More people found the solution they were looking for: Site content & Navigation
3. More people contacted you: Clear and instant contact methods.
Hope you would like this post. What are the other best practices do you think?
Customers are different even though they purchase the same products or services from you. They all require different treatment, isn’t it? And you are responsible for building an organization that can better serve the kind of customers that gives you more value.
Once you have some customers, profitable businesses figure out the customer segment worth focusing at and weed out customer segment that don’t bring them any value or profit. All good managers and entrepreneurs know the power of this kind of data. They separate their customer base and continuously segment it. They continuously understand who their customers are and how they are changing.
Now let’s see how different and unique your customers are. Use a spreadsheet (or a CRM software). Add the following columns to your spreadsheet against all your customers name.
1. Channels they came from
2. The geography they belong to
3. The business they are in
4. The older or younger the organization is
5. The older or younger the decision maker was
6. The size of the company
7. The revenue of the company
8. Who in the organization contacted you
9. Who authorized you the money
10. Who got benefited directly from your service in the company (eg: the marketing team or the CEO or COO etc.)
11. The sales they gave you
14. The services they got from you
15. The quality & support they demanded
16. The profit you got from this customer
17. The effort you needed to market/sell them
18. The effort you needed to service them
Now apply 80-20 rule to this. Focus 80% of your energy and staff on serving the most valuable customer segment and 20% serving less valuable. Both things are equally important. While most valuable customers will give you most of the cash, less valuable customers may show you a different future. They can show you if there’s a new market segment emerging or a new kinds of product you can launch to capture a big potential.
Focus your marketing, sales, copy of your website, the product, the contract, the investments accordingly.
As a small business want to grow big this will make you focus your energy and resources in building more value and wealth. You save time, become more knowledgeable about the outcomes and bring more profit.
What else? What more can you do with this customer data? Do this and comeback and comment how this helped you understand your business better.
For the first time I did a to do work list in the morning before coming to office; as quite a few successful entrepreneurs I know does. I used to do it after coming to office or else at night before sleeping.
The difference I feel is quite drastic.
Night is best for creative thinking, long term strategies and so milestones. But morning ones before office is best for very short-term planning. Just Today.
Wow! It feels like you’ll get more work done during the day and rapidly move forward.
What’s your experience and how do you make yourself check the boxes out?
Small businesses and startups (mostly service-oriented) ask me for how much should we raise or take loan after basic investments? Here’s a simple math that works fine:
Base money: Get expenditure for the next 6 months covers (this is min. Better is 12 months)
Wastage: Get additional 20% for wasting charges (all company waste money in additional stuffs not needed) Lo an installments: Make sure you don’t have installments from day one. Else include them too.
What to do in these 6 months?
Do enormous tests: assign 10 customer/sales to each test depending on your product or service. each test shouldn’t go beyond 2-3 weeks. take a note of everything you learnt from these tests.
Prepare a plan: now take a list of approaches you are going to follow from your observation of your test.
Define target market: Keep only 1-2 in mind and washout everything else.
What to do in next 6 months?
focus, focus: Scale up on that target market and on that approach, while experimenting narrowly on side.
Do scaleup investments: hire, productivity tools etc.
If needed take another funding for 6-12 months: Make sure you are doing good in that.
Hope it helps. Please if it was helpful signup and make other small businesses signup at: https://www.slickaccount.com
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We’ve many users who we already sent their accounts but didn’t opened the email yet. So please make sure of it. Search in both inbox and junk or spam folder.
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The most common reason for business failure is people don’t invest in stuffs they should. And that’s called not taking risk.
Can this tool make me more efficient and I can get more out of what I’m investing and can get success done quicker.
They just continuously look into their wallet and tells oh scrap I shouldn’t invest in it. Else I’ll not have money for tomorrow. And that’s why they just keep having the money on their wallet and they never could increase it.
And it’s not just about monetary investment, but more often it is the case.
And don’t laugh, you might be in that state too. I know, I was there too.
And thank God we didn’t built SlickAccount software on that rule. We always hated to show something that deters people from investing. And that’s the common thing accounting softwares do. We instead focus on incomes and cash in hand. It’s OK to invest. But can you get this much in this amount of time?
This thing is so subtle. But you can see it everywhere around SlickAccount. And it’s a biggest secrete in making SlickAccount work for a lot of small businesses.
So invest on stuffs that can make it easy for you to reach your goal fast and buy you time. But don’t spend on stuffs that’s independent of this relationship. You can do that later.