March 2013

I have recently read the book “Profits Aren’t Everything, They’re the Only Thing” by George Cloutier with Samantha Marshall.

In the review I said the basis message for business owners is “to grow a pair, man up and take control of the profitability of your business.”

It’s not a nice, gentle book that says you will have a profitable business because the law of attraction will say you deserve it. Just the opposite.

I think any business owner who is struggling needs to read it and make their own minds up about what they will and won’t do.

The 15 Profit Rules by George Cloutier

The book is written around the controversial 15 Profit Rules and I thought I’d share them with you.

1 – Profits aren’t everything, they’re the only thing.

2 – End denial.

3 – Forget sweat equity.

4 – Love your business more than your family.

5 – The best family business has one member.

6 – Delegate, don’t abdicate.

7 – Live and die by a real plan.

8 – Pay for performance.

9 – “I am your Work God.”

10 – You are not in business to pay your vendors.

11 – When filing for bankruptcy is your best option, do it early!

12 – Don’t treat sales like your mother-in-law.

13 – Give up golf, retreats, off-sites and trade shows.

14 – Teamwork is vastly overrated.

15 – It’s not the economy stupid, it’s you.

There aren’t any words minced in this book. As I make clear in my review, I don’t agree with everything.

I believe direct mail is an important way for businesses to reach out to potential customers.

The big advantage is that it can be very carefully targeted to a tightly defined group of recipients with a tailored message.

However, when people think of direct mail, they may not appreciate the different types of direct mail that can be used to:

• Attract new prospective customers
• Convert prospects into customers
• And encourage customers to buy again

The 9 Types Of Direct Mail

1. The standard personally addressed letter. These are usually one to two pages long but can be much longer.
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2. The printed letter. These are usually long (8 pages plus) and commercially printed and may be sent with a personally addressed introductory letter.
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3. Postcards. A short, simple message requires little effort to read and usually promotes an offer on a website address for more information.
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4. Catalogues /  catalogs and brochures. Often best sent with a letter.
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5. Magalogs. This is a sales letter disguised as a magazine with different articles. These can be used to change beliefs.
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6. Newsletters. Regular information sent to develop the relationship between the business and the (prospective) customers.
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7. Lumpy mail. Marketing trinkets can be used to make the envelope/package look more interesting and the letter more intriguing. It’s best if the trinket has a connection to the offer and will be kept.
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8. Valpak coupons and postcards. Your offer is sent together with offers from competing or complimenting firms to reduce the mailing cost per business and to create something that is intriguing to receive.
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9. Gifts. Calendars, wallcharts etc that are designed to keep promoting your brand and offers.

If you’re planning to use direct mail to promote your business, I recommend that you think of a multi-mailing approach.

It usually takes more than one contact to get the best response. Some experts say you should have a three letter sequence, others say use seven.

I don’t think there are hard and fast rules. Plan to use multiple mailings that reference the previous one (like debt collection letters) and write the best copy you can to get the action you want.

Then test and see what your economics say. If there is a fall off in response after one particular letter, improve it or replace it with another.

How To Learn How To Use Direct Mail Effectively

There are different types of direct mail.

While direct mail is effective for reaching customers who are hard to reach in other ways, it is expensive because of the postage and production costs.

If you’re going to use it, it makes sense to learn how to do it effectively.

I had great success after reading these two books:

Drayton Bird – How To Write Sales Letters That Sell

Dan Kennedy – The Ultimate Sales Letter

I’ve written about buying business advice from the perspective of the business advice junkie or addict in the past.

These are the business owners who buy too much and never get around to implementing much in their own businesses. Unfortunately this has become particularly prevalent in the make money on the Internet niche. I’ve written an article, Protect Yourself From Guru Greed for these people.

Today I thought I’d look at it from the other perspective…

Why Don’t Some Business Owners Buy More Business Advice?

First, why should they buy advice?

Many Small Businesses Perform Badly

Various statistics are bandied around for small business failure (see What Causes Business Failure) that may exaggerate the situation but too many businesses fail.

Even more struggle to survive. One of the big insights I received when I was a trainee accountant in the early 1980s was that the dream of being your own boss wasn’t as good as most people think. Since I’ve gone back to work with small businesses, I know this situation hasn’t changed.

Even if a business is doing well, I don’t believe that there is a business that can’t be improved by an injection of new ideas.

The Different Types Of Business Owner And Their Response To Business Advice

Business Owner Type 1 –  “I don’t need any business advice.”

Some people are born with incredible instincts for what customers want, have a clear vision of how it can be delivered, the confidence to take action and the natural ability to lead and persuade other people.

It sounds like you are a budding Bill Gates or Richard Branson destined to change the lives of millions of people. You’re a natural risk taker.

However, while these people have great insight, if you read their biographies, they surround themselves with excellent people to compensate for gaps in their skills and knowledge.

Business Owner Type 2 “I don’t want any business advice.”

You may not be happy with the performance of your business but you don’t want to take business advice.

Perhaps you believe that you’ll just be told what you already know or that business advice is only common sense anyway.

Often there is a good dose of common sense but I often hear clients say “Why didn’t I think of that. It’s obvious when you say it.”

It’s often difficult to see what’s happening (or not happening) in your own business because you are so close to it.

Perhaps your pride gets in the way and you are determined to do it your way without any outside interference.

I wish you luck, but tactfully I feel obliged to point out that you are likely to get better results if you open yourself up to ideas from other sources.

Why try to invent the wheel when it’s already been done?

Business is difficult enough without trying to start from scratch every time you try something new. It’s better to build on the accumulated knowledge and best practices of the past.

I don’t understand why you are prepared to waste time and money making mistakes which can be avoided.

Business Owner Type 3 “My friends at the golf club (or pub) give me all the business advice I need for free.”

That’s great if your friends are business professionals or fellow business owners who have committed their life to learning.

It’s not so good if you are benefiting from their bravado that masks moderate performance in their own businesses that comes from doing the same old things in the same old ways.

Appearances of success can be deceptive. There is no shortage of stories of businesses collapsing when the top managers and owners appear to be financially successful.

A famous insolvency practitioner in the UK had an informal early warning system to identify distressed companies. These warning signs included businesses where the owner drove a Rolls Royce or a similar fancy and expensive car. These status symbols can be leased while there is money but when the money runs out, everything collapses.

Your business friends have the advantage of knowing you and your situation. Or at least the situation as far as your pride lets you admit. It is tough to say that things aren’t going well to friends who like and respect you so you be not even be giving them the chance to help you as much as they could.

Business Owner Type 4 – “I can get all the business advice I need free off the Internet”

It’s true there is a lot of business building information available for free on the Internet.

Some of it is very good, some is OK and some is poor.

There are two big problems:

The first is being able to assess the quality upfront. If you can’t, you waste a lot of time while you are searching for the golden nuggets.

The second is that you are rarely given the complete answer. Most business advice information is posted on the Internet by business advisors, consultants and coaches of one variety or another. This is part of their marketing strategy and tactics and it’s designed to attract and convert you to buy their services or products.

I admit that I am the same. I sometimes write very long, informative blog posts but I know that the advice I give to clients is even better because it’s more comprehensive and tailored to their particular businesses.

I accept that one of the big problems with business advice is that it is expensive.

I should also remind you that free advice is only good value if you gain from it. Even then, it may not give you the best result.

Learning how to make £1,000 extra profit for free is great – you’ve got £1,000 that you didn’t have before.

Spending £1,000 to earn £5,000 is even better because your gain is bigger.

This is a key issue to think about because it’s not the cost of the advice that matters but the difference between the gain you make and the cost of the advice.

There’s a danger to thinking that the marketing consultant who charges $2,000 per hour is much better than the one charging $200. You might hear the same ideas from both.

However, if you’re much more likely to pay attention to what the expensive consultant says, he may be the one to hire.

Business Owner Type 5 – “I only need specialist advice.”

You accept that you don’t know everything about the specialist compliance subjects like tax and employment law because it is impossible to keep up-to-date with everything.

You will therefore pay your accountant and lawyer, perhaps not willingly, but they are saving you money over the long term.

However, you don’t believe that you want or need general business advice on sales, marketing, finance and team leadership.

You could be right or you could be leaving yourself open to making common mistakes that cost you time, money and lost opportunities for extra profit.

I’m not going to try to convince you that all business coaches, advisors and consultants are great or that you should buy a multitude of books and audio programs.

You’ve made your own mind up and whatever I say isn’t going to convince you.

Will you do one thing for me?

Will you commit to learning from your experiences as a buyer and a seller, as an employee and a manager, as a borrower and a lender.

You can learn a lot from watching and listening to other business people.

It takes an open mind and plenty of effort to keep alert to the tactics that work and don’t work. It is well worth doing if you’re determined that you’re not going to tap into the knowledge of the people who make it their business to learn about business improvement ideas.

Business Owner Type 6 – “I can’t afford to buy professional business advice”

This business owner knows that there is a gap in knowledge and other people have good ideas, but they’ve got themselves trapped in a money-saving mindset.

They know professional business advisors are expensive. The better they are, the more expensive they will be.

And they’re scared of the costs, not recognising that it’s not what you pay that matters but how much you gain over and above what you pay.

How Much Should You Pay Yourself As The Business Owner?

Do You Recognise Yourself In One Of These Business Owners?

I’m the opposite. I believe in business advice and I buy plenty of it.

I believe in constantly improving my knowledge, especially in the areas of marketing and strategy because that’s where my interests lie.

I know a lot but I know that there are always more ideas to learn.

Even If You’re Reluctant To Buy Business Advice, Isn’t It Worth Trying Some?

You may have lots of doubts about the benefit of business advice but don’t you think you should suspend your disbelief occasionally, if only to prove that you are right?

Just as I encourage the business advice junkies to stop buying and go “cold turkey”, so that they can start implementing, I encourage you to try it.

A friend emailed me yesterday about the issues involved with promoting your business by trying to increase the fear, uncertainty and doubt in the minds of your prospective customers.

“Frightening the horses” was the phrase he used.

So it is it a good idea about…

Selling On Fear Uncertainty & Doubt

Using FUD (fear, uncertainty and doubt) has to be carefully handled as it can push potential clients away as easily as it can pull them towards you.

I think this is where ethics comes into marketing and selling.

Selling on FUD is fine if:

• You have genuine doubts on what is going on.

• You’re trying your best to prepare people for bad times but with their best interests at heart.

An Example Where Selling On Hope Rather Than Fear Was Wrong

Look at the property bubble a few years ago and how some people were pushing property purchases in Spain. 

Prices were high but would they go higher or were they about to crash?

Most property developers were pushing a line that went “buy now before prices go higher”.

That’s selling on the hope of better things – you can make a capital gain from your investment in Spanish property although there is also the fear that, if you delay your purchase, it will cost you more.

What if a professional financial adviser came out with a contrary view “7 reasons why you need to delay your purchase of your dream Spanish villa until after the property crash”.

This adviser has recognised the property price bubble and is taking the stance that property prices are going to fall. (He was right).

Fear Vs Hope – Standard Wisdom or An Alternative View

There are two ways to thinking about presenting your case:

• Joining in the conversation going on in the prospects minds – things are tough, it’s time to make difficult decisions, but you need help to look at the financial issues involved in these times of uncertainty.

• Being a contrarian. This has the advantage that your message will stand out from the crowd and attract more attention although many will reject the basic premise – green shoots are starting to appear after many years of troubles. Your competitors are weak and opportunities are about to appear that you can take advantage of if you’re properly prepared.

I was writing this morning about how some people are motivated by moving away from problems while others are motivated to move towards solutions. (What Should I Do Before Starting A Business)

Similarly, some people will respond to messages of fear, others will respond to messages of hope.

Both are open to manipulation by the unscrupulous but both are legitimate if the thoughts behind them are based on the best interests of the client. 

What Are Your Thoughts About Selling On Fear, Uncertainty & Doubt?

Do you think sales and marketing promotions should emphasise the positive rather than the negative?

People are vulnerable when they are hungry, angry, lonely and tired (Marketing To Emotional Weaknesses)

Selling & Marketing Hope can also be very manipulative.

There is an ethical issue involved with marketing since you are looking to persuade someone to do something that they didn’t intend to do. Is all marketing manipulative or are their lines that should not be crossed?

Or it it a case of caveat emptor, buying beware?

My own view is that the best marketing is persuasive but it moves people towards taking action that it is in their own best interests.

I wrote yesterday about elevator pitches (Why Your Elevator Pitch Is Important) and overnight I received an email promoting a webinar by Bill Baren and Lisa Cherney.

I had to smile.

First, I think “Juicy Introduction” is so much nicer a phrase than elevator pitch or elevator speech.

The webinar is titled:

“Pushing the Wrong Buttons: Chuck Your Elevator Pitch
to the Basement and Attract Clients with Your Juicy Introduction
Instead”

That suggests that a juicy introduction isn’t the same as an elevator pitch.

Without attending the webinar, I agree and disagree.

As I wrote yesterday, I think some elevator pitches are incredibly cheesy and put up the defences of prospects.

That’s obviously bad news.

A well crafted introduction on the other hand starts rather than ends conversations.

I liked the copy in the email so, as I’m going to be cheeky and repeat it here, I’d better give you a link to Lisa’s website – http://elevatorpitchmistakes.com/  and the webinar (March 28th) – http://elevatorpitchmistakes.com/bill-b

The webinar will probably lead to some kind of offer.

The Juicy Introductions Copy

• Exactly what it says about you and your business if you CAN’T describe what you do in 30 seconds or less (and how not fixing this problem right now may very well keep your business STUCK in the basement!)

• Why creating just an elevator pitch is a BIG mistake (and could be costing you thousands!) and how crafting a Juicy Introduction is definitely where you want to be

• How not having a Juicy Introduction directly impacts what you charge for your services (and even more importantly, what people are willing to pay you)

• How to create your signature Juicy 30 Second Introduction that pushes ALL the right buttons, so your business skyrockets right on up to Penthouse level… (really – master this, and return from EVERY in-person event, trade show, networking meeting or trip to the store with qualified leads that WILL likely convert to clients!)

• Why you need at least 3 specific versions of your Juicy Introduction perfected at all times

• 3 ways to use your Juicy Introduction that have nothing to do with eating rubber chicken at networking meetings (and how using them correctly can help you climb the floors of business success)

These bullet points raise some important issues although, in my reserved marketing approach, I’d shy away from some words used.

My Thoughts On “Juicy Introductions”

As I explained yesterday, for many years I resisted the idea about having an elevator pitch.

I saw them as cheesy, almost vulgar.

I guess in some ways, in those days, I was “anti-marketing”, arrogantly believing that if you’re good enough, you’ll always have more than enough customers and clients through word of mouth.

Then I saw the light.

As I worked more clients, I came to see them as an essential positioning tool.

People who can’t sum up their business in around 30 seconds and make it sound interesting have a big problem.

It suggests that they are not so clear themselves about some of the big questions of business success – the who, the what, the why…

If you’re in business you need a way to explain what your business does that makes anyone who should be interested ask for more details. You can call it a juicy introduction or an elevator pitch.

If you’ve got the time, I recommend that you listen to the webinar.

BBC2 has recently been showing the second series of Alex Polizzi, The Fixer. It shows how family businesses are struggling and how, with the help of an expert, can be turned around.

Who is Alex Polizzi?

The name Alex Polizzi may sound familiar.

As well as being the business expert on this BBC2 series, she’s also featured as The Hotel Inspector.

She comes from the Forte family who built a chain of hotels. She and her husband have their own bakery business.

You can read more about Alex Polizzi’s background at Wikipedia.

Alex Polizzi vs Family Businesses

I didn’t watch series 1 but I have been watching series 2 and I intend to write blog articles about the lessons that can be learnt, from the perspective of the problems and solutions.

vs Alf Onnie

A traditional curtains business with a shop and a made-to measure sideline run by three warring brothers and a retired father.

vs Peachy Pics

A mother starts a photography business after recovering from cancer and employs her three daughters.

vs David Holmes

A father with more than 20 years experience starts his own funeral directors business and involves his two sons, neither of whom are committed (at the start).

vs Martinis

A hairdressing and beauty salon started by one daughter, partly financed by her mother and employing a second sister.

vs Pisces

A struggling fish and chip shop.

vs Oak Garden Centre

A garden centre finding things tough at the moment.

The Common Problems Of Family Businesses

1. Separating the role of family member (often caring mother or father) from the boss.
2. Unclear individual responsibilities (a problem also common to other, non-family small businesses)
3. Family members employed because no one else would have them, meaning low commitment and low expectations of performance.
4. Poor marketing.
5. Shortage of money – inevitably there is a circular issue here. They don’t make money because they don’t spend money and don’t spend money because they don’t make it.

I’m planning to write lessons to be learnt from each of the episodes I’ve watched.

There are special issues about running a family business and I’ve seen it, even when the businesses get very large.

What Do You Think About Alex Polizzi The Fixer?

Do you enjoy the show? If you own a small family business, do you find it helpful?

Do you see your own situation in the businesses that are shown?

Would you ever volunteer to feature in one of these shows?

I was wrong about the idea of elevator pitches and you could be too.

This misunderstanding could be costing you a lot of money in terms of lost opportunities for new customers and extra sales. I want to stop you making the same mistake I did because it took me more than ten years of owning my own business to get this right.

Elevator pitches are important if you don’t have as many customers as you want

Until a few years ago I thought elevator pitches were slick and sleazy and when I heard a corny expression, it immediately put me on my guard.

However at the same time, I recognised that introducing yourself with your business type has a nasty habit of making the other person turn you into a commodity supplier in their minds.

“I am an accountant (or a printer or a lawyer or a chiropractor…)”

Whatever the job, I assumed I knew what the person did.

The people I talked to did the same to me when I mumbled some kind of explanation of what I did because I was resisting the idea of having a pre-planned “corny” elevator pitch.

I could virtually see their eyes glaze over with a sign saying “I’m not interested” when they may have needed my services.

I bet you do the same when you meet someone new and they introduce themselves in such a boring way.

A better type of elevator pitch

Then I learnt a technique to create a better style of elevator pitch that could be varied based on the situation and the person I was talking to. It made a lot of sense to me and I developed a phrase I was happy to use.

Working with clients, I came to see this short statement as an essential positioning tool that explains how customers benefit in what situation and explains why a business is different to the competition.

Our coaching sessions turned meaningless generalities into meaningful specifics and that clarity of purpose rippled through into all the other marketing the clients did.

The elevator pitch became an acid test into how much thought a client (or any business owner) had given to their marketing.

If they couldn’t quickly and concisely explain what the business was about, I knew there was a marketing problem and the business owner was making it hard for customers to buy from the business.

I look looking for products that are new, different and innovative so when I read about Sex Cereal, I knew it had to feature in my differentiation examples.

Sex Cereal is promoted as the world’s most Passionate Cereal and the first gender-based wholefood and its promotional slogan is “big life living, fuel your fire”.

It comes in his and hers varieties.

SEXCEREAL for HIM is blended with ingredients to support testosterone.

SEXCEREAL for HER is blended with ingredients to support hormonal balance.

How I bet they wish the slogan “snap, crackle and pop” hadn’t already been taken.

In my dimensions of differentiation, this breakfast cereal comes into differentiation by what, differentiation by who and differentiation by why.

Are all business coaches the same?

No.

I like to summarise what makes me different my saying that I’ve got the mind of a finance director and the heart of a marketer and strategist.:

• always thinking about profit and cash flow
• aiming to improve the value the business creates for its customers and capturing a fair share of it.

Why That Matters To You

Financial skills helps you to:

• Know what to do in your business to improve sales, profit and cash flow:
  • Whether it’s better to increase your prices or to reduce them.
  • Whether it’s better to have more customers or to be more selective about the customers you work with.
  • Whether it’s better to spend more on a particular type of marketing or whether it should be stopped altogether.
  • Whether your business should invest more in your staff or whether it’s time to reduce the headcount.
  • Plus many more vital questions that rely on understanding how your business model generates sales, costs, profit and cash flow.
• Know whether you are implementing the plans and whether they are working in the way that you expected.

Marketing and strategy skills helps you to know how to:

• Select the most appropriate market and target customers
• Develop the way your business will be different from competitors in ways that matter to customers.
• Design your offers to potential customers.
• Select the best marketing media to use.
• Design your internal processes in ways that deliver your customer promise, exceed customers expectations but also keep costs down.
• Encourage your customers to buy more and to keep buying.
• Turn your customers into advocates who recommend your business to more prospective customers.
• My key ideas on marketing and strategy are covered in my report, the Six Steps Profit Formula which you can download for free.

Can you see how these two sides fit together and work in harmony?

How It Developed

I’m a qualified Chartered Accountant and I worked as a finance director back in the early 1990s. I can’t help but think about the implications of ideas and decisions on margins, costs, profit and cash flow. It’s ingrained deeply in me and I love knowing how the business model intuitively all fits together.

It seems that you can take the man out of finance but you can’t take the finance out of the man.

However marketing and strategy are my passions.

As soon as I qualified as an accountant in the mid 1980s, I knew that I wanted to know more about how to generate sales revenue and margin and how to get and keep more customers. I started study marketing as part of my commitment to my compulsory continuing professional education.

I went on courses and I read marketing books. I watched what my sales and marketing colleagues did for the companies I worked in and made sure that my ideas were heard. I was seen as an unusual accountant because I had such a commercial outlook. In the late 1980s, I remember my managing director at the time telling me that “I think like a general manager”.

Then, around 1990 I became fascinated by strategic planning and management.

Finance emphasises the importance of making a profit for the shareholders and generating enough cash flow to pay everyone. It gives an all-round understanding of how the different levers impact on the sales, profit and cash flow of the business.

Marketing emphasises understanding, creating and delivering value for money to customers so that are interested in the business, eager to become customers and then to stay customers over the long term.

Strategy joins the two together and taught me how the twin demands on any successful business didn’t have to be a trade-off through the prices charged to customers.

As this learning happened at the same time as the early 1990s recession, it also taught me that you have to pay careful attention to the external environment because the situation can change from benign/supportive to very nasty. Worse those changes can happen very quickly when market pressures caused competitors to cut prices sharply in a vain attempt to maintain volumes.

I also kept gaining additional commercial responsibilities in successive management shake-ups because I had a knack for improving the performance of people and processes. This included taking line responsibility for export sales, the UK sales office, purchasing of goods for resale, production planning and stock control for a 200+ employee manufacturing and distribution business.

When I decided to follow a career as a self employed consultant, coach and interim manager in 1995, I knew my skills created a diamond:

1. Strategy and the importance of pulling everything together in a consistent way
2. Finance and performance measurement
3. Marketing
4. Process improvement

Since then, my work has continued within that diamond, sometimes with more focus on one element than the others.

In summarising what makes me different from other business coaches and advisors, it’s because…

I have the mind of a finance director (always thinking about profit and cash flow) but the heart of a marketer, focused on improving the value the business creates for its customers and capturing a fair share of it.

Get To Know Me

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