Month: April 2008

Brockblake.com: Kent Thomas (CFO Solutions), put together an interesting article called “10 Tips for Recession-Proofing your Business.” Kent provides a much-needed out-sourced financial services for the small & growing business. He has been fantastic to work with and I highly recommend him. Here are the details of his recent article:
1. Diversify Customers. Evaluate your customer base and identify concentrations of customers in the same industry and / or geographic region. Also look at how much business you do with each customer (make a list of your top 10 or 20 customers with total sales in the past 12 to 24 months and calculate the percentage of your total sales that comes from each. Establish a strategy to expand your customer base and to watch the “concentration risks” carefully.
2. Cut costs. If three employees are doing the job of one, you may need to make job cuts. “When times are tough, it’s best to focus on core markets and spend money in those areas, not in areas that haven’t been more profitable,” says Lenhart, the national director of business restructuring at BDO Consulting in New York
3. Ratchet down inventory. When a recession hits, the last thing you’ll want to do is get stuck with shelves of needless inventory. Keep an eye on leading consumer indicators such as those offered by the National Retail Federation and the Conference Board. Also, establish inventory targets and make sure the sales and purchasing departments are talking.
4. Maintain prices. You may be tempted to slash prices to free up cash flow. That’s a mistake, says Bradley J. Sugars, a business coach in Las Vegas. Sure, you’ll sell products but you’ll also cut your profit margins and likely dilute your brand in the process. Plus, if customers decide to buy again from you in the future they may expect similar discounts.
5. Reserve discounts. “Don’t go into a discounting war,” says Sugars. Since you don’t want to dilute your brand’s value and you especially don’t want to start competing on price with discounters such as Wal-Mart Stores and Target.
6. Focus on service. While expanding your business into markets abroad may be avenues for growth, many small-business owners should focus on their existing customers and clients for a boost in revenue. With this in mind, Sugars suggests focusing on service. “It is one of the best ways to add value without costing money,” he says.
7. Invest in employees. When the going gets tough, the employees you have will be your productivity all-stars, says Lenhart. Make boosting productivity within reason, of course a focal point. For those that rise to the top, be sure to reward them accordingly. “You don’t want to lose your most productive people at this time,” he says.
8. Free up cash flow. While you’re attempting to cut costs and grow sales, “now is the time to call in favors,” says Howard Applebaum, chief lending officer of Sterling National Bank in New York. Be sure to free up your business’s cash flow by asking to have payments to suppliers extended.
9. Renegotiate contracts. If a contract, a lease or other obligation will soon be up for renewal, try to negotiate lower prices. At this point, you may be able to also make cuts, says Applebaum. If you don’t need 50,000 square feet of office space, consider paring down. “It is really a reality check that requires a tough look at your expenses,” he says.
10. Look to expand your business. If, on the other hand, you’re sitting pretty, Carmen Bianchi, director of San Diego State University’s Entrepreneurial Management Center, suggests giving the competition a gander. “Look for weaknesses and instability,” she says. If they’ve been having trouble, you may be in a good position to pick up their business at bargain-basement prices.
10 Tips for Recession-Proofing your Business [Brockblake.com]

I am among the 61 percent of Americans who believe that the US economy is currently in a downward slope, heading towards a recession or already at the point. Consider the astronomical number of foreclosures, escalating real credit card debt, ever-increasing consumer pricing (with particular concern about skyrocketing gasoline pricing and its domino industry effect), lagging personal income, rising unemployment or underemployment rates ? and its easy to agree with the pundits who proclaim that all is not well with our recessing economy.
Despite the unsettling news or perhaps because of it, thousands of merchants across our nation continue to blaze an entrepreneurial path, opening up businesses, cutting a swathe along every conceivable niche. Most of these new business owners will realize the necessity to accept credit cards, and consequently, need to establish merchant accounts. (Consumer credit card use naturally increases during difficult economic times and merchants must accommodate their customers preferred method of payment.)
Knowing the importance of obtaining credit card processing capability, merchants engage in an exercise of due diligence in an attempt to find the best merchant account to satisfy their needs. Here are some criteria to consider when weighing options in the midst of turbulent economic
times:
1) Associated credit card fees ? This is an obvious consideration, particularly when business profit must be maximized. As comparisons are performed, all rates must be considered, particularly the discount percentage assessed to qualified, mid-qualified, and non-qualified transactions. Of course, other fees come into play, such as start up, monthly, and annual costs. By comparing apples to apples, merchants may reap the seeds of greater profit;
2) Monthly minimum expense ? Many credit card companies charge a monthly minimum ? a certain amount of processing a merchant must reach to cover the merchant account provider?s cost. For example, if the monthly minimum is $25 and the merchant has only attained a processing amount of $15 (calculated by taking the discount rate times the associated transaction dollar amount), the merchant would be responsible for an additional $10
that month. This can add up over time and take a bite out of crucial
profit. Many new businesses, particularly during slow economic cycles, experience financial hardship during the first year, and it need not be compounded with unnecessary credit card processing expenses;
3) Cancellation or termination fee ? While some merchant account providers waive this cost, many assert that it is a valid charge due to the expenses incurred by the processor. But the cancellation / termination fee can run into hundreds or even surpass the $1,000 threshold. While business owners need to maintain a sense of confidence and optimism, the stark reality is that many businesses will fold ? and with greater frequency in a depressed
economy. Other merchants may simply grow disenchanted with their present
merchant account provider, and look for a better solution, usually to cut
costs. As such, a cancellation / termination will only serve as a financial albatross to the merchant;
4) Chargeback expense, policies, and procedures ? As the growing financial crunch bears its adverse effects to all, there is simply a greater likelihood that customers will initiate chargebacks, disputing a given charge. Merchant account providers typically assess a fee due to the ensuing investigation. Business owners should know what the fee is (the lower the better), and even more importantly, the merchant account provider?s chargeback policies and procedures. Some merchant account providers are very supportive in helping merchants navigate the process; others are very indifferent and may have policies that are not
merchant-friendly (e.g., a tendency to freeze accounts). It is important to find out your merchant account provider?s modus operandi with chargebacks; and finally, consider …
5) Customer support ? Regardless of your choice of provider, it is important for you to learn the facets of credit card processing. Agents must truly enlighten merchants and hasten the learning curve. After all, in difficult economic times, merchants cannot afford to waste time on trying to figure out or solve problems stemming from their merchant account. There must be a quick resolution so merchants can concentrate on their core competency. Any independent sales organization or agent must provide fast, reliable service, and be available for any problems that crop up.
Despite down markets, merchants can recession-proof their business, and one way is to choose the best merchant account using the aforementioned criteria.
Andy Lax has worked in the credit card processing industry for over five years and is now an Account Manager at IntelliCollect, a merchant account provider that enables business owners to accept credit cards and electronic checks.

This article was provided by Dittman Incentive Marketing, a quality leader in the field of people performance improvement. Since 1976, Dittman has helped companies achieve critical corporate goals via original, one-of-a-kind corporate incentive award programs that inspire sales team motivation, customers to buy more, and others to do more.
Scientists agree that in most people one side of the brain dominates. The right half of the brain controls the creative, artistic characteristics and the left side controls the practical, reasoning functions. Bankers, mathematicians and physicians are directed by a dominant left side. Artists, writers and actors live by the right side of their brain.
Those who successfully create incentive travel programs must be able to call on unusual competencies from both sides, seemingly simultaneously — to call on their ability to be an artist, a poet, a dreamer at one moment and almost immediately transform themselves into a plotter, a planner, a schemer.
One half says, “How do I get people from point A to point B in the most organized, logical and efficient fashion?” The other half says, “How can I make it fun?”
What are the skills needed, the training to be drawn upon, to prepare the two sides of the mind for this “combat”? From the right side come abilities in English, history, foreign language, art and music. From the left come the necessary accounting, math, science, geography and business skills.
English and History
A good incentive travel proposal provides a romantic, moving description of the travel experience as the guests will live it. The promotional materials also transform a piece of geography (the trip destination) into a living, breathing entity. The materials that prepare the winners for the travel experience fuel their fantasy. So you need the poetic skills of a great romantic.
Yet our writer must also have the discipline of a journalist. The proposal must deal, in almost checklist fashion, with the elements that are included in the cost. The rules of the program must be written in clear, precise, direct English. And the trip preparation materials must be quickly and easily understood.
The clearly superior incentive travel program uses the customs, the culture, the history of the travel destination to bring its uniqueness to life.
To be in a position to make that destination the foundation of a lifelong memory for the guest requires, at the very least, a good sense of history; to do it well calls for a genuine, heartfelt interest and knowledge of history.
The best travel programs inform and educate as well as host and entertain. And the incentive travel professional educates while he or she entertains.
Foreign Language
Do not mistake the intention here. An incentive travel creator need not be fluent in multiple languages to be successful. But a person who takes on the role of operating travel programs abroad can be of maximum effectiveness if he or she has a strong working knowledge of at least one foreign language.
And, most importantly, the key to fluency in any foreign language is a sound structural knowledge of English. An understanding of the nuances within a language, and the relationships of different languages to one another, yields a deeper understanding of the differences among people.
Art and Music
Music is not all rock and roll. And Leroy Neiman is not the most acclaimed painter who ever lived. The majority of guests on an incentive program are at the point in their lives where they are searching for truth and beauty. Close your eyes and picture listening to Mozart or Strauss being played in Vienna. Now, keep them closed and picture yourself soaking up all the beauty of a Renoir or a Monet in the Louvre.
The artists and composers … the poets and sculptors and writers of the world have made a more lasting impression on our lives than all the generals and politicians and statesmen. And it is up to the incentive creator to use them … to bring them to life.
I’ve referred to only five subjects that call upon the right side of the mind; by extension, philosophy, sociology, psychology and anthropology are included, as well. In short, the liberally educated man or woman “for all seasons” is best equipped to create heart-moving, mind-filling, exceptional incentive programs.
Now, to the left side of the brain.
Accounting
Could there be two people as opposite in essential nature as the poet and the accountant? Yet they must co-exist in the mind of the incentive creator. Line item costs must be budgeted, reconciliations made, the cash flow needs of suppliers, corporate sponsor and incentive creator prioritized. Foreign currency fluctuations must be dealt with. International monetary transactions are a daily task. And most important, the program must be done within budget, with a fair profit for all.
Math
We speak here not of trigo-nometry or differential calculus, but rather, of the basic arithmetic and algebraic manipulations that put one in command of numbers and, in turn, in command of problem solving.
If you’ve constructed a per-person price on a program, part of which is arrived at by amortizing $25,000 in fixed costs over 375 projected guests, what is the new price if you only have 320 guests? What formula can you fix in your mind to tell what time and what day it is in Bangkok when it’s 2 p.m. on Tuesday in Indianapolis?
These are the kinds of questions you must be able to handle without too much time, effort and anguish.
Science
Here again, not advanced chemistry or nuclear physics is required, but rather, a working knowledge of basic physical science and the human machine.
What are the effects on the human body of a 15-hour plane ride across eight time zones? What do you do with your guests the first 48 hours in Hong Kong to help them adjust to their new daily schedule? What season is it in Buenos Aires when it’s summer in New York?
If you’re not curious about the answers, then incentive travel planning is not for you. If you plan a major party the first night in Hong Kong, or if you think you’ll find the warming sun of Argentina baking you to a golden brown in July (where it has reached as low as 28 degrees F.), you’re doomed to fail.
Geography
The need for this body of know-ledge is self-evident. The consummate incentive travel expert knows the world as well as most people know their living room and knows not only the topography, the major points of visual interest and the capital, but where the water is and whether it’s drinkable or swimmable. Enough said.
Business
I’ve left the most important element for last in the hope that it will linger the longest in the reader’s mind. The most common misconception about incentive travel — and the one that does the most damage — is that we are in the business of running “trips.” We are not.
We are in the business of helping corporate marketers reach their business objectives. And to do that, the incentive creator must first understand enough about his or his client’s business — its style, product, goals — to create a program that is a sound business proposition. To survive, the incentive creator must be a pragmatic business pro.
The Challenge
Incentive travel, as the Society of Incentive Travel Executives defines it, is “a modern manage-ment tool used to achieve extra-ordinary goals by awarding participants a travel award upon their attainment of their share of the uncommon goals.” It is a basic tenet of the free enterprise system that the greater the effort, the greater the reward. The key words in the SITE definition are “extraordinary” and “uncommon.” One doesn’t earn the extraordinary for doing the common.
Quality control people are expected to control product quality. Accountants are expected to keep the books properly. And salespeople are supposed to sell, to meet set quotas.
People get paid to perform these tasks to measured standards. How, then, do we help people to overachieve, to extend themselves well beyond usual standards? The answer lies in the human psyche. We work for money, of course, but there live in each of us two human drives that, combined, explain why incentive travel works.
The first is the need for applause, the need to feel appreciated by our employers and admired by our peers.The second motivator is the desire to travel, to see strange, new places. When you take your overachievers away to a distant place for the purpose of applauding them, you have married the dual needs for self-esteem and self-actualization … and have created the most powerful, inspirational force of all.
Your company can set goals for its people well above the norm of expected performance by saying to them, “Achieve your goal and we will take you away for the travel experience of a lifetime.” This motivator is usually directed at sales personnel, but is increasingly being applied to non-sales employees to motivate them to achieve quantifiable goals such as improved productivity, quality and cost control.
You’ll note that I didn’t say that the overachievers “win” a trip. They don’t “win” anything; they earn it, through their efforts. And it’s not a “trip” they earn, but a travel experience. After all, if you ask a salesperson to work smarter or harder, or both, you can’t reward the effort with a week in the Caribbean that they see advertised in the New York Times for $499. When I say, “an extraordinary travel experience,” I mean a program so extraordinary that participants couldn’t duplicate it, no matter how much money they had to spend.
This may be a tall order, but it is the reason why incentive travel has worked to move billions of dollars of products for thousands of corporations across the country. It’s the very reason that incentive travel challenges the mind as no other profession does.