The Small Business Marketing Mistake

I’m the first to admit that you should not price your services to on the WalMart level. Doing so puts you in a mode of competing with other businesses on price. I’m willing to bet that your quality and service is a lot better (or you should want it to be) than your competition.

There's a dry cleaner that has a sign on the wall above the register. Here’s what it says:

1. Quality

2. Service

3. Price

"Pick Two"

It's true, you can't have all three in your business and I don't think you should either.

Keep this formula in mind:

Intention + Mechanism = Results

Let’s view this as a simple math problem. First, determine the results (the phone rings or someone visits your website, etc.). Second, determine your intentions. What do you want to say to your target market? The very last part of marketing is then determining the best mechanism to reach your market.

Contrast that example with what most business owners do...

As a business owner we tend to first focus on the mechanism. We buy an ad somewhere and then we figure out what it's going to say. We sit back and wait to see what results come from it. This is so backwards!

Honestly, think back to your last advertising mistake. I’m willing to bet that someone sold you an ad (mechanism) in the yellow pages, radio, newspaper, magazine, etc. They got you really excited and then asked what you wanted to say (the intention). All you really knew you wanted out of the deal was a few customers, but the results are the last part of your planning process. It’s like throwing a balloon with a marketing message on it into the wind and hoping it lands in your prospects backyard. It won’t happen and that’s why your last marketing venture failed.

Stick with the above formula and you’ll have no more wasted marketing dollars.

The Tax Man Cometh and... Giveth?

April showers bring May flowers – so they say – which gives us something to look forward to. April also ushers in the annual deadline we all love bumping up against. It’s tax time again.

Many of us will receive tax refunds this year. I’m not a huge fan of refunds simply because I want that money in my pocket throughout the year rather than sitting in the government coffers as an interest-free loan. Please recognize that if you divide your refund by 12, that’s how much more you could’ve been bringing home each month last year. We can’t change the past, though, just the future. So what is the best use of those refunds anyway?

Given the pervasive attitude of fear in the economy right now, I imagine some are viewing their refunds as an unexpected boon – kind of like finding a $20 bill in a pants’ pocket that you completely forgot about. Fear is a terrible motivator – often times causing us to make brash decisions without a solid basis in reality. The reality is that we can’t control everything around us, but we must have a plan for what we do have authority over.

Start with a budget for your refund. Of course, you definitely need a monthly budget – where every dollar is spent with purpose before each month begins. Now we’ll create a plan specifically for the tax refund. Take a look at the Seven Financial Freedom Steps.

Do you have a beginner emergency fund? If you don’t have around $1,000 in a savings or money market account, then use your tax refund to open and fund an account like this. There’s no sense in throwing caution to the wind – unexpected expenses happen all the time, it’s called life. Money Magazine tells us that 78% of Americans will have a major negative financial event in any given ten-year period; that’s plenty of reason to be prepared. Likewise, if we’re going to get out of debt for good, we have to stop going into debt for these expenses, which aren't really "unexpected" after all.

Are you aggressively paying off your debt? After you’ve gotten your beginner emergency fund in place, go ahead and pay something off with your tax refund. Believe me, it’s going to feel really good! Use the debt snowball process: list all your debts from smallest to largest, pay minimums on everything except the smallest – throw as much at that one until it’s paid off. After that, move on to the next one and repeat until free of consumer debt.

If you’ve already dumped your consumer debt, find a creative way to give a portion of your refund to help someone else. Use the rest to top off your full emergency fund of three to six months’ expenses, invest toward retirement and your kids’ college, or pay down the principal on your house. The most important thing is to have a plan for this money; without one it’ll sprout legs and wander out the door.

To estimate your 2009 taxes, visit the IRS Withholding Calculator.

Testing Live Streaming of the Radio Show; What do you think?

We're testing and might be rolling this out soon. Is this something you think would be interesting? Please respond and let me know.

http://www.ustream.tv/recorded/1309352

Don't let the Economy Dictate Your Finances

Yes, the economy is changing. Should you be alarmed? Yes and no. If you are reading this and over fifty or sixty years old, you may be seeing your portfolio taking a nose dive to somewhere south of the equator. If that does not scare you I don’t know what will.

Even if you are only thirty or forty years old, a sudden drop in your retirement funds can make the sweat pop up around your eyes. What is a seasoned or new investor to do? The answer: not much.

I for one do not want to live day-to-day with changing rules. I’d be restless all the time and stressed out. The good news is that I have never bought into the world’s economy and I never will. The only economy I invest in is God’s economy, and thankfully, it stays very consistent. 

The rules today are the same as the rules yesterday. Wouldn’t it allow you sleep better at night if you knew that no matter what news was announced in Washington yesterday, the rules of investing and handling your money never changed?

They never change for my family. No matter what happens in the world’s economy the same rules still apply. Getting out of debt and staying debt-free is always a good idea; in a good economy or bad. Investing for the long-term is always a good idea as well.

Never let a few people who did not apply common sense principles to their business practices determine your course of action.

Your Life, 2.0

The world is changing at breakneck speed. If you have not noticed, now is the time to open your eyes to the blazing changes going on all around you. Most of us are walking around with more memory in our pockets today than was used to put the first man on the moon. While you may feel stuck in the same place, it is even more likely that you have actually been going backwards.

To keep up you have to invest in continual learning. Want to find that perfect job? After finding out how God made you, you have to invest in a number of tactics to land that dream career. Gone are the days when you can answer a newspaper ad or ask a friend.

Firstly, if you do not own the number one spot on google when you search your name, you have to do something about it. Nearly every employer does a background check on you. If you sleazy MySpace page comes to the top, you must do something about it.

Purchase the domain name for your name and set up a free website. You will pay a few bucks per year but you have the final say as to what employers and other think about you.

Another free option is to set up a LinkedIn account. Last night I was able to connect with hundreds of the best minds in Raleigh, NC because of LinkedIn. Establish your profile and keep others in touch with what you are doing on a regular basis.

Facebook is a popular application for fun as well as business. Create your profile, link to your website and blog and present something that prospective employers and those wishing to do business with you see as pleasing and worth while. A buying decision, and deciding to hire you for a position is a buying decision, comes down to an emotional and personal connection. I would hire a qualified friend before someone else that is qualified and yet unknown to me.

A blog will keep you in the forefront of your customer’s minds (top-of-mind positioning) if you are in business. An updated blog will also help you stay at the top of the search engines. Did I mention this option is also free?

Twitter is an application for a new generation. Use it to stay in front of your prime audience. If you have an interesting life or do something that your crowd wants to follow, use twitter to stay up-to-date.

If all of this is overwhelming, I agree. It can be very overwhelming, but the decision is not up to you. It is up to your clients and prospective employers. Even if you do not plan to need any of these services in place for a long time, begin now. The longer you have a website in place, the higher it will show in search listings.

Here is the thing with any of these options. If you are going to use them, you must use them well. Keep your profile updated. Your blog should not have a most recent entry of December, 2007.

Do it well or not at all.

My Life Insurance is Killing Me!

Have you ever purchased a life insurance policy? Did you squirm as much as I did when you were filling out the paperwork? Life insurance – like estate planning – forces us to confront our own mortality.

From a sales pitch perspective, life insurance can be a veritable minefield. Imagine a smooth dude in a snappy suit ushering forth a slick line like, “what will your family do if something unexpected happens to you?” Or, “you don’t really want your wife and children to wonder how they’ll make ends meet, do you?” Talk like that can make your skin crawl! Of course we don’t want our families to wonder where their next meal is coming from after we’re gone!

The problem is that many of us make an emotional decision when we buy life insurance and we miss the financial implications. Make no mistake, caring for your family by purchasing good level term life insurance is absolutely essential. However, one of the greatest myths handed down through the insurance world is that the need for life insurance is permanent. From a financial perspective, this couldn’t be further from the truth.

Insurance is a financial tool that allows us to transfer risk. We transfer the risk only while we cannot afford to assume the risk ourselves.

Many insurance salespeople encourage life insurance products that have a cash value savings account built into them. They go by names like whole life, universal life, variable life, and so on. They’re an easy sell because we like the idea of having some of our premiums saved for us to use down the road – you’ll see these policies called “investments.”

Unfortunately, these cash value life insurance policies are very expensive for the consumer. The commissions are huge on these products and the returns on the savings accounts are depressingly low. To make matters worse, because of the expense related to these policies most policy owners don’t realize they’re underinsured. And should they kick the bucket, the beneficiaries only receive the policy’s death benefit – all the saved up cash value is kept by the insurance company.

Good thing we have an alternative! Term life insurance is purchased for a specific period of time. There isn’t a savings account built into the policy and the premiums are kept level throughout the duration of the term. As a result, we get the coverage we need without any of the fees, lackluster savings, and fluff we don’t, so the premiums are super affordable. If we die during the term of that policy the beneficiaries receive exactly what we paid for.

I recommend buying ten times your annual income in good level term life insurance – typically a 20-year term will do. This way, when your beneficiaries invest the death benefit at an average return of 10%, the annual interest will be equivalent to your former annual income. You’ve been replaced…financially speaking.

I’m currently working with a couple who have about $350,000 in universal life insurance coverage. They’re paying around $250 each month in premiums. The problem is that they really need about $650,000 in coverage to be adequately insured. I ran a quote for them to discover they could get two 20-year term policies with the increased coverage for – between both of them – $50 a month. That’s a $200 difference each month! In 20 years, the cash value of their current policy would grow to around $55,000. But if they invested their $200 per month difference over 20 years, they’d have over $173,000! By now the picture is very clear.

See, in 20 years, this couple’s children will be grown and gone. Because they got serious today about developing a plan for success, they will be debt free and will have invested at least 15% of their income for retirement. In 20 years, they’ll have about $650,000 in investable assets. Now, if something happens to the primary income earner those funds can be invested and the surviving spouse can live off the interest. They’ve become self-insured and don’t need life insurance anymore.

For those that currently have cash value policies, don’t run and dump them right away. Be sure to purchase a good term policy first. If for some reason you’re uninsurable, you’ll still have some life insurance available – cash value policies are not ideal, but they’re better than nothing at all.

If all this insurance talk is making your head spin, recognize that by not understanding your policies you could be paying hundreds of dollars every year in unnecessary premiums. On March 24th, we’re holding a Past Due: Insurance eCoaching event covering seven different insurance areas – homeowner’s/renter’s, auto, health, disability, long-term care, identity theft protection, and life. We guarantee you’ll save at least $300 – $800 a year in premiums when you apply what you learn during this program to your current insurance plan. Visit BeyondPastDue.com to register today!

5 Resumes, 4 Job Offers

I taught a class Crosspointe church last night and covered the process for an effective job search.

If you're limiting your job search to internet and newspaper listings you must know that, out of 100 resumes sent, you'll only receive a job offer between 1 and 8 times.

You can still peruse these places for career opportunities, but an effective job search (understanding your personal tendencies, identifying 30-40 target companies, sending an introduction letter, followed by a cover letter and resume a few days later and then a phone call follow-up) will land you a job about 86 out of 100 times! I like statistics and those are pretty good odds.