-- Paul Clark, President, Seattle Publishing, Everett, WA

This is really a nice clean newsletter. The precision and clarity of writing appear to reflect substantial experience with the issues you cover - keep up the good work.

Tip of the Week

When an owner asks what the price range of a business should be, I say that most buyers are looking for a return on investment of 20-35% which means they will pay 3-5 times profit (after reasonable owner compensation). Where the price falls within this range, or if it even makes it into this range, depends on the non-financial factors like the employees, management team, customer base, lease, etc.

Break projects down into the tasks, when each is due and what happens if it isn’t met. A motivator (penalty) for those involved will get things done when needed.

We all have scared cows. Within companies there are programs that are sacrosanct and precious to a choice few. It may be the way we deal with processes, employees or even ourselves. Take a hard look and get rid of non-productive one.

You are in a service business. I don't care what you do, who you work for or how you perceive your company, you are in a service business.

The owner can, and should, be a key to closing sales. Even if you, the owner, are not part of the day-to-day sales team, you add important credibility when you visit a prospective customer. It lets them know you value their business.

Your chances of success increase dramatically when you believe that your customer is better off with you or your product than they are without you or your product.

"We'll show you how" is the motto of franchisors. They have a proven plan and will teach it to you if you’ll pay them an upfront fee and a percentage of all your sales. For someone with advanced management skills and independence, a franchise can be stifling.

Your first words are important. The object is to catch the customer off guard. Take them out of their element and get them in a conversation. Build a little rapport so they’ll let you know why they’re there, what problem they need to solve or how your services can benefit them.

When the status quo carries more pain than what you have the customer will buy from you.

Ask for the order. A recent family event left me speechless when the salesperson never asked us to buy. Was it lack of confidence in her product?

Start the year off with a bang. Ignite your sales team. Do what it takes to get them aggressive, productive and results oriented.

The best advice I can give you for the new year is to treat your sales department (whether it's one person or dozens) like it's an independent business. Plan, set goals, determine strategies, have a tactical plan for all team members and implement it aggressively.

Why not review all expenses now. You might be amazed at how some things have crept up since you last did it.

Is your business slow during the holidays? Take the time to get organized so you're more efficient when it picks up again. If you're busy in December, do this in January. 

One would think that in a tough economy customer service would improve. My experiences, the experiences of friends and comments following a recent newspaper article I wrote indicate otherwise. As always, there is plenty of opportunity out there for those who choose to take it.

Research your competition so you know their strengths, weaknesses and how they do business. This allows you to design your marketing plan to capitalize on your strengths.

Selling your business? Due diligence is no time for the buyer to discover anything new. This is a time for the buyer to confirm everything you've already told him or her. Use your prospectus/memorandum to tell everything about the company, both good and bad. That way you control the "spin." Nobody likes last minute surprises.

An owner recently bragged about their five "big" customers, who account for over 50% of annual sales. That's a signal to diversify the customer base. Get your largest customer under 5% of sales.

Knowing your numbers is important. All business owners should know the key elements of their financial statements. Those items that give real insight.

Systems are your "secret sauce." They allow you get more done in a shorter amount of time. The key is to document what works and what doesn't.

Timing can be everything. Part of timing is taking action. By taking action you increase the chances of being in the right place at the right time.

Have a partner or co-owner? Partnerships can be great or your worst nightmare. In any event, have an agreement that spells out how you settle, if the need arises. 

I recently talked to a client with a growing business. He doesn't like it, but he has to put in systems, policies, etc. The goal is to create a fun place to work, but too many people take advantage of it if there is no structure.

There are lots of good opportunities out there. Many business are counter cyclical and many are so strong they do well in all economic climates. Look for a deal if you want a challenge or are willing to bet the economy will rebound soon. 

Make your customers a guarantee they can't resist. If you're truly solving a problem, put your staff, yourself and the company on the line.

Fall is the second "renewal" time of the year (the other is January 2). It's when many companies try for the final push to finish the year strong. Always ask,  if we haven't done it so far this year, why do we expect things to change? Second, you need a plan. Things don't happen on their own. 

Market got you down? Perhaps it's time to own a business if you can't make and save enough to secure your retirement. Why make profits for someone else when you can do it for yourself?

Feel free to share or reproduce the information in these articles and tips (in whole or part) as long as proper mention and copyright notice is given.

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