Monthly Archives: November 2016

0 One-Time, Occasional and Regular Purchases

There are two ways to think about one-time, occasional or regular purchases.  For the purchaser, a one-time purchase may be desirable, buy it and move on.  However, for the vendor, regular purchases are desirable as they guarantee a regular income.

For the Purchaser

One-time Purchases

Often a one-time solution appeals because the purchaser has resolved their problem and won’t need to think about it again.  Almost anything can be a one-time purchase, although they may be infrequent occasional purchases.

Perhaps an example is courses.  People are unlikely to pay for the same course twice.  Someone who markets courses may be able to sell different courses to the same customer but each course is likely to be a one-time purchase.

Occasional Purchases

Occasional purchases are perhaps most common.  Most of what I buy are occasional purchases because I buy them when something runs out or stops working.  Some things run out regularly but in principle I buy them when I remember to and they are not part of my daily routine.

Regular Purchases

Regular purchases are things like subscriptions.  The big advantage is you don’t need to think about them.  You set up a standing order or direct debit and forget about them.  I suppose this also covers routine purchases; “it’s Monday, so I must buy bananas”.  However, routine purchases are more like occasional because in principle I can skip a Monday if I have bananas left over.

For the Vendor

One-time Purchases

For one-time purchasers, think about how to extend your market.  There are two ways to do this.  One is to build your reputation and ask your customers to recommend you to other potential customers.  The other is to make new offers.

Someone selling online courses might do both.  They sell more through marketing, often via past customers, and at other times create new courses that might appeal to past customers.

Occasional Purchases

Occasional purchases are perhaps more of a headache, especially for businesses with few offers.  A supermarket probably benefits primarily from occasional purchases, although some people shop for the same things on the same day each week.

The occasional purchaser needs to be brought back and reminded you exist.  This is fairly easy to do online and emails from businesses who sold us something years ago and still send reminders, plague many of us.

My nephew is or was interested in skateboards and outdoor activities.  I get emails because I purchased relevant presents in the past.

Regular Purchases

The regular purchaser is like gold.  If they sign up to a monthly subscription, however small, it is guaranteed income.  So long as you continue to provide the service, the chances are most people forget about it and continue to subscribe indefinitely.

Your main challenge is to increase the number of subscriptions.  There are some interesting approaches to this but I’ll leave those for another time.

How do you manage your customers’ journeys between one-time, occasional and regular purchasers?

0 How Your Location Benefits Your Business

On Wednesday 9 November, I shall lead the first of a series of 6 workshop in Sheffield, UK.  The series title is ”Shop Local! How to Improve The Local Economy”.  This link will take you to the Eventbrite page where you can register.  In my workshop, “It’s where your feet are: why a sense of place is important for your business”, I shall show how your location benefits business.

I’ve often written about how business contributes to community, helping build sustainable regeneration in our neighbourhoods.  In the workshop I’ll show how support for a locality can benefit your business!  By locality I mean a neighbourhood, city or possibly even a region.  What matters is being grounded somewhere.

Perhaps this is not important for all businesses.  Clearly as businesses grow they naturally loosen their moorings in their community of origin.

The Making of a Ruling Class

Part of the River Tyne, close to the earliest shipbuilding industry. 1681551 / Pixabay

I’ve lost my copy of “The Making of a Ruling Class: Two Centuries of Capital Development on Tyneside”.   Benwell (Newcastle upon Tyne) Community Development Project published it in 1978.  I doubt it is possible to get a copy now, so the link is to a library citation.  What follows is from memory.

The report, one of 12 final reports from Community Development Projects around the country, studies the ruling class.  There are statistical methods for studying poverty and they work because there are many poor people.  It isn’t possible to survey the ruling class statistically and so the report uses genealogies or family histories.

What the Report Says

The major trade in Benwell was ship-building and the housing in the area is at the top of the hill, overlooking the River Tyne.  Most of the terrace housing runs up or down the hill, their windows look along the hill at other houses.  However, a few large houses originally belonged to the families that  founded the ship-building industry and they face the River and the shipyards.  This enabled the owners to keep an eye on their shipyards and so make timely interventions.  I see similar houses in Sheffield overlooking the Lower Don Valley, where the large steelworks used to be.

I’m going to write loosely of generations.  It is possible at each stage several generations passed, the exact timescales may be in the report.  The point is if you follow the genealogies, the same family names appear in the same industries and they inter-marry.  However, their location moves first to market towns in Northumberland, eg Hexham, then to London and now they are distributed in financial centres all over the world.

Presumably, these moves reflect changes in communication.  In the early years, they would walk down the hill, then travel in by car and now use telecommunications.  The same family names persist from generation to generation and from place to place.

Business and Community

Many of us will recognise this happened in our towns and cities.  There is some inevitability about it.  The moves ever further away reflect changes to business contacts and the need to mix with other similar businesses.  For many today, these families will be directors of multi-national corporations.

However, it is not inevitable, many businesses remain rooted in their place and I shall explore their experience in the workshop.  It is not inevitable that a successful business should cease to play a part in its community of origin.  You can trade with anyone in the world these days and it does not necessarily mean you lose your local presence.

But how and when does commitment to a particular place become a liability or irrelevant?  More to the point, is there an advantage for businesses that stay in one place and become central to its economy, building sustainable business relationships?

This is the question my talk will cover, so please go over to Eventbrite Shop Local! page and book a ticket now.  It’s on Wednesday 9 November, 12 noon to 2 at a Sheffield City Centre venue.

0 Your Business Outgoings

Last Wednesday, I described sources of income for your business and this week’s post is about your business outgoings. They can be divided into two main types; your drawings and the costs to your business.

How you manage these depends on how you structure your business.  For example, additional rules apply  for incorporated businesses.

Drawings

Your drawings are the money you spend on your private life so this covers food, housing costs, transport – everything you need to live.

The point to remember is if your business breaks even on costs, it may not break even when you include drawings.  So, it is important to think of your drawings as you would staffing costs.  You need a business plan that takes your drawings into account.

Your business will break even when your income equals or exceeds your business costs plus drawings.

Remember though your drawings are not counted as business costs for tax purposes.

Business Costs

The costs counted for tax purposes depend on the tax legislation local to you.  And it is always best to refer to your tax authorities’ guidelines direct and not through a blog.  Your accountant will do this for you.

So, avoiding the fine detail of your tax returns, how can you decide what makes up the costs of running your business?  You will need to find some or all of what follows to keep your business going, irrespective of whether you can count their cost against tax.

Business Development Costs

These are the direct costs to your business and most people recognise them as legitimate.  They include things like supplies, office costs, staff, marketing, travel and subsistence.  Some trades need special tools, clothing or premises.

In short this category covers everything necessary to actually do the work.  If you are unable to do the work without something, it is a business cost.

Personal Development Costs

These are expenditure on what you need to keep up to date or learn new skills.  They might include books, DVDs, training courses (live or online), coaching.

This may be a grey area but make sure you budget these costs because personal development is essential for all business owners.  It’s all very well arguing you shouldn’t set out in business unless you have the necessary knowledge and skills but in reality, you cannot manage without personal development.

The Case for Self-Development

How much development does anyone need to keep going? It is possible to spend a lot of money on personal development.  Some offers are better than others but commitment to personal development is important and if you can find something that works for you then build on it.

Being in business is about marketing and marketing is primarily educational.  If you are setting out to educate the public, it is important you commit to self-education.  You need to create space for strategic thinking.  Daily pressures of keeping your business going can overwhelm good intentions to do essential thinking.

Some coaches offer not only organised knowledge or tuition in skills but also space to do your thinking.  It introduces accountability.  If you’re paying a coach, it helps to do the work if you want your money’s worth!

Many businesses get stuck because whilst they are able to work in the business, ie delivering their offer, they are poor at working on the elements of the business that will make it work in the market place.

This is why I offer a consultancy to local businesses and organisations, where I help them take their first steps in understanding what is involved in marketing their business.

Can you show how self-development has helped your business?