0

How to Generate Excitement using Emails

Sarah prepares to launch her new course about how to become and remain healthy through diet.  She has a list of potential customers but they have not made this commitment before and so she worries they won’t respond to her emails.  How can she generate excitement through her emails?

Sarah uses OVO email strategies.  She understands people who are interested opt into her list.  She sends regular emails that share advice about healthy diets.   Now she wants to make an offer and she needs to communicate its value to them.

This post focuses on the content of the emails.  The subject line is integral to the success of this strategy.  A good subject line increases excitement and encourages people to open the emails.  So think about spending 10 minutes at least on the subject line for key emails. 

Tension Builds Attention

Let’s start with Value emails, they build reputation and so don’t aim to make direct sales.  Don’t promote specific offers all the time.  These emails serve some specific purposes:

When someone opens your email, how do you get them to read on?  The most effective way is through a story.  In early sentences, build tension, resolved at the end of your email.  In between you can break off your story for teaching.  Finish with a call to action, perhaps encourage readers to click on a link.  For example, Sarah could finish with a link to a recipe on her website.  These could be coupled with low-end offers during the times when she’s not running a campaign.

Use Anticipation to Generate Excitement

When people open and read emails through to the end, the next step is to build anticipation between emails.  Release three emails that build on a theme and then a fourth that makes a big offer.

These 4 emails taken together are similar to a long sales letter.  Plan them together as such.  Sometimes they are called a sideways sales letter.  The call to action of the first builds anticipation for the second, the second for the third.  The third builds anticipation for the offer so recipients look forward to your offer email, if only to see what your offer is.

There are many ways to do this.  Videos are perhaps most effective.  A 10 minute (maximum) video offers immediate value and raises anticipation.  The content is mostly teaching with a story arc that builds anticipation.

Why Do Prospects Respond?

A lot depends on your offer, so focus on offering something people really value.  What do your prospects find valuable?  Prices should reflect value to the customer.  They buy if they perceive the price to be less than the value of the product to them.

Most marketers suggest you consider these other factors.  Some are introduced by you and some are there anyway.

Scarcity

… helps if you sell something genuinely scarce.  It is unlikely to convince with online products but may apply to physical products.  Applies where events have maximum seating capacity or offers include one-to-one coaching, where you are limited by capacity.  It may be possible to argue an online course has limited seats, if you offer personal feedback short of one-to-one coaching.       

Time limits

… similar argument applies.  Don’t impose artificial deadlines.  An invite to an event is a good example, it has to be on a certain date.  This may work for online courses where there is live input from you, so you need people on board from the start. 

Guarantees

… may help, especially where prospects don’t know you.  A simple refund is all you need.  Some offers promise a refund up to 30 days.  These are rarely activated.  If they are, honour the promise without question and with grace so you can find out more about the reason.  It’s not worth offering guarantees with low-end products.  Be open to occasional expressions of dissatisfaction.  If someone made a genuine mistake with the purchase, then make a refund.  Don’t feel obliged to refund people who don’t turn up for live events.  Most understand this payment should be written off.  If someone made a genuine mistake, offer them an upsell with the original payment as a discount!

Bonuses

… are additional offers attached to the main.  It helps if they are relevant to the offer.  Sarah could offer access to her collection of recipes, for example.  If you use affiliate marketing, your affiliates may offer bonuses too.  Probably less effective with low-end offers, although you could bundle a few things to sell at a low price. 

Endorsements or Testimonials

… show how others value your products.  Endorsements come from recognised experts in your field.  If you use affiliate marketing, they could be affiliates but in any event they are recognised for their authority.  Testimonials are from previous customers who have experienced your work.

Offering real value at each stage is key.  This means commit to educational content readers can implement immediately but leaves them wanting to know more.  We’ll look at this in depth next time.

2

What Is a Story?

What is a Story?  I walked yesterday from my home in Sheffield to a meeting in Rotherham and back again.  A total of about 15 miles.  The route is particularly pleasant, along the canal.  It’s flat, a narrow corridor of trees and flowers between roads and industry.  There’s even a very small farm that reminds me of a child’s model!

One thing I noticed was the intensity of colours.  This time of year (early May) leaves are recently in bud and there’s lots of new flowers.  May blossom opens, dandelions bright yellow and forget-me-nots – deep blue.  In some sections the dandelions are a riot of yellow and in others spent, clocks, always something of a disappointment.

Walking for Health and Solitude

I see these things with fresh eyes. I’m aware of my age and whilst I could easily have another 20 years, my chances are not what they were when I was younger.  I’ve adjusted my daily routine to walk for health reasons and I enjoy walking.  My doctor, when I was first diagnosed with diabetes, recommended diet.  “If it tastes sweet, don’t eat it”, he said.  I lost about a third of my body weight because I found his advice worked for me.  (He didn’t remember it!)  Diet is how you lose weight, walking, any exercise, keeps you healthy.

Not just the changing scene and the details I note but also the sensation of walking is a pleasure, even when I tire, it is no problem keeping going.  It is an opportunity to ponder, to solve problems.  Work overwhelms when close up, to walk builds perspective and works out priorities. 

My chosen arena for walking is the city.  I enjoy the changing scenery, with the seasons and the time of day; changes I suspect many miss.  I know many lesser known by-ways and how long it takes to walk to destinations across the city. 

We all need times of solitude.  Some people sit still and meditate.  I’ve always found that difficult.  For me it is the rhythm of walking that moves me to that state.  Maybe it works for you too.

Story as Artefact

Keeping to the theme of aging, I used last time.  This time I have taken a recent experience, it happened yesterday at the time of writing.  Look closely at this story.  What happened?  I walked to Rotherham and back.

You could argue this is not a proper story.  It lacks transformation.  The journey and return did not bring about change.  But look more closely, there is a deeper story about my experience of aging and how I respond to it.

Instead of telling how I responded to the diagnosis by taking up walking, I rooted the story in present experience.  That sense of immediacy gives the story a different perspective from an account of my medical history.    Could I say more about the amusing conversation with my doctor?  Perhaps.

But let’s take a step back.  I started with the recent experience of a long walk, aiming to build on the theme from last week.  Note I set out to tell a story that aims to do certain things.  It picks up the theme of aging and illustrates the idea of immediacy, telling the story from the present.

I didn’t think about aging as I walked yesterday.  It is a theme I have superimposed on a recent experience.  This is an important point.  All storytelling is artificial.  It has to be.  You use the story to make a point that captures attention and is likely to be remembered.

Reproducing Experience

You cannot fully reproduce an experience.  Many life experiences unfold over weeks, months or years.  With 10 minutes tops to tell the story, you leave out most of it.

Emotional impact is even more troubling.  Your audience cannot possibly experience what you experienced.  If your story is about depression, for example, no-one can share months of suffering, not even remotely.  So, what do you want them to experience?

Stories are about transformation, overcoming adversity.  Your story is not about depression so much as what changed to bring you out of it and to the point where you can share the story.  They cannot feel how you felt so you help them feel something else. 

 No Story has a Purpose

This is the beauty of storytelling.  Our lives are full of events and mostly they are meaningless until we give them meaning.  You tell a story to make a point by introducing meaning to the raw material. If you get them to work together, you have a story.

Stories amuse, entertain and make a point.  Sometimes the point is from time immemorial or we retell with a different aim in mind.  Sometimes we start with something fresh and uncover meaning as we work on it. 

No story has a purpose.  You have a purpose telling the story.  The purpose makes the story compelling.  Indeed, your purpose makes the story.  There are loads of possible purposes and we’ll look at some next time.

0

How to Use Email to Explain Your Business Why

Sarah communicates with potential customers by explaining why she is in business as a nutritionist.  She knows the value of why she is in business but sometimes it’s hard to explain her business why clearly. 

Why Explain Your Why?

It helps people decide to use your services.  Chances are other businesses offer something similar to yours.  It matters little whether they are better or worse.  Someone who has not used your services has no way to assess your business and few customers buy similar things from more than one business to track differences. 

The challenge is to to attract customers by explaining why you do what you do.  Many marketers believe it is your why that sells.  Let’s consider two things similar to your why and how they fall short.

How You Work

You invest many hours and a small fortune getting qualified and so the temptation to explain how you work is hard to resist.  Some prospects want this information but only when they are close to a decision.  A case study is a good story-type that shows exactly how you work.

However, most prospects are not particularly interested in how you work, until they experience it directly.  Even then, they’re not necessarily interested in detail.  You might lead guided mediations.  Does it add anything to know your guided mediations are informed by neuro-linguistic programming?

Transformation

A more common mistake is to confuse the change you want to see with your why.  The problem here is the transformation you want to see is likely to be shared with near competitors.  I may totally agree with your aspirations and want to support them.  But if there are three others in the room who advocate the same transformation, how do I choose between you?

Your Business Why

Your Why distinguishes you from your competitors.  It helps prospects choose you.  Chances are when people hear your personal story, some like what they hear and others don’t.  The former are prospects.  The rest choose your competitors. 

Your why, therefore, means you don’t have to indulge in cutthroat competition.  You position yourself as a person some get on with and others don’t.  Does this mean you inevitably lose those who don’t find your story attractive?

Maybe not.  If you are good at telling a compelling story, you are likely to have clarity on your side.  And clarity sells.

Using Email to Communicate Your Business Why

In OVO marketing, use V for Value to communicate your why.  You discuss the transformation you want to see but explain why you got there.  Why do you think this change is important?  You may have a lifetime’s worth of experience of the change you want to see, positive and negative. 

Use emails to tell stories.  Bring each story to a conclusion that illustrates your why and points to the change you want to see.  It is not solely knowing what to do by way of solving the problem, prospects want to see you understand the problem.  Your first task is to recruit them to your cause, so they are keen to support it. 

Do this on social media but email is more effective because it addresses a supportive audience.  There is no need to fear unsubscribes, they are people who are not listening.  They make space for new people who want to hear your take on the problem.

One important key is to pay attention to the end of your stories.  Do they clearly make a point and lead to a call to action?  An ending that fizzles out in some joke or undermines great teaching in the middle of the story, is unlikely to be effective.  The best stories generate excitement, so how do you do that?

0

Why Tell Stories?

Why tell stories?  My grandmother, when she was 90, told me that although she was 100 years old (she was a bit confused), she felt as she did in her twenties.  Now that I’m significantly closer to her age at that time, I know what she means.

Someone said that at the age of 60, it feels like you’re eating breakfast every 15 minutes.  Aging is not so much becoming a different person, as finding new perspectives.  Personal development is still important but I’m no longer doing it to set myself up for a lifetime’s work. 

It is easy for the young to mock the old, at least in modern Western culture.  I don’t find wisdom comes with age, I still make the same mistakes.  But older people are survivors – to put it bluntly I’ve had 60+ years, will you?

Why Tell Stories?

Was that a story?  Or polemic?  Did it make you smile?  Were you moved?  Did you want to argue the points I made?

The first three paragraphs are copy.  They open with an anecdote and then expand on the theme of aging, something currently buzzing around my mind. If I developed this as a story, I would seek more to further illustrate these points.  Ideally, I’d replace these paragraphs with a story, moving into teaching towards the end.

Would a story about aging work better than the opening of this post?  Why should a story be more effective than reasoned argument?

Connection

Sharing stories helps connect with others at a deeper level.  We all tell stories.  Enter a business network meeting 10 minutes before it starts.  What are the chances you tell someone a story in that 10 minutes?  Or someone tells you a story?

Pretty high!  We do it to connect with others and it works formally too.  For people to know like and trust you, they must hear your stories.  We know this instinctively, although we are not necessarily good at it.  Asking someone what they do is safe but unlikely to trigger a compelling story.

It doesn’t matter what your story is about.  Inveighing at the traffic driving in, may find common ground.  Or your experience of teenage boredom in a rural setting.  Your first kiss or loss of a parent may be riskier.  They’re all common ground and maybe someone needs to hear those stories.

Attention

Connection means someone knows you and wants to know more.  You have their attention.  Stories capture attention because you want to know what happens next.  If you capture and hold attention, in speech or writing, your audience will understand what you do and may help you towards your goals.

Stories sell!  Sometimes the right story told to the right audience in the right way leads to sales, even before you say what you’re selling!  Sales sometimes feel as if you’re being hit by a rubber mallet.  Your choices are to run away or buy in order to stop the mallet.  Hear the right story and you’ll buy the mallet!

Inform

Stories communicate information.  If someone remembers a story, they remember the lessons within it.  Speakers’ notes help, so long as someone remembers to look at them or remembers enough of your talk to interpret them.  A story with key points is far easier to remember.

Imagine you project a graph that supports your argument, onto a screen.  You must interpret the graph.  Don’t project a graph and leave it to your audience to interpret it.  They will, if they are awake but not necessarily how you want them to! Offer a story they can use to explain the graph.

Inspire

Stories have emotional impact.  They move audiences to tears or laughter or amazement or enthusiasm. 

None of this matters if emotional change is not matched by action.  The call to action at the end of a story specifies what you want your audience to do.  They do it if they are moved by your story.

So, that’s why we tell stories but what is a story? This is the first post in the sequence, “The Art of Telling”, wherein I share ideas about how to craft a good story

0

Email Strategies for Product and Service Design

Sarah has sold a new online product.  She wrote a pdf about how to diet and offered it to her list for £10.  Up to now she’s offered coaching and workshops; she never thought people would buy something she had written!  Her customers were mainly people who opened her emails and so she could see her OVO strategy had paid off.  This is a low end sale but now Sarah thinks she may be able to sell an online course.  But she needs ideas for product and service design.  What else can she sell and how?

Compatibility

You can sell almost anything online.  It does not need to be an online product or service.  Here are a few guidelines:

1. Build relationships of trust using email and sell on your website.  Most people get that if they follow the link, you offer them something. 
2. Explain what will happen.  Paying online and being left with uncertainty is not a positive experience.  Deliver online products immediately.  Online services may be slower, eg a webinar will be on a specific day.  Offline products and services require time for delivery.
3. Work out what the customer needs to know before paying and what they need afterwards.  For example, if it takes 5 working days to deliver, say so on the sales page.  Say the same again on the thank you page and what to do if nothing turns up! 
4. Ask for feedback on the offer itself and its delivery – find out about the customer’s experience.
5. When you record a negative experience, work out how to compensate the customer, commensurate with the inconvenience they suffered.  How can you mitigate this for future customers?

Online Products

These are easiest. You set them up and people download or access a members’ site, immediately on payment.  Drip-feed teaching material into a members’ site but immediate access and something to do before the start of the programme reassures.  Reward their enthusiasm immediately.

Introduce a bonus; something extra with a download or on a members’ site.  Perhaps not essential for a low-end product but always worth considering.

Consider an upsell.  “If you like this pdf, why not buy this online course?”  Offer an upsell at the time of purchase, the end of a course or after downloading a pdf.  Try something like: “Give me feedback on this product and I’ll offer something else at reduced cost”.  The customer has bought from you and so may be ready to buy again.  If you have something substantially bigger in mind – ask if they would like more about the topic and send them a sequence of emails, ending with an offer of the bigger product.

Examples of online sales includes pdfs, videos, podcasts, email sequences, webinars, online courses, access to an online community.

Online Services

These are likely to be more personal and so higher end products.  They may include online coaching, group work, masterminds.  The more personal the contact, the more you charge.

It is better to be paid up-front. There’s little point receiving payment for one session, when you need several to achieve the desired goal.  As soon as someone makes a payment, give them something.  You might have some teaching material and access to it could be a bonus (announced in advance).  Or give the customer something to prepare for the first meeting.  Book the date and time for the first session at the time of registration.  Book further meetings later but have the first in place at least.  This not only reassures the new customer but gives them a goal to prepare for.

Offline Services

These are similar to online services, the main difference is meeting face to face.  Communicate and provide preparatory material online.  This applies equally whether you supply coaching, workshops or training.

Offline Products

Perhaps most challenging because you need to package things and put them in the post. 

Let’s start with digital products.  Why don’t you provide these as a download?  You can prepare a course for DVD, to be copied and packed by a supplier.  When the customer signs up, the supplier receives the order, produces the product, packs and mails it.

The alternative is to do it yourself and this could become labour intensive unless you have loads of willing helpers who don’t make mistakes.  There are online suppliers who can help, so make enquiries.

Email Strategies Product and Service Design

Delivery may be offline but you can sell almost anything online.  The key is grow and market to your list.  When you make new contacts, get them to sign up to your list.  How can you use it?

Marketing

The basic OVO strategy is foundation for marketing. From there, design product launches and other ways to bring your list to sales.  The basic structure is simple but you must design the details.  Some say give away up to 80% of your content and people buy the last 20%.  I’m not convinced this is true.  Is it particularly important what % of what you know is given away?  Mostly people need help implementing what they already know.  They save a lot of time working with you to develop their systems. 

Testing New Ideas

If you have a new idea, test it on your list.  Testing is not necessarily producing a prototype.  You could ask if anyone is interested in your idea.  Possibly a few people who respond and say “Yes, it’s a good idea” is enough.  Other possibilities include the seed launch, where customers pay to help you develop a new product and receive a copy, at the end in return for their support.

Ordering Products

Working out how much sales copy to feature in your emails and how much on your website is one of the tasks in designing your funnel.  Once you have a customer, you have someone who may respond to new offers.  Otherwise spend time offering value, to help customers make a purchase.  It helps when you know your offer sells offline; if you have sold it face to face, you have some idea how to sell it online.  The only way to make a sale is to make an offer.

This brings the focus back to Value, the V in OVO.  This is where you make a big difference by explaining your why.  How?  That’s my next topic.

0

Entrepreneur or Artist?

This is an addendum to the sequence of posts about failure.  It’s not really a reason for failure but this misconception may lead to failure, where we make wrong assumptions. 

I am indebted to Megan Macedo for the distinction between entrepreneur and artist – they are her designations.  I’m not sure artist is the right word because you do not need to be an artist to own that business type. 

Entrepreneur or Artist?

These designate two types of business.  One focuses on the game of business, using money to make change.  The other makes change by building a body of work. 

It is easy to be partisan or disparaging.  If you are an entrepreneur, you have a real business.  If you are an artist, you have a job – or to be kinder, a vocation.

Both are valid businesses.  Both make or lose money.  You can move between them – or even practice them at the same time! 

However, most business support books or websites assume business is entrepreneurial.  They ignore artistic or vocational business. 

Let’s go deeper.

The Entrepreneur

It is tempting to think of the entrepreneur, obsessed with making money.  Text books suggest this is so.  We know 1% salt away billions of pounds and sling their weight around the political world because they have a route to unaccountable power.  All this is misleading.  We should not allow bad apples to define the terms of debate.

It is not disparaging to say the entrepreneur plays the game of business.  Entrepreneurs identify something needed and develop a structure to provide it.   Big business is big because only an organisation that size can solve a particular problem. 

The entrepreneur is good at building organisations.  What the organisation does is less important.  If I build a business with 250 employees that makes steel, I can build a similar organisation with 250 employees that makes pork pies! 

The Entrepreneur chooses what they do.  I might build a steel maker’s but as a vegetarian I may be less keen on pork pies.  It’s my choice.  However, I need never actually make any steel or pork pies – I manage the people who do that – or employ someone to do that, while I build the next business.

Their focus is on capacity.  Once the entrepreneur finds something to market and sell, they focus on building capacity.  This is the move from early adopters to mainstream.

Generally, entrepreneurs have potential to move to 6 or 7-figure turnover.  This is largely about capacity.  Artists certainly make profit but usually with limited capacity.

The distinction is not about ethics.  Perhaps it is easier for the entrepreneur to lose sight of the ethical implications of their business but there is no intrinsic reason to suppose they lack ethical motivation.  They focus on getting something to happen.  The Retail Co-operatives were entrepreneurial, whilst the 1% are often not at all entrepreneurial because they take finance from the economy. 

The Artist

This includes business-owners who are artists plus many more.  Anyone who works hands-on to build a body of work, falls into this category.  This includes coaches and professional firms.

Vocational business-owners may need to build capacity but they are not interested in building a business.  They may employ a few people but they do so to create the space wherein they follow their own interests. 

Capacity is important because they must make profit to carry on the work.  Some make significant profit but love for the work and not money motivates them.  Some may invest profits to generate passive income.  Again the reason is to enable the work.

It is tempting to put these business-owners on a pedestal.  However, the negative side is where they focus on doing what satisfies them and lose sight of their market.  Where their interests coincide with their market’s, they are immensely effective.  Some spend years seeking something that resonates, lines up their interests with their market’s.

Perhaps most businesses are this type in the early stages.  The entrepreneur tries something new and experiments in this space.  The distinction is the artist seeks something that gives them direct personal satisfaction, the entrepreneur delivers something profitable to a market. 

Telling Their Story

Both types tell a story.  They have a different understanding and uses for money.  Text books assume the artist is the precursor to the entrepreneur but for many the work is the goal and they seek ingenious means to get there.  The progression to a full business by building capacity is simply one option that requires specific interests and skills.

They share the need to build a market that knows likes and trusts them.  To do this they must understand their own business stance and tell a business origin story that does justice to their motivations as business people.

However, little attention is given to the artist.  They are told they don’t have a business, they have a job.  They have to work round the clock to make money because they do not build the business structures they need to enable the work they love to flourish.

The truth is both types struggle with business.  They have distinct goals.  What happens when they work together?

0

Why Design an Email Marketing Strategy?

Sarah made a massive breakthrough when she understood how email structured her marketing strategy.  Like many others, she assumed email is out of date.  She had an account flooded by promotional emails but kept it going as a means of communication until she designed her email marketing strategy.

Sarah reads very few promotional emails and spends more time deleting them. What made the ones she read stand out from the others?  They were informative, interesting and entertaining.  Why did these writers rarely attempt a sale?  Sarah probed further and reached conclusions like these:

Inexpensive

You can spend a lot of money on social media, buying ads.  This is not a bad thing, so long as the ads open up new leads.  But what happens to those leads?  You need a strategy to hold the interest of people who express opt-in.  Even if they make a purchase directly as a result of the ad, what happens next?  Satisfied customers may buy again but only if you build a relationship with them.

Email marketing helps structure your business with a small financial investment.  The only payment you need is to your email service.  You have an email account in any event, so there is no extra charge there.  If you use MailChimp, you get a free service for up to 2000 email addresses.  Note, the offer is limited and you may need to pay for some services.

You can’t do as much with an email service as you can with Customer Relations Management (CRM) software but you can do a lot and CRM too early maybe a waste.  Find out the limitations of your email service and then seek out what you need.

Scalable

With an email service, it makes little difference whether you have 100 or 10 000 addresses, apart from higher fees.  Many businesses boast about the size of their lists but quality is more important than quality.  What you need is warm supporters, not cold leads.  100 warm supporters may bring more business than 10 000 cold leads, who lost interest months ago.  Track who opens emails and follows links, to periodically cull your list, especially if the cull reduces email service fees. 

Segment your list.  The email service automatically segments your list, eg by marking new additions, those who open emails, etc.  Manually tag email addresses to record where they came from, their interests, past purchases, etc.  With a bigger list, you rarely send the same email to everyone.  You can write an email for any segment.

Systematic

This enables you to systematise marketing.  You know where everyone is in your sales funnel and whether they have made a purchase. 

As you grow your list, work out your main sources of new members.  Tag new members and decide what contact you want with new members.  Consider an autoresponder email sequence to introduce them to your business. 

Send emails regularly, so your list don’t forget you.  Even a deleted email fulfils that purpose.  At least one email a week helps keep people aware.  If it contains quality content, the chances are some will habitually open them.  Then, when you make an offer, include a link to the offer on your website. 

Segmentation helps you make targeted offers.  You may offer reduced prices to previous customers, for example.

Flexible

With an email strategy, integrate other online or offline facilities into your marketing strategy.  Sources of new list members might be social media, PPC, business networking, SEO via your website, manually entered.  This way everything you do integrates into your email strategy.  If something goes wrong with one source of new prospects, concentrate on others until you fix the problem. 

Knowing what you seek means you switch to new methods with ease.   There’s no prescription for exactly what you do.  Every business is different. Once you understand the basics, develop your own approach.

And that’s not all!  Email strategy includes design of products and services.  I’ll show you how next time!

0

Businesses Die through Financial Mismanagement

We’ve travelled a long way, exploring why businesses fail and this 15th is enough doom and gloom!  We can be certain many businesses will discover new reasons for failure.  I’ve left the most severe and possibly most common to last – financial mismanagement. 

Financial Mismanagement is not about poor sales.  I’ve dealt with that in previous posts.  Mismanagement is about what you do with money, once you have it. 

Here are three issues – there are more – be alert to them by getting an accountant to help manage finances.  Indeed the usual warning applies, get professional advice.  Don’t rely on this blog post or any other!

Debt

Manage your debts.  There are two types, unplanned and planned. 

With unplanned debt, your outgoings exceed income and you have no reserves.  With an unsustainable business it is illegal to trade without reserves.  Can you reduce costs, increase sales or take out a loan?  The last option is advisable only where you see a way out of the problem because the loan adds to outgoings. 

Planned debt is where you borrow on the strength of a business plan.  This is a better way to manage a debt, not a last minute panic.  However, planned debt is still debt, so take this route with a strong business plan and an accountant to guide you.

Cash Flow

This is similar to debt when your costs are greater than income.  If you are cushioned by reserves, it is good but what happens if you inadvertently cross zero? 

You need financial information to see ahead and predict times when your financial situation is squeezed.  If you see a problem coming up, you can do something about it in advance.

If your business is complex, you need management accounts and your accountant should prepare them and advise you of steps to be taken.  However, some accountants are compliance accountants, who focus on historic records and don’t make projections.  Management accounts focus on the future for your benefit, compliance accounts focus on the past for the benefit of others. 

Compliance accounting is important and benefits your business too.  It is about accountability and shows the world you have a record of being solvent and can account for income and expenditure.

Compliance

Compliance can threaten your business.  It is where you must meet a standard imposed from outside your business.  You can be fined substantial amounts or put out of business for wilful or accidental failure to comply. 

There are four main sources of compliance.  The first two are voluntary, if you join in you must comply to get the benefits.  The third applies to all businesses.  The fourth is compulsory under certain conditions and woe betide if you meet those conditions and fail to comply.  They are in order of increasing severity.

Charity Commission

Few businesses have charitable status.  Most that do are social enterprises and some charities trade and so have a lot in common with businesses.  You comply by filing annual accounts.  Specific regulations apply to charities and independent examination of accounts before they are filed should cover that.

Companies House

If you are a company, you must do a bit more.  Annual accounts must be filed, along with annual returns, information about who controls the company. 

The annual accounts are subjected to independent examination.  This does not have to be a full audit, if your turnover is low.  The difference between an examination and an audit is the auditor is insured.  If they make a mistake, this means compensation is available. 

Inland Revenue

Fill in tax returns yourself or with assistance from your accountant.  If you make a mistake with the first two sources of complience, you pay a fine.  You also pay a fine if you make mistakes with the Inland Revenue.  The rules are complex and so an accountant is your best option if your business is any significant size.

Customs and Excise

This one sinks businesses.  If turnover exceeds a certain amount, you must charge VAT.  Failure to do so will sink your business.  This is the most dangerous source of compliance, if only because it is easy to be caught out.  The threshold is fairly high and so many businesses do well without crossing it.  But as you approach it, your accountant should point out when it is time to register. 

That’s it!  15 ways to fail.  Take your pick!  The truth is though, many businesses do well because it’s not too difficult to take precautions and avoid obvious pitfalls.  I’ll deal with one final issue that’s worth noting next week.

0

How Email Lists Help with Compliance

Sarah has spent all morning making her website GDPR compliant.  She is frustrated because she could be doing other stuff.  She is irritated by pop-up banners informing her of cookies and endless emails telling her about new privacy policies.  Is this stuff really necessary for compliance?

Here are three points to guide thinking on this issue.

1. I am not an expert in the relevant legislation.  What follows are guidelines. It is always your responsibility to be sure about the law as it applies to your business.  If in doubt, take legal advice.
2. Most legislation is based on courtesy.  We don’t talk much about courtesy these days but if you think discourtesy is the way forward for your business, be my guest.
3. Most issues you are likely encounter are covered by your email service.  This is why you should use them.   Follow their advice and you won’t go far wrong.

Privacy

Keep only information you need to run your business.  Inform people you keep information about them and supply them with it if they ask you.

If they opt into your email list, they know about it.  Double opt-in, where they confirm by clicking on a link in an email protects against third parties entering names maliciously.  For this reason you don’t need it for entries you make yourself.  Simply make sure the person whose details you enter knows you have done it.

If you use cookies, you need a discrete mention somewhere on your site.  I’d put in in the footer if I needed it.  You could mention it alongside the link to your privacy policy.  Most people don’t care you have these but should be able to find them.  The footer is an obvious place to look, so put it there!

Dishonesty

You don’t intend to defraud customers.  Do your best and you won’t go far wrong.  The legislation is not aimed at honest businesses.  However, good intentions don’t exempt you from following the law.  It does not look good if your attitude to compliance is sloppy. 

Comply with the jurisdiction you are under and the jurisdictions your customers are under.  This is why you sometimes need legal advice. 

If you are reported, you are likely to be informed of where you are alleged not to comply.  Fix the problem.  Show due diligence and you should not be in serious trouble.  We get pop-ups and emails informing us of compliance, because businesses want to be seen to be compliant but is this strictly necessary?

Complaints Procedures

Not every business needs a complaints procedure but it is worth considering if you have a lot of customers and several staff serve them.  It shows you have a positive attitude towards complaints and means initial complaints are likely to come to you instead of to authorities or social media. 

Most complaints are not really complaints.  A customer or follower sees something that needs fixing and points it out to you.  They are actually doing you a favour by providing feedback. 

Investigate and identify the problem.  Then inform the person who complained, by when you intend to fix the problem.  If you fail to fix it by that time, then the complainant has grounds to take their complaint further.

But even so, mitigate the problem by communicating.  Let them know you’re onto it if you pass the deadline.  Explain why you have not met it, tell them what you are doing and set a new deadline – hopefully by this stage you have a more realistic understanding of the problem.

Larger businesses who receive many complaints, publish their results.  In some businesses complaints are inevitable, eg housing associations, where the leaky gutter is not really a complaint, it informs the organisation of something that needs fixing.

If you are unresponsive, you appear unprofessional and this works against you.  Think strategically and turn negative complaints into positives.  Email marketing should be the backbone of strategic thinking and we shall turn to that next time.

0

Why Business is Not About Quality

Perfection is a theological virtue and nothing to do with reality.  Yet, many business owners are plagued with perfection.  They call it quality and when quality is absolute, you are in trouble.

Quality and Quantity

Quantity is measurable and if it is relevant and measurable, you should measure it.  There may be cost implications but think of the advantages. You:

Quality is impossible to measure.  Every practice is open to improvement.  You sell the best there is but there is no guarantee it cannot be improved. Someone may find a better solution and topple your dominant position.

But a superior product is no guarantee of success.  The history of marketing is full of competition where a poor product won out over its superior.

Quality is important. No-one knowingly buys a poor product or service. Taken to extremes, quality is problematic because: 

The Best Thing in the World

A well-known cartoon in marketing circles shows a row of pizza shops.  The first has a sign outside: “The best pizza in this district”, the next reads “The best pizza in this city”, the next “The best pizza in this country”, then “The best pizza in the world”.  The final shop has a long queue outside and the sign reads: “The best pizza on this block”.

Your thing may be the best in the world but that is no guarantee it sells.  There’s little advantage to the best in the world.  Why?  People do not always base their choice on quality.  They want to know whether they can trust you.  This is not about honesty so much as compatibility.  Can you work together? 

I’m not saying sell substandard goods.  Quality is important so long as you don’t take it to extremes.  Other things matter too when you make a sale.

The Best is the Enemy of the Good

When something is good enough, get it out there.  You don’t know how to make it better until you test it and get feedback.  All the improvements you make before you launch are tinkering with something you don’t even know sells.

The issue is not quality so much as confidence.  If you are confident in your ability, then you don’t worry about your capacity to improve with feedback. 

Receive complaints graciously and gratefully.  Reply as quickly as possible and thank the person who complained.  Explain the steps you intend and how long it will take to make them.  This is a new promise and the customer has grounds for complaint if you don’t meet your deadline.  So, keep channels of communication open. 

When someone makes an initial complaint they draw your attention to something that needs fixing.  If you vanish or avoid the issue you appear to be dishonest and create anxiety. 

They say the customer is always right.  However, customers can be unreasonable.  Don’t assume their expectations are realistic.  You may need a new deal but occasionally, a refund and removal from your list may be the best course of action.

Fixation on quality undermines your business.  It distracts from more important issues.  The final post for now about reasons for business failure is financial mismanagement.