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MOTHER’S DAY OR ANY OTHER “HOLIDAY” – HOW YOUR BUSINESS CAN HAVE THE ADVANTAGE!

How many businesses do you know that really take advantage of those one off “holiday” days throughout the year like Valentine’s Day, Mother’s Day, Father’s Day, Bonfire night etc.  I hear what you are saying , Valentine’s is only for florists and chocolatiers and maybe lingerie shops, but think again……..you could be missing a trick.  Have you thought about how you could stand out from the crowd in your industry sector and steal an advantage using the “holiday” theme?

Mother’s Day

Let’s think about Mother’s Day for a minute, how could your business benefit and use this event in its marketing.  If you’re a florist, chocolatier it’s very easy to use the theme, and let’s be honest, most mums are relatively easy to buy for on Mother’s Day, beauty treatments, clothes and other gift items, but what if your business is less obviously associated with a holiday, for example if you are a “Boot camp” fitness company, which runs fitness and weight loss camps?

One way would be to run special mother and daughter camps for Mother’s Day and maybe father and son ones for Father’s Day.  This is exactly what the New You Boot camp have done with great success.  Their M.D Jacqui Cleaver thinks outside the box and uses holidays to promote offers and mailings.  Easter last year they sent out mouth-watering high-cocoa chocolate recipes and healthy recipes and as a result saw a boost to bookings.  People saw the value in the recipes, printed them off, put them on the fridge and when friends came round, it started a conversation and word of mouth referrals flowed!  It’s not rocket science, but it does take some thought, imagination and effort.

Valentine’s Day

I’m sure you can think of lots of companies doing special promotions for Valentine’s Day.  Not least the card shops with all those cards gushing with “love” messages and then of course there the usual chocolate hearts and other heart shaped gifts you see in the shops but what about the humble sausage, not something you would automatically associate with Valentine’s Day.  Heck, a family-run business making sausages, is really good at reworking its product.  This year for Valentine’s Day it created a sausage they called “PECK”, which of course was heart shaped and they managed to get it stocked by Waitrose and Tesco and as a result the MD and founder Andrew Keeble said resulted in rocketing sales.  You may remember this company if you watched the Alex Polizzi program a while back when she went in to help turn the fortunes round for the family run business.

Other “Holiday”  Days

Heck amongst others are thinking about their businesses differently, they are taking advantage of other days throughout the year to develop products on a particular theme.  Heck will be bringing out a star shaped sausage for Halloween and bonfire night.

New You Boot camp runs a fitness day in Richmond Park to coincide with Breast Cancer Awareness month and donate the proceeds to cancer charities.

What offers could you introduce for your business for the many “holidays” we have throughout the year like Christmas, Easter, even Wimbledon or rugby world cup.  There are so many events, days and “holidays” that your business could take the lead on and stand out from the crowd.  Even if you are strapped for cash, just repackage an existing product or service offering and just be a little creative.  Most businesses don’t have to do much to stand out from the crowd.

For other great tips and tools to use to make your business the business you always dreamed of grab a free download in pdf form of our book.  “Whats stopping you making your first £million profit?  Grab your copy here

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For more information, blog posts and guides vist our website @  www.kmaaccountancy.co.uk

Enjoy mothers day!!!

Kim

The price is right!

Pricing

Pricing is an area many businesses struggle with. It is part science, part art and part psychology. Confident pricing is as much about how we feel about our business and our product/service, as it is about rules and processes.

Many businesses will stick to a cost plus method of pricing. They will add up all the components of a job and add a percentage for profit – job done (?). However, this approach takes no account of the market in which they are trading or the value of their product/service to the customer.

If you don’t know enough about your market you run the risk of overpricing by using the cost plus pricing method. If other suppliers are providing the same product/service as you and charging less than you, you need to know! If you constantly loose work it may be that you are pitching to the wrong type of customer for you.

Alternatively if you don’t understand the value of your product/service to your customer, you could be regularly underpricing. Take, for example, an instance which happened to me a couple of months ago. We had just had new carpeting through out the upstairs of our house. You know how it is, for a micro second everything looks great until… the cat gets trapped in one of the bedrooms and rips up the carpet in front of the door!

I phoned our lovely carpet guy who came along and patched in some of the offcut left over from the original fitting. He did such a good job that we cannot actually see where the join is. Obviously for me this job had a good deal of value because our carpet is pristine again. But he priced on a cost plus basis and so only charged me £15! He probably left over £80 on the table because the job was worth at least £100 to me.

Now cost plus as a starting point is not bad, because at least you ensure you get the minimum price you need to cover your costs – as long as you have a very good idea what those costs are. But relying on it alone will mean that you undercharge clients for whom the value you provide is more than the costs of providing it (plus profit).

For effective pricing you need to do your homework. You need to understand the market you are in; who your ideal customers are and what they value; and you need to have a very clear idea of what you need to achieve to make a profit.

Fiona 🙂

Free access to accounts filed at Companies House

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60% of the 3.5 million companies in the UK now file accounts electronically and you can access those accounts free of charge via http://companies.corefiling.com/search

 

Paul Driscoll is a Chartered Management Accountant, a director of Central Accounting Limited, Cura Business Consulting Limited, Hudman Limited, and AJ Tensile Fabrications Limited, and is a board level adviser to a variety of other businesses.

10 ways to get paid faster

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Late payment kills businesses, it’s a fact.

Latest research shows that British SMEs are having to wait an average of 41 days longer than their original agreed payment terms before invoices are paid. (source: BACS)

So what can you do to get paid faster?

  1. Get payment upfront – It might sound obvious but do you ask for payment with order? or deposits? or to be paid on delivery?
  2. Get Stage Payments – on projects agree stages and collect payment before you do the next stage
  3. Raise the Invoice quickly – as soon as you can bill the client send out the invoice
  4. Agree Terms of Business and Payment Terms before you start any work
  5. Make sure you know who to bill and who to chase for payment
  6. Make your invoice stand out, use bright colours and send a copy by Post and E Mail
  7. Offer multiple payment methods – Credit Card, BACS, Cheques, PayPal – make it easy for your client to pay you
  8. Offer a discount for prompt payment
  9. Charge interest for late payment
  10. Deal with any disputes quickly

steve@bicknells.net

Are your prices correct? 5 Simple steps to evidence based pricing

Price

It’s all good news and cheers into the New Year with the UK downturn finally expected to be left behind and as the size of the UK economy surpasses its pre-recession peak. With expected GDP growth rate of 2.7% the clear message of these indicators are that against the backdrop of a difficult economic climate, there are still pockets of strong demand for top quality services and products at an affordable price across different sectors which would continue to fuel the stimulus for growth in the economy. The challenge is for businesses to plug into these golden nuggets of opportunities with a winning price offering.

Access to top notch real time information about comparable products and services by consumers is so much easier with price comparison websites such as Money Supermarket, Go Compare, Martin Lewis’ Money Saving Expert, Google search engine, to mention just a few providing an invaluable service. The dilemma to success in this competitive market is getting the right balance between quality and price. The consumer’s buying decision for most products and services with elastic demand always come down to price. Understanding your product/service demand curve and elasticity is the key to maximising your corporate profits and bottom line, because it’s only when you know how much your consumers are willing to pay for your service or how indifferent they would be to a price change that you can confidently put out a winning price.

In a nutshell the markets are not perfect and a good price creates sales transactions that benefit the consumers, the business, and the economy. It is very clear that there are disparities and mismatches between prices offered for goods and services by businesses in the UK and the amount hard up consumers are willing to pay.

Gone are the days of setting prices based on “gut” or “experience”. I often hear clients say my plan for 2014/15 is to sell 20,000 widgets @ £30/each because I managed the same feat last year. Evidence should always be the key in setting prices, understanding the variables that affect pricing is a key insight into the competitive environment. This article takes you through the steps of achieving a profit maximizing price for your products or services and then puts into context of how growth in the economy could be stimulated.

Step 1

Build a two table column that shows all your prices (including discounts) and the associated demand over a period of one year. You can get this information from your general ledger.

Step 1
Jab Ltd
Price Quantity Demanded (Units)
£21.00 200
£26.00 196
£24.00 190
£12.55 280
£13.00 240

Step 2

Step 2
Price Demand
Low Price =MIN(B6:B10) =VLOOKUP(F6,$B$6:$C$10,2,FALSE)
Medium Price =MEDIAN(B6:B10) =VLOOKUP(F7,$B$6:$C$10,2,FALSE)
High Price =MAX(B6:B10) =VLOOKUP(F8,$B$6:$C$10,2,FALSE)
Step 2
Price Demand
Low Price £12.55 280
Medium Price £21.00 200
High Price £26.00 196

Use excel function min, median, and max to find out the minimum, maximum, and average price

Step 3

Plot the points in a scatter graph from the tabled data, select the polynomial function for the trend line to display the formulae coefficient, where x represents price and y equals quantity demanded

Graph

Step 4

Put any trial price and Input your polynomial coefficients into the demand equation;

Step 4
y = 0.6444x2 – 31.088x + 568.65
y = quatity demaded
x = price
Price 20
Cost 11
Demand =(0.6444*G17^2)-(31.088*G17)+568.65
Profit =(Price-Cost)*Demand
Step 4
y = 0.6444x2 – 31.088x + 568.65
y = quatity demaded
x = price
Price £20.00
Cost £11.00
Demand 204.65
Profit £1,841.85

Step 5

Use the solver function in Microsoft Excel to calculate the profit maximising price. Check to see the solver function is enabled in your excel version – For excel 1993 click on Tools => AddIn => Tick Solver and For excel 2010 click on File => Addin => Tick solver

SolverSolution

Solution after solver

Step 5
y = 0.6444x2 – 31.088x + 568.65
y = quatity demaded
x = price
Price £26.00
Cost £11.00
Demand 195.9764
Profit £2,939.65

Based on the above evidence from solver we can deduce that the £26 price would maximize the organization’s profit, although this shouldn’t be taken in isolation as other factors affect demand and price

The importance of having a winning price for your products and services cannot be over emphasized as it could spell the difference between real competitive advantages and being priced out of the market.

We would love to hear your thoughts and comments

10 ways to maximise sales revenue

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Before you can sell you need to master the sales process, the following is a link to a 9 step process to help improve your sales process – WikiHow

Or you might prefer the 1941 Chevrolet approach

Once you are selling, how can you maximise your sales revenue…….

  1. Understand your clients needs and wants, sell products that they want, or make them want what you have to sell
  2. Keep your promises and earn your clients trust
  3. Look for opportunities to sell additional services and products
  4. Offer good value and service
  5. Get testimonials, recommendations and referrals
  6. Use your contacts and social media and tell them your success stories
  7. Credit Check your clients, a clients isn’t a client if they don’t pay and you aren’t running a charity
  8. Bad Debt Insurance could help reduce your risk but its not appropriate for all businesses
  9. Set up a customer rewards program and offer incentives
  10. Follow up leads within 24 hours

steve@bicknells.net

15 ways to improve profitability

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Profit is vital to every business, what is the point of being in business if you don’t make a profit?

So here are my tips on how to improve your profitability:

  1. Weed out loss making products, clients and departments – concentrate on high margin products and services
  2. Reduce Employment Costs – use Freelancers instead of Permanent Employees where appropriate
  3. Use Virtual Communication Technology – meetings can be held over the internet with Skype or other systems, it will cut traveling time and costs
  4. Use Social Media and Networking – marketing can be costly and the results can be hard to measure, use your contacts to generate leads and sales and always ask for referrals
  5. Increase Productivity – eliminate wasteful and unnecessary processes, I was told it used to take 17 people in the NHS to change a light bulb on a hospital ward (requisitions, approvals, payments, changing the bulb…) the solution to cut wasted processes was to keep a stock of bulbs on the ward
  6. Negotiate with suppliers – always look at ways to reduce cost including using alternative suppliers
  7. Understand your clients requirements – the client knows what he wants and what represents value, if you deliver value you will get more business
  8. Seek add on sales – what other products or services might be useful to your existing clients
  9. Keep an eye on your competitors – competitor analysis will enable you to understand differences in price, distribution, market and demand
  10. Find New Markets – use market research to expand into new areas
  11. Decrease Overheads – analyse all of your overheads including Rent, Rates, Utilities – could you sub-let part or your premises or reduce waste
  12. Reduce Stock Levels – can you turnover your stock more quickly or buy to order
  13. Improve your Cash Cycle – reduce slow payment by debtors, invoice promptly and settle disputes quickly
  14. Invest in Technology – automate processes with ERP systems
  15. Use Key Performance IndicatorsKPI’s help you achieve your goals

steve@bicknells.net

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