Category Archives for "Small Business"

You Need to Implement These Four Things in Your Business

By Randall Orser | Small Business

For your small business to be successful, you need to be organized, otherwise, you’re just running around like a chicken with its head cut off. You face a huge struggle to just get one thing done when you’re unorganized. The following four items are what you need to be organized about in your business.

Time

Your time is valuable, and you need to treat it as such, as nobody else will. Your time is also limited so use it wisely. You need to commit your time to work, home, and yourself so you can run your business.

To-do List

Having a to-do list is crucial to getting things complete, and then continually updating it. A good thing to have is a weekly planner showing what you must get done, what you’re accountable for that week, things you’d like to get done, and even things you should stop doing. Your to-do list will allow you to get right to work when you start your day at the office (even if that’s a room in your home). You always know what you should be doing, even when you find that rare occasion with time to spare.

Office/Shop

Being organized in your office/shop is very important, you don’t want to spend an inordinate amount of time trying to find things. You end up behind in your work, and less motivated to start (it all just seems too hard).

Paperwork

This is THE business killer, not keeping track of your paperwork. Keeping up-to-date on your paperwork allows you to know who has paid you and who still owes you. Plus, you will know who you owe too. You should also ensure you have copies of any insurance policies, rental agreements, etc.

In order to know the health of your business, you need to be constantly up-to-date on your paperwork, as that can say a lot. The information provided via your accounting can make you realize you need to work harder or you are reaching your goals you had set for the business.

Organizing is very hard, and you need to be constantly vigilant, however, it’s totally worth the effort. Take the time now to rearrange your business, and you’ll notice a big difference. You get more done and make more money!

Are you Winning? Using the Figures to Boost Your Home Business

By Randall Orser | Small Business

The main indicators of success for your business are ‘work’ and ‘finance’.  

Work is a straightforward measure of how much work you have on at any time.  How many orders have you completed?  How many are there in the book that haven’t been started yet and how many are in progress?  A regular view of the value of orders in the book and the value of work finished each month will provide a trend.  

Finance is measured in many ways.  For the small business, it can be simply ‘what’s in the bank?’ and ‘how high is the overdraft?’    As with the work, however, a regular review for trends is extremely valuable.  For both, a trend upwards is a good sign that business is good and getting better.  Downwards is almost always not good.

Finance

The most obvious measure that everyone watches is simply ‘how much money is in the bank?’  A credit balance is good; an overdraft can be a challenge.   The balance will be the difference between money paid out and money taken in.   If you have more money going out than is coming in, you will not be in business for long.  The trick is to identify it early and find out what’s going wrong.

If you have a lot of orders coming through and being completed but are still not making money, first confirm that the invoicing and receipt processes are running smoothly.  No one will pay if you don’t ask them for it! 

Next, review what you are charging for your product against what you have to spend to make it.   Be sure to include your overheads in the cost calculations.  If it costs you £20 per month for the telephone services and during that month you can produce 100 of your product, then the cost calculation for each item must include 20 pence to cover the telephone overhead.  Similarly, electricity, premises rent and rates, insurances, any employees (and your time), and any other charge that you pay, will all have to be covered by what you charge people for your product.  The basic calculation is simply to divide the annual cost by the number of items you can produce in a year.  The price at which the item is sold must include the complete cost for producing it.  A small extra amount added into the price on top of the cost is your ‘profit’.  Too much and people won’t buy.  Not enough and you won’t be making enough to stay in business.

If it is costing you more to make than you are charging for it, then you have two avenues: put up the price you charge and/or cut down the costs for making the product. 

I’m Charging Right but Still Not Making Money

If the charge for your product already covers the item production and you are selling and invoicing successfully but still not making money, then you may be building up a stock of materials or parts.  This is easily done if your practice is to order slightly more than you think you will need, but never go back and use the extra that is sitting in the stock cupboard.  If you have built up a high stock, you need to consider how to reduce it and maintain it at a more appropriate level.   There may be quite a lot of money sitting in that cupboard that could be working better for you.  You also require a system for using up what’s in the stock cupboard.  Perhaps you order less.  Better still, you may include a current stock check into your routine when pricing a job and ordering materials.

Making the Most of Trends - a Case Study

 The other process for useful information is comparison.  Comparison of this month with the same month last year will show whether things are getting better or worse but will also provide clues to what might be causing the trend.

In the following case study, Martin started his hairdressing business in January 2010 and in mid-2011 is analysing his receipts for the first 14 months he has been in business.  He can see some important trends:

Month

   Receipts

Jan 2010   

£400

Feb   

£900

Mar

£950

Apr

£1200

May

£880

Jun

£650

Jul

£590

Aug

£675

Sep

£1700

Oct

£2030

Nov

£2300

Dec

£2950

Jan 2011

£900

Feb

£1200

At the beginning of 2010, receipts were very low.  This was the beginning of business and people did not know him or his work.  He didn’t have much advertising working for him and his main custom came from family and friends and a few people who transferred with him from his previous salon.  It is common for new businesses to struggle for a couple of years while they get known and build up a clientele.

There is a steady growth from the beginning as the figures show an upward trend, although June, July and August seemed low and January 2011 showed a big drop from the months on each side.  In comparison, November and December 2010 jumped upwards very satisfactorily.

When Martin compares the two Januaries they both show low takings, so it may be that the starting low figure was affected by more than just being a new business.  It may be that January will generally always be slow.  He will need to take that into account when planning for future years.   It’s not a good idea to just charge a little more to cover the drop in work as it will alienate customers who have become used to the charges and expect them to stay the same.  Changing charges requires advance notice and extra publicity.    It is better to identify why the sales are down and encourage more people to come in.  If he offers a ‘post-Christmas discount’ he may be able to attract more customers in during that month.

In contrast, his sales immediately pre-Christmas have jumped upwards.  He reviews who came in during those months by checking his appointments book, remembering he was run off his feet, and finds that his older female customers flocked in to ‘have their hair done for Christmas’, while the young children and teens were less in evidence.  The customer mix, and the type of hairdressing that was required by them, would account for the increase in sales.  He can continue to expect a pre- Christmas boom if he maintains satisfaction for these customers and can keep them coming back. 

During summer his sales fell slightly.  His appointment book reveals more white space than usual, showing that he had times when no one was in the salon.  He remembered hearing a lot of holiday stories in the following months and realised that many of his regulars had been away and missed having their hair done with him.

In reviewing his expenses, Martin found high expenditure in December compared with the other months.  His invoice file showed that he had ordered in extra quantities of shampoos, conditioners, waxes and hairsprays.  He remembered that with all the extra business, he had run out of some products and had been forced to shop around for emergency supplies.  This had been more expensive than his usual suppliers, on top of being extra orders.  He made a note to stock up more in October so to be ready for the rush this year.

Overall, Martin was able to conclude that the business was generally good, although there was still plenty of room for more growth.  He would introduce a post-Christmas discount to see if he could entice more people through the door in January.   During the summer period he probably would still have a drop-in business, but he might be able to run a promotion for new customers.  He could also try attracting his regulars – and perhaps others – with a ‘look good for the holidays’ promotion just before they go away.  He would order in extra stocks of his consumable items ready for the pre-Christmas rush.  If he doesn’t sell as much as he expects, he could use the leftover extras for his post-Christmas promotion and sell them at a discount.

In this case study, Martin is identifying, and dealing with, seasonal trends that will affect his profitability.  By looking at the year as a whole, and comparing the months between years, he can see where his ups-and-downs relate to the time of year and plan accordingly.  Seasonal trend is only one factor among many that make a difference to your sales.  Depending on what you are selling, you may need to deal with fashions, new technologies, an event in the celebrity world, the impact of a new television program or film, a new law or regulation, an unusual weather pattern, a faulty product that lets you down, major job losses in your area limiting people’s spending, or something new that has never happened before.

The most successful businesses keep an eye on what’s happening, analyse why sales are dropping or increasing, drill down into the documents that are part of the daily process (such as appointment books and invoices), and find answers that they can then use to continue reducing expenses and increasing sales.  It’s not difficult to do, but if you need help – or just another point of view – your accountant is a useful resource in analysing the figures.  It will need your valuable knowledge of the daily business, however, to understand the underlying reasons and what might be done to address a potential problem. 

 It is up to you, as the business owner and manager, to keep an eye on the numbers, to measure progress regularly, and to address trends that are affecting your sales.

Automate Your Business to Grow!

By Randall Orser | Small Business

Mention "business process automation" and for most people, it’s the complex IT systems of the bigger business establishments that first come to mind. Yet the smaller businesses, even the start-ups and home-based enterprises, can make use of and benefit from business process automation.

What is Business Process Automation?

Business process automation refers to the use of technology and software applications in operating a business. It is the complete or partial automation of repetitive tasks and regular business processes so that labour is better utilized and costs are contained.

Tools to automate a business are aplenty: tools for accounting, inventory tracking, email marketing, order taking, customer relations, and many more. A good example is the automation of inbound calls to a company. Do you remember years ago when a telephone operator was a must for most firms? These days, callers interact with a voice response system that takes care of standard calls or inquiries and routes specific calls to the right person or department.

Benefits of Automating Your Home Business

Automation has become necessary for businesses of all types and sizes. Consider the following benefits you are bound to gain by automating your business processes:

1. Business process automation will save you time.

If you are a one-person operation, you can be freed from handling the everyday routine tasks and devote your time instead towards marketing and growing your home business.

2. Business process automation will cut down your costs.

By automating many of your processes, you can streamline your operations so you will not need to hire as many employees as you would if your operations were run manually.

3. Business process automation will minimize errors.

Human errors can be costly and can lead to financial losses or poor customer service. Automated accounting systems, for instance, guarantee accuracy in computations, ensure timeliness of sending billing statements and improve the efficiency of your inventory management.

4. Business process automation will help you manage information better.

As business owner, you need to be informed about all aspects of your business operation. With automation, information is sorted, classified, and ready for your retrieval anytime you need it.

5. Business process automation will facilitate communication.

With correct and timely information, you get to know exactly what your customers want. You can communicate directly with your customers to address their needs or resolve their problem with your product or service.

How You Can Automate Your Home Business

If you are not yet sure which of your business processes to automate and what automation tools to use, you may want to take stock of your various business processes and learn which can be automated. Make sure to break them down where needed so you can decide on the appropriate software or application.

Take for example your marketing process. You can break it down to the following tasks: generating leads, distributing marketing materials, sending out sales letters, following up on leads, conducting surveys, and gathering feedback. For lead generation, you can design your website to include a subscription form or an opt-in box where visitors can submit their contact information. The pooled data go to your mailing list, which you then feed to your email auto responder that will in turn generate automatic responses to the email inquiries or send out pre-scheduled messages, newsletters, or sales pitches to those in your customers’ list.

With the right apps on your website, you can engage in e-commerce and run your online store where everything is automated from the order taking to receipt of payment and processing of shipment. If you have affiliates or if you advertise on other websites, you can also monitor their performance using a tracking system. Your accounting system can incorporate bookkeeping, invoicing, inventory management, payroll, voucher preparation, and so forth.

In the end, it is a matter of identifying the unique needs of your business and choosing the appropriate business process automation tools. Depending on your budget and the degree of automation that you want, you can hire an IT professional to develop an automated system for you or you can purchase one of the many canned programs that are readily available. A few solutions that you can download for free are available if your needs are simple and your volume is low.

How Smart Entrepreneurs Manage Inventory

By Randall Orser | Small Business

Inventory management isn't exactly made for the highlight reel. When people think of entrepreneurs, they think of bold ideas, trailblazing, and making money, not counting how much of your product you have. But inventory management is as important as accounting or securing your patents. Not enough of your big product to go around? Too bad, you just lost a chunk of your customers. The two basic things that your product needs to be are "functional" and "available for purchase". Fail the second one and it doesn't matter how good your product is - you're going to lose money.

Proper inventory management involves more than good hiring practices and keep an eye on your products. There are a couple of problems you'll need to solve.

1. Tracking Your Inventory

The Problem: So you know how much you expect to sell. The problem then becomes figuring out how much you have available for sale. Human error can put the kibosh on your finances. Inventory miscounts can occur when they're sold, when they're received, or when someone decides to use their five-finger discount. You'll also have to take scrapped items into account.

The Solution: Bar codes and electronic data interchange can help make sure that everything is accounted for. While you can count your inventory daily, it can put your employees and your finances under severe stress. A good alternative is to count a few items at a time. Pick a few of your products and see if they match your records. Put more emphasis on your best sellers - count them more often.

2. Having Too Much

The Problem: Too much of a good thing can be a bad thing. Making too much product can result in storage and production costs eating into what could be your profit. Anything that sits on a shelf for long enough is at risk of being stolen, damaged, or even becoming obsolete. Old product is notoriously difficult to sell, which can result in unplanned discounts or hoping that the overseas markets have room for your old stuff.

The Solution: The first thing you should do is figure out how much you need to have and when you'll need to have it. Take a look at how your sales have been over the past year. Take note of any peaks and dips and figure out if those deviations are connected to specific events or seasons. You can also figure out if you have spikes during specific times of the month, such as at the end of the month.

3. Data Loss

The Problem: Your inventory is properly marked and recorded and you're ready to turn in when your computer suddenly shuts down and refuses to turn back on. You get the repair guy to come in, and he tells you that your hard drive is gone. What do you do?

The Solution: There are a lot of things that can compromise your data, from viruses to theft. So when the inevitable "bad thing" does happen, take a deep breath. Take a look at your backup copy, which you should have. When you update your main file, make sure to update the backup as well. Software is available to both automate the process and to make sure that your data is recoverable. You can also have another copy of the file available to someone who needs it regularly, such as your accountant.

4. Skewed Priorities

The Problem: Inventory checking, for the most part, is a manual task. Someone has to visually confirm the existence of your products and note it down. This takes a lot of time and effort, both of which increase as your company grows.

The Solution: Entrepreneurs know that the first thing to do when solving a problem is to figure out your priorities. In this case, the priorities should lie in your most important products. Figure out how your best items are doing inventory-wise. Make sure that they're always in stock and up-to-date. Then take a look at your second-best items and so on and so forth. While it is possible to cover all your bases, focus on making sure that the most important products are protected. Your resources and your personnel are not unlimited.

5. Misused Spreadsheets

The Problem: Spreadsheet programs are often used as a way to easily track inventory. Microsoft Excel and OpenOffice software are used as computer lists. The problem is that computer files can be lost or modified. Changes are difficult to track, and synchronizing files across multiple branches can drive you to insanity.

The Solution: Entrepreneurs know that you have to use the right tool for the right job. Go with accounting software that has built-in inventory management systems, such as Quickbooks Online (QBO); maybe use an app for inventory that links to QBO. They'll ensure that human error is minimized and even provide vital functions such as a centralized database.

Your inventory might not be the most exciting thing in your life as an entrepreneur, but it's no less important. Mismanaged stock can easily result in lost sales, lost customers, and lost profits. Keep an eye on your product no matter how boring it gets and it will pay off.

A Formula for Disaster

By Randall Orser | Small Business

A majority of family-owned businesses have no succession plan to deal with retirement, disability or death. The cost of such negligence is often steep.

Except for the most bitter divorces or hotly contested lawsuits, nothing else comes close to the intense emotions and complex challenges of engineering a succession plan for a family business. That’s precisely why so few owners actually engage in the process. Only 30 per cent have a succession plan in place, according to a 2007 study by wealth management firm Laird Norton Tyee.

Even for those who do, tiptoeing through the minefield of succession planning leads to disaster more often than triumph. Just 30 per cent of family enterprises survive a second generation of stewardship, according to the Family Firm Institute (FFI). A scant 12 per cent make it through a third generation.

 “The biggest issue with succession planning is recognition of the need and a sense of urgency around doing it,” says Beth Wood, assistant vice president at Springfield, MA-based MassMutual Financial Group and supervisor of another 2007 study, co-sponsored by FFI. “Our data, based on responses from 1,035 family businesses with at least $1 million a year in revenues, suggest that almost 75 per cent of business owners are within 10 years of retirement, but have not selected a successor or put a succession plan in place,” says Wood, who runs the succession planning practice at MassMutual. “In addition, 30 per cent of the owners have no estate plan in place beyond a will. That is a concern because in our last survey, in 2002, only 19 per cent had no estate plan beyond a will. So the problem is getting worse.”

For any successful privately owned enterprise, estate taxes represent the single biggest threat to long-term well-being if not handled properly, says M. Katharine Davidson, a partner at law firm Dreier Stein Kahan Woods George, LLC in Santa Monica, CA. In Canada, probate taxes can be quite high depending on the value of the estate. As a result, one of the most important goals of a succession plan is to dramatically reduce estate tax exposure.

Expensive misconceptions

Many business owners mistakenly believe they have effectively addressed succession because they do, in fact, have an estate plan. “There is a huge misconception about what a succession plan is, which is why so many people do not have one,” says Ricci Victorio, vice president and a partner-director at 35-year-old succession planning firm The Rawls Group in Fairfield, CA.

“Most business owners do not really understand what a succession plan entails. Many owners think, ‘I have a buy/sell agreement, I’ve got a will, I’ve got a trust.’ Those are standard estate-planning tools. However, what they have overlooked is whether they have trained a successor and whether they have one in place. And they have not asked themselves whether they have managers and the bench strength to carry that successor into the next generation, or whether they’ve provided a way for their successor to inherit, buy or earn the stock so they have a smooth transition of ownership.”

There are also emotional and psychological reasons why so many business owners fail to tackle the issue. “People don’t like to deal with their own mortality, so they don’t like to do succession planning,” Davidson says. “They often also don’t want to deal with some of the hard questions about how to treat family members. There are always relationship issues at hand and they don’t want to disrupt family harmony. And people are so busy running their business, because that is what has made them successful, that they don’t take the time to look to the next step.”

The consequences of such neglect can be very expensive, says David Mahmood, founder and chairman of Dallas-based investment banking firm Allegiance Capital Corporation. “Lack of a succession plan can literally destroy your business,” he says. “So, no matter your age or how good your health is, you need to have a plan in place. Nobody gets out of bed in the morning and expects not to make it through the day because they will get killed in a highway accident or drop dead of a heart attack.”

David Auchterlonie, chairman and CEO of corporate turnaround management firm The Scotland Group in Newport Beach, CA, has witnessed the carnage poor succession planning can inflict. Of 200 cases he has handled over the past 22 years, about one-third have involved family-owned businesses. Of those, succession issues have invariably been at the core of the problems the businesses faced.

“The most common issue is the inexperience or the lack of capability of the designated – or designated by default – successor,” says Auchterlonie. For example, he cites a $100 million distributorship whose owner died suddenly. His eldest son, who held an MBA degree of dubious practical value, took over the company and proceeded to offer deep discounts to its best customers. That, in turn, eroded the company’s financial performance and led to a desperation sale at a fire-sale price.

Victorio agrees with Auchterlonie that a less-than-competent successor, often enabled by a sense of entitlement and the failure of rank-and-file management to expose to the owner his or her lack of qualification for the heir apparent role, is a common problem. Facing it is also among the most emotionally wrenching aspects of succession, she adds.

Yet another emotional issue, one that is often ignored, the experts say, is that the son or daughter or other family member designated as successor actually does not want the job, but a lack of communication or pressure from a parent facilitates an unfortunate circumstance that quickly becomes a catalyst for failure.

As a result, Victorio says, a growing trend is a “succession bridge,” meaning that the plan skips a generation but keeps the business in the family. Typically, an outside CEO is recruited to run the business while a grandchild completes business school and then works in a training or mentoring program under the tutelage of the interim executive until he or she is ready to assume command.

But if in doubt about the existence of a competent successor who has the requisite ambition and drive to shoulder the long-term burden of a business, the best course is usually to sell the company at the peak of its value, the experts say.

Meeting the challenge

More than anything else, perception and attitude determine the success of a succession plan. “The important thing to understand is that succession planning is a process,” says Victorio. “It is not a project. It does not have an end date.”

Key components of a solid plan include a realistic understanding of where the business is today – its strengths and weaknesses – and where the owner wants it to go, as well as a careful assessment of who is the best successor. Often, that means looking outside the family or current management team.

But the grand tradition is for a capable successor to carry on for the family and build the value of the company. Sumita Batra, CEO of Ziba Beauty, a chain of specialty salons in southern California, has endured a succession process for the past four years. Since she took over four years ago, a partnership that includes her mother – the founder of the business – husband, sister and brother has successfully doubled the size of the company, from six stores to 12.

The most important lesson Batra has learned, in going through a transition she acknowledges has been difficult at times, is that a family bond and shared trust are more important than anything else. “Blind trust must exist between the family members to come out of a process like this without damaging your family relationships,” she says. “And you have to put the emotion aside. What I learned is that you can go through a very, very tough experience and instead of getting distant, you can actually become even closer. And the business can grow and become even more successful.”

Unusual Tips for Entrepreneurs

By Randall Orser | Small Business

If there's anything a successful entrepreneur should learn, it's that there's always something they don't know. Even experienced entrepreneurs may find that there are a few tricks that they haven't heard of, things that may improve the way the run things. Smart entrepreneurs look for ways to improve their efficiency daily. If you want to be successful, you'll want to cultivate that same habit.

1. Organize Your Data

As an entrepreneur, you'll need to keep an eye on a lot of details, from the amount of materials and stock you have to how the audience is reacting to your marketing campaign. Being detail-oriented will make sure that you don't miss any opportunities and that you react to any missteps before they get out of hand. That means that any data or information that you have should be organized and readily available.

This will also help you when the time inevitably comes to make sales pitches, either to potential customers or possibly investors. If they need any data, you'll have it ready for presentation. This could easily turn a maybe into a definite yes.

2. Research Answers

The wonderful thing about the Internet is that you have, at your fingertips, a massive amount of information. Due to the ease at which this information is available it is almost criminally neglectful to not use it. If you have any questions, chances are that someone has already asked that question. Even if it does not fit your specific context, you may find the answer still relevant. Look at forums or see if Reddit has a subreddit for your question.

3. Write Things Down 

Entrepreneurs need to be detail oriented. The problem is that there's a lot to remember. Clients, employees, investors and more will ask and tell you about a great deal of things. You're probably going to remember most of it, but most will not cut it. You'll need to write things down, either in a notebook or on your phone, to make sure you forget nothing.

The things with you can do with the information you write down and organize are endless. You can use that information to spot trends, nip trouble in the bud before it sprouts, and even make suggestions to other entrepreneurs in terms of hiring or strategy. Knowledge is power, but only if you remember it.

4. Make Sure That Lines of Communication are Open

A big part of efficiency is communication. Everyone has to be one the same page. They need to know when other tasks are completed and they need full understanding of what needs to be done. As an entrepreneur, you can make sure the lines of communication are open simply by talking to people. Ask them what they think and check up on their tasks every once in a while. Keep everyone else updated, possibly through a mailing list or by simply making announcements. You shouldn't be the only one updating people, however. Make sure everyone knows that it's their responsibility to both stay informed and make sure that those around them are informed.

It's important to note that communication doesn't just involve making sure everyone knows how everyone else is going. It also means that employees, partners, and even clients should be aware that their opinions can and will be heard.

5. Be Nice

Politeness is free, so you should be as polite as you can to everyone you meet. Being a successful entrepreneur is all about treating people right. Treat customers right and they'll come back for more. Give your partners and investors the respect they deserve and they'll be more inclined to work harder on the start-up.

While the strength of your product is what is primarily going to determine the success of your start-up, it would be foolish to say that your attitude and relationships with other people has no effect on your future. It's probably possible to make it as a rude entrepreneur, but you'll probably find the journey a lot more difficult than if you took the time to be polite and kind.

While these tips will help, it's important to remember that there's a lot more to being a successful entrepreneur than unusual tips. There's having a good product, having a strong marketing campaign, and grit. The road might get bumpy, but if you apply these tips and stay in the fight, you'll likely find success.

Understanding Perceived Value for Retail Small Business Success

By Randall Orser | Small Business

Consider two scenarios. In the first a customer strolls into your shop. After having looked around she walks up to the most appealing product in the store, has a quick look over it and then picks up the price tag. She drops it like it was on fire and moves along. In the second scenario things are different. Instead of dropping the tag she holds on to it for a moment continuing to look over the product. A few minutes later you or your sales staff are working with a new customer discussing the products features and benefits and are on your way to a possible sale.

As store owners we all wish for the second scenario, but can we really do anything to control this response? After all we have costs for our goods and our supplier won’t negotiate. Add this to operating costs and apply a fair margin and there you have it. But in fact, you almost certainly have some control over how the customer feels about the price of your product.

The answer lies in understanding the relationship between Anticipated Value and Actual Value. Anticipated Value is the value expected by the customer whether consciously or unconsciously. As it implies the Actual Value is just that. The price they see when they look at the tag. Taking steps to keep Anticipated Value lower than Actual Value is the goal of the manager or store owner.

A great deal of it has to do with the context within which you place your product. Let’s say the product is a beautiful, large, cut crystal bowl. You place it in an enclosed showcase built into the wall with a small, brushed steel spotlight shining on it. A tag of superior design stands beside it in a small, steel frame, which matches the finish of the lighting. It explains the origin of the bowl, how it was made and the name of the person who did the cutting. As the customer approaches it they begin to anticipate what price it will be. Given the setting, the security which it is afforded and the effect the lighting has in bringing out its best features the customers Anticipated Value is likely to be greater than the Actual Value.

In the second scenario the bowl has been placed on top of the counter near some other items of lower value, without accent lighting and is, perhaps gathering a little dust. In this scenario the Anticipated Value is almost guaranteed to be less than the Actual Value. Yet it is exactly the same bowl.

You want customers have a perception of your store having “great” prices. What can be done? How are you able to have an effect on your customers’ perception of price?

One way to do this is to set a standard for the quality of your goods. Don’t surround a product with other items of inferior quality or appeal nor, in fact products of a superior quality. This doesn’t mean you have to be Tiffany’s but, rather that you must have a consistency within your product standards. Don’t mix goods of a wide variety of qualities or some of it is bound to come out looking bad. Let each product complement its neighbors.

As you’ve seen in the two scenarios merchandising the product effectively is one of the keys to higher anticipated price. Give the product some room. Keep it clean and present it as an item of value. If necessary, hire a merchandiser to come into your shop on a regular basis. Good merchandisers pay for themselves.

Naturally it’s not just the products relationship to other products but the store environment itself. Are the fixtures professionally built or something homemade or well used? Are they consistent with the level of value you want to convey, neither overdone nor underdone? How about signage? Is it professionally designed, manufactured and installed or is designed by an amateur, part-time graphic artist painted on plywood?

Next don’t forget the most important element. The people. Are you and your staff well groomed, polite and articulate? Above all are they highly knowledgeable about the product you carry?

Another critical factor is location. Too often when shopping for lease space the focus revolves too much around what a new business owner perceives they can afford. Instead they should consider a premium location, which will bring in a quality and quantity of customers that will lead to high sales and business success. Choose a location with an attractive frontage in an area that will lend credibility to your business. The interior should be well finished and the fixtures fresh and clean rather than well used.

An old sales adage says, “Price first. Product second.” This means you don’t offer up the price before you have fully informed the customer of what they will receive for their money. You would never call up a car dealer and say, “I need a car. How much are they?” First you need adequate information to make a value decision. This concept should also be applied to your price signs and tags. When designing price tags make the price secondary. The price should be in a smaller font than the text. The text should be very concise, easy to read and contain the key benefits of the product. If it is difficult to read, they will simple jump ahead to find the price. Each listed benefit will help to push up the anticipated price.

Look at each of these factors when developing a business plan. Examine each detail keeping in mind how it will reflect on your product and how it will affect your customers Anticipated Value. Keep in mind that moment when the guest in your store turns over that tag. How can you push up the Anticipated Value? Adequate time and effort on this key aspect of business will take you a long way towards strong sales and a healthy, profitable enterprise.

Merry Christmas!

By Randall Orser | Small Business

We’d like to take this time and wish you and yours a very Merry Christmas and a Happy New Year! I hope 2017 has been good to you and here’s to a prosperous 2018.

Here’s some interest facts about Christmas.

It wasn't always on December 25

Though Christmas celebrates the birth of Jesus Christ, there is no mention of December 25 in the Bible. (Most historians believe he was actually born in the spring.) It wasn't chosen as the official holiday until the 3rd Century. Some argue that the date was picked because it coincided with the pagan festival of Saturnalia, celebrating agricultural god Saturn with partying and gift-giving.

Thank Prince Albert for your tree

Another Christmas tradition stemming from Saturnalia was the Christmas tree: During the winter solstice, branches served as a reminder of spring — and became the root of our Christmas tree. The Germans are credited with first bringing evergreens into their homes and decorating them, a tradition which made its way to the United States in the 1830s. But it wasn't until Germany's Prince Albert introduced the tree to his new wife, England's Queen Victoria, that the tradition took off. The couple were sketched in front of a Christmas tree in 1848 — and royal fever did its work.

Coca-Cola came up with the red suit

Well, Santa wore a variety of colorful suits through the years — including red, blue, white, and green — but legend has it that the popular image of his red coat came from a 1930s ad by Coca Cola.

St. Nick was more generous than jolly

Sure, you probably knew that Santa Claus came from St. Nicholas, a Christian bishop living in the fourth century AD. St. Nicholas gave away his abundant inheritance to help the needy. He also was known for good deeds like rescuing sisters from prostitution. As his legend spread, he was eventually known by names like as Sinter Klaas in Dutch — which morphed into Santa Claus. He's not just the protector of children, either: St. Nicholas is also the patron saint of unmarried women, prisoners, thieves and pawnbrokers. How's that for a naughty list?

Stockings have a funny root

Gift-giving also came from Holland. There, St. Nicholas' feast day is celebrated December 6 by children leaving out shoes overnight and finding little gifts from St. Nicolas in the morning. According to legend, hanging stockings came from the take of a poor man who couldn't afford his three daughters dowries: St. Nick dropped a bag of gold down their chimney one night so that the eldest could wed — but it fell into a stocking that was drying by the fire!

Rudolph was almost named Reginald

A copywriter named Robert L. May first invented the oddball reindeer in 1939 as a marketing gimmick for Montgomery Ward's holiday coloring books. (May considered naming the beloved misfit Reginald and Rollo.) And his nose wasn't originally going to be red: A red nose was viewed as a sign of sign of chronic alcoholism, and Montgomery Ward didn't want him to seem like a drunkard. Good thing they changed it. "Reginald, the blue-nosed reindeer" doesn't have quite the same ring … or charm.

Jingle Bells was originally a Thanksgiving song

James Lord Pierpont, an organist from Savannah, Georgia, first performed a song he wrote, "The One Horse Open Sleigh," at his church's Thanksgiving concert. The song was re-published in 1857 and given the title of today. Bonus fact: It's also the first song broadcast from space. On December 16, 1965, the Gemini 6 crew serenaded Mission Control after they reported seeing a "red-suited" astronaut.

Christmas sends at least 15,000 people to the ER

From hanging lights on ladders to taking roast out of the oven, making merry can prove hazardous. In fact, the Consumer Product Safety Commission estimates that an average of 15,000 Americans visit hospital emergency rooms each November and December from holiday-related decorating accidents. To top it off, dried Christmas trees spark hundreds of fires, an average of 17 deaths, and $13 million in property damage annually.

Merrymaking used to be illegal

Though the first American batch of eggnog was created by the Jamestown settlers, by the time the Puritans settled Boston, Christmas was illegal. (The word nog comes from the word grog; that is, any drink made with rum.) From 1659 to 1681, celebrating the once-pagan day could cost you a fine of as much as five shillings. And after the Revolutionary War, the new Congress found the day so unimportant that they held the first session on Christmas Day, 1789. It wasn't proclaimed a federal holiday for nearly another century.

Washington Irving created Santa's sweet ride

He's best known for The Legend of Sleepy Hollow's headless horseman, but the author also came up with the idea of Santa's flying sleigh. In The Sketch Book of Geoffrey Crayon, an 1819 series of short stories, Irving recounted a dream where St. Nicholas flew across the sky in a wagon. According to legend, his stories were so popular that they sparked a Christmas fervor in the United States and even England, so much so that Charles Dickens reportedly was inspired by Irving when making his own holiday classic, A Christmas Carol.

The Grinch stole the box office

It's hard to decide which holiday classic to watch first — or which one will be most popular with the whole family. But when it comes to the box office, the highest-grossing Christmas movie of all time is How the Grinch Stole Christmas starring Jim Carrey.

Santa has his own zip code

Every year, letters to Santa Claus flood post offices across the world. Some Canadian Post Office workers even started answering them — but as more letters arrived, they set up a special zip code for Santa as part of a "Santa Letter-Writing Program" literacy initiative. The postal code? H0H 0H0.

Favorite carols have complicated histories

The original lyrics to "Hark! The Herald Angel Sings" were "Hark! How the Welkin rings!" Pretty catchy, right? (Welkin was an old English term for heaven.) And though "Silent Night" was rumored to be a Christmas miracle by Father Joseph Mohr of Oberndorf, Austria, whose organ was broken, the truth was less dramatic: A Catholic priest wrote the poem "Stille Nacht! Heilige Nacht!" in Mariapfarr, Austria. Two years later, he transferred to Mohr's St. Nicholas Church and asked Franz Gruber to put it to music, which they performed on Christmas Eve 1818.

And the holiday classic "Santa Claus Is Coming to Town" has a less jovial history. Songwriter James "Haven" Gillespie was asked to write a Christmas song. At the time, he was broke, jobless, and mourning his brother's recent death. Despite being overcome with grief, he found inspiration in the holiday memories he and his brother had shared.

Xmas doesn't remove Christ from Christmas

It's quite the opposite, in fact. According to From Adam's Apple to Xmas: An Essential Vocabulary Guide for the Politically Correct, the word "Christianity" was spelled "Xianity" as far back as 1100. X, or Chi, in Greek is the first letter of "Christ" and served as a symbolic stand-in. In 1551, the holiday was "Xtemmas" but eventually shortened to "Xmas."

Americans ship an unbelievable amount of gifts

Last year, on December 22, the U.S. Postal Service delivered a staggering 28.2 million packages — breaking its own record for most parcels ever delivered in a single day in its 237-year history. That's just ONE day of the entire holiday season, too!

Mistletoe was believed to be an aphrodisiac

Stealing kisses used to be just the beginning. The holiday flora is an ancient symbol of fertility and virility — and the Druids believed it was an actual aphrodisiac. (So thank them at the next awkward holiday function.) And the name even has a funny meaning: The mistle thrush bird eats the berries, digests seeds, and the droppings eventually grow into new plants. So, the Germanic word for mistletoe literally means "dung on a twig."

Ham, not turkey, is the festive favorite

The dinner debate rages on. Searches for "ham" and "turkey" both spike during the month of December, according to Google Trends data. (Though it's nowhere near how frequently "turkey" is hunted for online in November!) But despite the popularity of both festive entrees, spiral-cut ham remains the more popular choice for a Christmas table. In 2013, Americans bought 318 million pounds of ham during November and December, or 50% of their annual total consumption.

And the most popular Christmas song is...

The Irish Rovers "Grandma got run over by a reindeer,” naturally. (Fun trivia, is the biggest selling novelty Christmas single of all time in the U.S.) But the best-selling tune of all time is Irving Berlin's standard, "White Christmas."

Employers – Don’t Make These Five Hiring Mistakes

By Randall Orser | Small Business

Hiring staff is probably one of the most talked about things a business person does. It’s not easy and it can be somewhat forgiving. When you’re hiring someone, you have to consider their skill level as well as their personality, and how are you going to incorporate them into your business (on-boarding). We’re looking at the five common hiring mistakes many new employers make.

Narrowing Your Search Too Much

You probably have the image of the ‘perfect’ candidate, however, you’re doing yourself a big disservice as most applicants won’t be that ‘perfect’ fit. Don’t fall into the trap of hiring the same individual every time you need to hire someone. Businesses that are diverse are much more successful. As they say, ‘hire for attitude, not aptitude.’

Going with First Impressions

While first impressions are crucial, they should not be the only basis on which you hire. Too many employers base their hiring decision on whether or not they are impressed at the first meeting, rather than the skills and mindset of the candidate. The most challenging aspects of the hiring process is not knowing if the candidate will perform to your company’s standards once they are hired.

Not Knowing What You Need

You should know what your business needs when it comes to hiring; more than just filling the positions for which you’re hiring. You must be clear on what the job entails in regard to the duties and responsibilities. The worst thing you can do is misled the candidate as you risk a bad hire. You should have a detailed job description, so the candidate knows exactly what they will be doing when hired.

Unclear Hiring Policies

Things change a lot in the world of business, and we’re okay with that. However, for hiring you need to be clear on your hiring policies no matter how many times it’s changed. With unclear hiring policies come mishaps, including confused hiring managers, and perhaps legal trouble. As an employer you need to have a handbook that covers your rules and regulations of your business.

Not Showcasing Your Company Culture

Your potential hires want to know what your business has to offer them. As they’re away from their family for half the day, they want to know what your work environment is like. They want to know about benefits, salary, flexibility, and perks. The last thing a potential hire wants to do is take a financial gamble with your company. By being clear with your hiring intentions, you avoid this mistake.

The perfect employee doesn’t really exist; however, you can get close. The above tips will aid in your hiring process and increase your chances of a good hire.

Are You an Apprentice?

By Randall Orser | Small Business

Have you recently become an apprentice for one of the trades or other? If so, you may be able to get some tax incentives. You can get a credit for the tools you have to buy, as well as the tuition and books you need to do the schooling for your trade.

Tradesperson’s Tools deduction

If you have purchased eligible tools to earn employment income as a tradesperson or apprentice, you may be able to deduct their cost, including any goods and services tax (GST), provincial sales tax (PST) or harmonized sales tax (HST) you paid.

An eligible tool is a tool (including associated equipment such as a toolbox) that:

  • you bought to use in your job as a tradesperson and was not used for any purpose before you bought it;
  • your employer certified as being necessary for you to provide as a condition of, and for use in, your job as a tradesperson; and
  • is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating).

Maximum deduction for eligible tools is the lesser of:

a) $500; and

b) the amount, if any, determined by the formula

A − $1,161 where

A = the lesser of:

1. the total cost of eligible tools that you bought in 2016; and

2. your income from employment as a tradesperson for the year

  • plus, the amount you received in 2016 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs;
  • minus the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2016.

You are an eligible apprentice mechanic if you:

  • are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles); and
  • are employed as an apprentice mechanic.

Eligible Apprentice Mechanic

As an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction (above), if any, that you qualify for.

You are an eligible apprentice mechanic if you:

  • are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles); and
  • are employed as an apprentice mechanic.

An eligible tool is a tool (including associated equipment such as a toolbox) that:

  • you bought to use in your job as an eligible apprentice mechanic and was not used for any purpose before you bought it;
  • your employer certified as being necessary for you to provide as a condition of, and for use in, your job as an eligible apprentice mechanic; and
  • is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating).

Tuition Tax Credit and licensing examination fees

If you have eligible tuition fees, as well as certain licencing examination fees, you may be able to claim them on your income tax and benefits return.

Examination fees paid to an educational institution, professional association, provincial ministry or other similar institution, to take an occupational, tradeor professional examination that is required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified as a tradesperson, to allow you to practice the profession or trade in Canada, may be eligible for the tuition tax credit. You should be provided with a receipt to substantiate your eligible exam fees. To view the information that should be contained in the receipt go to example of a receipt for licensing examination fee.

If you have more than one tax certificate, you can claim all amounts that are more than $100.

You cannot claim the tuition amount on your tax certificate if any of the following applies to you:

  • the fees were paid or reimbursed by your employer, or an employer of one of your parents, where the amount is not included in your or your parent's income;
  • the fees were paid by a federal, provincial, or territorial job training program, where the amount is not included in your income;
  • the fees were paid (or eligible to be paid) under a federal program to help athletes, where the payment or reimbursement has not been included in your income.

Education amount

You will have received a tax certificate from your educational institution indicating the number of months you were enrolled full-time (Box C) or part-time (Box B).

Full-time – Box C

For tax years prior to 2017, multiply $400 by the number of months indicated in Box C.

You can also claim the full-time amount if one of the following applies to you:

  • you were enrolled as a full‑time student;
  • you were enrolled part-time and you can claim the disability amount; or
  • you were enrolled part-time and you had a mental or physical impairment certified in a letter by a medical doctor, optometrist, audiologist, occupational therapist, psychologist, physiotherapist, or speech-language pathologist but you do not qualify for the disability amount.

Part-time – Box B

For tax years prior to 2017, multiply $120 times the number of months indicated in Box B.

You cannot claim the education amount if you:

  • received a grant, reimbursement, benefit, allowance or were reimbursed for the cost of your courses by your employer or another person with who you deal at arm's length;or
  • received a benefit as part of a program (such as free meals and lodging from a nursing school).

Textbook amount

You can claim only one textbook amount for each month that you qualify for the full-time or the part-time education amounts.

You can claim the textbook amount only if you can claim the education amount.

The amount is:

  • $65 times the amount in Box C of the certificate you received from your school; or
  • $20 times the amount in Box B of the certificate you received from your school.

This credit may disappear after 2017 tax year.

As an apprentice you have some great deductions you can claim against your income, and you should definitely take advantage of them come tax time. Just remember to keep receipts, and you have to have your employer sign a T2200 Declaration of Conditions of Employment.