Advisory Board - Should You Have One?
Entrepreneur.com defines an advisory board as a group of individuals who've been selected to help advise a business owner regarding any number of business issues, including marketing, sales, financing, expansion and so on. Essentially they help you to run your business better. Here's a little advice from some local fempreneurs to a burning question you might have pondered yourself.
My business is going well and I'm pulling out a good salary, but I want to increase the overall profitability. What advice can you offer?
ADVICE FROM AN EXECUTIVE COACH
Heather Erhard | Executive Coach | Erhard Associates
Before looking at how you can increase profitability, I would suggest first asking yourself a few questions. What is your current level of satisfaction with your work and your life in general? Think about the various aspects of your life - career, work/life balance, family, friends, recreation, money, health, etc., and on a scale of one to ten, rate your satisfaction in each area. What needs more attention? Where are you satisfied?
Next think about your definition of success. What does success look like to you? What is important?
Then, think about what increased profitability will give you (besides more money). What will be different? What opportunities will open for you? Imagine you are at your desired profitability level. What would be exciting about that? What would life be like? How would you feel? What about this is important to you?
Now you are ready to decide if that is what you really want. If it is, ask yourself a few more questions. What has led to your success up to now? How might that limit you in moving to the next level? Think about some actions that will take you in a new direction, or consider what areas you need to focus on to bring greater satisfaction with the present.
ADVICE FROM A CHARTERED ACCOUNTANT
Mabel Wieler, FCGA | Mabel Wieler Certified General Accountant | Professional Corporation
Here is one bold solution to help increase your overall profitability: Fire 20% of your customers.
Focus your marketing and support budget on your most profitable customers. By limiting spending on less profitable customers, you increase the impact of your budget and increase your overall profitability. Determine what types of customers result in higher profits and proactively attract similar customers. For example, if you find that medium-sized businesses in the construction industry buy your most profitable products and services, market heavily to construction companies. Additionally, encourage your top customers to purchase more often by offering additional goods or services. For consumable goods, offer a discount for routine orders and call customers who have not made a recent purchase.
Target your ideal clients. Who are your best customers? Do you get many repeat sales? Referrals? What demographic tends to spend the most or spend the most often? Figure out what group(s) your best potential new customers are part of.
Then get rid of the 20% of your customers who provide the lowest profitability. This frees up capacity and resources to do work that is more profitable.
ADVICE FROM A MARKETING PROFESSIONAL
Laura Hawkins | President | Picante Advertising
Take time to analyze your customer/revenue base. A general rule of thumb is that 80% of your business revenue comes from 20% of your customers/clients. Once you have identified your most profitable customers, look for commonalities in terms of demographics, geography, personality etc. Be as precise as you can about what sets these particular customers apart and get a good, clear picture in your mind of who they are. Then create a plan for increasing your marketing and advertising or your cold calling and networking directly to new customers who share common characteristics. Keep your message specific and focused as to why these potential customers should patronize your business. Be intuitive. No one knows your business like you do. Identify communication tools that allow you to invest wisely, i.e. those that can be proven to reach your subjects with as little spillover and waste as possible. Whether you choose to use direct mail, radio, outdoor, television, newspaper, online or cold calling, the more clearly you understand your most profitable customer base, the more successful you will be in reaching them with your persuasive arguments.
Christine Dubyts is crazy about marketing and helping businesses stay in business, grow and prosper. As a fempreneur she has a special interest in working with other women business owners with their marketing and business growth efforts.
