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Companies can live and die by the quality of their sales force. A dazzling sales team can generate tremendous sales for an average product or service, but a clumsy sales team might not be able to do much with even a first-rate offering. Hire in-house salespeople. You might be tempted to hire outside agents who represent products from different sellers. But an in-house sales force offers you direct control over your team, and lets you take an active role in planning and executing a sales strategy. In addition, in-house salespeople work for you and only you ² their primary goal is to sell your company's goods or services. Outside agents, by contrast, sell many products from various sellers, and have weaker ties to your firm. Remember that you'll have to pay 100 percent of the expenses associated with an inhouse sales force, so make sure your company's offerings will sell well enough to support those costs. Hire carefully. A lot of people think they can sell ice cubes to Eskimos ² but truly great salespeople are few and far between. look for salespeople with these characteristics: 1. Highly motivated by money 2. Eager to learn 3. Self-confident 4. Appreciative of a challenge 5. Persistent 6. Competitive 7. Able to cope with rejection 8. Great listening skills 9. Physically and mentally energetic. Spell out your expectations. Be sure to discuss sales goals. It might help to draft a contract that lists what your company will do for the salesperson, and vice versa. Spell out your expectations. Be sure to discuss sales goals. It might help to draft a contract that lists what your company will do for the salesperson, and vice versa.
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Train the more you train your salespeople, the better they'll be at answering customers' questions and making sales. Your sales professionals should possess detailed knowledge of your products, the competitors' products, and the market in which those products are sold. They'll also need the training it takes to understand their customers' needs, practices, and concerns. Hold regular training sessions, and encourage your team to attend outside training classes, as well as sales and industry-related seminars. Motivate your team with a strong compensation system. Design your company's compensation plan before you hire anyone. A commission-based approach usually works best, but it should include a base salary. That way, a salesperson is guaranteed a minimum income ² which can help morale during slow times. You can find compensation standards by contacting your industry's trade association. Make the most of nonfinancial motivators. Employees like to be recognized for good work, and to feel that their supervisors listen to and act to solve problems. It's also important to make your employees feel as though they're part of a team. And don't forget the power of benefits ² paid holidays, or a good maternity leave package, or medical and dental benefits ² can go a long way toward retaining the best people.

Management points Managers come from different walks of life, possess various characteristics, and have their own philosophies regarding how to manage a business and employees. In a broad sense, there are common mistakes made by managers at different levels and in various types of businesses. The following are 10 of the most common management mistakes. 1. Putting policies ahead of people. The smaller the organization, the larger the mistake this is. Policies are made to be followed, within reason. Some flexibility with employees, particularly in a small company, is important. An even bigger mistake is standing behind policies at the expense of losing loyal customers. Weigh the significance of standing behind your policy in each situation. If it is a matter of physical safety or security, policies must be upheld. However, in many

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other instances, there are reasonable solutions that will not alienate the customer or create a strained relationship with your employee(s). 2. Lack of communication. In any industry, at any level, communication is the key to being a successful manager. Employees need to know what is expected of them and when specific projects or tasks need to be completed. Communication needs to be clear, and any questions that arise need to be answered. 3. Failing to hear what your employees have to say. Managers make the mistake of listening but not always hearing what their employees are saying. To manage effectively, you need to understand the needs and concerns of your employees. 4. Not acknowledging that you do not have all the answers. A good manager does not make the mistake of trying to solve every problem. Seeking help from individuals with expertise in specific areas is a sign of strength, not weakness. In addition, a good manager must understand that his or her way is not the only way to do the job. 5. The glass is always half empty. Manager who continually focus on the negatives, without recognizing positive achievements or employee accomplishments, end up with employees who are not motivated and often have one foot out the door looking for a more positive work environment. 6. Not accepting responsibility. A common mistake made by managers is to either delegate blame or simply not accept responsibility for that which happens under their guidance. Eventually, avoiding responsibility will catch up with a manager and usually not bode well for his or her future. Being in charge means taking responsibility for whatever happens. 7. Favoritism. Once a manager has obvious favorites, he or she loses credibility and the respect of the rest of the team. 8. Just do it. The Nike slogan does not work when employees are trying to gain an understanding of the process or project. Rather than expecting your team to simply work blindly on tasks they do not understand, a good manager takes the time to explain what the project is all about and how the team's work is

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incorporated into the plan. Remember, the more the team is invested in a project, the better the results will be. 9. Too much technology. New breed of managers are more tech-sense than they are comfortable handling and managing people. Embracing technology is a key to success in the modern office environment, but not at the risk of embracing people skills. Do not hide behind e-mails and other technology. 10. Never change. In a rapidly changing business environment, not being open to change can be a major mistake. While you may stick to tried-and-true methods in some areas, you should consider and weigh the value of change in others. Above all, be flexible.

Managing Large companies effective Watching your company grow can be both exhilarating and terrifying. You enjoy the revenue, but also worry about keeping up with the demand. And what about your staff, especially when it grows so large that you¶re in danger of forgetting people's names? How can you be certain your people are getting what they need to do their jobs well? Follow these surefire tips for effectively managing a large staff:
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Pay attention. It¶s easy to focus on your own work when you have a large and able staff supporting you. But if you neglect your people for too long, you could be in trouble. It¶s important to pay attention to how your people are doing. Are they overtaxed ² consistently working long hours and/or taking work home? Are you articulating the company¶s direction in a way they understand? Learn how to tolerate growing pains. Before you can withstand the pangs of growth, you must ask yourself questions like, ³Is my company ready for expansion?´ ³How can I prepare my employees for growth?´ ³What kinds of problems do I foresee, and do I have adequate resources to handle them properly?´ Accommodating growth doesn¶t occur overnight; you must become comfortable with the process of managing your growth.

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Implement a solid system for performance appraisals. No matter how skillful your staff may be, you must always provide a mechanism for employee evaluations. With a small staff it¶s easier to conduct informal reviews, but as you add more people, this task becomes more challenging. Do yourself and your employees a favor by putting into practice an appraisal system that¶s right for your company ² one that truly facilitates understanding between you and your employees. Consider adding peer reviews and self-reviews to your mix.

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Match people with projects. With a large staff, it is easy (even tempting) to assume people are doing their appropriate tasks adequately. Let¶s face it: it¶s not easy to keep up with what¶s on everyone¶s plate. One way to avoid losing track is to make sure you match people with the right projects. If someone is mismatched with a particular task, that could slow down the whole company. Effectively aligning your resources with the appropriate function adds to the company¶s efficiency, which ultimately affects the bottom line. Division of labor becomes critical as your staff grows. Commit to training and development. Identifying appropriate educational opportunities, and making them available, lets your people know that you¶re interested and invested in their professional development. Providing them with the tools to do their best work will keep them motivated and increase their loyalty to the company. Create a collaborative and friendly culture. It¶s just a fact of life: the more people you have, the greater the chance of conflict. Create a workplace characterized by mutual trust and respect. High ethical standards should be the norm, and those who cannot abide by company rules should face the consequences. Be consistent and firm but respectful, too. Communicate what's expected, and demonstrate your commitment to that standard. Simulate a small staff environment when you can. Occasionally, you might hear someone grumbling about the size of your staff: ³I don¶t know anyone anymore´ or ³Who¶s that?´ You can¶t stop growth (well, you can, but you probably don¶t want to), but you can simulate a ³small office´ ambiance. Get everyone together for a

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spontaneous ice cream social, distribute an e-mail newsletter announcing all new hires (including some background on them), and make sure you know

Develop the technology

While most small businesses require technology to grow, they are also likely to have tight budgets and be unable to invest in "pie in the sky" IT projects with no guaranteed returns. That's why it's important to lay down a technology investment strategy that aligns with the specific goals of your organization. Begin by looking at your business strategy over the next two to three years and determine in which areas you plan to grow, change, or improve. It will be easier to identify technologies that can help your business if you have a clear picture of where you're heading and what steps you must take to get there. Once you've set down your business strategy, you should appoint a member of your organization to track IT trends and advancements in the marketplace. With the explosion of possible technologies available to you, it can be helpful to have someone on your team who is on top of the current products and trends. Sit down with this person and list the key technology areas they should be monitoring based on your business needs. For example, these areas could include business applications, data warehousing, Web services, or wireless technologies. By creating this list you can begin to assess which technologies are likely to impact your business. Do any of the technologies you've listed present growth opportunities or offer significant improvements in performance or customer service? Are other players in your industry using these technologies to enhance their businesses, and if so, how? This list of technologies and opportunities is a way for you to narrow down your technology requirements and come up with a well-thought-out investment plan.

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Once you have some technology projects in mind, talk to a trusted IT advisor and run a cost/benefit analysis. (If you don't already have an advisor, be sure to read How to Choose an IT Consultant.) Look carefully at your technology budget over the next few years, taking into account the cost of maintaining and supporting the IT you already have. Create a short list of IT investments that you can not only afford, but will also help you achieve your stated business goals. Prioritize these investments according to the benefits they will give your business and then start to look at factors such as the time it will take to implement and test the new technologies, the staff required to support them, and any necessary training. The project that offers the greatest benefit may also be the one that requires the most time, money, and staff. Investing in one large project may mean you don't have the resources to invest in others, so you will want to do a risk analysis of any significant project you consider undertaking. Technology projects are notorious for running over time and budget, so make sure to plan for possible overruns. It's better to have a realistic idea of the costs you could be facing. If the project comes in on time and on budget, it will be a pleasant surprise! Finally, continue to update your IT investment plan and monitor new technology developments. The last thing you want is an aged IT strategy that misses out on the current opportunities in the marketplace. Keep in constant communication with your trusted IT advisor, and once you embark on a project, update your investment plan with new deadlines or cost estimates. Keep in mind that while most recognize that technology advances at a rapid pace, many small business owners neglect to plan for technological obsolescence. Read Anticipate Obsolescence When Planning Your Technology Investment Strategy for some good advice.

Create a short list of IT investments that you can not only afford, but will also help you achieve your stated business goals. Prioritize these investments according to the
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benefits they will give your business and then start to look at factors such as the time it will take to implement and test the new technologies, the staff required to support them, and any necessary training. The project that offers the greatest benefit may also be the one that requires the most time, money, and staff. Investing in one large project may mean you don't have the resources to invest in others, so you will want to do a risk analysis of any significant project you consider undertaking. Technology projects are notorious for running over time and budget, so make sure to plan for possible overruns. It's better to have a realistic idea of the costs you could be facing. If the project comes in on time and on budget, it will be a pleasant surprise! Finally, continue to update your IT investment plan and monitor new technology developments. The last thing you want is an aged IT strategy that misses out on the current opportunities in the marketplace. Keep in constant communication with your trusted IT advisor, and once you embark on a project, update your investment plan with new deadlines or cost estimates. Keep in mind that while most recognize that technology advances at a rapid pace, many small business owners neglect to plan for technological obsolescence. Read Anticipate Obsolescence When Planning Your Technology Investment Strategy for some good advice. Performance reviews

Annual performance reviews can be stressful for both employees and managers. Here are some simple but effective tactics to help minimize your employees' anxiety and ensure reviews are both fair and effective:
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Explain the process ahead of time. Ideally, whenever you hire an employee you should explain the details of the performance review process ² how often these meeting occur, how they are conducted, and what the employee can expect during

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the discussion. Put these details in writing for easy reference. This way, the review conversation will have a structure that is clear to both you and your employee.
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Schedule the review together. Some employers blindside their workers by springing a review on them without much advance notice. This is a poor tactic, as it puts the employee on the spot and denies them the opportunity to think through their accomplishments, objectives, and questions. A far better approach is to schedule the meeting with the employee in advance and even share your proposed conversation agenda ahead of time. The employee will come into the room feeling prepared and confident, and will be much more inclined to engage in an honest, productive conversation with you. Flag any trouble spots in advance. If you unleash a series of aggressive questions and complaints regarding a performance shortfall during the actual meeting, you are sure to get a defensive, underdeveloped response in return. Difficult as it might be to talk with an employee about their inability to hit their professional marks, it is much more awkward when they enter the review under the mistaken impression that things are fine. A smart tactic is to tip them off before the date of the review by saying something to the effect of "We'll need to discuss why goals X, Y, and Z were not met this year. Please come into the conversation having given that some thought, so that we can work together on a solution." Have employees conduct self-reviews. In addition to the traditional managerdelivered review, employee self-reviews are a new and viable alternative that are becoming more and more prevalent in the workplace. Consider having your employee provide you with a self-review in advance of your formal meeting. You can gain valuable insight into what the employee is thinking and use this to craft your later discussion. Read the Benefits of Employee Self-Reviews to learn more. Bring reviews into the round. Rather than have a one-way review process (a manager reviewing an employee), consider a "360 degree review" in which the employee also has the opportunity to evaluate your effectiveness as a manager. Have the employee fill out a brief questionnaire rating your management skills. Or you can simply alert the employee in advance that, during the review, the floor will be open to a discussion regarding your management techniques ² what works for

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the employee and what doesn't. Encourage the person to suggest ways that you could manage them more effectively going forward. In addition, invite your employee to create a "wish list" of how he or she might expand upon or develop his or her job duties.
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Don't begin on a down note. It is important to keep in mind that your opening remarks will set the tone for the rest of the meeting. Starting a review by diving immediately into the employee's failings is a sure way to start the conversation off on a sour note and set up a barrier between the two of you. Even if you must analyze performance shortcomings, a better approach is to initiate the conversation by highlighting the positive aspects of the employee's performance over the past year. The eventual conversation about what is not up to snuff will feel less dire, and, as a result, the employee will be more likely to listen and work with you toward a solution. Hatch a plan. A review shouldn't simply be about rating an employee's performance. It should be a springboard from which the employee can grow and advance in the company. For every criticism, provide suggestions on how he or she could improve in the coming year. Working together can develop tactical, concrete approaches to overcome shortcomings. Let the employee see that you are interested in helping them develop and succeed. Inspire them to excellence by indicating that improvements will be rewarded with enhanced responsibilities. Knowing that your manager is on your side can be a powerful motivator. Don't let the conversation stop. A formal review meeting is a good opportunity to stop and "check in" with your employee, but you should also strive to sustain an ongoing conversation about job performance throughout the year. By making the review process less formal, communication between the manager and the employee will improve. Allow the employee some time to ponder what was said during the review meeting, and then come back to the table to discuss any resulting questions or ideas that may not have come to mind during the initial conversation.

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If you are an employee and need advice on how to turn your review into a positive experience that inspires you to improve and advance your career, check out Maximize Your Year-End Performance Review.

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Bring reviews into the round. Rather than have a one-way review process (a manager reviewing an employee), consider a "360 degree review" in which the employee also has the opportunity to evaluate your effectiveness as a manager. Have the employee fill out a brief questionnaire rating your management skills. Or you can simply alert the employee in advance that, during the review, the floor will be open to a discussion regarding your management techniques ² what works for the employee and what doesn't. Encourage the person to suggest ways that you could manage them more effectively going forward. In addition, invite your employee to create a "wish list" of how he or she might expand upon or develop his or her job duties. Don't begin on a down note. It is important to keep in mind that your opening remarks will set the tone for the rest of the meeting. Starting a review by diving immediately into the employee's failings is a sure way to start the conversation off on a sour note and set up a barrier between the two of you. Even if you must analyze performance shortcomings, a better approach is to initiate the conversation by highlighting the positive aspects of the employee's performance over the past year. The eventual conversation about what is not up to snuff will feel less dire, and, as a result, the employee will be more likely to listen and work with you toward a solution. Hatch a plan. A review shouldn't simply be about rating an employee's performance. It should be a springboard from which the employee can grow and advance in the company. For every criticism, provide suggestions on how he or she could improve in the coming year. Working together, develop tactical, concrete approaches to overcome shortcomings. Let the employee see that you are interested in helping them develop and succeed. Inspire them to excellence by

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indicating that improvements will be rewarded with enhanced responsibilities. Knowing that your manager is on your side can be a powerful motivator.
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Don't let the conversation stop. A formal review meeting is a good opportunity to stop and "check in" with your employee, but you should also strive to sustain an ongoing conversation about job performance throughout the year. By making the review process less formal, communication between the manager and the employee will improve. Allow the employee some time to ponder what was said during the review meeting, and then come back to the table to discuss any resulting questions or ideas that may not have come to mind during the initial conversation.

If you are an employee and need advice on how to turn your review into a positive experience that inspires you to improve and advance your career, check out Maximize Your Year-End Performance Review. Budgeting Most companies don¶t use budgets to help them meet profit goals. Why? Because most owners and chief executive officers reason that the effort required to learn how to build and use workable budgets is just too much. They seem to feel that learning how to budget is more frustrating than just hoping the numbers will all work out -- if they only sell enough widgets, services, or whatever. That¶s a mistake. The fact is, budgeting is the most effective way to consistently meet profit targets and avoid costly surprises. Budgeting helps you invest your resources to your company¶s best advantage by using careful consideration rather than responding to the urgent need to make some kind of move right now. Owners and CEOs need to begin controlling the bottom line with some of the same tools they use to control the top line, and budgeting is the first step. Consider these eight tips to help you become a better budgeter. 1. Take the time to do it right. A budget is not a sales forecast you put together on the weekend to impress your banker. It must be the result of coordinated input and effort by you and your management team. That budgeting is a project that
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requires some time and thought, just like any other project your company takes on. 2. Practice, practice, practice. Regardless of how tough it may be to estimate the future, your forecasting accuracy will improve, and you¶ll be better able to control the results if you actively use a budget. Practice does make (almost) perfect. 3. Don¶t think your company is the exception. Any business can be budgeted. The only question is how much practice it takes to strike a balance between the time invested and your forecasting accuracy. Remember that a startup has to be forecasted and budgeted in order to get financial backing. This includes companies trying to do something that¶s never been done before. 4. Use a Gantt chart. This is an expanded timeline that tracks deliverable dates for budget completion. It will tell you if you¶ve scheduled too much to be completed in too short a time given other business activities that also require your team¶s participation. 5. Don¶t try to budget to the last penny. Predicting exact results down to the penny is not the objective. Rather, budgeting is more about giving your employees a direction to use for course corrections at a level of detail where it matters. If you try to forecast every last expense no matter how small, the details will drive you crazy. 6. Make tradeoffs when necessary. You have finite resources available to you. If you must spend money for something you didn¶t budget, decide what budgeted expenses can be removed to ³finance´ the new item. Without this discipline, you will almost always overspend, because there are always good reasons to spend money. They don¶t always produce more profit, however. 7. Set both profit and cash flow targets. These two measures are very different and require different kinds of gauging and monitoring to prevent unpleasant surprises. Don¶t believe it? Keep in mind that every year businesses with great profits fail due to a lack of cash. 8. Ask three questions to assess your results. With budget comparisons in hand, ask your team these three sets of questions at the end of every month: (1) How are we doing compared to the budget? If the results are different from the
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plan, why did this happen? (2) What must we do now to have a better result next month? How can we keep the positive differences and avoid the negative ones? (3) What are we learning that will help make next year¶s budget better? Follow these tips and your income statement will be more informative, your bottom line is more appealing, and your stress level a good deal lower.

1. Don¶t try to budget to the last penny. Predicting exact results down to the penny is not the objective. Rather, budgeting is more about giving your employees a direction to use for course corrections at a level of detail where it matters. If you try to forecast every last expense no matter how small, the details will drive you crazy. 2. Make tradeoffs when necessary. You have finite resources available to you. If you must spend money for something you didn¶t budget, decide what budgeted expenses can be removed to ³finance´ the new item. Without this discipline, you will almost always overspend, because there are always good reasons to spend money. They don¶t always produce more profit, however. 3. Set both profit and cash flow targets. These two measures are very different and require different kinds of gauging and monitoring to prevent unpleasant surprises. Don¶t believe it? Keep in mind that every year businesses with great profits fail due to a lack of cash. 4. Ask three questions to assess your results. With budget comparisons in hand, ask your team these three sets of questions at the end of every month: (1) how are we doing compared to the budget? If the results are different from the plan, why did this happen? (2) What must we do now to have a better result next month? How can we keep the positive differences and avoid the negative ones? (3) What are we learning that will help make next year¶s budget better? Follow these tips and your income statement will be more informative, your bottom line is more appealing, and your stress level a good deal lower.

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Employees Risk management

As work environments become safer, the number of workers' compensation claims continues to decline. At the same time, the cost per claim has continued to rise along with the rising cost of health care in general, making the business costs substantial. Along with death and taxes, workers' compensation is something every small business owner with employees must deal with. As of September 2008, figures from the U.S. Department of Labor's Bureau of Labor Statistics show that businesses spend an average of $28.87 per hour for each employee. This includes salary, as well as benefit expenses such as health insurance, vacation time, and workers' compensation benefits. Overall, 69.7 percent (or $20.13) of the hourly compensation given to employees goes toward salary, and 30.3 percent ($8.74) goes toward benefits, with 1.6 percent ($0.47) of that benefit percentage making its way to workers' compensation. Although 47 cents an hour doesn't sound like much, it adds up over time and can severely impact your business expenses, particularly if this per-hour amount increases. Job classification is the main factor determining the cost of your premiums. Roofers and construction people, who work around heavy equipment, have the highest risks, whereas office workers have the lowest risk. The basic rates for each job classification are set by each individual state, but there are more guidelines for insurance carriers to follow than there are rules. By working with your risk management insurance carrier, you can implement both preand post-claims programs that will reduce your workers' compensation costs overall. Besides implementing procedures that make your business a more desirable client in terms of insurance rates, you can save even more on your risk management costs by implementing the following practices:

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When paying an employee time and a half for overtime, you may only have to report the regular wages, decreasing the amount of payroll that determines your insurance premiums. Implement programs that bring workers back into the workforce at a faster rate, even if it means bringing them back part time or in a limited capacity. Rising workers' compensation costs are primarily due to increased use of benefits and longer duration of disability. The more time an employee spends on disability, the more wage replacement and medical services increase in cost. Look for a pattern to claims. Do some locations or areas in your business have fewer claims than others? Determine the reason why. Reducing the number of workers' compensation claims gives your business a better safety record. This makes you a much better risk to an insurance company, making it more likely they will give you better rates in the long run. Overall, this is the best way to reduce your risk management expenses.

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Checklist: Additional Factors in Insurance Premiums The workers' compensation insurance premium is negotiated between the business and the insurance carrier and can be increased or reduced depending on factors that insurance companies consider when calculating workers' compensation premiums. These factors include the following: Proclaims Programs
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Level of employee health insurance offered by the employer Performance of regular safety checks Encouragement and reinforcement of safe working behavior in employees Emphasis on the use of safety procedures and proper equipment Instruction manuals that detail safety procedures Promotion of effective new-hire selection processes Employee education and training Management accountability Elimination of employee risk taking

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Post-Claims Programs
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Employer's safety record Elimination of hazards that cause injuries Consistent internal policies and medical referral procedures Return-to-work programs

Tip: Double-Check Job Classification Codes A common but easily avoided classification error that affects workers¶ compensation is to assign the code of office clerk to all administrative personnel. Not all administrative personnel perform the same job duties, and there are different classifications that carry different levels of risk. A file clerk, for example, typically doesn't use a keyboard. A data entry clerk, on the other hand, usually sits in front of a keyboard and a computer all day long and runs a much higher risk of carpal tunnel injury. To be certain you're classifying employees correctly, use the most up-to-date classification code book for your state and thoroughly familiarize yourself with the appropriate codes for your employees.
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Implement programs that bring workers back into the workforce at a faster rate, even if it means bringing them back part time or in a limited capacity. Rising workers' compensation costs are primarily due to increased use of benefits and longer duration of disability. The more time an employee spends on disability, the more wage replacement and medical services increase in cost. Look for a pattern to claims. Do some locations or areas in your business have fewer claims than others? Determine the reason why. Reducing the number of workers' compensation claims gives your business a better safety record. This makes you a much better risk to an insurance company, making it more likely they will give you better rates in the long run. Overall, this is the best way to reduce your risk management expenses.

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Checklist: Additional Factors in Insurance Premiums The workers' compensation insurance premium is negotiated between the business and the insurance carrier and can be increased or reduced depending on factors that
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insurance companies consider when calculating workers' compensation premiums. These factors include the following: Proclaim Programs
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Level of employee health insurance offered by the employer Performance of regular safety checks Encouragement and reinforcement of safe working behavior in employees Emphasis on the use of safety procedures and proper equipment Instruction manuals that detail safety procedures Promotion of effective new-hire selection processes Employee education and training Elimination of employee risk taking

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Post-Claims Programs
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Employer's safety record Elimination of hazards that cause injuries Consistent internal policies and medical referral procedures Return-to-work programs

Tip: Double-Check Job Classification Codes A common but easily avoided classification error that affects workers¶ compensation is to assign the code of office clerk to all administrative personnel. Not all administrative personnel perform the same job duties, and there are different classifications that carry different levels of risk. A file clerk, for example, typically doesn't use a keyboard. A data entry clerk, on the other hand, usually sits in front of a keyboard and a computer all day long and runs a much higher risk of carpal tunnel injury. To be certain you're classifying employees correctly, use the most up-to-date classification code book for your state and thoroughly familiarize yourself with the appropriate codes for your employees. Advantage for factoring and leasing

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Most business owners who have been in business for any length of time understand the power of financial leverage. It¶s especially important for manufacturing companies, which usually require a significant investment in equipment, raw materials, and inventory before they can begin generating revenue. The key to success for most manufacturers is to spend as little out of pocket as possible on these necessities, thus preserving cash flow for the actual operation of the business. When used properly, financial leverage helps manufacturers achieve that goal. Two particular kinds of leverage can be especially beneficial for manufacturers: factoring and leasing. And when used together, factoring and leasing provide a powerful one-two commercial financing punch. Leasing ³All businesses are built on cash flow and leverage, especially manufacturers,´ says Andrew Kaplan, the president of United Financial Group in Maitland, Fla., which specializes in equipment leasing. ³It doesn¶t make sense for them to use all their cash to pay upfront for something that¶s going to generate income when they can lease it instead. Also, if they spend all their cash on equipment, there¶s nothing left over for materials, inventory, payroll, overhead, etc.´ When leasing, you make a small down payment and then make monthly payments on the equipment, usually for five years or less. When the lease term is up, you can own the equipment by making a minimal buyout payment (often just $1). And because a lease is expensed rather than capitalized, there are tax benefits to leasing compared to buying equipment. ³Leasing helps companies preserve cash and manage it more effectively,´ says Steve Fix, a principal with Lease Source in Atlanta, Ga. ³We¶ve done equipment leasing for Fortune 500 companies that could write a check for a hundred grand without blinking an eye but recognize the cash flow benefits leasing provides.´ Factoring

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Like leasing, factoring can be an important cash flow management tool. In the same way that it¶s usually not smart to lay out cash to buy equipment, it often doesn¶t make sense to carry your accounts receivable, especially for slow-paying customers that may not pay for 60 to 90 days or more. By factoring accounts receivable, businesses accelerate their cash receipts drastically while also outsourcing credit and collections, thus freeing up owners to spend more time concentrating on core competencies. ³Factoring and leasing go hand in hand,´ Fix says. For a manufacturing company, it might look something like this: XYZ Manufacturing Co. needs to buy a new computed numerically controlled machining center to take advantage of a government contract it¶s just landed. The cost of the machine is $100,000. While the company does have the cash to purchase this equipment outright, it can lease it instead with a down payment of, say, $5,000 and regular payments over the next five years. At the same time, the company will need to purchase a large amount of raw inventory, prepare its shop for the new machine, and hire another employee before it can begin the new contract. Like many companies in similar situations, XYZ is cash poor but work wealthy. In addition, XYZ has outstanding accounts receivable totaling $75,000 from customers that typically pay in 60 to 90 days. By selling these invoices to a factoring company, it will receive up to 90 percent of the outstanding accounts receivable (or more than $67,000) within a matter of days to begin fulfilling its new government contract. In this example, using factoring and leasing together helps XYZ Manufacturing turn a profitable new opportunity into reality quicker and more precisely than it could with any conventional financing a bank could provide. ³When properly maintained, equipment will still be making money for a business for many years after it has been paid for,´ says Kaplan. ³Every manufacturing business will eventually reach a threshold where it can¶t grow anymore due to a lack of capacity. Factoring and leasing can help companies expand beyond this threshold.´

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Trucking is another example of an industry that commonly uses factoring and leasing together, with good results. Trucks are usually leased with a small down payment as a way to conserve cash, and invoices are usually factored to accelerate collections and provide the cash needed to keep trucks rolling. Automatic Cash Flow The bottom line is that it can be much easier to manage a business financially by using factoring and leasing together, because all you have to do is concentrate on your margin. Your cost to lease and operate a machine is fixed each month, along with your factoring cost, so it¶s easy to set prices that ensure the level of profitability you desire. Meanwhile, you¶ve created a scenario in which cash flow to your business is virtually automatic and you can keep growing as fast as you can sell products. Need a new machine? No problem, lease it. Need to collect receivables faster in order to keep the machine running? No problem, factor them. In today¶s fast-paced business environment, where conditions change on a dime and opportunities often arise with little or no warning, companies must be nimble and flexible. Using factoring and leasing together can provide the powerful one-two commercial financing punch you need to succeed. Factoring Like leasing, factoring can be an important cash flow management tool. In the same way that it¶s usually not smart to lay out cash to buy equipment, it often doesn¶t make sense to carry your accounts receivable, especially for slow-paying customers that may not pay for 60 to 90 days or more. By factoring accounts receivable, businesses accelerate their cash receipts drastically while also outsourcing credit and collections, thus freeing up owners to spend more time concentrating on core competencies. ³Factoring and leasing go hand in hand,´ Fix says. For a manufacturing company, it might look something like this: XYZ Manufacturing Co. needs to buy a new computed numerically controlled machining center to take advantage of a government contract it¶s just landed. The cost of the
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machine is $100,000. While the company does have the cash to purchase this equipment outright, it can lease it instead with a down payment of, say, $5,000 and regular payments over the next five years. At the same time, the company will need to purchase a large amount of raw inventory, prepare its shop for the new machine, and hire another employee before it can begin the new contract. Like many companies in similar situations, XYZ is cash poor but work wealthy. In addition, XYZ has outstanding accounts receivable totaling $75,000 from customers that typically pay in 60 to 90 days. By selling these invoices to a factoring company, it will receive up to 90 percent of the outstanding accounts receivable (or more than $67,000) within a matter of days to begin fulfilling its new government contract. In this example, using factoring and leasing together helps XYZ Manufacturing turn a profitable new opportunity into reality quicker and more precisely than it could with any conventional

When properly maintained, equipment will still be making money for a business for many years after it has been paid for,´ says Kaplan. ³Every manufacturing business will eventually reach a threshold where it can¶t grow anymore due to a lack of capacity. Factoring and leasing can help companies expand beyond this threshold.´ Trucking is another example of an industry that commonly uses factoring and leasing together, with good results. Trucks are usually leased with a small down payment as a way to conserve cash, and invoices are usually factored to accelerate collections and provide the cash needed to keep trucks rolling. Automatic Cash Flow The bottom line is that it can be much easier to manage a business financially by using factoring and leasing together, because all you have to do is concentrate on your
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margin. Your cost to lease and operate a machine is fixed each month, along with your factoring cost, so it¶s easy to set prices that ensure the level of profitability you desire. Meanwhile, you¶ve created a scenario in which cash flow to your business is virtually automatic and you can keep growing as fast as you can sell products. Need a new machine? No problem, lease it. Need to collect receivables faster in order to keep the machine running? No problem, factor them. In today¶s fast-paced business environment, where conditions change on a dime and opportunities often arise with little or no warning, companies must be nimble and flexible. Using factoring and leasing together can provide the powerful one-two commercial financing punch you need to succeed. Office managements In order to successfully manage an office, regardless of your company's product or even your customer base, you should adhere to some basic guidelines. Here are six areas that you should keep in mind: 1. Employment and human resources. It's critical to have an employment policy in place. A policy manual gives you a blueprint for the way the company approaches employment. It spells out rules in a way that can prevent later problems. (Imagine working for an organization that came to a standstill each time an employment issue arose.) In addition, you'll want to include a training and development program under this area. Even if your training and development program is modest, you still need to consider building this into your policy. Read Ten Employee Training Tips to learn how to implement an effective training program. 2. Project management. Keeping track of projects is critical to the successful completion of important tasks and represents an essential piece of documentation. Knowing when things have to be completed and by whom gives everyone a clear idea of what's ahead. Deadlines are less likely to be missed

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and people are more likely to know their roles. Plus, each project, through careful documentation, can become a useful case study for future assignments. 3. Equipment and furniture requirements. You don't need every piece of office equipment out there to run a smooth operation. But you do need certain products that are going to optimize people's performance. What you need and how much it will cost are simple but important considerations. Check out What Office Equipment Do I Need for My Business? for a good introduction. And what about software? Are you trying to achieve a paperless office? If not, do you know how you'll store certain documents? Answering these and other questions about equipment will help you 4. Inter- and intra-office communications. For many small businesses, the responsibility for communication falls upon the office manager. Knowing how and when to communicate key information is vital to successful office management. E-mail blasts, posted instructions at the copier, and weekly staff meetings are just a few of the types of communication that occur within a busy office. Having a communication plan that everyone can adhere to will increase an office's productivity and ensure that information is disseminated clearly and quickly. 5. Conflict resolution. Conflicts are inevitable. Knowing how to handle them properly, however, will make life easier. Whether you have a formal policy or rely on your own wits, you need to prepare yourself for a wide variety of disagreements. Even with an employment manual, such issues as equitable distribution of work, pay rates, and job descriptions often arise in a company. Ignoring a conflict or waiting for it to dissipate is never the right solution. Having a plan or a policy for conflict resolution will help everyone navigate through a disagreement in a professional manner. 6. The company and its people. Knowing how to run an office must include understanding the company and its people. Knowing the product line and how it fulfills a need is just as important as ordering more toner for the printer. If you don't understand your company's mission, you won't know how best to support its various functions. The same goes for people ² knowing employees' roles,
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where they fit into the big picture, and how they operate will help you manage the office so that every function supports the people tasked with getting things done. The more you know about how the company works and what people are doing to build business, fulfill customer requests, meet deadlines, and otherwise perform their duties, the more successful you'll be in creating and sustaining an environment that fosters success. Work and economic turn down Given the immense uncertainty within which businesses across all sectors are currently operating, harsh new economic realities are now taking hold which is fundamentally reshaping the nature of the employment relationship. In many respects what we are now witnessing is the re-emergence, even though perhaps on a temporary basis, of the old "master-servant" employment relationship as the "balance of power" shifts towards the employer. Skilled highly-paid employees engaged in all areas of the service sector are now no longer in the ascendancy as they recalibrate their priorities. Stability within their working lives is now being given a higher priority over the pursuit of variety, flexibility and self autonomy in how they provide their services. Of course it is not that the basic floor of statutory or contractual rights has diminished, but rather that it is now employers that are running with the flexible working stick and in a very practical sense are able to impose sweeping changes to terms of the employment contract, which would have been unthinkable only a matter of months ago. It is now becoming commonplace for employers operating within all types of businesses to seek to reach agreement with their employees to reduce contractual working hours and in some cases pay, as means to try to avoid the necessity of making redundancies. Employees recognize and understand that unless they are willing to make, in some cases, very substantial concessions, they may find themselves out of work for a considerable period of time.

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Given the seismic shift that is taking place in the employment market there are substantial opportunities for businesses to reorganize themselves so as to ensure not only that they survive the economic downturn but also that they will be well placed to increase their market share at the expense of less adept competitors. The challenge facing an employer is how to retain its talent pool, by working constructively with its employees to reach solutions that minimize the number of compulsory redundancies. Demonstrating a sense of "fair play", notwithstanding the relatively free hand that employers now have to impose changes to contractual terms, will go a long way to ensuring that those employees who are retained during the downturn will not hit the road at the time of their choosing, once the economic climate improves. Below is a summary of some of the key issues that face employers seeking to impose fundamental changes to terms and conditions of employment and/or to reorganize their business:
y

Identify the key strategic objectives and be clear and concise in communicating to the employees what changes are being sought and why those changes are necessary. Establish a clear timeline as to when it is intended that the changes will take effect. When proposals to vary contractual terms are being discussed with employees, ensure that a draft of the proposed revised terms is available so that employees have a clear understanding of the specific changes to which their consent is being sought. Consider whether there is merit in establishing an informal consultation mechanism for staff being affected by the proposals. However, if 20 or more employees are going to be affected by any proposed changes to contractual terms then the collective consultation requirements (set out in Section 188 of the Trade Union and Labor Relations (Consolidation) Act 1992) may be triggered. Whether such collective consultation requirements are triggered will largely depend upon whether dismissals of employees who do not accept the proposed changes are being threatened and the extent of the changes being made for

y

y

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employees retained. Clearly great care needs to be taken how the proposals are put forward.
y

Carrying out dismissals of employees who refuse to accept variations to their contractual terms which an employer views as being necessary for the business may be a potentially "fair reason for dismissal" and therefore provide a defense to an unfair dismissal claim. The initial hurdle for the employer is to show that the reason for the change is more than trivial or whimsical. Assuming that the employer can overcome this hurdle and that appropriate individual consultation has been undertaken in order to establish the fairness of the dismissal, a broader balancing test will be applied by an Employment Tribunal, which involves balancing the needs of the employer and the interest of the employee. Determine whether the contemplated reorganizations will trigger a redundancy situation. Reorganizations and redundancies are two different concepts and they are easily confused. Reshuffling duties amongst existing staff will not create a redundancy situation nor will seeking to reduce costs by enforcing imposed changes, such as reductions in pay. Redundancy, on the other hand, has a specific statutory meaning and care needs to taken in establishing whether, if a redundancy situation exists, any actual dismissal carried out will be regarded as being by reason of redundancy. In the current economic downturn, if dismissals are required by businesses, then in most instances employers can be reasonably confident in establishing that a redundancy situation exists. A headcount reduction by reason of redundancy offers the opportunity for an employer to reflect critically on the skill sets it needs to retain in order to ride out the economic downturn. Redundancy selections can be made accordingly, by reference to the skills which the employees at risk have as well as a variety of other factors including their individual performance. Ensure that consistent treatment is applied to all affected employees (including those away on long-term sickness absence, maternity leave or sabbatical etc) so as to minimize the risk of claims of discrimination being raised. Bear in mind that employees often receive large awards at Tribunal not because the employer has treated them particularly badly, but rather because

y

y

y

y

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economically they are substantially out-of-pocket as they are unable to reduce their loss by securing income from alternative employment. Therefore, the importance of following the correct procedures and giving due consideration to the issues set out above should not be underestimated in a recession since dismissing employees unfairly is likely to prove even more expensive for employers in these difficult times. Top Tips
y y y y

Don¶t procrastinate make a sales call NOW! Grab every little five minute wait time during your day to make a sales call Never switch off looking for subliminal sales opportunities, then«. When you become aware of an opportunity, grab it, with both hands, immediately.

No matter how much planning you do, no matter how much research you gather, no matter how many gadgets and gizmos you possess, the only way you make sales is by getting in touch with prospects, generating rapport and giving it your best shot. It isn¶t just that there is a time for planning and a time for doing, it is also about making and taking time for doing every day. You can¶t afford to wait until the product is made before you start to sell it; what if the guys in market research got it wrong and there is no market for the product? Taiichi Ohno, the ³inventor´ of the concept of The 7(+1) Wastes, identified two of the primary areas of waste in industry as overproduction and overstocked inventories. Both of these link to creating and holding stocks that aren¶t sold«these aren¶t assets, they¶re liabilities! You need to be out there talking direct to customers long before the product is gathering dust in a warehouse. This goes for services too; the best ³problem´ to have is the one where you walk out of the client¶s office with the ink drying on the contract and think to yourself, ³Gosh, we are going to have to move fast to put this together in time!´ You may be in a role where you are responsible for the operational delivery of the service as well as the sale, in which case this is your problem, if not it is the role of someone else in your organisation; so

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long as the two of you are communicating there is no reason why this Just-In-Time approach will cause a problem. Grab every opportunity to make sales calls. A sales call doesn¶t have to be an hour long affair; two or three minutes is often more than enough, so make sure that every day you have to hand (wherever you are) the ability to make a half dozen sales calls. The prospect won¶t know that you are in the car park of his competitor, if you use text or mobile email the prospect won¶t know that you are on the train! By grabbing every 5 or 10 minute waiting time in each day you can make an extra 30 or 40 sales calls a week. I was running a sales training workshop in a hotel in Leicestershire; I popped into the gents during the morning coffee break, and could hear a candidate in one of the stalls talking on his mobile. He was making a sales call from the loo! Get into the habit of actively looking for sales opportunities in everything you see and hear. Then grab every opportunity that you spot. What are we talking about? Here are some real life examples. The local Basingstoke newspaper carried the story that Chas. A. Blatchford and Sons, manufacturer of traditional prosthetic limbs, had just bought a competitor and was moving into the competitor¶s area of strength, modern ³beachwear´ prosthetics. The woodworking and metal working shops would be phased out over the next six months as the company invested in plastic and electronics. An outplacement consultancy saw the news item and contacted Blatchford¶s personnel manager and won a contract to support the craftsmen who were being made redundant. A salesman was travelling in the train home one evening but hadn¶t picked up the evening paper. Opposite him was a gent reading the London Evening Standard. The lead story on the front page was all about a large overseas defence contract being awarded to a UK company and the beneficial effect this would have protecting jobs. On the gent¶s lapel was a pin bearing the logo of the lucky UK defence manufacturer, the salesman offered his congratulations and the two struck up a conversation, the salesman offered his business card and was given one in return. He called the next day, met the following week and got a supply contract about three months later.

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By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage. Alert Research actively seeks out sector specific intelligence for you to tap into and use to generate more and better sales productivity. Ray Murphy of Alert Data can be contacted on ray.murphy@alertresearch.co.uk or visit their website at www.alertdata.co.uk F ± Finances and the unpaid invoice Top Tips
y y

Check that your clients are solvent before, during and after you sign a deal A poor payment structure can render a deal worthless; negotiate as fast payment as possible

y

µContracts¶ are great if you can afford to enforce them; money in the bank is safer

Financial information; company reports and accounts and credit ratings may seem less important to you than to the accounts department but claw-back on commission payments or missed bonuses after all the work will hurt you more than the accountant! Four ways of using financial information to protect your income are; 1. 2. 3. 4. 1. Looking at client¶s payment history. Looking into a prospect¶s credit rating. Ascertaining who really controls the budget and payment sign off and Ascertaining the size of the budget. Take a look at the payment history of your clients; obviously different sectors have

different µnorms¶~ retail is generally payment on delivery/collection, whereas many service businesses don¶t invoice until the end of the calendar month and then get paid in 30 or 60 days. Even assuming a µgood¶ payment history this can leave the supplier with a minimum 90-day deficit to fund. Challenge the norms in a creative way. Ask for payment or partial payment upfront in return for a small discount; this is especially effective with clients who usually pay late.

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2.

Keep a constant check on clients¶ credit ratings; there have been many examples

of suppliers delivering to a client for 80 or 90 days when the clients have already shown themselves to be non-creditworthy. Soldiering on in hope that things will improve is a fine way to commit commercial suicide. 3. With new clients (or existing clients going through re-organizations) ensure that

you keep a close eye on the authority element of the MAN mnemonic; there is little point in delivering half the service for Manager X only to be told that Manager Y is actually the authorized signatory. You may be able to force the client to pay eventually but by that time the relationship will be too strained and your costs too high to make the current or future work worthwhile. 4. Make sure that both you and the client are in accord over the size of the budget for This may sound too obvious but so often everyone

your goods or services.

concentrates on the unit price rather than the overall cost; consultancy at £XXX per day rather than how many days at £XXX equals the total project cost being £YYYYY. There are examples of this issue cutting both ways; think of all those big Government contracts where the project is costing the taxpayer 10 times the estimated cost due to overrun (to the benefit of the supplier) or the cases where the supplier agrees a low unit price on the assumption of high volume but then actually gets only 15% of the anticipated volume and therefore loses out. Forecasting and Firming what is in the pipeline is another important way to improve your sales productivity. A genuine forecast (rather than a wistful hope) of the time that pieces of business in the pipeline will reach maturity will help you to identify the most productive use of your time and effort. Where you have a piece of business in the pipeline but it is moving slowly towards being contracted look for ways of speeding it up (let¶s face it lots of stuff that is in the pipeline disappears due to circumstances outside your control, so if you can chivvy it along this will stop it from evaporating). You can chivvy by actually asking for the contract to be signed up, by creating a deadline for the quoted price, by offering a guaranteed delivery date or time in return for a firm booking or possibly by offering a small discount in return for a firm booking.

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Foxing the opposition may sound like an odd way to improve your sales productivity but it can be a valuable strategic tool. As a supplier you may be convinced that you have no hope of breaking into your competitor¶s biggest account, but if you consistently try, you keep the competitor busy fighting you, this takes them time and energy that they may otherwise use to attack your key accounts. You never know, you might even be successful and actually win business with the prospect! By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage. Alert Research actively seeks out sector specific intelligence for you to tap into and use to generate more and better sales productivity. Ray Murphy of Alert Data can be contacted on enquiries@salesresearcher.com or visit their website at www.salesresearcher.com Establish a communication plan. Top Tips
y

Search for ways to reduce your ³admin´ time. You need every available minute to think, plan and sell.

y y

If you haven¶t yet got a communication plan, in writing, write one within a week. When was the last time you actively sought out a new prospect? If it was over a week ago, do it today.

Establish a communication plan. There is an adage; Do you plan to fail or fail to plan? This is just as true in sales as it is in house building or war. You probably have a sales plan already; something that lays out the target revenue generated per month but you also need a communication plan that will help you to generate and sustain those figures. If you have a communication plan you know what you should be doing, you can measure the effect it has and you can learn from what happens. If you have no plan then certain things or certain clients just get forgotten, you have no idea what is working or why and you find that the rest of your life gets overtaken by events.

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A sales communication plan doesn¶t have to take ages to produce and you certainly don¶t need to write it by the kilo; assuming that you have a contact list it can be as simple as a one hour and one sheet of A4 job. Every day do something Effective is a good strategy for your sales communication plan.
y

You may plan to communicate with all your customers every day; I know one salesman who does just this with a twitter campaign; he tweets about 8 times every day and reports that it generates between 10 and 12% of his profitable sales.

y

Alternatively you may plan to communicate with a given set of customers each day, working your way through your contact list over a given period.

y

You could alternate activities; on Mondays, Wednesdays and Fridays I¶ll send out an update, working through 10 contacts per day, whilst on Tuesdays and Thursdays I¶ll search for and add three new prospects to the contact list.

y

You may choose to segment your contact list so that you send different communications to different contacts; the segmentation may be on grounds of relationship (eg contacts who are currently buying get a different message to those that are ³dormant´) or it could be on grounds of client characteristics (eg notfor-profit contacts get a different message to commercial contacts)

Whilst you plan to do something effective every day you also need to factor in some rolling actions for weekly or monthly inclusion.
y

Regular ³topping-up´ of the contact list; actively seeking out new prospects so that your contact list isn¶t slowly contracting

y

Regular cleaning of the contact list (at home do you still get marketing and sales letters addressed to the people you bought the house from 5 years ago? What image does that give you of the organization that sent the letter?)

y

Regular general update messages or a newsletter

Regular and planned activity doesn¶t stop you from reacting to sales signals, it helps you to manage those reactions; you can still respond to a ³walk in´ prospect and seize that opportunity but you will also find that having and working a communication plan

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keeps you on the boil rather than hitting the µfeast and famine¶ cycle that can come when you reach the end of a customer project and realise that you have let the pipeline run dry. Email«is it worth the paper it isn¶t printed on? Within your communication plan also consider the media that will be most effective. 80% of email is reckoned to be spam and spam filters are notoriously fickle; even a valued client who hangs on your every word can discover that their spam filter is cutting out your communications. Use email but also consider the other options;
y y y y y

Snail mail SMS Tweets Phone calls Website updates

Entice the contact´ is a good way of thinking about the actual content of your individual communications; you need to have a message to get across to the contact and it has to be a bit more interesting than either ³Can I have an order´ or ³I¶m still alive´. A snippet of information that is relevant to the contact is always going to be interesting enough for them to read; an update about their marketplace or clients, a bit of intelligence about their competitors, a quote from an influential person in their sphere of interest, an opinion of their organisation from a respected pundit. By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage. Alert Research actively seeks out sector specific intelligence for you to tap into and use to generate more and better sales productivity. Ray Murphy of Alert Data can be contacted on enquiries@alertresearch.co.uk or visit their website at www.alertdata.co.uk New Sales Researcher site launched today! Hi Everyone,

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The

new

Sales

Researcher

site

is

now

full

operational.

Visit

us

at

http://www.salesresearcher.com/ More Blog posts to come soon along with letter E in our A-Z series.

Top tips: D ± Develop Elevator Pitches 1. If you haven¶t got an elevator pitch already, produce one today. 2. If you already have an elevator pitch check it today and ensure it is no longer than 50 seconds 3. Make sure your elevator pitch doesn¶t sound like a sales pitch 4. Have different pitches ready for different situations Develop Elevator Pitches. You know what an elevator pitch is even if, being in Britain, the word elevator looks a bit out of place. You need not only to develop a standard elevator pitch for the traditional face-to-face meeting, but also to develop the concept of the elevator pitch to take advantage of the communications opportunities available to you in the 21st Century. The traditional elevator pitch, which has been around since the mid 1980s, is a 20 second to 2 minute µsell¶ that aims to convince a prospect that they want to know more. As such it has to be unique to you (or your product/service). A saleswoman, introduced to a prospect at a business seminar, answered the question ³And what do you do?´ with a smooth, prepared and comprehensive elevator pitch. The prospect fixed her with a look and said, ³I¶ve heard pretty much the same story from four people already this morning, what makes you different?´ The saleswoman was floored, the moment gone, the prospect unconverted and any chance of a sale lost. You also have to hit the right note between grabbing their attention and telling them so much that you talk yourself out of the sale. It is fair to say that in the 2010s two minutes is just too long. Go for something nearer 45 seconds.

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There are three things a successful elevator pitch needs;
y y

Hook-something that makes the listener want to listen to the next 40 seconds! Story-the content that you want to get across to the listener; this could be about you, if you are the µproduct¶, it could be about the team; if the team is the USP of your proposition or it could be about the unique benefits offered by your product or service. You must deliver this with passion; if you aren¶t able to enthuse about your subject, why the heck should you expect your prospect to?

y

Request- you have to finish on a strong note; go for a request, be it a business card, a follow up meeting request or even a request for an order.

You also need to work on your modern versions of the hook of the elevator pitch: the Tweet, the Linked In update, the voicemail message and the subject line of an email. Remember that the purpose of the hook is to make the listener want to listen for the rest of your pitch. Here are two more Ds to help you improve your hook: Don¶t be sound like a salesperson. A sure fire way to fail in this purpose is to sound like a stereotypical salesperson. You need to be hooking the listener with something to their benefit, not yours, about their needs, not about your offering. Differentiate with Information. One way to differentiate your elevator pitch is to use information that is not about your product or service but is about the prospect and their business. For example; if you are talking to a potential buyer from say, HarleyDavidson, and you can tell them that their competitor, Ducati, just improved their performance«by using your service or product, this will undoubtedly be of interest. Another way to differentiate with information is to simply share industry information that will be of direct interest to the prospect by virtue of being relevant. For example, if you are contacting a prospect in Birmingham City Council and you can give the person an update on the legal challenge between Bristol City Council and UNISON over pensions, the prospect will almost certainly want to read/listen to your message. Different situations call for different pitches. If you meet someone at an industry exhibition and they are wearing a badge with their name title and company on it, you probably wouldn¶t use the same pitch as you would if you met someone at the golf club.

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Think about how you can adapt the basic formula of hook, story, request to suit different situations. If you don¶t, you¶ll either say the wrong thing or say nothing at all!

C ± Connectivity Top tips
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Use all available and appropriate media; do something today, write, email, fax, phone, SMS, tweet or link in.

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Make a connection plan that covers all your contacts at least once a month Set aside a scheduled time each day or week just for connecting

Connectivity increases conversions. There is a quotation that ³If you invent a better mousetrap the world will beat a path to your door´. It¶s rubbish. How will the world know that you have built a better mousetrap? How will they know how to find you? How will they know what your mousetrap costs? Why would people with no mouse problem want a mousetrap? If you want to successfully sell you have to connect with prospective buyers, and connecting is a two way process. There is an acronym used in marketing which is AIDA. The A stands for Awareness (the IDA will be covered in later releases of this series). You have to make the customer Aware of your existence and of the existence of your products or services. You have to then keep them aware; in the 21st Century people are exposed to more information in a single Sunday paper than a 17th Century landowner would be likely to read in his entire adult life. Large amounts of the information we see and hear each day simply don¶t stick; they are forgotten within a short period. Consequently you have to keep drip-feeding people with messages in order to remain close to the surface of their conscious memory. Why do you want to be close to the surface of conscious memory? Because again, in the 21st Century the pace of life is fast; when a manager discovers a need he or she wants to fulfil that need quickly. When a manager need a trainer, if the first words that pop into his or her mind are ³Rus Slater of coach ±and-courses.com´ the manager doesn¶t need to google or

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look in their business card index for a potential supplier. The supplier who comes to mind first is probably the one they¶ll call. So how do you connect with prospects and customers? The options range from the traditional to the cutting edge and from the glaringly obvious to the subtle.
y y y

You can invite them to Corporate hospitality such as the races or the rugby. You can entertain them on a One to One basis for a meal or a drink or golf. You can Network with them at the meetings of any trade associations or bodies that are relevant to both of you.

y y

You can regularly send them relevant News cuttings that are of value to them. You can deliberately meet them at Exhibitions and Expos where you or they are running a stand.

y

You can call them to Catch up with what is happening in their life (Note here that you want to find about them NOT tell them about you; if they declare an infestation of mice then obviously you can tell them about your invention, but avoid just calling on the pretext of telling them your news.)

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You can Tweet, Face-book, Link In

If you want to continue to sell to customers you have to stay connected to them, so you will probably need to use a variety of these approaches over the course of the year with a variety of customers and prospects. This connectivity increases the Awareness of you and your organisation, the next stage in AIDA is the µI¶ which stands for Interest and in this instance it is a double ended Interest; 1. You need to take an interest in them and their current situation in order to find out

whether there is any value in trying«. 2. to create an interest in your product or service

Always remember to do Number 1 first; otherwise you are telling someone something they have no interest in and that is boring!

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By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage.

± Buyers and Businesses Evolve 1. Top tips
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Find out about the individual buyer at your client; not just their name and job title but what makes them tick.

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Cultivate other contacts within the client; they are a source of valuable information for you; this will allow you to beat the competition when an opportunity arises.

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Stay abreast of industry sector developments; this allows you to anticipate rather than react.

is for µBuyers and Businesses Evolve¶. No, the nice people at Sales Researcher haven¶t lost their marbles and aren¶t suggesting that people are developing gills or webbed feet. But both buyers and business evolve nothing stays the same for long in the world of commerce and industry and business information can help you to stay ahead. Buyers evolve in several ways; the organizations changes the person who buys from you, or the buyer changes his or her wants and desires for your type of product or service. You need to keep abreast of personnel changes at the client or prospective client. If an organization announces a change of personnel there is a sales opportunity; new people may have no loyalty to past suppliers so they may be open to change, or they may actively want to change. By you being aware of this opportunity you can tap directly into this opportunity with a µwelcome¶ message and an offer. Incumbent buyers also evolve in their wants and desires from the products or services they buy. This can be as straightforward as µwe are having a cost cutting review and need less expensive products¶ to µwe have won a big contract and will need to increase our intake¶ through to µI personally have changed my attitude in life and now want more ethical or environmental products¶
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Or even I had been courting a buyer in a potentially large and lucrative account for over a year to no avail; it seemed that he just didn¶t like me. I started to research and send him clippings from the µmovers and shakers¶ columns, announcements that told of people in his field moving to new jobs and new employers, the market at the time was buoyant and there was so much migration going on I was able to send him a couple each week. After about four months I read an article that he himself had just moved. Like a flash I got in touch with his replacement and won a small pilot contract. I also sent him a µCongratulations¶ card«..to which I received for the first time ever an invitation to bid! Buyers also have access to an increasing wealth of information online and are taking a much more flexible view of the ways and timescales in which they want to buy. Doing a solid sales pitch to one person is no longer enough to secure new or existing business. Interspersing your infrequent sales pitches with real help for a customer buying team can work brilliantly though. You need to understand what are your buyers critical priorities, and what else do they feel they need to know when making buying decisions. What knock-on issues are they and their team considering? You also need to establish connections across the team«.everyone in the team counts, even the person who seems to be low down the pecking order. By including these people in your Business Information strategy you can influence the people who can influence the buying the decision. People don¶t want just to be sold to any more, they want to make right buying decisions. Giving them valuable information that shows you understand their challenges and that you have expertise that can help is vitally important. Businesses evolve too, P&O Ferries ply the English Channel and there is nothing pacific or oriental about that stretch of water. British Gas supplies electricity, Norwich Union is no longer a Union and isn¶t confined to Norwich (Yes, they changed their name to Aviva, and think how many sales people in design agencies, printers, advertising firms and sign writers hit their targets on the back of that evolution [even Paul Whitehouse¶s agent!)

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By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage. Alert Research actively seeks out sector specific intelligence for you to tap into and use to generate more and better sales productivity. Ray Murphy of Sales Researcher can be contacted at enquiries@salesresearcher.com or visit their website at www.salesresearcher.com

A ± Account Research Top Tips to help you to maximize sales profitability on an existing account
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Keep your name uppermost in their mind; make contact at least once a month, not always about the product but other areas of interest

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Ask your contacts about referrals to other departments and sister companies. Draw up a map of the relationships. Act on them.

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Foresee changes in their industry ± find one good website about the sector and sign up for an industry newsletter ± speed read them.

Improving Your Sales Productivity Is for µAccount¶ research. There was a time when life was simpler and if you had a customer, you had a customer for a long time; you might speak to the buyer once a quarter and you might actually meet face to face once a year, but otherwise you could just pick up the order every now and then and everything was fine. Sadly things ain¶t what they used to be! In to the 2010s the environment is ever changing; your customers¶ customers are making new demands, the government is adding new legislation, your customers¶ industries are developing daily and your business is under constant threat from your competitors. You have to ensure that you don¶t suffer from µRed Queen Syndrome¶; if you stand still your customers will be moving away and your competitors will move ahead. You have to keep moving and in the sales business, knowledge is power. Even if you are on a Preferred Supplier List, it is worth being aware that you are only µpreferred¶ and probably only one on the µlist¶; the other organizations on the list are not
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only your competitors but they are your most dangerous competitors; they, like you, are already close to the client, don¶t let them get closer still! There are lots of examples of companies investing many thousands of pounds to get through the tender process to get on a PSL only to get virtually no actual sales from that list once they are on it. In order to maximize your sales opportunities with clients and prospects alike you need to keep talking to them so that your name is never slipping to the back of (or out of) their mind. You probably can¶t justify (and neither can they) spending two days a week wining and dining them at corporate hospitality events so in order to keep talking to them you need to have something to say other than just ³Hi, how¶s it going?´ By really keeping your finger on the business information pulse you will always have a useful snippet of information to use as a hook on which to hang a reason for contacting someone, even if the information you are providing isn¶t directly relevant to the product or service you are selling. There is a range of business information that you need to keep on top of to give you the competitive edge; People information; who does what, who is moving to where, whose star is on the rise and whose is on the wane, who is getting media exposure Technical information; which company has invented or launched a new product or process, what µproblems¶ are rearing their ugly heads in an industry, what challenges are being identified or overcome Financial information; who is winning or losing big contracts, who is offering big contracts, whose report and accounts are coming out and what are the predictions. Legislative and legal information; what legislation is due for consideration or enactment that will affect the sector, what legal judgments are being made that will effect activities Networking information; what industry seminars or expos are happening, who is speaking at them, what are they saying and how is that perceived in the market. Competitor information; you need to keep an eye on the people who are out to steal your bread and butter, so you need to keep an eye on which of your competitors are

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expanding, what services or products are they marketing, where are they speaking/exhibiting at trade shows, what new technology are they buying. Some of this information will come to you almost intuitively; you and your staff are active in your industry so you¶ll get to hear things on the grapevine. However, you undoubtedly have many other things to do and you can¶t expect to pick up more than a small minority of the intelligence that is out there. By staying active within the Business Information world you can be aware of the likely and planned evolutions in the marketplace and by judicious use of this information, you can leverage this to your advantage. Sales Researcher actively seeks out sector specific intelligence for you to tap into and use to generate more and better sales productivity. Ray Murphy of Sales Researcher can be contacted at enquiries@salesresearcher.com or visit our website at www.salesresearcher

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