Coping with the ‘Recession’

Regardless of whether you think there’s going to be a recession, and the news media are doing their best, at least in the USA, to talk businesses into thinking recession.

So, we are going to give you some tips for coping, other than selling your business and repairing to Monte Carlo, Belize or the Caymans.

  1. Push product and service improvements. We know this sounds counterintuitive, but it goes against what your competition is probably doing. Good luck finding a bank to finance these, unless you already have strong banking relationships.
  2. Take a look to see if you are using all the marketing tools available to you. Websites, in our humble opinion, are generally still lacking. Customer test them
  3. Reinforce to all your people, whether they’re customer facing or not, that they’ve got to be customer oriented and friendly. This doesn’t mean that the customer is always right, but that the customer always gets a hearing.
  4. Take a look at process improvements. There are companies out there that will take a look at how your company does things for free, if you engage them to fix things, but your organization might be resistant. Talk to your key people about who you’re using and why.
  5. Go into new territories….use Google to enhance local searches.
  6. Add respresentatives. If they’re good, you can get them for commission only. They should rep complimentary lines.
  7. If you do all of these improvements, you should at least double your growth rate!
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Bonfire of the Vanities

So Nancy Pelosi is going to refer the House shenanigans to formal impeachment inquiry, or something.

The stock market greeted the news with a collective yawn.

The Democrats probably just lost the 2020 election to Trump, and might well have lost the House majority to the Republicans. Up in smoke, Nancy. Back to the backbench where you belong.

The business community seems not to care, either.

These people are so vain, they have no idea that what they do and say has no impact on anyone, except the news media, who get to report something for the current news cycle.

Maybe when the Republicans take over, we can get some stuff done that the country needs, such as USMCA and border legislation.

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A Tale of Two Products

Mike Lindell is a smart guy and an excellent businessman; look what he’s done with a plebian product (pillows) and leveraged them into an empire. He really hasn’t put a foot wrong….good usp, good selection, leveraging pillows into associated products, guaranteed success with the product, good customer experiences provided. OK price points, but the value is there, so it works.

One also senses Mike has been around the block more than a few times.

On the other hand, there’s Tom Patterson and Erin Fukimoto, also trying to take a plebian product (mens and women’s underwear) into the big time. But the value proposition isn’t there (their products are about twice as expensive as others on the market), there’s no guarantee of success with ‘best pair you’ll ever wear’ (which is good, but there isn’t a free trial period and guaranteed success….free returns. Only money off, which is just part of the promotional equation.

One senses Tom and Erin still have a lot to learn, but they’re out on a limb with the underwear. Where Lindell did his market research at county fairs, it’s not clear T & E have done much. Even at 25% off, my research suggeests that their underwear is still much more expensive than the competition.

T &E could offer a money back guarantee…none of our clients has EVER had more than 10% of sales returned, which is not too bad. 60 day trial would be good. Free returns with a 60 day trial would work. In other words, go look at the Lindell playbook. OK T&E, Christmas is coming, you’re sorta stuck where you are, but you can fix things for the New Year.

The bottom line for all you readers is that when you’ve got a product idea, do some customer focused research, be guided by it and use all the promotional elements. Make sure they’re all considered before you even launch.

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If You’re Big Why Aren’t You Profitable?

Back in the day when I was in charge of all financial planning at Ford Credit, whenever a division would come up with an idea, they had to come up with a ‘steady state’ level of sales, or branches, and we would work with them to figure out how profitable the idea was, when it became profitable, and whether it hit or exceeded Ford’s return on equity criteria.

These days, when one looks at the losses of Uber, Lyft and We Work, one wonders if the financial houses backing these companies has ever done some basic financial planning for them.

None is profitable, or apparently expected to be profitable anytime soon.

We guess that it must be part of the ‘greater fool theory of investment: I might be a fool for investing in something, but there’s a greater fool out there that will buy my stake for a profit.

Maybe one of the underwriters of these stocks will send me a rejoinder about how and when they become profitable, and how much.

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Robocall AI

We get 4 or 5 robocalls a day selling car or personal insurance, health plans or somesuch.

All are high volume call applications.

We have noticed when we’ve answered the local ones (who might be potential clients) that they apparently use some degree of AI at the first screening level, e.g., you tell them who your auto insurer is and they automatically, using a human sounding nice feminine voice, direct you to the program that might best suit you.

No apparent human intervention.

Ergo, there seems to be some AI going on here. And, today on Fox Business News, there was a small company CEO on selling AI application software.

Hmmmm.

I’m throwing this one out there to our readers to find out if they know of such an AI company and its application software.

The world wants to know!

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WeWork Wobbles

We like the idea of co-working spaces. We have occasionally operated from one, and have recommended them to our smaller clients. One of our clients operates a worldwide business from a co-working space, with a big assist from 40 or so people in the Phillippines.

A lot of entrepreneurs like them, too, as evidenced by the success of WeWork, a New York-based developer of coworking spaces. Plus, WeWork operates Meetup, a division that allows entrepreneurs (or any affinity group) to recruit members and operate. We run four Meetup locations in the Phoenix and Tucson areas.

However, having advsed owners of coworking spaces, we think, at least in the Phoenix market, and maybe elsewhere, that WeWork is overpriced for what it delivers.

At present, we have only one client operating from coworking spaces, but we’re going to do a survey of our existing clients to find out what’s what, because we need to know, to properly advise future clients. We plan on asking our worldwide client how he’s doing operating from one, too.

So, the bottom line on coworking spaces is check out at least a couple of them before you commit to one. Our personal experience was that it was difficult to get out of the coworking space once our requirements had changed, about a year after we originally signed on.

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Product and Service Positioning

This stuff might be old hat in the US, but not so much internationally.

Basically, what we advocate is positioning IN CUSTOMER PERCEPTIONS. What they think is reality, not what your marketing department tells you.

A quick way to get a handle on where you stand is to ask your customers “Who do you think we’re like?” Why did you chose us ?”

If you’re retail, attach a post-paid card to your product, or send your service customers a survey, asking the same questions.

If you’re b2b, you can get all your customer-facing people to ask customers the same questions over, say, a week’s period. Then take a look at the results.

And then, take a look at all your promotion materials….do they convey distinction. If not, change ’em.

If you want any feedback, let us know. We see your websites through the headers, so we can render some limited opinons.

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Relationship Selling

This is a style of selling products or services to your customers where you establish a modest relationship with them before you try to sell them.

The reason you want to do this is to establish trust in your customers towards you and your company.

The process takes longer, but usually results in more solid closes of the sale, larger order sizes and possibly higher prices.

Customers want to buy from companies they like and trust….you should be that company.

We’ve trained about 40 clients to use it, and even had Worldcom using it before the company imploded.

We know it works!

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Radio Free China

I was watching Fox News recently about the plight of the Chinese people, and the fact that they apparently have little knowlege about what’s going on outside China. Taiwan would be a logical broadcasting spot, since it’s just off the mainland of China.

So, why not set up Radio Free China, designed to be like Radio Free Europe was after the second World War.

Maybe a little less propaganda that RFE, but designed to bring more news to the Chinese people. What kind of news? I would hope fair and balanced. No CNN, although some CNN stories could be used. Maybe some Fox, maybe some Sky News.It would be hard to evaluate ‘fair and balanced’, since most of the censors and minders of news are either liberal or conservative, but that’s what I’d strive for.

Sell advertising, sure. Can probably turn a profit. Think of all the multinational companies who’d want to broaden their promotional base in China.

If we get some support for this, I can take it up with the State Department.

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Impeachment Bushwa

Normally, this wouldn’t be a topic for Entrepreneurial News, but if President Trump were impeached, it would be bad for the business community in the US and, by extension, around the world, IMHO, so it’s an appropriate topic.

But, we don’t see yet any grounds for impeachment (see high crimes or misdemeanors) that rise to nearly the level of what got Nixon and Clinton in trouble.

The Dems controlling the US House of Representatives have belatedly realized that they need articles of impeachment, and that the whole House must vote on them. Which means they need 218 votes to pass the House. If 218 votes aren’t secured, then the process dies.

Should the House Dems pass impeachment articles, they have to go to the Senate, and the redoubtable Lindsey Graham has already corralled 50 senators to vote against it, lacking only Collins, Murkowski and Romney, the usual never Trumper suspects. Sen Graham might peel off Joe Mancin of West Virginia, too. We don’t knowif he’s been asked. And the Vice President is available to break ties. So, impeachment is dead in the Senate, so it looks like the House is engaging in an exercise in futility, nothing new for them. It looks to us like Pelosi is pushing a dead letter, and wasting time and money. Payback’s hell in 2020.

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Strategies to End Cash Flow Insommnia

Inc. Magazine put this article out this month, but it’s some some rather unusual statements beyond the 3 reasons, so we’ll editorialize on their headings.

  1. Making payroll: Inc. would like you to use just-in-time workers, but in a full employment economy, I’m not sure this is practical. I don’t see any pools of people outside Home Depot anymore. If anything, keep your workers on even though cash flow is tight….you don’t want to lose them. Inc. also advocates missing your own paycheck, which I’ve done, or moving it around as cash flow permits. Wives are not fond of this strategy.
  2. Paying outstanding bills. Yes, of course you should pay them, but try to get early payment discounts, or let them run to term on net payment. Stay on top of receivables
  3. Sustaining inventory levels. This is interesting, because it might be harder to get supplies in a full employment economy, so keep inventory higher than you might. You might also be able to negotiate discounts for continuous shipments, if you know you’re going to use the parts or supplies.
  4. Really stay on top of receivables….you don’t want to be a bank for anyone, unless you’re charging them for it. Offer fast payment discounts….which should really work.
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