Category Archives: Grow Your Business

Revenue is revenue, right?

by Kelly Dies, Soundpoint Consulting

A dollar is a dollar. That’s true. And, all revenue is equal. Right? Well no, not in an investor’s or potential buyer’s eye. So what makes some revenue good and other revenue better? 

Recurring

Recurring revenue is highly desirable because is it known and predictable. The best example of this is an auto-renewal fee or service charge periodically charged directly to a customer’s credit card. Once the initial sale is complete there are no more costs to acquire a customer. The revenue stream is much like an annuity. Continue to provide the goods or services as promised and the revenue keeps coming in. 

Great examples of this are insurance premiums and streaming fees. Once customers have decided to purchase the product – and assuming they remain content, they are happy to have their credit card billed automatically. 

In contrast, consulting and attorney fees are often one-time in nature. Revenue ceases when the project is complete and the engagement ends. 

High Switching Costs

Revenue generated from products or services that have high switching costs are more reliable than from those which do not. Switching costs can vary from technical reliance to data lock-up to high start-up costs with a new vendor.

A great example of high switching costs includes services which are outsourced, such as payroll processing. The cost to bring the work in-house is significant as you would have to hire and train a staff of people for this function.  Likewise, a bank account with automatic bill pay also has high switching costs, as unwinding those (recurring) transactions is a pain in the neck!

High switching costs in combination with recurring revenue results in some very high quality revenue. Take for example, my relationship with Constant Contact which reliably sends these monthly newsletters to you on my behalf. My credit card is billed monthly. And, it would be a quite an undertaking to transfer my email list to another email provider. Do you think

Constant Contact is at risk of losing my revenue? Absolutely not!

Loyal Customers

Revenue from a loyal customer base is extremely valuable. Not only does it guarantee repeat business but it potentially means additional business from referrals, thus significantly reducing the overall need for marketing and advertising spend.  

Good examples of this are a trusted relationship with your tax preparer or a favorite clothing store. Although switching costs may not be high, loyalty keeps you from looking elsewhere.   

Consider two comparable stores with the only difference being the loyalty of the customer base. The store with the more loyal customers has less customer churn and doesn’t have to work as hard for every dollar of revenue. Conversely, the store without the loyal customers has to work hard for every dollar earned. Not surprisingly, the investor/banker/ potential buyer will value the first store more. 

What are you doing to earn and keep the loyalty of your customers? 

High Margins

All businesses have revenue streams with different margins. Revenue that generates higher gross margins is more valuable than revenue which generates lower margins. Makes sense. You cannot generate much income from a revenue stream that is saddled with large variable costs.  

And, if a revenue stream costs more to produce than the dollars it generates, well that is not good. It’s like giving someone $1 in exchange for 85¢. Do this in too often and you will soon be out of business. 

The bottom line – know and manage your unit costs. Try to divert revenue from your lower margin products to those with higher margins. 

Diversified

Just like an investment portfolio, a diversified customer and supplier base is less risky than if you are highly dependent upon a handful of them. 

If one of your largest customers were to transfer business to a competitor, how quickly can your business recover? Or, if your largest suppliers were to run into financial difficulties, could you weather the storm? 

If your business model is highly dependent upon Google, Amazon or Microsoft, what happens if they change how they do business with companies such as yours? Trust me, you do not have much negotiating power with these guys. 

A good rule of thumb is that your top 5 customers should not be responsible for more than 15% of your total revenue. A similar metric should hold for suppliers. 

If you would like assistance improving the quality of your revenue, please give me a call. I would be happy to help.

How can a non-tech savvy small businesses improve its marketing?

by Ken Sethney, Kitsap SCORE

Trying to understand the effectiveness of your marketing efforts without access to measurable results means your business is flying blind.

Marketing data gives you the insight you need to make well-informed decisions about your marketing efforts and know how to adopt the right marketing efforts to drive the biggest return on your investment.

Reliable analytics will empower you to make data-driven decisions that improve the effectiveness of your marketing.

Just about every business needs an online presence regardless of what they sell. And, bringing customers and prospects to your website should always be one of your primary marketing goals.

Google Analytics is the website analysis platform most used by businesses to get real- time data for insight into how many people visit their website, who those people are, which products or services they’re most interested in, and much more.

Because of its ability to dig into the weeds of your web traffic, Google Analytics is one of the best tools for determining the effectiveness of your marketing and learning how to improve it. Fortunately, you don’t need to be a technology expert or SEO professional to use the platform.

By familiarizing yourself with how to pull some basic information, you can gain an understanding of how well your website is performing for your business. Even at its most basic level, Google Analytics is a tool that the non-tech savvy business owner can operate and benefit from exploring.

  1. Visitor Volume
    See daily and monthly web visitor volume, monitor trends, watch ebbs and flows during
    your marketing campaigns and compare traffic performance as time passes by.
  2. Average Time on Site
    Track how long visitors stay on your website as well as which pages they view.
  3. Bounce Rate
    Measure how many of your visitors quickly left your website after landing on just one
    page. Visitors who leave quickly likely did not read your content and are not interested.
  4. New vs. Returning Visitors
    Measure the ratio of new vs. returning visitors. This is useful data when measuring the impact of your marketing efforts on prospects vs. existing customers.
  5. Traffic Sources
    Determine where your audience is coming from – from different websites and different
    geographic locations.
  6. Conversions
    Set-up conversion tracking and measure the percentage of your website visitors who make a purchase, fill out a contact form, or take some other desired action.

    There are so many tracking capabilities available to small businesses through Google Analytics and these just scratch the surface. One of the best is its comparison tool that allows you to compare data year-over-year to identify trends. This can be hugely helpful in planning your long-term marketing efforts. Google Analytics has the ability to give you better insight into your web visitors’ behavior so you can use make more strategic marketing decisions.

    Fire up your analytics and start making more strategic, data-driven marketing decisions.

    Even if you’re a non-tech savvy business owner, you can still easily make Google Analytics work for your business with the right support. There are many resources available to help small businesses navigate this tool and make sense of the data. One of those resources is your SCORE mentor.

    For help with starting, growing or successfully exiting your business venture, contact SCORE — Mentors to America’s Small Business. SCORE is a nonprofit organization with more than 11,000 volunteers who provide free, confidential business mentoring and training workshops to small business owners. To contact Kitsap SCORE, email kitsap@scorevolunteer.org or call 360-328-1380.

Working Washington Grants Round 4: March 29th thru April 9th

Working Washington Round 4 offers grant relief funds to small for-profit businesses, especially those that were required to close due to public health and safety measures.
These grants are NOT first-come, first-served, so please do not rush in submitting your application. You will want to make sure all of your documents and application are correct because there are no opportunities to edit or amend applications with this go-around.

Continue reading

Time is running out! Apply for PPP by Mar 31.

PPP loan borrowers including schedule C filers have until March 31st to submit 1st Draw or 2nd Draw PPP applications unless funds run out or congress extends the deadline.

Contact your local business lender. Visit smallbizhelpwa for additional info. Or call the new PPP Assistance Line 833.562.1078

As a always Jaime Forsyth, MBA , Certified Business Advisor is a great source for assistance WWU Small Business Development Center(360) 447-8788

View the latest SBA webinar presentation slide deck

Business Recovery Assistance in Washington

Your Go-To Resource for Small Business Recovery

Small businesses are the backbone of Washington’s economy and many have been devastated during the pandemic. Many have closed, others are barely hanging on. Small businesses owned by people of color have been particularly impacted. In response, Congress has passed several aid packages and the State of Washington has provided relief, along with many local communities. But resources can be difficult to find, and the applications can be challenging to navigate.

On this website you’ll find answers to frequently asked questions, information on how to find individual technical assistance, how to find a lender, training opportunities and where to find more detailed program information.

Our goal is to help as many Washington small businesses and non-profits as possible access the help they need. 

Click here… https://www.smallbizhelpwa.com

WorkSource Kitsap Can Help You Solve Your Hiring Needs.

WorkSource Kitsap is hosting a Virtual Job Fair for Kitsap County businesses that have positions open. The event is set for 30 March 2021, from 10 a.m. until 2 p.m.

Please complete the interest form via the link below. Once complete, we will register your business on Brazen.com where you will complete your “virtual booth”. We will hold weekly information sessions to offer assistance for the setup of the event.

Limited booths available. We have 50 booths that can host multiple staff from your company. Again, this is not a link for job seekers, that will come in the following week.

This link will lead you to a fillable form to express interest in participating.

Three Things You Should Understand Before Hiring a Search Engine Optimization Expert

A website is a critical sales and marketing tool for just about every business. It’s a hub for product information, a conversion point for capturing leads, the holding place for marketing materials and company news, and many times serves as your potential customer’s first impression of your business.

However, before any prospect can interact with your website, they first have to find your website. This discoverability is the culmination of a strong SEO, or search engine optimization, strategy and an SEO expert behind the scenes.

Most business owners are digital marketing novices making it hard to know what you’re really buying when you hire an SEO expert.

If you’re like most business owners, you understand the role of an SEO expert from a high level but aren’t as familiar with the full scope of what’s involved or the time required. This makes it a lot harder to confidently hire the right SEO expert and forces owners to take these professionals at their word. Continue reading

WA State Biz Fair Is Going Virtual 202

This year the event is VIRTUAL for the first time!

Join hundreds of experts and thousands of small business owners and managers from home – or anywhere.

MEET with mentors, advisors, trainers, educators, fellow small business owners, and entrepreneurs. 

LEARN from savvy business experts who will share their knowledge and real-life experiences. 

CONNECT with federal, state and local government agencies to find out about starting a business or contract opportunities. 

FIND OUT how non-profit organizations can help you with funding, legal support, and more. 

NETWORK with Chambers of Commerce, Economic Development Authorities and statewide Business Associations. 

CHECK OUT the Digital Marketplace for products and services to help you do business.

NO COST TO ATTEND! – NONE – NADA – ZIP

For more information go to www.bizfair.org        Questions? Email info@bizfair.org

 If you would like to register to attend the 24th Annual
Washington State Small Business Fair, use this link. Register Here