Posts Tagged ‘Incentives’

What Are The Best Pricing Practices For Small Business During An Economic Slowdown?

February 21st, 2012 admin

In an economic slowdown your pricing is determined by factors like input cost of production or distribution channel cost etc. ….. which are primarily working on market factors. Generally one should be working on a reactive strategy of open price …. which allows for revision in product pricing over a shorter time period instead of quarterly or yearly market driven slashes or increases.

The important consideration is to try to maintain sales, even if some of them yield marginal or no profit (i,e, break even). In other words, so long as you are covering your costs, particularly fixed costs, then there is value in doing so.

However, unless you wish to become the low-cost leader going forward, then this low pricing may create a precedent which customers expect to continue, and it also may devalue the brand.

So pricing strategy must be decided carefully, with all things considered, including unintended consequences. And it may be better to have various incentives rather than simple price cuts in order to sustain sales.

In the article “Pricing in an Inflationary_Downturn”, McKinsey recommends the following actions:

-Watch for sudden shifts in price structure
-Adjust to changing customer needs
-Monitor customer-level profitability
-Update price sensitivity research

Many companies across the nation are on the verge of closing their doors and some have already started liquidating their inventory.

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Preparing your business for expansion

February 15th, 2012 admin

So you’ve built a business that will remain successful for the foreseeable future, but you aren’t quite sure how to move forward. The question of how to scale your business can be difficult to answer, because there are fundamental differences between a business that you can effectively control on your own, and a larger business that requires additional layers of management.

Here are some strategies that you can implement in order to move forward, as well as some considerations that will have to be made before using each strategy.

Opening a New Location

The most obvious strategy is to open up a new location somewhere outside of your original customer base’s range. Just because this strategy is common, though, doesn’t mean it’s best for you. This requires a firm understanding of of your available budget and the landscape of the market.

To start with, you should already have consistent profits each year for several years. You’ll need to be sure that the new location offers similar potential, and that it won’t become a money pit. Don’t assume you can pull out of your investment at any time. There are bureaucratic limitations that can prevent this, and a failed location can be bad for your brand’s image.

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Big Job Losses

January 17th, 2012 admin

The employment numbers out today from the U.S. Bureau of Labor Statistics were simply depressing – though not surprising.

For example, based on the household survey – which often captures more entrepreneurial activity – the story is quite grim. Since the November 2007 peak, the U.S. has lost nearly 1.7 million jobs.

Meanwhile, the payroll survey points to a loss of 524,000 jobs in the last two months, and nearly 1.2 million since this past December’s peak.

The payroll survey also offers a look at the private sector jobs picture. From the December high, the private sector has lost more than 1.3 million jobs, including more than 500,000 over the past two months.

The economy certainly could use help from our nation’s capital. But things like tax rebate checks, temporary and targeted tax measures, bailouts, and more government spending will do little. Indeed, much of that could just do more damage. The economy needs permanent and substantial tax and regulatory relief that boosts the incentives for investors, entrepreneurs and businesses to take the risks necessary to build and grow the economy.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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Rewarding Employees and Clients with Tickets to Sporting Events

January 14th, 2012 admin

Sometimes it is the little perks that encourage an employee to work harder or entice a client to choose your business over the competition. Sometimes it’s just about keeping an existing client happy or giving your employees something to work towards at the end of a long work week. Presenting tickets to a sporting event is a great way to boost morale among employees or impress that out-of-town client who happens to be coming to visit when his or her favorite team is visiting for a game. If used correctly, tickets to a sporting event can be a great incentive or even a way to ease the tension before heading into negotiations for an important business deal.

Impressing a Client

Do not Place Strings On Business-related Incentives

If you are trying to impress a client with some tickets to the baseball game this weekend, that’s fine. Just don’t imply that you expect something in return. Not only is this bad business sense, it can also be illegal and get you into a lot of trouble. Make it clear that you are offering your client or potential customer tickets as a gesture of goodwill and expect nothing in return.

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Ways to Get More Walk-in Traffic for Your Business

November 8th, 2011 webkriti


Even if you’re in a great location with tons of foot-traffic, you may find that you have trouble getting passers-by to stop in and check out your store.  And if you’re in a location that doesn’t get much traffic of any variety, you’ll be even worse off.  While you could spend a ton of money putting up billboards and purchasing ads on TV and radio, there are better ways to get a buzz going so that people seek out your store.  Here are just a few ways to go about increasing your walk-ins.

  1. Hold promotional events.  Everyone loves a good spectacle, so try to think of events you could hold to get your name out to the public and people coming in.  You might want to get neighboring businesses to hold a block party (complete with DJ and food trucks, for example) so that costs are defrayed and everyone can benefit from increased foot traffic.  Or you might go into the community to host benefits for charitableor environmental causes, which stand to improve your brand image enormously.  The sky is the limit on this one.
  2. Follow up with contacts.  Most events will yield contact information for customers that are interested in learning more about your business.  You may even secure contacts online through your website.  But if you fail to follow up with them, offering not only information but also incentives to get them in the store, you have no one to blame but yourself for a poor turnout during business hours.
  3. Host sales and giveaways.  This is old-school, but it still works because everyone loves to save money and get stuff for free.    Of course, you’ll have to do some advertising so people know what you’re up to, but you may get loyal patrons bringing in new friends as well as random people off the street coming to check you out.
  4. Butter up the media.  Free advertising isn’t easy to secure, but you can get the media to plug you in a number of ways.  The easiest, of course, is by sending them samples (read: freebies) to try out and review.  This works for talk-show hosts, radio personalities, and of course, bloggers.  Plus, you’ll find out pretty quickly who you want to send more stuff to and which outlets are not worth the effort.  From there you may be able to determine which plugs are delivering the most walk-in customers.
  5. Use online resources.  Store signs posted around town may catch the attention of a few customers here and there, but you can dramatically increase your walk-ins by using a number of resources on the worldwide web.  Your website is a great way to increase exposure and reach new customers across the globe (especially if you have an online store), but in order to appeal to locals and visitors, you need to give them incentive to come in.  You should set up accounts with social networking sites like Facebook, Twitter, and Foursquare (just to name a few) and encourage visitors to your website to friend and follow you.  Then offer exclusive discounts, coupons, or freebies to those who drop in and cite your social media as the reason.

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Innovative Ways To Promote Your Travel Company

July 26th, 2011 webkriti

The internet is a huge place now, and for a business to ignore it is potential suicide. From 2005 to 2010 the amount of web pages doubled, and it’s predicted that by 2015 it will be 8 times what it is now. It can represent a huge market, far bigger than any footfall you would get to a shop, so your online presence needs to be attractive in order to convert customers. However, many markets now have become saturated, with thousands of companies vying for the same spots. This has been taken advantage of with the ever changing ‘art’ of SEO, where eventually it comes down to who has the most money and therefore can afford the most online marketing. It is also not helped by the dominance of Google, making the page 1, number 1 spot the most highly fought over and leaving the others out of the game. You therefore need to look to innovative marketing strategies in order to get noticed. Technology today is helping companies achieve this, so here are some of the most creative travel marketing schemes i’ve found.

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What Type of Employee Benefits Should a Small Business Offer?

July 16th, 2011 webkriti


Most large companies offer benefits not because they are required to, but because they want to be competitive.  If you know anything about health insurance then you are probably well aware of the expense of having it (especially if you’re paying for it on your own).  But when it comes to health benefits offered by an employer, you must realize that the reason you pay less is because your employer is paying the lion’s share for your coverage.  However, many small businesses cannot afford this added expense (they can barely afford your salary).  Unfortunately, that could mean they don’t exactly have the pick of the litter when it comes to hiring.  So how far should a struggling company go when offering benefits in order to keep current employees happy and attract new applicants?  Here are just a few benefits that small businesses can feel good about providing.

  1. Limited benefits.  One easy way for a company to save on providing health insurance benefits is to only offer limited plans (so as to cut their own cost).  Although employees will not realize the same access to health care that they might get through a large corporation, having some coverage is better than none.  You might not get to choose the hospitals you can visit or the doctors you like, but at least you won’t be blowing all of your pay on medical costs.
  2. Voluntary benefits.  This is a great alternative for small businesses that allows them to add extra coverage with no additional cost (to the company).  Any employee that wants to may pay more in order to enjoy more choices when it comes to their coverage.  This creates further options not only for the employees (some of whom are more than happy to pay extra in order to get what they want); it also means that small companies have more incentives to help them attract quality employees.
  3. Flexible scheduling.  Although small businesses often demand a lot from their few employees (requiring them to wear multiple hats and sometimes work long hours), they have the ability to offer a lot in return, especially when it comes to flexibility.  Whereas a larger company needs to mandate working hours because it’s the only real way to keep track of everyone, smaller businesses may be able to arrange for swing shifts and flexible hours simply because everyone knows everyone else and the close-knit family atmosphere means that employees will cover the gaps to help each other out.
  4. Telecommuting.  Having a portion (or all) of the staff working remotely can make life easier for everyone.  For the employees, the obvious benefit is avoiding a commute and working from the comfort of home.  And a small business that can allow all employees to work remotely can skirt expenses like a lease, utilities, and liability insurance.  Even those that allow a portion of their staff to work from home can significantly reduce costs.
  5. Carpool rewards.  Depending on the state you live in, you may be able to arrange for government reimbursement if you have enough employees participating in a carpooling program.  You should check your local laws, but it could end up being an appealing benefit to offer employees facing a long commute.

Sarah Danielson writes for Midwest HR, a Chicago corporate wellness program company.

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How to Negotiate a Salary with a New Employee

July 12th, 2011 admin
You have posted a position, conducted interviews and found the perfect candidate. Now this person is asking for a higher salary than what you offered. Negotiating a salary with a new employee does not need to be a dreaded task. Armed with the right tools and knowledge, you can gain the upper hand in salary negotiations.

What should you know before extending an offer?

Know your limits. Your limits may be based on the economy’s climate, the job market, salaries of similar employees, internal salary ranges and the success of your company. It helps to find out the candidate’s most recent salary and benefits. Many companies ask for salary information on the application.

When you make the offer, be clear with the candidate if the offer is not negotiable. If the the salary is not negotiable, then there may be other incentives you can offer this person. However, you need to first determine how much real and potential value the candidate has to offer.

Is the candidate worth it?

The first step in determining the value of this person is to answer a list of specific questions. How desperately does your business need this person? Is it a challenge to find someone with their skill set? Do you need to hire someone right away?

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Utilizing Local Colleges for Interns and Employees

May 21st, 2011 webkriti


There are many ways to keep the employees you already have.  You can give them promotions and raises, engage in team-building exercises, and offer benefits like medical insurance, paid vacation, sick leave, and ongoing education (in the form of educational assistance or even seminars and home tutors but keep the home tuition in mind).  But no matter how many incentives you give employees, eventually they will move on, leaving you with the unfortunate task of hiring someone new.  Even worse, you may have all the employees you can afford without the ability to meet your business obligations.  Whatever your staffing woes, local colleges could offer a solution.  They can provide qualified individuals that may be interested in hiring on with your company or even participating in an internship.  So if you’re thinking that you need some help, paid or otherwise, here are just a few good reasons to set up a partnership with a local college in order to expand your pool of applicants.

1.       Interns are free!  Is there any better reason to bring in an employee than the fact that you’ll receive their services without having to spend a dime?  Of course, there is a disclaimer: they may require some hand-holding.  In fact, you might be giving them their very first job, which means they’ll be a little green.  They require more training and you’ll probably have to keep track of their progress (to report to their professors, at the very least).  But you’ll get at least some work done without the burden of having to hire an additional paid employee (that you might not be able to afford).

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How to Boost Employee Morale

April 29th, 2011 webkriti


The truth about small businesses is that they generally operate on a much smaller budget than larger competitors, meaning that employees have to take on multiple roles (rather than filling a set position) and they often receive less in the way of rewards and other considerations for a job well done.  This can often provide for a rather demoralizing work environment.  However, it is your job, as their employer, to keep morale high and ensure that their efforts on behalf of your business do not go unappreciated.  If you find that your employees seem to be suffering from a perpetual case of “the Mondays”, here are a few ways to help them perk up and get the overall attitude of the office back on track.

1.       Praise.  Most people work for money.  We all have bills to pay, after all, or we wouldn’t need jobs in the first place.  That said, your employees can get a crappy, time-wasting job anywhere.  The reason they work for you is that they get something extra out of it.  They stay because they gain a sense of pride and accomplishment from their work (you hope).  But if you want them to continue to feel that way, you need to let them know that you appreciate the job they do.  So make a point of publicly praising employees who exceed expectations and deliver during crunch time.  This will ensure that productivity and job satisfaction both remain high.

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How to Market Your Day Care Business

December 19th, 2010 admin

The day care business is one of the toughest ones to find a solid marketing plan, simply because it is usually a referral based business.  Still, it is possible to market your day care business effectively if you know how to do it.  Here are several marketing ideas for day care businesses that will help you build your clientele:

Word of Mouth -  Many people assume that word of mouth is not a marketing plan, and for most that is true.  If you know how to install the right procedures, however, word of mouth can be your biggest marketing plan.  When it comes to a day care business, people talking about you in a positive light is the number one way to build business.  No parent likes to put their child in a day care where they know nobody, so having a referral is huge.  As such, you should market that very advantage.

The best way to do this is to build incentives.  Let each and every parent know that if they bring in a referral, they will get a reward.  Sometimes that might be a discount on their rate, and sometimes it might be a prize.  Whatever works the best for your business.  The best thing is a cash reward that can be either applied to their bill, or taken as cash.  This is a huge incentive for your current customers to tout you to their friends.

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What’s The Best Way To “Get The Word Out” About Your Small Business …. Word Of Mouth Or Social Media?

June 29th, 2009 admin

If you have a small local (niche) market, cheap local advertising is somewhat effective for the purpose of exposure. However, I’ve found that word-of-mouth exposure pays off the best.

Thus, I recommend asking your happiest (perhaps even most enthusiastic) clients to recommend your services/products to whomever they feel might be able to use them. Offer them discounts or even freebie incentives to encourage them to refer your business.

If your referral network grows, you might find your existing clients doing most of the selling of your business/products/services for you. Resulting in reduced courting time and cost of sales for you.

However, I think this only works with higher quality or lowest cost positions on the offer curve. Otherwise, your customers would have a difficult time explaining to others why they should use your business.

On using social media ……

Firstly, your focus should be on the long term rather than short term. In the short term it’s more about giving value than getting it. Building relationships and gaining trust is the first aim. Another aim is to drive people to your website, where they can gain value without spending a cent.

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