Time to review and cut costs forever

In these troubled times when most companies panic and look to cut costs inways that should be encouraged and used now and when times are good.
It is time to partner with vendors to review what costs can be cut in both operations that can be passed on in cost decreases to the customer and more profits for the vendor.
It is time to question lead times and order quantities. It is time to discuss payment terms and live up to them.
It is time to review the costs with all vendors BUT on a systematic ABC analysis approach to the problem.
It is time to weigh the cost of the product versus the cost of carrying the inventory if imported.
It is time to question everything that is not nailed down and not take NO or CAN'T for an answer.
Those companies that have or will implement not only a cut cost now policy BUT a long term working relationship with vendor partners that keep costs in line ALL the time.
Remember when times get better the cost savings and committments that are implemented NOW will pay extra dividends then.
Bruce Rubin

Time to review and cut costs forever

In these troubled times companies will look for ways to cut costs.

What ls New Needs to Be Proven

If you have an idea for a product or service you need to prove to yourself first that it is unique and provides a value for the cost.
Too many product ideas never see the light of day and never make it to market because the intended marketplace is too small and NOT truly needed.
Therefore if you have a product idea, do market research and determine the size of the market in both UNITS and more important dollars.
You also have to figure that your percentage of the total market will NOT be 100%, therefore if you determine that there are 10 million customers for the product and over time if you can sell 10% of the market then the project sales will most likely be in the 150K-200K range per year once up to speed.
Well even though that could be a large UNIT volume you then need to see what the DOLLARS will be as well as how many customers, assuming a retail product, you need to sell.
Unless wnhat I described above relates to product that sells for $30 or more this is NOT a viable product and will not sell.
Do the research and you will see what I am saying is correct

Forecasting-Ways to Test Reasonableness and Success For New Products

I was working with a client last week and we were reviewing new product forecasts with their major accounts. In the process of this review I was testing for reasonableness of the weekly forecast based upon the intial roll out quantity and the annuallized weekly forecast. Typically a ratio of between 4 and 8 should be the answer received. If the answer is below four than the answer needs to be checked against other items being sold to this retailer to see what their turnover rates are, if they are all above four than the new item forecast shousl be questioned as to why and will there be a potential loser in this product. If the answer is over eight then the same test should be performed and depending on the answer the forecast should be reviewed. If for some reason the answer is over 20 turns as it was with one item we reviewed then other questions must be asked. They must be asked because turns in excess of 20 will mean a great many empty shelves and lost sales at the retail level unless there are multiple facings of the product and therefore the forecast maybe accurate but the number of turns needs to be reduced.
As a double check of the forecast and assuming your comapny can receive P-O-S data there should be a correlation between the retail sales after a few weeks and the "final" level reached for the product. Determining this correlation and quickly being able to determine the "final" sales figures will help in ordering more product sooner or the cancellation or delay of product already ordered. Having these models will go along way to having better inventory turns and less closeouts.

75 tips to starting a business-numbers 1-10

75 Startup Secrets Here are the tips, tricks and inside info you need when starting a business.
Many people who have always wanted to start their own business never do, simply because they're overwhelmed by the process and unsure of what specifically is involved. With a to-do list that includes everything from writing a business plan to coming up with a name to hiring employees, startup can seem daunting. But don't worry--we've simplified the process by going straight to the experts to find out their top 75 tops for startup succss, so you can master the process step by step. Your first step: Start reading.

Got a (Business) Plan?A solid plan can help you start off strong and stay that way.
Writing a business plan is one of the first steps you should take toward startup, well before you launch your business. "A lot of businesses fail to write a business plan at all until they get in a jam," says Linda Pinson, author of Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company's Future. "They need money or a strategic partner: They come across a requirement for [which they need] business planning, and all of a sudden they're panicked."
A business plan will serve as your guide to decision making during the life of your business, starting with the question of whether to start in the first place. The second use of a plan is to satisfy lenders and investors, virtually all of whom will require a written business plan before approving a loan or making an equity investment. Plans also serve as a means of communicating with potential partners, allies, vendors, employees and even customers.
1. Before putting pen to paper, research resources and tools that can help. In addition to books, software programs can automate the task. You can get live help from your local SBA office or Small Business Development Center, college and university classes, and private courses or conferences. You probably shouldn't plan to farm the entire job out to a consultant, however: "Good consultants run anywhere from $300 an hour down, and generally the quality of the services is commensurate with the fee," says Pinson, adding that having a consultant craft a good plan will run you $5,000 to $10,000.
2. Back up your concepts with numbers. Keep in mind, a business plan is both qualitative and quantitative. "A business plan is not just writing about what your vision of your business is," Pinson says. "It's interpreting it in financial terms that you can measure." That means you'll need some numbers--as precise and accurate as possible--in addition to verbal descriptions of your plans.
Start by writing the conceptual part, then move to the financial part. "Interpret those concepts in terms of dollars," says Pinson. For instance, starting with an idea of how frequently you'll advertise, how large the ad will be and where it will run, you can find out how much it costs. This will give you a number to plug in for advertising costs. Says Pinson, "The conceptual or text part of your plan has no validity without the financial part."
3. Be realistic when making projections. "One of the most frequent errors made when writing a business plan is over-estimating revenue and under-estimating expenses," Pinson says. Improve revenue estimates by narrowing your target market down to a realistic niche, then interpret revenue and expenses in terms of that market, Pinson advises. Start by identifying potential customers, then slice off those who aren't ready to buy, can't be marketed to effectively, can't afford your solution or don't consider it a need.
4. At minimum, include monthly cash-flow projections for the first year. "Cash flow is the critical issue," Pinson says. Also prepare an overall projection of profit and loss for three years, as well as a projected balance sheet. Calculate the break-even point at which sales will cover costs. Research financial ratios specific to your industry, and look at published industry-specific ratios to make sure your assumptions are realistic. Says Pinson, "If grocers make a one-half-percent profit and you're [projecting your] grocery store [will have] a 28 percent profit, you'd probably better rethink your projections."
5. Pay special attention to marketing. First, develop goals. Second, do a market analysis, including identifying target markets, researching competition and assessing market trends. Then prepare a marketing strategy, including your approaches to sales, promotions, advertising, PR, networking, community building, customer service and other marketing channels and tools. Develop a plan to implement that marketing strategy, and include benchmarks to see if what you planned actually happened.
Continue learning: Visit our Business Plan center for an in-depth guide on writing your business plan, calculators that'll help you determine your business numbers, and more than 50 sample business plans to download.

Right on TargetChoose your target customer, then take aim in the right direction.
Open the doors to your business, and it's easy to think of the whole world as your oyster. Why focus on a target market and exclude all those other market segments with which you could be conducting business, right?
"A big problem for many small businesses is that they are so desperate and so grateful for anyone who buys from them, they don't go the next step and ask who they should be doing business with," says Lisa Fortini-Campbell, adjunct professor of management at Northwestern University's Kellogg School of Management in Chicago and founder of market research and consulting firm The Fortini-Campbell Company.
Targeting the right prospects can mean the difference between success and failure. Before taking a scattershot approach to building a customer base, consider these tips:
6. Don't assume. Fortini-Campbell, who is also the author of Hitting the Sweet Spot: How Consumer Insights Can Inspire Better Marketing and Advertising, says that too often, small-business owners assume they know what their customers will want before doing their homework. "If you want to launch a catering company and think it's only about serving good food, but your customers really want all the trappings that come along with having someone serve them--such as the dishes and the table décor--you're going to lose business if you're not prepared to deliver that experience," says Fortini-Campbell.
She says that since your future customers are currently buying from other places, you should use your competitors as a research tool. Make note of not only what your competitors are selling, but how they are marketing and selling their products and services. "All your future customers are out there buying from someone else now," says Fortini-Campbell. "What are they buying? Who are they buying from? What can you learn about what others are doing?"
7. Find the perfect match. "The most important thing a small-business owner can do is figure out what kind of customers will help them get to the goal. Who are the most strategically valuable people to them?" says Fortini-Campbell. "Do you need a lot of people who buy a lot, or people who buy across an entire service line?" Is your ideal customer a business or an individual? Affluent or middle-income? Is he or she local, or does geography not matter? Identify as many traits as possible so you can organize your business to keep those customers coming back.
8. Identify different segments. After you've outlined whom your best customers will be, recognize that you may have more than one profile, says Fortini-Campbell. For instance, the catering business we mentioned may find lucrative market segments in cooking and presenting elaborate holiday meals for affluent families, as well as providing simple, daily heat-and-serve meals for busy working parents.
9. Use free market-research tools. "The internet is a wealth of information," says Fortini-Campbell. "Search on any topic and you will find websites, blogs and discussion rooms on everything imaginable." In addition to the great number of books available on market research and targeting customers (including her own), she recommends checking out the free market-research resources available in your state, county or municipal economic development offices to see which market segments are growing in your area.
10. Service, service, service. "More small businesses lose customers [due to] poor service than bad products," says Fortini-Campbell. Your business's most important marketing tool is the way you conduct sales and service customers. Every time you do work for a client, you are marketing yourself, she says. When you do that well, customers pay you back with loyalty and referrals.
Continue learning: Got your target market figured out? Then go the extra mile and complete your marketing plan.

Have an idea of where you are headed

I was invited to participate as a judge at a local university's entrepreneurial idea contest and what was generally missing from most of the entries was the research to understand the size and scope of the potential marketplace as well as the research to see if the idea or product was already there and if the idea or project was technically feasible or viable. Therefore when you have a product idea DO THE RESEARCH, the amount of available information at your finger tips is enormous and use it. Use search engines, wikipedia, and similar computer based data. You should also use reference information available at you local library where both hard copies as well as computer based information is available and most times with someone who can help you narrow and define your search for information. Once you pass this stage and no matter what the proiduct is do some leg work in the potential marketplace either with retail visits to sthe appropriate stores or calls and other contacts to industrial or business customers. I cannot apeak to internet based ideas and website based business concepts but I am sure if your idea is out there you will find it and if unique enough someone will help you make it happen. If you need help in bringing your ideas to market and would like to discuss them contact me at BHR GLOBAL ASSOCIATES email: bhrglobal@aol.com or at 267-664-5165. The introductory session is always free.

Are you sure they will come

One of the major mistakes that an extrepreneur and company can make is to over price a product or price a product against the wrong competition. The selling price to consumers should be based upon research of the marketplace you want to sell into. If you do your research at Neimann-Marcus for expample then don't go to Walmart to sell your product at the price points found. This point can best be seen from the experience I had with a company that had an organization product that was priced compared against the high end of the marketplace and then began selling into the mass market arena. Obviously the high end or specialty retailer's price points and volume vary greatly from the mass merchants and the end result was what you would have thought-little acceptance by buyers and less acceptance by the consuming public. Therefore, if you want to have a chance at success you must research the marketplace that you will sell into and be competitive with the products that are already there and your uniqueness will then have a chance to succeed. If you would like help in getting products to market properly contact us at bhrglobal@aol.com or call us at 267-664-5165. Our website will be up shortly.

Sourcing Issues

Once you have your product and you are ready to have it produced, be careful. Being careful not only where you source the product BUT mpore important who you source the product with. The finding of a source must include a number of parameters. First they must meet your cost criteria. Second they must meet your quality criteria. Third they must have the ability to meet and exceed your production expectations. Fourth they must be reliable and easy to work with. Fifthe they must be able to meet your delivery dates. If you find vendors who can meet these criteria then use them BUT before you choose insure you have quotes from a number of sources and you have visited the finalist in all cases. Making a decision on a source strictly from verbal or written communication could be a grave msitake. This is true regardless of the location of the vendor. The location be it in your country or overseas is not to be selected without a visit. If you are dealing in a foreign country you should also have a contact outside the company and an agent who could watch out for your well being when you are not there. If there are any concerns on your part I would suggest that you are present when production begons on your product and visit for a number of days thereafter to isnure that the quality you saw was not just a show piece for your inital reaction. If the product is being run on more than one shift I would recommend you visit all the shifts to insure consistancy. You do not want to hear, "oh, that happened on the third shift." Follow these simple rules and your product will look and act like you wanted it too, do not and you get what you deserve-trouble and problems that could ruin your business. Remember it is not only about the lowest price, it is about the best total cost.