Reducing Business Running Expenses

Many people gloss over their cost saving practices but it really is extremely important. New and small businesses have got to find a way to create a competitive edge over bigger more established companies.  By far the easiest way to create a competitive edge is to be less expensive than they are. By meticulously analyzing every business outgoing and by being more efficient than your competitors it stands to reason that you will be able to afford to sell your products for less than they can. Never stop looking for ways to reduce expenditure, once your business is up and running, find ways to reduce your business running costs.

Shipping
Trade shipping companies off against each other, as the amount of items you dispatch increases, ask for rate reductions from your shipping company. If they will not reduce your rates, offer your business to other shipping companies. Shipping is very competitive and there are always rate saving deals to be done.

Taking Payments
Credit card payment processors consider new ventures high risk because of charge-backs and the potential that you could go out of business leaving them with warranty / guarantee claims. Consequently, you may end up paying 4% -5% of your credit card turnover to your payment gateway. The thing is, they will not reduce these rates unless you ask. As soon as you establish regular sales patterns ask for reductions in your credit card processing cost. Once again, if they refuse to reduce your rates, as long as your figures are reasonable and you don’t produce lots of chargebacks, your business can be touted around the market for a better deal.

Banking
Gone are the days when staying with your bankers will increase your credit worthiness. Bankers are far less likely to form personal relationships with their customers; computers tend to decide borrowing rates and bank charges so personal relationships are not likely to make any difference. Ask your bank for reductions in charges and borrowing rates and if not received, go elsewhere. Once again use review sites to establish which banks are doing the best business banking deals. Keep an eye on these figures and change your bank or aspects of your banking when a good deal presents itself.

For example: Pakatak makes on average three overseas money transfers per day. We were paying our bank £25 per transaction and when we asked for a reduction in our transfer costs, they refused. We decided to take the money transfer part of our banking to an FX (foreign exchange) company who now charge us just £10 per transfer. Furthermore, we fare much better in the foreign exchange rates we are given, which on average saves us a further £5-£25 per transaction. We have therefore been able to reduce this single business expense by £800-1000 per month. 

If you like the service you receive, you have built up good personal relationships and what you get represents ‘value for money’, don’t change suppliers to simply save a few quid. However, if you can equal the service levels and save a significant percentage, in many cases changing your suppliers has got to be a consideration. Business is far less personal these days, exercise your right to shop around and reduce costs wherever and whenever possible.

Accountancy
Don’t compromise on your accountant. Save money in every other way possible but a good accountant will save you the money you pay them many times over. I have seen good businesses fail on the back of poor accounting advice. I have also seen good businessmen ‘cleaned out’ and demoralized by the pursuit of the ‘tax man’ once again due to the lack of good accounting advice.

Personally, I like to have up-to-date information at all times, so when starting a business I use an accounting package from the outset. There are several accountancy packages on the market that can be purchased relatively inexpensively and the information they provide can be invaluable. Furthermore, if you get into the good practice of recording every transaction more or less as it happens, you won’t get a backlog of work to complete. The information provided can be used by your accountant and should in-turn reduce your annual bill. 

Shopping Around
Before you purchase anything shop around and try to find it for less money. There is no excuse for paying full retail price these days, the internet has opened a competitive marvel where any prospective purchase can be thoroughly researched and prices significantly reduced.

Take full advantage of the search engines and make specific searches for products using marginal search terms in the hope of turning up a non-mainstream supplier who sells the product or service for less money.

Use ebay to its full potential; while ebay and mainstream internet prices are starting to even out, ebay is still excellent for less popular consumer items. Your big brand names like Sony, Panasonic, Phillips etc, etc, don’t tend to work out a lot cheaper on ebay these days but, if you are looking for less mainstream items, there are still big savings to be made. If you’re really enthusiastic, look for auctions ending at unsociable times of the day. eBay auctions increase heavily in the last few minutes, it therefore stands to reason that prices tend to finish lower when there are less people active on the internet. Also, look for auctions that are poorly described and / or lack pictures, as long as you are familiar with the item being sold, poor descriptions and auctions without pictures tend to get overlooked or ignored by a lot of bidders.

Stock Purchases
Research your stock purchases continually, trying not to compromise on quality, look out for similar / same products at lower cost. As the amount of business you do increases ask your suppliers for discounts, they will not want to loose your business and will often oblige. Ask regular suppliers for free samples of other products in their range, most e-commerce packages make it possible to load new products in just a few minutes and you may just stumble on a new fast moving product line without spending any money.

Premises
Your premises will become one of your biggest overheads; don’t take premises until it’s absolutely necessary. If you can work from home, continue to do so for as long as possible. You already pay light, heat, power, rates, etc. running your business from home will only increase these bills by a small percentage – taking business premises duplicates all of these expenses and adds rent or mortgage repayments on top.

When it’s absolutely necessary to take premises try to find a facility that minimizes the cost exposure by perhaps renting some of the space to another business or look for a location where you may pick up some passing retail trade.

General Costs
Painstakingly analyze every business expense large, small or indifferent and ask the following questions:

  • Why did you pay the money?
  • Was the payment absolutely necessary?
  • If necessary, can the amount paid be reduced in the future?

For example: we noticed we were spending on average $80.00 per week on bubble wrap and packaging materials. We decided to buy a heavy-duty shredder that can shred cardboard. We now use the shredded paper and card in heat sealed plastic bags to pack our parcels therefore reducing the amount of bubble wrap required by 60% and at the same time reducing our waste disposal cost by 25%.

The cost saving process may seem obvious but even the best organized among us forget or put off our cost saving procedures. However, continually analyzing and reducing costs will not only dramatically increase the chances of your business succeeding but, if implemented on an already successful business, will seriously increase operating profits.

Increasing Conversion Rates

After traffic generation, goal conversion is at the forefront of most webmasters agenda.  You can receive as much traffic as you like but unless your site converts the visitors into goal conversions, the traffic is relatively useless. Once you have managed to get a visitor to your site, it’s a ‘cardinal sin’ to waste that visit with poor converting landing pages.   Most of your websites direct traffic will arrive on the websites homepage, it’s not unusual for the homepage of a site to be a major exit point. Most traffic analysis packages will tell you how long a visitor has been on your site as well as what page they exited from.  If your homepage is producing a lot of visitor exits with short visit times your homepage may have a retention problem and if this is the case, it must be addressed.

Making sure the pages of your site load quickly. Probably the biggest single offence is a slow loading home page, which can scare off potential customers before your site has a chance to convert the visit into a sale. More than 10 seconds is far too long and you may lose half your visitors before they are presented with a single page from your site. I’ve seen hundreds of home pages that are crammed tight with every product the company sells. This is a mistake, overfilling your homepage slows it down and also bombards your visitors with an overload of information. 

Good navigation – make sure your site is easy to navigate, if you sell multiple products create a good category structure so all your products are as easy to find as possible. Put yourself in your customer’s situation, if they arrive on your site looking for a specific product, does your site provide a logical way to navigate the customer to the product page they are looking for? Try to consider each of the products you sell and from any normal entry-page to your site how easy and intuitive the site makes it for your customers to navigate to the product page for which they are looking.

Good visual experience – fast loading informative pictures, pictures tell a thousand words, remember to take full advantage of this very descriptive medium. I have instances where I have changed a product picture making it more eye-catching and descriptive and the sales per page visit has increased from 1% to 1.5%. Therefore, the change produced 5 extra sales per 1000 product page visits. This is an excellent return for about 30 minutes work and on the basis that this product receives on average 1000 page visits per week; it is still producing a sustained increase in income.

Remember to optimize your images; it’s possible to create high quality images with relatively small file sizes. Failing to optimize your images will result in slow loading pages. Most graphics packages will allow you to reduce the resolution of your images without significantly detracting from the visual quality.

Good information – I’ve said it before and I’ll say it again, there is no substitute for good content. Where products are concerned this means thorough, meaningful and honest descriptions.

Good product range – It stands to reason that you probably won’t have any visitors to convert if your product range is poor or not suited to internet sales.

Deep linking - if your site is attracting traffic from visitors who subsequently fail to find the information or product they originally clicked for, the links bringing the visitors to your site may not be deep linked.  Try to make sure that your incoming links take the visitor directly to the information or product of interest.   

Competitive Pricing – Again it stands to reason, if your prices are significantly higher than your competitors and you offer no incentive or benefit for customers to shop with you over the competition, your site will struggle to produce sales.

Furthermore, in my experience if your customers need to phone to find out how much an item costs, they probably won’t bother. I believe a retail site should clearly advertise product prices. Most of the sites I’ve been involved with are ‘What-You-See-Is-What-You-Pay’ sites, so the customer pays the advertised price and not a penny more (unless there are exceptional requests like shipping to the other side of the world!). We obviously make sure the visitors are aware that the price is as stated at every opportunity.

Give your customers a good reason to shop with you, consider what internet sites you purchase from and contemplate the reasons why you use them, then where appropriate, try to incorporate the best aspects of these sites into your own.

Seven Steps to Market Your Business Online

As more and more people are coming to the internet every day, it has become a huge marketplace. Many small businesses are trying to market their products or services on the internet. The following are the key steps to be followed to successfully market your business online:

Domain name:

The first step is to obtain a good domain name. A domain name is the internet address of your website. Try to obtain a domain name ending with ‘.com’ or ‘.net’. The domain name should be easy to spell and easy to remember. Make sure that somebody else has not trademarked the domain name.

Website:

The next step is to build your own website. The site should be professional looking. It should be easy to navigate and easy to understand. The content should be unique, relevant and of high quality. You may either build your website yourself with the help of different software packages or may take the help of professional web designers. E-Mail List:

Try to build your own E Mail List or Opt-in-List. It helps you to communicate with your present and potential customers and to offer them your products or services. Try to collect the names and E Mail addresses of the visitors to your website by offering them something of value like a newsletter, an E Book or an E Course. Send regular newsletters to the members of your list. Make the newsletters short, professional looking and informative. Make sure to comply with the requirements of the CAN-SPAM Act and include an easy way for your subscribers to unsubscribe from your list.

Search engine optimization:

Search engine optimization or SEO helps your site to achieve a high rank in the different search engines like Google, Yahoo etc. A high rank in the search engines ensure a steady flow of good quality targeted traffic to your website. Different SEO techniques such as, keyword research, meta tags, link building etc. may be used for this purpose.

Advertise your site:

Advertise your site in different places. Different advertising methods may be used such as, ‘Pay Per Click’ or PPC advertising, banner advertising etc. Google Adwords is the most popular PPC network. You may also advertise in various classified sites and traffic exchanges.

Buying a product from your website should be easy. You must provide a shopping cart and a credit card authorization system. The whole shopping process should be very fast and efficient, otherwise you may lose potential customers.

Customer support:

Offer a good customer support service. If you keep your customers happy, they will return to your site to purchase more.

Ten Top Home Business Tips

A Home based business offers many advantages. It helps you to be financially independent and become your own boss. You can work according to your own schedule and can spend more time with your family and friends. But to be successful in your home business, you must work hard and be able to manage your time properly. As you are working from your home, distractions and family responsibilities may get in your way, which may hamper your normal work schedule.  The following are some tips which may help you to manage your time better and to be successful in your home based business:

Before starting your business, do some basic market research. Look for products which are in demand and on which people are spending money. Promote only profitable products with high commissions. But make sure that the products are of good quality and are able to solve people’s problems.

Make a detailed business plan.  The plan should show the initial investment required, the advertising techniques to be used and any other important information.  Try to stick to your plan as far as possible.

Schedule your tasks ahead of time. Set your goals for each day. Work hard and try to meet your goals. Give priority to the more important tasks. Avoid useless surfing on the internet and spend your time on more useful work. To increase productivity, try multitasking. Try to avoid all types of distractions. If necessary, try to outsource some of your jobs.

Make a separate office in your home. You can turn a spare bedroom into your office. If you do not have any room to spare, start working from your own bedroom or leaving room. But make sure that when you are working in your ‘office’, none of your family members should disturb you.

If you are running an online business or using the internet to promote your home business, you must build your own website or landing page/blog and promote them by using various internet marketing techniques.

Use email marketing. Try to build your own opt-in-list by capturing the names and email addresses of your visitors. A list will help you to communicate with your present and potential customers and to offer them your products or services. In exchange of their names and e mails, offer your visitors something of value such as, a free e book or a newsletter.

Use different social networking sites to develop your internet home business. Sites like Myspace, Facebook, Twitter etc. may be used for this.

Use different types of traffic generation strategies such as, Pay Per Click, article marketing, forum marketing, traffic exchanges etc. to drive traffic to your site.

Try to focus on one business at a time. After you become successful in one business, you may branch out to others.

If you want to build a successful home business, make sure to have enough capital to sustain the business for the first six months. Any income during the first six months must be reinvested into the business to make it grow.

Goal conversions and making the most of your traffic

As a website owner you have a goal or accomplishment you wish the visitors your site to perform. The ultimate aim of your site will probably to make some money. Before you make any money you will need a target or a goal. When these targets or goals are met they are called goal conversions. Your goal conversion maybe that the visit results in a sale, other webmasters may have different objectives like Newsletter sign-ups, Mail list sign-ups or that the visitor signs-up to their RSS feed. Whatever your objectives are, once you have someone on your site you must do everything in your power to make sure your site turns the visit into a ‘goal conversion’.

You need to establish where your exit-pages are, good traffic analysis software will tell you what pages your visitors are most likely to exit your site through. You should identify these pages and if they are not natural exit-points, you must do what ever it takes to maintain customer interest on that page.

Special offers
A few well-chosen products at reduced prices.

Competitions
Free to enter competitions (maybe you could ask a question about a piece of information that can be found elsewhere on your site)

Something on-topic and humorous

A joke or story about a related subject

Interesting related facts or statistics
Some topical facts or statistics preferably information intended to further convince the visitor they need your products.

A shocking eye catching statement or picture
Something that makes the visitor stop and look or stop and read. An accident one side of the interstate / motorway often causes a jam on the other. This is because humans are naturally intrigued… play on this instinct.

Anything you can do to maintain visitor interest and keep them on your site will increase page views and ultimately the longer you can keep your visitors on your site the more chance you have of achieving a goal conversion.

Google analytics is free and can provide detailed information and statistics about the visitors to your site. Open a free Google account and sign up for analytics. You will be given a small piece of code to insert into each of the web-pages you wish to monitor. This information is invaluable and if monitored very closely can highlight weak and strong points in the structure of your site.

European shoppers are targeting UK retail products

For years the UK  has been considered one of the most expensive places to buy retail goods in Europe. Retail prices in the UK reached such levels that you could barely switch on the television or pick up a newspaper without seeing headlines using the expression “RIP-OFF Britton”.

Those headlines now feel like a distant memory, with the recent weakness in the pound (£) and the economic downturn causing a general fall in retail prices, it would now seem the UK is one of the least expensive places to buy retail goods in whole of Europe.

The rise of the Euro against the Pound
The rise of the Euro against the Pound

As the graph shows the pound has seriously devalued against the Euro and this means that Europeans with money to spend will get much better value for money spending their cash in the UK. Property prices have fallen off their highs by 20%-30% and together with the weak pound Europeans looking to buy property in the UK will have a perceived 50%-55% decrease in price.

The same thing could be starting to happen in the second hand car market. All through September – November last year I advertised my car in several major on-line and off-line publications without receiving a single legitimate sales call. I recently re-advertised the same vehicle and was amazed when two in every three callers were ringing from Europe and beyond.

On a recent trip to Bulgaria I was further amazed to hear that native Bulgarians are arranging shopping trips to the UK. They are coming to purchase seemingly inexpensive designer goods from stores like TK-Max and everyday goods from outlets like Primark. Groups of Bulgarians are getting together and sending one friend or family member on a cheap flight into the UK, with the sole purpose of purchasing a haul of relatively cheap retail goods.

This undoubtedly highlights an opportunity; UK retailers should be looking to market themselves and their perceived extremely low prices into Europe. Furthermore, European retailers and consumers should be looking to take advantage of the strength of the Euro and where possible purchase goods from the UK.

Choosing an Affiliate Program – the Key Points to Consider

An affiliate marketing business is a great way to earn money online, working from your home. It does not require any direct interaction with your customers. You are not required to stock any goods or to worry about shipping and handling. These are all handled by the merchant. You only have to promote the products and earn commission on each sale. There are hundreds of affiliate programs available online. Each program has it’s own advantages and disadvantages which must be considered before joining the program. The following are some key points which must be considered before joining an affiliate program:

  1. Join only reputed affiliate programs. Before joining any program, do some research about it. You can make a quick search on Google or any other search engine to find out the necessary information and reviews. Forums are also a good source of information. Use Alexa.com to find out the amount of traffic which the merchant website is already receiving.
  2. Select products in which you are personally interested. The best thing is to buy and use the products yourself. Your personal experience of using the products will make it easier for you to convince your customers about the usefulness of the same. The products should be of high quality and capable of solving people’s problems. They should not be too costly. Always go for niches which are growing but do not have too much competition.
  3. The affiliate program must provide the necessary marketing tools, which will help to promote the products.
  4. The program must offer high commission rates. Unless you receive a high commission on sales, you may not be able to recover your marketing and advertising expenses. Always go for programs, which offer commissions of between 30%-70%.
  5. Study the commission structure offered by the program. Some programs pay a fixed amount per sale, whereas others will pay you for having people complete some survey or provide some information. Some programs will pay for repeat sales from the same customer. Some programs follow a 2-tier system where the affiliate is paid for his own direct sales as well as for recruiting new affiliates. All these factors require important consideration.
  6. Look at the payment system. Some programs pay weekly whereas others pay on a monthly basis. Most of the programs have a minimum payout level. You may receive your payment through check or through Paypal or any other payment processor. Make sure that the payments are received in time and on a regular basis.

Is it a good time to start in ecommerce

Some would say that the middle of the worst economic crisis the world has seen for three decades is a very poor time to start any business. Especially a retail business when retail sales have been particularly hard hit by the current downturn.

However, I would say there are some arguments for giving it some consideration.

Existing businesses can’t easily change the business sector they operate in. However, some business sectors are still very buoyant, by starting your business now, you have the opportunity to choose a sector that is still seeing a steady flow of business.

People still need their every day items and during recessions people still tend to purchase the same / similar products but try to buy them for less. Any retailer that targets the value for money conscious will do well in a depressed market.

Even the most frugal among us still feel the need to pamper ourselves on occasions, affordable luxuries tend to do well in recessions

Recessions create a ‘buyers markets’. This means suppliers are far more receptive to new business leads and potentially you may be able to source many of the items required to start your business for considerable less money. Recessions also create a lull the job market, which means if you require staff for your business, high quality applicants are readily available often for much lower salaries. The poor employment climate also creates employee commitment due to nervousness in the security of their job. Employees in hard times tend to be more committed and are more likely to tolerate the sparse facilities often found in a start-up environment.

Hard times force everybody to be more frugal, being frugal is a very important factor of running any new venture. Starting your business with these ethics will mean you are far more likely to carry them on even when the market begins to come out of recession

Probably the most important factor for success in hard times is the drive and enthusiasm on the part of the business owner. Devotion and willingness will keep customers returning over and over again, irrespective of the underlying economic climate.

Anchor text – how to use it and how you would like other sites to backlink to you

anchor_textIt’s first important to understand ‘Anchor text’ and how to use it on your own site and how you would like other sites to use it when linking to you.  ‘Anchor text’ is the word/words on a web page used to attach a hyperlink to. In other words, the phrase or expressions you click when following a link to another web page or website.

wireless camera” is an example where ‘wireless camera’ is what we call the anchor text.

The ‘anchor text’ gives the visitors to your site information about the content of the page behind the link.  Anchor text is important because it informs both human visitors and search engine robots what the target page is all about.

If you use generic expressions like “click here” as your anchor text, you are telling the search engine that the target page is about “click here”. A text link from one site to another should reference what the target page is all about. Search engines read the ‘anchor text’ and make the assumption that if you call the link ‘click here’ the page is all about ‘click here’s’. This is clearly not going to help with the optimization of the page.

Proof of how important anchor text is that it’s possible to get a page listed in the top 10 on Google for a phrase that does not appear in the pages content. In other words, using anchored links from several high ranking third-party sites could push a page to the top of Google for the expression featured in the anchor text even though the page is neither about or features the anchor text expression in its content.

When asking sites to link to you, consider providing the link code for them. If you provide the HTML code so they can simply cut and paste it into their page, you get to choose your own anchor text. An example of the link code you might provide could look something like this:

<a href=”http://www.pakatak.co.uk/camera/camera.htm”>
Wireless Cameras</a>

Mix your text links up! Use different expressions so as to avoid over optimizing any one expression.

Anchor text should be well utilized for your:

  • Incoming links – links from other sites
  • External links – links to other sites
  • Internal links – links on your pages to other pages on your site
  • Site map links – one page that links to every other page on your site
  • Home page links – links on your home page to other pages on your site

Using Keywords in your body text to Create Anchor Text

Try to use important keyword phrases in your page’s body text and link it to relevant target pages within your own site. The paragraph below is an example of how this can be achieved:

_____________________

Wireless cameras are getting smaller and lighter and at the same time wireless camera prices are coming down. The Spy camera and covert camera ranges have seen a steady reduction in cost and at the same time product quality and wireless transmission ranges have increased. Without obstacles our covert cameras will transmit a clear wireless signal up to 100m. Some of the larger Infrared camera units have detachable yagi antennas meaning that wireless transmission distances can be easily increased with high gain antennas. The night vision camera and infrared camera ranges have also seen the same reduction in price but unit sizes have stayed constant to incorporate the Infrared LED’s.

_____________________

This example has been exaggerated but it shows how easy it is to first of all weight the text on your site with your target expressions and on occasions, anchor the text with a link to another area of your website.

Keyword density is used to describe the percentage of keywords to normal text contained on your web page. Keyword density should not generally exceed 20%

Don’t forget that people will also read your anchor text links. Make sure that the words in your anchor text also make sense to your human visitors.

Product Selection – What Product to sell online

I was asked the following question by Carlos Escobar in a response to one of my recent posts and while writing the answer I decided that it would make a good post in it’s own right… The question was:

“I would like to identify the right products to be sold on the web. Can you please help me with this process?”

The question is actually almost impossible for me to answer and I hope the following clarifies why.

From a personal viewpoint it’s essential that you have a genuine interest and some degree of knowledge in whatever it is you intend to sell.  You’re going to be spending a lot of time working with your product, writing about your product and talking about your product.  It’s therefore very important that you have a passion for the line of business your in and for the product you sell.

From a commercial point-of-view your budget and resources will definitely have some bearing on your chosen product.  If you have a very small budget it maybe prudent to avoid mainstream markets.  If you have a larger budget and some ideas on how you can improve on what the competition in that market place are doing, you may wish to tackle an industry where you know a vibrant market exists.   However, I myself always look for niche markets, product ranges where I can expand the business into related areas in a sustainable and timely fashion.

Let me give you an example: Pakatak – Security Cameras started with a single wireless spy camera product.  Once I realised there was a market for the product we expanded the range to cater for security cameras and surveillance cameras.  Six years later, the business now sells a complete range of CCTV and surveillance equipment and has a turnover of over $750,000.

There are hundreds of similar markets that can be taken advantage of.  When researching potential markets I use this product analysis technique.

It’s very difficult for me to be specific and tell you precisely what product line you should sell.  It’s a very individual thing that involves personal preferences and beliefs and as mentioned the amount of funding you have available will play its part. 

I personally like to start small with just a handful of products.  I normally test a product on eBay to see if there is a market for it and once I’ve established a market exists, I may then build a website to retail them.

Just recently, I’ve been working on a venture that sells headphones nothing more nothing less.  This site has grown very quickly over the course of 2-3 months and already sells 20-25 units per day with a mean $6 profit per unit.  So it’s already a very nice little earner.  Specializing on one product allows me to ‘home in’ on potential sales, perfecting my search expressions specifically for people looking for headphones.  I can afford to be far more targeted than other electronics resellers because that’s all the website sells.

It also means that there is far less competition for the organic expressions.  This means your site is far more likely to receive a steady flow of highly targeted free traffic.

I’m also considering a site selling ‘remote controls’. Anybody who wants to beat me to the punch feel free, there’s plenty of other niche markets out there and more than enough business to go round.