Direct Mail Marketing For Small Businesses and Consultants

Using direct mail to keep in contact with your customers and potential customers is critical, so here I just want to give you a few pointers as to how you can best optimise a direct mail campaign without it costing too much but ensuring it gives you a return on investment.

To illustrate this, I want to tell you about my hairdresser. Like most men (statistically at least) I don’t tend to have a regular hairdresser that I attend. It changes. I spend around $20 on a hair cut every 6-7 weeks. That’s around $160 per year. So my value to any hairdresser is around $160 per year. Now a ‘switched on’ hairdresser/business owner would send me a reminder every 6-7 weeks that I need my hair cutting. But why should he do this? Because each time I return he is going to get another $20 from me rather than me paying a competitor. Maybe he or she can offer me an incentive – say 10% discount if I ‘sign’ up to him for two years? I think this is worth the cost of a stamp and the time it would take to design a nice small leaflet.

How many hairdressers (of men or women) do this? None that I know. I think they are missing out on a big opportunity.

The issue that I am trying to raise with you here is to ask whether you are investing your money and time trying to drum up new customers when there are tons you already have? Remember the Pareto principle – 80% of your business will come from 20% of your customers. You probably have enough customers already to make this viable without looking for more.

How to do it?

Find your collection of past and present customers. If you don’t have one then build one – I’ll tell you how to do this in another article. Design an inexpensive leaflet that reminds them of you and your services. Be friendly (but not over the top). Remind them of their importance to you and that you are grateful for their business. What you are doing here is simply renewing a relationship that may be in danger of going cold so treat your message like you would an important relationship. Include a call to action – an offer with a limit or deadline. Make sure your contact details are there too.

Here’s an example from that hairdresser I mentioned:

‘Hi (name) We’ve missed seeing you, here at Charlie’s Hairdressers. Well, I’ve got a something special that I think you’ll like. Just bring this leaflet with you when you visit us and we’ll give you 10% off your hair cut’. If allow us to have your address we’ll give you 10% off every time you visit us’.

Likewise, a business coach could offer an hour-long free session for clients who spent a lot of time with them in the last 12 months. Offer something, a great offer, a discount, something that they can get for nothing. This is so healthy when it comes to building relationships and this is the lifeblood of any business.

So give some thought to what you could do and how you would do it. I promise this is marketing time well spent and you won’t regret it.

Sell Your Business and Cash Out!

“In fact, there is ultimately only one reason to create a business of your own, and that is to sell it.” Michael Gerber, The E-Myth Revisited.

Some people create a new business so that they can do what they love to do and/or what they are really good at doing. They think they can make a business out of their talent. The new business owner may not realize that there is much more to creating a business than just doing the technical work. Financials, marketing, ordering, collecting, etc. are all additional tasks to just doing the work. Is this a business that is building equity or are they just creating a job that looks like a business?

The goal according to Mr. Gerber is to build a business that has equity. This equity comes from cash flow, not the kind of equity one gets from buying a building and paying off the note. A business, that has cash flow, can be valued as a cash flow stream. That cash flow stream translates into equity when it is multiplied to figure the value of the business. A business with cash flow sufficient to pay the owner’s salary plus pay additional profits becomes a saleable asset.

How much is business equity worth? A business pays its owner a salary of $150,000 per year plus has net profits at end of year of another $250,000, for that year, is worth $400,000 to the owner. But what will someone pay to buy the business from the owner. At a multiple of 3 to 5 times earnings, assuming continuing income at that level, this business would be worth $1,200,000 to $2,000,000. If the multiple were higher, the business value goes up. The normal range for most business will be within the 3 to 5 range.

The decision to sell is a big one. The business is worth $400,000 in before tax cash flow to the owner. The owner, of course, will have to pay income taxes at ordinary income rates at least of 35%, so the owner could net about $260,000. The real value to the owner, while still working in the business, is $260,000 per year.

Compare to the sale of the business. Assume that the sale was at a five times multiple, then a sales price of $2,000,000. The business has been owned for more than a year so the proceeds will be taxed at long term capital gains rate, which is at this time, 15%. The owner will pay $300,000 in taxes with a net of $1,700,000. This net is about seven times the annual after tax value of $260,000.

The point of selling is to free up the equity. If the net equity of $1,700,000 were invested at 5%, the interest earnings would be $85,000 per year, before taxes. The seller of the business is trading $260,000 per year for less than $85,000 per year.

Most sellers focus on the gross amount of the sale, $2,000,000, in evaluating the transaction. The important issue is not the gross amount but the comparison of the cash flow before and after. There are other factors to consider: need for retirement, desire to use the equity to buy another business, desire to escape the business regimen, etc. The desire to build equity is not the only reason to create a business. If a business is properly created using the six systems for proper planning, the business also is a cash flow machine. The cash flow of the business may very likely exceed the potential reinvestment value (cash flow) of the sales proceeds. The seller needs to look at all aspects of the decision to sell.

Using eBay to Grow Your Business and Build Your List

As most people know without a list even the best of products could be without a sale. List building is a process that no one should ever overlook. As part of any good business plan, list building should be a top priority. List building is a never ending process essential for any online business to be successful, as well as to keep there success alive. Look for ways to build a list within your niche.

When you scour the internet for ideas to build your list. One can easily be overwhelmed by the amount of information available. Some sites will highly recommend going online and searching for blogs, while others will suggest article directories and the list goes on. These are great methods and I use them regularly, Be sure you do not overlook using eBay to get more traffic to your site as well. eBay is one of the largest sites getting millions of hits a day. Some will say eBay is over rated, while other swear by it.. Consider the facts about eBay traffic..

1. eBay is searched and used world wide

2. eBay is the 9th highest site for traffic.

3. Even more amazing is the people who search for eBay are looking to buy…

Did you know that on average 32% of people who are online search every day! Of those who visit eBay, nearly 24% are looking to make a purchase. eBay is loaded with hungry buyers and 4% of those who are searching for products are repeat customers. The average user on eBay views over 14 pages per visit. Everyone who makes a purchase on eBay must give you there email address. There is part of how you get a list.. Another way is in your auctions, have a link to your “about me” page. There you can list outside recourses plus there you can offer them a chance to subscribe to your email list. As you can see eBay is a powerful recourse when used properly.

The question now is What do I sell? How do you stand out from the competition? How do you get noticed?

Let me keep this simple, so simple it would be hard to misunderstand it.

Choose an area of interest, then search Google for products relating to your interest.. There are plenty of free recourses for those products, plus you always have the opportunity to purchase them..

Start by finding 5-6 key products that compliment your niche market.

What do you have an interest in.. The topic could be SEO, PPC, Article writing, Google Adwords, Google AdSense, Google Analytics, eBay traffic, Making Money Online, Website bulding,Meta Tags, the list goes on..

For each of the 5 products, try to have 5 complimenting products as a bonus. Let the customer know you have additional bonuses with every purchase. Include in you bonus an item from one of your other 5 products..

Use digital fulfillment service for your orders.. These services can easily be automated.

These are few good places to get digital items delivered without the hassle of burning CD/DVD’s. CD/Automator, Kunaki Paypal, KunkaiWorldPlay, and Digital Media Solution.

List building is not difficult, it take time and patience. Be sure to use more than one method, as all methods can compliment your efforts.