Archive | Best Practice

What is worse: greedy corporations or lazy consumers?

How often do we pay for things we don’t need because we don’t think to question our long-standing outgoings?

Big companies, especially utilities, telecoms etc rely on consumer and business inertia to generate huge profits. What do I mean by that? Well, it’s simply the fact that for many people, once they have signed on the dotted line, it is easier to just keep making the monthly payments (especially if they are done via direct debit from their bank account) rather than go through the process of checking for better deals and switching to another service provider.

Even now, when there are numerous websites that will do all the comparisons for you and even handle the process of switching and managing the change to payment details, a lot of people will simply just not do it.

This is one reason why many companies are prepared to offer very generous terms to new customers to get them to sign up for contracts, as they know that customers will often keep on paying the same rate even though, over time, it has become a poor deal. The longer the initial term of the deal, the more likely that customers will stick and not switch

Every regular payment should be scrutinised in the same way that you would check your small change in the local shop.

I’ve just recently reviewed my domain name holdings and online hosting plan and saved my business a significant amount of money which previously trickled out almost unnoticed in a steady stream of outgoings spread over the year.

There are other ways that corporations boost their profits by capitalising on consumer inaction.

Gift-Card

Did you know that gift certificates/cards/tokens purchased from popular outlets for friends and family can boost profits for retailers due to often hidden terms that see the gift cards expire after 12 months? This renders the money spent on them pure profit.

In 2006 it was estimated that the value of unredeemed gift cards was almost US$8 billion. Many people are unaware of this and savvy/unscrupulous (your choice) businesses take advantage of it. Some states in North America (e.g. California, Massachusetts, Ohio, Washington) have enacted laws to eliminate non-use fees or expirations.

Maybe there is an opportunity here to differentiate your business from theirs by advertising gift cards that don’t expire. I’m sure your accountant/CPA will brand that advice as reckless or irresponsible(!) but in practice it won’t make much difference to the percentage of your gift cards that are actually redeemed. If you are not currently offering any form of gift/delayed redemption card they can be very profitable in almost all sectors and you might like to give it some thought.

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Turn and face the strange

Ch-ch-ch-ch-changes

Change is inevitable, do you embrace it?

A few notable dates:

1990 – Tim Berners-Lee invented the World Wide Web
1993 – The Mosaic web browser was published allowing graphics and text to mix on a page for the first time
1995 – eBay launched
1998 – PayPal first appeared
2007 – 1st iPhone released

In a little over 20 years, less than a generation, the way the World does business – and I do mean the World, has completely changed. In many ways the real change has taken place in less than 10 years – since smartphones and tablets have become widely adopted.

In many ways, the changes have been so significant, so fundamental that it is difficult to look back and remember what it was like before the dawning of the Digital Revolution.

Can you imagine what it would be like not to be able to order almost anything online and have it delivered to your door the next day, maybe even the same day?

Can you imagine not being able to access your bank account from anywhere in the world, at any time of day?

Can you remember a time before smartphones were everywhere and even primary/elementary school age children not only knew how to use them but had their own?

Can you remember the time when people asked you a question and you either didn’t know the answer or decided to go to a library to find out rather than saying: “Hold on a moment, I’ll just Google that?”

Can you remember the time when people went out and talked to each other rather than stared at their phone?! – Sorry, that last one just slipped in and makes me sound really old!

How has your business changed in the last 10 or 20 years? Many businesses see themselves as immune from change and indeed can survive without embracing any revolutionary change but there are few that could not either increase their turnover, profit or efficiency though looking at their operations through the eyes of one of those smartphone wielding youngsters.

Some examples serve (sorry) to prove a point. Fast food delivery services such as GrubHub, Eat24Hours and Seamless in the US and JustEat, Hungry House and Deliveroo in the UK show how traditionally moribund industries can embrace entrepreneurial change to deliver (no pun intended) business growth.

The use of crowd funding sites like Kickstarter and Crowdcube allows innovators to circumvent traditional sources of funding; banks and venture capitalists and gets committed, enthusiastic investors who can then turn out to be vocal advocates of the finished product after launch.

Some businesses have complete eschewed the traditional market place and exist purely online. For those businesses that are successful, this is an attractive model due to the extremely low operating costs compared to the more traditional business, especially delivering a digital product where the costs involved with ‘inventory’ are close to zero.

Many traditional businesses are not left out in the cold and display noteworthy innovation. Some of the more successful companies embrace the physical and the virtual marketplace with a store/shop/depot backed up with an online presence either a bespoke corporate website or possibly an eBay store for a smaller venture.

Many have found that the greater freedom of the online space gives them the opportunity to improve their quality of life by freeing themselves from slavish opening hours through taking orders from a much wider client base, possibly including international customers and shipping them via courier services. Their working days have gone down from 16 hours to just enough to service their daily orders.

When was the last time you took a critical look at your business and evaluated just how much you could ring the ch-ch-ch-ch-changes to increase your margins and decrease your working day?

Ch-ch-ch-ch-changes
Turn and face the strange
Ch-ch-changes
Don’t tell them to grow up and out of it

David Bowie – Changes

Unmasked: An Analysis of 10 Million Passwords

How strong are your passwords? Here’s an analysis of 10 million via @wpengine

Source: Unmasked: An Analysis of 10 Million Passwords

This is a good, albeit slightly nerdy, read.  It explains just how weak many pa$$word5 are, even when we think they’re not. From a business continuity point of view, how would your enterprise survive an online attack? Think about the number of sites you logon to on a regular basis: your WordPress site that powers your blog, an online retail site which hosts your e-tail provider, eBay, Amazon. How about PayPal and your online banking – what if they were taken down?!

Like many others, I use the services of an password manager, my weapon of choice is LastPass (https://lastpass.com/) which you can use for free. This provides incredibly secure passwords for all my logins and, as I use the premium version – a snip at only $12 per year, I can use it on all my devices as can all of my family. This takes all the hassle out of worrying about remembering individual secure passwords for all your logins.  All you have to remember is one safe master password and LastPass does the rest [other password managers are available].  This is an example of an 18 character password that I just asked LastPass to generate for me: U~ff!Tu%S4Inq^%g9p. That last one is the full stop at the end of the sentence by the way!  Checking the strength of that password reveals that it would take a ‘massive cracking array scenario with an assumption of one hundred trillion guesses per second’ (which sounds impressive) – 1.28 trillion centuries to crack.  In my book, that’s quite a long time.

Long story short – get a password manager!

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3 keys to profitability: cost of goods sold, markup, and margin – support

If you don’t know the expected gross profit margin percentage for your business, don’t you think you should? Join an industry association, or search the Internet for more details about expected profit margins in your industry.

Stan Snyder, CPA and expert bean counter gives Microsoft’s Office site an insight into the technical issues from an accountant’s point of view.

Knowing the average gross profit margin for your industry will help you to compare your business to other businesses in your region and remain competitive. Tracking the changes in your actual gross profit over time will help you to price your products to maximize gross profit and net income.

via 3 keys to profitability: cost of goods sold, markup, and margin – support.

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Managing the Gross Margin of your Ecommerce Business » Practical Ecommerce

The gross margin calculation of sales minus cost of goods sold is a fundamental key performance indicator of any business that sells products. It measures the profit generated from each product you sell. It is something that many small ecommerce merchants overlook when they focus exclusively on revenue growth or volume.

Dale Traxler takes a look at some fundamentals of ecommerce strategy that we would be wise to note.

via Managing the Gross Margin of your Ecommerce Business » Practical Ecommerce.

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Rank by importance – then why for #1 and #3: cost reduction, revenue growth, or margin improvement? – Ask Jeeves

An incomprehensible title(!) but a great conversation between senior industry figures debating which comes first on their list of priorities; increasing revenue, reducing costs or improving margins.

What is your take, which would you put first?

Rank by importance – then why for #1 and #3: cost reduction, revenue growth, or margin improvement? – Ask Jeeves.

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