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Saturday, July 24, 2010

A small business turnaround executed without injecting a single cent in more capital

The two principal shareholders of the small business stared back at me in disbelief as I calmly explained the simple rescue plan we would use to turnaround their ailing small business. Exhaustion and desperation were written all over their faces and in a way I felt pity for them.

The pair had already lost a small fortune in just one year of operation. The only reason why they had not shut down the damned thing was that they were hoping for some miracle that would recover at least half their life savings. Yes they had sunk in all their life savings in this floundering small business.

But then theirs is the story of hundreds of thousands of entrepreneurs the world over who continue to launch thousands of new magazines every year without the very special skills that are required to run this complex and yet potentially profitable business. Others launch a small business with every kind of system except a simple selling system to constantly generate sales which is the lifeblood of any business.

Taking stock of the small business I was supposed to help rescue, I quickly came to the realization that all they had left at this bankrupt magazine now was a small demoralized sales team ready to quit the moment they found jobs elsewhere. No reporters, no writers, no budget to get good writers on board. How do you rescue a magazine without quality content and without funding? It can actually be done with a selling system.

I quickly called a meeting and tried to inspire the shabby remnant, assuring them that the magazine was now in good hands and that things would improve. Luckily they did not sense the cold fear creeping up my spine nor did they seem to realize that I had already broken into a cold sweat. In business there are no guarantees – you win some and you lose others. What right did I have to make all these promises? What if I failed in this assignment?

I proceeded to swiftly train the handful of sales people and changed them from advertising sales persons into “reporters”. They were to go out and gather information.

Gather information!? When you need revenue so badly? Actually the first step to turn around any business is to gather lots of information. But let’s see how it panned out with the small business magazine.

The information gathering was part of a simple system I had quickly designed consisting of the following steps,

1) “Reporter” calls up a potential client and books an appointment for an interview.

2) I accompany them to the interview and I do both a thorough and professional job of it.

3) After the interview, we make an editorial decision whether the material merited a feature article in the magazine or not. And if it did whether the story would end up being positive or negative. (Any publisher will tell you that bad news sells much better than good news.)

If it merited a positive story, we would go ahead and write the story and then later approach the same client to book an advertisement so as to get a double maximum impact in the same issue. Alternatively they would have their advertisement appear in a future issue.

4) If the story was negative we would avoid approaching the source to place an ad in the magazine. We would instead go ahead and write our big story with a little additional research from other sources. The reporter would then approach a competitor to the business in question (who was not in the same mess) for a brief comment and an advertisement to take advantage of the focus on the industry
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5) Other times an interviewer supplied us with a tip to pursue another company or organization for a lead story, which we would also do.

Using this simple system that maximized on the meager resources that were available, we literally killed two birds with one stone. The advertising space sales team were able to get very good quality leads for advertising sales and turned most of them into much needed solid sales. The big secret here is that they were able to use the writer’s interview session to build rapport with the client/news source.

Secondly, in the process we were able to do quality research work for all the stories we carried in the business magazine which improved our readership and the confidence of advertisers as well on the quality of the monthly business publication.

This was of course combined with some careful house-keeping where we kept a very careful eye on costs by designing a system that would monitor costs on a daily basis. Within 8 weeks the magazine was making a profit and in one year, if you came calling, you would not believe it was the same previously dying magazine.

Magazines can be very profitable. They can also be huge cash drains. It all depends on you doing the following;
- Creating workable systems for generating revenue through selling advertising and other systems for generating revenue from subscription and single copy sales. The systems you create must be so simple that the staff training required will be minimal.
It’s as simple as that. And that’s exactly how I turned around an ailing small business.
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You can read another extremely useful small business turnaround article by the same author.

Wednesday, July 21, 2010

Turnaround any small business with this big secret

I have seen it so many times over the years that it is almost boring now. Sales of the small business dry up and the owner gets increasingly desperate but they either run around like a headless chicken doing all the wrong things at the same time. Or they just sit around doing nothing. Either reaction has exactly the same result. The business continues to slowly but surely sink like the leaking Titanic in the middle of the Atlantic Ocean. And it does not matter whether you are talking about a bricks and mortar business or an online enterprise the scenario is usually exactly the same.

And yet most of these small businesses can be saved and completely turned around into profitability. It is all so simple that it pains me why there has to be so much pain and suffering and losses as small businesses with great potential go down when they could have been so easily saved.

The easiest surest way to turnaround any small business is to create a winning selling system that will start generating sales and revenues for the small business. It is like injecting blood into a dying man who has lost way too much blood, usually the recovery after the blood transfusion is almost instantaneous.

What is this selling system thing and why is it so effective in turning around any ailing business?

Almost any work can be systematic. "Systems" are how the military makes it look so easy to manage so many people and organize them into a ferocious fighting machine that wins wars. Systems are how good work gets done. Highly successful household names like McDonald's did not grow to what they are today by hiring people and then asking them to get the job done the best way they know how. Actually what McDonald's did was to carefully document systems that worked best for the business. The result is that it is simple for virtually anybody to duplicate the system and become successful at the business. It is simply a matter of working the system – if it is a good system it will respond and give you miraculous results.

You can imagine that this is even more crucial when it comes to the most difficult aspect of running any business. And that is selling whatever it is that you sell. Anybody who has ran any business for any length of time will know how difficult it is to generate leads and then find a way to convert them into actual sales. This is exactly what a selling system does for a small business.

Actually a good working selling system should constantly generate new leads and then gradually process them by moving them along a process until they are ready to buy. If you have designed a good selling system it should work like clockwork.

Even if your business is not doing badly, you need a selling system to take you to the next level. There are various ways to come up with one. For instance you can study the most successful companies in your industry and discover the selling systems they have adopted for their success. Always remember that success is never an accident.

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My ebook "How I turned around my ailing small business in 7 days flat" is packed with turnaround small business tips that are guaranteed to work and you can get it free if you visit the page right away.

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