There is both good news and bad news when it comes to the level of small business financial literacy possessed by the average Canadian small business owner. The results of a recent small business financial literacy quiz conducted by Intuit Canada show that more than 8 out of 10 respondents failed to achieve a score of “good or basic knowledge” or better. Nearly half of these respondents revealed “well below basic knowledge.”Put another way, only 17 percent of respondents achieved a score of “very good knowledge” or better, and only 2% said they have “great knowledge.” The quiz consisted of 10 questions about business financial fundamentals, such as what is the role of the balance sheet and how can short-term cash flow be improved?What’s the Good News?That’s the bad news. The good news is that a majority of the respondents said they understand that financial management is important to the success of their business and they need to start closing the “knowledge gap.” Specifically:
42 percent said they wanted to spend more time with an accountant.
24 percent said they would benefit from information sessions with other small business owners.
22 percent said they would benefit from online tutorials.
The study indicates that small business owners’ use of financial literacy tools and resources increases their financial management confidence. Three-quarters of respondents who use financial software are confident that they have a good knowledge of accounting principles. Only 16 percent of respondents who rely on their own financial knowledge expressed this same level of confidence.Up Close and PersonalIn our position as small business financial consultants, we see the reality of these statistics up close and personal every day. Most entrepreneurs start businesses because they have particular talents or skills when it comes to manufacturing and delivering a product or providing a professional service – not because they are financial experts. However, they quickly learn that a good level of financial knowledge is very important to achieving success.It’s not uncommon for an entrepreneur to have a great business idea or product, a strong distribution system and/or sales force, a crack customer service team and raving customer reviews – only to fail because it suffered from poor cash flow.You’ve probably heard it said before that “cash flow is the lifeblood of a business” and it’s true. Companies can often withstand short-term periods of slow sales, and even unprofitability, but a lack of cash flow can prove fatal – even to companies with strong sales and high profits.Cash Flow SolutionsIf your company is suffering from poor cash flow, you owe it to yourself to speak with a small business financial consultant willing to sit down with you and help analyze your situation and suggest solutions. Often, these involve asset-based lending (ABL) solutions like factoring and accounts receivable (A/R) financing.A full-service factoring company will purchase selected receivables on an ongoing basis for a small discount to provide immediate cash flow for your business. This form of financing is widely used around the world – credit card companies are essentially doing the same thing. The elimination of a “receivables lag” can mean the difference between success and failure for businesses with a lack of working capital, or those that are operating with long or unreliable cash conversion cycles.An A/R financing company will lend to a business based on the total value of its eligible receivables. There is a subtle but important difference between this and factoring receivables outright: With A/R financing, the receivables become the primary collateral, a workable advance rate is established, and the company is able to call upon funds based on the “borrowing base” of eligible receivables.Many business owners fail to seriously consider these two options because they are unaware of how they work. They don’t realize how quick and easy it is to qualify, or the many advantages of these options over traditional financing. And many think they are simply too expensive but fail to ask themselves, “Compared to what?” The result of doing nothing is sometimes the loss of the business or bankruptcy.Don’t Be a Statistic Statistics indicate how hard it is to be a successful Canadian small business: While 85 percent of Canadian small businesses make it through the first year, only 51 percent are still around after five years. How many of these failures could have been prevented with a bit of knowledge and a stronger grasp of business financial management?If you own a business or know someone who does, you are in a position to alter the statistics directly. Start by learning about or improving your knowledge of alternative financing solutions. The success or failure of many Canadian small businesses may depend on it.
Canadian Small Business Owners: “Lacking in Financial Literacy”
Auction Listings Are Vital to the Success of Fundraising Auctions
Fundraising Auction Tip: You should always provide potential bidders with a printed Auction Listing of both your Live and Silent Auction items at any Fundraising Auction. A printed Auction Listing is vital for several reasons:
An Auction Listing informs bidders of the order of sale, and what is coming up next. If you keep your bidders guessing, they will simply not bid.
If bidders are not 100% certain of what they are bidding on, they will not bid. A printed Auction Listing should answer any and all questions about what is being sold in order to encourage bidders to bid as much as possible.
Bidders often need time to plan their bidding strategies, especially on multiple and/or larger value items. A printed Auction Listing helps them to do that.
Couples often need time to consult with each other about what they are willing to spend on something. A printed Auction Listing helps them to do that.
Potential bidders need to know the specifics, the benefits, and the restrictions on any item they are going to bid on, especially on travel and/or other higher value items. A printed Auction Listing should answer all of their questions, in writing.
After bidders see that they have lost an item to another bidder, a printed Auction Listing makes it easier for them to re-strategize on what else they can bid on.
Printed Auction Listings generally come in 3 forms:
Printed in the Event Program or Auction Catalog.
Printed on loose sheets of paper and hand-inserted into the Event Program or Auction Catalog.
Printed on loose sheets of paper and hand-delivered to all attendees, or left on each dinner table in the room.
Auction Listings cost practically nothing to produce and they can make the difference between the success and failure of a Live and Silent Auction. You should never conduct a Fundraising Auction without one.
A Case Study
Let me share a real-life experience with you. Once I was hired to conduct a Fundraising Auction for a nationally renowned organization. The event was held in a major hotel, in one of the country’s largest cities, with several hundred “black tie” participants attending. It was an extremely professional event, with the music, singing, lighting, speeches, and awards all perfectly timed and choreographed. Everything was done to perfection… exception the Fundraising Auction.
Although I had signed an agreement to serve as their Auctioneer nearly one year in advance of the event, no one bothered to contact me for any advice or help. Approximately one week prior to the Auction date, I contacted the group to see if they had replaced me with another Auctioneer. But they said that I was still their man.
Upon arriving at the event I asked for a copy of the Auction Listing. I was told that there were none. I’m not sure whether they felt that the Auction Listing wasn’t necessary, or whether someone forgot to have them printed. This was never made clear. When I asked what I was to use at the podium, I was told to copy the list of Live Auction items from a committee member’s computer. It took me about 30 minutes to copy three pages of hand-written notes in order to prepare for my role as their Auctioneer.
I knew that they had created a PowerPoint program showing the various Live Auction items. When I asked whether the PowerPoint slide order corresponded to the order of sale I had copied from the committee member’s computer, I was met with a blank stare. The committee member left to check the slide order, and returned to let me know that the slide order did not correspond my notes, and he provided me with the correct slide order… hand-written on a paper napkin. This forced me to re-arrange my three pages of hand-written notes before taking the podium.
There was a Live Auction Table with descriptions of the Live Auction items that were to be sold, but the table was not clearly marked, and it received significantly less attention than the Silent Auction Tables, which were clearly identified. Since the Live Auction Table was located adjacent to the “Raffle Table”, it appeared that most people thought it was part of the raffle and therefore paid very little attention to it.
According to the event program (which did not include an Auction Listing), I knew approximately when I was to begin the Live Auction. At the designated time the Master of Ceremonies announced the start of the Live Auction to the several hundred people in attendance, and introduced me as Auctioneer. As I approached the podium I realized that photographs of award winners were still being taken… directly in front of the podium where I was to stand… which required me to stand aside for several minutes until the photographers were done. Can we say “awkward moment”?
As the photographers cleared, I approached the podium and began my Live Auction introduction. Approximately one minute into my introduction, the “Raffle Committee” approached the podium and stopped my Live Auction Introduction in order to pull the 8 or 9 Raffle Winners. These drawings lasted about 5 minutes. Upon it’s conclusion I was allowed to resume the start of the Live Auction.
When standing at the podium two intense and extremely bright spotlights were pointed directly at the podium. The lights were so bright that I literally could not see the center 1/3 of the room. I could see the tables on the right, and on the left, but was totally blinded when looking straight ahead. It took perhaps five minutes before the spotlights were turned off.
While at the podium and describing Lot #1, I had to ask someone to start the Lot #1 PowerPoint Slide… because apparently no one was assigned that job.
So with only the Auctioneer’s verbal description, and a PowerPoint slide, it appeared that few people in the room had any idea about what we were selling… or when we were selling it… until it was announced by the Auctioneer. As a result, bidding was extremely light and the final results fell several thousands of dollars short of where they should have been
The learning experience is this:
The Live Auction is where you place your better items, and where the real money should be made at any Fundraising Auction. Let bidders know as far in advance as possible what you will be selling, and the order of sale, so they can get excited about the Auction, and plan their bidding strategy accordingly.
Auction Listings are absolutely vital to the success of both Live & Silent Auctions. In my opinion, revenues at this Auction fell thousands of dollars short of where they should have been, because no Auction Listing was provided to the guests.
If bidders are not perfectly clear on what is being sold, including both the item’s specifics, benefits, and restrictions, they will not bid.
When you have a committee of volunteers, especially volunteers having full time jobs and/or very busy schedules, the services of a professional Fundraising Auctioneer can help to keep the committee on track.
And once you retain the services of a professional Fundraising Auctioneer… use the services that you are paying for.
Your Local Small Business Online Marketing Funnel
Marketing your business online is all about showing that you have something to offer your visitors that your competitors do not have. Marketing your small business online means reaching out to your current customers as well as prospective customers and setting yourself apart.
Successful small business Internet marketing is all about establishing relationships. Just as customers in your brick and mortar store have a chance to come in and get to know you, online customers need to be given the chance to learn more about what you do and to decide that they want to do business with you.
This is where the concept of your small biz online marketing funnel comes in. Your small biz online marketing funnel is a means by which you can – over time – find new customers and increase your small business sales.
Your small biz online marketing funnel is not unlike the local small business marketing that you undertook when you first opened your business in its physical location. First you needed to choose a location and to get that location ready. You ordered the supplies you needed. Then you started advertising. On opening day, it’s likely that you had a product giveaway – a keychain, a coffee mug or maybe even a t-shirt – as well as a coupon giveaway, something that would entice your customer to come back.
Your small biz online marketing funnel works in much the same way: you choose a domain name and build your website, or have your website built for you. You’ll get everything that you need in order – including a free or low-cost giveaway. And then you will begin marketing your small business online.
It is important to remember that your website is your virtual business. All of the Internet ads that you place will bring traffic to your page, so be sure to use the page wisely.
Use your homepage to tell prospective customers about your business – share your mission statement, share customer compliments. Use a page of your website to let your current and prospective customers know more about who you are and what you believe in. Focus both on your business and on establishing a relationship with your customer.
Drawing prospective customers in to your website brings them into the widest part of your small biz online marketing funnel; allowing them the opportunity to get to know you begins to draw them down into the funnel.
However, you do not want them to make it to the second level of the funnel and stay there, just as you do not want customers at your physical location to walk in and walk back out again. This is why you should plan – as part of your small business Internet marketing campaign – to draw them into the next smallest area of your small biz online marketing funnel.
You do not need to offer a physical giveaway. Instead, continue to build relationships with your site visitors by offering them something of value. Offer them free articles about products and services that your small business offers. Set up a newsletter that will allow you to communicate valuable information (as well as special offers) to them at specified intervals.
Doing so allows you to take an important step towards increasing sales: it allows you to establish a relationship. By consistently providing your subscribers with information or coupons that are valuable to them, they will begin to recognize you and your company as a company that they want to do business with, and they will look forward to hearing from you.
You will be able to encourage them to do business with you by promoting low-cost front-end products. Now, rather than a free article that gives your prospective customers a little bit of information, turn them into your new customers by offering low-cost products. Low-cost front-end products such as e-books that provide useful information about important topics within your industry – and further establish your credibility and the customers’ trust – will help to draw those customers down to the smallest level of your small biz online marketing funnel.
For instance, let’s say you own and operate a local floral shop. A perfect low-cost front-end information product that you could offer to your customers to draw them further into your sales funnel would be an e-book with planting tips for growing flowers in your local area. Customers who purchase your low-cost e-book will find value in the information, increasing the likelihood that they will purchase additional, higher priced products from you as well.
The last level of your small biz online marketing funnel is the place that you want your new customers to be: it’s the stage where your free and low-cost front-end items, along with your newsletters and other marketing, will increase sales of your high-cost, back-end products and services.
This is the goal of your small business Internet marketing: to find prospective customers, establish a relationship and increase sales. To recap, your small biz online marketing funnel works like this:
o Build and Market Your Website to Draw in Prospective Customers
o Engage the Prospective Customer
o Establish Trust with a Giveaway
o Establish a relationship using a newsletter and special offers
o Encourage small, low-cost front-end sales
o Make the big-ticket sales of your products and services
Through this process, and by continuing to market your site to new prospective customers, you will find that the small biz online marketing funnel is a technique that allows you to consistently and reliably get new customers and increase sales for your small business.