We hear that the recession is on the wane and that there may be growth this year, albeit with high unemployment plaguing us for a while.  Notwithstanding that you as the self-employed entrepreneur may not yet be feeling a recovery, it is happening.  Let me first be up front in saying that my views are my own.

My prediction of who among our local community small companies will emerge earliest and strongest out of this recession are those that are out there being visible and accessible.  Yes, that means advertising and marketing, which of course means dollars.  But more importantly and with much smaller investment of actual dollars spent are those companies and entrepreneurs out networking and making new friends.

There is a lot of pent up buying power built over the last year as people have avoided buying anything that could be delayed.  But after a year of holding off spending, many of my clients are now thinking about things they really need to purchase.  As they begin the pre-buying activities of asking questions, forming feature lists, and finding vendors, they are doing it out in the community.

That is, they are talking to people in their churches, their Rotary clubs, their networking groups, and their friends.  If your company is active in the community, you may have already noticed the increased number of conversations and requests for proposals.  Being active and visible gives the message that you are not only still in business (unlike many of your peers) but also surviving and attracting new prospects and clients.

If you are among that other pessimist group who is waiting for things to get better and then you will get out and market, you are missing the boat.  Your competitors are gaining visibility, credibility, and activity that can lead to new clients over the next few months.

Let me be bold in saying that if you are not out having at least eight conversations a week with new people and potential prospects, you may not be among those who recover quickly this year.  So if you are not in that first actively networking group, and you are asking the question of who will recover quickest, guess what, it isn’t you.

Want to argue my point? Give me a call or email me.

Now stop reading about who’s recovering the quickest and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

Very recently, several of my clients have begun sharing that their sales have turned up over the last couple months. Yeah, finally! Since I talk to business owners every day, and no one has expressed that sales are getting worse, this constitutes a trend, albeit an unscientific one. But, hey, any good news brings a sigh of relief at this point.

With sales up and seeing your business operate in the black, at least on paper, you might think your troubles would be over soon. Not to burst your bubble, but don’t forget about a brand new kind of cash flow squeeze. How could such a squeeze be new when you’ve already been dealing with cash deficit issues for well over a year?

During the recession, clients who pay an invoice began paying slower. Now with your sales going up, your expenses are probably going up too. So while your sales and billings might increase, the number of days to get paid has gotten longer. This is causing the new kind of cash squeeze. One where expenses go up because but the cash to pay for those sales doesn’t come in until 30 to 45 days later. Before the recession took hold your invoices might have been paid in 15 to 30 days. Now, you are carrying additional cost with slower pay and may already have drawn upon your credit line too much for comfort. This leaves you squeezed in a new and more uncomfortable ways even as your sales look more promising.

So, how do you compensate?

1) Your cost cutting days may not be over, even with light on the horizon and sales increasing.

2) Yes, delaying your own payments may still be necessary.

3) Invoice more often, for partial payments at start of contract and at delivery points.

4) Drawing on your credit line may be required even if you were lucky enough to have avoided it so far.

5) Get creative, or call me and we’ll get creative together.

And lastly, don’t forget to count your blessings. Slashing of prices just to stay competitive may soon be over. Wondering when it will end is a thing of the past. You survived the Great Recession of 2008-2009. And while you may never return to the glory days of 2004-2005-2006, you are now better prepared. Remember, good habits get formed in bad times, but we get to keep those good habits forever.

Now stop reading about recovering from the recession and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

We’ve all heard, “the check’s in the mail.” The majority of the time it is. But sometimes it’s a well intentioned fabrication. Well, really, it’s a lie. A sad but painful experience when you are a small business owner. Anger and frustration won’t help. Most of the time, the customer really wants and intends to do the right thing. Generally they will pay, if you help them. Thankfully, most customer lies can be readily detected, giving you a chance to avoid over confidence, recover, and not get blind-sighted.  Let’s face it.  Customers lie. Clients lie.  They are people. So here’s how you can stop complaining and start taking action.

Popular client lies and how to handle them.

When you hear these words, warning bells should ring. Kick your brain into overdrive and ask the questions needed to find what’s really true. More importantly, don’t count on what the customer says and make decisions (and hopes) based on it.

Your customer may be lying when he says:

“The check is in the mail” – Nearly all customers intend to pay, but when you hear this, it’s time to get details. Say, “Maybe our mail is slow here, what day did you mail it?”, “If I don’t see it by Thursday, I’ll follow up, okay?”

“Don’t worry about the money” – Every time I have heard this, the price and payment delay comes back later as a big issue. Don’t take these words at face value. Say, “Thanks, but even my clients with lots of money appreciate the choices we give them in our range of products and pricing. So let’s discuss those choices now so you have control.”

“I trust you” – The customer may be thinking, “you know what I want and you can give it to me.” If your product saves money or makes money, the customer is thinking, “you seem honorable, you’ll make me money no matter how bad the market is,” or “you saved Joe $10,000 so you can save me “$12,000 and I won’t have to put in any effort because I trust you.” With this kind of client, you must be totally clear up front. Even going as far as a Client Responsibilities Agreement the two of you can sign. These are the kind of people that don’t show up for meetings, don’t deliver their parts and paperwork on time, and don’t do what you tell them to do to reap the savings. Yet they want the results with no effort. When you hear those words, stop them in their tracks. Say, “This is a partnership and you won’t get the results if you don’t do a), b), and c) in a timely and committed manner.”

“I’ll think about it” – So you hear a real positive here. But the customer is most likely thinking of the 15 things that they need to get done today and really want to get you off the phone or out the door. Ask them, “Are you just trying to politely get me out the door or is there some specific aspect that needs to be analyzed before we go ahead?” Sound too direct? It can be softened with a smile or a brief story, such as “Most of my clients are busy like you and we don’t have time to waste. Tell me what questions you need to think about so you don’t waste time later.”

“Let me talk to my wife/partner/father/brother-in-law” – Have you ever bought something you wish you hadn’t? What did you learn? A common protection that people give themselves is time to have second thoughts. They enlist someone else to help talk through, and sometimes, out of buying. Even though the prospect sounds like they are ready to sign on the dotted line and write a check, it’s probably not going to happen. The other person has not heard the details of either the value or the problem solution your product offers. Your only recourse is to try to get that other decision maker into the value conversation. Say, “There will probably be questions your wife will ask that you may not be able to answer. How about the three of us get together on Tuesday at 3:00 so you won’t be put in a position of not knowing the answer?” In some cases, it may be better to say up front, “Usually these kinds of decisions are made with spouses, it’s better not to meet until you both can be there.” At least if the person responds that they have total decision authority and the spouse is not needed, they will try to follow through lest they appear to have lied.

“I’ll let you know” – If they say this, without a date or a time or a commitment to write the check, chances are it’s a stall tactic. You need to come back with a date and time to follow up with them. Another question to ask is, “you’re a busy person and chances are there are other decisions you also need to make this week. What factors can we clear up right now so you can get this decision off your plate?”

So, human nature is that people want to hold onto their money, now more than ever. Don’t get mad, get skills!

Some more articles on this subject if you feel you’ve been unusually hit by customer lies recently:

How to Tell if Your Customer is Lying

Your Customer is Lying, Did You Catch it?

The Top 10 Lies Customers Tell Sales Reps

Give me some feedback. What customer lies do you hear that give you warning bells?

Now stop reading about customer lies and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com. 

“Seek new clients, seize better income, capture more profit”

It’s a recession. We’re cutting our advertising budget even though we know we shouldn’t. We’re racking our brains to see what else we can do to drive sales without spending too much. Well here’s a free sales and advertising tip. Follow up!

The National Sales Executive Association conducted a survey on how many sales you can get depending on how many times you contact your prospects. These statistics emphasize how important it is to follow up with sales persistence.

• 48% of sales people never follow up with a prospect
• 25% of sales people make a second contact and stop
• 12% of sales people only make three contacts and stop
• Only 10% of sales people make more than three contacts

But,

• 2% of sales are made on the first contact
• 3% of sales are made on the second contact
• 5% of sales are made on the third contact
• 10% of sales are made on the fourth contact
• 80% of sales are made on the fifth to twelfth contact

These statistics astound me and I spend a lot of calls and emails following up.  I confess that sometimes even I fail to follow up more than three times. So why do we not follow up enough?

• Too busy, didn’t get to call
• The person’s name did not make it to a “touch today” list
• The time allocated to make follow up calls got allocated elsewhere
• Don’t have a single “touch today” list, it’s in several places
• Don’t have a series of things to propose that seems appropriate
• Don’t know what to say, when you’re just “checking back”
• No follow up samples appropriate to this situation
• Want to build the relationship, but not sure how
• Haven’t tracked how many times already called, it’s too soon
• Haven’t set a follow up action, don’t know what to propose next

Your own personal list of follow up failure is probably some of these and more. With 90% of the sales made after the third contact, it’s clear that this is the result of a relationship being built. Relationships take time and repeated contacts.

But consider this. Calling is free! You already have a phone, a long distance plan, and extra cell phone minutes. So there is nothing else to pay. Email is free since you already have an email mechanism. A card is less than a dollar even with today’s postage. For a great set of follow up samples and follow up letters see: Free Sales Follow Up Letters.  So this kind of prospecting and following up is a real low-cost sales idea. That’s a great plus in this economy.

Persistence will make the difference in sales. Follow up calls are necessary and effective. If you’ve been at it more than a couple of years, you’d agree that it takes pigheaded discipline and determination to grow a business. This is a sentiment attributed to Chet Holmes, author of “The Ultimate Sales Machine” and perhaps anyone else committed to success.

So, I challenge you to make a list of people you haven’t followed up with and make some calls. Call me and tell me how it’s going. I’d love comments on more follow up samples from your experience.

Now stop reading about follow up samples and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

The communication game is changing faster than we can keep up with it. It used to be that we could send an email and expect a response in a day or two. We could send a voicemail and assume that if we got no response in three days they weren’t interested. We even trust that the good old USPS paper mail delivery would deliver in 2 days local and 5 days cross country.

Now we don’t know if the message was even delivered. Even with good spam filters, seemingly reliable voicemail, and USPS it seems more stuff is delayed or lost. There is a local municipality four miles away that my clients routinely tell me they received a letter or invitation from me three weeks late. Several people in the same area report the same thing, so I know it’s not just ignoring the mail. Emails get lost in the sea of daily incoming backlog. And even voicemails occasionally take hours to get through.

Our communication systems have generally been so reliable that we take for granted they’re working. But sometimes they don’t and that’s why you need to follow up if you want to make the sale, provide good service, or just stay in touch.  But how do you draw the line between persistence (looking virtuous) and pest (looking desperate or unprofessional)?

Here’s 5 ways to be persistent without being a pest:

1. Don’t assume that someone is not interested just because they don’t call you back. I have had many instances where I reached someone on the fourth try, after leaving three voicemails only to have them thank me because they didn’t get back to me yet. More than likely those people went on to do business with me.
2. Follow up important emails, incoming or outgoing, with a voicemail. These days people have three or four email accounts beyond their primary one. Sometimes they don’t check those secondary accounts for days. So you may have sent it to a slow response email box (which may have been the primary when you wrote it down originally).
3. Sadly, the same goes for a fax (yes, people do still send those).  Just because you got a confirmation that the fax went through, they may not have gotten it.  Fax machines are in distant rooms shared by others.  The faxes get picked up inadvertently by someone else.  Sometimes it’s sitting in memory waiting for paper.  So call and leave a voicemail saying that you sent it.
4. Leave more than one voicemail. We think voicemail is reliable but it seems to be getting less so as time goes on. When someone asks a question and you want to answer, but you only get their voicemail, leave a message. Try every couple of days and leave another voicemail. Make sure the total time span is more than a week because the person may be traveling. If I really want to talk to the person and let them know I’ve been following up, I’ll call at different times of the day.
5. Tell them that you value being reliable and that’s why you are following up multiple times. Say something like, “I pride myself in being responsible so I am trying again. If you have already gotten your answer and don’t want me to follow up, drop me a voicemail or email.” It may seem obvious to you that you have a high level of commitment just because you did follow up, but stating your commitment is much more powerful.
6. Keep it light and use it as a way to build a better relationship. Say something friendly like, “Hi, I was just trying to get back to you and get your questions answered so I thought I’d try again.”
7. I try to leave no more than four voicemails before switching to one or two emails and vice versa. Sometimes switching communications gets the response.
8. The book “The 22 immutable Laws of Marketing” claims that the true battle for territory is the battle to position yourself (the brand called “you”) skillfully in the front end of the client’s mind. I try to make part of my brand “persistently reliable” because most of my clients and friends are as busy as I am.

Lastly, 80% of sales are made after the fourth contact, so don’t be part of the 73% that stop after two contacts. See my other post Follow up is Free and Profitable on that topic.

Tell me what you do to follow up persistently without being a pest? 

Now stop reading about persistence without being a pest and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®.  She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

If you are searching for techniques that you can replicate to get sales from LinkedIn, here are some success examples. These specific tips come from small business owners already experiencing profitable results using LinkedIn. I’m not talking about getting a job, although I did find numerous examples there too. These examples and the hints & tips they include are all people who’ve stated that they successfully got projects and sales from LinkedIn activities.

“I’ve made millions of dollars through LinkedIn” states Jeff Ragovin, Buddy Media. He says it’s important to find the right person at a company. For Jeff, doing just that has netted his company “over two to three million dollars”. He’s done this by reaching out to the right person with a valuable proposal. Jeff says they’re more inclined to reply when approached via LinkedIn, because “they already have the opportunity to look you up … and maybe even see in your network where you have 14 recommendations. So there’s trust.”

Xurxo Vidal indicates in his comment on the above post, “I’ve found that participating in LinkedIn Answers by answering questions in my field of expertise has allowed me to help others while showcasing my knowledge of search marketing in front of a wider audience. This one activity alone has provided me with tremendous results by allowing me to connect with interesting people and by directly bringing in new contracts.”

Steven Shimek (Ruder Finn), used LinkedIn to build client relationships by following up over 20 leads that led to business worth over a quarter of a million dollars! He says, “People like to help people by human nature and they want to see their friends and associates get up to the next level”. He uses LinkedIn as a litmus test to qualify leads for his business development practice and explains his philosophy in a video. “LinkedIn isn’t just about networking. It’s about your friends, clients, and associates being a resource to you. I like helping people because they’ve all helped me!” He is also a strong believer in Answers. He recommends answering questions in ways that share and showcase your company’s skills.

Ron Lissak talks about LinkedIn as a research tool and its ability to unearth hidden connections through the power of common contacts. He claims over $300K in sales from his LinkedIn efforts.

Although many of the stories about sales from LinkedIn came from blogs and members of LinkedIn, there are lots of other examples found elsewhere.

Tim Hayden, President of Game Plan Marketing & Events In the past two months, used three strategies to identify more than 20 new business leads -and converted two into clients!

1. Focus on connecting. Anytime you receive a business card, search for that person on LinkedIn. Because you have their email, you can send them an invitation to connect. Do it right away so they’ll remember you.
2. Increase your visibility. Don’t simply add people to your network. Ask or answer questions on LinkedIn. Make sure your public profile is complete. But most of all, recommend people in your network and ask them to recommend YOU!
3. Make LinkedIn your homepage. Whenever I open my browser, I can immediately review my “LinkedIn Home Page” which shows what others in my network are doing and who they’re connecting with.

If you consider that LinkedIn can increase traffic to your Website, then Geraldine Roy says, “yes, it can increase your sales. “For small businesses, Google Ad key words and SEO can be a bit of a long shot. Social media is an interesting approach for businesses that have limited resources. We track the origin of visitors to our website and found out that 15-20% come from LinkedIn. Again, that’s a small business perspective but I’d say for B2B where most of the business comes from referrals, LinkedIn definitely has a play.

Attorneys are getting LinkedIn to clients online. Thomas N. Shorter, a shareholder in the Madison office of Godfrey & Kahn S.C., says he has LinkedIn set as his homepage. Every time one of his 200 or so connections adds a connection, he is notified of that. If the new connection is someone that Shorter would like to know professionally, he telephones his connection and asks him or her to make an introduction. This has happened a number of times since joining LinkedIn in February, and he’s garnered a number of new cases and clients via this method.

BizBox contributors Peter Montoya and Tim Vandehey state “if you are in the right industry and you are a savvy user and network, then absolutely yes [LinkedIn can help you build your business and cultivate your personal brand.]

Josh Morgan of “Don’t Eat The Shrimp” told the story of his success in Using LinkedIn as a Small Business Owner.  Basically, someone posted to LinkedIn asking for suggestions for a Bay Area PR agency with a special background in education; Morgan humbly put forth his own business; and–whaddya know!–soon enough he had himself a new client. Josh Morgan, recommends that you check out the “Answers,” section of LinkedIn. This is a forum for people to ask questions.

A LinkedIn member, Zale Tabakman claims success: “With sites like LinkedIn and Facebook, I get more business than I ever did with traditional print advertising.” His Blog and video, Seven Ways To Generate Revenue On LinkedIn, will help take you to the next step. He advises to use LinkedIn to create useful 1-to-1 relationships with people. Don’t focus on the 30 million or even your own large network of thousands. Think about getting to the right contact in a meaningful way.

One example Zale provides is to find 15 people to fill a seminar. Using Profiles he identifies 60 people who fit the profile of his target audience and reasons why they would want to attend. Then he uses his network to get introduced to them so he can invite them personally.
Wow! Several articles mentioned an A-hah! moment where they clicked about how to use LinkedIn to grow their businesses.

So to summarize, here’s the top 5 things recommended by those already getting sales from LinkedIn:

1. Add people you’ve just met and invite them via email to LinkedIn immediately after you’ve gotten their business card.
2. Make recommendations to people you like working with now or in the past.
3. Find people who fit your profile for sales you want to make and ask for introductions from people in your network.
4. Research the profiles of people and companies you think you’d like to do business with so you can identify why they need what you offer.
5. Answer questions in your field of expertise so people will come to view you as an expert.

Share your success at sales from LinkedIn by adding a comment. Hey, share your frustration too, if results are too slow in coming!

Now stop reading about sales from LinkedIn and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

Caution: I’m skeptically optimistic about online linked networking using LinkedIn for real business profit results. (As I think maybe at least a million other people are at this point.)

I originally joined LinkedIn as a favor to my friends and associates so they could increase their online linked networking. Lately I’ve been giving worthy endorsements, so they’ll be viewed favorably as they find more projects and jobs. I know a bunch of people and with very little effort I garnered 56 connections and 172,000 people within three degrees of separation. So what?

But will it work as a source of projects, clients, and profits? Is it worth my time to get involved? Will LinkedIn be a profitable use of my time?  How will it benefit me?

Sorry I don’t know the answer just yet. But here’s my thinking process so far.

1. Connecting friends and associates online gives them something of value. They know I care, they get one more positive thing in their life, and they get to feel better. Giving them the endorsement they deserve helps build them as an authority in their field. So hopefully they’ll reciprocate if they think I am deserving. This is part of the “give and you shall receive” mentality, which has been very profitable for me so far in life.
2. It’s mainstream. As of October 2008, LinkedIn had more than 30 million registered users, according to LinkedIn at About LinkedIn. That sounds like something worth checking out.  So you wouldn’t be part of some lunatic fringe that probably won’t go anywhere. Although a recent study showed 40 million people in America have tattoos and I don’t really want to join them!
3. It’s not a time waster.  It’s free at its basic level. So far I haven’t found any better way to spend my late nights and early mornings when I’m not writing my blog, writing my book, spending time with my family, or in general having a life. It’s a better use of time than watching television. When I think of something more profitable to do with those hours than investigating LinkedIn, I’ll do that. So no chance of becoming a social networking junkie nor much time or money wasted while you check it out.
4. It’s Professional. So far Facebook, Twitter, and YouTube occur to me like people with too much time and too few written business goals (sorry to offend). I reserve the right to change my mind on them. LinkedIn focuses on people and where they work and where they have worked, so it’s people with professional interests and professional connections. That seems like something worth networking into. More like a Chamber of Commerce mixer which I have used profitably in the past to get clients.
5. Networking and particularly giving endorsements and referrals for me has been profitable in general. In my Professional Referral Exchange referral group, we are strongly encouraged to give referrals so that we will get referrals. Over my 4 years of being in that group I have gotten over 15 clients and try to give 40-50 referrals each year. So I know the concept of giving endorsements and referrals works as a strategy for getting referrals and clients absolutely yields results. LinkedIn doesn’t seem too far removed from a real world referral group.
6. It is increasingly used by recruiters to post jobs and to search for passive candidates, people not actively looking for a job. It allows me to look at job postings and find who I know who knows someone there. While I am not looking for a job, many of my friends are and it’s one more way I can help them.
7. According to Guy Kawasaki in Ten Ways to Use LinkedIn,” Most people use LinkedIn to “get to someone” in order to make a sale, form a partnership, or get a job.” Well, that sounds exactly like what I want.  So HOW do they do that? You can use linked networking into a target company, or find people with the job titles you’re looking for. Same with job seekers.
8. Is LinkedIn where your target audience is? Well my prospects are professionals and small business owners so that seems like a no brainer.  An example of reaching that target audience and food for thought using LinkedIn can be found in The Power of LinkedIn and The Speed of Trust by Paul Allen, Internet entrepreneur.
9. It helps build your credibility. People who’ve just met you don’t know if you are successful or good at what you do. If they check out your profile, they’ll find endorsements, where you’ve worked, groups you care about, and people you know. Intuitively, they’ll feel more connected to you and who you say you are. 
10. It helps build your reputation. When they see job history, areas of expertise, and participation in groups you’ll be solidifying your brand via linked networking.
11. You’ll be viewed as insignificant if you’re not there. According to Deb Dib, a coach who helps CEO and C-level executives find their next opportunities, in LinkedIn – What It Is and Why You Need to Be On It, “If you’re an executive and you don’t have a presence on Google, recruiters and employers are likely to dismiss you as a lightweight. Increasingly, if you’re not on LinkedIn, the same thing happens.” 
12. It may be like a business card, an advertisement, or a brochure. We all use them, they’re necessary to prove we’re professional, but don’t expect them to make the phone ring. No one ever said, “Hey I have your brochure and want to buy from you.” In fact, when they finally do call you to do business, they seldom mention the last place they saw your name or the catalyst that had them pick up the phone or send an email.  
13. Increases name recognition, website ranking, and link backs. Louise Fletcher in The 7 Mistakes You’re Probably Making on LinkedIn points out that LinkedIn is ranked very highly in Google. So if your name is part of your LinkedIn profile, you’ll be found on the web ranked more highly there than almost anything you can do on your own.
14. You can use LinkedIn to gain introductions. These are awkward because each introducer has to individually forward the introduction. However as you reach out to a new contact, every person who is between you and that contact gets reminded of your brand and message, and sees how you are approaching potential contacts. It’s more name recognition with a slight multiplier while meeting a new potential prospect. 
15. Recommendations help you build credibility, but you need to get recommendations consciously and strategically. Make sure they describe what you want to be most known for being good at. That is, recommendations about your brand and coming from people who aren’t employees or obvious family.

Bottom line, LinkedIn seems to supply name recognition, branding, ability to research people and companies you want to target, and online resume and references. If you know how to make profit from these things work in the real world, you should be able to extrapolate additional profits from the online world using LinkedIn.

So tell me is online linked networking using LinkedIn working for you?

Now stop reading about linked networking using LinkedIn and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

So you thought you’d be generous to your clients. Or maybe you were just too busy last year to do the work necessary to raise your service prices. Now with costs going up and sales going down, you just want to kick yourself for missing the opportunity. Don’t despair. It is possible to raise your service prices even in this economy.

Here are a few ways to raise your service prices in a recession.

Raise your ‘grandfathered’ prices. We each have clients who’ve been charged the lowest possible billing rate because they’ve been long time clients. Their billing rates can sometimes be half the rate of our new clients. We love these clients and want to keep them. You can raise these service prices with still a sizeable discount to your new service pricing. Just tell them that their prices have been so much lower than your new clients that a small increase now is still significantly less than what you charge new clients.

Raise, but give a returning client discount. One way to make a services price increase more palatable is to raise the prices for the NEW customers only. You then tell your existing clients that you are raising prices, but that their cost will remain the same for 6 months or a year. That way, they’ll feel like they got something extra, but will have been forewarned of an upcoming increase.

Don’t rescind those gas charges just yet. It may seem silly to keep your recently imposed gas surcharge when gas prices have fallen 60%, but think it through. You probably should drop the charge for now, but be ready to put it back in place when gas goes back over $3.00 a gallon, which may be sooner than you think. By the way, if you missed the boat during the last gas price run-up, get ready because you’ll have another chance. Gas will go back up sooner than you think. You can gain brownie points by telling clients you’ve temporarily suspended your gas surcharge, which makes you a hero now, but forewarns them the charges will be back sometime in the future. That’s the hardest part of installing a gas surcharge – how to tell your clients. By the way, according to Angie’s List, 91% of service companies raised their service prices or thought about raising prices in 2007 as gas prices spiked. So don’t get behind the ball next time.

Travel time billing. In a similar vein, if your billing rates do not include travel time, now is a good time to institute it. You may decide to institute this charge when clients are greater than 1/2 hour away or more than 20 miles, for example. With online maps and GPS’s so popular, it’s easy to tell how far clients are before you arrive, so you can tell them upfront. With costs going up, you can add 1/2 price for travel time, or only bill for travel time one way.

You haven’t raised prices for several years. If it has been three years or more, use that as your rationale. You can be self-deprecating as you do it. Say, “I missed my opportunity to raise my service prices for the last 3 years, but with costs going so high, I really need to put in a minimal increase.”

Add a little extra. Your service price is supported by the value your customers perceive. If you add a new feature that people have been asking for, a price increase will go down easier. For example, adding a monthly activity report, a free screening test, extended hours or a technology backup will add value to your service. Be sure to pick items that cost you very little to give.

Keep your prices the same. You may ask, “How is this a price increase?” With the discounting pressures going on in this recession, when it seems everyone is lowering their service prices, holding steady can be a big advantage.

Schedule the raising – so clients have a time limit at the old price. As the recession dictates, you may have difficulty raising your service prices right this moment. But you can say something like, “Even though my costs are increasing, I’ll be able to hold off raising prices until June, so my clients benefit.” You’ve now done 3 things: 1) communicating to your clients you’ll be raising prices in a soft manner, 2) given your existing clients a reprieve which they will appreciate, and 3) given yourself a timeframe commitment for that increase you want.

Bundle.  Don’t give up. If sales are just too far down to justify increasing prices and you are sitting with a lot of extra time on your hands, don’t despair. Can you bundle two or three services people need and give them a service price discount on the whole? You would end up with a larger total sale than you would have gotten otherwise.

These are just a few of the ideas I’ve recently seen for raising service prices in this recession. If you want to discuss further, drop in a comment or call me. Of course cutting costs is another way to raise profits, but there are several recent blog posts I’ve written on that subject. If you haven’t read them, check out: A Cunning Cost Cutting System for the Busy Business Owner  or Cutting Costs Now: 9 Hot Areas for Creative Small Business Owners.

See also The Lowdown on Raising Prices.

Now stop reading about raising service prices and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

Now is the BEST time to be in business for ourselves! Many people are getting laid off and those that aren’t are concerned they might be. There IS more security in being a small business owner because we have many clients, not just one employer. Here are some ideas for increasing your services sales during this recession.

You’ll be increasing services sales during this recession if you:

1. Improve your product. Add an extra feature; something people have been asking for. Make sure your clients know you have it by mentioning it, sending out postcards, or putting up a sign. You’ll need to mention it to everyone you see especially if someone seems like they need your product. Selling the product increases the services sales that go with it.
2. Improve the services. Make a checklist of complete delivery, all listed deliverables. Make sure every client gets the complete list of services. Contact clients after they purchase and offer them more service. Give them something more than you’ve ever offered before, and give it happily. Add a training component to your services, so your customers receive more bang for their buck.
3. Add an ‘extra’ feature. Give the customer “something extra”. Throw in a free add on.
4. Give a discount. But let them know you’re doing it. Everyone wants a discount. Try a 10% discount for signing up this month.
5. Think what others need. Help others survive the economic recession, and make money at the same time. Figure out what your clients need and give it to them. People still spend money during a recession, they are just more careful about it. Win the contract by meeting the other person’s needs and following up on each and every contact.
6. Think residuals. Develop and maximize residual income streams and passive income possibilities. Add a maintenance contract, a 6-month checkup or a yearly service that people need. That way you’ll be able to keep in touch and propose other services they might need.
7. Advertise. Promote bargains or discounts without undermining the value of what you represent.
8. Maintain professional and personal relationships. Have coffee with people who can be a center of influence or be an ongoing source of referrals. Send a thank you note or email after the meeting to leave them with a good impression. Find out what they think people need or what their clients need in your market. Make suggestions and offer to help.
9. Be Creative. Analyze your business, products, and services. Consider how they can be tweaked to receive more demand in an economic recession. You can make money if you find a way to offer more value to your products or services.
10. The law of reciprocity. People want to help others who have helped them. If there is someone you want to do business with, buy something from them first.
11. Don’t fall prey to large free trials. Seldom do clients who were given free service become a paying client. Give them only a taste, a short analysis or a free consultation, but not the answers themselves.
12. Ask for referrals. People who are happy with your service may know others like themselves. Ask for referrals on a regular basis. Have a referral card, a page after your invoice, or a question you ask at the end of each meeting. Let people know that you get a lot of referrals and it will become true.

Times are tough, but by thinking creatively you can generate more services sales in this recession and become even stronger after the recession is over.  Tell me how it’s going using the comments below.

Now stop reading about increasing services sales and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

Thank your CPA next time you even suspect she worked longer than your invoice showed. But ask yourself: Can your business afford to miss billing for ALL your project consulting time at this point in its development? How much are you missing each month by not billing for all your entitled time? Today, we’ll talk about taking action.

After reading my April newsletter, a CPA friend of mine made the remark that “Every CPA should hire you; they are the worst at billing for all their consulting time”. My point is not to disparage a well deserved, respected industry, but to state – there’s KNOWING what you should do and there’s DOING what you should do. Morpheus says it best in my favorite movie, The Matrix, “There’s a difference between knowing the path and walking the path.”

If you don’t have all your processes in place to achieve maximum billings each week, don’t berate yourself. Unless you were trained in savvy business methods, attained a business degree, and practice business process reengineering daily; how could you expect perfection?

Time is the Enemy

Change takes time. Changing your method of accounting for hours in your business will take time to redesign. You may need to design new daily/weekly tracking forms. You may need to rethink which day of the week works best for consistently setting aside time for invoicing. You’ll need to mentally walk through the new procedure to ensure it introduces no other gaps. Putting your self in your customer’s place is also necessary to ensure easy acceptance. The best processes have a cross-check so that when something does get missed, it’s identified by some other telltale signal. Finally, putting any new system into place takes reinforcement, repetition, and resolve until it finally becomes ingrained.

It’s too easy to put changes into the background of good intentions. After all, you already had a full-time job before undertaking this change. But if you’re serious about becoming a true success at your business, this is the point to make headway. Find a way to change your business while you run your business. Dogged determination works for a while. Most entrepreneurs believe that getting help will yield faster, more reliable, and happier results. Think about using a business coach, a business consultant, or an accountability partner to help you move forward.

Finding an accountability partner

An accountability partner is someone who helps you focus on the short list of things you want to hold yourself accountable to accomplish. By meeting regularly and focusing on a short list of small measurable action items, those items are highly likely to be completed. Replacing completed items with the next steps in the series helps propel you to consistent progress. Natural prioritization results because you focus on actions you “promise” your accountability partner.

How do you find one? You can hire one. Many business coaches serve that purpose well, business consultants too. You can also find another business owner and support each other. Make sure they understand billing and consulting time and agree you should get paid what you’re worth. But don’t do this with a good friend because it’s too easy to tell stories why something didn’t happen. You’re more likely to follow through with someone who’s not a close friend.
 
That’s one more tool in your arsenal against talking about it versus getting it done. Find an accountability partner to help keep you on track along with a well designed series of stepwise improvements and you could not only be walking the walk but positively running!

For a free no-obligation chat on charging for billing and consulting time and getting paid for every hour you work, call Merra Lee Moffitt, profitability coach and CFP®. She spends all day, everyday guiding business owners reaching their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.