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May 24, 2010

Have Fun and Watch Your Profits Increase!

Filed under: General — Tags: , , , — afp @ 8:18 am

increasing-profits

Success is having some fun every day.

Failure is being serious all the time.

Having fun every day is the best way to live life.  Fun is defined differently for each of us, so it’s important you know what would bring you happiness today- and then make it happen. 

We all need something to look forward to.  Remember when you were a kid and you were going to summer camp the next day?  You could hardly sleep the night before, in anticipation of the fun week ahead.  Even though you only got a few hours of sleep, when your parents woke you up, you sprang out of bed, eyes wide open, full of energy, and ready to seize the day!  Compare that to how you woke up for an ordinary day of school.  If you were like most kids, your parents had to drag you out of bed.

What is the main reason for the different energy levels?  It’s the fun you associated with the coming day.  We are no different as adults.  We need something to look forward to. 

I’ve found that most people don’t create fun in their day.  Instead, they are waiting for something or someone fun to appear.  How could you bring some fun into your life today?  Tomorrow?  This week?

If you’ve having trouble thinking of something, then you’ve probably been taking yourself a little too seriously.  Think about what fun means to you and make sure you build in some things to look forward to every day.

Success is having some fun everyday. 

(Above taken from 101 Distinctions between Success and Failure by Keith Cameron Smith and Doug Hanson)

Having fun in your business does not mean acting unprofessional and not servicing your customers.  Having fun in your business means challenging your employees to bring energy, passion and a positive attitude  with them each day.  It means having an environment where your employees are truly connected to their work, to their colleagues and to their customers.  This brings me back to the FiSH! Philosophy book I read years ago where their four steps include Play, Make Their Day, Be There and Choose Your Attitude.  Thousands of organizations worldwide have adopted the FiSH! Philosophy and learned how to incorporate the four FiSH! principles into their organization’s every day life.  Find ways to keep the passion in your organization and that will flow through to your customers and your bottom line.  Find ways to Have FUN every day.

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May 17, 2010

Growing Your Business Through Referrals

Filed under: Sales Tips — Tags: , , , , — afp @ 2:57 pm

referral_program

Every professional sales person knows that one of the greatest ways to grow a business is through referrals.  Getting referrals isn’t something that only the sales department should be responsible for though.  Many levels of employees usually deal with a customer and sometimes it is the front line employees who have the most contact and strongest relationship with the customer.  A lot of people teach you that if you take good care of your customers they will automatically give you referrals, but that is not necessarily true.  I’ll bet some of your very best customers haven’t given you one referral.  Why?  Because they are busy and have a thousand other things on their mind, just like you do.  The key to getting a consistent stream of referrals is to build the referral process into the transaction.  Asking for referrals as a sales person can be uncomfortable and can make non-sales people prefer to get a root canal at the dentist.  But, it doesn’t have to be that way.  People often make referrals difficult and uncomfortable because they ask for them at the wrong time. Wait to ask for a referral when the client is happiest, shortly after they’ve received the product or service. It is also important to remember that the sales person shouldn’t always be the person who has to ask for the referral; the sales person is not always the individual who has built a rapport with the client. The person delivering the product or service is usually the person who has built a relationship with the client. By developing a cross-functional team of sales, service, and product delivery people, you can develop a referral process that is a win-win for everyone.

Here are a series of tips that you can share with your team to help get referrals and build your network.

  • Listen and remind the customer of benefits that are important to them- be aware when clients tell you benefits during a phone call or general service call so that you can bring those benefits up during a request for a referral.
  • Describe your ideal customer- Describe some other solutions that you have provided for other companies or organizations.  It will help them start to think of other people they could refer to you.
  • Give a benefit for giving a referral- Create some form of thank you or recognition for giving referrals and make sure your clients know about it. Examples could be movie tickets, flowers, thank you notes and, of course, cash, go a long way towards motivating folks. Don’t worry so much about what, just realize that appreciation goes a long way with people.
  • Suggest They Already Know Someone- If you know of a specific person or client that you would like to be referred to, provide your client with the opportunity to mention them. Just try to avoid putting the person on the spot. Instead, bring it up and give them time to consider the referral.
  • Ask for an Introduction- Asking for an introduction is a great way to break the ice with the client and also gives you a real example of someone who has benefited for your product or service.

Just constantly remind yourselves and your employees of the benefits of asking for the referral and then just ask for it.  

Now once you have the referral, you have to know how to turn them into a client.  Make sure that even though you were referred to them by another customer or friend that you just don’t assume that they know about your business and how you can help them.  People want to buy from businesses and individuals they know, like and trust.  The referral may have some trust for you since they know the person who referred them, however, they need to fully understand what benefit you can offer them.  The greatest way to turn a referral into a client is through education.  Take time to understand their business and their needs and educate them on how they can benefit from your product or service.  Trying to close a prospect, even a referred prospect, before they really understand the value you can provide them is like asking someone to marry you without going on a date. 

Create a referral system in your business for who and how you ask for referrals and then once you have a referral in your hands, educate them on how your product or service can benefit their company.  And once they have become a happy client, ask for a referral!

Visit our website at www.financewithafp.com or call us at 877-237-7287 to learn about our Friends & Family program.  We’ll give a $100 cash referral gift to anyone who refers a customer to us that results in a closed deal!

May 10, 2010

Tell me a little about your company…

Filed under: Sales Tips — Tags: , — afp @ 9:00 am

salesman-431

How do you answer a potential customer when they say, “Tell me a little about your company.”  If you are like most salespeople, you view this as an invitation to rattle off your 35 minute PowerPoint on your history, management, value propositions, and top it off by giving them several reasons why they should work with your company.   When your customer asks you this question, they are not really interest in hearing what you have to say.  They aren’t lying to you or having bad intentions, the problem is they never learned how to buy and they just don’t know what else to ask you.  When they are asking this question, they aren’t at all interested in your story, they want to hear their story.  How your company is going to help their company.  This mid-understanding can send many a sales person down the path of literally talking their way out of the sale. 

So the question is how do you answer their questions by bringing them back to their own company?  You shouldn’t embarrass a customer by ignoring their questions or refusing to answer the question, but you should find a way to quickly turn the conversation back to them.  Once they start talking about themselves and their company, you have the opening to show them how you can help their business.  This is similar to product selling where you give the customer a sample versus telling them of the product’s features.   Examples include having them lay on the mattress if you are selling mattresses or giving them a chip if you are selling salsa.  Actively listen when they are telling you about their company and their issues, include examples of how you have helped other customers in their same situation.  Show them why they should do business with your company, don’t tell them.  Actively show the customer how your business and/or product can fit into their company. 

Let your competitors sell by telling their story.  It won’t work very well because the only story the customer is interested in is their own.  Find a way to work your company into their story.  Don’t talk your way out of the sale.

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May 6, 2010

The Differences between a Loan and a Lease

Filed under: Leasing tips — Tags: , , , , — afp @ 10:12 am

signing docs

I talk with a lot of customers who do not understand the differences between a lease and a loan.  There are several differences and it is important to understand them before you can decide which type of finance contract is the best fit for your needs.  The Office of the Controller of Currency and the Federal Reserve separates a lease from a loan for the following reasons:

  1. A lease requires a non-cancelable term. A loan is cancelable.
  2. The accounting for capital leases ($1 purchase option) is different under GAAP requirements.
  3. A loan usually requires down payments, financial restrictions, or additional collateral such as real estate or a blanket lien on business and/or personal assets.  Leases do not contain any of these requirements.
  4. On a lease, the lessor is required as the owner of the equipment to bill for monthly sales tax and annual property tax.  That is not done on a loan.
  5. Documentation for lease transactions requires documents not used in lending such as purchase orders, vendor invoices, sales tax remittance forms, acceptance forms, prefunding forms and others.
  6. Lease insurance requires the lessee to purchase and provide “Liability” coverage in addition to the “Loss Payable” Clause.
  7. Lease documentation (master lease agreement) has requirements for equipment maintenance and return conditions not found in lending.
  8. Lease documentation contains strong language and many defaults not found in loan documentation such as: 1) equipment location- if location changes then sales tax changes or 2) maintenance- default if equipment does not follow manufactures required maintenance schedule.
  9. Late charges on leases are usually 5-15% of the payment or have a minimum not found in loans.
  10. Lessee’s use $1 leases to control costs if they are not using GAAP accounting.

Other differences between a lease and a loan:

  1.  A lease will not report the equipment cost on the lease agreement like a loan will.  Only the monthly payments, term and end of lease option will report on a lease agreement.
  2.  A lease agreement does not show the interest rate like you will find on loan documents. 
  3. If you decide to pay a loan off early, the payoff is usually the principal balance of the loan.  If you decide to pay a lease off early, the payoff will be the remaining stream of payments. 
  4. The interest rate on a lease will typically be higher than a bank loan as there is more risk on a lease since only the equipment is taken as collateral and less money is applied upfront.
  5. There are significantly better tax write-offs available on a lease.  For details, see our blog called 2010 Tax Issues: Section 179 and Bonus Depreciation from February 8, 2010.

Other differences between working specifically with a leasing company and working with a bank include:

  1. Leases will allow more flexibility in what can be financed.  A customer can typically finance equipment and soft costs on a lease that will not be financed by a bank on a loan.  Examples includes software, specialized equipment, installation and freight.
  2. Customers can get an equipment lease under $75,000 to $100,000 without having to supply financial statements.  Banks will require financial statements for all dollar amounts.
  3. A lease can be turned around in a couple of days where a bank loan can take days to weeks. 
  4. The interest rate on a lease will remain fixed where a loan can fluctuate with the market. 
  5. Leases do not have as stringent credit guidelines as bank financing has.  Even if a customer is declined by their bank, they can probably still get approved for lease financing.

If you have any additional questions, you can contact the Office of the Controller of Currency http://www.occ.treas.gov/, The Federal Reserve  http://www.federalreserve.gov/ or contact AFP at 877-237-7287 or www.financewithafp.com.

AFP Talking Finance