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As brilliant as this Blogger page has been for us, we've moved over to our brand new, independent site! So, unfortunately, there won't be any more posts put up here - please head over to GoodAdvice to get the latest there...

Thanks for all your support, and see you on the new site!

How to build a following...

When I started my Finance Coach group on Facebook a year ago, I set myself a goal of having 1,000 members within a year. I remember a number of people saying to me that that was a very high bar to set, and I shouldn’t be surprised if I fall well short of that. Well, last Friday was one year exactly, and I had 902 members. So, I didn’t quite make it to 1,000 in time, but I ‘scored’ 90.2% on my own ‘test’, and I’m pretty damn happy with that! So, I don’t confess to being the world’s best blogger (far from it), but here’s some of what I learnt in the process. While the lessons were learnt from blogging, they can easily be translated into a business context…

Give people something they want/need. Find a niche that’s not being served, or that’s not being served well enough, and fill it. If people want and need what you’re offering, half the battle is won. What spurred me to start my Finance Coach group was coming across more and more people that were in a real financial pickle, or whose businesses were struggling. I knew then and there that people would take to a group where they were given free, practical financial and business advice…

Keep your promises. Following on from the first point, do what you said you were going to do. If you suddenly start going off on a tangent, people will quickly become disillusioned, and drop you like a rock. There’s nothing wrong with diversifying, but don’t stop doing what it was that attracted people to you in the first place…

Get the word out. When you’re first starting out, take ANY opportunity you have to tell others about what it is you’re doing. Put up flyers, email everyone on your contact list, mention it in the conversation at dinner parties, hand your business cards out to everyone you meet, etc. The hardest part is getting out there, so be prepared for the hard yards, and to do whatever it takes…

Engage your audience. Invite feedback, and respond to it. Join the conversation about your product. Don’t be afraid of criticism, or try and cover it up – people will pick up on this straight away, and you’ll lose the trust that you’ve built up with them…

Give regular updates. I was told that, for blogging in particular, the single-most important thing you can do is to do it to write regularly. This principle can extend out to the business world as well – keep in touch with your customers, send them news, forward them articles that might interest them. This jogs their memory about you, and keeps you close to top-of-mind…

Measure, measure, measure. There’s no point in trying to grow a group of readers or customers, if you’re not tracking how you’re doing. This could be any metric that applies (reader numbers, rate of growth, increases in sales, etc), but monitor it closely to help you keep track of what’s working and what’s not…

Be sincere. Come across in all of your communications as professional, but still human. Remember that your audience/customers are, ultimately, still people – so talk to them in their language every so often, if not all the time. Being sincere will also pay off big time when you make a mistake (and you probably will sometime) – your followers haven’t forgotten that you too are human, and will be much quicker to forgive you your trangressions…

Ask for referrals. Once you’ve built up a relationship with your followers or customers, leverage off of their networks. Ask them who else they know who would like your product; and ask them to invite their friends to give you a try…

Set goals, and then break them down into manageable parts. Don’t just have a vague idea of where you want to be – be specific about targets, what they look like, when they must be achieved by, who’s responsible for what. Then, once you have a goal in sight, break it down into smaller goals (or milestones) that need to be reached along the way. This way, you won’t be overwhelmed by the sheer size of your big goal, as you’ll be focused on the smaller, more realistic mini-goal…

Speak to people who’ve been there. Seek out those who have been successful in the area you want to get into, and ask what they did, and what lessons they learnt. You’d be surprised how happy most successful people are to give you advice. I was very fortunate to have the support of very experienced bloggers like Chris at Imod and the guys at Cherryflava – their encouragement and advice was priceless…

Remember your motivation. There will be times when you hit a stumbling block, come across a massive obstacle, or start to lose heart. When this happens, go back in your mind to what your motivation was for doing what you do, and bring that forward. There have been times when I just haven’t felt like writing anything, but I always remember that the point of the group was to help and inspire others to manage their finances and businesses better. That idea – that I was helping others in some small way – is what kept me going, even when I wasn’t feeling so hot about doing the work…

Finance Coach - Vol. 35

Finance tip: Transport

Make your vehicle as aerodynamic as possible. One of the best ways to reduce your fuel consumption is to make your vehicle aerodynamically efficient, as it then creates less resistance as it moves through the air (using less fuel in the process). Now, we don’t all have low-slung sports cars, but there a number of simple ways to help your fuel go further: Firstly, take off any removable roof racks that aren’t being used – all they are doing is creating more air turbulence as you drive. Secondly, keep your windows closed whenever possible – driving with one or more open windows can increase your fuel consumption by as much as 10%. And thirdly, give your car a regular wash. Not only will regular washes help to maintain its finish – and thus its value – and be some good exercise for you (that’s right, do it yourself!), but having a dirt-free car keeps its exposed surfaces smoother; decreasing air resistance while it’s moving. It’s one thing we can learn from the airlines – they have teams dedicated to keeping their planes clean, which helps to knock a few percent off of their fuel-burn rates…

Business tip: PR/Marketing

The timing of your PR and marketing efforts is everything. While it’s obvious that when you do your marketing is important, it’s even more so when working on public relations material through third-party publications. If you are trying to get an editorial though into a particular magazine or website, be sure to ask about their lead-times. Many publications plan their issues far in advance (sometimes as far as 6 months ahead), so be sure that you take this into account when approaching them, if you are looking to have your material out around a specific date. If you are wanting to advertise your Christmas promotions, for example, planning to start work on the campaign on 1 December will be far too late. In fact, if you haven’t approached your target publications at all yet, you’ve probably already missed the boat. Also keep in mind the theoretical ‘sales cycle’ – the theory that what you advertise now, you’ll start to see results on in six weeks. So pull out your calendar, and start planning now for your future campaigns…

Finance Coach - Vol. 34

Finance tip: Leisure

Consider fractional ownership. For those of you looking at spending some of your hard-earned money on a ‘leisure investment’ (think holiday house, boat, plane, jetski, etc.), consider going the fractional ownership route. This is where, instead of buying the object or property yourself, you pool up with a number of other interested buyers, and each pay a proportionate amount of the total. The idea is then to share the usage of what you have bought, based on calendar days or some other equitable formula. The reason that this form of ownership has gained in popularity in recent times, is that people are realising that they actually get better value for their money – they were never going to use the property or object all year in any case, so they may as well only pay for a smaller proportion of it, and let others use it when they’re not. This then ties up less of their precious capital (which they can then invest in other things), and they still get to enjoy the benefits of using what they have paid for. For even more convenience, the next level is to pay a small levy, and get a third party to administer and maintain the property or object for all the owners, freeing them up from the potentially time-consuming aspects of ongoing maintenance and trouble-shooting...

Business tip: Marketing/PR

Write for publications to increase your profile. If you’re looking for an avenue to increase your exposure to the public, or to a particular industry, consider writing articles/submissions for publications that your target market would read. Most editors are constantly on the lookout for content to fill their pages (if it’s relevant and of a high enough standard), and gratefully accept submissions from those interested in writing them. Writing like this has a number of benefits to your business: Generally, if you do submit an article, the editor will allow you to put in a short footnote, where you can mention your company and perhaps some contact details. Even if they are a bit restrictive on this aspect, they would at least attribute the submission to you and put your name on it – if people want to find out more, they could simply Google you. If you do this regularly over a period of time, you’ll start to build up a reputation of being an expert in your field, which will put you at top-of-mind when people are looking for more information on your particular product or service – leading to more contacts and sales leads...

Finance Coach - Vol. 33

Finance tip: Utilities

Insulate your roof. One of the simplest ways to save on your electricity and energy costs is to have your roof/ceiling insulated. Going into summer here in the Southern Hemisphere, it will help in keeping your house/office cool, and reduce your reliance on energy-chowing air conditioners. For our Northern Hemisphere readers, going into a cold winter, it will help to keep the warmth in your building and stop it from escaping out through the roof. This then has the benefit of reducing the need for heaters and thermostats to be left on non-stop. While you can obviously contact the experts to come in and do it for you, there are also cost-effective ways to do it yourself. Speak to your local handyman or hardware store about the best materials and layout for the job…

Business tip: Finances

Create a ‘slush fund’. This is one of the most prudent financial habits that a business can get into, yet so few actually follow the principle. Essentially, what it revolves around is taking a little bit off the top each and every month (this might be based on revenue, profit, or whatever), and putting it into a separate savings account. This slush fund then serves two purposes: The first of these is to provide an extra source of income, from the interest generated off of the capital in the account. This may only be a few extra bucks a month, but it may be enough to cover something small like your phone line rental or coffee/tea expenses (remember, every bit helps). The second purpose is to build up a buffer against bad times or unexpected expenses. From personal experience, I have done this with my limousine company. Every month, once I have run the income statement and calculated profit, I only pay out 90% of the profit. The extra 10% then forms part of the company’s slush fund. Over the years, following this principle strictly has produced the following result: If I were to turn off my phones today, and stop running the business in its entirety, I would still be able to pay salaries and overheads for a full six months. That’s right, six whole months! How long would you last?

Finance Coach - Vol. 32

Finance tip: Income

House-sitting. With a nice break coming up shortly, I was reminded of how necessary a service that of house-sitting is – and how simple a source of extra income it can be as well! Almost everyone knows how it operates: When people go away on a trip, they generally want somebody to either stay in their property in their absence, or pop in on a regular basis just to keep an eye on the place. As almost all home-owners do go away at some point or another, there’s a huge market for the service. The traits you would need most are those of trustworthiness and responsibility – you are, after all, looking after what is often someone’s most prized possession. The income side of it can vary, but as a rule you can make a nice chunk of extra cash for doing very little – especially if you get asked to do long-term stays. Looking after bigger properties with gardens would generally allow you to demand a higher fee, as would having to look after pets as part of the job. Finding work would generally come from word-of-mouth (good house-sitters come very highly recommended), but you could also look at doing mail-drops in your area, or putting an ad in your local newspaper – especially as you get closer to common holiday times…

Business tip: Pricing

Offer a ‘hail-mary’ choice. If you’ve been battling to sell one of your products or services, which falls at the top end of your quoted price range, consider putting in an even more expensive one to boost your sales. While this may seem ludicrous at first, just follow the logic for a second: Say, for example, that you run a restaurant, but have been struggling to sell your most expensive dish, which goes for a hundred bucks. This dish is a high-margin offering, and increasing the number of ‘units’ sold would do wonders for your business. The problem comes in where customers want to buy it (as it’s a wonderful dish) but they’re uncomfortable doing so as it’s the most expensive item on the menu, and they feel that it comes across as excessive and unjustifiable. Adding another, even more extravagant dish at, say, two hundred bucks, could be just the solution to increasing the number of people opting for the first dish, being the one you actually want to sell. This is because, you see, the first dish is not perceived as extreme and excessive, as that mantle now falls on the new dish. The result is that more people will feel comfortable opting for the first dish, and you then have your desired increase in sales. The beauty of doing this is that, if someone does actually go for the new, extravagant option (a.k.a. the ‘hail-mary’ choice) then you’re smiling anyway, as you get a big sale from an expensive offering!

Trend: The return of pyjamas...

I came across an interesting article the other day, mentioning a trend which has been picked up across the globe over the last 18 months. The article started by saying how many clothing retailers have had a torrid time of late, thanks to the economic crisis, but there seems to be one department which is bucking the trend: sleepwear.

Apparently, sales of sleepwear have seen a marked increase over the last couple of seasons – up to as much as 30% in some cases. The most interesting part about it was that it’s not your slinky nightie and boxers brigade which is doing so well. It’s the old, full-length flannel and cotton type!

Now, this does actually make a lot of sense to me, for a couple of reasons. Firstly, as the economic crunch started to bite, one of the first areas that people started to cut down on was entertainment. This means that there are less people out at pubs, clubs and restaurants in the evenings, and more having a quiet night at home. And if you’re at home vegetating in front of the TV, are you doing it in designer clothes? No, you’re slouching around in your PJ’s!

Secondly, these long, comfortable pyjamas are also a lot warmer than your average night-slip or T-shirt and boxers. So, for those looking at saving a bit on their heating bills, this option also makes a lot more sense. Instead of the pumping the thermostat, you settle in for a movie on the couch with your warm pyjamas, a blanket, and maybe a hot water bottle!

The third reason is a bit more psychological. In uncertain times like these – with people losing their jobs, seeing their investments decline, feeling their relationships strained – they turn to those things that make them feel safe and more secure. People cast their minds back to better times, and re-connect with people or items that transport them there. And honestly, what could bring you back to those happy times of childhood and your youth more than climbing into a pair of big fluffy pyjamas?

Just some food for thought… Sleep tight!

Finance Coach - Vol. 31

Finance tip: Entertainment

Restaurant specials. If you’re fond of eating out, but find the expense of it killing your budget, make sure to take advantage of restaurant special offers. Many restaurants are struggling at the moment, and have introduced these offers to entice patrons to their establishments. If you’re determined to get good value for money, consider going out for a meal between Monday and Thursday – many restaurants have reduced prices or freebies thrown in on these days, as it’s not their peak time, and they’re just happy to have feet through the door. Also keep an eye out for ‘early-bird’ specials, even over weekends. This is where the restaurant offers a significantly reduced price on meals served earlier in the evening (in by 6pm, out by 8pm, for example) – they are generally able to fit in another sitting afterwards, and are keen to get the extra revenue pumping through…

Business tip: Sales

Get your prospects to try out your product or service. If a potential customer has the opportunity to physically experience the product or service for themselves, they are up to 300% more likely to buy it. This is because they are able to experience first-hand the benefits or enjoyment of it, instead of having to theoretically conceptualise what it would be like. Why do you think car sales-people are so keen to get you in the driver’s seat? Similar psychology applies to promotions and give-aways. If you’re handing out freebies or product samples, try and get your promotions staff to open the packaging in front of the customer. If they take it home all still wrapped up in plastic, the chances of it never being opened and used increase exponentially. The same applies to Christmas presents!

Finance Coach - Vol. 30

Finance tip: Savings

Harness the power of compound interest, and start saving early. There are many examples of the power of compound interest (essentially interest on interest), but here’s one that I remember seeing recently: Imagine you have two people, Mr A and Mr B, who are the same age. Mr A saves ten thousand bucks a year for the first 12 years, and then stops saving altogether, leaving his investment to grow. Mr B does not save a cent for those first 12 years, but then saves ten thousand bucks a year for the next 28 years. At the end of 40 years (12 + 28), assuming a real return of a few percent a year, Mr A’s investment will be worth substantially more than Mr B’s! Mr A only saved for 12 years, versus Mr B saving for 28 years, but the fact that Mr A started earlier means that he had compound interest working for him – with his investment being worth more in the end. The moral of the example is thus, if you’re not saving anything at the moment, to start saving NOW (not next month, or when you get your raise next year). The sooner you can get started, the sooner you can have the power of compound interest working for you!

Business tip: Sales/Marketing

Sell benefits, not features. Whether you’re selling a product or a service, make sure that your marketing message entails the benefits of what you’re offering, and not just the features. By explaining the benefits to your potential customers, you are going straight to the heart of the matter – which is ‘what the product/service will do for them’. For example, a bad car salesman will go on about how the vehicle has ABS brakes and multiple airbags. A good salesman, however, will mention these features, but then put them into context by explaining that the car is very safe to drive. The good salesman has put forward the benefit of driving the car, whereas the bad salesman has just listed features of the vehicle (which one could find in a brochure). Or if you had a small business offering accounting services to companies, a feature would be that you can cover the full financial function. A benefit, though, is that your customers no longer need to worry about paperwork, and can concentrate on growing their businesses. Do you see the difference in the two messages, and how much more effective the latter would be?

Nice international readership!

Just had a look at who’s been visiting this blog, and over the last month, I’ve had readers from 10 different countries! Now, that’s not exactly mind-blowing for an established blog, but I’ve only been doing this since January, so I’m pretty chuffed :)

What’s even more exciting is the spread of countries that the readers have come from… Here’s the list, in order from most readers to the least:

1. South Africa (obviously, thanks guys!)

2. Japan

3. Indonesia

4. Ireland

5. Norway

6. United Kingdom

7. Poland

8. Brazil

9. USA

10. Singapore

That’s five out of seven continents represented – all I need to do is get a couple of Aussies and some polar scientists and I’m seven out of seven! You might notice that there’s also an above-average representation from Asian countries. That’s probably due to the holiday that I had over there earlier this year, and some networking I managed to get in with a few of the locals (as if I would actually ever just relax on a holiday!)…

Definitely puts a smile on my face :)

Learn, learn, and learn some more…

I fully believe in the principle of continuous learning. This is where a person chooses to actively learn something that is not necessarily prescribed to them to do so by their boss, teacher, mentor, etc. They find something that interests them, or something that could help them in some way, and take the time and effort to study it – taking what they learn on board in their everyday lives.

When the subject of learning comes up, many people I meet feel that they’ve done all the learning they need to. “I did well at school” they say, or “I’ve paid my dues at university”; and they have no intention of taking any more courses ever again. I can’t help but feel that they are really limiting themselves by having that mindset. The way I see it is: Learning is growing, and if you’re not growing, you’re dying. There is so much to this wonderful world of ours – how could you not want to find out as much as you can?

And it’s not only to cure your inquisitiveness that I prescribe ongoing learning, either. Learning more, and having an open mind, makes you a better friend, a better parent, a better employee – just a well-rounded person in general. Think about it: If your kid one day asks you about how electricity works, would you not rather be able to give them some form of educated answer, rather than “Uhhhh, I don’t really know…”? Or if two people are applying for the same position at some company: They’re the same age, have the same qualifications, have the same experience, but one happens to have done a course in marketing, or speaks an extra language. Who do you think they’re gonna hire?

I’ve practiced this principle for most of my teenage and adult life, and I feel it’s made me a much more balanced individual. Having studied seemingly random courses, and having seen things from the viewpoint of industries I previously knew very little about, has opened up my mind to the world of possibilities out there, and given me a much wider perspective on almost everything. Knowing a little about many industries or topics allows you to see the common threads that run between them, and perhaps even spot opportunities for them to combine and collaborate, creating a whole new industry or area rich with possibility (and potentially profit!).

Right now, I’m 25 years old, and here’s a summary of what I have studied “officially”:

• At age 16, while still in high school, I qualified as a cocktail bartender. Not even old enough to work behind the bar, on the surface I learnt how to combine flavours and alcohol to make a killer cocktail. Over and above that, though, I learnt about stock control, up-selling, reading patrons, crowd control, and the nightlife industry in general.
• After finishing high school, I did a degree in Accounting at university. Not only did this teach me about the technicality and processes of being a good accountant, but I also learnt about the different inter-dependent parts and functions of a business (like marketing, operations, staffing, cost control, growth) as well as the business world in general (finance, economics, statistics, valuations).
• Not content to just learn about business, I took French and Spanish as extra subjects while at university. I haven’t been able to use them as much as I’d like to have, but they’ve exposed me to the culture and lifestyle of these fascinating people (and never fail to impress women!).
• Also while at university, I passed the Estate Agents Board Exam, and became a certified estate agent. Again, this was about more than learning to sell houses – it taught me about the housing market cycles, property types, housing legislation, how home-owners can get caught out, how to nail down a bargain, developers methods, and much more.
• After finishing my undergraduate degree, I decided to take a year off from studying and focus on growing my limousine business. Two months out of university and the environment of learning, I started to get fidgety. So I registered to do a Paralegal Diploma through a private college. The course was part-time, so I was able to spend time on my business, and it really opened my eyes to the legal side of the world. I learnt about criminal law; civil law; what happens to your assets when you die; contract law; the legal system; and plenty more.
• Deciding that I needed a bit more than an undergraduate degree to pass muster in the cut-and-thrust corporate world, I then did my Honours degree in Taxation over the next two years. While this obviously taught me the nitty-gritty of our tax system, I also learnt about how to read and decipher legal judgements and legislation, as this was the essence of the course material. It was fantastic, as I went in a number-focused accountant, and came out thinking like a sharp-minded lawyer. Being extremely demanding, this course was also an exercise in time management – we were expected to put in a couple of hours of study every day, while we all had full-time jobs or businesses to run! It also made me raise my game in terms of the people I associated with – I was the youngest member of the class by a good few years, and it introduced me to a brilliant network of professionals and business owners.
• This year, I have just finished a certificate in Guest House Management (through www.getsmarter.co.za – a great learning provider, check them out). Well over and above what the title suggests, it has given me amazing insights into the travel and tourism industry in general, which will be priceless for the future!

And it doesn’t stop there! As I’m looking at opening a coaching and business advisory practice later this year, I’ve just started a life-coaching course. Not only will this give me the knowledge and tools to help others and run a successful practice, but I’m also applying the principles inwards, and learning an absolute ton about myself in the process.

Having read this, don’t feel that you have to run out there and sign up for your nearest university course, either. There are many other ways to broaden your mind: pick up a book or two on a topic that interests you; read a newspaper; follow blogs about your particular industry; ask questions of people you admire. There’s so much to learn out there, just pick a topic, and get going. One day you’ll look back, and be glad you did!

Finance Coach - Vol. 28

Finance tip: Assets

Buy appreciating assets. Many of the more expensive, or big-ticket, items that we purchase lose their value over time. This is known as depreciation, and your car is generally a good example. Many people view their car as an asset, but fail to realize how much value it actually loses over time. As a general rule, a car will lose 20% of its value in a year (this number is higher for certain makes, and lower for others). A good financial habit, though – especially when buying big-ticket or luxury items – is to aim for assets that appreciate in value. Essentially, this means that you should aim to own assets that will increase in value over time. As this is not always possible, a close second is to have assets that at least hold their value well and do not depreciate much or at all. There are certain assets or luxury items that are generally regarded as having a good chance of holding or increasing in value: Boats; planes; art (especially if by a recognised artist); collectors items; antiques; etc. The application of this principle in everyday life would be when looking at buying a car, for example. If you are simply needing a vehicle as a run-around, rather look at one that has lost most of its value already – it’s value should remain fairly static, and you will not lose much when it comes time to sell it on. If you are looking at buying a vehicle as a reward for years of hard work, though, consider looking at buying a classic car instead of a brand new one. You could find one going for a steal, spend a little restoring it, and then be the proud owner of a collectors item that’s in hot demand, and appreciates in value every year. Or if you’re doing some re-decorating at home, rather than wasting money on decorative knick-knacks, look at buying a few choice pieces of art by up-and-coming artists. If the artist is only just starting out, you could get them for almost nothing and, if they start to grow a following in the art community, you could have your hands on some valuable pieces in a few year’s time…

Business tip: Staff

This week’s Finance Tip was a bit lengthy, so I’ll keep this one short! Think carefully about how you refer to your employees. When you’re talking to people about your business, how you refer to your employees can make a big difference. Using the word ‘employees’ can give the impression that you are somewhat autocratic or condescending. Rather use words such as ‘colleagues’ or ‘associates’. These are both fair reflections of your relationships with your staff, and shows that you value and appreciate their contributions to the business…

Finance Coach - Vol. 27

Finance tip: Debt

Speak to you creditors. For most people, when they owe someone money, they try their hardest to avoid contact with them. They ignore their calls, don’t reply to messages, delete their emails, etc. If you owe people or institutions money, and are having trouble meeting your payments, don’t go down this road. Pick up the phone and call them. If you explain your situation, and make it clear that they will be paid, and that it’s just a matter of when, they will feel more at ease. Alternatively, offer to pay a smaller amount, just so that they can see the debt is being reduced somewhat. What lenders want to know is that they will get their money back, and it’s only when they’re ignored that they start to get aggressive. Also, these days, everything is negotiable. So speak to your bank about dropping your interest rate slightly, or chat to the stores that you have outstanding accounts with about reducing your finance charges. You may get stonewalled, but the chances are good that they will give you a break of some kind, especially if you make it clear that you do fully intend to pay off the debt…

Business tip: Strategy

Plan for a worst case scenario, before it happens. Most business owners would like to think that their businesses will carry on functioning as long as they want them to, and don’t like to dwell on what would happen if disaster were to strike. Planning for a worst case scenario, however, is an exercise that all businesses should go through. What would happen if you or one of your key employees were to die unexpectedly? Is the succession plan clearly laid out? Are your operating systems written down so that someone could step into the breach and take over? What if your premises were hit by extreme weather? Is your insurance up to date? Or what would happen if you were to lose your biggest customers? How would you go about replacing them? These are just some of the questions you should ask. Each business is different, and is exposed to risks of different types, so these questions will vary. But they are necessary questions to ask – and they should be asked now, before disaster strikes. This way, if something terrible were to happen, you would already have a plan in place. You would be better prepared to deal with the blow, and would stand a much better chance of recovering from it…

Yours in finance,

Gareth Cotten

Making money at the movies...

I recently saw a small article on our local newspaper, about a website called RunPee. Essentially, what the site revolves around is providing information about the best time to go run and pee during a movie at the cinema, to ensure that you miss as little as possible of the film. I think it's great, cos we all tend to overdo it on the Coke at the movies, don't we? And then not only do you miss some of the film, but you've gotta bug the people you're with, to find out what you missed! Check the site out at www.runpee.com...

Seeing this, though, triggered thoughts about the cinema business in general. A cinema's business model is an interesting one: They don't make a lot of money off of the actual ticket sales - most of their profit comes from selling you snacks and drinks at huge margins. As many big cinema chains have been struggling somewhat recently (with the advent of everybody just downloading the movie, or copying it from friends), they've been looking for other ways to boost their profits.

Apparently one of the front-running ideas is to bring back intervals for every movie, and not just the 3-hour epics. The rationale behind this is that it then gives them a second shot to sell you something to chow on, over and above the pre-movie rush. Just think about it: How many times have you been running late, and skipped the popcorn to catch the start of the movie? I know I have, plenty of times!

The last movie with an interval that I saw was Titanic, waaaaay back in the day. Now it makes sense why it was given such a long run (here in SA, it probably stayed on the circuit three times as long as any other movie) - not only would youngsters come and watch it again and again, but they'd have two lots of snack-buying in one movie!

And, out of interest, when I say big profit margins on snacks, I mean beeeeeeeeg margins. Apparently, in some cinema chains around the world, the margin on popcorn is 1000 percent - now that's what I call profit!

Finance Coach - Vol. 26

Finance tip: Income

How to ask for a raise. Getting a raise at work is no longer a given, especially in these new economic times, so how you approach the topic with your bosses becomes all the more important. Firstly, you need to showcase your value to the company, so show them what you have achieved recently – this could be a reminder of a project that went off perfectly, or very positive feedback from clients about your work. Secondly, explain why you feel you are worthy of getting a bump up in salary – you have taken some of the workload off of your immediate superior, for example, or feel you are ready to take on some more responsibilities. Thirdly, be prepared to actually have more of these afore-mentioned responsibilities put onto your shoulders. Companies these days often feel that raises are not automatic, and must be linked to an increased scope of work – so don’t think you can talk up what you’re prepared to take on, and then just pass it on at crunch-time. And finally, timing is everything. Try and wait until there is some good news to preface your request for an increase – this could be the release of better-than-expected company results, or the fact that you’ve just landed a new client. Also remember that the person you’re pitching to is human, and will have good moods and bad moods – there’s not much point in approaching your boss if he’s still fuming from a screaming match on the phone with his wife!

Business tip: Marketing

Always remember to have a ‘call to action’ in your advertising. The final part of any piece of effective advertising material is a call to action – where you want the potential client to act on what they’ve seen and take some form of immediate action. This could be a prompt to pick up the phone and call you now, to visit your website to take advantage of a special offer, or to email you for further information. The public (and thus your particular target market) is so bombarded with media and messages every second of the day that, if you don’t get them to act immediately, your message could be lost and forgotten. Also ensure that they have as many ways to contact you as possible – not everyone uses a computer, for example, so even if your preferred form of contact is email, have a phone number displayed as well. And make sure that your contact details are clearly visible – there’s no point in having a roadside billboard asking people to call you, but your number is printed in a font that’s impossible to read from a moving car…

Finance Coach - Vol. 25

Finance tip: Household

Spread out your washing. Whenever you are doing laundry, or if you use a dishwasher, rather wait to have a full load before turning on the machine (not that you need an excuse to put your chores off!). Using the washing machine or dishwasher uses up quite a fair amount of water and electricity, so having less than a full load at a time is a waste of both. Using your dishwasher to do a lot of dishes, though, is actually a smarter choice than washing them by hand. Hand-washing is inefficient for anything more than a small amount of dishes, as there is a lot of water wasted in the process - so unless it’s only a couple of bits and pieces, rather wait till you can load it up into the dishwasher. Another way of saving energy on these machines is to refrain from using the hottest setting. Other than in exceptional cases, using a lower setting will give you the same result, and use a lot less electricity…

Business tip: Finance

Look to your friends and family first for financing. Small businesses generally need to raise less money than larger ones for start-up or bridging purposes. So if you’re looking at raising finance for your small business, and you’ve exhausted your personal resources, consider approaching your friends and family first for the extra that you need. But don’t go cap in hand; make it a business proposition for them, and treat them in substantially the same way as you would a bank or financing institution. (1) Show them your business plan: It may not be as professionally presented as if you were approaching a bank, but it shows them that you’ve done your research. (2) Show them your passion: Tell them from the heart why it is that you want do what you want to do, and how passionate you are about the idea – this is a lot easier with people you know and love than it is with a bunch of suits from your bank. (3) Make it worth their while: There is generally a broad band of interest rates between what they could make on their savings and what you could get finance at (lending institutions see small businesses as risky, and aren’t afraid to charge the earth on the money they lend you). Offer to pay them at a rate somewhere in the middle – this way, they have the chance to make an increased return on their money, and you pay a lower rate of interest than you otherwise would. (4) Respect their investment: Realise that they have gone out on a limb for you, so make sure that you put every last ounce of energy into the business to make sure it works. And don’t even think about skipping payments – you wouldn’t dream of doing that to the bank, would you?

Finance Coach - Vol. 24

Finance tip: Income

Show-house sitting. There’s a great opportunity to make some extra money by offering your services as a show-house sitter. These are basically people who sit in a show-house on show days, and hand out information flyers to the potential buyers that come to have a look. You don’t have to be an estate agent, and you get paid for doing extremely little! With agents and realtors battling to sell houses at the moment, they’ve got too much stock on their hands – this means that they generally don’t have enough in-house staff to sit at each and every house in their portfolio on show days. Approach a few agencies in your area, and ask if they’re looking for standby sitters. It works out to be only a few hours at a time, generally over the weekend (when you can spare it), and if you do it reasonably regularly, you can pocket some nice extra cash!

Business tip: Marketing

Always remember the spouse/partner. When you’re looking at selling your product or service to a potential customer, and it involves a little more thought or decision-making, always remember to include their partner or spouse in your approach. For many purchases, people would generally discuss it with their other half before committing to buying, so find a way to get to them as well. If, for example, your target customer is a man, and he needs to think about it, pitch it in a way that would appeal to a woman as well. He can then take this message back home, and bring it into the discussion he’d have with his wife or partner. Include an incentive or gift to win over the other half, get them on your side, and you could find it a lot easier to close the sale…

Day jobs are risky...

Many people I've met come up to me and ask: "Don't you worry where your next paycheque is coming from?" or "Why don't you get a stable day job? It's less risky..." While I understand where they're coming from, and my income does fluctuate from time to time, I'm of the opinion that relying on a day job is just about the riskiest thing you can do.

Most people have one job - they have a position where they work for one company, go to their office every day of the week, do their work, and get a paycheque once a month. And they probably feel quite safe and secure, looking at an entrepreneur like myself with a querying glance, maybe even a hint of fear. "You could lose it all", they say. "What if it all fell apart?", they ask. "Working for yourself is far too risky!", they cry. Au contraire, I reply...

You see, here's the thing. Working for myself, I decide how much I'm going to get paid. I pay myself when I want to. I don't have to go begging someone else if I need an advance, or if I need some time off - I just take it. Yes, I might make more in some months than in others, but the way I've structured my income, I get it from three or four different sources. You, miss scaredy-pants, only have one source of income. One. Think about that. If your boss suddenly decides "You know what, I don't think we actually need Sarah in accounts anymore, we need to cut back" BOOM!! SLASH!! You're gone. All of a sudden, you've got no income. Zero. And it happens all the time. Just ask around - I guarantee you know, or someone you know knows, someone who's lost their job in the last 12 months. Now that's risky...

Now, in my case, if I were to lose a client or, God forbid, some disaster were to happen to one of my companies, I'd be bleak, yes. But I'd still be in control of it - it wouldn't be the whim of some nameless suit in corporate cutting costs across the board. If one of my businesses failed, it would be because I'd let it happen (or some freak Act of God occured, but let's not go there!). And even if one of my businesses did go under, I'd still have another two or three sources of income. So I wouldn't go from working to destitute overnight (and I know that I'd claw my way back!). I'd be relatively covered and still working - I'd still be able to pay the bills and live my life.

The second scenario above seems a lot less risky now, doesn't it? I guess I'll just never understand how people could put their entire lives in the hands of one company or one boss. It just boggles the mind. But hey, if they think it's the safe option, then who am I to judge?

Finance Coach - Vol. 23

Finance tip: Food

Meal-sharing at the office. With most people eating lunch at work,there's a great opportunity to save some serious money by organising to split the cost of your meals between you and your colleagues. You could either pool your money and buy your meals in bulk, or alternate days on which one of you cooks for the group. You never know, if you really enjoy cooking, it could even turn into a chance to cook for your colleagues on a regular basis, and make some extra money on the side!

Business tip: Sales

Incentivise your staff to increase sales and profit. While this may seem obvious to those who have sales staff working on commission, there are other ways to implement this across all staff. One way could be to offer commission to non-sales staff if they bring in business (you'd be surprised how many contacts your other staff will suddenly have when they know there's money in it for them!). Another plan could be to set aside a percentage of profit, to be distributed amongst the staff on a monthy or quarterly basis. This will not only serve as an incentive for everyone to pull together to drive sales and revenue, but could also result in some innovative cost-saving ideas which, until now, your staff had never thought of mentioning...

Finance Coach - Vol. 22

Finance tip: Debt

Consider consolidating your debt. If you have various small debts which you are trying to pay off (such as credit cards, store accounts, etc) as well as a mortgage or bond on your property, consider consolidating your debts into one payment. Essentially, what happens is that you would extend the amount you borrow against your property, and use that money to pay off all of your other smaller debts in one fell swoop. The rationale behind it is that the interest rate on large debts (like a mortgage bond) is significantly lower than that charged on smaller consumer debts (like your credit cards). It also becomes easier to manage, as you only have to focus on making one payment every month, instead of a handful. If you choose to go this route, though, you must be disciplined and still pay off the same amount every month that you would have been paying on all your smaller debts. If you aren’t disciplined like this, all that you are doing is stretching the short-term debt over a longer period of time – in which case you’ll end up paying much more in interest over the long-term.

Business tip: Networking

Join your local trade association or organization. Nearly every industry has its own trade association, made up of all relevant role-players and stakeholders. Find out about your local chapter, join it (or if there isn’t an existing one, start one), and actively take part in it. Not only will it present you with growth opportunities – like forming joint ventures with other companies in your area to grow your market, or finding out that one of your competitors has excess demand that it can’t fill – but it can also act as a great source of troubleshooting advice. Speaking to others will give you a fresh perspective on any problems you may be having, and it’s also almost guaranteed that someone there has been in exactly your position, and can advise you on how they got through it.

Finance Coach - Vol. 21

Finance tip: Transport

Driving style. There are certain things that you do while driving that may be contributing to you using more fuel than needed. One to watch is driving for too long in too low a gear. The higher the revs that your engine operates at, the more fuel it uses. To be efficient, change up to a higher gear as soon as possible, without putting your engine under pressure (you’ll know you are if it starts to chug and jerk). Having said that, you should also be wary of trying to accelerate too much once in a higher gear. If you’re in a high gear (say, fifth gear), and need to climb a hill or overtake someone, it’s more fuel-efficient to quickly change down a gear or two, pass the other person or climb the hill, and then change back up into the higher gear. If you try to do it in the higher gear, you need to depress your accelerator pedal harder (to get the acceleration), which shoots up your fuel consumption. Generally, don’t put more pressure or weight on the accelerator pedal than is absolutely necessary to maintain your desired speed. Try lifting your foot just a millimetre or two once you’re at your travelling speed – you’ll stay at that speed, and I guarantee that you’ll use less fuel…

Business tip: Appearance

Make a strong first impression. When meeting people for the first time, they are likely to form an opinion of you within the first seven seconds. It sounds simplistic, but keep the following in mind when meeting someone for the first time (and this applies both in and out of business situations): Be dressed appropriately – if you’re meeting a supplier to negotiate prices, don’t pitch up in shorts. As you approach the other person, make sure that you’re standing up straight, and not slouching or looking at the floor. Make eye contact, and keep your voice firm and level as you introduce yourself – you’ll come across as more confident. Be sure to give a firm handshake, but don’t overdo it – if you try and crush their hand in yours, you’ll come across as domineering, and their guard will go up immediately. If you’re a man shaking a woman’s hand, and don’t know how hard to do so, let her initiate the ‘squeeze’, and respond at exactly the same pressure. And don’t forget to smile – you’ll subconsciously relax yourself and release any tension you may be holding in your face, while also putting the other person more at ease…

Finance Coach - Vol. 20

Finance tip: Entertainment

You can still enjoy yourself on a budget. One of the first areas that people cut down on when they fall on trying times financially is their entertainment expenditure. It’s still very possible, though, to have a good time and let off some steam without breaking the bank – just be innovative in your thinking. For instance, if reading is your way of ‘escaping’, there’s no need to pay through the nose when the new bestseller comes out. Sign up as a member at your public library – it’s generally free and you’ll have access to thousands of books all across the spectrum. If you’d usually fork out for a movie at the cinema, consider waiting for the DVD, or taking in a performance at your local amateur theatre instead (they’re normally so glad to have an audience, they barely charge anything!) Or if expensive dinners were your indulgence, rather organize a dinner party with some close friends. Get everyone to bring something different (eg. one brings a starter, one brings a main, one a dessert, one a bottle of wine) and you can all revel in each other’s company, while saving good money as a group…

Business tip: Strategy

Beware of paradigms. When trying to innovate in your business, always be wary of people who tell you why you can’t do something. They’ll be very quick to tell you that “You can’t do that”, “You can’t charge that little/much”, “It’s always been done that way”, but don’t fall into the trap of their way of thinking. Many industries have unwritten rules or ingrained practices that have formed over time. They’re not necessarily the best or most efficient way of doing things, but they’re there, and people don’t want to be seen questioning them, for fear of being ostracized. But be different. Break the mould. Always ask “Why?” or “Why not?” And if you (or they) can’t come up with a logical, sensible answer, then go ahead and do it!

Breaking down a break-down...

Last week, while driving to and from the office, I couldn’t help but notice the amount of vehicles that had broken down on the side of the road. Now, there would usually be one or two that I would see in a day’s return trip, but last week it must have averaged 7-8 vehicles a day! While most people would only see the inconvenience caused as the traffic slows up, I couldn’t help but try and see what the contributing factors would be…

Assuming that people would not voluntarily stop their vehicles on the side of the freeway in rush hour, there are only really two reasons that a car would come to a stop. The first is that it ran out of petrol or gas; and the second is that it’s had a mechanical or electrical failure. I feel that both of these causes can be quite directly attributed to the stressed economic climate that is affecting everyone. The first is very straightforward: People, in their efforts to stretch their pennies as far as possible, are not filling up as often. They are trying to get as much mileage out of a tank as possible, and consequentially, some of them misjudge just how much they will need to get to work or to get home. They run out of fuel and cough, cough, splutter, splutter – they’re stuck on the side of the road.

While this is evidence of a slight lack of foresight, or trying to push one’s luck one too many times, the second reason has slightly more substance to it. For a car to break down suddenly, there is generally a very serious failure behind it. These serious failures can sometimes happen out of the blue, yes, but I’d say that you’d generally have an inkling that something is not right. In good economic times, when you’re relatively flush with cash, you would have your concerns checked out by a mechanic, and hopefully rectified before they develop into something worse. In tough economic times like these, though, people are obviously not seeing vehicle maintenance as a priority. So they miss a service or two, and try and ignore those worrying shakes and rattles, in the hope that they will go away by themselves. I mean, putting food on the table is more important, right?

The problem comes in, though, when your car does break down (and it will eventually if it’s not maintained – as much as we’d like to think otherwise, it’s still a machine). If you’ve reached this point, you know that it’s going to cost you an arm and a leg to get it going again. And the pain really kicks in when you realize that it would have cost you a lot less to simply have bitten the bullet and repaired it at the first signs of trouble. “But I didn’t have the money!” you exclaim. Well, you could’ve borrowed it, or found a way to make a bit extra to cover the repairs; as it is now, you have to borrow or find it anyway, and you have to get your hands on that much more.

This is just an example of the downfalls of short-term thinking, and how it can lead to never getting around to the things that need to be done. In this example, the short-term view of not wanting to take the hit at first means that the hit hurts that much more when it does come. But the principle applies to everything: I’ll start saving next month; I’ll reinstate my insurance when the economy recovers; my diet starts on the first; I’ll pay off my debt when I get my bonus – heard these before?

Do what needs to be done now: Don’t leave for tomorrow what can be done today.