Money Rant

By Ki Gray

 Over the last year the US, once flying high, has fallen and face planted into a somewhat ugly recession. For people with steady jobs the fear is of course the dreaded pink slip. But as long as they can keep their jobs their paychecks in most cases will remain the same. For small business owners a recession is often felt in the pocketbook. With less people buying their goods and services their revenues and profit margins can start to sink. And it can be painful for a number of reasons.

First many business owners have an emotional attachment to their business. When the business starts to flat line its hard to readjust to the new realities of your surroundings. If you are a restaurateur it might be hard to scrap plans for opening a new location across town even if the economic realties of the market make it clear that continuing ahead with previous plans is illogical. The second difficulty is that it’s hard to readjust ones life to deal with a lower take home pay. So while a small business might see a 20% drop in revenue that could translate to a 40-50% drop in profits. And while you might have lived on a smaller revenue 10 years ago it’s hard to go back to that. Living without regular out of states vacations is one thing going back to that point is even more difficult. And these somewhat harsh realties are what drive people to look for something, anything that can restore their business to its previous health and prosperity.

First I want to point out that in some cases advertising in a recession can be a wise move to increase market share and take advantage of a bad market. But more often what I see is this.

“Our revenues are way down”

“That’s horrible”

“Let’s spend a ton of money on advertising and hope we can put this behind us”

The problem is that the difficulty for this business is not that they didn’t spend enough on advertising last quarter. The problem is that we are in a world wide economic depression caused by billions of crappy loans real estate loans given out over the last few years. And yes everything is interconnected but putting out more ads for a local restaurant is probably not going to change this.

Simply put sometimes business owners make asset allocation decisions based on emotion instead of their current economic realty their business exists in. A few reasons that increased advertising might be a bad idea for your business.

1) The number of potential customers is decreasing

2) In many industries your competitors are increasing advertising to “spend their way out of a recession”

3) Increased advertising and decreased customers is a bad market to ramp up your advertising budget

4) Spending more on advertising can mean advertising in new venues. Often when testing new venues you can wasn’t a lot of money discovering mediums that simply don’t work for your business.

5) You can increase your expenditures and your cash burn rate. So basically the economy might eventually turn around but your business might not be there to see it.

Ok so if the answer is not doubling or tripling your advertising what is the answer? Here is my advice

1) Cut Expenses that are not needed. Comb through your budgets for extras you added during better times but are not needed.

2) Keep current advertising that is working. Whatever is currently providing you business I would stick with.

3) Cut advertising that is not working.

4) Adjust

Number 4 is probably the most difficult but important. If ones business is affected by the recession (and most are) it might be a good idea to simply accept the possibility of a reduced monthly income for awhile. I am not saying people should give up on their business or not attempt to increase profits. But during a recession it might be a good idea to keep working to achieve higher goals but at the same time when you are doing your monthly personal budget accept the possibility that a weakened economy often results in less customers and lower revenue. This means if you planned on buying a new car or taking an extra vacation it might be a good idea to change those plans.

In the end by operating in a logical manner a business can survive a recession and hopefully be in a position to flourish once the economy recovers.

Ki lives in central Texas. His website provides a guide to Austin Real Estate it also contains a search of the Austin MLS and updated information on Mortgage Rates.

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How To Succeed In Selling Insurance
By Kuser3

 The advantage of an insurance lead is that the salesperson will be speaking with someone who had at least indicated some interest in the idea that will be discussed. This means it will not be an uphill battle from the start, and there may be some common ground on which to build. Common ground is important in any sales situation.

The more important question to ask is how does a salesperson acquire an insurance lead? A mail campaign will usually draw less than one half a percent in responses. That means that for every two hundred pieces mailed, you will get back one lead. This can be improved upon with a follow-up phone call. The mail piece has to be easily readable and must call for action. The phone call can set a fire under the prospect if it is handled correctly.

Working any sales job from leads is always better than pure cold calling, as the sales call is always with somewhat interested parties The second advantage is because the prospect has shown some interest; you have reason to believe they will listen to your pitch for at least a few minutes. A non-lead sales presentation has none of these advantages. Cold calling in person and cold calling on the phone are time consuming activities that take away from sales time.

Insurance leads from a client to a referral have a significant advantage in that the referral at least has the person who referred them to you in common with you. They may just be curious why their friend referred them or they may be very interested if they respect the referrer. This kind of insurance lead is one of the best that a sales rep can obtain. Insurance lead referrals are like finding gold in the streets.

Cold calling is the process of approaching individuals as prospective consumers of a product. This process is typically performed over the telephone and can be performed by individuals representing a number of different products or services. One of the most effective fields of cold calling is for an insurance lead. There are many different types of insurance that can be offered, ranging from life insurance to car insurance to home insurance. Calling individuals in order to find insurance leads will typically result in conversations that will make the representative aware of what types of insurance most people have, and what types of insurance most people are lacking. These phone calls are done in order to generate information to be used by representatives of insurance companies which can be used in order to create an informational template.

Research is very important when a representative begins cold calling. An insurance lead can result in a big payoff for the representative, but it is important to make sure that the insurance lead is fully utilized. Insurance leads can be used to create a great basis for a database in order to keep companies informed when it comes to what types of insurances are popular and which types are not being used by many people. This information can then be processed to the benefit of insurance companies and employees who are trying to make money based on a commission. It can also be used as a very simple means of generating information for marketing purposes. Companies can use these leads in order to figure out what direction the company may want to go in. Every insurance lead is important, whether you are cold calling or obtaining one in another way.

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