Community Economic Development Fund

Articles and podcasts to help plan and operate your enterprise.

With unemployment low, can you avoid turnover?

by Frederick Welk
CEDF Business Advisor

Most of CEDF’s borrowers have five of fewer employees. Businesses of this scale are often in a circumstance where the available jobs don’t come with an array of fringe benefits, insurance and perks. Unlike a Silicon Valley giant there’s no employee cafeteria with free food, a masseuse and child care on site.

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Let your fingers do the walking (the hard way)

Most every business wants to be easily findable on the internet.  As the internet has sophisticated, this chore has gotten its own name – search engine management (SEM).  One branch of this discipline (but not the whole effort) is search engine optimization (SEO) which is perhaps the more widely known acronym.  Another branch on the SEM tree, and one that is also very important to helping a business be found on the internet is local search. 

Happily managing local search doesn’t require nearly as much technical knowledge or marketing training as SEO.

Local search consists of the hundreds of (but usually only a couple dozen important) directories that point internet users toward your business.  We’re not talking about the search engines such as Google or Bing, but directories – yellowpages.com, orangepages.com, lemonpages.com, tangerinepages.com etc. Actually, Yahoo, Facebook business listings (not your page), Yelp, MapQuest, Superpages, Citysearch and similar sites are the big players.

Having correct listings (obviously) is important. This used to be very simple a few decades ago. There was one phone book and you either bought an ad or satisfied yourself with a simple listing of your phone number. ("Let your fingers do the walking through the Yellow Pages" was the jingle). It became more complicated when deregulation brought an age of a half dozen competing phone books, mostly used as doorstops. The smart phone era reduced printed directories but an industry of online special directories blossomed.

How does a business get listed in 50 or 100 or more directories? No effort is usually required for an established business because there are about five major data service companies that feed the ecosystem of online directories with information. So, if you want to establish purplepages.com, the information is available for licensing. You can read about this whole environment here.

The problem for a local business comes in when errors have crept into your listings. Perhaps another business had your phone number previously but the company is still in business somewhere else and the directories are not completely updated? Or what if your operation moved and the addresses aren’t updated everywhere?  What if your business name has variations, abbreviations, shortened versions (left off the Inc., LLC, etc.)?  Computers don’t necessarily deal well with data that’s not an exact match. The artificial intelligence era may be coming but it’s not here yet.

Fortunately there are numerous tools that business owner can use to run a free scan of the local search jungle to see how they are listed. Here’s my favorite simply because I’ve used it frequently for clients. Here’s another from a well-respected SEM company.

I recommend every business owner conduct a scan of their local search presence. The owners of these scan tools naturally have something to sell you related to fixing incorrect listings. My first inclination is that there is no substitute for elbow grease in scrubbing a shine onto your internet directory listings. If you go through the trouble to “claim your business” on all of the major directories plus Google My Business and on the Bing equivalent, you’ll have better results. The various directories let you add photos, videos, business and product descriptions, listings of business hours, and more. But the formats and the variety of information varies considerably. It’s like setting up two dozen social media pages. This might sound daunting but knock one or two off every week and within the year you’ll have squeaky clean listings on (whatever you deem to be) the most important directories for your industry. I don’t think an automated web service can effectively do this for you for $29.95 a month or whatever.

And pointing several dozen authoritative websites toward your own website is a plus for your SEO. But that will require an entirely different article to explain.

-- Frederick Welk
CEDF Business Advisor

Do you have the right Key Performance Indicators?

Key Performance Indicators or KPIs are a staple of business, especially in corporate life, and I’ve read several articles quite critical of the practice because big companies have a way of overdoing it and measuring aspects that distort larger truth.

This hardly ever happens in a small business. The usual problem is that the business owner doesn’t have enough accurate, timely and relevant information to make good judgements and expedient decisions. In some companies the problem is not conducting competent up-to-date bookkeeping. If you don’t know, for example, how much money you are owed and by whom, you might find that very inconvenient, especially when you don’t know how much you owe and to whom.

Objectively, bookkeeping should be an easy problem to solve. Turn it over to a competent professional.

But there are more stars in the sky to track than those that make up basic accounting measures. Each industry has its own special elements that need attention. If your business uses some kind of application software it might provide these KPIs for you from a suite of reports. I have a client in a medical profession who employs this application to run office functions and track clients.  But, giving due attention to the rich information in the database requires curiosity and an investment of time to make the most of the tool.

Other kinds of businesses have to manually track the important stuff and possibly give creative thought to what should be tracked as a KPI. Knowing what more sophisticated peers in one’s industry do can be very helpful.

As an example, a retailer wants to know not just sales totals but average sale, customer counts by period, number of items purchased per transaction, days of inventory, inventory turn, sales dollars per payroll dollar and a many other similar stats. It is certainly possible to run a store (at least for a little while) without knowing any of these things.  But eventually a reckoning will come to the ignorant and unobservant.

This article from the developer of QuickBooks lists some popular financial KPIs.

The top seven items they tout sound important, but some are more relevant for some businesses than others. Inventory? Not for a service business.  Accounts payable turnover? Not for a business in an industry where payment terms are cash and carry.  One really has to study what dials and gauges on your dashboard (sorry, corporate speak) are vital. The best KPIs are the ones that help you spot trouble and attract necessary attention that you might be unlikely to offer otherwise.

I favor this article’s treatment because it outlines the reasons you should develop KPIs, even those that are nonfinancial but more operational in nature. The publisher is another small business financial software company, Xero. Among their recommendations, make sure your KPIs are as follows:

  • Relevant
    The best metrics are those that have the most impact.
  • Balanced
    Measure short and long-term KPIs.
  • Understandable
    Everyone in the business should know what the KPI means.
  • Shared
    Everyone in the business should know why it’s important.

Business isn’t only about numbers, but just like in sports, measuring the right things is a path to improvement.

-- Frederick Welk
CEDF Business Advisor

 

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