DuPont Financial Analysis Model

DuPont Financial Analysis Model : A Process For Knowing Where to Spend My Management Time Tomorrow Morning After Breakfast

By

Kevin Bernhardt, UW-Extension, UW-Platteville, and

UW Center for Dairy Profitability

Our computer technology today provides wonderful opportunities to collect, manipulate, and process data including financial analysis data.  Sure, it gives a manager lots of numbers, but what do they mean in terms of where to spend my creative management time tomorrow morning after breakfast? 

There is no lack of ratios to calculate from financial data, each of which is a valuable piece of information to the manager.  The Farm Financial Standard Council’s sweet 16 ratios (recently expanded) have been a standard for years in helping farm managers evaluate their financials.  However over several years of teaching undergraduate students and Extension clientele I often found it difficult for people to wrap their arms around what the ratios were indicating and ultimately where to spend their valuable management time.  The challenge often led to indifference by the undergraduate students and a lack of seeing any value to go further by Extension clientele. 

The DuPont system for financial analysis is a means to fairly quickly and easily assess where the business strengths and weaknesses potentially lie and thus where management time may optimally be spent.  It is not the only nor the most thorough, but it is a fairly straight-forward and systematic means to drill back into the financial numbers to determine the source or lack thereof for financial performance.

A colleague, Gregg Hadley (UW-River Falls), summed up well the DuPont system in a recent article on E-Extension (The DuPont Analysis: Making Benchmarking Easier and More Meaningful, Updated June 10, 2009, http://www.extension.org/pages/The_DuPont_Analysis:_Making_Benchmarking_Easier_and_More_Meaningful):

If we are lucky enough to have the minimum number of financial documents needed to conduct a meaningful financial analysis (both beginning and ending balance sheets, either an actual accrual or accrual adjusted income statement, and a statement of cash flows), we are then inundated with pages and pages of intimidating numbers to sort through.

This gives many managers and advisers a justification not to give their financial records anything more than a passing glance. This is unfortunate. A good financial performance analysis should do more than inform about how a farm performed in the past. More important, it should provide the manager and adviser with insight regarding how to prioritize activities that will enable the farm to improve its financial performance.

The DuPont system has disadvantages as does any financial analysis system.  However, its advantage beyond simplicity of use is that it takes into account the major levers of firm profitability – efficiency, asset use, and debt leverage.

Anatomy of Profits

Before describing the DuPont system, consider the anatomy of profits.  The accounting equation is:

Total Assets = Total Debt + Total Owner Equity

As the accounting equation shows every penny of assets comes from one of two sources – that financed by debt (borrowed capital) and that financed by equity (the owner’s own money).  Assets can also be described by those that are capital assets versus short-term inventory or market assets.  Capital assets are longer-term investments (land, machinery, breeding stock, etc.) that are not sold themselves to make profits, but are put to work to produce marketable inventory that can be sold for profits (feeder cattle, eggs, etc.).  Inventory also includes inputs such as feed, seed, and fertilizer.

Businesses earn profits by mixing their labor and management with inputs and capital assets to produce goods for sale.  The DuPont system recognizes this recipe for profit-making and segregates it into three distinct components or levers:

1.      Earnings (or efficiency),

2.      Turnings (effective use of assets), and

3.      Leverage (using debt to multiply earnings and equity)

In the DuPont system one can drill back into these three levers to determine where profit performance is coming from and potentially determine where management time should be spent for improving profits.  Specifically DuPont measures:

1.      How efficiently inputs are being used to generate profits [Earnings]

2.      How well capital assets are being used to generate gross revenues [Turnings]

3.      How well the business is leveraging its debt capital [Leverage]

Figure 1 shows a graphic of the DuPont system.  It begins on the far right side with Rate of Return on Equity (ROROE).  High ROROE is the prize in the DuPont system.  ROROE is calculated as:

Net Income from Operations – Unpaid Labor & Management
Total Owner Equity

The financial manager can then drill backward to see where ROROE performance either is, or is not, coming from. 

Starting on the upper side ROROE, in-part, comes from how well the business is earning profits from its assets as measured by the Rate of Return on Assets (ROROA).  ROROA is calculated as:

[Net Income from Operations   +   Interest   –   Unpaid Labor and Management
Total Assets

It makes sense that the higher the ROROA the higher the ROROE.  In-turn, the ROROA comes from two components or levers of profitability. 

One is how efficient the manager is in turning inputs into outputs, or in a financial sense, how efficient the manager is in turning the gross revenue of dollars coming into the business into net profits that are kept in the business after all expenses are paid.  This is the “Earnings” lever and is measured by the Operating Profit Margin Ratio (OPMR).  The calculation is:

[Net Income from Operations   +   Interest   –   Unpaid Labor and Management
Gross Revenue

Interest is added back so that the measure you get is one that measures efficiency of operations regardless of the debt structure.   Debt structure effects will come into the system later.  In situations where there is unpaid labor and management it is deducted to recognize the value of the labor and management.  The more efficient you are in turning gross sales into profits that you keep the higher your Rate of Return on Assets and ultimately the higher your Rate of Return on Equity.

The second source of ROROE is how well you are using the assets of the business.  This lever is referred to as “Turnings” meaning how well you are turning assets into production and sales of product.  To use an extreme example, if you had a 300 acre farm (all tillable) that you left sit idle then your performance of turning assets into production and sales of product would go way down.  The “turnings” lever is measured by the Asset Turnover Ratio (ATO).  The calculation is:

Gross Revenue
Total Assets

The better able you are to use the assets you have to produce and sell product the higher the Rate of Return on Assets will be and the higher the Rate of Return on Equity.

The last lever is “Leverage,” which is also known as “Equity Multiplier”.  Before going further with the explanation of leverage, it is worth backing up a step and exploring the accounting equation again

(Total Assets = Total Debt + Total Equity).

Given this equation, which is true for every business, then any profitable return to the use of assets is a profit return to the assets financed by debt and to those financed by equity.  Equity is fairly straight-forward, if you invest $100 of your own money and earn $10 back then your equity has returned 10% (10/100).  For the return to debt it is a bit more complicated because you have to pay someone for the use of the debt – interest.  So, the question becomes whether or not the debt you have is returning a profit larger than the interest you have to pay for using that debt.  If it is then the leftover profit after paying interest is an additional return to your equity.  That is, if I’m paying 8% interest and my profit return on the debt is 10%, then I not only can pay my interest, but I have 2% leftover that I get to keep.  This 2% becomes and increase to my equity.  This is why the debt or leverage component of DuPont is sometimes called an “Equity Multiplier.”

It may seem an odd statement to make for some, but if you want to increase your ROROE then one way to do it is to increase your debt!  The trick is that the debt must be managed in a way that returns a profit greater than the interest rate.  If it is not then the equity multiplier still works, just in the wrong direction!

Ultimately the leverage lever is measured by the Debt to Asset ratio (D:A), which is calculated as:

Total Debt
Total Assets

For ease of the math in the model, the leverage lever can be expressed as:

Total Assets
Total Equity

The greater this ratio then the more the proportion of debt is in the mix of assets.  If the assets financed by debt are earning a return greater than the interest rate, then the higher the ratio the greater the Rate of Return on Equity.

Figure 2 shows the same DuPont model with the ratio measures.

Note, the interest rate adjustment in the ROROA box is the adjustment needed to return the cost of interest before measuring the Rate of Return on Equity.  Recall that interest was taken out when calculating the OPMR.

The DuPont system as illustrated allows you to identify where profit performance is, or is not, coming from in one or more of three areas.  Once identified then the next step is to drill back into the numbers that make up the ratio of concern.

For example, if the OPMR is found to be lower than the manager would like it to be then look at the numerator of the OPMR (net income from operations + interest – unpaid labor & mgt) to determine what might be the problem, particularly expenses.  Compared to your more profitable peers what are your labor, vet, repair, and other input costs? 

If the performance problem appears to be coming from a low ATO then the manager might drill back into the business assets to see how well they are being used.  Are there dead assets in the business (ones not being used to create product for sales), does the business have excess machinery capacity, or are there assets that are under productive (poor weight gain, breeding cycles too long, sickness, death loss, etc.).

If the debt structure is low, that is debt is not leveraging equity as much as peer businesses, then the manager might drill back and question how debt is being used.  Could additional debt be used to improve facilities, machinery, etc. that ultimately pays for itself in higher production and sales or does debt that is not productive need to be paid off (or perhaps the assets sold). 

As with all financial analysis systems the model is only as good as the numbers that go into it, that is, garbage in then garbage out.  Another valuable piece of information to have to evaluate DuPont is benchmarks of profitable peers.  There are general ranges for each of the ratios, but each industry and your size within an industry makes a difference as to what is “good” for the ratios.  Finally whether you rent or own the assets you use in a business also makes a difference in the interpretation of the ratios. 

Appendix A provides a brief example of using the DuPont model.

It is often said that management is part science and part art.  The DuPont system has both elements.  The ratio calculations are science and just a manipulation of numbers.  The art is interpreting the ratios and drilling back into where the ratios indicate there could be challenges and thus information of where to spend your creative management time tomorrow morning after breakfast. 

Appendix A

Brief Example (Adapted from an example from Texas Tech University) http://www.aaec.ttu.edu/faculty/phijohns/AAEC%204316/Lecture/notes/DUPONT.htm

Table 1. DuPont Analysis for Two Farms

	Farmer A	Farmer B
1. Operating profit margin ratio (OPMR)	0.30	0.12
2. Asset turnover ratio (ATO)	0.20	0.36
3. ROROA (1*2)	0.060	0.043
4. Interest expense to avg. farm assets	0.05	0.03
5. Equity multiplier	2.00	1.50
6. ROROE (3-4) * 5	0.02	0.02

Farmer A and Farmer B each have a 2 % ROROE.  However, the levers of the DuPont system indicate that the sources of the weakness are different.  Farmer A has a stronger operating profit margin ratio but lower asset turnover compared to Farmer B. Furthermore, Farmer A has a higher leverage ratio (equity multiplier) than Farmer B.

The weak ratios for each farm may be decomposed into components to determine the potential sources of the weakness. To improve asset turnover Farmer A needs to increase production efficiency or price levels or reduce current or noncurrent assets. To improve profit margins, Farmer B needs to increase production efficiency or price levels more than costs or reduce costs more than revenue.

The DuPont analysis is an excellent method to determine the strengths and weaknesses of a farm. A low or declining ROROE is a signal that there may be a weakness. However, using the DuPont analysis can better determine the source of weakness. Asset management, expense control, production efficiency or marketing could be potential sources of weakness within the farm. Expressing the individual components rather than interpreting ROROE itself may identify these weaknesses more readily.

Download this paper

Read More

10 Ways to Build Social Media Expertise Using Personal Web Projects

When Timex sponsored a Twitter party in late 2009, it leaned on the social media expertise of Stefania Pomponi Butler and her partners in Clever Girls Collective to deliver a conversation that would engage women consumers with the Timex brand.

But Stefania's social media smarts weren't born from a corporate campaign or formal training: this former marketing pro got her start in social media by blogging about life as an urban mom. The success of her personal blog brought forth paid blogging gigs, which turned into editing gigs and then production gigs. Eventually, she had enough experience to start her own company connecting big brands to online influencers. A personal web project turned into full-fledged social media career.

Many social media experts and professionals started their current careers like Stefania did, with a personal web site or project. As I reflected this week on a recent personal project that had me testing out new WordPress plugins, Twitter tools and Excel macros, I was reminded of how valuable personal projects are in building social media expertise.
 

If you're involved in social media efforts within your company, are trying to carve out a niche as a social media pro, or just want to understand what this new space is all about, personal web projects are crucial to honing your skills. Here are some tips for making your personal web efforts an effective part of your ongoing professional development:

Keep it personal. Choose a subject or focus that is completely (and I mean completely) unrelated to your work. That could mean creating a collection of nature photos on Flickr, a blog about local restaurants, or a Twitter roundup of the latest beauty products — unless you work for an ecological organization, a food distributor or, say, Revlon. It's great to have passions that intersect with your professional life, but if you do a social media project that is even vaguely related to your job, your employer (or their customers) may hold you accountable for the results. And that's not a safe sandbox to play in.

Be cautious. Personal doesn't mean intimate. If you're thinking about a project that involves your family, think carefully about the safety implications and especially before posting your kids' photos online. Until you are really fluent in social media, err on the side of caution by keeping private your family stories private or at least anonymous.

Start simple. Create your social media project on a fully hosted service so that you don't have to sort out the complexities of setting up your own site. WordPress.com , Flickr and Twitter are all good starting options.

Give yourself room to grow. Choose a platform that will let you extend your project in new ways and try out new tools. Get going with Flickr or Twitter, and you can explore a world of tools and applications that complement those services. If you start with a WordPress blog, you can move your blog onto a web host that gives you more control over your blog's set up.
 

Give yourself a budget. While you can do lots of great stuff for free online, you'll have more possibilities — and perhaps more fun — if you give yourself a modest budget. You might want to spend ten or twenty dollars a month buying stock images to illustrate your blog; pay for a service that gives you more information about your Twittering efforts; or upgrade your blog to a custom URL.

Go easy on yourself. The social web can be a great place to get support or enforce your commitment to a personal goal like losing weight, building your own log cabin or reading all of Proust. But if you focus on a challenge that is already daunting, you're less likely to stick with it. You'll find most of your energy is focused on sticking to your resolve, rather than exploring and learning.

Be a night owl (or an early bird). You'll learn the most from your social media experiment if you're prepared to make a few mistakes — installing widgets that don't work right, making design changes that look terrible, embedding multimedia content that doesn't display. It's a lot less scary to make those mistakes early in the morning or late at night, when fewer people are likely to be visiting your site.

Find a community. Explore the sites and web presences of other hobbyists (or experts) in your space to see what they are talking about and what online tools they use. Introduce yourself and comment on their photos, videos or posts — and encourage them to take a look at what you're up to, too.

Balance tech with content

Some people use their personal web projects as a chance to geek out and try specialized tools and software, and upgrade their tech knowledge. Others focus on the content — shooting the perfect video, writing the world's most articulate blog post, snapping the greatest high-speed photos. But you'll learn the most if you divide your attention between content and technology, and develop both your creative and technical skills.

Be prepared to own your project.

Even if you've created a totally anonymous personal project, assume that sooner or later you could be unmasked. Make sure that whatever you post online, you're prepared to live up to it at Monday's staff meeting.

Follow these guidelines and your personal web projects will become an effective and ongoing part of your professional development. Who knows? It may even become your full-time gig.

Written by Alexandra Samuel

Alexandra Samuel is the Director of the Social + Interactive Media Centre at Emily Carr University, and the co-founder of Social Signal, a Vancouver-based social media agency. You can follow Alex on Twitter as awsamuel or her blog at alexandrasamuel.com.

Read More

The Myths Behind Microfinance

Debate over the value of microfinance in the developing world appears to be long overdue.

Recent revelations about the role of Nobel Prize winner Muhummad Yunus in the alleged misuse of $100 million by the Grameen Banks (and the cover-up of that misallocation) have begun to provoke overdue discussions on the value of microfinance in the developing world. Arguments against microfinance center around the claim that it is a development strategy increasingly forced on the poor, and that those who are claimed to benefit from it the most--poor women--are actually its chief victims. Critics have long sought a platform to reveal the weaknesses and explode the myths supporting microfinance.

 
The first myth is that microfinance requires no collateral. That is nonsense. Microfinance group leaders and NGO field officers take control of all the household assets of the borrower (land, home, jewelry, equipment, food reserves, animals, remittances, savings, furnishings, etc.), and force borrowers to convert those assets to cash if there is the slightest threat of default of any borrower within the group. Peer-group pressure is combined with the threat of being stripped of essential belongings, and becomes a powerful disciplinary. Borrowing households lose control over physical assets, the ability to determine its pattern of consumption, and use of labor, ceding them all to the community and the microfinance lending agency. Given a model like this, it is no surprise that those viewed as potential defaulters are harassed not only by the lenders, but by their peers, sometimes to the point of physical violence and suicide as has been the case in India.

The second myth is that microfinance empowers women. Women are often the target of microfinance programs, but they do not benefit in proportion to their numbers. A Grameen Bank loan officer in Tangail explained this in no uncertain terms: "Women are willing to make any sacrifice to repay the loans, even if it means sacrificing their own personal consumption. Don't you know that all mothers do that? And it is easier to control women than men. Men could easily disappear after borrowing money, but women stay at home to take care of children." If a woman defaults, it's considered a failure of household management, and brings shame and dishonor on the families. Lenders mobilize the same forces that already oppress women, taking advantage of the inherent inequity of gender roles to apply peer-group pressure. This worsens, rather than improves, the situations of poor women. Children also suffer. In Bangladesh, many children drop out of school to assist their parents in making weekly loan repayments.

The third myth is that microfinance provides low-interest loans on reasonable terms. The nominal interest rate charged by NGOs is often much higher than that of local money-lenders. Real interests are even higher because group leaders and NGO officials withhold a percentage of the total loan amount, while at the same time charging interest on the full amount, in addition to the various fees and compulsory savings program. Nor are NGOs flexible in terms of repayment. Money-lenders regularly grant extended grace periods and often accept payments in kind. Microfinance fails to take the money-lenders out of the equation, and money-lenders regularly supplement NGO loans as well as functioning as their guarantors. This ensures that the wealthiest community members will retain financial control over the poor.

The fourth myth is that loan repayments correspond to increases in income and sustainable economies. They don't. NGOs don't care where their borrowers invest, and productive local enterprises are often undermined by cheap imports, indicating conflict between the theory of pro-poor microfinance, and the reality of free-market policies. The unsustainable nature of microcredit is evident in ever-higher rates of loan defaults. Far from making NGOs self-sufficient, and covering all their costs, gains from microcredit tend to be used to pay above-average salaries for NGO employees and expensive overheads. Donor organizations describe this as "credit pyramiding," and NGOs resort to dubious practices and oppressive methods to cover up the shortfall, including using donated funds to cover losses, and moving money around in and between organizations.

Micro-finance can only be considered a temporary measure. It does not cure the problems of poverty, make communities self-sufficient, or empower women. It does provide an attractive cover for states and donors who wish to rationalize de-funding state social and economic programs for the poor, and allocating resources to support high-growth industries for the benefit of the rich. Feminists, especially, should be aware that their rhetoric has been hijacked by the very institutions that oppress women and enforce gender inequality, and that have increasingly feminized poverty. 

More than micro-loans, what the poor need are investments in health, education, and the development of sustainable farm and non-farm related productive activities. Donors have decreased investments in health and education in favor of microfinance, and NGOs have been forced to adopt microfinance as a path to their own financial self-sufficiency. But microfinance cannot compensate for the decades of privatization and reduction of state investment in the public sector. Nor can borrowers meet larger social and economic needs through their meager incomes, so the end result is that the poor once again pay the price for the inadequacy of national and international institutions.

In the end, the microfinance industry looks less like aid, and more like the export of global capitalism. Microfinance demonstrates the creativity and power of neoliberal capitalism, using the misery of the poor to further the interests of the global financial system. It is time for the international donors to review the microfinance industrial complex to ensure microfinance will not exploit the poor and not substitute for investments in education, health and institution building. 

Writtet by  Jude L. Fernando

Source:http://www.forbes.com/

Jude L. Fernando is an associate professor of International Development Department of International Development, Community, and Environment, at Clark University, (Worcester, Mass.) He is the author of "Microfinance: perils and prospects" (Routledge 2006), and "The Political Economy of NGOs: State Formation in Sri Lanka and Bangladesh" (Pluto Press, April 2011).

Read More

Link Building for Bing Rankings: Dos and Don'ts

It's easy for businesses to get caught up in Google's expectations for their sites, when trying to market through search. That's certainly a wise thing to do, considering Google dominates the search market by a huge margin. Still, there are other search engines that people are using, and it is also wise to make sure your site is performing to the best of its ability in those too.

I'm obviously talking about Yahoo and Bing, but Yahoo's share is declining, while Bing's is gaining. Furthermore, if the deal between Microsoft and Yahoo goes through, Bing search will be talking over Yahoo anyway. 

We don't hear as much about what Bing wants out of a site for rankings, but Rick DeJarnette of Bing Webmaster Center has shared some dos and don'ts of link-building for Bing. Not surprisingly, a lot of his advice for honoring Bing's policy, does not differ too much from advice that Google would give you. It is, however, still always nice to see how they feel, just to clear up any possible confusion.

Like Google, Bing places great emphasis on quality links to determine its rankings. "Just don't make the mistake of believing it will result in instant gratification. Successful link building efforts require a long-term commitment, not an overnight or turnkey solution," says DeJarnette. "You need to continually invest in link building efforts with creativity and time."

What Not To Do

DeJarnette shared a list of things that you should avoid in your link building efforts, if it is a good Bing ranking that you are after. Here is what Bing says will get your site reviewed more closely by staff:

1. The number of inbound links suddenly increases by orders of magnitude in a short period of time

2. Many inbound links coming from irrelevant blog comments and/or from unrelated sites

3. Using hidden links in your pages

4. Receiving inbound links from paid link farms, link exchanges, or known "bad neighborhoods" on the Web

5. Linking out to known web spam sites

"When probable manipulation is detected, a spam rank factor is applied to a site, depending upon the type and severity of the infraction," says DeJarnette. "If the spam rating is high, a site can be penalized with a lowered rank. If the violations are egregious, a site can be temporarily or even permanently purged from the index."

What To Do

DeJarnette also shared some tips for getting more quality links. Following are Bing's tips for effective link building (paraphrased):

1. Develop your site as a business brand and brand it consistently

2. Find relevant industry experts, product reviewers, bloggers, and media folk, and make sure they're aware of your site/content

3. Publish concise, informative press releases online

4. Publish expert articles to online article directories

5. Participate in relevant conversations on blogs/forums, referring back to your site's content when applicable

6. Use social networks to connect to industry influencers (make sure you have links to your site in your profiles)

7. Create an email newsletter with notifications of new content

8. Launch a blog/forum on your site

9. Participate in relevant industry associations and especially in their online forums
  
10. Strive to become a trusted expert voice for your industry, while promoting your site

Most of the stuff DeJarnette shared is nothing any savvy search marketer is not already aware of. That said, there are clearly plenty of online (and offline for that matter) businesses out there that don't have savvy search marketers on the payroll. It can be quite helpful when a search engine itself lays out what to do and what not to do to help webmasters get better rankings.

 source: http://www.webpronews.com/

Read More

Marketing Tips to Promote Your Business in 2010

After a tough 2009, the majority of small businesses have high hopes of emerging from the sales doldrums in 2010. Some 86% of small business owners expect 2010 revenues to be equal to or higher than 2009 figures, according to research firm Ad-Ology. However, despite that glimmer of confidence, most small business owners don’t plan to increase their marketing budgets in the near term. In a February 2010 survey of small business owners called the Merchant Confidence Index, 46% of respondents said they expect their marketing expenditures to remain stable over the next three months, while just 29% expected to increase marketing spend.

Just because you don’t have a lot of extra money to spend on marketing and advertising doesn’t mean you have to sit back and hope for the best in 2010. In fact, there are many free online marketing methods small businesses can use to connect with potential customers. Below are eight proven marketing strategies you can use to boost customer acquisition and increase sales in 2010 – which will cost you only your time.

1.       Create a simple, clean website. There are dozens of self-service website creation services, such as Weebly, BlinkWeb, and Squidoo, which allow non-technical users to create simple, functional sites for free. Your site should include key words about your business so that people looking for your products or services can find you.

2.       List your business on all free directory sites available to you. MerchantCircle, Google Local Business Center, Angie’s List, Yahoo! Local, Yelp, YellowPages.com, SearchLocal, and SuperPages are some of the online business directory services that allow businesses to create a free listing. If the site already lists your business, you can “claim” it by adding more details to the listing, such as your company website URL, a map, phone numbers, or business hours.

3.       Use email to stay in touch with your best clients/customers. You likely already have the email addresses of your best clients or customers, so use them! An email newsletter is a great way to connect with your loyal customers. Create an email that includes a quick update on new products or services, and perhaps a printable coupon or promotional code. You can also add an image, a link to your website or a video you’ve posted on YouTube, or a link to you’re a business directory page that includes lots of positive customer reviews.

4.       Create business pages on Facebook, Twitter, and other social sites. Social networking is here to stay, so your company needs to join the fray. Start by creating a Facebook business page and a Twitter account in your company’s name; both are free. If you have video content about your business, create a free “video channel” on YouTube, while B2B companies should also create a LinkedIn profile that details your business profile, lists key contacts, and provides information about your products and services. Make sure to encourage customers to sign up for your pages by printing your Facebook address and Twitter handle on all business materials.

5.       Get creative with promotions. Everyone loves a bargain, and people are increasingly price sensitive after recently living through one of worst recessions in decades. Try offering different types of promotions: downloadable and printable coupons people can bring into your store or office; online coupon codes redeemable for a one-time discount; a 10%-off coupon for signing up for your email newsletter or Facebook Page; a refer-a-friend discount; or a discount for writing a review of your business on a directory site like Yelp. You can promote these discounts via free or inexpensive advertising options: your email newsletter, in-store banners, Twitter, and Facebook.

6.       Search online for all businesses like yours. Use Google, Twitter, Facebook, and other search engines to find similar businesses in your city and in other areas to get a sense for what marketing tricks your competitors are using. Check out their social networking pages and their websites, and try searching for their latest promotions. Sign up for their email newsletters. Armed with this free competitive intelligence, you can see what’s worked for companies you admire, and fine-tune your own marketing strategies to compete with them.

7.       Show your expertise. There are many sites where experts can provide answers to people asking questions about anything under the sun. Yahoo Answers, MerchantCircle Answers, and LinkedIn Answers are some of the most popular question-and-answer sites. Search all of these sites for questions related to your business or service expertise, and then provide answers to them. Offer thoughtful, expert advice people can really use; that’s great PR for your business in and of itself.

8.       Create some online marketing videos. Most people prefer to 'see' something rather than 'read' something – so create some videos for your business! There are several sites, such as Jivox and Spotzer, where you can create simple marketing videos for free using stock footage, then add your company’s URL, phone number, address, and clickable coupons. You can also shoot marketing videos yourself using an inexpensive hand-held camera, and then polish them with free online editing tools like JayCut. Post your videos on your Facebook Page and on YouTube, and use them on your website and in your email marketing campaigns.

Small business owners are a creative and hard-working bunch, used to doing a lot with few resources. In 2010, take the time to invest in the growth of your business, implementing a few creative marketing strategies that deliver real results in return for just a little elbow grease.

Read More

Building a Successful Blog

It has been established that these days many businesses are using blogs to connect with their customers and promote their businesses. But after figuring out the nuts and bolts for actually putting together a blog (e.g., content to include, software to use, design, who will be administrator of the blog, how to get the word out about your blog), there are a few not so small things you might want to know going in.

Work, Work, Work

First and foremost you need to know that in order for a blog to be fresh, dynamic, and effective, and thus have a reason for being, putting together and maintaining a blog takes more than a few minutes of your time. Even the most modest of blogs, those worth their salt anyway, require a serious commitment, if not every single day then at least several times per week. An unattended blog, filled with stale, outdated information, whose last item is three months old could make a customer wonder what’s the point?

Ideally, a blog ought to be updated with fresh content every single day, and creating a thoughtful, effective post will take anywhere from 20 minutes to an hour, depending on the level of detail and amount of data included. (Managing comments on the posts and updating information in your posts require even more time.) But at the least, a blog ought to have a minimum of three posts per week.

As with any enterprise, blogging requires work, and it is important to know that going in. If you’re going to make a blog part of your broader marketing plan, you have to give it the attention it requires; and if you’re stretched to the point that you cannot, you may want to rethink even launching one in the first place.

Prepare for Pettiness

It is important, naturally, for a corporate blog to include a “comments” feature under each posting. After all, the point is to forge a “community” that brings in your customers. But you must be prepared for snarky, petty, and even dangerously inflammatory and offensive commentary. There are many people who do not respect playing by the rules, that is, being honest and forthright about making an opinion known, but without being childish, spiteful, or incendiary, even when they might hold strong opinions about your business or a topic being addressed on your blog.

Most blogging software enables the administrator to screen comments before they’re actually posted to the blog, enabling you to head off inappropriate comments. It is essential that you set up your blog to see comments before they are posted. While it does take away from the spontaneity and excitement of a blog, it can save you the frustration, and potential hassle, of having your blog come off like a junior high school slam book rather than a vital, spirited tool for connecting with your customer base. You will rest easier by doing this simple thing.

Add Value with Features

If you check out a range of corporate blogs, you will find that the most interesting, engaging ones are those that include not only the standard corporate information, daily postings, and commentary but also a lot of editorial features that make it worthwhile for customers to visit. An easy feature to create is a blog roll, a listing of anywhere from six to 20 links to your favorite sites and other blogs and ones that are relevant for your customers.

Widgets are also an engaging, attractive feature, with a range of topics available, from those promoting information from and linking to news sites such as CNN and the New York Times to those inviting your customers to opt into following you on Facebook or Twitter. You can even create a widget for your own blog, which customers can download to their desktops, reminding them to visit you often. One of the very best sites for widgets, and a very good place to start, is Widgetbox, a quick, easy, and free source for thousands upon thousands of widgets.

Read How

There are, of course, multiple resources providing tips and tools for blogging. One of the best and most popular right now is The Huffington Post Complete Guide to Blogging, a book produced by the creators of one of the most successful blogs ever. Arianna Huffington’s ambitious site focuses on news, politics, business, and culture, and features well-known writers from politics, entertainment, and more, writing engaging copy.

Read More

TIPS MENGEMBANGKAN DIRI MENJADI PRIBADI YG POSITIF

Seandainya nasehat perbaikan sendiri gratis ini menyebar dan terdapat dimana saja, maka tidak akan ada masalah berkaitan dengan hidup, kebahagiaan dan sukses. Akan tetapi sekali lagi, ini adalah hidup. Dan hidup tidak bekerja dengan cara begitu. Apa akan kamu lakukan jika kamu terjebak di lingkungan yang tidak kamu inginkan? Bagaimana jika kamu sakit dan bosan terhadap pekerjaan kamu? Apa yang dapat kami lakukan untuk  memecahkan dilema ini? Ini mungkin sudah saatnya mengambil inspirasi dan memotivasi tindakan yang dapat membuatmu bertahan dalam situasimu sekarang dan menjalani hidup sperti yang kamu selalu cita citakan.

 

Ini tentu saja tidak mudah. Kamu akan harus keluar dari wilayah-wilayah nyaman untuk menemukan potensial dan kesempatan yang menunggu untuk kamu temukan. Kamu harus menaklukkan rasa takutmu dan menghitung resiko. Kamu harus tetap fokus dan tekun meskipun berbagai kesulitan akan kamu hadapi.

Sukses tidak datang dengan mudah. Ini membutuhkan perasaan, semangat dan waktu. Pengalaman juga faktor. Pelajaran yang kamu peroleh dari setiap orang menjadi pondasi kamu.kamu harus bekerja lebih keras, gali lebih dalam,  dan korbankan banyak untuk mencapai ambisi kamu. Tetapi, kamu jangan membenci dunia dan berpikir buruk bila kamu menghadapi situasi sulit. Hanya ingat hukum atraksi. Jika kamu benci dunia, dunia juga akan membencimu

Apa yang dapat kamu lakukan? Di bawah ini beberapa nasehat gratis yang dapat membantu kamu bila menghadapi situasi sulit dalam hidup. Ini juga dapat dijadikan penunjukmu untuk meningkatkan hidup.

1. Belajarlah mencintai dirimu sekarang. Lihat semua sisi positif hidup. Antusias. Cintai bos kamu, teman sekerja kamu, keluarga kamu, teman-teman kamu,  dan bahkan orang asing yang kamu jumpai di jalan.  Ini mungkin tidak mudah,  tetapi tidak ada yang tak mungkin dilakukan dengan kekuatan keinginan yang luar biasa. Hanya jangan sampai jatuh cinta terlau banyak sehingga kamu melupakan mimpimu. Cintai,  tetapi usahakan berpegang pada kenyataan.

2. Keseimbangan adalah kuncinya. Mimpi dan ambil aksi positif yang menggerakkanmu menuju tujuanmu. Ambil satu langkah pada waktu yang sama. Sementara kamu secara perlahan memulai perjalanan panjang menuju sukses, sabar dan tetaplah terus bersemangat. Jangan terlalu tergesa gesa sehingga melupakan bagaimana cara menikmati hidup itu. Hargai setiap keindahan yang kamu temukan di perjalanan.

 Suatu ketika, kamu akhirnya mencapai apa yang selalu kamu rindukan. Tetapi bila hari itu datang, jangan pernah meremehkan orang orang yang pernah meremehkan dirimu. Ampuni dan lupakan.  

3. Tetap sederhana. Jangan mengkritik orang lain bila kamu merasa lebih berhasil daripada mereka. Cobalah membantu mereka. Berikan pengaruh positif mu ke dalam diri  mereka. Bila kamu memberi, kamu akan menerima hasil yang sama atau lebih besar.

 4. Apakah kamu siap memulai perjalanan? Mulailah dengan keberanian dan keinginan meningkatkan hidup kamu. Bertahan dan melewati ini dengan keteguhan, antusias,  dan berpikiran positif. Selesaikan ini dengan semangat menggebu untuk  berprestasi dan dengan keinginan untuk  membantu orang lain agar berhasil juga.

Ada banyak nasehat perbaikan sendiri lain yang akan memperoleh sebagai kamu merasa cocok dengan hidup harian kamu. Ingatlah bahwa kamu tidak sendirian. Ada orang lain yang mengalami situasi lebih sulit dibanding yang kamu hadapi sekarang.

Read More