Strategic Planning Using Financial Models

Strategic Planning Using Financial Models

Uncertainty is a part of making business plans. But this should not stop you from creating strategic plans. This is where financial modeling comes in. Financial models do not make the future more predictable but it does help you choose between various options and prepare your business to navigate twists and turns as you implement your strategic plan.

What Is Financial Modeling?

Financial modeling is the act of building a conceptual framework that depicts where a business’ financial situation will be at some period in the future. It is based on real world information gathered from financial statements and market research.

When done correctly, a financial model considers all areas of a business’ financial performance and generates a three statement models, namely, income, balance, and cash flow . It uses clear, logical, and defensible assumptions in order to account for changes in business activity.

Who Should You Use To Prepare A Financial Model?

A financial model is a tool for your business that will be used to aid strategic planning. The person creating your financial model needs to have a strong understanding of accounting fundamentals and financial statement analysis, and ideally has knowledge of your industry.

What Happens After Creating A Financial Model?

While financial modeling can help a buyer feel more comfortable with your growth projections, it is only the first step in this process. You will want to use your financial model to determine the current and projected value of your company to see if it meets your goals. Next, you should detect areas for improvement or investment in your business, and develop a strategic plan for making this all happen.

Make sure to keep records of everything that goes into this process because buyers want to know how close you came to achieving past projections, what actions you took when you deviated or exceeded projections, which members of the leadership team were essential to this process, and how they can take your business to the next level.

Financial model can be used to develop and enhance strategic planning initiatives. It addresses five components: determining if your business’ value is where you want it to be, revising projected vs. actual results, finding opportunities for improved performance, developing action plans to achieve results, and setting the current organizational structure to reflect your business goals.

Why Should You Regularly Update Financial Models?

It is a foregone conclusion that your financial model will differ from what actually happens as time passes and conditions change. And that is why it’s critical to update your financial models and overall strategic plan on a regular basis. Any deviations from the model must be taken into consideration and actions must be taken to correct the issue.

Tips To Clinch More Deals

Tips To Clinch More Deals

Following a set playbook might make it even harder to get sales, find new clients or hit targets. With the changing environment businesses need to be dynamic to keep up with the demands of the target audience.

Given below are some tips on how you can effectively sell your product or service repeatedly.

Social Media Is Important

Using social media platforms only for your personal life is naive especially in an era where people turn to the internet to find information regarding a person or a business. Your social accounts must contain information regarding your personal life and your business. Strike a balance between the both these aspects.

Remember to stay away from politics as you are dealing with a large and varied audience. Stay away from any form of negativity and post helpful articles and videos. Always stay consistent and this will bring in more people.

Case Studies And Feedback

Providing proof or evidence has become highly important in today’s world. People often claim to be experts and pretend to be the best. Clients often need evidence and customers today perform a fact checking before they even approach a company.

This is where collecting feedback becomes important. Ask your customers to provide you with an honest review of their experience with your company.  Collect their photos and post their feedback and reviews on your website, blog and social media. Such a case study will help you stand out in your field.

Pricing

People believe that higher prices mean better clients and higher profits. The problem is unless you are providing a high end service and you are a high end brand you cannot charge a really high price.

You need to charge the right price considering your product, your brand, your presentation and the overall value of your work provides. When you are just starting out it is ridiculous to set a really high price. But overtime you can build up your brand and through research you can raise your prices.

Charging the right price at the right time is key in sales. You should align your price with your level of business.

Presentation

Always be at your best and build a solid positive reputation regarding your company. Positive reviews and a brand name will bring in more clients.

Consider the way you are projecting yourself to the outside world. Study what you post on social media. Be aware of social problems and get involved in causes that are dear to you. Be a socially responsible organization that is known for its employee welfare, customer service and overall reputation.

Consistency

Consistency is the key to success. Keep your social media up-to-date and also constancy meet clients and set up meetings. Follow ups is also important. Even though it’s a slow progress, keep moving down the sales pipeline.

With persistent efforts you will see the desired results. Keep doing your best and improve your business process and operations along the way to become the best in your market.

Are Multiple Choices Always Good?

Are Multiple Choices Always Good?

It is often believed that more choices are better. Businesses believe in offering a variety of products ranging in colour and models in the hope that it will attract customers. It is easy to believe that more options and freedom of choice make customers happy but this is far from the truth.

Choices Are Overwhelming

When you give people a multitude of options they become overwhelmed. If at all they do make a choice, they often contemplate about what they had to “sacrifice” or not choose when they made their decision. They wonder if a different decision would have made them happier. This leads to unhappiness and never being fully happy with their final choice.

This applies to buyers as well. When you offer more choices to a buyer, chances are higher that he will not buy anything. Too many options lead to anxiety and inevitably, inaction.

Making a decision is a mentally stressful and emotionally taxing process. Considering the varying factors, while making a choice, makes the entire process even more difficult. That’s why buyers find it easier to say a no than saying yes to any one of the options.

Choosing Should Be Easy

Make the entire buying process simple by cutting down your offers. Give your buyers single choice. It should be whether they should buy something or not. In every scenario you must ensure that the decision to purchase is made simple, easy and quick.

Eradicate and remove all unnecessary factors that might prolong or distress the customer. It most cases, it the vast number of options that scare away potential customers.

Simple Yes Or No

Simplicity of choices must be seen even in your marketing and sales messages. Let people make a simple choice within a limited time period.

This does not mean that you offer a single product every time. Consider your target audience and their budget and income. The idea is to provide three different levels of service to accommodate people with varying budgets and needs. This is also called “Olympic Factor Pricing.”

This is especially important when you are selling high end or costly items. It need not be taken into consideration with cheaper products because more products only complicate the process and the complication is not worth the end result.

Simplification Is Key

Reducing your options can also be applied in your marketing strategies. When you want people to share your content online, provide them with lesser options. Choose one or two of the best platforms that appeal to your audience and do not clutter your site with other icons and options.

The same can be applied for e-mail marketing.  Do not overwhelm customers with innumerable offers and choices through a simple e-mail. Instead, stick to one major offer which the customer will be automatically drawn to.

Keep your homepage and websites relatively simple and user friendly. Do not bombard potential clients with your latest products and news. A simple website will be easier to navigate and let buyers make their decision.

All in all, if a business wants to improve its sales it must take away the customers’ freedom of choice by removing options. This will make customers happier and earn you profit in the long run.

Tips To Launch A Winning Product

Tips To Launch A Winning Product

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A winning product launch gives a head start in sales for your company. It is one of the few opportunities to go from gradual to exponential sales. 

Here are seven tips to achieve a winning product launch:

Matching Product to Market Needs

A winning product launch begins with meeting the capabilities of your product to the requirements of your target market. This is often the domain of a product manager. If you are presenting a new product or service into the market you would be well served by getting out and talking to the potential buyers that your product addresses. Odds are you learn something unique and possibly so enlightening that it could be the turning point in your business.

A winning product launch cannot happen if the market wants a different thing from what you are delivering. 

Study the competition

A detailed competitive investigation based on your research and visits to the target market will help you make key choices. Check for the need to modify your product or service and customize it for that market.

Clear Positioning and Messaging

Positioning is the set of actions you do to place your product clearly in the minds of your buyers. If your positioning is not clear, your buyers and possible partners will be confused.   

Effective positioning is a communication process that makes the benefits and capabilities of your product so crystal clear to your buyers such that they get it without tremendous effort on your part. Your message forms the foundation for all communication to your target market.

Setting Clear Launch Goals

Be particular about what you want to achieve in your new market, including the level of sales you can anticipate reaching.You will not have a chance at a winning product launch if you do not establish clear goals. 

Proper and clear goals frame the purpose of your product launch. Once you have established the goals of your launch you need to consider how they will be measured.  

Priming the Pump

One of the most important tips to a winning launch is priming the pump. Priming the pump refers to all the activities that are conducted to build excitement and create demand for your product before it is generally available to buyers. You can do this no matter how large or small your company or the size of your budget.

Some ways you can achieve this is by involving customer support, though the sales team, your channel partners, executives or by involving industry analysts. 

Time the Launch Event to Maximize Sales

Identify the times and locations that afford maximum leverage and plan your lunch accordingly. Timing a launch can make all the difference in the world. This can be especially true if you launch your products on a global scale. 

Building Customer Loyalty

Building Customer Loyalty

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A good customer loyalty program can produce significant profits in recurring revenue for your business by enhancing the return on your marketing and sales budget.

Here are five ways to improve your customer loyalty program:

Making customer service a priority

Efficient customer relationship management means organizing your business to focus on the needs of customers.

Make sure customer-facing representatives have all the data they require to efficiently serve your customers. Empower them to act individually, wherever possible.

Draw up plans for managing customer contact. Have standards for speed and courtesy when answering phone calls.

Reply to customer contact quickly and efficiently. This will prove that their feedback is appreciated and acted upon.

Encouraging customer feedback

Ask new clients why they chose you over the competition, and ask existing clients what you could do better.

Set up a customer hotline, and make sure the number is visible on every piece of information you send out.

Get feedback online by promoting clients to engage in social media. Include a contact form on your website. Encourage customers with a concern to contact you. You may then have an opportunity to correct an issue before it has escalated to a complaint.

Thank customers for their feedback, and let them know if you make changes as a result. Keep a record of customer feedback to help you identify common problem areas.

Customer communications

Regular communication with your customers keeps you fresh in their minds and lets you pass along important information.

Take the time to set up a database with customer information such as email addresses, mailing addresses, or phone numbers. Then you can send friendly reminders, birthday greetings, or a monthly newsletter.

Social media is another great way to communicate with your customers on an almost daily basis. Keep in mind that this works better if you limit how many of your communications are actually advertisements.

Customer loyalty schemes

Before starting a loyalty scheme, you need to assess your customers’ current level of satisfaction through techniques such as surveys, interviews, and monitoring customer comments.

Provide extra perks to your most trustworthy customers. By setting up a reward system for the most loyal, you not only promote them to stick around, but you also give encouragement for other customers to attempt to reach that status.

Customer relationship management

Plan your communications to keep customers informed. Make it easy for them to contact you. Encourage customer feedback.

Keep your agreements and exceed expectations. For example, promising delivery in 8 days, but delivering in 5.

Personalize all communications and the email addresses of customer-facing employees. If you use computerized telephone systems, give customers the option of speaking to an operator at any time.

It is important to remember that customer retention should be the main priority of the company.