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Category >> General Business
May 25
2015

Private Branding May Work for You

Posted by Steve Marr in Untagged 

We all see private brands on store shelves. Some are introduced to provide low cost options; others are designed to create a higher end appeal. Usually we think only large establishments or national companies can effectively use private branding. This is not always the case.

I frequent a great breakfast place. It is very popular with local residents. When they get a pancake order, they ask if you want the house syrup which is included in the price or prefer 100% pure maple syrup for a $2.00 charge. The syrup arrives in a small 1.75 ounce bottle with a label from the local restaurant. The cost of the syrup is around $.75. Each sale creates an additional $1.25 in gross profit. While it may seem like a small amount; this adds up to $13,000 per year, more than chump change.

Additionally, they offer the same private label in 12 ounce and quart sizes. They sell several bottles every day, adding additional profit. Because customers like and trust the establishment, customers perceive the product as good, even without a brand name.

A hair salon with 4 branches worked with a manufacturer to develop a hair product as a private brand. The salon assured the manufacturer of future orders, and the hair salon was able to charge a bit more for the product because customers perceived added value because they considered it a “special” brand. In addition, a customer knew they probably could not get the same product at a competing establishment. The salon likely increased profits several thousand dollars as a result.

Smaller businesses may have a product well suited for private labeling. Some think a manufacturer wouldn’t offer this option. However, the marketplace reality is that if one business won’t private label; someone else will.

Private labeling also provides an opportunity to alter the recipe, especially if you believe you have a better option to offer. Long ago the Lord spoke to Moses and said, “See that you make them according to the pattern shown you on the mountain.” (Exodus 24:40, NIV) Likewise, you can ask a manufacture to make a product after your pattern.

Don’t be afraid of private branding.  It could be an effective way to increase your sales.

 

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May 04
2015

Release a Business after Selling

Posted by Steve Marr in Untagged 

When someone asks me for counsel about selling a business, I start with the important financial questions.  I help them identify a fair and appropriate valuation.  Then, I ask, “What is next?”
 
Sometimes the person wants to be available for a volunteer ministry. Selling the business accomplishes that goal. Excellent. Other times the person wants to change direction. Selling the business will open possibilities to pursue a new direction. Fine. Often, the seller wants to take the money but continue to work for the business. This rarely works well, for the buyer or seller.  Here’s why:

Apr 24
2015

Business is a Marathon with an Occasional Sprint

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Running a business requires long term energy. Every day you have to get up and get going.  While most of the time, it’s more of a marathon; occasionally you must be prepared to sprint.
King Solomon wrote, “A little sleep, a little slumber, a little folding of the hands to rest-- and poverty will come on you like a thief and scarcity like an armed man.” (Proverbs 6:10-11, NIV). A marathon runner does not rest along the way.  He keeps running and sprints when necessary.

Apr 15
2015

Using Life Insurance in Business

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Term life insurance is a good tool for many families.  In the event of death, life insurance can replace lost income.  For example, a homemaker should have insurance because child care is expensive if the homemaker had to return to work. While this makes sense in family finances, insurance can be an important business tool as well.

I recently spoke with two people considering a business partnership. “Mark” would put up most of the investment funds; “Doug” would provide sweat equity. The cash investor was concerned about what would happen if Doug was no longer able to work because of injury or death.  Mark feared that he would lose his investment. I suggested that he take out a term life insurance policy on Doug.  I recommended around $250,000. This would provide funds for Mark to find another manager, if necessary or recover the investment if the business closed.

Another example of using life insurance would be in a business partnership.  In most instances, if a partner unexpectedly died; their heirs would inherit the business. Usually, the surviving family would rather have cash than an interest in a business.  The business can take out a term insurance policy on each partner and use any proceeds to buy out the interest in the event of death.  Without insurance most businesses would scramble to get the needed cash.

Additionally, life insurance may be used to cover outstanding loans by the business. If a key person dies, a bank may decide not to renew the business loan.  In that case, the insurance would cover the debt allowing the business to continue.

Paul wrote to Timothy, “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” (1Timothy 5:8, NIV) Part of providing for family in the event of death may be selecting a life insurance plan to fit your business needs.
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Apr 13
2015

Should I Mix Personal E-mail with Business E-mail?

Posted by Steve Marr in Untagged 

Secretary of State Clinton’s use of her personal e-mail and server rather than a government account has spawned numerous news stories in print and on television. I will let the politicians sort this issue out. However, this does raise the question for us. Should we mix personal e-mail with business?

Generally, when you work for a company and have an e-mail account, everything that goes through that account belongs to the company. They have a right to read anything. This is one reason jokes and unrelated news stories should not be processed through a business e-mail account. When you do, your employer has the right to read everything, regardless of how personal or embarrassing it could be.