On my last note, I discussed the importance of knowing your break even. Let's say you got that number; let's say you have a clear understanding of what you need to make, sale and accomplish on a daily, weekly and monthly basis to cover expenses, payroll and some variables.
The next step is to plan objectives and work on your Profit Margin.
What is Profit margin: it is the ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Now the fun begins, set your baseline of profitability and set goals to achieve, watch your profit margin grow. Use the SMART concept: S specific, M measurable, A attainable, R reasonable and T for Time.
Set your goals with an specific outcome in your industry, not too high or too low, set a reasonable space and time to accomplish it and ensure is trackable and measurable to analyze results. Lots of people have a hard time setting goals; why, because you do not have a break even established and do not know the profit margin of the company.
Dedicate some time to analyze these numbers and the AHA moment will come. Being in business will be fun again.
Many people hear the profitability word, many are selling; "we can get you to be more profitable" if you buy X or Y or use social media; they do not even know what your numbers and goals (if any)are... you are the only one who can determine these facts. Making a profit is one thing; knowing the basics is another. Be aware of quick fixes, fad and trends, just because everyone is doing it. Remember how everyone was refinancing their mortages and buying more than they could afford a few years ago, yes everyone was doing it. Do not fall into that same trap. Instead, learn, read about what is working. Dedicate resources on knowing your business from the basics and up. Ask for help if necessary.
Remember Profit is the one thing you can't get more of.
Knowledge is power.
Wednesday, November 2, 2011
Wednesday, October 26, 2011
Knowing Your Break Even
The Importance of Knowing Your Break Even
by Hannibal Chinchilla, Principal, Barca Financial Group, Barca Enterprises and AZ Web Programmers
If you are a business owner during this recession; knowing what your Break Even is paramount. Knowing how many sales per day, week, month you ought to make each month. Knowing your fix costs, your variable costs, you need to know these figures in order to cover your expenses. These figures will help you create goals and objectives on a daily basis; to be able to gauge performance, identify troublesome areas and correct them before those bills start piling up. I see a lot of businesses closing their doors lately; I wonder how many of them knew their exact break even before calling it quits. It is clear that knowing and mastering this simple business fact is so unimportant to many. Owners are always too busy to figure things out, if they do not know how, they do not seek advice or help.
Advice: know your bottom line, your break even so you can have a base line of your business position; then you can move forward to master your Profit Margin
by Hannibal Chinchilla, Principal, Barca Financial Group, Barca Enterprises and AZ Web Programmers
If you are a business owner during this recession; knowing what your Break Even is paramount. Knowing how many sales per day, week, month you ought to make each month. Knowing your fix costs, your variable costs, you need to know these figures in order to cover your expenses. These figures will help you create goals and objectives on a daily basis; to be able to gauge performance, identify troublesome areas and correct them before those bills start piling up. I see a lot of businesses closing their doors lately; I wonder how many of them knew their exact break even before calling it quits. It is clear that knowing and mastering this simple business fact is so unimportant to many. Owners are always too busy to figure things out, if they do not know how, they do not seek advice or help.
Advice: know your bottom line, your break even so you can have a base line of your business position; then you can move forward to master your Profit Margin
Friday, July 15, 2011
Your 30 second commercial done! Now What Do you Do?
By Hannibal Chinchilla, CEO Barca Financial Group, AZ Web Programmers and Barca Enterprises, INC.
You Have Your 30 Second Commercial done, Now What Do You Do?
As many prepared for a leads luncheon or networking event, one item to reinterate is to have a rehearsed 30 second commercial, I call this your resume in a nutshell, it will facilitate a follow up/a sales call and possibly a Sale!
Just remember that when you have your 30 second commercial, it should flow naturally and with confidence. Avoid sounding like a recording, specially during a leads luncheon which you may have a potential customer next to you, if she/he hears a pre-recorded commercial, it will take awayffrom the objective. Additionally consider your target audience, this will change from the various potential customers you get to talk to; potential customers will come from different industries and walks of life. A quick knowledge and assessment from these customers will set a more proper 30 second commercial for each of them. What I mean by that is, by asking a few simple questions you can determine a potential customer/client. I call this a prequalifying step, since you only have a limited amount of time during these events. It will save you time and money!.
So let's say you got the interest of a potential customer, your 30 second commercial worked; she/he would like a follow up and a future meeting, then what do you do to prepare?
This will depend on the sales training you have received to make thiese sales calls, your success ratio of closure, delivery and follow up actions. Depending on your industry this could take a few meetings and additional steps. In this note I want to share a set of professional selling skills I have learned and proven to work. My closing rate is about 85%. This is high and it is there for a reason, preparation and planning aids in the ultimate goal of closing a sale. I have always been a good closer, this set of skills I share with you will help you or add to your sales repertoire.
When we sale we need to find the NEED and to make informed mutually beneficial decisions; This is the core of selling:
OPENING, propose an agenda, state the value to the customer, always check for acceptancep.
PROBING, Use open and close probes to explore the customer's: Circumstances and needs.
FINDING CUSTOMER NEEDS, acknowledge these circumstances and needs
SUPPORTING, Acknowledge the need, describe relevant features and benefits and check for acceptance
CLOSING, Review previously accepted benefits, propose next steps for you and the customer to take and check for acceptance, shake hands....
Probing:
Open probe: ask questions with; What, When, How, Why, and let the customer answer completely and use listening level one, which is to attentively to key words, needs, circumstances and facts to use later during the meeting. you may want to take notes so you can remember later on. (Remember to ask permission to take notes orto record the meeting.
Closed probe: ask questions with; Do/did you ......... for a yes/no answer, this helps reiterate the solutions after the open probe phase.
Customers Reactions and how to deal with them:
Overcoming Customer Indifference
-Acknowledge the customer's point of view
-Request permission to probe
-Probe to create customer awareness of needs: Explore customer's circumstances for opportunities and effects; Confirm existence of a need before continuing
Resolve Customer's Concerns
First understand the concern
Resolving Skepticism
-Acknowledge the concern
-Offer relevant proof (benefits and features, verbal descriptions or visual sales aids
-Check for acceptance
Resolving Misunderstanding
-Confirm the need behind the concern, sometimes customers do not describe the need out right and more probing is required to find this concern not previously specified.
-Support the need.
Resolving a Drawback
-Acknowledge the concern
-Refocus on the bigger picture
-Outweigh with previously accepted benefits
-Check for acceptance
During preparation and research prior to the sales call you can identify some of the typical customers reactions and effects: indifferences, concerns, skepticism, misunderstandings and drawbacks.
Note: Don't forget to check for acceptance!!
Happy Sales calls!!!
For more related articles and consultation visit us at www.barcafinancial.com for a quote.
You Have Your 30 Second Commercial done, Now What Do You Do?
As many prepared for a leads luncheon or networking event, one item to reinterate is to have a rehearsed 30 second commercial, I call this your resume in a nutshell, it will facilitate a follow up/a sales call and possibly a Sale!
Just remember that when you have your 30 second commercial, it should flow naturally and with confidence. Avoid sounding like a recording, specially during a leads luncheon which you may have a potential customer next to you, if she/he hears a pre-recorded commercial, it will take awayffrom the objective. Additionally consider your target audience, this will change from the various potential customers you get to talk to; potential customers will come from different industries and walks of life. A quick knowledge and assessment from these customers will set a more proper 30 second commercial for each of them. What I mean by that is, by asking a few simple questions you can determine a potential customer/client. I call this a prequalifying step, since you only have a limited amount of time during these events. It will save you time and money!.
So let's say you got the interest of a potential customer, your 30 second commercial worked; she/he would like a follow up and a future meeting, then what do you do to prepare?
This will depend on the sales training you have received to make thiese sales calls, your success ratio of closure, delivery and follow up actions. Depending on your industry this could take a few meetings and additional steps. In this note I want to share a set of professional selling skills I have learned and proven to work. My closing rate is about 85%. This is high and it is there for a reason, preparation and planning aids in the ultimate goal of closing a sale. I have always been a good closer, this set of skills I share with you will help you or add to your sales repertoire.
When we sale we need to find the NEED and to make informed mutually beneficial decisions; This is the core of selling:
OPENING, propose an agenda, state the value to the customer, always check for acceptancep.
PROBING, Use open and close probes to explore the customer's: Circumstances and needs.
FINDING CUSTOMER NEEDS, acknowledge these circumstances and needs
SUPPORTING, Acknowledge the need, describe relevant features and benefits and check for acceptance
CLOSING, Review previously accepted benefits, propose next steps for you and the customer to take and check for acceptance, shake hands....
Probing:
Open probe: ask questions with; What, When, How, Why, and let the customer answer completely and use listening level one, which is to attentively to key words, needs, circumstances and facts to use later during the meeting. you may want to take notes so you can remember later on. (Remember to ask permission to take notes orto record the meeting.
Closed probe: ask questions with; Do/did you ......... for a yes/no answer, this helps reiterate the solutions after the open probe phase.
Customers Reactions and how to deal with them:
Overcoming Customer Indifference
-Acknowledge the customer's point of view
-Request permission to probe
-Probe to create customer awareness of needs: Explore customer's circumstances for opportunities and effects; Confirm existence of a need before continuing
Resolve Customer's Concerns
First understand the concern
Resolving Skepticism
-Acknowledge the concern
-Offer relevant proof (benefits and features, verbal descriptions or visual sales aids
-Check for acceptance
Resolving Misunderstanding
-Confirm the need behind the concern, sometimes customers do not describe the need out right and more probing is required to find this concern not previously specified.
-Support the need.
Resolving a Drawback
-Acknowledge the concern
-Refocus on the bigger picture
-Outweigh with previously accepted benefits
-Check for acceptance
During preparation and research prior to the sales call you can identify some of the typical customers reactions and effects: indifferences, concerns, skepticism, misunderstandings and drawbacks.
Note: Don't forget to check for acceptance!!
Happy Sales calls!!!
For more related articles and consultation visit us at www.barcafinancial.com for a quote.
Friday, July 8, 2011
By Hannibal Chinchilla
The words "Debt Free" seem so unrealistic and far away, specially during these tough economic times. For generations we have learned from our elders to deal with debt in very different ways; if you ask you grandfather he will tell you to save as much as you can, don't trust the banks and pay everything off right away. Our grand fathers generation learned the hard way during the 10+ year Grand Depresion, long lines to get basic needs, food and no jobs available. Many survived and flourished to give us that sound advice. Unfortunately, we are bombarded by offers of quick credit, easy credit and don't worry, pay it later. Later sometimes never come. The traditionalists learned first hand, in contrary the boomers who have indulged in debt ridden portfolios and quick return on investments. It really doesn't work like that. Compounding interest only works through time. Early withdrawals of a 401K do not work. It negates actually the savings you can accumulate. Social Security is in jeopardy... Defined Benefit Plans are rare nowadays, these are pensions plans, who stays in a company longer than 3 years. Our grandparents usually work for the same company for 20+ years on average. We are left to fend for ourselves and our children. So what are we ought to do?
Realistically, we need to take care of ourselves; your company, your parents or children, the government, nor your friends will help.......We must face these times ourselves. This means self-discipline. This means making a real and realistic paradigm shift in our behavior. Yes, it is tough but it can work.
Here is a realistic way to reduce or eliminate debt through discipline and consistency:
First, write down all your debt, from smallest to largest, item one should be a small debt, a credit card, or a bill you can pay off quickly, then the second item should be larger, probably a couple of payments, third item, should be a bit larger and could take a couple of months to pay off, and so on. Get the picture?
The way it works is that we are accustomed to accomplishments and quick outcomes, when you pay off an item off your list, it will give you a feeling of accomplishment and it will feel good, really good. Then the second item, then the third and so on.
It will take time but it will start to feel that you are getting somewhere, just work on whole numbers and not interest.
Yes, interest is important but it will work better once you pay one off, you will see.
Caution!: you will need to stop incurring more debt, lower your expenses and increase your earnings, basic math, the more you bring in the easier it will be to start paying those small debts. Budget those expenses and see what is coming in and going out. Reduce or stop paying for nice to have or do items, you know what they are. The economy will take a few years to rebound, we are going to feel this for a while, so prepare yourself, deal in cash only and stay away from credit cards and debit cards.
If you are interested in getting my Cash flow worksheet email me at hannibal@barcafinancial.com.
Yes, my return on investment is that once you become debt free, you will seek advice to build your nest egg and happiness.
Visit us at http://www.barcafinancial.com/ for quick calculators and other related articles
The words "Debt Free" seem so unrealistic and far away, specially during these tough economic times. For generations we have learned from our elders to deal with debt in very different ways; if you ask you grandfather he will tell you to save as much as you can, don't trust the banks and pay everything off right away. Our grand fathers generation learned the hard way during the 10+ year Grand Depresion, long lines to get basic needs, food and no jobs available. Many survived and flourished to give us that sound advice. Unfortunately, we are bombarded by offers of quick credit, easy credit and don't worry, pay it later. Later sometimes never come. The traditionalists learned first hand, in contrary the boomers who have indulged in debt ridden portfolios and quick return on investments. It really doesn't work like that. Compounding interest only works through time. Early withdrawals of a 401K do not work. It negates actually the savings you can accumulate. Social Security is in jeopardy... Defined Benefit Plans are rare nowadays, these are pensions plans, who stays in a company longer than 3 years. Our grandparents usually work for the same company for 20+ years on average. We are left to fend for ourselves and our children. So what are we ought to do?
Realistically, we need to take care of ourselves; your company, your parents or children, the government, nor your friends will help.......We must face these times ourselves. This means self-discipline. This means making a real and realistic paradigm shift in our behavior. Yes, it is tough but it can work.
Here is a realistic way to reduce or eliminate debt through discipline and consistency:
First, write down all your debt, from smallest to largest, item one should be a small debt, a credit card, or a bill you can pay off quickly, then the second item should be larger, probably a couple of payments, third item, should be a bit larger and could take a couple of months to pay off, and so on. Get the picture?
The way it works is that we are accustomed to accomplishments and quick outcomes, when you pay off an item off your list, it will give you a feeling of accomplishment and it will feel good, really good. Then the second item, then the third and so on.
It will take time but it will start to feel that you are getting somewhere, just work on whole numbers and not interest.
Yes, interest is important but it will work better once you pay one off, you will see.
Caution!: you will need to stop incurring more debt, lower your expenses and increase your earnings, basic math, the more you bring in the easier it will be to start paying those small debts. Budget those expenses and see what is coming in and going out. Reduce or stop paying for nice to have or do items, you know what they are. The economy will take a few years to rebound, we are going to feel this for a while, so prepare yourself, deal in cash only and stay away from credit cards and debit cards.
If you are interested in getting my Cash flow worksheet email me at hannibal@barcafinancial.com.
Yes, my return on investment is that once you become debt free, you will seek advice to build your nest egg and happiness.
Visit us at http://www.barcafinancial.com/ for quick calculators and other related articles
Sunday, June 19, 2011
Saturday, June 18, 2011
Tuesday, April 5, 2011
Consider Your Retirement Needs, but Don’t Forget Your Retirement Wants
You might have read or heard that you need to replace about 80% of your pre-retirement income to maintain your standard of living in retirement. Although some research validates this guideline, consider that half of today’s retirees say their spending is higher or about the same as it was when they were working.1–2
The idea that you may need less income in retirement considers that your income tax burden may be lower when you quit working and that you probably are not contributing a large chunk of your salary to retirement plans. Variables that can influence the replacement ratio — positively or negatively — include your living expenses, overall debt level, health-care costs, and whether you will receive an employer-provided pension.
Rather than focusing on how much money you’ll need to get by in retirement, take some time to envision a retirement lifestyle that you can really get excited about. Unless you plan to spend retirement being frugal, there’s a good chance that you could need more than 80% of your pre-retirement income to fund the lifestyle you seek.
More Time, More Money?
Retirement may be the first time in your life when you are free to travel, play golf, go back to school, focus on hobbies, and pursue other interests that you simply didn’t have time for during your working years.
What a disappointment it would be to retire and finally have the time, but not the money, to do as you please. If you would find it difficult to afford your ideal retirement lifestyle on your current income, it could be an indication that you are underestimating how much income you’ll need in retirement.
Changing Needs
As we grow older, what once may have been considered a luxury can become a necessity. In their list of “basic needs,” more than half of baby boomers include an Internet connection, special occasion gifts, and pet care. Many baby boomers would add family vacations, dining out, professional haircuts/coloring, movies, and their children’s or grandchildren’s education to the list of basic needs.3 And for 98% of baby boomers, health-care coverage is not a luxury but a basic need, one that they are extremely concerned about being able to afford.4
Underestimating Costs and Spending
The danger of underestimating how much you expect to spend in retirement is that it could lead you to save too little or invest too conservatively during your working years. Among the 46% of workers who have attempted to calculate how much money they will need for retirement, 44% made changes to their retirement savings strategies as a result, with the majority of changes involving saving or investing more.5
To prepare for a retirement that you can truly look forward to, consider the luxuries that your retirement-needs calculation may not account for. It could mean the difference between living well and just getting by.
1) CNNMoney, October 8, 2009
2, 5) Employee Benefit Research Institute, 2010
3) MarketWatch, August 6, 2010
4) Society for Human Resource Management, 2010
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
For more articles like this visit our website: http://www.barcafinancial.com/
The idea that you may need less income in retirement considers that your income tax burden may be lower when you quit working and that you probably are not contributing a large chunk of your salary to retirement plans. Variables that can influence the replacement ratio — positively or negatively — include your living expenses, overall debt level, health-care costs, and whether you will receive an employer-provided pension.
Rather than focusing on how much money you’ll need to get by in retirement, take some time to envision a retirement lifestyle that you can really get excited about. Unless you plan to spend retirement being frugal, there’s a good chance that you could need more than 80% of your pre-retirement income to fund the lifestyle you seek.
More Time, More Money?
Retirement may be the first time in your life when you are free to travel, play golf, go back to school, focus on hobbies, and pursue other interests that you simply didn’t have time for during your working years.
What a disappointment it would be to retire and finally have the time, but not the money, to do as you please. If you would find it difficult to afford your ideal retirement lifestyle on your current income, it could be an indication that you are underestimating how much income you’ll need in retirement.
Changing Needs
As we grow older, what once may have been considered a luxury can become a necessity. In their list of “basic needs,” more than half of baby boomers include an Internet connection, special occasion gifts, and pet care. Many baby boomers would add family vacations, dining out, professional haircuts/coloring, movies, and their children’s or grandchildren’s education to the list of basic needs.3 And for 98% of baby boomers, health-care coverage is not a luxury but a basic need, one that they are extremely concerned about being able to afford.4
Underestimating Costs and Spending
The danger of underestimating how much you expect to spend in retirement is that it could lead you to save too little or invest too conservatively during your working years. Among the 46% of workers who have attempted to calculate how much money they will need for retirement, 44% made changes to their retirement savings strategies as a result, with the majority of changes involving saving or investing more.5
To prepare for a retirement that you can truly look forward to, consider the luxuries that your retirement-needs calculation may not account for. It could mean the difference between living well and just getting by.
1) CNNMoney, October 8, 2009
2, 5) Employee Benefit Research Institute, 2010
3) MarketWatch, August 6, 2010
4) Society for Human Resource Management, 2010
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
For more articles like this visit our website: http://www.barcafinancial.com/
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