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Category — Small Business Advice

Liquidating Slow Moving Stock

Most small business owners understand that inventory is an asset, but few understand what role the daily cost of money plays in reducing the value of that asset over time. Small business owners need inventory to sell in order to meet customer demands, improve customer loyalty and capture sales. While it’s understood that inventory is an important part of business success, a number of small business owners often become too attached to their inventory. What does this mean? Simply put, a number of small business owners are reluctant to do what it takes to liquidate slow moving product. They retain original values to the inventory regardless of how long it’s held and rarely take the time to understand how the cost of money reduces the value of that inventory over time. Instead, they see the value of the inventory as constant and are therefore unable to reconcile selling the inventory for lower than its original cost. What they lack is an understanding of how the cost of money reduces that value. So, what is the cost of money and how does it reduce the value of inventory?

The Cost of Money Plays an Important Role in Inventory Value

Most businesses finance their inventory with loans or credit lines. Like any loan, business loans have a yearly interest rate that borrowers must pay for being able to draw upon cash reserves. When it comes to understanding the daily cost of money, it amounts to taking this yearly interest rate and dividing it by the 365 days in year. Doing this will provide businesses with their daily interest rate. Since inventory is financed through this daily interest rate, every day inventory is held and not sold is a direct cost of inventory. Hold onto inventory for too long and the costs simply add up. When looking at your inventory, ask yourself the following questions.

  • What is my yearly interest rate on business loans and credit lines?
  • What is my daily interest rate and cost of money?
  • How much of my inventory is slow moving?
  • What is the daily cost of not selling that slow moving inventory?

When looking at your inventory, understand that its value changes over time. It can never retain its original value. When thinking about slow moving inventory, think about how retailers immediately liquidate their inventory at the end of a given season. If they don’t, they’ll retain that inventory for too long and its value will eventually erode to an even bigger loss.

October 18, 2010   No Comments

How to Advertise without Advertising

Whatever the business, one thing is certain: people are becoming increasingly immune to direct solicitation. Ads are simply tuned out or DVRed away. No news there. Break through the clutter twelve times and a consumer MIGHT register the advertisement — doesn’t mean they will buy; just means they will remember it.

To be successful, businesses must advertise without advertising.

1. Entertainment. Zipit created a new age advertising campaign of legend when they hired Youtube sensation Fred to make short episodes of his online show that showcased the texting tool. (View it here.) Reportedly, they paid him in the mid five digits and enjoyed a 1000% sales increase. Businesses without that kind of money should take more note of the method: Find someone within the company with charisma, buy a $500 HD video camera, and do it guerilla style.

2. Expert Status. An essential component of any online campaign, especially those of small business, is the blogosphere’s perception of that business. The new word of mouth is done on messageboards and in forums. Time and manpower should be focused on finding, joining, and becoming known in these forums, and writing expert level articles on business topics to be published online. Businesses can place links in their signature or in their profile, and if the messages and articles are good, people will click on those links of their own free will, without direct coercion. If a business has time, it should start its own blog.

3. Free Stuff. However unwarranted, people like and expect free stuff. This isn’t necessarily all bad — giving away things showcases a business’ confidence and financial security. The trick is to never give away the same thing that is being sold, and to keep the giveaways relevant. The calendars and pens are overlooked and unappreciated these days. Put the business logo on products that draw the service to top of mind. (If the business sells nails, give away the hammer with the business logo on it.)

Indirect advertising works wonders where direct advertising only annoys. Successful businesses will continue to innovate not only their products and services, but also their advertising. Good luck in your business endeavors!

October 11, 2010   No Comments

Homemade Halloween Decorations

While it’s possible to spend an arm and a leg on Halloween decorations to give your home a spooky, scary appearance during the month of October, you can be creative and frugal at the same time by using items that you already have around your house to get your friends and family in the Halloween mood.

The colors that scream “Halloween!” include black, white and orange. Drape black and orange streamers from across interior doorways. Cut out black bats, orange jack o’lanterns and white ghosts out of construction paper and dangle the shapes from the streamers with yarn or thread. For extra fun, print and cut out images of black cats, witches on broomsticks or haunted houses that you find online.

If you have an old quilt or comforter, take out some of the batting and separate it into strands to use as faux spider webs. Hang these in the corners of your home and add cheap plastic spiders or spiders that you have made out of black chenille stems.

Make translucent ghosts to hang on an outdoor tree during dry weather. Blow up one small (2″) balloon for each ghost. Unfold gauze from your first aid kit and drape it loosely over the balloon. Paint with a mixture of white glue and water, and add more gauze if necessary. Allow the glue to dry overnight, then draw on spooky features with a permanent marker. Pop the balloon and remove, and hang from branches with fishing line or clear thread.

As it gets close to Halloween, your local fabric shop may put the Halloween-themed fabric on sale. If yours does, pick up a couple of yards of a cotton blend. Hand- or machine-stitch a hem on each side and use as a tablecloth on the days leading up to Halloween. Once the holiday has passed, put the tablecloth away and remember to bring it out next year. You will have a Halloween tablecloth that you can use year after year for roughly the same price that you would have spent on a cheap vinyl one that you would likely throw away.

Decorate your table with glass jars filled with plastic bugs, spiders made from chenille stems or gummy worms. Place black, orange or white candles on the table. Another option is to carve jack o’lanterns and use these to decorate your dining table for a few days. You will need to place them outside after a couple of days have passed in order to keep them fresh for Halloween.

October 7, 2010   No Comments

Small Business in the Fall

If you own a small business, then you need to do everything possible to get noticed. After all, businesses are opening up left and right. To be noticed, it is important to really get your name out there. This means running promotions that lure people into your organization and taking the time to make and maintain a budget. The following are some tips for how to promote and market your business so that its profile increases.

First off, get in the mood for fall and really tailor your promotions to suit the season. For example, invite people into your business by offering them pumpkin-spice lattes or warm apple cider. The details really matter when it comes time to lure potential clients or customers into your store. Half the battle is just getting people to make the time to see what you have to offer. This means that you should decorate your store so that it has Halloween-inspired items around it or so that you play with the fall foliage theme. Such details will make your store or business stand out and will really make people feel at home when they walk in.

Additionally, be sure to customize your fliers and coupons so that people remember them. For example, you could put black cat clip art on the corners of coupons, or you could include a nice seasonal greeting on the tops of fliers. People like to think that such promotional materials were made with them in mind. The smallest of gestures can really have some great results.

Lastly, make sure that your business has some sort of online presence. You want to make sure that your website is easy to read, informative, and has incentives like coupon codes or promotion information. Personalize the website by changing it slightly to reference the changing seasons, too. This could be something small like placing a small pumpkin in the corner of each webpage, or it could mean including a special message at checkout or on the website’s homepage.

The details matter when it comes to your small business. Be smart about the promotions, decorations, and website design so that you personalize your business and make it stand out amongst the competition. It is important to consider the details so that people notice you. Make the most of the seasons and really consider them when shaping your promotional materials. Every decision counts when it comes to building your business!

October 4, 2010   No Comments

Creating an Online Presence for Your Small Business

In these times of constantly upgrading technology, it is not uncommon for the average shopper to check out a business online before actually visiting. An online presence, or website, is imperative in building your small business, regardless if it is local, national, or even international. The internet is your key to introducing your business to the community.

Initially, there are plenty of options for websites. There are certain free website hosts online that give you a free web presence, as long as you don’t mind having ads on your site. The other option, and one that is most utilized, is that of hiring a professional website designer or design company to build your site. This gives you the ultimate freedom for your site design, as well as professional experience to back it up.

Starting out you have to have a good idea of your target audience. For example, a toy retailer would be oriented towards children and parents. A business dealing with the stock market, on the other hand, would be oriented more towards the white collar crowd. With a good feel for your customers, you will have a good ideal of the style of website you want. You can have a clean simple site, a flashy cutting edge site, a professional looking site, or anything else you would like. The imagination of your web designer and yourself is your only limitation.

One important factor to remember is that you don’t want to overwhelm those looking at your website. If, for example, you own a store, you won’t want to have every single product listed on the website at the front page. This is simply too much to take in. It is a proven fact that teaser pages do better. A teaser page is a webpage that tells a few of the more high profile items or services you provide. If you can appeal to the potential customers’ sense of curiosity, you will likely end up with a new customer.

There are certain pages that you will want on your website. Never settle for a single “landing” page. Regardless of the size of your business, one single page website will make you seem small. Of course, you will have your front page where you will identify your business and build the customers curiosity. Next, you will want a contact page with your actual address, phone number, email, and any other pertinent contact information, as well as your business hours. Next, have a page with actual photographs (professional) of your business, inside and out, and your employees happily doing their jobs. This will give your business a nice comfortable atmosphere to the customer.

These are your main pages, but the list of optional pages is limitless. You can have a history page, a coupon page where customers can print out coupons, a calendar of events if your store holds certain community events, an about us page describing the inner workings of the business, and the list goes on and on.
Once you have your website set up and going, it is important that you spread the word about it. Be sure and put your web address on business cards, newsletters, and advertisements. Make sure your employees spread the word about your new site also.

Websites are a proven success for any business. If properly created and managed, in many cases, websites have brought in more customers and sales than actual storefronts. Consider the concept of a door. Before someone walks into a building, they have to go through the door. A website is a metaphorical door for your customers to get to your business.

September 27, 2010   No Comments

Creating an Online Presence for Your Small Business

In these times of constantly upgrading technology, it is not uncommon for the average shopper to check out a business online before actually visiting. An online presence, or website, is imperative in building your small business, regardless if it is local, national, or even international. The internet is your key to introducing your business to the community.

Initially, there are plenty of options for websites. There are certain free website hosts online that give you a free web presence, as long as you don’t mind having ads on your site. The other option, and one that is most utilized, is that of hiring a professional website designer or design company to build your site. This gives you the ultimate freedom for your site design, as well as professional experience to back it up.

Starting out you have to have a good idea of your target audience. For example, a toy retailer would be oriented towards children and parents. A business dealing with the stock market, on the other hand, would be oriented more towards the white collar crowd. With a good feel for your customers, you will have a good ideal of the style of website you want. You can have a clean simple site, a flashy cutting edge site, a professional looking site, or anything else you would like. The imagination of your web designer and yourself is your only limitation.

One important factor to remember is that you don’t want to overwhelm those looking at your website. If, for example, you own a store, you won’t want to have every single product listed on the website at the front page. This is simply too much to take in. It is a proven fact that teaser pages do better. A teaser page is a webpage that tells a few of the more high profile items or services you provide. If you can appeal to the potential customers’ sense of curiosity, you will likely end up with a new customer.

There are certain pages that you will want on your website. Never settle for a single “landing” page. Regardless of the size of your business, one single page website will make you seem small. Of course, you will have your front page where you will identify your business and build the customers curiosity. Next, you will want a contact page with your actual address, phone number, email, and any other pertinent contact information, as well as your business hours. Next, have a page with actual photographs (professional) of your business, inside and out, and your employees happily doing their jobs. This will give your business a nice comfortable atmosphere to the customer.

These are your main pages, but the list of optional pages is limitless. You can have a history page, a coupon page where customers can print out coupons, a calendar of events if your store holds certain community events, an about us page describing the inner workings of the business, and the list goes on and on.
Once you have your website set up and going, it is important that you spread the word about it. Be sure and put your web address on business cards, newsletters, and advertisements. Make sure your employees spread the word about your new site also.

Websites are a proven success for any business. If properly created and managed, in many cases, websites have brought in more customers and sales than actual storefronts. Consider the concept of a door. Before someone walks into a building, they have to go through the door. A website is a metaphorical door for your customers to get to your business.

September 20, 2010   No Comments

Growing Service, Reducing Costs – Outsourcing Secrets

Imagine a situation where a company could increase its service abilities and core competencies, grow its business revenue and reduce its cost structure. Does this sound impossible? Well, it isn’t. In fact, a number of small business owners and entrepreneurs do it every day. They effectively increase their capabilities and grow their business while reducing costs. How is this done and why is it so important for small business owners to know about it? It’s outsourcing and it allows companies to control their day to day operating costs while improving efficiencies and growing sales. Every small business owner must wear multiple hats. Finding the time for all the responsibilities of running a business can often be an exercise in futility. Freeing up that time means more valuable time spent closing on business opportunities. So, what are the best functions to outsource for small business owners?

Outsourced Marketing Increases Business Opportunities
A number of small businesses have excellent products and services, but aren’t able to maximize on their opportunities for sales in a given market. Outsourcing marketing allows companies to control their marketing costs while ensuring they concentrate their sales efforts on qualified leads and opportunities. It allows companies to better control their marketing budgets and expenditures while ensuring they have the time available to close sales.

Outsourcing Payroll Reduces Operating Expenses
Using an outsourced payroll company helps to lower a company’s day to day operating expenses and ensures they won’t be penalized for late or incorrect tax filings. Outsourced payroll companies are tax and government regulation experts and are up to speed on the most relevant tax codes. They manage all aspects of the company’s payroll and will ensure timely deposit of funds by direct deposit.

Outsourcing Accounting Improves Receivables Collection
Keeping customer accounts up to date and in line with their terms can often be extremely time consuming and costly. To alleviate this concern and free up time, a number of small business owners outsource their receivables collection and invoicing to an outside accounting firm. This allows them to benefit from a professional firm able to follow up on receivables collection and address any outstanding issues relating to invoices.

Small business owners must be able to continually lower costs and close on business opportunities. It amounts to freeing up time and allowing business owners to concentrate on business growth. When small business owners and entrepreneurs can concentrate on what they do best, the company as a whole will thrive. These outsourcing functions allow small businesses to reduce operational expenditures and improve service.

September 13, 2010   No Comments

Leveraging Social Media to Boost your Small Business

Want to advertise the services that your small business provides with low cost marketing? Look into Social Media! Social media provides a forum for businesses to create an online presence that extends beyond the walls of your storefront and into the lives of your potential customers. A social media campaign that is executed correctly can build your clientele and spread the word about your business often without negatively impacting your bottom line or taking money out of your pocket. Below are some tips to leverage free social media sites to boost your business.

Create an Online Presence
There are many social networking sites out there that offer the ability for small businesses to create an online profile describing your services. Leverage all of those sites and ask that your employees sign up and associate themselves with your business. The more your potential clients can learn about your business, its employees, and its services, the better chance you have of them feeling comfortable enough to trust you with their business needs.

Consistency Is Key
There are many sites out there that target different audiences, but it is important that on each site, the message about your business is consistent. LinkedIn, for example, targets business professionals who often have established business contacts and a wealth of experience. LinkedIn is used by busy professionals to build and grow a network, and often to find job opportunities. Facebook, on the other hand, is a more social tool that is used more for entertainment then true business transactions. Create a presence on all of the social media sites that you can, but ensure that you consistently brand your business with a common message across all platforms. You do not want to confuse customers or potential clients who have accounts on all these sites.

Your Message is Contagious!
Social media is a great way to quickly spread the word about any promotions that you are offering and will surely get customers in the door. Advertising a promotion to your Facebook “fans” or to your LinkedIn “connections” or to your Twitter “followers” has an infectious and contagious element to it because each of your contacts on those social media platforms have their own networks, and often your message can reach beyond your own contacts and to the networks 2 or 3 degrees away. Advertising a promotion through social media is a quick way to get some “buzz” around your business and what you can offer.

Stay Current
Everytime you update the offerings of your small business, be sure to update all of the social media sites on which you are listed. You never know who may be lurking on those sites and looking for something specific that your company has just begun to offer. Stay current, do not let your content get stale, and you will be sure to lure in key customers who are seeking your new services.

Social media is a growing industry and the business world is still realizing its benefits. Following these few tips can help you to stay on the cutting edge and ensure that you do not leave your potential new clients in the dark. Good luck!

How has your company used social media? Can you give us a link so we can see an example?

September 6, 2010   No Comments

Small Businesses and Cash Flow

It probably won’t come as a surprise that managing cash flow is perhaps the biggest concern small businesses and entrepreneurs face daily. Regardless of the size of the company, or where it is along its stage of life, every business owner is burdened by the time consuming issue of cash flow management.

Given the state of today’s economy, with customers extending credit terms and taking longer and longer to pay, this is likely the most pressing concern for small business owners everywhere. However, there are solutions to managing cash flow. There are ways to mitigate its impact and free up valuable time so that small business owners can get back to concentrating on what they do best. These approaches are simple, straightforward and can be used in both good and bad times. In fact, they become one of the most important aspects of growing a business and increasing gross profit. Interested in knowing what these approaches are?

Pursue Prepaid Customer Accounts with Bad Credit
Every day an invoice goes unpaid is a direct cost to the business owner. Since most businesses use business credit lines or loans to finance their day to day operations, they must pay a yearly interest rate to borrow that money.

When customers take too long to pay, not only is it difficult on cash flow, but there’s a cost to it as well. One of the best ways to alleviate that cost is to get paid faster. The easiest way to accomplish this is by selling product to bad credit accounts who must prepay before receiving product. Prepaid customer accounts are excellent sources to alleviate cash flow as they are rarely pursued by the competition.

Incentivize Early Payments with Discounts
Don’t just go after those customers who must prepay, use incentives with the best customers to get them to pay sooner. Provide discounts and prompt payment incentives across all customer accounts. This will incentivize these customers to pay sooner and help in managing cash flow.

Negotiate Discounts for Early Payments with Vendors
Be sure to secure discounts for prompt payments on your own invoices. When cash flow isn’t a concern, make sure to benefit from the savings accrued by paying your vendors sooner. It will help over time and keep more money inside your business. Managing cash flow is really about saving money when possible and this is an excellent way to keep more of your company’s money.

Managing a company’s cash flow can not only be frustrating, but a drain on resources as well. However, these simple approaches not only reduce its impact, but point the way to additional savings. They are used by a number of companies who view them as best business practices.

August 30, 2010   No Comments

Marketing On the Cheap for Small Businesses

Often times small businesses battle with finding cheap marketing ideas. Small businesses need to gain more profit, but need to be able to put out money for marketing. How do you find marketing money when you’re barely clearing the bills? Here are 3 ideas to turn pennies into large profits.

Face-to-Face Flyers
Flyers can be created for just pennies a piece. While people don’t always like to find flyers under their windshield wipers, they do like meeting business owners. Face-to-face time with customers is a great way to draw in business. If feasible, get out door to door in neighborhoods around your business. Once you have a chance to meet the people, leave them with a flyer. They will remember meeting you and have information to look over long after you have left.

Events and Open Houses
Through a special event. For example, during Halloween season, you could throw an open house. Rent an inflatable jumper, have things for people to do, refreshments and offer a peek at what you do. If you offer a service, have a demonstration on hand that plays over and over through the evening. Free events draw crowds. Events do not have to be expensive and can be done for less than an ad in the mainstream newspaper.

Mailers for After Hours Sales
Pick a section of town that you feel would be interested in your business. For example, if you have a specialty furniture store, pick a high dollar retirement neighborhood. Then send out exclusive invitations to them for an after hours sale. You can even print up the invitations yourself. Treat the invitations with as much class as a wedding invitation. You can pick up inexpensive gold lined envelopes, black ribbon and gold confetti from any office supply or even some dollar stores. Then have your staff dress the part. Serve punch and cookies on a table with real linens. Your customers will be surprised at any detail you give the party.

Marketing does not have to be expensive, it just has to be personal. Hand made invitations to events make for cheap, one-of-a-kind money-making marketing. Special events draw crowds that may not have been to your shop before. Flyers, when handed out face-to-face are a unique way of getting your face and business out to the public. People like different, personal marketing. There are a number of cheap marketing ideas for small business. The only thing that limits the ideas is your imagination, so get thinking and get creative.

August 23, 2010   No Comments