What do you think would happen to your business if an accident or illness made it impossible for you to work? What if one of your business partners or your best salesperson was injured in an accident and had to leave the business? It’s not pleasant to think about, but you do have to ensure that your business survives if a key person – yourself included, is disabled or dies.

Consider how your business would deal with that sort of situation if it was you:

• Would the business be able to continue to generate an income while you’re incapacitated?

• Who would take over your role in the business; how would they be paid?

• Who would have power of attorney if you’re unable to make decisions?

These are difficult questions so they need to be thought through with great care. You need to prepare for eventualities now, while you’re still there to make decisions about the way you’d prefer things to happen. In a worse case scenario the death of a business owner can also mean the death of the business unless appropriate plans are in place to manage transition to new managers.

• Do you have a will that stipulates who inherits your share of the business?

• If a family member is to take over from you as head of the business, is this in your will?

• If the business is to be sold after your death, who will administer the proceedings?

In the case of a partnership, in the absence of a binding arrangement the partnership is dissolved when one partner dies. All the surviving partner can do is to wind up the affairs of the partnership.

• Is there an agreement between the partners for the surviving partner to purchase the deceased partner's interest at a prearranged valuation?

• Is there life insurance in place that will provide funds for the surviving partner to purchase the interest of the partner that dies?

The situation can be even more complex if the business has several shareholders and one of them dies. Conflicts between the surviving shareholders can lead to failure of the enterprise unless suitable plans have been made to handle the situation.

• Will other shareholders have first right of refusal to purchase the shareholding?

• Is it acceptable for the deceased shareholder’s heirs to take over a role in the business?

• Will the heirs be able to sell their inherited share of the business?

And what would happen if you were to suddenly lose a key team member - the sales manager or the office manager for example, because of illness, disability or death?

• What impacts will that person's absence have on the business?

• How will the missing person's business functions be performed?

• What additional costs will be incurred to find a suitable replacement?

• How long will it take before the replacement is sourced and becomes fully productive?

These are tough questions, but businesses have failed because they didn’t bother to address these issues before they happened.  Because there are legal, financial and organizational matters involved, you may want to form a risk management team of your legal adviser, your accountant and your insurance broker to guide you in creating a plan that will ensure your business survives these potentially disastrous events.

An organization’s pricing policy can make a significant contribution to its success. Charging the right amount for goods and services means setting a price that makes them competitive within their market and at the same time allows them to generate sufficient revenue to cover their production costs and make a profit. Here are the issues you should be considering.

Set Prices According to Your Business Strategy

A company’s price objectives should align with its business plan. If the plan’s goal is to increase sales volume by 25% within twelve months the prices will need to be highly competitive. If the goal is to improve profitability, price considerations can’t be exclusively about generating volume.

A business may price its goods and services at the lower end of the market to be seen as a value player if this is in line with the goals of the business plan. Or it may position its prices close to the middle of the market to avoid looking ‘cheap’ yet not be in danger of setting prices too high.

Understand market forces

The market will drive pricing to some degree. Study the market to find the range of pricing for products similar to those you offer. Your price should fit somewhere within that range - although the market will identify a range of pricing it can’t tell you what is right for your particular business.

Some competitors may seem ‘similar’ and it’s tempting to simply emulate their pricing structure for this reason. But because every business is unique, with its own combination of costs, services and business goals, this is never the best way to go.

Know the Real Costs

Most businesses underestimate their real fixed and variable costs. The term ‘costs’ is not just about labor and materials; all marketing, administrative and operational costs have to be taken into account as well.  Costs also include the owner’s salary and an allowance for the profits the business expects to earn.

Prepare a Sales Forecast

Without an approximate idea of how many units of an item are likely to sell it’s impossible to have a workable pricing strategy. Sales and costs are interrelated, and every element of expense including overheads must be allocated to sales.

Sales forecasts need to be prepared in detail so that individual products can have costs allocated on a per unit basis for more accurate pricing. This is also necessary so the profitability of each item can be calculated.

Pricing Generally

Owners should continually question their pricing policy. Think what the impact would be on profitability if prices could be raised by just 1% or 2%. It's an incremental addition that clients probably won’t notice but which would greatly improve the bottom line of any business.

Test prices by occasional variances that create feedback and provide information about what customers are willing to pay.

Always set prices as high as possible; costs have a way of steadily increasing. It might be necessary to lower a price temporarily, or for a particular customer, but once a price is in the public domain it can only be raised with difficulty.

No pricing policy can be totally inflexible. As the market changes and competitive forces vary, prices too may have to change. There are few absolutes in pricing other than an absolute need for them to cover all costs and generate profits.

Core competencies are many and varied. They can be a technology, such as Apple's development of the miniaturized hard drive that made the iPod name synonymous with MP3 players. They can be a tradition of service like the Red Cross or a specialization like that of Epson in the field of printers for PCs. They can even be an ability to set fashion trends like Gucci and Armani.

A business’ core competencies collectively give it marketing clout. They are usually achieved through a long term process of development and are difficult for a competitor to copy or imitate. Customers value them because they can acquire something unique by purchasing the products of a business’s core competencies.

What are Your Core Competencies?

In today’s intensely competitive environment your business should devote time and resources to developing its core competencies, and then creatively apply them to a fast changing market.  Even if your business is only small, identifying and developing its core competencies can create and sustain valuable long term competitive advantages.

What are the core competencies of your business? Think about all the skills, abilities, knowledge, experience, technologies or processes that enable your business to provide its set of products or services. Brainstorm with your team about all the things you are, to your team and your customers.  The value proposition you offer to your customers and how they perceive you are derived from your firm’s core competencies; activate them and begin to market with them.

Defining Your Core Competencies

Define your core competencies broadly but accurately - broadly so that you don’t rule out opportunities from which you could benefit, and accurately so you aren’t tempted to go outside what you can do well.

• Manufacturer – manufacturing durable and attractive shop fittings, fast installation, no mess left afterwards

• Shoe retailer – best prices on quality men’s shoes

• Dentist – affordable, pain-free dentistry in a caring environment

Once you have determined the core competencies of your business, you can start turning them into marketing messages. But remember, marketing messages emphasize the benefits of these core competencies so some rewording is necessary to point out, for instance, the advantage of a fast, clean installation such as minimizing business down time.

A Basis for Decision Making

Let’s say you currently operate a successful sporting goods business and you're thinking about starting a café to operate inside the store. This may seem like a good idea, but does that align with what your business does well? In other words, does it mesh with your core competencies?

If you know that your core competencies make you a successful retailer of sporting goods because of an in-depth knowledge of ball sports, then you probably wouldn’t decide to open a café because this is outside the focus of your business. But you might consider allowing an experienced food operator to open a café in your business and get rent and a share of the turnover in exchange.

It’s an Important Step

Defining your core competencies is an important step for any growing business. They are a basis for marketing, for making operational decisions and for planning the future of the enterprise.

If you have growth plans for your business you’ll need to develop your existing core competencies and expand them. All business growth is based on doing more of what you do, but the bigger the business is, the more it has to rely on its core competencies to withstand competitive forces.

If your business does something very well and remains focused on it, you will have a cornerstone for your marketing; customers will come to you in the certainty that you will deliver what they need. Defining your core competencies and basing everything your business does on them will keep you doing what you do best and put you on track to become a leader in your field.

The majority of sales proposals fail because they’re focused on the seller – not on the customer. Writing a sales proposal that’s based on the customer greatly increases the seller’s chance of success. Here’s how to do it.

Do it With Style

Writing a successful proposal requires a sound understanding of the customer. What you’re trying to do is to point out that your product/service is the one that best fits in with their needs, so your proposal should read like the description of a strong and successful partnership between the two enterprises.

Clarity is essential. Customers don’t want to read a lot of hype or jargon. Put yourself in the customer’s position and ask what they’d really need to know so as to be able to say “Yes, that’s exactly what we are looking for”. They don’t want to know everything about you; just so much as it takes to reassure them and to differentiate your offering from others.

Be as concise as possible. However, even if your two businesses have had previous interaction, don’t assume that the customer knows everything about you. The decision maker could be someone whom you’ve never met.

The proposal format should resemble the style of documentation the customer uses for their own materials. A document that incorporates the customer’s typeface and corporate colors is much more likely to be perceived as ‘familiar’ and therefore more satisfactory.

Answer the Buyer’s Most Important Questions

The proposal has to anticipate the questions the customer might want answers to while they’re deliberating over which proposal delivers the greatest package of benefits. Customize the proposal using in-depth knowledge at every possible point.

Outline for a Winning Sales Proposal

Start with an attention grabbing title that demonstrates your understanding of the final result the customer is looking for - Communications support for the global expansion of XYZ Company is an example.   Follow with enough customer information to show you’ve done your homework and know something about their business and then position your company as a partner in achieving their goals.

Include a brief statement of your company’s position and references from other satisfied customers. It would be especially helpful if you could show previous success in a situation similar to the one faced by your prospect.

The next step is a ‘call to action’. What is it the customer has to do to conclude the transaction? Include a timetable for implementation that shows when each step of the sale will take place if they accept your proposal.

Closing the Deal

In most cases the proposal itself won’t close the sale. It’s there as a tool in the selling process but the sale still has to be completed by a salesperson.  Be helpful and attentive to the customer throughout the process and offer to provide any assistance they might require in helping them make their decision.

Following up after the proposal has been submitted is essential. Never forget the value of personal interaction and even if the first proposal doesn’t succeed, you’ve made a number of valuable contacts for the next time.

“If you work just for money, you'll never make it, but if you love what you're doing and you always put the customer first, success will be yours.” – Ray Kroc (founder of McDonald’s)