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We hope you find this arcthve useful. A subscription to The Small Business Advisor Newsletter is free. Subscribe now - it's easy! The Small Business Advisor Newsletter for October, 2001 ========================CONTENTS Notes, tips, etc Do you need a Business License? Successful Upselling ======================== ======================== (our most frequently asked question) Depending on the type of business you are starting, you may be required to obtain local, county, State or Federal licensing. It is important to determine which of these will be required before you start conducting any business since heavy fines are usually associated with conducting a business without proper licenses and permits. Most small and home-based
businesses will only require a local business license or permit. If you intend to operate a business from your home, be sure to also check local zoning requirements (again, at the courthouse) as well as any property covenants. Zoning requirements are those laws that regulate how property can be used and in some cases, some activities may not be allowed. Certain businesses and professions will also require a State license. Examples include attorneys, barbers, contractors, dentists, most businesses serving food, and social workers. Each State has an agency dealing with these types of businesses. Determine if your business requires a State license by contacting your local government offices. They should be able to give you information as to whether your business will require State licensing. In some cases, these licenses can be expensive. For a very few businesses, Federal licensing is required. Examples would be a business that is engaged in providing investment advice or dealing with firearms. In general, Federal licensing is required if the business is highly regulated by the government. It is best to consult an attorney in these cases. Each State has different business licensing requirements. A good source of State specific information is your local library. Most libraries now provide a “small business” section that includes informative brochures from the local government agencies. Ask at the reference desk. You might also check the link above in the NOTES/TIPS section. ======================== (a little lengthy for the newsletter but well worth reading. …ed) How to super-size every sale for increased profits Ask and most businesses will tell you. The key to their success is upselling. It is one thing to get the sale. It is far better to super-size that sale. Real profits come when you get the customer to buy a larger, more expensive, or more comprehensive product or service. The guy going into a pet store to buy a fish is a classic example. When the clerk sees Sam looking at the budget-priced gold fish, she leads him over to the much more impressive tropical fish. "As you probably know, you will need a fish tank," she says. "These beautiful fish only live in salt water. We have these $75 salt water tanks on sale for just $49.95." By the time Sam exits the store, he has purchased much more than the twenty cent gold fish he originally came in to get. He is proudly carrying home several exotic species, a $50 fish tank, fish food, a light, and other accessories. The sale went from a tiny twenty-cent transaction to nearly $100. The store's profit margin rose right along with it. You Are There To Help Upselling is easy if you think of your main business as helping customers. Think about the problems your customers come to you with. What does it REALLY take to solve their problems? Chances are, your customer needs a lot more than the simple inexpensive solution they first consider. By grouping together several different products and services, you can give the customer a more advanced package that goes much further toward creating a satisfying solution. Melissa buys a computer. Even though she is not thinking of purchasing anything more than the computer, a few questions posed by the sales person reveal Melissa will probably need new software to help her achieve the things she wants to do with the computer. The computer and new software have a pretty steep learning curve. Melissa will need help from an expert and likely a technician to install the network system her needs demand. The computer retailer anticipates Melissa's situation. Many of their customers are just like her. The store offers a "getting started" package with all new computers. It includes several software choices, instruction sessions, and help with installation. These things are cheap for the store to provide, but greatly increase the value of the purchase. Three Ways To Make Upselling Automatic Here are three favorite ways to build upselling into any purchase. Use these and customers will buy two or three times as much without even thinking about it. The day I put these ideas to work in my own business, I tripled my income. 1. Bundle several related products or services together. Drop the price below what the total would be if the customer bought all the products separately. When a customer inquires about a single item, point out she can get that item PLUS a great deal more by purchasing your bundle. You will find many customers just can't resist the bundle bargain. Announce your new bundle with flair. It can pull in orders faster than you can fill them, especially if you advertise heavily to existing and previous customers who already have a good taste for what you offer. 2. "It works fine by itself, but it REALLY works when you add THIS." If your product or service works much better with a complimenting item, be sure to tell customers about it. It is surprising how many products and services go hand in glove. It's hard to have one without needing the other. Years ago I wrote press releases for $75. A great many customers bought the release, but never got around to sending it to media. So I started writing AND sending press releases. The $75 press release became a $295 release-and-distribution. Almost no one bought the press release by itself after that. 3. If a little worked, a LOT will work even better. As soon as you learn a customer is having success with your product or service, offer them a good deal on more of it. Sheila's family likes the yellow bars of soap one company sells. When the distributor who services her account hears about this, he offers her a deal on six bars each and every month. This works as well for management consultants as it does for soap sales. If you solve one problem for a company, pitch them on letting you solve three or four more problems for them. Later you can convince them to let you handle all their problem solving needs. Successful upselling needs to be at the core of every business or professional practice. It can instantly multiply your profits. You might well go from just getting by to living comfortably, and from living comfortably to rolling in wealth. As you can see, super-sizing every order has to do more with planning than with any special selling skill. Get good at fulfilling a need. Then create packages and strategies that sell even more of your solution to each customer. Kevin Nunley provides
marketing advice, business writing, and popular promotion packages. Visit
him at http://DrNunley.com. Also, kevin@drnunley.com. Return to top of page - Back to Home Page - Back to Archive Index |