Tag: Business

5 REASONS WHY BUSINESS EXIST

Businesses were known to engaged in series of economic activities with the aim of changing the owners’ lifestyles and transforming their customers’ life. These activities which usually take place within a certain location, a region, across the border were embarked upon in order to: create employment, create wealth, contribute to gross domestic product, raise the standard of living and achieve profitability where directed towards providing the best service as to be required by their customers. In this article, we will outline the reasons for a business existence and the value it bestowed on its owners.

CREATING EMPLOYMENT
The business have created an avenue for the unemployed to be absorbed, trained and gained experience. This trend seems to be on an increasing side as about 90 percent of businesses had offered jobs to more than 50 percent of the world population. Apart from engaging the services of skilled and unskilled persons, the business also provides a medium for a person to take advantage of opportunities that exist to set up the business of their choice in manufacturing, arts and craft, information technology, marketing and other menial jobs.

CREATING WEALTH
Various activities as engaged by business entities had resulted in accumulating cash, construction of buildings, acquiring lands, possessing intangible and generating perceive incomes that have improved the lives of the business owners for the better. For a business to create wealth entails; the incomes realized from other activities can be invested in other ventures therefore fulfilling it’s need for growth and expansion.

RAISING STANDARD OF LIVING
The business has enable the customer to have access to food, clothes, shelter, social safety, comforts and luxuries which he is accustomed to enjoy. Due to the active participation in economic activities, the business was able to contribute to the total amount of goods and services produced in an economy thus; invariably increasing national income and improving the standard of living.

CONTRIBUTING TO GROSS DOMESTIC PRODUCT
The business has tremendously contributes towards producing market and non-market products. This can be attributed to activities of the formal small and medium scale enterprises which contributes up to 40 percent of gross domestic product in emerging economies and 72 percent of the gross domestic product in the Origin for Economic Cooperation and Development (OECD) countries and corporations which account for more than billions of dollars in revenue.

PROFITABILITY
Profit is the life blood of business that is essential for it’s survival. Profit has creates opportunities for a business to pay dividend to shareholders, expand it’s operations, acquire new assets, acquire other businesses, embarked on product and market development and uncovering new productive methods through research and development.

Business has outrightly transformed lives by providing jobs, creating wealth and contributing substantial share of gross domestic product. This can attest to the fact that about 50 percent of the world population where engaged in series of productive activities which creates an avenue for customers to obtain the necessities of life and avails the business owners the opportunity of reaping the gains from their investment.

SALES AS A PERFORMANCE INDICATOR

In the course of offering Products a business will give all it takes to outgrown competition. This is made possible by producing the exceptional products or using state of the art facilities. This implied that to satisfy the customers a business needs to evaluate if its sales have grown or decline and identify the factors that are responsible for such. This among others will enable a business have focus and know where it is heading to.


UNDERSTANDING SALES
Sales are amount of goods and services offered or rendered by a business inorder to satisfy customers needs. Sales is one of the most important variable which contribute to business growth and value creation.


BASIC SELLING OBLIGATIONS
• Finding People Searching for Products/Services: To improve sales activities, a business needs to dedicate time and resources towards attracting customers. Locating Prospective buyers may require a business to dedicate considerable time in generating leads by engaging in activities via developing ads to reach new prospects, sending direct mails, participating in trade shows, attending networking events, joining forums involving the target market and using social media forums.
• Changing Possibilities into Customers: Upon locating Prospective buyers the next task is to convert prospects into first time customers and subsequently making them repeat customers. To consolidate its market position a business needs to transform its customers to client people; to whom it may give premium treatment. Having converted prospects into repeat customers, a business should solidify its business-customer relationship by signing them into programs that may be beneficial to the business and thereafter making them advocates.
• Retaining Customer Delight: Satisfaction is a person’s feeling of contentment as a result of consuming a product or benefiting from a service. In following up to know the extend a customer have been treated, a business may initiate different methods to ensure proper things are put in placed so that factors that shape satisfaction can be understood and necessary changes affecting operations can be made. By having a highly satisfied customer also indicates that the customer stays loyal to a company’s product, talks favorable about the company and its products, pays little or no attention to competing brands and becomes less sensitive to the company’s price offers.
• Forecasting Income: Sales is forecasted by breaking down projected sales figures into sales territories and customer groups. The figures obtained from sales forecast are usually used for setting up of budget for sales force operations, sales promotion budgets and allocating the projected sales figures over the market area being served. Some interesting facts about forecasting sales is that; sales forecast aid a business in financial planning by; projecting cashflow, scheduling production runs, timing purchases, controlling inventories and establishing cost standards for accounting control.


BENCHMARK FOR SALES LEVEL
• Breakeven Sales Level: At breakeven sales level the business sales level will cover fixed cost without any thing left as profit.
• Target Point Sales Level: At target point sales level the business sales level will cover fixed cost and what remains will be the profit.
• Target Return on Sales Level: At target return on sales level the business sales level will cover fixed cost and what remains will be the profit. To determine the return on sales of a business the amount of profit will be divided by sales.
• Shut Down Sales Level: At shut down sales level the business will cover its fixed cost but will have no amount of profit left. The shut down position also indicate that; if sales is above the shut down level a business may make profit or loss but the business may likely cover its overhead cost. In another situation being below the shut down level may indicate how a business will experience cash drain.


MOTIVATING SALESMEN
• Quota System: A business may establish quotas on sales volume, number of calls and number of new accounts.
• Sales Contests: A business may run sales Contests by offering cash or non-cash prices. Such contest should be organize in such a way that it will stimulate weaker salesmen becoming winners.
• Conferences and Conventions: salesmen looking forward to sharpen their skills may attend conferences and conventions out of their daily schedules for the purpose of eliciting useful information on: products, sales techniques, management view points and expectations.
• Communication from Management: In order to inspire the sales team a formal communication may be written by the management transmitting specific and practical suggestions.
• Training and Development: Newly employed salesmen need to be train before given any responsibility. By Training the newly employed salesmen, they should be impacted with sound knowledge about products and customers. While the experience salesmen should be retrain to handle new products or new customers. A good training program should be able to inculcates: enthusiasm, positive attitude towards selling and sound ethical standards.


Every business journey starts from idea generation and ends at maturity stage. With dedicated efforts towards customer satisfaction a business gives priority in increasing its sales and profitability. For a business to attain a superior position in the market and outweighs competition, it is imperative to execute sales tasks, figure out sales levels and motivates the sales team.

HANDLING A DIFFICULT CUSTOMER

A difficult customer is a person who has not been treated fairly due to poor service delivery. As a result of being disappoinmented the customer may feels short-changed or out-righty cheated out which may lead to complains or even threatens to take his business to a competitor. A business can win back a difficult customer by adopting the following process:

1. Letting the Customer Vent- When customers are upset they want to express their feelings and need the problem to be solved. This is not applicable for some service providers who regard customer’s venting as a waste of time because they want to move on and solve the problem. However, in trying to resolve a situation without first listening to the customers’ feelings will not help matters but by allowing your customer to vent his displeasure will makes him believe you are giving him a listening ear and solving the problem half way. Nothing heats up a customer with a problem faster than being told to calm down while they are venting. However, the best plan is to stay quiet and not make matters worse by interrupting the customer. Let the customer know that you are listening to him by:
• Nod your head frequently
• Say uhh-huh from time to time
• Maintain eye contact

2. Evading Negative Filters- The friction between a business and its customer is often worsened by how the business interpret the behaviors of the customer. Businesses that are found of tagging their difficult customers by names will dramatically changed how a customer is view, spoken, or listened to. If left unchecked, negative filters can get out of control and spread in an uncontrollable manner thus, creating a situation in which a positive communication with a customer will be extremely hard to managed. In handling a difficult customer there is need to switch to a service filter by asking a question like: “what does a customer need and how can it be provided ?” This question provides an alternative filter because as soon it was asked, a business focus changes. By changing a business attention, issue that needs to be addressed will be illuminated rather than a personal feelings about the customer’s behavior.

3. Expressing Empathy- Empathy works wonders in calming a difficult customer. By letting a customer knows that you understand why he is upset, you will build a bridge of rapport between you and them. In handling a difficult customer empathic phases should be used to convey and show the customer that his situation has been understood. The types of phrases that best express empathy towards a customer include statements like:
• I can see why you feel that way.
• I see what you mean.
• That must be very upsetting.
Some service providers feel uncomfortable to apologise to their customers because they see such as an admission of guilt. By saying “i am sorry” to a customer does not imply that you did anything wrong but it simply conveys that you are genuinely sorry that the customer had a bad experience. By using a warm and caring tone, you will enhance the meaning and effectiveness of empathy.

4. Active Problem Solving- Begin active problem solving by asking questions that Will clarify the cause of the customer’s problem. As you ask the customer questions, be sure to listen to everything he/she says and don’t jump to conclusions. Sometimes customers leave out critical information because they think it is unimportant or they just forget to mention it. Upset customers rarely present the fact of their story in a neat little package. In order to get a true picture of the customer’ situation, you may have to do a detective work to make sure that you understand everything the customer is telling you. Use the mirroring technique to summarize your understanding of what the customer says and then reflect it back to them. The customer then has the chance to verify or correct your understanding of the situation.

5. Mutually Agreeing on the Solution- After you gather all the facts, you need to work with your customer to come up with an acceptable resolution. If you haven’t discovered what will make him happy, ask. You may at this point find it necessary to take a brief time out from the customer so that you can do the behind the scenes work necessary to solve the problem. In this case, be sure that the customer knows exactly why you are asking him to wait and how long it will take for you to get back to him. Finally, when you both agree on how to resolve the problem explain the steps that you will take to implement the solution.

6. Follow Up- You can score big points on the service scoreboard by following up with your customers by a phone or an email to check that the solution works. If you contact the customer and discovered that he is not satisfied with the solution, continue to look for more workable solution.

Poor customer service is detrimental to any business. When customers do not feel valued, it makes it much easier for them to take their business elsewhere. Understanding the consequences of poor customer service is essential to delivering high-quality service.