Why having a search budget might not be necessary

Really interesting post from The Rimm-Kaufman Group on why you shouldn’t have a search budget, maybe it’s time to change our thinking in this current economic climate – the sky’s the limit perhaps!

Investment Banks call me just about every week these days, asking whether our clients’ search budgets are growing or shrinking given the state of the economy. Their interest is in valuing Google and Yahoo stock, but I’m not sure my responses are terribly helpful to them.

Very few of our clients have set budgets for search. The vast majority of our clients are retailers, and almost all of those view search as a direct marketing channel with well understood ROI expectations. How much they spend is therefore a function of market opportunity, not board room decision.

Granted, many of our clients have been forced to think about top line – bottom line trade-offs, but they’re thinking about those trade-offs as direct marketers do: what is the incremental ROI on the next X dollars spent in this channel, and how does that compare to other channels? This is very different than deciding: “We’re going to spend Y dollars on search this quarter”.

I get the sense that our clients are in the minority on this, but I don’t really understand why.

Why would a company keep spending money when the ROI turns south? “By golly, we’re going to spend this last $10K even if it doesn’t generate a sale!”

Why would a company stop spending money when the ROI is good? “I know that every time I give you $10 you’ll hand me back $11, but I can only spend so much…”

Neither of these statements make any sense to us.

Targeting ROI with undefined budgets is a fundamentally different approach, and it informs search practices. Algorithmically, our bid management system was designed to generate the maximum sales/margin or leads without exceeding the client’s efficiency target(s). Other systems are designed to get the most sales/margin/leads they can from X dollars in advertising. That’s a different algorithm, and we think the wrong one.

The problem with budgets generally is best illuminated by the specific example of campaign budgets. One obvious question is: why do I only want to spend X on this collection of ads? Let’s assume there is a reasonable explanation for that, there is still another question: if I’m actually hitting these caps am I managing the campaign properly? The answer to this is pretty clearly “no”.

Suppose the campaign can only spend $1,000 in a day. At $1 per click you hit the campaign budget after 1,000 clicks. Wouldn’t you rather have 2,000 clicks for $0.50 each? In all likelihood, you’d double your sales on the same spend. Granted, maybe the ads are in position 7 all day, rather than position 3 for a few hours, but who cares? Is there any reason to generate less traffic and sales on the same spend?!? Any time caps are hit, by definition you’ve lost opportunity. Lower bids to get maximum traffic for the dollars spent.

With that tuning however, you run smack into the first question again: now that the campaign is more cost effective, why shouldn’t I spend more on it?

Those who can’t shake the budgeting habit often try to pick a budget that will generate the ROI they need, but that’s still backwards. Why guess at the market opportunity in advance, when you could instead seize the day with flexibility?

A number of our clients have some component of branding in their program, and budgets there certainly make sense. The more divorced the goals are from profits the more budgets make sense.

However, for those of you looking to make the most of search in these trying times, consider eliminating fixed budgets as a first step.

Top 7 Hiring Mistakes for Startup Businesses

Avoid these pitfalls and build a team of talented employees.

Building great teams is never easy.

A quick look at the sports world confirms this. Coaches come and go, players are free to seek new teams and owners are free to sign players who fit certain roles within the limits of payroll.

In business, it’s equally difficult. Even established businesses suffer from hiring and team-building mistakes. Unlike a startup, however, those companies can afford to make a hiring mistake without significantly impacting their overall operations.

Unfortunately, startups don’t have that cushion of profit to cover up a hiring mistake. That’s especially true in a small company, where one person who is not the right fit could mean that 25 or up to 50 percent of your work force is now a big problem.

The good thing is there are some hard and fast hiring rules startups should follow. Most hiring issues occur as a result of looking to keep costs down or not having a clear vision about what the business is and where it’s going.

However, cutting corners in the hiring process now can mean trouble for the business later. To avoid trouble, here are the top seven hiring mistakes many startups make:

1. Hiring someone just because you know them. This means friends, former co-workers, family members or your own children. For a husband, this means hiring your wife. For a wife, this means hiring your husband. Even part-time. There needs to be a certain sense of objectivity and accountability in the workplace. Friends and family expect to be treated to a different standard–and they should. Away from your business, but never in it.
2. Hiring someone to “help them out.” Some owners have loads of empathy for workers on the rebound, or people in trouble. Being a “savior” to help someone may not help your business. Instead, hire someone who can add value to the company and its operations. Those are people who are eager and willing to go the extra mile. They also won’t be in trouble or looking to take advantage of what always turns into a bad situation.
3. Taking someone on as a partner because you can’t afford to hire him. Business can be hard enough as a sole proprietor, but don’t think it’s an advantage to bring on a partner, especially if you can’t afford to hire him as an employee.

   If you do, you give up 50 percent of your company to someone who may or may not thrive in an entrepreneurial setting.

   An alternative is to outsource projects or work on a fee basis. Better yet, work out an arrangement at an advisory or coaching level. Then 100 percent of your company remains yours. Plus, it’s easier to walk away if something goes wrong.

4. Hiring someone to do a bit of everything. A “jack of all trades” approach is fine–for the owner. But the specific functions of a business need to be staffed with people who are specialists.

   Instead of hiring one person to do the accounting and administrative work, think of this as two jobs for two different people.

   The reality is most people simply don’t have the skills or expertise to do a variety of jobs. The key is to find people with skills that complement your own, and put those people in specific jobs with specific roles.

5. Top-down hiring vs. bottom-up hiring. This method of hiring also leads to getting people on the team who are generalists vs. someone who’s the right fit for a single job.

   Hiring from the bottom up means filling specific roles with specific skill sets with people who will be doing jobs that are typically lower paying but take up large amounts of time. This frees you from having to do time-consuming tasks. It also gives people an opportunity to add value and expand their roles, which ultimately helps grow the company.

6. Not knowing what job you want to hire for. Just hiring for the sake of hiring, or hiring a generalist to bring some order to your internal chaos, is not a hiring strategy–it’s just more chaos.

   Clearly define roles for any new hires. Not only will you avoid hiring a non-productive person in an ill-defined role, you’ll start attracting people who’ll add real value to their role and your operation.

7. Hiring for the job you hate. Earlier I said you should hire people with complementary skills. This doesn’t mean you should hire someone to avoid doing what you may do best. In short, don’t hire a bookkeeper when you know how to do the numbers–especially when your top line sales may be suffering.

In this case, you do the accounting and be on the lookout for a really great sales person. The growth in sales will fund the accounting position soon enough. But you won’t get there having two people in-house skilled at crunching numbers.

Hiring is all about finding the right skills, personalities and attitudes to fit your overall vision and mission for your company. Having those two guideposts in place will make it easier to make good hires that will benefit your business in the long run.

Then you can own one of the few big businesses that doesn’t make as many hiring blunders as your competition.

12 Reasons for Investing in a Franchise

There are some obvious advantages in investing in a franchise, the most important being that you will be buying into a tried and tested business concept. It may more expensive, (although there are some low cost franchise oppotunities out there), than starting your own business in the same sort of market but it does bring with it a recognised established brand image. It is estimated that whilst only one in five new-start businesses will still be trading after five years, some 90% of franchise operations will have succeeded.

There are numerous benefits in investing in a franchise some of which are:

1. You will have the opportunity to purchase a business concept that has already been tried and tested in the market.
2. The risks of setting up a franchised business are substantially reduced when compared to establishing a new business in the same market.
3. A franchise will provide a brand image that the public will recognise.
4. Business premises will all comply with an established interior and exterior design to assist with brand promotion.
5. Specifications for the equipment required by the franchise will be clearly identified from the outset.
6. Publicity and ongoing marketing can be arranged by the franchisor as part of the contractual agreement.
7. Comprehensive training in all aspects of running the business will be given to you by the franchisor, both initially and on an ongoing basis as methods are improved.
8. The ‘operations manual’ received as part of the franchise will give standardised procedures for accounting, sales, and stock control.
9. The franchisor may be able to provide you with better terms for the centralised bulk purchase of raw materials or goods used by the franchise.
10. As the franchisee, you should benefit from the franchisor’s ongoing research and development undertaken to improve the franchised product or service.
11. Networking with other franchisees will provide both you and the franchisor with opportunities for review and improvement of the operating procedures.
12. The franchise should have a clearly defined geographical area within which the rights of the franchise are protected from other franchises from the same franchisor.

The final advantage of investing franchise opportunities, as opposed to starting your own business, relates to raising funding for the venture. Gaining finance to purchase a franchise, (6 common costs) is generally easier than gaining finance to start a new business. The reason for this is that the franchisor will be better able to provide estimates of the likely sales and costs, thereby giving a more accurate prediction of profit levels.

Not sure where to look try this list of top 500 franchises. Also here’s a handy Introduction to Franchising PDF to print off and read to bring you up to speed with the ways of franchising.

Top 5 Ways to Increase Your Income Successfully

If you want to get more money out of your work, consider these 5 options.

1. Change jobs.

Money isn’t everything. Financial gain isn’t the only consideration when evaluating your current employment. Work that you enjoy doing will give you greater satisfaction, a feeling that no amount of money can provide.

You’ve probably heard the saying, “Do what you love and the money will follow.” Successful people concentrate on their work, the business, while unsuccessful people focus solely on the money.

Think it over.

2. Take on an extra job.

Perhaps your primary job gives you great satisfaction, but doesn’t yet provide a sufficient income. Taking a second job may be a better solution than changing jobs. Like everything else – it depends on the individual. You know best. You have to consider the consequences; working two jobs means there will be less time for everything else and added pressure. Ask yourself if the increase in income is worth the additional taxes you’ll pay, time you will spend, etc.

3. Invest more time in your present job.

Another possibility is to put in more time into your present job. Since you are probably paid according to time or efficiency, your income will probably rise with more time invested. This alternative is similar to the one above, that of increasing your workload, except it doesn’t require acclimating yourself to a new job and therefore you don’t need to concentrate on (and master) two different jobs. However, the work may be monotonous (where adding an extra job might allow combining mental and physical work, a possible advantage) or less rewarding, thus, it might not be profitable to bet everything, so to speak, on one horse.

4. Be more efficient in your present job.

One good variation is to be more efficient at your present job, which often results in higher earnings. Think about how you can save time and money. Search for bottlenecks and fix them. Consider the Paret Principle – 80 percent of your income comes from 20 percent of the work done. Concentrate more on effective tasks and less on auxiliary ones that don’t bring in money directly (like preparation, cleaning, etc.).

5. Learn to enjoy your present job.

You’ll move towards your goals faster if you organize your present job so you enjoy it more. Make a list of things that make you happy at work or bring you satisfaction from your job. The list might include: what you have, what you have always wanted, where your advantages are, how tasks can be done in a pleasant and fun way and so on.

You’ll find the job itself probably isn’t so bad, it’s just that you have been focusing more on the negative, rather than the positive, aspects. Be optimistic and start to take an interest in your field of expertise. Associate with people who do similar work and enjoy doing it – allow them to pass their enthusiasm on to you.

Maybe you won’t get a raise at first, but you’ll be much happier and not only at work. If I asked you, which you would prefer, money or happiness, what would you say? Well, there, you see…

I promise you that over time you will be noticed – if not by your superiors at work and business associates or partners, then by others. There are always plenty of jobs for a worker who is conscientious and an expert in his or her field.

Those who are the best in the business have doors opened everywhere, regardless of whether such a qualified person is needed right then or not.

Wise employers employ someone the moment they realize that a person can benefit their company. They don’t wait for an empty position where they would be forced into a feverish search for an appropriate candidate.

Accommodative Financial Solutions business loans

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AfsLoansOnline have expert consultants to answer any questions you might have, and to consult with you throughout the entire loan process. Either apply online or call their toll free number from within the USA: 877. 207. 1396