Monthly Archives April 2019

Finding Value Through Outsourcing

 

By Jerry Sarno
Strategic-Partner, Schooley Mitchell of St. Joseph

Being successful in business is rarely a solo endeavor. It usually takes a team: trusted mentors, solid employees, good leadership, the right financial backing. Even though we know it’s hard to go things alone, we lose sight of this when faced with day-to-day tasks.

Most businesses have meager beginnings. Often the founder is in charge of everything from accounts payable to HR, marketing to IT. It’s understandable – we try to do as much as possible ourselves in an effort to save money. Eventually, that strategy usually backfires. As the business grows, demand grows with it and soon, a single person just can’t keep up.

Enter outsourcing. Many business owners may be reluctant to outsource or hire outside help out of fear – scared they’ll lose control or look vulnerable. Perhaps they’re nervous the person they bring in won’t have their best interests at heart or will cost them serious coin in the long run. As an independent consultant, it’s something I see all the time, especially small and medium-sized business owners who fall into the trap of thinking they can do everything themselves.

The truth hurts: no one can do it all. Albert Einstein had it right when he said, “Genius is the ability to focus on one particular thing for a long time without losing concentration.” He understood the concept of jack of all trades; master of none. By spreading ourselves too thin, we end up doing nothing well. We forget what we’re good at and truly passionate about. Those tasks, not coincidentally, are usually what make us the most money.

By identifying tasks and seeking outside assistance, business owners can realize plenty of benefits. Some include:

  • Time – It is the scarcest resource in today’s economy. An outsourced expert can save you substantial time by handling tasks that interfere with the work you should be – and need to be – doing to make your business thrive. Engagements can be of varying length, but for complex projects consider partnering with someone who will stick with you in the long run to ensure demands continue to be met.
  • Money – Outsourcing can help you mitigate operating costs. Too often we mistakenly think the cost is too high to engage an outside consultant when, in fact, it is far more economical than hiring a full-time staff member to handle the task. That is, of course, if you can find someone with the credentials needed and keep them busy enough to justify adding another salary to the books.
  • Security – There are so many aspects to running a successful business, it is unlikely someone is an expert in all of them. Enlisting the help of an expert gives you peace of mind knowing you’ve made the right decisions and taken the right steps to take care of business. No longer will those nagging questions keep you up at night.
  • Knowledge – There are so many aspects to running a successful business, it is unlikely any one person is an expert in all of them. Enlisting the help of an expert gives you peace of mind knowing someone with specialized knowledge is giving you proper advice tailored to your specific needs.

Even the strongest companies can benefit from outside assistance. In my work as cost-reduction consultant, I routinely encounter businesses who think they have their expenses and services under control when, in reality, there is plenty of room for improvement and cash savings. Next time you’re facing a challenge or hit a roadblock, consider outsourcing it to a professional in the field. Then spend your time focusing on what you do best: growing your business.

 

Jerry Sarno is a Schooley Mitchell Strategic-Partner based out of St. Joseph, Michigan. For more information on how Jerry can reduce your costs and save you time, visit www.schooleymitchell.com/jsarno

Free shipping: Taking advantage of the demand

free shippingAccording to an investigation from Stitch Labs using data mined from more than 1 million US Shopify orders, small businesses are three times less likely to offer free shipping than their larger counterparts. However, the same study showed that customers avoid paying for shipping at all costs, with 44 percent of all ‘shopping cart abandonment’ being due to shipping costs.

Here are a few things to consider when attempting to take advantage of the overwhelming demand for free shipping – without it costing you too much revenue.

Shipping-Included

Obviously, one way or another, someone is paying the cost of shipping. But offering something for free can influence your customers into thinking they’re getting a better deal – even if, in the end, they’re paying the same price.

By using a shipping-included strategy, you avoid the gut check that online shoppers experience at the checkout screen. That jump in price when the shipping is calculated is when the majority of people will back out of the purchase. Shoppers are more likely to buy a 20 dollar item with free shipping than a 15 dollar item with a shipping fee of $4.99.

Free shipping increases your conversion rate at checkout – and you can bet that if your competitors offer free shipping, you’re doing yourself a disservice by not offering it as well. And don’t make the mistake of assuming your customers won’t shop around. According to AdWeek, 81% of shoppers conduct online research before purchasing.

Watching the Margins

When you’re competing with e-commerce titans like Amazon with their Prime offering – who are willing to do things like swallow a $7.2 billion loss on shipping costs in order to maintain their massive market share – you need to find a balance between your margins and your conversions.

Eating the cost of shipping will have a much bigger impact on the bottom line of a small business compared to a large one. For high-ticket items, it can be easier to offset that cost with markups because they’re less noticeable and you need to make fewer sales overall to cover the costs. For shops that sell less expensive items, markups are more noticeable and could lead to an overall decrease in sales – even if you’re offering free shipping.

Minimum Order Thresholds

For those businesses that can’t get away with markups, one way to help offset the cost of offering free shipping is by offering it for those who spend over a minimum dollar amount in total. Not only can this save you money overall, but it also encourages your customer to buy more then they initially intended.

The psychology behind the minimum threshold is clear – people want to take advantage of a deal if they can, and they’re more than willing to convince themselves that spending extra in order to qualify is the right move.

In fact, a study from Comscore and UPS came to the conclusion that 52 percent of American online shoppers purchased more than they intended just to hit a minimum threshold for free shipping.

Conclusion

Of course, there are several other options. Offering free shipping to qualifying members, free shipping only for specific items, free shipping if you buy within a certain period of time, or even free shipping to your nearest brick-and-mortar store for pickup. The best way to find out the offering that is right for you is by testing different methods and collecting the sales data.

Whether you’re offering free shipping on all purchases, a minimum purchase threshold, including shipping costs in your pricing, or some other method, one thing is clear: shoppers really love the word ‘free.’

The pros and cons of payment processing integration

Payment processing integration can be very valuable to your business. It allows for transaction data to transfer automatically into your accounting or ERP system when you make a sale – whether its online, through a mobile app or using a point of sale terminal. Here are a few of the pros and cons of integration.

Time and Money

Payment processing integration can save your business valuable time that would otherwise be spent manually entering transaction data.  This not only reduces the cost of labour and frees up your employees to tackle other tasks, but also eliminates human error. While there is usually an upfront cost for setting up integrated payment processing, it’s generally affordable and will likely save you money in the long run.

Security

Integration can also help with your data security. End-to-end encryption provides a high standard of security while still giving you visibility and access into your business operations and sales records. This security protects your business from threats that are outside of your control, so you can worry less about data breeches and fraud that could potentially compromise your private information.

Customer Service

An integrated payment solution will give you more data to analyze in order to improve your business. Tracking sales can improve your targeted marketing and promotions while giving you a keen insight into your inventory and deliveries. Tracking this data efficiently can have a huge impact on your customer service that will ultimately drive more business to your company.

Vendor Negotiation

Unfortunately, despite all the benefits of payment processing integration, it can also put you in a terrible situation when it comes to negotiating your rates and services with your vendor.

While software integration can be very valuable, you need to be very aware of its potential for exclusivity before you commit. Otherwise, you could find yourself in a position further down the line where your rates have increased but you have no feasible way to switch vendors. Your hardware is integrated with your current vendor and swapping would both be expensive and cause a massive interruption in service.

Conclusion

The best bet is to do your research and find a payment processing integration solution that is not exclusive to any sole vendor or system and has clear guidelines in place in regard to switching vendors while maintaining your data and integration tools.

The end-goal is to have your point-of-sale integrated with a secure yet flexible software suite that will help you save time and money, but not at the expense of locking you in with any one specific vendor. That way, if you end up needing to negotiate rates or services, you’re not stuck in a situation where your vendor is firmly holding all the cards.

What does 5G mean for you and your business?

smartphone-5g

For months, major carriers have been hyping 5G networks and their potential offerings: faster speeds, more stable data connections, and (another) massive influx of Internet of Things (IoT) devices. 5G networks have been in development for a while, and they’re expected to launch worldwide by 2020, working in tandem with current 3G and 4G tech.

Despite the hype, we haven’t seen much in the way of proof apart from some basic tests and fixed rollouts to certain cities in 2018.

However, that’s all about to change. On April 3rd, three major telecom carriers in South Korea abruptly launched the first real 5G network — just an hour before Verizon tweeted that they launched their own 5G network in Minneapolis and Chicago.

With these high-profile launches, 5G suddenly feels very real. Here’s how it’s going to affect you and your business going forward.

Upload and Download Speed

According to a study by Ericsson, 50 percent of US customers will have access to 5G in as little as five years. 5G represents the next generation of data and will eventually replace your basic 4G LTE connection. This means drastically faster download and upload speeds. Average download speeds of 1GBps are projected to be the norm, which is very fast for mobile connectivity.

The benefits of increased average speeds are self-explanatory — the less time you have to spend fighting with the internet, the more time you have to spend on running your business.

Latency

One of the less obvious benefits but perhaps the most substantial when it comes to tech innovation is the reduced latency that 5G will bring. Latency is how we measure how long it takes for a packet of data to travel from one point to another. The lower the latency, the faster your device can communicate with its target.

Not only is this extremely important for businesses that rely on IoT enabled devices, but it can also strengthen your company’s tech infrastructure and lower the vulnerability of your devices.

Reliability and Flexibility

5G is expected to be very reliable when it comes to connectivity. That means your connections will stay strong and drastically cut down on interruptions. The benefits of this reliability are most clear when considering their application in devices relating to self-driving vehicles or medical support.

In addition, 5G networks promise to be much more flexible then their 4G counterparts. For example, businesses will be able to create multiple virtual networks with just a single physical system. This is called Network Slicing, and it will lead to a better user experience for your customers and provide a robust and cohesive infrastructure for you.

Capacity and Energy

5G is being designed to have a much greater capacity, which means that a single network can better support multiple resource-intensive items at once. HD streaming, IoT devices, virtual reality, high-speed data transfer — all these services can be very demanding. With 5G, you will be able to maintain high speeds even when multiple users on your network are running demanding software at the same time.

Despite all these perks, 5G will be a benefit to your energy consumption. It’s being designed to demand less power from your devices, meaning 5G will actually extend your battery life instead of draining it faster.

Conclusion

From secure banking and automation to digital medicine and self-driving cars, 5G will have a major impact on the world. It’s the catalyst for the jump that fast, reliable connectivity will make from our desks to practically any device on the planet, mobile or stationary. It will be one of the most impactful changes to the internet since its invention.

5G will affect everyone, from the Fortune 500 to your local grocery store. It’s important that you consider how this new technology might affect your industry, because those that are most prepared to take advantage will surely prosper.