bizthreads.net: Business Information for Entrepreneurs by an Entrepreneur

Real estate is big business, but there are changes afoot and they should concern all of us:

According to a press release from RealtyTrac , foreclosures are up 65% over this time last year.

I've made some calls to realtors I know and they have confirmed how serious a problem it is… and suggested this reason:

Incredibly low “teaser rates” offered a couple years ago are now ending and the regular rates are kicking in. That means that housing expenses for many people are now increasing — and in many cases, those expenses are increasing much higher than expected.

As a result, foreclosures are on the rise. I don't pretend to know a lot about the economy or the real estate market but I can't imagine that a huge increase in foreclosures can be good for anyone: many homeowners now have to sell at a loss to avoid foreclosure and will be forced to either rent or buy a smaller home. Those who enter foreclosure run the risk of serious repercussions on their credit report. And a flood of new homes on the market will drive housing prices down… but who is out there to buy?

http://seattlepi.nwsource.com/business/291341_msft3d07.html

I'm a big user of Google's map function: with the amount of traveling I do I'm on there about once a week plotting my trips, both local and long-distance. I'm not a north — south — east — west person… I prefer landmarks (turn left at the church, turn right at the blue store, etc.) so I use Google's hybrid system which combines maps with satellite imagery.

Microsoft, in its ongoing attempt to unseat Google as the king of the online universe, is offering users the ability to zoom through 3 dimensional views of major cities. Google does offer a similar service but Microsoft's seems like it will be more widely available (at least for now).

This is helpful for landmark travelers like me. And, it's just plain cool. But more importantly there are some serious potential advertising opportunities as well: store owners will likely be able to create store-front images and electronic billboards targeted to the person searching (so that a senior looking for directions might not see an indie-rock music store but a teenager might).

Here's what I predict will happen:

1. In the near future we'll see some advertising sales.
2. Google will move their similar product into the mainstream (it is currently a separately launching program).
3. Users will prefer this function to maps.
4. Google will move forward with advanced advertising techniques.

Dealing with customers is a challenge because every person is different. Some customers love to linger, others want to get in and get out. Some customers want to be led and others want to control the process.

Your challenge as a business owner is to discover what each customer wants (not just the product or service but how they want to interact with you) and give it to them.

Do they want to linger? Spend an extra two minutes with them chatting.
Do they want to transact quickly and move on? Try to speed up your process quickly and let them know that you are hurrying JUST for them.
Do they want to be led? Tell them what your transaction process is at the beginning then tell them where they are every step of the way.
Do they want to lead? Tell them what your transaction process is at the beginning then ask them at each stage if they are ready to move on to the next step.

I believe that many lessons can be learned from all kinds of businesses.

It’s important to look back in order to plan for your future business growth. This is an idea I learned from a local grocery store, whose former manager is a friend of mine.

We were talking about his job as the manager of the local grocery store and he told me about a daily logbook that they kept. Everything went into this logbook, including promotions that they held, promotions that their competition held, weather, local events, etc. Then, they also included total sales for the day along with some of the bigger-moving items that day.

That way, they could review and see the effect that various elements had on their business. When the Super Bowl rolled around the next year, for example, they would consult the logbook and see that the sale of snack foods went up before the game. (I know that's an obvious one but I needed an example). Then they could stock their shelves accordingly.

I think the logbook is a great idea for any business to consider doing.

Dear Buzz,

I'm hoping to build my business and I've been offered several different financing options. Some of these options look very generous. Can you help me understand the differences between them?

Nicholas

Dear Nicholas,

Financing is a huge issue. But, it all boils down to two types of investing: equity financing and debt financing. Remember that the potential financer is looking for a return on his or her investment so don't just look at the dollar figure offered but also at what they are expecting in return.

Good luck!

Buzz

On my list of the businesses that I'm least interested in owning, laundromats rank right up there. They seem fairly boring and I know that rising energy costs and water bills are driving them out of business.

I haven't set foot in a laundromat since my wife and I got married and we bought a washer/dryer. But the other day I was driving through an area of town that I rarely pass through and I spotted what I think could be the future of laundromats.

This particular laundromat, located in the heart of the city's college community, offered the following amenities:

• Free satellite TV
• Free Xbox video games
• Free coffee
• Free foosball

… and other amenities. I was impressed. The few times I've visited laundromats I found them to be torturously boring places and I couldn't wait to leave. At a place like this, though, it's likely that I would have the cleanest clothes on campus!

Every time a customer completes a transaction, grab a stack of your business cards and write the customer's name on it, along with the date. When one of their friends comes in and brings that business card, send the original customer a bonus (and that bonus should be whatever is appropriate for your business, such as a coupon or a gift certificate, or cash).

This is a quick and simple way to get your cards into circulation. Now, from time to time I've heard complaints by business owners that customers were taking blank cards and copying the cards to give out even more. If that happens, I say great! Assuming you've structured your referral amounts properly, you should never be disappointed that someone is handing out your cards. As long as they hand out your cards and their friends come in and buy, keep sending them the bonuses!

In high school, I was the typical student: in school during the day and working at a part-time job at night. Normally I am an extremely dedicated employee but there was one time when I worked at a company for only one day and then walked out, never to return. That's not my normal style but in this case I was sickened by what I saw.

It was my first day working at a car dealership. Late at night, five minutes before closing, a customer came into the service area and asked for help. He wheeled his tire in with him and pointed out that it was flat. His wife was waiting at their car on the highway for him to return.

One good-hearted employee offered to repair the tire quickly. It should have taken about 5 minutes. Another employee, who was older and had much more seniority, said no… they wouldn't repair the tire because it was getting to be too late in the workday. The helpful employee insisted and the older employee was equally as adamant about not helping.

I was amazed as I watched the two men literally screaming at each other and it was the closest I had ever seen grown men come to fighting at that point in my life.

As they fought, I watched helplessly from my training computer as the customer rolled the flat tire out the door in search of someone else who could help him. I knew that there weren't many other businesses open at this time.

Do you know what happens around closing time at your business?

It's reported in this article MySpace to Block Illegal Use of Copyrighted Music that MySpace.com is tightening its restrictions on users who post copyrighted music and video, including deleting the accounts of repeat offenders.

I am certainly in favor of strengthening copyright laws, which have been fairly lax online these past few years. And it's not just coming in a trickle; copyright support is appearing in a torrent and the most popular sites, including YouTube and MySpace are finally willing to risk losing users who violate copyright laws.

It will be interesting to watch the full impact of these decisions unfold in the next year or two as those who use and abuse copyrights face the consequences. Of course, it also spells opportunity for some enterprising individuals who operate within the existing laws!

Dear Buzz,

I've just started a new business, a B2B software solution, and I'm out “knocking on doors” and selling my products. But I'm not meeting a lot of success. I'm pretty sure that I've targeted my audience and priced my products competitively. I don't want to lower my price, what should I do?

Marty

Dear Marty,

This is a common problem in sales. Many sales people knock themselves out by trying to build up additional service or by cutting the price down to practically nothing. However, neither of these two options is profitable.

Assuming that you're offering a quality product and excellent service, see if there's another way you can sell the product: perhaps it's your method and not the product that's keeping it from selling. (Do your competitors sell this way? If not, it could be an opportunity but there may also be a good reason why they don't.)

Another option is to think about a creative solution. For example, charge more for your product and work out a deal with a business consultant and corporate trainer who specializes in a related area and offer an entire solutions package: software, consultation, and training in that specific area.

Buzz