Grow Your Business July 2008

Dear Business Leaders,

Welcome to the July edition of the Xenex Group Newsletter. 

You have been sent this as a client or associate of Xenex Group. We regularly provided an interesting mix of articles on management, leadership and business process, for senior executives and business owners to better manage their people and resources.  We have also provided some important reminders for the 2008 grants and rebate claim programs, as well as contact details for key personnel. We hope you find these articles sufficiently stimulating for you to make a commitment to positive change within your business.

Best regards, 

Daniel O'Connor.
Consultant Principal.

July begins with our Research and Export Grant preparations.

With the financial year closed, we are preparing our questionnaires and templates for  grant  assessments, in order to help you determine if your company or projects will qualify for research or export grants in 2008. Xenex consultants are preparing the requisite paperwork for all past clients, so that their claims can be prepared, lodged and approved ahead of the rush. If you have not made a claim for R&D or export expenses and you believe you may be entitled to, please call Daniel O'Connor or Carol Cavill on 08 9335 7724 and obtain a first-level assessment questionnaire.

Our consultants are preparing the paperwork for subsequent claims (for those clients with on-going R&D and export activities) and towards the end of July we will be sending out the compliance paperwork for all registered clients to complete. Dont forget, if you have made an R&D claim with us, you can have your Export grant claim processed as part of your Grantfactory agreement.

Concurrently, we are seeing a larger-than-usual influx of business migration and this division is now very busy with documentation for our Migration Agency clients Australia-wide. As a result, we are currently in recruitment mode in the Perth office and expect to increase our capacity by more than 30% within the next two months.

We have also had some interesting developments in our Consulting Division, with four major projects now poised to start their capital-raising phase. Concurrently, we are now seeing 3D Fun Times Limited emerging from its R&D phase and about to launch in its manufacturing and distribution role. This company has laid some solid distribution and marketing foundations and is now about to start pumping out close to 1,000,000 products per year. The second round of this capital-raising is about to close and Directors have considered only making the remaining shares available to existing shareholders, as a reward for their loyalty. We will be reporting great things from 3DF in the near future, as they emerge from their ASSOB listing and head towards an NXS listing (initial public offering) in 2009 or 2010.

Project Blackjack is about to start trials in France and South Africa, with agreements being formed for long-term licensing across these two jurisdictions. Trials of the Protium 5th generation programming language have commenced in China with over 600,000 teachers and lecturers eventually to be delivering Protium programming to high school and university students before 2012.

The Carbon Controller project is now being redesigned for greater reliability after a mishap when demonstrating the prototype to a group of prospective investors this week. As a direct result, a consulting engineer has reviewed the technology and recommended some electrical redesign, which should eliminate the problem that occurred on that morning and should also increase the performance by at least 25%. The prototype unit will be reassembled and trialled again this week, with expectations of increased performance. At last measure, the Carbon Controller was able to remove 55-65% of particulate, smoke (including C02, N02 and NOx) from the exhaust of a simulated coal-fired power station (scaled down). The unique feature of this unit is it can treat gases and other particulate as it passes though at up to 145kmh. This project will make international news when the pre-production prototype goes into trials in 2009.

We at Xenex Group would like to extend a warm welcome to all of the new Agency clients that have started using our services in 2008. We are proud of our success record and our three-working-day turnaround, for concise, accurate and well-research business proposals, that enable your Applicants to obtain State sponsorship under Subclasses 132, 163, 164, 165 and 892.

We are not migration agents. We provide business proposals for the applicant clients of authorised migration agencies. Our service is based on collection of the required information from templates (downloadable from our website) and we then prepare and lodge these applications directly with the sponsoring States, or provide them to the Agency for their own submission.

If your Agency is in Australia, we can arrange to call on you and present you with a range of past proposals, covering all States and most Subclasses. If you would like a visit from our Consultant Principal Daniel O'Connor, please call him on 08 9335 7724 or email him at daniel@xenex.com.au. Daniel makes regular trips to each of the States and can visit with you if you are in any capital city.

While the advice of the sage is not to judge a book by its cover, that isn’t how customers look at the goods they are presented with in-store. Packaging plays a large part in the buying decision, so one of the easiest ways to generate sales is to make your packaging more attractive.  Packaging does more than just protect your product in transit from factory to outlet – it markets your product. Here are some hints on how to use packaging to the best advantage.

Use Packaging To Engage The Customer’s Attention
Packaging can make a product stand out from its surroundings on the retailer’s shelf and get noticed. The power to draw attention operates through the aesthetics and obtrusiveness of the package design. Carefully consider the colours, fonts and font sizes used on the packaging. These are what initially attract and engage the consumer.

Packaging can be made to look larger by using the right colours and simple, bold design work. You can pick up some useful ideas from checking how competitors package their product. Considering the role packaging plays in grabbing the consumer’s attention and encouraging sales the advice of a graphic artist can be a worthwhile investment.

The shape of the packaging can also be used to make the product stand out, but there is a trade off —retailers may refuse to stock awkward shaped packaging that doesn’t stack securely, that is difficult to process at the checkout or that simply consumes too much of their valuable shelf space.

Ensure Packaging Connects With The Customer
The average consumer spends just 2.6 seconds making a decision whether to pick up your product or not, so your packaging needs to be targeting the right audience with the right message. Are the buyers primarily male or female?  Do they come from a younger or older age bracket?  Are they likely to be time poor or shoppers with time to spare?

Different demographics have different purchasing hot buttons. For some the ‘environmentally safe’ or ‘reusable container’ label will do it. For others it will be the amount of fat in the product, the guarantee of product security or maybe even the ease of opening the package. General social trends drive consumer preferences and the savvy packager keeps abreast of these trends so they can change labelling, package design and packaging materials to appeal to changing interests.

Packaging can be designed to evoke an emotion in the customer so as to give the product an aura such as exciting, sexy, or whimsical. The graphics on the package can be used to place the product in a particular lifestyle setting that appeals to the target demographic.

Let The Packaging Inspire Confidence In The Product
For some products, a picture of the item on the packaging really is worth a thousand words. It can overcome some of the uncertainty in the decision to buy by letting the consumer see just what it looks like. The package is also the place to display your product's guarantee.

Many items claim ease-of-use as a selling point. Others come as easy-to-assemble DIY kits. Consumers will be more convinced of these claims if they can see for themselves just how easy the setting up or construction will be. Even if what's on the outside only outlines the more detailed instructions inside, or gives an assurance that it is easy to install or operate, it will provide a degree of reassurance for the customer.

Packaging can present an impression of the quality of the product inside, regardless of price. Packaging with faded lettering or colours, amateurish design work or strange typeface, outdated graphics, and cheap construction convey an impression of low quality or poor value that reflects on the product itself.

Design The Package To Provide A Sense Of Security
A whole raft of laws regulate the design of packaging of potentially dangerous goods such as flammable materials and medicines. Meeting the technical specifications is of course mandatory. Another influential class of laws that affect packaging relates to labelling and cover information from the weight, to chemical constituents, to place of origin. This information provides the consumer with a sense of security about the product. The clever marketer may find that some of this information represents a hot button for particular consumers segments and is worth emphasising. 

The package around a product is a lot more than just a container to hold and protect it. For smaller manufacturers the package may represent the most prominent advertising vehicle they have for their product.  It can also be their only means of combating products that have been given greater shelf space or are more easily recognised brands. Well crafted packaging is a marketing tool of first rate importance—your ‘silent salesperson’.

Every economy and every business has its ups and downs.  The trick to weathering the storms successfully is to be prepared for them. 

Reactivate Dormant Accounts
The quickest and easiest way to do this is to sit down with your list of past customers, call them, say hello, and see what's going on. Don't make this a hard sell call, just a reminder that you have done business before and you are interested in working with them again. You don't have to ask for work directly but when you end the conversation you might say something like, "Well, it's been good talking with you. Keep in touch, and if there's anything I can ever help you with, don't hesitate to give me a call." If you are uncomfortable about phoning, send a letter, flyer or brochure that mentions new products or services and includes testimonials from other customers.

Provide Additional Service To Current Customers

When business is slow you want to do everything you can to hold on to your existing customers. The best way to hold on to them is to give them not just their money's worth, but more than their money's worth.  Now is the time to go the extra distance, give that little bit of extra service that can mean the difference between dazzling them and merely satisfying them. The best protection against a downturn in business is an active list of delighted customers.

Have Existing Customers Drum Up New Business For You
It’s probably fair to say that the customers you’re currently dealing with associate with like-minded people - people who are in a similar income bracket, have similar interests, hobbies, and buying habits. And therein lies your sleeping giant. A referral system can harness this giant by encouraging existing customers to refer these people to you. If it’s true that most of your customers are happy with your business and the products and services you sell, then it follows that most would be quite happy to refer you given an easy way to do so, such as displaying your brochures in their business. Slow times also provide the opportunity for more active networking, looking for opportunities that may only present themselves when talking to people.

Plan An Ongoing Marketing Campaign
Slow business presents an opportunity to increase the amount of your time spent on prospecting for new business. During a lull in business you need to make this extra effort to attract clients or customers, follow up on leads and close sales. What types of marketing work best in slow times? Use a combination that includes direct marketing (direct response print ads, sales letters, self mailers, postcards, special offers) plus low-cost/no-cost visibility enhancing publicity techniques (press releases, articles, speeches, booklets, seminars, newsletters). Avoid costly image building marketing such as large space ads, slick corporate brochures, expensive annual reports and other marketing communications that can drain your budget without producing sales.

Add Value To Your Existing Services
In a slow economy customers are more concerned with price than ever before. Actually, their real concern is making sure they get the best value for their money. You can win new customers and retain existing ones by enhancing your services and providing your customers with more value for their money. For instance, if you are selling a commodity item you could add value by offering faster delivery than your competitors. Or a wider selection. Or easier payment terms. Or a better guarantee. There is no need to give away the store and promise an excessive amount of extra service. The extras you provide need not take a lot of time or cost a lot of money.

Keep Busy By Working ON Your Business
A slow period in your business is a good time to busy yourself with internal projects that will improve the business, such as developing a new marketing strategy, making technical improvements to an existing product, auditing and improving your customer service procedures, revising your newsletter or website, or any of a hundred things that you couldn’t find the time for previously.  Now you have the time - so do them.

These days, your money has to work for you. Tracking cash flow is important but getting the most out of the cash that comes in requires shrewd decisions about how to invest it. It’s not always easy to determine which area to put it into for the best overall result to your finances.

Let The Cash Sit In Your Account

Not the most effective use of cash. Returns are usually low so any cash that does need to be put aside for specific projects such as future expansion should be moved to a higher yielding investment. When determining where to invest this cash, first determine how much risk you are willing to accept, and secondly, how easily the investment can be converted back into cash should a more opportune way of spending it come up.

Invest For The Future

Regularly moving a percentage of your deposits into a retirement fund will prevent the money from dribbling away into other uses and provide you with a more secure future.

Spend Cash On Expenses

Retaining the necessary cash reserves for day-to-day operations and emergencies is necessary but the way in which it is done can make your cash flow situation and your life easier.  Make provision for taxes by regular contributions to an estimated tax account. Transfer a percentage of funds from your main account into a payroll account to ensure the funds are there to pay employees and to facilitate record keeping. Keep cash available for the longest time by holding off paying bills to near their due date unless there is a worthwhile discount for paying earlier.

Purchase Assets

This is a wise choice since it promotes business growth. In reality two factors influence the choice. First, there may be a number of assets that could be purchased and you need to estimate which will provide the best return on the investment; secondly, the return from purchasing the asset must be better than that available from any other form of investment. Your accountant can show you how to use a financial tool called net present value (NPV) analysis to compare the expected investment and return on different projects to see which one offers the best profitability. You may find that your best investment is, in fact, the stock market or a money market fund.

Pay Off Debt

In general, since interest rates run higher than almost all after-tax return rates on investments, it is a better decision for a business to pay down debt whenever possible to avoid the difficulties that come with servicing it. There is no investment risk involved and paying your debt usually doesn’t involve any additional fees. When paying existing debt it is better to pay a revolving line of credit rather than an installment debt.  This retains your borrowing potential when the need for additional debt occurs.

Return The Cash To Shareholders

While it is tempting for the entrepreneur to take the money as salary or a bonus, or return it to other shareholders, often the more prudent choice is to reinvest the funds to help propel business growth. Returning cash to shareholders is a last option when there are no good assets to purchase, debt and expenses are at reasonable levels, and there are no high yielding investment opportunities available.

Cash management is essentially about putting every dollar that comes in to working in the most productive way it can for you. Inefficient cash management practices can lead to a build-up of non-productive cash or its disbursement in sub-optimal ways. Selecting the most efficient way of using cash involves an awareness of what is available along with the opportunity costs and trade-offs associated with spending it on one thing rather than another.

For anyone trying to grow a business, one of the necessary tasks is to map the competitive landscape and continue to keep tabs on how things develop in it over time.  With a good understanding of the competition facing your business you’ll be able to spot and exploit opportunities as they develop.  Ignoring the competition or letting success lull you into a false sense of security could mean nasty surprises further down the road. The following points can help you start developing a strategy:

• Identify your competitors: Your competition includes anything that could draw customers away from your business. For example, for a movie theatre, other cinemas represent a direct competitor. But there are also a number of indirect competitors that need to be outmaneuvered as well. These are businesses after the same customer dollar, as you. For the movie theatre, cable TV networks, DVD rental stores and even online movies all represent competitors.
• Be a customer: Take yourself to your competitor’s and play at being a customer. Testing a competitor’s ability to serve you will reveal much about their business practices. And don’t stop at asking about things—test them out by buying something. It’s the only way to gain first hand experience with the company’s products and customer service.
• Talk to your competitor’s customers: Why do they buy from your competitors? Is it because of the quality of the product or service, the price, the location or the customer support? What do they dislike about the company? What do they wish that company would provide? Could you provide it?
• Use the internet: You can also learn a great deal about competing businesses simply by going to their website.  Check out how they arrange their pages and navigation, what information they offer, how easy they make the purchasing process and so on.
• Attend industry conferences and trade shows: Your competitor’s representatives will be pounding their chests about their products or services. Take advantage and familiarise yourself with their product offerings, strategies and how they sell themselves.
• Be aware of the potential for new competition: The competitive landscape can change fast these days. A national chain may not have entered your region yet—but what if it does? Likewise, companies that don’t currently compete with yours might shift their focus and pit themselves against your business.
• Assess the competition’s goals: A competitor trying to increase its market share might lower prices; a company attempting to increase profits may cut costs; and a business that wants to accelerate sales growth might kick off a marketing campaign. If you know your competitor’s goals, you’ll be better able to anticipate their strategies.
• Check public filings: Companies are obliged to disclose various pieces of information to government agencies. Such disclosures are required to undertake public offerings, receive building permits and register for patents or trademarks among other things. Many of those filings are public record and contain information about the company’s goals, strategies and technologies.

Gathering information about your competitors will show you where you lag in the competition stakes and can suggest ways in which your company can match, and beat, them.

Effective leadership is putting first things first. Effective management is discipline, carrying it out  - Steven Covey

Be sure to read each article with the mindset "How could this apply to our business." Thinking of it that way will guarantee that you get value. Better yet, take notes as you read and commit to having the ideas implemented by the time the next edition arrives. Also, make copies for each team member. To really make sure something positive happens, work with your Xenex business development specialist to talk your team through the ideas and how to set a schedule for getting them implemented. We're here to help you get started.

While every effort has been made to provide valuable, useful information in this publication, Xenex Group and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.