Businesses are concerned with making a profit. Very simplified, profit is what you make when your revenue or income exceeds your expenses. When expenses exceed your revenue, you have a loss. These elements are tracked through a profit and loss (or P&L) statement.

Thus there are two ways to make or increase a profit: either bring in more money or spend less. This is often referred to as either top-line or bottom-line growth. Marketing helps you grow your top-line and can be used to manage some bottom-line expenses.

In order to guide your marketing efforts, it is helpful to first establish your goals. Once you set a target for how much you want to make, you can then figure out the steps to take in order to reach your goal.

There are two primary routes to generating revenue. The first is sometimes called Household Penetration. Let’s say you earn $1 each time you sell a widget. The more families who buy your widget, the more you make. The other approach is often called Frequency. Let’s say there are 100 people who buy from you, and they buy once a year. If some of those same 100 people bought from you twice a year, you would increase your revenue without having to find any new customers.

So, when you set your top-line growth goals, decide if you want to increase your household penetration (customer base, membership, readership, reach …), frequency or size of purchase, or both. Do you need to find more new customers or sell more to existing ones?

You can apply these formulas to non-business concerns as well. For instance, in your personal finances, you can increase your income or cut your expenses. With your blog, you might want to focus on finding more new readers or having your existing community read your posts more regularly.

In order to set your goals, you first need to know where you are starting. Collect some data. Determine all your sources of revenue — or readers — or whatever it is that you want to grow. Do some measurement over time. Establish a baseline – how many customers do you have in a year? How often do they buy from you on average? What is the amount that they spend in an average transaction?

See if the 80-20 rule (or some variation) applies; i.e., do 20% of your customers drive 80% of your sales? If so, what do their stats look like? For example, maybe 20% of your customers buy from you 10 times a year and the other 80% buy one time. What do your projections look like if you find new one-time buyers and what do they look like if your 10-time-a-year buyers increase to 12 times a year, or the existing one-time-a-year buyers increase to two times a year?

Play around with the numbers. And if you are just starting out, look at what others are doing and make some estimates of what you could potentially achieve in one month, six months, one year, five years.

Next, list out all your expenses, such as the cost of materials; anything you are paying to employees; what it costs to operate your workspace; fees for services; and so on. Look at which ones are the same no matter how much you sell and which ones vary as sales go up. If you find more readers for your blog, eventually you might have to pay for more bandwidth. If you create aprons that you sell on Etsy, finding a source of lower-cost fabric would reduce your expenses. In both cases, your attorney fees for incorporating or securing a trademark would be the same regardless of how many readers you have or aprons you sell.

Once you’ve gathered this data and made a simple P&L statement,it should be easier to see whether your goal should be to increase household penetration, frequency or both. And once you have your goals in place, you can start to plan how marketing can help you reach them.

Find more blogs by Maria at http://www.blogher.com/haystackprofile/viewprofile/Maria+Niles

Last week, President Obama unveiled the $33 billion Small Business Jobs and Wages Tax Cut program. Under the initiative, small-business owners will get a $5,000 tax credit for every employee they hire this year.

But there are plenty of other reasons why businesses should hire now, like a better talent pool and cheaper labor, said Rhonda Abrams, author of the newly released book, “Hire Your First Employee: The entrepreneur’s guide to finding, choosing and leading great people.”

Investing in a strong work force when times are tough increases the chances consumers will abandon the competition and come to you, she said.

Abrams recommends overcoming hesitation by “starting small.” She said it took 10 years of feeling “overwhelmed” at her first business, a one-person consulting firm, before she ventured to hire her first worker — a part-time employee who worked from her kitchen table.

“It doesn’t have to be a full-time employee. There are other ways of starting,” said Abrams, who now runs the Planning Shop, California-based publishing company that specializes in books on business and entrepreneurship.

Abrams recently spoke with Your Business about how to start hiring now.

Q. Why is it a good time to hire?

A. History has shown that bad economic times present a lot of opportunities for growth. More than half of the Fortune 500 companies started in a recession or a bear market (according to a 2009 study by the Kauffman Foundation). There’s weakened competition. Things are cheaper, including labor and rent. Suppliers are a lot more willing to deal. Customers are more willing to try new things. There’s a lot of great talent out there. A lot of people who never would have considered working for a small business before would be willing to now.

Q. What are some signs you might need to hire?

A. If you can’t get your invoices out in a timely manner, it’s time to get help. You’d be shocked how many small businesses are so busy they can’t send out their bills. If you’re turning away work, it’s time to sit down and say, “Should I be growing?” Or if you need a skill set you don’t have. For example, you’re a great technology person but you’re not great at marketing or business development.

Q. What inspired you to write this book?

A. I remember how difficult it was to hire my first employee. The paperwork, the taxes. The “How am I going to be able to afford this person?” I had a one-person consulting company. It was quite successful, but I found I was running to the post office, doing data input. I was spending time I could have been using for billable hours, or getting new clients, and I was feeling overwhelmed all the time. But it still took me over a decade to make the choice. It was such a big deal.

Q. What about business owners who say they can’t afford to hire right now?

A. Don’t forget you can start small. You can start with an independent contractor or part-time worker to get your feet wet. It often feels like a big step to hire a full-time, permanent employee. With independent contractors, you can use them when you need them, and not use them when you don’t want to.

Q. How can a business determine whether it can afford to hire?

A. We have some financial projection worksheets in the book for them to work out the numbers. It’s an investment in the business, and just like any investment, you should determine the return on investment. You should be able to pencil the projected extra income that will come in because of the extra money you’re spending.

Here’s one example. Let’s say you’re a hairdresser and you’re fully booked, and you’re doing your own bookkeeping, ordering supplies, washing your own towels. There are a couple ways to go about it. One is to hire someone to do all the administrative stuff. That gives you more time to go through more bookings. The other option is to hire an additional hairdresser to bring in more income. You have to run the numbers.

Q. How do you decide between hiring full-time and part-time?

A. One of the first things to do when hiring a person is to list all of the tasks you’d love someone to do, and how many hours a week you think it will take.

It lets you see what things you need, and what might be things for an administrative person, or sales person or bookkeeper. You can see a pattern. Then, be realistic about how many hours that might need.

Q. What benefits and policies should you adopt?

A. It doesn’t need to be overwhelming. When I wrote this book, what struck me was how few things are required by the federal government — not even lunch breaks or holidays. So you get to determine a lot of things. Remember there are benefits of working for a smaller company, like flexible hours.

A lot of people have children, so being flexible is a strong perceived benefit for the employee which doesn’t really cost you anything. You can also be creative. One benefit I have is to give people their birthdays off. We also have a dog-friendly office.

By Leslie Kwoh/The Star-Ledger
February 02, 2010. This interview was edited and condensed for length and clarity. Leslie Kwoh, may be reached at lkwoh@starledger.com or (973) 392-4147.

The Problem
Why are we so different and yet so similar at the same time? Such questions often come to mind when we find ourselves in conflict with others over facts, goals, interests, values, actions, beliefs, assets, methods, or values. Recognizing these differences, and establishing boundaries, helps us refocus and realize that to solve any problem, we first need understanding.

Human beings are the most intelligent species on earth. We’re unique and wonderfully made. Look around and you will see diversity in age, race, color, gender, education, skills, communication style, nationality, ability and disability, income, religion, and personality. Because we are multi-dimensional, it’s not likely we’ll be successful in life without having a few conflicts with others.

We experience conflicts in business—with employees, clients, and colleagues—and in personal relationships. According to Wikipedia, conflict resolution, or “conflictology,” is the process of attempting to resolve a dispute or a conflict. Successful conflict resolution requires listening to, and providing opportunities to meet, each side’s needs, then adequately addressing each side’s interests so everyone is satisfied with the outcome.

Conflicts can arise from any number of sources, including:

* Interpersonal, emotional, group dynamics, or economic challenges
* Goal differences
* Values and ethics
* Communication barriers
* Cultural differences
* Personalities
* Parties being unwilling to negotiate
* Individuals being mean-spirited and/or unkind
* Lack of knowledge and understanding about a matter
* Disparity in skills and abilities
* Power imbalances
* Perceived or legitimate concerns that a party may not be adequately skilled to address

Conflict resolution aims to end conflicts before they start or before they lead to verbal, physical, or legal fighting. This is different from conflict management, in which conflict is used as a deliberate personal, social, or organizational tool. Though conflict management is the more common road, it is not popular with practitioners of conflict resolution; it is better to avoid the conflict at the start. As pioneering self-help author Napoleon Hill said: “The most important job is that of learning how to negotiate with others without friction.”

Reaching a Solution
Duke Ellington had it right when he said, “A problem is a chance for you to do your best.” To deal with conflict successfully, be concerned about your own outcomes and also the outcomes for the other party.

Consider using a process like the one below. This process can be useful in dealing with conflict in relationships, workplaces, or other situations where there is an interest in seeking a negotiated solution. These steps won’t guarantee an agreement, but they greatly improve the likelihood that problems can be understood, solutions explored, and the advantages of a negotiated agreement considered within a relatively constructive environment. This process also provides useful strategies that reduce the impacts of stress, fears, and “surprise” factors involved in dealing with conflict.

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