Category Archives: Business Essentials

So few marketing choices then, so many now

I was taking my dog for a walk the other day and came across a newspaper box stuffed with a relic from days gone by– a phone book!
phone directories
It’s worthy of note that the phone book is still being produced, and some businesses still advertise in it. The fact that this one particular phone book has sat outdoors for months, shows what most of us know: phone books are not valued or used anymore. It’s also interesting to note that the newspaper box is disused, as well.  Just like roller skates, rotary phones, and whitewall tires, some things are best left in the past!
Here’s where I put my (and my client’s) advertising dollars (in no particular order):

  1. Google Ads
  2. Facebook Ads
  3. Content marketing
  4. Podcast advertising
  5. Ad retargeting networks
  6. Direct mail
  7. Email marketing
  8. Vehicle signage
  9. Storefront signage
  10. Getting out in the community

You’ll notice what’s missing: traditional print advertising-magazines, newspapers-and broadcast advertising–radio and television. They can work for some businesses, but I seldom see awesome results from these mediums, just mediocre, at best.
I love all of these because I can directly connect my marketing efforts and money with results. The online ad networks allow a level of targeting and accountability that simply cannot be beaten by any medium.


Kona Impact LLC, 74-5599 Luhia Street, E-7, Kailua-Kona, HI 96740 – 808-329-6077

Project Completed: Kona Kones

Kona Kones is a real fruit ice cream business that just got started in West Hawaii. Kona Impact designed and installed the graphics on their custom trailer. We did not make their logo, which would have been proud to make–it’s a great logo–but we did help them focus on a logo that would go best on their new, shiny red, custom-made trailer.
The project was a lot of fun for us. Designing a trailer gave us a big palette to carefully consider what is essential, and what would be unnecessary fluff.
Where can you find Kona Kones and their delicious real fruit ice cream? They are currently at the farmers market near the Sheraton on Weds and Fridays. You can call them at 808-782-7889 to check for other locations.
kona kones
kona kones

Beware of Cold Calls from Marketing Salespeople!

I had a lot of fun the other day when I received a cold call from a marketing company. They had no idea, I would guess, that online marketing is what I do, day in and day out, so there are few things I haven’t seen.
The first hint of a scam was the spoofed caller ID: “Mountain View, California,” the home of Google. The caller’s voice and the chattering of voices in the background, however, strongly indicated that it was from a call center in India.
The salesperson said I could be “number 1 on Google.” I asked, “do you work for Google?” No, he replied, but said, very quickly said that they are a “Google Partner”. Ok, so do you make me “number 1 on Google” through organic search–someone searching for a keyword on Google and my business coming out on top–or is this a paid ad–I have to pay for every click to my website? “Paid, sir, he said.”
So, I said, “you have no special proprietary way to get me to the top of Google results? You’re just buying ads for me?” “Yes, sir, he replied.” I feigned interest and asked how much it would cost. He said they have $1,000/month and up programs. He said he’d guarantee at least 100 “leads” to our website. Alright, $100 a lead? “Are “leads” the same as “click”? I asked. “Yes, sir.”
At this point, I had had enough fun and told him I wasn’t interested. (Actually, I wasn’t interested from the start.)
cold calls
Here’s are the problems with his pitch.

  1. “Number 1 on Google” through advertising is extremely easy to do. Just set up an ad, choose an obscure keyword, and set the account up correctly. It might cost $.50-$2.00 per click. “Number 1 on Google” through organic search is a gold mine if it is a high volume search term, but that’s not what he was offering.
  2. Clicks to a website are not very valuable. Many websites will have 1,000 clicks to 1 sale ratios, or worse. 100 “leads” might be one sale, so would you pay $1,000 for one sale? It makes no sense for nearly all businesses.
  3. Google doesn’t have a “back door” system where companies can get proprietary access to the search algorithm and manipulate results. Anyone claiming an association with Google, beyond being a certified Google Partner (training in setting up and running Google Ads) is lying. If you had a secret way to rank high on Google consistently, you’d have a multi-billion dollar idea and wouldn’t be calling me!

If your online marketing salesperson is talking about clicks, be very wary of this. Sure, clicks from Mainland home buyers interested in buying a home in Kona, Hawaii to a Kona real estate company’s website are valuable, very valuable. Clicks, however, are easily manipulated by computer bots or other means, so unless you’re certain of the quality, they are a very poor metric for marketing programs.
What you want in your online marketing are calls (if you’re a service business) or conversions/sales (if you’re an online retailer). Don’t fall for “building a brand”, “exposure” or “visibility” when all that really matters is new customers.
Unfortunately, many small business owners don’t have the knowledge or experience to identify a scam or a bad deal when it comes to online marketing. At Kona Impact, we recommend asking a lot of questions, never buying anything pitched solely on the phone and asking for a written contract or the deliverables. When you have the contract, read it carefully, and be sure to ask someone in the know if it’s a good deal.

Five Reasons You Don’t Want to Have the Lowest Prices

We have seen this scenario many times: a person opens a new business and tries to become established by offering the lowest price in town for his product or service. Twenty-five dollar oil changes; graphic design work for $40/hour; painting/handyman service for $20/hour or some product selling for just above the cost to buy.
You can guess what happens: these businesses fail quickly, and seldom, if ever, continue to exist beyond a short period of time.
This pricing strategy–be the cheapest–is doomed to failure for many reasons. One is that people really don’t want “cheap”; they want quality at a reasonable price. Another is that the new business has a poor understanding of total costs, so they just don’t make any money and can’t survive.
Here are some reasons why you don’t want to have the lowest price (unless you’re Wal-Mart, and I’m assuming you’re not!)
You’ll be busy and broke
Would you rather work five hours for $60/hour or twenty for $15? Dumb question, I know. The problem with being inexpensive is that you’ll be what I call “busy and broke”; that is, doing a lot of work and making no money.
You can’t ensure or sustain quality
Imagine a person paid $400 to paint a room and one paid $150. Which do you think will tape the edges, use primer, apply two coats of paint and do a good job cleaning up after the job is done? At some point, the owner or workers who work for low wages, because the billing rate is too low, will have to cut corners to make some level of profit, even if it is a meager amount.
This is also true of products. I know the cheap tools at Wal-Mart are cheap for a reason; they are low quality, made-in-China tools. That’s the cost of the inexpensive tools; they won’t last long and are likely to be sub-optimal for anything but the most mundane tasks.
cost of low quality
You’ll be perceived as “cheap”
Few businesses want to be known as “cheap.” When I think of cheap I think of “dollar stores” and service providers who are inexperienced and using low prices to gain experience. Most people don’t want “cheap” products or services, though low prices are appealing for some, most don’t want short-lasting products or inexperienced service providers, as we all know the long-term costs of “cheap” can be very expensive.
You can’t raise prices in the future
I sometimes hear entrepreneurs say that they’ll raise prices once they get established. This is really hard to do, as the market has already decided you are a cheap, low-cost product or service. If you’re selling shave ice for $3 and not making any money, it’s hard to convince people that the same product is now worth $5.50. Likewise, if you charge $25 for your time and barely making ends meet, going to $50 for the same level of service is not going to be very palatable your customers.
Someone will become cheaper and you’ll have no advantages
Inexpensive is a fleeting competitive advantage. If the only thing you have going for your product or service is price, you’ll soon lose that advantage to someone who has the same business plan as you. There is no moat around a business that is only inexpensive, because if you can do it, anyone else can, too.
One of my business mentors is fond of saying that he wants, in fact, needs, his suppliers and employees to make a fair profit, for if they don’t, he’ll have no suppliers and employees in the future. It is, of course, always difficult to choose a higher priced service or product, but, in the end, we all know that low costs come with a price, which can often be higher in the long term.
 

Three Year-End Questions for Small Business Owners

At Kona Impact, we typically have two times of the year–December and June–when we reflect and look forward. We try to take a detailed look at what’s working, what isn’t, and where we want to be in the future. I like to say that everything is on the table for discussion at these times; every idea will be considered.

What’s working?

What products or services are making the most profit? Note: this is entirely different from the most income: it’s easy to sell a lot of low margin products and make very little money–what we call the “busy and broke” syndrome. Be honest and consider all the costs and revenue from products.
I always ask restaurants: what products make you the most money? What products are easy to make, bring high levels of satisfaction to your customers, and sell for a good profit? There are things on the menu that have high food costs, your cooks hate to make, your customers don’t find very satisfying and you can’t or won’t charge enough for them to make a reasonable profit. Get rid of these.
What products or services do you do better than anyone else in town? These are your competitive advantage (if you can market them). At Kona Impact we get asked weekly if we make t-shirts. The answer will always be “no” because I know of two screen printers in town that do excellent work at fair prices. I don’t want to (nor could I) compete with them.
I do, however, want to be the best at what we do for our core competencies: signage, marketing, graphic design, specialty printing and print design. If we can’t be the best, or number 2, I have to reconsider what we do.
What products or service are growing? Growth is key. About a year ago, we started offering 3-D signs, cut with our CNC routers. While it’s still a small part of our business, it is growing rapidly. We see the trajectory as equal to, if not more important, than current volume.

success concept
What isn’t working?

The answer to this is simple: what do we do that provides us with little or no profit? Are we doing things that take our time, but result in only labor and materials costs and little contribution to the bottom line?
Another aspect of this is to consider what products or services face have encountered risks or headwinds that will only persist? Are there technologies or changes in the market that will result in a slow withering of something we do?

Where do we want to be in the future?

I freely admit that of the five pillars we had for Kona Impact when we started 12 years ago, two were quickly abandoned. We did not know that the predicted market for those would be small and hard to gain entry. We planned for them, but, alas, we were wrong. Fortunately, we had the courage to admit this and move on. We replaced those two non-working pillars with three others, which have done quite well.
We look to the next few years of Kona Impact and see many wonderful opportunities for growth. This includes increasing our marketing consulting business, growing our custom CNC (3-D) signage offerings and developing some business-to-consumer products. We’ve always been business-to-business only, but now see how some opportunities directly marketing to consumers.
We also see productivity gains coming from some new machinery and procurement processes.
As the year comes to a close, we are very excited about what is to come for Kona Impact. Truth be told, 2018 was an excellent year for us on many fronts and a failure on a few. I would be disappointed if we didn’t have a few failures, as that would mean we didn’t try to innovate or grow. I’m looking forward to the new year that is full of opportunities, and, yes, a few failures along the way.

Three Biggest Signage Mistakes

Kona Impact has been making signs in Hawaii for years. We’ve done boats, outrigger canoes, windows, harbor signs, vans, cars, food trucks, real estate signs–you name it, we’ve done it.
And since we’ve made a sign or two, we learned a few things along the way.
Here are our three cardinal rules for making signage for Hawaii:
Thou Shall Not Use the Wrong Material
Wood is cheap and easy to get on the island. It’s also the worst sign material you can use. Between termites, warping in the sun and being susceptible to wood rot and water damage, wood makes for horrible signs in Hawaii. We replace many poorly made signs a year made by other sign companies who cut corners (or just don’t know better) and use wood.

termite infested signTermite infested Wood Sign in Hawaii

Our favorites? Exterior grade building material, glass, aluminum, and steel. All will outlast any graphics we put on them. The surfaces are smooth, non-porous and not susceptible to termite or other environmental damage.
Thou Shall Not Make a Small Sign
Yes, bigger is better! I always chuckle when I see a person’s business name, email, phone number, website and logo on a small 1’ x 1’ vehicle magnet. You might as well have nothing on your vehicle because with that much text on a 1’ x 1’ sign, you need to be within a few feet of the sign to read it.
We always tell customers that the more you put on a sign, the less any one element is visible. So, put less on your sign–it’s a sign, not a business card–and it will be more effective. If you really need to have a lot of information on your sign, make it bigger, as big as possible.
Thou Shall Not Make What is Simple Complex
Contrast is one of the key ideas for sign design. White background, black text is high contrast, as is a black background with white text. Aim for maximum contrast between your elements, and you’ll do ok. Try to put too much, whether it is non-contrasting colors with the background and text, or placing text over a complex background, and you’ll move toward a design that will make your sign illegible.
Likewise, stick to your essential message and don’t obfuscate your message. What is the one thing you want people to get from your sign? It’s usually the name of the business or the main product. Your secondary message is probably some services or a way to contact you. Consider keeping to only two, possible three messages. Anything more and you’re probably trying to do too much with a sign.
At Kona Impact, we love to sell signs–it’s how we keep our lights on–but we don’t like to sell the same sign twice, because the first one has failed. We love working with clients to design effective signs and get the messaging just right. After hundreds of signs, we’ve learned that cutting corners on the material, size or design is a waste of time and money.

“Hopelessly confusing and opaque” The Value of Testing Your Systems

Last month Kona Impact ordered some expensive equipment from a large, very well known copier company. We received an invoice and were happy to see that we could pay online. We would not have to write a check, prepare an envelope and hope that it got from here to there. Having just received a payment made from a customer that took two months to go across town via USPS, we’re happy to pay online whenever we could.
First, I had to make an account. Then I had to confirm my email address. So far so good. Then I had to find where to pay the invoice. I looked and looked. Maybe it was under “Account” Nope. Maybe it was under “Order”. Nope. I spent over 20 minutes looking under every menu to see where I could pay a several thousand dollar invoice. I gave up. I wrote a check and put it in an envelope, knowing that it could take a week or more to arrive.
My question to the company is this: Has anyone in management, customer support or accounts payable tested or used your website?
confused concept
This should be fundamental for anyone who has a website. Go on the website and try to do everything your customer would conceivably try to do.
If you have an e-commerce website, place an order, beginning to end, at least twice a year. Is the process smooth? Are there places where you could make the process clearer and simpler for your customers?
Review all the text on your website at least twice a year. Is it comprehensive? Is it still applicable? Are you missing anything new? Does it read well?
If there is a contact form on your website, try it at least twice a year. Do it work as intended?
You should also have someone who has not used the website place test orders, search for key information and make contact through the website.
I did reply to the copier company reply to the invoice email and simply said that I had to mail the check because, despite great effort, their online payment system did not work for me. I couldn’t come up with anything better than, “I tried to pay online but your system was hopelessly confusing and opaque.”  I would strongly encourage the Accounts Payable department to spend some time trying to use their own system because if they did, they could work on making it clear and transparent.
Testing a website should be a regularly scheduled task. You don’t know what you don’t know, and only through testing will you figure it out.

What to do when your web designer leaves town

We get this call three or four times a year:

  • Caller: Can you get my website back online?
  • Kona Impact: Maybe, do you have website hosting?
  • Caller: I don’t know. My web designer left town and she took care of it. It’s not online now.
  • Kona Impact: Can you contact her?
  • Caller: No, she moved to Colorado, I think. Her website is off, too.

Unfortunately, there is not much we can do to help at that stage. If you don’t have a backup of the website, the original designer is gone, and the server on which the website resided is no longer hosting your website, there is little we can do to help.
There are a few things you can do to ensure that you don’t find your website offline when your web designer leaves town.

  1. Ask for a backup of your website when it is completed. The files probably won’t mean much to you, but a competent techie guy or gal could easily re-establish website hosting from a proper backup.
  2. If your web designer made your logo, ask for the following file types: Adobe Illustrator, Encapsulated PostScript, Adobe PDF, Jpeg, and Png. The Illustrator and EPS files (and perhaps the PDF) are editable files if you have the proper software. This will allow you to change your logo, resize it and manipulate it for various uses.
  3. Ask your web designer where your website is hosted and who controls the billing and administration of that account. If your web designer has your website hosting under her hosting plan, you will not be able to maintain the billing and hosting for the website. Seriously consider asking your web designer to move your website to a hosting account you control.
  4. If #3 is not possible, ask for full access to the website, including all logins and passwords.
  5. Make sure you have a way to continue paying for the hosting charges.

If your website is old and not optimal for your needs, consider making a new one. This is a perfect time to start anew and get the online presence you have always wanted.
At Kona Impact, we have been designing and hosting our clients’ websites for over 12 years. We do realize that our clients’ websites are very important to their businesses. As such, we have a firm commitment to ensuring that our clients’ websites are online 24/7. We keep cloud, onsite and offsite backups of websites, and have a plan to ensure that any business disruption will not result in issues for our clients.

Non-Profit Does Not Mean No Money

I was talking to a graphic designer the other day about a project she had recently completed. She said, “I won’t charge them much. They are a non-profit.” Curious, I asked her what she thought the budget of the non-profit is. She had no idea that the budget of the agency was, from what I have heard, about 6 million dollars a year.

After talking with her a little more, I realized that she is a very kind-hearted person and felt that by charging the agency less, she’d be helping them with their mission. I could understand that, and, indeed, Kona Impact has often given services and products to local non-profits as a way to support their mission. I feel it’s part of our responsibility to support the community in which we live.

It’s important to look at non-profits through the lens of a business person, though. Some, like a small community outreach programs for homeless youth, might have a budget in the thousands, so any contributions of time or services would be much appreciated. Any money not spent would likely go to supporting community projects. These are great organizations to do pro bono work for, especially if you are new to the design business and you want to build your portfolio.

At the other end of the spectrum is non-profits supported by government grants or large foundations. This typically includes medical services non-profits, which are funded by insurance payments and Medicare, animal services, which receive state and county support in many communities, and many social service non-profits, which often receive federal and state funds. These have many full-time staff members and directors who are all reasonably compensated. They are professionally run and have a budget for outside services.

I wryly told the graphic designer that she is probably the only person who is not making sufficient money when she does work for the agency. All the staff and other suppliers are making a reasonable salary or profit, and she should consider doing the same. She could then be compensated fairly for her work and then, if she chooses, donate time or money to other nonprofits with lesser funding or resources.

Many years ago, Kona Impact decided to support a few non-profits that we knew had little funding. They also had to be organizations with a mission in which we believe. Currently, we donate a lot of products and services to the Aloha Theater, a youth sports organization, Rotary International, and our local Rotary club. We give generously to these organizations. We also try to give heavily discounted rates for other organizations that do good in our community, but we do run a business, so if our buyer is a large, well-funded organization, we do like to make some money on the jobs we do.

Ten Observations on Running a Small Business

I was talking to a young man starting a business the other day. He was very excited to be in business and ready to charge forward and make his mark. He has a service, a plan and is clearly willing to work hard to achieve his goals.

That conversation got me thinking about what would be the bullet points for running a successful business. That is, what ten things if mastered, would give a business the best chances for success? I know there are hundreds, but here would be my top ten:

  1. Everything has a cost.
  2. Figuring out the true costs of your goods and services should be the #1 goal of your business.
  3. Figuring out what you will charge people for your goods or services is the #2 goal of your business. Get #1 or #2 wrong for a long period of time, and you’ll be out of business quickly.
  4. Cost + percentage pricing for most businesses is inevitably less profitable than pricing based on the value to your customers.
  5. Make sure your business has some moats around key products. These might be exclusive distribution contracts, high-specialized skills (heart surgeon, artist, BMW-trained mechanic, ect.), extremely high barriers to entry for the competition, customization, etc.
  6. A one-person business is seldom going to provide exceptional earnings.
  7. Finding, training and motivating employees are the keys to growing a business. Money alone is seldom the top way to attract and retain excellent employees.
  8. You will be much more successful if you focus on bringing people up than putting them down.
  9. No business is an island, so treat your customers, suppliers, competitors, and community with respect and dignity. You’re all connected and need each other.
  10. When you own a business, you are responsible for everything. If you don’t want the responsibility for an amazing amount of issues-big and small-you’ll be happier working for someone instead of running your own business.