Business Banking E-Newsletter - May 2011
Our outlook for the year is based on many counterbalancing forces keeping the markets on a path of moderate growth accompanied by the return of volatility. Our outlook is that the pace of gains will slow into the high singledigits for U.S. stocks this year after a powerful 2009 and 2010 — and a solid gain of 7% so far in 2011 — that have returned the S&P 500 to within 15% of its all-time peak.
As the economy transitions from recovery to modest, sustainable growth it results in uneven data points creating uncertainty and driving volatility. Many factors are vying for investors’ attention. One way to look at the balance of factors driving the markets is to create a balance sheet.
A balance sheet, one of the first things a student in finance learns to create, is a financial statement that summarizes a corporation’s assets, liabilities, and overall net worth — called shareholders equity. Investors examine the balance sheets of corporations for signs pointing to future growth or possible problems when making investment decisions. We can apply the same logic to the stock market as a whole providing a more balanced picture than focusing on individual risks or opportunities.
|Stock Market Balance Sheet|
|Employment is increasing at a rate of over 200,000 net new jobs per month this year, the strongest pace since before the financial crisis.||Central banks in both emerging and developed economies are raising interest rates to fight rising inflation.|
|Corporate earnings continue to rise at a double-digit pace as they near all-time highs and analysts are upwardly revising estimates.||Home prices are falling again; the price of existing homes in the United States declined 6% over the past year.|
|Businesses are now increasing their spending and driving growth after a decade of under-investing.||Intensifying European debt problems and Japan’s recession are contributing to slower global growth.|
|Business confidence is up; the Conference Board’s CEO survey found the most bullish outlook by CEOs since 2004.||Consumer confidence is well off the financial crisis and recession lows of 2009, but has only rebounded to levels in line with prior recession low points.|
|Financing conditions for the consumer and business are improving rapidly; banks have lowered lending standards and junk bond yields are the lowest in history.||Ever-present terror threats heightened by turmoil in the Middle East and North Africa are keeping oil prices elevated and have the potential to disrupt oil supplies further boosting already high prices at the pump.|
|The declining US dollar is boosting earnings and making U.S. products more competitive globally.||The battle over the U.S. debt ceiling combined with state budget challenges may result in less fiscal stimulus.|
|Inflation is likely near its peak in China — wholesale food prices have declined 10% from the recent peak — and in other nations, suggesting rate hikes may soon abate.||The Federal Reserve (Fed) is near the end of providing economic stimulus through its quantitative easing (QE2) Treasury purchase program.|
|U.S. businesses have plenty of cash to spend on hiring, capital, dividends, and Mergers and Acquisitions (M&A).||Consumer income growth djusted for inflation has been falling in recent months as reflation has taken place.|
|LPL Financial Current Conditions Index indicates an environment fostering growth in the economy and markets.|
|Stock market valuations remain favorable and below long-term averages.|
|Individual and institutional investors have plenty of cash on the sidelines to fuel gains — money market fund assets currently remain elevated and the Fed-tracked average pension fund stock weighting is close to a record low.*||
The relatively long list of significant assets and liabilities for the market results in a net “shareholders equity” of +3. This illustrates the more balanced environment for growth than experienced over the past two years. The bottom line is that the economic expansion is self-sustaining, but moderate.
* Money market fund assets are measured by The Investment Company Institute (ICI) a national association of U.S. investment companies, including mutual funds, closed-end funds, exchangetraded funds (ETFs), and unit investment trusts (UITs). Members of ICI manage total assets of $11.18 trillion and serve nearly 90 million shareholders.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance reference is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Stock investing may involve risk including loss of principal.
Quantitative Easing is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.
* Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.
Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.
Not FDIC insured
No Bank Guarantee
May lose Value
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Not Insured By Any Federal Government Agency
Seven Ways to Make Your Customers Love You
These days, every customer counts.
So why then do companies lose them? Between moving away or passing away and switching to a competitor -- the excuses are many for why customers may jump ship. The No. 1 reason why customers bail is the feeling of indifference toward a product or service.
To counter this ambivalence, it’s key to make sure your customers feel and perceive that they're wanted and want to stay where they're appreciated. But to make customers love you, you'll have to work even harder. Here are seven ways to win the devotion that makes for loyal customers:
Never assume. You may think you know what customers want. But what if you're wrong? The main reason such a high percentage of new businesses fail is because those companies are trying to create demand where there isn’t any, or they're built around untested or unproven ideas that are hard pressed to attract even a small sampling of customers.
Don’t make the same mistake. Test and start small, and build your product, service or value proposition around the wants, needs and desires of your target customer. Not only will you get a better understanding of customer needs, you’ll be able to identify innovative ways to solve their problems and exceed their expectations.
Always deliver. To win customers back, you need to deliver on time, every time. If a problem arises, inform your customer right away. Explain how you're going to deal with it. Then follow up again -- and again -- to ensure positive results. This also goes for your invoices and any correspondence. You might even create a system to ensure that each task gets completed correctly and is always delivered in a timely fashion.
Personalize loyalty programs. In order to ensure you have a winning loyalty program, you must plan, design and execute it in a systemized way. Plus, you need to show the value of it and continually demonstrate that value to your team. An example of a really big company that does this on a personalized level is Caesars Entertainment, which has mastered the art of customer loyalty programs on a massive scale to drive profit.
For instance, Caesars knows, down to the penny, just how much its top customers are likely to spend at any of its properties, and what types of activities individual customers prefer when they stay -- be it gaming, dining or taking in a show. This knowledge allows the company to issue customized offers that may be more appealing to Caesars’ best patrons.
Train your staff. Here’s where scripting comes in. Use periodic training sessions to help give your team the skills that are necessary to boost your company’s reputation, trust, empathy, flexibility and verbal communication proficiency. This is vital because each customer contact with your team is an opportunity to build your reputation -- or destroy it.
Say “Thank You.” Sounds obvious, but consider this: When was the last time you received a thank-you note from a company you do business with? Or any notice, other than when a payment is due? This simple strategy can really make an impact and says a lot about your company and the value you place on customers.
Stay connected. While the frequency may vary, every customer should receive an off-line “touch” at least once per quarter and, with an email or e-newsletter, even more often. For instance, once a week with an “opt-in” message may do the trick. Over time, you can develop a relationship with your customers, especially if your “touches” are information or educationally-oriented and are designed to add value to their experience with you, rather than just as a mechanism for pushing products or services.
- Play favorites. New customers are critical to growth, but you must ensure that current or long-standing customers get VIP treatment as well. Nothing is worse for loyal customers than to see products or services they bought at full price discounted to entice new customers. You can turn this around by offering exclusive loyalty programs, deals or specials geared specifically to your best and most loyal customers.
Article Source: http://www.entrepreneur.com/article/219712?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+entrepreneur%2Fstartingabusiness+%28Entrepreneur%3A+Starting+a+Business%29
Ten Tips for Successful Business Networking
Building relationships to help grow your business
Effective business networking is the linking together of individuals who, through trust and relationship building, become walking, talking advertisements for one another.
Keep in mind that networking is about being genuine and authentic, building trust and relationships, and seeing how you can help others.
Ask yourself what your goals are in participating in networking meetings so that you will pick groups that will help you get what you are looking for. Some meetings are based more on learning, making contacts, and/or volunteering rather than on strictly making business connections.
Visit as many groups as possible that spark your interest. Notice the tone and attitude of the group. Do the people sound supportive of one another? Does the leadership appear competent? Many groups will allow you to visit two times before joining.
Hold volunteer positions in organizations. This is a great way to stay visible and give back to groups that have helped you.
Ask open-ended questions in networking conversations. This means questions that ask who, what, where, when, and how as opposed to those that can be answered with a simple yes or no. This form of questioning opens up the discussion and shows listeners that you are interested in them.
Become known as a powerful resource for others. When you are known as a strong resource, people remember to turn to you for suggestions, ideas, names of other people, etc. This keeps you visible to them.
Have a clear understanding of what you do and why, for whom, and what makes your doing it special or different from others doing the same thing. In order to get referrals, you must first have a clear understanding of what you do that you can easily articulate to others.
Be able to articulate what you are looking for and how others may help you. Too often people in conversations ask, "How may I help you?" and no immediate answer comes to mind.
Follow through quickly and efficiently on referrals you are given. When people give you referrals, your actions are a reflection on them. Respect and honor that and your referrals will grow.
- Call those you meet who may benefit from what you do and vice versa. Express that you enjoyed meeting them, and ask if you could get together and share ideas.
Article Source: http://www.businessknowhow.com/tips/networking.htm
Twelve Tips for Business Success
How to beat out the competition
What's important to the success of small-business owners and entrepreneurs? Knowledge, skill and talent.
However, many competitors have the same traits you do. The key to beating the competition and achieving success is mental, reflected in one's attitude, totally controlled by the individual and requires no cash. This holds true in most human endeavors besides business - in sports, the arts and politics.
How many times have we seen the underdog team or player win over the more talented opponent? The difference is often attitude.
These 12 attitude attributes can put you in the right mindset for achieving entrepreneurial success.
Have passion for your business.
Work should be fun. Your passion will help you overcome difficult moments and persuade people to work for you and want to do business with you. Passion can't be taught. When it wanes, as it surely will in difficult times, take some quiet time. Whether it be an hour or a week, take inventory of all the reasons you started the business and why you like being your own boss. That should renew your passion.
Set an example of trustworthiness.
People have confidence in trustworthy individuals and want to work for them in a culture of integrity. The same is true for customers.
Be flexible, except with core values.
It's a given that your plans and strategies will change as time goes on. This flexibility for rapid change is an inherent advantage of small over large business. However, no matter the pressure for immediate profits, do not compromise on core values.
Don't let fear of failure hold you back.
Failure is an opportunity to learn. All things being equal, venture capitalists would rather invest money in an individual who tried and failed founding a company than in someone who never tried.
Make timely decisions.
It's okay to use your intuition. Planning and thought are good. But procrastination leads to missed opportunity.
The major company asset is you.
Take care of yourself. Your health is more valuable than the most expensive machinery or computer software for the company. You don't have to choose between your family or your company, play or work. Maintain your health for balance and energy, which will, in turn, enhance your mental outlook.
Keep your ego under control.
Don't take profits and spend them on expensive toys to impress others. Build a war chest for unexpected needs or opportunities. This also means hearing out new ideas and suggestions no matter how crazy they sound.
You need to believe in yourself, in your company, and that you will be successful. This confidence is contagious with your employees, customers, stakeholders, suppliers and everyone you deal with.
Encourage and accept criticism graciously. Admit your mistakes.
You need to constantly work on convincing your employees that it's OK — even necessary —to state their honest opinions even if it conflicts with the boss's opinion. Just stating it once or putting it in a mission statement won't cut it for most people.
Maintain a strong work ethic.
Your employees will follow your lead. It will also help you beat your competition by outworking them, particularly when your product or service is very similar.
Rebound quickly from setbacks.
There surely will be plenty of ups and downs as you build the business. Learn from the setbacks and move on. You can't change the past.
Periodically get out of your comfort zone to pursue something important.
Many times you will feel uncomfortable in implementing a needed change in technology, people, mission, competing, etc. For the company and you to grow personally, you sometimes have to step out of your comfort zone.
Many organizational and leadership shortcomings can be overcome or mitigated with the good attitudes described above. All can be learned except passion, which comes from within. Take time out of your hectic schedule to periodically reflect on these attributes. You may be inspired to act.
Article Source: http://www.msnbc.msn.com/id/34736736/ns/business-success_in_hard_times/t/tips-business-success/