SmallBizLady: What is wealth, and how do you build it?
Wealth is different from income. Income is money you earn or receive from different sources (business, child support, dividends, etc.). Wealth is an accumulation of valuable assets and is usually a measure of your net worth. Net worth is the difference between what you own (assets) minus what you owe (liabilities). To calculate your net worth, add what you have in savings, investments, real estate and cash, and subtract any debts you owe. If you want to build wealth, on any level, you must be an investor. Types of investments include real estate, stocks, bonds, mutual funds, ETF’s, REIT’s and of course, businesses. Investing can help offset the cost of inflation and help build wealth.
SmallBizLady: Can you explain ‘the time value of money’?
Vanessa A. Lindley: The time value of money helps you to understand how the value of a dollar today will decline over time due to inflation (the rising costs of goods and services). For example, today you can purchase a latte for $4; in the future, it may cost $6 and your $4 will not be able to purchase it. The only way to offset the loss of purchasing power over time is to invest in things that beat the cost of inflation. There a few cool apps that can invest small amounts of money for you based on your spending. Two really cool apps that folks can use are StashInvest.com and Acorns.com.
SmallBizLady: What are the three reasons that people get into debt and three ways to get out of debt?
Vanessa A. Lindley:
- Not having and sticking to a budget. A personal budget is a foundation for all aspects of money management. Planning and knowing how much you are spending and saving every month can put you in a better position to make sound decisions about how to maximize credit and how to minimize debt.
- Failure to protect yourself with emergency savings. Having emergency savings allows you to be prepared for financial emergencies that come up like car repairs, home maintenance, healthcare costs, etc. Without having emergency savings, you can be forced to rely on credit to cover these costs and put you on a cycle of debt.
- Not understanding how much debt you can afford. Calculate your debt-to-income ratio, which is all of your monthly debt obligations (including consumer debt and mortgages) divided by your gross income (before taxes are taken out). This will give you a benchmark on how creditors review your file when applying for things such as a mortgage. In general, a 43% debt-to-income ratio should be taken into consideration when taking on additional debt. There are online “debt-to-income” calculators to help you with this.
SmallBizLady: What are the 3 ways to get out of debt?
Vanessa A. Lindley: There are three methods to get out of debt:
- The Snowball Method: Arrange the debts by balance, from smallest to largest.
- The Avalanche Method: Ordered from the highest interest rates to lowest
- The Snowflake Method: Adds small “extra” money you come across to help pay off debt
SmallBizLady: You say there are really only three components to any marketing effort. What are they?
Sean McCool: Yes. The three components are copy, offer, and audience.
Copy is simply the words you use in your marketing campaigns. We’re all given 26 letters and 10 numbers to relate to our customers and to let them know how our product or service fits into their lives. The difference, the magic, and the power, of course, is how you choose to arrange those letter and numbers. And just like music is both the notes and the spaces between the notes, the space between the letters and numbers matters too.
The offer is what you want the reader or viewer to do next. My clients find it helpful to think of their offer as an invitation rather than an ask. Sometimes this means an invitation to buy. Other times it’s an invitation to learn more. And sometimes it’s just an invitation to think in a new way.
The audience is simply whom you want to, and can, serve. By serve, I mean help solve their problem the way THEY see it. The famous copywriter and legendary marketer Eugene Schwartz says, you can’t create a desire for your product or service; you can only tap into an existing desire the customer already has and then tie your product to that desire.
SmallBizLady: Writing copy that converts can be a challenge for many people. Do you have any tips?
Sean McCool: Yes. Use templates or “swipe” files to get you started. Blanks pages are tough. I’ve found that when I have something…anything to start with…I write much faster.
You can find ten starter templates on my website, but basically there are three categories I teach my clients: Short Story Narratives, The 3 R’s, and Persuasion Maps.
An example of a Short Story Narrative would be to follow this outline: This is a problem our clients have. We define it this way. We solve it this way.
One of the 3 R’s is to “reformat” other content. Turn a blog post into a video or vice versa. Turn an interview like this one into a blog post. Melinda, you do a great job of this.
The third type of swipe file or starter template I use is what I call a Persuasion Map. Like any map, it gives you an overview of the land (your content) and a path to get from where you are to where you want to go. One of the most popular Persuasion Maps is called PAS. PAS stands for:
Problem: Present the problem your prospect feels.
Agitation: Poke at that problem until it’s visceral.
Solution: Present your solution to the agitated problem. Start with any of these three, and you’ll write faster and with a better idea of where you need to end up.
SmallBizLady: Conversion is a big part of what you do. Does that mean you only focus on getting a sale? Doesn’t that get annoying for potential customers of your clients?
Sean McCool: Great question! Making a sale is only one type of conversion. I define conversion as a trackable action that moves a person closer to becoming a customer or client. For example, you can use a lead magnet such as an ebook, a click-through in an email to watch a video, or a call to action such as leave a comment on a social media post, etc. There’s a whole conversation here on what’s trackable but just know nearly everything is trackable online.
SmallBizLady: Why is it important for small businesses to understand their company’s narrative?
Kim I. Plyler: With all the changes happening in the media landscape, it’s critical for small businesses to fully understand their company’s narrative. Having a clear, concise focus that is repeated by everyone on your team helps key stakeholders and the public understand what your business is all about. It truly reaches your bottom-line.
SmallBizLady: How do you handle clients who come to you who do not have a handle on their “narrative” or “story”?
Kim I. Plyler: We have a specific process that we go through to help a person or an organization discover their story, develop it, and share it with key audiences. Master Your Story is a process platform program that takes individuals or businesses in the present moment and helps them draw from past experiences to craft a future that improves their lives as well as humanity.
SmallBizLady: What is one trend you see in your field of communications that could benefit small businesses?
Kim I. Plyler: Web-based communication in real-time (WebRTC) is a truly breakthrough concept that allows you to run a video conference and to collaborate with people in the internet browser without installing any other program, special plugins, modules or accompanying programs. Thus, users acquire an incredibly simple tool to support all types of remote communication: chat, screen sharing, content sharing, audio, and video communication. This levels the playing field between BIG businesses and small businesses.
If you found this September 2019 #SmallBizChat interview helpful, join us on Wednesdays 8-9 pm ET; follow @SmallBizChat on Twitter.
Here’s how to participate in #SmallBizChat: http://bit.ly/1hZeIlz
For more tips on how to start or grow your small business, subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.