Dear M & M:
I don’t understand last week I attended a marketing seminar and I heard someone say “features tell benefits sell”. What are they talking about?
All products and services have features and benefits. Features are your products characteristics that translate into benefits. For example, an air mattress with an attached pump is a feature. What would the benefit be? The pump takes the work out of blowing the mattress up. Therefore, the benefit your air mattress has is it comes with a pump making it valuable to you as the owner of this air mattress because the pump allows you to easily inflate the mattress. Features can be easy to point out, but describing benefits may take more thought. Benefits can provide emotional or financial rewards to attract customers. Financial rewards allow the buyers to save money, make money or gain time. Emotional rewards allow to buyer to feel better or safer from using your products. An example of an emotional feature and benefit could be seat belts on a car. The seat belts are a feature. Using them could be a benefit. We all know seat belts can save lives. The reason they say, “features tell and benefits sell” is simple to remember once you understand that feature tell about the product and the benefit is the reason they will buy. In our last example we buy cars with a feature (seat belts) and buy the car because it is equipped with a safety feature (or benefit) aiding users. The benefit is we all become safer while operating the vehicle because of the feature seat belts.
Dear M & M:
Why do I need a balance sheet and what can a balance sheet tell me about my business?
Dear Jim: Input from a balance sheet can provide the business owner and stakeholder’s valuable information about what the company owns (assets), what is owes (liabilities) and what is left over (net value or equity). A balance sheet is a picture of your business at a particular point and time. Think of a balance sheet like a scale. Liabilities + net worth = assets. One statement alone cannot diagnose your company’s financial health; therefore one should understand and generate income statements and cash flow statements in conjunction with a balance sheet to regularly review your company’s financial health. Generally speaking all three of these (Income, Balance Sheet and cash flow) will help you realize the valuable role money plays in every business decision. Besides determining if you are making a profit or a loss, you calculate current and future financial needs. For lending purposes these statements will help you determine if you can afford to pay a loan or determine what collateral one might have to secure a loan. Financial statements are meaningful, written records that allow you to diagnose financial strengths and weaknesses and can help you increase the life and profitability of your company. At a minimum one should prepare annually all three (income statement, balance sheet and cash flow statement). I would recommend you sit down quarterly with your accountant, CPA and/or management team and analyze all three statements. Make comparisons of last years, last quarters or last month’s statements. I would recommend you prepare all three financial statements monthly and that you diagnose your company’s health monthly.
To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email firstname.lastname@example.org or contact the Sierra Vista Economic Development Foundation(EDF) at 520-458-6948 or email email@example.com