Categories
Business model Competition market research Marketing planning Positioning Small Business startups strategic planning

Starting a New Business: Part 2 – Are you ready?

selliner_see
Creative Commons License photo credit: elbfoto

Last time we talked briefly about things to consider in the early going of the business you just started.

We talked a little about the product/service, but focused mostly on some basics about licenses/permits and getting supplies with a little taste of business model talk.

The reality is that we shouldn’t have talked about most of that stuff, but we had to start with that conversation because it’s the type of thing new business owners expect to hear.

You might be thinking “I’ve already got a product, I’ve already got a business (even if it’s only a few days old) and I need to know what to do to start. NOW. RIGHT NOW. So help, already…”

Problem is, that’s not the best place to start if you want to build something lasting.

Fake left, go right

Sorry for rushing ahead last time, but I wanted to get you into analysis mode just a little bit before we moved ahead (or back) to this step.

We did talk briefly about the business model and I hope that provoked you a little. Ideally, it made you think that you might not have all the info you need to work out the details of your model. Those of you who thought hard about it probably wondered if you didn’t have a lot more work to do.

You do.

Before you order those business cards, buy those supplies, determine your costs and set your prices…you need to research your market.

This means far more than doing a keyword check to see how many Google searches there are for “gold plated harmonica” (if that’s your business), much less finding out if GoldPlatedHarmonica.com is available and at what level the competition is already delivering these items. Those things are just part of the process.

Questions, questions

How much do you really know about the market you’re entering? Assuming the market isn’t brand new, have you researched industry product, service, supply and performance trends? What do they indicate as areas of opportunity? Areas to avoid? What are the emerging product/service trends in this market?

Are you familiar enough with your prospective ideal customer to enter their market? Or will you stand out in the wrong way and alienate your business from them?

Who buys gold plated harmonicas? Where do they live? What kind of stores do they purchase music supplies in? What else do they buy at the same time? How many are sold per year? Where are they purchased – online, in stores or both? How many are purchased annually? Are their peaks and valleys in purchasing habits? Are there peaks and valleys in supply? Are there legislative, import or similar issues that you must deal with at startup or on a one-time basis? Are there any liability concerns for the product and its use?

How many do they buy over their lifetime as a purchaser of gold-plated harmonicas? Is there a progression of better and better purchases? Is there the possibility of referrals by your existing customers to others who favor gold-plated harmonicas? Are there opportunities to render service, deliver purchases or offer training classes?

At what age do people start upgrading to gold-plated harmonicas? At what age do they stop purchasing? How do people decide to be in the market for gold-plated harmonicas? What do they buy in the year or two prior to moving up to a gold-plated one? Where can you buy replacement parts? Is there a repair market or do people replace them? Is there a scrap market? (they are gold-plated, after all)

Who dominates the market today? Why do they dominate the market? What will you do to set yourself apart from them? Is it possible to partner with them?

These questions come into play when writing a marketing plan but many of them also have bearing on your business model / business plan.

Are you asking enough of the right questions? Are you doing the research necessary to assure that your business plan / model make sense given the market of available buyers?

These questions are not intended to scare you out of a market. Quite the contrary, they are intended to make your entry strong enough to keep you there.

Categories
Business model Community Creativity Economic Development Ideas Improvement Leadership market research Positioning President-proof Small Business startups strategic planning Strategy

One way to create sustainable jobs

Recently, the Flathead Beacon published a story about a global tech-oriented business that continues to grow right here in rural Montana.

This business started from scratch and achieved critical mass…

  • Without tax breaks that often encourage unsustainable business models.
  • Without specially crafted laws that treat their industry or part of their industry “more fairly” than others. Rhetorical sidebar: What exactly is “more fairly”?
  • Without the work of half a dozen lobbyists in Helena or Washington.

In other words, they started just like your business likely did, probably using the same methods most small business owners use – the same thing that I suggested when we talked about the fitness center just a few days ago.

They found a need and they filled it.

Several years back, I remember sitting in a coffee shop next to someone interviewing a candidate for a job with what was then the startup roots of the company discussed in the article.

The discussion and the numbers I overheard told me they were serious, sustainable and positioned well. I’m really glad to see this business continue to grow.

In good economies and bad, your business model has to make sense on its own, no matter what’s going on in the state capitol and DC, and no matter who is in the White House.

Categories
attitude Business culture Competition Creativity Employees Entrepreneurs Honda Leadership Management Manufacturing quality Small Business startups

Honda on Failure

Just had to share this video from Honda on failure.

Good, good stuff to share with your team.

Categories
affluence Buy Local Competition customer retention Entrepreneurs Facebook Internet marketing Marketing marketing to the affluent Marketing to women Retail Sales Small Business Social Media startups Strategy Word of mouth marketing

After The Honeymoon

Recently, I stopped into a niche retail business for the very first time.

They’ve done a nice job with it. Haven’t been open long, so some of the obvious things I’d suggest to make the place a real customer magnet weren’t in place yet.

I have a feeling they might get there, but time will tell.

What worries me most about my visit is that they did nothing to see that I’d return…

  • I wasn’t asked how I’d be using their product – and it’s a natural question for them, not a nosy none-of-your-business one.
  • I wasn’t offered any additional information showing all the other items they make.
  • I wasn’t asked to check out their Facebook page, which will someday hopefully be full of ways to use their product.
  • There was nothing letting me know that another business in town uses their product, so that if I really loved it I could go there too.
  • There was nothing in the store or on the products that included their website address on it – including the receipt or the label on the product.
  • I wasn’t asked if I’d like to be notified when they make special stuff. Doesn’t matter whether that notification happens by phone, text message, Facebook, email list or even a printed newsletter, just notify me.
  • I wasn’t asked to let them know how I liked their stuff by going to their site or Facebook page (which also doesn’t encourage this) or heaven forbid, filling out a self-addressed postcard or picking up the phone.
  • I wasn’t given a coupon or “send-a-friend” promotion so that I could tell my friends about them if I liked their stuff (that’s also what the Facebook Like button is for).

Doing ALL of this might be a bit pushy. Doing NONE of this is a big mistake.

Look, I know they are a new place and some of this takes time to get going.

You may even think I’m being hard on them, but I’m nowhere near as hard on them as the market will be.

No Second Chances

Re-elected politicians get second chances. Folks who make mistakes, like Michael Vick and Martha Stewart, get second chances.

Businesses are rarely granted that luxury.

You have to take advantage of the “honeymoon of newly open”.

During your honeymoon, people will…

  • Visit your store even if they don’t need what you sell.
  • Tell their friends that they visited, even when they might not normally do so.
  • Click “Like” in Facebook just to give you a little push, when they might not ever use that button.
  • Cut you some slack for mistakes like untrained staff and other stuff that happens when you’re still trying to get all the kinks out.

When you operate a niche business, not every one is going to decide to be your customer. Those who do more or less raise their hands and say “me, me, me!”

When they do that, your job is to make sure to remind them to come back regularly, not just when they remember to return. Leave it to them to return at random and you might not see them for months.

Make the honeymoon last forever

Customers are hard to replace, even in a good economy. It’s particularly difficult to go out and find 100 new customers tomorrow because revenues are tight.

It’s a lot easier (and smarter) to earn just one new customer a week, keep it up year after year, and do whatever it takes keep most of them.

So let’s go over this again.

  • You love whatever you do so much that you quit your job to do it. That’s great.
  • You spent most of what’s left of your liquid retirement money to fund the business.
  • It cost more than you thought it would to get going, so you borrowed from your in-laws, your family and friends.

After doing all that, please don’t tell me you’re going to ignore the very people who said “me,me,me” by letting them walk out the door as if they walked into a box store.

Keep that up and you’ll be back at your old job in no time – if you can get it back.

You didn’t like that job anyway, so please do these things for yourself and your business.

Categories
attitude Business culture Competition Corporate America Entrepreneurs Small Business startups

On being your own boss

Startup wizard Paul Graham’s essays are so good, I give one of them to high school graduates as a gift to read.

Today’s guest post is his essay about the naturalness of being your own boss and/or working in a startup.

In my experience, the energy and excitement (perhaps partly due to the risk) of those situations exceeds that of any normal business – but I have no doubt there are exceptions.

In fact, if your not-really-a-startup-anymore-business has the energy of a startup, I’d like to hear about it. One obvious example would likely be working for NASA in the late 1960s, but there are surely others – and more current examples.

Enjoy.

Categories
attitude Business culture Entrepreneurs Improvement Leadership Motivation planning Productivity Small Business startups strategic planning Strategy Technology

Scoble, Secretariat and Mister Ed

A while back, Robert Scoble wrote a terrific post on Scobleizer about the worst things that startups do.

I suggest you hop over there and check it out even if you aren’t in the technology business. When you’re done, come back so we can apply Robert’s comments to your not-a-startup small business. (Psst…While you’re over there, I suggest you subscribe to his blog, even if you aren’t in the tech world. You’ll be glad you did.)

Now that you’re back, let’s look a little closer at Robert’s list because it isnt just startups that make these mistakes. Here’s a small business angle on his list of mistakes:

1. Have plush offices in the most expensive part of town.

I haven’t managed to make this mistake as yet. Haven’t used someone else’s money for a startup though, maybe that’s why.

On the other hand, there have been times when I should’ve kept my office at home and didn’t. Sometimes it’s right, sometimes not. Think hard about the reasons why. Cash flow is always a concern, and more often than not, a critical strategic piece.

2. You canâ??t tell me what you do in a single Tweet.

For those who don’t use Twitter, that means: “Describe your business in 140 characters.”

For me, the Twitter version is “I help small businesses get more customers, become more productive and make more profit. Guaranteed.”

I find myself tinkering with that now and then, but it always seems to come back to the basics. If you aren’t interested in getting / keeping more customers, becoming more productive and more profitable, we don’t have a lot in common to build to a business relationship on.

3. If I look around and donâ??t see programmers.

Scoble’s talking about tech startups, but his point hits home for you as well – no matter what you do.

In a tech startup, programmers mean product and service creation. Someone’s creating something. In your business, product and service creation are equally important.

For me, if I’m not marketing, creating products and services, or delivering them…you could say I’m wasting time.

4. You hire a PR firm. (4b: you donâ??t have a blog and a Twitter account)

Hilary will probably beat me up a little about this – but note Scoble’s criteria – *startups*. If you don’t have a product or service for sale yet, most companies don’t need a PR firm. There are exceptions, but your business likely isn’t one of them.

If you’re open for business, this one isn’t a mistake unless you’re doing it really badly.

Example mistake: Referring anyone and everyone with questions to sales or PR (or someone else) because they aren’t allowed to talk to the public, or the press, and so on.

I don’t mean questions about your top secret process, chemistry, electronics or whatever. I don’t want to know the “I could tell you but I’d have to kill you” stuff.

We want to know why we should care…and despite the secret sauce stuff that you can’t tell us, we also want to know why *you* care.

Every single person on your staff had better be able to tell your company’s story with passion (at least their part of it).

No one, including me, wants to be bored by you reading the 9 paragraph mission statement that no one – including the CEO – remembers.

Infect us with your enthusiasm for what you do, even if you’re a divorce or bankruptcy lawyer. Think about that for a minute.

I can tell you one thing – if you step into the room sometime when I’m speaking to a group, you’ll damned sure get infected with the idea that you can do better. Lots better.

5. They spend money on the wrong things.

In the programmer world, the bad chairs and lousy monitors Scoble talks about are right on the money. If you’re a programmer and you don’t have dual monitors (or more) on the computer where you write programs, you’re working with a dull axe.

In every business I’ve ever seen, there are resources that make people more productive, that make them feel valued, that make them happier to work harder.

No one likes being unproductive. Watching either the Windows hourglass or the little multicolored Mac spinning thing is *the most annoying thing in the world* to a computer user. How much of your staff’s day is spent doing that?

How’s that make them feel about the value and importance of their work?

Beyond that, what’s that time costing you?

6.  They donâ??t fire fast enough.

At almost every business, some of the best people leave because they aren’t being challenged or because others aren’t pulling their weight.

Just like Scoble said and it isn’t just startups.

Your best performers have little tolerance for those who aren’t performing, much less for poor tools. The situations that businesses put them in often are what force them to go out on their own. If you’d like to avoid competing against your best performer(s), provide your racehorses with the best possible environment and when you hire – hire the best possible folks to accompany them.

Don’t make Secretariat share a stall with Mister Ed, (no matter how cool he was).

7. You picked the wrong infrastructure.

Most of us have hitched our wagon to the wrong horse at one time or another.

Next time, choose better. Choose for the right reasons.

Is your web host critical? Is a steady supply of large amounts of electricity critical? If you start to grow, are there enough skilled employees available in the area?

We got lucky on this one – there was a call center nearby with *excellent*, well-trained people – and we hired some of the best folks in the valley.

8. You let VCs control your management team and strategy too early.

Most of you won’t ever deal with a venture capitalist, but the same kind of issues can hamper your growth and stability.

Does your ability to access capital control your strategy? Does the size of your American Express bill?

Cash flow is as strategic as any other aspect of your business, sometimes more so.

9. You have a too cool name and logo.

There’s nothing wrong with a great name and logo, but there had better be some meat on the bone.

10. You say yes too often, particularly in engineering decisions.

This is the one that used to get me, and it was a hard lesson to learn. One of my business partners used to ride me now and then about “building end tables when we needed coffee tables”.

In other words, “Give me the big stuff, the little stuff can wait”.

I’ll quote Jim Rohn as usual on this topic: “Saying no means you can say yes to something more important.”

This isn’t just about software. Everyone has decisions to make about what to do, not to do, whether you’re an attorney, a programmer, a car wash or a restaurant.

11. Startups pick old technology because itâ??s familiar.

In his post, Scoble said “…going with the same stuff your dadâ??s company used?”

Technology can be as strategically important as (almost) every hire you make.

Maybe not your choice of operating system or spreadsheet, but how you use technology to gain edge after edge.

This is one of the reasons why I bought a Mac last year. Most of my tech-related work is still on Windows, but for me to help myself and clients reach even higher, I needed to be able to explore custom iPhone/iTouch apps. That requires a Mac.

How have you stretched your technology-related capabilities lately?

12. You donâ??t change direction fast enough.

You’re either setting the tone or singing along.

If you’re echoing the moves of someone else, you’ll always be behind unless they misstep badly, not to mention that it’s pretty hard to lead a market in wait and see.

If that new thing is *the* next big thing or the next big flop, wouldn’t you rather know before everyone else? Wouldn’t you want to be the one taking your clients that direction first – or knowing first not to take your clients there?

Going to the moon isn’t about planting a flag and taking a picture. It’s about the challenges you face and the lessons you learn on the way to liftoff.

Think about Robert’s list. Where can you improve?

Categories
attitude Business culture Competition Creativity customer retention Direct Marketing Email marketing Entrepreneurs Ideas Marketing Marketing to women planning Public Relations Restaurants Retail Small Business startups Web 2.0 Word of mouth marketing

Shivering your business timbers

Who dressed YOU?
Creative Commons License photo credit: juhansonin

Today is Talk like a Pirate Day (TLAPD).

In honor of such a fine day, a few thoughts, er I mean… Aye, what would a pirate do t’ strenghen your business today? A pence for an old man o’de sea?

First, how about sliding over to Mashable and look at their tips for celebrating Talk like a Pirate Day… and then come back here for some pirate advice before you get business scurvy, matey.

Great ideas for celebrating the day, but bummer – your business is open on September 19 every year. Now what?

Wasn’t that awesome Mashable post a great example? Mashable is a tech news blog. See how they took TLAPD and turned it into their own – while doing exactly what they do best?

Yes, it’s your turn.

So…what can you do to (here it comes *again*) use the news (calendarrrr, whateverrrr) to make your business stand out on this fine, fun day?

Maybe by the time you see this, it’s too late.

Let me help: Put it in your appointment calendar for August 19. Make it recurring on an annual reminder. Type this: “Plan Sept 19 Talk Like A Pirate Day promotion.

Yarrr, some examples

“But Mark, our business doesn’t have anything to do with pirates…” (Yes, I *can* hear you saying that)

 

OK, some examples are in order to get your creative juices flowing.

Maybe you make custom coffee mugs for the day that you only use on Talk Like a Pirate Day. Or you order a gross of them for cheap and give them away with today’s purchases. Of course, the mugs will have a silly pirate image, your phone number, URL, etc.

If you own a boat store, raise the pirate flag, silly. Dress everyone up like a pirate, or have some temps come in and dress up like pirates. You of all people should be able to hit this one out of the, uh, dungeon.

Own a lingerie store? If you can’t see some great ideas to get publicity using TLAPD and some temp models, you really need a cuppa joe:)  Hint: Imagine it was Talk like a French Maid Day. Now translate that to pirate.

Run a computer store? What a great time to have a “Bring your computer in and scan it for pirates (ie: spyware etc) Day”. Or to have an event that educates your clients about software piracy (find a smart way, please), or similar.

Develop software? What a GREAT day to offer amnesty to anyone who pirated your software and is ready to come clean. They liked it enough to steal it and keep using it, now they’re convinced that they have right product. Help them buy. Don’t embarrass them.

Do you run blood drives? Put your “I donated” stickers on toy eye patches. You can get half a million of them for $3 at Oriental Trading (well, close) or make them yourselves (a fun event for kids). Dress everyone up. Don’t be so boring. It’s just blood.

No matter what you do, make a fuss…matey.

Promote your event far and wide, have some fun with it, dress up your staff or those temps I mentioned and be that purple cow.

Categories
affluence attitude coaching Employees Entrepreneurs Leadership Montana Motivation Personal development planning Small Business startups

The new economics of entrepreneurship

Rink of Fire
Creative Commons License photo credit: C.P.Storm

Today’s guest post from Guy Kawasaki talks briefly about the current state of the economy and more importantly about the economics of starting your own business these days.

Guy’s post offers more reasons why I keep pestering local folks to start their own business – *especially* if they are currently laid off.

Categories
Advertising attitude Business culture Business Resources Community Competition Creativity Customer relationships customer retention Customer service Entrepreneurs Improvement Internet marketing Leadership Marketing Motivation Positioning Public Relations quality Restaurants Retail Sales Small Business Social Media startups Strategy The Slight Edge Twitter Video Web 2.0 Word of mouth marketing youtube

@GaryVee: Don’t be average, Average Joe

Normally, I hold guest posts till the weekend, but folks, that wouldn’t be fair to you. This video is a gift that keeps on giving and you need to see it now. Enjoy.

Whether you run a specialty retailer in Billings, a publishing company in Winnipeg, an e-commerce store in Colorado Springs, a niche business services operation in San Francisco, or something else entirely, you simply have to absorb this.

(video has been removed from the net – sorry. If I find it, I will repost the link here)

There are numerous instructive moments there for everyone and they should be drop dead obvious. It might take more than one listen, but do it.

Average Joe

If you read the comments, you’ll see someone ask “What’s in this for the average Joe?”

Beyond @gapingvoid’s “Don’t be average” comment, if you can’t easily take away a dozen lessons from this video, you really need to decompress and watch it again and again until they sink in.

Gary’s one suggestion to anyone who would challenge him in the wine market: “Be better”, suggesting that if he saw Gary Vaynerchuk in his market, he’d go after him big time.

Categories
Alzheimer's Automation Book Reviews coaching Compass needed E-myth Entrepreneurs Hospitality Ideas Leadership Management planning Positioning Scouting Small Business Starbucks startups Strategy systems

Someone keyed my Karma

Month before last during a coaching session, I had a pretty frank conversation with a client about freedom.

Not the Constitutional kind of freedom, but freedom from the ball and chain that a business can become. I don’t mean that in a bad way, just that it can become a restriction to your freedom.

Not only that, but it’s common for small family-owned businesses to almost not be a business if the family isn’t there. If you aren’t there. Needless to say, this isn’t an ideal situation when unexpected events occur.

During that conversation, we talked about configuring the business so that it could stand an unexpected, required trip out of town for a month (or 3).

A month went by.

In last month’s session, we were talking about their retail business and once again, we talked (among other things) about how I felt they needed to spend some serious effort on figuring out how to grow and insulate the business from unexpected turns in life.

I gave them a few examples of things to work on, knowing that we’d need to revisit it and fine tune the strategy as we move forward.

And here comes Al.

Then I mentioned that I was getting to take my own advice, as I had just discovered that an immediate family member has been diagnosed with the early stages of Alzheimer’s.

Result: Recent efforts to move a portion of my client base a little closer to home were going to have to be reversed.

My business is going to be changing because – as I advised my client – I don’t know when I will need to disappear for a few months. Not completely disappear or be disconnected from the net, but just not be home for an unknown period of time.

A few weeks went by, and I was hoping that the owner’s thought and effort was going into that project. I’m sure it is, but it’s not an immediate change to do this to your business – particularly if you are in retail, restaurant or hospitality (ie: hotel, motel, b&b).

Another month goes by.

Last week, we talked again to schedule our next call and it turned out that the very thing I had advised preparing for was happening.

Family responsibilities requiring out of town travel on little notice for an unknown period of time. Really sad.

Meanwhile, I look in the mirror and remind myself that my business is changing for the same reasons and that I need to accelerate the pace.

Are you prepared for that sort of thing? Depending on your age and your parents age, it might be more apparent to you – but it can happen to you even if you are a 26 year old entrepreneur.

If you don’t ask for help, you aren’t likely to get it.

In 70% of small business failures, a key factor was the owner not recognizing or ignoring weaknesses, and then not seeking help.” – SCORE / US Bank survey of failed small businesses

Do you have someone in your corner who will ask you the tough questions?