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Archive for June, 2011

If you are considering opening a small business, you may not have any idea where to start. Keep in mind that the first step with any business is the idea. If you are considering opening a small business, you probably have the idea, but need to know what the next steps are.

A good place to start is to create a business plan. A business plan is a written plan of your business and is needed to obtain financing, through financial institutions or investors. Business plans generally contain three different sections of information. The first section is the business concept. In this section, describe your business, its structure, its products or services and your plans, as the business owner, regarding how you will make the business successful. The second section is the marketplace section. In this section, describe who your customers are, who your competitors are and what sets your business apart from others. The third section is the financial section. This is where you will predict your revenues and expenses. You will create pro forma financial statements as well as financial ratios using your best estimates. Pro forma statements are statements that contain predictions of financial information. Many people starting a business will create a pro forma income statement, balance sheet and cash flow statement.

To create these statements, many companies use business software. Business software is a valuable thing required to start a business anyhow, so it’s often a good idea to invest in this software during preliminary planning stages of the business. As a business owner, you are likely to have employees. With employees come paychecks. To handle this, you must also purchase payroll software. Iris Software is one brand of payroll software that is highly recommended for business owners, and people beginning new businesses.

Continuing with the business plan; this plan will help you outline details of the business and make important plans. It is vital that you create it as realistically as possible and that you complete it prior to opening the business. A good business plan can help you attract investors, and can also help make the financing go through.

When starting a business, there are many other factors to consider and decisions to make. Many of these things must be done prior to making a business plan. For one, you must choose a location for your business. As you look into locations, keep in mind several things, but primarily the convenience factor. Look at several locations and decide if it is strategically located for customers to easily see it and come to it. Is there enough parking? Can you afford the rent? Choose the best location based on these, and other, factors.

You have a brand new product you can’t wait to promote in your online store and watch the sales come rolling in. You’ve made sure to include a quality image, the name of the product, and maybe a few specs about the product. However, will that be enough to get your product “found” on the internet when consumers do an online search? Most likely not.

What you need is a sales-driven product description and you don’t have to be long-winded about it! In fact, you can sell it in 75 words or less. If you or someone on your staff can write in a conversational tone, can list the features of the product, and one or two benefits of how the product will enhance the consumer’s life, you are way ahead of your competition.

Don’t make Customers Read Your Descriptions Twice….

because they won’t. To begin writing your product descriptions, consumers must get the meaning of your message the first time. If you have long, rambling sentences, they tend to complicate your description and the consumer will click out of your web page. Long, rambling sentences seldom come to the point and leave customers confused.

Especially with web product descriptions – every word must count. Attention spans are short for web surfers, so get to the point quickly and list your most compelling reason to buy the product first. With online users, you typically have just a few seconds to grab a potential consumer’s attention, so don’t waste their time. Remember, their finger is on the mouse and losing a potential customer is just a click away.

Begin with Features
First, what exactly is a product feature? Features provide the description and specifications of an item. You can find a product’s features in the instructions or user guide that come with the product. Some examples of typical features would be:

• product material ( stainless steel, cotton, plastic, etc)
• product function (tells time, toasts bread, slices meat, etc)
• size and dimension
• colors available
• # of pieces
• Price

Drive Sales with Benefits
Next, look at the second component of a product description – benefits. Incorporating benefits, not just features, into your copy descriptions, promote the desire to purchase product. They make an appeal to the customer and fulfill a need. Benefits show your customer what he stands to gain by purchasing your product. Benefits answer questions such as:

• Will this product make life easier or provide a convenience?
• Does the product solve a problem?
• Will the product save time or money?
• Does this product alleviate a fear?
• Does the product flatter?
• Is the product exclusive?

Here is an example of a sales-driven product description for a not so glamorous product. The description is written in a casual, engaging tone, features are listed, and the desire to purchase the item is created.

Skin Stapler 35W Sterile
Shorten surgery time and get consistent, professional results with this hospital-quality skin stapler. An alternative to stitches, this compact design holds a generous 35 staples and fits comfortably in the palm of your hand for maximum control. With no need to disinfect, skin stapler provides a sterile and affordable option for every medical professional. $19.99

Listed features are:

• Stapler
• Holds 35 staples
• Sterile
• $19.99

Benefits to the consumer are:

• Stapler = shorter surgery time, professional results, alternative to stitches
• Holds 35 staples = compact for comfortable use, ease of control, fits in palm
• Sterile = No need for disinfecting
• $19.99 = affordable, saves money.

If you opened a business with a clear mind-set to have it become an industry giant one day, hiring a business consultant should be among your goals. A consultancy firm can deliver key business developments you may not even think possible. If you are serious in this pursuit, here are some things to think over.

How do I know if my business is a small business?

You should first know your state laws regarding this business definition. Some states may deem that a business belongs to this category if they only have a certain number of employees and earn a particular figure each month. Other places may have more defined rules so it’s better to know how your state views it.

What is small business consulting?

Small business consulting in its basic form refers to consultancy targeted for a small business. Like any other consultancy process, this is set at a particular time. The scope and limitation depend on this schedule.

The plan’s success, however, may be seen at a later period. This happens because some actions implemented today need time to achieve results.

Why would my business need it?

Business growth is all about finding the right means to facilitate its development. Sometimes, this is achievable if you are an insider but there are also times a resource person can do it better and faster. This person can do this because he or she has no bias about your business and the operations it undertakes. Since the person is not privy to office politics and is a virtual “outsider,” he or she can talk to key staff and personnel easily to find out how they contribute to the office’s goals.

What makes a good consultant?

A good business consultant should at least do three things: (1) study your business, (2) know your concerns, and (3) formulate realistic plans.

Studying your business is essential so the professional knows how everything is currently going. This involves looking at your processes be it in production, accounting, hiring, or giving out promotions. It helps the person know the ins and outs of the business in general to see which other areas might need improvement.

Verbalizing your concerns and eventual goals early on is also necessary so you can work as a team later. While the business consultant might be the one to think of creative ways, he or she will still need your inputs on certain areas. Consulting involves much talks and sometimes even debates so prepare for this eventuality.

When it comes to realistic plans, this involves breaking down the whole scheme he or she proposes. This should involve a long-term goal and a short-term goal too. Long-term goals are something that may take months at a time to complete or even years. Short-term ones are essentially the breakdown of its lengthier counterpart. This move ensures certain levels are attained before proceeding to the next steps.

We have all heard the statistic that 70% of businesses will fail within the first two years, however different sources may rate this higher or lower, 50-80% in five years. Whether this seems high or low to you there are definitely things that business owners can do to avoid being just another statistic. The best way to do this is to learn from the mistakes of others.

Wrong delivery system:

Many business professionals claim that businesses fail due to lack of capital. I would disagree after having bootstrapped my own business several times and then building it up to millions. I will however agree to this, what lack of financing creates lack of a solid delivery system exemplifies. So you have a great product? That’s not enough. It’s how you deliver that product that makes all the difference. Companies like McDonalds and Starbucks have an almost flawless delivery system. We are surrounded by perfect models of winning systems yet some still choose to “do it their way”. I am not suggesting that we become carbon copies of Starbucks or McDonalds, but why not start with the things that are working instead of re-inventing the wheel? Try reverse engineering. Instead of starting with an idea and working from there, try imagining yourself ten years down the road with a successful business. How would you be doing it?

Satisfying needs vs. wants:

In our experience as consultants here is another way we find to short circuit our success. We mistakenly believe that we have discovered a need and all we need to do to get rich is get our solution to market. Here is a newsflash-no one needs a gold chain, fur coat or Prada wallet. In our experience it is an idea that addresses what people want that has a competitive advantage. What people need they must be talked into UNLESS they need it to get what they want in the form of an outcome. Even if something is a need people are still sold on the benefits. Proprietary tools are needs that are really wants (save time, save money, go faster, do more) so even a need must be fuelled by a want. Give people what they want and you will be rich.

Wrong location:

Location, location, location! Enough said? It is always better to choose a smaller location in the perfect spot over a larger, cheaper location that is out of the way. The best example of this is when Sir Richard Branson build the first Virgin Records store inside a cobbler shop just to be on Oxford Street. The lesson here is it worked! Hmm it worked out pretty good for him. Make sure you give your business the best chance from the start and choose the right location.

No marketing knowledge:

After working with many different businesses around the world it is evident that most businesses have no understanding of marketing. For example, marketing based on price requires volume. This is not a good method for startups unless they are deeply financed. Use some common economics and accounting principles when making marketing decisions. You can get rich by selling on price, but there are much easier ways to accomplish this. If you are selling a service rather than a product, then start at the high end of the spectrum. This will allow you to see clearly your competition if there is any at all. When the sales start rolling in you will realize greater cash flow right away.