Free daily tips, information, advice, and ideas
with examples from small businesses.
The heart of business planning is marketing. I've written a lot about this in the past in this blog--especially over the past two days.
When you apply for a loan, however, the lender wants as much information as you can provide. A formal, written business plan must cover other aspects of you and your business.
Example: In one of my own businesses, I once applied to a bank for a substantial loan. They wanted to know all of my personal history as well as the complete background information on my company for the previous five years. So much for yesterday. Then, they wanted to know how I had arrived at the $100,000 I was requesting--they wanted to know the future. How would I spend the funds? How did I know I was requesting enough? How would I pay them back? How would I handle sales problems as they surely would arise? How would I handle competition? How would I ride through a general economic downturn? How well did I know my industry? The questions seemed endless, but I had to admit they were pertinent. After all, the bank was considering putting $100,000 on the table, and they wanted assurances that I could be trusted and would pay back the loan. Then came the kicker. Not only did they want answers to all their questions, but they wanted everything turned into numbers projected forward for five years.
Reducing verbiage to hard numbers is like wringing all the water out of a wet towel. When you do the numbers, all the crap disappears. Your history to date and your projections into the future--this is where the rubber meets the road.
The numbers give validity to all that you say in a written plan. This is where you convince someone else that they can believe in your market projections.
For more on planning, see previous blogs--Planning Box, Business Check-up, Daily Planning, etc. Don't neglect the planning part of running your small business. It's some of the most important work you will ever do.
Thursday, December 11, 2014
Wednesday, December 10, 2014
More about planning
Free daily tips, information, advice, and ideas
for small business with examples from small businesses.
Planning comes naturally to the small business owner. You tend to concentrate on where you're headed and what needs to be done today to get to tomorrow.
The past is important. It teaches us valuable lessons. Good and bad avenues have been traveled by all of us. We owe it to ourselves to learn from the past.
But business planning is all about tomorrow. And nothing in your future is more important than the markets you serve.
Your customers determine your future. That outrageously complex computer game you devised will not turn into a business if no one buys it. That new beer you brewed and bottled will remain on shelves if no one buys it. And you grow tired of looking at all those pictures you painted that stare back at you in your studio.
Start your planning process with the most important aspect--marketing. Like the good witch says in the Wizard of Oz, the place to begin is at the beginning. And the beginning of your business plan is with marketing. Today's marketing.
Who are your customers? How do you find them? Is their need a continuing one that you can supply? How will you expand the customer base in the future? What's the competition? Have you accounted for the changes that future technology will impose? Is marketing and selling one of your strengths? If not, how will you compensate?
The answers to these questions will help you through the daily grind. The answers also provide the basis for the most important part of your business plan. You can carry it around in your head, or you can write it down. Writing it down will bring new questions to mind.
Writing a business plan is not difficult. Start by jotting down ideas and thoughts as they occur to you. I've done this in the past--I simply collected the pieces of paper in a box and after a month or so, picked through them. Those ideas that made sense I put together into a brief write-up. This is the beginning. Do this several times, and you'll see a business plan emerge for your future business.
This gets you started on a business plan. Tomorrow, I'll write more about this and the next step. Stay tuned.
Don't neglect planning. Whether you do it in your head or on paper, it's some of the most important work you'll do. Ultimately, you want to know where you're headed so you can take some steps to get there. Otherwise, your business will meander along and your daily work will gradually lock you into a path that you might not want.
for small business with examples from small businesses.
Planning comes naturally to the small business owner. You tend to concentrate on where you're headed and what needs to be done today to get to tomorrow.
The past is important. It teaches us valuable lessons. Good and bad avenues have been traveled by all of us. We owe it to ourselves to learn from the past.
But business planning is all about tomorrow. And nothing in your future is more important than the markets you serve.
Your customers determine your future. That outrageously complex computer game you devised will not turn into a business if no one buys it. That new beer you brewed and bottled will remain on shelves if no one buys it. And you grow tired of looking at all those pictures you painted that stare back at you in your studio.
Start your planning process with the most important aspect--marketing. Like the good witch says in the Wizard of Oz, the place to begin is at the beginning. And the beginning of your business plan is with marketing. Today's marketing.
Who are your customers? How do you find them? Is their need a continuing one that you can supply? How will you expand the customer base in the future? What's the competition? Have you accounted for the changes that future technology will impose? Is marketing and selling one of your strengths? If not, how will you compensate?
The answers to these questions will help you through the daily grind. The answers also provide the basis for the most important part of your business plan. You can carry it around in your head, or you can write it down. Writing it down will bring new questions to mind.
Writing a business plan is not difficult. Start by jotting down ideas and thoughts as they occur to you. I've done this in the past--I simply collected the pieces of paper in a box and after a month or so, picked through them. Those ideas that made sense I put together into a brief write-up. This is the beginning. Do this several times, and you'll see a business plan emerge for your future business.
This gets you started on a business plan. Tomorrow, I'll write more about this and the next step. Stay tuned.
Don't neglect planning. Whether you do it in your head or on paper, it's some of the most important work you'll do. Ultimately, you want to know where you're headed so you can take some steps to get there. Otherwise, your business will meander along and your daily work will gradually lock you into a path that you might not want.
Tuesday, December 9, 2014
Business planning
Free daily tips, information, advice, and ideas
with real life examples from small businesses.
Every small business needs to construct a business plan. You deserve the benefits that a business plan can give you.
The business plan forces you to face your future. It becomes a sounding board for you as you move forward. It can help you stay on track toward the successful operation you have in mind. It can help you put all the day-to-day distractions into a longer range perspective.
All of these are valuable. So how do you prepare your very own business plan?
You can find many business plan outlines by doing a Google search. Some are free, others are come-ons to get you to buy into additional services.
Business plans, no matter the cost and no matter who does them, basically boil down to one thing. Business planning is all about the market.
Your business sells products/services. You target a market and the market responds. Defining that market is where you begin.
Who are your target clients/customers? How will you attract them? How will you price your products/services? How much will they spend? Why will they keep coming back?
When you've answered all the market questions that are relevant, you're ready for the next step. Turn everything into numbers.
A business plan is much more than words. When you turn your wordy answers into numbers, reality sets in. Numbers bring brutal honesty to the process.
This is not to disparage intuition. You can feel in your gut a market developing. You want to serve and exploit the possibilities. But translating your intuition into hard numbers can put a better face on your business plan. And save you from some disasters.
Only if the numbers work do you proceed to put your plan into operation. If the numbers identify a glitch, then this must be solved before proceeding.
For example, you might identify a market segment that works on paper, but it is not big enough to justify going entirely in that direction with your business. It might be a sideline or an additional source of revenue to your business but not much of a business in itself. If this emerges on paper with the numbers, then you don't want to head off in that direction. Sidelines can be important in any business, and they might develop into full businesses in the future, but it's a watch and wait proposition.
My father ran a large dairy farm. He did all his planning in his head and he was very successful. But as I was growing up, I sometimes saw him sitting bent over a piece of paper--doing the numbers. It was a lesson that has stuck with me.
with real life examples from small businesses.
Every small business needs to construct a business plan. You deserve the benefits that a business plan can give you.
The business plan forces you to face your future. It becomes a sounding board for you as you move forward. It can help you stay on track toward the successful operation you have in mind. It can help you put all the day-to-day distractions into a longer range perspective.
All of these are valuable. So how do you prepare your very own business plan?
You can find many business plan outlines by doing a Google search. Some are free, others are come-ons to get you to buy into additional services.
Business plans, no matter the cost and no matter who does them, basically boil down to one thing. Business planning is all about the market.
Your business sells products/services. You target a market and the market responds. Defining that market is where you begin.
Who are your target clients/customers? How will you attract them? How will you price your products/services? How much will they spend? Why will they keep coming back?
When you've answered all the market questions that are relevant, you're ready for the next step. Turn everything into numbers.
A business plan is much more than words. When you turn your wordy answers into numbers, reality sets in. Numbers bring brutal honesty to the process.
This is not to disparage intuition. You can feel in your gut a market developing. You want to serve and exploit the possibilities. But translating your intuition into hard numbers can put a better face on your business plan. And save you from some disasters.
Only if the numbers work do you proceed to put your plan into operation. If the numbers identify a glitch, then this must be solved before proceeding.
For example, you might identify a market segment that works on paper, but it is not big enough to justify going entirely in that direction with your business. It might be a sideline or an additional source of revenue to your business but not much of a business in itself. If this emerges on paper with the numbers, then you don't want to head off in that direction. Sidelines can be important in any business, and they might develop into full businesses in the future, but it's a watch and wait proposition.
My father ran a large dairy farm. He did all his planning in his head and he was very successful. But as I was growing up, I sometimes saw him sitting bent over a piece of paper--doing the numbers. It was a lesson that has stuck with me.
Monday, December 8, 2014
Raising prices
Free daily tips, information, advice, and ideas
with examples from small businesses.
Most small businesses operate on a thin margin. Income scarcely exceeds expenses, leaving little to grow and expand.
If this describes your situation, you might give some thought to your pricing. You might be letting your competition guide your pricing, instead of the marketplace.
The market for goods and services is all over the place. You can price low and attract the bargain seekers. You can price to meet the competition and struggle to bring clients and customers to you instead of your competitors. Or you can price higher and attract a higher end market segment.
Example: A baker will not sell many cupcakes carrying a price tag of $100 each. But that same baker can sell a creatively designed cake for a special occasion at $100--or more.
Example: A hairdresser can struggle to make a living pricing haircuts at $10. Raise the price to $50 and the bargain seekers will go somewhere else. Raise the price again, and you'll define who seeks you out for that special haircut.
These two examples show what can happen when you target a certain market segment. Your pricing tends to position your business in the minds of your potential customers. Higher pricing tends to attract a different group of people.
Figuring out and targeting your client/customer base is crucial to growing a healthy business. Adjusting your pricing to a particular market segment helps you do this. You want clients/customers who appreciate--and will pay for--your quality product/service and your superior customer service. You price to attract these people.
Example: A fabric artist who designs and sells women's accessories priced competitively with WalMart will struggle to make a living. By raising prices for a scarf to $75 or more, the WalMart shoppers are weeded out in favor of a more selective and appreciative crowd.
Example: A pet groomer who offers an inexpensive grooming service can double or triple prices by offering a little more. Get the word out: drop your dog off on the way to work and pick up after work. The groomer not only grooms but "babysits" the dog all day. The client will pay much more for the convenience.
Figure out what market segment you want to serve. Then price accordingly. Price too low, and people think your product/service is not worth much. But by moving to higher pricing, you define the market you want to serve--and you end up with a much healthier business.
Pricing must match the quality of your products/services. Without quality, you can't expect people to pay more. But shoppers are astute--they know what they are paying for. And they'll gladly pay more for quality, creativity, convenience, and good customer service.
with examples from small businesses.
Most small businesses operate on a thin margin. Income scarcely exceeds expenses, leaving little to grow and expand.
If this describes your situation, you might give some thought to your pricing. You might be letting your competition guide your pricing, instead of the marketplace.
The market for goods and services is all over the place. You can price low and attract the bargain seekers. You can price to meet the competition and struggle to bring clients and customers to you instead of your competitors. Or you can price higher and attract a higher end market segment.
Example: A baker will not sell many cupcakes carrying a price tag of $100 each. But that same baker can sell a creatively designed cake for a special occasion at $100--or more.
Example: A hairdresser can struggle to make a living pricing haircuts at $10. Raise the price to $50 and the bargain seekers will go somewhere else. Raise the price again, and you'll define who seeks you out for that special haircut.
These two examples show what can happen when you target a certain market segment. Your pricing tends to position your business in the minds of your potential customers. Higher pricing tends to attract a different group of people.
Figuring out and targeting your client/customer base is crucial to growing a healthy business. Adjusting your pricing to a particular market segment helps you do this. You want clients/customers who appreciate--and will pay for--your quality product/service and your superior customer service. You price to attract these people.
Example: A fabric artist who designs and sells women's accessories priced competitively with WalMart will struggle to make a living. By raising prices for a scarf to $75 or more, the WalMart shoppers are weeded out in favor of a more selective and appreciative crowd.
Example: A pet groomer who offers an inexpensive grooming service can double or triple prices by offering a little more. Get the word out: drop your dog off on the way to work and pick up after work. The groomer not only grooms but "babysits" the dog all day. The client will pay much more for the convenience.
Figure out what market segment you want to serve. Then price accordingly. Price too low, and people think your product/service is not worth much. But by moving to higher pricing, you define the market you want to serve--and you end up with a much healthier business.
Pricing must match the quality of your products/services. Without quality, you can't expect people to pay more. But shoppers are astute--they know what they are paying for. And they'll gladly pay more for quality, creativity, convenience, and good customer service.
Friday, December 5, 2014
Small restaurants
Free daily tips, information and advice for people in small business
from experience--been there, done that in several small operations.
Small restaurants and cafes can go through difficult times. They are among the first businesses to feel the pinch in bad economic times.
They can become neighborhood gathering places and this can be the bedrock on which these operations grow and expand.
Kick-starting small restaurants and cafes to the next level takes careful planning. You don't want to mess with the success you already have, but you need more customers.
Example: Bob decided to add music. He contacted a local Irish music group and found that several members played traditional Irish musical instruments--they got together to practice and this presented them with a problem. Bob offered them exposure at his small restaurant on Sunday afternoons--no payment was involved. Soon, the word spread and a house full of new customers arrived. They came on Sunday afternoons, and they came on other days as well.
To solve your own problem, think outside the box. Sometimes, by solving someone else's problem, you solve your own.
Example: Jackie took an approach that involved her love of different cuisines. Her cafe sat less than 50 people. She was busy at breakfast and lunch, but there was little dinner traffic. She decided to add an International Night on Thursday evenings. She offered a Jamaican night, a Casablanca night, and a Tex-Mex night. By that third week, every seat in the cafe was filled with diners clamoring for more. The idea has generated traffic not otherwise possible, and people are referring others.
Every idea you try might not work. And what works for one place might not work in another. But you never give up.
Example: Frank wanted to expand his restaurant to become the "go-to" place for parties and gatherings. He began putting out the word to organizations, companies, and other groups. Everyone, it seemed, needed a place to hold small gatherings, and he had a large room off the main dining area. Frank could serve up food at a nominal price for big gatherings. As word spread, other people wanted to hold other events at Frank's restaurant. Soon, the place was booked most nights (and some daytime events) with private parties, corporate meetings, birthday celebrations, retirement events, reunions and the like.
You never know where an idea for change will lead you. But you stay on top of your game by thinking through and testing every idea that holds promise.
Owners of small restaurants and cafes can expand the business by making use of downtime and unused space. And, if you are clever about it, it won't mean a large outlay of expansion money. Work with what you have to grow the business. And remember, when you add excitement, the word spreads in the community and referrals come in.
from experience--been there, done that in several small operations.
Small restaurants and cafes can go through difficult times. They are among the first businesses to feel the pinch in bad economic times.
They can become neighborhood gathering places and this can be the bedrock on which these operations grow and expand.
Kick-starting small restaurants and cafes to the next level takes careful planning. You don't want to mess with the success you already have, but you need more customers.
Example: Bob decided to add music. He contacted a local Irish music group and found that several members played traditional Irish musical instruments--they got together to practice and this presented them with a problem. Bob offered them exposure at his small restaurant on Sunday afternoons--no payment was involved. Soon, the word spread and a house full of new customers arrived. They came on Sunday afternoons, and they came on other days as well.
To solve your own problem, think outside the box. Sometimes, by solving someone else's problem, you solve your own.
Example: Jackie took an approach that involved her love of different cuisines. Her cafe sat less than 50 people. She was busy at breakfast and lunch, but there was little dinner traffic. She decided to add an International Night on Thursday evenings. She offered a Jamaican night, a Casablanca night, and a Tex-Mex night. By that third week, every seat in the cafe was filled with diners clamoring for more. The idea has generated traffic not otherwise possible, and people are referring others.
Every idea you try might not work. And what works for one place might not work in another. But you never give up.
Example: Frank wanted to expand his restaurant to become the "go-to" place for parties and gatherings. He began putting out the word to organizations, companies, and other groups. Everyone, it seemed, needed a place to hold small gatherings, and he had a large room off the main dining area. Frank could serve up food at a nominal price for big gatherings. As word spread, other people wanted to hold other events at Frank's restaurant. Soon, the place was booked most nights (and some daytime events) with private parties, corporate meetings, birthday celebrations, retirement events, reunions and the like.
You never know where an idea for change will lead you. But you stay on top of your game by thinking through and testing every idea that holds promise.
Owners of small restaurants and cafes can expand the business by making use of downtime and unused space. And, if you are clever about it, it won't mean a large outlay of expansion money. Work with what you have to grow the business. And remember, when you add excitement, the word spreads in the community and referrals come in.
Thursday, December 4, 2014
Networking ideas
Free daily tips, information, advice, and ideas
with examples of how to do it in small business.
Networking meetings provide good promotional settings for small businesses. A networking meeting puts the focus on the small businesses that serve the neighborhood and surrounding region.
Therapists and chiropractors serve the local community. Florists and caterers reach out beyond the local area to attract customers. And everyone needs clients and customers.
Networking groups are easy to set up and operate. Consider doing one yourself to increase awareness, promote your business, and get more referrals.
Example: Frank operates a fitness studio or gym. Exercise machines and free weights keep clients busy, and Frank offers personal training. To increase his client base and get more referrals, he decided to hold networking meetings. But he did not use the networking name. He put the word out on social media that free demonstrations would be held in the evenings of the first Tuesday of each month. He envisioned the meeting as an open house for other business owners, fitness enthusiasts, corporate desk people, and the general public. He got a local caterer to furnish snacks, a local student band to play a short program, and Frank gave a brief talk about fitness programs and answered all the questions. He did not try to sell anything or sign people up for his fitness programs. The monthly open houses are fun and informative, and they have become a go-to destination for the community.
Example: Sandra is a marketing consultant. She was dissatisfied with the handful of business networking groups in her area. So she decided to start one of her own. She spoke with a local restaurant that had a large meeting room The room was never used in the mornings, so the restaurant owner agreed to let Sandra hold networking meetings there once each month on Wednesdays. People arrive, spend a half-hour milling around, talking with each other, and making new contacts. Sandra arranges for a special speaker for each meeting who discusses a subject of general interest--subjects like social media, mortgages and reverse mortgages, lease negotiations, and the like. There is a $20 charge, but it includes a continental breakfast furnished by the restaurant. Sandra puts the word out on her website and Facebook page. She also has a MeetUp.com site--free for the asking. Her networking sessions have become so popular she is thinking of holding a second one each month in an adjacent town.
Whether you call it an open house or a networking session, it can be a valuable promotional tool for your small business. The key to success, it seems, is to go beyond the simple networking idea. Bring in food, a speaker or demonstration, and perhaps some light entertainment, and you can have a winner.
Networking meetings are NOT business card exchanges. They are much more. Good sessions bring the local community together. Yes, you might exchange business cards, but only after you spend 15 or so minutes getting to know the person in front of you.
with examples of how to do it in small business.
Networking meetings provide good promotional settings for small businesses. A networking meeting puts the focus on the small businesses that serve the neighborhood and surrounding region.
Therapists and chiropractors serve the local community. Florists and caterers reach out beyond the local area to attract customers. And everyone needs clients and customers.
Networking groups are easy to set up and operate. Consider doing one yourself to increase awareness, promote your business, and get more referrals.
Example: Frank operates a fitness studio or gym. Exercise machines and free weights keep clients busy, and Frank offers personal training. To increase his client base and get more referrals, he decided to hold networking meetings. But he did not use the networking name. He put the word out on social media that free demonstrations would be held in the evenings of the first Tuesday of each month. He envisioned the meeting as an open house for other business owners, fitness enthusiasts, corporate desk people, and the general public. He got a local caterer to furnish snacks, a local student band to play a short program, and Frank gave a brief talk about fitness programs and answered all the questions. He did not try to sell anything or sign people up for his fitness programs. The monthly open houses are fun and informative, and they have become a go-to destination for the community.
Example: Sandra is a marketing consultant. She was dissatisfied with the handful of business networking groups in her area. So she decided to start one of her own. She spoke with a local restaurant that had a large meeting room The room was never used in the mornings, so the restaurant owner agreed to let Sandra hold networking meetings there once each month on Wednesdays. People arrive, spend a half-hour milling around, talking with each other, and making new contacts. Sandra arranges for a special speaker for each meeting who discusses a subject of general interest--subjects like social media, mortgages and reverse mortgages, lease negotiations, and the like. There is a $20 charge, but it includes a continental breakfast furnished by the restaurant. Sandra puts the word out on her website and Facebook page. She also has a MeetUp.com site--free for the asking. Her networking sessions have become so popular she is thinking of holding a second one each month in an adjacent town.
Whether you call it an open house or a networking session, it can be a valuable promotional tool for your small business. The key to success, it seems, is to go beyond the simple networking idea. Bring in food, a speaker or demonstration, and perhaps some light entertainment, and you can have a winner.
Networking meetings are NOT business card exchanges. They are much more. Good sessions bring the local community together. Yes, you might exchange business cards, but only after you spend 15 or so minutes getting to know the person in front of you.
Wednesday, December 3, 2014
Internet futures
Free daily tips, information, advice, and ideas
with examples from small businesses.
So, how does a small business exploit the possibilities offered by the Internet? Well, it depends.
It depends on what you are doing. It depends on where you plan to take your business in the future. It depends....
You can do exactly what you are doing, put up a website, and revise it from time to time. That's one way.
You can use social media to spread the word, drive people to your website, grow and expand. That's another way.
There is a third way which combines all of this. Jump onto the Internet and change your business into more than you dreamed it could be.
Example: Martha loved to bake brownies. She experimented with different recipes, she baked for friends and relatives, she gave them away to church functions, she even landed a couple of customers--corporate meeting planners. One of the meeting planners suggested that Martha develop a website that they could place orders through. Martha jumped onto the Internet with her own website, and she put up a Facebook page with pictures of brownies. Suddenly her business exploded. Today, Martha oversees the baking of her brownies in a commercial kitchen and ships her brownies all over the country.
Example: Justin worked in the accounting department of a major corporation. When he suddenly inherited his aunt's consignment shop, he decided to make a major move. His aunt had a good eye for design and a good ear for the marketplace--the stock in her shop was in good condition and appealed to a high end collectibles market. Justin quit his corporate job and turned the consignment shop into an "eBay" type store. He sold items from the store as well as on eBay and other sites. Justin used Facebook to drive interest. Turnover was quicker and the store attracted a lot of attention not otherwise possible.
The Internet holds futures not yet dreamed of by the small businesses of today. Put on your thinking cap and hop in. The water's fine.
Other examples of small businesses being transformed by the Internet are scattered throughout these write-ups. Eventually, your small business will be caught up in the transformation--whether you ride the wave or just let it wash over you.
with examples from small businesses.
So, how does a small business exploit the possibilities offered by the Internet? Well, it depends.
It depends on what you are doing. It depends on where you plan to take your business in the future. It depends....
You can do exactly what you are doing, put up a website, and revise it from time to time. That's one way.
You can use social media to spread the word, drive people to your website, grow and expand. That's another way.
There is a third way which combines all of this. Jump onto the Internet and change your business into more than you dreamed it could be.
Example: Martha loved to bake brownies. She experimented with different recipes, she baked for friends and relatives, she gave them away to church functions, she even landed a couple of customers--corporate meeting planners. One of the meeting planners suggested that Martha develop a website that they could place orders through. Martha jumped onto the Internet with her own website, and she put up a Facebook page with pictures of brownies. Suddenly her business exploded. Today, Martha oversees the baking of her brownies in a commercial kitchen and ships her brownies all over the country.
Example: Justin worked in the accounting department of a major corporation. When he suddenly inherited his aunt's consignment shop, he decided to make a major move. His aunt had a good eye for design and a good ear for the marketplace--the stock in her shop was in good condition and appealed to a high end collectibles market. Justin quit his corporate job and turned the consignment shop into an "eBay" type store. He sold items from the store as well as on eBay and other sites. Justin used Facebook to drive interest. Turnover was quicker and the store attracted a lot of attention not otherwise possible.
The Internet holds futures not yet dreamed of by the small businesses of today. Put on your thinking cap and hop in. The water's fine.
Other examples of small businesses being transformed by the Internet are scattered throughout these write-ups. Eventually, your small business will be caught up in the transformation--whether you ride the wave or just let it wash over you.
Subscribe to:
Posts (Atom)