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. 

       

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.      

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.

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.  

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.      

Tuesday, December 2, 2014

Crowdfunding

     Free daily tips, information, advice, and ideas
     to help you better manage and plan ahead.

     Small business begins with an idea. To turn that idea into reality takes money. Sometimes, lots of money.
     Not all small businesses can attract funding. A therapist's office, for example, will not get much of a hearing at the local bank's loan window.
     Likewise, to start up an art gallery, you'll need funds of your own. You might pass your idea in front of friends and family to get the funding you need. 
     On the other hand, some ideas attract more attention. Perfect strangers might be willing to fund a new computer game or a local wellness center. 
     Small business ideas that show big time promise can always attract funding. One of the hottest funding mechanisms today is crowdfunding.

      Crowdfunding is exactly that--dollars from crowds of people unknown to you. You go on the net, tell people what you want to do, and the dollars roll in from the crowds.
      Or they don't. The successes that have used crowdfunding get lots of publicity. While the high fliers have raised millions, most raise a few thousand at most. And some get nothing. 
     
      Third party businesses have sprung up to handle the process. They work like a dating service--sort of. Your business needs funds. There are many people out there who have money. The third party provides the platform where everyone meets and agrees to whatever rules apply. 
      You must do your research. Google 'crowdfunding' and  you'll get lots of possibilities, among them, the platforms you might use.
      The biggest player in this field of dreams is Kickstarter. Others include Fundable, Indiegogo, Microventures, EquityNet, CircleUp and Selfstarter. There are many, many more--mostly small or targeting certain types of projects.
      Go to these sites and read the rules. Some have minimums that you can request, and some impose a time limit on the raising process. Others require an equity position in your company, and still others concentrate on businesses in specific industries. Some won't take non-profits, others welcome any type operation--including just betting on the individual, no business plan required. 
      Know where you're headed before you jump into this pond. Some people will send you small amounts of money for no reason at all, but most will want something in return. Are you offering an investment to the people who ante up? Will you send them one of your products? Or are you simply passing a collection plate?

      Crowdfunding can be a godsend for small business. But if you don't raise what you need in the allotted time, do you refund the dollars? Guard your reputation.
      
     

Monday, December 1, 2014

Inexpensive promotions

     Free daily tips, information, advice, and ideas
     with examples taken from real businesses. 

     Promoting your small business can be done without being expensive. Oh, yes, you can advertise in local papers and phone books, but that can add up quickly. And you can pay per click on social media, but it's not very effective on a local basis.

     Save your cash for the things that count in growing your business. Use inexpensive methods to promote your operation.

     Events. People are hungry for information. You are expert at what you do. Bring these two things together and you can promote inexpensively. Hold an open house at your place to give free demos and explain the benefits of acupuncture, massage, yoga, or whatever it is you offer. Hold informational meetings at clubs, senior centers, non-profit group meetings, and other gatherings--accountants can explain new tax laws, attorneys can advise what to do when you get a traffic ticket, chiropractors can explain the benefits of chiropractic, computer experts can advise dealing with viruses, and so on.

     Classes. Classes take the public's hunger for information to the next level. Schedule a series of classes for beginners and another series for more advanced students. Bakers can teach baking and cake decorating, potters can teach throwing pots and glazes, accountants can teach business people ways to simplify record keeping, landscapers can teach garden design and maintenance, and so on. Run the classes two or three times each year, usually in evenings or weekends when people have free time. Attendees will spread the word for you and this will bring in referrals, expanding your business.

     Social media. Much of social media is free. You don't have to buy an advertisement in order to take advantage of the power of social media. Facebook is a very good example. Many small businesses have jumped on the Facebook bandwagon to spread the word about their products and services. You'll need pictures, but you're snapping pictures all the time anyway, aren't you? Pictures posted need not be professional. A closeup of a decorated cake will certainly attract attention, as will a bouquet of flowers, a piece of jewelry, a trendy new outfit. More than Facebook awaits your use--Twitter, Instagram, Pinterest, LinkedIn, etc.

     You can use all sorts of inexpensive promotions in your small business. These don't require cash--just your time and effort. 

     Promoting your small business is a never-ending undertaking. Promoting is not something you put in place and forget. That ad you put in the phone book is not doing its job if it's not bringing in enough business to MORE than pay for itself. I've written about promotions many times and given many examples throughout these write-ups. Check the previous listings.