Inside Small Business | Small Business & Home Business Marketing
Archive for 2008
Avoiding Small Business Pitfalls
So you have decided to follow your dream of starting your own business. Though there is no sure-fire way to make your business successful, there are certainly many tips on how to ensure you avoid the small business pitfalls when growing your business. Here are fourteen points provided by the entrepreneurial founders of YoungEntrepreneur.com that are important to understand prior to embarking on your entrepreneurial journey.
Pitfall #1: Not listening to those who know the ropes.
It is important to believe in yourself when starting your business, but don’t become too self-assured. One of the most humbling realizations is that you do not have all the answers! Seek out professionals such as lawyers or CPAs that can help you deal with some of the technical aspects of your business. It is also wise to seek out individuals directly involved in your industry who can provide insights into the operation of your business and the demographics of your clientele.
Pitfall #2: Lacking a business plan.
You’ve likely been told not to move forward until you have a business plan in place. This is great advice, but don’t attempt to create one by flying by the seat of your pants. Rather, carefully craft your business plan so it will be a critical component in your entrepreneurial success. Your business will be all the better for it.
Pitfall #3: Situating your business in a bad spot.
All business owners should find a location that is both easily accessible and highly visible to potential clientele. When picking out your site, keep in mind the changing needs of you and your customers, the possible addition of competitors to your area, and the image the surrounding businesses project. Also consider the duration of each lease you are asked to begin or renew.
Pitfall #4: Not knowing who your customers are.
Before you begin advertising, consider the audience that you’re trying to reach. Understand who they are and what about your product or service will interest them. From there, create a marketing angle that will cater directly to your target audience. Starting this early on and continuously adjusting your marketing plan based on what you learn in the marketplace is ideal.
Pitfall #5: Not maintaining your brand while marketing.
When establishing yourself in the public’s eye, be sure to maintain the same marketing image throughout every form of advertising. Marketing solely on TV, in print, or on the Internet will limit your potential audience. Show your “face” by combining several forms of media to reach a broader spectrum of clientele. And time new marketing campaigns with the release of new products and services, discounts, seasonal sales and upcoming events that will help you to generate business.
Pitfall #6: Confusing marketing campaigns.
Remember the phrase “keep it simple”? This idea applies to marketing. The catchiest slogan or most imaginative ad is futile if no one gets it. And remember: if it sounds too good to be true, it probably is. Don’t oversell your product or make promises you can’t keep; the public is more informed today than they’ve ever been.
Pitfall #7: Not knowing who to market to.
People go into business because they believe they have something unique to offer to the world. Do not assume that everyone will share your level of passion about your product or service! By knowing and understanding your target audience you can gear your advertising toward them. Attempting to win absolutely everyone over to your product or service is not a reasonable goal. Any new marketing technique should be tested first—perhaps by utilizing a focus group—and then adjusted according to the feedback you receive.
Pitfall #8: Forgetting your established client base.
Did you know that 80 percent of customers are repeat business? Don’t make the mistake of focusing solely on new prospects and neglecting your existing clientele. They are the reason you’ve made it this far! Occasionally rewarding them for their loyalty to your business with perks new customers don’t receive is a nice way to say thank you.
Pitfall #9: Ineffective marketing feedback.
It’s difficult to know whether your marketing strategies are working if you’re not doing the proper follow-up. Often failure to follow up leads to businesses changing strategies unnecessarily, thinking a change will result in a better turnout. However, the tried-and-true formula typically works best and you shouldn’t give up on it! Establishing your brand means building a reputation that your target audience will begin to expect and rely on.
Pitfall #10: Not keeping a close eye on finances.
The waiting period between the onset of a business and the influx of revenue doesn’t escape any new business. It’s imperative that during this time you make sure you have a financial cushion for personal expenses as well as enough funds for the start-up costs. Avoid just charging the credit cards, as doing so will only incur interest on top of your expenses, as well as bad debt if you don’t have the money to settle the account. Making rash spending decisions (like throwing your entire budget to that amazing Super Bowl ad) will hurt more than help if you have no money left for daily costs of operation or emergencies.
Pitfall #11: Not addressing outstanding customer balances.
Knowing how to aggressively and successfully collect on delinquent accounts without damaging customer relationships is absolutely essential. If you’re too afraid to talk money or to risk offending a non-payer, your business will fail. If you haven’t received payment at least 30 days from issuing the invoice, issue another. It’s always possible they didn’t get the first, or simply filed it away and forgot the debt entirely. Remember: it’s not personal; it’s just business.
Pitfall #12: Not knowing how to say “no.”
No one can perform all the necessary daily tasks when running a business. People will constantly request things of you, and you will simply have to learn how to say “no.” Your productivity will decline if you are stopping every five minutes to do something for someone else. There are self-assertiveness classes you can sign up for if you feel you need a little help in this area.
Pitfall #13: Doing all the work.
See which of your tasks you can delegate to others that would better suit someone else’s talents. Doling out those secretarial duties and mindless tasks will result in streamlining your day and your profitability. There’s no need to stress yourself out by attempting to do everything on your own. Hire a receptionist, accountant, or store clerk. Use your employees wisely and keep the important things only you can do on your plate.
Pitfall #14: Conducting empty meetings.
Too many businesses conduct meetings that pull everyone away from their duties to discuss unimportant issues, all in the name of productivity. Make sure your meetings have an agenda, a clearly defined outcome, occur only when necessary, and involve only those people that need to be there. Everyone will be more in tune, and your business will run more smoothly.
Do You Know What You Don’t Know?
“All I know is that I know nothing” - Socrates
When the opportunity arose to write for this small business newsletter I was elated, and nervous. I’d been running my own financial education website BTGNow.net for just under six months, providing high quality content for my readers, earning advertising revenue in return. The question facing me now, as I sat down to write this article, was what, if anything, had I learned through the experience? What pearls of wisdom had my experiences unearthed?
While brainstorming about this article, I realized I’d learned a number of things:
- I’d learned the value of time management that week where I was too busy to update because of work, a painful lesson that could have been avoided had I simply planned everything out ahead of time.
- I’d learned the value of quick, polite and timely communication, and how much people appreciate when you respond to emails and phone calls within 24 hours.
- I’d learned that one can’t count on customers to let you know if a product is defective (they just won’t use it anymore!), a lesson I learned when I saw my traffic figures plummet, all because I didn’t check whether or not a change to my site would display properly in a browser that 50% of my readers used (it didn’t).
But when everything was said and done, one simple lesson edged itself out from its competitors: the best lesson I’ve yet learned is that I Don’t Know Everything. I know what I know, but I also know what I don’t know.
And that has made all the difference, measurable in US dollars.
I chose to write about this because I believe that this is a lesson that successful business people have learned, and it’s applicable to any business and every business person. I believe that to be successful, I have to not just learn, but internalize this lesson too, and the earlier the better!
Sure, it seems obvious, perhaps even silly, after all no one can know everything. But think for a minute: how many good businesses fail because they dismiss customer complaints? How many fail because they don’t seek the help they need? How many resources are wasted when a company or business person thinks it can do all things perfectly (but then isn’t capable of doing even one thing particularly well)?
As a content provider in the financial education sector, the realization that I Don’t Know Everything impacted my business practices in a number of positive ways:
- I began to do far more detailed research, looking for better, higher quality sources to improve the quality of my articles. Consequently the quality and scope of my product increased.
- I began focusing on my strengths, which included writing and promoting the content, and interpreting my product statistics. This allowed me to provide a better product, as I began to write articles based upon what my readers were telling me they were interested in.
- I began outsourcing my weaknesses, such as having the website and logo redesign handled by outside sources. Outsourcing my weaknesses allowed me to have more time to focus on creating and promoting my product, which has lead to more traffic and a tripling of my September revenue just three weeks into October.
- I began to realize exactly what I still needed to learn! Business, as in life, is a continual process of learning: when you stop learning, you die.
I’ve learned many things since I started this entrepreneurial journey but I firmly believe that the sooner one realizes the limits of their own abilities and knowledge, then the sooner they can focus on finding people, services, and information that will fill those gaps. Once one realizes that You Don’t Know Everything, that you’re not always right, and that you may not be the best person for the job, it allows you step bank, re-evaluate your situation, focus on your strengths, and outsource your weaknesses. And if a lesson this simple can help me succeed, just an Average Jane trying to make it in the business world, then chances are it can help you too.
About the Author
Sarah Leblanc is an Undergraduate Finance student at the John Molson School of Business at Concordia University. Her website, Bridging The Gaap, can be found at BTGNow.net, and offers free financial education articles on the subject of personal finance, money management and economics.
10 Small Business Lessons Learned
After almost 20 years of “career” jobs, I finally ventured out on my own in the middle of 2006. I’d thought about such a move for many years, but did not feel ready - until late 2005, when it dawned on me that the ONLY way I was ever going to have a tailor-made opportunity to harness my strengths and run in my desires was to…well, tailor-make it myself. No-one else was going to do it for me - an employer’s agenda will always trump my ideals.
So, what are the lessons I’ve learned thus far? Here are 10:
1. Have a clear, yet flexible vision. Know what it is you are pursuing, make sure that you can articulate it to others…but be aware that the market may, as you start to promote what you’re doing, point you in some different directions. These variations on your dream may, in fact, be the most lucrative course. My initial business model - providing high-level consultative sales expertise for my provider network, while also providing fee-based consulting service for my client base - is meeting clear market needs. But I’ve already seen a couple of new, complementary avenues open up that are variations on the theme. I like to plan and anticipate and map out EVERYthing - these months have convinced me that I am not, in fact, in charge of the universe, and sometimes a new direction comes from an unexpected direction! Be ready to evolve. And when you brand yourself or your business, build in some flexibility, so that if your business changes, you don’t have to completely re-brand.
2. Act. This lesson flows from 1. above. If you have 80% of your offering/message/direction mapped out, grab it by the horns and get out there. The other 20% probably won’t show up until you’re rubbing shoulders with your target market, and starting to make noise. It is more important to show your face than to have everything in place. Once I knew I was going into business for myself, I drew up a list of everything that I figured had to be done, and just did it. Yes, I had to reprint my business cards a few months into it once my message was refined (and once I decided to add a landline and not just live off my cell #), and this past week, I’ve gone through a new round of re-branding. But by now I’ve already gotten the ball rolling. Cards are cheap. Delay is expensive.
3. Network. A lot. Believe that your professional colleagues want to see you succeed, and don’t hesitate to ask them to help. I send out a regular stream of e-mails and cards, and make lots of phone calls to those who will provide support and referrals - the most valuable business development resource of all. If you haven’t built up goodwill over the years, and don’t have a real or virtual Rolodex of cheerleaders, you’re probably sunk as far as succeeding in your own (or any) business. On the dark days - when nothing seems to be happening - I take comfort in the fact that I can rehearse the names and faces of many people who are actively wanting to see me succeed. Ultimately, when starting up, it’s Brand You. Show up and make connections!
4. Help others. Give of what you have - your time, your knowledge, your connections. When you help others with their needs, they will go to extraordinary lengths to help you. I’ve been able to help people make connections with others (including potential employers) and find needed resources with no financial return expected - but I fully expect that this commitment to help my clients and partners and other colleagues will not be in vain. For some of my partners, I’ve “given away” my business and marketing expertise to help them refine their approach - and I know that, in return, there is tremendous loyalty built up over time.
5. Take full advantage of cheap and free communications. One of my first acts was to launch a blog (using WordPress), and write articles of interest (granted, not everyone is a writer - I happen to thoroughly enjoy working with words). Then, very inexpensively, I began a weekly e-newsletter using Constant Contact (the “Friday Collection”) which goes out to my target audience with news, resources, and links - and, with continual repetition of my business identity. I invested the grand sum of $50.00 to have a “caricature” made of my face, which now appears on the newsletter and on all my e-mails. Each of these initiatives has been a tremendous success, with very little invested except some time and creativity. Free press releases, announcements in trade magazines, posts on other blogs - the methods for gaining exposure are legion, and increasingly, free. It doesn’t cost much anymore to effectively brand yourself and your business - esp. important for small companies, start-ups, and consultants.
6. Be an expert. You have to have some area of expertise for people to pay attention to your signal, over the level of background noise. Be sure that what you do, or offer, is narrow and specialized enough that you are not an also-ran. And demonstrate the trappings of expertise by writing articles, doing book and conference reviews, and interviewing thought-leaders - all tactics I’ve employed on my blogs. Read the Ries/Trout classic book on “Positioning” as you try to figure out your platform of expertise in the market.
7. Take great care in establishing your brand identity. Your logo, tagline, and message to the market are your best foot forward - unless people can quickly grasp who you are and what you do, and have something memorable to hang it all on, you’ll have trouble maintaining traction. It goes without saying - but I’ll say it anyway - that you’ll need to research available names according to URLs available on the internet, and also look into trademarks. It took me many weeks to settle on “Impactiviti” (and, later, “StickyFigure”), “clean” words, which I could essentially own. Be sure that you have a talented graphic designer help you create the logo - there are even on-line services for this now, which will help develop a logo for a fixed price.
8. Join. Be part of professional organizations, go to local meetings, volunteer your time. Be involved, and help get your clients involved. Consider professional networking platforms, such as LinkedIn. Starting a new business can be lonely - help stave off the danger of isolation-induced discouragement by getting side-by-side with others.
9. Target your best opportunities for initial business. It’s probably not the “world at large.” More likely, it is clients you already know and have worked with. While you want to get your message out to the broader marketplace, your first business is probably going to come from those with whom you have a track record. My wiring has always been to try to reach everyone - it’s a discipline for me to focus on a handful of my closest colleagues. But, of course, it is the people I’ve already cultivated over time that are most open to hear from me; both clients, and others who can provide referrals.
10. Don’t be afraid to be plain, transparent, and open. People respect authenticity. No, you cannot do everything - if someone asks you about something that is “to the side” of your sweet spot, as tempting as it might be to grasp at any business, simply admit that it’s not in your repertoire but see if you can find another resource. Ask people for help - I often have run ideas past a handful of my partners and clients, before they go “out” to the public, for input and critique - and have found great responsiveness as I allow them a transparent look into my thought processes.
11. And now, a bonus entry - be fully prepared to fail. Now, by this I don’t mean give in to pessimism, or be guilty of bad planning. It just may be that your business idea simply won’t fly - and that won’t be the end of the world. Count the cost up front, run a “worst-case scenario” exercise, and launch the business without desperation - there is a serenity that comes from having already considered the “what if” possibilities. I am quite convinced that other doors will open if this one closes, and it is easier to be patient when you’ve planned for the possibility (likelihood!) that revenue may not come as quickly as you’d like. The greater failure would be not trying - and many entrepreneurs did not hit the target the first time out.
And, finally, here’s a lively and helpful on-line video presentation by Guy Kawasaki (former evangelist for Apple, now a writer on entrepreneurship) on starting up a business. Guy’s blog is also a great resource. Recommended!
About Steve Woodruff
Steve Woodruff
Steve Woodruff launched his consulting practice (Impactiviti LLC) in 2006, working with clients to create branding that sticks.
StickyFigure, a division of Impactiviti, specializes in helping small and mid-sized businesses that are seeking to make greater impact in their marketplace, but do not have the internal resources to brand themselves effectively. We also partner with larger organizations that need to borrow a fresh creative perspective.
Steve also actively consults in the training/communications field, with a particular focus on healthcare and pharmaceuticals; and he serves as VP Communications on the Board of a local ASTD (American Society of Training and Development) chapter in NJ.
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