Jason Drohn's Scrapbook

Grad School – Reverse Cold Calling

Thursday, May 1st, 2008

Reverse Cold CallingOur business graduate school program’s final course in the area of client acquisition is on Reverse Cold Calling. It is the toughest course to master though the techniques are not difficult to teach. What is Reverse Cold Calling? Regular Cold Calling is when the business person calls others in order to ask for their business. Reverse Cold Calling is when the customer calls the business to ask for their services. It is the holy grail of business marketing, and perhaps the toughest to achieve. What makes reverse cold calling so difficult is that you can’t do it. Every technique you’ve learned up to now involves you doing it. You make the cold calls, you go out and network with people, you go out and advertise. With reverse cold calling you can’t be the one who does it. So how do you implement a technique that you can’t do? The answer, is found in the Olympic sport of curling.

If you’ve seen people on an ice rink with brooms sweeping in front of a moving disc-thing, that is curling. Basically, curling is like shuffleboard, only after one person on the team pushes off the disc, other team members can influence it’s direction and speed by using brooms to change the structure of the ice in front of the disc. (I don’t know anything else about it, so don’t ask.) By sweeping more on the right, the disc will trend over to the right because the ice is smoother and easier to glide over. Sweeping more makes the disc go faster and so on. The key is that once the disc has been released, no one can touch it, all you can do is influence its path.

In order to implement effective reverse cold calling you have to make the ice silky smooth all the way to your business. Then, those new clients will just slide right on up to you.

Referrals

So, how do we make the ice smooth for this process?

In traditional marketing, you ask current clients for referrals. This is more effective than many other strategies but it does have some potential problems. First, many clients will feel put on the spot by your question. This ends up making them blank out on people that might be good referrals. Second, people don’t like to make decisions for other people, even their friends. So, just because Bob thinks you are the greatest guy since Abe Lincoln doesn’t mean that he wants to make that determination for his good friend Frank, who may or may not think the same about you or the service you provide. The harder you push on something like this, the more it seems like you care more about your next client than you do about your current one.

The easiest referral happens when Bob is at a Barbecue with Frank and Frank says, “Man, I love your deck, who built it?” Bob will be more than happy to recommend you at this point. However, if you sit around waiting for this to happen your business will build very slowly. A slightly harder referral is for Bob to be at Frank’s house and say “You know, you could have an awesome deck out here. I know a great guy.” Even harder is for Bob to just pipe up at lunch, “Hey, Frank do you need a deck?”

In order to sweep the ice you need to give Bob all the tools he needs, plus put the idea in his mind that he can and should be telling his friends and coworkers about you.

Reverse Cold Calling Plan

The first step to making all that ice sweeping effective is to evaluate where someone will be pushing off a disc. You will eventually try to turn all of your clients into people who market for you, but you should start where you have the best odds. The best clients to start with will be those who have big networks of their own and tend to be social. You can tell by how your client is with you. Did he tell you all about his business and his hobbies the first time you met? Does he routinely tell you about his weekend or friends. Does he ever try to market to you? Jackpot! If Bob sits in a chair in your office and says something like “Your rug looks a little worn. I have a friend who…,” then you have found your man.

Now that you have the right person it’s time to give him the right tools. Forget business cards. Have you ever stashed away 5 business cards from someone else to give out to others? Even if you did, what are the odds that you had them when it actually came up? All you need is to make sure that Bob has ONE of your cards, the one he keeps. He’ll write down, or email the info to the next person. The tool Bob does need is something easy to remember you by.

Your web site is best: www.awesomedecks.com is really easy to relay to someone during a conversation and really easy to remember. No one has to write down anything.

Some key tips on your web site:

  • Always have the .com address. You can have the others too if you want, but when someone recalls a web site from memory they will almost always try .com. I can’t tell you how many people have asked me why “del.icio.us DOT COM” doesn’t work! If your web site does not have .com make sure you really emphasize that with Bob. “Bob, just remember it’s DOT NET. Tons of people screw up and go to DOT COM. So remember, DOT NET sounds more like DOT DECK.”
  • Next, make absolutely sure that your homepage is friendly to someone who has never heard of you before. Don’t make your homepage all about current clients with a button over on the side somewhere that says “Are You a New Customer” Also, skip the flash, the animations, and anything else you think is clever. Someone, somewhere, blocks that stuff, whether with NoScript, or disabled by the company IT department. Only really web savvy people will look at your site and go, “Oh, it uses something that is being blocked.” Everyone else will think it is just broken, or dumb. And if you can’t even get your web site right, how will you get their business right?

A web site is good, but it isn’t enough. Your great-aunt isn’t so web savvy, neither is that one cousin. You need another way to remember your business so they can call later. A simple name seems like it might be easy to remember but it isn’t as good as you think. Tom’s Decks is simple. The problem is that if Bob tells Frank about Tom’s Decks, and later Frank meets a guy named Bill, he might remember Bill’s Decks.

Simple is good, but distinctive is necessary too. My professional writing business is ArcticLlama, LLC. You don’t have to remember the LLC to find me, so no problem there, and llama is unusual enough to trigger a memory, so is arctic. The two together are truly odd, but not so odd that someone will think bad about it. (“Die Skate Punks”, is memorable but probably not the kind of thing that inspires confidence in your grandmother.) Llama can be a little tough becuase of the two “L”s, but it is also the kind of thing people will think that they just misspelled so they’ll keep looking. If you misspell on purpose, “Amy’s Krafts,” they might give up when they can’t find you unless you really emphasized this to your clients, “Krafts with a K.”

Now Put Out the Honey

If your business info can be passed on and remembered during a conversation that is good, but you still have to make the conversation happen. For that we turn to go old fashioned bribery. Tell your clients that you are expanding your business again. Always say “again”. This makes it sound like you aren’t always expanding your business, and also that you have done it before. Both things inspire confidence and make it a little more urgent (after all you might not be expanding your business later.) Then, tell you client that for this expansion, you are doing a special deal. You will give your current client 10% off his next order, or baseball tickets, or a free hat (or somethings else as long as it is worthwhile) for each person that calls and mentions how he heard about you. Also, and this is the key, mention that the new client will also get the discount or gift if it’s in the next couple of months.

Be vague about how long. You want to make sure that there is some urgency (“only a couple of months”) but you don’t want it to come up after a little while and it seem too late (“it was four months ago and he said a couple of months, so it would probably be ok”).

The goal is, that with a good incentive, Bob will actively look for opportunities to mention you instead of waiting for them to come up. That means he will mention your business a lot more. Even if that doesn’t translate into more customers now, it does make Bob someone that knows a good provider. So, when down the road Frank’s wife mentions how nice it would be to have a deck, Frank will remember that Bob knows a good deck business and he will ask about it. Then your phone will ring. Welcome to reverse cold calling.

01.05.2008 Features Comments

Grad School – Networking 511

Friday, April 25th, 2008

Grad School Networking - Building professional networksIn Last Semester’s Course: Cold Calling 502, you learned how to approach a total stranger, usually over the phone, and ask for their business. This semester in Networking 511, we’ll be learning how to approach a total stranger, turn them into an acquaintance, then into a friend, then maybe into someone to do business with.

If this were a business course on campus that I was teaching, I would spend the entire first week on the first point. At the end of that week, I would have a test. That test would be worth 50% of your grade, because it is so important and it is where most people fail in real life. Ready? Here it is: Networking is not a quick way to get new business.

Exam 1 (Pass/Fail only, no partial credit):

1) Is Networking a quick way to get new business?

2) If you need 3 new clients by Friday is Networking a good way to get these clients?

3) If you want to measure your Networking success using any metric is one month or less a good time frame to use?

If you answered Yes to any of the above questions, re-read the highlighted sentence above the exam. Do not keep reading until you can pass the exam with a 100% score.

Networking Spam

If you look at it the right way, you’ll find that almost every interaction between people has “spam.” Let’s take a look at networking spam. Rodney is a new sales professional. He has recently been promoted and is eager to prove himself. After reading some of the big-name, highly recommended, sales books, he decides to try networking. Rodney attends the local Chamber of Commerce event. At the event, Rodney goes up to everyone. He shakes their hand, asks them what they do, then tells them what he does. Then, he hands them a business card and gets their business card and moves on to the next person. Over the next week, Rodney calls everyone he met at the meeting and says, “Hi, we met at the Chamber of Commerce…blah, blah, blah. Is there anything I can do for you right now?” Rodney doesn’t get any new clients. Not only that, but for those people who remember Rodney, they add him to their internal spam filter and if they see him coming next week, they’ll make sure and move away. Rodney tells anyone who will listen that networking doesn’t work.

So, if networking is so great, why didn’t Rodney get any clients? Because, he never took this class, or he dropped out after failing Exam 1. Rodney is not networking. What Rodney is doing is List Building by collecting information in person. This is not networking. The phone calls he is making are cold calls based on the list he built.

Now that we understand what Networking Spam looks like we can move on to what good Networking looks like.

Networking = Making Friends

Recently, I wrote about some reservations I had about using Twitter. My biggest hangup was not completely understanding their concept of “Friends.” Let’s review. You already have friends. If you think about it you actually have several kinds of friends. You have some friends who would fly down to South America to bail you out of jail, and you would do the same for them. For some people, if you aren’t like this, then you are not “friends.” This will obviously make your Twitter list very small, and make Twitter not very fun or useful.

For our purposes you are going to have to broaden the definition. You have friends at work that you have never done anything outside of work events with. They are still friends, they just aren’t close friends. For our purposes, “friends” means anyone that you like (and who likes you) well enough that you would save them a seat at a conference that you both were attending and they would want that seat, because you would like to sit together, not because it is the socially polite thing to do. Notice in the example above, nobody will want that seat next to Rodney.

So, with the above definition in mind, networking is nothing more than making friends on purpose. If you think back, you’ll notice that most of your friends you made by accident. They went to your high school, they lived in your dorm, they worked for the same company, they were friends of Bob and Sue. In networking we are going to remove the accident factor. Instead, we’ll be intentionally making friends. This is why networking is not fast. Every once and a while you will make an instant friend, but usually it takes some time.

How to Make Friends (a.k.a. How to Network)

In order to make friends and network you have to meet people. Since we’ll be making friends on purpose, we should put some effort into making the most beneficial friends we can. This is where attending Chamber of Commerce meetings comes in. If business owners and managers are the kinds of people who would be useful friends to have then the Chamber of Commerce is a good place to start. Attending a Chamber event is easy. When you get there, think about making friends, not networking. Imagine that you are going on a trip into space and the event you are at is with the other people who will be making the trip. In other words, if you want to have any friends once you get into space, these are the people who will have to be your friends. There is no need to talk to everyone here. After all, if these people are the kinds of people you want as friends, this won’t be the only time you come to one of these events. There is no urgency, and especially no desperation. How would you feel if a total stranger showed up at your 10 year reunion and begged to be your friend? Don’t be that guy.

Mingle by going up to people who aren’t currently talking to other people. This way, you aren’t interrupting. Say something like, “Hi, I’m Brad,” and offer your hand. They’ll shake your hand and tell you there name. Then say something like, “This is my first one of these. Are they always so <whatever>…” If it’s their first one too, then you have something in common. Go from there. If not, they’ll tell you something about themselves while answering your question. Go from there. No sales, no business cards, no nothing. After a while excuse yourself by saying, “Well, I don’t want to keep you all night…” and move off to someone else. If someone happens to come up while you are talking with Brad, he’ll introduce you to that person, and now you’ve met two people with only one effort.

Remember names first, everything else second. A helpful way to remember names is to repeat it back to the person out loud. “This is Joe.” “Hi, Joe, I’m Dave.” Then, SILENTLY in your own head associate their name with their most noticable characteristic. “Big Nose, Joe.” “Pregnant, Sally.” “Three-eyed, James.” Meet as many people as you feel is natural, but set a goal of at least 7. That way you won’t be tempted to skip out after just meeting two people.

Ignore advice to write down everything you find out. Do write down names and companies but only do this after you leave the event. While you are sitting in your car is good as long as there aren’t tons of people walking by wondering what you are doing in your car creepily writing. Don’t be tempted to be the “super memory” guy. It is actually unnerving for someone you barely know to ask “How is your wife, Sally doing? And little James and Becky? James just had a birthday, didn’t he?” This doesn’t make you a good networker, it makes you that guy from the Robin Williams movie where he is the photo developer obsessed with that family.

Now, go to another event that has similar people. If you are REALLY lucky someone you met before will be there. Make a beeline for them and re-introduce yourself and make a “small world” type comment. Talk to them for a while and then meet at least 7 people. Make sure that you go back to the original meeting event (Chamber of Commerce) so that you can meet them again. Soon, they’ll start to associate you as someone they know. Then, as someone they are friends with. Now you see why this can take a while.

Network Now

One of the big networking books uses the phrase, “Dig your well before you are thirsty.” The message is that you can’t wait to start digging a well until you get thirsty and expect it to be a good thing. It takes a long time to dig a well and you’ll need to find water somewhere else before the well is done. Same thing in networking. It takes a long time to network and you’ll need to find clients somewhere else before you have a network. So whether you plan to start a business in 10 years or you started one 10 years ago, the time to start networking is now. In fact, networking is easier when you do not need it. You will naturally be less needy. After all, you don’t need anything. But, when you do need something, you’ll have these people to draw on. So, grab your local business jornal and start going to those Chamber of Commerce events. Join one of the social charities (Rotary, Elks, Kwanis). Also, become a member and volunteer at one institution in your city (Museum, Zoo, Theatre). You’ll start making friends and before you know it you’ll have a network.

Why You

The difference between a network and a six-degrees of seperation game is helping. You aren’t the only person who volunteers at the art museum. But, if you are the guy who is always helping, that makes you someone special compared to everyone else. When you talk to people listen for opportunities to help them out. Not necessarily with your business (although that would be great), but anyway you can help. If someone mentions refinancing and you know a great mortgage guy, let them know. Make sure it is helpful not pushing business to a friend. “You’re refinancing? I know a great guy. He’s in Rotary with me. He did my home equity loan. I can get you his card or email his info or something if you want.” Remember helping is offering. Selling is following up. If they don’t say yes, don’t pursue it.

The great sunny day will come when one of your new friends comes up to you and says, “Hey, you’re in insurance, right? My sister just had a baby, and they need to talk to someone about life insurance.” It won’t happen tomorrow, but it will happen. As an added bonus, you get to use your network in reverse. “Connie, you guys remodeled your kitchen last year and we are thinking about doing ours. Did you like your contractor?”

Online

I started a freelance writing business this year. Well, actually I’ve been doing it for a very long time. More accurately, I quit my “regular” job this year. As someone who has lived here for a long time, and someone who was a consultant for a lot of different companies, I actually have a bit of a local network. However, I think I could do even better online and would love to build up my business on the Internet. The answer? Networking. It works online too.

Networking online works the same as in flesh and blood. Instead of Rotary, there is Digg. Instead of Photographer Friends of the Museum, there is Flickr and so on. The process though it no different. Start going to Digg (or Furl, or Technorati, or…) and start meeting people. Read what other people posted or bookmarked. Find people who could be useful or you could be useful to and meet them. Same rules. No business, no desperatation. Instead of talking, you email. “Hey, loved that bookmark about albino flammingos doing ballet.” Hopefully this strikes up a conversation. If not, then just like in real life, move on. Talk to someone else.

Again, avoid Neworking Spam. Posting three-hundred bookmarks to your own web site and emailing everyone “just to say hi” won’t win you any friends (or get you a network). Just think, is this useful? Would I be glad if someone did it to me? From the above example, “You might want to check out my Digg page on ablino flammingos playing violins” is good; “You might want to check out my Digg page on hot naked co-ed iganuas” is not good.

In the Mean Time

So, what do you do while your network is building? Everything else. Check out the Cold Calling class, advertise, reach out to friends, offer to help non-profits for cheap, whatever. Keep going though, because you are going to have this awesome network and you don’t want to have nothing for it to do.

Practice

If you want to practice, network with me. I’m a professional writer, a Certified Financial Planner, a former Microsoft Certified Systems Engineer (MCSE), a business owner, a business and management coach and consultant, and I’m pretty sure I’ve come up with a better way to do search engines (but I need to do some research). I also have gotten addicted to Wordpress, I’m trying out Twitter, and I’m also seeing if I can figure out which of the millions of social networking sites will be useful (and fun) for me. I’m selling my house (without a realtor), I’m considering moving to the west coast except I can’t figure out how to make the cost of housing work. I’m a new-ish father, a husband, and I live in Denver.

Spot anything? Send me an email. Remember, start a conversation (I like this, what do you think about…), or offer something useful (When I moved to Portland three years ago…). Soon, we’ll be friends. Then you can say, “Hey do you know anyone in the market for puce belly-button rings forged out of yak lint?”

[For more networking tips, check out MarketingHackz "Networking - The Key Element to Building a Brand"]

25.04.2008 Features Comments

MarketingHackz.com – Build Brands. Make Money.

Thursday, April 24th, 2008

MarketingHackz - Build Brands. Make Money.Launching businesses is great – but there is often one major disconnect. The founders don’t know how to market. I can’t tell you how many times I have helped a startup through understanding the basics of branding.

The way I see it, marketing is the most crucial part of any business. It’s the one area that truly connects you with your (potential) clients. Forget business plans, hiring employees, great ideas, and everything else – if you market well, your company will be successful pretty quickly. But if your marketing is poor, the business you started will die a slow, grueling death.

Introducing MarketingHackz.com

With that being said, it is my pleasure to introduce MarketingHackz.com. The idea behind it is to give you every tip and technique for marketing successfully. This includes:

This is by no means all we will be doing at MarketingHackz, but just something to whet your appetite a bit. Believe me, we have some big things coming over there..

In the meantime – check out “10 Unusual Places To Drop Your Business Card.” And let me welcome you to MarketingHackz!

24.04.2008 Features Comments

Double Your Online Business Exposure Capabilities: Part 2

Thursday, April 24th, 2008

TWO RAINBOWS If you missed Part 1 of this series please click here to catch up…

Okay so now you hopefully have a WordPress friendly account. Depending on your hosting you method of installing WordPress will differ. Follow any directions given by the hosting company or by WordPress documentation. If you are hosting with a company that uses cPanel, you will be able to install via Fantastico. Again, simply follow any how-to instructions provided by your hoster.

When you install your WordPress blog, ensure that you install it in its own directory within the root directory. This mean that you need to create a folder on your main public folder, title it blog. This will help ensure that the SEO you have already done for you existing site will fall right in line with what you will do on your blog.

If you are installing just the WordPress blog system you can skip setting up a folder off the root folder. You will not need to do this. But again, unless you do not have an existing site, it is recommended that you install your blog under it.

Now you have your blog installed. Configure it how you like, add whatever advertising you choose or none at all, and prepare some posts. If you need assistance with configuration, customization (including themes), or manipulation of code you can hire a freelance coder at www.RentACoder.com for relatively cheap and they can help you with this process.

Time for Plugins

Installing plugins is simple. All you have to do is upload their folders to the plugins folder in the wp-content folder on the server. From there you go to the plugins tab in the admin center and activate each one, remembering to take any necessary steps to configure each plugin after activating.

Here is a list of plugins that are essential to any blog. All of these and any others you may want can be found at: http://wordpress.org/extend/plugins/

Aksimet: This plugin aids in blocking spam comments. It should come installed already but you will need a WP Key to activate it. There is instructions on obtaining this key in the admin center.

MaxBlogPress Ping Optimizer: WP’s ping features have a few (what I would call) glitches. It will ping your list every time you edit as well as publish. This can result in spam pinging and get you blacklisted quickly. Ping Optimizer eliminates this by only pinging when publishing, not editing already published material. Get your ping list here: I know it’s old but it is still a great ping list.

All in One SEO: This allows for SEO on each and every post. You get full control of keywords, descriptions and more.

Google XML SiteMaps: Automatically creates a Google sitemap for your site. They are sitemaps.org compatible which is necessary for most search engines to pick it up.

Those are just some basic ones. There are many and more you can have depending on your theme you chose, you’re advertising choices, JV’s you may have, and so on and so forth. The point is now are now set up with an avenue to market your already existing product or you have a site that you have wanted for some time.

Next time we will talk about dedication to the blog, getting the word out there, and getting exposure. We will also cover implementing affiliate advertising options if your blog is your main site.

24.04.2008 Internet Marketing, business building 101 Comments

10 Critical Reminders for a Successful Business Start-Up

Thursday, April 17th, 2008

10 Critical Reminders for a Successful Business Start-UpBusiness. The first thing that comes in mind when we say the word business is – revenue. Revenue is what drives a business towards success and achieving the goals that it desires. But, before a business can start earning, there are expenses. Start-up expense to be exact. Operating cost, Legal cost and all other costs associated with starting a business can be overwhelming when first setting your foot on starting one. However, this post is not regarding expense at all. So why am I talking about revenue and expense? If the article isn’t directed towards revenue and how to cut costs why is it even targeting these factors? Because we are going to analyze 10 things that is critical to starting a business which will help you in maximizing revenue and cutting expenses as you venture into the wild world of business.

Starting a business without a doubt is scary. Some plan ahead of time and some just jump into the scene. But if you want to succeed and start a business that will hit home run in the long run, careful planning is a must. So if you are planning on starting a business here are 10 reminders that will help you prepare yourself and your business from the worst, while giving you an idea of what it might be like down the road. None of these reminders are in any order. As far as I am concerned, each of them have their own importance and play a critical role in starting a business and planning. Let’s move on with the reminders, shall we?

1) Disaster Plan

Remember Hurricane Katrina? Of course you do. It’s not easy to forget such a catastrophic moment in history and we should certainly not forget the businesses that still exist in New Orleans after Katrina’s wrath was over. Why did some business survive and were able to get back up while others just went floating with the water to become non existent? The answer is simple. They had a disaster plan in their arsenal waiting to be unleashed.

We hear the saying quite often ” If you think worse, worse will happen, ” I disagree with this statement. We shouldn’t think of the worse in a way to make us retreat from what we have in hand, but to give us a backup plan in case of emergency. Why do we have generators that supply power during electricity outage? Just so that there is a backup just in case. A disaster plan while starting a business serves the similar purpose. It is the answer to “what if? ” and ” just in case.” No body knows what future holds and having a disaster plan will for sure help you get out of the rut when there is one.

2) Target Market

Who are you going to sell your product and services? Is it for children under certain age, teens, young adults or seniors? I used to own a residential cleaning business couple years ago. My main target market were working family who barely have time to clean their houses due to their busy routine. I promoted my business to this segment of demographics as much as I could and it’s no surprise that the business went BOOM! It was a huge success. What if I had targeted college students? Would it be as big of a success? To be honest, I did promote my services in colleges and universities but the response was very low and the costs way outweighed the profit. Working families were certainly the bread and butter for a business like this, not the college kids who either didn’t care about keeping their apartment clean or didn’t have the money to afford such services and chose to do it themselves.

Selecting a target market might seem like quite a feat to achieve. It’s not. If you were to start a candy business who would your target market be? You are right – Children. While starting a business, keep this in mind. Analyze the main target and then break them into groups and determine which will bring in the most in terms of revenue and repeat business. In my case, it certainly was the working family.

3) Marketing Strategy

” We are going to launch our business tomorrow and it’s going to take off like a soaring eagle. We don’t know how because we are not going to market or promote since we don’t have a marketing plan.” What do you think of a business that starts up with this mentality? Exactly! It will just sit there waiting to be recognized by potential customers who don’t even know the business exists. Without marketing strategy or a plan to implicate, a business is nothing but a penny in your pocket. You know it’s there but you don’t know how to make use of it.

Without a carefully planned out marketing strategy to promote your products and services, your business is most likely to fail. Marketing is the key to a successful business and it all starts in the start-up phase which determines the effectiveness by taking various things into consideration. Who do you want to target as your main market? How are you going to promote your products and services? Would online marketing be more effective for your business? These are some of the questions that you should try and answer while creating a marketing strategy. Of course, there are a lot more questions you need to ask yourself and analyze as this is one of the most important aspect of business. Without a healthy and effective marketing strategy your business will sink before it can even sail.

4) Start-Up Costs

I would like to quick share my story on how I cut back on start up cost when I started my residential cleaning business.

While I was planning to launch my residential cleaning business, one thing I wanted to avoid was taking out a business loan. As you can imagine a cleaning business doesn’t really require much. A broom, vacuum, couple mops and that’s it, right? Wrong! I was in for a surprise when I started analyzing everything that I might require to shine a potential clients house. There were a lot of costs associated with it. To cut back my start up cost and eliminate taking out a loan, I bought only couple things that was absolutely needed. Some of the things most people don’t have in their homes are carpet shampooer, stair vacuum cleaner and such. I bought these machines and rest I planned on using the customer’s cleaning equipments. While marketing my services I let everyone know that we would be using their cleaning supplies.

Because of this I was able to save a lot of money and put it back in the business. Within a year I was able to rent a space in a location that was very accessible and ” the go to part of the town “, so to speak. This gave my business a lot of exposure.

As you can see, if your business doesn’t require as much in start up, try and avoid the urge to go all out. You want your business to stand out from others while starting but try and provide quality instead of quantity. Keeping your start up cost low will help you grow your business tremendously and if you can cut back on that business loan, imagine the possibilities. Not all business can start out without a loan but careful planning can certainly eliminate the need to cash out more that you actually need.

5) Expense Estimation for One Year

This is similar to income estimation, the only thing is you will be analyzing different factors while estimating. Expense estimation is as important as income itself because without any expenses you won’t be able to earn income. It’s a fact. You start a business, you provide products and services and you promote/market your business. The key to any successful business is to cut cost while maximizing revenue. This is where this step becomes critical. When you analyze your income, the major part of it will directly depend on your expenses. What is your operating cost? How many employees will you need to hire and what will be their pay? Machineries, man power, stationery, transportation, etc. are all your expenses that you put in your business to earn revenue. Without these expenses your business won’t exist.

Estimating expenses for one year will give you a rough idea on what you need and how much you need to spend in order to keep the business running. Among all this information is something that the loan officer will require to give you a business loan if you are planning to take one out. I think one year of expense estimation is a good enough indication to see and realize how and where you are going to have to invest to run your business successfully and earn that money you deserve.

6) Income Estimation for One Year

Most businesses completely ignore this part while starting a new business. Of course you want to earn millions but a more realistic approach is needed to see where you and your business will be in one year. This part requires detailed study from every aspect of starting a business. Analyzing your expenses, your marketing plan and everything else is critical to estimate your one year income.

I personally think it is critical to estimate one year income so that you have an idea of where you will be. Besides if you are looking for a business loan, you will most probably need to provide this information as well. While estimating this, try and not to go overboard. Be realistic. Like I had written earlier, you might want to make millions within one year but most of the businesses don’t achieve such a goal. Try and analyze different factors such as the demand of product/service in the market, competitors price Vs. your price and some other factors. You should be able to easily estimate a ballpark figure for one year income.

7) Legal Bindings

Before you start out a business be sure to check in on the Legal aspect of starting one. Many “want to be” business owners are overwhelmed with the amount of legalities that needs to be followed, but it’s not really that scary if you take one step at a time. As you know, the first thing with starting a business is choosing a name and registering your business. You need to do your due research before you file a name to see if that name hasn’t already been taken. I had a hard time coming up with a name that wasn’t already registered when starting my cleaning business.

The other thing you need to keep in mind is to not violate any copyright, trademarks and patents. There is quite a bit of things that needs to be done and researched when it comes to starting a business in a proper Legal manner. Legal structure is one of the most important part since it sets the basis for your business type. When you file your business you need to know how you would like to set up your business – Sole Proprietorship, Partnership, Limited Liability Company or Corporation.

There are hundreds and thousands of resources that will help you gather all the information that you might need to legally enter the business world. Some sites even help you prepare all the documents and file them legally for a small fee. Although there is a fee I find these services extremely helpful as they cut out some chaos and hassle of dealing with all the Legal issues. If you search ” Legal documents to start a business “, you should have plenty of results to go through and choose the one that best suits your need.

8 ) 5 Year Goal

Whether you are planning on starting a business with 100 employees or all by yourself, a focused goal is something that is of great importance when setting up a new business. Where do you want to be? What do you want to do when you reach the first goal? These are some of the things that needs to answered while preparing your 5 year goal list. Most new entrepreneurs and business owners start out with one goal – more business! This goal alone won’t drive your business to success as running it successfully isn’t just about getting more business but handling different aspect that comes along with starting a business. Trust me there is a lot more to running a business than just, well, getting more business.

While setting your 5 year goal have a clear picture of what you can and what you can’t attain. Set realistic goals. Be specific in what you want. Analyze different aspect of your business, look at your income and expense estimation and other factors. Here is a quick list that might help you set your 5 year goal,

  • Be as specific as you can with your goals. If you have a focused goal it is much more easier to reach that goal.
  • Have goals that are measurable. What would you like your business income to be within 5 years and how much are you going to cut out in terms of expenses?
  • Set goals that are realistic. Don’t fly too high.
  • Are your goals relevant? As a business owner you need to be able to foresee the future to some extent. Goals that might not be an option today may be something that you might be able to achieve 2 years from now. Develop an eye and thought for future.
  • Create a time frame? When do you want to achieve a particular goal? Although it’s a 5 year goal planning, to reach to the end goal at 5 years there will be number of goals that you need to knock out before reaching the 5 year end goal.

This doesn’t mean that you should only have a 5 year goal. The main purpose of this is to give you an idea where your business might be within 5 years. And again, it helps if you are trying to get a loan by showing how well you have thought and planned your business for the future.

9) Online Presence

I can’t stress the importance of online presence in today’s fast paced world. No matter what, no matter what your business is about it’s a must to have an online presence. There are days when I am trying to find a plumbers number to fix my leaky bathroom faucet and the first thing I do is go online and see what plumbing businesses are out where I live. If you want to start a business, an online identity, a presence on the web is a must, a must.

Having an online presence doesn’t mean that you have to spend thousands of dollars on a nice looking website. If your business is solely based upon doing business from the web, then of course you need to have a site that will attract your potential customers. But if you have a cleaning business, a plumbing business or a service that mostly caters the ” offline world ” then a quick website with contact information and rates would be just fine. I am not even going to stress the importance of web and online presence because if you are reading this article you already know what it can do for your business. Without an online presence your business won’t be the same.

10) Study your Competitor

I usually save the best for the last and studying your competitors and shaping your business is the best part of starting a business. It’s fun and challenging. One of the best way to learn is from others mistakes and this is why you need to study competitors. Trust me, you will have a time of your life. Here is one of the things I did when I started out my cleaning business,

I called every cleaning services in town and some outside where I live as well to know what the difference was. I called them as someone looking to buy their service. While doing this I found out a couple of things in terms of setting up a rate. Some of the things were square footage, number of rooms, number of children ( if you have children you know why they ask for this information ), etc. Based on that they gave me a quote which I thought was ridiculous.

I made calls to many residential cleaning services to see what the price difference was and how they operated. I was still not satisfied with the rates and thought this was outrageous. So I sat down and started figuring things out. Then I realized that there price was quite justifiable since they have all the equipments that is needed to clean the house.Now here is what I did to cut my cost and lower my rates substantially to become the best affordable cleaning service around my area. Most people already have vacuum cleaners, brooms, mops and other cleaning supplies. I just purchased equipments and supplies that most household don’t already have. This way the customers didn’t have to pay more for my service as I was charging only for my service not for the equipments. And believe me, most people would rather have you use their cleaning supplies then ours because they know it hasn’t been anywhere else. It was a hit and there we went to become the most affordable service in town.

It grew so fast that within 2 years and 20 employees later I had to sell it so I could have money for school. I went to school for 5 years with no loan and no credit card, thanks to my cleaning service.

The above paragraph just goes to show how much you can learn from your competitors by just watching them do what they do. Analyze their approach, how they carry business, what they charge for their products and services and shape your products and business to give THEIR customers much more. I will tell you one thing from experience, there is no better feeling when you convert someone else’s regular customer to become loyal to you. It’s amazing! This is a ” must do ” step when you are planning on starting your business just like all other reminders. I could talk about competitors all day but will save some of it for some other day.

Well, there it is – 10 critical reminders for a successful business start-up. Why didn’t I talk about the Business Plan among all these reminders? Because if you have all these reminders set up in a systematic manner you should have a pretty good business plan in hand :-) .

To your success,

Ritu

Related articles

17.04.2008 Features Comments

Previous Entries