bizthreads.net: Business Information for Entrepreneurs by an Entrepreneur

While starting a Home Business is the goal of thousands of people the world over, running one successfully is the achievement of just a few.  There are many reasons why businesses, despite their apparent potential for success, fail.  Chief among these is lack of a viable business plan.  
 
 
Advantages of a Well Prepared Business Plan:
 

• It will help you address all the aspects of your business and ensure that you are capable of handling them
  
• A well drawn up business plan is the basis for requesting financing
  
• It will provide focus to your actions
  
• It will serve as the basis for future expansion
  

Elements of a Home Business Plan:
 
A home business, by its very definition, is a small-scale business that can be run from home.  It does not require considerable investment in infrastructure. A home business is run primarily on the inherent skills of the business owner.
 

• Define the nature and scope: This should include the nature and scope of the business.

• Product/Service Definition: Details of the product to be produced or service to be provided.  Your product should also have a USP (unique selling point) to help it stand out from the competition.

• Demand Assessment: The success of your business depends on the demand for your product or service.

• Licenses and Permits: List all the required licenses, permits, trademarks and patents to be registered. 

• Financing: Home businesses are largely self-financed or financed by small loans.  You need to estimate the financial requirements to set up the business and meet initial demand as well as meet projected demand for the short term.

• Break-Even Period: Profit is the guiding principle of every business.  You need to calculate how long it will take to recover his costs and when you can start earning a profit.

• Customer Definition: You need to identify your customer.  Ideally, home business should be located in the vicinity of their natural customers so that sales and distribution costs are minimal. 

‘Look Before You Leap' is an adage that has stood the test of time.  A well drafted business plan for a home business will help you make sure that you are able to set up and run your business effectively, protecting you against wasted time, effort and money.

Of all the small business opportunities available, perhaps the one that is most attractive is franchising.  After all, you'll be representing a company that already enjoys the advantages of brand name recognition and customer loyalty. 

But even though owning a franchise may look attractive, you have to be sure that the economics of doing so are in your favor.  That's why I compiled this compact guide to franchises.

Franchises are a large part of the burgeoning retail market.  According to industry statistics, a new franchise opens somewhere in the United States every 17 minutes!

The advantages of franchisee selling are:

• Increased geographical spread of sales
• Reduced risk of failure, especially loss in sales caused by competition
• Reduced cost of distribution and distribution management

The disadvantages of franchisee selling are:

• Loss of control through decentralized selling
• Binding contract
• The franchise's problems are your problems

The cost of buying a franchise can vary from a few thousand dollars to a few hundred thousand dollars, with the franchise fee being directly proportional to projected revenue, which is calculated on past revenue and projected future demand. Therefore, a franchise that is projected to earn you $100,000 in the first year would be far more expensive than a franchisee that is projected to earn you $10,000 in the same period of time.

The kind of franchise you can buy depends on the amount of capital you can invest.  Your income earning capability, based on projected demand, will define your choice of franchise.

Buying a franchise can be an exciting and profitable business opportunity as the risks are comparatively limited.  However, before investing in a franchise, you need to study the market and the competition to ensure that you will be able to earn enough income to earn a profit over and above the franchise fee, infrastructure costs and operating expenses.

Whether you have a home-based Internet business or whether your business staffs hundreds of employees downtown, you need an Internet presence in order to succeed.   Not only will you have to come up with a really good name for your business, but you will have to come up with a good domain name, too. There are a couple of things to avoid when naming your Internet business before you start setting up your site.

Things To Keep In Mind When Naming Your Business

• The most common mistake made by new business owners is that they ask too many people for recommendations. Most owners tend to look to their close friends and family for suggestions regarding names for their businesses. The problem lies in the fact that not everyone will completely understand the idea of the business and what it involves.
• It is always better to choose a name for your business by getting the advice of all the people who form an integral part of your business. By having a brainstorming session with these people, you are more likely to choose a good name.
• Most established Internet businesses all have one thing in common — snappy, zingy and lively names that set them apart from other online businesses. For instance, Yahoo, Google, and Monster are great examples that hint at the strength, high volume, durability and vast reach of each of these businesses. All these businesses started out as home-based Internet ventures by unknown entrepreneurs.

It is very important to find the perfect name for your business.  Make sure you choose a name that is good for your business and helps send web traffic to your site. When choosing a domain name, pick one where .com can be used — it is the most common, and people are more likely to remember it.

How many times have you tried to convey a certain ‘tough message' to a person reporting to you and botched up the whole thing? How many times have you tried to communicate with your project manager or a supplier, but ended up sounding nervous and unconfident?

Communicating with confidence is extremely important in the business world, and depending on the situation, each and every one of us would like to confidently communicate messages to someone else. However, this isn't always very easy - not so much of what needs to be communicated, but how to go about communicating that message effectively.

Getting Your Message Across Confidently

• First, keep in mind that being impatient and raising your voice is not going to help. If what you're looking for is a better end result the next time around, then you must let the person know how he or she can do a better job the next time.
• Once you know what the message is that you want to deliver, then the timing of delivering this message also becomes important. Feedback on work that has not been performed well must be delivered as soon as possible. If you don't, the person will keep performing in the same way. And it definitely won't give the person an opportunity to improve their performance.
• Using the desired outcome as a guide, you have to try to guide the person along.
• Always remember to be specific and focused. When handling an issue concerning a customer, you must first get a clear understanding of what the problem is.  Only then can you attempt to solve it.
• To communicate a message with confidence, always separate the situation from the concerned person. The required action and the desired end result are what you should focus on.

Yes, it may seem like a difficult task at first. But don't let this deter you. The next time you are required to communicate a ‘tough message', simple follow these steps and observe the positive results that you begin to get.

As small business owners, we should all be focused on our customers.  However, not all of us are sure quite what to call this ‘focus' on the customer.  CRM, or Customer Relationship Management, is the art of keeping your existing customers happy and using existing satisfied customers to attract new customers.

Small businesses tend to target a natural customer base that is located in close proximity to the business itself so that sales & distribution is quick, easy and relatively inexpensive.  Small businesses (like mine!) don't usually have huge advertising budgets or access to the latest management strategies.  In order to run your small business and expand it, you need to establish a satisfied and loyal customer base.

Some simple CRM techniques for small businesses:

• Show them you care: Showing your customer's that you care and value their business and feedback yields amazing results.  Establish a line of communication with your customers and ensure that there is minimum response time to their feedback or queries.  This will make them feel special.
• Tailor your products and services to their needs: This is an extension of the above point.  It is also limited in scope, but tailoring your advertising and communication and even your product to your customers in a particular area can result in higher sales.  What works in a larger market will not necessarily work in a smaller local market.
• Focus on customer-centric services: rather than on product-centric services.  It will make customers feel more special.
• Establish a continuous and reliable line of communication: This will provide you with a more accurate demand and sales forecast.
• Quick and accurate turnaround: Quick and accurate demand-supply turnaround time enhances goodwill with your customers.

CRM facilitates profit maximization management by efficiently handling customers' needs with streamlined customer-centric services.  It benefits both the your business and your customers.

Email Communication Tips That Get Results

Ok, I admit it - Email is a communication tool that I just could not do without.  It has the advantage of being cheap, quick, easy and having wide reach.  Believe it or not, most people don't know that there is a way to use email effectively!

Don't make your communication too wordy: Internet users are being bombarded by a lot of spam and advertising mail - they often delete email the moment they know what it is.  Keep your content crisp and deliver your message clearly.  Use a relevant topic in the ‘subject' line.

Give the recipient a heads-up: If you are going to send an email to someone with information, let them know by phone first, so they can be on the lookout for it.  If it is your first time sending an email to a particular person or company, your message could wind up in their ‘junk' box because of a Spam filter.

Communication should be attractive: Pay attention to the colors, fonts and layout.  You are not paying for the size of your message as with other methods of communication.  However, your message has to stand out from the Spam that is flooding the market, so invest in making your communication attractive.

Quick response time: E-mail correspondence has a quick turn around time.  A crucial element of communication is feedback or response.  Ensure that any responses received from your e-mail communication are handled immediately and efficiently.

E-mail communication is a powerful tool that is easy to master and very fast.  Take note of the tips given above to harness this powerful tool to build your business.

Seminars are a dime-a-dozen - I promise you that every skill that you could possibly need, whether you are a student or a new entrant in the job market or a senior level manager is offered at some type of seminar.

Your seminar is only as good as the number of people who attend it and recommend it to others.  That's why marketing or publicizing your seminar is very important.  Here are 5 points you may want to bear in mind when marketing your seminar.

Content: What is it about, what do you want to teach or communicate to your audience.  It could be anything that you are knowledgeable or even passionate about — from interior decoration to selling homes.

Venue and Time: One you have got someone interested in getting what you have to offer, they want to know how to get it.

Seminar Format: Depending on the composition and size of your audience, you need to use different methods to impart your knowledge and leave them wanting more (and preferably willing to pay for it!).  Don't conduct the seminar in a heavy, ‘jargony' manner or you will have lost your audience before you know it.

Marketing Strategy: Depending on the topic of your seminar, and the composition of your expected audience, you need to choose your marketing strategy carefully. Housewives can be approached through flyers at the supermarket or at the local playschools, while college students could be approached on the Internet or at the local bar.

The Seminar Experience: The above steps should have gotten your audience into their seats. Now that you've got them, you have to impress them.  The seminar experience generally depends on the environment such as the room and seating, on the content of the seminar and on your method of passing on the content.  It should be aimed at their interest level and should be given in a way that they find easy to absorb.

Follow these strategies and you should have a big audience at your next seminar!

I admit to not being a fan of attending tradeshows.  But, tradeshows are a necessary evil in the business world, and you need to know how to get the most mileage from attending a tradeshow!
 

Profile of Trade Show Attendees: The invitees to your event will be a sub-section of the invitees to the trade show.  Therefore, be sure of the demographics of the expected trade show attendees to ensure that they include the profile of the prospective customers you hope to meet.

Meet the customer's expectations: If you are attending an event for high net worth individuals, hold a black tie post-show party and serve expensive cocktails so that your prospective customer feels pampered and special.

The Message: The advertising message in your booth should be integrated with the trade show event in order to seamlessly reinforce the message and result in easy recall for your customers.  The message should also be focused on your target audience (i.e. it should be relatable and delivered at their level).

Message Content: Your marketing message, product knowledge and USPs (unique selling points) must convince prospective customers to buy from you.  They must also leave with the feeling that the time spent at your booth was worthwhile.

Time courtesy: When you are making your pitch, make your message short and crisp, but at the same time pleasurable.  Do not expect your prospective customers to give up too much of their time. After all, they are going to visit other vendors.

To be successful at tradeshows, it is imperative to put yourself in your customers' shoes — then plan your actions accordingly!

Advertisements are screaming for your customers' attention in practically every waking moment - so much so that they are now literally turning a blind eye to ads! 

In order to grab the attention of your customers, your advertisements need to stand out.  I've compiled some tips for composing effective advertisements that will not only get attention, but compel your customers to take action: 

1. One Objective: No matter how good your product is, try to focus the ad around one chief objective that will catch the eye of your prospective customers.

2. Attractive Headline: This should grab the attention of your prospect, so that they are enticed to read the entire ad.
 
3. ‘Free': This one word is a real attention grabber and powerful marketing word.  Incorporate it into your ads - most people aren't going to turn down a freebie!

4. Benefits vs. Features: The benefits of using your product are likely to grab the interest of your prospective customers rather simply listing product features.  People want to know what the product will do for them.
 
5. USP (or Unique Selling Point) is what will make you stand out from the competition and make a customer purchase your product.

6. Specific ‘Call-to-Action': This could be in the form of ‘call this number to find out more about our attractive offer'. This line will immediately put you in touch with people who are interested in your product, customers who you can then focus on.
 
7. “Risk Free Offer” Customers are getting wary of the fine print and things that ‘seem too good to be true'.  Inform them that they are under no obligation to buy your product after using the sample or that they only need to pay after they have tried the sample.  This lets wary customers know that their risk is limited or eliminated.

8. Simple Response Mechanism: People are conscious of the value of their time these days.  A simple response mechanism, like an autoresponder, is likely to result in more responses.
 
9. Response Deadline: Open-ended offers arouse suspicion and seem unreal.  Having a response deadline or an offer good only for a specific time creates a sense of urgency on the part of the customer.

The fact is that advertising attracts customers.  Evaluate the effectiveness of your ad campaign and continuously strive to increase its effectiveness in order to get more mileage out of your advertising dollar. 

In today's world, fierce competition and rising expenses are resulting in diminishing profits for small businesses. Simply put, today, cost reduction could mean survival.  Given below are some of the main areas that you should look at to effectively reduce your business costs.
 
Raw Material Procurement — If possible, your manufacturing facility should be situated close to the source of raw materials to cut down this cost.

Raw Material Inventory Levels - Raw material inventory is simply tied up capital.  The optimum level of raw material should be stored to meet production requirements in the short term.

Logistics - Inbound and Outbound — Expenses are incurred in bringing the raw material to the production site and sending out the finished product.  The transportation should be the cheapest that can guarantee safety, require minimum handling and be reliable in terms of time schedule.

Warehouse and Stores — This is for storage of raw materials until they enter the production line, as well as for storage of the finished product until it goes into the market.

Manufacturing Process — The process should make optimum use of the 4 Ms - Material, Men, Money and Management - to produce the finished product.

Energy, Fuel & Water — This avenue of saving is often overlooked, but can result in significant savings if used efficiently.  Better machinery and manufacturing and an awareness of the need to conserve energy among the workers can result in considerable savings.

Information Management - Information is power.  Having an efficient, reliable and up-to-date information management system can help your business save lots of money.

Finance — Spending capital resources efficiently is crucial to avoid high interest payments.

Human Resources — Having a well trained, motivated workforce will increase the efficiency of your business.

Sales & marketing — These are distribution expenses that need to be incurred to develop the market and increase the demand for the product.

By reducing costs, or making sure that certain areas of your business are lean and efficient, your business profits will substantially increase.