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Top Ten Reasons Why Small Business Fail, part three: Marketing

Marketing

A handful of business cards and a no-frills website are no longer a sufficient Small Business marketing strategy.

The word “marketing” typically brings to mind expensive media campaigns, billboards and the services of highly-paid advertising firms. Clearly many Small Businesses have neither the time nor the resources (money, personnel, expertise) to take this approach to marketing, but that doesn’t let them off the hook.

Many Small Business owners and operators either have prepared a business plan, or know that they should. But many are completely unaware of the the need to prepare a marketing plan. New clients won’t find you just because you want their business, and even existing customers and clients would benefit from an understanding of your full range of goods or services, and a constant reminder that they are available.

Small Business entrepreneurs and “solopreneurs” are quite busy, especially in today’s economy. It’s easy to consider a marketing strategy a “nice-to-have”, rather than a “need-to-have” element of doing business. But consider this: why do well-known, successful corporations spend millions of dollars each year on marketing? Even though we are already familiar with the coffee shops, fast food restaurants and supermarkets we do business with, they still expend a lot of energy reminding us of their brands, their offerings and the overall “feel” of their products and establishments.

Marketing is not advertising, although advertising is a component. Advertising is about what goods or services you offer, price and availability. According to Wikipedia, “Marketing is used to identify the customer, to satisfy the customer, and to keep the customer.” While Small Businesses may not have the budgets of large corporations, they have a greater need to focus on acquiring new customers, and retaining existing ones.

McDonald’s or Walmart can survive a considerable decrease in clientele (not that they would enjoy it). For a Small Business, losing even a few clients can spell disaster. Since they don’t enjoy the regional or national visibility of major firms, they cannot depend on product or brand recognition that brings in customers at random.

Look to as many free or low-cost resources as possible to promote your business and market your offerings. Social media, such as twitter, Facebook, LinkedIn and such are not just for kids: they can provide a range of exposure once available only via television or radio advertisements. Low-cost “real world” techniques, such as focused flyer distribution, bulletin boards and well-designed business cards are not to be overlooked.

Email marketing sites such as ConstantContact.com and  MailChimp.com are a hidden treasure: MailChimp allows you to create mailing lists of up to 2,000 addresses, and send up to 6,000 messages each month. With templates, autoresponders and video tutorials available, it’s a secret weapon I recommend as an indispensable Small Business marketing resource.

You still need a strategy, which requires more detail than can be provided in a blog post. These tips, however, can help point you in the right direction:

1. Determine the focus of your offering
2. Identify the value proposition to the customer
3. Maintain a consistent message
4. Develop a memorable catchphrase or tagline

Remember: marketing is about the impression you make in the mind of the existing or potential client or customer. Business is about relationships – marketing is the conversation.

Related articles

• Survival Tips for Solopreneurs (inc.com)
• Don’t Look Now, But Small Business Is On The Brink Of Something Big (businessinsider.com)
• Small Businesses Cautiously Optimistic About the Future (blogs.constantcontact.com)
• Allocating Resources to Help Small Business Grow (blogs.constantcontact.com)

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Top Ten Reasons Small Businesses Fail, part two: Competition

Competition

Are you the best at what you do? Among the best? Anywhere close to the best?

Wherever you rank in comparison to your competition, are your existing or potential customers or clients aware of how you compare? As importantly, how accurate an assessment do you have of where you rank amongst your competitors? Remember: our ideas are like our children – we love them because they are our own.

But as any honest parent will tell you, sometimes we must face some brutal truths about ourselves. Before you can match or exceed the competition, you have to understand who the competion is.

How many competitors do you have?  This is not an abstract question about hypothetical competitors “out there, somewhere”  in your chosen field: this is about who your potential clients might consider in addition to, or instead of, you? More importantly, it’s about who your existing customer or client might consider doing business with instead of you.

To remain competitive, you have to assess the competition: the “business school” term for this is “competitor (or competitive) analysis“. Who else is doing what you’re doing? How saturated is your market? Even if you don’t operate from a physical (brick and mortar) office location, most of your customers/clients are probably local.

Examining the competition is also helpful in determining whether your pricing is too high or low for your market, and is a good source of ideas for new goods or services to offer.

You have probably heard the phrase “there’s no loyalty in business anymore“. This is usually said in reference to employer loyalty – gone are the days that “noone gets laid off at IBM”, and such. There’s no such thing as a guaranteed steady job, regardless of trade.

There’s also no such thing as automatic customer loyalty. Just because they’ve “always done business with you” doesn’t mean that they’ll be back tomorrow, to replace the product or renew the contract.

Business, especially in today’s economy, is about relationships. Just as apathy and ignorance of other potential suitors can lose your sweetheart’s affection, inattention and unawareness of competitors can lose business. Make no assumptions, and court your clients, existing and potential, as if you were a newlywed on honeymoon.

In many ways, the stakes are even higher…

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The Intuit 2020 Small Business Report – 20 Trends for the Next Decade

According to Inuit, April was a good month for small businesses.  Small business employment grew by .3%,  which is good in this economy.  This is about 60,000 new jobs!  It wasn’t only jobs that went up, the number of hours employees and the amount they earned also increased.  Inuit is a company that helps customers manage their small businesses. These numbers are taken from it’s own data of users who use it’s online payroll method.

The numbers in April are part of an ongoing trend; for the past year and a half, employment has been increasing throughout the country.  The trend in October 2009 and has created a total of 845, 000 jobs. That’s a sign things are improving! April also had the largest number of hours worked for this year. The monthly pay also increased 0.5% from March.

Also, Inuit recently released a small business report. (the link is a PDF file) Here’s what you need to know.  It’s a very interesting prediction of the future based on the trends of today.  Here are some of their key findings in summary form:

1. The younger generations are going to make drastic changes in technology. Why? They’ll have grown up with technology all around then and will know it better than older generations.
2. Baby boomers will get older, but don’t count them out! They’ll be getting more active and entrepreneurial.
3. Women are going to drive the market. They’ll become leaders for businesses, government and so many industries.
4. Economic hard times will make people move to urban areas
5. Social Networks will fuel economies. Two words. Information flow and you are seeing it right now.
6. Customers will have much greater control of relationships with businesses.
7. Work will shift more from full time employment to a free agent economy.
8. Data will be critical for businesses to compete and keep a competitive advantage.

There’s more,  much more.  The entire report is 27 pages.  This is just a sample of how the report is, a giant list of factors that will become more important in the future and it is worth a read.

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SMB Group Interviews KikScore – Why Small Businesses Need Help Demonstrating Trust Online

I met the fantastic Laurie McCabe at the Small Business Summit in New York last month.  Laurie and her partner Sanjeev Aggarwal run the very influential market research company, the SMB Group, that focuses on studying the small and middle market business.  Laurie alone has over 20 years of experience in studying this market and conducting in-depth studies and competitive analysis.  The SMB Group is only growing in influence as a research group that knows the ins and outs of the Small Business space. In fact, Laurie and Sanjeev just last month authored the 2011 Impact of Social Business on Small and Medium Companies. Earlier this year they published the 2011 Top 10 SMB Technology Market Predictions and have a number of other studies coming out soon.

Just one of the many great items that came out of the Small Business Summit was that Laurie wanted to sit down with Mike and I to learn more about KikScore and how KikScore helps small businesses take information about their reputation and track record of reliability and trustworthiness and display that to shoppers and leads so the small business can sell more.

We want to say thanks to Laurie and Sanjeev for sitting down with us on this podcast.  Please check the KikScore interview (and the other great podcasts too) here.

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Top Ten Reasons Small Businesses Fail, part one: Procrastination

Procrastination

You’re only as good as your word. Missing deadlines, arriving late for meetings, forgetting to follow up or follow through – these are all symptoms of procrastination, and key factors of Small Business failure.

As a Small Business owner, operator or employee, you cannot afford to slide down procrastination’s slippery slope. Since word of mouth is the most effective low cost marketing strategy (and a rich source of revenue and referrals), you must be perceived as someone who:

1. Keeps their word
2. Honors their commitments
3. Values their customers’ and clients’ time

You may be familiar with the expression “if you fail to plan, you plan to fail“. Here is its procrastination-related corrolary: “If you fail to show, you show to fail“. Free yourself of the voice in your head, which is telling you some variation of the following: “I work for myself, therefore:

1. Noone is the boss of me
2. I set my own schedule
3. My time is my own
4. Why must they nag me – I’ll get it done (eventually)”

The phrase “it’s only time” is a complete falsehood: time, to a great extent, is all there is. As an independent entrepreneur, or as an employee, you either bill for time directly, or the time required to perform your task (or make your goods) is a major factor in your compensation. Time is, in many ways, your most valuable asset.

Timeliness is also an aspect of quality, which is a perception in the client’s or customer’s (or employer’s) mind, NOT an objective quality of the work performed or goods created. As a computer service professional, a hard-won lesson is that the job isn’t done until the client perceives it as done. I could have fixed it weeks ago, but if I wait for weeks to tell the client, only at that moment is it done as far as they’re concerned.

And let’s face it — the person paying for the job, not the one performing it, is the one who must be satisfied. Don’t take too long to understand that, if you want to stay in business…

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The Magic Behind the Thin Mints: What We Can Learn from the Business of Girl Scout Cookies

It’s a familiar scene: a group of elementary-aged little girls set up a card table in front of the local Giant with every intention of guilting you into buying a box (or three) of Tagalongs or Samoas.  Okay, we might as well admit to ourselves that we wanted those cookies anyways.  But what is it about those Girl Scout cookies that keep us coming back for more?  What may seem like a couple of innocent girls selling door to door is actually a hugely successful $700 million cookie empire.

Here are some simple tips for applying the strategies behind Girl Scout cookies to your own businesses:

1. Make your brand recognizable and familiar. There are hundreds of thousands of independent Girl Scout troops across the nation.  Yet, customers know exactly what to expect when they open a box of Girl Scout cookies.  The packaging, the pricing, and ultimately, the quality of all Girl Scout cookies are uniform across the nation.
2. Keep up with the times. The organization has recently unveiled the Girl Scout cookie app for the iPhone.  An organization that is so historic gets bonus points for embracing a society where customers automatically assume that “There’s an app for that.”  The Cookie Finder app makes it easy to locate places where customers can purchase Girl Scout cookies.  Which brings me to my next point….
3. It’s all about the convenience. Even though concerns for the safety of young children have slowly eradicated a door-to-door selling culture, people don’t typically have to look too hard for another box of thin mints.  Girl Scout cookies still tend to find you, whether it’s at a local grocery store, or through an order form at a Girl Scout parent’s office.
4. …Except for when it’s not convenient at all. Girl Scout cookies are not available in stores.  Nor are they available all year round.  The only place to buy them is directly from a Girl Scout (or her parent, when he or she inevitably brings that form into the office).  When customers know that they can’t just stop by the store for another box, they will inevitably start stocking up for the year.
5. Appeal to the goodwill and emotions of the public. The Girl Scouts of America is an organization that is widely recognized for its part in empowering girls across the country.  The mission statement cites goals to build girls of “courage, confidence, and character, who make the world a better place.”  People are more likely to support a business that they believe is doing good deeds.  Of course, there’s also the fact that sometimes it’s just hard to refuse that little girl.  And that might just be the Girl Scouts’ greatest advantage.

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Put the web to WORK

In a down economy, Small Businesses need to exploit every possible advantage available to them.

An often overlook and underutilized Small Business asset is the good ol’ company website. Websites are nothing new, and nearly everyone has one by now (there are by far more registered websites than human beings on the planet). Most Small Businesses easily have multiple ways to launch a website for free. How many of these websites are effective business assets?

To truly assist Your Small Business, a website must, at a minimum, do three things:

1. Burnish your brand
2. Generate leads
3. Increase revenue

Burnish your brand: in today’s economy, a website has to be more than a digital business card. Business cards are cheaper than dirt, and you hand them out like toothpicks. Not much ROI there. Your website is your first, best chance to:

1. Introduce yourself
2. Promote your business
3. Establish your qualifications
4. Create your online identity
5. Build a reputation

The old saying “you don’t get a second chance to make a first impression” is especially true of websites: the “Back” button is just a click away, and you have about five seconds to convince the site visitor not to… click away.

Generate leads: Does your website have a form for customers to contact Your Small Business? Don’t assume the site visitor will actually take the time to pick up the phone, or open their email tool and compose a message. Visiting a website is like an impulse purchase – if you site does capture their attention, you must make it as easy as possible for the potential customer or client to move to the next step, and contact you right NOW!

Increase revenue: Many of your existing clients may not have discovered you by an Internet search, but that doesn’t mean you can afford to ignore the power of the web to find new business with old customers. It’s a well know fact that it costs more in time and money to acquire a client than to retain one — what are we doing about it?

Does your website cross-promote goods or services, especially to those currently doing business with you? Do you offer special deals or discounts to favored customers? You could have special content for registered visitors to your website, and create login accounts for your existing clientele – again, don’t assume that they will take it upon themselves to sign up on their own. They are just as busy as you are, so you’ve got to make it almost effortless for them to do more business with you.

This is not the same as spamming them with unwanted messages – they already do business with you. Everyone likes to feel special, and be treated with special regard. Make sure your focus is the added value to their lives and businesses, not your desire for more of their money.

Review your records and invoices — what goods or services have they already purchased in the past? What else do they want, or need, and how can you let them know that you can provide these quickly, conveniently and affordably?

Remember that a “down” economy is always an opportunity to invent new possibilities – use Your Small Business website to create as many new opportunities as possible, and you’ll find undiscovered wealth right inside your web browser.

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Guest Post: Web Design Contracts – Protect Yourself & Your New Business

Well, how did you celebrate National Start a Business Month? Did you finally drag yourself off the couch and put those long mulled-over dreams of running your own business into motion?  Good for you! And like all businesses today, you are planning to stake a claim to your own piece of cyberspace with your business’s website, right? Of course you are. In fact, you’ve finally found the right web designer, who has offered you a great price on setting up your website, and you simply can’t wait to get started.

Hold the phone, Jack. To protect you, your brand new business venture and even your website designer, get your website design agreement in writing. Make sure it clearly states what the responsibilities are for both parties and what happens should problems arise. But you’ve never had a website before, so how are you supposed to know should be included? Here is a brief summary of ten points your agreement should cover:

1. Description of Work

This is the most important aspect of the entire project. – exactly what is the website developer going to do for you? Think about a 5-sentence summary of the scope of service, including such things as number of pages, programs, or scripts to be built, graphics to be created, content to be written. How will the website be updated? Who will host the website when the project is done?

2. How Much Will it Cost and When are Payments Due?

State the exact price payment and terms of the payment if split up into installments. Is the project quoted at a fixed rate, or is it an hourly rate, and how is this tracked? Will there be a down payment and a monthly billing cycle, or will it be a milestone-related payment system? And how will payment be made – electronically, by check – and what happens if payments are late?

3. Length of Contract and Ending the Contract

How long will this contract be enforceable and what happens if either party wants out? What are the penalties and notice that must be given before they can exit the contract? For an unfinished project, who gets to keep the work that has been done?

4. Who Owns the Website?

Who gets to keep the intellectual property to the project? Typically, in this work-for-hire situation, the client retains all intellectual property, such as the source code, all digital files, documentation, images, multimedia, programs, website design, and the like.

5. Keeping Secrets

You may want to treat all information that you provide to the developer as highly confidential that cannot be disclosed. If so, make sure the agreement is specific as to what information can and cannot be publicly disclosed. Many website developers use their portfolio of clients as sales tools for other clients – will you allow the developer to mention that they are working for the client during the course of the project to other prospects or potential clients? Specify how the developer will be credited on your site.

6. Providing a Warranty and Possible Disclaimers

Having a warranty on the developed website is standard in most website projects. Typically, website developers give a 30-90 day warranty on all work to be functional and bug free. However, if you have access to the site during development and screw something up, that may void the warranty.

7. Limit the Liability

This states that the website developer is not responsible for damages or money losses that occur outside of the consequences of his direct actions in developing the website.

8. Relation of Parties

Make sure that you and the developer understand what your relationship is. Is the relationship a development partnership? Is it strictly a work-for-hire type relationship? Is it a client and vendor relationship? If not a partnership, make sure that you specify that the developer is an independent contractor and no employment relationship is created.

9. Website Maintenance and Changes

Most developers want to post a site and be done with it, but most businesses want to have a continuing relationship with you. Include in the contract how long the developer will be available to assist with learning to maintain the new site and what types of things he will fix. Specify whether the developer will maintain the domain, set up e-mail, maintain the site, etc.

10. How to Handle Disputes

Make sure the contract defines how disputes will be handled, whether by litigation or arbitration. Arbitration avoids court costs and many legal fees and the parties can agree what law will apply, where the arbitration will take place and who will pay for it (generally the loser).

These ten points should lead to a successful web design and development contract and will give a peace of mind to both the client and website developer and will pave the way to a trusting business relationship. It’s a good idea to get your contract looked over by a lawyer to make sure you haven’t forgotten anything.

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Gregg Hand is the principal attorney at Hand Law Offices LLC, focusing on helping companies solve their business problems with suppliers, vendors, customers or competitors, offering counseling, advice, contract drafting and review, or litigation expertise. He also authors Briefs in a Bunch, a blog on legal advice for small companies.

Want to know more? Be sure to check out “The ‘Absolute Truth’ About Web Site Projects,” an informative seminar on May 14, 2011, led by Mayra Ruiz-McPherson, Principal & Founder of Ruiz McPherson Communications (@mayraruiz), and Gregg Hand, Esq., of Hand Law Offices LLC (@GreggHand). For information and registration, click here.

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Your data IS Your Business: Dynamic data

In my previous post on data protection, we discussed the three types of Small Business data:

1. Dynamic data
2. Active data
3. Archive data

There are different methods required to best protect the different types of data your Small Business depends on. Note that I said “protect“, and not “backup” you data. Backing up your data is the most important part of protecting it. But steps must be taken before and after backup to make sure the process actually provides protection, and not just repeated activity.

Before backing up your data, you must determine two things: 1) which data will you backup? and 2) how frequently will you backup that data? The answers vary depending on which of type of data we’re considering.

After backup, the most important questions are: 1) how long will you keep that backup? and 2) how many different versions of this backup do you want, and why? These questions, no doubt, are answered differently, based upon the type of data being considered.

Dynamic data, being the most important, comes first – it’s what your Small Business is working on right now. Today’s email correspondence, the document that will become an email attachment as soon as it’s completed. Even your web browser bookmarks have a greater business impact than you might realize. It’s “Dynamic”, after all: you must have the current version of whatever document, diagram, link or bookmark you depend upon for your Small Business to compete and function effectively.

The fact that is often overlooked by Small Businesses is that dynamic data not only has to be backed up, but backed up dynamically. Last night’s version of a file you’ve been working on for hours is no help if your computer’s disk dies, or you corrupt or overwrite the file. Scheduled nightly backups are fine for protecting active data, but to protect your dynamic data, you need more frequent backups.

The problem with this suggestion is that you are simply not going to perform  six, eight, ten or more backups a day… you’re too busy running your business, and the backup process is too complex and involved to justify the distraction and disruption. Fortunately, this issue has been confronted by the huge mega-corporations’ IT departments, given a name – Continuous Data Protection – and more importantly, they’ve given us a solution.

What you need is a program that will backup your dynamic data either at regularly scheduled intervals throughout the day, or as the data actually changes. Or one that does both, like IBM Tivoli CDP for files. Now, while I do prefer to recommend Open Source software when it provides the best solutions for your Small Buiness, sometimes, the best solution is a commercial product.

With IBM Tivoli CDP for files, you can:

1. back up all your dynamic data, both on a schedule and whenever it changes.
2. backup to as many as three different locations, for extra protection.
3. start protecting your data instead of spending hours learning how to setup the program.

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Ever Wonder Why Small Businesses Need Internet Merchant Accounts? – This Post is For You!

What is an internet merchant account? It’s an account that allows you to have customers enter their credit card information directly on your website.  This means that customers don’t have to call, mail or fax their orders in.  When customer’s credit cards are accepted through an internet merchant accounts, they are immediately processed. An internet merchant account is only used for online transactions. If you have a regular merchant account, you will need to get an internet merchant account if you want to do online transactions. An internet merchant account provider such as North American Bancard is a one option to look into when searching for a provider.

Why do you need an internet merchant account if you already have a merchant account? Internet merchant account rules and regulations differ from merchant accounts.  You cannot process internet orders through a merchant account; you need an internet merchant account for this.  Since the merchant almost never sees the customer’s card, there are more stringent rules and regulations to protect against fraud for internet merchant accounts. To get started with an internet merchant account, it’s best to get one from a merchant account provider such as North American Bancard.  Why should you get an internet merchant account from a merchant account provider? The providers know the rules and regulations and can help you navigate the system.

How much does it cost? An internet merchant account costs the same as a mail/telephone order account.

What if you are using electronic checks? If you want to accept electronic check orders, you will need a separate internet merchant account called an electronic check internet merchant account. You will still need a regular merchant account.

Why is it beneficial to get an internet merchant account? If you do most of your business online, it is beneficial because it is a safe and easy way of allowing your customers to pay online. Internet merchant accounts are especially beneficial for small business who do most of their transactions online. Do you sell jewelry online? Then you might want to think of getting an internet merchant account. Using an internet merchant account means that the process of paying for a product or service will be faster than phone/fax/mail orders, which means happy customers!  Also if you have an internet merchant account, your business seems more reputable because your customers will know that their transactions are safer.

If you are using or have used an internet merchant account, what is your experience with it?

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