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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Is this a Bubble or a Buble?

Every day, I check TechCrunch.  It’s sort of a must-do type of thing.  First, you have to do it to see what the latest trends are for start-ups and funding.  Secondly, if you’re involved in a tech start-up and you don’t read TechCrunch, well, you’re seen as a bit of poseur.  And it’s not one of those things where by not doing it you seem even cooler….like not owning a TV.  For some reason, if you don’t own a TV. people think you’re really smart.  But is that really that smart?  T.V. and the internet are the main sources of news and critical information.  It’s like going back thousands of years and saying “I don’t fire” and expecting people to really respect you.

Ok.  Back to my original thought.  I’m reading TechCrunch and in the last 6 months, at least once a week, there is news of a small startup getting large funding or being acquired by a larger strategic player.  For those of us old enough to remember the late 90’s (and who could forget Ace of Base), it’s getting a little scary because it’s feeling like a bubble.  Irrational exuberance.  High Valuations.  People are losing their F&^%$#*!  Minds. 

But is this latest round of investment and acquisition really a bubble?  Or is it logically investing.  I mean, where else should you put your money?  Real Estate?  Corporate Debt?  Blue-Chip Stocks (with 4% growth).  Recent technology investments are based on profitable companies or scalable services that a larger player would rather buy than build.

I guess what I’m saying is this seems more like  Buble than a Bubble.  By that I mean a pitch-perfect time for technology.  Also, I just love referencing Michael Buble.

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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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We’re So Money…Or I Mean, We So Need to Figure Out the Money Issue

Our little enterprise at KikScore is growing.  We have a long list of customers and are in process of integrating with several different channels.  That’s the good news for our business.  The bad news is that we’re just starting to charge for the service and we constantly throwing in our own cash to feed the growth.  Like it or not, we need to make a decision about funding.  And it’s looking like our choices are pretty familiar to other growing startups: Friends and Family vs. Angels vs. Venture Capital vs. Self Funding.  After talking to several capital sources and other startups, here’s my analysis of these choices:

Friends and Family:  First thing, you don’t actually be related or friendly with this investor group.  It’s a group of people you know that have money.  You may get money from this group, but it may not enough to fully fund the venture and the investors may not be completely clear on the risks of a startup investment.

Angels:  This group is certainly aware of risks of their investment and have ready access to capital.  But they are generally less willing to fully fund a venture (compared to Venture Capital), but are still in your business.  So you now have a boss, but not the free-flowing cash to stock up your office with cool gear and get a SuperBowl ad.

Venture Capital:  You get the money and the contacts.  But everyone is going after investment from the top VC outfits…and they are generally looking for a business that has a strong balance sheet, several partners and a lot of buzz.  In other words, a business that doesn’t need the money.

Self Funding:  You’re  the boss, you control your business completely.  And you’re constantly kicking in money. 

After contemplating the options, we’re sticking with option #4…unless you want to just gift us some money with no strings attached.

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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…

Related articles

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Facebook and Twitter: Parallels and What Can SmallBiz Learn From Them?

According to Cnet, Twitter is disorganized. Now I’m not entirely sure the article is true, but I figured that I could trust Cnet and since they included a link to a Fortune article it looks like it checks out. So, what’s going on with Twitter? Some claim they don’t, exactly, know what they’re doing. There’s a lot of speculation going on, such as some higher-ups spying. Cnet seems to speculate that Twitter is trying to emulate  The Social Network. That’s probably not the case. So, what’s really going on with Twitter?

So, Twitter has trouble amongst the higher ups. That’s not surprising. Many startups seem to have that happen especially during a meteoric rise. Remember Facebook? There was some serious chaos going on at Facebook a couple of years ago and Facebook was about the same age as Twitter is now.

However, the difference between Facebook and Twitter is that some argue that Twitter lacks a powerful visionary heading the company. Facebook has Zuckerberg, who, practically, built Facebook according to his vision.  Observers claim that Twitter does not have that. Facebook has apparently learned from it’s mistakes and has become a stronger company. Twitter is trying to get there, but some may be fearing that it doesn’t look like anyone wants to take charge.  In some ways, Twitter’s investors seem to have more influence over what the company does.

Twitter’s problem seems to be that there are too many men (they’re all male) in positions of power and from the outside at least not a single one of them has been willing to take charge. There are other issues that Twitter has to deal with too, such as the need to sustain growth, prove themselves as a sustainable revenue generating company etc. However, these issues are common for nearly every young company.

Is Twitter a service that is being kept afloat by a trend?  From the outside some say it looks pretty unstable and this management issue could distract it further. Like any company, Twitter needs practical and strong leadership. However, whoever takes that position will have to deal with another problem: balancing Twitter’s malleability, where it’s users decide what they want to do with it and what Twitter’s users want out of Twitter.  That will ultimately prove whether Twitter can succeed.

So, what can a small business learn from all of this?

First, that it’s important to have a clear plan and vision of where your company is going.

Second, make sure that there is someone who is clearly in charge and providing leadership as we discussed in a previous post about 10 leadership traits in a startup or small business.

Third, know that problems will happen. Almost nothing goes smoothly when running a business. Factor that in when making plans.

Lastly, in tough times work to pull teams together to focus on the future rather than start finger pointing about what happened in the past.  Here is a prior post we did on building the right team at a startup that discusses the importance of having a good team at your business.

What do you think about all of this?

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The Bad Job Correlation: How Bad Companies Encourage New Business

College is a time for learning and really bad jobs.  Some of us work at Subway, while others (me) had to participate in a parade of horrible jobs.  I worked for my father and he had a wide range of business endeavors – commercial real estate, mini-storage and estate auctions.  He also had partners that had really side businesses.  One installed cable antennas in rural North Dakota; the other built homes.

Unlike working at the pool or some awesome restaurant, I was my father’s indentured servant.  My days consisted of looking for some type of wrench or nail (I’m not very mechanical) or sitting on a steep pitched roof in Valley City, ND, with a 40 foot piece of metal, waiting to hear if the TV. inside showed any signs of life.

One extremely hot day, on some metallic roof (applying some type of glue or something), I said to myself “I cannot be an outside working guy.  I have to get an office job.”  So, I took out an outrageous amount of student debt, and got an office gig.

But all is not as it seems in corporate America.  In talking with friends and former classmates, I think 90% of people I meet don’t like their day job.  Whether it’s a manager or corporate culture (e.g. type of place where everything has to be in a CYA email), people are scratching their head for an idea.  One that gets them out of their office and into their own business.

A friend of mine recently quit his job as a general counsel for a Fortune 500 company.  His main complaint was the lack of control over his career and not a lot of exciting moments during the day.  So, what is he trying to do now? Work with some young Tech company?  Nope.  He’s scouting locations for a self-serve yogurt shop.

Another guy I know roams the sterile hallways of his corporate job, thinking of any concept that could get funding…anything from mineral rights to a new way to run match-making sites.  All of this is because he has a boss that he can’t stand.

So, in a way, America owes a lot to terrible work environments.  Otherwise, there’d be much less entrepreneurial spirit.

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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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