"As long as people Eat, I’m in business"

Business PlanFarmers Are Rich

This content is provided by Enterprise Development Services

Cynthiapic1.jpg Honeysuckles Ptl Ventures

Cynthia Mosunmola Umoru is a happy entrepreneur who pitched her tent in a "non-white collar business venture" - an Agricultural Business Enterprise she christened Honeysuckles PTL.

She recently received the prestigious plaque of the Business Owner of the Year at The Future Awards 2009.

She was a Goldman Sachs Scholar - the United States and world's most powerful Investment Bank's initiative to empower 10,000 Women across the globe in collaboration with Enterprise Development Services of Pan African University, Nigeria.

A DECISIVE BEGINNING

Her educational background was a twist. She had intended to study Medicine, and actually started it at Bayero University Kano; but had to relocate back to Lagos following riots and crises in the North and never returned. She alternatively settled in for Zoology at Lagos State University.

Cynthia says she registered the company in September 2004, but she had started Honeysuckles on a small scale from her undergraduate days in the University where she was initially supplying meat products to choice fast food outlets in Lagos.

She describes Honeysuckles as an agricultural business enterprise that has identified an uncharted niche and is poised to bridge the gap in quality productions, quality packaging and an effective delivery process of agric food products to the community.

TARGET MARKET

Her target market comprises people (obviously everyone) who eat meat products from beef to chicken to turkey (all manner of birds), cat fish, snails, shrimps, prawns and so on. The value proposition to this is that delivery is made as it is desired i.e. fresh, frozen or processed.

On how they handle volume and manage several farm outlets, Cynthia says, "we actually do have a few (poultry, ponds, cribs and the likes); but basically we're much more in alliance with contract farmers where we do have terms for mutual agreements as well as benefits, to cater for our enormous demand and volume orders."

In Her Own Words:

BUSINESS OWNER OF THE YEAR (THE FUTURE AWARDS, 2009):

From Recognition to Relevance - Sharpening the Saw!

I must say that the award has further launched me out to give more to the society. I've come to understand that this business is more than my making - and I think I'll rather regard it as a calling.

Much more than focus now is relevance, now placed on a higher pedestal to add value to our product lines so that they appeal to anybody, from the governor's wife to the president's daughter and to the man next door or on the streets.

I have come to realise that the strength of our organisation lies in relationship management rather than just bluntly marketing. We'd go an extra mile to do what our customers actually want. This has therefore prompted us to consider the establishment of Chain Retail Stores where we could engage in Virtual Marketing and Physical Sales Marketing to further track the needs of our amiable customers.

THINKING OUT OF THE BOX:

The Global Economic Meltdown

Hmmn! I'd rather say I'm happy with the recession because it makes people think out of the rigid box.

While I understand that SMEs are the backbone of any economy; I'm aware that the rippling effect of the meltdown is just imminently going to affect every business venture however insignificant. From the mere fact that lending across financial institutions is now low; buying power ultimately also drops; volume sales are therefore impacted.

This has caused us to think out of the box and shift our focus from large volume buyers to individual/retail dependants. But what's ultimately important is that we ensure we're meeting needs as we're supposed to equally meeting wants!

And as long as the global economic meltdown persists, I'd rather believe that, for as long as man lives, man eats, and as long as people eat, I'm in business!

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Adapted From: SME Toolkit www.smetoolkit.org

E-Commerce

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E-Commerce Overview What is E-Commerce? Is an E-Commerce website right for your business? Setting Up a Website Registering your domain name Finding a host Setting up and maintaining your own server Hosting services Building your website Hiring a professional website developer Designing your own website Tips For Developing a Successful Site Make your site easy to use Provide useful content Encourage customer feedback Develop a mailing list Online Marketing and Promotion Advertising online Search engines Use key words - meta tags Submit your site Check your positioning regularly E-Bay SESSION 9 Business Plan SESSION 9 Quiz [Back to top] E-Commerce Overview What is E-Commerce? E-commerce is the sale of products and services over the Internet. It is the fastest growing segment of our economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost. Currently, there are more than 250 million people using the Internet internationally. Sixty-nine percent of the online population has made at least one purchase in the last 90 days. Analysts project online sales of ₦3.2 trillion by the year 2004. The Internet user average household income is ₦59,000, making this a very attractive demographic for your business to target. Is an E-Commerce Website Right For Your Business? Testimonial Brian Kerns Computer Programmer, Web Developer/Designer "A project must be able to carry talent and time at least for the cost of the time." Transcription - html Probably. Much depends on the nature of your business. If you own a small independent bookstore, is there a good chance that you can get rich selling your books online? Probably not. Amazon.com and Barnes & Noble have established their hold over this market, and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty. However, if you own a local bookstore, there are several ways to reach new customers, get them to know you better and have them keep coming back for more. You might want to offer notices of special promotions or readings by authors. Trust will become the cornerstone of building your e-business. As Warren Buffett has said, "If you don't know jewelry, know your jeweler." A website doesn't need to exist solely to sell your product online. It can serve a number of roles. It could supplement the sales of your already established retail store. If you sell a unique product, such as wheat grass or gourmet chocolates, you might find success reaching others around the country (or the world, for that matter) who do not have access to these products in their own towns. Using the Internet for conducting e-commerce will not assure you of being able to compete favorably with large established competitors. They already have the inventory, delivery and marketing systems in place and they can deliver the groceries as cheap (or more cheaply) than you can. Yet, the beauty of the Internet is that it provides a global audience of potential customers and it never closes. Your customers will have access to information about your business 24 hours a day. How many times have you wanted information about a store, looked them up in the Yellow Pages, given them a call on Sunday morning and found that they were closed? Sure, most companies have a recorded message that will say that they are closed and will give you their hours of operation. But it is much better to not only have information about your store hours available to your potential customers 24 hours a day, 7 days a week, but also about your entire product line. You can add pictures and maybe even video. And your customer will even be able to buy from you 24 hours a day. So, your website address should be promoted everywhere including your stationery, sales forms and advertisements. [Back to top] Setting Up a Website Registering Your Domain Name Each website has its own unique name, such as Amazon.com or Pets.com. This is your "Domain Name." It is a unique name that identifies you to all of the other computers on the Internet. You must register your website's name through something called the Internic so that the other computers on the Internet will know you exist. Once you've registered, people who type www.yourcompanyname.com into their browsers will be taken directly to your website. There are now a number of companies that will assist you with registering your website's name, including Network Solutions, Register.com, worldwidedomains.com, domainit.com and many others. But remember, because most of the common and obvious names have already been taken (over 20 million names have been registered), you'll want to use a utility called "Whois" to find out whether the name you have in mind has already been snapped up. Register.com has a "Whois" look-up box on their site just for this purpose. While there are other extensions beyond ".com," it is the easiest to remember. Some extensions such as ".org" are meant for non-profit institutions, and "edu" and ".gov" for education and government institutions respectively. Other less widely known extensions include ".ro," ".gs," ".cc," and ".vg." These are often international extensions. While it might be possible to register mufflershop.cc (mufflershop.com was registered in August of 1999), people will have a harder time remembering your website's address. If they just type mufflershop into their browser, they'll probably be taken to your competitor's ".com" site instead of yours. Try first to find an easy-to-remember ".com" name for your site. Once you've successfully registered your domain name, it's yours to keep. It currently costs about ₦35 per year to have your name registered, usually with a two year minimum. Keep in mind that your company name, trademarks, logos and artwork used on your site will require appropriate trademark and copyright protection under intellectual property laws. Your lawyer should be consulted on this issue in order to avoid unpleasant surprises (for example, the possibility of being advised that your company slogan belongs to someone else.) Finding a Host During an earlier My Own Business session you learned about location and leasing space for your business. Similarly, your online business will need to reside somewhere as well. Your choice will depend on a number of factors. You may choose to buy (by having your own network server) or lease (by having your site hosted by a web-hosting service). Setting Up and Maintaining Your Own Server Setting up your own server is analogous to owning your own store. You set up and maintain the computer (server) that people on the Internet connect to when they visit your site. Having your own server is almost a necessity if you will be using large databases for your inventory and customer tracking, as well as for more advanced programming features. This approach requires a significant amount of technical knowledge and expertise. Buying and setting up your own server will also be more costly in the short run. The server needs to be up and running and connected to the Internet 24 hours a day. If it goes down, your website is no longer accessible to the web surfing public. You will also want to have a high-speed connection to the Internet, which can cost several hundred nairas or more per month, to assure fast access to your site when the traffic is heaviest. You may remember when Victoria's Secret had a fashion show during the Superbowl. Tens of thousands of earnest football-loving lingerie shoppers flooded the site, bringing it to a near stand-still. More recently, weddingchannel.com promoted a tie-in with the soap opera All My Children. Viewers were encouraged to log into the site and vote for which dress one of the lead characters should wear for her wedding. The response was so great that the site crashed due to too many users trying to access the site simultaneously. The size and speed of your servers must be adequate to meet the demands of your most successful days, or your potential shoppers will be turned away. Hosting Services A simpler solution for businesses that do not want to get into the technical burdens of hosting their own site is to have the website hosted by a web hosting service. Using a web hosting service is analogous to leasing real estate for your store. For a monthly fee ranging from ₦10-₦200 per month for small to moderate sized businesses, the web host handles the technical details of server maintenance, and you are free to spend your time developing content for your website. Hosting services can also provide "user statistics," which track the number of visitors to your site. Depending on the size and complexity of your site, using a hosting service is often a more cost effective solution for most small businesses. Resources such as "thelist.com" and "Cnet.com" offers a list of hosting services you can compare and contrast. Building Your Website Your company will need to decide whether to hire a professional web developer to create your website or to produce your own site "in-house." Both choices come with costs and benefits. Hiring a professional website developer: Before hiring a web developer, it's important to do your homework. What is the purpose of your site? Is it to serve as an online brochure of your products, or do you plan to actually sell your product or services over the Internet? What is your budget? Who will be responsible for ongoing maintenance of the site? Who will provide the art and content for the site? Who will own the copyrights for these materials? Will the developer be responsible for both design and marketing of your website? Once you are able to answer these questions, begin interviewing site developers. Be sure to look at other websites they've created and ask for references from other clients with whom they've worked. Ask those references about their experience with your potential developer. Did they deliver the product in a timely manner at the quoted price? Did they listen effectively and present a product that matched the company's vision? Once you've identified your developer, get a written contract that specifies the responsibilities of that developer, the timelines for project completion and a complete budget for the total project. This should include arrangements for ongoing maintenance of the site. Contracting out your website offers several advantages. A professional developer has the technical knowledge to create a site that works with all browsers and should be fluent with the current technologies -- whether it's Flash animation, Javascript enabled tools, streaming audio and video -- and online commerce solutions. Investing in a professional developer will allow you to spend more time on creating a successful business and less time learning the new trade of being your own website developer. Designing your own website Despite the advantages of using an outside contractor, many businesses choose to create their own websites. If you or one of your employees has a strong interest in computers and website design, this can be a more affordable solution. Your web design should not incorporate unusual or unique fonts. It is better to stay with standard and widely used fonts that can easily be printed or saved to a file. Tools such as Microsoft Frontpage and Macromedia's Dreamweaver allow you to create websites without any (or much) prior knowledge of HTML. These "what you see is what you get" editors are similar to programs such as Microsoft Word in that you insert text and graphics onto your page and specify the appropriate links. The program then generates the HTML code for you. Pre-defined templates give a consistent look and feel to your entire site and built-in tools allow you to globally change navigational links throughout your site. While these programs have improved significantly in recent years, they still are not a perfect substitute for the hand-coded sites created by a professional web developer. Advanced features, such as interactive forms and e-commerce capabilities, are difficult to implement. And every hour spent trouble-shooting problems with your website is time spent away from running your business. If your business's budget does not allow you to hire a professional and you have a real desire to learn how to create your own site, spend some time with some of the many online tutorials on creating your own site. Just remember: your customers will be turned off by a site that appears amateur. Your credibility is at stake, and if your site is difficult to navigate, has broken links or images or out-of-date content, you will not engender trust with your customers. [Back to top] Tips For Developing a Successful Site Make your site easy to use. While it might be tempting to have a cutting edge website with all of the bells and whistles - don't forget the basics. You will fail if a visitor can't navigate successfully through your site. Provide clear, easy to understand navigational tools on each page of your site. Don't rely on graphical buttons for your links. Not all web surfers have graphic capable browsers, and some surfers intentionally turn their graphics off to speed download times. Provide text links. Provide Useful Content. Don't Just Sell! These days, it's not enough to have a website that lists your products and provides a shopping cart for purchases. If you want your visitors to return, you'll want to provide meaningful content. If you sell ski equipment, your site could post local ski conditions, articles about the latest ski fashion trends, resort reviews or any other information that would give visitors a reason to want to return for more. A CPA's site could publish tax tips and offer links to IRS forms. A catering service could offer articles on how to host a successful party. Encourage customer feedback via online forms and email. Ask your customers what they want. Did they find what they were looking for? How could your site be more useful or easier to use? Listen to your customers' frustrations and gripes. They'll tell you what you're doing right and what you're doing wrong. Develop a Mailing List. Most consumers hate getting junk email, also called "spam." A far more appealing strategy is to develop a mailing list. Invite your customers to "opt in" to receive a newsletter or notices of specials running at your business. Make this information relevant and useful for your customer. Provide a "coupon" that will give them a discount on their next purchase. And, always give the recipient an easy means to "opt out" of receiving future emails. [Back to top] Online Marketing and Promotion Advertising Online If you build it will they come? Not necessarily. Once you have established an online presence, your next task will be drawing traffic to your site. Remember, you are a needle in a haystack competing against millions of other websites. How will your customers find you? There are a number of strategies for getting potential buyers to visit your site. Search Engines You are probably familiar with Yahoo. It is not really a search engine. It is a directory, which is a vast collection of websites listed on the Internet. Each submitted site is viewed and approved by one of Yahoo's editors. Listing your site on Yahoo is free, but not guaranteed. Your site must meet a level of professional standards, not have broken links or images and offer something unique for Yahoo's visitors. Not all websites who request a listing on Yahoo are successful. Read their submission guidelines carefully before attempting to list your site. Yahoo is just one of many search tools on the Internet. Your site should be registered with all of the major search engines and directories. These sites include, but are not limited to: AOL Search AltaVista Ask Jeeves Direct Hit Excite FAST Search Go / Infoseek Google HotBot LookSmart Lycos MSN Search Netscape Search Northern Light Snap WebCrawler Yahoo Registering your site is usually free, although it is now possible to receive better placement on many search engines by paying a substantial fee. Unless you have a large marketing budget, this is not feasible for most new online businesses. Instead, simply go to the search engine and look for the link that says "Submit a URL" or "Submit a site." There are services available on the Internet that charge a fee to register your site with hundreds of search engines. This is generally not necessary because site registration, while time consuming, is not particularly difficult. By scouring the Internet 24 hours a day, the search engines catalogue the vast number of pages on the Web, creating indexes based on the content of your site. However, there are things you must do to make your website "search engine friendly." Before submitting your site to the search engines, you'll want to add meta tags within the tags of your html documents. Meta-tags are a list of keywords that users will be most likely to type into a search engine when searching for your product or service. Many search engines will index your site based on these keywords, as well as the content of the text within your site. A sample meta-tag for a designer clothing store might be: The meta Description tag should provide a single sentence that accurately describes your online business or service. This description is often displayed by the search engine below your URL when your site is listed in the search results. For example, a Description meta-tag for a discount designer clothing store might be: Be sure to check your search engine positioning regularly by typing in your targeted keywords into all of the search engines. Examine the statistic logs of your website to find which search engines are driving traffic to your site and which keywords are most frequently used to find your site. Targeted Email Email allows you to communicate directly to your customers. It is also one of the most abused forms of online advertising on the Internet. Nobody enjoys receiving unsolicited email touting a business or service. While it is possible to purchase huge mailing lists of email addresses that can be used for marketing your product, you are likely to turn off large numbers of potential customers by engaging in this practice. Instead, opt-in mailing lists are now the preferred method of establishing email lists of customers who are genuinely interested in your product or service. Give customers the option of signing up for the opportunity to receive periodic emailing of future promotions and information. Consider creating an online newsletter - something that does more than just tout your products. Make it informative, useful and worth reading. For example, if your online store sells tropical fish, write a short article detailing useful aquarium maintenance tips. Include relevant links to your site within the email itself, encouraging readers to find more information by clicking on the appropriate links. Consider providing time-limited online "coupons" that can be redeemed at your site. Barnes and Noble has effectively used this strategy to reward frequent buyers at their online store. Finally, remember that each email should also contain instructions for how the recipient can be removed from the email list. eBay The largest of the online auction houses, eBay can provide a means of both selling your product and driving additional traffic to your online store. Selling products on eBay is a terrific way to find customers who have a genuine interest in your product. Within the product description of each item you list for auction, be sure to provide links to your website, informing auction visitors that more products are available at your website. Banner Ads Banner ads are by far the most common form of online advertising on the Internet. These are the flashy rectangular advertisements you see at the top and sides of most commercial and many amateur websites. DoubleClick and LinkExchange are the largest distributors of online banner advertising. Banner ads provide a means of reaching thousands of potential customers with your marketing campaigns. The effectiveness of these campaigns is often measured by calculating the "click-throughs" rate. This rate is the percentage of times an ad is clicked on, based on the number of times it's viewed. If a banner ad is seen by 200 site visitors and 10 of them actually click on the ad, the banner ad has a click-though rate of 5%. The click-through rate, however, does not tell the whole story. To accurately determine the effectiveness of your ads, you'll need to know which click-through resulted in actual purchases from your site. This is now possible with the marketing tools provided by the major online marketing distributors mentioned above. By analyzing this data, you will be able to better tailor your marketing campaigns to effectively reach your best potential customers. To use your marketing nairas most effectively, be sure that your advertisements are aimed at sites catering to your targeted demographic. If you sell fine china, you will probably be disappointed with an ad campaign displayed on a youth-oriented website. Consider exchanging banner ads with other sites that complement your product or service. The online seller of aquarium equipment would find substantially higher click-through rates by advertising on websites related to tropical fish. Placing banner advertisements on your website can provide a means of generating additional revenue for your site. The sponsor will pay you for each visitor who clicks on the ad, although this is usually just pennies per click. If traffic to your site is high, these pennies can begin to add up. There are also disadvantages to placing advertisements on your site. Banner ads tend to be large and result in longer download time for your pages. Customers who would rather see the content on your site are forced to wait longer for pages to load. This increases the likelihood that they will shop elsewhere. The ads also are not usually aesthetically pleasing and can distract from the content on your site. And finally, remember that each time your visitor does click on an ad placed on your site, he will be taken away from your site. Unless you have a contract with the sponsor that states otherwise, you should set the ad to spawn a new browser window when the ad is clicked. That way, when the user closes the new browser window, he/she will be back at your site when the new window is closed. [Back to top] Business Plan for Session 9: E-Commerce We heartily recommend that you download the individual business plan template for this session Business Plan Template Document 9 and complete it now. Section 9: E-Commerce MS Word Instructions on filling in the business plan template: Section 1-12: All MS Word Each box has a permanent title in CAPITAL LETTERS Below each title is a sentence starting with an "Insert here..." sentence. This will suggest information to insert. The boxes will enlarge as you take up more room so use all the space you need. After completing each box, delete the "Insert here" sentence, which will leave only the permanent title of the box and the information you have filled in. We suggest that you fill in each section of the business plan as you proceed through the course. The template for all sessions 1-12 can also be downloaded into your computer as a single document. Include sufficient research findings and background materials. Make it interesting up by the use of background data, your biography, charts, demographics and research data. When your business plan is completed, print off and assemble the 12 sections. Many other business plan formats are available in libraries, bookstores and software. [Back to top] SESSION 9 Quiz: E-Commerce The single most important ingredient for success utilizing e-commerce is: Getting people to visit my site. Designing a website that is easy to navigate and use. Trust of my customers and assuring them that I will be honest and ethical. Creating a web address that is easy to remember and enter. Having adequate infrastructure including warehousing and delivery systems in place. The information I present on my website is automatically protected by intellectual property laws and cannot be used by others. True False It's not a good idea to disclose my website address on my business cards, stationery and advertising. True False In registering my domain name, I should keep in mind that the most easily remembered websites end in: .bus .net .com .org My website design should incorporate: Artistically designed and unusual or unique fonts. Standard and widely used fonts. Knowledge of search engine placement is important to my website because: Search engines have an impact on my credit rating. Good search engine placement will bring more customers to my site. Good search engine management will reduce the risks of viruses. E-commerce websites exist solely to sell products on-line. True False It will be possible for me to keep track of how many people are visiting my website. True False The use of the Internet for conducting e-business will assure me of competing favorably with large established competitors paying rent on a store. True False Setting up my own server is like: Renting my own store Owning my own store Creating my own website Proceed to Session 10: Buying a Business or Franchise

Copyright © 1993, 1997-2010, My Own Business, Inc. All Rights Reserved.

Online Marketing Checklists

Dig It Here!

Provided by Solutions Consultant   and BizMantra
In some ways, a company’s website functions as an extension of the outlet also functioning as an additional location. Whatever the purpose and objective, the website only becomes an effective tool depending upon the effort dedicated towards it. The content needs to be constantly updated, any inquiries need to be responded quickly and most importantly, for the website to be successful, it needs to be marketed to the customers and potential customers To help you make your website a success, the list below outlines some of the best marketing practices. Review the list and check all that apply to your operations. Work toward implementing each idea that’s relevant to your situation.

• The Company’s URL (website address) appears on the front door and/or front window.
• The Company’s URL appears on the cash register receipt.
• The Company’s URL appears on bags.
• The Company’s URL appears on bookmarks.
• The Company’s URL appears on your printed and/or electronic newsletter.
• The Company’s URL appears on gift cards and/or gift card backers.
• The Company’s URL appears on store letterhead, business cards, and in your email signature.
• The Company’s voice mail/answering machine promotes the website, telling customers you are open 24-hours a day at  www.yourwebaddress.com
• Staff meetings to review the website are periodically held.
• Each member of the staff is familiar with the website content; you have asked for their feedback.
• Customer email addresses are collected in-store and online, and you expressly ask for your customers’ permission to communicate with them.
• An email newsletter, including links to your website, is periodically distributed to your customers.
• The store and the website are cross-promoted, with in-store displays of online promotions.
• Website sales and buyer reports are routinely reviewed and analyzed.
• Website traffic reports are routinely reviewed and analyzed.

Copyright © 2010, Solutions Consultant Pvt. Ltd. All Rights Reserved.

Get Ready to Sell Online

Netlog

Adapted from content excerpted from the American Express® OPEN Small Business Network
The Internet is a great promotional vehicle, research tool, and communication channel for connecting with clients and customers. But in today's marketplace small businesses are discovering that the real payoff of an online presence is electronic commerce: using the Web to sell your small business' products and services. Selling online reduces your business expenses, provides added convenience for your customers and opens the door to a global market for your products and services.
If you want to succeed as an online merchant you have to understand where your products fit within the competitive landscape and be clear about your online sales objectives. In addition, you need to know how to reach your virtual customers and how to meet their needs. Ask yourself the following five questions to start your journey to selling online.

• Will my product or service work online?
• What role will my site play in my overall sales strategy?
• What features and information should I include on my site?
• What is the best venue for my product?
• How will I collect money from my Web sales?

Will my product or service work online?

Not every product lends itself to e-commerce. The items that tend to generate the greatest revenue are commodity consumer products (such as books, CDs, or videos), technology products (computers and software), and hard-to-find products or those with a highly specialized audience (rare coins, specialized craft supplies, regional/gourmet foods, or collectibles, for example). As a rule, if a product sells well through a catalog or other direct channels, it can be promoted on the Web.
Before you take the online plunge, be sure to analyze the competition carefully. If your product is already being sold by a large online competitor, you may have trouble generating profits through your site. Instead, focus your efforts on a specialized niche. For example, if you run a small bookstore, your online competitors would be giants Amazon.com and Barnes and Noble. If you market your site as the premier resource for children's books, or better yet, children's picture books, you may be able to generate more sales.
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What role will my site play in my overall sales strategy?

Before you begin executing your site, consider exactly what you'd like to accomplish through e-commerce. Will the Web be your primary sales vehicle or will it be a way to supplement your existing revenues? This will help you shape the content of your site and may also guide decisions about site location, product selection, payment and order processing. Take the time to put together a plan of execution that addresses not only your goals for taking your business online, but also financial assumptions, challenges and concerns. This document will help to ensure that your investment in Web commerce pays off.
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What features and information should I include on my site?

When designing your site's content, consider the type of information your buyers will require before they purchase. Take a look at e-commerce URLs that you admire and dislike. Chances are you'll find some common threads among the good sites. The graphics will most likely be clean and relevant; they will download quickly; navigation will be well thought out; and the steps for ordering will be clearly outlined. You might also want to review your competitors' sites, as well as high-revenue sites that are unrelated to your business, to get ideas for your site's content and features. Analyzing these sites' sales messages, promotions and guarantees will give you a sense of how they encourage visitors to buy.
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What is the best venue for my product?

The location of your virtual storefront is just as important as a traditional store's location. You'll need to decide if you want to set up your Web site as part of an online mall, or if you'd like your site to exist independent of other vendors. Online malls -- sites that rent out space to merchants who reside at the mall's URL - have not been nearly as successful as many had hoped. Specialty malls -- sites that offer products and services related to a particular theme such as golf or boating -- have proved better able to meet consumer demand for selection, speed, and convenience. Setting up an independent site will give you the greatest control over the operation and promotion, but also requires the most work. You will need to determine where the buyers are, design ways to reach them, and manage ordering and fulfillment.
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How will I collect money from my Web sales?

To succeed online, it's essential to make it easy for your customers to pay you. Credit and charge cards are the most common solution. This requires you to set up a merchant account, or, if you already have merchant status, receive authorization to accept charges over the Internet.
Although online payment is convenient for both merchant and customer, some of your consumers may not currently feel comfortable ordering online. For these clients, offer toll-free phone ordering, fax ordering and a mail order option.
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Copyright © 1995-2010, American Express Company. All Rights Reserved.

Give Consumers Confidence in Your Site

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Adapted from content excerpted from the American Express® OPEN Small Business Network

While online shopping is definitely on the rise, many people remain wary of e-commerce. Their fear centers on the transmittal of personal and financial information over the Internet and the perceived risk of releasing sensitive data to unscrupulous eyes. Unsolicited e-mail campaigns, rumors of hacker break-ins and media coverage of unethical Web commerce practices further intimidate would-be-customers.
Understanding and addressing customer concerns about online buying are critical to your small business' success selling on the Web. Here are some steps you can take to encourage customers to give online buying a try:

Address security issues directly

Include a statement on your Web site that informs buyers about your policies. Two elements are important to this statement: what security you have in place to protect transmitted data and what you will and will not do with buyer information. Most customers feel more comfortable buying from someone who agrees not to release their contact information or buying patterns to outside parties.

Guarantee your security

Demonstrate your confidence in e-commerce. Consider guaranteeing payment. This will encourage buyers to trust your system. Accepting responsibility for this payment will also allow you to remove one of the most common barriers to shopping online - perceived financial risk.

State your security record

Most customers are surprised to learn how infrequently security breaches occur. If your site has never had one, say so. For example, Web bookseller Amazon.com clearly states that none of its 3 million customers have reported fraudulent use of a credit card resulting from purchases made at its site.

Flaunt your protection procedures

If you take extra steps to ensure buyer information is protected, let visitors know. For example, if your secure service provider makes a weekly effort to break into its own system, just to reinforce security, state this fact on your site. You may also want to mention the technology you have in place by name. Many consumers are familiar with Secure Socket Layer (SSL), Secure Electronic Transaction Protocol (SET), and digital signature certificates that help authenticate the identity of all parties involved in a transaction.

Seek out approval from consumer organizations

Certain organizations offer seals of approval for online shops that meet their standards for conducting business. Displaying one of these marks on your site accomplishes two things: it alerts consumers that you are a legitimate business and it serves as a virtual beware-of-dog sign for would-be-hackers.

Use statistics

Round up some numbers that testify to the safety of online purchasing. You can find these statistics within the Web sites of research organizations such as Gartner Group and Forrester Research, as well as within sites devoted to computer industry news such as ZDNet. You may not want to clutter your home page, so consider providing a link to another page within your site that houses these statistics.

Provide alternatives

Some consumers will never agree to transmit personal information across the Internet regardless of what assurances you supply. To capture these customers, offer alternative methods for buying your business' product and services once they have learned about your offerings and your company online. One page of your Web site can direct them to fax, phone, or mail for order fulfillment.

Copyright © 1995-2010, American Express Company. All Rights Reserved.

Common Web Site Misconceptions

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Adapted from content excerpted from the American Express® OPEN Small Business Network
There is a lot of misinformation out there about Web site marketing. Many small businesses find it difficult to separate hype from reality. The key is to determine if the Web is right for you, and then use the right methods to exploit its marketing power. Below are some common misconceptions about the World Wide Web, along with some tips on how you can make your online marketing program a success.

Misconception 1: Every small business needs to have a Web site

While many small businesses can benefit from developing and maintaining their own Web sites, it's important to realize that this form of marketing is not for everyone. You need to consider using a Web site if:

• Your customers are online.
  If your customers base buy products or get information via the Web, then you need to be there. If, on the other hand, they get most of their information from other sources (whether the Yellow Pages, newspapers and magazines, trade shows, or other marketing vehicles), then you might want to concentrate your efforts in these areas.
  
• You want to reach a national or international customer base efficiently.
  The Web is not a form of "local" marketing. By its very nature it has a broad reach, so you need to be prepared to take advantage of that. For example, a home contractor based in suburban New York may not be able to reap the full benefits of a Web site because it serves a very targeted audience. A candy distributor that offered national shipping would be in a better position to take advantage of the Web's broad reach.
  
• A Web site supports your marketing objectives and your budget.
  Your Web site needs to be part of a fully integrated marketing plan and budget. It's important to have a consistent message in all the tools you use.
  
• The Web can take the place of, or be more efficient than, other marketing options
  The Web can give your customers immediate access to information that it might take them days or weeks to get otherwise. For instance, a commercial photographer who put his portfolio on the Web can direct potential clients to his site, instead of incurring the expense of sending his portfolio for every job.
  
• You're committed to your site
  A Web site requires constant attention. Are you willing to keep it fresh? Can you commit to adding new content every month? Do you have the time and budget to support it properly? If you're not willing to do this yourself, you need to hire someone to do it for you. Otherwise, your Web efforts will be wasted.
  

Misconception 2: A Web site automatically levels the playing field between my small business and my larger competitors

Yes, a professional looking Web site can make your small business look larger than it is. But without an effective plan and effective implementation, your Web site can actually make you look less professional than you are, and put you at a competitive disadvantage.

Use the Web to show off your expertise. By giving away your knowledge, you can position yourself as an expert and attract customers and interest them in your products or services.

One way to make yourself appear larger than you are is to have your own domain name. A Web address of "www.yourcompanyname.com" is much easier to find and presents a more professional image than using a sub-address of your Internet Service Provider or online service (www.yourISP.com/~yourcompany). The cost to register your domain is minimal, and many ISPs will host your site under that name for a small monthly fee. Talk to your ISP about how to do this.

Another trap to look out for is using technology for technology's sake. Using bells and whistles just because they seem "cool" can actually work against you. Here's an example: the home page of a consulting firm features a popular "counter" that informs you how many visitors have come to the page. Unfortunately, it announces the site's low traffic, and therefore causes you to question whether the information you're receiving is accurate or compelling. Without the counter, you might have read the content without considering this.

Misconception 3: Put up a Web site and people will come flocking to your company

Don't expect people to find your Web site on their own. You need to encourage traffic through active promotion both on the Internet and in your traditional marketing materials. Here are some common methods:

Register your Web site with all the major search engines like Google, Yahoo!, and Bing. There are a number of services that will register your URL with multiple engines and directories for a small fee -- a popular one is Submit Express. Be aware, however, that while these services will get your site listed, you will lose control over how you want your site described.
Exchange links or banner ads with non-competitors who have complementary services or products. Send an email to the Webmaster at the site you want to link with, and offer a reciprocal linking arrangement. Be sure to stress the mutual benefits of creating this link in your note. Services such as Link Exchange let you swap links with other businesses, giving you free banner advertising directly proportional to how much you put on your Web site.
Be sure to support your URL throughout your marketing literature. Put your Web site address in all your ads, in your product brochures, and on your business cards and letterhead. Include it in the signature file for your emails, so customers can automatically jump from your message to your Web site.

Copyright © 1995-2010, American Express Company. All Rights Reserved.

Get Better Customer Input

Adapted from content excerpted from the American Express® OPEN Small Business Network

Surveys are an excellent way to find out how your customers feel about a new product, service, location, store policy or virtually anything that's important to your business. A survey will tell you what your customers expect of you and your company, and clarify how well you are performing in their eyes.

If executed properly, you can achieve impressive results without spending a lot of money. Customer service experts estimate it can cost between ₦3,000 - ₦5,000 to sample a representative segment of your customers.

The tips below can help you create an effective survey:

Start with clear objectives

A strong survey has a clear goal or focus. (i.e. to find out how customers feel about a proposed new location or store layout; get response to a new product or service; learn why once loyal customers are now shopping elsewhere). Take time up front to know why you're surveying your customers, and you will get results that will help you make your business more effective.

Give customers a compelling incentive for responding

Ron Zemke, author of "Coaching Knock Your Socks Off Service" (Amacom) suggests including discount coupons for certain products or services with the survey. Or, if customers return the survey in person by a certain date, they're entitled to a 10 percent discount. This can be particularly useful if you're using your survey to prospect for new customers. It might also be as simple as a sentence at the top of the survey indicating that you are using the input to evaluate current policies/products and create new ones -- customers like to feel like they can have an impact on your company.

Ask questions that are important to customers

Customers aren't concerned with issues that do not pertain to them (i.e. hiring, promotion or store policies, outreach programs, etc.). Make sure that each question is important to your customers' needs, not your internal management. Plus, remember that a successful survey arouses excitement and is fun to fill out. Don't put yourself in a position of wasting your customers' time.

Keep the survey brief

Ideally, it should contain 10-12 questions neatly spaced on one page.

Use a confidential self-mailer to generate higher response rates

The easier it is for people to respond, the higher the response rate will be. Self-mailers are highly recommended because they require less paper and postage. Next best is including an addressed pre-stamped envelope. ( It's presumptuous to expect respondents to use their own postage.) Also, stressing the survey's confidentiality increases your chances of getting honest answers.

Ask compelling easy-to-answer questions

Keep questions direct, simple and brief. Scaled questions (strongly agree, moderately agree, disagree, don't care) and yes/no questions are the easiest to answer. Long, wordy multi-part questions should be avoided. An example of a good question: How well do you feel your accountant meets your tax needs? The answer would be on a scale of 1 (poor) to 5 (excellent).

Encourage customers to give their opinions

With every question, enclose a "Comments" line, encouraging respondents to express opinions -- both positive and negative. Many service businesses, for example, have been successful with questions such as, "If this were your business, what would you do differently?" If respondents feel strongly about the issue, pro or con, there's an excellent chance they'll answer it.

Test survey before mailing it

Andy Mosko, managing principal of Organizational Research Forum, Inc., Vernon Hills, IL, a company that specializes in designing customer surveys, advises testing a survey before mailing it. "Try it out on a few good customers," he says. "You'll be pleasantly surprised to discover it can be improved."

Focus your surveys on your best customers

These are the people whose opinions you value most. You don't have to mail a lot of surveys to get valuable information. If you have 2,000 valuable customers, for example, consider sampling 500. A 50 percent return (250 respondents) is considered excellent; 30 percent (150 respondents) is considered good and 10 percent (50) is dismal. If the lion's share of your business comes from only 8 or 10 customers (as may be the case with a small service business), design your survey with their needs in mind.

Preview survey with postcard arousing curiosity

A brief attention-commanding announcement should be delivered a week before the survey is officially sent. It's an opportunity to highlight the benefits (premium, discount or special money-saving coupon) of filling out the survey and sending it back promptly.

Copyright © 1995-2010, American Express Company. All Rights Reserved

Providing Superior Customer Service

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Adapted from content excerpted from the American Express® OPEN Small Business Network
You can use customer service as a powerful way to set yourself apart from your competition. Its one of the strengths a small business has, and by emphasizing customer service, you can compete with larger companies who may offer more variety, lower prices, and other perks you can't afford. But many small businesses fall short in the customer service category. Why? Ignorance is one reason. There simply are not a lot of examples of good customer service on which to model your company.

To make sure your business' customer service is top notch, find out what your competition is doing and then copy and exceed it. Read books or listen to audiotapes by people who have studied customer service-driven companies such as Neiman Marcus and see what lessons you can learn from these giants. Successful entrepreneurs are always looking for ways to improve all aspects of their business.
In the meantime, here are five maxims to help make sure you leverage your small business status to provide the best customer service possible.

1) Apologize, Don't Debate

If a customer has a problem, apologize and fix the problem. Make sure to let customers vent their grievances, even if you are tempted to interrupt and correct them. Then give them a refund, new item, or whatever will fix the problem. Debating or haggling over a refund creates ill will. Repair mistakes immediately. Keep in mind that a complaint about your company is an opportunity to turn the situation around and create a loyal customer. Obviously, there will be some customer requests that are too outrageous to comply with. If that's the case, do your best to offer a moderate, appealing alternative.

2) Feedback Keeps You Focused

Ask your customers to rate your service on a regular basis. This can be done via a short questionnaire included with every product sold or mailed to key clients. Keep the questionnaire short so that it is not a burden for customers to complete, and make sure they know they can decline to participate. Always let customers know the purpose of the survey is to serve them better. If they fill out the survey and have no problems, it is a reminder of what good service you offer. If issues do arise, they can be addressed.

3) Stay Flexible

You must be flexible when it comes to your customers and clients. This means doing a project for a client in a pinch, having an early morning meeting even if you like to sleep in, and meeting on Saturday even if you usually reserve your weekends for yourself.

Flexibility can also mean getting information for your client, even though it may not be in your area of expertise. Say, for example, you're catering a wedding and your client needs information on Irish wedding customs. It's just as easy to make a call to your local library and fax the information to your client as it is to say "I don't know anything about that." And making that extra effort will ultimately pay off with a very satisfied customer.

4) Always Say "Yes"

This doesn't mean giving up your personal will to your customers but it does mean finding a way to help customers with their requests. If you run a gift business you might wrap a present for an important client, even if you don't usually provide gift wrapping. You might stay up late to finish a project if a client suddenly has a deadline moved up, or travel in a snow storm to meet a client even if it means an unpleasant trip for you. Always saying yes, means the words "that isn't possible" should be forbidden from use in your business. You cannot afford to use them. If this sounds expensive and inconvenient, it is, but it is less expensive than losing a customer and having to spend money and time landing a new one.

5) Under Promise, Over Deliver

Make your customers believe they are important to you by always appearing to go the extra mile. Build a little cushion into a deadline and deliver early. Estimate that a job will cost more than you think, and bring it in lower.

Many small businesses make the mistake of reversing this maxim - over promising and under delivering. This is a true recipe for disaster. You may get the business, but your level of service will make it difficult to compete. If 24-hour turnaround is excellent service in your industry, don't promise it in 12 just because the customer requests it.

Copyright © 1995-2010, American Express Company. All Rights Reserved.

Common Startup Mistakes

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Adapted from content excerpted from the American Express® OPEN Small Business Network
For most people, starting a business is an exciting time during which they are invigorated by the possibility of success and the fun of tackling new challenges. It is also a time to make lots of mistakes!
Many of the mistakes entrepreneurs make during the start-up phase can be avoided. One of the best ways to steer clear of foibles is to talk to established business owners about what they learned during the process. Ask your attorney or accountant for referrals to business owners who have relevant experience and attend trade association meetings and talk to people in the industry you are entering.
No matter how much research and preparation you do, you will make mistakes when you start a business, but the common errors listed here may help you avoid a few.
Common mistakes include:

Incorporating too quickly

The first step for many people when they launch a business is to file with the state office of incorporation. While incorporating is an appropriate step for many businesses, it pays to wait until your business idea is well formed before taking the plunge. The reason: the concept of your business and therefore the name is likely to change during the first few months of operation.

Not researching the market

A frequently overlooked component of business start up is determining whether the target market for your product or service will buy from you. The best way to derive the answer to this question is to ask them. Arrange to speak to as many of your potential customers as possible. Questions to ask include: Would you buy my product or service? Where do you currently obtain this product or service? How much would you be willing to pay for it? What do you like/dislike about your current provider? Where would you look for this product or service when you need it?

Wanting to over-use an attorney

Attorneys' hourly fees add up extremely quickly and newly-minted business owners are often shocked by their first few legal bills. The temptation when you start is to involve your attorney in all aspects of your business for counsel and drafting of documents. Many business owners quickly learn that it pays to do your own research, draft your own documents, and call on the expertise of your attorney to refine your work.

Spending too much money on office space and decorations

A nice office and great computer equipment make many entrepreneurs feel as though their dream of entrepreneurism is coming true. While one of the pleasures of launching a business is setting up an office that you are proud of, expensive trappings have put many businesses out of business before they got off the ground.

Copyright © 1995-2010, American Express Company. All Rights Reserved.

Choosing a Board of Directors

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Adapted from content excerpted from the American Express® OPEN Small Business Network

If you have chosen to organize your company as a corporation, you are legally required to have a board of directors. Whereas your management (i.e. CEO and president) oversees the daily decision making of your company, your board guides the overall direction of your company.
The size of the board you must have varies by state, but the number of directors on the board cannot exceed the number of corporate shareholders, and in many states a board must be comprised of no fewer than three people. The CEO and president of a small business report to the board of directors, who can, in some cases, vote them out of the company or override their decisions. In many cases, however, the president or CEO owns a bulk of the company's stock, limiting the power of the board to override their decisions.
Large, public companies pay directors for their membership, but small companies are more likely to provide board members with an interest in the company or just a free lunch or dinner when the board meets.
When you are creating a board of directors, you must decide on an "inside" or "outside" board. An inside board is comprised of friends, family, and contacts you trust, and is what most small business owners form first. An outside board is made up of people you recruit based on their skills because you need them to expand your business. If your company is looking for an acquisition, or thinking about an Initial Public Offering (IPO), you may need talent that you can only get from an outside board of directors.
If your business is not incorporated, you may want to form a board of advisors. An advisory board is more informal than a board of directors in that it generally does not have regular meetings, and even in larger companies advisory board members are often not compensated for their services. An advisory board is also not usually authorized to oust a CEO and is created primarily to provide business advice to a company.

Tips on putting together a board of directors

Create a board that complements existing management
Look for people who bring new areas of expertise to your company. For example, if you own a small technology company but don't have any marketing background, search for board members who can provide the marketing experience you need.
Chart your management needs
Create a chart to determine the kind of talent needed to move your company ahead. List the skills your management possesses. You can then make a list of the skills sets you need to acquire and the people who possess those skills.
Use a headhunter
Some executive recruitment companies specialize in recruiting directors and management professionals/executives. For a fee they will locate board of director candidates for you. If you choose this route, keep in mind that the search firm must have a good understanding of you, your company, and the talents you seek in order to be able to recruit effectively for you.
Use your network of colleagues and friends
A well-rounded board of directors can be formed from your former school mates, vendors, professional service providers and social acquaintances. Make a list of candidates from this field and then vigorously scrutinize the list to ensure you are choosing the right talent for your company, not just people you like.
Keep board size manageable
The smaller your board, the more efficiently it is likely to operate. Unlike large companies that recruit high-profile board members to enhance corporate image, the board of a small company is usually a working board. The exception to this rule is if your small company is going public and needs a larger board to guide you through the process.
Make sure the CEO contacts board prospects
Once you have identified board member prospects, the CEO should call those individuals. If you are the CEO, you should explain who you are, provide details of the corporation, how the individual's name came to your attention, and state that you would like to have an appointment to talk about possible participation on the board.
Look for people who know how to raise capital
Even if your company does not need to raise capital now, it most likely will at some stage. Board members who have a strong financial background and knowledge of how to raise money are always an asset.

Copyright © 1995-2010, American Express Company. All Rights Reserved.

Deciding on a Business

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Characteristics of a Successful Entrepreneur Step-by-Step Approach Decide if you really want to be in business Decide what business and where Decide whether to start full-time or moonlight Selection Strategy Things to Watch Out For Required Activities Comparative Evaluation How to Evaluate a Specific Business you have in Mind "For" and "Against" List Get Completely Qualified Decision Time SESSION 1 Quiz [Back to top] Characteristics of a Successful Entrepreneur Testimonial Collette Paul STM Media Inc. Publisher of Trade Magazines "Be able to sustain a financial commitment to whatever business you start." Transcription - html Guts: Guts means you must have an entrepreneurial instinct, which is an overwhelming desire to have your own business. You must have the guts and dedication to be completely devoted to your goal. Incidentally, devotion to your goal is much more likely if you have a love for your intended business. Life is too short to start a business that doesn't give you satisfaction and joy. And, through good times and bad times, you will stick with something you love. Brains: While appropriate educational credentials are important, entrepreneurial "brains" means more than scholastic achievements. To become a successful entrepreneur, you must have a working knowledge about the business you plan to start before you start it. Common sense combined with appropriate experience is the necessary brainpower. Prudence, follow through and attention to detail are very important. Capital: You will need seed money of your own plus sufficient cash to maintain a positive cash flow for at least the first year. In a future session you will learn how to forecast future cash requirements through cash flow control. Many businesses can be started on a very small scale with a small investment. Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases you don't need starting capital to hire other people because you might start by doing everything yourself. The "do it yourself" start is a good way to learn everything about your business and also makes you better qualified to delegate work to others later on. You can control your risk by placing a limit on how much you invest in your business. [Back to top] Step-by-Step Approach Testimonial Elaine Mitchell Specialized Veterinarian "Hiring good staff members who also share the same philosophy has been very important." Transcription - html Decide if you really want to be in business: You will be putting some (not all, hopefully) of your net worth at risk. You will run the risk of becoming eccentric, meaning creating a life that is out of balance, with working hours taking away from other family or pleasurable activities. There may be levels of stress you have not experienced as an employee. Decide what business and where: Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Selection strategy is covered later on in this Session. Decide whether to start full-time or moonlight: There are some interesting advantages and some pitfalls in starting as a moonlight business. (That is, a business you start in your off hours while still working at your current job.) More often than not, the advantages of starting as a moonlighter outweigh the risks: You avoid burning your bridges of earnings, including retirement, health and fringe benefits and vacations. Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including compartmentalizing your job and business into completely separate worlds. You can avoid conflict of interest with your job by choosing a business that is appropriate for moonlighting, such as: single products, real estate, specialized food, e-commerce, direct marketing or family-run operations. There are great advantages for operating a family business. The family can run the business while you are at work. You have a built-in organizational structure. You can teach your kids the benefits of being in business. But there are also some pitfalls to consider in starting a moonlight business: There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances. (You may need a family member or some trusted person to cover emergencies when you are at your job.) Another problem may be competing with your employer, which, again, is not right. Think of how you would feel or handle this employee if you were the boss. Any kind of conflict with your regular work can jeopardize your job and your moonlight business. Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs. [Back to top] Selection Strategy Testimonial Millard MacAdam Pro Active Leadership "As the saying goes, fail to plan and you are planning to fail." Transcription - html Selecting the wrong business is the most frequent mistake that start-up entrepreneurs make. Here is a checklist to help you select a successful one: Take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success. Don't tackle businesses that may be too challenging. It is better to identify a one-foot hurdle than try to jump a seven-footer. Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is." A big mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you. Look for a business that will grow in today's and tomorrow's markets. Many small retail stores are no longer in business because huge stores such as Wal-Mart and Home Depot provide more choices to the customer and often at a cheaper price. Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc. and the most successful business picker in American history: Mr. Buffett looks for businesses that focus on a "consumer monopoly" with pricing power and long-term predictable growth prospects. Examples include: See's Candy's, Coca-Cola and Gillette Razors. Can you copycat this philosophy in a small way? Businesses to avoid are "commodity" businesses where you must compete entirely on price and in which you must have the lowest cost to survive. As Mr. Buffett has said, "In a commodity type business you're only as smart as your dumbest competitor." Most service businesses have pricing power. Should you bet on a business you don't know when you can bet on a business you do know? If you intend to manufacture a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging. [Back to top] Things to Watch Out For: Testimonial Sophia Garcia A-Z Glass Company "To get ahead in this business you do everything to get the job." Transcription - html Impatience Do not let overconfidence short-circuit you from analyzing your selection of businesses carefully. You must not fear of hearing the negative aspects; it is much better to be aware of them and face them early on. Be realistic. Do not become lured by high rewards. They will come if you choose the right business and if you understand every aspect of the business before you open its doors. [Back to top] Required Activities It is worth repeating again: The most common mistake and the most costly one is not picking the right business to begin with. This is the time for soul searching. IF YOU HAVE NOT DECIDED ON A BUSINESS, DO THIS: On the top of a blank sheet of paper, write an activity you like to do (make this the heading). Do a separate page for each activity or interest you have. On those same sheets list as many businesses you can think of that are related to that activity. On the same sheets list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could do. Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawnshops, auto repairs and fabric stores. EXAMPLE Let's assume you end up with three potential businesses: towing service, selling used cars and auto repairs. You can now make a comparative evaluation using the following check-list (or better still your own checklist) with a 1-10 scoring system: Objective Towing Service Selling Used Cars Auto Repair Can I do what I love to do? 6 3 10 Will I fill an expanding need? 8 5 10 Can I specialize? 7 8 10 Can I learn it and test it first? 9 8 9 This kind of analysis can help you gain objectivity in selecting your business. How to Evaluate a Specific Business you have in mind. Here are some questions to help clarify your thoughts: Is it something I will enjoy doing? My favorite activities are: __________________________ I like to serve people by: ________________________________ Will it serve an expanding need for which there is no close substitute? Can I be so good at a specialized, targeted need that customers will think there is no close substitute? Can I handle the capital requirements? Can I learn the business by working for someone else first? Could I operate as a hollow corporation, without a factory and with a minimum number of employees? ("Hollow corporation" refers to a business where everything is "outsourced," meaning you would subcontract manufacturing and packaging to outside sources. ) Is this a product or service that I can test first? Should I consider a partner who has complementary skills to mine or who could help finance the business? Once you have decided what business you want to start, do this: Make a "for" and "against" list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the "for's" and on the other all the "against's." Sometimes this will help clarify your thinking. Write down the names of at least five successful businesses in your chosen field. Analyze what these five businesses have in common and make a list of reasons that make them successful. Talk to several people in your intended business. Don't be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls: better now than after you open your doors. Take notes if possible. Write down the information as soon as you can. Analyze the competition that are not doing well and write down the reasons. Get Completely Qualified Before you start, get completely qualified: The best way to become qualified is to go to work for someone in the same business. Attend all classes you can on the subjects you need, for example: accounting, computer and selling. Read all the appropriate "how-to" books you can. Don't be afraid to ask questions or seek help from the most successful people in your intended business. [Back to top] Decision Time: What could you sell or what services could you perform that would make money and you would enjoy? To complete this session you should have decided on a business or at least selected a business you think would be best for you. To get the most benefit out of the next eleven sessions you should have a definite plan in mind. Session Two will show you how to prepare your business plan. [Back to top] SESSION 1 Quiz: DECIDE ON A BUSINESS Which of the following actions must always be taken to become a successful entrepreneur? You should be prepared to risk all of your family assets. Plan to quit your job before starting. Choose a business that is in a field you enjoy. Be prepared to put down a lot of money. The most common and biggest mistake made by entrepreneurs is in not having sufficient money. True False Which one of the following is NOT a good reason to consider starting a moonlight business? You won't burn your bridges of income and benefits while you're getting your business started. Family members can become involved in your business. You have the time and equipment available on your regular job to conduct your own business. New tools including the Internet, pagers and fax machines are available to conduct home-based businesses including e-commerce, direct marketing and single products. If a part-time business proves out and becomes successful, you can decide at that time whether to quit your job and become a full-time entrepreneur. Let's say that you are looking for some overall guidelines for picking a business. Which one of the following answers would be a good decision? You have the choice between taking on a business that would be a huge challenge to make successful and one that would be a no-brainer for you to accomplish. You would go for the challenging one. Realizing that you're not getting any younger and this is going to be a big step, it would be better to jump right in and get something started and see what happens. If you had the choice between getting into a business in which you already have experience and one that would be a fresh start in an entirely new field, you would go for the fresh start. You'd take your sweet time to seek out that one great opportunity. If your heart is really set on opening a toy store in a strip shopping center, you would go for it no matter what. Realizing that there are no hard and fast rules, generally speaking, which of the following businesses would be easier to start and command better pricing power? Operate your own gasoline service station. Sell your grandma's special candies. In most cases, the very best way to become qualified in a business you intend to open is to: Talk to everyone you can who is in that business. Do a "for" and "against" analysis. Do a twelve-month pro forma balance sheet, income statement and cash flow projection. Work for someone in the same business. Objectively weigh the collective opinions of your accountant, banker, lawyer and insurance agent. Starting a "hollow corporation" means: Starting a company with no assets. Starting a company with negative net worth. Acquiring a shell corporation. Creating a company where all activities are outsourced (manufacturing and packaging). You have always dreamed of opening a hardware store but now that you're ready to start you realize that the Home Depots of the world would be too hard to challenge. You should: Find a niche segment in the hardware business that you can specialize in. Find another business. Go to work for one of the "big box" hardware chains and see if any needs exist that you could uniquely fill. All of the above What is the single most frequently made mistake that leads to failure? Lack of experience in the business chosen. Undercapitalization. Not picking the right business to begin with. Lack of knowledge of accounting. Lack of familiarity with the competition. You don't need to worry about the dumbest competitor in a business that is service oriented. True False Proceed to Session 2: The Business Plan

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