Archive for January 2011
It’s the start of a new year and maybe you have decided to start your own business. Or perhaps you’re already through the start-up phase and you’d like to see your business grow. New business owners often make the same mistakes, you should know which ones to avoid and which ones you might already be making.
Don’t set your prices too low
When you first get started it can be difficult to set a price for your product. You might not be one hundred percent confident in your price range and it’s important to be very careful in price territory especially if you are in services. If you are just beginning, setting your prices too low can be disastrous because you might not know exactly how long projects can take or what kind of unexpected expenses might come up. So learn to be proactive and think of all contingencies before setting your price.
Be careful with details
You have to be meticulous about your records. Organization can be the key to the success of your business. If you are a service-based business, jumping right into the project without a signed contract or at least an outline agreed by both parties can be detrimental to the end result. Be aware that you can get burned and you need to cover all of your bases before offering your services to anyone.
Update your business model
Your business model should be an ever-evolving idea. Every day you should experience things that give you an idea of how to better your business model. Customers like proactive companies that are continuing to try and get better. It will increase your brand equity and consumer opinion if you ask for feedback and update your business model. If you are too stubborn to quickly abandon something that clearly isn’t working, you’re setting yourself up for business failure.
If you ever get discourage because you knew you made a big mistake and it set your business back significantly, remember this: “failure is compost,” there’s no better way to grow your business than on the foundation of mistakes you learned from and improved upon.
Do you want to make money? Let’s say you have already established your small business but now you’re trying to expand your customer base and grow your business. In addition to an increase in your marketing efforts, there are many ways you can grow your business.
The Small Business Administration has a post on their website giving us aspiring small business owners a few ways to grow our businesses. The method you choose can very well depend on what type of business you have, how much capital is available, and the time and resources it may take to follow through.
Here are some ideas for growing your business from the SBA:
Open another location.
This is often the first way business owners approach growth. If you feel confident that your current business location is under control, consider expanding by opening a new location.
License your product.
This can be an effective, low-cost growth medium, particularly if you have a service product or branded product. Licensing also minimizes your risk and is low cost in comparison to the price of starting your own company to produce and sell your brand or product. To find a licensing partner, start by researching companies that provide products or services similar to yours.
Form an alliance.
Aligning yourself with a similar type of business can be a powerful way to expand quickly.
Diversifying is an excellent strategy for growth, because it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins. Here are a few of the most common ways to diversify:
- Sell complementary products or services
- Teach adult education or other types of classes
- Import or export yours or others’ products
- Become a paid speaker or columnist
Target other markets.
Your current market is serving you well. Are there others? Probably. Use your imagination to determine what other markets could use your product.
Merge with or acquire another business.
Two is always bigger than one. Investigate companies that are similar to yours, or that have offerings that are complementary to yours, and consider the benefits of combining forces or acquiring the company.
Expand to the Internet.
Very often, customers discover a business through an online search engine. Develop your business website and optimize it to increase your exposure to your customers.
Picture this: You’ve finally set up a website for you small business, you’ve hired the best designer in town…and nothing’s changed. If this sounds like you, you’re pretty much stuck until you gain control over your content.
As a business owner with an online presence, having the authority and access to your web content is crucial to your website’s success. If you want a professional site that successfully represents your company, brings more customers to your business, and increases your revenue stream, there are a few techniques you need to use.
Use a Content Management System
It’s your website. Essentially, it’s another branch of your business. Because it’s not quite as straight forward as your brick-and-mortar location, you might not realize exactly how much work goes into making your website an effective location of commerce.
If you have a content management system, you can easily update content to keep up with the ever-changing consumer demand. You also have control over the keywords, meta-tags, and meta-descriptions that drive traffic from search engines to your site. This is important because keywords are always changing and your website needs to change with them.
Definitely avoid using industry-specific jargon. People are interested in buying your product to solve a specific problem. If you clutter up your content with too much information that is beyond the level of even the most basic customer, they can quickly be put off by it. In the simple words of Jen Udan from ChooseWhat.com:
“If they don’t understand what you’re selling, they won’t buy.”
Keep Your Website Simple
While flashing lights and fun graphics are always cool, they might actually render your site ineffective. People are looking for answers to their questions when they reach your website. If at anytime they feel confused, it doesn’t take much for customers to leave your website and visit a competitor’s.
Make sure everything on your website is clear. Your homepage should have basic information about your product and its benefits. In addition, every page should have a clear call to action. This call to action needs to be identified by you, the business owner. What do you want your browsers to do after reading your information, call you? Subscribe to you? Order from you? These questions need to be answered before writing any content because it should provide the framework in which you write any and all of your information.
Owning your own small business entails a lot of responsibility. Truthfully it can be a very lonely path. You have to have all the right things going for you, the right personality, the right skill set, the right exposure to the right industries. It’s all very complicated.
But! It can be simple. You just have to understand that your role as a business owner is completely different from that of an employee. You have to think bigger than just deadlines or driving traffic to your business website.
How to think big
Before you choose to start your small business, you have to use the kinds of skills and habits in your every day life, even if you’re still working under someone else. Chris Brogan puts it in better words than I can:
“I took on challenges that other project managers didn’t find interesting. I took on messy projects that had a high possibility of failure. And sometimes I failed. But because I stepped up, I was noticed, and I got more and more power.”
That’s just it, stepping up. Having been a competitive athlete my whole life, I’ve heard it all. I’ve heard just about every motivational quote out there. The one that sticks with me most because I can apply to my daily routine is:
“Success comes from taking on tasks no one else wants, and completing them well.”
How to seek opportunity
In order to be successful in your business venture, you have to see the opportunities when others don’t. You find dollar signs hidden within your customer’s complaints. Your main priority should be solving your customer’s problems, or making yourself more accessible to customers and their needs.
Your business should represent who you are as a person. If you decide to own your own business, you need to market yourself and your brand as a resource to customers with specific problems. If you find a way to better the quality of life for you customers, you have found the perfect opportunity.
Do you think your personality has what it takes to become a successful entrepreneur? According to Entrepreneur.com, your personality has a lot to say about who you become, the potential you have, and how successful you will be.
It has been shown in various studies that certain personality traits can outshine shortcomings in education, skill, and experience. It also makes logical sense that if a person chooses a business venture that coincides with their personality, he or she will experience a greater amount of success.
Entrepreneur.com explores four general personality types of people who typically start, own, and run the majority of successful businesses. Read Entrepreneur.com’s summation of entrepreneurial personalities and see if you have what it takes:
1. The Trailblazer:
You are very competitive, ambitious and goal- oriented–so much so that you tend to be aggressive and sometimes take a steamroller approach. Independent, persistent and decisive, you aren’t happy unless you’re in charge. Trailblazers are logical, analytical, practical and realistic–you tend to base decisions on facts rather than feelings. You are a calculated risk taker.
Good industries for you could include the medical, technology, finance, legal and consulting fields. Being a strong strategic thinker, you focus easily on marketing strategy and operations. Your challenge is likely to be working with people–you are usually a better leader than manager and need to surround yourself with others who can manage the people side of the business.
2. The Go-Getter:
You have a higher-than-average level of both dominance and sociability and are very driven and independent. You are competitive, but your drive to succeed is sometimes tempered by your interest in and concern for others. Go-Getters are typically good leaders and good managers, excelling at motivating themselves and those around them.
You can do well in retail, but may prefer being the outside rainmaker. You work well in ambitious and unfamiliar environments. This means you can invest in, buy or start a business that’s totally new to you and still make a success of it. You don’t need to be an expert in the field to start the business–you are a good collaborator and can learn as you go.
3. The Manager:
You are dominant and independent. You are also very goal-oriented and can be quite analytical, focusing more on processes and outcomes than on people. You have a tendency to look at people as vehicles for helping you accomplish your goals. You can deal well with customers, especially repeat customers, so you’ll probably be great at growing a business.
You like doing things on your own, are a great behind-the-scenes leader and love working with systems, concepts, ideas and technologies. You excel at competitive selling because you enjoy overcoming rejection and achieving goals despite obstacles. Managers enjoy working by themselves, and managing others can be a challenge, so you need to hire employees who are better than you at listening and working well with others.
4. The Motivator:
You have a high level of sociability, an above-average level of dominance, and are both driven and independent. This gives you the ability to work well under pressure and in autonomous situations. It also means that you will be a great consensus builder, a good collaborator and a driver of change. Just like the name suggests, you are the consummate motivator who does well working by, with and through others.
Motivators excel at leadership or sales. You can be convincing and avoid most confrontation by creating a strong emotional argument. Motivators do well in the toughest of customer service roles, as you are able to see both sides of the argument. You do well in business with partners, or in a business that involves others. Motivators are good at nurturing relationships and often do best in a business that involves keeping clients for the long term. You thrive in a team environment.
Who should you hire? Such a complicated question – a person you hire could mean anything from your new small business propelling forward in a new direction or your new small business chugging straight toward a dead end.
If you are a small business owner, the people on your team are so incredibly important to the success of your business. It is crucial (and also highly difficult) to hire people that will add value and substance to your business.
So how do you do it?
Share your vision
I recently attended a lecture on entrepreneurship given by William J. Rossi, a program director and professor at the University of Florida. His lecture explored the attributes and mindsets of entrepreneurs. The most important attribute Rossi discussed was the ability an entrepreneur has to share his vision with his employees, and make them feel like a part of something bigger.
The greatest entrepreneurs have a vision. They visualize and imagine a direction they will travel in that will eventually better the quality of life for consumers. So what does this have to do with hiring the right people into your business?
A truly successful entrepreneur understands the importance of motivating others. People in managerial positions give their employees deadlines, expectations, revision requirements, etc. Entrepreneurs however, trust people to do the job themselves, but it’s more than that – entrepreneurs give their employees a reason to do a good job, they are part of the vision.
“A leader focuses on motivation and inspiration. He energizes people to overcome bureaucratic, resource and political barriers because they believe in an agenda and want to accomplish it,” Rossi says.
Hiring the right person
So to tie it all together, when you hire someone who you believe to be qualified for the position, you have to take it a step further. You have to invite your employees to contribute to the overall direction, ask their opinions, take their advice, and allow them to participate in the bigger picture. This could apply to anyone, whether they work in marketing, finance, sales, manufacturing – everyone should be passionate about the “vision” you have created.
By giving people an overall sense of purpose, they are more likely to excel at individual tasks. When someone feels like they are a part of something bigger than themselves, they will undoubtedly do everything in their power to succeed.
Be a leader, not a manager.