SS Business Solutions

Fear

Fear is one of the most common barriers to starting a business. The first step is typically the most difficult, because there are so many things to be afraid of. Conquering your fears will help you take that first step to starting the business of your dreams.

The most common fear is fear of failure. What happens if I start a company and it fails within a year? This is a valid fear, as we all have bills to pay and need a reliable source of income. However, this fear is a fear that should drive you, because you are 100% certain to fail if you never try. If you can get past this fear just to take the first step to start your business, this fear should be evident in every action you take with your business. The more time and effort you put in to your business, the greater the chance you have to succeed, and having a fail of failure is a great way to motivate you to succeed.

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Fear of not being perfect: Many people make the mistake of thinking they must be perfect at their trade to be able to run a company. This is far from true, as all of us can think of an instance every day where a product or service we purchase is not perfect. We are not satisfied, products break too easily, they don't work properly, etc. No matter what product or service you offer, you will have dissatisfied customers. Learn to accept this to get over your fear of imperfection.

Fear of selling: Another common fear that keeps people from launching a business is a fear of selling. A business owner must deal with people (with very few business models being the exception).; otherwise, there are no clients, and without clients, there is no money. This is a fear you need to deal with head-on. You must force yourself to try and try until you get the hang of selling. Sales is a learned skill. Some people seem to be natural sales people, but the fact is that they all learned the skill. It just happens that some people learn at a much younger age than others. Pick up the phone and try several times, expecting to fail. This will take the pressure off, and after a few tries, you will see that the fear is not warranted. Just do not let rejection affect your will to make the next call.

If you learn to get past your fears, taking the first step to starting your business will be much simpler.

Cocktail Napkin Math - Effectiveness of an Advertising Campaign:

How do you know if you advertising campaign is working? You tested a new medium, now you want to know if you should continue or look for another way to advertise.

To know if your advertising campaign is effective, you only need to know two things: how much is a customer worth, and how much does it cost to obtain a customer. An effective advertising campaign is one where the cost to obtain a customer is less than what a customer is worth (leave some room for the cost of time…a dollar today is worth more than a dollar a year from now)

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The first part of the equation is figuring out what a customer is worth. The tricky part of this is that you only want to subtract the marginal costs from the total revenue to find the value of a customer. The marginal costs are the costs that are only incurred if you provide an additional product/service: materials, labor, travel, shipping, etc. What about office space, vehicles, utilities, etc.? Take your total costs for a period of time (i.e. one year) divided by your total capacity for that time period (in your current office, with your current amount of vehicles and machinery, how many customers can you handle before you would need to upgrade).

Now, subtract these variable costs per customer from the average revenue for the entire life of the customer.

Quick example…cleaning service:

Once you find the ones that are effective, line them up and find the most effective.

Cocktail Napkin Math Series � Introduction:

An effective small business owner needs to be able to think on his feet. You want to squeeze every dollar you can out of your business, and to do so you need to be able to do analyses on the fly. You don’t have time to sit in front of a computer analyzing income statements and balance sheets, but you still need to be able to do this to run a profitable business.

The Cocktail Napkin Math series will help you be better on your feet by providing you with tools to be able to make the best decision when you don’t have time to run detailed pro-forma analyses. They give you the key details to be able to run quick analyses in your head on the fly when you need to make an intelligent decision. When you can learn to run quick estimates and assumptions in your head, you become a better decision-maker. Making the best decisons will help you become a more effective leader for your business.

Marketing Ideas: Tips for direct mail

For a small business, direct mail can be a cost-effective way to obtain customers. This is especially true for a start-up businesses looking for its first sales.

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Direct mail campaigns typically have very low conversions. If you can gain one response from every 200 targeted direct mail flyers, you’re doing a good job. And a response is not necessarily a paying customer. Why is success so low? Your ad is just one of many that people receive every day in their mail box. Unless you do something remarkable to stand out from the others, your flyers are getting thrown in the trash along with your advertising dollars.

In order to improve your response rate, you need to provide incentive for people to follow up. Sending a flyer with your company’s information and a cute slogan is not enough to make a person call. You might get a response from the people who just happened to see your flyer and need your product/service at that particular time, and if none of your competitors catch their attention first. But if you send your company’s information and an offer for a free product/service or a significant discount, your flyer will stand out. If given the choice between two competing companies, most people will choose the company that is offering them something.

Offering something for free will generate the most responses, because people do not lose anything for trying your product. You’d be amazed at how many people are looking for something for free. But now it is up to you to sell more of your product to this potential paying customer. Just don’t be discouraged when many of these people do not convert to paying customers. At least they tried your product, and they may talk to friends or family members who will pay for your product. Focus your attention on the people who truly need your product and could benefit from becoming a customer. When this person uses your product or service, be sure to include plenty of information about how this person can purchase more, and make it easy for this person to become a customer.

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Direct mail can be an effective way to gain your first customer, as long as you offer something that recipients of your mail find valuable.

Online advertising is not for you

With few exceptions, a small business should not waste money on online advertising, such as Google Adwords or other pay-per-click services. The big guys took over this medium and made it a money-wasting advertising channel for most businesses. Years ago, before large companies discovered Google Adwords, you could find high-volume keywords for pennies. At such a low cost, businesses could profit from the low-conversion internet advertising. In the past few years, this pay-per-click advertising was taken over by the companies with deep pockets, driving up the price of keywords. Now, it is almost impossible to find low-cost traffic on Google. Conversions are at best the same as they were in the past (many businesses are lucky to convert 0.5% of their pay-per-click traffic), so it makes no sense to waste your money on this advertising.

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Many people still like to tout Google Adwords as the way a small player can compete with the big boys. Do not fall into this trap. They claim that a small player can place their ad at a higher position than a billion-dollar company. Yes, this is true, but a large company can afford to waste hundreds of dollars to win one client. Most small businesses cannot afford to do this. Do not try to compete with large companies...in most cases, you will lose...badly.

Look bigger than you are

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Many small businesses make the mistake of looking like a small business. They use cheap-looking business cards, their advertising consists of a piece of paper and they show up to jobs dressed like a person who performs the service in their free time. Don't make the mistake of looking like you are not professional. Understand the dress code of your industry and be sure to live up to that expectation. Have business cards professionally designed and printed, and do the same with any advertising you use. There are many low-cost services available to allow your presentations seem professional. You can have shirts printed out at cafepress.com. Go to printsmadeeasy.com to have low-cost, professional-looking color business cards and postcards printed. They have a website that allows a person with little design experience to design business cards and post cards from pre-designed templates. Looking professional does not have to cost a lot. Do some research to find more of these types of services specific to your business. Just remember that if you do not present yourself as a professional, nobody will believe you are a professional.

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Finding your first clients

The first clients for a small business are normally the most difficult to find. You may have all of the materials ready to get started, but you need to find people willing to pay for your product. This may sound easy, but nobody knows who your are or if your product is any good. The best way to find new clients is by using your connections. Ask your friends and family to talk to their friends and families. Start conversations with strangers to introduce your business. Talk to your accountant, lawyer, doctor, real estate agent, etc. and ask them to pass on your information to people who may need your product. This word-of-mouth marketing is the best way to find new clients.

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Of course, this is only a start. You will need to expand your client base beyond friends, family and colleagues. You will need a marketing plan to grow, but many traditional advertising mediums do not work well for small businesses. You probably do not have a professional copywriter or designer to stand out from your competition.

The best way to compete with businesses with larger advertising budgets is to not compete! Forget about trying to put together print, radio, inter,et, or tv ads. These mediums do not convert well enough for small businesses. You will spend thousands of dollars and potentially gain no new clients. Leave this type of advertising to the big players. So what should you do? Offer your product for free. If you plan on spending $1000 on advertising, why not offer $1000 of your product for free? This way, you know for sure that people are using your product. If you have a good product, many of these people will become return customers, and they will also tell their friends and family about your product. Just be sure to have plenty of business cards and encourage these people to spread the word.

Starting a business when you still have a day job

Many people have the dream of owning their own business. ..they long for a job that they will enjoy, make their own decisions, work the schedule they want, and end the days of working for a boss who doesn't appreciate their work. The problem is, most people are too busy working to be able to follow this dream. As the saying goes, "You'll never get rich working for someone else." Unfortunately, most people have bills to pay, so quitting their job to start a business is not a realistic option. The key is to work you day job and grow your business to the point that you are able to quit. Here are a few tips to make the dream of owing a business happen:

Get Business Loans quotes! FREE - from multiple vendors. No obligations. 1) Select a business model that will allow you to work a very flexible schedule...nights, weekends, or a business where you can start off working part-time. This will require a great deal of work in the beginning...you will be working two jobs until you get to the point where you business provides the income to allow you to quit your day job.

2) Get help - do you know somebody who does not work during the day? Perhaps your spouse, friend, or children have time during the day to take care of tasks while you are at work. Whether they visit clients, answer phone calls, take orders, or simply tend a retail store, these helpful people can ensure that the tasks that need to be done while you are at work at completed.

3) Find a partner - a partner with the flexibility to work during the day can allow you to continue working your day job until the business makes enough to allow you to leave. If you do work with a partner, be sure that you have a contract to deal with any unforeseen difficulties that may arise.

4) Just do it! Most people do not pursue their dream of starting a business due to laziness or a fear of failure. If you never start the business, you are 100% guaranteed to fail. Ask for a nickel from every person you talk to who dreams of starting a business but never do so, and I'm sure you'll have plenty of startup money to start your business!