Tag Archives: Marketing

Business Plans are worthless and a con

In talking to entrepreneurs the subject of business plans often comes up. While some have excellent plans, others haven’t and feel that business plans are a complete waste of time and just there to line the pockets of consultants.

I think the issue is that the phrase “business plan” has become over used and lost its meaning, conjuring up complicated and costly documents that have no real practical help. Just another form that has to be filled in.

However if you were to ask whether someone has a plan for their business, not a “business plan”, but simply do they have a plan for their business, then most will say yes of course.

Few would imply that they have no idea of what their business is selling, the market it is in and what its aspirations were, even if it’s not written down but just in their heads.

When communicating to potential Investors or applying for a loan however they will want it written down in order to decide whether it is something they are interested in and to filter all the many approaches they receive.

They can’t see or talk to everyone, they need to look at something to decide if the opportunity is in a suitable market area and has sufficient quality that they will then invest time in following up.

That has lead to the structure that we now call a Business Plan. But if you are not applying for funding is there any point in writing down the plan for your business?

Well yes. Because the discipline of having to write down your thoughts for the business is a great way to force you to put in place actions and ideas that will develop your business.

While it’s all in your head it is easy to be fooled that you have this grand plan. Start writing it down and get some detail into the woolly thoughts that you have.

If it is not for funding but only for you, it can be in any format and as long or short as you wish. An action list that goes beyond a few months is a business plan.

So is planning your business worthless? If applying for funding is it unreasonable for the potential Investor to ask for information about the business and its plans in writing so they can read it?

Other resources:
Writing business plans for business angels

Marketing plans

Joining the digital age – advice for bringing your business online

The way people shop has changed rapidly over the last few years. On-line shopping is booming and consumers are using the internet to research and shop for products more than ever before. But despite this massive shift in how consumers behave, many small retail businesses resist the move towards ecommerce.

This happens for a variety of reasons – for many people taking their business on-line means entering a realm they feel they know nothing about. People are afraid of the costs involved and that they won’t have the expertise to make it work. However, while traditional shops put off the challenge of learning about ecommerce, new SMEs are setting up on-line and taking a significant chunk of market share from long established businesses that used to dominate in their market.

If you own a small or independent retail business and you’ve not made the move online, this piece aims to demystify the process and give you the knowledge you need to feel confident and, hopefully, excited about joining the internet revolution.

Why take your business on-line?

If you are only operating off-line right now, chances are you are missing out on a lot of potential sales and you may even have lost previously loyal customers to competitors in the on-line sphere. Although it may seem daunting, getting your head around moving on-line could be the difference between your business surviving in the long run or gradually becoming unsustainable.

Once you learn the ropes of ecommerce some of the benefits you’ll enjoy include more sales, the ability to serve customers from all over the world, the capacity to engage more regularly with customers and reach a much wider pool of consumers, and the satisfaction of knowing that you’ve stayed at the forefront of the industry where you have built up your expertise.

What do you need to make an on-line business successful?

At its simplest, getting set up in ecommerce requires a website with a shop, the ability to store stock and post it securely to customers, and a good system to stay on top of orders and manage on-line customer service.

If you’ve been running a business off-line for some time you’ll be well aware of the importance of customer service. When you take the business on-line all the same principles apply – great customer service results in loyal customers. This means replying to emails or social media queries quickly, being reliable, offering secure payment and ensuring that customers receive their purchases in great condition and in the time frame you have promised.

One way to organise the running of an on-line business is to use a simple project management system like Trello. You can use this system to keep track of stock, orders and create to do lists.

Setting up a website is also much easier than you might think. There are lots of great services which allow you to build a website without any knowledge of coding. Generally you’ll pay a small fee each month which will allow you to host your website and run a shop from it with genuine ease. Examples include Wix and Big Cartel.

If you’d prefer, you can hire an expert to build a website from scratch for you. If you are going to do this, remember these two tips – choose someone who comes highly recommended to ensure that you’ll get exactly what you need from them, and make sure that you get a content management system (CMS) that will allow you to edit and update the website yourself once it’s finished. If you don’t have a good CMS you’ll have to pay the web developer every time you need to make a change on-site. That is a waste of money when you could be maintaining the website yourself very easily.

If you are having a website built from scratch you will still need to find a suitable payment solution for the shop. Choose a well-known provider such as Barclaycard who offer secure and reliable options for accepting payments which you can read about here.

Take it one step at a time

When you decide to take the plunge and open an online shop, set yourself a realistic time frame to get yourself up and running. Start by getting the website built and regularly updated before you add the shop. Don’t start taking orders until you know you can manage on-line sales in a timely and reliable way. The last thing you want is to mess up your first few orders and damage your reputation on-line.

Once you have the shop operational you can start working on marketing your online business through suitable channels including social media, SEO, paid search and display adverts.

Moving into ecommerce is an important step to keep up with the modern retail landscape, and although it may seem challenging it can be extremely rewarding and very worthwhile. Take as much advice as possible and do plenty of research about what your competitors are already doing on-line so you can learn from their mistakes and successes.

Why ideas don’t get investment.

Investment for a good idea

“I’ve got a great idea; it will make millions, guaranteed. I haven’t got the time myself to pursue it, so I’m looking for someone to take it on. Maybe I could licence the idea, or sell it. I don’t actually want much, I just want to see it made.

“No, I haven’t got round to doing a business plan, not sure where to start on that anyway, I’m more of an ideas person and of course I am a bit careful about telling anyone about it in case they steal the idea.”

Sound familiar to Investors? Any entrepreneur thinking “what’s wrong with wanting to sell an idea?”

Let me give 5 reasons why ideas don’t get investment:

Good ideas are 10 a penny. Everyone you meet in the street or bar, has a good idea.
By themselves ideas have no value. They are not rare, they are very common.
They gain value as you do work proving that an idea will practically and commercially succeed.
You should be able to contribute more to a venture than just the idea, your expertise, skills, background, experience and effort will give an Investor more confidence that the concept will work.
Ideas by themselves are high risk, the highest of risk in fact. Investors have plenty of choice where they can invest their money; they don’t need to take that high risk.

Right, so you’ve got a fantastic idea for a new product or service, it will take some investment to turn the idea into a business, what do you do?

Even with no funds you can do market research. Don’t ask your family or friends, talk to real potential customers, think through your target market (see How to market smarter ), construct a marketing plan. This all shows an Investor that the concept is likely to be viable.

Do work to move your idea forward. Build a prototype product or start a basic service, to prove the idea works in reality.

Get some sales. Even if just a few, or obtain some advance orders, or letters of intent to buy. This more than anything is the big difference between securing funding or not. Not every good idea is a commercial good idea. Showing that customers will hand over their hard earned cash moves the idea from fantasy into an investable business.

Get more customers – provide a better service than your competitors

customer service After writing the title of this piece I thought what more can I say? That’s it isn’t it? Provide a better service than your competitors and you will win business.

But maybe it’s worth thinking about this a bit deeper. No one actually sets out to deliberately provide a bad service and does it really matter that much?

Increasingly the difference between me choosing one supplier or another is their service. In today’s marketplace most prices are competitive. I can also easily compare prices on-line and I’m getting pretty good at negotiating discounts as well.

But you have to live with the product you buy a long time and if it’s a service you are buying, such as a telephone line, broadband ISP, or consultancy; the ease and quality of service can make your life pleasurable or absolute hell.

Two companies I enjoy dealing with are Amazon and John Lewis. I’ve never had any trouble returning goods with these companies and they have speedy delivery, so I continue to go back to them – even if sometimes their price is higher.

On the other hand who hasn’t been kept waiting ages on a telephone line while trying to get technical support from your Internet Service Provider?

Or had to deal with a call centre where you get passed from one automated menu to another, before talking to someone who clearly didn’t want to be there talking to you.

Large businesses can fall into this trap, because someone has done an efficiency study and calculated that the odd drop-out of customer is compensated by the lower cost of delivering service. Many large faceless organisations, such as Utility companies, and big corporations, just see such service as normal. The stock answer is “there are always complaining customers, but when you think that we deal with millions of people a year the number of complaints are very small”. Does that reassure you?

Smaller businesses may just have lost sight of the importance of service. Running around fire-fighting issues, having to do everything yourself, it can be hard to provide the level of service that you would like to. Whist understandable, it’s a road to disaster. Reputation is hard won and easily lost.

So what should you do?

Build ease of doing business, friendliness and going beyond the call of duty into your sales strategy and branding.

Design your systems for ease of customer interaction; IT systems, telephone handling, paperwork, bills, quotes – anything the customer has to deal with.

Own the problem. If a customer contacts someone at your company with an issue, that person should own the problem – even if the customer has rung the wrong department.

Make speedy delivery, speedy response, speedy interaction with your company an important factor in how your company operates. Customers are all busy people, the issue that they contacted you about is important to them and so they are impressed when you reply to an email or query within an hour, but not after days of waiting.

Forget the clichés “the customer is king”, “the customer is always right”, these are meaningless and are a fob to the whole concept, your staff will not respond to such trite. Instead make sure that your staff knows that how the customer perceives you is key to their success and the company’s business.

Get an attitude in place that one of the things which your company and the staff are proud of is the way they are viewed by customers, suppliers and others as being friendly and efficient.

Give staff the respect and trust to make judgement calls on what is needed to “do the right thing” for the customer, rather than “more than my jobs worth” to do anything out of the ordinary.

Once you have the right procedures in place and have built excellence of service into the core of the business, capitalise on it by using good testimonials in your literature and web site.

One of the reasons I like using Amazon is that apart from their service, I can read reviews of products and companies before buying. Checking reviews on-line is now an important shopping behaviour, so encourage your customers to leave good reviews anywhere they can. There are many opportunities to do so on-line, look for these and build your reputation.

I’ve worked in many corporations that have put measurements in place for customer satisfaction and even made that as part of the pay mechanism, but such measurements can always be massaged. None have worked as well as in companies where the ethos and self-image is all about quality.

Start with your own and your staffs perception of your brand as being one of excellence, ensure the systems allow you to deliver that quality and then customers will go out of their way to choose you rather than your competitors.

Why SEO means sales for your business website

Almost all businesses now days have to have a web site. Even if you don’t sell over the web, your customers will expect to be able to find you on it.

If they know your name and it’s fairly unique then you are likely to be found. That’s good, you can give your customers contact details, support information and reassure them that you have a web presence.

But what if you not only want to be found by people that know you, but also by new customers? Then you have to be found by the type of product or service that you sell. These in web terms are keywords.

Given that all of your competitors also want to be found for those terms, it’s not easy to get to the first page of Google (hardly anyone looks beyond the first page).

If, like me, you get continued spam from people claiming that they can get you on that first page, you’ll be pretty jaded by now. There are some good SEO (search engine optimisation) companies out there but they are difficult to identify from the poor ones and do tend to charge quite a bit.

Also, the good companies do not send out spam, I’d never respond to unsolicited SEO mails, but actually SEO is something that you can take control of yourself.

We used a tool that we down-loaded, it looked at the top ten websites for our keywords and worked out what it was that made those particular sites rank higher than others. We then altered our site to match the recommendations.

All the recent spam I’ve had on SEO reminded me that we’ve had questions on this before and have written a resource on the subject (along with a plug for the tool we used – well worth getting !). Have a look at How to get people to your business web site

How to market smarter.

Market segmentation I spent an enjoyable couple of days doing one-to-ones on business planning at a conference last week and the area that was most misunderstood was the need to define and understand your market.

It sounds simple, everyone of course understands their market don’t they, it’s obvious. The market is whoever will buy from us. We don’t want to restrict ourselves, so we will market to everyone.

There are actually a couple of problems with that; firstly to market to everyone you have to spend a lot of money. Then think about the messages that your marketing is going to give, to be applicable to everyone they have to be fairly general and bland.

This is where a well known but often ignored marketing technique comes in – market segmentation.

You may well have a product or service that could be bought by a great many people, but they will not all be alike. They may live in different geographies, be of different ages or gender, or have different expectations of the product.

The more you can focus your marketing effort the more cost effective your advertising is, instead of expensive adverts in large magazines to try and reach everyone, or GoogleAds covering lots of keywords, you can just pay for advertising in the specific media that your focused market reads.

Importantly also, the messages and benefits that you give will be targeted exactly to that group of people. It may be that your company, works both for corporate clients and private individuals, each will value different aspects of your offering.

A middle aged man will identify and be swayed by different messages about your product than a teenager. The more you can segment your market into different chunks, the more effective your advertising and marketing will be.

Finally it may lead you to changing how your product or service is packaged to be more attractive to each specific group, rather than a one-size fits all, that no one sees as relevant to them.

Learning from great Entrepreneurs

Questions for Business Angels

Last night I attended the keynote event of Global Entrepreneurship Week (GEW), yes it’s this week, how could you miss it? Sitting in a packed conference centre of the British Library, I looked around at the alert eager faces of budding Entrepreneurs and thought this has to be the future for Britain.

Tom Bewick, the CEO of Enterprise UK, who have organised GEW put the feeling into words “Make a job, don’t take a job”. This also fits nicely with the Government’s need to increase private sector employment to compensate for the coming job losses in the public sector.

Called “Question time for Entrepreneurs”, it followed the traditional format of a panel of eminent and famous figures asked questions by an audience hanging on their words of wisdom.

On the panel was Deborah Meaden, (Dragon’s Den), Cath Kidston (Cath Kidston Ltd), Brent Hoberman (Last Minute.com & Mydeco), Tom Bewick (Enterprise UK) and chaired by Adam Shaw (BBC’s Working Lunch).

As always, well organised by the British Library’s Business & IP Centre. However I left feeling a bit frustrated that the questions and responses were really just skipping round the edge of what most entrepreneurs wanted to hear about.

Most questions seemed to centre on the way that entrepreneurship could be fostered and at times the answers became a fraction obvious. “Should we encourage youngsters into being entrepreneurs?” Yes was the reply. “Are entrepreneurs born or can they be made?” Deborah Meaden thought they had to be born with the right characteristics. But Cath Kidston believed they could develop the skills.

Interesting intellectual issues, but I felt an opportunity was missed to have the practical questions answered by this famous group that would be on most entrepreneurs minds.

“How can I find funding?” “How do I get visibility for my fledgling company with little money for marketing or PR?” “What should I do to find customers?” These were barely covered.

So what nuggets did I pick out of the event?

Everyone agreed that government should assist companies to provide apprenticeships, or internships, which would give youngsters a kick-start in business life. At the moment it is left to individual companies and the quality and even whether the young person gets paid varies a great deal.

The best time to start a business is always right now. Do your research and business plan, but don’t wait forever.

Get the summary of your business plan succinct and hit the key points quickly. What is your business concept, what differentiates you, why will you make it work, how much do you need and what will you spend it on? The revenue and profit of the business and what does an Investor get out of it?

Deborah Meaden gets 200 plans a month (or was it a week) and now has to employ an assistant to sift through them. The Exec Summary is all important; unless that is right the rest of the plan never gets read. No fancy tricks, just a solid, thought out summary that ticks the boxes quickly.

Check the interests of who you are sending it to, not all Investors are interested in every market sector. Find out their background, Investors more often put their money into concepts they understand and are comfortable with.

If a plan is turned down, by a bank or an Investor, ask why. Learn from that. Also ask if they know of anyone else to approach.

Get a partner. This is one of the reasons I set up Company Partners, to help people find a business partner, so I was gratified that this came out. Even the famous entrepreneurs that we all know had partners. It may be that one took the lime-light, but the other was there with complementary skills, to bounce ideas off. It’s lonely by yourself.

Get good people around you. Choosing your first employees is difficult, but always get the best you can.

Contracts for partners and employees are needed, but it is much more about the relationship. That must be right.

Cath Kidston started her business part-time, while working to pay the bills and thought that was acceptable. But Deborah Meaden said: “As an Investor I want to see that the entrepreneur is fully committed” and wouldn’t invest unless the entrepreneur was working full-time on the project.

Finally, all felt that the most important characteristic of an entrepreneur was ambition and that you need to have a passion for what you did. I agree, you can teach many things, but you can’t put a fire in the belly unless it’s already there.

Getting sales – the single biggest issue for a small business – Part 2

Businessman waiting for sales

Last week I talked about having a simple sales & marketing plan for your business. It doesn’t have to be particularly fancy, but you should have bounced ideas around with your team (find someone to do this with if a sole trader) and written it down. The act of documenting it is important, clears up muddy thinking and gives you something to work with.

Given your product / service is competitive, you’ve ensured that it has unique qualities and should sell, the next thing is to have potential customers know about it (simple isn’t it). You tell them by using PR (see how to get free PR), marketing and advertising, so that they come to you (called “pull”). Then you also go to them, by direct sales techniques like mailshots or leaflets, telesales, salespersons’ appointments and exhibitions (called “push”).

You may be thinking “well that’s not rocket science” – and it isn’t, but most small businesses don’t lay out a plan for doing these simple activities.

Can all this be done for nothing? Probably not. The term “guerrilla marketing” became popular a few years ago to describe how you can obtain publicity by unconventional means using creativity rather than money. This is now largely taken over by the idea of viral marketing, where a low cost web video for example, can suddenly take off and make a product well known.

However, if you are going to grow a business, you are probably going to need to budget for marketing and sales expenses. It needn’t be a huge amount and the budget can start small and grow in line with increased revenues.

All of your efforts though will be wasted if you are aiming your messages to the wrong people. Not only wasted, but expensive. It is much more efficient to use a focused campaign to an exact audience. The cost of advertising alone will be much less if you are only taking out ads to a small precise group of potential customers for a product that they particularly want.

Some of you will know this as market segmentation and it is important. You need to understand exactly who your customers are and split them down to addressable groups. These groups may have slightly different aspects to them. They may have different ages, backgrounds, location and needs, which will allow you to tailor your marketing exactly to each group. Address first the easiest to win and use the revenues and testimonials from that to market to the next group.

In a blog you can only give so much information and I’ve probably reached that by now. The key message I’m giving is to get a sales and marketing plan laid out (see Essential marketing plan content). The very act of brainstorming the content and putting in place measurable actions will galvanise your sales activity. You’ll feel more enthusiastic and in control than ever before.

If by chance you missed it, here is a link to Part1.

Getting sales – the single biggest issue for a small business – Part 1

Waiting for sales

Hands up those who have more sales than they can handle? It does happen, but for most small businesses it is a constant battle to get customers.

You’ve got a good product or service; in fact you are probably very proud of the quality and cost effectiveness of your offering. But sales don’t seem to be coming in very fast. I hear this time and time again.

Occasionally when I look at what the business is selling, there are problems with the product, or poor customer service that over time results in less recommendations and repeat business. But most often it’s because no one knows about the company, or they are just being out sold by the competition.

So then I ask “let’s look at your sales & marketing plan”. There is usually either a silence, or protestations that the owner hasn’t the time to do such a thing. In fact most small businesses don’t have a plan, but instead place an occasional ad and go to the odd exhibition when they think of it.

Yet it needn’t take long to think through what you are going to do during the year to get better known and to achieve more sales.

A short session brainstorming ideas with colleagues / partners can quickly put the bones of a plan together.

Ideally it would initially address your basic identity (brand), what you want to be known for and what is unique about you (called the USP – unique selling proposition in the theory books). You may instinctively know that, but try putting it on paper and think it through.

Then, how are customers going to know about you? PR (public relations) isn’t just for the big boys, but it can be expensive. A typical minimum retainer for a PR firm to get you some visibility is around £1k a month and can be much more.

You have to choose wisely also, making sure that the PR company understands your market. I’ve generally been disappointed when I’ve seen the quality of PR that had done for companies.

As an alternative you can do your own free PR. It can be time consuming and that is a reason for using a carefully selected agency, but if you can’t afford an agency, don’t ignore PR, you can get some publicity very cheaply yourself. For our Company Partners members we’ve got a good resource describing how to do so “How to get free PR”

So what else should you be doing to get sales? I’ll look at that in Part 2.

Oh yes, my bit of sales…. Would a hands-on workshop, plus free business plan software and marketing tips help? Have a look at our next business plan workshop.

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