The Business Builder 101

It’’s usually the first thing to go in a small business when times get tough.. The advertising budget.  If marketing wasn”t an effective way of getting customers to walk through your door (provided it’’s done correctly) then McDonalds, Coke, Nike wouldn”t spend billions on it annually to remind you about their products.

When you advertise, do you measure it’’s success? Do customers come in asking about something they”ve seen in your ad? A discount, a bundle only advertised? If it’’s working don”t stop.

If you have no clue if your advertising is effective start putting into place checks and balances.

If business is slow re-visit your target markets. Who are you selling to?  If 80% of your customers say for example come into your cafe, buy a coffee and sit and read the paper for an hour then you”re in serious trouble. Which markets are the best for your business? Which ones provide the highest margins and are easiest to convert into sales?

Change your advertising if after looking at your target markets you decided you need to change or if you are getting no results.

The last thing to do in a downturn is to discount. The discount comes straight off your bottom line.  A big sale with 50% off only shows how desperate you are for a sale.

What products and/or services make you money? This is important. If you don”t know how can you adjust your product range to get maximum profits?

The biggest weapon in a small business’’s arsenal is customer service. The personal touch only a small business can really provide.

In the above cafe example having coffee at lunch by itself may be a great item to promote as takeaway special. Then valuable lunchtime seats aren”t taken up with $3.80 coffee drinkers.

Do you have a sales budget? Without a yardstick you can”t reach any goal.

Keep stock under control. Figure out which items are slow moving. Are they a necessary item to stock?  Can you bundle them with another product?  Add value without discounting. This gives the perception of higher value but is cheaper to do.

Do you keep in contact with your past customers? If not start a database (check your obligations for collecting data under your countries privacy acts first) These people know you and will likely buy from you again. Send email or brochures when you have special offers.

Can your turnaround times be improved? Fast service or delivery is not often forgotten.  Improving efficiencies will save you money.

So the desire for starting a business online business is calling you. You have some great ideas; have a lot of enthusiasm your ready to start. You’re going to make a large amount of money and be your own boss. Well wait a minute regardless of the claims of how easy it is to get rich off the Internet. You will find starting an online business is no different than starting a business in the non virtual world. Maybe you need to consider some things first to make this profitable and mistake free.

When contemplating starting an online business you need to take an honest look at yourself. What are your skills? What kind of interests do you have? Many people stared their online business in the fields that they worked. A graphic artist could start a web design company or produce custom graphics. You will also want to think of the type of jobs you truly enjoy.

Do your homework to start your online business. Do not make the mistake of putting all your efforts, money and time into a service you want and try and find a market for it. You can not make people like your service or product. Instead find out what the consumer would like and then design a service or product to fit that need. Also just like a real world business there is a certain amount of risk. By doing your homework you can lessen that risk by finding something people will buy and for how much. This allows you adjust your costs to make sure of a profit.

You also need to study your competition. Find out what they are doing and what works or what doesn’t work. The more information that you have in regards to the market and your competition the better chance of success you will have.

Starting your online business you need to have a plan and follow it. What will it cost to start? Where will you get that money? If you are going to ask for a loan you will need to have a business plan to present to the loaning institution. It is a good idea to have a business plan even if you are funding your online business yourself. It will give you some set goals to look at.

To get your online business going you will need to make a time commitment and keep it. It will be difficult to keep a full time job and work on your new online business. You probably will not be able to accomplish that unless you set a specific time to work on it. Starting an online business and making it profitable enough for you to work full time on it does take some time.

You have done the required research, taken the time and made the commitment for your online business. You feel that now have a great product that the world wants and priced that they can afford and you make a profit. You have one more thing to consider marketing. Your customers need to be able to find your product so they can purchase it. This can be done online, offline, or a combination of them both. You will need to continually study what works and what doesn’t until you find what works for you the best. However, remember what works today, may today may not tomorrow and be able and willing to change your approach to marketing as the consumers dictate.

One of my old Tenants (a hairdresser) now does piercing. Both fall under the beauty category but what happens when a client decides to start screaming whilst their belly button is getting pierced? It’s done in a  little room with no roof that surely will put a dampner on any scalp massage in progress! One of the major things wrong with this business is that the shop front is very open. A full front of glass so you walk past and you can see everyone sitting in their chairs with hair in all states of unstyled and dripping wet to full rollers.
I don’t know about you, but when I get my hair cut I prefer not to sit in a glass box where everyone can see my messed up/washed/wet hair. I conveyed this to the Tenant when they first opened - hence why I only went there once. I offered to put up a false wall at the owners cost to provide some privacy. A year on and I think the wall may be on it’s way now.

Think about your business from your customer’s perspective. Would you like to sit exposed in a hair salon having a really bad hair day prior to being styled? To claim that no one screams when they are getting their body parts pierced is ludicrous.

Why is the Tenant going into another beauty stream? Why does any business owner diversify?  Generally because they aren’t making enough in what is supposed to be their “expertise”. What does a customer think when they see their local carpet shop begin selling ceramics? “Danger Will Robertson Danger!” The customer, if they have half a mind will immediately think the business is not going so well. Will that put faith in them to want to place a carpet order with you? It may be a bigger detriment your business than the small amount in sales gained by selling a completely unrelated item.

Moral of these stories? Don’t diversify just because you’re going out the door backwards.  Do what it is you’re supposed to do well. Figure out how you can provide value to your customers. How can you get them to walk in your door? I’ll be giving you a sneak preview of some of the tips and tricks from my e-book so stay tuned!.