New Year's Resolutions

Incubator,Entrepreneurship

You may have some personal new year's resolutions; do you have any resolutions for your business?

One item I'd wish every business owner would resolve is to take a bit of time each month and work out some basic statistics for the business: cost of goods, monthly gross sales, gross margin. These are the fundementals you have to know as long as you run your business. Thinking of taking on a new account? How will it affect your stats? (it could cost you more to obtain and service a large, low margin account than you can make on it...but how would you know if you don't track those types of numbers?)

When you resolve to do something, don't just say it: have a plan to achieve it. And by plan I don't mean like the business plan you worked up when you opened the business (and then stuck in a drawer the day you received a loan)...

If you want to track monthly sales, I would hope that is at hand. But since it is so easy to work day-to-day, you might not look at them. Worse, you might be asking yourself "How did I sell $X and still have no money in my pocket?" If you are not watching those numbers, no one else will also.

Internet Marketing book recommendations

incubator; entrepreneur; IT compliance

A good friend of mine, and IT compliance consultant, John Avellanet is managing director for Cerulean, LLC. John has been working on improvements to how he connects with his customers via his website.

He sent me a couple reviews of books on website marketing, and his comments were so clear - and trenchant - that I asked him to allow me to print them here for our readers. With his permission...

" Okay, from what I’ve seen so far here are the best two out there:

Susan Daffon and James Byrd’s "Web Business Success: The Entrepreneur’s Guide to Web Sites that Work"

What I like:  Excellent “base” resource with clear diagrams, very succinct and blunt advice on when to look for a web designer and when not to (plus what to look for and what the red flags are to make you run the other way), straightforward explanations of why to do one thing (e.g., use a white background for your site) and why not to – ALL explained in terms of presenting a professional image, making it easy on visitors and encouraging them to be comfortable with you…and thus buying your services or product.  Also, very focused on service / knowledge-based companies (not on small businesses selling widgets on-line).  Well worth at least 2-3 times its price.

What gave me pause:  There are about 3 areas where they slyly draw the reference to their own business – but frankly, if I weren’t actively hunting for that, I’m not sure I would’ve even noticed.  Also, they seem to have some slight biases toward different technologies and vendors NOT to use, but don’t really go into why.  However, not really a big deal and in comparison to other books that are just shameless self-promos, this book couldn’t rate any higher than a 1 on a 10-point self-promo scale (and is probably about a 0.5).

Tom Antion’s "The Ultimate Guide to Electronic Marketing for Small Business"

What I like:  This book is so full of good ideas and tips that – only halfway through the book – I can already tell you it will take me a good six months to put all the ones that I like (not all of them) into play.  Unbelievable resource, full of examples – both figures in the book and websites to go check out that exemplify what he’s discussing (good and bad).  Also a lot of comments throughout reminding the small business owner to not waste time thinking his/her site will be like the sites of the big boys – so here’s where you’ll get your biggest ROI instead.  I hate putting this book down knowing there are still more good ideas in it; and I hate picking it up knowing that my brain is already about to explode from the ideas I’ve read so far….  Probably worth at least 3-5 times its price.

What gave me pause:  Okay, some of the points he makes are seriously cheesy and I would never adopt, but that’s a personal thing.  Also, because it was written 3 ½ years ago, bits and pieces of it are out of date (frankly, if he wrote a 2nd edition, I’d pay $100 for it).  Just like the book above, some bits of self-promotion are in it, and definitely a bit higher on the self-promo scale (maybe a 1.5 or 2 out of 10) – but part of that is he only has so many clear examples to illustrate what he’s discussing that he has no choice but to point you to his sites or sites of his clients or his colleagues."

-----Thanks John for the great comments!--------

About Cerulean: "Cerulean specializes in helping executives simplify and streamline quality systems and regulatory compliance, minimize their risks and liability, lower costs and put in place intellectual property and trade secret theft protection.

We have particular expertise in GLP, GMP, ICH and GHTF biotech, pharmaceutical and medical device product development, laboratory compliance, startups, FDA Quality by Design, records management and IT compliance (including FDA Part 11, EU Annex 11 and HIPAA)."

Christmas time of year

incubator,Christmas

It is the Christmas season, and this is the time to be extra vigilant you do not fall into one of two traps for entrepreneurs:

1. Business is great: holiday shopping or end-of-year orders, either way, you are busy as can be. That means your regular customers and customer service might slip...if you are spending most of your time filling orders, who is paying attention to whether all these customers (new or existing) are getting the right level of service? This is a great time to impress them! Get a college student or temp to help fill orders - you watch the service and maybe deliver some product to a customer directly.

2. Business is lousy: whether because of the economy, or because your product or service is not in demand during the holidays. This means you might decide to enjoy the slow time with family, or check the internet - or read blogs! :) Even if this is off-season for your business, it is a great time to get organized. Clear out some clutter, or update some marketing to better position yourself as we go into the new year. And if it is slow, and you are scrambling, it is going to be harder to get into accounts, since they will be readying for the holidays as well.

Season's Greetings to you. Keep at it!

Great Software Blogs

incubator,software

One of the best ways to stay on top of hints, information and insight into running your own business is to track blogs in whatever industry you are in. With a RSS feed, you don't even need to actually check each site, you can just peruse the new links as they come in.

Since I come from a software background, here are some great blogs that I follow regularly:

Ack/Nak: when he writes on product management, his insights are very good, and he often has advice on what to do about it. His posts on design are very interesting as well, though lately he has not been writing much on the blog.

Paul Graham: Software entrepreneur, founder of Y Combinator. Each month he bosts a couple essays on topics ranging across the board. Usually very insightful on starting a business and a great writer, even if you disagree with whatever he is writing on.

Business of Software Network: The Business of Software conference spawned this network site. Contains all sorts of goodies for small software (particularly SAAS software). Also networking opportunities.

Joel on Software: If you work in software, you know Joel's site. Another great writer, and much like Paul Graham, even if you disagree, he gives good ideas and advice.

Rands in Repose: Great from the engineer/developer manager point of view. Really understands what is going on in your coder's head. If you are going to manage creative technical people, he is a great resource.

Cranky Product Manager: Humorous, but insightful postings on product management.

Over the next few weeks I will bring in some other sites, links or blogs I find useful.

Overcoming Discouragement

Incubator,entrepreneurship

Keeping positive - overcoming discouragement - is critical in all our careers, but especially for an entrepreneur. Most entrepreneurs are by their very nature optimists (otherwise why would they open their own business), but inevitably an account will go south, or a client won't pay, or something happens - maybe even in one's personal life - where you become discouraged.

There is no mantra, no easy way to just say "let's get back at it!". Instead, think to why you are doing this - why run your business. That perspective can help. It can also help to discuss with other entrepreneurs. You might find your situation is not uncommon. Just having peers can be very helpful.

For example, our Stillwater Entreprenuer Breakfast is this Thursday morning at 7:30. No cost, just time to meet with other business owners and commiserate over donuts and listen to a speaker.

Overcoming discouragement is not through a happy face calendar, but understanding why you are in the game in the first place.

Hitting your Target Market

incubator,target market

How well do you know your target market? If you are marketing your product or service to a particular customer - are you hitting that market?

Example: if you operate a guitar shop, I would assume you would want to target people who can afford to buy guitars. Most of them would be working during the day. Yet how often do you find that a guitar store opens at 10am and closes at 6pm. Think about that for a minute: the target market are people at work from 8-5 (and probably later). Consider Bob - played guitar in college, has a good job, driving home from a hard day one evening at 7pm - sees the local guitar shop: guess what - closed!

If you don't arrange your product/service/company to hit your target customers, how will you be able to stay in business?

Better to open the guitar store at 2pm (ready for the high school kids) and close at 10pm (hey, catch the musicians going off to their next gig).

Banker hours (or defining your hours to your customers) won't hold any longer - there are too many alternatives.

Don't miss your target market - it is hard enough to come by a new customer as it is!

Capital Before Starting

Incubator,startup

Ron Conway, best known for making very early and very lucrative bets on Google and PayPal, but he's also known as one of the most adventurous angels of Bubble 2.0, and has invested in 130 companies since 2005. His advice: “I would tell (entrepreneurs) to keep their day job until they got one year of funding, and if they couldn’t get that, then they’re not meant to start that company right now."

One year of funding - even for a local business will be a great help in this tough climate. If you start your business undercapitalized from the start, you are constantly on the edge for cashflow. If business starts slow, or you have a couple early accounts pay slow, you can find yourself out of business.

The point is: if the first year of a new business is the most dangerous for continued success, why not have sufficient resources for that first year?

"But Brad, I am going to get a loan (or have investors, etc)."If you have no capital, and you are unable to save funds sufficient to get started and through the first year of your business (and your business plan should show how you are going to get there!) - then why would a banker loan you the money? What have you shown him or her that would prove to them you would be a good loan risk?

Showing discipline is a great advantage in our tough economy, and also increases your credibility with others you need on your side.