One of the interesting benefits of my job helping entrepreneurs is that lots of old friends get in touch with me.
That may sound strange to you, but what I mean is that people that I knew from "past" lives, like high school, college, old jobs, etc. constantly contact me.
Lots of them hear about what I do from mutual friends, and the next thing I know, I'm getting emails, phone calls, LinkedIn requests, Facebook messages and so on.
The contact me because they want to become successful entrepreneurs.
In fact, according to The Kauffman Institute, 500,000 new companies are conceived each month in the US alone.
It turns out, people that I have known in past lives, are overly represented in this group : )
But that's a good thing. It's great to reconnect, and I love helping entrepreneurs succeed.
The first questions most of these entrepreneurs asks me is often about developing their business plan.
Which is a good thing. Since the word has finally gotten around that developing your business plan is the first and most important thing that an entrepreneur must do.
But, as I learned, while developing their business plans is often the first thing they START, it often goes unfinished.
And from conversation after conversation, I've found this is because most people simply don't know what to include in their business plan.
As a result, it's really hard to put pen to paper.
It's like telling an artist to paint a picture when they haven't the foggiest idea what to paint.
Or worse yet, when they have multiple ideas in their head and try to get them all in the one painting.
And that is the key issue that plagues entrepreneurs when developing their plans -- trying to include too much information...trying to cram every conceivable aspect of their business, and every idea into their plan.
Rather, your business plan does NOT have to answer every question.
In fact, there are 2 questions that trump the rest. These questions are as follows:
1. Why is there a need for your business?
Mainly, you need to explain why customers need what you will be offering them. At the end of the day, it's your customers that will dictate your success.
2. Why will you succeed?
We all know that business ideas are a dime a dozen. What is it about your idea, about you as an entrepreneur, about your marketing plans, etc., that will enable you to succeed while other ventures fail.
At the end of the day, your business plan MUST answer these two questions clearly.
Sure, there are lots of other key points you need to make, but these two trump the rest.
One of the reasons I put together Growthink's Ultimate Business Plan Template was to guide entrepreneurs through creating their business plans quickly and easily.
One of the keys to its success is that it guides you through only the questions that matter, that you MUST answer in your plan.
And it avoids all the superfluous information that doesn't really matter (and which dramatically slows down the creation of your plan).
To download your copy of Growthink's Ultimate Business Plan Template, and finish your business plan in hours, and not months (or never), click here.
Last weekend, I took a class.
There was something I needed to learn how to do. And I woke up early on Sunday morning to learn it.
You'll probably think what I'm learning is sort of strange. Because in many ways it is.
What I'm learning how to do.... is to run.
Now, I've run many miles in my life. I was a college wrestler and part of staying in shape during and off-season was running.
But, after years and years of running, it has taken a toll on my feet, my knees and my back.
And a couple months ago, when I was vacationing in Florida, I met an interesting guy who told me about a new type of running called The Pose Method.
Now, I'm not going to get into what The POSE Method is (for those of you who are interested, go to http://www.posetech.com), but there are some things I'd like to share with you.
To begin, the gentleman who convinced me to take his POSE course did so by doing two things. First, he told me about the 200 mile race he ran. 200 miles - wow! that's really impressive. So, that gave me proof that the method works. Second, and more importantly to me, was that he spoke about The POSE Method with such amazing enthusiasm.
You just can't fake that kind of enthusiasm. He was such a believer and his beliefs were contagious.
So those are the two marketing lessons -- offer proof and sell with enthusiasm. At least if you want to sell me something.
The other key lesson in this story is that learning The POSE Method is HARD.
It's probably going to take me 7 to 10 months to learn it correctly. You see, I have to unlearn the way I've run for the past 30 years, and learn a very different way.
And, to tell you the truth, I'm not really enjoying it. When I run, I usually listen to my iPod and don't think at all about my technique.
Now, I'm 100% focused on technique and it's a bit frustrating as it's hard and I am constantly making mistakes.
But, and here's the key -- after I invest 7 or so months learning the new method, I'm going to reap the benefits for the rest of my life.
You see, there are 60 and 70 year olds running marathons and ultra-marathons (typically 100+ mile races) using The Pose Method.
And it should eliminate my foot, knee and lower back problems.
So, take a look at where you want to be in 1 year, 5 years, 10 years and beyond. And think about what skills you need to get there.
Attaining these skills is often hard work, and not always so fun, but they're critical to your long-term success and happiness.
(Below are some images of me running before and after I learned The Pose Method:)
This week, the 10th annual Rice University Business Plan Competition kicked off. Last year, winners took home $800,000 in funding.
This year, competition winners will take home $1 million in funding, including $385,000 that will go to the competition's winner.
Business plan competitions are one of many overlooked sources of funding for new and growing businesses.
If you are comfortable with your business plan, seek out local business plan competitions in order to raise capital (you will also meet a lot of quality people at these events who may become advisors, partners, employees, etc.).
Importantly business plan competitions are just one of 28 unique sources of funding presented in Growthink's Definitive Guide to Creative & Alternative Financing Sources.
As many successful entrepreneurs have learned, tapping creative and alternative funding sources is often the easiest and quickest way to raise capital. This is because they are less competitive (because they are less known) than traditional financing sources.
Download Growthink's Definitive Guide to Creative & Alternative Financing Sources today to find the funding sources you probably didn't even know existed.
Understanding your competitors and monitoring their activity is key to your success.
In fact, I often point out that if you have no competitors, you may not have a market. Meaning that if you are planning to launch a new product or service, a lack of competitors might mean that no demand exists for your product/service.
Oftentimes for new offerings, your competitors are "indirect competitors," meaning that they fulfill the customer's needs with a different type of product or service offering. Conversely, direct competitors are those who fulfill the same need with a similar type of product or service offering.
Regardless of whether your core competitors are direct or indirect, you should always keep an eye on what they are doing. Mainly, so you can learn from them. If your competitors are able to acquire customers more inexpensively than you, you have a problem. Likewise, if competitors are able to generate more customer lifetime value than you, you will be at a distinct competitive disadvantage.
In this regard, there are three free tools I want you to know about.
The first is ChangeDetection.com (http://www.changedetection.com/). ChangeDetection.com provides page change monitoring and notification services. It really couldn't be simpler. You simply type in your competitor's website addresses, and whenever it changes one of its web pages, you are immediately notified via email. Pretty cool. If one of your competitors changes its prices, or adds a new product or service, or decides to test new text to promote its benefits, etc., you are immediately notified.
The second cool tool is KeywordSpy.com (http://www.keywordspy.com/). KeywordSpy allows you to see how your competitors are marketing themselves online. Among other things, you can see the keywords that your competitors are advertising on, their estimate ad budgets, and what keywords they rank organically on. This analysis allows you to identify where your competitors are getting their best online traffic, so you can replicate it.
The final tool I want you to know about today is Compete.com (www.compete.com). There are two features of Compete.com that I really like. The first is that, using their "Compare Sites" tab, you can compare the traffic of up to 3 websites for a period of up to 2 years.
Using the "Site Profile" tab, you can see online traffic details of individual sites. Within the premium features of Site Profiling, you can see the demographic profile of site visitors and the sites that refer the most traffic to them.
This is really cool. To begin, knowing the demographic profile of your competitor's customers could dramatically help in your marketing efforts. Secondly, if you know the sites which refer the most traffic to your competitors, you can contact them and try to get links to your website included there too, so you can "steal" some of this traffic.
Really understanding your competitors and leveraging this understanding will improve your marketing and operations. Similarly, in your business plan, showing a comprehensive understanding of your direct and indirect competitors positions you as an expert in your market, which is very appealing to investors and lenders.
If you need help with the Competitive Analysis section, or any other section of your business plan, download Growthink's Ultimate Business Plan Template.
If you need help with your Internet Marketing efforts, and using the above tools to increase your profitability, download Growthink's Ultimate Internet Marketing System.
Long story short, last year, the American Recovery & Reinvestment Act dedicated a lot of money to supporting SBA loans.
And since the passage of the Act, the U.S. government has repeatedly increased its ante, guaranteeing more and more SBA loans.
According to National SBA Administrator Karen Mills, "thousands of small businesses across the country have taken advantage of these Recovery loan enhancements to get the capital they need during these tough economic times. The increased guarantee and reduced fees on SBA loans helped put more than $23 billion into the hands of small business owners and brought more than 1,100 lenders back to SBA loan programs."
That's $23 billion, with a "B."
Mills also said that the average weekly loan approvals by the SBA (as of April 2010) have increased by 86% compared to the weekly average before passage of the American Recovery & Reinvestment Act.
So, the time may be right to get an SBA loan to fund your new or existing business.
To access SBA and bank funding for your business, download Growthink's Step by Step Guide to Raising Capital From Banks and SBA Lenders.
Recently, I was unloading the dishwasher. I'm about half way through and came to a dish that just wasn't very clean. Then another one. And so on.
Since then, my wife and I have taken a bunch of steps to fix the problem (I'll tell you about those in a moment).
Then, this morning, I started thinking about all these steps, and noticed some interesting marketing lessons. I figured you'd find them valuable, so I wanted to share them with you.
Step 1: The first thing I did was go to the Internet to try to solve the problem myself. I Googled "dishwasher top rack not cleaning" since the dishes on the bottom seemed fine.
I read a couple forum posts on this, and realized I didn't have the technical skills to solve this on my own.
Lesson: Expect your customers to have some knowledge about your products or services. Note that this knowledge may not be accurate based on where they learned it (e.g., from a web forum post from Joey in Idaho).
Step 2: So, my wife called an appliance repair guy who she found by doing some local searches online.
Lesson: Make sure you (and not your competitors) are easily found online.
Step 3: The repair guy came, gave us a bill for $95.07 for showing up and diagnosing the problem. He said that it would cost about $300 to fix it, but that the dishwasher was installed in 1994 (16 year ago; well before we bought the house) and that it was probably a better bet to just buy a new one.
Lesson: The repair guy gave us advice that was good for us (don't do the repair, buy a new dishwasher) and bad for him (him losing out on the $300 charge). We decided to buy a new dishwasher. But, since he was honest and gave us good advice, we will use this repair guy again and definitely recommend him to others if ever asked. So, do the right thing now, even if you have to forego short-term profits, and you will get rewards later.
Step 4: I looked online for dishwashers. What I cared about in the purchase were the following: price, cleans well, time savings (i.e., don't need to rinse dishes before loading), looks nice (we wanted a stainless steel front), and is relatively quiet.
Lesson: not every customer cares about every feature. Many of the dishwashers promoted 9 different programs and cycles (like special cycles for glassware). My wife nor I have ever used these, so we didn't care too much about them.
Another lesson: I looked at customer reviews online to see what others said about the different dishwasher models. If you sell someone a product or service, you should follow-up with them to make sure they are satisfied (or to satisfy them if they are not satisfied). Because your customers may post their comments online (or offline) which will influence your future sales.
Step 5: I bought the dishwasher. I paid extra for installation and haul-away of my old dishwasher and bought a 3-year warranty.
Lesson: These add-on sales increased the total sales price by 24% and must have increased their profits by a lot too. And these upsells were things that I wanted. The lesson is that you must upsell your customers by offering them items that will better satisfy them.
Final lesson: My wife and I don't represent every shopper. Not every shopper goes online to try to solve a problem themselves or to compare products. Not every shopper doesn't care about certain product features. And not ever shopper is going to take your upsells.
But, make sure you figure out your main customer segments, think about how they will buy and make decisions, and create sales and marketing strategies that are in line with this.
On Monday, the U.S. Environmental Protection Agency (EPA) awarded $2.38 million to 34 small businesses to develop innovative, sustainable technologies to protect human health and the environment.
And the EPA is not alone. There are 25 other federal grant-making agencies that are funding new and existing businesses. These include the Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, and the Department of Energy among others.
And, on top of this, there are tons of state and local grants available to businesses.
The key negative with grant funding is that grants typically fund "projects" and not "companies." For example, a grant is often used to fund the project of developing a specific product or service. However, oftentimes that product can become the basis for a great company.
The key positive with grant funding is that you don't need to repay it, nor do you need to give up equity in your company for it. That's pretty cool.
I think that too few entrepreneurs know enough about grant funding and don't go after it.
To access grant funding for your business, download Growthink's Step-by-Step Guide to Raising Capital for Your Business from Grants.
I recently read about a smart tactic a Fortune 500 marketing manager used to increase sales by 10%.
I think you'll find it useful. And I think it's something you can implement right away to improve your sales. But what I'm even more excited to tell you about is what the manager did wrong. Which, when done right, should increase sales by even more, perhaps by 27%.
So, what did marketing manager, Brian J. Maynard, do when marketing his company's Jenn-Air and KitchenAid appliances?
He communicated, using statistics, how his products were superior. And his actions lifted sales and website traffic more than 10%.
"Consumers tell us that what they care about are the results -- ultimately how well the product cleans," Maynard says.
So, Maynard executed on the following plan:
Step 1: Conduct market research
First, his team conducted research to prove that its dishwashers outperformed the competition; it did so by 25%.
And to avoid criticism, they tested according to industry standards established by the Association of Home Appliance Manufacturers.
Step #2. Communicate results in consumer-friendly way
Rather than use jargon, or promote multiple findings from the research, he sited one statistic that was 1) easy to understand, and 2) most important to customers in their decision making process. This statistic was the fact that their appliances yielded 25% better results than the competition.
Step #3. Include the results within all the company's marketing messages
The "improved results by 25%" message was included in all Jenn-Air and KitchenAid marketing efforts including:
- Television advertising
- Search PPC and online display ads
- Website landing pages
- Print advertising
- Point-of-sale displays (e.g., stickers on machines in stores, in-store flyers & in-store banners)
The resulting 10% increase in sales makes sense, doesn't it?
By PROVING, using statistics, that their products were better, and by marketing this improvement in multiple venues, sales increased. All very logical.
So, clearly, if you can conduct research to prove that your products or services are superior, do so. And then tell the world about it.
But, I want you to correct what Maynard did wrong.
He failed to leverage the Law of Specificity which states that specificity encourages believability and credibility.
Specifically, Maynard stated that his products were "25%" better. If he would have said "24.7%" better, the results would have seemed more credible and believable to his target customers. As a result, I expect that sales would have jumped significantly more.
One great example of specificity is Ivory soap, which claims itself to be "99 44/100% pure." Not 99%. Not 100%. By being extremely specific, Ivory's claims are more believable.
So get specific.
FreshPlanet just announced that it raised $1.5 million in Series A funding.
The company creates "Fun games for smart people."
I'm not wowed by any stretch by FreshPlanet. Just another video game company in my book.
But I included it here for just that reason. FreshPlanet is not some ultra-unique product or company. It's just two successful entrepreneurs trying to improve on products in an established industry.
And by putting together the right strategy and plan, and knocking on the right doors, they raised $1.5 million from three individual angel investors and one early-stage venture capital fund.
For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing. The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash. Your Series A round is typically the first series of stock issued after common stock (which is typically issued and/or sold to company founders, employees, friends and family, and initial angel investors).
If seeking angel funding: Download Growthink's Step-by-Step Guide to Raising Capital from Angel Investors.
If seeking venture capital: Download Growthink's Step-By-Step Guide to Raising Venture Capital.
A while back I started reading a lot of articles on resume writing.
No, I'm not looking for a new job.
But, I realized the similarities between resumes and business plans.
A resume is used to convince a prospective employer that you might be the right job candidate, and that they should invest the time to meet with you to learn more.
Similarly, a business plan is used to convince an investor or lender that you might be the right funding candidate, and that they should invest the time to meet with you to learn more.
(Note that there is a key difference between resumes and business plans. Mainly your business plan also has critical value in terms of plotting your strategy. But when used to convince outsiders (investors, advisors, partners, employees, etc.) to join or fund the company, plans and resumes serve a similar marketing function.)
Interestingly, HotJobs recently developed an article revealing the "10 Boilerplate Phrases that Kill Your Resume." They are as follows:
• Results-oriented professional
• Cross-functional teams
• More than [x] years of progressively responsible experience
• Superior (or excellent) communication skills
• Strong work ethic
• Met or exceeded expectations
• Proven track record of success
• Works well with all levels of staff
• Team player
• Bottom-line orientation
Moving back to business plans, I have often heard investors and lenders complaining about similar phrases in plans such as "proven management team," "first mover advantage," and "dominate competition."
The problem with these generic phrases in both resumes and business plans is that, by themselves, these phrases don't show whether the person or venture is really unique (which is what both employers and investors/lenders want).
Now I'm not saying that you need to avoid these phrases.
Rather, you need to clarify these phrases.
If you have a "proven management team," then you need to state why. For example, maybe one management team member formerly ran a successful company, or another formerly increased sales by 3 times at their last company, etc.
When presented to people outside yourself or your company, your resume or business plans are marketing documents. They are used to convince others to invest time towards hopefully hiring you or investing in your company. In order to be successful, be sure to show how you and/or your venture is unique, and whenever possible, provide specific proof behind your arguments.
If you have not completed your business plan, or are dissatisfied with the results, download Growthink's Ultimate Business Plan Template. Our Template will help you quickly, easily and expertly complete your business plan: http://www.growthink.com/products/business-plan-template