Search Ranking Tips for Small Businesses
In keeping with the website optimization theme we’ve had this week, here’s Alex McArthur, Vice President of Search Strategies at OrangeSoda, with some simple yet effective tips to get your business ranking better in the search engines.
Search Ranking Tips for Small Businesses
Another energy drink breakfast after a late night of paper work. The new hire didn’t show up and you’ve got to put off an important meeting to run the store. Oh, and you can’t seem to get over how much you spent on your website that doesn’t generate business. Sound familiar? With all of the things that must be juggled to keep a business profitable you deserve some free advice that will help out your online marketing campaign. We’ve put together a few simple tips to help out any small business with search marketing.
1) Revisit Keywords
So a few years ago when online advertising was getting big you learned about the whole keyword thing, setup your paid search campaign and crammed all your focus keywords on to your homepage. You’re done with keywords, right? The truth is that you should review them often. Trends change and search is continually evolving. For a small business it’s important to review keywords at least monthly with the Google’s keyword tool or another keyword tool of your choice. It’s vital that you know what people are looking for online in regards to your industry.
2) Get in the 10-Pack
No, I’m not advising the consumption of alcohol on the job. The 10-pack is how many refer to Google Maps listings that show up in the normal Google Results (see image below). If you run a business that has a storefront this is the first place to promote your business online. Local search has some of the highest converting traffic and could get your phone ringing in no time.
3) Revisit your dying blog
I know. It’s hard to keep up with your blog. The only way to make your blog successful is to put thought into it and stick to routine. Here are a few blogging tips that will provide the most search engine value:
a) Write good, compelling copy and publish it on your blog. Don’t forget to include a clear call to action.
b) Cross link any related content you mention in your post that may reside on another page of your site. Make sure to use keywords in your anchor text, not “click here” or “read more”.
c) Promote your post through social media (facebook, relevant industry news sites, etc.)
d) Research a new topic for you next post based off of your keyword research or hot industry news. And schedule a time to write it on your calendar.
About Alex McArthur
Alex McArthur is the Vice President of Search Strategies at OrangeSoda, an online marketing company that serves small businesses. OrangeSoda is a leading Internet Marketing company specializing in SEO and pay per click management.
Photo Credit: dullhunk
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Your Keyword List: The Most Important List You’ll Ever Make
Yesterday we talked about the importance of your business having a web presence, and making sure your website is optimized for search engines. A big piece of optimization is having the right keywords, and today Corey Perlman, author of eBoot Camp: Proven Internet Marketing Techniques to Grow Your Business
The Most Important List You’ll Ever Make
(For the purpose of this article, when I refer to Google, I am also referring to other major search engines such as Yahoo, MSN and ASK.)
How does Google decide where to rank your Web site on any given search query? Well, the exact formula is as top secret as the ingredients that made up my diet coke I had with lunch.
But Google is very open about the criteria they use to evaluate a Web site and today’s topic covers one of the most important factors in improving your Web site’s overall Google ranking!
Feed the Googlebot
Late at night, when we are fast asleep, Google’s spider (named “Googlebot”) goes to work. It creeps from Web site to Web site in search for words to feed on.
It doesn’t like the taste of common filler words like a, the, to, and, it, but, etc. Instead, the spider is looking for unique words that are specific to the site it’s searching and explains exactly what that Web site is all about.
These specific words are called keywords. The spider returns this information to Google so it can produce relevant Web sites when these certain words are searched.
Help Google Help You
Our goal is to help Googlebot find the words WE WANT him to find. The more control we have over our keywords, the more control we have over how we rank on Google.
As Google evaluates a site, they are not only looking for specific keywords, but how frequently the keywords are used.
They figure the more a particular word is used, the more relevant it is to the overall purpose of that Web site. And so if you search the word “business” in Google’s search engine, then Google will provide you with Web sites that include that word in the content.
Now most of us don’t just use one word when doing a Google search, we type in phrases. So, again, Google will look to match as many of the words that you searched (minus the filler words) with the words found on the Web sites they provide for you.
For Example
Take a look at the image below. I searched the phrase “hip hop dance classes” in Google and this Web site was one of the top sites that came back in my search results. Notice all of the times they have the same words I searched for repeated in the homepage content.
One other thing to note on the example above is that the sentences still make logical sense. You don’t want to just add a keyword to gain credit with the search engines. That can frustrate people visiting your site and the search engines frown upon it anyway.
Your Mission, If you Choose to Accept It
So let’s get to your mission at hand: to figure out what your top keyword phrases are and then sprinkle them throughout your Web site content.
Simple Keyword Selection Exercise
Here’s a great exercise to figure out what keyword phrases you want to target. Go out and talk with total strangers; ask them to tell you what they’d type in Google if they were looking for a business like yours.
What you’ll find is they will offer words and phrases that might surprise you and get you thinking differently about what your keyword list should be. And by all means listen to them!
Input from Somebody Other Than Me
When we try and come up with our own keyword phrases, we put ourselves at a disadvantage because we live and breathe our business. For example, I’m in the Internet marketing business. I talk about this stuff all the time.
If I were to think of what some of my keywords are, I might be inclined to use words like search engine optimization, html, web site usability, and other industry specific terms. But that’s not what people are going to type in Google to find me!
Real Life Example
Another example that I mention in my book is about my friend Ray who owns Ray’s Shoes in Seattle Washington. When I asked Ray what phrase he’d most like to come up #1 on Google, he quickly responded, “that’s easy, ‘Ray’s Shoes’!”
But Ray, if someone is searching specifically for you, don’t you think they’ll find you one way or another?
What about the stranger who is just looking for a shoe store? Isn’t that the person you are targeting on Google? Phrases like ‘Seattle shoe store’ and ‘Seattle Wash Shoes’ are the phrases Ray ended up targeting.
So when coming up with your most critical keyword phrases, you want to think about the person who knows nothing about you or your business. All you know is they need the product or service you provide. They hop on their computer, go to Google and they type in…what? Figure that out and you are well on your way to creating your perfect keyword list.
Things to Remember
- Target about three keyword phrases to focus on
- Make the phrases about three to five words
- If you have a brick and mortar store, make sure to use your city and state in one or more of your keyword phrases. And try and use it in your homepage content exactly the way it is often written. For example, we usually write Michigan as “mi”
- Just because your Web site has the exact phrase that a person searched for on Google, it doesn’t guarantee you will rank #1 or even on the first page. Their algorithm is robust and this is just one of many things Google evaluates when deciding where to rank your site
Things to Avoid
- Don’t overdue the amount of times you add a keyword to your Web site. You want your keyword density ratio to fall between 3-9%. To figure this ratio out for any word on your site, simply divide the amount of times you use the word against all of the words on your page. So if you use the word ‘homes’ 9 times and you have 100 words on your page, then you have a ratio of 9%. Any higher than 10% and it might look like you are intentionally adding the word to trick the search engines. They don’t like that.
- Here’s a link that will analyze any page on your site for you and tell you the keyword density ratio for every word. Try it out!
- Keyword Tool
Take Action
- Decide on six to eight critical keywords for your business. You can use them together to make search phrases.
- Increase the amount of times they appear on your Web site.
- Make sure your sentences still make sense and you don’t lose any of the quality of your content.
About the Author
Corey Perlman is the President of eBoot Camp, Inc., an education company that provides business owners with the knowledge and skills to effectively market their business on the Web. Corey’s book, eBoot Camp: Proven Internet Marketing Techniques to Grow Your Business, hit #1 on the Amazon.com bestseller’s list. To learn more about Corey or to pick up a copy of his new book, go to eBootcamp Book
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Technology, New Media, and Your Business
I’m happy to have Robert Tuchman, author of Young Guns: The Fearless Entrepreneur’s Guide to Chasing Your Dreams and Breaking Out on Your Own
The 1990s are over. No longer do we exchange 800 numbers—now, only URLs. URLs are the 800 numbers of the 1900s. You have got to work through the Internet—there is no way to step on it or go around it.
You Need a Web Presence
The first step is to build a website for your company. Your website must display the concept of who you are to the external world—and it has to compel them to come inside.
When building a website, take advantage of those looking for jobs in our poor economy: hire a young, driven web designer who is looking for a shot at success. All you need is a clear sense of the image and feel you want your site to convey to said designer. Once the site is established, keep it updated and always look to improve it.
A well done website can make your five-cent lemonade stand look like Country Time. Emphasize the fact that you can offer better services than some of your competitors (who are probably extremely large, impersonal corporations).
Web Communication Strategy
Building a website is an absolute must—as you cannot be taken seriously without it—but it should not suck up all the energy and resources that you have. Today’s amazing capacity for communication makes extraordinary new things possible for you and your business.
If you concept is solid, your timing is right, and your commitment to your core idea is unshakeable, you can make big things happen with your website, and make them happen quickly. But as with any other communications medium available to your business—free or paid—the message has to be crafted carefully, the resources invested wisely, and the potential and actual payoff evaluated closely.
Focused Communication with Customers
Your customers are, right now, communicating and connecting in ways that you could not possibly have imagined a few years ago. If you want to sell to them, find out what they are doing.
Make connections with your prospects and customers, both in person and online! Find out what they are doing in the virtual world—tap into their world of Blackberries, iPods, and any other realms that seem appropriate. Listen and learn all that you can about what is going on. By doing this you can identify powerful new ways to launch and promote your business and to target its message.
Don’t Forget Social Media
Check out Facebook, Twitter, MySpace, Linked In and other virtual networking sites. Make a profile!
Be conscientious with the information you display and the person you portray. Making an appealing profile on a popular a site as Facebook and Twitter can facilitate thousands of connections, and thus potential business opportunities.
Do this after your company website is complete (–now you can set up a system of link-backs!).
The Power of SEO
Once your website is established, and the concept solidified, you must make sure that your site is ranked at the top of the search engines of Google and Yahoo.
Search Engine Optimization (SEO) is not an exact science—but there are already thousands of companies that are willing to bring you to the top of Google and Yahoo.
Make sure your website contains SEO-friendly text and link it with buying strategies that will help your site’s ranking.
Leveraging New Media
New ideas you come up with involving new media may not require much capital. For example, writing a weekly article for an e-newsletter costs nothing—and is extraordinarily beneficial when distributed to those in your potential customer base.
In addition to working up the appeal of your own corporation, you can also gain inside information on your competitors with the Internet—start with your competitors’ own websites.
Then, check out their Facebook and Twitter pages—see what they are offering to their potential clients. This will give you an upper hand when negotiating with someone choosing between your corporation and another.
Understand Generational Differences
Finally, know that your future customer base will include a younger generation who finds it in their second nature to use the Internet and e-mail.
It is essential that you understand that their first instinct is to email, rather than meet in person or talk on the phone. Make an effort to reach them via the medium they are most comfortable with—as they are, in fact, your future customers.
In Closing
The Internet is so sufficiently advanced that it seems to be nearly indistinguishable from magic. But do not be weary. The transport of word, of mail, of human voice, and of shining image—in this century, as in last, our greatest accomplishments still have the sole aim of bringing people together in community. The Internet is the means to bring people, communities, and corporations together now.
Robert Tuchman is the founder and president of Manhattan-based TSE Sports & Entertainment . He has been quoted as a leading authority in sports business by publications including USA Today, The New York Times and BusinessWeek.
Robert also is the author of Young Guns: The Fearless Entrepreneur’s Guide to Chasing Your Dreams and Breaking Out on Your Own
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The Small Things are the Big Things in Business
Sometimes in business we assume it’s the big things that get us noticed. The “go big, or go home” mentality prevails and unless we have the capability to go big, we believe we are stuck with going home and not getting our business and brands out there.
The Story
A couple of days ago I was contacted by Matt Heinz of Heinz Marketing, whom I didn’t know prior to his first email to me. He paid me a compliment about Small Biz Bee and said he had a free report called “Six Essential Social Media Tools for Every Small Business (PDF)” and thought readers of Small Biz Bee may be interested in it.
I took a quick read over it, and he was right. It was exactly the kind of information I like sharing, and I told Matt I’d send it out to the
Twitter followers that day, which I did. Start to finish took about 10 minutes of my time.
That same day Matt asked if he could add me to his contact list, which I happily did since he had just provided such a nice resource for those who follow me on Twitter.
Two days go by and I get an envelope in the mail, from you guessed it, Heinz Marketing. Now I’m thinking, “oh great…what kind of list did I get on?”.
When I opened the envelope here is what it contained:
Not a pitch to do business with him, or an offer for 20% off his services – nothing like that.
Just a business card, a drink coaster (at least I think it’s a coaster Matt – it’s nice, and that’s what I’ll be using it for), and the piece of the mailing that impressed me the most:
A hand written note which read: “Matt, Thanks for the Retweet! Best of luck in the rest of 2009 & beyond. Cheers, Matt”
Hands down the best thank you for a simple retweet I’ve ever received.
The Lesson
Matt obviously understands it’s the little things that get you noticed. It’s the unexpected, small things, that can have a big impact on potential customers.
It doesn’t have to be ground breaking, or earth shattering to work. And if you don’t have the budget for a custom made drink coaster, don’t think you can’t do this same thing with almost no budget.
The next time someone helps you out in a small way, make a big deal out of it. Send them a hand written card, say thanks, don’t try to sell them anything – this is what gets you noticed, gets people talking, and eventually gets you business.
If you got something like this, who would you think of the next time you needed the service they offer? Be that kind of business.
Front page photo credit: laurenatclemson
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Is Social Media Marketing Right for Your Business? Consider This
Still on the fence about whether or not marketing with social media has a place in your business?
Before you write it off, or jump in with both feet, here’s some interesting statistics you should consider.
Social Media Marketing Statistics
- 78% of 26,486 say consumer recommendations are the most credible form of advertising according to a global Nielsen survey
- Online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. JupiterResearch, March 2007
- 84% said they would trust user reviews over a critic. Marketing Sherpa, July 2007
- 78% of consumers trust the advice of other consumers. Neilsen “Trust in Advertising Study”, 2007
- Social networks are the most popular sites for 18-24 year old age group – besting search engines, email, and even *cringe* porn. Time, 2008
Still Not Convinced?
Here’s some more stats to think about before you decide if adding social media marketing to your mix is right for your business. I think you’ll come to the same conclusion I have – but see for yourself.
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Stop! Don’t Spend One Advertising Dollar Until You Read This
Don’t spend one single dollar on advertising until you know your target customer, inside and out, top to bottom. Period, end of discussion. Why draw a hard line on this?
Precision Trumps Plentiful Marketing
Too often businesses use the shotgun approach to marketing, and in this economy that’s wasted money. Sure if you blast off a bunch of advertising you’re bound to hit something, but how much ammo did you waste in the process?
Right now we probably don’t have the marketing budgets to try stuff out, see what works, and throw money around hoping to hit a buyer.
Wouldn’t it be better to know your target customer so well you can then advertise specifically to them – the people most likely to buy your stuff? I think so. You’ll get more sales with less money, and an overall higher ROI for your efforts if you are precise in your marketing efforts, not just plentiful.
Exercise
Imagine your perfect customer. Think about every single element of the perfect person to buy what you sell. Then answer the following
- Where do they live?
- What do they do for a living?
- How much do they earn?
- Do they have children?
- Did they go to college?
- Have a particular educational background?
- What do they do for fun?
- Who are their friends?
- Who are their influencers?
- What matters to them?
- What do they value?
- What do they want?
- What do they need?
Once you have a crystal clear picture of who your perfect customer is, you can go to the places they are most likely to see your advertising.
Pay Attention (For What Not To Do)
In the next week pay attention to what kinds of advertising you are seeing, and where. You’ll be surprised how often you’ll see the shotgun approach being used, even by the “big guys”. This won’t be you.
The random ad for eyebrow waxing on gardening website, the flier on your door to refinance when you live in an apartment, or the commercial midway through your favorite episode of “Golden Girls” for Budweiser are all examples of using a shotgun approach to advertising. Sure they may accidentally hit on someone interested in an ice cold Bud who also watches “Golden Girls”, but it’s also an inefficient way to go about things.
Be cognizant of this when you are rolling out advertising. If you can’t explain exactly what demographic and target market you hope to reach with your ads, put your wallet back in your pants.
Not Just Who, But How
Also think about how your customer likes to be marketed to – don’t send brochures to "on line" people, radio ads are lost if your target customer subscribes to XM Radio, and if your target customer values outdoor activities how much sense does a commercial make?
Get the "how" right and you’ll be saving yourself some money, and getting directly in front of those most likely to buy what you’re selling. Tailor your message to what you know about them, what they value, and what the benefit of your product is to them. Most of all be consistent, both in message and in frequency.
Put the Time In
Do this exercise and you’ll be giving yourself, and your limited marketing dollars, a chance to really work. Without a lot of money you need to be selective, don’t use a shotgun approach hoping something will resonate with your target audience, put time into knowing them before you spend a dime.
Photo Credit: sk8geek
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A Chance to Win $20,000 for your Business
Beginning Monday, June 22nd, small business owners will have one week to submit a question to Small Business Yahoo! Answers Pro, Kevin Salwen, former National Small Business Editor for the Wall Street Journal online at http://smallbusinessanswers.yahoo.com/.
If Kevin chooses to answer your question, you will have the chance to win the $20,000 prize. The winner will also have the chance to participate in a one-on-one interview with a lead Yahoo! Small Business Expert and have their business featured on the Yahoo! Answers Center.
Additionally, small business owners have access to resources from Yahoo’s Small Business Answer sites and Bank of America’s Small Business Online Community. For more information, see below.
- Yahoo’s Small Business Answers center is a great resource for small business owners, as they can visit the site to learn about a variety of topics through expert articles and previously posted Q&As.
- Bank of America’s Small Business Online Community is a free and open forum available to all small business owners where users can network, share, learn and exchange business ideas in real time.
Running a small business is hard. This contest is easy. You get a chance to win $20k, a great answer to your question, and some free PR, all for a couple minutes of your time.
Let’s get a Small Biz Bee reader to win this thing – Good Luck.
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Overcoming Fear, Will You Take the First Step?
Just how much does fear limit what we think we can do? I’d guess it’s the number one reason so many of us have said, “I’ll start that business – someday”. It has nothing to do with preparedness, it’s a fear of the unknown, fear of change, and ultimately fear of failing that keep so many people on the sidelines of their life.
Today I’m happy to have a young man named Josten, who blogs at Positivewayoflife.com, share his thoughts on overcoming fear.
Overcoming Fear Has Everything to do With You
If you are wondering how to overcome fear it is not that hard to do. I’ve overcame many different types of fears. Fear of failing, fear of not being as good as the next person. Mainly any type of fear you can think of.
My fear first came when I was younger trying to live up to standards I believed where set for me. So as anyone would do i started to try and live up to them. By doing what I believed was right.
As I got older I had came across skateboarding which I fell in love with instantly. Everyday doing that I truly found that I had no need to be filled with fear. Doing what I enjoyed doing each day and not what my parents wanted. By no means am I saying doing things which your parents do not want you to do is right.
I broke the fear cycle at another level by changing my attitude. Daily I look at the positive to circumstances. I read self improvement books, watch videos, and listen to audio as well.
You cannot overcome fear unless you are willing to take the first step to doing something you are afraid of doing. Stop living in your little bubble that you’ve created. Pop the bubble and live the life you’ve always dreamed of. Stop doing what you hate and do what you love there is no excuse.
yours truly,
Josten Dooley
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Photo Credit: Jimee, Jackie, Tom & Asha
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10 Business Lessons Learned
Last week we went into great detail about some of the things you should think about when deciding to start your own business.
The last post of the series was 10 Early Signs Your Business is Heading for Danger, and How to Avoid It, which was essentially a laundry list of things I’ve done wrong over the years and how you can avoid them.
More Business Lessons Learned
In sticking with that theme a little while longer, here’s another great list of 10 business lessons learned. Some of my favorites from the presentation include:
1. Differentiate yourself – like you differentiate your product
2. Business is about cycles (and luck)
3. You can’t be a great leader unless you’ve been through a crisis
4. Some of your best learning will come from your worst boss
5. Hire people different than you, and capable in many more things
I highly recommend you check out the presentation for the other 5 business lessons learned.
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10 Reasons Why Your Business Should be Using Twitter
With Dell’s recent announcement of making $3,000,000 using Twitter your business should be considering it as a viable sales option.
However, if that kind of money isn’t enough to convince you to start using the micro blogging service for your business, here’s 10 more reasons to get on board.
#1 Gain Exposure
Twitter is a great way to gain exposure for your business, product, or service.
You’ll be interacting with thousands of people who have yet to discover you, and what you do.
Imagine being able to tell 1000, 5000, 20000 people or more what you do, and all at one time…with Twitter you can.
#2 Build Trust
The more people interact with you, see what your character is made of, the more they will trust you.
Getting to know the human side of your business is a great way to build trust in yourself, your brand, and your business.
#3 Generate Leads
There are literally millions of people using Twitter day in and day out…some of them are bound to be interested in what you do.
Twitter offers an opportunity to expose them to your business, and generate interest in what it is you sell.
#4 Drive Traffic
As you build trust and community, you can occasionally send your followers links back to your site, promotion, or offer.
If done correctly, Twitter can drive hundreds of hits a day to your website. Now that’s a good thing!
#5 Provide Stellar Customer Service
Some of the biggest brands in the world have figured out a very powerful aspect of Twitter, and that is in providing stellar customer service through the medium.
Since you have access to real time communications you can do immediate service recovery, and turn someone’s frown upside down.
#6 Expand Your Network
You’ll be interacting with a diverse group of people on Twitter, more diverse than you could possibly hope to interact with in the offline world. This is an advantage to growing your network, and getting many different perspectives.
#7 Get Feedback
Twitter is a real time conversation and as such it provides a real time mechanism for getting feedback. Bouncing questions off your followers asking for their ideas and suggestions is a gold mine worth tapping into.
#8 Market Research
Using the search functions within Twitter there is an unprecedented opportunity to do market research as it’s unfolding.
You’ll be able to key in on what people are looking for, what they think of certain products and services, and what they would consider buying.
#9 Testimonial Tool
Twitter is a great way to get testimonials about what it is you do.
The viral nature of Twitter makes the best of these testimonials spread like wild fire, and reinforce the idea that you don’t suck – instant social proof!
#10 Build Authority
As you become a trusted friend to your community you will undoubtedly build authority.
The benefits to being the authority on a subject are vast, not the least of which higher conversions, more pricing power, and higher customer satisfaction
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Making $2,000,000 on Twitter Look Easy
Still think Twitter can’t be used effectively for your business? Think again.
@DellOutlet has certainly figured out a way to turn 140 characters into real money, to the tune of $2,000,000 in sales so far.
Dell posted on their blog yesterday:
We’ve surpassed $2 million in revenue in terms of Dell Outlet sales, but we’re also seeing that it’s driving interest in new product as well. We’re seeing people come from @DellOutlet on Twitter into the Dell.com/outlet site, and then ultimately decide to purchase a new system from elsewhere on Dell.com. If we factor those new system purchases that come from @DellOutlet, we’re actually eclipsed $3 million in overall sales.
That’s $3,000,000 dollars by leveraging social media, and Twitter, to work as part of their business model.
@DellOutlet has around 600,000 followers, and Tweets out deals to these folks on a regular basis. But a recent look at their Twitter stream shows, promotion is not all they’re about.
Dell is using Twitter as a way to interact with their customers, provide service, value, and build community. Heck, they even take part in #FollowFriday, where Twitter users suggest other’s that are worth following. Taking the spotlight off of Dell, and putting it back on their community has been a lucrative proposition.
If all they were doing is selling, I’m not sure they would have seen these kinds of numbers, in regards to sales, so quickly. They’ve gone to $2,000,000 million in Twitter sales in 1/3 of the time it took them to get to $1,000,000
They are using the medium as a way to connect with their consumer, not by building a sales funnel, but by building a following.
If you are looking to use Twitter for your business, or still aren’t sold on the ability of Twitter to produce real income for your business, use @DellOutlet as a case study of what is possible.
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Series Recap: Small Business Questions Answered
We’ve covered a road this week in answering Josef’s original question about starting your own business.
In a nutshell Josef wanted to know:
- How to decide it’s worth quitting a safe, well paid day job?
- Should the idea be revolutionary? Or at least novel? Or it may be rather ordinary, just betting on good execution?
- Should I start only once I have a detailed business plan with detailed market research, or is that just a perfection paralysis and I should rely more on gut feelings?
- What are the signs it could go well or all wrong?
Starting a new business can be exciting, nerve racking, stressful, and overwhelming all at the same time. It’s no wonder the idea of starting your own business is met with endless questions, second guessing, and some uncertainty about your ability to be successful.
Hopefully we’ve shown you over the past couple of days that there is a process to work through when considering going out on your own. But, it doesn’t need to be as overwhelming or complicated as it may seem.
In Case You Missed It
Just in case you missed anything along the way, here’s a quick recap of what we covered:
How to Decide to Quit the Day Job to Start a Business
The decision to quit your day job and start a business goes a lot deeper than just having a good business idea. In this post we answered two very important questions about starting your own business.
- Do you really want to quit your job?
- Is business ownership right for you?
We also talked about some strategies you can use to hedge your bets before you walk away from the steady 9-5
Is My Idea Good Enough to Start a Business From?
Lots of good stuff in this one.
You can spend a lot of time second guessing your business ideas, but what it really comes down to is “will your business idea make you an adequate return given the risk you’re taking?”.
We answer that in this post, talk about some business myths, and go over the most important aspect to consider when you are trying to decide if your business idea has merit.
Perfection Paralysis in the Business Planning Stage
Failure to plan is planning to fail, but here we talk about when you take the planning to the extreme and never actually do anything! We call it proactive procrastination.
Here we talked about the four main areas we see perfection paralysis creep in, and what you need to know to combat each and keep moving along.
10 Early Signs Your Business is Heading for Danger, and How to Avoid It
Essentially a list of mistakes I’ve made over the years, and a fix for each. If you can see your business heading for danger, recognize the warning signs, you have a chance to change course and save your business.
In Summary
With the articles above you have the information you’ll need to make an informed decision about starting a business. I think you’ll find that it doesn’t need to be as overwhelming, stressful, or scary as it may seem to you right now. It does take planning – but once you get comfortable you’ll soon find that is the fun part!
To Josef, I hope we’ve done justice to your question, thank you for providing such a great content ideas we all can learn from.
Want Your Question Answered?
Do you have a business question you’d like answered “on air” here at Small Biz Bee? Drop us a line, we’d love to hear from you.
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10 Early Signs Your Business is Heading for Danger, and How to Avoid It
Today is the fourth part of our four part series in response to a reader’s question. If you missed part 1, 2, or 3, you can catch up here, here, and here.
We’ve talked a lot this week about taking that first step and starting your own business, and some things you can do as you prepare to launch your new business venture.
Part of the question that sparked this series was “Are there early warning signs that things could go wrong”. Here are ten that I can speak to from first hand experience, you probably have others – drop’em in the comments section so we can all learn something.
10 Early Signs Your Business Venture is Heading for Danger
Sign #1 You don’t know you unique selling proposition (USP)
If you’re starting up, or have already opened your doors for business, and you still don’t know what your USP is you’re in trouble. I can’t stress enough how important it is to know what makes you different, and why people should buy from you instead of a competitor, going into the venture.
Fix:
Spend time up front addressing what your USP is, before you launch. Analyze your market, analyze your competitors, and figure out where you can fill holes or gaps in what they do.
Don’t open your doors for business until you can tell me in a sentence why I should buy from you and not your competitor. Your USP can change over time, but those changes should be strengthening it, not defining it.
Sign #2 You have to play with the #’s to "make it work"
Having to play around with your financial projections too much in order to “make it work” is a clear sign of danger.
Fix:
Remember that you are creating the most conservative projections you can. If the numbers are a close call on a conservative basis, it may be time to pass on the idea.
Sign #3 You haven’t made short and long term goals for the business
It’s not good enough to open for business and hope for the best. If you don’t have some short term goals to keep you moving forward, and some long term goals by which to steer the ship, you’re sunk.
Fix:
This doesn’t have to be a long drawn out process, but short and long term goals absolutely have to be defined going in. Think about what your perfect business looks like in 5 years, then work backwards to today setting goals to get you there. Use the SMART goal process if you need a starting point to goal setting.
Don’t worry about being to exact, or shooting too low – remember Costco’s business plan set a goal to expand to 10 stores one day. Had they not set that goal, they wouldn’t have become the 500 plus store chain they are today.
Sign #4 You lack support
If you look around and you have no support structure from a business perspective, you’re in danger. If you have no support structure from a personal perspective, you’ve got big trouble.
Fix:
Having the proper support from both a business side and personal side is an extremely important factor for success. Look for role models or mentors to help you navigate the business aspects, and be sure to talk up front with your family and friends to rally their support before you get too far into the planning stage.
If you have a significant other, it is critical they are on board to some degree with what you are doing. It will affect their life as much as yours, you’ll want and need them on your side.
Sign #5 You’re having partner problems early on
If you and your business partner can’t decide who gets to sit next to the window without a debate or a near argument, you’re in for it in the long term.
Fix:
Before going into any partnership be sure to read 7 Steps to Effective Partnerships. And take the advice to heart, believe me I’ve lived it enough to know what works.
Sign #6 Don’t know your competitors, market, or target customer
If you can’t name your top five competitors, what your market is defined as, or what your target customer looks like, you’re driving blind.
Fix:
Due diligence early on is the only fix here. Use what we talked about yesterday to analyze your competitors. Research your target market. And write down what your perfect customer looks like, down to what they have for breakfast. You can’t know too much here, but be sure not to use this research as “proactive procrastination”. Once you have a clear picture, and are comfortable with it, you can move on – But don’t launch without it!
Sign #7 You’re not adequately capitalized, both personally or professionally
If your personal financial house is not in order, you business financial house may never be.
Fix:
Be sure you have some reserves personally so you aren’t stressed when the money doesn’t roll in from the business day one. And yes, it is going to take some money to start up, so seek out the lowest rates and best terms you can for the money you need. Don’t over borrow. If anything under borrow and bootstrap.
Sign #8 You’re expecting too much too soon
If you expect, or worse need, the business to be showering you with cash from the second you open the door – you’ve got danger on your hands!
Fix:
Understand it will take time for your business to consistently provide you with an adequate return. Expecting, or needing, too much too soon will cause you to push and make poor decisions. If you’ve done your plan and projections as I’ve suggested you know conservatively going in how long it’s going to take to get the cash you want.
Also, have your personal finances in order so that you aren’t depending on the business for too much too soon – now that’s a recipe for disaster.
Sign #9 Your marketing plan lacks a plan
Have you caught yourself saying “I’ve got $5000 for marketing, let’s just get some ads out there”? Well, there’s a big problem with that! Not having a marketing plan is wasting your advertising money plane and simple.
Fix:
You’ll need to develop your marketing plan early on. It’s vital that your customer acquisition strategy is defined early on, and carried out through your marketing efforts. Here’s some help developing your marketing plan. And some more on what your marketing plan should entail.
Sign #10 Excess creeping in
All right, everything is a business write off – time to get some $5000 office chairs!
Fix:
True you’re going to have business writeoff’s, but if you find excessiveness creeping in early on, you need to reign it in. Just because your business is paying for it doesn’t mean you’re not. Keeping expenses under control early is vital to success, if you wouldn’t buy a $5000 office chair at home, don’t buy one for your business either.
Coming Up
To finish out this series we’ll go over a quick summary of all we’ve learned about starting your own business.
Stay tuned…
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Perfection Paralysis in the Business Planning Stage
Today is the third part of our four part series in response to a reader’s question. If you missed part 1 or 2, you can catch up here, and here.
If you’ve been following along with us thus far you’ve determined that business ownership is the right path for you personally by answering the following questions:
- Do you enjoy making decisions and being in charge?
- Are you willing to take risks and accept the outcome?
- Are you adequately capitalized?
- Are you flexible, and can you adapt to change well?
- Are you good at short and long term planning?
- Do you have strong people skills and build relationships easily?
And you’ve taken a look at your idea to make sure it fits the following criteria:
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Will it provide an adequate return compared to the risk you’re taking
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Do you know what your unique selling proposition is
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What is the market potential?
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1) How big is the market
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2) What share can I get
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3) Is that enough?
-
If you answered the above thoroughly, and it looks like your idea can still pan out – now it’s time for the rubber to hit the road – it’s also time that perfection paralysis hits most people.
It’s natural to feel anxious, or nervous about taking the leap into business ownership. And knowingly or unknowingly many people fall into the trap of trying to get things “more perfect”, or do a little more research, before they start up – if for no other reason than to delay actually having to start up.
Perfection Paralysis Danger Spots
Some of the most common areas people fall into perfection paralysis are:
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Writing the business plan
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Doing market research
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Will the finances work?
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Self Imposed
Let’s work through each.
Writing the Business Plan
I’ll say that I am an advocate of having a business plan. However, if writing a business plan the size of a phone book is what is keeping you from starting up – by all means write the simplest plan you possibly can initially.
According to a new study, the Small Business Administration found that writing a plan early in the business planning stage could increase your chance of success with your new venture.
But the main reason it increases success is because it forces you to get started doing something for your business. The simple exercise of writing the plan was enough for a lot of people to go through with starting a business.
Simply put those who plan, do!
A fellow entrepreneur and small business blogger, Mike Michalowicz at the Toilet Paper Entrepreneur, suggest keeping your business plan extremely simple early on, and he doesn’t even call it a business plan, but a early on. And I’d agree with him that a simple plan can be the best when just getting going.
Elements of your business plan can change over time (ex. Costco’s original business plan talks about growing to 10 stores – they now have over 500!), and you can always go back and add or develop something to a greater degree once you’re in business. Don’t let the plan writing stand in the way of getting your business off the ground.
Essential Elements of your First Business Plan:
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What do you plan to do, what are the goals for your business?
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What does the market look like? What are the opportunities, where are the threats?
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What is your marketing strategy? How will you advertise, and to whom?
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What is your management strategy? Go it alone, hire employees, or hire other mangers?
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Do the finances work?
Keep in mind this first plan is just for you, it will help you know what you want to do and how you will get there. And it will get you started doing something!
Doing Market Research
Market research is important, and can’t be taken lightly, but it is also a place that people will proactively procrastinate. Let’s try to simplify it a bit.
In your market research you are trying to answer the three main questions we talked about earlier:
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How big is the market for your idea?
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What share can I get?
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Is that enough? And we’ll add one:
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How will I capture my piece of the pie?
Market Analysis
Keep it this simple. We’re trying to keep you moving, not get bogged down in the minutia. However, you need to thoroughly answer the following questions.
1) Who is your competition and what are they doing?
Look at who you will be in direct competition with and analyze their customer base. Go to where they do business and “secret shop” them. Take time listening to their customers, and look for ways you could turn those folks into your customers.
2) Where are the opportunities?
Where are the greatest opportunities for your business? Are there untapped markets, or specific customer demand? Are their holes in the way your competition is doing business that you can fill?
3) What are the threats?
Look for danger. Competition in the same market and niche as you is a threat. Fickle customer base for your products is a threat. The time, or lack thereof you have to devote to your new venture could be a threat. Do your best to think about the threats not only today, but 6 months to a year down the road. Does your business not currently have competition but due to low barriers to entry that could change in a few months? That would be a threat. If you aren’t coming up with any threats – you’re not looking hard enough.
4) The internet is your friend
Look for any research that’s been conducted in the market you want to enter. There is a plethora of information on the internet and much of it can help you get an idea of market size, and potential.
5) Get some free help
Use a service like the one provided for free by SCORE to get some counseling about your particular idea and the market. The experts at SCORE can help you see your market more clearly and decide if your business has a chance to compete within it.
Much of your market research will be cobbled together yourself. Learn as much as you can about your market, and then make some conservative assumptions about your potential to operate within the market as you know it.
Will The Finances Work?
Once you have a clear picture of your market based on the above, you can work through a model (almost) as simple as our Lawn Care example from the last article.
Financial projections are full of assumptions, and the natural reaction is to try to get as close to “perfect” as possible when doing them – I’m mean we’re talking about the money here right? That’s important!
But not so fast, while financial projections are important, it’s more important to understand you’re never going to get this step 100% right and you’re goal is to do projections that give you the best chance of staying in the game when you screw them up.
A Few tips for Doing Financial Projections
1) Be conservative with every projection
You won’t get the market share you think you will. You won’t grow as quickly. You won’t retain customers at the rate you expect. You won’t be adopted by your target market as quickly. Your expenses will be greater. Expect the unexpected expense to occur more than you’d expect it. Etc, etc, etc/.
2) Success does not come to those who make the most accurate financial plan from day one. It comes to those who understand what they don’t understand and build their plan around it.
3) If you find yourself working and reworking the numbers, without a fundamental change in your business idea, model, or market outlook stop in your tracks! Why? Because you’re shopping for variables to make your idea work, which is pure fantasy. Sure it may be easy to say “Nah, I think I’ll get 10% of the market instead of the 9% I originally thought, and now look…I’m rich!”, but unless you have a clear plan on how you are going to get the additional 1% of the market, you’re just making stuff up.
My point here isn’t to discourage you, it’s to set you up to do projections that keep you in the game. If you can conservatively estimate all aspects of your business and it still looks like a go – then right on! But if your success hinges around whether your projections are 100% correct from day one – Danger is on the horizon!
Don’t spend days, weeks, or months working projections to the penny – you just don’t know enough to do that yet.
Self Imposed Perfection
The last area perfection paralysis runs rampant is in what I call self imposed.
These are the assumptions or beliefs you hold that keep you analyzing and never doing. They are ideas you may believe but hold little factual validity, or reasons you give yourself for never getting past the planning stage.
Things like:
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Now is a bad time to start a business
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The timing just isn’t right for this
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I need to learn more about XXXX before I XXXX
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I’m not “ready”
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There’s not enough time
You’re never going to have more than 24 hours in a day. The time will never be absolutely perfect to start a business. If you’re not “ready” write down why not, along with a plan for what you’re going to do about it.
My point is it will never be perfect. And talking yourself into believing things need to feel perfect before you start your own business is just a form of procrastination.
Keep Moving Forward
The key to avoiding perfection paralysis is to recognize it on one level for what it is – Proactive procrastination. So you’ve got to take these steps, and continue to move forward to combat that perfectionism.
Work through the steps we’ve outlined over the last couple days and as long as your idea continues to pan out, keep moving forward. You’ll gain confidence in yourself each step along the way, and that last step will seem less daunting when you get there. Nobody has ever launched the perfect business, at the perfect time. Yours will be no different; just don’t let it stop you.
Coming Up
Coming up next in this series we’ll look at:
Stay tuned…
Photo Credit: Per Ola Wiberg (Powi)
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Is My Idea Good Enough to Start a Business From?
Today is the second part of our four part series in response to a reader’s question. If you missed part 1, you can catch up here.
The question at hand today is “Is your business idea good enough”? As we all know, “good enough” is relative, but I will provide some ideas for you to think through in answering that question for yourself.
Ask the Question Another Way
I hear this a lot, “do you think my idea is good enough to start a business?”…and normally what people mean is “do you think I’ll make money doing this?”.
The short answer is- most ideas you can think of are good enough to start a business around – in short you can probably make some money doing almost anything.
The real question is whether or not your business idea is worth the risk, and will provide adequate reward if it works out. For sake of argument let’s say adequate return is enough money for you to live on, at least replacing your current income.
So now the question changes once again, this time to “given my idea, what is the potential?” We’ll talk about potential in a minute, but first let’s dispel some myths about what your business idea should be.
Business Idea Myths
To make an adequate return, your business idea doesn’t need to be:
- Revolutionary
- Totally unique
- Game changing
- Competition free
Now, you’ll make a heck of a lot more money if your idea happens to be one of the above – but the honest truth is very few of us will invent the new wheel, or be so unique we become our own category.
You can make your adequate return, and then some, if within your business idea you can see your unique selling proposition.
Unique Selling Proposition
Simply put your unique selling proposition (USP) is the reason I’d buy from you and not a competitor. What makes you special, why do you deserve a share of the market?
For example let’s say you want to start a lawn care business. You know lawns, your tomato plants are huge, and the azalea’s in your yard are the envy of the neighborhood.
Great – you’d probably make a very good lawn care person, and make money doing it. But, will you make an adequate return?
Probably not if just doing lawn care is eh extent of your idea.
Take for example: Where I live there are literally 1000’s of lawn care people. Why am I buying from you, what’s your USP?
Your potential USP’s may be:
- Creativity
- Service
- Convenience
- Price
HINT – Best not build your USP around price. It’s a very hard way to compete, and only a matter of time before somebody bigger and more efficient comes in a does it cheaper than you. Don’t believe me? Try selling toilet paper cheaper than Costco.
Okay, so you tell me “Matt, my Lawn Care business will focus on organic lawn care that is pesticide free. I offer free same day quotes for service, and tailor my schedule around the homeowners.”
Hey, now we’re on to something. You’ve taken your idea which 1000’s of people do and turned it into a special offering. If I’m into pesticide free gardening, I’m using you and not your competition who killed my cat with chemicals last spring.
The Market Potential
Once you have your business idea, and understand what your USP is, the last piece of the puzzle in deciding whether your idea is good enough is to look at the market potential and assess if it will provide your adequate return.
Three questions to ask when assessing market potential.
1) How big is the market?
2) What share can I get?
3) Is that enough?
Back to your lawn care business.
You know your area has 10,000 homeowners. There are only 2 people in your area providing organic lawn care, and you’ve heard they aren’t very shall we say “customer orientated” – given that you think you can get between 2-5% of the lawn contracts in your neighborhood (a small amount, but you are offering a very specialized service).
That means you can get around 300 contracts from your market. You also know that each lawn is worth about $200/month in profit, which works out to a profit of $60,000/month or $720,000/ year. Is that enough? Is your business idea “good enough”? That’s for you to decide when you run the numbers yourself.
I know, I know, you couldn’t do 300 lawns a month yourself so you’d have to hire people which would cut your profit, but that’s a blog post for another day.
To Summarize
You can see that deciding whether an idea is good enough to start a business around is a relative question. The good news is most ideas have the potential to make some money, they don’t need to be revolutionary, and quite often you won’t be the “game changer”. If you know your USP, and your market well enough I’m sure you can see how an “ordinary” idea could turn into extra-ordinary profits.
Your job is:
- To decide how much you need for an adequate return,
- Do you have a USP, and
- Do the market dynamics offer enough potential to pursue it?
Coming Up
Coming up next in this series we’ll look at:
Stay tuned…
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For exclusive Small Biz Bee content and offers, sign up for our free newsletter:
