Why this is a GREAT time to start your own small business!

Actually, anytime is a GREAT time to start your own business – but these days, with the media bleating about how “bad” the economy is – [insert PRIMAL SCREAM] their pessimism may be EXACTLY what you need to begin building your own dream of starting a business. There’s never been a better time to being offering your own solutions to the trials and tribulations other businesses – and the people who run them – are facing every day.

Jason Cohen in a guest post over at On Startups gives 6 Reasons Why This Economy Is Good For Startups. Tom Volkar also has a great post on Grounding your Business Vision. (For some really great tips on what NOT to do once you’ve made the leap, read Cath Lawson’s How Not To Promote Your Business On The Internet)

Why do I make a primal scream over the media’s bleating?    Because I believe  the media is trying their best to turn an “economic slow down” into the next Great Depression!    Consumer confidence plays a HUGE role in the current US economy and when traditional media outlets spend every second bleating about how “bad” the economy is – well, consumer confidence is destroyed and VIOLA!  A self fulfilling prophecy at work.

Scream “FIRE” long enough and when someone finally lights up a cigarette –  people are going to panic!

I’m not saying the US economy is in “high growth mode”.  (By the way, another name for “high growth  mode” is INFLATION!)  But I am saying that if you take your world view from the evening news, you’re doomed to viewing the glass as half full.   Look at the media reporting of Black Friday sales.  Remember – good news doesn’t sell newspapers which is the reason for the need to “spin” coverage.  For example , Reuters reports Music retailers report bleak sales on Black Friday. See the spin?   “Oh, doom and gloom!  Music retailers can’t sell music on CDs.”  (Maybe that has more to do with selling music via downloads than the economy.)   Meanwhile PC Mag reports ‘Black Friday’ Pretty Rosy for Retailers. Same day, different report, different spin.  See, PC Mag isn’t trying to sell papers – Reuters is!

Meanwhile,  on the web Carrie Hall reports that Search Advertising is Strong in this “Adverse Economy”. Gee – if this is the beginning of another Great Depression – why is spending increasing on search advertising?  Either business owners are idiots for spending money to attract business that doesn’t exist – or maybe things are not as bad as you’ve been lead to believe.

For why this gets under my skin, here’s a snippet from a post from my blog promoting my book (Beyond the Niche) on the subject of smart small business marketing strategies

I’ll NEVER forget a conversation I had with a client many years ago -during a previous “economic downturn”.  The day before our monthly meeting, my client had attended a networking function where EVERYONE was “bemoaning” how “terrible” business was for them.  (Of course, few of them were actively measuring their advertising effectiveness.)  My client joined in the bitch session like a good little networking master.

We met the following day and I was greeted with a glum, “I’m sorry – but I’m going to have to cut my advertising budget because of the bad economic conditions.”   I didn’t know what had happened in the networking meeting at the time and I was shocked.  The last I knew, sales were up because of our efforts.

Instead of accepting her decision, I challenged my client.  I asked her to pull out her books and check this year’s sales against last year’s sales.  She did and was STUNNED by what she saw.  Her sales in that month were running a full 20% AHEAD of the previous year.

Yes, that’s right.  My client’s perception was critically altered thanks to the networking event.  She accepted their fate as her own and instead of rejoicing about a 20% increase in sales, she was ready to cut her lifeline to the very key to keeping her business healthy and growing.

Perception is EVERYTHING – in life and in business.

Somehow, the two (life and business) are magically and mystically intertwined. 😉

If you think your business is about to collapse – believe me, even if it’s not – your perception of the “truth” will make it happen!

If you’ve been pink slipped – take this as your opportunity to do it RIGHT in the marketplace!!!

If you were recently fired, I’ll bet you could probably write a BOOK on all the things your previous employer was doing WRONG!  Do you really think you got fired because of the poor economy – or was it because your former employer ran his/her business badly?  (Sure, we should all try new things and do more things badly, but some businesses seem to have that as their business motto!)

If social media is killing traditional media, my response is “good riddance!  Don’t let the media bleating affect your destiny.  If you’re feeling the need to start your own business, now is the time to do so! However, if you think starting your own business means you can sit on your ass and rake in cash – well, that doesn’t happen often in “good” times but it’s even harder to make happen now.

Do you have a way to make something faster, easier, better?    GREAT!!!  Get on it!  Make it happen!

So if you already have a business, start focusing on getting the solutions you offer in front of the people who need and are able to BUY what is is you have to offer!  If you haven’t taken the plunge yet, make certain that  in the business you DO CREATE that what you’re offering something of VALUE to your prospective customers or clients. Then hit the ground running and make it happen!

The future is only as bright as you can envision it will be!

Steps to Starting a Small Business: #7 Your USP – Unique Selling Proposition

No list which proclaims itself the key to “steps to starting your own business” can avoid addressing the topic of the USP – the Unique Selling Proposition.

While the definition of the USP is often draped in “mystery”,  quite simply your USP is the reason people choose to do business with you.

It sounds simple enough – doesn’t it?  Unfortunately, I’ve been seeing that this topic needs attention so I’ll begin with what a USP is NOT!

1.  A USP is not the price of your product or service.

“It’s cheap” is a poor imitation of a USP. That part you probably already knew.  After all EVERYONE knows that – except for the people I’ve been noticing lately who are trying to sell their e books by proclaiming that the reason to buy it is because it’s so cheap.  Free and cheap are both piss poor unique selling propositions.

2.  A USP is not the quality of your product or service.

Your USP is also not that you’re the best or most qualified.  Everyone’s the best – the fastest- the smartest – the cheapest – the finest.  People have a REALLY hard time judging the quality of a product or a service and they’re positively numb to exaggerated marketing declarations.

It’s virtually impossible to judge the quality of most products or services without experiencing the product or service in person.  That’s why ecommerce retailers are offering online reviews – to help buyers access the opinions of others who have previously purchased products or services.

Another reason it’s difficutl to just quality is that buyer’s PERCEPTION of quality often affects their judgment.    For example, researchers asked volunteers to judge the quality of different wines.  The volunteers were hooked up to monitors and the pleasure centers of the brain were measured as they drank the wine.  In the experiment, the participants were told that there were 5 different wines ranging in cost from $4 a bottle to $90 per bottle.  You probably won’t be surprised to learn that the participants enjoyed the more expensive wines much more than they did the cheaper ones.

The kicker – there were not 5 wines in the study but only three.  One wine was doing double duty – being served as both a sample of $4 a bottle and a $90 per bottle of wine.  The same wine actually tasted better when served as a more expensive impostor.

This should illustrate how important it is to properly brand and market your products or service – but don’t confuse applying the label of “the best” with a viable USP.

3.  A USP is DEFINITELY not the “uniqueness” of your product or service. Unless you’re offering sex change operations for chimpanzees – there is probably someone else who offers a reasonable facsimile of the good and services you have to offer.

If you are TRULY the only one offering a product or service in a free market – it means competitors don’t view your product or service as a viable business.  Initiation is the sincerest form of flattery and it’s validation you’re on the right track.

So what IS your USP?  What is your UNIQUE SELLING PROPOSITION?

Hang on to your hat because this may come as a surprise to you:

Your USP – like Soylent Green- is PEOPLE!

That’s right.  The REASON people choose to do business with you and your business is usually nothing more complicated than you (or your staff) are reasonably competent and cordial.  If a customer or clients feels BETTER when they hang up the phone or walk out the door than when they picked up the phone or walked in the door to your business, then that my friends is a USP that can’t be beat!

Yet many business owners are on a QUEST to REMOVE themselves and their people from contact with their customers.  As more and more businesses set up ways to automate communication, they unwittingly (maybe not so unwittingly) set up barriers that prevent customers and clients from connecting on a personal level.

I’ll never forget a situation several years ago that stays with me to this day.  I had a friend who purchased one of the earliest info products on marketing offered online. My friend visited the website several times and called to ask my advice a few more times.  As he moved closer to making the decision to purchase, he picked up the phone and called the author before he placed his order. All the info guru had to do was pick up the phone to close the sale.

Meanwhile, I was creating a website for a coaching client who asked me to remove her phone number from the website.  I replied by referring to the role having the phone number displayed had played for this info guru. I have to confess, I was stunned at the passion in her reaction to hearing this.  Seriously,  you would have thought I had asked her to include photos of her having sex with household appliances into the design by her response.   Apparently the thought of people calling her on the phone literally terrified her.

I’m not a coach nor a therapist, so it wasn’t my job to figure out why connecting with people who might want to hire her frightened her so.  I removed her phone number from the website design.

Which brings me to my favorite subject, which is why blogs are the cat’s meow when it comes to a web presence for service professionals.

Your blog is a great way to allow people to “get to know you” before they pick up the phone and call – or send you an email.  They can “sample” what it’s like to do business with you by reading your blog.  They can guage whether you know what you say you know.    They can get a glimpse of what it’s like without taking the scary leap of faith and actually contacting you directly.

If you think your Unique Selling Proposition is anything OTHER than the people who are part of your organization  – then you have a rude wake up call in your future.  Social media is all about people making connections and those connections form the most important part of any business USP.

Steps to Starting a Small Business: #6 Setting Your Rates

A fast easy way to start a small business is to sell your services.  If you’re good at writing, you can become a freelance writer.  Have a knack for selling, you can freelance your services as a sales person or a telemarketer.  Think you know a thing or two about selling without meeting people in person (marketing), then you too can be a freelance marketing consultant.  The list goes on and one.

If you’re a service professional, then the big question you must answer before you begin practicing your craft is to decide HOW you’ll get paid for sharing your wit and wisdom with others.

Setting your rate is the biggest issue you’ll face in launching a service based business.

Unfortunately, setting your rates is  not a simple matter of “set your rates too low and you’ll be swamped – set your rates too high and you won’t make any sales.”  Ah, if only that were true!

Unfortunately, it’s far too common for people to evaluate your expertise by the rate you charge.  For example, I know of two Virtual Assistants – one charges $25 per hour and one charge $45 per hour.  When you hear what their rates are, do you automatically assume that  the one who charges $45 an hour is “better” than the one who charges $25 an hour?

Setting your rate is a lot more complicated than picking a pie in the sky number and setting that as your income goal.   Your rates HAVE to be based in reality if you want to succeed.

There are TONS of bullsh*t articles out there which will tell you to set your rates with the following formula:

How Much You Want To Make / 50 weeks (two weeks of vacation)/40 hours per week.

So, if you want to make $100,000 a year you simply divide and divide again to come out with $50 per hour.

OOPS!!!  This little formula tends to neglect that if you’re spending 40 hours a week on billable work, you’re probably putting in more than 60 hours a week at the job.  (This is a bitter pill to swallow in a world that buys into the idea of earning six figures in the course of the 4 Hour Work Week.)

So let’s “fix” this formula by substituting 30 for the 40 in the figure above so we can spend 10 hours marketing and promoting our services and 30 hours “working” at practicing our craft. Now the rate is $66.67 per hour.

It’s better – but still not good.  The flaw lies by starting from starting at the end (what you want to make) and working your way back to the beginning (what you need to charge to make what you want).

If you’re a Virtual Assistant and your income goal is $100K per year, you’re going to need to charge $67 per hour to hit the mark.

Here’s the “fly” in that ointment.  Remember when I told you that I know TWO Virtual Assistants – one charges $45 per hour and one who charges $25 per hour?  Did you notice how “similar” those rates are.  Now, if you’re a VA and you’re planning on charging $67 per hour – well, you’d better be able to do something those other two Virtual Assistants can not do!

In other words, you’d better have a Unique Selling Proposition or USP.  That means you better be able to provide a REASON for the rate you’re charging.

The first business coach I hired took me through this whole bullsh*t process.  We picked a pie in the sky number – did the math and VIOLA!    It worked great – on paper.  However, when I went out to drum up business, prospective clients would ALWAYS ask how much I charged.  I would reply by quoting people my “hourly” rate.

Invariably, the next question out of the prospective client’s mouth would be, “So how many HOURS will it take for you to do this?”

See, people didn’t care what my hourly rate was – they just cared how much their website was going to cost.

Oh, and by using the bullsh*t formula, I put myself in DIRECT competition with the hundreds of thousands of high school and college kids who created websites in between beer bong parties.  Fifteen years of successful advertising experience didn’t play a part in that calculation and the fact that I was fast wasn’t reflected in my hourly rate.

Since I’ve been doing this for a LONG time, allow me to share what I’ve learned about setting the rates for your services.

  1. No one cares about your hourly rate except you.  All your client cares about is how much this is going to cost.
  2. In the end, your prospective client is going to mentally measure whether the cost of the project outweighs the benefit.
  3. Your hourly rate should reflect not only the value of your time, but the value of your expertise as well.

The final advice I have on setting your rates is this: When you’re starting out – aim low.

The biggest struggle you’ll face as a beginning freelancer or service provider is filling your practice.  Set your rates too high and you’ll struggle to land clients.  However, if you price your services on the low end, you’ll fill your practice with clients who are DELIGHTED with the high quality of work you’re providing at a bargain basement price.  Before long you’ll  find yourself in the position of having to raise your rates to keep your waiting list reasonable.   Meanwhile you’ll have a STRONG portfolio of work and testimonials to share with other potential clients.

Then, when you raise your rates – you can either raise them across the board or “selectively,”  meaning, you can grandfather in your favorite clients at the old rate and the “pain in the ass” clients will find themselves faced with a rate increase.  Personal note: A rate increase is the most satisfying way to fire a pain in the ass client!

In closing – the absolute WORST thing in the world you can do is to doubt your own worth.  If you don’t believe you’re worth $X per hour – then your clients certainly won’t think you’re worth that either.

Steps to Starting a Small Business: #5 Marketing Strategies – AGAIN

This is the fifth installment of the Steps to Starting a Small Business and it’s really an extension of the previous Steps to Starting a Small Business: #3 Promotion. However, I’ve addressed this twice via email and phone over the past seven days, which is always a sign that I need to blog about a topic.  Here it goes.

A marketing strategy is different than a marketing tactic.  A blog is NOT a marketing strategy. Believe it or not, a BLOG is actually a marketing tactic.

Marketing tactics are how you achieve the marketing goals established in when you created your marketing strategy.

If you have a product or service of interest to bloggers, then by all means, a blog is a WONDERFUL marketing tactic for your business.   However, it’s possible that your target audience doesn’t know a blog from an online bulletin board.  If that’s the case, then a blog IS STILL probably a GREAT marketing tool but it may not be a marketing tactic to take your business where you want to go.  (Blasphemy – I know!)

Creating a marketing strategy is like planning a trip. When you’re planning a trip, you must first identify where you are, “I’m in Philadelphia, PA” and then you identify where you want to go, “I want to end up in Miami, FL.”

When you’re creating a marketing strategy, you begin with where you are.  “I provide coaching services to women who are divorced and want to create a new life after divorce.”    Then, you identify where you want to end up.  “I want to have a coaching practice where I have 5 coaching groups with 7 members in each group.”

GREAT START!  You know where you are and you know where you want to be.   Now all you have to figure out is how to get there!  Part of planning your trip is figuring out where your target audience (divorced women) are spending most of their time and what has their attention.

Marketing is a numbers game – pure and simple.  You have to determine how many people need to be exposed to your message to keep your business afloat.

The numbers game translates into an easy to represent funnel.  The first question to ask is how many website visitors do you need to get 35 clients into your group coaching programs?

The illustration to the left shows a “typical” sales funnel.   For every 1000 website visitors, 100 (1 out of 10) of those visitors signs up for the newsletter.  (If you don’t HAVE a newsletter – you’re missing an important step in the sales conversion process.)

Out of those 100 newsletter subscribers, 10 “bite” when you offer your coaching group.

With this information in hand, you now know that you need 3500 unique visitors to your website to get the 350 newsletter subscribers to get the 35 group coaching members.

This is why it’s so important to tightly target your audience and then do the keyword research to find out what WORDS your target audience is using to find solutions on the internet.

See, if our coach above didn’t define her target audience as “divorced women” then she wouldn’t have any idea of where to start when it came to looking for the keywords her target audience may be using as they search for answers to their problems via the web.

HOUSTON WE HAVE A PROBLEM:

a) It’s very possible that divorced women are not SEARCHING the web looking for a divorce coach.

b) The search engines aren’t going to be delivering tens of thousands of visitors to her brand new website any time in the near future.

Does that mean that you should scrap the idea?

DEFINITELY NOT!

If you’re offering solutions to people’s problems – and those people are willing to PAY to have those problems solved – then you have a viable business.  However, you may not be able to sit back and allow the search engines to drive the traffic you need to your website to build your business.

What it does mean is that she needs to look at using other methods to drive traffic to her website.

One way around the whole “oops I need more traffic” conundrum is to use Google Adwords.  Google Adwords is SOOOO amazingly easy to use, but I’ve got to warn you – it’s some of the most expensive advertising on the planet!

And for those of you who wonder what I do to pay the bills – here it is.  I come up with creative ways to build your business.  Sometimes it’s via the web – sometimes the web is just a “gathering basket” for traffic driven via other means.

In the client’s case above, we came up with a “vertical marketing strategy” of sorts.  See, my client really isn’t a blogging kind of a girl, so we had to brainstorm new and different ways for her to fill her sales funnel.

So I asked, where is the one place you can be sure to gain access to newly divorced women?  Answer, “Divorce attorneys offices.”

At first, my client was resistant.  After all, why would divorce attorneys help her build her business?  That’s where the hard work began.  I helped her to “frame” her services in a way that it was actually a benefit the divorce attorney could offer his clients – with no additional cost to him/her.

If you’re getting a divorce and your choice is between two attorneys – one of which offers not only access but a substantial discount on a program to help you get back on your feet in a matter of months instead of years after your divorce and the other doesn’t – which attorney will you choose?

The first ten attorneys she approached JUMPED at the chance to sit down and discuss this with her and now, instead of paying Google tens of thousands of dollars for a PPC campaign, she’s going to buy lunch for ten different divorce attorneys.  If each attorney sends her 4 clients, her practice will be full AND she’ll have access to a constant stream of new clients. Oh,  the “tough” economy is exactly WHY those ten attorneys are looking for something to give them an “edge”.

What’s your marketing strategy?   Who’s your target audience?  How are you planning on reaching them?

Steps to Starting a Small Business: #3 Promotion (a.k.a. “marketing”)

This is the third in the Steps to Starting a Small Business series and I’m assuming you’ve cleared the first two steps to starting a small business, which are of course the HARDEST hurdles to overcome.

The first step to starting a small business is you’ve got to come up with a GREAT idea that you’re passionate about.  The second step to starting a small business is to  figure out a way to package this idea into a product or service so that people are actually willing to write a check and PAY you for providing this valuable product or service.

Now, the third step to starting a small business is to let the world know about your business, also known as marketing.

Marketing is simply communicating the solutions you offer with the people who need your products or services.

People have problems – people have goals – people have desires.  If your product or service doesn’t help people solve their problems, achieve their goals or satisfy their desires – then go back to the drawing board and start over again.  After all, why else do you think people are going to whip out their credit card or check book and give you their money?

Begin your marketing strategy by asking yourself this simple question, “Who needs my product or service?”

If you answer, “Everyone,”  then smack yourself across the face- HARD!  “Everyone” is the answer that will doom your small business to failure.

When you try to target “everyone” you are in essence targeting NO ONE!

Akemi of the Yes to Me blog interviewed Tom Volkar. From the interview at Coaching The Freedom Of Self-Employment: Tom Volkar

In my coaching business the challenges were more internal and consisted of trusting myself and working through the underlying fears that developed around the lack of time and money. In chronological order here were my biggest challenges.

  1. Not completely following my core values, allowed me to be lured by projects that looked financially promising but were not authentically aligned with who I was.
  2. I fought prevailing wisdom to niche myself for far too long because I thought it would limit the work I’d receive and cause me to earn less.
  3. I allowed my fear of learning technology to get in the way of my business growth.

The emphasis above is my own.

Time and time again, small business sucess stories usually start at the moment the business owner defines a target audience, known as a “niche market”.

Long ago and far away, I worked with a tiny bakery located in the basement of a former office building in a dying downtown area of a rust belt community.   The location was horrible, the product was expensive and probably not the best fit for a town populated by unemployed factory workers.  Yet those two ladies created an incredibly successful business in a relatively short period of time.

The secret to their success was simple and began when they tightly targeted their niche market.

In the early days of their business (before I was working with them), they ran ads in the newspaper – declaring themselves to be a bakery.   Ho-hum.  Wal-mart had a bakery.  The local grocery chains had bakeries and those bakeries were not only cheaper, they were a lot more convenient!

However, when they began talking to a specific audience – working women who didn’t have TIME to create home made goodies for their friends and families – their bakery business literally exploded.

We began running ads that talked about the extravagant cheesecakes and unique cookie platters.  We described them as the kind of “treat” that every woman would love to create – if only we had more time.  We placed those messages in places where working women would be exposed to it and the change in focus was like adding a match to gasoline fumes.

Did we alienate men as customers with these messages? If we did, it certainly didn’t show on the bottom line.

Did we alienate stay at home mothers with these messages? Again, if we did, it didn’t hurt the business.

By targeting WORKING WOMEN in this tiny community – we unleashed an avalanche of business upon that tiny bakery.

Even though there were only 63,000 people in the community – by tightly targeting the message and the audience, we were able to deliver more than enough customers to make this bakery a success.  They didn’t need 63,000 customers – they needed 300 customers and by tightly targeting their message, they surpassed that goal with ease.

By targeting a niche audience, we were able to create an effective marketing message AND find the right places to deliver that message to the right people.  Blogs are one way of delivering that message, but believe me – they are NOT the only way!

What is your defined “niche” audience?  What solutions do you offer and to whom do you offer them?  Take this opportunity to toot your horn and declare your niche (or your intended niche)!