When I was in high school, I started my first, real, business. Looking back, I can clearly see why it failed and what I did wrong. But just because it failed, didn’t mean I stopped trying out different things.
I ran an online t-shirt company. It was called Shirts-N-Giggles. I designed my own humorous t-shirts and tried to sell them online. (This was before the big craze of funny t-shirts online) It seemed like an excellent idea at the time, but guessing from the title of this post, it didn’t work out very well for me. I had about 10 online sales while I ran the website. I actually sold more offline to friends and friends of friends, but I really wanted to get into e-commerce.
Here are some things I did wrong.
1. No Real Business Plan
I just wanted to sell my own t-shirts online. I didn’t really think about my target market, my costs and revenues, my marketing campaign. All I did was register my business, set up a website, and hoped people would buy.
What I should’ve done: I should’ve researched on the demand for such a product. I should’ve done more homework on who I will target with this website. I should’ve planned out my marketing and advertising much better. And if I had a good business plan, I would’ve been more prepared.
2. No Clear Financial Model
I didn’t really plan out my finances and my limited budget. Instead I spent most of my money printing my t-shirts, and didn’t look at my other expenses. Because of this I was limited to how much I could spend on my advertising, hosting, and other miscellaneous expenses.
What I should’ve done: I should’ve spent my budget on more than just the product. I should’ve researched the costs of how much it would take to get traffic to my website. I should’ve taken more time to plan out how to invest my money.
3. No Clear Marketing Plan
“If you build it, they will come.” I thought all it took to be successful online was to just build the website and the customers will rush to it. Boy, was I ever wrong. Come to think of it, I didn’t really think at all about my marketing strategy, nor how I would advertise the website. But, as mentioned before I spent most of my budget on the product itself, so there was no more money left to advertise.
What I should’ve have done: I should’ve done more research on online advertising. I should’ve put aside money to buy Adwords or banner links.
So to sum it all up, I wasn’t prepared. Now I don’t blame myself because I wasn’t even 18 yet. I had the entrepreneurial spirit, but didn’t have much knowledge about selling online. My first failure taught me to be more prepared, to do more research, and not to always rush into things.
I always refer to this failed venture before I think of starting anything up. I look at what I did wrong and make sure I don’t repeat the same thing again. If you have any similar stories to this, feel free to comment on this post.
Here’s an interesting video regarding motivation and incentives. If you run a small business, this may give you new ideas on how to motivate yourself and your employees.
Whether you’re just starting out or trying to expand, having a business plan is essential. There are many resources online on how to write one, but I’m just going to cover the most important parts of a business plan.
Executive Summary
The executive summary states what you’re business is all about. It lists your objectives, mission statement, and your key to success. This should be the first part of your business plan because it briefly summarizes your business and gives the reader an understanding about you. In this part, you need to really sell your business, whether it be for investors, a bank, or your potential clients.
Company and Product Summary
In this part of the plan, you need to explain what you’re company is all about. List all of the important finances such as cash flow, revenues and expenses. Also, talk about your products. List what you offer, how you make a profit with the products, and why your products are special and successful.
Market Analysis
List all of your competitors, your target market, demographics, and industry analysis in this part of your business plan. Be as descriptive as possible. List the names of your competitors. Define your target market and the demographics of it. List the median household income of your target market, their average age, their spending habits, etc. Lastly, describe your overall industry. Is it a growing industry, or a declining one? Explain how consumers purchase their items in this industry.
Strategy/Implementation/Management
It may seem like there is a lot of information crammed in this part of your plan, but all three of those items are tied to each other. List your strategy, explain how you’re going to implement it, and explain how your management team (maybe it’s just you) will be successful. Analyze your competitive edge and explain how your business will be successful because of it. Show how your marketing strategy will bring customers into your door. Finally, if there are more people running the business, list all of the members and how they contribute to the success of your company.
Financial Plan
This is the meat and the potatoes of your business plan. If you’re using a business plan to get loans, this is what the bank really looks at. In this part of the plan show how you’ll be making money. Forecast how much revenue you will make in the next three years. Make a graph of the profits you expect to have over the same time. List your cash flows and how that will impact your bottom line. The more detailed you are in this part of the plan, the better. List any and every possible revenue and expense source in this category.
As I’ve mentioned before, these are just some small tips on writing a great business plan. I’ve only included the most crucial ones. There are various opinions regarding what should go into a business plan, but these are the most important ones, and almost everyone will agree that it is necessary to include them.
If you’re looking for more information and greater detail in business plan writing, you can visit the SBA Website and explore their resources.
Unless you’ve been living under a rock for the past few months, you’ve heard about the new health care plan proposed by President Obama. While this post may seem more fitting for a political blog, I thought I should bring up some points that relate to small business.
Provides small businesses tax credits and affordable options for covering employees. The President’s plan will also provide small businesses with tax credits to offset costs of providing coverage for their workers. Small businesses who for too long have faced higher prices than larger businesses, will now be eligible to enter the exchange so that they have lower costs and more choices for covering their workers.
What does this mean for your small business?
If you’re not currently offering health insurance to your employees because of cost, you will earn tax credits under the new plan. This plan will make it more affordable to offer insurance and will make you much more competitive with bigger businesses. This should be good news for you and your employees.
Being able to afford and provide health insurance will ensure that your employees are not quitting due to the lack of benefits. You’ll be able to retain more talent and prevent them from leaving your company. You’ll be able to focus more on providing great products and services, and less on health insurance.
You’ll be able to attract new employees by offering health insurance. Many job seekers look at the benefits package (insurance, 401k, etc.) before accepting a job, and for most of them it’s a deal maker or breaker.
Freelancing can be a great way to start earning extra money while keeping your salaried job. It can help you find a great niche before you venture on to your own business. You can pick all sorts of different jobs and dabble in many areas to find what you like doing the best. Plus, it never hurts to make extra cash.
I use Elance and Guru to find extra work. These are the two most popular and legitimate freelance websites online. Both of the websites offer various categories of work ranging from programming, advertising, writing, web design, and management. Companies post work for each category and freelancers can bid on the work they’re interested in doing.
Another great thing about those websites is that they offer variety in projects. Many projects are location independent, meaning you can live anywhere in the world and can still do the work. Projects also vary in duration. Many projects will take only an hour or two to complete, and some offer long term work lasting up to a year.
Freelancing is also a great way to network with companies needing your services. Once you decide to start your business, you will have access to quite a few companies that are needing your services, especially if you’ve already done a couple of projects for them in the past. The sheer number of companies looking for freelancers will allow you to market yourself much easily and will allow you to narrow the the type of work you’d like to do.
If you know of any other freelancing websites, or have any other input on this topic, please comment and let us know.
It is very important for you to have repeat business from your customers. Having your existing customers come back means more money in your pocket.
Send out thank you letters/e-mails
Whenever you sell your product or service to a customer make sure to follow up with a thank you letter or e-mail. You will start building rapport with the customer this way. You can thank them for their business and maybe even offer some promotions for their next purchase to entice them to buy from you again.
Follow up periodically with your customers
From time to time send out promotions only available to your previous customers via mail or email. Emphasize that the promotion is only for previous customers and that you appreciate their business. Since you already sent out a thank you letter to them, this promotion will feel less like junk mail/spam and will make the customer feel that you really do appreciate them.
Another great way to follow up with your current customers is to offer a newsletter. It will be an indirect way of promoting your company, but will be a great way to keep your customers informed about what kinds of products or services you’re offering, how you’re involved with your customers, etc. A newsletter may not be right for every business, but if you see it fitting for your target market, it can be a great way to gain repeat customers.
Treat your customers the right way, each time.
Even if they’re your regular customers, treat them as if your business only depends on them. Make sure you’re always friendly and helpful. Offer to go above and beyond to meet their needs. Offering this type of great customer service will leave a positive note about your company, and the customers will be more likely to come back to you for business.
If you’re thinking about setting up an online business where you sell your products, there are a few ways of doing so. You could either set up your own website and sell from there or you can set up an Ebay store. I’ll go over some pros and cons of running an Ebay store to help you make your decision easier
Ebay Pros One of the biggest pros of running an Ebay store is that you do not have to set up your own merchant account to take in credit cards online. Setting up a merchant account can be very costly at times and may require you to have a certain number of transactions a month. With Ebay your customers can pay with their credit cards via PayPal.
Because of this, it will also make your customers feel safer giving out their personal information. You will be set up on an established, very well known, network. If you’re just starting out your business, this is a great way for your customers to earn your trust.
Ebay brings in a lot of traffic. This can be used towards your advantage because you don’t need to spend too much in advertising, search engine optimization, etc. All you need to worry about is offering great products at a great price.
Ebay Cons One of the biggest cons of setting up an Ebay store is that it is not fully controlled by you. It is set up on Ebay’s website and all of your customers have to go through there. You will not have your own domain (a .com) to refer your customers to.
Another negative thing about an Ebay store is that you do not have great control of the customization. You cannot change the layout or the design any way you want to. You have to use their layouts. You also don’t have great control of what is displayed on your page.
It’s easy to see that there are pros and cons to either way you decide to set up your online business. If you are just starting up and do not have a great amount of cash to invest, the best choice would be the Ebay store to keep your costs down. If you have enough capital and you want greater control of your business, you should definitely set up your own website and a merchant account.
The best way for your small business to succeed is to focus on a niche in your market. You will be focusing in one small area, but you’ll be a specialist in that field. Most of us want to get as many customers as possible, but when you’re a small operation, it’s a bit hard at first.
One of the first steps you need to focus on is what you’re really good at and what you like doing. This means finding a smaller market where you really excel in your skills and experience. Finding something you’re good at means you will have a higher rate of success, than trying to dabble in everything. Also, focusing on what you like will make your job much more enjoyable, and you will be more enthusiastic to succeed.
Find out if you can make money in that market. Make sure that the niche you decide to focus on has potential to earn revenue. If you found a niche that you’re really great at and you love doing it, but cannot make any money, you cannot make a business out of it. If you find that the niche you chose is too small, find ways you can expand on it. For example you can offer more services, target the same niche in different geographical areas, and so on.
The big plus of focusing on a niche market is that your business will be able to offer more products and support in that small market than any big business can. You may even find that the bigger companies do not even offer services or products in that market, thus eliminating competition. You will be able to build better relationships and loyalty with your customers than any other big business could.
Even though at first you may not be making millions in that certain market, you will gain knowledge and experience, and when you decide to run a bigger operation, it will be much easier.
If you plan on starting a business or already have one, you need a website. Even, if you’re a brick and mortar only company, having a website is crucial.
A website is a great way to showcase your products and service, serve as an advertising medium, and be a hub of information for your existing and potential customers. But, of course you already knew that.
When deciding on a website there are a couple of things to consider.
1. Domain name Always get a top level domain name (.com). For example it should be yourbusiness.com, and not blogspot.com/your business. This gives you more authority in your industry and shows a great deal of professionalism. Even if your main business is blogging you can install a WordPress blog (like this one) on your website.
Make sure your domain name is clear and short. Having long domain names (thisismybusinessincorporated.com) will make it much harder for your customers to remember, and thus less likely for them to come back.
2. Website layout Make a website that is easy to read and navigate through, rather than glitzy and flashy. A simple website will make it easy for visitors to find the information that they’re looking for, and less likely for them to just leave.
A simple website will also be more friendly towards search engines. Having too many images or flash applications will make it harder for Google or Yahoo to crawl and index your website properly. Keep your keywords and content on topic and you will find a big increase of traffic from search engines.
This is just a small overview of an importance of a website. There is a great deal of information online discussing this topic in more detail.
If you have a great idea for a business, but you aren’t sure if it’s viable or how you would go around forming it, some of these steps may help you.
1. Brainstorm List all of your ideas on a piece of paper. They don’t need to be organized. Just let the pen flow and write down anything that comes to mind. List any thought you may have, no matter how unimportant it may seem at the time. This way you’re putting everything on the table, and you’ll have time later on to edit it.
2. Organize
Take all of the things you wrote previously and try to organize them in a fashion that makes sense to you. For example list all of the services/products that you will provide in one column, your market and niche in another, expenses in another, and so on and so forth. This way you’re slowly organizing all of your ideas, and before you know it you have an informal business plan rough draft.
3. Expand Look over your list and expand on any specific point. For example if you wrote “Start up expenses: $500″, expand it to list the specific expenses such as web hosting, business cards, etc. Doing this prepares you for when you actually decide to open up shop so you’re not hit with any big surprises. During this step you may even get rid of some of the things you listed while brainstorming.
4. Summarize Take everything you have and summarize it in less than a page. Write what your business is about, how you will attract customers, how much everything will cost, expected revenues, etc. Once you have a concise summary, read it and see if the idea is viable. Let your friends and family critique it and see if they have any input on it.
These steps will not guarantee that you will succeed in your venture, but will let you know if you should continue with this idea, or scrap it altogether. This way you do not waste too much time or money with unrealistic ideas.
Plus, if you decide to go with it, you’ll have most of your business plan written out, and will be a rough guide throughout the rest of the steps.
If there are any other ideas that you may find helpful, feel free to comment.
