Marketing for Entrepreneurs: The Old and the New

Entrepreneur.com has two articles at their on-line magazine on marketing. One deals with techniques to optimize the latest in web-based sales. The other stresses that we should never stray too far from time tested sales techniques.
“Setting Sale” by Chris Penttila walks us through the five basics of building sales in a business. For Penttila’s take on these five I recommend you take a careful look at his article. Here are my takes on these five sales fundamentals:
1. Make sales contacts more effective. This is true from every aspect of sales from advertising to direct selling. It all costs money, which is generally a scarce resource for most entrepreneurs, so make sure your efforts have maximum impact on getting orders in the door.
2. Increase market share. In a competitive market, remember that most of your sales come from competitors. Know how customers make their decisions on who to buy from, know how well each competitor stacks up on these criteria, and know what you need to do better to take these customers away. Most of us think we know how our customers make decisions. Do some simple research to make sure you really know. It is often quite surprising.
3. Increase customer loyalty. It is easier and cheaper to keep a customer you have than to chase a new one. Don’t just worry about getting more folks “in the front door”, make sure you “close the back door” so you don’t lose the ones you already have.
4. Increase margins. The real goal is profits, not sales.
5. Reduce sales cycle. Know your sales cycle (first contact through closing the sale). Measure you progress along the sales cycle, as this is probably the only measure you will have of where you are headed (financial statements only look backwards). Make sure your accounting system gives you this information consistently.
And now for the new. Catherine Seda gives advice on how to increase sales through more effective use of Internet search engines in her article “In the Click”. It has gotten much more complex, so you may need to get professional help to make the Internet work for your business. Here are a few tips from Seda’s article on to get effective help:
-Find the experts. Read articles and books, and attend conferences to identify the companies with strong industry visibility. Even if they’re not good matches for you, they could recommend other reputable firms.
-Interview firms. Don’t be afraid to quiz companies about their marketing philosophies, process, tools, reporting and results. Ask them to define spam, then refer to your resources to see if experts agree or disagree.
-Avoid responding to e-mail spam. The “Get a number-one position for $99” spam is likely from companies that will spam the search engines, too.
-Speak to client references. Ask them to describe their experiences, results and recommendations for working with the company you’re interviewing.
-Outsource. Some companies manage their own paid placement campaigns in-house while other companies manage SEO. Find out what your options are.

Would You Like Fries With That Throat Culture?

It is amazing to watch markets at work. The health care industry (where I used to hang my hat as an entrepreneur) has been the source of much hand-wringing the past several years due to dramatically increasing costs. Unfortunately, politicians on both sides have been drifting toward the old familiar cries of “Let the Government Save You!” or worse yet, “National Health Care!!”, just as we heard in the 1990s.
Both in the 1990s and today we have seen the power of the market. In the 1990s we saw entrepreneurs create all kinds of amazing solutions that not only made health care more efficient, but most often more effective as well.
Here is today’s latest marvel of the marketplace: health care kiosks. It is a fast, efficient mini-clinic that specializes in common health problems. These kiosks operate out of Target and other retail stores. People were “sick” of sitting and waiting for hours in doctors’ offices, emergency rooms, or urgent care centers for simple health issues. These new clinics are popping up across the country. They go by the names such as MinuteClinic and Quick Care. They are being widely touted by health care plans due to their high patient satisfaction and moderate prices.
These companies reduce overhead through the application of the kiosk model from retailing. They keep their operating costs down by staffing with nurse practitioners, who are fully trained to provide care at this level. Because of their efficiency, health care plans are encouraging their use by offering lower co-pays (often as little as $5).
So next time some politician suggests the need for expanded government intervention into health care, tell ’em to go to a MinuteCare and get a chill pill.
(Thanks to Ben Cunningham for this suggestion).

State-by-State Employment Data

State-by-State Employment Data released today:
“Highlights:
* “Over the past year (since June 2003), the unemployment rate has fallen in 47 states and all 4 regions of the United States.
* “Non-farm payroll employment increased in 41 states in June.
* “Over the past year, employment has increased in 46 states.
* “37 states now have unemployment rates at or below the national unemployment rate of 5.6 percent.
* “The states with the largest payroll job gains during June were North Carolina (+35,400), Missouri (+27,600), Pennsylvania (+20,300), California (+12,300), South Carolina (+12,000), and Florida (+11,800).
“The latest state-by-state data are consistent with recent job growth nationwide. Since last August, over 1.5 million new payroll jobs have been created. Nearly 1.3 million new jobs have been created in 2004 alone. If the current pace of job growth for 2004 continues, over 2.5 million jobs will be created this year. In addition, the current national unemployment rate is 5.6 percent, well below its recent peak of 6.3 percent and below the average unemployment rates of the 1970s, 1980s, and 1990s.”
(Source: Joint Economic Committee).

Bad Bounces

I was watching more highlights of the British Open this morning on the Golf Channel, and I was struck by another lesson golf offers entrepreneurs. Even after all of the preparation and planning, sometimes the Open comes down to one or two unlucky bounces. The links courses are infamous for their quirky landscapes that create quite unpredictable outcomes from perfectly executed shots.
There is a certain randomness that we can never completely prepare for in golf, just as in business. I saw several well struck shots hit a mound just wrong and go in directions the players never imagined. The same is true in business. No matter how much we plan and no matter how much data we gather, random acts happen. We had a business that was providing vocational assessment and training for workman’s comp cases that was growing quite nicely until one day we woke up and found out that the state legislature had added language to a bill that basically took away most of our funding from workman’s comp insurance. It was a bad bounce from which we could not recover. Nobody saw it coming. It was as if we were playing our way around the course flawlessly, but on the final hole we caught a bounce that sent our ball out of bounds to cost us the championship.
Luckily for us, this was a small part of our total operation, but it taught us an important lesson. Although we could manage our risk by careful planning and solid execution, we could never eliminate the random outcomes that arise from uncertainty. Bad luck can happen at any time and without warning.
Depending how bad the bounce is, the golfer either plays on from where they are, or if the bounce is bad enough, knows that he will be able to play again tomorrow and hope that the golf gods will be kinder. A good lesson for entrepreneurs, too.

Painful Realization

One of the most difficult moments for entrepreneurs can be the point when they realize that they can no longer effectively manage the companies they created. This is not an unusual event, but it is most often met with complete denial.
The StartupJournal has an article that shows the struggles that one entrepreneur faced when he owned up to his limitations related to his growing company.
“Mr. Reeve wants to remove himself from all aspects of management and become the company’s chief designer and inventor. This transition is proving easier said than done. The company needs to find a strong manufacturing manager with the ability to satisfy the founder, maintain quality and build profitability. Two managers who were hired in the past three years weren’t up to the task.
Both Mr. Reeve and his wife, Anne, who co-founded and helps run the company, agree something needs to happen quickly. Mr. Reeve is burned out from doing work he doesn’t enjoy.”
There are the lessons that the author of this article, Perri Capell, arrived at from interviewing this entrepreneur:
-Entrepreneurs can be a mismatch for a mature business.
-Management skill cannot always be learned.
-Hiring a successor can be a very difficult task.
Although all of these can be true in many cases, my experience is that if dealt with early enough, many of these challenges can be avoided. I have seen many entrepreneurs make such a transition successfully. It is not easy and the entrepreneur will need to commit to a long term plan not only for the business, but for him or herself. I stress to entrepreneurs that they need to understand that it is not just their businesses in transition, but they need to transition, as well.
One of the best books I have even read on this topic is Growing Pains. It was my Bible during this transition period in our business. The good news for young entrepreneurs is that many are learning about managing growth in their formal education on entrepreneurship. The rest of us old dogs will need to try to learn this on the fly.

More Advice on Home-Based Businesses

WomensWallStreet.com has some more advice on starting a business out of your home that goes along with a recent post at this site.
“Begin by deciding if a home-based business is really right for you by making an honest assessment of yourself and your needs and availability. It’s harder than pointing and clicking, but it’s where the real work begins. Talk to your family about how much time you want to devote to work, and research every option thoroughly – you’ll learn a lot and avoid a bad match. If you’re determined to keep your weekends free, for example, avoid retail and real estate.
Be sure working at home suits your temperament. If being cooped up in the house doesn’t sound appealing or if you’re easily distracted, think twice….”
Successful home-based workers I have talked with all say the you need to set some clear boundaries of place and time that define your working at home. Set aside a “work place” in your home such as a designated office, but only go there during predetermined working hours. This may even require getting two computers and two phone lines–one for working at home and one for family use–to make sure the boundaries are kept clear and consistent. This can help with distractions.

Insurance for Home Based Business

Something that is often overlooked is the need for home based businesses to secure business insurance. This article at NFIB outlines how to evaluate your needs.
“Every owner of a home-based business should consult with an agent experienced in insuring small businesses. Normally, your homeowner’s policy will cover some business-equipment coverage costs in the case of losses due to fire or theft, but if you’re not completely familiar with the details of your homeowner’s policy, snags could develop when making a claim. You may find, for example, that business equipment is excluded from coverage or that the policy’s deductible for computer equipment is higher than the replacement cost. Even worse, you might find that simply having a business in your home voids your homeowner’s coverage.”
Too many small business people seem to want to ignore issues such as insurance needs and employee legal issues. Even if your business is a home based business, it is a business. Don’t cut corners on matters such as these. The odds are very good that it will catch up with you.