Monday, May 27, 2013

Estimating Startup Costs for a New Business

Confounded over how much money you'll require for your startup business? Well, don't fret. There's an easy approach to breaking this mystery down and creating a clear picture of the funds that your startup business will need.

Startup cost categories

Bear in mind that different small businesses will have different types of startup costs. For example, a furniture retailer might need a storefront and staff to man it, while a toy manufacturer might need manufacturing equipment, a warehouse and staff that is trained to operate the equipment. And then again, if you're operating an online retail business, you might be doing it at home in your PJs, and don’t need a facility or staff at all.

Costs for a startup business can be divvied up into six major categories:

  • Cost of sales:  Product inventory, raw materials, manufacturing equipment, shipping, packaging, shipping insurance, warehousing
  • Professional fees:  Setting up a legal structure for your business (e.g. LLC, corporation), trademarks, copyrights, patents, drafting partnership and non-disclosure agreements, attorney fees for ongoing consultation, retaining an accountant
  • Technology costs:  Computer hardware, computer software, printers, cell phones, PDAs, website development and maintenance, high-speed internet access, servers, security measures, IT consulting
  • Administrative costs:  Various types of business insurance, office supplies, licenses and permits, express shipping and postage, product packaging, parking, rent, utilities, phones, copier, fax machine, desks, chairs, filing cabinets – anything else you need to have on a daily basis to operate a business
  • Sales and marketing costs: Printing of stationery, marketing materials, advertising, public relations, event or trade show attendance or sponsorship, trade association or chamber of commerce membership fees, travel and entertainment for client meetings, mailing or lead lists
  • Wages and benefits:  Employee salaries, payroll taxes, benefits, workers compensation

Factor in the time to get your startup business off the ground

How is Your Startup Unique or Different?

In a competitive landscape, a key consideration is standing out from the crowd.

For startups, this is important because the barriers to entry are relatively low, while new or innovative ideas can quickly be replicated by agile rivals.

It means startups needs to discovery how they are unique and different to position the brand and carve out a competitive edge. If this can’t be achieved, the a startup can come across as just a me-too product.

Being unique or different, however, is not easy. There is so much competition that startups have to be creative, flexible and bold.

So how do startups discover what makes these different or unique?

It begins with looking into competitive landscape to explore how rivals are positioned. Who rises above the crowd, and how do they do it? What are the things that every rival claims – e.g user-friendly, intuitive, efficient. etc.?

To get a better grasp of where everyone sits, it might even help to create a graph that places companies in different buckets (e.g. free, freemium, premium, SMB, etc.)

By doing a competitive analysis, a startup can see the best opportunities to stake a claim on how it different or unique.

A good example of a startup that successfully managed to establish its uniqueness is 500px, which plays in the competitive photo-sharing market. So how does a startup find a place where it can be seen as different?

For 500px, the magic happened when it positioned itself as the place where photographers could display their most beautiful photographs. 500px is not a place to show good photographs, but only what you consider to be the best.

By positioning the brand in this way, 500px created a unique place for itself. In the process, it attracted well-known and high-quality photographers who liked the idea of having a place for their best shots. This, in turn, generated significant buzz, which attracted many more photographers who wanted to be part of the community.


5 Marketing Tips on Communicating With an Ideal Client

Defining your ideal client is the first step to generating quality, qualified leads with your marketing.

The second step is to communicate with your ideal clients effectively — and about your ideal clients effectively.

It’s very difficult for consumers to refer their friends, family, and colleagues to you and your business if they aren’t sure who you serve or what exactly you specialize in. Likewise, it’s difficult for them to see if they are a great fit for your product, program and service.

If you want to succeed in business, you must communicate who you serve, what you do, and how you can help them in a simple, easy to understand, clear way.

Here are 5 marketing tips to help you communicate to, with, and about your ideal clients and target market:

Ideal Client Communication Tip 1: Once you know who your ideal client is, don’t sit around and wait for them. Go out and find them

    Just because you open your doors for business, launch a website, or print a business card, doesn’t mean that you will have any business. No one can hire you ($$$), buy from you ($$), learn from you ($) or join your list if they don’t know you exist. It is your job as a business owner to find your market, customers, and clients, and let them know that you exist and that you can help.

Ideal Client Communication Tip 2: Share who your ideal client is with everyone

    It’s critical that you know who your ideal client is, AND it’s critical that your network and audience also know who your ideal client is. When your audience knows who your ideal client is, they can more quickly and easily identify themselves or a friend as a good fit to work with you, and it will be easier for people to refer others to you. 


Sunday, May 26, 2013

The 51 Best Customer Service Tips For Entrepreneurs

Few things are truly more important to entrepreneurs and small business owners than getting and keeping customers. After all, you’re not even in business unless you have products or services to sell and paying customers to buy them. So for many of us, customer service is no small thing. But we sometimes minimize its importance by dealing with our customers as if we deserve their business.

Newsflash. The days of big business-little customer are long gone. There are far too many competitors in the market for small business owners to handle customers carelessly. Not only that, but digital reputation management is a huge responsibility for entrepreneurs. It’s time to get your best customer service mojo flowing. Poor feedback from even a handful of dissatisfied customers will cost you dozens and even hundreds of would-be customers in the long run.

Here are 51 valuable customer service tips for entrepreneurs that will serve your customers extraordinarily well. Included in this list is everything from attitude to body language to thank you cards . All of it matters.

1. Sit up straight and smile. 

When you are face to face with a customer, good posture and a sincere smile will change your disposition and that’s change customers can feel.

2. Use active listening. 

One of the best experiences customers can have is to know they are understood. Listen to your customers. Let them know you have heard them by rephrasing and communicating what they have told you. This makes sure you and the customer are on the same page and lets customers know they’ve been heard. You both win!

3. Let them rest assured. 
Customers want to feel confident in your ability to guide them through the fray. Let them know that you have their best interest in mind. Be present, communicate often and always follow through.

4. Dump the script.

4 Steps to Ease Your Way Into Entrepreneurship

Becoming an entrepreneur is a fun yet scary proposition. Often, entrepreneurs go against the advice of their friends and family members, in order to follow their dreams and pursue their passion. However, making that leap is a rocky road.

Here are four action steps that you can take right now to make the journey less bumpy:

1. Develop a Personal Mission Statement

A challenging yet exciting thing about entrepreneurship is that you are inundated with ideas and opportunities, but to be effective, you need to choose the ones that work best with what you want out of your life. Create a personal mission statement that will act as a decisive filter. For example, my personal mission statement is "to become a tycoon politically, socially, and economically so that I may have a positive impact on my community." When developing your own, you must ask yourself two questions: What core things are most important to you? Why are those things important? Your answers will help you figure out how to accomplish your goals. Remember that your personal mission statement is not set in stone, so tweak it accordingly as your life's priorities change.

2. Reduce Your Expenses

One of the main reasons many people don't start businesses is because they're afraid of losing their home, car, ability to provide for their families, etc. But the ultimate goal is to generate big wins while reducing your expenses.

A solution to this is to cut your expenses down to the necessities. You don't need to make your life miserable, but simply review your expenses and find affordable alternatives—starting with the most expensive item. Do you really need to pay $1000 per month in rent, or can you share an apartment with a friend to save money?

5 Steps you must take before you start your business

Once you’ve made the decision to start your own business, the natural instinct for many is to charge headlong into getting it off the ground right away.

Starting your own business might have been something that’s been at the back of your mind for years, and now that you’ve finally decided to take the plunge, you don’t want to waste any more time.

Well, despite the urgency you probably feel, it would be sensible to spend some time examining the true viability of your business. Many people rush into their first business and live to regret it down the line. Important decisions made in haste tend to have implications. And while you shouldn’t use that as an excuse not to get on and make your dream happen, there are five things you must do before you start your business.

1. Research the market

Just because you can do something doesn’t mean people will buy it. Or, just because you can do something doesn’t mean people will pay enough or buy enough of it to make you a profit. There’s nothing smart about working flat out running your business for no profit. You won’t be an entrepreneur, instead just a busy fool.

Sometimes the gap in the market that you’ve spotted is there for a good reason. Maybe it’s difficult to make money from it. That doesn’t mean impossible – there are opportunities everywhere – but if the gap seems obvious, ask yourself why no-one else is capitalising on it. When you go looking, you may find a graveyard full of businesses that did what you intend to do, and failed.

Research can be as simple as talking to potential customers, spending a few hours on the internet, or acting as a potential customer and checking out the competition.

10 Financial Tips for Startup Entrepreneurs

If you are young entrepreneur or startup, I applaud you. Building a company is truly one of the hardest things I’ve ever tried to do. A year and a half ago, I decided to quit my job to pursue my dreams of entrepreneurship and have learned a lot of lessons along the way. In this article, I’m going to share some of the financial lessons I’ve learned in the process of starting my business in the hopes that you won’t repeat some of the common financial mistakes many young entrepreneurs make.

#1: Time is Money

When I first started building my business, I spent a lot of time traveling to meetings, meeting with people, planning for meetings, etc. Today, I wish I had all that time back. One of the most valuable assets entrepreneurs have is their time, and every moment you spend doing stuff that is unrelated to your business is time and money wasted. When I was first starting out, I recall one of my advisors saying to me, “a lack of time is a lack of priorities.” It’s true. If you are wasting your time going to meaningless meetings that are unrelated to your business, you can find yourself in a tough financial situation.

#2: Prepare for the Worst, Hope for the Best

Bad things happen to good people, and it pays to be prepared. If you are not financially prepared to take the leap into entrepreneurship, don’t quit your job until you are ready. There is no reason in the world to give up your income when you can work on your project on the side until you have traction. For most single people, I recommend having at least 3 months of living expenses in an emergency savings account. If you are going to be an entrepreneur,

Top 5 Unconventional Ideas For Your Startup

Starting your own business can be a very troublesome task. Finding the dedication and motivation to invest time and money in your business can be difficult, and especially since it’s a startup, it can be even more difficult since the success of your business is based on a small chance.

However, over the past decade, the number of people who have managed to start off with successful businesses from minute setups has increased greatly, which has resulted in more startups than ever before. Companies such as Groupon and Facebook started off on a very small scale, and then slowly rose to break through the business barrier, finding their place as some of the top businesses in the world.

However, if you are looking to start up your own business, there are some things that you need to know. Taking the path commonly treaded by will usually result in failure, so here are 5 unconventional ideas for your startup that might help you gain success:

Create a powerful vision for your business

Most businesses fail because even the owners don’t know where they want to see the business five to ten years from now. Sure, everybody wants to see their business succeed but to have a specific position to reach is something that has a major effect.

A goal can totally change the way you look at options and ideas for your business, and will have a major impact on your employees as well. Therefore, create a vision and mission statement for your business, and hang it up everywhere.

Ask your employees for ideas

Mistakes every start-up owner makes

The hilarious star of the spoof start-up Vooza deliberately acts dumb and promotes stupid behaviour. Witness the recent Vooza video advising budding start-up gurus to pretend to be birds.

Presumably, your start-up pursues more intelligent strategies. Still, doubtless, you commit your share of mistakes.

Here, for some serious insight into what not to do, is an audit of stuff-ups that almost every new small business owner makes.

1. Soft on sales
Not devoting enough time to sales is a particularly common and damaging start-up blunder, according to business coach Alex Pirouz.

Most business owners spend minimal time on selling, fixated on areas such as design and branding, Pirouz says. While those areas count, sales are the cure to most issues that start-ups face, he says.

The revenue yielded by sales affords you the luxury of outsourcing your workload to others, letting you focus on development. Still, Pirouz says, less than 10 per cent of entrepreneurs allot enough time to sales. That is one reason why 80 per cent of businesses fail within the first three years, he says.

2. No homework

Pirouz is also critical of entrepreneurs who take a personal hobbyhorse stance and sell their products based on what they think the market wants. They neglect to check if anyone else cares about solving the problems their products address.

Do your market research, Pirouz advises, adding that entrepreneurs no longer have the excuse that it is costly and difficult – social media platforms like LinkedIn and Facebook make getting feedback a cinch.

3. Hooked on novelty

Contrary to what many aspiring entrepreneurs believe, the key to start-up success is not a one-of-a-kind idea, according to Pirouz. A good idea is just a basis for a business, nothing more, he says.