St. Patrick’s Day – Another Pot of Gold for Businesses

Strategy Plan One

March 16, 2012 

St. Patrick's day - Pot of GoldSt. Patrick’s Day

On the other side of the rainbow, another calendar event brings another commercial opportunity for entrepreneurs.  For St. Patrick’s Day, this special period is no exception.  From a BigInsight survey for 2012 St. Patrick’s Day spending, businesses will reap an estimated $4.6 Billion pot of gold for this year’s event in the US.

St. Patrick’s Day Retail Statistics

According to the National Retail Federation (NRF) the average spending per consumer is estimated to be $35 US, centered on the food & beverage industry, but also ties into the retail industry with festive merchandise purchasing.  Now that’s a lot of shamrocks!

St. Patrick’s Day Event – Business Planning

It is good business practice to plan out your operations and marketing well in advance.  As part of your normal business planning core activities, your business plan may be targeting calendar periods such as this one, promoting your own mix of good & services.  As a well prepared entrepreneur in industries such as retail, and if you rely on bigger calendar events to fuel your annual sales, ensure that you plan accordingly well in advance.  This includes shaping your marketing strategy and aligning your suppliers, months before the actual calendar event.

So, sit back enjoy your green alcoholic beverage and plan out your next commercial opportunity.  With some Irish luck, you will hit your pot of gold.

Strategy Plan One

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Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One

How to Find Statistics and Data to Back Your Business Plan

Strategy Plan One

March 5, 2012 

 

Statistics and DataStatistics and Data for your Business Plan

 

As part of your due diligence as an entrepreneur starting or expanding your business, you will need to develop a detailed business plan.  As you draft up your business plan and the financial documents, you will need to obtain data and statistics that would form and back your financial statements.

 

If you use to much guess work and estimates, pulling figures out of the sky, your business plan will be weak and subjective.  To make your business plan more objective, you should obtain credible sources of data from multiple sources.

 

Here are some helpful tips for gathering statistics and data from multiple sources.

 

Statistics and Data from Experience

If you are going into your business in the same industry you have been working in, you have excellent intelligence on marketing, sales and expenditure data.  Through years of experience in operations and management you will gain the innate ability to draft up projected financial statements from this known data.  Be careful not to steal data or proprietary information, but use your gained skills knowing the industry.

 

Statistics and DataStatistics and Data from Mentors and Advisors

You should always drive and lead the business planning project, but should you need an advisor or mentor, these individuals can provide credible sources of information to you.  Based on their experience and their network of professionals they will help you form more realistic projections.  Once again, a wealth of experience usually reveals a wealth of good statistics and data.

 

Statistics and Data from Surveying

If you develop some objective methodologies in surveying your potential markets for your products and/or services, you may be able to obtain some useful data for your planning.  This should be done with caution and should not be the only source of data you would use.  Ensure you sample randomly and with large sample sizes to make the data more reliable and valuable.

 

Statistics and Data from Federal Government Statistics Branches

To support data obtain through your own sources, you can seek out sources of statistics and data from Federal Government sources.

     US Statistics and Data

  • The US Census Bureau (http://www.census.gov ) provides an enormous catalogue of statistics and data on the US population, markets and the economy.  General economic indicator information can be found within a few easy steps on their website (http://www.census.gov/cgi-bin/briefroom/BriefRm ).  Information is also broken down by industry classification, based on 2007 North American Industry Classification System (NAICS) codes.  USA.gov website provides additional, relevant business and economic linkages to statistics and data.  Please note that information is presented in general overall industry, summary form and you will need to drill down as far as you can get to what is applicable to you.

     Canada Statistics and Data

  • Statistics Canada (http://www.statcan.gc.ca ) is the place to go to obtain statistics and data on the Canadian people, markets and economy.  Statistics Canada promotes their federal responsibility to provide objective statistics and data, with methods and surveying every 5 years.  Statistics Canada also has information broken down into NAICS codes.  Once again, this source can be helpful in analyzing the overall industry statistics and data.

 

 

Statistics and Data from Paid Sources

To round off your basket of statistics and data for your business plan, you can pay for very specific data.  There are many marketing companies out there in the private sector that can provide relevant data for your specific industry and target markets.  Companies can also provide customized surveying for you to obtain the most reliable, objective data.

 

Strategy Plan One

http://strategyplanone.com

Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One

Prepare for Federal Budget Cuts and Changes

Strategy Plan One

February 26, 2012 

Federal Budget CutsFederal Budget Cuts

We have all heard the pre-emptive messages in the media about the upcoming Federal budget cuts, and it doesn’t look pretty.  In addition to the reactions in the world economy and Federal budget cuts, the US Federal election will bring in new economic & business policy change and initiatives.

So how does an entrepreneur prepare for change?  As an initial step, assess the current situation of your business, and any current, relevant policies or initiatives that have an effect on your business.  Under current rules, regulations and initiatives there may be still be an opportunity to take advantage before massive Federal budget cuts or changes comes in.

Potential Economic or Budget Initiatives

Gather as much intelligence you can around upcoming economic or budget initiatives and changes that will have an impact on your business.  You will need to analyze any potential changes and incorporate scenario planning into your core business planning activities.   Be ready to implement your action plan in response with any Federal changes to regulations or tax policies.  Don’t get caught off guard by not completing your own due diligence.

Federal Budget CutsImplementation Plan

Your business should have an implementation plan of action.  Along with strong business planning, be a strong project manager and be ready to implement your plan step-by-step in a timely manner.  If the change will be significant, management of your implementation plan of responses will be extremely important.  The smoother your implementation phase, the less significant impacts your business will experience.

Financial Actions to Federal Budget Cuts

If you know a change will have a significant impact on your financial viability, prepare in advance by bringing in your own budget restraint measures before legislation is in effect.  The budgetary adjustments in advance will lessen the financial pain.

Adjust your sales and marketing plans to generate new revenue streams and tap into new markets prior to big economic changes.  Additional retained earnings may act as a buffer in alleviating the financial challenges.

As the world and local economies continues to experience challenges, activate financial and business changes in advance to be better positioned as an adjusted, economically sustainable business in the new environment.

Strategy Plan One

http://strategyplanone.com

Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One

Business Loan Criteria – How You Can Successfully Acquire a Business Loan

Strategy Plan One

February 23, 2012 

 

Business Loan CriteriaBusiness Loan Criteria

You have almost finished off a detailed business plan and now need to approach lending and funding agencies for possible sources for your business start-up or expansion.

You know that in your financing picture you will need a commercial loan and you know the financial institute will have business loan criteria.

 

There are some key lending criteria you must be aware of when you are applying for a commercial loan.  To be prepared, here are some of the business loan criteria a lender may have:Business Loan Criteria

  • Your personal and business’ financial history, including loans history
  • Your credit score
  • Your personal and business financial positions, and financial statements including balance sheets (assets & liabilities)
  • Collateral and loan security – what assets can be used as collateral or to secure the loan?

The financial institution may also analyze a detailed business plan with respect to the additional business loan criteria:

  • Projected revenues and expenditures – are they realistic, achievable, measurable, and backed by objective information and assumptions?
  • Profitability and other financial trends and indicators
  • Ability to repay the loan based on business revenue and owner’s draws
  • Strong financial controls, procedures and dedicated staff
  • Key financial personnel, including accountants and bookkeepers
  • Business and corporate structures and governance (ie: is there a strong Board of Directors in place or planned?)
  • Operational procedures and track record of operational and financial performance
  • Duration, value, type and use of the loan funds (ie: is it an operational loan, or for the sole purpose of acquiring an asset for operations, or is the loan for the complete start-up costs?
  • Financing mix (ie: personal or business equity investment plus any other sources)

 

As you can see, lending and business development agencies will analyze you and your business’ capabilities when making a decision on a loan, based on business loan criteria.

 

Sometimes you may get declined, and if that is the case, don’t give up.  Rejections mean you must work a bit more to meet criteria.  If you are successful, then you are on your way to business implementation.  Don’t take implementation lightly – every day that goes by, interest is charged on that loan.  Strong and quick implementation will help you achieve the break even point fast and may give you the ability to repay the loan faster.

 

 

Strategy Plan One

http://strategyplanone.com

Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One

Young Entrepreneurs Have an Early Competitive Advantage

Strategy Plan One

February 20, 2012 

 

Young EntrepreneurYoung Entrepreneurs

Young entrepreneurs have the advantage, as youth can maximize their energy, time and commitment towards projects.  If you are a youth considering self-employment, your timing may be great.  The definition of young entrepreneurs is wide open, but has generally been referred to as individuals under 30.  Some government programs for young entrepreneurs cite and target the “30 and under” age category.  This is not to discount the fact that many eager entrepreneurs of all ages will put maximum efforts towards their business ventures.

Competitive Advantages

Young EntrepreneurAs a young entrepreneur, dedicate your time and resources to building capacity.  Seek out career options and avenues for business.  A best practice for you may be to engage in two career – job streams, gaining a valuable cross-section of experience and exposure in those fields.  Having two operational skills sets, along with management experience will give you the competitive advantage.

 

As a young entrepreneur with no commitments, you have the ability to work a day job (or night job) gaining operational and management experience.  Concurrent with employment, you have the opportunity to run or undertake pilot projects to test out your product or service in test markets.

 

Before you are ready to make the jump, ensure that you are confident that you will successfully implementing your business.  You want to make sure that you have the operational, management and financial capacities necessary for business.  If you are not quite ready, take a step back and get more prepared.

 

Mentors for Young Entrepreneurs

It is extremely important that young entrepreneurs engage in a mentoring relationship with successful business people.  Even though you are eager to begin at a young age, you don’t have the massive experience under your belt like an astute, successful business person.  Learn everything you can from successful people around you.  Engage yourself in an open learning environment.  If you are not open to mentoring and learning, you may not get far.  Mentors will open your eyes and doors to other aspects of business such as financing, partnerships, markets, and the little things you may not have thought of.

 

Funding and Business Support Programs for Young Entrepreneurs

As a young entrepreneur, you have some additional avenues for funding support.  Both the US and Canadian governments have business funding programs set aside to encourage youth entrepreneurship.  Tap into these programs, as business grants or low-interest business loans will give you the competitive advantage financially.

 

Business development programs in both countries also have business support programs to help you along in the implementation phase of your business.  Additional marketing programs can assist in the awareness and access to markets.

 

Business Planning

Business planning is a key component to moving forward and taking the next step as a young entrepreneur.  Do not overlook the importance of strong, detailed business and financial planning.  Lending agencies and programs will need to analyze business plans, and will base their funding decisions on the strong merits of your applications and business plans.  Professional assistance in the development of the business plan will give you the competitive advantage.

 

Strategy Plan One

http://strategyplanone.com

Business information, resources and tips for young entrepreneurs

© 2012 Strategy Plan One

Big Love, Big Business Opportunities around Valentine’s Day

Strategy Plan One

February 14, 2012 

 

 

Eager entrepreneurs are always seeking business opportunities around special calendar events.  Valentine’s Day poses another one of those short-term opportunities if you can get in on it early and big.

 

 

The National Retail Federation has posted some favorable survey statistics for this year’s love-filled seasonal event:

- average spending per person (dressed like cupid)… $126.03

- an 8.5% increase in spending over last year

- $17.6 billion estimated spending on chocolates, little red heart and cupid arrows

- on average, people will spend $4.52 on their pets

- men will spend an average $168, while women will spend an average of $86

- rounding off the stats – $4.1 billion on jewelry, $3.5 billion on a night out, $1.8 billion will be spent on followers, $1.5 billion on candy, $1.4 billion on clothing and $1.1 billion on gift cards (including those tacky pop up heart cards)

Stats for the technical shoppers, 54% of tablet owners will research and buy products for Valentine’s Day, while 41% of smart phone users will do the same.

So, don’t overlook great short-term opportunities around big commercial events such as Valentine’s Day.

Strategy Plan One

http://strategyplanone.com

© 2012 Strategy Plan One

Business information, resources and tips for the entrepreneur

Stats courtesy – NRF’s 2012 Valentine’s Day Consumer Intentions and Actions survey, conducted by BIGinsight

 

Business Acquisitions – Great Opportunities for Entrepreneurs

Strategy Plan One

February 12, 2012 

http://www.freedigitalphotos.net/images/view_photog.php?photogid=2337

Business acquisitions can be great options for entrepreneurs who want to step quickly into an existing operation.  There is no need to go through a hefty and risky implementation stage, as all that heavy lifting may have been completed long ago.

 

As an investor – entrepreneur, you need to carefully analyze an acquisition and to review many aspects attached to the acquisition of a business.  Acquisitions are not risk free and as an informed entrepreneur, you need to conduct your own business case analysis to see if this is the right fit for you, or if establishing a business from scratch is the way to go.

 

Here are some tips and information on business acquisitions for your entrepreneurial considerations:

  • Ensure you are well equipped and prepared in all capacities (operational, management and financial capacities) before undertaking business and acquisition opportunities.
  • As part of your analysis, you must conduct a business valuation process.  Business owners will have an asking price; you will need to conduct your own due diligence to determine fair market value.
  • Part of your valuation analysis will be to break down the sale price on a business into the asset value and value attached to goodwill.
  • It is always advisable to seek out a Certified Business Valuator (specialized accountant) to conduct differing levels of valuation depending on scale/size of the business.
  • Seek out the assistance of a lawyer to help in the legal acquisition process and to help formulate legal acquisition agreements.
  • Be aware of contingent liabilities and other owner’s terms and conditions.
  • Look at key financial information, indicators and trends such as revenue, net profit, owner’s draw (salary), assets, liabilities, current ratios and profit margins.  It is advantageous to have this discussion with a qualified accountant on financial analysis of the business.
  • Check if the acquisition package comes with owner training or skill set / business training?  You should consider at least a small agreement for the transition period, and not just have the previous owner throw the key at you and leave.
  • Business planning will be essential, even for the acquisition of an existing, viable business.  Prior to acquisition you need to develop a detail business plan, and you will need to approach sources to acquire the funding necessary.
  • Analyze the projected operations, markets and financials surrounding this business going a few years into the future.  What are the projected trends, prospects, opportunities and risks?  Seek outside professional opinions where needed.

Benefits of business acquisitions:http://www.freedigitalphotos.net/images/view_photog.php?photogid=1981

  • The financial risk is less for existing viable businesses that have demonstrated a track record of earnings, profits and stable operations.
  • No risky implementation phase vs. risk in a start-up scenario.
  • Immediate access to cash flow, markets, customers, human and financial resources, and partnerships.
  • The new owner can realize a potential immediate return on investment and equity, and depending on financing of the acquisition, realizes a break-even point sooner.
  • Financing may be easier to secure, as financial institutions can see a track record of financial performance.
  • Not only are you a new entrant by acquiring the business, but you may be decreasing the competition, as this business may have competed against you.
  • Acquiring the intelligence, strategies, proprietary knowledge of the business and previous owner provides you with a competitive advantage.

 

As an entrepreneur you will need to decide what will be the best self-employment opportunity for you, whether to start a business from scratch, or to acquire an existing successful business.  Always seek professional services to help inform your decisions on opportunities.

 

Strategy Plan One

http://strategyplanone.com

© 2012 Strategy Plan One

Business information, resources and tips for the entrepreneur

Dealing with Difficult Customers

Strategy Plan One

February 3, 2012 

As entrepreneurs and small business owners, we all face the occasional customer that is not happy about a product, service, staff or the business itself.  Here are some helpful tips to alleviate pressures and turn a consumer from angst to repeat customer.

Take the time to listen to the full concerns of the customer    

Spend time with the customer to try and resolve.  You are in the game of building customers and your business survival depends on the customer, so invest time to resolve.  When a complaint comes forward, the customer wants to be heard.  Don’t be confrontational, but listen and be patient and you will notice a natural decline in the tone and behaviour of the customer.  After the customer’s initial rant, he will be looking for a response from you.  Take this as the opportunity to resolve and build a relationship.

Right or wrong, build a solid relationship with the disgruntled customer

Engage in conversation with the customer; this discussion is a two-way conversation.  Be empathetic towards the customer (not to be phoney, but be genuine in your actions).  Value the feedback and let the customer know that.  These simple methods of tactful communications will get the consumer on your side.

Right or wrong, use strong negotiation skills to find common ground 

The customer may never be happy and may want you to do everything under the sun to make the situation right, including providing the goods or service for free.  Depending on the severity of the scenario, you may have to provide something for free or an alternate product or service at cost.  With the relationship of trust you have built with your customer, you have an opportunity to mitigate the damage and find a mutually acceptable position.  Find what would make you and the customer happy.  If you have moved miles to that mutual ground, don’t be afraid to back down if the customer is still unreasonable.  As a minimum, depending on your jurisdiction, you will have to adhere to consumer regulations around refunds and honouring warranties…no sense in arguing that point.  Leave the scenario knowing you did your best to resolve and that you put effort in to building a relationship and a repeat customer.

Where the customer is clearly wrong, tactfully & transparently state your company’s position

A small fraction of the disgruntled will be completely unreasonable.  Be open and transparent, and inform the customer of your policies and inform of impacts of collective scenarios (such as honouring every complaint in a similar manner).  The customer may leave unhappy but you need to be consistent in your business practices.

Learning experience to build a better Customer Relationship Management Plan

Every scenario you encounter in your business is a learning opportunity. The customer complaint process forms part of your Customer Relationship Management (CRM) Plan.  Be prepared – part of your business planning exercise would be to build theCRMinto the operational plan.  Be prepared in advance with policies and procedures to handle challenging customers.  Ensure staff is trained to handle customers in an appropriate manner.

Whatever customer challenges arise, be prepared in your business and handle tactfully and professionally.  Your end goal should be to always find mutual resolution and to turn those angry customers into happy return customers.

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur

Free: The Benefits of Free or Trial Samples

Strategy Plan One

February 2, 2012 

If you are in a goods or services business, you obviously have reviewed several possible, different marketing activities to build customers.  In this batch of activities, one of the most effective marketing outreach activities may include providing free or trial samples.

 

You may think or ask yourself, why provide free samples. Or you may be thinking “this is going to cost me a fortune”.  You may be surprised at the results.

 

The context and delivery is different whether there is a physical location or a location off the track.  Websites or software that offer trial periods, take on another dynamic as well.  All have similarities in terms of benefits that can result from these activities.

 

Here are some potential benefits in providing free samples:

 

- Drives traffic to your location, website, etc

- Gains initial interest in a part of you suite of products, goods or services

- Builds brand recognition

- Gains interest from non-customers in close proximity

- Builds a higher conversion rate from pedestrian or visitor to consumer

- Builds relationships

- Builds immediate awareness of product or service

- No investment, no risk on the consumer side

- Experience is the richest, as opposed to an ad in a newspaper (different purposes)

- Free sampler turning into a consumer is a repeat customer

- Free offers spread like wild fire, as one customer will broadcast to others quickly

- Less costly than other forms of marketing

- “Free” is a motivator to try, later converting to buy

- Builds a database of potential customers if asking for basic info (such as a website providing trial provided you give email address)

- Providing free samples is a non-intrusive method of marketing

- Staff generally like to provide give-aways (differing operational activity)

- You convert lag or down time in your business to productive time, eventually generating more customers, more revenues and a stronger business

 

TIPS

  1. Plan for this – write out a strategy, goals, operational issues, budget, method to capture data and results, etc.
  2. Remember to put your best foot, best product, best sample forward (i.e.: bakery sample of fresh bread, not liquidating days old bread)
  3. Ensure the free sample will be consistent with the paid product.  Do not mislead potential customers.
  4. Control your costs and scope on the offer (you know you will be able to budget for X number of free samples)
  5. Keep track of your data, results, and all important – how many new customers you gained out of this activity

 

You will be surprised at the Return on Investment with this marketing activity of free samples.  Keep track of the event or offering, provide a secondary offer and keep in communications with those clients, as you have created relationships.

 

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur

Another 5 ways to Reduce Expenses in your Business

Strategy Plan One

February 1, 2012 

Like the previous blog, this is intended to provide some ideas for cost saving measures in business.  Too many times we have seen companies not adjust with environmental or economic conditions.  Every option should be analyzed as one cut here, could be devastating to another unit over there.  Some of these measures could be temporary until the climate improves, while other measures may be necessary for long-term survival.  As always, weigh your options carefully.  Here are some additional considerations for budget reductions:

Information Technology (IT) Reductions

As you may know, every person, every cubicle and office may not need devices.  Sharing peripheral devices, such as printers, is the way to go, linking in all computers around the office to a common device.  Many organizations and businesses have moved to laptops and docking stations, instead of buying desktops and laptops for each employee.  Ensure you company has developed standard procedures for IT acquisitions, replacement, repair, and decision making.  Request for Proposal processes will allow your organization to benefit from low cost providers.

Carefully weigh your options when it comes to printers, as some of the commercial models can cost you hundreds of dollars a month.

Travel Costs

In times of financial difficulties, travel may be discretionary.  You will need to assess the pros and cons of travel to have meetings with clients, partners or staff in your business against lower cost video or audio conference calls.  Can you temporarily afford to move to having conference calls instead of travel?  The answer in some cases may be yes.  We have known clients that have saved $5,000 in travel costs per quarter per traveler.

Marketing and Advertising

In tight economic times, consumer spending will be down, along with consumer exposure to advertising (ie: buying less, entertainment outings may be decreased).  Be smart about your advertising placements.  This doesn’t mean the complete elimination of your marketing budget, but to use the marketing dollars wisely.  If you have done accurate reporting on marketing activities you should have a track record of the best Return on Investments (ie: increased revenues and profit through the costs of each marketing activity).

Wherever possible, you may want to partner with another company and conduct some joint marketing and advertising.  You may gain access to partner resources to assist in your efforts, such as access to another company’s marketing manager, or to piggy back on existing marketing and advertising avenues.

Client Perks and Benefits

If you have been rewarding clients, this may have to be temporarily discontinued until a more favourable environment.  Whether you consider this to be a necessary marketing expenditure to keep a client, or as one of the add-ons in your goods & services package, you may need to eliminate all or part of the benefits and perks, or it could have a significant impact on your bottom line.  Are the slim resources for perks and benefits to the client or for you to survive?  Like all measures, analyze these options with caution, as a lost customer through financial restraint measures is lost revenue.

Employee Perks and Benefits

The larger your staff size, the more costly the perks and benefits can be.  It would be a good idea to keep essential benefits intact such as medical, dental and retirement savings plan program benefits, but perks such as free memberships or discounts on items the company must pay for could be eliminated.

If you are in the realm of cutting costs, implement with caution and always monitor the impacts and results frequently.  Revise if necessary if the impacts are too severe.  Through your diligent measures, your financial picture will become healthier, and your business will be in a better position to be more profitable when the economic climate become more favourable.

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur