The Small Business Planner

The Complete Entrepreneurial Guide to Starting and Operating a Successful Small Business

Larry Wilson

• Publisher: Morgan James Publishing
• Year: 2011
• ISBN:
  9781600379062
• Topic: Business
• Subtopic: Business General
• Index: Business

The entrepreneur's comprehensive companion: "Clear, concise, and to the point... [The author] has an excellent grasp of running a small business." —Steve Pallen, President, R&D, E-Metrotel What are the ten most common marketing mistakes? How do you avoid costly mistakes when planning for a new business? What should be avoided when planning a business web site? These are just a few of the many important questions answered in The Small Business Planner, the most comprehensive book available to assist new and established entrepreneurs in operating a successful enterprise. Avoiding jargon, the book provides access to numerous free templates on the companion website including: Business and Marketing Plans in MS Word; Profit & Loss projections, Cash Flow projections, Start-Up Cost Analysis, and many more in MS Excel, all complete with formulas and ready to use. The companion site also includes a forum for entrepreneurs to post important questions regarding their business. The Small Business Planner provides a detailed checklist for new entrepreneurs to ensure that important tasks and processes are not overlooked. The Feasibility Analysis will let you know if your business idea will be profitable and competitive, and more than half the book is dedicated to generating revenue. Essential Marketing topics include: Planning and Research, in which the author introduces his own easy-to-use model to create an effective message, Advertising, Choosing the Right Media, Databases, Selling Skills, and Customer Service. Finance covers: Bookkeeping Basics, Financial Statements, Setting Goals and Measuring Results, and Receivables Management. Operations topics include: Creating Effective Web Sites, Employee Relations, and Contingency Planning. Entrepreneurship can be very rewarding if the functions in all three business modules are executed properly. Now the small business owner can wear all hats effectively—and avoid making costly mistakes by using The Small Business Planner.

Section 2:

marketing

Generating revenue and gaining customers for life.

2.1 Key Marketing Terms

Marketing is the actual managing of markets to bring about exchanges that satisfy needs and provide value. There are some terms in this definition that play a key role in understanding this process and require further explanation.

Market is a set of actual or potential buyers of a product or service. These buyers share a particular need that can be satisfied through exchange.

Needs represent a desire to fill a void – to obtain something that is lacking. Needs are satisfied with Benefits and people do not generally buy anything unless there is a need. Our job as marketers, is to determine who our customers are and what their core needs really are. Determining needs is detailed later in the Marketing Planning Process section. This is a good time to introduce a concept that will be repeated several times: “Your customer does not need what you are selling!” Yes, you heard right. But, your product or service must provide Benefits that satisfy the customer’s need. It may sound a little confusing now but it should come together for you later in this section.

Value can be defined as the usefulness or importance of a product or service to the possessor. Value is always determined by the customer as a balance between price and quality. All marketers strive to provide value. Low price does not necessarily equate to value if the product is worthless to the customer or does not satisfy their needs.

Benefits are attributes of a product or service that satisfy core customer needs. They answer the question, “What’s in it for the customer?” Benefits will sell products and services.

Features are often confused with benefits. Unlike benefits, features do not satisfy needs and do not sell a product or service. They simply differentiate a product or service from that of the competition and answer the question, “Why should I buy from you?”

Marketing Mix – The 4 Ps of the marketing strategy which are designed in to the mix of Product, Price, Place, and Promotion to develop effective tactics.

2.2 Ten Common Marketing Mistakes

Very few entrepreneurs seem to have a good understanding of marketing and the marketing planning process. When I ask small business owners what they think marketing means, most will say advertising, promotion, or sales. Although these activities all play an important role in the delivery of the action plan, they are not part of the research and development required to create the right message and strategy necessary for the delivery of a successful marketing plan. Doing it right helps business owners understand the dynamics of the exchange process and initiate tactics that will generate revenue. Given the importance of this aspect of business, it is surprising that so many entrepreneurs take their message to the marketplace without first doing their home work. The result is most often the creation of junk mail, ads that are ignored and a negligible return on advertising dollar. The following are some of the most common small business marketing mistakes that I have encountered. Each will be discussed in more detail later.

MISTAKES MADE BEFORE ACTION PLAN IMPLEMENTATION

Lack of Focus

Most new and many seasoned business owners assume that everyone is their customer. This is a very common problem with small businesses that don’t want to lose a sale and the result is a diluted message that no one pays attention to. This mistake is overcome through target market analysis and market segmentation. This process will narrow the target market to ensure that the resulting message is focused. There may be more than one distinct market segment identified, and that is fine, provided that a different strategy and action plan is developed for each. You will find this topic discussed in more detail in Section 2.4 – Target Marketing.

Misunderstanding Customer Needs

The truth is that you sell entirely to needs and if you don’t get this one right it will be very costly. If the need is not properly identified then people will not buy. Your customer does not necessarily need what you are selling, but your product or service must have a benefit that satisfies their need. If you don’t have a clear understanding of your customer and their core needs then how can you possibly expect them to buy your products or services? To get this right, entrepreneurs must be able to look at the world through the customer’s eyes instead of making assumptions that are incorrect by viewing the world from their own perspective. Due to the fact that market variables and needs change, this process should be repeated on a regular basis. This topic is also covered in Sec. 2.4.

Name

What’s in a name? When it comes to marketing – everything! Very little thought goes into many business or brand names from a marketing viewpoint. One of the biggest mistakes involves the utilization of personal surnames as a business brand. This is commonly accepted practice for professional firms or contractors but it can be a tremendous roadblock for most other types of business. There is a huge cost associated with branding a name. Many names adopted by small businesses are confusing. Thought should also be given to the alphabetical positioning of your name in directories. Unless you’ve already paid the high price of making your name a household word, it should let people know what you do. If it doesn’t, consider changing it, or attach a tag line to describe what you are all about. You will find this topic discussed in more detail in Section 2.5.3 – Positioning.

Lack of Competitive Intelligence

Unless you know your competition inside-out, an effective positioning and marketing strategy is impossible to develop. Learning who they are; where they are; what their prices are; their strengths and weaknesses; how they reach the market; and how their customers perceive them, are key questions that must be answered to successfully differentiate you from the competition. This will also assist with your own pricing strategy and promotion effectiveness. You will find this topic discussed in more detail in Section 2.5.1 – Competitive Advantage.

MISTAKES MADE AFTER ACTION PLAN IMPLEMENTATION:

Poor Image

Image can be everything in marketing and a poor one creates a problem that is difficult and sometimes impossible to correct. How many chances do you get to create a good first impression? Think about that when you create your own logos, brochures, flyers, displays, web site or anything else that a potential customer will use to judge your professionalism and credibility. Lack of resources is often part of the problem here, so if you can’t do it right, hold off until it can be produced professionally, even if it means completing the project in phases. A three page professionally designed and developed web site is better than an eight or twelve page site that looks home made. You will find this topic discussed in more detail in Section 2.8.1 – Creating Effective Ads.

Integrated Action Plans

Combining a single strategy and message for multiple market segments generally results in junk mail or ads that are confusing and ignored. If more than one market segment is identified, a different strategy and marketing mix (4 Ps - product, price, place, promotion) is required for each. This means a message for the secondary market that addresses different needs than those of the primary market. You will find this topic also covered in Section 2.8.1 – Creating Effective Ads.

Using Your Name as Headline

Again, unless it is a household word, using your name as a headline for your ads is one of the biggest and most common mistakes a small business can make. In actual fact, you are competing with thousands of other advertising messages that people are bombarded with every day. Branding has a high price tag attached to it. If the prospective customer cannot associate your name with a benefit, it will most likely get filtered out. Using a good headline or graphic illustrating the benefits is much more effective at getting their attention than using your own small business name – often done for the sake of vanity. This topic is discussed in Section 2.8.1 – Creating Effective Ads.

Poorly Developed Media & Sales Plans

Poorly developed strategies in this area most often results in wasted dollars spent on advertising media that have little chance of delivering results. If your business sells primarily to consumers (B2C), you should be concentrating your efforts on advertising – getting your strong message to the target market in the appropriate places. If your enterprise sells primarily to other businesses (B2B), then you should be focusing more of your attention and resources on creating effective sales tools and training with less emphasis on advertising. You will find this topic discussed in more detail in Section 2.10 – The Marketing Budget and Media Plan.

Poor Customer Service

This is the primary reason why customers switch to the competition. Retention strategies are often overlooked by companies of all sizes. It will cost you much more to bring a new customer on board than it will to up sell or retain an existing one. A satisfied customer is the best way to convince others to buy from you. What is the ten year reward in revenue from one good customer? A customer who is dissatisfied will not only starve you of this ten year revenue, but convince others to stay away. When is the last time you conducted a customer satisfaction survey? Information is power and this is where a good database and CRM (Customer Relationship Management) software is essential. You will find this topic discussed in more detail in Section 2.12 – Customer Service.

MARKETING RESEARCH - Designing the Strategy

2.3 The Marketing Planning Process

Having assisted hundreds of new and experienced entrepreneurs through the stages of business planning, I noticed one common thread. Almost all of them went into the marketplace with a message that was based on their own bias. “It’s all about me” doesn’t cut it in the real world of changing customer needs and intense competition for a limited market share. The importance of taking your time and creating an effective message based upon sound strategy development cannot be emphasized enough. This means understanding all aspects of your primary, secondary, and if applicable, tertiary markets along with a complete understanding of the competition. Once this preliminary research is completed and analyzed, an action plan with effective messages can be developed. These messages become the heart of all promotional efforts leaving only the task of determining where, when and how to deliver them.

A plan is similar to a roadmap. It is meant to take you from a starting point to a specific destination by the most effective route. When planning a trip, people lay out the route they are going to take from start to finis...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• What People are Saying
• Preface
• Contents
• List of Figures and Tables
• Introduction
• Starting your own Business
• Marketing
• Finance
• Operations
• Conclusion
• Resources
• About the Author
• Index