Let's face it. With the market dropping hundreds of points daily right now you not only need ways to protect your money -- but a big way to bounce back..Don't fall for it. If you need the safety and liquidity of a money market, go for a money market account. Beware of any "cash" account that offers significantly higher yields. It's either charging rock-bottom fees or taking on extra risk that leaves your account open to failure.Here's how dividends can make you a fortune.
Let's rewind to 1950, put $1,000 in your hand and let you choose between two solid stocks to invest in for the next five decades. Your option is to invest in Standard Oil of New Jersey (now Exxon) or International Business Machines, better known today as IBM.
Over the next 53 years Standard Oil earned a compound average of 14.42% while IBM garnered just 13.83% -- a difference of just 0.59 percentage points. I'll give you some added info. Oil stocks went from 20% to 5% of the overall market value between 1950 and 2000, while technology stocks soared from 3% to nearly 18%.In spite of the soaring market value of tech stocks and the seemingly paltry difference between earnings -- Standard Oil was not only the better investment you actually come out an astounding $300,000 ahead!
How can this happen? By reinvesting your dividends. You see, in the scenario above, IBM's share price actually grew more than three percentage points a year over Standard Oil's, but because Standard Oil had a higher annual dividend return -- 5.19% vs. 2.18% -- you end up with $300,000 more in cold, hard cash
Tuesday, December 30, 2008
Thursday, April 3, 2008
Personal affairs through a Trust
Reason number 1 ? protect your assets from creditors.
When you run your affairs in your own name you expose all your assets to the mercy of creditors. So if you ever get into financial trouble you could end up losing everything but the shirt off your back! One of the main benefits of a trust is that you are able to separate yourself from your assets, thus providing protection of those assets from creditors in the event of you ever being sued. With the correct estate planning you are even able to protect your business assets from creditors as well.
Reason 2 - You don`t pay executor`s fees with a trust.
Your estate and ultimately your family will pay 3.5% plus VAT or 3.99% of the gross value of your estate away in executor`s fees. But if you manage your estate through a trust, NO executor`s fees are payable. It doesn`t seem like much but listen to this example to get an idea of what 3.99% of the gross value of your estate could amount to.
Work out your own current scenario by taking the value of your gross estate today and multiplying it by 4 and then multiplying that amount by 3.99%. This will work out the kind of saving you would benefit from if your assets were owned by a trust and you died in 12 years time.
The third reason is the state won`t freeze your assets.
When a person dies their estate is immediately frozen and it takes on average two years to wind up an estate. This means that your family has very little access to your assets on your death, potentially causing huge problems for your loved ones. But in a trust, the assets are not frozen, so your family will be able to access your estate immediately.
Reason number 4: you get absolute security in the event of a disability.
If you were in a coma and could not continue to manage your own affairs a curator would need to be appointed by the high court. This would cost thousands of rands even the curatorship is not contested. In a trust all that would happen is that you would be relapsed as a trustee and your affairs would carry on as normal. So your family and business will always remain financially secure, even in difficult or unfortunate times.
Reason 5: You could save 20% in donations tax
You will pay donations tax at a rate of 20% on any donation in excess of R100,000 per annum or R200,000 in the case of married couples. However, with a trust, no donations tax is payable on any capital or income passed to a beneficiary of the trust.
So for example: Let`s assume that you wanted to give R500,000 to one of your children. In your private capacity you would pay R60,000 in donations tax while through a trust you would not have to pay any donations tax.
The 6th Reason is you won`t pay any estate duty with a trust
One of the main disadvantages of running your personal affairs in your own name is that estate duty is paid on the future growth of your assets. But with a trust, no estate duty is payable.
So for example: You pay estate duty at a rate of 20% on net assets in excess of R3 500,000. So if your net estate was worth R5,500,000 and you died leaving your entire estate to your children they would pay an estate duty fee of R400,000. If these assets were in a trust NO estate duty is payable.
And lastly -
You are able to regulate your ex spouse`s maintenance with a trust
A main disadvantage in case of a divorce is the fact that if maintenance is paid for a child to an ex-spouse, the ex-spouse would have a capital claim against your estate for all future maintenance at the time of your death.
When you run your affairs in your own name you expose all your assets to the mercy of creditors. So if you ever get into financial trouble you could end up losing everything but the shirt off your back! One of the main benefits of a trust is that you are able to separate yourself from your assets, thus providing protection of those assets from creditors in the event of you ever being sued. With the correct estate planning you are even able to protect your business assets from creditors as well.
Reason 2 - You don`t pay executor`s fees with a trust.
Your estate and ultimately your family will pay 3.5% plus VAT or 3.99% of the gross value of your estate away in executor`s fees. But if you manage your estate through a trust, NO executor`s fees are payable. It doesn`t seem like much but listen to this example to get an idea of what 3.99% of the gross value of your estate could amount to.
Work out your own current scenario by taking the value of your gross estate today and multiplying it by 4 and then multiplying that amount by 3.99%. This will work out the kind of saving you would benefit from if your assets were owned by a trust and you died in 12 years time.
The third reason is the state won`t freeze your assets.
When a person dies their estate is immediately frozen and it takes on average two years to wind up an estate. This means that your family has very little access to your assets on your death, potentially causing huge problems for your loved ones. But in a trust, the assets are not frozen, so your family will be able to access your estate immediately.
Reason number 4: you get absolute security in the event of a disability.
If you were in a coma and could not continue to manage your own affairs a curator would need to be appointed by the high court. This would cost thousands of rands even the curatorship is not contested. In a trust all that would happen is that you would be relapsed as a trustee and your affairs would carry on as normal. So your family and business will always remain financially secure, even in difficult or unfortunate times.
Reason 5: You could save 20% in donations tax
You will pay donations tax at a rate of 20% on any donation in excess of R100,000 per annum or R200,000 in the case of married couples. However, with a trust, no donations tax is payable on any capital or income passed to a beneficiary of the trust.
So for example: Let`s assume that you wanted to give R500,000 to one of your children. In your private capacity you would pay R60,000 in donations tax while through a trust you would not have to pay any donations tax.
The 6th Reason is you won`t pay any estate duty with a trust
One of the main disadvantages of running your personal affairs in your own name is that estate duty is paid on the future growth of your assets. But with a trust, no estate duty is payable.
So for example: You pay estate duty at a rate of 20% on net assets in excess of R3 500,000. So if your net estate was worth R5,500,000 and you died leaving your entire estate to your children they would pay an estate duty fee of R400,000. If these assets were in a trust NO estate duty is payable.
And lastly -
You are able to regulate your ex spouse`s maintenance with a trust
A main disadvantage in case of a divorce is the fact that if maintenance is paid for a child to an ex-spouse, the ex-spouse would have a capital claim against your estate for all future maintenance at the time of your death.
The Science of The Stock Market
The first one you need to look at is the Dividend yield.
A dividend is the money paid on each share from the company`s net profits. Small companies often don`t pay dividends ? they plough their profits back into growing their business. But if a large company doesn`t increase its dividend or cuts it, you can bet it needs the money simply to survive. As the share price falls though, the dividend yield (dividend compared against share price) will rise. This could make the stock a relative bargain.
The second and most important ratio is the Earnings per Share or E.P.S.
It represents a company`s post-tax profits divided by the total number of shares in issue. Generally, an E.P.S. higher than the cash flow per share (shown on the cash-flow statement in the company`s annual report) indicates a company with strong value. A steadily rising E.P.S. indicates financial health and growth.
The next ratio is the Dividend Cover.
This tells you whether a company can afford to pay its shareholders their dividend or not. Divide the E.P.S. by the dividend announced by the company. The result should be 1 or higher. If it`s less than 1, avoid it. The firm hasn`t got the cash to pay its dividend and is digging into cash reserves.
The fourth ratio is the Price-Earnings Ratio or P.E.
It`s calculated by dividing the share price by the earnings per share. If you`re investing for the mid to long term, look for shares with a low P.E. compared with other firms in its sector. If you want a fast profit though, you could buy a stock with a high P.E. Although these shares are overvalued, the price will have upwards momentum. Investors who move quickly can make money. But you must sell the stock before it rebounds.
The next one is the Price/sales ratio or P.S.R.
Use this ratio for new companies with fast growth, but no profits yet. Divide last year`s sales figure by the market value of a firm. Buy if a stock has a low P.S.R. compared to others within its sector ? especially if it`s less than one. For market leaders, the P.S.R. will be around 3 or 4.
The final ratio is the Return on capital employed or R.O.C.E.
This measures management performance. The R.O.C.E. is calculated as profits before tax and interest on loan repayments, divided by capital employed. In sectors like retail, the share price will increase if there is a rising R.O.C.E. A company can improve its R.O.C.E. by buying back shares from the stock market. This can also improve its share price. Buybacks are a definite buy signal for you ? but you have to buy as soon as the buyback is announced to get the maximum financial gain.
A dividend is the money paid on each share from the company`s net profits. Small companies often don`t pay dividends ? they plough their profits back into growing their business. But if a large company doesn`t increase its dividend or cuts it, you can bet it needs the money simply to survive. As the share price falls though, the dividend yield (dividend compared against share price) will rise. This could make the stock a relative bargain.
The second and most important ratio is the Earnings per Share or E.P.S.
It represents a company`s post-tax profits divided by the total number of shares in issue. Generally, an E.P.S. higher than the cash flow per share (shown on the cash-flow statement in the company`s annual report) indicates a company with strong value. A steadily rising E.P.S. indicates financial health and growth.
The next ratio is the Dividend Cover.
This tells you whether a company can afford to pay its shareholders their dividend or not. Divide the E.P.S. by the dividend announced by the company. The result should be 1 or higher. If it`s less than 1, avoid it. The firm hasn`t got the cash to pay its dividend and is digging into cash reserves.
The fourth ratio is the Price-Earnings Ratio or P.E.
It`s calculated by dividing the share price by the earnings per share. If you`re investing for the mid to long term, look for shares with a low P.E. compared with other firms in its sector. If you want a fast profit though, you could buy a stock with a high P.E. Although these shares are overvalued, the price will have upwards momentum. Investors who move quickly can make money. But you must sell the stock before it rebounds.
The next one is the Price/sales ratio or P.S.R.
Use this ratio for new companies with fast growth, but no profits yet. Divide last year`s sales figure by the market value of a firm. Buy if a stock has a low P.S.R. compared to others within its sector ? especially if it`s less than one. For market leaders, the P.S.R. will be around 3 or 4.
The final ratio is the Return on capital employed or R.O.C.E.
This measures management performance. The R.O.C.E. is calculated as profits before tax and interest on loan repayments, divided by capital employed. In sectors like retail, the share price will increase if there is a rising R.O.C.E. A company can improve its R.O.C.E. by buying back shares from the stock market. This can also improve its share price. Buybacks are a definite buy signal for you ? but you have to buy as soon as the buyback is announced to get the maximum financial gain.
- A stock may appear good value on the basis of one ratio, but poor value on another. Use a number of ratios in analysing a stock and look for consistency before selecting the stock you will invest in.
- You must always remember though, the stock market is unpredictable because of the market sentiment factor, so there are times when shares drop in value without any warning, you must be prepared for this too. But stick to a successful picking strategy and you could build a safety barrier for your investments.
Wednesday, April 2, 2008
Blogs and E-letters
Both (a.k.a. e-zines or e-mail newsletters) are ideal marketing tools for small-business owners. They give you two inexpensive ways to communicate with your customers, give them useful advice, and reveal your latest products and services.
But though they have the same purpose, they are very different.
First, let’s define our terms.
A blog is a website that you can create yourself using Web-based software. Blogs tend to have a personal flavour and speak in the distinct voice of the blogger. A typical blog combines text, images, and links to other blogs, Web pages, and other media related to its topic. Unlike a traditional, static website, the content or information posted on a blog is up-to-the-minute, frequently updated (although it doesn’t have to be), and displayed in reverse chronological order, the most recent posting first. Also, readers can contribute their comments, turning the blog into an online conversation.
An e-letter is basically an electronic newsletter that you send out regularly via e-mail to a list of people who have given you permission to do so. The content of an e-letter is more evergreen. It can be anything from news about you and your business to tips that demonstrate your expertise. When you use an e-mail marketing service or software, it’s also very easy to design and send.
The main difference between the two is this: You "push" an e-letter to your list so you control the contact, while a blog is a "pull." Readers have to go there on their own, so you have a lot less (or no) control over the contact. The quality of the readers is different too. E-letter readers went out of their way to sign up, so you can consider them a lead for your marketing messages. They’ve essentially raised their hands and asked you to keep in touch. Blog readers, on the other hand, are information hounds, so they may not be as responsive.
Let’s compare.
A blog is easier to set up - but not by much. It literally takes 10 minutes to create, and you don’t need any technical expertise. However, you have less freedom with the layout due to the limitations of most blog publishing software (especially the most popular and free ones, like blogger.com and typepad.com). With an e-letter, on the other hand, it takes a bit more time to create the prototype and template, whether in text or html. But once that’s done, you just type the text for each issue into that template and send it out.
It takes more time to write an e-letter. Most small-business owners take time to write and edit their e-letters, as they should. Because you’re pushing your e-letter to people, asking them to read what you’ve written, it has to be well-thought-out, concise, and to the point. On the other hand, since a blog tends to be made up of snippets of ideas posted frequently (sometimes several times a day), bloggers don’t labour over their text.
Plus, a blog is less formal, because it’s like a conversation. That means "you can speak in your everyday voice, which is (hopefully) friendly and approachable." So says Colleen Wainwright, a.k.a. The Communicatrix, a graphic designer who blogs. "On a blog, the expectations are much lower for both grammar and formality. Also, you can combine personal and professional elements in your blog; how much of each depends on what you’re comfortable with and what your prospective clientele will be comfortable reading. You can write about anything (and many people do), but if you’re using it to promote your business, it will be most effective if you focus and use the blog to establish your credibility within that narrow niche."
My e-letter goes out weekly, and between the writing, editing, and layout, I spend approximately one hour on each issue. My blogging takes a half-hour on a Sunday morning. That’s when I draft and schedule my three posts for the week. Each one is usually no longer than a paragraph or two with a couple of links. At least one post is simply a link to an article I like, plus a little intro from me about why I think it’s relevant. If your e-letter goes out more frequently - like Early to Rise - the time you spend on it expands by leaps and bounds.
It takes more time to maintain a blog. For most people, creating fresh content several times a week, or even weekly, requires a certain mindset. It isn’t even that it takes so much time to create the material. (Blog posts are mostly very short pieces accompanied by a link.) What takes time is getting into the groove of blogging - and that involves much more than posting to your own blog. It includes visiting other people’s blogs, reading their posts, and commenting on them. It’s not difficult. It just takes time and practice to get into that mode. E-letters, on the other hand, don’t carry the same expectation of freshness, so there is a lot less pressure to produce. You send it out when you like - daily, twice-weekly, monthly, or even occasionally.
A blog attracts more Web traffic. Even if no one ever reads your blog, posting it regularly can be a tremendous boon to your search engine rankings because search engines love fresh content. Any website with new content will come up earlier in search engine rankings than a site that hasn’t been changed in months (or years). Meanwhile, the traffic an e-letter drives to your website consists of those who already know you, not new prospects and leads.
An e-letter makes more sales. Some people make money by displaying ads on their blogs - but if you want to sell products or services, an e-letter is more effective. Why? Because with an e-letter you "push" (send) your offer to your prospects, then watch while they click and, hopefully, buy. Because a blog is a "pull," there’s no way to measure or track sales. On a blog, you show how much you know. You shouldn’t expect to "get work" from your blog, but it will be good for driving traffic to your website. And once you get people to your website, they can sign up for your e-letter… which will allow you to sell to them directly.
Both inspire trust in the visitor. Inspiring trust depends more on the tone you take than the format. If you’ve spent time composing your e-letter, it will show, and that certainly inspires trust. A blog, with its rapid-fire and often impassioned comments, can convey a sense of impulsiveness, which rarely inspires trust. Trust is important on the Internet (a very anonymous medium), because unless people trust you, they’re not going to buy from you.
If you don’t already have a website to promote your business, a blog is a good first step in that direction. It provides a way for people to find you online without your spending a lot of money or time working with a Web designer or learning Web design software. In fact, some people use a blog as their one and only Web presence.
If you already have a website and are ready to branch out with an e-letter or a blog, which one should you start with? That depends on your goal. If your goal is to generate revenue from a known group of prospects, an e-letter is the right choice. If you are less focused on revenue-generation and are looking instead to position yourself as an expert and make it easier for new prospects to find you online, a blog is better.
If both goals make sense in your business plan, by all means do both. Blogs and e-letters work beautifully hand-in-hand.
Here’s how we do that at Marketing Mentor: I want to be able to reach out to my qualified prospects on a regular basis, to keep reminding them who I am and what I have to offer. I don’t want to wait for them to come back to my website or have time to read my blog. I want to be in their inboxes, rather than on their browsers.
But though they have the same purpose, they are very different.
First, let’s define our terms.
A blog is a website that you can create yourself using Web-based software. Blogs tend to have a personal flavour and speak in the distinct voice of the blogger. A typical blog combines text, images, and links to other blogs, Web pages, and other media related to its topic. Unlike a traditional, static website, the content or information posted on a blog is up-to-the-minute, frequently updated (although it doesn’t have to be), and displayed in reverse chronological order, the most recent posting first. Also, readers can contribute their comments, turning the blog into an online conversation.
An e-letter is basically an electronic newsletter that you send out regularly via e-mail to a list of people who have given you permission to do so. The content of an e-letter is more evergreen. It can be anything from news about you and your business to tips that demonstrate your expertise. When you use an e-mail marketing service or software, it’s also very easy to design and send.
The main difference between the two is this: You "push" an e-letter to your list so you control the contact, while a blog is a "pull." Readers have to go there on their own, so you have a lot less (or no) control over the contact. The quality of the readers is different too. E-letter readers went out of their way to sign up, so you can consider them a lead for your marketing messages. They’ve essentially raised their hands and asked you to keep in touch. Blog readers, on the other hand, are information hounds, so they may not be as responsive.
Let’s compare.
A blog is easier to set up - but not by much. It literally takes 10 minutes to create, and you don’t need any technical expertise. However, you have less freedom with the layout due to the limitations of most blog publishing software (especially the most popular and free ones, like blogger.com and typepad.com). With an e-letter, on the other hand, it takes a bit more time to create the prototype and template, whether in text or html. But once that’s done, you just type the text for each issue into that template and send it out.
It takes more time to write an e-letter. Most small-business owners take time to write and edit their e-letters, as they should. Because you’re pushing your e-letter to people, asking them to read what you’ve written, it has to be well-thought-out, concise, and to the point. On the other hand, since a blog tends to be made up of snippets of ideas posted frequently (sometimes several times a day), bloggers don’t labour over their text.
Plus, a blog is less formal, because it’s like a conversation. That means "you can speak in your everyday voice, which is (hopefully) friendly and approachable." So says Colleen Wainwright, a.k.a. The Communicatrix, a graphic designer who blogs. "On a blog, the expectations are much lower for both grammar and formality. Also, you can combine personal and professional elements in your blog; how much of each depends on what you’re comfortable with and what your prospective clientele will be comfortable reading. You can write about anything (and many people do), but if you’re using it to promote your business, it will be most effective if you focus and use the blog to establish your credibility within that narrow niche."
My e-letter goes out weekly, and between the writing, editing, and layout, I spend approximately one hour on each issue. My blogging takes a half-hour on a Sunday morning. That’s when I draft and schedule my three posts for the week. Each one is usually no longer than a paragraph or two with a couple of links. At least one post is simply a link to an article I like, plus a little intro from me about why I think it’s relevant. If your e-letter goes out more frequently - like Early to Rise - the time you spend on it expands by leaps and bounds.
It takes more time to maintain a blog. For most people, creating fresh content several times a week, or even weekly, requires a certain mindset. It isn’t even that it takes so much time to create the material. (Blog posts are mostly very short pieces accompanied by a link.) What takes time is getting into the groove of blogging - and that involves much more than posting to your own blog. It includes visiting other people’s blogs, reading their posts, and commenting on them. It’s not difficult. It just takes time and practice to get into that mode. E-letters, on the other hand, don’t carry the same expectation of freshness, so there is a lot less pressure to produce. You send it out when you like - daily, twice-weekly, monthly, or even occasionally.
A blog attracts more Web traffic. Even if no one ever reads your blog, posting it regularly can be a tremendous boon to your search engine rankings because search engines love fresh content. Any website with new content will come up earlier in search engine rankings than a site that hasn’t been changed in months (or years). Meanwhile, the traffic an e-letter drives to your website consists of those who already know you, not new prospects and leads.
An e-letter makes more sales. Some people make money by displaying ads on their blogs - but if you want to sell products or services, an e-letter is more effective. Why? Because with an e-letter you "push" (send) your offer to your prospects, then watch while they click and, hopefully, buy. Because a blog is a "pull," there’s no way to measure or track sales. On a blog, you show how much you know. You shouldn’t expect to "get work" from your blog, but it will be good for driving traffic to your website. And once you get people to your website, they can sign up for your e-letter… which will allow you to sell to them directly.
Both inspire trust in the visitor. Inspiring trust depends more on the tone you take than the format. If you’ve spent time composing your e-letter, it will show, and that certainly inspires trust. A blog, with its rapid-fire and often impassioned comments, can convey a sense of impulsiveness, which rarely inspires trust. Trust is important on the Internet (a very anonymous medium), because unless people trust you, they’re not going to buy from you.
If you don’t already have a website to promote your business, a blog is a good first step in that direction. It provides a way for people to find you online without your spending a lot of money or time working with a Web designer or learning Web design software. In fact, some people use a blog as their one and only Web presence.
If you already have a website and are ready to branch out with an e-letter or a blog, which one should you start with? That depends on your goal. If your goal is to generate revenue from a known group of prospects, an e-letter is the right choice. If you are less focused on revenue-generation and are looking instead to position yourself as an expert and make it easier for new prospects to find you online, a blog is better.
If both goals make sense in your business plan, by all means do both. Blogs and e-letters work beautifully hand-in-hand.
Here’s how we do that at Marketing Mentor: I want to be able to reach out to my qualified prospects on a regular basis, to keep reminding them who I am and what I have to offer. I don’t want to wait for them to come back to my website or have time to read my blog. I want to be in their inboxes, rather than on their browsers.
Friday, March 28, 2008
3 Steps to Starting A Business
Step 1. Identify something that people want and will pay for.
One of the most common stumbling blocks for aspiring entrepreneurs is deciding on a product or service to market. The primary consideration is to choose something that people will buy. And the easiest way to do that is to go with something that other people are already selling successfully.
Ideally, that will be something you love and/or know a lot about. For instance, if you’re an accountant, you could create and sell programmes about how people can prepare their taxes, how they can make a household budget, and how they can find hidden tax deductions. Or, if you’ve always loved animals, you could sell pet toys, treats, and accessories.
If you have trouble coming up with a likely product or service based on your own interests and/or expertise, choose a relatively simple service that’s in high demand. A house cleaning service, for example, or bookkeeping, lawn mowing, resume writing, or house painting. The possibilities are almost endless.
Step 2. Find a way to supply it.
This step just requires a bit of business common sense. If you’re selling a service, you would either supply the service yourself or hire someone else to do it (or help you). If, for example, you’ve decided to go into the moving business, you don’t have to be capable of handling furniture yourself. Simply hire a few people who can do heavy lifting and either buy or rent a truck.
If you’re selling a product, you would ideally seek out suppliers that can provide you with merchandise at a low enough price for you to be able to make a profit. But that usually means buying in volume - which may not work for you when you’re just starting out. Let’s say you’d like to sell bookshelves. In this case, it might make more sense for you to get your business going by buying the lumber and building the shelves yourself (or hiring someone to build them for you).
Step 3. Sell it to the people who want it.
I’m a big believer in direct marketing for small start-up businesses. It’s a relatively inexpensive way to get your marketing message to prospective customers via e-mail, regular mail, ads in local papers, or even flyers distributed door to door.
Let’s say you want to start a housekeeping service. You’d identify a few affluent neighbourhoods where the homeowners could, presumably, afford maids. Then you’d target them with either flyers or small mailers.
Or suppose you want to start a business where you take people on charter fishing boat trips. You’ll be marketing primarily to tourists, so you’d work on getting yourself listed in local tourist guides and maybe advertise on a few bus benches in your city’s hotel district. If you decide to go after locals too, you could contact local fishing clubs and see if you can rent their membership lists to do a mailing. You might also make a deal with local bait shops to distribute your flyers.
Obviously, starting and running a successful business requires time, energy, and effort. Still, when you break down the process, it’s just those three simple steps.
One of the most common stumbling blocks for aspiring entrepreneurs is deciding on a product or service to market. The primary consideration is to choose something that people will buy. And the easiest way to do that is to go with something that other people are already selling successfully.
Ideally, that will be something you love and/or know a lot about. For instance, if you’re an accountant, you could create and sell programmes about how people can prepare their taxes, how they can make a household budget, and how they can find hidden tax deductions. Or, if you’ve always loved animals, you could sell pet toys, treats, and accessories.
If you have trouble coming up with a likely product or service based on your own interests and/or expertise, choose a relatively simple service that’s in high demand. A house cleaning service, for example, or bookkeeping, lawn mowing, resume writing, or house painting. The possibilities are almost endless.
Step 2. Find a way to supply it.
This step just requires a bit of business common sense. If you’re selling a service, you would either supply the service yourself or hire someone else to do it (or help you). If, for example, you’ve decided to go into the moving business, you don’t have to be capable of handling furniture yourself. Simply hire a few people who can do heavy lifting and either buy or rent a truck.
If you’re selling a product, you would ideally seek out suppliers that can provide you with merchandise at a low enough price for you to be able to make a profit. But that usually means buying in volume - which may not work for you when you’re just starting out. Let’s say you’d like to sell bookshelves. In this case, it might make more sense for you to get your business going by buying the lumber and building the shelves yourself (or hiring someone to build them for you).
Step 3. Sell it to the people who want it.
I’m a big believer in direct marketing for small start-up businesses. It’s a relatively inexpensive way to get your marketing message to prospective customers via e-mail, regular mail, ads in local papers, or even flyers distributed door to door.
Let’s say you want to start a housekeeping service. You’d identify a few affluent neighbourhoods where the homeowners could, presumably, afford maids. Then you’d target them with either flyers or small mailers.
Or suppose you want to start a business where you take people on charter fishing boat trips. You’ll be marketing primarily to tourists, so you’d work on getting yourself listed in local tourist guides and maybe advertise on a few bus benches in your city’s hotel district. If you decide to go after locals too, you could contact local fishing clubs and see if you can rent their membership lists to do a mailing. You might also make a deal with local bait shops to distribute your flyers.
Obviously, starting and running a successful business requires time, energy, and effort. Still, when you break down the process, it’s just those three simple steps.
Thursday, March 27, 2008
7 reasons why you need to own a Trust.
* To protect your assets from creditors in the event of your insolvency, disability or divorce.
* To legally pay as little tax as possible.
* To make provision for your estate to be passed on to your beneficiaries as smoothly as possible.
* To maximise your overall profits when buying property and significantly reduce your CGT and estate duty bill.
* To avoid all inheritance tax liability.
* To create personal confidentiality.
* To safeguard against financial loss in your own business.
* To protect your assets from creditors in the event of your insolvency, disability or divorce.
* To legally pay as little tax as possible.
* To make provision for your estate to be passed on to your beneficiaries as smoothly as possible.
* To maximise your overall profits when buying property and significantly reduce your CGT and estate duty bill.
* To avoid all inheritance tax liability.
* To create personal confidentiality.
* To safeguard against financial loss in your own business.
Wednesday, March 12, 2008
Cash flow Rules.
Profits aren't cash; they're accounting
And accounting is a lot more creative than you think. You can't pay bills with profits. Actually profits can lull you to sleep. If you pay your bills and your customers don't, it's suddenly business hell. You can make profits without making any money.
Cash flow isn't intuitive.
Don't try to do it in your head. Making the sales doesn't necessarily mean you have the money. Incurring the expense doesn't necessarily mean you paid for it already. Inventory is usually bought and paid for and then stored until it becomes cost of sales.
Growth sucks up cash.
It's paradoxical. The best of times can be hiding the worst of times. One of the toughest years my company had was when we doubled sales and almost went broke. We were building things two months in advance and getting the money from sales six months late. Add growth to that and it can be like a Trojan horse, hiding a problem inside a solution. Yes, of course you want to grow; we all want to grow our businesses. But be careful because growth costs cash. It's a matter of working capital. The faster you grow, the more financing you need.
Business-to-business sales suck up your cash.
The simple view is that sales mean money, but when you're a business selling to another business, it's rarely that simple. You deliver the goods or services along with an invoice, and they pay the invoice later. Usually that's months later. And businesses are good customers, so you can't just throw them into collections because then they'll never buy from you again. So you wait. When you sell something to a distributor that sells it to a retailer, you typically get the money four or five months later if you're lucky.
Inventory sucks up cash.
You have to buy your product or build it before you can sell it. Even if you put the product on your shelves and wait to sell it, your suppliers expect to get paid. Here's a simple rule of thumb: Every dollar you have in inventory is a dollar you don't have in cash.
Working capital is your best survival skill.
Technically, working capital is an accounting term for what's left over when you subtract current liabilities from current assets. Practically, it's money in the bank that you use to pay your running costs and expenses and buy inventory while waiting to get paid by your business customers.
"Receivables" is a four-letter word.
(See rule 4.) The money your customers owe you is called "accounts receivable." Here's a shortcut to cash planning: Every dollar in accounts receivable is a dollar less cash.
Bankers hate surprises.
Plan ahead. You get no extra points for spontaneity when dealing with banks. If you see a growth spurt coming, a new product opportunity or a problem with customers paying, thesooner you get to the bank armed with charts and a realistic plan, the better off you'll be.
Watch these three vital metrics: "
Collection days" is a measure of how long you wait to get paid. "Inventory turnover" is a measure of how long your inventory sits on your working capital and clogs your cash flow. "Payment days" is how long you wait to pay your vendors. Always monitor these three vital signs of cash flow. Project them 12 months ahead and compare your plan to what actually happens.
If you're the exception rather than the rule, hooray for you. If all your customers pay you immediately when they buy from you, and you don't buy things before you sell them, then relax. But if you sell to businesses, keep in mind that they usually don't pay immediately.
Profits aren't cash; they're accounting
And accounting is a lot more creative than you think. You can't pay bills with profits. Actually profits can lull you to sleep. If you pay your bills and your customers don't, it's suddenly business hell. You can make profits without making any money.
Cash flow isn't intuitive.
Don't try to do it in your head. Making the sales doesn't necessarily mean you have the money. Incurring the expense doesn't necessarily mean you paid for it already. Inventory is usually bought and paid for and then stored until it becomes cost of sales.
Growth sucks up cash.
It's paradoxical. The best of times can be hiding the worst of times. One of the toughest years my company had was when we doubled sales and almost went broke. We were building things two months in advance and getting the money from sales six months late. Add growth to that and it can be like a Trojan horse, hiding a problem inside a solution. Yes, of course you want to grow; we all want to grow our businesses. But be careful because growth costs cash. It's a matter of working capital. The faster you grow, the more financing you need.
Business-to-business sales suck up your cash.
The simple view is that sales mean money, but when you're a business selling to another business, it's rarely that simple. You deliver the goods or services along with an invoice, and they pay the invoice later. Usually that's months later. And businesses are good customers, so you can't just throw them into collections because then they'll never buy from you again. So you wait. When you sell something to a distributor that sells it to a retailer, you typically get the money four or five months later if you're lucky.
Inventory sucks up cash.
You have to buy your product or build it before you can sell it. Even if you put the product on your shelves and wait to sell it, your suppliers expect to get paid. Here's a simple rule of thumb: Every dollar you have in inventory is a dollar you don't have in cash.
Working capital is your best survival skill.
Technically, working capital is an accounting term for what's left over when you subtract current liabilities from current assets. Practically, it's money in the bank that you use to pay your running costs and expenses and buy inventory while waiting to get paid by your business customers.
"Receivables" is a four-letter word.
(See rule 4.) The money your customers owe you is called "accounts receivable." Here's a shortcut to cash planning: Every dollar in accounts receivable is a dollar less cash.
Bankers hate surprises.
Plan ahead. You get no extra points for spontaneity when dealing with banks. If you see a growth spurt coming, a new product opportunity or a problem with customers paying, thesooner you get to the bank armed with charts and a realistic plan, the better off you'll be.
Watch these three vital metrics: "
Collection days" is a measure of how long you wait to get paid. "Inventory turnover" is a measure of how long your inventory sits on your working capital and clogs your cash flow. "Payment days" is how long you wait to pay your vendors. Always monitor these three vital signs of cash flow. Project them 12 months ahead and compare your plan to what actually happens.
If you're the exception rather than the rule, hooray for you. If all your customers pay you immediately when they buy from you, and you don't buy things before you sell them, then relax. But if you sell to businesses, keep in mind that they usually don't pay immediately.
Friday, March 7, 2008
How Billionaires Do...
After 13 years on top, Bill Gates is no longer the richest man in the world. That honor now belongs to his friend and sometimes bridge partner Warren Buffett.
Riding the surging price of Berkshire Hathaway stock, Buffett has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. Gates is now worth $58 billion and is ranked third richest in the world.
He is up $2 billion from a year ago, but would have been as rich--or richer--than Buffett, had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February. Mexican telecom mogul Carlos Slim Helú now ranks as the world's second richest person with a net worth of $60 billion.
Buffett, whose fortune is estimated based on his stake in Berkshire Hathaway and assets he holds outside the company, refused to comment on his net worth.
The race for the title of World's Richest Man has been extremely competitive in recent months. Class A shares of Berkshire Hathaway soared 25% between the middle of July and the day we priced our list. The stock hit an all-time high of $150,000 a share in December. At that time, Buffett was worth roughly $65 billion.
Berkshire Hathaway shares closed Warren Buffett is the richest man on the planet.
Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. That massive pile of scratch puts him ahead of Microsoft co-founder Bill Gates, who was the richest man in the world for 13 straight years.
Gates is now worth $58 billion and is ranked third in the world. He is up $2 billion from a year ago, but would have been perhaps as rich--or richer--than Buffett had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February.
Microsoft shares fell 15% between Jan. 31, the day before the company announced its bid for the search engine giant, and Feb. 11, the day we locked in stock prices for the 2008 World's Billionaires list. More than half of Gates' fortune is held outside of Microsoft shares.
Mexican telecom tycoon Carlos Slim Helú is the world's second-richest man, with an estimated net worth of $60 billion. His fortune has risen $11 billion since last March.
per share on Tuesday, down 2% since the announcement last Friday that the company's net earnings fell 18% in the fourth quarter of last year.
Gates' fortune also swelled massively last fall. Shares of Microsoft jumped 30% between late October and early November to $37 a share, only to fall after the company announced its intentions to buy Yahoo! for $45 billion on Feb. 1.
Slim's fortune has doubled in the past two years. Stock in his most significant holding, telecom outfit America Movil has risen 120% since the beginning of 2006. Helú also owns stakes in Carso Global Telecom, Grupo Carso and Grupo Financiero Inbursa.
The son of a Nebraska politician, Buffett delivered newspapers as a boy. He filed his first tax return at age 13, claiming a $35 deduction for his bicycle. He moved on to study under value investing guru Benjamin Graham at Columbia University.
Buffett began buying shares in textile firm Berkshire Hathaway in 1962 and purchased a controlling stake in 1965. He began buying insurance companies and astutely investing those companies' cash reserves.
In December, the company purchased a 60% stake in the Pritzker family's manufacturing and services group, Marmon Holdings, for $4.5 billion. The privately held Marmon owns businesses across wire and cable, transportation services and industrial products.
Despite Buffett's meteoric rise, his days as the World's Richest Man are almost certainly numbered. He had long promised to give away his fortune posthumously. But in the summer of 2006 he irrevocably earmarked the majority of his Berkshire shares to charity, most going to the Bill & Melinda Gates Foundation.
At the time, the gift was valued at $31 billion.
However, assuming that Berkshire shares continue to rise, the final amount of the donation will far exceed that sum. Buffett gives 5% of his shares to charity every July.
In October, Buffett issued a challenge to members of the Forbes 400 richest Americans list, saying he would donate $1 million to charity if the collective group (or a significant number of them) would admit they pay less taxes, as a percentage of income, than their secretaries.
Days after issuing the challenge, Buffett appeared before Congress to encourage it to keep the estate tax. Armed with a few Forbes 400 issues, he told the hearing that "dynastic wealth, the enemy of a meritocracy, is on the rise."
Riding the surging price of Berkshire Hathaway stock, Buffett has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. Gates is now worth $58 billion and is ranked third richest in the world.
He is up $2 billion from a year ago, but would have been as rich--or richer--than Buffett, had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February. Mexican telecom mogul Carlos Slim Helú now ranks as the world's second richest person with a net worth of $60 billion.
Buffett, whose fortune is estimated based on his stake in Berkshire Hathaway and assets he holds outside the company, refused to comment on his net worth.
The race for the title of World's Richest Man has been extremely competitive in recent months. Class A shares of Berkshire Hathaway soared 25% between the middle of July and the day we priced our list. The stock hit an all-time high of $150,000 a share in December. At that time, Buffett was worth roughly $65 billion.
Berkshire Hathaway shares closed Warren Buffett is the richest man on the planet.
Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. That massive pile of scratch puts him ahead of Microsoft co-founder Bill Gates, who was the richest man in the world for 13 straight years.
Gates is now worth $58 billion and is ranked third in the world. He is up $2 billion from a year ago, but would have been perhaps as rich--or richer--than Buffett had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February.
Microsoft shares fell 15% between Jan. 31, the day before the company announced its bid for the search engine giant, and Feb. 11, the day we locked in stock prices for the 2008 World's Billionaires list. More than half of Gates' fortune is held outside of Microsoft shares.
Mexican telecom tycoon Carlos Slim Helú is the world's second-richest man, with an estimated net worth of $60 billion. His fortune has risen $11 billion since last March.
per share on Tuesday, down 2% since the announcement last Friday that the company's net earnings fell 18% in the fourth quarter of last year.
Gates' fortune also swelled massively last fall. Shares of Microsoft jumped 30% between late October and early November to $37 a share, only to fall after the company announced its intentions to buy Yahoo! for $45 billion on Feb. 1.
Slim's fortune has doubled in the past two years. Stock in his most significant holding, telecom outfit America Movil has risen 120% since the beginning of 2006. Helú also owns stakes in Carso Global Telecom, Grupo Carso and Grupo Financiero Inbursa.
The son of a Nebraska politician, Buffett delivered newspapers as a boy. He filed his first tax return at age 13, claiming a $35 deduction for his bicycle. He moved on to study under value investing guru Benjamin Graham at Columbia University.
Buffett began buying shares in textile firm Berkshire Hathaway in 1962 and purchased a controlling stake in 1965. He began buying insurance companies and astutely investing those companies' cash reserves.
In December, the company purchased a 60% stake in the Pritzker family's manufacturing and services group, Marmon Holdings, for $4.5 billion. The privately held Marmon owns businesses across wire and cable, transportation services and industrial products.
Despite Buffett's meteoric rise, his days as the World's Richest Man are almost certainly numbered. He had long promised to give away his fortune posthumously. But in the summer of 2006 he irrevocably earmarked the majority of his Berkshire shares to charity, most going to the Bill & Melinda Gates Foundation.
At the time, the gift was valued at $31 billion.
However, assuming that Berkshire shares continue to rise, the final amount of the donation will far exceed that sum. Buffett gives 5% of his shares to charity every July.
In October, Buffett issued a challenge to members of the Forbes 400 richest Americans list, saying he would donate $1 million to charity if the collective group (or a significant number of them) would admit they pay less taxes, as a percentage of income, than their secretaries.
Days after issuing the challenge, Buffett appeared before Congress to encourage it to keep the estate tax. Armed with a few Forbes 400 issues, he told the hearing that "dynastic wealth, the enemy of a meritocracy, is on the rise."
Thursday, February 28, 2008
DRASTIC CHANGES OF THE GLOBAL ECONOMY
Oil-importing nations have been watching closely for decades. Oil priced at $100 and up will cut profits at airlines, railroads and trucking companies, to name a few. Putting unprecedented pressure on vital infrastructure and services...
Because just as pouring glue into a cassette deck will slow down, and eventually stop the music... pouring higher and higher priced oil into our economy will slow down, and at some point hold America in place to be squashed between history and the pavement.
That's why the Advanced Energy Initiative was lainched, stating:
a national goal of replacing more than 75% of our oil imports from the Middle East by 2025
we're on the verge of breakthroughs in two vital areas -- how we power our homes and businesses... and how we power our cars
and a 22% increase in funding for alternative energy research
Yet, skeptics always claim alternative energies cost more -- and can't survive without heavy government subsidies.
Here's an overlooked fact: traditional energy industries are also subsidized by billions of dollars each year. There are oil depletion allowances, special treatment on coal royalties, overseas oil refinery credits, intangible drilling costs, and the list goes on.
"With America on the verge of breakthroughs in advanced energy technologies, the best way to break the addiction to foreign oil is through new technology."
The days of giving breaks to big oil companies are numbered. You see, on November 8, 2006 Democrats swept into the House and Senate poised to ignite an all-out alternative energy revolution. If you don't believe me, just check out House Energy Bill HR6!
Right now it's not hard to figure out which way the wind is blowing...
And you can bet a handful of financial power players recognize it's not a matter of if, but rather a matter of when certain alternative energy investments will take off... they see a government-funding avalanche and favorable treatment for new energy initiatives... that's why:
Wall Street's elite are RIGHT NOW betting billions on alternative energy!
According to The Economist, total investment in alternative energy last year was $63 billion, up from $49 billion the year before, and up from $30 billion the year before that. In other words, total investment in alternative energy just doubled in the last 2 years...
BusinessWeek calls alternative energy "Wall Street's new love affair."
The Wall Street Journal asked Ray Lane -- venture capital backer of Google, Amazon, and Netscape -- if this boom looked to be bigger than the Internet, or as big... "This is bigger than the Internet by an order of magnitude. Maybe two." he answered.
Just how big is that? An "order of magnitude" is an approximation of size using powers of ten. Meaning this legendary Internet investor believes the alternative energy boom will be 10 to 100 times bigger than the Internet revolution!
"The clean-energy business is turning into the next big investment boom."-- The Economist, November 24, 2006
Source: Clean Edge, Nth Power www.cleanedge.com
Another Internet pioneer, Bill Joy -- co-founder of Sun Microsystems -- is so convinced of the profit potential he says he has no doubt "we are at the point of new wealth creation."
In other words, the guys first in line for hundreds of billions during the Internet boom believe the coming alternative energy boom will be at least TEN TIMES as big.
That's why, as we speak, large investment banks are jumping on board... only rather than taking these companies public, Goldman Sachs and JP Morgan "are choosing to own these alternative energy companies outright so they can keep the profits for themselves," according to BusinessWeek.
Multibillion-dollar hedge fund groups like SAC Capital Advisors and D.E. Shaw & Co. have started investing in geothermal energy, ethanol and wind power... World leading insurer American International Group is steering private equity investments into alternative energy projects...
This kind of rare potential for profits has some of the world's most successful business leaders investing hundreds of millions -- and in some cases billions -- of their own money as well.
Take a look...
Warren Buffett just invested $385 million in wind power... Bill Gates is betting on fuel additives... Google's Larry Page and Sergey Brin are investing in solar... famed Virgin Group CEO Richard Branson is putting $400 million into a biofuel plant... and Jeffery Immelt, CEO of General Electric, plans to put $3 billion into alternative energy ventures by 2008...
With ten times the wealth potential of the Internet boom, it's no wonder the world's most wealthy and powerful elite are piling in!
Yet, most individual investors are still on the sideline
A recent survey by the Calvert Group found that while about 85% of investors believe there is money to be made from investing in alternative energy, only about 20% of investors have brought up the subject with a financial advisor.
Here's the upshot for you: this gap between powerful Wall Street players beginning to invest... and the vast majority of investors STILL A YEAR OR SO AWAY... creates a unique opportunity. With all the characteristics successful investors look for over and over again...
The majority of people aren't paying attention to alternative energy investments -- yet. Few people know how to capitalize on them. This gives us a window of opportunity of about 12 to 24 months before the herd catches on.
Over the next few years, we expect the 4 investments described just ahead to shoot way up in value. And our tight-knit group (more on this group in a split second) to make a Foolish pile of profits when they do...
I promise to tell you everything I can here. Then I'm going to ask you to accept a very special invitation, and I'm pretty sure you're going to like that too.
But first, that tight-knit group I just mentioned... they're called Motley Fool Rule Breakers. And they specialize in finding opportunities that could put you in on the ground floor of the BIGGEST GROWTH STORIES of the next 10 or 15 years!
This forward-looking group is headed by Motley Fool Co-founder David Gardner -- a legendary growth investor with a remarkable knack for uncovering breakthrough companies way ahead of the masses. A few of David's career picks include:
eBay in 1999... Starbucks in 1998... AOL in 1994... Amgen in 1998... and Amazon in 1997!
And more recently, David and his Rule Breakers team recommended stocks up 117%... 127%... 167%... 276%... and 295% -- all in under 3 years!
But I didn't email you to chirp about our recent success. I contacted you to show you what we're recommending next. And how it can have a dramatic effect on your personal wealth.
So if getting in early on the alternative energy boom -- what could be among the greatest investment stories ever told -- is something you might be interested in, I urge you to read on. That's because the Rule Breakers team just completed a powerful new report featuring The Motley Fool's Top 4 Alternative Energy Investments...
But first, a word of warning: the months and years ahead will NOT play out the way a lot of self-described experts are saying. So-called stock gurus, and energy pundits, and their "one amazing stock shot" approach has virtually zero chance of succeeding.
That's because we're moving into a period of dramatic opportunity where different sources of energy will be optimized to meet specific needs. It's why we spent a considerable amount of time and resources -- informed by some of the world's top CEOs, market strategists, and even a noble prize-winning economist -- putting together 4 special corresponding energy investments for the next 10 to 15 years...
INVESTMENT #1:
CLEAN COAL AND NUCLEAR...
this company owns a huge chunk of substantially growing market, is protected by close ties to government agencies, and with 2 breakthrough technologies emerging, this stock has massive upside!
INVESTMENT #2:
SOLAR...
a pure play on the soaring demand for solar power. This company has great margins, a sustainable competitive advantage, and a lit fuse with a wide-open sky waiting!
INVESTMENT #3:
RECYCLING FOSSIL FUELS... this company makes coal dust look good. Revenue is up just 14%, and earnings just jumped 69%!
INVESTMENT #4:
WIND, HYDROELECTRIC, AND FUEL CELLS...
this investment spreads our bets around in a unique way. Giving your portfolio a strong dose of only the most profitable technologies!
I can't wait to give you the full details of these 4 potential fortune makers. And I will... but you still might be wondering why 4 different investments?
As I just mentioned, we project a number of alternative energies will be used in the near future. For example, solar for portable devices. Fuel cells for telecommunications. Wind makes sense in certain places. And so does nuclear... Now consider the gold rush again for a moment. And how you would've profited from owning shares in both the Union Pacific and Wells Fargo.
Also, look for a period of creative destruction and consolidation like in the early automobile revolution... when shares in Ford Motor Co would've been a great investment and would've more than offset an investment in say, Tucker Automotive...
Or consider David Gardner's investments of the 1990s. David had the vision to buy Dell, Amazon and AOL in the early days... That's why he can't be faulted for also buying Wang Computer. You see, his mega-winners more than made up his occasional, and inevitable, losing investment.
Because just as pouring glue into a cassette deck will slow down, and eventually stop the music... pouring higher and higher priced oil into our economy will slow down, and at some point hold America in place to be squashed between history and the pavement.
That's why the Advanced Energy Initiative was lainched, stating:
a national goal of replacing more than 75% of our oil imports from the Middle East by 2025
we're on the verge of breakthroughs in two vital areas -- how we power our homes and businesses... and how we power our cars
and a 22% increase in funding for alternative energy research
Yet, skeptics always claim alternative energies cost more -- and can't survive without heavy government subsidies.
Here's an overlooked fact: traditional energy industries are also subsidized by billions of dollars each year. There are oil depletion allowances, special treatment on coal royalties, overseas oil refinery credits, intangible drilling costs, and the list goes on.
"With America on the verge of breakthroughs in advanced energy technologies, the best way to break the addiction to foreign oil is through new technology."
The days of giving breaks to big oil companies are numbered. You see, on November 8, 2006 Democrats swept into the House and Senate poised to ignite an all-out alternative energy revolution. If you don't believe me, just check out House Energy Bill HR6!
Right now it's not hard to figure out which way the wind is blowing...
And you can bet a handful of financial power players recognize it's not a matter of if, but rather a matter of when certain alternative energy investments will take off... they see a government-funding avalanche and favorable treatment for new energy initiatives... that's why:
Wall Street's elite are RIGHT NOW betting billions on alternative energy!
According to The Economist, total investment in alternative energy last year was $63 billion, up from $49 billion the year before, and up from $30 billion the year before that. In other words, total investment in alternative energy just doubled in the last 2 years...
BusinessWeek calls alternative energy "Wall Street's new love affair."
The Wall Street Journal asked Ray Lane -- venture capital backer of Google, Amazon, and Netscape -- if this boom looked to be bigger than the Internet, or as big... "This is bigger than the Internet by an order of magnitude. Maybe two." he answered.
Just how big is that? An "order of magnitude" is an approximation of size using powers of ten. Meaning this legendary Internet investor believes the alternative energy boom will be 10 to 100 times bigger than the Internet revolution!
"The clean-energy business is turning into the next big investment boom."-- The Economist, November 24, 2006
Source: Clean Edge, Nth Power www.cleanedge.com
Another Internet pioneer, Bill Joy -- co-founder of Sun Microsystems -- is so convinced of the profit potential he says he has no doubt "we are at the point of new wealth creation."
In other words, the guys first in line for hundreds of billions during the Internet boom believe the coming alternative energy boom will be at least TEN TIMES as big.
That's why, as we speak, large investment banks are jumping on board... only rather than taking these companies public, Goldman Sachs and JP Morgan "are choosing to own these alternative energy companies outright so they can keep the profits for themselves," according to BusinessWeek.
Multibillion-dollar hedge fund groups like SAC Capital Advisors and D.E. Shaw & Co. have started investing in geothermal energy, ethanol and wind power... World leading insurer American International Group is steering private equity investments into alternative energy projects...
This kind of rare potential for profits has some of the world's most successful business leaders investing hundreds of millions -- and in some cases billions -- of their own money as well.
Take a look...
Warren Buffett just invested $385 million in wind power... Bill Gates is betting on fuel additives... Google's Larry Page and Sergey Brin are investing in solar... famed Virgin Group CEO Richard Branson is putting $400 million into a biofuel plant... and Jeffery Immelt, CEO of General Electric, plans to put $3 billion into alternative energy ventures by 2008...
With ten times the wealth potential of the Internet boom, it's no wonder the world's most wealthy and powerful elite are piling in!
Yet, most individual investors are still on the sideline
A recent survey by the Calvert Group found that while about 85% of investors believe there is money to be made from investing in alternative energy, only about 20% of investors have brought up the subject with a financial advisor.
Here's the upshot for you: this gap between powerful Wall Street players beginning to invest... and the vast majority of investors STILL A YEAR OR SO AWAY... creates a unique opportunity. With all the characteristics successful investors look for over and over again...
The majority of people aren't paying attention to alternative energy investments -- yet. Few people know how to capitalize on them. This gives us a window of opportunity of about 12 to 24 months before the herd catches on.
Over the next few years, we expect the 4 investments described just ahead to shoot way up in value. And our tight-knit group (more on this group in a split second) to make a Foolish pile of profits when they do...
I promise to tell you everything I can here. Then I'm going to ask you to accept a very special invitation, and I'm pretty sure you're going to like that too.
But first, that tight-knit group I just mentioned... they're called Motley Fool Rule Breakers. And they specialize in finding opportunities that could put you in on the ground floor of the BIGGEST GROWTH STORIES of the next 10 or 15 years!
This forward-looking group is headed by Motley Fool Co-founder David Gardner -- a legendary growth investor with a remarkable knack for uncovering breakthrough companies way ahead of the masses. A few of David's career picks include:
eBay in 1999... Starbucks in 1998... AOL in 1994... Amgen in 1998... and Amazon in 1997!
And more recently, David and his Rule Breakers team recommended stocks up 117%... 127%... 167%... 276%... and 295% -- all in under 3 years!
But I didn't email you to chirp about our recent success. I contacted you to show you what we're recommending next. And how it can have a dramatic effect on your personal wealth.
So if getting in early on the alternative energy boom -- what could be among the greatest investment stories ever told -- is something you might be interested in, I urge you to read on. That's because the Rule Breakers team just completed a powerful new report featuring The Motley Fool's Top 4 Alternative Energy Investments...
But first, a word of warning: the months and years ahead will NOT play out the way a lot of self-described experts are saying. So-called stock gurus, and energy pundits, and their "one amazing stock shot" approach has virtually zero chance of succeeding.
That's because we're moving into a period of dramatic opportunity where different sources of energy will be optimized to meet specific needs. It's why we spent a considerable amount of time and resources -- informed by some of the world's top CEOs, market strategists, and even a noble prize-winning economist -- putting together 4 special corresponding energy investments for the next 10 to 15 years...
INVESTMENT #1:
CLEAN COAL AND NUCLEAR...
this company owns a huge chunk of substantially growing market, is protected by close ties to government agencies, and with 2 breakthrough technologies emerging, this stock has massive upside!
INVESTMENT #2:
SOLAR...
a pure play on the soaring demand for solar power. This company has great margins, a sustainable competitive advantage, and a lit fuse with a wide-open sky waiting!
INVESTMENT #3:
RECYCLING FOSSIL FUELS... this company makes coal dust look good. Revenue is up just 14%, and earnings just jumped 69%!
INVESTMENT #4:
WIND, HYDROELECTRIC, AND FUEL CELLS...
this investment spreads our bets around in a unique way. Giving your portfolio a strong dose of only the most profitable technologies!
I can't wait to give you the full details of these 4 potential fortune makers. And I will... but you still might be wondering why 4 different investments?
As I just mentioned, we project a number of alternative energies will be used in the near future. For example, solar for portable devices. Fuel cells for telecommunications. Wind makes sense in certain places. And so does nuclear... Now consider the gold rush again for a moment. And how you would've profited from owning shares in both the Union Pacific and Wells Fargo.
Also, look for a period of creative destruction and consolidation like in the early automobile revolution... when shares in Ford Motor Co would've been a great investment and would've more than offset an investment in say, Tucker Automotive...
Or consider David Gardner's investments of the 1990s. David had the vision to buy Dell, Amazon and AOL in the early days... That's why he can't be faulted for also buying Wang Computer. You see, his mega-winners more than made up his occasional, and inevitable, losing investment.
How to Create a Marketing Plan
What is a marketing plan and why is it so essential to the success of your business? Find out here, in the first section of our comprehensive guide to creating a marketing plan.
Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.
The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future--two to four years down the road. But the bulk of your plan should focus on the coming year.
You should allow yourself a couple of months to write the plan, even if it's only a few pages long. Developing the plan is the "heavy lifting" of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing's greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it's different.
Who should see your plan? All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they're too skimpy and management would be embarrassed to have them see the light of day, or they're solid and packed with information . . . which would make them extremely valuable to the competition.
You can't do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on--in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what's achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you're essentially a one-person management operation, you'll have to wear all your hats at one time--but at least the meetings will be short!
What's the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about--what you do and don't do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes "the vision thing," the resounding words that spell out the glorious purpose of your company in stirring language. Your business plan is the U.S. Constitution of your business: If you want to do something that's outside the business plan, you need to either change your mind or change the plan. Your company's business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent.
A marketing plan, on the other hand, is plump with meaning. It provides you with several major benefits. Let's review them.
Rallying point: Your marketing plan gives your troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order, knows how to run the ship, and has a port of destination in mind. Companies often undervalue the impact of a "marketing plan" on their own people, who want to feel part of a team engaged in an exciting and complicated joint endeavor. If you want your employees to feel committed to your company, it's important to share with them your vision of where the company is headed in the years to come. People don't always understand financial projections, but they can get excited about a well-written and well-thought-out marketing plan. You should consider releasing your marketing plan--perhaps in an abridged version--companywide. Do it with some fanfare and generate some excitement for the adventures to come. Your workers will appreciate being involved.
Chart to success: We all know that plans are imperfect things. How can you possibly know what's going to happen 12 months or five years from now? Isn't putting together a marketing plan an exercise in futility . . . a waste of time better spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest sense. If you don't plan, you're doomed, and an inaccurate plan is far better than no plan at all. To stay with our sea captain analogy, it's better to be 5 or even 10 degrees off your destination port than to have no destination in mind at all. The point of sailing, after all, is to get somewhere, and without a marketing plan, you'll wander the seas aimlessly, sometimes finding dry land but more often than not floundering in a vast ocean. Sea captains without a chart are rarely remembered for discovering anything but the ocean floor.
Company operational instructions: Your child's first bike and your new VCR came with a set of instructions, and your company is far more complicated to put together and run than either of them. Your marketing plan is a step-by-step guide for your company's success. It's more important than a vision statement. To put together a genuine marketing plan, you have to assess your company from top to bottom and make sure all the pieces are working together in the best way. What do you want to do with this enterprise you call the company in the coming year? Consider it a to-do list on a grand scale. It assigns specific tasks for the year.
Captured thinking: You don't allow your financial people to keep their numbers in their heads. Financial reports are the lifeblood of the numbers side of any business, no matter what size. It should be no different with marketing. Your written document lays out your game plan. If people leave, if new people arrive, if memories falter, if events bring pressure to alter the givens, the information in the written marketing plan stays intact to remind you of what you'd agreed on.
Top-level reflection: In the daily hurly-burly of competitive business, it's hard to turn your attention to the big picture, especially those parts that aren't directly related to the daily operations. You need to take time periodically to really think about your business--whether it's providing you and your employees with what you want, whether there aren't some innovative wrinkles you can add, whether you're getting all you can out of your products, your sales staff and your markets. Writing your marketing plan is the best time to do this high-level thinking. Some companies send their top marketing people away to a retreat. Others go to the home of a principal. Some do marketing plan development at a local motel, away from phones and fax machines, so they can devote themselves solely to thinking hard and drawing the most accurate sketches they can of the immediate future of the business.
Ideally, after writing marketing plans for a few years, you can sit back and review a series of them, year after year, and check the progress of your company. Of course, sometimes this is hard to make time for (there is that annoying real world to deal with), but it can provide an unparalleled objective view of what you've been doing with your business life over a number of years.
What is a marketing plan and why is it so essential to the success of your business? Find out here, in the first section of our comprehensive guide to creating a marketing plan.
Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.
The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future--two to four years down the road. But the bulk of your plan should focus on the coming year.
You should allow yourself a couple of months to write the plan, even if it's only a few pages long. Developing the plan is the "heavy lifting" of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing's greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it's different.
Who should see your plan? All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they're too skimpy and management would be embarrassed to have them see the light of day, or they're solid and packed with information . . . which would make them extremely valuable to the competition.
You can't do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on--in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what's achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you're essentially a one-person management operation, you'll have to wear all your hats at one time--but at least the meetings will be short!
What's the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about--what you do and don't do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes "the vision thing," the resounding words that spell out the glorious purpose of your company in stirring language. Your business plan is the U.S. Constitution of your business: If you want to do something that's outside the business plan, you need to either change your mind or change the plan. Your company's business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent.
A marketing plan, on the other hand, is plump with meaning. It provides you with several major benefits. Let's review them.
Rallying point: Your marketing plan gives your troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order, knows how to run the ship, and has a port of destination in mind. Companies often undervalue the impact of a "marketing plan" on their own people, who want to feel part of a team engaged in an exciting and complicated joint endeavor. If you want your employees to feel committed to your company, it's important to share with them your vision of where the company is headed in the years to come. People don't always understand financial projections, but they can get excited about a well-written and well-thought-out marketing plan. You should consider releasing your marketing plan--perhaps in an abridged version--companywide. Do it with some fanfare and generate some excitement for the adventures to come. Your workers will appreciate being involved.
Chart to success: We all know that plans are imperfect things. How can you possibly know what's going to happen 12 months or five years from now? Isn't putting together a marketing plan an exercise in futility . . . a waste of time better spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest sense. If you don't plan, you're doomed, and an inaccurate plan is far better than no plan at all. To stay with our sea captain analogy, it's better to be 5 or even 10 degrees off your destination port than to have no destination in mind at all. The point of sailing, after all, is to get somewhere, and without a marketing plan, you'll wander the seas aimlessly, sometimes finding dry land but more often than not floundering in a vast ocean. Sea captains without a chart are rarely remembered for discovering anything but the ocean floor.
Company operational instructions: Your child's first bike and your new VCR came with a set of instructions, and your company is far more complicated to put together and run than either of them. Your marketing plan is a step-by-step guide for your company's success. It's more important than a vision statement. To put together a genuine marketing plan, you have to assess your company from top to bottom and make sure all the pieces are working together in the best way. What do you want to do with this enterprise you call the company in the coming year? Consider it a to-do list on a grand scale. It assigns specific tasks for the year.
Captured thinking: You don't allow your financial people to keep their numbers in their heads. Financial reports are the lifeblood of the numbers side of any business, no matter what size. It should be no different with marketing. Your written document lays out your game plan. If people leave, if new people arrive, if memories falter, if events bring pressure to alter the givens, the information in the written marketing plan stays intact to remind you of what you'd agreed on.
Top-level reflection: In the daily hurly-burly of competitive business, it's hard to turn your attention to the big picture, especially those parts that aren't directly related to the daily operations. You need to take time periodically to really think about your business--whether it's providing you and your employees with what you want, whether there aren't some innovative wrinkles you can add, whether you're getting all you can out of your products, your sales staff and your markets. Writing your marketing plan is the best time to do this high-level thinking. Some companies send their top marketing people away to a retreat. Others go to the home of a principal. Some do marketing plan development at a local motel, away from phones and fax machines, so they can devote themselves solely to thinking hard and drawing the most accurate sketches they can of the immediate future of the business.
Ideally, after writing marketing plans for a few years, you can sit back and review a series of them, year after year, and check the progress of your company. Of course, sometimes this is hard to make time for (there is that annoying real world to deal with), but it can provide an unparalleled objective view of what you've been doing with your business life over a number of years.
Friday, February 22, 2008
Keeping Up with Your Business Online
Doing business online requires managing and measuring lots of moving parts. And, I always say that what doesn’t get measured gets forgotten.
So, with all the metrics you could monitor, what do you assess? In short, everything. Here’s a list of at-minimum ‘think abouts’ to get you started:
website matrix
How many unique visitors do you have?
How many should you have based on your industry?
How many page views?
How many should you have?
Who are your top three referral sources?
E-mail mailing list.
How many people are on your e-mail mailing list?
How many subscribers do others in your industry with comparable experience have?
What is the percent increase from last month?
What’s a good percentage to increase?
Website lead generation
Does your lead generation tool deliver the “lead trinity”? 1)Positions you as an expert. 2)
Qualifies the lead as a quality lead for your business. 3) Gives you permission to market to them again.
If not, what lead generation tool would?
Does your web site automatically produce leads regularly?
Product/marketing funnel.
Do you put potential clients in the position of either working with you or not?
Do you have freebies for them to sample - without signing up?
How many should you have and what topics should they cover?
Blog activity.
How many visitors does your blog have?
How many posts per week do you post on average?
What are the industry standards?
Are you meeting your blogging goals?
Online marketing.
How many original articles are you posting online?
How much time are you spending adding thought leadership content about your area of expertise?
Online sales.
How much revenue do you make solely online?
How much should you make?
Which is your most profitable product/service?
Which is your least profitable product/service?
Overall direction.
Where are you going with your business online?
By when do you need to ‘get there’?
Who can help you get there faster, easier?
What are your KPIs (key performance indicators) - measurements you can use to see if you’re on-track?
Again, this is certainly not an exhaustive list but it’s more than good enough to get you started. This may seem like a long list of things to consider. And, if you’re just starting out, your answers to these many of these questions might be “zero”. But, that’s OK. Start at the top and take a section at a time. Figure out a way to keep the information you find pertinent on your radar *at least* once per month. Maybe it’s a report. A graph. A spreadsheet. Something. Anything.
Preparing For The worst
There is no crying in baseball, and there are no "sick days" when you run your own business.
Still, there are plenty of ways entrepreneurs can get sidelined--from sudden illnesses and travel delays to pregnancy and military duty. Without a well-defined plan, those leaves of absence can pose a dangerous threat.
"If something incapacitates you, it can be the death knell of your business," says Karla Leavelle, president of Human Capital Advisors, a McLean, Va.-based consulting firm that counsels small businesses.
How do you hedge the risk of lost leadership? Business insurance doesn't help. Property and liability coverage come in handy in case a customer slips and falls in your store or gets hurt using one of your products, and business-interruption insurance covers operating losses if a hurricane reduces your building to rubble.
If you really want things to run smoothly in your absence, you need other protection in place.
Here are some tips:
Have A Point Person
Be it the chief operating officer, outside counsel or even a trusted executive assistant, at least one person should have access to everything that keeps the place running--including passwords, bank account numbers and keys to safes. You might even consider handing over power of attorney in your absence.
Doling out that kind of trust isn't easy, but if something goes wrong while you're gone, you'll wish you had. "Owners are always scared that someone is going to steal secrets of the organization," says John Vyhnanek, a restaurant consultant in Boston. "It's a bit like walking a tightrope, but someone has to keep the business going if you can't be there."
map out the work flows in your organization.
Identify who does what and who can take over certain roles if need be. Start by having employees write out their own job descriptions and the list of activities they do on a daily basis.
"No one can duplicate the charisma of an entrepreneur," says Louis Celli, head of the Northeast Veterans Business Resource Center, which mentors military entrepreneurs. "But if the entire business is systematized, that can sustain the business until the entrepreneur returns."
Better yet, if you codify thoroughly and thoughtfully enough, you might even discover ways of making your business run more efficiently day to day.
Form Partnerships
If you own a medical, law or accounting practice, your clients simply can't wait for you to return. That's why you should draft a written agreement with a local competitor who can cover for you in the event of an emergency (and visa versa).
Hammer out the tough questions upfront, such as referral fees--both for your clients and any they might refer to your stand-in. You'll also want to make sure the fees are comparable, lest your clients blanch at getting a fatter bill than they are used to.
Go Mobile
Even if you aren't a gadget guy or gal, if you run your own business, you have to have access to critical clients and information at any moment.
Doing business online requires managing and measuring lots of moving parts. And, I always say that what doesn’t get measured gets forgotten.
So, with all the metrics you could monitor, what do you assess? In short, everything. Here’s a list of at-minimum ‘think abouts’ to get you started:
website matrix
How many unique visitors do you have?
How many should you have based on your industry?
How many page views?
How many should you have?
Who are your top three referral sources?
E-mail mailing list.
How many people are on your e-mail mailing list?
How many subscribers do others in your industry with comparable experience have?
What is the percent increase from last month?
What’s a good percentage to increase?
Website lead generation
Does your lead generation tool deliver the “lead trinity”? 1)Positions you as an expert. 2)
Qualifies the lead as a quality lead for your business. 3) Gives you permission to market to them again.
If not, what lead generation tool would?
Does your web site automatically produce leads regularly?
Product/marketing funnel.
Do you put potential clients in the position of either working with you or not?
Do you have freebies for them to sample - without signing up?
How many should you have and what topics should they cover?
Blog activity.
How many visitors does your blog have?
How many posts per week do you post on average?
What are the industry standards?
Are you meeting your blogging goals?
Online marketing.
How many original articles are you posting online?
How much time are you spending adding thought leadership content about your area of expertise?
Online sales.
How much revenue do you make solely online?
How much should you make?
Which is your most profitable product/service?
Which is your least profitable product/service?
Overall direction.
Where are you going with your business online?
By when do you need to ‘get there’?
Who can help you get there faster, easier?
What are your KPIs (key performance indicators) - measurements you can use to see if you’re on-track?
Again, this is certainly not an exhaustive list but it’s more than good enough to get you started. This may seem like a long list of things to consider. And, if you’re just starting out, your answers to these many of these questions might be “zero”. But, that’s OK. Start at the top and take a section at a time. Figure out a way to keep the information you find pertinent on your radar *at least* once per month. Maybe it’s a report. A graph. A spreadsheet. Something. Anything.
Preparing For The worst
There is no crying in baseball, and there are no "sick days" when you run your own business.
Still, there are plenty of ways entrepreneurs can get sidelined--from sudden illnesses and travel delays to pregnancy and military duty. Without a well-defined plan, those leaves of absence can pose a dangerous threat.
"If something incapacitates you, it can be the death knell of your business," says Karla Leavelle, president of Human Capital Advisors, a McLean, Va.-based consulting firm that counsels small businesses.
How do you hedge the risk of lost leadership? Business insurance doesn't help. Property and liability coverage come in handy in case a customer slips and falls in your store or gets hurt using one of your products, and business-interruption insurance covers operating losses if a hurricane reduces your building to rubble.
If you really want things to run smoothly in your absence, you need other protection in place.
Here are some tips:
Have A Point Person
Be it the chief operating officer, outside counsel or even a trusted executive assistant, at least one person should have access to everything that keeps the place running--including passwords, bank account numbers and keys to safes. You might even consider handing over power of attorney in your absence.
Doling out that kind of trust isn't easy, but if something goes wrong while you're gone, you'll wish you had. "Owners are always scared that someone is going to steal secrets of the organization," says John Vyhnanek, a restaurant consultant in Boston. "It's a bit like walking a tightrope, but someone has to keep the business going if you can't be there."
map out the work flows in your organization.
Identify who does what and who can take over certain roles if need be. Start by having employees write out their own job descriptions and the list of activities they do on a daily basis.
"No one can duplicate the charisma of an entrepreneur," says Louis Celli, head of the Northeast Veterans Business Resource Center, which mentors military entrepreneurs. "But if the entire business is systematized, that can sustain the business until the entrepreneur returns."
Better yet, if you codify thoroughly and thoughtfully enough, you might even discover ways of making your business run more efficiently day to day.
Form Partnerships
If you own a medical, law or accounting practice, your clients simply can't wait for you to return. That's why you should draft a written agreement with a local competitor who can cover for you in the event of an emergency (and visa versa).
Hammer out the tough questions upfront, such as referral fees--both for your clients and any they might refer to your stand-in. You'll also want to make sure the fees are comparable, lest your clients blanch at getting a fatter bill than they are used to.
Go Mobile
Even if you aren't a gadget guy or gal, if you run your own business, you have to have access to critical clients and information at any moment.
Thursday, February 21, 2008
The art of the one-on-one presentation
************************************
You may think you're not in the business of giving presentations. Hey, you haven't ever spoken to a group bigger than your marketing department, right?
But whether you're giving the latest financial report to your boss or chatting up an important industry contact at a party, you need to master some key skills.
The most important thing to remember is that you want to get your message across - simply, succinctly, and clearly. Don't worry about impressing your listener. Just get your information across in the best way possible. Here are five ways to do it. (And, by the way, these suggestions work for presentations to larger audiences too.)
1. Cut to the core. When you plan what you want to say, imagine having to write a headline and the first three sentences of a newspaper article on your topic. This will help you focus on your core message.
2. Edit your story down to the three most important points. Too many points and you risk either boring your listeners or emphasising your three least important points.
3. Don't be abstract. Specifics are always better. If you must use an abstraction, describe it with vivid imagery and an analogy. It's much easier for people to visualise an abstraction if you put it in a story.
4. Don't be tempted to script out everything you'll say. If your speech reads well on paper, it'll most likely sound bad. If you must write it down (to make you feel more comfortable), forget about making it "English-teacher" perfect or you could end up sounding dull and robotic.
Keep it conversational. Whether you're presenting to a room full of marketing execs or giving your one-minute "elevator" pitch to a potential partner. Avoid overly big words and stiff, formal language. Be friendly, use contractions, and treat your presentation as if you're talking with a good friend.
************************************
You may think you're not in the business of giving presentations. Hey, you haven't ever spoken to a group bigger than your marketing department, right?
But whether you're giving the latest financial report to your boss or chatting up an important industry contact at a party, you need to master some key skills.
The most important thing to remember is that you want to get your message across - simply, succinctly, and clearly. Don't worry about impressing your listener. Just get your information across in the best way possible. Here are five ways to do it. (And, by the way, these suggestions work for presentations to larger audiences too.)
1. Cut to the core. When you plan what you want to say, imagine having to write a headline and the first three sentences of a newspaper article on your topic. This will help you focus on your core message.
2. Edit your story down to the three most important points. Too many points and you risk either boring your listeners or emphasising your three least important points.
3. Don't be abstract. Specifics are always better. If you must use an abstraction, describe it with vivid imagery and an analogy. It's much easier for people to visualise an abstraction if you put it in a story.
4. Don't be tempted to script out everything you'll say. If your speech reads well on paper, it'll most likely sound bad. If you must write it down (to make you feel more comfortable), forget about making it "English-teacher" perfect or you could end up sounding dull and robotic.
Keep it conversational. Whether you're presenting to a room full of marketing execs or giving your one-minute "elevator" pitch to a potential partner. Avoid overly big words and stiff, formal language. Be friendly, use contractions, and treat your presentation as if you're talking with a good friend.
7 Ways to Turn a Profit Online
These simple business models can help you get started, whether you want to create a Web site for your existing company or start from scratch with a new e-business.
Going online can be a great adventure--and a lot of fun--for any small business. But if you want your Web site to be more than a hobby, you need to put some thought into how to make it profitable. No matter what your business is, you should always be thinking about ways to diversify your revenue streams to boost your profits.
So to get you thinking about new strategies, I've put together a list of the seven ways you can earn income on the Web, and then I've explained how you can incorporate all of these methods to create success.
Online Profit SteamsWhether you're just beginning to develop your business model or simply analyzing an existing business, your chief focus should be on how you're going to generate income. There are seven ways to generate revenue on the Web:
· Sell your own products
· Sell your own services
· Drop ship products
· Recommend affiliate products
· Sell ad space
· Create a joint venture with like-minded businesses
· Start an affiliate program
Let me explain each of these a little further:
1. Sell your own products.
The main advantage to selling your own products is that you ultimately control how much profit you make on every sale and you therefore have the potential for the biggest profit margin. You know exactly what each product costs, and you can try out different price points to see what works the best. People appreciate good value, and removing the middleman is a great way to provide your customers with competitive prices that keep them coming back for more.
2. Sell your own services.
Whether you're a small-town dentist, a high-priced online legal consultant, a real estate agent, a tutor, a landscaper, a bed and breakfast owner, an auto-mechanic, a caterer, a fitness trainer or anything in between, you can profit from selling your service online. It's easy to get started selling a service online, but your revenue potential, in most cases, is limited. That's because, unlike someone selling a physical product that can be stored and shipped on demand, you can only provide as many services as your time allows.
When you sell a service, you're essentially selling a relationship with yourself. And this requires that you spend more time and effort establishing your credibility and developing rapport with your visitors than is typically required on a site selling a physical product. You not only need to establish the benefits of the service you're offering, you also need to establish the value of you providing this service.
3. Drop ship products.
If you want to sell products without the hassles of tracking your inventory, setting up warehouse space and maintaining a confusing shipping/receiving infrastructure, drop-shipping may be the choice for you. Drop shipping lets you sell quality, brand-name products on your site for a hefty profit, while the drop shipper takes care of fulfilling the order. They warehouse the stock, pack the orders and ship them out to your customers.
4. Recommend affiliate products.
Recommending affiliate products creates a "no-risk" partnership that allows you to promote another company's products or services on your site to earn a percentage of their sales. As one of the company's "affiliates" or promotion partners, you earn a commission each time someone you've referred to their site makes a purchase. To advertise their wares, you might post a banner on your site that links to the affiliate program's site, or you might publish an article about the company and their products in your newsletter.
5. Sell ad space.
Once your site has lots of highly targeted traffic, or a large, targeted opt-in list, you may be able to sell advertising. Advertisers are willing to buy ads when they're being directed at large numbers of their target market. Nowadays, though, advertising revenues are a lot less than they used to be, so I don't recommend you plan on making this your sole source of income. Selling ad space can be a great additional profit stream, but it's unlikely to keep your business afloat on its own.
6. Create a joint venture with like-minded businesses.
Joint ventures are all about related businesses teaming up and combining skills, products, services and resources to create new streams of income and profit. One great way to profit through joint ventures is to seek out products or services that would benefit your visitors, and then approach the companies that provide those products or services. Ask them if you can recommend their product or service on your site for a portion of the profits. Most companies will gladly agree to this arrangement--after all, there's no risk for them since they only pay you when you refer a paying customer.
7. Start an affiliate program.
With your own affiliate program, you can recruit an army of people (your affiliates) who will recommend your product on their web site for a percentage of any sale they refer. You have the power to exponentially increase your income as more and more affiliates sign up and you continue to teach your existing affiliates how to increase their commission checks (and your income).
It's one of the most powerful forms of online advertising I know. It allows you to grow your profits while keeping your business small, since you don't have to go out and spend money on salespeople and advertising. Your affiliates do the advertising for you, and you only pay them when they make a sale.
There's no reason why you can't incorporate several of these different income opportunities into your business model. The key is to focus on one, maximize revenue from it and then move on to the next.
Of course, this choice should be made with extra consideration to your budget. If, like most small-business people, you have a limited budget, you'll want to focus on revenue streams (like selling products or recommending affiliate products) that will produce results quickly.
These simple business models can help you get started, whether you want to create a Web site for your existing company or start from scratch with a new e-business.
Going online can be a great adventure--and a lot of fun--for any small business. But if you want your Web site to be more than a hobby, you need to put some thought into how to make it profitable. No matter what your business is, you should always be thinking about ways to diversify your revenue streams to boost your profits.
So to get you thinking about new strategies, I've put together a list of the seven ways you can earn income on the Web, and then I've explained how you can incorporate all of these methods to create success.
Online Profit SteamsWhether you're just beginning to develop your business model or simply analyzing an existing business, your chief focus should be on how you're going to generate income. There are seven ways to generate revenue on the Web:
· Sell your own products
· Sell your own services
· Drop ship products
· Recommend affiliate products
· Sell ad space
· Create a joint venture with like-minded businesses
· Start an affiliate program
Let me explain each of these a little further:
1. Sell your own products.
The main advantage to selling your own products is that you ultimately control how much profit you make on every sale and you therefore have the potential for the biggest profit margin. You know exactly what each product costs, and you can try out different price points to see what works the best. People appreciate good value, and removing the middleman is a great way to provide your customers with competitive prices that keep them coming back for more.
2. Sell your own services.
Whether you're a small-town dentist, a high-priced online legal consultant, a real estate agent, a tutor, a landscaper, a bed and breakfast owner, an auto-mechanic, a caterer, a fitness trainer or anything in between, you can profit from selling your service online. It's easy to get started selling a service online, but your revenue potential, in most cases, is limited. That's because, unlike someone selling a physical product that can be stored and shipped on demand, you can only provide as many services as your time allows.
When you sell a service, you're essentially selling a relationship with yourself. And this requires that you spend more time and effort establishing your credibility and developing rapport with your visitors than is typically required on a site selling a physical product. You not only need to establish the benefits of the service you're offering, you also need to establish the value of you providing this service.
3. Drop ship products.
If you want to sell products without the hassles of tracking your inventory, setting up warehouse space and maintaining a confusing shipping/receiving infrastructure, drop-shipping may be the choice for you. Drop shipping lets you sell quality, brand-name products on your site for a hefty profit, while the drop shipper takes care of fulfilling the order. They warehouse the stock, pack the orders and ship them out to your customers.
4. Recommend affiliate products.
Recommending affiliate products creates a "no-risk" partnership that allows you to promote another company's products or services on your site to earn a percentage of their sales. As one of the company's "affiliates" or promotion partners, you earn a commission each time someone you've referred to their site makes a purchase. To advertise their wares, you might post a banner on your site that links to the affiliate program's site, or you might publish an article about the company and their products in your newsletter.
5. Sell ad space.
Once your site has lots of highly targeted traffic, or a large, targeted opt-in list, you may be able to sell advertising. Advertisers are willing to buy ads when they're being directed at large numbers of their target market. Nowadays, though, advertising revenues are a lot less than they used to be, so I don't recommend you plan on making this your sole source of income. Selling ad space can be a great additional profit stream, but it's unlikely to keep your business afloat on its own.
6. Create a joint venture with like-minded businesses.
Joint ventures are all about related businesses teaming up and combining skills, products, services and resources to create new streams of income and profit. One great way to profit through joint ventures is to seek out products or services that would benefit your visitors, and then approach the companies that provide those products or services. Ask them if you can recommend their product or service on your site for a portion of the profits. Most companies will gladly agree to this arrangement--after all, there's no risk for them since they only pay you when you refer a paying customer.
7. Start an affiliate program.
With your own affiliate program, you can recruit an army of people (your affiliates) who will recommend your product on their web site for a percentage of any sale they refer. You have the power to exponentially increase your income as more and more affiliates sign up and you continue to teach your existing affiliates how to increase their commission checks (and your income).
It's one of the most powerful forms of online advertising I know. It allows you to grow your profits while keeping your business small, since you don't have to go out and spend money on salespeople and advertising. Your affiliates do the advertising for you, and you only pay them when they make a sale.
There's no reason why you can't incorporate several of these different income opportunities into your business model. The key is to focus on one, maximize revenue from it and then move on to the next.
Of course, this choice should be made with extra consideration to your budget. If, like most small-business people, you have a limited budget, you'll want to focus on revenue streams (like selling products or recommending affiliate products) that will produce results quickly.
Advertising On the Internet...
4 Easy Ways to Get Advertisers on Your Site
To make your site attractive to companies looking for ad space, you'll need to have a great niche market, tons of traffic and the promise of good ad placement on your site. However, if you don't have all these elements in place yet, there are still ways for you to make money from ads on your site. The easiest--and often the most successful--include:
1. Promote an affiliate product on your site.
Joining another company's affiliate program is one of the simplest ways to get started with internet advertising. While affiliate links aren't technically ads, they allow you to make money by promoting someone else's product. As an affiliate, you earn a commission each time someone you've referred makes a purchase. To encourage sales, you might post a banner on your site that links to the affiliate site or publish a newsletter article about their product.
Different affiliate programs offer different payout options. Some might offer 10 percent commission for each sale, while others pay up to 50 percent of each sale. You'll want to shop around for the best deal for you and the best fit for your site. To find good affiliate programs, check out the following directories:
· Associate Programs
· Affiliates Directory
· Refer-It
Some internet advertising pros are actually making all their income from signing on with multiple affiliate programs. They don't even have a product of their own! This isn't a strategy for beginners, however, so take some time to check out different programs before committing to this option.
2. Use targeted advertising with Google AdSense.
Google's AdSense program allows you to make money advertising on your site by placing targeted text ads generated by Google on your pages. The ads appear in rectangular boxes running down the side or across the bottom of a web page with the words "Ads by Google" over the top. These ads are paid for by businesses that use Google's pay-per-click program, AdWords. These ads reflect the content on your site, so if your site sells a book on how to recognize authentic baseball cards, for example, the ads that appear on your site might be for baseball card retailers.
As a Google AdSense publisher, you earn money every time a visitor to your site clicks on one of the AdWords ads on your site. If you're getting a lot of targeted traffic--and if these visitors are interested in the products being advertised--that could mean a healthy new source of extra income for you.
Best of all, Google AdSense is free to join. It's easy, too. Google does all the work of finding relevant ads for your site--you just collect the payments.
A word of warning: Google ads don't work for all sites, so if you add them, be sure to test them. You don't want to lose credibility with your target market.
3. Approach companies directly to ask if you can advertise for them.
If your site is already getting lots of traffic, try looking for sites that offer complementary products and target the same niche market as you do. For instance, if you own a bridal shop, you could approach a local florist to see if they'd like to advertise their wedding bouquets on your site. An ad on your site would also be seen as an implicit recommendation of their product, and it could send a ton of brides to their site. And the more successful your ads are, the more you can charge for them.
Be sure to contact potential internet advertising partners in a professional manner. Call them on the phone instead of just e-mailing them so your communication is more personal and professional. Be ready to supply them with information about your business and your site traffic. The more information you can give them, the more likely they'll be to consider your offer. And above all, make sure they have a solid reputation. If you partner with a questionable company, their activities could reflect poorly on your business.
4. Sign up for a blog-specific ad program.
If you have a blog, consider signing up to feature blog-specific ads on your site. The key is to consider the kinds of ads your target audience will find valuable. Here are some great ways to attract advertisers to your blog:
· Sign up with a context-based ad program like Google's AdSense that will automatically generate ads for your site that you can put up within minutes of being accepted to their program. Crisp Ads offers a similar program, but only for blogs.
· Place Amazon Associates ads on your site, and feature ads for products you personally use or are happy to endorse. That way, your customers are responding to your recommendations.
· Get advertisers interested in your blog with a link they can use to contact you for rates and requirements. This link can be a simple message saying "Click here to find out how to advertise on this blog!" That way, anyone visiting your site is free to discuss advertising opportunities with you.
· Sign up with an advertiser-publisher connection program like BlogAds or AdBrite, and get listed in their publishers' directory. One important note: With these types of ads, the advertisers look through listings of thousands of blogs to choose the right people to promote their products. Unless you're getting thousands of visitors a day, they might not be all that interested in doing business with you.
Making money from your site isn't a matter of putting up a few ads and grabbing a paycheck--it takes a lot of research and testing on an already established site to make even the best internet advertising strategies truly pay off.
Even then, you may find that your audience resists the presence of ads. If you're putting people off by placing ads on your pages, you could end up losing more customers and revenue than you actually gain. To make sure this doesn't happen, test every aspect of each new ad campaign you run.
Once you do discover the internet advertising strategies that work best for your site, you can try promoting another product, and then another. Soon, all those added revenue streams will combine to swell your profits.
To make your site attractive to companies looking for ad space, you'll need to have a great niche market, tons of traffic and the promise of good ad placement on your site. However, if you don't have all these elements in place yet, there are still ways for you to make money from ads on your site. The easiest--and often the most successful--include:
1. Promote an affiliate product on your site.
Joining another company's affiliate program is one of the simplest ways to get started with internet advertising. While affiliate links aren't technically ads, they allow you to make money by promoting someone else's product. As an affiliate, you earn a commission each time someone you've referred makes a purchase. To encourage sales, you might post a banner on your site that links to the affiliate site or publish a newsletter article about their product.
Different affiliate programs offer different payout options. Some might offer 10 percent commission for each sale, while others pay up to 50 percent of each sale. You'll want to shop around for the best deal for you and the best fit for your site. To find good affiliate programs, check out the following directories:
· Associate Programs
· Affiliates Directory
· Refer-It
Some internet advertising pros are actually making all their income from signing on with multiple affiliate programs. They don't even have a product of their own! This isn't a strategy for beginners, however, so take some time to check out different programs before committing to this option.
2. Use targeted advertising with Google AdSense.
Google's AdSense program allows you to make money advertising on your site by placing targeted text ads generated by Google on your pages. The ads appear in rectangular boxes running down the side or across the bottom of a web page with the words "Ads by Google" over the top. These ads are paid for by businesses that use Google's pay-per-click program, AdWords. These ads reflect the content on your site, so if your site sells a book on how to recognize authentic baseball cards, for example, the ads that appear on your site might be for baseball card retailers.
As a Google AdSense publisher, you earn money every time a visitor to your site clicks on one of the AdWords ads on your site. If you're getting a lot of targeted traffic--and if these visitors are interested in the products being advertised--that could mean a healthy new source of extra income for you.
Best of all, Google AdSense is free to join. It's easy, too. Google does all the work of finding relevant ads for your site--you just collect the payments.
A word of warning: Google ads don't work for all sites, so if you add them, be sure to test them. You don't want to lose credibility with your target market.
3. Approach companies directly to ask if you can advertise for them.
If your site is already getting lots of traffic, try looking for sites that offer complementary products and target the same niche market as you do. For instance, if you own a bridal shop, you could approach a local florist to see if they'd like to advertise their wedding bouquets on your site. An ad on your site would also be seen as an implicit recommendation of their product, and it could send a ton of brides to their site. And the more successful your ads are, the more you can charge for them.
Be sure to contact potential internet advertising partners in a professional manner. Call them on the phone instead of just e-mailing them so your communication is more personal and professional. Be ready to supply them with information about your business and your site traffic. The more information you can give them, the more likely they'll be to consider your offer. And above all, make sure they have a solid reputation. If you partner with a questionable company, their activities could reflect poorly on your business.
4. Sign up for a blog-specific ad program.
If you have a blog, consider signing up to feature blog-specific ads on your site. The key is to consider the kinds of ads your target audience will find valuable. Here are some great ways to attract advertisers to your blog:
· Sign up with a context-based ad program like Google's AdSense that will automatically generate ads for your site that you can put up within minutes of being accepted to their program. Crisp Ads offers a similar program, but only for blogs.
· Place Amazon Associates ads on your site, and feature ads for products you personally use or are happy to endorse. That way, your customers are responding to your recommendations.
· Get advertisers interested in your blog with a link they can use to contact you for rates and requirements. This link can be a simple message saying "Click here to find out how to advertise on this blog!" That way, anyone visiting your site is free to discuss advertising opportunities with you.
· Sign up with an advertiser-publisher connection program like BlogAds or AdBrite, and get listed in their publishers' directory. One important note: With these types of ads, the advertisers look through listings of thousands of blogs to choose the right people to promote their products. Unless you're getting thousands of visitors a day, they might not be all that interested in doing business with you.
Making money from your site isn't a matter of putting up a few ads and grabbing a paycheck--it takes a lot of research and testing on an already established site to make even the best internet advertising strategies truly pay off.
Even then, you may find that your audience resists the presence of ads. If you're putting people off by placing ads on your pages, you could end up losing more customers and revenue than you actually gain. To make sure this doesn't happen, test every aspect of each new ad campaign you run.
Once you do discover the internet advertising strategies that work best for your site, you can try promoting another product, and then another. Soon, all those added revenue streams will combine to swell your profits.
low-cost steps at making that best guess.
Step 1: Can You Brand It?
Say you are selling applesauce. The range of market prices is massive--from about 28 cents per 4-ounce cup for America's Choice brand at the local A&P to $3.10 for the Earth Best Kidz Organic brand at a Wild Oats grocery store.
Setting a price starts with a basic question: Is yours a branded or generic product? If it's generic, stop reading, charge the market rate and run your operation as lean as possible to preserve what little profit margin remains. If you think your product has unique features--a new health benefit, greater convenience, sexy style--that you can charge more for, read on.
Step 2: Do Qualitative Research
Start to hone in on the right price by running focus groups to get a sense of what customers are willing to pay.
If it's applesauce you are selling, ask consumers about what they like about applesauce and what they don't; that way, you will know if your marketing message will hit home. Don't ask them directly what they would pay for a particular kind of applesauce (customers tend to low-ball their answers), but instead ask how much they think such an applesauce would sell for in a store.
Whatever way you do it, run at least two identical sessions to confirm your findings.
Step 3: Do Quantitative Research
You've done the soft stuff--now it's time for some hard numbers. This step involves in-person or Internet surveys, or perhaps product trials with feedback forms. Sample questions: What price do you pay for applesauce? Would you be willing to pay a higher price for an applesauce with certain characteristics?
This research is even more costly that the qualitative kind, so you'll have to come up with your own questions if you want to save some dough. When it comes time to blast out the surveys, check out SurveyMonkey.com or InstantSurvey.com, which charge from $300 to $2,500, depending on the number of people you want to contact.
Step 4: Plan Your Attack
Before you set your price, decide how you want to attack the market. Will you try to hobble competitors by going low and stealing market share? Rupert Murdoch tried to do by charging a quarter for The New York Post to compete with hometown rival The Daily News at 50 cents; the Post's circulation has gone up, but profits haven't.) Or, do you charge a higher price and capture a smaller, but perhaps more committed--and profitable--customer base?
Step 5: Pull The Trigger
At this point, a big company like Procter & Gamble or Johnson & Johnson might pour huge sums into running tests in a bunch of markets to figure out the optimum price for a new product. Small companies simply can't afford to do this. So take what information you have, marry it with your strategy and pick your price.
Step 6: Don't Let Success Go To Your Head
So your applesauce is selling like gangbusters and you figure: Why not raise the price and bank a few more bucks? Be careful: It's much harder to jack prices than it is to lower them; indeed, you could send shoppers running the other way.If sales are sluggish, consider lowering the price--but not by too much. For consumer packaged goods, even a 1% decrease in price can lead to a 5% increase in sales, says IRI. Slash prices, though, and you could tarnish your brand's image permanently
Where You Stand, Is Where You Fall.
What is your value proposition?
This is the single most important question of the bunch. If you can't explain--in three, jargon-free sentences or less--why customers need your product, you do not have a value proposition. Without a need, there is no incentive for customers to pay. And without sales, you have no business. Period.
What differentiates your product from the competitors'?
Few companies can rely on--let alone afford--clever marketing schemes to separate themselves from the competition. Yes, Starbucks made people believe they wanted $4 caffeinated concoctions, and Louis Vuitton lulled people into shelling out $1,500 for denim handbags, but those are the exceptions that prove the rule. If you want to win in business, you need to offer something tangibly valuable that the competition doesn't.
How much cash do you need to survive the early years?
It doesn't matter how much money your business might make down the road if you can't get out of your garage. Plenty of business plans boast hockey-stick-style financial projections but run out of cash before the good times kick in. (Remember all those busted dot-com companies from the tech boom?) Three words: Mind the cash.
What are your strengths?
How big is the threat of new entrants?
If you're smart enough to spy a profitable business opportunity, you can bet competition isn't far behind. Some barriers to entry--patented technology, a storied brand--are more fortified than others, but eventually someone will find a way to do what you do faster, cheaper and maybe even better. If not a direct competitor, then a substitute technology might take a chunk out of your hide. (Think what digital film did to Kodak.) The trick: building a loyal following before that happens.
How much power do your suppliers have?
Convincing customers to buy your products is tough enough without suppliers breaking your back. Basic rule of thumb: The fewer the number of suppliers, the more sway they have. Take the steel industry, which relies on a handful of companies for its iron feedstock. If two of those big guys should get together have been discussing--they would have significant pricing power, potentially crimping steel producers' margins. On the flipside, beware getting hooked on low-cost providers who don't keep an eye on quality. ("Lead-laced" Barbie, anyone?)
Does the business scale?
Bill Gates plowed piles of money into developing the first copy of Microsoft Office. The beauty: Each additional copy of that software program costs next to nothing to produce. That's called scale--and it's the difference between modest wealth and obscene riches. What models don't scale? Think service businesses, where the need for people grows along with revenues.
What price will your customers pay?
Get this answer wrong and you could leave bags of money on the table--or worse, send customers running into the arms of the competition. When Apple sliced the price of its iPhone by a third after only two months on the market, even loyal customers screamed, forcing chief Steve Jobs to apologize and offer a partial rebate. Consultants get paid handsomely to help companies arrive at the right price. For more affordable advice, check out .
How committed are you to making this happen?
An audience member asked what life looked like at the helm of such a colossal firm. Prince responded that, save for a few exceptions, every evening for the next five months was already accounted for. Fair warning: If you want to run the show, get ready to give everything--and then some.
This is the single most important question of the bunch. If you can't explain--in three, jargon-free sentences or less--why customers need your product, you do not have a value proposition. Without a need, there is no incentive for customers to pay. And without sales, you have no business. Period.
What differentiates your product from the competitors'?
Few companies can rely on--let alone afford--clever marketing schemes to separate themselves from the competition. Yes, Starbucks made people believe they wanted $4 caffeinated concoctions, and Louis Vuitton lulled people into shelling out $1,500 for denim handbags, but those are the exceptions that prove the rule. If you want to win in business, you need to offer something tangibly valuable that the competition doesn't.
How much cash do you need to survive the early years?
It doesn't matter how much money your business might make down the road if you can't get out of your garage. Plenty of business plans boast hockey-stick-style financial projections but run out of cash before the good times kick in. (Remember all those busted dot-com companies from the tech boom?) Three words: Mind the cash.
What are your strengths?
How big is the threat of new entrants?
If you're smart enough to spy a profitable business opportunity, you can bet competition isn't far behind. Some barriers to entry--patented technology, a storied brand--are more fortified than others, but eventually someone will find a way to do what you do faster, cheaper and maybe even better. If not a direct competitor, then a substitute technology might take a chunk out of your hide. (Think what digital film did to Kodak.) The trick: building a loyal following before that happens.
How much power do your suppliers have?
Convincing customers to buy your products is tough enough without suppliers breaking your back. Basic rule of thumb: The fewer the number of suppliers, the more sway they have. Take the steel industry, which relies on a handful of companies for its iron feedstock. If two of those big guys should get together have been discussing--they would have significant pricing power, potentially crimping steel producers' margins. On the flipside, beware getting hooked on low-cost providers who don't keep an eye on quality. ("Lead-laced" Barbie, anyone?)
Does the business scale?
Bill Gates plowed piles of money into developing the first copy of Microsoft Office. The beauty: Each additional copy of that software program costs next to nothing to produce. That's called scale--and it's the difference between modest wealth and obscene riches. What models don't scale? Think service businesses, where the need for people grows along with revenues.
What price will your customers pay?
Get this answer wrong and you could leave bags of money on the table--or worse, send customers running into the arms of the competition. When Apple sliced the price of its iPhone by a third after only two months on the market, even loyal customers screamed, forcing chief Steve Jobs to apologize and offer a partial rebate. Consultants get paid handsomely to help companies arrive at the right price. For more affordable advice, check out .
How committed are you to making this happen?
An audience member asked what life looked like at the helm of such a colossal firm. Prince responded that, save for a few exceptions, every evening for the next five months was already accounted for. Fair warning: If you want to run the show, get ready to give everything--and then some.
Right Moves
Procedures, Protocols, and Processes:
Right now, because of the surge in business, we are doing a bad job of entering and fulfilling orders. We have to move our fulfillment out of house and learn to manage service companies. We also have to get our accounting and customer service departments working more smoothly. We need a VP of operations - someone really good and very detail-oriented (because we aren't) - and we need that person ASAP.
Based on that quick assessment of the business, it was easy for us to see the importance of hiring two more superstars - one to help us get operations in order and the other to take a lead in marketing so we can grow our prospect file as it needs to be grown. If we make it a priority to fill these two positions, we can have it done in 30 to 45 days, and then begin the process of integrating and educating our new people. In six months, if all goes well, we will be ready for the next step up - to the $5 million level.
Companies fail for a host of reasons. Bad luck plays a role, sure, but disaster usually strikes because of a more fundamental flaw--in the original idea, the strategy, the execution or all of the above.
When it comes to building a business, even Warren Buffett would agree that no one can spot every opportunity or anticipate every threat. There are simply too many variables. And in an increasingly competitive global economy, those variables are changing faster than ever before.
What entrepreneurs can do is ask the core set of tough questions that govern the fate of any enterprise. Armed with those answers, they stand the best chance of beating some fairly dire odds: Studies estimate that just two-thirds of all start-ups survive the first two years, and less than half make it to the fourth.
Make no mistake: Digging for those answers is a grueling exercise--one that takes serious intellectual and emotional honesty. With any hope, the process begins long before money's been spent, products are built and customers are lost.
Right now, because of the surge in business, we are doing a bad job of entering and fulfilling orders. We have to move our fulfillment out of house and learn to manage service companies. We also have to get our accounting and customer service departments working more smoothly. We need a VP of operations - someone really good and very detail-oriented (because we aren't) - and we need that person ASAP.
Based on that quick assessment of the business, it was easy for us to see the importance of hiring two more superstars - one to help us get operations in order and the other to take a lead in marketing so we can grow our prospect file as it needs to be grown. If we make it a priority to fill these two positions, we can have it done in 30 to 45 days, and then begin the process of integrating and educating our new people. In six months, if all goes well, we will be ready for the next step up - to the $5 million level.
Companies fail for a host of reasons. Bad luck plays a role, sure, but disaster usually strikes because of a more fundamental flaw--in the original idea, the strategy, the execution or all of the above.
When it comes to building a business, even Warren Buffett would agree that no one can spot every opportunity or anticipate every threat. There are simply too many variables. And in an increasingly competitive global economy, those variables are changing faster than ever before.
What entrepreneurs can do is ask the core set of tough questions that govern the fate of any enterprise. Armed with those answers, they stand the best chance of beating some fairly dire odds: Studies estimate that just two-thirds of all start-ups survive the first two years, and less than half make it to the fourth.
Make no mistake: Digging for those answers is a grueling exercise--one that takes serious intellectual and emotional honesty. With any hope, the process begins long before money's been spent, products are built and customers are lost.
The P Game...
Programme: B+
We have a good idea how to make the initial sale (where to go to find prospects, how to intrigue them, how to sell them the first time) and how to sell them after that.
Product: A
We have great products. Really great products. Walt creates them, and he understands what makes a product great.
Prospects: C
So far, we are only scratching the surface in terms of identifying good media for our advertising. We are gradually expanding our marketable universe each month by about 2,000 prospects, but we should - and will one day - be growing our prospect file by 10 times that number. That is something we have to work on in a serious way.
Proposition: A-
The offer - what you charge for your product, the payment terms, and the guarantee - is critical to any business. In Walt's business, we have a very good idea of what that should be. That idea is based on my experience - more than 10 years in the industry - and from being able to see what our competitors are doing. There are certainly things about the offer that we can test - particularly in the area of continuity sales - but, for the most part, we believe we understand how to form our selling propositions.
People: B-
The employees that we have are very good, but to do a better job of expanding the business's marketable universe and improve operations we will need two more superstars. Getting them is our top priority right now.
Promotions: A
feel confident that you have the creative power to produce good promotions now and in the future.
We have a good idea how to make the initial sale (where to go to find prospects, how to intrigue them, how to sell them the first time) and how to sell them after that.
Product: A
We have great products. Really great products. Walt creates them, and he understands what makes a product great.
Prospects: C
So far, we are only scratching the surface in terms of identifying good media for our advertising. We are gradually expanding our marketable universe each month by about 2,000 prospects, but we should - and will one day - be growing our prospect file by 10 times that number. That is something we have to work on in a serious way.
Proposition: A-
The offer - what you charge for your product, the payment terms, and the guarantee - is critical to any business. In Walt's business, we have a very good idea of what that should be. That idea is based on my experience - more than 10 years in the industry - and from being able to see what our competitors are doing. There are certainly things about the offer that we can test - particularly in the area of continuity sales - but, for the most part, we believe we understand how to form our selling propositions.
People: B-
The employees that we have are very good, but to do a better job of expanding the business's marketable universe and improve operations we will need two more superstars. Getting them is our top priority right now.
Promotions: A
feel confident that you have the creative power to produce good promotions now and in the future.
Money-Making Business
"It's almost like a management report card. By getting a valuation done on some periodic basis, it can give a business owner a sense of how much their business increased or decreased during some certain time period."
BB, the legendary copywriter and one of my biggest clients, is a constant articulator of powerful, business-building ideas. Recently, in a memo to his senior executives, he discussed the difficulty of starting and growing new businesses, and offered a brilliant synopsis of "what it takes to make
(such) businesses work."
"You have heard about the Four P's of salesmanship: Promise. Picture.
Proof and Payoff.
Those are very effective guides in creating sales packages that produce. But I have five more P's I'd like to share with you.
These could be helpful in launching and/or growing your business."
BB's Five P's of business-building are...
1. Programme: You need a business model that works - one that can produce reliable, long-term profitability with an acceptable level of investment and risk.
2. Product: You want to sell products that are easy to sell the first time and even easier to sell thereafter. In other words, you want to sell products that give people what they are looking for at a price they can rationalize.
3. Prospects: You need people to sell to. And you need a sufficient number of them to meet your business's long-term goals. They have to be plentiful.
And they have to be profitable. Where do you find such quality customers?
Mailing lists? Websites? Keyword searches? Telephone calls? Finding potential buyers is a big part of any business.
4. Proposition: Every market is unique. So is every product. Figuring out the optimum way to sell your unique product to a given market segment is your first and most important priority. Until you do that, you can't produce profits.
5. People: Every business, no matter what it does, where it's located, or how automated its processes are, depends on people to create and maintain its profits. Taking a business to the next level - even to keep it from falling backward - is most easily accomplished by the hiring, promotion, training, and nurturing of a team of key people who can work skillfully and efficiently. You have to find them and then motivate them and then hold on to them.
To BB's very good list, I would add four more P's that you have to pay attention to...
6. Promotions: Discovering the right proposition for your business is the first - but only the first - priority of selling. To be able to keep your business profitable, you have to be able to produce a continuous flow of successful, customer-grabbing promotions (sales offers that attract attention, offer benefits to the customers, and persuade them to buy your products). A business that can't produce breakthrough promotions on an ongoing basis is a business that is doomed to mediocrity or even failure.
7-9. Procedures, Protocols, and Processes: If you get the first six P's working right, your business will never suffer from a lack of sales. But if you don't have effective operations - order-taking, fulfillment, accounting, and customer service - your profits will always be half of what they should be, and your stress will be double what it needs to be.
"It's almost like a management report card. By getting a valuation done on some periodic basis, it can give a business owner a sense of how much their business increased or decreased during some certain time period."
BB, the legendary copywriter and one of my biggest clients, is a constant articulator of powerful, business-building ideas. Recently, in a memo to his senior executives, he discussed the difficulty of starting and growing new businesses, and offered a brilliant synopsis of "what it takes to make
(such) businesses work."
"You have heard about the Four P's of salesmanship: Promise. Picture.
Proof and Payoff.
Those are very effective guides in creating sales packages that produce. But I have five more P's I'd like to share with you.
These could be helpful in launching and/or growing your business."
BB's Five P's of business-building are...
1. Programme: You need a business model that works - one that can produce reliable, long-term profitability with an acceptable level of investment and risk.
2. Product: You want to sell products that are easy to sell the first time and even easier to sell thereafter. In other words, you want to sell products that give people what they are looking for at a price they can rationalize.
3. Prospects: You need people to sell to. And you need a sufficient number of them to meet your business's long-term goals. They have to be plentiful.
And they have to be profitable. Where do you find such quality customers?
Mailing lists? Websites? Keyword searches? Telephone calls? Finding potential buyers is a big part of any business.
4. Proposition: Every market is unique. So is every product. Figuring out the optimum way to sell your unique product to a given market segment is your first and most important priority. Until you do that, you can't produce profits.
5. People: Every business, no matter what it does, where it's located, or how automated its processes are, depends on people to create and maintain its profits. Taking a business to the next level - even to keep it from falling backward - is most easily accomplished by the hiring, promotion, training, and nurturing of a team of key people who can work skillfully and efficiently. You have to find them and then motivate them and then hold on to them.
To BB's very good list, I would add four more P's that you have to pay attention to...
6. Promotions: Discovering the right proposition for your business is the first - but only the first - priority of selling. To be able to keep your business profitable, you have to be able to produce a continuous flow of successful, customer-grabbing promotions (sales offers that attract attention, offer benefits to the customers, and persuade them to buy your products). A business that can't produce breakthrough promotions on an ongoing basis is a business that is doomed to mediocrity or even failure.
7-9. Procedures, Protocols, and Processes: If you get the first six P's working right, your business will never suffer from a lack of sales. But if you don't have effective operations - order-taking, fulfillment, accounting, and customer service - your profits will always be half of what they should be, and your stress will be double what it needs to be.
Private Money
12 More advantages of private money…
1. The ability to get money fast often allows you to snap up good deals at a discount.
2. There are no credit checks, and the loan doesn’t show up on your credit report.
3. You have access to a potentially unlimited source of funds.
4. Since you set the rules, you’re in control - not the bank.
5. You can help your friends and family make extra money, and meet a great network of people.
6. You can get some of your profit when you buy property by borrowing more than the cost of the property.
7. You’ll have the flexibility to do deals that banks might question (like my no-furnace bargain).
8. You can make offers with confidence. No worries about bank delays or being denied financing.
9. You can structure quick and more profitable exit strategies.
10. You’ll save money on the deal in the short run and long run.
11. Private money loans are cheaper than investing with a partner.
12. You can build the foundation for a very profitable brokerage business.
Best of all, if you treat your private lenders right, they’ll be there for you again and again when you find hot opportunities in the future.
Many investors have watched a deal slip through their hands while they waited for a bank to approve their loan. Once you have private money available, that won’t happen to you. You can make an offer knowing you can go ahead and set a closing date… and leave your competition wondering how you did it so quickly.
************************************
To be a successful entrepreneur, you need five things:
1. A product that delivers a benefit people already want at a price they’re willing to pay…
2. A strategy that puts your sales copy in front of your best prospects…
3. Great headlines and lead copy that compel them to read your sales message…
4. Sales copy that convincingly presents the reasons why the prospect should buy and overcomes any objections he might have, and…
5. A quick, easy way for him to order.
1. The ability to get money fast often allows you to snap up good deals at a discount.
2. There are no credit checks, and the loan doesn’t show up on your credit report.
3. You have access to a potentially unlimited source of funds.
4. Since you set the rules, you’re in control - not the bank.
5. You can help your friends and family make extra money, and meet a great network of people.
6. You can get some of your profit when you buy property by borrowing more than the cost of the property.
7. You’ll have the flexibility to do deals that banks might question (like my no-furnace bargain).
8. You can make offers with confidence. No worries about bank delays or being denied financing.
9. You can structure quick and more profitable exit strategies.
10. You’ll save money on the deal in the short run and long run.
11. Private money loans are cheaper than investing with a partner.
12. You can build the foundation for a very profitable brokerage business.
Best of all, if you treat your private lenders right, they’ll be there for you again and again when you find hot opportunities in the future.
Many investors have watched a deal slip through their hands while they waited for a bank to approve their loan. Once you have private money available, that won’t happen to you. You can make an offer knowing you can go ahead and set a closing date… and leave your competition wondering how you did it so quickly.
************************************
To be a successful entrepreneur, you need five things:
1. A product that delivers a benefit people already want at a price they’re willing to pay…
2. A strategy that puts your sales copy in front of your best prospects…
3. Great headlines and lead copy that compel them to read your sales message…
4. Sales copy that convincingly presents the reasons why the prospect should buy and overcomes any objections he might have, and…
5. A quick, easy way for him to order.
Wednesday, February 20, 2008
"How can I grow this thing and make it strong?"
1. Understand that money fuels growth
even for non-profits. You need money to get started and money to expand.
2. Recognise where that money is coming from.
For the most part, it will come from two different sources: affluent do-gooders and governmental agencies. These, then, are your "customers." For the first few years, you will have to spend most of your time and effort "selling" them on donating money to your non-profit. Most non-profit entrepreneurs don’t do that. In the early stage of their venture, they spend the lion’s share of their time developing programmes - more programmes than they need to get the money
.
3. To get government money, it’s a relatively simple process:
Investigate grants that would apply to your concept, and apply for them. It will be cumbersome and time-consuming - but if you are willing to follow the rules, you should be able to get some funding.
4. Will that government funding be fast enough and big enough to float your boat?
Probably not. And that’s where private money comes in. To get private sources to fund your dream, you are going to have to come up with a very engaging USP (unique selling proposition). In other words, you’ll have to come up with a concept that is in some exciting way new and different from that of other, similar non-profits.
5. To come up with that USP, I’d recommend that you find out as much as you can about organisations that support young girls in urban centres.
There are probably hundreds (if not thousands) of them. Find out who they are and which are the most successful. Call the people heading up the most successful ones and interview them. Be gracious. Make friends. They will help you later.
6. Study the theory behind organisations like these.
Be able to quote persuasive data in casual conversation. Give yourself the goal of becoming one of the world’s top experts in the niche you are entering. If you spend 5,000 hours studying and talking to professionals in your field, you will rise to that level.
7. Locate affluent people in your community. Find out where they socialise.
Find out where they work. Meet them at parties and events and chat them up. Send them personal letters. E-mail them. Your initial goal should not be to raise money. If you come at them directly, they will back away. Remember, wealthy people are always being hit up for donations. They are good at refusing - but less so when they are being asked by someone they like and trust. You have to become that someone. How can you do that? By developing relationships with them that are based on them talking to you.
1. Understand that money fuels growth
even for non-profits. You need money to get started and money to expand.
2. Recognise where that money is coming from.
For the most part, it will come from two different sources: affluent do-gooders and governmental agencies. These, then, are your "customers." For the first few years, you will have to spend most of your time and effort "selling" them on donating money to your non-profit. Most non-profit entrepreneurs don’t do that. In the early stage of their venture, they spend the lion’s share of their time developing programmes - more programmes than they need to get the money
.
3. To get government money, it’s a relatively simple process:
Investigate grants that would apply to your concept, and apply for them. It will be cumbersome and time-consuming - but if you are willing to follow the rules, you should be able to get some funding.
4. Will that government funding be fast enough and big enough to float your boat?
Probably not. And that’s where private money comes in. To get private sources to fund your dream, you are going to have to come up with a very engaging USP (unique selling proposition). In other words, you’ll have to come up with a concept that is in some exciting way new and different from that of other, similar non-profits.
5. To come up with that USP, I’d recommend that you find out as much as you can about organisations that support young girls in urban centres.
There are probably hundreds (if not thousands) of them. Find out who they are and which are the most successful. Call the people heading up the most successful ones and interview them. Be gracious. Make friends. They will help you later.
6. Study the theory behind organisations like these.
Be able to quote persuasive data in casual conversation. Give yourself the goal of becoming one of the world’s top experts in the niche you are entering. If you spend 5,000 hours studying and talking to professionals in your field, you will rise to that level.
7. Locate affluent people in your community. Find out where they socialise.
Find out where they work. Meet them at parties and events and chat them up. Send them personal letters. E-mail them. Your initial goal should not be to raise money. If you come at them directly, they will back away. Remember, wealthy people are always being hit up for donations. They are good at refusing - but less so when they are being asked by someone they like and trust. You have to become that someone. How can you do that? By developing relationships with them that are based on them talking to you.
Tuesday, February 19, 2008
Learn to Market More Creatively
Knowledge of your industry can bring originality to your business.
The Nestle Corporation in Geneva, Switzerland, asked Leo Burnett Advertising in Chicago, Illinois, where creativity came from. The answer was revealed by asking the same question to artists, dancers, writers, musicians, poets, engineers, and architects. All gave the same answer to the question. They said that creativity comes from knowledge. The more knowledge you have, the more creative you can be. Applying creativity to the arts listed above has the purpose of human enjoyment. Applying creativity to your business has the primary purpose of generating profits. If it doesn't generate profits, it's not creative.
Don't ever go down the garden path of beauty and creative expression in marketing. Sure, it's a plus if your audio and visual materials look and sound great. But that's not their job. Generating profits is their job. Get your artistic kicks in the concert hall. There's no place for them in the boardroom.
The Knowledge You Need
Direct your creativity towards the accumulation of knowledge you need. The path to that knowledge is illuminated by research, the start-up point for the start-up guerrilla. That training as well as your own adventures as a guerrilla marketer starts with information you've really got to have. Much of it is published on the internet. Lots of it is yours for free at your local chamber of commerce. Bookstores and libraries are bulging with just the information you need, and professional associations and groups will share it with you. Our favorite is the University of Google.
There's only one thing that accessible information lacks--specific information about your customers. It's laden with data about groups, but as a guerrilla, you're more interested in data about individuals.
Research Your Consumer
The best way to get that data is to get it yourself. Do your own research. Prepare customer and prospect questionnaires (a different one for each group) that ask a lot of questions. Have a notation at the top of the questionnaire that you're sorry to ask so many questions, but the more you know about them, the better service you can be to them.
Ask Specific questions
With answers that open new doors, such as what is your favorite sport? Favorite rock group? Favorite baseball team? Do you have a hobby? Do you have any pets? The answers to these questions can help you add immense power to your e-mail and website. There is an old proverb: "It is better to know something specific about your spouse than know everything about marriage." The same holds true for buyer-seller relationships. The "something specific" is what you get with research and the way to switch a start-up marketing campaign into a higher gear.
If you want a place to exercise your creativity, it's in your customer questionnaire. Most business owners know most of the right answers. Guerrilla business owners also know most of the right questions. Knowing the right questions to ask and then asking them is one of the arts of the start-up guerrilla marketing campaign.
Examine the Answers
Processing what you learn is what it's all about because that's where the action begins taking place. You notice a great number of customers in three zip codes. That spurs a mailing to those codes. You must be doing or saying something right. What can it be?
There are still many other areas deserving of further exploration. First on that list are your prospects, those people who for some silly reason haven't yet purchased from you. Hey! Hold on a second. Maybe it wasn't a silly reason. Maybe it was you doing a silly thing or missing an important detail in customer service.
Always look at it like this:
If your prospects aren't your customers, there's got to be a reason. Find out what that reason it and then correct it. Be relentless. Be pig-headed and single-purposed, but do everything you can do to transform all of your prospects into customers. That may not happen exactly. But your efforts won't go unrewarded. My boss and idol Leo Burnett said, "When you reach for the stars, you might not get one, but you're not likely to come up with a handful of mud either."
The best marketing builds confidence and invites a purchase. Best and most unique of all, the best marketing gets through to people.
That's why knowing a lot about your prospects will help you stand apart from your competitors and shine in the minds of your prospects and customers.
Once you've learned all you can about your customers and your prospects, what's the next area worth researching? A smart place to focus is your own industry. Research that industry--how did the world function before Google?--and get a feel for what the winners are doing, the latest trends, and for signs of any competitors you might have.
Look at Industry Winners
One of the secrets to market domination is knocking yourself off. NOT cloning yourself, but creating a new unique selling proposition in the same market.
That's why Toyota created Lexus. It's why McDonalds started Chipotle. It's not just big companies either; it's just as true with "little" guys on the internet. In some of the most competitive markets imaginable, you see 11 real ads on the first page, and most people don't know that two parent companies might be responsible for five or six of them.Hey, if you've successfully gained a foothold in one market--and you understand that market deeply--and want to grow your business why go to the trouble of learning a brand-new niche?
Do something in the one you're already in. Create a new offer that's so appealing, it takes its place along with the other top dogs: New product, new website, new Google account.
Don't ever forget that on the any search term there's a whole spectrum of tastes and desires that the keyword represents. One website and one ad can only cater to a handful of them. There are still others you're not serving. But you can.
Do Field Research
As lush and fascinating as the internet may be for research, we can't help but point you in the direction of trade shows where you'll not only get a state-of-the-moment feel for your industry but you'll also get a lot of inside information not yet published online. The networking at these shows may be more valuable than anything on the trade show floor.
The product or service you offer also merits abundant research time. The better you know your offering, the better equipped you'll be to talk about it, understand it, market it. Eventually, you'll be called upon to prepare a benefits list, that actual in-writing list of the benefits people gain by buying from you. We urge you to put a lot of effort and creativity into this list because it's what you'll be communicating to your prospects and customers. They'll then make their decision to purchase (or not to purchase) based upon the benefits you do (or don't) convey.
Understand Your Competition
Your next point of research will be your competition, which you'll already know pretty well because of your forays into studying your industry and your product. Learn what they say and where they say it. Maintain vigil here because they'll tip their hand frequently by how they adjust their message and their media. You don't want to copy them but you do want to be aware of what they're up to. You can be sure that they're checking up on you. You might even buy the product of the leader in your industry. Get to see firsthand its sales presentation, display, packaging, follow-up, and product itself. Learning from leaders is a guerrilla strength.
Explore Media OpportunitiesDon't fail to research life outside your own industry. Get to know the media, online and offline available to you. Get to know the internet on an intimate basis within your industry. Start-up guerrillas engage in a monthly half hour surf of the internet to catch the best that's online--in and out of their industry. The research you put in looking for media opportunities for your company will pay off every time.
Study the Latest Technology
That research should include researching the latest technology that might empower your business. The move in entrepreneurship is toward automation. Happily, automation is not expensive. Your company can give off the vibes of a huge, lavishly funded corporation with a constantly busy staff, when the truth is it's just little old you pushing the right button on your automated customer profitability center. Technology can help you in the areas of marketing, production, finances, distribution, and a whole lot more. Skip it if you don't need it, but don't miss it if it can contribute to your profitability. It probably can. More people earn money while they sleep than ever before.
We didn't explore a totally different kind of research, one that we applaud and respect. But assuming you aren't yet a wealthy and thriving company, we nudge you in the direction of free research, which has been outlined above. Later, when you've taken this advice and are a wealthy and thriving company, look into paid research, which takes over the entire research function, from asking the right questions to analyzing the answers. The right question can be the making of a company.
Knowledge of your industry can bring originality to your business.
The Nestle Corporation in Geneva, Switzerland, asked Leo Burnett Advertising in Chicago, Illinois, where creativity came from. The answer was revealed by asking the same question to artists, dancers, writers, musicians, poets, engineers, and architects. All gave the same answer to the question. They said that creativity comes from knowledge. The more knowledge you have, the more creative you can be. Applying creativity to the arts listed above has the purpose of human enjoyment. Applying creativity to your business has the primary purpose of generating profits. If it doesn't generate profits, it's not creative.
Don't ever go down the garden path of beauty and creative expression in marketing. Sure, it's a plus if your audio and visual materials look and sound great. But that's not their job. Generating profits is their job. Get your artistic kicks in the concert hall. There's no place for them in the boardroom.
The Knowledge You Need
Direct your creativity towards the accumulation of knowledge you need. The path to that knowledge is illuminated by research, the start-up point for the start-up guerrilla. That training as well as your own adventures as a guerrilla marketer starts with information you've really got to have. Much of it is published on the internet. Lots of it is yours for free at your local chamber of commerce. Bookstores and libraries are bulging with just the information you need, and professional associations and groups will share it with you. Our favorite is the University of Google.
There's only one thing that accessible information lacks--specific information about your customers. It's laden with data about groups, but as a guerrilla, you're more interested in data about individuals.
Research Your Consumer
The best way to get that data is to get it yourself. Do your own research. Prepare customer and prospect questionnaires (a different one for each group) that ask a lot of questions. Have a notation at the top of the questionnaire that you're sorry to ask so many questions, but the more you know about them, the better service you can be to them.
Ask Specific questions
With answers that open new doors, such as what is your favorite sport? Favorite rock group? Favorite baseball team? Do you have a hobby? Do you have any pets? The answers to these questions can help you add immense power to your e-mail and website. There is an old proverb: "It is better to know something specific about your spouse than know everything about marriage." The same holds true for buyer-seller relationships. The "something specific" is what you get with research and the way to switch a start-up marketing campaign into a higher gear.
If you want a place to exercise your creativity, it's in your customer questionnaire. Most business owners know most of the right answers. Guerrilla business owners also know most of the right questions. Knowing the right questions to ask and then asking them is one of the arts of the start-up guerrilla marketing campaign.
Examine the Answers
Processing what you learn is what it's all about because that's where the action begins taking place. You notice a great number of customers in three zip codes. That spurs a mailing to those codes. You must be doing or saying something right. What can it be?
There are still many other areas deserving of further exploration. First on that list are your prospects, those people who for some silly reason haven't yet purchased from you. Hey! Hold on a second. Maybe it wasn't a silly reason. Maybe it was you doing a silly thing or missing an important detail in customer service.
Always look at it like this:
If your prospects aren't your customers, there's got to be a reason. Find out what that reason it and then correct it. Be relentless. Be pig-headed and single-purposed, but do everything you can do to transform all of your prospects into customers. That may not happen exactly. But your efforts won't go unrewarded. My boss and idol Leo Burnett said, "When you reach for the stars, you might not get one, but you're not likely to come up with a handful of mud either."
The best marketing builds confidence and invites a purchase. Best and most unique of all, the best marketing gets through to people.
That's why knowing a lot about your prospects will help you stand apart from your competitors and shine in the minds of your prospects and customers.
Once you've learned all you can about your customers and your prospects, what's the next area worth researching? A smart place to focus is your own industry. Research that industry--how did the world function before Google?--and get a feel for what the winners are doing, the latest trends, and for signs of any competitors you might have.
Look at Industry Winners
One of the secrets to market domination is knocking yourself off. NOT cloning yourself, but creating a new unique selling proposition in the same market.
That's why Toyota created Lexus. It's why McDonalds started Chipotle. It's not just big companies either; it's just as true with "little" guys on the internet. In some of the most competitive markets imaginable, you see 11 real ads on the first page, and most people don't know that two parent companies might be responsible for five or six of them.Hey, if you've successfully gained a foothold in one market--and you understand that market deeply--and want to grow your business why go to the trouble of learning a brand-new niche?
Do something in the one you're already in. Create a new offer that's so appealing, it takes its place along with the other top dogs: New product, new website, new Google account.
Don't ever forget that on the any search term there's a whole spectrum of tastes and desires that the keyword represents. One website and one ad can only cater to a handful of them. There are still others you're not serving. But you can.
Do Field Research
As lush and fascinating as the internet may be for research, we can't help but point you in the direction of trade shows where you'll not only get a state-of-the-moment feel for your industry but you'll also get a lot of inside information not yet published online. The networking at these shows may be more valuable than anything on the trade show floor.
The product or service you offer also merits abundant research time. The better you know your offering, the better equipped you'll be to talk about it, understand it, market it. Eventually, you'll be called upon to prepare a benefits list, that actual in-writing list of the benefits people gain by buying from you. We urge you to put a lot of effort and creativity into this list because it's what you'll be communicating to your prospects and customers. They'll then make their decision to purchase (or not to purchase) based upon the benefits you do (or don't) convey.
Understand Your Competition
Your next point of research will be your competition, which you'll already know pretty well because of your forays into studying your industry and your product. Learn what they say and where they say it. Maintain vigil here because they'll tip their hand frequently by how they adjust their message and their media. You don't want to copy them but you do want to be aware of what they're up to. You can be sure that they're checking up on you. You might even buy the product of the leader in your industry. Get to see firsthand its sales presentation, display, packaging, follow-up, and product itself. Learning from leaders is a guerrilla strength.
Explore Media OpportunitiesDon't fail to research life outside your own industry. Get to know the media, online and offline available to you. Get to know the internet on an intimate basis within your industry. Start-up guerrillas engage in a monthly half hour surf of the internet to catch the best that's online--in and out of their industry. The research you put in looking for media opportunities for your company will pay off every time.
Study the Latest Technology
That research should include researching the latest technology that might empower your business. The move in entrepreneurship is toward automation. Happily, automation is not expensive. Your company can give off the vibes of a huge, lavishly funded corporation with a constantly busy staff, when the truth is it's just little old you pushing the right button on your automated customer profitability center. Technology can help you in the areas of marketing, production, finances, distribution, and a whole lot more. Skip it if you don't need it, but don't miss it if it can contribute to your profitability. It probably can. More people earn money while they sleep than ever before.
We didn't explore a totally different kind of research, one that we applaud and respect. But assuming you aren't yet a wealthy and thriving company, we nudge you in the direction of free research, which has been outlined above. Later, when you've taken this advice and are a wealthy and thriving company, look into paid research, which takes over the entire research function, from asking the right questions to analyzing the answers. The right question can be the making of a company.
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