Up and Running Blog

April 2010

Ask the Expert – Facebook style

by Chelle Parmele on April 30, 2010

Over on our Palo Alto Software Facebook page, Bernadette Njoku asked:

I’m looking for advice on what small businesses do/should do to build themselves financially over time, e.g., what are some recommendations on what to do if sales come in, should they reinvest into the business, what percentage, are there any ratios, are there recommendations, standard practices, or should we just wing it?

I showed the question to Tim Berry and this was his answer:

Bernadette,

Most of this is always on a case-by-case basis. There are a bunch of ratios that measure financial stability, most of them in the debt/equity category, but rules of thumb vary by industry.  And then there are the factors like your own sense of risk as an owner. I worked with one very famous entrepreneur who early-on in the company growth was constantly betting the whole company on a new product. He was a huge success, but eventually that high risk preference produced some big drops too. Although he’s worth billions right now.

The most reliable and conservative ratio is cash in the bank.

And then there’s the concept of a “good spend.” As a business owner, I’d rather spend on growing the company than on dividends or cash in the bank. I want the future, not just the present. So I always preferred a good spend to cash in the bank.

Lately a lot of investors talk about runway, as in how many months can you last at your current spending rate before you run out of money. That’s for startups that are spending in deficit, of course.

In the end, the best test is how it feels in your gut. Is this company “safe” or not? There are no general rules.

Tim

Thanks for the fantastic question, Bernadette!

‘Chelle Parmele
Social Media Marketing Manager

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photo from Banterist.com

Writing Web Content: The old rules of editing still apply

by Jay Snider on April 29, 2010

Is your website driving sales or is it driving potential customers away? Think about it — how you present yourself via your website is your customer’s first impression of you and your business. What you say and how you say it matters.

There are plenty of excellent resources available to guide you in writing compelling copy for your site. For instance, Copyblogger is a great source of tips, stories, and general information on Web copywriting and writing for search engine optimization (SEO).

typo3While researching copywriting courses, I came across another site that offered articles, books, and courses on writing Web copy. Much to my surprise (and amusement), the word “copywriting” contained a typo in it. In the headline. On the Home page!

If you are a software company or a travel agent, let’s say, a typo on your Home page might be embarrassing. A typo in the first headline a visitor sees… we’ll call that REALLY embarrassing.

But if you are selling products about writing Web content, your website should contain clean, well-edited copy. A typo in the first sentence shows sloppiness. Carelessness. A serious lack of attention to detail. When there are countless similar resources out there and I can find them with a simple mouse click, a misplaced letter in a headline is enough for me to look elsewhere for a writing class.

The “expert” in question thanked me for pointing out his mistake when I emailed him, though he dismissed my comment that he might be losing customers by being careless. His reply was essentially, “would you stop reading a book because you found a typo in it?” And my reply was, “if I hadn’t bought it yet, and the typo was on the first page, and it was a book about writing? You bet I’d stop reading it!”

Now, I’m a writer and editor. So admittedly my tolerance for typos is probably lower than the average person’s. But just because it’s fast and easy to fix typos and mistakes online, compared to those in a book or magazine or newspaper (where the best you can do is issue a correction after the fact), doesn’t mean that you don’t need to proofread, edit, and review your content for mistakes, misspellings, and typos.

It might seem old school, but it’s also common sense. And it applies to any website, regardless of what you’re selling. With so many online options available to them, you need to make sure you’re not making it easy for your customers to dismiss you.

image by Dainis Graveris, 1st Web Designer.com

-Jay Snider
Palo Alto Software

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Small Business Marketing Boot Camp

by Chelle Parmele on April 27, 2010

Attention people in and around the Bellevue, WA area.

Are you frustrated with the results of your marketing system? Not enough leads, sales, and revenue for your business?

You’re not alone, but you can get an edge. Here’s how…

On April 29th, John Jantsch with Duct Tape Marketing is coming to town to deliver a three (3) hour half day workshop titled “Small Business Marketing Boot Camp”.

Here’s the link for more information and to secure your seat at the event:  http://www.dtmwashington.com/mba

For three (3) hours John will cover:

  • The 7 Secrets to Marketing Success
  • Harnessing the Internet
  • Building a Social Media Marketing System
  • “New” marketing secrets John hasn’t released
  • …and much more

Still not sure? Here’s what FORBES Magazine says about John: “Clever marketing ideas galore and lots of contrarian ideas on what works and what doesn’t.”

We look forward to seeing you at the event. You won’t want to miss this one.

p.s. Matt Murren and the great folks at Marketfin.com have offered readers of the Business in General blog and bplans.com a very limited number of seats for this event.  When you register, put in this special discount code: PALOALTO


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There's no Success Like Failure

by Tim Berry on April 27, 2010

A line from Bob Dylan’s Love Minus Zero–No Limit:

She knows there’s no success like failure, and failure’s no success at all.

Once upon a time at a venture competition, the evening before the event, there was a judges’ meeting in which we all introduced ourselves to each other. You can guess most of our summaries: founder of this, investor in that, and so on.

One of us, however, said something like the following:

My real qualification for judging a business plan competition is I’ve recently taken my own company through bankruptcy, having run it into the ground by spending too much and selling too little for too long.

I’m paraphrasing, because this was years ago. But he made a good point. And all of the other judges, me included, accepted his reasoning. And he did an excellent job with the judging.

Food for thought from me, that judge (who shall remain nameless in this post), and Bob Dylan.

(Image: Granite/Shutterstock)

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Marketing Review Process

The Marketing Plan Review Process – Your Key to Marketing Success

by Bill Brelsford on April 26, 2010

For most professional service firms creating a marketing system is not a onetime project with a definite begin and end period. Rather, it is an iterative process, where we work on adding a new component to the system, improve an existing piece, and perhaps remove a component that is not performing.

This need for an iterative process is driven by several factors including the complexity of creating a system, the need to change and adapt, and the reality that more often than not, the marketing function is being performed by someone for whom marketing is just one of the many hats they wear.

In my opinion, one of the essential keys to success in managing an iterative process is to have a well defined review process in place. Whether you are solely responsible for marketing, or work as part of a team, a strong review process will help you stay on track with your big picture goals while you wrestle with the challenges of implementing tactics on a day to day basis.

I am not a big fan of long, drawn out review sessions, so I have to tactics that I like to use to keep marketing review sessions useful and efficient. The first is to hold review sessions on a fairly frequent basis. If you are just getting started, I would recommend doing them monthly. Quarterly is better than not doing them at all, but I find quarterly meetings tend to run long and wander a bit.

The second tactic I use is to follow a four step process in these sessions. I find that the combination of following the same process and doing it on a regular basis makes for a efficient and effective marketing review process. Here is an outline of the process I like to follow:

Review

During the first phase I like to review the assumptions and strategy that make up our plan as well as any lessons learned.

Assumptions – all plans are based on assumptions using the best information available at the the time. One of the first steps in your review process should be to review those assumptions and determine if they are still useful for your planning purposes.Marketing Review Process

Strategy – I find it is helpful to restate our marketing strategy at the beginning of the review meeting as it helps us keep the big picture of what we want to accomplish in mind.

Lessons Learned – what did we learn since the last meeting. This could be anything from mistakes made, news about competitors, feedback from customers, etc.

Update

In this phase we want to make changes to our marketing materials, milestones, budgets, metrics, and our marketing calendar.

Plan

During the plan phase, we get ready for the next iteration. We create and assign milestones, identify resource needs, map out timelines, etc.

Implement

Now it’s time to “do marketing” again. During this phase we continue executing our regular tactics and work on implementing the ones outlined during the plan phase.

Consistence use of a review process is essential to the creation of a successful marketing system. If it is not on your calendar already, schedule a marketing plan review session today.

ducttapemarketingbadgeBill Brelsford is the owner of Rebar Business Builders. As an Authorized Duct Tape Marketing Coach, Bill works with professional service firms and independent professionals who want to spend less time chasing business and more time serving profitable customers.
phone: 913.962.9261
email: bill@rebarbusinessbuilders.com
web: http://www.RebarBusinessBuilders.com
blog: http://blog.rebarbusinessbuilders.com

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A Good List of Business Plan Competitions

by Tim Berry on April 26, 2010


I got an e-mail over the weekend asking me for a list of business plan competitions. That makes sense; I’ve been posting a lot about them lately, and participating in them.  See recent posts: for example, business plan competitions grow up last week; and my business plan marathon series on my main blog. So, as a service to all, here’s a link to Biz Plan Competitions, a website focusing on exactly that: listing and cataloging business plan competitions.

bizplancompetitions.com

I say hats off to the people at JFH Innovative LLC in Pittsford, N.Y., who are running that site. It’s hard to keep up with all the competitions these days because new ones are popping up all the time.

The second best list I know of is the one at the Palo Alto Software software (my company) website. We list academic business plan competitions, including more than a dozen of them that we contribute to as sponsors.

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A Sweet True Story About A Real Business

by Tim Berry on April 23, 2010


Last night I was treated to one of those great true stories about a real business that reminds me of the way some of the best possible businesses start and grow: organically, based on values, people doing something they like to do. This one is Luna and Larry’s Coconut Bliss.

It’s a simple story. In 2004 Larry Kaplowitz and Luna Marcus spent $1.50 on a used ice cream maker and started making ice cream from coconut milk. First they shared with friends. Coconut Bliss Story 1That led to neighborhood parties, and then supplying the shelves of a couple of neighborhood stores. People liked the product, word spread, and they expanded production to a small, licensed trailer. More people wanted it, and more stores wanted it, so they raised $75,000 from friends and family to move into a rented building with a better kitchen.

Demand continued to grow. To increase production again, they partnered with a local dairy. They visited coconut farms in Thailand to develop a relationship with the important supplier. They turned down offers to sell the growing company outright. Coconut Bliss Story 2They stuck to their values. Sales grew to more than $1 million annually. Instead of selling the business to competitors or an out-of-state larger company, as demand continued to grow and the needs of the business became a lot more about business than coconut ice cream, they recently locked in the partnership with the local dairy. That’s because, Larry said last night, it’s local and the people and values matched completely.

You can get the story in pictures, comic-book style, if you want: Click on the preview panels here to get the larger, readable version. Larry told this story last night to a full house at our Eugene, Oregon, startups group (smartups.org). He’s now an angel investor, a member of our local Willamette Angel Conference, and both he and Luna are happily still very involved with the Coconut Bliss line of the merged company, but are no longer in charge of the day-to-day business.

Two side notes I found interesting:

Somebody asked Larry if there were ever those dark days that entrepreneurs suffer through as the company grew. He answered, with a quick broad smile, “just about every day from one and a half years in through four years.” The group laughed. He explained: “We always thought we were in over our heads; that we needed more business knowledge and experience.”

My thought, at the time: not when you’re making something a lot of people want.

At another point, he shared that a lot of knowledgeable people told them their idea wouldn’t work because coconut ice cream costs a lot more than regular ice cream. Whether that worried them or not, Luna and Larry charged what they had to in order to cover costs. And people were happy to pay more.

My thought, at the time: Having the highest price and the highest value is often a good strategy. Make sure the values match. It’s hard to grow a small business based on a low price.

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Innovation as a Marketing Challenge

by sara on April 22, 2010

What do the Walkman, online banking, and the rock band DEVO have in common?

Stereobelt to iPod

A true innovation needs creative marketing to explain what it is, what benefits it offers, and why in the world anyone would want it. Learn about the unique set of tools available for marketing innovative products, from using analogies, to targeting early adopters, to pursuing partnerships with other innovators.

Read the full post on Mplans: 4 Lessons from Innovators

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5-Step Business Planning for the Rest of Us

by Tim Berry on April 21, 2010


Gulp. Business planning for the rest of us, in less than four minutes? It was fun to do, great exposure and, what the heck, I at least tried to keep it short. For the rest of us, in this case, means all of those businesses that aren’t entering a business plan competition, don’t need to show a document to an investor or aren’t supporting a commercial lending application.

I’m not able to embed the video here, but you can click on it to go to the source video on the American Express OPEN Forum. This is from the MSNBC Your Business show last month, in an interview with Jean Chatzky.

You can see my five points on the image above, and here’s a quick summary as well:

1. Keep it simple

Don’t sweat the printed output, the writing and editing, so you can focus on keeping a live plan available to you and your team members on a computer or network. Do the main numbers. Use bullet points for big concepts, and lists for milestones and such.  Do the plan, but not necessarily the big, formal document.

2. Strategy is focus

A lot of great strategy is figuring out what you’re not doing. You can’t please everybody. Focus on those key elements that drive your business, and make sure you do those well. It doesn’t take a lot of writing. Use bullet points and pictures. Focus your target market and business offering.

3. Set the steps

Planning will help you keep long-term objectives in mind while you deal with the immediate problems. Figure out where you want to go and think about concrete, specific steps in the right direction. Don’t obsess on details. Set the main steps down so you can track your progress. Think about the metrics.

4. Set a review schedule

I mean like the third Thursday of the month, over lunch. Fix a time for reviewing the plan. The real value of planning isn’t just doing the plan, it’s using it to manage results and do the course corrections you need. Just like with diet and exercise, we need reminders. We’re only human. And business planning is about regular reviews. Plans are supposed to change.

5. List your assumptions

This one helps with the problem of when do you change the plan to match reality. If you keep changing it all the time, it’s less useful. On the other hand, one good reason to change a plan is because the underlying assumptions have changed. So you list your assumptions. Start your planning review by looking at how assumptions have changed.

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Tim Berry Talks Business Planning

by Chelle Parmele on April 20, 2010

Tim Berry, President of Palo Alto Software and resident business planning expert, has been talking a lot about business planning lately. I’m going to chalk this up to his being involved in judging multiple business plan competitions in the last several weeks. So it’s more than likely been on his mind.

I thought I’d share a few of the articles Tim has written on the subject in the last couple of days.

On Entrepreneur.com

Is Your Business Plan On Track?
Tips to help track and tweak your business plan beyond the startup phase

On his own blog, Planning Startups Stories

Big Mistake: Huge Unbelievable Sales Numbers

And finally, over on his Entrepreneur.com blog Up and Running

On Winning Rice’s $1Million Business Plan Contest where he discusses the recent winning team at the Rice Business Planning Competition and what it took to win.

Enjoy!

‘Chelle Parmele
Social Media Marketing Manager, Palo Alto Software

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