Up and Running Blog

June 2010

Photo by Balaji.B

Are You Making This Mistake in Your Business?

by Guest Author on June 30, 2010

I’m a big believer in systems.  I hate the idea of “reinventing the wheel” every time something needs to get done.  It’s a waste of time, money and resources – all of which are usually in short supply in small business.  Small business owners are great at systems when it comes to shipping it, fixing it, billing it, hiring or the day-to-day operation of the business.  Where they fall short is having a system for marketing their business.

Photo by Balaji.B

Photo by Balaji.B

For one reason or another, small business owners believe they can be successful without a marketing system.  Well, I’m here to tell you it won’t happen and here’s why.  A system keeps you focused and gets you results and a good marketing system generates qualified leads on a consistent basis.  Without a marketing system, business owners fall prey to the age old “promotion of the week” or promotional panic as we like to refer to it.  You know what I mean.  It’s the latest and greatest idea you saw at a recent tradeshow or that “thing” that a friend told you about over coffee that you just gotta try.

Why a marketing system?  A marketing system will help you turn suspects into prospects and prospects into clients and clients into raving fans.  People do business with people they know, like and trust and in today’s busy world, it takes more than 10 ‘touches’ to get someone to know like and trust you.  What are you doing to get people to know, like and trust you?  With a system in place, it can be working even when you’re not.

Back in university, I did Business 101 (seriously, that’s what it was called) and the first thing that we were taught was the four key functions of business (today there are five if you include information technology).  You have finance, operations, human resources and marketing.  All of them key to any business’ success.  Building a business with only three of the keys is like building a house on sand.  It’ll stand for a short while but eventually it is coming down.

So you decide!  Do you want your business built on sand or on a solid foundation?  If you chose a solid foundation, you might want to start building your marketing system because it’s probably the only one that you are missing.

ducttapemarketingbadge

Brenda Mahoney is a successful marketing coach with a passion for helping others succeed, personally and professionally. Working in the corporate world as well as being a business owner and marketing consultant for many years, Brenda has a strong track record for success. She’s worked with businesses in many different industries and loves what she does.
http://www.criticaledgemarketing.com/

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Riding Venture Capital Downward

by Tim Berry on June 30, 2010

It reminds me of the chorus to Bob Dylan’s Ballad of a Thin Man: Something is definitely happening here, but you don’t know what it is. And neither do I. But Scott Shane and all his data give us a pretty good idea. Scott has excellent in-depth data, complete with some eloquent business charts, in his “Trends in Venture Capital” post yesterday on Small Business Trends. He links in that post to this presentation, with even more data, from which I took this chart:

Venture Capital Trends

Thanks Scott, that’s very eloquent. What it shows is the total amount of investment money managed by venture capital firms, in billions of dollars, from 1982 through 2009. You can see in the chart how it shoots up during the dot.com boom, then levels and, more recently, falls to about half as much.

What’s going on is a combination of factors: the great recession, of course, but also a drought of VC companies going public, startups taking longer to reach exit, a lot of portfolios worth less now than they were three to four years ago, worries about changes in taxation, and a lot of new technologies giving startups ways to get themselves up and running with less money than it would have taken 10 years ago.

Credit Scott for drawing the chart, and the National Venture Capital Association for supplying the data.

And consider this: Decline in venture capital is not good news for startups. Of course. No way. But still, you in particular might be much better off without outside investment. Better no investment than an incompatible investor.  Hooray for bootstrapping.

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What’s an SBDC and Why You Want to Know

by Tim Berry on June 29, 2010

I posted about Good Clean Love last month; it’s a local (Eugene, Ore.) company that won our angel investment contest. And I’ve been meaning to post about the national SBDC program ever since. Good Clean Love is one of several good local companies that have been through our SBDC’s business management program.

SBDC MapDo you know where your local SBDC is? If you’re serious about starting a business, growing a business that already exists or managing your business better, and you’re in the United States, then you ought to know where the nearest SBDC is. That stands for Small Business Development Center. There are about 1,000 of them in the United States. And they offer one-on-one counseling, workshops and classes–a lot of good front-lines resources to help real people manage real businesses.

For a class on bookkeeping, marketing, business planning, getting financed, call your nearest SBDC. You’ll find it offers excellent counseling and training at amazingly low prices. Our local SBDC, for example, has 29 workshops on its website, most of them two-or-three-hour workshops in essentials such as basic bookkeeping, QuickBooks, Quicken, Getting an SBA Loan, etc., for $49-$99. That’s typical. It also has a two-year once-a-month weeknight comprehensive program.

And about 100 miles north of us, near Portland, Clackamas SBDC director Tim Shea offers his Small Business Greenhouse class, three hours on Tuesday nights from September to February, including books and software.  I’ve been a guest speaker at that one several times; it gets great reviews. 

For a lot of ask-the-expert e-mails I receive, I send people straight to their local SBDC. That’s for questions about starting up, establishing ownership, finding financing, dealing with permits and legal requirements, even online marketing and search engine optimization. Because the SBDCs are funded in part by federal, state and local educational institutions, they tend to be a great deal in consulting and training.

Of course, as with any educational institution, a lot will depend on the actual class, the specific teacher or counselor and the situation of the state SBDC. Some states have better SBDCs than others. Some are linked to state colleges and universities, and some to community colleges. Some have more flexibility than others. Still, although you want to check things out, you should assume the SBDC near you is a great resource until proved otherwise.

Disclosure: I’ve been working with SBDCs since 1995, as part of what I do at Palo Alto Software. I do at least one workshop for the annual SBDC conference every year, and we give a lot of software to SBDC offices to help them help the public. I like these people. I have friends in the Oregon offices, and friends from other states I see every year at the annual conference.

And an additional comment: The SBA entrepreneurship development efforts don’t get enough credit. Whether you like the SBA guaranteed loan program or not (which seems to me to depend mostly on your politics), SBA contribution to entrepreneurship at the frontlines level is significant. That’s about SBDCs, SCORE, Microenterprise Centers, Women Business Centers and SBA information offices, comprehensive statistics and research, and more.

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The three “real” rules of marketing success

by Marketing Masters on June 28, 2010

Clate Mask is CEO of one of the Inc 500’s fastest-growing companies, Infusionsoft.com. Ask him about how to build a successful business, and he’ll say, “There are three, and only three, factors that really have an iron grip on the profits of any marketing effort. The smartest marketing minds on the planet have boiled these factors down to this simple, but incredibly powerful, formula: The Right Message… To The Right Market… At The Right Time!”

The problem is, most businesses send out a message that’s only relevant to the company owner—that is, to people who are not in the market for their product or service, at a time when they are probably not interested in buying!

We often hear people say “I meant to get around to doing some marketing, but I just didn’t have time, so we just put something out there.” Or, worse, “I got a great deal on this program but I didn’t realize 90 percent of it went to people who don’t buy what I sell.”

Many small business owners spend money on “image” advertising, with no direct response offers included at all. There is no “next step” called for, and thus, no way to measure the effectiveness of the ad. Advertising just your brand is great if you’ve got a million-dollar budget like Nike or Coke, but it’s marketing suicide for the rest of us!

The objective of your marketing efforts is to generate leads—finding people you can follow-up with. When you convey the right message, to the right market, at the right time, you get leads. Social marketing tools in particular, can really help you do this inexpensively and effectively.

Here’s how: You want to attract people who are interested in what you’ve got to sell so you create a dozen powerful, benefit-filled headlines offering to provide free reports or “how-to” documents (or even a dozen different titles for the same document), e.g. “Free report—What you should know before hiring a contractor.” Or, “Get the facts: Learn how to work with a contractor before you renovate.” Offer them on Twitter.com and see which headline generates the most response. Expand the program by posting the same short message on your company’s Facebook.com “fan page” and your LinkedIn.com profile (you have these, right?). Use the same approach to learn what generates the most interest in a free webinar (that you could offer).

Create a series of three-minute videos introducing yourself and offering something—a free guide, a seminar etc. (this will take you about five minutes each using the camera on your computer and an on-line helper like JiveSystems.com). See which one gets the most response and build on that knowledge.

Marketing today is all about getting people to come to you . Stop just talking about your company, and start conversing with your customers and prospects. Offer them content they value—use some easy (and fun) tools and a little bit of learning how to test and track, you’ll soon see results.

ducttapemarketingbadgeKen Burgin and Elizabeth Walker are the Marketing Masters (www.MarketingMasters.ca), a full-service marketing and advertising partnership that helps build busy businesses. Send your ideas on How to Thrive in Times Like These to liz@marketingmasters.ca or ken@marketingmasters.ca, or call 1-866-908-5720.

web: http://www.marketing,masters.ca
blog: http://thebuzzwithkenandliz.blogspot.com/

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Why advertising doesn't work fortune marketing

Why Advertising Doesn't Work for (Most) Small Businesses

by Carolyn Higgins on June 24, 2010

Article by Carolyn Higgins

Pick up a newspaper, magazine or advertising circular and look at the ads. What do you see?  A whole bunch of the same thing: a list of services; a company name; a tagline; a pretty graphic; and maybe an offer.

Why advertising doesn't work fortune marketingMost businesses think of advertising in one of two ways: 1) Put your company name in front of enough people enough times so they’ll remember you when it’s time to buy. … or 2) Put an “amazing” offer out there and people will be compelled to respond (whether they’ve made the decision to buy or not).

The first scenario is called ”top of mind” advertising and unless you have a multi-million dollar marketing budget it’s very difficult to buy top of mind brand awareness. In the second example advertising sales people want their advertisers to see results (because results sell more advertising), so  they recommend you put an offer  in your ad:  Get 10% off service, $5.00 of a product, buy one get one free, etc.  And sure, that works - sometimes.

Let’s Analyze the “Compelling Offer” Approach:

Does putting an amazing offer in front of people influence them to buy even if they don’t have an immediate or compelling want or need? Does an amazing offer force someone to buy if they don’t have a budget? No, it doesn’t.  So your ad gets completely ignored and you don’t get any response. (Ok to be fair – best case scenario – someone may clip it, stick it to the fridge where it will hang for a month or two before it ends up in a drawer or in the trash).

How an Ad Gets Seen….or Not.

Consider this scenario:   I’m looking at an ad in the free local magazine that comes in the mail every month; it’s an ad for a $75 carpet, tile or grout cleaning.  Well, my tile and grout happen to be pretty clean- well clean enough for me right now. So I’m not interested in spending $75 to get it cleaned, even if it is a great deal. I ignore the ad and move on.

Now let’s think about this… I am a tile owner. At some point in my life I may need tile cleaning services. However, did I notice the name of the business offering the deal? NO. Do I know how they are different from every other steam cleaning company out there? NO. Has this ad given me a reason to remember them when I am ready to get my tile and grout clean? NO. Has this ad engaged me in any way? NO.

Old School Advertising Doesn’t Work!

And what’s the traditional reaction when advertising doesn’t work?    Ask any advertising rep and they’ll tell you - you need to advertise MORE (i.e.: spend MORE money), so that when your prospect is ready to buy  they will see or remember your ad and call you. But how much are you willing to spend to make a sale?

So let’s say you spend $175 / month on the ad and it takes me 6 months to decide I need to clean my tile. Let’s say I happen to choose you because I remembered seeing your ad in the magazine for the past six months and because your offer is better than the other guy who is doing it for $100. You’ve just paid $1050 to get my $75 sale. Sure, you may up-sell me, I may become a regular customer and my life time value may be in the thousands – but those are big “ifs”. Think about that:  you are spending hundreds – or even thousands – of dollars hoping to reach a prospect at exactly the right time in their buying process. Doesn’t that seem like a pretty large gamble to you? No wonder businesses think advertising doesn’t work!

A New Way to Advertise.

What if, instead of advertising with the hope of making your phone ring off the hook and breaking sales records immediately, you take a different approach! What if you try something Duct Tape Marketing calls the “2 Step Approach to Advertising”?   What if, instead of spending hundreds or thousands of dollars on print ads trying to find that needle in a haystack – that rare person who is ready to buy what you are offering the second they see your ad – you find potential prospects and get their permission to market to them on a more consistent basis and with more targeted offers while spending less money?

Here’s How 2 Step Advertising Works:

Create an ad offering a free report:  “5 Easy Things You Can do to Keep Your Tile and Grout Clean”. Or better yet, “How to Remove Tile and Grout Stains Yourself”. OK,  I know what you’re thinking… you’re thinking this is crazy and it’s going to cost you business –right?  Well, you’re wrong. It won’t cost you business; in fact this approach will accomplish three things. It will:

  1. Get people to your website where they can learn more about you.
  2. Attract people who actually own tile and who will give you permission to market to them on a regular basis.
  3. Prove that you care more about helping people than making a sale (prospects love that).

The goal of marketing is to get people who have a need to KNOW, LIKE AND TRUST you so when they are ready to buy, they buy from you. Offering helpful and useful information helps build your KNOW, LIKE and TRUST factors and yes, increases sales.

The goal of 2 Step Advertising is to get prospects to your site and get their permission to engage them by collecting their email addresses. Once you have their permission you can email surveys, newsletters, tips and offers geared specifically to their needs on a monthly or bi-monthly basis for about a penny an email.

Think about how powerful that is: You get to communicate with a prospect who has given you permission to market to them for one tiny penny! That’s HUGE!

Your New Advertising Strategy

How many more responses do you think you can get when you stop selling in your advertising and start offering helpful information? People hate to be sold. And that’s what traditional advertising is all about. What if you can get 10 new people on your email list from each ad? What if 1 of those people eventually buys from you at full price – or close to it? What is the cost of that one customer compared to the one you got by practicing traditional advertising?  I guarantee that if you implement this approach as part of your marketing strategy you will get results and begin to see your business grow.

ducttapemarketingbadge Carolyn Higgins is the President and founder of Fortune Marketing Company. Her personal mission is to help small businesses stop wasting money on advertising and promotions that don’t deliver and help you implement an effective marketing system that will bring you more customers – consistently.

For more information about Carolyn Higgins and Fortune Marketing Company please visit http://www.FortuneMarketingCompany.com.
Email chiggins@fortunemarketingcompany.com or call us at 707.718.4489.

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SCORE Member’s Inside Advice on Using SCORE

by Tim Berry on June 24, 2010

Are you in the U.S.? Are you aware of SCORE? The name stands for Service Corps of Retired Executives, a volunteer organization funded by the SBA that offers free counseling and related help to entrepreneurs and small businesses in the United States.

I’ve been one of those SCORE volunteers for about three years now. I notice blog and Twitter SCORE coverage here and there, so I decided this morning that it’s about time I share my “SCORE insider” view of how to use SCORE:

1. Great for starting, fixing or growing your business

SCORE counseling, when done right, can be the exception to all those clichés about free advice: Supposedly you get what you pay for. But in this case, you get experienced people at the tail end of their careers offering to help you with your business for free. Consider the chance to talk to an accountant, banker, or sales or marketing manager, free, about your business. Do you want to validate an idea or ask somebody questions you can’t afford to ask a practicing accountant or consultant, or that you’re afraid to ask your banker? Contact your local SCORE chapter. You can get local contact information at this SCORE location finder page. SCORE includes more than 12,000 volunteer counselors in more than 300 locations.

You don’t necessarily have to get your advice in person. SCORE volunteers offer answers to e-mail questions on the web. Click this link and you’ll see.

And you don’t have to get your advice one-on-one either. A lot of SCORE chapters offer workshops to help. My chapter in Eugene, Ore., does a quarterly workshop that puts a collection of experts (I do the business plan section, and colleagues do sections on basic legal, basic administration, hiring and firing, and marketing). We charge $49 for that, which is barely more than the SCORE costs. We get great reviews. I understand that a lot of the chapters have similar programs. And a lot of chapters have more information on their chapter websites. You can find out by using the SCORE location finder.

SCORE’s main offering is an older person with valuable business experience who can talk to you about your business, or free. These folks can really help you start a business, fix your business or grow your business– especially if you’re new, alone or struggling (you know who you are).

2. Look for advice, not actions, not results

SCORE counselors give advice. They listen and make suggestions. If they can recommend next steps to take, or additional resources, they do. They aren’t free labor, and while they often perform some of the same initial review and assessment services that professional business services (accountants, consultants, etc.) do, they’re going to give you what they can, for free. They’re not going to stick with you through think and thin. They’re best for opinions and suggestions, not actions or results.

By the way, please notice I said “they” and not “we” in this context. While I’ve been a SCORE member for three years, I’ve never done the one-on-one counseling. In my case, unlike the normal SCORE member, I’m not retired, so I don’t have time. I do the business planning section of the workshop every time, and I try to attend e-mails, and occasionally (no promises), I answer e-mails.

3. Shop around. Look for a good match.

One of the best things you want from anybody giving advice is knowing what you don’t know. With SCORE counselors, as with any other collection of successful businesspeople, backgrounds and experience vary. Don’t assume that every SCORE counselor knows everything related to your question, or that the counselor necessarily know what he or she doesn’t know. That “knowing everything” quality isn’t SCORE specific, by the way; it happens with lots of people. You just need to keep it in mind.

Right up front, as you get involved with SCORE counseling, help them help you by defining your needs well and looking for somebody whose experience matches. Ask direct questions: What experience do you have in this area, how does your expertise relate, and is there somebody else in the chapter whose experience and background are a better match?

Here’s an example: For years, long before and after my direct involvement with SCORE, in my business-plan-expert mode I’ve dealt with some people who’ve received really bad business plan advice from random SCORE counselors. Without having the luxury of knowing for sure, I assume what’s happened is that somebody who’s not had much experience related to business planning or entrepreneurship has been answering questions instead of saying he or she doesn’t know. One of these days I’ll post a rant about bankers and accountants and business plans, but that’s not part of this post. And the problem goes way beyond SCORE counselors.

For another example, consider SCORE counselors in light of websites, online marketing and SEO and social media. True, a lot of older people are very involved in social media and the latest and greatest technology. And a lot aren’t. It doesn’t hurt to ask.

4. When in doubt, get a second opinion. And then a third.

The danger here is people taking one SCORE counselor’s word as business gospel. If I’ve learned anything as an alleged business expert for several decades, it’s that expert opinion varies. There are people as qualified as I am in my area of expertise who advise exactly the opposite of what I do. They might be right, and I might be wrong. Think of this as a disclaimer: Results may vary at home. Contents may have shifted during flight.

Conclusion: Don’t settle for a single opinion about anything important, from SCORE or any other source. And that includes this post and my insider view of SCORE.

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For Good Info on Franchise Business

by Tim Berry on June 23, 2010

If you’re at all interested in buying into a franchise business, I think you’d definitely want to become familiar with Joel Libava, his Franchise King blog, and his new e-book called How to Carefully Select a Franchise to Buy.

I just read a good review by TJ McCue, founder of SalesRescueTeam.com, someone I’ve come  to know and like from a relationship that started on Twitter. That’s on Small Business Trends, one of the best small-business blogs. TJ does a good review and includes a good video summary from Joel.

I know and like Joel Libava and TJ McCue, both of them, and I respect their work. And regarding franchises, Joel is the king there; he really does know the territory.

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photo by Abhijit Tembhekar

Who has time for summer vacation anymore?

by Chelle Parmele on June 22, 2010

I watched a TED video the other day on teaching children the importance of Entrepreneurship. While I agreed with the idea of this, I wasn’t all that impressed with the speaker – sad to say.

photo by Abhijit Tembhekar

photo by Abhijit Tembhekar

But the subject got me thinking of all the opportunities we have as mentors and parents and community members to encourage and teach entrepreneurship to kids. The value of planning, budgeting, marketing – all valuable lessons for later in life.

It reminded me, actually, of an article I read a while back about lemonade stands:

Running a stand is “one of the most educational experiences a child can have,” he said.

And more and more kids are not just profiting from the experience, but also learning the importance of giving back by donating a portion – or all – of their proceeds to charity.

Make learning fun by coupling it with making money or creating a better sense of giving back and community plus sitting outside with friends? Genius!

Read the full article on CNN.Money.com

‘Chelle Parmele
Social Media Marketing Manager

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Is Venture Capital Broken?

by Tim Berry on June 22, 2010

Audrey Watters posted “Is Venture Capital Broken?” this weekend on ReadWriteWeb’s startup channel. The title is direct reference to an essay, titled “Venture Capital is Broken”, which angel investor Chris Sacca released as the “creed” of his new investment firm, Lowercase Capital.

Here’s Audrey’s excellent summary:

In it, Sacca observes that 10 years ago, it cost more than a million dollars for a tech business to launch, with steep hardware, software, office and internet costs, not to mention the “lavish parties so print media would write about their pipe dreams.”
Lowercase Capital’s Creed

But today, it is far easier and far less expensive for entrepreneurs to design, code and launch web services. But, Sacca writes, “many traditional VC funds have been loath to admit this reality and downsize their five hundred million dollar hauls. Why? They are paid fees based upon their total amount of money managed, thus there is no incentive for them to be smaller. Yet, as they try to inject those piles of money into early-stage companies, interests become misaligned and an inherent conflict between the investor and the founder often arises. Fund returns, the companies, the entrepreneurs and the users all suffer as a result.’”

This idea isn’t new. I wrote about it more than three years ago in “Cheaper and Easier” on my main blog. And it wasn’t my idea then; it was already out there. Here’s the description of a Web 2.0 session I attended in April of ’06:

The Dot Com Nuclear Winter is over, and funding for Web 2.0 startups has never been better. But traditional VCs are now being challenged by a variety of changes to the startup economy. Lower startup capital costs, alternate financing strategies by angels and entrepreneurs, and early takeouts by mergers and acquisitions–hungry platform companies like Yahoo!, Google and eBay have changed the way the game is being played by startups in the 21st century. So are later-stage VCs toast, or do they still have a relevant role in the startup economy? Who will be the new winners and losers on Sand Hill Road, and around the world?

To me that’s pretty much the same thing, just four years ago. Do you agree?

One interesting offshoot of that is, possibly, an apparent change in the focus of leading venture capital investment. I quote here from a press release of the National Venture Capital Association, from April of this year:

“Life sciences continues to be the No. 1 sector for VC investing, with biotechnology being the absolute single-industry leader in dollars invested over the past four quarters,” noted Tracy T. Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. “Venture capitalists continue to exhibit great confidence in the life sciences sector, as well as clean technology, as they outperformed all others in venture capital investing in the first quarter. VCs are upholding the belief that the prospects for liquidity are good in these areas, and we continue to see IPO filings for VC-backed companies in each of these sectors.”

Another possible effect is the similar change in entries to major MBA-level business plan competitions. This has less far-reaching impact, but it’s interesting to me. This is from one of my posts on this blog last month:

I’m seeing a trend emerging. Software and web applications, which is where my experience is, aren’t winning the competitions. Medical businesses won all three MBA venture competitions I was involved in this year, and finalists were mostly medical, natural, organic or clean energy. And a natural organic but basically low-tech product won our angel investment.

What do you think? Could these all be related facts?

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