The Palo Alto Software team is at the National Restaurant Association Conference this week and Bplans is featuring articles and resources for restaurant owners.

(Tim’s note: this is an excerpt from The Plan As You Go Business Plan, posted here with permission of Entrepreneur Press, the publisher. It’s here today because we are focusing on the restaurant business this week in honor of the National Restaurant Association trade show in Chicago)

Remember, there is no single way to forecast any business. It’s often very creative.

Magda was looking at forecasting sales for a small restaurant. She hadn’t locked in the location at that point, but she had a pretty good idea of the small size she wanted. She decided she would be able to seat six tables of four people each as a starting point. She knew that things might change when she actually decided on the space to rent, but she had to start somewhere, so six tables of four it was.

Then she did some simple math: six tables of four meant at capacity she would be serving 24 meals. Meals take about an hour at lunch, and about two hours at dinner. She figured she’d have one serving of lunch and two of dinner, roughly calculating the 5 to 5:30 crowd as the first serving, and the 7:30 to 8:00 crowd as the second serving. So an absolutely full lunch service in a day would be 24 lunches. An absolutely full dinner service in a day would be 48 dinners.

She decided that an average lunch would be $10 of food and $2 of beverages. And that an average dinner would be $20 of food and $4 of beverages.

Now let’s stop for a second to consider this. Magda isn’t turning to some magic information source to find out what her sales will be. She isn’t using quadratic equations and she doesn’t need an advanced degree in calculus. She does need to have some sense of what to realistically expect. Ideally she’s worked in a restaurant or knows somebody who has, so she has some reasonable information to draw on.

So, Magda can do a simple calculation to figure a good day’s sales, when she is running at full capacity:

1. Lunches are 24 x 10 + 24 x 2, which equals $288.
2. Dinners are 48 x 20 + 48 x 4, which equals $1,152.

These next two images are kind of small, so if you want, you can click on either one for a larger view…

Having figured out what sales might be in a maximum day, Magda looks at how sales might vary for the days of the week. That provides a weekly base line. It isn’t just four weeks per month; multiply an average week times 52, then divide that product by 12 to get an average month. In the example, you can see how Magda estimated conservatively, with fewer dinners on Monday, and closing at lunch on Saturday and Sunday. She knows she’s not going to get a full capacity day that often. So she’s calculated a baseline month, with around 370 lunches and 1,044 dinners. But she’s also just starting up, so she comes up with an educated guess for a lot lower than that, around half the capacity.

These numbers are not magic. The point of this example is simply that Magda has to find a way to make sense of her forecast. As you work with yours, don’t look for some answer out there in the world, like a right answer to a puzzle; look for ways to break your assumptions down into the logic you need to work with them.

Magda should get on a computer and put her forecast in a spreadsheet. Make it four rows labeled Lunches, Lunch Beverages, Dinners, and Dinner Beverages. She should also add a row for Other, because there are always miscellaneous sales. Then she can spread these assumptions out with the simple math so she can see them on a month-by-month basis. (See the example below.)

If you don’t know how to work a spreadsheet, using formulas for rows and columns, read Spreadsheet Basics. Don’t fear the math, or the financing.

By the way, you can represent your forecast graphically, with the right tools. You might draw the line to help yourself visualize the way the numbers flow. Here’s an example of how a simple line graph can forecast Magda’s lunch sales for the first year.

Remember, please, these are not scientific numbers. They are based on assumptions. Magdo will review these numbers every month and tune them against reality. So therefore she doesn’t have to guess right for long stretches into the future; she just has to start with a reasonable guess and then start tracking.

Furthermore, you don’t have to be right from the beginning because as your business goes on, you constantly improve your forecast. After the first month, as you look at the second month and all the rest of the forecast, you have the results from the first month to work with. Always review, and revise as the review indicates.

Let’s say that when Magda’s first-month results are in, lunch sales are much lower than she thought, but dinner sales are slightly higher. (See the figure below.)

This next illustration shows the difference between what was planned and what happened.

Using these numbers, Magda revises her sales forecast for the rest of the year. Why wait? She had a logical first guess based on some simple numbers, but now she already has real-world results. See the next illustration.

And now her sales forecast is up and running. Plan as you go.

Today’s post is from John Wechsler, President of FormSpring. The company, which recently partnered with Email Center Pro, focuses on data collection and management through the use of Web-based forms. As a service, FormSpring ties together improved customer relationships with business success. Sounds very much like the Email Center Pro approach.

“What lies behind us, and what lies before us are tiny matters compared to what lies within us.”  This romantic view of the world espoused by Ralph Waldo Emerson can be adapted to business to help us stop looking at past and future customers and focus some love and attention on our existing customers.  It is, for most of us, much less costly to keep an existing customer than to acquire a new one.

Increasingly, an enterprise’s long-term viability will hinge on the strength of its relationships with its customers. So where do we start when it comes to getting closer to our customers?  Tim Berry, president of Palo Alto Software, suggests that “unless you are a new business without a customer base at all, your market research should begin with learning as much as possible about your present customers.” Berry goes on to advise that businesses learn the following about their customers:

•    Who are they?
•    How did they find you?
•    What do they like about you?
•    What don’t they like?

Oftentimes a simple online survey is effective in letting customers know you care about them while also helping you learn a few things about your customers that will help you better serve them.

Traditionally one of the biggest challenges of getting so close to your customers has been purely logistical. This included: developing and designing a survey, printing and mailing it and compiling and analyzing the results. Any one of these tasks was difficult to manage “back in the day.”

Today the management barriers are largely removed. Online tools make it easier than ever to collect and manage data online.  There are no excuses for not understanding who your customers are, what they like and dislike, and what they think about your company.

When you’ve made the decision to start getting closer to your customers by using online surveys, it’s important to remember a few rules of the road.

K.I.S.S. (Keep It Super Simple)

When designing an online survey you want to keep it simple. Keep questions clear and answer choices easy to understand.  Spend time thinking about the flow of your survey. Do the questions progress in a logical and thoughtful manner? Once you think you’ve nailed it, take the survey yourself from the beginning.  You’ll probably see a few more things you can improve.

Make it easy for your customers to use

Make the exchange of information easy.  Keep required fields to a minimum so it’s easy for people to participate.  Be careful not to use unnecessary CAPTCHA (a challenge-response test used in computing to ensure that the response is not generated by a computer). The easier it is for someone to actually submit their information, the more you will learn and the better your customers will feel about interacting with you.

Make sure your forms are secure

Lock down information that you collect that is of a sensitive nature or could harm your customers if compromised. Use SSL for a secure browser connection (the URL will start with https://). Also, encrypt data stored in the database. Since your forms provider or IT department won’t be able to retrieve your data, don’t forget your password.  Finally, Pretty Good Privacy (PGP) is a way to encrypt emails to ensure that only the intended recipient(s) see emails that are meant to be secure. Make sure to use PGP for email privacy if you are receiving notification emails of the submitted data.  It does not help you or your customers to make a secure connection online and encrypt data if you then send emails without the protection of encryption. Alternatively, don’t send the actual data via email, instead just send notices that a submission has been received and use the security of an SSL connection to log in and view or download your data.

In Summary

Making your contact forms, surveys and other online forms simple for the user to complete, easy to access and use, and secure are three steps towards building strong relationships with your customers. It’s best to take the initiative now to ask your customers what they think than to wait for your competitors to do it!  With this knowledge, you will be on your way to creating an environment that helps you achieve the maximum lifetime value of your customers.

John Wechsler is president of Indianapolis-based FormSpring. With nearly 20 years of business experience including extensive startup experience, John is uniquely qualified to comment on many aspects of running startup, early-stage and high-growth organizations. John can be reached via email at john@formspring.com.

Today we are continuing our popular series, Back to the Fundamentals of business planning, by highlighting our Bplans.com Starting Costs Estimator Calculator, which is one of our FREE tools, available to help you write your business plan.

Getting a handle on what it will cost you to get your business started and running is about as fundamental as you can get.

Here’s a short article explaining how to use this tool, right now, real time, to better plan and manage your business.

In the first two parts we talked about keywords and your advertising copy for a successful Pay-Per-Click (PPC) campaign.  The final piece is all about your landing pages.

Here at Palo Alto Software, we use custom landing pages often – I am actually in the middle of a big project to create about 20-30 landing pages. For example: when a potential customer searches for “business plan”, they will see different text and a different landing page than the customer who typed in “Business Plan Pro Premier”.  Each of these customers are at a very different buying stage and deserve copy and pages that speak directly to them – and their willingness to purchase.

As with the keywords to advertising text connection, the advertising text and landing pages must also be consistent. If the user saw an ad for Green Widgets and the landing page was information about widgets in general, the user wouldn’t have a great experience. If the user saw an ad for Green Widgets and the landing page showed a Green Widget and talked about Green Widgets, the customer had a great experience and got the information they were seeking.

If your keywords, ad copy and landing pages do not mimic each other, undesirable high bounce rates are sure to come your way!

Bonus Tip: Use Website Optimizer. Users respond to changes on your website. Some changes could be good, others could negatively affect your conversion rate. By utilizing Website Optimizer, you can test many variations of your website (such as changing the wording of the headline, placement of images, etc.) or you can test several completely different designs. You will be amazed at what changes affect customer behavior.

Although many companies have an online presence and are involved in Pay-Per-Click advertising, few get it right. By getting back to the basics (keywords, advertising text, and landing pages) you are sure to be competing well in your space.

I hope you’ve enjoyed this series and have taken something away from it.

Nicole Poole
Online Marketing Manager
Palo Alto Software

In my last post we talked about keywords for a PPC campaign. This time we’re going to talk about Advertising copy.

Your first step was to review keywords. Your second step is to review and create advertising copy.

Does your ad copy correlate to the keywords the user typed in? It should. Does your advertising copy repeat the keyword? It should. Your potential customer will have a better user experience on your site if your advertising copy mimics the search term they typed in. If you were searching for a product or service online, which types of advertising copy do you click on? The ones that might have something to do with what you are looking for or the ones that obviously say they have what you are looking for?

Advertising copy is hard to create. With only 70 characters, how do you get your potential customers to click on your ad instead of your competitors’ ad? Testing ad copy (see bonus tip below) and trying different messages to see which one works best for your goals is the way to go. To get started, look at your landing page and pull text from there. The landing page’s headline could be used, or perhaps one of your product’s listed features will fit in the 70 characters allowed. Not only will the landing page give you some ideas, but by using the same content in both the advertising text and the landing page, the customer experience is better (and so is your quality score!).

Bonus Tip: Include at least two different advertising texts in each ad group. You can see click-through rate (the ratio of impressions to clicks – one of the factors in your quality score) and potential conversion rate for each different ad, allowing you to find the wording that best suits your objectives.

Nicole Poole
Online Marketing Manager
Palo Alto Software

With the plethora of instant text communciations it is easy for us to become sloppy in our spelling, and when using texting, reducing words to rebuses and abbreviations is near-mandatory.

Still, when you are involved in any form of business writing, especially where you have an outside audience, an audience that has some control over your future, correct spelling, and edit reviews are critical.

One of today’s contributions to Global Entrepereneurship Week is our “Back to the Fundamentals” article Spelling and editing are fundamental business planning activities.

There are so many details to managing a good Pay-Per-Click (PPC) campaign that many people outsource the task to those who know the systems very well. Others try to manage their website’s keyword lists, advertising copy and landing page on their own – Some do it well, others do not.

It’s important to go back to the basics of a PPC campaign (keywords, advertising text and landing pages). Google is constantly changing the aspects of how advertisements are ranked for certain keywords (it’s not just about the bid), that having the core fundamentals in place is important and needs constant review.

I’m going to be presenting this subject in three parts, starting with keywords:

Your keywords are how people find your website, your products and your services. The terms that potential customers type in when searching can be everything from your website name to a very obscure misspelling of your top product.

Doing research on which terms people are using to find you is critical. You want to be in front of those potential customers. Google AdWords has a good keyword tool that lets you enter a term, such as one of your product names, and it will give you the average search volume for the past month as well as other related search terms. This tool is one of many that give you the power to find out what your potential customers are typing into the search engines to find your business.

For those who already have a keyword list, it is still beneficial to get back to the basics and see what others are searching for. Trends change, language changes and seasons change. Many different external factors could have an impact on user behavior.

Once you have finished researching your terms or refining your keyword list, review your list of terms. Ensure that these are the terms you still want to bid on. Perhaps your business goals have changed and you no longer want to promote Red Widgets because you have found that Blue and Green Widgets are what potential customers really want.

Change is good – as long as it follows a plan.

Bonus Tip: Use the Search Query Report. Among the reports in Google AdWords is a search query report that aggregates the actual searches that people used to find your ad and site. This is a great place to get additional keywords (straight from the user!) and also to find negative keywords. Negative keywords are important to help qualify your customer before they see your ad (and before you get the impressions and clicks that you know will not convert).

Nicole Poole
Online Marketing Manager
Palo Alto Software