Five Steps to a Rock Solid Business Foundation for Solo Entrepreneurs

“An accurate plan poorly implemented is more successful and effective than a vague or generic plan implemented with brilliant precision.” – Author unknown.

Just about everyone in the business world agrees that planning is important and has some value. Before you can decide on an approach to planning, however, it’s important to think about who is asking you for your plan and what purpose it will serve.

For example:

If a loan officer at the bank asks to see your plan, he is primarily interested in reviewing your financial projections to make sure you can repay your debt.

If a venture capitalist asks to see your plan, she is primarily interested in discerning the return on her investment in your business idea.

If an employee asks you about your plan, he is seeking clear direction so he can successfully contribute on the job and earn his salary.

As a solo entrepreneur, you are looking to focus your efforts on ensuring the success of your business and optimizing the use of your time. We want to focus on doing the 20% that makes 80% of the difference.

A common mistake people make in business is that they take action without getting clear and accurate direction on a few key things before they start. To solve this problem, I suggest that people start with a written Situation Analysis.

The Situation Analysis is simple to do if you break it down into sequential steps. Writing clarifies the logic. If you try to do it all in your head, think about it all at once, or attack the steps in the wrong sequence, the clarity and accuracy you seek with the exercise is much more difficult to achieve.

5 Steps to a Clear and Accurate Business Foundation

Clarity is determining who your customers really are and if they really need your services.

Accuracy is not misleading yourself with opinions and interpretations, but rather dealing with the facts related to the opportunity.

There are multiple aspects of your situation to consider, but the five primary considerations are your customer, your offer, your business development strategy, pricing and industry trends.

1. Your Customer

Have you clearly identified your customer?

What are the customer’s needs, wants, and desires?

Are you clear about the problems you can help them solve?

How many people have these problems (i.e., what’s the size of the market)?

What things does the customer want to accomplish?

Who is the decision maker within the customer’s organization?

Who are the key decision influencers?

What is the decision-making process the customer will use to say “yes” or “no” to your offer?

Use data and facts throughout your analysis whenever possible, not speculation or hope-fors. The information you need can often be obtained with conversations with potential customers and market surveys. You will want to ask: “How often do you have this problem? How important is it to you to solve this problem? How would you personally benefit if the problem were solved?” Some of the core benefits to the customer may include achieving their goals, increasing revenue, increasing productivity, saving time, and increasing security.

2. Your Offer

After you have clarity about the customer, the next step is to be clear about the programs, services, and products you will offer. If you are clear about the customer’s problems, it will be easier to get clear about what you will need to offer to satisfy those problems. Put your offers in ranked order of opportunity and focus your efforts in the highest leverage areas.

3. Your Business Development Strategy

My experience is that solo entrepreneurs tend to waste a lot of time working on their marketing materials prematurely. An effective business development strategy is best developed after you’re clear about your customers and the problems you will solve. What are the materials and tactics needed to effectively communicate your offering to potential customers? Possibilities include an executive summary, sales sheet, business cards, face-to-face networking, public speaking, and perhaps an active blog and social media presence.

4. Pricing

What value are you bringing to solving the problem for your customer? What does the competition charge for a similar offering? An effective pricing strategy will take both of these factors into consideration.

5. Industry trends

My observation is that the trends in the industry, if not monitored correctly, can act like a brick through the front window. What are the trends in your industry and that of your customer? Are you able to step into a trend that is going to create an opportunity or are you stepping into a trend of a diminishing market? Examples of industry trends include innovation, government intervention, and the economic climate.

Learn more about performing your own Situation Analysis on my sister website, Stepping Through the Gate by downloading my 4 step planning process.

Now it’s your turn.

Are you being crystal clear about a specific customer you are targeting and the set of problems you are trying to solve or are you trying to be all things to all people?

Are you clear about the problems you solve or the conditions you eliminate with your services, programs, and products?

When you can answer “yes” to these 2 questions, your life will be easier and your efforts to develop your new business will be more productive.

Building Your Business Foundations – The Key Components Explained

So where do I start?

If you are new to internet marketing the whole process can seem a little overwhelming; however following a few simple rules will ensure that you get your business off to a flying start and enable you to feel more confident with your new business venture.

The basis of starting on your foundations is essentially to clarify what you need to achieve with your business; how are you going to set these foundations up? And an element you need to consider is how long will the process take?

There are many areas within your foundations that you need to look at; start by making a list of what you need as far as your business is concerned and work from there. Communication is essential for your business and it takes many forms. E Mail is an obvious one to look at first; you need to make sure that your e mail provider allows you to receive e mails into your in box. The last thing you need is for all your essential mail to be dropped into your spam box; you could miss out on information that is important to the running of your business. A lot of the top providers will offer free accounts and it is down to personal preference as to which one you choose.

You need to look at the financial aspect of your business; how are payments going to be made and how are these going to be set up within your business structure.

A working business bank account should be looked into as quickly as possible; this usually takes time to set up and as your payment processor will need the information in order to make payments into your account this is your first point of call. again it is personal preference as to which bank you use. Look for the best deals around that will save you money and give you the best benefits available.

Payment processors are an essential part of you business structure; this is what you will use so that your customers can make payments for the products and services that you offer. This will be linked up with your bank account; again make this a priority in setting up as these elements can take time to process.

Auto responders form the basis of your communication with your customer base; it allows you the freedom to communicate with a large audience and keep them up to date with all aspects of your business. This will be an essential part of your foundations; something that you need to spend time looking into to get the best for your business.

Domains; sounds obvious given that you are working on the internet, however this does take time to get right. Choosing the right domain name is important so that it will meet the criteria for your business and that the idea of your business name is available to you. Finding the right domain is part of the finer detail that you need to achieve; essentially a window into your business. Focus upon the elements that you wish to promote and work from there, opt for a good service provider that will meet all the needs you require. This can be in to form of a provider who will host your domain as well as providing other services such as auto responder integration, web design as well as training and support.

Although there are many areas to take into consideration when setting up your business you should treat all that you set out to achieve as a great learning curve; trust your abilities and do your research. There are many people out there who will give you all the advice that you need. Sometimes you just need to ask.

Laying Your Business Foundation: Where to Find Customers? – Part 5

This is a short and precise series filled with suggestions about Where to Find Customers? Again, if you have not read the previous articles I encourage you to build on the previous lessons of this series before reading the current issue.

You’ve asked yourself hundreds of times, where are the customers? Entrepreneurs and business owners alike has posed this one particular question more times than any other question. My response to that is, they are everywhere and the primary reason you haven’t noticed is because you are not actively looking for them. Case and point, how many people did you pass today? Start with this number then add the previous weeks so on and so forth for the past month. If you’re honest I would guess hundreds maybe thousands of people who probably need your service or product but you did not bother to share what you have to offer.

Locating customers is much easier than you think. Let me expound further. Most entrepreneurs and business owners or a staff member will frequently visit the post office, office supply stores, courthouses and other businesses where people are gathered. On average you will personally come in contact with a minimum of 15 people per day times 365 days per year equals 5,475 potential customers. Now multiple 5,475 x 2% = 110 customers. Notice I said customers because 2% is your conversion rate. Not only will you meet customers personally but via the internet, telephone and referrals are potential customers too. Factor these prospects with the others and watch how easily your pipeline fills up.

For illustration purposes, multiply 110 (which is the number of customers) X $25 (your average sale price) = $2,750 (the amount added to your bottom line). See all the money what you’ve been passing.

Let’s Begin…

Have in mind who is your ideal customer. In essence, know your targeted audience. Your ideal customer may or may not be the person you encounter on a daily basis but they may know someone who is your ideal customer; therefore, always treat everyone with genuine courtesy and respect. People will remember how you made them feel longer than what you said to them.

Make it your mission to expect five new customers per day than increase this amount to whatever number of customers you want in your pipeline. Remember, without customers your business will definitely derail and you will be responsible for getting everything back on course. Avoid this at all cost, the reason being it is time-consuming to convince your regular customers to come back without jeopardizing your relationship with them. Winning back regular customers will cost you more because they will expect something greater than what you originally offered.

So the next time you are at the grocery store, shopping mall, movie theater, doctors office, parking lot, restaurant, sporting event, music festival or any place where people gather, have a business card or pamphlet about your business to leave with your next customer.

Word of Caution. Never leave any of your business materials with other businesses without their permission. By doing so you are showing them respect which they will remember your professionalism and probably send you several referrals.

This is enough information to point you in the right direct to finding customers.

Until Next Time! Stay tuned to “Laying Your Business Foundation.”

The topic of discussion for the next article of “Laying Your Business Foundation – Part 6: Marketing Your Services or Products.

Building a Solid Business Foundation for Financing

The single most important thing a business owner can do for their business is to build their business to sell it.

Sell it you ask?

Yes. Build to Sell.

Every decision a business owner makes should be based on that thought. If an entrepreneur can base their business decisions with that underlying idea (in terms of financing), they will be set up for long term success.

The lending institutions base their acceptance or declination on one thing.

Is the business an attractive lending risk.

There are 20 key points every business owner must have in place to be approved by financial institutions when their underwriting team is determining to approve or decline a loan app. Many of these are small, seemingly meaningless ideas. However, lets take a look at it from the eyes of the lenders.

Banks and lending institutions get so many applications from business owners who, quiet frankly, have no business applying for a loan. Their business is not set up to be lent to. The banks are not even viewing these entities as a viable businesses. So the first stage of getting past the computer guidelines is to have these in place.

Additionally, if you were to go to the bank and not have these in place, the loan officer would get a two digit code back from the computer system and all it was say was “Loan application declined.” Your loan officer, without investing some time into the issue, would not know exactly what you needed to do differently to be approved. The loan officers surely do not have the underwriting guidelines for their firm.

In this article we will examine the top three reasons business owners fail at business credit building and business financing.

The first is simply the business owner does not have all the I’s dotted and the T’s crossed in their business. Things like having an 800 number, being listed in the 411 directory, and having a dedicated fax line is a must to a business owner seeking financing. Many business owners I speak with are small businesses, who are just seeking their financing options. It’s impressive to see the amount of businesses that do not even have these first three steps accomplished. Remember, the goal here is to have your business look attractive on paper. In the eyes of a lender, if you do not have an 800 number it is suggested you own a “mom and pop shop” and are not setup for success.

Secondly, business owners have not started to build their business credit. There are right ways and wrong ways to go about building your business credit structure. In the eyes of the lender business owners who go out seeking to open revolving lines of credit and are turned down (due to reasons outside the scope of this article) it appears as though they are fishing for financing. It’s imperative to apply for the right types of credit lines and being approved for those lines when establishing your business credit from the get go.

Thirdly and most relevant to most entrepreneurs: they have not separated their personal liabilities from their business. It’s important for a business owner to have good receivables in his/her business. But, and what’s equally important, is that business owners personal credit is not tied to the business, in any possible way. There are two reasons why you’d want to separate yourself from your business. If something happens to your personal financial situation, you do not want that to be the reason your business is unsuccessful in obtaining financing. Secondly, should something happen to your business, you do not want that to affect your personal credit.