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Quick-Launch Business Plan – Part 6

Quick-Launch Business Plan – Part 6


Now we’re ready to move on to promotion and
distribution. We’ve already talked about the difference between
advertising and listing. And one of the things that you’ve noticed
by now in writing a business plan is there are things that you’re going
to research or things that you’re attempt to do that are going to bleed
over into other areas. In doing a business plan, it may appear like
a very linear model, a very straight line from beginning to end, but it’s
anything but. It is one of the most unpredictable processes
that we’ve been able to find, just like running a small business.
That’s one of the paradoxes that we just sort of live with.
Owning a business is very non-linear. But, the planning process is taught as a linear
thing. I hope one of the things that you’re picking
up on is that we are going to bounce back and forth. We’re going
to learn something while we’re doing this that actually belongs over
here or there. So embrace that paradox. Where are customers likely to look for or
to find your promotions? What kind of promotions are you
going to do? A lot of times we get a business plan that says, “Here
is the entire marketing section” or “the entire promotion and distribution
plan. We’re going to network.” And then they go on to the next
section. Networking is something that’s a precise kind
of science. I can write down when I’m doing networking, I can
talk about who I’m going to network to, and I can have some key things
or key phrases that I’m going to use for folks who are shy in social
situations. Part of the support strategy in getting a business going
is helping them with networking, figuring out, rehearsing, and
role playing. When I go to that chamber mixer on Friday
night, what’s my six seconds that and I’m going to impress them
with? “Hi, my name is Cary and I’m a consultant.” That opens up the door
for, well, you know, “Wow, we hire consultants in our business. What
kind of consultant are you?” Now we can have a conversation, and in the
back of my mind I already know some of the key things that I’m
going to talk about and some of the key things that I’m going to sell
at this meeting in a friendly way. I didn’t go there to get an
order. I went there to become known, so that people will know me when they
are ready to buy. When they know that it’s available, they’ll have my
business card and can call me after the meeting. A business card is a very important promotional
item. Business does business with business cards. A lot of
people want to say, “Well, I’m going to start with a brochure.” One of
the things that I recommend is you not start with a brochure.
Brochures a lot of time will eat up money that you don’t have.
Brochures started before the business is operating can be dangerous,
because it’s a non- linear process. We get into a business and we’ve committed
$500 or $1000 to a brochure, ten two weeks into the business
we realize that the business doesn’t operate that way or we’ve got really
lousy cell phone service and we need to change our number. All of a
sudden, our brochure is now wrong. Maybe we’ve added a web site, because we’ve
realized that that’s necessary, but it’s not on our brochure. A lot of times people on a budget want to
run off a cheap brochure. It looks cheap, and it misrepresents
the quality of your business. It’s one of those mistakes people make a
lot: buying things that they don’t need. Buying radio advertising
when radio advertising maybe is not the best thing for
their business. Think about how you’re going to promote it. There was a study done at Rutgers University
a couple of years ago that said businesses that know their customers
before they open their doors are 27 times more likely to succeed.
One of the things that we do in promotion and distribution is
write down a list of everybody that we know and everybody we know
who knows some body. How do we use them? How do we network with
them? And, how do we get them to promote our business? While there
are times when we would use a brochure or a coupon in the newspaper, don’t
start with that assumption that your business will be successful. Show some
evidence in your business plan that that might be an appropriate way to go. Where are your customers likely to look for
and, again, find your promotions? Well, if you’re running a
plumbing shop, the Yellow Pages is probably a pretty good place to go.
I know dentists advertise in the Yellow Pages that might be important
for somebody who is suddenly new to the area and has a toothache,
but generally I don’t select my dentist out of the Yellow Pages.
When I move to a new community, I ask my friends, neighbors, and
co-workers there who their dentist is and if they would recommend them. Networking in small business is an important
thing and tends to make sense. What value are you establishing
with your promotion and distribution? Where do you want to be seen?
Who do you want to be seen with? Are you high cost or are you low cost? Are
you high quality or are you low quality? Think about that. If you’re going after a
typical Wal-Mart buyer, that may be a great place to advertise. If
you’re going to start a lawn mowing service that might be
a great place where people are looking for convenience and value. Maybe you’re looking for single moms. Single
mom may shop a lot at at Wal-Mart. If so, the Yellow Pages would be a great place
to advertise. That may be a great place to be out in the
parking lot. Check your local ordinances so you’re not doing anything wrong, and put
flyers under windshield wipers. I know that’s annoying, but it works sometimes. If you have a single mom with three kids,
maybe she doesn’t have time to mow the lawn. She might not own
a lawn mower as it’s not the most important thing in her life.
That might be a niche that you want to explore. Maybe you’re going to
have to be value-based. That’s why they are at Walmart in the first
place, they’re thinking value. Targeting customers, who are value-based shoppers,
will cause you, as a business, to be value based as well.
Sell your product based on your particular niche. How will customers access your business? Anna’s
business uses e-Bay as a way to reach an international market. Not
everybody can get on a plane and fly to Albuquerque or Santa Fe and
go to an Indian market to buy their jewelry. Establishing a reputation on e-Bay is a networked
approach; people talk online through their feedback
on e-Bay. That’s really easy access for customers. It’s very convenient
to buy when someone uses Pay Pal to make an instant payment. They
can get that product through priority mail the next morning. If you’ve got a storefront, then you’ve heard
over and over, again, about “location, location, location”.
That is an access issue, right? How people get to you is critically
important. How will you make buying and using the product
easy and convenient for the customer? If we look at
supported employment or customized employment services as a small
business, have we made it easy for businesses to hire people with disabilities?
Most of the analysis says no. There are some internal issues that we could
work on to get better at helping other people start
their businesses. Look at our own businesses, is it easy? Is it really
fast and convenient for an employer to use us? That’s one of those things that maybe we ought
to spend a little time on down the road: looking at our own
business operations. Try to think about how easy can you do it. On e-Bay what we found, in doing our research,
was that a lot of sellers still don’t use Pay Pal. They require
a money order or a personal check. Then it has to clear the bank,
and we’re waiting two or three weeks. We’ve also had to send a letter, address an
envelope, get a stamp, go to the post office, and send this
letter out, just to make a purchase. If we’re using a money order, we’ve
had to go to the bank, get out of the car, and go in and get the
money order. That’s a hassle, right? All of that dissuades people
from purchasing, so we want to make it as easy as possible. Does it cost something? Yes. It’s going to
cost you 30, 40 or 50 cents to use that convenience. But does
it outweigh the inconvenience? What we found in our research
was that many buyers wanted to press a button and be done with
it. They’re shopping on e- Bay because they don’t have time to go to
the store. So think about that. You may choose not to make it as convenient
as that. That may be your decision right now and that might
be perfectly legitimate. What a business plan does is it asks you to
think through the process a little bit. Who will help you get the product
to market? And, what is your distribution channel? When Famous Amos started his cookie company,
he started a storefront. But, people around Los Angeles
complained that they had to come to his store, because they
lived on the other side of Los Angeles, which could
be two hours some days to get to his store. What he did, because he
was a single person (owner/operator), was to basically
say, “Here is my business card. Go to your local 7-11 or your local
grocery store and tell them that you would like to be able to buy my cookies
at their store.” He had a unique channel strategy, in that
the customers pulled his product through the channel. It created
a need. Those store owners who wanted to make money, and sell cookies,
would call Famous Amos and say, “How do we set up a deal? How do I get
your cookies in my store?” And that was how he built his cookie empire. So, we want to think through this process
of how it is that we’re going to get there? How we are going
to get it to market? And, who is going to help us get it to market? Then
we’re going to think through all those different channel strategies. Think about the e-Bay channel strategy and
think about how important that is for Anna. She couldn’t possibly
reach all those customers without e-Bay. That’s a very important process. That for
many people and for the local hardware store, the channel strategy
is Main Street. That’s so important to the local hardware store, that
having a web site doesn’t matter to them. It might be nice for service
after the sale, to check their web site to see what hours the
store is open, what the guarantee is on their products, and what their
daily specials are. But, really, their strategy, and their distribution
network, is being on Main Street. So think about how we get our product to market
if you’re living in a really rural area. When Dave Hammis and
I really started doing a lot of small business, it was in Montana,
and distribution was really, really difficult. So we had to think about
how we would entice people to buy? How do we get on Main Street, if that’s
the primary market? Where are people? If it’s a tourist based
business, where are the tourists? How do we get to them? Again, every
one of those strategies cost money, that’s going to end up in your
budget in the long run. If you have a web site, if you’re selling on
e-Bay, if you have to buy a store, those are all costs. Everything in
business costs something. The non-linear aspect of the business plan
shows us that every strategy we think about that’s important, we have to
be able to pay for. Go write out your promotion and distribution
strategies, remember that you’re telling a story. Some day you
might be in the mall, but for today you own a kiosk out in the hall of the
mall. That might be fine for today, so let’s write about that. Let’s write about that target in the future
that can help develop your sales plan for later on. But
right now, talk about simple promotion and distribution of your product.
Then we’ll come back and we’ll talk a little bit about sales forecasting.

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