Small Business Development Center
At Chemeketa Center for Business & Industry
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Monthly Archives: February 2014

Lead Generation Strategies

By Chemeketa SBDC

If you’re a small business owner, you know that generating new customer leads is a continual process. You always need new potential customers coming into your pipeline. So how do you find these folks? Here are five strategies to consider.

  • Focus and prioritize lead capture. This may sound obvious, but if you don’t have a system for doing this (and if you’re not working the system you might have), then it won’t happen. You need a standard process to capture lead information during any interaction that you or your staff have with any potential customer. If you’re interested in direct responses then use coupons or other discounts that bring a customer to you. You can capture customer information on your website with forms (which a customer would fill out in order to get something of benefit from you). However you do it, get that information so you can communicate regularly from then on.
  • Amp up your online presence. Review your SEO (search engine optimization) practices. Use tools like Google Places. Pay attention to Google key word protocols. Engage with influential (preferably local) bloggers who have the ears of your potential customers and offer to write a guest blog post on those sites. Make it easier and faster for leads to come across you online.
  • Divide your contact database into segments and tailor your marketing messages. A well-aimed message will get forwarded and passed along (because the folks you target associate with people similar to themselves). This is a way to have your current customers become a referral source for you.
  • Create alliances and partnerships. What businesses around you offer complementary products and services? How can you collaborate with them in a way that benefits both partners, and gives access to the other one’s customer base? The key here is creating added value for both of your customers.
  • Develop and implement a referral strategy. Besides complementary businesses, who else in your sphere of influence could benefit their customers and clients by referring them to you? Reach out to those people, make an intentional effort to know them and have them know you. Be willing to refer your customers to them as warranted (remember, you are providing a solution for your customer when you do this, and that’s good for everyone involved).

Remember that these strategies are not one-time solutions. Marketing is a continual process of doing the same things repeatedly (sorry!) and there are no easy fixes. You may not see much progress at first, but stick with it and the results will start coming in.

 


Projecting Sales

By Chemeketa SBDC

Even if you are an existing business – you should be forecasting – projecting your sales.  You may use actual numbers if you have historical financial records.  But what do you do if you have nothing to refer back to?  You will need to determine how many potential customers are there, how many of these potential customers are likely to buy from you, decide the average sale per customer and then project this out for the year. Try this:

First, determine the total number of potential customers living in your territory.  (Don’t forget – the more clearly you can define your customer – the more realistic your research!) If you sell to the general public, you need to find the information from the new US Census data for your market area.  You can find this information on the web or at the library (http://www.census.gov).

If you sell to other businesses, there are many potential sources of information; one of the best is a trade association that represents your industry.  You can also find this information through a web search or at the public library.  Once you have determined the total number of potential customers living within your geographical area – you have the base to begin narrowing down your target market.

Second:  determine the number that will likely buy from you. You need to be realistic.   Consider your competition (both in number and quality), consider that some of the people will not buy from you or your competition, and consider people will find substitutes for your product.  What percentage of the total available population will you be able to attract?

Third: determine your average customer sales per year. How many purchases will your average customer make in a year? How much will they spend on each purchase?   Is this a repeat business or once and only once.  Does the average customer buy the same product/service or will they need other complimentary services?  Trade associations are good sources of information to help answer these questions.

Fourth:  determine your annual sales volume. You have determined the number of customers and determined the average amount each customer will spend per year.  Multiply these two numbers together to calculate your expected annual sales volume.

Finally:  Evaluate the annual sales volume figure.  Does the number you calculated make sense?  If not, go back and work the numbers again.  What assumptions have you made about your customers?  How accurate or risky are these assumptions.  You can guess, and this is not a bad place to start.  But – then – you need to back up your assumptions with actual figures to gain the greatest degree of reality for your projections.


The Traded Sector Across Our Borders

By Chemeketa SBDC

When I think of traded sector business and bringing new dollars into the local economy, I like to think big. As in international-sized big. Did you know that doing business with foreign markets isn’t nearly as daunting as it sounds? “International” could be as close as Canada or Mexico. And many places around the globe are English speaking, making business negotiations a lot less scary. Have you considered trying to sell your products outside of the US?

There are some basic reasons for wanting to expand your product’s reach into other countries. For one thing, there are a lot of customers out there! The US represents only 5% of the world’s consumers, and that leaves the other 95% as a potential market for you. If you have saturated your local market(s) then casting your gaze to farther away places makes sense. This has the potential of increasing cash flow, and even smoothing out the seasonality of your cash flows.

Additionally, going global can be a risk management strategy as your business wouldn’t be tied only to the local economy and the business cycles of the domestic economy.

But how do you even begin to think about this if the idea is new to you? Start with examining four basic readiness factors. Ask yourself if you have 1) a good handle on your current production and product line 2) the commitment from management to try an international expansion 3) adequate cash flow 4) and the capacity and capability to produce products for an international market.

If the answer is yes to all four of these, then look at the challenges associated with such an endeavor and assess whether your business can manage them. Do you have a long enough timeline to enable you to move in this direction, and will your cash hold out while you implement all the pieces? Will you need to modify your products to suit the regulations of the new market? Can you assume a financial risk without getting hurt beyond repair? What about licenses and documentation in the new country?

You can explore these questions and many more at the Export.gov website. There are links to all kinds of great free information resources. Additionally, there’s a wonderful 9-module series called Before You Go Global at BizCenterGlobal.org.

Think big! Your local friends and neighbors will thank you!

 


What’s New for 2014

By Chemeketa SBDC

Here are some important updates that business owners will need to pay attention to in 2014.

  • 2014 Standard Mileage Rates – The IRS has issued the 2014 optional standard mileage rates for operating an automobile for business, charitable, medical, or moving purposes. Beginning January 1, 2014, the standard mileage rate for the use of a car (also van, pickup, or panel truck) is 56¢ per mile for business miles driven. Taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, and there are some limitations on when the standard mileage rate can be used. For further information, check with the IRS or your tax specialist. Google “IRS standard mileage rate 2014” for the IRS announcement.
  • The price of a first-class stamp will increase 3¢ on January 26, going to 49¢. Additional ounces for letters will see a 1¢ increase to 21¢. Postcards go up 1¢ to 34¢. Bulk mail, periodicals, and package service rates will also rise, some by as much as 6 percent.
  • Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) has increased the limit of the amount of earnings subject to taxation for the upcoming year. This annual limit, known as the contribution and benefit base, is $117,000 for 2014. The tax rate itself remains at 6.2 percent for employees and employers, or 12.4 percent for self-employment income.
  • Oregon’s minimum wage increases to $9.10 on January 1st. Free updated wage posters can be downloaded from the Bureau of Labor and Industries (BOLI) website http://www.oregon.gov/BOLI/WHD/Pages/index.aspx. Please note: All legally required postings are available for free from the issuing agency. In addition to the free minimum wage poster, BOLI also sells a composite poster of the 8 most commonly required postings together on one 24″ x 39″ page for just $10.
  • Social Media Accounts Passwords Protected HB 2754 prohibits employers from requiring or requesting an applicant or employee to provide a password to his or her social media account or from compelling the applicant or employee to allow the employer to view his or her personal account. Furthermore, it prohibits an employer from threatening or taking adverse employment action for the applicant’s or employee’s refusal to provide the password. The provisions, however, do not extend to passwords for an account provided by or on behalf of the employer nor does it affect an employer’s ability to access information already available to the public about the applicant or employee. Social media includes such user-generated content as Facebook, Twitter, e-mails, videos, photos, blogs, instant messages, and podcasts.
  • Posting and Leave Requirements Amended – For employers with six or more employees working in Oregon, HB 2903 expands the employee eligibility requirements for leave for a victim of domestic violence, harassment, sexual assault, or stalking. It also added new posting requirements.
  • Bereavement Leave Required – HB 2950 provides that a qualifying employee is eligible for Oregon Family Leave Act (OFLA) leave upon the death of an employee’s covered family member. Eligible employees may receive two weeks of leave within a one-year period for each death up to the 12-week allotment under OFLA. The OFLA is applicable to employers with at least 25 employees.

 


Competition is Good

By Chemeketa SBDC

Do you sometimes wish your competition would just go away?  That you could be the only business in town that does what you do so you don’t have to worry about gaining or keeping customers? What if I told you that having competition can actually make your business stronger?

Whether it’s directly or indirectly, business owners almost always have to compete for their customers and then to retain those customers. And in an age of online shopping, the competition is both local and global. But, believe it or not, competition can be a good thing. It can help you understand your niche, it can show you where you are weak, it can motivate you to improve, and it can lead to unexpected partnerships. The key is to see your competition as an ally (of sorts) rather than an enemy.

In other words, competition doesn’t always have to be about winning and losing.  It can be about growth and learning, building and partnering. How would it feel to see your competition as there to help build your business? How would you do business differently if you believed that both you and your competitors can be profitable, that no one has to lose?

Here are a few things to think about the next time you look down the street, across town, or on the web to see what your competition is up to:

  • What do you know about your competitors? What are their strengths and weaknesses?  How long have they been in business?  What are they particularly known for? How might you support them? Be open to discovering you have immense respect and admiration for those you have been competing “against.”
  • Do you know what sets your business, product or service apart from theirs? Use this information to get clear about your target market and how it differs from your competitors’.  Perhaps a potential customer is really a better fit for your competition: are you willing to refer them so your customer gets what they are really looking for?
  • Make a list of five reasons customers should choose your product over your competitions’ without putting your competitions’ product down. If you have to spend energy making another business look bad, you don’t have that energy available to tell your potential customers why your business, product, or service is the best possible choice for them (assuming it is). Besides, it’s not very becoming either.
  • Be honest with yourself about how your competition is better than you.  Is their product superior?  Do they have better customer service? How can you learn from and emulate what they do well? Are you willing to ask them for help?
  • How can you collaborate with your competition to create win-win situations that lead to greater profits for you both? Be willing to make referrals to your competition as appropriate and don’t be afraid to play nice in the sandbox; you never know where a positive relationship with your competitor might lead.

 


Business Reinvention

By Chemeketa SBDC

It’s January again, and time to take stock and make plans. How’s your business doing as we head into the new year? Has the economy turned your business model upside down? Does something need to change or you’ll go out of business? Are you restless and know you want something else?  Something more, something less? If something isn’t quite right, it’s probably time to reinvent.

But what does reinvention mean? The good news is that it doesn’t mean you have to throw the whole thing out and start over from scratch. Reinvention needs to be big enough that it’s transformational, not just a small series of tweaks here and there. Yes, you will be making major changes, and no, you don’t have to do them all at once. If you know your current business practices aren’t working, or you feel lackluster even if they are, trust your instincts and investigate that.

The first step in the process is to look at every aspect of your business and ask what needs a makeover. What is it that you really want? What parts of your business are not leading you in that direction? This could be your marketing, your products or services, your employment structure or employees, your size, or anything else that is getting in the way. Where are your biggest headaches coming from? What will give you the results you are looking for? Do some brainstorming and list every idea that might help. Get out of your comfort zone, consider all possibilities no matter how farfetched they may seem. Think big.

Then prioritize these areas in terms of what will give you the greatest return for your investment—your time and money. Ask for help from other business owners, your employees, a business coach, or anyone who you think will add value to your conversations and your processes.

Next, create a master plan for how and when the changes will happen. Decide what you will start with and when you will move on to the next item on the list. Make sure to include who will be doing what, how much things will cost, and the results you expect when you make the changes. A realistic timeline is important; a rollout that is too fast will shock the system and may backfire.

Then garner support from family and business associates for the new plan. Major changes can get derailed if you don’t have enough energy behind them, so build a supportive team. Change, even desired change, can be uncomfortable, so go easy on yourself and the others involved.

It is important to chart your progress as you move forward, so create a series of metrics to do this. Focus on the benefits of the new arrangement (you’ll need to continually focus on this to stay on task). And celebrate milestones when you achieve them.

And, if in your investigation you discover that reinvention for you means selling the business, going out of business, or some other track that steers you away from being a business owner, listen to that as well and devise a similar plan for recreating your life.