Small Business Development Center
At Chemeketa Center for Business & Industry
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Monthly Archives: April 2012

Learn to Ask Customers Better Questions for Testimonials

By Chemeketa SBDC

For small businesses, a well-written testimonial has one job: to build trust in the minds and hearts of your would-be customers. Potential customers are nervous. They’ve been burned before, perhaps, or are skeptical. When they can see that past customers have tried your product or service and left satisfied, it helps them feel confident that your offer is right for them.

A really great testimonial is worth its weight in gold, but most of us don’t have the first idea how to get one. It’s common to use spontaneous praise which falls flat because of its vagueness. Enthusiastic sentiments (You’re great! Your business is the best! We love you!) are not specific enough to reassure a fence-sitting customer. Many business owners are too busy or too self-conscious to ask for something better.

Don’t let excuses keep you from having this powerful trust-building, sales-generating tool. Think for a minute of the customers you’ve truly enjoyed and who were pleased and satisfied with their experience. Write down at least three names. Today, write them an email asking if they’ll send you their responses to the questions that follow.

1. What problems were you facing before you found Business Name?

2. What did you feel skeptical about before purchasing from us?

3. How has working with Business Name helped you? How much time, money, or sanity has it saved you?

4. What do you like about our business, our products and/or our services?

5. Have you been pleasantly surprised by any part of your experience? What have you found remarkable?

6. Where do you think you’d be today if you hadn’t found Business Name?

7. Anything else you’d like to share?

These seven questions give satisfied customers an easy way to share their experience. When a customer completes the questions, you’ll have a compelling statement of the doubts they had before deciding to purchase, a summary of the satisfying outcomes, and very specific examples of how your business exceeded their hopes.

When you receive a testimonial from one of the customers you chose, be sure to get it on your website as soon as possible. Consider giving these customers a thank-you gift for taking the time to write about their experiences. It’s just one more way to wow them.

As a business owner myself, I find that the more I ask for testimonials, the easier it gets. Your satisfied customers would like to see you stay in business, and this is one way they can help you. Go ahead. Close the paper and get writing.

Jennifer Hofmann is a business adviser at the Chemeketa Small Business Development Center and the owner of Inspired Home Office. The Small-Business Adviser is produced by the center. Questions can be submitted to SBDC@chemeketa.edu.


Carefully Consider Business Partnerships Before Tying the Knot

By Chemeketa SBDC

Let’s face it, you need every break you can get when starting or expanding a business. One oversight that gets businesses into trouble is not having written agreements with business partners. Written agreements are essential for creating general partnerships or multiple member limited liability companies and for relationships with financial investors. The lack of clearly written agreements can eventually lead to dysfunctional management and possibly early business closure. When it results in fighting partners or unhappy relatives you have a disaster.

The case for solid business agreements should seem pretty obvious. So why do people ignore the obvious and continue to ‘tie the knot’ with business partners without them?

One reason: business partners are frequently close friends or family members. Owners enter into oral or handshake agreements and think they both have the same understanding of what they just agreed to. Most likely their perceptions differ, and the realization of this only comes after work has been performed and problems arise. The belief that because they know each other makes written agreements unnecessary is frequently wrong.

Another reason: fear that suggesting written agreements in close relationships might be embarrassing or seem like a betrayal of trust. Good relationships stand the test of exploring agreements and disagreements, and putting them on paper. If it strains the relationship, they probably shouldn’t be in business together.

The process of having good business agreements starts by talking with each other. This helps identify how to do business together and what should be in the agreement. It helps identify areas of potential disagreement and avoids the need to solve these things later.

Some things that partners might include in a written agreement are:

•  How decisions are made. The daily operation of the business sometimes requires prompt decisive action.

•  How work is divided. When one partner thinks they are working harder than the other there will be conflict. Clear descriptions of the work each partner will be responsible for are needed.

•  How long the agreement lasts. Even if business owners remain on good terms, death, disability, divorce or other life changes are common. If there is no written agreement in place to protect the other owner, disasters can occur. Unintended consequences like children, heirs or former spouses having an involvement in the business can result.

•  How the finances are handled. Identify each partner’s investment, percentage of ownership and compensation. Also identify how banking and recordkeeping will be handled. Keep in mind that profits as well as losses will be shared.

•  How disagreements are resolved. It will be beneficial for your business agreement to identify a dispute resolution process. This might include mediation .

When problems arise the best thing is to do is keep talking. Most people are initially willing to extend some measure  grace. But that grace quickly ends when communication stops.

Forrest Peck is the MERIT Program Director at the Chemeketa Small Business Development Center. This column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High St. NE  or call (503) 399-5088.


Know Your Customers When Building Marketing Plan

By Chemeketa SBDC

“How do I increase my customer base?” The answer is almost simple. “By knowing who your customers are and how to reach them.”

To effectively attract and retain customers, your greatest tool is a marketing plan. This plan  needs to reflect the very unique aspects of your customers. Here are some simple guidelines to writing your plan.

•  Understand your market. Decide which segment of the market is being underserved. A successful business understands that people with an unmet “want” is the critical element to success. A product (or service) that nobody wants or cares about is only taking up you time and money. Don’t fall in love with your product; serve your customer’s need.

•  Understand your customer. Know who they are, where they are, what they want and what motivates them to buy. People don’t necessarily buy what they need but they will usually buy what they want. Do you understand how your product fills that gap? Can you differentiate between features and benefits?

•  Find your niche. You cannot sell to “everybody.” While “everybody might buy from you,” you do not have the resources to market to everybody. Since you are able to choose – choose a niche that interests you and that is easy (affordable) to contact. Being a big fish in a little pond is much more feasible than swimming in an ocean of competitors.

•  Develop your marketing message. Create two messages. Your first one is the elevator speech. This tells people what you do in a brief, concise, and informative way. The second message is the more complete dialog once you have your client’s attention. This should be compelling and persuasive. It needs to explain the benefits your solution has to the customer’s need. You need to talk about costs, fees, guarantees. This is the place where you concentrate on your customer, not your product.

•  Decide on advertising medium. This is the communication vehicle you use to deliver the marketing message. It is driven by the choice that delivers your message to the most niche prospects at the lowest possible costs. Match your message to your market using the right medium. You wouldn’t market to baby boomers in a magazine aimed for teenagers.

•  Set your goals. You cannot know if you got there if you didn’t know where you were going. Write it down. A good goal is SMART. S-specific; M-measurable; A-achievable; R-responsible person assigned; T-time specific.

•  Develop your budget. Knowing your medium choices and the number of customers you need – you need to determine your return on investment. If it costs $100 to attract a customer that will only spend $10 – you don’t have a reasonable marketing plan. Do your research; develop the cost per message and the cost per customer. Be sure that you actually attract the niche customer you are aiming for.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.


SBDC client in the news! A new twist on delivery

By Chemeketa SBDC

Casablanca Meal Delivery Services’ business is based on a simple model: provide fresh, healthy meals delivered to customers homes.

The Salem company takes a burden off clients, such as Joy Tuff and her husband, Richard. Shopping and cooking can be difficult for the Tuffs, who are in their 80s and require special diets for medical reasons.

“It’s really hard to cook the things that both of us can have,” Joy Tuff said.

The meal delivery service, which has been in business for a year, charges its clients monthly fees. For one senior, a subscription for Monday through Saturday dinners is about $240 a month.

For the Tuffs, the expense is worth it. They get appetizing meals, served on a white china plates, that follow doctor’s orders.

Casablanca Meal Delivery began out of necessity. Company founder Crystal Gonzalez, a mother of five, had lost her job, and the outlook was bleak. The family had little money and was living at a relative’s house.

“I knew that if there wasn’t a job out there I could get, I needed to create a job for myself,” Gonzalez said.

Gonzalez, 32, had never run a business before. She hadn’t done well in school and had overcome a drug addiction. But she was certain of a couple things: her insurance industry background taught her about customer service; and she knew how to cook.

First stop on Gonzalez’s path to becoming an entrepreneur was the MERIT program, part of the Chemeketa Center for Business and Industry in Salem. The program provides training to help turn ideas into new businesses.

After devising a business plan, Gonzalez obtained a small loan to launch Casablanca Meal Delivery.

It quickly became apparent that delivering hot meals wasn’t the way to go. From a practical and food-safety standpoint, it’s easier to deliver chilled, prepared foods that customers can re-heat at their convenience.

Entrees, such as apple-stuffed pork chops and Parmesan tilapia, are delivered to customers up to three times a week. Two meals, with side dishes, are delivered at a time. If customers are away from home, meals can be placed in a cooler outside.

“What I wanted was a service to make people feel as if the meals were prepared in their homes,” Gonzalez said.

Meals are made from fresh ingredients in the kitchen at the Broadway Cafe in Keizer, a space Gonzalez subleases. The company has retained a dietician to design its menu, although Gonzalez and a relative do the day-to-day work of running the company.

For now, the small company has focused on serving the Salem-Keizer area.

After one year in business, Casablanca  has more than 20 monthly subscribers. It’s too early to declare the company a financial success, but it has a built a loyal clientele among seniors.

“It just made it easier by not having to fret and worry about getting to a grocery store,” said Diane Colbath, a Keizer senior who signed up for the delivery services after her husband, Ben, was put on a low-sodium diet.

“This is what I wanted—good food, healthy food,” said Helga Hillig, an octogenerian who lives at the Salemtowne adult community in West Salem. She doesn’t drive and uses a walking cane.

The over-65 crowd, however, isn’t the company’s only customers.

Casablanca Meal Delivery offers postpartum and post-operative meal services. It also markets its services to busy families and singles.

In some respects, operating a food delivery service is even more problematic than running a standard restaurant. Delivery costs, such as labor and $4 a gallon gasoline, have to be taken into account.

“You have to do a lot of volume to make up for the expense of delivery,” said Bill Perry, a vice president with the Oregon Restaurant and Lodging Association.

Offering prepared meals-to-go certainly isn’t a new idea. Grocery stores long ago picked on the idea that consumers wanted a “home-cooked” meal and expanded their deli sections. Delivering meals to customers who pay monthly subscription fees seems like a natural progression of that trend, Perry said.

Casablanca recently has found money in its shoestring budget to purchase newspaper and radio advertising. Word-of-mouth advertising might be its best marketing tool, as its senior customers tell their friends about the service.

“They want me to stick around,” Gonzalez said. When she visits customers in their homes, they rarely allow her to leave without a hug.

mrose@StatesmanJournal.com, (503) 399-6657 or follow on Twitter at mrose_SJ


Incubation helps business take flight

By Chemeketa SBDC

As local, state and national government agencies examine ways to create jobs and turn around the struggling economy, business incubation programs are featuring prominently in the debate — as well they should. For 50 years, incubators like Chemeketa’s EDGE Business Incubator have been helping entrepreneurs turn their ideas into viable businesses, promoting innovation and creating jobs by providing emerging companies with business support services and resources tailored to young firms to increase their chances of success.

As any entrepreneur can attest, starting a new business isn’t an easy task. Most business owners know every detail of their product or service, but many lack all of the skills they need to turn their ideas into successful firms. Business incubation programs are uniquely positioned to help entrepreneurs’ access resources through the incubator, business community, local colleges other business assistance programs to help them develop the skills they need to grow successful firms.

Around the world, entrepreneurs are playing an increasingly important role in transforming economies. Rather than relying solely on efforts to attract existing businesses from other locations, many communities like Salem are recognizing the need to help local residents build new businesses from the ground up through business incubators.

By focusing on developing a new generation of entrepreneurs, most of whom have ties to the local area, communities are helping to build companies that will create jobs and spark economic growth in the region for years to come. And because these programs provide targeted business assistance to young firms at their earliest stages of development, when they’re most vulnerable, business incubators help support new ventures that have a greater-than-average chance of success.

A 2008 study conducted by consulting firm Grant Thornton for the U.S. Department of Commerce Economic Development Administration found that business incubators produce new jobs at a low cost to the government. The report, “Construction Grants Program Impact Assessment Report,” found that for every $10,000 in EDA funds invested in business incubation programs, an estimated 47 to 69 local jobs are generated. As a result, business incubators create jobs at far less cost than do other EDA investments, such as roads and bridges, industrial parks, commercial buildings, and sewer and water projects. In fact, the study found that incubators provide up to 20 times more jobs than community infrastructure projects at a federal cost per job of between $126 and $144, compared with between $744 and $6,972 for other infrastructure projects.

Although business incubation is still a relatively new industry, programs around the world have racked up impressive results that demonstrate the important role incubators play in stimulating economic growth and creating jobs. For example, the National Business Incubation Association estimates that in 2005 alone, North American incubators assisted more than 27,000 start-up companies that provided full-time employment for more than 100,000 workers and generated annual revenue of more than $17 billion.

The nation’s existing network of business incubation programs and the many new incubators under development can assist entrepreneurs in growing new businesses that can help put many people back to work.

For more information about Chemeketa’s EDGE Business Incubator visit our website www.edge.chemeketa.edu or call (503) 399-5088.

Scott Sadler is a business adviser at the Chemeketa Small Business Development Center and owner of Sadler Business Coaching. He can be reached at sbdc@chemeketa.edu.