Small Business Development Center
At Chemeketa Center for Business & Industry
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Category Archives: Collaboration

If You Fall Behind on Payments, Talk to Your Creditors

By Chemeketa SBDC

There are times when cash flow becomes very short for your business and you may have fallen behind in payments to your suppliers.

While it may not be easy, talking to your creditors has to be done. Unanswered collection calls are the quickest way to see your company fall into a legal morass that will end badly. Whether it is the actual creditor or a collection agency, providing no information (also known as running and hiding) inevitably takes the action one step further into a legal process until you may end up in court or even in bankruptcy.

If you can’t pay your bills in full, work out a plan of partial payments or extend the deadline for sending a check. You can work this plan out on a spreadsheet (every business owner should be very comfortable around a spreadsheet – if not, go get trained or learn on your own – just be sure it is a tool you know how to use!) Look at every possibility and be certain that you can present a plan that you can handle. It makes no sense to propose a payback if you cannot meet it.

Then you need to present this plan. If you are really uncomfortable about having a conversation with your creditors, start the dialogue with a short letter. One caution here is to avoid making any promises. You don’t know yet what ones you can keep. Try something along the lines of:

“Dear Supplier: You may have noticed that recently our payments have been slower than you normally expect from our company. Our cash flow has been strained by a shorter than normal summer and lower than expected sales. We are all working diligently to correct our problems and hope to be back to a better schedule soon. We will be in touch shortly to give you an update on our progress. We appreciate our long-term business relationship and thank you in advance for your cooperation. Sincerely, ABC Company.

People will talk. If all they have heard from you is silence, it is likely that strong action will be taken, including legal action. You need a chance to explain the circumstances of your company’s current situation and then describe your strategy for changing those circumstances. Your own spin on the subject will be much more positive than someone unfamiliar with your circumstances.

And finally, a creditor is less likely to take major action against someone with a recognizable name and personality – so make those calls!

 


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.

 


What Small Biz Can Learn From the Tech Industry

By Chemeketa SBDC

“The Lean Startup” has become a book that every tech entrepreneur has read and quotes regularly. Eric Reis, the author of the book, coined the term “lean startup” to reframe what it means to be a startup and the process that a startup should follow to ensure success… or at least to take a good stab at it. The main premise of the book is that a startup is simply a
series of experiments. Experiments that have a hypothesis (an idea to test), limited variables to test (test certain aspects of your idea, not the whole idea at once), and success measurements (how you know when you succeeded or failed).

By executing and completing these experiments, you are continually refining and defining your product and target market. Through the experiments, you might find out that no one will buy your product, or that a completely overlooked demographic is actually your target market. In the long run, testing small aspects of your idea will save you time and money because you will be forced to focus on the product that will sell and not on superfluous
aspects of your business that do not contribute to your bottom line.

While “The Lean Startup” is written specifically for tech startups, the principles can be and must be applied to small start-up business and social ventures. Here are some examples on how applying the lean start-up principles might look in a small business.

Business idea: Car mechanic Hypothesis: People want a car mechanic in a convenient
location.

Experiment: Find a neighborhood that has to travel 5 miles to get to a car mechanic. Go door to door and offer to provide basic services at their residence.

Measurements: Get 30 percent of car-owning neighborhood residents to pay for services.

Why it works? You will be able to determine if a convenient location is a problem. You will start to build a customer base before making the capital investments into a building.

Business idea: Organization services

Hypothesis: People want to get organized because it makes them calm.

Experiment: In the same time frame, send out two sets of marketing materials. One that uses words and colors that reflect calm, peace, tranquility, etc., and the other that uses words and colors that represent efficiency, time-saving, productivity, etc.

Measurements: Record which marketing materials created the most interest.

Why it works? You will be able to see what motivates people to get organized and develop a customer-centric marketing strategy.

Using the lean startup principles can be intimidating and might be counter intuitive to traditional startup thinking. The fact is you can plan as much as you want but in reality business plans reflect the world that’s in your mind, and not the world that actually exists. To start a successful business from the beginning, you need to be in the trenches with your
potential customers.

Now time for my experiment: Are you interested in learning more about lean startup rinciples and how you can incorporate them into your startup or existing business or nonprofit? If you are, contact me at kmozian@chemeketa.edu or 503-399-5088 and let’s chat.

Kristen Mozian is a business advisor working with the MERIT Microenterprise Program at the Chemeketa Small Business Development Center, www.sbdc.chemeketa.edu.


Collaboration Can Boost Your Business

By Chemeketa SBDC

The word “collaboration” is used a lot these days. But
what’s the practical application of that word and concept for a business owner?
Turns out there’s a lot contained there that can help you with your business.
There’s a synergy to working with others that can mean great things for you, and
success for your business. Tap into the power of others and watch what
happens.

A common way to build a collaborative partnership is
when a for-profit business (a pet store for instance) teams up with a nonprofit
(the humane society). They have some common goals, they have a common
constituency, and they can mutually benefit each other.

Another pathway to collaboration is when a group of
businesses in a given industry (retailers, manufacturers, service providers,
etc.) or a group of similar businesses (specialty food producers, health
services providers, artisans, etc.) work together. Perhaps they host an event,
perhaps it’s a group marketing campaign, or a series of meetings where they get
together to share best practices and common concerns.

There are several good reasons to enter into these
mutual arrangements. First is to promote your business to customers (with the
intention of driving sales). As a business owner, this is always on the top of
your mind, and a collaborative effort is another way for you to do achieve that
end. When you team up with other organizations you may gain access to their
customer lists, their ability to reach customers, their expertise, and many
other benefits.

Another good reason is to generate publicity for
yourself and your collaborative partners. The more awareness and name
recognition you can create, the better. Cross-promotion helps everyone.

There are a couple of things to consider before
entering into a collaborative effort with others.

• Consider carefully who you align yourself with in
order to ensure compatibility of mission. Ask yourself who you want to be
associated with.

• Be sure to plan everything out in advance and put it
in writing. The more time spent up front, the smoother things will go.

• Each partner’s responsibilities need to be spelled
out and agreed to.

• Reach a consensus on a common vision for what will be
accomplished and how each partner will benefit.

• Speak well of each other in public; dirty laundry
needs to be kept strictly out of sight. Keep a professional tone, both when
speaking with, and when speaking to, your collaborators.

Marcia Bagnall is Director of the Chemeketa Small
Business Development Center.