Monthly Archives: August 2011

The Management Team of a Small Business

Management Team of Small Business from The Startup Garage

The Management Team of a Small Business

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When an entrepreneur starts his/her small business, it is common for him/her to do as much as possible at the beginning. However, as this enterprise continues to grow, it will eventually get to a point that additional senior management team members are required to oversee increasing demands of differing operational aspects of the business. Each member of the executive team must possess the skills to fit his/her position. The following positions may need to be filled when one decides to hire an executive team:

Chief Executive Officer (CEO). A CEO is the leader of the management team and is responsible for all final decisions. He/she must be a strategic thinker who can predict the future of the industry, plan routes for business development, and take good bets with business resources. Among the CEO’s skill-set, the most important is the ability to put the right person in the right position, and replace those who do not deliver. In this way, he/she can delegate important tasks to competent people, free himself/herself from operational details and focus on high level business strategy. The business owner may choose to retain the role of CEO, or prefer to hire one, based on the level of involvement desired.

Chief Operating Officer (COO)/ President. COO and Presidents functions are very similar in a small business. They both oversee staff functions, daily operations and make sure the business runs smoothly day to day. The COO is detail-oriented, able to implement strategic plans using skillful tactics.

Chief Financial Officer (CFO). A CFO is responsible for setting financial goals and controlling budgets. He/she calculates how to spend the least money leading to the largest return. Of primary importance to the CFO is attention to the companys cash flow, the blood of every business. If the business owner does not want to carry a series of numbers to bed every night, hire a CFO to take care of the finances. In many small businesses, a part-time CFO fills this role.

Chief Marketing Officer (CMO). A companys success can heavily weigh on its marketing strategy. Therefore, the CMO plays a crucial role in the management team. A CMO should have a profound understanding of company products or services, as well as those of competitors. He/she is then able to precisely position the goods or services in the marketplace (knowing the right price), and effectively communicate product/service value to customers.

Everyone has different talents. An owner should focus on his/her strengths. Dont cling to the CEO position if you are a detail-oriented person and cannot rise above details. And dont hesitate to try out the CFO position if numbers come naturally to you and you have a proven record. Only when the right persons fit their roles, can an enterprise fully maximize its potential.

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Top 4 Uses for a Business Plan

Top Business Plan Uses from The Startup Garage

Top 4 Uses for a Business Plan

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At The Startup Garage, we’ve helped a wide variety of entrepreneurs who want a business plan to get their strategy together or raise money. We’ve also helped many who think they might need a business plan, but they don’t really know what they’ll use it for, other than “getting everything down on paper.” With them in mind, here are the Top 4 Uses of a business plan:

1. To Create a Complete Strategy: When starting a business, it is easy to focus on some aspects of the company and forget others, especially if you are very strong in one area but weak elsewhere. For example, if you’re experienced in marketing, but unfamiliar with manufacturing, oversights and missed details in the manufacturing process may result when launch time comes. However, when you write a complete business plan, you are forced to examine all areas of your business and build strong strategies in all areas, which will prepare you for successful execution when launching.

2. To Enroll Partners: Many entrepreneurs realize they won’t be able to succeed by themselves, and look for skilled partners to jointly build their business. However, this can be easier said than done. Most well-qualified entrepreneurs will have many questions that must be answered before signing on. You may or may not be prepared to answer all these questions. However, with a business plan in place, you’ll be able to communicate your high level vision, clearly articulate your strategy and show any potential partners where they fit into it all. Having this well prepared written document will also boost your credibility tremendously.

3. To Manage your Business: Unfortunately, there are a lot of entrepreneurs out there who write a business plan, launch their business, and put their plan in a drawer never to be seen again. However, once you launch, your business plan is still useful. Revisiting and updating your plan every few months will help you apply what you’ve learned through operations to your strategy, and stay focused on your high level goals.

4. To Raise Money: This is one of the most common reasons that entrepreneurs write a business plan- to get those scarce investment dollars from banks, angel investors, venture capitalists and others. While you may be certain that your business is going to change the world, these people see your business as an investment…one of numerous opportunities presented to them. Before betting on you, they want to learn as much as possible about your business. A business plan is an effective, and often required, tool that you can use to give investors all the information they need, and to demonstrate that you are a credible entrepreneur who is poised to succeed.

There are many businesses out there that have gotten started, and ended up succeeding, without writing a business plan. However, if you’re interested in maximizing your chances of success, a business plan is a great way to make that work. Also, if you’re interested in getting help from outsiders, such as partners or investors, a business plan is an essential tool for establishing credibility and getting them to believe in you and your business.

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4 Marketing Strategies for A Successful Launch

Marketing Strategies for Successful Launch from The Startup Garage

4 Marketing Strategies for A Successful Launch

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Many entrepreneurs pay major attention to their pre-launch stage and dont have solid plans for promoting the launch of their business. Launching a business is a quick process. But the impact of the launch can last. Therefore, entrepreneurs need to have solid marketing plans for a successful launch. The following 5 marketing strategies will create some buzz about your launch and even be a quick source of new customers.

Tap Your Network. You want to make an announcement that you are launching a business. And the most cost-effective way to convey your messages is through your social network. Your email contact list, facebook friends, and twitter followers are your free media sources. They are very powerful because they alone receive your messages and know you are launching a business, but their friends know also, if they forward your messages. Also, these people likely want to help you succeed.

Have A Launch Party or Event. A launch party or event can draw potential new customers and increase public exposure for your businesss brand name. At the party or event, you may provide attendants with food and entertainment – creating a relaxed environment where you can introduce your product/service and create buzz. You can also take pictures of your launch party and post them on social media sites to get more attention.

Alert the Press about Your Launch. Traditional press is still a very strong channel to send out information and this method is taught in online marketing degree programs all the time. You can make a public appearanceto a very large group of people through the press, and attract new customers. Besides paper press, you can also choose electronic press releases. Any media coverage about your launch can be advantageous.

Have a Giveaway or Introductory Offer. One of the best ways to let your customers know about your product/service is to give them an extra incentive to use it. Thus, a good giveaway trial or introductory offer will give your potential customers positive experience. If they like your product, they will continue using the product/service and tell others about your business.

A successful launch can have a positive effect on a business because it can quickly bring in enough customers, which generates cash flow right away. These launching marketing strategies enable you to maximize your business exposure to the right persons, and set up an initial customer base that has large growth potential. After your initial launch, dont forget to keep the buzz going with the marketing strategy you created in your business plan.

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Top 5 Things to Learn about Your Competition

5 Things About Competitors from The Startup Garage

Top 5 Things to Learn about Your Competition

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Every business has competition. To enter the competition with an ideal position and become an industry leader, an enterprise must constantly learn from its competitors. Companies that do so are more likely to succeed. The following tips about what should be learned from competitors may help you re-examine your learning list.

How Much They Charge. Price is crucial in competition because it is a primary positioning indicator. Prices place goods/services in different market segments. When the price is right, customers are willing to pay for the good/services value. But this ‘right’ price is a comparative term because it has to be right in both value reflection and price competition. When an entrepreneur knows his/her competitors prices, he can adjust his own accordingly. By reaching a balance between the number of customers and the price, he/she can maximize revenue.

What Their Main Value Proposition Is. Value proposition is the reason the customer should buy the product, as stated by the business (usually found on packaging or marketing materials). A product/service may have many features, but most important is communicating the correct feature combination to the customer’s needs and wants. It can be difficult to tell what these features are if you are a new company, but looking at existing companies value propositions can help you learn what customers desire.

Why Customers Like Them. Your competitors must be doing something right to attract enough customers, and may even build brand loyalty. They may be doing things you are not. Or, they may be doing the same things as you, but better. It is always necessary to learn from your customers proven ways of success, and see how they can be applied to your own business. A new business can gain advantage by implementing some of the same aspects that make competitors successful.

Why Customers Dislike Them. No business in the world can satisfy all needs and demands. Even leading businesses of their industries often have dissatisfied customers. The reasons could be prices, services, product quality, payment methods, ect. By learning and analyzing these unmet needs and demands, you can provide value to your potential customers. Finding a way to satisfy those market needs can be a huge advantage.

What Your Advantage Is against Them. A new business owners strategy should have some focus on rivalry and defeating the competition. Knowing your advantage over competitors gives you measurable methods and concrete ideas of how to enter the market at the position where you can outperform your rivals.

Getting to know your competition is critically important, and to learn it before you get into the market and launch your business. Writing a business plan is one of the most effective ways to analyze the competition. In the business planning process you will learn the details of your competition, and then be able to strategize accordingly. Planning enables you to position your product/service in the sweet spot and leverage your comparative advantage against your rivals, and gain lasting success. Once you launch, dont forget to monitor your competitors and continue to improve.

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Top 5 Things to Learn about Your Target Customers

Target Analysis Brand from The Startup Garage

Top 5 Things to Learn about Your Target Customers

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Understanding your customers is key to the success of a business. It is an entrepreneurs responsibility to learn his/her target customers well, send effective messages to the customers and effectively educate them on your products and services. The following 5 things are important to learn about your target customers.

What are they doing instead of using your products and services and why? It is important to understand why your potential customers buy/use other goods and services that they currently buy/use. There must be something different in other products/services that can better meet the customers needs, or at least the customer thinks so. Through the learning of these factors that make a difference, you can gain better understanding of changing trend of customers needs and demands.

What are the reasons they buy? There must be something that hits them right and convinces them to buy a certain product or service when there are a variety of competing products. It can be price, convenience, style, experience, etc. But, some features tend to be more important to consumers than others. Find these factors and develop them to a higher level in your products or services. This could help your business stand out and acquire more customers.

What do they think of your goods or services? What you think of your own products and services does not necessarily reflect the true opinions of the customers. An entrepreneur should always understand his/her customers feedback. It is also easier than ever to get with websites like Yelp or online surveys that effect your target market. Before you launch, try to get as much feedback as you can from potential customers to make sure you meet their needs.

Learn their characteristics and habits: This is important because your customers working habits and working policies affect your business. For example, a San Jose massage business targets local computer engineers who have a high stress job. By learning their working habits, the business owner knows that it will be more efficient to do online marketing on certain sites which those engineers often visit. Also, the business owner can learn different companies welfare programs, and apply those programs to his/her discount campaign.

Know their buying channels: People tend to make purchases in the way they feel most comfortable. As closing/conversion is a very important part in the business process, an entrepreneur should spare no efforts to find out his/her target customers comfortable buying channels. These channels could be in-store, online, referral, free sample trial, group purchase, etc. The best channels are generally easy to find based on where existing companies already make their sales.

Learning about your customers is crucial. A business plan is a very effective way to analyze the current market, find out customers likes and dislikes, and compare your products/services with those of your competitors. With that information, you can more easily build a startup strategy that will meet your customers needs.

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Types of Insurance for Startups to Consider

Business Insurance Options from The Startup Garage

Types of Insurance for Startups to Consider

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Small businesses are exposed to various risks. Many small businesses are in the form of sole proprietorship and partnership. This largely increases the cost the owners have to take when accidents happen. Therefore, before a small business is launched, its owner should minimize the risk by covering his/her enterprise with insurance, and he/she should consider the following insurance. With most startups, budgets are tight, and the risk of an accident can vary. Weigh the costs and benefits with a lawyer and insurance agent when making this decision.

Business Liability Insurance. It is an insurance that protects a business owner when he/she gets into a lawsuit or a third-party claim, and it also covers the legal costs. So, when your business is sued for personal injury or property damage, business liability insurance can protect your business and you from financial ruin. Business liability insurance includes mainly three forms: general liability insurance, professional liability insurance, and product liability insurance.

Commercial Property Insurance. It is an insurance that covers things related to the loss and damage of commercial property caused by events such as fire, natural disasters, and vandalism. If your business is in an unfriendly neighborhood or a place that is not far away from natural disasters, you might need to consider this type of insurance.

Business Disability Insurance. It is hard to imagine when you are running the majority of your business operations, and you have to stop working due to sudden injury or health issue. These unfortunate things could cause devastating effects on both your personal life and your business. At this hard time, business disable insurance can replace your income in the event of accident and health issue.

One should never expect that accidents could never happen to them. In fact, small businesses nowadays are exposed to more and more risks. Even a seemingly small accident can bring major change to your business. Fortunately, most of these risks are foreseeable and are covered by todays insurance. As a sophisticated entrepreneur, one should always think ahead to mitigate the risks, and some of these types of insurance may be an effective way to do so.

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