Monthly Archives: November 2011

5 Parts of Your Customer Interaction to Consider

Points of Customer Interaction from The Startup Garage

5 Parts of Your Customer Interaction to Consider

There are five key factors to consider when formulating your company’s interaction with its customers (marketing, sales, product, customer service/product support, and resale). By carefully considering these aspects in your business plan and business planning processes, you will be one step closer to successfully managing these areas of your business.

Marketing. If you consider the original meaning of the word, marketing literally meant ‘going to the market to buy or sell products/services.’ From that, we understand marketing to be a proactive step. If you are ‘going to the market to…’, you have to know the market (who, what, where? etc) you’re selling to and or buying from. Marketing is a tool for understanding the perceived needs and wants of the customer, ultimately selling your product and/or service to them. It’s the means whereby you portray your company, product and/or service’s value to your customers. Effective marketing will allow a company to identify, satisfy and maintain customers. All businesses, large and small, rely on marketing to grow their company.
Several types of marketing exist. Social marketing focuses on societal benefits of products or services. Online or digital marketing refers to that done via the internet such as email, blogs, Facebook, Google, etc.
Marketing answers the question, “What do I want my product/service to convey or be to the customer?” And, “How do I want to get that message across to the customer?”

Sales. Sales and marketing will often be sandwiched together for a few reasons. One, company’s pursue marketing strategies in order to generate more sales. Marketing creates buzz, or the desire for a product/service. In addition to marketing, several factors regarding the actual sale of the product/service must be considered. The customer’s buying experience, or how the product/service was sold to the customer, is important. You must decide what type of selling channels your company will employ – direct selling, online, storefront, etc.
The process of purchasing the item/service puts a lasting impression in the customer’s mind. This has to do with customer service. Several questions can and should be answered in this regard. One, ‘did everything go smoothly during the customer’s transaction?’ Two, ‘did the customer leave satisfied with the purchase?’
Additionally, regular monitoring of sales channels (online, storefront, etc.) is also important. Determination of sales percentages coming from each channel allows the marketing efforts to be adjusted. For example, if most of your sales are generated online, through the company website for example, greater resource allocation to online marketing may be a smart move.

Product. Obviously, the quality of the product is essential.But, product positioning makes all the difference. If you want to use the cheapest materials to keep costs to a minimum while marketing (or positioning) the product in the high end, high quality segment, you are likely to have many dissatisfied customers whose high expectations for quality and reliability were toppled.Had the cheaply made product been positioned properly, in the low cost/low quality segment, customers would have had lower expectations.If the product broke down, the customer may have thought, “Well, I payed a lot less for the item, I got some good use out of it and did not expect it to last as long as it did.”Much of your ‘customer interaction’ has to do with expectations.

One successful strategy but difficult to achieve is to make a product inexpensively, but market it in such a way that you convey your product as superior to that of competitors. This is often done by convincing consumers that ‘this product will make me run faster’ or ‘make me cool’. If the positioning is done well enough, the product could be priced much higher than competing products which may be of better quality.

Customer Service/Product Support. One of the best ways to establish a better position for your product or service is to have a level of customer service and support that customers actually talk to their friends about. If your product is not very reliable but your customer service and support is excellent, the strength of your overall business improves because most customers recognize and appreciate good customer service.

Make it a point that all of your staff have the customer’s interest at the forefront of their mind. Training your employees to always be thinking of ways to meet customer needs – whether that is answering questions, fixing a problem, helping the customer feel satisfied and happy – does not cost much to implement yet pays large dividends for the business and for employee satisfaction.

Ideally, there are two parts to address when interacting with a customer for product/service support: #1 fix the problem and #2 make sure the deeper issue of what caused is resolved.

Resale. In order for this last factor to be effective, the previous four much also be successfully implemented. With most large, successful businesses, the incremental growth of repeat customers is essential. Companies achieve repeat customers by positioning their product well, selling their products/services through the proper channels and offering stellar product and customer support

The five parts of customer interaction that we have identified are entirely interrelated. Without effective marketing, sales would not be maximized. Without a well-positioned product, factors such as ineffective marketing, less sales, poor customer service and product re-sale may result. By incorporating these aspects of customer interaction into your business plan and business planning processes, you will will be one step closer to successfully managing these areas of your business.

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Top 5 Questions to Consider When Building A Management Team

Consider Management Team from The Startup Garage

Top 5 Questions to Consider When Building A Management Team

Before brining on a new manager, ask yourself the following questions:

1. Does the person fit into the company’s culture? Company culture is basically defined as the values and practices shared by the company’s employees. A company’s culture should be aligned to its business goals and therefore, the management team should also be aligned with this culture in order for a mutually beneficial and productive relationship.

2. Does the person know the industry? Experience is one of the most valuable assets that a manager can possess as it enriches his/her judgment and enables him/her to make strategic decisions. Management, to a very large degree, is about making decisions. Therefore, a person who knows the industry well tends to lead the company on the right track towards success.

3. Does the person have a skill that the other team members do not? An entrepreneur should avoid surrounding him/herself with people of similar skillsets and backgrounds. A team should have similar values but comprehensive skills. In order to select the right talents, you must first be honest with yourself about your own strengths and weaknesses.

4. Is the person in it for the long haul? Adapting to a new environment and system can take many months, especially in a management level position. High turnover amongst management can be very costly and dangerous towards maintaining stability, culture and competitive advantages. Be sure to hire people that are looking to grow and stay with the company for the long run. Additionally, be sure you provide the right support and resources necessary to ensure your management team continually sees value in working for you and your company.

5. Is he/she a person of integrity? Integrity should be at the core of every business. It is a crucial and essential characteristic for the long term development and growth. When looking for people to manage your company, maintain client/customer relationships and oversee your company’s products/services, be sure to find someone who you trust and who can represent the company with integrity.

Entrepreneurs and business owners should incorporate their organizational chart, management roles, hiring strategy and core values into their business plan based on the considerations mentioned above. By planning and articulating a company’s management strategy, entrepreneurs and business owners are already one step closer towards hiring managers that fit the company’s culture, know the industry, have diverse skill sets, are in it for the long run and honor integrity.

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Startup Funding by the Numbers

Startup Funding by Numbers from The Startup Garage

Startup Funding by the Numbers

In most cases, startup capital is key for the success of a small business startup. As we have demonstrated in previous blog posts, there are many financing options available to entrepreneurs when raising funds. The type of funding a startup should pursue varies from company to company and depends on what stage the company is in.

The info-graphic below identifies the various types of funding available to entrepreneurs as well as a timeline for when entrepreneurs generally seek out each type. The infographic also provides fundraising trends and examples of well known companies,primarily in regard to funds that come from venture capital (VC) and initial public offerings (IPO).

The financial section of any startup business plan should include a fundraising strategy that details the various types of funds the company will pursue as well as the timeline and amount to be raised from each source.

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Three Types of Entrepreneurs

Three Types of Entrepreneur from The Startup Garage

Three Types of Entrepreneurs

The word entrepreneur is derived from French and literally means, one who undertakes. With that in mind, entrepreneurs undertake a considerable amount of initiative and risk when launching a new business venture. Some are successful, but many will fail. Nonetheless, all entrepreneurs share the same driving spirit that has led them to undertake their dream of starting their own business. Though they may all have the same entrepreneurial spirit, we identify three types of individuals that embark on the startup process.

The Social Entrepreneur is motivated to transform the world into a better place to live. He/she does not accept status quo and seeks to actively improve environmental, educational, social and economic conditions. Rather than being driven by the desire for profits, social entrepreneurs are usually aimed at improving the quality of goods and services while contributing back to the community and society.

The Serial Entrepreneur continuously comes up with new ideas and starts new businesses. He/she can easily duplicate his/her previous successful business model, or follow his/her experience to realize a new idea. Serial entrepreneurs are willing to take risks in new fields and are likely to experience repeat entrepreneurial success.

The Lifestyle Entrepreneur combines their interests and expertise into a business model that allows them to make a living. Unlike other entrepreneurs who grow their businesses and aim for high return upon exiting or selling their business, lifestyle entrepreneurs are truly passionate about their professions and choose a business model that can sustain long-term development. They place their passion before profits, integrate their interests into their business and possess high expertise to yield breakthroughs in their respective fields.

People usually connect the term entrepreneur with the desire for money. However, this stereotype does not fully describe all of the forces that motivate entrepreneurs. While all entrepreneurs take risks to achieve success, their respective definitions of success differ based on their goals, personal beliefs, interests, values, etc. A business plan portrays and entrepreneurs goals while formulating a clear strategy for achieving these goals.

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How to Set Business Goals

Set Goals for Business from The Startup Garage

How to Set Business Goals

business plan. The following tips can give you some insights into the things you need to consider while setting business goals.

– Determine your long term goals first. Your long term goals should be aligned with your mission statement in your business plan. They are the reflections of the reason why your business was founded. Entrepreneurs can categorize these goals into three general fields such as service, profit, and growth. You can visualize these goals by assigning measurable metrics and terms such as the percentage of profit growth, the number of employees and the amount of service/money your give back to the community.

– After figuring out your long term business goals, it is time to turn your attention to the short term business goals. These short term goals are set to accomplish your long term goals and they need to be specific, measurable, action-oriented, realistic and timely.

  • Specific: Concrete numbers and detailed descriptions will efficiently guide you to accomplish daily jobs and keep up your speed in completing projects.
  • Measurable: Figures, values and other measureable outcomes give you the indication of what whether you are reaching your goals.
  • Action-Oriented: Action items and schedules need to be defined for each goal and will yield more efficient results.
  • Realistic: Your short term goals should be rational and achievable yet challenging.
  • Timely: A goal is not a goal unless you commit to by when it will be accomplished.

Entrepreneurs should check their short term goals very often to make sure that they are hitting these targets on time and adjust appropriately if they are not. They should also go back to their long term goals periodically to ensure that their short term goals are still aligned with their long term strategy. Lastly, be sure to articulate your long and short term business goals in a business plan for efficient implementation.

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Tips to Bootstrapping Your Business

Bootstrapping Capital Raising Strategy from The Startup Garage

Tips to Bootstrapping Your Business

Bootstrapping is defined as the act of funding a startup by means of personal finances. This means using personal savings, credit cards, early cash flow, and frugal initial spending. Here are some quick tips to help you pinch pennies and ensure the success of your business.

1. Understand Your Business Idea

Knowing precisely what problem your product or service can solve will take you a long way. Writing a solid and meaningful mission statement on the purpose of your company will serve as the foundation for every action taken leading up to the launch of the company. Know your product, its intention, and its target market. One of the best ways to understand all aspects of your business strategy is to write a business plan.

2. Minimize Early Costs

Many young entrepreneurs dream big, like a spacious office on the top floor of a high-rise kind of big. But when youre just starting out, its important to minimize costs so you can work your way up to those dreams. Take little steps today to train for big steps tomorrow.

One of the main expenses startups face is office rent. By working out of home, you can save a lot of money and take the opportunity cost of renting office space to spend in the businesses itself. If office space is a necessity, try sharing an office in a commercial building to lower your rent costs. When shopping for supplies, like an office printer, look to buy used rather than new.

3. Form Relationships and Partnerships

Following from above, form relationships with other businesses. Borrowing, bartering, and trading with other businesses will not only help you minimize early costs, but will help to establish relationships that can help refer, promote, and market your business. And dont forget to return favors people only do business with people they like!

4. Reinvest Profits

Make sure that before the launch of your company, you have enough personal finances built up to cover your needs for at least 3 months because the business will be using its profits to reinvest in itself. The first few months to first few years of a business will be where the major growth happens and in order to grow, you will need funds. Plan on reinvesting profits several times, or you risk the business remaining stagnant – or worse, backtracking.

5. Use Friends and Family as Your Beta Testers

Before launching your company, it is a good idea to test the market, and who better than your own friends and family? Not only will you learn about their level of interest in the product or service, but you can survey the range of how much they would deliberate paying for it. You can understand how they would use it, what features they liked and disliked, and make the necessary adjustments before releasing it to the public.

6. Work with a Small Team

Having a large team means having to pay a lot of cash for their salaries. Try and only hire as many people as you absolutely need – give each member various job functions and roles until it is necessary to add another associate to the team. If cash isnt readily available for a new hire, try to add other incentives like stock.

7. Be Passionate About Your Job

Starting your own business is not an easy task, but if you are passionate about your product or service, it will give you the motivation to work hard to ensure success. Your time and effort will be constantly utilized for the business, so make sure it is something you have no problems spending long days and nights working on. And, as Steve Jobs once said, the only way to do great work is to love what you do

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5 Ways to Increase Landing Page Conversion

Landing Page Optimization from The Startup Garage

5 Ways to Increase Landing Page Conversion

Trying to maintain high web visibility is difficult. Trying to gain high levels of conversions once you have high web visibility is even harder. For any business to succeed, they need to have a high conversion rate which isn’t always easy considering that they only have a few seconds to capture a visitor’s attention.

If you are finding that your business’ site is struggling with conversions, ask yourself if your site contains all of the following elements:

Important Content in Plain Site

If your visitor is resorted to searching for contact information, you will most likely lose your conversion. You don’t want to force your visitors to have to scour the internet for the information they need. Instead, you want to make sure that it is front and center so that it is not only easy to find on a desktop, but also on a mobile web browser.


Don’t overwhelm your visitors with a ton of tabs, pages, photos, and content. Try to keep your landing page as simple as possible and with easy and comfortable navigation features. This will allow visitors to find the information they want and need more easily which will increase the likelihood of a conversion.

Make Every Word Count

Because site visitors typically only spend a few seconds on a webpage, you need to make sure that every visible word counts. If you have a title or header, make sure to briefly explain what other information that page may make available. You need to provide as much information as possible in as little time as possible which means making every word count.


Visitors are never going to understand why they need your product or service unless you tell them, and they are never going to feel as if they need it right then, unless you make them feel like so. Make sure that your few words used on the site convey a sense of urgency so that you are more likely to increase conversion rates.

Remember Mobile

More and more internet users are starting to browse the internet through their smartphones. If you want to increase your conversion rates, then your business site needs to be mobile friendly. Make sure that the site and the information you want to see first is able to pull up on multiple mobile web browsers so that visitors are more likely to stay on your site.?

If your site doesn’t contain any of the above elements, that could be what is keeping you from high conversion rates. Sites that take too long to load or are difficult to navigate are often frustrating or overwhelming to visitors, which will have them clicking the back button quicker than you can think about it. If you want to increase your conversion rates, make your site more simple and give your users easy access to the information they want at all times.

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Financing Options

Financing Options Business Planning from The Startup Garage

Financing Options

Entrepreneurs have many options when raising funds for their startup including debt, equity and/or other types of financing. When it comes to deciding what type of funding to go after, there are no right answers. Every entrepreneur must determine what type of financing is right for them and their business. Some questions to help you make this decision include:

– Are your needs short or long term?

– How quickly will you be able to pay back the loan or provide return on the investment?

– Is the money for operating expenses or capital expenditures (items that will become assets)?

– Do you need the money upfront or in smaller pieces over time?

– Are you willing to assume all of the risk if the business does not success, or would you like to share this risk with investors?

Answering these questions can help you determine what type of financing is right for you. In this article, we introduce the various types of financing available to entrepreneurs and some of the advantages and disadvantages of each.

Debt Financing. For a startup business, debt usually comes from banks, microloan programs, private lending, personal credit cards or friends and family.

For bank loans, you borrow money with an agreement to pay it back at a pre-determined time frame and interest rate. While you maintain full ownership of your company with a bank loan, you are liable to pay back the loan regardless of whether your venture succeeds or not. These loans are often backed by assets or third-party guarantors.

Microloans are very similar to bank loans, however, they tend to loan lower amounts and usually provide a more competitive interest rate.

Private lending is a good alternative when banks are unwilling to provide a loan. Private lenders terms are similar to banks, however, they usually specialize in a specific industry and are more willing to take on higher-risk loans.

Though we do not recommend using credit cards for long term financing, they are a great tool for cash flow management. It is important to pay off your balance at the end of every month to avoid high interest rates and digging your company into a pile of debt. If managed correctly, credit cards can be some of the cheapest money around. However, if managed poorly, they can be some of the most expensive forms of funding.

Lastly, friends and family can be a great source of funding for your small business. They are typically less rigid regarding your credit history and loan terms. Nonetheless, we still recommend structuring the deal with the same legal thoroughness that you would with any other lender to avoid problems down the road.

Equity Financing. If you decide to pursue equity financing, there are angel investors, venture capital firms and friends and family. With equity financing, you sell partial ownership of your company in exchange for cash. In this scenario, the investor assumes most of the risk for if the company fails, they lose their money and you do not owe them their losses. However, if the company succeeds, equity investors generally receive a much better return on their investment than the interest rates a bank would receive on the same amount of cash. Furthermore, as equity investors take on a much higher risk than lenders, they typically want to be involved with the company on an advisory level. This can be a blessing and a curse. Many entrepreneurs relish the opportunity to gain guidance and support from seasoned professionals. However, investors interests may not be aligned with yours so it is important to not give up too much control of your company when passing out equity.

The type of equity investor you approach depends heavily on the amount of money you need, the stage of the business you are at, the industry you are in and the growth potential of your company.

Similar to debt equity, friends and family can be a great source of equity funding for your business. Rather than agreeing to a payment plan and interest rate, you agree to a percentage of equity.

Angel investors work in the same way, however, they are usually considered to be a step up from friends and family in terms of sophistication and investment amount. They usually invest in sectors that they have a personal interest in and rarely look at investment below $1 million.

Venture capital firms are professional investment organizations that invest in growing businesses knowing that some of their investments may not be successful but are able to take that risk because their return is so large. Venture capitalists will generally want a large percent of equity in exchange for their cash and as a result, the option to exert a significant amount of control.

Other Financing Methods. There are other methods of raising money including crowdfunding and grants.

Thanks to social media and other internet based technology, entrepreneurs are able to leverage their networks of friends, colleagues and like-minded individuals to gain funding through crowdfunding websites. Typically, entrepreneurs post a request for funding on a crowdfunding site, such as , with a description of their project or company and what they tend to spend the money on. Depending on the site, funding may come as a donation or a loan. Crowdfunding is not for everyone. It is generally successful for entrepreneurs with a compelling story or project that has universal appeal.

Another source of funding comes from grants. However, grants are extremely rare for for-profit businesses and we usually recommend against pursuing this strategy.

Despite the tough economic environment there are still ways to raise money in this day and age if you have a good business that is also a good investment. No matter what method of financing you chose, we recommend that you put together a professional business plan and speak with a trusted financial adviser.

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Four Common Startup Marketing Mistakes

Common Marketing Mistakes from The Startup Garage

Four Common Startup Marketing Mistakes

First time startup owners are usually professionals in the field of their product and/or service. However, they are likely beginners in marketing their product or service. To achieve your marketing goals of growing your business, you need to avoid making the following four mistakes.

Entering the market without research. Many first time entrepreneurs fail to properly identify their industry, competitors and target market because their market understanding is based on passionate guesses rather than informative research. It is necessary to collect data and factual information that supports your strategic decisions. You need to research your industry, competition and target marker in order to create an effective marketing strategy.

Spending heavily to get new customers. The most direct way to generate sales is to get new customers. However, the cost of getting new customers can be very expensive. You may be able to persuade existing customers to purchase more of your product/service or with a higher markup by utilizing those marketing dollars to offer more value to existing customers.

Ignoring online marketing. Online marketing is playing a more and more important role in small businesses. It provides cost-effective marketing methods that are wide-reaching, readily available and easily measurable. If you spend a lot of money renting ads in newspapers, you probably need to explore different online marketing tools.

Neglecting to measure marketing metrics. Results and feedback are crucial to measuring the success of your marketing strategy. By developing and tracking your marketing metrics, you are able to continually adjust and revise this strategy to improve the yield of your marketing dollars.

First time entrepreneurs should have a marketing plan or business plan that is tailored to his/her business before they launch. When running their businesses, they should continually look back at their plan, checking their strategies and revising them according to their metrics. Developing a system for tracking their metrics and adjusting their strategies will allow entrepreneurs to become experienced marketers in addition to already being experts in their field.

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