Sustainable Business Intro

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Free Introduction to a workbook series and mentoring program on small business startup

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Sustainable Business Intro

  1. 1. A Guide to Starting A Sustainable Business IntroductionShort-Order Marketing (SOMA LLC) / Matthews, NC 20104 /704.542.9104 www.SOMALLC.com www.LinkedIn.com/company/Short-Order-Marketing Copyright 2011 4th Edition 1
  2. 2. Introduction – FREE Download What is a Sustainable business? The Cube Business Model - The inter-related nature of the 4 parts of a business How to find a business that’s right for you Why should you invest in our startup course?Our Goals for creating this series:To provide people with an easy to use primer for starting a sustainable small business. Anyone in thiscountry who wants to own their own business has a right to do that. But, 9 out of 10 start-ups fail toreach financial sustainability. The most common cause for a business failing is running out of what littlecapital they had without acquiring enough customers to keep the business going. It’s not exactlyundercapitalization; it’s not acquiring enough customers. People spend too much time and energy racingaround in circles. Our personal experience tells us that what they need is a simple, practical plan thatwill help them move from point A to B to C. This series is intended to be a guide for that plan. It is basedon our own successes and failures. It’s been tested and improved under fire.Our primary Strategies:Introduce the reader to the basic elements that make up a business.Explain how these elements work together to create a functioning business.Have reader apply this information to the task of organizing and launching their own business.Help the reader achieve financial sustainability by providing access to continued mentoring support.Series content:Section 1 – Section 2 – Section 3 - Section 4 -Finance People Operations MarketingBasic Accounting – Sharing the WHY - Legal / Protection - Creating a MarketingEvery business owner Being able to clearly Legal aspects of forming System –needs to know how to articulate why you are a business: Business Identifying the basicread a Cash Flow / in business is critical to forms, agreements, strategies and tools youIncome /P&L enrolling anyone licenses. will need to launch yourStatement. What are touched by it. Building Insurances: Protecting business.these things? What info relationships at many the business andis included? What will it levels will make the job yourself.help me do? easier.Boot Strapping – Effective Leadership - Organization – How to sell yourself,Where and how to find The ability to move Understanding and your products & ideas –capital for your yourself and those using basic task analysis Writing, presenting, &business. Working with touched by your & management tools to communicating isother people’s money. business towards keep things on track. critical to moving fromPay as you go strategy defined goals is what idea into action.for start-up. will get you where you want to be.Build Financial Identifying important Creating a M.A.P. – New Media Basics –ProForma - people – Where are you going Traditional marketingA practical guide to Perspective customers, and how are you has been overcome bygoals and check points. Vendors, people of planning to get there? technology. There are influence. new was to reach out. 2
  3. 3. What is a Sustainable Business?The majority of small businesses in operation across this country, and indeed around the globe,are intended by the owners, to be “sustainable” businesses. These endeavors provide theowners and their immediate families with an income equal to their financial needs. They don’ttake in more than they can use and don’t put out much more. They are sustainable in thefinancial environment. That’s not to say that people who start their own businesses are notambitious. The dream of owning a “gold mine” capable of generating wealth is a part of almosteveryone’s dreams but, getting to a dependable and sustainable place should be a first priority.Once stability has been achieved the business can be grow to the next level.Small Businesses are human systems not organizational structures.Because of their size, small businesses need to pool and share limited resources. Even moreimportant, they must hold and support a common vision and approach to delivering theirproducts and services to their selected markets. The people involved in a small business mustall pull together, in synergistic fashion, instead of claiming and defending turf.People who are part of large corporations that operate under a traditional hierarchicalorganizational model do not need to take into consideration the inter-related nature of the fourprimary parts of a business - Marketing, Finance, Operations, and People. Their point ofreference is centered on the part of the business they have been hired to work in. To them, thepart of the business they are involved in is often viewed as the most important part of thebusiness. This perspective is referred to a “Silo-ing”.The four parts encompass the basic functions of any business. Marketing includes all activitiesinvolved in communicating what a company sells. This covers marketing planning, promotion,communications, and sales. Finances included everything that has to do with managing money– money coming in or money going out. Operations includes everything that has to do withdelivering products or services to the customer – production, physical plant, even the companystructure. Last is the People aspect of the business. Thousands of people are touched by anyone business. There are employees and their families as well as the owner and his family.Customers, suppliers, vendors, bankers, shareholders and stakeholders are all touched bybusinesses.Once the owner and the people involved in running a small business, grasp the inter-relatednature of these four elements they can appreciate how any activity in one area has a directimpact the other three. For example, good marketing puts greater demands on operations,finance and the people involved in the business. Bad financial management inhibits the otherthree elements by depriving them of the fuel (money) they need to keep going.Small businesses are most successful when they are run from a team perspective. The game theteam plays is to have the customer feel good about doing business with the company. Thecustomer must be satisfied with the quality and cost of the products and services theypurchase. If the owner can learn to see his or her business this way and can instill thisperspective in all the people who become involved in the business it has a thousand-fold better 3
  4. 4. chance of becoming successful. Remember: All the team members are involved in the samegame and any one of them can hit a home run.So what does a small business look like if an org chart is not an accurate picture? After years ofworking with small business owners we have come to use a cube as a visual representation ofwhat a small business looks like. The cube has four sides which represent the four functionalelements of a business: Marketing, Finance, Operations and People. The owner represents thebase of the cube, the foundation and source of the vision for the company.This cube is capable of holding the energy, time, money and commitment that is invested in thebusiness. But like a real box the sides of the small business cube must meet and seal at thecorners or the things that get put into the cube can leak out and be wasted.What gets put into the box?Business owners will end up putting the most valuable things they have into the box like: Time /Money / Energy / and Personal Commitment. If the elements of the box don’t form a tight bondwhere they meet in the corners then they leak. Owners are confronted with a business that isnot retaining what’s being invested. If the skills needed in any one of the basic functional areasare weak it will eventually begin to hamper the growth of the business. 4
  5. 5. How to find a business that’s right for you.The six issues that keep people from getting into business.1. What can I do about Information Overload? There is so much information available, from so many sources that the overload creates a paralysis of the mind. “Who should I believe? / Who should I model after? / This group tell me one thing –another tells me something different / The government groups tell me I have to write a business plan but I don’t understand what the parts mean or what I should say or where I can go to get this information.A You need to follow life’s “Golden Rule” – Keep it simple (K.I.S.) I won’t add the derogator reference because in today’s complex world things rarely look simple to anyone. But, simple is the answer. Your most important issues are about defining your company’s VISION (WHY it exists? / What problems are you set up to solve? / Who are you going in business to help?) Then you need a basic Action Plan that addresses the four primary parts of your business (Marketing / Finance / Operations /People)2. How do I find the help I need around the things I don’t know how to do myself? There are so many specialized skills needed to build a business. You are either a technologist who knows how to do the work or you may be a marketing person who knows how to sell the work, but you’re probably not both. Add to this the financial, legal and operational controls you need to put into place and you have a real need to develop a team.A Keep your team (and your business) as virtual as you can. There are literally thousands of resources to work with locally or via the internet. They can be engaged on an as needed basis and because they are part of the 17 million home-based businesses in operation in this country they are often available for a low hourly cost.3. Where can I get the money to get things started? We hear this all the time. “I need $XXX dollars before I can even think of starting up the business.” Most people don’t realize that the majority of micro- businesses are started for between $5 – 10K in funding. If I was to offer you $100,000 in capital under the condition that you had to give me $5,000 I’ll bet you could / would find that money someplace – even if it comes a couple hundred here, a thousand there.A You need to strip away any unnecessary outlays of cash not absolutely required. Then, re- engineer processes to bring in cash as soon as possible. But, the most important thing you must do is BE CONFIDENT in your vision, your plan, and yourself. An entrepreneur is not afraid to extend himself or to take risks because he or she believes in what they are doing and in why their target audience wants what they have to sell. You would have no problem asking for that $5,000 if you believed that the $100,000 was readily available. Well, it is if you believe it. 5
  6. 6. 4. How do find the time to work on this right now? It’s not unusual for people who have a regular day job to have a desire to start a business. What is unusual is for them not to get caught up in a thousand and one excuses why they can’t find the time to work on the activities needed to get the business going. “After I finish working my regular job I need to take time to relax.” “I have a wife and kids that I have to deal with.” “There’s a lot of stuff I need to take care of.”A. Cut the crap. I’m sorry if I’m getting blunt, but if it’s not worth putting in the extra hours then you really should just relax about working for others and learn to enjoy collecting a pay check. There’s nothing wrong at all with recognizing that you’re not really interested or committed to getting past whatever circumstances seem to be in your way. When entrepreneurs say they spend 80 to 100 hours a week getting the business off the ground they are not kidding. I’m typing this at 11pm on a Saturday night after taking some time to relax and watch TV.5. How do I overcome the paralysis that comes from the feeling that I might fail? Thinking you might fail – the false belief that you might fail – as opposed to knowing you will fail is a conversation many business owners have at some time or another. The problem comes from a lack of self confidence in your idea and yourself. But, it also comes from the knowledge that 99% of all successful entrepreneurs have experienced moderate to serious problems including outright failure.A The answer to this question is not an easy one. The knowledge that the majority of entrepreneurs experience some level of failure is not an easy one to deal with until you’ve experienced it for yourself. I have started and stopped a dozen ventures over the last 16 years. The primary reason for shutting them down was that they didn’t seem to be going anywhere and I didn’t want to fail. I would shut them down before I got into real trouble. My current business Short-Order Marketing has been built on the ashes of a prior failure that took me through personal and business bankruptcy. I don’t recommend that anyone should be flippant about bankruptcy but it isn’t as terrible as your mind can make it out to be. It is a business/legal process that recognizes that some ideas don’t work out the way you planned. I did not experience any rancor or harsh treatment. And, I learned a lot about why it happened and what to avoid on the road back to building a sound business. The great thing about the USA is we are big enough and wealthy enough as a nation to not punish people for trying. If we did that we’d hamstring the great potential our entrepreneurial efforts deliver to the country in the way of new jobs and innovation.6. With all these issues and details to take care of where do I start?A This is one of the most common questions I get asked by beginners. The simple answer is to start with your VISION – What are you out to do? What problems are you out to solve? Who has these problems and are they willing to pay to resolve them? Once you have a clear handle on the answers to these three questions you have a starting point. The next question is: What skills and knowledge do I have that will enable me to deliver on my promise to solve these problems for my customers? Once you have the skills and passion identified get busy letting your prospects know about what you have to offer. Test your action plan, refine it and keep moving forward. 6
  7. 7. Where do you look for business ideas?Ideas can come from anyplace. The best ones come from recognizing an opportunity and aneed that is expressed by a defined group of consumers.Services needed by othersThere are thousands of business opportunities that reveal themselves to people every day, fewpeople recognize them. Often an opportunity is hidden inside a complaint. The established wayof doing things aren’t addressing the needs of select audiences. I once overheard severalneighborhood grocery store owners complaining that the produce distributors in town refusedto make short load deliveries. Someone with a van or small truck could provide deliveryservices, catering just to these small retailers.EntertainmentProviding entertainment for others has been a part of life since the Greeks formalizedwandering bands of players into the legitimate theater. If you have an interest in clowning itcould become an easy way to make a few dollars doing children’s parties and special events. Ionce ran into a married couple that lived in a beautiful 28 ft. travel home. They made a fineliving doing shows and selling the hand-puppets they used. They traveled to state and local fairsacross the north-east in the summer and spent the winter in Key West performing and selling atthe flea-markets.Marketing others productsFrom working out of a store-front to doing home parties there are many ways and kinds ofproducts, made by others, you can offer to eager customers. Convenience is the watch-word.The huge growth of catalog sales and Internet shopping shows us that people don’t have timeto shop. The success of specialty stores illustrates the demand for “niche” products. I met somefolks who sold gourmet hot cocoa gift baskets out of a small kiosk in a busy mall. Not only didthey make a tidy living but also became a recognized wholesale / distributor because of theirpurchase volume.Repair servicesWhen things break you can trash it, replace it, or fix it. As more people invest in higher qualityproducts it becomes less expensive to fix it than replace it and the need for repair servicesgrows. In the Chicago area a small company will come to your company’s parking lot and do anoil change, tune-up, repair, or clean your car and fill the your gas tank while you’re working.New inventions / Product improvements / New technologiesPeople who design and engineer new inventions are often not very interested in building abusiness around the product. This provides an interesting opportunity to partner-up and bring anew product to market. Sometimes older inventors will help a young business owner who has agood plan and the drive and energy to make things happen; a win-win situation for everyone.Extension of hobbies / Personal interests 7
  8. 8. All types of people have had their hobbies turned into a business by customers that spread theword and keep coming back for more. From fishing lures to hand-carved decoys, from clay togold the variety is endless. I recently saw a profile of an 80 year old woman that lives just off anArizona highway. She sells the thousands of hub caps she’s collected over the years.Picking your customers.You want to intimately understand your market: the problems they have and the language theyspeak. The greater your level of understanding the more magnetic you will become. There aretwo types of information you collect from and about prospects:DemographicsFactual information that helps define a picture of your prime and secondary prospects. Thisincludes but is not restricted to: Age, Sex, Education, Type of work they do, Income, Where theylive, Family status.PsychographicsInformation about what motivates your prospect and defines their emotional and intellectualself. This perspective will enable you to communicate in a way that gets your prospectsattention and moves them into active participation with your message. This includes, but is notrestricted to: social attitude, self-image, need to feel accepted, sense of independence, thesources of their frustrations with life. – 8
  9. 9. Determining if its a sound business opportunity.A Market in Need versus An Idea in Search of a CustomerAll too often people will get an idea for a product or service that comes out of a personalperspective, a kind of "what I think the world needs is..." This is not a very practical approachto selecting a business that you expect to support you and possibly your family. As you surveythe economic horizon you need to tune-in to what others, large groups of others, are lookingfor.Selecting what it is you are going to offer is the second part of marketing basics. Too oftenpeople decide to build their businesses on products or services taken from their personalexperience. The business is a reflection of what they personally see as "the need in themarketplace". This places you in the position of being a service or having a product in search of 9
  10. 10. a customer. Greater potential is found in first discovering what the marketplace needs and thenbecoming a source for that product or service.You are not in business for yourself - you are in business for your customer!Once you have identified what the marketplace wants, the product or service you provide mustbe the absolute best you are capable of producing or providing. No matter what you decide tosell, there are always other sources or alternative products to yours. Building and maintaining asuperiority will give you a competitive edge you can trade on. This is critical to the success ofany business. Because of our limited resources, we must take greater care to be sure wedeliver, at the very least, exactly what we said we would.Surveying the marketplace By analyzing market segments you can: Identify the specific needs and purchasing capabilities inherent within any group. Collect information needed to make decisions related to long term market potential. Find clues that will make your communication more relevant to the prospect.Do-It-Yourself ResearchCreating your own surveys is not difficult. The information is critical feedback, enabling you todefine and sharpen the focus of your marketing efforts.Survey ProspectsCatch people entering or leaving businesses like the one you have or want to start. Give them aquestionnaire and include a self addressed stamped envelop.Survey CustomersFind out what youre doing well and what you could improve in order to keep customerscoming back.Methods:Telephone survey - Get name, address, phone number of customers into a database or onto index cards. Make a few calls each evening or when things are quiet.Suggestion Box- Make it easy for your customer to let you know what they like and what they dont like. Be sure to do something with the ideas or you risk turning off customers.Anonymity - People will speak their mind if they believe there wont be any way for them to get into trouble. 10
  11. 11. Why should you invest in purchasing this learning series?As you work your way through this series you will be taking the first steps to joining thatfraternity of people that make this country what it is. Without small business there would be nobusiness.Although corporate leaders and politicians like to give lip-service to the world of small businessmost do not really have an understanding of what it’s about to own a small business becausethe majority of them have never started, owned or even worked as an adult in a small business.They live by the corporate and academic adage “Bigger is better”; an idea we find contradictoryto the laws of nature - take the dinosaur as your example. We firmly believe that the realbusiness survivor in the future will be the small business; companies that employ technologyfor efficiency and keep personalized service and relationship building as their watchword.Our businesses, Short-Order Marketing and SOMA llc, were created to become resources forsmall-business owners everywhere. Our commitment is to share what we have learned fromthe ups and downs we have experienced ourselves. We feel that people around the worlddeserve to be able to financially take care of themselves and their families. No one should livein fear of the “Bossman” and his pink slips.The four parts of this series will provide you with a solid foundation upon which you can build asustainable business. The $149 you contribute to our business is a small investment when youcompare it to the over $150,000 - $200,000+ is cost us to learn what we’ve included in theseries. We will also include one hour of phone consulting and mentoring for each module –four hours in total. This is a $200 value at our standard $50. per hour consulting charge.Thank you for your interest and may all your dreams become your reality. If you have anyquestions or comments please don’t hesitate to contact us via our email or LinkedIn account.Steve ChapmanSteve@somallc.comwww.linkedIn.com/company/short-order-marketingThe BizCube illustration and the concept of the cube and a model for a small business are the property of Steven R.Chapman, Short-Order Marketing and Somallc. The use of any part of this document without the expresspermission of the owner and author is prohibited. 11

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