This is a continuation of my series where I summarize biz books to save you time. Here is part 1 of my reading of this book.
Chapter 8: Who Is Your Target Customer?
Stop and Consider who your target customer is, who you are going to serve, who will you target by gender, age, or geo area, what is your customer’s occupation? how much disposable income?
Some marketing terms: Marketing: Anything you do to generate sales/ Branding: Image or culture for product or service/ Advertising: An openly sponsored depersonalized message to help sell something/ Market Research: Process of collecting info that provides insight into customers’ thinking/Competitive Analysis: A process to identify competitors and determine relative strengths and weakness./ Value Proposition: Your key benefits of your service. / Sales: Delivery of a product for a cost. /Profit: Revenue- Expenses
The 4 P’s of Marketing: Product, Placement, Promotion, Price. In short, think through the logistics of each of these.
The 4 Cs of marketing (more end-user focused): Customer, Cost, Communication, Convenience.
The 4 Cs of Marketing (more modern): Choice, Convenience, Cross-Device, Creative
Some other elements to consider: Validate the market (talk to prospects, make a few sales, research existing demand, conduct a survey), develop customer persona (know the avatar of who you are selling to), create value prop (concise, high-light quantifiable, and clearly distinguish value compared to competition- What’s in it for me (from cust perspective)), conduct competitive analysis (Look at public records, attend industry conferences, review website and SEO.)
Two resources: Spyfu can let you see what your competitors are buying on Google. You can also set Google Alerts for keywords to see who is talking about you.
Review Email Strategy, and try to find sales pitches.
When looking for a niche, try to find things others won’t do: Ugly business has few competitors. Turn hobby into money machine, or invent something to help yourself.
SMART Goals are good. Rather than writing that out again, I think my explanation is better.
How to test your niche: if a niche exists, media will target it. Find a strategic partner, run low-cost online ads to test public interest. Rent a mailing list
Chapter 9: Every Business Needs A Plan
Writing a business plan can help you better understand the fundamentals of your business: which business are you in, how big of a market opportunity is it, how much growth is possible.
Things to do: How does your marketing plan fit in the context of your business strat, what’s the latest socioeconomic data, what’s the marketing strategy’s focus, how do you accomodate growing operations? Develop an operating budget and sales projections.
Business Plans do 3 main things: Communicate, Help Manage, and Plan.
This communicates to finances, employees, and business partners.
This helps manage by ascertaining progress, modifying strategy as knowledge approaches, and build goals.
This helps plan by clearly understanding the phases of business development, identifying roadblocks, and updating plans.
Business Plans need: Cover page, Exec Summary, Business Description, Market Analysis, Marketing Plan, Operations Plan, Management Team, Intellectual Property Strategy, Financial Projections.
You should mark your cover page confidential and not circulate it to everyone. Executive summary should clarify size of market opportunity, marketing strategy, and unique selling position. Business descriptions should answer what is your core product, unique value proposition, and competitive advantage. Operations plan should tell you how to keep costs down and maximize profits, or how supply lines work. Management Team tells you your business credibility, and why you can succeed.
Intellectual Property Strategy should help you understand what types of protections are available for your ideas. Trademarks are a distinctive symbol of your business. Trade secrets are not protected except by contract. Copyrights allows you to exploit the financial value of any original works made by you or your employees.
A good checklist for approaching IP: Is your service unique? Is your process for preparing it unique? Are you using a specialized formula that can be patented?
Your financial projections should include a one year operating budget and sales predictions, and a break-even analysis to know what you need to sell to earn a profit. It’s ok to be conservative, and you need to be able to defend your costs and benefits.
Easiest way to complete a business plan is based on using software- liveplan.com is a good one.
Lean Business Planning by Tim Berry and The Successful Business Plan by Rhonda Abrams is also good. It may also be helpful to hire a consultant, or a nonprofit organization.
This plan should be updated every six months or so.
Chapter 10: Get Your Financing Together
Your savings account is among the best ways to finance your business. Purchasing CDs can be used as collateral, and the interest from the CDs lowers the real cost of the loans.
Benefits to CDS: Quick, doesn’t need to convince a banker, keeps borrowing costs low.
Downsides: Defaulting on loan may lose you all of CD money, Personal funds ties up the money, interest rates can go higher
Benefits to using Retirement funds: allow you to borrow up to 50% or 50,000, whichever is less, if you make interest payments you pay little or no taxes or penalties, interest you are paying goes back into your account
Downsides: If you leave job before loan is repaid, it becomes due a short time after you announce, you can only borrow if you have a job, there are heavy penalties if you touch funds when you’re under 60, there can be fees associated with to borrow the funds
Benefits to using home equity: Can access funds quickly and easily, this can result in lowest interest rate.
Downsides: Your house is collateral, meaning that bank can foreclose on your home, housing market can affect ability to get this type of loan. This requires an appraisal on your home, and if the house loses value, you could wind up owing more than house is worth.
Benefits to friends and family: Friends can understand your passion for business.
Downsides: Repayment terms can sometimes cause rifts in families.
On Bank Loans: They often require a good track record of cash flow. 6 Cs to consider: Capacity (will you be able to repay it), Credit (what is your personal credit score), Capital (how much $), Collateral (How can banks limit downside), Character (What is your reputation like), Conditions (what are loan’s terms and conditions)… Building a repayment history makes it easier to borrow more money.
On Angel Investors: These investors don’t want control, but instead will serve as advisors or board members. Angels want talent first, and great ideas second. Loans have defined terms, investors are along for the ride.
Angels want business owners who can pull things off, and have management skills.
VCs: Looking for business ventures that grow fast and are bought by other companies to stockholders. they manage like portfolios. VCs like controlling stake and will bring in their own team. VCs can be push and hard to work with… Investment agreement includes milestones. If you fail to meet these, VCs get more control.
Crowdfunding: Asking for contributions from a large number of people from the internet. Sites typically take 5-9% commissions. You will need to write a description of the project, a short video, and benefits to donating. Why do crowdfunders involve themselves? Cause, Rewards, Products, or Love of Video
If crowdfunding, work with people you know first, tell a good story, do not exaggerate, have great rewards, and have great PR.
Beware these follies: Crowdfunding is not your core business, Don’t work with a bad manufacturing partner, don’t send out a shitty product to stay on timelines, don’t miss communicating with funders transparently.
In essence, resist the urge to exaggerate your timelines and deliverables, because it risks your reputation, and lawsuits aren’t fun.
Keep on top of your cash flow. Basic definitions: Cash flow statement is cash minus cash payments. Balance sheet is statement of company’s financial position, Income statement is your company’s net income for the accounting period; also called P&L, cost of goods sold is the cost of raw materials and producing finished goods.
Business taxes are due March 15.
Chapter 11: Develop Your Website
Most people google you before they make a large purpose. 81% of people did online research, so building a helpful business website goes a long way towards building trust with your target customer.
There are six options to design a website as: traditional, protfolio, blog, personal brand, e-commerce, or membership.
Traditional: Purely informational, includes store hours, locations, services, and contact and doesn’t have any e-commerce.
Portfolio: Ideal to market personal services to potential clients.
Blog: Perfect way to demonstrate their expertise. This content is helping to build a brand on social media to sell services. You must upload content 2-3 times a week to have a loyal following (good on me for 7+ a week)
Personal Brand: This is for brand or influencer-focused orgs
E-Commerce: Strictly for selling products. This needs photos, titles, descriptions, strong keywords, a shopping cart system, a payment processor, and a shipping partner
Membership: Specialized content behind a paywall. Major money can be made from offering online courses, VIP forums, and webinars.
Other things to consider: What are you going to be known for, how customizable is your site going to be, how are you designing your site? How is your website navigation working? How are you demonstrating your expertise? How are you demonstrating your trustworthiness? Is this going to look good on mobile?
Post testimonials and five star Yelp ratings. WordPress is a content management system, but isn’t a pre-built website.
Secure a domain name. When doing so, use a word that is is easy to spell and remember.
Web hosting companies can also help- these can handle the setup, admin, management, and support of a server.
Your basic pages should include an About Us, Our Team or Our Founders, Our Services, Store, Contact us- (this should have an email address, a business address, and a phone number listed.)
Also, AVOID AVOID AVOID typos on your website. Sometimes, it can help to hire a professional (like me, when I’m not just enjoying writing my blog).
The biggest benefit to traffic is that traffic can be made into money. You can sell your own product, you can make sponsored posts, you can become an affiliate, you can advertise,
Chapter 12: How To Become A Social Media Activist
91% of B2B use content marketing to reach customers. 86% think that content marketing is a good way of creating inbound leads. If you develop good content, and share it regularly through social media, your niche customer will find you! (If you build it they will come)
Your content must solve problems for target customers or be an other source of value.
Content strategy is how you determine what stuff you create. Content marketing is how you promote it.
5 reasons to develop content: Sales, to get found, to build social media cred, to establish your leadership, to generate opportunities.
Once you have a content strategy in place, you can stay consistent with content development. Storytelling is an important part of content, because it builds trust (stories are good. Tyler Cowen has a nice Ted Talk on this)
Some content marketing stuff: How to advice/checklists, product review, interviews, branded YT channel, live Q&A, newsletters, podcasts, product images, custom graphics, roundup posts, list posts, book reviews, case studies, launch a challenge, voice search content, Alexa flash briefing, Quiz marketing, Chatbots, Chalk, Clubhouse
Have a purpose for what you write. Hire help for editing and social media promotion. Spend time to learn the best hashtags and keywords.
ROI: Return on Investment, Influence, and Identity.
You should define your social media goals so you act in accordance with them.
To get started on social media, HELP others (Help others First, Engage with People, Listen First, Promote Yourself With Care (Of six posts, 4 should be educational, 1 should be a soft sell, one should be a hard sell))
Six C’s of social media marketing: Connect, Communicate, Compelling Content, Consistency, Community, Commerce
Email marketing is essential to a long-term survival. Best way to build an email list is a free incentive to visitors to encourage them to subscribe. Offer discounts, checklists, book chapters, a free coaching sesh, anything that bribes.
Favorite MixMax works with gmail, and provides data on how many emails were opened and by whom, which links were clicked on, and best time of day to send.
Most people don’t buy until after the seventh contact. You should have an email sequence of at least ten messages to be sent over thirty to ninety days…
Never give away something that isn’t high value- if your email list stinks, people unsubscribe fast.
If ppl don’t engage by 90-180 days, they should be off your list.
Some action steps: Develop contents to build an archive of great content, use keywords and hashtags, spend 60-90 minutes social media marketing, find 5 sites to share content from daily, keep list engaged, one day a week should be used on new content, check out online courses on how to market online
Chapter 13: How to Develop A Sales Process
You want to avoid feast/famine sales, by being more consistent about making leads. New businesses should focus on low-cost sales efforts, in the form of in-person leads and warm introductions. Other sales efforts will be generated through your marketing channels.
LinkedIn sales navigator charges 65-104 for the plan. The advanced search tool finds you prospects, you can ad the leads to your target list, and finally send an intro email through LinkedIn to see about potential leads.
Ask a question hitting the pain point- one effective email title – ‘Quick Question’. Personalize your appeal beyond using name. Say something specific, or send a quick audio recording. The more personal the appeal, the more likely it is to get a response,
The typical starter sales automation tool is a CRM system. Find out what your customers want by listening and getting them what they want.
How to develop a sales process for B2B sales: Develop a Target List, Build a profile for your targets, only sell to your niche, develop consistent approaches to doing things (reach out at least quarterly. Start a birthday list), try running webinars, keep your name in the networking activities, industry conferences, trade shows and more, be relentless but don’t be pesky, for the first sales meeting, see it as a fact-finding mission to ask questions. After meeting, send a handwritten thank-you note, pitch them your proposal, follow up aggressively.
For Business To consumer: Tell a convincing story of how you solve a problem for yourself, sell a product not an experience, bundle and use presale orders to get things started
One key way to improve marketing is to make customer personas, or avatars so you have a better idea of who you’re working on behalf of. Think of someone’s priorities, pain points, and preferred channels of engagement.
Chapter 14: Selling Online
There’s a bunch of ecommerce sites. Paypal is a good first way of enabling payments, especially if you only have a few products. You can also sell on a marketplace like amazon or walmart, but competition is brutal and you don’t own your customer list.
Budget 6 months of online ads. Look at keywords, audience, and make sure your landing page is up to snuff.
Amazon is a sales place. It charges fees. If you become Amazon’s Choice, that can help.
PPC ads are the favored approach and can cost between 10 cents and 20 bucks a click (look for bargains).
Google Ads are a thing too, and you can do pay as you go if you don’t want to spend a predetermined amount. There’s search, display, shopping, local service, and retargeting ads available.
Social media advertising is also a thing. You can target exact audiences on FB, you can focus on content that’s already popular, and you can remarket. Instagram is similar, but has shopping, a contact button, and a get tickets button. Ppl like instagram stories and ad-retargetting. YT is another social media platform to get ads on, if appropriate to your business.
Chapter 15: Setting Up Shop
Money-Saving Tips: Don’t expand before your business grows, look for super cheap space, have a good computer and backup. Store your financial information. Buy stuff secondhand if possible, it saves 70-80 percent.
Have a landline phone, VoIP service, and a professional headset. You ultimately want to be easy to do business with. Business insurance can help, and the cheapest option for workers comp is usually the state.
Leasing office equipment may be wise because it’s easier to finance, it won’t be obselete, and your debt to equity ratio looks better.
When leasing: look for best deal, make sure you can break lease, don’t lease for more than 2 years, look for an option to buy clause, and get a modern equipment substitution clause.
Chapter 16: Build Your Team
One of the most important skills is to delegate. If you don’t use your employees full potential, the money is wasted. You should know how to communicate across ages and across cultures
Write detailed job descriptions, so it’s clear what she is expected to do. Have an exhaustive list of tasks, divide the tasks into categories based on frequencies, and keep your job description aspirational so you can also hire thinkers.
Part-time employees can work well, but you may be competing with full time positions or hours might be challenging to coordinate.
A temp agency is good to get short term labor, but their training and orientation is lost when worker moves on. Freelancers may also be similarly good and work for a straight hourly rate. If you pay more than 600 to a contractor, you need to send a 1099 tax form to them.
Interns work, but you need to establish strong norms. Amount of time to work, dress code, specific projects to do. Give them tasks that test skills, and bring value.
When interviewing people, drug testing + getting their info is a good idea. Other things to keep in mind: Be a good listener, redirect conversations when necessary, take notes, go with your gut, and be ready to answer questions too.
You will need W-2 forms for all full time and part time employees and W9 for all 1099 contracts. Use a payroll service to handle payroll taxes (they add up).
Factors to consider when choosing a company for payroll: Cost, Responsiveness, Communication, How They Approach Technology.
Consider the cost of benefits. You can also offer profit sharing if you don’t have competitive benefits otherwise. Consider stay-at-home moms with Hiremymom.com or virtual gig workers.
How to approach a remote workforce: Make goals and mission clear, use PM and scheduling software, use good collaboration tools, make sure to be inclusive, and build rapport.
When reprimanding: List several positives before addressing the negative, highlight anything you could do better, have the meeting in private.
Hiring family, while cheap, may strain relationships. Communication is key.
Have a policy regarding lateness. If you dock pay for tardiness, and hassle people about sick time or time off, you’ll pay on the back-end.
Firing someone tends to be a high-stress situation. When an employee leaves, it’s usually because of illegal or immoral activity, or poor performance. When firing someone, stick to the facts. Terminate with kindness and in privacy. Do an exit interview to know what you can do better.
Chapter 17: Set Up Customer Service Systems
How will you approach dissatisfied customers? How will you greet and assist customers? Good customer service is key to remaining competitive. 59% of customers have switched because of poor service.
Underpromise and overdeliver if possible.
When solving customer problems, it’s a good thing to ask the customer what would solve the problem. Also, courtesy helps, and being flexible helps too.
Generally, saying no to customers is not fun, but sometimes customers won’t be satisfied.
Ask customers for feedback, and a review is helpful too.
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