business strategy http://www.wisebread.com/taxonomy/term/13257/all en-US 5 Big Business Growth Strategies Small Business Can Use http://www.wisebread.com/small-business/5-big-business-growth-strategies-small-business-can-use <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/5-big-business-growth-strategies-small-business-can-use" target="_blank">http://www.openforum.com/articles/5-big-business-growth-strategies-small-busines...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-big-business-growth-strategies-small-business-can-use" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000016133791Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="187" /></a> </div> </div> </div> <p>Eventually you want your small business to grow into a big business, right? If that's true, then why not look at the growth strategies of big businesses and see what could work for you?</p> <p>With that in mind, here are five big business growth strategies that small businesses should think about using. Not every strategy will be perfect for your situation, of course, but take a look at each of them and think about which ones offer an opportunity for your business.</p> <p><strong>1. Market Segmentation</strong></p> <p>If you're not familiar with the term, market segmentation simply means picking a sub-set of the entire marketplace that you organize your efforts around. In other words, out of all the people in the world, which ones are you going to try to sell to.</p> <p>Most big businesses are excellent at market segmentation. They carve out their corner of the market and then they do everything they can to own that space.</p> <p>Red Bull is an example. They do everything they can to get their energy drinks in front of a young, adventurous, and thrill-seeking crowd. That's their segment of the market. Ever wonder why Red Bull owns a Formula One racing team? That&rsquo;s why.</p> <p>Pepsi is another example. Pepsi was losing its battle with Coca-Cola to become the heavyweight cola company. Instead of trying to beat Coke at their own game, Pepsi decided to focus on the young, fun-loving demographic. To this day, many Pepsi commercials still show younger music stars, celebrities, or other young status symbols.</p> <p>In other words, Pepsi decided to forget about the 30 and over crowd and segment their market. Coke is still the top dog, of course, but thanks partially to market segmentation Pepsi has built a very successful brand as well.</p> <p>Most small business owners would be very happy with building the next Pepsi, but many of them are afraid to eliminate part of their potential market. It can seem scary, but you need to focus on your core customer if you want a clear path to growth.</p> <p>Segmenting your market simply comes down to making choices. Who are you going to serve? Who are you going to avoid? Furthermore, which segment can you focus on to improve profitability?</p> <p><strong>2. Leveraging Partnerships</strong></p> <p>Some small business owners love to complain about how they can't compete with the vendor relationships that the big guys enjoy. There is some truth to the fact that you can't &quot;pay to play&quot; like the Fortune 500s&mdash;but you can leverage partnerships in a very savvy way.</p> <p>For example, let's say your small business makes tennis balls and you have some technology that makes the balls bounce better and last longer. So you have a great product, but you don't have a manufacturing facility, a distribution channel, or any of the other pieces of the tennis ball supply chain. All you have are great tennis balls.</p> <p>You may not be able to compete with the big industry players (Wilson, Penn, Prince, etc.) for sponsorships or tournament partnerships, but you could partner with a tennis ball factory and a distribution company. In fact, you could partner with them without having to pay a cent for your own factory or distribution. Just pay your partners a portion of the profit every time you sell a tennis ball.</p> <p>The result? You negotiate for mainstream production and distribution without paying the huge upfront cost of building a plant or hiring a shipping company. Now you can set your focus on selling tennis balls instead of worrying about making them.</p> <p>Big businesses can pay for partnerships up front, small businesses need to negotiate for partnerships that pay per sale.</p> <p><strong>3. Use Checklists</strong></p> <p>Big businesses have massive facilities, complex supply chains, and large pieces of equipment. Managing the day-to-day operations in these environments is too complex for one person. Furthermore, there are too many variables to keep track of and people will often forget something unless they have a checklist to keep them on track.</p> <p>Guess what?</p> <p>Small businesses are the same way. Small business owners have to wear many hats. If you don't keep yourself accountable and remind yourself to do something that &quot;brings home the bacon&quot; ... then it's easy to get caught up doing things that aren't essential. In the rush of a normal day, it's also easy to forget to do a critical task.</p> <p>Take a page from big business and develop <a href="http://www.openforum.com/articles/use-systems-to-save-time-and-money" target="_blank">process lists or checklists for specific tasks</a> and jobs. Give yourself a guide to success and a reminder to do the essentials each day.</p> <p><strong>4. Acquisitions</strong></p> <p>Perhaps the number one way that most big businesses continue to grow is through acquisitions. Before you think I'm off my rocker by suggesting this move for small businesses, let's explain a few things.</p> <p>First, acquisitions are tough. You can easily break the bank with one bad purchase. That said, acquisitions can be a massive source of profit and growth if you make a few key moves.</p> <p>You will know what's a good buy in your industry much better than I will, but the one thing I will say is that you need to follow tip #3 above and stick to a specific list of characteristics that you're looking for. Don't let emotion or ego play a role in a major purchase. Stick to the checklist.</p> <p>Secondly, do you have the budget to buy up everyone in the industry? Probably not. I'm not suggesting that you buy something you can't afford. That said, there are a lot of businesses out there that you can afford and that you can probably improve. Don't dismiss acquisitions just because you're small.</p> <p><strong>5. Become a Leader in the Industry</strong></p> <p>Big businesses often make their name by leading an industry. They make moves when other businesses sit by the wayside.</p> <p>I was recently talking with the employees of a large distribution company that wants to do business in China. There's just one problem.</p> <p>The distribution company ships products for other companies and those businesses don't trust the distribution in China just yet. As a result, they aren't selling in that region. For the distribution company that means there are no products to ship, so they don't set up distribution. It becomes a chicken or the egg type of problem where neither side wants to move first.</p> <p>So what does this company do? They say, &quot;You know what? We know you don't like the distribution there, so we're going to go in and fix it. Then you can come and give us all of your business in China.&quot;</p> <p>Is it a bold move? Yes.</p> <p>Is it an expensive move? Yes.</p> <p>Is anyone else currently doing it? No.</p> <p>Does that mean that there is a huge opportunity for growth? Yes.</p> <p>What's the lesson for small businesses? Don't be afraid to solve the hard problems that everyone else avoids. There is a lot of money to be made when you're the first person to fix something.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/james-clear">James Clear</a> of <a href="http://www.wisebread.com/small-business/5-big-business-growth-strategies-small-business-can-use">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-all-successful-freelancers-do">10 Things All Successful Freelancers Do</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-weird-logic-of-economic-growth">The weird logic of economic growth</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-your-sluggish-workday-go-a-lot-faster">How to Make Your Sluggish Workday Go (a Lot) Faster</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-helpful-tools-to-manage-your-small-business">6 Helpful Tools to Manage Your Small Business</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center acquisitions business strategy growth market segmentation productivity small business vendors Wed, 30 Nov 2011 22:43:40 +0000 James Clear 797314 at http://www.wisebread.com Turn Your Business Into a Money Machine http://www.wisebread.com/small-business/turn-your-business-into-a-money-machine <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/turn-your-business-into-a-money-machine" target="_blank">http://www.openforum.com/articles/turn-your-business-into-a-money-machine</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/turn-your-business-into-a-money-machine" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000004530468Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Wildly successful businesses often find one process that works and then repeat it as many times as possible. If you can figure out what this process for your business, then you can grow at an alarming rate. For example, if you know that for every $1 you put in, you will get $2 out, then you can grow without fear. Some people call this achieving scale. Some people call it a money machine. Some people just call it good business.</p> <p>Regardless of what you call it, I'm assuming you would like your business to be a money machine. Here are three ideas that should help you do just that.</p> <p><strong>1. Know Your Customer Lifetime Value</strong></p> <p>Your Customer Lifetime Value is simply the amount of value that the average customer brings to your business over a given time span (usually one year).</p> <p>If you&rsquo;re interested in calculating your Customer Lifetime Value, you can find a great explanation of the concept and an Excel spreadsheet that should help you on <a href="http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-customer-lifetime-value/">Occam's Razor</a>.</p> <p>Long story short, once you know how much each customer is worth to you, then you know with certainty how much you can spend to get a new customer. For example, if you make $15 of profit with each customer, then you can spend $14 bringing a new one in the door and still stay in business.</p> <p><strong>2. Be Willing to Pay for Customers</strong></p> <p>To some of you, this will seem like a no-brainer, but you would be surprised how many business owners are hesitant to spend money to make money.</p> <p>Instead, they tell themselves things like...</p> <p>&quot;I'll start an email list and do some SEO. Then everyone will sign up and I can pitch them products.&quot;</p> <p>&quot;I want to create the next Facebook for motorcycle enthusiasts. All of the bikers and gear heads will come join my community for free and then I can make money on advertising.&quot;</p> <p>&quot;The foundation of my business is referrals. After all, that's the best strategy right? Happy customers will always bring you more customers.&quot;</p> <p>Now, there is nothing &quot;wrong&quot; with the above statements. And I certainly don't suggest recklessly spending your money (more on that in a moment). But it is important to understand that successful businesses pay to bring quality customers in the door.</p> <p><strong>3. Create a Closed Feedback Loop</strong></p> <p>If you want to create a money machine and not waste your precious cash in the process, then you need to have a way to track what works and what doesn't. You need a feedback loop for each marketing and advertising activity you do.</p> <p>Feedback loop is just a fancy way of saying, &quot;<a target="_blank" href="http://www.openforum.com/idea-hub/topics/money/article/methods-of-measuring-e-commerce-financial-performance-1">track where your sales come from</a>.&quot; You should know exactly which advertising campaigns, marketing initiatives, and actions bring in the most customers.</p> <p>Yes, it will take some effort to set this up, but it will be well worth it.</p> <p>Once this feedback loop has been created, then you know for sure where your profits are being generated. That's when you have a money machine on your hands. You know how much your customers are worth to you. You know how much you can spend to acquire them. You know which actions generate the most profit.</p> <p>Business is good when you know that you can put $1 into the machine and get $3 out the other end.</p> <div class="field field-type-text field-field-blurb-amex"> <div class="field-label">AMEX Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> This is a <a href="http://www.openforum.com/articles/turn-your-business-into-a-money-machine" title="Turn Your Business Into a Money Machine">reprint of Wise Bread's contribution</a> to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other. </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/james-clear">James Clear</a> of <a href="http://www.wisebread.com/small-business/turn-your-business-into-a-money-machine">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/100-ways-to-make-more-money-this-year">100+ Ways to Make More Money This Year</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-employed-tips-for-taking-time-off-without-trauma">Self-Employed? Tips for Taking Time Off Without Trauma</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/business-start-up-tips-apprentice-finalist-dr-randal-pinkett">Get Business Start-up Tips from “Apprentice” Finalist Dr. Randal Pinkett</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce">5 Ways to Protect Your Business During a Divorce</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business metrics business planning business strategy pricing strategy small business subscriptions Thu, 03 Nov 2011 18:37:37 +0000 James Clear 764356 at http://www.wisebread.com How To Stay Ahead Of The Curve And Be Successful http://www.wisebread.com/small-business/how-to-stay-ahead-of-the-curve-and-be-successful <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/how-to-stay-ahead-of-the-curve-and-be-successful" target="_blank">http://www.openforum.com/articles/how-to-stay-ahead-of-the-curve-and-be-successf...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/how-to-stay-ahead-of-the-curve-and-be-successful" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000012860563Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="164" /></a> </div> </div> </div> <p>Growing richer than everybody else means building a business that is not just okay, or average, or mildly successful. It means building a business that is wildly successful. Doing that means going a bit <a target="_blank" href="http://www.openforum.com/idea-hub/topics/managing/article/10-examples-of-tremendous-business-leadership-1">beyond the ordinary</a>. Here are ways you can beat the crowd to do that.</p> <p><strong>Start by Setting Your Own Standards</strong></p> <p>The first step forward is to quit setting your standards (and thus, your objectives, actions, and points of measurement) based on what everybody else is doing. Ask yourself this: is everybody else wildly successful, as you want to be? Is everybody else achieving unstoppable, snowballing success with their business? No, obviously not.</p> <p>The group has power. It has buying power, it has trend-setting power, and it has business-building power. But the group is not where you go for your inspiration. The group is good at catching on after the ball has started rolling. It's up to you to figure out which ball you're going to roll and then push it up the hill.</p> <p>If you want to be more successful, have more authority, and make more money than everybody else around, you can't do what everybody else is doing.</p> <p><strong>Do the Opposite of Everybody Else</strong></p> <p>Just for the sake of getting your business noticed, doing the opposite of everybody else can be a powerful strategy. But there's more to it. By the time everybody has jumped onto the latest bandwagon, it's a pretty crowded, dumpy place. It may still be rolling along, but the more crowded it gets, the slower it goes.</p> <p>Instead, take a step back and a look around. Figure out what people aren't doing. Figure out what need isn't being met. Figure out what wagon is empty, but headed in the right direction, and grab the reins on that one.</p> <p>If you want to be more successful, be the leader of the crowd, not a member of it.</p> <p><strong>Do Things Better than Everybody Else</strong></p> <p>A wise man put it this way: &quot;Do you know a man who excels in his work? He will stand before kings; he will not stand before obscure men.&quot; In other words, build the better mousetrap&hellip; and you know the rest.</p> <p>If your business is already established, or you're in a competitive market, or you just can't think of a way to do things opposite of the crowd, then do things better. Do customer service better. Do design better. Do testing better. Do a better job in quality, price, accessibility, feedback, guarantee, and follow-up.</p> <p>Don't strive for good enough, or slightly better than the competitors. Build a business that has a reputation for excellence, and you will build a business that can last.</p> <p>Average is the enemy. If you want to be more successful, be the one who sets the bar for excellence. Then make sure you reach the bar every single time.</p> <p><strong>Take It Further than Everybody Else</strong></p> <p>People who get noticed, and remembered, are people who take things further than they've been taken before. This isn't always a good thing (we won't go into stage antics and reality TV shows here, but you get the point); taking things too far can be terrible, but it will get you noticed.</p> <p>But if you take things &quot;too far&quot; in the right direction, what happens? If you're an athlete, you break through old records and establish new ones. You end up in the Hall of Fame. If you're an artist, you break through old barriers and establish new schools of thought and expression. Good things, big things, can happen when you take it further (whatever it is) than everybody else.</p> <p>And if you want to be successful, you've got to push the boundaries. You've got to take your business further than the status quo. You've got to push yourself further. You don't get dramatically successful or fabulously wealthy by being average.</p> <p><strong>Do the Unexpected, the New, the Different</strong></p> <p>Products that provide a combination of desirability plus difference have the potential for huge success. Consider Apple, which (among other things) decided that technology could be pretty and useful. You desire the function of the technology; there's nothing unexpected about having a smart phone that can text and take calls and harvest your emails for you. But there is something unexpected about a functional, technological device that is also beautiful to hold, to watch, and to use.</p> <p>The concept is to take something normal, something known, and then spin it. Do something unexpected with it. Do something different with it. Do something new with whatever you have that's old, and you might find a surprising hit.</p> <p>If you want to be successful, do something different.</p> <p><strong>Dominate the Field</strong></p> <p>The secret of being more successful than everybody else is not quitting when everybody else does. That's how you go from mildly successful to wildly successful, and that's how you dominate your field no matter what it is.</p> <p>You get a great product that is something different, or you find a new method that is better, or you take an idea further, or you come up with a business plan that is the opposite of the mass movement, and you start making waves.</p> <p>The key is to keep making those waves. A little wave will disappear in the ocean of noise and business and stuff that is our daily life. But you keep making those same kind of waves, and you start something big.</p> <p>People notice, and keep noticing, and you establish your business not just as a one-off success, but as a powerhouse of original, new, different, trend-setting, value-providing, original, extreme, dominating business moves, one right after the other.</p> <p>Dominate by putting out one idea after another after another after another. Dominate by never quitting. Dominate by trying and failing and trying again.</p> <p>If you want to be successful, dominate yourself first. No self-doubt, no delusions, no indecision, no hesitation. Then take your idea, make it better, take it further, build it higher, and show everybody else how it's done.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/small-business/how-to-stay-ahead-of-the-curve-and-be-successful">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-embrace-failure-keep-going-and-win">How to Embrace Failure, Keep Going, and Win</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-secret-to-succeeding-at-absolutely-everything">The Secret to Succeeding at Absolutely Everything</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/success-secrets-you-should-have-learned-in-high-school-but-didnt">Success Secrets You Should Have Learned in High School — But Didn&#039;t</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/friends-and-goals-dont-let-a-blue-falcon-bring-you-down">Friends and Goals: Don&#039;t Let a Blue Falcon Bring You Down</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Personal Development Small Business Resource Center business strategy motivation persistence small business success Sat, 22 Oct 2011 18:07:27 +0000 Annie Mueller 756221 at http://www.wisebread.com My Pumpkin Lady’s Secret to Business Success http://www.wisebread.com/my-pumpkin-lady-s-secret-to-business-success <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/my-pumpkin-lady-s-secret-to-business-success" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/girls_with_pumpkins.jpg" alt="Girls with pumpkins" title="Girls with pumpkins" class="imagecache imagecache-250w" width="250" height="135" /></a> </div> </div> </div> <p>This weekend I went shopping at the local farmers market. We weren't looking for anything in particular, just browsing for what looked good.</p> <p>While browsing, we noticed a giant posterboard sign titled &quot;Award Winning Recipe.&quot; There were several delicious-looking pictures of stuffed pumpkins followed by an &quot;easy&quot; recipe. The recipe used simple ingredients that you would find in almost any kitchen: rice, onions, carrots, and some spices. And what else did you need? Two small pie pumpkins.</p> <p>The stand featuring the award winning recipe sold, of course, pie pumpkins. The owner of the stand came over with a copy of the recipe, helped us pick out two pumpkins, took our cash, and wished us well. (See also: <a href="http://www.wisebread.com/the-9-secrets-of-highly-successful-craigslist-sellers" title="The 9 Secrets of Successful Craiglist Sellers">The 9 Secrets of Successful Craiglist Sellers</a>)</p> <p>A few things were notable about this pumpkin lady's stand. It only sold one item &mdash; pie pumpkins. Most farmers market stands feature multiple types of items &mdash; even the specialty stands will have a variety of whatever they are selling, be it the &quot;apple stand&quot; with Courtland, Honeycrisp, Harlsons, and MacIntosh, or the potato stand with fingerling, red, and Yukon gold potatoes. But the pumpkin lady only sold pie pumpkins, all about the same size and shape. And she had very few left that morning.</p> <p>Personally, I've never bought a pie pumpkin before in my life. It never occurred to me to make anything other than pie with a pie pumpkin. And frankly, given that you can buy <a href="http://www.wisebread.com/cooking-with-canned-pumpkin-fresh-ideas-for-a-frugal-super-food" title="Cooking with Canned Pumpkin">canned pumpkin</a>, cooking and carving the real thing seems like too much work. Had you asked me, prior to my trip to the farmers market, what my chances were of buying a pie pumpkin that day &mdash; I'm fairly certain they would have been zero. And yet, I walked away from the market with two pie pumpkins.</p> <p>So, what was the pumpkin lady's secret to selling something most people don't think they need?</p> <p>She wasn't actually selling pumpkins. She was selling the only remaining ingredient I needed for an easy, award winning recipe &mdash; two pie pumpkins. She was selling me what I came to the farmers market for &mdash; not individual produce items, but a delicious meal.</p> <p>The pumpkin lady's secret to business success goes something like this. In business, and in life, you will succeed when you...</p> <ol> <li>Know the end goal of what someone is looking for in the place you're making it available<br /> &nbsp;</li> <li>Show the person that you have what they're looking for<br /> &nbsp;</li> <li>Provide the single thing that person needs to achieve that end goal</li> </ol> <p>The pumpkin lady sold so many pumpkins because she...</p> <ol> <li>Knew that people were looking for a delicious, seasonable, and fresh meal at the <a href="http://www.wisebread.com/what-not-to-buy-at-a-farmers-market">farmers market</a><br /> &nbsp;</li> <li>Provided a recipe complete with pictures of the completed product<br /> &nbsp;</li> <li>Sold the pumpkins needed to make that recipe</li> </ol> <p>Many business people know the &quot;hot&quot; buttons for getting a buyer: money, sex, safety. But there are also many underlying needs and wants that can be sold. Determine how you can provide a recipe for the item you're selling, and you'll achieve success.</p> <p><em>What business tips have you learned from being an observant consumer?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/elizabeth-lang">Elizabeth Lang</a> of <a href="http://www.wisebread.com/my-pumpkin-lady-s-secret-to-business-success">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-find-freelance-clients-part-two">How to Find Freelance Clients: Part Two</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-biggest-mistakes-freelancers-make">The 5 Biggest Mistakes Freelancers Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-your-great-startup-business-is-doomed">6 Reasons Your Great Startup Business Is Doomed</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-business-of-ebay">The Business of eBay</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/effective-ebay-listing-0">Effective eBay Listing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship business strategy marketing selling Fri, 21 Oct 2011 16:10:36 +0000 Elizabeth Lang 750920 at http://www.wisebread.com 5 Pitfalls of Price Promotions http://www.wisebread.com/small-business/5-pitfalls-of-price-promotions <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/marketing/article/5-pitfalls-of-price-promotions" target="_blank">http://www.openforum.com/idea-hub/topics/marketing/article/5-pitfalls-of-price-p...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-pitfalls-of-price-promotions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000004089013Small_0.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Everyone loves a sale, right?</p> <p>Everyone, that is, except for the businessperson who watches as the competitive advantage that he or she thought would result from a price promotion turns into a competitive <i>DIS-</i>advantage.</p> <p>What happened?</p> <ol> <li>Price promotions can train your customers that your prices aren&rsquo;t real. Customers then tend to &ldquo;wait for the sale&rdquo; and are less likely to buy at full price.</li> <li>Price promotions can cost more than they bring in. Higher volumes are nice, but not at the expense of profits. Unless the promotion creates new, loyal customers, you may not have gained anything but some extra work.</li> <li>Frequent price promotions can signal weakness to your competition.</li> <li>When done too frequently, consumers may assume there is something wrong with your product and that it is not actually worth full price.</li> <li>Your ability to deliver quality goods or services may suffer if you become known only for promotional pricing.</li> </ol> <p>As with the rest of running a business, there's a right way to run your price promotions and a wrong way. Let's start with the wrong way.</p> <h3>The Not-So-Profitable Price Promotion</h3> <p>As a young professional, I worked for a small family-owned retail chain whose tagline was &ldquo;Only the Best for Less&rdquo;. This business owner always had several brand name items on sale at a better price than the other stores in the area. The remaining items in the stores were priced just barely under, or the same as, everyone else&rsquo;s prices. Each week, the promotional items changed.</p> <p>The hope, of course, was that consumers would come in for the specials and purchase the remainder of their needed items at the same time whether those items were on sale or not. The success of this strategy varied widely, depending on the items that were on special, how deep the discount was, and whether or not the other local store owners decided to match the sale price. Frequently, they did.</p> <p>In the end, the strategy backfired and the business decided to drop their tagline and change their marketing approach, but not before some damage was done.</p> <p>What happened?</p> <p>Price conscious customers caught on pretty quickly, and it wasn&rsquo;t unusual for someone to complain that the claim of &ldquo;Only the Best for Less&rdquo; was not always true. While the business owner had a policy of meeting other pharmacy&rsquo;s prices if a customer showed him their ad, he couldn&rsquo;t compete with the big box stores when they started opening in his area. He had never established a reputation for service and quality, only for price, and making that change was expensive, painful, and not very successful.</p> <h3>Price Promotions Done Well</h3> <p>One of the best-known examples of a successful promotional pricing policy is the one used by Nordstrom. They have managed to avoid all five problems.</p> <p>To begin with, Nordstrom has many different value/price levels for their regularly priced merchandise &mdash; you can buy a pair of shoes for $50, $500, or anywhere in between. In this way, they appeal to consumers at all price levels.</p> <p>In addition, they have three widely anticipated sale events per year. These events are not closeouts of leftover merchandise &mdash; they are true sales on new merchandise, much of it brought in for the sale. However, not everything in the store is on sale at those times &mdash; far from it.</p> <p>A customer who shops during non-sale times knows that they have to purchase at full price, or take their chances with the once-in-a while season-end clearance rack, because it&rsquo;s highly unlikely that the item they like will ever be available at a less than full price.</p> <p>In addition, the sale events themselves are great marketing vehicles. They bring lots of customers into the store, and many of them buy non-sale merchandise while they&rsquo;re at the sale. But better yet, many of those customers return at non-sale times because the quality of the sale event turns them into loyal Nordstrom customers.</p> <h3>Keep Your Price Promotions Proper</h3> <p>The ultimate goal of a price promotion is to get and keep new customers, and to encourage existing customers to buy goods or services they may be buying elsewhere from you instead. Ultimately, you want both types of customers to come for the price, but stay for the selection, quality, and service.</p> <p>These principles apply to all businesses, not just retail businesses. Whether you sell goods or services, and no matter what type of customers you serve, you can benefit from promotional pricing &mdash; as long as you keep that ultimate goal in mind.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joanne-berg">JoAnne Berg</a> of <a href="http://www.wisebread.com/small-business/5-pitfalls-of-price-promotions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-simple-ways-to-market-your-side-business">6 Simple Ways to Market Your Side Business</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-sign-up-for-half-price-flights-and-free-hotels">How to Sign Up for Half-Price Flights and Free Hotels</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-pumpkin-lady-s-secret-to-business-success">My Pumpkin Lady’s Secret to Business Success</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/where-oh-where-are-my-worms-be-on-your-toes-when-ordering-from-small-web-businesses">Where Oh Where Are My Worms? Be On Your Toes When Ordering From Small Web Businesses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business strategy customer service marketing pricing pricing strategy promotions small business Wed, 27 Apr 2011 19:49:35 +0000 JoAnne Berg 528211 at http://www.wisebread.com How to Write a Business Plan http://www.wisebread.com/small-business/how-to-write-a-business-plan <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/managing/article/how-to-write-a-small-business-plan" target="_blank">http://www.openforum.com/idea-hub/topics/managing/article/how-to-write-a-small-b...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/how-to-write-a-business-plan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000004470299Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p><em>&ldquo;It's not the plan that is important, it's the planning.&rdquo; &ndash; Dr. Graeme Edwards</em></p> <p>Going through the process of writing a well thought out business plan is one of the most important things that you can do to ensure the success of your business.</p> <p>Unfortunately, many business owners find this process to be difficult and confusing, in part because they are focused on the end product and not on the process of getting there. It&rsquo;s a journey, not a destination!</p> <p>I&rsquo;ve found that it is helpful to break the planning process down into separate topics, and then look at how they fit together in the overall plan. It&rsquo;s also a good idea to think of yourself as an investor in your business (which, of course, you are) and review what you come up with from that point of view.<strong><br /> </strong></p> <p>Here are the planning topics that I believe are important, presented in the order in which you should approach them.</p> <p><strong>The Problem and the Opportunity</strong></p> <p>There has to be a current problem (need) and the solution your business is providing.</p> <ul> <li>Who is the customer? What is their problem?</li> <li>What is your solution?</li> <li>Why is it better than other solutions on the market?</li> <li>What&rsquo;s the market opportunity?</li> </ul> <p><strong>Business Model</strong></p> <p>Your <a target="_blank" href="http://www.openforum.com/idea-hub/topics/money/article/the-7-best-business-models-for-increasing-the-value-of-your-company-john-warrillow">business model</a> is how the business turns an idea into money. A typical example of a business model is &ldquo;the razor and the razor blade.&rdquo; Razor companies sell razors inexpensively, because what they really want to sell you are the razor blades now and in the future.</p> <ul> <li>What is your unique business model?</li> <li>What makes it special? Why are you different from the competition?</li> <li>Do you have intellectual property that gives you an advantage?</li> </ul> <p><strong>Competitive Market Analysis</strong></p> <p>Good market research is the key to a solid business plan.</p> <ul> <li>Who are your competitors?</li> <li>What do they do better than you do?</li> <li>How will your business be able to take a piece of their market?</li> <li>In this section you will also need to address the market pricing of your product.</li> </ul> <p><strong>Marketing and Sales Strategy</strong></p> <p>Be specific &mdash; design a detailed plan that can be put into action easily and according to your budget.</p> <ul> <li>How do you plan to market your product or service?</li> <li>How will you get the word out and create demand?</li> <li>How will you turn a prospect into a customer?</li> <li>If that doesn&rsquo;t work, what else will you try?</li> </ul> <p><strong>Operational Strategy</strong></p> <p>Describe how you are going to execute your business model and deliver your product or service.</p> <ul> <li>How will you run this business on a day-to-day basis? Who will do what?</li> <li>What operational metrics will you track to ensure that your plan is working out?</li> <li>Clearly address the risks of the business, and how you will deal with them when they arise.</li> <li>Don&rsquo;t forget the external risks that you don&rsquo;t have control over (interest rates, the economy, etc).</li> </ul> <p><strong>The Team</strong></p> <p>Your people are your most important asset!</p> <ul> <li>Include short bios including relevant industry experience in the body of the plan. Include your outside advisors as well as employees.</li> <li>Detailed resumes go in the appendix.</li> <li>Include an organizational chart.</li> </ul> <p><strong>Timeline</strong></p> <p>Successful execution of a plan often depends on timing.</p> <ul> <li>Be specific about when you will be executing the various pieces of the plan. You need this for the financial projections as well.</li> </ul> <p><strong>Financial Goals and Projections</strong></p> <p>A good plan includes 3 to 5 years of financial projections. If you do not have a strong financial background, it&rsquo;s a good idea to get professional assistance with this part of the plan &mdash; it&rsquo;s really important that it be done properly.</p> <ul> <li>Include projected income statements, balance sheets, and statements of cash flow.</li> <li>The projections should include expected investor returns and/or clearly show the repayment of anticipated loans. Include the money you have put into the business in these calculations.</li> <li>The results of the projections should make financial sense in relation to the earlier parts of the plan.</li> </ul> <p><strong>The Executive Summary</strong></p> <p>This should be a one page synopsis of all of the above. This should be written last, but be presented at the front of the published plan.</p> <ul> <li>Why this business? Why Now?</li> <li>Why should an investor (including YOU) put time and money into this venture?</li> <li>Include brief financial highlights.</li> </ul> <p>With these parts in place, you&rsquo;ll have a great roadmap to follow as you manage your business, as well as a document that can be used to obtain financing or investment, communicate with employees, and continue planning for the future.</p> <p>But most importantly, what you learn through the process of putting the plan together about yourself, your team, your idea, your competition, and your business strategy can make all the difference between success and failure. It&rsquo;s one of the best investments of time and effort that you can make.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joanne-berg">JoAnne Berg</a> of <a href="http://www.wisebread.com/small-business/how-to-write-a-business-plan">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/writing-your-own-business-plan-thrifty-or-foolish">Writing Your Own Business Plan: Thrifty or Foolish?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-small-business-pitfalls-and-how-to-avoid-them-part-two">6 Small Business Pitfalls, and How to Avoid Them: PART TWO</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan">10+ Smart Ways to Get a Small Business Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center business plan business process business strategy financial forecasts small business Thu, 21 Apr 2011 19:34:47 +0000 JoAnne Berg 524225 at http://www.wisebread.com Change Your Company -- And Your Industry -- Steve Jobs Style http://www.wisebread.com/small-business/change-your-company-and-your-industry-steve-jobs-style <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/innovation/article/change-your-company-and-industry-steve-jobs-style-glen-stansberry" target="_blank">http://www.openforum.com/idea-hub/topics/innovation/article/change-your-company-...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/change-your-company-and-your-industry-steve-jobs-style" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000015417429Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Apple <a href="http://www.engadget.com/2011/03/02/live-from-apples-ipad-2-event/">recently announced</a> the latest iteration of their popular tablet, the iPad 2. The event went like most other Apple events: an enthusiastic crowd, spontaneous bursts of applause, a great innovative new product, and a standing ovation for the man behind Apple's wheel, Steve Jobs.</p> <p>Steve Jobs has brought Apple into a dominating position in the past few years, and he's done so without Apple acting like other tech companies. He's created a culture around a company that has created millions of Apple zealots worldwide, all scrambling to get their hands on the latest Apple creation.</p> <p>So what can we learn from the wizard behind the curtain of one of the world's most successful companies on revolutionizing an industry? Here are some ways to follow Apple's lead and change your industry.</p> <h3>Move to Where the Market W<i>ill</i> <i>Be</i>, not Where It <i>Is</i></h3> <p>&quot;A good player goes where the puck is. A great player goes where the puck is going to be.&rdquo; ~ Wayne Gretzky</p> <p>Instead of trying to keep up with the tech Joneses, Steve Jobs instead focuses on game-changing products.</p> <p>Jobs has always had a knack for brushing aside conventional wisdom and shipping products that consumers can't help but purchase. Jobs does this by creating products that are so different from everything else that consumers can't help but gravitate towards them.</p> <p>When other tech companies focused on features and functionality, Apple made product design the main focus. The best products are often the ones that take a twist on old-fashioned, out-dated competition.</p> <p>If you're going to change <i>your</i> industry, you're going to have to start evaluating conventional wisdom. What can be removed? What needs to be added? What's been around forever because, well, nobody knows why?</p> <p>These are the questions that need to be asked frequently in order to get ahead of the game, to see where the puck is going to be.</p> <h3>Don't Show Up</h3> <p>The annual consumer electronics show CES is quite an event. Every year top technology brands hire top music artists, movie stars, and host massive parties to gain the attention of the conference attendees. The goal: draw attention by <i>any means necessary</i> to promote products.</p> <p>And every year, there's one company who never attends: Apple.</p> <p>Instead of blowing money on extravagant shows and famous people to promote their products, Apple hosts their own show. The keynote is almost always given by Steve Jobs, demoing the latest and greatest Apple products. They don't use celebrity endorsements because, well, the new product <b><i>is</i></b> <i>the celebrity</i>. Whenever an Apple event is held, major news networks report on it, fans tweet it, and Apple's new shiny product is the water cooler talk for the rest of the week.</p> <p>Oftentimes where we <b>aren't</b> is more important than where we are. Apple realized that by not going to CES, they could distance themselves from the hoopla. They prefer to let their product speak for itself, instead of a paid endorsement from a movie star.</p> <p>Don't let the &quot;but everyone who's anyone will be there&quot; talk keep you from losing focus on what's really important: creating the best product that you possibly can.</p> <h3>Laser-Sharp Focus</h3> <p>Apple's catalog is meager compared to those of other tech titans. While other tech juggernauts have more than 1,000 products on their lines, Apple only focuses on a few. You'd think this would lead to fewer sales from Apple. After all, the <a href="http://lifedev.net/2010/07/long-tail-keywords/">long tail</a> is where all the money is made, right?</p> <p>It turns out that Apple's &quot;paltry&quot; product offering accounts for <i>massive</i> sales. Apple passed up rival Microsoft early last year as the <a href="http://www.nytimes.com/2010/05/27/technology/27apple.html?_r=1&amp;adxnnl=1&amp;adxnnlx=1299168111-BwtRpiro6HXgFVaTxkuqhw">top technology company</a>, and as of Q4 of last year, was the third-biggest company in the world in market capitalization.</p> <p>Apple's tiny product line is what makes it so successful because they can focus intently on their core products, making sure they're the best in the world.</p> <p>In <a href="http://www.amazon.com/How-Mighty-Fall-Companies-Never/dp/0977326411">How the Mighty Fall</a>, Jim Collins explains that many great companies flounder because they lose focus on the things that made them great to begin with. These companies believe that because they have one great product, any product they release after that is <i>destined</i> to have just as much success. In reality, these extra products only steal focus from their core competency.</p> <p>Companies in every industry fall prey to this problem. <a href="http://lifedev.net/2010/11/more-ideas/">Too many ideas</a> &ndash; no matter how great they are &ndash; in the end can kill a company. Jobs has been fantastic at not pursuing mediocre or even great ideas, only jumping on the game-changing concepts.</p> <p>When you lose focus, you lose the one thing that made you successful in the first place. Changing your industry requires you to have laser-sharp focus on your <b>core competency</b>.</p> <h3>Look First to Remove</h3> <p>What makes Apple products so great? Oftentimes it's hard to pin-point exactly why we gravitate towards Apple products, but that's because it's what they <i>don't</i> have.</p> <p>Tech products are notorious for having lots of fiddly knobs, controls, and towering user manuals. Not so with Apple products. They only have the functionality that makes it possible for even the most non-techy users to use right away. (I can't tell you how many children under the age of five that can play games on their parents' iPhones or iPads, without any instruction.)</p> <p>Fewer features also means less potential points of failure. Apple is often praised for products that &quot;just work&quot;, and much of that can be attributed to the fact that they don't include the kitchen sink, but only the bare minimum needed to create a great user experience.</p> <p>There's a natural inclination to add more and more options and controls to our products. What can you take away that will improve your product?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/glen-stansberry">Glen Stansberry</a> of <a href="http://www.wisebread.com/small-business/change-your-company-and-your-industry-steve-jobs-style">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant">9 Ways Siri Can Be Your Personal Finance Assistant</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stocks-every-recent-grad-should-own">10 Stocks Every Recent Grad Should Own</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center apple business strategy small business Steve Jobs Wed, 06 Apr 2011 21:42:34 +0000 Glen Stansberry 511551 at http://www.wisebread.com What Key Performance Indicators (KPIs) Should You Measure? http://www.wisebread.com/small-business/what-key-performance-indicators-kpis-should-you-measure <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/technology/article/what-key-performance-indicators-should-you-track-john-joyce" target="_blank">http://www.openforum.com/idea-hub/topics/technology/article/what-key-performance...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/what-key-performance-indicators-kpis-should-you-measure" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000003097528Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="184" /></a> </div> </div> </div> <p>The only way for you to accurately understand which Key Performance Indicators (KPIs) you should track is to understand which answers you are seeking. Reports are useless if they don&rsquo;t tell a story, give insights and offer measurable/actionable tactics that help you achieve your goals. You must take a step back and develop a thought process that maps KPIs to your overall business strategy.</p> <p>Here's an example. Maybe you&rsquo;ve recently deployed Google Analytics on your website and you&rsquo;re wondering why you haven&rsquo;t been able to leverage the great data that&rsquo;s being gathered such as:</p> <ul> <li>Total Unique Visitors</li> <li>Pageviews</li> <li>Bounce Rate</li> <li>New Visits</li> <li>Traffic Source</li> <li>Average Time On Page</li> </ul> <p>The ubiquity of free analytic tools has created a flood of raw data, which has caused business owners to get bogged down by countless reports and lose focus on overall business goals. For example, you might think the KPIs you absolutely must track consist of everything served up by your new best friend, Google Analytics. This information overload makes it difficult to glean insights and develop actionable plans.</p> <p>So, let's consider your 2011 company priorities independent of any technology or data. Whether you&rsquo;re planning to increase revenue by 15%, increase average revenue per customer by 20% or increase site traffic by 30%, these goals must be set prior to identifying KPIs. That&rsquo;s the easy part.</p> <p>The greatest challenge in this process is identifying the data, which may or may not already exist, that most effectively drive the desired results. In his book <a href="http://www.webanalyticshour.com/"><i>Web Analytics &ndash; An Hour A Day</i></a>, <a href="http://www.kaushik.net/avinash/">Avinash Kaushik</a> offers a great process to follow called, &ldquo;Three Layers of <i>So What?</i>&rdquo;. This is a simple, yet effective, way to confirm that a specific metric tells a story and offers insights that lead to action.</p> <p>Asking yourself this simple question is very powerful as can be seen in these two examples from the book:</p> <p><b>Top Exit Pages on Your Website (is there a trend?)</b></p> <p>&ldquo;These are the top exit pages on our website in January 2011.&rdquo; <i>So What?</i></p> <p><em>They don&rsquo;t seem to have changed in 6 months.</em></p> <p>&ldquo;We should focus on these pages because they are major leakage points in our website.&rdquo; <i>So What?</i></p> <p><em>We have looked at this report for six months, tried to make fixes but these pages have not dropped off the report.</em></p> <p>&ldquo;If we can stop visitors from leaving the website, we can keep them on our website.&rdquo; <i>So What?</i></p> <p><em>This seems to be a great metric but really doesn&rsquo;t provide insight that drives results.</em></p> <p><em>Visitors are going to leave our website at some point and maybe these are simply logical exits.</em></p> <p><b>Conversion Rate for Top Search Keywords</b></p> <p>&ldquo;The conversion rate for our top 20 keywords has increased in the last three months by a significant amount.&rdquo; <i>So what?</i></p> <p>&ldquo;Our pay-per-click (PPC) campaign is having a positive outcome, and we should allocate funds to these eight keywords that show the most promise.&rdquo; <i>Okay.</i></p> <p>That&rsquo;s it. No more &ldquo;<em>So what?</em>&rdquo; With just one question, you have a recommendation for action. This indicates that this is a great KPI and you should continue to use it for tracking.</p> <p>Although you have access to hundreds of potential KPIs, it&rsquo;s important to remember that perhaps only a few warrant your attention. Here&rsquo;s a quick guide to follow when identifying the best KPIs to track:</p> <ol> <li>List your business goals such as: <ul> <li>Grow revenue by X%;</li> <li>Increase customer retention by X;</li> <li>Increase partner sales by X%;</li> <li>Cut average cost of customer acquisition.</li> </ul> </li> <li>Align KPIs with business strategy;</li> <li>Execute &ldquo;Three Layers of <i>So What?</i>&rdquo;</li> <li>Identify measureable outcomes for each business objective;</li> <li>Analyze data on a daily basis.</li> </ol> <p>Good luck!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/john-joyce">John Joyce</a> of <a href="http://www.wisebread.com/small-business/what-key-performance-indicators-kpis-should-you-measure">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/100-ways-to-make-more-money-this-year">100+ Ways to Make More Money This Year</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce">5 Ways to Protect Your Business During a Divorce</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-helpful-tools-to-manage-your-small-business">6 Helpful Tools to Manage Your Small Business</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/business-start-up-tips-apprentice-finalist-dr-randal-pinkett">Get Business Start-up Tips from “Apprentice” Finalist Dr. Randal Pinkett</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business analysis business data business metrics business strategy key performance indicators small business Fri, 04 Mar 2011 00:35:30 +0000 John Joyce 495262 at http://www.wisebread.com