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Monthly Archives: August 2016

Things that Surprised Every Business Plan

If companies focus only on themselves in their business plan, they are making a big mistake. Businesses should use their business plan partly to address the competition and how their idea differs from what’s already out there, said Steve Martorelli, CEO of Turnkey Processing, a payment processing provider.

“First, identify your X factor — what can you do 10 times better than your competition?” Martorelli said. “Next, test your hypothesis by talking to potential customers. Do they value what you are proposing to offer them as much as you think they do? Finding the answer to these two questions is the most important planning anyone can do.”

Companies that value innovation must make it a priority from the start. Your business plan should highlight the ways in which your startup will be original and groundbreaking, said Amy Hutchens, business strategist and CEO of AmyK International, which specializes in executive development.

“Innovation must be a critical component of every business plan,” Hutchens said. “By making innovation part of the plan, the process becomes intentional, not reactive or accidental, and sets the stage for a culture of creativity and innovation for the long run.”

It is highly unlikely that everything about your business will go according to plan. Justin Palmer, founder and president of HomeLife Media, which operates pet-focused websites, said entrepreneurs should have a “contingency plan” that allows them to make any necessary business-model changes should something not go as anticipated.

“An example of a contingency might be, ‘If we do not have 1,000 paying customers within six months of operations, we need to shift product focus,'” Palmer said. “A metric such as this is especially vital if your business operates on the Web or builds software. A business plan is great, but there’s no point in sticking with a failing plan for too long.”

On the other hand, businesses also should prepare for unexpected success. Your business plan should account for normal scenarios as well as highly successful, best-case scenarios, said Elle Kaplan, CEO of LexION Capital Management.

“When I started my business, I was in no way prepared for the success and level of growth we obtained,” Kaplan said. “I should have planned bigger and prepared for faster growth versus being surprised and having to rework my plan.”

A typical business plan will discuss a company’s target market, usually in terms of demographic information such as age, gender and income level. However, businesses should consider looking even further to define their target customers by factors such as lifestyle, needs and desires, said Amber Goodenough, co-founder of fourfour media, a Web design and development company.

“Psychographics ― customer values, lifestyles, habits and interests ― give you a deeper insight into your customers’ needs, wants and frustrations, which then helps you create products and services that really meet those needs and solve their problems,” Goodenough said. “The better you do that, the more money you make.”

As social media remains a dominant force in marketing and customer engagement, a business plan needs to highlight how the company will use social media to its strategic advantage, said Stephanie Ciccarelli, co-founder and chief brand officer at Voices.com, an online marketplace that connects businesses with voice-over talent.

“No business plan should be without a section dedicated to the use of [social media] as part of their marketing efforts and channel for supporting and engaging customers,” Ciccarelli said. “These efforts may also tap into a company’s advertising, search engine optimization and customer service efforts.”

If your business is going to have employees, you’ll want to spell out how you’re going to keep them engaged and focused on their responsibilities, said Bill Rosenthal, CEO of Communispond, a provider of employee skills training. “The plan must include ways to show employees [that] their well-being aligns with that of the company,” Rosenthal said. “Establish metrics for everyone’s performance, and spell out the rewards for meeting the metrics.”

Although it may be the last thing on your mind when starting a business, providing an exit strategy with your business plan can be a great help if you decide to sell the business later on. A well-researched exit strategy can also help you land investors, said Mike Scanlin, a venture capitalist and CEO of Born To Sell.

“As an early-stage company, you need to show investors a path to 10 times their investment,” Scanlin said. “Make a list of exits — mergers and acquisitions or IPOs [initial public offerings] — in your space … to help convince [investors] that if they invest in you, there are plenty of people who will want to buy you in three to seven years.”

One of the key challenges for businesses is actually implementing their plan, said Linda Pophal, author of “The Complete Idiot’s Guide to Strategic Planning” (Penguin, 2011). All business plans should include a guide to implementing the plan’s ideas, she said.

“Often, by the time the planning process is over, the team is exhausted and burned out, and they have a tendency to just go back to doing things the way they’ve always done them,” said Pophal, who also serves as CEO of her company, Strategic Communications.

Working out a detailed business plan won’t do much good if you and your employees don’t stick to it, so companies and employees should be committed to following the points included in a business plan, said Bob Shirilla, co-founder of online retail stores Keepsakes Etc. and Simply Bags.

“The business plan should include a signed commitment by the leadership team,” Shirilla said. “This ensures that the leaders understand and will support the business plan. Consensus decision making is key to moving a company forward. Many organizations fail to achieve their goals because of a lack of understanding and buy-in to the plan.”

How to Start a Business

Every new business starts with an idea. Maybe there’s something you’re really knowledgeable and passionate about, or perhaps you think you’ve found a way to fill a gap in the marketplace. Wherever your interests lie, it’s almost guaranteed that there’s a way to turn it into a business.

Once you’ve narrowed your list of ideas down to one or two, do a quick search for existing companies in your chosen industry. Learn what the current brand leaders are doing, and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, but faster and cheaper), you’ve got a solid idea and are ready to create a business plan.

Another option is to open a franchise of an established company. The concept, brand following and business model are already in place; all you need is a good location and the means to fund your operation.

David Silverstein, a global business consultant and CEO of operational strategy consulting firm BMGI, cautioned would-be entrepreneurs against starting a business just for the sake of being a business owner: You need a viable business model, not just an idea, he said.

Now that you have your idea in place, you need to ask yourself a few important questions: What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? All of these questions can be answered in a well-written business plan.

A business plan helps you figure out where your company is going, how it will overcome any potential difficulties and what you need to sustain it. A full guide to writing your plan can be found here.

Starting any business has a price, so you need to determine how you’re going to cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you are planning to make your new business your full-time job, it’s wise to wait until you have at least some money put away for startup costs and for sustaining yourself in the beginning before you start making a profit.

While many entrepreneurs put their own money into their new companies, it’s very possible that you’ll need financial assistance. A commercial loan through a bank is a good starting point, although these are often difficult to secure. If you are unable to take out a bank loan, you can apply for a small business loan through the Small Business Administration (SBA) or an alternative lender.

Startups requiring a lot more funding up front may want to consider an investor. Investors usually provide several million dollars or more to a fledgling company, with the expectation that the backers will have a hands-on role in running your business. Alternatively, you could launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers.

You can learn more about each of these capital sources and more in our guide to startup finance options.

Unique Business Ideas to Inspire

Container-free local food shopping

Many consumers are concerned about how much resources are wasted in the food packaging process. Often, cardboard, plastic, Styrofoam and twist ties are not recycled, leading to environmental waste. In.gredients in Austin, Texas, solves this problem by offering container-less shopping for locally-sourced, sustainable, organic foods. The company claims to divert 99 percent of materials from the landfills and has produced zero food waste since 2012. In.gredients also offers personal care items and hosts events in its beer garden.

Glass art with ashes

Believe it or not, many companies, such as Artful Ashes, create glass art using the ashes of deceased loved ones. This memorial business has been operating since 2012 and offers mourning customers a way to remember their lost loved ones or pets. Using just a tablespoon of ashes, you can order glass art in the form of hearts, spheres or pendants. Each piece is hand-created in Seattle, Washington. Death, though not a popular topic, is inevitable, so businesses like this will never run out of customers.

Odor-free sponges

Stinky sponges are disgusting. Folcroft, Pennsylvania-based Scrub Daddy solves this problem with a scratch-free, non-smelling sponge. This company had a rocky start when it was formed in 2012, but since their 2014 Shark Tank appearance and the assistance of Lori Griener the business has really taken off. Now you can find Scrub Daddy’s products in big box stores such as Bed, Bath and Beyond, Lowes and Walmart.

A four-course daily special

Located in the heart of the Napa Valley, Thomas Keller’s Ad Hoc offers a unique, four-course daily menu of comfort food dishes, such as spicy fried game hen, pot roast and coconut pudding. Each for-today-only menu is handwritten and posted in the restaurant and online. This popular eatery has been open since 2006.

Free lunch (with a side of marketing)

Manhattan’s Lunchspread takes everyone’s love for free food in the office and adds a genius marketing strategy for local restaurants. This company helps new and under-the-radar restaurants build up their customer bases by matching businesses in the area to food they’re likely to enjoy, and delivering free samples right to those businesses’ doors. After the samples are delivered, the recipient group fills out a survey about the food. Then, Lunchspread schedules you for another surprise sample delivery. Each delivery comes with coupons and a card full of details about the restaurant. That way, you can learn more about where your food came from and reorder from the restaurant if you and your employees enjoyed the meal.

Shareable office space

Every day, technology makes it more and more possible for employees and entrepreneurs to do their jobs and run their businesses from anywhere, which means businesses don’t necessarily have to invest in their own office space. WeWork provides office space for the office-less, with flexible month-to-month membership options for everyone from individual freelancers to large companies. Freelancers who prefer to work outside of their homes can have a more reliable work space than a local coffee shop, and companies and other teams can have a place to collaborate and hold meetings and events, for example. WeWork, which was founded in 2010, has locations in more than a dozen cities across the United States as well as locations in Israel, the Netherlands and the United Kingdom. The company also fosters a sense of community among its members, so you can network with peers and customers while saving money on rent and other fees that come with maintaining your own office space.

Tinder for dogs

Borrowing a page from popular dating app Tinder, BarkBuddy makes it easy to find and adopt the perfect dog for you. Users tell BarkBuddy what they’re looking for in the perfect pup, and then swipe yes or no on different profiles of dogs in their area. Once you’ve found the right dog, you can set up a meet and greet through the app.  The company ensures that everyone using the app is qualified to adopt, too. You have to fill out an adopter profile to be approved first; otherwise, you won’t be eligible to adopt.

Education a la carte

Do you ever find yourself wishing you could go back to school, or maybe even teach a course in a subject you’re skilled in? Skillshare, founded in 2011, makes both of these things possible. The company allows experts to teach online courses on any subject they choose via short videos, while students can watch classes at their own pace and use the community to get feedback. Students can even take classes off-line via smartphones and tablets if they’d like to learn on the go. And unlike college or graduate school, with their high tuition rates, Skillshare costs a small fee of $10 per month, with a free 14-day trial. Half of that fee goes toward paying the company’s teachers, so if you’re an expert at something, it’s a great way to make some extra money, too. Skillshare also gives back; according to the company’s website, for every annual membership purchased, Skillshare gives a membership to a student through the company’s scholarship program.

Bedside service

Being pregnant can be a physically and mentally exhausting nine months for many women. Hoping to make pregnancy a little easier, Stephanie D. Johnson founded Bed Rest Concierge. The business provides a wide variety of pre- and post-delivery services, including creating and managing a baby registry, birth announcement creating and distribution, nursery design, diaper delivery service, laundry service and hospital preparation. In addition, Bed Rest Concierge offers a number of “pampering services,” such as manicures, pedicures and facials.

Individually packaged small items

While bigger might be better for some, Minimus takes a different approach. In operation for nearly a decade, the online company offers more than 2,500 different individually packaged products, including travel-size toiletries and individual servings of various food items — everything from chips to Tabasco sauce. When it was founded, Minimus did not have any employees and was housed in 500-square-foot space. Today, the company takes up two large Los Angeles warehouses and employs dozens of workers. In addition to the individual items, Minimus sells premade kits specially designed for different uses, such as baby and family kits, outdoor kits, first-aid kits and military care packages.

Places to Find a New Business Idea

All successful entrepreneurial ventures have one thing in common: They solve a specific problem. Whether they fill a gap in the market or improve upon what’s already out there, good business ideas demonstrate what the issue is and why they have the unique ability to address it.

If you’ve been racking your brain for a way to start your own business but keep coming up short, you might just need a change of scenery. You never know where inspiration will strike, so get up and explore these 10 places to find solvable problems — and, therefore, great business ideas.

Think you’ve found your perfect startup? Do some research to make sure the idea is legal and feasible, and then visit our step-by-step guide to starting a business.

In the “there’s an app for that” era, it may seem like every mobile application under the sun has already been thought up and built. But that’s not necessarily the case, as many people discover when they scour their smartphone’s app store searching for something that doesn’t exist. Perhaps an app you recently downloaded doesn’t function the way you’d hoped it would, or doesn’t offer a certain feature you wanted. To find out if there’s interest in the newer, better app you want to create, ask friends, family and others in your network. Once you’ve done your due diligence, you can use a DIY app maker or, if you have very little tech experience, hire freelancers to build it for you.

If you’ve ever done an exhaustive Internet search for a specific item that returned no results, you have three options: settle for something close enough, give up entirely or do it yourself. If you’re the kind of person who chooses the DIY method (and can do it well), you have the opportunity to turn a frustration into a lucrative business. Check forums to see if others are searching for the same product(s), and then open up an online shop to sell them. This can also work well for specialized service-based businesses.

If there’s one thing people like to do on social media, it’s air their grievances about everyday life. Most of the time, these types of updates are mundane (and probably a little annoying), but if you pay close enough attention to those hashtags and status updates, you might start to see some patterns emerging. Look for phrases like, “Why isn’t there a … ” or, “I wish there was a …” — you may be able to offer a solution.

As with social media, people love to talk about the products they’ve purchased and places they’ve visited on sites like Amazon, Google and Yelp. Most consumers will read and use negative reviews to determine if they should avoid the product or establishment, and that company’s loss could be your gain. See what people are complaining about, and try to come up with a business idea that would fix the problem.

Look around your house or apartment. What are some of the frustrations you encounter there? Dusty air vents? A messy bathroom? Unraked leaves on your lawn? If you’re noticing these things in your own home, there’s a good chance other people are experiencing the same problems. By launching an in-home service business, you can help others take care of these time-consuming household tasks.

The people who live near you can be a great inspiration for business ideas. Think about the demographics of your neighborhood or local community. If your town has a lot of working parents, a service that offers to run errands or provides child care might be in high demand. A neighborhood with a lot of senior citizens could use independent home health aides. Are there a lot of dog owners nearby? Try a pet-care business like pet sitting or dog walking.

If you want to start a part-time business outside your current job, ask your co-workers what kinds of products or services they’re missing in their lives. Maybe someone else with a side business is looking for a bookkeeper or financial adviser. Others might be looking to enroll their children in affordable art or music classes. Small talk in the break room is bound to lead to at least a few viable ideas.

Are you a food lover? Seeing what’s missing from the shelves at the grocery store or farmers market could help you come up with a made-to-order culinary business idea. Jams, baked goods and specialty diet items (gluten free, vegan, etc.) are especially good choices for an artisanal food startup. Alternatively, you could test your gastronomic skills with ingredients from the supermarket and open up a restaurant or food truck.

While you might not actually open up a brick-and-mortar retail location, perusing your local mall might give you some ideas for a business of your own. You could launch a line of homemade natural cosmetics to rival the pushy salespeople from that kiosk, a clothing line to produce something different from the same old items in every apparel store window or an online craft shop to offer personalized alternatives to generic card-store knickknacks.

If you’re a parent, you know that any product or service that will help your child is worth the money. Think about the gaps you see in the market, and next time you pick up the kids from school, ask other parents if they feel the same way. Not a parent? Ask family members or friends with children what kinds of things they want (or want improved) but can’t currently find for their kids.