Management model: Ansoff's product/ market grid

Today i will discuss about an essential business model,Ansoff's product/ market grid, it is a very essential model every aspiring entrepreneur and growing business owners should know.

               The ansoff product/market grid offer a logical way of determining the scope and direction of a firm's strategic development in the market place. the firm;s strategic development consists of two related types of strategy: portfolio strategy and competitive strategy. the portfolio strategy specifies the objectives for each of the firms product/ market combinations. it points the dots on the horizon . the competitive strategy specifies the route to reach those objectives. In the Ansoff product/ market grid setting the objectives (portfolio strategy) was introduced as choosing a growth vector, specifying the ultimate future scope of business. the growth vector is expressed on two dimensions: product and markets.

  Later, ansoff introduced the geographical growth vector, replacing the growth vector from his product/marketgrid. the geographical growth  has three dimensions, which the firm can use to define its furture business scope:

1. the market need( such as need for personal transportaton or need for amplification of electric signals.
2. the product/service technology ( such as integrated circuit technology)
3. the market geography

   

   Ansoff's growth vector components products and markets

   
   

deciding a direction and a strategy for corporate growth depends upon a number of factors, including: the level of risk involved , the current set of products and markets, and whether the organization wants to develop new or existing products or markets. in order to plan gor the fuure in a systematic way, it is vital that managers understand the gap between the firm's current and desired position. the ansoff product/market grid and the ansoff cube can be used as a framework to idnetify the direction and oppurtunities  for corporate growth.
   Ansoff introduced four components that cover the portfolio strategy and help specify the desired future business scope.

• geographical growth vecotr
• competitve advantage
• synergies
• strategic flexibility

the geographical growth vector can be determined with ansoff's cube, by connecting the current scope of business with the desired future business scope

the four components are interlinked. Optimizing one of the components is likely to depress the firms performance on the others. in particular, maximizing synergies is very likely to reduce flexibility. the process of selecting and balancing the strategic objectives is a complex matter

How to use it:

to use the product/ market grid in practice, an organization mus first assess its existing product-market combinations and corresponding levels of competitve advantage. then, its desired future business scope is to be chosen as the geographical growth vecotr within the Ansoff cube.

   Next, the feasability of the chosen scope and direction should then assessed wih an analysis of the combination of the intended direction and extent of corporate growth and the firm's distinctive competitive advantages( core competencies). not only should there be the means that enable the chosen scope, those means should also provide the firm with a sustainable competitve advanatage.

How to pitch your business idea

As a passionate entrepreneur, you are accustomed to talking about your product and pitching its features to just about anyone who will listen. You’ve mastered the elevator pitch, the barstool pitch and even restrained yourself from delivering an unsolicited "Starbucks line" pitch. When you’re excited about your business, it’s natural to want to infect total strangers with your enthusiasm.

But no matter how enthused you are, once you get in front of investors your zealous pitch may be a major flop. If you are looking to fine tune your informal pitch into one that gets investors' attention, I would suggest having these five elements:

1. An attention-grabbing introduction.
Make investors pay attention by telling a story. One of the best pitches I witnessed was Rob Frohwein’s pitch for Kabbage, an online platform providing capital for small businesses. He talked about a client who ran an ecommerce company and struggled to secure a line of credit for inventory because banks found his business model too unusual. By providing this story, details and making the problem personal, Rob gave meaning to the pain point Kabbage solves.

2. A clear vision of a world with your company.
Your job is to show investors how your company will improve lives. George Yu, the inventor of the mobile sensor device NODE, used this principle at Nashville, Tenn.'s Southland conference. He told the crowd, “Node has the potential to turn anyone into Superman with superhuman senses.” It not only got everyone's attention, but he was also funded and won the Nissan Innovation Award.

Related Pitch Perfect: How to Prepare to Speak in Front of Investors 

3. A solid plan to achieve your vision.
Every entrepreneur says she only needs to capture two percent of the market. Okay, that's great, but investors care more about how you are going to achieve that milestone. Your pitch should focus on the execution that makes your idea a sound investment. Show investors you have a legitimate plan to maximize the opportunity by proving an actionable plan.

4. A clear exit strategy.
While it may be looked down upon in the world of startups to be thinking about exit strategy, that is not the case when you are pitching to investors. They want to see return and an exit strategy provides just that.

A billion-dollar execution plan alone won’t convince investors of your business’s potential to make them money. You must communicate a strategy for what will happen after you build it, including who will buy it. Make sure before you get in front of investors you research similar deals and how much they earned.

5. Be prepared and remain engaging
Your stage presence makes investors remember you, so train your voice. Perfect your carriage, confidence, passion and projection, yet, don't sound too stiff or scripted. One way to make sure you are prepared is to videotape yourself and watch the play-by-play to refine your body language and delivery.

Once you are in a room full of investors, try to hold an individual’s eyes in the audience until you get a reaction from the person, then shift your gaze to another person. This creates a connection with the audience.

essential marketing strategies for startups

With so many different companies out there today, having a solid marketing strategy is 100% essential.  Without an effective small business marketing strategy, your company will not be capable of bringing in new business. Why? No one will know your business exists!  If you have not yet created a marketing strategy, take the step to create a marketing plan today!

 

 What will a marketing plan do for your business?

1. Build awareness of your business.This will help more people know about your company and the services it provides.
2. Create your company’s image. With a marketing plan, you have the option to create your company’s image.  By doing this, you will enable more people to share your brand and discuss what it has to offer.
3. Develop your customer base for up-selling. Once you establish customers with your marketing plan, you will be able to offer them your other services.  This can be a great way to up-sell more products and services to your already loyal following.
4. Use strong advertising messages to set your company apart from competition. A marketing plan will allow your company to create a message that will help differentiate your company from your competition.  This will enable more consumers to choose your brand over another.
5. Understand and create the best marketing mix strategy for your company. Find the best marketing methods to advertise your company. A mixture of marketing methods will help you share your message in a variety of ways.

How should you go about establishing a plan?

1. Create a marketing budget. You will need to decide how much you want to spend on each aspect of marketing.  If you are a startup, you need to devote quite a bit of money toward marketing efforts in order to establish a customer base. A great way to reduce marketing costs is to find ways and use tools where your new customers promote for you.
2. Research and identify your customers. It is important to understand your target market.  This will give you an idea of how to advertise your products and services to potential customers.
3. Choose a marketing mix. What combination of marketing tools do you want to utilize?  Newsletters, word of moth, promotions, and print advertisements, are just some of your choices.  Deciding on a small business marketing mix will help your company have a solid marketing plan.

   

4. Stick to your marketing budget. This will allow you to follow your goals and keep in line with costs.  You can also make sure you using your budget effectively.
5. Get professional help. Utilizing a marketing firm can be a great idea.  This can help take away some of the stress involved in planning.  A professional company can help you create an effective marketing plan that allows you  to use your budget in the most efficient way.

What are other small business marketing tips?

1. Research current marketing trends, learn how they may impact your target market, and see how they might fit in with your marketing plans.
2. Hold meetings with staff members to discuss marketing strategies and to enable everyone to understand the goals and process of the plan.
3. Take a look at your competition and see how they are marketing their brand.
4. Re-assess relationships with marketing companies to make sure they are helping you with your marketing needs.

These marketing strategies for startups will help you market your brand effectively, and bring in more customers.  Creating a marketing mix that follows your company goals can help create a small business marketing solution that truly works.  Find ways that make your brand stands out!

challenges for entrepreneurs in India

Starting a company isn't easy under the best of circumstances; entrepreneurs find themselves juggling talent recruitment, cash flow, customer relations and more. In India, startups have to keep even more balls in the air including government licenses, power outages and the like. Even uncooperative family members can cause an enterprise to struggle or fail. At this year's Wharton India Economic Forum in Philadelphia, entrepreneurs and venture capitalists came together to share their experiences and offer suggestions on where future opportunities might be and how best to capitalize on them.Sashi Reddy, vice president and general manager of big data and analytics atComputer Sciences Corp. (CSC), started off the proceedings with some advice on making start-ups work. Subsequent panels on entrepreneurship -- moderated by Wharton operations and information management professorKartik Hosanagar -- and private equity/venture capital -- moderated byStephen Sammut, a senior fellow from Wharton Entrepreneurial Programs -- gave the audience a holistic view of the landscape.Sectors with PotentialKnowledge of the Indian marketplace is key for would-be entrepreneurs. The speakers mentioned several industries where they saw untapped opportunities in the subcontinent.Reddy, who earlier founded AppLabs, which was taken over by CSC, sees potential for "small-format retail that can scale to tier II and tier III Indian cities." Among the possibilities are restaurant chains and fitness gyms, as well as agricultural technology and food processing businesses. Mobile payments, education and health care are other areas where he said there is room for growth. What's not hot, in his opinion? "E-commerce, any retail play requiring more than a certain amount of space in tier I cities, or anything too reliant on infrastructure," he noted.According to Aneesh Reddy, co-founder and CEO of Singapore-based Capillary Technologies, in the technology sector, software as a service for small-to-medium enterprises is a promising area. "Unlike in the U.S. or the U.K., where companies are moving from old software to new software, in India they are adopting it for the first time -- on a massive scale," he pointed out.Samir Mitra, an angel investor and a senior advisor to the office of the prime minister of India, mentioned two areas he found interesting. "One is health care," said Mitra. "There is a worldwide arbitrage opportunity, especially because the U.S. has regulations inhibiting innovation in delivery. India can deliver service and product innovation; it can incubate and come up with new business mechanics and export that."The second area where Mitra sees potential is high-value manufacturing. "We've decided we need to make electronics manufacturing a key priority for the country," he said. "By 2030, the import bill for consumer electronics and hardware may surpass the cost of petroleum imports. So we're trying to bring that [on shore], starting with two semiconductor [fabrication plants]" Like CSC's Reddy, Mitra also noted the potential in food processing.Sasha Mirchandani, founder of early-stage fund Kae Capital and co-founder of Mumbai Angels, said that while e-commerce may have slowed down, "ancillary services around that space" are still in play. "We're quite bullish on that," he stated, pointing out that there are Indian companies doing "hard-core innovation" at a global level. Online payment systems are another hot area, he added: "While the past saw lots of failures, we think that 2013 onward, Payments 2.0 [will be big], with an ecosystem around that coming into place."The Funding Is ComingThe good news, according to the experts, is that India has experienced a steady rise in funding sources for nascent companies. Mirchandani observed that in previous years the problem was that there were no angel investor clubs in India. Now, several exist, including the Indian Angels Network; Bangalore, Hyderabad and Chennai Angels, and Calcutta Angels. "There are several accelerators and some incubators," he said. "So the market is segmenting itself nicely. It's still a small industry, so we have a long way to go."Reddy of CSC shared that view. "Funding sources have increased," he noted. "There are angel networks, seed funds, U.S. venture capitalists with India arms and Indian venture capitalists. Unlike in the U.S., VCs [in India] are comfortable with non-tech companies."Mitra painted a fairly bleak picture of the current situation but was optimistic about the future. "Right now in India we have a funding ecosystem problem," he said. "In certain areas we're doing well, but it's still a drop in the ocean." A two-pronged approach is needed to serve both the top and bottom of the pyramid, he noted. "At the bottom, [start-ups] don't get funding. Credit is a huge problem and, if it's a services-oriented business, there are no fixed assets and therefore no collateral. So banks don't look at you." Mitra added that in his government advisory role he is trying to establish seed funding for such ventures and to encourage other groups -- such as domestic pension funds -- to allocate some of their assets toward those investments.Experts on the private equity panel discussed the funding issue from their perspective, noting that a good deal of capital was deployed earlier that did not get any returns for the limited partners. "The froth is yet to get cleared out," said Vikram Deswal, chief investment officer and portfolio manager at East Bridge Capital Management. "Lots of capital we've raised is from people who earlier had given capital to private equity funds in India. As of today, there is a lot more capital raised but not deployed. Interest in India remains, but people are licking their wounds."Anurag Bhargava, chairman of Gurgaon-based real estate fund and developer Ireo, agreed. "The industry is maturing," he said. "You didn't have as many experienced teams five to 10 years ago. Now capital will flow back, but on a more selective basis."Mukund Krishnaswami, a founding partner of PE company Lighthouse Funds, exhorted investors not to worry about the pedigree of a company's principals. "The quality of your promoter is most important. [If they are good] and they understand the business on the ground, don't be afraid to put more capital behind them."Problems Facing Start-upsBut there is also no shortage of reasons not to start a company. Devita Saraf, CEO of Mumbai-based high-end television company Vu Technologies, noted that in India it is 5% more expensive to manufacture a cell phone than to import it. "Duty structures mean that it's harder to produce [goods] in India," she said. "Rupee depreciation is affecting industries like ours. Unless the government either stays out of the way or makes it simple, we will continue to face these issues."Capillary's Reddy added that his business focused on India for the first two years, but found a limited market for software-as-a-service. "We had clients referring us to other clients in the Middle East, in the U.K., etc. But it would take us weeks of paperwork every time we had to [get] salaries out to [our subsidiaries there]. We said it's time to get rid of this mess." The company decided to incorporate in Singapore instead, because of "the ease of doing business there" and the fact that "investors are more confident putting cash into a company with headquarters in Singapore."Social pressures can be a big challenge, observed panelists, when it comes to hiring new talent; people are skittish about joining a start-up because their families might object. The hierarchy of acceptable employment, from a parent's point of view, is clear, said Hosanagar: "They want [their children to join] a multinational company [with a brand reputation]. [The next best is] an unbranded multinational, then an Indian branded company and only then a start-up."Saraf agreed that social issues could be an obstacle. While her family was supportive of her business -- her father, Rajkumar Saraf, is chairman and CEO of Indian PC manufacturer Zenith Computers -- potential distributors were skeptical. "When Vu first came out with LCD TVs six years ago and sent them to the market, about 50 different channel partners came back with the same answer," Saraf noted. "They said, 'Your TV is great; the quality is great; they're selling out, and the service is good. But your boss is a Marwari woman. Once she's married, what will you do to get us spare parts?' We told the team to say, 'She's there just for show; her brother is really running the business.' Then they were fine."Capillary's Reddy illustrated the point with another anecdote. "We asked a close friend to join our company," he said. "One day before starting, he told us his mom and dad were not cool with his joining a start-up: 'My value in the Tamil marriage market will fall,' he explained. So the parents have to be taken care of. Once we had [money] coming in, we'd talk to [new hires'] parents, their spouse's parents, etc. That was helpful."Mirchandani acknowledged the concern but warned that some candidates could be using such factors as an excuse. "I've seen people who don't want to be at a start-up and have dropped out," he said. "Yes, the parents are there, but if someone wants to do it, that won't be an issue."CSC's Reddy offered some words of wisdom for entrepreneurs. When starting a company, the numbers don't tell the whole story, so "don't over-think things," he said. "We create complex models, we tweak one cell, see how it affects others and get confident about it," he noted. But with start-ups you have to go with what your gut says. "There's no perfect business plan. Do some analysis, but then take the plunge."He cited the example of a video game business that he had tried to start. After US$100,000 of market research and careful study of the Chinese marketplace, he launched the business in India, recruiting talent from Electronic Arts and other places. "It was a horrible failure," he said. "The analytics didn't capture everything."Small is BetterBeing No. 1 in a small part of a large market is preferable, Reddy said. In big markets, lots of mistakes are forgiven. "You get more leeway to work through mistakes since there is room for everyone." Such markets allow new players to enter, so playing off big trends is a plus. But it can be hard to identify new trends -- "By the time they're in The New York Times, you've missed the bus." So he advised the audience to look at where VCs were investing. If there's too much buzz, it's too late, he noted. "Select a tiny area of a huge market and become No. 1 in that. Then you can always expand that box."At first, Reddy said, the idea for AppLabs was to be the No. 1 software testing company in the Bay Area in California. "Then we expanded to the U.S. Then we wanted to be tops in enterprise apps in the U.S., then in the U.S. and the U.K., etc."Reddy's final piece of advice? "Boring is good. While [business-to-consumer] gets all the attention, [business-to-business] is easier to make money in. Don't lose sight of the value you bring to customers. Process innovation, frugal innovation, pricing innovation, marketing innovation -- all of these can make a boring business profitable," he said. "The routine stuff isn't easy -- it's just that people don't want to do it because it's boring. Execution will be the only differentiator, so embed that into your organization's culture. Great execution will always beat big ideas unless you are Steve Jobs."

Business plan basics , questions to ask yourself

Business Plan Basics

The business plan is a tool to help you find and explore opportunities.
Students at any level of education can use the concept of preparing a business plan as a method of exploring all kinds of ideas for starting a business. It is merely a series of questions that lead you to think about the requirements and the possibilities of any kind of business. Until you start to ask these questions, you aren't able to visualize the details necessary to be successful in a business.
There are many different approaches to writing a business plan, some more complex than others. But the basic components of a business plan can be organized as follows:
* providing a description of the business,
* choosing the best marketing strategy,
* identifying the management plan, and
* analyzing the finances needed to start the business and make it successful.

WHY DEVELOP A PLAN?

The process of making choices is the most important reason for anyone to learn how to write a business plan. It is fun to think of yourself as a business owner, to dream about your successes, and to talk about your ideas. But when you have to answer the specific questions of a business plan, you must make decisions about the direction your business will take...decisions that may show you that this idea is not likely to be successful. But, no problem, then you can go back and make different decisions until you find a way to be successful.

We sometimes hear people arguing that business owners don't always have a business plan...but perhaps they should. Once you are into the day-to-day operations of a business it may be too late. But most banks value a good business plan when you are looking for funds for your business. And in our educational system it is one tool that can be used to provide learning experiences that open students to the opportunities in their own community.

As a teacher, you can use the business plan as a learning activity at all levels of education. For very young students it can be included as part of a simulation about the processes of business. It can reinforce skills being taught in math, communications, spelling, art, and computer skills. In fact a teacher of history or geography could use the business creativity approach to identifying ways to start a business using their curriculum as the source of ideas. It could give students a closer feeling of what it was like to live in different times in history, or in different parts of the world.

Language teachers have a natural opportunity to teach use of a language for business in other countries by having students create a business for exporting or importing there. You might even connect students with these countries through the Internet.

The closer a student is to becoming an adult, the more important it is to give them real-life opportunities to practice making decisions about a business of their own. The practice of business planning is an experience important for the learning process. And every time a student does this decision-making the possibility of really starting a business becomes more tangible.

A VARIETY OF APPROACHES IN THE CLASSROOM

Many high school courses are teaching the skills of entrepreneurship. In such courses the teacher can give the students many types of challenges to develop a business plan for.....
* a business needed in your town
* a business using your own personal skills and talents
* a business that involves exports to another country
* a home-based business
* a business that could be started with $1,000
* a business that would require $50,000 to start
* a business that would require $1,000,000 to start
* a franchise that you develop and offer nationally
* a service business
* a partnership between two students in the class
* a corporation formed by small groups in the class
* for the worst possible business idea you can imagine ...try it, you will be surprised.

For adult students it is critical to help them actually start a business...because that is why an adult is taking the course. In this case you must deal with realities of finance, skills, and personal abilities. They are beyond the time for dreaming and need help to get started.

TRY PACE

You can find real examples of a business plan in the PACE Entrepreneurship Training Materials available from The Ohio State University. PACE is developed at three levels, 1). for beginners, 2).for more advanced students, and 3). for the adults that are ready to start a business. See information under the curriculum section of this web page.

The following activity is designed for you to give students a chance to learn how to plan a business and experience the process of decision-making that will enable them to do the real thing some time in their lives.

BUSINESS PLAN QUESTIONS

The business plan is a tool designed to help you find and explore opportunities. It also provides you with a way to analyze potential opportunities continuously. A business plan is personal and should never be "canned" or prepared professionally by others. No one knows you or your ideas better than you do. It is the process of seeking the answers to important questions about your enterprise that are important as you try to realize the dream of owning your own business.

Use the following questions to make decision about a business idea of your choice. Be sure to write out your answers...to remember your decisions and build on them.

1. How can you describe the business...in only one paragraph please?
2. What is your product, or service?
3. Who will buy it?
4. Where should you locate the business?
5. How can you attract customers?
6. What is your competition?
7. How much should you charge for the products or service?
8. What advice do you need and who can provide it?
9. How will you organize the managers and/or workers of the business?
10. How will you split the profits? Who is responsible for the losses?
11. What should you consider to be able to produce the product and get it to the customer?
12. How much money is needed to get the business started?
13. How many customers will you have per month and how much will they buy per month?
14. How much does it cost to make the product or provide the service?
15. What are your operating costs? (Include your own salary)
16. How much money will your business earn each month by selling your product or service?
17. How much investment will you need to keep the business going until you make a profit?
18. What is your potential profit per year for Year I, Year II, and Year III?
19. How much money do you need to borrow to start this business?
20. How will you make the business grow in the future?

There are other questions you might ask depending on the type of business you have in mind. There are many different formats for a business plan based on what you need for the business of your choice. The point is to start asking yourself questions and then looking for the answers.

Are you having trouble getting started? Perhaps you should interview a local business owner about these decisions in relation to the startup of that business. Write down the answers and discuss them with other students to decide how you would have started such a business.

Ideas for Starters

You might want to think about some of the following types of business to get your business plan "thinking processes" moving:

• Lemonade stand
• Refreshment stand at local games
• Child care
• Hot dog stand
• Yard care
• Developing a web page for others
• Youth community center
• Shopping service for seniors
• Pet sitting
• Delivery services
• House cleaning service
• Janitorial services for local businesses
• Selling used clothes
• Jewelry making
• Catalog sales
• Temporaries agency
• Computer service business
• Add value to an existing product (packaging, new Marketing local crafts design, new customers, different size)
• Travel services
• Musical group
• Repair services (shoes, electrical equipment, cars, clothing, etc.)

QUESTIONS FOR CREATIVE THINKING

Use some of the following questions to guide your thinking about starting a business:

A. What kind of business would you start if your family would lend you $5000 to get it started?

B. What kind of business would you start if you and two classmates had access to a loan for $100,000?

C. What kind of business could you start if you want to do business with another country?

D. What type of business could you start while still going to school?

E. What type of business could you start using the skills you have now?

F. What type of business could you run while also working in a part time job (to provide the security of a salary while the business grows)?

G. How could you start a business and then later make it into your own franchising business for purposes of expansion?

Setting up a ecommerce business

While it is easier than ever (in theory) to open an ecommerce business, many new and even experienced business owners don’t take the time to lay the proper groundwork. So while you may be in a rush to get your business online, before you go live, make sure you have checked off these 14 items. Doing so will increase your chance of online success.

1. Register a business
While you can set up your new ecommerce business as a sole proprietorship, many small business professional recommend you create a limited liability company, Why? As the name implies,  limited liability in case you are sued. Unlike a sole proprietorship, an pvt ltd. or LLP is a legal entity separate from you. In other words, if someone sues your business, or one of your employees, your personal assets are protected. And for the minimal amount of money required to form an pvt. ltd in most states (typically no more than a few hundred bucks, if that), it is well worth it to protect your personal assets.

2. Open a business checking account, and get a business credit card
Again, it’s important to separate your business assets from your personal assets. So as soon as possible, set up a business checking account and get a business credit card. If you have a good relationship with your bank, contact it first.

Depending on the amount of assets you have held there, you may receive a discount and/or preferential treatment and better rates than opening an account at a new bank. But be sure to check around, visiting smaller local banks and credit unions as well as large financial institutions, to ensure you get the best deal. As for applying for a business credit card, determine which is more important: better interest rates, cash back or rewards – and read objective reviews to determine which card to apply for in that category.

3. Trademark your intellectual property
The last thing you want after going through the trouble – and money – to set up your ecommerce business is someone stealing or copying your business name, logo, products and/or services. So protect your intellectual property by trademarking it with the United States Patent and Trademarks Office (USPTO).



Don’t want to deal with the bureaucracy ? There are several good, reputable sites (e.g., LegalZoom, Trademarkia) that can file your trademarks for you, for a few hundred dollars (on top of the few hundred dollars required to apply). You can also reach out to your local chapter of SCORE (the Service Corps of Retired Executives) to find someone to walk you through the process.

4. Get a sales and use tax permit or resale certificate
Even though your business may be entirely online, at some point you will need to charge and collect sales tax, if only in the state in which your business is registered. To find out what is required in your state, and apply, go to your state’s Department of Revenue Services website – or ask your accountant.

5. Check out the competition and decide how to set your ecommerce business apart
Before you start designing your ecommerce site, you should research your competition. Go online and see what kind of sites similar online businesses have. Bookmark three of the sites you like best. Then write down what it is you like about them. Then send the links and your list to your designer/web developer (more about this, below).  This should speed up the design process – and save you money. Note: Make sure your site doesn’t look or sound too similar to other sites, as you want to stand out from the competition – in a good way – not blend in.

6. Choose the right ecommerce solution
There are dozens of ecommerce platforms and shopping carts out there aimed at small businesses, but which one is right for your business and the person who will be managing the site?  (I use BigCommerce and love it, but it may not be right for every small business owner.)

While seeing examples of other sites created using that ecommerce software is a good start (i.e., make sure you like the templates or, if you are planning on hiring a professional designer, what other pros have done with the software), nothing can replace actually using the software.

Before you sign up, do a free trial. The software company doesn’t offer a free trial? Don’t use it. And when doing the free trial, be sure you can easily add and delete products and add and delete Web pages. Does the software come with SEO tools? Does it offer social media (i.e., Facebook, Twitter and Pinterest) integration? These are all must-haves in today’s ecommerce world. Finally, be sure to check out the company’s refund policy before you hand over your credit card information.

7. Hire a good designer, photographer and writer
Good product descriptions (see below), SEO and marketing are what will drive people to your ecommerce site. Good website design and navigation and great photographs will keep people there and get them to buy from you. As successful ecommerce business owners will tell you, it’s worth shelling out a few hundred, even a few thousand, dollars to create a visually appealing, easy-to-navigate site, especially if you are a retail business (and an absolute must if you are selling food online). People buy with their eyes.

8. Provide search-engine optimized product descriptions that inform, not bore, visitors
Product descriptions are what get people to your site and inform people about what it is you are selling. Make sure your content is descriptive and to the point, without being verbose. There are few products or services that cannot be described in a few well-written sentences, especially when accompanied by a photograph and/or video.

Tip: Think about how much text you are comfortable reading on your smartphone, and use that as your guide regarding length. If your product or service cannot be described in a few sentences and/or with a few photos or videos, you have a larger problem.  

9. Make your site easy to navigate
Make finding products and checking out easy – the fewer clicks, the better. And be sure to include a link to your shipping and returns policy on your Home page. Finally, before you go live, have a few friends and colleagues who aren’t afraid to tell you the truth test your site and provide feedback. 

10. Include Terms & Conditions, Shipping & Returns and Site Map pages

marketing for startups

Startups often assume marketing is only necessary once they're established with a high turnover, but it should be part of their business from the beginning

Few businesses would think twice about getting financial advice – but many still think they can muddle through doing the marketing themselves. But the two most important things for a startup business are finance and marketing. Startups should be speaking to marketing agencies from the beginning – even if it is just sitting down and having a chat in order to get some serious insight from an expert.

People often think the best form of communication for a startup is traditional print and media advertising, but in most cases social media, digital platforms, in-store promotions and trade incentives are better and far more cost-effective options.

There is also the problem with social media that people running a startup assume they know how to use it to market their business, just because they know how to use it to talk to family and friends. Think of it as going into a pub – you don't start shouting your opinions at the front door – instead, you find the group you want to talk to, and then begin dialogue that's relevant and interesting to them. Don't expect people to listen to you unless what you're saying is interesting and relevant to them.

This is the kind of knowledge that an agency can bring to a startup. They can shed a light on how different consumers behave, what they want, how they want to be talked to and what type of product they are interested in.

New businesses often start thinking about marketing by asking: "What do I want to do to the market?" whereas marketing agencies want to know what your consumers are about; they want and work backwards from there, making sure that what you're talking about is relevant to them.

Agencies themselves were once startups; in fact, most of the MAA members were startup businesses in the past 10 years. They are entrepreneurial themselves.

Most agencies will work on 20 or 30 different brands, so they have experience of lots of different markets and techniques of communication.

My advice to a startup? Don't waste your money on mis-targeted attempts at marketing. Apply the same rigour to getting advice from marketing agencies as you would do from financial advisers – and benefit from the honesty, objectivity and expertise that an agency can bring to your business.

how to do a summer internship project, SIP

Want to do more than hang at the local pool or scoop ice cream this summer? A summer internship is a great way to go! Not quite sure how to get going? Here are some tips:

Make a list. Figure out what you want to do – what interests you, what do you want to learn how to do, or what do you think you want to be in 10 years? Write down a few places or lines of work that come to mind. While you’re at it, scribble down a few basic things to narrow your search – what town or area, paid or unpaid, full-time or part-time, for school credit or not.

Research. Look into big companies in your area; most big corporations have internship programs. Stumped? Talk to your school counselor or parents’ friends who have jobs you think are interesting.

Get creative. Don’t want to work in a stuffy office while your buds are hitting the beach? No problem. Look into museums, art galleries, publishing houses, nature centers, eco-research centers, whatever.

Hit the pavement. Online research for big companies and orgs is a great starting point, but walk around your city or town to see if any other places spark your interest. Be bold, if something looks interesting, walk in, ask for an application, or leave your info (including a resume) with them. Don’t forget to smile!
Don’t give up. So your dream workplace doesn’t have an internship program? The search isn’t over yet! Look up who you can contact in Human Resources or who the managing director of a certain department might be, and contact him! Let him know that you’re interested in interning and ask if the company has a program or a way for you to help and learn a few things.

Make sure you can do it! Once you have a few places, ask yourself: Got a ride? OK’d it with your parents? Is it realistic for you to get to the internship during the summer? Make sure you can get a ride (or map out your bus/train route), and if you can walk or bike, even better! You don’t want to commit to something and have to pull out at the last minute, so cover your bases.

Get that resume in shape. What’s a resume and how do you make one? Check out Do Something’s How to create a resume and 11 tips for a great resume!

Make contact. If your internship has a formal application program, write out your application and apply, AND do a little digging to find out who might be getting that app. Give HR a call and ask who handles hiring. Send her a written note or an email explaining why you’d like the job and what makes you good at it. A little extra goes a long way.
Spread your net. It’s tempting to put all your efforts into that dream job, but there are ton of people vying for internships, so make sure you look into at least five options and make contact with them so you have plenty of choices!

Snagged an interview? It’s important to dress appropriately and remember a few simple things. 

Follow-up. If you talked to someone at a company or had an interview, make sure to thank them and remind them you’re out there and would still love to intern with them.

what are core competencies

The main strengths or strategic advantages of a business. Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate. 
A business just starting out will try to first identify - and then focus on - its core competencies, allowing it to establish a footprint while gaining a solid reputation and brand recognition. Using, and later leveraging, core competencies usually provides the best chance for a company's continued growth and survival, as these factors are what differentiate the company from competitors.

The term "core competency" is relatively new. It originated in a 1990Harvard Business Review article. In it, the authors suggest that business functions not enhanced by core competencies should be outsourced if economically feasible.

Exit Strategies for Your Business

Entrepreneurs live for the struggle of launching their businesses. But one thing they often forget is that decisions made on day one can have huge implications down the road. You see, it's not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out.

For those of you who like to plan ahead--and for those of you who don't but should--here are the five primary exit strategies available to most entrepreneurs:

The Modified Nike Maneuver: Just Take It. One favorite exit strategy of some forward-thinking business owners is simply to bleed the company dry on a daily basis. I don't mean run it in the red--I mean pay yourself a huge salary, reward yourself with a gigantic bonus regardless of actual company performance, and issue a special class of shares that only you own that gives you ten times the dividends the other shareholders receive. Although we frown upon these practices in public companies, in private companies, this actually isn't such a bad idea. It's called a "lifestyle company."

Rather than reinvesting money in growing your business, in lifestyle companies, you keep things small, take out a comfortable chunk, and simply live on the income. In one of my most memorable Harvard Business School moments, my fellow classmates and I asked the owner of a small, fabulously profitable manufacturing company why he didn't grow the business bigger and sell it for a gazillion dollars. His response: "Excuse me? You've had way too much schooling. What part of 30-hour work weeks and a $5 million personal income don't you understand?"

Remember, money in the wallet is no longer money in the business. If you're in a business that must invest to grow, taking out too much money can hurt you down the road. Also, if you have other investors, taking too much can upset them. Imagine their surprise when investors in a small business I once worked for received the company's internal loan repayment spreadsheet, showing that the business owner was pulling out bucks by paying his family exorbitant interest on loans while investor loans were repaid at rock-bottom rates over as long a time period as possible.

If you think you're in business for the lifestyle, minimize your dependence on other investors and structure the business to allow you to draw out cash as needed.

Pros

• Who doesn't like seven figures of take-home pay?
• Private jets are fun.
• There's no need to think hard about getting out: Just pull out the money when you need it.

Cons

• The way you pull the money out may have negative tax implications. For example, a high salary is taxed as ordinary income, while an acquisition could bring money in the form of capital gains.
• Without careful long-term planning, you may end up pulling out money now you'll need later.

The Liquidation. Even lifestyle entrepreneurs can decide that enough is enough. One often-overlooked exit strategy is simply to call it quits, close the business doors, and call it a day. I don't know anyone who's founded a business planning to liquidate it someday, but it happens all the time. If you liquidate, however, any proceeds from the assets must be used to repay creditors. The remainder gets divided among the shareholders--if there are other shareholders, you want to make sure they get their due.

Pros

• It's easy and it's natural. Everything comes to an end.
• There's no negotiations involved.
• There's no worrying about transfer of control.

Cons

• Get real; it's a waste! At most, you get the market value of your company's assets.
• Things like client lists, your reputation, and your business relationships may be very valuable, and liquidation just destroys them without an opportunity to recover their value.
• Other shareholders may be less than thrilled at how much you're leaving on the table.

My favorite piano bar in Boston simply vanished one day when the owner decided he was tired of show tunes. His regular patrons were crushed, but then, he didn't consult with us first....

Selling to a Friendly Buyer. If my neighborhood piano bar owner had asked, we might have wanted to buy the business ourselves. You see, if you've become emotionally attached to what you've built, even easier than liquidating your business is the option of passing ownership to another true believer who will preserve your legacy. Interested parties might include customers, employees, children or other family members.

The fictional Willy Wonka handed off his chocolate empire to a little boy who was a loyal Wonka customer, someone who was chosen with great care through a selection process designed to weed out all but the most dedicated Wonka devotees. Wonka was able to choose his heir apparent and ride off into the sunset a happier entrepreneur.

Of course, the buyer needn't come from outside. You can also sell your business to current employees or managers. Often in this kind of sale, the seller finances the sale and lets the buyer pay it off over time. A hair stylist I knew learned a local salon owner was shutting his doors and decided to propose a low-money-down deal to acquire the salon. The owner still makes more this way than he would by closing, and the stylist gets to earn his way into owning a business. It's a win-win for everyone involved.

The purest friendly buyout occurs when the business is passed down to the family. But remember, the key to "family business" is the word "family." Is yours functional? No sooner than you leave the family business to the kids, it's likely they'll end up fighting over who got the larger share, who does or doesn't deserve the ownership they got, and who gets the final word. They'll finger-point for a decade while the business slowly declines into ruin, then blame you for not leaving clearer instructions. If you decide to go this route, you've got a lot of planning to do before getting out.

Pros

• You know them. They know you. There's less due diligence required.
• Your buyer will most likely preserve what's important to you about the business.
• If management buys the business, they have a commitment to making it work.
• Selling to family makes good on that regrettable offhand promise made 30 years ago, "Someday, son/daughter, all this will be yours."

Cons

• You can get so attached to being bought by someone nice that you leave too much money on the table.
• If you sell to a friend, they'll be peeved when they discover they just bought the liability for that decade's worth of taxes you forgot to pay.
• Selling to family can tear the company apart with jealousies and promotions that put emotion way ahead of business needs.

The Acquisition. The acquisition was invented so you can sell your business and leave the kids money, still spoiling them rotten, but at least sparing the business from second-generation ruin. Acquisition is one of the most common exit strategies: You find another business that wants to buy yours and sell, sell, sell.

In an acquisition, you negotiate price. This is good. Public markets value you relative to your industry. Who wants that? In an acquisition, the sky's the limit on your perceived value. You see, the person making the acquisition decision is rarely the owner of the acquiring company, so they don't feel the pain of acquisition cost. Convince them you're worth a billion dollars, and they'll gladly break out their employer's checkbook.

If you choose the right acquirer, your value can far exceed what would be reasonable based on your income. How do you select the right company? Look for strategic fit: Which acquirer can buy you to expand into a new market, or offer a new product to their existing customers? I recently read that a classmate of mine started a company that was acquired during the Internet boom for $500 million when it was just 18 months old. He commanded a huge price because his acquirer thought the acquisition gave them critical capabilities faster than they could develop those capabilities on their own.

But acquisition has its dark side. If there's a bad fit between the acquirer and acquiree, the combined companies can self-destruct. The acquired management team can end up locked into working for the combined company, and if things head south, they get to watch their baby implode from within. Time Warner recently announced that they're thinking of spinning off AOL, almost exactly five years after the two companies merged. What, exactly, did the merger accomplish? It made two CEOs very wealthy--and destroyed years' worth of work and billions of dollars. I'm sure the AOL employees who stuck it out enjoyed that particular ride!

If you're thinking of acquisition as your exist strategy, make yourself attractive to acquisition candidates, but don't go so far as to you cut off your other options. One software company knew exactly whom they wanted to sell to, so they developed their product in a way that meshed perfectly with the prospective suitor's products. Too bad the suitor had no interest in the acquisition. The software company was left with a product so specialized that no one else wanted to buy them either.

Pros

• If you have strategic value to an acquirer, they may pay far more than you're worth to anyone else.
• If you get multiple acquirers involved in a bidding war, you can ratchet your price to the stratosphere.

Cons

• If you organize your company around a specific be-acquired target, that may prevent you from becoming attractive to other acquirers.
• Acquisitions are messy and often difficult when cultures and systems clash in the merged company.
• Acquisitions can come with noncompete agreements and other strings that can make you rich, but make your life unpleasant for a time.

The IPO. I've saved IPOs for last, because they're sexy, they're flashy, and they get all the press. Too bad they make the lottery look good by comparison. There are millions of companies in the U.S., and only about 7,000 of those are public. And many public companies weren't even founded by entrepreneurs but rather were spun out from existing companies. Heck, AT&T and its spin-offs are almost a significant fraction of the listed exchanges!

If you're funded by professional investors with a track record of taking companies public, you might be able to do it. Of course, the professional investors will also have diluted you down to the point where you only own a tiny fraction of your company anyway. The investors will make out great. And maybe, if you're the principle entrepreneur and have done a great job protecting your equity, you'll make some money, too.

But if you're a bootstrapper, believing in a fair IPO is a touchingly na�ve act of faith. Besides, do you have any idea what's actually involved in an IPO?

You start by spending millions just preparing for the road show, where you grovel to convince investors your stock should be worth as much as possible. (You even do a "reverse split," if necessary, to drive up the share price.) Unlike an acquisition, where you craft a good fit with a single suitor, here you romancing hundreds of Wall Street analysts. If the romance fails, you've blown millions. And if you succeed, you end up married to analysts. You call that a life?

Once public, you bow and scrape to the analysts. These earnest 28-year-olds--who haven't produced anything of value since winning their fifth grade limerick contest--will study your every move, soberly declaring your utter incompetence at running the business you've built over decades. It's one thing to receive this treatment from your loving spouse. It's quite another to receive it from Smith Barney.

We won't even talk about the need to conform to Sarbanes-Oxley, or the 6 percent underwriting fees you'll pay to investment bankers, or lockout periods, or how down markets can tank your wealth despite having a healthy business, or how IPO-raised funds distort your income statement, or ...

In short, IPOs are not only rare, they're a pain in the backside. They make the headlines in the very, very rare cases that they produce 20-year-old billionaires. But when you're founding your company, consider them just one of many exit strategies. Realize that there are a lot of ways to skin a cat, and just as many ways to get value out of your company. Think ahead, surely, but do it with sanity and gravitas. And if you find yourself tempted to start looking for more office space in preparation for your IPO in 18 months, call me first. I'll talk you down until the paramedics arrive.

Pros

• You'll be on the cover of Newsweek.
• Your stock will be worth in the tens--or maybe even hundreds--of millions of dollars.
• Your VCs will finally stop bugging you as they frantically try to insure their shares will retain value even when the lockout period expires (Warning: they won't necessarily be looking out for your shares, too.)

Cons

• Only a very few number of small businesses actually have this option available to them since there are very few IPOs completed annually in the United States.
• You need financial and accounting rigor from day one far above what many entrepreneurs generally put in place.
• Some forms of corporation--S-corps, for example--will require a reorganization before they can be taken public.
• You'll spend your time selling the company, not running it.
• Investment bankers take 6 percent off the top, and the transaction costs on an IPO can run in the millions.
• When your lockout restrictions expire, your stock will be worth as much as a third world hovel.

Tips for a Successful Business Development

Bill Zanker, one of the founders of the Learning Annex [and a colleague of mine when we worked at Dreamlife, a Tony Robbinsventure], cooked up an interesting promotion to spread the word about his company and bring in new business whereby he and a teacher from the Learning Annex would make their way to the 86th floor of the Empire State Building and toss $10,000 in checks and dollar bills, some of which had labels affixed that said “The Learning Annex Loves New York”,  to the street.

Then, there are the ad agencies participating in the AMC show, The Pitch. AMC’s official The Pitch show site says, “AMC’s original series The Pitch offers viewers an intense, gripping, never-before-seen glimpse inside America’s top ad agencies. Each week watch two agencies as they compete to win a new client the only way they can: by going head-to-head in a cut-throat, winner-takes-all showdown, a presentation known as The Pitch.” I’m not a big fan. I can only surmise that execs from these participating agencies figure appearing on the show is a great way to give their brands a platform for exposure – and new business, despite the obvious downside if they lose [or worse yet, completely crash and burn].

Of course, there are countless approaches to getting new business in the hopper, limited only by your marketing and business development imagination. But how is it that certain organizations are able to bring in business by the wheelbarrow, and properly serve that business at a profit, while others consistently struggle with business development and execution, binging and purging resources as their revenues ebb and flow?

Failure’s Easy. Success Takes a Little Work.

I’ve been thinking about this lately and wanted to share some of the keys that have worked for me in establishing a foundation that supports highly successful business development and execution [I'd love to add your items to this list, so please take a minute or two and leave a comment]:

• Clarity of Purpose: Business leaders in successful, thriving companies have a clear understanding of what their organizations do and what the business strategy is – and how each and everyone within that business [individually and collectively] will bring that strategy to fruition through thoughtful and focused execution.
• Organizational Competency: Those same leaders geteveryone involved in the business following the same roadmap to success, ensuring that everyone understands what the organization does and what the business strategy is; it’s not a secret that’s just for leadership to know.
• Individual Value:  Smart leaders within top performing businesses take the time educate and ensure that each and every person inside the organization knows precisely what their individual role is and their value in making the business strategy a reality.
• Team Building: Like Lee Iacocca, they hire smart people, pay them really well, make sure they’re onboard with the second and third bullets, then turn them loose; successful leaders get out of the way and let their people do their job. After all, that’s why they were hired.
• Ownership: Kick-ass organizations consistently give their people ownership of complex business and marketing problems [and the outcomes] along with plenty of room to experiment and make mistakes. This approach makes everyone more confident, much smarter…and most important, more valuable to the organization and to themselves.
• Communication: Highly functioning companies, and the people who make them that way, communicate like crazy – consistently managing expectations, assigning and accepting responsibility and providing feedback as often as humanly possible…both inside and outside the organization.
• Authenticity: They don’t reinvent the company [or their pitch] every time they speak with a prospective client. They know that having a solid understanding of who you are and what you believe as an organization goes a long, long way toward building great relationships and the subsequent trust [and revenue] that comes along with the best ones.
• Action: Successful business development springs from activity, which breeds more activity. Top performing organizations know that keeping the hopper full means working smarter, not necessarily harder [or longer hours]. Smart biz dev leaders don’t just reactively respond to RFPs, they proactively create new opportunities by identifying companies that live in their sweet spot, reaching out and establishing an initial dialog that often leads to deeper conversations…and new business.

And once these kick-ass companies earn the business, they try hard not to lose it. They’re very much about the long-term, consistent revenue that’s the result of solid relationships [and solid deliverables], so they focus a lot of time and effort on relationship-building – not only when they’re trying to get a deal signed, but every minute of every day once the ink is dry.

Keep in mind that the definition of a “good relationship” doesn’t necessarily translate into blindly saying “yes” to every request a client has [at least not before thoroughly reviewing it to be sure it's within scope and the organization has the proper resources to deliver the required results on time and within budget] or doing work for free. Smart leaders, and their teams, know that they’re in business to make money – you know, to ‘profit’ – just like their clients. They’re fair and honest about how they work and bill and understand that an educated, empowered client is their best customer [nod to Sy Syms].

Profit and The Laws of Physics – You Can Bend Them, But You Can’t Break Them

The concept of doing business to make a profit is why everyone, on both the agency and client side, should go to great lengths to embrace what my buddy Drew Harteveld, VP of Digital Operations atMartha Stewart Living Omnimedia, calls the “Laws of Physics”. Drew’s a digital product and project manager extraordinaire and the “Law of Physics” he refers to is also known in project management circles as the “Triple Constraint“. As far as I’m concerned, it’s more than just the project management triangle. It’s the foundation of all solid, fair and profitable business relationships. Here’s why:

The figure above is a loose representation of the Triple Constraint. For the purposes of this discussion, we’re making the labels of the points of the triangle scope, time and money [or "scondolies", as I like to call it]. You’ll notice the plus and minus signs after each label; that’s because clients [all consumers, really] always want things that are loaded with features [+], delivered in the least amount of time [-] for as little expense [-] as possible! The circle in the center area of the triangle above represents the ideal engagement; the scope, timeline and scondolies are all pretty manageable. If you’re seeing engagements like this on a regular basis, let me know – we’re going to Vegas.

The scenario above is where the client has told you they need the deliverable[s] as fast as possible. As you can see, when you reduce the time to delivery, you also have to decrease the scope. The cost of the deliverable[s] go up  and you’ll likely need more resources to pull it off faster. The circle has moved toward less time and away from lower cost and more scope.

In the figure above, the client wants the cheapest deliverable possible. However, as you can see, moving the circle toward less cost [I mean less scondolies] means the time to deliver increases while the scope/features are greatly reduced.

Here, the client wants a feature-rich deliverable. Since the circle is now firmly in the “more scope/features” corner, the client will have to understand that the cost will be high and the time to deliver will be long.

Everyone’s Got to Get Paid

We all know the realities of running a business – clients want it all! Low cost, lots and lots of scope/features…and they want it tomorrow. As a consumer, I want that, too. However, I understand that the guy renovating my kitchen’s got to get paid. If I’m asking for additional features, products and/or services that are not within the scope of the original agreement, I’m going to have to pay for them. Clearly, my contractor isn’t going to foot the bill. If he doesn’t get paid for his work and materials, his business will tank.

I bet that sounds pretty intuitive, right? Shouldn’t the same approach also apply to agencies and the way they work with their clients? The interesting thing is that in just about every organization that’s having issues keeping a  business alive, the “Laws of Physics” [and the bullets listed above] are likely being ignored. Completely. Consistently.

A World of [Business Development] Opportunity

Granted, it can be tough to keep a business viable and profitable in these crazy times, especially at an agency where standard product and service offerings have been all but completely commoditized. But the right approach to business development and execution translates into a world of opportunity – and it’s just waiting for you, while your competitors continue to try to figure it all out…and continue to make the same mistakes over and over.

Poor economy or not, your clients still have to do what they’ve always done – conduct business and generate revenue. That means they need your services and products, traditional and otherwise. So, consider refining your business development thinking, strategies, processes or tactics, products or service – or all of it, if necessary, and get out there and fill that hopper with new business prospects.

There’s never been a better time for success.

—
What about you? What are your keys to highly successful business development and execution ? Share your feedback below – please leave a comment.