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Starting a Business? Consider Your Customers and Competition

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Once you’re clear on the difference between an intriguing idea and what may be a genuine business opportunity and you’ve chosen what product or service you will offer,  it is then time to carefully consider who your customers will be.

The entrepreneur must define the customer well,  by using demographic and psychographic (lifestyle) data. The more specific the customer profile that is created, the better the ability to deliver what the target customer wants and will pay you to obtain.

When an entrepreneur fully understands who the customers are,  then he/she can understand what compels them to buy,  how to sell to them (on line or bricks and mortar?),  how to market to them,  how to price the product and how much time and money it will take to win those customers over.

This is why it is always preferable to enter a business in which you have experience.  The best way to know customers is by talking and interacting with them.  That allows you to tailor your services to meet their perceived needs and expectations.

If you’ve already done business with your target customers,  you will have a significant advantage and are better positioned to create a profitable venture.

Be sure to flesh out your customer info by speaking with others who do business with your target customers.  Suppliers and Freelance vendors  can provide lots of useful info. Speaking with your competitors will likewise be very helpful.

Visiting conferences and trade shows that are frequented by your target customers is a smart move,  as those are forums where information is shared.  Competitors may be more forthcoming in these settings.

Analyzing the competition will be a key success  factor for the business.  This is how you’ll find out what customers want from businesses similar to your own,  what benefits they think they’re getting and what price they’ll pay to have what they want.

A thorough competitive analysis allows the entrepreneur to refine the market niche and identify additional competitive advantages.  Good competitive info sets the stage for your marketing and sales strategies.

Visit the stores,  the restaurants and the websites of your direct competitors.  Check out where and how they advertise.  Study their message and methods of interacting with target customers.  Are your competitors making money? How do they make that happen?

Make sure that you have a critical mass of advantages that will improve your chance of success,  be it a hot product,  strong relationships with target customers,  experience in the business,  influential friends or a healthy budget to spend on start up costs.

You probably don’t  hold all of the cards, but before you take the leap  make sure you have enough to give yourself a good chance of winning the game.

More later,
Kim

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Starting A Business? Consider This

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Like millions of people around the world, over the past few months you’ve given some thought to ensuring your economic survival.  How to make money is at the top of the list for many and we’re all exploring our options.  A yard sale or two can help in the short run, but most of us need a steady and healthy income stream.

Polishing up your resume might no longer be a viable option, given that employment statistics have been dismal for several consecutive quarters and the global economy continues to shed jobs.  What little employment exists tends to be at at the bottom of the pay scale.

This cruel reality has lead some of us to decide  what the heck, I’ll go out on my own.  I’ll start a business or become a Freelancer and do some consulting.  That’s why I went out on my own.  Employers did not give a damn about transferable skills, work ethic, strategic thinking or anything else.

All they knew was that I was  too expensive to hire (or keep) and so they didn’t.  To have a roof over my head and food on the table I had no choice but to become a Freelancer. Thank God  I had a few desirable  skills that I eventually learned how to package and market!

This blog is all about sharing knowledge and experience as a way to help readers become more successful Freelancers, business owners and even employees.  My objective is to help you avoid time-wasting mistakes and obstacles and get you into your definition of success,  faster.

First of all,  becoming an entrepreneur requires  objective thinking and creativity.  You’ll need to take a cold hard look at your skill set and figure out what you can possibly do.  Next, you need to analyze the marketplace.  Who will pay for the product or service that you’re able to offer? Does it appear that you can eventually persuade enough clients to pay you enough money to live on?
Also, what relationships can you rely on to help ease your way into the business—refer clients, provide expert advice, hook you up with good deals on equipment or a space to set up shop?

Oh, and BTW, can you afford the start-up costs? Every business requires up front money to get rolling, so the financial requirements of the business you choose need significant consideration.  Banks are making very few loans these days and those who do get funded have near perfect credit.

On the upside, going out on your own during a difficult economic cycle can be a smart  move.  The economy will force you to distinguish between the magical thinking of an intriguing idea and a real business opportunity. You’ll be in the planning and learning stages while the economy lags.  When the inevitable upswing comes around, you’ll be prepared to take advantage and make some money.

Over the next few weeks, I’ll help you take a look at a few basic things you’ll need to consider before you take the leap.

Much more later,
Kim

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Your Personal Brand Part II

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Here we are, back to continue talking about how to increase your perceived value in the marketplace by building a strong brand identity.

Maybe you created a SWOT matrix and listed attributes that make clients hire you and also weak areas that may give some clients pause? Perhaps you’ve taken stock of some major challenges that you face, but have also uncovered some opportunities to pursue?

I hope you’ve made a serious examination of services your clients actually need or think they need (not necessarily the same thing, as you know). You must be able to address their objectives in the story– the brand narrative–you’ll create to establish yourself as the go-to guy or gal who is an expert, a trusted adviser who can get the job done.

PACKAGE and PRESENT

You provide an excellent product (I know you do. That’s why you read this blog!). You owe it to yourself to showcase your talents by packaging your value proposition with care and flair.  Communicate your unique competencies in ways that decision makers will perceive as conferring benefits to them.  Express your professional credentials to differentiate yourself from the competition in ways that clients value.

In other words, don’t tout the fact that yours is the only store that offers bubblegum flavored ice cream if no one really wants it.  Of course, if customers suddenly decide they love the stuff, then you’re golden!

When you’ve crafted a brand narrative that works for you, because it appropriately grabs the attention of your target audiences, spread the good news in a variety of ways that are consistent with your brand.

Showcase your accomplishments and get yourself some speaking engagements, get on a panel or two, propose and lead workshops. You are a well respected expert in your field and you must help the right people get to know and trust you.

Familiarity will work to build trust in your abilities. Trust in your abilities will bring requests for your expert advice and referrals.  Referrals are yours to convert into loyal customers.

Take pains to develop a strong and consistent brand narrative and communicate this message to whomever can help you further your business interests.

ON LINE BRAND  STRATEGY

Type your name and your company name into a couple of search engines.  Are you there? What information is listed? Does it present an accurate impression of you?

Make sure that your brand identity on line is in synch with how you verbally package yourself.  If there is a disconnect, work to fix it.  Create a visible and flattering on line presence.

Create good profiles in the 2.0 media that support your brand identity and strategy.  Be careful posting aspects of your personal life if using the more social media. You wouldn’t want anything to be misinterpreted by clients and prospects.

SYSTEM UPDATES

Finally, remember that your personal brand, like your life, will continue to evolve and will never be static (at least not if you’re doing it right!). Branding is an ongoing endeavor.

As your professional achievements expand and become more sophisticated or specialized and as changing business environments impact your clients’ needs, your brand narrative will change with the times.  Freelancer, I know you’ve got what it takes to roll with the punches!

More later,
Kim

Kim presented the workshop “Your Personal Brand” at the Center for Women & Enterprise in Boston on July 14, 2009  http://www.cweonline.org

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Your Personal Brand Part I

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Billable hours are tanking.  Once dependable revenue streams have slowed to a trickle. Clients are postponing, or even canceling, projects you were depending on.  Jobs that are scheduled to go forward are taking longer to get off the launching pad and cost containment is the phrase du jour.  You are worried.  How can you make clients realize that your contributions add real value to their organizations and should not be passed up?

Freelancing friend, I may be able to offer you some ammunition for this one.  Respectfully, I suggest that it may be time for you to take a good honest look at your position in the marketplace and assess the value that clients place on your services.  I submit to you that it may be time to analyze, clarify, strengthen and  re-launch your brand identity.

Breathe, Focus, List

I recommend that you begin this process by cataloguing your strengths: years of experience, sought-after skills, client list, resourcefulness, positive attitude, work ethic, decision making ability, strategic thinking.  List the reasons that clients hire you.

Catalog also a few key weaknesses.  Remember that you are selling yourself and will benefit from being able to anticipate objections so you can formulate and practice responses to neutralize them.

So if you’re often late for meetings, slow to respond to emails, lack the advanced degree that many of your peers have obtained or freeze up when called to speak in public, it’s best if you acknowledge all that, if only to yourself (knowledge is power, lovey!).

In fact, you may even want to make a plan to remedy a few negatives.  Maybe you can take a course or attend a seminar and deepen a particular skill set? Or perhaps you can  join Toastmasters and learn to become a more confident and effective public speaker? What negatives do clients consider to be the deal breakers? If at all possible, that’s what you work on.

You might find that placing your lists in a SWOT matrix will help you to better analyze your situation.  Remember that Strengths and Weaknesses are internal factors and are therefore  yours to impact.  Opportunities (e.g. lucrative projects you might obtain) and Threats (e.g. the weak economy) are external factors and less within our control.  Nevertheless, examining all factors allows us to better position ourselves for successful outcomes.

Oh yes, you’ll also need to be very clear about who your best clients are, or could be, and why that is so.  It will not be possible to effectively develop a brand identity and a good brand strategy without an accurate understanding of your target markets (i.e. clients and prospects).

Your Story, the Brand Narrative

Yes, this is all very similar to corporate branding. You are both brand manager and branded product. Your personal brand is your corporate identity.  It is a very potent marketing tool and you are advised to consider it carefully and construct it wisely.

Your brand identity will be reflected in all aspects of how you do business and in major business decisions: where and how you choose to advertise; speaking engagements sought and accepted; professional associations joined; clients to pursue. Your professional choices must be consistent with your brand identity and strategy, so be smart about where you’re seen, how you may be perceived and the company you keep.

Your objective here is to enhance your perceived value in the marketplace. You must effectively communicate what you bring to the table– your professional chops, your value proposition–in a clear and concise fashion.  Highlight the attributes and benefits that clients, prospects and referral sources value most and use language and terminology that is meaningful to them.

Get busy!

I’ll pause here and let you go to work on your self assessment and client analysis.  Make your lists, maybe enter them into the SWOT matrix and make a first draft of your brand narrative.  We’ll pick up the thread on this subject next week.

More later,

Kim

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On Surviving the Economic Crisis Part II

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Last week, I attended a roundtable discussion for business owners that was hosted by the Cambridge Chamber of Commerce.  The purpose of BIG: Best Insights Grow (Your Business) was to provide a forum wherein a dozen small business owners and consultants  could share some of our more vexing business challenges and receive some practical advice from the group about how best to resolve those issues.

I offer you a few strategies and action items that surfaced in our forum. You may want to integrate some of this into your practice, so you can grease the cash flow wheels as we enter the traditionally slow summer months.  Most of these things you already know–none of it is rocket science.  Nevertheless, selectively employing a few of these methods is bound to have a positive effect on your billable hours, in the short and long term.

  • Stealth Prospecting

Obviously, we must always keep eyes and ears open for new clients and new ways to engage our current clients.  One way to do that is to network: get out there and attend events, talk to people and let them tell you which products and services they like, why they like them and how they like them offered.  Also, remember to make sure friends and colleagues know what you do and who they can refer to you, so they can be your surrogate sales force.

Another way to set the stage for networking and prospecting is to put yourself on the panel guest and speaker’s circuit.  Meaning, position yourself as an expert.  Pay attention to the program schedules of a few business and professional organizations.  What kind of topics do they offer? What kind of audience do they attract? Can you offer up some of your expertise and give a presentation or join a panel discussion? Are you a member of any such organization?

Build relationships with the event coordinators for these groups and find out the protocol and requirements for their speaker’s bureau.  Have a clear understanding of topics that are deemed appropriate, so you can offer the right talk titles.  Local colleges may also accept proposals for workshops.  Check out noncredit continuing education offerings in a few schools and see who might give you an opportunity to teach. You might even receive a (modest) honorarium!

When you are showcased as an expert in your field, you will be approached by peers and prospects who seek your advice, want to do business with you or want to refer you to someone who does want to work with you.  Now that takes the cold calling out of prospecting, am I right?

  • Strategic Referrals

What better way to get yourself into the good graces of someone who you suspect could be a good referral source for your gorgeous self than to get the process started by referring a client to your object of desire? The chances of receiving some reciprocal billable hours are going to be good, I’ll say.  I think this is the beginning of a beautiful friendship…

  • Smart Pricing

Pricing is a tricky thing. It is both a science and an art. When it comes to services, honestly, who knows what anything is worth? The service is worth what the client thinks it’s worth.  Even in flush times, you’ve gotta know when to hold and know when to fold. You must become a very good negotiator.  No one wants to gouge and no one wants to be undervalued.  These days times are tough, clients know it and everybody wants a “deal”.

Freelancer, you need a good pricing strategy if you want to keep a roof over your head and food on the table!  You need a useful bag of tricks that will keep the billable hours coming in at rates that will keep you solvent.  Here are a few strategies that can help:

When you know or suspect that a client is going to knock down your price, try adding 10-20% to your proposed fee.  Some people love to bargain, love to think they got something at a lower price.  So give that client the satisfaction of “saving” a few dollars. When they press you for a price cut, slowly and reluctantly cave in– then smile like Mona Lisa as you collect your usual fee (or close to it).

Another win-win pricing strategy is to hold your price but add in a few extras or upgrades. Maybe you can even do some small something pro bono.  Many clients will be happy to receive more for their money.  They want to stoke that value proposition.

But alas, sometimes the clients have us over a barrel and we are forced to take a job at a lower fee because we either flat out need the cash or we crave a certain plum assignment. How to take the sting out of this one?

Start by trying to get more hours out of the project. Your hourly fee won’t be great, but the check at the end will be less paltry. You can also ask for future assignments, thus getting them on the hook for more work that you can count on.  Better still, giving a referral discount to this client may be the way to go: each successful referral the client makes means their next job will be priced at a 10- 20% discount.  Pricing is most definitely about negotiation.

This is also the time to offer your clients some flexible payment options.  Consider offering a discount on invoices that are paid in full within 15 days.  Invoicing like a general contractor might also be helpful: ask for a third of the project fee up front, the next third at the project midpoint and the final third within 30 days of the project’s completion. Setting yourself up to accept credit card payments may also prove to be useful.  The downside is the processing fee, but you will make it easier for cash strapped businesses to pay you on time.  As we all know, getting paid is the name of the game.

Good luck this summer and let me know how you make out!