Setting Yourself Up for Success: Understanding the Business Cycle of Your New Business

It’s February. One of the toughest months of the year for a new business owner. You thought January was bad, but one week into February nobody seems to be buying any of your goods or services.

The temptation to “throw money at it” by buying advertising or more stock, is overwhelming, particularly if you made a little money during the frenzy of December when people are on buying sprees. Put away your credit card, Matilda.  Let’s think this through!

There’s also the temptation to launch a huge media campaign that includes the desperate cry, “Please buy my …” or “Please hire me to ….”

Before you panic, consider whether this is a business cycle issue.

When you developed your business plan one of the areas you took the time to define was your target market. (If you didn’t, this is a good time to do that.) Who are the individuals or businesses who need your product or service?  What’s going on with them in February?  Are they interested in buying your product or service now? Look at the periodicals where your type of product or service is advertised.  What are the preponderance of ads touting? (Is it Valentine’s Day if you’re targeting consumers and Tax related services if you’re targeting businesses?)

You also completed a competitive analysis when you developed your business plan and set up methods of keeping up with what more seasoned business owners selling your product or offering your service were doing, either by checking their websites or signing up to be on their mailing lists. (If not, please do it now.) This lets you see what they’re doing publicly. Apply that to your business. How long would it take you to prepare to be doing the same activities?

There probably isn’t time to cash in on Valentine’s Day or the business tax deadlines (there may be!) but think through what the next cycle will be, and the next, and the next. Walk through a year and plan your campaigns and determine what you need to do to prepare for them and when.

If it’s not a business cycle issue or if you absolutely need to make some sales to get through the month think through a way to package your product or service in a way that compels your target market to act right now.

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Above all, don’t panic.  Think it through.  You can do this.

$1,000 Start-Ups has hundreds of ideas on how to market your particular business. Order your copy today.

Setting Yourself Up For Success: Making Your First Sales

You have to let people know about your business so they can buy your products and services. One of the first steps is to write out and practice the “elevator speech” that answers the question, “What product or service does your business offer?”

Sit down and write down the answer for your business or the business you want to start. Here are some examples to get you started:

  • I am a business consultant who’s just released a book about starting your own business for less than $1,000 and making sure it’s successful.
  • I am an event planner who brings together artists and their art with people who appreciate it, in relaxed venues for an enjoyable evening.
  • I help people make money from the things they own but no longer need. (eBay and Craigslist trader).

That wasn’t tough at all, was it? However, you can increase the probability that you’ll get a sale by taking the next step and “showing” the person you talk to what you mean.

Business Consultant: That first example listed above is me. Friday, I went to see Lauri who’s been cutting my hair for fifteen years. She knew I’d been working on my book, $1,000 Start-Ups, for a couple of years, so I took it with me to show her it had been published. I set it down on the table and moved to the chair to get my haircut. As I was finishing up she asked me how the book was coming and I told her it had been published and reached over and picked it up.

She immediately told me to bring her a copy to leave in the shop with ordering information so her customers could buy the book, demonstrating how much your friends and other business owners want you to succeed.

The man who was next for a haircut immediately spoke up and asked, “Are you Leah?”   I said I was. He laughed and showed me a note he’d jotted down on a piece of paper. It had my name and the name of my book.   He’d seen it on the table, browsed through it, and wrote down the information so he could go find the book.

You can bet I gave him a card with the ordering information.

Event Planner: The second example – the event planner who brings together artists and their art with people who appreciate it and are potential buyers.

In order to conduct an event and invest very little of your own capital you need a venue, artists who want to display and sell their work, and buyers. Create a little ‘book’ that shows the events you’ve planned. Now add to that book a brochure or flyer for the event you’re planning.

Locate a venue, such as a nightclub, coffee shop, or restaurant whose owner would like to attract more business. Offer to hold your event there and bring in people who will purchase food and drinks while they are at the show. People who have a good time will return as customers in the future.

There are always artists who want to display their work, particularly if you are bringing customers in. Offer to include them for a set fee or a percentage of sales. Give the artists flyers and let them know they need to invite their friends and family. If you have 10 artists and they each invite 10 people you have enough of a crowd to generate some sales.

You can make the event more exciting by conducting a silent or live auction where each artist gets to have his work highlighted.

Put together a press release and take it to the local media to get coverage for your event.

After your first event spend the next week talking to everyone involved and find out if they would like to participate in your next event and if not, why not (then make the necessary adjustments).

eBay and Craigslist Trader: The third example given above is the easiest business to start.   All you need is a computer, a camera, and a business card to start generating business. Start by listing and selling your own items. Keep a ‘book’ with pictures of what you’ve sold and for what price to show to anyone you talk to. Have them EMAIL you a picture, write a description and list the item, and determine the protocol to use for delivery or shipment once it sells.

These are just quick examples of the hundreds of ideas in $1,000 Start-Ups for generating your first sales and marketing your business.

Setting Yourself Up for Success: Manage Your Finances

While writing $1,000 Start-Ups, I wasn’t surprised when many of the business owners I talked to answered the question, “Why did you start your own business?” with, “Because I had to make a living.”

In this case, necessity is indeed the mother of invention and if you’ve ever been in this situation you understand very quickly how essential it is to get that business up and running. Even if you have plenty of money put away, if there’s more going out than there is coming in, and you live long enough, you’ll eventually exhaust it.

If you’ve already made the leap and started your own business, begin right now to set yourself up for long term financial success. When you’re starting a business and don’t have much of a financial safety net it’s essential to get your product or service offering defined and out there in the market place. Limit the amount of your savings that you invest in your business by:

  • Reviewing (and documenting) what you’ve already spent and what products or services you have ready to sell.
  • If nothing’s ready to be sold or offered, listing the remaining steps and making a plan to get it done.
  • Limiting or delaying discretionary business expenditures.
  • Beginning now to use low-cost (free) methods to market your products or services.
  • Making those first sales and winning those first clients.

Cultivate and practice wise financial management habits.

  • Draw up your personal monthly budget and stick to it. If you don’t have enough in savings to make it through the next three months, get a part-time job to cover your expenses. (If possible get this at a company where you’ll learn more about the business you’re starting or a business that’s related so you can sell them your products or services.)
  • Draw up your recurring monthly business budget and stick to it. Your business needs to make at least this much, as well as what it costs for materials, to remain solvent.
  • Keep track of everything you earn and spend on a daily basis.
  • Do not co-mingle your business and personal finances. Your business needs to be self-supporting.
  • Put aside 10% of your earnings and save at least three months of both personal and business expenses. This is your emergency money.
  • Continue to save 10% of your business earnings for future investment.

Once your business is clearing more than the recurring business expenses and you have three months of recurring business expenses saved you can afford to start paying yourself.

Even better you’ll have established financial practices that will help assure your continued success.

Setting Yourself Up for Success: Manage Your Time

Ah … time. Einstein said, “All time is now.” And so it is. Today we are each given the gift of twenty-four hours to spend as we will. We can spend it doing things that enrich our lives and the lives of those around us, or we can fritter it away in meaningless pursuits.

Making a conscious decision on how you will spend your time involves:

  • Developing a clear understanding of how you currently spend your time
  • Comparing how you spend your time to your personal and professional goals
  • Deciding if you need to make adjusts to how you currently spend your time
  • Determining whether you’re will to change how you currently spend your time
  • Making the changes

In the companion course to $1,000 Start-Ups, students are advised to do this incrementally. After developing their SMART goals they’re asked to review those goals every morning as they go over their schedule for the day. Then they’re assigned to record how they spent their time in their journal each day.

At the end of each day they review how they spent their time against their goals, to celebrate what they accomplished, and make their plan for the next day.

This simple practice, if followed, even for a week, helps not only to help you spend your time more consciously, it helps you to balance your life. We’ve all heard it said that no one on their death bed ever said, “I wish I’d spent more time at work.”   The implication is that most of us don’t spend enough time with our families or with the people we care about.

However, spending time with those people when your mind is full of “what you should be doing” or while you’re distracted because you’re concerned about how you’re going to support yourself or your family is not necessarily the right thing to do. Planning the time you’ll spend on you other activities so the time you spend with people who are important to you is actually spent with them allows you to be present in those moments.

More often than not when I start to feel stressed because I’m wondering “how I’ll get it all done” or guilty because “I’m spending too much time working and not enough time with the people who are important to me”, or “money’s coming in faster than it’s going out”, I repeat the process of comparing how I’m spending my time against my goals and I find that I’m:

  • Spending time in meaningless activities such as: watching drivel on television, attending an obligatory business or social function where I derive no pleasure or add no value, or surfing the web.
  • Spending time churning, such as: I could do this, no I could do that, no I should do this first.
  • Spending time doing one thing while I’m thinking about another.

Mr. Einstein was right, “All time IS now.” Make today count.