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A 10-Step Facebook Cheat Sheet for Biz Owners

Despite its massive reach and wide adoption, Facebook remains baffling to many business owners. Facebook itself has never really understood small business, and hasn’t done a great job explaining how biz owners can use it to grow sales.

To Facebook’s credit, that’s starting to change as they provide more and better tools top help small firms, local businesses, professionals, start-ups and others leverage a platform that now claims over 1 billion users.  If you have a Facebook business page, you’ll be hearing more from Facebook as it roll’s out a variety of new ways for small companies to use paid advertising.

So far, however, the vast majority of local businesses are sticking with what they can get from Facebook for free – which is actually quite a lot.  Only about seven percent of small businesses surveyed recently by Merchant Circle are using paid promotional services on Facebook. That compares to 70 percent who are now using Facebook’s free features to promote their business.

The good news is that Facebook has upgraded the free tools and information it offers to help you succeed. The Facebook for Business section (www.Facebook.com/business) has helpful how-to tips and guidance on everything from building your page to best practices for engaging users. You’ll also find interesting stories on how other small businesses are using Facebook successfully, and a list of helpful resources.

Success always starts with building an engaging Business Page – the free foundation of your effort to grow with Facebook.  Here’s a quick 10-step cheat sheet on what to do:

1. Your Category

Choose a category and give your page a name that represents your business.

2. Your Photo

Pick a photo or logo to use as your “profile picture.” This is the smaller image associated with your page. In some cases, this might be your photo, a square version of your logo (beware: non-square logos can end up being chopped off), or some other graphic representation of your business.

3. Your Tag Line

Create a “tag line” or short sentence that captures briefly what your business is about – specifically what you do or sell, and the value you offer.

4. Your URL

Create a custom Facebook web address for your business that’s memorable and shareable.  The part you pick is what comes after Facebook.com. For example, Facebook.com/StateBicycle.

5. Your Cover Page

Select a “cover page” photo or other image – preferably something that people would associate with your business. Use a high quality image, as it will be featured prominently on your page. It’s the first thing people will see and should showcase your product, service or brand. Size restrictions are very specific. It’s best to use a horizontal image that’s 851 x 315 pixels. Avoid generic photos. It’s much better to use an image unique to your business, such as a popular menu item for a restaurant, or perhaps a customer using your product or service (with their permission). You might have to experiment with a few different images to see what looks best.  Avoid putting contact information or other business details in your image. Those should go in your “About” section.

6. Your News Feed

The “news feed” is the centerpiece of the Facebook experience. You can easily create different kinds of “news” or “posts” for your feed, including written text updates, photos, videos or questions. People who “like” your page will see your updates in their own news feeds (one reason you’ll want as many “likes” as possible). The news feed is where people spend 40 percent of their time on Facebook. This is where people engage and share ideas and information.

7. Your Posts

Short posts work best – no more than 250 characters (about 50 words). They’ll get 60 percent more likes, comments and shares than longer posts.

8. Your Sharing

The best things to share, however, are photos (including photo albums) and videos. People are twice as likely to engage with these as other types of posts.

9. Your Deails

To add details about your business, click on the Edit Page button in the admin panel. Then choose “Update Info” to change or add what you want.

10. Your Invitations

Invite people to like your page – including your community of friends, family, customers, employees and others who care about your business. The “Build Audience” button on your admin panel will show you some things to try.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

5 Keys to Improving Search Ad Results

Millions of businesses use some type of paid search advertising to attract customers and prospects to their location or website. Pay-per-click (PPC) advertising – also called search engine marketing or simply paid search – can be an effective, low-cost way to gain visibility online. If your business is using or planning to use paid search advertising, here are five keys to getting the most bang for your buck:

1. Make your keywords really count

Keywords are the essence of PPC advertising. This is what you are actually paying for – the right to show up in results when customers or prospects search for specific words and phrases. The more carefully you choose those keywords, the better your results will be. Ideally, the keywords you buy should match the terms that your customers are most likely to use when searching for your products or services.

But that’s harder than it sounds.  Customers often think in different terms than business owners or professionals and might use different words and phrases to describe the same thing. In short, buying the wrong keywords won’t get you anywhere.  Google has a good keyword tool that can help you find the precise words and phrases that people use most often to search for millions of different products, services and solutions online. Visit www.googlekeywordtool.com.

2. Consider “negative keywords” as well

Selecting keywords is a little like preparing a party guest list. There are people you choose to invite and some you choose to avoid. In similar fashion, using “negative keywords” for your search is like crossing certain people off your guest list. Negative keywords that you specify will not trigger your ad. Thus, for example, if you sell only new or paid services, you might put the terms “used” or “free” on your negative keyword list. That way you won’t pay for people seeking only used or free items.

But using negative keywords is a bit of balancing act.  If you use too many of them, your ads might end up reaching too few customers. If you don’t use any negative keywords, however, your ads might show to people not really interested in what you offer.

3. Be conscious of your quality score

Your ad’s “quality score” is something that many small businesses fail to consider. Unbeknownst to many business owners, search engines don’t consider all ads equal, even if you pay the same or even a higher rate than a competitor. Google, for example, assigns each ad a quality score based on how relevant it considers your ad, your keywords and the “landing page” you are linking to. Their goal is to deliver the most relevant and useful ads to people searching online. The higher your quality score, the more often your ad will be seen by the best searchers. If you use Google AdWords, you can check your quality score in your online account (under the Keywords tab).

4. Write compelling ad messages

Search ads are extremely short so you have to make every character count when you write your copy. Hone in on only the most critical benefits and features of what you offer, knowing your goal is to get someone to click on your words. Include your keywords in your ad copy so searchers know your ad is relevant to what they want. Ads that include the exact search term get more clicks.

Emphasize any unique selling points you have, and include a call to action such as “buy now,” “sign up for a free trial” or “request a quote.”

5. Send users to the best landing page

When someone clicks on your ad, the page on your website that you send them to is the “landing page.” But it doesn’t have to be your homepage. The idea is to send people to the most relevant page on your site that relates to their search, and that helps them make a purchase.

To improve conversions – and get a higher quality score – try to match the text in your ad to the message and other content on your landing page. Don’t make visitors hunt and click for offers you featured in your ad. They should be able to find what they’re looking for on the landing page.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

The Magic of Test-and-Learn Marketing

When business owners create products or services – and the marketing plans to sell them – they often base their decisions on what customers tell them. But which is more important:  What customers say? Or what they actually do?

The answer, of course, is actual behavior. And therein lies the power of a marketing trend that’s changing how millions of business owners think.  It’s called A/B testing, and at its core the concept is rather simple: Test something several different ways in the real world and see what works best. Then go with that. What could be more basic?

Yet businesses both big and small trip on this every day. They survey customer preferences and base decisions on what they say. But stated preferences can’t hold a candle to actual behavior when it comes to identifying what works – and what doesn’t.

The Internet world has long used A/B testing to try out different website designs.   But the concept is so straightforward and effective that it can apply to almost any circumstance where a choice must be made. And for small businesses, the test-and-learn approach makes perfect sense.

It’s Just What it Sounds Like

A/B testing is exactly what it sounds like. You test approach “A” and approach “B” and see which does better. The key is that you do it in the real word with real customers and real-time results. And you keep doing it with different customer segments until you have the answers you need.

In buzzword terms, this is a “data driven” approach. The “data” are the results of the battle between A and B.  You need to do it for different customer segments because while Option A might win generally, some segments might favor Option B.

One reason A/B testing works is that customers often don’t know themselves what they really want. They might say one thing, and do another. Sound familiar?  A/B testing cuts through the fog.

Entrepreneurs are told over and over to conduct surveys and other traditional market research. But observing actual behavior is almost always a better predictor of future behavior.  The hugely popular drink Red Bull is a good example. When first surveyed about it, customers called it disgusting. Yet annual sales are now in the billions of dollars.

Solid Objective Answers

The beauty of A/B testing is that it has no problem delivering solid answers about highly subjective preferences for such things as taste, color, shapes, images, layouts and the like. If you simply ask customers which color they prefer, for example, they’ll express a preference.  But when you actually observe and measure their response to different colored products, packaging or even web pages with A/B testing, the results might be radically different.

In the real world of small and local businesses, what this means is that while many things influence consumer purchase behavior, the consumers themselves are often unaware of them. For example, the package something comes in has a big influence on purchasing, even when it shouldn’t matter. Music influences what people buy and how long they spend in a shop, restaurant or pub. Lighting influences how people notice products and buy them. Other factors include smells, excitement, the number of choices (fewer can be better) and how prices are displayed.

Philip Graves, a consumer behavior consultant, says that while these things, and many others, influence what we buy, consumers usually don’t have the faintest idea their thought process has been altered.

Offer Different Choices and Measure the Results

The trick here is not to ignore what your customers say, but rather to pay far more attention to what they do by offering different choices and measuring and observing (first hand if possible) the results. Don’t simply ask customers to “imagine” something. You have to create it and actually let them experience it. This live testing gets the best results by far. It works even better if people don’t know they’re part of a test. You want people to behave as normally as possible.

Just remember. No matter what business you’re in, it’s vital to continuously test, learn and adapt. Asking people what they think is no substitute for experimenting in real time. You don’t have to fully understand why Option A performs better. If it does, go with it.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

14 Ways to Market a New Product or Service

Marketing a new small business product or service in a highly fragmented media world has become trickier than ever. Relying only on slow-moving, old-school methods such as direct mail and print ads is a thing of the past. Today, success belongs to those who compile the most effective media mixture.

The media mix you choose could be the difference between cheers and yawns, says Dan Adams, whose firm Advanced Industrial Marketing conducts training workshops worldwide.  The first step for any business owner is simply to understand the different online (digital) and offline (traditional) options.

Compared to traditional media, online marketing makes it easier for you to track results and generate low-cost leads, notes Adams. But most importantly, digital marketing makes you “findable” on the Internet.  In most transactions today – and especially business-to-business – the prospect finds the supplier, not the other way around.  And that’s usually through an online search.

14-Course Marketing Menu for Small Business

Here are today’s top 14 most effective marketing methods, including seven digital and seven traditional:

1. Online Ads

You can run pay per click (PPC) ads with search engines or contextual ads displayed next to related articles.

2. News Release

Done well, this is incredibly powerful for directing Google searchers to your website. Send out news releases full of content that will appeal to readers (and editors) of online magazines, journals, and blogs. Include both a link to your website and the keywords your prospects will likely use in their Google searches.

3. E-mail Marketing

This is especially useful when you have hundreds or thousands of prospects in your target market. There’s stiff competition for attention, so consider getting help from a specialist here. It’s definitely a science.

4. Online Presentation

Delivering slideshow and video content through your website is a great way to attract attention and persuade prospects that your solution is simply wonderful. Done well, this is also one of the most powerful ways for you to build credibility.

5. Social Media

This is still emerging as an effective medium, but it’s already proving helpful when local businesses take the time to build long-term, meaningful conversations with prospects.

6. Webinar

This is great way to connect with hard-to-reach prospects, especially professionals and business executives. As with e-mail marketing, there’s a science to this, so consider working with a firm that specializes in setting up and hosting webinars.

7. Search Engine Optimization (SEO)

This is everything you do to rank high in Google searches, and it should also be the glue that holds your online product launch campaign together. It all starts with understanding the keywords your prospects will use… which should start during customer interviews in the front end of product development.

Seven Traditional Media Tools

1. Print Ads

This method is becoming less popular relative to online media but is still helpful for keeping your business or brand familiar and for popularizing product launch keywords for online searches.

2. Press Kit

This collection of pre-packaged materials—sent to members of the media—builds credibility with editors and journal writers. It helps them tell interesting stories about you and your product.

3. Print Article

Articles and trade or technical papers in journals now end up online as well, so fill your article full of well-planned keywords and web links to draw prospects to your website.

4. Direct Mail

This can still be an effective product launch tool, especially as your competitors switch their focus to digital inboxes. Studies show many Internet users have a printed publication in their hands while they are searching online.

5. Trade Speech

A well-delivered presentation conveys lots of complex information to a captive audience. Consider professional help to avoid “death by PowerPoint,” rehearse hard, and try using tag-team delivery.

6. Trade Show

These remain highly influential, but they are also time consuming and costly. Make sure your staff is trained and your lead follow-up is strong, or you’ll waste time and money faster here than anywhere else.

7. Sales Visit

If you sell B2B, this is still the most effective—and expensive—product launch approach. Use a disciplined lead nurturing program to make each sales call count. And spend the time and money on great sales tools and sales training to make your sales force look good.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

What Every Business Should Know About Pricing

For many small businesses, survival depends increasingly on finding the ever-elusive “right price” for whatever goods or services are being sold. But there’s no magic formula.  No matter what you’re selling, the “right” price to ask is never clearly defined.

For one thing, costs differ from business to business. Online businesses, for example, don’t have the overhead of staffing retail stores and often aren’t subject to the same sales taxes. So an online store can sell at a lower price and still make a profit.

Chip Averwater, a third-generation retailer and chairman of Amro Music Stores in Memphis, TN, has seen it all and has developed a list of tried-and-true pricing advice for other business owners. Here are Averwater’s top pricing tips:

The right price isn’t a multiple of wholesale. It’s tempting to price by simply using a fixed-percentage markup from wholesale. But that strategy assumes all expenses of a sale are determined by the wholesale cost. To price correctly, argues Averwater, you must do it individually and by feel, with consideration given to the total expenses of the sale, customer price sensitivity, competitive options, and the sale’s potential contribution to other business.

Know the difference between wholesale cost and cost of the sale. Wholesale is the cost of the merchandise, not the cost of the sale. Think about it: The price paid to the manufacturer is only the first of many expenses in a transaction. Sales can’t be made without including expenses for rent, salaries, advertising, utilities, freight, maintenance, taxes and others. Just because a sale has a gross margin doesn’t mean it’s profitable.  Unless the price covers all of the sale’s expenses, you are taking money out of your own pocket to make it.

All sales should bear operating expenses. Some business owners subscribe to the theory that since expenses are fixed, so they should accept every sale that has a positive gross margin. But here’s the problem: When are expenses ever really fixed? Sales don’t happen in a vacuum. Boosting sales requires increases in personnel, space, inventory, handling, and virtually every other business expense. In fact, every sale incurs operating expenses so its price should be sufficient to cover them plus a profit.

Practice your pricing math daily. Turns out your math teachers were right. You do need this skill to survive in the real world. You need a clear idea of the cost of every sale, service, and activity your business engages in. That information helps you decide what to stock, what to promote, where to channel your investments and efforts, and of course, set prices. Averwater’s advice is to regularly sit down with a spreadsheet and divide the list of expenses across your product sales and services. Only then will your costs become clear.

Don’t try to offer the lowest price. You’ve probably seen it before: Weaker competitors offer lower prices to attract more customers. At first glance, this might not seem like a bad strategy. But those companies are crossing their fingers and hoping that when the dust settles, there will be a little profit left over.

“It’s futile to try to price below desperate competitors because they’ll always drop their prices below yours,” says Averwater. “Differentiation is almost always a better strategy. Offer superior products and services that customers are willing to pay more for.”

Reputations are made on price-sensitive items, margins on the rest. Price-sensitive items are the ones bought frequently and advertised often. In a grocery store, they’d include bread, milk, and soft drinks. In a musical instrument store, they’d be strings, reeds and picks. Because customers buy them often, price differences between stores are more apparent.

“Pricing these items low creates a value image for the store,” says Averwater. “Higher margins on other merchandise allow the store to make a profit.”

It won’t sell if it’s not on sale. Americans love the thrill of a bargain. In fact, customers have become so accustomed to discounts that many won’t make a significant purchase unless the product is on sale. Many furniture and clothing stores schedule only brief intervals between sales, which they use to catch up, restock, organize and collect prospects for the next sale. Many department stores end one sale only as the next begins.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

The 6 Vital First Steps for any New Business Idea

You’ve just come up with a killer business idea. What now? Glad you asked, because this is where millions of would-be entrepreneurs stumble without ever getting started. Before you create your product or service, try to raise money, file for a patent or write a business plan, heed these words: That’s not what you need to do!

Here are the six things you must know in order to even justify writing a business plan, let alone investing money:

Step 1: Road Test Your  Idea

This critical but often-skipped step has saved many an entrepreneur from certain failure. Before you write one word of a business plan, or spend a single dollar, you need to honestly – and I emphasize honestly – assess the validity of your idea, or the promise of your product. Think of it as a sanity check on whether your idea is really the basis for a successful business, or more wishful thinking than you first thought.

A business plan won’t tell you this. That comes later once you’ve proven your concept. But that plan is guaranteed to be vastly more effective with the road test behind you. The steps that follow here will help you with your “road test.”

Step 2: Find the Fatal Flaw

Every business that flops has a fatal flaw of some kind; or perhaps many. Your mission is to find that flaw before it finds you. And banish the thought that your idea is perfect. It’s not. One mark of a smart entrepreneur is a willingness to constantly question his or her own ideas.

Ask yourself: What am I missing? What possible pitfalls am I not seeing? How might competitors respond? What on Earth makes me think that my business or product idea will work when the great majority of others don’t?

Now you’re starting to get it. But don’t stop there. You’re not just looking for things that might go wrong, you should also ask yourself how you might be able to fix them once you find them.

Step 3: Shed These Common Myths and Misconceptions

  • Here’s a big one: Nobody thought of this before. Really? Such ideas are rarer than rare. Odds are many have thought of it – and punted.
  • There’s no competition, and that’s a good thing. Not necessarily. If it’s really such a good idea, others should see that and be in there with you. If not, you’ve got to wonder.
  • The concept is great, so the business opportunity must be great, too.  “Concept” and “opportunity” are two vastly different things. In short, there’s a huge chasm that stands between a good concept and turning it into a viable business.
  • I need to be on the market first in order to win. The business landscape is littered with defunct “firsts.” Watching the mistakes that others make, and then fixing them with your idea, is often a better strategy.

Step #4: Assess Your Range of Risks — Realistically

There may be more risks than you think.  For example, bringing a product to market involves many risks. Can you make it on a large enough scale to pay off? Does your product require users to change their behavior in any way (consumers don’t like to do that). Will it last?

You must also assess risks related to the market, existing or potential competitors, money (do you have enough?) and your own management abilities.

Step #5: Analyze the Market in Detail

Ask the fundamental question: Is this really a good market?  But in doing that, you must also understand that a “market” means buyers, not products or an industry. Your business or product will have to offer those buyers some clearly visible benefit in order for them to choose you over someone else.

Step #6: Define Your Team

Are you planning to go it alone, or will you need others involved in building your business and executing on your idea? This can mean working with outside advisors, or bringing in partners and employees. In any case, your “team” will be critical to your success.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

8 Essentials of Email Marketing Success

Despite the onslaught of social media, pay-per-click and other digital marketing methods, email marketing is still one of the most popular – and effective – for small business.  Here are eight essentials that can help make your email marketing campaign a success:

1)    Avoid Email Isolation

Email marketing works best for businesses that carefully integrate it with a broader marketing strategy.  Trying to use email marketing in isolation – or as a one-shot experience – generally comes up short of expectations.

2)    Focus on Your List First

The quality of your list is everything, so that’s where you need to pay a great deal of attention up front. If you already have a list, it must be constantly honed, refreshed and optimized. If you are building one from scratch, populate it only with people who are true prospects for your business, and who’ve opted in to receive your messages and offers.  Opt-in lists generally have far higher response rates than purchased lists, so time devoted to developing an in-house list is well spent.

3)    Be In Tune to Avoid Opt-Outs

The two main reasons email recipients will ask to be removed from your list are: a) the information you are sending is not relevant or helpful to them; and b) they are getting too many emails from you.  If possible, ask your email recipients how often they’d like to hear from you. Or test out different frequencies and see what happens to find the one with the lowest opt-out rate. And never send an email unless the contents have a clear value for the recipients.

4)    Sync your Emails with Search and Social

Use an outside email distribution service (such as Constant Contact, Mail Chimp or Vertical Response) that allows you to also create a version of each email that exists as a web page that can show up in search. This way, every one of your emails will continue to exist as an online archive that can bring SEO traffic to your site. And be sure to include social media sharing, follow buttons and links in your emails. This is a great way to extend the reach of your list.

5)    Track and Measure Your Results Religiously

It is critical that you use some kind of marketing analytics to measure the results of your email marketing. The services listed above will all provide some basic metrics reporting, but you will also want to take it further to calculate how many of the people who clicked or otherwise responded actually made a purchase. Compare your email results to conversions from other marketing campaigns.

6)    Remember Mobile

It might surprise you that some 20 percent (and growing!) of all emails are now opened on a mobile device.  And depending on the type of business you operate, the number could be even higher for your particular audience. So if your message doesn’t take mobile users into account, you could be losing a fifth or more of your audience before you even start. Test all email templates for how they appear on mobile. And send both plain text and HTML versions.

7)    Learn Segmentation Secrets

Segmenting your list is a great way to target your messages more precisely and improve your results. For example, you might segment geographically (by state, region, etc.); by recipients’ special interests that you have gathered information on; or by how often they’ve purchased from you in the past.  If you sell business-to-business, you could segment by industry or recipient’s title. Gather intelligence each time you send an email to help inform you about how to segment the list the next time.

8)    Nurture your Leads

The leads you generate via email won’t benefit your business unless they convert to sales. Prepare a lead nurturing plan that begins the moment you get a lead and details each step you will take to shepherd your prospects down the path to conversion in a consistent, logical fashion.  Remember that speed is important. Most lead conversions go to the business that responds fastest.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

4 Rules for Fostering Innovation in Your Business

Innovation is one of today’s most popular business buzzwords.  Most small and growing businesses – and especially startups – say they want to innovate. But most never get there because they are focused only on cost and efficiency, and not creativity, leaving little room for fresh ideas. In fact, many businesses today are actually anti-innovation without even knowing it, says Ed Hess, a business professor at University of Virginia’s Darden Graduate School of Business.

In today’s “do-more-with-less” environment, innovation can be too messy and inefficient to take root. Many business owners seek stability through structure and predictability rather than less-predictable innovation. But the mechanisms that help grow a business are much different from those that simply keep it from falling apart. In order to grow and innovate, you have to be willing to explore a little and put up with some uncertainty and ambiguity.

To instill a mindset of innovation at your business, you’ll need to adopt some different ways of thinking. Here are four “rules” for fostering innovation in your business:

1. Efficiency and scale don’t always rule the day: Typical business management practices in companies of all sizes favor efficiency and avoiding risks.  But being innovative requires taking some risks and trying lots of different things. And that, of course, means that some won’t work out. But those “failures” are like down payments on the things that do work and that will help your business grow.

2. Not everything needs to be certain: The fundamental nature of innovation is that nothing is certain.  Businesses that are best at innovating are dominated by ambiguity and change.  You just have to get used to it and create an environment that allows for experimentation, invention and exploration. It might be nice to talk about achieving near “perfect” performance, but growth experimentation often produces much the opposite. Variance – the enemy of efficient, cost-effective operations – is the norm when it comes to innovation.

If you want an innovative business, be careful about how strongly you insist on efficient, waste-free execution. You can easily end up killing any and all inventive ideas, as the path to innovation is not a straight line.

3. Innovation does NOT have to be revolutionary:  Sometimes, thinking smaller is the best way to foster innovation. All too often, entrepreneurs think that innovations – and just about any goals for that matter – must be big and audacious. They don’t. Get over it.  Setting – and achieving – small, proximate goals and innovations is a better way to keep the ball rolling.  In fact, most innovations are small, incremental things that are close to the core activities of your business – be they products, services, processes or all of the above.

Innovations can and should build on things that have already been done – they don’t have to be revolutionary. Says Hess, “The kind of ideas businesses should want to generate are all about creating new value for customers.”  We shouldn’t care if it’s already been tried, looks like something old in a new package or is borrowed from another industry. What’s most important is that it creates value for your customers that no one else has yet offered them.

Remember:  The best innovators learn how to combine existing things differently or transfer concepts from different industries or domains.

4. Innovation and effective execution can co-exist: Sure, innovation is often a messy process that is prone to failure. But don’t try to isolate it within certain places or people in your business. In other words, don’t feel like you need to segregate innovation from the rest of your business, where you have people who “execute” and others who “innovate.” They can go hand in hand, and the bridge that helps connect them is learning, according to Hess, who is co-author along with Jeanne Liedtka of The Physics of Business Growth (Stanford University Press, 2012). When you encourage employees – and yourself – to learn about new things and avoid “my way or the highway” type thinking, you will foster innovation in your business.

Finally, says Hess, understand that “growth experimentation” is a game of probabilities and the sooner you get customers actively engaged in your experimentation game, the more likely you will be to win.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

5 Keys to Creating a Killer Business Plan

Americans are starting businesses at a faster pace than ever before. According to the latest surveys of U.S. entrepreneurial activity, the number of new businesses created has increased every year since 2007, to record levels. Thank the crummy economy. “Challenging economic times can serve as a motivational boost to individuals who have been laid-off to become their own employers and future job creators,” says Carl Schramm, CEO of the Kauffman Foundation, an entrepreneurship think tank.

Whether you’re looking to turn an entrepreneurial dream into reality or re-evaluate and expand an existing business, a smart business plan can make all the difference. Writing a business plan is a key step in turning an idea into a thriving new business or simply breathing new life into one that needs a push.

Here are five keys to creating a killer  business plan, suggested by Steven Peterson, Peter Jaret and Barbara Schenck, co-authors of Business Plans Kit For Dummies:

1. Take your time and get it right

It’s tempting to rush through the planning process in your excitement to get a new or re-worked business venture underway. Don’t. The time you spend on planning at the outset will save you far more time later on once you are up and running. And as you will find, your time will be even more precious once your plan is in action.

2. Don’t skimp on research

A good business plan should be based on more than just your own great ideas. An effective plan depends on a complete and accurate understanding of your market, your customers, your financial situation and your business environment. Through research you’ll learn new things and it may even change your plan altogether.

3. Involve the right people

If you’re a current business owner trying to re-energize your business, the ultimate success of your plan depends on the dedication and motivation of your team. You can’t do it all on your own. Involving your team in the planning process will be a great source of insight for you as you decide what will work and what won’t.

4. Temper blue-sky fantasies with clear goals and solid timelines

Most business plans (or re-plans!) start with an idea: a dream to do something new, exciting or different. During those initial planning stages, you have big ideas, lofty goals, and the possibilities seem endless. It’s easy to get lost in the “someday” of it all and forget that in the beginning, you have to make actual progress toward sustainable results. In other words, make sure your plan includes measurable outcomes and feet-to-the-fire timelines.  In addition to making things easier (and more likely to get done), it will keep you motivated during tough times. Seeing goals being met and things being crossed off your to-do list helps keep you moving forward.

5. Write a plan that people will actually read

Don’t get carried away with big words and fancy formulas.  A business plan works only if people use it, so you need to create a plan that is concise, complete, and readable. Don’t weight it down with jargon, buzzwords, unfamiliar terminology, or overly-lofty goals. Inevitably, the only person that will impress is you. It will be much more impressive if you can construct a plan that people are interested in and that motivates them to want to be involved.

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How to Get a Small Business Line of Credit

Loan applicationIf you’ve had trouble getting a small business loan or other types of bank credit or financing for your business or startup, here’s something that might work:  Apply for an unsecured small business line of credit.

Start small – basically with whatever size line a lender is willing to provide.  The important thing is to get a foot into the bank financing door. Even if the credit line is small, put it to immediate use and pay it off diligently and always on time.

Once you’ve established a track record, you can seek to expand the credit line in small steps.  Many major banks that serve small business offer unsecured business credit lines of $5,000 to $100,000 for firms that have been around at least 2 years.

These include well known commercial banks such as Bank of America, Wells Fargo, US Bank, Chase and Key Bank, as well as community banks, credit unions, online banks and some you might not have thought of such as American Express Bank, Capital One Bank, Discover Bank and Advanta Bank.

A Flexible Financial Tool

A business credit line is a flexible financial tool that can help you grow if you use it right. And even if you don’t have an immediate need for credit, it’s handy to have in your hip pocket if business conditions change.  Establishing the revolving credit line is cheap, you only pay interest on what you borrow and you can use the line for almost anything.

Six things a credit line can be used for:

  1. Remodel, expand or upgrade your store, offices or other facilities.
  2. Buy new computers, servers, office technology or other equipment.
  3. Purchase extra inventory for upcoming promotions or seasonal spikes.
  4. Launch a new online marketing campaign.
  5. Create a new product prototype, pursue a promising business opportunity.
  6. Cover unexpected expenses.

Banks are still a good place to look for credit lines.  Sure, bankers are being more tight-fisted these days, but they do have money to lend – especially for established businesses – and credit lines are one way they are doing it. Wells Fargo, for example, offers small business credit lines up to $100,000 that you can apply for online, even if you’re not a current customer.

Credit lines are also appealing because of their low costs.  Interest rates will vary with prevailing market rates, but many lenders allow you to tap the line – via paper check, online, check card or other method – for no fee.  However, you can expect to pay a modest fee to open the account once you’ve been approved. Wells Fargo, for example, charges $150 for lines under $25,000 and $250 for larger lines.  Any annual fee is often waived for the first year, and may run $100-$150 annually thereafter.

Ask about interest rate protection

You should also ask if the lender offers some kind of interest rate protection or lock-in feature to protect you against rising rates in the future.  Some lenders will let you lock in an interest rate on your business line of credit for a year.

Beware of using a credit line for cash advances however, as many banks charge a cash advance fee that can run 3% or more (on top of any interest you’d pay).

How to apply for a Business line of Credit

To obtain a credit line, you will probably need to supply some financial information about your business as well as yourself, so be prepared with income and other statements or tax returns.

Sources of small business credit lines are numerous. To find the perfect fit and absolute best terms, you should plan to comparison shop among several lenders.

Some banks also offer unsecured revolving lines of credit backed by the U.S. Small Business Administration (SBA).  The SBA’s CAPLines program helps business owners meet short-term and working capital needs and can be a great option for newer businesses less than four years old.

Different types of CAPLines

  1. Seasonal Line.  Loan proceeds can only be used to finance seasonal increases of accounts receivable and inventory (or in some cases associated increased labor costs), but can be revolving or non-revolving.
  2. Contract Line. This line finances the direct labor and material cost associated with performing an assignable contract and can be revolving or non-revolving.
  3. Builders Line.  If you are a small general contractor or builder constructing or renovating commercial or residential buildings, this can finance direct labor and material costs. The building project serves as the collateral and loans can be revolving or non-revolving.
  4. Standard Asset-Based Line. This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is used to pay back the lender. Your business can continually draw from this line of credit, based on existing assets. This line is generally used by businesses that provide credit to other businesses.
  5. Small Asset-Based Line. This is an asset-based revolving line of credit of up to $200,000. It operates like a standard asset-based line except that some of the stricter servicing requirements are waived, as long as your business can show repayment ability from cash flow for the full amount.

4 Credit Line Tips and Warnings

  • Avoid carrying a constant balance on your credit line. Periodically paying down the debt completely will keep the credit in place and your lender happy.
  • One key factor in obtaining a credit line will be your business cash flow.
  • If your business doesn’t quality for a standard credit line, ask for an “asset-based” line.
  • Remember, the best time to set up a business line of credit is before your business actually needs it.

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