Are you crazy enough to start your own business? If so, Slingshot is a step-by-step business startup guide that will help you form a great business idea (big or tiny) and turn it into a next-level business that is always being improved.
6/10/2009 11:52:00 AM Version 1.0 Slingshot is a step-by-step business startup guide that has been designed to help you form a great business idea (big or tiny) and turn it into a next-level business that is always being improved. THE DEAL Slingshot is a business startup guide that has been designed to help you form a business idea (if you haven’t already got one), develop that idea and turn it into a next-level business that is constantly being improved. Like a real-life slingshot, you will have to provide the effort to launch your business, but Slingshot gives you a good framework to launch from. Slingshot has been created as part of Shopfront.com- the starting place for startups. Check it out if you haven’t already. This is version 1.0 of Slingshot. I have written this first version, but future versions will contain updates based on contributions from the Shopfront community. If you have any ideas, experiences, gems of wisdom, chestnuts of advice or bones to pick you can email me, or head over to the Shopfront Forums. By drawing from the experiences and wisdom of the Shopfront community, we will be able to create a business startup guide to be reckoned with! A few notes: We will release new versions of Slingshot as frequently as necessary. I will edit the new versions (at least initially). Slingshot will always be aimed at the Shopfront community. If you make any contributions through the forums, be aware that you may or may not be credited for your contributions in Slingshot (I will make an effort to credit original ideas and significant contributions). If you make contributions, please do not plagiarize anyone’s work. You can check for the latest version of Slingshot here. Slingshot will always be available as a free PDF download. Each version may be distributed freely, but not sold or changed. Slingshot V1.0 1 Shopfront.com THE CONTENTS Hi Ideas 1. Develop an Idea ........................................................................... 6 2. Create a Manifesto ........................................................................ 9 The Cunning Plan 3. Find Your Niche .......................................................................... 14 4. Identify Your Customer................................................................ 19 5. Design Your Brand ...................................................................... 22 6. Your Products and Services .......................................................... 28 7. Location, Location, Location ......................................................... 31 8. Management Team ..................................................................... 34 9. Compliance ................................................................................ 36 10. Financials ................................................................................. 41 11. Assess Your Strength................................................................. 47 12. Set Deadlines ........................................................................... 50 Book of Secrets 13. Book of Secrets ........................................................................ 54 Get Buzz 14. Buzz Plan ................................................................................. 63 GO! 15. GO! ......................................................................................... 69 Bye Coming in version 2 of Slingshot: chapters on finding funding, leadership and a more detailed chapter on Compliance including sections for the US, UK and Canada. Slingshot V1.0 2 Shopfront.com THE DISCLAIMER Information provided by Shopfront International Pty Ltd is not intended to substitute for informed professional tax, legal, investment, accounting, or other professional advice. If you desire or require professional advice, please consult a qualified provider who is licensed in your state or country. You should always seek independent professional advice in the applicable area before acting on any opinion, advice, or information available from Shopfront International Pty Ltd. None of the companies or people mentioned in Slingshot have endorsed Shopfront.com in any way. Slingshot V1.0 3 Shopfront.com At Shopfront we believe that everyone has the potential to start a great business, be it large or tiny. Of course, not everyone will do it, but if you are keen to give it a crack Shopfront and Slingshot are here to help. Whether you’ve got a bit of money and time to invest into your new business or you just want to start small, there is one thing you can be sure of- many of history’s greatest businesses started off VERY small. Infinitesimal. The main thing is getting started. Once you’ve started, you might be amazed at the directions you go off in. One thing leads to another. Shopfront is not a “get rich quick” scheme! Instead, we give you information and tools that you can use to build something remarkable, and eventually earn your big bucks (and more) that way. Building a great business might not be “quick”, and it will be challenging, but one thing is certain- it will NOT be boring! Starting a business can be scary. Some say more than 80% of new businesses fail in the first 5 years. Others claim that the figure is less, but it is probably safe to say that most new businesses fail in the first 5 years. Many people have compiled lists on the main reasons why businesses fail. These are the 9 reasons that are usually listed in one way or another: Failure to differentiate Running out of cash Bad location Lack of planning Bad management Inability to adapt to changes Underestimating the competition Quitting early No website Slingshot V1.0 4 Shopfront.com Failure-related fears include the fears of rejection, criticism, embarrassment and loss. Sound grim? Well, fear not! Slingshot is a practical guide that helps you avoid making the mistakes above. Also, you can use Shopfront to test your business ideas until you find something that really works for you. Shopfronts are free to start. This means it costs you nothing to start shopfronts for the purpose of testing your business ideas. So why hold back? Try everything you can, and you will increase your chances of finding your ideal business(s). There is no such thing as business failure on shopfront.com- only testing business ideas. There is no reason to be scared of failing initially. In Built to Last, Jim Collins and Jerry Porras explain that many highly successful companies in including 3M and Sony were complete failures initially. Good thing they didn’t quit early! The second president of 3M didn’t even take a salary for the first 11 years of his term there! We want Shopfront to be a community of businesses that are remarkable, meaning businesses that are “worth remarking on” (see Seth Godin’s Purple Cow). We encourage shopfronts to break the rules, surprise people, impress people with their service and be a little bit crazy in general. Stand out and your business is far more likely to be outstanding. As Andy Sernovitz says in Word of Mouth Marketing: “Be interesting, or be invisible”. Everyone has ideas, but few act on them. Acting is what makes an idea work, and getting your business up and running ASAP is the most important item on your agenda. At the same time though, it’s not the best to charge in without thinking things through first (you don’t want to make any of the common mistakes listed above). Thinking things through first is the purpose of Slingshot. It is easy to stew on certain parts of Slingshot, but don’t! If something feels like it is taking too long, just make a decision and move on. You can always change stuff later once you’ve had a chance to think things through. Slingshot V1.0 5 Shopfront.com Throughout Slingshot I have recommended some relevant books. You do NOT need to read these books before you start a business. Get started first, then read the books (they are awesome). There are 3 Must Reads and several other highly recommended books. Click a book link to read its review. If you are starting your business with another person you might want to go through this guide with them and make decisions together. Bear in mind that it will take a few hours… Be a rebel. Slingshot consists of guidelines, not rules. Find new and interesting ways of implementing the advice in Slingshot. No guide can possibly cover everything, and there is definitely more than one way of doing things. Ultimately, it’s up to you to find the best way… You will select a name for your business later (if you haven’t already). For now, come up with a working title that you will use for the first few steps of Slingshot. If you don’t have a business idea yet, just read on. So roll out the butcher’s paper or fire up your prop-top computer. Let’s get started… There are 15 chapters spread over 5 sections. Complete each of the red-shaded instructions and questions in each step. Slingshot V1.0 6 Shopfront.com 1. DEVELOP AN IDEA What will your business be? Don’t have a business idea yet? This first section should help. If you already have an idea this section is probably still worth a read. What do you like doing? Heaps of great businesses have been started by people who were just doing what they loved doing. For example, Mrs Fields was started by- you guessed it- Mrs Fields, who loved baking cookies. Rip Curl was founded by two dedicated surfers who opened their own surf store (Doug Warbrick and Brian Singer). The movie Pirates of Silicon Valley depicts how Apple was started by one guy who was obsessed with building gadgets (Steve Wozniak) and another guy who was obsessed with changing the world (Steve Jobs). What are you good at? Write down the following: Your skills Your talents Your hobbies Your passion What do other people think you’re good at? Ask them. What can you do that you know you are brilliant at, that you KNOW you can kick butt at every time. What sorts of tasks get you completely excited? If you could own any business, what would it be? What do you think about most of the time? Could you provide something that certain people would find awesome? Is there anyone that you could combine skills with? Is there anything that does not scare you like it does other people? Slingshot V1.0 7 Shopfront.com Could any of your answers be the basis of a business? Had any problems lately? Business is about providing a solution to a problem- alleviating a customer’s pain. If a person has a problem, and you have a great solution, chances are they’ll buy it. Here is a metaphor: A guy is falling out of a plane. You offer to sell him a parachute. Of course he is going to buy it. You want customers who are falling out of planes- meaning customers with a big problem that you are going to solve for them. Write down the following: What are some problems you have? Do other people have these problems? Look at your answers from above. Could you fix any of these problems with any of your skills etc? Did something cost you too much recently? Could you provide a better solution to other people? Is there anything that you really want to see changed? Have you done something recently that was more difficult than it had to be? Could you make it easy for other people? Has someone sold you a below-par product or service that you think you could do better? Do people you know have any problems that you could solve? Ask them the questions above. Have you heard any complaints lately? Find your unique opportunities Sometimes you are sitting on a great opportunity without even realizing it. For example, if you were a maths genius in school and you like teaching, you could probably be a tutor, right? If you live next door to a fast food complex and you own a fuel-economic car, surely you could deliver fast food to people’s houses until late, and surely you would be able to deliver it faster and cheaper than anyone else because you don’t have to drive to the fast food complex from your house first and you don’t use much fuel. If you are extremely patient and can handle being laughed at, you could stand still for hours at parties in a British Guard’s costume and you would probably make a killing. Do you have access to something that only you or few other people have access to? Look for things that only you or few other people can do. There Slingshot V1.0 8 Shopfront.com is a good chance there is a business there. In his book Outliers, Malcom Gladwell explains that when people first started to take computers seriously, Bill Gates already had over 10,000 hours of programming experience under his belt. Bill explains “I had better exposure to software development at a young age than I think anyone did in that period of time…” Other places to find ideas You can see the Shopfront Forums for a list of ideas that people have suggested. Entrepreneur.com has a list of 970 businesses you can start today. You don’t need a great idea to start a great business. Many of the greatest businesses started of with a very simple, obvious idea. Others started off with no idea at all! Built to Last explains how the founders of Hewlett Packard started the company with no clue as to what they would sell- they just wanted to start a company! Work out your idea and write it down. If you don’t have an idea yet, think it over for a while and come back later. It’s often hard to think on the spot. Remember, you can start even the tiniest business on Shopfront for free. You may as well try it out! Slingshot V1.0 9 Shopfront.com 2. CREATE A MANIFESTO Why are you starting this business? So you’ve got your idea. Now it’s time to develop it by writing your Manifesto. Your Manifesto is a page that describes the purpose of your business: exactly what you want to do and why you want to do it. You use it to develop your idea further and get yourself and others pumped about your business. Later, you can look at it to remind yourself of your business’s roots. Why are you doing this? Why are you starting this business? What do you want it to do? Most importantly, why should other people be excited about it? Without putting words in your mouth, here are some things to think about: How will your business solve a problem for people, or give them something better than what they can get at the moment? What change will your business create? In his bestseller The Art of the Start, Guy Kawasaki argues that “the best reason to start an organization is to make meaning- to make a product or service that makes the world a better place.” Why will your business be worth talking about? Do you plan on providing a team of people with an awesome working environment? Or, do you just want to make boatloads of cash and never have to work again. Ironically, if this is the only thing that gets you excited it’s much less likely to happen. Of course- all businesses exist to make money, but in order to do that well you’ll most likely need to create some warm fuzzies first (unless you’re a crim, of course). Slingshot V1.0 10 Shopfront.com Whatever your reasons for starting your business are, they should definitely get you overly excited. When you read them, you should feel like a Roman Warrior about to go into battle, or something like that. If you are not excited about your business, how can you expect other people to get excited about it? In Tribes, Seth Godin says: “Our inclination is to do barely enough. It takes something extraordinary, a call to action that is irresistible, and a cause worth fighting for to make people actually join in. If you’re not over the top, your not going to have any chance at all of making things happen.” Can you be “over-the-top” with a tiny business? Of course. Write down why you are starting your business and what you want it to do (in a way that gets you pumped). Put it under the heading “Why we are doing this”. Ultimate Goal What do you want your business to become in the end? For example: How big will it be? How much revenue will it generate? How many customers will it have? How many people are employed? Do you intend to sell your business? Which countries will it operate in? How many buildings do you have? How many snack machines will there be in the lobby? What flavor will the hand soap be? Of course, you don’t know exactly what your business will become, but you need an Ultimate Goal to work towards! Be as simple or detailed as you want. Also, be as hopeful as you want. The crazier the goal, the harder you’ll have to push yourself to get there. Paint a picture of your “finished” business. No paint required . Slingshot V1.0 11 Shopfront.com Values I know, “Values” sounds like something you used to get awards for back at Primary/elementary/junior School. That is not what this is. These Values are the laws that you are adamant will be obeyed in your business- the things that you are passionate about. For example, “Don’t be evil” (Google), “People first”, “7 day refund period”, “No set uniforms”, “We’ll beat any price”, “Smile”, “No micro-waving curry in the shared kitchen” What annoying things about other businesses like yours do you not want to repeat? What DO you want to repeat? What simply MUST happen in your new business? There is one Value that we insist on at Shopfront- “Don’t SPAM people”. Especially your friends. It’s tempting, especially with social networks, to constantly bombard people with promotional messages. Please don’t. If you send someone something that they don’t want, you are annoying them. You don’t build a great business by annoying people! There are much better ways to market your business. We’ll get to that later. List the Values for your new business. War Cry Use your answers to the sections above to form your War Cry. This is your one-liner- a few words that succinctly describe your business’s purpose. It is for motivating people inside your business- it is not for your customers (although it could be). It is the (far less annoying) business equivalent of a cheerleaders “Goooooooooo, Grizzlies!” It is your business’s equivalent of William Wallace’s “Freeeddoommm!!!” in Braveheart. For example: Drawing more gazes (for a T-shirt business) Take out the trash (rubbish removal service) More ARIA winners from Croydon (singing lessons) Chop more green (lawn mowing) Destroying the diet (for your fast food delivery service) Making sh!t happen (for an event organizing business or a branbased cereal company) Slingshot V1.0 12 Shopfront.com If someone asks you what you do, your War Cry can be your answer. For example: “I do waxing that doesn’t hurt”. You probably don’t have to scream your War Cry to the person asking, but this has been known to happen. Later on in the midst of the epic saga of running your business, it is easy to get bogged down and ask “why are we doing this again?” Always remember your War Cry. Your War Cry does not need to be original, and neither does it need to be protected. “Healthy Cheese Products” would be fine. Write down your War Cry. In 5 words or less, what is your business going to do that gets you pumped? Compile your Manifesto. It should be a page that has your War Cry at the top, followed by your “Why we are doing this” section, followed by your Ultimate Goal, followed by your Values. Stick your Manifesto on your office wall, bedroom wall or other wall of your choice. You might also want to start showing people immediately. A note about spreading ideas: it’s not the idea that is valuable, it’s acting on the idea. Ideas are a dime a dozen. Everything under the sun has been thought of, yet a person planning to sell a new kind of jam-donut breakfast cereal will almost certainly go to great lengths to keep their idea secret. Don’t be scared to show your idea around. There is far more value in gathering support and networks for your idea than living in paranoia. Howard Aiken once said, “don't worry about people stealing your ideas. If it's original, you'll have to ram it down their throats.” If someone does copy you, you’ll beat them anyway! Slingshot V1.0 13 Shopfront.com Also highly recommended: Art Of The Start On your shopfront Show people your Manifesto! You can use elements of it on your Shopfront, or even upload it to Scribd and provide a link to the Scribd page on your shopfront. Displaying your Manifesto on your shopfront is a great way to find other people who are excited about what you are doing. It also shows your true intentions, which is great for building trust with customers and the community. People like businesses with vision. Don’t be scared of what other people might think about your Manifesto. Yes, parts of it might seem a little crazy, but once you’ve shown people you have even more reason to hit that Ultimate Goal! Congratulations, you have compiled your Manifesto. You should have a firm understanding of what you want to achieve and why you want to achieve it. You’ve done “what” and “why”, now it’s time for the “HOW”. How are you going to do this? By now you most likely have an idea for your business. It’s time to turn that idea into a Cunning Plan. You need to scheme up the best way to implement your idea… Slingshot V1.0 14 Shopfront.com 3. FIND YOUR NICHE How will you stand out? Find your competitors No matter how great your idea, there will be other people doing similar things. Who are these people? You need to find out. Amongst other places, you can look through: Business directories, online and off. Google Trade magazines Shopfront You can also show some people your Manifesto and ask them if they can think of any potential competitors. You always have competition. Competitors include alternative ways of fulfilling the need you are addressing. For example, if you are selling Mopeds in the city, not only are scooter and unicycle salesmen competing with you- the bus system is competing with you as well. And teleporters will be competing with you if they ever come out, so you might as well write that down too. If you are running a local arcade, you are not only competing with other arcades; the movies, the beach and home video games are also competitors. You should list your competitors under categories- “types” of products or businesses. You can be as specific as you like with your categories and you can have sub-categories if you want. For example, if you were trying to invent a new kind of television some competing categories would be “Plasma screens, LCD screens, Projectors and projector screens, computers, the movies”. If you were going to sell TVs, some competing categories would be “Hi-fi stores, online stores, department stores, the cheap stores people go to when they visit China, hard rubbish.” Slingshot V1.0 15 Shopfront.com List all of your competitors (even those that only vaguely compete with you) and sort them into categories. Highly Recommended: Marketing Warfare Positioning Now that you know the “competitive landscape,” you can work out your business’s unique position in it. This is often referred to as your Niche. How are you going to stand out from each one of your competitors? If your Manifesto involves solving a problem or making change, your business should naturally stand out, right? If you have said, “we want to make a pizza place in our suburb that make s pizza that actually tastes good and doesn’t use shredded ham or anchovies”, you are already well on your way to standing out. You just need to ensure that you are going to stand out enough to take on established businesses with loyal customers. Is better-tasting pizza enough? Maybe, maybe not. Of course, if pizza is your passion you’ll probably go ahead with your plan anyway. But perhaps you sell calzones (those pizzas folded in half)? Or make the pizza a completely different style to what is around? Metaphor: Your customer is falling out of a plane and you are trying to sell him a parachute, but too many other people are also trying to sell him parachutes, and it’s just not working for you. What do you do? You could sell him a jetpack- “Why land on the ground? Get back on the plane with one of my new jetpacks!” Perhaps the customer is a child, and you say “Why use regular parachutes? I make child-chutes that are extra comfy for kids!”. Perhaps you sold him a parachute on the plane instead of waiting around in the sky with those other guys. There are heaps of car washing services around, so how can you differentiate? I've never seen a "car dirtying" service before... This might not be a great idea, but then again, you never know what will fly? Perhaps there is a market of city residents who want their 4WDs to look muddy and tough, but don't have time to drive up a fire-track each week. Perhaps in very Slingshot V1.0 16 Shopfront.com dry, dusty climates, some people might prefer their car to be fully dirty instead of tacky-half-clean all of the time. Who knows? If you are a dude, why not wash cars in a suit? Male drivers are going to keep going to the bikini car wash and there is nothing you can do about it. But women wash their cars as well. “MI6 Car Wash”. An easy way to set yourself apart from a competitor is to become the opposite of them. If they charge a lot, provide a cheaper alternative. If they sell tiny meals, serve huge ones. If they have long lines, have shorter lines (not as a result of sucking!). If their customers comprise mostly of older people, target younger people. If they don’t deliver, deliver. If they don’t have online ordering, have online ordering (a shopfront!). If their store is shabby, deck yours out in streamers. If you ride a Harley, and your fast food delivery business is facing fierce competition from 7 other guys in your suburb who also ride Harleys, the problem is that you are all appealing to younger people (and probably driving older people mad with the noise). So, why not swap the Harley for a Prius and offer a free scone with every delivery, capturing the entire market of older people who want fast food delivered in your area? Yes, awful example. If you are a me-too (copycat) business you will get locked in a price war, because you and your competitor both provide the same experience and people will go for the cheapest one. Unless you have a really remarkable marketing campaign in mind (we’ll get to that later), a fantastic location or some other ridiculous competitive advantage, you should substantially differentiate yourself from your competitors. Of course, if there are 5 Pizza stores in your town you can open the sixth, but how is it going to stand out from the other 5 (that already have loyal customers)? In many cases it is a great idea to create a NEW category (a type of product or service that doesn’t exist yet) in your area, even if it seems a bit ridiculous. If you create a new category you are very likely to become the leader in that category. Marketing gurus Al Ries and Jack Trout once quoted a study which showed that of 25 leading brands in 1923, 20 of them were still leaders of their category in 1980s. Of course, creating a new category like a “car dirtying service” is much riskier than providing a Slingshot V1.0 17 Shopfront.com variant of an existing category e.g. “better tasting pizza”, but you stand to win a lot! Creating your districts first “calzone place” as opposed to your town’s 6th pizza place will seem risky, but is it really? It’s up to you. When you try to create a new category, some people will say “there is no market for that!” Prove them wrong. Addressing a market that doesn’t exist has been the cornerstone for the success of some the biggest companies out there. In The Google Story, David Vise explains how Yahoo could have bought Google for US$1M in Google’s early days, but decided not to on the grounds that there was not a big market for web search. Pirates of Silicon Valley shows how Hewlett Packard could have claimed the rights to Apple’s personal computer prototype, but they said something along the lines of “What would ordinary people want with computers?!” The movie also shows how Xerox invented the mouse and the GUI (what you see on your computer screen) and gave them to Apple because they thought that there was “no market” for these products. As Seth Godin says in Tribes: “Defending mediocrity is exhausting. People want new and remarkable. People are hungry for change. Organizations that destroy the status quo win.” Take a risk, stand out and your business is likely to be outstanding. On Shopfront, we want outstanding businesses constantly doing new things and addressing new markets, not me-too businesses waging epic price wars! Side note: don’t be boring because it is the hip thing to do. It might be cool to open a trendy restaurant or bar, but that doesn’t mean that the trendy restaurant or bar is going to work in your area. In fact, if it’s trendy there are probably heaps of people doing it. Sounds like a good opportunity to differentiate! Highly Recommended: The 22 Immutable laws of marketing Slingshot V1.0 18 Shopfront.com Describe your Niche- your unique position in the market. Look at your list of competitors. How will you stand out from each of your competitors? What is the name of the category you operate in? If it doesn’t exist yet, name it! Something to think about- once your business is established, how could a new business get the jump on your business by becoming the opposite of you? Slingshot V1.0 19 Shopfront.com 4. IDENTIFY YOUR CUSTOMER Who will you sell to? Focus Who are you going to sell to? When asked this question most people answer “everyone!” (I know I did), but history has shown that this is not a good move. If you target “everyone”, no one is really going to know if your business is for them, and they will move on. Rather than targeting “everyone”, you are far better off focusing your resources on a specific group of people and trying to provide the best possible experience to that group of people. If your business is outstanding, these people are likely to tell other people like themselves about you. Also, if you target “everyone”, it means that you have to try to please everyone, and this is not fun or possible. It will make you look sterile and anything but outstanding. Your business won’t be able to have a personality because that might offend someone. If your business has no personality you might not offend anyone, but you are unlikely to blow anyone away either. Wouldn’t you rather really please a smaller group of people and start a storm of word-of-mouth than try to give everyone a “satisfactory” experience and nothing to talk about? It takes a lot of effort to please everyone. Put your energy into your service instead of trying to please everyone and you’ll probably find that people who have a “personality clash” with your business starting buying from you anyway! Don’t waste resources trying to please people who don’t care- find a group of people that will love what you are doing and target them. What sort of people would be the most interested in your niche? A good way to find out is to show some different types of people your manifesto and gauge their reactions. Pick the group of people who need or want your services most. Of course, you can still sell to “everyone”; just don’t target “everyone”. You’ll most likely sell to anyone that walks in the door, but you won’t change your approach for people outside your target market. You won’t be afraid that they might be offended. Pick a target market and stick to it. If you extend your target market later you run the risk of violating your existing customers, who (as an example) will wonder why all of a sudden Slingshot V1.0 20 Shopfront.com their expensive car brand has released cheap hatchbacks that make a mockery of their own luxury car. As Seth Godin says in Tribes: “Don’t go after “most people”. Most people are really good at ignoring new trends and big ideas.” Describe your customer. Be as specific as possible. Why have you chosen this target market? Why will these people give you their money? Are you selling to businesses or consumers or both? The 6 Tests From this point forward, these 6 tests will appear at the end of certain chapters of Slingshot: The Focus Test: o Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: o Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: o Is everything that you just came up with worth talking about? The Research Test: o Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: o Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: o Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? Slingshot V1.0 21 Shopfront.com 5. DESIGN YOUR BRAND What will your business look like? You now know how your business fits into the market and you know who you are selling to- it’s time to put a face to your business. This face is called your “brand”. Your brand will represent your business in the mind of your target market. Brand Voice This is the language of your business- its personality. If your brand were a person, how would it speak to your target market? Everyone in your business should know this voice. It will ensure that all material including site content, press releases, advertising and internal material are presented using the same voice. It might just be “the same as my voice” or the “however we feel like speaking”. Excellent. Unless you are a biker selling to elderly women. In this case you might want to tone it down a bit. Or not. It’s up to you. (Bikers and elderly women, please excuse the massive generalizations!) Remember to give your business personality! Personality that your target market will love. Avoid being “professional” and trying to please everybody. “Professional” should really mean providing an amazing experience- an amazing service, amazing products, amazing customer support- you name it. That is what “professional” is- it is not wearing a suit and speaking like a robot. Describe your brand’s voice. Plug This short paragraph, also known as an “elevator pitch” or “positioning statement” describes your business to newcomers. You can use it on your shopfront, on flyers and ads etc. When read, it should explain the following in 30 seconds or less: Why your target market just has to have your products or services- the problem they solve or why they are completely awesome. Slingshot V1.0 22 Shopfront.com Why your target market should buy from YOU. Compare yourself to what is currently available. Who your business is for. Remember to keep your focus! Your brand voice should imply who your business is for… How people can find or contact your business- how they can get access to your products and services Don’t be fake! Many new businesses essentially say “lets trick people about our size”. People will find out fast that you are lying. You are far better off showing what you really are and growing naturally than pretending to be bigger than you really are and trying to compete with businesses that really are big. Being small initially can be an advantage. Use it. Write your Plug. Test it on someone in your target market and find out if they love it- call three people right now! Ask them to be honest. Ask some people that you don’t know- they will give less sugar-coated advice. People in your target market should get excited when they hear your positioning statement. If they don’t, keep trying! The real aim is to get people in your target market talking about your business after hearing your Plug. Tag Line Your tag line is a short sentence that describes your business to your target market. It often accompanies your brand name and logo. Some examples: YouTube: “Broadcast Yourself” Ajax: “Stronger Than Dirt” BMW: “Sheer Driving Pleasure” Burger King: “Have It Your Way” I Can’t Believe It’s Not Butter: “I Can’t Believe It’s Not Butter!” In a few words, your tag line should convey to your target market that your business is for them. This can be done using words or tone. For example, if your target market was “teenagers” you could say “The taste of a new generation (Pepsi)”. Alternatively, you could imply your target market using tone e.g. “Get it up ya!” Slingshot V1.0 23 Shopfront.com You might also want to use your tag line to show how you are different from competitors, something like “fast lawn mowing at 10m/sq per minute” or “Anchovy-free pizza” Avoid using what Guy Kawasaki would call “Purple Farts”- general, cliché phrases that mean nothing and can’t be proven easily e.g. high quality, best service, no stress. Instead, try “super-tough Teflon”, “average wait of 1 minute” and “each drink boiled for 1 hr prior to serving”. What is your business’s best attribute? Should the tag line be based on that? You can also think up some other key phrases that you will use for your business. You might want to base these on your business’s best attributes e.g. if you are the cheapest in town at $15 per hour, “only $15 per hour” would be something you’d stick around the place. If you were to say “cheapest rates in town”, that would be a bit of a “purple fart”. People are likely to think “sure, whatever, prove it, how much cheaper anyway?” and keep driving past. On your shopfront You can put your tag line in your shopfront name if you want to e.g. “Parashoot- We film at mates rates” Write down your tag line and other key phrases. Name Finally! Time to choose a name. Your brand name is one of the most important decisions you will make. Here are some tips. The top three are the most important: Don’t make your name generic! Make it a brand name. Who is the leading online bookstore? Books.com or Amazon? Leading auction site? Auctions.com or eBay? Think of all of the top brands you know of. Most are unique brand names, not generic names. If you have a Tent store don’t call it “The Tent Place”call it Anaconda. If you have a coffee store don’t call it “The Coffee Shop”- call it Starbucks. If you build computers, don’t call Slingshot V1.0 24 Shopfront.com your business The Computer People- call it Apple. Of course, you can call your business “sued out of existence” if you actually use any of those names. Don’t be fooled into thinking that your brand name needs to explain what you do. This might be true in rare cases, but if you need to explain what your business does, let your tag line do the talking. Make your name completely different from your competitors’ names. If you open a fast food restaurant, it’s probably not smart to call your business “O’Donnell’s”. People will just laugh and go to McDonalds. Make your brand name something your target market will love. You could take a word that is relevant to your business. For example, if you had a lemonade stand you could call it “Pulp”, if you were a tax agent you could call your business “Fiscalator” (lol). You might be able to call your fast food delivery service “Grease Lightning”, but “Faster Fast Food” is a little generic. It is not likely to stick in people’s minds. Sometimes it’s best to make up a word. A made up word will be easy to trademark, and that word will not stand for anything except your business. Every time someone hears the word, they will think of your business. If they don’t know about your business they will ask “what does that mean?” and someone will tell them about your business. Think of the word “Xerox”. What comes to mind? Kodak? Make it easy to say- speakable. It should have a good ring to it. Don’t make the name too long- it will be hard to remember. Also, an easy-to-spell name is usually better than a hard-to-spell name. Avoid using numbers and acronyms in your brand name. If you intend to sell globally, make sure your brand name translates into other languages well. Make sure you are not violating any trademarks Make sure the domain name you need is available. Choosing a name can be difficult. You can think about it for hours. Just chose something even if you aren’t 100% happy with it and when you came back later you might find you’ve gotten used to it. Choose something that you think is good- not perfect- and review it later. Slingshot V1.0 25 Shopfront.com Write down your brand name (or at least your first attempt at naming) Colors When you choose your business’s main color(s), don’t use the same color(s) as your competitors. Standing out is arguably the most important thing. You might also want to think about what the color you use represents. UsabilityPost has a good article on this. What is your business’s main color(s) On your shopfront Exclusive for Slingshot readers! We currently have 10 color schemes available for shopfronts, but as a Slingshot reader you can choose any colors you want. Here is what you have to do: 1. Look at this chart 2. Choose which color you want each of the following sections of your shopfront to be: - Content Boxes (the lightest color) - Background (a light color) - Tabs (a dark color) - Title bar (the darkest color) 3. Send the html color codes for each section (the 6-character codes on the chart) to firstname.lastname@example.org along with the name of your shopfront and we’ll get your color choices working ASAP! Slingshot V1.0 26 Shopfront.com Logo Make sure it’s readable, and make sure your target market loves it. If you can’t design and you’ve got around $300, Crowdspring is awesome for finding a logo. Otherwise, find a friend who can design, show them your manifesto and they just might do it for you. If none of these options work, there are plenty of “logo creators” on the internet- search for them on Google. Often the best logo is just your brand name in a readable font. Describe, draw or design a first draft your logo. Don’t forget the 6 Tests! The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? Highly Recommended: The 22 Immutable Laws of Branding Slingshot V1.0 27 Shopfront.com 6. YOUR PRODUCTS AND SERVICES What will you sell? You no doubt have a very good idea of the products and services you will provide, but here are a few things to think about: Focus Don’t try to provide everything! People go to the hardware store to buy hardware, not wine. We go to the bakery to get bread, not toys. We go to the aquarium to see fish, sharks and whales swimming- not naked dudes. Don’t drop a naked man into your dolphin tank, so to speak. Don’t foul up your relevant and meaningful products and services by introducing something weird that shouldn’t be there. If you are a luxury car brand, don’t start selling $15,000 hatchbacks. If you have a welding business, don’t offer a dog wash on the side. Instead, start a new brand for your non-relevant product or service (this is easy to do on Shopfront). If you are a naked dude in a dolphin tank, put some pants on. Would you be more likely to go to the burger joint or the coffee shop to get a burger? And would you prefer to get a cappuccino from the coffee shop that sells coffee only or the one that sells coffee and burgers and all sorts of other things? Of course, sometimes you need to sell lots of different products and services to make enough revenue, but do you really? Sometimes you can’t have an extra brand advertised on the same building, but is it worth extending your product lines? Wouldn’t it be worth putting all of your resources and efforts into making your core products and services completely remarkable as opposed to spreading your resources and efforts thin over too many products and services? Unless your prices are extremely low e.g. department store or you are the only business that provides each of your products and services in your (greater) area, focusing is a good idea. If someone were to ask one of your customers what you sell, what would your customer tell them? An answer like “massive burgers” is surely more memorable and enticing than “every kind of fast food”. Or is it? Your choice. Think of the most successful brands you know of. Chances are most of them at least started with a strong focus- Croc shoes, Subway sandwiches and Starbucks coffee to name a few. Of course, many businesses that offer vast arrays of products and services are very successful. Think of Virgin. Virgin usually enters an existing category (like Slingshot V1.0 28 Shopfront.com airlines and mobile phones) and positions itself as the opposite of the category leaders (trendy and personal with low prices as opposed to somewhat sterile and sleazy with unnecessary fees). This often works very well. But is Virgin as successful as it could have been if it had created a new, specific brand for each venture? Can one brand stand for so many things and be as strong as multiple, dedicated brands? You decide. The power, is yours! Take Risks Don’t feel like you have to follow hype, and don’t feel like you have to play by the rules. If your gut tells you to offer something that hasn’t really been done before or doesn’t make much sense at the time, just do it. As we’ve discussed, some of the most successful products and services out there never made sense at the start. That’s why they were greatthey did something that everyone else was too scared to do and it worked out. It will be scary, and it might not work, but as many have said: “The riskiest thing you can do is not take any risks”. Always be improving your products and services, even if it means hurting your business a bit initially. History is too full of smug companies who got their butts kicked in a certain area after ignoring new companies with new ideas. Research Ask your target market what they want! You can try to guess what your customers want, or you can pick up the phone or go somewhere and find out. Something to consider- often what people say they want differs from what they really want. For example, if Thomas Edison had have listened to peoples’ demands, he would have made better lanterns, not the light bulb. Listen to people and then interpret what they really want. Give customers what they want, then what they need. Don’t try to tell people what they need. People want what they want, not what they need. Where possible, provide the products and services that YOU want. If you are on the frontlines using your own products and services you know Slingshot V1.0 29 Shopfront.com exactly what is needed. Use your own products and services as much as possible. Highly Recommended: Reality Check Describe each of your products and services. Time for the 6 Tests The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? Slingshot V1.0 30 Shopfront.com 7. LOCATION, LOCATION, LOCATION Where will your business be? If you are starting a shopfront, you may not need a physical business location- you can run your business from home. If you do require a business premises, though, the location of your business can arguably be the most important decision you make. Many businesses pay BIG money to move to a location that is only slightly better than their current location, and sometimes it’s only a few meters away! Does the location of your business matter to your customers? If your customers don’t come to your premises, “findability” probably isn’t overly important and you are probably better off saving your money on a place that is far from people’s eyes e.g. out the back of an industrial complex or something. But then again, if you have, say, a delivery service; whilst customers may not visit your premises you may need to be able to service many areas quickly, which requires a well-thought out location. If you are going to have stock delivered from the docks, you probably want to be close to the docks to avoid paying for the delivery and storage required to get the stock to you. Will you require truck parking or easy truck access? Do you need to be near anything? What sort of zoning should your premises be in? Even if your customers will not be visiting your location, it is important to consider which location is strategically best for your business. What sort of things do YOU need from your location? What sort of things do your suppliers expect from your location? If your customers will be visiting your place of business, what will their experience be? Put yourself in the eyes of a person in your target market that doesn’t know about your business: What do they want to see? What are they looking for? How will they notice your premises? Why will they come to your location and not one of your competitors? Should you be close to your competitors or as far away as possible? Where will they park? Why will they have an outstanding experience at your location? How will they enter your premises? If they are disabled? Slingshot V1.0 31 Shopfront.com Will you ever be closed at a time when everything else in your area is open? This can annoy customers a lot. Does your business suit the community? Do enough people in your target market visit the location? Will you buy, rent or build your location? Of course, as a new business you want to save money! Having a business-specific premises is expensive- rent, power, phones, internet, maintenance, insurance etc. Perhaps home is a good starting place. Or you could share a location with someone else. Overexpansion Don’t try to expand too quickly. Focus on your target market in a particular area until such time as you can take on more customers without diluting the experience of your existing customers. Overexpansion is often listed as one of the main reasons why businesses fail. Overexpansion contributed to the fall of the Roman Empire, Napoleon and the Nazis. Don’t let it destroy you. Testing 1,2,6 The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. Slingshot V1.0 32 Shopfront.com The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? On your shopfront If you have a location, take some photos of it and add them to your shopfront’s gallery. Slingshot V1.0 33 Shopfront.com 8. MANAGEMENT TEAM Who will be involved? It is important that you can work well with the other people in your new business. As a startup operation there probably won’t be much money around for quite a while. Putting in blood, sweat and tears for little initial return can become very fruitless if you have to battle against enemies or people that don’t do their part. Sequoia Capital, the venture capital firm that invested in Google, YouTube and many others early on say this on their website: “A company’s DNA is set in the first 90 days... "A" level founders attract an "A" level team.” Most venture capitalists (firms that invest massive $ into companies) will tell you that they invest in people early on- management teams, not ideas. When choosing people to work with, make sure that they are as excited about your manifesto as you are. Business Partners There are a lot of benefits to finding a business partner, or at least someone to confide in regularly. Benefits include help with decisionmaking, the ability to play “idea ping pong” (bouncing ideas off each other) and a being able to call on a second opinion whenever you need it. Also, a business partner shares the workload! Constantly working on your own can lead to circular thinking and unnecessary stress. Many venture capitalists prefer a business with two founders. What is the plan? Will you find a business partner, or have you already? Or will you just go it on your own and find advisors… Advisors There is a good chance that there are great people around who can help you. Ask them if they will mentor you. This can mean anything from a single session to a weekly meeting to permission to call/email them if you have an important question. Most people will be happy to help so long as you do one thing: respect their time. It is a good idea to find a few advisors that are very different from one another- anyone from a loyal customer of yours to an experienced businessperson in another industry to members of your family. Slingshot V1.0 34 Shopfront.com Do you know of anyone that could help? How will you approach them? Highly Recommended: The Google Story On your shopfront Why not write a blog post on your shopfront introducing each member of your team? People like to see who is behind the operation. People love stories- tell an interesting story about each team member. Also, you might want to add some photos (or a video) of your team to your shopfront’s gallery. Show your target market the culture behind your business- who you are, what you like, the jokes you make etc. Slingshot V1.0 35 Shopfront.com 9. COMPLIANCE Are you in line with the law? There is nothing worse than coming up with a great idea only to find out that it is a) not legally possible or b) very expensive to get around the “red tape”. This section of Slingshot should make it easy to work out what is legally involved in setting up your new business. Remember, this information is not a substitute for legal, financial, tax or other professional advice. I won’t be covering every country’s laws in great detail in this first version of Slingshot- expect to see more in version 2. Below, I have provided basic information and links that apply mostly to Australia. For detailed information for your country, use the links below: Other countries- Check your government’s website for information on running a business in your country. Legal Business Structure Every business has a legal structure. The most common types are sole trader (one owner), partnership (two or more owners) and company (a separate legal entity). The simplest way to get started is usually as a sole Slingshot V1.0 36 Shopfront.com trader. As a sole trader you are entitled to all (after-tax) profits and you are personally liable for all debts. All income is treated as your personal income and is included in your personal tax return. You do not need to fill out a separate tax return for your business. You do not need to register to become a sole trader. Easy. You can change to a different legal structure at any time. Things get a bit trickier with a partnership. If you choose to form a partnership you will need to complete a separate tax return for your business. You can learn about tax returns and more at the ATO website. You will probably also need to have a partnership agreement drawn up. You can get one for $44 at DocDownload. Creating a company limits your liability for debts. A company’s profits are taxed at company rates, and you are also taxed on salary you take from the company. There are also additional compliance requirements, such as a hefty $400 name registration fee followed by a $212 yearly fee. Record keeping is strict and you will have to report your financial activities each quarter (every 3 months). You can set up a company for around $537.50 at Cleardocs (includes initial name registration fee). Registration of Business Name You do not need to register a business name if you use you or your partner’s first name and surname as your business name. Depending on your state, it will cost you around $50-$200 to register a business name Renewal fees also apply every 3 years. Your name will only be registered in your state- you have to register in every state that you plan to operate in. You don’t have to commit to a name- you can register a new one at any time. To find out about registering a business name in your state, click here. Tax Requirements You do not need to get an ABN or register for GST unless your business makes revenues of $75,000 or more per year or you are a taxi or hire car driver. It is often a good idea to get an ABN anyway. You can get one online at the ABR website (for some reason this site doesn’t like Safari or Firefox on my Mac - I had to resort to Windows). Sole traders use their own TFN. If you are a partnership or a company you will need a separate TFN for your business. You can apply for a TFN on the ABR website. Slingshot V1.0 37 Shopfront.com Depending on your business type and location, you may be required to pay additional taxes. To find out, go to the ATO website and search for your industry e.g. “food” in the search engine. You can also get some free personal assistance from the government here. Business Licenses You can easily check for all of the business licenses and permits you need for your business by choosing your country below. Simply follow the prompts and enter your business type and you will be shown all licenses you need from all governments e.g. federal, state and local. o VIC o o o o NSW QLD SA WA o TAS o NT o ACT Slingshot V1.0 38 Shopfront.com Insurance You do not have to purchase business insurance, but it is a good idea for many businesses. Public liability insurance can cover you if you are sued for damaging people’s property whilst completing a job. Handy. You can find out more about types of business insurance here. You can get price estimates from AAMI (click the “Get an Estimate” link at the bottom of the page. Fire insurance is compulsory and you’ll have to complete the application for that first). Employing People Things start to get quite tricky when you officially employ people- OH&S, PAYG and Superannuation to name a few. For more information on what is required when employing people, go here. Trademarks and patents A trademark can be used to protect (amongst other things) your logo, business name and tag line. For more information on trademarks, go here. If your business involves an invention you may consider having the idea patented. Patent attorneys are very expensive, and patenting often offers insufficient protection from predators (it is going to cost you a LOT of money to sue a patent infringer). It also exposes your idea (patent descriptions are public knowledge). That said, patenting an invention could be very helpful. It all comes down to cost. For more information on patents, go here. Depending on the type of patent you require, you could fill out a patent application yourself and submit it online for $80-$150 (for protection in Australia only!). Filing a patent application yourself can be risky- it is a legal document that is probably best left to a pro. Once again, it’s all about cost. Other laws relevant to your specific business There are other laws such as fair trading laws that your business must comply with. When in doubt about the legality of your operations, consult Google or get legal help. Slingshot V1.0 39 Shopfront.com Keeping Records You will need to keep track of your financial activity so that you can complete an accurate tax return when the time comes. Keep your receipts! You can receive tax deductions for business expenses, but you will have to keep your receipts in order to prove that the business transactions actually occurred. Accounting software can be very useful. Xero and Saasu are great tools for record keeping. More help Lawyers are VERY expensive. Finding a good accountant is a good idea if you have the $. Once your business gets going, having an accountant is crucial. Amongst other things, an accountant can help you with compliance, record keeping and also financial planning (the next section). On your shopfront You might want to explain your Compliance situation e.g. which permits, qualifications and insurance policies you either have or don’t have. This will give your shopfront credibility- people will know that you aren’t being dodgy. Slingshot V1.0 40 Shopfront.com 10. FINANCIALS How much cash? Cash is King If your new business runs out of cash it will probably die- you are going to have a very hard time paying bills and buying necessary inventory etc with zero cash. “Cash” means real money in the bank (or your wallet) that you can use to cover your costs on time. If you have landed a high paying handyman job but can’t afford to buy the nails you are in troubleyou are experiencing a cash flow crisis. You need a solid financial plan to ensure that you don’t run out of cash. That is the purpose of this section. A Few Tips Start small and then grow. Start making sales as soon as possible. Don’t blow your life savings and more building up an overly glamorous business, expecting to make boatloads of cash as soon as you open your doors- it probably won’t happen. This is called the “build it and they will come” approach. It can work, but it is not necessary and it greatly increases your chances of running out of cash and going out of business early. To put it bluntly: don’t waste money on sh!t you don’t need. Initially, buy the essentials that you need to create a remarkable business that blows away your target market and nothing more. Focus on the cheaper things first, make a start, and then get the more expensive things later. Do things manually at first as opposed to buying expensive systems and equipment. You’ll probably never use your expensive equipment anyway. Do you really need that paper shredder initially? Probably not. Use scissors, fire or your teeth instead (don’t actually use fire or your teeth). Spending money is easy and fun, and it is a terrific form of procrastination- “I’m making my business better”. You’re not. You are wasting cash and slowly destroying your business. Anyone can spend money. Making money on the other hand is hard work, and hence people naturally prefer to spend money instead of doing the hard work required to make it. It is not uncommon for someone to buy everything required for the “perfect business” only to never do the work, promote the business or make money. Epic fail. Slingshot V1.0 41 Shopfront.com Pricing How much will you charge for your products and services? Look closely at your competitor’s prices. Will you charge more or less than your competitors? A lower price will probably result in more customers. A higher price will reek of higher quality, but there must be a reason for the higher price. Charging less for the sake of charging less is rarely a good business model. Ask people in your target market how much they would expect to pay for your products and services. This is especially helpful if you are starting a new business/product category and there are few competitors to base prices on. Write down all possible revenue streams for your products and services (the exact ways in which you will make money). Write down your prices. Inventory & Stock Carefully plan out the amount of stock you will keep. You don’t want to be stuck with too much stock because buying too much stock is a waste of cash that could be spent elsewhere. If you can’t sell all of your stock you will have to discount your prices and run the risk of losing money and possibly your reputation (selling at clearance prices doesn’t look good for many businesses). At the same time, however, you don’t want to run out of stock- you never want to have to say “We’re out, but I can order it in for you” unless you are deliberately trying to create demand. Working out how much stock to order initially will be a battle between your inner realist and your inner optimist. When buying stock, don’t be fooled by discounts: buying 1000 might only cost a fraction more than buying 500, but you are still spending cash on stock that you might not need. Financial Projections In order to work out your startup budget and the potential return that you could earn from your business, you need to put together some financial projections. You will also need financial projections if you plan to raise additional funding (more on this later). You can do projections for 1 year, 3 years or five years. It’s up to you (although potential investors will probably want to see at 3-5 years of predictions). Slingshot V1.0 42 Shopfront.com SCORE has some great free templates that will help with your predictions. There are a lot of spreadsheets, but the following are the main ones to complete at this stage. I have tried to keep the instructions below simple, but if you are having trouble and can afford an accountant, it might be a good idea. Start Up costs/budget First question- how much cash do you have to start your business with? Second question- how much will it cost you to set up your business- how much will you spend before you start making sales? Remember; start selling as soon as possible! Fill out the spreadsheet entitled “Start-up Expenses” on this page of the SCORE website. Don’t limit your expenses to those on the list- work out every expense that you will encounter/have encountered and add them to the list. Don’t be surprised if it costs a lot more than you expected to start up your business. It might be smart to allow for some extra costs when estimating your expenses. There might be sections of the sheet that you don’t need. Do you have enough money to start up? If not, what are you going to do about it? For info on finding funding, read on… Assumptions How many sales do you think you will make in the first year/3 years? Why do you think you will make this many sales? Estimating sales is hard- how can you really know how much you will sell? You can’t, but you can make predictions based on assumptions about how well your product will sell. Your assumptions are the most important part of your financial projections. Do some research and find some data that backs up your assumptions. For example, if you think you can make 1000 sales in the first year, why? Can you back up your claim with evidence? How have other businesses like yours grown? Have you asked people in your target market if they would buy from you? A single piece of solid data can add mountains of credibility to your assumptions. You also need to make some assumptions about your expenses. How much will it cost to run your business? Think of every expense that your Slingshot V1.0 43 Shopfront.com business will incur. Remember, it will probably cost you more than you think. Compensate for this in your assumptions. Tip: try to keep your overhead costs low- fixed costs like rent and utilities. Make some assumptions about your sales and expenses and base them on some facts if possible. Sales forecast You have made your assumptions about sales; now it’s time to get more specific and plug your predictions into a spreadsheet. You can use the free spreadsheet entitled “Sales Forecast (12 Months)” on this page of the SCORE website (it’s second from the bottom). Predict the monthly sales you will make for each of your products and services and add your prices to work out how much revenue you plan to make in the first year. Create your sales forecast. Profit/Loss projection You know how much revenue you plan to make in the first year. Unfortunately you will not get to keep all of that money because you have to pay your expenses. In your Profit/Loss projection you subtract your expenses from you sales revenue in order to work out how much profit (or loss) you plan to make in the first year. Use the spreadsheet entitled “Profit and loss projection (12 months)” on this page of the SCORE website (there might be sections of the sheet that you don’t need). There is also a 3-year projection spreadsheet available. First, copy and paste the totals in your sales forecast into the “revenue” section. You can then enter your projected cost of sales (how much it costs to make your sales) and your expenses. The result is your profit. If you deduct your startup expenses from your first-year profit, you can work out if you will break even in the first year. Create your profit/loss projections. Will you make enough profit? Slingshot V1.0 44 Shopfront.com Cash Flow projection Like we said, cash is king. You can’t run out of cash. Creating a cash flow projection will show you how much cash you will need in future to avoid going bankrupt. The cash flow projection is very similar to the profit and loss projection with one major difference: the cash flow projection takes into account when you actually get paid, and when you actually make payments. Use the spreadsheet entitled “Cash Flow Statement (12 Months)” on this page of the SCORE website. There are good instructions in the sheet itself. Once again, there might be sections of the sheet that you don’t need. Don’t forget to paste your pre-startup expenses into the cash flow sheet (first column). If your cash position ever goes negative you will have run out of cashyou will have to work out how to get the cash before you need it! More on this shortly. Create your cash flow projection. You don’t ever want to be too low on cash! Prepare for crisis If possible you need to be ready for crisis. If oil prices spike, airlines go out of business. If there is a terrorist attack, airlines go out of business. What sort of events outside of your control could spell trouble for your business? How would you deal with a crisis financially? Slingshot V1.0 45 Shopfront.com Do you need funding? I will be including a detailed chapter on finding funding in version 2 of Slingshot. Until then, visit the funding/capital section of your government’s business website: Other countries- Check your government’s website for information on running a business in your country. Slingshot V1.0 46 Shopfront.com 11. ASSESS YOUR STRENGTH Does the world truly need your business? This section is a bit of a reality check that will get you thinking about how viable your new business really is. Competitive Advantage Competitive advantage is like a brick wall that you build around your business to protect it from competitors. It is an edge that you have over the competition. A business with a big competitive advantage is valuable, because it can’t easily be copied. A business with little or no competitive advantage is at risk of being snuffed out by a competitor. There are many forms of competitive advantage: anything from having technology that no-one else has to pursuing an idea that no one else is crazy enough to pursue to having the best location. If your local video store is the only one in your town it has a huge competitive advantage: people have to drive to the next town to do business with a competitor! Some competitive advantages are much stronger than others. The question is, what are your competitive advantages and how could you create more? Most new businesses enter the world with very few real competitive advantages. Don’t be scared if your business does not have many competitive advantages- just get to work building them! Have a look the Porter five forces analysis for a list of different types of competitive advantage. In Pirates of Silicon Valley the young Bill Gate’s character says: “You know how you survive? You make people need you. You survive because you make them need what you have. And then they have nowhere else to go. Right now, we’re dead- nobody needs us.” Needless to say, Microsoft ended up working out a way to make people need them. Note: be careful- if you have an outrageous competitive advantage you don’t have to provide a remarkable experience because people have nowhere else to go. You can easily become a jerk, which definitely isn’t good for your customers and definitely isn’t good for you in the long run. If the owner of the only video store in town abuses his competitive advantage and becomes a jerk, people might just start making the trip to Slingshot V1.0 47 Shopfront.com the next town. And if someone builds a second video store in the town it’s bye-bye, jerk. What are your competitive advantages? Do you have any? How could you build more? Getting going is probably the best thing you can do at this stage! Fulfil a need One last time: does you business truly fulfil a need? Does it solve a problem for your target market or provide them with benefits that they really want? You might have a competitive advantage because you sell something that no-one else does, but is there actually a need for this product/service? Be creative. With a bit of experimentation it is often possible to turn an average product into a unique and much needed product. “Think outside the box”. Could you tweak your products and services or create new ones in order to provide more valuable products and services? Risks What are some of the risks facing your new business? Brainstorm theseeverything from business partners fighting to hurricanes. How can you avoid these risks? How will you deal with a crisis if it arises? Write down the risks to your business and explain how you will manage those risks. SWOT You might like to do a SWOT analysis. It will give you a good idea of your businesses competitive position. In a SWOT analysis you list your business’s: Strengths Weaknesses Threats Opportunities Slingshot V1.0 48 Shopfront.com Mplans.com has a good article on how to perform a SWOT analysis. Complete the SWOT analysis. Apply anything you learn during the analysis to your Cunning Plan. Testing time The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? Highly Recommended: What They Teach You At Harvard Business School Slingshot V1.0 49 Shopfront.com 12. SET DEADLINES When will things be done by? In this section you will set deadlines to ensure that your business is built at an impressive rate. We’ve already talked about the fact that acting is what makes your business succeed and how it is possible to plan and learn forever. Setting deadlines is an effective way to ensure that you act. You have already set your Ultimate Goal, but when do you plan on achieving it? In order to reach your ultimate goal by this time, what do you need to have done by next week? What has to happen right now? It’s time to answer these questions by setting deadlines. Feel free to mess with the structures below- Slingshot is not the boss- you are. The Ultimate Deadline This is in your manifesto. Your Ultimate Goal should lean on the side of being impossible. This gives you something big to work towards. Show people your Ultimate Goal. When they say “there is no way you can do this”, set out to prove them wrong. You can take it one step further by setting it up so that you will be highly embarrassed if you fail to reach your ultimate goal. Tell people about your plan to the point where failure becomes out of the question. If your ultimate goal is crazy enough, you will probably fail. So why would you deliberately embarrass yourself? Because if you don’t you probably won’t even come close to your Ultimate Goal. On the other hand, if you do pressure yourself like this you might just get close enough to your Ultimate Goal to prevent embarrassment. Potential embarrassment is a good motivator. Play on this. Make your ultimate goal too crazy for people to believe then set out to prove them wrong. Note: whilst most people will believe that you are crazy, the few that believe your goal is almost possible will become your strongest allies. These are the people you want working for you and helping you to spread the word. Slingshot V1.0 50 Shopfront.com Give your Ultimate Goal a re-jig if you need to then set the date that you WILL achieve it by. This date is the Ultimate Deadline. Email 10 or more friends about your Ultimate Goal and your Ultimate Deadline. Congratulations. Your mission is now to make sure that you achieve your Ultimate Goal by the Ultimate Deadline come rain, hail or shine. You alone are accountable. You just began an epic adventure. Major Deadlines In order for you to reach your Ultimate Goal by the Ultimate Deadline, what has to happen? Set at least 5 major deadlines between now and the Ultimate Deadline. For example, if you are planning to have made 1000 sales and have offices in 4 countries in two years time, your major milestones might be: 100 sales made- six months from now Office in New York- nine months from now 350 sales made, break even- 12 months from now 600 sales made and Offices in LA and London- 18 months from now Ultimate Goal achieved- 2 years from now (Ultimate Deadline) Create your major deadlines. Set specific dates for each. You might even want to show these to your friends… Monthly Deadlines In order to achieve your Major Deadlines, what do you need to achieve each month? For now, work out what you need to each month up until at least your first Major Deadline. In the example above you would say “our first major deadline is 100 sales in six months. What do we need to achieve each month in order to achieve this? Example: End of month 1: Business planning finished, first product designed and fully tested. End of month 2: First product released. End of month 3: 15 sales, second product designed and fully tested End of month 4: 35 sales, second product released End of month 5: 65 sales End of month 6: first major deadline (see above) Slingshot V1.0 51 Shopfront.com Create your monthly deadlines. Set specific dates for each. If your major deadlines are essentially monthly deadlines, you might want to skip this step. Weekly Deadlines This should be fairly obvious by now: what has to be done by each week in order to hit the monthly deadlines? Plan for at least the first 3 monthly deadlines. Example for month 1: End of this week: business planning finished End of next week: first draft of product design, begin testing In 3 weeks time: product design fully tested, errors found and ready to be fixed. In 4 weeks time: first monthly deadline achieved (see above) Create your weekly deadlines. Set specific dates for each. Right Now What needs to happen right now and over this week if you are to achieve your first weekly deadline? Plan it out on a calendar and expect everything to take up to twice as long as you expect. You might find that your first weekly deadline is going to be hard to hit. Good! This will encourage you to prioritise, use every resource at your disposal and delegate tasks. Remember, if you don’t hit this weeks deadline you are already behind on your Ultimate Goal. If you miss a deadline you’ll have to catch up next week. On your calendar, plan out what you need to do this week in order to hit your first weekly deadline. The first thing will probably be “finish Slingshot”. Highly Recommended: Getting Things Done Slingshot V1.0 52 Shopfront.com Congratulations. You have put together a Cunning Plan. You may review and update your Cunning Plan as much as necessary, but remember not to spend too long planning… acting on the plan is what will bring your business into existence. Slingshot V1.0 53 Shopfront.com 13. BOOK OF SECRETS How will your business be run? It’s time to get technical. You need to work out how your business will operate and create your Book Of Secrets, or BOS for short. This is your business’s Operations Manual. It contains detailed information on how your business is run- the secrets behind your business (which may not be secret at all). You can decide how specific you want your BOS to be. Some businesses (often franchises) work well because their Operations Manual is completely comprehensive- it thoroughly describes how every single task in the business is performed, from what is said to customers at the counter to the amount of time in seconds that fries should be cooked in custom-made fryers. This approach is efficient, and delivers what customers expect (almost) every time, but it can also be lifeless and devoid of personality. Another option is to loosely define how your business is to be run and give you and your people the power to decide on the details. Some areas of your business, though, will definitely be best when thoroughly described e.g. “what to take to a film shoot” or “how to mix a healthy tin of 2-stroke”. Be Thorough (but not necessarily too specific) No matter how strict or vague you want your operations manual, you should go over every aspect of your business and decide how each area will be run e.g. everything that happens from the moment a customer contacts you to the follow-up calls they receive 5 years later- everything from where you will get supplies to how you will prepare products. Doing this helps you avoid running into problems later. For example, I know from experience that if you haven’t specified “what to bring to a film shoot” in advance, there’s a 90% chance you’ll forget something crucial e.g. extra batteries for the microphone or the tiny piece that connects the camera to the tripod. There were times when I had to use the cameras dodgy internal microphone and once I even had to duct-tape the cameras to the tripods. Embarrassing, not to mention completely unremarkable. Slingshot V1.0 54 Shopfront.com If you have not specified that you will check your older email address (the one you hardly use anymore) once a day, you may miss out on a great sale opportunity. If you don’t specify that you will not accept checks, you or your people will sound silly saying “errr… I don’t know, sir.” If you don’t water your plant once a week, it will die. If you don’t take out the trash regularly, your office will reek. As part of your Book of Secrets you should make a list of things that need to be done daily, weekly and monthly and so on. Don’t forget to review your Cunning Plan regularly, assess your progress and make any updates. You might even want to read over Slingshot again every now and then. You should also read over your Manifesto once a week. Some things to think about You can apply everything that you learn about business to your Book of Secrets. Here are some things to think about now: Where will you store information? Will your business have departments? You could create a folder for each department on your computer and store all information and software systems related to a department in its folder. Will you offer: Delivery? Warranty? Support? Refunds or replacements? If so, on what terms? How will you invoice customers? Freshbooks is a good tool for this. Will you let people buy on credit (buy now, pay later?). If so, on what terms? Selling on credit is not great for your cash flow (you have to wait to get paid and there is always the chance that you may not get paid). If you really need to offer credit initially, this article might help. Note: selling on credit is different to accepting credit cards. Slingshot V1.0 55 Shopfront.com Distribution- how will you get your products to people? Online ordering only? Phone ordering? Through other stores? Home delivery? If you need supplies/inventory, where will you get them? Always keep records of your business’s development- DON’T DELETE OLD FILES OR DOCUMENTS! Put them into archive folders. This ensures that you can prove the development history of your business and your products if you ever need to. Will you have a “green” policy? Will you have an idea pool that your people and/or your customers can put ideas into? Constantly find out more about your target market; what they like, what they want, and what they think of you. Create your Book of Secrets. You can do it on computer, on paper- any way you want. You can format it and organize it any way you want. It can be as long or as short as you want. Prepare remarkable, outstanding ways to run every area of your business. Remember, a thorough Book of Secrets is a great thing, but don’t spend too long on it! Creating a system doesn’t build a business- using it does! You can improve it later- including during the next few steps. On your shopfront You might want to outline some of your remarkable procedures in a blog post e.g. “how we wash your dog to perfection”. You could even make a YouTube video and add it to your shopfront’s gallery. Systems Systems can make your life easier- Computers, software, cars and powered eggbeaters to name a few. The are countless online tools that can help you (Shopfront being one of them). Which systems will you use in your business? A good way to work this out is to go over your Book of Secrets and in each section ask yourself “could this be done better or Slingshot V1.0 56 Shopfront.com made easier by using a system?” Search Google for tools that can make your business run more efficiently and effectively. Don’t spend too long trying to work out how to make certain bits of software work for your business. If it is not an obvious, easy solution you will probably waste more time and money setting it up than it will save you! Writing things down is often the best way, especially at the start. Go through your Book of Secrets and find systems that can make things more efficient or more effective. Use it! If you are doing this solo you need to ensure that you actually do everything you have described- there is no point compiling your Book of Secrets if you are not going to apply it to your everyday operations. If you have other people working with you, you need to ensure that between you the Book of Secrets is being followed. There are a few ways you can do this: You can print off parts of the Book of Secrets and stick them in appropriate places. You can have training sessions in which people are quizzed on your Book of Secrets. If you are the only person, you can get Aunty Beryl to test you. You can force yourself and everyone in your business to read the entire Book of Secrets weekly. You can plant a chip in everyone’s brain that tells them exactly how to do something at the exact moment they need the information. How will you ensure that your Book of Secrets will be applied to your dayto-day operations? Improvements How will you constantly improve your Book of Secrets? How about making one improvement per section per week, checking to see if it worked the next week and making it a permanent feature of your operations manual if it’s good. Make it easy for people in your business to make suggestions Slingshot V1.0 57 Shopfront.com e.g. an idea pool. Have a weekly “Book of Secrets Meeting” at which you think of things to add/ways to make it better. Regularly look for problems and find systems to solve them. How will you always be improving your Book of Secrets? Do you need to add anything to your BOS to ensure that it is always being improved? Example: add “have meeting on improving the BOS” to your weekly to-do list. Your Role Your role (the role of the boss) is to build a great business- to hit your Ultimate Goal by the Ultimate deadline. This is going to be hard to do if you are spending all of your time doing technical work. Depending on the size of your business there is a good chance you will need to delegate technical work to other people at some point. If you plan on doing all of the technical work yourself it is important that you allocate time to improving your business (20% of your time is probably wise- one day a week). People As your business grows you will probably need to delegate more and more technical work to other people so that you can spend more time improving your business. Who will do the work? There is a chance that you are the only person in your business initially, but if you have other people or partners or intend to have them in the future, how will tasks be allocated to them? Will you have a hierarchy in which there is a boss, managers and operators? The boss assigns tasks to the managers who assign tasks to the operators and ensure that deadlines and budgets are met. This is generally the way large corporations operate. Another way of doing things is to give tasks, deadlines and budgets to people or teams of people and let them complete the work under there own command without managers. You should allocate every task in your BOS to a “position” in your business (not a person). Give each position a name. You might even want to draw an organizational structure for your business showing where each position fits in: Slingshot V1.0 58 Shopfront.com Slingshot V1.0 59 Shopfront.com Who will be filling which positions initially? Each person can fill more than one position. Also, who will be in charge of marketing (next chapter)? Create your business’s “positions”. Assign each position in your business to yourself or to a person in your business. Commitment If you are going to hit your deadlines, each person in your business must be able to commit to the duties they have been assigned. You can get a good idea of potential commitment levels by making three lists: The first is your Bucket List, on which you list all of the things you want to achieve before you “kick the bucket”. The second list is your Priority List, on which you list your current priorities in life and rank each of them on importance. The third list is your Time List, on which you list the things that currently take up your time and approximately how much time they take. Work out how much time you potentially have for your venture. By looking at all of these lists, you should get an idea of the commitment you will be able to make to your venture. Have each founding member of your business complete each of the lists. Can each person commit to their role in the new business? If so, have each person sign a brief homemade contract committing to their role. This gives each person a sense of accountability. Ownership If you are starting this business as a team (2+), or if you are planning on finding a business partner, there is something that is best decided early on in order to avoid arguments or worse down the track: who owns the business? When deciding on who owns what, look at the roles each person will be completing. How much will each person contribute? It is important to remember that it is not as much about the amount of time each is putting Slingshot V1.0 60 Shopfront.com into the business as it is about the amount of value each person is creating for the business (although you could base it on time contributions if you wanted to). Work out how much of the business each person owns and sign a brief contract. You should also look at having a partnership agreement drawn up. If you sign a partnership agreement you will officially be a partnership and will have more tax responsibilities than a sole trader (see the chapter on Compliance) Finding Great People Some quotes from experts in this field: “Your organization is only as good as its worst member”- Steve Jobs. The worst person in your business sets the minimum acceptable level of performance and others will naturally drop to this level over time. “Hire people who are as passionate about your product as you are (or at least close to it)”- Guy Kawasaki. Guy encourages you to take a chance on these people if they don’t have the “right” resume. “Herd cats, don’t lead sheep”- Richard Branson “Hire people better than yourself” “Whiners and spectacle-makers in a company will contaminate everything you do (as opposed to those who try to make things right). “If I had my favorite bowl of ice cream over here, and a bowl of shit over here, if I took one spec of shit and put it in the ice cream, would you eat the ice-cream?”- What They Teach You At Harvard Business School Hire people that get excited about your manifesto! 6 terrific tests The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? Slingshot V1.0 61 Shopfront.com The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? You have begun to compile your Book of Secrets. It’s time to Get Buzz and get going! Slingshot V1.0 62 Shopfront.com 14. BUZZ PLAN How will you attract customers? Get people talking In order to hit your crazy deadlines you’ll need ingenious marketing. Time to get creative! You have defined what your business is, what it does and how it does it. One tasks remains: attracting customers. If your business is remarkable, it will naturally promote itself. If what you’ve outlined in your Book of Secrets creates an amazing experience for your customers you won’t have much trouble getting repeat business and your business will grow naturally by word of mouth. If your business grows naturally you will still need to a) introduce your business to new people in your target market and b) make it easy for existing customers etc to talk about your amazing business. Enter your Buzz Plan. Your Buzz Plan outlines how you are going to get your people talking about your business. When people think of advertising or marketing they often think in terms of mediums. For example “our marketing plan consists of making a radio ad, having a sign above our store and creating a Facebook group”. Thinking of mediums is the easy part. Your Buzz Plan is not about thinking of every way you could advertise- it is about answering this question: “how do I get people talking about this business?” It is about how you do the advertising, not what types of advertising you use. It is about what is special about the advertising that will make it worth talking about instead of being boring and completely forgettable. Slingshot V1.0 63 Shopfront.com Creating the Buzz Plan To create your Buzz Plan you will need 3 lists: A list of every possible advertising/marketing medium that you can find/think of. Here is a non-exhaustive list to get you started. You can also Google phrases like “ways to advertise”. Think up unique places to advertise. A list of every possible PR outlet that you can find/think of e.g. Time magazine, Engadget (blog), your local paper. A list of every group of people who are likely to talk about your business in some way. Coming up with a brilliant Buzz Plan requires scheming- looking over all of the items on your three lists and hatching ingenious ideas that will get people talking. What can you do with a TV ad that will get people talking about your business? What sort of competitions could you run that will get people talking? Do you have any ideas for a YouTube video that you just know will spread? What could you give to people who are already talking about your business to help them spread the word on a greater scale? What could you tell the press about your business that will have them running full page articles? Which items on your 3 lists from above can you use to do something that stands out and is worth talking about? Your Buzz Plan needs to consist of marketing campaigns that are not just funny, not just different but remarkable to the point where they make people want to tell everyone they know about it immediately. Interesting, controversial, good old amazing service- think about the things you talk about and apply them to your marketing efforts. Getting Buzz is fun. Also, you can turn day-to-day activities into fun marketing efforts. Everywhere you go, everything you do, you can be marketing in some unique, interesting way. Apply this Value to your business: “Nothing goes out unless it is worth talking about”. Your letterhead, your phone calls, your meetings with customers. Every single thing people see and experience about your business should blow them away. Create your Buzz Plan: create your 3 lists and then list the schemes that you will use to get people talking about your business. Slingshot V1.0 64 Shopfront.com On your shopfront Your shopfront is a great marketing tool- make it worth talking about! Just do it Marketing is the hard part. Up until now everything has been mostly behind-the-scenes- making plans. To start marketing means actually releasing your business into the wild, and that can be scary. It means picking up the phone, putting out signs and occasionally running down Main Street with your business tattooed to your butt. Getting buzz is risky. You stand to look silly if your scheme doesn’t quite work. It is much safer to make a boring ad, but that will probably make you look even sillier, and you don’t stand to reap the enormous buzz a well-executed Buzz Plan can attract. Don’t be annoying There is real potential to be a complete jerk in the quest to get buzz. Some people will do anything for attention. This is not what your Buzz Plan is about. Your Buzz Plan is about coming up with well thought-out plans for impressing your target market, not tricking people or taking advantage of people. A few tips: Don’t SPAM Reckless guerrilla marketing is easy. Anyone can get attention by destroying something. Think, don’t destroy. Just because you can do something to get attention doesn’t mean you should. Don’t mock people to get attention Don’t break advertising or other laws Don’t lie- just don’t be dodgy in general Don’t look like the attention seeking kid in the schoolyard that everyone wants to punch. That’s enough don’ts, here’s a do: Do provide your target market with awesome experiences that they will want to talk about. Slingshot V1.0 65 Shopfront.com Highly Recommended: Word of Mouth Marketing For the last time The Focus Test: Is everything you just came up with focused on providing your target market with a remarkable experience? The Differentiation Test: Does everything that you just came up with help you to stand out from competitors? Or is it just the way things have always been done? Forget the status quo- find better ways of doing things. The Remarkable Test: Is everything that you just came up with worth talking about? The Research Test: Have you done enough research on this section? Don’t be scared to pick up the phone and ask people in your target market some questions! The Act Now Test: Could you start implementing anything from this section right now? Acting is what will make your business work. The Value Test: Are you addressing a real need? Are you providing a solution to a problem or a benefit that people really want? Do you have a competitive advantage in this area? How could you build more competitive advantage in this area? Slingshot V1.0 66 Shopfront.com Some Marketing tips Think twice before holding regular sales. Regular sales educate customers to buy from you only when prices are slashed, essentially bringing your price down permanently. When making sales, go straight to the top if you can- talk to the people who make the buying decision. Don’t be a jerk. These days people can spread word of your jerkiness around the world in seconds over the internet. Think of strategic partnerships you could form with other businesses to save money or make your marketing more effective. Sick of salesmen? Sick of being sold to? Sell from the customer’s shoes. Show your firm belief in your product, but also show a firm belief that your prospect can choose what is best for them. Want to land the sale, but want your prospect to land the right provider as well. This creates trust. You might lose a few sales in the short term (probably not), but more people will come to you to be sold to over the long term. Don’t harass people. You don’t create a great business by harassing, annoying or making people feel awkward or confronted. You are there to help them out, and to help them have a good time in their search for the right product or service. There are a lot of cheap and free advertising opportunities on the internet. Find them and use them. Make your business credible and trustworthy. Be honest about your size and intentions and show your real name. Don’t advertise things you can’t deliver. Show pictures and provide examples of your products. Show customer feedback- even feedback that offers constructive criticism. Show photos and videos of your business in action. Show your face and your personality. Some people will hate your business. That’s human nature. As soon as a group of people say they like you, others will say they don’t. Don’t be offended; embrace criticism. Listen and argue constructively when you Slingshot V1.0 67 Shopfront.com should, but don’t get angry or hold a grudge. Just think “sticks and stones” and keep going. Converse with the press- don’t harass them. Spend your time creating amazing marketing campaigns- not sending boring ones to hundreds of press outlets and harassing them. The person with the vision (you) should write the Buzz Plan. You most likely know how to speak to your target market better than, say, a PR person. A PR firm should be used for it’s contacts and for getting some feedback AFTER you’ve created material. It should not be seen as an authority e.g. “is it OK to say this here?”. Consider a PR persons advice, but don’t let them make decisions or put words in your mouth. Stick to your gut. IMPORTANT: Monitor your marketing campaigns and dump the ones that aren’t working. Find out what people are saying about you on the internet and elsewhere and respond fast. Google Alerts and Twitter Search are great tools for this. Add some buzz-related tasks to your Book of Secrets to ensure that your Buzz Plan is always being improved and updated. Highly Recommended: Seth Godin’s Blog Slingshot V1.0 68 Shopfront.com 15. GO! Time to get moving. You have made it through Slingshot! You might want to give it a second run through e.g. refine your Manifesto and your Cunning Plan and improve your Book of Secrets and your Buzz Plan. Good idea, but you’ve probably got enough to make a start. Come back later. The main prupose of this guide was to think things through. That has been done, now go! After all, you’ve got deadlines to hit, and they aren’t going to hit themselves… It’s easy to procrastinate. Some common phrases are “we need to buy this, this and this”, “we need to plan more”, “we need to wait until the right time”, “we need to get everything ready”, “we need to clean up”, “we need better systems”, “we aren’t ready” and “the product isn’t ready”. Sometimes these phrases have truth in them, but they are just as often excuses for not getting on with it. You decide. Your ability to stop preparing and act will probably be the biggest factor in determining your success. Seth Godin says in Tribes: “Get going. The tactics of leadership are easy. The art of doing it is the hard part. Change isn’t made by asking for permission. Change is made by asking for forgiveness later.” Need more money than your budget allows? Welcome to entrepreneurship. The Harvard Business School definition of entrepreneurship is “the relentless pursuit of opportunity beyond the constraints of the resources currently controlled”. Prepare for a rough ride. There will be a chapter on Finding Funding in version 2 of Slingshot. For now, have a look at this. Chances are you will be highly underresourced at the outset. Slingshot V1.0 69 Shopfront.com Start working towards hitting your first weekly deadline! You are ready to start your shopfront (if you haven’t already). Click here to sign up or log in if you are already a member. Coming in version 2 of Slingshot: chapters on finding funding, leadership and more on Compliance including sections for the US, UK and Canada… Thanks for reading! Hope it helped. Don’t forget to leave some feedback here! Slingshot V1.0 70 Shopfront.com
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