Take Steps to Turn an Idea into a Business

There are literally thousands of would-be entrepreneurs who have a “great” idea but don’t know how to move the idea into a plan of action. One of the first things to ask yourself is if this is something that might just be a hobby or if it is something you want to seriously pursue as a business. The key to successful business ideas is execution, and that takes planning and hard work, and lots of it. Starting off with a business plan is the first step toward changing your ideas into a reality. By putting your thoughts on paper you can see where there are gaps in your thinking and corrections are easier to make.

Solid business operations support great ideas every time. Actually, contrary to popular thinking, most good, profitable businesses are developed from rather ordinary ideas, but grow into successful ventures because the entrepreneur is passionate about what he/she is doing.

Jennifer Fleiss, writing for www.forbes.com says, “Sure, entrepreneurship is intimidating, but the reward is not just in building a successful company; it is in the lessons and growth you acquire every day just by doing, trying — and yes — failing.

Be open to suggestions and guidance from successful business people. Brett Krkosska for www.HomeBizTools.com lists several steps you can take. He writes, “Behind every successful business you’ll find at least one great idea. For most people, the definition of a successful business is one which is profitable, and a profitable business is built upon ideas that have been properly researched. Here are some steps you can take to research your idea and turn it into a profitable business:

1. Make a list of the reasons why you want to go into business for yourself. Look at your list critically. Does starting your own business help you realize these things?
2. Make a list of the things you like to do with your time. Success can be elusive if you’re not truly excited about your business. What are your interests and hobbies? What are you good at?
3. Focus on filling a niche. It is your expertise, uniquely practiced and applied within your business field that creates your niche in the market.
4. Talk to friends or family who own or work in a similar business. Get their input on your idea.
5. Participate in discussion forums. This is a great way to take the pulse of your potential customers. You can also see trends, get feedback, and establish working relationships with like-minded people.
6. Evaluate the demand for your product or service. You need to understand the pace and direction of your industry. This understanding alerts you to shortcomings with your idea and helps you channel your energies correctly. It also helps you approach your business with innovation and vision.
7. Research businesses in your surrounding area in order to size up the competition. Ask yourself how your business will be better and different.
8. Visit your competitors online.
9. Define the operation of your business.

Also, remember that your SCORE counselor is your first source for expert advice. Sign up for a Business Plan Workshop and stay excited and enthusiastic about your idea. It’s the best road to success.

Score Advanced Social Media Seminar

After the success of the introductory Social Media Workshop held in October 2011, Northern Arizona SCORE, partnering with the Flagstaff Chamber of Commerce, is hosting an advanced Social Media for Small Businesses Seminar January 21, 2012. The workshop will be held at the Flagstaff Chamber of Commerce, 101 West Route 66, Flagstaff, AZ 86001-5542, from 9am to noon and will be limited to 20 participants. The cost is $25 per person for the entire morning workshop.

Northern Arizona small businesses can learn how to grow and enhance their business by using the different social media outlets. This seminar is being presented by Ken Colburn, the president and founder of Data Doctors, a Tempe-based company that offers computer repair solutions for individuals and businesses. Ken Colburn has been involved in the consumer electronics industry since the early 80′s and founded Data Doctors Computer Services, a national computer service provider, in 1988.Ken also hosted the Award-Winning Data Doctors Radio Program and is a frequent expert to the media on all things technical. He has been honored as a recipient of the WP Carey Spirit of Enterprise Award.”

Ken currently writes a weekly computer advice column, hosts the weekly “Computer Corner” radio show on KTAR Radio in Phoenix as well as the Cox Television technology show “Tech-NoPhobia”. Ken’s ability to explain technology to the average user makes him a popular speaker at schools, computer clubs and national conferences.

Larry Grossman, retired entrepreneur and current Northern Arizona SCORE President, will be the facilitator for this seminar. Larry is a serial entrepreneur and has authored a book by the same name. He has co-founded five companies, taking three public with IPO’s on the NASDAQ. He is the inventor of the Orthopedic Mini C-arm X-ray Imaging technology.

Don’t miss this impressive seminar to enable you to take advantage of this opportunity to learn how to grow your business through today’s technology.

To register for this seminar, or for more information, contact Northern Arizona SCORE at 1-866-779-4829, or visit the Web site, www.scorenaz.org, or email scoreoffice@scorenaz.org.

Also this seminar will be presented in Prescott in February. Please check this blog or the website, www.scorenaz.org for details.

Who and What is SCORE

Each year as the New Year rings in and SCORE looks forward to another successful year, it is with humble pride that we begin by answering this often asked question; “Who and what is SCORE”. The SCORE Association, headquartered in Washington, D.C., is a non-profit association and a resource partner of the U.S. Small Business Administration. SCORE is dedicated to the education, growth and success of U. S. small businesses and non-profits. Nationwide, there are more than 10,000 businessmen and women, some retired and others still working, who volunteer their time to provide free counseling and business advice as a public service. These volunteers are located in some 390 chapters across all 50-states.

The main office of the Northern Arizona Chapter is located in Prescott and serves Prescott, Prescott Valley, Chino Valley, Cottonwood, Flagstaff, Sedona, Lake Havasu, Bull Head City and Kingman and all other surrounding communities. Our chapter currently has more than 30 active members with additional members in training. Two of our members specialize in counseling and developing strategic plans for non-profits. In 2011 Northern Arizona SCORE counseled 403 new clients and held 879 counseling sessions with existing clients. The Chapter held 47 workshops with 1668 attendees.

Our Management Counselors offer free confidential counseling to entrepreneurs seeking to start up a new business or non-profit or desiring to make improvements or changes to an existing one. Typical counseling areas include (1) beginning a business, including name and legal entity, (2) promoting, pricing and selling a product or service, (3) accounting and financial management techniques, (4) protecting intellectual property with patents, copyrights and trademarks, (5) hiring, training, compensating and motivating employees, (6) creating a Business Plan and finding financing, (7) complying with business and labor laws and regulations and, (8) using the Internet to promote business. Counseling on specific individualized issues is also offered to existing business owners.

Our local chapter’s SCORE Counselors typically offer one to two free business workshops each month on the subjects discussed above. Handout reference material is provided, and there is ample time for in-depth questions and answers. Starting in January, we will be offering a series of in-depth workshops that will take new business owners through the entire process of developing a complete business plan. There is a nominal charge for this series of classes. The fee will include the complete six-class series, a workbook, and individual counseling.

All our Management Counselors are experienced in one or more phases of business or non-profit management. Some have owned and successfully managed their own small businesses, some have marketing and sales backgrounds, others are experienced business planners or computer experts, and a few are former educators at the college level. No matter what our individual backgrounds, we all have one thing in common, our desire to help small businesses and non-profits succeed!

Start your business out on the right foot.

There are very few small business owners who understand accounting or are able to effectively use their company’s financial statements to operate their businesses as a management tool. Financial statements are the “report card” of a company’s business activity. If your business is beginning to develop financial problems, these will first be evident in your company’s periodic financial statements. If you want financing, the banker or lender will want to look at the company’s past “report cards” and will expect the business owner to understand them.

Understanding accounting and how financial statements work is not simple. In fact, because it is sufficiently complicated, accounting software systems such as QuickBooks® and Quicken®, have taken many of the problems away by allowing users to create sales invoices, pay their bills, pay the payroll, order materials, manage inventory, create estimates for work to be done and perform many other tasks without ever understanding the accounting basics that these systems provide unseen in the background.

However, these computer programs presuppose that your chart of accounts has been properly established. Carol Gilson, of In-Balance Bookkeeping, (CaGilson@aol.com) explains, “The number one important factor when you start a new business is to have someone knowledgeable establish your chart of accounts. If you hire someone without experience, then you end up later having to hire a professional at a greater cost to clean up the situation created by not using an established, reliable bookkeeper in the beginning.”

“Also”, continues Gilson, “these computer programs are not extremely user friendly and often misinterpret what the individual business person really needs. The chart of accounts must be customized to suit the specific business before an individual owner starts to input on their own. A good bookkeeper helps the business owner by explaining these systems, how they work, and how they benefit the business. The chart of accounts is the most essential tool for the future health of any business, so make sure you start off on the right foot.”

When you first establish your business you need to have a team that includes an accountant and a bookkeeper so that everyone works together so you can utilize their expertise to know what is going on in your business. If you can rely on and communicate with professionals who can explain what is happening with the business, this will allow you the freedom to market your business and increase your sales.

So how do you learn about accounting and chart of accounts management? First, you can take courses; Yavapai College offers basic accounting. You can attend workshops and seminars conducted by SCORE, the Small Business Development Center, and others. You can, and should, seek the assistance of a good bookkeeper or CPA who can provide direction. Whatever you choose, learning and understanding accounting and how to use your business’s financial statements is absolutely essential. Don’t forget to rely on your SCORE counselor as a resource for information on the fundamentals of establishing a new business. Your individual counselor can provide a well-spring of information that will enable you to make sound judgments for starting your new business off correctly.

Published 12/18/11

Should you partner with friends or family?

Between family members, as well as friends, a well-prepared written agreement is best. This should be detailed covering capitalization, ownership, succession, and even death. Should your partner be unable to fulfill his duties, who in the line of succession will become your partner? It is not about mistrust, but about foreseeing problems and having an agreement to settle disputes. You also want a written agreement so the friendship or family relationship is not jeopardized. Also, in the event of death or accident, there may be no way to sort out what any verbal arrangement entailed.

As far as the pros and cons, there are several opinions, but clearly it is best to have things spelled out. Bob Lewis, who writes the business advice blog for www.infoworld.com, says, “There’s an old saying. Partners only fight under two conditions: when they’re making money and when they’re losing money.” He continues, “When two people form a partnership, it can make sense — if they’re trying to form a large enterprise and need to pool their resources to get it started. Otherwise, why do it? You can each incorporate as an LLC or S-Corporation and act as partners as much as you want — through a formal joint operating agreement (JOA) or through a handshake. Either way, you avoid creating a business entity that receives and distributes revenue to its partners and signs up for joint obligations.”

Lewis lists some of the more obvious pitfalls with a partnership:

• Each partner fails to value what the other partner provides to the joint venture.
• The partners disagree on how to handle a situation with a client.
• One partner is better at selling and doesn’t want to share the revenue equally with the partner who isn’t as good at landing clients.
• One partner is better at delivering results, or expends more effort creating them, and resents the other partner taking an equal share of the revenue anyway.

Jean Murray, who writes about business and tax law for www.about.com, acknowledges the pitfalls, but provides suggestions for avoiding them, “You have heard horror stories about working with family and friends, but you are sure it will work out. But you wonder what you should do to make sure you can work together in a business without destroying that relationship.

“Sit down and talk about who is going to do what job in the business,” Advises Murray. “Maybe you like doing marketing and your friend or spouse wants to do the accounting. Talk about what happens when one of you has to stay home with a sick child, or if your friend wants to take a vacation. Cover as many concerns as possible. Make a list of all types of contingencies.

“Create a written agreement, describing who does what, how much of the business each person owns, and listing what happens if someone wants to leave the business or if there are problems. And,” states Murray, “follow the same process for family or friends. You may not be able to save the relationship if the business starts going downhill and the person loses money, but you may be able to at least remain on a talking basis. Finally, remember ‘Business is Business’.”

Your SCORE counselor is an excellent resource for information on business partnerships. The Northern Arizona SCORE chapter provides individual free counseling and conducts several workshops throughout the year for aspiring entrepreneurs and small-business owners.

Published 12/11/11

Successful marketing on a shoestring budget.

Before you can embark on any marketing ideas you must have the basic foundations; which are a marketing plan, a marketing calendar, a competitive advantage, and, as the last issue’s column discussed, marketing research. Also, don’t forget the most important element; keeping in contact with your current clients. Once you have these fundamentals down, you’re ready to put the new plan in motion.

There is guidance in this process for Arizona businesses. Kimber Lanning from www.LocalFirstAZ.com, a state-wide nonprofit to promote local businesses, states that, “The Arizona Commerce Authority set aside $2 million to support rural economic development across Arizona, and has funded Local First Arizona to teach a series of workshops geared toward new technologies to help rural businesses compete.

“This is new system is called ‘Economic Gardening’ and has emerged nationally as an alternative to traditional growth policies and focuses less on business recruitment and more on helping home-grown, second-stage businesses. Additionally”, says Lanning, “our goal is to arm small businesses with the strategies and tools to attract new customers.”

Terra Farrar, whose business, www.EarthWalkProductions.com, is based in Sedona, asks her clients, “What are you passionate about?” She says, “You are limited to how much time you have in a given day or week to serve your clients. With over 7 Billion inhabitants on the Earth, why not target those potential clients who share your passion, whatever that is? This provides a great way to open up a conversation and allows you to have FUN doing it. More importantly, your prospective client will enjoy the conversation – which should contain an exchange of information and stories. This will build trust, relationship, rapport and be fun for them too. And they know like-minded others and will refer you. This costs nothing and can be done while you are socializing.”

Farrar advises small business people that, “With 72 Million Baby Boomers, many are looking for information on a myriad of topics as they expand their interests. You can capture your knowledge, wisdom, and expertise and turn it into a Free Report, e-book, downloadable MP3 files or even a CD, providing ‘just enough’ information to peak the potential client’s interest without giving away the ‘secret sauce’ recipe. This is a great, cost effective way for people to get to know you better, think of you as an expert in your field, and build trust. Remember, no matter what your business, you are in the relationship-building business and these tools will support you in many ways.”

Don’t forget to plan your marketing materials, business cards, website and brochures, so they reflect what your business offers. Make sure they are both professional appearing and appealing. Have a honed elevator speech ready that expresses your enthusiasm for your product or service. When it comes to your website, take a step beyond the appearance to make sure that it is easy for your clients to navigate and find exactly what they are looking for. The money spent on making these items high quality will make the difference between attracting or boring prospects and give you the best return on your money.

With some creativity and careful, thorough planning, hard work and perseverance, you can successfully market your small business on a small budget. Also, remember that your SCORE counselor is a valuable resource for marking ideas.

Published 12/04/11

Market Research – why and when to use it.

Successful Market research is knowing what trends are specific to your particular area of the overall market. Basically it means that you find out what your customers want and then deliver it.

Wikipedia describes Market Research as, “the function that links the consumer, customer, and public to the marketer through information — information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.” For a small business this can be as simple as a restaurateur watching what comes back into the kitchen for the trash barrel. If a particular dish is consistently ordered and then not eaten, it should be removed from the menu. Conversely if a specific dish proves to be a huge success then that dish can be used as a marketing opportunity to bring in more customers by offering it as a special or by possibly featuring it on a particular day of the week.

In an article for www.sbinfocanada.ask.com, Susan Ward advises, “market research isn’t just something you do when you’re working on your business plan and then shelve. Market research needs to be an integral, ongoing part of your business’ development.

“It’s crucial to analyze your market and target your clientele before you waste money on advertising that won’t get you the results you want. Market research is also critical before you spend time and money developing a new product or service.”

Most succinctly, marketing research is the orderly gathering of facts that affect your line of business and then acting on this information. It doesn’t require that you make a major financial investment by hiring a specialist, but it does require that you spend both time and thought to determine what works most effectively for your business and your customers. Successful entrepreneurs do it every day by talking with their customers to ascertain their needs, watching what they buy, and checking competitors advertising and comparing prices.

In a www.ehow.com article, How Does Market Research Help Small Businesses?, Gregory Hamel writes, “All small businesses need to be aware of their market niche, and the strengths they bring to their market; research helps a startup hone in on their niche and tailor their operations toward the market segment that is the most likely to buy their products and services. Even if a startup creates a superb product, they can easily fail if the market in their area does not care for the type of product offered.”

Hamel continues, “After the startup phase, ongoing market research helps small businesses by continually providing feedback that can be used to improve product and service offerings.”

Bear in mind that market research is not a perfect science. It registers what people like and don’t like and preferences can be influenced by hundreds of different factors. Your objective is to find out what your clients want and how best to promote what they want.

It is tough to sell people what they don’t want; conversely it is easy to sell people what they do want. In essence market research is finding out what people want and then giving it to them.

Be sure and draw on your SCORE counselor as a resource for how you can best conduct effective market research tailored for your small business.

Published 11/27/11

What’s in a Name?

Choosing the name for your business is one of the most critical steps any business owner will take. Unfortunately, many new entrepreneurs don’t realize the importance of name selection and its role in the success of the business. The name you choose could potentially make or break your business.

The right name can make people take notice; the wrong one can spell obscurity and failure. Just as you put definitive effort into coming up with your business idea, writing your business plan and selecting a location, naming your business is every bit as important. A great name should express the expertise, value and uniqueness of your product or service.

Susan Ward, in an article for www.sbinfocanada.about.com, lists 5 rules for choosing a winning business name.

Ward advises, “Get your family, friends or colleagues together for a name brainstorming session and work through these five rules.”

1. A winning business name has to be memorable – but easy to spell. Potential customers need to be able to remember your business name. But they also need to be able to find it easily.
2. A winning business name needs a visual element. So you want your business name to have a strong visual element to it. The catch is that…
3. A winning business name has to a have positive connotation. What it means to you is that when you create a business name, you need to choose words that have the positive connotations that you want people to associate with your business – and make sure these connotations are suitable for your business.
4. A winning business name needs to include information about what your business does. Including information about what your business does in your business name … makes it easier for potential customers to find your business (both off and online).
5. A winning business name has to be fairly short. You want customers to remember your business’s name (and be able to tell other people what it is)! But it’s also important for promotional purposes. You want a name, for example, that will fit well on a business card, look good on a sign or in an ad, and even a name that will serve well as a domain name. So keep it as short as possible. And a last tip: think about colors when you’re choosing a business name. Colors will be an important component of your business logo and other promotion materials.

Allison Way, in an article for www.broowaha.com, says, “Although some experts think that the best business names are abstract and generate questions, others believe that a business’s name should be informative. While some think names should be coined terms (made-up words), others think that businesses should use real words for description and memory. So what’s the right answer and how should you name your new business?

“Choose a name with the following qualities: The name should appeal to you and your target market. The name should be comforting or familiar and conjure up pleasant emotions and memories. The name should be short and to-the-point. The name should not confuse your customers or audience. The name should not be a cute pun that only you and your team would understand.”

And don’t forget that your SCORE counselor is an excellent resource and can refer you to a professional who can help you choose a name if you are struggling finding an appropriate name.

Published 11/10/11

Managing Resources to Flourish in a Down Economy

During periods of economic decline, entrepreneurs often experience the brunt of the decline. But there are things you can do to maintain a strong position throughout the downturn. It is important to create a more cost-effective and efficient operation so you continue to flourish now and be in a good position to do even better once the market improves.

Entrepreneurs who survive and prosper during tough times are those who look beyond the present, see their firm from a new perspective and adjust to doing business differently. The challenge is to be both aggressive and imaginative.

In an article for www.smallbiztrends.com Prasad Thammineni lists five steps to help small businesses save money in 2011:

1. Set the tone.

Your team will take their cues from you, so remind them of the importance of being frugal this year. Then solicit ideas on areas where the company can economize. It’s all about setting the tone and getting your employees bought in.

2. Check subscriptions and recurring charges.

Review your monthly expenses. Small, recurring charges can add up over the course of 12 months.

3. Plan for taxes.

It’s never too early to talk with your accountant about tax strategies for the new year.

4. Create an expenditure plan.

As a competent business owner, you probably already know a large percentage of the big expenditures you’ll need to make in the coming year. Put all this down in a spreadsheet, and estimate the dollar amount and the purchase date. Getting all the items on paper will help you visualize your big cash outflows for the year, and will help you prepare to make more intelligent purchasing decisions.

5. Check out Anita Campbell’s 2009 e-book on small business money saving tips! (http://smallbiztrends.com/wp-content/uploads/2009/02/get_outrageously_creative6.pdf)

She lists 75 ways your business can save money and prepare for growth.

Jeff Wuorio, a veteran freelance writer, says in http://www.microsoft.com/business, “Every small business owner knows that new technology can be pricey. But technology can also pay in the form of significant savings—particularly over the long haul. Savings from technology isn’t just a matter of plugging in a new gizmo and watching the cash roll in. You have to evaluate your priorities and choose the right technology that meets your operating and budgetary requirements.”

Wuorio lists seven ways to cut costs:

1. Cut down on paper use. Investing in a duplex printer can cut your paper use in half.

2. Advertise on the Internet. In years past, companies placed hard copy ads in newspapers and hoped someone would notice. A cost-effective option is advertising on the Internet, which allows easy tracking of results to readily identify what works and what doesn’t.

3. Communication above all. With small businesses, staying in touch is essential and can save money.

4. Don’t buy software on a piecemeal basis.

5. Make sure your technology is adequately protected.

6. Encourage telecommuting. Saying gas has dropped in price lately is akin to saying that, since your broken leg feels better, you don’t have to bother setting it—neither is a long-term solution to a pivotal problem. One way to address the issue is through telecommuting.

7. Can’t afford it? Meet it halfway. Investigate updates and other cost-effective improvements that let you operate more efficiently. Then, invest in the most current technology when your budget allows.

And … don’t forget to consult your SCORE counselor; review your business plan and make appropriate changes. You can rely on SCORE for the resources to help you understand how to economize and grow your business.

As published in the Verde Independent 11/02/11

Is it Time to Update Your Website?

Although a Web site is considered a must for practically every small business, just having a site to have an Internet presence is not enough. It is important to continually monitor and reevaluate your site’s looks, function, and utility to make sure it’s meeting the needs of your business and, more importantly, the needs of your customers.

With the advent of smart phones, netbooks, tablets and the like, what seemed sophisticated just a few short years ago might now appear unprofessional compared with other, more effective, interactive sites.

Jacqueline Thomas writes on www.webdesignledger.com that, “2011 is not about beauty, it’s about function. The trends for this new year and emerging decade are responsive design, constant connection and virtual reality.”

About Web appearance Thomas advises, “There’s nothing quite as impacting as an honest message on a quiet backdrop. Quiet can be interpreted several different ways. Forget black and white or shades of gray. Think of green, yellow or even red as your primary color. However, limit your palette to two or three colors. Work within the shades of each color for variety. It can be truly remarkable what a few colors can do for your message.”

In this age of limited attention spans, it’s vital that your site not only catch and keep viewers’ interest, but is easy to navigate. Try engaging your audience by adding interactive features such as surveys, guest books, auto responders, downloadable documents and don’t forget social media. You may also want to consider using an external service, like constantcontact.com, to deliver your communications to your customers and clients. Check to see if your current Web host offers some of these capabilities. And, if you don’t already, why not take orders online with a simple shopping cart feature? Resources for this feature include www.PrestoCart.com, www.MyCart.net, www.PayButton.com and www.EarthStores.com.

If you are computer savvy and maintain your own site, professionally designed buttons, bars and banners can help supercharge your site. You can acquire them quickly and inexpensively with software and online delivery from providers such as www.NetStudio.com and www.eNetPlace.com. You can add interesting and timely content to your site as well. Consider hiring a local freelance writer to produce original news, features and how-to articles for your site that are related to your business.

Even if you have the best Web site in your industry, nobody will find it unless it is listed with the major Internet search engines. www.SearchEngineWatch.com  offers a wealth of information about raising your search engine profile via search engine submissions, as well searching tips, search engine reviews, ratings, and other resources.

The Web offers tremendous potential for advertising your business. Google Small Business, MSN and Yahoo Small Business and AOL offer various ways to get noticed, some free, some pay-per-click and other wide-ranging priced advertising venues. Additionally there are a few top resources available for researching your markets—some free, others fee based, which include: www.Business.com for general business research, www.KnowX.com for public records research and www.Hoovers.com for company profiles and contact information.

As published in the Prescott Daily Courier 10/23/11