Business Alone

I will depart from my usual style of posting today to bring you something that might be helpful if you are having difficulty trying to decide what type of home business you might be interested in. I ran across a book entitled: Great Big Book of Business Lists.

The book listed 62 different small manufacturing businesses that entrepreneurs might start at home. I thought the list was worth quoting here as it seemed to be comprehensive and a good starting point for any of you that might be looking for this type of help.

Obviously, it would help to have expertise in your chosen niche . . . however, I can tell you that there are dropshippers available that can send any kind of product to a buyer. So even though you may not plan to actually construct patio furniture, you still have the opportunity to sell it if you can do a good job of finding profitable sources and markets for this product.

Here is the list as quoted:

1- Patio Furniture Manufacturing
2- Online Manufacturer's Directory
3- Kitchen Cutting Boards
4- Bookends
5- Weather Vanes
6- Waterbeds
7- Custom Picture Frames
8- Wooden Signs
9- Scratch Posts
10-Wooden Sash Windows

Most of the Internet's best marketing minds agree on this philosophy:

"Don't try to create interest and excitement in your prospect for your product. Find an overwhelming desire already in your prospect's mind and fill it."

What does this idea suggest? Simply this . . .

Every business begins with an idea. The idea may or may not be your own, but it will determine, to a large extent, the success of your business.

So it follows that finding a good idea, the right idea for you at this time and place, is paramount in your attempt to begin a solo business.

But how do you know whether you have a good business idea or not? How do you know that the product or service you will offer will be something that others will buy?

Maybe you trust your brother-in-law Harvey's opinion that "this business is going to revolutionize the future of every man, woman, and child living in the free world."

I started following Internet businesses back in the mid-90's and continue to be amazed at the variety and sheer number of creative business techniques and selling ideas that I've seen during that time.

Of all the trends, promotions, sales, and marketing ploys I witnessed, I am continually amazed at one particular selling strategy I've seen that has enormous power and sales potential yet very few marketers ever consider using it.

Here it is:

There should be a number of considerations that you look at before you set a pricing structure to your products.

But many entrepreneurs don't think much about an overall strategy. They believe they are limited in their ability to set prices beyond a certain range.

Let's say you decide to sell a DVD, for instance, that you produced yourself called "The Ups and Downs of Exploring the Grand Canyon on a Pogo Stick!"

If you play the "we guarantee the lowest prices" game, you will usually regret the decision. Of course, only you can be the judge as to your approach to pricing your products and competing in your niche markets.

But I will tell you that unless you are into razor thin margins and moving lots and lots of products, undercutting competitors is a chancy game - at best.

Here's why:

You've probably noticed over your lifetime that companies dealing in quality products and services tend to remain in business over a long period of time.

Others that prefer to push inferior products - and sometimes just good or average quality offerings - usually have a much shorter life cycle.

Why is it? Wouldn't you logically think that cheaper and more affordable items would outsell more expensive ones if they both performed the same basic functions?

I'm not suggesting anything like copying or plagiarizing someone's profitable business model and products to push them out of their own chosen niche.

Although this very practice happens all the time on the Internet with cloned or stolen and copied products and services, you should never consider such a blatant attempt to shortcut your way to success.

What I am suggesting is that you put on your thinking cap, get creative, and look at the solutions that successful businesses in other niches come up with to solve the problems they find in that niche.

What you end up doing with what I am about to tell you could have a great bearing on your ultimate future as a solo Internet business operator.

I can't over emphasize this point. I hope you pay close attention and get the message clearly.

Undertaking a solo business is like placing yourself in the pilot's seat of a commercial airliner. Your customer's pay to climb aboard and have you fly them to wherever it is you've advertised.

One of the things that most business owners look for are ways to add value to their businesses.

The usual thoughts are to add more products to the mix of things sold thereby increasing the profit potential. They reason, "More to sell = more sales!"

If you sell other people's products and if you have a source of additional offerings, this strategy may make sense for your business.

But what if you create your own products and can't readily add new offerings? What if you sell a single item and your business revolves around just that product?

Another book that I like to recommend to entrepreneurs and existing small business owners is The Wisdom of Crowds by James Surowiecki, a columnist for The New Yorker magazine.

It was published in May 2004 and has 320 pages. The subtitle is: "Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations."

That's quite a mouthful and suggests that there really is wisdom, influence, and, in particular, power in the thinking and opinions of the masses, either to the benefit or detriment of every society, organization, and economy in the world.

I believe it's a wise move to investigate all the options you have in executing your online business.

You may quickly dismiss many of these options for any number of reasons, but you might also find just that one perfect little advantage that sets your business apart from your competitors and propels you to success.

Drop-shipping could become your business "ace in the hole" so to speak, but there are many dangers in this industry so you need to be cautious and thorough in your research about the drop-shippers that you employ, their reputation for quality products and service, their fee structure, their policies, and your rights as the selling agent.

Have you ever noticed a shopping cart full of groceries sitting next to the checkout stand at the supermarket?

I've seen it happen a few times and usually figured that someone simply left their wallet or purse at home and would be back soon to claim their abandoned goods.

It's not a big problem since most stores are accommodating about the oversight.

But online, shopping cart abandonment is a huge problem! No one really knows the extent of this loss to e-tailers, but I have seen some estimates that suggest fifty percent or more of all online sales processes are never completed.

In the previous installment we discussed some of the costs associated with delivering physical products to your customers.

Be careful to study the numbers and understand exactly what it is costing your business on a weekly, monthly, and annual basis to send out your goods.

In most instances, it is best to charge your customers about what it costs you to handle and ship their purchase. The amount can vary a little from your exact cost so that you can standardize and simplify the shipping cost structure you present to your buyers.

Having to ship merchandise out to customers reminds me of the hassle of shaving every morning. It's a part of the daily routine, it's something to be tolerated but it's never enjoyed, and the longer you let it go, the more difficult the chore grows for the next day.

In my mind, having to ship merchandise, keep inventory on hand, box and package products, etc, is one of the reasons I feel strongly about solo operators focusing on information based business only. There is no shipping.

If you ship merchandise, you have to keep merchandise. All of a sudden you are in the warehousing and inventory business that presents all kinds of extra manpower costs, worries and hassles.

By now you understand that the solo information business strategy discourages dealing in physical products that require shipping and handling. These products require human intervention and a lot of financial costs that are the antithesis of the one-person solo Internet home business model.

Nevertheless, many of you will continue to do business in a physical delivery world because of the types of products you sell.

So I have a few suggestions about shipping products that will hopefully help you in your business to avoid the pitfalls and traps that some solo businesses have fallen into in the past.

Most small business owners look for additional sales in increased advertising and marketing.

But there are other strategies to explore and some unique methods of driving more sales in your business without turning up any additional customers.

One of those strategies involves up selling - offering additional products to the sales of your current buying pool. You're not having to locate new first time buyers . . . you're simply selling more to those who buy a product.

A joint venture is simply a partnership created to take advantage of non-competing products or services that are extended to the customers of the partner's business(es).

There are many different ways to set up a joint venture and a lot of variations to the theme, but this is basically how it is structured:

One business will make contact with a non-competing business owner to offer his services or products to the non-competing businesses customers and will offer that owner a portion of the profits of all sales (in return for the privilege of contacting his customer base).

I spoke with a young gentleman today about his dream to start a business. That's not a rare occurrence as I deal in such discussions quite a few times every week.

As we began talking, it was obvious to me that he was passionate about his idea and his plan to take that idea to market.

His reason for contacting me was to find out where he might begin looking for funding to finance his project. It was the next item on his "to do" list.

Entrepreneur is kind of a funny word. It's obviously of French origin. I've been hunting for years to find its English counterpart, but have not yet come up with a suitable substitute.

Maybe we don't need an English word for entrepreneur - it's used so commonly these days in the English language that most business-minded people, at least, have a pretty good understanding of the term.

My dictionary states the word "entrepreneur" comes from the Old French "entreprendre" which means, "to undertake." An entrepreneur is one who undertakes the creation, organization, operation, and risk of a business venture.

The premier search engine Google has come up with several programs that may be of interest to the solo small business owner. But there seems to be some matter of conflicting opinion about whether a web site owner should do anything to send his traffic away to someone else.

Here's the deal: Google allows web site owners to advertise products and services on their web site in exchange for a small referral fee each time a viewer clicks on one of the Google ads.

This is not an affiliate program since Google pays for each click rather than for a product that is actually purchased. In a sense, the web site owner is sharing in a PPC (pay per click) program. Google serves the ads and keeps track of the clicks. The web site owner puts Google's html code on his pages and provides relevant content for Google to match to its advertisers.

Anyone that has searched online for information type products, and even physical products in some cases, has been offered one or more "bonuses" along with the purchase of the main product.

The question you may be asking is this, "Does a bonus offer increase the sale of a particular product?"

You may think that bonuses should naturally increase sales; but that is not always the case.

In this day of increasingly complex e-commerce systems, it seems that there are many strategies that product sellers have at their disposal to increase product sales. The strategy of offering a bonus product is so common now that it may seem like a necessity to follow suit if you want to make sales.

One of the true challenges facing every Internet business is the process of turning prospects into paying customers.

Lots of people can be directed to a web site by various means and incentives - but getting those prospects to spend money with your business is a whole different proposition.

How do you optimize your conversion rate - turning lookers into buyers - that certain percentage of surfers that will actually give you a credit card number and deposit their money into your bank account?

We'll save the details and numbered lists of tactics and strategies for another day.

What I wanted to get across as your sole "take away" (bit of wisdom you can use in your business) from this discussion is:

What I am about to say may strike a chord of discontent among many of you . . . but that's okay.

It will bring to light a strategy that many of the Internet's most successful and profitable business persons have adopted on the road to increased business and nice incomes.

I will ask the question again, "Who gives out points for creativity and innovation?"

Most entrepreneurs and new small business owners feel that in order to be successful at Internet business, they must create or invent the next unique and valuable product - something different from all others in the same niche market. I beg to differ.

Now I am certainly not opposed to being creative or innovative, all of the other things being equal, it's a real blessing to have these personal characteristics manifest in your business. . . but . . .

Most often though, success is found in other ways. Here are some examples:

I like to quiz solo business owners about how they spend their time in a typical week.

That's about the right length of time (seven days) to measure both simple and complex tasks that the owner completes.

I find that most do very little active marketing. I believe that's a big mistake for a small business. But here's an even bigger one:

The tendency for most solo business owners is to focus on extending "reach," the breadth of the company's range of customers. They try to market to prospects that are new to the company.

I'm always amazed that entrepreneurs are so anxious to spend their money.

I think the traditions and practices of the past have spilled over into the Internet generation of entrepreneurs and clouded the view of some soon-to-be business owners.

They feel that the old business cliché "you have to spend money to make money" still holds true.

I want to challenge that notion and tell you that you can play that game if you want to, but I would strongly advise a different approach.

I want to suggest that you conserve as much cash as you possibly can as you begin your new small business. Look for ways to save money instead of focusing on all the possible things you could spend your money on.

It seems that when most folks think about starting a new business, they consider what product or service they might sell to the consumer.

Everyone is familiar with consumer goods and most of us relate to them because we use them in our everyday lives.

We see and hear about these products in TV ads, radio spots, in the newspaper, and on signs and billboards.

We naturally begin to think about the products we use and how we might be able to come up with a better version or maybe we think we can sell consumer goods in a more effective way than they are being offered to us.

It might pay for you to change your thinking slightly and begin to contemplate what you might have to offer other businesses.

There are some advantages to avoiding consumers and simply dealing with businesses in your niche.

You may not have this problem - I hope you don't. If you're super focused and well disciplined, you should be able to avoid digital dust.

I haven't. I fight the curse constantly and usually give in to my quest for that next great resource that's going to propel my business into the heavens.

Digital dust is what all those business tool software and information products turn into over time. It's pretty much worthless, and often turns into a total waste of your business budget.

I guess maybe I'm just a succor for a good sales pitch. I'm the kind of guy a smart product developer can sniff out in a crowded room. Maybe "gullible" is permanently stamped into my forehead.

If you were to hear this complaint (which by the way, I hear very often) what would you guess the business owner was really saying?

Was he saying that he had a great product, but his targeted customers were just too dumb to recognize it and hence they weren't buying?

Or was he lamenting the fact that he was not selling to the right customer niche market?

Or maybe he was charging too much for his awesome product and nobody wanted to buy at that price?

Or could it be that no one was hearing his sales message and seeing his ads and therefore he was not making sales?

Every business needs to identify something that sets it apart from all other businesses in the same niche.

This principle is called the USP or "unique selling proposition" by some, and others call it a variety of similar things. The principle is simple: you should attempt to capitalize on some characteristic or trait in your business that you can be known for -- some differentiating aspect that only you can claim.

It seems in almost every industry niche there is at least one business that desires to claim it has the lowest prices. It often brands itself with the slogan, "we will not be undersold."

To me, that is exactly the wrong message that a solo business ought to extend. My feeling is that solo businesses will almost always have difficulty trying to compete on the basis of product pricing.

A lot has been written over the past ten years about business owners as risk-takers, and the characteristics or qualities that they possess which allow them to be successful in what they do.

But very seldom does this skill show up on the lists that writers prepare extolling the virtues of the top entrepreneurs.

Yes, persistence, attention to detail, willingness to take a risk, and determination are all candidates for the usual list of "must have" qualities for the successful business man/woman.

But there is another ingredient that I have found to be most important - even crucial - to the success of the creator of small business.

I'll have to be careful with this post because some business owners will think I'm giving some very poor and bad advice about growing a solo business.

Nonetheless, I need to warn you of a temptation that appears before almost every new business owner that gains some traction and realizes some measure of success in his solo business.

Here's the temptation:

Marketing your solo business with coupons can be a very effective selling strategy if you incorporate some of the time-proven and tested principles that other marketers have learned about this special kind of advertising.

Coupons can the open the door to better customer relations, more back door sales, and greater communication with your valued customers.

Here are a few more tips that will help any small business owner make his coupon campaign a success regardless of the product or niche he's in:

Often entrepreneurs and small business owners have a difficult time trying to keep from being "stale" in their businesses.

By that, I mean they struggle to come up with fresh ideas, new and unique products, and creative solutions to the problems and wants of their market niche.

Many feel that they must continue to sell the same old things they've always sold, that they have no way of being able to offer brand new services or goods.

One of the most overlooked steps in web site publishing, product creation, and article writing is the "chore" of first doing market research.

It's a chore to most people and therefore it is often neglected or shunned altogether because performing the research takes time, a certain amount of "know how" and definitely some amount of your precious time.

But the consequences of not first doing research are almost always negative and will certainly cost you time and money in the long run.