What It Takes to Go Online

There are two resounding traits that help entrepreneurs overcome the challenges of starting a business and reaping the rewards of their labor. Just like opening a physical store, setting up shop online takes passion and demands a high level of optimism. The passion is the desire on the part of the entrepreneur to find something he or she loves to do and make a career out of it.

Positive thinking allows a person to stay focused in the face of cynicism from banks, peers and competitors. A “yes, I can” attitude quickly translates to “Wow, it’s working” as an online business opens its doors to the world.

Moving a business online doesn’t have to be an arduous process. To set up an online business, entrepreneurs should apply their passion and positive thinking to three key areas:

1. The planning process. Everything an entrepreneur needs to know, consider and decide before starting an e-commerce site.
2. Developing a marketing strategy. Determining how to get the word out and how to maintain good relationships with customers.
3. Understanding technology needs. The tricks and tools that make it all happen.

First and foremost, every small-business owner needs a well-thought plan. The internet is the best place to find information, learn from peers and effectively manage resources to formulate a plan that is perfect for a particular business and its owner.

The plan should look at every aspect of the proposed online business with a critical eye.

If you’ve never really done much advertising and relied mostly on networking and word-of-mouth, how can you figure out where to start?

The first thing you must do is calculate your minimum and maximum allowable ad budgets:

• Step 1: Take 10 percent and 12 percent of your projected annual gross sales and multiply each by the markup made on your average transaction. In this first step, it’s important to remember that we’re talking about gross markup here, not margin. Markup is gross profit above cost, expressed as a percentage of cost. Margin is gross profit expressed as a percentage of the selling price. Sell an item for $150 when it only costs you $100, and your markup is 50 percent.

  Your margin, however, is only 33.3 percent. This is because the same $50 gross profit represents 50 percent of your cost (markup,) but only 33.3 percent of the selling price (margin.) Most retail stores in America (carpet, jewelry and so on) operate on an average markup of approximately 100 percent, some operate on as little as 50 percent markup and others add as much as 200. More expensive items, such as cars, recreational vehicles and houses, typically carry a markup of only 10 to 15 percent.

• Step 2: Deduct your annual cost of occupancy (rent) from the adjusted 10 percent of sales number and the adjusted 12 percent number.
• Step 3: The remaining balances represent your minimum and maximum allowable ad budgets for the year. At this point in the calculation, you may learn that you’ve already spent your ad budget on expensive rent, or you might also learn that you should be doing a lot more advertising than you had previously suspected.

Now let’s calculate an ad budget. Assume that your business is projected to do $1 million in sales this year, you have a profit margin of 48 percent, and your rent is $36,000 per year. The first thing to do is calculate 10 percent of sales and 12 percent of sales ($100,000 and $120,000, respectively).

Second, we must convert your 48 percent profit margin into markup, because markup is what we’ve got to have to make this formula work. Most business owners know their margin by heart, but never their markup.

To make the conversion from margin to markup, simply divide gross profits by cost. Dividing $480,000 (gross profits) by $520,000 (hard cost) shows us that a 48 percent margin represents a markup of 92.3 percent. Bingo.

Now we multiply $100,000 times 92.3 percent to see that our adjusted low budget for total cost of exposure is $92,300. Likewise, we multiply $120,000 times 92.3 percent to get an adjusted high budget for total cost of exposure of $110,760.

From each of these two budgets, we must now deduct our $36,000 rent. This leaves us with a correctly calculated ad budget that ranges from $56,300 on the low side to a maximum of $74,760 on the high side.

Most advertising salespeople will tell you that “5 to 7 percent of gross sales” is the correct amount to budget for advertising, but don’t you believe it. It simply isn’t possible to designate a percentage of gross sales for advertising without taking into consideration the markup on your average sale and your rent.

Yes, expensive rent for a high-visibility location is often the best advertising your money can buy, since a business with a good sign in a high-visibility location will need to advertise significantly less than a similar business in an affordable location.

To prove this, just look at the example above and change the rent to $75,000 per year. In this case, the ad budget would range from $17,300 to $35,760, representing just 1.7 to 3.5 percent of sales.

The formula you’ve just learned is the only one that reconciles your ad budget with your rent as well as the profitability of your average sale. Use it!

When you only have a few employees and a few customers, it’s easy to stay on top of things. As you add more customers and and employees, it gets quite a bit harder. You actually create the potential for growth at the same time you’re creating the potential for disaster.

Creating a customer service policy and sticking to it can make it easier on you.

Take these steps to help you ensure that your clients receive excellent service every step of the way.

1. Put your customer service policy in writing. These principles should come from you, but every employee should know what the rules are and be ready to live up to them. This doesn’t have to be elaborate. In fact, keep it as simple as you possibly can.>
2. Establish support systems that give employees clear instructions for gaining and maintaining service superiority. These systems will help you outservice any competitor by giving more to customers and anticipating problems before they arise.
3. Develop a measurement of superb customer service. Don’t forget to reward employees who practice it consistently.
4. Be certain that your passion for customer service runs rampant throughout your company. Employees should see how good service relates to your profits and to their futures with the company.
5. Be genuinely committed to providing more customer service excellence than anyone else in your industry. This commitment must be so powerful that every one of your customers can sense it.
6. Share information with people on the front lines. Meet with your employees regularly to talk about improving service. Solicit ideas from employees-they are the ones who are dealing with customers most often.
7. Act on the knowledge that what customers value most are attention, dependability, promptness and competence. They love being treated as individuals and being referred to by name.

Phrases That’ll Make Your Customers Happy

Principles of customer service are all very well, but you need to put those principles into action with everything you do and say. There are certain “magic words” customers want to hear from you and your staff. Make sure all your employees understand the importance of these key phrases:

• “How can I help?” Customers want the opportunity to explain in detail what they want and need. Too often, business owners feel the desire or the obligation to guess what customers need rather than carefully listening first. By asking how you can help, you begin the dialogue on a positive note (you are “helping,” not “selling”). And by using an open-ended question, you invite discussion.
• “I can solve that problem.” Most customers, especially business-to-business customers, are looking to buy solutions. They appreciate direct answers in a language they can understand.
• “I don’t know, but I’ll find out.” When confronted with a truly difficult question that requires research on your part, admit that you don’t know the answer. Few things ruin your credibility faster than trying to answer a question when you are unsure of all the facts. Savvy buyers may test you with a question they know you can’t answer and then just sit quietly while you struggle to fake an intelligent reply. An honest answer enhances your integrity.
• “I will take responsibility.” Tell your customer you realize it’s your responsibility to ensure a satisfactory outcome to the transaction. Assure the customer you know what he or she expects and will deliver the product or service at the agreed-upon price. There will be no unexpected changes or expenses required to solve the problem.
• “I will keep you updated.” Even if your business is a cash-and-carry operation, it probably requires scheduling and coordinating numerous events. Assure your customers they will be advised of the status of these events. The longer your lead time, the more important this is. The vendors customers trust the most are those that keep them apprised of the situation, whether the news is good or bad.
• “I will deliver on time.” A due date that has been agreed upon is a promise that must be kept. “Close” doesn’t count.
• “Monday means Monday.” The first week in July means the first week in July, even though it contains a national holiday. Your clients are waiting to hear you say “I deliver on time.” The supplier who consistently does so is a rarity and will be remembered.
• “It’ll be just what you ordered.” It will not be “similar to,” and it will not be “better than” what was ordered. It will be exactly what was ordered. Even if you believe a substitute would be in the client’s best interests, that’s a topic for discussion, not something you decide on your own. Your customer may not know (or be at liberty to explain) all the ramifications of the purchase.
• “The job will be complete.” Assure the customer there will be no waiting for a final piece or a last document. Never say you are finished “except for….”
• “I appreciate your business.” This means more than a simple “Thanks for the order.” Genuine appreciation involves follow-up calls, offering to answer questions, making sure everything is performing satisfactorily, and ascertaining that the original problem has been solved.

Neglecting any of these steps conveys the impression that you were interested in the person only until the sale was made. This leaves the buyer feeling deceived and used, and creates ill will and negative advertising for your company. Sincerely proving you care about your customers leads to recommendations and repeat sales.

Never Let Your Customers Forget You

One important tool for generating repeat business is following up. Effective follow-up begins immediately after the sale when you call the customer to say “thank you” and find out if he or she is pleased with your product or service. Beyond this, there are several effective ways to follow up that ensure your business is always in the customer’s mind.

• Let customers know what you are doing for them. This can be in the form of a newsletter mailed to existing customers, or it can be more informal, such as a phone call. Whatever method you use, the key is to dramatically point out to customers the excellent service you are giving them. If you never mention all the things you are doing for them, customers may not notice.
• Write old customers personal, handwritten notes frequently. “I was just sitting at my desk and your name popped into my head. Are you still having a great time flying all over the country? Let me know if you need another set of luggage. I can stop by with our latest models any time.” Or if you run into an old customer at an event, follow up with a note: “It was great seeing you at the CDC Christmas party. I’ll call you early in the New Year to schedule a lunch.”
• Keep it personal. Voice mail and e-mail make it easy to communicate, but the personal touch is often lost. If you’re having trouble getting through to someone whose problem requires that personal touch, leave a voice-mail message that you want to talk to the person directly or will stop by his or her office at a designated time.
• Remember special occasions. Send regular customers birthday cards, anniversary cards, holiday cards…you name it. Gifts are excellent follow-up tools, too. You don’t have to spend a fortune to show you care; use your creativity to come up with interesting gift ideas that tie into your business, the customer’s business or his or her recent purchase.
• Pass on information. If you read an article, see a new book, or hear about an organization a customer might be interested in, drop a note or make a quick call to let them know.
• Consider follow-up calls as business development calls. When you talk to or visit old clients or customers, you’ll often find they have referrals to give you, which can lead to new business.

With all your existing customers can do for you, there’s simply no reason not to stay in regular contact with them. Use your imagination, and you’ll think of plenty of other ideas that can help you develop a lasting relationship.

Dealing With Unsatisfied Customers

Studies show that the vast majority of unsatisfied customers will never come right out and tell you they’re unsatisfied. They simply leave quietly, later telling everyone they know not to do business with you.

So when a customer complains, don’t think of it as a nuisance-think of it as a golden opportunity to change that customer’s mind and retain his or her business.

Even the best product or service receives complaints now and then. Here’s how to handle them for positive results:

• Let customers vent their feelings. Encourage them to get their frustrations out in the open.
• Never argue with a customer.
• Never tell a customer “You do not have a problem.” Those are fighting words.
• Share your point of view as politely as you can.
• Take responsibility for the problem. Don’t make excuses. If an employee was sick or a supplier let you down, that’s not the customer’s concern.
• Immediately take action to remedy the situation. Promising a solution and then delaying it only makes matters worse.
• Empower your front-line employees to be flexible in resolving complaints. Give employees some leeway in deciding when to bend the rules. If you don’t feel comfortable doing this, make sure they have you or another manager handle the situation.

Most business signs are invisible and utterly useless. They’re well-proportioned, carefully balanced, tastefully drawn and perfectly color-coordinated. In other words, utterly predictable and effectively invisible.

The five most common mistakes made in business-sign design are:

1. Attempting to be understated or elegant.
2. Attempting to “fit,” or blend into, the surrounding environment.
3. Underspending.
4. Including too much information.
5. Placing the sign too high. (The eyes of drivers tend to stay focused at windshield height. Low signs are better in town. Tall signs are better on freeways where they’ll be read–at windshield height–from great distances.)

Great signs are always the most interesting piece of scenery in their vicinity. This is why they’re noticed even when people aren’t looking for them.

Would you like to have such a sign? Believe it or not, it’s possible–not cheap or easy, but possible.

Consider the sprawling white letters stretched across a hillside in Southern California: HOLLYWOOD, a landmark known around the world. Did you know that sign was originally erected by a real-estate developer to identify his remote suburban subdivision, Hollywoodland?

Not all business signs will become famous landmarks, but it doesn’t hurt to keep these common denominators of business signs that do become landmarks in mind:

• They’re dramatic. This can be due to the fact that they’re:
  • Grossly oversized
  • Strangely placed
  • 3-dimensional
• They’re different. They contrast sharply with their surroundings due to:
  • Color. For example, snow-white Hollywood letters against a hillside of dark brown and green.
  • Installation. The famous Hollywood sign isn’t on a pole or a board. Its individual letters sit directly on the ground.
  • Context. There’s nothing immediately around it to distract from it. Or if there is something important nearby, it’s incorporated into the sign itself.
• There’s something “wrong” with it. Ever notice how the Hollywood letters aren’t level, but rise and fall with the terrain? This makes it far more memorable.

I doubt if the builder of the Hollywood sign did these brilliant things intentionally. But they worked, even if some of them were accidental. Do you have the courage and determination to repeat on purpose the things he did right by accident? If you do, the public will soon be using your sign as a reference point when giving directions.

Getting the media to notice can be tough. Reporters are inundated by the minute with breaking news from different sources, all clamoring for attention. One way to cut through the noise is to offer a different type of article–one that speaks to a topic that’s of interest to a target audience but isn’t dependent on being newsworthy right at the moment it’s sent. That type of article is called a feature.

A feature is an in-depth look at a topic, product or industry–it’s a complex story designed to be read at a leisurely pace. And a feature can benefit your company by linking your brand or product to a larger trend or industry focus while also showcasing you, the entrepreneur, as a thought-leader in your field.

While a news release is designed to entice the reporter into finding out more information themselves, a feature is designed to be used as is, or merely edited to fit the space available.

Topics such as health, home improvement, travel and technology all lend themselves well to features since they can be used in special sections of newspapers–such as lifestyle, home, arts or technology–or in the weekend magazines. Trade publications also publish feature articles, usually in the form of special supplements.

Because a feature should be written from a journalistic perspective, you should emphasize information over outright promotion. Ideally, a feature editor won,t change the story at all and will use it when it,s needed as part of a theme or to fill space.

Papers like to have quality articles on hand, so come up with your feature-worthy concept, then use the following guidelines to help you write a great article.

Headlines

The headline is the most vital part of your feature. Treat the headline as if it were a summary of the article. Ask yourself, Why is this story important? What about it will it grab readers’ interest? A good headline answers those questions by telling the reader something new, different or useful–in 20 words or less. A few examples I’ve seen recently include:

• Plug-In Devices Help Save Money on Your Utility Bill
• Reinventing the “Mommy Tack”: More Women Choose Business Ownership to Gain Control, Flexibility and Family Time
• The Sleep Expert’s Advice on Creating the Right Sleep Environment for Students

To come up with a good headline, pretend you’re telling a friend what the article’s about, explaining the most interesting aspects of your story. Keep the wording simple, and avoid superlatives and emotive language. Also, avoid using a brand or client name in the headline unless it’s very well known. Instead, focus on what’s most interesting about your topic.

Leads

A strong lead paragraph offers intrigue from the start. Editors don’t have time to read through the entire article to reach your key point, and neither do your readers. Think of the lead as an extended version of the headline, even using some of the same words.

When writing a lead, try to keep the paragraph short–two to three short sentences at the most. In total, your feature should be close to 400 words. Don’t worry about your brand at this point–just introduce the interesting aspects of the story. If your lead reads like an ad, it’ll be discarded immediately.

The Second Paragraph

The second paragraph serves to support and expand on the ideas set out in the lead. It’s also a good place to let people know who’s behind the feature so there’s no confusion about who provided the copy. Also, if the article has to be shortened due to space limitations, having the name of the company or spokesperson and your web address near the beginning will be vitally important.

If written well, the first two paragraphs can serve as a brief column item or filler if a newspaper or magazine has only limited space.

Using Quotes

A quote can lend authority to an article, introduce an expert and further advance the story. Most important, quotes can introduce personal feelings, comments and opinion, so this is where you want to use superlatives and emotive language (without sounding false!).

Be sure quotes are in a conversational style, and don’t merely cite facts or figures–no real person speaks only in data. Also avoid repeating information or using jargon; speak as if you were explaining your product or service to your grandmother.

Ideally, the person you quote should be someone who’d be available for interviews should a journalist want to ask additional questions. So he or she should be knowledgeable on the topic and open to working with the media. Use your strongest quote first, and be sure to provide information on the speaker and his or her relation to the company in a contact section at the end of your article.

Getting Into Detail

After the third paragraph, any information you add should develop the story further and hold the interest of the reader. Now’s the time to go into detail about the benefits of a product, or the mechanisms of how it works. However, for ease of reading, use bullet points or top tips if you’re listing information.

Another thing to remember–and one way a feature differs from a news release–is that a feature story will almost never include corporate identity or forward-looking statements.

When to Send a Feature

Generally, newspaper feature sections are planned at least three weeks in advance, so you’ll need to plan ahead. E-mail the features editor to determine their interest before you start writing–just a simple outline will do. If you’re trying to get into a trade publication, do your research and check the deadlines–they could be working as much as three months in advance.

Most news wires offer feature services and media databases, and they’ll often offer a feature calendar that corresponds with publications’ due dates. Consider distributing your feature via news wire and, if possible, choose one that has a list of when and where your feature could be placed and advises on crafting your feature for the different audiences.

Also, don’t forget your web audience. Search engines are used millions of times each day by people looking for how-to, where-to and when-to articles. Your news wire can help you reach these audiences by providing search engine optimization to help get your story placed highly in searches.

Images and Multimedia

A photo can often mean difference between your feature being chosen for publication vs. them choosing your competitor’s. A photo helps explain the story and can draw the eye of those scanning the page. It also gives editors more options when filling space.

Make sure your photos are high-quality: Always provide digital photos in high resolution (300 dpi) and, if possible, have them shot by a professional. A bad photo will reflect on the quality of your feature.

Other multimedia options include a video or audio version of your story, or additional expert quotes and interviews. A feature podcast or multimedia news release can include all these assets to transform your story into an online experience for your audience, complete with links and reference materials to let them experience more for themselves.

Finally

When sending your feature to reporters for editorial consideration, don’t be afraid to call them to offer more information; however, don’t call to check that the article has arrived. Reporters are busy and don’t like being called without good reason. And be patient–since your feature isn’t breaking news, the reporter may file it for use next week, next month or during the next holiday season.

Once your feature’s been accepted, look out for follow-up opportunities: Keep tabs on industry trends, or consider doing a “What happened a year later” story or a biography of someone quoted in the article. With luck, your feature could be the next topic of discussion around the water cooler.