Start Your Business Step by Step by Essential Business

An ESSENTIAL ENTERPRISE learning pack TM

Taking care of business

Start your

business

step by step Build your business the clever way by planning for success from the very beginning

The Essential EnterpriseTM series Essential Enterprise books and workbooks are designed for people who want to set up and run a business properly.

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This Start Your Business Step by Step learning pack is part of the Essential Enterprise series. It is a very practical training and qualification programme that has been carefully designed to take you, in clear and straightforward steps, through the sometimes challenging process of starting and running your own business. Every step in this pack has been read and road-tested by business advisers, accountants and people who have just started their own business. We asked them to be critical about every aspect of it, so that we could make it as useful and valuable to you as possible.

Like all Essential Enterprise products, Start Your Business Step by Step is firmly rooted in the day-to-day practice of the business world. It is built on solid business principles by people who have been there, have done it… and are still doing it. Now it’s your turn.

Our thanks to:

For the attention of our readers

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• Tony Robinson OBE, founder, co-owner & director, SFEDI Group • Simon James of Haines & Co, accountants • Paula Tomlinson of On The Spot Tax.

Start Your Business Step by Step offers business guidance and information, and not direct advice.

Written by Julie Stanford, MD, Essential Business, and Jane Priddis, owner of Plus One Consulting, and marketing consultant to Essential Business.

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Additional material by Ruth Lowbridge, Co-owner & Executive Chair, SFEDI Group, and Julia Chanteray, director, The Joy of Business. Designed by Julie Stanford, MD, Essential Business. Edited by Anna McGrail, director, Content Consultants.

Essential Business

SFEDI Group

42 Worcester Villas

Aycliffe Business Park

Hove BN3 5TB

County Durham DL5 6XP

T 01273 727282

T 0845 467 3218

E info@essential-business.co.uk

E info@sfedi.co.uk

W www.essential-business.co.uk

W www.sfedi.co.uk

If you want more detailed information and guidance, we recommend that you always take advice from professionals in the subject area.

Endorsed by the Institute of Enterprise & Entrepreneurs

ENDORSED

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise without the prior permission of the publisher. The publishers make no representation, express or implied, with regard to the accuracy of the information in this book. Whilst every care has been taken to ensure that the information is true and accurate, the publishers cannot accept responsibility for any omissions or inaccuracy appearing or the consequences thereof.

Price UK £125 RRP

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Contents Who is behind the Essential Enterprise series? Welcome

How to use this workbook

vi 1 3

First things first

Step 1

What makes a business successful?

Step 2

What do you want from your business?

Step 3

What is your business personality?

Step 4

What will your business values be?

Step 5

What is your vision for your business?

How will you communicate your vision?

Step 7

What skills do you need in your business?

Step 8

How will you know how youâ&#x20AC;&#x2122;re doing?

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Deciding what sort of business to start What are you going to do?

Step 2

How will you set up your business?

Step 3

Summarise your business idea

Step 4

Will it work?

Step 5

Get the critics in

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Step 1

Researching your market Step 1

Decide what to ask

Step 2

Plan your research

Step 3

Design a questionnaire

Step 4

Test your questionnaire

Step 5

Use your questionnaire

Step 6

Understand your results

Step 7

Fill the gaps

Step 8

Use your results

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

iii

Contents

Preparing your marketing plan 37

Step 1

What are you going to sell?

Step 2

Who are all the people you might sell to?

Step 3

Who are you really going to sell to?

Step 4

Decide your price

Step 5

Know your competition

Step 6

Explore the wider world

Step 7

SWOT

Step 8

SWOT your competitors

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Where are you now?

42 44 46 46

Planning for action

Where do you want to go? Step 1

Revisit your business purpose

Step 2

Create your image

Step 3

Decide what sales to aim for

Step 1

Prepare your printed materials

Step 2

Draw up a communication plan

Step 3

Get public relations (PR) working for you

Step 4

Make events happen

Step 5

Network

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How will you get there?

Step 6

Think e-market: websites, internet, email

Step 7

Adverte your wares

Step 8

Consider direct marketing

Step 9

Build your social personality

Step 10

Monitor the results

Thinking about the money Step 1

Work out the costs of starting up

Step 2

Work out your personal survival budget

Step 3

Decide how to fund your business

Step 4

Work out what you want to earn

Step 5

Work out your turnover

Step 6

Work out your expenses

Step 7

Work out your profit

Step 8

Work out how not to run out of money

Step 9

Make it easy for people to pay you

Step 10

Keep track of everything

Step 11

Pay the right amount of tax

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

Contents

Keeping the money flowing Decide which sales methods to use

Step 2

Match your product or service to your customer

Step 3

Present your business to potential customers

Step 4

Make the deal

Step 5

Keep your customers happy

103

Step 6

Maintain good business relationships

104

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Step 1

The practical day-to-day

Tell the people who need to know

107

Step 2

Decide where you will work

108

Step 3

Put insurances in place

108

Step 4

Find the right advice

111

Step 5

Crack the IT

111

Step 6

Be a good employer

112

Step 7

Comply with the Disability Discrimination Act

112

Step 8

Comply with the Data Protection Act

112

Step 9

Protect your consumers

113

Step 10

Protect your intellectual property

113

Step 11

Be aware of what else affects your business

114

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Step 1

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Staying ahead of the game Step 1

Keeping up to date with any changes

115

Your business plan

117

Finallyâ&#x20AC;Ś

119

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

WHO IS BEHIND THE ESSENTIAL ENTERPRISETM SERIES?

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The Essential Enterprise series has been written and designed by SFEDI Group and Essential Business. We’re a team of small business owners and experienced business mentors with many years’ knowledge and insight into what it’s like to build and grow a business.

About SFEDI Group

SFEDI is the government-recognised UK Standards Setting Body for Business Support and Business Enterprise. Run by entrepreneurs for entrepreneurs, SFEDI researches leading practice, and sets standards, principles and guidelines. We make sure that self-employment is promoted as a positive choice for a career.

We actively seek to increase the survival rate of new businesses.

We make sure that the quality of support to small businesses is of a consistently high standard.

We design our services to give the right help at the right time so that small businesses can grow.

We set national standards for small businesses, on which these workbooks are based.

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Our team includes and works with entrepreneurs and owners of real small businesses to sort out real problems. These partnerships enhance the quality and quantity of start-up support we provide, and help established businesses grow. This allows us to give bestpractice products and services to those who support small businesses, such as further and higher education institutions, government or government-funded bodies, and small business support organisations.

About Essential Business

Essential Business provides plain English, straightforward content for people starting and running their own businesses. For over six years, our interactive workbooks, Before You Begin and Start Your Business Step by Step and our award-winning Essential Business Guide, now in its third edition, have helped thousands of entrepreneurs across the UK to start and run their own profitable businesses.

Business is a journey that engages pretty much every human emotion and tests every aspect of your character — from your ability to recall long-forgotten maths lessons to your negotiation skills and your sense of humour (we even add some of our own in case, like most of us in business, you lose it from time to time). We are a small business with years of experience of putting into practice everything you will read on these pages. We know how it feels… and we’re with you every step of the way.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

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Welcome

Welcome to the Start Your Business Step by Step pack.

At Essential Business and SFEDI Group, we know what it feels like to start and run your own small business. We have been doing it ourselves for many years. (And we still are doing it.)

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Our aim with this pack is to help you avoid the trap of rushing into a business idea without thinking about it first. It is easy to get caught up in the excitement of being your own boss, of making lots of money, and of working the hours you choose…

But the business world can be unforgiving. Customers are fickle and it can be surprisingly difficult to get them to part with their money! Which is why successful business people spend time thinking and researching first. Do this before you invest your time and money into your business idea.

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We’re passionate about business. We also know that with careful thought, research and planning, your business is more likely to be an exciting, profitable and rewarding venture. Getting it right from the start can make the difference between wonderful success and disappointing (and expensive) failure. Let us help you get it right first time. We wish you the very best of luck with your business.

Julie Stanford Managing Director

Ruth Lowbridge Executive Chair

Essential Business

SFEDI Group

Essential Enterprise Partners

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

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How to use this workbook This Start Your Business Step by Step pack is designed to help you achieve two things:

to set up your business in the way that’s right for you

to put together a practical plan so you know exactly what you’re going to do and how you’re going to do it.

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By following our workbook, each step will help you to record your ideas, add your research results, and capture your thoughts and findings on the record sheets we’ve provided. The pack will help you build your own unique business action plan.

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Why do I need to plan? There are many good reasons for writing a plan before you start a business. Probably the main one is to prove to yourself beyond reasonable doubt that you have an idea that can be turned into a profitable business. Here are just a few other (well-researched) reasons: l

Businesses that have a plan have a better chance of survival than businesses that do not.

Businesses that have a plan are, on average, more profitable than businesses that do not.

Good planning reduces the risk in many of your business decisions.

Good planning means you are less likely to waste time and money chasing the wrong customers with products or services they do not need.

Some of the record sheets may seem very thorough. We haven’t given them to you just to provide you with more work. It’s because we know that it’s necessary if you are going to be successful in your business. We don’t want you to be one of those start-ups to whom the term

‘Fail to plan and plan to fail’ applies!

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

How to use this workbook

How long will it take?

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There is no set timescale for completing the workbook. However, we recommend that you do not try to complete it all at once. In any case, you will need to take breaks from filling in the sheets in order to go and find the information to include in them. If you are completing the workbook alongside an adviser or mentor (which, for most people, is probably better than completing it alone), then your adviser or mentor may go through a section of the workbook with you, then let you complete the next section before discussing that with you, and so on.

If you are not working with an adviser or mentor, try to discuss your work with people who know you well, and with people you can trust to give you their honest views. Avoid asking people who might simply tell you what they think you want to hear.

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Do I have to complete it all?

No. You are free to leave out any sections that are not relevant to you. This is most likely to happen when you reach the ‘practical day-to-day’ section. For example, if you are not employing people, that information will not yet be relevant to you. However, it may be useful later on.

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If you decide to leave out any sections, make sure it’s because they really aren’t relevant to you, not just because they are about subjects that do not interest you, or because they are difficult, or because you feel you cannot understand them. Completing those sections may help you understand the subject better, and they may not be as irrelevant to your business or as difficult as you first think.

Can I get someone else to do some of it?

Of course. And you can always ask for some help. If you are really struggling with one section of the workbook, it may be better to consult an expert, whether this is your business adviser/mentor, an accountant, a solicitor, or someone you trust who is already running a business. It is best if you complete as much of it yourself as you can, though. Remember, this is your business.

You may also be able to find information from outside sources to help you complete certain sections. Organisations such as your local enterprise agency or chamber of commerce are an excellent source of information. If you are completing your workbook with a copy of The Essential Business Guide next to you (see page 8), you will find a whole host of valuable resources listed in that book.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

How to use this workbook

Getting the most out of Start Your Business Step by Step

1 Learn:

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This learning pack contains three main elements:

THE WORKBOOK

Your workbook comprises all the material up to page 119. It explains, step by step, everything you need to know in order to complete the record sheets in the back of the ring-binder. As you go through the sections, fill in the record sheets. You’ll notice that there are a number of symbols used throughout the workbook.

What do these symbols mean?

As you move through these pages, you may wonder why we are asking you to do so much work!

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Why do this??

The ‘Why do this??’ symbol appears where we (or others ‘in the business’ of small business) explain the thinking behind what we are asking you to do.

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WE LIKE…

Focus on you

We tell you about books, websites and magazines that have impressed us and that we are happy to recommend.

Note This workbook gives you pointers towards organisations you might find useful, but we cannot guarantee the level of service you will receive from them.

Businesses are started by people. Even business investors say that they invest in the person as much as in the idea. At intervals throughout the workbook we ask you to stop for a moment and ponder the effect of your business on you, yourself — and on the people you care about. Without their support, it could be a lonely enterprise.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

How to use this workbook

2 Act:

THE RECORD SHEETS

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The record sheets in the binder are designed to collect your thoughts, your research results and your ideas for the future of your business. They are designed to be easy to use and straightforward. Your completed record sheets will build into a professional-looking plan that will not only help you run your business well, but will also make you proud of it from the start.

WE LIKE…

WinWeb

www.winweb.com

You will find extra copies of all the record sheets on our website at: www.essential-business.co.uk/step-by-step. There are two types of record sheet available on the website:

PDFs — you can download the pdfs and print them as many times as you want (you will need Adobe Acrobat Reader® to open them). You can type directly into the pdf sheets and save your work.

Spreadsheets — some of the record sheets, such as the cash flow forecast, are available as interactive spreadsheets, with automatic calculations built into them. If you own, or have access to, Microsoft Excel®, you may find it easier to use these sheets, instead of having to do all the calculations again each time you change the numbers.

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WinWeb offers an affordable business planning application as part of its online suite of small business software. You can use the tool on its own, or combine it with other very useful small business applications and services. Definitely worth a look.

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You are welcome to download all the sheets for printing, and you may use any of them as frequently as you wish. This gives you the chance to be creative whilst using your record sheets and gives you the opportunity to make alterations if you change any parts of your plan as you go along. It doesn’t matter if the record sheets end up looking a bit messy, packed with your ideas and thoughts — you can always rewrite or type them once you are clear about your ideas at the end. Be creative! Get thinking and writing.

How should I use the pack? There are a number of different ways you can use your pack: l

Use it simply to learn about the important decisions you need to make during the process of starting your business.

Use it to take you step by step through that process.

Use it to keep a record of all the preparation and research you do.

Use it to convince the right people that you are serious about your business, and worth considering for a bank account, grant or loan.

If you want to turn this pack into a more formal business plan, you could combine it with one of the business-planning software packages we offer at a special discounted price.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

How to use this workbook

3 Reflect:

‘TIME TO REFLECT’ and ACTION PLAN

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As you start and grow your new business, it can be all too easy to lose sight of the effect on you as a person, rather than you as the owner of the new business. The Time to reflect panel at the end of each section is designed to remind you to take time away from your business planning now and again. This is so that you can reflect on what you’ve achieved so far and what you have learned. In this way, you can make sure that you understand the sections you have completed, and, if not, whether you might need to seek outside help, support or training. Time to reflect is also designed to keep you focused on the specific actions you need to carry out to build your business and to become a skilled and capable business owner.

Reflection leads to action

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Many people who start their own business do not prepare themselves properly for their new role and their new responsibilities. By stopping now and again as you progress through this workbook, to give yourself Time to reflect, and to focus on the actions you need to take to move forward, you will be much more likely to succeed in your business — and enjoy the process. After all, a business is unlikely to thrive if its owner is stressed, worried, lacking skills, or simply overwhelmed by the whole process. Action planning does not only apply to the business, it applies to you, too.

Learn, act, reflect — then act again. By adding items to your action plan (Sheet 50), and committing to them on paper, you are far more likely to carry out those actions. Remember, only action is action!

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

A word about The Essential Business Guide

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The Essential Business Guide is a reference book packed with information. You may find it simpler to complete your plan if you have a copy of the Guide as a reference to help you as you work your way through all the record sheets. It is full of information on a whole host of subjects, far more than could be included in this workbook.

The reason The Essential Business Guide will make your task easier is that you will be able to refer to it to find out more information on each subject. You will also have access to the many additional resources (websites, books, organisations) that are listed in the Guide. These can provide you with more in-depth information to help you complete your plan.

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Although we have been able to reproduce some of the key information from the Guide in this pack, there just isnâ&#x20AC;&#x2122;t enough space to include all of it.

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

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Researching your market You now have your business idea.

But how do you know whether enough people are likely to buy your product or service?

And would they prefer it in the deluxe or the basic version? How much after-sales service would they like? And how much do they expect to pay?

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The answers to questions like these can mean the difference between success and failure for your business. Possibly the most important part of the whole workbook, this section helps you to work out whether there is a market for what you are thinking of selling. The simplest answer is: ‘Ask people.’ But who, what and how to ask?

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So here we give you some ideas for the sort of questions you will need to answer, and the best ways to find those answers. We also help you to understand the meaning of your research results, encourage you to find out where there are still gaps in your information, and guide you towards building your research into a really useful information bank over time. A note of caution here: don’t just ask your friends and family, as they are likely to give answers simply to please you. Ask a wide range of the type of people you expect to be your customers.

Why do this??

If you ask the wrong questions, the answers could send you off in completely the wrong direction.

Step 1

Decide what to ask

What exactly do you need to know before you risk starting your business?

Sometimes people put together questions that are too vague, then they don’t get specific enough answers for the decisions they need to make. Make sure each of your questions gives you as much information as possible.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Researching your market

For example, if you want to set up a small delicatessen, you would need to know the answers to the following questions: What types of people buy what I want to sell? (How old? In what kind of jobs? With or without children? And so on.) Go into as much detail as possible â&#x20AC;&#x201D; it will help you understand your potential customers as real people.

How many of those types of people will pass my shop or would be willing to travel there?

How often will they come in?

What will they spend each time?

What types of products do they buy now?

How often do they buy each type?

What do they expect to pay for each of them?

Where are they buying now?

What do they like and dislike about where they buy now?

What would it take to make them come to me instead?

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Now think of 10 (or more) of your own key questions, those that could make the difference between success and failure for your business. Write them on Sheet 6 > Key marketing research questions.

Step 2

Plan your research

For each of your questions, think about the best way to find the answer.

Using the shop example again, if you want to know what types of people buy what you are thinking of selling, you could stand outside a shop that sells similar goods. Watch who goes in, and who comes out with a carrier bag, and take notes.

Let us say that you notice that almost half of the buyers are women aged about 35 to 55, mostly shopping alone, and a quarter are business men and women aged 25 to 35, buying sandwiches and drinks for lunch. The remaining quarter consists of a mix of young mothers with pushchairs, retired people, and a few secondary school children on their way back from school.

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

Researching your market

Why do this??

This type of research is called observation. It’s often quite basic, but it can be very useful. Even better, it’s usually free.

It’s free… and it might save you a lot of extra work later.

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For example, you could then stand outside the shop you plan to rent, on several different days and at different times, and make a note of the number of people walking past who fit the main categories you saw shopping at the existing deli.

If you were to look on the Internet, you might also be able to find a website that tells you how many people fitting your main categories live within reach of your shop (but remember, you would also need to find out how far people were prepared to travel). Otherwise, your local library might be able to help with some information.

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It is often best to start by searching for information that already exists, but be careful that it is up to date, and that it has asked the right questions. This type of research is called secondary research, and it is often free, too. Government and local authority statistics can give you a lot of this type of information, especially about the population. See how much secondary research you can find to answer some of your key questions, and record the main points on Sheet 7 > Secondary

research results.

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For example, if the idea you have is new and original, you may decide that you need to protect it from copying, and you will need to explore the different ways of doing this. Patents, trademarks and copyright are all covered by laws, and you will need to look into these as part of your secondary research.

Remember to make a note of where you found your secondary information, in case you want to refer to it again. If you can, take copies of the most important pieces of secondary research you find, and file them with Sheet 7.

Now think about how to fill the gaps in your information. Standing outside the shop you plan to rent may have told you that a certain number of the right sort of people pass the door, but it will not tell you: l

whether they would go in

whether they would travel from somewhere else to go in

how far they would travel

whether they would buy enough, often enough

whether they will come to your shop instead of the one they visit now.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Researching your market

Step 3

Design a questionnaire

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To find this out, you will need to ask some of them, and there is a fair chance you’ll have some other questions you want to ask them, too. Research that you create yourself is called primary research, and it needn’t cost you anything except some time.

Questionnaires are a good way to get large numbers of answers to simple questions.

WE LIKE…

Survey Monkey

In our shop example, you could stand in the street outside the shop you plan to rent and ask people questions like those in our sample questionnaire on page 31.

Now using Sheet 8 > Primary research questionnaire, design a questionnaire with about 6—10 simple questions that will give you some of the information you need.

Test your questionnaire

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Step 4

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Print out 10—15 copies if you used the sheet on our website at www.essential-business.co.uk/step-by-step or photocopy them if you handwrote your own.

If people can misunderstand a question, they will. Even the professionals test their questionnaires. Try out your questionnaire on about ten people, to see whether it works.

www.surveymonkey.com

This great website makes it possible for anybody to create professional online surveys quickly and easily. The basic subscription is free; the professional subscription costs US $19.95 (about £12–13) a month.

Why do this?? Badly designed questionnaires give confusing or wrong results.

Did they all understand it easily? Did it give you the answers you needed?

In the deli example, you might find that people do not know how much they spend on deli foods, because they buy such a wide range of foods.

If there is a question that doesn’t work, you could either rephrase it or drop it altogether and perhaps put in another one. Make changes to your questionnaire if you need to, and make plenty of copies. Next, get out there with a smile and a clipboard!

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Researching your market

DELICATESSEN — Sample Questionnaire How old are you?

l Dry pasta, sauces

l Under 20

l Snacks and crisps

l 21—30

l Sweet pies and pastries l Slices of cake

l 31—40

l Biscuits

l 41—50

l Other (please specify)

l 51—60 l 61—70 l Over 70

How many people are there in your household?

Children Age of children

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Where do you live?

l Within walking distance of here

l One to five miles away

l Every one or two months

l More than 10 miles away

l Every three to six months l Every six to 12 months

l Every day

l Never

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How often do you come into Anytown centre?

l Two to six days a week l Once a week

l Less than once a year

What occasions do you buy deli foods for? (You may tick as many as you like)

l Once every two weeks

l Everyday eating

l Once a month

l Weekday lunch at work

l Less than once a month

l Weekend treat

l Hardly ever

How often do you buy food from a delicatessen?

l More than once a month

l Six to 10 miles away

Where do you buy delicatessen foods?

Please list, with the place(s) you use most first in the list

Adults

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l For visitors

What deli foods do you buy most often?

l For special occasions

(Please number 1 for most often to 5 for least often, and cross out any you never buy)

l Other (please specify)

l Cheeses l Cooked meats l Pate l Houmous & dips

l Pickles & olives

Approximately how much do you spend each time you buy deli foods?

l Prepared salads

£______________

l Ethnic foods (samosas, etc) l Pies and quiches

Thank you for your time

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Researching your market

Step 5

Focus on you

Use your questionnaire

But the lessons you will learn about the way people think will be invaluable to you as a business owner.

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If you are standing in the street with a clipboard, lots of people will avoid you. If you are doing a telephone survey, you’ll probably get even more rejections. Questionnaires by post get even fewer responses. Don’t be put off. Smile and keep going until you have the number of responses you need. It may help to tell people at the start that you are not trying to sell them anything, just gathering information.

We’re not saying this is easy. You may well feel a bit of a fool standing in the street clutching a clipboard…

For our shop example, the number of responses might be about 100, or maybe 200, or enough for the answers to reveal a pattern. If your first group of questionnaires does not tell you with enough certainty that your business idea will work, try a second batch, and so on until you have a clear picture.

You’re going to have to get used to talking to strangers at some point, so why not start now?

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Store your completed questionnaires in a safe place until you are ready to analyse them. There may be enough of a pattern from your first batch of questionnaires that you can conduct your second batch before analysing the first batch in detail. Otherwise, analyse the first batch carefully using the instructions below before deciding what research to do next.

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For your second batch, you may want to narrow down the range of questions or the types of people you ask. For example, you may want to ask only people who appear to be similar to the groups you have identified as possible customers, or perhaps ask fewer questions if you are already sure about some of the answers. It is hard work, but well worth the effort if it saves you from making big and expensive mistakes from the start (like taking on the wrong shop premises, selling the wrong products, or aiming them at the wrong customers).

Step 6

Understand your results

Add up all your answers and work out what they tell you. If you have a spreadsheet program such as Microsoft Excel, you can turn your results into charts and graphs to help you spot patterns or trends.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Researching your market

In our shop example, the results for 100 people who answered question 1 might be:

How old are you?

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Under 20 . . . . . . . . . . . . . . . . . . 8 21—30. . . . . . . . . . . . . . . . . . . . . 10 31—40 . . . . . . . . . . . . . . . . . . . . 14

41—50 . . . . . . . . . . . . . . . . . . . . 26 51—60 . . . . . . . . . . . . . . . . . . . . 22

61—70 . . . . . . . . . . . . . . . . . . . . . 15 Over 70 . . . . . . . . . . . . . . . . . . . 5

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These results would tell you that quite a lot of the people questioned are in the target age group, and in the age groups on either side. This would be an encouraging result! Once you have added up the results of your questionnaires, write down the patterns you find in the results. What do they tell you?

Why do this??

Fill the gaps

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Questionnaires can’t easily tell you much about how people feel.

Step 7

You might find that you still have questions that a simple questionnaire can’t answer. Questions that are more complicated, or that ask about people’s feelings, need a different approach. For these, you might find a few people in your ideal customer group and interview them, or invite a group of them to have a discussion, with you guiding them.

You may be able to persuade a small number of the people who answered your questionnaire to give you some extra time, so you can ask them more detailed questions over tea and biscuits (or something stronger!). Or you might have friends or relations who are in the same age group or type you are hoping to reach, and who would be willing to have a discussion. Be careful, though, if you decide to ask people you know well: they may say what they think you want to hear, when what you really need is an honest answer. For both interviews and discussions, you will need to guide your interviewee or group, to make sure they keep on the subject you want them to discuss.

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Researching your market

In the shop example, you might use interviews or discussions to answer questions like: 1 What makes you think of visiting a delicatessen?

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2 What types of deli foods do you choose, and for what occasions? 3 What three things do you like most about the shop you use at the moment? 4 What three things do you like least about the shop you use at the moment? 5 What extra deli foods would you like a new shop to offer? 6 What else would you like a new shop to offer?

7 How much would you expect to spend on a visit to a shop that offered all these things? (See page 42 for more information about pricing, which may help you to ask the right questions in your research.)

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The answers to these questions will be more difficult to analyse, but you might still find patterns, and the information you collect should be very useful in getting the details right when you are deciding what to sell.

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Using Sheet 9 > Interview or discussion questions, design some interview or discussion questions to fill the gaps in your information. Then conduct some interviews or a few discussions. Keep your interviewee or group as relaxed as possible, whilst still keeping their attention on the subject you want to discuss. Use a tape recorder (if they give their permission) or write down as much as you can of what they say. Once you have collected all the answers, try to put them into groups to make it easier to use the results.

In the shop example, if you interviewed 10 people, you might find that three of them only bought vegetarian products, three of them only bought cheese and ham, and four of them bought a variety of foods.

It could be that the people with children who bought a variety of deli foods spent much more, and bought foods throughout the year, whereas single people, couples and vegetarians spent much less, and bought expensive items only very occasionally. Continued >>

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Researching your market

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Continued >> This could affect the amount of space you give to each type of product, and the type of stock you order. It could also help you decide where to deliver leaflets (family homes near secondary schools, for example), where to advertise, and so on.

Add the results of your interviews alongside Sheet 9 in the binder.

Step 8

Why do this?? Your research will build into a valuable information bank and save you time in the future.

Use your results

Once you have collected all the information you need and organised it in the most usable way, the next thing you need to do is — use it! It will go out of date quite quickly, so the sooner you can use it to make decisions, the better. How much research, and when?

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Marketing research isn’t something you just do once. Some things, such as how satisfied your customers are with your products and services, need checking again and again. Other things, such as what people think about a new product idea, will only need to be done at a particular time.

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Having completed this section, you should have collected a lot of useful information, which will help you to do things for the right reasons in the rest of your plan. Keep adding to your information, and it will become more and more useful as time goes on. Well done for getting this far…

Time to reflect

Time to reflect once more. Think about what you’ve learned in this section. Have you understood it, or do you need to revisit any part of it? Go back once more to Sheet 1 > You as a business owner: As you read through your list of skills again, is there anything you need to change? There are probably quite a lot of things still to do after completing this section. If so, add them now to Sheet 50 > Action plan.

Remember, there are two parts to action: writing it, and doing it. Only the doing part will start your business. The rest is dreaming.

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What about the money? You might think it strange that we’ve put marketing before money, but actually it makes a lot of sense. How can you make decisions about how much money you need

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Preparing your marketing plan This section helps you to use all the information you have gathered to build a marketing plan, outlining what you will sell, and to whom, in each of the next five years. The plan will give you a solid base for everything you do, and will help you to focus your attention and your limited marketing budget in the right places.

Your marketing plan is all about the customers you choose to reach, and the products or services you plan to sell to them. It should answer three questions:

and how to spend it, you are going to do, for whom, and how? Your marketing plan is all about these decisions.

Where are you now?

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before deciding what

Where do you want to go?

How will you get there?

We will look at these questions in turn.

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Where are you now?

You wouldn’t set off on a journey without knowing where you were starting from, would you? This stage of the plan looks at your starting point, and it forms the foundation or base for the rest of your planning. The stronger your foundations, the less likely it is that your business will topple over. This stage is sometimes called the marketing audit, and it deserves a lot of your time and attention.

Why do this?? If you try to sell to everybody, then you could end up selling to nobody.

Step 1

What are you going to sell?

The smaller your business, the more you need to ‘specialise and concentrate’. That means concentrating your limited time and money on becoming known by the people who will appreciate your strengths the most, and see you as the expert in something they really need. Take a moment to look at the example of a start-up photographer who consults a marketing expert, on the next page.

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Preparing your marketing plan

EXAMPLE

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Choosing the right customers, products and services

When you set up a business, and from time to time when you are running it, you need to ask yourself some serious questions. As an example, a start-up photographer consults a business expert…

Expert: ‘Describe your ”total accessible market” — all those who, in theory, you could supply with your product or service.’

The photographer is in danger of taking a ‘scattergun’ approach to his business, trying to supply too many different customer types with too many products.

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Photographer: ‘I’ve already decided to work within 30 miles or so of my studio, but everybody needs photography. I could supply individuals, couples, families, schools, businesses… I’ll probably deal with lots of different

The expert’s comments:

The smaller your business, the more you need to specialise and concentrate. Focus all your resources on the customers whose needs you are best able to meet, with products or services that you are best at producing.

For example, if our photographer is good at working with people, and especially children, he could specialise in weddings and portraits, with perhaps some school photography to provide some regular work.

It is important to think about the things you are not going to do, as well as the things you are.

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types of customer.’

Expert: ‘All right, what could you supply them with?’ Photographer: ‘All types of photography: passport photos, portraits of people and their pets, wedding albums, school photos, landscapes, product photography for businesses, you name it... I think I’ll do a bit of everything, just for variety.’

Essential tip You may be better off becoming known as a specialist in a narrower field, rather than spreading your limited resources too thinly.

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Preparing your marketing plan

Before you decide exactly what type and combination of products and services to sell, and to whom, it pays to think about what makes you different from anyone else offering your type of product or service.

Remember to involve others when you do this, as it is other people’s opinions, not yours, that matter here. People who know you well might appreciate different qualities in you than you think they do.

As a starting point, try answering the following questions: l

What are the five qualities people most often appreciate in you, or tell you that you are good at? (For example: good at listening, understand/like people, quick with figures, creative writer, artistic, energetic, and so on.)

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Focus on you

Write these on Sheet 10 > My personal strengths. l

Now think about how the personal strengths you have listed could be used in your business.

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For example, if you were thinking of setting up a photography business, and your main strengths were creativity and artistic talent, you might want to specialise in landscapes and still-life shots. If your main strengths were to do with people, perhaps weddings and portraits would work better for you.

Of course, you should also think about the things you most enjoy doing.

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Add notes about this on Sheet 10.

Step 2

Who are all the people you might sell to?

Before you go any further than a general description of the type of product or service you might offer, it is very important that you think about who needs what you plan to offer.

Why do this??

If you don’t, you might miss groups who could be your best customers.

Start by thinking of everybody who could possibly need your product

or service. You may want to put some practical limits on this, such as the distance you are prepared to travel.

For example, if you have trained as a fitness instructor, and want to set up as a personal trainer, you might decide that your total possible customer group is everyone with a weight or fitness problem who lives within 15 miles of your home.

Once you have thought about your total possible customer group, add the information to the first part of Sheet 11 > Total and target customer groups.

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Preparing your marketing plan

Step 3

Who are you really going to sell to?

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The information about your total accessible market is usually too general to be useful, so the next step is to break this total group down into smaller groups.

For example, for our personal trainer, this might be: l

people with a serious weight problem (perhaps advised by their doctors to take exercise)

people with a moderate weight problem or who are just unsatisfied with their weight

people who take no exercise at the moment (and who are perhaps starting on medical advice after a health problem)

people who take some/a lot of exercise at the moment.

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If our personal trainer originally started out as a hospital physiotherapist, he/she might choose to specialise in helping people who have been advised by their doctors to take exercise, either to lose weight or to recover from a health problem such as a heart attack.

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If our personal trainer was a keen athlete before starting his/her new business, he/she might choose to concentrate on people who are already fit, and want to get even fitter.

Think about the customers you might choose to target.

Your groups might be divided by personal characteristics such as age, gender, type of job, and so on, or by the area where they live, the type of house they own, or their lifestyle. Find groupings that make sense for the type of product or service that you plan to offer. The examples on the opposite page may help. Make a note of your target customer groups on Sheet 11. Once you have done this, create a more detailed description of each of your possible target customers, and add it to Sheet 11, after your groups.

The more you can see each potential customer as a real person, the easier it is to design products and services that match exactly what they need, and to make them feel that you are talking to them personally when they receive any advertising message such as a leaflet or mailing from you.

Why do this?? Different groups of people will appreciate different parts of what you offer. By sorting people into groups in this way, you can make sure that you emphasise to each group the part they most need to hear about.

Focus on you Think about the people you most like buying from. It is usually because you feel that they understand what you need, then provide it.

We cover the practicalities of selling in Keeping the money flowing, starting on page 91.

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Preparing your marketing plan

reluctant exercisers, but want to improve health

need a lot of advice and support

People who have a serious weight problem

willing to pay to improve health

age 25—55

male or female

warned by doctor to lose weight and take exercise

dislike or feel unable to do exercise are embarrassed by exercising in public or with others need a lot of advice and support

are not highly motivated.

People who have a moderate weight problem or are just unsatisfied with their weight age 25—55

female

have tried and failed on diets

do not know how to start exercising

want advice on losing weight through exercise

want to pay for it (feels it will make them stick to regime)

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People who take no exercise at the moment (perhaps starting on medical advice after a health problem):

age 25—55

male or female

motivated more by fear than enjoyment of exercise.

People who take some/a lot of exercise at the moment:

age 25—45

male or female

married, with school-age children

work part time or not at all

have disposable income

want to improve body shape, take part in competitive sport, or both

already like exercise, highly motivated

expect trainer to have good technical knowledge

expect to pay for it (feels they will get better quality training).

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For example, our personal trainer might describe some possible customers like this:

There would be plenty of other people our personal trainer could target, but you will probably have realised by now that planning is as much about deciding what you will not do as what you will do. You can always change later, if your first choice of target groups does not turn out to be the right combination of groups.

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Preparing your marketing plan

Step 4

Focus on you

Decide your price

We have known business owners underprice because, deep down, they are not really convinced that anyone will pay money for what they are selling.

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The price you charge for your product or service makes a big impression on your customers. It helps them decide what to expect from you. Be careful not to underprice yourself (many new small businesses do), or you will be seen as low quality. You will also make less profit than you could make.

It’s worth taking a few minutes to think about the wider implications of pricing your product or service.

Higher prices might actually make your target groups appreciate your products and services more than if you charged the same or less than the competition. This may seem unlikely, but think of our automatic reaction to higher prices for items like luxury brands, perfumes, cosmetics, shoes and clothing. If we suddenly found them at a cheaper price, we would be suspicious about the quality, or think they were fakes, and it would spoil our impression of their value. Many business start-up books tell you to start working out your prices by thinking about your costs. This is a big mistake. Of course, it is very important to think about your costs when setting prices, but it is not

In other words, they are not valuing themselves.

Please don’t fall into that painful trap!

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the best starting point.

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Working out your overheads should be a checking mechanism once you have explored your possible markets and decided what products and services you can offer them. This way, the calculation will tell you whether your business idea will give you enough of an income to make it worth doing. There is more about costs and financial planning in the section Think about the money, starting on page 69. Here, though, we will consider price from a marketing point of view.

Use your marketing research to find out what your product or service is worth to your target customers. This is often easier to find out during discussions than by using a questionnaire. If you are able to offer something that is unique, work out what the added extra is worth, over and above what your competitors offer. You can then add some or all of that amount to your price if you want to.

Why do this?? You could spend time and money on customers who don’t appreciate you, when other potential customers would!

You may find that some of the possible customer groups you have identified will appreciate your added extras more than others, and will therefore be willing to pay more for them. This may help you if you are deciding between groups to target.

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Preparing your marketing plan

Focus on you For example, if our personal trainer is able to train people in their own homes, and all the other personal trainers in the area take their clients to the local leisure centre, the first group our trainer identified (that of very overweight people) would be likely to appreciate this the most. Our trainer will know this because marketing research has showed that this group is embarrassed by training in public or with others.

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There isn't necessarily a single right answer as to which customer groups to target, and there is often no way of knowing which choice is the right one. If your research shows your choices as equal, think about what feels right to you, and what choice you are most comfortable with.

If the personal trainer uses up-to-date equipment and training techniques and is highly qualified, the last group (athletes) might also appreciate this.

The trainer will have to be careful, though, if he or she chooses two such different groups to target. It may be that the athletes will be put off if they see that the personal trainer also specialises in very overweight people, and vice versa. A small piece of research may well be able to answer this question.

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The remaining two groups may be less likely to appreciate the things that make our trainer different from the local leisure centre, and may not be willing to pay for these benefits.

The personal trainer could choose the two most appreciative groups (1 and 4) to target first, and design his/her pricing to match what the benefits of the service are worth to those groups.

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Alternatively, if research shows that choosing two such different groups would cause confusion, the trainer could choose groups 1 and 2, or groups 3 and 4 to target first, and become known as ‘the specialist in helping overweight people lose weight and get fit’ or ‘the specialist in helping athletes avoid injury and perform better’.

Some or all of the other groups could be targeted later, if the two main groups do not provide our trainer with enough business. On the other hand, the trainer might use price to exclude other groups, and to add to the impression that he/she is the specialist in helping very overweight people get fit, or in helping athletes to improve.

Using Sheet 12 > The edge and its value, list all the things that you can offer and sell that will make you appear better than your competitors (and ideally unique) for each of your target groups. You also need to start to measure this 'edge' in terms of money (how much the difference is worth to your customers). This will help you to choose your groups and set your prices. (See Example at the top of page 44.)

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Preparing your marketing plan

Example Sheet 12 How am I different?. . . .I .am . . . .the . . . only . . . . .child-minder . . . . . . . . . . . . .in. . the . . . .town .........

with a top qualification in Advanced Practice in Work with Children and Families. ............................................................... How much is it worth? .People . . . . . . will . . . .pay . . . . £2 . . . more . . . . . .per . . . hour . . . . . than . . . . . the ..... standard child-minding rate for those with basic qualifications. ............................................................... What is my evidence for saying this?. .The . . . .similarly . . . . . . . . .qualified ............... child-minder in the next town has charged this higher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .rate . . . .for ...... at least a year and is fully booked. ...............................................................

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...............................................................

Step 5

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Having a guide price for what you’re selling will help you with the decisions you'll make in the steps that follow, but we will revisit prices later in the workbook; you're not committed at this stage.

Know your competition

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Before you decide in detail which customers to target, and exactly what you are going to offer them, it is important to look at what is going on in the market-place you are thinking of entering.

For example, our personal trainer might have decided to concentrate most effort and energy on people who are already good athletes, only to discover after starting up that there are several other trainers offering exactly the same service, or that local athletic clubs have their own coaches who train club members at no cost.

Our trainer could have wasted time and money on legwork, advertising and promotional leaflets, only to have to start all over again for a different target group.

It is always better to do some groundwork first, and to set up your own system to carry on collecting information about your competitors once you start. Some of the questions you may want to answer might be: l

Who are my main competitors, in each of my possible customer groups?

What are my competitors’ strengths (in their customers’ view)?

Why do this?? If you know more about your competitors than they know about you, you’re already in a potentially stronger position.

Focus on you Don’t spend all your time worrying because there are competitors in your market. In fact, that's a sign of a healthy market. As long as you keep finding ways for your target customers to see your product or service as different and better than your competitors', you should be able to keep ahead of them.

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Preparing your marketing plan

Do Something Different by Jurgen Wolff This is one of the most practical and useful marketing books we’ve found. Now that you’ve done your research and you have a clear idea who you are marketing to, use this book to inspire you. It’s packed with techniques to transform your business, and ideas to take it from good to great.

What are my competitors’ weaknesses (in their customers’ view)?

What do my competitors charge for their products/services?

What extra services do they offer (same/next day delivery, guarantees, rewards for loyal customers)?

When you are thinking of competitors, remember to include anyone who could solve your customer’s problem, not just those already doing what you are thinking of doing. Think about the competitors for each of your possible customer groups separately.

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WE LIKE…

For example, for our personal trainer, other personal trainers are obvious competition. However, organisations such as slimming groups could solve part of the problem for the very overweight customer group, so they should be seen as competitors, too. For the more athletic customer group, sports clubs, companies selling gym equipment and training DVDs would be competitors, and so on.

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Now try this for yourself. Create a competitor list for each of the customer groups you have chosen. You may need to do some more marketing research to find some of the information you need. Record your questions, answers and any additional research results on Sheet 13 > Competitor information.

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You will probably need some more copies of this sheet, if you are looking at all your possible competitors. Visit: www.essential-business.co.uk/ step-by-step to download a pdf. Start to build up a file of competitor information, and add it to your binder. It could include newspaper cuttings, price lists, brochures, information from competitors’ websites or that you have gathered from mutual contacts, and so on. If you collect a lot, start a separate folder.

Be active in your information gathering, even once you have started your business. Ask mutual customers and suppliers what they like and dislike about your competitors and their products and services. Their answers will tell you a lot about what your customers want, as well as what your competitors are offering them.

Depending on your line of business, you could buy your competitors’ products, phone them to ask for a brochure (how efficient are they compared to you?), use their services, subscribe to their publications, or whatever. There are many possibilities if you apply some creative thinking. Do make sure you stay legal, though — no trespassing or raiding dustbins!

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Preparing your marketing plan

Step 6

Why do this??

Explore the wider world

By keeping alert to what is going on around you, you might spot potential opportunities or problems before your competitors do. You'll then be in a better position to exploit the opportunities and deal with the problems.

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Once you have collected as much information as you can about the competition in each of your possible customer groups, you may think you have done enough, but there is one more thing you need to do, and it is very important.

Your business will operate within its market-place, but it will also depend on the wider outside world. You will need to think how this will affect you and your business. You can often find out this sort of information from business advisers, banks, professional bodies, trade groups or the Internet, and it is worth spending some time looking for any information that may be important to your business.

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For example, our personal trainer might discover that the NHS is prepared to pay for overweight patients to be referred to qualified trainers by their GPs. This could give the trainer a great opportunity when starting the business.

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The trainer might also discover that a particular new law is likely to mean much higher insurance costs, or the need for extra qualifications. Either of these things would make a difference to business costs, and could be a threat to (or opportunity for) the business.

Record your information on Sheet 14 > The outside world.

Step 7

SWOT

Once you have collected all the information for each of your possible customer groups, competitors, and so on, you are in a much better position to decide exactly what you will do in your business. Sometimes, the amount of information you have collected can make it difficult to make your decisions, and one way to make it clearer is to create a SWOT analysis, which looks at strengths, weaknesses, opportunities and threats. On Sheet 15 > SWOT analysis, write down the internal strengths and weaknesses of your business, picking out only the most important points from all the information you have gathered. If you are selling your own services, these may be closely linked to your own strengths (good qualifications) and weaknesses (no experience), and so on.

Why do this?? SWOT might sound like business jargon, but it is actually a very simple and useful business tool to help you organise your thoughts. It can be used in all sorts of situations, not just business planning.

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Preparing your marketing plan

Next, think about all the future possibilities for your business, and write these down in the opportunities section of the SWOT grid.

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In the example on page 48, our personal trainer has included all the possible customer groups that have been identified, as well as the possibility of organising gym-based competitions, trail-running days, and specialist training sessions for groups such as bodybuilders or triathletes.

Now look again at your analysis of the competition and the wider world, and write down in the threats section of Sheet 15 anything external (and usually uncontrollable by you) that could threaten the success of your business. These could be the actions of particular competitors, or new laws, and so on.

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In the example on page 48, for the personal trainer, the local leisure centre buying new gym equipment and taking on some personal trainers of its own could be a serious threat. Other threats could include a recession, with fewer people able to afford such luxuries as a personal trainer, or newspaper articles highlighting the danger of being injured as a result of using under-qualified personal trainers.

Why do this?? If you build a picture of each of your competitors, you can plan to be strong in the areas where they are weak. You may also decide to target slightly different groups than they do. It all helps to put you in control of your business.

Step 8

SWOT your competitors

The last stage in this section is to complete a SWOT grid for each of your closest competitors using Sheet 16 > SWOT analysis for each close competitor. This will help you to keep an eye on their actions in the areas where they present the biggest threat, and to decide how to make the most of their weaknesses.

For example, if most local personal trainers have a lesser qualification or less experience than our trainer, he or she may decide to emphasise their superior qualifications and experience when writing press releases and PR material.

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Preparing your marketing plan

Example SWOT for our personal trainer

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Your SWOT should highlight all the most important parts of your marketing audit. It should help you to convert the mass of information you have gathered from your audit into something much more usable.

STRENGTHS

WEAKNESSES

Working alone Professional experience No business experience Up -to -date qualifications ..................................................................................... Limited space at home Modern equipment ..................................................................................... No existing customers Well-known locally ..................................................................................... Low advertising budget Good at motivating people ..................................................................................... No marketing experience Fit and energetic ..................................................................................... Customer group 1: weak motivation Supportive family ..................................................................................... Limited capital available Affluent area ..................................................................................... Low start -up costs ..................................................................................... Central location .....................................................................................

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.....................................................................................

OPPORTUNITIES

THREATS

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Talks at doctors’ surgeries Local leisure centre buying new ..................................................................................... ‘Slimmer of the Year’ competition gym equipment ..................................................................................... Link with nutrition adviser Leisure centre taking on ..................................................................................... Write training manual personal trainers ..................................................................................... Upmarket health clubs Trail-running days ..................................................................................... Slimming clubs Articles for local and specialist press ..................................................................................... Home workout equipment Links with physios and osteopaths ..................................................................................... Athletic clubs for referrals ..................................................................................... New health & safety regulations Target groups 2 & 3 ..................................................................................... Bad publicity Talks to hospital consultants ..................................................................................... Many people training as & nurses ..................................................................................... personal trainers Body-building sessions ..................................................................................... Own ill health or injury Specialist course for particular sports ..................................................................................... Client injuries Group sessions and classes ..................................................................................... Internet coaching ..................................................................................... Links with groups, e.g. Weight Watchers ..................................................................................... .....................................................................................

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Preparing your marketing plan

Example SWOT for our personal trainer’s main competitor

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We have taken the main competitor for the personal trainer as being ‘personal trainers employed on a part-time basis by the local leisure centre’, which we assume has a reasonably well-equipped gym.

STRENGTHS

WEAKNESSES

Lower paid job Target customers already use leisure Leisure centre seen as impersonal centre ..................................................................................... May be less qualified May win existing gym/exercise class ..................................................................................... Limited to leisure centre customers customers ..................................................................................... Limited time in gym (other classes etc) Free publicity in leisure centre brochures ..................................................................................... Gym crowded at peak times Leisure centre admin. support ..................................................................................... Leisure centre responds slowly Medical backup ..................................................................................... to changing customer needs Changing rooms, showers, other facilities ..................................................................................... Equipment maintained by leisure centre ..................................................................................... Tie-in with leisure centre special offers ..................................................................................... Financial stability .....................................................................................

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.....................................................................................

THREATS

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OPPORTUNITIES

. . Bespoke . . . . . . . . .training . . . . . . . . .for . . .particular . . . . . . . . . . . . . . . . . . . . . . . . .Independent . . . . . . . . . . . . personal . . . . . . . . . trainers . . . . . . . . .-. . . . . . . . . . . sports/health . . . . . . . . . . . . . . needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . more . . . . . .specialised .............................. . . Discount . . . . . . . . . .deals . . . . . .by . . .combining . . . . . . . . . . with . . . . . . . . . . . . . . . . .Private . . . . . . . gyms . . . . . . and . . . . .health . . . . . . .clubs ............ . . . . other . . . . . .activities . . . . . . . . . (eg . . . .swimming) . . . . . . . . . . . . . . . . . . . . . . . . .Athletic . . . . . . . . clubs ............................. . . Competitions . . . . . . . . . . . . . .and . . . . races . . . . . . . . . . . . . . . . . . . . . . . . . . . .Slimming . . . . . . . . . .clubs ........................... . . League . . . . . . . .tables . . . . . . in . . .gym . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Bad . . . . publicity . . . . . . . . . .(e.g. . . . . accident/injury) ................... . . Offer . . . . . .training . . . . . . . . .for . . .particular . . . . . . . . . . local . . . . . events .................................................. . . Publicity . . . . . . . . . .from . . . . .success . . . . . . . .stories . . . . . . .(training ..................................................... . . . . .individuals . . . . . . . . . . . to . . .success/weight . . . . . . . . . . . . . . . loss . . . . .etc) .............................................. . . Links . . . . . . with . . . . . .groups . . . . . . .and . . . . classes ............................................................ . . . . (e.g. . . . . .Weight . . . . . . . .Watchers, . . . . . . . . . . .yoga) ......................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... .....................................................................................

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Preparing your marketing plan

Well done. You have completed the most difficult part of the marketing section. It may have been quite hard work, but you’ll be very glad you’ve done it when you get to the ‘action’ stage of marketing, and things get expensive. You’ll be in a much better position to spend your money wisely.

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Keep going! The rest should be much easier now.

Time to reflect

It’s time again to stop and reflect. How are you feeling after working through this section? A bit overwhelmed by the size of the task ahead of you? You’re not alone. We’ve been there, but trust us, all the work you are doing will make it far more likely that the business you start will be successful and profitable (and more fun!) than if you just launch into it with no forethought or research.

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Turn again to Sheet 1 > You as a business owner. Are you still feeling confident that you have the necessary skills, or do you think it might be a good idea to seek outside support? Perhaps someone in your family or your group of friends can help?

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Turn again to Sheet 50 > Action plan. You probably also have more actions to complete after this section, so add them now. Your new business is waiting for you.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

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Planning for action

Now that you know where you are starting from, it should be much easier for you to decide where to go from here. There is still no single right answer, but you’ve got all that research as well as your SWOT to help you decide what to sell, to whom, when, and how.

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This section helps you create your outline marketing plan. It helps you decide which parts of the market you will aim for, what sales you can expect, and how you will go about promoting and selling your products or services. This will become the dog-eared document that you use every day, and will keep you on track to achieve your long-term goals. These steps should answer the second of our three questions:

Why do this??

Where are you now?

Where do you want to go?

How will you get there?

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Your research might have given you some unexpected results that may change your expectations.

Where do you want to go?

Step 1

Revisit your business purpose

You created an outline of your business purpose on Sheet 1 > You as a business owner. Now that you have so much more information, go back and look at it again. Does it still look realistic? Make any necessary changes based on your new knowledge.

Step 2

Create your image

To get to where you want to go, you will need to create the right business image, often referred to as your ‘brand’. It is important that this matches the way you want your customers to see you. Are you aiming for high-end luxury or bargain-basement customers? What will attract the customers you want to sell to? Modern and cutting edge? Or traditional and trusted?

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

Think hard about this image before you design a logo, or print letter-headed paper, business cards, and so on. Ideally, come up with several design options before you decide on the final version and ask some people from your target customer groups what they think of them.

You need to be comfortable with your image, in business as in life. Don’t try to be a bargain-basement trader if you have an uncontrollable weakness for Gucci!

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Your business image, or brand, goes much deeper than just your company logo or your business cards. It represents how your customers or potential customers think of you and it is very important that everything is consistent and carries the same message. By careful use of design, advertising, marketing activities and excellent customer service, you can build a very positive image of your business in people’s minds.

Focus on you

When you organise your promotional materials (see page 58), make sure everything is consistent with everything else: if you want to project a high quality image, work with a professional graphic designer and choose high quality printing on very good paper for your letterhead, and so on.

Decide what sales to aim for

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Step 3

Using your SWOT, and all the information you have gathered, try to be more specific about where your business will be in each of the next three years. How much will you sell to each of your customer groups?

How many of each of your products/services will each customer group buy from you?

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Why do this?? This stage is crucial. You must have some idea of how much you expect to sell — even if the picture changes once you actually get going.

To give you an idea of the sort of money you can make from your new business, you need to work out how many customers you’re going to be able to bring in. Lots of people find this stage difficult for a new business, because you probably haven’t sold anything yet, but it is vital to try to work out whether you should go ahead with the business in the way you’ve been planning it.

See the example, on page 53 opposite, of our trainer’s sales planning for the first year of business.

Be both honest and careful in your predictions. Sometimes people get a bit carried away with the number of customers they expect, especially in the first few months. Do some research to give you an idea of how many customers to expect. You can have a look at the accounts of competitors or similar companies at www.companieshouse.gov.uk for a small fee, but bear in mind that this information might be up to 18 months out of date.

Focus on you By planning your sales in this way, you will feel much clearer about what you are aiming for. This in turn frees you up to think creatively about exactly how you can achieve your targets. It’s worth the effort!

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

YEAR TARGET 1:

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Example Sales planning by the personal trainer

NOTE Insert either the year number: Year 1, Year 2, or the actual year of the plan: 2011, 2012, and so on.

Seriously overweight customers

6 customers, each training 1–2 times a week (assume that half will drop out after 6 months and will need to be replaced) TOTAL VALUE FOR TARGET GROUP 1

Number sold

9 x training sessions per week for 28 weeks of the year

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TOTAL VALUE FOR TARGET GROUP 2 TARGET 3:

Customers with health problems

3 customers, each training 2 times a week

Fit customers

2 general fitness classes in 2 local leisure centres

Value

£25 per session = £225 per week in sales x 46 weeks £ 10,350 —

Number sold

6 x training sessions per week for 46 weeks of the year

TOTAL VALUE FOR TARGET GROUP 3 TARGET 4 :

£25 per session = £225 per week in sales x 28 weeks

£ 6,300 —

Moderately overweight customers Number sold 6 customers, each training 9 x training sessions 1–2 times a week per week for 46 weeks of the year

TARGET 2:

Value

£25 per session = £150 per week in sales x 46 weeks

£ Number sold

2 x classes per week for 46 weeks of the year

TOTAL VALUE FOR TARGET GROUP 4 TOTAL FOR YEAR

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

6,900 — Value

£50 per class = £100 per week in sales x 46 weeks £ 4,600—

£ 28,150—

Planning for action

WE LIKE… Resistance is Useless by Geoff Burch We love this book. It takes you painlessly through the steps you need to take, and the skills you need to learn, to sell your product or service… and makes you laugh in the process.

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Write down on Sheet 17 > Planning sales what you could sell to each of your chosen customer groups in each year of your business plan. Remember that you’ll probably be selling different items, and you’ll sell different amounts of each one. Be realistic about the number you expect to sell in the first few months — it usually takes a while for people to find out about you. Expect your sales to rise slowly and grow over time. The trainer would be likely to plan for increasing sales in each target group in years 2 and 3, assuming they all remain targets. It may be that once the trainer has plenty of personal training customers, he/she might choose to stop running the less well paid fitness classes. These are mostly useful in the first couple of years as a way of becoming known and winning new customers, as well as providing steady work before a solid customer base is established.

Selling services

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In this way, the personal trainer is taking control of the business, rather than being controlled by it. Ultimately, the business should become more successful and more profitable as a result. This will make all the hard work and planning worthwhile.

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If you’re selling services rather than cups of coffee or bottles of shampoo, you still need to predict your sales. Think about how many leads you’ve got at the moment for new customers. Take a percentage of these (you can’t be sure that they will all sign up) as your sales for the first three months. How many people can you actually see in a week or a month? With a service-based business, there is always a limit to the number of hours of your time you can sell. You may need to change this as you work through the next question.

For each client that you attract, you’ll need to invest a number of hours before they become a client — there may be preliminary meetings and proposals to write, not to mention all the marketing and networking you’ll be doing to meet the clients in the first place — so you won’t be seeing clients five days a week.

As a rule of thumb, most successful independent consultants are lucky to get 80—100 days of paid work a year, and in your first year you are unlikely to achieve anything like this level.

Sales on a Beermat by Mike Southon & Chris West

One of the very readable ‘Beermat’ series, this easy-toread book is aimed at people who are filled with dread at the very thought of selling. It dispels the myth that to sell you have to be manipulative or dishonest, and explains in clear and simple terms how anybody can learn sales skills. Recommended.

Focus on you Even if you’re usually an optimistic person, try being a pessimist for this exercise, just to check that you can stay afloat while you get started. Most people are overoptimistic about how quickly their business will take off.

You may need to do some extra research to fill in gaps in your information at this point. Remember to make everything measurable, so you can look back afterwards and check whether you have achieved what you set out to do.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

How will you get there?

Why do this??

Now it’s time to answer the last of the three questions: l

Where are you now?

Where do you want to go?

How will you get there?

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This simple process will put you firmly in control of your business and can make the difference between success and failure.

Successful companies do this in two stages:

1 They create an outline marketing plan (sometimes called a strategy), a long-term overview of all the things they will need to do to win the sales they’ve predicted. This does not include too much detail at this stage. Then they move on to the second stage:

2 They create an action plan, which turns the first year of the outline

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marketing plan into a practical working document. It describes month by month, in detail, who needs to do what and when, to make the first year of the outline plan happen. This gives them a clear and comprehensive ‘To Do’ list for each month of the year. It is no accident that these companies are successful, so let’s learn from them. We have created examples on the next two pages, of an outline marketing plan and an action plan to help you understand this process.

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When you have studied the examples, create a plan for your own business for each of the next three years, using Sheet 18 > Outline marketing plan.

Now create your own ACTION PLAN

Focus on you

By planning your marketing efforts in this way you will be more organised and much more effective. You will also be spending your marketing budget more wisely and in a targeted way.

You will also put yourself firmly into the top 20% of small business startups. Impressive stuff!

The exciting bit! After all your hard work, this should be the easiest part of the plan and it is the part that people often really enjoy doing. In the steps that start on page 58, we look in more detail at some of the marketing activities you might want to undertake. We’ve also provided a overview of these various methods on page 64 in ‘Marketing methods — at a glance’, which shows the pros and cons of each. As you learn more about each type of activity, make further notes on Sheet 18 > Outline

marketing plan about what sort of things you might do and when you will do them. Use the first two pages of Sheet 19 > Marketing activity checklist to make sure that you are choosing the best methods for your chosen customer. You will return to Sheet 19 later. Then transfer the specific items and actions for your first year onto

Sheet 20 > Marketing action plan. (Refer to our examples of the two plans on pages 56—57 if you need a reminder of how this process works in practice, and what your completed action plan might look like.)

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

YEAR

> > > > > > >

Buy equipment Talk to receptionists, physiotherapists, doctors and nurses at all the local GP surgeries and hospitals Display leaflets for patients Arrange visits to slimming clubs Give talks on exercise Advertise in the local papers, newsagents and leisure centres Plan and send out press releases

YEAR > >

Continue with year 1 activities (if successful) Focus on building up clients using fitness classes at leisure centres Arrange talks at sports clubs and other relevant venues Research to establish which other customer groups should be targeted in future years

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NOTE Insert either the year number: Year 1, Year 2, or the actual year of the plan: 2011, 2012, and so on.

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Example OUTLINE MARKETING PLAN by the personal trainer

> > >

YEAR > > > >

Add another customer group, based on the results of research in year 2: body-builders, triathletes or another group identified by research Build on successful activities undertaken during previous two years

> > > >

Start Your Business Step by Step ÂŠ Essential Business & SFEDI Group, 2011.

Planning for action

Example MARKETING ACTION PLAN by the personal trainer May

Launch

Find equipment suppliers and place order

Organise sign writing for van

Book hall for launch party

Design and print launch party invitations

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Offers

Design and print cards, letterhead paper, leaflets

September Taster session for press and public; follow with press release

Prepare press releases and send at end of month

Compile list of all local sports clubs and contact them re competition

Send out ‘Win 5 free personal sessions’ letter to sports club members

Launch website

Compile list of email addresses for e-newsletter

Send out e-newsletter

Run ‘£10 off first session’ reader offer

Approach leisure centres with ‘£10 off first session’ offer to members

Run ‘£10 off first session’ member offer

Buy leaflet holders. Write to all local slimming clubs

Phone slimming clubs to discuss possible talks

Buy domain name and book website designer Phone round local press and suggest reader offer

August

Send out invitations to launch party (early Sept)

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Website

July

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Equipment

June

Launch party with press and influencers

Start programme of 2–3 slimming club/GP surgeries/month

Promotion

Visit GPs, practice nurses & physios at GP surgeries and hospitals

Visit private physios, osteopaths, chiropractors & massage therapists

Visit GPs, practice nurses & physios at GP surgeries and hospitals

Visit private physios, osteopaths, chiropractors & massage therapists

Promotion

Visit GPs, practice nurses & physios at GP surgeries and hospitals

Top up leaflets in GP surgeries, hospitals, physio practices, etc

Promotion

Visit leisure centre managers to discuss fitness classes

Take leaflets and holders to leisure centres

Top up leaflets in leisure centres

Promotion

Attend 2 networking events

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

Step 1

Prepare your printed materials

Step 2

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Use Sheet 21 > Design and printing to make a list of the design and print work you need to complete for your business and your marketing activities. Include an estimate of the cost of each item on your list, to see whether your wish list is practical. If it is too expensive, cut out non-essential items and try again until you have an affordable list.

Draw up a communication plan

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It will not only be customers you need to tell about your business. Customers are often influenced by others when they make buying decisions, as in the case of doctors referring patients to our personal trainer. Make sure you plan to communicate with anyone who might recommend you. Customers will often be much more willing to buy a product recommended by someone they trust than if someone just tries to sell it to them.

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Use Sheet 22 > Potential customers and influencers to create a list of the people you need to communicate with — both potential customers and the people who could influence them. For each group, make a list on the second page of the record sheet of the different messages you need to give them.

For example, our trainer could list:

Seriously overweight people: ‘Lose your weight safely under expert supervision’ GPs: ‘Help your seriously overweight patients to lose weight and get fit by referring them to a fully qualified personal trainer’

Why do this??

People who buy on a recommendation tend to buy more and be more loyal customers.

Focus on you Think about the sales messages you like best when they are directed at you, then put yourself firmly in the shoes of your target customer. Think what your customer will most need or want to know — not about your product, but about what your product or service will do for them personally.

Athletes: ‘Improve your performance and avoid injury with a fully qualified personal trainer’ Club coaches: ‘Help your athletes become faster and fitter with some individual training sessions — special club rates’ The trainer will need to communicate all these different messages in a way that is carefully targeted towards that group.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

WE LIKE… DIY PR — The small business guide to ‘free’ publicity

With a little creativity, communicating your message need not cost you a fortune. You may want to consider advertising, but many small businesses find that paid-for advertising is not the best method for them, and it can be very expensive.

Why do this??

Get public relations (PR) working for you

Often, the key is to be visible to your customers in places they visit and newspapers or magazines they read, and this might cost you very little. For example, PR is often free, except for your time. The most common form is the press release. If you look in your local paper, most of the stories in there have been sent in by somebody, and if you have a good story to tell, many local papers and magazines will be happy to print it. It saves them having to go searching for stories. You must have something newsworthy to say. It helps if you buy a copy of the publication first, and find out what type and length of story they seem to publish. You could ring and ask them, but they will probably try to sell you advertising space if you do. Always include at least one quote, and adopt the tone of the publication you are targeting. Make sure you include your contact details, and let them know whether you can provide photos if they want them. If you make the journalist’s job easy, they are more likely to publish your piece.

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You might have more spare time for PR activities when you start than you will when your business takes off. Use your time to make yourself visible in the right places, where your target customers will see you, hear you, and read about you.

Step 3

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One of the most useful and practical books on PR we have found. One of our favourite books for small business owners.

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by Penny Haywood

On page 60, you’ll find an example of a press release. Note the eye-catching headline and the word count at the end. We also give you more tips on

Sheet 23 > Press release, which you can use to write your own press release. Think of an attention-grabbing headline, write about something that will interest people, and make sure you include at least one quote. Other types of PR include events of various kinds.

For example, the personal trainer might arrange a launch party, a series of free fitness talks and some free coaching/assessment sessions at a local school. The local press can be invited, and press releases sent before and after the event.

With a little imagination, you can gain a lot of visibility amongst your target customer group at relatively low cost. Feed these ideas back into Sheet 20 > Marketing action plan.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

Example Personal trainer press release

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PRESS RELEASE Helping Summerton get slim, ﬁt and healthy

Jo Haskins, personal trainer extraordinaire, has taken Summerton by storm since she arrived in the town only a year ago. Not only has she helped three local people lose over two stone each, but two of the athletes she trains have also reached county standard since she started coaching them. “I’m delighted with the progress they’ve all made,” beams Jo. “They’ve all worked very hard to reach their goals, and I am very happy to have been able to help them.”

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James Garner, 43, who has lost three stone in the past year, has nothing but praise for Jo. “She’s been brilliant. I was her ﬁrst customer, and I would never have been able to do it without her. She kept me going when I wanted to give up, and the weight just kept falling off. Even better, I’m ﬁtter now than I was when I was 20!”

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So what makes people like James and Sandy Johnson, a local crosscountry runner, choose Jo’s personal training rather than the local leisure centre? “That’s easy,” says Sandy. “I have one-to-one attention whilst I’m training, so I am less likely to injure myself. Jo has really helped me to reach county standard in my sport.”

James has another reason, too: “With so much extra weight on me, I would have been embarrassed, training alongside slim, ﬁt people. It was great to be able to work off all the weight in private. I could probably go to the leisure centre now, but I far prefer training with Jo!”

By the end of next year, Jo hopes to ﬁnd some premises, and to share them with a nutritionist, a physiotherapist and possibly a chiropractor. That way, she can offer her clients a wider range of services, so they can become even ﬁtter and healthier than they already are! 310 words CONTACT Jo Haskins email: jo@train-for-health.co.uk tel: 00712 363612

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

Step 4

WE LIKE…

Make events happen

The ‘How To’ website

This website is packed with really useful ideas and information. Their 85 Ways to Market Your Small Business section provides a very comprehensive list of the many and varied ways you can market your small business.

On Sheet 24 > Events — publicity, create a list of events or talks that you could attend, arrange or organise to gain good PR for your business. Giving a talk, or presenting a workshop, either at your own event or at someone else’s, is also a very good way of reaching your potential customers directly. If you give a talk about a subject that you are very familiar with — that is also of interest to your customer — you present yourself in a positive light. It also gives you the chance to meet, and build a relationship with, a larger number of people — the audience — than you might ordinarily meet. Think of ways that you could expand the publicity beyond the event itself, such as press releases before and after it, inviting a journalist to the talk, and so on.

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www.howto.co.uk/business/ market-small-business

List your ideas on your Sheet 20 > Marketing action plan.

Step 5

Most networking groups, such as chambers of commerce, will let you come to a meeting or two before you have to commit to joining, so visit a few, then decide which of them are going to be worth the joining fee.

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Who do you remember most from your last social gathering? Probably the person who maintained eye contact, seemed interested in everything you had to say, told you very little about themselves, and gave you a potentially valuable contact to follow up.

Networking is another way of being visible at low cost. It can be very useful, particularly for small businesses wanting to become known in their local area. Networking is all about making new contacts, so find groups that match what you are trying to do.

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Focus on you

Network

WE LIKE…

UK Business Forums

www.ukbusinessforums.co.uk

Not all networking is face to face! This online forum has over 1,000 members. Share your experiences and challenges with people from all over the UK.

Be careful, though, not to treat every contact as a potential customer, and be generous with your own contacts and advice. Your rewards will tend to come back over a longer time rather than through an immediate sale.

The best networkers tend to be those who focus their entire attention on the person they are with, and do more listening than talking. They are often the people who are most likely to put other people in touch with each other, and are seen as helpful and unselfish. Although this may not seem like effective selling, it means that they are remembered in a very positive way, and the favour is often repaid later.

Spend some time researching the best networking opportunities for your business. Create a list of these on Sheet 25 > Networking opportunities, and add them to your action plan. Keep adding to Sheet 25, including more events and notes on events you have attended. Feed these ideas into Sheet 20 > Marketing action plan.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

Step 6

Think e-market: websites, internet, email

By outlining what you want your website to do, you can work out: l

how much help you will need

when you will need it

what it is likely to cost.

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Cost considerations may mean that you can only develop your website to its full potential in stages, but at least if you have planned for this, you can work with your suppliers in the most cost-effective way. Feed these ideas into Sheet 20 > Marketing action plan.

Advertise your wares

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Step 7

There are many ways of advertising your business. However, when it comes to writing and designing your advertisements — whether for a magazine, a newsletter or a website — the experts say that you should always keep in mind these five essential points: l

A — your advert needs to attract attention, with a strong headline, inviting text and, if your budget allows, a photograph or illustration.

I — it must attract and keep the person’s interest, by being engaging and easy to follow and understand.

D — it should create desire in the reader, by being full of benefits (we write more about benefits on page 94, in Keeping the money flowing).

C — it must convince the reader that not only is it safe to buy from you but this is a not-to-be-missed offer, by including something like a testimonial, a ‘money-back if not 100% satisfied’ guarantee, or a special offer such as ‘two for the price of one’.

A — it must include a ‘call to action’ by giving clear details about what the reader should do next: ‘visit our website at…’ or ‘call us now on…’ (You’d be surprised how many people forget to include a telephone number on their ad, for instance!) Use positive, active words in your call to action.

It will save you spending money on your site and then having to change it no sooner than you’ve launched it.

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If you are planning to use a website as part of your marketing, it is important to think about this at the start. Use Sheet 26 > What do I need from my website? to outline what you want your website to do for you during each year of the plan. The commissioning, writing and design of a website can seem like an enormous undertaking, but by keeping the needs and wants of your customers in mind as you go through the process, you are more likely to end up with a site that is functional — in that it brings in lots of customers — as well as decorative.

Why do this??

Tip: Ask your website designer to build the website so that you can make changes to the content yourself, by being able to add text, pictures, and even new pages. This will save you a lot of money further down the line!

Focus on you Which pieces of direct mail do you read? Probably the ones related to your hobbies and interests, and the ones where you feel there might be something to gain. You need to make your prospective customers feel the same way about everything you send them.

Start Your Business Step by Step © Essential Business & SFEDI Group, 2011.

Planning for action

The Advertising Standards Authority www.asa.org.uk

This website is the UK's independent regulator of advertising across all media, including TV, internet, sales promotions and direct marketing.

Think about where you could place your advert for maximum impact. Don’t forget, that needs to be where your customer is — which may not necessarily be where you would go for information. For example, if you are trying to reach people over 60, you could place an ad in a church magazine, or on the noticeboard of a local hall that runs exercise classes for older people. Now let’s test what you’ve learned: go back to Sheet 19 > Marketing activity —

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WE LIKE…

checklist and on page 3 of the sheet, design an advert that uses A, I, D, C, A (see previous page) to make it stand out and attract your customer. There are various rules about what you can and cannot include in an advert, so visit the Advertising Standards Authority website (see We Like opposite) and familiarise yourself with the standards. Describe on Sheet 19 how the standards may restrict your advertising and how will you ensure that all your advertising is ‘legal, decent, honest and truthful’! Add your advertising plans to Sheet 20 > Marketing action plan.

Step 8

Consider direct marketing

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Strictly speaking, direct marketing is any marketing communication that speaks directly to your customers and carries a way for them to respond to you directly. Mailshots, telephone selling, email marketing, SMS and so on, can be a very good way to reach a specific group of customers with a specific offer, but be careful: postal mailings can be very expensive, and will receive a low response (typically 1—2%) unless they are focused on only the right people.

WE LIKE…

Flavours

There are also strict rules about using people’s information. It is against the law, for instance, to send faxes to people who have indicated that they do not want to receive them. You can find more about these restrictions at www.ico.gov.uk. Feed your ideas for direct marketing into Sheet 20 > Marketing action plan.

www.flavours.me

This site helps you bring together all your social ‘personalities’ into one place. You can add your Facebook, LinkedIn and Twitter accounts and your social media followers can keep up with your activity on a single website.

Step 9

Build your social personality

The recent growth in social media has transformed the way businesses talk to their customers. Twitter, LinkedIn, Facebook and various blogging websites all make it possible for you to reach your customers for little financial outlay. However, it requires consistent effort and can be very time-consuming to keep your social marketing fresh and relevant, so think carefully about the potential benefits to your business before you begin. The usual rules of spending time where your target customers actually are apply to social media as with any other marketing method. So don’t spend hours on MySpace if your target customers never go there! Add your ideas for building your social profile into Sheet 20 > Marketing action plan.

Planning for action

Marketing methods — at a glance

ADVERTISING

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Don’t forget, you need to make sure that your marketing speaks to each type of customer personally, and do not expect each business card, leaflet, poster or ad to do more than is realistic. Take a look through this quick guide at some ways of marketing your business and the pros and cons of each.

Advertising can be immensely effective but it isn’t always the best medium for every business situation. It is one of the most expensive forms of marketing, so any advertising campaign must work for you. It is amazing how many businesses rush into advertising without careful planning and a cool assessment of its benefits. Things to think about

Don’t buy space unless you are reasonably confident that your ad stands a good chance of making an impact.

The advertising needs to be where your target customer will see it (hence the need to research your market carefully before placing an ad). Before spending any money, you must make sure that your ad will be seen. For instance, newspaper or magazine ads placed on the right-hand page are more likely to be noticed.

Compare advertising rates carefully. Remember, you are looking at the cost versus the benefit of choosing a particular type of advertising, so it’s not simply the rate for the ad that you should take into account, it’s also the numbers of people you will reach.

Your ad needs to stand out from the crowd, so think carefully about the design and layout, and don’t forget to include a ‘call to action’. Think about the benefits of what you’re selling, rather than making it a list of the features of your product. Make sure to project a positive image of your business.

Look through magazines and websites and notice which ads demand your attention. What is it about them that draws you in? Could you use the same technique? (Although be careful not to infringe any copyright restrictions!)

Remember to include codes on your ads, if possible, so that you’ll know how the person heard about you and so you can measure the response rates.

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Pros l

Can be seen by a large number of people.

It’s possible to access free listings such as Thompson, Yell, BT Tradespace.

Cons l

Unfocused.

Can be expensive.

Advertising is thought to be only about 0.2%—0.5% effective.

Continued…

Planning for action

Marketing methods — at a glance continued PRINTED MATERIALS

Things to think about

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Designing and printing marketing materials can be very expensive — so it’s important to get it right. You don’t want cupboards full of unused leaflets!

Consider ways that your leaflet or brochure can reach your potential customer, such as door–to–door delivery, trade shows, and in shops or cafés.

Remember to think from your customer’s perspective: what would interest them?

Make sure you have a strong message in a visible position (particularly important if you are considering using a poster).

Include a call to action: ‘phone now’, ‘call into our shop’, or ‘visit our website to download our free pdf’.

Don’t forget to include contact details (but not your personal or home details).

Invest in professional design and use a designer who understands marketing.

Don’t print thousands of copies! Materials go out of date quickly and printing more leaflets is only cost-efficient if you use them all.

Pros

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A simple, affordable way of reaching your customer.

Can encourage customers to respond quickly, for example ‘Offer ends on Friday’; ‘Order now for Christmas’.

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Cons l

Printed materials can end up in the bin!

Needs to be targeted in the right locations.

Leaflets, and similar items, are between two and 10 per cent effective.

WORD OF MOUTH Word of mouth marketing can be one of the most cost-effective and powerful methods. Things to think about l

Delight your customers and they’ll tell others.

Gather testimonials and include them on your website or printed materials.

Even an unhappy customer can become your ‘Number One Fan’ if you handle their complaint quickly and courteously.

Pros l

Word of mouth can transform your business — make it easy for customers to talk about you.

Cons l

Unhappy customers will talk about you, too!

Continued…

Planning for action

Marketing methods — at a glance continued WEB/INTERNET

Things to think about

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There are now an estimated one billion people on the worldwide web and many among them could become your customers!

There are a number of ways of increasing your visibility on the web: l

search engine optimisation (SEO)

pay per click (PPC) advertising, such as Google Adwords, Facebook or LinkedIn

forums, such as UK Business Forum, BT Tradespace and Enterprise Nation

email and affiliate marketing.

Pros

Online marketing can be very cost effective.

It is relatively simple to do and quick to take effect.

There are lots of places to advertise.

Watch out for data protection laws (see page 113).

Cons

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Can be very time consuming.

It can be very hard to get to the top of search engines without professional SEO help, such as link-building or professional SEO copywriting.

Pay per click can be expensive and is a bit of a ‘dark art’ so be sure to set a fixed budget that you can afford, and monitor it carefully.

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SOCIAL MEDIA

There has been an explosion in social media websites in recent years. Things to think about There are a number of ways of announcing your social presence, including: l

Twitter (www.twitter.com) — a relatively recent addition to the social media world, but massively popular and used by millions. A great way to raise your profile.

Facebook (www.facebook.com) — a mix of personal and business, so be careful!

LinkedIn (www.linkedin.com) — a very popular site for business owners.

There are others, such as MySpace and Bebo, but only use them if you feel that your target customers are likely to spend time on these sites.

Pros l

Social media marketing and promotion is simple to learn and very cost effective.

Cons l

Can be very time consuming and addictive. It is very easy to waste precious time on these websites whilst achieving very little in terms of value to your business.

Continued…

Record sheets

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How to use these record sheets

First things first

You as a business owner A What does success mean to you? B What do you want from your business? C Your business and your personality D Your business values E Your vision for your business F Getting the message across G You and your business skills H Skills review

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Sheet 1

Deciding what sort of business to start

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Sheet 2 Sheet 3 Sheet 4 Sheet 5

How to start your business Your initial business idea 10 reasons for success Challenges to your business idea

Researching your market Sheet 6 Sheet 7 Sheet 8 Sheet 9

Key marketing research questions Secondary research results Primary research questionnaire Interview or discussion questions

Preparing your marketing plan Sheet 10 Sheet 11 Sheet 12 Sheet 13 Sheet 14 Sheet 15 Sheet 16

My personal strengths Total and target customer groups The edge and its value Competitor information The outside world SWOT analysis SWOT analysis for each close competitor

Planning for action Planning sales Outline marketing plan Marketing activity checklist Marketing action plan Design and printing Potential customers and influencers Press release Events — publicity Networking opportunities What do I need from my website?

Thinking about the money

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Start-up costs Personal survival budget Target income Sales targets Variable costs Fixed costs Profit Keeping control of cash flow Cash flow forecast Invoices and terms and conditions Tax dates for your diary

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Sheet 27 Sheet 28 Sheet 29 Sheet 30 Sheet 31 Sheet 32 Sheet 33 Sheet 34 Sheet 35 Sheet 35 Sheet 37

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Sheet 17 Sheet 18 Sheet 19 Sheet 20 Sheet 21 Sheet 22 Sheet 23 Sheet 24 Sheet 25 Sheet 26

Keeping the money flowing Sheet 38 Sheet 39 Sheet 40 Sheet 41

Your sales methods Making the perfect sales fit The deal Finding and keeping customers — checklist

The practical day-to-day Sheet 42 Sheet 43 Sheet 44 Sheet 45 Sheet 46 Sheet 47 Sheet 48 Sheet 49 Sheet 49

Who to inform — checklist Insurances Advisers and advice IT needs Becoming an employer — action points My business and the law — 1 My business and the law — 2 Business plan Action plan

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How to use these record sheets These record sheets are designed to collect your thoughts, your research results, and your ideas for the future of your business. They are designed to be easy to use and straightforward. Your completed record sheets will build into a professional-looking plan that will not only help you run your business well, but will also make you proud of it from the start.

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You will also find extra copies of all these record sheets on our website: www.essential-business.co.uk/step-by-step. There you will find two types of record sheet:

PDFs — you can download the pdfs (you will need Adobe Acrobat Reader to be able to open them), type directly into the various text boxes, and then save or print your work.

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Remember: don’t try to complete all the record sheets at once. It may take you some time to give them the thought they need and find the information you need. Also, feel free to skip any that do not apply to you. You can revisit them later, as your business grows. Be creative! Get thinking and writing…

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sheet 6 Key marketing research questions

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Remember: this is your chance to find out about people’s feelings and attitudes.

..................................................................................... .....................................................................................

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5 ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... Continued…

sheet 6

continued

Key marketing research questions continued 6

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..................................................................................... .....................................................................................

Now return to page 28

sheet 7 Secondary research results

For example:

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Include detailed references to where you found the information — publications, websites, and so on — so you can find them again.

Leek, Staffordshire has five convenience stores but no delicatessen. Source: www.britinfo.net

Around 49% of the population of Leek is aged between 25 and 59, with over 15% being between 50 and 59 years of age. Source: www.upmystreet.com (based on 2001 Census data)

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..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... .....................................................................................

Now return to page 29

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sheet 8 Primary research questionnaire

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Remember: this is your chance to find out about people’s feelings and attitudes.

..................................................................................... .....................................................................................

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sheet 8

continued

Primary research questionnaire continued 6

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.....................................................................................

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..................................................................................... .....................................................................................

Now return to page 30

sheet 9 Interview or discussion questions

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Remember: this is your chance to find out about people’s feelings and attitudes.

..................................................................................... .....................................................................................

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.....................................................................................

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sheet 9

continued

Interview or discussion questions continued 6

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.....................................................................................

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..................................................................................... .....................................................................................

Now return to page 34

sheet 10 My personal strengths

I am a good communicator

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For example:

..................................................................................... .....................................................................................

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3 ..................................................................................... .....................................................................................

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..................................................................................... .....................................................................................

How the personal strengths I have listed could be used in my business. For example:

I could give some free talks

Start Your Business Step by Step â&#x20AC;˘ RECORD SHEETS ÂŠ Essential Business & SFEDI Group, 2010.

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sheet 11 Total and target customer groups TOTAL POSSIBLE CUSTOMER GROUP

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Description of my total possible customer group.

For example: All parents of primary school children who live within 30 miles of my studio

TARGET CUSTOMER GROUPS

For example: People who…

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Detailed description of my possible target customer groups (add personal characteristics such as age, gender, where they live, lifestyle, and so on).

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. . . . . . . or . . .cohabiting, ...................... > . are . . . .married

> . . are . . . .single . . . . . parents, . . . . . . . . do . . . not . . . .go . . out . . . . to . . work, .......

> . work . . . . . full. . . . . or . . .part-time, . . . . . . . . . .and . . . .have .........

> . . and . . . . have . . . . . children . . . . . . . .at . . .primary . . . . . . . .school ...........

> . children . . . . . . . . at . . .primary . . . . . . . .school .................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Now return to page 40

Target customer group 1 People who…

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Continued…

sheet 11

continued

Total and target customer groups continued

People who… > ..................................... > ..................................... > ..................................... > ..................................... > ..................................... > .....................................

Target customer 3 People who…

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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> .....................................

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Target customer group 2

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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> .....................................

Target customer group 4 People who…

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

> .....................................

>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If you have more target customer groups, you can download a pdf version of this form: www.essential-business.co.uk/step-by-step

Now return to page 40

sheet 12 The edge and its value

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What makes me different from the competition for each of my possible target groups? How much is this worth to each customer group?

Target customer group 1

How am I different?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... How much is it worth to my customers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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..................................................................................... What is my evidence for saying this?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................................................................................... ..................................................................................... .....................................................................................

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Target customer group 2 How am I different?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Continued…

sheet 12

continued

The edge and its value continued

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Target customer group 3 How am I different?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................................................................................... ..................................................................................... ..................................................................................... .....................................................................................

How much is it worth to my customers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....................................................................................

What is my evidence for saying this? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................................................................................... .....................................................................................

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..................................................................................... .....................................................................................

Target customer group 4

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If you have more target customer groups, you can download a pdf version of this form: www.essential-business.co.uk/step-by-step

Now return to page 43

Start Your Business Step by Step â&#x20AC;˘ RECORD SHEETS ÂŠ Essential Business & SFEDI Group, 2010.

sheet 13 Competitor information Complete a competitor information sheet for each of your target groups.

Target group:

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For extra copies of this form, you may either photocopy it or download and print the pdf: www.essential-business.co.uk/step-by-step

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Who are my main competitors for this group?

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What do they charge for their products/services?

What are their strengths? (In their customers’ view, with evidence of how I know.)

Continued…

sheet 13

continued

Competitor information continued

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What are their weaknesses? (In their customers’ view, with evidence of how I know.)

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What extra services do they offer (same/next day delivery, guarantees, rewards for loyal customers, etc) and how much are these worth to customers? (With evidence of how I know.)

Additional information about these competitors

Now return to page 45

sheet 14 The outside world

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How outside world factors will affect me and my business: For example: New laws are coming into force soon that will affect the business insurance .....................................................................................

I. .will have to buy. People now expect higher qualifications so I need to look at increasing my ................................................................................... own qualifications. ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... .....................................................................................

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sheet 17 Planning sales

YEAR

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Complete a sales planning sheet for each year of your business plan — you may photocopy this sheet or download a pdf: www.essential-business.co.uk/step-by-step NOTE Insert either the year number: Year 1, Year 2, or the actual year of the plan: 2011, 2012, and so on.

TARGET 1:

Number sold

TOTAL VALUE FOR TARGET GROUP 1

Number sold

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TARGET 2:

Value

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TOTAL VALUE FOR TARGET GROUP 2 TARGET 3:

TOTAL VALUE FOR TARGET GROUP 4 TOTAL FOR YEAR

Number sold

TOTAL VALUE FOR TARGET GROUP 3 TARGET 4 :

Value

£ Number sold

Value

Now return to page 53

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sheet 19 Marketing activity checklist

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Decide on the marketing activities you will use to reach your customers. Remind yourself of the various options available by looking through the ‘Marketing methods at a glance’ on page 64 of the workbook. Be creative! Always obtain at least two quotes if possible and compare prices (cost), the numbers of people you expect your marketing to be seen by (reach), and how often it will be seen (frequency). That will help you decide on the most cost-effective activity for you.

CUSTOMER GROUP

Marketing activity

Weekly advert in private nursery school foyer and half-page ad in school’s parents of young children monthly newsletter Example Designer who sells garments made from recycled materials:

Fashion school students

Give regular talks on I called the college and was told that vintage fashion of 1960s they welcome expert guest lecturers. and creative design The students are fashion-conscious and always looking for original items.

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Visited four nursery schools and watched parents avidly reading the notice board. I also called other newsletter advertisers who said that they get good responses.

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Example Shop which specialises in handmade toys: Wants to reach

Why do you think this method will reach this group?

> Continued…

sheet 19

continued

Marketing activity checklist continued Marketing activity

Why do you think this method will reach this group?

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CUSTOMER GROUP

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There is nothing worse than losing precious sales because you haven’t planned properly for the results of a successful marketing or advertising campaign. What safeguards could you put in place to be able to handle an unusually large volume of phone calls, or a rise in appointments, or increased product sales? Possible marketing activity result

Example:

Increase in call volume

Now return to page 55

What safeguards can I put in place?

Bring in freelance staff for busy periods & train them.

Continued…

sheet 19

continued

Marketing activity checklist continued

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Time to get creative! Plan and design an advert for your product or service (in the box below or on a separate sheet of paper). Make sure it includes all the important information your customer needs to know, as well as a compelling reason to take action as a result of seeing your ad. Checklist 3

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Does your advert: ● include your unique selling point? ● include your key messages? ● include all relevant information? ● convey a positive image? ● include a ‘call to action’? ● include your contact details? Where would you place it? ● Newspaper ● Magazine ● Trade press ● Specialist publication ● Other....................................... Is it legal? Does it comply with:

● Advertising Standards ● Data Protection Act

Explain how you have:

■ Made it attract attention: ■ Kept the reader’s interest: ■ Created desire: ■ Convinced the reader to buy: ■ Called upon the reader to act:

Now return to page 63

Continued…

sheet 19

continued

Marketing activity checklist continued

Examples:

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Describe how Advertising Standards Authority requirements might restrict or affect your advertising. You will also find the various advertising codes on the Committee of Advertising Practice website: www.cap.org.uk.

I will not exaggerate the capabilities or performance of our products or services.

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I’ll make sure that all prices quoted in our ads show clearly (or include) all fees and charges.

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It is important that you continuously monitor the results of your marketing activity, and how successful it has been, and adjust your activities according to the results. How could you make sure that you are making the best use of your marketing budget? Examples:

I’ll include tracking codes on all my print adverts to compare their effectiveness.

I’ll compare the costs and results of online versus print advertising over two months.

Continue on a separate sheet if necessary

Now return to page 68

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Finally…

Well done! You’ve now completed the Start Your Business Step

by Step pack. By putting in the effort and completing the record sheets, you are now well ahead of the hundreds of people who rush into starting their business on a whim, armed with nothing more than blind optimism and crossed fingers. The reading, thinking, researching and recording you have done will have made your chances of business success much more likely.

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As we said when you started your journey through this workbook, we’re passionate about business. We hope and believe that the careful thought, research and planning you have put in will pay dividends. We want you to succeed.

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We wish you the very best of luck with your business… and warmest congratulations on a job well done.

Julie Stanford Managing Director

Ruth Lowbridge Executive Chair

Essential Business

SFEDI Group

Essential Enterprise Partners

119

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An ESSENTIAL ENTERPRISE workbook

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Essential Business

SFEDI Group

42 Worcester Villas

Aycliffe Business Park

Hove, East Sussex BN3 5TB

County Durham DL5 6XP

T 01273 727282

T 0845 467 3218

E info@essential-business.co.uk

E info@sfedi.co.uk

W www.essential-business.co.uk

W www.sfedi.co.uk