There are, of course, plenty of freebie seekers. They are the people that are looking for something for nothing. In most cases, they will never make a purchase from you. These, however, are not the people you need to worry about. Be cordial, of course, in your interactions with them, but you don’t need to bend over backwards to help them. The people I’m classifying in that group are the ones that take but never give and, by that, I don’t just mean financially. There are people that will take whatever they can get for nothing, but show no appreciation for it at all. No “thank you.” Nothing.

Those aren’t the people you need to concern yourself with. Even if they bad mouth you, these people are generally recognized by others and their claims are quickly dismissed.

The ones of which I speak are those that may express an interest in our product or service, but not purchase right that moment. When dealing with them in person, they may share with you why they are not making a purchase immediately. Of course, sometimes, they may not share, either preferring their privacy or not wanting to tell you too personal a detail. When dealing with online customers, in most cases, we’ll have no idea whatsoever why they declined to make their purchase immediately.

It could be that they are highly interested in buying from you, but don’t have the money to do so right now. They may have had an unexpected bill come their way or some other unforeseen circumstance may have required them to spend money they might have otherwise spent with you. They may need to wait until their next paycheck. Or, the paycheck after that. Remember, many people, especially in the U.S., don’t have a lot of savings and live from paycheck to paycheck.

They might be interested in buying, but simply cannot afford to do so at the moment.

It could also be that they need to save up the money over the course of several paychecks, or by doing odd jobs that would be of an inconsistent nature in terms of amounts and regularity of payments. It could be that they are still in the research stage and want to do a more thorough review of other products before settling on one in order to get the most value for their money, which will be especially of importance to those that have limited incomes to spend.

In any case, what is important to note is not that we have a non-buyer but that we have a potential customer. Circumstances may be that this potential buyer may never make a purchase from us; but it may also be that they will make a purchase from us at a later date.

Naturally, if we treat them like a freeloader, they will think we don’t think very highly of them and make their eventual purchase elsewhere. And, when this happens, marketers are prone to think that such people were just freebie seekers to begin with and never interested in making a purchase, when really it was the marketer’s attitude toward them that lost the sale.

To help ensure we get that eventual sale, it is necessary to treat the non-buyer with respect. We do that first by treating them as a potential customer rather than a non-buyer. If we look upon them as non-buyers, it is easy to presume they are freeloaders of some sort. By viewing them as a potential customer, that changes our own attitude toward them. Instead of looking at them as someone we failed to sell to, we look at them as a sale we’ve already potentially made but need to keep.

One powerful way to keep the non-buyer as a potential customer is to maintain contact with them. Many sellers, especially in a bricks and mortar environment, are quick to turn away a non-buyer. But, regardless of the business environment, online or offline, getting the non-buyer on your mailing list is a great way to help increase the odds of a future sale from that person.

Online or offline, you can “sell” them on joining your list by offering them special discounts and savings only available to persons on your list. Online, you may have more options. You can offer them a free eCourse in your niche subject. You can offer them a free special report for signing up. Or, you can do a combination of offers.

Once on your list, be sure you continue to send them what you promised. If you promise free information, but every mailing is a solicitation to buy, the prospect may be turned off, thinking you see him only as a source of revenue for yourself. You must provide what was promised. If you promise special offers, make sure you deliver. If you promise free helpful information, make sure you deliver.

You want your potential customer to find the information useful so that he will remain on your list and, one day, make a purchase or even several purchases from you. If you do nothing but send a sales pitch each time, he will quickly unsubscribe or, in the case of a physical mailing, begin throwing away your mailings without even reading them anymore. Again, you will have lost the sale.

Respect your non-buyers. Realize that they are potential customers. If you cannot make an immediate sale, plan for a future sale. Realize that you may already have sold your prospect on your product or service, and need to wait until the time is convenient for your prospect to make the purchase. Don’t lose the sale in the meantime by pressuring your prospect with a bunch of sales pitches or by allowing the prospect to forget about you!

Copyright 2008 TheThriftyEntrepreneur.com

Knowledge is money! The more you know about the products you carry, the more you can differentiate yourself from the competition. Marketers often talk of being recognized as an “authority” in your field, but the most important thing is to simply be knowledgeable enough to answer the questions of potential buyers as well as provide them additional useful information about your product(s). Here are five ways that you can increase your sales with knowledge.

1. Learn All About the Products You Sell - This goes for any merchant, but is especially important to online sellers. You need to be able to describe a product. By that, I mean not simply listing its features, but what does it look like? How does it feel? If appropriate, how does it taste or smell? Are the buttons easy to push? Is it easy to operate? Features are one thing, but hands-on functionality is another. You should be able to accurately convey what the product is like to use. For example, a can opener might work well, but if it is tricky to get the thing going, that’s something a customer would want to know. You can increase sales and reduce returns simply by being upfront with the customer about what they can expect.
2. Learn All About the Products Your Competitors Sell - Just like you need to know all about your own products, you should learn everything you can about competing products as well. Know how they compare with what you sell. Learn the advantages and disadvantages so that you are in a better position to inform your customer.

   Better Yet: Carry More Than One Brand of Product - If you carry a selection of competing merchandise, you can obtain those customers that shop for a specific brand name, rather than by features or advantages. But, more importantly, you can demonstrate the pros and cons of each brand’s product. Since you are in the either-or position, you are at an advantage over someone selling one particular brand in that the customer may see you as more honest and open as you can truthfully describe the benefits and drawbacks of each product because, whichever they choose, you still make the sale. The single brand dealer has to push the one brand they carry, which automatically brings doubt to the customer’s mind as to how true his statements are regarding that brand’s product.

   Of course, simply carrying more than one brand is not enough. True, it is enough to win the customers who shop by brand alone, but for the wider market, the undecideds, you need to be knowledgeable about the multiple brands and products in order to inform the customer of the advantages and disadvantages of each.

3. Know How to Use the Product - You should also know how to use the product you are selling. Even better is having actual hands-on experience using the product. This relates back to the first point of knowing your product thoroughly. For example, the Brand X can opener may work great but be difficult to get going and the Brand Y can opener may be easier to started but leave sharper edges on the can. Being able to describe both, especially in an eCommerce site, can help the customer better choose which can opener will be better for them.
4. Know How the Product is Being Used - You can get extra sales if you know a particular product works well for purposes and situations that are not immediately apparent. Naturally, you do not want to try to sell a product for purposes for which it was not designed to do nor for purposes which may be hazardous or dangerous. You must always be ware of liability issues in such circumstances. But, those are not the types of uses to which I am referring. For example, maybe a jar opener you are selling is a flat, rubber circle type with a gripping texture. Perhaps it might work well in a riding lawn mower’s cup holder to better hold a soda bottle or a water bottle in place. That’s something that may appeal to someone who is in the lawn care business and spends a lot of time sitting in the mower! As another example, athletic shoes were originally designed for, well, athletics, but later became popular as casual footwear. Knowing alternative uses for the products you sell can help you sell more of them by creating demand and need where there were none previously. If you hear of someone successfully using a product for uses other than those for which it is marketed, don’t be afraid to use that knowledge to increase your sales. Of course, always be mindful of liability issues in that regard! Don’t push uses that may be in any way hazardous or dangerous and especially don’t promote uses that may be illegal!
5. Know What Other Products Complement Your Own - Are there other products that work nicely with the one your customer is buying? For example, if they are buying a printer, they may also need extra ink, paper, specialty paper, cables, etc. Maybe the printer doesn’t come with a USB cable, which is needed. You can score one over the competition by offering a USB cable with the printer for a discount price or even free. Or, maybe the printer comes with a USB cable but you know from experience that the cable isn’t long enough. In that case, you might want to offer your customer a USB extension cable for a free or discounted price. Offer bundles or special add-on products with the printer that the customer may need. It’s an added convenience and it saves them a future trip (or shipping cost in the case of online orders) for items they may find they need later.

The bottom line is that you shouldn’t think of yourself in business as just to make money but rather to help other people improve their lives. By being more knowledgeable about your products and other products in the marketplace, you are in a better position to be of valuable assistance to your customers.

And that is what can really help your bottom line.

Copyright 2008 TheThriftyEntrepreneur.com

Often, a business owner will look at a competitor’s ad and try to duplicate it, using a cut and paste method. Sometimes, they will take an ad they like from an unrelated company and try to adapt it to their business. These efforts are often designed to please the entrepreneur’s sensibilities with little regard to how well they may attract a customer.

Frequently, the business owner will then proceed to run the ad in the local newspapers or other media, not because they believe that those are the best places to reach their customers, but more out of an ingrained belief that those are the places they should be advertising because that’s “where everyone else does.”

If they have any type of success with the ad, they will continue running it, never changing it out of fear of fixing what’s working. Or, if the ad is unsuccessful, they will conclude that such-and-such advertising just doesn’t work for them.

What most entrepreneurs fail to do is to advertise in areas most likely to reach that market, tailor their ads to appeal to their target market, and vary their advertising to test which advertisements give the best results.

Reaching Your Target Audience

If you are operating a family dining establishment, then mass market media, such as local newspapers, would be a good place to reach a wide audience. Everyone needs to eat, and many people read the paper. However, if you service and repair land excavating equipment, your advertising dollars would be better spent in trade and industry magazines.

You may also want to consider obtaining mailing lists of individuals and businesses that are likely to need your product or services and develop an advertising plan based on direct mail rather than running advertisements in other publications.

For online advertising, you’ll want to research the keywords that your target audience will be looking for, and optimize your website contents and advertisements to take advantage of those keywords.

Getting and Holding Your Prospect’s Attention

Your advertisement should be designed to grab the attention of the people who are within your target market. Many entrepreneurs will simply use a business name, a slogan and contact information, and rely on bold type or reverse print to attract attention. But, they often skip the step of holding on to their propect’s attention once they’ve got it!

Your prospect wants to know what’s in it for them. Why should they purchase your product or service? This is where larger ads, or direct mail pieces, claim the advantage over small ads that may be seen but are just as quickly forgotten.

Long text sells. Some people don’t want to believe it, but there is a reason you see detailed ads in newspapers and magazines, long one-page websites directing you to make a purchase and multi-page sales letters in the mail. The copywriter drags the prospect in, keeps him their and directs him to take an action, whether it is asking for a free sample or making a purchase.

It is not enough to get a prospect’s attention! That is just going halfway, and that is where many business owners end the design of their ad. They think that simply because the ad stood out on the page that people will be motivated to call the number. But, more often than not, they won’t be. If someone is looking for a plumber, and a particular plumber’s ad draws their attention on the page, he may be motivated to give that plumber a call. But, that’s only because the person was pre-sold on needing a plumber!

Where a person is not actively looking, they are not motivated to buy. Long text is frequently used to pre-sell them on a sale, to convince them to buy something they may not have otherwise known they wanted.

Note that this is not trickery. You’re not trying to fool someone into buying your product or service. What you want to do is convince them that your product or service is the one they need, that they should buy from you rather than the other guy and that they should do so now. And, you must do so with honesty, otherwise your profits will be short-lived! It took a lot of work to get a customer; it’s better to have a happy customer who will purchase from you again in the future than to have unhappy customers who will purchase but once, forcing you to rely continually on new customers.

Testing Your Advertisements

Again, business owners will frequently not touch a proven ad. They will settle for a predictable flow of inquiries rather than risk reducing that flow. But, without testing, you cannot know if something else will work better and increase sales!

In some media, testing can be hard and slow. Magazines and other periodicals that are released infrequently are more difficult and time-consuming to test. But, more frequently published media, such as daily and weekly papers, are easier and quicker to test. You’ll know much sooner the results of any new advertisement.

If you run ads in more than one local newspaper, you can run a different ad in each paper and see which ads perform better. One test, unless the results are spectacular one way or the other, may not be sufficient for making any determination of success or lack thereof. You may wish to run the ads for several days or weeks, depending upon the frequency of publication.

If advertising in just one paper, you may wish to try switching out ads on different days or weeks to see how the various spots perform.

If you advertise online, you can try different textual ads, different banner ads and even the content and appearance of your website. You could have the website slightly different for each visitor, and test which versions convert the best.

In all cases, be sure you utilize some type of tracking code so that you know which ad produced which prospect. Your online ads could utilize different referral IDs so you know where the clicks are coming from, your website could be coded to track the prospects and record which version they saw and your printed ads could each have a different code number, that you could ask the prospect for if they call or come in.

And, once you’ve got an effective ad, don’t stop testing! You may want to run that ad the majority of the time, but you’ll still want to keep testing other ads in a continual quest to keep improving and increasing your sales.

Testing will save you money in the long run. Imagine if your original ad had a 2% conversion rate but an alternative ad had a 4% conversion rate. You would have missed out on doubling your prospective customers! An ad that converts better is more cost-effective! But, without testing, you will never know!

If you haven’t been testing your ads, today is a good day to start! Take a look at your advertising matter, and see if you can think of ways to make it better. Then test, test, test!

Copyright 2008 TheThriftyEntrepreneur.com

It is important to bear in mind that, while Google and Yahoo quickly became businesses, they didn’t start out that way. Google began as a research project and Yahoo was a humble web guide. They both had an established audience and market before they became actual businesses.

For a startup business, is an unusual name really the way to go?

Let me throw an unusual name out at you: Frafnoo.

What does Frafnoo do? Is it an up-and-coming search engine? Is it a marketing company? Maybe it’s a company that makes environmentally-friendly packing materials for shipping containers?

The fact is, Frafnoo doesn’t really tell you anything. The entrepreneurs at Frafnoo will have to spend a considerable amount of energy, and perhaps a significant amount of money, to market Frafnoo and explain exactly what they do.

Some will be tempted to just put “Frafnoo” on all their business stationary and communications, leaving potential clients scratching their heads. If I’m looking for a car rental service, is Frafnoo going to be the first thing I look up? “See what Frafnoo can do for you!” I don’t know what Frafnoo does; why would I call them out of the blue? Maybe I don’t want to be stuck on the phone with someone trying to sell me shares in an oil drilling company!

It’s important that your business name give prospective clients some idea of what you do. It should also be something that doesn’t sound too out of place or too “out there” for your industry. Frafnoo might not be the best name for an investment firm.

That’s not to say that a good name cannot attract attention. If Frafnoo is your choice, you can use it, but don’t use it alone. Your best bet is to name your company something like Frafnoo Search Technologies. Or, Frafnoo Marketing. Or, Frafnoo Communications. Or even Frafnoo Pizza.

For a startup, you don’t want to have to spent a lot of time and money just to explain to people what you do. If your name gives some indication, that’s going to save a lot of wasted effort, not to mention time. People won’t be contacting Frafnoo Oil Drilling to inquire if you do dog grooming. They won’t be calling Frafnoo Pizza to order packing peanuts. Just choosing a descriptive name can save you a lot of marketing effort.

In the future, the day may come when Frafnoo Integrated Electronics becomes synonymous with cool electronic gadgets. The day may come when Frafnoo Home Appliances becomes synonymous with washing machines and toasters. The day may come when Frafnoo Search Technologies becomes synonymous with Internet searches.

And, if that day comes, you can always drop the description, and change your name to Frafnoo, Inc. But, until that day comes, your best bet is to have a descriptive name to inform potential clients what you do.

By the way, if you decide to name your business Frafnoo and become a multi-millionaire, a naming fee would be appreciated. $1,000 sound fair?

Have you frafnoo’d today?

Copyright 2008 TheThriftyEntrepreneur.com

Many businesses that fail never had a business plan. Many entrepreneurs think they have a plan, but haven’t written it down. “It’s all in my head,” they’ll say.

Alternatively, they may argue that their plan is so simple they don’t need to write it down. Their plan may be something like this:

1) Create product.
2) Promote product.

That’s it! That’s their plan!

Unfortunately, that’s not much of a plan. Online entrepreneurs are sometimes even worse. Since they are operating in the virtual world, they feel that cuts them some slack. Things change too fast online, they argue. They can’t write down a plan, because they have to be ready to change directions at a moment’s notice!

But, just because you commit a plan to paper (or even to an electronic document!) doesn’t mean that you cannot adapt and change it later on. You’re not tied to that plan anymore than you have to be.

But, having a plan does give you a roadmap and a direction to go. Let’s say you’re out for a Sunday drive. You head out and go. At some point, something catches your interest, and you decide to turn and go there. And so on, until later in the day, you decide it’s time to go home and head back. You had a fun and enjoyable day.

That’s how many people run their businesses. They like to have fun and enjoy themselves, which is okay. There’s nothing wrong with that! But, with a business, you need to have a clearer direction. You can still enjoy the drive, but you have to take certain roads and make specific turns in order to reach your destination.

Say, for example, you want to attend a friend’s party. You’ve never been to her home before. You’ve never even been to her town. How do you get there? Do you just head out and hope for the best? Or, would you ask for directions and a map? Maybe you’d use a GPS?

A business is no different. Maybe your goal with your business is to make a little extra money on the side, while still keeping your current job. Maybe you want your new business to be your new full-time job so you can quit what you’re doing now. Perhaps you want to earn enough money to buy a new house, a new car, put the kids through college. Or, maybe you want to be the best business of your type in town? Or in your state? Or even the country, or the world?

Whatever it is you want, you need to find a way to get there. You need to have a road map. That’s where your business plan comes in.

Let’s revisit your friend’s party. When you ask her for directions, do you write them down? Will you take a map with you too? Or do you just hope you’ll remember the directions? If you don’t write them down, even if they’re easy, what happens if you forget? You may have the best memory, but something may come up that throws you a curve. Imagine you remembered to turn right after Maple Street, left after Palm Drive and another right on Sequoia Parkway. But, when you get to Maple Street, there is construction and you have to detour to a right onto Pine Street. Now what?

With directions and a map, you could quickly find your way back to where you need to be. You may even find a quicker or more direct route to your friend’s home. Without the map and directions, you’ll be driving around looking for a familiar street. Maybe you’ll find Palm Drive. But, now which way do you go? You may find your way to Sequoia Parkway, or you may head off into the opposite direction. Maybe you’ll think you’re heading in the wrong direction and turn around only to discover you were going in the right direction to begin with but hadn’t gone far enough.

You see, it doesn’t matter how good your memory is. It doesn’t matter how simple your plan may be. What matters is that putting it down on paper forces you to draw out the road map for the success of your business. Your destination is your goal and your business plan is your road map!

Once you have it down on paper (or electronically), you have something to reference when a curveball comes your way. You’ll save time by not heading off into the wrong direction.

Let’s revisit the earlier example. Here was the mental business plan:

1) Create product.
2) Promote product.

Now, let’s update that with your friend’s party as an example.

1) Buy gift.
2) Go to friend’s house.

You see what you’re missing there? You know you have to go to your friend’s house, but how do you get there? Likewise, you may know you need to promote your product, but how will you do that? You might come up with a bunch of ideas, but will you remember them all? How much time each day will you set aside for a specific promotional method?

What if Google AdWords is the best way to promote your particular online business? And, social networking is a good, but secondary method? If you don’t write down your plan, you risk spending more time each day social networking while neglecting your AdWords’ campaigns, which would be to the detriment of your business! What was your business goal again? Was it a new house? Money for college? Or, was it installing a bunch of new widgets on your blog? It is easy to get sidetracked when you don’t have a written plan.

Do yourself a favor. Write down your business plan! Write down the steps you intend to follow to ensure the success of your business! Don’t rely on memory! Don’t rely on “it’s all in my head!” Write it down!

You’ll thank yourself later, when you’re driving that new car or relaxing on the back porch of your new home.

Copyright 2008 TheThriftyEntrepreneur.com

Business licensing is something that varies, often widely, from state to state and county to county within the United States. Plus, cities and townships and other forms of government may have their own regulations and requirements.

Do you really need a business license?

Of course, the proper answer to that is almost always “yes.” But, if you’re not planning on selling anything, and perhaps working simply as an affiliate or making money through ads on your site, or if you just plan to run your “business” as a hobby to hopefully make extra income, then you might be able to get away with not having an actual business license. And, if the aforementioned is true for you, in some areas you might not even be required to have a business licenses for that type of “business.” But, of course, check with someone local to you, such as an accountant or government official, for the right answer as it pertains to where you live and what type of business you want to be in.

Don’t forget that, even if you don’t have a business license, you still will have to report any income on your taxes! The potential downside of not being considered an actual business is that you won’t be able to deduct any expenditures. Again, you want to talk to a tax professional or your accountant about these things.

Having a business license will be especially important if you do plan on selling any merchandise. Many wholesale merchants will not sell to you if you do not have a business license!

Some enterprising people will just start operating their business, whether locally or online, without any type of business license, to save money while they try to determine what type of business might be profitable for them. Then, once a business takes off, they’ll get a license to be official. While you may be able to get away with this, it is perhaps not advisable from a legal or tax point of view.

In most cases, a business license is fairly affordable, depending upon where you live and what you consider affordable. Also, it is usually straight-forward. You’ll probably just need to fill out a simple form, write a check and that’s it! It’s usually an easier thing to do than what you may expect. Again, the best thing to do is consult with someone locally who knows all the local requirements, as well as state and federal requirements and who can also advise you on tax issues, including sales tax requirements. It sounds like a lot, but it is probably going to be the easiest part of starting your own business, so don’t let the fear of paperwork stand in your way!

You’ll also want to give due consideration to your business name, but that will be a subject for another post.

Copyright 2008 TheThriftyEntrepreneur.com

If you are among those people, The Thrifty Entrepreneur is here to help! I’ll explore different ways you can save money, present interviews with entrepreneurs who have been there and done that, and more!

Please join me tomorrow, Tuesday, July 15th, as I present the first in a series of articles designed to show you how you can start your business on a small or limited budget.