Keep Expenses Down

The biggest expense of any business is payroll. Don’t hire people until you absolutely have to! In fact, don’t put yourself on payroll until necessary. Business owners should only get paid well after the business is profitable and self-sustaining. The best way to start your business is on the side of your existing job. I am not saying that you should take time away from your current employer, but there is a lot of time available during nights, weekends, and vacations to get the business going in the right direction.

If you are going to have a business partner or two, then they should be able to stay off the payroll as well. Because it is necessary to have sales, technical, and financial skills in the company, and a group of three people is more stable than a partnership, I recommend having two business partners. Get them to work the business on the side as well. When it makes sense, have one of the partners start working full time, then add the others when you can afford to.

Keep expenses low in other ways by not getting an office, sharing living quarters, and otherwise being frugal. The less cash you burn every month, the longer period of time you will have to get the company going. It can be tempting to rationalize that you need an office, or nice furniture, or have to buy new computers, but don’t. Instead scrimp, save, and meanwhile work your butt off to get some revenue in the door and service your customers above and beyond their expectations. It will pay off down the line.

Even though it is tempting to offer equity to people that you hire, I advise against it in just about all cases. Instead, try to find the underlying reason they are asking for it. Some people think it will let them have a say in how the company is run, and you can explain to them that they have a much bigger impact by doing their job well and taking on more responsibility. Others think they will get a big payout if the company gets sold, and you can explain to them that if they are looking for a big payout, you can structure a bonus or commission plan that would get them a big payout sooner. The only time you may want to consider offering equity to an employee is if they are a proven rainmaker and they can bring your company a lot of business quickly, and you can’t afford to hire them in any other way.

Bring in Revenue Quickly

A functioning business has to have cash, and the only self-sustaining way to get it is to have customers buy from you. Every owner has to be a salesperson, and the owners need to be annoyingly persistent in turning up revenue from everyone they meet. But don’t alienate your friends by trying to sell to them, since you will either run out of friends or prospects quickly. Instead figure out the best market that needs your product, and go after it with a vengeance.

Startup companies are very hard to compete against when they are in initial growth mode. Their expenses are low, and they are looking to gain customers any way possible, so in many cases they are able to offer better service at a lower price than established businesses. While you are a startup company, take advantage of this by explaining to your customers they will get a good deal because you are looking for reference customers, and you do not have the same management and infrastructure overhead your competitors do. But charge a fair price and as much as you can get away with so you can be as profitable as possible, because you need those profits to grow.

Use Other People’s Money

Besides revenue from sales, there are two ways to get money – equity and debt. If at all possible, stay away from equity funding, because it is bad for you. Even though there are many tales of startup companies making the rounds of friends and family, angel investors, and venture capitalists, I tell you from experience to stay away from all of them if you can.

Unless you are already running a profitable business and you can dictate the investment terms, each one of those sources of funding are going to want an unreasonably large ownership percentage of your business. The best way to get an initial quantity of cash to put in the bank is to have the owners who are working in the business pony up a cash stake, and do not take money from anyone who is not going to put their fortune at risk and be part of the crew working 20 hours days to make the company a success.

Debt can be used intelligently to help the business grow quickly. First off, understand that as a new business, you are going to get zero credit without signing a personal guarantee. Second, since you have no business history, your business will get maybe a few thousand dollars in credit. So the only way you are going to be able to get your hands on enough borrowing capacity to be useful is with your personal credit. A proven way that works is to take out as many credit cards as possible while you still have a job at your employer – you will still have that credit available when you start working full time for your startup.

But don’t use debt to fund continuing operations like payroll, rent, or other things you can’t afford to fund out of cash from operations. Debt should be used to buy products that you resell to customers. Don’t even buy inventory with debt! And only buy products after you have a purchase order from a customers. Furthermore, any terms you present to customers should have them paying for at least half the equipment and services up front, and for all of the product once it is delivered to them at their location. In this way the amount of debt taken on is equal to or less than accounts receivable, which means the company essentially remains debt free.

If your industry supports it, buy your products from a stocking distributor. Even though there may be multiple distributors, develop a good relationship with one that will help you out. Distributors can offer much more than products and a line of credit – they can offer advice on what markets to go after, what products are up and comers, and what areas to stay away from. Vendors and distributors want to see your company succeed, and if they can help you get bigger faster, it is a good thing for them. If you get a big order, and don’t know how to swing the credit needed to purchase product, distributors have many creative ways to help you get that done because they want to see you succeed.

Establish a relationship with a local bank branch that is small business friendly. Make a point of finding out who the small business account specialist is and getting to know them. Share your plans with them, and start a small line of credit with them, even if it has to be secured by your deposits. Over time that relationship will grow and blossom, and if you need something, you will already have built a base of trust and a track record of reliability, so they will be willing to listen to you and maybe even help you.

Don’t Run Out of Cash and Don’t Give Out Equity!

Just because you own a business, it does not make you special. Many people assume business owners have money, but don’t realize that in the first few years of a business all profits are plowed right back into the business to help it to grow to a survivable level. Make sure you are growing the top line revenue while minimizing expenses so you can keep that reinvestment going. Always add to your debt capacity whenever you can, and remember that you distributors, vendors, and banks want you to succeed, so they will help you out if you share your plans with them and get them to buy into your vision. And don’t give out your hard earned equity to anyone!

The market is the group of people that can become customers. If the market is everyone, then it is not a viable business idea.

The best ideas have a very narrowly defined set of potential customers that are their ideal targets. If the ideal target can be serviced well, then subsequently the product of service can be altered to broaden the market appeal. But is it best to go for the most likely customers first.

A market that I am a customer for is youth sports. I have three girls that are gymnasts and a boy that is a soccer player, and they are all in club sports. The costs for these sports is more than I care to add up every month. But those costs make me an ideal target for products and services that can help improve my kids’s chances of success.

One of the most innovative products I have purchased is an audio course that is supposed to improve mental toughness for youth sports. It is a good product, and if it can help my kids to get the extra edge they need to win, it is worth it. The interesting thing about the course is that there is one for each individual sport as well. I believe the owner started with gymnastics or figure skating, and once he saw there was interest, expanded it to all other youth sports as well. I love seeing success like that!

The next thing look for is competition. If there is already a way that the need is being fulfilled, that is good! That means customers see value in the product or service and are willing to pay money for it. It is much easier to better serve an existing need than to try to try to convince people to buy something they are not already spending money on. The need is always being addressed in one way or another. If you can come up with a way to service a small part of the market better by being more innovative, focused, or persistent, you can succeed.

There was already a way for youths to get better at the mental aspect of sports. There were coaches that would help and inspire children. There were psychiatrists that could help people think more positively about themselves. There was definitely a need, and what was even better was that the need was being imperfectly addressed, with either a lack of availability or a price that was too high.

The great thing about the Internet is that it allows for addressing markets that are not just local. It could be difficult to be a mental toughness coach for elite youth sports in just one city because there might not be enough customers. It also difficult to scale beyond the consulting limits of what one person can accomplish in a day. However, by taking that experience and encapsulating it into a different format, it creates a new product. All of a sudden, a new market opens up.

The more you know about something, the more complex it seems, and the less you know about something, the simpler it appears. The truth is, everything is complicated. That’s why it is best to stick to something that you know well, and have learned about in the thousands of hours of life experience you have put into it. Don’t start a business in an area you know nothing about, because it really makes it hard to succeed. Take a fresh look at the way things are being done in your industry, and come up with at way to make a portion of it better. Analyze that portion well, and if it makes sense, then build a business plan around it.

For those of you that have asked, the youth sports mental toughness program I used as an example is called Competitive Advantage by Dr. Alan Goldberg.

One of the most defensible businesses is a combination of product and specialized service that works with local customers who have a need. Retail examples are dry cleaners and restaurants. They each have special equipment like steam boilers or kitchens, have some level of consumables like dry-cleaning fluid or food, and expertise in the staff that make them into good, stable businesses. Although these are good businesses, they are not ones that I would choose to start. There is a lot of competition, profit margins are low, there is a lot of management involved, and there is no clear path to making enough money to fast growth. The combination of product and expert services with local customers is a good one, but it has to be in a more profitable arena.

The things I look for in new business ideas are the following:

• Combination of product and service.
• Clearly and narrowly defined customer base that is willing to spend money.
• Ability to create a barriers of entry to competition.
• Repeating sales instead of one-time sales.
• Customer acquisition and servicing cost low versus profitability.
• Future growth prospects.
• Initial investment of capital and time.

It is also very important to know your own interests. Again, with a whole world of business ideas to choose from, you should pick something that you enjoy and already have an interest in. There are ways to make money in just about anything. If your interest is music, then you should start something involving music because it will be fun and you probably know what musicians and music lovers want and need. Don’t make things hard on yourself, but also don’t go down the path of mediocrity. It would be easy and simple to take a job as musician or music instructor, but that is just a job. It is harder yet much more rewarding to come up with an unfulfilled need and meet it.

• Know your own interests.
• Think about unfulfilled or poorly filled needs.
• With constant technology change, are there new and better ways to do things?
• Is there a new business concept in a similar industry you can copy?

Instead of striking out new in an entirely unproven direction, take stock of what you already do on a day to day basis. Some of the most successful new business were started by employees that saw an opportunity to address a profitable niche and were frustrated by their company ignoring it for so long. There are many great things about leaving the company that you work for and starting a niche business in the same industry, especially if it does not compete with your current employer:

• Existing base of potential customers that you already know.
• Your industry reputation will help you succeed.
• Focus on niche market allows for clear definition of mission.
• Potential partnership opportunities with companies in your industry.

After coming up with your idea, there are many things you can do with it. Realize that it may be valuable, so don’t go around telling everyone that you are going to do it. Conversely, realize there are few people out there who are willing to take on the risk of starting a new business, so you can discuss the idea in general terms to test the waters. Then see if there is already somebody doing this, whether it is in your market or somewhere else. If it still seems like a good idea, start running through the profitability numbers. If it still seems like a good idea, great! You can start making preparations and plans to take it to the next step.

Author: Rolf Versluis

Posted: Priority Cue

Cisco has a reputation as a great marketing organization, but with my years of experience selling Cisco products I have to disagree. One of Cisco’s new and fabulous products, the Cisco CIUS, epitomizes that experience. Maybe the space I sell to, the midmarket of 200 to 2000 users, is not the target of Cisco marketing, and the things I have seen are inconsequential to Cisco executives. But so far, I am very disappointed that most of the customers I have talked to have never heard of the Cisco CIUS, even though it was first announced over a year ago.

Cisco is focused on their core solutions of networks, collaboration, and virtualization. Those are all great areas to focus on because they are fast growing, have good margins, and Cisco has product leadership. The confluence of these areas is the Cisco CIUS, which is pronounced “see-us”, and I believe is intended to indicate that it is a video collaboration device, which it is. But that is only a small part of what the CIUS does.

I have been on many sales calls in the last few months to see how my company can help organizations address business communication issues and concerns. Top of mind is business agility, mobility, and how to make existing employees as effective as possible. Companies are working to figure out how to use tablets, desktop video, and communication as effectively as possible. One of the concerns local governments and regulated business have is data security, because if there is a loss of confidential information it can lead to many issues. The security concern is a big issue and is not something that is part of consumer devices like the iPad or Android tablets. Tablets, however, are so handy they are making their way into the workplace regardless and have to be accepted.

So when I tell the technical and business people that I meet with that Cisco has a secure enterprise tablet that is Android based, provides corporate control of the App store, and includes strong network security protections, they are surprised. When I go on to describe the additional features of the Cisco CIUS, they are astounded.

I have had quite a few customers tell me that they have never heard of the Cisco CIUS, and it is distressing to me that Cisco does such a poor job getting out the message about their products. This is unfortunately not an isolated occurrence, because I have had this same conversation many times with customers about various Cisco products like Cisco TelePresence video, servers that are part of the Unified Computing System, and Nexus core switches. It is unfortunate because it slows down the adoption of the technology when the customer has to validate what an engineer from a reseller says and is not already informed and excited about the products.

The CIUS is not only a secure Android tablet, but it is a full standards based 720 p HD video conferencing endpoint with cameras front and back that hooks into a Cisco Unified Communications phone system or the Cisco TelePresence video infrastructure. Even better, when the tablet is in its dock, it is a Cisco IP phone that works as part of the corporate phone system. Furthermore, most companies have a Virtual Desktop pilot or small rollout. The Cisco CIUS can run VMware VIEW and Citrix HDX Receiver, so the CIUS can be a VDI client. Add in that you can plug it into an external monitor with VGA or HDMI, and can connect a mouse and keyboard by USB or Bluetooth, and you have an amazing device!

Cisco CIUS’s one current drawback is that it is only available in a 7″ form factor. I am on my way to attend the Cisco Collaboration Summit, where I expect that Cisco will be announcing new versions of the CIUS in the magical 10″ form factor. I am typing this on my Samsung Galaxy Tab 10.1, which is the perfect size tablet for getting things done.

I am excited about being able to bring these types of solutions to customers. I hope that with the new marketing leadership at Cisco there will be changes and they will spend more time getting the word out about their products and solutions in innovate and effective ways. The products are excellent, work together well, are secure, and are supported well so organizations can be confident in using them. The Cisco CIUS is an opportunity to get marketing going in the right direction.

Author: Rolf D. Versluis

Posted at: Priority Cue

The problem is that search engines like Google don’t like duplicate content. If you take the same exact article and post it on your blog and ten different article directories, you have a problem. Google will see that as duplicate content and instead of giving you credit for 10 unique links with relevant anchor text pointing back to your website, you will only get credit for one. You could hand-edit each article that is posted to a different directory, but that starts to get ridiculously time consuming.
This is where Article Spinning comes into play. In every article that you write, there are many words and phrases that can have other words and phrases substituted for them. If there was a way to set up an article so that a computer could automatically pick a phrase choice among many, then the computer could help you create as many unique articles as you desire. Each of these articles could then be posted on article directories, or onto your friend’s websites, and you would get search engine credit for each one of them because they were unique!

The type of text that is created when setting up an article to be spun is commonly called spintext. Here is the same sentence written in spintext:
The {kind|type} of {words|writing|text} {that’s|that is} {written|created} when {preparing|setting up} {a blog posting|an article} to {have {different|unique} versions generated|be spun} is {usually|commonly} {termed|called} spintext.

That’s it! For every word or phrase that can have a substitution reasonably and grammatically replaced, just add the braces and pipe to the word sets, and it is ready for spinning. The example above was especially dense – just spinning a few words or phrases per sentence is usually enough. Make sure to think about where spaces and punctuation is going to go so it looks good in all versions. It is helpful to have additional titles and resource boxes as well.

After your article has been prepared in spintext, then you have to actually get it spun. There are applications that can be purchased, downloaded and run on your computer, but we live in the age of cloud services, so I recommend you find a cloud service that can take the spintext and create articles for you. At that point you will have many different unique articles that can be posted on many different directories which will help improve both your search engine ranking and your readership.

Some words of caution, though. Don’t use automatic spintext generators unless you want your article to read like foreign sounding gobbledygook. Also, make sure the spaces before and after the braces and pipes are done properly, or else words will be jammed together or separated by too many spaces. Read the output of the article spinner a few times, and run a spell checker on the output, which quickly finds words that are stuck to each other.

After seeing the results of the process, and posting unique articles to different directories, most people want to refine and automate the process. This forks into two different directions. One is to find the best keywords to optimize the articles and anchor text for, because if you can get the article title, the article url, the keywords, and the anchor text on tens or hundreds or backlinks to all be in synch, then you will have an article that has the possibility of coming in on the first page of the search engine results. I say possibility, because if the keywords you select are highly competitive, you may actually have to have many hundreds or even thousands of links back to your website to rank on organic search. Selecting keywords that are relevant, popular, but not too popular is an important part of the campaign. There are some good free tools available on the Internet to assist in keyword selection.

The second desire of most people at this point is to automate the article submission process, and get the unique articles posted on many different article directories as well as individual websites in the blog section. This is very worthwhile, but it usually costs money. For a small business or a brick and mortar business, this monthly cost is minor compared to any other form of advertising, and is about the same price as taking a customer out to lunch. I use two of these services, and they do both the article spinning and submitting in one fell swoop.

For each article I write, I can create a spintext version and get it submitted using the services in about an hour. I send out a few articles a month this way; I would like to use them more, but many of the articles I write are somewhat technical in nature, and they are specific to my business, so I do the best I can. I still consider the services a bargain, and the ones I use are listed in the Internet Marketing Resources section.

Artice Spinning is a very effective way of increasing traffic to your website and getting onto the first page of search engine rankings. It allows you to take the unique content that you are already creating and put it to use in a very effective way. Taking a good article and setting it up to be spun and submitted to hundreds of websites will give you powerful backlinks from pages that have unique content, which is exactly what search engines like to see.

About 18 months ago I had my company’s web page rebuilt on a WordPress platform by a talented web development company. I wanted it to have a good structure and be extendable so that I could add pages and news items myself. They did an outstanding job, and I was very happy. I started using a couple different tracking methods to see how much websites traffice I was getting. I used the plugin Statpress on WordPress itself, as well as Google Analytics. As my company’s website grew in size and I used the techniques I have written about in the Internet Marketing section, traffic grew gradually. I expected that we would start getting phone calls or email inquiries about our products and services, but was disappointed day after day. Over a 6 month period we got maybe one or two calls and emails that led to some small opportunities. It seemed like what I was doing was a waste of time. Traffic to the website was growing but it was not leading to increased business. To both me and my sales managers, it looked like this exercise was a waste of time.

We spend a lot of money on marketing trying to bring in new customers. If I could take the work that was done on the website and start generating leads for our salespeople, it would be worth it at any reasonable price. What I found was so much better than I was using, and cost much less than I expected, so I put it in place right away. I am sure there are other analytics tools that are available that are just as good or better, but what I found let me do exactly what I wanted to do get done, because it led to real leads from local businesses.

Prior to this, I had tried running some different reports on Google Analytics, but could not really get anything useful out of them. According to both Google Analytics and Statpress, I was getting about 1500 unique visitors per week on my website. Surely some of them must be from local companies that we wanted to do business with! I tried getting reports on visitors from my home state, but it was not really useable. Frustrated, I started searching for a reporting tool that would let me look at just the people in Georgia who were visiting my website.

After I put in the new analytics tool, I started looking at the visitors logs. From them I could see what search terms people used to find our website, what pages they went to, and most importantly, where they were from. For example, I could look at the last 7 days at every web site hit from anyone in Georgia. Furthermore, the analytics tool would track what pages on the website they went to and how long they visited my website. Some of this information helped me refine pages on the website because I could see they were more popular. I also learned how to spot whether someone was looking for a job (went right to the careers and jobs page), got to our website by accident (one page looked at only), or was genuinely interested (looked at a few different pages, went to the About page, went to the Contact page). Unfortunately, instead of the 1500 unique visitors I thought I was getting per week, it was more like 700. Still not a bad number, but real analytics tools appear to do a better job of tracking the visitors as they make their way through the website.

Since we do a lot of business in Georgia and Florida, it was those two states that were of interest to me. When I narrowed the search to the either one of those state regions, the information I got was a lot more useful. Out of the hundred or so daily visitors, every day there would be a about twenty that visited the website from a network that was identified by name. Many of those were existing customers, or people we were just starting to do business with; at least it was reassuring that they were reading all the content I had poured all that hard work into! About seventy percent of the visitors were from Bellsouth, Comcast, Verizon, or other companies like that, indicating that they were from small office or home users.

Every day, though, there would be some visitors from companies we had not done business with before, and they looked through the website in a way that indicated they were interested in our products and services. These companies merited further attention. For each one of these companies, I would go look at their website, and see if they fit the profile of a good potential customer for our services. On average, about two or three a week would fit the profile that I was looking for. I would send these company names to our sales team, where one of the salepeople would get the lead. They could then look up the company name and get the contact information for the right people at the company to call. This has given us one or two good leads every week since we started this process.

Looking through the analytics tool when filtered by state works really well. Some other things that I discovered going though the full logs, however, made me doubt that sorting by state was a good idea. What I noticed was that some Georgia customers would access the Internet through a completely different state – sometimes a different country! These are the types of companies we especially want to work with, because larger companies tend to have offices in many locations. As I learn the analytics tool better, what will probably make sense is to come up with a special view that will filter out all the service providers and just show the businesses and government networks that I am interested in.

The work put into the website and Internet Marketing turns out to have been worth it so far, and I will continue the process. It just turns out that the expected way of seeing results are different in the business to business world. Results are not measure in online sales, or in the number of people who fill out a contact form, but in leads that have to be gained through analyzing web activity. I am able to get a few good leads every week out of our website by looking through the information provided by the high quality analytics tool that I am now using. Internet Marketing works, and just like regular marketing, results have to be measured and quantified. So far, the quantity of good leads turned up has justified the work done both on the website and in ranking for specific keywords on search engines.

Just like any other purchase, I recommend that you evaluate a few different products before making a purchase. The analytics tool I use on my main business website is listed on the Priority Cue Resources page.

Over the last year I have spent a bit of time working to learn how to maximize the capability of people searching Google for information to bring those people to me. I want to share the results of that work with you so you have an additional channel to bring business to your company. There is more detail what to do on my website Priority Cue, but the basics are:

1. Set up your own website using wordpress as the website content management system at a hosting provider like bluehost or hostgater.
2. Post some good basic information about qualifications, what you do, and success stories.
3. Start writing short 300-500 word blog entries. I thought for a while that this would be good enough, but it wasn’t, since I would only get 3 people a day reading my material. It is frustrating to put hours into a good article and have very few people read it, so take the next steps!
4. Take the blog postings that you create and publish them in online directories like ezinearticles.com and articlesbase.com. Make the article informative, then at the bottom in the resource box put something catchy that will lead people back to your website for some more information on the same topic. Look at this example of an article leading to a video on my website that I did: http://ezinearticles.com/?Avoid-Powerpoint-for-Effective-Communication&id=6526812.
5. Create an article a week, and post them all into the same subject in the article directory. After a few months you will become listed as a top writer in that area. Here is my Expert Author listing on EzineArticles where I write about VoIP and other technical topics: http://ezinearticles.com/?expert=Rolf_Versluis

This article writing campaign then becomes the launching pad for a few other efforts:

1. Getting ranked into the top ten search results on Google. For every article you write, you can make the link back to your website highlight the anchor text that you want to see results for. Do this on a consistent basis and you will start showing up in search results for that text. This is just the tip of the iceberg on this technique, since it helps to work on getting ranked for keywords that people actually search for but are not too competitive. One of the search terms I keep working on getting ranked for is “Cisco phone Atlanta” and if you do a google search you would most likely see that Adcap Network Systems is still on the first page for that set of keywords.
2. In addition to creating articles, you can also create short videos on some of the more popular topics. The videos make great ways to bring people back to your website from the articles, and if you upload the videos to youtube you can embed them easily into your wordpress based website. I have found that after doing that, people start subscribing to your youtube channel as well, so youtube becomes another point of entry to your website.
3. Becoming known as a subject matter expert and authority on your topic. After you have created tens then hundreds of articles on a topic you will start showing up on searches when people look for experts in your area of specialization.

Some lessons learned as I have done this over the last year:

1. If you are going to have a couple different focus area, you can set up different websites for each. Don’t do too many! I have found that two or three are the maximum that you want to do. The ones I maintain are:
   1. Adcap Network Systems Tech Tips as an Adcap Technical Blog.
   2. Geeknick for data and networking blog.
   3. Priority Cue for small business internet marketing.
2. Don’t use Google Adwords! I think I blew through about $8000 last year trying to get new business for Adcap using Google Adwords. It was all wasted money. There are people that use paid search advertising effectively, but I would recommend staying far away from it for a long time.
3. Use a good website analytics program to figure out what is working and what is not. Google has a free one that can be enabled with a WordPress plugin. That works well for many people. I ended up using a paid one, and it worked a whole lot better.

Keep your end goal in mind of promoting your own business. It is interesting and useful to learn the techniques of people that do Internet Marketing and Affiliate Sales as a business, but unless creating an online affiliate sales business is one of your goals, keep the online marketing techniques focused on your existing business.

One thing I learned from my brother who is in the music marketing business is to maximize all channels of revenue creation. He works with bands to do this, and is really good at getting multiple revenue streams flowing from the same content. In the music business it is live appearances, T-shirts, DVD’s, record sales, music downloads, and all sorts of other things. Just because your main business is business consulting, there is no reason you can’t take all that hard work and make a video series or self-published book that you can sell online. Becoming known as an expert in this area and having a website that gets a lot of traffic will help you sell those products when you have them ready.