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The SBC Small Business Newsletter

presented by the Peak Small Business Center

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July 20, 2002

Table of Contents

 

Welcome

Quote of the Week

Administration

Featured Resource - ELANCE

Staff Article - WRITING AN EFFECTIVE BUSINESS PLAN - PART 3
Marketing Tip of the Week

Guest Article -  UNDERSTANDING THE FLOW OF INTERNET TRAFFIC, TO ATTAIN WEBSITE TRAFFIC - PART 2
Parting Comments

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Welcome

Thank you for subscribing to the Peak Small Business Center
Small Business Newsletter!

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Quote of the Week

How old would you be if you didn't know how old you were?

- Satchel Paige
 


Administration


WE STILL NEED YOUR FEEDBACK!

We're going to keep the following addresses here for awhile for those of you who have home businesses and might be interested in receiving a "home business" version of our newsletter. Please let us know. Many of you have responded, but we know there are more of you out there who operate home businesses and would find more relevant information in our home business newsletter than in this one. A simple blank email will do, as follows:

mailto:s2home@peakconsultinginc.com - to switch to a home business version and unsubscribe from the small business version.

mailto:both@peakconsultinginc.com - to receive both versions of the newsletter.

We anticipate the first mailing of the home business newsletter will go out next week!

 


Featured Resource

Elance

Need some work done and need it done as inexpensively as possible? Write up the project and let professionals fight over it, bidding the cost down as they do! Whether you need a business plan, marketing plan, an advertising campaign, a new website, a logo, or just about any other business service, Elance provides a terrific resource for getting things done inexpensively.

http://www.elance.com/rfp?rid=B1ZL
 


Staff Article

WRITING AN EFFECTIVE BUSINESS PLAN - PART 3

by: Cary Christian

Last week we discussed the all-important Executive Summary. This week we'll continue on with the meat of the business plan.


DESCRIBE YOUR BUSINESS

You described your business briefly in the Executive Summary, now you are going to describe it in detail. Describe how your business is organized, where your offices are located, how you operate day-to-day, the products you sell, and so forth. This section should be relatively easy for you to complete.


INDUSTRY ANALYSIS

Some readers of your business plan will not be very familiar with the particulars of your industry. You will need to educate them.

Other readers, such as a venture capital specialist in your industry, may be nothing short of an expert in your industry. You will need to prove to this person that YOU know your industry.

If you can write this section and gear it toward your reader's level of knowledge, all the better. If you don't know your reader's level of knowledge of your industry, you must write it as if you are educating someone totally unfamiliar with the industry in which you do business.

Every industry has its own unique characteristics that differentiate it from others. You need to display a thorough understanding of these characteristics and how they affect your ability to operate profitably. Point out factors that create risk and explain your strategy for minimizing these risks. Point out factors that create opportunities and explain how your strategies will exploit those opportunities.

You'll need to do plenty of research to properly prepare this section. You should know and present representative gross profit and net profit margins earned by companies in the industry. Explain how the distribution channel works. Include charts that show the size of the different competitors in the industry and other information that helps define your competition.

How do advances in technology affect market penetration in your business? Is there a chance to dominate a segment of the industry by pioneering technological advances like American Airlines did with the Sabre reservation system? If so, are you and your competitors all working on such technologies?

A lot of people think the industry analysis section is just fluff. It's not. You can gain a lot of credibility with your readers in this section if you exhibit a thorough understanding of your industry.


MARKET ANALYSIS

At first glance, one might think the industry analysis described above is the same thing as market analysis. They are strongly related, but not quite the same.

In your market analysis you are going to build on your industry analysis and take it a step further. You're going to discuss the positioning of your products in the market, pricing strategies, and how your products compare to your competition's products. You're also going to give demographic data that has an impact on your product sales.

For example, let's assume you are selling to small businesses and your target market comprises five major metropolitan areas within one state. You should provide data on the number of small businesses within those target markets and data regarding their normal usage of products like yours. In other words, you are attempting to quantify the size of your market in terms of potential customers and potential sales including repeat sales.

This type of research is very difficult to do properly. But doing it will teach you many things. You'll learn much about the market that you never realized, hopefully giving you more ideas on how to penetrate the market and where your emphasis should be placed. You may even find you should abandon a specific territory based on your research.

In defining your markets in this manner, you don't want to just borrow some verbiage from a chamber of commerce type site and throw it into your plan. Get the raw data, preferably from several different sources, analyze it, and draw your own conclusions based on the data. A lot of your competitors for funding won't be so thorough and this will give you an edge.

If you can afford to purchase this data from a market research firm, that's great! It will make your life easier. If that proves to be too expensive, you'll have to do the research on your own.

You can start with census data. There's a lot of good, detailed information available. Most metropolitan areas or counties will also have websites where information on the number of businesses, business types, and business size can be gathered. Check out regional magazine websites that focus on the business and economy in your target markets. They often provide this type of information at least annually. Trade publications offer you your best shot at getting an estimate of the market size for your products in dollar figures. From these sites alone you should be able to gather enough information to create a professional representation of your market.


A CAVEAT

If you are using your business plan to raise equity funding and there is fierce competition for funding in your industry, you may need to seriously consider obtaining your industry and market data from a market research firm. If your competition is using professional market research data, you do not want to be outclassed. But I suggest you also do your own research as well. Analyze it in light of the data provided by the market research firm and try to find ways to use it to make the data even more specific to your business. Find every angle you can to gain an advantage.



Copyright (c) 2002
 


Marketing Tip of the Week

If you're looking for a new product to sell online, whether it's your first product or just something to complement your existing product line, don't think in terms of the product! Instead, find a MARKET that's not being served or one that has a "hole" in it (a niche you can fill). Do a little research and find out what people are buying a lot of and find a way to create a better product or one that provides benefits not easily found in the market. Look at ads in magazines, top download sites, top ranked websites, and use some of the free keyword analysis tools we've told you about in previous issues to find out what people are most interested in. It can take a great deal of money and lots of time to develop a market. It's much simpler and vastly more profitable to find the market first, then develop your product.
 


Guest Article

UNDERSTANDING THE FLOW OF INTERNET TRAFFIC, TO ATTAIN WEBSITE TRAFFIC - PART 2
 

So how do you get more than the 3 hits a day that the average website gets on the internet? You must understand links and their importance to traffic. Traffic is what feeds e-commerce, business-to-business or any Internet website for that matter and links are our signs and roadways, for visitors and robots alike, to find our sites and easily visit them. Without links, pointing to you and away from you, you are nothing.

The world is not flat, like some visionaries of old screamed.  It's round, as modern day thinkers found. In the case of the internet it's multi-dimensional. Each point in space, like a planet floating in space, is virtually the same distance from each other where time and space doesn't matter, when traveling from one-to-another.

That sounds like a futuristic story in another space-time continuum. Perhaps we need to use cyber-space as an explanation and use reality, as an analogy, while explaining how traffic flows through the Internet.

Each website could be like a planet, a point of space in this cyber-space, not limited by time and distance. A click from one, instantly whisks you to another, similar to possible conveyances of the future, causing traffic to flow from one-to-another.

The traffic from point-to-point or planet-to-planet happens along established link paths, with the larger websites, having more links pointing to them and away from them to other websites. The largest ones, like massive terminals, routing the travelers to the knowledge they seek. These websites link to others of like kind. Where Themes match and knowledge is similar to what the quester of knowledge is looking for. This is natural, where 'like' links to 'like'. To build traffic to our sites, we must began to build these terminals. These Link Way stations need to be link pages of nicely organized information.

When I am surfing the net, I save the kinds of websites containing content and links that I am looking for, into my Favorites folders, thus creating my own personal Link Directory. When I use my favorites, I am using the linking nature of the web to find new websites that I am looking for.  My favorites, over time, become a personal Link Directory,
organizing websites, many that have link directories of the knowledge I want.

Once I have enough of these favorites, I stop going to the search engines for knowledge on these subjects because the knowledge I now have is specifically tailored for my needs. I'll only go back to the search engines when I'm researching a different Theme and start the process of collecting my Favorite links, but only if I can't find what I'm looking for, through links stored in my Favorites.

I think most of us use the Internet in this fashion, don't you?  Don't just rely on a listing in the phone book to send you business. Having lots of signs pointing to your website and a clear easy path to it, will insure the thousands of new visitors will finally arrive.

-----------------------

Content has been reprinted with permission of the author. First appeared in http://www.cyber-robotics.com, 1999-2000 David Notestine, all rights remain with author.

Check out David's terrific product, Zeus, and get your link strategy into high gear and your traffic numbers soaring!

http://www.peakconsultinginc.com/zeus.htm
 


Parting Comments

We hope you have enjoyed this issue of the Peak Small Business Newsletter and found it useful.  Please visit our website at http://www.peakconsultinginc.com to check out all the resources we provide. 

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