Monthly Archives: July 2016

Should to knows before expand your business

Business Expansion: It Can Be Good, It Can Be Bad…

Most business owners hope their business will grow and be successful. Others want to remain a one person business. They left their previous jobs to start their own business so they would no longer have to work for someone else.

In addition, growth can generate a whole new set of problems that most business owners don’t’ want to deal with.

With growth goes more responsibility. Sometimes employees that were able to handle certain levels of business are overwhelmed by the new load of responsibilities. And so are you as the owner.

Now instead of your little one person operation you have; delivery people, a part time bookkeeper, two or three full time employees, someone to answer phones and take orders and counter people or outside sales.

In addition to that add; absenteeism, employee benefits, vacations, profit sharing plans, payroll taxes, higher overhead and increased liability insurance.

Next problem; communication. With one or two people a quick meeting has everyone of the same page. With multiple locations a “team meeting” becomes a logistic nightmare to get everyone together at the same time for information to be past or training to be done.

Last but not least; This business is your dream. It’s not your employees dream. They have their own dreams that don’t include you.

What Are The Business Expansion “Triggers” You Should Look For

How do you know when the time is right to kick the business into high gear? Or, to use a much overused expression, when to take the business to the “next level?” Are there signs to watch for to let you know when the time is right?

Here are some of the most obvious:

  • You can no longer fill customer needs in a timely manner. If customers are leaving empty handed or going to your competitor because you are “too busy” then the time has come to do something.Employees can no longer keep up with production demands. They begin making more and more mistakes and missing deadlines. Absenteeism increases and production falls. Due to the increased pressures of your job you begin making poor business decisions or using a “quick fix” for problems that need long term repair.
  • Reaction to the competition. If you are equal to your competitors then you may not need to do anything. If, however, they are expanding and taking business from you because of that expansion you should at least evaluate the possibility of expansion. 
  • Don’ t misunderstand the above. I’m a big believer in “NOT” reacting to every little thing the competition does. That’s why I advise you to “evaluate” the situation and not over react.Changes in the marketplace or industry. Your business is affected by many factors. One of those factors is the very industry you are in. Government regulations may force additional equipment or other costly changes.

    New products or services might force you to change the way you do business. In New York City, newspaper stands are in trouble because people who used to buy out of town newspapers now get the same information on the internet sooner and for free.

  • Customer perception or your goods or services: Back in the 1970’s seven people died from taking Tylenol® which had been laced with poison. Tylenol® reacted quickly to remove all their product from store shelves. It took a long time to regain their leading market share but they did it.But at sustained cost increase. A whole new form of packaging had to be developed. Tamper proof packaging had to be implemented alone with stricter inspections.

    Not just at Tylenol® but all pharmaceutical companies had to retool for this change in customer and government demands for safety.

by Tom Egelhoff

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Personas business develop the right choices as they start, grow, and advertise their business

To make those decisions easier and more effective, many businesses develop personas (fictional characters that represent the business’s customers or potential customers) to help them make the right choices as they start, grow, and advertise their business.

What is a persona and how do you use one?

Success in marketing and product development comes from a deep understanding of your customers. Your ability to put yourself into the shoes of your customer, to understand their needs, wants, aspirations, work and home environments—in fact, every aspect of their lives—will drive your success. Being able to think and behave like your customers is the key to being able to communicate with them effectively.

This is why entrepreneurs are often encouraged to build businesses that solve problems that they have themselves. Clearly, it’s much easier to develop a product and design marketing campaigns when you know exactly who the customer is and how they will react to different kinds of marketing, because the customer is you. If you’re marketing to yourself and people just like you, you have a huge advantage because you know exactly how you, and your customers, will react.

But, what if your business is solving a problem that you don’t have? What if the target customer isn’t you? How do you start seeing your business through your customers’ eyes?

In marketing and product development, we can solve this problem by developing fictional characters that are highly detailed representations of your target customer base. These characters are called personas, and just like in plays and movies they need a full backstory so that you, as a business owner and entrepreneur, can fully understand their goals, motivations, and problems.

There are two commonly-used persona types: buyer (or customer) personas, and user personas. Depending on your business, you might just need one persona. The key is to not be overwhelmed with the thought of creating lots of personas and then end up creating none. Just having one persona that you design your marketing around will give you a huge advantage over many other businesses, and it’s worth the initial investment in time and research.

Buyer (or customer) personas

Buyer personas describe your ideal customer. They help you make decisions about marketing and sales processes. I’ll dig into the details of creating a buyer persona in a minute, but first, here’s a quick example of a buyer persona that you may be familiar with.

While most businesses don’t make their personas public, Subway did with their spokesman, Jared. Even though he isn’t fictional, he is still a character that represents a segment of Subway’s customers: Overweight Americans who want an easy-to-follow, affordable diet plan with lots of choices and familiar foods. The Jared buyer persona helped Subway redefine itself as a healthy place to eat, and the company reorganized its menu to highlight its low-calorie sandwich and meal options and revamped its advertising to make eating at Subway seem like a good diet plan. Much of what Subway does in its sales and marketing is driven by asking themselves the question, “Would Jared want this?”

Once you develop a solid buyer persona, that’s the question that you should be asking yourself constantly: “Would Jane (or John) like this?”

User personas

User personas are critical for companies that sell a product that is purchased by a person who is different from the person that ends up using the product or service. If your business makes its own product, you should consider developing a user persona. Here at Palo Alto Software, we have developed a persona named Garrett who drives the bulk of our product decisions.

Designers—of software, shoes, kitchen appliances, websites, and pretty much everything else—have long relied on user personas for developing products. The idea is two-fold: if you design with a certain user in mind, not only will you design a product that gives that user what they actually want and need, but you will also design a product that that user will actually buy (i.e., a product that gets you customers).

Buyer and user personas are very similar, and sometimes the terms are used interchangeably. The differences between them aren’t as important as understanding how to create a buyer (or user) persona, and how to use it to your business’s advantage.

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