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Archive for the 'Starting Up' Category

Credit checking

Published by Business Link on 19 November, 2009 in Starting Up and Strategy & Operations • 0 Comments

When was the last time you checked the financial health of your customers, suppliers, and your own business?

You may credit check new customers in order to decide whether to offer them credit and upon what terms. In addition, periodic checks on existing customers could help to monitor changes, allowing you to review credit limits and terms if a customer’s financial health deteriorates; something especially important for high value customers.

Checking the financial health of suppliers may also be important for maintaining reliable and uninterrupted supplies of the goods and services you need to run your business. Again, periodic checking allows you to spot changes in the financial health of suppliers so that you can make alternative or backup supply arrangements if necessary.

Just as you may choose to credit check others, your customers or suppliers might decide to assess your business’s financial health. Proactively checking your own credit worthiness therefore allows you to see how your business may be perceived by others, so that you can work towards becoming more credit worthy should you need to.

Credit checking services

Credit checking services are available from banks, financial institutions and specialist credit checking companies. Specific features of credit checking services vary but typically they may include:

  • Checking whether a business is genuine, i.e. not a fraudulently set up company
  • Overall credit ratings and detailed credit reports
  • Automatic alerts of changes in credit status
  • Information on how good a business is at paying invoices
  • Information on whether any county court judgements have been made against
  • a company
  • Assessment of risk of company bankruptcy
  • Debt recovery services such as legal advice or debt recovery letter writing

For small businesses with a handful of customers, basic credit services might be obtainable for free. Charges usually apply for companies with more than a few customers, or for more comprehensive services.

Three useful watchwords

Credit checking services assist in the prevention of late payments and bad debts, and are also geared towards monitoring changes in credit worthiness over time, so that you can review credit limits and terms with customers or source new suppliers. Some services also help to resolve disputes through assistance with debt-recovery letters and legal action. So, keep in mind the following three watchwords:

  1. Prevent. Use credit checking to identify high-risks and either avoid them or enforce tighter payment terms.
  2. Monitor. Use credit checking to spot and react to changes in credit worthiness over time.
  3. Resolve. Use credit checking services to help chase late payments before they become bad debts.

Guide to Preventing late payment

Data-driven marketing

Published by Business Link on 20 October, 2009 in IT & eBusiness, News & Opportunities, Sales & Marketing, Starting Up and Strategy & Operations • 0 Comments

Three tips for using data to drive your marketing: get it, manage it, use it.

Get it: obtaining the right data

What sort of data do you need? This decision should be guided by how you intend to use data now and in the future. Today you might simply need customer names and email addresses. But think ahead; in future you may wish you had collected details of people who enquired but did not purchase; or you may regret not collecting information such as birthdays or ‘how heard’ data, so that you could, for example, analyse how different age groups heard about your business and its products or services. For tips see Royal Mail’s What data do you need from your customers?

When planning data requirements there are legal obligations to consider. You must collect data with a purpose, which in essence means having justifiable reason to collect the data; and your data requirements should be relevant and not excessive. Knowing what data you want and why is thus important from both a legal and strategic perspective. Your legal obligations are outlined in the eight data protection principles.

Now you need tactics for acquiring data. Point of purchase is an obvious route to obtaining basic data such as names, addresses and email addresses. But you may need additional approaches to get more detail. Often a key aim of incentives such as vouchers or loyalty cards is to encourage customers to share data. Examine existing points of customer interaction to see how they could be used to acquire data, or devise entirely new ways to obtain it.

Whatever your collection methods, you are legally obliged to tell individuals what you intend to use their information for. Customers are entitled to ‘opt-out’ of receiving marketing communications and must be provided with a means of doing so, and they must ‘opt-in’ before you are allowed to share information with other companies. See Using personal information fairly and lawfully.

In addition to obtaining data from existing contacts, you could purchase data lists of potential new prospects. Subject to the right permissions, such data could be used for postal, email or telephone marketing. Be sure to work to the standards set by the law; see Developing your customer database.

Manage it: storing, cleaning and updating data

As with data collection, getting data storage right is important for both strategy and legal compliance. If you don’t choose the right data storage system you might experience future limitations should you wish to, for example, add new data fields or run custom data analysis and reports. In addition, if you don’t store data securely and for no longer than is necessary you might breach the data protection principles; also see Keeping your systems and data secure.

Out-of-date data carries costs which could outweigh the expense of ongoing quality and cleansing processes. Removing gone-aways, such as contacts who have moved home or changed telephone number, saves expense and waste, and continually working to update data and add missing detail could improve marketing analysis and targeting. Data quality and cleansing could thus be used to both clean up and plug gaps prior to marketing activities.

Use it: turning your data into meaningful marketing activities

You are collecting the right data and trying to keep it up-to-date and comprehensive; now it’s time to turn this intelligence into effective marketing, by using it to profile, segment and communicate.

Analyse your data and profile your audiences by considering questions such as: Who is your typical customer? What’s the profile of your most/least valuable customers? How frequently do customers purchase? How do most customers hear about you? There are many other such questions, and the answers can often lead to more. But fundamentally – try to use data to answer your most pertinent marketing questions.

By getting to grips with your data you could potentially segment customers into different groups. For example, some customers may tend to interact via the web or email, while others interact in person or respond well to direct mail; such insights could allow you to create distinct communications strategies for different customer segments.

Customer data equals customer intelligence. This intelligence could be used when talking to customers one-to-one, or used to segment customers so that you can talk to different groups differently. In general, think about how marketing needs can lead your data demands, and how customer data can inform and lead your marketing.

More info – Guide privacy and data protection in direct marketing  

More info – Guide managing your customer database

Preparing a business plan to raise money

Published by Business Link on 20 October, 2009 in Starting Up and Strategy & Operations • 0 Comments

Four key factors that ‘really matter’ when preparing a business plan to raise investment or finance.

Raising money for new or growing businesses can be difficult, so it’s important to pitch your business strongly to investors and lenders. In the first instance this means having an effective business model which offers real potential for success. But it’s equally important to articulate your potential on paper, usually through a business plan.

You may have a strategic business plan which guides business development, but arguably you should switch focus in a business plan which aims to raise money. Such plans should highlight four key factors, says business professor William Sahlman, author of Harvard Publishing’s most downloaded article of the past decade. The following factors are, he says, “what really matters to intelligent investors”.

“The people – the individuals launching and leading the venture and outside parties providing key services or important resources”

The experience, skills and talents your people bring to the business are important areas of focus. How can you – together as a team – deliver business success and financial return? It’s important to show breadth of expertise because relying on one person’s talents could be perceived as a weakness. Also highlight the strengths of key business partners or collaborators; especially important if your business has skills gaps or few employees.

“The opportunity – what the business will sell and to whom, and whether the venture can grow and how fast”

Clearly defining the business opportunity and sizing up its potential are crucially important tasks. This information allows investors and lenders to judge if, how and when they may see a return on their money. Number crunching is important, including financial reporting and forecasting. But also use words to articulate the market opportunity, the nature of the customer base, the unique benefits of your offering, and your long-term growth potential.

“The context – the regulatory environment, interest rates, demographic trends, and other forces shaping the venture’s fate”

‘Other forces’ might include: market trends – such as online trends and technologies that are changing how markets function; changing consumer demand – for example, an increasing consumer demand for longer-lasting products, resulting from recent economic pressures; changing attitudes – such as a growing interest in green, ethical and socially responsible brands. Describe how your business fits within the real world context.

“Risk and reward – what can go wrong and right, and how the entrepreneurial team will respond”

You’ll want to focus on painting a bright future, but it’s important to acknowledge risk factors so that you can present arguments explaining why the worst probably won’t happen, and outline contingency plans in case it does. Tackling risks upfront in your business plan may make it easier to respond to challenging questions later on. The people factor is again important; explain your readiness to lead towards future success and react effectively to future challenges.

More info – Prepare a business plan
  
More info – Guide budgeting and business planning

The power of PR

Published by Business Link on 20 August, 2009 in Starting Up • 0 Comments

Industry experts say that PR is all about reputation. This makes PR an essential and invaluable tool for new businesses. If your business needs to create or build a reputation, your business needs PR.

The Public Relations Consultants Association adds that: “It’s the result of what you do, what you say, and what others say about you. It’s used to gain trust and understanding between an organisation and its various publics – whether that’s employees, customers, investors, the local community – or all of those stakeholder groups”.

PR employs various approaches, from the distribution of information and news to media outlets such as newspapers, radio or TV, to speaking at live events, or engaging with local communities. Increasingly the web is part of PR too; businesses are beginning to engage with new media such as blogs and social networks.

You can build a reputation through advertising, but PR offers additional benefits. For one thing PR can be cost-effective. You don’t pay for PR exposure, so if you can minimise your expenses there are great returns at minimal cost. And importantly, PR offers an air of credibility that advertising cannot match. What’s better: a paid advert, or newspaper exposure published for no other reason than an editor wanted to tell your story? You can’t buy this kind of credible exposure.
Traditional media – newspaper, radio, TV

Getting into the news could be easier than you think. One tip is to start with local media such as regional newspapers, radio or TV. A quick scan of recent local news finds stories about a cake shop, charity, golf-club, and startup web designer. So businesses of any size or type can make the news. As an esteemed local editor once told us: “every business has a story to tell”.

Last year we asked local newspaper editors for tips on getting into the news. Here’s what they said:

Be interesting. Make your news compelling and of public interest. Familiarise yourself with the types of stories your local media covers (one topical example is news of businesses ‘bucking the trend’ of the recession). Above all, avoid ‘spinning’ uninteresting news.

Keep it simple. The editors we spoke to requested clear and concise press releases. Ensure key messages are included early on. Not all submissions are used, so keeping things short also avoids wasting time if your story goes nowhere. In addition to simple copy, consider how photos could bring your story to life.

Do it yourself. You can use a PR agency, but why not do it yourself? Look for good stories and tell them well. Send them to the right people, many of whom are available via email, phone or web (the editors we spoke to preferred email). Try to build ongoing relationships with contacts, but don’t contact them too frequently.
New media – blogs, podcasts, discussion forums, social networks

The internet has created new channels through which you can engage with audiences. These channels also allow audiences to talk amongst themselves. Such services include blogs, podcasts, forums and social networks.

New media channels can provide exposure to large audiences, and interestingly, to specialist or niche groups. Online you can find cake-making blogs, golfing news sites, web design forums, and all sorts in-between. Including such sites in your PR contact book could offer more value than traditional media in terms of getting your news to targeted audiences. And when it comes to new media it’s not just about what site editors are saying; getting involved in direct dialogue with users themselves can also help to build your reputation.

Participating in social networks such as MySpace, Facebook and Twitter are further ways to both disseminate information and engage in dialogue with audiences. For example, Facebook Pages allows companies to add company and product pages with useful news and information, and engage in direct discussions with users.
Getting started

So how can you get started? Firstly, remember that PR is about building a reputation. And second, remember that PR is about spotting a good story about your business, and then telling it well.

Look for interesting and relevant things to say to audiences, which includes customers but also employees, investors or the local community. While you are at it keep an eye out for available outlets, from both traditional and new media; and don’t forget activities such as business, consumer or community events.

Once you have something interesting to say and some places to say it, focus on saying it clearly and concisely with a good amount of enthusiasm. Create press releases for traditional media, but think about how these could be adapted for new media or live events, which may require a more sociable approach.

Finally, don’t be disheartened if your news is not picked up at first. Keep looking for those interesting stories and keep telling them well. In time both your PR success and your business reputation will begin to improve.

More info :

Read – PR the basics guide

Read - The non media PR

It’s a small world

Published by Business Link on 20 July, 2009 in Starting Up • 0 Comments

Networking can create a smaller world, connecting you with the people and things your business needs.

Knowing the right people provides easier access to valuable information, know-how, experience, ideas, opportunities and contacts. By making connections, we can get closer to the people and things we need.

Some believe that through such links, all 6.9 billion people on the planet are connected. Theory has it that via our networks of friends or contacts, we are on average less than six handshakes from anyone; from our heroes or investors, to new recruits, collaborators, suppliers, or customers.

But does this notion hold true? A BBC documentary suggests the answer could be yes. According to scientific research, most individuals belong to isolated groups, such as tight-knit social or geographical clusters. But within these clusters are usually some key individuals who provide links to new or different groups of people. “Hubs” are also present, defined as “people who are much more connected than the rest of us”.

These people – the links and hubs – really can create a smaller world. Think for a minute about the people and things you are looking for; a mentor to offer guidance, or an investor to fund your growth plans; a better distributor, supplier, or creative agency. Chances are someone in your local networks can help you, or through just a few handshakes, can connect you to someone who can.

Get involved

Business networking services aim to bring like-minded business people together through events, and increasingly via the web. They offer a place for you to get to know people and make your world smaller.

What to expect from such services can vary. Formal networking events, such as dinner-parties or structured working days, may invite people who are closely linked, perhaps by industry sector or level of experience. More casual events, such as breakfast meets or speed networking, may be broader in scope. Web networking services are usually open to most, but are also likely to offer ways to make more specialist connections.

So, with all this available, why not pick a few networking services and give them a go? To begin, all you need is a “1-minute intro” that summarises yourself and your business. Consider what your business needs, and what skills or resources you could offer in return. When attending live events, remember your business cards. And finally, be sociable – networking is about creating relationships as much as playing give and take.

In addition to local events, take a good look on the web. Services such as LinkedIn or BT Tradespace offer formal networking tools. But social networking sites such as Facebook and Twitter also offer casual ways for like-minded business people to connect and engage in discussions.

It may take a while to make connections that benefit your business, but networking can be worth the effort. The process could simply help you to brush up on your conversational skills and personal confidence. Or, such activity could help you to create a smaller and more intimate business world, in which you are less isolated and have easier access to the people and things your business needs to succeed, today and in the future.

More info – Different kinds of network