How I Will Be Rich

When you’re starting a business and no one knows who you are yet, you’ve got to get your name out there. How are you going to do that? One way is to send out an introduction letter to any would-be clients. An introduction letter is letter that lets potential customers know that you exist. This will get your product or service in the hands of the companies that are relevant. I think it would be a good idea to invest in a good fax machine when starting a company. That way you can scour the internet for relevant companies and fax away. If you can’t afford a fax machine when starting up, mailing or even dropping by various places will suffice.

When writing your introduction letter, think of the problem that you are solving or the need that you are fulfilling. The idea that you want to get across is that these customers have a need that you can either fulfill for them or do it better for them. You don’t want to come off as arrogant but you do want to appear confident that you can accomplish something for them.

In writing your letter, I also believe it is a good idea to talk about their business. Say things like “your business” and “you”. For example, “Your business could see profits double with the added revenue stream something like (product) could provide.” Avoid using words like “we”, “us”, “our” and “I” when giving the description of the product and it’s benefits. The customer wants to see how they benefit and some choice words can set a much more appealing tone.

What to include in an introduction letter:

• Advantages - What do you have that your competition does not. What are you bringing to the table?
• Testimonials - You want to show that other people have benefited from what you provide.
• Background - Establish some credibility. How many years have you been doing this? You want your customers to know that you know what you are doing and that you are a professional.
• Credentials - Has your product won any awards or been featured in any prominent magazines or t.v. shows?
• Guarantees - Do you offer any guarantees that prove the quality of your product or service?
• Contact Info - Once the customer knows what you can do for them, make sure they can easily contact you to take advantage of your service.

One last tip that may be beneficial for those who are mailing or dropping off their letter of introduction would be to use some nice letter head. Make sure it’s on nice paper with your company logo on it. It’s just one more thing that can make you look that much more professional and impress your potential customers.

Starting a new business is not easy and it takes a lot of hard work. My goal is to give some ideas to make a start up a little bit easier. This is one idea that can market and promote your company that can be very cost efficient. It’s only the cost of the paper and ink.

-M

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I mentioned in my post about starting a business that it is a good idea to set up a website when you first get started. The reason behind this is that you want people to have somewhere to go to get to know a little bit about what you do and who you are.

The first thing you are going to need when setting up a website is a domain name. The domain name is the actually web address that people will identify your website with. The domain for this site, for example, is www.howiwillberich.com. If your company is called Wolf Productions you would want to see if you can get the domain www.wolfproductions.com. If it’s not available, try www.wolfproductions.net. Basically, you will need to try names until you get one that you like and is available. Domain registration is cheap. GoDaddy.com has domains for $9.99 per year for a .com or a .net.

Once you’ve got your domain name registered, you’ve got to get a host. Hosting prices vary all over the place but can actually be found for pretty cheap these days. Since your business is brand new, you probably are not going to be expecting massive amounts of traffic. You probably won’t even need a gigabyte of space but most hosts offer hundreds of gigabytes. This is basically so that they can look better than the competition. This amount of space is unnecessary for a small business website. Here is a list of some inexpensive web hosts that would be perfectly fine for your new small business.

• GoDaddy - $3.95 Per Month
• IX Web Hosting - 3.95 Per Month
• HostMonster -$4.95 Per Month
• StartLogic - $4.95 Per Month
• BlueHost - $6.95 Per Month
• Yahoo - $8.96 Per Month
• HostGator - $9.95 Per Month

Once you’ve got your domain name and you’ve got the host, it’s time to start putting content on your site. Some things that are good to include in your website are:

• Give Information about your company. Explain what it is that you do and what makes you better than the competition out there.
• In some industries it may be beneficial to give a little bit of personal knowledge as well. If you are a family owned company, people like to hear about that. It’s very respectable.
• Images of the work that you do. If you do powder coating, for instance, you can post some pictures of the more impressive projects that you have worked on.
• Customer feedback of your company. Take any e-mails that people have sent you and quote them. If you don’t have any, e-mail or call some of the people that you know where happy with your work and ask them for a comment that you can post in the customer feedback section of your site.
• Contact information. People know what you do, they’ve seen the work you’ve done and they know that you have happy customers. Give them a way to contact you so that they can be your next customer.

And that’s it. For about $58.00 per year you can have your very own website. All that you need to do is promote it and I’ll get to that in a later post.

-M

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I wrote about how to get some momentum going in a new business. Joe and I have some ideas for some start up companies and we are so close to getting them rolling. One thing we need to do is get organized. We don’t plan on jumping on too many projects all at once but what we need is some business plans. There are a couple reasons why it is important to have a business plan when starting out. The first, and most important, is so that you can map out every step you are going to take along the way to reach your goal. I want to have every little detail preconceived before we ever spend a cent. I want to know before hand, the places that we are going to need to spend money so I can plan a budget to get started. I want to have backup plans if one idea doesn’t quite work out. The other reason to have a business plan is so that you can convince people to lend you money. It makes it very difficult to borrow money and obtain startup capital if people have no idea what your plan is. Investors want to see a plan of action so that they, themselves, can determine whether it sounds feasible and profitable.

Here are some things that are important to include in your business plan:

1. A Summary - Explain real quickly what kind of company you are starting, what you are selling, who’s going to manage it and how much money you’re going to need.
2. An Organized Table of Contents - This is pretty self explanatory. This will help you keep all the pages of your plan organized and help future readers jump around if they need to.
3. A Description of your Product - This is where you want to get detailed about your product. Explain everything your product can do, all possible alternative uses, what it will look like, how it will feel and any other relevant piece of information about the product you are pitching.
4. Analysis of your Market - This is where you lay out all of your research. Explain who your competition will be, who your target market is and what territories you will cater to. This is also where you give sales projections. Figure out how much you anticipate making and what the trends in this industry have been.
5. Marketing Strategy - What is your grand strategy to make it to the top. What steps are you going to take to market yourself? You are probably jumping in to an industry that is already occupied with competition. What are you going to do to stand out and rise above as the superior competitor in your industry? Explain it.
6. An Operations Plan - This is where you explain how you are going to run a company. What are your customer service philosophies? Who is going to do what? Explain how you are going to run this company.
7. A Financial Plan - Talk about the numbers. How much will things cost, how much are you going to sell for and how will you take care of accounting?
8. A Management Plan - Really dig deep and define the roles of the management. This is a very important step because you will need some sort of structure when you are first starting out. People will need to be accountable and it needs to be clearly defined in the beginning who will be accountable for what.

As you can see, writing a business plan is no easy task. There are a lot of steps and a lot of research must go in to them to do them properly. Once done correctly, however, you will have a clear set map of what’s to come. You’ll have something to show for your company and, hopefully, investors will want to take a chance on your little start up.

-M

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Joe and I were having this discussion yesterday about how powerful the momentum of something can be. I’m talking about in business, in blogging, in pretty much anything in life. Think about it in terms of blogging. When you have a blog and you are real small and no one knows about you, that’s when you can use the most help. That is when you want people back linking to you and talking about your blog and your posts. Once your blog sees some success and things are already really rolling, that’s when people want to back link you and talk about you. So when you can really use the help the most, it’s the hardest to get and when you really don’t need the help anymore, it’s when it’s most abundant. It’s funny how things work that way.

Think about the rich and famous. When they go to a restaurant, they probably don’t even have to pay. The restaurant wants them to be seen there. Now if a homeless person who is starving walks in to the same restaurant, what do you think is going to happen? They are going to get kicked out because they can’t pay. The person that needs the most help, can’t get it and the person who needs absolutely no help eats for free.

This same concept can be applied to business as well. Joe and I are in the process of setting up a powder coating business (A process for finishing metals) and we are struggling to find resources for the material and the equipment that we need. We can’t get favorable pricing, it’s hard to source the equipment that we need, and who would want to do business with a little start up like us? We’re not proven yet. The shutter company that we work for, on the other hand, has been in business for over ten years. All of our vendors give us favorable pricing, we basically do business on nothing but word of mouth now and everyone wants a piece of it now that things are cruising along.

So we’ve got this upstart business that no one knows about. We are the low men on the totem pole for our vendors, we’ve got to prove ourselves to customers and we’ve got to get some momentum going behind this company to really succeed. How do we do this?

Here’s some ideas to really get things rolling in a new, unproven company:

1. Write a business plan. I think this is one of the most important things you can do. It is also one of the most overlooked things. If you have a business plan, then you’ve already mapped out the whole process of how you will succeed.
2. Set up a website. Create a simple website that includes pictures and a description of what you do, some personal info about yourself, contact information and possibly pricing (Depending on the business).
3. Send a letter of introduction to as many potential customers as you can. In a powder coating business, this means custom motorcycle shops, custom truck shops, trailer shops, commercial builders and any other companies that have a need for painted metal that we could potentially land long term contracts with.
4. Fake it until you make it. This is a term I hear Joe use all the time. It may be a psychological or a self fulfilling prophecy type thing. Think of yourself as bigger than you are. Pretend you are the Donald Trump of your industry. When you talk to people, you want them to think you are a somebody who is already successful. If they think you are successful, they will probably also think that you are good at what you are doing.
5. Make business cards. This is a simple and cheap way to get your name out there. I think Joe found a place where we can get something like 1,000 business cards for $5.00. You can’t beat that. Once you have them, hand them out to everyone. Hand them out to people who may not even be in need of your services. If someone asks them if they know someone that provides the service, maybe your name will come up.
6. Become an expert in your field. This is very important, not only when people start asking you about what you do but for promotion reasons as well. Just like in blogging, you can write articles on your area of expertise for other sites and then throw in a link or contact information. This will send people to the web’s expert on subject.
7. Use Craigslist or other free classifieds. This is easy enough and it’s free. Post your services or products on a free classified website. It’s probably not the best marketing but it will generate some business.

Let the effects of these various ideas all generate a buzz. Once some business starts coming your way and you get a reputation for good quality and good service, word of mouth will come in to play. From then on, it’s a snowball effect. Starting a company and generating a buzz can be easy and cheap. Hopefully some of these ideas will get you pointed in the right direction.

-M

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Since the beginning of this blog, Matt and I have been swimming with ideas for future business plans and directions we would like to travel. By starting and writing this blog, we have been given an opportunity to discuss some of the ideas we’ve had while considering various strategies to achieve them. Matt has written posts How to start a Business in California (Pt.1) and (Pt.2) that have showed the preliminary steps that we have been starting to take. These posts only show the tiniest pieces of the pie that’ll need to be taken care of while starting a business. These are very important and necessary steps to complete, but an equally required point to cover is the planning and strategic side of the equation.

A vital tool to figuring out the strategic side of any business idea is knowing and understanding the acronym: SWOT. First, after fully planning and figuring out what will go into your business idea on paper, the next step is to analyze the company’s SWOT. While going through this process you’ll be able to focus on the strengths and realize weaknesses early so the business plan can be amended. With this well-rounded business plan and a completely understood approach, you’ll be able to safely move towards getting the ball rolling.

The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This is an analysis of the business plan that covers both internal and external factors. By using this tool, you’ll be able to see the pros and cons before even putting any money into a project.

The Strengths and Weaknesses categories are both internal factors. These are pretty self-explanatory, but they are the aspects of your business that you would be directly in control of. Some of these would include the proper management of staff, managing cash flow, knowing the company’s capacity of supply and demand, and the overall efficiency of your operations.

The Opportunities and Threats portion are external factors. These two are influences outside of your control and are normally external environmental factors. By pointing out these aspects of the business, you’ll be able to try and cradle the Opportunities to make the most of them and, hopefully, avoid the Threats before they occur. A few examples of these are changes in the economy, new technologies, outsourcing, industry/customer needs, and weather issues.

All in all, after using the SWOT analysis on your business plan, you’ll have a much better understanding before contributing a large start-up financial investment.

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