The Small Business Doer

Prelude

Ok, this is my second entry regarding my business plan. The marketing section is what I consider to be the meat of the small business plan. Why? I find most small business have a good idea of what their product is and how they want to go about making it / providing it. A big stumbling block is marketing their product and getting sales.

When I started out I had the mentality of build it and they will come. In extreme cases this works out for a lucky business, but the overwhelming majority of the time, if no one knows you’re great product, no one will buy it. How do you get someone to know about your great product? That’s right, marketing.

So with trepidation, I unleash the first draft of my marketing plan. I composed the plan across the span of a weeks, and haven’t read it from front to back for cohesion. As opposed to trying to make it perfect before exposing it to the world, I feel it best to put down what I have and improve upon it in the time to come. If I’m lucky, I’ll have some people comment on it and offer some good advice on how to make it better!

Here we go!

Nature of the Industry

The industry that Greg Lam Consulting will be consulting in is small business, and more specifically, small business in the Lower Mainland of British Columbia, Canada.

There are a few trends in small business that are relevant.

1. As of 2008, only 7% of small businesses were setup to sell online (e-commerce). This means that there is still plenty of room for this segment of business to grow.
2. While growth is relatively flat in the number of total small businesses within Canada, the number of entry and exits of small businesses is between 100,000 and 200,000 small businesses a year. This means that there are between 100,000 and 200,000 new small businesses which will be in need of start-up services each year.
3. As digital technology continues to improve, automating business processes will continue to become easier and more profitable for small businesses to do.

Competitors

There aren`t many direct competitors in the way of small business consulting in Vancouver. A quick google search brings up only two relevant companies in the top 10, http://www.barrysharp.com and http://www.pinpointtactics.com, both of which wouldn’t be direct competitors, even though they do small business consulting. Instead, there are a multitude of specialized competitors competing in specific areas, such as website programming, marketing, videography, database management, and bookkeeping.

What most of the businesses do not do is focus on the needs of small businesses that could benefit from the integration of all these services. Competitors usually satisfy one specific need of a business, such as having a website, but what they often fail to do is to look at the business as a whole and see if the website is integrating into and aiding the other areas of the business. There is a place for a specialist who can digitally integrate different services, such as a website, e-commerce, bookkeeping systems, and order fulfillment systems to reduce errors, and create efficiencies; cutting down on money and time spent in those areas.

When it comes down to time and money, all business owners can recognize the importance of this. What detracts owners is lack of awareness that certain things are possible, fear of change, worry that it will be hard to implement and learn new systems, and not knowing how much everything will cost to setup and maintain.

Strenth and Weaknesses of Competitors

The strength that small business consultants have over Greg Lam Consulting is that they are more experienced in practicing a small business consulting business. Their weakness is their understanding of digital technology and how to implement it to improve small businesses. The other weakness is that they mostly give advice and direction. For example, a business consultant will suggest targeting a certain demographic with a certain message and medium, but they won’t design a postcard, make a video, or do the changes to the website to make this happen. Most small business consultants subcontract this type of work, making it more expensive, more complicated, and carries a greater risk in not aiding their clients to improve their business as much as they could.

For specialized businesses, such as a bookkeeper or website developer, their strengths are that they have in-depth knowledge in their specific field. Their weakness is that they don`t have a general overview of how their clients` businesses function and don`t know how to integrate their services into different areas to aid the business as a whole.

Supplier

There are a variety of substitutes for the services that Greg Lam Consulting provides. The substitutes range in time and price, starting from doing-it-yourself (lots of time but cheap) to hiring a full service provider (expensive but less time involvement and time required). A key will be building relationships with clients and fulfilling their needs to the extent where they don’t want to exert the time looking for another service provider.

The switching costs for a client to switch from Greg Lam Consulting to another service provider would be medium to high. Switching from Greg Lam Consulting to another company to provide web design would result in a learning phase for the new web designer which has real time and money costs. The main reason a consumer would switch would probably be more with dissatisfaction or no more need for the service rather than cost.

The hardest part in starting up Greg Lam Consulting is gaining visibility and credibility. The awareness around small business consultants is fairly low and most small businesses won`t even think to hire a small business consultant for their needs. Rather, they would hire a specialist in certain areas, such as a web developer, a bookkeeper, or a videographer.

The cost in dollars to enter the market is relatively low. The cost in time and knowledge however is medium to high. To gain specialized knowledge and experience in the multitude of fields (as well as the cost of staying current) is a fair amount in comparison to other businesses. The services offered are knowledge services that require organization, creativity, and critical thinking. This allows for relatively decent rates of pay.

Greg Lam Consulting will be mostly dealing with services, not goods. As such, suppliers don’t play a huge role in the business. For video production equipment, office supplies, software, and so on, there are a variety of local, national, and international companies that provide these goods. If one company doesn’t have it, another will. The prices are all generally competitive and don’t tend to negatively affect the revenues brought in by Greg Lam Consulting as goods purchased for clients are billed back.

Target Market

The target market for Greg Lam Consulting is small businesses that range in size from 1 employee to 100 employees with annual revenues up to $5 million.

Small business start-ups have the largest growth possibility as there are many more new businesses starting up each year than there are businesses moving from a start-up to a established and profitable stage. However, it is those established businesses that will most likely provide the most stable, repeat, and profitable work.

These are businesses that are looking to gain an online presence and are looking to find digital ways to automate and standardize their business procedures.

Online video is a fast growing industry and has bucked the trends of the recession in 2009 to keep on growing at a faster pace than other marketing methods. With internet access increasing, computing power increasing, storage costs decreasing, and broadband speeds increasing, all those conditions are ripe for the continued growth of online video.

As of 2008, only 7% of small businesses were setup to sell online (e-commerce). This means that there is still plenty of room for this segment of business to grow.

The point of contact will most likely be the business owner or manager. They require service that doesn`t take them a lot of time to understand or use. Greg Lam Consulting will have to appeal either to the time, money, or both that they will save in using the business’ service. Demonstrating a good return on investment will be crucial in attaining sales.

Greg Lam Consulting will have to have the three following attributes in order to gain business customers:

1. Awareness: In order to gain the point of contact with the business owners and managers, awareness will be one of the largest factors. If someone is looking for a bookkeeper or website developer they will tend to consider anyone referred them or anyone that comes to mind. If they don`t know of anyone, they will tend to search either the Internet or Yellow Pages.
2. Credibility. The business customer needs to trust that the business they are purchasing from is reputable, will be around, and will provide good service.
3. Fit. The product has to provide what they are looking for. A fancy website is nice, but if it costs the business $10,000 and is hard for their customers to navigate, they`d potentially prefer a cheaper 5 page website.

There will be different types of businesses and people interested in what Greg Lam Consulting has to offer:

The start-up business owner with little business experience

Generally needs to be guided through different options and what might be important to their business. More indecisive, less informed, more time available, and less budget than other customer segments.

Start-up business owner with business experience

They have a new business but know the ins and outs of business. Have more time on their hands than an established business owner, but is less likely to know their specific needs or problems as they aren`t fully operational or near their desired capacity.

Established business owners with a profitable business

Generally know what they want or what their problems are. Need to know how the service will save them time or money. Busier, so harder to deal with in terms of getting in contact and getting approvals.

Tire kickers

They are thinking about starting up a business but haven`t yet or have on a really small scale. They have lots of time, but little resources.

At the start of 2010. Have a roster of 3 stable clients who consistently provide work and 3 clients that provide off and on work.

Product Information and Competitive Advantage

Greg Lam Consulting will enable small businesses to establish and/or grow their online presence and will use digital technology to automate and standardize their business practices. Greg Lam Consulting makes their clients company’s more profitable, more efficient, and easier to run.

Specifically, Greg Lam Consulting does a few things:

• Provides customers with an online presence: Website, e-commerce, graphic design, photography, and video.
• Uses online marketing methods to target customers more efficiently. Ex: Uses Search Engine Optimization (SEO) to place high in organic Google search rankings, use pay-per-click campaigns to target certain keywords that cannot be optimized or that you want supported, use digital video to attract customers, help inform customers, help close customers, or help provide support to customers.
• Uses small business knowledge to optimize the use of a business owners time and money in growing the business. Develops and/or refines business strategy and tactics.
• Uses software to automate business functions, such as data entry, online purchasing, bookkeeping.
• Uses software to integrate business functions, thus increasing efficiency and reducing errors and double-entry.
• Conducts business research and provides guidance.

The competitive strategy of Greg Lam Consulting is to use service differentiation and nice marketing to target potential customers.

The service differentiation is the unique knowledge, skills, and business experience that the business owner of Greg Lam Consulting, Greg Lam, provides. Greg Lam combines a business degree with 7 years of small business experience and specialized new media and marketing skills.

For niche marketing, Greg Lam will target entrepreneurs in British Columbia, but more explicitly, the Lower Mainland. He will do through two main methods, online marketing and business networking.

It is quite easy for businesses to copy the individual services that Greg Lam Consulting offers, but for the price and level of service offered, difficult to reproduce the integration of services offered. The key will be to educate potential business customers that the integration of services can be achieved and done within their financial budgets. For example, business owners know that they can hire a bookkeeper, they also know that they can sell online, but they may not know that the bookkeeping can be integrated with their e-commerce system in a way that will save them money on labour.

The main difficulty for Greg Lam Consulting will be to remain current with the changes in business and technology. This will require constant skills and knowledge upgrading.

All the services provided by Greg Lam Consulting are unlikely to become obsolete anytime in the short, medium, or long-term future. The individual services themselves may become cheaper or easier, but the knowledge of how to integrate them all together to operate a successful business will always be needed and valuable.

Pricing

Pricing for services offered will fall into three categories:

1. Piece work / project work: Flat rate for a job, such a produced 3 minute video or a 10 page website. Benefit of this structure to client and Greg Lam Consulting is that price is known upfront and can be budgeted upon. If work is done efficiently, results in more pay per hour for Greg Lam consulting, if not done efficiently, less pay per hour. The client ends up paying for what they find valuable, the end product, regardless of time spent on the project. This provides an incentive for Greg Lam Consulting to find ways to make the end product better using less time and money, as the cheaper and faster it is to supply the end product, the more profitable it is.
2. Hourly work. For work that is too hard to estimate or requires a lot of flexibility, this is a good option. Client can decided what is worth spending on. Greg Lam Consulting is paid for all hours worked. Negatives are that it is sometimes difficult to differentiate between billable and non-billable hours. Additionally, over-analyzing costs of each part of the product may make clients lost sight of the end result.
3. Passive income. This is income that will come in through streams such as affiliate programs for recommending services and digital how-to’s in print or video format. Benefit is that the work is only done once but can continue to reap rewards for years to come with little additional work required. The downfall is that you are putting up a lot of upfront work for something that may never provide revenue.

The low end of the price range for services will be $35 an hour. This will be for services that are either low-skilled, high-volume, or for frequent customers.

The mid end of the price range for services will be $50 an hour. This will be the target rate for services provided. Most work will fall under this range.

The high end of the price range will be $75 an hour. This will be for work that requires specialized knowledge or equipment and work that is based off a template or packaged that provides high value for the client with little work from Greg Lam Consulting.

Competitors charge anywhere from $25 an hour to $150 an hour for the services that Greg Lam Consulting provides. For most competitor services the average price falls around the $50 an hour range.

The decision to price around the $50 an hour and up mark is because Greg Lam Consulting has these added benefits:

1. Small business knowledge and mindset. Act as if own the client’s small business, therefore always thinking about the return on investment and will only recommend work that will provide it.
2. Integration of services. Being able to handle multiple aspects, such as website, online marketing, video, and e-commerce, all under one company, provides greater efficiencies, better direction, and less headaches.

Promotion Strategy

The main promotion and advertising strategy is using the www.smallbusinessdoer.com to drive awareness, education, trust, and sales. To achieve this, the website must have valuable and useful content on it so that others will link to the site. It must also contain examples of work done by Greg Lam Consulting to enable visitors to see the type of work done and what they can expect to receive.

The more links and visitors the site receives, the higher it will rank in search engines, and thus receive more traffic. With a website that demonstrates the benefits of Greg Lam Consulting’s services, this will in turn to lead to sales.

The different ways to promote the website online are through social media sites such as other business related websites and blogs, Facebook, Twitter, and Youtube. The main idea is to generate free and useful content to drive traffic to the site and then offer paid services for those small businesses that are in need of services related to the content.

Promoting the business offline will also be key, especially in the early stages. This will mean attending network meetings, business seminars, and other business related functions. One of the key ways to both create content and awareness of the website will be to film small business tutorials with specialists in different areas, such as graphic design, bookkeeping, business planning, business financing, and so on. The specialist small business advice tutorials will be a win-win-win. The specialist small business owner will be featured on the www.smallbusinessdoer.com website gaining exposure and authority, Greg Lam consulting will receive valuable content for its website plus a link from the specialist small business owner, and visitors to the website will be able to learn from the valuable content as well as use it as a referral source to hire either Greg Lam Consulting or the specialist small business owner.

The unique aspect of the website will be its transparency, its advice coming from real and practicing small business owners, and its video content.

The desired outcome of the marketing strategy will come both in awareness and in sales. Awareness can be measured in terms of the popularity of the website within search engine result pages (SERP). The higher the rank in a search engine for a specific target keyword the better. It will also be measured in traffic to the website, subscribers to the website’s RSS feed, and other social media metrics.

Sales is simply measured in dollars. The more the better!

Distribution Strategy

Distribution will be very simple. Most products are digital services and simply need to be transferred electronically. At the current time, payments can either be made by cheque or through Paypal.

In the future, if Greg Lam Consulting were to have standardized digital products for sale, an affiliate program can be created to allow others to promote Greg Lam Consulting.

Growth Strategy

To grow the business, Greg Lam Consulting will have to concentrate on providing more value to customers while at the same time requiring less hourly work to do so. Examples would be to create standardized website and e-commerce solutions that can be easily modified and deployed to suit the needs of customers.

The other way to grow the business is to boost the profile of the www.smallbusinessdoer.com website. Increased traffic will increase consulting sales, but can also lead to an increase in affiliate sales. Affiliate sales are made when Greg Lam Consulting recommends the products of other business and receives a percentage of those sales.

The key will be to only recommend reputable companies that will provide small businesses. However, Greg Lam Consulting will recommend companies whether or not they have an affiliate program, and will also not recommend any affiliate program that would not benefit visitors of www.smallbusinessdoer.com.

With a broad title like Small Business Doer, the market is wide open for any services that small business would need. The limitation would be medium or large sized businesses. As long as the focus is kept to addressing the needs of small businesses, there are many new products that could be introduced.

You got this far!

Wow! I’m impressed. You must be really interested in my business plan because:

• A. You’re a competitor
• B. You’re a student
• C. You have too much time on your hands
• D. You’re interested in learning about your own business and how to write your own business plan

For whatever reason, thanks for the read, and please leave a comment if you have the time! I will respond to questions/suggestions.

Go forth to the next section, the SWOT – Strengths, Weaknesses, Opportunities, Threats.
Go back to the business plan page.