Pricing: Oh The Woes

Little scares entrepreneurs as much as pricing. We all know that if a prospect eagerly becomes a new client with little questions that we may have just given away the farm. When a prospect doesn't call back after being told the price - and this not on the first or second meeting - we've probably charged too much.

I just read an amusing and informative article on Fast Company about pricing. The article is geared to big business, but there are always lessons even if you're a one-person shop.

Another blog post over on Fast Company by Alison Yama talks about pricing in a depression, and her approach is very relevant to small businesses. In fact, I shared her article in my class on pricing and distribution for entrepreneurs at the Renaissance Entrepreneurship Center.

I found this nifty tool that will calculate your gross profit margin at Bankrate.com

Enjoy!

Competition for Business Capital

Entrepreneurs know: capital is tight right now, and banks have made it tough to get credit.

Have you thought about capital competitions?

Take advantage of this upcoming opportunity to pitch your business idea at The Perfect Pitch Entrepreneur & Investor Conference. Heavy-hitting venture capitalists will be in the audience, headlined by Sir Richard Branson (Virgin founder and overall cool dude). Submissions are due September 8th. Someone's going to get the money; why not you?

In addition to pitching for money, The Perfect Pitch is a day-long conference for entrepreneurs taking place October 26th in Marina Del Rey, CA.

Market Research for Designers: Color Palettes

If you make clothing, handbags, or other accessories, you know you've got to keep up with the hot new colors. You can download a PDF swatchbook from Pantone, called Pantone Fashion Color Report Fall 2009. It's late to be looking at colors for 2009, but it's also free, and if you're still building your line or accessories, it's perfect.

Pantone also publishes the PANTONE VIEW Colour Planner, which is $750. But take a look at their press release: they don't include swatches, but it does discuss the eight palettes for use in women’s wear, menswear, and active wear. palettes

Two Market Research Tips

(Note: My next several posts are really for the entrepreneurs I instruct at the Renaissance Entrepreneurship Center. But I decided to write them here as a way to make them easily available to past students too. If you're not a Ren. Center member, you are welcome too!)

There are several resources that will help make your market research easier. I will be adding more over the next few days, so be sure to check back. Also, if you have any questions, please ask them in a comment; there are probably at least a few more in the class that also have questions. I'll post my response here.

Many entrepreneurs have a budget of $0 when it comes to market research. So my suggestions here are for free or almost free tips and tools that will help you.

(1) Surveys

One of the best tools you can use for primary research is online surveys. Try one of these three:

• Survey Monkey


• Zoomerang


• Vizu

Survey Monkey has a guide on creating strong online surveys, so I would encourage you to consider using them. I've used Survey Monkey for both small and mid-size organizations; there's a good chance it will handle what you need.

In an ideal world, you would distribute your survey to your entire target market. But to keep it simple, yet still get meaningful responses, you can start with your friends and family, and ask them to send the link to anyone they think would be interested in your product or service.

You want your survey invitation to look very professional. Sending it out via a service like Constant Contact means that it will look professional. But more importantly, you'll be able to track who actually opened your email.


(2) Tradeshows
Another great primary research source is a tradeshow. I can't emphasize how much information you can get walking up and down the aisles of your industry's tradeshow. Information dangles everywhere, ready to be plucked and consumed. You can find a tradeshow on TSNN by searching their immense database.

The OTHER Social Media Sites

I taught the first class of the four-week Start your Own Business class at the Ren. Center. Great class, really looking forward to seeing how everyone develops their business ideas.

Next week we'll be talking about how to find where your customers hang out. One area I want to bring up is that there are lots of social media sites BEYOND Facebook.

For example, I like to cook every now and again. Foodbuzz is a social media site focusing on - yep - foodies. I cruised on over to that site when I'm in creative cooking mode. Another site I just heard about is Tip'd, "a community for financial news, ideas, and tips." I'll be checking that out too.

These sites don't have the same overall traffic as Facebook or MySpace. But what they do have is users highly interested in food or finance. If that's your market, that's where you want to be, above being on general social media sites. They also provide an inexpensive, powerful way to increase your understanding of your customers.

Go find your social media sites. Then let us know where you like to hang out.

Reducing Start-Up Costs

CNN has a cool article, Air Force vet turns to dogs for cash. Lori Lawrence wrote a very detailed business plan. Originally, she thought she needed $147,000 to open. But in the end, she reduced her start-up costs to $35,000, with help from the Small Business Administration.

Entrepreneurs who want to start a business, especially one which requires capital investment like a storefront or specialized equipment, sometimes think they need a lot more cash than they may really be able to get by with. If Lori Lawrence had continued to think that she needed $147,000, she would've had to walk away from her dream.

One of my students from a few years back (i.e., before the economy recessed) wanted to start a bakery in San Francisco. Originally, she needed a whole wad of cash - five zeros worth. But her lack of access to capital forced her to re-think. Through careful consideration, she realized that she could purchase much of her equipment used. In addition, she realized that she could actually *outsource* part of her manufacturing needs, by carefully finding the right vendor who shared her values in food preparation.

So take a look: are your start-up costs too high? If so, can you be creative in reducing your costs? How? If you've got a good idea, share it - someone else may be able to use it too!

Learn More From Your Client in 15 Minutes A Day

One of the consistent issues I hear from clients is that they don't like to do research. They have bad visions of being in high school and having to write that book report. "Yuck," they say.

So I've been thinking about this problem for awhile. With good market research, I've seen how it is so much easier for my clients to:

• decide what product or service to sell (!)
• describe their product/service;
• price their product/service;
• design a marketing plan that doesn't waste time or money by being in the wrong place at the wrong time; and
• SELL their product/service

So, what can you accomplish in 15 minutes?

• read your Google alerts
• visit your trade association website
• view a video on survey design fundamentals (this is really only 10 minutes!)
• create a mini survey for your best customers
• call one ongoing customer and check in with them
• call one ongoing customer and ask them the questions from your survey
• create a free survey on survey monkey or zoomerang and send it out to your email list

Got some more ideas?

Revenue, Anyone?

In the marketing classes I teach, I always emphasize that an undeniable goal of an entrepreneur - no matter what - is about making revenue, 'cause without revenue, they'll be out of business.

That doesn't mean they can't have other goals. My company, for example, supports a social venture in Kenya called Uplift Business Alliance. In fact, we're looking for business-minded volunteers who would like to go to Nairobi, Kenya for a week in January 2010 to work with Kenyan entrepreneurs. Leave a comment if you're interested and we'll get in touch.

So I found a recent email invite from Guy Kawasaki to attend Revenue Bootcamp, "a conference for entrepreneurs to energize their strategies for generating revenue," intriguing.

Here's who's speaking:

• Chris Anderson, the author of "The Long Tail" and editor of Wired Magazine, talk about "The Future of Pricing"

• Mike Moritz, general partner at Sequoia Capital and Google board member, talk about the outlook for high tech startups

• Paul Graham, founder of Y Combinator, talk about helping entrepreneurs start their companies

• Eighteen other authors, experts, and entrepreneurs talk about what it takes to win new customers, increase sales to your current customers, and expand your revenues in today's economy

Guy, the founder of Garage Technology Ventures, will also speak, of course. Check it out ... maybe I'll see you there.

Recession Strategies for Small Businesses

Brad Sugars wrote an article over on entrepreneur.com a year ago. But his 6 ideas are still very relevant. I particularly like giving your customers something to talk about (idea #2) and using sites like elance.com and guru.com to find smart folks to help you grow (idea #4). If you've been in my classes at Renaissance Entrepreneurship Center, then you've heard all of this already.