Financials for Your Online-Business Plan

             Numbers: The Language of Business

One of the biggest challenges you may face as a business owner when writing a business plan is “the numbers.” If you are unfamiliar with the financial side of things, you may shy away from putting together numbers, but it is a lot easier than you may think.

Numbers are just another way of expressing ideas, and for the financial section of your business plan, the idea you are aiming to convey is that you have a realistic and accurate picture of the money you need and how you are going to use it to generate a financial return. The numbers of your business plan are really the bottom line when analyzing your plan, and should include these sections:

1.      Start-Up Funding and Use of Those Funds

2.      Cash Flow Projection and Income Statement

3.      Break-Even Analysis

Many times, your “numbers” will receive more scrutinization than other parts of your business plan, so you should dedicate enough time to fully understand the picture you are painting. This scrutinization will come from people who know more about financial statements and reports than you can dream of knowing, but don't let that worry you.  As long as you have a conservative, workable plan, they will recognize the opportunity you are presenting. In other words, they will be comfortable risking an investment in you, knowing that you have a good strategy to provide income in return.

Furthermore, you don't need to be an expert with spreadsheets in order to compile your business plan financials The following sections will require just basic formulas and simple layouts that anyone can do.

So, let's get started!

             Start-Up Funding and Use of Those Funds

For this part of you plan, consider how much money  you need to start your business. Start-up funding includes one-time expenses that are required to get your business going, plus money required to maintain operations for the short- and long-term, until your business begins generating enough revenue to stand on its own feet. Some things to think about include:

            ·licenses

            ·inventory

            ·software

            ·computer equipment

            ·rent

            ·insurance

            ·salaries

            ·website costs

                        ·design

                        ·development

                        ·marketing

                        ·hosting

            ·shipping and packing materials

            ·office supplies and tools

            ·PR activities

                        ·press releases

                        ·opening events

                        ·other promotions

Compare your business to gardening. If you can imagine potting a new plant at the beginning of spring, there are several awkward weeks when you wonder if it's going to survive. Maybe, when you brought it home from the store, the roots were dry and new ones need to grow. Maybe, because of unseen neglect, it wasn't getting watered, or was left out in the sun too long until you came along and rescued it. At the end of the summer, however, if you've diligently tended to it, you'll be pleased to see that your plant is growing new leaves and sprouting beautiful flowers, and you'll be amazed at its beauty.

Your online business will experience awkward growth as you start, too. You need to give it time to “take root” and flourish. The start up costs you identify are designed to make sure you survive through those awkward first few months when sales haven't picked up yet and you are still building your client base. You need to insure you have enough resources to make it through—many businesses end up folding within a year of starting because not enough planning goes into short- and medium-term business financial needs, so take time now to prepare.

             Cash Flow Statement and Income Projection

Running out of cash is a business owner's worst nightmare. Therefore, you must outline week-by-week, month-by-month, and year-by-year (for the next three years, at least) exactly where the money will be coming from and going to. This information will provide you (and your investors) with peace of mind as you see the big picture unfold. This process can alert you to potential times of concern due to seasonality, and help you adequately prepare for the future.

The way to build this section is to simply imagine day-to-day activities and then portray them in the numbers. In your spreadsheet, you'll need rows for expenses and rows for income, then a row for the net result. Simply walk yourself through a scenario of operations.  What is your forecast sales volume? How many sales do you anticipate per day? Week? Month? What will be the variable expenses related to those sales, in other words, the cost of inventory? What about fixed expenses, such as rent, salaries, taxes, professional fees?  List everything you anticipate will be an income and expense for the upcoming time frame.

As you piece this information together, you'll begin to see times when sales may be low and expenses high, so you may risk cash shortfalls. It's good to think about such things before they happen so you can prepare for them and adjust your plan—that's the primary purpose of writing a business plan, in fact, to prepare you for the unexpected!

             Break-Even Analysis

The aim of your business it to make a profit. How long will it take? When will you be paying back your investors? Consider how much you will need to sell every day to break even in six months? One year? Two years? Three years? Which time frame sounds most reasonable, given market conditions and trends?  As you build your spreadsheet, adjust the numbers accordingly to find a time frame that seems achievable, yet stretches you. Double check this with your Cash Flow Statement and Income Projection to insure your numbers match. More importantly, double check your marketing section of your business plan to insure that you have the right marketing strategy in place to help you meet your goals.

You can read about building a marketing strategy for your business plan in a previous blog from HIT Web Design. Be sure to read “Marketing Your Online Business.” 

             Financial Assumptions

When it comes to analyzing your business plan,  realize that the underlying assumptions supporting the conclusions in your plan are much more important to consider than anything else. When a banker or potential investor reads your plan, they will be searching for those assumptions, and then weighing them against reality and their own experiences as business professionals.

As a result, you must know what the underlying assumptions are behind the sales forecasts and revenue expectations you are listing in your plan. How are those assumptions backed up by the research cataloged in other parts of the plan? Are the sales that you are forecasting consistent with those of other businesses in your industry? What market share of the industry do you plan to win? What does that represent in dollars? What about the information you uncovered about your target market? Is that group's buying trends and product preferences swinging in favor of your business?

             Enthusiasm is Contagious

Be prepared to defend your plan when asked. Don't buckle and wilt if you are questioned about numbers you've listed or statements you've made. Instead, let the enthusiasm for your business show through. You've done the research, after all, and you believe in yourself and what you have to offer, so let it show.

Enthusiasm is contagious, and if your investors don't see it in you, they won't dare invest.

For more information, please visit http://www.hitwebdesign.com or call 1-866-211-0743.

© 2010 HIT Web Design, L.L.C.

Marketing Your Online Business

Continue Writing Your Business Plan
Demonstrating its commitment to small business owners, HIT Web Design continues to provide insights aimed at helping you start or augment your online business. One of the biggest tasks you face is to write a business plan. We've been sharing with you tips and suggestions on important business topics that make the difference between success and failure. These articles are full of information and suggestions intended to help you in the writing of your business plan—something every business owner, whether new or seasoned, needs to do. In fact, many businesses take the opportunity at the first of each year to redo their business and marketing plans.

The information provided so far has focused on things like branding, identifying your competitive advantage, and many other subjects.

Now, we'll cover another important topic, marketing.

Every business plan needs a marketing strategy, and here we'll provide guidelines for you to follow so you can quickly grasp the importance of your Products, their Pricing, and their Promotion—the three Ps of marketing.

Get Information from Many Internal Sources
Before writing, you'll need to analyze a lot of information in order to create a viable marketing strategy for your business. Therefore, start internally, and work outward. If the company is yours, take time to reconsider your visions and goals for the year. Dream big. Ask yourself, “If money were no issue, and nothing was holding me back, what would I like to accomplish this year?” If you are working for someone and your task is to write the marketing plan, interview the company owners and top executives to find out what their expectations are for the business.

Next, talk to your sales staff. What goals are driving them this year? What are their sales expectations? If you are the sales force, what are your monetary aspirations for the coming year?

Armed with the big picture of your organization, your next step is to put together a marketing and promotion plan that will enable the overall vision of your company to merge into an accomplished goal by year's end.

Now, let's get started!

Identify Your Market
The first thing to do is research your target market. It's a big world out there. Who is it that you plan to sell your products to? Start with a broad description, then narrow it down to subsegments, and then analyze those segments—who are they, where are they, what do they like, what is peculiar about them, what do they read, where do they go?

There are volumes of information available about the Baby Boom Generation, Generation X, Generation Y, the Baby Bust Generation, the Echo Boom Generation, and the Sandwich Generation, just to name a few target markets. Your target market may consist of parts or subparts of these categories, or may be defined by your locality, your industry, or other categories. Figure out who it is you want to sell to and get as much information as possible about them from news articles, marketing forums, posts, and other sources. You'll want to know how much money they are spending collectively, what their ages are, how much money they make, their average family size, their common religions, their neighborhood details, what their occupations are—anything about them.

Next, you'll want to pry into their minds. What are their needs, attitudes, interests, lifestyle, and preferences?

MACRO Analysis
If you can ascertain the total market size in dollars for your target market, you can then determine what percentage of market share you can reasonably expect to capture. This is a top-down approach. For instance, if your online business sells to furniture buyers in a certain city where historically the market has totaled 600 million annually, and if you capture just 1.5% of the market, your online sales need to be at the $300,000 mark. Is that doable? What kind of a campaign do you need to organize in order to sell $300,000 worth of furniture to meet your goals?

MICRO Analysis
On the other hand, you can analyze your market from the bottom up. If your sales invoices have averaged $350 per sale, you can figure out that to hit the $300,000 mark, you'll need to make 867 sales this year. That's 16 sales per week. Can your website produce that? Do you need help your website out with some promotions to make sure?

More importantly, however, do people actually want 867 units of what you have to sell?

Analyze Your Product
Making sure you have a product that meets a demand and fulfills a need is a big part of any marketing plan. If your product is not reliable, is of poor quality, or simply isn't wanted, you'll either have to compensate with excessive marketing expenditures to create a hype and a large number of up-front sales, or you'll have to change your product mix. An example of creating a hype online recently occurred with the movie Paranormal Activity. The promotion marketing team realized they would need to create a huge hype to promote the film, because initial audience screenings indicated a lukewarm response, so they ran trailers on social networking sites showing not clips from the film, but reactions of the audience. This generated a huge “demand it” following that resulted in good initial revenue for the film, insuring that the producer were able to make a good return on their investment. That's the power of good marketing, and smart business owners never minimalize their marketing teams or obstruct their creative endeavors, even when there is no “bottom line” impact that is immediately obvious.

Positioning for Success
Positioning your product is a critical area of concern for your business and marketing plan: what makes you different? How have you taken steps to set yourself and your company above the competition? Consider pricing differences, product variations, process strengths, turn-around time advantages—all of these things, and more, will give you a competitive edge, and should be highlighted in your marketing and promotion efforts.

Price Your Products Right
The laws of supply and demand dictate your pricing strategy. Ignoring reality is a business owner's downfall. The higher the demand, the more you can charge. As demand sluffs off, you'll need to reduce your price to insure you sell your product. Things get more complicated for an Internet business, however, when shoppers can instantly compare your price with a dozen others. Thus, pricing on the Internet demands constant attention and research. A couple of dollars' difference between you and a competitor will cost you a sale.

Also, care should be taken to insure your shipping policies and pricing strategies are competitive. Shop around yourself on your competitors' sites to make sure your policies are in line (or better) than theirs. If you charge unreasonable fees and don't discount shipping (or offer free shipping for certain price breaks), then you will lose customers.

Timing
Before you jump the gun, your marketing analysis should consider whether now is the right time for you to start your business or introduce a new product or service. What market factors indicate possible success? What about your target market? Has its mood changed, making the field more fertile for your business? Are your potential customers actually ready for your products? Do your products match those preferences? What are their spending patterns? Have you built in time in your strategy to work out any kinks?

Are your customers influenced by seasons or locality? Seasonality of products is important to consider when pricing them. Take advantage of high-demand times and increase your price accordingly—don't leave money sitting on the table. Then, when the peak season passes, reduce prices and offer coupons or specials to clear out your inventory. Remember, every shopper loves to feel like they are getting a special deal and great savings, so design sales and limited-time promotions to attract bargain shoppers. When is the right time to introduce advertising, promotions, or public relations events?

Promoting Your Product
Getting people to your site and enticing them to buy is the main marketing challenge for Internet business owners. If you've done your homework on the market, the product, and the pricing, you'll be that much more ahead. But, your tasks don't stop there. Now, you have to promote your site and build your clientèle.

Offering sales and product price reductions to attract buyers is not your only weapon, thankfully.

HIT Offers Specialized Products to Give You the Competitive Edge
There are many techniques you can employ on your website to make it more competitive. Many of these features are available by contacting HIT Web Design. Using these products as part of your marketing campaign is essential to success. These marketing products have been carefully designed to capitalize on Internet habits and buying tendencies. Without such products, your website is not going to effectively capitalize on the traffic you do receive, and you'll find your profit being eroded because you aren't able to consistently sell your products at top dollar.

For instance, you can use HIT Convey, which immediately puts up important messages and promotions when someone arrives at your site so they get your most important message quickly. Research shows that many people know in seven to ten seconds whether or not they will stay at your site, so you have precious little time to capture their interest.

Constant contact with your customers is essential to keeping them. That's where Stay-N-Touch comes in. This product allows you to launch and manage multiple e-mail campaigns so you can provide your customer base with new, useful information about products, industry trends, and other important updates. HIT Web Design recently posted a series of four articles explaining how to make the most out of an e-mail campaign.

E-mail Marketing Tips, Part I: It's Time for a Newsletter Campaign
E-mail Marketing Tips, Part II: Offer More than One Newsletter 
E-mail Marketing Tips, Part III: Boost Your Open Rate 
E-mail Marketing Tips, Part IV: Get More Clicks

Other features include Web Traffic Director, a tool that steers people to your site, guaranteeing a certain number of site visitors. Additionally, target marketing becomes more precise with HIT Convert which allows you to get real-time information from you site visitors so you can fine tune your target marketing efforts with strategic insight.

In conclusion, careful attention to preparing a marketing strategy will help propel your business to greater profits because, in the process of putting the plan together, you will identity the strength of your products and the unique qualities possessed by your company that you can capitalize on.

For more information, please visit http://www.hitwebdesign.com or call 1-866-211-0743.
© 2010 HIT Web Design, L.L.C.

Advertising Your Brand

In previous branding articles, we’ve talked about what a brand is and why you should have one. We also talked about identifying your company’s brand. Once you know how you’re going to brand your company, you need to start thinking about how you’re going to share your brand with your customers.

Branding your organization is an important step in promoting your competitive advantage, distinguishing your business, and establishing a strong customer base.

Advertising your brand begins with your organization’s name and includes your logo, the central message, motto, or point you are emphasizing, and your customer service efforts.

This branding package gives you everything you need to begin creating a distinct identity for your organization, both online and offline.

Your branding should include:

·         Custom logo design

·         Branded organization letterhead

·         Branded business card

·         Branded envelope template

·         Watermarked background image

·         Custom branded e-mail template

·         Custom branded electronic newsletter template

·         Branded e-mail signature

·         A website

All of these and more are available through HIT Web Design. In honor of President’s Day, purchase HIT’s branding package, StayNTouch Marketing, and more, and save 20%. Just mention the promotional code “Jackson” to receive 20% off. This offer expires Feb 16th at 5pm MST.

Identify Your Company's Brand

Read this article on branding first…

What words listed below best describe your company or your products/ services?

·         Customer service

·         Established

·         Community service

·         Great deals

·         A name you can trust

·         Industry Expert

·         Reliability

·         Free Shipping

·         Unique products

·         Innovative

·         Experienced

·         Products that last

The list above is nowhere complete. Use it as a starting point. Really think about what you want your company to be known for. Identifying what sets your company a part from others is an important step in identifying your brand.

Many companies make these claims “the best customer service in the industry,” “over 50-years of experience,” etc. For your branding to be effective, you’ve got so do what you say. Some of the claims listed above are easy to back up. You offer free shipping, or you don’t. Others are more difficult to back up, but have a lasting positive effect if you do. Let’s take a look at Ben & Jerry’s as an example.  As you visit their website (http://www.benjerry.com/) you will notice one of their page names is “Activism.” Click on the link to the page and you find out how they’re involved with everything from supporting family farmers to reducing CO2 emissions.  Read Ben &; Jerry’s mission statement and notice how it is part of their branding effort.

After you know what makes your company unique, it’s helpful to see how your completion is branding themselves. First of all, you need to identify your competition. After you have identified them, take a look at their site and see how they are branding themselves. Finding out what you do better than your competition can help you establish your brand.

I looked at some websites to see if I could identify a company’s brand. I Googled “lawn care company” and looked at the page descriptions for the first 2 pages of web results for examples.

World's largest landscaping and lawn care company. Describes residential services, presents special offers, and features extensive lawn care and landscaping ...

We are St. Louis' premier lawn maintenance company. Beautiful Lawns in the St. Louis, MO area. Missouri, Lawn Mowing company, Total lawn maintenance service ...

Industry-leading lawn care & gardening advice. Indoor & outdoor lawn and garden products and services. Great tips on gardening, yard care, landscaping, ...

The Tree Expert Company is one of the oldest and most prestigious tree, shrub, and lawn care companies in North America, we provide a number of ...

Compare these with HIT Web Design’s page description.

HitWebDesign.com
HIT Web Design creates innovative custom web design starting at $199. Providing small to medium businesses with affordable website design and management ...

What are these companies saying about themselves? They are saying “we’re affordable,” “we’re experienced,” “we’re specialists,” “we’re innovative,” “we’re a leader in our industry.”

After you know what you want to say about your company, it’s time to think about how you want to say it.

HIT's Facebook Page a Helpful Resource

HIT Web Design is now on Facebook! Become a fan of HIT Web Design on Facebook and learn things you might not know, including: Design Tips, Small Business Helps, and updates on Haiti's Little Angels.

HIT and Haiti's Little Angels – Stay Updated on Recent Developments

• HIT has been keeping fans regularly posted about the latest developments in Haiti. The company  formally adopted the Haitian orphanage, Hope For Little Angels of Haiti, in December of 2008 and has been instrumental in funding the orphanage's food, medical, clothing, and clean-water needs.

• CEO David Aitken recently adopted three Haitian children from the orphanage, a process that began in November 2008. The weeks following the 7.0 earthquake that rocked Haiti have been highly emotional for Aitken, who initially did not know if his soon-to-be adopted children were safe after the quake to experience the elation bringing them to his home in Utah. Utah's statewide newspapers and television stations have been covering Aitken's saga, and links can be found on HIT's Facebook fan page.

• Since the quake, all 68 of the Little Angels orphanage have been found alive and safe. HIT Web Design, which has been providing employee-donated funds for over a year to the orphanage, will be helping it rebuild after the quake.

Stay Informed with Helpful Blogs and Videos

• We posts helpful blogs and videos describing ways you can improve your website, with topics ranging from optimizing your site for search engines to design tips to effective small business practices. Links are regularly posted on Facebook, and provides an easy-to-access resource to become more educated on building your business online.

• HIT is also developing a following on Twitter . We post links to blogs posted everyday on our website. You can also find us on YouTube .

Small Business Building: What is a Brand?

When customers hear your company’s name, what thought comes to their mind? Do they think of your friendly staff? Maybe a great price on a product? Free shipping? Excellent technical support?

If you are a budding entrepreneur with a great idea for a product or service and you’re ready to build a website to launch your online business, then add branding to your list of things to do for starting an online business.  If you already have an online business and it isn’t succeeding like you want it to, then it’s time to start branding.

What is a Brand?
A Brand is more than a logo. A logo is a symbol. A brand is a promise.  Your logo doesn’t mean much if you don’t have a solid brand. A brand is used to create trust between your company and your customer. When they think about your company, you want an automatic impression to come to their mind.

A campaign can have a brand. A company can have a brand. An individual can have a brand. Logos, advertising campaigns, and websites are used to create a brand. Some well-known brands include BMW, Coke, McDonalds, and Ferrari.

Why Should you Care about Branding?
Branding can help make your online business successful. How? A brand will help build trust between you and your customers. This trust leads to loyalty. Loyal customers become raving fans of a product or service and start to advertise for you—t-shirts, hats, bumper stickers, and the all important word of mouth.

Are you willing to pay more for a product if it was created by a brand you trust? Look at the clothes you wear, the car you drive, the food you purchase. Why did you purchase those items? In part at least, your purchase was based off of the brand name— you trust the makers of those products.

Can your customers trust your company? Do they feel like they know your company? A strong brand introduces your company to your customers. The customer can relate with your company on an emotional level if you’ve got a strong brand.

To build a brand you’ve got to create a brand. After you’ve created a brand, you’ve got to market it to your employees first, and then the rest of the world. In order to keep your brand intact, you’ve got to keep the promise(s) of your brand. So, what is Your Company’s Brand? If you’re not sure, don’t worry. This series of articles will help you determine your company’s brand and how to market it.

Don’t let your company get swallowed up in the Internet wasteland. Bring it to the forefront with branding.

Read more about branding here...
To learn more about how to help develop your company's brand, call 1-866-211-0743.

Competitive Advantage and Call to Action Part III

Competitive Advantage and Call to Action Part I
Competitive Advantage and Call to Action Part II

Your call to action ties in directly with your competitive advantage. Think of your website as another marketing piece. Even if you are not selling products or services through your site, you are selling yourself and your organization. Use your landing page to guide your visitors along, and encourage them to take some kind of action.

Do you want your visitor to fill out a form? Purchase a product? Learn more about your company? Make that your call to action. Once you have identified what you want your visitor to do, make that the focus of your landing page. Say it in words, use an attractive graphic, and do not be afraid to repeat your call to action.

Offer an Incentive
A great way to make an effective call to action is to create a sense of urgency with your message. Here are some common techniques used in a call to action.

• Deadlines for ordering.
• Free gifts for ordering within a certain time frame.
• Notification of a future price increase.
• Offer a free trial / introductory rate.
• “No Risk” trial.
• “Not available in stores.”
• Limited availability.
• Free accessory with purchase.
• Free upgrade for ordering within a certain time frame.
• Create a race. “First 100 respondents…”

Don’t Be Passive
Do not be afraid to tell you customers exactly what you want them to do. Use phrases like “Call now!” rather than “Contact us when you’re ready.” Spell out exactly what they need to know, “Mail us at…” instead of “you know how to reach us.”

Stay current on the latest products and web trends at www.hitnewsfeeds.com . 

Adopted Haitian Orphans Arriving in Utah

Provo, Utah – February 3, 2010 – David and Candice Aitken are set to begin a new chapter tonight as they arrive in Utah with their three adopted children from Haiti.

The Aitkens will arrive in Salt Lake City on a Continental flight from Miami around 11:30pm. It is the final major step in the adoption process for Haitian orphans Nerlande (5), Yonelson (4), and Fabrice (8).

The past few weeks have been extremely emotional for the Aitkens. In the wake of Haiti’s devastating earthquake, the Aitkens spent several sleepless nights worrying about whether their children were okay.

Last Friday night, the Aitkens received a phone call informing them that all of their kids were getting on a plane to Florida. However, at the last minute, Fabrice was not allowed on the plane from Haiti, after his paperwork was misplaced.

After several more frantic and frustrating days, on Tuesday Fabrice was finally allowed to join the Aitkens in Miami.

The Aitkens are excited to begin their new life together in Utah. However, the Aitkens’ involvement with Haiti is not over. David Aitken, CEO of Provo-based HIT Web Design, says his company will help rebuild the damaged Hope for Little Angels of Haiti, the orphanage HIT has been sponsoring for the past year, and where his adopted children were cared for.

HIT Web Design is a Provo, Utah-based company specializing in designing and hosting affordable and effective websites for small and medium-size businesses.

Visit HIT Humanitarian at http://hithumanitarian.com
Visit Hope for Little Angels of Haiti at http://hopeforlittleangelsofhaiti.org
Visit HIT Web Design at http://www.hitwebdesign.com

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