Should Small Business Owners Rely on Google?

Let me start by saying that Google are not out to hurt small businesses however they often do. For many small business owners the idea of being on the first page of Google for meaningful phrases within their industry is very attractive. If done properly Search Engine Optimisation (SEO) can have a massive impact on the visitors and ultimately sales or leads a small business generates through their web site.

The problem is most small business owners want to target the most generic of phrases i.e. “New Car” which has a huge amount of searches each month and so is very competitive and therefore a small business would have to invest a lot of time and money to achieve this. Often entry level SEO Companies will promise the earth when it comes to delivering phrases like this and will often give unrealistic time frames and unrealistic costs. The problem here is that it takes a small business 3-4 months sometimes to find out that these promises are unrealistic and therefore 3-4 months have been wasted not only from a cost point of view but from a lead generation / sales point of view.

There are other issues when it comes to targeting generic phrases like this in that even if a small business found a partner that could deliver these phrases in a timely fashion because they are so generic and because the search volumes are massive then the leads generated can often be very high. Just what the Doctor ordered you might think however the leads tend to be wildly different in quality from very early stage researchers, to clients ready to buy now and so unless you have the infrastructure, team and processes to qualify, filter and nurture all of these leads then many will get wasted.

So how does Google fit into this process?

There are typically three types of SEO Company:

Entry level SEO Companies who concentrate on very long tail phrases (very specific like “New Car for sale in the South of England”) which generate little if any searches and therefore little if any traffic and ultimately little if any leads / sales. These companies will typically concentrate on a little on page optimisation and very little if any link building.

Agency style optimisation companies – the agency model works very well with bigger blue chip companies who want a bespoke service have the time and money to invest on generating good quality generic phrases and have the people in house to manage and quantify the leads and enquiries. This type of model involves employing real quality SEO specialists who take a bespoke view on each client when it comes to their optimisation both online and offline. This model works well when a specialist has 5-10 accounts to work with and the company charge a lot of money for each project. This means that when Google makes changes to their algorithms they have the time and resource to make the changes necessary for each client. The problem with this model is when it is employed for small business owners because the company cannot charge a lot of money, therefore the SEO Specialist has to work on 60-100 plus clients and so even if success is achieved in the first instance when Google makes changes the SEO Specialist and company are incapable of coping and keeping up. The big problem here is that often the small business owner has come to rely on the traffic and sales from Google and if they lose these the impact can be massive.

Specialist Small Business SEO Companies – There are surprisingly very few companies who are specialists in this field and the big difference between this model and the agency model is that the companies who do this have developed world class processes and often software so that their specialists can handle multiple accounts and therefore truly keep the cost of optimisation low. The major difference here is that if Google do make changes then because of these processes and software the specialists can implement the necessary alterations to client sites instantly, seamlessly and with minimal impact to results ongoing. This type of company tend to focus on quality long tail phrases which do generate good profitable traffic however they will also have software that helps the small business owner maximise this traffic by making improvements to the whole of the online sales funnel and turn it into leads and sales.

Google are always making changes to their algorithms to prevent spammers, unscrupulous affiliate programmes and companies involved with the likes of click fraud. The problem is a lot of these companies produce small poor quality web sites to do this and so Google are always moving towards better quality, content rich, constantly updated web sites to feature high on their rankings. Unfortunately small business owner web sites tend to be more like the spammer model than they do the blue chip model and therefore often get affected by Google’s changes albeit quite innocently.

It is essential therefore if you are a small business owner that you look beyond the initial three months and the glamour and allure of the “Big Phrase” and work with a partner who can deliver long term sustainable leads and sales via your web site and can cope with the whims and moods of Google.

Why DRLG Is The Most Powerful Form Of Small Business Advertising

There’s certainly no shortage of small business advertising opportunities available to entrepreneurs.

Sadly, most are woefully ineffective when it comes to truly bringing the small business a positive return on investment.

The reason:

Most small businesses use a common form of advertising commonly referred to as institutional or brand advertising.

You know what this is…

It’s when a business attempts to “brand” their name in the minds of prospective customers similar to the way big Fortune 500 companies do.

Unfortunately, this approach to advertising requires lots of advertising capital – something most small businesses don’t have – and lots of time to actually, if ever, achieve top of the mind awareness.

As well, brand style advertising isn’t trackable and doesn’t generate immediate results – something almost every small business requires when investing capital in advertising and marketing.

This is why two-step advertising, commonly referred to as direct response lead generation (DRLG) advertising, is the best choice for smaller businesses when it comes to generating new customers, clients or patients.

For clarification purposes, DRLG is focused on generating an immediate response from recipients in the form of generating a lead.

Meaning: the primary goal of DRLG is to generate a qualified lead.

Once the lead is generated, it gives the small business the opportunity to plug that lead into a follow-up contact system (like an email autoresponder). This is an incredibly valuable aspect of DRLG because as most entrepreneurs intrinsically know… the fortune in advertising and marketing is in the follow-up.

For example:

When a chiropractor uses DRLG as their primary chiropractic advertising approach, they will convert more prospects into patients from the follow-up contacts than they will from the first marketing contact (or initial contact point).

But, the ability to follow-up with leads is really just the beginning of what makes DRLG so powerful and effective for small businesses.

The next huge benefit is that because DRLG asks for an immediate response – generating the lead – it is easily trackable. This provides small business entrepreneurs with the ability to hold every dollar they invest in advertising accountable for a positive return on their investment.

Next, when DRLG is done properly, it also gives the entrepreneur the opportunity to segment leads into specific follow-up sequences. This increases conversions because it allows the entrepreneur to deliver highly-compelling, targeted follow-up messages to leads.

Again, let’s take the chiropractor.

A DRLG chiropractic advertising campaign could include several different follow-up sequences for different types of leads (i.e. back pain, accident recovery, general health, etc.). And, anytime you a small business narrows their focus when marketing, they’re better able to craft a more compelling message that resonates with prospects.

Lastly, because DRLG advertising always include a lead generation offer – offer being the key word – it generates an immediate response. Meaning: when it’s done properly, it brings in money right away.

Overall, compared with brand or institutional advertising, DRLG brings so many exciting (and profitable) benefits to the mom-and-pop entrepreneur, without the huge outlay of capital or the time requirement. It really should be a no-brainer for the small business entrepreneur. Try it for yourself and see.

A Sample Business Plan for a Small Business May Not Be the Best Way

You can find a sample business plan for a small business in all kinds of formats. There is a sample business plan for a small business where you basically fill in the blanks or you can have access to a sample business plan for a small business where you can pattern yours from it or you can develop a business plan that is centered on what you want for your dreams and your life.

I don’t know of better way than to let your business give you what you want for your lifestyle. Whether it’s a sample business plan for a small business or one where your business gives you a plan, it should tell you what is needed to take you where you want to go and when and how you can get there and it should be in clear simple terms, supported with all the specifics.

So using a sample business plan for a small business is just one of many ways to make a business plan but frankly I think designing one that will have your business give you exactly what you want is by far the best way.

So, why not start out with what you would like to have in life for you and your family? Then develop a business plan that could show you exactly what your business would need to do to give you that life style. If you think about it, there is no other way where you have more control over what you want in life than letting your own business do it for you. If you work for someone else, you’re sure not going to have as much control over your future.

So how would you go about making a plan like this? Well if you know a fair amount about business, you can. It will take some special calculations and some work but if you know how to put together a Profit & Loss Statement, you can probably do it.

You would first do a P&L for the present year for your existing business and the first year and as many years after as you would like to have your plan cover. Your existing business financials will be the foundation for building yourself a business plan for as many years out as you want. This data will tell you a number of things but first if you want to build your plan around what you want in life, you would need to decide some things about your life:

1. You would need to decide how much income you would like to have for yourself for each of the years you plan for.
2. You would need to determine what kind of profit margin you would want from your business for each of the years.
3. And by combining these 2 things into a P&L format you can develop a financial business plan that can extend as for into the future as you would like.
4. The first thing it will show you is how much sales you would need each year to give you the income and profit you would like. Once you see the sales needed, if you know your business well enough, you should be able to estimate those additional expenses needed to overcome capacity constraints that will occur as your business grows.

With this information you can actually predict not only what your sales will be, but you can see how much your fixed and variable expenses will be, what your labor cost will be, your material cost, and your profit.

1. So let’s first look at what exactly are fixed expenses? They are exactly what they say they are; they are fixed. This simply means these are expenses that are ongoing whether you have a lot of sales or “0” sales. They are expenses like utilities, taxes, rent, salaries other than the wages used in the making of the actual product or doing a service, business fees, telephone, etc. See how these expenses would continue on even if you have 0 sales? Any expenses that fall into this category are fixed expenses. Far too many small business owners never divide their expenses into fixed and variable. As a matter of fact, if you could have a business that had “0” fixed expenses; this would be the best of all worlds, why? If you had “0” sales, you would have “0” expenses. So the closer you could get to this the better you would be.

2. Variable expenses are those expenses that track directly with sales. If sales stop they stop. These are expenses like supplies used to support in the making of your product or doing your service. Such things as shipping cost for raw materials for your product or service. If you have no sales then you’re not going to be purchasing materials so your shipping cost for those materials will stop as well. As an example, if you have a lawn mowing business and there are no lawns to mow, then you wouldn’t be buying gasoline to travel to your lawn mowing site. These kinds of things are variable expenses. If you’re producing a product, it would include supplies used to produce that product like sand paper, glue, finishing materials, cutting tools, etc.

3. Labor and material costs are also directly proportionate to sales. These are things that go directly into the making of the product or into doing the service.

a. Labor cost is the actual direct labor used in the making of product or doing the service. The cost would also include all the fringe benefits like social security, payroll taxes, vacation pay, holidays, sick pay days, etc.
b. Material costs are all the materials used in the making of product or in doing the service. In the lawn mower service as an example it would be the gasoline used in the mower and any other materials used directly in that service. For producing a product it would be all the materials used in the product that is sent to the customer including all the packaging materials.

Average Selling Price

Now when you calculate your average selling price which is your cost of sales (material + labor) divided by (1-gross profit), you can determine how many customers you would need and then come up with what you think your conversion rate would be for converting leads to customers, you can determine how many leads you would need. Then from this and with the aid of the U.S. Census Bureau and some basic research on your own you can actually have a pretty decent idea of what size your market is and is going to be in the future so you can see if it will support your business plan or not.

So if you can put this all together, you can have a complete business operating plan that would show you exactly what your business would need to do to give you the income and profit you would like to have and a rough idea whether your market would support it or not. All you would have left to do would be to figure out how to make it all happen.

It’s like planning backwards.

1. Determine what you want in life
2. Figure out what your business would need to do to give you that life.
3. Figure out how long it would take you to reach it.
4. Figure out how big of a market it would take each of the years you’re planning for.
5. Then see if that market is big enough.

Isn’t this a much better way to go about planning your business? Shouldn’t your business be designed to give you want you want instead of you working yourself to death just hoping for the best?

So how would you go about calculating all this?

There is quite a bit of calculations and you should know a little about business principles but it isn’t that complicated. So first let’s look at figuring out your future needed sales with this formula:

Projected sales = fixed expenses divided by (1-(var exp % of existing sales + mat cost % of existing sales + lab cost % of existing sales + desired net prof %))

So, let’s say you existing sales is $850,000 annually, your fixed expenses are $275,000, variable expenses is $55,000 or 6.5% of the $850,000, material cost is $236,000 or 27.8%, labor cost is $109,000 or 12.8%, and your existing profit margin is $175,000 or 20.6%.

Now let’s say next year you want to have a profit margin of 25% so what would your sales need to be to give you that profit margin? Now you might think you would simply tack on 4.4% more to sales (25% – 20.6%) and you would have it. Well not quiet. it doesn’t work that way because you are going to have the additional variable expenses, material cost, and labor cost too. Remember, the more sales the more each of these expenses and cost will be.

So here is how you would do it:

Projected sales = fixed exp ($275,000) divided by 1-(6.5% + 27.8% + 12.8% + 25% (your new profit margin) = $896,057 (new sales)

You can do this for as many years out as you want. Obviously this is based on your first year’s fixed expenses remaining constant and no consideration of depreciation, inflation, or taxes.

But most likely you would need to increase your fixed expenses because you’re going to probably have more rent, utilities, or such as your business grows. So, you would simple put in your new fixed expense number in place of the existing one for each of the years you would be planning for.

So, you see if you decided you wanted a 35% profit margin at year 5 then you could see how much sales it would take to give you that.

Now it’s also important to know how many more customers you would need as well so you should always look at that unless you have another way of growing your sales other than with new customers.

Let’s say your average selling price for your service is $925.50 and you have one transaction per year per customer.

Using that first years sales example we used above, you would calculate it this way.

$896,057 divided by $925.50 = 968 customers needed for the year. Now if your average transactions per customer are more than 1, then you would need fewer customers. As an example, let’s say your average transaction per customers per year is 2.5 then 968 divided by 2.5 = 387 customers per year.

Now let’s say you estimate your conversation rate to be 3% of turning leads into paying customers with the advertising method you’re going to use, how many leads would need to contact to get 387 customers? Simply divide 387 by 3% and you get 12,909 leads you’re going to need to contact.

Then the question is; is your market going to be big enough to provide you with 12,909 leads for the next year and how many will you need each of the following years?

It may be easier than you think to figure this out. You would do some research and with the aid of the U.S. Census Bureau you can roughly determine whether your plan can be supported by your market or not.

So what do you think? Is it better to build a business plan around what you want in life then see how your business can maybe give you that or is it better to use a sample business plan for a small business where you are probably guessing?

I’d love to help you some more. Please go to http://www.StrategicBusinessSolutionsLLC.com and see what might be available.

Why Have A Lead Generation Website As Part Of Your Internet Marketing For Small Business Strategy

A local business owner in any niche will benefit greatly from having a lead generation website as part of their internet marketing for small business strategies as it is a way to establish and develop relationships with your customers.

Here are some of the ways in which you can benefit from setting up a lead generation website.

Many people today are looking on the internet for the information they need. They are even searching the internet for local businesses in their community. As more and more people get access to smart phones and laptops as well as other internet enabled devices they are using these devices to find the information they seek.

Therefore, if you, as a local business owner, wish to be found by the very customers who need your services – you need to have a website that will tell these customers more about your business and its services. A website can very easily tell your visitors a great deal of what your business can offer them. A printed advertisement is not able to display as much information as a website.

If your website is a lead generating one you will be able to capture all the details of visitors who arrive there. These details will enable you to connect with them via a permission based email marketing system in which you engage and form a relationship with them. This relationship will allow your customers to know you well enough to be able to trust you with a purchase. Research has shown that people do not readily buy from a stranger, and that it takes up to seven points of contact before someone will make a purchase. This means that regular emails to your prospective customers are very important.

Having a website makes it a great deal easier for current customers to recommend you to other prospects, and for you to direct people you meet to it. Once you have a website you can advertise it on your company business card, on infomercials, on letterheads and on a whole host of other advertising methods. When sending out emails it is a good idea to include a brief signature line at the end of it with a link to your website.

You can also promote your business’ special offers or irresistible offers on your website to further attract additional customers to your funnel. Once your website is set up there is no additional cost to advertising with it. You are able to edit and make changes every time you wish. If you advertise through the Yellow Pages your advertisement is fixed for a whole year and costs a great deal more.

As you can see, setting up a lead generation website is an important internet marketing for small business strategy that will enable you to attract more customers at no additional cost.