Customers always come first!!!

From the SBDC Vault

By Michele M. Miller
SBDC Director

At the Small Business Development Center of Northwest Illinois (SBDC) we believe the top five reasons for business failure are:

• Poor planning or poor preparation. Lack of a well-written business plan
• No working capital (money)
• Poor choice of locations
• Not understanding your market (customer needs)
• No marketing (let people know you are here)

So how do you know what your market, i.e. your customer’s needs are? Think about this from the point of view of your customer. What product or service do they want? Why do they want it? What makes your product or service different from your competition?

Let use an example that will demonstrate this point: We are a hungry family of four and have a limited budget. It is 6:00pm and everyone is ready to eat now! We have to make a decision on a place to eat. Did I mention that we only have an hour before we have to be at little Jeannie’s music recital? By the way, it needs to be accessible, because mom has special needs. Here’s our thought process:

• We need a restaurant that has quick service (address our time limit concern)
• We need a restaurant that offers a variety of choices (our four family members)
• We need a location that is close by (we are hungry now)
• We need a family oriented location (our family of four)
• We need a restaurant that offers a menu that is affordable (limited budget)
• We need a place we all like (family of four has four different opinions)
• Accessible and comfortable (mom's special needs)

Do your customers really go through this type of thought process when they make a decision on going out to eat? Absolutely! As the owner of this restaurant you need to know what your customers want before they know they want it!

Here are some resources you can use to find out what your customers want and how you can make your establishment “THE” business. You need to analyze your market.

According to the Small Business Administration all customers have four essential characteristics:

• They have a particular need. People have all kinds of needs including basic survival needs (eg., food, shelter, health), rational needs (eg., dependability, durability, economy), and emotional needs (eg., love, sex appeal, status, security, acceptance, and power)
• They have enough money to buy what you are selling. Keep in mind that just because someone wants to own something you are selling does not mean they have enough money to buy it
• They have decision-making power. The key here is to spend your time wisely. Find the person who has the actual authority to say "yes" or "no" to buying your product or service
• They have easy access to your product or service. Accessibility is important. For example, if you wish to sell baked goods to people in your neighborhood, you must either take your goods directly to your customers or have a small shop where they can come to you

Based on these common characteristics, your job as a business owner is to answer the following four questions:

• What need does my product/service satisfy?
• Who needs and can afford what I am offering?
• Who has the authority to say, "yes" to the product/service I am offering?
• How accessible is my product/service to my customers?

Your answers to these questions form the foundation of your marketing research effort.

Once you have addressed these questions you need to understand the state that makes up the market (customers) that you are looking to buy your products or services. The US Census website has information to address this. There are also experts in your local community that have community profiles that document the numbers of people that live in your communities.

In your business industry there are also associations that have this information available. The Encyclopedia of Associations (available at the Highland Community College library and others) will give you listings of Associations that are available for your industry. What can they offer you? The right association can offer you a State of the Industry report (an idea report that gives you information about your market, trends, expectations of the future, and much more). Trade shows, mentors and other training features.

There are also market analyses available for purchase from companies. These reports can be a valuable tool to use but be careful; the company should be from your area or have a deep knowledge of your area and your industry. They can be costly, so be sure you know what is in the report, what are the features of the report, and cost for annual updates.

This is just the beginning of the in depth market analysis you should have about your market (customers). Not knowing this information will cost you your business.
Need more help? Contact our office: The Small Business Development Center of Northwest Illinois at 815-599-3654 or email us at Michele.Miller@highland.edu. We are here to help!

Year in Review

Happy Anniversary!

It has been exactly one year that the Blackhawk Hills E&I Club was created and held its first meeting. So far, we have met 11 times in a handful of different places covering a wide variety of topics. We have had over 100 different people attend with around 30 to 40 regulars. We have had people drive as far as Indiana and Cedar Rapids, IA to attend our meetings, and two other clubs have been created after our model in the Quad Cities and in Ottawa, IL. Several of our members have been very successful over the past year. However, we have never officially surveyed you, the club member, on how you are benefiting from the club.

Please take 2 minutes to fill out the following online survey. Preliminary results will be announced at Thursday’s club meeting with the final results posted on www.businessblender.org later next week. Have a great week and we look forward to seeing you this Thursday night!

Click here to take survey

Thanks,

Dave, Russ, Michele, John and Greg

Lifestyle Entrepreneur Shares Secrets to Help Women Create a Successful Business

San Diego (October 27, 2006) - A new website launched this week to
help women struggling to create businesses that suit their
lifestyle. Women in Biz (www.women-in-biz.com) contains a variety
of features from tips, solutions, helpful articles, and business
tactics from Lifestyle Entrepreneur Heather Moore.

Moore is a lifestyle entrepreneur and CPA who teaches other women
to have success in their businesses on their own terms. She worked
in the cubicle world of corporate America for more than 10 years.
Although she enjoyed her work very much, she was looking for
something new, exciting and challenging. Not wanting to limit
herself to just on of her skills, Moore has developed several
businesses that fit her lifestyle, including selling Mary Kay
(www.marykay.com/heather_moore), helping people with taxes, and
providing a card sending service at www.thecardshoponline.com.

"Women want to create businesses that suit their lifestyle. For
some, they want the ability to work at home with children. Others
want to be independent, instead of working for someone else." says
Moore.

She points to a research study Warrillow and Co., that says as 90
percent out of roughly 20 million American small business owners
appear to be motivated by lifestyle more than money. "With women
starting businesses at twice the rate of men, I wanted to provide a
resource for women to be able to create a business that helps them
achieve the lifestyle they want."

The content on the website includes Moore's personal tips and
techniques on creating and growing a business: from time management
to getting your taxes done to finding a business that's a perfect
fit. It also features articles by experts in their fields to help
women business owners get the help they need.

My Website Rocks and I'm Filing Bankruptcy???

I bet we all know at least a dozen friends who have websites, and each one of them claims that their website is the best one in the world. I'll admit I do brag about this blog and our website, but they don't bring in a lot of money. Well, not yet. If you have a really nice website, but you aren't getting the necessary traffic to make a buck, then you need to visit Crain's Chicago Business article "How to Build a Better Website" on how to increase traffic to your website. I'm definitely going to use it.

dave

Pick an Entrepreneur's Brain - NOW!!!

Some of you have noticed the increase in posting lately, but I have been on a rampage of cleaning out the drawers and the top of my desk. Strangely enough, I have found myself diving into the entrepreneurial hemisphere and boom, now my desk is even more cluttered, my inbox filled with newsletter subscriptions, and more importantly this blog full of posts. So far I have found some really good stuff online, but this one takes the cake. Thanks to the Center for Rural Entrepreneurship, I found Entrepreneurship Week USA and their Ask-An-Entrepreneur tool, where real-life entrepreneurs answer your questions and it's worth it. Check it out and pass it on to your friends.

Dave

EntrepreneurshipWeek USA - February 24 - March 3, 2007

EntrepreneurshipWeek USA is looking for passionate and enthusiastic individuals to serve as Ambassadors in all 50 states. These ambassadors will leverage their network of contacts and relationships to help build an entrepreneurial ecosphere through the EntrepreneurshipWeek USA website. This could mean recruiting additional organizations to join as partners, engaging local entrepreneurs and business leaders as EntrepreneurshipWeek USA champions, talking to local media, and encouraging everyone they know to plan and participate in activities during The Week. If you or someone you know might be interested in serving as an Ambassador, please visit www.entrepreneurshipweekusa.com/partners/ambassador-signup.htm to sign up. And, don't forget to check the EntrepreneurshipWeek USA website regularly for new information about events and activities planned for that week - www.entrepreneurshipweekusa.com.

Make the State of Illinois Your Next Customer

The State of Illinois purchases over $10 billion worth of products and services each year. Are you competing for this business? The state of Illinois needs virtually everything consumers and businesses need. All you must do is view, sign-up and bid!

Learn more! Visit http://www.sell2.illinois.gov.

SBA Launches New Markets Lending Initiative

The U.S. Small Business Administration has launched a pilot program to provide financial assistance to small businesses in economically distressed urban and rural areas, or “New Markets,” that need the economic attention to get communities back on their feet. The initiative provides incentives for commercial lenders and local development organizations to make more SBA-guaranteed loans in these communities.

The New Markets Lending Initiative will help small businesses by enabling Community Development Entities (CDEs) to combine the benefits of both the New Markets Tax Credit (NMTC) Program and SBA-guaranteed loans to provide inner-city and rural small business owners and entrepreneurs greater access to financing and business training. “We at the SBA are committed to helping American small businesses in economically distressed areas,” said SBA Administrator Steven C. Preston. “We believe that this initiative can encourage jobs creation and growth in low income areas, an essential part of the President’s economic agenda.” Administered by the Treasury Department’s Community Development Financial Institutions Fund, the New Markets Tax Credit Program permits investors to receive credits on their federal taxes of up to 39 percent of investments made in investment institutions called Community Development Entities.

The SBA pilot program, which is only available to 7(a) lenders making new loans through advance-purchase commitments with CDEs, waives a regulation that limits an SBA lender’s ability to sell any portion of an SBA guaranteed loan to anyone other than another SBA lender. The waiver allows CDEs with New Markets Tax Credit allocations to purchase up to 90 percent of SBAExpress or CommunityExpress 7(a) loans up to $150,000 made to NMTC “qualified” businesses in low-income communities. These new loans are guaranteed by the SBA. The New Markets Tax Credit Program is expected to spur approximately $16 billion in investments into CDE investment institutions. It was created by Congress through the Community Renewal Tax Relief Act of 2000. By leveraging the SBA’s resources with the Treasury’s NMTC program, this new initiative will provide additional access to loans and technical assistance to both start-up and existing firms in New Markets. Under the program, CommunityExpress lenders will assist CDEs to provide small business borrowers with a package of services including mentoring, coaching and counseling

Small Business Innovation Research Conference

November 6-9, 2006 - Milwaukee, WI

If you are an innovative business developing environmental or other technologies, you will want to attend the 2006 Fall National Small Business Innovation Research (SBIR) Conference in Milwaukee. If your business can benefit from part of the $2+ billion in federal SBIR grants and contracts, then this conference scheduled November 6-9 at the Milwaukee Hilton City Center is a tremendous opportunity. Through SBIR, 11 federal agencies, including the Environmental Protection Agency, provide funding to advance R&D projects conducted by small business (500 or fewer employees) that address national priorities.

This conference will teach registrants how to effectively participate in the SBIR program. The agenda includes sessions on proposal strategy, grant management, intellectual property issues, and financing and technology commercialization topics. SBIR program managers from all participating agencies will be available for one-on-one meetings with companies.

Visit the National SBIR Conference web site for program and registration details: http://SBIRworld.com/WI.

The Illinois Technology Development Alliance cordially invite you to the next Monday Morning Meeting

SAVE THE DATE!! Monday November 13, 2006,
Hilton Garden Inn, 1818 Maple Avenue, Evanston, IL

The Illinois Technology Development Alliance provides companies, seeking investment capital and business development leads, the opportunity to present at its Monday Morning Meetings. Selected companies deliver their presentation to an audience consisting of fellow entrepreneurs, angel and institutional investors, entrepreneurial assistance organizations, industry experts and service providers. Presenting companies receive critical feedback on their presentations, and assistance in addressing questions and concerns that prospective investors would likely raise. In addition, attendees will be able to network and discuss business opportunities with established members of the community. This event is held the second Monday of every other month.

RSVP Online: www.illinoistechnology.com/events/list.php