Author: Ethan Theo

Abe WalkingBear Sanchez is an International Speaker / Trainer / Consultant on the subject of cash flow / sales enhancement and business knowledge organization and use. Founder and President of www.armg-usa.com, WalkingBear has authored hundreds of business articles, has worked with numerous companies in a wide range of industries since 1982 and has spoken at many venues including the Shakespeare Globe Theater in London.

Categories
Branding

How-to Uncover the Razorblade Model for Your Business [with Examples]

How-to Uncover the Razorblade Model for Your Business

Gillette sits as #18 on Forbes’ Most Powerful Brands list. How does a company that sells disposable razorblades for mere pennies on the dollar have a value of $16.8 billion dollars?

It’s because they leveraged what we now know as the razorblade model of business.

The business came about due to the creation of a disposable safety razor which coincidentally required the use of the blades made by whom? Gillette.

The basic principle of the razorblade model is to leverage a lower priced item (often labeled as a loss leader) in hopes that the customer comes back to your business which offers a premium component to said item. The lower-tiered item should, in theory, be valuable in its own sense but having access to the premium product increases its value and longevity, for the consumer.

These types of businesses have become commonplace.

Take a look at the printing industry which has a stronghold on printing supplies. Keurig, too, has a dominant share on the single cup brewing industry thanks to the inexpensive machine but premium priced K-cups.

The truth is that every business has an opportunity to uncover and leverage the razorblade model.

The following will provide a few tips (and examples) to do so.

Customization

Consider the marketplace for office furniture.

Thousands of work stations, chairs, office accessories, and the like, are needed for businesses.

Now figure that OfficeMax, Staples, and Office Depot comprise the majority of those providers.

Makes it difficult to see where a business could wiggle in, right?

What’s needed is a layer of customization.

This customization allows a business to offer premium products because they are tailored to a customer’s requests and desires.

Let’s say, for example, you operate a business and need custom office furniture.

A basic offering, which you may find at major retailers, may suffice if you needed a simple, generic item. However, a choice in the customization allows you to work with another business that tailors to your brand, work space, and workflow.

Your turn: Take a look at one of your physical products and develop ideas on how to add customizable features. These features may include tailored designs, branding, white labeling, reports, dashboards, and more. What you can do is take the generic offering, use feedback from customers, and begin developing extensions for the item which come at a premium cost.

On-going Premium Support

Linux, a popular open source operating system, is free for all to use, develop, and support.

You may wonder how a business could thrive off something that is free. It has been proven though and one of the industry leaders is Red Hat.

Red Hat provides open-source software, products, and support for major enterprises.  It currently holds about $9.2 billion in valuation.

The secret of Red Hat’s success relies on the ability to offer support for Linux which is difficult to master but greatly rewarding due to its lack of a price tag. Premium support helps companies implement the operating system and have tailored customizations for their needs.

Your turn: Find the opportunities hidden within your customer support. Identify whether your business has the opportunity to sell premium support for high-end clients. Consider dividing your current level support into a free and paid model depending on its complexity.

Become Your Own Competitor

Consumers like to believe they are the ones in control of the market. An interesting infographic that you won’t want to miss is The Illusion of Choice.

What the infographic reveals is an idea that we’ve all had in the past: the cheap, regular, and high-end products are generally all sold by a select group of companies.

These companies involve Nestle, Kraft, P&G, Johnson & Johnson, Kellgog’s, and others.

What we see as competition is merely a company ensuring they have a hand in all markets.

A customer unwilling to purchase a high-end product could find themselves buying from the same company that offers an inexpensive equivalent.

Your turn: Select one or two of your hottest products or services. Develop a new brand to house these offers. Set the offers at a higher (or lower) price depending on the market. Delegate and hire individuals to act as sales representatives for this spin-off business. Funnel leads from these new channels into you existing business but send it back white labeled as the off-shoot brand.

 

Categories
Operations

3 Tips for Running Your Business Using Low-Budget Strategies

3 Tips for Running Your Business Using Low-Budget Strategies

Running a business can be exceptionally difficult in today’s economy. It’s hard enough to get a loan, but even more of a pain to keep excessive costs down. Bearing this in mind, you shouldn’t allow your budget to get in the way of your ability to reach your goals, especially if you have the knowledge and drive it takes to push a business in a forward direction no matter what the scenario.

There are several low-budget business strategies that can help your company turn a profit each year or at least stay out of the red. Learning how to integrate them into your business plan is an essential part of seeing growth in the coming months and years, and it doesn’t have to be difficult to do so.

Carve Out a Niche

Companies that offer products and services similar to others being offered in the same area often have a hard time breaking through in the marketplace. Usually, doing so requires one to spend a great deal of money on marketing in order to simply get noticed, which is certainly not an option for companies operating off of a shoestring budget.

One of the best ways to avoid this conundrum is to carve out a unique niche in your industry. Take Allegiant Airlines, for example, a company that seeks out routes ignored by other airlines, thus creating their own unique selling point. “Its almost akin to having a monopoly,” says luxury air merchandise Entrepreneur Benny Klepach, and he makes a very good point.

Always Focus on ROI

ROI (or “Return On Investment”) is everything for start-up businesses, as turning a profit is the only way to push forward. Delegating the spending of your company’s money can certainly be tricky, but one thing you should always focus on is ensuring that the money you put into your business is at least somewhat likely to offer you a higher return.

Commonly thought of as spending a nickel to make a dime, ROI is essential to pay attention to not only during the early stages of a business’s life cycle, but consistently throughout the years. Don’t forget that this concept applies to staffing as well. If you’re not getting what you feel you should be out of an employee, you may need to find someone else to take on the job.

Operate as Lean as Possible

The costs associated with simply keeping a business afloat can be staggering at times. After all, you’ve got utilities to pay for, as well as upfront costs for whatever materials you may need and a wide range of other expenses that can amount to an overwhelming sum of money on a monthly basis.

Keeping your operations as lean as possible is the only way to run a business on a shoestring budget. If you don’t, you run the risk of going into debt at an alarmingly-fast pace. Look for low-rent office space, staff a bare minimum of employees and don’t waste money on superfluous items like fancy furniture and expensive signage. The leaner you can run, the more likely it is you’ll turn a profit.

There are certainly a fair amount of constraints that come along with running a business on a tight budget, but if you’re careful with your spending it shouldn’t cause nearly as many headaches as it might otherwise.

Article contributed by Jenna Smith

Categories
Entrepreneurship

3 Tips for Aspiring Restaurateurs

3 Tips for Aspiring Restaurateurs

Entrepreneurs who are interested in jumping into the restaurant business have a lot to look forward to. Running a restaurant can indeed be stressful, but the fast-paced lifestyle associated with the industry is just one of the reasons why so many people enjoy being a part of it.

In order to properly get a restaurant off the ground, however, there are a great deal of things that need to be taken into consideration. There’s a reason why 30% of restaurants fail within the first year they’re opened; a lack of proper planning can truly have detrimental effects.

Worrying over whether or not your restaurant is going to succeed won’t do you any favors. Instead, focus on what you can do to succeed. Here are just a few tips to help aspiring restaurateurs achieve their goals.

Choose Location Over Everything Else

There’s really no getting around how important it is to choose the right location when planning to open a restaurant. If you’re familiar with the term “haunted location,” you’re likely aware of the fact that some areas are simply not fit for certain types of restaurants. As a result, you’ll want to do as much research as possible into the area that you’re searching for a space. Get to know which parts of your city have restaurants with successful turnovers and which do not. Also, keep style of cuisine in mind and search for a location that will allow you to carve a unique niche in the surrounding neighborhood.

Don’t Skimp on Initial Supplies

One of the most difficult aspects of opening a restaurant is being able to afford to outfit it with supplies. Between kitchen equipment, dining room furniture and everything in between, there’s no denying the fact that opening a restaurant can be an expensive endeavor. Skimping on initial supplies, however, will do you very little good and could even potentially derail your restaurant during the beginning stages. It’s worth mentioning that many people forget about the little things when planning a restaurant opening; proper cooking utensils, guest checks, table linens etc. Make a list of everything you think you need and allow others with experience to go over it with a fine-toothed comb for you.

Start With a Test Menu 

A common mistake made by first-time restaurateurs is throwing all of their money towards food inventory right off the bat. It would make sense to the think that a large menu would serve to bring in more costumers, but there’s a huge chance that you’ll be letting a great deal of food go to waste in this scenario, as spoilage occurs quicker than most people would like to admit. Work with your chef to draft a small, limited test menu to help get the ball rolling. This will not only drum up interest for your restaurant, but will allow you to keep food costs to an absolute minimum to begin with.

Embarking upon a career as a restaurateur can be frightening, but if you make the right moves, you’ll find that it can be an excellent business venture.

Article contributed by Jenna Smith

Categories
How-To Guides

How to Boost SEO for Startups

SEO Perfect Company

The most important thing a startup company can do is efficiently market in a way to introduce themselves and establish their spot in the business world. The most important place to tackle first is the internet.

With newspapers, magazines and just about every other medium you can imagine now located in the vast world wide web, there are strategies that can be put into place to ensure success for a company. The most common, and important, is Search Engine Optimization.

It’s a way of using search engine keyword searches to have a company stick out above the others. Here are some tips on how to make the most of out SEO.

For further Entrepreneurial tips, Tomas Cabrerizo got his start in the business world at a very young age.  This served to feed his drive for success.  He built upon each experience and used to increase his knowledge.  This has led him to several entrepreneurial opportunities.  He has met each one with success.

Interlinking

Some older posts may not have successful at first, but since the information is still available, newer and more successful posts can be linked to these past ones to bring back attention. Just because it has already been posted, doesn’t mean it’s dead and buried.

This will drive more traffic through an entire website instead of just one post, allowing your customers to use your website as a point of reference for multiple subjects. This increases the amount of time that each visitor is on your site, which is taken into consideration by search engines when it comes time to rank relevant topics.

Surveys

The average person isn’t usually willing to participate in a survey, but even if a small group of visitors do, then this can be vital. With the information that you gather from these surveys are instrumental in establishing your marketing strategy.

Questioning how they found a particular website can be used to retool marketing if they have reached it in a way that wasn’t originally planned. This new information is free and helpful for a company.

While you won’t see an immediate SEO increase, you will in the long term. This is because as more visitors view your site after you have customized it to their needs, the traffic will put you closer to the top in search engines.

Map

Providing a sitemap for a website will ensure that visitors are able to find exactly what they are looking for. Also, search engines will show the most popular links for a website as part of the search result if there is a sitemap established.

The less time a person has to search to find what they are looking for, the more likely they are to return to that site because of the convenience. Not to mention the fact that less time spent searching allows for more time reading on your site.

Articles

Often times when news is breaking and people are searching for it through sites like Google, they want the most up to date information. Even if it’s just an article on tips or suggestions for anything, it can still pop up first as it may be the most relevant.

This will shoot a site up the rankings on a search result and can establish a base of viewers that will keep coming back.

In addition, guest bloggers can be a nice way of branching out as there is already a built-in audience with their own blogs. These guests will now draw attention and expertise to the site.

Comment Boards

Having a comment board for each of the pages on a web site will allow customers and readers to submit feedback. It’s similar to a survey but people are more willing to participate. With many actively engaged readers, there is a strong likelihood that they will keep coming back to take part in discussions and view replies their comments may have received.

This can massively increase the amount of time spent on the site and the feedback will boost social scores that are taken into consideration for SEO-based results.

Now that you have some of the most important tools for using SEO, put them to the test for your site and you will see great results.

Thanks to Jenna Smith for supporting the site with this guest post.

Categories
Finance & Capital

Ways to Get Money for Your Startup

Ways to Get Money for Your Startup

Many people think that the hardest part of starting a new company is coming up with the idea and business structure. However, the actual hardest part can be getting the financing to get your company off of the ground.

There are many different routes you can take to get the money you need. Some may be chosen as a last resort, but sometimes you have to suck it up and do it for the sake of your company.

Expert Juan Carlos Bertini has experience in finance helping companies grow through funding, and can help your startup as well with these tips.

Venture Capitals

This is the money that you can receive that is given to startup companies. It’s a high risk and high reward fund for investors so it may be difficult to get the funding you need.

Basically what happens is a group of very well-off investors from various walks of life pool their money together to fund small businesses they believe in. From there, they will give that to the startup company in exchange for equity in the company and possibly some of the revenue.

It’s usually within the first five years that they expect serious returns on their investments. This means that they are hoping for the startup company to be acquired by a much larger firm or gain the ability to sell stocks.

Although it’s a bit harder to find money from Venture Capitals (think of the show Shark Tank) this is the best way to get a large amount of funding.

Crowdfunding

The power of the internet has created the growing phenomenon of crowdfunding. Websites such as Kickstarter allow you to pitch your business to the site’s viewers in hopes of having them give your company money for funding.

It’s not always a large amount as many people will give as little as $5, but you don’t owe them interest back. However, it is more appealing when you can give a reward for their investment in different stages.

This can be anything from a t-shirt from your company all the way up to equity depending on the value of their donation. Many companies, books, movies and much more have been launched using this method.

People You Know

This may be the last thing you want to do, but it may be absolutely necessary if you can’t find funding in other places. Perhaps you have grandparents that are sitting on more money in retirement than they know what to do with. It’s a lot easier for them to invest in you than an accountant that they don’t know.

Loved ones are always there to help, so don’t be afraid to ask if you really need to.

Find a Partner

Think of this as something similar to a Venture Capital except you only have to deal with splitting your profits with one other person. Obviously, this person will have to have quite a bit of money and you will need to sacrifice a significant amount of equity.

Some are wary of partnerships as things can go a little sour after working together for so long, but it may be worth the investment.

Personal Savings

If you have any life insurance policies, home equity or life savings, it may be time to cash those out. There can be a lot of money in those accounts and if your company pans out, you can put the money back in there to set yourself up for retirement.

However, it’s a very high risk so you have to make sure that you really believe in what you are doing.

There are a lot of other methods in which to get money, these are just a few. There are loans and grants available from banks and the government that can help you get started. Explore all of your options before making a decision as it could be the biggest one of your life.

Article contributed by Jenna Smith