From Business.gov By Caron Beesley
During one of the worst recessions in U.S. history, a little sugary confection – the great American cupcake – is proving to be an unexpected fast food market opportunity for many entrepreneurs.
One city where the cupcake sector is booming at a rate faster than your average coffee shop is Washington, D.C., where an investigatory article by The Washington Post found that at least half a dozen cup cake eateries – or “cupcakeries” – have opened in the past 20 months, with more on the way. (“Cupcakeries Emerge as Washington’s Sweet Spot in a Downturn*”).
The Secret of “Cupcakery” Success?
Everyone can understand the appeal of the cupcake, but why the sudden spurt in “cupcakeries”?
Some see correlation in the popularity of the little confection with the current recession. Interviewed by The Post, Paul Sapienza, vice president for the Retail Bakers of America, offers his own assessment of the confection’s popularity: “They are cute. They are an economic treat, which helps out in the recession. They are a little decadent, so you get cake, frosting and sometimes filling all at the same time.”
While others doubt the trend will last. One fan of the Washington, D.C. cupcake group on Facebook told The Post: “For me, it’s a personal-size treat. You don’t have to share it with anybody. It’s a guilt-free, happy treat that takes you back to your childhood,” Jones said. “Do I think it’s a stable business? No. I wouldn’t invest in a cupcake store.”
The “Cupcakery” Opportunity
But regardless of opinion-based forecasts, “cupcakeries” are certainly a sweet option for entrepreneurs. Not only can you benefit from walk-in sales, but adding a pre-ordered catering option to the business mix can also be lucrative. For example, Georgetown Cupcake – cited in The Post’s article – sells between 3,000 and 5,000 cupcakes a day – of which 30 percent are walk-ins and 70 percent pre-ordered.
Servicing anything from kids parties to workplace soirees and even weddings, cupcakes are a perennial treat and a potential goldmine given the proper planning, marketing and location.
Starting your Own “Cupcakery” or Food Service Business
If you are interested in starting a “cupcakery” or other food service business, you will still need to observe the basic strategies of starting and operating a business – while observing food service business laws!
Here are some useful tips and resources that can help entrepreneurs start, operate and grow their food service businesses:
1. Getting Started
If you are a first-time business owner or entrepreneur, or even if you have some experience under your belt, these 10 Steps to Starting a Business from Business.gov will guide you through the process involved in making key business planning and financial decisions about starting a business.
2. Finding the Right Location
Whether you are in downtown Washington, D.C. or in America’s heartlands, researching and planning your potential location and market base is critical. And while city locations may attract walk-in traffic for your food service business, many suburban locations offer a higher concentration of lucrative “family-oriented” catering business opportunities.
Use freely available market research tools to your benefit. You can check local demographics including employment statistics, consumer statistics, and more using these guides from the government.
You’ll also need to check local zoning laws, even if you want to operate a home-based food production business – many local governments restrict what business can be done from home.
Get more advice and tips from Business.gov on choosing a business location.
Alternatively you may wish to start your business online – read “Starting and Growing an Online Business: An Entrepreneur’s Checklist”.
3. Understand the Regulations That Govern Food Production Businesses
There are a variety of laws and regulations that govern the food production and catering business, here are some resources that can help:
•Start Local – Most laws that govern this sector are enforced at the local level. Check your county’s Public Health Department for more information.
•Operating Your Business From Home – If you do choose to operate out of your home, read “Starting a Home-Based Food Production Business: Making Your Culinary Hobby Your Job” to learn more about the rules and regulations that govern home-based catering or food production businesses
•Using or Marketing Organic Produce – If you produce or distribute any foods labeled as “organic”, then you’ll need to be aware of some of the key government laws for the production, handling and retailing of certified organic food products. Read more about these in “Producing and Selling Organic Food Products – A Five Step Regulatory Primer”.
•Shipping Food Products Across State Boundaries -If you produce a food product that is shipped across state boundaries then the FDA and Department of Agriculture both provide compliance guidelines.
For a more general overview of federal regulations that affect this industry, check out the resources on Business.gov’s Restaurant and Food Service Business Guide or visit http://www.foodsafety.gov
4. Hiring Employees in the Food Service or Production Business
Catering or food service businesses are almost impossible to operate as a one-man-band, so you are going to need to hire employees. Read Ten Steps to Hiring Your First Employee to understand the legal and regulatory side of hiring employees.
If you choose to operate a food service business or restaurant you will need to be aware of the laws that govern the hiring and management of employees in the food service business – Operating a Restaurant within the Law: A 101 in Compliance Part 1 and Part 2.
5. Marketing
Marketing your cupcake or other food service business is going to come down to identifying your target market and using the appropriate tools and tactics to reach them. Here are some tips and resources to help small business owners develop a marketing plan to support their goals, including sample marketing plans and online tutorials.
Remember to include community and online marketing channels in your marketing mix – from your company Web site to Facebook and Twitter; local newspaper ads to stories written by local reporters. Use integrated methods to reach your audience wherever they are.
Good luck!
Nineteen aspiring entrepreneurs successfully completed the First Step FastTrac®class, a twelve week course which teaches new entrepreneurs how to start their own businesses. The series, which began in September, 2009 — the first one to be held in Lancaster — was conducted by SCORE Lancaster coaches and mentors. It was co-sponsored by ASSETS Lancaster and made possible by a grant from the Lancaster County Housing and Redevelopment Authority.
“We were pleased with the number and quality of students who signed up for this first attempt,” said Jerry Glenn SCORE’s Chairman. “I think it bodes well for the Lancaster market that we were able to place so many educated, well-prepared future business men and women on the fast track to starting their own businesses.”
The twelve week course – developed by the prestigious Ewing Marion Kauffman Foundation in Kansas — taught students the basics of starting their own businesses including in-depth sessions on how to conduct a feasibility study, how to research your idea, how to market your business, pricing your product and how to prepare accurate budgets and financial projections.
A graduation ceremony is scheduled for Tuesday, December 8th with Jerry Glenn as Master of Ceremonies.
Graduates receiving certificates include: Brian Cooley, Jackie Herman, Adam Kowalczyk, William Kreidler, Gerica Lilly, James Lilly, Dawn Mentzer, Lori O’Donnell, Harvey Owen, Jonathan Potts, Gerald Rhen, and Nilda Vega. The future businesses these graduates plan to start include restaurants, a gift shop, contracting & remodeling businesses, an independent/alternative movie theatre, an architectural firm, a veterinarian practice, an accounting firm, plus others.
The class instructors were SCORE coaches Lou Davenport, Rhonda Kleimann, Rich Young, Hugh MacMaster, David Templeton, Tom Burgum and Harvey Owen.
SCORE plans a second version of the First Step FastTrac®course and a second level course titled FastTrac NewVenture®, early in 2010. For more information on the upcoming courses, please see the special workshop section of www.scorelancaster.org or contact: SCORE at (717) 397-3092.
By John Jantsch, Duct Tape Marketing
Small business owners resist creating marketing strategy like many resist getting their teeth cleaned. Over the years, I’ve discovered why this is:
An effective marketing strategy requires understanding who you are, choosing to be different than everyone else, and committing to one simple way of doing, acting and creating – to the exclusion of all other ways of doing, acting, and creating.
Now, that’s some scary stuff!
The above set of requirements may seem difficult to accomplish, but accomplish them and you will set your business free from the tyranny of making up the idea of the week over and over again. However, that’s the crutch that keeps business owners from ever taking strategy head on. It’s far too easy to just grab another tactic, this week’s twitter, and run with it. If this week’s tactic fails, no harm, no foul, find next week’s thing. (A bit of a dart board strategy approach.)
When you commit to a marketing strategy, you’ve actually got to put your entire authentic self on the line and that scares the hell out of people. What if that fails, how do you recover? Well, it starts with a realistic and practical way of thinking about strategy and a mindset that links your marketing strategy to the culture of your organization – if a marketing strategy is real and true for you, your customers, and your people, to some extent you cannot fail.
My take is that a marketing strategy should scare you a bit, push to you an uncomfortable place, and make you stretch – otherwise is may never truly require you to do anything remarkable to reach it.
Here’s what you need to discover and capitalize on to create your one true marketing strategy.
- What business are we really in? – another way of saying this is – what does your customer really buy when they buy your product or service? – does someone buy insurance because they want an insurance policy? Do they hire a plumber because they’ve always had a hankering for a new P trap? Well, what do they really get from a successful experience with you – it’s probably not what you think.
- Who is our ideal customer? - You’ve undoubtedly read this from me already, but I can’t say it enough – not everyone is your ideal customer, you’ve got to know enough about that perfect customer you are trying to attract, so much so that anyone in your organization could spot who is and who is not that customer. Hint: look long and hard at the make up of customers that are referring business to you – there’s a good chance they hold the key to discovering your ideal customer.
- What do we do that our customer really values? – The answer to this question is the essence of your thrust to differentiate your business from all others in your industry. It’s likely that you have a unique way of doing business, serving the customer, and creating a winning experience, it’s also just as likely you have no idea what that unique value is, but your customers do – go ask them to tell you what your magic is and then let it shine in all your marketing messages, because it’s a pretty good bet your ideal prospect wants that too.
The best news of all is that once you do this, decision making – what new product should we create, what should our direct mail say, how can we use Facebook – gets very, very easy. Simply ask yourself – how would this help us achieve our marketing strategy?
Just remember, safe is boring – bold is where the opportunity resides, bold is how your create something extraordinary – do it now!
As a small business owner, you do your best to meet your obligations to your customers. So it’s only natural to expect them to pay their bills on time, right?
Unfortunately, the answer is not always. Most customers are conscientious about making timely payments, but others may require some extra effort. Though frustrating and time-consuming, collecting from delinquent accounts is not something you should put off or simply hope will work itself out. Every dollar of revenue counts toward keeping your small business afloat.
Obviously, prevention is the best way to avoid having to deal with collections in the first place. Establish a standard payment policy and make your customers aware it before starting work. Your invoices should also clearly state when the total amount is due and the fee for late payments.
And once those deadlines pass, you need to take action.
Get the facts. Don’t assume the customer is entirely wrong. Contact them by phone or mail and ask politely for an explanation. It may well be that the invoice has been lost or is awaiting approval. A customer with cash flow problems may also request extra time. How you proceed depends on the situation and your experience with that account. You may feel confident enough to allow extra time or arrange installment payments. Make sure the customer clearly understands any compromise. Be flexible, but firm; and don’t hesitate to follow up.
Take stronger action. If your initial collection attempts fail, it may be time to turn to an attorney or collections firm. Terms for these services vary from a flat fee and/or percentage of the invoice amount to a retainer. The Commercial Collection Agency Association at www.ccaacollect.com and Collection Agency Research at www.collectionagencyreserach.com offer guidance on fees and guidance for choosing a collections agent for your needs.
Or let it go. You may decide the amount of the overdue account does not justify the cost and effort to collect. If so, write it off as a bad debt and move on.
Don’t make the same mistake twice. Should customers with poor payment histories approach you about working for them or restoring credit, don’t immediately refuse unless you are absolutely certain they remain bad risks. Ask them to explain how their situation has changed and decide whether it makes sense to restore the relationship. As a precaution, insist on stricter terms such as advance payment or cash-only.
For more assistance with collections and credit policies, contact SCORE “Counselors to America’s Small Business.” SCORE Lancaster is a nonprofit organization of more than 50 volunteer business mentors who provide free, confidential business counseling and training workshops to small business owners. Call 717-397-3092 or find us online at www.scorelancaster.org.
Locks, alarms, and cameras can help safeguard your facilities and equipment. But what about your computer databases—the places where valuable, sensitive, and potentially irreplaceable assets of your small business are stored?
It may be easy to assume that Internet firewalls and PC passwords are enough to prevent unauthorized access. But according to Fredric Paul, publisher and editor-in-chief of bMighty.com, an online resource that specializes in the IT needs of small and medium-sized businesses, database breaches from both external and internal sources are increasing at an alarming rate.
“Small businesses face a higher risk because they usually lack the IT security infrastructure and expertise of larger, but no less vulnerable, corporations,” Paul explains. “Because small businesses also lack the resources and expertise to detect and respond quickly to a breach, the consequences of unauthorized access are greater as well.”
Here are some steps for keeping your small business database as safe as possible:
Enable security capabilities. Many off-the-shelf databases have only limited default security controls. Make sure that all authentication controls are enabled, and avoid using common passwords for user and administrator accounts.
Give the database a security check-up. Before entering any data, make no unwanted or unnecessary sharing features are activated by default. Check the software developer’s website every few months to ensure that your version is up-to-date with all the latest security patches.
Restrict database access. Even if you have a small, trusted staff, access to the database should be limited to a need-to-know basis. This will prevent passwords and other important information from being misused or unintentionally shared. It also provides an extra measure of safety in the event today’s colleague becomes tomorrow’s competitor.
Make regular backups. Depending on the size and extent of your small business databases, back-ups should be made on a monthly, weekly, or even daily basis. The data should be stored in encrypted format to further minimize its value to a data thief. Back-ups should also be kept at a secure, off-site location in the event your normal place of business become inaccessible due to weather, fire, or natural disaster.
Keep track of trends. Even if you don’t consider yourself a computer whiz, safeguarding IT resources is easier when you take a proactive approach. Resources such as bMighty.com can provide valuable information and tips for ensuring your system stays in step with your small business’s needs.
SCORE Lancaster is a nonprofit organization of more than 50 volunteer mentors who provide free, confidential business counseling, and training workshops, to small business owners. Call us at 717-397-3092, or find us online at www.scorelancaster.org.
Behold the humble press release. Even in the age of blogs and RSS feeds, the press release remains the simplest, yet most effective tool for generating publicity about your small business. Even better, the resulting coverage costs nothing compared to the costs of paid advertising.
While you don’t have to be a PR expert or writing whiz to create an effective release, a potentially newsworthy item may be overlooked if the release is poorly organized or doesn’t seem newsworthy.
First, you need to have news that’s worth sharing. Things that may seem important to you may not be relevant to your intended audience. Imagine you’re a reader with little or no familiarity with your business, and think about what might appeal to you. Some things are easy, such as adding a new product or service, opening a new location, or reaching a milestone anniversary.
Also consider offering readers helpful hints related to your product or service. If you’re an accountant, for example, a list of tips for getting organized at Income Tax time may be perfect for time-crunched taxpayers. Gift shop owners can prepare a list of innovative ideas for specific holidays, or acceptable items to send service personnel overseas.
Aside from the news item itself, the most important parts of a press release are the headline and first paragraph. Because editors sift through dozens of press releases a day, they rarely read anything that doesn’t immediately grab their attention. Get to the point by organizing the first paragraph around what your news is, who it’s about, and why it’s important. Then, use brief supporting paragraphs to add detail.
Remember that like a resume, a press release is designed to pique interest, not tell the entire story. As such, limit your release to no more than two double-spaced pages.
Your company’s logo and contact information should be at the top of your press release. It’s also helpful to include a name, address, and phone number or email in the text.
Once your release is ready, contact the publications or media outlets to identify the right editor, and whether they prefer to receive releases by regular mail or electronically. Make sure you spell the editor’s name and title correctly. Releases with errors or addressed to long-departed predecessors often go into the trash unread.
SCORE Lancaster is a nonprofit organization of more than 50 volunteer mentors who provide free, confidential business counseling, and training workshops, to small business owners. Call us at 717-397-3092 or visit us online at www.scorelancaster.org.
Strong demand for your product or service is a sure sign of success. But it’s also possible to be too successful—that is, having more orders and requests than you’re able to fulfill. At first, that might sound like a good problem to have. But if you don’t act quickly, this dream-come-true can quickly deteriorate into a nightmare of frayed nerves, broken promises, lost clients, and irreparable damage to your reputation.
Here are some tips for dealing with over-demand:
Get a status check. You can’t make good decisions unless you have an accurate picture of where everything stands. If you manufacture a product, see what might be needed to incorporate the new orders into your processes. Can your existing suppliers provide the needed materials? Are alternate sources available? If you’re a service business, can you rearrange your schedule and still meet your existing commitments? Plan wisely, as measures to meet short-term demand can also disrupt your long-term plans and operations.
Assess the costs. Whether it’s a temporary up-tick or sustained upward trend, responding to high demand may require an immediate investment of capital. Weigh your options against your cash flow and other resources. Hiring temporary workers may or may not be as affordable as overtime for your current staff. You may also have to pay a premium for rush orders of materials, or by using other suppliers.
Be honest with your customers. Explain that you’re short on time or inventory, and specify how long they may have to wait before you can fill the order or take on the assignment. Remember that you can’t please everyone. Some people will be willing to wait, others will look elsewhere.
Be honest with yourself. While it may be tempting to take on new orders and assignments in the name of growing your business, it’s still up to you to manage everything. Don’t overtax yourself or your resources. And certainly, don’t let increased demand compromise your health or personal responsibilities.
Refer customers to others. Nobody likes turning away business, but it’s better than the consequences of missing deadlines or producing poor quality work. Refer opportunities you can’t handle to other vendors or contractors who you trust will do a good job. Customers will appreciate your candor, and remember you as a problem-solver and information resource. That increases the likelihood that they’ll come back.
SCORE Lancaster is a nonprofit organization of more than 50 volunteer mentors who provide free, confidential business counseling and training workshops to small business owners. Call us at 717-397-3092 or find us online at www.scorelancaster.org.
If you’re a veteran or plan on leaving the service soon, you may be thinking about starting a career or competing for a job in today’s crowded marketplace. This could be the ideal time to consider starting a small business, especially if you already have business or management experience, or acquired new skills and interests while serving our country.
Veterans already make up a sizeable portion of the nation’s entrepreneurs. A 2004 study conducted by the Small Business Administration (SBA) found that 22 percent of veterans in the U.S. household population had either started or purchased a small business, or were considering doing so. And more than 60 percent of new veteran entrepreneurs planned to operate their ventures at least initially from home.
Along with innumerable markets to apply your energy and interests, there are also many funding assistance programs designed specifically for veterans. For example, the SBA’s Patriot Express Pilot Loan Initiative offers loans of up to $500,000 to help start or grow a small business via a nationwide network of participating lenders. Patriot Express loans feature the SBA’s lowest business loan interest rates—generally 2.25 percent to 4.75 percent over prime depending upon the loan’s size and maturity—as well as a fast approval turnaround time. The loan can be used for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory, or business-occupied real-estate purchases.
Another valuable source of information is www.vetbiz.gov, established by the U.S. Department of Veterans Affairs to assist veteran entrepreneurs with starting and expanding their businesses in the federal and private marketplace. The site also includes a database listing businesses more than 51-percent owned by veterans or service-connected disabled veterans—a valuable tool for promoting your new business to potential federal and private-sector customers.
Many SCORE chapters have established programs or outreach specifically for veterans, National Guard members, and military reservists. For example, California SCORE chapters have teamed with the state’s National Guard to help soldiers, their families, and business partners accomplish business objectives at www.score114.org/NationalGuard. Bucks County, Pa., SCORE at www.score570.org offers special services to assist returning soldiers and their spouses with starting a new business or reviving a current one. And, SCORE Counselor Louis Celli, Jr., who is also president of the Northeast Veterans Business Resource Center, provides a wealth of information for veteran-owned businesses at www.nevbrc.org.
SCORE Lancaster is a nonprofit organization of more than 50 volunteer business mentors who provide free, confidential business counseling, and training workshops, to small business owners. Call us at 717-397-3092 or find us online at www.scorelancaster.org.
Why Your Business Needs an Elevator Pitch …and Tips on How to Target it to your Audience
By Caron Beesley at Business.gov
Whether you are on a trade show floor, making a sales pitch, or seeking investment, perfecting your elevator pitch can be one of the most important things your business can do. From the moment you start-up (when no one has ever heard of you), having a well rehearsed and compelling elevator pitch can help buyers, clients and potential investors get to know you quickly.
More than simply explaining your product, industry, or “big idea” a business elevator pitch is essentially how you speak about your business to others in a way that engages and excites.
As business expert Chris O’Leary states, “…an effective elevator pitch is designed to give the audience just enough information that they will have a sense of what you are talking about and want to know more.” (http://www.elevatorpitchessentials.com/)
Adapt Your Elevator Pitch to Suit Specific Audiences
A savvy entrepreneur should be prepared to develop and modify their elevator pitch to meet the needs of the audience they are engaging.
If, for example, you are pitching your product to a passerby at a trade show booth, you will need to craft quite a different pitch than the one you would deliver to a potential lending institution or investor who will quickly weed out ill-prepared and poorly planned business ideas or propositions based on an elevator pitch alone.
Three Elements of an Effective Elevator Pitch
To help prepare your elevator pitch (whether to secure investment for your business or to communicate your sales proposition) you need to take a three-step approach and address these key elements of your business:
1. “What is the problem or “pain” in the marketplace that your business addresses?” A good way to address this element is to ask a question. For example:
Did you know that the average small business wastes approximately $1,250 in energy costs each month simply because electronic assets are left to operate on maximum power 24 hours a day?
2. “How does your business or its product solve this problem?” And, in this case, the (purely hypothetical) answer might be:
With our patented energy usage monitoring system – ElecTrack - business owners can monitor energy consumption across all their electronic assets and remotely deactivate non-business critical equipment and appliances when not in use.
3. If you are developing an elevator pitch to help communicate your sales proposition, you should ask yourself: “What is the main benefit you give?” For example: “ElecTrack can help you save thousands of dollars a year on your business utility bills.”
Alternatively, if you are seeking investment in your business the third element should be – “What do you need to bring your solution to reality?” For example: “We need $1.2 million in funding to get to the point where the company is self-sustaining. This should happen during the third quarter of our second year. For the purposes of start-up, we’re seeking $500,000 of initial funding. I am the CEO with 12 years senior sales and business development experience in the energy efficiency sector. Our Technology Director has 20 years of electrical engineering and software development experience and has led the development and patenting of ElecTrack. If we hit our numbers, we expect to expand our market base into Europe and Asia, within three years.”
For specific help on creating your elevator pitch for investors, take a look at this You Tube video clip from business planning expert Tim Berry. He provides tips on how to craft your pitch, what your goals should be, and perhaps most importantly, what your investors want to hear.
Get Feedback and Practice Your Pitch
Another element in the process is to get feedback on your pitch from fellow stakeholders, employees, or someone not as close to the business as you are. Modify your pitch based on this feedback, and then rehearse and familiarize yourself with it. This absolutely involves reading it out loud. As a goal, aim for delivering your pitch in 30-45 seconds, longer than that and you’ll need to head back to the drawing board.
You could also try writing key words or phrases from your elevator pitch on a prompt card that you can pull out before meetings to refresh your memory.
Additional Resources:
•Developing an Elevator Pitch - Links to more resources as provided by the New York State Small Business Development Center (NYS SBDC).
•Effective Elevator Speeches that Leave a Lasting Impression (SCORE)
•Business Planning Tutorials from Business.gov guest blogger and business planning expert Tim Berry
•Small Business Marketing Guide from Business.gov – Tips, tools and lots of information to help you market your start-up or small business.
•How to Write a Business Plan - From free training and templates to business planning guidance, these resources are specifically designed for small business owners and entrepreneurs.
Does your website catch and deliver prospective customers? Or do those prospects click on to the next website? Or worse yet, are people unable to find your site at all?
Your small business website costs time and money, so make sure it works for you! Learn free and lowcost tips and techniques to improve the effectiveness of your website, including search engine optimization (SEO) and marketing (SEM), improving the user experience, and turning prospects into customers. This course offers valuable recommendations for new and established businesses.
Learn free and lowcost tips and techniques to improve the effectiveness of your website, including search engine optimization (SEO) and marketing (SEM), improving the user experience, and turning prospects into customers. This course offers valuable recommendations for new and established businesses.
Workshop participants will learn:
• how to assess a website’s performance
• what search engines look for
• how to develop a website improvement plan
• how to track conversions and website usage
• how to select and use keywords and phrases
• what website elements should be optimized
• how to boost incoming website traffic
This workshop is presented by Adam Barkafski, owner of Dream Seed Multimedia. He has been designing websites since 1998
You can click on this link to learn more and to register:
