This is the speech I gave at the Women In Rural Enterprise Conference a few days ago - I hope it's useful! It is pretty much writen as it was spoken... For those of you who don't know me, my name is Lucie Storrs, I'm 38. Five years ago I was working as a freelance translator, a job which I had grown to dislike and which made me ill as I developed repetitive strain injury. I was also three stone heavier than I am now! I was becoming increasingly unhappy, and decided to look for something else to do with my life. I had always liked Victorian houses, in fact I live in one myself, and could see a gap in the market in my home town, so I set up the shop and mail order company Period Features (www.periodfeatures.net). From a tiny little rented shop, and with no previous experience of retail whatsoever, I now own my own shop premises, employ five staff and have increased turnover dramatically. I was hopelessly naïve when I started, I made loads of mistakes along the way and I'm here to tell you some of the things I've learned, so you don't have to make the same mistakes. You'll probably make mistakes of your own, but that's another matter!
So the title of my talk is the seven deadly sins of running a small business and how to avoid them. I have made all of these mistakes myself, EXCEPT number 7….
So, mistake number 1 is: 1. Don't create a product and then try to sell it. This is what most people do and it rarely works. To quote the old saying: just because there's a gap in the market, doesn't necessarily mean there's a market in the gap. Find out what people want FIRST and then offer it to them. Some form of market research is required. A good book which deals with this subject - and in fact is an excellent reference book for people thinking of starting their own business - is the book which accompanied the BBC series the Dragon's Den. It's called Your Idea Can Make You Rich. One of the things I like about it is that it is very honest about the pitfalls you may face; as it admits, it should be subtitled Your Idea Can Also Make You Very Poor. However, it covers all the basics, and more. So, back to market research: with the Internet, it's now very easy to find what people are looking for. You can look for a market or group of people who are already searching the Internet for a particular product or service first, then create a product or service to suit the demand. You already know that you have an audience for this product or service. It's a form of pre-selling. Go to https://inventory.overture.com (no www!) and you can enter a term and see how many people in the previous month searched for this term. This tool - called the Keyword Selector Tool - shows how many people searched on Overture (now Yahoo) alone. If you multiply the total by 5, this is considered a ballpark figure for all the other search engines combined. For example, if the Keyword Selector Tool shows you that 30,000 people searched for chocolate cookies, then the total number of people using all the other search engines (Ask Jeeves, Google etc.) who looked for chocolate cookies last month was around 150,000. As a general rule, if you can find a niche with at least 30,000 searches a month then you know you're onto a good thing. This is a product or service in demand. Of course, these searches are being carried out all over the world, but it's a good idea to think globally when planning your business, if possible. Anyway, some form of market research is essential, but don't get too hung up on it. Remember: money flows from giving people what they want, not what you think (or hope) they might want. Find out what they want first and then give it to them! I must admit that, in my naivety, I didn't do any market research at all. I was one of the lucky ones who got away with it - but that won't always be the case.
2. Don't spend money on advertising. Instead, spend time on PR. Obviously I don't mean that you should stop advertising and do NOTHING else, you'll sink without trace! I used to look at articles in magazines and think - oh, they must know someone, to get that kind of coverage. I never thought that I could achieve the same thing. I just used to advertise because I thought THAT'S WHAT YOU DID when you had a shop! I've spent thousands on adverts that NEVER paid for themselves, so you don't have to. Trust me on this one! I think the reason that adverts don't work is basically that any fool can cobble together an advert. It really doesn't mean that you (or your company) are any good. What you need is something that is perceived as a recommendation. Editorial is what you need; features about you and your business, and even getting your products on shopping pages is seen as a form of recommendation. However, I have learned that it's not enough to get a few fabulous articles and then think that your job is done. People have short memories and need repeated exposure to you and your product or service. With PR, it's the drip-drip-drip approach that is successful and which will create a long-term, sustained increase in business. If you MUST advertise, and I never do, at least tell your target publications that you're willing to take last-minute slots and you should get them for around half-price, on a pretty regular basis! And if you have to wait for a series of pre-booked adverts to end, why not use them as a bargaining tool for getting editorial in the meantime? I haven't been happy with the response I've been getting to my adverts with you; would you consider providing some editorial and we can see if that makes a difference? The turning point for me was actually this same conference, last year, when one of the delegates mentioned a company called Do Your Own PR. This is a London-based company run by Paula Gardner, and her website can be found at www.doyourownpr.com. I want to show you one of her products (show ebook), but first I want to point out that I don't stand to benefit in any way from recommending this or any of the other products today - I'm only bringing them to your attention because I think they are good and will be of benefit to you. This is a copy of Paula's E-Book called Get Noticed - How to Dramatically Raise your Small Business Profile In 30 Days Or Less, and it does exactly what it says on the tin. As long as you ACTUALLY DO WHAT IT SAYS, that is! It goes without saying that you have to take action to get results. This book costs £16 from www.doyourownpr.com; Paula also offers a 30-day Do Your Own PR e-course which I recommend. My own success in PR has been largely down to what I have learned from Paula; the exciting thing is that these skills can be applied to any business, in any field! The only time I would pay for coverage is by providing competition prizes. This is a great way of getting into magazines and newspapers, particularly if you've had some editorial recently, in which case they probably wouldn't consider you for more editorial for a while, but competitions are different. However, be careful you don't overdo it (or you won't save any money!) and concentrate only on relevant publications or websites (the right website competition can be great, I'm running one with Delia Online at the moment and it's brought hundreds of new visitors to the site and subscribers to my newsletter). Another good tip, if you are running a website-based competition, is to post details of your competition on Loquax. You can find this at www.loquax.co.uk; it's a great resource where people can find out what competitions are around at the moment and then link through to the relevant page of your site to enter. It's well worth doing and costs nothing to use. So, I thought we could look at some practical examples of PR in action. For example, take this month's issue of Period Living. (turn to adverts at the back) This is all I used to do - place adverts in these kinds of magazines. This size of advert costs up to £250 a month and I found that they NEVER paid for themselves. Basically, I was wasting £3000 a year; that's just for one magazine, and I advertised in more than one! So as I said, I stopped advertising completely and instead turned my attention to PR. This kind of thing is the result: a three-page article about Period Features. Cost: nothing except my time, and all I really did for this one was to send in an email with some photos attached saying why I thought my business would be great for this particular feature. Result: this kind of thing will bring in thousands of pounds worth of business, for a sustained period of time as magazines tend to hang around for quite a while. A better result, I'm sure you'll agree… Let's look at an example of a competition versus an advert. I've run a few good competitions with Period Ideas magazine; again, a small advert in this magazine can cost up to £250. I remember running one particular competition where I offered a prize of a radio-controlled clock with a retail value of £75.00. The total cost to me of providing that clock was probably around £40 including postage. So in this case, £40 gets you a competition up here on the shopping pages, which is seen as a form of recommendation and tends to get a great response and lots of new visitors to your site, again versus £250 for an advert at the back which I have never found very productive. The other thing to remember about PR is that journalists really aren't scary. They're just people, like you and me… and by contacting them with a good story or good products for their shopping pages, you are doing them a FAVOUR. They NEED stories and products, and you're providing them! Once you realise that you're helping them out it gets a lot easier to make that call, without feeling like you're imposing in some way. On a similar note, your success depends on your ability to build up a personal relationship with the press. If you get featured, drop the journalist a quick line to say how grateful you are. Don't send out round robin emails; they should all be addressed to each journalist by name and try to add little personal comments, such as I hope you're settling in well into your new job, I enjoyed your recent feature about widgets etc. This kind of personalisation is time-consuming but gets the best results. You want them to feel that of all the journalists you could have chosen, you picked THEM…. and them alone. I cannot stress enough how the power of PR has transformed my business. I only started doing it last year and have achieved great coverage in many different high-profile publications, from Eve, the English Home, BBC Homes & Antiques, the Telegraph and the Evening Standard to more local press. Last year alone, Internet sales went up by 130% and sales overall have exceeded all my expectations. What's more, it's cheaper than advertising, more creative - you can really have some fun with it - and a lot more effective!
3. Don't make yourself indispensable to your business. Burnout will swiftly follow. For your own peace of mind, you have to create a business which can run smoothly without you. It took me a long time to realise this. Once your business takes off, and it becomes so busy that you can hardly keep up, you can end up having no life, you get behind with the accounts, sourcing products, writing or whatever it is you are supposed to be doing, customer service starts to suffer and you are bothered by anxiety, sleeplessness and indigestion from the stress. Is it worth that? Is that why you went into business? I would think that the answer is no! I am now analysing every task I used to think that only I could do and working out how my staff can do it instead. Get systems in place for all your procedures, write a manual about everything that happens in your business - right down to how staff should answer the phone, greet customers, use the answerphone, process orders etc. An excellent book about this is called the E-Myth Revisited, by Michael Gerber, about why most small businesses don't work and what to do about it. It is certainly true that a very high percentage of start-ups fail, for one reason or another, and this book aims to avoid you becoming another statistic. (show the book - E stands for Entrepreneur, by the way) It also highlights the importance of making time to work ON your business (designing, building and steering the ship you have created) rather than just IN your business (spending all your time doing the basic, everyday tasks that you can teach others to do). The best thing about this is that you can design your business to run in such a way that you only do the parts of it that you really enjoy. In my case, for example, rather than operating how I used to, which was for me to do everything myself as I thought I could do it better than anyone else, and work a 70-hour week as a result of my stupidity, becoming exhausted and feeling stressed and overwhelmed most of the time, I can now see that other people can do what I do in the shop just as well as me. Better, in most cases! I have completely changed my approach; I now have five excellent staff, have nearly finished writing the operations manual, we are getting the last few systems in place, and I can see that by the summer I should be free to do what I do best and enjoy the most: doing the PR and sending sales to the shop. I can spend the rest of the working week on other plans which I have in the pipeline. Yes, I will take less money initially and one of my tasks will be to make sure that the business can afford the extra staff, but the freedom it buys me is priceless. I am sure that many of you small business owners out there will know just what I am talking about! Learn to let go of your business a little and you will be much happier for it.
4. Don't charge too little for your product or service. This is a common problem amongst female entrepreneurs, who often undervalue themselves. When I finished working as a freelance translator, I had got to the stage where I thought I don't CARE about the money. It wasn't until I had set up the shop and I didn't HAVE any money, that I realised I did care after all. You have to charge a fair price for your goods or services. It's not what you paid for something that counts, it's what it's worth, or its perceived value. There's a common misconception amongst new business owners that everyone wants products or services as cheaply as possible. This simply isn't true, and in fact will put many people off as they think if it's that cheap, there must be something wrong with it. Don't just try to compete on price. Aim to be in the middle to top price range in your market and point out to your customers why you're worth it. A propos of nothing very much, I would also like to point out that if you're offering a service, it's counterproductive to say "Yes" every time someone rings to offer you work. If you're really not busy, then fine; take the work. However, when I was a translator, I would take on every job that came my way whether or not I had the time to do it. I was terrified that if I said no, the customers would never come back. This meant that I worked ridiculously long hours trying to fit all the work in! It took me a while to realise that if every time a customer phones you, you are free to work for them, after a while they might start to think: "Hang on a minute, nobody else seems to be using her. Is she really any good?" Don't work yourself into the ground trying to please everyone. It's a good thing for customers to think you are busy and realise that they may have to wait a while for your services, but that you're worth it. And it's great when you realise that they WILL come back if you say no, you're too busy at the moment!
5. Not making full use of technology. When I first started out, I didn't have a website; in fact I was slightly technophobic. For sales, I was completely dependent on people walking past the door of a tiny shop in a small market town in Staffordshire. I've come a long way since then as I now have an ecommerce website that has taken over £50,000 in sales. Around 25% of our turnover now comes from the website. My mailing list is completely automated through the use of an autoresponder (I use the very reasonably-priced www.aweber.com). This means that people can add themselves to the list completely automatically, with no action on my part. How do I get new subscribers to my list? Well, I mention my newsletter, provide a link to the website page and tell people how to sign up in my email signature. This means that every single email that goes out from Period Features (and we send a LOT of emails) is recruiting people to sign up for the newsletter. Every parcel that we pack and send out contains a printed note thanking the customer for their order and wondering whether they might like to sign up for our fabulous newsletter, with its articles, competitions, wonderful websites and much more… We also have a form in the shop where people can sign up. All these things together bring a lot of new subscribers. Another good PR tip is to email a copy of your newsletter to all your press contacts, wondering if they might find it helpful and telling them how to sign up if they would like to. I found that a lot of magazine editors and journalists did sign up, so every month when I send out my newsletter they are reminded of Period Features whether or not I've sent out any other press releases. And it encourages me to write a REALLY good newsletter. I have even had magazines offering to give me editorial in return for a mention in my newsletter - what a fantastic win-win situation! I also send out my monthly ezine, or email newsletter, to my subscribers using my autoresponder. If you would like to receive it, and you haven't already filled in the form on our stall outside, just send a blank email to firstname.lastname@example.org. I would urge you to make full use of all the available technology and to automate all the tasks you can. It's really not hard - I was amazed to discover how easy it is to run an ecommerce website. Ours uses a software package called Actinic Catalog (www.actinic.co.uk); basically it's a shop in a box and only costs £379 plus VAT. You could use it just as it comes if you are happy with the templates supplied, but I wanted an old-fashioned site so I paid a designer to customise it. In all, it cost about £3000 for me to set up my website and get it looking exactly the way I wanted it. It has paid for itself many times over.
6. Not deciding what you want to achieve. In other words, make goals. YOU MUST DO THIS. If you don't, you'll probably fail. And aim high! Last year, Peter and I put together a desk from Ikea, which involved most of the afternoon and much swearing…. When we had finished, I looked at it and said, do you know what this is? And he said What is it? And I said, it's a quarter of a million pound desk. And HE said, well I think you paid a bit much for it…. And I said no, silly! It's the desk of someone with a turnover of a quarter of a million pounds. That seemed a lot of money at the time, but sure enough, turnover this year is on track to comfortably exceed a quarter of a million pounds. I obviously set my sights too low! Think logically. If you were setting out on a drive, or for a holiday, you wouldn't be able to go anywhere if you didn't have a clue about your destination. And you've got to be precise. If you go into a travel agent and tell them you want to go somewhere 'warm and sunny' they won't know which flight to book for you, even though they know what you have in mind. In business it is exactly the same. You need to know where you are now and where you want to be. Only then can you plan to achieve it. Set your goal and work backwards (start with the end in mind, to borrow the expression used by Stephen Covey in the excellent book, The Seven Habits Of Highly Effective People, which I also recommend that you read.) For example, if you decide that your aim is to sell £50,000 worth of goods this year, then work out how many you need to sell each week, each month to achieve it, and then work out how you are going to achieve the sales you need. What will you do to achieve it? Whatever it takes! and finally number seven, an absolute classic and the only one of these mistakes I haven't made myself….
7. Having a great idea and not doing anything about it! Most people never follow through the ideas they come up with. Don't be like most people! You can be better than that! There are lots of reasons why people don't follow through, and I thought we'd touch on a few of them here. Procrastination. Well, we've all done THAT… even I used to be good at displacement activity, the art of doing anything other than what you should be doing. Anyway, I have now developed a foolproof method of dealing with procrastination, and it is this: Put it off! I'm serious! Say to yourself, tomorrow I will procrastinate but today I will write my press release, finish my business plan or whatever. You can achieve great things when you decide to take action! Paralysis through analysis. Unfortunately, most people spend all of their time gathering information, conducting market research, writing business plans and have trouble actually getting started. Don't get hung up on this stage. There must be a point where you say to yourself - I will now actually DO this, I have enough information, I'm going to take action and I won't be distracted until I have finished it. And I won't let life get in the way of my plans! I'm not going to let all the little things stop me doing the big things. Fear. Fear of what? Well, people seem to be scared of lots of different things when they start up in business. A lot of people say to me: What if I start a business and I don't LIKE it? Well, I always say, isn't that great? At least you now know that you don't want to do it, you know yourself a bit better and instead of spending the next 30 years working as a teacher or whatever and wishing you had a bookshop, you've already established that a bookshop isn't right for you. Perhaps you're even one step closer to knowing what you DO want to do, as a result. People also say what if I start a business and it fails? Well, that's a more difficult one, but it's nothing to be embarrassed about. You will most certainly have learnt something along the way and you'll be much better prepared when you start your next venture. Waiting for things to be perfect before you start. They never will be. There is never a perfect time to start a new business. The best time is NOW. You can't wait for the economic conditions to change, until you've lost that extra weight, until your children have flown the nest. There isn't a perfect age at which to start a business; I don't think you can be too old or too young. To quote Theodore Roosevelt: do what you can, with what you have, where you are…
So, to round up, don't be like 99% of people who don't do what they say they're going to and who never follow through. Be in the other 1%! Get inspired! Create something wonderful…. Design and build your wonderful business and steer it safely, wisely, to wherever you want to go. If I can do it, anyone can; I know that all of you can do it too. If you think I can be of any help to any of you, or if you would like to discuss anything I have touched upon in more detail, then please do get in touch (email@example.com). And if anyone needs some great photos to transform their business - see my partner Peter, who is a professional photographer. His website is www.fiatluxphotos.com. Thank you very much for listening. Lucie Storrs Proprietor Period Features www.periodfeatures.net Tel. 01538 372202