The Future Of Newspapers?

Sunday, 20 December 2009 02:19

On September 11th 2009, Mike Cassidy, columnist for the San Jose Mercury News, invited readers for a "frank talk" about the future of the newspaper. The column has been removed from the Mercury, but is still available for reading at AllBusiness.com. In his column, Cassidy outlined the struggles facing the San Jose Mercury News due to increased competition from the Web. He asked readers for ideas to help save the paper:
So, how do we save what we have and work toward building it into something better? Silicon Valley is filled with brilliant minds and good hearts who want better things for this newspaper. Tell us: What is it that draws you subscribers to the Mercury News every day? What would get you non-subscribers to join those who do subscribe? What would you pay for on the Web? Are there benefits print subscribers should receive that Web users don't? What are the potential new business models? Anyone? Google CEO Eric Schmidt has said he considers it "a moral imperative" to help newspapers. Now would be a good time.

Printed Media In The Internet Age

As Lyle Bateman wrote in his blog for Open Salon, today's printed magazine and newspaper publishers are modern-day buggy whip makers. Buggy whip maker refers to a trade which became obsolete due to new technology. When the automobile came out in the early part of the 20th century, many buggy whip makers couldn't adapt and went out of business.

The San Jose Mercury's problems don't come solely from the Internet. The Merc's new owners, Bay Area News Group, have been busting unions, cutting costs and aggressively reducing the employee workforce. So when Mr. Cassidy notes the journalistic staff has been reduced from 400 to 125, part of that is drastic cost-cutting. (See the Bay Area News Group's employee site, One Big Bang.) The MediaNews Group owns over 40 newspapers in Northern California alone, including all the major Bay Area papers except the San Francisco Chronicle/Examiner.

So, now to the topic ... how to fix the Mercury News. Since the problems aren't the fault of the readership, or the Internet, the solution isn't to spend more on advertising the same product to the same people. Don't blame the sales department! On the other hand, circulation has grown from a few hundred thousand to hundreds of millions! The challenge lies in the Mercury's ability to adapt to new markets and technologies. The solution will require developing a whole new platform for delivering content and bringing in revenue.

The Freemium Business Model

Since the Mercury News has a lot of content to offer, the new business model to follow is the "freemium." According to Wikipedia, "Freemium is a business model that works by offering basic services for free, while charging a premium for advanced or special features." Chris Anderson, editor of Wired Magazine, says "free is the inevitable price for digital content." Visit Chris Anderson's blog, The Long Tail for more information on the freemium business model.

So here's the deal, San Jose Mercury News. News is free. That is a fundamental change! Charge a few bucks a month (and by few, I mean less than $10) for premium content. How you divide it is up to you. Now that you've expanded your readership beyond the Bay Area, you've got a much larger potential market. Go with mini-payments, maybe $.10 or $.25 cents a day. But make sure your premium content isn't available elsewhere for free. That means reporters going out and digging up news stories, not just taking them off the wire.

I'd enjoy movie reviews in a video format. Something like Siskel and Ebert online. No newspaper offers that, so it would be premium content. But no single new feature or app will turn the corner. (Unless you're inventing the next Twitter.) You could offer guest podcasts, video interviews ("Face The Valley?"), video clips of new bands and other multimedia content.

Don't try to convince readers you've still got what it takes. Deliver some new and improved content instead. The medium may have changed, but the principle remains the same: Content is king.

(Edited to add: Giving away product for free seems counter-intuitive, but companies like Craigslist and YouTube are proof that the freemium model works.)

Related content: Wall Street Journal, "How Google Can Help Newspapers," opinion by Eric Schmidt, CEO of Google

 

Writing A Business Plan

Wednesday, 23 September 2009 12:42

What is a business plan?

A business plan is a document that helps you transform an idea into reality. Your business plan describes your business from a planning aspect: What will you sell? How will you market it? How will you make a profit? A business plan is an important tool to help you reach your goals.

Your business plan should give an overview of your business, your product, the current market environment, and most importantly, show how you will make a profit. Larger business plans may include an executive summary, integrated marketing plan and an appendix for supplementary material (charts and reports).

How is a business plan used?

You can emphasize different areas of your business plan, according to its purpose. One common use is when requesting a bank loan. If you intend to seek funding for your business, the numbers must add up in your plan! A business plan may also be used as an internal training document, strategic planning guide, or a way to keep track of business milestones.

How do I write a business plan?
Start with a good idea. Then collect the information you need to show how your business will make a profit. Consider all the costs involved with developing, producing and marketing your product.

Where do you want your business to be in three to five years? Use your business plan to map out realistic goals, with clearly identified keys to success.

Lots of help is available online. See the Small Business Administration's Business Planning websiteSmall Business Administration website, article: "Write A Business Plan" (accessed 4/6/2009), and BPlans.comVisit www.bplans.com for free business plan examples.

Table of Contents

  1. Executive Summary
  2. Company Overview
    1. Business Name
    2. Management
    3. Mission Statement
    4. Long-Term Goals
  3. Product
    1. Product Description
    2. Market Segment
    3. Target Customer
  4. Environment
    1. Market Analysis
    2. Competition
    3. Other Factors
  5. Marketing
    1. Sales
    2. Advertising
    3. Branding
    4. Competitive Advantage
    5. Customer Service
  6. Financial Statements
    1. Balance Sheet
    2. Income Statement
    3. Statement of Cash Flows
  7. Appendix
    1. SWOT Analysis
Business Name

Choose a name that is short, easy to spell and identifies your type of business. If the "dot com" top-level domain (Internet name) for your business isn't available, consider using "dot biz" instead. The dot-biz domain is for ecommerce websites.

Note on SEO: Your business name will perform better in searches if you include keywords. If your business is bike repair, call your business www.TomsBikeRepair.com or a name that contains the phrase "bike repair."
Management

Here you will define the responsibilities of the employees in your company. If your company is a sole proprietorship, you are the only employee, and all the responsibilities are yours. As your business grows, you may need to hire specialists to perform some jobs (accounting, sales, production, etc.)

Mission Statement

The mission statement describes your company's purpose. Your mission statement should answer these questions:

  1. Who uses the product?
  2. What are the benefits of the product?
  3. How does it work? (Or, how does the product provide the benefits?)

Example: "The mission of Chauncey's Pub is to serve the dining and entertainment needs of Bay Area residents by providing quality Cajun cooking, drinks, and great local live bands." This statement answers the questions, "Who uses the product?" (Bay Area residents), "What are the benefits?" (dining and entertainment needs served), and "How does it work?" (by providing meals and live music).

You can add to your mission statement, but it should contain at least that much information. Your mission statement can reflect internal goals. Starbucks Coffee's mission statement is ... "To inspire and nurture the human spirit." Starbucks' mission statement also describes its ethical and global responsibilities.

Long-Term Goals

It may be helpful to think of your business plan as a living document. It describes your values, your product, your team organization, and even your ideas for the future. In this section, describe your plans for growth. Where do you want your business to be in three to five years? Will you offer new products? Hire new staff? Conduct market research? Your goals should be realistically attainable and quantifiable, i.e., X number of sales within Y months, not simply "sell a lot of stuff."

In this way, your business plan is like a road map, laying out a direct route to your goals. One way of ensuring that you meet your goals is to identify intermediate steps or key milestones. By using key milestones you can break up complex tasks into simpler parts.

Product Description

In this section of your business plan, you'll describe your product. Keep in mind that someone reading your business plan (like a bank loan officer) might not be familiar with your product. Explain what the product is, what it does, how it's used, what it's made of, etc. Go beyond a basic description of physical characteristics. Explain your product's competitive advantages, and why it's better than your competitor's product.

Market Segment

Segmenting the market is a way of defining your product line and advertising according to customer demographics (age, income, interests, etc.). In other words, who uses your product? In order to focus the advertising message, certain demographics may be targeted. For example, even though most bathroom products are similar, they are marketed differently to men and women (strong for men, gentle for women).

Target Customer

Your "target customer" is someone who is likely to buy your product. The target customer is a (narrow) subset of the market segment. Imagine your target customer as someone walking down the street, cash in hand, looking to buy your product. Can you describe your target customer?

Market Analysis

Market analysis refers to your product's environment with respect to sales. What economic trends might affect your business? How are products like yours generally sold, and how are they received? Is this a growing sales channel, or a shrinking one? In this section, describe what external factors might influence your business, and how you will deal with those factors.

Competition

In planning your business, it's important to understand your competitors. What are they doing? How might they influence your business? What is working for them, and what isn't? Understanding your competitors' successes, while avoiding their mistakes, will help you increase sales and avoid mishaps. If you want to use your business plan to request financing, it's important to demonstrate an understanding of the market, your competitors, and to demonstrate that your product can compete with, if not best, the competition.

Other Factors

This is a general catch-all area where you can discuss environmental factors specific to your product. Are there special legal considerations? If you're importing products, are there special trade considerations? Might your product be affected by weather, politics or other hard-to-predict factors? Use this section to describe any important environmental considerations not listed elsewhere.

Sales

Sales is the contract you make with customers for goods or services rendered. Since this is where money changes hands, it's important to think about the transaction itself. How easy is it for the customer? Simplifying the checkout process and offering multiple payment methods help to increase sales. Payment services such as Paypal help merchants collect payment online.

Advertising

Advertising is the way you reach your customers. The current school of thought today is to use a "marketing mix" with analysis and research to follow-up. In other words, a traditional approach. The Internet does offer several natural benefits to advertisers. Services like these are free on the Internet:

  • Reach a global audience
  • Mass email marketing
  • Store stays open 24 hours a day to take orders
  • Social networking sites can be used to build client lists

Describe broad marketing strategies here* in addition to specific methods. You can even create a separate marketing plan to supplement your business plan.

In planning your advertising strategy, it's important to understand how your customers think. What websites do they visit? What types of Google searches do they do? Your market segment and target customer analyses help you understand what your customers are looking for.

(*Some new Internet marketing strategies have been developed by Chris Anderson, author of "The Long Tail" and "Free.")

Branding

Branding is the creation of a positive product identity. How will you create a favorable impression of your product? Many online sellers borrow the brand of the website where they sell ("... a seller on Amazon"). One important goal for your website is to create your own independent brand.

Competitive Advantage

Competitive advantage is the perception of your product as better than the competition. Some typical competitive advantages include reputation, experience, customer satisfaction (for an established company) or affordable, high-tech and innovative (for a new company).

Any way in which you compare favorably vs. the competition is a competitive advantage. Finding ways to maximize your advantages is part of strategic business planning. Competitive advantages are also used as part of an overall marketing mixWikipedia, "Marketing Mix.".

Customer Service

Customer service describes your daily interactions with your customers. How easily can customers reach you? Can they resolve grievances quickly? How promptly do you return emails and phone calls? When doing business on the Internet you should check and respond to emails at least once a day.

   

Keyword Strategy: Google's Keyword Tool

Thursday, 10 September 2009 08:53

Developing A Keyword Strategy Using Google's Keyword Tool

Of all the visitors coming to your website, traffic coming directly from the search engines is the best. It's free, and it means people can find your site by doing a simple search. Here's an SEO tip to make your website more "search engine friendly."

One way to encourage search engine traffic is by adding keywords to your website. Start by using Google's Search-Based Keyword Tool to understand how visitors find your site*.

http://www.google.com/sktool/

The trick to my strategy is to enter general keywords related to your business, and then to find related, underutilized keywords. For example, let's say you sell exercise equipment. Naturally your website already has words like weights, treadmill, elliptical, etc. Using Google's Search Tool, you discover that many people searching for exercise equipment are also looking for information on "heart health." Now the idea is to make hearth health your specialty (or, "niche") area and establish ownership of those related keywords (i.e., get a piece of that search traffic). To do this, add the words "heart" and "heart health" to your website text.

One simple way to increase your keyword ownership is by starting a blog. With a blog, you can target very specific phrases. But remember your blog must be interesting and also related to your main area of business. By offering expert advice, you open up many new marketing possibilities. Don't keyword spam though. Only use keywords where appropriate.

Think of your keywords like nails. Pick a few. Pound them in hard into your website. Google doesn't care if your blog is great literature. As your keyword strategy grows, your specialty area may become more of a main focus.

 

* When using Google's Keyword Search Tool, the important information is the number of searches for words and phrases. You can ignore the pay-per-click pricing info.

   

Converting eBay Customers to Website Customers

Wednesday, 24 June 2009 15:45

Once you've completed a transaction with a customer on eBay, you have established a "business relationship" with that customer. It's perfectly okay to maintain that relationship by sending out promotional offers from your website, if you have the customer's permission. The FCC's CAN-SPAM Act provides guidelines for sending commercial email messages. eBay's auction site has its own rules regarding customer contact. This article explains how to convert eBay customers to your own website customers, without running afoul of the law, eBay policy or your customers' spam list.

What Is Commercial Email?

First let's look at federal law. The CAN-SPAM Act of 2004 establishes guidelines for sending commercial email and bans the sending of unwanted commercial email. The ban does not apply to “transactional or relationship” messages. If you have sold something to a customer on eBay, you have a transactional relationship with that customer.

Many (if not most) Internet retailers consider an existing business relationship implied permission to send promotional emails. When you send out emails to your mailing list, always include an unsubscribe link or instructions. That is the law! This type of mailing list is called an "opt-out" list, because users can choose to leave it. If your promotional email ever winds up in the hands of eBay Support staff, the unsubscribe link will show you are in compliance with federal regulations.

Remember to put an unsubscribe link in every email sent to your mailing list.

The Double Opt-In Mailing List

If you prefer to use a less aggressive approach, the "double opt-in" mailing list is the best solution. The double opt-in method uses a two-step process. First the user requests to join the list. Second the user confirms his identity (or at least ownership of the email address) by responding to an email sent to that address. Mailing list membership isn't finalized until the user verifies his address. The double opt-in method reduces unwanted commercial email.

A simple way to build your list is to add the following line to every email sent to customers: "To join my mailing list, please reply with the word 'SUBSCRIBE' in the subject line."

eBay Rules

The next consideration, also very important, is eBay's own rules on email contact between members. My remarks here are based on eBay's current posted rules. Keep in mind the interpretation of those rules may depend on which eBay Support staff you talk to. Naturally eBay is concerned with preventing unwanted commercial email. But eBay has other concerns too, like eliminating "off-site" sales which cut into eBay's profit. That is the reason many of eBay's rules about customer contact fall under the category of "fee avoidance" or "fee circumvention."

From eBay's Spam Policy Page:

Spam is email that is both unsolicited and commercial in nature. Spam is not permitted on eBay.

  • Unsolicited: The email has been sent without the permission of the person who received it
  • Commercial: The email message discusses buying, selling or trading of goods or services

Example: Direct or stand-alone invitations to join a mailing list

Strategies

So when is an invitation to join a mailing list not "direct or standalone?" The answer is, any time your invitation is transaction-related. In any eBay sale, you'll have several natural email opportunities to contact your winner:

  1. Your winning bidder notice
  2. Acknowledgement of payment received
  3. Item shipped notice
  4. Your courtesy follow-up

(added by Steve: I recently purchased a $2.99 electronics item on eBay and received no less than 10 invitations to visit the seller's website where the prices are "'even lower than eBay.")

Every email you send out should have a simple, non-promotional link that says, "To join my mailing list, please reply with the word 'SUBSCRIBE' in the subject line." Play it safe and don't make any promotional offers in your emails to eBay customers. However, you can mention other non-promotional things. For example, if you're a crafter, you can say, "Subscribe to my mailing list to get the latest Craft Industry news, plus fun projects, tips and reviews!"

When you ship your item to the customer, be sure to include any promotional offers along with your personal thank-you note and business card. You can throw in a coupon or promo code, offer free shipping on the next website purchase or a 10% discount on purchases over $50. Whatever offer you make is less important than getting the customer to your website, getting her on your list, and making sure her next buy comes from your website.

If you use the social networking sites (Facebook, Twitter, LinkedIn, MySpace) you can direct customers to your profile page, and from there to your ecommerce website. (Thanks to ET at TheHowCafe.com for this tip!)

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Free Open Source Software

Written by Steve Arnold Wednesday, 03 June 2009 11:36

In uncertain economic times, website owners are concerned about the high cost of custom website development. Fortunately a number of tools exist that allow businesses to maintain a Web presence with little or no out-of-pocket expense. Free open source software is software that has been freely released by its authors to the public. As the name suggests, the source code is included to let other developers modify or adapt the work.

Open source software is more than just a response to Microsoft's corporate dominance (aka, "vendor lock-in"). Open source has a number of benefits beyond the obvious price advantage:

  1. Quality: Open source software is the result of a distributed peer-review process, which leads to a very high quality product.
  2. Security: Open source offers greater security because the code is publicly available. The U.S. government uses Pretty Good Privacy (PGP) open source encryption technology.
  3. Support: Got a question? Free help is available via online support forums.

Open source software has become widely accepted since the U.S. government began using Linux and open source encryption technology. IBM, Cisco, Sun and Oracle all support open source, with IBM employing over 1,000 open source programmers. Google supports a number of open source projects (including the Joomla! content management system) and released its new Android mobile operating system under an open license. In a recent press release, market analyst Gartner recommended the use of open source software as the number one way to reduce development and maintenance costs. Even Microsoft is jumping on the open source bandwagon with its "Open Source at Microsoft" initiative.

Open source is clearly a major trend and is clearly an economic stimulus for the economy today. The reason we like the open source business model is that it's a way of entering markets and solving customer problems in a very effective way, both from a control and an economic perspective.
Richard Gorman, Bay Partners LLC, venture capital firm

Foothill Web Design uses the Joomla! open source content management system, together with professionally-designed RocketTheme templates, to create your customized business website. The website you're viewing now is powered by Joomla!

If you'd like a website like this for your business, please contact me today.

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Sources:

(1) Gartner, "Top 5 Tips For Cost-Cutting In E-Commerce," 5/11/2009
(2) Google, Andriod Open Source Project
(3) Google, Summer of Code (Joomla)
(4) Investors.com, "Open-Source Software Gains As Moneymaker," J. Bonasia 5/11/2009
(5) InformationWeek, "Study Finds Open Source Benefits Business," Thomas Claburn 1/17/2007
(6) Microsoft, Open Source at Microsoft 6/1/2009


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E-Marketing In A Recession

Written by Steve Arnold Wednesday, 13 May 2009 09:43

(Originally posted at AuctionBytes.)

E-Marketing in a Recession – It’s Raining Customers!

The current economic downturn creates challenges for businesses of all sizes. It also offers growth opportunities, especially for small businesses. As customers feel the pinch, many are shopping for alternative solutions. Use the economic recession to attract and keep those new customers!

Improve Service and Cut Costs

As the economic recession impacts businesses, it is the small businesses and "e-tailers" which are in a better position to adapt. Compare two companies, one with two employees and another with ten employees: Which can more easily cut costs?

According to market research experts Gartner, “The economic crisis comes at a critical time for many providers who will need to improve service levels while taking cost out of the business." ( http://www.gartner.com/it/page.jsp?id=973212 ) Small businesses can capture new customers simply by adding value. In other words, now is the perfect time to start a blog or newsletter!

Expand your customer base now and you will be in a good position to gain market share when the economy recovers. Building your customer base means setting a new goal, in addition to making sales. One advantage you have is that big companies can’t adapt well and are dropping customers. Many companies are cutting back on marketing and advertising. Keep your focus on service (adding value) and you can capture those shoppers.

If we assume that buyers operate in a hunt and gather mode, we can expect buyers to pass through before returning to make multiple purchases. So an important website task is to capture the customer's email address or have the customer bookmark the website. Even if customers aren’t in buying mode now, they will come back later. Use onsite promotions to encourage return visits. Remember you are building customer loyalty. Leverage the power of your customers as advertisers with an effective linking or affiliate strategy.

E-Marketing Pros and Cons

Marketing on the Internet lets you reach a huge audience for relatively low cost. Imagine the cost of mailing ten thousand color brochures, versus the cost of emailing ten thousand PDF files. A discussion forum is another low-budget way to encourage customer participation, and can even be an effective marketing or customer service tool.

Keep in mind that maintaining a blog or newsletter requires a time commitment on your part. Newsletters should be sent at least once a month. Blogs should be updated at least once a week. Both require fresh, interesting and relevant content.

Gartner Recommends Open Source Software

Besides service, the other key to economic survival, according to Gartner, is cutting costs. In a recent press release ( http://www.gartner.com/it/page.jsp?id=973212 ), Gartner’s number one cost-cutting tip is the use of off-the-shelf or open source ecommerce solutions (while applying the savings to design/SEO):

"Except for market leaders, such as Amazon and eBay, custom development is likely to be a waste of effort and money because it supports functions that do not enable a differentiated online customer experience.... A developer who supports a commodity function, such as shopping cart management, would be better to develop rich Internet shopping capabilities or improve site design for search engine optimization so that the site can rank higher in a Google-based search."

The customer can’t tell if you spent $3,000 on your shopping cart, or if you used a free, open source script. According to Gartner, the “online customer experience” will be the same. Open source software is another way the Internet levels the playing field between small businesses and big companies.

(Note: Foothill Web Design uses a combination of both open source and premium content to design your business website.)


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