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How to Start a Small Construction or General Contracting Business

The construction business is booming once more.

In fact, the residential building construction industry was the number one fastest-growth industries for small businesses in recent years (source: Sageworks) thanks an increase in housing demand, lending activity and real estate values.

In addition, six of the 10 fastest-growing industries among small businesses are tied to construction – including contractors, real estate agents and architects.

The commercial construction market is also experiencing a rebound. IBISWorld predicts that the next five years with see a period of robust growth for commercial construction companies. Demand for more business office space and the resurge of disposable incomes will also raise the demand for retail buildings.

If you’re interested in making the move into the construction, now is the time. Here are eight considerations and resources that Peter W Smith Construction has helped compiled that can help you get started.

Steps to starting (any) business

Start by familiarizing yourself with the basic steps involved in planning and forming any kind of business, including planning your business strategy, incorporating and registering with the right government agencies. These 10 Steps to Starting a Business should cover all you need to know.

Get help and be mentored

You don’t have to go it alone; small business assistance programs such as SCORE Mentors or your local Small Business Development Center or Women’s Business Centers can help you understand the ins and outs of the planning process and offer tips for getting started. SCORE can even pair you with a mentor from the construction industry, at no cost. If you are a veteran, contact your local Veterans Business Outreach Center. They offer workshops, mentorship and financing advice.

Access financing

If you don’t have savings or access to a traditional bank loan, you might want to consider an SBA loan program. Other financing options for small businesses include credit unions, community banks or a business line of credit.

Get licensed, bonded and insured

Protect yourself, your business and your clients by ensuring you have the right licenses and permits, business insurance and surety bonds. Here are three reasons why and information on how to obtain them:

  1. Business Licenses and Permits – In addition to a general business license, most construction or contracting businesses need specific licenses to operate. For example, a tradesman license is required for electrical, plumbing, HVAC, gas fitting and other construction trades. Check with your state business license office for information about what you’ll need. If you headquarter your business out of your home, you’ll also need to obtain a home business permit from your city or county.
  2. Surety Bonds – Typically, construction businesses need construction bonds in order to operate legally. You arrange for a surety bond from a third party who promises to pay your client if you do not fulfill your work obligations under a contract. Learn more about surety bonds from the Surety & Fidelity Association of America and take a look at their bonding resources for small and emerging contractors. Bond regulations vary by state, so research your state’s requirements or speak to a reputable surety bond agent. If you are unable to secure a bond through a commercial channel, SBA offers its own Surety Bond Guarantee program.
  3. Insurance – Depending on the nature of your work and whether you employ workers directly, you will need several types of business insurance – general liability, vehicle and property insurance. Individual states also require businesses to carry specific insurance, such as workers’ compensation insurance, unemployment and state disability insurance. For a better understanding read: What Kind of Business Insurance Do You Need?

Familiarize yourself with construction industry regulations

From energy efficiency standards to workplace safety regulations, the construction industry is heavily regulated. Read SBA.gov’s Construction Industry Guide for more information.

Develop an occupational health and safety plan

The Occupational Safety and Health Act (OSHA) requires that construction workers are provided a safe workplace free from recognized hazards. Take a look at SBA’s Workplace Safety and Health guide for information about resources that can help you establish a safe and compliant workplace.

Finding and hiring labor

The construction industry generally secures labor from four sources – subcontractors, hired employees, labor brokers or independent contractors. To get you started read these steps to hiring your first employee and then check out the particular laws and tax ramifications of hiring independent contractors.

Take advantage of industry tools and resources online

There are many online resources that can help small construction companies and contractors who can’t afford the headcount or infrastructure that larger companies enjoy. Here are just a few:

  • Construction Office Online – Includes free downloadable templates and documents such as schedules, estimating, budgets, timesheets, invoicing and billing and more
  • Compare Construction Business Software – Looking for the right construction management solution? This guide lists the “Top 10 Most Reviewed Construction Systems”
  • Construction Marketing Association Blog – Tips and insights on how to market your business like a pro
  • Overcoming Obstacles: Best Practices for Subcontractors, General Contractors, and Public AgenciesDownload Adobe Reader to read this link content For more information about some general issues with doing business in the construction industry such as cash flow, communication between contractors, change order processing, contract negotiations and more, check out this whitepaper from Washington state’s Small Business Growth Opportunity Council

Tips for Managing Your Global Supply Chain

In the face of competition and economic pressures, global supply chains are under more and more pressure to deliver their products at a greater value, on-time and at a lower cost. But if one link in the supply chain is broken, (for example, a delayed payment or late shipment), the consequences to your small business can be problematic.

So what can you do to better manage this process and reduce the downstream strain on your business?

Find Someone with Expertise to Help Oversee Foreign Suppliers

Whether your supplier is in Asia, South America or Europe, small businesses can benefit enormously from the services of an in-country representative. There are many global supply chain management consultants who offer these types of services, which include vetting international suppliers and navigating export regulations, taxes and logistics in that location.

Try to find one who has expertise in that country and who spends a good amount of time there. Although you’ll incur some costs, the payoffs in reduced liabilities, taxes and shipping will be well worth it.

A licensed customs broker can also help navigate laws and regulations and help you prepare the documents needed to import goods, as well as facilitate communication between the importer and the U.S. government. You can search for certified customs brokers at the National Customs Brokers and Forwarders Association of America.

Explain Your Buying Patterns and Schedules

Be sure to set clear expectations in regards to your anticipated annual buying scale and schedule. To do this, you’ll need a good handle on your sales forecasting. If you are sourcing goods overseas, shipping those goods will take time, so you need to have a good picture of current demands for your inventory and how these are forecasted to shift in the future.

Also, be sure to ask your supplier for regular updates on their inventory data.

Don’t Rely on Just One Supplier

When it comes to effective supply chain and inventory management, redundancy is everything. Have a back-up supplier (one is good—you don’t want to manage too many suppliers).

Not only will they prove invaluable in the event of production or logistical issues, they can also give you some competitive leverage and help ensure you maintain the best cost base across your suppliers.

Build Goodwill

Building good relationships with your suppliers can lead to mutual benefits such as better terms at the negotiation table and improved production and delivery schedules. Try to treat your suppliers as partners, and look for ways that encourage them to view you in the same light. You can do this by paying them on time, cutting some slack on one-off mistakes and being flexible.

For example, are there things you can do to help them cut costs or better fulfill your order such as being flexible about certain delivery schedules, order volume or ordering alternative product lines?

Don’t forget communication. If you are able, try to meet directly with your suppliers. Get to know and respect their cultural and business backgrounds and train your entire team to be aware of and sensitive to any differences should they arise.

Save Costs and Reduce Risk by Sourcing “Made in the USA” Products

If you do find that global supply chains are simply too risky for your business or you find that you can’t make the minimum orders for importing inventory or goods, consider options for sourcing more from domestic suppliers.

Turnaround time from overseas factories can be substantially slower than domestic suppliers. Sourcing domestic goods can help you meet demand more quickly and react on the fly to market demands.

For many small business owners, it’s a common truth—investing in a domestic supply chain rather than trying to cut costs from the onset by sourcing overseas can save money in the long run.

5 Advanced Social Media Marketing Strategies for Small Businesses

Social media marketing and the businesses that utilize it have become more sophisticated. More small businesses are beginning to understand how to best leverage online tools to build a community and recognize that engagement and interaction are the foundations of social marketing, but most don’t know what’s next.

What follows are five advanced strategies for small businesses that may already have small online communities and understand how to create an online presence, but don’t know what to do next.

What Is An Advanced Strategy?

The definition of an advanced social strategy is a technique that goes beyond the normal social media presence. It introduces or reinforces a marketing message while pushing a user to another profile or business site. Before moving forward with an advanced strategy, it’s important that your business understands social marketing, has experience engaging consumers, and that you possess a basic understanding of online marketing.

Strategy 1: Multimedia Usage

The term “A picture is worth a thousand words” has never been truer. Consumers are now using the web to look for product pictures and videos; they want more information and want to see what they’re considering buying. The good news is that it’s easy for a company to create and publish videos and pictures.

In addition to taking photos of products, you can also take pictures at office events as a way to highlight company culture. This not only helps convince others to work with you or to buy from you (consumers see that you are down to earth and one of them, instead of a stuffy company), it also helps your HR department recruit new employees. Who doesn’t want to work for a company that celebrates birthdays and has a good time?

Videos are useful for explaining complex how-tos or concepts. Showing step by step directions can have a greater impact than even the most well written article. Businesses don’t have to invest huge sums of money to create good videos, either. I highly recommend the relatively cheap Flip camcorder, which takes great videos and is easy for even a non-technical marketer to use.

Multimedia can break down the faceless business-to-consumer sales flow and make your company appear friendlier. Use videos and images to show that your business is fun, you care about your employees, and most importantly, that you care about your customers.

Strategy 2: Integrate Offline and Online Advertising

Many small businesses do some sort of offline advertising, whether it be radio, print, or cable. Social marketing allows a business to extend their offline sales pitch.

Including your Facebook Page or blog URL in offline ads act as social proof, inviting potential consumers to see your community and increase trust in your business. Not only can integrating online and offline advertising help the conversion process, but it can also help build your community. Introducing potential consumers to your social profiles means they may join your community now and buy later.

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Strategy 3: Message Adaptation

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As businesses start to become more sophisticated with social media they are starting to leverage more online platforms. However, most deliver the same message over multiple platforms instead of tailoring communications for each individual site.

Social platforms each have an ecosystem of their own. What might be acceptable on Tumblr might be considered spam on Facebook. A specific style of writing might spread on Twitter but fail on FriendFeed. Understanding that each site is different and then customizing your message ensures they do well on each respective site.

Not only does customizing messages across sites help the message spread but it keeps users from receiving multiple identical communications. Be sure to maximize your potential by sending a user that follows the business on Twitter and Facebook two different messages, instead of the same thing.

Strategy 4: Local Social Networks, Beyond Yelp

For a small business, local search can be a big win. Being visible to consumers looking for a business in their area is extremely important. Make sure your site is included in local business directories in order to help ensure that consumers find you when they need you. Sometimes finding that many sites can be difficult, however.

First, make sure you check your competitors. Where are they listed? Check their inbound links to check for business directories you can add yourself to. Also, make sure your business has been added to Google Maps, using the Local Business Center.

Take the time to include all the information you can and update any old news. For many consumers, this will be their first interaction with the business.

Strategy 5: Contests and Discounts

Building a community is only the first part of social marketing. Using that community to drive sales, propagate marketing, or crowdsource operations is the true power of social media. One way to excite the community is to collectively do something to create a contest or offer an exclusive discount (i.e., the contest can create competition between users). Not only does a contest build buzz organically but if contestants need to, for example, publish an article that gets the most comments in order to win, the contest itself becomes viral.

A good social media contest should include some sort of sharing or virality as a requirement for winning.

Discounts are also a great way to connect with your community. By giving exclusive coupons to your social community, you’re rewarding and reminding them that you are not only a brand to engage with, but also to buy from.

Here’s Sony’s new business strategy

sonyReutersA pair of 3D glasses is displayed in front of Sony Corp’s new 3D Bravia televisions during an unveiling in Tokyo March 9, 2010.

Sony revealed a new business strategy that is ambitiously targeting an operating profit of at least $4.3 billion in the company’s 2017 fiscal year (ending March 31st 2018).

This is a huge leap from the ¥20bn operating profit predicted for the current year, ending March 31st. Indeed, the company still expects to register its sixth net loss in seven years during the present period, albeit by a smaller amount than it previously anticipated. Sony said it will use a goal of 10% return on equity (ROE) as the main indicator by which it will measure its profit target.

Fewer products

sonyDavid Gray/ReutersChinese sales staff talk with customers behind a row of Sony computers for sale at a computer market in Beijing June 29, 2009.

The Japanese electronics firm believes the key to swelling its profit and ROE base is to focus on a narrower band of products. Primarily, Sony has said it will no longer look to pursue growth in business areas where intense competition puts it at a disadvantage. Smartphones are one such example, and the company has struggled to compete with Samsung and Apple, as well as budget smartphone manufacturers such as Huawei and Xiaomi.

Although Sony will still make smartphones and TVs, it will not “rule out considering an exit strategy” in these areas. A possible spinoff or partnership for these divisions seems likely. The strategy will therefore see Sony shift to more profitable business areas, such as camera sensors, videogames and entertainment products.

Three businesses

sonyToru Hanai/ReutersA man walks in front of Sony Corp’s headquarters in Tokyo January 22, 2009.

Sony’s CEO, Kazuo Hirai, has divided up the company into three sectors. The potentially profitable business areas have been categorised as the company’s “Growth Drivers”. This covers Devices, Game & Network Services, Pictures, and Music. Sony will employ aggressive capital investment in these areas, with the aim of achieving sales growth and profit expansion. There will be increased investment in image sensors, as well as enhanced R&D in the area, expanding their applications in everything from smartphones to medical treatment.

Meanwhile, Sony will work to expand the installed user base of the PlayStation platform. In Pictures, Sony will focus on increasing its audience, and for Music it will centre growth on burgeoning areas such as the streaming music market.

Next comes the “Stable Profit Generators” sector. Here, Sony will prioritise the generation of steady profit and positive cash flow for Imaging Products & Solutions, and Video & Sound. By capitalising on its existing technological expertise in these areas (rather than engaging in large-scale investment), and by optimising fixed costs and enhancing inventory control, Sony will target a profit maximisation and return on investment.

Lastly, the laggards are those areas focusing on “Volatility Management”; namely TV and Mobile Communications. These businesses operate in markets characterised by high volatility and challenging competitive landscapes. By carefully selecting the territories and product areas it targets, Sony will seek to limit its capital investment and establish a business structure capable of securing stable profits. To achieve stability, the company is aiming to spin off its Video and Sound business unit in October 2015, establishing it as a wholly-owned subsidiary. Sony says it will also explore potential alliances with other companies.

An achievable goal?

Sony Kazuo Hirai,

Sony’s optimistic profit target belies the tumult that the company has suffered in recent years. Indeed, even now it is still restructuring, selling off its PC division and spinning off its TV business, as well as cutting thousands of jobs. However, many in the technology industry have praised Sony’s trajectory over the past year, which has seen its share value increase by over 80%. This growth has been partly attributed both to the recent appointment of Kazuo Hirai to company CEO, and to the appointment of Kenichiro Yoshida as his Chief Strategy Officer in late 2013.

As this announcement suggests, the pair are likely to continue to aggressively pursue restructuring over the short to medium term. During Mr Hirai’s recent strategy presentation, he placed particular emphasis on profitability over volume, securing business unit autonomy with a focus on shareholder value and providing a clearer definition of each business unit’s position within Sony’s overall business.

Strategy for Business Media and Entertainment

Restrained credit as well as shifts in media consumption can make it difficult for media companies to grow and maintain adequate cash flow. McKinsey works with senior management to address these and other challenges with a range of corporate strategies, including joint venture and acquisition opportunities.

What we do

Our corporate strategy teams take a top-management perspective, helping media and entertainment companies focus on critical issues that affect top-line growth and profitability. Our expertise and experience includes:

Realizing the promise and profit potential of global markets. Our network of local media consultants in 36 offices around the world support clients in developing strategies for entering new markets and evaluate capabilities market-by-market to make sure they reflect local needs.

Supporting acquisition planning, due diligence, and merger integration. We support mergers that create significant shareholder value by providing informed, objective counsel at all stages of the acquisition process.

Managing government and regulatory relationships. Government actions can impact industry profit pools by between 30 and 50 percent, yet most companies do not engage with government stakeholders in a way that reflects the value at stake. We help media and entertainment companies develop national and international negotiation strategies that reflect the interests of all stakeholders.

Examples of our work

  • Helped a mid-sized US media company assess its portfolio of TV stations, cable channels, and newspapers. As a result of our review, the client shifted expectations and capital allocation among properties, refined its corporate organizational model, and began identifying acquisitions that could efficiently leverage its existing business infrastructure.
  • Identified cross-category growth opportunities for an emerging market media company seeking to grow its business and brand presence. We presented business cases for 14 growth opportunities after conducting detailed category assessments and performing internal and external stakeholder interviews, with total revenue potential of $65 million.
  • Developed a long-term strategic plan for a motion picture studio that included rationalizing the 5-year film portfolio to increase returns on investments. The work resulted in major shifts in the genres of films targeted, adjustments to film budgets to better reflect risks and revenue projections, and more use of outside financing.
  • Helped develop a 5-year business plan for a newly merged European pay-tv organization. The plan included developing a pricing methodology to support divestment of several channels required to obtain regulatory approval.

Research and insights

Our corporate strategists regularly conduct original research focused on strategic business growth. Three recent efforts include:

  • The Granularity of Growth, explaining how to identify the sources of growth in an era of hyper-competition and globalization, with the aim of driving enduring company performance.
  • Global Forces research, incorporating original research and insights from more than 1,000 executives, identifying five forces that will restructure the global economy and their implications for global companies.
  • The McKinsey Global Institute, conducting fully independent, McKinsey-funded research projects that combine leading-edge academic economic thinking with real-world expertise in the operations of companies and sectors. Recent media-related projects include big data and its implications for innovation, competition, and productivity and the global economic impact of the Internet.

What Stock Market Risks Are You Willing to Take?

Presumably the most imperative thing about being a fruitful stock dealer is their perspective. That stuns many people to hear in light of the fact that a large portion of them such as to concentrate on the qualities and markers of a given stock. They need to know when a stock should be sold either to take benefits or to stop a misfortune. Like it or not, this choice is an enthusiastic one for most financial specialists, especially the individuals who exchange coolly.

The Procedure:

Stock market exchanging can be a difficult and risky procedure. A few stocks are plainly a higher risk than others. Thus, it is imperative to ask yourself whether you are willing to wander into a few risks with your cash to figure out whether the stock market is ideal for you. If you are a risk unfriendly individual whose stomach agitates when bringing chances with cash, then you ought to presumably stay away from the stock market through and through. However if you wouldn’t fret in any event some risk with Yelp Stocks, contributing no less than a little parcel of your cash won’t not be a terrible thought.

Market Timing:

Market timing is particularly simple to do with common assets. Passing up a great opportunity can have a major effect in your long-run returns. Putting month to month in a specific stock is an awesome approach to assemble riches and adapt to market good and bad times. Your settled speculations purchase more shares when costs are down and less at larger amounts. Fetched averaging can individuals turn out to be more trained in light of the fact that it supports contributing amid market nadirs when people generally may be excessively frightful. An especially decent methodology is to get serious about your ventures when costs are discouraged, if you’re ready to.

To start with, they can contribute with the pattern of the market. Taking after the pattern is a demonstrated system, however it is not as simple as it sounds. Contingent upon your time span, you can adjust your stock position to the pattern once you have identified it. When you take after the pattern, you can lessen the probability your stock will fall when the market pattern is rising.

Risk Taking:

The other side of risk is the level of prize that accompanies it. There is no way to avoid this. Such a variety of beginner brokers need a low level of risk with a huge prize. Periodically, we read about some fortunate gentleman who turns into a tycoon with almost no capital contributed, however the same can be said for lottery champs too. Also, that happens about as frequently as hitting a lottery does as well. In outline, if a man needs to control their perspective with respect to the stock market, they should locate an agreeable level of risk and remunerate that suits their identity. The best brokers have figured out how to respond the same route candidly to victors and washouts since they have built up an arrangement of exchanging standards that compliments their own style.

Online Lenders Can Make Semi Truck Financing Experience Enjoyable And Easy

Financing commercial vehicle requires good credit score and commercial driver license. However, with current financial condition, credit has tensed up, considerably, especially in trucking sector. Semi truck financing is different than consumer vehicle financing. Consumer vehicle financers are everywhere, but it is challenging to find semi truck fund sponsor.

You may not find financers near your locality and even if there is one, then the rates may not be suitable or you may not qualify due to bad credit or have no collateral. The reasons for denial for financial support may be numerous. You can learn about truck financing by visiting www.gotruckcapital.com

Reasons why online financing source is the best option

Competitive rates – Fortunately, internet has given everyone a good opportunity to find the best financing rates for semi truck. Rates provides online are more competitive than those offered by local lenders.

By visiting websites, you will come across many finance companies ready to provide affordable rates, because of cut-throat competition. They are well-aware that consumers will approach their competitors, who supply best rates.

Vast options – Another advantage is that online gives you an opportunity to accept financial help from anywhere around the world offering best deals. Thus, you get a plethora of financing companies to select from.

Funds are made easily available – You simply need to fill an application form online. Review and approval takes 2 to 4 days. The funds are wired directly to the potential truck company or into your account.

Flexible payment options – This is a great aspect of online financing of semi-trucks, because you get a chance to select payment schedule, which is suitable.

Good knowledge about trucking business – Online finance companies understand trucking sector. Therefore, they employ different approaches and create a practical semi-truck finance structure including down payments, collateral and payment pattern.

Obtaining finance from the local bank can be convenient in regards to location. They provide loan, but hardly know semi-truck financing sector, so they are not interested in providing competitive rates. However, online lenders make your financing experience enjoyable and easy.

Avoid in-house dealership – The dealer, you purchase truck from, offers in-house financing, but their way of approval is different. There are several factors they may consider like divorce, illness, credit score, loss of truck and more. Even if financing gets approved, the rates may be high.

In fact, the in-house dealers accept funds from an outside funding source, which means you get less favorable rates on your loan. Actually, such arrangement is profitable for the dealers but not for truck buyers.

Bad credit is not an obstacle – Online financing companies are experienced in working with commercial truck owner-op. They provide loan solutions to truck owners with less than perfect credit, even if their loan application has been rejected by the bank or dealership.

Low down payment – First time truck buyers can also apply. They can take advantage of down payments as low as 0% to 10% provided by online financing sources.

Finding a good deal for financing of semi truck is vital for success in trucking business. A best rate means reasonable payment structure. Thus, you have to worry less about loan and concentrate on the business.

Four things that are killing your conversion rates

It is not enough to simply spend your time attracting visitors to your website. Once you have reeled them in, you need to make sure they convert. Here are four things that could be killing your conversion rates.

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No visual media

Photos can help to connect an audience with an online business, making it seem more real and genuine. If your website is devoid of any photos, particularly if you sell products online, you could be inadvertently slashing your conversion rates. According to Entrepreneur, it is important to have professional photos of either yourself, your products or your business on your website.

Poor conversion opportunities

If you do not offer your audience the chance to make a conversion, you could be losing out on a sale. According to Forbes Magazine, you should make it easy for your users to convert by placing conversion opportunities across your site. This can also help to reinforce your call to action. When providing conversion opportunities, avoid being over forceful, however, as this could have a negative effect on conversion rates.

Hidden information

There is nothing more frustrating than wanting to make a conversion but lacking sufficient information on the website to achieve this. Whether it is not being able to find information about contact details, your returns policy or delivery times, if a customer can’t find what they are looking for, they are less likely to complete the transaction. This could kill your conversion rates.

It is not always easy to know what vital information might be missing from your site and is deterring visitors from completing a sale. An expert such as https://www.viziononline.co.uk/ − a website designer London-based business − can diagnose which issues may be letting your website down. Professionals will understand what is required to maximise conversion opportunities.

Confidence and trust

If you are an unfamiliar online brand, you may be losing conversions because potential customers lack confidence and trust in your business. You can easily boost your trustworthy reputation and credentials by providing valid testimonials and customer reviews on your website, thereby offering reassurance to customers. Make sure you also provide safe and secure e-commerce facilities and a contact telephone number so that customers can get in touch if they want any further clarification about your products or services.

Four benefits of a digital sign-in system

The average school or college receives numerous visitors in any one day. Signing these visitors in can be a time-consuming process for your administration staff, particularly if they are relying on an old-fashioned, paper-based visitor book.

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Digital sign-in systems provide a quick and convenient way for visitors to gain access to a facility. Utilising the latest technology, people can sign in using a mobile phone or tablet.

Quick and convenient

Visitors, contractors and temporary staff will be greeted with a professional signing in system that takes seconds to use. No more time is wasted signing people in, preparing visitor passes and attempting to decipher illegible handwriting in the visitor book. Information is recorded in an accurate way for every visitor.

Free up staff time

Signing in visitors manually is time consuming. With an automated system your school secretary or administrator will be free to concentrate on other important tasks. As the sign-in screen is portable, visitors will still be able to access the premises even when admin staff are running errands or taking a lunch break.

Enhanced security

Digital sign-in systems provide an instant report of who is in the building at any one time, with the added benefit of being able to access historical data and keep track of frequent visitors. In the case of a fire or security alert, the report will tell you who is present at the time of the incident. Having such a system in place provides an additional safeguarding measure, which could improve your status at school inspections.

Option for branding

There are options for branding the main screen so you can display your logo and also add a customised message that will appear when visitors sign in. If required, you can print out visitor or ID badges to distribute to people. Once you have a visitor signed into the system, you have the option to communicate with them via SMS or text should it become necessary to get an urgent message to them.

Schools, colleges, children’s centres and other educational facilities can all benefit from a visitor management system to replace the old-fashioned visitor book. Such a system will not only provide increased security but will also make it possible to welcome visitors with ease and track exactly who is in the building at any one time.

Increasingly Stringent Property Criteria Affect Mortgage Market

Securing a mortgage is difficult enough from a financial perspective, but now there are rising concerns about the extent to which lenders are taking other attributes of a property into account when making a decision.

One of the biggest issues in the modern era is the presence of Japanese knotweed, which can be a deal breaker for banks and building societies in the same way that a lack of damp proofing was in the past.

However, the mortgage market is now being influenced by a growing list of plant life originating outside of the UK which, like knotweed, may have a negative impact upon a buyer’s ability to secure a mortgage. http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/12012333/Now-its-not-only-knotweed-that-will-stop-you-getting-a-mortgage.html

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Growing Problems

Plants which are deemed to be invasive are an issue that property owners and buyers alike are being urged to tackle by lenders. This invariably leads to steadily mounting costs for management and treatment. And with even a simple report into any potential issues costing several hundred pounds and introducing an extra step in the process, advisors are increasingly taking advantage of financial advisor software such as the solutions offered by http://www.intelliflo.com/ in order to keep track of ever more complex cases.

Dealing with knotweed and other plant life can be costly depending upon any guarantee required in order for the mortgage to be approved. In some instances the removal work need only be guaranteed for 24 months, while other lenders demand up to 20 years of assurance. As a result, some people end up having to find thousands of pounds if their property is affected.

Annual visits from experts to check that the problem plant remains absent, combined with a range of different removal options that vary in price and effectiveness simply serve to exacerbate the issue.

Proportional Response

 While it would be wrong to ignore the risks posed by Japanese knotweed and its invasive allies, some insiders are convinced that this issue is being overblown by lenders. Royal Horticultural Society Representative Buy Barter, for example, told the Telegraph that a small amount of Japanese knotweed should be inexpensive to remove and should not justify an additional burden on those seeking a mortgage.

For the time being it looks as though lenders will remain eager to order weed removal before awarding mortgages, but things may improve once the initial hysteria abates.

 

Putting out fires safely and automatically

Bristol Automist installers can fix a fire safety system in your home that not only detects fires but also puts them out.

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The system is easy to install and is suitable for any building. It gives great peace of mind to homeowners and to landlords, as it is suitable for blocks of flats including shared areas.

Most homes have smoke alarms that only let you know there is a fire – the fire still needs to be dealt with either by calling the fire service or using fire extinguishers. Should a fire start when the occupant is out, the blaze could be out of control before it is detected by a passer-by. This is where the Automist system comes up trumps.

Automist detects fires and puts them out

The Automist system works by detecting fires and then using a sprinkler system to put out the blaze. The special system creates more of a mist than the traditional sprinkler systems, which drench the room and can cause damage. Automist uses much less water than these sprinklers, resulting in minimal water damage.

The system works automatically and can put out fires even when the occupant is out or asleep. Unlike smoke alarms, it won’t be triggered by false alarms such as when you accidentally burn the toast; in addition, unlike with extinguishers, you don’t have to try to tackle the fire yourself. You can get yourself and your family out of the property quickly and safely.

Bristol Automist installers such as Mainpoint fire protection can talk to potential customers about the system, installation and cost and can provide a fire safety system that works with your home.

How Automist works

Automist can be used to target the rooms most at risk of fires, such as the kitchen. It runs on the domestic water supply and can be installed underneath a tap.

If a blaze starts, the heat detector unit sounds an alarm and the pump is activated. The pump pushes the water from the mains through the Automist system, which is activated to put out the fire.

Automist has been named by the British Library as one of the top 15 inventions of the past decade. It is reliable, affordable and only needs a quick test during the annual maintenance check.

This is the best solution for keeping your home and family safe from fires.

Four Benefits of Crowdsourcing

From crowdsourced software testing to retail and graphic design, many of the world’s biggest brands are turning to crowdsourcing. Crowdsourcing is a rapidly growing industry, that is defined as “the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people.” Here are four reasons why you should be considering crowdsourcing for your business:

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A Cost-Effective Solution

Subcontracting a job out to a professional could run into hundreds, if not, thousands of pounds. The main advantage that crowdsourcing brings is a significant reduction in cost when compared to the expense of hiring a dedicated expert for a particular project.

Expert Knowledge on Demand

Crowdsourcing can provide access to the relevant expertise for a fraction of the cost it takes to hire a contractor or employ a full time member of staff. Even if the rate per project is high, you will only be paying for the time devoted to that specific task. Because there is a far wider talent pool, you have a much greater chance of finding exactly the right person for the job.

Large Workforce

If you need to complete a long list of small tasks, crowdsourcing enables you to tap into a wide talent pool that will be paid per project. These people generally work from home, and can be sourced from anywhere in the world, providing a global workforce that is accessible at all times. For example software testers such as bugfinders crowdsource the process of finding and fixing bugs in software and ensuring that mobile and web-based apps are performing correctly.

Fresh Ideas

Crowdsourcing connects you to a large number of people, each with the potential to add something entirely new to the proceedings. You may be exposed to innovative solutions and alternative ways of doing things that you may not have considered. Working with a diverse global group can help to solve a problem quickly and effectively and provide access to original ideas.

For many businesses, crowdsourcing represents a cost-effective way to carry out business. As the world becomes increasingly digitally connected, there are greater opportunities to harness the collective wisdom of a global talent pool.

Crowdsourcing is beginning to get attention in the business world. It creates a convenient and affordable solution for businesses of all size who have short-term projects that need completing fast.

Financial plan Dedicated Server Pros And Cons

As you get your web endeavour off the ground and notification the first indications of development, you may need to consider the best kind of server to help run your webpage into what’s to come. While numerous lean toward shared facilitating in the early stages, this boulevard is full of troubles. First off, your Web Hosting Mumbai is constrained by what it can store and finish for its clients. Besides, you never realize what different types of danger taking programming that alternate destinations on that server are running. On the off chance that an infection gets into the server then it can spread to different destinations under the umbrella. Basically, you could get hacked without ever really doing anything incorrectly. On the off chance that you don’t produce much movement, a common host may be okay, however it won’t be long, as you keep on growing, that the requirement for something greater will emerge.

At the point when that need does emerge, most swing to spending plan committed servers for backing. These specific sorts of servers convey with them numerous masters and a couple cons that you should be mindful of before you update. To begin with, the terrible news. Financial plan committed servers may be reasonable, however they are as yet going to oblige that you pay more than what you may be accustomed to paying. All things considered, you have the whole server and its assets to yourself versus part the expenses with different locales on a mutual arrangement. Another conceivable con of the financial backing committed SEO Company in Mumbai server is that you may wind up paying for force that goes a long ways past what you really need to run your site. In any case, on the off chance that you are contemplating this in a pessimistic light, take note of that you doubtlessly do likewise when discovering a PC. What number of you are really going to need a full terabyte whenever in your figuring profession, for example?

The upsides of the monetary allowance devoted host are numerous, far exceeding the disadvantages. Firstly, development and vacillations in activity are less demanding to handle. Your guests get a more dependable web experience, and the shots of them getting an infection or getting hacked as an aftereffect of exercises happening on your website are nil. As opposed to full scale committed facilitating, spending plan devoted servers really permit you to pay not exactly what you would need to pay in the event that you ran everything naturally. With spending plan committed Data Hosting facilitating, you can frequently exploit the aptitude of a server director, who can guarantee your web properties are dealt with and safe from infections at all times.

Offering Complementary Products Can Boost Your Small Business

offering-complementary-products-can-boost-your-small-business.jpgWhatever your retail niche may be, you should be aware of the complementary products and/or services that can help draw in more customers and boost your bottom line. A little effort invested in the logical expansion of the goods and services you offer can pay off big for your small business.

Simply put, a complementary product (or complementary good, as it’s sometimes called) is one whose use is interrelated with the use of an associated product so that a demand for one generates a demand for the other. For example, a store that sells fine china and flatware almost always also stocks stemware, table linens, candlesticks and other related tabletop merchandise. Full-service gas stations also sell motor oil and tires, and many dry cleaners also offering tailoring services on the premises.

Complementary products enhance each other either out of necessity (toy stores sell batteries) or because they enhance each other (donut shops sell coffee). Choosing the right complementary products or services for your retail operation is an exercise in thinking about what logically “goes” with what you’re already offering. Alternatively, pay attention to the types of goods or services requests you get from your established and new customers, and then consider adding them to your inventory.

Offering complementary products to your customers has many advantages. The most obvious is turning one sale into two or more. Customers who have already done business with you are more likely to do so again; likewise, if they’ve bought one item from you, they’re more inclined to buy another (or a combination of others) that complements it. Most consumers prefer to complete their shopping in one location and avoid traipsing from store to store. If they can fulfill all their needs in one purchase at your store, that’s a bonus for both them and you.

Offering a discount on the purchase of two or more complementary products can also pay off for you and your customers. This is known as bundling, as anyone who has ever contracted with one provider for their phone, cable and Internet service knows. When you offer shoppers a better deal if they bundle goods or services, they’ll leave believing they’ve saved money while you profit from the additional sale.

Consider running a promotion that features a free service or product to attract new customers or to reward established ones. For instance, if you operate a day spa, consider offering a free mani or pedi to clients who purchase a day-of-beauty package. If you run an online business, offer coupon codes for complimentary shipping or a percentage off the total purchase to encourage shoppers to make a purchase.

Some other ideas to consider when setting up your complementary product/service program include:

  • Promote the value of the complementary goods or services in cash, not as a percentage of the overall purchase. Dollars and cents often motivate shoppers more than a percent sign!
  • Spur customers to action by setting a time period in which they must make their purchase to qualify for the discount or free product.
  • Give your customers a choice of which complementary product or service they’d like. If you sell jewelry, think about offering a discounted price on earrings or a bracelet to shoppers who purchase a necklace.
  • Create one or more alliances with other merchants who offer products and services that complement yours, promoting all your businesses. Examples of such cross promotion alliances include landscapers and painters, caterers and florists, and clothiers and shoe stores.
  • Finally, make sure the complementary goods you offer are truly related to the product purchased and that they’re something your customers are likely to want. Making the sale is important, but gaining or keeping a customer matters more.

Self-employed persons exercising a complementary activity

A self-employed person is a natural person who exercises a professional activity in Belgium, is not bound by an employment contract and does not have civil servant status.

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There are other categories of self-employed persons apart from those who exercise a main activity in that capacity. These include assistants or assisting spouses, persons exercising a complementary activity on a self-employed basis and retired self-employed persons.

Self-employed persons exercising a complementary activity simultaneously exercise another, main professional activity, either as a salaried employee or in education system or as a civil servant.

Persons who receive a replacement income or who maintain their pension rights may also be considered self-employed persons exercising a complementary activity.

The formalities applying to self-employed persons wishing to exercise a complementary activity are identical to those applying to anyone exercising a main activity on a self-employed basis.

You may be considered a self-employed exercising a complementary activity if:

  • you are a salaried employee, temporary employee or trainee teacher, in which case the number of hours worked as a salaried or temporary employee must amount to at least a half-time job as calculated on a monthly basis;
  • you are a civil servant, in which case you must be working 200 days or 8 months of the year, and the hours worked must be equivalent to at least a half-time job as calculated on a monthly basis;
  • you are a qualified teacher, in which case you must work at least 6/10 of the time ;
  • you are unemployed, in which case you must be receiving unemployment benefit and be authorised to exercise an activity as a self-employed person exercising an activity on an ancillary or occasional basis;
  • you are receiving an incapacity allowance from your health insurance fund, in which case your incapacity to work must be at least 66% and the payment you receive must be at least equivalent to the pension of a lone self-employed person.

Social security status

Like other self-employed persons, those exercising a complementary activity are subject to self-employed status and must therefore join a social insurance fund and pay quarterly contributions. In this instance, the payments made do not entitle the person effecting them to family allowances, sickness or invalidity insurance, healthcare insurance (major risks), insurance against their incapacity to work, pensions, insurance against bankruptcy, and so forth.

Terminating your main professional activity

When you terminate your main professional activity, you will retain the status of a self-employed person exercising a complementary activity:

  • either if, to replace your salary, you receive a social security payment that is at least as high as the minimum pension received by a lone self-employed person;
  • or you retain your rights to a retirement or invalidity pension.

Consequently, a self-employed person exercising a complementary activity who terminates their main professional activity does not automatically become a self-employed person exercising a main activity.

Limitations on your complementary activity

In principle you may:

  • spend as much time as you like exercising your complementary activity;
  • earn as much money as you like exercising your complementary activity.

An unsuccessful start

If the complementary activity you exercise as a self-employed person does not prove as successful as you had hoped, you may decide to terminate it.

The National Institute for the Social Security of the Self-employed (NISSEExternal link) may authorise the reimbursement of social security contributions if:

  • your complementary activity only earns you a limited income;
  • you terminate your complementary activity within a year of starting it;
  • you submit a request to this effect.

Effectively Aligning Business Strategy and Supply Chain Strategy

When we think about value creation within an organisation, it is clear the extent to which the supply chain is involved. From forecasting and sensing demand, managing inventory and service levels, distribution and warehousing through to sourcing and procuring products and raw materials, supply chain activities have a profound effect on the organisation’s ability to generate value.

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What guides these activities is the supply chain strategy. What defines “value” for an organisation is the overall business strategy. Alignment between the two is therefore imperative in supporting the value creation process and overall performance of the organisation.

How can we ensure our supply chain strategy is strongly aligned with the overall business strategy? One way is to change our perspective of the overall business strategy and view it along four hierarchical levels, and then align the particular supply chain strategy elements to those levels. These levels are network strategy, corporate strategy, competitive strategy and functional strategy.

  • Network strategydefines the interactions and relationships between different enterprises, the network structures that define them and the level of competition or cooperation that exists between them.
  • Corporate strategydeals primarily with the “portfolio” aspects of the organisation. What businesses should we invest in? How should we structure our acquisitions? Even for single-firm organisations, portfolio decisions arise in, for example, what distinct markets should be targeted.
  • Competitive strategy deals with “position”. How do we position ourselves relative to the competition within a particular market? How do we perform activities that cannot be easily replicated by rivals, or how can we perform the same activities at a lower cost?
  • Functional strategydeals with the arrangement of internal capabilities (people, process, systems and data) within an organisation in support of higher-level strategies.

By defining strategy in terms of these four levels, we can then clearly delineate the supply chain strategy elements that align to them.[i] Table 1 illustrates this:

Strategy Level Level Focus Supply Chain Oportunities Value
Network Extended supply chain Obtaining and incorporating downstream data to improve planningUnderstand the extended supply base and the associated risk profile Provides more flexibility to respond to supply chain disruptions
Corporate “Portfolio” decisions Opportunities for shared logistics services (e.g. warehousing) to realise synergies and/or cost savingsMultiple supply chain structures (e.g. efficient or responsive) to support different market offerings More efficient use of enterprise supply chain resources
Competitive “Position” decisions Performing supply chain activities that rivals cannot match (e.g. same-day home delivery)Cost leadership through highly efficient supply chain operations Supply chain becomes a source of competitive advantage
Functional Capability design and arrangement Improving information flow across functions through, for example, the introduction of a sales and operations planning (S&OP) processImplementing advanced technology solutions to improve supply chain management Successfully execute higher-level strategies

Let’s look at a few examples of how leading companies develop supply chain capabilities at each of the four strategy levels:

  • At the network level, Apple develops partnerships with a selection of key suppliers (both direct and those further upstream), rather than multiple separate suppliers, to share information and ensure the high-quality manufacture of iPhones and iPads.
  • At the corporate level, clothing retailer Gap operates three distinct supply chains to support different market offerings – a low cost supply chain based in China for the cost conscious Old Navy brand, an agile supply chain in Central America to support the core Gap brand, and a high quality supply chain in Italy to support the premium Banana Republic brand.
  • At the competitive level, Amazon has positioned their supply chain as a key source of competitive advantage, offering second-day delivery on 15 million items (including groceries in select cities) through their Amazon Prime and AmazonFresh initiatives.
  • At the functional level, global food manufacturer General Mills has invested in several key supply chain technologies, supported by a world-class internal IT team. Technologies implemented and used successfully include demand sensing software from Terra Technology and transportation optimisation software from ORTEC.

Authoring By : Mathew Tolley

Strategy and Business Planning

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Organizational Structure

We help organizations identify the most effective organizational structure to achieve their strategic direction. Specifically we focus on ensuring the right roles are structured; contain the right people with the right skillset, and include the most appropriate measures to encourage and manage ongoing performance.

Process Effectiveness

Having the right processes supported by enabling technology ensures productivity remains high. We help organizations to design the most effective processes and select the right technology to deliver on their strategic objectives.

Performance Measures

Identifying the right milestones and measures to track success is crucial to ensuring the drivers behind the strategy are achieved. We work with organizations to identify the most appropriate measures for performance indicators and the drivers that help to achieve them.

Deployment

Most strategies fail in deployment, however not for a lack of trying. The reality is that most organizations are challenged to sustain their focus and resources on achieving their strategy. We work closely as your deployment accountability partner to ensure your business, its leaders and employees are aligned and on track to deliver your strategic objectives.

  • Engagement
    Ensuring the entire organization is engaged in the strategy is key to its rapid achievement. We work with organizations and business executives to design and introduce plans that engage employees and leadership in their attainment.
  • Planning
    Having a clear plan to ensure the strategy is delivered is key to a successful deployment. Our approach includes working backwards from the strategic objectives to identify clear actions that support achieving your intended outcomes.
  • Accountability
    No strategy is achieved if accountabilities aren’t clear and managed. Our deployment includes clear accountabilities across the organization, we work with business executives and leaders to identify key accountabilities and coach leaders to ensure their accountabilities are achieved.

The 6 Elements of Supply Chain Strategy

Supply chain management is often a tactical pursuit, managing challenges and opportunities on a transactional basis, rather than holistically and strategically. This less than strategic approach is driven by both internal and external influences that divert attention from a holistic perspective, in turn directing focus on distinct or unique issues, challenges, and concerns. Falling into this tactical melee not only increases complexity, but also reduces the value opportunity that can be derived from strategic management of the supply chain.

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Supply chain management must be perceived as a critical component of business strategy; delivering improved profitability through increased efficiencies and vendor management strategy requires the dedicated efforts of a talented team. An even greater challenge lies with those who manage within the supply chain, in having the ability to maintain focus on strategy despite the barrage of transactional issues they are immersed in.

There are six elements of supply chain strategy, which, if employed collectively and managed closely, will deliver significant value across the organization.

1. Leverage:

Despite the size and revenue of an organization, reduction and management of spending while continuously improving upon service levels is a significant benefit of managing leverage. Leverage has typically been applied based on historical usage trends and market expectations. However, the more powerful means to initiate leverage is through solid and supported predictions of future growth potential. Several of our best clients are high-growth companies who have grown both organically, as well as through acquisition. Unfortunately, in many instances, their focus has remained solely on growth, and not on leveraging the potential spending power of the organization to further improve profitability.

2. Communication:

A significant component of any business is the support provided by external resources, be they service providers or product and component suppliers. Obtaining value from these external resources to meet evolving company objectives requires a communication strategy. One such example is the development and implementation of a “supplier feedback” model to effectively ensure external parties supporting organizational operations and growth are aware of challenges, opportunities, and threats to business viability. Developing these models is an important component of managing information in a form that supports organizational strategy.

3. Efficiency:

Process and operating efficiency is a fundamental component of any high performing company, and the supply chain often impacts this efficiency either directly or indirectly. For example, improvements in production efficiency require increased volumes of supply of both components and maintenance equipment; improvements in process efficiency require increases in volume and timeliness of support from external suppliers and contractors; increased speed to market requires the support of accurate and timely freight management. Here again, building the right strategy to support organizational efficiency is key to meeting objectives and improving efficiencies.

4. Innovation:

Managing daily operations while initiating innovation are not mutually exclusive events. Building innovation in any organization requires significant input and support from external suppliers and service partners, both of whom must be willing to provide insight and support and take potential risks in pursing innovative solutions. Organizations such as Apple would not have reached their pinnacle levels of success if it were not for the engagement and support of their suppliers such as Samsung (interestingly also one of their largest competitors at the time of this writing, an obviously unplanned result of their supply chain strategy).

5. Risk Management:

Those organizations that represent and support company operations externally (i.e. suppliers) present the greatest, most unmanageable degrees of risk to an organization. External risk is often also the most disregarded risk as it is not as prevalent or visible as other internal risk factors. Supply chain management is the function most in-tune with external support groups, and is able to identify potential risks as well as mitigating solutions to protect the organization’s interest. Developing an effective and all encompassing risk management strategy requires the support and input from key Supply Chain professionals.

6. Continuous Improvement:

The greatest performing organizations engage continuously in improving their performance. Considering that most improvements have an impact on external support groups (either directly or indirectly), supply chain management is the tool to identify and manage improvement opportunities. Continued updates to Apple software for iPhones, iTunes, and other products are the direct result of supplier involvement in continuous improvement that results in the rapid resolution of immediate for foreseen challenges, in turn creating enhanced customer satisfaction and brand loyalty. Continuous improvement also provides significant opportunities to reduce cost, and supply chain management is often the most adept and knowledgeable party relative to reducing cost through internal and external efficiency.

Viewing supply chain management as a strategic tool through the application and management of these six elements can deliver significant reductions in working capital and organizational risk, and change perspective relative to the value inherent in the role. Anything less would be tactical by nature and result in less than satisfactory results.

5 Strategies for Better Supply Chain Management in the Current Economy

The past several years have been marked by increasing economic volatility, as reflected by not only the global economic recession, but also the instability of customer demand and rapid movement in raw material, fuel, and commodity prices. Supply chain executives are under pressure to develop more efficient, customer-centric supply chains and find innovative ways to reduce costs. Meanwhile, they are being asked to take advantage of business opportunities that may arise from the current economic conditions.

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As a result, company leaders are prioritizing projects that reduce inventory and logistics expense. Although this may help matters in the short term, professionals risk ignoring the long term. Organizations must prepare for the rebound while responding to the conditions of the new normal–a reduced labor pool, stagflation and deflation, and issues surrounding energy and sustainability. Effective strategies coupled with a well-defined plan and the right tools will help alleviate pressure today and ready managers for market changes in the future.

Strategy 1: Adopt demand-driven planning based on real-time demand insights and demand shaping. The right prediction and contingency planning tools will ensure a complete view and an effective response to risks such as suppliers going out of business, political upheaval, and natural calamities affecting manufacturing. Companies then can adjust pricing and promotions strategies to shape demand, move additional product quickly, drive revenue growth, or further expand margins for a high-demand product with limited market supply. The key is to have the foresight to leverage opportunities and mitigate challenging events so that your business not only survives, but succeeds.

Strategy 2: Build an adaptive supply chain with rapid planning and integrated execution. Once executives are able to better predict demand and risk, they need to adapt their supply chains to changing market opportunities and events. Companies must put in place dynamic planning and continually fine-tune operations. The old model was to wait until the end of the month or quarter to shift production and supply based on shipments and sales. The new model calls for more continuous, dynamic supply chain adjustments to rapidly respond to market changes. This can minimize or even eliminate shocks across the supply network. The results include better visibility; enhanced collaboration across the value chain, including sourcing and supply, manufacturing, transportation, warehousing, and distribution; and accelerated decision-making with better analytics and support.

Strategy 3: Optimize product designs for supply, manufacturing, and sustainability in order to accelerate profitable innovation. Innovation is crucial to being one step ahead of the competition. But innovation doesn’t exist in a vacuum. In order to be successful, products must be manufactured at the right cost. Decisions made in the early cycles of product development can make or break the product. Designs must be optimized for supply and manufacturability, and all the true costs must be accurately captured. In addition, product innovation and competitive advantage increasingly stem from the selection of suppliers and technologies. If a company can manage the information, people, processes, and decisions regarding a product throughout its life cycle, it can achieve strong dividends and market leadership.

Strategy 4: Align your supply chain with business goals by connecting sales and operations planning (S&OP) with corporate business planning. Although S&OP processes provide coordination among sales, manufacturing, and distribution, there still are disconnects and gaps among finance, strategy, and operations in many companies. One way to bridge these gaps is with integrated business planning. This process integrates financial strategic budgeting and forecasting systems with operations planning. The resulting marriage of processes ensures revenue goals and budgets developed in finance are validated against a detailed, bottoms-up operating plan. Concurrently, the strategy reconciles the operating plan against financial goals. Integrated business planning, which connects S&OP processes with corporate business planning, enables companies to achieve the right balance of supply and demand, aligned with strategic business goals. It provides real-time visibility to all the key dimensions for success–demand, supply, product, risk, and performance–across the organization and throughout the extended supply chain.

Strategy 5: Embed sustainability into supply chain operations. The triple bottom line of people, profit, and planet has never been more important than it is today. Studies show that companies striving for social and environmental sustainability achieve major competitive advantages, especially with regard to production efficiency, supplier management skills, and attractiveness to employees. Substantial opportunities exist for sustainability in supply chain operations:

  • Company leaders first need to include sustainability as a core component of their supply chain strategy. This means incorporating it as a key requirement across all supply chain processes.
  • Second, professionals initially should focus on the basics to achieve quick wins through real-time visibility to energy and resource consumption and resource or material movement. This enables reduction of carbon inefficiencies, minimized energy consumption, less waste with “recycle-reuse-refurbish” materials, and optimized travel and transportation.
  • Businesses can keep the momentum by ensuring continuous improvement through systemic measurement, audit, and knowledge management. Compliance audits, best practices, and benchmarks provide a governing framework for sustainable supply chain operations and ensure clarity around the environmental impact of specific actions.

The right processes, practices, and tools can help
The demands on supply chain managers to rapidly respond to change and increase profitability are greater than ever. The good news is that effective strategies and solutions exist that support each one of the previous five strategies, and they can deliver immediate return on investment. The way in which companies implement these strategies can mean the difference between success and failure.

By Maha Muzumdar

Maha Muzumdar is vice president, supply chain marketing at Oracle, where he helps formulate, define, and drive the market strategy for Oracle’s supply chain applications.

How to Use Coupons to Promote Your Business

coupon marketing

Coupons have proven themselves to be highly effective sales tools for every conceivable size and type of business.

Because coupons “pull in the business” they have gained remarkable acceptance and popularity among astute marketing managers. A simple explanation for their acceptance by advertisers is their overwhelming acceptance and use by the consuming public. In fact, Advertising Age (the Bible of the advertising industry) reports that 87% of all shoppers use coupons.

Another independent marketing research firm, the A.C. Nielson Co., reveals that 95% of all shoppers like coupons. And 60% actively look for coupons.

A recent article in the Wall Street Journal entitled, “In a Pinch, Snip.”, states that coupon use rises, as the economy in any given area slides. 54% of shoppers surveyed said they had already stepped up use of coupons, and even more are expected to do so.

It’s very easy to see why coupon advertising is sweeping the country. Regular use of good couponing strategy will provide a steady stream of new customers and high quality sales leads.

Savvy marketers cite these reasons for heavy reliance on couponing:

A. Coupons have the effect of expanding or increasing your market area. We know that consumers will travel far to redeem a valuable coupon.

B. Coupons will entice new customers that have been shopping at your competitor. It’s a proven fact that consumers will break routine shopping patterns to take advantage of a good coupon offer.

C. Coupons attract new residents when they are actively in the market for products and services.

D. Coupons will re-activate old customers. Those customers that have been lured away by your competitor will start buying from you again when you give them a good reason to do so.

E. Coupon advertising provides the opportunity for additional profits through sale of related items. (Business owners often forget this.) When you offer a special “deal” on a coupon to invite a customer to do business with you, you have to remember that this same customer will probably end up buying additional items that carry a full profit margin.

In addition, you also are being given the opportunity to “sell-up” to a more profitable product or service. You would not have had this opportunity had it not been for the coupon getting the customer through the door in the first place.

F. Coupons build store traffic which results in additional impulse purchases.

G. Coupons are measurable and accountable. Don’t overlook that couponing is the most measurable and accountable form of promotion. It’s simply a matter of counting the number of coupons redeemed to judge the effectiveness of the offer. Wise use of this consumer feedback will guide you in creating future offers that improve your results.

Understand that the media delivering the coupon has very little to do with the response. Publications simply deliver your offer to a specific audience. It’s up to you to determine what offer produces the best response from that audience. You do this through methodically testing various offers. Savvy use of this “coupon testing” technique will give you the specific knowledge you require to greatly improve all of your advertising response, your sales, and your profits.

How do you go about creating a coupon promotion that will work for YOU? Here’s what I like to call…

Thom’s Twelve Tips For Effective Couponing:

  1. Make A Solid Offer!
  • Offer Discounts…“$50.00 Off!”, “60% Off!”, (percentage discounts are only good when they are high percentages and the value of the product or service is well known.) Dollars Off discounts work best.
  • Offer Bonuses…“Buy One/Get One Free!”, or “2 Free with Each Case Ordered!”, “Free Batteries When You Buy One Super Flashlight”, or “Free Drop Cloth with Each Gallon of Super Paint”, etc.
  • Offer Premiums…Offer premiums for a presentation, for a trial order, for a subscription, for a demonstration, for a new customer referral, for an order amounting to $xxx or larger”, etc.
  • Offer Free Information…“FREE booklet”, “FREE brochure”, “FREE estimate”, “FREE details”, “FREE samples”, “FREE trial”, “FREE consultation”, “FREE quote”, etc.

2. Use Bold, Commanding And Specific Headlines!

  • “Save $50.00 on Any Portable TV….This Month Only!”
  • “FREE BROCHURE…’Beauty Secrets for Career Woman’!”
  • “Free Catalog Saves YOU 70% on Office Supplies!”
  • “Rent Two NEW RELEASE Video Movies–Get One FREE!”
  • “Buy One Dinner Entree–Get One FREE!”
  • “Buy Five Cases of Copier Paper–Get the Sixth Case Absolutely Free!”

3. Use Line Illustrations Or Photographs.

  • Illustrations work best when you show products in-use.
  • Illustrations enhance credibility, aid understanding, and create desire.

4. Use Your Logo In Your Coupon.

  • Use of logo: builds company identity and awareness in the marketplace, enhances your image, lends credibility to your offer, and improves response.

5. Make Effective Use Of White Space.

  • Don’t clutter. Don’t cram.

6. Sell The Benefits.

  • Save time, save money, increase profits, protect your family, improve your standard of living, be happier, improve your health, increase your income, increase your comfort, more convenient.

7. Appeal To The Self-Interest Of Your Customer.

  • Your customer is only interested in what you can do for him or her. Your customer will only buy the benefits-of-use of your product or service. Let me say that again…your customer is only interested in the benefits of use of your product….not the product itself.

8. Make Effective Use Of The 17 Most Powerful Words In Advertising.

  • free, now, new, how to, save, guarantee, money, easy, simple, you, proven, love, results, discovery, fast, amazing, profit.

9. Always Up-Sell.

  • Offer extras when a customer requests information or places an order. Always suggest related items. Point out the added features and benefits of a higher priced item and then show the customer specifically how these features will make his life easier, safer, etc.

10. Spread Your Specials Around–Consider The Traffic Pattern In A Retail Store.

  • Set up product displays so that you force your customer to walk the entire expanse of your store. Your “impulse” buys will increase dramatically when you expose your customer to more products by well planned placement of “sale items”.

11. Capture Your Customers Name, Address, And Telephone Number. Develop An In-House Mailing List For On-Going Direct Marketing Use.

  • Your customer list represents your most valuable asset. Your greatest potential for sales and profits lies in the customer database. To ignore this potential is pure folly.

12. Don’t Stop After The Sale.

  • Create a planned program of continuous follow-up to your customer list.
  • Use ride-alongs, invoice stuffers, new catalogs, new product brochures, special sale flyers, preferred customer sales and discounts, customer appreciation events, more coupons. Keep your customers coming back to YOU!

ã Copyright 2005 Thom Reece All Rights Reserved

Stationery & Office-Supply Business Success Factors

Success of a stationery and office-supply business is contingent upon several variables. One often-overlooked success factor is customer service. Always be friendly to your customers and go out of your way to help them. Additionally, you should know the competition. Always strive to offer products that competitors do. However, include additional product lines or services. For example, include computer or fax services in your stationery and office-supply business if competitors do not.

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Significance

One of the most important success factors for any business is location, according to Entrepreneur.com. A stationery and office-supply business is no exception. You must locate your store in a high-traffic area such as a strip mall, busy intersection or uptown at a major university. Moreover, make sure you are located near customers you want to target. For example, people with middle or upper-middle incomes have more to spend on stationery and office supplies. Rent a location downtown if you have a lot of potential business customers in the area. Business customers will often purchase in high volumes. Business customers also require massive amounts of copies. For example, a downtown advertising firm may need to make 50,000 copies of a brochure.

Features

Another business success factor is store appearance and ambiance. Keep your stationery and office-supply store neat and orderly. Keep the aisles clear of clutter. Use bright lighting so people can see what they are purchasing. Hang large signs throughout your store so people know where to go for certain items. Shoppers are busy. They do not want to spend extra time looking for items they need. Display new or sale items on end caps or at the front of the store. Encourage people to test out floor-model computers and other merchandise.

Suppliers

Suppliers are important to the success of stationery and office-supply businesses. You must be able to purchase your items at the lowest wholesale cost available. Larger retailers pay extremely low prices for products when they purchase them in volume. You may need to occasionally shop around for wholesalers that can provide you with a lower per-unit cost on products and stationery.

Promotion

Promotion is another important success factor for stationery and office-supply businesses. You will need to target your customers with fliers, newspaper classified and coupon magazine ads, and Internet marketing. Create a website for your stationery and office-supply business. Have employees hand out business cards inviting customers to visit the website for coupons. You can also hold drawings for those who visit the website. Give away gift cards and free office supplies. Have liquidation sales occasionally to get rid of old merchandise. Put the merchandise in dump bins near the front of the store.

Considerations

Like other businesses or retailers, stationery and office-supply stores may need to create special programs to increase customer loyalty. People will tend to shop more often at your store if you give them an incentive. Consider a loyalty program for your stationery and office-supply store. Start with a points system. For example, people can earn 100 points if they spend $25. Track people’s purchases by assigning everyone a card and identification number. Gradually offer coupons of greater value or free items the more people spend.

Top Complementary Business Models For Handmade Entrepreneurs

As you lead your business forward, you will eventually have to do one of three things to grow your handmade business: (1) train others (either employees or contractors) to help you make the products you sell; (2) offer “how to” information products along with handmade products; or (3) add complementary business models within your existing retail business model to boost sales.

A baker kneading dough for breadThis post shares other types of business models (excluding wholesale, another great business model) you can choose from.

1. Customized products

If your customers like your core line of products, you can offer them in customized versions at a premium price. You already have most, if not all, of the ingredients and supplies to do this. Set up a basic ordering structure, a time frame, minimum payment requirements, etc. Use your newsletter and blog to let customers know you can customize products for them and share the pricing differences and the extra special attention they get when you create products in scents designed just for them.

GCD Spa does a good job of this, offering a core line of products and making custom options available and easy to choose from.

A variation on this theme is to offer a very high end product that costs you a bit more to make, but which allows you to increase your profit margin exponentially because you can charge much more for the product. For example, Cirque offers a $40 bottle of nail polish made with 24 karat gold left flake. Sure, it costs a bit more to produce, but the increase in perceived customer value allows you to maximize your profit margin by charging more for the product.

2. Memberships

Launch a “product of the month” club, or a “limited edition club,” where you offer a bulk discount for retail customers who buy quantities in advance and pay a little more for guaranteed delivery of your handmade goodies throughout the year, without them having to place an order. Sometimes called “subscription services,” another spin on this idea is to create a loyalty or membership program where you offer year-long discounts to people who become “members of your brand.”

Your most loyal followers pay an annual membership fee to enjoy a discount on orders all year, along with special perks as you make them available — to members only.

Some examples are Carol’s Daughter’s “Friends of the Family” membership program, and the Level Naturals monthly “Good Box.”

3. Community

Use the Internet to create your own social network or forum where people who love your products gather to talk about their shared likes, dislikes, hopes, dreams, and concerns. You can use everything from public or private Facebook groups or pages to services like vbulletin and Ning to do this. The possibilities are endless. Carol’s Daughter’s “Transitioning Movement” site is a good example of this type of community. You can sell ads at these sites and use them to increase brand awareness and create opportunities to create collaborative new products with members of the community and industry colleagues. (Note: Martha recently migrated the community to a Facebook page … though there’s not much going on there at the moment …) While I see this as a super idea for any handmade product, I see special opportunities for businesses selling mineral makeup and ethnic hair care products.

4. Share “How We Make”

Unlike the examples above, this model does not have to be a direct sale. It can be more of a marketing model than a completely new business model. It involves publishing a complimentary monthly e-book or e-report about the ingredients used in your products, and how you incorporate them into the products your customers love. Each month, create a new short booklet and make it available to your customers and prospects in PDF format. Use this to grow your list.

Joan Morais does this very well, offering lots of different types of short “how to” e-books at reasonable prices, and rotating the ones that are available for free each month. This strategy allows you to bring more people into your sphere of influence, while also building your credibility as an expert in your field (which always creates new business opportunities for you). People like buying products (especially handmade ones) from people they know they can trust. Demonstrate that you’ve done your research and people will be more inclined to come to you for their product needs and wants.

5. Sell supplies

The examples above help you sell existing products to retail customers. The “sell supplies” model discussed here is a step removed from that. Unlike the above examples, you will need to expand your list from retail consumers to friends and colleagues in your industry. This is not a huge stretch since you are probably connected to tons of them on Facebook.

The idea here is not to become a big time supplier, but to systematize the sale of a few of the higher end and more exotic ingredients you must buy in bulk in order to maintain a profit margin, and sell those ingredients to your colleagues at prices that beat the huge suppliers you buy from. I’m not suggesting you go into business competing with your supplier (though many a successful small business has started this way …), but really just that you create a temporary measure to boost your profit margin until the sales of your products using particular ingredients reach a point where they can support themselves. Choose 5 or 6 of your top high priced ingredients — ones that are easy to ship and which weigh little but cost a lot. The best examples include things like high priced fruit extracts and mica used in mineral makeup and nail polish.

6. Affiliate programs

You know these when you see them — Amazon is the biggest and most well known example. Invite people to sell your products as affiliates, earning a commission on each product they sell. This is admittedly not my favorite business model, but several people I know make a decent amount of money as affiliates selling other people’s products, and they don’t have to change how they do business or make products to add this. You’ll need a reliable affiliate tracking platform to track your affiliates’s sales, and the amount you owe them for those sales. I have heard good things about iDevAffiliate.

7. Events

This is hot and getting hotter by the minute, as the interest in all things local continues to grow. You can host events, either on your own or with other Indies, where your products are featured. For example, this past holiday season, IBN member Dawn Fitch of Pooka Pure and Simple hosted a Holiday Ladies Night Out with a few other IBN members in her area. They charged $25 for people to come into the Pooka Boutique and shop. (Yes, people paid to enter the store to spend more money …) Tickets had to be purchased in advance and included fun socializing and music, handsome young men to greet guests at the door and take their coats, and a coupon for a complimentary holiday beverage. Check out the flyer for the event.

Another example is a supplier member who opened up her warehouse parking lot a few times a quarter so people could bring their own containers and load up on suppliers at bulk prices. Ingredients were weighed “salad bar style,” and people in the local community met each other and had a great time.

Of course, you could offer classes to teach people how to make the products you sell. (Indie Business Network offers teacher’s insurance for this!) One of our members who does this well is Candance Sweeney and her Nakee Naturals Green Goddess Spa Parties and Workshops.

As you can probably tell, these suggestions are not just for handmade business owners. Anyone who has a business in any industry, and who has a desire to grow and add additional income in a natural way, will be excited by at least one of these ideas.

You Have To Be Ready, and Plan, Plan, PLAN

Of course, not every business is at a time in its evolution where adding new business models make sense. You have to grow into this. Don’t do it too early or you’ll be terribly sidetracked and end up losing not only money, but probably some sanity too.

I want you to get into the habit of zooming out and planning for five years down the road instead of just five months down the road. Putting these ideas into your “knapsack of possibilities” now will help train you to recognize an opportunity to capitalize on them in the future.

Remember, skate to where the puck is going, not to where it is.

Business & Commercial Law

Ethikate is experienced in Business & Commercial Law as well as in advising boards, management teams and business owners on how to correctly get their business set up, how to limit liability through carefully constructed contracts and to ensure it is compliant with all relevant laws and regulations.

Ethikate provides quality legal documentation that is tailored for your business transactions. None of this generic online template stuff! Legal documents are not something you can get ‘half right’. We work closely with you to ensure that your documentation is relevant and covers your specific operational requirements, giving you peace of mind that your business is protected.

Just some of the business and commercial law solutions we offer our clients include:

  • business structure and corporate advisory services
    • partnership, shareholder, joint venture and trust advisory services and documentation
    • corporations law, business names compliance and other compliance matters
  • buying and selling businesses
  • franchising
  • commercial and retail leasing and licensing
  • M&A due diligence services
  • Sale of goods, distribution and supply agreements
  • consumer protection laws
  • governance and compliance

Entertainment & Music Business Law Certificate

Students who wish to engage in this unique area of legal practice can benefit from the array of courses this program offers. Entertainment Law explores legal and business issues relevant to film, multimedia, publishing, radio, sport, television, theatre, and visual arts. Music business, which comprises a large part of the certificate program, is a course of study pioneered at Belmont University and is a significant industry in Nashville. The requirements for completion of the certificate program are set forth below.

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Requirement One: Students must earn a cumulative grade point average of at least 3.00 in the following required courses:

  • Contracts and Sales
  • Business Associations
  • Intellectual Property

Requirement Two: Students must successfully complete all of the following courses:

  • Entertainment Law
  • Entertainment Law Practicum
  • International Business Transactions
  • Copyright Law or Trademark Law

Requirement Three: Students must successfully complete at least six credit-hours of Entertainment and Music Business Law electives. Courses qualifying as Entertainment and Music Business Law electives will be announced prior to registration each semester.

Requirement Four: Students must successfully complete the Upper-Level Rigorous Writing Requirement in connection with one of the courses listed in Requirement Two or Requirement Three.

The Rise of Distributed Manufacturing

If you change the way you look at things, the things you look at change.To continue growth, in the manufacturing industry and in business in general, traditional models need to be examined and innovation must happen as you look at a different way of doing things. The conversation was VERY timely as I was researching a new approach to manufacturing, distributed manufacturing.

But how does it work in industry? How could ‘crowd’ apply and work for Henry Ford or William Procter and James Gamble?

Traditionally a manufacturer will employ, or own, dedicated factories to create a convenient supply chain for their clients. The capabilities of a company are limited to their talent pool, largely determined by budget. Thus, up until now, hardware has been reserved for those of great budgets and power.

Over this decade, Industry will become a connected force of factories, manufacturers, distributors and end consumers. This network combines to achieve ultimate levels of efficiency.

Distributed manufacturing leverages large numbers of ‘partner’ factories and minds to create agile supply chains. It can be explained in two scenarios:

Traditional Manufacturing Model

‘Yesterday Manufacturing Ltd’ embarks on a project to produce wheels. They start by finding and employing Detroit’s top experts on wheels, to work on the project from the Detroit HQ. The designs are developed, to the capabilities of the hired team, and then signed off. Yesterday Manufacturing Ltd spends time finding a factory in the far east. They spend time building a relationship, to guarantee trust and reliability. They employ cheap labourers to produce the wheels, as instructed by their hired engineers in Detroit. The wheels are churned out and shipped on containers to America, rather slowly, where they are distributed and sold. A few thousand containers later the project begins to be profitable.

distributed manufacturing-enterprise

Distributed Manufacturing Model

‘Tomorrow Manufacturing Ltd’ embarks on a project to produce wheels. They start by employing a project manager in the Detroit HQ. They consult a worldwide network of engineers, supplied by a contract firm, to find those most experienced and knowledgeable in wheels. The best people for the job develop the designs remotely, for a consultancy fee. Tomorrow Manufacturing Ltd finds a manufacturer that often makes great wheels, with some free capacity. They are local to the distributor in America so higher labor costs are offset by the time saved in shipping. The wheels are lovingly crafted by wheel fanatics (they exist!) and shipped short distances to distributors or end users. After just a few hundred less than truckload and truckload shipments (or even less) this project is profitable with a higher quality product output.

The distributed manufacturing model dismisses location to find the best talent. The network allows for a specialist factory to fill excess capacity, whilst keeping manufacturing local to the products final destination, reducing emissions and logistics cost all while also keeping quality of product for the end consumer. It’s a very agile model that allows for quick and scalable movement in modern business.

7 advantages of Distributed Manufacturing and why this will become the norm over the decade to come

distributed manufacturing networkRefining this model, there are 4 key factors: Cost, speed, quality and impact. How much money can I save? How fast can I get to market? Who (not where) is the absolute best person to complete this task? How large of an impact will my actions have economically, environmentally and socially?

1. By manufacturing items closer to their end destination, we reduce logistics cost and environmental impact. This also reduces the time from production to sale.

2. By leveraging the expertise of a larger remote network, you remove limitations like location and the cost of full time employees. There is nobody, in the world, better experienced to work on your project.

3. Without permanent investment in facilities, the manufacturing supply chain is made more agile. In modern business, this is necessary. A company must be able to expand and contract their infrastructure at lightning speeds to stay competitive and survive economic waves.

4. In this model, it is possible to distribute workloads across multiple suppliers. Reducing risk. A failure on your only production line is a disaster. Less so if there is a failure on production line 1 of 10.

5. Manufacturers are also able to support multiple smaller economies by distributing their factories. If aiming to sell in a location, it makes both financial and moral sense to support the local economy.

6. Outsourcing to multiple smaller facilities allows you to make use of existing experts. Many larger production lines will develop in house techniques, but this takes significant time and investment.

7. By opening up your supply chain to a network, you can make use of excess capacity. Most factories around the United States  operate at far less than capacity. They opportunity to fill spare space is worth a lot, hence strong discounts.

Over the next few years we will see companies take a step back from scale.

In a newly connected world, small teams will be, and already are, capable of managing large scale production.

How to Create a Distribution Strategy

How many times have you heard marketers talk about creating a distribution strategy?

…You can probably count the numbers of times on one hand.

The truth is, marketing “gurus” love to tell you how to promote your products. They get stuck on things like pay per click advertising and building a social media presence.

Now, I enjoy talking about the marketing and sales process just as much as the next guy, however, there’s certainly much more to marketing than simply promoting your product.

Great marketers know that, if you want to succeed, you need to have a sound marketing mix strategy that fits well within your overall business growth plan.

Of course, laying out your company’s distribution strategy won’t be the sexiest thing you’ve ever done as a business person.

But then again, who care’s about being sexy, right? …we just want to get paid.

Let’s dig in.

What is a distribution strategy?

Before we dig into the details, let’s first answer the obvious question, what exactly is a distribution strategy?

In simple terms, your distribution strategy lays out the details of how you plan to get your product in the hands of your customers.

Consider the traditional distribution model below.

distribution model

In the distribution model above, let’s say that you’re the manufacturer. Your distribution strategy would identify which paths you intend to take in order to get your products to the end user.

You may decide to sell to wholesalers, retailers, or both.

Either way, you’ll need a strategy that identifies and outlines how you plan to move your product so you can generate the best return on your investment.

Step 1:  Evaluate the end-user

Before you can sell to someone, you need to have a good understanding of what it is they want and how they want to go about buying it.

This comes down to conducting a little market research.

I won’t get into that much here, but start by asking yourself questions such as these:

  1. Does the end user need personalized service? If so, who is the best person to provide that service to them?
  2. Is the end user more likely to purchase this product online or at a physical store?
  3. How much will you need to educate the end user on your product? Who is in the best position to help you educate the end user?

Once you’ve evaluated the end user, start working your way backwards in the distribution model.

Keep in mind that, if you plan to have distribution partners, you’ll need to evaluate their needs as well.

Step 2: Identify potential marketing intermediaries

Once you have a clear understanding of your end user, it’s time to start crunching the numbers and laying out a game plan.

To help us speed things up, I created a spreadsheet. Feel free to make a copy and use it yourself.

marketing intermediaries

The first thing we’ll need to do is to identify potential marketing intermediaries.

Generally speaking, there are only two ways for you to sell product to the end user:

  1. Directly – you can sell directly to the end user through a sales force.
  2. Indirectly – or you can sell indirectly to the end user through marketing intermediaries.

Marketing intermediaries, in short, help you sell your product to the end user.

You can typically group potential marketing intermediaries into a couple different categories:

  1. Agents and Brokers – Agents and brokers are marketing intermediaries that act, essentially, like an outsourced sales force. The main difference here is that agents and brokers don’t typically buy the product from you. Instead, they sell it for you and make a fee or commission.
  2. Wholesalers and Distributors – Wholesalers and distributors are marketing intermediaries who purchase product in bulk from the manufacturer and store it until they can sell it to retailers or contractors at a profit.
  3. Retailers – Retailers typically purchase products from wholesalers/distributors and resell it to contractors and end users.
  4. Value Added Resellers – And lastly, value added resellers such as contractors typically purchase products, bundle them within their service, and sell it to the end user.

Take a few minutes to brainstorm potential marketing intermediaries and enter them into the spreadsheet along with the additional information needed.

revenue projections

Under the “revenue projections” tab, you should see that the revenue projections were automatically calculated for you. This information will be important for measuring your progress.

Step 3: Research potential marketing intermediares

Once you’ve identified several marketing intermediaries that you think you could possibly partner with, start doing your research to see what you can find.

If you can, reach out to these potential distribution partners and offer to buy them a cup of coffee.

Get to know them and consider what type of business relationship the partnership could turn into.

The point here is to make sure that you really get to know them…more than just what’s written on paper.

research intermediares

Use the “research intermediares” tab to keep track of these potential partners.

Here are a few questions that you may want to consider asking:

  1. What are some ways that you think we may be able to partner?
  2. What are some of your weaknesses that we could potentially address?
  3. What are some of your strengths that we may be able to take advantage of?
  4. Who would you sell to and at what markup?

Step 4: Narrow in on the profitable distribution channels

Now that we have a good idea of who would make for a good distribution partner, we now need to find which types of distribution channels are available and then narrow in on the most profitable distribution channels.

Remember, as with anything, your distribution program is going to cost you money so the idea is to find distribution channels that generate the best return on your investment.

Distribution channels are, essentially, paths that you push your products through. In most cases, it’s common to have multiple channels of distribution that you manage. Different channels of distribution may have different sets of marketing intermediaries who help you move your product.

Distribution can typically be grouped into three primary categories:

  1. Intensive distribution – intensive distribution means there are a lot of intermediaries. An example of intensive distribution may be snack foods; one product may be stocked in many stores and may have many different channels of distribution.
  2. Selective distribution – selective distribution  means there are a few intermediaries. An example of selective distribution might be a particular type of fruit that is only sold within a certain geographical area.
  3. Exclusive distribution – exclusive distribution means only a few intermediaries and those intermediaries have to carry only their products. An example of exclusive distribution might be high end fashion products that are only sold in very specific stores.

The types of distribution channels you will be able to utilize will differ slightly depending on where you are in the distribution model and who you are trying to sell to.

For example, if your end user is the typical consumer, the types of distribution channels available may look something like this..

consumer distribution channels

If you sell to business users, the types of distribution channels may be slightly different…

business distribution channels

And lastly, if you provide a service, the types of distribution channels would probably resemble something like this…

service distribution channels

By now you should, at least, have an idea of which distribution channels are likely to have the most potential.

To back up those assumptions with proof,  go into the “channel pricing” tab and enter in the markups of your distribution partners.

distribution partners

Next, enter in how much it cost you to make the product and your desired profit margin.

cost of goods sold

Once you have those details figured out, it’s time to negotiate the numbers with your distribution partners.

Keep in mind that your distribution partners are, essentially, you’re customers. Of course, in this case, your customer’s goal is to make money. That means that you need to work with them to come up with a mutually beneficial agreement so you can both make money.

Step 5: Manage your channels of distribution

As with any investment, you’re going to need to manage your channels of distribution to make sure that you are maximizing your return on investment.

Make sure that you track the progress of each distribution channel against the goals that you laid out in the previous steps.

If a distribution channel starts to under perform, meet with your distribution partners and figure out where the leak is in your distribution model.

More importantly, determine how you can get things back on track and optimize each channel of distribution.

You need to predictably be able to make progress.

Conclusion

As I  mentioned earlier, laying out your company’s distribution strategy won’t be the sexiest thing you’ve ever done as a business person.

The truth is, however, sometimes putting funds into improving your distribution strategy is a better investment than simply throwing more money at promotion.

That means that we’ll need to take a minute to crunch the numbers.

Hopefully this post has helped with that.

The Push and Pull product distribution model

What is the Push and Pull model?

Push and pull strategies are promotional routes to market. Either by the product being pushed towards customers or your customers pulling the product through the retail chain towards them.

It was traditionally used in supply management by manufacturers, then adopted for marketers to help with their promotional strategies – here are the tactics associated with each:

pushpullstrategy

How to use the Push and Pull model

There are many advantages and disadvantages of both models, as it depends on your business. For instance, manufacturers  tend to use a push strategy for finding distributors to promote their products.

For example, Mars who manufacture chocolate bars, sell via distributors. It would impossible to manage requests to buy single bars of chocolate! They have a large product portfolio and sell ranges into their distributors.

For a service business, they often use pull strategies, for example, Intel, the computer chip company created ‘Intel Inside’ their brand ingredient programme by persuading manufacturers that their computers would have higher perceived value if they featured Intel in their own marketing, resulting in customers wanting to know if the PC they were buying included an Intel chip.

A good tip is to look at your competitors: What are they doing? Push or pull? Look at overseas competitors too as they may have introduced other ideas.

Pros and Cons of the Push and Pull Strategy

As would be expected, there are advantages and disadvantages to both push and pull strategies:

Push Strategy

Advantages of the Push Strategy

  • Useful for manufacturers seeking distributor for product promotion.
  • Useful for those manufacturing or those selling low value items as a distribution who is likely to place bulk items.
  • Creates product exposure in potentially large retail environments.
  • Good way to test new products in the market.

Disadvantages of the Push Strategy

  • The distributor may source alternative products (cheaper, faster delivery) once your product has established the market need.
  • Distributors may not organise a formal contract, so no guarantee of regular orders.
  • Distributors may demand financial contribution towards promotion.
  • Distributors may demand lower prices to fit in with their promotional campaign.
  • Distributors can establish dependence and then request price reductions
  • Distributors can demand lengthy credit terms.

Pull Strategy

Advantages  of the Pull Strategy

  • Direct contact with customers.
  • Instant payment as customers do not have credit facilities and pay online or in store at the checkout.
  • Greater margins as no discount needed.
  • Customers can generate ideas for new product development.
  • Ideal for premium priced products.

Disadvantages of the Pull Strategy

  • Greater administration required in-house to fulfil customers’ orders.
  • Many smaller and one-off orders.

An example of the Push and Pull  model

How does your business operate right now? If you only sell via retailers, you have a push strategy. If you sell to merchants like supermarkets or major retailers, the challenge is often when your product establishes sufficient demand; the merchant may wish to replace your product with its own alternative. If you only sell direct to customers, that’s a pull strategy.

As markets, the environment and customers change, it’s wise to consider both strategies. Thornton’s Chocolates operate both strategies in different ways.They have an own label option and sell to specific retailers and package their goods using the retailers’ own brand packaging and they sell direct to customers via high street stores, online and in other retailers.

An example of Push and Pull Strategy can be seen with a South African winery. Stormhoek wines went from selling 50,000 cases of wine a year in 2004 to 200,000 cases in 2006.

As a small business on a budget, they had a challenge competing for supermarket shelf space and needed customers talking about them, so the supermarkets would want to talk to them. They were looking at changing their traditional business model from a push to a pull strategy. Via a blog (gapingvoid) a bottle of wine was offered to 100 bloggers in the UK and Ireland. The bottle carried the message ’Maybe you will write about it. Maybe not. You never know.’ It was a successful campaign and many bloggers started writing about the wine, resulting in the orders from supermarkets.

From Manufacturing to Distribution: The Evolution of ERP in Our New Global Economy

Over the past fifty years, manufacturing has changed from individual companies producing and distributing their own products, to a global network of suppliers, manufacturers, and distributors. Efficiency, price, and quality are being scrutinized in the production of each product. Because of this global network, manufacturers are competing on a worldwide scale, and they have moved their production to countries where the costs of labor and capital are low in order to gain the advantages they need to compete.

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Today, the complex manufacturing environment faces many challenges. Many products are manufactured in environments where supplies come from different parts of the world. The components to be used in supply chain manufacturing are transported across the globe to different manufacturers, distributors, and third party logistics (3PL) providers. The challenges for many manufacturers have become how to track supply chain costs and how to deal with manufacturing costs throughout the production of goods. Software vendors, however, are now addressing these manufacturing challenges by developing new applications.

The Economic Shift

Global competition has played a key role in industrialized countries shifting from being production-oriented economies to service-based economies. Manufacturers in North America, Western Europe, and other industrialized nations have adapted to the shift by redesigning their manufacturing production into a distribution and logistics industry, and the skills of the labor force have changed to reflect this transition. Developing countries have similarly changed their manufacturing production environments to reflect current demands; they are accommodating the production of goods in industries where manufacturers have chosen to move their production offshore—the textile industry being a prime example of this move.

A report from the US Census Bureau titled Statistics for Industry Groups and Industries: 2005 and another from Statistics Canada titled Wholesale Trade: The Year 2006 in Review indicate that wholesalers are changing their business models to become distributors as opposed to manufacturers. Between 2002 and 2005, overall labor and capital in the manufacturing sectors decreased substantially. US industry data (from about 10 years ago) indicates that the North American manufacturing industry was engaged in 80 percent manufacturing processes and only 20 percent distribution activities. Today, however, these percentages have changed dramatically; the current trend is in the opposite direction. Manufacturing processes account for around 30 percent of the industry processes, and wholesale and distribution activities, approximately 70 percent.

In addition, a report from the National Association of Manufacturers indicates that the US economy imports $1.3 trillion (USD) worth of manufactured goods, but exports only $806 billion (USD) worth of goods manufactured in the US. This negative trade balance is a clear indication of the changing economic trend toward the manufacturing of goods in low-cost labor nations.

Figure 1. Evidence of a declining manufacturing industry in the G7 countries (from Forfas’s The Changing Nature of Manufacturing and Services: Irish Trends and International Context, July 2006)

In figure 1, the horizontal axis represents the year time line, and the vertical axis represents the percentage change in the number of people working in each indicated industry.

The main reason for this huge manufacturing shift is the increasing operating costs of production in industrialized countries. These rising costs are forcing manufacturers to move their production to developing nations because of the low cost of labor in these countries. This includes Asian countries (such as China and Indonesia) as well as Eastern European countries (such as the Czech Republic and Slovakia).

Figure 1 illustrates the number of workers (in percentages) in specified industries in G7 countries, and uses 1980 as the base year with 100 percent full employment in each industry. The industries with relatively constant rates of employment are the food and drink and the tobacco industries. Since 1995, all other industries have been maintaining less and less manufacturing employees, as indicated by the declining slopes in the graph. The shift in the textiles and leather, metals, and other manufacturing industries is moving toward production of goods in low-wage, developing countries.

Results of the Shifting Manufacturing Industry

Manufacturing is a global industry, and although a manufacturing company may be based in an industrialized country, it may have the bulk of its manufacturing facilities in a developing country. Producing goods in such a country reduces wage and capital costs for the manufacturer; however, some manufacturing control is lost in offshore production. Shipping, distribution, and rental costs, for example, are often difficult to track and manage, and quality control can be compromised in a production environment that is not local.

Two main outcomes can be seen within the manufacturing industry because of this manufacturing shift: manufacturers have a sense of having relinquished control of their production to low-cost labor nations, and supply chain management (SCM) has now become the answer to manufacturing within industrialized nations.

Suppliers that provide components to manufacturers often have issues with quality. Being part of a large network of suppliers, each supplier tries to offer the lowest prices for its products when bidding to manufacturers. Although a supplier may win the bid, its products may not be up to standard, and this can lead to the production of faulty goods. Therefore, when using offshore suppliers, quality issues, product auditing, and supplier auditing become extremely important.

Because the manufacturing model is changing, manufacturing has become more of a service-based industry than a pure manufacturing industry. Even though the physical process of manufacturing hasn’t changed, the actual locations of where the goods are being produced have. This fact is now compelling industrialized countries to engage in more assembly driven activities—a service-based model. The manufacturing process has transformed into obtaining parts and reassembling them into the final product. The final product is then redistributed throughout the appropriate channel or to the consumer. SCM methods are now reacting to this change as well; they are taking into account final assembly needs, and they are distributing particular products to consumers or manufacturers.

SCM is becoming the norm for manufacturers in the industrialized world. Offshoring is now standard practice, and methods such as SCM have been set up to deal with these economic and logistical business realities.

The economic shift happening in both industrialized and developing countries is dramatic. As the level of management knowledge increases, better methods of constructing offshore products are available in SCM solutions. In both types of economies, the changes in the labor force skill sets and manufacturing environments have consequently led to new software solutions being developed in order to manage this dramatic change.

ERP – Distribution: The Answer to the Manufacturing Shift

Within the software industry, many SCM and enterprise resource planning (ERP) vendors are following the economic shift. They are developing new functionality—ERP – distribution software—to meet the recent demands and needs of the changing manufacturing and distribution industries.

SCM and ERP software are converging to better address these new demands in the manufacturing industry. In the enterprise software market, ERP software vendors have reached a point of saturation; their installs are slowing down and they are seeing a reduction in sales. Therefore, ERP providers are developing new functionality in order to remain competitive with other ERP vendors, in addition to looking for new opportunities. ERP vendors are trying to adapt to the changing market in order to increase their revenues. They are integrating SCM functionality into their ERP offerings, creating ERP – distribution software that can span the entire production process across many continents (if necessary), and that is able to track final goods, components, and materials.

Traditional ERP solutions included some SCM functionality, which was needed to distribute the companies’ produced goods. These systems also allowed components and parts to be imported in order to assemble these goods. But offshore manufacturing and expansion into new markets has required SCM functionality in ERP software to be extended. Some larger vendors have acquired other companies in order to meet these changing demands. For example, Oracle acquired G-Log, a transportation management systems (TMS) vendor, and Agile, a product lifecycle management (PLM) vendor; and Activant acquired Intuit Eclipse.

SCM software vendors, in contrast, have felt encroached upon by ERP vendors. The situation has posed a real threat to SCM providers in the market, forcing them to extend their ERP functionality to compete with ERP vendors and to try to gain new clients in the distribution and logistics industry.

ERP – distribution software has integrated SCM functionality into its existing functionality to navigate through the complex global manufacturing environment. SCM software maps five processes into one solution: planning, sourcing (obtaining materials), producing, delivering, and returning final products if defective. These processes help to track and manage the goods throughout their entire life cycles. In addition, ERP solutions are used to manage the entire operations of an organization, not only a product’s life cycle. This gives users the broad capability to manage operations and use the SCM functionality to manage the movement of goods, whether components or finished product.

With the ability to gain accurate inventory visibility and SCM production, ERP – distribution software is able to see the whole chain of manufacturing and distribution events, from supplier to manufacturer, all the way to the final consumer. Figure 2 illustrates this process.

Figure 2. The merging of a distribution and manufacturing business model

Figure 2 depicts three business models. The first is the SCM model, which includes the manufacturing process. The second is the retail model, which is the distribution of final products to the consumer, business, or retailer. The third model is a combination of the first two business models, joined by the ERP – distribution software solution into one seamless process.

Within the SCM process, goods can either be brought in (imported) through foreign manufacturers, or acquired locally. The goods are then given to a distributor, 3PL provider, or wholesaler in order to reach the final client.

Within the retail model, the products are taken from a distributor, 3PL provider, or wholesaler, and are distributed to the appropriate person. Note that there is a “shift” for the consumer. This is to indicate that through the Internet or other forms of technology, consumers are now able to buy directly from distributors. The power of the consumer has changed; where manufacturers once provided products to consumers, consumers are now creating demand, and manufacturers have to meet that demand.

SCM solutions (as seen in figure 2) focus on the relationship between the supplier and manufacturer. However, ERP – distribution software has taken functionality from SCM software and combined it with retail software (such as point of sale [POS] and e-commerce solutions); it is now able to span across the entire supply chain and to track goods along the complete manufacturing process.

Figure 2 is a simplified view of the complexities of today’s manufacturing processes. These complexities have made it crucial for trading partners to unite with manufacturers in order to help alleviate the frustrations that can occur within this global network. Specifically, trading partners are coming together with manufacturers to unite services, products, and customer experience so that business processes (such as manufacturing and distribution) become more efficient and that goods can move through these processes with minimal problems.

Emerging Opportunities for Revenue

SCM can be thought of as the management of “warehousing processes,” in which the movement of goods occurs through multiple warehouses or manufacturing facilities. Tracking the costs of moving products and components through the maze of warehousing and manufacturing facilities is a tricky process, and many organizations lose money at each warehousing step.

Within the flow of goods in the manufacturing sector, the warehouse is a crucial part of the supply chain. Traditionally, the warehouse has been a source of frustration because the manufacturer or supplier pays for the use of the warehouse (whether owned or rented by the company). This leads to two possible scenarios: 1) the costs of the warehouse are incurred by a 3PL or manufacturing company, or 2) the costs are passed from one warehouse to another warehouse, and the original warehouse charges for these costs.

The typical warehouse process includes the following steps: receiving, put away, picking, kitting, packing, repacking, cross-docking, and shipping. ERP – distribution software is able to track costs across the entire organization and to aid companies in reducing costs that were previously tough to track.

As seen in figure 2, an ERP – distribution system encompasses the entire production of the final good. The ERP – distribution system is able to include inventory visibility from points “A to Z” (start to finish) and to track each warehouse cost from supplier to manufacturer to user, whether consumer, business, or retailer.

The Final Word

ERP – distribution software has been developed to meet the growing needs of the manufacturing and distribution industries. The capabilities incorporated into the software work across entire organizations, and even across continents.

Because of the economic shift in the manufacturing industry, the emergence of new software has been vital for businesses to stay competitive, meet the industry demands and emerging shift, and to keep business processes efficient to gain better profit margins.

ERP – distribution software is able to track the processes of manufacturing goods and distributing components, even if the manufacturer has facilities in North America and the Far East. With the SCM component in ERP software, manufacturing and tracking goods becomes manageable. Distributors and manufacturers can now work together in order to better meet customer requirements.

Manufacturing/Distribution Process Outsourcing

Enjoy the financial and operational advantages of outsourced manufacturing, without typical worries such as transportation issues or quality controlhttp://www.referenceforbusiness.com/photos/distribution-and-distribution-requirements-planning-445.jpgActing as a transparent extension of your manufacturing staff, we take full responsibility for a specific manufacturing process. We provide the skilled workforce, supervision and management required to meet your production, quality and delivery goals.  Additionally, we supply the best practices and continuous improvement needed to drive ongoing business growth.

Typical outsourced industrial processes include:

  • Fulfillment
  • Rework
  • Sub-assembly
  • Packaging
  • Assembly
  • Labeling
  • Distribution
  • Warehousing
  • Kitting
  • Inspecting
  • Quality control
  • Quality assurance 

When your non-core processes become our core processes, we can focus on areas that may not otherwise receive top attention. We improve the value chain by tracking key metrics, communicating daily, and building strong handoffs between processes while delivering savings to your bottom line.

Examples of Manufacturing Strategy Development

A company's manufacturing strategy may determine its approach to business.

Although management and marketing play a major role in any company’s success, manufacturing strategies can mean the difference between success and failure for many corporations. Companies must develop a manufacturing strategy that plays up their strengths and pits them competitively in their market. Developing a manufacturing strategy that suits a company’s strengths is essential not only to maintain the supply chain to customers, but to ensure the company remains competitive within its market.

Flexible Manufacturing

Firms that adopt a flexible manufacturing strategy develop a manufacturing process that’s easily customizable to fit ever-changing market solutions. These systems stress the process’ ability to make modifications to their product quickly and adapt to changes in the volume of goods produced. Manufacturers that employ this strategy attempt to remain competitive by allowing for small-run batches and the ability to cheaply customize their products for clients to provide an advantage. Flexibility also allows manufacturers who employ this strategy to adapt to market changes more readily than competitors with other strategies.

Lean Manufacturing

Lean manufacturing strategies, also known as just-in-time manufacturing, aims to make the manufacturing process as efficient as possible by eliminating inventories and streamlining the manufacturing process to reduce wasted labor and materials. Companies that employ this strategy must employ workers with multiple skill sets to assume different roles as needed, and must develop a process that produces a high percentage of goods that passes quality control on the first pass. By maximizing efficiency, companies who use lean manufacturing plan to reduce costs and make themselves more competitive in the market.

Service Based Manufacturing

Often employed by companies with established customer bases or by those that sell goods with a low profit margin, this strategy attempts to focus profitability not on the initial sale of a good, but on continued aftermarket purchases. This strategy may focus on providing spare parts for goods with a long lifespan, or leasing big-ticket items for a limited term and providing full service to the product during the course of the lease term. This strategy puts a premium on producing profits not from sales of the item, but on aftermarket sales and service.

Determining Your Strategy

Developing a manufacturing strategy is a difficult proposition for any company. A manufacturing strategy should be developed alongside a company’s marketing and corporate philosophy, and should cater to the end needs of the distributor. While the type of manufacturing a company produces — single piece vs. multiple items, low volume vs. high volume — may impact a strategy, manufacturing needs and capabilities should also be considered. Just as there are many business philosophies that may fit inside an industry, no single manufacturing strategy works best in any situation.

Small Business Distribution Strategy

A well thought out small business distribution strategy provides informed decision making on types of small business distribution channels, distribution partners and tips on the most profitable small business distribution strategy for you.

Small Business Distribution StrategySmall Business Distribution Strategy: Getting your product or service to market may require your sales effort and/or the physical transfer of your product with one or more intermediate parties before it reaches the ultimate end-user. The process of getting products or services from its source to market is referred to as a ‘distribution channel’ or ‘chain.’

There are important reasons to utilize distribution partners and critical questions to get answers on deciding the appropriate channel of distribution for your business.

Reasons for Using Distribution Channel Partners:

  • Selling – A common reason to expand sales quickly by employing either directly or indirectly a channel partner to perform the task of selling your products or services
  • Physical Product Distribution– Products that are sold in a master pack and require a cutting, or breaking down the of the master pack to be sold in smaller quantities shares marketing expenses, provides credit and last mile delivery – in local markets
  • Value Add – Where a channel partner adds to the value of the product or service sold through providing additional services to the end-user. Examples of vale add are installation, assembly, and customization of the product or service.

Small Business Distribution Channels:

Distribution Types Distribution Methods
Company Owned or Provided Direct Sales

  • Your Own Sales Force
  • Catalog/Mail Order
  • Telephone
  • Internet
Outside Sales Agents Indirect SalesIndependent firm that only performs the sales function on your behalf
Distributors/Wholesalers Indirect SalesIndependent firm usually carries physical inventory & performs the physical distribution and sales function on your behalf. Can sell to retailers/dealers or direct to end-user.
Franchising Indirect SalesAn independent reseller that purchases the rights to a distribution or sales territory of a single product/service brand
Retailers/Dealers Indirect SalesIndependent firm that sells to end-users and usually inventories physical product
Value Added Resellers (VARs) Indirect SalesIndependent firm that sells to end-users and adds tangible value to the product or service being sold

Deciding the Right Small Business Distribution Channel Strategy:

To select the distribution channel appropriate for your business requires assessing a wide number of important factors about:

1. Your Business

  • the specific nature of your business
  • the type of product or service you want to sell
  • the geographic make-up and location of the markets you serve
  • selling costs verses the amount of sales process control you desire
  • the profit margin of your products or services

2. Your Customers

  • preferred purchasing methods of your customers
    • size, quantity, price, convenience, variety
  • Importance of Brand
  • Required or preferred pre sale services by your customer
  • Required or preferred after sales services by your customer

3. Your Distribution Partners

  • Intensity of distribution partners to your product or service
    • selective distribution, exclusive distribution, limited product offering, private label
  • Motivation of distribution partners
  • Ability to manage distribution partners
  • Integration of various types of distribution partners
  • Cost of distribution partners

Today, many companies use a mix of different distribution channels; as an example, you could augment a direct sales force, that calls on and services large established accounts, with agents, covering smaller customers and performing new business prospecting. There are other combinations of distribution channels appropriate for your business.

 

Become an Entertainment Lawyer: Education and Career Roadmap

Entertainment lawyers provide legal counsel on contracts, intellectual property rights, and other legal issues in the film, television, music, and gaming industries. Most work at law firms or as in-house counsel at entertainment companies. Their duties generally include handling either transactional work or litigation, and they often specialize in a particular entertainment field.

Almost all lawyers work on a full-time basis, with the majority working long hours at some point in their careers. Although most work in an office setting, travel may be required and off-site meetings are likely.

Career Requirements

Degree Level Juris Doctor (J.D.) degree
Degree Field Law; undergraduate major can vary
Experience Experience typically gained in law school
Licensure and Certification Bar membership required; continuing education mandated in most states
Key Skills Interpersonal skills; problem-solving skills; strong research, writing, analytical and speaking skills
Salary $114,970 (Annual median salary for lawyers as of May 2014)

‘Source: U.S. Bureau of Labor Statistics’

Step 1: Earn a Bachelor’s Degree

Before applying to law school, aspiring lawyers need to complete a bachelor’s degree program. The American Bar Association recommends picking whatever major will challenge and inspire future law students to do their best. There are particular skills that lawyers need, such as being able to research, analyze, speak and write well, so taking classes that help develop those skills could be especially useful. Relevant fields include English, economics, political science, history, math and public speaking.

Success Tip

  • Begin learning about the entertainment industry. Courses in film studies, cultural studies, communications, literature and music departments can provide insight into how the creative industries have evolved and currently function, along with honing appreciation for the arts themselves.

Step 2: Take the Law School Admission Test

Many law schools, including most approved by the American Bar Association, require Law School Admission Test (LSAT) scores of applicants. The LSAT has five multiple-choice sections plus a writing exercise, each of which must be completed in 35 minutes. The test is designed to measure critical-thinking skills, reading comprehension, capacity to make reasonable inferences and the ability to assess others’ arguments and reasoning. LSAT scores are not the only credential that law schools consider, but they can be important to one’s chances in the highly competitive admissions process. The LSAT can be taken four times a year at various testing centers throughout the nation.

Success Tip

  • Study carefully for the LSAT. Test takers should at least become familiar with the test’s format, instructions and general types of questions. It is also a good idea to take practice tests under time constraints, to get used to completing all sections on time. The test administrator, the Law School Admission Council, offers free sample tests and questions. For more extensive preparation, students can enroll in a private course or purchase study guides.

Step 3: Obtain a Law Degree

Earning a J.D. is normally a full-time endeavor over three years. The first year is devoted to required courses that cover essential areas, such as civil procedure, torts, property and contracts. Second- and third-year law students take more electives and begin specializing. Future entertainment lawyers should take courses on such topics as the first amendment, intellectual property, copyright law, negotiations and income tax, plus any industry-specific electives that match their interests, such as music law or film and television law. Several law schools offer certificates in entertainment law that can be earned mostly by completing a set number of relevant courses. For practical experience beyond the classroom, students can participate in school-sponsored legal clinics and moot court competitions, work at an entertainment-themed law review and seek out relevant summer internships.

Success Tips

  • Consider attending law school in an industry hub. Entertainment industry hubs, such as California, boast a high concentration of law schools with entertainment law programs and resources for aspiring entertainment lawyers. Being in an industry capital could help in finding work opportunities during and after law school. Gaining local knowledge of how these industries operate, such as state laws and regulations, could also be important for future professional life.
  • Consider specialties within entertainment law. Their industry and clients, not a particular body of law, define entertainment lawyers’ work. Depending on the type of practice, some may spend a lot of time on such areas as labor and employment, securities, immigration or litigation. Those who work with individual artists may find that along with negotiating TV deals, their clients need the same general services as other people, including divorce filings or estate planning. Law students should consider what kind of entertainment lawyer they want to be and choose classes to help prepare for the less obvious responsibilities.

Step 4: Join the Bar

To become licensed attorneys, law school graduates must become members of their state bar association. Rules and procedures vary by state, but the main qualifications are a law degree and passing the bar exam. The bar exam is actually comprised of several parts. In most states, bar applicants will need to pass the Multistate Bar Examination (MBE). Test takers have six hours to complete 200 multiple-choice questions on criminal law, contracts, constitutional law, property, torts and evidence. There is normally a second day of testing that features writing and lawyering skills. Nearly every state requires a general ethics exam, too, which is handled separately. In addition to passing the tests, bar applicants must also submit to screening by state bar examiners for character and fitness to serve the public.

Success Tip

  • Prepare for the bar exam According to law schools, studying for the bar exam should be a full-time job for up to two months. They also strongly recommend taking a commercial prep course, even though the cost of some can be high and law schools often offer their own study aids and advice.

Step 5: Go to Work in Entertainment Law

A new member of the bar is free to begin practicing law. Most entertainment lawyers join law firms and corporate legal departments, known as in-house counsel, and cluster in New York, Los Angeles or Nashville, although other options do exist. Entertainment lawyers may represent clients ranging from huge film studios to individual artists, and may focus on one or more of a wide range of specialty areas, including film, TV, radio, music, performing arts, museums and art, gaming and new media, merchandising and licensing, literary publishing and litigation.

Depending on the type of practice and client, daily work may include such diverse duties as reviewing a celebrity endorsement deal, researching collective bargaining agreements or handling a tax filing. Those who represent artists may need to be especially clear about what services they provide (i.e., not being a talent agent) and whether they will depart from the norm of hourly billing (i.e., accept contingent fees or percentage agreements).

Success Tip

  • Start reading trade publications regularly. More than other lawyers, entertainment attorneys need to understand well the business side of their industries. The current multimedia age also requires many to know about multiple entertainment fields. New entertainment lawyers especially should get in the habit of reading leading publications like The Hollywood Reporter, Variety, Advertising Age and Television Week.

Step 6: Continue Your Education

In most states, lawyers must complete continuing legal education at regular intervals in order to maintain their knowledge and advance their career. Continuing education is generally available from bar associations and law schools. Attorneys may attend approved courses, seminars or conferences or, in a growing number of states, gain credits for online courses or webcasts.

How to Start My Own Small Construction Company

Being handy with tools may provide more benefits than simply keeping your living quarters in good condition. Using your skills and experience to run your own construction company may provide a source of income that allows you to be your own boss and set your own hours. Although your future company may be small, it requires careful planning and organization to increase the chances of success. Like other types of small businesses, small construction companies must follow regulations and work hard to earn a customer’s confidence.

Step 1Write up a plan for your business. Known as a business plan, this written document provides a road map to get your company started. Include your goals and outline the methods you will use to meet those goals. Include sections that address the financial aspects of your business, your intended clientele, required tools, equipment and supplies, as well as advertising plans. Print your business plan on formal presentation paper.

Step 2 Apply for a loanto obtain any necessary funding for your new company. Take your formal business plan with you to your banker. Discuss your reasons for starting a construction business, including the reasons you think it will be successful. Talk about your loan options, including interest rates and terms.

Step 3Check with your state and local government for regulations governing small construction companies. They can tell you whether you require bonding to provide construction services in your vicinity, how to apply for a business license, register your business name and pay any fees for licensure and certification. Apply for a business identification number through the Internal Revenue Service. Contact a bonding company to apply for a bond. Even if the scope of your intended work or your local government doesn’t require this, being bonded may make your customers feel more comfortable about hiring you.

Step 4Take an inventory of your tools and equipment. Service any equipment you already own that needs repair. Purchase any items you require to perform basic construction tasks, such as ladders, saws, carpenters’ levels, drills and bits.

Step 5Advertise your new construction company in various media outlets that appeal to your customers. Draw in some business by offering discounts to your first few customers. Notify your friends, neighbors and relatives of your new company. Ask them to spread the word among friends and coworkers. Personal recommendations may encourage homeowners to allow you into their home to perform construction tasks.

Starting A Construction Business

Take the necessary time to understand how to properly set up your new construction company.  That will pay dividends for you in the future and better protect the assets of your new company.

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1. Organize.  Determine a name for your company and then strongly consider organizing as a Limited Liability Company (an LLC) or a Subchapter S Corp (a Sub S).  Organizing in this way will better protect your personal assets in the event of a claim or lawsuit against your company.  There is also a tax advantage to using an LLC or a Sub S.  The profit or loss from your business in each case is passed through to you and any co-owners to report as normal income.  You report this income on your year end IRS personal tax returns.  Since a LLC or a Sub S do not pay any state or federal income tax (as separate business entities), there is no double taxation.  If you are going to have partners or shareholders in your new company, make sure you have some kind of written members (LLC) or shareholders (Sub S) agreement as a part of your organizing documents; this agreement outlines all the rights, duties, responsibilities and obligations of all members or shareholders.  You can download example copies of these agreements for a nominal fee from the internet.  Find a Certified Public Accountant (a CPA) near you to do all the organization paperwork.  The CPA can explain the personal tax considerations of organizing as a LLC or a Sub S.  The CPA will also apply for an Employer Identification Number (an EIN) for your company, a DUNS number (for business credit reporting) and, if necessary, a Fictitious Name or Doing Business As (DBA) registration.  An EIN is the federal number your company needs to use when your company reports business income or receives revenues (payments) from commercial clients.  If you resell construction materials you will likely need a state tax certificate and sales tax number to collect and remit sales taxes to the state.  Check with your county for any zoning requirements that may affect your business location.

2. Bank Account.  Set up a bank account in the name of your company.  All revenues received and expenses paid out by your company must go through this account.  Do not co-mingle your personal funds with the funds in this account.  Pay all of your company’s bills through this account.  Do not use the business account for any personal purposes.  If you start this account with your own personal funds, lend this money to your new company through a written loan agreement that pays interest; this is a legitimate business expense for which you can reimburse yourself.

3. Insurance.  Insurance is an important asset of your construction company.  Secure General Liability and Auto/rental equipment insurance in the name of your company.  This will better protect you and your company against claims for personal injury and property damage, and will provide you with legal defense of those claims, which may arise out of your company’s operations.  Talk to a business insurance agent near you about your insurance needs.  You will also want to strongly consider securing Workers Compensation insurance for you and any of your employees.  Most clients will not allow you to work at their jobsite unless you have proper insurance and can provide certificates of insurance for the required policies, including Workers Compensation.

If your company will do architectural designs, engineering designs and calculations, or similar, then you will also need to consider securing Professional Liability (Errors and Omissions) insurance to better protect you and your company from claims arising out of mistakes made in designs and calculations.

4. Licenses.  Go your local county courthouse, contractors section, and find out what types of professional and/or business licenses you will need to secure for your new company and the type of work you intend to perform.  Secure all required licenses.  You may have to take a test, or tests, to secure certain types of contracting licenses.

5. Performance Bonds.  If you intend to do work in the public sector, it’s likely your company will be required to provide a performance bond to ensure that you complete the work in accordance with terms of the contract.  Bonds, guarantees actually, are provided by surety companies.  Start early on getting your company qualified to provide bonds as the surety company will go through a due diligence process on your company to determine the dollar value of work they will write bonds for.  You can find bonding companies in your area on the US Government’s Circular Number 570  (google “Circular 570”).

6. Business Plan.  Write a business plan.  This is a roadmap for your business.  It doesn’t have to be fancy or long.  Best bet is to take a course or attend a seminar on how to write one.  Check with your local SCORE chapter to see if they offer such a course.  Local universities and colleges often offer these courses as well.  Your business plan is a “living document”.  Change it as often as necessary to meet the changing needs and aspirations of your company.  If you want to borrow money from a bank for your business, one of the first things they will want to see is your business plan.

7. Start-Up Money.  For a newly established business without two to three years of success, borrowing money to get the business going will likely be difficult.

Personal funds, loans against the equity in a home, funds from investors in the new business, loans from friends and relatives, are some sources to consider for start up money.  If your personal credit is good, you may be able to establish a line of credit or secure a small value loan from your local banker.  Talk to several banks in your area about loans and see what their requirements are and how much they would be willing to lend you and under what terms and conditions.  There is no grant (free) money available.  Despite what you may hear or read, little if any grant money from the Government is available to for-profit business.  The majority — perhaps 95% — of grant money goes to not-for-profit businesses.  Do not waste your valuable time or money by taking a course in how to apply for grants;  use that same money to invest in your new business.

Who lends money?  Banks lend money.  The US Small Business Administration (SBA) and SCORE do not lend money or give out grants, despite what your friends or the rumor mill may tell you.  The SBA does provide guaranties for loans made by banks to small businesses.

8. Accounting.  Start early and get into the routine of collecting and recording all of your company’s revenues and expenses.  Establish a detailed chart of accounts for expense categories.  Alternatively, develop a working relationship with a CPA who will do all your books, prepare your monthly (or other time frame) cash flow statement, profit and loss statement, balance sheet, and prepare your required annual tax returns.  You can do this accounting work yourself if you are so inclined, but your time is more valuable being used to manage your business and making it grow and be successful.  Strongly consider hiring someone to take proper care of your accounting process.

9. Estimating and Pricing Process.  Develop an estimating and pricing process for the work you intend to perform.  Most clients are going to want a firm lump sum price for the work they want done, so make sure you fully understand all your direct labor, materials and equipment costs, your overhead (home office) costs, and your profit expectations for the work you quote.  The sum of all these is your price to the client.

10. Contracts.  Develop a simple contact form to use for your work with clients.  Make sure all your contracts have at least a well defined scope of work, good terms of payment, an achievable schedule and a good extras/claims clause.  Do not do any work on verbal orders; get everything in writing, always, no exceptions!  You may want to engage a lawyer who specializes in construction contracts or a contracts professional experienced in engineering/construction contracts to assist you in writing a contract to use for your projects.  Take a course in engineering/construction contracts so you understand such contract issues as: various types of terms of payment, indemnity, additional insured status, warranties, guarantees, types of damages, claims and dispute resolution.

11. Marketing.  Develop some marketing materials about your company and the work it does and get it out to potential clients.  Join local contractors groups and your local chamber of commerce.  Advertise in regional and local community newspapers.  These are all excellent venues to network and advertise for new jobs.  Marketing is simply client education.  An educated client is a buying client.  In your marketing materials note the work you do, successful projects, licenses, insurance provided and that you are a safe contractor who completes his work on time and has respect for his clients.  If applicable note that you are Veteran-Owned, a Women-Owned, or a Minority-Owned small business.

12. Sales.  Develop a sales process.  Selling is simply convincing the client to buy your engineering and/or construction services.  This process begins after you have done your marketing with the client.  Learn how to write a proper proposal to respond to a client’s inquiry or request for proposal (RFQ).  What makes your company better than the competition?  What are your strengths?  What are your weaknesses?  Improve your strengths and work on changing your weaknesses into strengths.  Always go see you clients face-to-face when selling.  When you see them, make sure you are always cleaned-up, well-dressed and presentable.  Learn from your competition.  Never bad-mouth your competition; it’s temping but unprofessional and they might actually do a better job than you do.  Slaging the competition will turn off your client to doing business with you.

13. Labor.  Labor necessary to complete your operations comes generally from three sources: subcontracts, direct hire, and broker labor.  With subcontracts, you hire a specialty contractor for certain portions of the work you intend to perform.  Make sure the subcontractors you use have appropriate experience, are properly licensed and insured, and, if necessary, bonded.  Pay your subcontractors on time and treat them as equal partners in the successful completion of your work.  With direct hire, you now have employees.  As such you will be responsible for their wages, certain insurance, and any applicable state and federal withholding taxes related to their wages, such as Social Security, income tax withholding, Workers Compensation and unemployment insurance.  You may also be responsible for other employee benefits such as vacation pay, health insurance, and contributions to a retirement program.  With broker labor, you engage a broker to furnish the workers you require to meet the skill needs of your project.  You pay the broker a fixed amount (per day, per hour, etc) for the workers he provides.  The broker pays all required taxes, withholdings, and insurance from the fees he charges you for the labor provided.

The labor provided by a broker will not typically be considered to be your employees, but check with your legal representative on this issue to make sure.  Also check to make sure your general liability insurance covers claims that may arise out of your use of brokered labor.

14. Safety.  Develop a safety program in accordance with the US Occupational Health and Safety Administration (OHSA) guidelines for your construction activities.  Publish it and give it to all employees.  Prominently post it on all jobsites.  Continually enforce the program with all your employees, subcontractors, any brokered labor you hire, and all others who may be on your jobsite.  Have your management’s and supervisor’s compensation packages, and even employee pay, linked to safe work practices.  The best insurance policy and way to reduce or eliminate claims for personal injury or property damage is to always work safely.  Zero OHSA recordables and zero OHSA lost time accidents ought to be your goal.  Unsafe employees should be requested to find employment elsewhere.

15. Where to Get Some Help.  There is no better place to get some help than your local SCORE chapter.  The SCORE motto is “Counselors to America’s Small Businesses.” There are approximately 400 SCORE chapters in the US and approximately 13,000 counselor volunteers ready to help with new and existing businesses.  SCORE counselors typically have many years of corporate or small business ownership experience, or both.  SCORE counseling is free.  Business related courses offered by the various SCORE chapters are typically provided for a nominal fee or may be free of charge.

Business Law, Entertainment Law, & Alternative Dispute Resolution

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LL.M. students may specialize their degree in Business Law, or Entertainment Law, or Alternative Dispute Resolution (ADR) by earning a certificate in these respective fields. All LL.M. students are eligible for USC Law certificate programs, which must be earned during their LL.M. studies. Students will receive additional information from the Graduate and International Programs (G&IP) office about certificate requirements and how to enroll in our certificate programs prior to registration. There are no additional fees for enrolling in a certificate program.

Students may elect to pursue a certificate during the fall registration period, which takes place during the summer before fall classes begin. Their coursework will be tailored based on the certificate requirements listed below. Graduates who have earned both an LL.M. degree and a certificate in Business Law, Entertainment Law, or ADR Law are able to market their specialized degree to employers in these fields. USC Law certificates provide graduates with the knowledge and skills to be top-notch business, entertainment, or ADR lawyers.

LL.M. Certificate in Business Law

To obtain an LL.M. Certificate in Business Law, LL.M. students must take a total of at least 14 units of the mandatory and elective Business Law courses. The mandatory and elective courses are listed below. Please note that not all elective courses are offered each year. Students interested in the Business Law Certificate should consult the G&IP office to ensure their course selection satisfies the Certificate and LL.M. enrollment requirements.

LL.M. students enrolled in the LL.M. Certificate in Business Law program may petition to enroll in selected graduate-level courses at the USC Marshall School of Business. Courses taken at USC Marshall School of Business will count as Elective Business Law Courses. Elective Business Law Course offerings at USC Law and at USC Marshall School of Business may vary each semester.

Online Business Law Certificate Program

The Business Law Certificate is available online for students who already have graduated with their first law degree (LL.B. or the equivalent) and would like to further their education. Distance learners can earn this certificate concurrently with their studies in the Online LL.M. Program or separately by enrolling in five graduate law classes that can be completed in as few as 9 months. The following link provides information regarding related jobs, costs, loan debt, and completion rate for the program: Gainful Employment Disclosure.

The Benefits of Becoming a Contractor

The main advantages are that you can:

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  • Become your own boss
    Contract work provides greater independence and, for many people, a greater perceived level of job security than traditional employment.
  • Maintain a good work/life balance
    Less commuting, fewer meetings, less office politics – and you can work the hours that suit you and your lifestyle best.
  • Earn more money
    Being a contractor means you get paid for every hour of work you do, at the market rate. If your skills are in demand, your income could be high.
  • Test out a new field of expertise
    Not sure if there’s a market for your skills? You can dip a toe into a new industry without committing yourself to a full-time job. If it doesn’t work out, you can cut your losses quickly and easily.
  • Start on a part-time basis
    This can be appealing to young people just graduating from college, or older people who want to experiment with a second or even third career.
  • Test out a company
    If you’re not sure a new company is offering the right full-time employment opportunity for you, suggest first working for them as an independent contractor.

If these benefits sound appealing, you might have the right mindset and skills to become a contractor.

Plan what you will earn

Contractors often start as employees first, before leaving to work on their own. They have a good knowledge of the rates being paid and the type of work expected of them. If you’re not sure what you can charge, have a look at sites such as Odesk and eLance for rates and other information.

Remember, you’ll only be paid for the work you do. You usually won’t be paid when you’re sick or taking time off. There will be no company pension or retirement plan, no corporate healthcare package and no dental coverage.

But some people are able to do high-value work in a short space of time. Even taking into account loss of holiday pay, sick pay and other benefits, such workers can still come out ahead financially as contractors.

How far ahead? Think what you could charge per hour or per job. Then think about how much work you’re likely to get. Now research the cost of providing your own healthcare insurance, sickness and time off coverage, retirement plan, equipment and so on.

Take these numbers and put them into your accounting software to forecast your likely income. Do the figures add up? Only by planning carefully will you know whether it’s time to strike out alone. It may be helpful to talk to a financial adviser before making the final decision.

The definition of an independent contractor

As a general guide, the government will consider you to be a contractor instead of an employee if you:

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  • Own at least part of your own business.
  • Work for multiple companies during each tax year.
  • Have specialized skills or expertise.
  • Work on a temporary, short assignment or project.
  • Work for a client for a limited period of time and not on a permanent basis.
  • Supply most of your own materials and equipment.
  • Have a client who makes the ultimate decisions about the project you’re working on.

Check local rules for a clearer picture, as the guidelines vary from one country to another.

Hire a Contractor or an Employee?

Independent contractors and employees are not the same, and it’s important to understand the difference. Knowing this distinction will help you determine what your first hiring move will be and affect how you withhold a variety of taxes and avoid costly legal consequences.

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What’s the Difference?

An Independent Contractor:

  • Operates under a business name
  • Has his/her own employees
  • Maintains a separate business checking account
  • Advertises his/her business’ services
  • Invoices for work completed
  • Has more than one client
  • Has own tools and sets own hours
  • Keeps business records

An Employee:

  • Performs duties dictated or controlled by others
  • Is given training for work to be done
  • Works for only one employer

Many small businesses rely on independent contractors for their staffing needs. There are many benefits to using contractors over hiring employees:

  • Savings in labor costs
  • Reduced liability
  • Flexibility in hiring and firing

Why Does It Matter?

Misclassification of an individual as an independent contractor may have a number of costly legal consequences.

If your independent contractor is discovered to meet the legal definition of an employee, you may be required to:

  • Reimburse them for wages you should’ve paid them under the Fair Labor Standards Act, including overtime and minimum wage
  • Pay back taxes and penalties for federal and state income taxes, Social Security, Medicare and unemployment
  • Pay any misclassified injured employees workers’ compensation benefits
  • Provide employee benefits, including health insurance, retirement, etc.

Tax Requirements

Visit the IRS Independent Contractor or Employee guide to learn about the tax implications of either scenario, download and fill out a form to have the IRS officially determine your workers’ status, and find other related resources.

Employment Information

There is no single test for determining if an individual is an independent contractor or an employee under the Fair Labor Standards Act. However, the following guidelines should be taken into account:

  1. The extent to which the services rendered are an integral part of the principal’s business
  2. The permanency of the relationship
  3. The amount of the alleged contractor’s investment in facilities and equipment
  4. The nature and degree of control by the principal
  5. The alleged contractor’s opportunities for profit and loss
  6. The amount of initiative, judgment, or foresight in open market competition with others that is required for the success of the claimed independent contractor
  7. The degree of independent business organization and operation

Whether a person is an independent contractor or an employee generally depends on the amount of control exercised by the employer over the work being done. Read Equal Employment Opportunity Laws – Who’s Covered? for more information on how to determine whether a person is an independent contractor or an employee, and which are covered under federal laws.

Top 10 Best Entertainment Business ideas and Opportunities

1. Recording Studios

This goes straight to the upper tier of the top 10 entertainment business ideas because of its demand and wide market. Undoubtedly a niche business, recording studios saw the demands go up three-fold in the last three five years alone more than the last couple of decades. Social media and video sharing sites have certainly stirred the inner performers in millions of people around the globe, and you can have a share of it.

Although a bit expensive with all the equipment and the construction of the studio itself, the Return-of-Income (ROI) is also high due to the naturally expensive service you can offer. For $10,000-50,000, you can have all the equipment you need, down to the high-tech-mixers for additional services.

2. Sound Engineering Services

Sound engineers landed on the second place in the top 10 entertainment business ideas not only because of the demand but because of the convenience of the service, both in the part of customers and businessmen. This is a knowledge-based business and it should not be hard to start up for the adept ones. With just a couple of software, you are good to open for business.

3. Events and Social Media Management

Think of it as the modern PR management. Almost everyone – from politicians to community leaders – needs a good social media reputation, and since this surprisingly is not easy for lots of people, you will surely have clients lined in front of you in no time.

4. Video Editing Services

Also mainly attributed to the social media craze, video editing transitioned its market from professional clients to amateur ones. Just look at YouTube and see how many people are willing to pay for smooth video editing that only professionals can offer. It is a worthy slot in the top 10 entertainment business ideas because of its timely demand.

5. Online Entertainment Portals

Think of it as the front-end of website management – of websites dedicated to entertainment purposes such as blogs and video-audio sharing sites. Web administrators and back-end specialists (who are in-charge of the technical works) often take care of this part as well. Unfortunately, the creative side is often left out. Specializing in creative services and web administration will give you the edge in conquering this business.

6. Music and Dining Clubs

Food as usual is a good business. With a touch of music and club theme, it won’t be long before you gain patrons and start raking in bucks after bucks. The attraction makes a good business opportunity and not just the food alone.

7. Dance Studios

Many dance studios earn just enough to keep them alive in the entertainment industry. However, adding some flair of showmanship will make the difference and spell your success. Hire good choreographers who are knowledgeable on the new dance styles and are innovative enough for your studio to produce professional dancers. Dancers nowadays are also using effects like lights and chroma presentations so you may want to invest on them as well.

8. Corporate Meeting Planning

This is a more specialized type of event planning which caters only to specific clients and reasons. Corporate events nowadays are more flamboyant and tend to center on one thing – entertainment. Think of Lady Gaga throwing a party for Polaroid (where she is a creative director). Most likely, that’s the target you are aiming at.

9. Advertising Clipping Service

Old advertising clipping agencies are merely advertisement clippers that focus on monitoring. That surely won’t put them in the top 10 entertainment business ideas. Things have changed and clipping services now specialize in media research and information monitoring. If you know how to monitor ads of competing products and know how to strategically advise and analyze, you surely will succeed in this venture.

10. Advertising Agency

Ad agencies are no longer limited to print, radio and TV. Internet has virtually unlimited capacity for ads, whether legitimate or spam. So if you have an overactive brain, then this business for you. If you have the knack for hitting what’s entertaining with loads of “recall” power, you may want to start this service. You may even make it big time and be an internet superstar among ad and creative service providers.

Top 15 Employment Law Facts You Need to Know

Employment law covers a vast area – from employment contracts to dismissal and everything in between. Complying with employment law keeps your workforce happier and more productive, and saves you the cost and stress of employment tribunal claims. Read these 15 key employment rules to help you get started.

Small Business Update

This update was published in Small Business Update – February 2015

Small Business Update from Atom Content Marketing is a monthly magazine for people running their own business. Articles vary in length and cover ‘hot topics’, issues of importance, and current affairs.

  1.  All employers, regardless of size, now must provide written details of their disciplinary rules and procedures. These must be fair and reasonable.
  2. Employees who are taken on for less than one month are not entitled to a written statement of employment terms. However, if you take someone on for more than one month, they are.
  3. You can only change the terms of an employment contract if you have reserved the right to do so or have gained your employee’s agreement or consent.
  4. An employment contract exists once a potential employee accepts an unconditional offer of employment, which may be before their employment commences.
  5. You can make a job offer subject to successful completion of a probationary period. Three to six months is typical; the period needs to be long enough to allow you to judge whether the employee is able to do the job.
  6.  Statutory sick pay (SSP) is currently £87.55 per week. There is no legal obligation to pay more than this figure, however, many employers have their own sick pay schemes, which exceed SSP.
  7.  You can refuse to pay statutory sick pay if you reasonably believe your employee has not genuinely been ill, or if they have not complied with your notification requirements.
  8. The government’s new ‘fit for work’ service offers health and work advice to employers, employees and GPs via a dedicated phone line and website. It will also offer health assessments by an occupational health professional once an employee reaches, or is expected to reach, four weeks’ of sickness absence. Referral will normally be by the employee’s GP. The aim of the assessment is to draw up a plan to enable the employee to return to work. It is expected that there will be a tax exemption of £500 for treatments recommended by the Health and Work Service. The scheme is entirely voluntary. It is funded by the abolition of the Percentage Threshold Scheme.
  9.  Employers are responsible for the health and safety of any of their employees who work from home. All the normal health and safety legislation applies.
  10.  A pregnant employee is entitled to paid time off for ante-natal care, which can include parenting and relaxation classes. You can ask for evidence of appointments, for example, a doctor’s letter or an NHS appointment card.
  11.  For the first six weeks, statutory maternity pay (SMP) is paid at 90 per cent of the employee’s normal weekly earnings. For the remaining 33 weeks, SMP is £138.18 a week or 90 per cent of the woman’s average earnings if this is less than £138.18 per week. An employee may be entitled to Statutory Shared Parental Pay if their baby is due on or after 5 April 2015. An employee who is eligible for Statutory Parental Leave can share it with their partner (if the partner is also eligible), and they can choose how much of the leave each will take.
  12. Gross misconduct is conduct that is so bad that it destroys the employer-employee relationship and merits instant dismissal without notice or pay in lieu of notice. You should detail, in your contract of employment or staff handbook, examples of employee gross misconduct, which could be intoxication (drink or drugs), fighting, indecent behaviour, theft, dishonesty, sabotage, etc.
  13. There is an Acas Code of Practice on Disciplinary and Grievance Procedures that provides basic, practical guidance and principles to help you (and your employees and their representatives). It sets out the basic requirements of fairness and, for most cases, provides a standard of reasonable behaviour.
  14. Workers aged below 18 are entitled to work no more than eight hours per day and 40 hours per week. They are not permitted to ‘opt-out’ of these limits, even if they want to.
  15. Almost all employees with 26 weeks’ continuous service are entitled to request flexible working. This includes both full-time and part-time employees.

What is Business Law ?

Business law deals with the creation of new businesses and the issues that arise as existing businesses interact with the public, other companies, and the government. This area of the law draws on a variety of legal disciplines, including tax law, intellectual property, real estate, sales, employment law, bankruptcy, and others. Business law attorneys specialize in transactional work, meaning they do not represent clients in court. In fact, business lawyers are often hired for the purpose of avoiding future litigation.

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To understand the role of business law within the legal system, it helps to view businesses as entities separate from their owners and employees. Just like individuals living together in society, business entities are subject to legal rules designed to give every participant in the marketplace a fair opportunity to succeed.

An enforceable system of business laws also benefits the economy as a whole and provides for more efficient transactions. For example, a supplier who sells goods on credit can be confident that the buyer will held to the agreed payment terms. As long as the contract is drafted and executed in accordance with the Uniform Commercial Code (UCC) adopted in that jurisdiction, the supplier knows ahead of time it will be able to enforce the contract against the buyer if necessary.

Business Formation and Internal Agreements

New companies must take steps to comply with the law even before opening their doors for the first time. Business law attorneys are routinely asked to form new entities on behalf of their clients by filing the necessary documents with the Secretary of State. Clients may also need assistance choosing the business entity best suited for their enterprise

Businesses can be formed as corporations, limited liability companies (LLCs), partnerships, and other entities. Most of these business forms can be further customized to meet the needs of the company. Examples include corporations formed as “S-corps” in order to achieve tax savings, and partnerships formed as “limited partnerships” to allow some owners to participate as investors only.

While the selection of the appropriate business entity will depend on numerous factors, the primary purpose of most entities is to shield owners from individual liability. Operating a business that is not set up to provide limited liability means that the owners are putting all of their personal assets within reach of the business’s creditors. By working with an attorney at the inception of the business, this situation can easily be avoided.

Business law attorneys are also available to draft the internal agreements that will control how a new company is managed. A common example is an LLC operating agreement. This document should be drafted with care, as it governs how the company’s owners will share profits and losses, make important business decisions, and transfer their ownership rights.

Navigating Complex Transactions

Some commercial transactions are within the ability of business owners to handle on their own. Others are not, especially when a deal touches on complicated and evolving areas of the law, such as securities regulation or internet commerce. In heavily-regulated industries in particular, companies rely on their in-house or hired lawyers for advice regarding the latest legal developments affecting their businesses.

Even for savvy business people, problems can develop when emotions become involved. Attorneys can provide valuable insight into a transaction, not only because of their legal training, but also because of the objective nature of their analysis. This allows them to spot issues overlooked by business owners and managers who may be too emotionally invested in seeing the deal go through.

Preemptive Measures to Avoid Litigation

One way to distinguish business law as its own field of practice is to take note of when these issues arise. Business law provides rules and guidance for companies to follow before disputes occur. Attorneys who practice in this area are experts at structuring transactions to minimize the company’s exposure to litigation. This sort of strategic legal maneuvering can end up saving the company huge amounts of money.

Consider the example of a services company headquartered in one state, with customers all across the nation. The company might hire a lawyer to draft customer agreements that require customers to follow specific dispute procedures, such as giving the company an opportunity to remedy deficient services before a legal claim is made, or providing that disputes must be submitted to arbitration in the company’s home state. In every industry, there are opportunities for business attorneys to save their clients money and provide them with a greater competitive advantage.

Hiring Legal Counsel

If you operate an existing business or plan to launch a new one, your success may depend on obtaining the right legal advice. Attorneys are available to assist with everything from simple buy/sell agreements to mergers and acquisitions of publicly-traded companies. Schedule a consultation with a business law firm today.

The Differences Between a Business Plan & Business Model

Every successful small business owner has engaged in some sort of business planning. Whether you are identifying your newest marketing strategy or planning a customer retention campaign, your business strategies must be geared around your business plan and business model to generate overall success.

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Business Model

Your small business’ business model ascertains how your business makes money. It identifies the services that your customers value and shows the reciprocation of funds for the services your small business renders to your customers. Of course, your small business may have more than one method of generating income. Still, the business model simplifies the money process by focusing on the largest income generator. For instance, a grocery store sells many items. It may also provide additional services, such as check cashing. The business model only recognizes the majority income generator, which is the sale of grocery inventory. Therefore, the business model will reflect the sale of groceries to the customer, which generates income at the time of the customer’s purchase. The customer benefits from the wide selection of inventory and your small business enjoys the profits of the wide inventory selection.

Business Plan

The business plan provides the details of your business. It takes the focus of the business model and builds upon it. It explains the equipment and staff needed to meet the details of the business model. It also explains the marketing strategy of your small business, or how your business will attract and retain customers, and deal with the competition. Furthermore, the business plan explains the financial stability of your small business at a particular point in time, as well as in the forecasted future. Overall, the business plan supports the business model and explains the steps needed to achieve the goals of that model.

Interdependency

The business plan is completely dependent upon the business model. The business model explains the flow of money within the company and the business plan the structure needed to obtain that flow of money. If you change the business model, you will also need to change the business plan. Although the entire business plan may not require change, you may have to address changes in staff, equipment, location or marketing. These changes may also require changes within the financials if additional purchases or other drastic changes are required.

Change

Change is a common force in the business world. Small businesses must be able to adapt to the changes of the industry and the demands of its customers. Failure to adapt to this change can result in the loss of customers and decreased profit margins. It is important that your decisions regarding change align to your business model to avoid wasting time and resources. In addition, it is important that you update your business plan to reflect your small business’ changes. Updating your business plan will not only help to keep you on track with your business’ goals and missions, it will help you to benchmark your business’ progress, and develop new or revised strategies towards success.

How to Compare a Business Model With a Competitive Strategy

To make money, your business must provide something that customers want or need, and must get the word out to a critical mass of consumers. Reaching the right customers involves setting your offerings apart from those of your competition through an effective competitive strategy. Your business model provides the basis for your competitive strategy, defining what you promote and where you target your promotional efforts. Comparing business model and competitive strategy offers an opportunity to craft a consistent message, using your unique strengths to draw the right clientele.

Listen closely to customers to understand their needs and preferences.

SWOT Analysis Comparison

A SWOT analysis outlines your company’s strengths, weaknesses, opportunities and threats — and can assist in comparing your current competitive strategy against your business plan. Strengths and weaknesses are internal qualities, determined by who you are and how you have chosen to operate your company. Opportunities and threats relate to the business climate in which your company operates. Compare business model and marketing strategy through a SWOT analysis to determine whether your message reflects your core strengths and whether your outreach efforts successfully set your offerings apart, addressing customer concerns and standing out from the competition.

Target Market Comparison

It’s pointless to market technical manuals to consumers who can’t change their own light bulbs. Your business model should be based on a clear understanding of who is most likely to pay for your products and services. If your marketing strategy is consistent with your business model, your outreach efforts will be targeted towards defining target market demographics, understanding how these consumers absorb information, and positioning your offerings where these potential customers are most likely to find them.

Pricing Strategy Comparison

The price you charge for your product should aim at the sweet spot that provides you with a livelihood while also fitting the budget of your target market. Compare the pricing element of your business model with the pricing element of your marketing strategy by evaluating your prices relative to those of your competition. Your price should reflect your strengths, challenges and priorities. For example, if you value quality and pay close attention to detail, you will likely charge a high price that sets your offerings apart and communicates how product benefits justify the additional expense.

Product Features Comparison

Whether looking at sales results or projections for the coming year, positioning desired features at a competitive price can generate scenarios for product offerings. As you have developed your product or service, you have likely tailored it to meet customer needs by adding or eliminating features. For example, if your product will be used most often by children, it must be small enough to fit in their hands. Compare business model and marketing strategy with regard to product features by placing these features in context, determining whether they are effective and tinkering with them to enhance user experience and craft a relevant marketing message.

Fundamental Facts about Business Models

This article is based on the free eBook "Business Models - Networking, Innovating and Globalizing"

I am sure you’ve heard the term business model before. But can you honestly say you know what exactly it is about? In short: a business model is a sustainable way of doing business. Here sustainability stresses the ambition to survive over time and create a successful, perhaps even profitable, entity in the long run.

The field of business models is gaining more and more importance. It is, for example, becoming a core management discipline alongside accounting, finance, organization etc. and we soon expect to see teaching modules on business models entering leading Masters and MBA programmes. This is just one of the reasons why we’ll take a closer look at what a business model is all about.

(One possible) verbal definition of a business model

A business model describes the coherence in the strategic choices which facilitates the handling of the processes and relations which create value on both the operational, tactical and strategic levels in the organization. The business model is therefore the platform which connects resources, processes and the supply of a service which results in the fact that the company is profitable in the long term.

Ryanair as an example of a business model

One of the best examples of a business model that has changed an existing industry is Ryanair, which has essentially restructured the business model of the airline industry. As the air transport markets have matured, incumbent companies that have developed sophisticated and complex business models now face tremendous pressure to find less costly approaches that meet broad customer needs with minimal complexity in products and processes. While the generic strategy of Ryanair can be denoted as a low-price strategy, this does not render much insight into the business model of the company.

The low-cost option is per se open to all existing airlines, and many already compete alongside Ryanair on price. However, Ryanair was among the first airline companies to mold its business platform to create a sustainable low-price business. It is the “no-service business model”. In fact, the business model is so well thought through that even the arrogance and attitude of the top management matches the rest of the business. But they can make moneyin an industry that has been under pressure for almost a decade, and for this they deserve recognition. Ryanair’s business model narrative is the story of a novel flying experience – irrespective of the attitude of the customer after the ordeal.

The 6 parameters that make up a business model

In 2002 Chesbrough & Rosenbloom tried to corner the important aspects to be considered in order to comprehensively describe the business model of a company.

They define six elements which make up the business model:

  1. Articulate the value proposition, that is, the value created for users by the offering based on the technology
  1. Identify a market segment, that is, the users to whom the technology is useful and for what purpose
  1. Define the structure of the value chain within the firm required to create and distribute the offering
  1. Estimate the cost structure and profit potential of producing the offering, given the value proposition and value chain structure chosen
  1. Describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementors and competitors
  1. Formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals

Great business models start with the right questions

In order to start working with clarifying the business model of a company or an organization, one can start off by asking questions such as:

  • Which value creation proposition are we trying to sell to our customers and the users of our products?
  • Which connections are we trying to optimize through the value creation of the company?
  • In which way is the product/service of the company unique in comparison to those of major competitors?
  • Are there any critical connections between the different phases of value creation undertaken?
  • Can we describe the activities that we set in motion in order to become better at what we do?
  • Which resources, systems and competences must we attain in order to be able to mobilize our strategy?
  • What do we do in relation to ensuring access to and developing the necessary competences?
  • Which risks can undermine the success of the chosen Business Model?
  • What can we do to control and minimize these?

Definition of Business Model

This describes the method or means by which a company tries to capture value from its business. A business model may be based on many different aspects of a company, such as how it makes, distributes, prices or advertises its products.

http://www.innovationmanagement.se/wp-content/uploads/2013/10/%E2%80%98Borrow%E2%80%99-Business-Models-to-Reinvent-Your-Industry.jpgThe business model concentrates on value creation. It describes a company’s or organisation’s core strategy to generate economic value, normally in the form of revenue.

The model provides the basic template for a business to compete in the market place, it provides a template on how the firm is going to make money, and how the firm will work with internal players (firm’s employees and managers) and external players (stakeholders such as customers, suppliers, and investors).

The business model indicates how the firm will convert inputs (capital, raw materials and labour) into outputs (total value of goods produced) and make a return that is greater than the opportunity cost of capital and delivers a return to its investors. This means that a business model’s success is reflected in its ability to create returns that are greater than the (opportunity) cost of capital, invested by its shareholders and bondholders.

Business models are an essential part of strategy – they provide the fundamental link between product markets, within the industry, and the markets for the factors of production such as labour and capital.

Any resilient business model must be able to create and sustain returns for its investors over time, otherwise, it is likely to go out of business or fashion.

Example
The ‘razors and blades’ model used by companies such as Gilette, in which a basic product (the razor) is sold cheaply, but an essential add-on or consumable (the blade) is sold at a high price once the customer has been lured in.

Another example is a mobile phone company may sell handsets (the bait) at a reduced price while signing up customers to buy calls over the period of a contract (the hook).

Also General Motors, for many years, had an unsustainable business model as its returns did not match or exceed its cost of capital. Profitability was focused on the financing of cars, i.e. providing financing to its automotive customers, such as loans to buy the cars, through its finance subsidiary GMAC, rather than by designing and manufacturing sought after cars that are also cost competitive.

When the financial crisis struck, this model encountered problems, and as GMAC had to seek a US government bailout, the company’s already precarious condition turned into bankruptcy.

Business Models Are Under Attack

Most interviewees told us that their old ways of doing business were under serious threat.   Most often, this boiled down to how technology, and the competition enabled by it, is transforming their customer relationships.

UntitledMany consumers have come to expect faster, better and personally tailored responses to their individual needs.  They have grown accustomed to highly flexible, quick service providers like Amazon and Google.  They can report problems, check accounts, order products and make payments easily.  Today, a consumer or a business customer also can find providers of many products and services on the web, and compare their options.  And they can do it almost anywhere with smart mobile devices.  Those expectations are driving our client organizations to completely rethink how they relate to the outside world, as well as to each other as business-to-business vendors and buyers.

Leaders Must Be Increasingly Flexible and Innovative

Evolving business models will place a premium on organizational leaders who are adaptable, strategic and even ingenious in how they recognize and respond to a changing world. New technology can yield better, real time customer information, drive growth, reach new markets and create efficiencies and cost savings.  Much more than simply having a web page or a customer portal, organizations must look critically at all of their capabilities and limitations, especially in light of customers’ convenience and their greater access to information and to competitors.   Leaders must recognize a genuine opportunity or threat and be ready to act on it.  And, they will need to bring along their employees through both informing them of the urgency and motivating real change.

A leader who relies blindly on what has worked before, however successfully, runs the risk of being passed by competitors and left behind.  But there are risks for both fast followers and for trailblazers.  What will happen if an innovation bet fails?  Our interviewees cited the need for leadership courage, but courage balanced with clear strategic thinking.

Driving Appropriate Culture Change

These challenges and leadership needs naturally highlight the importance of skillful culture change.  An organization that fails to respond to a changing business model will see its market share, its profits and its reputation dwindle.  It will suffer demoralizing losses, both financially and in its human capital.  Employees will be required to shoulder the burden of new and different work demands, possibly with fewer co-workers, and a less certain future.  Some will mentally check out.  Others will vote with their feet and leave entirely, particularly in an improving job market.

Successful leaders must get ahead of the changes.  They must become masters of identifying the critical performance enablers of the existing culture, be it outstanding service, leading edge products or operational excellence, as well as the major change inhibitors.  Even more, they must be able to translate that understanding into a compelling view of the future and identify the right activities, policies and decision rules which will drive their organizations forward.

Too much reliance on the past will paralyze an organization that should be in motion.  Too much emphasis on new and different thinking and behavior could take it in entirely the wrong direction.   Leaders for the future must strike the right balance between the old and the new, and demonstrate the will to take action and drive change.   Leading towards the future will not favor the timid.

Optimizing Talent

Of course, culture change alone will not guarantee achieving success.  Part of instituting a new business model necessarily requires blowing up the old organizational structure.  It means reshuffling teams, roles and responsibilities, upgrading talent and placing new expectations and rewards in front of many employees.  Future leaders must be ready to face the inevitable HR consequences of change:  people feeling passed over or pulled in unpleasant new directions, hiring new and essential talent in spite of opposition, and moving employees out of their comfort zones.

Our interviewees told us that the talent implications won’t stop with just these leadership demands. They also include identifying the people who can be a foundation for the future and grooming them to be ready for it.  Several respondents told us how important it is to reach deeper into the organization to identify the leaders of the future, even if they weren’t from the traditional places.  They described the critical value of fully developing and utilizing female employees and minorities.  And they implied that some of the best talent may reside in younger people, too.

All of these considerations shine a different light on talent management.  Rather than having an exclusive focus on the rare, high-level “franchise players,” what emerges is an evident priority to look more broadly and deeply for essential future talents.  It means being talent scouts in the truest sense of that phrase.  And it means that senior leadership must think differently about talent and how to invest in it.  Saving money in the short-term on salaries and administration inevitably will result in higher costs later as the organization under performs.  It will simply delay the consequences and boost current profitability.  Our interviewees told us that their leaders need to think differently, and more often, about genuine, full-fledged talent management.

Putting It Together

We got terrific benefits as our clients shared their thoughts and concerns about the future with us.   Now you, too, have the opportunity to ponder what they told us.

How does this picture fit your organization?  Do you expect to face similar challenges?  Will the future place new demands on your leadership and your employees?  Are you ready to confront tomorrow and to make the necessary changes?  Or, will you be left behind?

Business Models vs. Strategy vs. Tactics

No three concepts are of as much use to managers or as misunderstood as strategy, business models, and tactics. Many use the terms synonymously, which can lead to poor decision making.

http://image.slidesharecdn.com/strategyandbusinessmodel-130425091417-phpapp02/95/strategy-business-model-and-business-plan-4-638.jpg?cb=1366881345To be sure, the three are interrelated. Whereas business models refer to the logic of the company—how it operates and creates and captures value for stakeholders in a competitive marketplace—strategy is the plan to create a unique and valuable position involving a distinctive set of activities. That definition implies that the enterprise has made a choice about how it wishes to compete in the marketplace. The system of choices and consequences is a reflection of the strategy, but it isn’t the strategy; it’s the business model. Strategy refers to the contingent plan about which business model to use. The key word is contingent; strategies contain provisions against a range of contingencies (such as competitors’ moves or environmental shocks), whether or not they take place. While every organization has a business model, not every organization has a strategy—a plan of action for contingencies that may arise.

Consider Ryanair. The airline was on the brink of bankruptcy in the 1990s, and the strategy it chose to reinvent itself was to become the Southwest Airlines of Europe. The new logic of the organization—its way of creating and capturing value for stakeholders—was Ryanair’s new business model.

Changing strategic choices can be expensive, but enterprises still have a range of options to compete that are comparatively easy and inexpensive to deploy. These are tactics—the residual choices open to a company by virtue of the business model that it employs. Business models determine the tactics available to compete in the marketplace. For instance, Metro, the world’s largest newspaper, has created an ad-sponsored business model that dictates that the product must be free. That precludes Metro from using price as a tactic.

Think of a business model as if it were an automobile. Different car designs function differently—conventional engines operate quite differently from hybrids, and standard transmissions from automatics—and create different value for drivers. The way the automobile is built places constraints on what the driver can do; it determines which tactics the driver can use. A low-powered compact would create more value for the driver who wants to maneuver through the narrow streets of Barcelona’s Gothic Quarter than would a large SUV, in which the task would be impossible. Imagine that the driver could modify the features of the car: shape, power, fuel consumption, seats. Such modifications would not be tactical; they would constitute strategies because they would entail changing the machine (the “business model”) itself. In sum, strategy is designing and building the car, the business model is the car, and tactics are how you drive the car.

Strategy focuses on building competitive advantage by defending a unique position or exploiting a valuable and idiosyncratic set of resources. Those positions and resources are created by virtuous cycles, so executives should develop business models that activate those cycles. That’s tough, especially because of their interactions with those of other players such as competitors, complementors, customers, and suppliers that are all fighting to create and capture value too. That’s the essence of competitiveness—and developing strategy, tactics, or innovative business models has never been easy.

5 Business Model Components Every Entrepreneur Needs

Is your business on a collision course with a train, but yet you’re 100% focused on getting more people to like your Facebook page or follow you on Twitter?

Let me enlighten you: Big mistake.

If your core fundamentals are out of whack, so is your business.

Danny Iny, Founder and CEO of Firepole Marketing, is a guy who sees this everyday. And because of this, he is on a mission. As he stares down the face of one business failure after another, he sees major flaws in the way entrepreneursare taught. And yes — he is taking action to change it.

Dubbed the ‘Business Ignition Bootcamp’, Iny’s focus is to help business owners break through the madness and escape failure.

And guess what? Iny opened up the first module of his bootcamp so I could take a peek and share it with you.

Based on the 5 key Business Model Components from the best selling book ‘Getting To Plan B’ by authors Randy Komisar and John Mullins, module one addresses the importance of these 5 components on your road to entrepreneurial bliss:

1: Your Revenue Model

In a nutshell, this is your strategy to generate revenue. What you plan to sell, and what will convince people to buy. Value propositions, positioning, effective messaging, product/market fit. For example, when I say “Victoria’s Secret”, what comes to mind? Yes — good or bad they have a clear understanding of their revenue model and communicate it well. Although most business owners get the importance of this in theory — why do so many struggle? Perhaps because they really don’t get it after all. Do you?

2: Your Gross Margin Model

Yes — important for you to know how much of the pie you get to keep from each sale. Do you know your piece of the pie? For example, Walmart and Costco know they run low gross margins. Their value game is one of low pricing, so they can’t mark up their products by an exorbitant amount and still play the value card. However, let’s look at the legal service industry. It has, on average, a gross margin of 93.22 percent, according to Butler Consultants. Although I am not advocating you jump into the legal game, it’s critical for you to understand your own gross margin model. Can you see why?

3: Your Operating Model

If you’re Costco, it’s slash and burn the expenses. Which is why they operate out of huge bare warehouses with pallets stacked high of goods. No thrills, no frills, stack ‘em high, watch ‘em fly. However, if you’re in the legal service industry, it’s all about high style and lavish surroundings. Ever visited a big law firm on the top floor of a downtown New York highrise where both the views and service is breathtaking? Both businesses operate and make decisions based on the knowledge of their operating model. Do you have a clear understanding of yours?

4: Your Working Capital Model

Indeed, ‘cash is king’. Do you understand your cash flow requirements? As you may or may not know, cash flow is significantly different than ‘revenue’. For example, if you operate a bricks-n-mortar retail store on the main street in your town, you experience first hand the need for cash. You must spend cash to fill your store with product so it’s available when a customer walks in ready to buy. Thus, inventory sucks up a tremendous amount of your working capital. However, if you’re an author who strictly sells downloadable books online, your need for working capital is significantly different. Laptop, pair of pajamas and an account with Amazon can theoretically produce millions of downloads to create a significant cash river.

5: Your Financing (or Investment) Model

Number one roadblock I hear business owners complain about is lack of capital. Yes — it sometimes does take money to make money. But not always. So to understand the difference is key. For example, say you want to build a better hotel chain than Marriott or Hilton. Well, I can tell you this — you’re going to need some serious upfront financing to even stand a chance to pull it off. However, let’s say you plan to change the world by teaching people how to play the ukulele. Buy a video camera, launch a WordPress website and watch your video lesson series at $79 a pop take off like wildfire. Total capital investment? About 500 bucks.

Does business model innovation deserve more love?

business-model-innovationWhen you think of innovation it’s easy to slip into thoughts about some new technology or other.  Of course, that isn’t the be all and end all of innovation whatsoever, and it certainly isn’t the most important kind.

I’ve written previously about the valuable role process innovation often plays in converting new technologies into something useful and valuable in the way we work and behave.  What’s more, whilst buying a new piece of technology is often incredibly quick, changing our processes and behaviours often takes considerably longer.

We have technologies emerging that can fundamentally change the way our organizations operate, but too many organizations are simply dumping these tools onto the same industrial style processes that existed previously.  The social technologies are generally good enough already, it is the organizational processes that will need to evolve for the productivity gains from social business to fully materialize.

Of course, process innovation isn’t the only unloved element of the innovation landscape.  Business model innovation is often just as unloved as the un-sexy sibling of technological wizardry.  A new paper underlines why we should be giving our business models as much attention as our technology however.

The research, led by Wharton’s Raffi Amit, suggests that business model innovation can be especially valuable in challenging times as it usually involves recombining existing resources within a firm rather than expensive R&D.

For instance, the iPod was a change in business model for Apple, because it allowed them not just to make money from selling the gadget, but also from how people are using the gadget.

The researchers propose a mnemonic called NICE (Novelty, Lock-in, Complementaries), by which managers could assess the current state of their business model.

The paper found that the process used by IDEO for designing products could equally be applied to that of business model design.  This results in a five phase process approach being created:

  1. Observe – how do people use your product or service?  What do they like and dislike about it?  When do they use it and how are buying decisions made?
  2. Synthesize – take the information you’ve gathered above and pull it together into something tangible.
  3. Generation – you then generate various models of how you could potentially do business
  4. Refinement – these models are then refined by vigorous thought and analysis
  5. Implementation – before the most robust is then implemented

Of course, this process should never be a one off event but rather an ongoing process of sense and respond.  The paper suggests that to do this requires employees to shift from a silo’d mindset towards something more holistic, whereby they see things from an organizational perspective.

From a managerial perspective, there’s a need to shift away from thinking as design as something that only applies to products towards something that applies equally to business models.

Generally speaking however, organizations lack the capacity internally to undertake this continuous analysis of their business model, and so organizations need to build this capacity in order to stay on top of changes in their environment.

Does your own organization have the capacity to do this?  How important is business model analysis to you?