Category Archives: business building

Are you Keeping Up? Track your KPIs

Small businesses, just like mega-corporations, need to keep a pulse on whether they’re on the trajectory toward meeting their goals. Key performance indicators (KPIs) are tools that can enable them to do that.

What are Key Performance Indicators?

KPIs are measurable values that demonstrate how effectively business activities are helping a company achieve its objectives. By measuring defined criteria, they help gauge performance. One company’s KPIs may vary significantly from another’s depending on their industry, size, where they are in their business life-cycle, their location, what they want to accomplish, and other factors.

How Can KPIs Help Your Small Business?

KPIs provide a clearly defined way of assessing the progress a business is making toward its strategic or operational goals. KPIs link to target values that determine whether an activity or area of operation is or is not meeting expectations. When reviewed on a monthly, quarterly, or semi-annual basis, KPI results can help a company identify areas of weakness and enable it to make adjustments before those shortcomings result in missing critical business objectives.  

 

Examples of KPIs

Some examples of KPIs that a business might use to monitor its effectiveness include:

Marketing KPIs

Marketing KPIs like those below can shed light on how effectively and cost-efficiently a business’s marketing and advertising efforts are contributing to reaching company goals.

  • Number of unique website visitors
  • Number of guest posts published on industry blogs
  • Cost of new customer acquisition
  • Number of new email subscribers
  • Number of whitepaper downloads

 

Sales KPIs

A business might use various KPIs to help determine if sales efforts are meeting expectations for prospecting, closing, and upselling.

  • Number of new leads
  • Number of new customers
  • Monthly revenue per customer

 

Product KPIs

KPIs related to products can help a business monitor potential gaps in meeting target market needs, quality issues, and production inefficiencies.

  • Cost per unit
  • Number of customer issues or complaints
  • Number of product returns

 

Financial KPIs

Financial KPIs can help a company track if it is growing its revenue at an acceptable rate. They can also help determine if product/service pricing and expenses are in line.

  • Revenue growth rate
  • Gross profit margin
  • Net profit margin
  • Cash flow

 

Customer Service KPIs 

KPIs that measure customer service activities can help reveal how well and how efficiently a company is serving its customers.

  • Average time per customer call
  • Number of repeat customer calls
  • Customer retention rate
  • Customer satisfaction rating (perhaps through an online customer survey)

 

The list above isn’t exact nor exhaustive; a business might track different or additional KPIs based on its unique situation.

Tips for Establishing KPIs

Before a business can decide on its KPIs, it must first have clear goals—for instance, “for 2018, increase service revenue by 4 percent over 2017” or “increase net profit by $100,000 this year.”

KPIs must be:

  • Relevant to the business goals
  • Specific (have a target value)
  • Measurable
  • Time-sensitive
  • Achievable (not outside of the realm of possibility)

Fortunately, if you aren’t familiar with goal-setting or working with key performance indicators, you don’t have to go it alone. Our SCORE mentors have experience in all aspects running a small business, and they are here to help by providing guidance, input, and feedback. Contact us today to schedule a time to talk with a mentor who can help you develop your KPIs and stay on the road to success.

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Back to the Basics: What is a Business Plan?

If you’re driving cross-country to a destination you’ve never visited before, would you want to leave home without your GPS?

Probably not.

However, new business owners sometimes make the mistake of accelerating at top speed to launch their companies without having a business plan to guide them.

A business plan serves as your roadmap. It describes your objectives and the strategies you’ll use to achieve them. Like a GPS, it offers assistance to help you get to where you’re going. And like a GPS’s directions—which change depending on traffic conditions, detours, and other unexpected circumstances—a business plan is a flexible tool. As you encounter market demand changes, new competitive pressures, altered regulatory requirements, and more, you can revisit your business plan and make adjustments to reset your course.

What does a good business plan cover?

What a company includes in its business plan depends on the nature of its business, whether it wants to pursue funding, and other factors. Some companies might find that a simple two-page business plan provides enough direction while others will need one that’s far more extensive and detailed.

The following elements are commonly found in business plans:

  • Executive Summary
  • Business Details
  • Market Analysis
  • Management and Organization
  • Description of Products and Services
  • Marketing and Sales Strategy
  • Financial Projections
  • Supporting Data

 

Executive Summary

This section of a business plan summarizes what your company is, what it does, where it’s located, and its mission. You might decide to include an overview of your leadership team, staff, finances, and growth objectives.

Business Details

This includes detailed information about your company and the problems it solves for its customers. In this section, share about your business’s competitive advantages (e.g., team expertise, use of advanced technology, etc.)

Market Analysis

To complete this section, you’ll need to do some research to learn about your target market and industry outlook. This is where you’ll identify what your competitors are doing, the market challenges you anticipate, and how you intend to successfully compete in your market.

Management and Organization

This section explains how your company is structured and managed. Will you operate as a sole proprietor, partnership LLC, or some form of corporation? It should also share about the people who are running your company, including their level of experience, education background, and skills they bring to the table.

Products and Services

In this part of your business plan, share details about the products and services you offer. How do they benefit your customers? Are you safeguarding your intellectual property by applying for patents or copyright protection? What is your research and product development process? What is your pricing strategy?

Marketing and Sales

Describe your strategies and tactics for attracting new and retaining existing customers. How will you reach your target audience and what does your lead generation process look like?

Financial Projections

This portion of the business plan has a two-fold purpose. It’s for your own benefit (to help you establish your financial goals and expectations) and for potential lenders who want to assess how well your business might perform financially. Within this section, businesses often include sales and income projections, an expense budget, cash flow statement, balance sheet, and break-even analysis. Graphs and charts can be particularly helpful in this section to aid understanding and highlight key information.

Supporting Data

Having an appendix at the end of your business plan will allow you to provide supplementary documentation and information, such as credit history, resumes, patents, licenses and permits, contracts, product guides, or items specifically requested by a lender or investor.

Where to Find Help in Developing Your Business Plan

You can find many online resources that offer business plan templates. For example, the Small Business Administration has a Build Your Business Plan tool, which provides a step-by-step guide for creating a business plan. Also, SCORE has a downloadable Business Plan Template for startups. As you use these tools to get started with your business plan, consider reaching out to a SCORE mentor for guidance and feedback, too. With experience in helping business owners in nearly every industry start their companies, our mentors can offer valuable insight as you develop your business plan and use it as your company’s GPS to success.

 

Your Year-End Checklist: Items to Review with Your SCORE Mentor

As 2017 winds down, it’s time to think about what’s ahead for your business in 2018. The best way to start is by reflecting on what went right—and not so right—for your company over the past year, and considering where opportunities lie in the new year.

Fortunately, you don’t have to go it alone. SCORE mentors are here to serve as sounding boards and advisors as you evaluate your business and plan for the future.

Here’s a checklist of essential items a SCORE mentor can help you assess:

  • Your business plan (road map)

It’s rare that a company writes a business plan that completely stays the same over time. With so many internal and external influences, your company’s procedures, goals, and objectives are bound to change. Now is the perfect time to revisit your business plan and update it, so it accurately reflects the roadmap you’re envisioning for your business in 2018.

  • Your budget

Take an objective look at your financials (including comparing your actual revenues and expenses to those that you budgeted in 2017). Use that information to identify discrepancies that need further analysis and to realistically forecast your budget for 2018.

 

  • Your marketing strategy and tactics

Consider how effective your efforts have been throughout the year. What campaigns and activities have provided the most ROI and what has fallen flat? Are you on the right social media channels to reach your target audience? Identify your successes and failures so that you can develop a solid marketing plan for the upcoming year.

 

  • Your products and services

Will it make sense to expand or enhance the portfolio of products and services that you offer? Consider what customers have been asking for and market trends. Also, identify any products and services that are failing to sell or that sell but aren’t profitable. You may want to consider removing them from your offerings.

 

  • Your market

Sometimes the difference between the success and failure of a product or service can lie in reaching the right prospects. Are you targeting the ideal market segments in your marketing and sales efforts? You may find you need to change your focus or extend your brand’s reach to obtain better revenue opportunities.

 

  • Your systems and processes

Your business’s profitability can depend upon how efficiently you run your company. Are you able to keep up with sales inquiries? Are you able to fulfill the demand for your products and services? If you’re having issues with these and other aspects of running your business, you may need to implement (or fix) processes and systems that enable you to operate your business more effectively. Or you might discover you need to outsource some tasks or hire employees.

 

Owning a business requires an open, objective mindset and a willingness to adapt if you want to put it on a trajectory of success. SCORE mentors can help you down that path by providing insight and guidance as you review your business’s past performance and goals for growth. Mentoring is free, so there’s no reason not to take advantage of SCORE volunteers’ expertise and experience in all aspects of starting and running a business. Contact us today.

 

Maine Client Named SCORE Outstanding Young Entrepreneur for 2017!

 

Tristan Corriveau of Scarborough accepted his national award for Outstanding Young Entrepreneur with a boyish grin. 

“So, this is really cool!” he said.

The 2017 SCORE Awards celebrates the best in small businesses from across the country and honored Corriveau and his SCORE Maine mentor, Donna LeBreux for their work in launching Corriveau’s innovative business, The One Gallon Soap Company. 

 The One Gallon Soap Company with its environmental mission, produces liquid hand soap made from recycled bars of hotel soap.

Corriveau started his company in 2016, inspired by checking out of a hotel room and realizing he was leaving a nearly entirely unused bar of soap behind. After he discovered over two million such bars of soap are discarded by hotels every day, Corriveau’s passion for the environment drove him to figure out a way to repurpose them. He got to work experimenting, partnering with the Press Hotel in Portland and working with students at the University of Southern Maine (USM). His efforts led to a grant from the Libra Future Fund, which enabled The One Gallon Soap Company to move forward in its mission to perfect its process for recycling the used soap.

The aptly named One Gallon Soap Company exclusively packages its 100% recycled, premium liquid hand soap in gallon jugs. Selling soap by the gallon enables the company to sell the same amount of soap as other companies while only using one-tenth of the number of bottles.

Corriveau credits his SCORE Maine mentors, LeBreux and Chuck Grossman, for their roles in helping him start and grow his company.

“In every moment of doubt, frustration, and confusion, my mentors have stepped up and pushed me, listened to me, advised me, and cheered me on. They’ve been key to The One Gallon Soap Company’s success. It’s a privilege to be a part of SCORE.”

Corriveau’s mentors connected him with USM to identify a scalable method to sterilize used soap and facilitated valuable local partnerships. Through meeting with him about every two weeks (and sometimes more if there’s a particular issue to address), they continue to provide guidance and insight about finances, marketing, and more.

Lead mentor LeBreux thinks that Corriveau’s award was well deserved.

“Tristan encompasses the success characteristics of some of our most successful entrepreneurs. He has a passion for his business, he has intensity, and he has commitment to his ideas,” LeBreux said. 

We hope you’ll join us in congratulating Corriveau on his business success and celebrating how SCORE mentors can help entrepreneurs realize their dreams!

 

With experience in all aspects of launching and running a small business, SCORE mentors offer valuable guidance and feedback. If you need help starting a new business or overcoming a daunting challenge in your existing business, contact us today.

 

Is It Time For Your Business To Hire?

If you’re like many small business owners, you started out as a  “solopreneur”—a one-person bands who does it all. However, as your client lists and product or service offerings grow, there comes a point where you can’t do it alone.

Some signs that may indicate it’s time to expand your team include:

  • Tasks are slipping through the cracks.
  • You’re missing deadlines.
  • You’re making silly mistakes.
  • You’re finding it difficult to stay organized.
  • Customers and vendors are getting frustrated because you don’t respond promptly.
  • You’re working constantly and beginning to feel burnt out.

If any combination of the above sounds familiar, consider delegating some work. Whether you decide to add employees to your payroll or work with independent contractors, by making others a part of your team you’ll be able to focus on what you do best and ensure other responsibilities don’t go undone.

So, should you hire employees or outsource work to independent contractors? Both have their advantages and potential disadvantages.

Pros Of Hiring Employees

  • Because they’re part of your business, they stand to gain a stronger understanding of your business’s internal processes, needs, and expectations than an independent contractor might have. Therefore, they will know how to do their work and understand how that work fits into the big picture.
  • The hourly rate you pay them will probably be less than you would pay to a contractor.
  • You have more control over the work. As an employer, you establish how you want tasks done, what technology and tools to use, office hours, etc.
  • When your workload increases, you have someone who is readily available to assist. Your work is their priority; they aren’t dividing their working hours between you and other clients.
  • If you need to step away for a day or go on a week-long vacation, you have someone you can rely on to keep the business operating while you’re gone.

Cons Of Hiring Employees

  • In addition to wages, you may also be required to provide certain benefits to employees. That can add additional cost to your bottom line.
  • You add the complexity of payroll to your business. Certain paperwork is legally required and you’ll need to withhold employees’ federal, state, and local taxes; social security; and Medicare from their paychecks.
  • Even if your business experiences a drop in sales or profitability, you still need to pay your employees their wages and salaries.
  • If you discover an employee isn’t a good match for your business, terminating that worker might not be a simple process.

 

Pros Of Hiring Independent Contractors

  • You don’t have to commit to paying them regular wages or a salary, nor are you required to provide benefits. So, even though you’ll likely pay them more per hour than you would employees, they could save you money overall.
  • If things aren’t working out with an independent contractor, you simply don’t have to work with them anymore (after any contractual obligations are met). You don’t have a termination process to adhere to as you would with an employee.
  • It brings in someone with the specialized skills you need for a particular area of your business. That may mean little to no training necessary.
  • They are responsible for their own permits and professional licenses.

 

Cons Of Hiring Independent Contractors

  • You lose some control over the work. Independent contractors typically have the autonomy to work from where they want, use the tools and technology they want, and work the hours they want.
  • Independent contractors often work remotely, so it may be difficult to know exactly how work is progressing.
  • Because they serve multiple clients, independent contractors may not be able to meet your deadlines as quickly as you would like.
  • Unless you have an agreement with an independent contractor that explicitly states it, you may not own the copyright for works that an independent contractor creates for you.

 

To make sure you make the right choice for your business, consider the type of work you need help with, the amount of work you need to delegate, whether the work is recurring or sporadic, how much control over the work process you’re comfortable with, and the legal and financial impact your choice will have on your business.

 

A SCORE mentor can serve as a valuable sounding board and source of insight as you begin working through all of that. Contact us today to schedule free counseling from our volunteer mentors who have knowledge and experience in all aspects of starting and running a small business.