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BUSINESS TIPS FOR COVID19 DON’T HAVE ONE? THIS ISN’T THE WORST TIME TO START ONE IF YOU’RE SMART ABOUT IT. BUSINESSES DOING WELL EVERYONE IS AFFECTED DIFFERENTLY • E-commerce (with control of fulfillment, or using a 3PL deemed “essential”) • Community gathering tools and software - social media, zoom, forums, etc. • The arts. Everyone in our space is rushing to get online stores up to take advantage of the demand. We’re ahead, because we recognized the importance of online sales from the beginning (it’s literally all we do). • Online education - you got a skill? Sell it! • WEED and other vices. HOW TO START A BUSINESS WHAT TO KNOW BEFORE YOU BLOW A TON OF MONEY • Have a testable idea • Keep it low cost and low impact. Now is not the time for high cost sales. They cost more to test, and people are clutching those purse strings due to job uncertainty. Don’t overwhelm people with your “vision” when you get started. You can expand on your mission later. • Learn to make a website • This is ESSENTIAL, I’ll repeat it louder for those in the back. LEARN TO DO THIS. • It allows you to change things on the fly yourself. Adapting to changes quickly without being beholden to someone else is part of running a business properly. • resource: code academy, they’re of the best for learning how to code. HTML and CSS are relatively easy to learn since they’re static. • Set aside a marketing budget • The golden rule for this amount should be 2x the cost of your product/service in each demographic you’re going to test. • EXAMPLE: I’m selling art supplies. I would want to target the following: Artists, art education, art therapy, home schoolers, and those gifting the product to someone else (parents of artistic kids, for example). If the product that contains these supplies is $25 cost to the consumer, I would want to spend $50 on each of these demographics with solid targeting through fb, ig, snapchat, adwords, etc. HOW TO START A BUSINESS WHAT TO KNOW BEFORE YOU BLOW A TON OF MONEY • BEFORE YOU LAUNCH HAVE AN EMAIL LIST AND A WAY OF GETTING PEOPLE INTO IT • resources: mail chimp, constant contact, etc • Make a “squeeze page” where you get this info out of them up front • Identify SaaS solutions to help take sales, keep track of them, and service customers • Customer service: zendesk, purechat (free, a little chat window on your site where customers can ask you questions directly - this feedback is invaluable) • CRM (take sales and keep track) • subscription: Cratejoy • Ecommerce: shopify • Analytics (keep track) • Google analytics - the realtime view is amazing to help with email drops and identifying leaks in your sales funnel. • Heap analytics HOW TO LAUNCH SKIP THE PITFALLS, THINK BEFORE YOU C AN’T TAKE IT BAC K. • Save money by gauging interest before launching • Post on social media, call in all the favors you possibly can to put this in front of as many eyes as possible • Create a launch page • resource: https://www.launchrock.com/ • Integrate this with your email list software from earlier • KickStarter, indiegogo, etc • Is your idea really good? Like good enough to get other people’s money? You better be damn sure this is the case, and that you can DELIVER ON TIME. Don’t do this if there’s any risk on you delivering. STRUCTURING YOUR BUSINESS DECIDE THE RIGHT PATH • Things to consider when debating different types of company structure • How many partners • Do you intend to take investment? • Taxes, taxes, and TAXES AGAIN. • Your options: Sole prop (once you make more than 20k a year, don’t do this), LLC (can be taxed as an S- corp), corporation. • Corporations are good for investment, and dividing up shares due to that or having multiple partners. LLCs are low cost and offer a lot of benefits • Sole prop is temporary if you expect to make an income • Where are you going to incorporate? • Spoilers, NV and Delaware are some of the most shady and profitable places full of phony residences (you need an address). If you’re shady this is a haven, if you have pride in your business (no judgement, desperate times call for desperate housewives) - do it where you live or where you’ll have to move to in order to scale. Think I wanted to leave SF? No ma’am. OPERATIONS A BAL ANCE BET WEEN REALIS TIC EXPECTATIONS AND PUSHING S TANDARDS • Identify your KPI (key performance indicators) • In the beginning this should be SALES, whatever is directly tied to revenue. Don’t fool yourself, commitments can’t be cashed at the bank. • KNOW YOUR MARGINS BASED ON KPIs • How much can you spend on advertising and still turn a profit? Break this down per item sold. For example if I’m selling 10 dollar bracelets and they cost me 2 to make (labor and product) and 5 on ads to sell one, I bring home 3 bucks per sale. This doesn’t allow a lot of room for increases in costs. It’d be a good idea to reevaluate your price point, or see if you can cut costs somewhere to give you more room. OPERATIONS • Outsourcing • Find companies, people, friends, etc that can handle things you’re not good at, or offer you a facility that would be incredibly cost prohibitive to have yourself. In our case, it’s our 3PL (3rd party logistics) facility. We outsource all of the storage, kitting, and fulfillment to a warehouse facility so we don’t have to worry about hiring, overhead, insurance, liability, etc. • Never expect an outsourced company to represent you in the way you’d do it yourself, but this can be somewhat avoided by making sure your partner has a vested interest in your success. For us, if our warehouse incorrectly packs our boxes our customers will cancel or need to be reshipped items at the warehouse’s expense. We pay the warehouse a set amount per box that’s packed, if our numbers go down, so do their invoices. At one point we partnered with who we sourced art supplies from, this gave us a LOT of leverage. If they screwed things up (which they eventually did) they would lose not only the pick and pack rate per box, but also revenue on the products in the boxes since we would order less due to cancellations. HOW TO SCALE LET’S BLOW THE ROOF OFF THIS BITC H • Online marketing • fb, IG, snapchat, and Pinterest are the largest and most powerful in terms of targeting and reach. • Retarget people • Website visitors • Added to cart • Split testing • Your ideas might be great, but it’s not always what you think will do well that does. Resource: Optimizely • changing a button color can increase conversion rates by a dramatic amount. HOW TO SCALE GO FAS T, BUT DON’T LET IT GET AWAY FROM YOU. • In the beginning you need to be a direct response marketer - spend a dollar to make more than that. • Let your sales numbers and analytics dictate how to adapt your sales funnel. Smart traffic routing for certain demographics can be very powerful to close sales. • Different sales copy and images for different demographics • Different landing pages • Always keep in mind where the roof is (how much you can sell) and have means in place to take advantage of demand when you sell out • Waiting list • Launch a similar product you can rush out the door (we’re currently doing that with special edition boxes) • How many people can you service with your current resources? How do you get more of those resources quickly and easily. This can translate into writing a handbook for static positions like customer service, accounting, etc. If you have an online marketing campaign that is spending 100 a day to make you 1000, how can you spend 1000 a day? Look into lines of credit, look into credit cards (points baby), possibly look into investment (but be wary). HOW TO DEAL WITH COVID19 OR ANY DOWNTURN OF THIS MAGNITUDE COVID 19 PREP AND S TRATEGIES • I need to start with something that has become super important to me personally, maintaining your mental health and recognizing when panic isn’t serving you. We’ve weathered a lot of storms in 5 years - from moving warehouses on a VERY tight timeline to scrambling to replace products when vendors have shorted our orders or didn’t deliver on time. That’s child’s play compared to this pandemic. However, going into a panic only distracts and doesn’t demonstrate leadership if you’re part of a team. COVID 19 PREP AND S TRATEGIES • Find a way to allow your customers to get more value out of what you offer. If it’s a product, come up with content around it. If it’s a service, find a way to provide that service through online means. That sounds great and all, but what if my company needs the person physically present? • Let’s say it’s a carwash. You start a social media presence (growing rapidly right now across the board, plenty of opportunity if your content is good and you can distribute it - I’ll get into that in a minute) for car lovers about how to take care of their car at home or whatever. If you’re a hairdresser put out content about how to cut your own hair. Figure out a way to get these people signed up for your email list, this will be a valuable asset later. The content is the bait for the email list. The content will need to be valuable and relevant to your business. Faking it won’t work here. Once you have a way of prospecting people by providing value you can reach out to them later when your doors are open. COVID 19 PREP AND S TRATEGIES • Engage your customers through content that makes it hard to give up the product or service you’re offering. For example if you’re learning how to make art and they’re two lessons away from finishing they’re more likely to stay on. Make this content FREE, but the product essential. • Figure out a way to re-engage past customers to bring them back. They might not buy from you now, but if you’re putting out stuff people want to consume digitally you’ll be on their radar when you’re ready to resume business. • Get this content out through your email list, through your social channels (try to make it something people will want to share aka viral or valuable info people want to share with their friends and family) • Depending on your financial situation throwing a little marketing money at it to give it a jump start can save you a lot of time seeing if your approach is resonating. COVID 19 PREP AND S TRATEGIES • KEEP LIQUID CASH ON HAND • Cash is king, and it will be what gets you through this • Be very conscious of how you’re spending every dollar. • Keep a close eye on your marketing spend • Don’t take out debt if you don’t have an immediate way to pay it back. You do not want to compound your cash flow problems. • Don’t pay your commercial leases if you don’t have to. Try to work something out with your landlord directly. If they play hard ball, don’t forget you’re the one who pays the rent. Most commercial spaces are really difficult to go through the act of getting your customized space back to a rentable state and landlords know this. If losing the space will destroy your business don’t go down this road. If it’s your office and you recently realized “oh shit people can just work from home”, let the space go and enjoy the addition to your bottom line. • Start thinking about who your essential team members are. Who can be let go, who can survive a hit to their paycheck. Hopefully it doesn’t come to this, but you don’t want to be distracted by other aspects of the business and not have a very clear logic based plan for this. IE if you hit xxxx in the bank, then you lower pay across the board by xxxx.