Contents Of A Business Plan - Key Information Required By Banks

Many small business owners and entrepreneurs produce business plans quickly and without much thought or analysis. While having one is critical when seeking loans from a bank, the actual contents are even more important. This is often over-looked as most business owners are not familiar with what banks are really looking for.

The contents of a business plan are critically important to the banks' lending decision process. It's not enough just to have all the headings covered off in the table of contents.

So what are banks really looking for? In this article, we will discuss the important of market and competition analysis in the contents of a business plan. Both of which are critical to a banks' decision-making process.

Demonstrated understanding of the key target market

The contents of a business plan include a detailed analysis of the industry and market segment within which the business operates. Beyond merely providing the estimated size of the market, and market share, banks look for analysis on the relevant market.

The following list of questions will be asked in one form or another by a potential lender to gain an understanding of the market segment the business operates in:

What is the size of the market - what geographic area does it cover and what is the estimated turnover of the whole market in the relevant area?

Where is it in its growth cycle, ie. Startup, mature, declining?

What is the business' estimated share of the market?

How much will it cost for the business or competitors to enter that industry, ie. What are the barriers to entry?

How competitive is it?

Is it regulated?

Is their demand?

Who are the business' direct and indirect competitors?

A potential lender will also focus on a detailed assessment of the business' ability to:

Attract new customers

Attract and retain good employees

Fully utilize operating capacity

Reach its target customers

Retain existing customers

These attributes are the key success factors for that business to operate successfully in their target market and are usually included in the Industry and Market Analysis section.

Understanding and analyzing the competition

Banks will keenly examine and question the contents of a business plan covering competition analysis. The competition analysis section needs to show that the business owner has an understanding of their business strategy and model, and how they might respond to any competitive behavior in the market place.

The content needs to identify the strengths and weaknesses of top competitors and identify the needs in the customer base that are not being fully met by the competition.

Getting an understanding of how competitors are performing financially will also help support estimates made about the returns a business might make in the market it operates. This feeds into the financial section as one of they key factors that will form the basis of realistic sales projections.

This analysis will also identify the opportunities and threats to the business. Opportunities that can be capitalized on and incorporated into a well articulated business strategy, and threats that need to be mitigated or managed.

What perspective do banks take when assessing the merits of a business plan?

Banks make a fixed return on loans made to small businesses, unlikely equity investors who take the first loss risk, and all the upside profits as recompense for that level of risk. This is why banks will always focus on the downside risks to a business in their assessments of the contents of a business plan.

Business owners and entrepreneurs need to highlight and address the existing and potential risks to their business in the contents of a business plan being presented in support of a bank loan application. Addressing and mitigating risks in this document will reassure banks that management is fully aware of the risks involved and have provided reasons why they are acceptable or show how they will be minimized.

What to Do When Business I s Slow

Anyone in business knows that there will be inevitable slowdowns; times when customers disappear, sales decline, and overall activity drops off. Whether or not it is a seasonal slowdown or an overall economic decline, your ability to survive depends on how you react when your business stagnates. This is not a time to panic, but rather it is an excellent opportunity to take stock of your overall business. It is a time to evaluate what is working and what is not, a chance to formulate new goals and objectives, and an occasion to set new plans in motion. There are several areas that business owners should concentrate on when business slows:

Marketing:

It is often the first thing that is cut when times are tough, but realistically marketing should receive even greater focus when things are slow. Increasing your visibility while your competition is decreasing theirs makes you poised to capture an even larger market share when things begin to recover. Besides, when customers are disappearing, the last thing you want to do is to stop communicating with them. It may not be possible to allocate large sums to marketing, but there are inexpensive and creative ways to stay in touch with your audience. For example, you can get free publicity from local news sources by issuing press releases for noteworthy occurrences relating to your business. The hardest part of this is coming up with an angle, but once you do, the attention from local media is invaluable. Also, if you are an expert at something, and most business owners are, why not host a workshop or seminar. It is a great way to educate your audience about what you do, and it also allows you to get face time with potential new customers. Marketing should always be high up on your to do list. Not only does it keep your business visible, but it forces you to constantly think about the benefits and positives associated with your business; something that can help any business owner through tough times.

Networking:

Although networking isn't everyone's cup of tea, and when you are stressed over a business slowdown, these events are the last place you want to be, it is important not to hibernate or isolate yourself. These events are often a good source for sales opportunities and you just never know what kind of collaborative relationships you can form with other like-minded people. Expanding your contact list and connecting with potential leads is not a bad way to spend a couple of hours. But remember, this is not about collecting a pocketful of business cards and calling it a day, this is about quality over quantity. It is much better to take the time to get to know a few individuals on a deeper level then to have passing contact with the whole room. Also, to be successful at a networking event, you simply have to remember the basics of any relationship.

You need to listen more than talk, you need to be focused and present, and you need to truly be interested in what the other person is saying. By doing these things, it in turn makes you interesting as well, and when it's your turn to talk, make sure you have your elevator pitch prepared. This means that you have to be able to explain a little about yourself and what you do in a clear and concise manner. When the event is finished, don't just toss the business cards you collected in your drawer and forget about them. These are potential new contacts or customers and you need to follow up with a "great to meet you" note, or if there is true business potential there, an invitation to meet over coffee or lunch. Networking is not hard; it's just a matter of putting yourself out there, because you just never know who you might meet.

Social Media:

Just like marketing and networking, social media is an excellent area to focus your attention when business is slow. It is an inexpensive way to connect with a much larger audience then would normally be available through traditional media. Sites like LinkedIn, Facebook, Twitter, and Pinterest allow you to up your customer service quotient by giving you the opportunity to listen to your audience, determine what they want, and offer them solutions. Basically, it is all about engagement and content. Today's consumers want an interactive experience with the brands they support and by giving them unique and informative content; you can turn shoppers into customers. Likewise, writing a blog related to your business also ups your exposure. Again, it allows you to connect with your audience, and it ensures that searching consumers can find you on the internet because it spreads your brand across multiple sites therefore increasing your search ranking. Remember, social media really is no longer an option for business owners, but it can be time consuming. Consequently, what better time to give it some attention than when business is slow and you could truly benefit from the marketing push.

Website Development:

Most businesses today have a website; unfortunately, many of them are just bad. It appears that they were created several years ago when having a site became mandatory, and then forgotten about ever since. In truth, in a day and age when nearly every consumer turns to the internet for information about their local businesses, having a sub-par website just isn't acceptable. Giving your site some much needed attention is an excellent way to spend your resources during a slow period. Giving your website an overhaul doesn't have to be expensive or difficult. There are many low cost site builders and content management systems available that make creating a functional and interactive site relatively easy. Just keep in mind that you have a very short time to make a good first impression. You need to consider design. Does the esthetic of the site fall in line with your image and brand? Also, you need to focus on usability. Can your customers find the information that they are looking for quickly and easily? Lastly, your site must have engaging and informative content that is updated and expanded regularly. Creating your website is not a one time job. You have to consider it a work in progress; one that needs to be continuously managed and developed.

As you can see, there are many things that you can do to productively spend your time while businesses is slow. Also, all of these activities will ensure that when consumers are once again ready to part with their hard earned dollars your business will be front and center in their minds.

As web designers, programmers, business consultants, and prepaid card consultants, our group does it all. As our name would suggest, the Coterie Group is a group of marketing specialist, trainers, software developers, funding experts, business coaches, and debit card managers that have been brought together by a common goal; in this case, our goal is to use our knowledge and experience to help other businesses, and start-ups succeed.

We have assembled a talented group of individuals, each with their own specialty, to offer consultative and practical services to help organizations achieve profitability and growth.

Having been entrepreneurs and business owners ourselves, we realize that in order to take an idea from concept, to launch, to profitability, an organization often has to deal with numerous service providers. When you are dealing with several different providers, it can be challenging to get everyone on the same page and it can also be very costly. For this reason, the Coterie Group provides a one stop solution for all of your business needs. We offer business consulting, marketing, software development and programming, design and copywriting services, and training programs. Because we have assembled a team of experts under one roof, we use a collaborative approach to ensure that we tailor our services to meet the unique goals and objectives of every client. Also, because we have been in the trenches of business ownership ourselves, we keep our prices extremely competitive.

Risks Small Businesses Face

Own a small business? If so, be aware of the risks of different kinds. These risks can either be manmade or natural, and they may eventually bring serious damage to your business and may also leave a serious impact on your financial stability and daily business operations.

Following are the risks that your business may face and in this article you will know how to protect your business against these risks.

Acts of God

Storms, floods, fire, earthquakes, hurricanes, tornadoes and other natural disasters are high potential risks. These disasters are unpredictable and may occur at any time and pose as risks to your business.

As a small business owner, you cannot afford to ignore these risks. You need to determine these risks and take a sensible business decision by purchasing business interruption insurance, to keep your business operations moving.

Security breaches

Small businesses face potential threat to data online. For example, data hacked online. Further, the personal data of customers, such as e-mail addresses, passwords, social security numbers, etc., face the risk of being lost, theft or leaked.

You cannot rule out such risk to your business data. However, you can insure against it by purchasing security breach insurance or cyber liability, to protect your business.

Breakdown of machinery and equipment

Your business faces the probable risk of accidental breakdown or failure of machinery or equipment. You may be forced to shut down your business temporarily, if the cost of repairs or replacement of damaged equipment is more. If you are financially unable to bear these expenses, it will ultimately affect your business' profitability badly.

Buy equipment breakdown insurance for this kind of circumstances. This type of insurance protects your business against the risk of accidental breakdown of the equipment. It covers the repairing/replacement cost incurred.

Lawsuits

Small businesses majorly face the risk of litigation issues such as employment dispute, wrongful termination, injury to employees, libel, slander - to name a few. Also, due to your negligence with regard to your products or in business premises, the third party may sue you to recover the damages that they have incurred.

Business liability insurance will protect your business from the risk of legal issues. It covers the cost of litigation, medical expenses in case of injury to the third party in your business premises in an accident or because of a fall.

Insure against your risks

You should be aware of all the probable risks to your business. Identify the risks that may interrupt your business and decide for yourself which insurance coverage suits best for your business.

Purchase a comprehensive insurance package to protect your business against all potential risks. It is better to pay insurance premiums, rather than spending for the liability the risks bring in.

Choose an experienced and reputed insurance broker

Purchase an appropriate insurance coverage for your business, taking help and advice of an experienced and reputed insurance broker. They will look into all aspects of your business and figure out where your business is likely to face risk and then suggest a policy for you. It will not only save your time, but also gives you professional advice.

The IRS Wants You To Make Money With Your Home Based Business

Contrary to what everybody thinks, especially W2 employees, the IRS is your friend. The IRS tax code is designed and set up for promoting small business and home based business. Only five percent of the IRS code is really written about bringing in income for the IRS. The rest is all about expenses and deductions. So 95% is dedicated to reduce your taxes!

It is awesome!

There are a few things that you need to provide the IRS to qualify your home based business, but they are mainly looking for profit intent, consistency and record keeping.

1. Profit Intent is relatively easy to prove. If it's a hobby, like if you're trying to turn your Saturday golf game into a business, that's going to a bit tougher. Home-based businesses like network marketing, setting up a paint company or wedding planner or something, should be pretty easy to prove it's a "for profit" business.

2. Secondly, you need to work your business on a regular and consistent basis. There's no specifics on that but, even four to six hours a week, every single week should be sufficient. Of course, I recommend more than that if you are going to be serious about your business.

3. Lastly, you'll want to keep accurate records to prove that you have income and expenses.

If you keep accurate records of expenses, you can offset other income that you have. The expenses you have from RUNNING your business, such as expenses from your office in your home based business or money spent building your business, doesn't go to waste. You get to write it off. Your marketing, your business cards, your flyers, brochures or anything like that. If you want to RUN a business, you need to use all legal write-offs in your business and that's what will help you, not so much to get profitable right away, but make it worthwhile so that you're not losing money.

My Two Favorite Legal Deductions

My first Favorite legal deduction is the home based business office deduction, which is huge!

For example, if you have a 1,000 square foot house and you have a 100 square foot office, this gives you a ten percent write-off. It doesn't matter whether you're renting or you own your home and have a home mortgage. If your rent or mortgage is one thousand dollars, you get to write off, 100 dollars every month. If you need a new computer for your business, a video camera, software or anything that you use to promote and market your business, it can be written off.

My second favorite deduction may be even bigger. It's your automobile. Currently the business use mileage rate is 55.5 cents per mile. Always check the IRS website or with your accounting professionals, for updates.

Let's look at how this works.

Let's say you need to drive to go meet a prospect or you have to go to the office supplies store. You're going to keep track of all your "business" mileage to and from your business stops. You track ten miles in each direction for twenty miles total. That's $11 that you will deduct at year's end. As long as the initial reason for the trip was business, you can write it off. It will be between you and me if you just happened to stop at the grocery store on the way home. Oh yeah, the food you ate at your business meeting;50% of that can be written of as well!

Other Legal Deductions

If you have a child over the age of 6, they can be employed in your business. You can deduct their wages and they don't have to claim it up to $5,450. Double whammy! It must be a business related activity and not just taking out the trash. They could do filing or database management. Face it, your 6-year-old probably knows how to use the computer better than you anyway!

With the proper planning you can deduct part or all of your vacations. Let's say I am going to New York to meet with a client or prospect. We are going to have a few business meetings and talk about ways to grow our business. I can take my wife and we can do some tourist stuff while we are there. Travel can be written off with the proper planning.

All of your health costs may be able to be deducted.

Again, 50% of all food and entertainment that is "business" related can be deducted.

These are just the tip of the iceberg folks. You need to learn this stuff! If you know what you can deduct, it will help offset the cost of getting your home based business up and running and put you in a NO LOSE, situation. Once you are profitable, you will still need to track your deductions, but it will have become second nature by that point.

There are many books on this subject and your tax professional can help as well. You need to have the right tax person because some will fight you on certain deductions. If they are LEGAL, there is no reason why you shouldn't be taking them. It's all in black and white on the IRS website, so get familiar with it.

Using Your Money For The Monthly Expenses Of Your Home Based Business

I hear people saying that they just can't afford to start a business. GARBAGE! If you are currently employed, which you should be if you are trying to start a home based business, you can afford to get started. All you need to do is change the number of withholding on your w-4 and receive your tax refund in advance.

Dangerous? Not even close. It's your money! Getting a huge refund, once a year, is not a good thing. You are loaning your money to the government. Why not use it to create income for your family? Don't get this money if you are going to be stupid and just buy stuff.

Use it to start a home based business!

I hope this helps show you how to make money with a home based business of your own. It's not that scary and you can "learn as you earn."

Join a team of successful online marketers with a proven system to accelerate your business to a whole new level. With the right team and the proper systems in place, marketing your business and capturing leads online does not have to be that difficult.

Outsourcing For Your Small Business on a Shoestring Budget

We put our heart and soul into our small businesses. They give us freedom, autonomy alongside challenges, heartache and obligation. They allow us to develop skills we want and force us to develop skills we have no interest in. Essentially we become "a jack of all trades" and potentially a "master of none" in our own business, if we don't seek external help through outsourcing at some point of the business growth.

Whether the assistance you need is in marketing, SEO (Search Engine Optimisation), finance & accounting, warehousing or call centre work there is almost always an outsourcing solution to your business needs. Outsourcing certain functions within your business is often the most cost effective way of achieving certain business goals and tasks. Realising the need for a 3rd party to take on the work is half the battle for a business owner. Not taking this step may very well strangle your business at the level of your capabilities denying the business the growth you want to achieve.

1. Don't sign long term outsourcing agreements at the outset.

There are plenty of excellent sales people out there who are trained to tell you what they can do for you and how great your business will be, if only you sign a 24 month agreement. Hiring an expert that asks you for a long term agreement is fraught with potential problems regardless of the quality of their references and sample work.

Ask your potential provider if they will work on a trial basis at an agreeable rate, if the answer is no this may be the first indicator that this person or company won't deliver.

A typical example of this is illustrated in the world of Search Engine Optimisation providers, who as a general rule lock businesses into 12 month contracts with no exit. When you ask why, the standard response is that they don't control Google so they need the 12 months to get results. Whilst they may not control Google they should be able to deliver good short term results - but SEO is a whole other subject.

So as a small business owner what do you do about long term contracts like this?

Ask the expert to back themselves and agree to a month by month contract with a no fault exit for an agreed period. Set clear and agreed expectations of the measurable outcomes and stick to them. If they can't meet your expectations in a trial they won't make you happy and your business grow in the long term.

If you are happy with their performance and confident they will help you grow your business after an initial trial period, you can then negotiate a long term agreement.

2. Don't be afraid of using overseas or online freelancers.

For tasks such as website development, programming, data entry, copy writing and in fact any task that can be easily defined freelancers are a brilliant and highly cost effective solution.

Access to overseas freelancers is usually through a website dedicated to presenting freelancers who are available for work, some of the better known sites include elance.com, freelancer.com.au and odesk.com. Whichever site you choose ensure that the site has a valid security certificate for payments and an easy to use dispute resolution service, even with the best of intentions, things can, and do, go wrong.

These sites provide a secure marketplace for freelancers to pitch for your work. Many freelancers have full time jobs and freelance as a second income, some spend all of their time freelancing. Regardless of who you choose there can be quite a few advantages to using a freelancer, for example:

· They are generally cheaper.

· You can source experts from around the world.

· They work fast as they don't get paid until the work is completed to your satisfaction.

· The skills sets they possess are often unavailable to smaller organisation or in some cases in your country.

3. Communicate with your Experts

Amongst the most common ways that an outsourced expert can become a liability to your business rather than a benefit is when the lines of communication aren't open.

As the client, you need to instigate conversations with your freelancer as soon as you are unhappy, concerned or just have a feeling things aren't going the way they should be. A good freelancer will not be concerned by a client checking up on them, it is a part of the job. Don't put off difficult conversations. The longer it takes for you to communicate a problem the longer the problem has to grow.

Communicate clearly, many outsourcers will have English as a second language and you should ensure you take that into account, likewise bear this in mind when you receive a response, have a cup of tea and consider the way forward before you fire off a rude email in response. Remember the old saying, "Act in haste and repent at leisure"

Not all communications should be negative either, don't forget to communicate the positives. When an outsourced expert is really doing a great job and you are happy, let them know. Outsourced experts are just people and they love to hear when things are going well and will go that extra mile when you communicate the positives.

4. You can (and should) outsource anything

You know your business like the back of your hand and your passion and drive is what will make your business succeed. If you are finding yourself doing tasks that have to be done but don't contribute to the growth of your business then you are working "in the business" rather than "on the business".

Sit down and make a list of the tasks that are essential for your business but don't have to be done by you and investigate outsourcing them, you may be pleasantly surprised. These tasks may be data entry, updating your website, packing and sending of products or bookkeeping or literally any other task you need done, a potential solution exists out there somewhere. Choose the tasks that can be affordably outsourced and in turn free up your time to do the tasks that only you can do.

I believe that outsourcing is a hugely effective way of growing a small business whilst still allowing you the freedom to run your own (now much bigger) show. Outsourcing taps into a huge knowledge base of experience that may not be available in your location and allows your business to benefit from that experience for a fraction of the price of hiring full time staff.

Our online toy store started as a small enterprise in a shipping container in regional Australia, using the tips above and implementing outsouring strategies our business has grown by 400%, our entire supply chain is run from a major metropolitan city and we have the ability to work on the business instead of in the business.

Contents Of A Business Plan - Key Information Required By Banks

Many small business owners and entrepreneurs produce business plans quickly and without much thought or analysis. While having one is critical when seeking loans from a bank, the actual contents are even more important. This is often over-looked as most business owners are not familiar with what banks are really looking for.

The contents of a business plan are critically important to the banks' lending decision process. It's not enough just to have all the headings covered off in the table of contents.

So what are banks really looking for? In this article, we will discuss the important of market and competition analysis in the contents of a business plan. Both of which are critical to a banks' decision-making process.

Demonstrated understanding of the key target market

The contents of a business plan include a detailed analysis of the industry and market segment within which the business operates. Beyond merely providing the estimated size of the market, and market share, banks look for analysis on the relevant market.

The following list of questions will be asked in one form or another by a potential lender to gain an understanding of the market segment the business operates in:

What is the size of the market - what geographic area does it cover and what is the estimated turnover of the whole market in the relevant area?

Where is it in its growth cycle, ie. Startup, mature, declining?

What is the business' estimated share of the market?

How much will it cost for the business or competitors to enter that industry, ie. What are the barriers to entry?

How competitive is it?

Is it regulated?

Is their demand?

Who are the business' direct and indirect competitors?

A potential lender will also focus on a detailed assessment of the business' ability to:

Attract new customers

Attract and retain good employees

Fully utilize operating capacity

Reach its target customers

Retain existing customers

These attributes are the key success factors for that business to operate successfully in their target market and are usually included in the Industry and Market Analysis section.

Understanding and analyzing the competition

Banks will keenly examine and question the contents of a business plan covering competition analysis. The competition analysis section needs to show that the business owner has an understanding of their business strategy and model, and how they might respond to any competitive behavior in the market place.

The content needs to identify the strengths and weaknesses of top competitors and identify the needs in the customer base that are not being fully met by the competition.

3 Reasons to Start Internet Business Today

Starting up a new business involved budget allocation, location hunt, structural development, research and more research. If you are into a conventional business, you probably know how much you ought to struggle to set up your own business. Simply put, the process of setting up an office or business is not the end to your struggle; it is only the beginning. To make sure your business can reach wide customer base, you will have to deploy marketing strategies too. Therefore, setting up a business, small or big, conventionally is going to be very difficult.

Of late, more and more businesses are entering into the World Wide Web for a better business platform, greater visibility and lesser investment. There are several reasons why the internet has become the only virtual marketplace for business that gives you profits in no time. Even if the start-up capital required for your business is not an enormous amount, you can enjoy profits within a very short time.

A lot has been said about doing online business. To many, online business is just too complicated and risky. Moreover, the technicalities are believed to be more cumbersome than anything else. But, businesses that have gone online have actually fetched rewards and the experience is convenient, comfortable and much easier to handle.

If truth be told, the most complicated part of starting any business, a new journey, is to take a call. It is easier to give excuses for a business that is not happening, but it is difficult to take a decision and make it work. If you are considering online business, here are 3 top reasons why it will prove to be the most beneficial venture for your business:

Reason#1: It Just Takes A Few Hours

Starting any physical business takes up a lot of time; from several weeks to several months, or even a year. It is very difficult to calculate the correct timeframe for setting up a business. Because the time to set up is too long, it will take longer to earn profits from your physical business. But, if you take the business online, it takes only a couple of hours to accumulate everything and start the business. Although it takes some planning and investment at the beginning, it is nothing compared to the labor required for physical business. If you have planned everything beforehand, within a few hours you will see your business going online.

Reason#2: You Don't Need Huge Capital

To start off a physical business, you need more than a few thousand dollars in today's market. However, with an online business plan, you need very little investment. All you need to have is time to monitor your business presence on the internet. Money will play a key role when you deal in some physical goods; you will have to pay for the same. There are several information products and services, telecommuting profiles and other businesses that can start without any investment.

Reason#3: You Can Start Earning Immediately

If you are totally focused on the online business, the best thing is that you will start making profits from the first day itself. Profit is the most awaited incentive to business, and when it happens in less than 24 hours of starting a business, it is exactly what you wanted.

The Three Biggest Lead Generation Mistakes Small Businesses Make And How To Overcome Them

If you've been looking for simple, proven and tested, step-by-step methods for generating more leads for your small business, then this article may just have the answer. Firstly, I want you to stop for a moment and think about all the advertising you've seen over the past week.

How many of those actual ads can you name? Researchers estimate that over the past seven days, you have been exposed to as many as 117,000 ads based on national averages. So out of 117,000 ads, how many can you name?

If you're fairly attentive, you may be able to come up with 3 or 4 specific ads... but I'll bet that's because you probably see those ads over and over... week in and week out. Let's face the facts... repetition works. When you see any advertisement multiple times every day you're bound to eventually begin to recall the ad. But now answer this question.

What few ads you do remember, how many of their products or services have you bought? Because I have a passion for marketing I tend to go online and research for well accepted ads. Take for example a series of ads from online trading company E*Trade which uses babies to promote their products. These have a massive audience on both TV and YouTube. They even had one during the Superbowl. I think they're a scream. But... I don't have an E*Trade account. Never have, never will. Why should I?

What benefits do they offer me as a potential buyer of online trading services that any of the hundreds of other stock trading services offer? See my point? Does a smart-aleck, wise-cracking baby have any relevance to online stock trading whatsoever? Of course not. So why does E*Trade continue to make these commercials? Believe it or not, there is a reason... and by the end of this short presentation, you'll fully understand what that reason is.

Businesses today are led to believe that all they have to do to build a successful business is create some type of attention-grabbing form of marketing and they will generate leads at will. Nothing could be further from the truth. And that's just in the area of marketing. What about generating fast cash flow? EVERY small business needs to generate fast cash flow. So how do you do that as a small business owner? What about generating profits? Generating more cash flow is great... but not if you don't get to put any of it in your pocket at the end of the day. How would you like the answers to all of these problems?

In this article I am going to reveal to you the three biggest lead generation mistakes small business owners make... and outline how you can overcome them.

Here are the three mistakes. Mistake #1... they fail to get professional help. Mistake #2... they don't know the fundamentals required to successfully market their business and attract as many new clients as their business can handle. And mistake #3... they have no idea how to use their marketing to generate immediate cash flow. Let's explore these three in depth, and show you how you can easily and systematically overcome each one of them.

Mistake #1... small business owners fail to get professional help. Can you name me just one professional athlete who does NOT have a coach? There aren't any. Tiger Woods actually has a total of 9 coaches guiding him in everything from his golf game to his financial investments. But do small business owners really need professional help? Remember the TV ads we previously discussed? Those ads are created by "professionals." Unfortunately, those professionals have no clue what they're doing. Everything they're doing in marketing and advertising today is wrong! But let me prove that to you right now.

If you currently use any form of marketing such as a print ad, brochure, postcard, flyer... or for that matter... your company website, take it out and look at it carefully. And if you don't have any form of marketing right now, take out a sheet of paper and sketch out what you think would make for an effective ad for your business. It doesn't have to be anything formal or fancy... just create a basic outline of the ad and where you would locate the various elements on the page.

Now that you have your ad... or a mock up of your ad sitting in front of you, let me provide you with the little known secrets that produce more leads than your business can handle. 99% of all marketing professionals DON'T know the lead generation secrets I'm about to reveal to you. This information is so powerful and compelling, it will position you in the top 1% of all lead generation professionals today. This example will show you why every small business owner should acquire our step-by-step roadmap as they start to generate leads for their business.

Here's what a true marketing professional will know... and help you implement into your marketing. It's known as the "marketing equation." This marketing equation will let you quit competing on price... and let you start selling your product or service for what it's really worth. You will drive in more leads and increase your advertising response by 10 to more than 100 times. You will convert a higher percentage of those leads and dramatically increase your number of sales. You will get a bigger bang for your marketing buck. The bottom line is this you will literally create a profit faucet that you will have TOTAL control over.

First, you MUST understand what marketing is supposed to do. Its purpose is actually three fold. Its first job is to capture the attention of your target market. Second, it must give them the hope that reading or listening to your marketing will give them enough information to help them make the best decision possible when buying whatever you sell. In other words, train and teach them how to recognize the true value of your product or service... and conclude that you... and you alone... offer the best value versus your competition. Marketing's third job is to lower the risk of taking the next step in the buying process... and if necessary... continue to educate the prospect regarding the value you offer.

Marketing that accomplishes these three objectives will result in your prospects and customers coming to one single conclusion, that they would have to be an absolute fool to do business with anyone else but you, regardless of price. It's estimated that as many as 96% of all small businesses fail within their first 5 years. The main reason for this tremendously high failure rate has to do with the lack of expertise when it comes to generating leads and making the phone ring.

Most small businesses don't know anything about those three things that marketing is supposed to do. But there's also an additional problem to consider. Most small business owners use a tactical marketing approach instead of a strategic approach. Let me explain.

Running an ad in the local newspaper... sending out an email or direct mail letter... airing a radio or TV ad on a local media station are all examples of tactical marketing. Now don't get me wrong... the newspaper, radio or direct mail can be successful marketing channels... If your marketing message is powerful and compelling. But that's the problem... the message is the strategic side of marketing... and yet, it's the most neglected.

This distinction between strategic and tactical marketing is huge and one you need to be acutely aware of anytime you start talking about generating more leads. Many companies mistakenly assume that when you talk about lead generation, you're automatically talking about tactical lead generation... placing ads, sending out mailers, joining a networking group, attending tradeshows, implementing a prospect follow up system and so on.

They fail to realize that the strategic side of the coin, what you say in your marketing and how you say it is almost always more important than the marketing medium where you say it. If you fail to make this distinction, then you risk becoming jaded towards certain forms of marketing and advertising that should be a part of your tactical plan, but you eliminate them from consideration because they haven't worked for you in the past.

When lead generation results are less than optimal, small business owners tend to almost always blame the marketing medium... like the newspaper the ad ran in or the postcards they sent out. They blame the tactical part of the plan... without any regard for how good or how bad the strategic messaging in that marketing piece was. People often say things like, "we tried radio and it doesn't work for our kind of business," or "we sent out 50,000 pieces of direct mail and only generated 3 orders. It just doesn't work."

Just because it didn't work, don't assume that it won't work. Most people don't have the evaluation skills or the know-how to judge whether poor marketing results from poor strategy or poor tactical execution. This is where our step-by-step roadmap can generate more leads than your business can handle.

For example, most small business owners rely heavily on platitudes in their marketing. They say things like - we have the lowest prices... the best service... we're family owned and operated... we offer convenient hours... the best value... not to mention that we've been in business since 1431 B.C. Look at your own marketing that I asked you to acquire or create earlier. How many platitudes did you use in your own marketing?

By the way, this is NOT your fault. Small business owners have been conditioned to think this is the proper way to market their businesses... since most advertising follows this same pathetic marketing formula... including the Fortune 500 types.

As human beings, we're all after just one thing when we buy something... the best deal! Unfortunately, when you use platitudes in your marketing, there's absolutely no way to tell who is actually offering the best deal. Everyone says they have the lowest prices, the highest quality and the best rates. So who do you believe? There's only one way to know... and that's to research every single business that offers what you want to buy. How many of us have the time or patience to do that?

So most of us just automatically assume that everyone is pretty much the same, and therefore we default to calling on the business that offers us the lowest price. When you can't communicate the true value your business offers, you're doomed to forever compete on price. Our marketing equation will change all of that for you forever. It's going to be the backbone of your strategic marketing plan. It's the foundation on which everything else we build for you is based. Let me give you a quick overview and then spend some time going through it with you in detail.

A proper marketing equation has four main components. First, it must interrupt your prospects. It must get your qualified prospect to pay attention to your lead generation marketing. Simple enough to say, but a lot more difficult to pull off in real life unless you understand what you're about to learn here. The interrupt is done through your headline if your marketing is in print... or it's the first thing you say if your marketing through radio or TV. The second component is engage. Once your prospect is interrupted, it's critical you give your reader the promise that information is forthcoming that will help the prospect make the best buying decision possible. In other words, it must help facilitate their decision to pick you over anyone else. This is the job of our subheadline.

The interrupt is our headline that highlights a specific problem that your prospects are looking for a solution to... and the engage is our subheadline that promises them that you offer a solution to the problem we mentioned in our headline.

The third component you need to include is 'educate'. Once you have interrupted and engaged your prospect, you have to give information that allows them to logically understand how and why you solve the problem they're facing. This is accomplished by giving detailed, quantifiable, specific and revealing information. This is typically done in the body copy of your ad. When you educate, you need to reveal to your prospects the important and relevant information they need to know when making a good decision, and that your business... and yours alone... provides it to them. The interrupt and engage hit the prospects emotional hot buttons. Educate is the logic they need to justify picking up the phone and calling you.

The fourth and final component of the marketing equation is your offer. Now that you have interrupted your prospect based on problems that are important to them... engaged by a promise of the solution... and they've examined the educational information that makes your solution real and believable... the last step you need to take is to give them a low risk way to take the next step in your sales process. You do this by offering a free marketing tool, such as a report, brochure, seminar, audio, video or something that will continue to educate them. Your offer will allow your prospect to feel in control of their final decision to call and buy from you.

So your marketing equation is interrupt, engage, educate and offer and together they equal market domination. Now here's the problem. Most marketing today only contains two of these components. They interrupt by throwing something at you that's either familiar like Tiger Woods... or unusual like a monkey or talking pets. Sometimes they like to use both, as in the case of the E*Trade baby. Then once they grab your attention, they make you some type of offer such as "call now for whatever." They have left out the engage and the educate, and marketing seldom succeeds when that happens.

In fact, the only time this type of marketing does succeed is when you can afford to run the ad over and over nonstop for an extended period of time. Plop, plop, fizz, fizz... melts in your mouth, not in your hand... and the burgers are better at... have literally been rammed down our throats by Fortune 500 types. After hearing these slogans thousands of times, of course we're going to remember them. But how can a small business owner like you that doesn't have a billion dollar marketing budget successfully market your business. The answer... you can't... UNLESS you follow the entire marketing equation.

And finally the third biggest mistake small business owners make is that they have no idea how to use their marketing to generate immediate cash flow. When you follow this marketing equation in every form of marketing you do... from your business cards to your company website, the financial results are instantaneous and immediate.

So in conclusion, the three biggest lead generation mistakes small businesses make are #1... they fail to get professional help. #2... they don't know the fundamentals required to successfully market their business and attract as many new clients as their business can handle. And #3... they have no idea how to use their marketing to generate immediate cash flow.

The above marketing equation contains the fundamental components for instantly making your phone ring and positioning your business as the dominant force in your market. It provides the marketing foundation that will enable you to generate immediate cash flow. And small businesses can use this information as a minimum standard when seeking out professional help for their business.