Re: Ideas for Setting-up a Consultancy

"Scott Palmer" <[EMAIL PROTECTED]> wrote:
> I'm considering setting up a marketing consulting company
> specializing in guerilla-type marketing for small businesses
> and non-profits.

Hmmm.  Guerilla-type marketing is usually taken as done by the business
owner/manager without exterior help.  It's key hallmark is how cheap it is.

> I'd like to "test" this idea part-time before leaving my full-time
> position.

That's probably a good idea.

> I live in a mid-sized (2.5 million) metropolitan area.
> Does anyone have ideas on how to best go about this?

Yes, see my standard advice to wannabe entrepreneurs at the end of this
post.  I stongly recommend that the time you're planning on setting aside to
do the consultancy part-time you use to do what I recommend in my standard
advice.

> How do I secure clients?

Initially, all by advertising.  After you're established, nearly all by
referrals.

During your initial start-up phase, I'd recommend you write up a good speech
about something that small business owners will want to hear and then talk
to your area small business associations on giving that speech to their
membership.  Have someone come with you (ideally an attractive woman) that
will hand a leaflet to people as they enter.  On one side of the leaflet,
there's the key points of your speech and the order they'll be given in.
This is the side that needs to be face up when the helper hands out your
leaflet.  On the other side of the leaflet is your "credentials".  Your
credentials are simply a veiled ad for your consultancy.

After you get done giving that speech to as many business associations as
possible, come up with another topic for a speech and repeat.  Repeat until
your client base is what you want it to be.

One thing you might like to see if the associations will let you do is send
out postcard announcements to their entire membership about the speech and
when it will be given.  If you pitch it right, the association will bite
because they always want high attendence to all their meetings.  Show them
the postcard you want to send out and get their approval of it.  Make any
changes they ask for and re-submit it to them again.  Offer to print up as
many as they'd like and pay for the postage or if they'll give you the
mailing list to their membership, you'll take care of it all for them.  If
they turn over their mailing list to you, do NOT use that mailing list for
any other purpose ... no matter how tempting ... or that organization will
hate you for doing so and never allow you to speak to their membership
again.

> How much can I charge to develop a marketing plan?

These will also be answered by that standard advice below.

> Do small businesses care enough about marketing and
> have the resources to support a consultant?

Due to their nature, they're working with small budgets.  Most will likely
not think they can afford you AND advertising.  Because of this, they'll
likely discount the idea of employing you.  This is where those speeches to
local business associations will help out.

Now for my standard advice to wannabe entrepreneurs.

"What I recommend you do is determine what your sales territory is.  What's
its radius?  Double that and add a healthy 10% more distance then go and
talk to people out that distance that are in the same business you want to
start up.  Literally, drive there.  Do not do the following over the phone
or email or through snail mail.  Show up on their doorstep during the slow
time of their business day.  Tell them that you want to start up a similar
business at such-and-such a location and if they would consider you
competition.  If they say you would be, drive further away from your
proposed business location until you find a business that says you're not.
If you have to go to a different country, do so.

Once you find a business that says your two territories won't overlap, ask
if they wouldn't mind answering some questions about how to start and run a
business like theirs.  Play to their egos and they'll love to talk to you.
Everyone likes to feel important and worth listening to ... especially
business owners when it comes to their businesses.  Have a list of questions
written out on a notepad, but do NOT write down their answers.  Instead,
bring a tape recorder (yes, put it right out in the open ... no need for
spyware ... and besides it plays to their egos as their words are being
treated as worthy of being recorded) and concentrate on getting as much
information out of them as possible ... as well as picking up the other half
of the answers they give in body language.  If they say something you don't
understand, speak up and ask for clarification.  Let them wander off your
list of questions since where they wander to might be a place you never
thought of asking questions about and should have been.  However, keep an
eye on the questions you've written down and try to ask them all before the
interview concludes.  Of course, always yield to customers that come in.

After you've interviewed one owner, go home and digest what was said.
Listen to the tape on your way home.  Think over it all.  Adjust your
business plan accordingly.  Adjust the questions on that notepad and then on
your next free day, head off in another direction and do the same thing.
Try to interview at least twenty businesses.  A hundred businesses would be
ideal.  Interview the good, the bad, and the ugly.  If you're lucky, you'll
interview one that is going out of business or has just went out of business
so you can hear about the dark side.  Likewise, interview those businesses
you think are bad.  Keep in mind that since they're still in business, they
are probably doing something right ... if just being the only game in town
for your products/services.

Share as you give.  Let them know what you think is a good idea and they may
tell you their own gems.  Don't get paranoid that they'll steal your good
idea.  They will!  Or rather, you should HOPE they will as that means your
ideas are actually good ones.  These are the individuals that are the best
judges of your business ideas.  However, you'll never know if your business
ideas are good unless you tell these business owners them.  Also, if you're
not willing to share, don't expect them to as well.  In fact, it will likely
take you telling them your best idea for them to tell you theirs.  Also, ask
them to read over your business plan right there before you.  Naturally,
don't leave a copy of it behind.  What one of these business owners is going
to tell you will be better than ALL the advice from ALL the business
professors on the face of the Earth.  Even from the ones that are going out
of business!  These business owners are DOING IT RIGHT NOW ... whereas
business professors live in the fairyland of academia.

Don't forget these individuals after you interview them.  Send them a nice
thank-you snail mail letter for taking the time to answer your questions.
When your business opens, send them an invitation to come and see it.
Ideally, hold a special Grand Opening dinner and invite all the good
business owners you interviewed to it.  Give them a group tour of your
business (no matter how small the shop is ... even if it is a desk and a
computer in a corner) and then treat them to a nice meal.  I'd recommend a
barbeque at your house/apartment so it is informal and relaxed.  Do NOT
drink alcohol or do drugs at this dinner.  Listen, listen, and listen some
more.  You've got the most valuable think tank right there eating your
hamburgers.  They'll just naturally talk shop and focus most of that talk on
YOUR shop.  The only bad part of all this is that it would be bad form for
you to tape record it ... thus why you need to remain sober so you can
remember it all.  Then after they leave but before you do clean-up, write
down all the important things they said.

And don't stop doing this after you open your business.  At least once a
month (if not once a week), visit still more businesses.  And for one
afternoon, make this part of any vacation or business trip you take
anywhere.  In fact, you'll very likely get more out of these interviews
AFTER you open your business than before you did.  After you open your
business, you can really start to talk shop since you're now currently
running a shop.  This worked great for a little-known starting-out
pizza-parlor owner by the name of Tom Monaghan ... the founder of Domino's
Pizza.

Now if you want to really succeed, see if the good ones are also willing to
sit on your Board of Directors (or Board of Advisors, if you don't want to
give them any control power). The rest of your Board of Directors should be
made up of marketers (at least have one) and one accountant.  I'd recommend
the board number nine.  Your Board of Directors will help you keep the big
picture in mind and an eye on the future.

Lastly, if you're not willing to do the above, you don't have what it takes
to start and succeed at your own business.  Period."

Additionally...

"Work on a business plan.  Regardless if you're going to get a business loan
or not.  A business plan forces you to think of all aspects of your
business.  Question every aspect of it.  Think how you can do it better,
cheaper, and faster.  Always remember to K.I.S.S. it.  Keep It Simple,
Smartass.  [Yes, I know it is usually said as "Keep It Simple, Stupid", but
it is the smartasses that make things more complex and difficult than they
need to be.  Stupid people keep it simple (usually too simple) because
they're stupid.]  And forever keep in mind that this is a business you're
starting and a business is to turn a profit.  It doesn't turn a profit and
it's just an expensive hobby of yours.  Your goal should be for the business
to work for you and not you work for it.  If you only ever work for it, the
only thing you've made is a job for yourself.  If that's all you want, don't
start a business (and all the headaches it entails) and just go work for
someone else.  As for how much time to invest into your business plan,
studies have shown that those that work less than six months on their
business plan have a 90% failure rate.  Those that work six months or more
on their business plan have a 90% success rate.  And to start off, get a
copy of Michael Gerber's "The E-Myth".  It's real value is helping you
determine if you're a Technician, Manager, or Entrepreneur.  Be honest with
yourself and you'll save yourself a lot of grief."

Also...

"The lifeblood of capitalism is communication between businesses and their
customers/clients.  Yes, this means advertising, but that's just one aspect
of the communication I'm talking about.  There's also public relations (such
as appearing on local radio talk shows), business image (everything your
customers see), and, most important of all, word-of-mouth.  Approach all
expenditures on such communications as simply an investment.  Track how much
you spend and what profits it generates for you.  Be always willing to
experiment with new approaches but discontinue unprofitable ones once
they've shown themselves to be this.  If you employ a marketing firm, hold
them accountable.  Ditch them if they don't produce profits for you after
six months.  Don't let emotion decide their fate.  Let's the cold hard facts
of accounting be the heavy.  And nothing gets a marketing firm to work hard
for you more than them knowing you expect results and will ditch them if
they don't produce.

As for what gets you the best bang for your advertising buck, that would be
postcard advertising.  The key to postcard advertising is the mailing list.
You want to target those who will most likely become your customers/clients.
Spend a lot of time thinking over who this might be.  Once you're in
business, find out the demographics and psychographics of your customers and
market to those.  As for the postcard itself, EVERY single word on it should
be carefully chosen.  The goal of the postcard is to get its recipient to
take some form of action.  That action could be calling and/or visiting your
business or visiting your business' website.  The best way to get them to
visit your physical location is to make the postcard a meaningful coupon the
y can use.  Use color, bold, and all caps in the text of the postcard
sparingly and to just give impact to key words.  ALWAYS send out two
differently designed postcards.  One to one half of the mailing list and the
other to the other half.  Design them so you can track results, such as
giving different telephone numbers to call.  If one pulls in more than the
other, try to figure out why that happened and test that theory in your next
mailing.  Advertising should always be considered to be fluid and not etched
in stone.  Adjust with the times, be topical, and always be willing to
experiment."

And finally...

"Barter, barter, barter!  Almost all businesses can barter with other
businesses.  This is a great cheap way for you to get something (product or
service) you need for your business for a fraction of its cost ... if not
essentially free.  Think what other businesses have that your business
needs.  Not wants, but NEEDS.  Don't overdo barter or you'll be strapped for
cash.  Now think what they (or their family members) might need or want from
you.  Note I also said "want" this time.  If they foolishly use barter for
their desires, that's up to them.  Don't you make that judgment call for
them.  One person's desires can be another person's needs.  Now go and talk
to them about a trade.

Lastly, ONLY buy used.  Never buy new anything that doesn't ABSOLUTELY have
to be new.  All it has to look like is being in good condition ... and not
even that if it's in the backroom and your customers will never see it.  Go
to sheriff auctions, business liquidation sales, and garage sales; scan the
classified ads in newspapers; browse the online auction sites (like eBay);
and hunt for bargains.  Find a place to store these bargains during this
collection phase.  This collection phase usually takes about six months.
The key to being a business success is keeping your start-up expenses as low
as possible and buying used is one of the best ways to do this.  [The other
way is barter.]  If you do buy something new, it should be with a great deal
of thought on why it has to be new and not used.  Again, if the customers
see it, it only needs to look like it is in good condition and that's it."

Good luck!

Scott Jensen
-- 
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