Business Is Tough. Laugh A Little.

By | Jun 6, 2009

I’ll be the first to admit that between my obsessive compulsive Type A personality and my overwhelming desire to compete, I can burn out really quickly if I don’t keep myself balanced.

The amount of time you spend on your business should be balanced with other things such as family, vacation time, keeping yourself healthy and relax time. No one can go at a feverish pace forever without “breaking something” in the process. It may be your health, your relationships or even your business but you simply cannot be best at everything. Sometimes you’ll get more accomplished by stepping away for a much need break than you will if you continue on.

Treat yourself well once in a while and be grateful every day for everything you have and you will live a happier life and your business will benefit as well. Since many of us “web guys” work from home offices, make sure you separate work time from home time. This is very important. I know I find myself sneaking on my computer all the time during the weekends when I should be playing with the kids. There needs to be a line drawn.

I am going to keep this post short since it is the weekend and I should be away from my computer but I wanted to share something I found to be very amusing. Actually, I almost pissed myself 🙁 when I watched this video. Hopefully you will too!

Relax. Have fun. Go buy yourself something nice. Laugh a little. Be kind to others and be grateful for everything you’ve got. Most importantly, life’s short – enjoy it to the fullest!

See more funny videos and TBT Videos at Today’s Big Thing.

Anatomy of a Startup: Part 1 – The Teddy Bear Chronicles

By | Jun 3, 2009

teddybear1My companies are involved in a lot of different things. Most of my business dealings are internet related. In this series of articles I will write about my attempt at a brand new startup from Day 1. I will chronicle all the successes and failures with hopes you get something out of it that you can take to the bank. Perhaps we can inspire someone out there to make a life changing leap.

Plush Teddy Bears – A Crazy Idea In A Saturated Market

I decided this time around I want to do something a bit more creative. As one with some graphic design skills, I thought it would be neat to design a cool-looking teddy bear and market it as this new fangled hip hop-style lovable plush with a rude sense of humor. Sounds like a decent idea, doesn’t it? I thought so too until I realized how many people in the world sell teddy bears.

There’s a term in business that can make or break you. It’s a basic economic term that sounds much simpler when spoken than its underlying meaning implies. The term is “barriers to entry“. A barrier to entry is an obstacle of some sort that can be your best friend or worst enemy depending on which side of the barrier you lie. Fundamentally the term describes how difficult or how easy it is to compete or enter a new market. I mention this term because as I continue to pursue the teddy bear venture, I learned it was WAY too easy for me to source my product and have a demo in my hands. If I had no trouble finding the product, my competitors will have no trouble as well. From what I’ve found to be true in business is that the more difficult a product is to develop and source, the better off you are once the sourcing is complete. This is a teddy bear. Ten billion Chinese factory workers are standing in line waiting to create these plush little darlings for the American market. No significant barrier to entry there. I could be in trouble before I even begin.

Pushing forward regardless, we hope our creative spin and marketing skills give us the upper hand and allow us to compete. A barrier to entry could be as simple as “I’m better than you at marketing so I will win” or “I have God given skills as a Fine Artist that allow me to produce teddy bears that you just don’t have the talent to create”. All superiority complexes aside, there is ALWAYS someone bigger, better and more talented than you who could easily hurt your business if they wanted to. You must weigh your talents and weaknesses seriously when entering a new venture particularly when there are no barriers to entry.

The Plan: Find Your Source

We have located what we believe to be a reliable supplier overseas who will create the teddy bears for us. We are learning as we go since the plush toy market is not our primary concern. We found out that the US has recently introduced pretty strict testing and safety requirements for the plush market as a result of the lead paint in toys problem we had a few months back. It’s not as easy to bring toys into this country from China as it once was but it’s not overly difficult either. The unexpected specialized testing requirements are going to cost us a few extra dollars to our bottom line. We should still be able to hit the retail price we were looking to achieve and have enough profit to stay in business but that number just shrunk a bit. Ok, still undeterred, we learned a bit along the way. Back to the bear.

We spoke with quite a few suppliers (via email and Skype mostly) and emailed photos of samples back and forth. We compared many different quotes and nearly settled on one manufacturer in particular. We were amazed at the wide price range we were quoted. Some quotes were TRIPLE others. I still don’t understand that but I think I have my supplier nailed down. The supplier we are in the process of choosing appears reputable and answers all of our questions in a timely fashion.

If you are new to doing business overseas, you MUST deal with someone who is willing to answer all of your questions. If they are in a rush to get your money, walk away. Be aware of people that source, charge a markup and sell someone else’s product to you. If you are going to use an overseas manufacturer, do your homework and be sure the people you are dealing with are the people that are going to actually manufacture your product.

When Sourcing Your Product, Don’t Deal With Overseas Middlemen

In most cases, you don’t want to deal with a middle man who is going to charge a markup. If that’s the case, you don’t need to go to China for that. There are PLENTY of companies here in the US with reputable contacts in China and many have been established for years. These companies have done the homework for you. You can save yourself a lot of aggravation if you use such a service but it’s going to cost you on the bottom line. The guy in the US is going to mark up the product he gets from China and then resell it to you. In some cases this might not be a bad thing and could be worth the additional markup if you are receiving services in exchange. If you go with a service such as this you may find comfort in having someone nearby to scream at in case the project starts falling apart or the merchandise is not up to snuff. If the company you are dealing with is reputable, they will handle all the problems and make good on any botched orders or defective merchandise. If nothing else, you will have someone here in the US who speaks English well and will completely understand your concerns. Another potential bonus is that sometimes these middle men companies will perform warehousing duties for you at a deeply discounted rate if you buy through them. Others will go as far as allowing you to ship and pay for your merchandise as its needed which could be a very nice feature if you are starting out with a limited budget. China manufacturers like to deal in large numbers – 20,000 of this, 50,000 of that. That’s the way they make money. If and when you come to them to produce 500 units of a $3 teddy bear, they are going to do all they can to give you the run around. Be persistent and promise the big score:

“If you take this order for just 500 units, I understand I will have to pay a fair amount more per piece than when I buy 25,000. I will tell you that my loyalty is strong and if you are willing to work with me on this project, I know have the ability to send you significantly larger, recurring orders in the future.”

Tell them what they want to hear.

As of today, we eagerly await the physical prototype of our teddy bear to arrive from overseas. We started building our e-commerce site through which the bears will be sold and we’ve even found a local artist we are going to hire to come up with some slick graphics to put on the teddy’s clothes. We were sent photos via email but the actual sample is going to be nice to see so we can squish it and play with it and show it around. We would like to get some market feedback before we move forward with mass production and having a sample to show around will help significantly. We will keep you posted on our progress each step of the way. Until next time, we’ll see you hangin’ around the edge of normal.

Joe’s Roofing and Google AdWords Campaign

By | Jun 2, 2009

Sometimes I wish I had owned a local business where I can concentrate my advertising dollars within a certain community instead of having to take pot-shots at finding my customers who are spread across the country. For those plumbers, roofers, siding contractors, electricians and the like, you need to have a corporate web site and you need to place ads on Google using Google AdWords service.

First, if you don’t have a web site I highly recommend you get one. It’s 2009. Customers go to Google or their favorite search engine and type in “Tampa plumbers” or “Los Angeles electricians” and if your company is not there, you lose the job, it’s that simple.

Let’s think about this for a minute. Say you are a roofing contractor. You own Joe’s Roofing in Flint Michigan. What’s an average job run? I know here in Tampa roofing contractors wanted between $8,000 and $14,000 to completely replace my old worn roof. Let’s call it $10,000 on average for a roof job. That’s a lot of money! Since you are local you do not have to spend a fortune advertising your site on Google if you pick your keywords correctly. Let’s face it, if you’re in Flint Michigan no one is calling you from New Orleans to do a roofing job. You don’t need to spend big bucks on broad keywords in order to be found. Remember, you are trying to find YOUR customers who are going to end up being a source of revenue for you.

roofingWhen you start your Google campaign, think like your customer. What is your customer going to type into his web browser to find your company? If it were me, I would be typing terms like “Flint roofers”, “Flint Michigan roofers”, “Flint roofing contractors”, “new roof Flint, MI”. These are going to be your precious keywords that actually drive paying customers to pick up the phone. Since you are not competing with ALL of Michigan or the entire US for those keywords, they won’t be bid nearly as high as broader keywords would if you owned a national roofing company.

Think about profit and think about costs per click. How many folks are sitting at home thinking about roofing companies unless their roof is leaking? None probably. Why would they search your keywords if they are not looking for a roofing contractor? If no one searches your keywords and clicks your ad, you are charged nothing. If someone’s roof just caved in and they hop on Google and do a “Flint MI roofing contractors” search, you can bet your bottom dollar that the $0.65 cents it cost you for their click has a good chance of paying off with a $10,000 new roof.

Of course my example takes things to the extreme. In reality not everyone clicks ads to immediately do business but as an entrepreneur and business owner myself, I have to imagine you have enough profit in that $10,000 new roof to pay Google $200 a week to drive qualified traffic directly to your door. $800 a month on a small Google AdWords campaign and I’ll bet you pick up 2 or 3 new jobs per month that you wouldn’t have gotten without the ads.

Starting a Google campaign is easier than you think. If you care about your business you’ll take the time to explore the vast literature that’s available online for step by step instructions. Additionally, I advise you handle your online marketing yourself as the owner. Sure there are plenty of companies out there that advertise these type of services but unless you are an active participant, you won’t get the full result, in my opinion. If you are smart enough to run a business you are certainly smart enough to employ an ad campaign. It can really pay off and since the ads are fired up as soon as you drop your credit card, you can start receiving qualified leads by tomorrow. Why not give it a try?

A Beginner’s Guide To Direct Response TV (DRTV)

By | Jun 1, 2009

DRTVYou may be the greatest inventor of all time or you may have purchased an old patent that no one has cared about in years. Regardless of how you did it, you have a product you think would be perfect for direct response television (DRTV) and now you need to follow through. You’ve all viewed the late night pitchman hawking some sort of gadget at three in the morning. What you may not know is that direct response is a multi billion dollar industry and it takes luck, determination, a good network and lots of money (usually) to find success.

I’ve found from my own experience it takes a lot of phone calls to piece together enough useful information to make headway in the industry if you are a beginner. The people that do this for a living hear thousands of pitches per year and tend to know what works and what doesn’t for direct response and they are usually not easily impressed. Failure in direct response is the NORM. Many more products bomb than do well with DRTV. Hopefully you will be one of the very few to hit a homerun with your product and if you do the rewards can be staggering. The process can be grueling though for the inventor who has invested his or her life savings into the venture. As an inventor, you MUST try to take all those personal feelings you have about your product and put them aside as you negotiate deals and try to get your product on TV. If you are making deals with your heart instead of your brain, you will lose big time. It is very difficult for most people to do this which is why it is extremely important to be able to trust the folks you are working with.

Money adds up very quickly in the direct response business. A typical 2 minute DRTV commercial will cost you between $20,000 and $150,000 depending on who you use and the complexity of the production. 35k is about average for a good commercial with a well known producer. Add in your call center deposit and monthly minimum and a warehouse that deals with DRTV for pick and pack services and you’re looking at another $7,000 – $20,000 and that’s before you’ve sold a single unit or produced anything.

There are several criteria most folks in the industry use to measure success and/or product viability.

The Product:

1. You should be able to manufacture your product for about $4 in order to sell it on TV for $19.99. You typically want to find success selling your product at 5 times your cost. This isn’t because you are greedy. This is because there are so many other things that eat into your margins, leaving you with pennies-per-piece in profits. Some of these include: outsourced call center to handle the orders, order fulfillment, warehousing, returns and exchanges, credit card processing, web hosting and others.

2. Your product MUST appeal to a large audience. Niche products don’t work well on television – at least not for direct response.

3. Your product MUST demonstrate well. I personally believe that most products can be shown in a light that “simply amazes” the viewer if the right creative team is in place. It’s not an easy task to make a mundane product appear amazing but good direct response producers do it on a daily basis. There are of course products that are simply boring and although the product may work perfectly well, it’s probably not going to sell via DRTV.

4. The product should do something to or for the senses. Everyone likes to feel secure. Everyone has arms, legs, feet, noses, eyes, hair. Everyone like to look better. Everyone likes to feel better. Everyone likes to make life easier for themselves. Everyone must eat. See where I am going with this? You want a product that appeals to a very large market and strikes an emotional nerve with the viewer at the same time.

The Players:

Below is a list of some of the largest players in the DRTV industry. What you do with the information is up to you. There are probably hundreds of additional experienced companies not included on the list with whom you can choose to do business with. I am providing this information as reference only and at least its a start. If you’ve got that one in a million product and think it’s got what it takes to be on TV AND you’ve got the money and intestinal fortitude to handle the ups and downs, start making some phone calls.

Telebrands International. Founder A.J. Khubani is considered one of the largest players in the DRTV business. His company has made millions selling things on TV for a number of years.

Some companies out there will pay for the media and will handle the manufacturing costs to get your product on air and in exchange pay you a royalty for your product. If you are broke and have a terrific idea, this may be the way to go. Again, the companies that do this however, see thousands of products each year and are very selective. If you are lucky enough to get your foot in the door with one of these guys, you better have an excellent product, some luck and a GREAT pitch.

Sullivan Productions. “Hi Billy Mays here for Oxi Clean!” You’ve all seen the commercials and probably caught a few episodes of “pitchmen” on TV. Sullivan Productions is the Anthony Sullivan and Billy Mays production company. These two are hooked up unbelievably well and know everyone in the industry. Based out of Tampa, FL.

Concepts TV. Collette Liantonio is the creative genius behind many award winning informercials. She really knows her stuff and has the experience to create a winner.

IdeaVillage. A.J. Kubani’s brother Andy is also involved in DRTV (go figure!). If you’ve got the right product, it might be worth a phone call.

Vertical Branding. Another DRTV consumer products company. Most of these companies will entertain a solid pitch if you’ve got what it takes.

Mercury Media. Media buying company. These guys will budget your funds, buy your air time and plan your broadcast schedule.

Moulton Logistics. Moulton is one of the largest, most experienced and most technologically advanced warehouse and fulfillment shops servijng DRTV. These guys are well connected in the DRTV world and can handle a lot of the “back office” type of things – call center, warehousing, returns, picking and packaging your product for order fulfillment (called pick and pack) and more.

Marcus Productions. I know this company has had a ton of success as producers of DRTV commercials. I haven’t had much personal experience with them but their name was dropped by several “in the know” people I spoke with.

Hawthorne Direct. Another large infomercial producer and media buying company. This company offers a host of services to the DRTV industry.

Hopefully you have enough information to get started on your journey. Be thorough in everything you do when it comes to DRTV. Make sure the production company you choose is well suited to produce for your product. Some companies have more experience in certain niches than others, like kitchen gadgets as an example. Others may work best with testimonial driven commercials. You need to do alot of homework and make a lot of phone calls. As an inventor myself and serial entrpreneur I am yet to get one of my products successfully launched but I’ve done enough homework at this point to comfortably share some of my findings.

I welcome your questions and comments. Yours in success!

© 2009 Edge of Normal. *Edge Of Normal: Where Small Business and Technology Meet