Prosper Newsletter: December 2006 > Small Business

You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.

25 Year-Old Company Finds Solid Business Plan after Possible Bankruptcy in Just 4 Months!

Dear Prosper,

Last March, we received word that one of our largest clients had cancelled their contract with us effective July 1, 2005. This news sent us in a tale-spin. With this loss we would be facing bankruptcy by August. As new owners of a 25 year-old company we were met with a lot of surprises over the 19 months that we had been in business. Our biggest surprise was the level and intensity of the corporate competition in our field. Thus when a large corporate company took this client away from us-we felt at a complete loss.
After several weeks of hand wringing and sleepless nights, we took a serious look, and decided that we could live through a bankruptcy-but that we didn't want to. About that time, Katie took a look at an email she received from the Enlightened Millionaire Institute. Something spoke to her and she became convinced we needed to pursue this to keep our business afloat and growing. We became convinced with some good marketing strategies we could get ourselves on the right track.

Four months later, we are seeing our company start to turn around and our marketing approach a good solid one. At this time we have fourteen very good prospects. We have a strategy in place for follow-up with each organization. And we have a good one and two year plan in place to keep new business coming in.

While no one has signed on the dotted line - yet - fourteen good prospects is more than we had four months ago. We are grateful to Noah Edvalson and Prosper for opening up our eyes to the possibilities and to valuable marketing tools and principals. Noah helped us get unstuck - and moving in the right direction. Now it is up to us to do the work - which to our surprise has really been fun.
We'll keep you posted of our progress.

- Diana N. & Katie F.
Shoreline, WA

Tip of the Month

Plan Now for the Holiday Rush
According to the latest research by the National Retail Federations and BigResearch, 40% of shoppers have begun their holiday shopping before this November.
Overall, 70% of respondents said they planned to purchase holiday items in discount stores such as Wal-Mart or Costco. Also, 47% of consumers said they planned to purchase holiday items online, while 25% intended to purchase from catalogs. The most active online buyers are consumers ages 18 to 44. By comparison, the most active discount store shoppers are consumers ages 55 and older.
This year, according to the NRF, the average consumer expects to spend $791.10 this holiday season, up from $738.11 last year. Some $604 of that spending will be for buying holiday gifts online and offline. Over two-thirds of that amount will be spent on gifts for family members. Just 18% of spending will be on gifts for friends and co-workers. But this is not the full extent that consumers will spend for holiday items. About $187 will go toward holiday decorations, greeting cards and postage, candy and food and other items. Furthermore, the NRF expects shoppers to take advantage of sales and discounts during the holiday season by spending an additional $99 on gifts for themselves. Get geared up for another healthy retail holiday season.

Article

Doing Research

The idea of doing research spans all three areas of info-marketing:

Research is so fundamental to these three pillars that we'd like to discuss this more at length.

How do you find out Supply & Demand?

Demand

Whether working on website for an information product or a website that sells tangible goods or services, we really need to get a better idea of that marketplace and the competition within that marketplace. So the first thing we need to do is figure out the demand for a particular area. Keep in mind that just because someone is looking up and doing a search for a phrase doesn't necessarily mean that they are looking to go ahead and purchase the item. They may be looking up information, comparisons, product recall information, etc. But, we can see a basic demand based on the amount of times the phrase or item is being looked up.

Supply

How do we figure out what the supply is for a particular niche or product? One way of doing it is to take the exact keyword phrase used in figuring the demand, and doing a search on Google with that keyword phrase. The number of websites that it brings up in as the results in the upper right-hand corner is basically the number of competition.

The key is to recognize that our goal is to become a big fish in a little pond. The way that we know how big this pond really is, is by looking at the number of websites competing for that same keyword phrase (as discussed previously in the Supply section). But what we are really looking for are specific parameters to judge supply and demand to know if we are on the right path. A good parameter for demand would be something between 1,000 and 50,000 searches on http://inventory.overture.com/ - using the raw number of searches not multiplied by four as the measure. A good parameter for supply, in terms of competition, would be when you do the search on Google and it states the results as "1-10 of x-number," we would want the x-number to be less than 1 or 2 million, but ideally less than 750,000 or even 500,000.

When searching on http://inventory.overture.com/, not only will it give you the search volume for that particular keyword phrase, but it will also give you different permutations of that keyword phrase and the search results for them. This will give you other keyword phrase ideas in order to narrow down your niche.

A good analogy is that of a grocery store and how it cannot market each and every item it sells. The grocery store chooses key items to advertise and market in order to get customers in the store. This strategy applies to online marketing as well. It is done with keyword phrases. We cannot possibly market every product that we carry. So we try to find different keyword phrases that great demand but very low competition. We should use the majority of our resources, time, energy, and effort, in marketing our website under these specific keyword phrases. Start by finding 15 keyword phrases that all fit into our set parameters.

For more info