Startup & Small Business | HostGator Blog

HostGator Blog

Web Hosting Made Easy!

  • How To Build A Minimum Viable Product

    Friday, January 13, 2017 by

    Minimum Viable Product

    We've come so far in our series on starting a home-based business, and now it's time to focus on the details of your first product. You’ve probably had a product or a whole line in mind all along and you may have some very specific ideas. As we discussed in the previous post on customer feedback, what we think our customers want and what they actually want may not be the same thing. As you listen carefully to your target audience, you can develop a clearer idea of what they'll buy from you and what might be a misfire. To be sure, though, most business experts recommend starting small and simple, with something called a MVP, or minimum viable product. Confession time: As useful as the term “minimum viable product” is, I don't much like it. "Minimum" sounds like slacking to me, and maybe to you, too. After all, the reason you're starting your own business is to wow your customers and impress them with how well you meet their needs, right? Shouldn't you roll out your very best idea right out of the gate? Not exactly, according to many successful small-business founders and serial entrepreneurs. Your very best idea may not be quite what your customers want, for whatever reason. If you've spent all your capital on this one product that doesn't quite get customers to buy, your business may run out of money before it recovers from the misstep. That’s a big risk to take, especially if you’re funding your new home-based business out of your own savings.  

    The 3-step MVP approach to product development

    A more prudent plan is to start by offering a basic version of what you've heard your customers ask for and then...
    1. Ask for lots of feedback from your first customers.
    2. Listen to that feedback actively and with as little confirmation bias as you can manage.
    3. Roll out a new version with improvements suggested by users and clients OR scrap the MVP if it flops and go back to listening to your customers for new ideas.
    If this sounds like the product-version update process for every app and piece of tech hardware you use, it is. Launching with an MVP keeps your risk and expense low while letting you test the waters with your product and your target audience. You can use this process for each new product or service you offer. In fact, you should follow the MVP path for each new product you introduce, because no matter how well you think you know your customers, you can misjudge their interest and end up wasting time and money. [bctt tweet="3 steps for MVP product development: 1) ask for feedback 2) listen 3) roll out a new version." username="hostgator"]  

    Skipping the MVP step: a cautionary tale

    In case you're considering skipping out on this important step, let me share my personal cautionary tale with you. I skipped the MVP step once, when I was the sole proprietor of a tiny dancewear business. I thought I knew my customers' tastes, buying habits, and interests well enough to invest $600 in an embroidery machine to embellish products I was already selling and add new products with embroidered designs. What I learned was that although most of my customers thought the designs were cool, they weren't motivated to spend the extra money on them. Also, embroidering things, even with a digital machine, was time-consuming. I had to watch the fabric in case of snags and to change the thread from time to time. Even when I did sell the occasional embroidered piece, the extra revenue it yielded didn't come close to covering the (highly discounted) value of my time. When I spoke to a more experienced dancewear designer and vendor about my problems, she ran through a quick list of questions and suggestions that identified my problems on the spot. My prices were too high for customers and too low for me. My process wasn’t optimized to reduce costs, and it couldn’t be with the type of machine I’d bought. That also meant I had no way to scale production. She was too polite to say I’d really messed up but she didn’t have to. What I should have done before I invested money and time in my product idea was listen more carefully. If my customers had told me they’d be willing to pay more for embellished items, the smart next step would have been to ask my experienced designer friend for her advice. She would have told me to keep my expenses to a minimum by renting or borrowing the proper equipment to make samples cost-effectively and test sales. That would have also shown how much time each piece required. My only consolation is that skipping ahead is a mistake that more experienced entrepreneurs sometimes make, too.  

    Won’t early customers be disappointed when you bring out a new version later?

    Take care of your first customers by offering them a deal on your updated products later on. Software publishers do this when they roll out new versions. You get a discount on Microsoft Office, for example, if you're upgrading from an older version. It's good business (and a smart marketing strategy) to reward your existing customers by giving them a “preview sale” on your new version before you make it widely available. We’re getting ahead of ourselves, though. Right now, the focus is on your first MVP.  

    The MPV review

    Remember to base your first product on what your customers say they want and need. Ideally, you’ll invest only enough time and money to meet your customer’s requests without risking too much on your end. Ask for advice from mentors and peers to make your first product cost-effectively. Then, see if your MVP sells. Listen to what your customers tell you about it: why they bought it or didn’t, what they thought of it, what they like, and what they’d like to change. Keep those notes for future product updates and changes, and keep track of your first customers so you can reward them with deals later on in exchange for their feedback. There are three more posts in the HostGator Home Business Guide. Next time, we’ll look in depth at the marketing methods you can use to get the word out about your MVP, drive traffic to your business web site, and grow your customer base.

    Ready to get started? Download our FREE eBook: Launch Your New Home Business!

  • Why Customer Feedback Is Crucial For Any New Business

    Thursday, January 12, 2017 by

    Customer Feedback

    We’re at Step 7 of the HostGator Home Business Guide, and today’s post is about the fine art of listening to your prospective customers. Listening is a tried-and-true technique for success. Business guru Richard Branson, who is a big fan of careful listening to customers, advises, “You can never have enough feedback.” Listening is important even before you launch your first product or start promoting your business, because customers will tell you what they want and how they want it.  

    What are you listening for?

    The first thing to listen for is demand. Let’s say you’re a baker and you know that gluten-free products are popular and sell for more than traditional baked goods. Before you roll out (thank you!) a gluten-free product line, listen to gluten-free shoppers in your area. Do they want sandwich loaves a couple of times a week, or are they more interested in the occasional birthday cake? Is there enough demand to sustain your business locally? Next, listen for what potential customers are willing to pay. If they’re not talking about it, you can ask. You may find that prospective buyers aren’t willing to pay a sustainable price for your offerings, or you may find that your planned prices are too low and you can raise them to grow your business without losing customers. [bctt tweet="'You can never have enough feedback.' - business guru Richard Branson #entrepreneurship #quotes" username="hostgator"]  

    Listen to your ideal customers

    Listen to people who match your customer personas when you’re making business decisions. Your friends and relatives may be supportive but unless they’re in your target market, their input may not be helpful. I’ve seen small business owners underprice their services because they listened to their peers—often other cash-strapped new business owners—instead of their target market of high-income households or medium to large businesses. What might seem overpriced to your uncle might be a worthwhile expense to your ideal customer, although they’ll probably buy it at your lower rate, too. You just won’t earn as much profit for your efforts.  

    Where to listen to your customers

    If you already know people in your target market, ask if you can pick their brains. In Step 6 we talked about finding the social networks where your customer personas spend time, and now it’s time to listen to their social media conversations. There are many social listening tech tools to help businesses automate and refine their social listening programs, but for most solopreneurs and brand-new businesses, the most cost- and time-effective social listening method is to do it yourself. Are there blogs your ideal customers follow? You can follow them, too, and pay attention to the comments. Join in if you have questions or ideas to bounce off commenters, but avoid thread hijacking and self-promotion. Remember that social media is more than just Facebook and Twitter. Your target customers may be following makeup-tutorial channels on YouTube or joining computer-industry discussion groups on LinkedIn. They may review hotels on travel sites or bakeries on Yelp. In fact, reviews of businesses similar to yours, even if they’re not direct competitors, can help you see what customers want from a business like yours. Give potential and existing customers many ways to talk directly with you, too. Make your phone number and email address easy to find on your website and social media channels, and if your business website includes a blog be sure to respond to comments regularly. Follow up with people, thank them for taking the time to share their opinions with you, and make the most of what they say.  

    How to really listen to your customers

    To get the most value from listening to your customers, get familiar with active listening and start learning to spot and avoid confirmation bias. Confirmation bias is how psychologists describe the human tendency to place more value on information that supports our assumptions and give less credit to information that contradicts them. Confirmation bias can prevent you from really hearing your customers and can lead to bad decision-making in other areas of your business, too. All of us have this quirk, and even business titans like Warren Buffett have to work against it by consciously seeking out, and really listening to, viewpoints and opinions that don’t match theirs. What does it look like when this bias plays out? Here’s an example. A retreat organizer loves everything about his venue—the food, the décor, the setting—because it reminds him of where his family took vacations when he was a kid. When retreat clients give positive feedback, it confirms his feelings for the place. When guests bring up problems, he’s likely to dismiss their complaints as minor or baseless because he’s biased toward seeing the retreat location in a very positive light. Both types of customer feedback could help him improve his business, but he’s only really listening to the positives. Knowing that confirmation bias exists can help you combat it and make better decisions. Another bias-buster is active listening. It’s used by everyone from couples’ counselors to customer service trainers, and you can use it, too. These are the steps:
    • Listen to your customers without interrupting and without forming a response in your head while they’re talking (or while you’re reading their email).
    • Respond by outlining what you heard them say in neutral terms or in ways that reflect the customers’ feelings. You don’t have to agree or disagree right now.
    • Listen to any additional feedback from the customers and make sure you understand what they’re really saying. It’s a good idea to thank them for their input, too.
    Active listening takes some reactivity and bias out of the conversation so you can use your customers’ input more effectively. It can also help you build customer loyalty.  

    When should you listen to your ideal customers?

    Always. Remember, you can never have enough feedback. What are we going to do with everything you learn from listening to your prospective customers? The next step is to develop or refine your MVP. That’s the minimum viable product that you’ll debut and then update over time, based on (you guessed it) listening to your customers. We’ll go into detail about your MVP in the next post for HostGator Home Business Guide.

    Ready to get started? Download our FREE eBook: Launch Your New Home Business!

  • The Tools You Need to Market Your New Business

    Thursday, January 12, 2017 by

    Marketing tools for new business

    If you’ve been following the HostGator Home Business Guide series, you know we’ve covered a lot of the groundwork for setting up your new business, from deciding if running a business is right for you to getting a website. You’re just about ready to announce your home based business to the world – and more importantly, to your target market. To do that, you need to put together your marketing toolkit to spread the word online and in person.  

    The marketing mindset

    ‘Marketing’ is a vague term. Ask 72 experts what it means, as marketing author Heidi Cohen did, and you’ll get 72 unique answers. The simplest approach for new business owners is to think of every interaction between your business and your potential customers as a chance to establish your trustworthiness, demonstrate your authority or quality, and listen to what those potential customers want and need. For this post, we’ll focus on gathering tools to build trust and establish a professional image. We’ll delve into authority and listening in the next post. The customer personas you developed in Step 3 are now going to help you create your marketing tools. As you go through these steps, think about how you can set up these tools to show your business is reliable and professional in a way that will appeal to your customer personas.  

    Digital marketing tools for your new business

    Email

    Now that you have a domain name and website, you’re ready to set up your professional email address. If you host your website with HostGator, it only takes a couple of minutes in your control panel. You need a professional email address, even if your personal email address is something related to your business. That’s because customers find professional email addresses more trustworthy, and as a new business, that’s exactly what you want to communicate. Use this address on your site, business cards, social media, and other marketing materials. In your email settings, create a signature line for your professional emails that includes your name, your company name, your tagline, a link to your website, and maybe your phone number.  

    Phone

    Don’t want a separate phone for your business? Get a Google Voice or Skype number instead, and use that number for your business, or use the toll-free VoIP number that comes with HostGator’s business hosting plans. Then decide how you’ll answer business calls. Record a good outgoing voicemail message and include an alternate way for customers to reach you, like your email address.  

    SEO

    You also need keyword-rich title tags and content on each page of your website to help search engines find your site, and you need to make sure your site text is visible to those search engines. Resist the urge to use the same keywords over and over in your site copy, like this: “Welcome to Houston Alligator Costumes! If you’re looking for a Houston alligator costume, you are in the right place. At Houston Alligator Costumes, we are experts on Houston alligator costumes.” The goal is to rank highly in search results *and* establish credibility. Copy that reads like a robot wrote it isn’t credible. Google also penalizes sites for keyword stuffing by ranking them lower in search results.  

    Social Media

    Now’s the time to choose the social media platforms your business will use, based on the ones your customer personas use. Are your ideal customers pinning products like yours on Pinterest boards? Do they chat with their peers in Facebook groups? Are they sharing technical tips on their YouTube channels? Go where they are, and don’t worry about the dozens of other platforms. We’ll talk in more detail about social media marketing ideas in Step 9. For now, identify the platforms to use and study their business-user tutorials. When you’re ready, set up your accounts using your domain name, professional email address, and a user name that matches or relates to your business name.  

    Printed marketing materials

    Business Cards

    Some of your marketing will happen offline, which is why at least some printed marketing materials are a must, too. At the very least, you’ll want business cards.  Why business cards in the age of the smartphone? When people are interested enough in your business to ask for your card, you have the opportunity to impress a potential customer or underwhelm them. Choose to impress by (a) having business cards and (b) having cards that look good. Always carry your cards in a holder to protect them from pocket and purse damage.  

    Other Promo Items

    Depending on your business and audience, you may also want magnetic car signs, pens to give away, loyalty-program punch cards, notecards for handwritten thank-you’s to your best customers, and labels for your products. Branded labels can add panache to product packaging and gift-wrapped items. A magnetic sign on your car can raise awareness around town and is a popular choice for small home-service businesses. Bear in mind that when the magnet is on display, your vehicle is a rolling brand ambassador. Drivers will notice your cool magnet. They’ll also notice whether your car is clean, whether your tailpipe is sagging, and how you drive, so keep that in mind! The cost of printed marketing materials can add up fast. If your budget is very tight, you might start out with a small number of high quality business cards, rather than order a thousand lower-quality cards that don’t represent your business as well. Consider also that your branding may change in a few months as your business evolves, and you’ll need to replace your cards then. When you have your marketing toolbox fully stocked, you’ve completed Step 6 and you’re ready to move on to the most important step for every business at every stage of its life: connecting with and listening to target customers. We’ll look at doing this through social media, in person, on your blog, and more in the next HostGator Home Business Guide post.

    Ready to get started? Download our FREE eBook: Launch Your New Home Business!

  • 5 Steps To Follow When Creating Your First Business Website

    Thursday, January 12, 2017 by

    Creating your first business website

    This is the fifth post in the HostGator Home Business Guide, and this time we’re talking about setting up your business website. It only takes a few minutes to register your domain name and sign up for a web hosting plan. The real work this week is the planning, designing and testing that goes into making sure your new site works the way you want it to so you can start reaching customers with it. Let’s dig in.  

    1. Choose your domain name

    Not sure exactly what that a domain name is? It’s the part of your URL visitors will use to go to your website. Here’s the URL (the internet address, so to speak) for HostGator: https://www.hostgator.com/ Within that URL, hostgator.com is the domain name. There are many domain suffixes (technically known as top-level domains or TLDs) that you can choose from besides .com, like .net and .biz, but .com is the most common. Ideally, your domain name will be short, easy to remember, and not confusing when users type it in a navigation bar. More importantly, though, your domain name should be part of your company brand. Take your time to come up with as many ideas as you can, narrow the field a bit, and then check to see if those names are available. HostGator and other companies that register domain names have tools to check if the name you want is available. For example, I entered ‘life’ into HostGator’s domain search tool. Alas, life.com and all its variations like life.org and life.biz belong to other people. If I were really set on including ‘life’ in my domain name, I could consider the alternatives listed below the results chart, like livelifeonline.co. Domain name availability If your domain is available, you can register it. Once you’ve found a domain name that works, you may want to see if variations are available, too. If so, you might want to register them also and set them up to redirect visitors to your site at your primary URL. Domain Name  

    2. Check your privacy settings

    When you register your domain name or names, you’ll have the option to buy inexpensive domain privacy protection that keeps your personal information off WHOIS. WHOIS is a directory run by ICANN, the Internet Corporation for Assigned Names and Numbers, which anyone can use to look up the contact information you used to register your domains. Companies like HostGator that offer privacy shield services use their address in your domain name registration instead of your personal details.  

    3. Pick a hosting plan

    Next, you need a place to store whatever you put on your site so visitors can see it. Creating, offering, and maintaining that data storage space is what web hosting companies like HostGator do. Don’t get too overwhelmed by the monthly plan options you’ll see. For almost all new home-based businesses, an inexpensive shared business hosting plan will have everything you need. Whatever host and plan you choose, you should consider:
    • The number of domains you can register on a single plan
    • Available bandwidth, which will affect how fast your site loads and how many people can view your site at one time
    • Email account tools, which you’ll use to create branded email addresses
    • What templates or site-building tools the host provides and how easy they are to use
    • What e-commerce tools the host supports, if you’re planning to have an online shop on your site
    • Downtime, which is how often and how long the web host’s servers—and therefore your website--are typically unavailable
    • Customer support availability and quality
     

    4. Build your site

    Once you register your domain and have a hosting plan, you’re ready to set up your site. There are a few housekeeping tasks to do before you start designing. Adjust your site’s control panel so the site is not live while you’re putting it together. While you’re at it, close comments for now. You can reopen them later if you add a blog to your site, and in the meantime, you won’t have to worry about random spam comments or visitors seeing your site while it’s ‘under construction.’ Pick a site template or use a website builder tool to start creating your home page. You can set it up however you like. Just keep in mind that a good business website must have these elements:
    • A responsive design, so your site will be easy to read and use on smartphones
    • Your business name and a short, descriptive tagline in the page header
    • A clear, brief explanation of what your business is and what you do
    • A bit about you, your business, your accomplishments, and testimonials from customers
    • Contact information (phone number and email address) on every page of your site
    • A product list, shopping cart, and checkout if you’re selling products online
    These are the basics, of course. You can add photos, product videos, a blog, and other elements to your site over time.  

    5. Test and update

    Once you get your basic site set up, view it on as many devices and browsers as you can. Ask family and friends to help you by checking it out and reporting any problems with page display, load times, and navigation. Fix any problems and then view it again. When you’re satisfied, go back to your host’s control panel and make your site visible to the rest of the world. Your site is live, but that’s just the beginning. Schedule regular site-maintenance time to add features, make changes, and keep your template and plugins up to date. Regular maintenance makes the site more secure and helps it look its best. You may also want to subscribe to a site backup service to maintain the most recent version of your site and spare you the trouble of rebuilding your site if there’s ever a problem during a template or plug-in upgrade. After you’ve done all these steps, you have a basic home business website that you’re ready to promote. We’ll talk about the promotional tools you’ll need to get started in the next HostGator Home Business Guide post.

    Ready to get started? Download our FREE eBook: Launch Your New Home Business!

  • A Home Business Budget Template To Organize Your Finances

    Thursday, January 12, 2017 by

    Home Business Budget Template

    Things are about to get real. We’re up to chapter 4 of the HostGator Home Business Guide, and this is the stage when we go over the permits, licenses, tax documents, and other financial must-haves you need to set up your new business. Speaking from experience, it can be tempting to stall at this point, because dealing with paperwork can be tedious and time-consuming and because taking these steps makes your business a real entity. But this is also the exciting part, because once you have these ducks lined up and marching in order, you’re free to focus on your website, marketing, and sales. Here are the seven steps to get there.  

    1. Choose your business structure

    This sounds complicated but most of the time it’s really easy. Sole proprietorship is the form most new businesses take, and it can be the best choice if you’re the only one running your business, you’re not selling something that costs a fortune to produce, and your business doesn’t involve a lot of financial risk or liability exposure. The SBA has a great summary of the pros and cons of sole proprietor status. For example, you don’t have to file a separate federal tax return for your business, and you won’t need a lawyer to file startup documents. On the other hand, you’re fully liable for any debts your business racks up and for any actions by your employees that incur costs. Other business structure options include: partnerships, limited liability companies, corporations, and cooperatives.  

    2. Get your business permit, tax permit, and any necessary licenses

    Your city or county will require you to get a permit to operate your business, and your state may require a license, too. If your business will collect sales tax, you’ll need a permit for this that you’ll be required to display where you make sales (including at your vendor table if you sell at various events). Depending on where you live, you may have to go to city hall or your county courthouse to get your local permit, but you should be able to get your state paperwork done online. Some businesses require extra certification. For example, home childcare operators typically have a long list of state licensing requirements to make sure their homes are safe for the kids in their care. Home chefs and cooks may have to comply with food safety regulations. Find out what’s required for your business now so you don’t have to pay costly fines for noncompliance later.  

    3. Get your IRS Employer Identification Number

    Yes, you’re an employer, even if you’re a solopreneur and your only employee is yourself. You’ll need an EIN to open your business bank account, and you can use your EIN instead of your Social Security Number on some forms (like W-9 forms for independent contractors) to safeguard your identity against hackers and loss. Small business owners can apply for an EIN online.  

    4. Open a business bank account

    At the very least, you’ll need a business checking account with your local bank or credit union to avoid a tax-time nightmare of commingled personal and business funds. Shop around for account options that won’t cost you a fortune in fees each month, and make sure you’ll be able to download your transactions into QuickBooks or other accounting software. To keep more of your money for your new business, you may not need to buy paper checks for your new account, at least not right away. You can probably do just fine with a debit card, online bill pay, and a counter check when something absolutely has to be in paper check form.  

    5. Figure out your budget

    You can set money aside in your business account for your startup costs and to cover ongoing expenses until your business is self-sustaining. We’ve put together a free budget template, based on the IRS Schedule C sole proprietorship profit and loss form, to help you plan for the most common expenses. Remember that every business is different, so you may need to remove some categories or add your own custom categories. Basic Home Business Budget from HostGator.com Home Business Guide

    Click here to view the free Home Business Budget template.

    Once you open the budget, click File > Make a copy... to add an editable version of the spreadsheet to your Google Drive. Alternately, you can click File > Download as... to download a version to edit offline. The template is set to automatically total up your income and expenses, and losses will be shown in red font. Your expenses won’t be the same each month, of course, so it’s important to plan month by month to see when you can expect to earn and spend more (or less). Fixed costs, like insurance, your business phone plan, and any rental fees, are unlikely to change much. Variable costs, as Inc. explains in its detailed business-budget breakdown, change depending on your volume of sales. Expenses like postage, packing supplies, raw materials, and wholesale purchases usually rise when sales are strong and drop when sales are slow. On the other hand, you may spend more on ads and marketing campaigns when sales drop. Knowing what to expect over the course of several months or a year can help your business avoid running out of cash when high variable expenses coincide with slow sales. If you can afford to consult with a CPA at this point, he or she can give you tips on how to organize your record keeping, point out any expenses you may have overlooked, maximize your potential deductions, and stay on the right side of IRS rules.  

    6. Protect your business

    It’s a good idea to talk with the agent who handles your homeowners or renters insurance about your new business. You’ll want to learn if your business equipment, inventory stored at home, and anything else related to your new gig is covered under your current policy. If it’s not, find out what your coverage options are. If you offer services (such as web design, bookkeeping, or writing) you may want to look into professional liability insurance.  

    7. Choose your contracts

    This step is for you if you’re a service provider or sell products to other businesses. Do some online research and talk to others in your field to learn what kind of client contract is standard in your industry. Find some templates and use them to customize a version for your business. (It’s always a good idea to have your standard contract reviewed by a lawyer before you start using it, and to stick very closely to a lawyer-approved document.) There’s more, of course. For now, though, working through these steps will have you officially in business and ready to take the next step in the HostGator Home Business Guide – setting up your business website.

    Ready to get started? Download our FREE eBook: Launch Your New Home Business!