1. News Update
2. Welcome to Issue Twelve, Summer Speaking Tour Update
3. Book Excerpt: What is Marketing?
4. An Introduction to Financial Management
5. Free Content for Your Web Site
6. Featured Organization of the Month: Junior Achievement
7. Closing Notes
8. Products by Ryan Allis

Industry News

April 29 - Google filed with the Securities and Exchange Commission for their Initial Public Offering on Thursday, hoping to raise $2.7 billion.

Updates on Ryan's Companies

Virante, Inc. continued strong growth this month as it hired new employee Malcolm Young to take over as Director of Client Services. www.virante.com

Broadwick Corp. gained 90 new clients for its permission-based email marketing software IntelliContact Pro in April to reach 291 in its highest sales volume since inception. In April Broadwick added improved message reporting, forward to a friend, live chat support, and twenty-four new newsletter templates to its IntelliContact Pro service. Broadwick sealed partnerships with MonsterCommerce, Searchfeed.com, and Miva in April. The team at Broadwick gives its best to Josh Carlton who completed his last day on Friday. Josh will be getting married in June and starting an Masters in Advertising program at the University of Texas in August. www.broadwick.com | www.intellicontact.com

Well it's a bit rainy today, but overall the flowers are blooming and the blue skies are beautiful here in Chapel Hill as another school year comes to a close. Welcome to issue 12 of the Entrepreneurs' Chronicle. This month, we include an article by myself entitled, "What is Marketing?" and one article from YoungEntrepreneur.com on the basics of financial management.

Virante, my web marketing and search engine optimization consulting firm is excited to announce an item of note. As mentioned above, new employee Malcolm Young began work on Thursday as our Director of Client Services. If you are interested in optimizing your web site for the search engines, going after a position on a competitive search term, or improving your online sales, I encourage you to contact Malcolm at myoung@virante.com with a description of what you are looking for.

Personally, I am excited to announce that I will be going to Lagos, Nigeria August 15-23 to be the keynote speaker at the First Nigerian Youths ICT Empowerment Conference 2004 in front of 2,000 attendees. The conference runs from the 19th through the 21st. Prior to the conference, I will be speaking at the following locations in Nigeria.

• British International School, August 16, 10am-2pm
• University of Lagos, August 16, 4pm-8pm
• Covenant University, August 17, 12pm-4pm
• Babcock University, August 18, 12pm-4pm
• Nigeria Youth Assembly, August 18, time TBD

Other confirmed speaking dates this summer include:

• June 24 - Bryant College, Boston, Massachusetts, LeadAmerica Business & Entrepreneurship Conference
• June 25 - Lake Forest College, Chicago, Illinois, LeadAmerica Business & Entrepreneurship Conference
• July 24 - Washington D.C. LeadAmerica Business & Entrepreneurship Conference

If you would like to book me to speak at your organization's event please contact Malcolm Young at myoung@virante.com. Recent topics include entrepreneurship, personal development, and web marketing. Additional information on past topics can be found at http://www.ryanallis.com.

If you have any comments, suggestions, or would like to contribute content to be published in the newsletter or online, I encourage you to contact me at ryan@zeromillion.com. Please do feel free to forward this newsletter on to your colleagues and associates. On behalf of the Zeromillion.com team I thank you for being a subscriber.

Yours entrepreneurially,

Ryan P. M. Allis, founder
http://www.zeromillion.com
The Top Entrepreneurship Resource Online

What is Marketing?
by Ryan P. M. Allis

Two shoe salesmen find themselves in a rustic backward part of Africa. The first salesman wires back to his head office: “There is no prospect of sales. Natives do not wear shoes!” The other salesman wires: “No one wears shoes here. We can dominate the market. Send all possible stock.”
- Akio Morita, Sony

Simply stated, marketing is everything you do to place your product or service in the hands of potential customers. The purpose of marketing is to get the word out about your product—and in turn to make sales of your product or service. Sales is only a part of marketing, however. While sales is simply the act of converting a prospect from prospect to customer, marketing is the process that makes sales possible including brand development, partnership creation, publicity, and advertising. Marketing is the background work that gets prospects in the door. Sales is the process of converting those prospects to lifetime customers.

The cause of the failure of many businesses is a breakdown in or lack of marketing. You can develop a wonderful product or provide a high value-add service, but if the marketing is not there, your business will not succeed.

There are two different types of marketing. The type you’ll learn in most business schools can be generally defined as corporate marketing. In a business school class on corporate marketing, you’ll learn about things like branding strategy, demographics, and positioning statements. While these subjects are important to know, they will not be of great benefit to the bootstrapping entrepreneur who does not have a million dollar budget, ten ad designers, and a sales force of one hundred.

The other type of marketing is entrepreneurial marketing. In entrepreneurial marketing, instead of concentrating on brand recognition you concentrate on sales. Without much money to spend, the return on investment (ROI) of every ad, of every campaign, is that much more important. In this chapter, I will present both the basics of marketing, the core of much of what corporate marketing is based on, as well as a complete step-by-step marketing strategy to launching your business and building it to one million dollars in sales, without spending a dime in upfront costs.

One of the most basic and most important concepts in marketing is known as the Four Ps. The four Ps are product, price, place, and promotion. If you can develop a good product at the right price, position it in a place where buyers are, and promote it well to create desire in the customers’ mind, you’ll quickly succeed in making a lot of sales.

Product

As we talked about before, your product is crucial to your success. If you have a good product, getting the other three Ps right will be that much easier. The ‘product’ includes both the actual physical product as well as product decisions such as function, appearance, packaging, labeling, and warranty. The word ‘product’ also encompasses any services you may provide. The service you provide is your product.

Price

If your price is too high, not enough people will be able to afford it. If your price is too low, you will not make any profit. On the other hand, if your price is too low, many will not buy it because they may see it as an inferior good. To best manage these forces and optimize your net profits, you will have to test many different prices of your product(s).

Place

Place is essential to building sales. Place essentially rests on positioning—the positioning of your marketing message and the positioning of your product.

In both retail stores and online, how to properly position your product is a very important skill. Without proper positioning, no one will know you exist. If you are hidden in the back corner of a store on the bottom shelf and your web site is number 3425 in the search engines for your targeted keywords, you likely will not make many sales, no matter how good your product is. We’ll talk more about how to position your product both online and off later in this chapter.

The positioning of your product is also known as your distribution strategy. A distribution strategy is developed by determining where on the value chain you want your business to be positioned, and who the buyer will be. You may sell your product to a retail store who then resells it to the buyer, a manufacturer who sells exclusively to jobbers and regional representatives, or directly to your end consumers. We’ll talk more about distribution models and strategies later in this section.

Promotion

Promotion is an essential part of the marketing process. Promotion decisions include those related to communicating your message, advertising, and public relations.

Important Definitions for Marketers

B2B – Business to Business.

B2C – Business to Consumer

Brand – The aggregate representation and reputation of your business across all those who interact with it. Includes much more than simply the logo and corporate identity.

CRM – Customer Relationship Management

Demographics – Data on customers and prospects such as gender, location, birth date, past purchases, income level, marriage status, and birth date. A marketer can better target their promotions with good demographic data.

Direct-to-consumer – Selling a product directly to the buyer without any middlemen.

Distribution Model – The levels of companies through which a product is sourced, manufactured, and then sold.

Distribution Strategy – Where and how a company positions itself in the value chain, including what type of distribution model it follows.

LTV – The Lifetime Value (of a customer).

Market Research – research about a market including the competitors and competing products, its size, and growth rate.

Retail – Selling a product to an end buyer

ROI – Return on Investment

Target Market – Who your business will be targeting with the promotions for your product. Those that are most likely to buy.

USP – Unique Selling Point, also known as the value proposition; what you do that differentiates you from your competitors.

Value Chain – A representation of the distribution model based on the value added by each type of business at each level.

Wholesale – Selling of a product to another business who will later resell it.

Ryan Allis, is the CEO of Broadwick Corporation, a provider of permission-based email marketing and list management software IntelliContact Pro and CEO of Virante, Inc. a Chapel Hill, North Carolina based web marketing consulting firm. Ryan, who is 19, is on leave for a year from the University of North Carolina at Chapel Hill, where he is an economics major and Blanchard Scholar. Additional information on the author can be found at www.ryanallis.com.

This article may be republished online as long as the byline remains.

An Introduction to Financial Management
Provided by YoungEntrepreneur.com

Financial management in the small firm is characterized, in many different cases, by the need to confront a somewhat different set of problems and opportunities than those confronted by a large corporation. One immediate and obvious difference is that a majority of smaller firms do not normally have the opportunity to publicly sell issues of stocks or bonds in order to raise funds. The owner-manager of a smaller firm must rely primarily on trade credit, bank financing, lease financing, and personal equity to finance the business. One, therefore faces a much more severely restricted set of financing alternatives than those faced by the financial vice president or treasurer of a large corporation.

On the other hand, many financial problems facing the small firm are very similar to those of larger corporations. For example, the analysis required for a long-term investment decision such as the purchase of heavy machinery or the evaluation of lease-buy alternatives, is essentially the same regardless of the size of the firm. Once the decision is made, the financing alternatives available to the firm may be radically different, but the decision process will be generally similar.

One area of particular concern for the smaller business owner lies in the effective management of working capital. Net working capital is defined as the difference between current assets and current liabilities and is often thought of as the "circulating capital" of the business. Lack of control in this crucial area is a primary cause of business failure in both small and large firms.

The business manager must continually be alert to changes in working capital accounts, the cause of these changes and the implications of these changes for the financial health of the company. One convenient and effective method to highlight the key managerial requirements in this area is to view working capital in terms of its major components:

(1) Cash and Equivalents
This most liquid form of current assets, cash and cash equivalents (usually marketable securities or short-term certificate of deposit) requires constant supervision. A well planned and maintained cash budgeting system is essential to answer key questions such as: Is the cash level adequate to meet current expenses as they come due? What are the timing relationships between cash inflows and outflows? When will peak cash needs occur? What will be the magnitude of bank borrowing required to meet any cash shortfalls? When will this borrowing be necessary and when may repayment be expected?

(2) Accounts Receivable
Almost all businesses are required to extend credit to their customers. Key issues in this area include: Is the amount of accounts receivable reasonable in relation to sales? On the average, how rapidly are accounts receivable being collected? Which customers are "slow payers?" What action should be taken to speed collections where needed?

(3) Inventories
Inventories often make up 50 percent or more of a firm's current assets and therefore, are deserving of close scrutiny. Key questions which must be considered in this area include: Is the level of inventory reasonable in relation to sales and the operating characteristics of the business? How rapidly is inventory turned over in relation to other companies in the same industry? Is any capital invested in dead or slow moving stock? Are sales being lost due to inadequate inventory levels? If appropriate, what action should be taken to increase or decrease inventory?

(4) Accounts Payable and Trade Notes Payable
In a business, trade credit often provides a major source of financing for the firm. Key issues to investigate in this category include: Is the amount of money owed to suppliers reasonable in relation to purchases? Is the firm's payment policy such that it will enhance or detract from the firm's credit rating? If available, are discounts being taken? What are the timing relationships between payments on accounts payable and collection on accounts receivable?

(5) Notes Payable
Notes payable to banks or other lenders are a second major source of financing for the business. Important questions in this class include: What is the amount of bank borrowing employed? Is this debt amount reasonable in relation to the equity financing of the firm? When will principal and interest payments fall due? Will funds be available to meet these payments on time?

(6) Accrued Expenses and Taxes Payable
Accrued expenses and taxes payable represent obligations of the firm as of the date of balance sheet preparation. Accrued expenses represent such items as salaries payable, interest payable on bank notes, insurance premiums payable, and similar items. Of primary concern in this area, particularly with regard to taxes payable, is the magnitude, timing, and availability of funds for payment. Careful planning is required to insure that these obligations are met on time.

As a final note, it is important to recognize that although the working capital accounts above are listed separately, they must also be viewed in total and from the point of view of their relationship to one another: What is the overall trend in net working capital? Is this a healthy trend? Which individual accounts are responsible for the trend? How does the firm's working capital position relate to similar sized firms in the industry? What can be done to correct the trend, if necessary?

If you have a web site that has to do with business, entrepreneurship, marketing, web marketing, ebusiness, personal development, or economics and would like high quality free content for your web site, you may syndicate the following articles from our web site. These articles are stored in zip format and can be downloaded by clicking on the appropriate link. We simply ask that you keep the author byline at the bottom of each article per the instructions included with each zip file. If you choose to use any of the articles we ask that you notify us at info@zeromillion.com.

48 Articles - Authorized Excerpts from Zero to One Million
45 Articles - Articles by Ryan Allis, June 2002 - July 2003

Junior Achievement uses hands-on experiences to help young people understand the economics of life. Junior Achievement volunteers visit elementary, middle, and high school classrooms to teach business, economics, and personal finance skills. We encourage you to learn more about becoming a JA Volunteer in your community.

This concludes this issue of The Entrepreneurs’ Chronicle. We'll see you June 1, 2004. If you are not subscribed and would like to subscribe, please visit http://www.zeromillion.com. If you would like to contribute content, become involved with the zeromillion.com team, make suggestions, or provide feedback please feel free to contact us at info@zeromillion.com.

This newsletter is published by www.zeromillion.com with support from the Entrepreneurs’ Coalition and the Center for Entrepreneurship at the University of North Carolina at Chapel Hill. The newsletter is sent using the IntelliContact Pro web-based email marketing and list management software.

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Zero to One Million Guide for aspiring entrepreneurs on how to build a company to one million dollars in sales. Price: $11.17 | More Info

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IntelliContact Pro by Broadwick Corporation is web based software that enables you to send out permission-based email newsletters to your prospects, customers, and subscribers and track campaign metrics such as opens and clickthroughs. Manage and contact all of your prospects, customers, affiliates, employees, and suppliers. With plans starting at $9.95/month and a free fully functional fifteen day demo, IntelliContact Pro is a top choice for list management software. We encourage you to sign up for a free 15 day trial or learn how IntelliContact can benefit your organization. If you have any questions about the software feel free to contact CEO Ryan Allis at allisr@broadwick.com or Vice President of Business Development David Roth at (919) 968-3996.

Virante provides web site design, web marketing consulting, and search engine optimization services. Learn more and request a quote at www.virante.com.

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"The seeds of great discoveries are constantly floating around us, but they only take root in minds well prepared to receive them." – Joseph Henry