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Startup Flight Checklist Item #7: Operations and Logistics October 8, 2011

Posted by Jim Price in Business, Entrepreneurship.
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We set out a few weeks ago to examine the following thesis:  That it’s never been easier to cobble together your own business from scratch. That, with so many inexpensive outsourcing options and powerful and easy-to-use Internet-based tools available to the masses, you no longer need a whole lot of time, money or business expertise to get your new venture off the ground.

Let’s step back and see how we’re doing.  So far, we’ve zoomed in on six of the elements in the 12-step Startup Flight Checklist™ – and taken a closer look at efficient, cost-effective ways to address the following business functions:

  1. Branding
  2. Website Design & Hosting
  3. Content Management
  4. Generating Revenue Through Advertising
  5. Generating Revenue Via Affiliate Marketing
  6. eCommerce

Now let’s turn our attention to Startup Flight Checklist Item #7:  Operations and Logistics.  Yeah, I know, most of you think this is like watching paint dry.  But face it, keeping track of all of your product and parts inventory, shipping things in and out the door on-time, tracking those shipments, and so on and so on… can make or break the business.

For our discussion of operations and logistics, you ought to be able to can keep track of every unit or SKU you buy or sell, or that you ship in and out, through your accounting package.  Many eCommerce solutions enable you to interface with Intuit’s QuickBooks, the most widely-used accounting package.

And while we’re not going to delve into the topic of Finance and Accounting until my upcoming post on Flight Checklist Item #10, allow me to take a sneak peak ahead and mention that there may not be a better integrated small-business accounting package on the planet than Intuit’s QuickBooks, available in both online and traditional shrinkwrap software form.  You may also wish to take a close look at other packages at comparison sites such as TopTenReviews, SoftwareComparison, and SoftwareMedia.

As you grow, the task of tracking inventory and order workflow is the job of an ERP (enterprise resource planning) software application that would link into your accounting system.  For ERP, a good, cloud-based solution you can grow with is NetSuite, but I encourage you to comparison-shop.  Meanwhile, though, for businesses just starting out, ERP software can really be overkill,
and you can handle the job just fine with your accounting software (and maybe a spreadsheet or two).

As a startup business, once storage of product inventory has outgrown your spare bedroom, basement, or that spare cubicle, you ought to be able to outsource your storage and warehousing.  That is, you can find private warehouse owner/operators who will rent you storage space with the flexibility to grow or shrink based on your needs, saving you the trouble of having to buy or lease an entire building.  Some outsource storage providers will also handle soup-to-nuts, outsourced material-handling, providing packaging, drop-shipping, incoming and outgoing shipments and shipment tracking.  We’re talking a awful lot of in-ground business infrastructure that you don’t have to build from scratch, and a significant amount of capital expense that you can happily avoid as a startup.

Similarly, you can outsource small- to mid-sized shipments to UPS, FedEx, DHL, and/or the U.S. Postal Service.   Any of these services offer real-time, online parcel-tracking capability that has evolved to the point where entrepreneurial businesses can track the exact shipment status of each piece of inventory, finished-goods order or customer shipment in seconds on a single dashboard.

And finally, an important aspect of any business’s back-office operations these days includes the overall information technology (IT) function.  And once again, you’ll find that much of this can be outsourced or relegated to cloud-based services.  Just as you’re wise to do regular backups of your personal laptop or desktop on a cloud-based service such as Dropbox, as you grow your startup enterprise, you’ll realize that you’ll want to leverage the advantages of the cloud in similar ways.  You can look to rock-solid regional players such as Online Tech for offsite data backup, collocation and disaster recovery, or you can look to national players such as Amazon’s Elastic Compute Cloud (Amazon EC2).


A Quick Note on eCommerce for Artists and Artisans October 4, 2011

Posted by Jim Price in Business, Entrepreneurship.
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A big thank you to artist/entrepreneur Kelley Heath Faley for this heads-up.  I mentioned Kelley in my last post with her wonderful Whim Z Designs online business of original watercoler-based products such as magnetic bookmarks, clocks, art cards and matted prints.  Another outlet for artists and artisans, she noted, is a site called Etsy (http://www.etsy.com/).  The best way I can describe it is an online Ann Arbor Art Fair or virtual New Hampshire Art Fair.  Very cool, and entirely complementary to an artist having her or his own eCommerce site.

Startup Flight Checklist Item #6: eCommerce October 3, 2011

Posted by Jim Price in Business, Entrepreneurship.

Let’s get back to the Startup Flight Checklist for Launching Your Business  that we started talking through back in July – and take a close look at Item #6: eCommerce.

Setting up your own Internet storefront is really quite easy – and inexpensive – these days.  So if you have products you’re interested in selling directly to your customers, whether they be consumers or businesses, you should think seriously about setting up an eCommerce site.  It’s quick, it’s inexpensive, and it doesn’t require technical expertise.

As I see it, there are four basic approaches you can take – all of which work just fine – that offer you everything you need to design, launch and operate a pretty high-quality store:

  • DIY (do-it-yourself) site-design software packages
  • Website design and hosting services
  • Amazon Webstore
  • Outsourced eCommerce design and hosting services

All four of these approaches provide you with the essentials you need for building and operating a high-quality online store:  many alternative design templates, shopping carts, secure payment processing including ability to use PayPal and credit cards, and so on.  Let’s take a look at each one in more detail:

If you choose the DIY site-design software package route, you have a number of of great options to choose from – to name a few,   Web Easy Professional, Web Easy Studio, Microsoft Expression Web (which recently replaced FrontPage), Microsoft Office Publisher, Intuit Website Creator, Adobe Dreamweaver Creative Suite 4, Macromedia Studio 8, Macromedia Dreamweaver 8, Adobe GoLive Creative Suite (Mac).

Check out artist/entrepreneur Kelley Heath Faley’s website, Whim Z Designs, a really nice example of the art of the possible (excuse the pun).  She and her husband used one of these inexpensive software packages and built this very elegant, professional website over part of a weekend.

A second basic alternative to consider for ecommerce is website-building and -hosting services services, which we first examined back in my post on Checklist Item #2 on July 12.  To be clear, these services – such as 1 & 1, JustHost, GoDaddy, iPage, FatCow, HostPapa, HostGator, etc. – offer the ability to design and host not just basic websites, but full eCommerce webstores as well.  They all give you the ability to design your e-tail site online, and go live with your ecommerce solution on their hosting service, with straightforward monthly pricing that scales up pretty modestly based on how much you want to do.   Many offer basic plans for under $10-15 per month, but be sure to read the fine print, because not all prices are what they appear:  there may be severe limits to how much you can do at that base price before escalators kick in.  (For example, if you get more than 100 customers in a given month, your hosting bill might surprise you.)

A third option to consider when building out your ecommerce site is to use all-in-one store platforms such as the Amazon Webstore or eBay Stores turnkey
solution.  Both of these are as good as or better than all the other alternatives in most respects – any number of of design template alternatives, secure eCommerce, an array of design widgets to use, rock-solid  hosting,  etc. – plus you have at least the ostensible marketing advantage of being in Amazon’s or eBay’s marketplace.  We’re talking only $14.99/month for Amazon’s service, and it’s highly scalable.  eBay’s got a different pricing model:  While its monthly subscription fee for hosting the store is roughly the same as Amazon’s ($15.95/month in eBay’s case for its lowest option), unlike Amazon or most other hosting services, eBay also charges variable fees as a slice of everything you sell, in the form of “insertion fees,” “fixed price format fees,” and “final value fees.”  These add up, so to choose the eBay Stores platform over other approaches, you obviously need to feel that eBay offers clear marketing advantages in other ways.

A fourth option you might consider that’s more high-end but more costly, is to work with a firm to develop a more custom solution.  One classy example is WebShopManager, which will work with you on a semi-custom basis to design an eCommerce solution that’s considerably more elaborate than what you’ll be able to accomplish with the first three options.  Hosting with a service such as this can range from $50 to $250 or higher per month, depending on the fancy features you choose to include –we’re talking not just custom site design, but features like multi-site live chat, Google Maps-enabled dealer locators, QuickBooks integration, UPS and FedEx shipping integration,  and other cool stuff that a basic starter-store doesn’t need.  But if you’re building a business that’s, for example, got more complexity – say it’s got multi-tier distribution such as selling through multiple distributors, multiple  store chains, etc. – you might consider going to the expense of a solution with this complexity.  But for most entrepreneurs just launching, this may be an unnecessarily elaborate starting point.