Tips for Writing a Business Plan

download-27What is a Business Plan?
A business plan is not just a document. It is a holistic analysis of your company, the environment it operates in, and a route map to achieving success based on the resources available. Unfortunately, the image most of us have is of a 30-page bound document.

While the business-planning process is in itself a very worthwhile pursuit, most business plansare produced for a specific purpose. For example, the business plan can be used as a means to convey an idea with a view to achieving a specific goal, e.g. securing funding. Hence it needs to be tailored with the audience in mind, and good knowledge of their unique requirements will help shape a winning plan. For example, the requirements a Venture Capitalist will have in assessing a plan seeking to secure a million-pound investment will differ considerably from those of a local bank manager who needs a plan to support a small-loan application. While the former will be primarily looking for capital growth, the latter will be more concerned with security.

Why do I need a business plan?
The following list represents some of the key reasons you need to produce a business plan:

1. To plan for an uncertain future

Business planning is vital to help you manage your business more effectively. By committing your thoughts to a plan, you can understand your business better and also chart specific courses of action that need to be taken to improve your businesses performance. A plan can also detail alternative future scenarios, set specific objectives and goals, and list the resources required to achieve these goals. In short, it can help ensure that you are prepared for all sorts of eventualities.

2. To help grow your business

In an ideal world, all businesses would be self-financing in exploiting business opportunities. In reality, few are afforded this luxury, and hence, many businesses will be required to secure external investment. The production and dissemination of a credible business plan is one of the primary means by which entrepreneurs access capital when they are seeking investment to grow.

3. To commit to a particular course of action

A business plan can help a company assess future opportunities, choose the optimal one, and then commit to this particular course of action. By committing to one opportunity, all other options are effectively marginalized and the company is aligned to focus on key deliverables which will help them achieve their goals.

4. To manage cash flow

Careful management of cash flow is a fundamental requirement for all businesses. The reason is quite simple—many businesses fail, not because they are unprofitable, but because they ultimately become insolvent (i.e., are unable to pay their debts as they fall due). Cash flow forecasting is an essential part of any business plan.

5. To ensure all bases are covered

When you start a new business, the temptation is to spend time on ‘the idea’ to the neglect of the rest of the business. Entrepreneurs that lack focus tend to react to events as they come up rather than focusing on what is most important. The very creation of a business plan ensures that you cover all the various bases you need to when taking an idea from conception through to launch, and to ensure you are focussing effort on the right areas.

As you’ll have garnered from the above, business planning is an essential activity, regardless of the stage of business you’re at. The very process of producing a business plan enables management to give due consideration to the various factors that mesh together to create the opportunity they are seeking to explore, as well as the resources required and the key drivers needed for success.

How to write a business plan

Having decided to produce a business plan, there are three main ways to write one:

1. Pay someone to write it.

2. Write it yourself using Microsoft® Word and Excel.

3. Write it using a task-specific software product such as Business Plan Pro UK Edition.

If you, like many entrepreneurs, are time rich and cash poor, option 1 quickly removes itself from the equation, given the cost of having someone write a plan for you. Aside from cost, it is difficult to truely own a plan that someone else has written.

You are then faced with the choice between using Business Plan Pro® and building everything yourself, from scratch, in Microsoft Word and Excel.

How to established your businesses plan

download-26Business Planning is synonymous with start-up’s, however its use is more prevalent amongst established companies than is typically understood.

Planning is about looking to the future and making decisions today based on your assessments of likely future events. It is also about trying to minimise risks by using information available today to help you make better decisions that affect your future. The following represent a list of some of the more typical areas that established firms utilise business planning in its various guises.

Managing Costs from Key Suppliers

If your firm is reliant on the supply of certain materials to deliver the final good or service, you can be vulnerable to price increases. The price of your final product will be based on certain input prices and if they increase, margins will be squeezed.  Ryanair, the popular low cost European airline is particularly vulnerable to increases in the price of oil (as indeed are all airlines), as this is the largest input cost it has. Hence the airline has a team who are responsible for buying financial products such as futures to lock in supply at particular prices so they can plan with greater certainty.

Managing the Supply Chain

An over reliance on one supplier can lead to problems if there are supply shocks or disruptions to the delivery of your supply. Similarly from a negotiation stand point, it is easier to negotiate more favourable commercial terms if there are credible alternatives. Again looking at the airline industry, there are only 2 major suppliers of aircraft so companies with large fleets have stronger bargaining power if they keep their options open and are not locked into one provider.

Managing Cash Flow

Good Cash flow management is a vital process for any growing business. At the start up stage costs and expenses typically exceed sales for a number of months until break even is achieved. Hence companies need to ensure that they have sufficient credit in place to ensure that they do not become insolvent.

Similarly once the business is running, cash can be consumed by illiquid assets such as stock, and sales on credit can result in cash flow problems as expenses are typically paid before the cash from sales comes in. Business planning in general and cash flow forecasting in particular helps firm understand the impact sales on credit (and the average time taken to collect) can have on the businesses finances. Insolvency (or the inability to meet payments as they fall due) is a significant problem for companies who sell on credit and have a high cash burn rates/ illiquid assets.

Managing Performance

For business plans to be effective they need to include SMART objectives (Specific Measured Achievable Realistic Time bound) and need to include milestones assigned to named individuals within the company. Once actual events occur and real figures are available, management can undertake variance analysis plotting actual figures against planned figures. Any variances between these figures can then be discussed in the context of causes and potential remedies so as to help ensure the company gets back on plan / track. Business planning is an ongoing process, where top line goals are set and named individuals are entrusted then with achieving same.

Managing Exposure to External Risks

In an increasingly globalised economy numerous external factors can impact on a firm’s performance. Effective business planning can help firms identify such risks and help firms put in place processes to minimise any negative effects. One such risk could be exchange rate movements. Many companies in the Eurozone who trade with British firms have suffered as a result of the recent decline in the euro/sterling rate. Companies can lock into FX rates in advance or take alternative steps to mitigate against negative risks by diversifying their customer base in non Eurozone countries.

The Effects of Social Media For Your Business

download-28Decisions are never straight forward. We all have to make decisions armed with the best information at our disposal at a particular point in time, weighing up the Pro’s and Con’s before deciding on our chosen course of action. However ‘best information’ does not of course equate to ‘complete’ or ‘accurate’ information and many decisions are made under time duress or with incomplete information. On top of these issues, commercial decisions impact a wider group than most personal decisions and these decisions are often deconstructed publically (despite the obvious information asymmetries) unlike most personal ones. There is also a growing tendency for commentators to pre-empt commercial decisions e.g. witness recent media discussions re whether the European office of Twitter will be in London or Dublin . Similarly the ‘losers’ of decisions increasingly attempt to influence the decision seeking reversals . This article seeks to explore these issues in more detail before suggesting some things to think about if you face similar situations to those described below.

Managing Change

Managing ‘resistance to change’ has been a popular academic topic for many years. In 1979, J.P. Kotter and L.A. Schlesinger wrote an article in the Harvard Business Review called ‘Choosing strategies for change’ which sought to offer practical advice to managers dealing with resistance to change. However the concept goes back a little further as the quote from the 15th century Italian philosopher Niccolò Machiavelli illustrates:

“It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones. “

What has changed in recent years, however, is that external resistance can now be much more widespread and powerful than mere internal resistance and as a result managers have to make decisions in this wildly changed context. In many ways this change has been driven by the growth of social media which has enabled everyone to have a voice, and anyone with access to an Internet connection an ability to publish.

The Effects of Social Media

Where once people merely consumed products and services they now inform the feature set as active participants in the production as any software developer will confirm. Where once they solely consumed content, they now often add to the narrative with most online publications including commenting platforms enabling anyone to participate in the discussion. While these comments can really enrich the content, they can also often poison it when individuals hide behind a cloak of anonymity and post inappropriate comments or critiscms typically without full disclosure. What we say and do has never been subject to as much scrutiny as it is these days. Similarly the law of ‘unintended consequences’ also has a habit of coming into play when we least expect it. The following represent some recent examples of commercial decisions made where the backlash was very public.

1. Startup Britain

Startup Britain was launched in a blaze of publicity in March 2011. The aims of the website were indeed worthwhile ones, as the website sought to support and advance the cause of entrepreneurship in the UK. However soon after launch, blogs and forums were full of scathing comments ranging from criticism of the features to criticism of Mr Cameron’s involvement. The ‘Create a Logo’ feature was one immediate victim of the backlash and the (foreign) 99designs.com offer was quickly replaced with a link to the (local) DBA homepage .

2. Gap

US clothing retailer, Gap ditched its new logo within one week of unveiling same following an ‘outpouring of comment’ online. Apparently more than 2000 comments were posted on their Facebook page, many of which ‘demanded’ the return of the original, a wish which was duly granted.

3. Zipcar

Following Zipcar’s $50m IPO in April, some critics argued that the institutional investors had significantly under priced the deal. “Zip Car’s IPO Underwriters Just Screwed The Company To The Tune Of $50 Million” screamed the headline in a post on Business Insider by ‘Editor-in-Chief’ Henry Blodget .

Other examples where there has been significant ‘public outcries’ include; Spotify’s recent decision to cut back their ‘Freemium model’ limiting the number of free plays the user can listen to , and the unveiling of the London Olympic Logo which some commentators described as ‘puerile’ .

How to deal with a backlash

As the above examples illustrate, decisions made by known brands (in particular) can attract the most intense reactions often from the most unexpected quarters. Here are some things to consider when faced with external resistance.

  • Make sure to get impartial independent feedback where appropriate so you can ensure a full sanity check before a launch/ or an announcement.
  • Remember you have access to more data than the critics i.e. some of this data is commercially sensitive or is not in the public domain so they do not have the ‘full picture’.
  • Some decisions will never be well received, particularly ones where services that have been free suddenly incur charges. Well rehearsed and logical responses can be prepared well in advance.
  • Be prepared to reverse your decision when either new evidence emerges after the fact. As British Economist John Maynard Keynes once said in response to accusations he was flip-flopping on some issue: “When the facts change, I change my mind. What do you do, sir?
  • You do not have to engage in a dialogue with the public – particularly when faced with criticism from anonymous commentators with undisclosed interests. However be prepared to overturn a decision when faced with over whelming resistance (as distinct from a vocal minority) from fully transparent critics with well argued cases.
  • Do not rush to judgment. A backlash does not mean a bad decision. The London Olympic logo was not withdrawn despite the barrage of criticisms it attracted when launched.

4 Common Mistakes to Avoid While Preparing a Perfect Collection for Your Store

Are you worried about your fashion retail store not getting the attention you want? Well, there could be a plethora of reasons for this, right from poor brand marketing to improper store location. But the crucial factor which affects the impression and reputation of your store is your collection of apparels. Your collection alone has the power to pull crowd and create a buzz no matter where your store is located or how you have priced the items.

And if you are worried that you have a small-scale business and cannot afford to invest on designer wear, then the perfect solution for you would be to contact a reputed wholesaler with an amazing repertoire of clothing items. Buying in bulk is a wiser decision for your overall business because it is cost-effective and allows you to allocate those funds elsewhere where it deems to be necessary. But before visiting a wholesaler, beware of the following mistakes that you are quite likely to make. Check them out now.

Being Ignorant about the Target Audience

Do you know the people you are catering to with your business? If not, then this can cause a big milestone in your path to success. This is true not only for the fashion industry but also for every other kind of business that exists. Make a list of the gender group, age bracket, etc of the people you wish to cater to with your products. You can divide your store into various sections- men, women, and kids. And then, visit the wholesaler to pick and choose the clothing items accordingly.

Not Being Aware of the Latest Trends

Since you are in the fashion industry, you must know that this space is prone to constant changes. Every season is different, and there are new trends flocking near your doorstep before you can bid adieu to the earlier one. In such a scenario, if you are unaware of the latest trends, it can spell doom for your business. Nobody likes an old-fashioned and outdated collection. So, before visiting the wholesaler and closing the deal with him, check the fashion magazines, go through the popular movies, and try to understand what is selling. Create your win-win moment by providing your customers with the chicest clothing that is trending this year.

Neglecting the Customers’ Needs

Apart from taking care of the whims and fancies of your customers and paying close attention to their fashion sense, you must also emphasize on the needs of your patrons. The basic rule of demand and supply remains the same for any type of business. So, the demand for stylish clothing is not just based on the latest trends or what a celebrity was sporting, but also what your customers need at the moment. Prepare a collection which does not meet the needs of the customers will definitely have an impact on the sales of your store. So, deploy a research wing who can study the customers’ needs and wants for the betterment of your business strategies.

Lack of Industrial Knowledge

Without gaining a proper knowledge about the fashion industry, you will never be able to establish requisite goals for your business, thereby limiting your chances of gaining a competitive edge over your rivals. Not having much idea about the industry also restricts the vision you have for your store and your store will also fail to reach the pinnacles of success it deserves because even the marketing strategies have to be plotted according to how the industry works.

So, these were some common mistakes that you should steer clear of while visiting a good wholesaler. And even while choosing the wholesaler, take referrals and recommendations, compare prices, and most importantly, browse through his or her collection of both, the seniors as well as juniors wholesale clothing.

The Process of Business Plan

The business plan process is simply the steps you go through and actions you take when producing a business plan. In effect, it describes how you produce your business plan. While most people focus on the ‘final output’, i.e. the business plan itself, the business planningprocess is extremely important for entrepreneurs.

The process of producing a business plan forces entrepreneurs to examine areas of their business that typically may not be subject to much scrutiny. For example, entrepreneurs do not tend to routinely produce cash flow forecasts, so the requirement to produce one as part of the business planning process forces them to consider the impact of cash on their business.

The business plan process typically begins with an event, be it the need to produce a business plan when seeking investment, or to obtain short-term financing from a bank. Once a business plan is needed, the entrepreneur has to then decide how they are going to go about producing the plan. They will need to undertake the following:

  • Decide who is going to write the plan (if not themselves).
  • Gain an understanding of what a business plan contains.
  • Decide how to write their plan (typically using business planning software such as Business Plan Pro).
  • Ensure that they know the content for the various sections of the business plan.
  • Collaborate with partners or with colleagues from various departments (if the plan is for a bigger firm).
  • Make sure the financials are realistic and accurate.
  • Have someone review the plan.
  • Print and bind the plan (if a formal document is needed) and/ or produce a presentation.
  • Submit the plan to the recipient.
  • Update the business plan as new details emerge.

The great thing about the business plan process is that it forces the entrepreneur to consider their company holistically, as well as forcing them to consider their future, rather than merely the present day-to-day operations. Entrepreneurs who have spent the time thinking about seasonality in their sales forecasts, the implications of ordering and storing large amounts of inventory, or the short-term drop in productivity that comes with new hires, are less likely to be caught unawares by sudden cash shortfalls and other typical business challenges.

 

Business Plan

A business plan is essentially a more detailed version of your business model. A business plan has been traditionally understood as a physical document, although increasingly this view has changed as business plans have migrated online. The business plan format very much depends on the context and business plans are often verbalised via presentations where a presenter pitches their business plan to an audience. Business models are more likely to take the form of either simple verbal descriptions or one page visual representations which can either be produced before a business plan or as part of the same planning process.

Alexander Osterwalder, co-author of Business Model Generation, agrees with the link, arguing that:

‘..when you have designed and thought through your business model you have the perfect basis for writing a good business plan.’ 

It is also worth noting that there are increasing numbers of business plan critics who argue that their composition is too time consuming and that people need ‘to get building’. Some of this criticism has come from software developers (many of whom are proponents of the Lean Start-up Methodology).  I personally feel their arguments are a little simplistic and that entrepreneurs need to map out a viable business model and a business plan in tandem. I also think that the arguments are more valid in an Internet business context, where it is relatively easy to bootstrapa low-cost website which can be used for feedback and constant iterative development.

If you are looking to build a new business and are about to draft a business plan, you should also spend time working out your optimum business model as well as drafting a visual representation of it.  You can use the following framework to map same. In recent years there has been significant innovation in the range of business models, and some of them may be of relevance to your offering. Finally, it is also worth noting that some business models such as the Internet bubble model have largely had their day. Very few investors will invest in businesses these days that have advertising at the heart of their business model.

The benefit of traction

While the phrase ‘traction’ has typically been associated with tyres, friction and slippery driving conditions, its use is increasingly common in entrepreneurship and venture capital circles. This article explores what it means and how it applies to your business.

Defining Traction

The typical entrepreneurship journey moves through various stages, from idea conception tobusiness plan to execution and then growth (or failure). For most entrepreneurs, the journey is challenging because they need to perform many activities simultaneously while always being conscious that they may run out of money in the near future. To fund this gap, investors often turn to early stage investment, which they are more likely to get if they can prove traction – some clearly identifiable momentum and progress so far.

Investors need to carefully balance risk and return and will be well acquainted with the harsh realities of early stage investment, i.e. that most startups fail. As a result, they will be trawling through the evidence you provide (often in the form of a business plan) to assess whether or not a commercially viable business opportunity exists in which they should invest.

For the most part, investors will need to take a leap of faith with early stage investments, relying on the assumptions contained within your business plan to help them decide whether or not to invest (and if so, on what terms). If you, the entrepreneur, can demonstrate that you have gained some traction, especially by proving customer demand with a record of actual sales, you are essentially reducing the risk for them; factual evidence will always trump assumptions, projections and wild conjecture.

The most persuasive evidence you can provide that your business is worth investing in is ‘evidence of demand’. Clearly if this demand is translated into sales, you have irrefutable evidence that the startup has traction. The greater the sales, the greater the proof.

In terms of the ‘traction hierarchy’, active users and letters of intent probably fall into the next tier, below real sales, finally followed by viewer numbers (on your website). While growing visitor numbers to a website was once a good barometer of the potential of a business, it is no longer considered a valuable proxy. These visitors have to convert to sales and, hence, the focus returns to the one piece of evidence that trumps all others – real sales.

Why is all of this important?

One of the problems entrepreneurs face is that their energies and focus are spread widely, as they can get distracted by the most pressing challenge to hand (regardless of its relevant importance in the bigger picture). There is so much to do and so little time. Hence, they can have an excessive product orientation, focusing predominantly on product design, without really addressing wider concepts such as addressable market size, customer acquisition costs and sales forecasts, etc. Business plans can really help ensure entrepreneurs retain focus. They force you to take a holistic view of your business opportunity. However, not all entrepreneurs embrace the principles of business planning, and even those that do may not have a strong focus on ensuring all activities are correlated with the core aim of gaining traction.

Entrepreneurs need to conclusively demonstrate that there is strong evidence of demand. They need to concentrate efforts on the area of product /market fit, a concept Steve Blank has explored in detail in his book, The Four Stages of the Epiphany. Blank states that the primary role of an entrepreneur is to iterate and test assumptions and hypotheses they have made with regard to customer behaviour and demand until they find a commercially viable business model.

‘Your startup is essentially an organization built to search for a repeatable and scalable business model.’

Do You Should Approach the Dragons Of Entrepreneurs

The Dragons’ Den is one of the more popular business programmes on the BBC, with average viewer numbers in excess of three million . The format is pretty simple – entrepreneurs pitch the dragons (wealthy investors) with their business plan. The entrepreneurs are looking for investment (as well as advice) in return for an equity share in the business. Now in its 9th series, the show has been going from strength to strength. However, what is not always evident is that many of the so-called “successes” often represent bad deals for the entrepreneurs, where they give away too much equity in return for modest investments. This is typically the case in instances where the proposition has already been de-risked by way of existing trading history, letters of intent, sales etc., or where you need the cash to fulfil orders, or to expand.

If you have a serious business proposition (and I use this phrase deliberately, as some entrepreneurs are clearly selected based on entertainment potential), you should adapt a very different strategy in the Den. You should use the opportunity primarily as a marketing exercise where you are in effect pitching your product or service to the British public at large. In many cases it is likely that appearances on the show will result in significant interest afterwards. (Given the BBC recognises this, it is likely they will try and dumb down any overt marketing). Here are some tips as to activities you need to undertake prior to appearing on the show so that you can maximise your return.

1. Ensure your website is up-to-date (and can deal with a traffic spike) and that the phone lines are well staffed. The increase in profile from TV will result in a significant increase in interest in the days following the show.

2. Unless you get an offer from the dragon you target (and on your terms), walk away. While there is definitely a premium to their money in terms of media interest, they will be exceptionally busy investors and may not bring enough to the table aside from the cash.

3. After the show, it is important to use your new-found fame (which may be short lived) to engage with more suitable investors who can provide smart money on more attractive terms (i.e., the cash you need at the equity share you want to give up) as well as access to distributors/ retailers or to key contacts.

4. Use PR to leverage your appearance on the show. All media like an angle, and given the importance of popular culture, an appearance on a “reality” TV show should open many doors. It is good to work on a number of stories to help you gain additional exposure after the show.

5. Undertaking an analysis of the appearance by Ling Valentine (who “entered the den” in February, 2007) would be a worthwhile investment of your time. Ling gives a detailed summary of her appearance on the show on her website and also demonstrates that she is an extremely shrewd business person as well as a great marketer. Explaining her decision (not to take investment), Ling says the following:

“All I could think about was that I could get that cash in 30 seconds from the bank for no equity stake, and that I could not face giving away a third of my business for that, I had a proven business and they had no risk! After the Den I had some regrets, mainly wondering if I had lost out from not working with Duncan and what I had potentially lost from Richard’s end-game expertise, but since my episode aired I have been incredibly busy.”

Indeed, her appearance sparked immediate interest:
“Web visits on the night of the broadcast were over 5,000 people, and the next day it was over 10,000. I spent the whole night trying to stop my server crashing”

In summary, if you have a serious business proposition, where external parties (ideally, customers) have validated it as being serious, you will be better served using the opportunity as a means to raise your profile rather than as a means to raise finance.

Whats the best for your business

While running a small business is very rewarding, it is not easy, yet more and more of us are being enticed into starting a business, encouraged by an increasingly supportive government, which promotes entrepreneurship at every opportunity. This is good news after all; as entrepreneurs innovate, we as consumers benefit as they produce products and services that better meet our needs. Governments benefit through a greater tax take and lower social welfare costs (as well as gaining from numerous other additional benefits arising from the effects of the ‘invisible hand’). Everyone is a winner.

A Key Challenge

However, on an individual basis, a key challenge for most entrepreneurs is dealing with the sheer range and diversity of issues that they have to address when all most want to do is simply, to sell. Their knowledge base must not only span their industry sector but must cover a breadth of functional topics and issues from marketing to cash-flow management to taxation.

While bigger companies will typically have access to this knowledge in-house, smaller businesses do not have that luxury and hence have to rely on their network as well as search engines, blogs, websites and business forums for answers and help.

Social Media

One of the benefits of the growing ubiquity of social media is that information related to pretty much any subject area is available for free on the Internet, making it a lot easier to access than before. The quality of information that is available for free is significant and search costs are exceptionally low, resulting in unfettered access to solutions to your every business problem.
But all is not as straightforward as it seems. Information gleaned from these sources is not without its drawbacks, not least the fact that, for the most part, you do not know who you are gaining the knowledge from. (This was graphically illustrated in the famous Dilbert Cartoon – ‘On the Internet, nobody knows you’re a dog’).

Some of the following issues also apply:

  • How can you assess the veracity of the information?
  • How do you ensure the impartiality of the content?
  • How do you take general advice and apply it to your own particular circumstances?
  • What if you rely on information and then act on it to your detriment?

Firstly, taking information at ‘face value’ is rarely a good thing. Consider each bit of advice as a mere data point as you seek to gather information to make a decision. You should also seek out articles supported by facts with clear attribution to source data where you can substantiate claims.

Secondly, it is important to assess the nature of your inquiry, relative to the risks associated with the decision to be made. Information gleaned from a search engine or website is no substitute for ‘paid for’ advice when dealing with legal or taxation matters, for instance. While we have all become accustomed to using search engines for information searches, we must not lose sight of the fact that nurturing a wide network of contacts whom you can call for advice is a better use of your time than surfing the net for solutions to more complex issues.
It is also worth considering the context of the information. Is it on a commercial site where the author has a commercial agenda or is it on an informational site like Wikipedia where the content is curated by a number of contributors? Articles written on branded websites, with full author accreditation (and clear domain expertise), trump anonymous postings on poor-quality websites every time. However, you must remember that, unlike professional advice, there is generally no come back if you rely on erroneous information and you suffer damages as a result of acting on it.
As an entrepreneur you also have to constantly weigh up the costs of a decision and need to become comfortable dealing with incomplete information. As Venture Capitalist Mark Suster eloquently puts it:

How to success on online marketing

Spam is any message that you send electronically to lots of people who have not specifically requested mail from you — in other words, junk email. Like a telemarketing call during dinner, spam almost always annoys, and sometimes offends, those who receive it. While sending spam may result in a sale or two in the short run, it will almost surely damage your reputation, so it’s good advice to stay clear of it. There are many better ways to use email to keep in touch with current and potential customers. Here are a few of them:

  • Invite people to subscribe to an email newsletter instead of sending unsolicited emails. Have a sign-up form on your website and explain that you’ll send only timely, informative email to subscribers.
  • Include late-breaking, useful information in the email you send to subscribers. Because it can be delivered so quickly, email is a perfect vehicle for alerting people who are already part of your community to new and interesting developments. Even a modestly self-serving message will go over well if you package it with enough truly unique and valuable content. Just keep the hype to a minimum.
  • Make it easy to quit receiving email. Every message should include brief, friendly instructions for getting off your mailing list. Even people who keep subscribing will appreciate knowing that you’ve made it easy for them to say, “Enough already!” when the time comes.