How do I select the best business for me? - Shoptalk - Column

Home Office Computing, Dec, 1991 by Carol Milano

As vice president of a communications trade association in my city, I recently had the pleasure of giving the welcoming remarks at our fifth anniversary celebration. I confided to members and guests that the first thing that helped me develop some roots and a sense of attachment to this community was finding the group four years ago.

I told them how, wanting my marketing communications firm to branch out into the lucrative newsletter area, I approached the board of the association to suggest they begin producing a newsletter for members. I anticipated that all-volunteer group's leaders would respond, "Sure--if you volunteer to write and edit it." They did. I did. And a year later, my portfolio held six lively, well-designed newsletters I could show to my prospects. Today, newsletters are one of my company's main profit centers.

Successful entrepreneurs know how to utilize professional associations. These groups not only provide a source for prospective business contacts, pertinent information, and support, but they also offer a valuable opportunity to hone your skills.

CHOOSING THE RIGHT BUSINESS

Q. I'm looking into possibilities for a home-based computer business. Where can novices look to figure out which business is best suited to their interests and abilities, and what they need to know to get started?

MARK MARLER Springfield, Missouri

A. To help pinpoint a business matching your background and preferences, invest in a few sessions with a career counselor knowledgeable in entrepreneurial topics. Some career counseling centers offer workshops on career change or entrepreneurship.

The advantage of working with a counselor is the individual assessment and undivided attention you'll receive. In a workshop, you'll benefit from the diverse experiences and perspective of all the other participants. In either case, you should come away with fresh and stimulating ideas about fields to explore in more detail. Check the yellow pages under "Career & Vocational Counseling" for a career center or workshop near you. HOME-OFFICE COMPUTING's April 1991 article "Which Business Is Best for You?" may alsoprovide you with insights into choosing a business that best suits you.

Once you choose a field, a good place to find out how to get started is a local Small Business Development Center. The telephone number for the center in Springfield, Missouri, is (417) 864-7670. Programs are operated in 47 states and are partly funded by the U.S. Small Business Admininstration. Individual business consulting and seminars on special topics important to small-business owners are free or very inexpensive. The Service Corps of Retired Executives (SCORE) is another SBA program that may be able to help you. In free individual sessions, seasoned business vetreans can advise youabout starting your own enterprise.

For more information on both these programs, call the SBA Hotline at (800) 827-5722 from a touch-tone phone; you'll be guided to the information you need.

DIRECT-RESPONSE ADVERTISING

Q. I'm starting a mail-order bookstore. How much will a full-page ad with a pullout order card cost in a trade magazine? What kind of response rate could a trade ad bring? Is there a book or othre source for this information?

KEVIN M. RHODES Fort Leavenworth, Kansas

A. Direct-marketing specialist Elizabeth McCaffrey, who has worked for many leading book clubs ad publishers, advises heading to the nearest business library for the current volume of Standard Rates & Data (SRDS). "This is the place to start looking for your target audience. SRDS lists consumer and trade publications by category," explains McCaffrey. "Once you find your category, SRDS gives the type (netstand vs. subscription) and size of circulation for each publication. Rates vary from one publication to another, and SRDS lists the advertising rates and sizes, and any discounts for frequency." For example, a full-page, black-and-white, one-time ad with an order card in Top Shelf: Barkeeping at Its Best costs $17,610.

In direct mail, the rate of return measures effectiveness. (A successful mailing is one that yields a response of 1 percent or higher.) Direct-response print advertising uses a different measurement, McCaffrey notes. "The benchmark of success is reaching the largest target audience at the lowest cost per order (CPO). An average CPO is $18 to $20. The CPO should be your deciding factor as you research, create, test, and market your mail-order bookstore."

When you call a publication to request a media kit (for prospective advertisers), ask about its readers' direct-marketing responsiveness. Cross-check how responsive a publication's audience is by looking it up in the Direct Mail List & Data Directory (also published by Standard Rates & Data Service), available at a business library. Running a bind-in order card along with your ad is a proven method of increasing responses, but be sure to test whether the cost of binding in a card raises or lowers your CPO, says McCaffrey. Advertising is a good way to gain exposure for your product. But always keep in mind that quality, placement, and repetition of an ad are important when rating its effectiveness.