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July 27, 2002

Table of Contents



Quote of the Week


Featured Resource - JIMTOOLS.COM

Marketing Tip of the Week

Parting Comments

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Quote of the Week

Once stretched by a new idea, man's mind never returns to its original dimensions.

- Oliver Wendell Holmes



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Featured Resource


This site has many really nice web tools including a link popularity checker, submission tools, graphics tools, HTML tools and reusable code and much more.

Staff Article


by: Cary Christian

In previous articles we discussed the following sections of your business plan:

Executive Summary
Business Description
Industry Analysis
Market Analysis

We're going to finish up this series on writing an effective business plan between this week and next. This week we discuss your products and services and your specific plans for marketing them.


This section appears to be fairly straightforward at first glance. You are going to provide a write-up on the products and services you offer, in detail. But you should also provide information about any significant advantages you have with respect to each product or service.

Do you have exclusive distribution rights to your service area? If not, how many other distributors of your products are there in your target market? If you sell a product that thousands of other resell in your area it is not going to be as impressive. Look for other factors that might provide advantages. For example, are you the largest distributor and does this distinction put you in a different pricing category that allows you to beat your competition?

If you manufacture your own product you will need to provide some product comparison information. How do your products stack up against the industry leaders you will have identified in your "Industry Analysis" section? What sets your products apart? Are you aiming at a well-defined niche market that nobody else seems to care about? If so, what makes your product appeal to this niche market?

You will also want to address why customers need your products and the demand for them. Do you sell brands that are highly regarded in the market and effectively sell themselves? Do you have market information that backs up your claims? How do customers typically use your products? Do they buy them once and then they're out of the market or are they consumables that the customer must buy several times per year?

Be creative in describing your products and services. Resist the urge to simply provide canned descriptions of what you sell. Make the reader of your business plan get excited about your products and the sales potential for them.


Readers of your business plan are going to be very interested in this section, particularly if you are a new enterprise. You can have the greatest products on earth, but if you do not know how to market them properly, you will fail. Venture capitalists, in particular, will probably know a lot about what it takes to sell your products, so you want to impress them by not only showing your knowledge of all the "normal" channels but by presenting several unique ideas for making sales.

You will need to perform a lot of research for this section. You'll need to know how other companies market products that are similar to yours and how well each type of advertising works for these products. You should be able to find this information in trade journals that deal with your industry. Use this information as the basis for your basic marketing infrastructure and then analyze ways you can create your own unique angles.

Just as important as advertising sources is your sales methodology. Many companies forget about this and concentrate solely on advertising and marketing. Sales is a process, not a one-time event. Marketing and advertising need to feed your sales process to be most effective. Your sales process is also the area where you can set yourself apart from your competitors most easily. You can nail down the particulars of your sales methodology by answering the questions in the following paragraphs.

What happens when a potential customer requests more information by mail, by telephone, through your website, or by email? Who handles the request? How quickly does your sales infrastructure respond? What types of materials do you supply? What type of system do you have set up to follow up with these potential customers? Do you have a methodology in place that allows you to continue contacting potential customers without upsetting them? Does the process result in the customer being added to your mailing list by his or her own request?

Are all methods of communication from your customer integrated? In other words, if a customer calls for information and then later requests information from your website, do you have a methodology in place to know these two requests came from the same customer?

Describe your sales methodology in great detail. If you find holes in your existing methodology as a result of this exercise, resolve to fix them and incorporate that into your business plan. It is perfectly okay to tell the reader what you are GOING to do as well as what you are already doing. No business is perfect. He or she will respect and like the idea that you are finding new ways to do things and are committed to putting them into action. If you are attempting to raise money with your business plan, include money for this type of upgrade in your use of funds section. Most venture capitalists and bankers will think it is money well spent.

Copyright (c) 2002

Marketing Tip of the Week

If you use email marketing in your business, you have probably heard that you need to test your ads. You should be preparing several versions of every ad you use, with different subject lines and different bodies, and test each of them with smaller mailings before committing an ad to a full campaign.

Mark Joyner of is currently carrying on a public test that you can participate in and monitor. It's very interesting and should teach you a lot about what works and what does not. Not only does this test monitor which types of ads get opened most often, but it tracks which ads result in the reader taking action, which makes the test that much more valuable. You can monitor results in real time. Check it out for yourself here:


Staff Article

by: Cary Christian

By early next week the new corporate fraud bill that, hopefully, will work to prevent the recurrence of Enron- and Worldcom-like debacles, should be signed into law. Such a bill is needed to restore investor confidence and curb the effects of unbridled greed among the leadership of our largest companies. But does the bill go far enough to accomplish these goals? Let's look at the effectiveness of some of the key provisions of the bill.

- The bill creates an independent five-member board to oversee the accounting industry and grants it substantial power, including subpoena power. Each year, the board will audit firms that serve 100 or more publicly traded companies. This provision will put a leash on the largest accounting firms, namely the remaining Big 4 and some of the larger firms among the Sweet 16.

I would personally prefer to see the board audit any firm that audits a public company with capitalization that exceeds a certain amount. Nothing in the bill will prevent a Worldcom-sized company from shopping around for an accounting firm that audits only 98 public companies. By like token, auditing a firm that audits more than 100 tiny public companies is probably a waste of time and money.

But even if an auditing firm is not subject to audit, it is still subject to the rules and regulations promulgated by the board and fully subject to the bill's requirements and penalty provisions.

- In an effort to curb conflicts of interest, the bill bans accountants from doing most types of consulting work for companies they audit. This is an outstanding provision that the accounting profession has been fighting for years. In almost all cases, large accounting firms receive far more non-audit revenues from audit clients than audit revenues. This creates a major conflict of interest even though accounting firms will tell you they still maintain their independence. Yeah, right! Money talks.

- The bill prohibits an accounting firm from auditing a company if any of the company's top executives worked for the accountants in the previous year. This provision is a good one as well. Accounting firms look to former employees who move on to positions with clients as a source of new business and as a friend on the inside. The relationship with such former employees is a conflict of interest.

- The bill adds criminal penalties of up to 10 years in prison for corporate financial fraud or obstruction of justice, including the shredding of documents. I really like this one! Corporate executives who stand to gain millions of dollars in stock options and stock appreciation by looking the other way when corporate earnings are fraudulently overstated have been perfectly willing to assume the risk of a slap on the wrist and a fine from the SEC. It will be a different story when he or she is facing 10 years in prison for such activities.

- Civil fines, penalties, payments and assets from corporate wrongdoers will now be placed into a federal account for the benefit of defrauded investors. This should allow investors to recover some of the value lost due to corporate fraud should it occur again. Currently fines and penalties collected goes to the government, not to defrauded investors.

- The bill requires companies to immediately disclose any and all large off-balance-sheet transactions or other material changes in financial condition. Another good one! These are the types of transactions that led to Enron's downfall. Early disclosure of such transactions will allow the market to react much more quickly and prevent sudden total loss of value to the stockholders. The disclosure requirement will also work to prevent corporations from entering into these types of deals unless they truly add value.

- The bill bars corporate wrongdoers from serving as company officers or directors for life. Outstanding! Get caught once and you'll never have the chance to do it again!

- The bill increases the enforcement budget of the Securities and Exchange Commission. This was necessary. The SEC simply did not have the resources to properly police our public companies. It earmarks $98 million to add not less than 200 additional qualified professional personnel, additional support staff and other resources needed to strengthen SEC enforcement efforts.

- The bill bans personal loans by corporations to their executives unless the corporation is involved in the lending business and extends credit to executives in the same manner and on the same terms as it extends credit to the general public. ALL personal loans to executives SHOULD be banned and the law as written should put an end to such activities.

- The bill requires CEOs and CFOs to give back bonuses awarded on the basis of misleading financial statements. This is only fair and is an excellent provision. Executives should not be able to profit from their misdeeds as they have been able to do in the past.

- The bill requires top company officials to certify the accuracy of their financial reports to the SEC. This seems to be a fairly innocuous provision that doesn't add a lot of value. After all, these executives are responsible for financial reporting anyway. But this certification will make it much easier to successfully prosecute those executives who step out of line and, as such, is actually an important provision.

Additionally, fines of $500,000 to $1,000,000 plus a five or ten year prison sentence accompany improper certifications!

- The bill also contains provisions related to the independence and objectivity of securities analysts. The provisions provide guidelines and timelines for the development of rules, so it does not have teeth yet, but it is a step in the right direction.

- In addition to new provisions, the law significantly strengthens existing laws and specifically requests the United States Sentencing Commission to consider whether criminal penalties for "white collar" offenses should be stiffened.

Overall, I believe this bill is an excellent beginning. It actually goes further than I thought Congress would go and appears to be a very serious effort to make much-needed changes. There will no doubt be bumps along the way and adjustments that have to be made, but we finally have some legal accountability required of corporate executives and accounting firms.

I want to thank all of you who actually wrote your Congressman on this issue as I requested. It turns out that the Worldcom debacle probably did more good to further this legislation than millions of letters could have ever done, but the effort is appreciated and Congress does listen to you. After all, in this country YOU are the boss!

Copyright (c) 2002

Parting Comments

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