Small Business Buzz
Friday, April 6th, 2007Executive Summary, Table of Contents and Appendix - How to Write a Business Plan – Part 6 of 8
THE EXECUTIVE SUMMARY
The executive summary is the most important part of your Business Plan and, in fact, should be the first section. However, you can’t do the executive summary until you are finished with all the other sections, which is why I saved it for last.
The executive summary is exactly as it name implies – it is a summary of your entire business plan. You also need to include a brief history of your company. The entire executive summary should not be longer than four pages. Consider using a bullet system to highlight information and make a smoother read. You want to provide information, but you don’t want to bore potential investors/lenders from the start. This is what will either grab their attention or give them the urge to find a wastepaper basket.
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Define Strategies, Service & Product Line - How to Write a Business Plan – Part 4 of 8
MARKETING & SALES MANAGEMENT
Without marketing your business and your product/service, customers have no way of knowing that you’re out there. While the information regarding the organization of your business is important to investors, knowing your marketing plans is equally as important, since the marketing you do will generate revenue.
Marketing Strategy
You need to define your marketing strategy. Granted, your marketing strategy will often change, as you evaluate its effectiveness and changes in your business require changes in your advertising. But you do need to have a basic strategy in mind, which includes the following elements:
1. Market Penetration
In order to obtain customers, you have to make yourself known in the market. While you need advertising to do this, you also need to have a means. In other words, you need to continually develop new products and innovations to keep the customers interested. Market penetration requires using new products in existing markets and new markets using existing products. Explain in your business plan how you intend to penetrate the market.
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Hard to Find Employees
It’s getting harder and harder to find good help these days. And there are many factors contributing to the problem that you, as a business owner, need to be aware of.
First of all, there is an increased number of young people seeking jobs that require more brain skill than brawn skill, which is making an increased shortage of employees for the manufacturing industry. Mechanics, engineers, freight and delivery truck drivers, machine operators and construction workers are some of the hardest positions to fill.
Another issue is a lack of adequate compensation for the demanding job. Teachers, for example, on a national average really get gypped when it comes to their annual salary and benefits. Though many seek a teaching career for the joy of the work, rather than the pay, there is also a lack of valuable, qualified teachers all over the nation because many just can’t afford such limited pay to support their own families, no matter how much they love to teach.
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Professional Employer Organization Services
Many businesses, especially small ones that don’t necessarily have the man power for all of their human resources, needs use services provided by professional employer organizations (PEO). If you think you might be in need of payroll and various other services, there are some things you’ll need to think about first.
When You Need a PEO
• If you need to provide competitive benefits, such as health insurance, in order to recruit and keep employees. PEOs negotiate rates with insurance carriers for their entire clientele as a whole, which usually gets a better rate for everyone.
• When your business has strict regulation and compliance requirements on the state and federal level that would be difficult and time consuming to keep up with, such as businesses dealing with hazardous chemicals or explosives.
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New EEOC Guidelines Expand Employee Protection
On May 25th the Equal Employment Opportunity Commission (EEOC) released a new set of guidelines meant to protect those with caregiver responsibilities from employee discrimination. This includes, but is not limited to, employees with children, who care for the elderly, or who have an ill spouse, parent or in-law. These guidelines, of course, are meant to protect both men and women.
What the EEOC intends to protect is the employee’s ability to be available for those who are under his/her care. Some of the discriminatory issues that may arise, and the EEOC intends to prevent, are inflexibility in schedule (including mandatory overtime) and stereotypes that those who are deemed caregivers are less committed to their job and less deserving of promotions, raises and the like.
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The Cheapest Gas Prices in the Nation
New Jersey requires all of its gas stations to be full service (as does Oregon) and is the only state in the country where gas prices still average under $3 a gallon. So how in the world is a full service gas station keeping its gas prices lower than everyone else?
According to Doug MacIntyre, senior oil and gasoline analyst with the EIA, cost has little to do with it - it’s all about local supply and demand conditions.
And it doesn’t hurt that New Jersey has four in-state oil refineries that have yet to have any problems like those in the Midwest, which have caused Chicago’s gas prices to average more than San Francisco’s, which is known for some of the highest prices in the nation. Another beneficial factor is that New Jersey is the main port for gasoline imports from Europe.
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New Technology Leaves Spell-Check in the Dust
We all use spell check. Admit it, you know you do. Even with a degree in English, spell check is critical to my daily routine at a law firm. What is incredibly frustrating is when I want to know more than if a word is spelled right. I want to know if the sentence actually makes sense and sounds professional or if there might be a word that would get my point across better. But spell check doesn’t tell me, and I wish something did.
Well, an Israeli software company called WhiteSmoke recognized the need and has developed an outstanding solution. Their program scans written English text and makes suggests of ways to improve sentence structure, make sentences clearer and more fluent to the English language, a.k.a. “text enrichment.”
The program provides specific suggestions for improvement of the document based upon relevant content and context, derived from the millions of English language documents stored in its data base. Everything from government and legal documents to newspapers to short stories.
What got this idea hopping was globalization and the fact that the internet is dominated with the English language. Important professional documents can be intimidating, but so can e-mails to clients and employers. WhiteSmoke’s program provides a means for communicating with others without your job hanging in the balance.
And WhiteSmoke’s number one buyer: the U.S, which isn’t surprising. Not only do our regional dialects, and lack of confidence, hinder the proper use of context and grammar, but there is also a tremendous demand among those who know English only as a second language. Even if they can speak fluently, English is an exceptionally difficult language to produce accurately on paper. WhiteSmoke’s software can relieve some serious stress in that department.
WhiteSmoke, whose name is derived from the Native American tradition of communicating with smoke signals, has made its software easy to download from the internet (simple Google or Yahoo! search “WhiteSmoke”). The basic program costs $79, while the executive version, which specializes in medical, legal and creative writing, will run about $250.
This is one of those ideas we all wish we would have thought of first. Regardless of whose idea it was, I get the feeling WhiteSmoke’s product will be a common additive to Microsoft Office in the years to come. And WhiteSmoke is already reaping the benefits of this innovative commodity.
Source:
• BusinessWeek.com: Software That Will This Sentence Fix
Tags: text enrichment
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Business Structures Help Fight War on Terror
That’s right, small businesses have what it takes. And the U.S. military is finally starting to see that. Recently, the Pentagon has been passing around The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman and Rod Beckstrom, a book originally written for businesses.
The basic idea of the book is that “ centralized organizations are like spiders and can be destroyed with an attack to the head . . . decentralized organizations transfer decision-making to leaders in the field [and] are like starfish – no single blow will kill them, and parts that are destroyed will grow back.”
Sound familiar? That’s because our war with terror is against organizations that are decentralized. We can take out leader after leader, but until we understand their mentality completely, we won’t get very far because there are leaders all over the place.
How does this connect to small business? Well, actually, many small businesses across the national have long embraced the “ starfish” mentality. Only now is the U.S. military catching on to the fact that they could learn a lot from fellow citizens on the home front.
A great example of a centralized organization (a “ spider”) is Enron. The CEO went down, and took everyone with him. That wouldn’t be the case with a decentralized business. Employees are split into parts of the whole unit based upon their task, given goals to achieve, and then all given equal opportunity to achieve them.
Everyone is trying to be the best, so everyone is doing their best, which results in a well-oiled, fit business machine. Each person is equally important to the best possible function of that machine. Granted, occasionally someone will malfunction, and may even slow the machine down a bit, but it quickly repairs itself.
And, yes, there is someone to answer to, but the idea of CEO is a bit different. Instead of always looking over your shoulder and giving orders, he is more or less there as a guide. What he tells you to do is more like a suggestion, and, out of respect (not fear), you take his advice.
Decentralized businesses don’t always work, however. As you might expect, there are instances where things get out of control… one or more people trying to take over, etc. It just depends on the number of employees and the personalities you’re dealing with. Decentralized businesses are for those who want to share the glory, not hoard it all for themselves.
It’s those weaknesses that our military intends to focus on in the war against terrorism. Taking hints from The Starfish and the Spider is a good start. We may just be well on our way to a victory… not to mention some rocking places to work.
Source:
• USAToday.com: Can Small Business Help Win the War?
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Competing for Business with a Former Employer
Imagine the scenario: you’ve been sitting behind a desk in a lonely cubical somewhere, punching numbers all day for a large accounting firm. And you’ve noticed a few things along the way… things you would do differently if you ran the place, things you would improve or expand on. Just about the time you’ve had enough of the claustrophobia, it hits you – why don’t you start your own accounting firm?
It’s a wonderful idea, but there are some things you should consider before attempting it on your own. If you don’t, you may be facing legal battles with your former employer.
Non-Compete Agreement
The first thing you must do is see if there was a non-compete agreement anywhere on the paperwork you signed when you were hired. Basically, a non-compete agreement protects a company for a given amount of time from competition after an employee leaves.
In other words, if you signed one, you may have to wait a year or more after you leave the large accounting firm to start your small one. You are also usually prohibited from adopting trade or operation secrets or snatching up clients from your former employer.
If you signed a Non-Compete Agreement, consult an attorney before you make any moves. They are often unenforceable, depending on the terms and the state you live in. Better to be safe than sorry though.
Be Honest
If you get along with your current employer, and especially if you consider yourselves friends, then just be upfront with him. Tell him you are planning to leave and go off on your own into the business world. Ask for pointers on how to get started.
You might even consider asking your boss to provide you with some networking connections he may have that aren’t clients to help get you started. The more credit you give your employer for helping point you in the entrepreneurial direction, the less likely he’ll be to pursue legal action against you.
It’s also important to not tell clients you are leaving before you have, as that would be deliberately undermining your loyalty to the company. Even if you’re not loyal in your heart, refrain from causing any form of sabotage, since it could easily bite you in the rear later.
Generally, it’s just best to protect yourself and be open about your plans. Most employers will respect your boldness to step out on your own without trying to pull them down. After all they were probably once in your shoes, so they understand the appeal.
Source:
• Entrepreneur.com: Starting a Business - and Not a Legal Battle
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Small Business Health Bill to Return to Senate
It was proposed last year, and didn’t make it through. But Senator Michael Enzi intends to sponsor the small business health care bill again this year, despite the opposition he’s facing from many angles.
The State Association of Attorney Generals, the American Caner Society and the American Diabetes Association have all expressed concerned about some holes in the bill in its current condition and want some changes made.
Let’s examine the current bill from both angles:
PROS
• Will allow small businesses to pool insurance policies together, much like large corporations and unions currently do.
• Will give many businesses, who otherwise couldn’t, a chance to provide health insurance to their employees.
• The more people in the insurance pool, the better the cost to each business owner.
• The insurance pool spreads the risk involved over a larger number of people, so it doesn’t hurt the pocket nearly as much if an employee in the pool were to get sick.
• It opens up more health care options.
CONS
• Coverage does not have to meet state requirements, which can result in large holes in the coverage provided. Important and all too common medical problems like diabetes and breast cancer might not be covered.
• The lack of requirements also allows business owners to provide their employees with a “bare-bones” policy that may covers very little of the fees associated with even routine doctor visits.
• May cause the price of services not covered under the policy to increase in order for medical providers to make up the difference.
• The lack of state oversight could eliminate customer protection on many levels.
With 41 state attorney generals signing their names in a letter of complaint about the holes in the bill, it is expected that Senator Enzi and his colleagues will have to go back to the drawing board to develop some sort of compromise.
But I truly feel they’re on the right track. Far too many people in this country are without health insurance and something needs to be done about that. Giving small businesses the means to provide coverage to their employees is the first step in disposing of the problem.
What do you think? Is the bill fine the way it is? Should changes be made? Are there other alternatives? Share your thoughts.
Source:
• CNNMoney.com: Senate fight over small-business health care
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Marketing with a Dash of Controversy
Heart Attack Grill – the name just makes you want to run, but which direction? It’s intriguing, to say the least.
So is the whole atmosphere of Jon Basso’s grease-filled restaurant in Tempe, Arizona, which opened just over a year ago. It’s that atmosphere and the controversy surrounding it, that has put Basso’s business on the map. Advertising isn’t even necessary for him these days.
The attention he’s getting revolves around items on the menu such as the Quadruple Bypass Burger and Flatliner Fries, some topping out at 8,000 calories each! Other items available for purchase include full-sugar sodas from Mexico (no Diet Cokes here) and even filterless cigarettes.
And, get this, the guys used to own fitness training studios! But, after hearing weight-loss motivated clients confess over and over about their diet cheats, Basso decided that everyone needed a place to dive into the grease once in awhile and indulge themselves.
The boldness doesn’t stop there. He has already faced opposition from the Arizona Board of Nursing and the Center for Nursing Advocacy because of his waitresses being scantily clad in sexy nurse uniforms. The associations claim it “ degrades” the profession, but Basso claims that it helps to “ glorify the job for the younger workforce.”
And Basso is eating it all up (pun intended). Afterall, he’s already obtained national recognition for his grill. And, despite the negative tone many reports may take, business is booming! Can you say viral marketing?
It don’t know that the Heart Attack Grill is on my list of places to go before I die (or maybe to die, in this case), but I commend Basso for his enthusiasm, creativity and daringness to be different.
Fries anyone?
Source:
• Entrepreneur.com: Cashing In On Controversy
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Avoiding the Courtroom: Tips for Deterring Litigation
It’s a risk every business owner takes the moment he/she opens their doors - being sued. And there are a lot of reasons your business could be pulled into court - everything from unpaid bills to outrageous claims of fraud against your company.
Anything from the substantial and justified to the frivolous can come against your business at any moment, and if you want to avoid the long, tedious court process, you’d better make sure you’re ready.
CONTRACTS
Attorney Fees Clause
Every contract you have should contain a dispute resolution section. Within that section, it’s a good idea to state that, should any dispute proceed to litigation and you win the case, the client would be responsible for your attorney fees.
This would make any client who doesn’t really have a case against you think twice before filing a lawsuit. On the other end, should you need to sue a client for an unpaid balance, etc., they will probably refrain from fighting you much if they know they will have to pay attorney fees for you.
Limitation of Liability Clause
In addition, consider adding a clause in your contract that limits your liability and damages, should there be a flaw with the product you provide, etc. For example, if you provide a product or service on a regular basis that is worth $5,000.00 then put a clause in your contract that limits your liability to $5,000.
This covers any defective products you may have, avoids needless court proceedings to determine an amount for damages, and keeps you from losing the shirt of your back to pay for non-economic damages.
Arbitration Clause
Another option is to put in the contract that any disputes that cannot be immediately resolved are to be conducted exclusively through Arbitration. More or less, arbitration is another form of mediation.
One party files a form requesting Arbitration and provides the fee up-front, which can be in the ballpark of $750. This sounds like a lot, but can be much less than a trial in court would cost with attorney fees and the like. And, whatever is decided during Arbitration, is held with the same regard as a judgment in court. More information can be found on the American Arbitration Association website.
INSURANCE
It’s important to be aware that your business insurance may cover your liability if there is a dispute. If something comes up, the first thing you should do is check with your insurance company to see if such matters are covered under your policy.
If the situation is covered, the insurance company will take over negotiations on your behalf and, hopefully, settle the matter. Be aware, however, that the insurance provider will only pay out to the extend of the policy limits. You are responsible for anything above that (but they will always try and settle below the policy limits if possible).
Another smart move, before any threat of lawsuit even comes close to your business, is to purchase additional liability insurance through your provider. A typical business policy will, unfortunately, only cover minimal disputes.
There are additional provisions for matters that would be more likely to occur for your specific business - from employment practices liability coverage to advertising practices liability coverage and the like. Be sure to talk to your provider and be aware of all of your options.
Though these steps cannot guarantee that your business won’t go to court over something, they will help to avoid it as much as possible. Keep in mind that the best thing to really do is protect your business and your customer. If you do both honestly and efficiently, then the problems should be minimal.
Always consult with an attorney before changing or developing your business contracts to make sure your business is fully protected under the law. The statements in this article are not to be taken as official guidance, but, rather, as an informational supplement to the legal aspect of your business strategy.
Source:
• Entrepreneur.com: 5 Litigation Secrets
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The Adverse Effects of Poor Communication
Anyone who is in the sales industry knows the importance of how you communicate to a potential buyer. One false move, or should I say word, and you may have lost their business forever. Truth be told, however, the way you talk can affect every aspect of your business, whether you’re in sales or not.
Here are some ways you might be turning customers away because of how you talk:
Bad Grammar
This is the most obvious and common problem, which can often convey to others that you lack intelligence. Yet, it is the most difficult flaw in speech to change. Using “ good” when you should be saying “ well” is extremely noticeable, but also extremely hard to unlearn.
I honestly feel that parents these days don’t step up enough and teach their children the correct way to speak at a young age, not realizing that they are allowing a laziness that, down the road, may adversely affect their child’s career.
There is one false move that is often made unknowingly by many people, and that’s to end a sentence with a preposition (words like as, in, on, by, to or since). Grammatically, prepositions are supposed to be placed prior to a noun or pronoun, so ending a sentence with one is incorrect.
But, this is a common grammatical bad habit from childhood, which even I am guilty of. In fact, you could probably find that I’ve done so in a couple of posts (oops), which is really sad since I have a degree in English Literature. And it’s unfortunately ingrained in most of us as okay at a young age, and even after a college degree I still mess up. It is just something we should all be aware of and watch ourselves.
Too Majestic
What I mean by this is talking over people’s heads by using uncommon vocabulary (like those who enjoy learning and using a new word from the dictionary each day) and overly emphasized proper grammar. There has to be a balance between saying things correctly and using common local colloquialisms (like using “ ya’ll” in the south) to keep whoever is listening engaged in what you have to say.
If you constantly talk to everyone as though you were a scholar of the English (or whatever) language, no one will want to listen. They will reach the same conclusion as if you were using bad grammar – that you’re a moron without any social skills.
Too Technical
With any industry there are terms that are only known and used by those within the industry. The average Joe likely won’t understand what in the world you’re talking about when you try to tell him that you feel like it would be best to proceed with filing a Trial De Novo in his case (going with the legal field here because it’s what I’m familiar with).
Instead, you would tell him that you think it would be best to ask the court for a “ new trial.” The acronym KISS (keep it simple, stupid) most definitely applies. Keep it in laymen’s terms when discussing your industry with the general public.
If you’ve realized that you might be guilty of committing one or more of these communication flaws, find someone you can trust and rely on to help you recognize when you are making the errors.
The only thing you can truly do is vow to fix the problem, be self aware and practice. People will notice the effort and commend you, either with a pat on the back, or by really listening to what you have to say.
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Should You File a Patent on that Great Idea?
These days, as new businesses continually pop up on every corner of every freshly constructed commercial street, there are bound to be some duplications and similarities along the way. One way you can protect your business practices from being copied by another company is to patent them.
According to the United States Patent & Trademark Office (USPTO), a patent is: a property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted.
In other words, a patent keeps other businesses from making money off of your ideas. This is not simply limited to a product you have come up with, but also business practices and strategies. This also includes combining two or more products/strategies that have already been patented to form a better and more useful product or service.
For example, in Breakfast in a Whole New Way, I discussed breakfast restaurant owners who were getting patents on what kind of mix-ins could be combined with cereals, such as M&Ms and skittles, in order to keep competitors from adopting the same options for customers.
The patent process is very long and loaded with paperwork. And it is difficult and expensive to enforce a patent if someone else tries to infringe on it. So, before you sort through all the red tape, ask yourself these questions:
Has someone beat me to the punch?
Before even considering a patent, you need to make sure that no one else has already beat you to it. There are a number of online searches available including USPTO’s and Google Patent Search, which are both free. Other searches such as Delphion require a fee.
Is it worth it?
If there isn’t a patent like yours out there, then you need to determine if it is actually worth the trouble to pursue a patent. In order for it to be worth while, your business should center around the product/service you want to patent.
If someone where to copy your invention and it would result in the demise of your company, then a patent is definitely worth your time. However, if the patent is for a side product that doesn’t bring in as much revenue as your big seller, then it’s probably not necessary.
Do I have the resources?
It takes a lot of time and money to enforce a patent if someone is tapping in to your creativity. It can also be extremely expensive to defend yourself if someone else sues for patent infringement. Be sure you have the resources available to protect your company if you were to face opposition on either side.
Source:
• BusinessWeek.com: To Patent or Not to Patent?
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Grimy Entrepreneurs Rake in the Money
A grimy entrepreneur… the first thing that may come to mind is a mobster involved with rotten business deals. No, I’m talking about that kind of grime. I mean grime as in smelly, rotten, nasty and downright disgusting business ventures that are quite lucrative.
I love Dirty Jobs, hosted by Mike Rowe on the Discovery Channel. It has the appeal of NBC’s Fear Factor, but I can actually watch it without throwing up or turning away . . . well, most of the time.
The show has featured everything you could possibly think of, and anything you couldn’t, that constitutes as a job most of us would refuse or be extremely unhappy to do.
Some examples of dirty jobs that have been featured on the show:
• Skulls International, a company in Oklahoma that cleans all types of skeletons, from chipmunk to human to giraffe.
• Bio Oregon, a fish recycling plant.
• A dairy farm where the owner makes biodegradable/plantable flower pots out of cow patties.
• Coyote Texas Turkey Farm, home of the liquid compost turkey pile.
• San Francisco Waste Treatment Center (enough said).
• Ohio State Department of Transportation, Road Kill Recovery Division - ewwwww!
We all have our ideas of dirty, disgusting jobs that we would never do. Let’s face it, none of us longed to scoop dog poo out of people’s yards for a living or be a trash collector when we grew up. I knew a guy who was a trash collector… and I also know how much money he made and, if I were desperate, I might consider it… despite the fact that I’m a female!
The point is, somebody’s got to do the ugly work. Could you imagine how life would be if no one picked up the roadkill or the trash or worked in the waste treatment centers? I don’t even want to think about how disgusting our existence would be.
And, since so few people jump at the chance to do the nasty jobs, most of them pay pretty nicely. Skulls International charges $7,500 to clean a human skeleton (less for animals, because they don’t smell as bad), and expects to reach over $2 million in sales this year.
Clearly, they are in high demand, as are most other entrepreneurs who venture down that dark, grimy alley of the not-so glamorous business. They see that the public is in need of a specific service and that no one else is doing it because of the muck involved, and just dive right in (so to speak). Hey, have at the slime between your toes!
Related Readings:
• Entrepreneur.com: Filthy Rich Businesses
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Top Movies About Entrepreneurs
In honor of the 79th Annual Academy Awards, which aired on ABC last night, I thought I would bring to your attention Entrepreneur.com’s Entrepreneurs in the Movies, a list of 13 movies that embody the entrepreneurial spirit. The list even inspired a film festival at Chapman University in Orange, California.
Though I won’t discuss all 13 movies, I wanted to touch on some of my favorites on the list.
High Fidelity
This movie reveals every entrepreneurs innate desire to start a business directly connected to something they love. Rob Gordon, played by John Cusack, taps into his passion for music and opens a record store all his own. Pretty cool job if you ask me. And the movie’s pretty great too.
The Aviator
Entrepreneur.com refers to Howard Hughes (Leonardo DiCaprio) as a “ serial entrepreneur,” and I love the image that portrays. If only we all had the guts to dive into something as hardcore as he did, even if everyone around us thinks we’re nuts (despite the fact that Hughes sort of was).
Based on the actual life story of Howard Hughes, we see the many hats he wore, and wore well, of director, producer, head of RKO Pictures, creator and owner of Hughes Aircraft (which included designing airplanes), and major shareholder (which resulted in his control) of TWA. Despite his extreme eccentricities, “serial entrepreneur” couldn’t have described him better.
Forrest Gump
Dey’s uh, shrimp-kabobs, shrimp creole, shrimp gumbo. Pan fried, deep fried, stir-fried. There’s pineapple shrimp, lemon shrimp, coconut shrimp, pepper shrimp, shrimp soup, shrimp stew, shrimp salad, shrimp and potatoes, shrimp burger, shrimp sandwich. That- that’s about it.
Ah, dear Bubba. Who can blame Forrest Gump (Tom Hanks) for being inspired by his dear friend to start Bubba Gump Shrimp? With a ratty old shrimping boat and a depressed friend (Lt. Dan played by Gary Sinise), Forrest Gump is the only fictitious movie on the list to result in the start of an actual company, with Bubba Gump Shrimp Co. Restaurant & Market spanning 15 locations in the US.
And my personal favorite movie on the list…
Ghostbusters
Their luck runs out and their careers in the academic field are over, but nothing will get them down. Instead, the charming businessman Peter Venkman (Bill Murray), the devoted scientist Egon Spengler (Harold Ramis) and the supernatural historian Raymond Stantz (Dan Aykroyd) start a business hunting ghosts.
There you have it, my top picks from the Entrepreneurs in the Movies list. Which is your favorite?
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Customer Reviews Make Business Better
The strategies of MySpace and YouTube are spreading as more and more online businesses are adopting comment pages, allowing customers to post feedback, good or bad, about the products and/or services they provide. And it’s working to their benefit.
Customers want to be heard; they want their opinions and experiences to matter, and having a forum to express those to the public often satisfies that desire. Customers also want to see what other people, someone other than the manufacturer or distributor, have to say about the product.
That’s exactly why, when we buy something defective, we run and tell anyone who will listen how horrible the experience was. Or, in contrast, when our experience with a company is great, we recommend them to everyone. It’s all about word-of-mouth, and there is much more appeal is getting the word out to the whole world in addition to those in our immediate circle.
And that’s where websites like Epinions.com come in. Epinions has been around for awhile, as a catch-all for consumers to review and rate products from toothbrushes to dog food to digital cameras, regardless of the manufacturer or retailer. This freedom of expression found its way through MySpace and YouTube, and the world noticed just how much everyone wants to be heard.
And business owners have noticed. At the end of 2006, 43% of e-commerce businesses offered a place on their site for ratings and reviews of products and services. This is up from 23% in 2005. Some sites even allow customers to post pictures or video of themselves using the product. The customers then send a link to friends, which causes more and more potential customers to click through the site.
According to BusinessWeek.com’s article Retailers Take a Tip from MySpace, “ Customer feedback is opening the eyes of the industry, changing the way they market, manufacture and merchandise.” The negative feedback leads them to reexamine the products and services they provide, making sure the customer is satisfied, even if that means pulling the item from the shelves.
Negative feedback also decreases returns, as customers who read them are more likely to set aside their “ imaginary expectations” for the product and realize its true function.
Positive feedback on a product results in better sales on that item and others, as customers begin to trust the retailer more. Some studies show that customers who check out the highest rated products on a business’ site are 49% more likely to buy something. The top rated items draw customers in… even if they weren’t planning to spend money.
If you’re interested in adding this new buzz to your site, but concerned that you don’t have the manpower to filter out the crazies, businesses like BazaarVoice and PowerReviews have come to the rescue. Their service focuses only on the feedback you receive and makes sure to keep out the ranting and cursing of consumers who are really displeased.
And the fact is you can’t please everyone, but it’s better to know where your product or service needs improvement, than to find yourself unaware of a problem at all. With a more internet savvy consumer comes demand for a more internet savvy business. Consider the possibilities of giving your customers a voice and the benefits that will have upon the success of your business.
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Why Small Businesses are Gullible to Scams
What’s this world coming to that so many people are scamming others for money . . . and we’re falling for it? It really blows me away that so many people fail to do their homework and check out what their told by a random nobody who calls them up and says, “You owe us money.”
Granted, some of these scammers are good… too good really, but most of them prey on the gullible. And, unfortunately, small businesses can be far too gullible. They’re targets. New small businesses are hit by scammers because they have less experience in the ways of the business world and will probably assume everyone’s who they say they are.
Also, most small businesses are too small to afford a full-time legal staff to check out offers or claims. And many are in desperate need of investors and will jump at the chance of “free money.” And that’s what the scammers are hoping for.
There are endless scams out there, but if you own a small business, here are three common scams to look out for:
Overpayment
With this tactic, scammers order a product from you and mail in a check for payment, but they write the check for more than they owe, making look as though it was simply a misunderstanding, such as sending a check for $950, when the bill was $750, and claiming the seven looked like a nine. Your company sends a refund of $200 with the shipment of the items purchased.
But, a couple weeks later, the check bounces because the account is closed or doesn’t exist. And you’ve just given away your product, been stuck with the bill for a bounced check, and are out $200.
What makes this work is the fact that the small business owner is gullible enough to trust that the check will clear, and that should never be the case, not even with your regular customers, and MOST ESPECIALLY not with a new customer. Give the check 7-10 days to clear the bank before you even ship the product. And, if the check is written for too much, return it and require the correct amount. Make it part of your payment policy and you’ll avoid the scammers.
Disappearing Act
A common example is a fax received asking if you are interested in selling your business. If you are and you contact the company, they charge you several thousands of dollars (we’re talking $5-10K) for that company to determine what your business is worth. The problem is, you pay them and they never return. Poof, they disappear.
The best way to avoid this type of scam is to check out any business, whether you hear of them by fax or word of mouth, before giving them your money. Check their registration with the Secretary of State and the Better Business Bureau. Ask around and see if anyone else has heard of them. Even do a Google Search. Chances are, if they’re scammers, you’ll find out real quick. And unless you can find a solid gold list of references and validation, don’t even both.
Directory Listings
Fake invoices have been around for awhile, but an added twist to this fraud is that many scammers are claiming to be directory listings, whether in print or online. They typically call and tell you that your listing is about to expire and convince you to renew. Then they send you a bill for several hundred dollars.
Generally, however, there is no directory to begin with and you’ve just paid to have your company name listed nowhere. As a rule of thumb, if you’ve never heard of or even seen the directory, it probably doesn’t exist.
A great way to throw the scammer for a loop is, when they call for your renewal, ask for a copy of the previous directory so that you can make sure you like they way your company is listed before it’s renewed. They’re sure to hang-up at that point.
Again, always check to verify the true existence and good standing of a company before you do business with them. I have listed helpful resources below. Don’t give the benefit of the doubt – that’s what makes you gullible in the scammer’s eyes. I guarantee, anyone who is a legitimate customer will understand your skepticism and wait patiently for you to verify their company or funds.
Resources:
• National Fraud Information Center
• Better Business Bureau
• BBB Online Reliability Seal Program
• Federal Trade Commission
• Internet Crime Complaint Center
Related Readings:
• Entrepreneur.com: Common Small-Business Scams
• Systematic, Inc.: How to Steer Clear of Internet Scams
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Getting Your Product to the National Market
Most small business owners have a desire, deep down inside, to go national someday, but it’s a process that takes patience and work. Stick to these steps and you’ll be off and running.
Direct Sales
Start off by selling directly to friends and family and the people they refer to you. You can trust them to give you feedback regarding any improvements you can make in your product or packaging before you expand, and, if they’re pleased with your product, they’ll provide some word-of-mouth advertising.
Local Stores
Your next step is to sell a small bulk package to independently owned stores in your area. Call the manager or owner for an appointment to stop by and show them your product and ask if you can sell it in their store.
Clearly this involves determining who you should be selling to. For example, if you design t-shirts, then you’ll want to look into selling them at the clothing store downtown. If interested, they will either sell the shirts for you, while taking a percentage of the sale price for using their store, or buy in bulk and turn around and sell the shirts to their customers, and hopefully ask for more.
Regional Stores
Once you’ve had some success on the local level, expand to some stores in your region, including neighboring states. Be sure to have numbers on hand for your sales over the past few months. Consistent or increased demand for your product is a great way to show the regional stores that it’s worth getting involved with your business.
Mass-Market
You will need to be successful on the regional level for a decent amount of time (probably at least a year) before you attempt to go national. Depending on your product, the mass market can include everything from large chain retail stores like Wal-Mart and Target, to catalogs such as LTD Commodities or Collections, Etc.
It’s important that you determine where your product will be most successful before you approach retailers. They will know immediately whether your product belongs with their association or not, and you don’t want to waste time pushing to retailers that won’t bite.
Also, be sure that you are ready for mass production before reaching out to the mass-market. If your product is successful, but you can’t meet the demand, then you may risk losing deals with the national retailers. Have the equipment and man power ready to produce your merchandise in bulk before stepping through that door.
Source:
Entrepreneur.com: Selling Your Invention
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Which Internet Browser Should You Choose?
I made a switch this week after reading Entrepreneur.com’s The Latest in Browsers by Mike Hogan. I have been using Internet Explorer for as long as I can remember (after the fuss over AOL passed, anyway). But just the other day I decided to give Mozilla’s FireFox 2.0 a try, and I love it.
For starters, it’s important you know that there are three main browsers out there for your PC websurfing enjoyment: Internet Explorer (of course), Firefox, and Opera. Macs users also have the option of Apple Safari. Each of them has recently released a new, upgraded version. And all are free to download and use.
Now, to be honest, the new IE 7.0 took some getting used to, with a number of features getting relocated on the browser. I will admit, I sort of liked the fact that the favorites menu would actually stay open for me. On the older version, it would often disappear if my mouse so much as strayed a millimeter from the box. But it actually took me awhile to find it. And even now, months later, I’m still having problems remembering where the “ home” and “ print” tools are.
My brother-in-law (Chris Brunner, the owner of GreatFX Business Cards), who is a computer guru and really knows his stuff, has been using FireFox for awhile. So I already assumed it was probably of better quality somehow. But, I hate to change things around on my computer once I get used to the way they are, and I really didn’t feel up to re-learning a whole new browser when I was just beginning to get used to IE 7.0.
But Mike Hogan’s article really got me wondering what’s so special about FireFox. It supposedly has stronger security than IE, but what about the features? Oh well, I decided. What harm could it do to download something for free and try it out? So I did, and boy and I glad.
The first thing that jumped out at me was the condensed version of the tool and URL bar… one sleek line. As I began to explore, I noticed that the Favorites menu, deemed “ Bookmarks” on FireFox, has this great feature that allows you to place your favorite bookmark folders right on the toolbar, while using only minimal space. Saves some time and effort, which is always nice.
I also love the simplicity of the options. With IE, I could never fully understand what option I was selecting, with everything in computer-programmer jargon. But with FireFox, all of the options are put in layman’s terms, so I really have the opportunity to make my browser do what I do and do not want it to. And I especially love the fact that there is a spell-check feature that checks absolutely everything I type, just like Word or WordPerfect… and believe me, I need that!
Overall, I found that things were really easy to navigate, and, though I still have a lot to explore on FireFox, the transition has been fairly easy and I’m glad I switched, at least for now. I haven’t disregarded IE entirely, it’s just been placed on the back burner. Apparently I may need it in the future in order to run Windows Update or for using ActiveX when FireFox isn’t sure the website is safe, but I am.
Granted, I haven’t given Opera a far advantage here… in fact, it’s received none at all. I didn’t even look at it as a possibility because I had never heard of it. But that doesn’t mean it’s not just as effective at security and ease.
It’s going to take some time to get anyone to switch browsers, with, as I understand it, 80% of internet users still loyal to IE. And that’s great. To each his own, but I have been converted.
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Ideas to Generate Business on Valentine’s Day
Many say Valentine’s Day is just another scam by American businesses to try and get more money out of consumers. And so what if it is? The holiday benefits businesses and reminds us to celebrate the people we love, because all too often we forget.
So, in the interest of tapping into the profits that are to be had, here are some ideas to help you lure in additional customers on this heartfelt holiday:
1. Pictures
Hire an inexpensive local photographer (maybe one that’s just getting starting so that you help his business and yours) to come to your place of business and offer pictures of couples for free or a very small fee.
Have a fun lovey-dovey background for the pictures and make sure your photograher uses a digital camera. That way, you can email the finished product to the customers, and advertise your business (and the photographer’s) a second time.
2. Contests
Advertise a greeting card, love song or poetry contest. Be sure to start things around mid-January, with a deadline the week before Valentine’s. Announce the winner on Valentine’s Day and provide them with a special prize, such as a gift certificate to your business and dinner for two at a local restaurant.
Other smaller scale contests could be the couple that has been married the longest, the couple married the shortest, who proposed in the most creative way, etc. You could even have couples registered for a make-shift newlywed game and have them compete for a prize. The couple that knows each other best, wins.
3. Giveaways
Consider conducting a drawing for a larger giveaway, sponsored by your business, for a cruise or 4 day/3 night getaway. Couples are entered when they spend a certain amount at your business (say $10-$25). That way, you don’t have the whole town trying to get in on the fun, and you make some money back from you investment.
Also, if your business provides products or services that are often used for weddings, such as photographer, catering, wedding coordination, etc., consider giving away a package to an engaged couple. This will generate interest in your product/service and, though you’ll only be giving it to one couple, will bring in potential clientele who would be willing to pay if they don’t win because they like what they see.
Regardless of how you wish to take advantage of the revenue Valentine’s Day brings in, be sure you advertise whatever special event you choose. The local newspaper is a good choice, but your best venue is usually local radio stations. Investing in some air time to advertise the special contest or giveaway, and your business, will probably reach the biggest audience.
And don’t forget to call your local TV stations to let them know what’s going on. If it’s exciting enough, they’ll want to be there to see who the big winner is, and you’ve get even more advertising for your business.
I realize today is actually Valentine’s Day, so the above ideas won’t do much good to help you this year. But these things take time and planning, so starting now will get you well on your way to bringing in that twitterpated crowd on the next Day of Love.
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A Newer Way of Avoiding High Energy Bills
Warmer temperatures are anticipated for the year (the groundhog didn’t see his shadow this time, which means early spring). Inventories abound for natural gas and prices are falling. Things might actually be at a good state right now, and it’s time your business took advantage of it.
How? By tapping into (no pun intended) fixed rate natural gas contracts. Basically, you are locked into a fixed rate per therm (a measurement of natural gas) and pay the same amount each month.
The contracts last up to three years and are provided by companies such as Xcel, IDT Energy, Accent Energy and CenterPoint Energy. Basically these and other firms come to an agreement with utility companies to deliver natural gas to consumers through a pipeline. The utility company makes a profit off of the transmission charge, so they are willing to contract out the supplying of the gas, as long as the transmission charge is paid.
Using fixed rate natural gas contracts can save you money, but it can also cost you more. It simply depends upon whether gas prices go up or down. Right now, they’re down, which means it would be smart to get in on this opportunity now, with a lower fixed rate, and pay less later.
Another advantage of these contracts is stability and consistency in your bills. A fixed energy bill will allow you to budget the expenses of your business more easily, causing less stress come bill paying time.
They’re worth looking into for any business owner. Anything that is easier or cheaper over the long term is usually worth it.
Sources:
• CNNMoney.com: How to Avoid Sky-High Energy Bills
• StarTribune.com: Fixed-rate Gas Plans No Bargain for Some
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Help Wanted: Advertising Job Openings Online
As the use of the Internet continues to expand worldwide, business owners across the country are seeing opportunities to broaden the prospects for job openings. Instead of just placing a help wanted ad in the paper, many are expanding to online job searches to reach potential employees on the national level.
There are a lot of job searches on the Internet, so how do you know which ones to use? Nowadays, the most popular searches are Monster.com and CareerBuilder.com, and they also tend to be the most reliable. It’s not free though. Monster’s prices range from $300 for smaller cities/towns, to over $500 for larger cities per job posting. CareerBuilder’s job post prices start at $419 for one post, and lower rates per post if you buy in bulk.
What about searching the resumes on these sites? Well, the prices on Monster’s resume search range from $650 for two weeks/400 views to $7,000 for annual/20,000 views on a regional level. That price, of course, goes up if you want to search nationally.
CareerBuilder’s resume search provides unlimited viewing at $900 for two weeks to $8,988 for one year.
But what if these top job search engines are way out of your price range? There are other options available to get your job openings out there online. More than likely, your local newspaper has a website with a classified search available. If you place a help wanted ad in the paper, they may very well also have that ad on their website, or post it online for a small additional fee.
Another option is the career center at colleges in your state. Most colleges provide some sort of resource to their students to help them find a job after graduation, and many of these career centers have online job postings through their website. The fees would probably vary, but the cost would be significantly lower than the more high end search sites. It’s a good idea to post a job with career centers even if you use Monster or CareerBuilder.
Of course, you should also start a “ Job Opportunities” section on your own website. This will bring in prospective employees that are interested in your company, which makes for potentially better applicants.
Regardless of where you post your job openings online, take advantage of the opportunity it presents. Posting a job online allows you to be as thorough as you want to be about the position, what is required to be considered for the position, and why someone would want to work for your company (incentives). With a newspaper ad, you only have so much space available, so the information you can provide is limited. But with online postings, the sky’s the limit.
Related Reading:
• Entrepreneur.com: Posting Jobs Online, the Right Way
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Finding the Right Price for Your Product or Service
The price of the product or service you provide determines whether your business succeeds or fails. If the price is right (as Bob Barker says), then your business will produce profits and grow, but if it’s wrong, your business could be destined for bankruptcy.
Far too many businesses choose the price of their product/service based upon only one calculation, when there are actually a number of elements you should consider together to come up with the best amount.
When determining a price for your product/service, considering the following:
Cover the Costs
The price you come up with should include enough to cover the cost of manufacturing the product or providing the service your business has to offer. If you travel, include the cost of mileage and expenses. If you provide mass quantities of a product, divide your costs to determine what it costs to make only one. If you can’t cover your overhead in the price of a product, your company will never break even or even make a profit.
Consider the Competition
And when I say consider, that’s exactly what I mean. Don’t price your product/service to be cheaper than the competition, just in the hopes that you’ll get all their business. If consumers trust your competitor more or like his product more, they will still go to him, even if he is more expensive.
However, when determining your prices, keep your competitors’ prices in mind as a range, since you don’t want to set your prices gobs higher (or too much lower). Also, look into how much business they generate and how that relates to prices they provide. Supply and demand really comes into play here.
Calculate the Value
Determining the true value of the product or service you are providing by looking at what consumers are paying others for it. eBay is a great example of how every person values things differently. Ask people you trust, such as friends, family and employees, what they would be willing to pay for your product/service and what they would expect would be included at that price.
Find out what clients would do if your product/service wasn’t offered. Also, ask them how your product/service is helping. If Bob tells you that you are saving him tons of money because your product is so inexpensive and delivery super fast, then you should probably be raising your prices a bit and charging more for a speedy delivery (while still giving Bob a great deal, of course).
Make sure you are looking at all of these elements when determining what your prices should be. And don’t worry about changing your prices if what you currently charge isn’t working. Most consumers won’t even notice, and you can simply explain to the ones that do that you really weren’t making it on the previous prices. If they are loyal to your business and like the product/service you provide, they’ll understand.
Supplemental Information:
The following questions are things you should take into account when establishing your prices–
1) What are the direct costs of your product or service?
The direct materials and labor associated with your offerings.
2) What are your business’s indirect expenses?
Often referred to as overhead and include expenses such as insurance, advertising, rent, office expenses and more.
3) What is your breakeven point?
Breakeven is where your costs and your income are equal–meaning, there’s no profit.
4) How is your competition pricing their offerings?
Compare your products to the competition. Adding value enables you to promote your products more profitably.
5) What is the state of your industry?
What was hot last year may not be this year. Understanding the market landscape will help you make better business decisions now and in the future.
Set your prices accordingly, but don’t be afraid to adjust them to your business’s need and market changes.
Source/Related Reading:
• BusinessWeek.com: Pricing - The Magic Number
• Office.Microsoft.com - Set the Best Price for Your Product
• BusinessWeek.com - Setting Your Product’s Price
• Wikipedia.org - Pricing
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National Minimum Wage on the Verge of Increasing
It’s been over 10 years since the national minimum wage was increased. Ten years! I find that simply astounding. The cost of living has gone up in that amount of time, without a doubt, but the income that many families generate hasn’t budged. There is something very wrong with that picture and the Senate is pushing for a change.
The plan is to increase the current minimum wage of $5.15 per hour to $7.25 in three increments over the next two years. I like the idea of easing into the change, so that small businesses can adjust accordingly. The Senate bill also includes some tax breaks for small business to ease the transitional pain, while hitting up the large corporate businesses for more money to balance things out.
The bill currently under examination will no longer allow corporations to deduct the cost of jury verdicts or out of court settlements in lawsuits, generating an estimated $540 million over the next ten years. A beautiful plan if you ask me. Even though I work for a law firm that represents local corporations, I think that a corporation that is found guilty of wrong doing in a jury trial should not be allowed to deduct the funds it has to pay out from the judgment. It seems to defeat the purpose of punishment.
Also, the tax-defered portion of severance or retirement packages given to former corporate executives will be limited. Instead of all $210 million like former Home Depot Chaiman-CEO Bob Nardelli received (don’t even get me started on that one) being tax deferred, the amount defferable would be limited to $1 million a year or a figure equivalent to the five year average of the receipient’s taxable salary. Another brilliant idea, especially since it is expected to generate $810 million in revenue over the next 10 years.
What’s funny to me is that those in the Senate who are against the minimum wage increase claim that the beneficiaries would likely only be teenagers with part-time jobs, rather than the working poor. Uh, hello, I beg to differ! As one whose husband stocks shelves in a grocery store to help pay for college, I am well aware of the fact that the minimum wage increase would be highly beneficial to our income.
Additionally, there are plenty of people working at McDonald’s that do so full time to support a family who would benefit from the increase. I used to work in day care, and even those teachers are barely paid just over minimum wage (around $6 an hour), at least where I’m from. Explain to me how these people wouldn’t benefit?
The House version of the bill doesn’t include tax breaks for small businesses (boo), but they plan to address those issues in a separate bill. This will cause a bit of a slow down between House and Senate in getting the bill passed on to the President, but ultimately I think both the increase and tax breaks will become law. Congress would be imbeciles not to pass them. It’s simply time for it.
Source:
• AOL Small Business: Minimum Wage Bill Divides Businesses
Tags: national minimum wage, cost of living, tax breaks, minimum wage increase
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Is Your Business Online Yet?
If you’re reading this, chances are you did a little websurfing, and are familiar with the vast space known as the World Wide Web (and it’s called that for a reason). So if you’re reading this and don’t yet have a website for your own business, I have to ask, what’s the hold-up?
There are many excuses as to why some businesses don’t have websites, all of which are misconceptions, such as:
Myth: A website is too expensive to start and maintain.
Fact: There are many website services online that provide everything from free webhosting with pre-established templates, to inexpensive webhosting (less than $60 a month) with a little more glam. Any of these can be put together and maintained by anyone who is familiar with the internet, but doesn’t know any of the programming jargon. Simply type free website in Google search and you’re on your way.
Myth: No one will use the website.
Fact: EVERYONE will use the website, if you let them know it’s there. Put it on your business cards, your ads, your receipts. I guarantee that everyone who visits your business will visit your website at one time or another, if for no other reason but to cure websurfing boredom. And if you have lots of exciting features and information, they will be glad they did.
Myth: A website won’t help my business sales.
Fact: Nearly everyone spends time on the Internet, and Internet sales increase on a continual basis. Even if you don’t have the capabilities available on your website for customers to purchase your service, providing as much information as possible and a means of contacting you will inevitably lead to an increase in clientele and sales.
People use the internet to “brand surf.” Most, when interested in a product or service, will turn to the internet first to see what’s available. I can’t tell you how many times I’ve looked up a service online, found listings for local providers, and then been disappointed because the provider I’m interested in learning more about doesn’t have a website.
A recent example was when I was buying furniture for our new home. I wanted to go online and see what the distributors carried instead of driving all over town. Even if I couldn’t buy it online, I wanted to narrow down the prospects. But many of the local businesses didn’t have a site, and I ended up wasting lots of my time going to places that had nothing I liked. The last thing you want to do is frustrate your potential customers like that.
The Internet is a valuable resource for establishing and growing your business, and every small business owner should be taking advantage of it. If you’re already online, great! I hope to come across your site sometime and see what you have to offer. If not, then you’re way behind and, to put it bluntly, it’s time you caught up to the rest of the world. So, get busy punching those keys and making your business readily available to everyone!
Related Readings:
• CNNMoney.com: 10 Web Tips for Entrepreneurs
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Is Viral Marketing Effective?
Turner Broadcasting created quite a stir in Boston last week with their advertising campaign for a new show on the Cartoon Network. Traffic jams and police involvement were the result of the reportedly “suspicious packages” planted throughout the city on bridges, subways and other high traffic areas.
The packages were actually magnetic lights that were placed throughout 10 cities across the nation, including New York and L.A. although Boston seemed to be the only place they caused a stir.
I don’t think that Turner execs planned to cause so many problems with their advertising campaign, but I would imagine that the resulting national news coverage was far more than they had expected from this successful ruse. Viral marketing at its best.
For those of you aren’t familiar with the term, viral marketing is a means of advertising in an off-beat manner with the intention of generating media coverage and massive word-of-mouth distribution and a minimal cost. And that’s exactly what happened for Cartoon Network. A bit on the extreme side, maybe, but effective nonetheless.
Another avenue that many companies are taking advantage of is video-viral marketing through YouTube. On average, over 100 million videos are watched and 65,000 clips uploaded a day on YouTube. Most are home videos, but many are now advertisements and movie trailers. The appeal is the low-budget, soft sell video that doesn’t shove a product down a viewer’s throat.
Some other examples of viral advertising of past and present:
• The Blair Witch Project – admit it, you thought it was real home video just like the rest of us… and you went to see it because of that, didn’t you?
• Burger King’s Subservient Chicken – having chicken “your way” by using this interactive website to make the guy in the chicken suit do whatever you can think of.
• Borat – Did it take you awhile to figure out he wasn’t real?
So, is viral marketing effective? Absolutely! All you have to do is appeal to people’s curiosity and you’re well on your way. There are clearly some boundaries that shouldn’t be crossed, but, if your business has reached an advertising plateau, viral marketing is well worth considering.
Sources/Related Readings:
• Wikipedia.com: Viral Marketing
• Inc.com: Contagious Commercials
• Fresh Inc. - Inc.com Weblog: Jan. 31 - A Viral Campaign Bombs
• CNN.com: Two held after ad campaign triggers Boston bomb scare
Tags: viral marketing, word-of-mouth, video-viral marketing, advertisements, viral advertising
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Effective Logo Design for Small Businesses
McDonald’s has the golden arches, Coca-Cola the scripted font, and Apple… a multicolored apple. A logo is probably one of the most important elements of marketing your business. As your business develops, your logo will become synonymous with the quality of service you provide.
Your logo also conveys information to new clientèle. The style and dynamics can speak volumes. Take Coca-Cola’s logo for example. The scripted text not only gives the familiarity of hand-written words, but also provides and indication that the drink is cool and refreshing. The style of the logo makes you want to say “aaahhhhh,” and I’m sure that’s something they were going for.
According to Entrepreneur.com’s Logo Design Basics, there are three main types of logos in the business world:
1. High-Tech Industry Logos
These logos typically have a chiseled and angular look. They attempt to convey “innovation” to the consumer.
2. Service-Oriented Industry Logos
Typically a smooth and rounded look to convey creativity and friendliness.
3. Business to Business Industry Logos
Typically embodies components of both types to convey stability and trustworthiness.
When you design your logo, keep it simple. It needs to be a design that is easy to remember, so don’t include a ton of information. It also needs to be easy to reproduce. A logo with lots of details will not translate well to smaller mediums like business cards.
To get the most out of your logo, first design it in black and white. This will, again, lend to the translation of the logo onto various mediums. Add color later as an embellishment. And be careful what types of color or font you use. Much of the human reaction to color is subliminal and consumers are generally unaware of the persuasive effects of color. Please visit our color theory page for more information on this subject.
Keep in mind that your logo should be the permanent fixture of your business. Once you decide on one and start to use it, it shouldn’t change, unless you know specifically that your logo is the source of stunted growth in your business. Potential clients will, from the first day your use it, associate that logo with your business. Changing it would only cause confusion.
Whether you hire a professional to design your logo or do it yourself, if you follow these simple guidelines, you’re well on your way to designing an effective logo for your business.
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Why Your Business Isn’t Growing
As we can all probably guess, most of the growth a business will undergo occurs in the beginning. And it is much easier to grow a small business than a large one. Therefore, if your small business isn’t seeing much growth, it’s likely because you’re missing a necessary element.
To determine what’s holding you back, examine these areas of your business:
The Market
Before you even start a business, you should make sure there is a market for the product or service you want to sell. However, if you unknowingly skipped this step before you dove in, stop where you are and check yourself. Chances are you probably didn’t start a business that won’t succeed, but you may have tapped a market that either has too much attention or none at all.
Examine the demand for the product or service you provide. How vast is that market? What competition are you facing and how can you out-do them? If you have a product that no one is asking about, make it known. If there are already a number of other providers, then you have to make yourself stand out among them. This leads directly into the next element…
Advertising Exposure
Ads are all any of us deal with these days. They are every where you turn around. If you’re not taking advantage of advertising, then your business will be stuck. And if you are using advertising, you may not be using enough. The key is how many people you reach, i.e. repetition.
If you buy a radio spot for an ad, but only buy enough for it to play once a day then you must either (a) buy more air time or (b) make sure that once a day air time is during peek listening hours, such as rush hour or lunch time. Reach as many people as possible with the resources you have, whether limited or expansive. Be sure you are tapping into every advertising avenue you can: radio, TV, newspaper, magazine, word of mouth, business cards, etc.
A Believable Message
The last thing potential clientele want to hear is something far-fetched. If the message of your advertising isn’t believable, then your product simply will not sell. Roy Williams, an advertising columnist for Entrepreneur.com says to “close the loopholes in your message.” He provides an excellent example:
Open loophole: Advertisers often cry, “Everything must go!” but the listener is thinking “Or what? What happens if you don’t sell it? You’ll just come up with some new angle next week, right?”
Closed loophole: “Everything must go! Any jewelry not sold by the end of the day will be melted down and sold as scrap. This means that, until 9 o’clock tonight, you can buy finished jewelry for slightly more than the value of the raw materials.”
Couldn’t have explained it better myself.
The Customer’s Experience
Regardless of the effectiveness of your advertising, in the end, the growth of your business depends on the experience you provide to your customers. If they don’t leave your office with a smile on their face, then you’ve lost them and all of their friends they could have told about you. It is imperative that you provide your customers with outstanding service, competitive prices and fair policies. Do all that you can to make your customer’s loyal to you alone for the product you provide.
If you get all of these areas in check, anything else that might be hindering your business is a speed bump, a minor slow down that is easily overcome. Check these areas first and you’re well on your way to growth.
Source:
• Entrepreneur.com: Why Aren’t Your Ads Working?
Tags: start a business, advertising, business
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Fire Bad Clients to Increase Profits
I work in a law firm, and we get clients of all types in our office. Though most of them have legitimate problems and are very appreciative of the attorney’s help, every once in awhile we see unpleasant people that want something for nothing.
Some think that they know every law applying to their situation and try to tell the attorneys how to do their jobs, without a day of law school. Others insist that they are the only clients we have and that we must drop everything to appease their every whim. And there are some who just absolutely refuse to make any sort of payment on their increasingly outstanding bills.
And, typically, the attorneys I work for will only put up with so much before they withdraw from the case, tie up loose ends, and gracefully let the client go. I honestly believe this is one of the many reasons why the firm is so successful. As every business owner should, they realize that there is no need wasting time on clients who don’t appreciate you and the service you provide.
The basic principal is that bad clients = less profit. Even a client who is paying, but demands far too much of your time dips into your profits because you are not giving other clients the attention they deserve and, therefore, are not earning as much as you could be.
Are your profits being hindered by deadbeat clients?
Here are examples of bad habits by clients you should strongly consider cutting loose:
Non-paying or Low-profit Clients
If they’re not paying you for your services, then they are obviously not worth working for. There is, of course, an exception to this rule. If a client is generally appreciative and can’t afford their entire bill, make payment arrangements that work for both of you. If they still won’t pay, even after you’ve given them a break, then drop them (and, if it’s worth pursuing, sue them for the unpaid balance – after all, you gave them a chance).
You also might want to determine a minimum profit you’re willing to make and cut the clients who don’t meet the quota. If they have potential for growth, great! Consider hanging on. But if things have just gone nowhere for a long time, you may consider putting that effort into the clients who profit you most.
Clients Who Require Justification
The clients that you always have to justify your prices or time to are just not worth having around. We see that sometimes at the law firm because many of our clients are billed at an hourly rate. Occasionally a client comes along who disputes the attorney’s time on their case. These are the sort of clients who want your services, but aren’t appreciative enough to compensate your time.
Time Wasting Clients
Clients who are unprepared for meetings, aren’t sure what they want from your business, or are just unwilling to heed your advice are not worth the headache. You’re the expert in your industry and they are not, otherwise they wouldn’t have come to you in the first place. If they aren’t willing to hear what you have to say now, they likely never will be. It will be a constant battle and stress. No one needs that hanging over their heads or their business.
In the end, it all comes down to your personality and business ethic – just how much you are willing (or able) to put up with. However, if you’re business is struggling, regardless of how nice you are, I strongly urge you to examine your clientele. Some of them may be part of the problem.
Related Reading:
• Entrepreneur.com: Fire Your Bad Clients
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Technology Could Make Waitresses Obsolete
Within the past ten years, most restaurants have installed touch-screens at the server work stations, for the servers to enter in the order for their tables. Now, technology has taken things one step further by recently giving restauranteurs the opportunity to put touch-screen ordering terminals at the table, replacing waiters and waitresses all together.
uWink Media Bistro, which opened in a Los Angeles area mall in October 2006, is the first of it’s kind. The restaurant was founded by Nolan Bushnell, who also founded Atari and Chuck E. Cheese’s, and he hopes to begin franchising this year.
Diners order on a touch-screen terminal at their table, and runners bring the food when it’s ready. In the interim, the terminal doubles as a video-game console to pass the time. If you need a refill on your drink, you simply touch “refill,” and 30 seconds later you have a full glass in front of you.
Lets weigh the pros and cons, shall we:
Pros
• An easier and faster dining experience during lunch and dinner rushes or if you have small children.
• You won’t have to deal with incompetent wait staff (let’s face it, there are some out there).
• Cut in labor costs for the restaurant industry.
• Can pay for your meal at the table, without waiting for your bill.
Cons
• You don’t get the personalized attention that a server provides, including recommendations.
• If you’re anything like Meg Ryan’s character on When Harry Met Sally (everything on the side, please), you may not get your food the exact way you want it.
• Job loss for a number of people who are putting themselves through college, single moms supporting their kids, etc.
• You would have to deal with advertisements on the touch-screen when it’s not being used.
I’m sure there are more pros and cons on either side, but, based upon my thoughts, it’s fairly even. The concept isn’t entirely new either. I’ve noted a couple of patents for devices to be placed on the tables in restaurants to signal a server when the diner wants his attention, for a refill, the check, etc. I’m quite fond of that idea, since I’ve felt overlooked by a server several times.
As my husband will tell you, I’m incredibly picky about the service we receive in a restaurant. I supported myself through high school and college by waiting tables, and I know what the standard is. I have a really hard time when our waitress doesn’t meet my expectations.
However, despite my restaurant idiosyncrasies, I’m not entirely on board for taking away the personal element. That’s why I think having a server, as well as a means to let them know from a distance that you need them, would be an excellent combination.
I really think that the DIY (do-it-yourself) ordering terminals, would be right at home in a fast food restaurant, where you don’t have wait staff anyway. Instead of a cashier, you simply get in line and enter in your own order, then wait for someone to hand it to you. There wouldn’t be a large number of people losing their jobs and things would be a bit simpler for the diner.
Another possibility might be putting the terminals at half of the tables in a casual dining restaurant. That way, diners have a choice between personal service or DIY. However, I don’t believe these terminals should be placed in high-end, up-scale restaurants. Part of their atmosphere is being waited on hand-and-foot by a professional who can make recommendations for an entree or wine. Having the terminals instead would simply not be the same.
I guess part of my reserve is this slight fear in the back of my head that we’re all going to be replaced by machines someday. And I know that many people feel the same way. Otherwise, we wouldn’t have movies like I Robot or shows like Battlestar Galactica.
But, alas, the passage of time means change and with the way technology is running full speed ahead, change is all around. Sometimes we just have to learn to adjust to the small things.
Related Readings:
• BusinessWeek.com: Your Waiter Today Will Be a Computer
• SelfServiceWorld.com: Touchscreen ordering finds favor in U.K. restaurant
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Learning from Google’s HR Techniques
Recently, Fortune Magazine released it’s “100 Best Companies to Work For 2007″ and Google’s Mountain View, California campus was number one. Their employees are exceedingly loyal. “A team of wild horses couldn’t drag me away,” says one employee. They’re even more than willing to work all nighters without question.
So, what in the world would make someone want to enjoy working that much? Check out these college-like incentives and I’m sure you’ll understand:
• Free meals from 11 on-site gourmet restaurants and snack rooms all over, complete with cereal, candy, fresh fruit, cappucino makers, the works.
• An on-site fitness center, complete with weight room, lap pool, personal trainers and massages.
• Five on-site doctors and, you guessed it, all free.
• Game rooms that include pool tables, foosball, ping-pong, and arcade games.
• Rock-climbing walls, beach volleyball and roller hockey twice a week in the parking lot.
• Engineers can spend 20% of their time at work on independent projects.
• Employees can bring their dogs to work, so long as their co-workers don’t mind, the dogs are not aggressive, are free of fleas and the owners clean up after them.
• Pajama day, TGIF parties every week and charity events on-site.
• Six weeks paid sabbatical available for every 6 years an employee works there (537 employees took sabbaticals last year).
• Free car washes and oil changes on-site. If an employee wants to buy a hybrid vehicle, Google will give her $5,000 toward it. They also provide free Wi-Fi enabled coach buses from five Bay area locations.
• Free on-site salons and barber shops.
• A $2,000 reward for referring new employees.
• Google will reimburse up to $500 in takeout for the first 4 weeks of an employee’s maternity leave.
• Available resources to study 4 foreign languages: Madarin, Japanese, Spanish and French.
• Free on-site laundromat and dry cleaning.
• On-site childcare.
• Motorized scooters for on campus travel in style (and speed).
• A founders award, up to millions of dollars (literally), for new program ideas and designs.
Whew. No wonder Google receives an average of 1,300 resumes a day (up to 1.1 million a year) for an average of only 2,229 available jobs a year. And Google doesn’t pay for all of these incentives out of their allotted administrative expenses. It all comes out of the company’s profits, which were over $6.1 billion in 2005!
So, raise your hand if you’d like to work in a place like Google. Yeah, me too (sigh). I think what every business owner can take away from this is that they should make their company a place worth working for, even if that means dipping into the profits a bit. In the end, the employee loyalty and productivity are completely worth it.
Source:
• CNNMoney.com: 100 Best Companies to Work in 2007
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What Ever Happened to Customer Service?
Customer service is hard to come by these days. So much so that advertising agencies are coming up with ad campaigns that emphasize the effective customer service a business provides. Instead of it being an expected part of everyday business dealings, quality customer service has become a commodity. I know I’m not the only one who finds that appalling.
Let’s look at recent news for an example, shall we. How about that American Airlines flight the Friday before New Year’s, traveling from San Francisco to Dallas (usually a 3.5 hour flight). The flight was diverted to Austin, Texas because of bad tornado weather in Dallas.
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Pulling Your Teen Out of the Financial Hole
Regardless of how old your child is, it’s never too late to teach him how to properly handle his money. The lessons that you can teach your teenager are vitally important. He is on the verge of being on his own. If he doesn’t know how to handle his money the right way, you are going to have to watch him endure years of financial woes. Take what little time you have left as an authority in his life and show him how it’s done.
Checking and Savings
Start by opening checking and savings accounts under your teen’s name. Whether she have a part-time job or just does some babysitting on the weekends, use the opportunity to show her that its better to use a checking account so that you can keep track of where the money goes.
Sit down with her each month when the account statement comes in and be sure she understands how to balance her checkbook. Explain the importance of recording every transaction in the register and figuring the current balance after each purchase or deposit.
Be sure that she understands the ATM balance shown after a withdrawal is rarely accurate and to never depend on it.
These tasks may seem common sense, but many people have no idea. I have a close friend who works in banking and she could tell you crazy stories. For example, she has many people who have bounced checks and swear by the fact that they thought there was still money in the bank just because there were still checks in their checkbook (Hello!)
Establish a Budget
Help your teen come up with her own budget to determine how her personal earnings will be spent. Determine whether she will be responsible for paying the insurance on her car, what she will be putting in savings each month, if she will be responsible for buying her own new clothes, etc. Compare her budget to the family budget so that she gains an understanding of how easy she really has it at this stage in her life.
Make a chart, indicating each spending category and how much each is allotted every month. Have your teen keep tabs on how much is left in the budget by writing down what she spends in each category and how much remains after that purchase. This will help her to know where she is overspending and to see how she can stick with it. It may be difficult for her in the beginning, but she’ll get it eventually.
Teach Real Debt
Nothing gets me more that parents who buy their teen a brand new Mustang for their 16th birthday… and, when he totals it, a Mustang convertible to replace it. Grrr. Those parents aren’t teaching their kids anything except that they can always count on daddy to get them whatever they want.
If you want your teenage to understand the real world, then teach him what it means to really be in debt. Go ahead and buy him a car, if you have the means, but get something more reasonable (say, less than $5,000) and have your child pay you back, with interest.
Make a monthly payment plan – something that is feasible based upon your teen’s income. Predetermine a percentage rate that won’t overwhelm him, but will convey the weight interest bears to him. Five percent is a good number.
Put the entire matter in writing, and be sure to include what the consequences will be for a late or missed payment (loss of driving privileges, TV time, etc.). Having a written document as a reference point helps to eliminate excuses. Also, map out a “loan payoff” chart, showing when each payment should be made and what remains on the loan after its application, all the way to zero. This will help your teen to see how much they will really be paying in the end and just how long it takes to get out of debt.
I also recommend you show them how long it would take to pay off (and how much more it would be) if they purchased the car on a credit card with the average 18-21% interest rate. I would imagine this would deter your teen from ever wanting to use a credit card for anything they couldn’t pay off each month.
In my opinion, this method is far more effective than the “prepaid card” that many parents use because the prepaid card is not teaching them the reality of debt. All it teaches is that prepayment is different from debt, but not the consequences and hardships debt can bring. Many teens end up getting a credit card anyway when they move out, without the proper education on how to handle one.
Truthfully, the possibilities are endless for teaching your teenagers about money. Anything you can do to help them understand being on their own (anything comparable to what you do) will help tremendously. Just don’t give up and don’t get frustrated. It will be well worth it to see them succeed.
Related Readings:
• BusinessWeek.com: Teens, young adults need money skills
• About.com: Teach Your Teen Financial Responsibility
• FamilyEducation.com: 5 Steps to Teach Your Teen to Budget
• FinancialLiteracy.com: Teaching Your Teen About Money
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Teaching Your Child About Money
For most of my life I knew very little about how to handle money. My examples growing up were usually of living paycheck to paycheck, and, when finally on my own I followed suit for a long time. The only advice I ever received was from my grandmother who told me regularly to “save, save, save,” but never told me how to get to a point where I could actually do that.
Unfortunately, my story is all too common. Today’s children are tomorrow’s business owners and many of them will go through years of financial struggles because they were never taught by their parents how to properly handle money. I firmly believe that teaching our children about money from the moment they are able to count (around 2 years old), is vital to their future happiness and survival.
The Boxes Method
When you’re little one can count to 10, she can begin to understand money. Remember, kids learn by observation and repetition. Give her a small allowance in increments that can be divided. I recommend starting with three pennies each day. I know, pennies sound small, but that is about all that will hold their attention span at a young age. Provide her with three small boxes and label them: spend, save and give. Show her each day that she should put a penny in each.
The “spend” box is, of course, the money that she gets to spend. Buy some stickers and new barrettes or, for your little man, a packet of baseball cards or bubblegum. Give him the opportunity to buy a piece of gum immediately, or wait until tomorrow so he will have two cents to buy a baseball card. What seems like an insignificant process will help him to understand how spending works.
The purpose of the “save” box is obvious as well. Give him ideas of things he can save for and buy at the store within the next month, such as a matchbox car. Tell him how many pennies it will take and remind him how close he is to buying it each day.
Avoid the temptation to help him along by adding extra funds. At such a young age, he may get the idea that mommy and daddy will always help him get what he wants. You want him to learn personal responsibility, not dependence on you.
Using the “give” box depends on your preferences. I am a firm believer in giving to charity, whether it be offering at church or donating to the local shelter, so it’s part of my teaching strategy. I believe that giving will eventually produce a return.
For example, the Rockefellers are an extremely well-known and wealthy family. What most don’t realize is that from John D. Rockefeller on down, the family has always been predominately givers. John Rockefeller gave over half of his $1 billion fortune during his lifetime, and the tradition continues through the generations.
Get Them Involved
As your child gets older, expand the financial lessons (and the amount of allowance) accordingly. Make her aware of your family’s position on finances - explain where your money goes.
Too many parents feel that it’s none of their child’s business how their money is spent, but that attitude is all wrong. You child learns by watching you. Your attitude about finances will become hers as she gets older. Openness will only help her to learn more and be more responsible with her own money down the road.
Let your child have input on what the family saves for, such as a family vacation, summer camp, or new family bikes. Map out how much you will need to set aside as a family each month in order to reach your goal, and have the kids contribute some of their allowance savings (such as $5 a month). Show them how even a small amount helps you to get there that much quicker.
Teach Debt Early
It’s also important to start teaching your child the shackles of debt. When you child begins to ask for a luxury item, such as an X-Box, agree to purchase that item with the understanding that your child will pay you back out of a portion of his allowance (Christmas is an exception, of course).
You may even consider adding a small percentage of interest, say 2%. Seem harsh? Well, it might be to some, but it’s highly effective. He will soon realize that it’s better to save up for something big and be patient than to spend money that you don’t even have yet. This will also begin to teach him the difference between needs and desires.
But what if your child is already a teenager and you are starting to witness the repercussions of not teaching her earlier about finances? Don’t worry, it’s not too late. As long as she is still under your roof, you still have ample opportunity to teach her how to handle money correctly – before she gets in trouble out on her own.
Tomorrow I will cover how to reach a teenager about finances, even when it seems impossible.
Related Reading:
• FamilyEducation.com: 15 Ways to Teach Kids About Money
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Relating to NBC’s “The Office”
If you haven’t seen NBC’s “ The Office” yet, and you’ve ever worked in an office, then you should definitely catch an episode. Its Nominations for two golden globes this year are not surprising, as the show just keeps you rolling. It’s one of my favorites and I think the appeal is not only in it’s humor, but that at least one of the characters on the show reminds each of us of someone we’ve worked with.
Angela from Accounting
I think I can probably generalize that everyone has unfortunately had the pleasure of working with someone like Angela. There have been too many to count for me.
The woman is tiresome. Her holier-than-thou complex is just down right rude, not to mention obnoxious. She is absolutely convinced that no one can do anything as well as she can – that everyone in the world but her is a moron. We could all do without the “If I were you” statements that continually spill out of the mouths of the Angelas in our office.
Inevitably, however, everyone puts up with Angela, doing nothing about her behavior. Despite the fact that we couldn’t help but feel relieved if the soda machine tragically fell over on her (or is that just me?).
Face it, when it comes to the Angelas in our office, we all just roll our eyes, mumble obscenities to ourselves and move on. We don’t say anything because the boss clearly sees something in them that keeps them around and we don’t want to risk losing our job by pointing out the elephant in the room. Say la vi.
Michael, The Manager
Incompetent is the word that comes to my mind. How the man obtained the position of manager, I’ll never understand. How did he kept a job at Dunder-Mifflin long enough to even be considered?
I have most definitely had managers like him, especially in the food service industry. You’d be surprised how many managers in a fast food restaurant stand around dumb-founded most of the time (well, maybe you wouldn’t).
I’ll have to give it to him though, he tries. Well, he doesn’t try to do the job, he tries to get everyone to like him. Granted, his attempts are often ridiculous, but the occasionally margarita party would probably bode well in any office.
Michael is genuinely concerned about what people think of him. He lacks the self-confidence that most stereotypical managers thrive on. He’s a rarity in that regard, at least in my experience.
Dwight, the…. Uh…
What does he do again? Besides brown-nose, that is. Much like the Angelas, we could all do without the suck-up Dwights of the business world. When was the last time we heard anything about Dwight’s actual job on the show? While he deems his position “Assistant Regional Manager,” Michael is often quick to correct him, noting that he is “assistant TO THE regional manager.”
The basic scenario is all too familiar – Dwight’s desire to be more than he is requires him to spend too much of his time at the bosses beck and call to get anything done. And guess who is stuck with picking up the slack, while the Dwights try and take all the credit? But we keep on doing the work, with the meager hope that someone will notice.
Pam, The Receptionist
Now she is the type of co-worker that everyone could get along with. The co-worker we all wish sat next to us. And she is a rare jewel. Pam is sweet, caring and even funny. When Michael is down, despite the fact that she often loathes him, she will help to pick him back up. She even covers him when he’s messed up (as usual).
If we all just strived to be like Pam, work would be much more bearable. The reality is, however, that there will always be someone you work with whose personality clashes with your own. That’s just how it is. The best way to cope is to watch “ The Office” and find some laughter in the familiarity.
Related Readings:
• Entrepreneur.com: Is Your Office Like “The Office?”
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Baby Boomers Expected to Lead Business Boom
Baby boomers, those born between the years 1946 and 1964, represent 75 million of the nation’s population. And, in 2008, the first of that generation will hit the early retirement age of 62. Many boomers, however, don’t plan to retire. The new wave of business start-ups that is expected in the next couple of years will probably not be headed-up by 20-somethings as in recent years, but, rather, by potential retirees.
I Dream of Ownership
Of over 2100 people surveyed in a Yahoo poll conducted last year, 55% checked “ own my own business” as the work they would prefer to do late in life. And 37% of those plan to start their businesses in the next five years. Ten percent of the general population owns their own business and, as a basis of comparison, 16% of baby boomers do. They make up 54% of all business owners.
Is there something in the water these days that has caused the boomers to keep on working through their golden years? You could say that. Many have a love of labor (who would of thought). But overwhelmingly it is their desire to be free and independent. Baby boomers are known to have what is called a “Peter Pan Complex.” They reject growing old in the traditional fashion, instead seeking new stimulations and challenges in their lives.
I can’t help but think about those commercials for retirement investments that talk about how, these days, retirees are looking at retirement in a whole new way. Instead of sitting in the rocking chair watching TV and darning socks, boomers reaching retirement age are taking motorcycle trips across country, skydiving, and just overall living the life they always wanted to. Why not add starting a business doing something you love to the list?
Want-to or Have-to?
Many boomers are going into business for themselves at retirement age out of necessity rather than desire. It’s the only way they will have an income during the latter part of their life. An unfortunate 90% of 45-54 year olds have less than $250,000 saved up for retirement. That equates to less than $10,000 annually to live on for 30 years.
You may be asking what the baby boomers have to offer that can lend to their success as entrepreneurs. Well, the typical stereotype associated with those reaching retirement age generally doesn’t apply to the boomer generation.
Baby Boomers:
1. are better educated that previous retiree generations.
2. are more willing to take on challenges.
3. have more funds available that younger entrepreneurs because they typically don’t have kids at home to support and have their mortgage paid off.
4. have more time available to develop their business correctly.
5. have years of experience in the real world.
6. have a vast network of connections from, frankly, years of being a part of this world.
I can’t help but cheer the boomer generation on. That’s what retirement should be… doing what you love. And why not make money doing it to support you in the years ahead? And let’s not forget, the successful businesses to come from the boomer generation will help the rest of us too, by creating new jobs, decreasing the tax burden and aiding the economy.
All I have left to say is, in the words of the 20-something generation to which I belong: “More power to ya!”
Sources:
• AgeTimes.com: Start-Up Explosion on the Horizon
• BusinessJournal.com: Most Americans Dream of Starting Business
• PowerHomeBiz.com: Entrepreneurship and the Retiree
• RealtyTimes.com: Baby Boomers Boost Home-Based Business Market
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What to Expect from Technology in 2007
Have you seen Apple’s PC vs. Mac commercials (click to view ads)? You know, the ones where:
Two men stand side by side in front of a featureless, white background. “Hello, I’m a Mac,” says the guy on the right (who is much younger and dressed in jeans). “And I’m a PC,” says the guy on the left (who wears dorky glasses, ill-fitting khakis, and a jacket and tie). The two men discuss the many advantages of using a Mac and seem to agree that Macs are “better” than PCs [description courtesy of Slate.com].
I love those commercials, and I’m utterly a PC fan. But they are so well made and appealing (which, of course, is the idea). In fact, the ad campaign is rather brilliant, I’d say.
And, with 2007 being a war of new technology release between Microsoft and Apple, I would say that we’ll be seeing this ad campaign for awhile. Both companies will be releasing new versions of their main computing operation systems this year. The releases are expected to lead to upgrades to both the inside and outside of computers as we know them, as well as increase the selling price, for the first time in nearly 10 years, by 20-25%.
Microsoft will be releasing Windows Vista toward the end of January. The new operating system boasts features such as Windows SideShow, a technology that enables laptop manufacturers to include a secondary or auxiliary display in future laptop designs, which can be used to easily view the critical information you need (such as e-mails), whether the laptop is on, off, or in sleep mode.
Other Windows Vista features include voice recognition and Windows Backup, which allows you to access lost elements of your hard-drive more readily, even if the system crashes.
Apple’s new operating system is called Leopard. Some features include Time Machine, a similar program to Windows Backup, which allows you to search for deleted or lost files. Another feature, Spaces, organizes your on-screen windows into categories such as “work” and “play.”
Apple is also due to release iTV, a video-streaming technology, this year. This unit, a box similar to the Mac mini and designed to send video from a computer or iPod to your television screen, is expected to sell for around $300.
Intel has jumped on the release train as well. Due to release this year is their new wireless technology, Santa-Rosa, which will feature the latest Wi-Fi as well as greater power saving capabilities and faster access to memory. Robson, another innovation that is designed for Windows Vista, helps to speed up the start-up and application loading processes, making them up to two times faster (finally!).
There is also expected to be a boom in the ultra-mobile PC industry that Sony and other electronics manufacturers have already tapped in to. A cross between a notebook and smart phone, ultra-mobile PCs are designed for the consumer to be able to take their entire computer absolutely anywhere.
I don’t know about you, but I’m looking forward to the innovations coming our way in 2007. It never ceases to amaze me how rapidly technology advances right under our noses. Who knows, maybe we aren’t far from the world of The Jetsons afterall.
Source:
• BusinessWeek.com: Tech - The Look Ahead to 2007
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Business Trends in 2007
Ah, the joyous time for New Year’s resolutions. Dieting to getting fit, spending more time with your family, redecorate a bedroom… the list goes on and on. I’ve made more of a commitment than a resolution this year. I plan to start my own business.
I know, it seems kind of odd that I would write all of this information about small business and not have my own. But I have learned so much writing this blog the past few months. Enough, in fact, that I have the confidence to really follow my dreams and start something.
Some 671,800 small businesses started up in 2006, two-thirds of which can expect to be in business for at least two years. So, now it’s our turn. Are you ready? 2007 is our year, right?
Okay, so you may be with me on a positive outlook for starting a business this year, but your enthusiasm may be lacking due to the fact that you don’t know what kind of business to start. We all have ideas, but whose to say that our ideas land in a flourishing market? Don’t worry, help is out there.
The most important key to picking the right business to start in 2007 is to pay attention to the world around you. Find a trend and revamp it to fit your style and a specialized market. If ideas are scarce, Entrepreneur.com is ready for you with their Hot Center – a list of the hottest business trends for 2007. And it’s a long list. You’re bound to find something you would enjoy.
Here are some possible ideas to get you brainstorming:
Home Sales Parties
Many stay-at-home moms are tuning into this trend in order to add a little adult time to their lives, as well as bring in some extra funds. Pick a product you believe in, whether it be makeup, jewelry, spa treatment supplies, home décor, scrapbooking supplies, etc., and arrange to have “parties” at other people’s homes. You get a certain percentage of the profits and your friends who host the party get special incentives as well.
Personal Service Industry
Put simply, saving time for someone else. It could be anything from a grocery shopping service, to walking their dogs, to putting together the scrapbooks others can never seem to get around to (one of the areas I plan to make part of my business).
Writing
If you have the talent, then put it to good use. One of the largest growing internet industries these days is a need for copywriters. Businesses want their webpage text to draw the consumer in, and they need good writers to do that. One of the best parts is that, typically, it’s a freelance job so the possibilities are endless.
Landscaping
This is an industry that will probably never go out of style. People want beautiful yards, whether it be for their home or business location. If you have a talent for sculpting the spectacular from rocks, water and flowers, then you should definitely consider this industry.
Coffehouses
In a category all their own, despite the fact that you can practically find one on every corner. Thing is, if you have a block near you that doesn’t have a coffeehouse, chances are that you could start one there and be very successful. Everyone’s got to have their coffee. And if you can beat the prices and selection of “those other guys,” you’re in business.
I could go on and on. There are so many wonderful possibilities for a successful business in 2007 that, as long as you stick to the trends, you really can’t go wrong.
HERE’S TO A PROMISING NEW YEAR!
Sources:
• Entrepreneur.com: What’s Hot for 2007?
• Entrepreneur.com: 13 Niches to Investigate for Part-Time Business
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What’s Ahead for Small Business in 2007?
As far as small business goes, 2006 was a not-so-great year due to a slothful real estate market, rising gas prices and a decline in employment, according to Chad Moutray, Chief Economist for the Office of Advocacy of the Small Business Administration.
How promising does small business look for 2007? Some things aren’t getting any easier. The main concern of the majority of small business owners are the issues surrounding labor. If you own and operate your business on your own, 2007 looks outstanding.
But if you have employees, then you probably already know what I’m talking about. It’s hard enough to find qualified employees for your business, and analysts say it’s not going to get any easier. The challenge of finding the right person for your business is expected to continually increase as more and more baby boomers begin to retire, and the prospects begin to dwindle.
Meanwhile, competition for the meager selection of prospective employees continues to increase, as small business owners have to try and match the salaries offered by larger companies.
According to SurePayroll.com, the national average of base pay salaries rose 7.4% in 2006, to $31,292 a year. And, as we all know, when you pay someone more, you have to do something to make up for it, which is typically an increase in the cost of your product.
Another issue that small business owners face when it comes to retaining employees is the continued increase in the costs of health insurance. While it is not expected that the increase will be as dramatic as more recent years, it is expected that health insurance rates will raise another 7.7% in 2007.
One other somewhat insignificant but worth mentioning challenge that faces small businesses that are online is the increased competition of other online businesses, as it’s not surprising to see three or four new businesses in your industry pop-up daily. This poses the challenge, that many find intriguing, of making your website stand out among thousands.
Despite the negative effect labor issues may have on small business in the next year, most entrepreneurs remain optimistic. The NFIB’s Index of Small Business Optimism is currently at 99.7, a continued historic high. As stated in Entrepreneur.com’s article (below), “ a positive outlook itself bodes well for growing business… confidence is a critical indicator of current and future economic activity.”
Sources:
• CNNMoney.com: Glimmers of Hope for Entrepreneurs in 2007
• Entrepreneur.com: A Look Ahead - Challenges of 2007
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Elements of a Franchise Agreement
If you’re planning on investing in a franchise, it’s important to know what you’re getting into. Though I can’t speak from experience on this issue, it’s clear from my research that most Franchise Agreements (which I will hereafter refer to as “FA”) are complicated and highly weighted toward the favor of the franchiser.
Entrepreneur.com defines a FA better than I could as representing a license to use a specific business operating system employing registered brands and trademarks for a specific period of time in exchange for a specified payment structure. And there is no doubt that a FA is specific about every little detail.
A Franchise Agreement does not mean that you are becoming part owner in the company. On the contrary, all rights to the brand, trademarks and operating systems remain solely the property of the franchiser. As a franchisee, you are more or less an investor, often temporarily.
Be sure that the terms of the FA reflect how the business is portrayed in the UFOC mentioned in yesterday’s post, Finding the Right Franchise. Though every FA varies tremendously based upon the company and product or service provided, most contain the following basic elements:
Operation of the Business
The rules, restrictions and obligations of the franchiser and franchisee regarding the successful operation of the business from the franchiser’s perspective. This includes the repair and maintenance that you are expected to contribute as well as the regulations regarding trademarks, patents, advertising policies, etc.
Territory
Where your specific business will operate and any exclusivity rights that may apply. Be aware that part of your investment in a franchise may be the purchase of real property for the business location. Many FAs require that, upon the termination of the agreement, the property be sold to the franchise company, often under market value.
Support
The training and operational support provided by the franchiser throughout the lifetime of the FA. However, this is typically at some cost to the franchisee.
Duration and Renewal
The initial duration of the agreement and your renewal options. The initial term can range from 5-20 years, more frequently toward the shorter end with multiple renewal periods. Most franchisers prefer this policy because any changes made to the FA during the initial term are automatically put into effect upon renewal, and you typically have no idea what those new regulations will be beforehand. Therefore, the longer the initial duration of the FA, the better it is for you, the franchisee. Also remember that, the better your performance, the more favorable the changes will be.
Royalties
Typically ongoing and usually 4-8% of monthly sales.
Selling
What your rights are regarding the sale or transfer of your franchised unit. Usually this contains an option for the franchiser to buy back the unit or have “right of first refusal.”
Dispute Resolution & Termination
The franchise regulations regarding the policy for resolving disputes between franchiser and franchisee, as well as the process for termination of the FA, if necessary.
As a legal assistant, I cannot stress enough how important it is that you have an attorney assist you with your review of the Franchise Agreement. An attorney can interpret the legal jargon usually found in a FA, and consult you accordingly to avoid an unfavorable situation later on.
Sources:
• Free Advice.com: What’s in a Franchise Agreement?
• Entrepreneur.com: Buying a Franchise - Ready to Commit?
• AllBusiness.com: Ten Key Provisions of Franchise Agreements
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Finding the Right Franchise for You
McDonald’s, Two Men and a Truck Movers, AlphaGraphics printing – well known national franchises whose appeal can be quite positive to the potential businessperson. With more than 5,000 franchise opportunities spanning the globe, knowing where to begin can be a bit cumbersome.
Should you invest in a franchise?
You must first determine if a franchise is even the right business endeavor for you. It’s important to understand that franchises are all about consistency. Each franchise unit is run by the same standards as the rest of them. If you are interested, you need to be able to answer “yes” to the following questions:
1. Am I willing to follow and embrace someone else’s business system?
2. Am I capable of being a follower?
3. Am I willing to be part of the franchise network, including accepting decisions that benefit the whole network, but not necessarily me as an individual?
It’s also important to evaluate your professional strengths. A franchise owner must have strong management and customer service skills to fully succeed in this type of business.
What franchises are you interested in?
With so many choices available, you will have to narrow your search to those options you are most interested in. The International Franchise Association and The American Association of Franchisees & Dealers provide franchise directories, reviews and guides to help you sift through the options. The Franchise Business Review provides reports on franchises based upon surveys taken by the franchisees themselves.
There are franchise consultants out there, but before you rely on one, be aware of the fact that franchisers pay them for the new prospects they bring in, so a consultant’s motivation may be a bit biased in favor of the companies they are working for.
What do the details tell you?
Once you’ve narrowed it down to the few franchises you are interested in, it’s time to dive into the details for each of them and figure out which is best for you. Be sure to obtain a Uniform Franchise Offering Circular (UFOC) from each franchise. The UFOC contains information regarding how the business is ran, any litigation or bankruptcy filings, investment costs and fee requirements, the franchise rules and restrictions, and contact information for each of their franchise units.
Take advantage of the fact that you have the contact information for those who have been where you are. Contact other owners in the franchise and get feedback from them. Find out how long it took him to earn a profit. Ask her if the franchiser is as helpful and supportive as he should be. And most importantly, has it been worth the time and money – would he do it all again?
How do you make it official?
Once you’ve determined which franchise you would like to get involved with, you should hire an attorney who specializes in franchising. It’s important that you don’t make a final decision until you’ve consulted an attorney and he/she has examined the Franchise Agreement thoroughly on your behalf.
Franchise Agreements can be tricky and, depending on the details, can turn you off to the idea completely. If you go it on your own, you may not know the fine print requirements. An attorney will help you to comb through the details so that you can be certain that the potential franchise is the right fit for you.
Check back tomorrow for more information on what a Franchise Agreement should contain and what snags to look for.
Sources:
• Business Week Online: Finding the Perfect Franchise Fit
• AllBusiness.com: How Can I Tell if Franchising is Right for Me?
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MasterCard Global Small Business Survey 2006
Mastercard Corporation has posted an interesting global survey of small business owners and their outlook for the future.
A total of 4000 small business owners from around the world who manage businesses with 1 – 99 employees were polled. A total of 500 respondents were surveyed from eight countries, including the United States, United Kingdom, Mexico, France, Brazil, China, Hong Kong and Australia.
Small business owners around the world have differing views on the current business climate but feel more optimistic (28%) than not (21%) about the upcoming year. They work a little more than 50 hours a week but spend 18 of those hours on administrative tasks. While competition was seen as the top challenge they will face next year, half of small business owners around the world feel that globalization will help their business, rather than hurt it.
The section that stuck out the most to me was the question of what motivates small business owners to run their businesses:
Globally, small business owners say that making enough money to cover living expenses (70%) and having more control over the future (64%) are important motivations for running their own business. Small business owners in Brazil are the most likely out of all those surveyed to say that providing employment (71%) and contributing to society or the community (64%) are important motivations, while small business owners in China are the most likely to say that building something that can be passed on to their family (59%) is an important motivation. Those in the United States are the most likely to say that being their own boss (67%) is an important motivation.
• MasterCard Global Small Business Survey 2006
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Preparing for an IRS Audit
Unfortunately, no matter how hard you try, sometimes you might make a mistake on your tax returns and the IRS will audit your business. Most audits are prompted by large losses in your business over a number of years, which would lead the IRS to wonder how you’re producing an income.
Typically, IRS audits are face-to-face, but about one-third of them are letters from the IRS asking for an explanation regarding a specific item on your tax return. Audits can be regarding your entire return or just a portion that the IRS has questions about.
If you receive a letter requesting an explanation, first consult whoever prepared your return. If it was prepared by someone who is not a professional accountant, you should consult one to find out the best way to handle it. Respond in writing, on your company’s letterhead, and provide copies of all related documentation. Always send any correspondence with the IRS by certified mail, so that you can confirm the package was received.
If you have to face the IRS in a personal meeting, make sure that you obtain representation by either a lawyer or CPA (Certified Public Accountant). Don’t try and take care of the situation by yourself, as there are probably many laws and regulations you aren’t fully aware of. You can also have the meeting video taped, but you must give the IRS ten days written notice if you choose to do so.
Logically organize all of your records regarding the issue(s) in question, categorically and chronologically. Neatness and organization will build your credibility with the auditor. Also, be sure that you only bring documentation related to the items that the IRS wants information about. Extra documentation is burdensome and unnecessary, and you don’t want to volunteer information about your taxes if they don’t ask about it.
At minimum, you will need to provide the following documentation:
• bank statements and cancelled checks
• receipts
• print-outs and disk copies of electronic records and logs
• appointment books, calendars and/or journals
• worksheets showing your calculations for each item
• an extra copy of all documentation
It’s important that you keep your cool and don’t get overly defensive, as that might make you seem guilty to the IRS auditor. You may even want to prepare some notes for yourself to remember events and explanations. When you’re in the meeting and under that kind of pressure, you can often simply go blank or stumble over words. Having notes on what you want to convey to the auditor will help you to keep things straight in your head.
After the meeting is over, the auditor will provide a written report regarding his conclusions and what additional taxes, if any, you owe. Keep in mind that, if the meeting and result are unsatisfactory, there is an appeals process available. This is where having a video tape of the meeting will come in handy, especially if the auditor was not willing to hear you out. There is also an appeals process available for any liens, levies or property seizures resulting from an audit, including appeals for hardship reasons.
Overall, if you are prepared and organized and can show that the issue at hand was a legitimate and unintentional mistake, then you will probably only face paying additional taxes. If nothing else, you will have definitely learned from the experience.
Sources:
• Inc.com: Preparing for an Audit
• WorldWideWeb Tax: How to Prepare for an IRS Audit
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The Right Way to Write-Off Business Expenses (Part 2)
PART 2 - HOME OFFICE AND MISCELLANEOUS
As a continuation of yesterday’s post, below are some additional tax deductions you should handle carefully.
Home Office
If you work from home, you can only write-off the percentage of your bills related to the area dedicated solely to your business. For accuracy, which is something the IRS appreciates, hire a contractor to measure your home office space professionally and provide the square footage that your home office occupies.
Once you have the measurements, figure out what percentage of your home is dedicated to your business. You can then write-off that percentage of your mortgage/rent, utility bills, etc. Keep in mind, however, that this area of your home must be used exclusively for your business. If it is, in any way, used for personal matters (i.e., your home computer is used for both business and personal), then you cannot right off percentages of your household bills.
Home Computer
If your home computer is used for both personal and business matters, then the expense of the computer is not deductible. Instead, you will need to keep a log of the time you use it for business purposes, much like with your home office. Then, determine a percentage of your time in which you use the computer for business and that is how much of the computer is deductible.
Another option would be to invest in a laptop that you use for business purposes only. This will allow for the entire expense of the laptop to be deductible.
Phone Bills
If you have a home office, phone bills do not fall under the category of bills you can write off a percentage of. As long as your phone, whether a mobile or landline, is not used a lot for personal calls, then you can write off the entire bill.
However, if you use the phone for both, then you will have to be sure and get an itemized bill from the phone company and indicate which calls, both incoming and outgoing, were business related. It’s a good idea to also indicate which client each call was related to.
The best and easiest way to avoid extra time and effort is to simply purchase a separate cell phone or get a separate phone line in your home for business calls only. If you opt for the separate cell phone, you can also write-off the phone itself.
Clothing/Uniforms
As a general rule, if you can wear it outside of your job, such as a new suit you wore for work but also to church or a funeral, then it is not deductible. However, if you perform as a clown for children’s birthday parties, then your clown costume is deductible. Another example would be the costume a Las Vegas showgirl might wear.
These are just a handful of the vast expenses that you might be able to write-off each year. It’s a good idea to consult with a professional accountant if you are not familiar with all the regulations. It’s better to spend a little extra money getting some help the first few times than to make a mistake and get audited.
Part 1: Travel Expenses and Vehicle Usage
Source:
• Entrepreneur.com: Top Tax Write-Offs That Could Get You in Trouble
Recommended Readings:
• Google Answers: Tax Write Offs When Self-Employed
• TheStreet.com: Top Business Write-Off Audit-Triggers
• About.com: 5 Year-end Small Business Tax Tips
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The Right Way to Write-Off Business Expenses (Part 1)
PART 1 - TRAVEL EXPENSES AND VEHICLE USAGE
Write-offs can be headache when it comes to preparing income tax returns for your business. They are often what causes a business to be red-flagged by the IRS because there are so many regulations and many small business owners just aren’t sure how to do it right. I will be addressing this in two parts, simply because there are so many different items to cover.
Here are some pointers on how to handle a couple of the most common tax write-offs correctly.
Travel Expenses
With any travel expenses that you plan to write-off, you will need to be able to prove that the travel was directly related to your business, such as a product convention or meeting with a client.
Flight costs typically aren’t a problem, even if you always fly first class. It’s the limo from the airport to the hotel that would be cause for concern. Meals are deductible at a rate of 50% of the bill. If you are taking client to dinner, you will need to be able to show that you discussed business at the meal.
This is where a journal or electronic log really comes in handy. When traveling on business, be sure to document your daily events, like which clients you spoke to, where and when you met and what you discussed. Should your business ever be audited, the IRS will require you to produce such a journal.
Family vacations are not a tax deduction, unless your family members are part of your business. You have to justify that by holding business meetings or by all parties attending a business convention while on the trip. If you go to the Bahamas and lay on the beach all five days, chances are you really shouldn’t try to write that off.
Vehicle Usage
If a vehicle is used exclusively for your business, then generally you can deduct the entire expenses for operation of the car. However, the standards of “exclusive use” are hard to meet. It’s more likely that your vehicle is used for both personal and business and you will, therefore, have to determine what operation expenses are considered deductible.
Generally, travel between two business destinations is considered a deductible operation of the vehicle. This can mean travel from your home office to the post office to deliver mail or the supply store to get office supplies. This also includes travel from one client’s location to another’s and back to your place of business.
Travel to work locations that are different from that of your regular place of business also count. However, travel from your home to your regular place of business on a daily basis is NOT deductible, even if you have your business advertised on the side of your car.
Generally, travel deductions using a vehicle are calculated by mileage. Again, in your journal, indicate the odometer reading upon departure from a business location and upon arrival at your new business destination. Also indicate how this travel relates to your business.
Part 2: Home Office and Clothing
Sources:
• Entrepreneur.com: Top Tax Write-Offs That Could Get You in Trouble
• TraderStatus.com: Travel Expenses, Meals & Entertainment
Recommended Readings:
• Google Answers: Tax Write Offs When Self-Employed
• TheStreet.com: Top Business Write-Off Audit-Triggers
• About.com: 5 Year-end Small Business Tax Tips
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IRS Audit Triggers
Part of being a self-employed business owner is the requirement for a lot of record keeping. Incomes and expenses probably make up the majority of those records, simply because it is necessary in order to keep up with the IRS and their grueling and complex rules governing taxes on the income your business generates. If you don’t meet their expectations, your business could be red-flagged and even audited, and that’s something I’m pretty sure we all want to avoid.
So, how do you avoid it? First and foremost, you must keep accurate records. Estimates and assumptions about the income and expenses associated with your business will only draw attention to you. Your best bet is to write everything down, each and every day, even if it seems insignificant.
There are a number of things that trigger the IRS into examining your business practices more thoroughly. They are:
1) Not Filing
This is probably the most obvious trigger, and you would expect it would often be avoided. But many business owners, especially those who are just starting out, fear they won’t have the funds to pay the taxes they will owe. So they simply don’t file returns. Bad idea. It’s better to file and owe back taxes than to go to jail for not filing at all.
2) Overpaying Family Members
If a family member works for you, be sure that you pay them according to their actual responsibilities and experience and at a rate comparable to the rest of the job market. Don’t pay them more than they’re worth just because they’re family.
3) Income Boost
If your income for the current year is excessively higher than previous years, the IRS will want to know why. The reason may be legitimate, like the fact that the demand for your business skyrocketed. But keep in mind that the IRS will then expect your return to show additional expenses in order to meet that increase in demand.
4) Inconsistencies
Make sure your federal tax return is consistent with your state tax return; that the income and expenses match down to the last penny. If there are differences, even subtle ones, you’ve caught their eye.
5) Bad Accountant
The IRS has a checks and balances system with which they keep tabs on accountants and other tax preparers. If a preparer is doing something wrong, not only will they get audited, but so will all of their clients. This means you. So check your accountant’s references thoroughly before hiring him.
6) Extreme Expenses
If you have an itemized expense on your tax return that just doesn’t match up with your income, the IRS will notice. For example, if you’re claiming an income of $30,000 and itemizing a $5,000 desk for your home office… well, it’s pretty obvious that something’s not right and the IRS will want to follow-up.
7) Write-offs
As every business owner knows, incorrect write-offs are one of the largest triggers for an audit. If what you’re writing off doesn’t match what is expected of your business practices, the IRS will probably want an explanation. There are so many rules regarding write-offs that it’s a whole other topic in itself, which I will address tomorrow.
Bottom line: pay attention and be thorough when it comes to your income and expenses throughout the entire year. Don’t wait until January to put everything together for the previous year, but keep record as you go. This will help you to avoid mistakes that trigger audits.
Also, be smart. Don’t try to find loopholes and “work the system.” That’s what gets business owners in trouble. The IRS is cracking down on small business these days, so it’s best to just stick to the rules, even if it hurts a little.
Source:
• Entrepreneur.com: Top Tax Write-Offs That Could Get You in Trouble
• WorldWideWeb Tax: How to Avoid an IRS Audit
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The Warning Signs of a Doomed Partnership
Just as in an unhappy marriage, the problems in an unstable business partnership tend to result in feeling unappreciated and ungratified, having unmet expectations and facing events that cause doubt and distrust. Problems left unattended will result in one or both of you dissolving the partnership.
To keep your partnership in tact, watch for the warning signs:
1) Communication Breakdown
If every conversation you attempt to have with your business partner turns into a war of words, then chances are you’re having a hard time communicating. When we’re holding a grudge against someone, we often have a tendency to always go on the defensive. Our ears shut off and our mouth won’t quit. If you can’t listen to each other, then you’re not communicating at all.
2) Everything is a Competition
Your partnership should be a compliment of each other’s strengths and weaknesses, but, when tensions rise, things tend to become competitive rather than complimentary. If you are constantly trying to out-do your partner, rather than work with him, then there’s probably an underlying issue that needs to be addressed.
3) Financial Problems
This can be anything from the business being under financial stress, to different views on how money should be spent, to disagreeing on the division of profits. If money is an issue, than so is something else.
4) Dominance Issues
If you’re fighting for control of the business, then you are probably not happy with the way your partner is managing her share of the responsibility. When you try to do everything yourself it comes down to a trust issue. There is something that has caused an inability to trust your partner’s productivity.
5) Different Goals
It’s safe to assume that, when you started the business, you and your partner had the same vision for the future. But, as time progresses, those goals may change and differ. That in itself is not a danger, but the inability to compromise and combine your visions is.
Keep your eyes open for the warning signs and meet issues head-on before they become problems. And, if things look bleak, you may want to consider going to a partnership coach before calling it quits. More often than not, an unbiased mediator can help put your business partnership back on the path to success.
Sources/Resources:
• SelfGrowth.com: Is Your Partnership About to Crash and Burn?
• NextLevel.com: Business and Professional Coaching
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Picking the Right Business Partner
Nearly 70% of all partnerships fail, typically because the people involved were so excited about their idea that they didn’t take the time to make sure that they were compatible for a business relationship. The majority of partnerships are formed between friends who assume that since they already get along, there shouldn’t be a problem. There are distinct differences between getting along with a friend (or family member) socially and the relationship remaining strong under the daily stress of running a business.
Business partnerships are often compared to marriages. In fact, if you are in a partnership, you will likely spend more time with your business partner than you do with your marital spouse. Much like in a marriage, it’s important that you take time to first find out if you and your perspective partner are even compatible for the long term.
When considering starting a partnership with someone, you must first examine your own strengths and weaknesses to determine if you are partner material. If you have a tendency to work better alone, or prefer to do so, then a partnership is probably not for you. If you can consider the suggestions of others and be open-minded when making decisions, then you’d probably make a good partner. Talk to your spouse, family and friends to get their input as well.
Once you have determined that you are able to meet the challenges of being a business partner, you should to examine the relationship you currently have with the other person.
Ask yourself the following questions:
• Do we have the same motivation?
• Do we have the same values and work ethics?
• Do our skills and strengths complement each other?
• Are we able to communicate with each other, even on touchy subjects, in a cool, calm and respectful manner?
• Deep down, do I 100% trust this person?
• Have we been able to adequately resolve conflicts/disagreements in the past?
Hopefully the answer to all these questions is “yes.” If not, then the next item on your list should be to sit down with your prospective partner and discuss the reservations you may have about the partnership. Laying those items on the table, and monitoring the other person’s reaction to them, will be a strong indicator of whether or not the partnership will work.
Also, talk to the other person’s previous partners and employees to get their feedback on how well he/she works with others. Be aware that, should your prospective partner refuse to provide you with contact information for her former counterparts, then that is a red-flag that you probably shouldn’t do business with.
If all signs point to proceeding with the partnership, then it’s time to test the waters. Take on a challenge together, like meeting a deadline, as see how that goes. Determine your expectations for the other person and see if they are met throughout the project. It’s also important to clearly define the responsibilities of each person, as this will be something a partnership requires every day.
Take your time and be sure this partnership is the right one for you. Don’t let the excitement of your idea allow you to rush into such a commitment. The failure of a business partnership can be devastating, both to your business and personal relationship with the other person. Taking time to find the right business partner can result in a mutual motivation and support, as well as a highly successful business.
Sources:
• BusinessKnowHow.com: Is a Partnership the Right Choice for You?
• Inc.com: The Art of Picking the Right Partner
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Internet Business Sees Holiday Shopping Boom
Now is the time to have an Internet business, as holiday shoppers are increasingly finding their stocking stuffers through online retailers.
From November 1st to December 3rd of this year, internet shopping rose to $12.42 billion, an increase of 25% since last year. The number of people making Internet purchases jumped 17%, while the amount of money spent by each buyer increased by 7%.
The retail areas seeing the most increase: videogames, jewelry and even tickets to concerts and shows.
An abundance of holiday Internet shopping occurrs on what is called “Cyber Monday,” the Monday following Thanksgiving each year. That is when online retailers debut their holiday products, virtual door busters and promotions such as free shipping with purchase.
However, with increased Internet shopping comes increased security concerns. An average of 46% of the 155 million web shoppers are concerned about the security of their personal information when making a purchase, but those numbers are typical.
Software developers such as Microsoft have been working hard to counteract shopper woes, such as upgrading security features of Internet Explorer web browser. The new version warns users if the site they are visiting is an imposter rather than an actual retailer. The down side is, as a new system, this only works 30-40% of the time.
Online retailers are also taking extra precautions. More frequently they are purchasing liability insurance that will cover themselves and their customers in the case of identity theft. By advertising this protection on their websites, retailers hope to encourage buyers to proceed with a bit more confidence.
Despite the reservations that the risk of identity theft pose, online purchases are expected to continue to increase over the holiday season and in future years as consumers enjoy shopping from the comfort of their own home. After all, who really wants to fight the crowds when you can get deals just as good online?
Sources:
• Business Week: Web Shoppers Spend More for Holidays
• Stamford Advocate: Online Shopping Popularity Continues to Rise
Tags: Internet shopping, Cyber Monday, security, identity theft
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IRS Puts Small Business Under the Microscope
There’s a new(er) IRS commissioner in town, and he’s doing some extra cleaning. Mark Everson, who took office in March of 2003 has made security his main focus of the IRS. And now small business is facing increased scrutiny.
Enforcement is taking the main stage due to the tax gap currently sitting at about $345 billion. This amounts to all the money that is missing due to non-filers and those who claim the wrong income and don’t pay correctly.
Small business audits more than doubled in 2005, an increase to 17,867 from 7,294 in 2004. Some small business owners have voiced a strong disagreement with the audits, claiming it unfair that small businesses are being targeted and will face penalties for small or unintentional mistakes. Large business owners also have the advantage of the financial ability to hire highly-paid accountants to fend off those mistakes.
Everson feels that a focus on small business will help to minimize the national deficit and avoid possible tax increases in the future. 80% of the tax gap is a result of under-reported income and the majority of culprits tend to be small businesses.
Some experts believe that the funds the IRS is using for enforcement could be better spent on educating the public on an increasingly complex tax code. After all, chances are that the IRS may not even see the revenue they expect to find in small business audits to make up for the funds spent to find it.
Everson claims that there is nothing to fear if you are doing your best to report your income and expenses accurately come tax time. Nothing to fear, that is, except for the time an audit takes away from your business.
Sources:
• Business Week: IRS Sets Its Sights on Small-Biz
• MarketWatch.com: Last-minute tax tips for Schedule C filers
• GovEXEC.com: IRS enforcement activities bring in record revenue
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Which Business Entity is Right for You? (Part 4)
PART 4 – PARTNERSHIPS
The first thing you should be aware of when it comes to General Partnerships, whose owners are known as GPs (general partners), is that it is managed by all partners and all partners are liable for the negligence and/or debts of the business.
Each and every partner has a say in how the business is run and, even if only one partner makes a mistake, each and every partner takes the heat for it. Of course, this liability is only a problem if you or your partners cannot be trusted to run the business.
Partnerships are often used when franchising a business or when all partners contribute equally to the success of the business, such as a law firm. Taxes are paid through each partners personal income tax. There are no costs or formalities for designating your business as a partnership entity, and the only document required is a Partnership Agreement, which is crucial and should include:
• Amount each partner will invest in the business and when said investments will be made (upfront, annually, etc.);
• Rights and duties of each partner;
• Method for distributing profits and sharing in losses;
• Policies regarding withdrawals of the business assets;
• Designated division of the business profits among members;
• Policies and methods for dispute resolution;
• Policies and methods for including a new partner;
• Method for dissolving the partnership, when and if necessary.
Typically profits are divided equally among members, but you can designate otherwise in your partnership agreement. Keep in mind that giving one partner a larger percentage of the business assets does indicate that they have a stronger say in the decisions regarding the operation of the business. It is usually in the best interest of all involved to stick to equal distribution.
A partnership lasts only as long as a good relationship between partners. It can be dissolved if the partners no longer wish to work together using the methods indicated in the partnership agreement, which can include the sale of the business as well as dismissing one member and bringing another in.
Partnerships also have the option of including one or more limited or silent partners (LPs). LPs are individuals who invest in the partnership but, based upon the Partnership Agreement, are limited in their involvement in the operation of the business. Also, LPs’ legal liability is generally limited to how much they invest, so they can basically reap the benefits of the partnership (i.e. profits) without being responsible for the debts.
It is important that you examine all of the available options for business entity designation and determine which is best for you and your business before you get the ball rolling. Please consult with a lawyer before before making any legal decisions.
Part 1: Sole Proprietorships
Part 2: Corporations
Part 3: Limited Liability Companies
Sources:
• Entrepreneur.com: Business Structure Basics
• Start-a-Business.com: General Partnership
• AllBusiness.com: Corporation, Partnership, or an LLC?
• About.com: Partnerships
• Wikipedia.org: General Partnership and Limited Partnership
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Which Business Entity is Right for You? (Part 3)
PART 3 – LIMITED LIABILITY COMPANIES
Limited Liability Companies, or LLCs, combine several features of Corporations and Partnerships, but are neither. Often people call them “limited liability corporations,” but that is incorrect. The owners of an LLC are termed “members” rather than partners or shareholders. The number of members is unlimited and can be a combination of individuals, corporations or other LLCs.
LLC members are not held liable for the negligence and/or debt of the LLC they have ownership interest in, unless they sign a personal guarantee. Like a corporation, an LLC is an entirely separate existence from the individuals involved.
Another benefit is that there are fewer requirements for an LLC. It is not necessary to keep meeting minutes or record resolutions, as in a corporation, and you are not required to have a board of directors or make officer designations for the members.
Some states do have minimal requirements for an LLC, but what those are varies from state to state. Typically, you are also required to file Articles of Organization and Operating Agreement when registering your business as an LLC.
The designated distribution of income to the members is entirely flexible, leaving the division to be anywhere from 50-50 to 10-90, and, of course, open for division among any number of members.
As a member, you also have much more access to the assets of the company. You can take assets out for personal and/or business use without incurring tax liability. Owners also have more leeway when it comes to writing off business losses when associated with an LLC.
The lifetime of an LLC is limited. If any member dies or files bankruptcy, the LLC is dissolved. Additionally, an LLC is not nearly as appealing to possible investors, so if you are considering going public with you company, or issuing shares to your employees someday, an LLC is not the route you should go.
However, if legal liability protection and one level of taxation are primary concerns for your business owners – who consist of multiple and diverse individuals and/or businesses – than an LLC is probably just right for you.
Part 4: Partnerships
Part 1: Sole Proprietorships
Part 2: Corporations
Sources:
• Entrepreneur.com: Business Structure Basics
• About.com: Limited Liability Company 101
• Start-a-Business.com: Limited Liability Company
• AllBusiness.com: Corporation, Partnership, or an LLC?
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Which Business Entity is Right for You? (Part 2)
PART 2 - CORPORATIONS
Corporations are considered a legal entity which exists separately and independently from the individuals who create and manage it. Only the corporation itself is legally liable for any negligent actions or debts it may produce. The individual shareholders are not liable.
There are a number of requirements for a corporation:
• Must have an elected board of directors or officers
• Must have an operating agreement
• Must keep records such as annual meetings, meeting minutes, record of resolutions and file annual reports.
Advantages
The benefits of a corporate entity are substantial. A corporation has an unlimited lifespan as it is not dependent on the life of an individual, as proprietorships and partnerships are. As long as annual reports are filed consistently, the corporation will remain in good standing.
The flexible transferability of shares is another large benefit. Ownership of shares in a corporation can be sold, transferred, given or inherited by simply endorsing and signing over an individual’s stock certificates. It is not necessary to file deeds or retitle anything.
You would also benefit from the increased ability to raise investment capital. It’s much easier to attract new investors to back your business if it is registered as a corporation because of the limited liability of shareholders and the easy transfer of shares.
Disadvantages
The major disadvantage of registering your business as a corporation is that it can create an additional tax burden. If your business is designated as a C Corporation, then the profits of your corporation are first taxed at the corporate level and then, any distributions to shareholders are also taxed on each individual’s personal income tax. S Corporations, however, are not taxed on the federal level – only the shareholders’ income is taxed.
If your business is large, or headed that direction, you might want to consider establishing your business as a Corporation. This is an especially preferred choice if you want to market your business to a number of investors, because the “Inc.” following the name of your business can be very appealing.
Part 3: Limited Liability Companies
Part 4: Partnerships
Part 1: Sole Proprietorships
Sources:
• Entrepreneur.com: Business Structure Basics
• AllBusiness.com: Corporation, Partnership, or an LLC?
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Which Business Entity is Right for You? (Part 1)
When starting a new business, you will be required to determine the type of business entity it is for tax purposes. There are a number of them out there and each one has different benefits and draw backs. It is best to understand them all before determining which is best for your company.
PART 1 - SOLE PROPREITORSHIPS
The sole proprietorship is the best option for someone who is starting a business in which she will be the only person involved. Many individuals who work out of their home, such as freelance writers, photographers, eBay business owners, etc., opt for a sole proprietorship for their business.
It is considered the quickest and easiest business setup process. There are no prerequisites for your business, an attorney is not necessary, and there are minimal costs for establishment of the sole proprietor entity. In most states, you simply register your business as a fictitious business name. In other words, [your name] doing business as [name of your business].
A fictitious registration does not, however, protect the name you choose for your business - anyone else can use that name. On the other hand, doing so does allow you to use the name of the business rather than your own for business banking accounts and other documentation.
There are some minimal formalities you may need to address when establishing a sole proprietorship:
• Obtain a Federal Tax Identification Number or EIN (otherwise, you will have to use your social security number).
• Obtain an occupancy permit for your place of business, if it is outside your home, depending on the requirements in your state.
• Obtain a business license, if your state requires.
Profits made on a sole proprietorship are considered the personal income of the owner and are taxed as such. It is best to set aside at least 25% (sometimes more) of any profits to pay in quarterly installments to the government. I recommend that you consult with an accountant to determine your best options regarding the taxes on your business.
There are two distinctive drawbacks to this type of business entity. As sole proprietor, the business you start has no separate existence from you. You are personally liable for the debts of the business, which means any debt you may be in default on will end up on your personal credit record. It is best to start this type of business with little to no debt associated with it.
Also, the existence of a sole proprietorship only lasts as long as you do. If a family member wishes to continue the business after you retire or pass away, he will have to register the business under his own name. Of course, as I pointed out, this process requires very little effort.
If you’re just getting starting as an entrepreneur, then I highly recommend that you designate your business as a sole proprietorship. Should the business begin to boom and grow, and you require some help to keep things moving, then you may want to consider other entity options.
Part 2: Corporations
Part 3: Limited Liability Companies
Part 4: Partnerships
Sources:
• Entrepreneur.com: Business Structure Basics
• Start-a-Business.com: Sole Proprietorship
• AllBusiness.com: Corporation, Partnership, or LLC?
• Wikipedia.org: Sole Proprietorship
Tags: starting a new business, business entity, sole proprietorship, EIN, occupancy permit, business license, taxes, entrepreneur
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What Employees Want from You
Keeping your employees happy is one of the key elements to maintaining a successful business. Though it is important, fair and competitive pay is not the only thing that employees look for to remain happy in a position. In fact, it’s only the beginning.
1. Flexibility
Employees want to be able to balance their job and their family responsibilities in a way that benefits both. Providing a flexible work schedule translates into a happier employee. If feasible, provide your employees with the opportunity to set their own hours, as long as the put in a certain amount of time each week. You will find that those employees will be much less likely to let their personal lives interfere with their work.
2. Job Security
Employees in a larger business want to know that they are not expendable. It’s important that you make laying people off an absolute last resort if something goes wrong, and make sure that your employees know that. It’s hard to be committed and loyal to an employer who has no concern about your job.
3. Fair Treatment
Far too many employers believe they must enforce strict rules and discipline in order to obtain the best performance from their employees. Granted, approximately 5% of employees do require a continual kick in the pants to stay on task. But most employees will respond much better to being trusted. Don’t hold it against your employee if he comes back from lunch five minutes late one day. Chances are he’s also the guy that stays a few minutes late without question when you need him.
Also, do everything you can to avoid office politics. Yes, you are their boss, but you also couldn’t run your business efficiently without them. You’ll get a much better performance out of employees if you treat them more like equals rather than subordinates. And don’t allow your seasoned employees to treat new employees like doormats. Your business shouldn’t be a hierarchy, it should be a team.
4. Appreciation
Recognize your employees’ achievements. Provide positive feedback when ever you observe a job well done, even if it something as simple as a successful telephone call. Make an effort to say hello each day and care about your employee. On Monday, ask her how her weekend was, and actually listen to her answer. Not only will this motivate your employee to work harder for you, but it will also open lines of communication and allow your employee to feel like she can come to you if she has a concern.
5. A Pleasant Environment
The spectrum of a pleasant working environment includes everything from sitting next to someone who wears deodorant every day to colorful walls, sunlight and fresh air. This also comes back to the fact that you should take time to talk to your employees each day and acknowledge their existence.
Encourage employees to get along with co-workers by hiring people with positive attitudes and great people skills. Consider providing opportunities for employees to socialize a bit, such as a birthday party over the lunch hour once a month for employees whose birthdays fall that month.
Recognize that employees want to be treated like adults and need more from you than a paycheck. Establish a positive relationship with your employees and watch your business thrive as employees become more devoted and enthusiastic about their jobs.
Sources:
• University of Pennsylvania: Giving Employees What They Want
• About.com: What People Want From Work
• MoreBusiness.com: Flexibility: What Employees Want in a Job
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Determining Your Employee’s Salary
If you are hiring an employee for the first time, one of the most difficult tasks ahead of you is figuring out how much to pay him/her. The salary you offer must be fair and competitive, without paying too much for the job at hand.
SET BOUNDARIES
The first step to determining how much you will pay your new employee is to determine the ceiling and floor. The ceiling is the maximum amount you are willing the pay, and the floor is the least amount you should pay.
Decide how much the job is worth to you by asking yourself how much value someone in the available position will bring to your company. Also do some number crunching and determine how much you can afford to pay while still making a profit. For a salesperson, the pay is based on revenue and easy to determine. For administrative staff, you need to ask yourself what the cost would be to your company if there was no one filling the position.
Market rates are the source for determining the minimum you should pay. Candidates expectations are based upon the market, so you need to be aware of what the competition offers. You will first need to have a job description handy. Basing the market on title alone leaves lots of room for negotiation. For example, a marketing director can earn anywhere from $50,000 to $500,000 a year. Break the job down and be specific about the responsibilities it entails.
There are a number of sources available to determine the market value of the job you are offering. Call your local chamber of commerce and ask about similar jobs in the area. Read the local classifieds to see what others seeking employees are offering.
Search Google for “salary surveys” to compare business and trade magazine surveys of jobs nationwide. Or, you can also use websites such as the U.S. Bureau of Labor Statistics and/or Salary.com to determine past and current salaries locally.
TYPES OF PAY
There are several ways to pay an employee. Explore all the options based upon the job you are offerings before determining what works best for you. The following are types of pay to offer an employee.
1. Hourly
Hourly pay is typically associated with work product that is a direct result of the time put in, such as assembly line employees. You must meet the minimum wage requirements, which is $5.15 federal, but some state minimum are higher. This is also solely based on eight hour work days for a total of 40 hours a week. Hourly employees typically get time and a half for overtime and working on holidays.
2. Salary
Salaries are a fixed payment amount, usually determined by an annual salary that is divided into 52 weeks a year. Salary is usually associated with administrative positions, such as clerical or managerial jobs. Salaried employees are paid the same each pay period, regardless of sick days or vacation time (as long as it is within the parameters set by the company policy).
3. Commission
Commission pay is most often used in sales positions – a job that contributes directly to revenue. Most salespeople are paid a low base salary and then receive a percentage of the sales they bring into the company. This opens the opportunity for effective salespeople to make six and seven figures a year, which also means they are making 10-20 times that for your business.
4. Bonuses and Benefits
Keep in mind that most every applicant is going to expect some sort of incentive outside of legitimate pay. Consider offering bonuses occasionally as reward for a job well done. You should also look into benefits for your employees. Your first thought is, of course, health insurance and company stocks. But also consider the less obvious benefits such as a set amount of vacation time, paying for the employee to further their education, and even casual dress requirements. All of these make a job much more motivating.
PLAN AHEAD
When determining what the starting pay for your new employee will be, remember to leave room to grow. Everyone expects to and strives for earning a raise. Inflation, when the buying power of your employee’s salary drops while the amount is stagnant, occurs on a yearly basis. Salaries need to adjust to accommodate.
Also, consider the fact that, when and employee first starts he won’t know the ropes very well and will make mistakes, but, as time progresses, he will learn more and become more efficient, thus becoming worth more to your company. He will deserve a reflection of such growth in his paycheck.
Sources:
• Entrepreneur.com: How to Set Salaries
• Microsoft.com: 5 Steps to Determine an Employee’s Salary
• Bliss & Associates, Inc.: Deciding How Much to Pay Employees
• ItsSimple.biz: What Other Employers Are Paying
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Hiring an Employee - The Interview Process
If you’re hiring an employee for the first time, the interview process can be just as intimidating for you as it is for those who apply for the job. Here are some tips for smooth and successful interviews.
Get the Word Out
Once you’ve determined exactly what you’re looking for in the person you hire, write out a job description. Be sure to include the work hours, what education and experience is required to fill the position, the characteristics needed to perform the job successfully, and, of course, where resumes should be sent.
It is best to have two job description formats, a brief description for periodical circulations such as your local paper, and a detailed description for online job search engines, such as Careerbuilder.com. Also, check with local colleges and see if they have a career center, as most provide an online job search for students.
Review and Prepare
Set aside time each day to review any resumes you’ve received. It’s a good idea to have the job description in front of you as a reminder of what requirements you presented for the position. Rate each candidate on a scale from one to ten. This will give you a quick reference on whom to call first for an interview.
Also, for those candidates you intend to meet with, jot down any questions you may have about information they indicated on their resume, such as why they were unemployed for two years, or why they want to leave their present position. Additionally, you will want to have a list of basic interview questions that you ask each candidate, to give you a basis of comparison.
Some suggested questions:
• What would be the perfect job for you and why?
• What characteristics in a supervisor motivate you to produce your best work?
• Name and explain your top two strengths and weaknesses.
• Where do you see yourself in five years?
• Describe two instances where your work was criticized and how you responded.
Conducting the Interview
Anyone who walks through your doors for an interview is going to be nervous, regardless of their credentials. Put them at ease by starting with small talk and neutral topics such as what the job entails or how and why you started the business and where you see it heading.
Then move on to questions about the information listed on their resume. Avoid questions with yes or no answers, but, rather, keep the questions open-ended. To avoid rehearsed answers use follow-up questions and keep the candidate thinking on their toes.
Have interviewees bring documentation with them to prove the accuracy of their resume, such as college transcripts or letters of recommendation from previous employers. Not everyone is honest on their resume, in fact, nearly 40% of job applications have some sort of inflated or bogus information, so have then verify it.
During the interview keep your eyes open for the expression of qualities you’re looking for in a potential employee. Is the candidate communicating clearly? Does she express passion for the industry? Pay attention to the nonverbal cues such as their posture and outward appearance. Did he take time to iron his shirt?
You may also want to consider having each candidate take a personality or assessment test as part of the interview process. I highly recommend investing in the Personality Puzzle Test developed by Florence and Marita Littauer specifically for employers and employees. Take it yourself and then provide it to potential candidates to see how well your personalities will click.
Before making any decisions, always call all references listed on the resume and anyone that may have written a letter of recommendation (to verify that he actually wrote it). Also, it’s always a good idea to perform background checks on education, judicial matters, and previous employers. You’d be surprised what some people think they can hide.
Be sure to give the potential employees a time frame for when they can expect to hear from you. They will be anxious, so don’t leave them hanging in the air on whether or not they got the job. Make personal calls or write rejection and offer letters. If it is a rejection, be sure to explain why so that they can see where they might need improvement.
For further information on the requirements for becoming a first time employer, be sure to check out yesterday’s post How to Hire Your First Employee.
Sources:
• Entrepreneur.com: Hiring Your First Employee
• Entrepreneur.com: Interviewing Applicants
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Preparing Your Company for its First Employee
The signs are fairly obvious. Most of your waking moments may be spent running the business, and time is taken from your family and friends. Maybe you’re unable to keep up with demand and are actually having to turn customers away.
More or less, your stress level is beginning to climb rapidly as the papers stack up and nothing seems to get done. It’s time to get some help.
Before looking at prospects, consider these things:
What are you looking for?
Make a list of the things that need to be done for your business to run smoothly. Indicate which of those tasks you must do, which of the tasks you’d prefer to do, and which of the tasks can be delegated elsewhere. The latter is what you need that first employee for.
Think about what kind of manager you are in order to determine the best type of person to fit your style. If you’re the type that delegates and then does your own thing, then you will need someone who can think independently. If you get stressed occasionally, then you may want someone that works well under pressure.
Next, decide exactly how you want the business to grow with the additional help. If you’re looking to take this transition slowly, then you need someone for the clerical and administrative tasks that you just can’t seem to get to, such as filing and mail. If you’re ready to plow full speed ahead, you’ll want to find someone that can handle larger areas such as sales and distribution.
Once you’ve figured out exactly what you’re looking for, write out a job description. This will come in handy when you are coming up with help wanted ads and during the interview process, but it will also serve as a personal reminder of the load that will be taken off your shoulders once the right person is found.
What are the legal prerequisites?
There are several things you will need to do in order to legally be ready to hire someone.
• Obtain an Employer Identification Number (EIN) for tax returns.
• Obtain Workers’ Compensation Insurance.
• Register with the Department of Labor for your state.
• Invest in payroll software in order to properly withhold taxes. See the IRS Employer’s Tax Guide for further withholding information.
• Provide a safe working environment based upon the Occupational Safety and Health Act (OSHA).
• Familiarize yourself with IRS Form 940-EZ, which you will need to file each year.
What are the business prerequisites?
In addition to legally preparing for an employee, it’s a good idea to implement additional business practices prior to seeking help.
• Determine what your time-off policy will be, such as vacation time, sick days, maternity leave, etc.
• Set up employee benefits, if feasible, such as health insurance or a 401(k) plan, including a sign-up procedure.
• Determine the disciplinary and review procedures for your business.
• Create an employee handbook, which indicates your business policies, including those items previously listed. Include a signature page for the employee’s indication that he/she read the handbook.
• If you have any information you need to protect from the competition, such as the recipes for your gourmet restaurant or lists of clientele, have an attorney draw up a Non-disclosure Agreement and/or Non-compete Agreement for every future employee to sign.
Hiring an employee can be intimidating, as it will knowingly take up precious time and resources. Make sure that your reservations don’t keep you from waiting too long. Missing the right window of opportunity may force you to hire in a hurry, resulting in the wrong person for your business.
Even if your situation only seems moderately stressful, evaluate your business and whether or not even a part-time employee might make things run more smoothly. At the very least, you will be able to determine when you may need someone in the future and start planning ahead to make the transition easier.
Sources:
• Inc.com: The First Employee
• Nolo.com: Hiring Your First Employee - Ten Things You Must Do
• Microsoft.com: Five tips for Hiring Your First Employee
• AllBusiness.com: Ten Tips on Hiring Your First Employee
Tags: Employer Identification Number, Department of Labor, payroll software, OSHA, employee benefits, 401(k), business policies, Hiring an employee
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Starting a Successful eBay Business (Part 4)
CONTINUED SUCCESS
BUILDING AN eBAY EMPIRE
Congratulations! Your eBay business is now up and running and bringing in the dough! You may even be ready to expand your part-time operation into a full-time adventure. Let’s examine some ways to upgrade your business and continue on this successful path.
Flexibility
It is important to be flexible. Be willing to change the market you’re in to match the current trends. New opportunities will come knocking, and you have to be willing to take advantage of them. Flexibility also means variety, which, as they say, is the spice of life.
Quality Customer Service
Upgrade your customer service to the next level. For example, you may want to provide a handy 800 number for potential buyers to reach you immediately for answers to their questions. Send customers an e-mail with each new phase in the conclusion of your transaction, such as thanking them when you receive their payment, notifying them when their item has been shipped, and following up with them when they receive the item to ensure satisfaction.
Providing a tracking number with every shipment earns brownie points and gives the buyer peace of mind. You may also want to consider providing discount shipping to your buyers with the purchase of more than one product from you. This strategy is a must if you are selling products such as books or movies, since the shipping cost for multiple items increases minimally. This option is very popular and one of the first incentives that buyers look for. A seller who doesn’t provide a multiple item shipping discount can really turn a buyer off.
Tips, Tools & Advice
Joining an eBay community can help you to determine what buyers are interested in as well as get advice from fellow sellers, or just meet new people through discussion boards, blogs and chat rooms. The PowerUp Newsletter provides helpful tips, ideas and eBay news.
There are also some great tools available to help you improve your eBay business. Sellathon.com provides a 30-day free trial of ViewTracker, which provides information on potential buyers, including what search terms brought them to your listing. Seller’s Assistant Pro is eBay’s desktop sales management tool. And eBay’s free program Turbo Lister allows you to recreate your listings in bulk, without having to retype each, and without loosing that professional quality.
Who You Are
Don’t forget to fill out the About Me Page. This gives you an opportunity to share with your potential customers what led you to start your eBay business and what ideals your business holds to. Providing this information to your buyers helps them to feel as though they can trust you and will keep them coming back.
eBay Store
The best way to boost your sales and expand your eBay business is to open an eBay store. On average, sellers see a 25% increase in sales within three months of opening an eBay store. Your store will cost a monthly fee, but you do receive discounts on other eBay fees and access to many other features and services that are not available with regular listings. You can create both auction-style listings and items with fixed prices, adding flexibility to your setup. Your eBay store will allow buyers to find your products in one location, on a customizable webpage designed just for your business.
eBay Store Fees
Subscription fees for an eBay Store vary depending on the size of your operation, starting at $15.95 for the basic store package to $499.95 for the anchor store package. For more information, visit the eBay Store Subscription Fees page to view side-by-side comparisons of the 3 available storefront packages. Also available is the eBay Store Fees page which contains information about Insertion, Final Value, Listing Upgrade and Picture Services fees.
Implementing these additions to your already thriving eBay business will have you well on your way to an eBay empire. Many eBay business owners see sales in the millions each year. Though some days you may have to stretch and stand on your toes to get there, success in the eBay world is well within reach.
View Part 1 - Learning the Basics
View Part 2 - Selling an Item
View Part 3 - Casual Seller to Powerseller
Sources:
• AllBusiness.com: Nine Reasons to Open an eBay Store
• Entrepreneur.com: eBay Made Easy
• Entrepreneur.com: Getting Started on eBay
Helpful Links:
• Entrepreneur.com: eBay Center
• Owen & Emma’s eBay Store Library
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Starting a Successful eBay Business (Part 3)
CASUAL SELLER TO POWER SELLER
Now that you have a little experience under your belt, and have built up your feedback rating, it is time to transition from a casual selling hobby to an actual eBay business.
First, determine what exactly it is you want to do. Will your business be a full-time or part-time commitment? Remember, you can always start out part-time and see how it goes; you may want to expand later. Will you work from home or a commercial location? Will it be a one-person or couple operation, or will you hire employees?
The Product
Part of the transition to an eBay business is moving from selling miscellaneous items to a select category of products. The most successful eBay businesses specialize in a specific product category also known as a niche. Deal with products that most interest you, whether it is antique pottery or discount golf equipment. Your product line needs to be something that you can easily become an expert in, if you’re not already. This will give you a significant advantage over other sellers.
Once you have determined your products, research how many other eBayers are selling the same things. Competition can be fierce in the beginning, so you want to provide a product that will help your business to stand out as much as possible.
Next, determine how you want to set up your listings. You can either sell products by the auction method, by a fixed price only, or do both. If you have multiple numbers of the same item, you may want to list some as auction and some at a fixed price. This will give you an opportunity to see which way that particular item sells better.
Your Time
Selling on eBay can be time consuming, so establish a routine. Determine a block of time in your day or week that you will devote to your eBay business, if it is only part-time. If the business is a full-time operation, then map out your day by determining when you will respond to e-mail questions, when you will list new items, when you will package shipments, etc.
Also, when will you make trips to the post office for mailing? Most postal carriers, including the U.S. post office, will pick-up your shipments, if postage has already been paid and you arrange for them to do so. You can pre-pay postage through eBay or by establishing an account on the carrier’s website. If that is not currently an option, determine what day or days of the week you will drop your packages off. It is also important to indicate this in your listing details, so that the buyer is aware of how long it will be before the item is shipped.
The Details
Speaking of listing details, be sure that your listings reflect the professionalism of your business. Proofread and use the spell check option, which eBay provides, on all of your listings. Limit the type of fonts you use to two and don’t use background colors that make the words hard to read. Highlight important words like “Free Shipping” in a different color than the rest of the text, such as red, to draw the buyer’s attention to them.
Supplies
This transition period is also a good time to invest in whatever equipment you don’t already have readily available. A digital camera and postal scale are a must. It is helpful to have a digital camera with a macro setting so that you can take close-up shots of smaller items or details.
If you are working from home, you may want to consider setting aside a work area just for your eBay business. Not only will this make things simpler because everything is right at your fingertips, but also be able to use the space and organizational products you buy as home office tax deductions.
Start slow, listing only a few products each day, so that you don’t have them all ending at once and become overwhelmed. As time progresses and your routine becomes more established, it will be easier to step it up a bit. You’re your own boss, so determine a pace that works best for you and stick with it.
View Part 4 - Building an eBay Empire
View Part 2 - Selling an Item
View Part 1 - Learning the Basics
Sources:
• Entrepreneur.com: eBay Made Easy
• Entrepreneur.com: Getting Started on eBay
• AllBusiness.com: Setting Up a Home-Based eBay Business
Helpful Links:
• eBay.com: Getting Started as a Seller
• Entrepreneur.com: eBay Center
• AllBusiness.com: The eBay Business Plan
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Starting a Successful eBay Business (Part 2)
SELLING AN ITEM
The first step to selling on eBay is to establish a seller account. This will require more personal information than your original registration with eBay, including verification of your identity, but it is, again, secure and never shared with other eBay users.
Choosing Your Product
Next, you need to figure out what to sell. When just starting out it is better to get a feel for the way it works and to iron out all the kinks before starting your business, so you may want to consider using the “Laundry Basket” approach. Take a basket around your house and fill it with items you don’t need or use anymore. This is always good for those spring cleaning or sort through the attic days. You can sell almost anything on eBay, but there are a few exceptions, which you can view on eBay’s Prohibited and Restricted Items List.
To list an item, make sure you are signed on and then click the “Sell” link at the top of any eBay page. The form for selling an item on eBay is fairly simple, and it will walk you through each step, with help links available along the way.
Be aware of the fact that eBay does charge fees for selling. You will first encounter insertion fees, which are based upon how many features you use in your auction listing. You will also be charged a final value fee when the auction ends, which is a percentage of the final sale price. A list of these fees can be found on the Basic Fees page.
Taking Photos and Developing Item Descriptions
Once you have determined the item(s) you’re selling, you will need to take quality pictures to put on your listing. Items without pictures are much less likely to sell. The first picture for every eBay listing is free of charge. Each additional picture is $0.15.
This is where a digital camera and scanner come in quite handy. If the item is flat, like a book, a scanner works great because it captures the cover well. Other items need to be placed against a solid colored contrasting background, so that the features stand out and the item can be viewed easily. Make sure your picture is crisp, not blurry. It is also recommended that you stay away from stock photos on the manufacturer’s website. Buyers want to see what the actual item you’re selling looks like.
Also, make a list of details about each item to put in the items description. The more honest information you provide to the buyer, the more likely they will be to bid on the item. Indicate the dimensions of the item, the size, the condition it is in, number of pages, etc. It is important to remember that, when describing the condition, you do more than say “good.” Tell the buyer exactly what you see.
You will need a heading for your listing. This will be the first thing potential buyers see on their search results, so it needs to be something that will grab the buyer’s attention, as well as indicate crucial keywords so that you listing will come up on as many search results as possible. Avoid using unnecessary words like “cute” or “wow” in your heading, as these are not words that a buyer will use in a search. Also, you are limited on the characters you can use in a heading, so you need all the space you can get.
Pricing
Next, determine what the starting price for your item will be. Items that start at $0.99 and under will often get the buyer’s attention more easily, but there is risk involved with starting the item that low, since it is uncertain how many bids you will get.
Do some research on ended auctions for items like the one you are selling and see how popular they are. You can do so by using the advance search and checking the “completed listings only” box. This will give you an indication on how high the bidding might go on your item and if the risk is worth it. For example, if the DVD you are selling typically sells for $10, then starting it at $0.99 shouldn’t be a problem. But if it usually sells for $3.00, chances are, your item may not go much past the starting price.
All auctions have the option of adding a “Buy it Now” or “Reserve Price.” Buy it Now gives the buyer the option of buying the item for a set amount, so long as no one has bid on it yet. This is great for items like DVDs, when you are willing to sell them below market value.
A Reserve Price allows you to indicate the minimum amount you are willing to take for the item. This amount is not revealed to any bidders. All they will see on the auction is whether or not the current price of the item has met the reserve price. If it does not meet the reserve by the end of the auction, you are not obligated to sell the item to any bidder. However, you will still have to pay the insertion fees for the auction.
Shipping Options
You will also need to determine shipping costs. This can sometimes be difficult, so I recommend that you first buy a postage scale and then prepackage your item before you list it, so that you can determine the actual weight for shipping. The form for listing your item provides a postage calculator that will determine the shipping costs, based on weight and package dimensions, for most carriers (USPS, UPS, FedEx).
You have the option of setting a flat shipping rate that you pre-determine, or a calculated shipping rate which is based on the buyer’s address and any handling charges you may add (which are not revealed to the buyer). I recommend adding the cost of shipping supplies, eBay listing fees (typically under $1) and Paypal transaction fees to your shipping charges, so that those are covered even if you item only sells for $0.01. PayPal does charge a percentage of the transaction amount when money is sent to you, though it is quite minimal (less than 5%).
The eBay listing form is very easy and there are helpful links indicated to get you through it. Once you’ve listed one item, you’ll have the form down, but it will take observation to see what works to grab the seller’s attention. Get some practice with small household items before transitioning to a full-blown business, so that you know what you’re in for.
View Part 3 - Casualseller to Powerseller
View Part 4 - Building an eBay Empire
View Part 1 - Learning the Basics
Sources:
• Entrepreneur.com: eBay Made Easy
Helpful Links:
• eBay.com: Getting Started as a Seller
• Entrepreneur.com: eBay Center
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Starting a Successful eBay Business (Part 1)
LEARN THE BASICS
Since its start in 1995, eBay is one of the fastest growing business venues around. Over two billion items and nearly $50 billion dollars in final sale prices were produced last year, and every year eBay gets bigger and better. If you’re ready to start your own business, or expand your current one, using eBay will almost guarantee your success. This week’s four part series will take you through the steps of starting a successful eBay business, starting with eBay basics.
Most people are well aware of eBay and its primary function, but some just haven’t had the chance to use it yet. eBay is an online auction website, where you can find most anything you’re looking for, and quite often reasonably priced below market value. Like normal auctions (though, it is much easier to understand the auctioneer), buyers bid on an item and the highest bidder at the close of the auction gets the item for that price, plus shipping charges.
It is free to join eBay to browse and buy, so I recommend that you first register. To do so, go to eBay’s registration page, where you will supply your contact information, as well as pick out a user ID. Be aware that, should you plan to use eBay as a business, this ID will be viewed by all. So pick something that reflects who you are and what your business will be.
Take some time to explore eBay and learn about the features. There are eBay communities for discussions with other users, a help page, information for buyers, information for sellers; the list goes on and on. And do some shopping as well. The best way to learn how to sell on eBay is to buy on eBay. This will give you an opportunity to find out what works and doesn’t work for your future listings.
Bidding and Seller Ratings
It’s important that you understand that bidding on an item is a legally binding contract, and it takes quite a bit of effort to back out of a bid, including a mark on your eBay record and a possible reprimanding by eBay. So be sure to fully read each auction and all the specifics before deciding to bid. If you have any questions about the item or the seller’s policies, e-mail the seller about it before bidding, since you may not like the answer they give you.
The most crucial item to examine when you are interested in an item is the seller’s feedback rating. This will also be the first thing your future buyers will look at. A seller’s feedback rating is their reputation as both a buyer and a seller on eBay. It is a comment that the buyer/seller leaves about that user at the end of the transaction, reflecting how that person presented him or herself as an eBay member.
You will find this rating on the top right hand side of the item listing page, under “Meet the seller.” It will first list the seller’s ID, followed by a number in parentheses, which indicates the number of positive feedback ratings the seller has received from individual eBay members.
The next line will indicate what percentage of all of the feedback the seller has received has been positive during their entire membership on eBay. By clicking on the number following the seller ID, you will be able to view all the feedback the seller has ever received, positive, negative or neutral, and a summary of what that feedback has been for the past 12 months.
I highly recommend that you do not buy from someone with a feedback score of less than 10 or a positive percentage of less than 90%, as these sellers either do not have the experience to guarantee a trustworthy sale, or have proved themselves to be inconsistent and untrustworthy to other eBay users.
This is also important to know when considering starting an eBay business. You will need to purchase some items on eBay, and be a good customer, in order to build up your feedback rating, so that future buyers will be more likely to purchase an item from you. What qualifies as a good customer is someone who pays quickly and communicates well with the seller. Easy enough, right?
Sign Up for a Paypal Account
It is also important to register with PayPal, which is owned by eBay. PayPal enables you to pay for your items using a checking account, debit card or credit card in a secure and safe manner. In fact, PayPal has received such notoriety for its safe process that many online stores outside eBay are beginning to accept PayPal for payments of online orders.
Most eBay sellers will only accept PayPal payments, because it guarantees the payment will be received. Your payment information is never sent to the seller, as the payment is sent directly to PayPal and then PayPal sends it on. PayPal will be necessary when you are selling on eBay, since most buyers prefer to pay this way as well, so it is better to go ahead and get your account established now.
There are many more aspects of eBay that you should familiarize yourself with before starting and eBay business. EBay is easy to use, and you can most certainly learn as you go if you must, but it is better to understand the way the site works in order to make it easier when you transition from buyer to seller. I have provided some helpful links below to get you started.
View Part 2 - Selling an Item
View Part 3 - Casualseller to Powerseller
View Part 4 - Building an eBay Empire
Sources/Helpful eBay Links:
• BizHelp24.com: Starting an EBay Business
• Entrepreneur.com: Getting Started on EBay
• eBay.com: New to eBay Help Page
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How Changes in Congress Could Affect Small Business
Small business owners were glued to their televisions last week as election ballots were tallied. In the end, 51 Democrats had seats in the House, compared to Republicans 49 seats. The House currently has 230 Democrats and 197 Republicans, with eight elections still determined ties.
Based on a pre-elections survey done by Wells Fargo and Gallup, approximately 75% of business owners believed the congressional takeover by Democrats would have a direct effect on small businesses nationwide. Various issues are expected to come into play.
Trade Promotion Authority
President Bush has ambitiously been seeking renewal of the Trade Promotion Authority, which will lapse in June. Created in 1974, TPA allows the president to negotiate trade agreements. Congress can approve or squash the agreements, but cannot amend them, which protects the agreements from gruelingly being picked to pieces once they were made with the U.S.’s trading partners. The shift in power is expected to slow the President’s progress on getting a renewal approved prior to the lapse, if at all.
Taxes
Estate Tax/Death Tax have been a long time reformation agenda for small businesses. It is a taxation of 30-50% on assets that are transferred from one generation to the next upon death. In other words, if dad dies, and leaves son a business and property worth $20 million, it will be taxed up to $10 million. If an asset is left to a spouse or a charitable organization, the tax usually does not apply.
A repeal of the tax was on the table, but it is expected to fall to the wayside. There may be a bipartisan approach, but it is not expected to be anything immediate, as the estate tax is not currently a congressional priority.
Healthcare
As far as healthcare, small businesses have been pushing for some sort of reform that will allow them to provide affordable health insurance to their employees. One such hope was association health plans, which would allow small businesses to band together on one insurance policy, even across state lines. The idea is highly supported by Republicans, not as favored by Democrats. It is expected that some option will be extended to small businesses, although association plans will probably not be utilized.
Minimum Wage
The national minimum wage has been $5.15 per hour since 1997. Based upon calculations, someone working a full-time job at this rate would make just over $10,000 a year, which is the national poverty line. In last week’s elections, six states approved raising the state minimum wage. There are now 29 states, plus Washington D.C., whose minimum wage is higher than the federal.
Raising the national minimum wage is a top priority for Democrats coming into a new congressional year. There is speculation that an increase in minimum wage would harm small businesses and increase the unemployment rate. However, a study by the Center for American Progress found that employment in small businesses grew in states where the minimum wage has already increased. Inflation is another concern for critics, but, truth be told, the pressures and struggles for small business under an increase would be marginal.
Iraq
The war in Iraq was the number one issue on voters’ minds, according to exit polls. Though it may not be directly connected to small business, it deserves mentioning. The Democratic takeover of Congress and a new Defense Secretary, combined with the people’s dislike of the way the war is being handled, will likely lead to a change in approach and policy.
Democrats want the Iraqi government to take more responsibility for its development and the war on terror in their country. The plan for doing so is to start pulling our troops out of Iraq and handing over the reigns. There have been requests of President Bush to convene an international conference on Iraq. Other suggestions presented may be regional dialogues with our adversaries in Iran and Syria for assistance or developing three sectarian states of the country.
The replacement of Donald Rumsfeld has led most to believe that President Bush is more open to these suggestions. In his address to the country regarding Rumsfeld’s resignation, Bush stated, “ Secretary Rumsfeld and I agree that sometimes it’s necessary to have a fresh perspective.”
Changes are inevitably upon the horizon. Whether those changes are positive or negative depends entirely upon perspective. I would like to close with a statement made by Todd Stottlemyer, CEO of the National Federation of Independent Business (NFIB):
“Small-business issues transcend party lines and we want to work with lawmakers from both sides of the aisle to create an environment where businesses can flourish and grow and strengthen the American economy. That’s what NFIB is all about, promoting and protecting the right of our members to own, operate and grow their businesses. The key is providing a climate within which to do that.”
Sources/Related Readings:
• NFIB: Midterm Election Results In
• Business Week: Small Biz OK With New Congress
• Inc.com: What Does a Democratic Takeover of Congress Mean for Your Company?
• San Francisco Chronicle: Changes From Election May Weaken Bush’s Trade Agenda
• Reuters Election 2006: Economic Impact of Likely Minimum Wage Rise Unclear
• International Herald Tribune: Elections, Rumsfeld Exit Open Door to Change
Tags: Small business owners, Democrats, Republicans, congressional takeover, Trade Promotion Authority, Estate Tax, Death Tax, healthcare, association health plans, minimum wage, war in Iraq, NFIB
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6 Steps to Successful Sales
Selling is about the right ideas communicated in an effective way. The lucrative position of a marketing team is the salesperson, simply because he/she is the one who produces the actual sale. It is important, therefore, that as a salesperson, you know the essentials of being successful in your trade.
1) Focus on the Customer
Whether you are a door-to-door, over the phone, or in-store salesperson, the focal aspect of your sales pitch should be to connect with the customer. It is all about them; their problems, needs, company and situation. Truth be told, they don’t care about you and whatever issues you may have with rejection. They usually won’t be afraid to tell you no. So, focus on making your customer’s life better, and you’ve got your foot in the door.
2) Be Unique
Share a unique characteristic about yourself, which could be anything from where you grew up to the fact that you are on a champion bowling league. Communicate it to your customer through a fun button on your jacket or with a small gift, such as a pen. In other words, make yourself stand out and different from the status-quo, without wearing clown shoes.
Also, listen to the customer and discover something that you have in common. Use that commonality to connect with the customer on a more personal level. Don’t share an elaborate story about how your dog knows every trick in the book, but acknowledge the fact that you too are a dog lover.
3) Be Positive
Your attitude will inevitably come in full view when you are attempting to sell a product. If you are just plain tired of coming to work every day, your enthusiasm will be low and so will your sales. But if you strive to always have a positive attitude, regardless of circumstances, your success rate will likely be much higher.
And do not let the fear of failure stop you. If you’re afraid that you may not succeed in a particular sale, then you won’t. Fear prevents you from accomplishing goals and achieving your full potential, so don’t let it win. In the famous words of Mark Twain, “Courage is resistance to fear, mastery of fear, not the absence of fear.” Fear is part of life, so wake up swinging.
4) Pitch it Well
Know the business and the product like the back of your hand. It is important to be able to answer every question the customer may throw your way, and you can’t do that if you don’t know the information. Questions are important on your end as well. Ask questions that really make the customer think and that provide you with crucial information for the sales process. If you don’t know what the customer is looking for, then you can’t sell it to them.
A great exercise that will help you in developing a stronger sales pitch is the “ad reversal” process. Write an ad for the product you are trying to sell that would appear in a newspaper or magazine, and just start with the basics. Then, record yourself reading the ad out loud. Listen to the recording and make adjustments to make the “sound” of it more appealing. Repeat this process until you develop a verbal script for selling your product that you are pleased with.
5) Create a Means for Follow-up
Provide your customer with information they can look at later, whether it be a business card, a website or a brochure. It needs to be well designed and appealing. The better the design, the better impression you give the customer.
This is especially crucial if you were unable to produce a sale. If you give the customer further information to look over, you have opened an opportunity to follow-up. Ask them if they had a chance to review the material and if they thought of any questions you could answer or further information you could provide.
6) Utilize a Mentor
No one is the perfect salesperson, but everyone has quality traits in their salesmanship that you can learn from. Find someone, or even a number of people, that you respect, both in their personal and business ethics, and ask them to give you some pointers. The more you are able to learn from other people and implement, the more effective you will be as a salesperson.
Sources/Related Readings:
• Business Week: You’re Never Too Young to Sell
• EffectiveMeeting.com: Delivering an Effective Sales Pitch
• Entrepreneur.com: Ad Writing Made Easy
• Entrepreneur.com: Unlock Your Selling Potential
Tags: Selling, marketing, sales pitch, positive attitude, Courage, sales process, business ethics
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How to Write an Effective Advertisement
Children are often told that thunder is the sound of God bowling in Heaven.
See what I did there? I got your attention, didn’t I? Your first reaction may have been “What does thunder have to do with writing ads?”
The answer: everything.
The first, and most crucial step to writing an effective ad is to seize the reader’s attention with a strong opener – give your ad “thunder” (See, told you). Catching you prospective consumer off guard will inevitably get him to read the entire ad, if nothing else but to see what it’s all about.
Be sure to avoid opening with a question directed at your prospective consumer, as this is highly overdone. However, rhetorical and abstract questions are okay, when used properly. An example of this could be “ Why is a square always a rectangle, but a rectangle is never a square?”
Then, create interest by bridging your opening statement to the product you are offering, such as my previous use of “thunder.” Follow by creating desire for your product by stating a problem and showing your product to be the solution. Tune in to the reader’s emotions. The point of your ad is to lure the prospect to contact your business in pursuit of a purchase.
Be sure that the text of your ad is appealing to the eyes by using short sentences and smaller paragraphs. White space is always effective. If you want to use color, be consistent and only use it in one or two places, such as the opening statement and your business’ contact information.
Graphics and pictures are always a plus, as they can be very effective in drawing initial attention to the ad, especially if your ad is one among many. Consider using a font other than Times Roman or Sans, if the option is available, but make sure it is still easy to read. And always remember to continually read and re-read your ad for spelling and grammatical errors. Any such error takes away from all credibility that a brilliantly written ad may have.
Finally, create a closing that connects to your opener. Your closing also needs to state the action you want the prospect to take, whether that be “ Call 1-800-THUNDER today” or “ Visit our website,” etc. Get feedback from coworkers, family, friends. They resemble your market and will let you know if something isn’t working right.
Still getting writer’s block? Try writing 10-15 opening statements and walk away, leaving them to sit overnight. Come back to them in a day or two and see which one jumps out at you.
And, if you fall short on experience, a great way to practice writing ads is to grab your local paper or telephone book and pick out some bad ads. Dissect them, making notes about why you think they don’t work. Then rewrite them! Not only will this give you confidence in your ability to write a great ad, but it will help you to learn and avoid what doesn’t work.
Finally, test your ad. Give it a week or two and see what revenue it brings in. Once you create an ad that works, stick with it. Keep it in the same format, venue and media type for as long as the ad brings in new calls or visits to your website.
Ad writing is simply an effective sales script on paper with eye catchers. Ads bring prospects to your door or website, but do not seal the deal, so be sure not to rely fully on them. Have an effective sales team in place, ready to transition the prospect from intrigue to consumer. You can even reverse the ad writing process to develop a great sales pitch.
And, always remember that your ad should leave your prospective consumer “ thunder-struck.”
Sources:
• Entrepreneur.com: Making your Advertising Message Stand Out
• BellaOnline - Office Site: How to Write Effective Ads
• Hartfelt Promotions: Marketing 101: Writing Ads
• Entrepreneur.com: Ad Writing Made Easy
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Internet Search Advertising: Google vs. Yahoo
The idea was simple and logical. If an individual searches for golf clubs on the internet, it only makes sense that vendors selling golf clubs should advertise on a search engine to bring in more customers.
The recent demand for search advertising has produced serious competition between the two main internet search engines, Google and Yahoo.
Currently, search advertising is an $8 billion global industry, and its worth is expected to sky-rocket to nearly $22 billion in the next five years. No wonder the two major search engines are both still going strong. Both Google’s AdWords and Yahoo Search Marketing (YSM) offer search advertising by allowing advertisers to bid on space identified with keywords and adjacent to search results. The key to the development of their head-to-head lies within the differences in their network connections and business philosophies.
When Yahoo’s top executive, Terry Semel, joined the company four years ago, he brought with him a long list of Hollywood contacts, and Yahoo has recently starting building a headquarters in Hollywood. Semel is a no-nonsense businessman and doesn’t play around, implementing tough discipline in management into the company. Yahoo is beginning to lean more toward being a media company, rather than an innovator of technology. Their focus has, therefore, shifted to traditional, handholding partnerships with ad agencies.
Google, on the other hand, focuses on the individual potential of their staff. They depend on their engineers to come up with innovative ideas for the company, and therefore expect them to spend one day a week on a special interest project of their own. Google has some of the top engineers in the country under its belt, and continues to attract them. Their focus is technology and innovation, and the Google executives are well aware of the fact that they must remain innovative to stay on top.
Recently, as most know, Google acquired YouTube in an effort to expand its advertising market to video advertising. Now Google again expanding its borders and upping the ante. They are currently in the test phase of an online marketplace that will allow advertisers to bid on print-ad space in more than 50 major U.S. newspapers, including The New York Times and Denver Post, The Washington Post, The Boston Globe and the Chicago Tribune.
And Google’s leaps forward are beginning to leave Yahoo in the dust. Though Yahoo had maintained an edge for some time, a Web tracking firm recently showed Google forging ahead of Yahoo as the number one search engine. Google’s stocks are currently only ten percent below their all-time high, while Yahoo’s stocks have plummeted nearly 40 percent this year.
Advertising agencies tend to lean toward Google based on the fact that Yahoo has a tendency to be a late-bloomer when it comes to innovations, such as blogs and video. For example, Yahoo’s much anticipated new search technology for advertisers, dubbed “Panama,” was due to take flight this summer, but has already been delayed with an unspecified release date.
Critics expect Google to eventually hit a rough spot as their innovations begin to dwindle. However, considering recent and upcoming developments in Google’s advertising industry, I don’t foresee that happening any time soon. If you’re seeking search advertising as a marketing option for your company, it appears that Google is currently the way to go.
What’s your experience with Google and Yahoo search advertising? Please share your experiences and comparisons.
Sources/Related Readings:
•News.com: Google vs. Yahoo: Clash of Cultures
•CNNMoney.com: Yawns for Yahoo, ga-ga for Google
•Business Week: Google’s New Frontier: Print Ads
• Forbes.com: Google vs. Yahoo!
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Mompreneurs: Balancing Work and Motherhood
We are society of hard-workers, and moms are no exception. Unfortunately, because of a woman’s innate longing to care for her family, the combination of motherhood and work often produces a ting of guilt. Though every situation requires different solutions, here are some tips for helping to balance your job and your family.
Explore Your Options
There are a number of possibilities when it comes to working when you have children that you may not have even considered. If applicable, take time to talk with your spouse and consider the following:
• Can you revamp your work schedule by changing the hours or how many hours you work?
• Can you do part or all of your work from home? Is there another job opportunity that will allow you to work from home, or could you start your own in-home business?
• Look at your family budget – is there any way you can cut back on work during the first couple of years of your child’s life?
Become Forever Organized
Once you’ve determined that you are going to work, in whatever way that may be, it is very important that you get organized and stay that way. If you work at home, organize your work environment. Working at home does not allow for time to search through stacks of paperwork to find a specific receipt or to fumble through a desk of debris to find a pen. You can use all the time you can spare.
Get organized, such as using a filing cabinet, so that everything is easy and sufficient. And always be sure to childproof your home work space if you have little ones. Consider designing a play area in your office so that you can spend time with your children without crayon marks ending up on your papers.
You should also organize your schedule. Your time with work and family must be balanced; otherwise one or the other will be left wanting. If you work from home, you must first realize that you will usually not be able to keep normal business hours. Map out your time with a pocket calendar or blackberry that has both your personal and work appointments on it.
Make a list of your goals, both for work and family, for each month. Then, break your list down by weeks and then by days. Be committed to getting the things on your list done, tackling them one day at a time. This will allow for daily accomplishments that will aid in keeping your moral up. Also, consider scheduling a day, weekly or bi-weekly, in which you only spend time with your family. Work will always be there tomorrow, but each stage of your child’s life is short. Take a little time away from work to enjoy those precious moments.
Cut Yourself Some Slack
Don’t expect too much of yourself when it comes to having a spotless house and a home-cooked meal on the table every night. Your priorities are your family and then your work. Though you want to avoid becoming a slob, housework can usually wait until tomorrow. Don’t wear yourself ragged trying to get everything done at once. In order to relieve a bit of stress, consider doing the little things in the evening before bed, such as getting out the kids clothes for the next day or getting the coffee pot ready. You’ll be glad your morning is a bit less chaotic when that alarm goes off.
And don’t be afraid to ask for help, because, as we all know, that’s what family is all about. Sit down with your spouse, and even your kids (providing they’re old enough), and figure out a logical way for everyone to share the load. Determine what household chores could be done by other members of the family to give you a bit of a break.
Take Care of You
Be sure not to forget about yourself and your personal needs. Taking care of yourself is crucial because, if you’re not happy and healthy, then that reflects negatively upon your family and your work. Guard your mental and physical health by using your calendar to schedule “me time.” You may have to get up before everyone else to get in a little work-out and a bubble bath, but if that’s what it takes, it’s completely worth it.
Consider having an evening out with the girls once a month while dad stays home with the kids. There are lots of possibilities, and you must implement something for the well-being of you and your family.
These four steps are only the beginning. Keep in mind that balance isn’t always something that you necessarily obtain, but it should always be something that you are striving toward. And you’ve found a good place to start.
So how do you make it work? Share you thoughts.
Sources:
• Entrepreneur.com: 10 Tips for Balancing Work and Motherhood
• FindArticles.com: The Working Mother’s Dilemma
Resources for Working Moms:
• Working Mother Magazine
• WorkingMom.com
• Working Mom’s Refuge
Bookmark to:
b0
[Link]
Becoming a Government Contractor
A certain percentage of government contracts must go to small businesses as a means of providing aid for those businesses to build a stronger foundation. Any small business owner with the capabilities would willingly jump at this opportunity. After all, obtaining a government contract means an outrageous opportunity for your business to grow in exponential ways. But before you dive into the deep end of the ocean, it’s important to know what you’re in for.
Feel the Power
First and foremost, don’t underestimate the power that you are dealing with when working for the government. If you do something they don’t like, they are capable of exhausting all resources to get you to pay for it, most of which you will not be able to fend off. Your intentions should be of strict honesty and reliability — as a goverment contractor, you will likely be audited on a regular basis.
Know the Rules
The rules of government contracting are lined out in the 1,000 plus pages of the Federal Acquisition Regulations (FAR), which were created through decades of the government’s experience with contractors to counter every viable scandal or corruption that any business can throw at them. Intimidating? Well, that’s the idea.
You won’t be expected to memorize the FAR, but you should familiarize yourself with it. Specifically, you need to know Part 12, which relieves contractors and subcontractors who provide “commercial items,” or products rather than services, from many of the federal contract requirements (and paperwork). You need to know whether or not this section applies to you, and, if it does, you will probably need to occasionally remind the people you deal with once you’ve obtained a contract.
Register
In order to do anything with the government, you will first need to register with the Central Contractor Registration (CCR). There are also more opportunities available to your business if you are of the minority, such as woman owned. If that is the case, you should also consider becoming certified as part of organizations such as the Women’s Business Enterprise National Council (WBENC) or the National Minority Supplier Development Council (NMSDC).
Also be aware of the fact that, in order to apply for a contract with the government, you will need to supply your D-U-N-S number, which, if you do not have one, can be obtained at Duns & Bradstreet. Also, on your application for a contract you will have to classify the products/service you provide with a classification number. You can determine what that number is by accessing the North American Industry Classification System (NAICS).
Past Performance
The government relies on references, or past performance in the government industry, as a basis for narrowing down their contractor options. This makes it rather difficult to obtain a first time contract. You may want to consider starting as a subcontractor, working for another company that has already obtained the prime government contract. There are established Mentor Protégé programs that are worth looking into, in which a large business helps a small business get started in government contracting. Another option is partnering with another company to combine the services you provide, thus strengthening your resume.
Research
You will then need to find out what the government is looking for. There are many sources for this information, some of which have been listed below for your convenience. Also, consider state and local governments as an alternative to the federal government directly, especially if you are just getting started. Cities, counties, districts, etc. often contract more goods and services than the federal government, opening up more opportunities for your business.
Once you have determined what contracts you will bid on, research the industry. Look into your competitors so that you have a better idea of what you can offer the government that they can’t. Also, research the government agency that you are applying with. The more knowledgeable you are about the agency, the better your company will look to them.
Please be aware of the fact that this is only a simplification of the process ahead of you in pursuing a government contract. There is a lot of information out there, some of which I have supplied below, which you should look into before pressing on. It’s a highly complicated and long process, so the more you know beforehand, the better.
Sources:
• Entrepreneur.com: Think Big
• Entrepreneur.com: Become a Government Contractor
• CapturePlanning.com: How to Become a Government Contractor
• Washington Business Journal: So You Want to Be a Government Contractor
Government Contractor Resources:
• Small Business Administration: Government Contracting
• U.S. General Services Administration: How to Sell to the Government
• Federal Business Opportunities
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a7 [Link]
It’s all in the Family: How to Setup a Family Business
An estimated 95% of all businesses in the US are family-owned, whether it be through stocks or directly running the company. However, the difficulties that come along with a family business account for the fact that few make it past the first generation, 33% survive through the second, approximately 10% make it to the third and only 3% see the fourth generation or farther.
There are three main factors that contribute to this failure: sibling rivalry, financial problems and the fact that there is no one qualified enough to take over when Dad retires. Unless you take these crucial steps in developing a strong family business, the odds will be stacked against you.
Can You Handle It?
If you want the business you create to remain in the family, you must first determine if you family can handle the pressure. It is important that you have a strong, close-knit relationship with your family members before-hand. If there is already tension within the family, a family owned business might not be the best idea for bringing you closer. However, if you have already come through some challenges and remained arm-in-arm, chances are you could handle it.
Set Criteria
It is important that you don’t just let anyone in the family become part of the business just because you want them involved. Not everyone is qualified to run a business. Let each of them know that you have criteria in place that they must meet before being considered for a spot in the ranks.
Consider stipulating in your company bylaws what the requirements are to have ownership in the business, such as experience in the trade or a degree in business management. Another option is to let your young children or grandchildren know that, should they ever want to get involved in the business down the road, they need to prepare themselves with a competent education and by taking time to learn the business early.
Clearly Define Goals and Roles
Determine the goals of the company, and get the input of each family member. If it is a company you’ve already started and you are considering bringing your family along for the ride, give them an opportunity to voice their opinion about where the business is headed. Keeping an open mind and taking everyone’s thoughts into consideration will allow for better communication down the road.
Define the roles of each family member, including your expectations for that person in the role they carry. This is one of the most important aspects of avoiding serious conflict within the business. Consider having a written job description for each family member on file as a reference point.
Also, define the chain of command. This includes determining wages, the evaluation process and who each member will report to. Wages should be based upon salaries in a comparable position outside your business or qualifications for their position. Defining the roles of your family members will help unrelated employees to feel as though they are valued too, as well as provide a more stable environment.
Work Time vs. Family Time
It is crucial to the structure and well-being of your family that you draw clear lines between work time and family time. Do not allow work time to take away from family, whether it be spending too much time at work with your children and not enough time outside the office, or in keeping your children away from their own spouses and children by requiring too much of them. Clearly define when the work day begins and ends. Obviously there will be times when someone needs to work a little overtime, but this should not be a regular practice, as it only adds to stress and tension among family members.
Also, learn how to determine whether an issue is personal or professional. Deal with the issues accordingly by setting aside a specific time and place to do so. Be sure to create an environment that allows for open and honest communication between you and your family members/employees. In other words, do not belittle each other’s feelings or opinions, but always fully hear each other out and determine a legitimate resolution. If everyone feels as though they can be honest with one another, it will allow for less conflict.
Plan for the Future
Only about 28% of all family-owned businesses have a succession plan in place. 68% of business owners wait until they are ready to step down before beginning a plan for who is to take over. The smarter route: start planning who gets the big man’s chair approximately ten years before handing it over.
Focus on the needs of the business, not emotions. Choose someone to take over that knows the business nearly as well as you do and has shown and interest in running the company. Understand that the best person for the job may not always be a family member. You may also consider dividing the role of successor up among, say, two of your children, who show equal potential and gumption.
You also need to have an estate plan in place. If you don’t the business can be taxed 37-55% of its total assets on the death of a founder or single business owner. For example, if, as the owner of the company, you pass away, and your company has revenue of $20 million a year and an additional $5 million in assets, the IRS can take upwards of $14 million in estate tax if you do not have an estate plan in place. Provide protection for your family and your company by having a will, a life insurance policy and/or a buy-sell agreement for the distribution of company stocks.
These steps are crucial to helping your family-business and your family survive. However, the most important thing to remember is that family comes first and you must do what is necessary to ensure that your relationship with your family stays strong and close.
Sources:
• Entrepreneur.com: Running a Family Franchise
• FindArticles.com: Keeping it in the Family
Family Business Resources:
• Business Link: Family Run Businesses
• Family Business Magazine: Current Issue
• Loyola University Chicago: Family Business Center
• Small Business Association: Challenges in Managing a Family Business
• Family Business Magazine: America’s 150 Largest Family Businesses
Bookmark to:
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Breakfast in a Whole New Way
There is a new hit at some of our nation’s university campuses that is quickly headed toward popularity as widespread as Starbucks and McDonald’s. In September of 2004, David Roth and Rick Bacher started an innovative new business called Cereality – a cereal café on the campus of the University of Philidelphia. Since that time they have opened three other locations.
Huh? What’s a cereal café? Well, Cereality’s pajama-clad employees serve 30 varieties of cold cereal, with the option of mixing together and topping with anything from fruit to M&Ms, and even ice cream, served in a Chinese food style container. This couch filled environment, with cartoons always playing on the TV, is reminiscent of those Saturday mornings when, as children, we didn’t have a care in the world.
The common reaction: Why didn’t I think of that? Many wishing they had and Cereality are now facing some competition. And why not? Cereality already took the risk for them. Bowls, located at North Carolina State, opened in 2005. The Cereal Bowl opened this year across the street from the University of Miami and their projected first-year sales are expected to reach upwards of $350,000. Not too shabby.
Cereality welcomes the competition, but has recently taken steps to protect the franchise they are in the process of building. Roth states that he is trying to act before the big guys, like Starbucks, try and take a piece of the market. Cereality has applied for trademarks for its name and around 50 slogans such as “It’s always Saturday morning,” or “What’s in your bowl?” They have also applied for patents covering business processes, such as storage methods and cereal combinations.
Cereality also sent warning letters to Bowls and The Cereal Bowl, making patent claims on everything from the containers they use to mixing brand-name candy toppings with the cereal. They also sued Ohio’s new business Cerealicious for trademark infringement. The Cereal Bowl followed suit by sending a letter to Bowls and responding defiantly to Cereality.
Roth states that they plan to continue franchising, including partnerships with hotels and retail chains, and providing online sales and catering. Cereality has received 6,000 plus applications for partnerships from all over the world. Roth hopes to have at least 30 new partnerships by 2008. With an estimated 95% of Americans eating cereal, these gentlemen have stumbled onto something “Grrrreat.” Makes one wonder what other business opportunities are staring us in the face, waiting to be presented to the world.
One question remains: When are you opening one in my town?
Sources/Related Readings:
• Entrepreneur.com: Bowled Over
• Time Magazine: In a Real Crunch
• PRNewsWire.com: 1500 Square Feet of Cereal
• USA Today: A Whole New Bowl Game
• FastCompany.com: Customer Service Local Hero - Cereality
• Catalyst Magazine: The Cereal Cafe
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a3 [Link]
Why Trump & Kiyosaki Want Us to Be Rich
We all know who “the Trump” is, so he needs little introduction. To summarize his expansive money-making career, he is a graduate of Wharton School of Finance and prosperous real estate tycoon. He’s the star and co-producer of the ever popular reality show Apprentice and author of seven bestsellers.
Robert Kiyosaki came from a small sugar plantation town in Hawaii, only to move to New York for education. He is an investor and a mining and real estate entrepreneur. He is best known for his book on financial philosophy called Rich Dad, Poor Dad. Published in 1997, and selling over 26 million copies worldwide since that time, this book has been translated into 46 different languages and is available in 97 countries.
These two financial gurus teamed up to write and publish “Why We Want You to Be Rich,” which hit bookstores on October 10th. To the disappointment of most, this is not a book of specific advice on how to make or invest money. It is a book of philosophy, with the intention of providing the middle class with means to change their attitude about money and obtain a financial education.
In a video available on Amazon.com, Trump claims that he is not afraid of failing. “What is there to be afraid of?” he says, further stating that, when one considers all the turmoil in the world, nothing else really matters. Kiyosaki follows with the fact that he and Trump are better people because they have both failed and made a comeback from that failure, which provided them with a sound education about money that the two wanted to share. Because, “financial education is more important than ever before.”
The central principal of this book is that Trump and Kiyosaki firmly believe that, within the next decade or so, our country will be a two-class system – rich and poor. They believe that the middle class is deteriorating rapidly due to the falling value of the dollar, rising national debt, lower wages, higher oil prices and baby-boom retirement. It is time for everyone to learn how to “think big” and “think rich,” otherwise your other option will be the poorhouse.
The introduction of the book states that “saving is obsolete and bad financial advice.” For example, Trump and Kiyosaki believe that the 401(k) savings plan will not be adequate for approximately 80% of all workers to provide for their future. They support investments such as real estate and starting your own business as the best means to building personal wealth.
Trump claims that this book will provide the reader with a “better life.” He contends that money isn’t everything but it “makes life easier.” It is about “attitude” and “creation of wealth.” He also advices that everyone needs to “know your subject.” Investing in real estate without understanding it can lead to your downfall.
Kiyosaki admits that their book is different from the traditional financial book that says to live below your means, save and invest. He and Trump’s advice is that one should learn how to expand his means, like they do. Also, watch long-term trends – see where the money is going so that you know what to invest in.
So what do you think? Have you read the book? What are your thoughts on Trump and Kiyosaki’s financial philosophy? Some believe it is just another way for Trump and Kiyosaki to make more money – do you contend? Or has their philosophy worked for you?
Sources:
• Amazon.com: Why We Want You to Be Rich
• Kiplinger.com: Book Review
• Kiplinger.com: Q&A With Trump and Kiyosaki
• Kansas City Star: Trump book contradicts standard advice
Trump/Kiyosaki Resources:
• WhyWeWantYouToBeRich.net: Book Website
• Trump.com: Donald Trump’s Website
• CashFlowTech.com: Rich Dad Website
• Wikipedia.org: Info on Robert Kiyosaki
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Immigrant Entrepreneurs
Each year, Inc. Magazine lists what they call the “Inc. 500,” which is a list of America’s fastest growing privately owned businesses. I highly recommend reading the stories of these entrepreneurs – they are very inspirational.
What stuck out to me about this year’s list is that at least 55 of the 500 business owners were not born in the US. Their companies employ more than 14,000 and contributed in excess of $1.36 billion to the economy last year.
Every census taken from 1880 to 1990 revealed that immigrants were self-employed significantly more than American-born natives. The number of immigrant entrepreneurs in 2005 was 350 out of 100,000, compared to 280 of 100,000 for those born on American soil. Clearly, there is something to be said about “the land of opportunity.”
There have been numerous studies into the dynamics of immigrant entrepreneurs, many reaching the conclusion that immigration has “strengthened the entrepreneurial drive” within our nation, contributing to the surge of small businesses over the last few decades.
The Driving Force Behind Immigrant Entrepreneurship
Why are immigrants more likely to start their own business? There are a number of reasons. Consider the risk it takes to pick up everything and move to a country where the majority of people don’t even speak your language. Immigrants deal with a high rate of uncertainty in that alone, so starting their own business would comparatively seem but a moderate risk.
There is also the factor that many immigrants face numerous struggles and frustrations in the large business work force, as they are often paid unfairly and required to work uncommon hours. This often leads immigrants to seek other options, which typically includes starting their own business, as they recognize that they can offer a variety of products and services that many other entrepreneurs cannot.
It is often stereotyped that immigrant businesses are usually small “mom-and-pop” restaurants or dry-cleaners, but the options for many immigrants has vastly expanded in the past few decades. Those who moved to the US to obtain a higher education, rather than flee oppression, account for a number of the successful immigrant entrepreneurs in our country. It is estimated that up to 25% of Silicon Valley firms were established by immigrants.
Immigrant communities also tend to provide a strong degree of support for each other. First generation immigrants, who made their living with the “mom-and-pop” businesses, tend to push their children to explore other professions, such as legal or medical professions. Others may take new immigrants in under their wing, providing apprenticeships so that the newcomers can either take over the business or start successfully on their own.
There have been numerous studies into the perceived benefits or disservices of immigrant entrepreneurs, but, with so many differing opinions, little definitive information has been established. Some find them to aid the economy, while others find them to be exclusive and harmful. Questions remain without answers.
So, what are your thoughts? What, if anything, do immigrant businesses contribute to our economy? Our society? How many jobs do they create? What sort of jobs? Do they aid in foreign trade?
Please share your opinions on these or any other issues regarding immigrant entrepreneurs.
Source / Related Readings:
• Carnegie Endowment: Immigrant Entrepreneurs
• Inc.com – Inc.500: The Immigration Debate
• Business Journal: Immigrant Entrepreneurs Reaching Higher
• Inc.com: Immigrant Entrepreneurs Outpace Native-Born Americans
The Negative Position:
• VDare.com: Less Benefit Than They’re Cracked Up to Be
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9e [Link]
Stronger Business Through Honest Communication
Employers often expect honesty from their staff, but usually don’t provide the environment in which employees feel like they can be honest. It is more likely that an employee will simply tell you what they think you want to hear.
Unfortunately, this attitude does not provide a stable work environment and can often harm your business in the long run. You can’t be everywhere at once, so you depend on your employees to tell you when something is wrong. If they do not feel comfortable being completely honest with you, then there is a lot of information you could be missing.
One of the key elements to maintaining a successful and growing business is to create an honest workplace environment by implementing the following as a part of your business structure:
Define
Provide your employees with your definitions and expectations of honest communication in the workplace, such as:
• Always state the facts, without attempting to interpret “why.”
• Take a deep breath and don’t let emotions cloud your judgment.
• Don’t point fingers or place blame.
• Talk to the person you have a grievance with about the situation.
• Ask open-ended questions to stimulate productive conversation.
• Work together to determine possible solutions.
Clarify
• Make the vision and goals of the business clear. Have monthly staff meetings to set those goals and determine the strengths and weaknesses of the business over the last month. Encourage your employees to participate in determining what those strengths and weaknesses are.
• Clarify your expectations for your employees, providing a structured environment that they can depend on to be consistent and reliable.
Encourage and Motivate
• Tell your employees that you value them. When someone does a great job, let them know that you appreciate their hard work. Don’t assume that they realize it on their own.
• Show your employees that you value them. Compensate them for a job well done by providing a deserving salary. Also consider performance bonuses and annual or semi-annual raises when they have showed themselves loyal and productive.
• Provide a comfortable working environment by developing relationships with your employees. Don’t treat them like your subordinates, make them feel as though they are part of the team.
• Ask for both positive and negative feedback. Let them know that their thoughts matter to you.
Set an Example
• Be reliable. Consider your employees’ best interests and provide a structured and consistent environment.
• Be attentive. When your employees come to you and have something to say, give them your full attention (schedule a meeting if you have to) and hear them out. Don’t make any decisions before hearing everything they have to say.
• Be authentic. Practice what your preach. If you expect honest communication from your employees, then you have to provide the same to them on a regular and consistent basis.
• Be inspiring. Convey your passion and dreams for the business. Let them see that you enjoy your work. Show them that every aspect of your business is important to you, especially your staff.
Providing an environment in which your employees feel as though they can be honest with you will allow your business to develop a solid foundation. If the atmosphere behind the doors of your business is not positive, then it will be hard to develop that atmosphere outside them. Honest communication within plays a vital role in building a business that will obtain its goals and succeed.
Sources/Related Readings:
• Smart Business Network: Solid Leadership
• Entrepreneur.com: The Truth?
• NewsWise.com: Honesty in the Workplace Sorely Lacking
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b5 [Link]
Preventing Employee Theft
Employee theft is more prominent than most business owners realize. The average business loses approximately 6% of revenue to fraud each year, and typically employees are to blame. Nearly one-third of business bankruptcies are due to employee fraud. Chances are at least one of your employees is stealing from you right now.
The first step to preventing employee theft is to know the common avenues, keeping in mind that it is not limited to just these forms.
• Forging Receipts – charging extra and pocketing the difference.
• Pocketing Loose Change – Employee assumes that a dollar here or there won’t be missed from the petty cash box.
• Stealing Supplies – taking a pen or paper clips on a regular basis because they don’t believe it will negatively affect the business.
• Stealing Equipment – taking equipment to a job site and then taking it home, often claiming it was misplaced or stolen.
• Reimbursement Fraud – claiming they provided items to the company, but never actually doing so. This also includes embellishing on expenses they incur while working, such as mileage.
There are a number of preventative measures you can take in order to sway your employees’ temptation to steal from the company.
Implement Easier Systems
Confusing and complicated accounting or bookkeeping systems, often those done by hand, make it easier for employees to cover their tracks when committing fraud. Small businesses are at greater risk because they typically rely on only one person to handle the accounting responsibilities since the system is so complex.
Avoid this temptation by implementing a simpler accounting system, such as accounting software. Also, consider cross-train people in your company on that system, including yourself, so that there are checks and balances. If more eyes are examining the books, the errors, whether intentional or not, will more easily be found.
Use a “Check-Out” Method
For businesses that have equipment that is used outside the work place, consider requiring you employees check it out. Have them write down the date, their name, the piece of equipment, the job site, etc. When they are through using it, have them check it back in. This will allow for you to hold a particular person responsible for the equipment, should it not be returned to the business.
This system may not work as well unless someone is in charge of it. If possible, you should have them come to you to check equipment out. If your busy schedule does not allow for you to keep track, put one or two people in charge of it that you can count on to be honest.
Eliminate Exit Options
Many businesses that have a night shift see a sharp increase in employee theft during that time. Often it is because the employee has too many unmonitored exiting options. Night shift employees should only have one or two exit locations. Those locations should be equipped with video surveillance or guards to be sure that no one leaves the building with unauthorized company belongings.
Get a History Before Hiring
Before hiring a new employee, obtain both their criminal and credit history. Surprisingly, the credit history is probably the more important of the two. If a potential employee is overwhelmed with debt, then the pressure to steal from your business increases dramatically, often convincing himself that he needs it more than you do.
Implement a Company Theft Policy
This is probably the most effective preventive measure you can take. In the policy, explain the company’s code of ethics. Specify the rules regarding office supplies, company equipment, etc. Be sure to indicate that employees who steal from the company will be prosecuted. Have each current employee, and all new employees upon hire, read and sign the policy to be effective immediately.
Have a Company Meeting
If an employee is discovered stealing from the company, it would be a good idea to call everyone together and let them know what’s going on. Outline how these actions negatively affect the company by providing them with the actual numbers. You’ll be surprised how many employees don’t realize that their unethical actions could destroy your business, and their job.
Implement an Anonymous Reveal Method
Provide a means for loyal employees to anonymously notify you of employee theft within the company. The pressure among co-workers to protect each other is strong, but anonymity will provide an employee with piece of mind on all levels. Employee Theft Anonymous is a great online source for allowing loyal employees to combat the fear of being a tattle-tail.
Don’t allow employee theft to get the best of you by hoping it will just go away without any effort on your part. The longer you let it go unchecked, the bigger the threat to the well-being of your business. And remember, more often then not, it is the veteran employee, who knows your business well enough to find the cracks, that takes advantage of an opportunity. Take action and smother the temptation before it has the chance to surface.
Sources:
• Inc.com: Are Your Staffers Stealing?
• Small Business Association: Common-Sense Measures for Preventing Employee Theft
Related Readings:
•CNN Money: Arresting Employee Theft
• About.com: Employee Theft - The Profit Killer
• Inc.com: Employee Theft Still Costing Business
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Building New Business Contacts: Networking 101
Contacts are an important aspect of any business, but are essential to the survival of a small business. Without contacts you cannot expand your clientele and your business will not grow. Below are some pointers on how to continually expand your list of contacts.
1) Ask your current/ongoing network for new contacts.
Your current network includes:
• Previous employers, associates and co-workers
• Successful friends and family
• Long lost high school and college classmates
• Current clientele
2) Use your daily activities to your advantage.
Your everyday social activities can provide great connections. For example, when going to play golf with a friend, ask him to bring some of his colleagues along. Such activities afford an opportunity to market yourself and your business in a relaxed social environment.
Use this quality time to build trusting relationships. Be yourself and don’t bring up your business unless the conversation leads that direction. You don’t want to come on too strong and irritate a potential client. After all, the purpose of playing golf is to relax and not deal with work issues, despite the fact that everyone is continually thinking about them.
3) Join a professional organization.
Professional organizations provide an outstanding opportunity to network. However, before joining any organization, be sure research the organization and make sure it is the best option for you and your business. Some key questions to ask are:
• Are their membership fees and how often are they due?
• Is there a certain time commitment expected of members?
• Are their conferences (opportunities to meet people natiionwide)?
• How active are the members; will they participate as much as you?
• Is the organization industry focused?
• Are their opportunities for “cross-pollination” with your company?
4) Attend conferences in your industry.
Not only do industry conferences provide an opportunity to expand your network, but they also provide a plethora of information about the latest trends, developments, etc. in your industry. It is a venue with access to both competitors and potential clientele, which opens opportunities for you to better your business as well as expand it.
Key elements to successfully establishing new contacts:
• Commit your sales script to memory. Don’t recite the entire script with each introduction, but know it so that you can communicate the key elements to others throughout your conversation.
• Ask conference attendees you already know for introductions.
• Follow-up with the people you met by sending a letter within a week, requesting an official meeting.
5) Help others establish their network.
What goes around comes around. If you help others find potential clientele, they will likely help you as their own network expands.
Regardless of whether you use one or all of these recommendations, always remember that networking takes time. You may not see the fruits of your labor for months, and sometimes even years. But, make a positive impact, and most people are sure to think of you when they need the services you provide.
Today’s Source:
• BusinessWeek.com: Ties That Bind and Build a Business
Related Readings:
• Inc.com: Become a Master Networker
• The Boston Globe: Networking Tips
• Small Business Association: Networking
• Entrepreneur.com: Networking - Simply Your Company’s Story
Bookmark to:
95 [Link]
Debt Collection Strategies that Work (2 of 2)
PART 2 OF 2 - WHEN CLIENTS STILL WON’T PAY
We covered strategies to avoid “deadbeat” clients in part one, but inevitably someone is going to slip past your tactics and still be noncompliant with payment. What then?
It is best to take action when 30 days have passed with no payment or contact from a client. First, enclose a personal letter with their next invoice. Restate the written agreement regarding payments (consider enclosing a copy) and that they are in violation of that agreement.
If a client cannot afford the entire balance due, they may get overwhelmed and simply ignore the bill, hoping it will disappear on its own. Where the logic is in this, I’m not sure, but it is reality. Consider offering to make monthly payment arrangements with the client in your letter, especially if the balance due is rather large.
It is important, however, that you suggest the monthly payment amount, which should be approximately ten to twenty percent of the outstanding balance, and specify their first due date. Provide the client with the option to contact you if the suggested amount will not work on their budget. If they do so, be sure to negotiate an amount that is not too hard on them, but will serve to get the whole balance paid in a timely manner.
Once you have made payment arrangements with a client, continue charging interest on the outstanding balance for the first couple of months. If the client makes her payments consistently during that time period, consider waiving all future finance charges so that her bill will diminish more quickly. This will also give the client an incentive to continue making payments.
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Before venturing any further, this is a disclaimer that I am not an attorney, however, I have three years experience working for collections attorneys and I am very familiar with collection law. From this point on you must tread lightly when attempting to collect a debt from a client. I recommend that you examine the Fair Debt Collection Practices Act (FDCPA), which is Federal law regarding what is required of any debt collector, even if you are not a collection agency or attorney.
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Many articles I’ve read on the topic of collections, including those listed below, recommend that you write and call the client a number of times and be persistent, increasing your directness and determination gradually. However, I DO NOT recommend writing and/or calling the client more than once. There are precise laws in place that protect a debtor from what can be deemed “harassing” contact. If you contact your client more than twice about an unpaid balance, you risk being sued for harassment, and no bill is worth that.
Give the client until the next statement cycle to respond to your letter. If they have not, call them, but only once. Even if you get a voicemail, I recommend that you leave a message but do not attempt to contact them by telephone again. If you get no response, then you must first determine whether the balance due is worth pursuing further. This is the point where you may begin to incur expenses to collect the debt owed.
If you decide that the unpaid balance is worth pursuing, you have a few options to proceed with:
1) Turn it over to a collection agency.
Keep in mind that collection agencies will keep 10-50% of anything collected on your behalf. Their primary means of collecting a debt are letters and telephone calls. Personally, I do not think a collection agency is your best option. More or less, they do what you could do on your own, except that they will report the debt to the credit bureau and are willing to risk a more threatening tone with the debtor if necessary.
2) Take the debtor to Small Claims Court.
Providing that the balance owed to you is within the limitations set by the court (you will need to check with your local clerk), small claims court will cost less than $100 to pursue and you can represent yourself. This saves the added expense of hiring an attorney. You will need to have a paper trail to validate the debt before the judge. Your strongest piece of evidence is the agreement you and the client initially signed. However, it is also helpful to have photographs or examples of the services you provided, copies of invoices, and notes from telephone conversations, etc.
Before you can pursue a case in Small Claims Court, you will have to send the client a demand letter. This is a requirement under the FDCPA and is different from the letter suggesting payment arrangements you may have sent to the client earlier. There are specific legal requirements for a demand letter. Please refer to Section 809 of the FDCPA, which lists those requirements in detail.
Typically, if you provide the necessary information to prove that the client owes you money, the Small Claims Court will find on your behalf and there will be a judgment entered against the client. However, it is still up to you to collect the debt. This can be time consuming and difficult, as your options for doing so are limited.
3) Hire a Collections Attorney.
It is important that you know upfront that a collections attorney will either take a percentage of what they collect (usually around 25%) or will charge you an hourly rate. However, unlike with a collections agency, some of your attorney fees can be offset, if you took the correct steps in your initial agreement with the client.
If your agreement stipulates that the client would be responsible for attorney fees should a lawsuit be necessary, then you will be able to collect reasonable attorney fees (usually 15% of the debt) as a part of your judgment. This an advantage to hiring an attorney yourself. Collection agencies will not pursue a judgment without hiring an attorney, and, if they do so, your fees would not be reimbursed.
Collections attorneys file a Petition in the Associate Circuit Court of the county where the debtor resides. The debtor is then served with a summons to appear in court. If they do not appear, the a judgment is entered against them automatically. If they do appear and admit to owing the debt, a judgment is still entered. Only if the debtor disputes the debt in court will the case go to trial, and it has been my experience that only 10-20% of the cases do so. Even if the case goes to trial, it is likely that you will still get a judgment against the debtor, especially if you have a contract and a paper trial to prove your case.
It is also much easier for an attorney to collect the debt once a judgment is entered. They have the means to file a garnishment on the debtor’s wages, bank account, even business. They can also file a lien against real estate the debtor owns or confiscate personal property, such as a vehicle, as payment for the debt. These options are not readily available to you if you have a judgment through small claims court.
An attorney will do everything legally possible to collect every last penny of what is owed to you, and then some, such as attorney fees and interest. They will do all the work, including the demand letter, and you will be free to continue business without the added burden of trying to collect an unpaid debt. It has been my experience that an attourney can provide the best results in the shortest amount of time.
Always consult with an attorney before pursuing any debt collection strategy. The opinions in this article are not to be taken as official guidance but rather as an informational supplement to your overall debt collection strategy.
PART 1: Avoiding Deadbeat Customers
Sources/Related Readings:
• SeniorMag.com: Bill Collections
• About.com: Collection Letter Secrets
• FindArticles.com: Collecting Payments Due
• BusinessKnowHow.com: Small Business Collection Strategies
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Debt Collection Strategies that Work (1 of 2)
Part 1 of 2 – AVOIDING THE “DEADBEATS”
It’s inevitable that any business owner, big or small, is going to encounter clients that are just not willing to pay. This is especially prominent in the service industry, as services are an ongoing process and not a one-time product purchase.
It is no surprise that many small businesses do not survive the first two years, and the inabilities to collect from nonpaying clients are likely a large contributor business failure.
The first realization a small business owner must come to is, no matter how nice a client is or how much business they bring you, if they do not pay then they are not a good customer. It is never a good idea to continue doing business with a client who ignores an unpaid invoice.
Despite what you may think, a non-paying client is typically doing so on purpose, not because it slipped their mind. Yes, there may be strenuous circumstances in some instances that provide an exception to the rule, but until your client notifies you of such, and his reasons are legitimate, you can assume that he is avoiding payment.
When you first start your business, there are certain strategies you can implement that will help you to avoid the burden of non-paying clients.
Establish Payment Guidelines
Let clients know from the start what your guidelines are. Explain on your brochure, website, order form, etc. the available payment options for the services you provide. Once you’ve established these guidelines, it is imperative that you stick with them. If a client senses that you are lax in collecting the payment as set out, they may take advantage of it.
Consider Upfront Payment
When providing a service, business owners have a tendency to do the work first and bill later, which can result in collection problems. Your safest bet is to require full or partial payment upfront. If your business provides a short-term service, such as carpet cleaning, payment in full upfront is not too much to ask of your customer. If your business provides a long-term service, such as computer programming, then it is more than reasonable to obtain partial payment upfront.
In fact, you might consider requiring one-third of the payment upfront, another third at the halfway point of the project, and the remaining third within two weeks of completion. If you adopt this rule, or something similar, be determined to not continue or finish the project until the payment due is received. Inform the client of this payment plan in the beginning and, chances are, they will be sure to pay on time because they want the finished product.
Develop an Accounts Receivable Department
Some small business owners are tempted to allow the sales department to also deal with accounts receivable. If your business has the ability to hire the employees, establish a separate accounts receivable department or put someone in charge of collecting payments. This will insure that someone is always aware of what clients have paid and what clients are behind.
Put it in Writing
Make this your policy with every new client. Legitimate clients understand that you need the terms of your business relationship in writing in order to protect your business. Be sure your agreement covers what product/service you will provide, when you will provide it and how much and when the client is to pay, including any interest/finance charges applied to late payments. If a potential client refuses to sign the contract, then they likely won’t pay you and are not worth your time.
It is also important to state in the contract that, should the client not make payments as agreed, you reserve the right to pursue action through the court. Also state that, should court action be necessary, the client would be responsible for paying court costs and your attorney fees. Let the client know that this is simply a precaution and you have no reason to believe that court action will be necessary. However, if the unfortunate occurs and you have to pursue a lawsuit to collect what is owed to you, you cannot collect attorney fees to offset your expenses if it is not stated in your original agreement.
Have Clear and Concise Invoices
Your invoices will need to be systematic and dependable. Again, if you are lax in sending invoices consistently, then the client will get the impression that payment is not a high priority. Be sure that your invoices are numbered, that the billing terms and due date are visible and clear, and that they are sent to the correct person. I highly recommend using invoice software, such as Tabs3 or Billing Tracker. Google search “invoicing software” and find the program that best fits your needs.
Provide Incentives for Prompt Payment
Give your clients a reason to pay their invoices as soon as they receive them, whether positive or negative. Some options are:
• Take credit card payments. Often this will give the client the ability to pay their entire invoice at once. Keep in mind, however, that, with each credit card transaction you accept, a percentage of that sale goes to the credit card company. Make sure it is an expense your business can handle.
• Give a discount for payments made promptly. Consider offering, say, a ten percent discount if the client pays their invoice within 15 days.
• Charge interest on overdue accounts. Consider charging your client interest on the unpaid balance if payment is not made within 30 days of invoice. A common interest rate is 18 percent per year, which equates to 1 ½ percent per month. Most invoicing software will calculate interest on an unpaid balance automatically.
What if they still won’t pay?
Working as a legal assistant to collection attorneys for three years, I have some helpful advice to share. Part two of Debt Collection Strategies that Work covers what steps you should take when a “deadbeat” client slips past your guard dog tactics.
Always consult with an attorney before pursuing any debt collection strategy. The opinions in this article are not to be taken as official guidance but rather as an informational supplement to your overall debt collection strategy.
PART 2: When Clients Still Won’t Pay
Sources/Related Readings:
• SeniorMag.com: Bill Collections
• About.com: Collection Letter Secrets
• FindArticles.com: Collecting Payments Due
• BusinessKnowHow.com: Small Business Collection Strategies
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Starting Your Own Business, Part 4 of 4
FINALIZING YOUR PRODUCT AND YOUR BUSINESS ACTION PLAN
FINALIZE YOUR PRODUCT
There are a number of items that need to be considered in the development and finalization of your product or service. The first thing to remember is that “finalizing” does not mean eternal. Your product should always grow and develop as the need presents itself.
Use Focus Groups
A focus group is simply a group of potential consumers that test your product and give you honest feedback. Your personal passion for your product can cloud your judgment and leave you “selling only to yourself.” A focus group will help provide fresh ideas on how to better your product and meet the needs and desires of the consumer.
It is important to keep an open-mind and not become defensive; remembering that the feedback you receive will generally be the same from any consumer. Write down every comment and rely on those that are most useful to perfect your product. It is also recommended that you use a focus group any time you make significant changes to your product.
Determine the Price of Your Product
The price of your product must entice the buyer, as well as cover overhead costs, production and distribution of the product, labor, marketing - everything it takes to run your business. The price needs to do more than make your business come out even. A successfully priced product should result in profit!
To determine a viable price for your product or service:
1) Define your financial goals.
Examine the income which is required to provide for you and your family, outside of supplying the business (living expenses, etc.). It is often best to observe your monthly spending trends, because the profits of your company will likely fluctuate on a monthly basis.
This will help you to determine the minimum profit you need to sustain your business and an acceptable income. Also, examine your long-term financial goals, such as savings. You want to determine how you can you realistically adjust the price of your product to provide for your financial needs and desires.
2) Research current market trends.
Supply and demand will always effect how well your product sells. If it is priced too high when the demand is low, it will not sell. If it is priced too low when the demand is high, you take the risk of not breaking even. It is important to determine a “safety range” for the price of your product based upon recent market trends.
3) Compare to the Competition.
Shop around via the internet and local stores or service providers and compare the prices of your competitors. Get in the head of the consumer and determine what price you would be willing to pay based upon the competition.
Your price will need to be competitive with other businesses producing the same product or service in order for it to sell. Your product should only be substantially more expensive if it has significant features that the competition does not offer.
4) Assess Business Expenses.
You need to determine how much it will cost to run your business and how much it will cost to product each product. Obtain price quotes from manufacturers. Determine how much your supplies will cost. If you have employees, how much will you pay them? What are the costs of marketing and distributing your product?
All of these are a part of what it takes to run a successful business and the price of your product should reflect that. Start with estimated costs in the beginning and use real costs as your business grows.
Determining the right price for your product or service is a system of trial and error. If your product is not selling, the price should be the first aspect of your product that you re-exam, simply because it is the easiest aspect to adjust.
Develop a Marketing Strategy
Your product will do nothing for you without a marketing strategy. It is imperative that you reveal your product to the public in a honest and attention-grabbing manner.
In order to target the correct audience for your products, you must:
• Define your customers.
• Research and discover the best medium (i.e. television, radio, billboard, magazine, etc.) with which you can reach your customers.
• Brainstorm ideas for your advertisements, enlisting help from others including focus groups, and asking them what would catch their attention.
• Implement your favorite idea, because, if you like it best, you will follow through with it.
• Finally, test the marketing strategy. If it doesn’t work, try a different one and try, try again.
FINALIZE YOUR BUSINESS ACTION PLAN
you will find that your business action plan has developed as you go through the startup process that we have covered the past few days. Your business plan is not only for today, but helps to coordinate the future of your business. I refer to it as a business “action” plan because, once you reach this point and have established the following items, you are ready to take action and become a successful entrepreneur:
Revamp and Redefine.
Make the final revisions to your sales script and clearly define your business.
Develop Process Sheets
Process sheets will eventually serve as your “operations manual.” Basically, process sheets detail the what, how, who and when for each aspect of your functioning business.
What: Determine each process of your business, such as order placement, packaging, etc.
How: List the steps to complete each process in a satisfactory manner.
Who: Determine who will be responsible for each process.
When: Decide on the appropriate amount of time for each process to be completed.
Operation and Administration
You will also need to determine all of the “departments” that will keep your business running smoothly, such as accounts payable, accounts receivable, legal department, sales, marketing, etc. For each department, provide an explanation of its function, list the information you have collected during your business research regarding that department, determine what results you want from that department, and what is necessary to obtain those results.
I highly recommend that you visit the link to the Small Business Association’s website below. It has an outlined example of a business plan that should be very helpful. Always remember that your business plan, any many other aspects of your business that we have addressed this week, will continually change and develop as your business does.
Reevaluate and revise your business plan as often as necessary to provide a stable and sufficient structure for your business.
DISCUSSION
I have taken you through the basic principles for starting a successful business, so now I want to hear from you. Have I covered aspects of starting a business that you have tried? What were your results? How have sales scripts and focus groups (or anything else I covered) helped your business develop? If you are just starting, what about the topics I covered most interests you? Did I leave something out that you found crucial to starting your business?
Please feel free to share your thoughts.
Part 1: Focus and Brand Impact
Part 2: Research and Protecting Your Idea
Part 3: Developing Sales Scripts and Addressing Obsticles
This week’s source:
• Entrepreneur.com: Starting a Business
Today’s Related Sites/Readings:
• MarketingPrinciples.com: Small Business Market Strategy
• Bizhelp24.com: Unique Selling Points of Your Product
• SiteSell.com: Pricing Your Product
• Business Toolkit: Marketing Your Product
• Small Business Administration: Writing a Business Plan
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Starting Your Own Business, Part 3 of 4
DEVELOPING A SALES SCRIPT AND ADDRESSING OBSTACLES
Developing a Sales Script
The purpose of a sales script is to generate belief in you and your product. It should inspire others to support you in your path to success rather than question your abilities. Your sales script will quickly become the cornerstone for marketing your business.
A sales script should be no more than one page in length and should address the following:
1. The name of your business and your instant impact message (refer to part two for information on developing an instant impact message).
2. Your top three products or services and a brief description of each.
3. Show that your product/service works by providing at least two testimonials from clients.
4. A brief biography, including your previous experience, why you created the business and your anticipated goal.
5. Contact information, which should include address, facsimile, e-mail, website, etc.
Have your sales script handy at all times, and use it to start conversations about your business at networking events or marketing functions.
A sales script is very important when dealing with others on a corporate level. But what about possible customers that you come across throughout your daily routine? In this situation, a sales script can be somewhat overpowering. I highly recommend that you use business cards to draw a potential customer’s attention on an individual level.
Your business card should contain all available contact information and your instant impact message. The design of your business card is also crucial to the impact it makes in determining whether or not a potential customer is willing to contact you for service. Read more about how to design a high-impact business card.
Addressing Obstacles
While trudging through the startup process, you will inevitably come across obstacles that may threaten your business and rattle your confidence. Don’t dismiss these treats, no matter how small and insignificant they seem, because doing so can have disastrous results. Rather, create a plan to overcome them.
• Make a list of everything you have accomplished thus far to regenerate your confidence.
• Write down the obstacles that lie in front of you and indicate whether they are avoidable or unavoidable.
• Indicate what evasive action you intend to make toward the avoidable obstacles.
• Write out a plan for how to turn the unavoidable obstacles into an opportunity for your business, and you individually, to grow and develop. You may consider consulting with a trusted successful entrepreneur to get their input on how they might manage those situations.
• Determine your “Rules to Live By.” Make a list of opportunities you will not pass up and action you vow to always take when obstacles come your way in the future.
Always remember that a threat is only as damaging as you allow it to be. If you vow to meet all challenges head on, with a positive and determined attitude, you will find a way to pull through with a stronger business in tow.
Part 1: Focus and Brand Impact
Part 2: Research and Protecting Your Idea
Part 4: Finalizing Your Product and Your Business Action Plan
This week’s source:
• Entrepreneur.com: Starting a Business
Today’s Related Sites/Readings:
• SuccessConsciousness.com: The Power of Positive Thinking
• BusinessWeek.com The Real Stats of Business Failure
• University of Tennessee: Planning Against a Business Failure
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Starting Your Own Business, Part 2 of 4
PART 2 - RESEARCH THE INDUSTRY AND PROTECT YOUR IDEA
Research the Industry
Now that you have established the product and/or service that you business will provide, you need to learn as much as possible about the industry that is already out there.
As stated in Part One, it is likely that you are not the first person to come up with a business like yours. However, researching what is already out there will help you to develop a business that addresses needs and desires that the competition lacks.
Research the product/service:
• Find out how many options are already out there and what their similarities and differences, pros and cons are.
• Find reviews from consumers that have used the product or service, both positive and negative. A great source for this is Consumer Report, which uses a number of similar products and rates their preformance. I also recommend Epinions.com, where actual consumers review products they have used.
• Use your research to determine how you can make your product or service better. What can set you apart from the competition?
Talk to others who have succeeded:
• It is best, of course, to talk to others in the same industry, but not necessary. Any success story will do.
• Ask them about the strengths and weaknesses of their business.
• Find out what obstacles they have faced and what they have done to overcome them.
• If it is an option, go to someone you can trust to be honest with you. Someone that sees you as a potential consumer may tend to focus on the positive and stray from the negative. In order to be a success yourself, you need to be aware of both.
Research recent articles written about your industry:
• These will usually be unbiased and will weigh all the facts, pointing out both the positive and the negative.
• Discover information crucial to the development of your new business, such as recent trends, best strategies, new resources, marketing ideas, etc.
Keep a notebook:
• Throughout your research, always have a notebook on hand. Right down EVERY idea, regardless of whether you think you will use it. Often an “iffy” idea, when revisited, will spark a brilliant one.
• It is recommended that you revisit your idea list weekly.
Protect Your Idea
Legally, you don’t necessarily have to register your business name, logo or slogan in order for them to be protected by copyright and trademark laws. Typically, protective laws are based upon whoever used it first, but you will likely have to go to court to gain that protection.
Therefore, the best protection is to always keep a dated paper trail of everything you do, such as a daily planner. Take notes at all meetings, including those in attendance and each item discussed and decision made. If you ever need to go to court over an issue, your paper trail can serve as primary evidence in your defense.
If you do decide to register your business, it is recommended that you consult with an attorney. Most attorneys will not charge for an initial consultation, and will provide some basic information regarding your rights and how to protect yourself. You can also get some information from your local SBA office or chamber of commerce.
It is not necessary to have an attorney register your business. Usually you can do so yourself. However, if you intend on having Articles of Organization, By-laws, etc. associated with your business, it is highly recommended that you hire an attorney to prepare these documents as this is the best way to insure every detail is thoroughly and accurately addressed.
Be sure to bookmark this page and check back tomorrow for part 3 of our 4 part series: Developing a Sales Script and Addressing Obtacles
Part 1: Focus and Brand Impact.
Part 3: Developing Sales Scripts and Addressing Obsticles.
Part 4: Finalizing Your Product and Your Business Action Plan
This week’s source:
• Entrepreneur.com: Starting a Business
Today’s Related Sites/Readings:
• Consumer Reports: Product Research
• Epinions.com: Consumer Reviews of Products
• Small Business Association: Small Business Law Library
• Small Business Association: Protecting Your Ideas
• Bizhelp24.com: Patents for Manufacturing Business
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Starting Your Own Business, Part 1 of 4
It’s time. You have decided that you are finally going to live the dream of starting your own business. Everything is falling into place and doors are open all around you. The question is, where do you begin?
Starting your own business is an impacting decision. Every step must be thoroughly thought out and calculated. Diving in without a plan for success and a process to get there will inevitably break you.
Therefore, this week we are starting from scratch. The next four days will cover the basic steps for becoming an entrepreneur and starting on the right track.
PART 1 - FOCUS AND IMPACT
Find Your Focus
The most important initiative to starting a business is to find your focus. Write it down, and keep it accessible. You might even consider keeping this information in plain sight so that you see it daily, for example, posted next to your computer.
Knowing your focus in your mind is one thing, but having it in front of you in black and white provides a clarity and permanence that can be very encouraging in times of doubt. Be as descriptive and thorough as possible, leaving no stone unturned.
When writing down your focus, be sure to address the following:
What is your goal on a personal level?
• What do you want out of this business?
What is your goal on a familial level?
• What sort of income are you looking to generate for your family?
What is your goal for others?
• What need do you plan to address with your product/service?
• Who will be your primary market?
It’s important to remember that, most likely, someone else has started a business quite similar to yours. You may also face self-doubt based on the questionable reactions of others when you mention your venture to become your own boss. Always remember that no one else has your goals or your intent.
When in doubt, revisit the focus that you mapped out to remind yourself of your determination and desire. Also, share it with those that may question the viable success of your business. You will likely impress upon them a stronger confidence in your ability to succeed.
Instant Impact Message
The first question that comes to the consumers mind when he sees a new product or service is “How will I benefit from this?” Step two in developing a successful new business is to develop an “instant impact message” that will help the consumer to immediately answer this question. This is a single statement that is highly powerful and reveals the core value of your business. Put simply, it is your slogan.
To develop your instant impact message, revisit the third item on your focus list - your goal for others. Pull out the main descriptive words that you feel truly portray the core of your business. As cheesy as it may sound, your instant impact message should reflect your heart. It is what your business stands for and should become such a crucial part of your business that, should you withdraw it, your business would not be the same.
Part 2: Research and Protecting Your Idea.
Part 3: Developing Sales Scripts and Addressing Obsticles.
Part 4: Finalizing Your Product and Your Business Action Plan
This week’s source:
• Entrepreneur.com - Starting a Business
Today’s Related Readings:
• Entrepreneur.com : Planning Your Business Plan
• SBA.gov: Business Plan Basics
• ICBS.com: Creating a Catchy Slogan
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Insurance for Small Businesses
Insurance isn’t typically top priority for a small business owner. Since accidents can and do happen it’s better to be prepared than sorry.
Here is a list of different insurance options that a small business owner may need:
• Health insurance is one of the most important insurance options of all, covering your general health and well-being.
• Disability insurance will guarantee income should you suddenly become unable to work because of injury or illness.
• Life insurance will help ensure that your family has the money it needs should you meet with an untimely death.
• Business property insurance helps protect you against loss of inventory or equipment in a flood, fire, or other disaster.
• Comprehensive general liability insurance protects you if someone is injured while on your property.
• Business interruption insurance will help your business recover from natural disasters by paying for operating expenses during downtime.
• Workers’ compensation insurance covers any medical expenses arising from injuries employees sustain while working for you.
Related Resources:
• About.com - Small Business Insurance
• Insure.com - Small Business Liability Tool
• MyOwnBusiness.org - Insurance For Small Business
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4 Ways to Keep Up on Industry Trends
In order to keep your business in top form it is imperative to be aware of emerging trends within your competitive marketplace. Peronsally, I try to stay ahead of the curve so that I am prepared when change happens.
Sometimes curveballs are thrown but if you do your homework you’ll find that you can win the guessing game.
Here are 4 tips to help you keep up on industry trends:
1) Set specific investigative times.
Set a time for yourself in order to research your sector for new trends. Industry is constantly evolving with every day that passes, are you aware of the leading edge?
2) Make trend spotting part of your daily routine.
Get into the habit of researching every day at the time you chose. Each time you research you are bettering not only your company but also yourself. Stay disciplined, stay on track and you will succeed.
3) Persistently investigate competitors.
Disect their offerings and compare it to yours. Do they have an advantage that you can meet or beat? If so, a change in plan might be needed. If you’re already ahead of the competition, maintain what you’ve got and think of ways to expand on your advantage.
4) Utilize the power of the Internet.
Use Google Alerts to notify you by email when a story featuring your industry is published. Keep track of the authors and other related stories they may cover. There are other powerful ways to use Google Alerts, but I have to keep those a secret.
Turn your research into an asset by applying what you learn to improve your business and create new products and services. This learning process will help you use your time effectively and take action with conviction.
Related Resources
• PCWorld.com - Tech/Industry Trends
• RileyGuide.com - Employment & Industry Trends
• ComputerWorld.com - Sleuthing Out Industry Trends
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IRS Offers Business Tax-Tips CD
April 15th is still more than six months away but the IRS is helping entrepreneurs prepare early by releasing its 2006 Small Business Resource Guide CD-ROM last week.
The free, interactive CD provides critical tax information for small businesses, including forms, instructions and publications. The CD provides valuable business information from a variety of government agencies, non-profit organizations and educational institutions.
The CD contains essential start-up information needed by new small businesses. The design of the CD incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.
Small businesses can order up to five copies for free at the IRS Web site. To get your copy of the CD, call (800) 829-3676 or visit www.irs.gov/businesses/small/page/0,,id=7128,00.html
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How to Sell Your Services Better
Regardless of the type of service you sell, a potential client will have a certain degree of risk worry when buying. They don’t really know what will be getting until they see the final outcome (or have really good references!).
Remember that service clients are buying a promise that you will do something for them to their satisfaction.
But there’s a problem with this… services are intangible–you can’t see them, touch them, take them out of the box or demonstrate them. Yet this is exactly what you need to do to make them easier for your customers to buy them.
How do you accomplish this?
• Turn your service into a product.
Create tip sheets, templates, worksheets and supporting educational pieces that share your expertise at a fraction of the cost of having you consult directly. Websites are great for this.
• Package your different service levels.
Do your services vary based on custom needs? If so, package the most popular services together for maximum price efficiency. Think of cable and satellight companies and how they package channel options.
• Combine your services and create a new offering.
Start by listening to what your customers are asking for and paying closer attention to their buying patterns. Find the niche that needs to be filled and fill it using what you already have set up. No need to reinvent the wheel!
• Package your process.
When it seems impossible to package what you deliver, differentiate your company and increase your perceived value by packaging how you deliver. This approach shows prospective customers you follow a logical approach and that you’re established, professional and capable.
Related Resources:
• NewFangled.com - Book Report: Selling the Invisible
• Entrepreneur.com - The Basics of Selling Services
• Entrepreneur.com - Selling Services
Bookmark to:
a0 [Link]
IRS Offers Business Tax-Tips CD
April 15th is still more than six months away but the IRS is helping entrepreneurs prepare early by releasing its 2006 Small Business Resource Guide CD-ROM last week.
The free, interactive CD provides critical tax information for small businesses, including forms, instructions and publications. The CD provides valuable business information from a variety of government agencies, non-profit organizations and educational institutions.
The CD contains essential start-up information needed by new small businesses. The design of the CD incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.
Small businesses can order up to five copies for free at the IRS Web site. To get your copy of the CD, call (800) 829-3676 or visit www.irs.gov/businesses/small/page/0,,id=7128,00.html
Bookmark to:
[Link]
Elements of a Successful Business
Yesterday I covered the elements of a winning brand. Today I’ll take a look at what ingredients go into creating and maintaining a successful business.
Despite the bad news we so often hear about the number of small businesses closing or moving, a good percentage of small companies have learned what it takes to survive the early startup years.
• Company Culture
• Customer Service
• Attitude
• Business Strategy
• Discipline
• Risk
• Financial Roadmaps
• Business Processes
• Information Technology
• Marketing
• Sales
• Training
• Team of Advisors
• Work/Life Balance
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a8 [Link]
Elements of a Winning Brand
What people hear your company name, what words are associated with it? Some buzz words commonly associated with a brand are fast, reliable, friendly, discount, low prices, available, service, top rated and many many more.
Getting people to associate buzz words with your brand is what creating a winning brand is all about.
1) A winning brand is differentiated.
What separates your product or service from its competitors?
2) A winning brand promises value.
What does your brand bring to the table?
3) A winning brand acts like a leader.
Focus on improving customer experiences with your company.
4) A winning brand is consistent.
Your brand must be uniform across all marketing channels.
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Top Entrepreneurial Schools
You may think street smarts are enough to be a successful entrepreneur, but these top entrepreneurship programs are giving students the practical and theoretical knowledge they need to succeed in any venture.
Entrepreneur.com presents their top 10 undergraduate and graduate programs for entrepreneurship:
Top 10 Undergraduate Programs:
1. University of Arizona
2. Syracuse University
3. DePaul University
4. Temple University
5. University of Dayton
6. Drexel University
7. Fairleigh Dickinson University
8. University of North Dakota
9. University of Illinois, Chicago
10. Babson University
Top 10 Graduate Programs:
1. Syracuse University
2. DePaul University
3. Northwestern University
4. California State University, San Bernardino
5. University of Washington
6. University of Arizona
7. Temple University
8. Monterey Institute of International Studies
9. Indiana University, Bloomington
10. University of Louisville
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Inspire Your Employees
Some of the most wealthy people I know got there by having superior people management skills. Every employee that works for you is a potential brainstormer, the one person who may think of the great idea that makes millions.
How can you inspire your employees to innovate?
1) Business owners must set personal egos aside
An employee may keep a great idea to himself if she/he doesn’t like you!
2) Create open brainstorming sessions for employees
Allowing them to give their own input makes them feel as if they truly are a part of the system.
3) Recognize the unique gifts your employees possess
Once you find someone with a unique gift or talent, nurture that talent and capitalize when the time is right.
4) Set parameters
Specify what you’re looking for, and guide your employees. You’ll be amazed at the new concepts they’ll throw at you.
“The direct benefit [of employee innovation] is competitive advantage, but the secondary benefits are greater employee empowerment and satisfaction.”
Source:
Sparking Bright Ideas
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[Link]
Business Startup Blunders
When starting a new business venture it’s easy to skip over the little things that may come back to haunt you in a big way. The real defininition of entrepreneur should be “a business-minded person who’s willing to constantly solve unforeseen problems.”
Tamara Monosoff of Entrepreneur Magazine offers the following booby traps you may encounter when starting a new business venture:
Trap #1: Universal Product Codes
Trap #2: Product Liability Insurance
Trap #3: Electronic Data Interchange
Trap #4: Chargebacks
Trap #5: Slotting Fees
Trap #6: Timing
Source:
Business Booby Traps
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Starting a Startup
According to a survey by Yahoo! Small Business and Harris Interactive, 66 percent of American adults say they’ve considered starting a business. But many never take the leap.
The key word in “small business” is small… your business can take up as much or as little time as you want it to. The art of the start is really about setting yourself up with a system that provides clear direction and keeps you moving forward no matter what challenges you face.
Here are some tips from Cornelia M. Flannery of Entreprenuer Magazine to help steer you in the right direction:
1. Choose a Business That Fits You.
2. State Your End Goal.
3. Identify the Milestones That Make Up Your End Goal.
4. Choose One Milestone From Your List.
5. Identify the Tasks Required to Achieve Your Milestone.
Source:
Start a Business in 10 Minutes a Day
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[Link]
Reducing Taxable Income w/ Retirement Funds
Taxes stink. Ah, but as citizens of this wonderful country we must pay our dues for services. Most business owners know that the more you make the more you are taxed.
The best way to reduce your taxable income and greatly benefit yourself at the same time is through retirement funds, such as a 401(k) plan. I recently started a Solo 401(k) for myself and can place up to $44,000 a year into it, reducing my taxable income by this amount each year.
Your 401(k) can mean the difference between paying the government or creating a future for you and your family.
How should a 401k be balanced?
Money magazine suggests these allocations:
1) Aggressive–for those with 35 or more years until retirement
50%–large cap stocks
15%–mid cap stocks
15%–bonds
10%–small cap stocks
10%–international stocks
2) Moderate–for those with 20 years until retirement
35%–large cap stocks
35%–bonds
10%–mid cap stocks
10%–small cap stocks
10%–international stocks
3) Conservative–for those within 10 years of retirement
40%–bonds
30%–large cap stocks
10%–mid cap stocks
10%–international stocks
10%–cash
Read more about 401(k) plans:
• Forbes.com - A Way To Max Your Tax Savings
• U.S. Dept. of Labor - 401(k) Plans For Small Businesses
• About.com - Maximizing Your 401k Plan
• SmartMoney.com - The Solo 401(k)
Tags: Taxes, retirement funds, 401(k), Solo 401(k), Tax Savings
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IBM’s 500Ghz Cryogenic Chip
IBM and Georgia Tech claimed they have demonstrated the first silicon-based chip that can operate above 500 GHz by cryogenically “freezing” the circuit. By comparison, 500 GHz is more than 250 times faster than today’s cell phones, which typically operate at approximately 2 GHz.
By freezing the circuit to minus 451 degrees Fahrenheit (4.5 Kelvins), scientists can explore the ultimate speed limits of silicon germanium (SiGe) devices, which are said to operate faster at cold temperatures. This type of chip operated at 350Ghz at room temperature, which is still 175 times faster than chips used today.
“This groundbreaking collaborative research by Georgia Tech and IBM redefines the performance limits of silicon-based semiconductors,” Bernie Meyerson, vice president and chief technologist at IBM Systems and Technology Group.
This could obviously have a large impact on large and small business around the world.
I plan to buy some IBM stock soon as they are a major player in the nanotechnology sector, arguably one of the largest technological think-tanks in the world. Their advances will only continue over the next decade.
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Managing Business Cash Flow
Cash flow can be the lifeblood of any company large or small. Unfortunately many small business owners neglect to manage their cash flow properly.
Here are some tips from PowerHomeBiz.com on how to manage home business cash flow:
• Collect Payments Quickly
• Deposit Checks Fast
• Have a Super Tight Accounts Receivable Policy
• Disburse Your Money Slowly
• No Extra Money in Your Bank Account
• Get an Account Analysis Statement
• Inventory is Not Cash
• Don’t Forget Continuity Sales
• Licensing Agreements
Recommended Reading:
• Entreprenuer.com - How to Better Manage Your Cash Flow
• Inc.com - Cash Management Basics
• C.P.A. - Understanding, Planning & Managing Cash Flow
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Personal Savings in Decline
Image Source: St. Louis Federal Reserve
This is a little off the topic of small business but I think it affects each and every one of us.
An interesting discussion is taking place over at Vox Baby about personal savings.
According to the GDP Report, consumer confidence in the economy is up, yet personal savings is down.
In fact, the U.S. Personal Savings Rate has not been positive for the U.S. since March of 2005.
Some argue that this has to do with baby boomers funding higher education for their children.
Others suggest looking at income quintiles. “The topmost quintile is very, very confident that their income will stay high come what may. So why save?”
The personal savings rate does not include capital gains on investments as a method of saving.
William Gale, a tax specialist at the Brookings Institution in Washington, D.C., says the situation isn’t as bad as it seems and it’s a mistake to look at the personal savings rate and think it correlates with wealth accumulation.
“For wealth accumulation you need capital gains. … it is [important] to look at the right measurement. The personal savings rate is good as a national income accounting measure.”
“I wonder how it can be that with the Baby Boomer generation in the high-income and presumably high-saving part of its economic life cycle, we can possibly have negative saving rates for the population as a whole, if we are making decisions with any attention to the amount of consumption … in the future.”
Vox Baby - The End of Personal Saving?
Despite a favorable outlook, there are at least three widely acknowledged areas of near-term concern that could pose risks to the economy going forward: a spike in energy prices, a decline in home prices, and a retrenchment in consumer spending arising from record consumer indebtedness.
The public’s increase in debt in 2005 was far greater than its increase in after-tax income.
FDIC.gov - Scenarios for the Next U.S. Recession
… research suggests that a group that includes approximately 10 percent of U.S. households may be at heightened risk of credit problems …
Not only do many borrowers in this group have pre-existing credit problems, they may also be more vulnerable than other groups to rising interest rates because of their reliance on interest-only and payment-option mortgages.
Gary North - The Next Recession
More Discussion and Information:
The Glittering Eye - Why is the savings rate so low?
Investment U - U.S. Personal Savings Rate
Bankrate.com - Savings in America: Retirement picture not as bad as it looks
Tags: personal savings, Baby Boomer, Recession
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Business Email Etiquette
Angie Mckaig has posted an excellent writeup about the use of email in the small business world. In under a decade, email has become the most popular method of conducting business.
Angie passes along 5 quick and easy email tips for entrepreneurs:
• Looks matter
Formatting your emails in a professional manner will score brownie points with your clients.
• Run a business, not an acquaintanceship
Respond to email requests promptly. I typically respond to emails within 2-3 hours of receipt.
• Emotions have no place in business
Avoid using emotionally based words. Business is business and feelings aren’t of the essence.
• Emoticons were created for a reason
Write clearly and to the point. The reader should immediately pick up on your tone.
• Explanations go a long way
Your clients will be more attentive to buy if you fully explain the answers to their questions.
Recommended Reading:
• Business Email Etiquette: Maintaining a Professional Image
• Business Email Etquette Basics
• Five Email Etiquette Tips for Better Communication
Tags: email, small business, conducting business, email tips, entrepreneurs, Etiquette, Communication
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Investing in Energy
Energy — in a variety of forms — has a continuous and direct effect on our daily lives from top to bottom.
At present, fossil fuels account for 86 percent of world energy consuption. By 2020, global demand for energy is expected to outpace current world production by nearly 40 percent.¹
Here’s my energy portfolio:
IGNAX - Ivy Global Natural Resources Class A
IGNCX - Ivy Global Natural Resources Class C
…and a new fund that I will be investing in today:
WEGAX - Waddell Reed Energy Fund Class A
…and I’m considering buying into this new fund:
GAAEX - Guinness Atkinson Alternative Energy Fund
I predict that industrialized nations will witness an accelerated use of fossil fuels for another 10-20 years. The price of oil and gas will soar and supply will diminish rapidly.
Within 5 years, I see focus moving to renewable energy and alternative energy research, development and infastructure on a large scale basis. This will set up another energy investment opportunity for lucrative returns many years down the road.
Will I stand correct in 2016? Who knows… but my gut feeling is telling me to jump on board as quickly as possible.
¹ EIA; BP Statistical Review of World Energy
5/02/06 UPDATE: The conflict with Iran is getting even nastier. The Iranian government could sabotage oil trade routes at any moment, driving oil supply down and prices through the roof even sooner than expected.
If this happens I see oil spiking to at least $85 a barrel this summer and possibly $100 by winter.
“At some stage, I think Iran will use its oil as a weapon to negotiate with the U.N. and the U.S., which would push up the market — although they are unlikely to stop exports altogether because they need the money.”
–Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo.
Consult with an investment professional before taking part in any investment scheme.
Recommended Resources:
• Forbes.com - Forbes Energy News
• R.E.A. - Global Renewable Energy Investments Top $30 Billion
• Market Participant - A Balanced Energy Portfolio
Tags: Energy, fossil fuels, demand for energy, investing, renewable energy, alternative energy
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Yoga at Your Desk
Owning a small business is typically a stressful endeavor, especially if you are the only one running the show. The daily grind can cause muscles to tense and eventually bones to move out of position.
To relax your mind, body, and spirit … try Yoga. I started a routine at home last week that has really helped to relax my back and shoulder pain as well as helping me sleep better at night.
Most Yoga DVDs are the price of a typical Hollywood movie. My wife purchased “Yoga Zone Intermediate”. A few parts of it are cheesy, but the stretches demonstrated really work.
You can even do Yoga stretches at your desk as a break from work.
Recommended Reading:
• Yoga @ Your Desk
• Nine to Five Yoga
Tags: small business, Yoga, stretches
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[Link]
IBM’s SecureBlue Encryption
IBM Corp. has announced “SecureBlue”, a security architecture that “can be built into a microprocessor chip to provide defense features previously unseen”.
IBM claims “the chip encryption process allows for increased security for both the microprocessor on which it is added, and the entire devices the chips are used in.”
Unfortunately IBM’s encryption engine is not plug-and-play. SecureBlue will need to be woven into a processor’s circuitry during the manufacturing process.
This means that the first offering of SecureBlue will likely will end up only in devices made by companies that hire IBM’s custom engineering unit. That group’s projects include chips for medical and defense systems and video game consoles.
Related Readings:
• IBM Bakes Security Into Processors
• SecureBlue, New Encryption Chip from IBM
• IBM Partners with Missouri State University to boost IT training
Tags: IBM, SecureBlue, encryption, security, microprocessor
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Windows XP on Apple/Intel Computers
Apple Computer Inc., the maker of the Macintosh computer and iPod music devices, on Wednesday rolled out a software patch under its plan to move its computers over to Intel Corp. microprocessors.
Apple said that the new software, called “Boot Camp”, enables Intel-based Macs to install and run Microsoft’s Windows XP operating system software. Boot Camp is available as a download beginning today.
Recommended Reading:
• AppleXnet.com - Apple OS Boot Camp Details
• Technovia - Why Boot Camp Won’t Make Much Difference
• InfoWorld Daily - A first look at how Apple’s Boot Camp works
Tags: Apple Computer, Intel, Boot Camp, Microsoft, Windows XP
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[Link]
Product Stickers and Respect
Jason Fried over at Signal vs. Noise made an excellent point yesterday about respecting products you make and the customers who buy them.
Does this company respect me? Try the sticker test.
For instance, those pesky information stickers that come on just about everything, including INSIDE of a tea-kettle I bought recently.
• Are they easy to remove?
• Do they leave a sticky residue when removed?
Here is this great product I purchased and the manufacturer insists on sticking something on that completely mars the surface.
When these stickers are included, I can discern that the manufacturer probably has not tried to remove one of these stickers from their product themselves. They stick it and forget it.
This tells me that they don’t care about the product, or me.
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[Link]
Holographic Storage Drives
A new and exciting development in data storage has been announced by Inphase Technologies out of Longmont, Colorado.
Inphase has demonstrated the highest data density of any commercial technology by recording 515 gigbits of data per square inch. By comparison, magnetic disks, such as those used in the hard drives, can manage a storage density of about 375 gigabits per square inch.
Holographic drives use a three-dimensional image generated by lasers to store information.
InPhase will deliver the industry’s first holographic drive and media later this year. The first generation drive has a capacity of 300 gigabytes on a single disk with a 20 megabyte per second transfer rate. The first product will be followed by a family ranging from 800Gb to 1.6 terabyte (Tb) capacity.
Quick Facts:
• 50 years lifetime compared to today’s 7 years.
• 70% more storage space.
• 90% cheaper
• Half-Terabit per-square-inch Data Density Achieved
Recommended Reading:
• Engadget.com - New Record set for Fastest Data Transmission
• BBC.co.uk - Holographic Advance Aids Storage
• Inphase Technologies
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a1 [Link]
Dealing With Angry Customers
If you are a seasoned small business owner, you’ve probably encountered the pissed-off customer who either treatens to shut your business down, or who throws a temper tantrum until they get their way.
For new business owners or people thinking of going into business, you should be prepared to deal with this no matter how much confidence you have in your products or services.
Jason Tarasi, expert author with SmallBusinessNewz.com, has posted 5 Simple Tips For Dealing With Nasty Customers
1. Don’t take it personal.
2. Don’t overdo the “customer is always right” concept.
3. Realize it isn’t always your problem.
4. Don’t fall for fear invoking bluffs.
5. Decide whether or not a customer relationship is worth salvaging.
Following these steps will help you keep your sanity when bearish customers come calling.
Recommended Reading:
• Leadership-Tools.com - Dealing With Angry Customers
• Work911.com - The #1 Mistake Made Dealing With Angry Customers
• Gaebler.com - Customer Support: Handling Angry Customers
Tags: small business, customer relationship, Customer Support
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Entrepreneurial Style
BusinessSeek.biz has published an article titled “Compensating for Your Entrepreneurial Style“.
The author, Glenn Beach, offers a list of important characteristics every entrepreneur must possess to succeed.
1) Ability to see the big picture and plan accordingly;
2) Self-discipline;
3) Ability to use time wisely;
4) At minimum, a moderate drive to achieve;
5) Adaptability;
6) Autonomy;
7) Decisiveness;
A feeling of control over your own destiny;
9) Having (energy) drive and enterprise;
10) Motivation to grow;
11) Sense of intuition;
12) Ability to spot opportunities;
13) Perseverance;
14) Problem-solving abilities;
15) Risk-tolerance;
16) Self-confidence;
17) Social skills.
Over the course of running a small business, I’ve had to use or develop nearly every one of these characteristics. Some professions require more development than others.
A website designer’s optimal characteristics for success would be (1, 2, 3, 4, 5, 6, 11, 12, 13).
On the other hand, let’s say you operate a restaurant. Your optimal characteristics for success would be (2, 3, 7, 9, 10, 13, 15, 16, 17).
What is YOUR entrepreneurial style?
Recommended Reading:
• Wikipedia.org - Entrepreneur
• Planning a Vivid Future: Brian Scudamore’s Key Move
• Is Entrepreneurship Really For You?
Tags: Entrepreneurial Style, entrepreneur, small business
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Recruitment Management Software
A recent iLogos Research study revealed 94% of Fortune 500 companies now hire employees online, a stark contrast from 1998, when only 29% of them were doing the same.
The demands of small business owners everywhere are being met by developers who have been busy creating software that can manage new employee recruitment online. This technology could make your life as a small business owner easier, bringing in stronger, more savvy candidates.
It’s important to do your research and find the technology that’s the best fit for your company. When shopping around for a recruitment manager program, consider the following questions:
• Cost: Is the advertised price the actual price?
• Ease of Use: Is it easy-to-use, even if I’m a computer novice?
• Setup: How long will it take to get up and running?
• Features: What’s included?
• Service: Will I get a helping hand?
Source:
• How to Hire Like the Fortune 500’s
Recommended Links:
• Google Directory - Recruitment Management
• Get More Marketing Value from Recruitment Software
• The New World of On-Demand Software
Tags: Fortune 500 companies, hire employees, employee recruitment, Recruitment Management
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[Link]
Motivating Employees
I’ve come across an excellent guide from on motivating employees.
This guide is packed full of fantastic ideas to get more and better quality work from your employees by doing more than just offering a raise.
Sections include:
• Corporate Culture
• Morale Boosters
• Recognition
• Non-Cash Incentives
• Motivation by Compensation
• Creating a Fun Workplace
Inc.com - Guide to Motivating Employees
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[Link]
Self-Made Entrepreneurs
Inc.com has posted an excellent slideshow featuring photos and small writeups of self-made entrepeneurs.
These stories are an inspiration for anyone who is thinking of starting their own small business and even those who already own a small business and want to take it to greater heights.
From humble beginings, these entrepreneurs overcame obstacles to make it big. Will you be the next to make it big?
Featured entrepreneurs:
Mike Kittredge
Founder, Yankee Candle
Debbi Fields
Founder, Mrs. Fields Cookies
Roxanne Quimby
Cofounder, Burt’s Bees
John H. Johnson
Founder and Publisher, Ebony
Fred DeLuca
Founder, Subway
Ewing Marion Kauffman
Founder, Ewing Marion Kauffman Foundation
Larry Ellison
Founder, Oracle
Russell Simmons
Founder, Rush Communications
Bill Strickland
Founder, Manchester Bidwell
Anita Roddick
Founder, The Body Shop
Tags: entrepeneurs, small business
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SBA Hurting Small Business?
BusinessWeek Online has posted a very interesting interview with Lloyd Chapman, founder and president of the American Small Business League (ASBL), a federal small-business policy watchdog group based in Petaluma, Calif.
… last year he filed two lawsuits against the Small Business Administration for information pertaining to contracting fraud, and he’s gearing up to file two more.
Mr. Chapman speaks with Stacy Perman about what he views as a hostile environment toward small businesses as well as loopholes that give large corporations small business contracts.
• Read the entire interview at BusinessWeek.com
• Read SBA Administrator Hector Barreto’s response
Tags: Small Business Administration
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Alternative Minimum Tax
This year, it’s estimated that millions of Americans will pay the Alternative Minimum Tax, also known as AMT. The AMT requires some people to pay more than regular income tax.
Congress enacted the AMT in 1969 following testimony by the Secretary of the Treasury that 155 people with adjusted gross income above $200,000 had paid zero federal income tax on their 1967 tax returns. In inflation-adjusted terms, those 1967 incomes would be roughly $1.17 million in today’s dollars. Source: TaxFoundation.org
11 things that may cause an AMT liability:
• Excessive Exemptions
• Standard Deductions
• State and Local Taxes
• Interest on Second Mortgage
• Medical Expenses
• Miscellaneous Itemized Deductions
• Various Tax Credits
• Incentive Stock Options
• Long-Term Capital Gains
• Tax-Exempt Interest
• Tax Shelters
Read more about these AMT liability factors
A major flaw in the AMT:
The Alternative Minimum Tax is NOT adjusted for inflation. This means that with each year that passes, more and more people will be affected by this double taxation. This includes people who were not originally targeted for this tax — middle and upper-middle income families.
If left unchanged, the AMT is estimated to penalize nearly 15 percent of taxpayers by 2010—some 12 million Americans in total.
Recommended Reading:
• IRS.gov - AMT Assistant
• Fairmark.com - Alternative Minimum Tax Guide
• Smartmoney.com - The Alternative Minimum Tax
• TurboTax.com - Alternative Minimum Tax FAQ
Image Source: National Center for Policy Analysis
Tags: Alternative Minimum Tax, AMT, income tax, Capital Gains, Tax Shelters, inflation, IRS
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Adding Value to Your Business
Image Source: VR Business Brokers
I believe that there are two types of entrepreneurs:
1) The owner who plans to keep their company in the family, often passing it down to children or a trusted protege.
2) The owner who envisions selling the business for a large profit to another entrepreneur or to a larger corporation.
I will focus on entrepreneur #2, the seller.
In order to sell your company at maximum profit, you have to provide a maximum value to the buyer. After all, who wants to spend a ton of money on a company with financial woes offering shady products labeled with a terrible brand?
While there may be a few rogue investors out there who might jump on board, chances are you won’t get even close to the offer you hope for.
What can you do now to add value to your business?
1) Take care of the finances. Hire a professional to audit your books for three years worth of accuracy. Audited financials are golden and can bring a quicker close to the sale with limited investigation.
2) Reposition your reputation as the owner to emphasize the reputation of the company. A brand can be worth more than the business itself! (See #18, Louis Vuitton - bottler of Moët champagne and Hennessy cognac, producer of designer fashion and luxury cosmetics… a brand worth more than giants like Honda, Ford, Dell, Pepsi, Sony, Nike, etc.)
3) Brainstorm new proprietary products or services that fulfill a need of your customers. Even if they are not released, the raw data for these new ideas could serve as extra incentive for a buyer.
4) Build extensive customer lists and operation manuals if you do not already. Customer data can be a goldmine for someone buying your company. Operation manuals ensure the next person will have an idea of how everything works.
5) If you contract anything, make sure that it is short-term and does not require your involvement once the sale is complete. If long-term contracts are already in place, make sure they are fully transferable to the next owner.
These steps take time to execute which is why a decision to sell should be made long before the actual sale takes place.
Bottom line: prospective buyers want to see profit and value. With a strong combination of both, you will get closer to selling for what you really think your business is worth.
Recommended Reading:
• Entreprenuer.com - Growing a Business to Sell
• Powerhomebiz.com - Selling Your Small Business
• About.com Small Business - Selling Your Business Nest Egg
• Business Info Zone - Adding Value to Your Business Before You Sell It
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IRS Payments by Credit Card
Starting this year, business owners will be able to pay employment taxes — Forms 940 and 941 — with plastic.
For the first time this tax season, business owners who paid $1,500 or more in wages in any quarter of the previous year will be able to make federal business-tax payments on their American Express, Discover, MasterCard, or Visa, the Internal Revenue Service announced on Jan. 5.
On top of collecting air miles and other bonus points on their cards, small-business owners could cover employment taxes with a credit card payment, then — depending on cash flow — could hold-off on paying the balance on the cards until later in the month.
Tags: employment taxes, Internal Revenue Service
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Shared WiFi on the Way
FON, the brainchild of entrepreneur Martin Varsavsky, has just raised $21.7 million from Google, Skype, Sequoia Capital and Index Ventures.
FON is a global community of people who share WiFi (wireless Internet access). By sharing your WiFi broadband connection at home/work, you are entitled to connect to other shared Fon WiFi access points anywhere in the world.
At this writing, FON has over 3,000 registered users with a goal of more than 30,000 FON WiFi hotspots worldwide by 2007. For now, FON is available in Europe and U.S. only.
FON seems to be picking up steam very quickly, however, there is still some skepticism in the community as to what FON plans to bring to the table and how secure the network will actually be.
FON Security
According to FON’s website: If you have registered your WiFi in the FON Community, you will be protected through your local password which you can change whenever you choose.
You will share your WiFi connection with registered Foneros from around the world. Unlike the open WiFi networks that are not password protected, all Foneros who connect through your WiFi are registered and identifiable.
Tags: FON, Martin Varsavsky, WiFi, wireless
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[Link]
Cybercrime on the Rise
It’s estimated that 85% of malware today is created with profit in mind. The sobering corollary to that statistic: only 5% of cyber criminals are caught and prosecuted.
The FBI has already identified fighting cyber- and high-technology crimes as No. 3 among its top 10 priorities.
Recommended Reading:
It’s Time to Arrest Cyber Crime
Cybercrime Feared 3 Times More Than Physical Crime
IBM Report Anticipates Surge in Cyber Attacks in 2006
FBI survey finds cybercrime rising
Tags: malware, technology crimes, Cybercrime
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NFL Entrepreneurs
In light of this weekend’s Super Bowl game (go Steelers), Inc.com has a slideshow featuring 13 of the NFL’s best post-football entrepreneur success stories. Who says professional athletes don’t perform well off the field?
From Joe Montana to Simeon Rice, many hard-nosed football players have transferred their competitiveness to the business world. Here’s a look at some of the biggest NFL success stories off the field.
Tags: Super Bowl, NFL, entrepreneur
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Futuristic Handshake Devices
Handshake Device to Replace Business Cards
Information can be transferred by optical electric field sensors, travel through the body as a small amount of voltage and end up in cell phones or other mobile devices. The 50-gram device is the size of a matchbox, and must be worn by both parties.
Wait… did this article just say that this device would send a small amount of voltage through my body? Hmmm…
If two people each wear [the device], they could receive each other’s details into their cellphones or other mobile gadgets simply through body contact.
Other uses of the technology include allowing people to unlock a door by touching the door knob.
I like the doorknob idea, but the swapping contact information by standing next to someone is a little out there. Especially when you can use your (free) vocal cords for an old fashion “Hello, my name is Chris. What is yours?”.
I’m all about technology making our lives easier, however, in business there is no substitute for a little human contact.
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Estimating Income Tax
Income tax amounts to the other half of total taxes owed each year by small business owners. How much you owe is determined by how much you made after expenses and deductions.
This post will show you how to estimate your income taxed owed in equation form.
First, you should determine what tax bracket you will fall into. Your tax bracket is used to estimate the amount of additional tax you’ll pay if your income increases — or the amount you’ll save if you can claim a deduction.
• View 2005 Income Tax Brakets
• View 2006 Income Tax Brackets
So for instance, you are married filing jointly and your taxable net earnings is $55,000.00. You will be taxed at the 15% rate.
Don’t forget: The IRS allows you to deduct half of your estimated self employment tax away from your net earnings.
The equation for estimating your income tax looks like this:
(((Net Earnings - (SEtax / 2)) - Income Min. Limit) * Tax Rate) + Minimum Tax
So assuming your estimated net earnings is $55,000 @ 15% (before deducting SEtax) the equation would be figured as:
((($55,000.00 - ($7,771.25 / 2)) - $14,600.00) * .15) + $1,460.00
((($55,000.00 - $3,885.63) - $14,600.00) * .15) + $1,460.00
(($51,114.37 - $14,600.00) * .15) + $1,460.00
($36,514.37 * .15) + $1,460.00
$5,477.16 + $1,460.00
Income Tax = $6,937.16
With net earnings of $55,000, your estimated total tax owed (incl. self employment tax) would be:
Itax + SEtax = Total Estimated Tax Owed
$6,937.16 + $7,771.25 = $14,708.41
Disclaimer: Tax results submitted to the IRS should be figured by a qualified accounting professional. This method is only for estimating what you will owe to be better prepared.
Recommended Reading:
• Your Tax Bracket
• Your Income Tax Bracket
Bookmark to:
9c [Link]
Estimating Self-Employed Tax
Yesterday I spent a good part of the afternoon attempting to estimate my tax liability for 2005 while looking ahead to 2006.
As all small business owners know, self-employment tax is a major part of your total tax liability each year. It represents 15.3 percent of your net earnings from self-employment as reported on Schedule SE.
The tax consists of two portions:
12.4% for Social Security - $11,160.00 maximum (2005).
2.9% for Medicare - no maximum.
According to the IRS, net earnings from self–employment generally represent 92.35% of your net income. eHow.com offers this equation for estimating self-employment tax:
Net Income * .9235 = Net Earnings
Net Earnings (up to $90,000 in 2005) * .124 = SStax
Net Earnings (no limit) * .029 = MCtax
SStax + MCtax = SE Tax
Assume your company earned $55,000 net income. Your estimated self-employment tax is figured as:
55,000 * .9235 = $50,792.50
50,792.50 * .124 = $6,298.27
50,792.50 * .029 = $1,472.98
$6,298.27 + $1,472.98
SE Tax = $7,771.25
Good news: you can take one half of your self-employment tax amount as a deduction against total income on your Form 1040.
Disclaimer: Tax results submitted to the IRS should be figured by a qualified accounting professional.
View the equation for figuring income tax along with tax rate brackets for 2005 and 2006.
Recommended Reading:
• IRS.gov - Self-Employment Tax Discussion
• TurboTax.com - Self-Employment Tax
Bookmark to:
[Link]
IRS Publication 17 - Tax Guide
IRS experts have pulled together an overview of common tax issues in one convenient place — Publication 17, Your Federal Income Tax.
From stock sales to student loans, this 300-page publication holds the answers to many of your questions.
To get a copy, visit www.irs.gov/publications/p17/index.html or call 1-800-TAX-FORM (1-800-829-3676).
Bookmark to:
[Link]
How to Find Good Employees
Finding good employees can make or break a small business.
Better employees mean better production and more success for your company. On the other hand, bad employees end up costing you time and money.
AllBusiness.com offers this list of 8 ways to find good employees:
1) Temporary personnel agencies
2) Employment agencies
3) Headhunters
4) Internal candidates
5) Bounty rewards
6) Your Web site
7) Want ads
Job Web sites
Read more: Finding Good Employees
Recommended Reading:
Closing the Deal: How to Get Prospective Employees to Sign On
Hiring and Retaining Good Employees
How to Find the Right Employees for Your Business
Bookmark to:
a1 [Link]
Small Business Loans & Grants
We all know money is everything when starting a new business. Fortunately there are many groups that are pleased to give you money for starting up a legitimate business.
Ken Yancey, CEO of Score.org, offers 5 steps on the topic:
1.) Consider city, county, or state assistance programs for qualified small businesses. Some examples include tax abatements, urban-renewal set-asides, rural access, workforce training, and economic development.
2.) Contact your state senator’s or representative’s office. The staff there can be helpful in pointing you toward state funds or programs for businesses.
3.) Take advantage of “in-kind” credits. Like cash, these can be used as matching funds. In one case, a state program counted a company’s $200,000 local property-tax abatement as part of the matching requirement.
Recommended Reading:
How To Fund A New Business
Look to the States for Small Business Grants
SBA.gov - Federal Grant Resources
Bookmark to:
[Link]
10 Interactive Marketing Tips
Interactive marketing takes the act marketing a step further by engaging the audience to gain and hold attention.
Interactive marketing is designed to keep the audience occupied while you subliminally advertise your product.
Mike Yapp of iMediaConnection.com offers us the top 10 best ways to create an interactive marketing scheme.
1) Multimedia
2) Opt-In
3) Personalization
4) Tell a Story
5) Include a Compelling Offer
6) Make it Immersive
7) Usability
Effective ROI
9) Reshaping the Brand
10) Send to a Friend (Viral Marketing)
10 Best Interactive Marketing Practices
Recommended Reading:
Upcoming Interactive Marketing Events 01/06
InteractiveMarketing.com - Marketing Tips
Create an Interactive Online Experience for Clients
Bookmark to:
[Link]
Will You Retire?
Retirement is not in the plans of most small-business owners, according to the newly-released Wells Fargo/Gallup Small Business Index.
Eight of 10 small-business owners surveyed said they are happy running their businesses and have no intention of retiring. Almost 4 out of every 10 said the only thing that would force them to retire is poor health.
Forty-two percent of small-business owners indicated they may cut back on work, but would never completely abandon their business. Only 19 percent plan on traditional retirement.
Even though retirement is many moons away for me, I feel that I will fall into the 42% of business owners who will cut back, but not completely abandon their business.
Bookmark to:
96 [Link]
10 Opportunities for 2006
This small business forecast is brought to you courtesy of Anita Campbell of SmallBizTreands.com.
This list was subjectively chosen by Anita under 2 requirements:
1) The list is limited to businesses that the mainstream can identify with.
2) The list focuses on opportunities for the average entrepreneur.
That said, here is the Small Business Trends list of Top Ten Promising Business Opportunities for 2006:
1. Outsourced information technology services
2. eBay and Amazon related opportunities
3. Pet-related
4. Food and beverage related niche industries
5. Hobby and avocation-based businesses
6. Anything security related
7. Services for seniors and retired people
8. Information filtering services
9. Hospitality businesses that create an experience
10. Hispanic products and services
Bookmark to:
a0 [Link]
Slim Down with a Notebook PC
Looking for a tax write-off to start 2006? Consider replacing or supplementing your desktop PC with a portable computer system.
I am shopping for a system like this myself, and have learned several important things about laptops:
1) There are only a small handful of notebook PC manufacturers in the world. This means that “brand name” notebooks aren’t proprietary technology; only rebadged ODM (Original Design Manufacturer) systems. Notable exceptions are brands such as IBM, Acer, Toshiba, Twinhead and Apple.
2) OEM Companies (Dell, Gateway, Compaq, Sony, Sager, Alienware, HP, etc.) build the ODM system and back it with parts and support. You cannot purchase direct from the ODM.
Here are things to keep in mind when shopping for your system:
Warranty: Compare warranties among different vendors.
Features: Does it do all you need?
Price: Are you paying for a name, or for features and warranty?
I plan to purchase the Sager 9750. Based on reviews, reviews and more reviews… I think this is THE system to purchase if you want high-end that allows for easy upgrading in the future.
This system is a beast weighing in at around 12.5lbs, making it a excellent desktop replacement, but not a mobile workhorse. For a more lightweight solution, consider the Sager 5720 featuring Intel Pentium M with a total weight of 9.4lbs.
Recommended Reading:
NotebookForums.com
NotebookReview.com
Bookmark to:
a3 [Link]
Happy Holidays
Since this will be the last non-DOTW post before Christmas, I would like to wish all of my readers happy holidays!
I wish all of you good luck and success in 2006!
Holiday card image courtesy of CardsDirect.com
Bookmark to:
[Link]
Broadband Over Powerlines
High-speed Internet connections over powerlines and electrical currents is not entirely new, however, it is little known to the public.
I believe this technology will soon be a viable alternative to Cable and DSL connections. With two-way speeds of up to 25 times that of Cable and DSL, this technology could have a significant impact on all things electronic.
There are, however, some kinks that need to be worked out first… such as interference with certain radio frequencies.
Customers who subscribe to the service simply plug a tiny modem, based on the HomePlug power line standard, into an electrical outlet and connect a cable from their computer for Internet access.
Recommended Reading:
HowStuffWorks: BPL (Broadband o’ Power Lines)
WiredNews: Broadband Over Power Lines?
Why broadband over power lines is a bad idea
Bookmark to:
a0 [Link]
Business Card Cases
Tired of bent, torn, tattered and otherwise unprofessional business cards? Keep your business cards fresh and clean by investing in a business card case.
These items make great gifts for employees, clients, and even yourself. A stylish business card holder could even help strike conversation in a social setting.
View more business card case designs
Bookmark to:
9a [Link]
C|net Launches Small Business Site
C|net has launched a new web site:
Best Practices: Tips for Your Small Business
“If you’re in business, you’re looking for solutions. What you do with your systems, software, and services is as important as what you buy. Knowing how to get started, where to turn, and what questions to ask helps you streamline your efforts and make more money.”
There are a few useful articles, but for the most part the site looks pretty bare. Since it is new, I assume that more content will be added over time. Bookmark this and check back in a few months as I have a feeling there will be some good articles posted there.
Bookmark to:
a8 [Link]
Year-End Tax Planning Steps
In the month of December what do you think about… family, food, shopping? At this important time of the year, many business owners don’t give their tax situation a second thought.
What can you do to maximize your tax savings before clock strikes midnight on December 31st?
Barbara Weltman of Inc.com offers these 10 steps:
Step 1: Add to your revenue.
Step 2: Pay off accounts receivable.
Step 3: Make capital investments.
Step 4: Stock up on supplies.
Step 5: Distribute profits.
Step 6: Save for retirement.
Step 7: Make charitable donations.
Step 8: Get slow movers off your books.
Step 9: Adjust your estimated taxes.
Step 10: Get ready for new 2006 tax laws.
Source: 10 Steps to Year-End Tax Planning
Recommended Reading:
• MotleyFool - Year-End Tax Planning Tips, Part I
• MotleyFool - Year-End Tax Planning Tips, Part II
• Google.com Search - “Year End Tax Savings”
Bookmark to:
[Link]
Fair Tax Legislation
Like most small business owners, I cringe when paying taxes. It’s my duty as an American citizen, however, I question if taking such a large chunk of what I earn is the right way.
Enter the Fair Tax legislation also known as H.R.25.
The Fair Tax repeals the income tax, employment tax, and estate and gift tax. A national sales tax of 23% on the use or consumption in the United States of taxable property or services would be implemented. In other words, only the money you spend would be taxed.
Scott Burns of the Dallas Morning News offers three good reasons for implementing the Fair Tax into our society.
1) Liberation of skilled workers.
Burns argues that income taxes fall hardest on skilled men and women who work hard in, and sometimes own, America’s small businesses. The burden of time and fees is the single largest thing that keeps these workers from accumulating wealth.
These workers are not represented by anyone in Congress, whether Democrat or Republican. Our laws are written by special interests that range from the AARP to the nameless lobbyists who tack on special tax breaks that benefit a single company or industry. That’s the way it is. It is an entirely corrupt system.
2) If you don’t spend your income, everyone benefits from it.
By not spending the money you earn, you are saving it. This extra cash flow will open up new capital for our economy. It would provide new cash for bank deposits, inventory for stores and manufacturers, and capital for equipment. Without the drain of taxation, a larger supply of capital would force down interest rates.
3) Greater equity in taxation.
The only true winners in our current tax system are the lobbyist who represent self-interest groups at the ultimate expense American small business owners like you and I. Both political parties fail to recognize that the worlds of work and entitlements are on a collision course.
Recommended Reading:
• FairTax.org - Americans for Fair Tax
• The FairTax Book by Neal Boortz
• Thumbnail Sketch of the FairTax
• Online Office of Congressman John Linder, Georgia
Bookmark to:
9b [Link]
Building Your Office
“The most productive office is one that is not only comfortable and attractive, but is also functional.”
Last year when I moved my home-based business into a leased office space, I needed to select a new desk setup. I chose a corner desk with a desk extension off the left side. Behind me I have a bookcase/shelf system that holds various decor and books. The ad photo above shows the desk setup that I purchased.
I love this setup not only because it looks great, but also because it’s extremely functional. The setup fulfills every need I had including a comfortable computer position, a desk for writing and stacking and even an attachment to place sticky notes.
Need a comfortable office chair? They are expensive, but I highly suggest a Herman-Miller Aeron chair. It is by far the most comfortable office chair I have ever sat in (and I’ve tried alot of chairs!). Don’t settle for a cheap alternative!
Recommended Reading:
Consider needs first in office furniture
10 Common Home Office Mistakes
How to Use Artwork to Enhance Any Room
Bookmark to:
[Link]
Protecting Your Clientèle
Headhunting is a common practice these days.
An employee informs you that he will be leaving his positions in order to take up a new job offer. Soon you learn that this new job offer came from a direct competitor. Chances are, your employee will try to take customers with them.
How can you protect the employee/company/customer relationships that you’ve worked so hard to gain?
Restrictive Covenants - require employees who interact with customers or work with confidential information to be bound by a non-compete or non-solicitation agreement or both.
Keeping Former Employees Away From Your Customers
Recommended Reading:
Nolo.com - Non-compete Agreements
FindLaw.com - Non-compete Agreements
Business Owner’s Toolkit - Non-compete Agreements
Bookmark to:
a0 [Link]
Absolut Advertising
If you’ve looked at a magazine within the last 25 years, you’ve probably seen at least one Absolut Vodka advertisement.
It’s been named one of the 10 best campaigns of the 20th century by America’s Advertising Age Magazine. To date, it comprises 1,450 original ads, with more added each month.
“Why are ABSOLUT ads so memorable? Why do collectors crave them? Why are famous artists and writers enthusiastic about creating them? The concept is easy and the execution brilliant. First, two simple words – and the first is always the same – second, a single stunning, image that complements the headline. Like a couple in love.
It proves that advertising doesn’t have to be complicated; rather, advertising can and should respect people for their wit and intelligence. The most impressive, impfactful ads are often the simplest. This knowledge is key to the ABSOLUT brand’s success”
–Richard W. Lewis, ABSOLUT Worldwide Account Director
Bookmark to:
9a [Link]
What IRS Auditors Look For
As an entrepreneur, you may have or know someone who has been audited by the IRS. If an audit is in your future, stay calm and understand what the auditor will be looking for…
1) Did you report all of your business sales or receipts?
2) Did you write off personal living costs as business expenses?
3) Does your lifestyle square with your reported income?
4) Did you take cash or otherwise divert income without declaring it?
5) Did you write off personal auto expenses as business?
6) Did you claim personal costs as business expenses?
7) Are you filing payroll tax and making tax deposits for employees?
If you hire people you call “independent contractors,” are they really employees?
What Auditors Look for When Examining a Business
Recommended Reading:
• Top 20 Tips for Surviving an Audit
• How to Reduce the Chance of an Audit
• Audit Technique Guides by Industry
Bookmark to:
a1 [Link]
Marketing with Postcards
Postcards may be one of the best kept secrets of modern marketing.
They can produce a surge of traffic to your web site or a flood of high-quality sales leads. Campaigns are easy to track and almost everyone reads post cards, even the good folks who throw out all your bulk direct mail!
How can you market effectively by using only postcards? Here are a few important tips to keep in mind:
1) Ditch the Sales Pitch.
2) Get Right to the Point.
3) Send your postcards via First Class mail.
7 Tips for Successful Postcard Marketing
Recommended Reading:
10 good reasons to market with postcards
Marketing With Post Cards
Postcard Printing - Design Postcards Online
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9f [Link]
Happy Thanksgiving!
I hope all of you have a safe and joyful Thanksgiving holiday weekend.
When turkeys dream…
Bookmark to:
99 [Link]
Defeating Spam and Phishing
An estimated 45 percent of all e-mail is defined as spam, costing business worldwide $20 billion a year in lost productivity and technology expenses, according to the Radicati Group, a market research firm in Palo Alto, California.
Following are five critical tips which will help you create a more productive workplace that is better protected against spam and phishing attacks—even if you have minimal or no IT staff.
1) Make sure your employees are aware of “phishing” attacks.
2) Educate employees on the how-tos of secure e-mail usage.
3) Protect your business from being “phished.”
4) Let your employees have some control.
5) Choose an e-mail security solution that’s right for you.
Recommended Reading:
What is Phishing?
How to prevent spam
Bookmark to:
[Link]
IRS Redesigns Form 941
The Internal Revenue Service recently unveiled the redesign of Form 941, Employer’s Quarterly Federal Tax Return.
The redesigned form features an improved layout, plain language instructions, simplified deposit reporting and paid preparer identification. The form is also scannable, which the IRS expects will reduce transcription errors.
“… The IRS wants to simplify its forms,” said IRS Commissioner Mark W. Everson. “The new Form 941 will help achieve that.”
Form 941 is used to report wages, tips and other compensation paid, as well as Social Security, Medicare and income taxes collected.
IRS Unveils Redesigned Employment Tax Return
Bookmark to:
9d [Link]
3 Ways to Pay Less for Technology
Thinking of investing in new technology for your business?
Vendors have recently slashed prices for computers and other technology. “What you used to spend $2,000 for, you can get for $950 to $1,200,” says Alan Pearlman, an attorney and computer consultant. “I don’t think there’s a better time to buy than right now.”
Be on the lookout though. The prices of PC parts are on the rise and will be passed on to you, the consumer.
How can you pay less while getting more than everyone else? Follow these 3 steps:
1) Renegotiate existing contracts for consulting and network services.
2) Make sure you need whatever new technology you do buy.
3) Set up a system to keep doing it.
Finally, keep in mind that newer technology isn’t always better!
Recommended Reading
How to Buy Computer Equipment for Your Business
When Should I Upgrade My Computer Hardware?
Bookmark to:
[Link]
Cut the Clutter!
Look around your desk right now. Feeling a little overwhelmed by all of the clutter? If so, don’t you think it’s time to loose some of that weight by getting rid of all the papers and notes you don’t need anymore?
Nancy Van Valkenburg of Utah’s Standard Newspaper, Online Edition offers the following advice:
The first step is to start making those delayed decisions. … suggests clients sort papers into three piles using the F.A.T. system. The letters stand for File, Act and Toss. … advocate positioning files and tools by proximity based on the frequency of your need for them.
… compare an office to a kitchen. A coffee maker or toaster you use every day may be kept on an otherwise clear kitchen counter.
Recommended Reading
Five Cures for Office Clutter
Organizing Office Clutter
Tips to Tame the Office Clutter Monster
Bookmark to:
[Link]
Developing a Reputation
In business a good reputation can carry your company a long way.
Your reputation alone can actually earn new business without spending a dime on advertising. If people know you are good at what you do or that you have a superior product, not only will they come back for more, they may also tell their friends about it.
About.com offers this comprehensive five part article on what you can do to develop your reputation with clients and potential customers in a variety of ways.
1) Be Prolific
2) Be Ubiquitous
3) Be Generous
4) Be Dependable
5) Be Credible
Recommended Reading:
Do What You Say You’ll Do
How to Gain Immediate Credibility
Word-of-Mouth: The World’s Best-Known Marketing Secret
Bookmark to:
9e [Link]
Independent Contractors
While running a small business, there may come a time when you need a job done, but you don’t want to bring someone on full time to do it. This is where an independent contractor steps in.
The definition of an independent contractor has recently been disputed in a Utah courtroom. Read more about this story and the results of the charge and appeal in the Salt Lake Tribune.
For more help in determining whether a person who works for you is an employee or independent contractor, read IRS publication 15a.
Recommended Reading:
Employee or Independent Contractor?
Independent Contractor VS. Employee - State of Missouri
IRS.gov - Independent Contractors vs. Employees
Bookmark to:
[Link]
The Networking Boogie Man
Many business owners cringe at the idea of attending an event where you know nobody — and are expected to get to know as many people as possible. It’s a part of business, and a fear that some of us have to overcome to be successful. Like it or not, conducting business requires a little face-to-face time.
Australian author Mary Morel offers some advice on this topic in her article “Network Your Way to the Top”.
You will probably get most out of networking if you choose a few networking groups and go to their meetings regularly. The more often you attend networking events, the stronger relationships you build and the more you enjoy yourself.
As with any marketing, you will get better results if you take a strategic approach. Networking events aren’t the place for a sales pitch, though you may give someone your business card and possibly your brochure.
Recommended Reading:
Get People Talking About You
Top 10 Networking Skills for 2005
Networking Strategies for Shy Professionals
8 Ways to Use Business Cards to Network and Market Your Business
Bookmark to:
a0 [Link]
Freelance Your Expertise
I remember the time before I started my own business. I was stuck in the rat race spending 40 hrs a week making other people wealthy.
Do you have a special talent that you could monetize? Do you have the ability to fulfill the needs of thousands (even millions) of people?
Here are some tips to keep in mind:
1) Offer a service you know people want.
2) Take the time to establish yourself.
3) Don’t rush to quit your job until you save some money.
4) No matter what your field, contracts are important.
5) Establish an accounting system.
How to Freelance Your Expertise
Recommended Reading:
Making it as a Freelancer Journalist
Evolt.org - Freelancing Tips
Building Your Freelance Business on a Shoestring Budget
Bookmark to:
[Link]
The Importance of a Logo
Your identity is an extension of your business that communicates visually, through appearance, and emotionally, through symbolism. Curtailing or ignoring thought, revision, and growth in the design process will hurt your finished product and corporate image.
Have a graphic artist professionally create your logo based on how you want your customers to view your company. For instance, when the GreatFX logo you see above was designed, I wanted something that would show speed, quality, and modernism. The end result was a design that only took a few revisions before we had a winner.
Having a logo created professionally may cost a bit more in the short term, but will pay off multiple times in the long run. A professional logo is one of the best investments a business owner can make!
I Hate My Logo! What You Should Get For Your Money and Why
Recommended Reading:
The Importance of a Logo
Logo Design Articles
More Logo Design Articles
Bookmark to:
9f [Link]
What is Branding?
Many people think branding has to do specifically with product design. While product design helps facilitate the branding process, branding is actually much more intricate.
Branding starts with your consumers brains and not with your product design. Branding is not how your product looks. Nor is it how your consumer feels and perceives your product. Nope. Branding is making your consumers think that there is no other product except yours!
Recommended Reading:
Building Own Brand Important for Small Companies
What is Branding?
Bookmark to:
[Link]
Networking with Business Cards
Are you getting maximum benefit from networking events you attend? If not, try taking a look at how you are promoting yourself. Is your business card specific or interesting enough to help make a good first impression?
Here are some tips from Vannie Ryanes of BellaOnline.com, an editorial site with a focus on women’s issues.
Make sure you have a proper business cards. You card should be:
• Clean and unmarked with neat edges.
• In a business card case or clean briefcase pocket.
• Up-to-date information; no hand-written changes.
• Suitable for your line of business; simple/extravagant.
• If you have several businesses have an appropriate card.
• A double-sided card is perfect for multiple businesses.
• Readily available. You should not have to search for your card.
Recommended Reading:
• Five Ideas for Keeping Business Cards Handy
• Ivan Misner: Networking
• Networking for Shy People
Tags: networking events, business card, business cards, businesses, Networking
Bookmark to:
a5 [Link]
Polish Your Company Image
In business, the image your company emanates directly influences a client’s first impression. After time, a corporate identity can become worn or dated. First, research your target market and build off what you learn. Understand what your clients want so that you can deliver it via your marketing mediums.
Freshening up your business cards, brochures, postcards, stationery and web pages will help shine a different light on your company.
Supplemental Links:
M&O Marketing Consultants - How to Improve Your Corporate Image
Stelzner Consulting - Identity Makeover Examples
Bookmark to:
[Link]
Investigate the Competition
Trade shows offer a perfect opportunity for a business owner to scope out their competition.
Think about it… all of them gathered in one place at one time displaying their latest and greatest products or services. Even if you don’t speak with a booth representative, you can still walk away with a gold mine of information just by inspecting the booth and taking a presentation packet.
Just by virtue of being at the show, your competitors are sharing the following information:
1) Who they are.
2) What their reputation and image is in the marketplace.
3) Part of their sales and marketing strategy.
For more tips on investigating your competition (including how to get juicy information) please visit the link below.
Source:
TheTradeShowCoach.com
Bookmark to:
a2 [Link]
What’s Your Business Model?
Quite simply, the business model is an explanation of how a company will generate revenue to meet your expenses and earn a profit. It also explains the sources of the company’s revenues, how much these sources pay and how often.
Is your sales product or service based? Based on this question, here are several types of business models that you could implement or enhance to further your income.
Fee for Service Models:
1) Day Rate
2) Project Fee
3) Monthly Retainer
Product-Based Models:
1) Flat Fee
2) Subscription
3) Bait and Hook
If you aren’t earning as much as you would like through your business, the marketing plan may not be at fault. Take a look at your business model and determine if changes are needed.
Source:
GetClientsNow.com
Bookmark to:
[Link]
How NOT to Fund a Business
How many of you have used a credit card for a business expense? With credit card companies aggressively offering easy approval with sizable credit limits it’s understandable why many people do this.
Banks put small business owners through the wringer before lending money. … if the banks want to lend responsibly, look at it from your own point of view: why would you want to borrow irresponsibly? Because that’s exactly what using your personal credit card can be.
Bottom line: be responsible and use the credit card(s) sparingly. Your business will be much stronger, and you will be much happier.
Source:
ShropshireStar.com (U.K.)
Bookmark to:
a1 [Link]
Preparing for Disaster
With the recent hurricane barrage on US coasts, we are reminded that natural disasters can cause more than just property damage.
The winds also can blow in armies of fly-by-night contractors and door-to-door scam artists eager to capitalize on the misfortunes of innocent people.
The California Department of Insurance has put together this preparation guide for yourself and your business in the event of a natural disaster. It focuses on hiring an honest contractor to rebuild your home/business.
Source:
California Department of Insurance
Bookmark to:
[Link]
How to Profit From Networking
When it comes to business, who you know is almost everything. Networking yourself is an essential business practice that everyone should take part in. Why? Because quality business relationships can turn into profitable opportunities.
Here are five strategies to make networking profitable:
1) Choose the right networking group or event.
2) Focus on quality contacts versus quantity.
3) Make a positive first impression.
4) Be able to clearly state what you do.
5) Follow up after the event.
Networking produces results. The more people that know about you and your business — and trust you — the better chance you have of gaining a new client or free referral.
Source
About.com
Bookmark to:
[Link]
What Do Your Clients Need?
When starting a new business, preparation is half the battle. Arm yourself with the knowledge of what your target clients want and you will be able to deliver it to them much faster and more effectively.
Lack of research in your target market is like playing darts in the dark. You might hit the target occasionally, but more than likely, you’ll fall short and end up with a bunch of holes to fix.
When you have a clear picture of what your target market is truly looking for, you’ll be able to package your services as a solution. Design all your marketing tools - web site, brochure, telemarketing script, sales presentation - to show how your service addresses the hot buttons you identified.
Source:
HealthyWealthynWise.com
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Stop Sitting on the Sidelines
If you are shy around new people, networking events can be an intimidating experience. How should you introduce yourself? What should you talk about?
Striking conversation with a random person isn’t easy for some, but with a little practice, you can become a master networker.
First, set a personal goal to not only talk to, say, 25 new people, but also to ask each one a few key questions. Set another goal to bring back 10 business cards. Call (your new contacts) that same day (or the next morning if it’s an evening event).
Great salespeople learn to become lead magnets, and they learn how by getting out there on the dance floor.
Source
BizJournals.com
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Get People Talking About You
“DARE to be bold if you want your business to stand out from the crowd.” That was the message marketing expert Carolyn Stafford delivered at a Women in Business workshop last week.
By putting your best foot forward, your company can thrive and grow. With more and more competition joining the game, now is the time to establish your company as something different from the rest.
“People buy your personality, they buy you,”
With the dawn of the Information Age it’s important, now more than ever, to put a name and face with your company. Doing this is the first step to “humanizing” a company so that people will feel more comfortable doing business with you.
Source:
The Daily Telegraph - Australia
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Name Memorization
This article is written from an employee point of view, however, I feel that these tips could apply to any business owner who is out networking themselves.
Of course not remembering the name of someone you meet is a social faux pas. Especially if you’re attempting to gain their business. This shows lack of respect and lack of professionalism. Here are some tips to help you remember names:
Concentrate. Be sure you hear it when they say it. Say it right back to them when they tell you. Then use it again quickly.
“If people give you their business cards, read the card back to them. Ask for the correct pronunciations of their names and voice it back to them. Then at some point, turn the card over and jot down information about them, such as their hair color and what they were wearing.”
Source:
California Job Journal
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5 Affordable Marketing Tips
Think you can’t afford to implement any effective marketing tactics? Here are five ways to make a splash on a shoestring budget.
1. Talk to your clients.
2. Creatively package your marketing campaigns.
3. Get the word out with publicity.
4. Leverage existing relationships.
5. Commit to e-mail marketing.
While these methods make take some time and work, the potential returns far outweigh the costs.
Source:
Entrepreneur.com
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The Importance of Branding
Branding is an integral part of the business building process. Large corporations spend hundreds of millions of dollars building their brands, and there’s a reason:
Brands enable customers to remember your product-service. Brands build customer loyalty and lead to repeat purchases. Brands make it easier for current clients or customers to refer you to others. Brands send a message as to what your customers can expect. Brands convey an emotion. Brands add value.
We use brands as shorthand to make our trips to the grocery store easier; we use brands to reassure us about our purchasing decisions; we even use brands to define ourselves in society.
Remember: a brand is a promise. With a brand, you set customer expectations. When someone buys your product or service, they count on those expectations to be fulfilled.
Source:
The News-Press
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Persuade Your Customers
Persuasion is often used to describe a derogatory action. Persuasion is not pushing someone to do something. Pushing creates resistance and resentment. Persuasion feels more like pulling them to a positive point.
Follow these steps to further entice your customers:
1) Understand your product by understanding what it can do for others.
2) Ask well-thought-out questions.
3) Persuade others to act by appealing to emotions.
Source:
BizJournals.com
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Barriers to Marketing Success
As a continuation from last Tuesday’s post, Benefits of Market Research, here are three common barriers to small business marketing success.
1) No clear definition of success
At what point can you call your marketing campaign a success? Will your success be based on profits, sales, or customer satisfaction?
2) Not clarifying who your ideal clients are
Before you even start your campaign, find out who your clients are and what they want. What are the demographics and characteristics of your ideal clients?
3) Not spelling out your unique value
Can you offer your clients something that the competition cannot? What makes your product or service better than the others available? Why should people choose you to do business with?
Answering these questions will give you a strong foundation of knowledge for a successful marketing campaign. Your campaign will be leaner, meaner and more efficient. Not only will you save money but will likely increase profits.
Source:
WebProNews.com
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Testing New Marketing Ideas
1) If it ain’t broke, don’t fix it.
2) Measure your results in order to determine what works best.
3) Marketing isn’t just about the numbers.
4) If it sounds too good to be true, it probably is.
5) It’s always OK to try something new; just make sure not to discontinue the marketing you’ve been doing that gets results.
6) Wait 3 days to decide.
Including new ideas in your marketing plan is a healthy practice, just make sure you fully understand the implications and the chance for success in each plan. In other words, have a plan for the plan.
Source:
WebProNews.com
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Benefits of Market Research
Researching your market prior to entering is a sound decision for any business owner. Unfortunately, it’s often overlooked and ignored. The results can be loss of revenue and a slow start.
What are the benefits of market research?
1) Will help you better communicate.
Learn about your potential clients — who they are and what they want the most. Nothing improves communication skills better than a little person to person contact.
2) Will help identify opportunities.
Check the competition. Are they missing something you can capitalize on? What can you do better than they can? Are you clients in need of something nobody else is offering?
3) Will minimize risk.
Just like any situation, if you come prepared you will be less likely to loose and more likely to win.
4) Will create benchmarks to help you measure progress.
How well are you doing? By setting the standard high from the start, you will be in a better position for sustained growth.
Source:
WebProNews.com
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How Likeable Are You?
Face it — in today’s vicious corporate jungle, making a good first impression is crucial. There are no second chances. Instant assumptions are made and you’ve sealed the deal one way or another.
The reception of business cards are just one of the many areas where many people take the inconsiderate route:
Act as though you have received a gift. Upon accepting a card, you have the opportunity to repeat the name and be corrected on pronunciation. You should also ask any questions that the card itself may bring to mind and comment on the design if practical.
The idea is to show interest in any contact’s card, which will make them more likely to be interested in yours. Then respectively tuck it away in a safe place like a $100 bill. Your actions won’t be forgotten.
Source:
Toronto Sun
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Find a Financial Planner
“There is a belief in this country that ‘I don’t need to deal with money management because I hardly have any money’. Many young people engage in “short-term thinking,” like expecting to save money only after they graduate from college or professional school.”
Unfortunately the topic of saving and investing money is not taught in our schools unless you specialize in the subject. It doesn’t matter how much money you make. Take the time to find a good financial planner that will guide you in the right direction.
I recently took the step and I can personally tell you it was an extremely good feeling.
Source:
The New York Times
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How to Survive an Earnout
Earnout - An arrangement in which sellers of a business receive additional future payment, usually based on future earnings.
“As many as half of all small business acquisitions involve earnouts, which generally last from two to four years and range from 15% to 30% of the purchase price (though 50% is not unheard of). Earnouts are particularly common in acquisitions of high-growth companies and those with unproven products. Takeovers of service businesses, in which the entrepreneur’s relationships with clients are crucial, are also likely candidates for earnouts.”
Earnouts can be a very risky transaction. It takes all of the power (and accomplishments) you hold in your company and hands it over to the corporation who purchases the rights. Don’t get starry-eyed by the initial payoff. Negotiate for all you and your company are worth.
Here’s how to protect yourself:
1) Get a lawyer.
2) Get the largest up-front payment you can.
3) Negotiate the targets for the earnout.
4) Fight for sliding-scale rather than all-or-nothing payments.
Source:
BusinessWeek.com
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IRS to Audit S-Corporations
In yesterday’s post, Avoid Legal Trouble I wrote about switching from sole-proprietor to LLC in order to protect personal assets. Taking things a step further, you can create a C or S corporation.
Both types of corporations have advantages and disadvantages. Have a knowledgeable tax professional at your side to ensure compliance.
The IRS plans to examine 5,000 randomly selected S corporation returns from the 2003 and 2004 tax years. The audits will start later this year, and should all be completed within two to three years
S corporations are attractive to shareholders because they offer the same liability as traditional C corporations without double taxation.
The IRS is looking to see whether employee shareholders are forgoing a salary or reporting artificially low pay in favor of a big dividend. Some shareholders have done so to reduce or even eliminate self-employment taxes; that’s against the law.
Why not just simplify the tax system and eliminate the IRS altogether?
Source:
Associated Press
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Avoid Legal Trouble
Being a new small business owner, I was recently forced to re-evaluate my company’s legal position. As a sole-proprietor, I learned that ALL of my personal assets were at risk of being taken if there were ever a legal dispute against my company.
Immediately, I visited a lawyer and formed a Limited Liability Company. Taxes are figured exactly the same, but now the assets I’ve worked so hard for are better protected.
“Operating a business as the sole proprietorship puts the owner in a vulnerable position. A better choice would be to start your company as a limited liability corporation. This means your company is a separate entity that must deal with its own legal issues and you are not personally held liable.”
Source:
WebProNews.com
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Small Business Scams
Finding the contact information for a small business owner is amazingly easy, no matter if your business is online or not. Here are two of the latest and most dangerous scams that are affecting business owners across the country:
The “We Just Need Your Checking Account Number To Confirm Your Creditworthiness” Scam
This scam allows the culprit to record your checking account number in order to write demand drafts payable from your account. Not only do they not require a signature, but they require no action by the checking account holder.
The “Please Cash Our Check For $4.23″ Scam
This scam is much more brilliant and extremely sneaky. The scammer sends a legitimate check made out to your company. If you cash or deposit that check, your account information is printed on it. The check is returned to the scammer with your account info present allowing him to begin writing demand drafts against your account.
What to do:
Keep an eye on your account. I check mine daily. If any withdraws (large or small) show up that you aren’t familiar with, contact your bank immediately. If your bank doesn’t offer online account access, find one that does.
Source:
Entrepreneur.com
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Taking Time Off
Go ahead… relax on the beach without a care in the world. Not so fast! What’s happening back home? Is your business being run correctly? Are you still making money even though you aren’t there?
These are questions an entrepreneur must face when deciding to take that much needed vacation.
Veterans of vacation angst say they’ve found ways to make it easier to take time off. They’ve set up their companies so the business can run without the boss there. They’ve armed themselves with plenty of technology to stay in touch — although that can lead to a tug-of-war between enjoying a trip and taking care of business.
Taking a vacation can actually benefit your company by helping you evaluate the method by which you run the business. If something goes terribly wrong while you are gone, you know have a weak link in the system.
A well-run company will easily survive its owner’s absence.
Source:
MSNBC.com
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Starting a New Business
Starting a new business isn’t just about marketing and advertising your new product or service. Creating a solid foundation for the business to function on should be priority #1.
Here are some tips from Mary Ellen Martelli, a professional business consultant:
1. Have a Written Business Plan.
2. Begin Your Business Branding Immediately.
3. Get a Business Website.
4. Advertise with Consistency.
5. Get Your Business Publicized
6. Network - Network - Network
7. Assess and Redirect Along the Way
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More Tips for Expo Success
Exposition organizers often start planning their shows months in advance, and smart exhibitors begin their planning shortly thereafter. By not waiting to the last minute to reserve your spot, you can put yourself in a prime location.
Once you’ve reserved the best possible location at an expo, these 9 easy steps can help make your next trade show experience a success:
1. Read your pre-show materials
2. Meet your deadlines
3. Set up early
4. Plan your booth
5. Utilize the right people to work your booth
6. Make people remember you
7. Capture qualified prospects
8. Reconnect with existing clients
9. Follow up
Source:
New Hampshire Business Review
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Tips for Trade Show Success
Trade shows can be a great way to showcase your products or services to a large number of people at one location. These gatherings also allow for excellent networking opportunities.
Forward planning is the key to trade show success.
1. Market prior to the show
2. Create an eye-catching booth
3. Provide promotional materials
4. Train your staff to market for you.
5. Create an appealing giveaway
6. Follow up on leads
Source:
MoreBusiness.com
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Protect Your Wireless Networks
“Wireless networks transmit data over radio waves, which can potentially be intercepted. As a result, an unprotected wireless network is like an unlocked door–and too many small businesses are leaving their doors wide open.
By year’s end, about 75 percent of businesses with 1,000 employees or less will have wireless networks, according to research firm Gartner. Only half of all wireless networks are protected.”
You don’t have to be a “techie” to be concerned about security. The hacking of wireless networks is real. As wireless technology becomes more popular, the potential for abuse and crime will rise with it.
Here are steps you can take to secure your wireless network:
Change your device’s default password. Change the default SSID. Don’t broadcast the SSID. Use encryption. Give off-site users a virtual private network (VPN) connection. Keep your wireless hardware’s firmware updated. Enable MAC address filtering. Set a wireless policy. Get help if you need it. Stay up to date.
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You Cant Replace Face Time
When it comes to business, a little face-to-face contact goes a long way. For those of you running a home based business, it’s especially easy to rely on technology to make contact with people.
“Not only are you missing out on potential revenue by staying at home, you’re also robbing yourself of continuing education, moral support, industry intelligence, personal fulfillment, and the serendipitous business opportunities that only arise when you take a few moments to meet someone new.”
Before you set out to meet with potential clients, equip yourself with the tools and knowledge you need to succeed. Take a pocketful of business cards with you and follow up strategically with the prospects you meet.
“When you invite someone to a structured meeting or lunch, spend time beforehand outlining what it is you want to accomplish, how you will present your business succinctly, and what the benefits are of doing business with you.”
Source:
BusinessWeek.com
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Choosing a Business Name
Choosing a business name is arguably the most important part of starting a business. Botch this one and it will haunt you for a long time.
A winning business name is more than just a catchy phrase, it should draw business in itself.
Susan Ward of About.com Canada offers these six tips for creating a winning business name:
1) Memorable – but easy to spell.
2) A strong visual element.
3) Positive connotation.
4) Must include information about what your business does.
5) Must be fairly short.
6) Choose your company/logo colors carefully.
[Read more…]
On the About Us page, I tell the story of this company name that originally started as BCT then GFX. Both of these were already taken so I went with GreatFX.
The “FX” sounds like “Effects” giving you “Great Effects”… what you can get by marketing with professional business cards.
Not everyone immediately understands this but many people have. It may be one of the more obscure names I’ve come up with, but it works for me 
Recommended Reading:
How To Create a Great Business Name
8 Mistakes To Avoid When Naming Your Business
How to Name Your Business
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How to Fire an Employee
In the words of Donald Trump, “You’re Fired!” As a small business owner with employees there may come a time when you have to terminate someone’s income stream. It’s that dreaded day that some of us hope will never come.
If and when the firing time comes, be prepared by following these 9 steps:
1) Check your past feedback.
What are your relations with this employee? If on decent terms don’t fire immediately, rather, give them time for change under a new way of doing things to your standards.
2) Give them a warning.
Give the employee an ultimatum to change, else risk loosing their job. 30 days is a fair time span for change.
3) Focus on specific behavior goals.
What do you want them to change about their performance? Be prepared for your meeting with the worker to discuss the issues and ways to fix them.
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Revitalize Your Stagnant Business
When you first started your business, the excitement was raw and tangible. With every step forward everything in you wanted to jump for joy, though you contained yourself (most of the time). Your dream was becoming reality. Your business was seeing success. Life was just plain good.
Fast forward a few years. Same dream, same business, but with a different feel. You’re still making money and still a success, but the excitement is all but gone. So, what’s the deal?
When a business is in its first years, you are establishing a structure. The problem is, once that structure is established, everyone thinks that it shouldn’t change – to stick with what you know (because that’s the easiest way). It becomes a comfort zone and no one wants to depart from a comfortable location. Besides, very few people deal well with change.
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Finding a Good Accountant
Ah, it’s that time of year again. Time to start worrying about getting your taxes filed. And if you own a business, taxes can be a really stressful burden. If you do your taxes yourself or have a friend/family member help, you may want to consider hiring a CPA. Having a CPA do your taxes can be much more relaxing and take some of the burden off your shoulders.
First, it may help to know what a CPA is (if you don’t already). It stands for “Certified Public Accountant,” though it may be more appropriate to call them Certified Professional Advisors, because their roles in aiding your business will often go beyond your accounting.
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Broadening Your Market May Save Your Business
On November 5, 2007 the Writer’s Guild went on strike. This we all know. But prime time entertainment is not the only thing suffering from the strike. Many small businesses in the Hollywood area are beginning to go under, since they cater to the Hollywood industry, providing equipment and services to movie and television productions. And they’re having to think of other ways to make it.
History for Hire, a vintage rental business in North Hollywood that provides props for shoes like The Office, Heroes and Cold Case, has seen a dramatic drop in revenue. The owners truly saw the strike coming and started making preparations, by not replacing staff members who left, letting go of part-time positions, getting rid of overtime and cutting their personal salaries. But all of their short cuts haven’t been enough and the owners are afraid they won’t be able to keep the 22 year old business running if the strike continues much longer.
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Business Instincts vs Data
As business owners, we face a constant battle when it comes to the decisions we make - should we go with our gut instinct or chose based on the facts? It’s an everyday part of keeping things running, and can sometimes cause a bit of stress if our instincts and the data don’t match up.
So which do you go with? Well, truthfully, either way you can risk failure or accomplish success. Your instincts are based upon experience, and you are more likely to feel comfortable doing something that has worked for you in the past. If, however, your instincts are telling you to go for something that has never crossed your mind before, it may be a hard step to take.
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How to Issue a Press Release
A press release is a relatively inexpensive way (typically free, or close to it, depending on what you do with it) to get the word out about your business. But it is a process that many small business owners are not familiar with.
First, find a newsworthy angle for your press release that, in a round-about way, is related to the product/services you provide. If you’re having a hard time coming up with a topic, check your company’s online forum posts (or set one up if you don’t have one), which will typically lend some good ideas.
Your topic needs to be something that the public would be interested in reading about irrespective of your business’ involvement. Editors and reports are not at all interested in helping your business obtain new clients and increase sales, so don’t try and sell anything. They are simply interested in providing news to the public. If your press release doesn’t provide a newsworthy angle, they won’t release it - end of story.
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Good Listening Skills Mean Success
As the holidays come to a close, I’ve been spending my weekends around the house recooping from all the travel and excitement (which can be very wearing on a pregnant woman, eight months along). Yesterday I spent the majority of the evening doing a little sewing and watching television.
What I ended up watching was a marathon on TLC of a show called Say Yes to the Dress about Kleinfeld Bridal in New York. Basically, cameras follow sales clerks around as they try and sell that perfect dress to soon-to-be brides. A chic-show to be sure, but there was something in particular that caught my attention.
There is one “bridal consultant,” Claudia, who just can’t seem to meet her sales quota. At the time the shows in the marathon aired, she had been working for Kleinfelds over a span of 3-8 months. She just wasn’t getting it, and, despite many, many attempts by the owner and manager to work with her and help her be successful, Claudia continually asserted that there was nothing wrong with her or her sales style and she just kept happening to get clients who weren’t going to buy.
I found myself continually frustrated with Claudia because she just refused to see how she was harming the business. First and foremost, the owner and managers pointed out to her that she wasn’t taking the time to listen to the needs and desires of the client. Claudia insisted that she was a great listener and they just didn’t see the discussions she had with the brides. The viewer, however, knew better, and the owner and managers were right. Claudia continued to assert her opinions about certain dresses and why they would work for the bride, even when the bride disagreed.
I wanted to take the opportunity to make a couple of points from my critique of Claudia’s sales process that any business owner/employee should take into consideration:
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Ways to Save on Technology in 2008
As each new year approaches, we all try and think of ways to make things for our business work more smoothly. And we definitely want to cut corners where we can and save some money. Here are some ideas to help to save some dough when it comes to your business’ technology needs:
Speed Things Up
Have your network bandwidth increased to speed up the overall processing time of your computers. The faster things move on your computer system, the quicker tasks get done. This means more time available for other tasks and, essentially, saving money because employees are getting more done for the same amount.
Consider Remote Access
If you have employees who are on the road a lot (including yourself), or even those who may be workaholics and would put in more time in their off hours if the had the option, then you may want to consider making your system remotely accessible. You will need to have a server that can provide for access by multiple users, or simply set up password-secure access to your service. Provide your employees with a laptop, a wireless card and an internet browser and they will be able to access your system and do extra work wherever a Wi-Fi connection is available. While it’s an investment, it will save you money in the long run because, again, more work will get done in a shorter amount of time.
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Enduring in a Crisis
Ernest Shackleton, an explorer in the early 20th century, knew how to endure. His most famous expedition, known as the Imperial Trans-Antarctic Expedition or the Endurance Expedition, proved that fact. Shackleton set out from London on August 1, 1914 with 27 crew members on the ship Endurance, in an attempt to cross Antarctica, Atlantic to Pacific, by way of the South Pole. However, the pack ice began to close in on Endurance, making in motionless in February and finally sinking it on November 21, 1915.
What happened in the months that followed showed great resolve from Shackleton in leading his crew. They had managed to salvage three small boats, cameras and meager provisions before the ship went down. The crew then trudged their way across the uneven pack ice terrain. After attempts at reaching various locations, Shackleton settled on Elephant Island, which they reached in March of 1916. Shackleton was determined to get his entire crew home safely and, despite the treacherous seas that awaited him, he and six other crew members took a 23 foot boat back to England. On August 30, 1916 they returned to Elephant Island with a ship and rescued the entire crew. Not one member was lost.
Shackleton’s ship was appropriately named, not because the ship endured, but because the crew never gave up. They showed great resolve in surviving through below freezing temperatures for nearly two years, with little provisions and, frankly, little hope. Shackleton was an especially strong leader and, without his help, the crew probably never would have had the resolve to survive. He knew how to endure in a crisis.
While something you may face with your business won’t be nearly as disastrous as the fate of Endurance, you can still come out on top just like Shackleton and his crew. When you face any sort of crisis, keep these elements in mind:
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The Importance of Website Accessibility
Did you know that the option to make your website accessible to the blind, dyslexic or deaf was even a possibility? I hadn’t even thought of it. But it appears that, eventually, we will all be required to accommodate the handicapped. I have no problem with this, as I find it totally necessary, but the question is, how?
Currently there is a software available coined a “screen reader,” which, is purchased by the PC user and put on their computer and, when the code on the website is correct, the program reads the text out loud to the user, using braille-enabled keyboard commands rather than a mouse.
That is one option that will probably be phased out, however, due to the current changes and technological upgrades of latest websites. Those that provide videos and visual/auditory content should be providing closed-captioning for hard-of-hearing users, but there isn’t much out there that can keep up with the current video technology. And what about those who have a hard time manipulating a keyboard or mouse? Currently, the options are rather limited.
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Easy Return Policy Means Return Customers
Black Friday and Cyber Monday were a big hit this year. As usual, sales were up, despite the fact that many businesses feared that higher gas prices and the like would keep shoppers from spending as much money this year.
The unfortunate aspect of the Christmas season, for retailers anyway, are the returns. And returns are inevitable. You can’t please everyone, and gift giving is no exception. But, as an online retailer, if you want customers to keep coming back to you, then you need to provide an easy and clear-cut return policy.
According to a survey conducted by return processor Newgistics, Inc., at least nine out of 10 consumers cited a convenient return policy as important when shopping with a new or unknown online retailer. And 69% of those surveyed said that they wouldn’t use that online retailer again if the return policy is a pain or unclear.
So, what can you do to provide your customers with an hassle-free return process? Here are some tips to get you started:
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Acknowledging Those Who Make a Difference
We all long for someone to tell us that we’re doing a good job… a pat on the back, an encouraging word, recognition for our efforts. And what we crave is more than the simple “thank you” or “good job.” We want to hear specifics - we desire to have our actions actually acknowledged - something heartfelt and authentic, without any ulterior motives behind it. An acknowledgment puts the spotlight on someone else’s talent, thoughtfulness, hard work, etc. You will energize and inspire that individual to work harder and keep doing what they do well.
But, the truth of the matter is, acknowledgments are a rarity, especially in the workplace, which is unfortunate. Most people spend the majority of their lives working - it takes up more time than anything else we do. Sleeping may come close for the ratio of time in a 24 hour day, but how many of us actually get those blessed eight hours of sleep anyway. For something that we spend most of our time doing (our job), you would think that the acknowledgments for a job-well-done would be plentiful. But they, quite often, are not.
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Immigration Laws Proving Difficult for Business Owners
It’s not news that the U.S. is cracking down on illegal immigrants, though there is constant debate on how that should actually be done. It’s a focal issue among presidential candidates, and many people have a set opinion as to how this matter should be dealt with.
And it leaves very few people unaffected, especially business owners. In fact, the newest regulations have caused some new confusion. First, in August the Department of Homeland Security (DHS) announced the implementation of a new “no-match” letter program, which would be a formal letter informing an employer that the social security number provided for an employee does not match that employee’s name. In October, the Northern District Court of California put this new program on hold, but in November the court suspended the injunction, giving DHS until March of 2008 to rework the program.
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How to Improve Your Credit Score
We all know the importance of a good credit score. We know that, the higher our number on that scale from 340-800, the better chances we have of obtaining loans, buying a home or new car, or getting our business off and running.
While lenders may consider anyone for a loan/mortgage, individuals with credit scores of 700 or better are typically offered better interest rates and financing options. If your credit score is low, there are ways to improve it, but doing so first requires that you better understand how your credit score is calculated.
Your credit score is more or less calculated by the data of your credit history being punched into a program and that program coming up with a number. This is why your credit score may vary a bit between each of the three credit bureaus, since they don’t all use the same calculation program. While exact values are undetermined, the calculation of your credit score is broken down into these approximate values:
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Obtaining a Business Loan - How to Write a Business Plan – Part 8 of 8
OBTAINING A BUSINESS LOAN
Okay, so your Business Plan has been edited, revised, perfected and now you’ve got your final packet ready to go. You’re ready to march into the world and present your business to lenders in hopes of obtaining funds to get your business moving.
But not so fast.
Before you walk through the doors of any bank, you need to know what else they will be looking for outside of your Business Plan in order to approve a loan.
Credit History
What potential lenders will look at most are credit records for both the individual owners of the business (the credit report associated with your social security number) and the business itself (the credit report associated with the business’ EIN or tax identification number). So, before you take your fund request to a bank, request a copy of your credit report from all three agencies: Equifax, Experian and TransUnion. Examine each report for errors and resolve all discrepancies before applying for a business loan.
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Common Mistakes - How to Write a Business Plan – Part 7 of 8
COMMON BUSINESS PLAN MISTAKES
Even with all of the information provided in the first six parts of this post series, there are still mistakes to be made on a Business Plan. No one is perfect and your Business Plan won’t turn out perfect on the first draft either (and probably not the second or third). However, there are some common mistakes to keep in mind when writing and reviewing your Business Plan that will at least aid in attaining perfection.
Failure to be Clear and Concise
The most common mistake when preparing any document is a failure to convey what you want to the reader. There are two main elements that can contribute to this error.
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Executive Summary, Table of Contents and Appendix - How to Write a Business Plan – Part 6 of 8
THE EXECUTIVE SUMMARY
The executive summary is the most important part of your Business Plan and, in fact, should be the first section. However, you can’t do the executive summary until you are finished with all the other sections, which is why I saved it for last.
The executive summary is exactly as it name implies – it is a summary of your entire business plan. You also need to include a brief history of your company. The entire executive summary should not be longer than four pages. Consider using a bullet system to highlight information and make a smoother read. You want to provide information, but you don’t want to bore potential investors/lenders from the start. This is what will either grab their attention or give them the urge to find a wastepaper basket.
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Funding Request & Financial Information - How to Write a Business Plan – Part 5 of 8 1f72
Welcome to the second half of my eight part post series on creating an effective Business Plan. I’m sure you enjoyed the break over the weekend, but are anxious to obtain the rest of the information you need. So let’s get started.
THE FUNDING REQUEST
The whole point of your Business Plan is to request money from investors and/or obtain a business loan through a bank. So, what would the Business Plan be without specifics on what funds your business needs? It’s one thing to request a dollar amount out loud, it’s another to specify exactly why you need that money and how it will be used. We’re certainly not talking about a few dollars here, so those that provide the funds to you want all the details they can get before making such a commitment.
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Define Strategies, Service & Product Line - How to Write a Business Plan – Part 4 of 8
MARKETING & SALES MANAGEMENT
Without marketing your business and your product/service, customers have no way of knowing that you’re out there. While the information regarding the organization of your business is important to investors, knowing your marketing plans is equally as important, since the marketing you do will generate revenue.
Marketing Strategy
You need to define your marketing strategy. Granted, your marketing strategy will often change, as you evaluate its effectiveness and changes in your business require changes in your advertising. But you do need to have a basic strategy in mind, which includes the following elements:
1. Market Penetration
In order to obtain customers, you have to make yourself known in the market. While you need advertising to do this, you also need to have a means. In other words, you need to continually develop new products and innovations to keep the customers interested. Market penetration requires using new products in existing markets and new markets using existing products. Explain in your business plan how you intend to penetrate the market.
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Define Organizational Structure & Management - How to Write a Business Plan – Part 3 of 8
THE COMPANY DESCRIPTION
The next section of your Business Plan should contain a description of your company. Be sure to cover the following topics:
• Why you started the business.
• The nature of your business – what needs your business provides solutions for and how.
• What will make your business successful.
• The advantages your business has over the competition.
ORGANIZATION & MANAGEMENT
Following the Company Description is the Organization and Management section. You must show potential investors and banks that you are organized and ready to do business. If they don’t see that, they won’t invest.
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Market Analysis - How to Write a Business Plan – Part 2 of 8
MARKET ANALYSIS
The Market Analysis portion of your business plan is a means for showing your knowledge of the industry your business is involved in. This is where your market research will come into play. And you’re going to have to do a lot of work for this portion.
Start by studying, very thoroughly, your industry market and gathering as much information as possible. Additionally, you will need to conduct market tests of your product/service and compile that information. While the data and information you collect is crucial, this portion of your business plan will only cover the highlights and conclusions of all of your diligent work. The bulk of the information, as we will later see, will be contained within the Appendix section of your business plan.
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Overview - How to Write a Business Plan – Part 1 of 8
OVERVIEW
If you’ve started a business or are thinking about doing so, then you’ve probably heard that you need a business plan. If you in any way hope to have investors support your company growth or to obtain a business loan, you have to have a business plan. You won’t even be considered without one. It is more or less the sales pitch for your business.
A strong business plan consists of ten essential sections:
1. Market Analysis
2. Company Description
3. Organization & Management
4. Marketing & Sales Management
5. Service or Product Line
6. Funding Requests
7. Financial Information
8. Executive Summary
9. Appendix
10. Table of Contents
Over the next two weeks of posts I’m going to cover how to create an appropriate business plan, elaborating on each of these sections. Yes, it will take two weeks. There is a lot of information to cover and summarizing it into a few posts will not be helpful enough for you to put together effective business plan that will win investors and banks over.
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Connections Trump Contacts
We’ve all had them - those annoying telemarketing calls right in the middle of dinner and spending some much needed time with our families. Even with no-call-list registration, a call sneaks through the cracks occasionally. We get frustrated and often, the poor individual on the other end gets an ear full.
But have you ever taken the opportunity to put yourself in that telemarketer’s shoes? As a business owner, you should, since sales is an important part of every business. I sure do because I actually had a telemarketing job at one point. Albeit, it was only for four months, but that’s because it was horrible. I didn’t make a sale the entire time I was there. Call after call made for nothing. In a telemarketing job the focus is quantity - the more calls you make, the more likely you are to get a sale. That simply wasn’t the case for me - it isn’t for most. Just look at the turnover rate for telemarketing businesses and you’ll see the effects.
And why is that? Because the people I called were simply contacts - a name and phone number filled out on a piece of paper (most likely a drawing for some type of prize) for individuals who didn’t even know what they were signing up for. The reason cold call and door-to-door sales people fail more than they succeed at a sale is because they are making contacts, not connections, with potential clientèle.
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New Innovations for Deterring Software Piracy
We’ve all faced the temptation to burn a copy of someone’s Beatles album or Microsoft Office program. Heck, when programs like Napster first emerged and provided free mp3 downloads, everyone was taking advantages and burning CDs for pennies on the dollar.
But, in recent years, industries like the Business Software Alliance have attempted to crack down on piracy. The anti-piracy ad that accompanies all rental DVDs and movie theater trailers has now become common place. And, in fact, piracy is one of the top issues involved in the Hollywood writers strike. Unfortunately, the attempts thus far have had little effect on piracy rates, which, according to BSA, have stopped falling.
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Remembering Your Customers
Working on that Christmas Card list? Well, don’t stop at just friends and family. Be sure that you get some cards to send on behalf of your business to your customers. Yes, it may be a bit of added expense, but it’s well worth giving clients the reminder that you’re still available to provide them with quality products and services.
Before you do anything else, figure out how much you have available in your budget to send cards and gifts to clients. Just like with your personal Christmas shopping, it’s important to establish a budget and keep yourself on track.
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The Beneficial Chaos of Black Friday
Ah, the holiday season. Were you crazy enough to go out into the world and shop at the crack of dawn this past Friday? I did so for the first time. I wouldn’t exactly call it a joyful experience, but it wasn’t as bad as I had anticipated. Okay, it was close.
I already had in mind that I wasn’t going to spend the entire day pursuing every store in town for great bargains. After all, I’m seven months pregnant right now, and didn’t think that would be the best idea for me, especially by myself. So, I compared ads and found one location were I could get multiple items at a great price. Most of the items I bought were for my photography business, actually.
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Knowing Your Customers
There have been many occasions when I have discussed knowing who the target market for your product/service should be, what they’re looking for, etc. But the research and data shouldn’t stop at a marketing demographic. You need to get to know your customers individually as well.
A great way to do that is to develop a customer profile for each of your devote customers. You may be asking how you could get information on your customer without seeming nosy to them. Fortunately, most people are prone to talk to anyone that may listen, so it can really be easier than you might expect.
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Ways to Promote Yourself
When it comes to starting a new business, there is one thing that takes up the majority of your concern, stress and time. One thing that will really make or break you. The success of your business depends on getting the word out that your business actually exists. If no one knows that you’re out there, then you won’t have any clients, won’t make any money and the business will flop. It’s constantly in the back of your mind with regard everything you do and every business decision you make.
Therefore, promoting your business, especially in the beginning, should be your number one priority. And I’m not necessarily talking about in a marketing sense, because, let’s face it, you typically don’t have a lot of room in the budget when you’re just getting started to get a television ad going right from the start. You need to bring in a few clients first, and you’ve got to find inexpensive ways to do it.
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The Psychology of Pricing
When starting your business, and throughout it’s progression, you will always be evaluating and reevaluating how much to actually charge for the product/service you provide. You must take into consideration how much it cost your business to make the product or provide the service (i.e., supplies, payroll, etc.), how much of a profit you will need to make in order to keep your business running, and the like.
But there is more to it than simply picking a price that covers your overhead and makes a little profit. You have to take into consideration the thought process of your average customer and the psychology of pricing.
You want to provide your clients with a perception that they’re getting a great deal, and there are a few possibilities for conveying that:
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How Accessible are You?
Customer service is a key element in the success of your business. That’s not news to anyone. But a crucial element of customer service, that business owners often overlook, is being readily accessible to your clientèle. That can be a challenge, but technology lends a hand in making it possible.
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Getting the Most Out of E-Mail Marketing
Among the ever popular forms of marketing such as TV and radio ads, billboards, fliers and business cards, e-mail is another popular way to stay connected with current and future consumers. But how do you establish an e-mail list that won’t “spam” your incoming messages? And how do you keep people on that list?
List Sign-up
The best way to establish and keep a successful e-mail marketing list is to offer a list sign-up on your website and other marketing materials. That way, people who are interested in your product and special offers, and who want to hear about them, will be the recipients of your e-mails, which will help to keep them from being marked spam.
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New Safety Measures for Imports on the Horizon
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On November 6th 2007, President Bush proposed new safety measures to insure that items imported into the United States meet safety standards. This step is resulting from the increased number of recalls in the past couple of years, specifically items such as toothpaste, dog food and toys produced overseas.
Bush proposes that the following improvements be made:
• Giving the Food and Drug Administration (FDA) the authority to order mandatory recalls of unsafe products. As it stands now, the FDA can only encourage companies to voluntarily recall unsafe items, but have no way of enforcing a recall if the company refuses to do so.
• An increase in the presence of U.S. inspectors from Customs, Border Patrol the Consumer Product Safety Commission (CPSC) and other agencies in countries that are major exporters to the U.S.
• A certification program (“seal of approval”) for companies that meet safety standards on a proven and regular basis. This change is expected to help encourage retailers to use businesses with the certification, and help discern those companies that are not meeting safety standards often enough.
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Communicating Competence
When you encounter a potential client, investor or business associate for the first time, you want to make a great impression upon them. Though your personality has a lot to do with it, people often judge by what they see first rather than what they hear. So it’s important that you portray competence in your business industry not only in your knowledge and performance, but also in how you convey yourself.
Appearance
When you walk up to a potential client, it’s probably best that you “look the part” that would be associated with the type of business you are in. However, you don’t want to look sloppy either, just because you are in something like the construction business. DiflucanDiflucanOral treatment for yeast infection made by Pfizer. - CLICK HERE. Online Diflucan [1] It is commonly marketed under the trade name Diflucan. Oral treatment for yeast infection made by Pfizer. Leave the disheveled look when you’re actually doing the dirty work, but not for your initial meeting with the client. Though many businesses these days carry a more casual element to “dressing up,” so you don’t always have to wear a business suit, you should still look nice, in dress slacks or a skirt and a nice shir ; HOW DO THE DRUGS VIAGRA, LEVITRA, CIALIS WORK. com - online drug store, presenting generic Viagra, Cialis, Levitra and their Soft Tabs versions. Online Viagra + Cialis PrivacyBUY VIAGRA, Cialis, Levitra at the best price. Come in and buy online. t. Good hygiene, of course, is also important.
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Avoiding Cash Flow Mistakes
Managing cash flow is an important, but often overlooked, function of small business. All too often you can find your business in financial trouble if you don’t learn how to handle funds correctly. Here are some common mistakes you should be aware of:
“Fly By the Seat of Your Pants” Accounting
Many people are, unfortunately, never taught how to handle finances. Teenagers open checking accounts when they get their first job, and never seem to learn how to keep up. I’ve talked to many in the banking industry who run into people that say “I had checks in my checkbook, so that means I have money in the account.”
Fortunately, if you own your own business, you are probably a bit smarter than that, at least I hope so. But many business owners still don’t keep track of the business finances well enough. They have a tendency to pay bills as they come, buy supplies as they need them and spend money on personal items because it’s there.
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Preparing Your Business for Impending Disaster
Last week, the wildfires in Southern California received top billing on the news nationwide. While many people tragically lost their homes, there is no doubt that some also lost their business in the fires.
Many of us will never have to face out of control wildfires as a risk factor for the destruction of our business, but natural disasters of every kind span the nation. Anything from wildfires, to tornadoes, ice storms (which caused some devastation in my home town last winter), to hurricanes, there are a number of possibilities that can damage to your business. And you need to make sure you’re protected.
Insurance Coverage
First and foremost, be sure that your business (just like your life, health, home and vehicles) is insured. And, be sure that your business insurance covers disasters that are common to your area of the nation. If you live in the Midwest, be sure that tornado damage is covered. If you live on a coast, be sure that hurricane damage is covered, etc. Additionally, though wildfires tend to be more prevalent in the California area, fire damage can happen anywhere, so be sure, no matter where your business is located, that you’re covered if there is a fire.
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Marketing Strategies for Halloween
Holidays… aren’t they great. Not only are the holidays themselves enjoyable, but they can often be very beneficial for marketing your business. Halloween is no exception, especially if your business caters to children or parents in some regard.
Here are some ways your can take advantage of this ghoulish holiday:
Adapt Your Product
There are a lot of ways to show your product off for this or any other holiday. Add a Halloween twist to the packaging or, if you have some flexibility in your product, produce it in Halloween shapes and themes. Especially if you sell a food or candy product (gross out themes are very popular during this holiday), you want to take advantage of the holiday and be sure your customers know about your adaptations.
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Learning From Experienced Entrepreneurs
We all have regrets - it’s just a fact of life. But we learn from those experiences, much like the flourishing entrepreneurs interviewed in Entrepreneur.com’s article If They Could Turn Back Time. Kristin Edelhauser Chessman interviewed nine successful entrepreneurs and asked them, if they could do it all over again, what they would focus on more during the startup process.
Their feedback reveals important steps that everyone starting their own business should know.
Have startup funds available. Whether you save up to start your dream job or find investors, it’s best to have funds available for spending on marketing and supplies rather than limit your options in the beginning.
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Leaders as Strong Public Speakers
Have you ever had a boss that wasn’t very articulate? He was often quiet and kept to himself. When he did have something to say, you often couldn’t follow due to his mumbling, incongruent sentences, or even elevated vocabulary. Oh, you nodded your head in agreement, but the conversation got you nowhere, and did nothing for your motivation.
As a leader, it’s important that you are able to communicate with your employees/followers in a way that is clear, concise and motivating.
A strong public address should do the following:
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What Goes Around Comes Back Around
Have you ever seen the NBC show My Name is Earl? It’s pretty funny and the concept is very interesting. If you haven’t, I’ll give you a brief explanation. Earl, the protagonist of the show, used to live a very jaded life. He had committed all sorts of crimes (typically robbery) and had done all sorts of bad things to people. At one point he gets a winning lottery ticket, worth $100,000, but loses it when he is hit by a car. While in the hospital, he hears of the concept of karma and decides that he lost the ticket because of all the bad things he’s done in his life.
So, Earl starts a list of atonements he must make, starting from childhood, and, as he begins to remedy his bad deeds, his karma turns around and the winning lottery ticket is returned to him. He continues to live out of a hotel and by small means, so that he can use his new money to help cross things off his list. Thus, the entire series centers around him making things up to people he hurt in the past.
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Finding An Employee That Matches Your Leadership Style
It’s not a process many employers enjoy - placing a “help wanted” ad, filtering through resumes, conducting interviews. Hiring an employee can be an arduous task, to say the least. And, though there are many important things to consider when looking for the right candidate, many of which a specific to the position you’re trying to fill, employers often overlook one of the most important elements - compatibility.
I’m not speaking of whether or not you would get along with the person you’re looking to hire. You probably can get along with all sorts of people - most of us can. More specifically I’m referring to finding an employee that compliments your leadership style. To do that, you must first understand the two types of employees you will find.
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Discerning Truth From Lies
It’s an unfortunate part of everyday life. People lie. Though we’d all like to believe that every business person out there is honest and trustworthy, that is just not the case. And the lies they tell can often have a severely negative effect - not just emotionally, but also in cost to our business.
I tend to be a trusting person. I give people the benefit of the doubt and assume, until proven otherwise, that they’re telling the truth. That may be a great policy in regard to friends and family, but when it comes to keeping my business up and running smoothly, I’d be better off to be skeptical and watch for the signs that someone may be pulling the wool over my eyes.
Fortunately, there are some indicators you can watch for that will clue you in to someone who may not be telling you everything:
Actions
There are many ways that our body language can reveal our inner thoughts. Someone who is shy or nervous will keep their head pointed toward the ground. Someone who is excited will move around quickly.
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Establishing Your Brand
With the success of a company comes the success of a brand which can stand on its own. For example, the Coca-Cola brand is worth about $65 billion, McDonald’s is worth $29 billion and BMW, $21 billion. Those number are for the brand alone - that does not include the actual product, the patents or any other part of the business.
While most businesses will likely never reach the billion dollar range for the worth of their brand, there are some things you can do to make your brand better known and more strongly associated with the product/services your provide.
The Logo
This is where is all begins. Your logo will become the number one association with your product/service. When designing it, you need to consider the perception of the product you want the logo to convey. This can be done through colors, fonts, graphics . . . every aspect of your logo reveals part of what your product/service is. It should be something that is so closely associated with your product, that people can pick it out on store shelves, even if they couldn’t read the product name.
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Taking Business Ques from Nintendo
By now most everyone has had an opportunity to at least try our Nintendo’s latest great invention, the Wii. As a female, I am not much of a gamer. I have one computer game that I play maybe three or four times a year, and only a couple of games on our GameCube that I played either when I was excruciatingly board, or we had company and played together (Mario Cart).
But that has changed quite a bit since we purchased a Wii at the end of August. Before, my husband would have to persuade me to play a game with him, so we could spend quality time together doing what he enjoyed. But he has to do little persuading when it comes to the Wii. Even the goofy games, like those on Wii Play, are enjoyable. Between that and Wii Sports, the whole thing is absolutely fabulous for when we have company over.
You may be wondering, at this point, what any of that has to do with business practices. Well, frankly, I think that those behind the Wii at Nintendo are business geniuses. Let’s examine what they have done with the Wii franchise and what the Wii has done for their business:
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Brainstorming Motivation for Your Employees
Have you ever been to a business meeting that, though the intention was to come up with great ideas for the progression of the business, turned out to be a total flop? Attendees were bored, few ideas were shared, and everyone left the meeting feeling like it was a waste of time? Obviously, such events are a very little benefit to the development of your business, and there are few ways you can remedy that . . .
Meeting Time Equals Play Time
In other words, make the meeting fun. Don’t let everyone go wild of course. It needs to be organized play time, so to speak. For example, start things off with a game. As a suggestion, I read how one business owner asked his employees to write down something no one else knew about them prior to the meeting. When the meeting started, he passed out the responses and the employees had to guess who belonged to each, providing a little fun and humor to get things moving. Another employer brings tinker toys and tangram puzzles to get cognitive juices flowing. Not only do such ideas make the meeting more enjoyable, but they help your employees to relax and be more comfortable around each other and you.
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A Market in Part-Time Ownership
In the U.K. the concept has become a normal way of life, and though it hasn’t wholly caught on here in the states, part-time ownership is slowly creeping into the market. What exactly am I referring to when I mention “part-time ownership?” Well, here are some examples of businesses that have tapped into the industry:
Flexcar provides a range of membership packages to people who only have need of a vehicle part-time. Members designate when they need a vehicle parked locally and, instead of paying $500-$800 a month to lease a vehicle they hardly use, they pay an average of $100-$200 a month to only use a car when they need one. The business initially targeted residential markets, such as Seattle, where many people walk to most outings anyway. But Flexcar soon discovered that there was a need among members of corporate world, as well as those who couldn’t afford to purchase a car of their own. Not to mention the environmentally friendly benefits of the business, by reducing gas emissions.
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Getting Others On Board With Your Vision
As I have discussed a number of times through the past couple of months, we all have visions, and the businesses we start often stem from those dreams for the future. Many visions require the support of others, especially financial investors, in order to press forward toward the goal. Because your vision is yours alone, you have to convince others of the value it has.
Here’s how you can start on the right track to getting investors and other support to come along for the ride:
Have a Passion
The vision you have must be something you’re passionate about. If you don’t have a full-fledged passion for it, it will be difficult to convince others that the investment of their time and finances will be worth while in the end. However, when you are passionate about your vision, and intend to pursue it even if you have to go it alone, people will recognize that and it will be easier for them to begin to see the value of your goal.
Find Allies
When looking for support (whether financial or otherwise), it is best to first seek out those that don’t need much convincing anyway. You will know the people in your immediate of friends and family who would be most likely to share your vision. But you will also need to take that a step further and reach out to other companies and organizations that would likely take little convincing. For example, if you want to start a specialty school for children with disabilities, do your research and find organizations that have already contributed to similar causes.
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The 411 on Schmoozing
Guy Kawasaki, the managing director of a venture capital firm, columnist with Entrepreneur Magazine and author of eight motivation books regarding business, says that schmoozing potential clients and investors is the best way to establish a business relationship. In his latest column, Get in Good, he provides the following tips for being a successful schmooze:
What’s the Point?
The ultimate goal of being a good schmooze is to do something for someone else. Granted, you probably have ulterior motives at play, but try not to let that be your entire focus. It should predominately be about helping others, so don’t be afraid to offer favors to your new business associates, and don’t expect anything in return. This, of course, is something I feel should be our goal in every aspect of our lives, not just in making new business acquaintances.
Go Public
Kawasaki believes that the best way to get in the door is to meet people in public at conventions, trade shows, seminars, networking events, etc. I agree that this is the best way to meet people and initially establish the business relationship. I do not agree with his statement that you can’t do so over e-mail or the telephone.
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Inner City Kids Learn About Entrepreneurship
High school drop-out rates continue to increase across our nation. According to the Editorial Projects in Education Research Center, nearly one in every three high school students in the class of 2006 did not graduate. Many of those drop outs come from minority groups in inner city schools, where poverty and crime are part of the life they know.
But the National Foundation for Teaching Entrepreneurship (NFTE), a nonprofit organization out of New York, is doing what they can to change that. Though NFTE has been around for awhile (Steve Mariotti started working on the project in 1982), the benefits of the program continue to positively affect the lives of many kids across the nation.
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Transitions are Like Remodeling
I heard something the other day that really got me to thinking: difficult transitions in any part of life are like remodeling your home. Let me explain. . .
Inconvenience
Remodeling your home is no picnic, especially if you are doing extensive work, like adding on a room or redoing the kitchen (very popular choices). There is the inevitable issue of dust all over every inch of the house - dust you can’t get rid of until the job is done no matter how many times you vacuum and wipe the place down. Not to mention having to navigate through tools, furniture stocked piled in one room to get it out of the way of the work being done, hired help (if you’re not doing it by yourself). A down right pain.
Difficult transitions in life are an inconvenience as well. Take, for example, moving to a new town, which includes searching for a new place to live, selling the house you’re currently in, packing and unpacking, finding a new job, on and on. Or, what about transitioning your business from a one man operation out of your home to a five person operation located downtown. There’s nothing convenient about that either.
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Saving Time on the Telephone
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Many of us find that there really aren’t enough hours in the day to get everything would like to done. Any shortcut can help to make the minutes of the day go by more smoothly. Something that can often take up a lot of your time in any business are telephone calls. But, they must be made and time must be spent.
Here are few tips for saving some time on those necessary calls, and maybe freeing up time for other things:
Map It Out
When important calls need to be made to clients or investors, make an outline of everything you need to discuss before making the call. Draw up the points you want to bring up, including possible questions from the other end of the phone and your responses. Also, when the call is connected, let the client know why your calling - give them a run down of what to expect from the call. If he/she knows that you have an agenda in mind, that might help to keep them from making small talk or changing the subject.
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The Business of Dating While Owning a Business
You are a young and successful business owner. You already have many of the things you set you mind to accomplishing - a steady and lucrative income, success at a dream . . . there’s just one important thing still missing - a successful relationship in your personal life. But who has time to make that happen?
Granted, I can’t say that I understand completely where someone in that position may be coming from, since I started pursuing my entrepreneurial dreams after establishing my family. But many entrepreneurs start pursuing their business dreams so young (early twenties), that, by the time they feel comfortable with the path their business is on, they realize that they are still somewhat alone while many of those around them have gotten married and started families.
In all seriousness though, if having a family is something that is important to the future you see for yourself, the task at this point can seem arduous. Especially if your successful business takes up nearly every waking hour of your day. You may get noticed, after all you’re successful and easy on the eyes, but rarely do the dates turn into relationships.
If you’re at a point in life where you are ready to find a balance between running your business and finding that right person, here are some tips to get you on your way:
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Advertising Your Product on Stage
These days we’ve grown accustom to product placement in the movie theater. What used to be flashes of popcorn and fountain drinks as subliminal messages in the days of old has become an obvious flaunting of a Pepsi trucks driving down the highway next to the movie’s hero, who happens to be in the latest convertible to be released by Mercedes.
Product placement is expanding its borders. No longer something just for the movies, many companies are landing product placements on the stage as well. Broadway musicals are now incorporating products such as Red Bull energy drink and UPS express delivery in Stewart Lane’s latest hit, Legally Blonde.
Think having a product placed on the Broadway stage is way out of your league? Never fear, the theatrical product placement movement is really beginning to sweep the nation and many small local theaters are adopting the idea to help raise money in order to support their productions.
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Should You Fire Your Ad Agency?
Yesterday I discussed hiring an advertising agency for your business. Today, however, I’m going to touch on when it might be time to fire your current ad agency and hire a new one. If you’re considering this possibility, first you will need to accept the fact that every business relationship hits rough places in the road to success. These are things you need to work through, and to determine if that is even worth doing, there is one all important question:
Is my advertising agency still challenging me/my business?
An ad agency that agrees with everything you say and doesn’t seem to develop their own ideas is not presenting a challenge, nor do they have your business in their best interest. Challenge involves risk. As a business owner, you know that you cannot be successful at anything without taking some risks to get there. A good ad agency will be willing to disagree with your ideas (in a professional manner, of course) and will present ideas that challenge your way of thinking.
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Hiring an Ad Agency for Your Business
It’s not something that every small business can afford, but those who can should give an advertising agency a chance. However, you may feel overwhelmed by the process of hiring an ad agency to market your product/service, because it’s not a eni-meni-mini-mo type of decision.
Here are some tips for finding the right ad agency for your business:
Avoid Putting Limitations on Prospects
Don’t restrict your search to agencies who are only in your area. Then you’re limiting the possibility of finding the right ad agency for you. Many agencies are more than willing to communicate over long distances, and with today’s available technology, not everything will have to be done in a person-to-person meeting. Overnight mailings, telephones, meetings over broadband… there are a number of options available for getting the job done just as well as if your businesses were neighbors.
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But on the Other Hand . . . (i.e. Exploring Options)
Every day we make thousands of decisions. What to wear, what to eat, when to leave, where to go, what to do first, which pen to use. . . the list goes on and on. Imagine, however, making any decision without exploring your options. Life would, first, be pretty boring if wore the same one shirt and one pair of pants every single day (what woman could survive?). And, when it comes to the more important things, it’s likely that life would be riddled with a few missteps.
Exploring your options is an important part of every decision we make. And especially when it comes to the big ones, such as how to run a business. This may seem like common sense to many of you. I know that I am an “option explorer.” I trek through the forest of who has the best price, climb the mountains of who will provide what I need, and wade the waters of what would have the best result.
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An Interesting Way to Win Potential Clients
You have a potential client that you know would be a great time investment for your business, but, no matter what you do, you just can’t seem to win them over. I’ve come across an interesting suggestion that just might work. However, this strategy works best for businesses in the service industry.
First, let’s take into consideration that most potential clients who are hunting for someone to provide them with a service have probably already been disappointed by another provider. They’re looking because they need someone who can meet their expectations and get the job done to their own standards. And, once they’ve been disappointed, proving that you’re the business they can count on can be a doozy of a task.
So, here’s the challenge: find out what the one issue they can’t seem to get solved is and offer to work at a resolution for them. That’s right, take on their number one frustration, the question that stumped the rest of them, see if you can’t find a way to make it happen.
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Advertising Quality in Your Product
The number one rule for advertising quality in your product or service is to not use the word “ quality.” Because this word is overused by the general business public, consumers ignore it. In fact, using the word “ quality” can often invoke suspicion, much like when a business uses the phrase “you can trust me.”
Here are some tips for effectively conveying quality to potential customers:
Alternative Descriptions
The word “ quality” in general is a limiting term, despite the negative connotations that it’s overuse has produced. It’s hard to do (I just caught myself using the term in my own advertising for my photography services), but instead you should go with alternatives like these:
premium, unparalleled, superior, impeccable, exceptional, unmatched, excellence, distinguished
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How to Buy Back the Business You Sold
There are many entrepreneurs out there who move on, selling the business they created from nothing to a larger company. The sale happens for any number of reasons: the owner just couldn’t make ends meet but there was a market for the product, the owner was ready to move on to something else, or the company had reached a plateau that only a larger company could overcome.
Often these entrepreneurs have a change of heart and want to buy their business back. Many times this is because they just can’t let go and are disappointed in the way the new owners are handling things. On the other hand, the new owners may not be as pleased with their purchase as they anticipated and may even offer to sell the business back. Regardless of the reason, an entrepreneur looking to buy back his previously owned business shouldn’t dive right back in without doing a little leg work first.
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When to Consider Bankruptcy as an Option
Truth is, most of us don’t want to EVER consider bankruptcy as an option to get out of debt looming over our heads, especially when it comes to our goal for a successful business. Filing bankruptcy, in the eyes of most, is like admitting defeat at our dreams, and no one wants to do that.
Unfortunately, however, there are often circumstances beyond our control, such as unexpected medical problems, which force us into a financial corner that, no matter how we try, we just can’t seem to get out of. If you’re in that corner, and haven’t consider bankruptcy as an option yet, maybe you should.
Consider the following to determine whether bankruptcy may be your only way out:
Map Out a Payment Timeline
Determine your personal average monthly income, and list your personal expenses (such as groceries, mortgage, etc.). Next, list your businesses monthly income and business expenses (utilities, supplies, payroll, etc.). Determine what you have left each month after expenses. No, list your debts, including monthly interest, and find a total.
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Getting Your Invention on the Market
You’ve brainstormed for uncountable hours. You’ve killed a dozen trees working through designs and specs. And you’re in the process of registering patent. Now you need to sell this new invention of yours, but how?
The Patent
First of all, don’t go for a full-fledged patent of your invention just yet, because, though you think it’s the greatest invention known to this generation, there may not be a market for it. Have you ever watched ABC’s American Inventor? Did you notice how many people thought the world of their inventions and spent gobs of money “perfecting” them, but were completely wrong about the consumer’s actual need for that product.
Instead of getting a patent right off, and spending quite a bit of money to do it, take the safe route and get a provisional application patent (which is approximately $100). This protects your invention from being swiped by someone else with a “patent pending” status (ever heard that phrase on a commercial?) for a period of one year. Before that 12 month period is expended, however, you must file for a full patent of your product.
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What’s in a Domain Name?
One of the foremost aspects of starting a business is deciding on the name. You want something memorable, but also something that embodies the services you provide as well as the ethics you stand for.
However, what makes the process even more difficult these days is the difficulty in finding a domain name for your company’s website. And choices are becoming limited, especially when it comes to the .com domains. There are more than 71 million .com domains out there, which is nearly three times the combined total of the other domains, .net, .info, .biz and .us.
Nearly every single word in the english language is already spoken for as a domain name, and many of the obvious phrases associated with those words (such as, for random example, “gloves.com” and “warmgloves.com”). This causes a bit of a problem for new businesses, as most want a domain name directly associated with their company name or the service they provide.
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What Successful People Do - Part 2
Last week I began summarizing the 9 qualities successful people portray, according to Dr. Henry Cloud’s book 9 Things You Simply Must Do to Success in Love and Life. Today we will be concluding this topic with qualities 6-9.
Successful people . . .
6. Use Their Anger
Many people bottle up anger and dwell on how someone did them wrong. They allow it to fester and infiltrate their attitude in a negative way. Successful people, however, know how to use their anger and disappointment and make something with it. They don’t hate the person, but, rather, hate the act of dishonesty, deception, etc.
Take, for example, the recent Bad Customer Service Experience that I vented about. I used my anger as a means for learning what quality customer service is, and shared that with the blog readers in order to assist them in establishing that quality in their own businesses. Rather than dwell on it (though, mind you, I did write a letter to the owner of the restaurant), I did something with it.
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What Successful People Do - Part 1
Successful people have a lot in common. It’s usually not their background (poverty or riches), where they came from (LA or middle-of-nowhere Kansas) and what they’ve been through (lavishly spoiled or battered and bruised). It’s usually not how they were raised or who they rely on. It all comes down to the choices they make.
According to Dr. Henry Cloud’s book, 9 Things You Simply Must Do to Succeed in Love and Life, successful people exude similar qualities that make them a success. Today we will touch on qualities 1-5.
Successful people . . .
1. Pursue Their Dreams
I’ve touched on this topic before in Seeking a Dream and Focus on Your Strengths. Successful people know what they’re good at and that’s where they place their energy. They have dreams and find ways to pursue them vigorously.
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Revisions to the U.S. Patent Law Under Consideration
The House endorsed a bill last week that would mark “the most significant changes in patent law in more than 50 years.” The last major change to patent law was in 1952. Supporters of the renovations include consumer groups, major high-tech companies, financial associations and farm groups.
The most significant change is duplicating the patent process already established in many overseas countries, such as Europe and Japan, of “first to file” as the patent holder. Currently, the U.S. is the only major industrialized country in the world that still holds a “first to invent” policy.
Of course, these changes would need extra protect from fraudulent inventors who file a patent but have yet to invent the actual product, while someone else has invented the product but was second to file the patent.
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Hard to Find Employees
It’s getting harder and harder to find good help these days. And there are many factors contributing to the problem that you, as a business owner, need to be aware of.
First of all, there is an increased number of young people seeking jobs that require more brain skill than brawn skill, which is making an increased shortage of employees for the manufacturing industry. Mechanics, engineers, freight and delivery truck drivers, machine operators and construction workers are some of the hardest positions to fill.
Another issue is a lack of adequate compensation for the demanding job. Teachers, for example, on a national average really get gypped when it comes to their annual salary and benefits. Though many seek a teaching career for the joy of the work, rather than the pay, there is also a lack of valuable, qualified teachers all over the nation because many just can’t afford such limited pay to support their own families, no matter how much they love to teach.
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How and When You Should Pay Yourself
As a business owner, there are many things you have to worry about. Bills, supplies, meeting customer demand, hiring employees you can count on, choosing the right price for your product… the list goes on and on. One thing that may seem to be moved to the back burner in the midst of all of these concerns is yourself, more specifically, the personal funds you get out of the company.
So, how and when do you pay yourself for all of your hard work? Let’s first focus on the when.
When
To make things easier on your company’s budget, it’s best to pay yourself when you pay your employees. For example, if you pay your employees bi-monthly, then you should be paid on the 15th and 30th as well. This makes for easier accounting for the business, and leaves no doubt as to what you can expect.
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Leaders Can’t Do It Alone
The term leader is defined as “ a guiding or directing head,” which indicates that, as a leader, you must have people to guide and direct. Leaders can’t be leaders without followers.
In other words, you can’t be a leader if you’re not bringing people along for the ride with you. Whoever coined the phrase “it’s lonely at the top,” was not a true leader. There should be no loneliness if you are leading correctly.
As John Maxwell explains it in his Leadership Wired e-newsletter article titled Rising with Your People, a leader is either like a travel agent or a tour guide. Travel agents make your travel arrangements, hand you brochures and even help you plan your daily activities for your vacation; all to a place the have, more than likely, never been. Tour guides take you along with them, show you the sites they’ve already seen, know the best places to eat, sleep and have a good time, etc. True leaders should be like tour guides.
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Strengthen Your Voice
Words aren’t the only thing that make a good impression with clients, investors and partners. How you sound, the power of your voice, also says a lot.
So how do you refrain from cracking your voice in nervousness or melodically putting people to sleep? Here are some tips from Douglas Anderson of Entrepreneur.com:
Practice Breathing
That’s right, you need to practice the one thing that comes completely naturally. The best way to go about it is to practice your speech, greeting, sales pitch, etc. in front of the mirror and watch how your shoulders react. Do they rise and fall when you breath in and out? If so, work on that and try and get your body to react to breath through your abdomen/waist, not your upper torso. When your shoulders move while you talk, it portrays nervousness and a lack of confidence.
Sit/Stand Up Straight
How many times did you mother tell you that growing up? Well, it wasn’t to torment you, it was to help you look presentable, and you should thank her. Additionally, sitting or standing up straight when you’re on the phone, even when the other person can’t see you, makes a world of difference in the way you sound. Good posture doesn’t only portray professionalism, but it allows you to breath more freely, making it easier for you to talk with more power and clarity.
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Sign Spinners Turning Heads
I first saw them on the Ellen show this summer - her picnic in the park special. She used sign spinners to introduce each guest. And, frankly, I thought they were pretty cool.
Apparently, so do a lot of other people, as the sign spinning industry is growing at a rapid pace. Still not sure what a sign spinner is? Well, basically they are folks who carry signs around, shaped like arrows, advertising local businesses. But they don’t just wear the sign, sandwiched between two billboards hanging from their necks. Instead, they dance, spin, toss the signs… all to get the attention of passers-by (Still curious? You can see some in action on YouTube).
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Leaders Can’t Do It Alone
The term leader is defined as “ a guiding or directing head,” which indicates that, as a leader, you must have people to guide and direct. Leaders can’t be leaders without followers.
In other words, you can’t be a leader if you’re not bringing people along for the ride with you. Whoever coined the phrase “it’s lonely at the top,” was not a true leader. There should be no loneliness if you are leading correctly.
As John Maxwell explains it in his Leadership Wired e-newsletter article titled Rising with Your People, a leader is either like a travel agent or a tour guide. Travel agents make your travel arrangements, hand you brochures and even help you plan your daily activities for your vacation; all to a place the have, more than likely, never been. Tour guides take you along with them, show you the sites they’ve already seen, know the best places to eat, sleep and have a good time, etc. True leaders should be like tour guides.
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Implementing a Wellness Program
The cost of health benefits for employers and employees alike is a rising concern, especially for smaller business owners. Though it can’t get rid of the cost all together, implementing a wellness program into your employees’ working lifestyle can save you money.
Many high deductible insurance programs pair their health benefits with the implementation of a wellness program in order to provide lower premiums to small business owners and employees. However, the high deductible can reach over $10,000 and, in the long run, can really cause some debt problems if an employee needs medical services.
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Strengthen Your Memory
I make lists. Lots of lists. I have a list of things to do around the house, and not just this weekend, but long term. I have a list of Christmas gifts I need to make/buy (yes, in August). And there are post-its and dry erase boards all over my house. Why? Because, if I don’t write stuff down, I will inevitably forget it. Typically I think of everything when I’m trying to go to bed, and if I don’t write it down right then, I won’t be able to sleep because my mind becomes a broken record for fear that I will forget whatever it is I thought of. Arg!
If you suffer from the same limited memory that I do, accompanied by the bustle of a life filled with family, friends, owning a business and the like, you’re probably wondering what you can do to strengthen your memory and make life just a little bit easier. Well, you’re in luck, because I have some suggestions:
Focus and Repeat
When you recognize that something is important and you need to remember it, focus your mind on it, whether it be something you thought of or something someone told you. Then repeat it over and over again to yourself out loud. The more times you hear something, the more implanted into your brain it becomes. And that’s the goal, to make an imprint on your brain.
Find a Special Place
No, not for meditation, but for your stuff. I am what some might call overly organized, with filing cabinets and a place for everything. This is, again, so that I don’t forget where things are located when I need them (and I still misplace stuff). If I don’t get something back in the location that I designate for it, it is practically inevitable that it is gone for good because there is little chance I will remember where I put it.
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Inexpensive Ways to Conduct Marketing Research
As small business owners, we typically don’t have the resources to spend tons of money on marketing research tactics like corporate American uses, such as focus groups or national surveys, which cost a lot of money to conduct. However, we do have an advantage over big companies - we are closer to the customer. Which means we have more inexpensive, and relatively easy, options available to us.
Before conducting any sort of marketing research as a small business owner, you first need to make sure your client list is up to date with current addresses, telephone numbers and, most importantly, e-mail addresses.
E-mail is one of the best, quickest, and budget efficient ways to communicate with your clientèle. It’s also an inexpensive way to do some marketing research, by offering current clients an incentive to take an online survey, such a coupon for 15% off their next purchase. You could also offer an additional 10% off for referring your survey to friends or family who are not current customers. That way you have a chance to get an expanding survey base.
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Professional Employer Organization Services
Many businesses, especially small ones that don’t necessarily have the man power for all of their human resources, needs use services provided by professional employer organizations (PEO). If you think you might be in need of payroll and various other services, there are some things you’ll need to think about first.
When You Need a PEO
• If you need to provide competitive benefits, such as health insurance, in order to recruit and keep employees. PEOs negotiate rates with insurance carriers for their entire clientele as a whole, which usually gets a better rate for everyone.
• When your business has strict regulation and compliance requirements on the state and federal level that would be difficult and time consuming to keep up with, such as businesses dealing with hazardous chemicals or explosives.
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How You Know It’s Time to Grow
Those of us that own a business know that, at some point, there will be cause for expansion. This can be both exciting and scary. Exciting because it only means that our business is doing very well and demand for the product/service we provide is growing. Scary because it is practically common knowledge that, next to tapping into the wrong market, the transition from a small business to a not-so-small business is one of the top reasons businesses fail.
There are some clear indications that it is time to expand your business, and being able to recognize those signs will help to eliminate some of the anxiety that accompanies such a change, since you will know it is necessary.
New Challenges
One of the first signs that your business is in need of a change is the fact that you are facing challenges and struggles that you have never faced before. There may be an overwhelming feeling that your losing control of the business.
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Focus on Your Strengths
Many of us have ambitions to do lots of crazy things with our lives. We dream of being singers on the American Idol stage, strutting our stuff on Broadway, being a star basketball player like Michael Jordan, or climbing Mount Everest.
For most of us, however, these types of dreams are far reaches from reality. For example, many who dream of being singers, can’t really sing at all (hence the American Idol tryout flops). And when it comes to a career, pursuing the dreams that surround our weaknesses are not the ones that will make us successful.
I’m not by any means saying that you shouldn’t pursue a singing, acting or basketball career. In fact, if you are talented at those things, I would applaud you for pursuing them. What I am saying is that the dreams that center around a weakness are not the avenue to go.
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A Need for Pet Memorial Businesses
Many businesses cater to the needs of our beloved family friends. Instead of kennels, many pet owners opt now for doggie day cares, which provide ample socialization and play time, as well as scheduled naps and meals. There are spas for pets, designer clothing and collars, and some hotels even offer room service menus. And, since the latest contaminated food scare, many businesses are providing all natural health food services as well.
But where the pet care industry comes up short is in memorializing our four-legged family members when they pass away. Some veterinarians provide cremation services, but, for the most part, there are few options for helping to remember our beloved fluff balls.
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Marketing Your Website
Now that your website is up and running, you need to get potential clients to visit it. After all, as I’ve mentioned in previous posts, these days a website is a crucial part of a successful business. But you can’t just expect people to find your site through online searches or happenstance. You have to advertise your website just as diligently as you advertise your actual business.
The following are some tips to get you started:
Communication
All forms of communication need to include your website address. Make sure it is on all letterhead, fax cover sheets, business cards, envelopes, fliers, brochures, newsletters, etc. Additionally, make sure that you/your staff mention your website to any potential clients that may call your office. Always guide them that direction because a majority of the information about your business should be contained on your site. Another great idea is to have your website mentioned on your hold message (like many customer service lines now do). This will help to decrease call volume for a busy business if clients can get the answers to their questions on your site.
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Avoid Getting Gypped by Fraudulent Web Designers
Everyone knows that, in order to have a truly successful business these days, you need to have a website. Typically, as your business is just getting started, most entrepreneurs will design their own website through a web hosting program online, many of which provide services at an inexpensive monthly cost, usually between free and $50, depending on the quality.
For example, for the photography business I started this year, I designed a website with Microsoft Office Live, through their basic free program. The site templates are practically all the same, but have different colors and navigation bar locations to choose from. I don’t have to know any of the website programing lingo or anything, I just select from a pull down menu. Pretty basic, but it accomplishes what I need at this time.
However, once my business takes off and begins to grow, I plan to have my website designed by a professional so that it can have all the bells and whistles that I really want my clientèle to have access to. And this is typical. As small businesses continue to grow, the demand for web designers increases. But beware, there are many out there that are simply trying to pull the wool over your eyes and make a quick buck, with no regard for you or your business. In fact, the Council of Better Business Bureaus reported 1,971 complaints against web designers or web design companies in 2006, up from just 603 in 2003.
In order to protect your business from being swindled by these wannabe web designers, it is a must that you do the following:
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New Advertisement Placement Ideas
Everywhere we look, advertisements surround us. And because we’ve grown accustom to it all, many of us ignore the billboards, vehicles and bulletin boards that bombard our everyday lives. But lately there have been some new found advertising venues that will help to make your ad stand out and get noticed above the rest.
Shirts
Okay, so the idea of advertising on shirts is not new, but these two concepts are. Eye Level Marketing out of LA has come up with interchangeable shirt panels to be worn on employees uniforms. Some of their target markets include theme parks, stadiums, shopping centers and retail stores. For example, the hot dog vendor at the ball park could where panels for a specific brand of beer or soft drink, making those hot dog loving fans salivate for something to wash it down.
Additionally, a New Jersey company called Telme Clothing recognized the fact that most company t-shirts give very limited information about the business. As a means of provided that much needed information (such as a moto or complete contact information), Telme provides a paragraph or two of text on the inside, bottom back panel of the t-shirt. That way, you can hand out your t-shirts to potential clients and they will find all the information they need to contact your business.
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A Little Relief from High Gas Prices on the Horizon
Though it’s not because gas prices are necessarily going down. It’s because gas stations in Texas (with a nation-wide expansion in the works) are providing up to ten cents off per gallon with a special program. The program comes from a two year old, eight person company called National Payment Card (NPC). And all you have to do is pay for your gas by swiping your driver’s license through the credit card slot on the gas pump.
Well, first you have to enter your driver’s license number and bank account information on the NPC website. When your driver’s license is swiped, an automatic withdrawn is taken from your bank account through an e-check with the Automated Clearing House, which is typically used for direct deposits.
Many are skeptical of the idea of giving out such personal information. In fact, the Texas Department of Public Safety does not endorse NPC or any other program that uses your state issued driver’s license. But what those who have their doubts don’t seem to acknowledge is the fact that programs like PayPal (which I know, through experience, to be entirely secure) require more personal information from you than the NPC program.
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Optimizing Your Google Search
Google has been around for nearly a decade now, but some people still don’t have the hang of it. They enter their search, but still aren’t finding exactly what they’re looking for. Here are a few quick tips for optimizing your Google search results:
Use the Right Terms
Sometimes it can be difficult to use the right search terms, but the better terms you use, the better results you’ll get. For example, if you’re searching for something to help guide your meeting along, use the terms “meeting agenda templates” or “meeting outline” rather than “format for a meeting.” Or, on a more personal scale, use “inexpensive preowned car” instead of “cheap used car.” Someone advertising a used car for sale is more likely to use the more, shall we say, eloquent terms, and so should you.
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A Bad Customer Service Experience
While out to dinner this weekend, my husband, some friends and I had a bad customer service experience. I thought I would share it with the blog community as a means to help learn what your staff should not do when a customer/client is dissatisfied.
We went to dinner at a small, locally owned Italian restaurant that we had heard many good things about, but none of us had yet been to. The service was off to a rocky start as the waitress took quite awhile to get to us. But we tried to give her the benefit of the doubt.
While waiting for our salads, our friends’ seven month old son needed his diaper changed. Dad took him to the men’s restroom to change him. Upon his rather lengthy return he said that it took him so long because there was no where in the men’s restroom to change a baby. No table and not enough counter space. Strike number one.
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Getting Past Generation Y Stereotypes
My husband has one of the greatest work ethics I’ve ever seen. Though he doesn’t any longer, he has worked in grocery since high school as a part-time gig. In the five plus years I’ve known him, he has never once called in to work. It doesn’t matter how sick he is, he always says they are counting on him.
His last job at a grocery store was just 10 hours a week, but when they needed some extra help or needed someone to fill a shift, my hubby was the first person they would call because he always would agree to be there. And you know what, most of the time, people are shocked to hear how devoted to his job he was, even though he really didn’t like it at all.
Why were they surprised? Because stereotypes about the “Y Generation” (those born between 1978 and 1990 - which includes me) have lead people to believe many things about those of us in our twenties and teens, especially when it comes to work, that just aren’t true for the majority. And employers need to start realizing the truth about us young ones, because over the next four years, nearly 10 million of us will be entering the work force.
Let’s examine some of those stereotypes and I’ll point out the misconception and the truth:
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New EEOC Guidelines Expand Employee Protection
On May 25th the Equal Employment Opportunity Commission (EEOC) released a new set of guidelines meant to protect those with caregiver responsibilities from employee discrimination. This includes, but is not limited to, employees with children, who care for the elderly, or who have an ill spouse, parent or in-law. These guidelines, of course, are meant to protect both men and women.
What the EEOC intends to protect is the employee’s ability to be available for those who are under his/her care. Some of the discriminatory issues that may arise, and the EEOC intends to prevent, are inflexibility in schedule (including mandatory overtime) and stereotypes that those who are deemed caregivers are less committed to their job and less deserving of promotions, raises and the like.
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Seeking a Dream
We’ve all been there at some point in our life… flipping burgers, bagging groceries, bank teller, babysitting. Not that there is anything wrong with these jobs. Let’s face it, if people didn’t do them, then life would be much more of an inconvenience. And, though there are some that enjoy working the drive-thru at the fast food joint, many of us accept these jobs as a means of getting by, whether it be working through school or even because we have no other options and must simply earn a paycheck.
But, deep down inside, we all have a dream to do and be something else. Many of us want to work for ourselves. The ambition to be an entrepreneur is usually in the back of everyone’s mind. And though the numbers of entrepreneurs out there continue to grow, it is far too often that people have dreams and do nothing to pursue them.
You have a couple of options. The first is that you can be one of those people who has a dream his entire life, but never makes anything of it outside of an occasional hobby. Such people typically claim that life has thrown so many obstacles at them that it would be impossible to pursue their dream. And they are full of excuses, such as not having the means to get started.
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Global Markets and Business Etiquette
A study of networking cultures in China, Russia, Europe and the U.S. has resulted in some helpful information for U.S. entrepreneurs doing business overseas. The study was conducted by Bat Batjargal, who, according to BusinessWeek.com, is a research associate at the Davis Center for Russian and Eurasian Studies at Harvard University, and an assistant professor at Beijing University, who has been studying cross-cultural networks for about a decade.
First and foremost, when doing business with a foreign country, don’t over do it in trying to fit in with their culture. Russians know that you are not Russian and, therefore, do not expect you to act Russian. They expect you to act like yourself.
Below are some additional information Batjargal learned from his study that you need to know when dealing with the global market:
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Helping Ensure Your Employees Get Along
In any business, especially small ones, everyone works closely together. Sometimes employees have to deal with the cubicle situation, with desks nearly on top of one another, because of limited space issues. This can cause some messy situations if you, as the boss, don’t lay down some ground rules right from the beginning.
Here are some things you may want to stick in your employee policy manual, in order to help avoid those popular cubicle conflicts:
1. Allow employees to label their supplies.
One of the most popular cubicle complaints among employees is that things keep disappearing from their desk. We all know that popular phrase from Office Space: “Has anyone seen my stapler?” Well, it happens all the time. For me, my pens are always disappearing, mostly because I sit at the front desk. Allow your employees to label their supplies, such as staplers, pens, clipboards, etc., with their name or desk number, in order to help to sway the temptation of others to snatch it.
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Tips for Sorting Through Overwhelming Files
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There comes a time in the life of our filing cabinet when there is no room to spare for any future files, and the ones contained within are so old we don’t remember where they came from. It’s time to sort your files and weed out the ones you no longer need.
Here are some tips for sorting through your overwhelming stack of files:
1. Establish a Closing System
If you don’t start a means of closing your files when your task for that client is complete, then you will never have enough space for them all. Keep in mind that any files that contain legal documentation, whether you’re actually an attorney or just have a contract with the client, must not be destroyed (by law) until ten years after they have been closed. If you have a lot of files like that, the best thing to do is rent a storage unit to keep your closed files in, so that they don’t take space away from your actual work environment.
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The Balance of a Leader
From the time I was a little girl, my mother had this look. If I was not behaving in the manner she approved of, all it took from her was “the look” (and occasionally my name spoken in a not so flattering tone) and I’d straighten right up. That look has carried on to me. My husband says I try and use on him sometimes (though he doesn’t like to admit that I’m usually successful) and even our dog, a 95 pound lab/dane mix, will hang his head in shame when I give him “the look.” It must be an acquired skill.
Equally as important as “the look” in getting my point across, is the affection. Though we don’t have any children of our own just yet, I have a great deal of experience with them from working in daycares and children’s ministries at church. And one of the most important things I’ve learned is there must be affection and love in your discipline. With my nephews, for example, when they stay over at our house and get into trouble, we discuss what they did wrong, how to improve in the future, and always end with a hug and “I love you.”
Being a good, strong, dependable leader is all about balance. Being a leader is not a one-sided position. You cannot be rough on your employees and never show them any tenderness. And you can’t be easy on everyone and never show them any discipline. You have to have a balance of both.
And there are many areas in which a balance is needed as a leader, such as the following:
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Local Currency Helps Small Business
It’s not news that big-box businesses are popping up everywhere and harming the local small business economy wherever they land. In fact, a study in Maine by the Institute for Local Self-Reliance (ILSR) showed that only about 14 cents on the dollar of funds that went into a big-box business stayed in the state. This compared to a whopping 54 cents on the dollar for locally-owned businesses.
In an effort to discover ways to bring more customers to the small business community, the community of Barrington, Massachusetts has created a local currency called BerkShares. One BerkShare note is worth 90 cents in U.S. currency. Four banks int he Barrington area participating, along with some 280 locally-owned businesses who have registered with the program, and 250 more in the area that take the currency but aren’t officially registered. As part of their participation, businesses offer customers who use BerkShares a 10% discount on their purchases.
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Funding Options for Small Business
When I started my photography business this year, I vowed that I would not go into debt to make it happen. Things are still slow as I build my portfolio and get the word out, which means there are times when I have no money coming in at all. And that’s fine, it just means that I’m not making any purchases to further things along either.
I do invest my own money in the business. In fact, that’s exactly how I got the business started in the first place, by saving up for it. And that’s how I take it to the next level with advertising, etc. I save up for a particular piece of equipment or ad.
Investing your own money in your business is the most cost effective way to get things moving, especially in the beginning. Additionally, as your business grows and has more revenue coming in, you can invest your personal income as a loan to the business, with an interest rate and all, where the business pays you back for your investment.
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Is Tort Reform Necessary to Protect Small Business?
According to a survey by the Institute for Legal Reform, release in May, more than half of small business owners polled are not all that concerned about being sued. But, as I pointed out in a post earlier this month (see The Lawsuit Risks of Having a Website), we live in a world of lawsuit happy people, who want anyone to blame but themselves.
That seems to be the circumstances, in my opinion, in the case of the D.C. judge who sued his neighborhood dry cleaner for $54 million over a misplaced pair of pants. Apparently Judge Roy Pearson dropped of a pair of pants at Custom Cleaners, owned by Soo and Jin Chung, to be altered. According to his side of the story, when he returned to pick up the pants, the Chung’s said they couldn’t locate them. A week later they returned pants to him, but Pearson claims they were not the one’s he brought in.
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Showing Compassion
Recently I posted about the influence a leader has on those under his authority and respect. What someone in a position of leadership does guides others down a similar path. This can manifest in many areas, and one area that needs it most is compassion for others.
Consider the fact that, statistically, two of every three Americans are overweight. We are a gluttonous nation. And yet, a child dies of starvation somewhere in the world (though typically not here) every four seconds. Unfortunately, many people won’t act upon such sobering statistics and try to make a difference because they don’t believe that they truly can. What’s one person to such a monstrous global epidemic?
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Businesses Embrace the Harry Potter Craze
Are you a Harry Potter fan? I am. I love the movies, but haven’t read the books yet (I know, any die-hard fans would be appalled). My husband has suddenly gone on a “read all the books NOW” craze and has flown through the first three in a week. But I can’t say that I spend a lot of time at work discussing Harry Potter. But apparently, it has become something more than a little water cooler chatter.
According to Entrepreneur.com’s article Potter Casts Petrificus Totalus Spell on Workplace (nice title, by the way), the Harry Potter craze that has swept the nation for the past few years has escalated with the release of the fifth movie, The Order of the Phoenix on July 11th and the release of the final book, Harry Potter and the Deathly Hallows on July 21st. And with that escalation has come a bit of, shall we say, distraction during business hours.
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Enhance Your Image Through Your Words
Stress - it can get the best of us. Especially when there are stacks of papers and files on our desk that never seem to get smaller. Unfortunately, too many of us, from the low man on the totem pole to the big-wig on top, openly profess our frustrations to anyone that crosses our path.
As professionals, we must keep in mind that what we say effects how people view us - both our capabilities and weaknesses. What follows are some phrases that definitely don’t enhance your image, and what would be a better approach to the same situation, regardless of the frustration brewing within.
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Standing on the Job
Think hotel lobby, bars and fast food ordering counters. Or even counter-top dining tables (I have one myself, which comes in very handy when you have a dog that stands over three feet tall on all fours). So how about a counter-top desk in your office that you can stand at?
Donald Rumsfeld, the US Secretary of Defense has one. And so does business owner Thomas Gimbel out of Chicago. And, unlike a counter-top table that simply has taller chairs, Gimbel (and Rumsfeld) stand at their desks. Gimbel initially got the idea when his 6 foot 6 inch frame caused him back problems no matter what chair he tried. He found relief only when he stood. So why not work that way all the time?
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Lease or Rental Agreement… That is the Question
So, you’ve made some investments in rental property? A very popular business venture these days, as you can never go wrong with investing in real estate (well, almost never). As you begin the process of finding tenants, one question that you must address is whether to use a Lease or a Rental Agreement for your property.
First, you must determine what type of market the property will appeal to. If it’s a residential home, such as a single family house, duplex or apartment complex, then your market will likely be those that are looking for a place to settle down for a while and stay put. For this type of property you would want to offer a Lease.
However, if your property is in the heart of the business district, close to a college campus, near a military base, etc., then a Rental Agreement may be the best option for you. Most especially if you are having a hard time finding someone to rent the property in the first place.
Let’s examine what each agreement consists of so you have a better idea of what would work best for you:
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For Vision Impaired Diners: Menus that Talk
There have been many times when out dining with my in-laws, that one or both of them have forgotten their reading glasses and have to strain to read the menu. When that happened to Susan Perry, while dining with her blind niece, she realized there were few options and got a great idea. What if the menu talked?
Your first thought may be that there are Braille menus for the blind, but less than ten percent of blind individuals can read Braille. That fact is what truly motivated Susan Perry to pursue her idea. And, after three months challenges and an investment of $300,000 of her own money (including the patent, legal fees and a lot of trial and error), the first prototype of “Menus that Talk” was born.
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Leading by Example in a World of Copy Cats
When you are in a leadership position, what is the one principle that is the root of everything you do across the board? Lead by example. Why is that? Because we live in a world of copy cats and people do what they see their leaders do.
For example, say the CEO of a company is using his petty cash account for personal expenses (such as a 2008 Mercedes), rather than business expenses. Now Bob in sales knows what the CEO is up to. And it’s likely that Bob won’t report the events. Instead, he’ll follow in his CEO’s footsteps and start requesting reimbursements for the dinner he had out last week. No one has to know it was just him, the wife and the kids. He can say it was a business dinner with potential clients. Afterall, if the CEO gets away with it, so should Bob.
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The Lawsuit Risks of Having a Website
We all know that with any business venture there is risk involved - sometimes minor, often substantial. Being sued is a big risk, especially as your company grows and your network of clientèle and other businesses expands.
Especially if you have a website.
Yes, you read that right. In this lawsuit-happy world of ours, all it takes is having a website, or allowing employees to use the internet at work, to drag you and your business into the courtroom. Everything from whines about content to product trademark and patent issues - all at the click of a mouse. Don’t get me wrong, having a website is synonymous with being successful with your business. It’s practically necessary. But you should be aware of the risk it involves.
Here are some examples of what can get you and your business into trouble when it comes to the internet:
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Startup Myths Keep Entrepreneurs Motivated
We’ve all heard the stories. Hewlett Packard and Apple were started in someone’s garage. YouTube and Goggle were the children of brilliant, spontaneous ideas, etc., etc., etc. We love to hear that these entrepreneurs simply had an idea, ran with it, and became multi-millionaires. Because that’s what we want to happen to the businesses we’re putting our blood, sweat and tears into.
But the truth of the matter is, they’re simply stories. Fairytales of success, if you will. The reality is, most entrepreneurs get their initial idea for a bright innovation from a previous job they may have had. In fact, a study of VC-backed companies showed that 91% of them were related to the founders’ previous employment.
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Flexibility is What Working Parents Desire
Balancing work and family life can be quite the challenge. Add a social life in the mix and you’ve got yourself one overly busy schedule to deal with most days.
Does that busy schedule affect working moms or working dads more? A survey conducted by Harris Interactive for Adecco USA may shed some light on that. The survey polled 223 employed men and 272 employed women who have at least one child.
Some of the results are as follows:
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Being Sued by Big Business Competition
Tom Szaky has a new business - TerraCycle provides organic plant food, made from worm feces, and just recently secured its major financial backer. But just about that time, Szaky received a 173 page lawsuit. The Plaintiff: Scotts Miracle-Gro. Their accusations: that TerraCycle falsely claims that its product “outgrows the leading synthetic fertilizer,” and trade dress issues (in other words, TerraCycle’s packaging too closely resembles Miracle-Gro’s).
How do you, as a small business owner, deal with the squeeze from the big business corporate competition. Well, it’s foremost important to keep in mind that, if you make claims against those competitors, like your product can outgrow their’s, you probably need to make sure you can back up that claim.
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Scheduling Time to Relax
Seems a bit like an oxymoron doesn’t it… “scheduling time to relax?” But in this hectic world full of non-stop busy schedules for both family and business, scheduling time to relax is the only way we’ll ever get around to actually relaxing.
Relaxing is a crucial part to keeping our positive attitude and joy in life (not to mention our sanity). Here are some easy things to implement into your life in order to find some time to take a breather:
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When You Feel Like Quitting…
Owning your own business can be quite stressful and, sometimes simply overwhelming. We can often get caught up in those emotions and let them drag us down. Our thoughts turn to calling it quits - giving up all together on the dream we once had because it has just become too much.
But maybe, before turning those thoughts into action, it would be better to try and change our perspective a bit. Here are few things to check yourself on before throwing in the towel:
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Consider This When Hiring an Intern
Today is the first official day of summer (don’t we all wish we still had a summer vacation). And, with classes temporarily out of session, college students are looking for summer internships. For them, it is an opportunity to learn more about the business they are hoping to get into after graduation, without a long-term commitment.
For you, it is a chance to test things out and see if you would be willing to hire this student for a full-time, long-term position when he graduates. You also get the opportunity to pass on what you know about “the business” and provide a hands on education that a college course won’t necessarily provide. Not to mention the fact that hiring an intern has the added perk of an extra set of hands around the office at no or very little cost to you.
Before you hire an intern, however, keep the following in mind:
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Universities Should Provide More Entrepreneurial Studies
Greece is a country known for being entrepreneurial. And while it may not be exactly the same as the U.S., a study done there has found some interesting results that may very well apply to our own nation.
This study, titled Entrepreneurship Among Graduates: Reality and Prospects in Tertiary Education, examined how education affected graduates who went into business on their own. 249 graduates, from two different years, who had started their own businesses since graduation were questioned.
Two important percentages stand out from the results of the study:
• 44% report a low correlation or none at all between their college degree and the business they started.
• 51% report that they use little to none of what they learned in college in their business practices.
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The Importance of Being Assertive
Point blank: if you’re an entrepreneur, or plan on becoming one, you have to be assertive. Now, please know that I don’t mean aggressive, which is completely different. I mean knowing what you want and what your limitations are and being able to express that in a confident and respective manner.
When you start a business, many people will ask you for favors. Your friends and family may sometimes expect freebies of the product/service you provide. Business partners may request you to take on one of his/her tasks because their “to do list” is just too full. Some customers may expect you to practically hand-deliver the product they order to their door yourself.
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How Department Divisions Can Hurt Customer Relations
In last week’s post Differentiate Your Business With Quality Customer Service, one of the tips listed touched on department divisions, which I would like to take the opportunity to elaborate on a bit.
When I say department divisions, I am specifically referring to the common element of many businesses, to have a department (or individual) assigned to each task related to the business, such as marketing/sales, accounting, legal, etc. Don’t get me wrong, I’m not trying to indicate that having departments in your company is a bad thing. In fact, in and of itself, it is not. What can lead to poor customer service is your employees’ attitudes about their specific department.
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Differentiate Your Business With Quality Customer Service
Customer service is the one aspect of business that can separate the great ones from the not-so-great ones. Products, services and even prices will usually be in the same ball park. Customer service is where you can really make a difference.
This is especially true when small businesses try and rise above their big business competitors. Corporate business, even though they typically have a whole department dedicated to customer service, have a tendency to make the client feel ignored and unimportant because the company “deals with so many people, something is always bound to go wrong.”
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Tips for Gaining and Impressing Potential Investors
It’s not often that a new business can really get itself off the ground without investors to help push it along. But, of course, getting investors to write you a check isn’t all that easy. You obviously believe in the business you want to start because it’s your brain child - a part of you. But convincing others to believe as whole-heartedly as you do can be a rough task.
Here are some tips for getting potential investors to believe in you and the future of your epiphany:
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Funeral Homes Renovate Look and Services
The times are ever changing, and many things just aren’t the same as they used to be. Funerals are no exception (though you won’t hear and complaints about that from me). More and more families are planning celebrations of their loved one’s life after they pass on, rather than somberly mourning the loss.
Between that and the fact that the national cremation rates continue to rise (with an expectation of 50% by 2025), resulting in drops in the revenue that funeral homes bring in, funeral home owners are taking the hint and making some changes.
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How the Bee Colony Collapse May Affect Your Business
Many people don’t realize that the honey bee population is a vital part of the farming industry in our nation. The business of raising bees is worth about $15 billion in the U.S. Worldwide, honey bees are also responsible for pollinating more than 90 types of fruits and vegetables, especially almonds, apples and blueberries.
But what has become known as the Colony Collapse Disorder is threatening to change the livelihood of some businesses. If colony losses are significant it won’t only effect the bee keepers income. Farmers who use bees to pollinate their crops will either face substantial costs to produce crops or a significant drop in production. Either way, consumers may see a raise in prices of crops in order for farmers to break even.
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Finding the Right Outsider Board Member
If your business is big enough for a board of directors, then I highly recommend you have at least one board member who is an outsider. The benefit is having someone with an unbiased opinion available to give a better perspective on issues at hand. He/she can also help to mediate when the rest of the board, who are probably directly involved in the company, can’t reach a decision.
When interviewing prospects for the outsider position on the board, be sure to address the following:
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Outsource Your Chores and Errands
There just aren’t enough hours in the day, at least for most, to get everything accomplished we would like to. Our priorities tend to focus on the businesses we own, as well as our family and social lives, and we tend to never get around to picking up the dry cleaning or mowing the lawn.
Well, some fellow entrepreneurs recognized this need in their own lives, decided to do something about and DoMyStuff.com was born. The basic premise is that buyers (a.k.a. busy people) post a task they need done, such as mowing the lawn, and assistants (local individuals or businesses willing to do the work) bid on the task. The buyer picks the best bid, which aren’t just about how much the assistant would charge, but how they would get the job done.
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Using Your Business to Serve the Community
There are a large number of possiblities when it comes to getting involved in your community. In fact, there are a number of ways your business can get involved, such as donating some of your profits to charity or donating the product/service you provide to those in need. But have you ever considered actually using your business itself to serve the community?
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What Makes Gasoline So Expensive These Days?
On the surface this may not seem like a topic related to small business, but it most certainly is. The price of gas affects all of us in tremendous ways. And if you travel for the sake of your business, it’s really hitting the wallet hard.
Last summer, when gas prices averaged $3.00 a gallon, most of us assumed that would be the worst of it. Boy, were we wrong. With gas prices currently averaging $3.20 a gallon (though it’s closer to $4 on the west coast), the anticipation of what this year’s summer will bring is a black cloud looming over our heads.
So, what’s the deal? Why can’t we keep something affordable that nearly every person in the nation is so dependent on? That right there is the problem… our dependency on gasoline for our every day lives. Now, I’m not trying to go “ green” here, but the concept of supply and demand is not new to the business world. As the demand for a product increases, and the supply decreases, then the price continues to climb.
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Facing Change as an Entrepreneur
Change - it’s an obvious part of life. Usually, in our everyday hustle and bustle, it comes in small kinks here and there. But when you own a business, changes come in waves on a regular basis. And how you come through change, for better or worse, all depends on how you deal with it.
Here are some tips for dealing with the everyday changes of being an entrepreneur:
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Buddy Networking: A Clever Way to Expand Your Network
Ever heard of “buddy networking?” Basically, it is buddying-up with another business that complements your own and working together to expand both of your networks. Some examples of great buddy businesses would be: a maid service and a lawn service; a photographer and a wedding coordinator; or an accountant and an attorney.
First, determine all of the types of businesses in your area that would complement your own by attracting your ideal clientele. Then, prioritize those businesses and obtain contact information for the manager or owner. Finally, arrange a meeting (in person is best) with the owner to discuss how your businesses could benefit each other. Be sure to take along information about your business and ask for further information on theirs. Three buddy businesses is a nice number to have on your side.
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The Cheapest Gas Prices in the Nation
New Jersey requires all of its gas stations to be full service (as does Oregon) and is the only state in the country where gas prices still average under $3 a gallon. So how in the world is a full service gas station keeping its gas prices lower than everyone else?
According to Doug MacIntyre, senior oil and gasoline analyst with the EIA, cost has little to do with it - it’s all about local supply and demand conditions.
And it doesn’t hurt that New Jersey has four in-state oil refineries that have yet to have any problems like those in the Midwest, which have caused Chicago’s gas prices to average more than San Francisco’s, which is known for some of the highest prices in the nation. Another beneficial factor is that New Jersey is the main port for gasoline imports from Europe.
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Common Advertising Mistakes
Advertising is the key component to bringing in clientèle. Though word-of-mouth is the most effective, it won’t happen until you get those first few people in the doors, and to do that you must advertise. There are a lot of great ways to market your business to the public, but there are definitely some tactics you should avoid if you want to see the most success.
When brainstorming your advertising campaign, be mindful of the following common advertising mistakes:
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Retirement for the Sole-Proprietor
When you go solo and start your own small business, it can often be hard to save for retirement. Yes, there are options like Roth IRAs, but as your business grows, the maximum contribution of $5,000 doesn’t always seem to be the best option.
Additionally, savings accounts have a meager return on the precious funds you’ve worked so hard to earn. Wouldn’t something like a 401(k) plan that many corporate employees get to take advantage of be nice?
Well, cheer up because the option is out there. In fact, it has been since 2001, but only now are sole proprietors becoming more aware of it’s benefits as the kinks have been ironed out. It’s called a “solo 401(k)” (a/k/a “solo k,” a/k/a “uni-k“). This retirement option is strictly limited to sole proprietors without employees.
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The Benefits of Adding Video Surveillance
It may be time for your business to get some extra security. One option would be to hire security guards to patrol the doors and parking lot, but that means paying someone a substantial hourly wage to stay awake at night and watch your assets, and that may not be in the budget.
A more budget conscious option may be to install a video surveillance system. Though it can be rather expensive, it is a one time expense, rather than providing a regular pay check to a security guard. And most, of course, come with some kind of warranty if anything goes wrong.
Some other benefits to a video surveillance system:
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Preventing Sexual Discrimination in the Workplace
As I have mentioned before in this blog, I am, among many other things, a legal assistant at a law firm. It’s a small firm, consisting of five attorneys, all men, and six legal assistants, all women. Though it wouldn’t be that strange for a female attorney to join the firm, it would be quite odd to have a male paralegal join the gang.
There are many professions that tend to appeal predominately to one sex or the other. Most nurses are women. Most construction workers are men. Daycare teachers - women. Trash collectors - men. Most of these jobs have always been this way, typically because that particular job fits the strengths of one particular sex better than the other. That doesn’t mean, however, that there isn’t a tough broad out there who couldn’t guide a steel beam into place.
Imagine with me, if you will, the opposite gender “infiltrating” one of these or many other professions that tend to be single-sex oriented. For example, if a female attorney joined our firm, it would probably be of little consequence, since female attorneys aren’t scarce, they’re just not part of our particular firm. However, I can imagine that a woman who gets a job pouring concrete at a construction site would receive her unnecessary share of cat calls and sexist remarks.
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Rules for Networking on MySpace
Within the vast array of the MySpace community, you will not only find individuals and music groups, but many businesses have also joined the online social network and the numbers continue to grow. If you’re thinking of using MySpace to plug your business, however, there are some rules you need to abide by in order to be successful.
1) Be a part of the community.
Spend some time as a user, keeping a low profile, and learning the rules and culture of the online community you’ve joined, whether it be MySpace, YouTube or one of the many others available. If you don’t keep to the cultural regulations of that community, you will be branded an outsider immediately and few will respond.
2) Focus on giving, not receiving.
If you join MySpace with the unmoving goal of getting new contacts and creating new business, and make little effort to provide anything to your contacts in exchange, no one is going to want to be your MySpace “friend.” Give people a reason to like you. A good place to start would be providing something of value to those who visit your page, such as downloads (screensavers or video).
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Preparing for a Health Inspection
The Associated Press published May 4th that the KFC/Taco Bell restaurant in Greenwich Village, New York City that was found to be infested with rats will be closed indefinitely. A spokesman for the chain owner, Yum! Brands, Inc., says there are reviewing their franchises nationwide and are “determined to prevent this incident from happening again.”
My question is, how did it get that bad in the first place? Anyone who owns a restaurant is well aware of the fact that there are strict rules and regulations regarding the operation of the restaurant in order to prevent illness in customers. How unsanitary does a restaurant have to be in order to be infested with rats to that extent? And you can’t tell me that the staff never noticed one. Clearly there was a health inspector also not doing his job properly.
Health inspections are a crucial element in keeping restaurants safe to eat in. And, most of the time, your business will be severely fined and given a deadline to make changes if it does not pass inspection. If those changes aren’t made, the restaurant could, and should, be closed.
If you are a restaurant owner, or are looking into joining a restaurant chain franchise, there are a number of things you need to be aware of in order to make sure that your restaurant will not only pass a health inspection, but will be safe for your customers.
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Online Meetings, The Board Room Alternative
As business owners, there are many, many times when we really need to be two places at once. Especially when it comes to trying to find time to meet with clients all over the country, and still keep an eye on business operations.
Fortunately there is a much simpler alternative to making a clone of ourselves: an online meeting.
I know it may sound a bit intimidating, especially for the not so tech savvy. And it certainly doesn’t have the same professional and comforting feel a client gets when meeting with you face-to-face, so it’s not something you want to replace all of your personal meetings with.
Consider the fact that an online meeting could include all the clients (or even investors) you intended to meet with individually regarding a new product/service at the same time, which would significantly reduce the time required of you to get the word out.
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Moving from a Home Office to a Commercial Space
Working at home requires a strong ability to separate personal and business lives. A home office contains a lot of distractions, whether your family distracts you from your work or your work distractions you from spending time with your family.
But, if you work from home and are considering moving your business to a commercial location there is much more to take into consideration than whether you are too distracted. If you simply pack everything up and move without looking at every aspect of going commercial, you could negatively affect the future of your business.
Consider these three factors when deciding to move:
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Tips for Adapting to the Postage Rate Increase
In 1847 the first U.S. postage stamps were released, the five cent Ben Franklin and the ten cent George Washington. And, in just a week, the rate for postage stamps will increase to 41 cents - more than eight times that of the Ben Franklin.
You may be asking yourself, why the increase, since we just did this a little over a year ago? The stamp increase is to help cover operational expenses. Last year’s increase was mandated by Congress to fund an escrow account.
While the stamp increase won’t severely effect most business owners, the U.S. Post Office is also changing the postage rates for packages and this may cause a bit of a strain. But don’t worry, there are some ways to work around the added expense.
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Expanding Your Business Overseas: Money and Taxes
When I bring up the subject of money with regard to expanding your business to the global market, I’m not necessarily referring to your profit margin. More specifically, I’m referring to the actual paper or coin used as payment for the product your provide.
Upon initial movement toward an overseas expansion, you may think that it would be obvious that you accept foreign currencies. However, you are better off not to. The conversions rates for foreign currencies fluctuate so frequently, which means you would probably lose money if you accepted foreign currency from all of your foreign customers.
If you must deal in foreign currencies, there are some options:
1. Forward Contracts - Locks in the conversion rate for when transaction/sale is finalized.
2. Options - Allows for the opportunity to convert funds, but it is not a requirement.
3. Bank in that Country - Open a bank account in the country where you do the most business so that you can deal in currency for both income and expenses there.
Most countries will gladly accept American businesses into their market, providing “special pools of tax-funded R&D money” even real estate specifically set aside for to attract foreign investment. You may even get special tax breaks in those countries as a foreign business.
The U.S. Commercial Service can help you find those countries who would welcome you with open arms. For $680-$800 per day, the Commercial Service’s Gold Key Program will set up appointments for you to meet with potential overseas partners and provide translators. Find a U.S. Commercial Service specialist in your area.
Be sure to hire a lawyer in any country you do business in that specializes in foreign businesses. You will need to have someone who is familiar with your position and that country’s laws so that he can watch your back and make sure you are aware of any changes in tax law, etc.
If you are, in fact, looking to expand your business overseas, I highly recommend that you not only check out the other parts of this post series, but also examine the resources provided at the end of each post before making that transition. Prepare yourself for every aspect of business in any country you select before making that final leap into the well spring of new consumers.
Pt. 1: Why and Why Not Expand Overseas?
Pt. 2: Labor Laws
Pt. 3: Protecting Your Product
Source:
• Inc.com: How to Get Started
Currency Resources:
• Oanda Currency Conversion Calculator
• Bank for International Settlements
• Federal Reserve Bank of New York
Other Resources:
• U.S. Advocacy Center
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Expanding Your Business Overseas: Protecting Your Product
When starting a business in America, one of the most crucial elements is to get your product or business practices patented or copyrighted. Unfortunately, when it comes to expanding your business to the global market, a U.S. patent won’t protect your money-maker, as they are not enforceable overseas. There are some things you can do, however, to guard yourself from idea theft.
What you should probably do first is file with the Patent Cooperation Treaty under the United Nations World Intellectual Property Organization (WIPO). According to John Lanza, a Boston attorney, at a cost of $3,000 to $6,000, a PCT filing can preserve your right to patent your product in most major nations for up to 30 months. That way you can test the waters in a number of markets in order to find your niche.
Once you’ve determined where your product will be most successful, you should file a patent in that particular country. If you don’t, them moment you begin to offer your product copy-cats will begin producing competition with their knockoffs. Obviously the process for filing a patent differs with each location. For more assistance, The U.S. government provides a “tool kit” on international patents at StopFakes.gov.
International patents have classifications, in order to streamline the application process. After all, there has to be a way to determine if someone already has a patent for a particular product in a particular country. For more information of this classification process, visit the WIPO’s International Classifications page.
Danger - be aware of the fact that China is one of the leading countries when it comes to intellectual property theft. Ted C. Fishman, author of China, Inc. recommends that, in order to help protect yourself you should establish a licensing agreement with a Chinese business partner that requires him to provide a substantial upfront contribution to your business expansion. Such an investment will keep him from revealing product specifications to another manufacturer or trying it on their own and will also help to keep other Chinese businessmen from trying to tap in to your market.
Bottom line, protect your most important asset, the product you provide, whatever it may take. Though there may be some cost to it, in the end it would be more than worth it. The alternative, a cheaper knockoff of your product stealing your customers, would be detrimental.
Tomorrow I will cover the monetary and taxation aspects of owning a business overseas.
Pt. 1: Why and Why Not Expand Overseas?
Pt. 2: Labor Laws
Pt. 4: Money and Taxes
Source:
• Inc.com: How to Get Started
Resources:
• U.S. Patent and Trademark Office
• European Patent Office
• Patent Pending in 24 Hours by Richard Stim and David Pressman
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Expanding Your Business Overseas: Labor Laws
A milestone in the growth of any business is the capacity to expand into the global market. As exciting as the looming possibility may be, you don’t want to cross the boarder blindly, especially if you are passing the internet zone and actually opening your doors in a foreign land. 
As most know, the laws vary in every country, and labor laws are no exception. If you’re expanding your business to another country and plan to have employees in that country, it’s important that you know what you’re dealing with before you except any resumes.
For example, U.S. employers have basically complete control over who they hire and fire. But in other countries, that’s not always the case. But, according to New York lawyer Aaron Schindel, in the European Union and much of South America, employers are legally obligated to consult with employee representative, whether it be a union or works council, before relocating an office, conducting layoffs, or even discontinuing a product.
Labor costs may be low and appealing for expanding your business overseas, but the other financial obligations that come with being a foreign employer make the cost of running a global business fall onto a comparable scale to that of U.S. only operations.
When it comes to worker benefits, many countries require employers to provide a month of paid vacation and/or mandatory bonuses. Take the Mexican aguinaldo, for example, a mandatory Christmas bonus provided to every employee in Mexico and equivalent to 15 days wages or more.
When it comes to health insurance for your employees, things may be a little easier. Most countries provide universal health care for workers. This is often partly funded by payroll taxes, which can have high rates, but are typically more cost effective than the continual rise in insurance premiums in the U.S.
There are many other things to consider when looking to expand your business overseas. Check back tomorrow for information on how to protect what keeps your business running, the product your provide.
Pt. 1: Why and Why Not Expand Overseas?
Pt. 3: Protecting Your Product
Pt. 4: Money and Taxes
Source:
• Inc.com: How to Get Started
Resources:
• The International Labour Organization
• U.S. Dept. of Labor (dol.gov): Foreign Labor Trends Reports
• Univ. of Chicago: Foreign Law
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Expanding Your Business Overseas: Why and Why Not?
At some point in the self-owned business timeline, an entrepreneur will inevitably face the question of whether or not to jump in the deep end and go global. Some entrepreneurs, like myself and the photography business I started, don’t necessarily have the means or desire. I want to stick with my local market. Others, however, especially businesses who provide a tangible product rather than a service, could easily stretch their boundaries beyond the shining seas.
Why Not?
To some these may be excuses, to others, legitimate reasons to evade a risky venture:
• Language barriers.
• You may be unfamiliar with cultural practices and etiquette.
• You may be unfamiliar with local law and politics.
• Limitations of foreign labor laws.
• Time consuming and complex.
• Difficult to find a partner you can trust.
Why?
A list of reasons to overlook the risks in order to help your business grow:
• 95% of the worlds’ consumers reside outside the U.S. (according to the Office of the U.S. Trade Representative) - those are all potential new customers!
• Possible untapped market.
• Because if you don’t, your competition will.
• You don’t have to actually move overseas to do business there - the internet is your gateway to expansion.
• The risk, reward and challenge are appealing.
Whatever side you teeter toward, remember that going global doesn’t have to be a “right now” sort of thing. It’s always a possibility that you should consider, simply because you’re a business owner. If you are considering such an expansion, then there is a lot of work to be done before you begin. Be sure to check back the rest of the week as we continue discussing Expanding Your Business Overseas.
Pt. 2: Labor Laws
Pt. 3: Protecting Your Product
Pt. 4: Money and Taxes
Source:
• Inc.com: Gone Global (Inc. Magazine April 2007 cover story)
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Workplace Bullies and How to Deal with Them
We all know a bully to be a blustering, quarrelsome, overbearing person who habitually badgers and intimidates what he/she considers smaller or weaker people (definition courtesy of dictionary.com).
Every grade school class has one. The kid that taunts everyone, calls them names, makes them feel worthless. And that doesn’t change much in high school either. But as we become adults that tormenting part of childhood usually fades away.
Unfortunately, a sort of epidemic of bullying from bosses has found its way into the work force. Truthfully, it’s probably been there all along, only now more people are willing to speak out about it.
The signs are obvious according to a survey conducted by the Employment Law Alliance, in which 44% of 534 U.S. workers felt they were being bullied by their boss. A bullying boss is one who publicly criticizes, rudely interrupts, teases, gives dirty looks, uses sarcastic jabs or ignores one or more employees. But what can be done about it?
The Target
If you are the target of a boss’ bullying, you likely deal with a low self-esteem and possibly even depression as a result. Being constantly given the impression that you’re worthless and weak can often make you believe it.
There are no laws against bullying someone. If you are the target of a boss’ bullying, a lawsuit is not currently an option. It would likely be counter-productive to go directly to that superior and tell her what she is doing is making it hard to work there. Chances are she will simply give you a hard time about it.
Before you just up quit your job, however, try going to someone higher up. If there is no superior above your bullying boss’ head, go ahead and give talking it out a shot. If that doesn’t work, a job search may be your best bet.
The Higher-Up
If you are concerned that you may have a bully under your employ, there are some warning signs to look for. Pay attention to turnovers and absentee rates. If a department is seeing a lot of either, chances are the head of that department isn’t very easy to live with five days a week and employees would rather not come to work at all then to have to deal with him.
Clearly, if there is a bully in your midst, confront him about it and give him an opportunity to change. But I would suggest making it a short opportunity. Not only does a bullying supervisor affect the success of your business, but he can also cause emotional or mental distress for your other employees and no one wants that.
If you don’t have a bully in your employ, but want to take the steps to avoid future problems, a good plan is to add bullying tendencies to your company’s sexual harassment policies. This makes all employees aware of what you consider acceptable and unacceptable behavior, and could help to avoid the problem.
The Bully
Most bullies are well aware of what they are doing, but lets say that you don’t realize that you’re bullying your employees - that you see it as just having a little fun. Pay attention to how people react when you’re “having a little fun.” If, instead of laughing along with you, they’re avoiding eye contact and evading you, then you’re probably being inappropriate and causing problems.
Here’s the thing, chances are the reason you never grew out of being a bully (because it’s likely you’ve always been one) is because deep down you don’t really think very highly of yourself either. Most bullies act the way they do because they are trying to feel better about themselves at the expense of others. If that is the case there are clearly some underlying issues that must be dealt with in order to overcome your aggressive behavior. Don’t be afraid to get help.
Regardless of where you fall in the bullying ring, even if you’re observing from the outside, do what you can to help correct the situation in order to preserve a pleasant working environment. If employees aren’t happy, productivity diminishes, and when that happens the business suffers. Efforts to remedy the situation benefit everyone at every level, so make the effort and the results may astound you.
Source:
• Inc.com: Nearly Half of U.S. Workers Feel Bullies at Work - and They Want to Sue
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Wine That Appeals to the Non-Connoisseur
I’m not a wine drinker. I never can find one that I like. I’ve been to wineries and tried all the reds, whites, chardonnays, but none of them provide that taste bud explosion that wine connoisseurs rave about.
But there’s a new product coming out that may convince me to give wine another try. Amazing Food Wine Company in San Francisco is on the verge of releasing a new brand of wine called Wine That Loves. Their wines are not classified by age, grape and birth place. Rather, they are classified by the foods each particular wine should be paired with,
So far the wines available are:
• Wine That Loves Pizza
• Wine That Loves Pasta With Red Sauce
• Wine That Loves Roasted Chicken
• Wine That Loves Grilled Salmon
• Wine That Loves Grilled Steak
Wines currently in the works are those to be paired with grilled chicken, Chinese food and even macaroni and cheese.
Some wine “experts” have expressed a bad taste in their mouths regarding this new wine brand, claiming it is “dumbing down wine.” Vic Motto of wine investment bank Global Wine Partners states, “It’s a paint-by-numbers approach that by definition sophisticated wine drinkers will not be drawn to…It might be something [for new wine drinkers] to try once. But if you liked it, wouldn’t you want to know why?”
Could that comment be more culturally closed-minded? First of all, I don’t think it is Amazing Food Wine Company’s intention that Wines That Love appeal to “sophisticated wine drinkers.” The target market is obviously the younger generation whose knowledge base regarding wine is lacking in a lot of ways, especially when it comes to knowing what wines to pair with what foods. Not to mention the fact that the wine runs at an affordable $12 a bottle, well below the pricey cost of “sophisticated” wines.
And truthfully, how many wine drinkers really care all that much about where their wine comes from and how old it is? Outside of the manufacturers, who are supposed to care, and a select few who attend wine tastings and have detailed discussions how a particular wine affects their pallet in everyday conversation, not many.
Most people just care about whether or not they like the wine and it goes well with what they’re having for dinner. Personally, I think that the concept of Wine That Loves is brilliant and appealing and there is no reason why it won’t be a completely successful entrepreneurial venture because the market is definitely out there.
If you’re with me on this one, then check it out. Unfortunately, Wine That Loves is not yet in stores. The wines are due to release in the California and New York areas in May and directly from their website by the end of April.
Related Material:
• BusinessWeek.com: Waiter, I’ll Have the Pizza Wine
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Tips for Running a Successful Seasonal Business
Spring is in full swing and summer isn’t far behind. Seasonal businesses such as landscaping and swimming pool cleaning are beginning to see a huge boost in sales. As the seasons change, their sales will creep downward, while businesses like ski resorts and Christmas stores will have a large upswing.
When you own a seasonal business, it’s important to know how to maintain an income year round to support you and keep the business alive.
Budget, Budget, Budget
First and foremost! What’s coming in and, more importantly, what’s going out? Know your capabilities. Don’t only budget for the months that business is good, but budget for the entire year. There are bills that have to be paid all 12 months, whether business is good or bad, such as utilities, taxes, maintenance, and rent.
You also need to consider how much you depend on the seasonal income for your daily life - food on the table and a roof over your head. If the seasonal business provides enough income for you to live off of all year, know what you need to get by each month and set that amount aside as soon as you can when the cash flow begins.
The Off-Season
Some seasonal entrepreneurs just take the off-season as an opportunity to have an extended vacation, and I bet it’s really nice. Others are busy bodies and need to have something to do all the time (like me). Unfortunately, however, some seasonal businesses don’t provide enough income to sustain the whole year. If you’re one of the later, then consider expanding the products or services your business provides.
If you own a Christmas store, consider selling decorations for the other holidays throughout the year. In landscaping, a job that sees little to no work in the winter? How about putting your decorative skills to use and offering Christmas decorating and lighting services. If you own a farm, expand your crop to include spring, summer and fall crops, and maybe even consider building a green house to grow crops in all year.
Another option, if you own a camp, ski resort, or theme park and enjoy your time off but need the extra income, is to have registration deadlines that include registration fees, a couple of months before the camp opens (or incentives to buy season passes several months in advance). This helps to distribute your income over a longer period of time, making it easier to get by without giving up the vacation period.
Use Time Wisely
If you have the opportunity to keep your time-off, use it wisely. Take the chance to provide regular maintenance or repairs to the equipment you use, without dipping into your work season. Also, use the down time to budget for the next season and year ahead. Another great use of the off-season is marketing your business, whether it be through fliers, direct mail, or phone calls. Whatever you choose to do with that time, be sure and budget for it.
If you own a seasonal business, do what you can to enjoy it. The off-season can provide a great opportunity to spend time with your family and pursue other passions. Do what you can to preserve that by running your seasonal business efficiently and successfully.
Related Reading:
• Entrepreneur.com: Running a Seasonal Business
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Direct Mail Marketing Tips (2 of 2)
Okay, so you’ve decided to use an advertising letter to reach out to the community and get them to use your product/service. Yesterday we covered the basics on the appeal of the envelope and letter itself in order to get your mail opened and read. Today, we’ll talk about what the letter should say to stir an interest in what you have to offer.
1. Background Information
Typically, most potential customers that will receive your advertising letter will not have heard of your company. So, give a little background information about your business - when you got started, why you got started and the goals you have.
2. Your Market
You may want to consider briefly stating who your market is. If everyone can use your product or service, say so. If you’re specifically targeting stay-at-home moms, then say so. If your market is specific, this will help to narrow the field a bit. Also, you may want to encourage those that don’t fit into the specified market to pass the information on to someone they know who does.
3. The Product/Service
The most important element of your advertising letter is, of course, the description of the product or service your business provides. And though you definitely want to mention the features your product/service provides, be sure that you mention the benefits of those features - the desired outcome that using your product/service will produce.
4. Testimonials
If you have them, use them. The best way to do this is as an insert. This draws more attention to the individual review, showing that it’s important. And, if available, consider adding a picture of the client who provided the review. A real face always makes what is said more trustworthy.
5. A Special Offer
Give the potential customer an incentive to respond quickly by provided a special offer with a deadline. Otherwise, they will set your advertising letter aside to “think about it” and might actually end up forgetting about it. Give a discount if they contact you within a certain amount of time, provide a smaller product or service free with the purchase of another, etc.
6. Keep it Short
Try to keep the advertising letter as short as possible. One page is best, even if you make the font a bit smaller than usual to accomplish it. Anything more than that could seem overwhelming and a waste of time to the potential customer. I can attest to the fact that I never read the advertising letters that are more than one page… it is not appealing at all.
Remember that not every person you send a letter to will respond. In fact, the response rate for direct mailing is usually less than 20%. But, if done effectively, more business than you had before, no matter how small the number, is always a good thing.
Direct Mail Marketing Tips Part 1
Relevant Material:
• CNNMoney.com: 7 smart ways to find new customers
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Direct Mail Marketing Tips (1 of 2)
These days, mailboxes contain more junk mail (also known as direct mail) than anything else. Clearly this marketing strategy works to some degree, otherwise businesses wouldn’t keep doing it. As a small business owner who is just starting out myself, I am able to combine the need for marketing with a still apparent consumer perspective. And, if you plan on marketing through the US postal service, here are some things to keep in mind:
Letters
Letters are the most effective way to personalize your advertising enough that the consumer at least looks at what you have to offer. Postcards get glances before they hit the wastebasket, and catalogs usually just get set aside for a time to thumb through that may never come along. Advertising letters are the happy medium that may mean increased success.
Though the body of your letter will obviously need to be typed in order to mass produce and insure ease of reading, there are still great ways to add a personal touch. Take the time to chose letterhead that is appealing. Stick with earth tones for the color of the paper, staying away from plain white and colors found in the crayon box, especially bright ones. Basically, you need something classy, yet trendy and modest, yet attention grabbing. And of course, a great logo and your business’ contact information.
Hand-written touches are the most important element. First, hand-write the addressee’s name. That way the consumer knows you thought of her personally and thought she would enjoy hearing about the product/service or special deal you are offering (even if she has no idea who you are).
Next, sign your name personally (with the typed version underneath, of course). Don’t use a stamp or an electronic signature, but actually take the time to sign each letter your business sends. Not only does it add a personal touch, but it aids the consumer in believing that you personally stand behind the product or service described above your name.
If you’re sending the letter as a special office for previous customers, write a “P.S.” at the bottom of the letter, in your own hand-writing, asking him how the cordless drill he bought last month is helping him with the new deck he’s building. Let the customer know he’s important to you by remembering him and aspects of his life specifically.
When adding these personal touches, do so in blue ink so that it jumps out at the customer and emphasizes that you actually wrote it. Many larger companies will use a script font for these personal touches and simply change the text color to blue… in an attempt to add the appeal of a personal touch without the actual effort to do so… and potential customers can see right through it (I always do). So I would recommend you don’t do that, if it can be avoided.
Envelopes
When sending advertising letters, your envelope makes the first impression. It will make or break whether the potential customer actually opens your letter. First, make sure the envelope matches your letterhead. Avoid simple No.10 white envelopes or window envelopes (which are synonymous with credit card offers), but take the extra expense to have the return address pre-printed just like your logo and use the same color paper.
One way to practically guarantee that your advertising letter will be opened is to keep the envelope free of clutter. Just stick to the mailing address, return address and a stamp/postage mark. The extra phrases some businesses put all over the envelope, such as “Act now!” or “Open immediately for a great offer!” are a dead giveaway that what’s inside is advertising, which means many of them will likely end up in the trash without the seal even being broken.
If possible, hand-write each mailing address on each envelope. A tedious task indeed, but this provides an added personal touch that piques the curiosity of the consumer about what may be contained inside. And if you get them to open the envelope, you’ve won half the battle.
Now that you know what may help you to get that “junk mail” actually opened, what should you do with the text of the letter that turns it from “junk mail” to quality advertising? Tomorrow I’ll cover some tips for getting the potential clients to consider buying what you have to offer.
Direct Mail Marketing Tips Part 2
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When You Should Consider Hiring a CEO
When you start a business, it’s your baby, your life’s ambition come true. You spend thousands of hours building it, nourishing it, helping it grow. But just like a child, there may come a time when you have to loosen the reigns a bit. It may be time to hire a CEO.
Here are some clues that it may be time to put your business in another person’s hands:
• If you’re more comfortable planning the next big product for your company, but not with delegating who does what to make that product happen, you may need a CEO.
• When you don’t feel like you provide the professional presentation that clients are looking for, it may be time for a CEO to handle them.
• If your company has had ample turnovers, internal problems and a lack of direction, a CEO may be able to help clean up the mess.
• If all of your time is spent on operating the business and other important growth elements such as customer service, business development, and marketing are falling by the waste-side, time to bring in some CEO management.
The purpose of a CEO is not only to manage and operate the company on your behalf, but to give you constructive criticism and advice. And you have to be able to take it, because it’s the CEO’s job to make sure the company runs smoothly, and that may mean some necessary changes you’re not ecstatic about.
Also keep in mind when looking for someone to fill the CEO position that he needs to understand and share your values and vision for the future of your business. After all, it is still your business, so the track it is on should stay relatively the same. The CEO may bring other possibilities to your attention, but you will make the ultimate decision and she will have to be someone who can accept and respect that.
Putting the management of your business in someone else=s hands is a scary thought and requires immense consideration. But with someone who is capable and on the same page as you are regarding values and goals, he/she can actually make the experience of being an entrepreneur much more enjoyable.
Source:
• Entrepreneur.com: Bringing in a CEO
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Business Tips from Presidential Campaigns
Well, it has begun. The race for the White House in 2008 has started nearly two years in advance. But things are a bit different on the campaign trail this time around. The biggest difference: the candidates reliance upon the internet to develop their following. And business owners need to pay attention, because the strategy works.
Blogs
Nearly every candidates website has some sort of blog post in which the candidate expresses his/her thoughts on a certain issue. John Edwards announced his participation in the race on his website one day before the press conference where he did the same. This gave his followers a feel of somewhat “privileged information,” not to mention brought in a little extra press coverage.
The candidates that keep a blog going throughout the campaign trail have caught on to the fact that the largest benefit of a blog is making your supporters/clientèle feel like a part of the team. Keeping them informed with the daily issues at hand, whether that be how a candidate’s visit to a factory went that day or the new product that your company is releasing, help them feel like a part of your company, or in this case, campaign.
Video
Leave it to Hillary. Senator Clinton launched her campaign for the presidency in a webcast on January 20th. Talk about tech savy. She continues to have weekly “HillCasts” in which she addresses various aspects of her campaign and her position on various matters. The idea is to appeal to the younger generation of voters out whose resource for news and information is the internet.
As a business owner, consider using video to announce the launch of a new product or a promotion. Posting such videos to YouTube as well as you’re own website can definitely generate some response. And let’s not forget that a video of someone like the CEO helps the customer to feel like there is actual person behind the business. It helps provide a sense of comfort and security.
Social Networks
Senator John McCain has invited supporters to sign up for their own “McCainSpace” site, to help them feel more involved in the campaign. Now even those supporters who may have little to no experience or knowledge base for helping on the campaign trail can feel like they are making a difference for the candidate they believe in.
Gov. Bill Richardson invites his supporters to join what is deemed his “grassroots campaigns” on sites like MySpace, Facebook and Flickr. Supporters can link their sites to Gov. Richardson’s as well as post their own blogs on the candidate and his issues.
Businesses can follow suit by developing social networks centered in their company’s ideals and benefits. Allowing customers to post their own reviews or blogs through your website allows them to feel involved. The loyal customers become part of the marketing concept for your company.
In all of this it’s important to remember to stick to the truth. Falsehoods will find you out, especially when you are inaccurately promoting a product or service you provide, or the statistics about your company.
Also, keep in mind that, along with the good comes the bad. If you open yourself up to the community, there will be people out there who are not pleased with your company, whether it be the service/product, the customer service department, or the charity you donate to. You can’t please everyone, and those that you don’t will definitely make themselves known. This is a risk you take when opening yourself up to the public, so be careful and stay on guard.
Source:
• Entrepreneur.com: Business Trick from Presidential Campaigns
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Last Minute Tax Tips
As if you haven’t heard it enough, the deadline for filing 2006 tax returns is April 17th this year. And, just to add to the stress, that is only 5 days away. For those of you who haven’t filed your returns yet, or haven’t even started, here’s some last minute tax advice:
Take Your Time
Though the deadline for filing may be haunting your dreams at night, avoid taking shortcuts or fudging numbers, even as estimates, to get your taxes completed quicker. Though the consequences may not be immediate, speeding through your returns will only cost you the pain and suffering of a possible audit down the road. Take your time and calculate each number appropriately. It’s worth the extra effort.
Maximize Deductions
Now, when I say “maximize” I don’t mean make stuff up to get a bigger deduction. What I do mean is to make sure that you are getting all of the deductions you deserve. Some deductions can easily be overlooked, such as the home office deduction or your mileage for going to the post office or a meeting location. Another not-so-obvious deduction is retirement savings. Check out my previous post, The Right Way to Write-off Business Expenses, for more tax deduction possibilities and rules.
Double and Triple Check Your Work
Before signing on the dotted line, double and even triple check all of your calculations. According to BusinessWeek.com, most of the mistakes on tax returns are simple addition and subtraction errors, and they lead to most of the inquiries the IRS makes.
Another option is to use a tax calculating program, rather than yourself and an adding machine, such as TurboTax, which is designed for both personal and business tax returns. In fact, I’ve used TurboTax for the last four years and have been very pleased with the results, especially the audit check, which double checks your return for any problems that might trigger an audit before concluding the process.
File an Extension
If you just don’t feel like you will be able to get your returns completed and postmarked by April 17th, you can file an extension by filing out IRS Form 4868 and submitting it by the deadline instead. Your extension will be for six months, so your returns will be due by October 15th.
It’s important to know that you should submit an estimated payment of the taxes you will owe with the Form 4868. Otherwise you will have to pay a fine and interest on October 15th. It’s important that the estimated amount you pay is no more than $1,000 from what you will actually owe when your returns are submitted. Less than $1,000 short will mean an additional fine, so it is better to over estimate.
If you run into problems or have questions about your return, help is available. The IRS has a toll-free help line at 800-829-1040 or you can access helpful articles on the IRS Website. The National Associate for the Self-Employed offers a guide to completing the Schedule C business tax form as well as CPA’s to answer your questions through the Tax Talk e-mail program.
Source:
• BusinessWeek.com: Tax Advice for Procrastinators
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Networking Cards: The Business Card Alternative
Resumes contain oodles of information and anyone approaching college graduation or looking for a new career should have plenty on hand. But, unless you actually see a help wanted sign hanging somewhere besides a fast food restaurant (wouldn’t that be the best use of your college degree), chances are you’re not going to want to carry stacks of paper with you to hand to every big time business owner you come across.
A nice alternative to the bulky resume for those who are perusing the job market are networking cards. With the same shape and dimensions of a traditional business card, networking cards provide only the pertinent information so that prospective employers that you simply meet in passing don’t feel as bogged-down with your inquiry about a position.
Unless you are seeking a job in a more creative field (such as architecture, graphic arts or art restoration), which opens the door for a slightly more creative networking card, the design of a networking card needs to remain sleek and classy, as a resume would be.
Just like business cards, networking cards need to list your name (of course) and all your contact information such as home phone, mobile, e-mail, etc. You may want to consider including a picture of yourself on the card as well, so that the prospective employer can remember you more easily when they come across your card later.
Another item to consider implementing into your networking card is a single statement that encompasses your job objective, what it is you are looking to accomplish with a new career in the [fill in the blank] market. Sometimes narrowing your goals to one statement can be difficult. If that is the case, consider listing your strongest selling point. In other words, the strongest quality that you have to offer prospective employers.
You never know who your going to meet in your daily routine. And though it’s ideal to always have a resume available, it’s not always practical. Networking cards, much like business cards, are a great way to get your name out there, whether it be to a possible future boss directly, or someone who knows somebody who might be interested in talking to you about a position.
The bottom line is, if you’re searching for a new career, networking cards can be an effective tool for you. Design yours today!
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What Makes Women Entrepreneurs Different from Men?
Over the past few years, there has been a surge in business startups by female entrepreneurs. Today I’m going to discuss how the way women run things may be a bit different from how men play the game.
Stronger Focus on Values
It’s not that men don’t put values in the front lines of their company, but most women entrepreneurs make it the number one priority over everything else. According to Margaret Heffernan, who recently wrote How She Does It: How Women Entrepreneurs Are Changing the Rules of Business, women think about what their business will stand for before they start planning anything else.
Will Ask for Help
Many men (not all) have difficulty asking for help when it comes to something like their very own business. Pride can sometimes get in the way. But most women don’t have a problem admitting that they’re not sure how to accomplish a certain task or what needs to be done next in the building-a-business game. This can sometimes provide an advantage in a well-spring of knowledge from sources that help ground their business more quickly.
Focused on the Working Environment
According to Heffernan, male entrepreneurs see their businesses as a machine, while female entrepreneurs see it as a living organism. I can see where she’s coming from. Men may be more likely to take the position that “ bad parts” (employees) can easily be replaced with new and better functioning ones. Many male entrepreneurs may overlook the fact that the “ parts” are going bad because the machine as a whole is not in great condition. Some may take the position that a new employee here or there will help to make the business function better, rather than examining the whole business under a microscope to see if there may be underlying problems.
Women entrepreneurs tend to be on the other end of the spectrum with the perspective that, if the environment their employees are in isn’t working, then the entire “ ecosystem” of the business, if you will, could collapse. Basically, women entrepreneurs focus more on making sure the work environment is comfortable to obtain the best performance from their employees, rather than expecting the best from their employees despite the work environment.
Strength of the Business
Women entrepreneurs tend to focus on building a business so strong that it could function completely and successfully without them. Men build strong businesses, but often want to make sure they are always part of the central element that keeps things going. According to Heffernan, women entrepreneurs are more like the “ conductor of the symphony - the person who doesn’t make the noise, but pulls it all together.”
Source:
• BusinessWeek.com: Men Dominate, Women Orchestrate
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How to Secure Your Business Against Computer Viruses
Bank accounts, client information, protected business processes… all are right there in front of you and can be accessed with the touch of a button. Every business has a least one computer with all the crucial information contained within. Truthfully, a good business can’t run without a computer these days.
So why is it that, despite the obvious threats of hackers and the like that loom out in cyberspace, many business computers (and even personal computers) are not being properly protected? Even if you think you’re taking adequate precautions to protect yourself and your business, chances are, you’re missing one of the crucial elements that will leave a gaping hole in your system, making it fully accessible.
To properly and effectively protect your computer, be sure to follow these steps:
1. It is absolutely critical that your computer have an anti-virus scan program, such as Norton, Mcafee, or my personal favorite used on all my home and office machines Panda Internet Security 2007. Most new computers come with one installed, but only with about a year subscription to their services. Once that year runs out, you no longer have access to the updates required for continued protection, so always keep your subscription up to date. The yearly cost far outweighs the loss you could have if a virus attacked.
2. It is also imperative that you regularly update your anti-virus programs virus definitions. Typically you can set the program up to where it updates the definitions automatically, without even bothering you. This is efficient if your system is connected to the Internet 24/7. If not, be sure that the definitions are updated when you do connect. Without current virus definitions, your system is not protected from the latest bugs.
3. Make sure that your operating system, like Windows, is regularly updated as well. Again, you can set the system up to where it updates automatically, but even then it will occasionally ask you about certain updates. Typically these updates contain software security patches. These patches do exactly that, they patch up holes in the system that may give access to hackers and viruses.
4. Run virus scan often. At the very least, run it weekly, but more often will protect you better. Also, be sure to back up the documents, projects and information you have saved to your hard drive on a regular basis. If you’re using a server, have each computer user back-up their information to the server weekly. If not, I recommend backing-up to a flash drive or CD-R. Save information that you could not replace if the system were to crash.
If you do end up with a computer virus even after taking all the precautions possible (and it can happen at some point), there are steps to take to get rid of the problem. First and foremost, if the infected computer is connected to a network, immediately disconnect and isolate that computer. Some viruses are able to quickly spread to other computers on the network. Train your employees to take proper action when a problem surfaces.
Next, find the removal tool for that particular virus. Your anti-virus scan program can warn you that the virus exists and say that it is deleted, but 9 times out of 10, it’s not completely gone. You will typically need to use the removal tool, most of which can be found by doing an online search with “[virus name] removal.”
Once the virus is removed, be sure to do another virus scan, just to make sure. If the virus crashed your operating system, format and reinstall. This is where the backup that you’ve been running comes in handy. You can always reinstall programs, but cannot replace the information on those programs, such as the client bills for the last three years.
And finally, once everything is reinstalled, run virus scan again, just in case. You can never be too careful when it comes to computer viruses… ever.
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Demand for Healthy Pet Food Presents Business Opportunity
If you’re an animal lover and looking for a niche market to start a business in, then healthy pet food may be the product line for you. Following last month’s pet food recall, pet owners are on the prowl for a healthier alternative for their extended family members.
Canada’s Menu Foods, which produces dry and canned dog and cat food for over 50 brands, pulled over 60 million canned and pouch products off of store shelves after reports that the products were causing the deaths and illnesses of pets across the nation.
Upon further research, Menu Foods and the FDA discovered that the finished products manufactured between December 3, 2006 and March 6, 2007 contained melamine, which it typically used in making plastics. The contaminant coincided with the switch to a new distributor for the wheat gluten ingredient contained in the products (see Menu Foods’ March 30, 2007 press release).
Since the recall, sales have skyrocketed for a number of small businesses across the country that manufacture organic and/or chemical- and preservative-free cat and dog food. The Honest Kitchen out of San Diego, California reports four times the online orders and a 100% doubling in actual dollar amounts.
Many of these small businesses got their start by providing home cooked meals to their own pets. KosherPets in Ft. Lauderdale, Florida started after its owners couldn’t find anything on the market that would help their Dalmatian’s skin allergies. But once Martine Lacombe started making kosher meals for their dog, they saw immediate improvement.
The neighbors were so impressed they were asking where they could buy the food for their dogs, but there was nothing on the market. So, KosherPets was born in 2001, bringing in $10,000 it’s first year, $100,000 its second and is expected to rake in up to $500,000 this year.
Lucy Postins, founder of The Honest Kitchen states that, “people’s animals are like their babies…they enjoy participating in creating a meal for their cat or dog, rather than scooping something brown out of a can.”
I have three dogs at home, who are, in fact, much like children to me. I’m not ready to spend the extra cash on organic and preservative-free dog food, but I can definitely understand the appeal.
Many dogs develop skin allergies to the preservatives and chemicals in dog food, including my four year old Lab/Great Dane. Thankfully we have found a dog food that helps alleviate the problem, though not completely. If the organic products were more affordable, we would definitely switch. Maybe it just takes more entrepreneurs tapping into the market to make the products that are the best for our pets more readily available.
Source:
• BusinessWeek.com: A Growing Appetite for Healthy Pet Food
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Aprils Fools Day Office Pranks
I know I am one of the many who are guilty of dreaming up fabulous pranks that would have everyone in the office rolling… but I never have the nerve to actually follow through with pulling them off.
Entrepreneur.com’s Top 10 Office Pranks Exposed reveals some very inventive and hilarious office pranks that were pulled off, including the culprits. My personal top three from the list are:
• Placing a sticky-note on the bottom of a co-worker’s mouse that says “April Fools.” It may take a few minutes for her to figure out why his mouse doesn’t work, but it will sure produce a good chuckle.
• All the employees band together and call in sick the same morning about an hour before report time (particularly if a new hire is to start that same day). Then, everyone shows up to work at the same time, maybe with breakfast in tow.
• While the new technical service representative was out of the office, some employees of a printing company sent all of his equipment, including the computer monitor, through the shrink wrapping machine.
A sense of humor in the office is a must to get through the day, but be careful when planning a practical joke, because your job could be on the line. Be sure to think through all possible reactions from your co-workers and the consequences of such reactions. Also, be sure not to do anything that might hurt someone’s feelings or distract the rest of the work day.
And, above all else, be sure you know your boss and how he’ll react well enough before pulling a practical joke on him. Anything that embarrasses him or undermines his authority will quickly cost your job.
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Tips for Dealing with Calls from Upset Clients
Unfortunately we can’t please everyone and many times those who are unhappy in any way want to express it. I know because not only do I receive the calls, but sometimes I make them when I feel the customer service I received is lacking in some way.
So, what should you do when you’re on the receiving end of a call from an upset or irate client? There are many tactics to keep in mind, and though some may should cheesy, they can be very helpful in making the call end positively.
• First and foremost, listen and take notes. If you have to relay the situation to someone else, it’s important that you don’t get any of the information wrong.
• Stay positive, both in your tone and in your head. Thinking that the caller is being ridiculous will translate into your tone and will definitely not help the situation.
• Don’t talk down to or berate the client - always remember that their complaints are important to them and you should express an understanding of that.
• Do not take their complaint personally or become defensive. If you do you’re opening the opportunity for the conversation to quickly escalate to a bad one.
• Do not interrupt to defend yourself or the business. Only interrupt to detour the conversation back to a positive level if the client’s emotions begin to escalate.
• Express empathy to the client’s situation. Put yourself in their shoes and try and see their perspective. Not only will it make them feel better, but it will help you to discover the best solution to the problem.
• Take responsibility for your actions and apologize assertively when you personally have made a mistake (do not apologize for other employees, because that is admitting their fault in the situation when you’re probably only getting selective facts and perspective).
• Thank the client for sharing his concerns with you and try to find a solution you can both agree on, even if that means talking it over with other staff members and calling the client back with options.
There are always exceptions, but sticking to these simple guidelines will help you to turn the conversation with upset clients in a productive direction that will hopefully guide you to a resolution that everyone is happy with.
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Telephone Etiquette Tips - Handling Client Calls
I carry many hats working for a law firm. I am a legal assistant, billing clerk and also the receptionist. A couple of weeks ago I attended a seminar called “ How to Be an Outstanding Receptionist.” Not that I wasn’t any good at my job, but in recognition of the fact that no one is perfect and we all need improvement.
Most of the seminar was a refresher course, if you will, but there were some interesting topics and point that I thought useful for any business owner, not just the girl up front. One topic in particular was dealing with clientele over the phone.
Regardless of your position in a business, there are some things everyone should know:
Screening Calls
One key element for screening incoming calls is to avoid asking questions that can have a simple yes or no answer. For example, instead of asking, “ May I tell him your name please?” which can result in “ no” as response from the hostile client who feels her calls aren’t getting returned, simply say “ What is your name?” or “ Your name please.” You still may have hostile clients, but their options are much more limited. As long as you remain assertive and in control, you shouldn’t have many problems.
Fast Talkers
They’re out there… those people who can’t seem to talk slowly enough for you to understand them, let alone take down and name and number. One way to try and get them to slow down is to subtly slow your own speech. Many people will subconsciously catch on. Another option is to simply state that what they have to say is important to you and you want to be sure and catch everything so you would appreciate if they could talk a bit more slowly.
Chatters
Every grandma wants to talk about her beautiful grandchildren, it’s just that some of them want to tell you when three other phone lines are ringing. Try talking fast so that they get the impression that you’re in a hurry. Don’t asked open ended questions such as “What happened next?” Instead ask “What can I help you with today?” or “What is the issue at hand?”
An interesting statistic that the seminar leader threw at us is that 93% of communication is tone and body language and only 7% is that actual words. So always remain positive and talk with a smile (clients can tell) and the majority of your calls will have a positive outcome.
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A New Way for Employees to Get Paid
Some say that there will soon come a day when checks are no longer in existence. Well, how would you like to get paid by your employer with a debit card? Sounds a bit strange, but it’s catching on and here’s why:
Many businesses have employees, such as minors or new U.S. immigrants, that don’t hold bank accounts. When those employees receive their paycheck, they will pay up to 10% of the check in order to get it cashed. A recent alternative is providing employees with a payroll debit card.
Basically, the employer deposits funds in a payroll account and then distributes payroll debit cards to his employees. Each card has an amount attached to it that is equal to that of the employee’s paycheck for that pay period. The funds can be withdrawn from an ATM or the card used as a debit card at any retailer.
Not only does it save employees without bank accounts the expense of getting a check cashed, but it also saves the employer the expense of printing paper paychecks. Checks typically cost $1-2 to print, while it is only about twenty-cents to provide a payroll debit card.
There are still a few bugs left to work out, however. Most state laws require that employees get their entire paycheck on pay day. This could be a problem if the ATM machine has a withdrawal limit that is less the the employee’s paycheck amount. The employer may to have to pay extra ATM withdrawal fees for all of the funds to be accessible at once.
Not to mention the fact that changing over to a payroll debit card process (in addition to direct deposit) can be time consuming, as most employees would be wary of such a change at first. It would take some time to reassure them that the process is secure and efficient.
Payroll debit cards are clearly one of the first steps in the extinction of checks. Despite the wrinkles that remain in the process, it is definitely something that makes things a bit easier for the employee, and requires less paperwork for the employer, which is always a good thing.
Source:
• CNNMoney.com: The End of the Paycheck
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A New Way for Employees to Get Paid
Some say that there will soon come a day when checks are no longer in existence. Well, how would you like to get paid by your employer with a debit card? Sounds a bit strange, but it’s catching on and here’s why:
Many businesses have employees, such as minors or new U.S. immigrants, that don’t hold bank accounts. When those employees receive their paycheck, they will pay up to 10% of the check in order to get it cashed. A recent alternative is providing employees with a payroll debit card.
Basically, the employer deposits funds in a payroll account and then distributes payroll debit cards to his employees. Each card has an amount attached to it that is equal to that of the employee’s paycheck for that pay period. The funds can be withdrawn from an ATM or the card used as a debit card at any retailer.
Not only does it save employees without bank accounts the expense of getting a check cashed, but it also saves the employer the expense of printing paper paychecks. Checks typically cost $1-2 to print, while it is only about twenty-cents to provide a payroll debit card.
There are still a few bugs left to work out, however. Most state laws require that employees get their entire paycheck on pay day. This could be a problem if the ATM machine has a withdrawal limit that is less the the employee’s paycheck amount. The employer may to have to pay extra ATM withdrawal fees for all of the funds to be accessible at once.
Not to mention the fact that changing over to a payroll debit card process (in addition to direct deposit) can be time consuming, as most employees would be wary of such a change at first. It would take some time to reassure them that the process is secure and efficient.
Payroll debit cards are clearly one of the first steps in the extinction of checks. Despite the wrinkles that remain in the process, it is definitely something that makes things a bit easier for the employee, and requires less paperwork for the employer, which is always a good thing.
Source:
• CNNMoney.com: The End of the Paycheck
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New Technology Leaves Spell-Check in the Dust
We all use spell check. Admit it, you know you do. Even with a degree in English, spell check is critical to my daily routine at a law firm. What is incredibly frustrating is when I want to know more than if a word is spelled right. I want to know if the sentence actually makes sense and sounds professional or if there might be a word that would get my point across better. But spell check doesn’t tell me, and I wish something did.
Well, an Israeli software company called WhiteSmoke recognized the need and has developed an outstanding solution. Their program scans written English text and makes suggests of ways to improve sentence structure, make sentences clearer and more fluent to the English language, a.k.a. “text enrichment.”
The program provides specific suggestions for improvement of the document based upon relevant content and context, derived from the millions of English language documents stored in its data base. Everything from government and legal documents to newspapers to short stories.
What got this idea hopping was globalization and the fact that the internet is dominated with the English language. Important professional documents can be intimidating, but so can e-mails to clients and employers. WhiteSmoke’s program provides a means for communicating with others without your job hanging in the balance.
And WhiteSmoke’s number one buyer: the U.S, which isn’t surprising. Not only do our regional dialects, and lack of confidence, hinder the proper use of context and grammar, but there is also a tremendous demand among those who know English only as a second language. Even if they can speak fluently, English is an exceptionally difficult language to produce accurately on paper. WhiteSmoke’s software can reveal some serious stress in that department.
WhiteSmoke, whose name is derived from the Native American tradition of communicating with smoke signals, has made its software easy to download from the internet (simple Google or Yahoo! search “WhiteSmoke”). The basic program costs $79, while the executive version, which specializes in medical, legal and creative writing, will run about $250.
This is one of those ideas we all wish we would have thought of first. Regardless of whose idea it was, I get the feeling WhiteSmoke’s product will be a common additive to Microsoft Office in the years to come. And WhiteSmoke is already reaping the benefits of this innovative commodity.
Source:
• BusinessWeek.com: Software That Will This Sentence Fix
Tags: text enrichment
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Business Structures Help Fight War on Terror
That’s right, small businesses have what it takes. And the U.S. military is finally starting to see that. Recently, the Pentagon has been passing around The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman and Rod Beckstrom, a book originally written for businesses.
The basic idea of the book is that “ centralized organizations are like spiders and can be destroyed with an attack to the head . . . decentralized organizations transfer decision-making to leaders in the field [and] are like starfish – no single blow will kill them, and parts that are destroyed will grow back.”
Sound familiar? That’s because our war with terror is against organizations that are decentralized. We can take out leader after leader, but until we understand their mentality completely, we won’t get very far because there are leaders all over the place.
How does this connect to small business? Well, actually, many small businesses across the national have long embraced the “ starfish” mentality. Only now is the U.S. military catching on to the fact that they could learn a lot from fellow citizens on the home front.
A great example of a centralized organization (a “ spider”) is Enron. The CEO went down, and took everyone with him. That wouldn’t be the case with a decentralized business. Employees are split into parts of the whole unit based upon their task, given goals to achieve, and then all given equal opportunity to achieve them.
Everyone is trying to be the best, so everyone is doing their best, which results in a well-oiled, fit business machine. Each person is equally important to the best possible function of that machine. Granted, occasionally someone will malfunction, and may even slow the machine down a bit, but it quickly repairs itself.
And, yes, there is someone to answer to, but the idea of CEO is a bit different. Instead of always looking over your shoulder and giving orders, he is more or less there as a guide. What he tells you to do is more like a suggestion, and, out of respect (not fear), you take his advice.
Decentralized businesses don’t always work, however. As you might expect, there are instances where things get out of control… one or more people trying to take over, etc. It just depends on the number of employees and the personalities you’re dealing with. Decentralized businesses are for those who want to share the glory, not hoard it all for themselves.
It’s those weaknesses that our military intends to focus on in the war against terrorism. Taking hints from The Starfish and the Spider is a good start. We may just be well on our way to a victory… not to mention some rocking places to work.
Source:
• USAToday.com: Can Small Business Help Win the War?
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Competing for Business with a Former Employer
Imagine the scenario: you’ve been sitting behind a desk in a lonely cubical somewhere, punching numbers all day for a large accounting firm. And you’ve noticed a few things along the way… things you would do differently if you ran the place, things you would improve or expand on. Just about the time you’ve had enough of the claustrophobia, it hits you – why don’t you start your own accounting firm?
It’s a wonderful idea, but there are some things you should consider before attempting it on your own. If you don’t, you may be facing legal battles with your former employer.
Non-Compete Agreement
The first thing you must do is see if there was a non-compete agreement anywhere on the paperwork you signed when you were hired. Basically, a non-compete agreement protects a company for a given amount of time from competition after an employee leaves.
In other words, if you signed one, you may have to wait a year or more after you leave the large accounting firm to start your small one. You are also usually prohibited from adopting trade or operation secrets or snatching up clients from your former employer.
If you signed a Non-Compete Agreement, consult an attorney before you make any moves. They are often unenforceable, depending on the terms and the state you live in. Better to be safe than sorry though.
Be Honest
If you get along with your current employer, and especially if you consider yourselves friends, then just be upfront with him. Tell him you are planning to leave and go off on your own into the business world. Ask for pointers on how to get started.
You might even consider asking your boss to provide you with some networking connections he may have that aren’t clients to help get you started. The more credit you give your employer for helping point you in the entrepreneurial direction, the less likely he’ll be to pursue legal action against you.
It’s also important to not tell clients you are leaving before you have, as that would be deliberately undermining your loyalty to the company. Even if you’re not loyal in your heart, refrain from causing any form of sabotage, since it could easily bite you in the rear later.
Generally, it’s just best to protect yourself and be open about your plans. Most employers will respect your boldness to step out on your own without trying to pull them down. After all they were probably once in your shoes, so they understand the appeal.
Source:
• Entrepreneur.com: Starting a Business - and Not a Legal Battle
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Small Business Health Bill to Return to Senate
It was proposed last year, and didn’t make it through. But Senator Michael Enzi intends to sponsor the small business health care bill again this year, despite the opposition he’s facing from many angles.
The State Association of Attorney Generals, the American Caner Society and the American Diabetes Association have all expressed concerned about some holes in the bill in its current condition and want some changes made.
Let’s examine the current bill from both angles:
PROS
• Will allow small businesses to pool insurance policies together, much like large corporations and unions currently do.
• Will give many businesses, who otherwise couldn’t, a chance to provide health insurance to their employees.
• The more people in the insurance pool, the better the cost to each business owner.
• The insurance pool spreads the risk involved over a larger number of people, so it doesn’t hurt the pocket nearly as much if an employee in the pool were to get sick.
• It opens up more health care options.
CONS
• Coverage does not have to meet state requirements, which can result in large holes in the coverage provided. Important and all too common medical problems like diabetes and breast cancer might not be covered.
• The lack of requirements also allows business owners to provide their employees with a “bare-bones” policy that may covers very little of the fees associated with even routine doctor visits.
• May cause the price of services not covered under the policy to increase in order for medical providers to make up the difference.
• The lack of state oversight could eliminate customer protection on many levels.
With 41 state attorney generals signing their names in a letter of complaint about the holes in the bill, it is expected that Senator Enzi and his colleagues will have to go back to the drawing board to develop some sort of compromise.
But I truly feel they’re on the right track. Far too many people in this country are without health insurance and something needs to be done about that. Giving small businesses the means to provide coverage to their employees is the first step in disposing of the problem.
What do you think? Is the bill fine the way it is? Should changes be made? Are there other alternatives? Share your thoughts.
Source:
• CNNMoney.com: Senate fight over small-business health care
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