The Right Way to Fire An Employee ...added 7-18-10
By Nina Kaufman courtsey of FoxBusinss
They say that "breaking up is hard to do," and that certainly applies to giving an employee the heave-ho. Few business owners relish the conflict, the guilt and the fear of reprisal that often accompany the act of firing an employee. But sometimes you reach the point where you simply can't justify continuing to employ a particular worker. Maybe she can't seem to get the job done. Or maybe you've found him with his hand in the company till. Either way, you need to have the dreaded "termination conversation."
The keys to doing this well? Prepare in advance and document carefully. Here are five steps to help you navigate employee firings successfully:
They say that "breaking up is hard to do," and that certainly applies to giving an employee the heave-ho. Few business owners relish the conflict, the guilt and the fear of reprisal that often accompany the act of firing an employee. But sometimes you reach the point where you simply can't justify continuing to employ a particular worker. Maybe she can't seem to get the job done. Or maybe you've found him with his hand in the company till. Either way, you need to have the dreaded "termination conversation."
The keys to doing this well? Prepare in advance and document carefully. Here are five steps to help you navigate employee firings successfully:
- Try to avoid termination altogether. Many small-business owners get so wrapped up in the day-to-day operation of their business they forget to nurture and guide their employees. Feedback and performance targets give employees clear guidelines and expectations for what they need to do to keep their jobs. Nipping problems in the bud--rather than sticking your head in the sand hoping they'll go away--helps ensure that the firing doesn't come at the end of a volcanic explosion. Consider providing training or mentoring so employees have a viable opportunity to succeed.
- Keep tabs on targets. Employees may not "get it right" the first time, but you don't want to be teaching the same lessons 10 or 20 times. Give employees a reasonable period of time to get into the groove. If they can't (or won't), it's time to say goodbye. You have larger concerns--like business productivity and work force morale--to contend with.
- Call in the experts. Federal, state and local employment laws are a veritable minefield for small-business owners. You'll want to be able to prove that you fired the employee for good business reasons and that you handled the situation in a nondiscriminatory fashion. As the specter of long-term unemployment looms, employees bring lawsuits in the hope they will coax a more lucrative settlement out of their employers. They're frightened that, once fired, they'll have great difficulty finding another job with similar pay and benefits. Therefore, you want to be extra careful if you're firing employees in connection with a "reduction in force," or overall downsizing of your company. It may seem wise to let go of more senior, higher-paid staff; but if they're older, too, you could be violating age-discrimination laws. Let your human resources and legal advisors help you put the right procedures in place so this becomes a relative "no-brainer."
- Don't "wing it" when firing. Every word that comes out of your mouth could provide a hook for hanging yourself if you speak out of turn. You want to avoid the "it's not you, it's me" kind of babbling (as often happens with a breakup). Consider role-playing exercises or rehearsing in advance with your human resources/legal team. Choose your location wisely, too. The middle of a well-trafficked hallway will not provide you with the discretion and privacy you want in this situation.
- Talk about "next steps." For employees, getting fired is like being pushed off a cliff without a parachute (or bungee cord). They're at a loss and often may be speechless (although they should have seen this coming if you've worked through steps 1 and 2 with them without positive results). Know your policies and procedures concerning last paychecks, COBRA coverage and returning company property. Then get them out of there as soon as possible. You can be gracious about it, but you don't want disgruntled (now ex-) employees pilfering your Palm Pilot or poisoning the rest of the work force.
Five Mistakes That Doom Your Web Site ...added 7-10-10
By Meagn Hilts courtesy of FoxBusiness
As Blue Fountain Media's director of business development, I often find myself in the position of being the first person an entrepreneur or executive talks to.
Many of the clients who come to us are small-business owners, entrepreneurs and startups. While they are almost all intelligent, driven and savvy businesspeople, when it comes to understanding how the web works, a great majority have no idea how to use the web to their business's advantage.
This is not an indictment of my clients. Most web sites fail when it comes to delivering new leads, new clients and new revenue.
While every web site presents different issues, I'll address the most common mistakes one at a time:
1. No Web Presence at All
It's amazing how many companies doing business in 2010 have antiquated attitudes about the web. The most common thing I hear is: "I don't need a web site. My business is successful. The only reason I'm talking to you is because my nephew told me I have to be on the web." My answer to this is:
3. Lengthy Text
Most people don't understand that web messaging is vastly different from print messaging. Competition on the web is intense. If you don't capture your audience in five seconds, they will flee to a different site.
When clients come to us with dense and lengthy messaging--which happens all the time--we work with them to distill the message down to its essential elements. Once we can deliver the company's message quickly and efficiently, we then back up the messaging with clear and intuitive calls to action.
4. Stale ContentThink of your web site visitors as individuals engaged in an ongoing conversation with you. I've seen so many web sites where nothing ever changes. Nothing kills a "conversation" more than communicating with a person who has nothing new to say.
On the other hand, when there is constantly new and useful information throughout your web site, you give people a reason to keep coming back for more. This kind of "stickiness" helps create trust and inspires a loyal fan base. In practical terms, it helps turn visitors into customers.
It also increases your ability to be found via search engines such as Google. Fresh content shows your web site's value and expertise in your industry.
5. Believing in the old 'Build it and They Will Come' TheoryThe best web site in the world won't help your business if people don't know the site exists. When clients come to us, they'll often say, "Just build the web site; we're not really interested in spending money on marketing."
I try to tell them, in the nicest possible terms, that this is insanity. But not everyone listens.
The internet is all about interconnectivity. People are always looking for great sites, and they share the sites they like with others. To be successful, you need to tap into this internet community.
What does that mean?
The Bottom Line
Entrepreneurs are, by their very nature, risk takers. They have a dream, and go out and pursue it.
Building, maintaining and marketing a web site should not be a risky business. Small companies either looking to create a new web presence or enhance their current web presence should work with a web design and marketing team that understands the way business works on the web.
When looking for a web team to work with, make sure it can show you examples of sites that don't just look good. Make sure members of the team can demonstrate that they have built and marketed sites that have actually enhanced their clients' bottom line.
As Blue Fountain Media's director of business development, I often find myself in the position of being the first person an entrepreneur or executive talks to.
Many of the clients who come to us are small-business owners, entrepreneurs and startups. While they are almost all intelligent, driven and savvy businesspeople, when it comes to understanding how the web works, a great majority have no idea how to use the web to their business's advantage.
This is not an indictment of my clients. Most web sites fail when it comes to delivering new leads, new clients and new revenue.
While every web site presents different issues, I'll address the most common mistakes one at a time:
1. No Web Presence at All
It's amazing how many companies doing business in 2010 have antiquated attitudes about the web. The most common thing I hear is: "I don't need a web site. My business is successful. The only reason I'm talking to you is because my nephew told me I have to be on the web." My answer to this is:
- Your competitors are online.
- A significant percentage of your possible client/customer base is looking for your services/products online.
- A web site is a terrific way to brand your company. You have the power to put your products, services and even your executives in the best possible light.
- A web presence lets you take control of your company's online reputation. If the only search results that come up on a search of your company's name are out of your control, you put your brand in danger.
- Are the company's target clients/customers limited by geography (e.g., a New York City dermatologist)?
- Is there a target demographic (Age, ethnicity, income level)?
- How technologically savvy is the target audience?
3. Lengthy Text
Most people don't understand that web messaging is vastly different from print messaging. Competition on the web is intense. If you don't capture your audience in five seconds, they will flee to a different site.
When clients come to us with dense and lengthy messaging--which happens all the time--we work with them to distill the message down to its essential elements. Once we can deliver the company's message quickly and efficiently, we then back up the messaging with clear and intuitive calls to action.
4. Stale ContentThink of your web site visitors as individuals engaged in an ongoing conversation with you. I've seen so many web sites where nothing ever changes. Nothing kills a "conversation" more than communicating with a person who has nothing new to say.
On the other hand, when there is constantly new and useful information throughout your web site, you give people a reason to keep coming back for more. This kind of "stickiness" helps create trust and inspires a loyal fan base. In practical terms, it helps turn visitors into customers.
It also increases your ability to be found via search engines such as Google. Fresh content shows your web site's value and expertise in your industry.
5. Believing in the old 'Build it and They Will Come' TheoryThe best web site in the world won't help your business if people don't know the site exists. When clients come to us, they'll often say, "Just build the web site; we're not really interested in spending money on marketing."
I try to tell them, in the nicest possible terms, that this is insanity. But not everyone listens.
The internet is all about interconnectivity. People are always looking for great sites, and they share the sites they like with others. To be successful, you need to tap into this internet community.
What does that mean?
- You need a strong presence on the search engines. This requires an investment in search engine optimization and/or search engine marketing (pay-per-click).
- You need to get your voice out to the world. If you have a blog, then use blogger outreach to get the word out. The web is hungry for great content. If you produce useful and entertaining content, then the web community will be grateful. If you write useful articles, send them out to leading content aggregators (Digg, Reddit, etc.) to get more readership.
- Be an active participant in social media. Get the word out about your business and your web site by utilizing LinkedIn, Facebook and other social media outlets.
The Bottom Line
Entrepreneurs are, by their very nature, risk takers. They have a dream, and go out and pursue it.
Building, maintaining and marketing a web site should not be a risky business. Small companies either looking to create a new web presence or enhance their current web presence should work with a web design and marketing team that understands the way business works on the web.
When looking for a web team to work with, make sure it can show you examples of sites that don't just look good. Make sure members of the team can demonstrate that they have built and marketed sites that have actually enhanced their clients' bottom line.
10 Ways To Deny The Recession ...added 7-5-10
Strategies to grow your company in spite of tough times
by Paul Spiegelman courtesy of Entrepreneur Magazine
I saw a bumper sticker the other day that said "Refuse to Participate in the Recession." I have no idea if that driver had a job or was looking for one, but he was obviously electing to make the most of the challenges he faced.
Many say the U.S. economy is still in a recession based on the fact that unemployment is still high and consumers are continuing to temper their spending habits--two elements that define a recession. However, anyone with the desire to be an entrepreneur has to have the attitude of my friend with the bumper sticker.
So how does an entrepreneur succeed in a recession?
by Paul Spiegelman courtesy of Entrepreneur Magazine
I saw a bumper sticker the other day that said "Refuse to Participate in the Recession." I have no idea if that driver had a job or was looking for one, but he was obviously electing to make the most of the challenges he faced.
Many say the U.S. economy is still in a recession based on the fact that unemployment is still high and consumers are continuing to temper their spending habits--two elements that define a recession. However, anyone with the desire to be an entrepreneur has to have the attitude of my friend with the bumper sticker.
So how does an entrepreneur succeed in a recession?
- Become Indispensable
In a tricky economy, it's natural for people to want to protect the security they still have. In the service industry, one way to prove that your product or service is part of the solution is to point out the consequences that could occur if the service was not around. Try "secret shopping" your customers and document the outcomes; then secret shop a business that doesn't use your service or product. If there's an obvious difference, use these stories to sell your business back to your customers.
- Invest in the Future
Most recessions last only a year or two. Companies that fail to continually invest in business improvements, training and marketing are way behind when the economy recovers. In terms of training, consider how to cross-train your team members while business is slow. It may enable you to perform better later on.
- Seek Out Referrals
Nowadays, many businesses assume there are no sales to be made, so they stop trying and sit on the sidelines. While sales may be harder to come by, make contacts now so they will pay off later. Furthermore, if you're pulling back on your advertising budget, referrals may be your best bet for generating customers. You should also create a program that rewards current customers for referrals.
- Buy Weaker Companies
If you can manage the integration process, a down economy can be a great time to acquire a business.
- Strengthen Your ROI Pricing Offers
Customers often question the cost of a product or service because they can't always tie it to a result, and that scrutiny only increases in a bad economy. Offer pricing related to specific results. For example, I heard of a PR firm that only charges for placements, not advice, writing or strategy development. This approach enables the agency to charge more for its services, but customers know upfront what they're getting.
- Be Loyal and Focus on Retention
When the recession is over, your employees will be more likely to stick with you. This may mean eliminating free coffee, for example, but have an honest conversation with your employees, and they will usually help you cut costs even further.
- Maintain a Fun Environment
When companies cut out the fun, it can negatively impact employee job performance. If you've sponsored parties at work for years, continue these events. A consistent culture will encourage your staff to provide consistent service to your customers.
- Celebrate Being Small
Many smaller firms are more nimble than larger firms because they aren't loaded down by multiple management layers and overlapping operating units or debt, so they can make decisions quickly and focus their cash to take advantage of new opportunities
- Don't Leave Room for Doubt
Competitors will take advantage of any opening, and they will be more aggressive in making promises during the recession, even if it means filling in your silence with a few tales of their own. Don't open doors for them by closing down communications with your customers. Instead, increase the frequency of communications with your customers.
- Fight the Urge to Give Things Away
If you've been giving products and services away, it will be hard to charge for them again when the recession ends. Remember, if your product or service carries a benefit, it's worth charging for, even during a recession. However, for longtime customers who are having a hard time paying their bills, offer discounts and settlements. Offer this option as a one-time benefit, though, to get things current.
The natural urge is to hang onto every customer, but use the spare time the recession provides to analyze your customer base and find out which ones are the most profitable and which ones are costing you money.
Recessions aren't fun, but they don't have to cripple your business. Smart business owners leverage recessions rather than lament them. - Seek Out Referrals
5 Ways to Outshine the Competition ...added 6-28-10
Meet customers' needs in these critical areas to stand out from the crowd.
by Kim T Gordon Courtesy of Entrepreneur Magazine
Everywhere you turn, there's more competition. No matter what type of store or business you operate, there are bound to be others clamoring for your customers and your piece of the market. Plus, with consumers counting every penny and business purchasers scrutinizing expenditures like never before, winning over new customers and upselling old ones has become more challenging.
What will cause customers to buy from you rather than your competitors? The answer is to meet their needs in these five critical areas
Price
Getting this right is the first order of business. Nearly three-quarters of Americans say they're living a simpler life, spending less and being more frugal as a result of the recession, according to the latest American Pulse survey from BIGresearch. In fact, more than one-third of the survey respondents said that being able to pay their bills on time was a "luxury." In the face of this overwhelming need to fulfill shoppers' demand for affordability, it's essential to meet or beat the competition's pricing on selected front-line products and services. Then you can provide bundled services or additional products at more profitable price points.
Added Value
Online comparison shopping is the norm these days, and whether you sell online, offline or both, shoppers are looking for that little extra nudge when choosing where to make their final purchase. Free shipping, coupons and buy-one get-one sales are currently among the most popular incentives. You can also offer unique incentives, such as a special money-back guarantee or a free initial consultation, depending on your type of business, product or service. Evaluate what your unique customers need in this recession-era economy and create a special incentive that will motivate them to take action.
Convenience
Gone are the days of cheap gas and moms with unlimited time to shop. Now customers want and expect convenience, which accounts in part for the tremendous surge in online shopping. If you have an e-commerce website, streamline the checkout process, particularly for returning customers. Make it easy to find in-depth information about products and to make returns, and offer customer service via e-mail and by phone for shoppers who want immediate answers. Traditional brick-and-mortar store owners should re-evaluate hours of operation, as well as checkout wait times and staffing to ensure a speedy and convenient shopping experience, especially if working mothers are your bread and butter.
Trust
Customers are careful to spend their limited dollars wisely and are scrutinizing each purchase to make sure they're making a "safe" decision. They want to buy from companies they trust and believe in. Increasingly, shoppers are looking at business owners' backgrounds, the company history and even staff bios, and they want to learn what other customers have experienced. Recommendations from friends and peers--including consumer opinions posted online--are among the most trusted and can have the greatest influence on a purchase decision. So include testimonials, reviews or a message board on your website that helps customers understand why they should believe in your company and trust what you sell.
Conscience
Increasingly, consumers want to know you're a good corporate citizen. Businesses with a conscience care for their communities, others who are less fortunate and the world around them. Does your business engage in green practices? What are your charitable affiliations? Detail your activism on your website, in your company newsletter or through in-store promotions. Get involved at the local level and encourage your customers to participate, such as through food or clothing drives, or by cleaning up the local park. You'll establish a positive relationship with customers that sets you apart from your competition and motivates like-minded customers to buy from you.
Consumers are more knowledgeable and savvy than they've ever been, so it's crucial to differentiate your company. Use the tips above, and you'll be well on your way to making your company stand out in the crowd.
by Kim T Gordon Courtesy of Entrepreneur Magazine
Everywhere you turn, there's more competition. No matter what type of store or business you operate, there are bound to be others clamoring for your customers and your piece of the market. Plus, with consumers counting every penny and business purchasers scrutinizing expenditures like never before, winning over new customers and upselling old ones has become more challenging.
What will cause customers to buy from you rather than your competitors? The answer is to meet their needs in these five critical areas
Price
Getting this right is the first order of business. Nearly three-quarters of Americans say they're living a simpler life, spending less and being more frugal as a result of the recession, according to the latest American Pulse survey from BIGresearch. In fact, more than one-third of the survey respondents said that being able to pay their bills on time was a "luxury." In the face of this overwhelming need to fulfill shoppers' demand for affordability, it's essential to meet or beat the competition's pricing on selected front-line products and services. Then you can provide bundled services or additional products at more profitable price points.
Added Value
Online comparison shopping is the norm these days, and whether you sell online, offline or both, shoppers are looking for that little extra nudge when choosing where to make their final purchase. Free shipping, coupons and buy-one get-one sales are currently among the most popular incentives. You can also offer unique incentives, such as a special money-back guarantee or a free initial consultation, depending on your type of business, product or service. Evaluate what your unique customers need in this recession-era economy and create a special incentive that will motivate them to take action.
Convenience
Gone are the days of cheap gas and moms with unlimited time to shop. Now customers want and expect convenience, which accounts in part for the tremendous surge in online shopping. If you have an e-commerce website, streamline the checkout process, particularly for returning customers. Make it easy to find in-depth information about products and to make returns, and offer customer service via e-mail and by phone for shoppers who want immediate answers. Traditional brick-and-mortar store owners should re-evaluate hours of operation, as well as checkout wait times and staffing to ensure a speedy and convenient shopping experience, especially if working mothers are your bread and butter.
Trust
Customers are careful to spend their limited dollars wisely and are scrutinizing each purchase to make sure they're making a "safe" decision. They want to buy from companies they trust and believe in. Increasingly, shoppers are looking at business owners' backgrounds, the company history and even staff bios, and they want to learn what other customers have experienced. Recommendations from friends and peers--including consumer opinions posted online--are among the most trusted and can have the greatest influence on a purchase decision. So include testimonials, reviews or a message board on your website that helps customers understand why they should believe in your company and trust what you sell.
Conscience
Increasingly, consumers want to know you're a good corporate citizen. Businesses with a conscience care for their communities, others who are less fortunate and the world around them. Does your business engage in green practices? What are your charitable affiliations? Detail your activism on your website, in your company newsletter or through in-store promotions. Get involved at the local level and encourage your customers to participate, such as through food or clothing drives, or by cleaning up the local park. You'll establish a positive relationship with customers that sets you apart from your competition and motivates like-minded customers to buy from you.
Consumers are more knowledgeable and savvy than they've ever been, so it's crucial to differentiate your company. Use the tips above, and you'll be well on your way to making your company stand out in the crowd.
The Customer Satisfaction Survey Snag ...added 5-30-10
By Kevin P. Coyne Courtesy of Bloomberg BusinessWeek Magazine
Satisfaction isn't enough. If you mean to beat the competition, your surveys should measure customer loyalty…
Customer satisfaction has been a major business buzz phrase for more than a decade. In his 2001 book, The Loyalty Effect, Fred Reichheld claimed that customer loyalty is a dominant determinant of success in business. He purported, for example, that a 5% improvement in customer retention for an advertising agency can create a 95% increase in average profit per customer over time. He claims similar (though less extreme) effects in most other industries.
To address the loyalty question, consultants often persuade companies to spend time and money trying to ensure that they know precisely how pleased their customers are. Theoretically, this is vitally important information. Empirically, however, it can be of little worth. In our experience, many large companies kid themselves about how accurate a picture they really get. So how do you get truly worthwhile feedback?
A survey conducted by a client of mine, a large phone company, revealed that 94% of customers were "completely satisfied" with their experience. However, in a separate, concurrent survey conducted by the same company, 30% of customers claimed that given the option, they would switch to a new provider. The former survey indicated only 6% of their entire customer base is less than completely satisfied. Assuming those 6% were among those who would switch, at least 24% of their customers who claimed complete satisfaction felt no loyalty to the company.
The problem is, companies are interpreting satisfaction to mean loyalty. Sure, a customer may be satisfied, but if the customer believes she would be equally (or better) satisfied with any other provider, she'll switch. A new scale is required to measure loyalty. In this new scale, the middle answer is "Perfect. I have no complaints. On the other hand, I didn't feel it was anything special." Frankly, this is likely what most of your customers actually think about you. This level indicates that you can expect an average rate of attrition from this group. All else being equal, you will lose your customers at the same rate as your competitors.
BETTER THAN THE REST? The next-higher rating should be "Better than I could expect from another provider." Here, loyalty begins to assert itself. However, be careful interpreting results in these tough economic times. Recent University of Michigan surveys on the fast-food industry show that the recession is causing consumers to be willing to reduce their own "total satisfaction" in favor of "purely the lowest price."
If you want to measure the ultimate test of loyalty—the willingness to tell friends—the top rating should be "This was so great I will mention it in conversation later today." (Remember that your customer has lots of things to talk to friends about—a referral only comes when your product makes it to the top of that list.)
As anyone who has had a car repaired lately knows, as you leave the dealership, the salesman lets you know that you will be getting a call about feedback. He also informs you that the company's goal is a perfect score, that anything less is considered unacceptable, and asks if there's anything he can do to make that happen. While the guidance is disguised as an offer of service, you know very clearly what they really care about is getting a good score. When you indulge the company that way, its employees never learns that you really didn't think they were anything special.
Long ago, research about marketing showed that customers will phrase their reactions in whatever way you coach them to. Coaching is insidious because it teaches your customers to phrase "I have no complaints" in a way that you interpret as "I loved it and could not possibly be happier." Employees at one hospital recently achieved the pinnacle of coaching. They were given preprinted cards providing guidance on how to answer any survey questions ("we want to be a perfect five")—just to avoid any misunderstanding on our part as to what box to check.
PERILS OF COACHING There are hidden costs to such coaching. Take, for example, the recent experience of a friend who works at a large bank. She had assisted a customer in opening a new account but did not coach him on how to respond to the survey. The surveyor used a seven-point Likert scale (agree, strongly agree, etc.), and she received a score of 6.5. As a result of getting a less than perfect store, she was required to attend additional training.
Did she provide sub-perfect service? Perhaps. Should companies strive for perfection? Absolutely. However, how do you figure that a 6.5 out of 7 justifies the cost of additional training? Unless the bank is training the entire staff at all times (and we know it isn't), it must be getting perfect scores (in this case, 7's) for more than 95% of its staff. As customers of that bank, we feel pretty confident that its actual service level is only a bit better than average. But the executives don't know that. They believe the feedback that is inflated by coaching.
Many executives fail to understand that their subordinates have erected barriers to avoid negative feedback. Employees of some companies can actually block certain customers—ones they believe would give them negative feedback—from getting survey calls. In addition, some companies make it almost impossible to give unsolicited feedback. After a recent terrible car-repair experience, we were not called (surprise!), so we tried to contact the dealership's survey function. It was nearly impossible.
Being on top of your negative feedback is more important than ever because of the transparency created by the Internet. If customers can't tell you, they will tell someone. Instead of only telling a few friends, your customers can participate in forums that allow them to share their feedback, positive or negative, with anyone and everyone who might go looking for it. Every product failing is meticulously detailed on any one of dozens of Web sites that include customer message boards. Remember that the tech-savvy are wont to seek input from such forums before any major purchasing decision.
In this economic climate, no company wants to waste money. You save money by eliminating misleading loyalty studies—and bad business practices. Focus on changing the ways you gather feedback, and you'll get a reading on your customers' true level of satisfaction.
Satisfaction isn't enough. If you mean to beat the competition, your surveys should measure customer loyalty…
Customer satisfaction has been a major business buzz phrase for more than a decade. In his 2001 book, The Loyalty Effect, Fred Reichheld claimed that customer loyalty is a dominant determinant of success in business. He purported, for example, that a 5% improvement in customer retention for an advertising agency can create a 95% increase in average profit per customer over time. He claims similar (though less extreme) effects in most other industries.
To address the loyalty question, consultants often persuade companies to spend time and money trying to ensure that they know precisely how pleased their customers are. Theoretically, this is vitally important information. Empirically, however, it can be of little worth. In our experience, many large companies kid themselves about how accurate a picture they really get. So how do you get truly worthwhile feedback?
A survey conducted by a client of mine, a large phone company, revealed that 94% of customers were "completely satisfied" with their experience. However, in a separate, concurrent survey conducted by the same company, 30% of customers claimed that given the option, they would switch to a new provider. The former survey indicated only 6% of their entire customer base is less than completely satisfied. Assuming those 6% were among those who would switch, at least 24% of their customers who claimed complete satisfaction felt no loyalty to the company.
The problem is, companies are interpreting satisfaction to mean loyalty. Sure, a customer may be satisfied, but if the customer believes she would be equally (or better) satisfied with any other provider, she'll switch. A new scale is required to measure loyalty. In this new scale, the middle answer is "Perfect. I have no complaints. On the other hand, I didn't feel it was anything special." Frankly, this is likely what most of your customers actually think about you. This level indicates that you can expect an average rate of attrition from this group. All else being equal, you will lose your customers at the same rate as your competitors.
BETTER THAN THE REST? The next-higher rating should be "Better than I could expect from another provider." Here, loyalty begins to assert itself. However, be careful interpreting results in these tough economic times. Recent University of Michigan surveys on the fast-food industry show that the recession is causing consumers to be willing to reduce their own "total satisfaction" in favor of "purely the lowest price."
If you want to measure the ultimate test of loyalty—the willingness to tell friends—the top rating should be "This was so great I will mention it in conversation later today." (Remember that your customer has lots of things to talk to friends about—a referral only comes when your product makes it to the top of that list.)
As anyone who has had a car repaired lately knows, as you leave the dealership, the salesman lets you know that you will be getting a call about feedback. He also informs you that the company's goal is a perfect score, that anything less is considered unacceptable, and asks if there's anything he can do to make that happen. While the guidance is disguised as an offer of service, you know very clearly what they really care about is getting a good score. When you indulge the company that way, its employees never learns that you really didn't think they were anything special.
Long ago, research about marketing showed that customers will phrase their reactions in whatever way you coach them to. Coaching is insidious because it teaches your customers to phrase "I have no complaints" in a way that you interpret as "I loved it and could not possibly be happier." Employees at one hospital recently achieved the pinnacle of coaching. They were given preprinted cards providing guidance on how to answer any survey questions ("we want to be a perfect five")—just to avoid any misunderstanding on our part as to what box to check.
PERILS OF COACHING There are hidden costs to such coaching. Take, for example, the recent experience of a friend who works at a large bank. She had assisted a customer in opening a new account but did not coach him on how to respond to the survey. The surveyor used a seven-point Likert scale (agree, strongly agree, etc.), and she received a score of 6.5. As a result of getting a less than perfect store, she was required to attend additional training.
Did she provide sub-perfect service? Perhaps. Should companies strive for perfection? Absolutely. However, how do you figure that a 6.5 out of 7 justifies the cost of additional training? Unless the bank is training the entire staff at all times (and we know it isn't), it must be getting perfect scores (in this case, 7's) for more than 95% of its staff. As customers of that bank, we feel pretty confident that its actual service level is only a bit better than average. But the executives don't know that. They believe the feedback that is inflated by coaching.
Many executives fail to understand that their subordinates have erected barriers to avoid negative feedback. Employees of some companies can actually block certain customers—ones they believe would give them negative feedback—from getting survey calls. In addition, some companies make it almost impossible to give unsolicited feedback. After a recent terrible car-repair experience, we were not called (surprise!), so we tried to contact the dealership's survey function. It was nearly impossible.
Being on top of your negative feedback is more important than ever because of the transparency created by the Internet. If customers can't tell you, they will tell someone. Instead of only telling a few friends, your customers can participate in forums that allow them to share their feedback, positive or negative, with anyone and everyone who might go looking for it. Every product failing is meticulously detailed on any one of dozens of Web sites that include customer message boards. Remember that the tech-savvy are wont to seek input from such forums before any major purchasing decision.
In this economic climate, no company wants to waste money. You save money by eliminating misleading loyalty studies—and bad business practices. Focus on changing the ways you gather feedback, and you'll get a reading on your customers' true level of satisfaction.
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What should companies that still hope to snag unclaimed names do? Altman says there are plenty of words available to go along with extensions like .net. But most consumers expect for-profit companies to have .com names. "Dot-com is just where customers' minds are," says Bob Parsons, founder of Go Daddy, the largest registrar of domain names. Christopher Johnson, author of the blog The Name Inspector, says that longer domain names can be just as effective as shorter names so long as they have "recognizable parts," like Craigslist or Photobucket.
As available names dry up, entrepreneurs are scrounging around for what's left. David Rusenko, the founder and CEO of a website and blog-building service, wrote a software program that randomly generated short, pronounceable names available for purchase. A lot of the names the program spit out contained multiple z's, but Rusenko found his name, Weebly, within a few hours. (The runner-up was Moovo.) Weebly "sounds more like a kid's toy," one blogger wrote. Rusenko disagrees. "It's short, it's brandable, and people remember it," he says. |
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Good Domain Names Grow Scarce ...added 5-20-10
Most of the good, short words you would want for making a great domain name are already taken
By Max Chafkin, Courtesy of Inc Magazine
Eli Altman has been naming things for most of his life. At age 6, he helped his father, Danny Altman, the founder of the San Francisco branding consultancy A Hundred Monkeys, on a naming project for the toy storeFAO Schwarz. He has named 400 companies and brands since and joined his dad's business in 2002.
But a couple of years ago, Altman started noticing what he saw as a distasteful trend: a wave of nonsensical names. Whereas the rules of English usage dictate that an e or an o usually precedes an r, entrepreneurs were starting companies with names such as Flickr, Socializr, and Touristr. Others were doubling or even tripling theiro's, i's, and u's -- as in Zooomr, Rowdii, Yuuguu, and even Oooooc. With the rise of the Internet, names made of words that mean something, like Apple Computer, went out of favor. "Everyone wants these short, catchy names," says Altman.
Web addresses are cheap -- less than $10 a year in most cases -- and trillions of them are still available. The problem is that short, pronounceable names ending with the popular .com extension are increasingly rare. "All the normal words in spoken English are taken," Altman says. "Any short combination of letters and numbers is taken. Anything good under six letters is taken." The result has been a proliferation of silly-sounding company names, with a recent trend toward handles that sound as if they might have come from science fiction. (One software company set up a website that challenges readers to discern between companies and Star Wars characters. For instance, Sebulba is from the fictional planet Malastare; Oyogi is a software maker in Raleigh, North Carolina.)
Some 80 million .com domain names are currently registered, a bit more than 800 times the number of domain-friendly words in Project Gutenberg's online dictionary. Registered names proliferated after Google introduced its automated advertising system, AdSense, in 2003. The service made domain speculation -- or domaining -- a much more profitable business, allowing domainers to buy names and hold on to them indefinitely while making money with advertising.
Today, millions of names are available on auction sites such as Sedo.com and SnapNames.com, at prices that range from a few hundred dollars to hundreds of thousands of dollars. ZX8.com was recently on offer for $330, while Mouse.com was going for $350,000.
By Max Chafkin, Courtesy of Inc Magazine
Eli Altman has been naming things for most of his life. At age 6, he helped his father, Danny Altman, the founder of the San Francisco branding consultancy A Hundred Monkeys, on a naming project for the toy storeFAO Schwarz. He has named 400 companies and brands since and joined his dad's business in 2002.
But a couple of years ago, Altman started noticing what he saw as a distasteful trend: a wave of nonsensical names. Whereas the rules of English usage dictate that an e or an o usually precedes an r, entrepreneurs were starting companies with names such as Flickr, Socializr, and Touristr. Others were doubling or even tripling theiro's, i's, and u's -- as in Zooomr, Rowdii, Yuuguu, and even Oooooc. With the rise of the Internet, names made of words that mean something, like Apple Computer, went out of favor. "Everyone wants these short, catchy names," says Altman.
Web addresses are cheap -- less than $10 a year in most cases -- and trillions of them are still available. The problem is that short, pronounceable names ending with the popular .com extension are increasingly rare. "All the normal words in spoken English are taken," Altman says. "Any short combination of letters and numbers is taken. Anything good under six letters is taken." The result has been a proliferation of silly-sounding company names, with a recent trend toward handles that sound as if they might have come from science fiction. (One software company set up a website that challenges readers to discern between companies and Star Wars characters. For instance, Sebulba is from the fictional planet Malastare; Oyogi is a software maker in Raleigh, North Carolina.)
Some 80 million .com domain names are currently registered, a bit more than 800 times the number of domain-friendly words in Project Gutenberg's online dictionary. Registered names proliferated after Google introduced its automated advertising system, AdSense, in 2003. The service made domain speculation -- or domaining -- a much more profitable business, allowing domainers to buy names and hold on to them indefinitely while making money with advertising.
Today, millions of names are available on auction sites such as Sedo.com and SnapNames.com, at prices that range from a few hundred dollars to hundreds of thousands of dollars. ZX8.com was recently on offer for $330, while Mouse.com was going for $350,000.
Pricing Web Hosting ...added 5-14-10
With today’s emerging technologies and the increasing demand for a wider range of services, the Web hosting landscape has exploded into an array of complex, specialized categories.
“The Web hosting industry has always been driven by evolving customer needs and advances in technology,” says Reed Caldwell, founder and CEO of ServInt, a managed hosting provider that’s experienced its own evolution during 15 years of service. “As modern Web content has become woven into the fabric of our daily lives, the hosting industry has adapted to better meet customers’ high expectations for uptime, performance, managed services, security and social responsibility.”
Which is all good news for anyone shopping for a Web host in today’s heavily tilted buyer’s market. Whether you are in the development stages of a one-person startup or you have enjoyed a successful Web presence for decades, it never hurts to take a quick refresher course in the current costs of Web hosting.
Shared hosting is the most affordable and most popular option, and today’s fees start at just a few dollars per month. The upside is that you’ll receive unlimited bandwidth and storage space for little money. The downside is that you’ll be sharing a server with others — creating the potential for security issues or lapses in performance.
But millions of satisfied customers share their Web hosting services, and there are a staggering amount of reputable, professional companies from which to choose. There are also dozens of shared Web hosting review sites, and one of the most helpful and informative is www.alreadyhosting.com.
“The shared hosting industry is to a point now that companies are just about at the break-even threshold and most of their money comes from upsells,” says Josh Ewin of Dedicated Now, a 12-year-old managed dedicated server company. “The reseller business has grown so much over the past few years and there are so many Mom and Pop companies that providers are realizing they have to offer customers more than just low prices.”
Some shared hosts will offer dedicated IPs and private SSLs for added security, nudging the monthly fee past the $10 mark and into the $12-$15 range. If you’re still not comfortable with the shared-server concept at that price, consider dedicated and managed hosting, where the host supplies a dedicated server of which the customer has exclusive use. Dedicated monthly fees can start as low as $59 per month, but they average closer to $250-$300 and can top out just above four figures, depending on the robustness of the network, the quality of the hardware and the range of services provided.
“You have to look at web hosting as a service the same way you view transportation as a service,” says Ewin. “There are different price structures for different vehicles, and you can expect to pay much less to ride in a Geo than you would in a Bentley. In the last 18 months or so, companies are really realizing the value of adding in significant management services.”
Yet another option that falls between shared server hosting and dedicated or managed hosting is Virtual Private Server (VPS) hosting. This is a form of shared hosting that allows website operators more control over hardware, software and access through a private area on the server used only by them. This is a logical and popular way to transition into dedicated and shared hosting for a more affordable cost of about $50 to $150 per month, again depending on bandwidth and storage requirements.
“The Web hosting industry has always been driven by evolving customer needs and advances in technology,” says Reed Caldwell, founder and CEO of ServInt, a managed hosting provider that’s experienced its own evolution during 15 years of service. “As modern Web content has become woven into the fabric of our daily lives, the hosting industry has adapted to better meet customers’ high expectations for uptime, performance, managed services, security and social responsibility.”
Which is all good news for anyone shopping for a Web host in today’s heavily tilted buyer’s market. Whether you are in the development stages of a one-person startup or you have enjoyed a successful Web presence for decades, it never hurts to take a quick refresher course in the current costs of Web hosting.
Shared hosting is the most affordable and most popular option, and today’s fees start at just a few dollars per month. The upside is that you’ll receive unlimited bandwidth and storage space for little money. The downside is that you’ll be sharing a server with others — creating the potential for security issues or lapses in performance.
But millions of satisfied customers share their Web hosting services, and there are a staggering amount of reputable, professional companies from which to choose. There are also dozens of shared Web hosting review sites, and one of the most helpful and informative is www.alreadyhosting.com.
“The shared hosting industry is to a point now that companies are just about at the break-even threshold and most of their money comes from upsells,” says Josh Ewin of Dedicated Now, a 12-year-old managed dedicated server company. “The reseller business has grown so much over the past few years and there are so many Mom and Pop companies that providers are realizing they have to offer customers more than just low prices.”
Some shared hosts will offer dedicated IPs and private SSLs for added security, nudging the monthly fee past the $10 mark and into the $12-$15 range. If you’re still not comfortable with the shared-server concept at that price, consider dedicated and managed hosting, where the host supplies a dedicated server of which the customer has exclusive use. Dedicated monthly fees can start as low as $59 per month, but they average closer to $250-$300 and can top out just above four figures, depending on the robustness of the network, the quality of the hardware and the range of services provided.
“You have to look at web hosting as a service the same way you view transportation as a service,” says Ewin. “There are different price structures for different vehicles, and you can expect to pay much less to ride in a Geo than you would in a Bentley. In the last 18 months or so, companies are really realizing the value of adding in significant management services.”
Yet another option that falls between shared server hosting and dedicated or managed hosting is Virtual Private Server (VPS) hosting. This is a form of shared hosting that allows website operators more control over hardware, software and access through a private area on the server used only by them. This is a logical and popular way to transition into dedicated and shared hosting for a more affordable cost of about $50 to $150 per month, again depending on bandwidth and storage requirements.
Entrepreneurs turn to business schools for help ...added 5-10-10
CHICAGO (Reuters.com) - Vanessa Smith McTier knew she needed to focus more attention on promotional activities for her growing human resources consulting business. Her challenge was finding the extra time and resources when she was already stretched sourcing and delivering billable projects.
Rather than turn to another consulting firm, at the suggestion of a trusted friend McTier and her company, Chicago-based Vantage Solutions LLC, sought help from what is proving to be a growing and practical resource for small businesses around the country: qualified students at local business schools.
"The biggest challenge for a small business owner is stepping back to get the macro view," said McTier, a human resources attorney whose full-service firm undertakes work ranging from litigation support to recruiting and the development of employee handbooks and training manuals. "They did a really thorough and very thoughtful job."
Over the course of a semester, McTier worked with a graduate at the University of Illinois at Chicago's College of Business Administration to improve her firm's Web presence. Under the oversight of a faculty advisor, the student analyzed Vantage's website, identified shortcomings relative to rivals in the HR consulting space and delivered a report on recommended steps to make the firm's online experience more compelling.
Victoria Gheorghe, who runs the program out of the Illinois Small Business Development Center at UIC, said she has seen increased interest as the economic downturn has worn on. Last semester, the school selected 20 projects from 50 that were eligible, up from a pool of about 25 projects that qualified the previous year.
Gheorghe currently oversees teams of two to six students - both graduate and undergraduate - tasked with tackling projects spanning the small business consulting spectrum: new product development, strategic planning, finance, marketing and operations, to name a few. Each group is overseen by a faculty advisor.
"It's experiential learning - it's not a book, it's not a case study," said Gheorghe, noting the diverse roster of business clients assisted by the program has included a recording studio, a construction firm, a security services firm and a retail handbag company. "We oversee their work, so the companies feel comfortable."
The school promotes the program through local chambers of commerce, women's business development centers and related outreach groups. To qualify, small businesses in Illinois must demonstrate a track record of revenue growth and have at least three employees. They can apply online; if accepted, they pay nothing other than administrative fees for the students' services.
STUDENTS HELPING STARTUPS
Similar programs appear to be gaining popularity across the country, as cash-sensitive small businesses look for money-saving alternatives and more startups enter the fray in the wake of corporate layoffs. Business schools, large and small, have expanded their push to get more students into the field before graduation.
"I think there's a growing number of folks at the early stage in need of help; a lot of times they don't have the resources," said Mark Biddle, director of experiential learning at Babson College's F.W. Olin Graduate School of Business outside of Boston, Massachusetts. "We're getting an increasing number of startups."
Babson, which offers experiential learning primarily to second-year MBAs, has even added specialized tracks such as a program focused on sustainability projects for enterprises involved in alternative energy like wind and solar power, in keeping with the growing green movement.
Each student typically logs about 10 hours a week toward their project, said Biddle, noting teams often draw from graduate students with extensive prior career training, including those with backgrounds in engineering and medicine. Some 60 percent of clients polled said the information delivered from student projects was instrumental in their business decision-making.
"With students, you get a fresh perspective; they're passionate about it, they want to put these things on a resume," said Biddle. "Clients have said that student reports were better than the professional reports they would pay for."
Some university programs have expanded beyond project-based interaction with companies. At Ohio University's College of Business in Athens, Ohio, for instance, MBA students can sign on to assist a select group of small businesses in the mainly rural and economically challenged Appalachian region. To date, the program has helped more than 700 businesses.
"What we're doing here is basically creating a consulting organization," said Kevin Aspegren, who runs the program out of OU's Voinovich School for Leadership and Public Affairs. "We work with existing small businesses that are hurting and those that are doing well but want to do better. We work with new entities that aren't even created yet."
Of course, there are some downsides for businesses working with students. Given most projects are undertaken over the course of semester, those requiring quick turnarounds work best for entrepreneurs. The same goes for assignments containing highly sensitive information.
But in many cases, the benefits of low- or no-cost labor and the high degree of students' enthusiasm can outweigh inconveniences. Back in Chicago, McTier said she was so impressed by the results from her first experience with UIC that she has again turned to the school for help with another project.
This time around, a team of nine undergraduates has been engaged to develop a social-media strategy for her consulting firm, which has grown to 12 full-time employees and 30 outside contractors.
"The group is just amazing, the level of maturity, professionalism, thoroughness, (is) just like I would want any of my consultants to do for a clients," McTier said.
Rather than turn to another consulting firm, at the suggestion of a trusted friend McTier and her company, Chicago-based Vantage Solutions LLC, sought help from what is proving to be a growing and practical resource for small businesses around the country: qualified students at local business schools.
"The biggest challenge for a small business owner is stepping back to get the macro view," said McTier, a human resources attorney whose full-service firm undertakes work ranging from litigation support to recruiting and the development of employee handbooks and training manuals. "They did a really thorough and very thoughtful job."
Over the course of a semester, McTier worked with a graduate at the University of Illinois at Chicago's College of Business Administration to improve her firm's Web presence. Under the oversight of a faculty advisor, the student analyzed Vantage's website, identified shortcomings relative to rivals in the HR consulting space and delivered a report on recommended steps to make the firm's online experience more compelling.
Victoria Gheorghe, who runs the program out of the Illinois Small Business Development Center at UIC, said she has seen increased interest as the economic downturn has worn on. Last semester, the school selected 20 projects from 50 that were eligible, up from a pool of about 25 projects that qualified the previous year.
Gheorghe currently oversees teams of two to six students - both graduate and undergraduate - tasked with tackling projects spanning the small business consulting spectrum: new product development, strategic planning, finance, marketing and operations, to name a few. Each group is overseen by a faculty advisor.
"It's experiential learning - it's not a book, it's not a case study," said Gheorghe, noting the diverse roster of business clients assisted by the program has included a recording studio, a construction firm, a security services firm and a retail handbag company. "We oversee their work, so the companies feel comfortable."
The school promotes the program through local chambers of commerce, women's business development centers and related outreach groups. To qualify, small businesses in Illinois must demonstrate a track record of revenue growth and have at least three employees. They can apply online; if accepted, they pay nothing other than administrative fees for the students' services.
STUDENTS HELPING STARTUPS
Similar programs appear to be gaining popularity across the country, as cash-sensitive small businesses look for money-saving alternatives and more startups enter the fray in the wake of corporate layoffs. Business schools, large and small, have expanded their push to get more students into the field before graduation.
"I think there's a growing number of folks at the early stage in need of help; a lot of times they don't have the resources," said Mark Biddle, director of experiential learning at Babson College's F.W. Olin Graduate School of Business outside of Boston, Massachusetts. "We're getting an increasing number of startups."
Babson, which offers experiential learning primarily to second-year MBAs, has even added specialized tracks such as a program focused on sustainability projects for enterprises involved in alternative energy like wind and solar power, in keeping with the growing green movement.
Each student typically logs about 10 hours a week toward their project, said Biddle, noting teams often draw from graduate students with extensive prior career training, including those with backgrounds in engineering and medicine. Some 60 percent of clients polled said the information delivered from student projects was instrumental in their business decision-making.
"With students, you get a fresh perspective; they're passionate about it, they want to put these things on a resume," said Biddle. "Clients have said that student reports were better than the professional reports they would pay for."
Some university programs have expanded beyond project-based interaction with companies. At Ohio University's College of Business in Athens, Ohio, for instance, MBA students can sign on to assist a select group of small businesses in the mainly rural and economically challenged Appalachian region. To date, the program has helped more than 700 businesses.
"What we're doing here is basically creating a consulting organization," said Kevin Aspegren, who runs the program out of OU's Voinovich School for Leadership and Public Affairs. "We work with existing small businesses that are hurting and those that are doing well but want to do better. We work with new entities that aren't even created yet."
Of course, there are some downsides for businesses working with students. Given most projects are undertaken over the course of semester, those requiring quick turnarounds work best for entrepreneurs. The same goes for assignments containing highly sensitive information.
But in many cases, the benefits of low- or no-cost labor and the high degree of students' enthusiasm can outweigh inconveniences. Back in Chicago, McTier said she was so impressed by the results from her first experience with UIC that she has again turned to the school for help with another project.
This time around, a team of nine undergraduates has been engaged to develop a social-media strategy for her consulting firm, which has grown to 12 full-time employees and 30 outside contractors.
"The group is just amazing, the level of maturity, professionalism, thoroughness, (is) just like I would want any of my consultants to do for a clients," McTier said.
Branding Lessons From The Star Of 'Shark Tank' ...added 5-3-10
By Benjamin Tompkins - Courtesy of Forbes
Large company or small, Daymond John argues that its image is what ultimately matters.
Daymond John is founder and owner of FUBU, star of the ABC series Shark Tank, and a corporate branding consultant. He has been named Marketer of the Year by Brandweek and New York Entrepreneur of the Year by Ernst & Young. In his new book, The Brand Within: How We Brand Ourselves, From Birth To The Boardroom, John draws from his experience over almost two decades in the fashion business to explore the loyalty-based relationships between brands and customers.
Recently, John spoke with InformationWeek SMB about the importance of branding for businesses of any size, the relationship between personal brands and business brands, and why the Treasury Department is the only organization that doesn't need to manage its brand.
InformationWeek SMB: Let's start with why brands are important, particularly for small and midsized companies.
Daymond John: Whether they take the time to make the conscious effort about it or not, they are being branded. So it all depends on if you're going to cultivate your brand. People buy into your brand and your asset because of the value you're offering. The people running these companies are giving you something, like a value-related service; maybe it's an accounting business. The core of that business value is to save you money; it has nothing to do with being a big or small company. No matter what, you have to brand yourself by the value you offer. No matter what size company, you have to make sure that your customer knows the value you offer. The only company that doesn't need to brand itself the Treasury Department as far as I'm concerned.
Whether you offer the cheapest product or great customer service business branding is absolutely necessary ... it's your calling card. It's what people are going to say about you once you're gone. You can sit there as a company and say anything you want to somebody, but once you brand yourself a certain way, it's more important what that person is saying to everybody else about you. That is what's going to give you the business that you need to move forward - especially in a time and age like this. People are going to go toward brands that they really are comfortable with because you have to pick and choose in an economy like this. You're going with what you call your "safest bet." And when you brand yourself, in some way or another you're creating the perception that you're a safer or better bet than anybody else.
What about the distinction between a personal brand and the brand of the business? For smaller organizations where the owner or president is very hands on, are they one in the same or is there a distinction between the person and the business?
John: They're absolutely one in the same. Look at Steve Jobs. If he even looks sick, the stock goes down 20%. In my world I deal with a lot of musical artists and several have wanted to start a clothing line or fragrance line, but look at the ones who were successful. There's only two or three maybe: Russell Simmons, Jay-Z and Puff Daddy. Those three people were fashion-forward before they ever came out with anything else. If you look at other artists who aren't as fashion-forward, when they put out fashion lines the products didn't match their DNA and most failed. On Shark Tank, when people walk down that aisle we judge them and we brand them way before they open their mouths because of the way they are: They're shifty, or the way they're dressed or the way they ask a question. The brand and its association with who they are is really why they get the deal or not.
Not long ago you changed the name of your company from FUBU to FB Legacy. You spent years building the FUBU brand. Why the change and when should business owners be thinking about making a big change like this to their company brand?
John: It really depends on the business strategy and the angle of the new strategy relative to the old. In America Fubu has been out 15 years and now people 35 and older say, "I was around when it was really big, and it was great and was doing well," and they see value. But for younger kids, 10 years old, 15 years old, in their mind it's, "Oh, that's the old crap my uncle used to wear." So we needed to change it around a little bit. These kids have such a short attention span now; it's the length of 3.5 minute video--you wake up poor and by the end of the day you have a Mercedes and you get the girl. They have a very short time understanding the time. So for them FB Legacy is new, but an older generation still knows FUBU and the FB in FB Legacy gives them an understanding that there's a history behind it. That's why we changed it around. Will it work? We don't know, but we're giving it our best effort.
Over the 15 years you've been leading FUBU and now FB Legacy, how have the tools you use to develop and manage your branding identify changed? Specifically, I'm think of how social media has changed the way you promote your brand and connect with potential customers.
John: Social media has changed things immensely. When we first started FUBU, you had focus groups to find out what your customers thought. You had these kids telling you the truth, but they're all sitting in your office getting $100 each. And you don't know if they're telling you real answers. Now, if you don't have thin skin, you can go and search your name an your brand name and you see in on Twitter or Facebook or MySpace all these outlooks on your brand. From that you can make accurate assessments about your strengths and weaknesses.
For example, I looked at FUBU and realized, first, that most kids didn't know much about it, but what they did think was that it was cheap stuff and that it was super-baggy stuff. Now if I came out with a new line not knowing this, I wouldn't know where to target. And I saw an opportunity to educate them about the brand. Most of them didn't know that we've also been in Europe for the last 15 years and for that market we made form-fitting and properly cut sizing, but American kids wanted the baggier look. Then they understood that we had a history of making the clothes the proper size. If you look at them saying "cheap goods," most didn't realize that we pulled out of America for the last eight years, so the goods they were seeing as cheap were either counterfeit or very old. So we saw an opportunity to educate them that they were seeing older goods in the market. That's all information that I wouldn't have known without social media.
What about pitfalls? When you're trying to manage and cultivate a brand identity what are some big mistakes that can really damage your brand identity?
John: With social media you have to be transparent. You really do. You have to admit your mistakes. If you try to put up a facade around your product or your brand, it's easily discovered because all your employees have access to the world and the world has access to them. Everything's moving so fast that your information will be out there. So it's important to be transparent to some extent even about your faults.
Another thing is that a lot of people really don't understand their consumer. They want to believe their consumer is one person, but it's not. For example, Timberland builds the best boot in the world and they're proud of it and they market it that way heavily. Now a real hiker or mountain biker buys the best boot in the world, but he's only going to buy that boot once every two or three years. A construction worker may buy that boot once every six months or once every year. But then kids latch onto the Timberland brand. Good, bad or indifferent, they latch on to the brand, and instead of valuing it from a functional aspect this urban customer values it from a fashion aspect so they're buying a new pair of Timberlands every three weeks when it gets scuffed. You have to understand where your bread-and-butter is coming from--it's not always the consumer you intend. You also have to be able to market to that group in a sensible way. You can't just run out and start shouting, "Hey, guys. We love you. We love you. We love you." For certain markets, as soon as you pay attention to them, they back away from you, because then you're no longer aspirational. So you have to find out who your customer is, then determine how to market to them in a sensible way that reinforces more and more sales but doesn't totally ignore your other consumers.
Any last words of advice on branding?
John: Your perception, your public perception, your brand DNA, is your most important thing. A lot of people are so busy trying to set up the business, that they overlook the mission statement. I tell everybody that you need to be able to explain yourself, your company, in three to five words. So if you're BMW, you are "fine German engineering." If you're TBS: "We know drama." You need to be able to understand yourself and relay that to everybody else in three to five words.
Large company or small, Daymond John argues that its image is what ultimately matters.
Daymond John is founder and owner of FUBU, star of the ABC series Shark Tank, and a corporate branding consultant. He has been named Marketer of the Year by Brandweek and New York Entrepreneur of the Year by Ernst & Young. In his new book, The Brand Within: How We Brand Ourselves, From Birth To The Boardroom, John draws from his experience over almost two decades in the fashion business to explore the loyalty-based relationships between brands and customers.
Recently, John spoke with InformationWeek SMB about the importance of branding for businesses of any size, the relationship between personal brands and business brands, and why the Treasury Department is the only organization that doesn't need to manage its brand.
InformationWeek SMB: Let's start with why brands are important, particularly for small and midsized companies.
Daymond John: Whether they take the time to make the conscious effort about it or not, they are being branded. So it all depends on if you're going to cultivate your brand. People buy into your brand and your asset because of the value you're offering. The people running these companies are giving you something, like a value-related service; maybe it's an accounting business. The core of that business value is to save you money; it has nothing to do with being a big or small company. No matter what, you have to brand yourself by the value you offer. No matter what size company, you have to make sure that your customer knows the value you offer. The only company that doesn't need to brand itself the Treasury Department as far as I'm concerned.
Whether you offer the cheapest product or great customer service business branding is absolutely necessary ... it's your calling card. It's what people are going to say about you once you're gone. You can sit there as a company and say anything you want to somebody, but once you brand yourself a certain way, it's more important what that person is saying to everybody else about you. That is what's going to give you the business that you need to move forward - especially in a time and age like this. People are going to go toward brands that they really are comfortable with because you have to pick and choose in an economy like this. You're going with what you call your "safest bet." And when you brand yourself, in some way or another you're creating the perception that you're a safer or better bet than anybody else.
What about the distinction between a personal brand and the brand of the business? For smaller organizations where the owner or president is very hands on, are they one in the same or is there a distinction between the person and the business?
John: They're absolutely one in the same. Look at Steve Jobs. If he even looks sick, the stock goes down 20%. In my world I deal with a lot of musical artists and several have wanted to start a clothing line or fragrance line, but look at the ones who were successful. There's only two or three maybe: Russell Simmons, Jay-Z and Puff Daddy. Those three people were fashion-forward before they ever came out with anything else. If you look at other artists who aren't as fashion-forward, when they put out fashion lines the products didn't match their DNA and most failed. On Shark Tank, when people walk down that aisle we judge them and we brand them way before they open their mouths because of the way they are: They're shifty, or the way they're dressed or the way they ask a question. The brand and its association with who they are is really why they get the deal or not.
Not long ago you changed the name of your company from FUBU to FB Legacy. You spent years building the FUBU brand. Why the change and when should business owners be thinking about making a big change like this to their company brand?
John: It really depends on the business strategy and the angle of the new strategy relative to the old. In America Fubu has been out 15 years and now people 35 and older say, "I was around when it was really big, and it was great and was doing well," and they see value. But for younger kids, 10 years old, 15 years old, in their mind it's, "Oh, that's the old crap my uncle used to wear." So we needed to change it around a little bit. These kids have such a short attention span now; it's the length of 3.5 minute video--you wake up poor and by the end of the day you have a Mercedes and you get the girl. They have a very short time understanding the time. So for them FB Legacy is new, but an older generation still knows FUBU and the FB in FB Legacy gives them an understanding that there's a history behind it. That's why we changed it around. Will it work? We don't know, but we're giving it our best effort.
Over the 15 years you've been leading FUBU and now FB Legacy, how have the tools you use to develop and manage your branding identify changed? Specifically, I'm think of how social media has changed the way you promote your brand and connect with potential customers.
John: Social media has changed things immensely. When we first started FUBU, you had focus groups to find out what your customers thought. You had these kids telling you the truth, but they're all sitting in your office getting $100 each. And you don't know if they're telling you real answers. Now, if you don't have thin skin, you can go and search your name an your brand name and you see in on Twitter or Facebook or MySpace all these outlooks on your brand. From that you can make accurate assessments about your strengths and weaknesses.
For example, I looked at FUBU and realized, first, that most kids didn't know much about it, but what they did think was that it was cheap stuff and that it was super-baggy stuff. Now if I came out with a new line not knowing this, I wouldn't know where to target. And I saw an opportunity to educate them about the brand. Most of them didn't know that we've also been in Europe for the last 15 years and for that market we made form-fitting and properly cut sizing, but American kids wanted the baggier look. Then they understood that we had a history of making the clothes the proper size. If you look at them saying "cheap goods," most didn't realize that we pulled out of America for the last eight years, so the goods they were seeing as cheap were either counterfeit or very old. So we saw an opportunity to educate them that they were seeing older goods in the market. That's all information that I wouldn't have known without social media.
What about pitfalls? When you're trying to manage and cultivate a brand identity what are some big mistakes that can really damage your brand identity?
John: With social media you have to be transparent. You really do. You have to admit your mistakes. If you try to put up a facade around your product or your brand, it's easily discovered because all your employees have access to the world and the world has access to them. Everything's moving so fast that your information will be out there. So it's important to be transparent to some extent even about your faults.
Another thing is that a lot of people really don't understand their consumer. They want to believe their consumer is one person, but it's not. For example, Timberland builds the best boot in the world and they're proud of it and they market it that way heavily. Now a real hiker or mountain biker buys the best boot in the world, but he's only going to buy that boot once every two or three years. A construction worker may buy that boot once every six months or once every year. But then kids latch onto the Timberland brand. Good, bad or indifferent, they latch on to the brand, and instead of valuing it from a functional aspect this urban customer values it from a fashion aspect so they're buying a new pair of Timberlands every three weeks when it gets scuffed. You have to understand where your bread-and-butter is coming from--it's not always the consumer you intend. You also have to be able to market to that group in a sensible way. You can't just run out and start shouting, "Hey, guys. We love you. We love you. We love you." For certain markets, as soon as you pay attention to them, they back away from you, because then you're no longer aspirational. So you have to find out who your customer is, then determine how to market to them in a sensible way that reinforces more and more sales but doesn't totally ignore your other consumers.
Any last words of advice on branding?
John: Your perception, your public perception, your brand DNA, is your most important thing. A lot of people are so busy trying to set up the business, that they overlook the mission statement. I tell everybody that you need to be able to explain yourself, your company, in three to five words. So if you're BMW, you are "fine German engineering." If you're TBS: "We know drama." You need to be able to understand yourself and relay that to everybody else in three to five words.
Don't Invite Trouble into the Office ...added 4-28-10
By Donna Fuscaldo - FOXBusiness
In the third quarter of 2009, the FDIC reported that over $120 million was lost due to online banking fraud. While a major corporation could recover from that, a small business could go under as a result.
A recent survey shows small businesses are more at risk from hackers than ever before.
Symantec (SYMC), the Mountain View, Calif. computer's security company, which each year takes a look back at the level of attacks in the previous year, found in 2009 the number of virus definitions written increased 71% from 2008. Even more alarming, statistics show each year the number of attacks continues to increase -- despite more and more efforts to prevent them.
“The headlines tend to focus on the large corporations that have had a break in but the amount of money being taken from small businesses is extremely significant,” said Kevin Haley, director in Symantec’s Security Response unit. Tools are readily available specifically targeted at small businesses, he said.
According to Haley, there is an underground marketplace unbeknownst to many whereby people sell virus-programs made specifically to attack small businesses. The toolkits, which can be used by novices, attempt to capture login and passwords to gather banking information or take over a computer to send spam or steal e-mail addresses.
“Someone with very limited skills can buy this kit and it does most of the work for them,” said Haley.
For a small business it can be devastating, especially if a hacker gets a hold of an online banking password and cleans out an account. In the third quarter of 2009, the FDIC reported that over $120 million was lost due to online banking fraud. While a major corporation could recover from that, a small business could go under as a result.
On top of worries about losing all the money in the bank account, there’s also the real concern about a company’s reputation getting ruined thanks to a computer attack. If a small business’ e-mail address or social-network Web site is turned into a bot to send spam or results in malware being downloaded on a visitor’s computer, it is very bad for business.
“If you’re trying to establish a social networking presence and people go to your Facebook account and get spam or malware downloaded, they won’t go anymore,” said Haley.
While attacks in the past would go after a computer, these days the attacks target the person, whether it’s through a phishing e-mail or a trick to get you to click on a link or download an application.
“Most attacks are going through Web browsers,” said Haley, noting that while many small businesses are patching their operating system they aren’t patching holes in the Web browser.
So what is a small business owner to do about all these threats? According to Haley, in addition to keeping up to date with patches for browsers and the OS, companies should have a good security software program.
“Having no security is inviting big trouble,” said Haley.
Based on a survey Symantec conducted of 1,500 small businesses this past September, it found that 33% of small businesses didn’t have antivirus protection. What’s more, 65% do store customer data, 43% store financial records, 33% store credit card information and 20% have intellectual property and other sensitive corporate content online. And while 75% of survey respondents said they use the Internet to communicate with customers only 6% fear the loss of customer data.
If the small business has a social network the number of people that have the password to it should be limited, according to Symantec. Same goes for online banking. The login and password shouldn’t be shared with the entire office. To keep the password from falling into nefarious hands, it doesn’t hurt to use a password manager, which lets you store encrypted passwords on your machine.
At the end of the day the best protection for a small business is knowledge. According to Symantec, being aware of the risks and the safeguards available are the first lines of defense. The entire company has to understand security issues and act in a way to minimize the risks. Creating and enforcing polices that identity and restrict applications that can make a business vulnerable could go a long way in fending off attacks.
In the third quarter of 2009, the FDIC reported that over $120 million was lost due to online banking fraud. While a major corporation could recover from that, a small business could go under as a result.
A recent survey shows small businesses are more at risk from hackers than ever before.
Symantec (SYMC), the Mountain View, Calif. computer's security company, which each year takes a look back at the level of attacks in the previous year, found in 2009 the number of virus definitions written increased 71% from 2008. Even more alarming, statistics show each year the number of attacks continues to increase -- despite more and more efforts to prevent them.
“The headlines tend to focus on the large corporations that have had a break in but the amount of money being taken from small businesses is extremely significant,” said Kevin Haley, director in Symantec’s Security Response unit. Tools are readily available specifically targeted at small businesses, he said.
According to Haley, there is an underground marketplace unbeknownst to many whereby people sell virus-programs made specifically to attack small businesses. The toolkits, which can be used by novices, attempt to capture login and passwords to gather banking information or take over a computer to send spam or steal e-mail addresses.
“Someone with very limited skills can buy this kit and it does most of the work for them,” said Haley.
For a small business it can be devastating, especially if a hacker gets a hold of an online banking password and cleans out an account. In the third quarter of 2009, the FDIC reported that over $120 million was lost due to online banking fraud. While a major corporation could recover from that, a small business could go under as a result.
On top of worries about losing all the money in the bank account, there’s also the real concern about a company’s reputation getting ruined thanks to a computer attack. If a small business’ e-mail address or social-network Web site is turned into a bot to send spam or results in malware being downloaded on a visitor’s computer, it is very bad for business.
“If you’re trying to establish a social networking presence and people go to your Facebook account and get spam or malware downloaded, they won’t go anymore,” said Haley.
While attacks in the past would go after a computer, these days the attacks target the person, whether it’s through a phishing e-mail or a trick to get you to click on a link or download an application.
“Most attacks are going through Web browsers,” said Haley, noting that while many small businesses are patching their operating system they aren’t patching holes in the Web browser.
So what is a small business owner to do about all these threats? According to Haley, in addition to keeping up to date with patches for browsers and the OS, companies should have a good security software program.
“Having no security is inviting big trouble,” said Haley.
Based on a survey Symantec conducted of 1,500 small businesses this past September, it found that 33% of small businesses didn’t have antivirus protection. What’s more, 65% do store customer data, 43% store financial records, 33% store credit card information and 20% have intellectual property and other sensitive corporate content online. And while 75% of survey respondents said they use the Internet to communicate with customers only 6% fear the loss of customer data.
If the small business has a social network the number of people that have the password to it should be limited, according to Symantec. Same goes for online banking. The login and password shouldn’t be shared with the entire office. To keep the password from falling into nefarious hands, it doesn’t hurt to use a password manager, which lets you store encrypted passwords on your machine.
At the end of the day the best protection for a small business is knowledge. According to Symantec, being aware of the risks and the safeguards available are the first lines of defense. The entire company has to understand security issues and act in a way to minimize the risks. Creating and enforcing polices that identity and restrict applications that can make a business vulnerable could go a long way in fending off attacks.
Use Marketing to Stay Strong in a Weak Economy ...added 4-13-10
Shrewd business owners see opportunity in a down market.
by Tami Hernandez courtesy of Entrepreneur Magazine.
Today's companies face the challenge of marketing in an economic state of turbulence and uncertainty. The key to maintaining forward momentum in today's market is to resolve to be competitive and shift to an opportunistic mind-set. Rather than focusing on the turbulence, your company should leverage the dynamics of a down market and become an even stronger competitor. A weak economy can actually serve as an opportunity to evaluate your marketing and public relations initiatives so you can make them more effective and efficient.
In good times, it's easy to get into the proverbial marketing rut; some companies have been marketing themselves the same way for years, using the same old marketing plan year after year. But when you're forced to scrutinize every expenditure, suddenly a new zest for change can emerge.
Let this weak economy empower your company to find fresh, creative ways to remain visible, stand out as a distinctive brand and be the leader in your category--even on a smaller marketing budget.
The key to competing strong in a weak economy is to remain visible and project an image of strength and stability. Customers have a heightened sensitivity to any sign of weakness, so resist the urge to dramatically reduce your marketing activities.
To flourish in challenging times, you'll need to distill your marketing and public relations efforts into a powerful, concentrated mix that delivers a high level of visibility and impact on a limited budget.
If your company is looking for ways to do more with less, taking the following 10 steps can help you compete strong:
by Tami Hernandez courtesy of Entrepreneur Magazine.
Today's companies face the challenge of marketing in an economic state of turbulence and uncertainty. The key to maintaining forward momentum in today's market is to resolve to be competitive and shift to an opportunistic mind-set. Rather than focusing on the turbulence, your company should leverage the dynamics of a down market and become an even stronger competitor. A weak economy can actually serve as an opportunity to evaluate your marketing and public relations initiatives so you can make them more effective and efficient.
In good times, it's easy to get into the proverbial marketing rut; some companies have been marketing themselves the same way for years, using the same old marketing plan year after year. But when you're forced to scrutinize every expenditure, suddenly a new zest for change can emerge.
Let this weak economy empower your company to find fresh, creative ways to remain visible, stand out as a distinctive brand and be the leader in your category--even on a smaller marketing budget.
The key to competing strong in a weak economy is to remain visible and project an image of strength and stability. Customers have a heightened sensitivity to any sign of weakness, so resist the urge to dramatically reduce your marketing activities.
To flourish in challenging times, you'll need to distill your marketing and public relations efforts into a powerful, concentrated mix that delivers a high level of visibility and impact on a limited budget.
If your company is looking for ways to do more with less, taking the following 10 steps can help you compete strong:
- Rethink your marketing strategy.
Rather than making random budget cuts to reduce your marketing costs, determine how much spending is feasible based on your current financial situation. Then create a new marketing strategy that optimizes every dollar and integrates your activities to gain the highest return for every effort. This approach will ensure you forge a cohesive, strategic plan that will enable you to remain visible and strongly compete on a reduced budget.
- Evaluate your brand.
Now is the time to carefully evaluate your brand, the market and your competitors. You need to get a 360-degree view of your current situation and how your existing marketing activities align with the current market conditions. Review your marketing assets (such as your company's brochures and website) to determine if they are relevant to today's customers. Also look closely at your competitors to determine if your company stands out.
- Target your marketing efforts.
When marketing on a limited budget, laser-focused targeting of your ideal customers is vital. Invest your time in creating a targeted customer database to use for direct marketing You may not be able to afford broad advertising efforts, but that's OK because direct marketing (snail mail and e-mail) allows you to directly reach your customers in a more efficient and cost-effective way.
- Message strategically.
In a highly competitive market, you need to stand out with messages that are relevant to the times. Evaluate your messaging to ensure it connects with customers. Keep in mind that their wants, needs and interests may have shifted with the economy.
- Update your core marketing materials.
If your brochures, website and other materials are not relevant to today's customers, or if they blend in with those of competitors, make the investment to update your core materials. Many times, customers will visit your website or request information before calling your business. Be sure to make a good first impression to optimize every opportunity.
- Integrate traditional methods with online tools.
Today's communication model is a two-way dialogue. Integrating traditional marketing tactics with web-based tools and social media can boost your response rates by engaging customers at a deeper level. In many cases, boosting exposure through online social networking adds very little cost. Direct marketing can be used to drive customers to microsites (small, three-to-five-page websites) that focus on generating leads. Empowering customer interaction with your company can add significant impact to your campaigns and boost exposure for those on limited budgets.
- Generate media buzz.
Increase your media exposure by launching a public relations campaign. Distribute regular press releases to your industry or local media outlets. Submit applications to speak at events or conferences as a thought leader. If your advertising budget is limited, supplementing your media and industry exposure with public relations is a good idea.
- Increase your network.
Network with other business owners and customers at industry or local events to increase awareness of your company and generate interest. Do not underestimate the power of word of mouth; it is a powerful, cost-effective marketing tool.
- Forge partnerships.
Remember, people don't have to work for your company to work with you, and your peers are in the same boat as you are. Many companies cannot afford to hire extensive staff or experts when times are tough. Strategically partnering with complementary companies can provide you with new leads and expand your network without adding costs. Look for win-win partnerships that can help your business move forward and help you achieve your goals.
- Optimize your existing customers.
Many companies spend all their energy trying to win over new customers when existing customers may be the quickest way to increase business. It is critical to maintain strong customer relationships to retain customers. Look for opportunities to upgrade and cross-sell to your existing customers since you already have a relationship with them.
New Law Doesn't Help Business Credit Cards ...added 3-22-10
Bankrate.com courtesy of Foxbusiness.com
The Credit CARD Act of 2009 protects consumer credit card owners but not small-business credit card owners. Here's everything small business owners should know about the act.
The Credit CARD Act of 2009, which took effect Feb. 22, 2010, won't help owners of small business credit cards. The new law applies only to consumer credit cards.
As many as 59 percent of small businesses in a spring 2009 survey reported that they used credit cards to finance their firms during the previous year, according to the National Small Business Association, or NSBA.
Like consumers, many small firms that use credit cards have already seen negative changes to their accounts. The NSBA survey found that 63 percent of respondents reported that their interest rate increased in the past year, and 41 percent said their credit limit was reduced.
The law offers no protection from the practices banned or restricted under the law, such as rate hikes on existing balances. Issuers may or may not choose to extend the same rules to their business credit cards.
"They may even be at more risk now simply because if issuers can't raise rates on consumers, they may decide that small businesses need to help make up for that," says Gerri Detweiler, personal finance adviser for Credit.com.
Recent research from the Pew Safe Credit Cards Project found that rate increases on existing balances and "hair trigger" penalty rate increases were costing consumers at least $10 billion a year. The CARD Act reined in these practices Feb. 22.
Few choices Shifting business card spending to a personal card in order to be covered by the CARD Act may also prove a bad idea.
The Credit CARD Act amends the Truth in Lending Act, which doesn't apply to "an extension of credit primarily for a business, commercial or agricultural purpose."
In other words, piling business expenses onto a consumer credit card could render it a business card under the law. This gray area of the law could impact a lot of small-business cardholders. A whopping 86 percent of small firms say they use their consumer or business cards primarily or exclusively for business purposes, according to the 2009 National Small Business Association survey.
"The law is vague enough and specifically cards that are primarily or exclusively used for business aren't included in that," says NSBA spokeswoman Molly Brogan.
In addition, blending personal and business purchases on a consumer credit card can create accounting issues. "If you keep all your business purchases on one card, you likely can deduct the interest and the fees for that card," says Detweiler. "Once you start commingling personal purchases, any accountant will tell you it gets pretty hard to distinguish how much of the balance is due to personal purchases and how much is due to business purchases."
The business debt would also show up on your personal credit report, and the surge in debt could lower your credit scores. An important factor in FICO scores is the usage of available credit on revolving accounts. Increasing this ratio will cause your score to drop.
Unless an account is delinquent, small-business cards don't usually appear on personal credit reports. There is an exception to that: Capitol One-issued cards. Capital One spokeswoman Pam Girardo says that the bank recently began reporting small-business loan information to business and consumer credit bureaus.
Business card accounts that show up on personal credit reports get treated like personal debt in terms of the credit score.
What to do Make sure to open all communications from the business credit card issuer so that you can make adjustments for account changes.
Have a back-up plan, suggests Detweiler. She says this might include having a personal card with no balance on it, to which you could transfer a balance, or a personal loan.
Some purchases shouldn't be funded by a small-business credit card, says Bob Seiwert, senior vice president at the American Bankers Association Center for Commercial Lending and Business Banking. "If you're buying a piece of equipment, and you can't pay that off within the normal billing period, you shouldn't be financing that piece of equipment with a business credit card. You should go to your bank and get a term loan for it."
For additional information, read the new series of white papers on small business borrowing and banking from the American Bankers Association.
Staff reporter Leslie McFadden covers credit cards and scores. She's based in Bankrate's New York office.
The Credit CARD Act of 2009 protects consumer credit card owners but not small-business credit card owners. Here's everything small business owners should know about the act.
The Credit CARD Act of 2009, which took effect Feb. 22, 2010, won't help owners of small business credit cards. The new law applies only to consumer credit cards.
As many as 59 percent of small businesses in a spring 2009 survey reported that they used credit cards to finance their firms during the previous year, according to the National Small Business Association, or NSBA.
Like consumers, many small firms that use credit cards have already seen negative changes to their accounts. The NSBA survey found that 63 percent of respondents reported that their interest rate increased in the past year, and 41 percent said their credit limit was reduced.
The law offers no protection from the practices banned or restricted under the law, such as rate hikes on existing balances. Issuers may or may not choose to extend the same rules to their business credit cards.
"They may even be at more risk now simply because if issuers can't raise rates on consumers, they may decide that small businesses need to help make up for that," says Gerri Detweiler, personal finance adviser for Credit.com.
Recent research from the Pew Safe Credit Cards Project found that rate increases on existing balances and "hair trigger" penalty rate increases were costing consumers at least $10 billion a year. The CARD Act reined in these practices Feb. 22.
Few choices Shifting business card spending to a personal card in order to be covered by the CARD Act may also prove a bad idea.
The Credit CARD Act amends the Truth in Lending Act, which doesn't apply to "an extension of credit primarily for a business, commercial or agricultural purpose."
In other words, piling business expenses onto a consumer credit card could render it a business card under the law. This gray area of the law could impact a lot of small-business cardholders. A whopping 86 percent of small firms say they use their consumer or business cards primarily or exclusively for business purposes, according to the 2009 National Small Business Association survey.
"The law is vague enough and specifically cards that are primarily or exclusively used for business aren't included in that," says NSBA spokeswoman Molly Brogan.
In addition, blending personal and business purchases on a consumer credit card can create accounting issues. "If you keep all your business purchases on one card, you likely can deduct the interest and the fees for that card," says Detweiler. "Once you start commingling personal purchases, any accountant will tell you it gets pretty hard to distinguish how much of the balance is due to personal purchases and how much is due to business purchases."
The business debt would also show up on your personal credit report, and the surge in debt could lower your credit scores. An important factor in FICO scores is the usage of available credit on revolving accounts. Increasing this ratio will cause your score to drop.
Unless an account is delinquent, small-business cards don't usually appear on personal credit reports. There is an exception to that: Capitol One-issued cards. Capital One spokeswoman Pam Girardo says that the bank recently began reporting small-business loan information to business and consumer credit bureaus.
Business card accounts that show up on personal credit reports get treated like personal debt in terms of the credit score.
What to do Make sure to open all communications from the business credit card issuer so that you can make adjustments for account changes.
Have a back-up plan, suggests Detweiler. She says this might include having a personal card with no balance on it, to which you could transfer a balance, or a personal loan.
Some purchases shouldn't be funded by a small-business credit card, says Bob Seiwert, senior vice president at the American Bankers Association Center for Commercial Lending and Business Banking. "If you're buying a piece of equipment, and you can't pay that off within the normal billing period, you shouldn't be financing that piece of equipment with a business credit card. You should go to your bank and get a term loan for it."
For additional information, read the new series of white papers on small business borrowing and banking from the American Bankers Association.
Staff reporter Leslie McFadden covers credit cards and scores. She's based in Bankrate's New York office.
The Perils of Market Research ...added 3-15-10
It can be a powerful weapon in any company's strategic planning arsenal. But it can also backfire. Steve McKee offers five essentials to consider:
By Steve McKee Courtesy of Business Week Magazine
My colleagues and I conduct quite a bit of market research, both for our own company and on behalf of our clients. We've seen it used both for good and for ill. Here are a handful of thoughts that can keep your research from causing you pain.
1. There are things you can measure and things you can't. Don't mix them up.
How much do you love your wife? What's the value of poetry? What is a life worth? Ask most people these questions, and you'll get a funny look—or get into a metaphysical discussion. Some things just can't be quantified. Yet in business, we often act as if everything can.
In a 2008 Wall Street Journal story, Adrian Van Hooydonk, director of design at BMW (BMW:GR), explained how the carmaker evaluates vehicle prototypes: "We don't use customer clinics. They will be judging it based on the world today. Design needs to look good in eight years' time. You can't ask a customer whether he will like the design of the car in 2018." Van Hooydonk and his team must be onto something, because BMW has arguably been the most stylish and best-performing car company of the past two decades.
Research can't predict the kind of cars we will be interested in five years from now, how an ad concept will be received three months from now, or what the next hit movie or popular fashion trend will be. Yet we still hold onto hope that somehow statistics and spreadsheets will enable us to foresee the future. They won't. They can't.
Of course, it is possible to track events that have already happened, and that can provide valuable information. Such things as purchase patterns and visit frequency are historical, concrete events subject only to the laws of forgetting (I may not remember how I heard of your product) and deceit (I may not want you to know that I saw your ad in my wife's Glamour magazine). By and large they can be reliably tracked. But when we try to quantify attitudinal attributes—or assume that the past will accurately predict the future—we can get into trouble.
2. Just because you can't measure it doesn't mean it's not real.
When was the last time you responded to a TV ad—or any form of advertising, for that matter? That, of course, depends on the meaning of the word "responded." It's easy to think of "response" strictly as a measurable action, such as an inquiry or purchase. But there are many different ways consumers respond to ads, from the concrete (Web visits, phone inquiries, transactions) to the more abstract (preference, likability, identification). And the higher-involvement the purchase decision, the more likely a brand will need to generate a number of abstract responses before it sees anything concrete.
In 2003, Advertising Age ran a provocative story about advertising ROI—or the lack of it. The publication said that according to research, "Media advertising does the worst job of any marketing discipline in proving return on investment, and network TV is the worst of those media…."
The study was fielded among leading national advertisers—people who ought to know. But what, exactly, did it demonstrate? Not that network TV didn't generate ROI, but that it was the hardest medium with which to prove ROI. That's a significant distinction.
If network TV didn't work for advertisers, there would be no network TV. As business people, we know that TV works because it works on us as consumers. We may not be able to measure it with precision, but anyone who recognizes the Mac vs. PC guys, the Aflac Duck (AFL), the E-Trade Baby (ETFC), or the Budweiser Clydesdales (BUD) can't deny it. Passing judgment based only on what's easily measurable is myopic.
3. The best research is the real world.
Two words: New Coke. Possibly the most pretested new product launch ever, New Coke nevertheless failed in the marketplace. The story has been told many times, and there's no need to repeat it here, but basically what it came down to was that despite an unprecedented amount of market research, the brain trust at Coke (KO) didn't anticipate the monstrous emotional backlash they would engender by replacing their original formula. They couldn't know it until it happened.
Google (GOOG) once asked users how many research results they'd like to see on one screen. Since conventional wisdom says more is always better, people naturally said "more." When Google tripled the number of results, however, it found that traffic actually declined. Not only did the results take a fraction of a second longer to load, but having more options led people to click on links that were less relevant. The respondents in Google's research didn't intentionally lead researchers down the wrong path; they just didn't understand the real-world implications of their choices.
For any research to be scientifically reliable, every variable other than the one being tested must be controlled. But in most marketing research it's impossible to control all the variables, which means a certain amount of error is in every study. Where that error lies, and how significantly it affects the outcome, is always a mystery. That's what makes it so dangerous.
4. People lie.
"I will never have a cell phone." That's a direct quote from my wife, who also said she'd never use the Internet. Today she sent me a text message complaining that Facebook is acting funny again.
She didn't mean to lie. She's just not an early-adopter. And she can't predict how she will respond to new developments in the future. None of us can.
Harris Interactive (HPOL) recently conducted a survey about personal consumer behavior. Unlike most studies of this type, Harris split its panel between telephone and Internet respondents. The results demonstrated that online respondents tended to be more honest, whereas phone respondents were more likely to provide what they thought was the "correct" answer.
For example, more than twice as many people told telephone interviewers they were weekly churchgoers, while fewer admitted they gambled. People interviewed via phone were also more likely to say they give money to charity, exercise regularly, and brush their teeth twice a day. (What a wonderful world that would be.)
Sometimes people won't accurately describe their wants, needs, or behavior, and sometimes they simply can't. As David Lewis, chief designer at Bang & Olufsen (BO:DC), put it in a 2008 Wall Street Journal profile, "You can't go out and ask people what they need or want, because they don't know. The whole trick is to come out with a product and say, 'Have you thought of this?' and hear the consumer respond, 'Wow! No, I hadn't.' If you can do that, you're on."
5. If you blindly follow the research, you'll lose.
Swedish Vodka? Can't happen. Vodka is Russian.
Yep, research said that Absolut (PDRDY) would flop. Instead, it radically changed the spirits industry.
In a 2001 column, World magazine publisher Joel Belz called relying too much on research "the fallacy of false precision." Precision is what Ford (F) was seeking when it famously passed on launching the minivan. Hal Sperlich, who ended up taking the concept to Chrysler, recounted in a 1994 Fortune article that Ford balked because research couldn't prove there was a market for such an unprecedented vehicle. "In 10 years of developing the minivan we never once got a letter from a housewife asking us to invent one." Call it a hunch, call it intuition or insight, call it whatever—Sperlich and his team were correct, regardless of what the research said (or didn't say).
As is animated movie studio Pixar (DIS), time after time, as it churns out one hit after another. Andrew Stanton, director of Finding Nemo and WALL-E, admitted in a 2008 Wall Street Journal column, "We selfishly make movies for ourselves that happen to be juvenile enough that they cover the kids' interests.We've learned to trust our own instincts about what we like and not rely on, or trust, what the outside world tells us is going to work." Apple's (AAPL) Steve Jobs is cut from the same cloth."We do no market research," Jobs told Fortune in a 2008 interview. "We just want to make great products." I think he has proven his approach works.
The bottom line? Market research is a compass, not a map—it can give you a sense of where you are, but it can't tell you where to go. Measure to guide, don't measure to lead, and when you do talk to customers, remember you can't always go through the front door—sometimes you have to sneak in through a window to find out what they really think. Figuratively speaking, of course.
I'm a big fan of market research. But only research done right. Bang & Olufsen, BMW, and Apple are among the most innovative companies on earth, yet they refuse to be slaves to a spreadsheet. So should we all.
Steve McKee is president of McKee Wallwork Cleveland Advertising and author of the book When Growth Stalls: How It Happens, Why You're Stuck, and What to Do About It. Find him on Twitter @WhenGrowthStall and LinkedIn.
By Steve McKee Courtesy of Business Week Magazine
My colleagues and I conduct quite a bit of market research, both for our own company and on behalf of our clients. We've seen it used both for good and for ill. Here are a handful of thoughts that can keep your research from causing you pain.
1. There are things you can measure and things you can't. Don't mix them up.
How much do you love your wife? What's the value of poetry? What is a life worth? Ask most people these questions, and you'll get a funny look—or get into a metaphysical discussion. Some things just can't be quantified. Yet in business, we often act as if everything can.
In a 2008 Wall Street Journal story, Adrian Van Hooydonk, director of design at BMW (BMW:GR), explained how the carmaker evaluates vehicle prototypes: "We don't use customer clinics. They will be judging it based on the world today. Design needs to look good in eight years' time. You can't ask a customer whether he will like the design of the car in 2018." Van Hooydonk and his team must be onto something, because BMW has arguably been the most stylish and best-performing car company of the past two decades.
Research can't predict the kind of cars we will be interested in five years from now, how an ad concept will be received three months from now, or what the next hit movie or popular fashion trend will be. Yet we still hold onto hope that somehow statistics and spreadsheets will enable us to foresee the future. They won't. They can't.
Of course, it is possible to track events that have already happened, and that can provide valuable information. Such things as purchase patterns and visit frequency are historical, concrete events subject only to the laws of forgetting (I may not remember how I heard of your product) and deceit (I may not want you to know that I saw your ad in my wife's Glamour magazine). By and large they can be reliably tracked. But when we try to quantify attitudinal attributes—or assume that the past will accurately predict the future—we can get into trouble.
2. Just because you can't measure it doesn't mean it's not real.
When was the last time you responded to a TV ad—or any form of advertising, for that matter? That, of course, depends on the meaning of the word "responded." It's easy to think of "response" strictly as a measurable action, such as an inquiry or purchase. But there are many different ways consumers respond to ads, from the concrete (Web visits, phone inquiries, transactions) to the more abstract (preference, likability, identification). And the higher-involvement the purchase decision, the more likely a brand will need to generate a number of abstract responses before it sees anything concrete.
In 2003, Advertising Age ran a provocative story about advertising ROI—or the lack of it. The publication said that according to research, "Media advertising does the worst job of any marketing discipline in proving return on investment, and network TV is the worst of those media…."
The study was fielded among leading national advertisers—people who ought to know. But what, exactly, did it demonstrate? Not that network TV didn't generate ROI, but that it was the hardest medium with which to prove ROI. That's a significant distinction.
If network TV didn't work for advertisers, there would be no network TV. As business people, we know that TV works because it works on us as consumers. We may not be able to measure it with precision, but anyone who recognizes the Mac vs. PC guys, the Aflac Duck (AFL), the E-Trade Baby (ETFC), or the Budweiser Clydesdales (BUD) can't deny it. Passing judgment based only on what's easily measurable is myopic.
3. The best research is the real world.
Two words: New Coke. Possibly the most pretested new product launch ever, New Coke nevertheless failed in the marketplace. The story has been told many times, and there's no need to repeat it here, but basically what it came down to was that despite an unprecedented amount of market research, the brain trust at Coke (KO) didn't anticipate the monstrous emotional backlash they would engender by replacing their original formula. They couldn't know it until it happened.
Google (GOOG) once asked users how many research results they'd like to see on one screen. Since conventional wisdom says more is always better, people naturally said "more." When Google tripled the number of results, however, it found that traffic actually declined. Not only did the results take a fraction of a second longer to load, but having more options led people to click on links that were less relevant. The respondents in Google's research didn't intentionally lead researchers down the wrong path; they just didn't understand the real-world implications of their choices.
For any research to be scientifically reliable, every variable other than the one being tested must be controlled. But in most marketing research it's impossible to control all the variables, which means a certain amount of error is in every study. Where that error lies, and how significantly it affects the outcome, is always a mystery. That's what makes it so dangerous.
4. People lie.
"I will never have a cell phone." That's a direct quote from my wife, who also said she'd never use the Internet. Today she sent me a text message complaining that Facebook is acting funny again.
She didn't mean to lie. She's just not an early-adopter. And she can't predict how she will respond to new developments in the future. None of us can.
Harris Interactive (HPOL) recently conducted a survey about personal consumer behavior. Unlike most studies of this type, Harris split its panel between telephone and Internet respondents. The results demonstrated that online respondents tended to be more honest, whereas phone respondents were more likely to provide what they thought was the "correct" answer.
For example, more than twice as many people told telephone interviewers they were weekly churchgoers, while fewer admitted they gambled. People interviewed via phone were also more likely to say they give money to charity, exercise regularly, and brush their teeth twice a day. (What a wonderful world that would be.)
Sometimes people won't accurately describe their wants, needs, or behavior, and sometimes they simply can't. As David Lewis, chief designer at Bang & Olufsen (BO:DC), put it in a 2008 Wall Street Journal profile, "You can't go out and ask people what they need or want, because they don't know. The whole trick is to come out with a product and say, 'Have you thought of this?' and hear the consumer respond, 'Wow! No, I hadn't.' If you can do that, you're on."
5. If you blindly follow the research, you'll lose.
Swedish Vodka? Can't happen. Vodka is Russian.
Yep, research said that Absolut (PDRDY) would flop. Instead, it radically changed the spirits industry.
In a 2001 column, World magazine publisher Joel Belz called relying too much on research "the fallacy of false precision." Precision is what Ford (F) was seeking when it famously passed on launching the minivan. Hal Sperlich, who ended up taking the concept to Chrysler, recounted in a 1994 Fortune article that Ford balked because research couldn't prove there was a market for such an unprecedented vehicle. "In 10 years of developing the minivan we never once got a letter from a housewife asking us to invent one." Call it a hunch, call it intuition or insight, call it whatever—Sperlich and his team were correct, regardless of what the research said (or didn't say).
As is animated movie studio Pixar (DIS), time after time, as it churns out one hit after another. Andrew Stanton, director of Finding Nemo and WALL-E, admitted in a 2008 Wall Street Journal column, "We selfishly make movies for ourselves that happen to be juvenile enough that they cover the kids' interests.We've learned to trust our own instincts about what we like and not rely on, or trust, what the outside world tells us is going to work." Apple's (AAPL) Steve Jobs is cut from the same cloth."We do no market research," Jobs told Fortune in a 2008 interview. "We just want to make great products." I think he has proven his approach works.
The bottom line? Market research is a compass, not a map—it can give you a sense of where you are, but it can't tell you where to go. Measure to guide, don't measure to lead, and when you do talk to customers, remember you can't always go through the front door—sometimes you have to sneak in through a window to find out what they really think. Figuratively speaking, of course.
I'm a big fan of market research. But only research done right. Bang & Olufsen, BMW, and Apple are among the most innovative companies on earth, yet they refuse to be slaves to a spreadsheet. So should we all.
Steve McKee is president of McKee Wallwork Cleveland Advertising and author of the book When Growth Stalls: How It Happens, Why You're Stuck, and What to Do About It. Find him on Twitter @WhenGrowthStall and LinkedIn.
Small Business Lending Up Third Straight Month ...added 3-8-10
Reuters courtesy of Web Site Magazine
Small U.S. businesses boosted borrowing in January for the third straight month, although lending remains well below levels at the start of the recession, and delinquencies rose, PayNet Inc reported last week.
The company's Small Business Lending Index, which measures the overall volume of financing, rose a seasonally adjusted 4% in January, month-on-month, after advancing on a seasonally adjusted basis in November and December, PayNet said.
The index fell just 3% in January from a year earlier, the smallest decline since the onset of the recent recession, following a downwardly revised 10-percent decline in December.
"There's been a lot of damage done, but at least we are moving in the right direction," said Bill Phelan, PayNet's president and founder. "It's a positive improving story that points us toward a recovery in the small business economy.
Still, he said, the January index reading of 80.8 was 39% below its pre-recession peak.
Meanwhile, moderate delinquencies on loan payments rose to the highest since the recession began, and lenders will likely see defaults at "elevated levels" for the next 12 months, Phelan said.
Trends in loan defaults tend to lag other economic indicators, Phelan said.
"We really see it as an aftershock of the recession," he said.
Accounts behind 180 days or more, or in default and unlikely to ever get paid, rose to 0.92% of total receivables in January from 0.89% in December, according to PayNet, which provides risk-management tools to the commercial lending industry.
Accounts in moderate delinquency, or those behind by 30 days or more, rose in January to 4.39% from 4.31% in December, PayNet said Tuesday.
Accounts 90 days or more behind in payment, or in severe delinquency, rose to 1.38% in January from 1.37% in December.
"These credit problems are going to linger on and be at elevated levels for the next 12 months," Phelan said.
PayNet collects real-time loan information, such as originations and delinquencies, from more than 200 leading U.S. capital equipment lenders.
Small U.S. businesses boosted borrowing in January for the third straight month, although lending remains well below levels at the start of the recession, and delinquencies rose, PayNet Inc reported last week.
The company's Small Business Lending Index, which measures the overall volume of financing, rose a seasonally adjusted 4% in January, month-on-month, after advancing on a seasonally adjusted basis in November and December, PayNet said.
The index fell just 3% in January from a year earlier, the smallest decline since the onset of the recent recession, following a downwardly revised 10-percent decline in December.
"There's been a lot of damage done, but at least we are moving in the right direction," said Bill Phelan, PayNet's president and founder. "It's a positive improving story that points us toward a recovery in the small business economy.
Still, he said, the January index reading of 80.8 was 39% below its pre-recession peak.
Meanwhile, moderate delinquencies on loan payments rose to the highest since the recession began, and lenders will likely see defaults at "elevated levels" for the next 12 months, Phelan said.
Trends in loan defaults tend to lag other economic indicators, Phelan said.
"We really see it as an aftershock of the recession," he said.
Accounts behind 180 days or more, or in default and unlikely to ever get paid, rose to 0.92% of total receivables in January from 0.89% in December, according to PayNet, which provides risk-management tools to the commercial lending industry.
Accounts in moderate delinquency, or those behind by 30 days or more, rose in January to 4.39% from 4.31% in December, PayNet said Tuesday.
Accounts 90 days or more behind in payment, or in severe delinquency, rose to 1.38% in January from 1.37% in December.
"These credit problems are going to linger on and be at elevated levels for the next 12 months," Phelan said.
PayNet collects real-time loan information, such as originations and delinquencies, from more than 200 leading U.S. capital equipment lenders.
Get Tax Breaks on Home Office, Cell ...added 3-11-10
By Donna Fuscaldo - FOXBusiness
While many small businesses have physical offices, many work out of home offices as well. Don’t miss out on these tax deductions.
With tax time just around the corner, small business owners are in a good position to benefit from a slew of deductions. Whether it’s writing off computers and copiers or deducting business use of an iPhone, knowing what deductions to take can reduce the money the IRS collects.
“The tax law is written as such that there are many favorable provisions,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Services. “It’s incumbent on any small business owner to understand the rules.”
When it comes to technology and other office equipment, a small business owner can choose to write off the entire expense in the year it was purchased or depreciate it over a period of years. When you depreciate something you are basically writing down the value of the item due to wear and tear over a period of time.
According to the IRS, computers and peripherals including printers and copiers can be depreciated over five years while office furniture, file cabinets and safes can be depreciated over seven years. It may pay to elect to take the 100% first-year write-off of up to $250,000 in the current year if the small business wants to offset income. But if the business isn’t making any profit, depreciating may make sense, especially if it expects to be profitable in future years and wants to offset some of the gains then.
According to Steber, there are many factors to consider when deciding to write off the complete expense or to depreciate it over five or seven years such as: how big any losses are in the current year and what the future profit targets look like. Given the complexity of the deductions for small businesses, getting a tax professional to prepare the taxes may be beneficial, said Steber.
“You always want to seek out very good and competent guidance related to legal, personal health care and taxes,” said Steber, noting the cost should pay for itself in terms of protecting a small business from audits and indentifying tax savings.
With many small business owners the line between personal use -- like a cell phone -- and business use of technology is blurred. Some people will have two cell phones to avoid issues, but for many that cell phone acts as both the business and personal phone. If the business falls into the latter category then only expenses related to using the phone for business purposes can be deducted. The small business owner must figure out the percentage of the time it’s used for businesses purposes and then include that deduction come tax time. With a cell phone, the cost of the phone, the service fee and the monthly payments can all be fully written of for business purposes, but only the percentage used for work can be added to the deductions.
While many small businesses have physical offices, many work out of home offices as well. For small businesses that have a home office, not only can they deduct their technology equipment but also things like a percentage of the home’s mortgage insurance, real estate tax, home repairs, utilities and insurance premiums. The home office must meet IRS standards in order to claim the deductions. According to the IRS, the home office has to be used regularly and only for business, or be the place where client or customer meetings occur. And if inventory or product samples are stored in a home, that counts as a home office as well.
Steber also advised to follow the general rule of thumb of saving any receipts and tax documentations for three years.
While many small businesses have physical offices, many work out of home offices as well. Don’t miss out on these tax deductions.
With tax time just around the corner, small business owners are in a good position to benefit from a slew of deductions. Whether it’s writing off computers and copiers or deducting business use of an iPhone, knowing what deductions to take can reduce the money the IRS collects.
“The tax law is written as such that there are many favorable provisions,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Services. “It’s incumbent on any small business owner to understand the rules.”
When it comes to technology and other office equipment, a small business owner can choose to write off the entire expense in the year it was purchased or depreciate it over a period of years. When you depreciate something you are basically writing down the value of the item due to wear and tear over a period of time.
According to the IRS, computers and peripherals including printers and copiers can be depreciated over five years while office furniture, file cabinets and safes can be depreciated over seven years. It may pay to elect to take the 100% first-year write-off of up to $250,000 in the current year if the small business wants to offset income. But if the business isn’t making any profit, depreciating may make sense, especially if it expects to be profitable in future years and wants to offset some of the gains then.
According to Steber, there are many factors to consider when deciding to write off the complete expense or to depreciate it over five or seven years such as: how big any losses are in the current year and what the future profit targets look like. Given the complexity of the deductions for small businesses, getting a tax professional to prepare the taxes may be beneficial, said Steber.
“You always want to seek out very good and competent guidance related to legal, personal health care and taxes,” said Steber, noting the cost should pay for itself in terms of protecting a small business from audits and indentifying tax savings.
With many small business owners the line between personal use -- like a cell phone -- and business use of technology is blurred. Some people will have two cell phones to avoid issues, but for many that cell phone acts as both the business and personal phone. If the business falls into the latter category then only expenses related to using the phone for business purposes can be deducted. The small business owner must figure out the percentage of the time it’s used for businesses purposes and then include that deduction come tax time. With a cell phone, the cost of the phone, the service fee and the monthly payments can all be fully written of for business purposes, but only the percentage used for work can be added to the deductions.
While many small businesses have physical offices, many work out of home offices as well. For small businesses that have a home office, not only can they deduct their technology equipment but also things like a percentage of the home’s mortgage insurance, real estate tax, home repairs, utilities and insurance premiums. The home office must meet IRS standards in order to claim the deductions. According to the IRS, the home office has to be used regularly and only for business, or be the place where client or customer meetings occur. And if inventory or product samples are stored in a home, that counts as a home office as well.
Steber also advised to follow the general rule of thumb of saving any receipts and tax documentations for three years.
Three jQuery Plugins for Google Maps Lovers ...added 3-1-10
by Peter A. Prestipino courtesy of Web Site Magazine
The Web is increasingly becoming more "local" focused and savvy designers and developers are working night and day to find creative and innovative ways to present information to users in this context. Here are three simple to deploy but excellent jQuery Plugins for those interested in integrating Google Maps into their Web pages.
The Web is increasingly becoming more "local" focused and savvy designers and developers are working night and day to find creative and innovative ways to present information to users in this context. Here are three simple to deploy but excellent jQuery Plugins for those interested in integrating Google Maps into their Web pages.
Brian Laundau's jMapping: A plugin designed to implement a Google map from a list of locations specified within HTML. Several examples are available which show basic usage, custom ID and class names, and using an object or function for category options. This would be an excellent plugin for those that need to show a list of locations in close proximity for the convenience of a webpage.
gMap by Cedric Kastner: A lightweight (2kb) and immensely elegant jQuery plugin for embedding Google maps. Opt to display a simple map with controls and one marker , change the map type to a physical view or tap into the extended usage features and map without controls, include custom market images, include multiple marketers and create custom viewport position and zoom.
Chris Mckee's jQuery.fuGMAP: Another very lightweight (3.5kb) plugin for displaying Google maps on a site or in applications. Geo-coding is built it, but you can load in a market XML file by just adding the URL. One of the best features is the ability to add an information window with text or with an iframe to any longitude/latitude marker.
Smartphone App Must-Haves ...added 2-23-10
By Azita Arvani WomenEntrepreneur.com
Are you making the best use of your smartphone? How many of those mobile apps are you using in your business? The burgeoning number of shiny new applications means that you can do business more readily, even while on the go.
iPhone--the platform that made mobile apps a mainstream phenomenon--has more than 100,000 apps available at the iPhone App Store . In light of iPhone's amazing success, other smartphone platforms have created their own app stores, too. Android Market has more than 10,000 apps available. BlackBerry App World has several thousand apps, and Windows Marketplace and Nokia Ovi have developed their own app stores, as well.
With all the possibilities, figuring out which apps are the right ones for you can be a dizzying experience. How do you narrow down the choices and determine which ones work the best? We conducted an informal survey to find out what apps savvy entrepreneurs use on a regular basis to improve productivity. We also wanted to know if they would recommend them to their friends and fellow entrepreneurs. We stayed away from apps that are novel but not practical to use on a regular basis. We highlight the favorites below. Some you may be familiar with, and some may be new to you. But many entrepreneurs are depending on them to improve their productivity.
Linkedin (free) has become the top social networking site for business professionals. In fact, it's fair to call it simply the top online business networking site. So, it's no surprise that many entrepreneurs find the mobile version of this tool useful when they're on the go. Tom Woolf of Woolf Media says you can instantly build a rapport with someone at a meeting with a connection through Linkedin The app is available on various mobile phone models, including iPhone, BlackBerry and Palm
Triplt (free): TripIt is an online travel tool that allows you to organize your travels. You can build itineraries, share them with colleagues and get automatic updates about any travel delays. The mobile app version is available on iPhones and BlackBerrys. Douglas Naegele of Infield Communications really likes this tool. He says, "I don't have an assistant or a travel manager, so I use TripIt to organize all my travel docs."
Analytics App ($5.99 on iPhone): As the name suggests, this tool allows you to keep track of your website activities using Google Analytics on your phone. Garrett Dodge of Fido Factor calls this app "indispensable" for a web-based business.
FuzeMeeting (free): FuzeMeeting is a web-based conferencing tool. Its mobile app extends this capability to your phone. The great news for really small companies is that you can have an account for up to three users for free. With the mobile app, you can schedule and participate in web conferences, and you also have the ability to chat. However, the presenter has to be on a desktop. The app is available on iPhones and Blackberrys.
WorldCard Mobile ($9.99): Forget the old-fashioned way of scanning your business cards to add them to your contacts list. Several mobile apps allow you to use your phone's camera to take a picture of the business card and automatically update your contacts. This one is a bit pricey, but Maren Faulkender finds this app "a huge time-saver and a neat freak's dream tool." The app is available for iPhones and Windows Mobile devices.
Evernote (free): If you like Evernote, which we covered in a previous column, you'll enjoy being able to use Evernote on your phone. Plus, it covers most mobile platforms: iPhone, Android, Palm Pre, Blackberry and Windows Mobile. I have used the BlackBerry and iPhone versions. The iPhone app is more user friendly.
CNBC RT (free): This may not be considered a business tool unless you're in the financial industry. But a few entrepreneurs say it saves them a lot of time since it offers real-time stock quotes. It's available at the iTunesAppStore. According to Sweta Shah of 5W PR, CNBC RT helps "monitor my investments and saves me the time of opening and booting the laptop while on the go."
Tweetie2 ($2.99 for iPhone): There are at least half a dozen mobile Twitter applications on iPhone. But this one seems quite popular. The new version claims to be more polished, since it was rewritten from scratch. The app lets you handle multiple Twitter accounts, organize your favorite tweets, and post photos and videos. Blackberry users have a couple of options, including TwitterBerry.
Gotcha's: Since iPhone has the largest mobile app store at this time, the majority of applications run on iPhones. On the other hand, BlackBerrys have the largest installed base of smartphones, so many developers find that a compelling reason to develop for that platform as well.
Android phones are relative newcomers to the market. But models are showing up in various shapes and forms. So we expect to see more entrepreneurs using Android apps. As with any productivity tool, you need to do a cost/benefit analysis, at least in your head, to see if any of these is a good fit for you and your business. Each app demands some time, effort and money to install, manage and maintain.
Bottom line: There are many mobile applications in the market today and many more are being added each month. The biggest challenge moving forward will be how to discover the right tools for your business. We hope this column provided a good set for you to consider.
Are you making the best use of your smartphone? How many of those mobile apps are you using in your business? The burgeoning number of shiny new applications means that you can do business more readily, even while on the go.
iPhone--the platform that made mobile apps a mainstream phenomenon--has more than 100,000 apps available at the iPhone App Store . In light of iPhone's amazing success, other smartphone platforms have created their own app stores, too. Android Market has more than 10,000 apps available. BlackBerry App World has several thousand apps, and Windows Marketplace and Nokia Ovi have developed their own app stores, as well.
With all the possibilities, figuring out which apps are the right ones for you can be a dizzying experience. How do you narrow down the choices and determine which ones work the best? We conducted an informal survey to find out what apps savvy entrepreneurs use on a regular basis to improve productivity. We also wanted to know if they would recommend them to their friends and fellow entrepreneurs. We stayed away from apps that are novel but not practical to use on a regular basis. We highlight the favorites below. Some you may be familiar with, and some may be new to you. But many entrepreneurs are depending on them to improve their productivity.
Linkedin (free) has become the top social networking site for business professionals. In fact, it's fair to call it simply the top online business networking site. So, it's no surprise that many entrepreneurs find the mobile version of this tool useful when they're on the go. Tom Woolf of Woolf Media says you can instantly build a rapport with someone at a meeting with a connection through Linkedin The app is available on various mobile phone models, including iPhone, BlackBerry and Palm
Triplt (free): TripIt is an online travel tool that allows you to organize your travels. You can build itineraries, share them with colleagues and get automatic updates about any travel delays. The mobile app version is available on iPhones and BlackBerrys. Douglas Naegele of Infield Communications really likes this tool. He says, "I don't have an assistant or a travel manager, so I use TripIt to organize all my travel docs."
Analytics App ($5.99 on iPhone): As the name suggests, this tool allows you to keep track of your website activities using Google Analytics on your phone. Garrett Dodge of Fido Factor calls this app "indispensable" for a web-based business.
FuzeMeeting (free): FuzeMeeting is a web-based conferencing tool. Its mobile app extends this capability to your phone. The great news for really small companies is that you can have an account for up to three users for free. With the mobile app, you can schedule and participate in web conferences, and you also have the ability to chat. However, the presenter has to be on a desktop. The app is available on iPhones and Blackberrys.
WorldCard Mobile ($9.99): Forget the old-fashioned way of scanning your business cards to add them to your contacts list. Several mobile apps allow you to use your phone's camera to take a picture of the business card and automatically update your contacts. This one is a bit pricey, but Maren Faulkender finds this app "a huge time-saver and a neat freak's dream tool." The app is available for iPhones and Windows Mobile devices.
Evernote (free): If you like Evernote, which we covered in a previous column, you'll enjoy being able to use Evernote on your phone. Plus, it covers most mobile platforms: iPhone, Android, Palm Pre, Blackberry and Windows Mobile. I have used the BlackBerry and iPhone versions. The iPhone app is more user friendly.
CNBC RT (free): This may not be considered a business tool unless you're in the financial industry. But a few entrepreneurs say it saves them a lot of time since it offers real-time stock quotes. It's available at the iTunesAppStore. According to Sweta Shah of 5W PR, CNBC RT helps "monitor my investments and saves me the time of opening and booting the laptop while on the go."
Tweetie2 ($2.99 for iPhone): There are at least half a dozen mobile Twitter applications on iPhone. But this one seems quite popular. The new version claims to be more polished, since it was rewritten from scratch. The app lets you handle multiple Twitter accounts, organize your favorite tweets, and post photos and videos. Blackberry users have a couple of options, including TwitterBerry.
Gotcha's: Since iPhone has the largest mobile app store at this time, the majority of applications run on iPhones. On the other hand, BlackBerrys have the largest installed base of smartphones, so many developers find that a compelling reason to develop for that platform as well.
Android phones are relative newcomers to the market. But models are showing up in various shapes and forms. So we expect to see more entrepreneurs using Android apps. As with any productivity tool, you need to do a cost/benefit analysis, at least in your head, to see if any of these is a good fit for you and your business. Each app demands some time, effort and money to install, manage and maintain.
Bottom line: There are many mobile applications in the market today and many more are being added each month. The biggest challenge moving forward will be how to discover the right tools for your business. We hope this column provided a good set for you to consider.
Lessons from Entrepreneurs Who Beat the Odds ...added 2-19-10
Most businesses don't last more than a few years. Meet three scrappy entrepreneurs who describe how they reached three-, five-, and 10-year benchmarks
By Stacy Perman courtesy of Business Week Magazine www.businessweek.com
The statistics surrounding the survival rate for small businesses have long been subject to fervid debate. Depending on who you're talking to, the predicted life span for a startup can elicit grim to cautiously optimistic responses. One commonly cited figure is that half of all businesses go under in the first year while 95% fail within the first five years. According to a study done by the Small Business Administration, two-thirds of all new small business survive the first two years but only 44% will still be operating by year four.
Common culprits for failure include undercapitalization, cash-flow crises, and overexpansion. Then of course there are a host of external factors that nobody can predict—let alone adequately plan for—such as volatile credit markets and unstable economic cycles.
To gain insight into specific practices that enable small companies to keep going and growing even during difficult times, BusinessWeek profiled three entrepreneurs who have reached benchmarks in their companies' life cycles: three years, five years, and 10 years. Their stories and strategies follow.
Year Three
BYD Ranch & Kennel
Bryan, Tex.
Founded 2007
After 20 years doing business administration for a number of small businesses, Miriam Rieck decided to go out on her own and open a dog and horse boarding kennel in Bryan, Tex. In 2007 Rieck and her husband plunked down $100,000 from their savings to purchase a 45-acre ranch and built BYD Ranch & Kennel's facilities. Rieck says she differentiates it from her competition by limiting the number of runs so that she can devote more attention to the animals. The practice resonates with customers. "My clients are like an extended family and their animals are like their babies."
Rieck says working directly under the owners of those earlier companies helped prepare her. For one, Rieck says she recognized the importance of defining boundaries between your private life and business life, a line that can often blur when you own your own business. Moreover, she says, "during the crucial first years I learned you really always need to recycle money back into your business instead of taking money out of it. A new business needs to stay fresh, especially in an industry with animals. The property can look dirty and dingy really fast. People consider their dogs like children and they want them taken care of like they are at home." Rieck says she reinvests profits to keep her facilities in good shape. And, she says, "It's important not to cross the line and take money meant for the business and make it your personal income."
According to Rieck, a new small business that is customer service-based should recognize the importance of creating and deepening ties within the local community. "I always believed you should support the local community," she says. That includes membership in a number of dog clubs and sponsoring fundraisers for the local animal shelter. "I get out there in the community and I have a good working relationship with the area veterinarians. Most of my business comes from word of mouth. "I do almost no print advertising."
From the beginning, Rieck says she didn't set specific benchmarks to meet each year. Instead, she set a goal to increase her client base 10% to 15% annually. In her first year in business, Rieck had 100 clients; she now has more than 300. "My ideas were simplistic; I stuck to my simple goals—nothing really grand." Her revenue has increased accordingly: In her first year in business the firm made $17,000; during the second it hit $32,000, and Rieck says she is on pace to reach $60,000 this year.
Year Five
Space Architectural Design Firm
St. Louis
Founded 2005
When Tom Niemeier launched his firm, he planned to expand to a 20-architect office, then stop. "I had worked in a number of firms over the past 25 years and I always liked the comfort of a smaller business," he says. Rather than rely on one type of client for revenue, early on Niemeier decided to make sure he launched a firm with a diversified clientele working on educational, corporate, health care, and hospitality projects—with residential comprising only about 10% or less of the workload. "Part of my growth strategy was to pick people who have expertise in areas that we didn't. When we brought them in, we also brought in their client base," he says.
In four years Space grew to 16 people (15 architects and one office manager). "We positioned ourselves so that the people we hired were already proven and had an expertise," he says. Part of that strategy included circumscribing the firm's growth ambitions. "We never set a time on when we wanted to get to a certain level, but once we had about 13, 14, or 15 architects we became a firm that could handle almost any size project except a mega $100 million project."
Niemeier says another key decision was to keep his overhead lean. "Once a firm hits 25 to 30 people, then you have to bring in an accounting person, a full-time receptionist, and an office manager. You are just feeding the machine. We didn't want to get to that point. We all like to draw and design and be part of the architecture staff; we didn't want to just go out, play golf, and network new clients. We do that to a certain degree—but when you have 50 people that's pretty much all you do—you are buried in managing and marketing the firm."
When construction began to slow down in 2007 and business tapered off with the slumping economy, Niemeier tried to recalibrate and adjust to the new realities. In the past two years he says he laid off three people. He also purchased a construction company that he says "helped us lengthen our revenue on any given project. We design it and we build and manage the construction. It's a nice source of revenue." This year Niemeier expects revenue to reach about $1.7 million, down slightly from $1.8 million last year.
"There's never been a moment yet that I felt I was not going to make it," he says. "Even if we have had to cut people."
Year 10
Resource Options
Needham, Mass.
Founded 1999
Before starting staffing provider Resource Options in 1999, Matt Carlin spent seven years as a hockey coach at Cornell and Dartmouth. After getting married, his wife, a former news anchor, and he decided that if they wanted to raise a family, they needed to change their lifestyles. For Carlin that meant trading in his travel schedule to start his own company.
Carlin says he chose the staffing business because it required a similar skill set to being a hockey coach: primarily recruiting talented people. "I would be utilizing the same methodologies and processes," he says. He borrowed $50,000 from his father and made his first goal paying back the loan as soon as his company became profitable. He wanted to run a business that could sustain itself with two to three people.
"Each time we had success we wanted to have some more," he says. "Initially I wanted to get to $5 million and I did that by year three. That same year Carlin says the business turned a profit and he was able to repay his father. "Then we went to $10 million, then $25 million."
During the first year, Carlin says his biggest client that represented 10% to 15% of his receivables filed for Chapter 11 bankruptcy protection. "That was an enormous loss and a big hurdle to get over," he says. "But what I learned from that is that I really had to do a better job of screening and qualifying our prospective clients. Not everybody is a good client and when they don't pay their bills in a timely manner I realized we had to fire them." Carlin says the situation also taught him "not to put all of our eggs in one basket." Following that first-year debacle that nearly undermined the company, Carlin says he redoubled his efforts in order to bring in new business and made sure to diversify the base so that any one client wouldn't expose the company too much.
After surviving the first year, Carlin says by the time he reached year five his biggest challenge was to keep up with growth. "We were growing so quickly, we opened branches and satellite offices. We were doubling and tripling revenue every year. We were growing faster than our projections. I did a lot of soul-searching and made some key hires in 2005, and I began to delegate more responsibility." Carlin also invested in new technology and software to streamline processes and shore up his back office.
During the past two years the company's lightning growth has stalled. Carlin says "we had to face the reality that we were not going to continue to double our revenue on an annual basis in a less-than-favorable economy. We are now learning to do more with less." Resource Options has 31 full-time staffers and 850 field contractors—down from 1,200 contract positions in 2007. Carlin expects revenue to reach about $12.5 million to $13 million this year, down from $14 million last year.
Still, reaching the 10-year mark, Carlin says he realizes that owning your own business is as much a huge amount of work as it is joy. "If going into business was easy, everybody would do it."
But he says his best lesson still comes from his days as a hockey coach. "The only way to run your business effectively is to hire people that are better than you and that's what I think I am best at. It's the players that win the game, not the coaches. I say hire people that are better than me and make sure those hires get in the habit of hiring people that are better than them."
Perman is a staff writer for BusinessWeek in New York.
The statistics surrounding the survival rate for small businesses have long been subject to fervid debate. Depending on who you're talking to, the predicted life span for a startup can elicit grim to cautiously optimistic responses. One commonly cited figure is that half of all businesses go under in the first year while 95% fail within the first five years. According to a study done by the Small Business Administration, two-thirds of all new small business survive the first two years but only 44% will still be operating by year four.
Common culprits for failure include undercapitalization, cash-flow crises, and overexpansion. Then of course there are a host of external factors that nobody can predict—let alone adequately plan for—such as volatile credit markets and unstable economic cycles.
To gain insight into specific practices that enable small companies to keep going and growing even during difficult times, BusinessWeek profiled three entrepreneurs who have reached benchmarks in their companies' life cycles: three years, five years, and 10 years. Their stories and strategies follow.
Year Three
BYD Ranch & Kennel
Bryan, Tex.
Founded 2007
After 20 years doing business administration for a number of small businesses, Miriam Rieck decided to go out on her own and open a dog and horse boarding kennel in Bryan, Tex. In 2007 Rieck and her husband plunked down $100,000 from their savings to purchase a 45-acre ranch and built BYD Ranch & Kennel's facilities. Rieck says she differentiates it from her competition by limiting the number of runs so that she can devote more attention to the animals. The practice resonates with customers. "My clients are like an extended family and their animals are like their babies."
Rieck says working directly under the owners of those earlier companies helped prepare her. For one, Rieck says she recognized the importance of defining boundaries between your private life and business life, a line that can often blur when you own your own business. Moreover, she says, "during the crucial first years I learned you really always need to recycle money back into your business instead of taking money out of it. A new business needs to stay fresh, especially in an industry with animals. The property can look dirty and dingy really fast. People consider their dogs like children and they want them taken care of like they are at home." Rieck says she reinvests profits to keep her facilities in good shape. And, she says, "It's important not to cross the line and take money meant for the business and make it your personal income."
According to Rieck, a new small business that is customer service-based should recognize the importance of creating and deepening ties within the local community. "I always believed you should support the local community," she says. That includes membership in a number of dog clubs and sponsoring fundraisers for the local animal shelter. "I get out there in the community and I have a good working relationship with the area veterinarians. Most of my business comes from word of mouth. "I do almost no print advertising."
From the beginning, Rieck says she didn't set specific benchmarks to meet each year. Instead, she set a goal to increase her client base 10% to 15% annually. In her first year in business, Rieck had 100 clients; she now has more than 300. "My ideas were simplistic; I stuck to my simple goals—nothing really grand." Her revenue has increased accordingly: In her first year in business the firm made $17,000; during the second it hit $32,000, and Rieck says she is on pace to reach $60,000 this year.
Year Five
Space Architectural Design Firm
St. Louis
Founded 2005
When Tom Niemeier launched his firm, he planned to expand to a 20-architect office, then stop. "I had worked in a number of firms over the past 25 years and I always liked the comfort of a smaller business," he says. Rather than rely on one type of client for revenue, early on Niemeier decided to make sure he launched a firm with a diversified clientele working on educational, corporate, health care, and hospitality projects—with residential comprising only about 10% or less of the workload. "Part of my growth strategy was to pick people who have expertise in areas that we didn't. When we brought them in, we also brought in their client base," he says.
In four years Space grew to 16 people (15 architects and one office manager). "We positioned ourselves so that the people we hired were already proven and had an expertise," he says. Part of that strategy included circumscribing the firm's growth ambitions. "We never set a time on when we wanted to get to a certain level, but once we had about 13, 14, or 15 architects we became a firm that could handle almost any size project except a mega $100 million project."
Niemeier says another key decision was to keep his overhead lean. "Once a firm hits 25 to 30 people, then you have to bring in an accounting person, a full-time receptionist, and an office manager. You are just feeding the machine. We didn't want to get to that point. We all like to draw and design and be part of the architecture staff; we didn't want to just go out, play golf, and network new clients. We do that to a certain degree—but when you have 50 people that's pretty much all you do—you are buried in managing and marketing the firm."
When construction began to slow down in 2007 and business tapered off with the slumping economy, Niemeier tried to recalibrate and adjust to the new realities. In the past two years he says he laid off three people. He also purchased a construction company that he says "helped us lengthen our revenue on any given project. We design it and we build and manage the construction. It's a nice source of revenue." This year Niemeier expects revenue to reach about $1.7 million, down slightly from $1.8 million last year.
"There's never been a moment yet that I felt I was not going to make it," he says. "Even if we have had to cut people."
Year 10
Resource Options
Needham, Mass.
Founded 1999
Before starting staffing provider Resource Options in 1999, Matt Carlin spent seven years as a hockey coach at Cornell and Dartmouth. After getting married, his wife, a former news anchor, and he decided that if they wanted to raise a family, they needed to change their lifestyles. For Carlin that meant trading in his travel schedule to start his own company.
Carlin says he chose the staffing business because it required a similar skill set to being a hockey coach: primarily recruiting talented people. "I would be utilizing the same methodologies and processes," he says. He borrowed $50,000 from his father and made his first goal paying back the loan as soon as his company became profitable. He wanted to run a business that could sustain itself with two to three people.
"Each time we had success we wanted to have some more," he says. "Initially I wanted to get to $5 million and I did that by year three. That same year Carlin says the business turned a profit and he was able to repay his father. "Then we went to $10 million, then $25 million."
During the first year, Carlin says his biggest client that represented 10% to 15% of his receivables filed for Chapter 11 bankruptcy protection. "That was an enormous loss and a big hurdle to get over," he says. "But what I learned from that is that I really had to do a better job of screening and qualifying our prospective clients. Not everybody is a good client and when they don't pay their bills in a timely manner I realized we had to fire them." Carlin says the situation also taught him "not to put all of our eggs in one basket." Following that first-year debacle that nearly undermined the company, Carlin says he redoubled his efforts in order to bring in new business and made sure to diversify the base so that any one client wouldn't expose the company too much.
After surviving the first year, Carlin says by the time he reached year five his biggest challenge was to keep up with growth. "We were growing so quickly, we opened branches and satellite offices. We were doubling and tripling revenue every year. We were growing faster than our projections. I did a lot of soul-searching and made some key hires in 2005, and I began to delegate more responsibility." Carlin also invested in new technology and software to streamline processes and shore up his back office.
During the past two years the company's lightning growth has stalled. Carlin says "we had to face the reality that we were not going to continue to double our revenue on an annual basis in a less-than-favorable economy. We are now learning to do more with less." Resource Options has 31 full-time staffers and 850 field contractors—down from 1,200 contract positions in 2007. Carlin expects revenue to reach about $12.5 million to $13 million this year, down from $14 million last year.
Still, reaching the 10-year mark, Carlin says he realizes that owning your own business is as much a huge amount of work as it is joy. "If going into business was easy, everybody would do it."
But he says his best lesson still comes from his days as a hockey coach. "The only way to run your business effectively is to hire people that are better than you and that's what I think I am best at. It's the players that win the game, not the coaches. I say hire people that are better than me and make sure those hires get in the habit of hiring people that are better than them."
Perman is a staff writer for BusinessWeek in New York.
Five Ways to Protect Personal Assets ...added 2-11-10
Even if business owners aren't worried about their ability to repay creditors, they should still put protections in place, says Tom Taulli
By Tom Taulli courtesy of Business Week Magazine www.businessweek.com
A few years ago, you took out a $300,000 loan for your business because you anticipated continued growth. But the economy soon fell apart, and so did your business. You can no longer pay back the loan, and the lender has filed a lawsuit against your company and you personally, threatening to seize your home, car, and cash in the bank.
This is a common scenario for owners of small businesses, even those structured as corporations or limited liability companies, because they are not always as protected as they might think against determined creditors. In fact, a 2007 report from the U.S. Chamber Institute for Legal Reform, a nonprofit sponsored by the lobbying group, estimated 2005 tort liability costs were $98 billion for small businesses (defined as those with annual revenue of less than $10 million). Keep in mind the report found owners paid $20 billion out of pocket, as opposed to through insurance.
While this probably isn't too surprising, you may be personally exposed to plenty of other circumstances beyond nonpayment of loans—including nonpayment to suppliers, tax liabilities, malpractice, default on equipment financing, default on mortgages, negligent acts, fraud, legal action from employees (such as from sexual harassment or wrongful discharge), and liabilities for environmental damage.
Scary, huh? Well, you can take steps now to deal with the risks by engaging in asset protection. While the perception is this is just for wealthy individuals, small business owners can also benefit. Here are my suggestions of what you should consider doing now. Note, this is a broad overview. You should hire a specialist in asset protection for more advice.
1. Inventory everything. Make a complete list of your assets and debts. It's a good idea to do this on a regular basis (say, every six months or so). Remember to think broadly. For example, do you own a vacation home or have retirement assets? Do you hold stock in another company? These can have lots of value and may wind up being taken away in litigation.
2. Research exemptions and protective entities. A few of your assets may be exempt from creditor actions because of federal or state laws. These typically include your personal residence, your pension or retirement fund, and your life insurance policy. These should be the only ones in your name, according to Hillel Presser, a partner at the asset protection law firm Presser & Goldstein in Deerfield Beach, Fla. As for all other assets, consider setting up so-called protective entities, such as domestic trusts and offshore trusts. "You can layer the protection by using multiple entities. You can go even further and equity-strip the assets. This means taking loans against the assets or refinancing them. This makes the asset less attractive to creditors," says Presser.
3. Avoid personal guarantees. A personal guarantee is when you pledge to be personally responsible for a debt. The result is that you essentially lose the protection of your company's corporation status. True, a bank will likely require a personal guarantee (this is the case of loans guaranteed by the Small Business Administration). If so, try to minimize the impact. One approach is to put a time limit on it (say, for one year) or to specify a particular asset as collateral. Some suppliers will try to get a personal guarantee. Don't do it. Find another supplier.
4. Be wary of the contracts you sign. While your company's corporate structure may provide some protection, it may not be enough if there's a tort action or claim for fraud. In such cases, you may have personal liability. This is why it's important to provide liability protection in your contracts. This includes capping damages and even disallowing certain types of damages. Also, make sure you sign contracts on behalf of your company—not in your name, to avoid the chance the contract could later be considered a personal guarantee.
5. Buy insurance. While asset protection can be extremely helpful in avoiding personal liability, a creditor may still be determined to go after your assets. That's why it is important to have insurance protection. Liability insurance covers damages for personal injuries and property damages that other people cause (such as your employees). Property insurance covers your company's assets. You may even consider an umbrella policy to cover exposure that goes beyond property insurance. As should be no surprise, carriers try to avoid paying claims. To get the best coverage, it's a good idea to have an attorney look at the policy.
Which leads me to repeat: For any kind of asset protection, it's smart to get the advice of a qualified attorney or tax expert. You'll likely be dealing with complicated questions.
And the costs? Putting together a basic asset protection plan generally ranges from $2,000 to $10,000, at least for small businesses with revenues below $1 million and an owner with a net worth of less than $500,000. And the earlier you start, the better. The costs will be much lower, and the overall protection should be greater.
As you know, running a business is quite risky regardless of the economic environment. Even top companies fail. Spend the time now to look at your potential liability exposures and see how asset protection will help lower your risks.
A few years ago, you took out a $300,000 loan for your business because you anticipated continued growth. But the economy soon fell apart, and so did your business. You can no longer pay back the loan, and the lender has filed a lawsuit against your company and you personally, threatening to seize your home, car, and cash in the bank.
This is a common scenario for owners of small businesses, even those structured as corporations or limited liability companies, because they are not always as protected as they might think against determined creditors. In fact, a 2007 report from the U.S. Chamber Institute for Legal Reform, a nonprofit sponsored by the lobbying group, estimated 2005 tort liability costs were $98 billion for small businesses (defined as those with annual revenue of less than $10 million). Keep in mind the report found owners paid $20 billion out of pocket, as opposed to through insurance.
While this probably isn't too surprising, you may be personally exposed to plenty of other circumstances beyond nonpayment of loans—including nonpayment to suppliers, tax liabilities, malpractice, default on equipment financing, default on mortgages, negligent acts, fraud, legal action from employees (such as from sexual harassment or wrongful discharge), and liabilities for environmental damage.
Scary, huh? Well, you can take steps now to deal with the risks by engaging in asset protection. While the perception is this is just for wealthy individuals, small business owners can also benefit. Here are my suggestions of what you should consider doing now. Note, this is a broad overview. You should hire a specialist in asset protection for more advice.
1. Inventory everything. Make a complete list of your assets and debts. It's a good idea to do this on a regular basis (say, every six months or so). Remember to think broadly. For example, do you own a vacation home or have retirement assets? Do you hold stock in another company? These can have lots of value and may wind up being taken away in litigation.
2. Research exemptions and protective entities. A few of your assets may be exempt from creditor actions because of federal or state laws. These typically include your personal residence, your pension or retirement fund, and your life insurance policy. These should be the only ones in your name, according to Hillel Presser, a partner at the asset protection law firm Presser & Goldstein in Deerfield Beach, Fla. As for all other assets, consider setting up so-called protective entities, such as domestic trusts and offshore trusts. "You can layer the protection by using multiple entities. You can go even further and equity-strip the assets. This means taking loans against the assets or refinancing them. This makes the asset less attractive to creditors," says Presser.
3. Avoid personal guarantees. A personal guarantee is when you pledge to be personally responsible for a debt. The result is that you essentially lose the protection of your company's corporation status. True, a bank will likely require a personal guarantee (this is the case of loans guaranteed by the Small Business Administration). If so, try to minimize the impact. One approach is to put a time limit on it (say, for one year) or to specify a particular asset as collateral. Some suppliers will try to get a personal guarantee. Don't do it. Find another supplier.
4. Be wary of the contracts you sign. While your company's corporate structure may provide some protection, it may not be enough if there's a tort action or claim for fraud. In such cases, you may have personal liability. This is why it's important to provide liability protection in your contracts. This includes capping damages and even disallowing certain types of damages. Also, make sure you sign contracts on behalf of your company—not in your name, to avoid the chance the contract could later be considered a personal guarantee.
5. Buy insurance. While asset protection can be extremely helpful in avoiding personal liability, a creditor may still be determined to go after your assets. That's why it is important to have insurance protection. Liability insurance covers damages for personal injuries and property damages that other people cause (such as your employees). Property insurance covers your company's assets. You may even consider an umbrella policy to cover exposure that goes beyond property insurance. As should be no surprise, carriers try to avoid paying claims. To get the best coverage, it's a good idea to have an attorney look at the policy.
Which leads me to repeat: For any kind of asset protection, it's smart to get the advice of a qualified attorney or tax expert. You'll likely be dealing with complicated questions.
And the costs? Putting together a basic asset protection plan generally ranges from $2,000 to $10,000, at least for small businesses with revenues below $1 million and an owner with a net worth of less than $500,000. And the earlier you start, the better. The costs will be much lower, and the overall protection should be greater.
As you know, running a business is quite risky regardless of the economic environment. Even top companies fail. Spend the time now to look at your potential liability exposures and see how asset protection will help lower your risks.
Young Guns: No Niche, No Problem added 2-8-10
By Christina Scotti - FOXBusiness
A new cupcake start-up is finding success despite a market oozing with icing.
When marketplace for a product—even a trendy one—is as jammed as the cupcake biz, most entrepreneurs run the other way, looking for a new niche to fill. Innovation and the novel are part of what makes a start-up, well, a start-up.
But Tawny Ong doesn’t see it that way. She says when she first noticed cupcake emporiums sprouting all over the city, she wanted to have one, too.
Ong, the energetic and bubbly 32-year-old entrepreneur behind Desserts by Tawny Ong, stands behind her cupcakes, saying that everything from the flavor to the way they’re sold is unique to her.
“Opening up a carbon-copy cupcake business is not what I wanted to do,” said Ong, who lives in New York City. “I went out and literally catered to the customer and found out what they really wanted, and that became my niche. Now I am in the baking business with a menu that caters to my clients and also in the wedding and custom cake-making business I never thought I'd get into.”
SIX SHOOTER Q&A with Tawny Ong:
Q. Who is your role model or inspiration?
A. My family and friends. Everything I’m accomplishing is because of them.
Q. Do you think you need to find a niche in the market to start a business?
A. I think if you have a niche that is great, but I had to find my niche. Opening up a carbon-copy cupcake business is not what I wanted to do. I went out and literally catered to the customer and found out what they really wanted and that became my niche. Now I am in the baking business with a menu that caters to my clients and also in the wedding and custom cake making business I never thought I’d get into.
Q. What has been the biggest lesson learned so far in starting a business?
A. Find a niche within you, or in other words, find your strengths.
For example: My strength is my product, and I get clients through referrals. That’s how I was given the opportunity to make the Lady Gaga welcome home cake on January 20, 2010. I knew the pastry chef who made her previous cake did an exact replica of the Borgata, right down to the little cars and miniature tourists. I was asked if I wanted to do an exact replica of Radio City Music Hall, and said that I would use it as a starting point for the cake design.
After some research, my company was able to create a cake that meant something to Gaga and her mother (who placed the order). It was a three tiered red velvet cake. The top tier was the client’s request for Radio City Music Hall marquee saying Welcome Home Gaga (in a recent interview with Oprah she mentioned she liked to be called Gaga vs. Lady Gaga, so we changed accordingly); the second tier had Gaga’s signature thunderbolt logo; and the third tier represented her love of music and piano since age 4. So I’d say our niche is finding out what the client wants and putting a lot of heart into creating something delish and always with the intent of putting a smile on people’s faces.
Q. What is the biggest mistake you've made so far?
A. I think the biggest mistake I could make right now is to not try new things…to not stay challenged and get comfortable. It may lead to mistakes, but I’d rather make a mistake and learn than play things safe.
Q. Where do you see your company in five years?
A. I want to find a home for my bakery and see my business grow at a pace where I can still provide a great product and customer service as well have fun during the process. If I lose that, what’s the point? I truly love what I do…baking, catering events, and meeting new people. I’m still the one who makes the deliveries and caters events because that’s where I get to see the smiles on my clients’ faces and watch them enjoy their desserts as much as I enjoy baking them.
Q. How do you view competition?
A. I look at their prices and try their products, but other than that, I don’t see them as competition. There’s always room for one more good one. NYC is big, and people have different taste buds. The more cupcake bakeries that open only helps my company because then it’s not a fad but a common practice to bring cupcakes for any and every occasion.
A new cupcake start-up is finding success despite a market oozing with icing.
When marketplace for a product—even a trendy one—is as jammed as the cupcake biz, most entrepreneurs run the other way, looking for a new niche to fill. Innovation and the novel are part of what makes a start-up, well, a start-up.
But Tawny Ong doesn’t see it that way. She says when she first noticed cupcake emporiums sprouting all over the city, she wanted to have one, too.
Ong, the energetic and bubbly 32-year-old entrepreneur behind Desserts by Tawny Ong, stands behind her cupcakes, saying that everything from the flavor to the way they’re sold is unique to her.
“Opening up a carbon-copy cupcake business is not what I wanted to do,” said Ong, who lives in New York City. “I went out and literally catered to the customer and found out what they really wanted, and that became my niche. Now I am in the baking business with a menu that caters to my clients and also in the wedding and custom cake-making business I never thought I'd get into.”
SIX SHOOTER Q&A with Tawny Ong:
Q. Who is your role model or inspiration?
A. My family and friends. Everything I’m accomplishing is because of them.
Q. Do you think you need to find a niche in the market to start a business?
A. I think if you have a niche that is great, but I had to find my niche. Opening up a carbon-copy cupcake business is not what I wanted to do. I went out and literally catered to the customer and found out what they really wanted and that became my niche. Now I am in the baking business with a menu that caters to my clients and also in the wedding and custom cake making business I never thought I’d get into.
Q. What has been the biggest lesson learned so far in starting a business?
A. Find a niche within you, or in other words, find your strengths.
For example: My strength is my product, and I get clients through referrals. That’s how I was given the opportunity to make the Lady Gaga welcome home cake on January 20, 2010. I knew the pastry chef who made her previous cake did an exact replica of the Borgata, right down to the little cars and miniature tourists. I was asked if I wanted to do an exact replica of Radio City Music Hall, and said that I would use it as a starting point for the cake design.
After some research, my company was able to create a cake that meant something to Gaga and her mother (who placed the order). It was a three tiered red velvet cake. The top tier was the client’s request for Radio City Music Hall marquee saying Welcome Home Gaga (in a recent interview with Oprah she mentioned she liked to be called Gaga vs. Lady Gaga, so we changed accordingly); the second tier had Gaga’s signature thunderbolt logo; and the third tier represented her love of music and piano since age 4. So I’d say our niche is finding out what the client wants and putting a lot of heart into creating something delish and always with the intent of putting a smile on people’s faces.
Q. What is the biggest mistake you've made so far?
A. I think the biggest mistake I could make right now is to not try new things…to not stay challenged and get comfortable. It may lead to mistakes, but I’d rather make a mistake and learn than play things safe.
Q. Where do you see your company in five years?
A. I want to find a home for my bakery and see my business grow at a pace where I can still provide a great product and customer service as well have fun during the process. If I lose that, what’s the point? I truly love what I do…baking, catering events, and meeting new people. I’m still the one who makes the deliveries and caters events because that’s where I get to see the smiles on my clients’ faces and watch them enjoy their desserts as much as I enjoy baking them.
Q. How do you view competition?
A. I look at their prices and try their products, but other than that, I don’t see them as competition. There’s always room for one more good one. NYC is big, and people have different taste buds. The more cupcake bakeries that open only helps my company because then it’s not a fad but a common practice to bring cupcakes for any and every occasion.
Can a Do-It-Yourself Fabric Company Craft a Larger Following?Marketing strategies for Spoonflower, a crowdsourcing site for fabric design
added 2-3-10
By April Joyner INC. Magazine
If you don't like the selection at the fabric store, create your own textiles. That's the idea behind Spoonflower, a Mebane, North Carolina based company that lets users upload their designs and have them printed on a selection of cotton fabrics. Co-founders Stephen Fraser and Gart Davis, formerly executives at Lulu.com, an online self-publishing service, were inspired to start the company after Fraser's wife, an avid seamstress, had trouble finding fabric she liked for curtains. Spoonflower's custom cloth sells for $18 to $32 per yard. Since its launch in October 2008, Fraser says, Spoonflower's site has amassed 40,000 users, and the company is on track to take in $1 million in sales this year. Recently, Spoonflower began letting customers buy the designs of other users. It offers a 10 percent commission to the designers. Fraser believes this will help the site attract crafters who may not be proficient enough in Photoshop to design for themselves. How should the company market itself? We asked four entrepreneurs to weigh in.
PITCH NO. 1: Partner with stores Jake Nickell, co-founder of Threadless, a Chicago-based company that sells user-generated T-shirt designs
I think partnerships with fabric stores are a great way to go. A lot of people might not be comfortable buying fabric online -- they want to see and feel it in person. Spoonflower needs to start on a local level to be really successful. It could be worthwhile to send out samples to the stores. Eventually, the company could partner with a large fabric store, like Jo-Ann Stores. Each store could have a Spoonflower section, a store within a store.
PITCH NO. 2: Become a resource Lexy Funk, co-founder of Brooklyn Industries, an apparel retailer and design firm in Brooklyn, New York.
Spoonflower needs to do more than just sell custom fabric, which could become a commoditized product. The site could offer to produce garments, tablecloths, napkins, and curtains from the fabric at a reduced price. Spoonflower could also offer tutorials on creating fabric designs on your computer or offer access to dress patterns. That way, it wouldn't just be a product site; it would become a knowledge source for fabric design.
PITCH NO. 3: Hold a contest Joy Gendusa, founder of PostcardMania, a direct-mail marketing company in Clearwater, Florida.
Everybody knows somebody who wants to be a designer. I would invite up-and-coming designers to submit fabric designs and get the word out through design schools. The winner could receive a small cash prize, plus some design education and publicity. The contest could easily generate go
PITCH NO. 4: Target design schools Johnny Earle, founder of Johnny Cupcakes, a Weymouth, Massachusetts-based maker of limited-edition apparel
I think Spoonflower would be very useful for students at fashion schools. They need to use different fabrics for their projects, and they're constantly trying to come up with innovative things. Spoonflower's founders should contact different schools and send them samples. It could offer students discounts. Once the company has formed relationships with the schools, word of mouth will spread quickly.od PR. I would try to get a partnership with a network like Bravo or coverage on Good Morning America.
Feedback on the Feedback: Fraser likes most of these suggestions, and Spoonflower has already been experimenting with a couple of the concepts: The company holds weekly design contests and has established an affiliation with North Carolina State University's school of textile design. But Fraser is against the idea of producing finished goods. "I'm very attached to the market of people who express themselves creatively by making things themselves," he says. He does like the suggestion of creating tutorials for users, however. "I am in favor of anything we can do to facilitate the sharing of knowledge around crafts," he says.
If you don't like the selection at the fabric store, create your own textiles. That's the idea behind Spoonflower, a Mebane, North Carolina based company that lets users upload their designs and have them printed on a selection of cotton fabrics. Co-founders Stephen Fraser and Gart Davis, formerly executives at Lulu.com, an online self-publishing service, were inspired to start the company after Fraser's wife, an avid seamstress, had trouble finding fabric she liked for curtains. Spoonflower's custom cloth sells for $18 to $32 per yard. Since its launch in October 2008, Fraser says, Spoonflower's site has amassed 40,000 users, and the company is on track to take in $1 million in sales this year. Recently, Spoonflower began letting customers buy the designs of other users. It offers a 10 percent commission to the designers. Fraser believes this will help the site attract crafters who may not be proficient enough in Photoshop to design for themselves. How should the company market itself? We asked four entrepreneurs to weigh in.
PITCH NO. 1: Partner with stores Jake Nickell, co-founder of Threadless, a Chicago-based company that sells user-generated T-shirt designs
I think partnerships with fabric stores are a great way to go. A lot of people might not be comfortable buying fabric online -- they want to see and feel it in person. Spoonflower needs to start on a local level to be really successful. It could be worthwhile to send out samples to the stores. Eventually, the company could partner with a large fabric store, like Jo-Ann Stores. Each store could have a Spoonflower section, a store within a store.
PITCH NO. 2: Become a resource Lexy Funk, co-founder of Brooklyn Industries, an apparel retailer and design firm in Brooklyn, New York.
Spoonflower needs to do more than just sell custom fabric, which could become a commoditized product. The site could offer to produce garments, tablecloths, napkins, and curtains from the fabric at a reduced price. Spoonflower could also offer tutorials on creating fabric designs on your computer or offer access to dress patterns. That way, it wouldn't just be a product site; it would become a knowledge source for fabric design.
PITCH NO. 3: Hold a contest Joy Gendusa, founder of PostcardMania, a direct-mail marketing company in Clearwater, Florida.
Everybody knows somebody who wants to be a designer. I would invite up-and-coming designers to submit fabric designs and get the word out through design schools. The winner could receive a small cash prize, plus some design education and publicity. The contest could easily generate go
PITCH NO. 4: Target design schools Johnny Earle, founder of Johnny Cupcakes, a Weymouth, Massachusetts-based maker of limited-edition apparel
I think Spoonflower would be very useful for students at fashion schools. They need to use different fabrics for their projects, and they're constantly trying to come up with innovative things. Spoonflower's founders should contact different schools and send them samples. It could offer students discounts. Once the company has formed relationships with the schools, word of mouth will spread quickly.od PR. I would try to get a partnership with a network like Bravo or coverage on Good Morning America.
Feedback on the Feedback: Fraser likes most of these suggestions, and Spoonflower has already been experimenting with a couple of the concepts: The company holds weekly design contests and has established an affiliation with North Carolina State University's school of textile design. But Fraser is against the idea of producing finished goods. "I'm very attached to the market of people who express themselves creatively by making things themselves," he says. He does like the suggestion of creating tutorials for users, however. "I am in favor of anything we can do to facilitate the sharing of knowledge around crafts," he says.
How to Reduce Your Spam Complaints by 75%... by Fox Business (Jan 21, 2010)
Spam complaints can be detrimental to your email marketing campaign, and worse, tarnish your sender reputation. Even the best permission-based email marketers (those who send relevant promotions and email newsletters to their opted-in subscribers) get some spam complaints. If you receive more than 1 complaint per 1,000 emails sent, or more than 0.1%, continue reading.
One of the most effective ways to reduce or prevent spam complaints is to put your unsubscribe link where it is easy for subscribers to find — at the top of your email. Many email marketers have reported a reduction in complaints of 75% or more after moving the unsubscribe link to the top of the email.
Some email marketers might be concerned that an easy to find unsubscribe link will cause more readers to unsubscribe, thus reducing their list size. The fact is, if subscribers who want to get off your list cannot find your unsubscribe link quickly (about two seconds), they are going to use the very easy to find complaint button in their email programs. Complaints hurt your future email deliverability so you want to do everything you can to prevent your subscribers from clicking on their complain button.
Subscribers are more likely to choose the unsubscribe button if you make it easy to find. By making your unsubscribe link highly visible, you keep your emails from being blocked from those who really want to receive them.
Are you an email marketer that gets low complaints? There is always room for improvement. You may still want to consider making the unsubscribe link more prominent in your communications to bring your complaint rate down even lower and improve your deliverability.
One of the most effective ways to reduce or prevent spam complaints is to put your unsubscribe link where it is easy for subscribers to find — at the top of your email. Many email marketers have reported a reduction in complaints of 75% or more after moving the unsubscribe link to the top of the email.
Some email marketers might be concerned that an easy to find unsubscribe link will cause more readers to unsubscribe, thus reducing their list size. The fact is, if subscribers who want to get off your list cannot find your unsubscribe link quickly (about two seconds), they are going to use the very easy to find complaint button in their email programs. Complaints hurt your future email deliverability so you want to do everything you can to prevent your subscribers from clicking on their complain button.
Subscribers are more likely to choose the unsubscribe button if you make it easy to find. By making your unsubscribe link highly visible, you keep your emails from being blocked from those who really want to receive them.
Are you an email marketer that gets low complaints? There is always room for improvement. You may still want to consider making the unsubscribe link more prominent in your communications to bring your complaint rate down even lower and improve your deliverability.
Great No-Cost Software...by Mark Spoonauer Inc. Magazine
added 1-24-10
Free is a lovely word; unfortunately, it's often followed by a disappointing product. We have found 10 great free apps that will help you run your business. Some are so good, you might even be willing to (shudder) spend money on them.
BEST FOR REMOTE TECH SUPPORT: CROSSLOOP CrossLoop is an easy-to-use desktop sharing tool that allows your company's IT experts to diagnose and fix computer problems even if they are thousands of miles away. Don't have an IT department? Use CrossLoop's marketplace to find prescreened, independent IT professionals who set their own fees and are rated by other people who have hired them.
BEST FOR MAKING VoIP CALLS: SKYPE The latest version of Skype offers much better audio quality while using 50 percent less bandwidth. The improved video calls are now easier to start and can fill up your whole screen at a smooth 30 frames per second. A new screen-sharing feature allows you to share a document, presentation, or website with another Skype user. Skype charges for some features, but calls to other Skype users are always free.
BEST FOR BASIC ACCOUNTING: QUICKBOOKS SIMPLE START FREE EDITION The free version of QuickBooks lets you create invoices, print checks, handle payroll, and manage up to 20 customer accounts. There are plenty of free bookkeeping tools on the market, but QuickBooks is the best option for growing companies, because it's easy to step up to the paid version ($99.95), which lets users track more than 10,000 customers.
BEST FOR SYNCING WITH OUTLOOK: GOOGLE CALENDAR SYNC Many businesses are switching to Google Apps because it's cheaper than Microsoft Exchange. But not everyone wants to abandon the familiar look and feel of Outlook. Use this tool to sync from Google Calendar to Outlook or vice versa. Or perform a two-way sync based on a schedule you set. Unfortunately, some of Google's features -- like e-mail reminders -- won't work in Outlook.
BEST FOR ORGANIZING OUTLOOK: XOBNI Think of Xobni (pronounced ZOB-nee) as a supercharged search engine for Outlook. Search for a name in the Xobni sidebar, and it will find the person's contact information, previous e-mails, Facebook and LinkedIn profiles, Hoover's data, and recent attachments. You can search for keywords as well and even place Skype calls without leaving Outlook.
BEST FOR WEB CONFERENCING: DIMDIM DimDim allows you to host an unlimited number of Web conferences with up to 20 guests for free. Meeting hosts can show PowerPoint presentations or share documents. Plus, you can allow attendees to view your desktop, which is great for software demos. The whiteboard feature allows hosts and attendees to brainstorm together. Step up to the paid version for larger conferences.
BEST FOR TRACKING TASKS: DOOMI Simple but elegant, Doomi allows you to create a to-do list and check off tasks when you are done. To keep yourself on schedule, you can customize a completion time for each task. Finished tasks are stored in a separate list until you clear them -- great for viewing the day's accomplishments. We just wish Doomi synced with Outlook.
BEST FOR WORD PROCESSING: ZOHO WRITER An excellent alternative to Microsoft Word or Google Docs, Zoho Writer lets users collaborate on a document online, in real time. It also has an offline mode, so you can work on documents even without Internet access. Zoho Writer can also be used to post directly to a blog. Zoho's 18 other free apps include a customer relationship management tool, database software, and an applicant tracking program.
BEST FOR VIEWING PDFs: FOXIT READER 3.0 Foxit is one of the best programs for viewing and modifying PDFs. It uses less memory than Acrobat Reader, launches almost instantly, and allows you to convert PDFs into simple text files. Plus, unlike Acrobat, it lets users annotate documents (draw graphics, highlight text) without paying extra. Now, if only Foxit's PDF Creator and PDF Editor programs were free, too.
BEST FOR AUTOMATIC BACKUP: MOZY Mozy will store 2GB of data online for free; just choose what you want to save, and Mozy automatically backs up the files whenever changes are made. It's a great way to protect your most sensitive information in case of an emergency. Plus, you can access your documents from anywhere. If you want to store more, upgrading to an unlimited account costs $4.95 per month.
BEST FOR REMOTE TECH SUPPORT: CROSSLOOP CrossLoop is an easy-to-use desktop sharing tool that allows your company's IT experts to diagnose and fix computer problems even if they are thousands of miles away. Don't have an IT department? Use CrossLoop's marketplace to find prescreened, independent IT professionals who set their own fees and are rated by other people who have hired them.
BEST FOR MAKING VoIP CALLS: SKYPE The latest version of Skype offers much better audio quality while using 50 percent less bandwidth. The improved video calls are now easier to start and can fill up your whole screen at a smooth 30 frames per second. A new screen-sharing feature allows you to share a document, presentation, or website with another Skype user. Skype charges for some features, but calls to other Skype users are always free.
BEST FOR BASIC ACCOUNTING: QUICKBOOKS SIMPLE START FREE EDITION The free version of QuickBooks lets you create invoices, print checks, handle payroll, and manage up to 20 customer accounts. There are plenty of free bookkeeping tools on the market, but QuickBooks is the best option for growing companies, because it's easy to step up to the paid version ($99.95), which lets users track more than 10,000 customers.
BEST FOR SYNCING WITH OUTLOOK: GOOGLE CALENDAR SYNC Many businesses are switching to Google Apps because it's cheaper than Microsoft Exchange. But not everyone wants to abandon the familiar look and feel of Outlook. Use this tool to sync from Google Calendar to Outlook or vice versa. Or perform a two-way sync based on a schedule you set. Unfortunately, some of Google's features -- like e-mail reminders -- won't work in Outlook.
BEST FOR ORGANIZING OUTLOOK: XOBNI Think of Xobni (pronounced ZOB-nee) as a supercharged search engine for Outlook. Search for a name in the Xobni sidebar, and it will find the person's contact information, previous e-mails, Facebook and LinkedIn profiles, Hoover's data, and recent attachments. You can search for keywords as well and even place Skype calls without leaving Outlook.
BEST FOR WEB CONFERENCING: DIMDIM DimDim allows you to host an unlimited number of Web conferences with up to 20 guests for free. Meeting hosts can show PowerPoint presentations or share documents. Plus, you can allow attendees to view your desktop, which is great for software demos. The whiteboard feature allows hosts and attendees to brainstorm together. Step up to the paid version for larger conferences.
BEST FOR TRACKING TASKS: DOOMI Simple but elegant, Doomi allows you to create a to-do list and check off tasks when you are done. To keep yourself on schedule, you can customize a completion time for each task. Finished tasks are stored in a separate list until you clear them -- great for viewing the day's accomplishments. We just wish Doomi synced with Outlook.
BEST FOR WORD PROCESSING: ZOHO WRITER An excellent alternative to Microsoft Word or Google Docs, Zoho Writer lets users collaborate on a document online, in real time. It also has an offline mode, so you can work on documents even without Internet access. Zoho Writer can also be used to post directly to a blog. Zoho's 18 other free apps include a customer relationship management tool, database software, and an applicant tracking program.
BEST FOR VIEWING PDFs: FOXIT READER 3.0 Foxit is one of the best programs for viewing and modifying PDFs. It uses less memory than Acrobat Reader, launches almost instantly, and allows you to convert PDFs into simple text files. Plus, unlike Acrobat, it lets users annotate documents (draw graphics, highlight text) without paying extra. Now, if only Foxit's PDF Creator and PDF Editor programs were free, too.
BEST FOR AUTOMATIC BACKUP: MOZY Mozy will store 2GB of data online for free; just choose what you want to save, and Mozy automatically backs up the files whenever changes are made. It's a great way to protect your most sensitive information in case of an emergency. Plus, you can access your documents from anywhere. If you want to store more, upgrading to an unlimited account costs $4.95 per month.
7 Holiday Marketing Mistakes to Avoid Brought to you by Fox Business.
The holidays have arrived, and you still don't have a plan for marketing to your current customers or reaching out to new markets. Why do the holidays seem to sneak up on us every single year? As much as we try to prepare ourselves for family, shopping, gift giving and travel, it's no wonder we often forget about our businesses marketing during all the holiday mayhem.
It's quite common for business owners to freeze their marketing efforts over the holiday season with the notion that they're going to start strong in the new year; little do they know, however, just how many opportunities have passed them by.
The holidays can be the best time to bring in new business and reconnect with current clients and customers. The holiday rush is not just for brick-and-mortar department stores; it can also help your business by boosting revenue and customer loyalty before the end of the year.
Here are the top seven marketing mistakes businesses make during the holidays:
It's quite common for business owners to freeze their marketing efforts over the holiday season with the notion that they're going to start strong in the new year; little do they know, however, just how many opportunities have passed them by.
The holidays can be the best time to bring in new business and reconnect with current clients and customers. The holiday rush is not just for brick-and-mortar department stores; it can also help your business by boosting revenue and customer loyalty before the end of the year.
Here are the top seven marketing mistakes businesses make during the holidays:
- No marketing plan going into the holiday season. Your holiday marketing should have been planned in the summertime, but now it's the holiday season, so what do you do? Take some time today to decide what you are going to do and offer for the rest of the holiday season. If it's just too late, then start with a New Year focus. For 2010, set a marketing calendar at the beginning of the year that can serve as a blueprint for your marketing plans year round.
- No communications. Many business owners mistakenly think that offices are closed or people are too busy to be bothered. If you choose not to follow up with leads or customers because it's a busy time of year, you're making excuses. Although the holiday season is hectic for most, for some businesses it's actually the slowest and the best time to pick up the phone and make a call for their business. If it's not the holidays, it'll be the New Year, or Spring break, then summer. Now is the best time to market precisely because so many people don't.
- No holiday offers. People, for the most part, love the holiday season; they like to focus on gift giving, vacations and family time. So if you don't provide a holiday special or offer that helps them with those goals, you are doing them--and your business--a grave disservice. Any product or service can be repackaged with a holiday offer or theme. Search online to see what other companies are offering; it might spark an idea or two for your business.
- Not sending holiday greetings to customers. These are people that have been loyal, bought from you and supported your business year round; you need to let them know that you are not only thinking about them over the holidays but that you are grateful for their business. Take a few hours out of your day and hand write a holiday greeting card. There are automated systems where you can design your own card (to add a personal touch) and you can even send a gift with the card. In addition, these services will put the postage on the card and send it for you, saving you a trip to the post office.
- Forgetting to ask how clients are doing. This is something that most businesses completely miss the boat on; they do not survey clients and customers from the current year to see how they can improve in the future. How are you going to know what worked and didn't if you don't ask? If you keep doing what you have always done, you'll keep getting what you've always gotten. Find out what worked and what didn't, look at your systems and your marketing, and then make improvements and enhance your current offerings. Offer a free gift or holiday discount to customers who take the time to complete your survey.
- Shirkingyourpublic relations. Many businesses don't reach out to the media during the holidays because the owners are under the impression that media outlets shut their doors or are too busy to bother with new story ideas. This couldn't be farther from the truth. The media is always open and looking for the next great story or feature. If you can tie your story in with the season, all the better. If you missed the holiday calendar, you can still plant a seed for a feature in the new year. A great way to connect with the media during this time of year is to contact the media using LinkedIn, which will usually go right to their inbox.
- Nottapping into year-end budgets. There are thousands of companies that earmark holiday and year-end budgets--that money must be spent. These budgets are usually set prior to the holidays and focus on staff or client gifts and employee training as well as planning for the new year. What service or product can you offer to help them meet their budget and year-end goals? If you do a keyword search that applies to your industry or topic on social sites such as Twitter, you can see what people are looking for and talking about. This can help you plan and approach contacts with holiday offers.
