How to Avoid Bursting with a Second Internet Bubble
The peer-to-peer business model, virtual employees and the so-called gig economy have been major topics in the news over the last few years. And the media have been overwhelmingly reporting on how these areas are growing like mad. Not so fast, Bunky. In recent days, dark clouds gathered and poured a little rain on the gig economy sunshine: Zirtual, a virtual assistance service, closed its doors and then reopened – pared down – after an 11th hour sale. Homejoy, a peer-to-peer house cleaning startup, went belly up. Zen99, an accounting service for members of the gig economy, died with no reincarnation plans announced. There are some lessons here, maybe the first of which – no matter what Big Bird says – is to avoid the letter Z at the beginning of your startup’s name. But since that may be purely coincidental, there’s a lot more to learn from these troubled companies. 1. Government policy matters. Homejoy co-founder Adora Cheung suggested that law suits over whether or not the cleaners using its site were, in fact, Homejoy employees, as well as a California Labor Commission ruling on Uber over a similar issue, scared off investors. We recently covered the Department of Labor’s apparent crackdown on these kinds of working situations. I should also mention that Hillary Clinton seems to hold a position that could disrupt much of the “gig economy.” Investors hate uncertainty and political currents are creating a lot of uncertainty around the peer-to-peer business model. 2. Burn rates matter. It’s a sad fact that humans tend to make the same mistakes over and over. Remember the first Internet Bubble? It can happen again and I think some of the companies I referenced at the beginning failed to judiciously control their burn rates. Explaining the situation at Zirtual, founder and CEO Maren Kate, explains how the company’s burn rate got away from them. When they moved from using independent contractors to regular employees, labor costs jumped some 20 to 30 percent. Further, the company had nearly 500 employees and offices in San Francisco and Los Vegas. While those are great cities with talented people, neither one comes cheap for business ventures. 3. Attention to detail matters. All three of the businesses I started this article with were built around good ideas, but without extremely attentive care and feeding, a good idea can turn into Frankenstein’s monster almost overnight. If you’re the founder, there’s a good chance you don’t have the operations background required to pinch every penny. It can be a very smart idea to bring in someone with the necessary practical experience. Big companies have the Fixit Guy I’ve discussed before, but that person is never part of a startup’s founding team. Sometimes a venture capital company will have those kinds of managers available to send in and save the day. But the truly wise founder pays sufficient attention to the details that the Fixit Guy – or bankruptcy attorneys – don’t need to be called in. 4. The handwriting on the wall matters. Founders have so much of their own psyche tied up in their projects that they are either blind to or choose to ignore the handwriting on the wall. You need to always have good information and be willing to act on the data. Further, you...
read moreHow to Leverage Employee Benefits for Recruitment Success
We’ve been chronicling the ups and downs of small business optimism for many months and sometimes it resembles one of those championship prize fights where the spunky challenger refuses to be beaten by the champ: He’s down! He’s up! He’s down! He’s up! All in all, I’ll stick by the prognosis I made at the beginning of the year and reaffirm my confidence that 2015 is going to be good for small business. (And hey, it doesn’t hurt that we’re entering into an important election cycle when every politician wants to be on the good side of small business owners and employees!) The hiring headache But when you start sifting through the problems that small business owners are having, one that is on the top of virtually every list is the ability to hire talented new employees. More than half of all small business owners say that they plan to expand their team this year…if they can recruit the right people. Wisely, many small business owners are adopting social media strategies to recruit talented employees. This is a natural offshoot for businesses that have developed a savvy social media marketing program. Another smart move is to look at what some of the country’s most desirable employers do to bring top quality people on board. If you think it’s hard to find good people where you’re located, the problem is compounded in Silicon Valley, where today there is virtually no unemployment in a wide range of professions. This is why companies like Google and Apple are famous for the benefits they give their employees. No in-house French bistro? While you may not have the space or the funds to offer things like a 24-hour gourmet food court or a cavernous employee game room, you can offer better insurance benefits than your competitors, such as dental, life, disability and vision. And with information easily accessible via the web, including sites like Met Life’s small business pages, developing the right strategy for your business is easier than it used to be. In other words, you can begin to get an idea of what you can offer to boost your benefit plan just by taking a few minutes to surf the web. When you decide to upgrade your benefits package, make sure that you communicate it properly to your current team as well as in any job postings you may have out in cyberspace or in the local newspaper. For example an ad that says “health, vision, dental, life insurance benefits” has a lot more impact than simply saying “benefits.” If you have to pay a few bucks more for a slightly bigger ad, it will be worth the investment. You’re far more likely to recruit the quality individuals you’re looking for. Also, be sure your current employees really understand everything that comes with any addition you make to your benefits package. Let them know that when disability insurance is part of the benefits package, for example, it means that it’s being offered through the workplace – you aren’t just scheduling appointments with an insurance broker to discuss buying it on their own. Empowering your best recruiters I stress this because your best current employees are often your top recruiters. They know the individuals within their circle of acquaintances who are good workers...
read moreThis week in Small Business: Don’t worry, Do Relax and Don’t Miss Any of these Marketing Tips
What we can learn from the marketing of genetically modified dinosaurs is among the hot tips we found on the web over the last week. And since running a small business can be as stressful as running from Velociraptors, we also dug up some great advice on taking care of ourselves and learning to worry less. Leadership, management and productivity Many of us are dogged by worry and it impedes our ability to success. Bob Burg takes a look at “Worry No More!” by Bruce Van Horn and offers some sound advice. Sooner or later, retirement is a nut we all have to crack. These six strategies to extend our savings without working longer should prove helpful. Dear Small Business Owner: Take care of yourself first, or the rest of it just won’t matter. Need help doing that? This guide will come in handy. If you get your company culture right, most other things will just fall into place. Here’s a quick primer. A B C – It’s easy as, 1 2 3 – As simple as, do re mi…and now the 800-pound gorilla formerly known as Google is Alphabet. (Hey two pop music icons referenced in one item!) Marketing and sales Small business owners can’t afford to leave any marketing stone unturned that’s why this article on four ways to integrate direct mail into digital marketing is useful. “Jurassic World” grossed $500 million worldwide in one weekend. Hmmm. Maybe we can learn something from the guys who market blockbusters. Shhh! Don’t let your competition know that public relations is the secret weapon of content marketing. With social media marketing, practical experience always trumps book knowledge. Here’s why. Reclaim your time: Six ways to be more efficient on social media! What to do if you suck at cold calling. Paul Chastain implores you to at least do tip number one! Entrepreneurship, startups and innovation Farming may not be seen as fertile ground (sorry) for a cutting edge tech startup. Farmbox Direct CEO Ashley Tyrner might disagree. Check out this video. Politics, government and the economy Writing for Fast Company, Brendon Schrader outlines why the freelance economy is growing so quickly. If you need additional reasons to be angry at Congress, you might want to join the chorus that’s complaining about how they registered themselves as a “small...
read more80 Home-based Business Ideas You Can Do
Here’s a list of 80 home-based businesses you can do. Many of these home businesses you can start right now with little or no investment. As you review this list of 80 home-based businesses, you’ll see that some are better suited as a part-time pursuit while others will require a full-time effort. Also, I’ve categorized these home-based businesses so you can easily see that some relate to one another. For example, if you decided to launch a home-based auto-stereo installation service, you could also do headlight restoration and window tinting. If you find success, you could grow your home business by eventually hiring people to provide each of these separate services. Or if you decided to become a personal assistant, perhaps being a mobile notary would fold nicely into your business model. Finally, I have purposefully abbreviated the descriptions of these home-based businesses. For example a writer could do content creations, resumes, business plans, grant proposals, advertising copy, or any number of other specialties. If one of these home businesses strikes a chord with you, do additional online research to uncover all of its variations and related business areas. Automotive Mobile auto mechanic Mobile oil change and auto maintenance Headlight restoration Towing Car audio and video installation Auto window tinting Home and garden Locksmith Landscaping Yard maintenance Yard cleanup, junk hauling Gutter cleaning Handyman Appliance repair Pressure washing Home cleaning Chimney sweep Carpet cleaning Dog walking Mobile grooming Home inspections Household organizer Home energy auditor Solar energy installer Boat cleaning/winterizing Interior decorator Fence installation Bed and breakfast Business and financial services Virtual Assistant Quickbooks professional Financial planner Accounting Tax preparation Business advisor/coaching Writing and editing services Consultant Transcription: medical or legal Debt collection Repossession service Expert witness Property management Computers and technology Computer, telephone wiring Mobile computer repair, optimization, virus removal WordPress site maintenance Web design Windows 10 upgrade assistance Software consultant Art and graphics Graphic design Photography and videography General services Event planning Wedding planner Event professionals: bartender, music, catering, etc Event sound and light equipment rental/setup Pickup, delivery, hauling service Mobile notary Child care Senior care service Personal assistant, private concierge Gunsmith Upholstery Taxidermist Hairstylist Small engine repair Educational services Music lessons Sports lessons Stock trading lessons Tutoring Computer training Health and fitness Yoga instructor Golf coach Personal Trainer Nutritional advisor Massage therapist Shopping and cooking coach Online/offline retail or wholesale eBay reseller Used book seller Etsy seller (Handmade art, crafts, jewelry) Amazon arbitrage Niche imports and/or exports Gift basket design and delivery Specialty plant...
read moreThink the Economy’s Headed South? 10 Recession-proof Small Businesses
I don’t like to be an alarmist, but I continue to believe that we live in very unsettled economic times. There are some major unknowns that could push the economy south quickly and in a major way, such as: The price of Apple stock. If it tanks, it might be like a second Internet bubble bursting. Who knows what’s really going on in China? The government has been making major moves to prop up many elements of its economy. The Euro. I don’t think we’ve seen the last of European leaders in panic mode. The end of quantitative easing. When the Fed steps off the gas peddle, what’s going to happen? This is totally uncharted territory. I could probably drum up a few more goblins that would scare us, but that’s enough for now. However, entrepreneurs and startup addicts won’t let these little threats stop them, but I think they will be looking more closely at the kinds of businesses that tend to be more recession proof. If that’s you, here’s a list of industries and businesses that you’ll want to consider. Booze. Most businesses built around beer, wine and spirits do fine during a recession. Pricier beverages don’t fare as well, but middle-of-the-road and lower-costs liquors weather the down turns like a champ. There’s an important principle here: If something is truly a habit – like wine with dinner or an evening cocktail – people do not quit no matter what the economic circumstances are. They merely adapt. Consider a liquor store or wholesale distributorship. Cosmetics. While there are barriers to the booze biz, cosmetics are a much easier industry to get into. I suppose when people are crying in their milk all day, they need some good cosmetics to put on their happy faces at night. But whatever the motivation is, cosmetics weather recessions quite well. There are many ways to pursue a business here, from becoming a Mary Kay representative to selling over the Internet. Movie theaters. Movie attendance weathers economic downturns very nicely, although the entire industry has been in a slump recently. However, the big chains have a stranglehold on new releases. Perhaps a local indie theater that cashes in on the trend toward combining movies with meals could be a hit in your hometown. Health care. Again, many segments of this industry have virtually insurmountable barriers to entry. But with a huge aging Baby Boomer population, there will be opportunities in home health care services. I also think a peer-to-peer, Uber-like nursing service might be possible. Specialty food stores. Smaller, boutique stores specializing in organic products should do well. This could be a scaled down version of Whole Foods or you could create a line of products that you sell yourself or offer through other outlets, and this ties into the next idea. Sweet things. In the same way that we won’t give up alcohol during a recession, we refuse to put down our sweet treats. You might recall that the cup cake craze pretty much paralleled the last recession. That industry over extended itself, but there are many independent cup cake bakers who are still doing fine. Give your dessert an organic, gluten free or vegan twist and maybe you can cover two bases at once – specialty food and sweet thing!...
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