This Week in Small Business: Win $20,000 from Microsoft, debunk some myths and sink some 3-pointers!
Microsoft is giving away more than $20,000 and the Golden State Warriors are providing marketing lessons. Those are just two of the highlights among the curated content that we have for you this week. Leadership, management and productivity You can adopt these three small business leadership strategies right now. And you should. If you think that a 401(k) isn’t right for your small business, you need to read this article that debunks three myths on the topic. Colin Shaw says that being customer centric in your small business probably doesn’t mean what you think it does. In this article for AT&T I give you nine ways to use Twitter to help position yourself as an industry influencer. Facebook has had great success with its employee cross-training program called “Hackamonth.” You can apply its principles to your small business. Do you know the differences between leadership and management? You need to. Marketing and sales Two million advertisers and counting! Facebook is getting a foothold on small businesses. Don’t have the patience for a carefully planned and executed 2016 growth strategy? Then try these five surprisingly simple growth hacks. Keep track and optimize all of your social media marketing efforts from one app dashboard. It’s free and it’s from Staples. Recycle, repurpose and reuse. That applies to your content marketing materials too. Here’s how to use those concepts via SlideShare. This case study will really help you understand how content and posting frequency can boost your small business blog. Are you sinking your three-pointers? If not, check out this article that draws marketing lessons from the Golden State Warriors. Have you considered using Pinterest analytics to inform your marketing decisions? Here’s how it’s done. Entrepreneurship, startups and innovation With prizes from $1,000 to $20,000 (plus non-cash bonuses) you should definitely enter Microsoft’s Small Business Contest. In this Entrepreneur article, Michael Mamas lists six essential keys for founding and developing a successful startup. Politics, government and the economy This survey focuses on Illinois small business owners, but the “five things (they) want you to know” probably apply across the board. Small business owners and government bodies at all levels are often at odds with one another. Here’s a story about a Norfolk, Virginia owner who won his case based on his right to free speech. Anthony B. Kim of the Heritage Foundation makes a strong case that U.S. economic freedom has been rapidly...
read moreHow to use today’s low fuel costs to power your competitive advantage
Managing fuel costs may not be quite the high-stakes proposition in your small business that it is in the airline industry, but you can learn a few things from how various air carriers have dealt with rising – and falling – fuel costs. Right now, Americans are enjoying very low fuel costs. However, we all know that we were suffering through record high costs not long ago. There are three critical things to do under these conditions: Make your best guess as to which direction fuel will go next, Capture savings when costs go down, and Find ways to reduce costs when the price goes up. Let’s see how these price swings have hit air carriers. For example, when prices were going up, Southwest enjoyed a competitive advantage because it had bought future contracts that locked in lower prices. As long as prices kept increasing, “buying ahead” at the current price, worked well. Wisely, however, Southwest didn’t secure 100 percent of future fuel requirements this way. But American Airlines wasn’t hedging fuel prices at all, so when the market essentially collapsed in recent months, it was in the ideal position to cash in on the lower prices. It reminds me of the famous Clint Eastwood quote in “Dirty Harry”: “You’ve gotta ask yourself one question: ‘Do I feel lucky?’ Well, do ya, punk?” American Airlines is lucky right now, but most small business owners – if they feel their luck might run out – can’t hedge their fuel prices like the major airlines. They still need to have a sense of which direction they believe prices will go in the short, medium and long term, and plan accordingly. In the short term, the answer is easy, and this is where you need to be focusing your efforts right now. Fuel costs will be low, and they’ll probably stay that way for many months if not a year or two. Iranian oil will hit the market very soon, bankruptcies within the U.S. oil shale industry will ratchet down their costs, and economic growth in China isn’t what it was when demand for oil was driving up the price. To answer Dirty Harry’s question today, you should be feeling lucky. But if you aren’t consciously taking advantage of these lower prices, you’re wasting an opportunity that doesn’t come along very often and sooner or later you’ll be out of luck. Almost every small business is enjoying some kind of savings due to lower fuel prices. Don’t let that extra cash dissipate into the ether. Capture it. Where will this extra cash deliver the greatest benefit to your small business? Do you need to upgrade some equipment? Would it be wise to pay off some debt? If fuel costs figure heavily into your pricing structure, maybe you can cut your prices and snag some new customers or clients. You might even take the money you’re saving on fuel today and invest it in ways that will make you better prepared for the day when prices go up again – new, efficient HVAC; more fuel efficient vehicles; fleet monitoring hardware and software, etc. Only you can answer these questions. However, if you don’t sit down and calculate how much money you are saving due to lower fuel costs, it’s unlikely that you’ll make...
read moreKeys to scaling up a business for increased value
Why do Internet startups that aren’t showing a profit wind up with astronomical valuations? Scalability. The idea is that the startup will eventually find a system to make some money and by virtue of being Internet-based, that system will lend itself to being cost-effectively scaled up. And by “cost-effectively” I mean that it can produce a “multiplier effect” during a small business scale up. I’m oversimplifying, but if you have a good Internet-based business model, scaling that business can be done by adding more servers. For example, you could even expand overseas that way. Your developers could still be about the same in number (again, I’m simplifying) and located in your home office, but your business could have an increasing presence over seas. You would be able to leverage the same intellectual capital to an expanding market without increasing your overhead in “lock step.” Other business models, on the other hand, don’t scale up as efficiently. Let’s say you have an accounting firm and want to expand overseas. Essentially every direct and indirect cost (overhead) that you have to pay at home, will have to be replicated and paid overseas. If you want to create real value in your company, the first question you need to ask is how to scale your business and at the same time improve margins. If you don’t, you’ll find that as you grow, your profit margins will shrink, and that’s not a formula for creating value. If you have to spend one dollar to increase revenue one dollar, you’re headed toward a dead end. If you have to spend 95 cents to increase revenue one dollar, you aren’t much better off. You need to start with a product or service that is: Teachable, Repeatable, and Consistently delivered. Those elements position you to be able to scale up your offering. But as you begin to grow, you need to create efficiencies in your small business that allow you to support greater sales with less (proportionally speaking) overhead as well as marketing expenses. Think about mergers and acquisitions in reverse. When two companies merge, they enter into a phase where they consolidate redundant departments. Essentially the hope is to be able to support the sales volume of both companies with the infrastructure and marketing of just one. Note that usually a stronger company buys a weaker one. The weaker company didn’t plan on being weaker, but decisions management made along the way, put it in that position. The stronger company paid more attention to efficiencies as it scaled up and did a better job in sales and marketing. The point is that if you don’t relentlessly manage costs as you grow, your efforts at scaling your operation can easily backfire and put you in a weaker position in the end, despite the growth you have experienced. Here’s one more warning for any small business owner who wants to achieve scalability and create impressive additional value: If your business depends on you, it’s not scalable. You need to look at that list of three points above and find ways to make the source of your revenue stream “teachable” and “repeatable” so it continues on successfully when you’re out of the equation. It’s likely that someday you’ll want to sell your small business and take away a...
read moreThe Secrets to Improving Profits in Your Small Business
It’s about time to rummage through my spice rack and see what I need to throw away and what I need to replace. I’m sure I’ll find several little jars that have only a small bit of the original herb or spice left. In addition to those, there are probably some very old spices that I bought for one recipe and never used again. I’ll probably throw out the old and nearly empty bottles. They’re taking up room and if I were to just ignore them, every time I looked at my spice rack I’d get the impression that it was full, when in fact, several of the slots were being occupied by herbs and spices that have lost most of their flavor. (I don’t want to go all Food Channel on you, but aromatic herbs and spices lose their seasoning power over time; so don’t let yours sit on your shelves indefinitely!) I’m using this little culinary analogy to illustrate the reasons you should also review your products and services, along with your customer list. They too can go stale, and just like adding a stale herb to your food won’t improve its flavor, stale products, services and customers won’t improve the profits of your small business. Profitable small businesses You need to truly understand how to figure out profit margins and the corresponding sales volume throughout your products, services and customers. A profit wheel can help you get a good idea if your margins are healthy. With it, you first dial in your cost and then it tells you what you should be charging for the different margins you would like to achieve. This will help you find the ideal profit margin for your small business. However, if you want to improve the profits in your small business, you have to really understand your costs and be honest with yourself about them. For example, if you buy something wholesale and resell it, you have costs beyond the mere wholesale price that you pay. Your sales price minus your wholesale cost is your gross profit; but net profit is really what counts in the long run. For example, you move the product around, it takes up space on a shelf, you may package it, you count it at inventory time, your office answers phone calls about it, sometimes it gets returned and more. When you have a product with a poor margin or poor volume, these costs add up and can cause you to lose money on the item, no matter what your wholesale price or gross profit may be. Small business – high profit secrets Worse yet, these dogs are taking up time, energy and space that could be devoted to a new, more profitable item – or more of an item that really makes good money for you. (Maybe if you could warehouse more of your most profitable products, you could purchase them at an even lower cost, expand your territory and improve the profits of your small business more effectively.) Never forget the “lost opportunity” costs. Let’s turn our critical eye to your customers for a moment. Occasionally, small businesses will have some customers that just aren’t the right fit for their business model. On paper you might be making a small profit off these customers,...
read moreThis Week in Small Business: Steer clear of these management and marketing potholes!
Among this week’s collection of excellent curated content are articles that will help you steer clear of some costly marketing and management mistakes. You won’t be able to say that you hadn’t been warned! Leadership, management and productivity If yours is a retail small business, the seven growth tips here will come in very handy for planning and management. And be sure to avoid these potholes that will lose retail customers. Saying you’re sorry is never easy. Customer experience guru Jeanne Bliss makes it a bit easier. Adam Toporek says that it’s possible to keep the customer but lose the customer’s business…or at least the most profitable part of the customer’s business. Are you considering a small business payroll service? These five tips will help you get off to a smooth start. It may sound gross – dogfooding – but you should get an appetite for it if you really want to know what’s going on in your small business. Marketing and sales A great blog post needs a great beginning. The six steps outlined here will help a lot. Here’s what to consider before creating your next small business digital marketing strategy. Remember: Marketing is only the start of the selling process. If you don’t think you’re getting the most marketing punch out of Instagram, here’s how it’s done. Are you taking advantage of the fact that consumers look at their phones 150 times a day? Browse this list of 10 mistakes social media marketers are making on Twitter and be sure you aren’t guilty of any…at least going forward! Should your website be optimized for human eyes or search engines? This article on The Daily Egg sorts it out. Is the era of free social media marketing about to come to an end? Entrepreneurship, startups and innovation Attention stay-at-home moms! Here’s how you can run a successful blog. Need to make a pitch to an angel or other venture capitalist? Check out these tips from some women who have proven track records of success. Politics, government and the economy A bipartisan bill to improve small business access to government contacts is moving through Congress. Here are the highlights....
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