Marijuana and Money: An Increasingly Comfortable Relationship?
It’s long been advised to “follow the money” if you want to know the truth about a situation. Following the money involved in the nascent marijuana commerce reveals a rather interesting story of extremes. I want to follow the money at the grass roots level of the industry and also take a look at how venture capitalists are viewing the potential of pot. Perhaps the biggest problems marijuana entrepreneurs are facing today are the contradictions between a variety of state laws and federal laws. A growing number of states have okayed marijuana for medicinal use and some of those are going even further and allowing it to be used legally for “recreation.” The Obama administration is essentially looking the other way and not pitching legal battles with states that are loosening cannabis codes. However, the next administration could take a different position. A ‘cash flow’ problem A major problem for sellers is that banks won’t allow them to open accounts because to the feds, who have a pretty tight grip on the banking industry, it’s still drug money. Because of this, most sellers conduct a completely cash business it creates logistical problems and prevents growth. First Security Bank of Nevada stepped forward last year and agreed to allow owners of marijuana shops to open bank accounts. Now a Denver-based credit union is being formed to meet the banking needs of the industry – Fourth Corner Credit Union. As the pot industry and banking industry normalize relations, it makes life significantly easier for the sellers. They don’t have to jump through hoops to write checks and they’ll be able to accept credit cards. However, unless federal law changes, they can’t enjoy many of the tax write-offs that are standard in other businesses. Is this angel investor high? Another stream of money to follow are the big bucks from professional investors and noted venture capitalist Peter Thiel made a play in this arena recently. Thiel is well known as one of the early backers of now-famous startups such as Facebook, Spotify and Lyft. In early January, his Founders Fund announced a multi-million-dollar investment in Privateer Holdings, a private equity firm that is solely invested in the legal marijuana industry. While the marijuana industry faces legal challenges, other Thiel investments have as well. Lyft, and other peer-to-peer transport systems, are running up against laws all around the world. When Thiel puts his money into something like Privateer Holdings or Lyft, he is betting that social, political and commercial pressures will force lawmakers to eventually take down the barriers. So, now that we have followed two streams of money relating to the marijuana industry, what can we conclude? It seems to me that Thiel is on the winning side. I believe 23 states already allow for medicinal marijuana and four have approved its recreational use. Now that the genie has been let out of the bottle, it will be very difficult for lawmakers to stop this forward momentum. There will be a lot more money to follow in the future....
read moreMobile Businesses: Is Opportunity Rolling into Your Future?
Sometimes old good ideas make the best new ideas and that’s what we are currently witnessing with the resurgence of mobile businesses. In earlier times, knife sharpeners were a common sight traveling through neighborhoods and towns. Today, what started as a food truck renaissance has now spread to a wide range of commercial activities. To determine if there is a mobile business in your future, we need to consider the question from four distinct points of view: Are you looking to start a new venture on something of a “shoestring”? Are you an online business that could grow by adding a mobile component? Are you a brick-and-mortar store that could grow by adding a mobile component? Do you have a home-based business that might benefit from going mobile? The other important point is to evaluate your community and determine how far you want to roam in your mobile business. Larger urban areas often lend themselves well to most mobile businesses but some smaller areas can be great too. In many cases the determining factor is the level of concentrated activity within the community. A smaller active community with lots of centralized events can be productive while a larger city with few events can prove to be a dog for many of the business models currently popular among mobile business entrepreneurs. If you are starting your business as mobile-only, you need to be sure you’re in a community that will support it. If it’s an adjunct for incremental growth and branding, then you can probably do okay in a wider range of communities. Here are some concepts that are “out on the road” right now: All kinds of food. Consider putting a twist on regional favorites. New and used. Make it yourself or find unique artisan offerings. Organic produce and products. Think farmer’s market on wheels and wheeling to all your local farmer’s markets. Pet grooming services. Tattoo parlor. Vinyl records, new and used. Beauty salon. Bring the latest coifs, nails and makeup to the street. Locate outside night clubs. Junk, I mean used treasures. You know that the guys from American Pickers would be successful anywhere they parked and there are busy flea markets in every city. Flower shop. Fitness activities. People are experimenting with mobile gyms and dance studios. Be a personal trainer on wheels. DNA and drug testing. A guy is taking this to hospitals, job fairs, accident sites and jails. Really. Sell cigars and provide a lounge. Not only can you locate at certain events, you have the potential of renting your trailer out for private parties. Some of the other concepts have that potential also. Many mobile businesses aren’t mobile all the time. They have a semi-permanent parking spot where their customers know they can find them when they aren’t at an event. Food trucks are associated with certain bars, for example. A clothing truck can find a place in a commercial district. This makes life a lot easier on owners. Many of these concepts also integrate with ecommerce, which adds another revenue stream. And since we’re talking about the Internet, one of the biggest keys to success in the mobile business world is to have a tremendous social media marketing program, and fortunately the idea lends itself very well to social media like Twitter,...
read moreHow to Get Your Social Media Lineup Just Right
The social media world is becoming more like Baskin Robbins everyday. While there aren’t 31 flavors yet, it wouldn’t surprise me if we got to that point pretty soon. That’s fine for users, but it can be confusing for small business marketers. I remember ballpark vendors at the entry gates shouting, “You can’t tell the players without a program,” so let’s create a social media “program” and pencil in the current lineup, including some stats and each player’s strengths. Facebook. The seasoned and savvy veteran. Commanded big money last time he was on the market. Can hit to all fields (demographics) and if you’re looking to target an older crowd, this is probably your first choice (second might be Pinterest). If you have an ad budget, increasingly sophisticated systems allow you to reach your audience. You can post all kinds of content here, so it gives you another place to post content you’ve created for your blog, Instagram, Twitter and others. Instagram. This is the younger player who surprised many social media scouts by overtaking Twitter in number of users. The content here is visual and the audience trends young and urban. If you can post visually interesting and creative photographs, you need this one on your team. Many businesses are doing a great job with Instagram. Scout the competition and plot your strategy. Twitter. This is the player who gives you a great quote after every game. If you can say it in 140 characters and have an occasional image you want to share, this one is for you. Skews young with a widely dispersed audience. Good for fostering conversations with your customers and clients – keeping the channels of communication open and therefore promoting your brand. Pinterest. Somewhat older women (25-45) make up the Pinterest fan club. If you make or sell visually interesting items, you need to be here, but be sure to bring your A-game of photographic skills with you or you’ll strike out immediately. You have the ability to generate great links to your site. Google-plus. This is one of the most valuable utility players in the business. By establishing a solid Google-plus profile you help insure that Google is going to get the details of your business correct. You can also engage your customers and like-minded professionals. It also offers an excellent gateway to YouTube. YouTube. When your customers go scouting for the product or service that you offer, there’s a good chance that at some point, they will be looking a videos on YouTube. You probably can’t afford to advertise on CBS during primetime, but you can post some how-to videos on YouTube that will be available to prospects 24-7. Vine. While we’re handicapping social media video platforms, we have to mention Vine. Vine is to YouTube what Twitter is to your company’s blog. Can you produce a six-second looping video with viral potential? Vine appeals to younger social media users. Major brands have used it with some success. Barcardi Rum, for example, has a six-second lesson on making a Cuba Libre. Cheers! Snapchat. When six-second looping videos consume too much time, there’s Snapchat. Users send photos that delete themselves 10 seconds after being opened. Because of that feature they can create a sense of “urgency.” One company devised a way to...
read moreHow To Wean Millennials from an Emoticon Mentality
We call it social media, but is it stripping our youth of true social skills and will that be a handicap for their career success? Despite the prevalence of ecommerce and communicating through email, text messages, and online forums, important business depends on the spoken word. Further, sales and marketing professionals understand the critical nature of personal interactions in creating long-term business relationships. A good portion of millennials starting their careers are coming in with less than satisfactory personal communication skills. A 20-something related a story to me from her workplace the other day. She works at a spa and a coworker was explaining that she doesn’t bother using big words around younger employees because she has to stop and explain what they mean. (My friend, by the way, has a real talent for words.) The blame game We can blame our society’s degrading vocabulary on parents who don’t read to their kids, schools that are battling social woes as much as they are teaching the basics, and a huge array of media – social and otherwise – that has dumbed us down. I suppose there’s more blame I could dole out, but that’s not the point. What is important is to recognize our shortcomings and work to correct them. Let’s briefly outline some problems and solutions. Conversational speech is a big one. If the art of conversation isn’t extinct, it’s certainly on the endangered species list. It’s a bottom line requirement in business, necessary for basic telephone conversations and sales calls. Many of our youth do not have the listening skills required to hold a good conversation. A lack of patience is often the culprit. Be quick to listen We need to teach students and young employees that listening is 90 percent of communication. Further, much is communicated by our tone of voice and it comes across even over the phone. In a live conversation, the tone of your voice is your emoticon. Recording and rehearsing sales pitches and practicing customer interactions should be part of training programs. Upspeak – ending a sentence with an upwards inflection – has also become a significant problem and it’s hampering employees. Business associates tend to discount people who practice upspeak. It makes them sound very young, insecure and not credible. Fortunately, individuals can wring it out of their language when they realize it’s a problem. Multitasking combined with unending social media interactions seems to be an intellectually deadly combination. Both multitasking and social media tend to keep us swimming on the surface of communication and understanding. They do not promote deep thinking. Just say no to Facebook I know a brilliant young man who is studying to be a rocket scientist, literally. He graduated from the Air Force Academy where they restrict social media engagement. He would disappear from his old friends for weeks at a time. While it took some adjustment on his part, I think it was very constructive for his intellectual and personal development. Millennials (and others) should be encouraged to track the amount of time they spend on social media and decide for themselves how productive it is for meeting the goals they have set for their lives. And, as I’ve said before, studies consistently show that multitasking lowers productivity, no matter how young or old we are....
read moreHave extra cash due to lower fuel costs? Here’s what to do with it
Amazon.com founder, Jeff Bezos, isn’t very enthusiastic about posting profits. After all, when there’s a profit at the bottom of your balance sheet, the taxman comes knocking – no, pounding – at your door. Bezos would rather create cash flow and plow it all back into the growth of Amazon.com. While none of us have a hefty Amazonian-sized cash flow to play around with, many small businesses are enjoying improved cash flow right now because of lower energy prices. To put this quite frankly, if you let all that money flow down to your bottom line or personal income, you’re going to lose a big chunk of it to the IRS. The net result will essentially erase the benefits you seem to be enjoying today due to lower energy prices. Instead of giving it to multinational oil companies or OPEC nations, you’ll be giving it to Uncle Sam. Here are some approaches to dealing with the extra cash you may have on hand because of lower energy costs. Improve and grow Invest in your business. This is the Bezos strategy. Depending on how much you are saving due to $50-barrel oil you can do things such as: Increase your marketing budget, Hire temporary employees to handle special projects, Research/develop new markets and new products, Catch up on deferred maintenance, Improve/expand your facilities, Redesign your website, Buy new equipment, Boost inventory by negotiating lower pay-on-delivery prices. Resuscitate your retirement Another tax-free way to deal with the extra cash is to invest in yourself. Plow it into your retirement accounts. Talk this over with your accountant or financial advisor. There are a variety of retirement accounts available to small business owners and if you’re at least 50ish, you can often make larger contributions, and now is the ideal time to do that. And since I’ve mentioned professional financial advice, there are some strategies that require more scrutiny that I can offer here, including: Boosting cash reserves in a contingency fund, Depositing with a bank in order to help qualify for a loan or line of credit, Setting up a holding company where you can park the cash, and others. Look to the future Having a windfall of cash due to lower energy prices is a good thing, even if some of it flows to the net income line of your tax form. But remember, energy prices will go up again. Be careful about investing this increased cash in ways that will cause you problems when your fuel bills return to higher levels. In fact, that suggests another way to spend the money: Launch an energy efficiency project, upgrading equipment and facilities, then when prices go up again, they won’t take such a big bite out of your bottom line. Image: R. Manley from public domain graphic....
read moreThis Week in Small Business: Predictions and Practical Advice
Success in small business is a constantly moving target and if you want to hit it, you need to move with it. Check out this current news and information to keep yourself well positioned. Politics and Government Small business deductions as well as the corporate tax rate are issues likely to be considered by the new Congress. Will it be gridlock-as-usual or will meaningful legislation come out of Washington, D.C.? One promising development is that among the newcomers to Congress are several entrepreneurs. Take a few minutes to get to know them. Over in Illinois, Gov. Pat Quinn just signed a law that requires businesses with more than 25 employees to have a retirement plan. Small Businesses are snubbing the federal SHOP health exchanges when seeking coverage. Owners and brokers blame limited tax credits and few options. Small Biz Inspiration Beer sales are down overall by about 2 percent but craft beer sales are up 17 percent. There may be a lesson here for small business owners. Need an “Ahhh” moment? You’ll love what this young entrepreneur did with her holiday down time. Scroll through these 15 startup ideas if you’re looking for a new venture or plan to expand. This really doesn’t belong under the topic of “Inspiration” – “Warning” would have been a more suitable heading. But no matter how it’s categorized, this cautionary tale of failure turned into success offers sound teaching. Marketing January is a good time to take stock of your business and how you’re leveraging inbound marketing. And while you’re at it, see you’re using funnels properly and reaching Generation Y prospects. Make sure your sales reps are using the marketing content you’ve taken such pains to create. And since it’s the beginning of the year, it’s time to come up with your content marketing plan. Of course you’ll want to measure leads, sales revenue, and growth, but what other data should you consider? As we head into a new year, Geektime lists five marketing KPIs you need to track in 2015. Here’s what the top agency, digital and brand players have to say about creative digital marketing in the year 2015. Want a quick preview? Automation and people are both up; Facebook is down. Adobe’s Suresh Vittal has a few differing views for 2015, including the “lonesome death” of organic search. Mark your calendars and attend some of the innovative 2015 marketing events across the nation. Economy and Finance A big chunk of the economic good news can be attributed to improvements at small companies. For those of you who would like to take a deeper look – including graphs – review this report from Intuit. Concern about taxes replaces sales as the biggest problem for small businesses. This is good news. Small business lending – loans less than $1 million – continues to lag. And if you need proof, lending fell in November. More venture capital funds were closed in 2014 (308) than in 2013 (247), but the number of funds was still lower than in any year from 2010 to 2012. Tomorrow Today It’s possible that the next hot career will be marketing professionals who are experts in creating 360-degree cyber experiences. At least the tech gurus behind the Oculus Rift headset think so. The only job requirement for being...
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