Posts Tagged ‘Small Business’

How to Get Large Corporations as Your Customers

Big and small goldfishA dream: I have been named by Google as their exclusive supplier of educational content for all their small business resellers.

To have a large and respected corporation like Google as a customer is a small business owner’s dream. It typically brings with it a steady revenue source as well as brand prestige and recognition. This is not as unrealistic as it sounds. In fact, a driving growth factor for many small businesses is a large company as a major customer.

Getting large companies to be your customer is a common way to grow rapidly. Here are the steps to take:

  1. List the targeted large corporations. These should be ones that have a demonstrated need that your business can solve. They should have a record of buying your types of products or services from small businesses.
  2. Find the right person inside the company. Many times there is an employee that has specific responsibilities for using vendors that are small businesses or ones that are minority or women owned status. If this corporation does a large amount of work with local, state of federal governments, they may even have requirement to do a certain amount of business with your size or type of company.
  3. Find someone to help. Ask your professional and social network for introductions to people they know inside the targeted large corporations. Almost any contact will do in order to get past the traditional company gate keepers.
  4. Find a program. The SBA has specific programs designed to help small businesses get sales from the federal government. Many Chamber of Commerces also have mentor programs to link up local small business with large corporate headquarters in their area.

The influx of revenue from a large corporation can bring dangers to the small business. Here are the big ones to avoid:

1. Cash flow crunch. Many corporations negotiate longer payment terms and small businesses accept them. Be aware of the cash flow problems this can cause by paying for cost of goods or services well in advance of payments from this customer. Do the math in a cash flow statement to measure the exposure.

2. Over expansion to meet short term demand. Large corporations can boost a small businesses sales quickly but they can change course and leave just as fast. Get written longer term commitments for any major investment of capital to meet their demand.

3. Revenue concentration in one customer. Many growing businesses have at least one customer that is 25% or 50% of their revenue. This can be a precarious position for any company. Seek customer diversity as an ongoing goal.

Tell me your story on how a large corporation drove the growth of your business.

Local Resources that Can Help Your Small Business Succeed

Posted on by Carol Roth

5-1 Local Resources smallSometimes, the best source of information for your small business is right in your own back yard. In fact, thanks to the Internet, great resources from around the country can come directly to your desktop. Here are six benefits that you can reap with local resources.

1. Networking

Finding new clients is critical to any business, but getting to know people within your industry can be just as important. This is how you can gain new ideas and find ways to solve problems. 

Opportunities for networking are as varied as the types of businesses they support, so you need to do your own research to find a network that fits your needs. The U.S. Chamber of Commerce can help at a national level, but most businesses benefit more with support from a local chapter. In fact, a search for “Chamber of Commerce” is likely to instantly display links to your local chapters, since your cookies probably reveal where you are.

Don’t automatically discount organizations that charge dues, such as industry associations. Their programs can provide a phenomenal professional experience and the like-minded people you meet can become lifelong friends and associates. Before paying the dues, you can try them out by attending a meeting to assess their potential value for your business.

2. Government Contracting Assistance

It may seem impossible for a small business to gain a government contract, but there are many online resources that can help you find leads and even provide the guidance that can make the proposal process seem less overwhelming. Check out these sites:

  • Not just for women: Check out the Women’s Business Development Center, where a search for “government contractor” provides a wealth of information that works for women — and men, too.
  • Contractor registration and education: You can register for government contracting from the U.S. Small Business Administration (SBA) site, go to their government contracting classroom, and more. Just click the Contracting link from the home page to get started.
  • Advice to meet your needs:  Between the links to everything from government contractor training to information about Federal Tax ID numbers — and the articles of interest at the bottom of the page — you can spend lots of time at, but it will be worth the effort.

3. Access to Capital

Of course, a great way to gain a high-level view of this topic is to take a few minutes to look at the video posted at my Business Unplugged ™ blog. That being said, a number of other resources can also provide great tips:

  • The SBA (again): Don’t expect the SBA Small Business Loans pages to hand you money directly, but they provide a guarantee that can encourage lenders to extend loans and can point you to a network of lenders. Check out their advice, as well.
  • Online business publications: Online business publications like Entrepreneur provide high-level advice on raising capital, while letting you drill down to the details that interest you.
  • Networking groups:  Your local chamber or industry organization, as discussed above, can also put you in touch with various traditional and alternative lenders in your area.

4. Mentoring

You may have an amazing skillset after working for years within your industry, but that doesn’t mean that you know everything about starting and running a business. Why not turn to someone who has a track record of business success? That’s what SCORE is all about.

The website alone provides valuable information, as well as access to online and local workshops. But, entrepreneurs at all stages of business can also schedule personal meetings with volunteers- all of whom are former business executives- at more than 300 locations across the U.S.  SCORE provides excellent assistance to help you grow your business and it’s entirely free.

5. Ongoing Education

Many companies are committed to helping small businesses succeed. For example, Nextiva has a fantastic blog and resources for small business success. Constant Contact offers a free program called Small Business Innovation Loft, along with many other resources. And, if you’re looking to get up to speed on technology, Microsoft partners with a variety of organizations, such as local Chambers of Commerce, through their Microsoft Community Connections programs, to provide you resources and information to help you keep pace with changes in business and technology.   They also provide information via articles and videos on their website.  Look into these and other brand’s resources that are available both locally and online.

6. Local Government Offices

Your local government often has a strong dedication to helping your business do well. In Chicago, for example, the Office of the City Treasurer website provides amazing resources, such as contests, expos, education and a resource guide that leads businesses to other information and the Mayor’s Office runs a Small Business Center that helps you streamline permitting and has launched a Small Business Initiative. Don’t forget about these local resources that are available to help you succeed.

It Takes a Village to Run a Small Business

Actually, that’s a bit tongue-in-cheek — small business owners have the ultimate responsibility for running their own businesses. But, you don’t have to go it alone. There are many free and low-cost resources to help guide you along the way, many of which are right in your own backyard.

How to Manage Hyper Growth in Your Business

Posted on by Barry Moltz

4-30 business growth smallEvery small business owner likes speed. They want to rapidly add sales and people to create a large company to show they are successful. But this type of hyper growth can get many small businesses into trouble since they lack the money, the skills or the infrastructure to support it. As a result, they can eventually grow themselves right out of business.  

The key is to manage these three components of growth. Here is how to do it:

Get more cash: Growing companies eat cash. Expenses always lag sales revenue and cash payments from customers. Increasing sales typically means more inventory which equates to bigger cash investments. It also means adding people expenses before they produce revenue. Accounts receivable also goes up as customers pay after the company is required to pay for their cost of sales vendors. To understand this equation, a cash flow statement is critical. Learn how the company’s cash varies with its growth. Produce a pro-forma cash flow statement to predict what it will be in the future as expenses and revenue grow. This is difficult to do, so ask for assistance from your accountant or another financial resource. There are many analytical tools that can also help. (source)

Hire skilled people. As the company grows, the small business owner will need more experienced people. Entry level employees that are trained will no longer learn fast enough. Higher skilled team members will cost more money to hire. As a result, invest in one critical hire at a time and make sure that they are successful before adding the next key person. Even experienced people will take time to become effective in their new job. This is important not only from a productivity aspect, but from a company cultural fit. Rapidly hiring of people will shift the company culture and the small business owner needs to ensure it goes in the desired direction.

Improve infrastructure. Fast growing companies need bigger and more sophisticated infrastructures because of the increased number of customers that are serviced. This could mean more office space, better operational software or additional support services like IT and HR. Fortunately, team members can now effectively work remotely which minimizes the need for additional office space. Software as a Service (SaaS) allows companies to easily ramp to use the most sophisticated applications. Freelancers are easy to identify for support other support services using sites like Odesk or Elance.

Remember that sales growth does not always mean success unless it is supported by more cash, better people, and an improved infrastructure.

Nextiva Tuesday Tip: Don’t Let Technology Destroy Your Humanity

4-14 automated customer service smallWhen it comes to customer service, how much automation is too much? For a small business owner, using technology to automate customer service assistance—such as enabling customers to schedule appointments online or request quotes online—saves time and money.

However, it’s important to think about customer service not only from a business standpoint, but also from your customers’ point of view as human beings.

A friend of mine recently had two experiences in medical offices that illustrate this point. When she visited her doctor’s office, she was surprised to see that the entire check-in process had been automated. She signed in on a clipboard next to a sign saying “Check In Here” with an arrow pointing to a computer terminal. The touchscreen guided her to update and confirm address, insurance and other information. The receptionist and two nurses sitting a few feet away never even bothered to glance up.

My friend admitted that while she understood the motivation behind the change, it bothered her a bit. “When you’re about to put on one of those skimpy exam gowns and bare your all to the doctor, it would be nice if someone at least said ‘Hello’ first,” she grumbled. She left the office feeling awfully dissatisfied with the customer service. 

A few weeks later, the same friend went to get some tests done at another medical office. This time, she was given an iPad to check in on, but it was a totally different experience. First, she was greeted by a genuinely friendly receptionist, who handed her the iPad, showed her how to get started, walked her over to a seat, and checked on her a few minutes later to make sure she wasn’t having any problems. What a world of difference! My friend left feeling delighted with the new technology—and feeling positive about the medical office.

Whenever you’re making technological changes to your customer service, keep in mind that…

…Different generations have different expectations. My friend is 50, but a 20-something customer might have loved the concept of the no-human-contact medical office. Seniors, for whom doctor’s appointments are often one of their only social outlets, would likely hate it. In general, younger people love self-service, while older people feel slighted by it.

….Your industry matters, too. A high-touch or social-oriented business like a beauty salon or restaurant may benefit from more of a personal touch in customer service.

…Customers’ emotional state matters. Customers who are stressed about a decision or problem may prefer to talk to a live person; those who just need some basic information may be happy to get it from a FAQ list. If you offer financial consulting or tax preparation, you’re likely to be dealing with the former. If you sell shoelaces, you can probably get away with the latter.

The lesson: When it comes to customer service, don’t let your technology get in the way of your humanity. 

How to Ensure that Email Doesn’t Suck the Life Out of Your Business

4-10 to many emails smallRemember when email was fun?  We used to delight in hearing those three little words, “You’ve got mail”.  But nowadays, email has become one of the biggest time sucks in business.

Unless you hone your habits, email (and texting, for that matter) can consume countless hours of your business day. Here are four habits that can help you retain control of your inbox and focus more time growing your business.

1. Follow the Touch Once Rule

This rule dates back to the olden days, when the U.S. Postal Service delivered mountains of envelopes every day. The key to efficiency was to open the envelope, look at the contents, and then immediately take action. The junk mail went into the recycling bin, while the important things either got passed on to someone else or, at the very least, into the to-do bin for immediate action.

Email is no different, except that you don’t have to deal with envelopes. If a message requires action, take that action right now, forward it to the proper person or put it on your electronic calendar or to-do list. Everything else goes into your email trash bin.

2. Make “Safe” Unsubscribe Your Best Friend

This recommendation comes with a warning: done incorrectly, you could actually become buried in spam, when it only came up to your knees before you started unsubscribing. Many spammers initially take a guess at your email address. Once your unsubscribe message confirms that address, they pass it along to other spammers.

Still, using the unsubscribe link in a message from a reputable business can substantially cut down the number of email messages that you receive every day. For the rest of them, just mark them as spam to get them out of your inbox and into the junk mail folder, where they belong.

3. Stay True to Your Own Schedule

As a small business owner, you have to tread a fine line between remaining committed to your daily schedule and being responsive to customer needs. But you’re not an emergency room doctor — even business crises can wait an hour or two before gaining your time and attention.

Some people absolutely want to know first thing in the morning if anything requires immediate attention. If your curiosity is so strong that it prevents you from meeting your obligations, you may need to take a look before you start your day. Most people become more efficient, however, when they hold off on the email until later in the day.

Regardless of when you take that first peek, further email activity should be scheduled into your day. Your planned activities are just as important (probably more so) than constantly checking the mail. Limit the number of times that you check email to avoid interrupting other scheduled work. And you probably should turn off the audio and visual email notifications to avoid temptation.

4. Recognize that Not Every Message Requires a Reply

Every conversation has to end at some point and you don’t always have to get the last word. Once the back-and-forth stops being productive, it has gone on too long. So, when customer messages tell you that the problem is solved — or just say “thank you,” maybe they’ll be even more appreciative if you do not respond.

There are civil ways to stop the madness. For example, if you need to keep someone informed, just tell them that your message is for information only and no response is necessary. And if you use an auto-responder that replies to all incoming email, make sure that it politely states that you will respond only when a response is required.

While good email habits are a must, do not waste time trying to achieve perfection (aka achieving “inbox zero”). Even with good email habits, you’ll probably never completely empty your inbox — the cyber world just doesn’t work that way. Your true goal should be to avoid losing important communications while gaining back valuable time. With any luck, your email recipients will follow your example until good email habits abound across the world.

How to Hire an Attorney for Your Small Business

Lawyer handing over legal document at  a meeting in a cafeEvery business needs the services of an attorney. Having access to one can help you navigate complex areas like patents, trademarks, copyrights, and contracts. They can also help you choose the best business structure for your company and create employment contracts and nondisclosure agreements, if you need them. Some attorneys specialize in helping small businesses and can be reasonably priced, even for the smallest budget.

Start by Identifying What You Need

Beyond identifying the areas you need legal expertise in, you’ll also need to determine what type of lawyer you need. Some can help with general small business tasks, while others specialize in trademarks, patents, and copyrights. If there’s a specialist for what you need, seek him out. You wouldn’t go to a general practitioner if you had orthopedic issues.

If you have no need for copyrights or any complex legal advice, you can probably get by taking care of your needs on your legal questions with a general small business attorney. If, on the other hand, you want to patent your intellectual property or need several different complex contracts drafted, you’re better off hiring a professional with that expertise.

Ask Your Network for Referrals

Before you do an internet search for an attorney, see if anyone you know is acquainted with a small business lawyer. A referral can go a long way toward helping you find the right person for the job, and it will cut down on the time you spend vetting different options.

If no one you know can refer a lawyer, check with your local SCORE or Small Business Development Center to see what leads they can offer. You might even find one that partners with the local bar association to offer pro bono advice to startups!

Do Some Research

Once you’ve got your shortlist of possible attorneys to work with, dig into their qualifications online. You can review each one’s credentials on your state bar’s website or here. You want to ensure that your attorney is licensed and admitted to practice before the courts in your state. It may also be helpful to see if he has ever been reprimanded or involved in illegal activities (red flag).

Interview Your Top Three Choices

Starting a relationship with a lawyer is something you want to do carefully, because the right fit could make for a long and fruitful relationship. Always ask for business references (and check them), as well as questions like these:

  • Do I need to provide a large retainer to get started
  • What is your fee schedule for routine and non-routine services?
  • Will you provide itemized bills?
  • What is your typical response time?
  • What is the best way to reach you?
  • Have you worked with any businesses in my industry?
  • Can you give me an example of how you have helped clients secure business opportunities?
  • Can I call you on any legal problem?

Not only should the right lawyer give you satisfactory answers to these questions, but you should get a good feeling from her. You need to be able to trust your attorney with your business, so it’s important you listen to your gut in the interview.

6 Lighting Tips for Your Small Business

1-29 Lighting for Biz smallSelecting lighting for your store can be complicated. However, good lighting is one of the most important aspects of highlighting your product and making it pop. An in-depth guide to selecting lighting for your store is beyond the scope of this article, but here are 6 quick tips gathered from retail lighting professionals that should prove very helpful along the way.


1. Buy LED Bulbs By the Batch

LED bulbs have come along way in the last several years. Their energy-efficiency, long-life, and consistently improving color quality are leading more and more business owners to switch to LED’s. Despite all this progress, there can still be variations in color temperature and tone between batches of LED’s, even if they are technically the same product.


Because of these small variations, it is important to buy all your LED bulbs at once, by the batch. This ensures a consistent color temperature and tone from bulb-to-bulb and therefore throughout your store.


2. Do Not Burn Your Customers

According to Fit Small Business, “it is very important to make sure that the heat from your lights will not make customers uncomfortable.” Be aware of this and select your bulbs accordingly. Incandescent bulbs are the warmest, LED’s are the coolest, and florescent bulbs are somewhere in-between.


3. Be Sensitive to Color Temperature and CRI (Color Rendering Index Rating)

Each individual bulb has a natural tone to the light it produces. This is known as a bulb’s color temperature and is measured in kelvins. Lower-end kelvin ratings (1-2700) generally mean a warmer and softer light. Mid-range ratings (4000-4500) produce truer colors and a more natural light. High kelvin ratings (5000 and above) mimic a day-white light and are generally used in areas that need really focused and bright task lighting.


The CRI (Color Rendering Index Rating) is basically a measurement concerning light and true product color. The higher an index rating a bulb has, the truer your item color will be under that light.


4. Factor In Replacement and Energy Cost

Everybody factors in upfront bulb cost when they purchase bulbs. However, there are other cost considerations as well.


You need to include energy cost (cost of electrical usage/yr) and replacement cost ([annual hours of use divided by hours of bulb life] x cost per bulb) in your calculations as well. This will give you a more accurate picture of what you can expect to spend on lighting per year with each bulb type.


5. Use Dimmer Switches

Dimmer switches allow you to control the light level of your bulbs. This does several things:


  1. It allows you to adjust your lighting needs to fit your store atmosphere – If you have areas of your store that need different lighting needs, dimmer switches are an easy solution that does not require custom tailoring each bulb to each store space.

  2. It can save quite a bit on energy costs – If you are working in the store after-hours, you probably do not need the same level of light as a customer would. So, you can just turn down the dimmer switches and save electricity while still providing enough light to stock inventory or whatever you need to do.


If you do decide to go with dimmer switches, just make sure the bulbs you get are dimmable as well. A small detail but one that can be immensely frustrating if forgotten.


6. Spend Your Money On Accent and Task Lighting

As great as it would be to have endless resources to spend on store lighting, this is generally not the case for the average business owner. But this raises the question, where should costs be cut?


Although the real answer is going to be store specific, it is generally agreed that you want to spend your money on Accent and Task lighting. Accent lighting highlights your product, which is why your store exists in the first place, to sell product. Your task lighting ensures that your employees have enough light to keep the store running and perform necessary tasks.


If you are going to cut costs, cut out a decorative chandelier or get some cheaper general lighting. Although important, it is much easier to cut corners in these two categories without too significant a loss in overall store lighting quality. However, if you skimp on your accent and task lighting, your customers will know it.

5 Strategies to Bootstrapping Your Business

1-28 Funding Options SmallAs you prepare to become your own boss, you need to get your finances in order. You’ll need enough money to cover 6-12 months of business and personal finances before you even launch your business. That being said, you have a few options to consider in terms of where that money comes from.

1. Savings

If you’re lucky enough to have a well-padded savings account, kudos to you. This should be your first option for funding your business. Note: don’t jeopardize your own future by taking the money out. If you have a savings account to cover “rainy day” home repairs, the last thing you want to do is take that money out, and then find you need a new roof!

Consider leaving your money in your savings or money market account, and just taking what you need. That way, your money continues to earn interest.

Benefits: Using your savings account keeps you from having to take out a business loan, which many entrepreneurs are reticent to do. If you have less than stellar credit, you can purchase a Certificate of Deposit and use it as collateral for a loan while earning interest.

2. Bank Loan

The Small Business Association (SBA) is set up to help businesses get the money they need to start a business. There are banks that cater to small businesses just like yours that can help you find a great rate. Start with your own bank, or look for one that does small business lending.  Look for alternative lenders as well, such as Women’s Business Loans. Note: banks don’t lend to startups, so you’ll need to be in business two years prior to applying for a traditional bank loan.

Benefits: The SBA provides a guarantee for business loans, which means applicants with challenged credit score still have an opportunity to get funding.

3. Your Retirement Fund

You can borrow against your 401(k) to start a business. With this option, you essentially use your own money to fund your company, then pay yourself back. Just make sure you pay it back! Sometimes there can be penalties for borrowing funds, so you want to make sure you are aware of them before you take this option.

Benefits: 401(k) financing actually has lower risk than an SBA loan. If things go badly, you still have to pay for the loss, but the 401(k) provides before-tax money, reducing the effective cost. Plus, there are no credit implications and your house is not on the line as collateral.

4. Home Equity Line of Credit

If you own your home, borrow no more than 80% of your home’s value through a home equity line of credit to avoid having to purchase private mortgage insurance.  You’ll increase your chances of getting approved for one if you have great credit and good payment history. Make sure to pay attention to what current interest rates are before deciding on this strategy. And remember: you’re putting your house on the line, so if your business fails, you risk losing it if you can’t pay the loan.

Benefits: Funds are easy to access once you’ve been approved. The interest is tax-deductible, since it’s mortgage interest.

5. Friends and Family

Having a friend or family member who’s willing to invest in your business idea is a real boon. Some may want to be involved in the business in exchange for the investment, while others may hand you a check and say “pay me whenever.” Either way, make sure you’re clear on payment terms (and offer interest) and how willing you are to have someone involved in helping you make the business decisions.

Benefits: If you have a family member who can afford to loose the money they invest in your business, this means they could be more patient with letting you build your business.

Is Your Passion Enough to Start a Business?

1-21 passion into business smallPassion is an overused term in business. You keep hearing “do what you love,” but you need to be thinking about whether your passion is truly sufficient enough to start a successful business. To create a business you must provide a product or service people are willing to pay for. Maybe you love knitting baby booties, and want to make millions doing so. I’m sad to tell you: unless you employ about 10,000 other baby-bootie knitters, you will likely never reach that financial goal.

It’s important that you assess whether your passion has a profit center before you start that business. By making sure you can actually make money you’ll ensure that your business will be able to weather an economic crisis and other bumps in the road. You also need to be able to scale that profit center beyond what your own two hands can create.

Assess Your Passions

Start by looking at what you’re passionate about. Your list will likely include things you can quickly mark off your “possible business” list, like “watching WWE fights or The Food Network.” You simply aren’t going to be able to build a business around that!

Maybe you’re an avid bike rider who’s passionate about taking kids on long cross-country bike treks. Or you love animals and have a knack for training them. Maybe you are good at helping friend pull together a killer look or update their wardrobe. These are passions you can build a business around.

But go beyond those obvious passions, like what you enjoy doing in your spare time, and look at the abstract. You might enjoy working with small teams, or planning events. You might love closing a sale, or have an eye for home design. Some of these passions may be worth considering starting a business around, while others may simply be useful as you develop your business.

Consider Your Goals

Going back to that baby bootie example. If you’re content knitting 25 hours a week and making enough cash to take a vacation, leaving you ample time to spend with your kids, this could be a sustainable business model. You have to look at your resources (at this point, that’s just you, the knitter) and determine whether you can accomplish what you want with them.

Maybe you’ve got money squirreled away, and could hire your knitting club to triple your production of booties. Now you’re talking! You could create a virtual network of knitters (say that 5 times fast) and grow your business from there.

Passion is a great place to start in becoming your own boss, but it’s not the only factor to consider. You also need to be able to make enough money to hit your goal, while maintaining the type of lifestyle you desire. Profit is how we keep score in business, so just make sure you are honest with yourself about whether or not your business concept can actual make money.

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