The Small Business Toolbox #92

The Small Business Toolbox is your place to find free and low-cost software and services to help grow your business.

The resources I post are usually easy to use and will provide some value to your business. All of the tools are ones that I either currently use or have used in the past. I don't go into much detail here so I encourage you to take some time and explore each one to see if it will be of help to your business.

If you have any ideas or suggestions for tools, you can contact us here.

Ben Sound – Creative Commons licensed royalty free music.  Great if you need an audio jing for your video or podcast.

GIPHY – Everone loves watching animated GIFS on social media.  GIPHY lets you download and create your own animates GIFS.

Google Keep – Many people still don't know that this exists.  It's a free note-taking and to-do list app and is one of my favorite productivity apps.  Simple, visually appealing and has lots of great advanced tools if you need it.  Mobile app + Chrome app available.

MissingLettr – Great social media tool that lets you create a 12-month social media marketing campaign out of any blog post or content you want to share.  Automated and awesome.

The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression.
Missinglettr

The Essential VoIP Guide For Small Business

Being able to make phone calls through the internet has become fairly common, there are hundreds of mobile apps and services that allow you to make Voice Over IP calls or VoIP for short.  From Skype to Gmail Voice, it seems like VoIP communications are everywhere.

But is the VoIP quality and reliability there so your business can make the switch from a traditional telephone service to VoIP communications?

If you have ever used one of those free mobile VoIP apps, or even Skype, you know that the quality can sometimes be sketchy, and that won't cut it when business grade communications are required.

Both internet bandwidth and speeds are growing at a rapid rate, making the transmission of a bandwidth heavy medium like voice communications not only possible but of a quality that matches any traditional telephone line.  As internet and mobile data plans get faster, VoIP becomes even more reliable to use as a communications platform.

We made the switch to VoIP about 7 years ago using Ring Central and haven't looked back.  As internet bandwidth and speeds increase, VoIP gets more and more reliable and the feature set keeps expanding, making it an even better choice for business communications.  Being able to seamlessly use our phone lines both in the office and out in the field via mobile apps has been a game changer for us.  And added features like setting up conference calls, virtual faxing and scheduled call rules, has made VoIP has been awesome.

Although VoIP can bring your small business communications to a whole new level, at a price that's cheaper than traditional telephone lines, there are still several things you need to consider before making the jump.  This guide will serve to help educate you on VoIP technology as well as what to look for when deciding to make the switch.

What is Voice over IP (VoIP)?

VoIP is the transmission of communications of voice and other communication-based media like SMS messages over the internet, instead of using a Public Switched Telephone Network, a fancy term for your traditional Ma Bell telephone line.  Your phone connects to your modem/router and communications travel over the internet via WiFi, high-speed internet connection, or your mobile data plan.

The small business playbook guide to voip

How does VoIP work?

In very simple terms, for a VoIP phone call to take place, several things need to happen:

  • A “session” is created by the VoIP protocol that  is being used
  • The protocol attempts to connect to the termination point, otherwise known as the phone number you are trying to call
  • If a connection is made, they “Shake Hands”, starting the session (phone call)
  • Your voice is turned into digital “packets” that are sent through the internet connection.  When those packets reach the termination point, it is turned back into your voice for the other person to hear.  I always visualize packets of sugar flying through the internet whenever I hear the term “Packets”.
  • When you hang up, the session is terminated

As you can see, the transmission of your voice (or any other media for that matter) is actually a very complicated and technical process that is made simple for everyday use.

The Good Things About VoIP

  • The speed of the internet today makes VoIP communications not only reliable but of a quality that matches traditional phone lines
  • Long term costs are almost always lower than using a traditional telephone line
  • A VoIP communications system comes with loads of features that you either have to pay extra for or aren't available with traditional phone lines
  • Almost always includes all of the basic features like call forwarding and caller ID in the base price

The Not So Good Things About VoIP

  • Voice quality depends largely on the speed and quality of your internet connection.
  • Unless you have a backup power source, you will lose your phone lines if the power goes out.  If the internet goes down, you will also lose your ability to make calls
  • Depending on your needs,  setting  up your system and maintaining it can become complicated
  • If your business is a heavy internet bandwidth user for other applications and you do not have a very fast internet data plan, you may need a second internet line just for your VoIP communications.

VoIP Terminology You Should Know

SIP – Session Initiation Protocol – is a protocol that is the proposed standard for initiating, modifying, and terminating an interactive user session that involves multimedia elements such as video, voice, instant messaging, online games, and virtual reality.  While there are several types of protocols used to initiate a VoIP phone call, SIP is the most widely used.

PBX – Private Branch Exchange (also called Private Business Exchange) – is a telephone exchange that is owned by a private business, as opposed to one owned by a common carrier or by a telephone company.  A PBX system allows a business to route calls to different employees (ie; employees have their own extensions) and manages the system themselves.  While a traditional PBX system involves a big physical piece of hardware on site that you have to manage, with a VoIP system, you can have a cloud based version that is hosted and managed remotely on a server.

IVR – Interactive Voice Response – otherwise known as an auto attendant, it is the annoying computerized voice that big corporations use to direct your call and to drive you insane.  They can be useful if used the right way.

DID – Direct Inward Dialing –  is basically a phone number that is assigned to your telephone line.  With VoIP you have can several DID's (phone numbers) assigned to a single line.  An example would be, with a single phone line, people can call your 1-800 number, your local number, as well as any other DID's you, have assigned to that line….and they will all ring to the same phone line.  As you can see, you can have multiple DID's for a single phone line.

IP Phone – VoIP phone – Allows you to place calls over your VoIP network.  An IP phone has it's own IP Address (like your computer does, to identify itself online) and houses all of the “brains” that helps it to communicate and connect on a VoIP network.  All of the information is stored on the phone itself, rather than with a traditional phone, which does not store any information inside it.

ATA – Analog Terminal Adapter – is a small device (looks like a modem or router) that allows you to use a traditional telephone with VoIP.  The ATA houses the “brains” (the same inside an IP phone) because traditional phones cannot communicate on a VoIP network without one.

Latency – Otherwise known as “Lag”, Latency is the time between the moment a voice packet is transmitted and the moment it reaches its destination.  If the latency is too large, you will start to experience reduced call quality and stuttering when speaking on the phone.

QoS  – Quality of Service – Most routers you buy today have QoS features built in.  What it does is it determines the importance of different types of internet activity (voice calls, viewing video, downloading, etc) and gives some activities priority over others.  So if you are speaking on the phone and someone else starts downloading a large file, QoS will know to slow down the file download as not to degrade the quality of the voice call.

Things You Can Do With VoIP That You Can't With A Traditional Phone Line

  • Assign multiple DID's, aka “phone numbers”  to a single phone line without having to purchase additional phone lines
  • Assign a virtual FAX number without having an actual FAX machine
  • Plug and Play. Since the IP phones or ATA's house the “brains”, you can unplug them from the internet, take them halfway across the world, plug it in again…..and you would get a dial tone that rings when your phone number is called.
  • Voicemail sent directly to your email inbox
  • Complex call rules like simultaneous ringing on multiple phones and automatic call forwarding after a certain amount of rings.
  • Create a cloud-based PBX system for your business
  • Make calls from your computer and even on your cell phone using your data plan.
  • Seamlessly integrate your office phones and your mobile phones so you never miss an important call.


What do you need to know before making the switch to VoIP?

There are several things you will need to take into consideration before making a decision, some are technical matters while others are business related questions you need to answer before you decide.

How many phone lines will I need?

The cost difference between traditional phone lines and VoIP really start to show when you are using several phone lines, though you will still see cost savings even with a single line.  If you are currently using several phones in your business, you will need to make sure you have Cat5 cables (these are the standard cables you connect your router to your computer devices with) that reach the areas where you intend to have a phone.  Depending on the layout and needs of your business, it may be easy to install the extra cables or it may complex.  There are also several new alternatives to installing additional Cat5 cables.

How fast is my internet connection?

Though internet speeds are pretty fast these days and can handle the load of a VoIP call, several factors need to be assessed such as:

  • The number of phone lines that will be installed and the expected use of those phones.  Will you have several people on the phone simultaneously?
  • Does your business make heavy use of computers?  If you are downloading large files or accessing HD streaming video, it may reduce the quality of your VoIP connections.

In order to have a reliable quality VoIP call, you will need to have about 100kbps of both upload and download speeds as a starter.  Fortunately, high-speed internet plans can easily handle several simultaneous calls without a hitch.  The only thing you need to be aware of is the bandwidth requirements of the other devices on your internet connection like your computers and possibly a Point of Sale (POS) system you are using.  You can check your internet connection speed here, the results will vary depending on the current bandwidth load on your internet connection.

Number of Concurrent Calls Minimum Required Bandwidth Recommended speed
1 100 Kbps Up and Down 3 MBps Up and Down
3 300 Kbps Up and Down 3 MBps Up and Down
5 500 Kbps Up and Down 5 MBps Up and Down
10 1 MBps Up and Down 5-10 MBps Up and Down

Is my traditional phone line powering anything else in my business?

Be sure that removing your old telephone line will not affect other services in your business.  If you have an alarm system, your phone line is usually the way the alarm company connects to the alarm in your business.  Also, your credit card machine or Point of Sale system is sometimes connected with dial-up service from your phone line, though most also offer a high-speed connection and are the standard connection these days.

What will be the total cost to switch to VoIP?

While your monthly payments will most likely be lower with VoIP, you still need to take into consideration the costs for the initial setup.  New IP phones/ATA's, additional equipment like extra Cat5 cables and installation can easily add up to several hundred dollars.  Calculate the entire cost of switching and determine you Rate of Return (ROI) when you recoup your investment.  Fortunately, many of the larger VoIP providers, like Ring Central,  offer some kind of incentive to make the switch.

Do I have a backup plan if I lose power or an Internet connection?

For residential VoIP customers, I usually just advise them to use their cell phone if they lose power, but for a business, you have to have a backup plan as a phone line is the lifeblood of most businesses.  For business customers, I usually make the following recommendations:

  • Have a battery backup source in case of a power failure.  For less than $100, you can get a battery that will power your modem, router, and phones for several hours
  • Keep one traditional phone line for backup.  I like to keep one traditional line to use as backup in case of a power/internet outage
  • Learn how to access your VoIP admin panel (your VoIP service provider will give you access) and learn how to forward your business phone number to another phone, like your cell phone, in case of an outage

Some Final Tips

Learn how to troubleshoot your VoIP system.  Having someone around that is familiar with the system will save you a ton of headaches when problems are encountered.  Though VoIP is very reliable, sometimes little things happen that you will need to know how to troubleshoot.  Learning how to reset your modem, router and IP phones/Ata's and being able to access your admin panel (your VoIP service provider will give you access) will save you a lot of time and headaches when you encounter problems.

Learn how to use your new system.  While VoIP offers features that traditional phone lines can't provide, they are useless if you don't take the time to educate yourself on their use.  Most VoIP users end up using their new systems exactly the way they used their old phone system (which is ok) because they never took the time to learn all of those cool features that makes VoIP such a great technology.

Making an informed choice

Do your homework before choosing a provider.  Speak to other business owners that are currently using VoIP for their phone service and see what company they use and their experience with them.  While there are many national VoIP providers like Ring Central, 8×8, and Vonage (a good choice if you will only be needing a single line and maybe a FAX line) that have very good reputations, there are lots of smaller, local companies that can provide VoIP services.  The most important thing is to find a company that has a reputation for great support as there is definitely a learning curve and bugs to work out when implementing a new VoIP system in your business.

Making the switch to VoIP communications for your business can not only save you money but can help increase business productivity and flexibility with how and where you and your employees communicate.  The important thing is to educate yourself on the technology and make an informed choice….hopefully this article helped you with both!

If you have any questions, contact me here

How To Find a Hosting Service for Your Business Website

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Having a presence online for your business is vital.  Don't you agree?

Whether you are an established business or just starting out, your business website will be an essential part of your business.

If you are just starting out online and not familiar with web hosting services, this article is for you.  Here I'll go over what web hosting is, what kinds of web hosting services are available, and things to look for and to avoid when looking for a hosting provider.

What is web hosting?

Web hosting is a service that provides the infrastructure to store your website and its files online and allows other people to view your website via the internet. Think of it like your home computer, where you store all of your files, pictures, and videos.  Whenever you want to view something, you just open it up on your computer and enjoy.  A web host does essentially the same thing except they store all of your website files on what's called a server, which is essentially a centralized computer (group of servers) that a web hosting provider owns that stores thousands of websites files for all of there customers.

What kind of web hosting options are there?

Shared Hosting

Shared hosting is when your website is stored on a web hosting providers server along with hundreds of other websites.  It's kind of like renting an apartment in a building where you have lots of neighbors.

Pros:

Very inexpensive.  You can get a lot of features for very little cost

The shared hosting market is very competitive, this helps to keep prices low and features high

Very reliable, considering how cheap it is and support is usually pretty good (depending on the provider)

Cons:

Security.  Since you are hosting alongside 100's of other websites, a major security breach by one website can potentially affect your website.  Hosting providers are really good with monitoring security threats and it's usually not a problem, but the threat still does exist.

Reduced capacity. There are bandwidth and storage limits with shared hosting.  Many hosting providers advertise unlimited everything, which is not the case.  They reserve the right to shut you down or throttle your service if you are using too much bandwidth or disk space on their servers.  For a small business, this is almost never a problem so I wouldn't worry about this

Dedicated Hosting

Dedicated hosting is when your website is hosted on its own dedicated server.  You are the only website on there and do not need to worry about other websites affecting yours.  Think of it like owning a nice single family home where your neighbors are far enough away as not to annoy you.  You also have managed hosting where the hosting company actively manages your website and the server to keep it running optimally and to maintain a high level of security.

Pros:

Great for large businesses and websites with lots of traffic

Full control over your server settings.  You can customize your server without worrying about your neighbors, like with shared hosting

Cons:

Can get expensive.  Not really feasible for a small business or if your just starting out

Requires someone to actively manage the server to keep it running smoothly

Virtual Private Hosting (VPS)

A Virtual Private Server is when your website is hosted on a server with other websites, but it's partitioned off from them and offers costs closer to shared hosting but security and performance similar to a dedicated server.  It's kind of like living in a luxury high-rise condo building, you have neighbors, but your walls are thick enough so you never hear them.

Pros:

Better security features than shared hosting

Allows custom configurations even though technically you are sharing the server with other websites

Much cheaper than dedicated hosting, though more than you will pay for shared hosting

Cons:

Still quite a bit more than shared hosting services

Quality of a VPS depends on each individual hosting company

Since you are still technically sharing server space, there may be some bandwidth and storage limitations, like with shared hosting

What is the best web hosting option for a small business?

It depends on your business.

If you are just starting out and will most likely not have thousands of daily website visitors in the near future, I would opt for the shared hosting plan.  It's cheap, reliable and makes it really easy to just get started……which most of the time is the most important thing.

When I would consider an alternative to shared hosting is when security is vital (storing sensitive customer information like with e-commerce) or I will be anticipating a large jump in visitor traffic right off the bat, I might then look at a VPS or maybe a dedicated server if finances allowed.  There is no set traffic number when you would make the switch, but if you are consistently hitting 20K unique visitors a month, you may want to start looking at it.

 

Tips on finding a good web hosting provider

Reputation.  Ask other business people with websites what service they are using.  Do some online research on a potential service provider, you'll probably find that there are lots of customer reviews and forum comments on all of the major web hosting providers.  I have had the most success in picking web hosting providers by reading reviews (and complaints) from current and past customers.  Look at their Twitter and Facebook pages to see get an idea of what customers think about them and how they communicate with their customers.

Support. Unless you are an online veteran, comfortable with programming, you'll want a hosting provider that is ready to help you out when you need it.  Just like above, search online and look out for words of praise (or scorn) from current customers.  It may even be a good idea to call the web hosting provider and see how helpful they are in answering your questions.

Scalability.  If you will be starting out on a shared hosting platform, check to see if you will be able to easily upgrade to a VPS or dedicated server if your business starts to take off.  Upgrading to a new level of service is not usually a big deal, but switching to an entire service provider can be a pain in the butt.  Make sure you have room to grow if you ever need it.

Price. Don't base your purchase on it.  You won't be high fiving yourself on the $2 a month you are saving when your website is down and your service provider is not returning your calls.

** Note: A company called EIG has purchased most of the shared hosting companies over the last few years, leaving very little competition in the shared hosting market.  Unfortunately, it has been the case that when they take over a company, the level of customer service and hosting reliability takes a major drop.  As an example, see reviews for Hostgator before 2016 and after, a stark difference in how customers feel about the company.  For shared hosting, we have been using A2 Hosting for several years, very reliable and still independent.

 

More Web Hosting Tips

Dedicated IP address.  With shared hosting, you share an IP address with the other websites on the server. If one of those websites is doing something they shouldn't and gets in trouble ( gambling sites, porn, etc), the search engines might punish them by restricting or banning the IP address of that user.  That could affect your website and unfortunately, you do not get to pick your neighbors with shared hosting.  For only a few bucks a month, it's still much cheaper than VPS hosting and gives you a little piece of mind.  And if you will be attempting to run e-commerce on a shared hosting plan, which some companies will allow, make sure you get a dedicated IP address as well as a SSL security certificate.

Avoid free hosting.  There are lots of web services that will host your website for free.  While this may be great for a personal blog or hobby website, it's not a good idea for your business.  Why?

  • You will most likely not get your own domain, but a sub-domain.  When you have your own domain, your website will look something like yourdomain.com , where with a sub-domain, it will look something like yourdomain.freewebhosting.com .  It's much more professional and beneficial to you and your business to have your own domain.  If you don't think such a vital part of your business (a website) is worth a few dollars a month, maybe you should rethink your business.
  • Most free web hosting providers will place ads on your site to recuperate the cost of hosting it for free.  It just looks unprofessional.
  • You have no control over your website or performance.  In exchange for getting it free, you give up any right to complain about the service.
  • Support is usually poor to non-existent

 * Some free hosting services offer you your own domain and upgraded features and service with a paid plan.

 

Summary

As you can see, there are lots of choices and decisions to make when choosing a web hosting provider.  It's an important decision and I would take my time and do my research before signing up for a service.  Your hosting provider is the foundation for your website, so be sure you don't jump into any old service or you might regret it later on.

If you have any questions about hosting providers, just shoot me a message and I'd be happy to help out.  You can also check out my small business resources page and see what services and tools I use for my business.

The Small Business Toolbox #91

7 Keys To Successfully Running a Small Business

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Small business and marriage have a lot in common, both have a pretty high failure rate (about 50%) and many of the ones that are still running, aren't particularly happy with its current state.  Yet, there are a small number that thrive and get stronger as time goes on.  These small businesses (and marriages) have figured out how to overcome the challenges, weather the storms and to love their business.

So how do you become that small minority that thrives over the long term?  For me personally, it comes down to a few things that I've shared below.  This list may not apply to everyone, but if you can get a grasp on everything below, you will be way ahead of the game and on the road to continued business success.

 

Learning

“Formal education will make you a living; self-education will make you a fortune” – Jim Rohn

The desire to continually learn more.  I personally think this is the single most important skill you can have as an entrepreneur because it affects how well you do everything else on this list.  Your business can't grow faster than you can, so as your business grows, you need to grow along with it.

Any business owner will tell you that they have to wear dozens of different hats as a business owner.  You need to know how to market your business, manage finances, hire and train good people in addition to every other thing that comes your way in the course of doing business.  That's a tall order for a business owner and the only way you won't let all of these things drag you under is to continually educate yourself and get better as a business owner.

One of the most transformative things for me were audio books and podcasts.  Instead of listening to the radio during long commutes, I would listen to an audio book (first on CD, then eventually on Audible.com) and now podcasts whenever I was driving in the car or running on the treadmill.  Lame?  Boring?  Maybe, but not to me since I realized how much I was learning and how much better I was getting at running my business and managing others.

 

Responsibility

“You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of. ” -Jim Rohn

In my pre-entrepreneurial life, I was a fireman in NYC.  I remember my first assignment after getting promoted to Lieutenant, my Captain told me on my first shift, “Just so you know, as an officer you're never in charge but you're always responsible”.  Well said Captain Jim, I tell people that quote when they start complaining about employees not listening to them or when they start blaming everyone else for the business problems they are having.

What I have learned over the course of owning my own business for 10+ years and working with lots of other business owners is that ultimately, you are responsible for your business's successes and failures and almost all problems are your fault.

This doesn't mean to flog yourself everytime something goes wrong, it just means to look internally for the reason things went wrong instead of copping out and blaming external forces.  That's the first step to solving problems and growing as a business owner.

When a problem arises, I ask myself, “What could I have done to prevent this?”  Underperforming employees?  Were they trained and mentored properly so they can succeed at their position?  Major advertising fail?  Did I really do my homework and research before signing the contract? Fine print on your lease is coming back to haunt you?  Did I ever read the lease properly or did I abdicate responsibility to my real estate lawyer?

For the small business owner, all roads lead back to you.  Like I said, taking responsibility does not mean beating yourself up every time something go wrong, it means empowering yourself because if you caused it, you can fix it.  People that blame others take no responsibility for their actions and you can't fix what you don't own.

 

Delegation

“Trust but verify” – Ronald Reagan

Failure to delegate is the reason why the majority of small businesses cannot grow past the mom and pop stage, where the owner has control over every aspect of the business.  In order to grow your business and take some of the pressure off of you as the business owner, you need to learn how to delegate responsibilities to others.

Most first-time business owners lack experience in hiring, training and mentoring others.  They hire half hazardously, provide little training and get frustrated when their employees underperform.  The fastest way to grow and to take the pressure off you is to surround yourself with good people and give them responsibility. An excellent book of hiring and managing the right people is the book, “First Break All The Rules”.

Another major mistake business owners make is abdicating responsibility instead of delegating.  When you delegate, others are taking charge but you are still responsible for the end result and to ensure it was completed successfully.  When you abdicate, you are giving up ownership and responsibility to someone else, relieving yourself of responsibility and over-site for things you should not.  Like Ronald Reagan said, “Trust but verify”.

 

Marketing

“Good marketing makes the company look smart. Great marketing makes the customer feel smart.” – Joe Chernov

Marketing is the lifeblood of your business, it is how you continually keep the pipeline filled with business.  Without a new stream of customers, your business will slowly die.

On the surface, marketing is pretty easy, in reality, it can be very difficult to make it work economically.  I think many new business owners take marketing for granted thinking if they spend the money the customers will follow.  We've all spent thousands on newspaper ads or direct mail campaigns that produced nothing or blown through hundreds of dollars in pay per click advertising without so much as a phone call.  Trial and error, you learn from past experiences and get better as time goes on.

If you want your business to thrive, you need to develop the right marketing mix for your business. Every business is different, what works for someone else may not work for you.  The key with marketing success is not to get it right the first time, but to continually improve over time.  Learn to test and measure and make adjustments as time goes on.  Companies that do this eventually create powerful marketing systems for their business.

Business owners also fall into the trap of trying one marketing/advertising tactic one time and dropping it to try something else.  If you decide to try something, make sure you try it enough to make the determination that it's not a good fit for your business.  Things like direct mail, SEO and networking take time to develop and to see results.  A business that runs a single direct mail campaign (or anything else) that fails and declares, “direct mail doesn't work”, is like a person picking up a guitar for the first time, playing a few clunky cords and declares, “guitars don't work”.  Yeah, they don't work for you, but they work fine for people that know what they are doing.

 

Discipline

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn

I think one of the major advantages of a franchise over an independent business is discipline.  This discipline evolves out of past experience and successes of other franchisees in the system.  A franchiser may require you to do things you may find excessive and cost prohibitive, such as expanded hours even though you are not busy or requiring front desk staff when you are losing money keeping them there all week.  They may require continued advertising spend when you are not seeing results.  What the franchiser knows is that these things will eventually pay off and make you a more successful business in the long run.  An independent business may look at these as a waste of time and resources and start cutting back before they are able to pay off.

This continual corner cutting often leads to a downward spiral that many small businesses can't pull out of.

It may be tempting to close early, stop advertising, cut staffing hours or use a cheaper quality material to save a few bucks, but often times they lead to longer term issues of customer trust, brand quality and poor service that leads to a poor business reputation and lost sales.  Sometimes you have to make tough decisions, just make sure you think about the long-term impact on your business before you make them.

 

Finances

“The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem.” – Suze Orman

Most businesses shut down due to financial reasons.  The reasons the finances are in poor shape may be numerous, but lack of cash usually brings a business to a grinding halt.  As a business owner, you need to have a firm grasp on the finances of your business.  If you're like me and hate financials, you need to get someone you trust to keep track of what is happening with your money.

You'd be surprised how many business owners ignore the financial problems they are having, thinking if they ignore it long enough, things will fix themselves.  What usually happens is that they ignore the financials until it is too late and lack the resources to pull themselves out of the financial hole they dug for themselves.

Not only do you need to understand profit and loss statements, you also need to have a firm understanding of the cash flow for your business.  Many profitable businesses went under, not because they couldn't turn a profit, but because they had major cash flow problems they couldn't fix in time.  How does that happen?  Account receivables, slow payers, having to pay for inventory and supplies up front and taking way to long to get paid by customers.  For many businesses, you need freely available cash to fill these gaps and if you take your eye off the ball, that gap can get so wide that you run out of cash.

As a business owner, know how your business works financially and never take your eye off the ball, no matter how bad you want to.  One thing I also learned is that lenders want to lend to you when you don't need, the second you run into trouble and need money, good luck trying to get a loan.  Secure you lines of credit, financial reserves, etc long before you need them.

 

Balance

“You can have it all, just not at the same time” – Oprah Winfrey

News for you, despite what you read you will never have a perfect work/life/family balance.  It's a lie.  Oprah Winfrey said it best, “You can have it all, just not at the same time”.  At any given time one part of your life will be dominating everything else, the key is understanding this and making an effort to bring some balance when the time comes.

Just starting a business?  No balance, your new business startup will consume you and take just about all of your time and mental capacity.  Starting your own business is hard work and very difficult so you it will need your full attention.

Crisis at home?  No balance, you will need to direct most of your attention to home life until things settle down.  Family comes first, your business success is pointless if it is at the expense of your family.  With your own business, there is no separation of work/home, it's not a 9-5 job where you can physically and mentally clock out every day.  It also doesn't mean that it should dominate your life, it just means that owning your own business becomes part of who you are, which is why you should enjoy what you do.

Don't feel guilty working an 80 hour week because you have a tight deadline to meet, but also don't feel guilty taking a day off to spend time with the family.  If you find yourself working 80 hours a week all the time, then there is a problem that needs to be fixed before you burn yourself out.  On the flip side, don't ignore fires that could seriously hurt your business because you planned on doing some weekend gardening.

One more note, and this is my personal opinion, don't go out and start a business unless your significant other is onboard with it.  You will hit some serious waves when starting a business and the stress can be unbearable, with the only thing keeping you together is knowing that you both jumped into entrepreneurship together.  This is a whole other article, but thought I would throw it in there.

Here's to your business success

Continual learning, taking responsibility and never taking your eye off the important things will put you on a path to continued success.   Good luck.

8 Principals and Laws Every Business Owner Should Know

Every business owner has their own set of guiding principles that helps their business stay the course.  These sets of rules and principles help guide the business and helps to create standards and consistency in the business.

As the owner of your business, you largely create these sets of laws and principles.  These may take the form of your customer service promise, your employee code of conduct, and how you as a business owner operate your business.  These guiding practices help to ensure that your business remains consistent and you don't go off track as time passes.

There are also universal laws and principles that can help guide you as a business and a business owner.  There are hundreds of these universal laws and principles, some hundreds of years old, and others quite recent.  The 8 laws and principles below are one's that every business owner should know about.  Hopefully, they will help to keep you on the track of creating a great business.

 

Kanter’s Law

Everything can look like a failure in the middle, also known as “The messy middle”

Ain't that the truth.  This term was coined by

This term was coined by Rosabeth Moss Kanter, a Harvard Business School professor, after seeing hundreds of businesses languishing months after their pie-eyed startup launches.  Everyone loves the beginning and the end, it’s that middle part, the part where the only thing that’s left is the work itself and your persistence and determination is the only thing to see you through.
Why it’s important.  After the excitement of starting a new business is gone, many business owners get into a rut.  It’s the rut where the business isn't forming as expected and you’re not sure where the end is.  You may even wonder if this is the end.  It’s important to know that most businesses go through this “messy middle” and this is the time the real work begins to start reaching that light at the end of the tunnel.  In simple terms, don’t give up!  If you find yourself struggling as a small business owner, read “The E-Myth” by Michael Gerber.  It's in my opinion, a must read for every small business owner.

Pareto Principal

Otherwise known as the 80-20 principle.

Everyone’s heard of this principle in one form or another.  Some examples are: 20% of the tasks we do account for 80% of the results we get or 80% of the value you get from relationships is from 20% of the people you know.

Why it’s important.  As a business owner, most of the value you create for your business and yourself are from a small percentage of your activities.  Your job is to figure out what activities take up your time but don’t deliver high value for you and your business, and either stop doing them or get someone else to do them.  Being busy doesn't mean you are being productive or growing your business, it just means you are using up your time.  Use your time wisely.

Parkinson’s Law

Work expands so as to fill the time available for its completion.

Do you find it strange that every employee, no matter what company they work for, can complete all of their work in approximately 40 hours each week?  Strange indeed.  Maybe it’s that those 40 hours are arbitrary and most people can complete the same amount of work in less than half the time, maybe that's why social media activity is highest during work hours.  But since they get paid based on 40 hours, they need to expand their work to fit inside these allocated hours.  With some web surfing and daydreaming mixed in of course. And yes, I've read The 4 Hour Workweek…..twice.

Why it’s important.  Realize that you (and your employees) can complete tasks much faster…….if the need arises. All you need is a sense of urgency. College kids do it all the time when they “forget” to study for several weeks and then pull off an “all nighter” to successfully pass an exam the next day.  When assigning important tasks, either to yourself or an employee, give clear and short timeframes for completion.  And be sure to follow up.

Murphy’s Law

Anything that can go wrong will go wrong

Murphy’s law is probably the most well known on this list.  When it rains, it pours.  If something can go wrong, it probably will.
Why it’s important.  Don’t go turning into Eeyore over this law, the important thing is to understand what can potentially go wrong and to be prepared if it does.  Military strategists do this all the time, creating contingency plans…..just in case.  An hour of planning will save you two hours of headaches and frustration later on.

Peter Principal

When I was first starting my career in the NYC, Fire Dept,  I once asked my senior Lieutenant why he’s spent the last 20 years in this rank and why he didn't become a Captain.  His response was, “Gary, I've risen to my highest level of incompetence”.  I didn't know there was an official principal named after this, but there is.  Kind of makes sense, you do a great job and keep getting promoted until you start not doing a great job, and remain in your current position until you eventually retire, quit or get fired.

Why it’s important.  Business owners make this mistake all the time, assuming a great employee will also make a great manager.  While an employee may be great at doing the actual work, they may not have the skills to successfully manage others to do the same level of work.The important thing is recognizing an employee's strengths and making sure they remain in a position to show those strengths off to the fullest.  Worried about losing great employees because you aren't promoting them?  Read the book,

The important thing is recognizing an employee's strengths and making sure they remain in a position to show these strengths off to the fullest.  Worried about losing great employees because you aren't promoting them?  Read the book, “First Break All The Rules”, by Marcus Buckingham for some great ideas on this subject.

*Bonus Principal!  The Dilbert Principle was coined by Scott Adams, creator of the Dilbert comic strip.  It states: “companies tend to systematically promote their least-competent employees to management (generally middle management), in order to limit the amount of damage they are capable of doing.”
Well said Scott, well said indeed!

The Dilbert Principle

Hicks Law

The time it takes for a person to make a decision as a result of the possible choices he or she has.

More choice makes for more thinking, which makes for slower decision making.  “paralysis by analysis” is the common term used to describe this. It’s like going to an ice cream shop with 100 flavors, takes forever to make a decision as opposed to choosing between chocolate or vanilla ice cream.  Numerous studies have been conducted on this subject and the results have been that offering fewer choices led to quicker decisions and a person more likely to “buy on the spot”.  Simplifying decision-making process also leads to less stress and anxiety.
Why it’s important.  Offering more to your customers is not always better, at least not if you want them to make a purchase when they walk into your store.  Even if you do offer a lot of variety, understand that you may need to actively work with a prospect during the buying process to help them narrow down their choices and to guide them on that road to a sale.  If you leave it to them to decide, you may find that it’s easier for them not to decide and go get a Latte instead.

Occam’s Razor

Among competing hypotheses, the one that makes the fewest assumptions should be selected.

The simple answer is often the correct answer.  One of the most famous examples of Occam's Razor is the Apollo moon landing hoax.  Conspiracy theorists think the whole moon landing was an elaborate hoax.  If that was true, then over 400,000 engineers, employees, and other individuals were all duped or were a part of the most elaborate hoax in world history.  NASA’s explanation was that a brilliant team of engineers created a shuttle that could transport people to the moon.  That explanation sounds a lot simpler and more likely true.
Why it’s important.  In business, we sometimes over complicate matters that offer a simple explanation.  Make decisions based on the information in front of you and try and avoid unnecessarily complicating matters unless new information tells you otherwise.

Suttons Law

The law is named after the bank robber Willie Sutton, who reputedly replied to a reporter's inquiry as to why he robbed banks by saying “because that's where the money is.”

This is a pretty simple law, go where the opportunities are. 

Why it’s important.  Make sure there is a market for your product or service before you spend your hard-earned time and money creating it.  Many businesses fail because they find out after the fact there isn't a market for what they have to offer.  Conduct your market research before going “all in”.

What principles and laws govern your business?

What rules do you find to be helpful for your business?   What other rules would you add?

5 Places Where Your Business Is Leaving Revenue On The Table

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5 Places Where Your Business Is Leaving Revenue On The Table

Every business wants to generate more revenue.  More (and hopefully better) marketing is usually the solution to that, at least that is how most business owners see it.

 

What business owners don't see is the mountain of revenue that goes untapped each year in their business.  Right in front of them, all around them, are opportunities to generate more revenue without gaining a single new customer or spending a dollar on additional marketing.

 

So why is the focus almost always on finding new business instead of maximizing the business they already have?  In my opinion, it comes down to the complexity of the solution.

 

More marketing usually means spending some money on advertising to generate interest and leads.  Pretty straightforward, spend some money and get some business.  Yes, a super simple example but you get the point….it doesn't require a ton of planning/effort on the part of the business owner, only some money in most cases.

 

On the other hand, generating more revenue from missed opportunities in your business usually requires more planning/effort than money.  Figuring out how to generate more revenue with existing opportunities requires evaluation, strategy, planning, and execution……who has time for that?  Many internal opportunities lie in operational inefficiencies, lack of training and lack of managerial oversight.  All things that pretty much place the responsibility and blame on the business owner.

 

Much easier to just spend more money on advertising than to confront these complex issues.

 

So while every business needs to generate a continual stream of new business in order to stay healthy, they also need to look at their existing business and figure out how to generate more revenue from the leads and customers they already have.

 

Below are some common places where businesses continually leave money on the table.

 

Current Customers

Your current customers are your most important source of additional revenue.  You have an existing relationship with these people and they have already proven that they are willing to spend money on your business.  You have already spent the time and money to acquire them, so why not make the most of it?

 

Look at your current customers and see what additional products/services you can offer them.  Many of your current customers may have no idea what else you offer, it is your job to introduce them to these other offerings.  If you sell a one-time product, like a home generator or HVAC system, you can offer a yearly maintenance contract to service it each year.  Look at your current customer list and see who you can offer this subscription service to.

 

If you sell replenishable products, do you know when each of your customers should be running out of product?  Timely reminders and discounts can entice customers to purchase more frequently from you.  If they currently buy from you twice a year on average, imagine what your business would look like if you could get your customers to buy three times a year?

 

From additional sales to more referrals, examine your current customer database to find opportunities to grow your revenue.

 

Upsells

Are you making the most of each sale?  Why do you think supermarkets are full of candy, magazines, beverages and small ticket items in each checkout lane?  Because these are impulse purchases that people make that they probably wouldn't have if they were sitting there in front of them.  Better yet, train your employees (or build into your checkout process if e-commerce), to offer complementary products/services at the point of sale.

 

If you sell swimming pools, offer a discounted pool chemical package at the time of purchase, they will need it anyway.  You can also offer upgraded filters, pumps, heaters, etc at the time of purchase.  A customer may not even know these upgrades are available and won't know to ask unless you offer it to them.  If you are a bakery, remind people that it's cheaper to buy by the dozen or offer a free pastry if they purchase a dozen, it can help push someone only wanting 6 pastries into buying 12.

 

Think about how you can bundle additional products/services at the point of sale to increase your average ticket size. The easiest time to sell to someone is when they have made or are about to make a purchase.  The wallet is out, their wallet is out, make the most of it because you may never see it again.

 

Conversions

I had a client that used to continually say that not getting enough leads was the one big bottleneck in their business. They would say they had a great sales team, support staff and everything needed to grow their business….except they did not have enough leads.  Since transactions happened offline, it was difficult to see conversion numbers but I was told they consistently had a 30-35% close rate once they scheduled an appointment.  That's a pretty impressive close rate considering they were selling services that cost between $8-30K.

 

Over 3 years we doubled the amount of leads they received each year, but the revenue was barely growing.  So we instituted a new CRM/Marketing Automation package to closely track every lead that came in.  And guess what we learned?  Conversions are actually sitting around 7% and a good chunk of their yearly sales are coming from old, existing referral business where the sales were pretty much automatic.  So much for a well-oiled machine.

 

With a dismal conversion rate, it makes no sense to spend more on marketing until you can fix your conversion issues.  It's like having a shower with very little water pressure due to a leaking pipe and trying to fix it by cranking up the water pressure.  Yeah, you had a nice shower but flooded your basement in the process.

 

Examine your conversions (if you use your gut, you are 100% always wrong) and your sales process and see where the leaks are.  Increasing your conversion rate by only a few percentage points can have a dramatic impact on your bottom line.  But like I said earlier, it's easier to spend more money on advertising than it is to repair a broken sales process.

 

Past Customers

Just like current customers, past customers can be a gold mine of additional revenue waiting for you to take it.  Once people stop doing business with you, it's easy to forget about them or to place them on some generic newsletter until they finally mark you as a spammer.

 

It's hard work, but maintaining relationships with past customers can keep the door open to new business.  People stop doing business with you for a variety of reasons.  Maybe they no longer needed your services, or finances got in the way, or maybe they decided to try a competitor, the point is that they purchased from you once and some of them will purchase again.

 

Maybe you are offering new products/services from when they were your customer.  Maybe their circumstances have changed and they are now ready to start buying from you again.  You will never know unless you re-open the lines of communications again.

 

I have a client who has a corporate training business that wanted figure out how to generate new business as it was in decline ever since the recession hit in 2008.  We went through his business and discovered he had run over 1500 corporate training events over the past 20 years.  When I asked him what he did to stay in touch with these past customers and to get repeat gigs, you know what his answer was?  Nothing.  Yes, he spent all of his energy trying to figure out how to get new business and completely ignored 20 years of past customers.  Shocking but true and there are many businesses out there that do the exact same thing.

 

Even if they don't need you anymore, maintaining a good relationship will keep the door open for referrals from them in the future. Go through and find some of your best past customers and start building a relationship with them again.

 

New Offerings

Do you know what your customers want?  Have you ever asked them?  For internet marketers, the most successful strategy going is to build a huge audience (leads for their online business) and then just ask them what they want.  Once the audience tells them, they go out and make it for them and make lots of money in the process.  They actually do the exact opposite of every other business, they build a relationship with their audience and then sell them whatever they are looking to buy.

 

Maybe you need to offer additional products or services to your business.  Maybe you need to bundle your products/services or the opposite, breaking your product/service into smaller parcels for your customers.  Maybe you need to do all of this.

 

Snack packs came about because some people didn't want to buy a giant pack of potato chips, they only wanted enough for a single serving.  Costco came about because families wanted to buy in larger quantities (at a cheaper price) than they could get at the supermarket.  Online tax services well audit protection services as an add-on because people who do their own taxes are afraid of the prospect of having to deal with the IRS on their own if they get audited.

 

Look at your customers and look at your current offerings and see where there is potential to offer them something new, something old just packaged and presented differently.

 

Go find that revenue

So now you have a few ideas where you can increase revenues without needing new customers or paying for more advertising.  It takes more time and effort, but cashing in on these opportunities can have a huge impact on the financial health of your business.

Things You Need To Do Before Franchising Your Business

How Franchise a Business

Do you own a business and dream of franchising it one day?  Franchising can be one of the fastest and least capital intensive ways to expand a business, but it's not without its challenges.  Many businesses have collapsed in financial ruin and destroyed their reputation by franchising their business before they were ready.

When franchising, you are using someone else's capital and commitment to open expand.  These new “franchisees” do not have your experience or expertise and need you to teach them how to be successful business owners.  You basically need to take everything you do to run your business and all of your experience and teach others to be as successful as you are.  That's a tall order that requires a lot of planning, training and commitment.

Franchising also involves many legal challenges as well, which we won't be discussing here.  Here we will be focusing on the business challenges involved in getting ready to franchise your business.

If you dream of franchising your business one day, you need to make sure you are prepared before you start.  Below are some important things that you need to have in place before you decide to start franchising.

Create a Flagship Location That Proves The Model Works

You wouldn't believe how many franchises get launched today without being able to show a single profitable location.  Some franchise concepts  launch without ever creating a location, just selling an idea.  If you want to build a long-lasting, successful franchise system, you need to be able to know the business model works.  If you as the founder of the business can't make it profitable, what makes you think strangers will?

A flagship location (most likely the founder's own location) allows you to develop your business model, learn from mistakes and to refine your processes.  It is here where you create your systems, fine tune your marketing and figure out what your customers really want.

Having a proven flagship location also makes it much easier to sell your franchise concept to would-be franchisees as you don't have to explain how it works, you can show them.

Most likely you have been running your own business for a few years and have a good idea what your business model is.  But are you profitable?  And if so, how profitable?  You have to remember that with a new franchisee, they will not have the same expertise you have and will also be paying an ongoing royalty fee to you (that's how you make your money), so you need to account for these things when looking at your franchise model.

If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!”
― Michael E. Gerber, The E-Myth Revisited

Create and Document Processes For Everything In Your Business

The majority of small businesses rely on the owner of the business for everything.  They are the ones with all of the knowledge, expertise and experience to run the business.  Employees look to them for guidance and to make decisions.  Do you see why this is not scalable and why most business owners experience burn out within a few years of starting their business?

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If you ever hope to franchise your business one day, a written operations manual is a must.  Written documentation on how you run the business is the only way others will be able to run a successful franchise location since you won't be there to tell them what to do and to answer their questions.

For a franchise, you will need a very detailed and thorough operations manual that answers every question a franchisee might have about the business, from daily operations to marketing to finance.  You need to show franchisees how to hire and train people, how to clean the facility, how to order supplies…..basically every single thing you do to run your business each day.  All of this needs to be written down and organized into a comprehensive operations manual that will become their bible when starting and running their business.

Most modern franchise operations manuals are housed online and include interactive media like video and audio files.

Create a Marketing Plan That Others Can Replicate

Creating customers and sales are the lifeblood of any business.  Without a repeatable way to generate new customers, your business will soon wither and die.  Marketing is what attracts these potential customers to your business.

If you are going to franchise your business, you need to create a marketing plan that anyone can execute, is scalable and is repeatable.  Somebody buys into a franchise system so they can hit the ground running and in order to do that, they need an excellent marketing plan to generate sales right off the bat.  When it comes to marketing, your job as a franchisor is to show them how they can generate customers and sales on demand.

Look at your current marketing plan, are you a one trick pony?  Do you rely too heavily on a  single marketing source for your business?  Worse, are you relying on contacts and relationships that took years to establish to generate the bulk of your business?  Your marketing mix needs to be comprised of a range of marketing activities, some paid and some free.  But the important thing is that franchisees need to be able to replicate it.

When a franchisee evaluates your business opportunity, they will want to see how successful your marketing is and need to feel confident that they can replicate your success.

Create a Training System For New Franchisees

Most people who buy a franchise have little prior business experience.  They buy into a franchise system to get the support and training they need to succeed inside a business model that has been proven to work.  There will be lots of hand holding, training, and communications required in order to get a new franchisee ready to start their own business.

Poor training and support can lead to disaster for a franchise.  The basic concept for a franchise is to have each and every location look and feel the same.  The food should taste the same, the service should be the same and the branding should be the same.  Whether you like McDonald's or not, if you eat a burger in California or in Kentucky, it will taste the same.  You can only do that with high-quality training and support.

Initial and ongoing training is essential if you want to each of your franchised locations to look, act and perform similarly to your own business.  The good news is that you can use technology to deliver most of your training.  Webinars, video chat, email and video are all great ways to communicate and train franchisees remotely.

Create a Plan For Growth

As you add franchise locations, you will need to scale the support for them.  Your growth strategy needs to be in place before you grow, not as a reaction to growth.  You will need to make sure you have the appropriate support staff, training resources, and finances in order to ensure your growth doesn't become a problem.

What resources will you need to have in place to service 5 franchise locations?  What about 10 or 20?  While you don't have to start making these investments now, you do need to think about how you can add them quickly and efficiently when the time comes.

 

Are you ready to start franchising?

Franchising your business can be a fast way to grow without having to make large capital investments in your business.  But it also means that you need to be much better at training, communication, and marketing as you won't be directly involved in the running of each location.

Take your time and make sure you have your own efficient, profitable business going before you look to start franchising.

5 Lessons Your Business Can Learn From Franchising

 

Franchises, you either love them or hate them.

Some, like Michael Gerber (The E-Myth), love the systems-oriented philosophy of them, the ability to build a well-oiled machine that can be replicated over and over again.  Others, like Seth Godin, see them as a path to eternal mediocrity, never to produce anything beyond “ok”

How about a middle ground?

You can have set processes and systems in your business and still retain your originality.  Why not take the best parts of franchising for your business and leave the less desirable parts behind?

I like that idea.

For most businesses, the biggest bottleneck to growth is the business owner.  All of the experience, the knowledge and know how are forever trapped inside their head, only leaking out in trickles in the form of unorganized employee training and knowledge transfer.  It's never enough to satisfy the standards the business owner has set, so in frustration, he resorts back to doing everything himself. That is the day his business stops growing and begins to die.

Eventually this leads to burnout, disappointment and growing frustrations with the business.  The business owner gets tired and worn out from bearing the never ending burden of doing everything himself.

Franchises have the ability to grow and replicate themselves for the sole reason that it's success does not depend on the owner of the business to succeed.  It depends on a system, a way of doing business.  It is the system that is implemented and improved over time and the people in the business need to learn how to work the system as efficiently as possible.

Take a look at 5 things your small business can learn from franchising and see if you can apply some of these concepts to your business.

A Written Plan

Ever play the game “Telephone”?  It's when you whisper a message in someone's ear, and that message gets repeated along a line of people…..until the person on the end has to recite the original message.  It's almost never the same message at the end as everyone along the chain gives their interpretation of the original message, often with humorous results.

When you don't have a written plan for your business, that's what you're doing, playing telephone with your employees.  Your verbal instructions are not remembered, interpreted differently, or just forgotten…….leaving your employees with varying levels of understanding.

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Do you see the confusion here?  Do you see why everyone does the same activities …differently?   Some may do a great job, others a mediocre job.  That's not fair to the customer who gets the mediocre customer experience, it's not fair to the employees who are expected to perform without proper training, and it's not fair to you, the person who busts his butt trying to build a business.

Having a written operating manual for your business can help to standardize your best practices.  Every employee has access to the same knowledge, the same method to perform the duties that make up their position.  With a written plan, you take the time once to lay out the way you want things done.  This gives every person in your business the same view of how you want things done.  Much easier on you and easier for your employees to understand and reference as needed.

It also allows others in your business to train new hires as the way your want the business run (your system) is now on paper, in an organized fashion for everyone to see.

It's nice not getting a call on a Sunday morning because your employees were able to go through your step by step guide on how to reboot the credit card terminal because it froze.

Strong Branding

Whether you like them or not, when you see the “Golden Arches”, you know exactly what's in store for you.  I'm not a fan of eating fast food, but when you're driving cross country with 4 kids in the car, spotting those golden arches on the horizon is like finding an oasis in the desert.

Wouldn't it be great if people saw your logo and got all warm and fuzzy inside just thinking about their last visit to your shop?  A strong brand can do that for you.  Franchises understand the importance of branding.  Every customer touch point is carefully designed to remind you of who they are as a company and what their brand stands for.

You won't see a good franchise substituting black and white brochures they made on their laser printer because they ran out of the color ones.  But I've seen that countless times from independent business owners who thought it was no big deal to cut a little corner like this.  Letting your phone always go to voicemail, closing earlier than your posted hours, not responding to customer communications, these are all little things that slowly eat away at the quality of your business.

All of that little “corner cutting” turns into a deterioration of your brand.  Keep your branding strong, even if it hurts the pocketbook in the short run.

Consistent Marketing

Franchises understand the need to constantly feed that machine that is your business.  Without new potential customers coming through your door, you're business will eventually wither away and die.

Most business do the same thing.  When things slow down (revenue), they cut everything, including their marketing.  Henry Ford Quote on Marketing

Franchises understand that even in tough times, you cannot save money by cutting your marketing budget.  This is something independent small business owners do all the time.  In tough times, they look to save a few dollars here and there, and it's easy to not place that ad next month or to freeze your Pay Per Click campaign for a month or two.  You don't see the results of you decision until several weeks later, when you realize that the phone has stopped ringing and nobody new is walking through your door.

oops.

Never stop marketing.  Never lose sight that even if you are busy now, if you stop marketing, the pipeline will run dry.

Most franchises mandate that their franchisees spend a certain % of their revenue on marketing activities because they understand the importance of constant marketing.  They also know if they don't mandate it, it's very easy for a franchisee to decide to save a few bucks one month and cut their marketing spend.

Even if it hurts in the short run, don't turn off your advertising and stop marketing, it'll hurt you even more in the long run.

 

Standardized Training

When you hire a new employee or train your staff on a new product or service, how do you do it?  If you're like most business owners, you do it verbally, and when the owner feels like it or when someone screws up.   It might be a team meeting or one on one, or just a “watch what I do” kind of training.   What happens to the employee that was away that week, or the new employee you hire next month, do they receive the same exact training?  Probably not.

Good training can be exhausting.  Often, after you've done the same training for several employees, you start to cut corners, leaving out little tid bits of insight that might be crucial for a new employee to “get it”.

This is also why the your employees do the same activity, differently.  They've all received the training, only it was slightly different, and left to them to fill in the blanks with their own interpretations.  This is why your business lacks consistency.

It's important to write things down so you don't forget the important stuff.  It also allows you to train a manager or key employee to help with the burden of training everyone yourself.

A good franchise will have a detailed training manual so the employee hired today is trained the same exact way the employee hired next month will be.  The next time you set out to train a new hire, bring along a pad and pen and document everything you do so you can refer to it again for the next hire.

Understanding Of Key Metrics

Do you know what your KPI's are?

If you're not sure what these are, you're playing darts in the dark.

Your Key Performance Indicators (KPI's) are the key metrics that you look to measure of success for your business.  It's a “snapshot” you can look at and get a quick feel if things are going well or if trouble is potentially brewing.  Every business has different KPI's, but everyone has them.  Examples of KPI's are:

  • The number of  leads generated each month
  • New customers acquired each month
  • Number of sales calls made each month

Franchises know their key metrics cold.  They have the advantage of amalgamating the metrics of hundreds or even thousands of individual units and gaining a deep understanding of what metrics are important and where they should be for a successful franchise location.

Find out what your important metrics are and write them on a whiteboard in the office so you and your team can see them every day.

What else can you learn from franchising?

As you can see, having your processes and training in written form will go a long way in creating consistency for you business. It'll also allow you, the business owner, more time to work on the bigger things for you business.  Keep your branding strong and your marketing consistent to avoid pitfalls many small business owners make.

Don't slack off or cut corners, even when you think it's not a big deal.  A strong business and brand takes a long time to build but can be ruined by poor decision-making and training.

11 Questions To Ask When Conducting Market Research For Your Business

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Before you start a business, you need to be sure that the marketplace wants what you are offering.  Nothing sucks more than pouring your heart and soul into a new business venture only to find out that people just aren't interested in what you have to offer.

Conducting thorough market research also opens up additional questions you may need to answer about your business and may reveal opportunities in the marketplace that are not currently being met.

Before you start any kind of marketing or advertising campaigns, you'll need to conduct some market research first.  It doesn't need to be a seven-month-long process or a 100-page document that you create, but you do need to ask yourself some questions and do some work to find out the answers.

Without a thorough knowledge of the marketplace and existing businesses, you may be putting yourself in danger before you even start. The following questions will help you to identify some important issues in your marketplace, and it will help you to double-check if there are crucial issues that you may not have considered before you start your new business.

Market Research Questions

1- Are there other businesses similar to yours that are currently operating in your market? Existing businesses like yours is not a bad thing, it means there is a market for your business.

2- How do these businesses appear to be doing?  Do they look like healthy, thriving businesses?

3- What are these businesses doing well?

4- What are these businesses doing poorly?

5- What could you do to compete with these businesses?  How would you stand out?  Is there an opportunity to create a competitive advantage here?

6- How much competition is there?  Does the market appear to be saturated?

7- If yes, are there ways that you can alter your business plan to suit a niche market?

8- What kind of people would want to buy your product or pay for your service?  What's your ideal customer profile?

9- Are there enough of these types of potential customers living in your community to support your business?  Where are they located?  Will they frequent the area you plan to be in?

10- Can the economic profile of the community support your business?  Are you selling a premium service with prices to match?  Can the community support this type of business?  Be sure your product or service matches the economics of the community.

11- Are these people the type of customers who are likely to become repeat customers? If so, why?

Market Research for Small Business Quote

Summary

Don't think about the above questions as a way to rule out starting a business, they may actually lead you be become even more creative and innovative about your new venture.  usually what happens is that answering these questions opens up new insights and potential opportunities for you.  To get some further insight, have someone you trust answer these questions too, they might have some suggestions you never thought of.

Once you have finished answering these questions, make up a list of additional questions that may have arisen during this research and find answers to them.  Armed with this information, you'll be able to make better decisions and help minimize mistakes that could have been avoided.

Once you have completed your market research, you can start working on your marketing research.  You can read a previous post titled, Five Steps to Conducting Great Marketing Research for Your Small Business