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Small Business Success Index 4

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Doing CRM the Old-Fashioned Way

November 22nd, 2010 :: Rieva_L

By Rieva Lesonsky

CRM software is one of the most useful tools a small business can have to keep customer data close at hand, easily searchable and sortable, and maximize its value. But there’s another aspect to CRM that doesn’t involve cloud computing, networks or training your team on a CRM system.

I’m talking about the old-fashioned way of CRM. Sometimes we forget what CRM stands for: customer relationship management. And that’s a skill that requires more than just software. CRM has been around as long as business itself. And as we’re heading into the depths of the holiday season, I thought this might be a good time for a refresher on the basics of building customer relationships.

  1. Get personal. Whether you’re staying in touch with customers by social networks on LinkedIn, Facebook or Twitter, include a personal touch in your posts and tweets. Use a photo of yourself on the sites—not one that’s “too businessy.” Make it friendly. Just like in the offline world, sharing stuff about yourself helps build bonds.
  2. Get offline. It’s great to meet potential customers or partners online, but make sure you take the relationships offline at some point—that’s how you truly get to know each other. Make plans to meet up for coffee or take the person to lunch.
  3. Be part of the group. I’m sure you belong to some industry associations, and while today more of these groups are forming online communities, it’s important to be a presence at these organizations’ offline events, too. Taking time to travel or spend a day out of the office may seem like a hassle, but these events are often where relationships truly begin.
  4. Put it on paper. In this day of BlackBerry’d tweets and acronymic responses, an actual handwritten note makes a huge impression. Drop a thank-you note in the mail when someone has done you a favor, and send cards on clients’ birthdays or important dates (like the anniversary of their first doing business with you).
  5. Think of the other person first. When you’re trying to grow your business, it can be easy to think in terms of “me, me, me” and what you can get out of a relationship. Try to think of things in terms of how they affect your customer—and how you can help the customer with the problems he or she is having. When you put yourself in the customer’s shoes, your relationship will naturally develop

Of course, CRM software solutions can help you attain all these goals by tracking dates, remembering details and prompting you to follow up. But keep in mind that CRM software is simply a tool in the service of a larger goal. If your heart isn’t in the right place when it comes to CRM, nothing else matters.

Image by Flickr user Yakinik (Creative Commons)

Why Are Women-Owned Businesses’ Sales Slumping?

November 3rd, 2010 :: Rieva_L

For years, we have heard how women are starting more small businesses than men are. But a recent report from the U.S. Women’s Chamber of Commerce has some not-so-positive news: Although the number of women-owned businesses is growing in number, those businesses’ sales are actually declining.

Women’s Businesses Struggle for Market Share looked at data from the Census Bureau’s 2007 Survey of Business Owners. The report shows that, while the number of women-owned businesses increased 44 percent between 1997 and 2007, those companies’ share of total business revenue shrunk from 4.4 percent to 3.95 percent.

Why aren’t the companies growing? (Note that the data used were pre-recession, so that’s not a factor.) According to the report, continuing lack of access to capital and difficulties claiming their share of government contracts are key reasons for the dwindling sales. In addition, the report noted, competition from big business is pushing many women-owned firms out of private-sector contracting.

“The media hype about the growth of women’s businesses continues to emphasize the number of women-owned firms, rather than our grossly stunted financial success,” Chamber CEO Margot Dorfman said. “This report highlights the growth challenges women business owners face and the opportunity loss our country experiences as we fail to support women as entrepreneurs and business leaders.”

The recent release of the official Women Owned Small Business (WOSB) rule, which I’ve blogged about previously on Grow Smart Business, should help address some of the contracting issues. But with the country’s 7.8 million women-owned businesses accounting for almost 29 percent of all businesses in the U.S., it’s crucially important their sales rise so they can create new jobs and opportunities. As the report warns, “If women-owned firms do not achieve strong revenue growth, women’s financial condition may continue to falter impacting families, communities, the vitality and competitiveness of our marketplace, and society as a whole.”

Image by Flickr user Kevin Dooley (Creative Commons)

How to Win Friends and Influence People

July 30th, 2010 :: Monika Jansen

The lessons and advice imparted in Dale Carnegie’s ground breaking 1936 book How to Win Friends and Influence People are as useful today as they were then.  Think about the reasons we small business owners spend time and money on marketing, especially social media: We want to connect with current and prospective clients and convince them that they need our product or service.  To do that, we need to know exactly how to connect with them, and this is where the book comes in.

Dale CarnegieThe only way on earth to influence the other fellow is to talk about what he wants and show him how to get it.  Dale Carnegie

Dale’s book is centered on one simple fact.  People want to feel important.  It’s just human nature.  We like praise and hate criticism.  Praise makes us feel important, while criticism makes us feel like losers.  And, as Dale also points out in the book, we spend around 95% of our time thinking about ourselves.  So, when you want to make someone do something, stop and think how you can make that person want to do it. 

If there is any one secret of success, it lays in the ability to get the other person’s point of view and see things from his angle as well as from your own.  Henry Ford

My absolute favorite piece of sales advice, which speaks to Mr. Ford’s quote above, is that you need to show people how you can solve their problem, and they will buy from you.   We all strive to do this, but do we always do it?  Probably not. 

The book is broken down into six sections, but I’m only covering the second and third, because I think are the most important.  All of the following advice is common sense and highly applicable to most any situation (the final section, in fact, is titled Seven Rules for Making Your Home Life Happier).

Here are Dale Carnegie’s Six Ways To Make People Like You:

  1. Show a genuine interest in people. 
  2. Smile!  You’ll feel better and so will the person you are talking to. 
  3. Remember names.  “A person’s name is to him (or her) the sweetest and most important sound in any language.”
  4. Be a good listener.  Encourage others to talk about themselves.  After all, we are our own favorite subjects!
  5. Discuss with the person whatever his or her interests are.  Teddy Roosevelt use to study his guests’ favorite subjects before they’d visit him at his Oyster Bay estate on Long Island so he could talk knowledgeably about it with them.
  6. Always make the other person feel important.  Remember the Golden Rule, “Do unto others as you would have them do unto you”?   Make others feel important, appreciated, valued and be sincere when you do!   

And here are 12 Ways To Win People To Your Way Of Thinking:

  1. The only way to win an argument is to avoid one.  Unless it’s a matter of life or death, let the person think they’re right, even if they’re not. 
  2. Show respect for someone else’s opinion.  Don’t tell that person they’re wrong for having that opinion, even if you think it’s the stupidest thing you’ve ever heard.
  3. If you’re wrong, admit it immediately.
  4. Begin your persuasive argument in a friendly, not hostile or defensive, way.
  5. Get the other person saying “yes” rather than “no” by emphasizing the things on which you agree.  If you can, emphasize that you and this other person want exactly the same thing and that your only difference is method, not purpose.
  6. Let the other person do most of the talking.  (See #4 in the above section!)  Don’t pretend you have all the answers.  Let the person describe their business and problems to you, because they know these things better than you do.
  7. Let the other person think that the idea is his or hers.  Ask for his or her advice or help in solving a matter.  Then you can gently steer that person in the direction you want them to go.
  8. Play the devil’s advocate, and try to see things from the other person’s point of view, not just your own.  Show that you understand that person, what they need, and what they want.
  9. Be sympathetic to the other person’s ideas and desires.  If you want to stop an argument, create goodwill, and make the other person listen attentively, say “I don’t blame you for feeling the way you do.  If I were you, I’d feel the same way, too.”  
  10. Appeal to noble motives, such as honesty, fairness, and honor.  Think about celebrities asking the paparazzi not to take photos of their young children.  “Photos of me are fine, but please respect my baby’s privacy—there are too many creeps out there.”
  11. Dramatize your ideas.  The best Super Bowl ads do this.  You might not like beer, let alone Bud Light, but after watching one of their funny commercials, you’ll certainly remember it.
  12. Throw down a challenge.  Everyone wants to show off the fact that they’re better than someone else.

Review: Conquer the Chaos

July 27th, 2010 :: Thursday Bram

If there is one thing that any small business owner is familiar with, it’s chaos. No matter how organized you are when you start a new business, you wind up as a victim of entropy pretty quickly. There just aren’t enough hours in the day to handle every task that needs to get done and those that don’t quickly pile up into a mess, whether that mess is actual or simply emotional. Good small business owners find ways of handling the chaos, prioritizing what needs to be done and essentially riding the wave. The same chaos shuffles out the business owners that just can’t hack it.

Clate Mask and Scott Martineau co-founded Infusionsoft, a company that sells email marketing software. Their business started out with just the two of them, struggling to support their families and handle the chaos inherent in a small business. Since then, Infusionsoft has boomed and Mask and Martineau have codified their approach to cutting through the chaos in a new book: Conquer the Chaos: How to Grow a Successful Small Business without Going Crazy.

Handling the Chaos

One of the points Mask and Martineau work hard to drive home is that while chaos may be a natural part of entrepreneurship, you don’t have to put up with it. Chaos can quickly consume a small business owner: between the drive to get everything done so that you can actually pay your bills and support your family at home and the stress of being ultimately responsible for everything that does (and doesn’t) get done, stress seems to be a constant companion. The feeling that we should be hard at work every moment of every day isn’t far behind, either.

These stressful situations are almost the exact opposite of why many entrepreneurs go into business. We want the ability to control our own lives, reduce our stress and accomplish something with our businesses. When chaos invades, though, it feels like none of those things is possible. The fact of the matter, though, is that it isn’t impossible to get control of the chaos. There are many ways to do so, but simply getting things under control is the most important part.

One Approach to Chaos

Within Conquer the Chaos, there are two key strategies: automation and list building. List building may be a marketing strategy — and it isn’t particularly surprising that two guys who built a company based on email marketing think list building is important — but it does have an impact on the overall structure of your business. If you have a list, after all, you handle marketing and making sales in a very different way than if you’re out beating the pavement and looking for new clients every day. The approach is one that Mask and Martineau have found very successful in creating a stable business with enough income to let them focus on handling chaos through other ways. The other key to their strategy is automation — getting as much of the business running without your attention as possible.

Image — Wiley Books

Adding Long-Term Projects to Day-to-Day Management

July 8th, 2010 :: Thursday Bram

When you run a business, it’s necessary to pay close attention to the day-to-day details. Any other approach can quickly lead to to be without a business at all. But by keeping your eye on the ball, it’s harder to manage long-term projects. Something like planning a major marketing campaign or the purchase of a new location can be time intensive and tough to manage — especially if you’re only in the planning stage and you won’t start acting on the project until something happens, like an increase in revenues. But it is possible when you have practical strategies to handle the matter.

Make a Map

As you being planning your long-term project, it’s important to map out the steps that will get you all the way through the project. It’s also important, as you go along, to mark off what you’ve finished: One of the difficulties with most long-term projects is not just making sure that you know what needs to happen next, but also being aware of what’s already been completed. Especially if there’s significant time passing between different steps of your plan, keeping good notes on what you’ve already done can make the difference between moving forward and redoing work that is already complete.

The mechanics of managing such a plan and tracking your progress can be made simpler by using software, particularly when using an option that offers the ability to go back and look at tasks you’ve already completed. If you find yourself able to delegate some portion of the project, it’s also important to be able to show what has been completed and what is yet to be down.

Maintain Motivation

Beyond simply managing your long-term project, it’s not uncommon for motivation to be a problem. Especially with a project that may not pay off for months, convincing yourself to do a little every day or week — recommended by many managers as the easiest way to get big projects done — can be an uphill battle. It’s so easy to fall in the habit of thinking that you have all the time in the world to complete a project and push back even little steps.

Whenever possible, it’s important to build in motivation and milestones in a long-term project, especially if you want to add some components to your daily responsibilities. The motivation can depend on your approaches and your business. It can be as simple as creating a regular reminder of the value of completing your business or it can be as complex as creating a disincentive for not completing your work. By creating some sort of penalty, such as paying into an office kitty on those weeks when you don’t complete your work load, you may be able to focus on the tasks that build up to a long-term project, even when knowledge of the benefits aren’t enough to keep you moving. It’s simply a matter of considering what motivates you as an individual as well as a business owner.

Image by Flickr user Joe Lanman

Adding KaChing to Your Business

July 1st, 2010 :: Thursday Bram

If there’s anything Joel Comm knows, it’s how to make money from the internet. He’s been active online for more than 20 years, written pioneering guides, such as Twitter Power, and made a bundle from AdSense. His latest book, KaChing: How to Run an Online Business that Pays and Pays, breaks down his experiences with making money online — and how they can be replicated.

A Broad Overview

Building an online business is a broad topic and, by necessity, KaChing is a broad overview. In the book, Comm covers a variety of strategies ranging from advertising in general (and AdSense in specific) to membership sites and coaching services. The book provides you with the big picture, offering an easy way to go through a variety of options if you’re still looking for a strategy that will fit your needs or you’re looking for options that dovetails with your existing business approaches.

That does mean that, if you’re experienced in how to make money online, KaChing is probably not the right book for you — a better fit would likely be something that explores one of these strategies in depth. But for someone newer to these approaches, Comm is an excellent guide. Furthermore, he points to more in-depth resources online, such as an ebook he offers for free on the topic of how to make full use of the various options AdSense offers a website owner.

KaChing is a fast read. I went through my review copy in a couple of afternoons. If you aren’t interested in sitting down and reading the book straight through, though, it’s broken down into specific sections that will allow you to focus on the information that will really help you consider online business options.

Bringing in Marketing

Most online business strategies come down to one crucial point: marketing. If you don’t build a close connection with your audience online (and continue to maintain that connection over time), it is virtually impossible to create a successful business. Comm full recognizes that fact and explains the strategies he discusses within a the context of how you can reach out to an audience and market yourself. He devotes a full chapter to the topic of how to use your uniqueness to set yourself apart and ensure that you will have a profitable online business.

Comm also discusses content in depth — most successful online businesses produce content in some way, whether it’s simply a company blog that drives traffic to items for sale on the company’s website, or content is for sale through the business in the form of an infoproduct. In order to succeed online, there’s no question that being able to produce your own content is crucial. Comm understands the situation and describes how a business owner can create content without being a writer as well as strategies to turn content into, as he puts it, ‘KaChing!’

KaChing is available from Wiley Books and is priced at $24.95.

Image from KaChing

A Real Path to Profits, Passion and Purpose

June 29th, 2010 :: Thursday Bram

Tony Hsieh, the CEO of Zappos, created a corporate culture a world away from most of the companies you could look at. But Zappos was not the first entrepreneurial effort Hsieh created, by a long shot. Instead, it was the result of an entrepreneurial career that he has chronicled in Delivering Happiness: A Path to Profits, Passion, and Purpose. There were some failures along the way — a worm farm when Hsieh was young resulted in not much more but a box of dirt — but in, whole, Hsieh seems to have figured out the mechanics of running a business early on.

Beyond the Mechanics

In Delivering Happiness, it’s not hard to see that Hsieh’s grasp of business made Zappos (and whatever may yet be in store for the young CEO) possible. Hsieh, along with co-founder Sanjay Madan, created LinkExchange and solid it to Microsoft for $265 million. Much of Hsieh’s portion of the proceeds of the LinkExchange wound up invested in Zappos: the book chronicles not only Hsieh’s personal history before Zappos but also shows how close Zappos came to not succeeding.

The company was founded in 1999 by Nick Swinmurn, who pitched Hsieh and the investment fund he had created with other members of LinkExchange’s team after the sale. But pretty soon, Hsieh was adding to that investment from his personal savings, selling off property to raise money for the company and generally throwing his own financial future behind the success of Zappos. He also joined the company as CEO, adding the benefit of his business savvy. It wasn’t until 2003 that the company was able to get outside funding. By the way, Zappos did $60 million in business that year. Suffice it to say that the company relied heavily on Hsieh’s involvement to reach that point.

Hsieh has applied lessons learned in the other businesses he’s founded and worked with at Zappos: the company’s culture is a priority, landing it time and again on lists of the best workplaces in America. In Delivering Happiness, Hsieh explores how he and his team developed that culture and how they continue to maintain it (even after selling Zappos to Amazon in a deal valued at about $1.2 billion).

A Worthwhile Read

While Delivering Happiness is a good read for any small business owner, it isn’t the typical business book you might expect. The feel of the book is ‘here, this is how we did it.’ There’s no guarantee that if you follow the same approaches Hsieh used that you’ll get the same results. But Hsieh is able to show what his employees’ responses were to specific changes made in Zappos’ approach, pulling in emails written at the time as well as including passages written by different members of the company.

All of this adds up to a book that gives a clear picture of why Hsieh has succeeded and plenty of ideas on how you can mimic that success. If nothing else, it will shift your view on what corporate culture has to mean.

Image — Delivering Happiness

Adding Information Products to Your Ecommerce Line Up

June 22nd, 2010 :: Thursday Bram

When we think about ecommerce, more often than not, we think about selling physical products — stuff that may be sold online, but has to be boxed up and shipped in the real world. But products that you have to handle offline aren’t the only options for ecommerce, especially if you already have an established presence online. Information products can be a good alternative.

The Benefits of Information Products in Ecommerce

The obvious benefit for dealing in information products online is that you eliminate the need to ship your products to your clients. They pay their money and can immediately download a copy of your product. There’s no inventory to manage — just a digital file that you make available through your ecommerce website.

But there are other benefits, as well. Information products can complement physical products, letting impatient buyers get a head-start on giving you money, even if they’re not prepared to wait for a shipment of a physical product. They can also help you become the expert in your niche, leading buyers to you even if all they need is answers to questions they have with a product they’ve already purchased.

Information products can cover a wide range of niches: an software seller could offer an online training course on using QuickBooks effectively, while a vacuum shop could offer an ebook on how to remove stubborn stains. The real question in creating an information product is if your customers have a need for specific types of information, to the point that they’ll pay money to have that need addressed quickly.

Start With What You’re Already Offering

Odds are good that you’ve already got some options for creating ebooks, audio courses and other information products. If you offer any kind of consulting or technical support for the products you sell, those areas could be ripe for creating some sort of training or resource. Similarly, if you’ve had to create a FAQ page or you routinely get the same questions over and over again, those questions may be expanded into an information product. More than a few companies have been able to take materials originally created for internal use (like a consultant’s guide to training new buyers) and, with a little adaptation, put it on the market.

If you’re already taking steps to market your business, you may not have to do much to separately promote any information products you decide to sell. That is, of course, provided that your information products are targeted towards the same audience that buys your physical products. If you decide to look for other markets — such as selling templates or internal tools you’ve created for running your business, your marketing efforts may have to grow to reach out to potential buyers who aren’t necessarily interested in the products you’re already selling online.

In general, focusing on what you’re already offering and augmenting it is the best way to move into creating and selling digital products. It’s not a perfect fit for every ecommerce website, but you may be surprised how easy it is to add information products to your line up.

Image by Flickr user Edans

Startup Fever with Six Million New Startups in the US in 2009

June 22nd, 2010 :: Steven Fisher

Six million. Wow. I heard this on a Marketplace podcast (you should subscribe to it if you don’t) that talked about this report out today from the Kauffman Foundation. It it they stated that start-ups hit a 14-year high in the middle of last year.

That is a big number and they got their core data from self-employment stats the Census Bureau and the Labor Department publishes, and sure enough, 2009 was a stellar year. It revealed that more than half-a-million people started their own businesses each month. And that is up nearly 5 percent from the previous year.

This is one of those numbers that confirms two things – people start businesses in recessions and that the United States is a startup nation. Granted, this number was up due to higher unemployment but it shows us that when we are faced with a new challenging situation we won’t sit still. In fact, many new entrepreneurs I have talked to looked at their layoff with a severance package as the final kick in the pants they needed to start their business and achieve a life long dream.

One of the big trends in this report is that many of these people are part of the emerging Homepreneur trend which Emergent Research covered in a recent report. Even though they might be small, these small business are the engine of job growth in the United States.

Here are some highlights from the findings:

  • Groups ramping up startups include African Americans and folks 55-64.
  • Advantages include: cheap talent, cheap rent, reduced competition.
  • Failure rate stable as in other years: 50% in the first 5 years.
  • Small business credit cards cost more than before – a 14% increase vs. the consumer increase of 2.5%
  • Small business credit cards not protected by new consumer protection laws passed by Congress

I am excited to see more startups that have launched with no equity out the door, or by early revenue from solid deal flow that helps them grow organically. Since they have built their business in a tight credit market not getting capital has forced them to work with what they have instilling a discipline that will serve them well.

Thinking About Becoming an Entrepreneur or Taking Your Business to the Next Level?

We have two great resources you should check out – the Small Business Success Index and “The Rise of the Homepreneur“.

The Rise of the Homepreneur” which discusses the findings of the report “Homepreneurs: A Vital Economic Force” which is a new report published by Emergent Research, a small research and consulting shop in Lafayette, Calif. “We’re seeing more and more home-based businesses that are real businesses,” says Steve King, who coauthored the new report with Carolyn Ockels. To prepare the report, they analyzed U.S. Census data and Small Business Administration research, along with data from our very own Small Business Success Index, a survey of 1,500 companies sponsored by Network Solutions and the University of Maryland’s Robert H. Smith School of Business.

The Small Business Success Index™ (SBSI) is in its third wave of the report, sponsored by Network Solutions® and the Center for Excellence in Service at the University of Maryland’s Smith School of Business. To download a copy of the Small Business Success Index and also find out how your business scores on the six key dimensions of small business success, visit www.growsmartbusiness.com.

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Women in Business: Growing an International Non-Profit from Scratch

May 26th, 2010 :: Monika Jansen

We don’t talk much about non-profits in this space, though they are businesses, too, and growing them is just as difficult as growing a for-profit business. In fact, I would argue that starting and running a non-profit is even more difficult due to the money factor.  You need seed money to get going, but because non-profits are generally un-sustainable, year after year, you must rely on individual donors and grants to ensure your mission can continue.  On the plus side, working in the non-profit world can be really rewarding.  Everyone is committed to the cause, and your work is making the world a better place, whether on the micro level, macro level, or somewhere in between.    

Jillian Poole

Jillian Poole

I have been lucky to watch an amazing non-profit evolve for the past 8 years.  In 2002, I began working as the assistant for Jillian Poole, founder and CEO of The Fund for Arts and Culture.  I got to do a lot of really interesting work: travel and budget planning, grant writing, correspondence writing, and report editing; I have been their Editor since 2003.  Their mission statement sums up pretty neatly what they do:

The Fund provides assistance to selected major arts and cultural institutions to assist in their adjustment to a free market economy. Our senior consulting experts serve pro bono and share their expertise in administration, management, governance, planning, public relations, marketing and fundraising with visual and performing arts organizations.  We believe that promoting healthy, vibrant and welcoming institutions of art and culture strengthens civil society.

Jillian founded The Fund following her retirement from the John F. Kennedy Center for the Performing Arts in Washington, DC, where she had been head of the development (fundraising) department.  “The year was 1991, just after the fall of the Berlin Wall,” said Jillian.  “And like many things in life it came about through pure serendipity.  There was a need, and I knew people who could help fill that need.”

They began their work in Russia and quickly expanded to other former Soviet bloc countries.  Jillian continually recruited senior museum and arts administrators to serve as consultants.  As she said, “A rolodex is an expandable thing.  It grows in unexpected ways, often with unforeseen encounters and certainly with almost every major endeavor.”  Word of their expertise and positive impact traveled quickly.  As the only organization offering hands-on, interactive seminars and workshops, the more than 100 consultants engaged by The Fund traveled to more than 20 countries.   (It is important to note that these consultants worked pro-bono, and many were eager to travel on behalf of The Fund again.  It was an enriching experience for them as well, and many have noted that they learned as much as their seminar participants.) 

The global economic collapse has forced some changes, as fundraising has been negatively impacted in a big way over the past two years.  After 20 year leading The Fund, Jillian has stepped down as CEO.  (A new CEO has not yet been named.)  I asked her if she would have done anything differently, and she replied, “I tend to look forward, not back.  There are many things that could be done, and some that must – and whether they will be remains to be seen.”  Though it seems like an evasive answer, her attitude perfectly reflects that of a leader: keep moving forward and make the changes you need to make to stay viable. 

I asked her for one piece of advice she’d give to someone interested in starting a non-profit, and she said, “Build a strong board to help you, always bearing in mind the essential 3 Ws – Work, Wisdom and Wealth.”