Archive for March, 2010

Mr. AllBiz weighs in on the health care reform bill

Written By Steve Strauss, March 26, 2010

Q: Steve: What do you think of this health care reform bill? I think it stinks.

Sam

A: I agree it stinks, but do you know what stinks worse? What we have right now.

Of course watching this bill wind its way towards law has been an unappealing sight, and yes, it was full of pork and kickbacks that verged on obscene. But then again, our system was designed for gridlock, give and take, checks and balances, and all that. But no one said it was pretty.

So this is the bill we have. Is it good for small business? On the whole, I say yes. As I say, it beats the alternative, the status quo, and that is what this come downs to – a crappy bill with some good stuff, or nothing.

For the small business owner, one of the best things about this bill is that it will insure an additional 30 million people. While it is good and proper for a country like ours to do so, it is also good business, and here is why: While you may think that the uninsured are the needy, the young, and the impoverished, the fact is, many of those uninsured work for small business.

Why are they uninsured? You know why: It costs the average small business owner too much to insure them.

Consider these sobering statistics:

  • Only 49% of businesses with 3 to 9 employees (the vast majority of all small businesses) offered any type of health insurance to their employees in 2008, down from 58% less than a decade ago
  •  29% of employees at businesses with 25 employees or less were uninsured altogether in 2007, and the number is certainly higher today

So for starters, that small businesses may be able to get more affordable health care insurance is no small thing, indeed, it is a big thing. The main reason that health insurance is so expensive for small business is that there is a very narrow pool of people being insured. Bigger companies with more employees are better able to spread the risk around so premiums are lower, and they also have more buying power due to their size.

To counter this, starting in 2014, small businesses and the self-employed will be able to shop for plans offered through new state-based purchasing pools called exchanges. By pooling small businesses together, these purchasing cooperatives are expected to offer rates that should be lower because 1) of increased group purchasing power, and 2) bigger pools.

What about these mandates to buy insurance?

For the most part these will have little effect on small business. Businesses with fewer than 50 employees will be exempt from the mandate to buy employees insurance, though it is expected than many companies will nevertheless try to offer it for two reasons:

  • The exchanges should create a more affordable option than available now, and
  • The plethora of new tax breaks and credits written into the law as incentives

Another expected benefit of the bill for business is that employees will likely be more willing to change jobs and join smaller firms because, either, there will be coverage at the new firm via the cooperatives, or the employee him or herself will be able to get affordable coverage through the exchanges. The so-called “job lock” – where employees fear leaving a job so as to not lose their insurance – should hopefully be a thing of the past.

Will the bill keep costs down? Of course it is debatable, but what is not debatable is that the status quo had become untenable. Something had to give. Hopefully this bill will deliver the changes small business owners so desperately need.

And yet . . . they say that if you are squeamish, it is best not to watch sausage or legislation being made. Me thinks that this process has given sausage making a bad name.

Today’s Tip: What do buyers look for when looking to purchase a business and what should entrepreneurs be doing if they want to eventually sell their enterprise? If you want to know, I strongly suggest that you pick up a copy of a great new book called Built to Sell, by John Warrilow.

Covering every important aspect of the process, from attracting multiple bidders to getting the most for your business, this book easily explains what you must know and do if you want to create a business you can sell. Steve says check it out!

 

Steve Strauss is one of the world’s leading business experts, a popular speaker on the business lecture circuit, and is sure to leave any audience thrilled. A columnist for USA TODAY, lawyer, and author, his latest book is The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business. You can sign up today for his free newsletter, “Small Business Success Secrets!” at his website – www.mrallbiz.com

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Prepare to Prosper in 2010

Written By Lynette DeNike, March 2, 2010

Small businesses endured financial declines during 2009 while stock market investors, who chose wisely earlier in the year, profited handsomely. Don’t allow market happy-talkers to disillusion you into believing the economy has recovered and you’re behind the curve. Instead, celebrate that you’ve survived the last two years of severe economic downturns.

During the last quarter of 2009, the home foreclosure plague moved from go-go real estate boom areas to these bastions of conservative economic values: McAllen, Texas; Burlington, Vermont; Lincoln, Nebraska; Gulfport-Biloxi, Mississippi; and Sioux Falls, South Dakota. Simultaneously, millions of square feet of empty office and retail space sit bleakly through the nation’s winter as unemployment continues to rise. Consumers spend less, business customers cutback orders, and major financial institutions hoard cash.  

Remember: Your business is about your customers/clients, income, and profits.
Seems simple enough, doesn’t it? However, it’s amazing how frequently we entrepreneurs lose site of basics – momentarily or, regrettably, over time.

Someone told me about a philanthropic recycling effort that produced far greater than projected income until the founders decided they only wanted electric or natural gas powered trucks to haul their material to recycling facilities, in a geographic region where there’s a shortage of environmentally attuned anything. Heady with success, they decided their business was so valuable to the trucking company that they could coerce them into buying new vehicles. Instead, they lost the deeply discounted rates of the most reputable transport firm in the area. Now they’re scrambling to regain revenues they were producing for local nonprofits.

During most of my life I’ve described myself as an idealistic realist. Sometimes the idealist part runs amok over the realist. When this happens in business, the financial consequences can be devastating. You must seek balance, while remaining true to your ethics.

On the flip side, I know a self-taught computer service provider, who continually makes nasty remarks about his customers – people with lives not connected to technology – who call to ask for help because they don’t understand computers or related services. When he takes their calls, his disdain is evident in his voice. While his rates are competitive and his service is local in a community that prefers to buy local rather than national, his business has declined drastically during a period when it should have been flourishing because he’s failed to embrace his customers’ intrinsic value. Any question, when the asker doesn’t know the answer, is not “stupid” for the person seeking helpful information.

Who is your customer?

  • Your definition of your customers can change after you form your company. You may believe your clientele will be consumers, when you start, and discover you can produce far greater revenues when you sell primarily to businesses.
  • Does a significant portion of your income result from one market niche? Can you expand and specialize in that sector to drive higher income and profits?
  • Evaluate who your customer is, and who your customer can be, as you plan your business for the year ahead.

How can you maximize profits?

  • You’ve probably pared down inventory, moved ultra-slow sellers to special order status, and developed ways to communicate with your customers.
  • If you’re a service provider, you’ve developed mailings, spoken at all the local service clubs to spread your reputation, and sought project partnerships. 
  • To reach new customers/clients in most markets, traditional advertising does not produce results it once delivered. If you’re not an Internet junkie, you’ve got to learn enough about social networking to rev-up your business. You must provide a dynamic website that truly reflects the strengths of your brand. Figure out how Twitter, a Facebook ‘fan’ page, a blog, and maybe even YouTube can work for your enterprise. You could decide to hire a part-time ultra savvy tech employee to carry out your daily desires online. Remember: Their work will be as effective as the direction you provide. This might be a perfect student job for the right candidate. Be sure to stay on top of what’s Tweeted and posted to be sure messages are consistent with your business’s image and goals.

What are your potential credit sources?

  • Despite major financial institutions’ virtual moratorium on lending to small businesses, you need to establish access to credit before you require cash.
  • Set up meetings with the small business manager for the local and regional banks and credit unions in your area. Find an institution you feel comfortable with, one that demonstrates real enthusiasm for your business, and can provide services you need.

Applying caring customer relations and creative marketing approaches, along with wise cash management, businesses can thrive in spite of the recession. Plan for your prosperous year.

AllBusiness.com provides resources to help small and growing businesses start, manage, finance and expand their business. The site contains Forms & Agreements, Business Guides, Business Directories, thousands of Articles, Expert Advice, and Business Blogs. Material copyrighted by AllBusiness.com.

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Marketing 2.0 – The Extreme Makeover Edition

Written By Eric Piela, March 1, 2010

One of my favorite SNL characters is Stuart Smalley, portrayed by Senator Al Franken. He used to look in the mirror and say, “I’m good enough, I’m smart enough, and doggone it, people like me!”  A humorous yet inspirational daily affirmation that reminds us that we are good just the way we are. In the same manner, I confess that I thought marketing was, indeed, beautiful just the way it was—despite its disparate processes and imperfections.

But the world went and changed. Communication technologies evolved and altered how we consume media. The next thing I knew, the marketing practices I fell in love with back in college had grown unsightly and questionably obsolete. But have no fear, marketers! Our old friend just needs a little nip-tuck, and she’ll be generating leads and building your brand just like the good ol’ days.

Here are five makeover trends meant to upgrade your marketing strategy.

1. Interruption to Engagement

“Psst. Hey you!  Stop what you are doing. Look over here, and listen to what we have to say!”  If our marketing efforts could talk, this is what they would be saying.

Our tactics and messages are typically about interrupting our audience in hope of gaining mind share. However, technology allows us to imbed our messages into our consumers’ lives without nearly as much disruption: emails read on smart phones, online pre-roll advertisements before watching your favorite sitcom on Hulu, and rich media banner ads that practically bring your website to your consumer without yanking them away from their current web page.  Be where your target audience consumes media. Make it seamless and easy for them to participate with your brand.

2. Awareness to Participation

Did someone say participate?  Previous marketing intellect prescribed a healthy dose of “attention grabbing,” taken with a full glass of “awareness building.” While both are still imperative, the latest studies show we need to take our marketing beyond simple awareness. Consumers don’t want to be talked to; they want to engage in a conversation.

Social media is about having a personal voice and sharing it with the world (or connections, friends and followers, depending on the social tool of choice).  Successful companies have found ways to transform customers into vocal consumer advocates via Facebook, Twitter, Linked-In, YouTube and community blogs. Craft your message, provide a platform for discussion, and engage in a dialogue with your audience—they are dying to be heard.

3.    Marketer-Centric to Customer-Centric

Bad news. We’re marketers and we have two things going against us: time and subjectivity. First, most of us are strapped and burning the candle at both ends—so we send communications out to consumers when we find the time, or when it’s scheduled on the promotion calendar.

Secondly, we forget to be objective. We force-feed our customers the value prop we’ve defined for our product or service. The reality is, customers don’t care about how smothered your inbox is, and they don’t care about your functionality spec sheet. Customers are looking for relevant information when it’s convenient for them, not you.

Marketing automation technology allows for triggered direct mail, email, and mobile responses which deliver that instant gratification your customers demand. Optimization features in these tools will soon allow us to automatically test and improve results of marketing campaigns for each individual—including collection of time and behavior-based data that will forecast when your customers are most likely to view your marketing communications.

4.    Segments to Individuals

Did someone say individual? (I’m getting good at this transition thing).  A number of years back, we thought we got smart. We started communicating to our consumer base differently by segmenting them into groups using demographics, firmographics, and purchase history.

We just can’t seem to catch a break.  Today, by tracking web-based behavior (website activity, email click-throughs, web form submissions, and social media interaction), we harness the power to completely customize creative and copy for each communication, ensuring the right message is used to resonate with your customer.

Personalized direct mail, email, banner ads, mobile messages are all feasible or on the horizon.  It’s not just cool (and a little freaky I’ll admit), it will soon be an imperative in order to break through the “one size fits all” clutter.

5.    Business Gets Personal

Business used to be personal.  I’m talking small-town bakery personal.  Then, mass communication exploded.   Service had to scale, and the goal was to reach as many people as possible with a single message.

However, marketing is in a throwback trend.  Corporation executives are having interpersonal two-way conversations with their consumers while the world observes. Studies show people trust other people more than any other marketing medium.

Subsequently, organizations are starting to share stories of people impacted by their brand. People listen, people respond with their own story, more people listen and respond.  Soon everything becomes marketing. Organic, consumer-driven discussion trumps the carefully crafted corporate message.

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