It’s the season of the traditional Holiday Race, particularly for women business owners. Trying to keep one step ahead of, or at least even with, family responsibilities and running a business. Not that men don’t put in their share of holiday preparations combined with work responsibilities. But, at least in my family and social circles, it is the woman, or women, who have the lion’s share of Christmas planning and executing work. Most men don’t much care whether the Christmas tree is up (In my case, up and running, since my tree tried to run but fell on its face!) or whether grandma’s dressing tastes just the way you remember it.
For me Christmas time has become a crazy mélange of keeping up the Christmas traditions, and trying to help each and every panicky client that waited until the end of the year to dissolve a corporation, or some other crucial shore that could have been taken care of in August!
This year it is even crazier, since I am now the proud grandma of twin girls. My daughter and son-in-law have moved in with us while their house is being remodeled to accommodate the twins. It is hard to spend my time chopping onions when I could be sitting in my living room watching them eat Christmas ornaments! (Not the glass kind, and no lead, thank you very much!) And, as I told you a few days ago, for the first time in my life my Christmas tree fell and I had to re-do the whole thing.
But in spite of all the nuttiness, it is a joyous time. Maybe it is a trick that I am playing on myself, but just when I feel that I cannot do one more chore, I look all around and feel such pleasure and exhilaration at being alive and able to take on all the work that this wonderful season brings. So I wish all of you a very Merry Christmas, and a magical Noche Buena. As for me, back to chopping onions with one hand while I answer my cell phone with the other.
Friday, December 21, 2007
Tuesday, December 18, 2007
Motivating Employees
I found an interesting series of articles written by Paul Lavesque, who has written a book with the title of Motivation.
In this series of articles, on Entrepreneur.com, he talks about how cynical many workers are, and he makes the point that most of us need to feel like part of something important in order to be motivated. He believes that making the owner of the business rich is not exactly the inspiration that drives most workers. And he stresses that people will work very hard for a cause, and businesses that emphasize the importance of satisfying the customer’s needs usually have very motivated employees.
I have previously written about treating people as individuals with particular needs that we can fulfill, rather than as dollar signs; and I loved that these articles speak to that aspect of business. Many businesses have tunnel vision that leads straight to the bottom line, without much regard for the customer. That is seldom a great motivator for employees.
There are countless books and seminars on how to upsell. We are told that we need to increase our sales by pushing additional products or services to the client once he appears at our door. If he comes in to buy a toaster, sell him an egg poacher. Sell him on the great American breakfast experience. Just sell him! That will be great for the business bottom line. But does the client even like poached eggs? Or is it one more appliance to clutter his kitchen?
As a sales person, would you feel very motivated when selling clients products they don’t need, and may not particularly want? Wouldn’t it be much more satisfying if you could find out how he plans to use that toaster, and then guide him to the best model for his needs? Even if it turned out to be less expensive!
How do you want the customer to see your business and your employees? Will he believe that he can come to you and your workers to have a problem solved? Or will he think twice before walking through you door ever again? When you enlist your employees in the cause of truly helping your clients, you are more likely to keep them happy, and to keep your customers happy as well.
In this series of articles, on Entrepreneur.com, he talks about how cynical many workers are, and he makes the point that most of us need to feel like part of something important in order to be motivated. He believes that making the owner of the business rich is not exactly the inspiration that drives most workers. And he stresses that people will work very hard for a cause, and businesses that emphasize the importance of satisfying the customer’s needs usually have very motivated employees.
I have previously written about treating people as individuals with particular needs that we can fulfill, rather than as dollar signs; and I loved that these articles speak to that aspect of business. Many businesses have tunnel vision that leads straight to the bottom line, without much regard for the customer. That is seldom a great motivator for employees.
There are countless books and seminars on how to upsell. We are told that we need to increase our sales by pushing additional products or services to the client once he appears at our door. If he comes in to buy a toaster, sell him an egg poacher. Sell him on the great American breakfast experience. Just sell him! That will be great for the business bottom line. But does the client even like poached eggs? Or is it one more appliance to clutter his kitchen?
As a sales person, would you feel very motivated when selling clients products they don’t need, and may not particularly want? Wouldn’t it be much more satisfying if you could find out how he plans to use that toaster, and then guide him to the best model for his needs? Even if it turned out to be less expensive!
How do you want the customer to see your business and your employees? Will he believe that he can come to you and your workers to have a problem solved? Or will he think twice before walking through you door ever again? When you enlist your employees in the cause of truly helping your clients, you are more likely to keep them happy, and to keep your customers happy as well.
Saturday, December 15, 2007
Of People and Things
Every year I look forward to putting up the Christmas tree. I open up boxes and boxes of ornaments, and I am always surprised to see some that I had forgotten about, a few make me smile, and others make me a little teary eyed. Every year I add to my collection, to me it is like adding to the joy of life. By now you can guess that I am rather sentimental about these ornaments. I always think about Christmas past, and people that I love, including those who are no longer with us.
Last weekend I spent two days decorating the tree. I had bought special ornaments to commemorate my twin granddaughters’ first Christmas. We had the traditional teasing, as my son-in-law chuckles at my extravagant tree. You see, he is a minimalist kind of guy with a mother-in-law who believes that there is no such thing as too many ornaments!
Well, Wednesday evening I came down the stairs and I had the shock of my life. I saw my beautiful tree on the floor! I am amazed that I did not hear the crash; but there it was, broken ornaments all over the carpet, and the carefully placed tinsel now tangled up with the light strings. Just at that moment my daughter and son-in-law walked through the door. They were mortified to think that one of their dogs might have knocked the tree down. We all knew that that was not the case, and that it was much more likely that I did not do a good job of securing the tree to its stand. But they were worried, and I was upset at the loss of my priced ornaments.
After a few minutes I came to my senses. I felt terrible that my sadness over the ornaments had made them feel bad. I tried to reassure them that as much as I like my “stuff”, that is all it is, stuff. The last thing that I want, especially at this time of the year, is to make my family feel uncomfortable or unwelcome in my home. The ornaments are things, beautiful and priced, but still only things. They make me think of people I love, but they do not substitute them. I reminded myself that things, beautiful as they may be, never are as important as people.
This is a key lesson. How often do we catch ourselves valuing objects more than people? Do we see our clients as dollar signs rather than individuals with needs? Do we treat our employees as if we owned their soul, rather than as the valuable colleagues that make our lives better? Fairness and considerate should be our most important principle. As business owners, as well as human beings, we must not forget that things can be replaced; people, not so easily.
And the good news is that I did not lose as many ornaments as I first thought, and that my most beloved ones, including the barrister ornament that I got the year I became a lawyer, survived the ordeal!
Last weekend I spent two days decorating the tree. I had bought special ornaments to commemorate my twin granddaughters’ first Christmas. We had the traditional teasing, as my son-in-law chuckles at my extravagant tree. You see, he is a minimalist kind of guy with a mother-in-law who believes that there is no such thing as too many ornaments!
Well, Wednesday evening I came down the stairs and I had the shock of my life. I saw my beautiful tree on the floor! I am amazed that I did not hear the crash; but there it was, broken ornaments all over the carpet, and the carefully placed tinsel now tangled up with the light strings. Just at that moment my daughter and son-in-law walked through the door. They were mortified to think that one of their dogs might have knocked the tree down. We all knew that that was not the case, and that it was much more likely that I did not do a good job of securing the tree to its stand. But they were worried, and I was upset at the loss of my priced ornaments.
After a few minutes I came to my senses. I felt terrible that my sadness over the ornaments had made them feel bad. I tried to reassure them that as much as I like my “stuff”, that is all it is, stuff. The last thing that I want, especially at this time of the year, is to make my family feel uncomfortable or unwelcome in my home. The ornaments are things, beautiful and priced, but still only things. They make me think of people I love, but they do not substitute them. I reminded myself that things, beautiful as they may be, never are as important as people.
This is a key lesson. How often do we catch ourselves valuing objects more than people? Do we see our clients as dollar signs rather than individuals with needs? Do we treat our employees as if we owned their soul, rather than as the valuable colleagues that make our lives better? Fairness and considerate should be our most important principle. As business owners, as well as human beings, we must not forget that things can be replaced; people, not so easily.
And the good news is that I did not lose as many ornaments as I first thought, and that my most beloved ones, including the barrister ornament that I got the year I became a lawyer, survived the ordeal!
Monday, December 10, 2007
Fusion Marketing: What is It?
Fusion Marketing sounds kind of esoteric, but it is nothing more than collaborating with another business in order to increase sales.
Ideally fusion marketing works best when you find another business that has the same customer base and similar target market. For example, a store that sells wheat grass juice, fruit smoothies, and other health related drinks can form a great marketing partnership with a vitamin and dietary supplement store. The two businesses have the same type of clientele, and their customers have very similar interests.
The following steps should lead you to an effective and successful plan:
Sept 1: Find a partner who has a similar client base but isn’t a direct competitor.
Step 2: Brainstorm together about the type of offer that you both want to make to your clients.
Step 3: Write a letter of agreement. This document can be simple, as long as you both agree about what you will each do, and what each will get.
Step 4: Execute. Write the offers (coupons, etc.), plan the way it will be disseminated, how you will communicate it to your own clients and to the general public.
Step 5: Combine each other’s mailing list and communicate to both groups.
Step 6: Keep the bargain. By this I mean, honor the coupons or offers that the other business has distributed, and be responsive to the other business’s clients.
Step 7: Evaluate. Follow up with your clients to see if this has been of benefit to them, as well as with your marketing partner to see if it is working well for that business.
Step 8: Continue to market to both sets of clients.
And there you are, that is fusion marketing, a simple but effective idea with an exotic name.
Ideally fusion marketing works best when you find another business that has the same customer base and similar target market. For example, a store that sells wheat grass juice, fruit smoothies, and other health related drinks can form a great marketing partnership with a vitamin and dietary supplement store. The two businesses have the same type of clientele, and their customers have very similar interests.
The following steps should lead you to an effective and successful plan:
Sept 1: Find a partner who has a similar client base but isn’t a direct competitor.
Step 2: Brainstorm together about the type of offer that you both want to make to your clients.
Step 3: Write a letter of agreement. This document can be simple, as long as you both agree about what you will each do, and what each will get.
Step 4: Execute. Write the offers (coupons, etc.), plan the way it will be disseminated, how you will communicate it to your own clients and to the general public.
Step 5: Combine each other’s mailing list and communicate to both groups.
Step 6: Keep the bargain. By this I mean, honor the coupons or offers that the other business has distributed, and be responsive to the other business’s clients.
Step 7: Evaluate. Follow up with your clients to see if this has been of benefit to them, as well as with your marketing partner to see if it is working well for that business.
Step 8: Continue to market to both sets of clients.
And there you are, that is fusion marketing, a simple but effective idea with an exotic name.
Wednesday, December 5, 2007
Tip of the Day: Don’t Waste Advertising Money
On the same vein as previous posts, it is important to understand the purpose of an ad, and that is to sell sell sell. Advertising professionals sometimes are too focused on creating clever commercials. The purpose of an ad is to create a need, to persuade, and to inform so that prospect will want your product. An ad shouldn’t be just amusing and entertaining, its sole purpose should be to get the sale, if it charms the public while selling products, so much the better; but make sure that the ad creates a need, otherwise you will be wasting your money.
Tuesday, December 4, 2007
Getting Results Not Just Reactions
Lets say that you have come up with a clever sales campaign. You try it out on your friends and relatives and they all love the story line. They think it is witty and darn right funny. They all congratulate you on your ingenuity.
You try it out on the public, and you get the same reaction. People send you emails telling you how amused they are. The whole town is using your catchy phrase. People call you to tell you how much they like the ads. You are feeling mighty proud of yourself about now. But what has it done to your business’s bottom line? If what you have gotten is reaction from the public, rather than results, then all you have accomplished is a boost to your ego, not your business.
You may argue, and you would be right, that the whole town is talking about your business when they use that memorable phrase! And your business’s name recognition has increased tremendously. Certainly that is a very enviable position to be in. Who wouldn’t want such a fantastic outcome? But the fact still remains that goodwill is good, but what you want is goodwill and money in the bank! Make sure that your witty efforts do not overshadow your product or service. Remember that you are not in the copy writing business (unless, of course, you actually are!) You are in the business of selling your product or service, and that is what you want flying out the door.
You try it out on the public, and you get the same reaction. People send you emails telling you how amused they are. The whole town is using your catchy phrase. People call you to tell you how much they like the ads. You are feeling mighty proud of yourself about now. But what has it done to your business’s bottom line? If what you have gotten is reaction from the public, rather than results, then all you have accomplished is a boost to your ego, not your business.
You may argue, and you would be right, that the whole town is talking about your business when they use that memorable phrase! And your business’s name recognition has increased tremendously. Certainly that is a very enviable position to be in. Who wouldn’t want such a fantastic outcome? But the fact still remains that goodwill is good, but what you want is goodwill and money in the bank! Make sure that your witty efforts do not overshadow your product or service. Remember that you are not in the copy writing business (unless, of course, you actually are!) You are in the business of selling your product or service, and that is what you want flying out the door.
Saturday, December 1, 2007
Should we be Fearless?
Some motivational speakers talk about being fearless. How we need to be without fear in order to succeed. We hear the rah rah of the presentation and become convinced that all we have to do is be unafraid and we will master the world.
Well, I have a great deal of respect for fear. I don’t love it, but I can absolutely understand its value. I see no great virtue in being fearless because to me it means not truly understanding danger, and if we do not understand the peril that we are facing, we cannot fight it effectively.
To me being fearless is being foolish. Would you not be afraid of a roaring lion blocking your path? Would you not be scared silly if you had to enter a burning building? Of course you would! Fear is a very valuable emotion. It is built into our very being for the simple reason that we need it in our lives. Without it we would not survive very long.
But the fact that it is such a useful feeling doesn’t mean that we always have to give in to it. Fear is valuable because it makes us stop and think. Sometimes there isn’t a whole lot to think about. If we see a boulder coming straight at us, it is time to get out of the way. But when we let irrational fear take over our lives, then we waste energy and opportunity.
Sometimes fear is so strong that we feel totally helpless. We become paralyzed by it, and we allow it to control our thinking and our actions. When we feel this way, the best thing to do is to put one foot in front of the other and start moving. I am not writing figuratively here, I really mean this. There have been times in my life that I have been paralyzed by fear. It is almost as if I am under a spell of dread and I cannot move. The way I have broken that spell is by the simple act of taking a step forward. Just one little step; that is all it takes to shatter that nasty hex. Once I am released I can evaluate the situation from all angles.
Lets think clearly about the problem, can the obstacles be overcome? How would we do that? Is it prudent? Is it a risk that is well worth taking? Or is the boulder about to crush us? Life is full of risk. Getting out of bed in the morning is already a risk. But some risks are well worth taking, while others are pure disaster. Properly managed fear, and not the lack of fear, is the key to conquering our world.
Well, I have a great deal of respect for fear. I don’t love it, but I can absolutely understand its value. I see no great virtue in being fearless because to me it means not truly understanding danger, and if we do not understand the peril that we are facing, we cannot fight it effectively.
To me being fearless is being foolish. Would you not be afraid of a roaring lion blocking your path? Would you not be scared silly if you had to enter a burning building? Of course you would! Fear is a very valuable emotion. It is built into our very being for the simple reason that we need it in our lives. Without it we would not survive very long.
But the fact that it is such a useful feeling doesn’t mean that we always have to give in to it. Fear is valuable because it makes us stop and think. Sometimes there isn’t a whole lot to think about. If we see a boulder coming straight at us, it is time to get out of the way. But when we let irrational fear take over our lives, then we waste energy and opportunity.
Sometimes fear is so strong that we feel totally helpless. We become paralyzed by it, and we allow it to control our thinking and our actions. When we feel this way, the best thing to do is to put one foot in front of the other and start moving. I am not writing figuratively here, I really mean this. There have been times in my life that I have been paralyzed by fear. It is almost as if I am under a spell of dread and I cannot move. The way I have broken that spell is by the simple act of taking a step forward. Just one little step; that is all it takes to shatter that nasty hex. Once I am released I can evaluate the situation from all angles.
Lets think clearly about the problem, can the obstacles be overcome? How would we do that? Is it prudent? Is it a risk that is well worth taking? Or is the boulder about to crush us? Life is full of risk. Getting out of bed in the morning is already a risk. But some risks are well worth taking, while others are pure disaster. Properly managed fear, and not the lack of fear, is the key to conquering our world.
Wednesday, November 28, 2007
Should you Buy an Existing Business?
When we think about going into business for ourselves usually we are thinking about starting from scratch. We may have a special product in mind, or perhaps a unique service. But sometimes an opportunity comes along where an existing business is for sale, and the chance is hard to pass up.
When you buy an established business you don’t have to spend a lot of time with start-up activities, such as getting equipment, acquiring the various licenses, etc.; there is a considerable amount of savings in time and energy. You will also have immediate cash flow because the business already has inventory, receivables, and clients. In addition, you will have goodwill and name recognition, and this will probably make it easier to obtain financing.
But one serious disadvantage is the cost of acquisition. You may have to come up with a large amount of money because the previous owner has already done the basic work. He or she has already bought the equipment, developed the business concept, acquired licenses and permits, developed a customer base, hired and trained employees. You may also get unexpected baggage. Perhaps the equipment is old, or there are ornery employees that have nowhere else to go. It is also possible that instead of goodwill, you are getting a bad reputation attached to the business, and it may be difficult to overcome. Another issue to consider, depending on the type of business, is environmental problems that can be costly to resolve.
There is much to think about, and significant matter on both sides, so weigh the pros and cons very carefully before you decide to acquire an existing business.
When you buy an established business you don’t have to spend a lot of time with start-up activities, such as getting equipment, acquiring the various licenses, etc.; there is a considerable amount of savings in time and energy. You will also have immediate cash flow because the business already has inventory, receivables, and clients. In addition, you will have goodwill and name recognition, and this will probably make it easier to obtain financing.
But one serious disadvantage is the cost of acquisition. You may have to come up with a large amount of money because the previous owner has already done the basic work. He or she has already bought the equipment, developed the business concept, acquired licenses and permits, developed a customer base, hired and trained employees. You may also get unexpected baggage. Perhaps the equipment is old, or there are ornery employees that have nowhere else to go. It is also possible that instead of goodwill, you are getting a bad reputation attached to the business, and it may be difficult to overcome. Another issue to consider, depending on the type of business, is environmental problems that can be costly to resolve.
There is much to think about, and significant matter on both sides, so weigh the pros and cons very carefully before you decide to acquire an existing business.
Friday, November 23, 2007
Tip of the Day: Gifts to Thank Your Clients
This is the time of the year to thank your clients and referral sources with a holiday gift. It can be treacherous road, since you may not know that your client suffers from diabetes or high cholesterol when you proudly deliver that yummy cake. And that bottle of wine may be wasted on someone who just gave up drinking. So what is a business owner to do? Here are a few ideas beyond calendars and pens.
Why not give a flash (or USB) drive or a staple-less stapler. These are items that your client will use every day. Other items that may be appreciated and a bit out of the ordinary are back massagers and lip balms.
My personal favorite is books, and for this you need to know a little bit about the recipient. If your client likes mystery novels, give him or her the latest Sue Grafton. Also, there are many beautiful coffee table books on the sale tables at your local book store, find one that appeals to your client. For example, I have a client who took a trip to India. She was absolutely captivated by the country, and she cannot stop tell you about her great experience. I have found a lovely book about India that I plan to give her, and I know that this gift will not add inches to her waist!
If you do not know your clients’ tastes, but you like the idea of giving books, you can give those that reflect your industry, or the region where your business is located.
Why not give a flash (or USB) drive or a staple-less stapler. These are items that your client will use every day. Other items that may be appreciated and a bit out of the ordinary are back massagers and lip balms.
My personal favorite is books, and for this you need to know a little bit about the recipient. If your client likes mystery novels, give him or her the latest Sue Grafton. Also, there are many beautiful coffee table books on the sale tables at your local book store, find one that appeals to your client. For example, I have a client who took a trip to India. She was absolutely captivated by the country, and she cannot stop tell you about her great experience. I have found a lovely book about India that I plan to give her, and I know that this gift will not add inches to her waist!
If you do not know your clients’ tastes, but you like the idea of giving books, you can give those that reflect your industry, or the region where your business is located.
Wednesday, November 21, 2007
Giving Thanks
Tomorrow is Thanksgiving Day in the United States. A great thing about this holiday is that it compels us to take a good look at our lives and see the things that we should be thankful for.
Perhaps you were watching television this weekend, as I was, and maybe you saw interviews with celebrities, where they were asked what they were grateful for. Maybe you heard the standard answer, “I am grateful for my family”. Perhaps you were groaning as you heard them, and you wished that they would come up with something a little more creative.
But I find that, in my case, though I wish I could be more creative, indeed it is true; more than anything, I am grateful for my family, and for very selfish reasons. It is my family who has made me who I am. In my early years my parents and siblings taught me how to live a good life. They instilled a sense of fairness. They also taught me that life is infinitely varied and interesting, and it is all there for us to enjoy. As Rosalind Russell said in the movie Auntie Mame, life is a banquet (though alas she followed up with “and most poor suckers are starving to death”)
This view of life is such a gift to me because it has allowed me to try new things just because they are intriguing and might be enjoyable. I learn about something interesting and I want to take a crack at it, and why not? There is no Don’t Dream police that is going to tell me I cannot do it (And if there is such a police, I will ignore it!) If it doesn’t work out, well then, I have learned new things in my attempt, and that is wonderful because it will lead me down other exciting roads.
My parents are now gone, and so is my beloved brother, who passed away this summer, but my two sisters, my dear husband, my daughter, my son, and my son-in-law, and also my granddaughters and siblings-in-law, continue to give me their love and support. The whole lot is always there for me, cheering me on, telling me to go for it. Without them I would not be who I am, and I would not feel so free to try new things.
I know there have been people like that in your life; those who have given you support and freedom to attempt new things. Probably they have been members of your family, though maybe not. Perhaps it was a neighbor, or your first boss. In any case, be thankful for them; and if you have the opportunity, thank them in person. You would not be a business owners, or an aspiring business owners, if someone had not taken the time to teach you about exploring the world, taking risks, being willing to share with others. This is the nature of a business owner, and that is what a business owner does every day. Sometimes it feels like the weight of the world, but mostly it is a great gift to be enjoyed, so lets say thank you.
Have a very happy Thanksgiving Day.
Perhaps you were watching television this weekend, as I was, and maybe you saw interviews with celebrities, where they were asked what they were grateful for. Maybe you heard the standard answer, “I am grateful for my family”. Perhaps you were groaning as you heard them, and you wished that they would come up with something a little more creative.
But I find that, in my case, though I wish I could be more creative, indeed it is true; more than anything, I am grateful for my family, and for very selfish reasons. It is my family who has made me who I am. In my early years my parents and siblings taught me how to live a good life. They instilled a sense of fairness. They also taught me that life is infinitely varied and interesting, and it is all there for us to enjoy. As Rosalind Russell said in the movie Auntie Mame, life is a banquet (though alas she followed up with “and most poor suckers are starving to death”)
This view of life is such a gift to me because it has allowed me to try new things just because they are intriguing and might be enjoyable. I learn about something interesting and I want to take a crack at it, and why not? There is no Don’t Dream police that is going to tell me I cannot do it (And if there is such a police, I will ignore it!) If it doesn’t work out, well then, I have learned new things in my attempt, and that is wonderful because it will lead me down other exciting roads.
My parents are now gone, and so is my beloved brother, who passed away this summer, but my two sisters, my dear husband, my daughter, my son, and my son-in-law, and also my granddaughters and siblings-in-law, continue to give me their love and support. The whole lot is always there for me, cheering me on, telling me to go for it. Without them I would not be who I am, and I would not feel so free to try new things.
I know there have been people like that in your life; those who have given you support and freedom to attempt new things. Probably they have been members of your family, though maybe not. Perhaps it was a neighbor, or your first boss. In any case, be thankful for them; and if you have the opportunity, thank them in person. You would not be a business owners, or an aspiring business owners, if someone had not taken the time to teach you about exploring the world, taking risks, being willing to share with others. This is the nature of a business owner, and that is what a business owner does every day. Sometimes it feels like the weight of the world, but mostly it is a great gift to be enjoyed, so lets say thank you.
Have a very happy Thanksgiving Day.
Tuesday, November 20, 2007
Between Dream and Reality
We are cruising along, living perfectly ordinary lives, and suddenly an idea comes into our mind. At the beginning is seems absolutely crazy. “How can I possibly turn this idea into a profitable business?” We begin to dream about the business, selling your jewelry to Saks, writing the great American novel, or becoming a lawyer. And it is our little secret, that outrageous dream that no one but us has to know about. We take it out and dust it off for our own amusement. We think about it when we are cleaning the kitchen floor. But deep down we know that it will probably never happen. It is too scary; it may even be silly!
And do you know something? We are probably right, it will never happen. Not because it is too difficult, scary, and silly, but because as long as we don’t talk about it out loud, it is easy to avoid turning the dream into reality.
So how do we overcome that block; how do we shush that little voice that tells us it is a crazy idea? More specifically, how do you turn the dream into reality? The first step is to say it to yourself, use your most authoritative voice to tell yourself “I am going to start writing right now”. Be convincing, because you are the person that needs convincing the most. Don’t tell yourself that it is possible; tell yourself that it will happen.
Next, tell those closest to you. Here it will probably not be necessary to be quite so authoritative because they almost certainly believe in you already. Maybe they have been waiting for years to hear you say the magic words. Then, tell the world. Be matter of fact, ‘I am a writer”. No need to be defensive, or to go into a long explanation explain, just say it.
Why the talking exercises? Because once you say it out loud you commit yourself to actually doing it. It becomes real.
That is how I talked myself into becoming a lawyer. When my daughter graduated from college I decided that it was my time to go back to school. I knew that if anything happened to my husband, I had few skills that would get me a job that paid above the minimum wage.
I was taking a class in which we had to write about what I call “what do you want to be when you grow up”. At 48 years of age, it was a bit late to be thinking about this, but an assignment is an assignment, and I was going to give it my best shot. I wrote about becoming a court interpreter because I was fluent in English and Spanish, and I had always been interested in the law. I had grown up in a small town in Mexico, at a time when girls did not think about being lawyers. Girls were going to grow up to be mommies, not attorneys. And most certainly I wanted to be a mommy, but deep down I had also wished that things had been different for women of my age.
A few days latter the professor called me in for a chat. Her name is Glenda McGee, a great lady; and she told me that no, I was not too old to be a lawyer, and if I really wanted to do it, I could. At first it sounded silly, but the more I thought about it the more intrigued I became. Still, I wasn’t about to make a fool of myself by telling others what the professor had said to me.
Well, it took me a while to begin to say it to myself out loud. The sound of my voice saying “I am going to be a lawyer” was a bit shocking, but also affirming. After I convinced myself, or perhaps I just got used to hearing the words, I decided to tell my husband about what the professor had said. He looked at me, and with assurance that I did not feel he said, “of course you are not too old to become a lawyer”. And it was still silly, also scary and crazy, but someone who I respected very much had supported me, and I had to believe. After that, I just told everyone in a natural way, “I am going to law school”.
By telling others and myself I made a commitment to taking the necessary steps to reaching the goal. If I had kept it as my deep dark secret, I could always back out. But once I told everyone, I could not go back on my word.
Seven years later, I graduated from law school. That summer I took the California bar exam and passed on the first attempt. In December of 2002 I was sworn in as an attorney at the age of 55. I still have the posters that my daughter and son made for my graduation. One of them says, “Mom shows it is never too late to dream”.
The telling became the first step in turning the dream into reality. So don’t be afraid, tell yourself and then the world “ I will do it”.
Dream Big
And do you know something? We are probably right, it will never happen. Not because it is too difficult, scary, and silly, but because as long as we don’t talk about it out loud, it is easy to avoid turning the dream into reality.
So how do we overcome that block; how do we shush that little voice that tells us it is a crazy idea? More specifically, how do you turn the dream into reality? The first step is to say it to yourself, use your most authoritative voice to tell yourself “I am going to start writing right now”. Be convincing, because you are the person that needs convincing the most. Don’t tell yourself that it is possible; tell yourself that it will happen.
Next, tell those closest to you. Here it will probably not be necessary to be quite so authoritative because they almost certainly believe in you already. Maybe they have been waiting for years to hear you say the magic words. Then, tell the world. Be matter of fact, ‘I am a writer”. No need to be defensive, or to go into a long explanation explain, just say it.
Why the talking exercises? Because once you say it out loud you commit yourself to actually doing it. It becomes real.
That is how I talked myself into becoming a lawyer. When my daughter graduated from college I decided that it was my time to go back to school. I knew that if anything happened to my husband, I had few skills that would get me a job that paid above the minimum wage.
I was taking a class in which we had to write about what I call “what do you want to be when you grow up”. At 48 years of age, it was a bit late to be thinking about this, but an assignment is an assignment, and I was going to give it my best shot. I wrote about becoming a court interpreter because I was fluent in English and Spanish, and I had always been interested in the law. I had grown up in a small town in Mexico, at a time when girls did not think about being lawyers. Girls were going to grow up to be mommies, not attorneys. And most certainly I wanted to be a mommy, but deep down I had also wished that things had been different for women of my age.
A few days latter the professor called me in for a chat. Her name is Glenda McGee, a great lady; and she told me that no, I was not too old to be a lawyer, and if I really wanted to do it, I could. At first it sounded silly, but the more I thought about it the more intrigued I became. Still, I wasn’t about to make a fool of myself by telling others what the professor had said to me.
Well, it took me a while to begin to say it to myself out loud. The sound of my voice saying “I am going to be a lawyer” was a bit shocking, but also affirming. After I convinced myself, or perhaps I just got used to hearing the words, I decided to tell my husband about what the professor had said. He looked at me, and with assurance that I did not feel he said, “of course you are not too old to become a lawyer”. And it was still silly, also scary and crazy, but someone who I respected very much had supported me, and I had to believe. After that, I just told everyone in a natural way, “I am going to law school”.
By telling others and myself I made a commitment to taking the necessary steps to reaching the goal. If I had kept it as my deep dark secret, I could always back out. But once I told everyone, I could not go back on my word.
Seven years later, I graduated from law school. That summer I took the California bar exam and passed on the first attempt. In December of 2002 I was sworn in as an attorney at the age of 55. I still have the posters that my daughter and son made for my graduation. One of them says, “Mom shows it is never too late to dream”.
The telling became the first step in turning the dream into reality. So don’t be afraid, tell yourself and then the world “ I will do it”.
Dream Big
Sunday, November 18, 2007
Focus on Your Core Business
The temptation to add products or services to your core business can be great. It can come from your own expectations about what a business such as yours “should” be like; or it can come from your clients, who may be pushing you to fill their every need.
When I first started my law practice, and even today, there was great pressure to be all things to all people. The main reason is that I am one of the few attorneys in our area who is fluent in Spanish. I soon realized that as a solo practitioner I could not help everyone, no matter how meritorious the case.
I knew that I would be doing a disservice to my clients and to myself if I took on every case that comes through my door. I cannot possibly be proficient in every area of the law, so my clients would suffer by not having the best attorney for their case. By the same token, I cannot take every case and keep my sanity.
I how do you choose? You probably came into the business with a strong idea about what your main products or services would be. And this is the case because you are probably quite passionate about those products or services. It doesn’t mean that you should keep your eyes and ears closed to new opportunities. But I am sure that you will come to the same conclusion that I did. The type of case that is most enjoyable, and the one that is the most profitable, should be the focus of the business. No, I am not a genius for having come up with this nugget, but sometimes we get overwhelmed and forget to be practical.
When I first started my law practice, and even today, there was great pressure to be all things to all people. The main reason is that I am one of the few attorneys in our area who is fluent in Spanish. I soon realized that as a solo practitioner I could not help everyone, no matter how meritorious the case.
I knew that I would be doing a disservice to my clients and to myself if I took on every case that comes through my door. I cannot possibly be proficient in every area of the law, so my clients would suffer by not having the best attorney for their case. By the same token, I cannot take every case and keep my sanity.
I how do you choose? You probably came into the business with a strong idea about what your main products or services would be. And this is the case because you are probably quite passionate about those products or services. It doesn’t mean that you should keep your eyes and ears closed to new opportunities. But I am sure that you will come to the same conclusion that I did. The type of case that is most enjoyable, and the one that is the most profitable, should be the focus of the business. No, I am not a genius for having come up with this nugget, but sometimes we get overwhelmed and forget to be practical.
Friday, November 16, 2007
Tip of the Day: Don’t Sabotage Your Marketing Efforts
When it comes to marketing, do what feels comfortable to you and what fits your personality. If you are shy, don’t participate in a huge networking event; instead, stick to one on one networking such as a coffee or luncheon appointment. If the idea of public speaking makes you break out in a cold sweat, don’t offer to give a presentation to the local Rotary Club, the discomfort will show through. As an alternative, if you like to write, offer to write an article for the Club’s newsletter, or a local newspaper. Pick the method that will be most effective for you. Don’t sabotage your marketing efforts by trying to be someone you are not. Marketing should be a daily activity in your business, so make it an enjoyable one.
Thursday, November 15, 2007
Tip of the Day: Why Should Your Customer Believe You?
As a business owner you believe that you offer a terrific product, and you probably think that your potential customers will also believe that you offer a wonderful product because your mother and your compadre believe you do. But it isn’t enough to say that you have the best vanilla ice cream in the county; tell them why it is so. Explain that your vanilla ice cream is made with the freshest milk and cream, that the milk comes from California cows; and as everyone knows from the ad, they are the happiest cows in the world! Tell your customer that you use the finest vanilla beans that Madagascar has ever grown. Explain how you manufacture your ice cream, the care that you take with each ingredient and each step of the process. In other words, explain, explain, explain why your product is the best. Give your customer a reason to believe, and to buy.
Wednesday, November 14, 2007
Pricing Your Product or Service
Pricing your Product or Service
One of the hardest things to do when you are a business owner is coming up with a fair price to charge for your product or service. I can tell you that it was the hardest thing for me when I started my law practice. I had worked for a non-profit law office where we provided legal services for the indigent. The lawyers did not have to consider billable hours or thinking about how much to charge for our services. The survival of the law office was the headache of the executive director, the lawyers worried about the legal work. Our salaries were rather modest, to say the least; but the lights were always on, and there was always paper and ink for the printer.
When I decided to strike out on my own I had no idea how to charge a fee that was fair to the client and to me. Now I am the one who has to keep the lights on and the ink flowing! And even today I struggle with the question of fees when I am doing legal work that is open ended. The billable hours can add up very quickly! For this reason I always try to charge a flat fee, even if it isn’t always possible. With a fee that I quote before I start the work, the client doesn’t have a nasty surprise; though I sometimes do, if the client is calling me at all hours of the day and night!
The pricing strategy is essential for the success of your business. You need to price your product within a range called the Price Ceiling and Price Floor. The Price Ceiling, as the name suggests, is the highest price that you can charge. The Price Floor, obviously, is the lowest price that you can charge and stay in business. You want to be between these two boundaries. “Well, that sound great”, you may tell yourself, “but what do I need to consider in order to achieve that goal?”
Lets start with the price floor, since this is easier to quantify. In order to come up with your lowest price you must consider all your costs, and I mean all. You will start with the cost of the raw materials, your office overhead; which will include utilities, employees’ salaries and benefits; insurance, loans and interest, the cost to operate your company’s vehicles, shipping charges, and taxes to name a few.
Determining your pricing ceiling is not quite as simple, as you must consider factors that are not easily quantifiable. Some questions that need to be answered are: How much is a client willing to pay for this product or service? What is the quality of this product? Why are people demanding this product or service? Do they need it, or do they merely want it very badly? How much does the competition charge for a similar product? What image am I trying to project? These questions are not always easily answered. Some clients always think that the fee is too high. On the other hand, I once had someone question how efficient could I possibly be, based on the fact that my fee was considerably lower than another attorney he had consulted.
But I want to be an attorney that a small business can afford, and I am happy to give up the image of the powerful lawyer; and in the eyes of at least one person, an efficient one. In that particular case, there was no contest, I didn’t really want to work with a client who forms his opinion of the value he receives based on whether I can charge three times my usual fee. I rather work with many clients who believe they are getting value for their money. That is my niche, and it is the business decision that I am comfortable with. You will make your own choice about niche and price. The important thing to remember is that your decision must result in profit for your business; otherwise you won’t be in business very long.
One of the hardest things to do when you are a business owner is coming up with a fair price to charge for your product or service. I can tell you that it was the hardest thing for me when I started my law practice. I had worked for a non-profit law office where we provided legal services for the indigent. The lawyers did not have to consider billable hours or thinking about how much to charge for our services. The survival of the law office was the headache of the executive director, the lawyers worried about the legal work. Our salaries were rather modest, to say the least; but the lights were always on, and there was always paper and ink for the printer.
When I decided to strike out on my own I had no idea how to charge a fee that was fair to the client and to me. Now I am the one who has to keep the lights on and the ink flowing! And even today I struggle with the question of fees when I am doing legal work that is open ended. The billable hours can add up very quickly! For this reason I always try to charge a flat fee, even if it isn’t always possible. With a fee that I quote before I start the work, the client doesn’t have a nasty surprise; though I sometimes do, if the client is calling me at all hours of the day and night!
The pricing strategy is essential for the success of your business. You need to price your product within a range called the Price Ceiling and Price Floor. The Price Ceiling, as the name suggests, is the highest price that you can charge. The Price Floor, obviously, is the lowest price that you can charge and stay in business. You want to be between these two boundaries. “Well, that sound great”, you may tell yourself, “but what do I need to consider in order to achieve that goal?”
Lets start with the price floor, since this is easier to quantify. In order to come up with your lowest price you must consider all your costs, and I mean all. You will start with the cost of the raw materials, your office overhead; which will include utilities, employees’ salaries and benefits; insurance, loans and interest, the cost to operate your company’s vehicles, shipping charges, and taxes to name a few.
Determining your pricing ceiling is not quite as simple, as you must consider factors that are not easily quantifiable. Some questions that need to be answered are: How much is a client willing to pay for this product or service? What is the quality of this product? Why are people demanding this product or service? Do they need it, or do they merely want it very badly? How much does the competition charge for a similar product? What image am I trying to project? These questions are not always easily answered. Some clients always think that the fee is too high. On the other hand, I once had someone question how efficient could I possibly be, based on the fact that my fee was considerably lower than another attorney he had consulted.
But I want to be an attorney that a small business can afford, and I am happy to give up the image of the powerful lawyer; and in the eyes of at least one person, an efficient one. In that particular case, there was no contest, I didn’t really want to work with a client who forms his opinion of the value he receives based on whether I can charge three times my usual fee. I rather work with many clients who believe they are getting value for their money. That is my niche, and it is the business decision that I am comfortable with. You will make your own choice about niche and price. The important thing to remember is that your decision must result in profit for your business; otherwise you won’t be in business very long.
Tuesday, November 13, 2007
Tip of the Day: Your Referral Sources
You may be lucky enough to have a group of friends and acquaintances that regularly refer clients to you. Don’t forget that every time they send a customer to you, they put their reputation on the line. Show your appreciation, and keep the referrals coming, by staying in contact with your referral sources. Call them or email them regularly. It doesn’t have to be a long phone call or message. A “Hi, how are you” and a bit of small talk will suffice. And definitely call if you have something of interest to one of your referral sources, he or she will appreciate the information. Also, you may invite them, on a rotating basis, for lunch or coffee; or if both of you are too busy, send a gift card from a coffee house or restaurant. You don’t have to spend a great amount of time making these phone calls, two of them a week should be enough. As long as you rotate the names on your list, and you do this consistently, they will not forget.
Friday, November 9, 2007
Tip of the Day: “What Do You Do?”
When you are asked, “What do you do?” do you go into a long explanation that makes your listener’s eyes glaze over? You should develop what is commonly called the “elevator pitch”. This is an explanation of your business that you can deliver in 30 seconds or less. Why would this be useful? Well, not boring your listeners is the first reason that comes to mind; but beyond that, the short explanation will focus the attention of your audience. This way they will quickly know if they can buy from you, or if they know someone who can. Another reason for developing the elevator pitch is that you will better understand what your business is about. This may sound crazy; of course you know what your business is all about! But you would be surprised at how unfocused some business are. And lack of focus leads to lack of success.
Thursday, November 8, 2007
Legal Structure of a Business: Limited Liability Company
A Limited Liability Company (LLC) is a relatively new type of legal structure. It has only been in the last 15 to twenty years that states have enacted statutes that allow the formation of this type of entity. At present, all states allow the formation of LLCs, though the laws vary from state to state.
An LLC is comparable to a Corporation in that it gives its members liability protection. But unlike a corporation, an LLC does not impose double taxation. Members of a Limited Liability Company have the same tax treatment as a partnership.
Other advantages of an LLC are that it is flexible to operate, and it doesn’t have as many levels of administration as a corporation. For example, an LLC does not have a board of directors; it is managed by all the members, or by one manager chosen by the members. It is important to note, though, that the formation of both entities is very much alike, and it is done with authority of the Secretary of State.
In an LLC members can be foreign nationals without losing the tax treatment similar to a partnership; this is not the case with an “S” corporation.
Some of the drawbacks are: In some states, such as California, professionals cannot form an LLC. In California in particular, anyone who must be licensed under the Business and Professions Code cannot form an LLC. This includes; not only Doctors, Lawyers, Dentists; but also contractors, real estate agents, and many other types of businesses. Another disadvantage is that it is not as easy for a member of an LLC to sell his or her interest in the company because ownership in an LLC is not as universally recognized as ownership of shares of stock in a corporation. Still another disadvantage is that in many states there must be at least two members to an LLC, though this is not the case in all states.
These are only some of the advantages and disadvantages of an LLC. If you are interested in forming one, consult your attorney, as the statutes and requirements vary greatly from state to state. Still, it is well worth taking a close look into this type of entity because of its flexibility and relative ease of management.
An LLC is comparable to a Corporation in that it gives its members liability protection. But unlike a corporation, an LLC does not impose double taxation. Members of a Limited Liability Company have the same tax treatment as a partnership.
Other advantages of an LLC are that it is flexible to operate, and it doesn’t have as many levels of administration as a corporation. For example, an LLC does not have a board of directors; it is managed by all the members, or by one manager chosen by the members. It is important to note, though, that the formation of both entities is very much alike, and it is done with authority of the Secretary of State.
In an LLC members can be foreign nationals without losing the tax treatment similar to a partnership; this is not the case with an “S” corporation.
Some of the drawbacks are: In some states, such as California, professionals cannot form an LLC. In California in particular, anyone who must be licensed under the Business and Professions Code cannot form an LLC. This includes; not only Doctors, Lawyers, Dentists; but also contractors, real estate agents, and many other types of businesses. Another disadvantage is that it is not as easy for a member of an LLC to sell his or her interest in the company because ownership in an LLC is not as universally recognized as ownership of shares of stock in a corporation. Still another disadvantage is that in many states there must be at least two members to an LLC, though this is not the case in all states.
These are only some of the advantages and disadvantages of an LLC. If you are interested in forming one, consult your attorney, as the statutes and requirements vary greatly from state to state. Still, it is well worth taking a close look into this type of entity because of its flexibility and relative ease of management.
Tuesday, November 6, 2007
Legal Structure of a Business: Corporation
A corporation, unlike a sole ownership or partnership, is a legal entity that is separate and distinct from the individual owners/shareholders. This type of entity is complex, and can only be formed with the authority of the Secretary of State or the Government of your state.
Once a corporation is formed, the shareholders must apply for a Tax Identification number, as well as licenses and permits, in the name of the corporation.
There are several advantages to forming a corporation. The first one is that because the corporation and the owners are distinct, the owners are not personally liable for the debts of the corporation. It is also a more stable business structure because the corporation doesn’t end when the owners die. It is also easier to transfer ownership by selling shares of the business.
Additionally, it is not as difficult to obtain financing because lenders feel more confident in the stability of the corporation. There is depth of skills and talents, since the business can draw upon the experiences of the shareholders and directors of the corporation.
But the disadvantages can sometimes scare off business owners who might consider this type of entity. First, there is quite a bit of government control in the formation and management of the company. There are many requirements, such as holding regular meetings, and drafting minutes of those meetings. The tax filing requirements are considerably more complex than those for sole proprietorships and partnerships. There is double taxation, as the corporation pays taxes, and the shareholders pay taxes as well. Also, in many states there is a minimum tax that a corporation must pay. Additionally it is more expensive to form and manage this type of entity because of the many requirements.
In order to avoid double taxation many corporations elect to be a subchapter “S” corporation. In this case the corporation is taxed as a partnership, so the corporation itself does not pay taxes. But a subchapter “S” corporation cannot have more than 35 shareholders, nor can any of the shareholders be foreign nationals. Additionally, if the corporation offers benefits to its employees, such as health insurance and 401K programs, the shareholders often cannot participate, depending on their percentage of ownership in the company.
These are some of the advantages and disadvantages of forming a Corporation. If you are interested in this type of entity, make sure that you consult your lawyer so that she can fully explain the requirements in your state as well as at the federal level.
Once a corporation is formed, the shareholders must apply for a Tax Identification number, as well as licenses and permits, in the name of the corporation.
There are several advantages to forming a corporation. The first one is that because the corporation and the owners are distinct, the owners are not personally liable for the debts of the corporation. It is also a more stable business structure because the corporation doesn’t end when the owners die. It is also easier to transfer ownership by selling shares of the business.
Additionally, it is not as difficult to obtain financing because lenders feel more confident in the stability of the corporation. There is depth of skills and talents, since the business can draw upon the experiences of the shareholders and directors of the corporation.
But the disadvantages can sometimes scare off business owners who might consider this type of entity. First, there is quite a bit of government control in the formation and management of the company. There are many requirements, such as holding regular meetings, and drafting minutes of those meetings. The tax filing requirements are considerably more complex than those for sole proprietorships and partnerships. There is double taxation, as the corporation pays taxes, and the shareholders pay taxes as well. Also, in many states there is a minimum tax that a corporation must pay. Additionally it is more expensive to form and manage this type of entity because of the many requirements.
In order to avoid double taxation many corporations elect to be a subchapter “S” corporation. In this case the corporation is taxed as a partnership, so the corporation itself does not pay taxes. But a subchapter “S” corporation cannot have more than 35 shareholders, nor can any of the shareholders be foreign nationals. Additionally, if the corporation offers benefits to its employees, such as health insurance and 401K programs, the shareholders often cannot participate, depending on their percentage of ownership in the company.
These are some of the advantages and disadvantages of forming a Corporation. If you are interested in this type of entity, make sure that you consult your lawyer so that she can fully explain the requirements in your state as well as at the federal level.
Monday, November 5, 2007
Legal Structure of a Business: Partnership
A partnership is a business that is owned and operated by more than one person. Often two or more friends find out that they have similar passion for a particular product or service, and they decide to form an alliance. As with a sole proprietorship, it is relatively easy to form a partnership. There are no major requirements to form this type of entity.
But the fact that there are no legal requirements doesn’t mean that it is advisable to be informal and nonchalant about this type of business ownership. It is prudent and very wise to have a written partnership agreement because it can prevent, or at least minimize, headaches down the road.
A partnership agreement will spell out who will contribute what, and how much of it; how the business will be managed, under what circumstances someone else can join the partnership, as well as how the partnership will be dissolved if and when the time comes.
Some advantages of a partnership are: it is easy to start, given that there are fewer legal formalities than starting a corporation or LLC; there is flexibility, though not as much as with a sole proprietorship; there is depth of experience and perspective, as there are several owner with various talents, skills, and points of view. There is also more ability to obtain capital, since there is more than one person to contribute money to the enterprise. Additionally, there are tax benefits; as the profits will be go directly to the partners and become the partners personal tax liability.
But, as with almost everything in life, there are disadvantages to this type of business ownership. The main one is that in a general partnership, each partner has unlimited liability for the debts of the business. Many believe that each partner is responsible according to the percentage of ownership, but this is not the case. Each partner is wholly responsible for everything. Another drawback is that there isn’t much stability because the illness or death of a partner can severely affect the business. It is also difficult for a partner to sell his or her share of the business because the other partners may not have the capital to buy him out at the time that he wants to sell, and they may not be willing to have that share of the business go to someone they do not know nor feel comfortable with, so the options are limited. And, if a partner dies, the other partners may resist giving the heirs of the deceased partner much say or control, with ensuing tension.
If you are considering this type of business ownership, it is imperative that you consult an attorney for advice, and to prepare a detailed written partnership agreement.
But the fact that there are no legal requirements doesn’t mean that it is advisable to be informal and nonchalant about this type of business ownership. It is prudent and very wise to have a written partnership agreement because it can prevent, or at least minimize, headaches down the road.
A partnership agreement will spell out who will contribute what, and how much of it; how the business will be managed, under what circumstances someone else can join the partnership, as well as how the partnership will be dissolved if and when the time comes.
Some advantages of a partnership are: it is easy to start, given that there are fewer legal formalities than starting a corporation or LLC; there is flexibility, though not as much as with a sole proprietorship; there is depth of experience and perspective, as there are several owner with various talents, skills, and points of view. There is also more ability to obtain capital, since there is more than one person to contribute money to the enterprise. Additionally, there are tax benefits; as the profits will be go directly to the partners and become the partners personal tax liability.
But, as with almost everything in life, there are disadvantages to this type of business ownership. The main one is that in a general partnership, each partner has unlimited liability for the debts of the business. Many believe that each partner is responsible according to the percentage of ownership, but this is not the case. Each partner is wholly responsible for everything. Another drawback is that there isn’t much stability because the illness or death of a partner can severely affect the business. It is also difficult for a partner to sell his or her share of the business because the other partners may not have the capital to buy him out at the time that he wants to sell, and they may not be willing to have that share of the business go to someone they do not know nor feel comfortable with, so the options are limited. And, if a partner dies, the other partners may resist giving the heirs of the deceased partner much say or control, with ensuing tension.
If you are considering this type of business ownership, it is imperative that you consult an attorney for advice, and to prepare a detailed written partnership agreement.
Saturday, November 3, 2007
Legal Structure of a Business: Sole Proprietor
A sole proprietorship is a business owned and operated by one person. The majority of businesses are sole proprietorships; the reason being that it is very easy to establish. You do not need to file documents with the Secretary of State, you don’t have to agree with someone else, you do not need anyone’s permission; all you need to do is open the doors, and you are in business. Of course, it is a little more elaborate than that, as there are several licenses and permits that you will need, depending on your type of business. Baring those requirements, a sole proprietorship is indeed the easiest form of business ownership.
But the ease of business formation is not the only advantage. As a sole proprietor the owner makes all the decisions for the business. He or she has complete control over the management and decision-making of the enterprise. There is also a great deal of flexibility because the owner can respond quickly to any problems, and can make changes without having to consult anyone else. In addition, there are no special taxes to be paid, as there are with corporations, LLCs, and other types of entities. The profits become the owner’s personal income, and are part of his or her tax liability.
But there are disadvantages. One of the most important ones is that the owner has total liability for the debts of the business, as well as any lawsuits filed against the business. This means that the owner can lose not just all his investment, but also all his assets, including his or her personal residence. Another disadvantage is that there are limited business deductions for health insurance and workers’ compensation insurance to name a few.
Other drawbacks include difficulty in obtaining capital for the business, risk to the business if the owner becomes ill or dies, and lack of depth in experience and perspective since only one person has the responsibility and control.
If you are considering a sole proprietorship for your business, talk to other business owners who run their companies as sole proprietors, and weigh carefully the advantages and disadvantages. Additionally, make sure that you consult your attorney for more information.
But the ease of business formation is not the only advantage. As a sole proprietor the owner makes all the decisions for the business. He or she has complete control over the management and decision-making of the enterprise. There is also a great deal of flexibility because the owner can respond quickly to any problems, and can make changes without having to consult anyone else. In addition, there are no special taxes to be paid, as there are with corporations, LLCs, and other types of entities. The profits become the owner’s personal income, and are part of his or her tax liability.
But there are disadvantages. One of the most important ones is that the owner has total liability for the debts of the business, as well as any lawsuits filed against the business. This means that the owner can lose not just all his investment, but also all his assets, including his or her personal residence. Another disadvantage is that there are limited business deductions for health insurance and workers’ compensation insurance to name a few.
Other drawbacks include difficulty in obtaining capital for the business, risk to the business if the owner becomes ill or dies, and lack of depth in experience and perspective since only one person has the responsibility and control.
If you are considering a sole proprietorship for your business, talk to other business owners who run their companies as sole proprietors, and weigh carefully the advantages and disadvantages. Additionally, make sure that you consult your attorney for more information.
Friday, November 2, 2007
Tip of the Day: Is There a Market for your Product?
Often a motivation for starting a particular business is the excitement of offering a product or a service that we are interested in. But is there a market for this product or service?
If you are in the planning stages of your business, find answers to the following questions:
Do people really want what you are offering?
Who are your potential customers?
Will they want the product or service at the price that you are offering it?
Do your potential customers live or work near your business?
Can you create a demand for your product or service?
Who are your competitors?
How will you differentiate yourself and your business from them?
Will your business be able to compete effectively in price and in product?
What marketing methods are your competitors using?
If you are in the planning stages of your business, find answers to the following questions:
Do people really want what you are offering?
Who are your potential customers?
Will they want the product or service at the price that you are offering it?
Do your potential customers live or work near your business?
Can you create a demand for your product or service?
Who are your competitors?
How will you differentiate yourself and your business from them?
Will your business be able to compete effectively in price and in product?
What marketing methods are your competitors using?
Wednesday, October 31, 2007
Tip of the Day: Wacky Marketing Ideas
I found a list of wacky marketing ideas online, and I thought I would share a few with you on this Halloween day. Some were too wacky for me, like the one about nominating yourself for an award, but I will share a couple of my favorites.
1. Give a customer of the month award.
I thought this idea was great, not only do you thank a good customer; it makes you think about who your ideal customer is, which is something that I have talked about in previous posts. You can place a photograph of your customer receiving his or her award in your place of business. You can also take out an ad, or write an article about your award, and have it published in your local newspaper.
2. Hold a wacky contest.
One example is an ugly tie contest; or a mad hatter contest, where the public is invited to design and wear outlandish hats. Another idea is a pet costume contest. People love their pets and love an opportunity to show them off.
3.This one could be called wacky contest on steroids.
It is a very elaborate wacky idea that I saw on the nightly news last week. They had a story about a furniture store owner who announced in April, at the beginning of the baseball season, that if the Boston Red Sox won the World Series everyone that bought furniture from his store for a period of time, I didn’t catch how long the period was open, would get their furniture free of charge. They said in the news that about thirty thousand people took him up on the offer. He explained that he wasn’t loosing money because he had taken out insurance to protect himself from the potential lose, that became very real in late October. Think about this one for a minute, not only did he keep the marketing campaign going for six months; he got a huge bang at the end by having his story told on a national newscast!
I hope that these ideas get your creative juices flowing.
1. Give a customer of the month award.
I thought this idea was great, not only do you thank a good customer; it makes you think about who your ideal customer is, which is something that I have talked about in previous posts. You can place a photograph of your customer receiving his or her award in your place of business. You can also take out an ad, or write an article about your award, and have it published in your local newspaper.
2. Hold a wacky contest.
One example is an ugly tie contest; or a mad hatter contest, where the public is invited to design and wear outlandish hats. Another idea is a pet costume contest. People love their pets and love an opportunity to show them off.
3.This one could be called wacky contest on steroids.
It is a very elaborate wacky idea that I saw on the nightly news last week. They had a story about a furniture store owner who announced in April, at the beginning of the baseball season, that if the Boston Red Sox won the World Series everyone that bought furniture from his store for a period of time, I didn’t catch how long the period was open, would get their furniture free of charge. They said in the news that about thirty thousand people took him up on the offer. He explained that he wasn’t loosing money because he had taken out insurance to protect himself from the potential lose, that became very real in late October. Think about this one for a minute, not only did he keep the marketing campaign going for six months; he got a huge bang at the end by having his story told on a national newscast!
I hope that these ideas get your creative juices flowing.
Tuesday, October 30, 2007
Palace of Justice, Paris France
I am that small black figure that you see on the steps of the Palace of Justice in Paris. It was a cold November day in 2004. My daughter shot this photograph during a wonderful trip that we took together to London and Paris. To me the massive size of the building symbolizes the power of the law.
Is the Customer Always Right?
Most marketing experts will tell you that acquiring a new client is very costly, so it is important to hang on to the ones you have. And the mantra of “the customer is always right” is well engrained in the business owner’s mind. It seems that the first commandment of a company is that no matter what the client wants, we must go along in order to keep him or her happy. I disagree. There are some clients that are not worth the trouble. Sometimes a client will want you to do something unethical or illegal. Other clients want to micromanage every minute of your day. Still others are just plain toxic.
I personally have fired a couple of my clients; very politely, I have to say, but nevertheless, they are gone. The reason why I have done this is that these clients wanted something from me that I was unwilling to give.
As a business owner you have many worries and responsibilities, but this is one of the perks of the job. Yes, obtaining a new client is costly, but keeping a difficult one can be more so. Getting new customers isn’t nearly as difficult as hanging on to troublesome ones. Don’t be afraid; being free of a toxic customer will liberate you, and you will find that you have more time in your day, time to find new clients.
I personally have fired a couple of my clients; very politely, I have to say, but nevertheless, they are gone. The reason why I have done this is that these clients wanted something from me that I was unwilling to give.
As a business owner you have many worries and responsibilities, but this is one of the perks of the job. Yes, obtaining a new client is costly, but keeping a difficult one can be more so. Getting new customers isn’t nearly as difficult as hanging on to troublesome ones. Don’t be afraid; being free of a toxic customer will liberate you, and you will find that you have more time in your day, time to find new clients.
Monday, October 29, 2007
Tip of the Day: Your Target Market
As I mentioned before, an important part of your business plan is a marketing plan; and one key factor in the marketing plan is identifying your target market. Of course, most of us would say “my target market is everybody in God’s green earth!” But you can well imagine that it is very difficult to develop an effective marketing campaign targeted to every person on earth.
There are two ways of defining your target market (well, I am sure there are more than two!). One way is; if you already have a product, ask yourself who would be most interested in your product? If it is a service you offer, who would be most interested in your service? Another way is to ask yourself who would be your ideal client. Who is the client that you would most like to work with and why? This method works best if you are still trying to find a product to sell or a service to offer in your business.
Now, go find that ideal client!
There are two ways of defining your target market (well, I am sure there are more than two!). One way is; if you already have a product, ask yourself who would be most interested in your product? If it is a service you offer, who would be most interested in your service? Another way is to ask yourself who would be your ideal client. Who is the client that you would most like to work with and why? This method works best if you are still trying to find a product to sell or a service to offer in your business.
Now, go find that ideal client!
Saturday, October 27, 2007
Tip of the Day: Business Plan, Not Just a Good Idea
Having a business plan is not just a good idea; it is a most important and helpful tool. By focusing your attention on the parts of your business that need tweaking, you can have more control and your business can be more profitable.
Though many business owners dread the idea of preparing one, and you may be one of them, you need to know that you are not alone. There is plenty of help available. Contact your local office of the Small Business Administration for information about their classes, or go to their web site at www.sba.gov. There are also several companies that sell software to help you with this task. You will find many different programs and templates on the market. A quick search on line will lead you to products that fit your needs.
Though many business owners dread the idea of preparing one, and you may be one of them, you need to know that you are not alone. There is plenty of help available. Contact your local office of the Small Business Administration for information about their classes, or go to their web site at www.sba.gov. There are also several companies that sell software to help you with this task. You will find many different programs and templates on the market. A quick search on line will lead you to products that fit your needs.
Thursday, October 25, 2007
The Importance of a Busisness Plan
It is understandable that many business owners and prospective business owners hesitate, or outright refuse, to prepare a business plan. The business plan is a detailed map to your business. But the emphasis is on “detail”, and that is why so many people shy away from this tedious task.
But the business plan is a most important tool, and it is often the key to your success. It isn’t that the plan by itself will make you successful. But because it forces you to look at every aspect of your business, it really makes you focus on all the components that make a business flourish.
If you are in the planning stages of your business, the plan will help you to consider all the costs involved in the start-up phase of your business. This way there will be few surprises, and you are more likely to stay within your budget.
Because the business plan will include a market analysis, you will be more likely to treat your business as a money making enterprise, rather than a hobby, or something that “sound like it will be a lot of fun”. There is nothing wrong with having fun; in fact, I recommend it. But if you are not making any money, or if you are running into many unforeseen problems, believe me, the fun will go out of your life faster than you can say, well, “fun”.
When it comes to preparing your business plan, you are not alone. There is plenty of help available. Your local office of the Small Business Administration has classes that can help with this task, or your can go to the website www.sba.gov. There are also several businesses that sell business plan templates, and these can be very helpful.
For established business the task is no less important. Perhaps you have been running a successful business for several years; well, the plan will help you to analyze it in detail to see if you want take it in a different direction. Also, you will see how money is being spent, and you can make adjustments and cut costs. You can look take a close look at your market and see if it is feasible to seek a different type of client, or offer new products.
Don’t shy away from preparing a business plan. It is a very empowering tool. Use it wisely.
But the business plan is a most important tool, and it is often the key to your success. It isn’t that the plan by itself will make you successful. But because it forces you to look at every aspect of your business, it really makes you focus on all the components that make a business flourish.
If you are in the planning stages of your business, the plan will help you to consider all the costs involved in the start-up phase of your business. This way there will be few surprises, and you are more likely to stay within your budget.
Because the business plan will include a market analysis, you will be more likely to treat your business as a money making enterprise, rather than a hobby, or something that “sound like it will be a lot of fun”. There is nothing wrong with having fun; in fact, I recommend it. But if you are not making any money, or if you are running into many unforeseen problems, believe me, the fun will go out of your life faster than you can say, well, “fun”.
When it comes to preparing your business plan, you are not alone. There is plenty of help available. Your local office of the Small Business Administration has classes that can help with this task, or your can go to the website www.sba.gov. There are also several businesses that sell business plan templates, and these can be very helpful.
For established business the task is no less important. Perhaps you have been running a successful business for several years; well, the plan will help you to analyze it in detail to see if you want take it in a different direction. Also, you will see how money is being spent, and you can make adjustments and cut costs. You can look take a close look at your market and see if it is feasible to seek a different type of client, or offer new products.
Don’t shy away from preparing a business plan. It is a very empowering tool. Use it wisely.
Tuesday, October 23, 2007
Tip of the Day: Your Professional Team
It is very important to bring together a good professional team to help you run your business. You will need a good accountant as well as an attorney that has experience in business law. Among many other things, your accountant will help you to organize your records so that you do not run afoul of the IRS. Your attorney can advise you about legal issues such as: the best entity to form for your business, help you with trademark issues, review contracts, just to name a few. Running a business can be a bumpy ride, your professional help to clear some of the rocks from the road.
Have a smooth ride!
Have a smooth ride!
Monday, October 22, 2007
Tip of the Day: Check Zoning Laws
If you are planning a home-based business, make sure that you check the zoning requirements in the city where you live. There may be restrictions put on your activities if you are going to be attracting traffic to your home. But if your business will consist of contact with clients through phone or email, most likely you will not violate zoning regulations, nor will you be annoying your neighbors.
Saturday, October 20, 2007
Tip of the Day: Marketing
Remember. No market, no business! Start working on a marketing plan that is appropriate for your product or industry. Be creative with your marketing, but do not ignore the traditional marketing methods for your type of business.
Friday, October 19, 2007
Tip of the Day. Are you Ready to Start?
Are You Ready to Start Your Own Business?
These are 10 important questions that you should ask yourself in order to determine if you have the personal characteristics of a business owners.
1. Do you think of yourself as a leader?
2. Do others think of you as a leader?
3. Do you like to make your own decisions?
4. Do others seek your help in making decisions for themselves?
5. Are you confident?
6. Are you hardworking?
7. Do you like to learn new things?
8. Are you flexible?
9. Can you stay focused in the face of adversity?
10. Do you work well with others?
These are 10 important questions that you should ask yourself in order to determine if you have the personal characteristics of a business owners.
1. Do you think of yourself as a leader?
2. Do others think of you as a leader?
3. Do you like to make your own decisions?
4. Do others seek your help in making decisions for themselves?
5. Are you confident?
6. Are you hardworking?
7. Do you like to learn new things?
8. Are you flexible?
9. Can you stay focused in the face of adversity?
10. Do you work well with others?
Thursday, October 18, 2007
Starting a Home-Based Business
Operating a business from home is a simple and efficient way of starting a new enterprise. It is much easier than it has ever been before, and it no longer has the stigma that it once did. Now it is an accepted manner of conducting a commercial activity.
In the past home businesses were viewed more as a hobby than a real money making activity. But with the arrival of the Internet; and the ease of communicating; whether through a cell phone, a landline dedicated solely to your business, through e-mail, blackberry, or all of the above, home-based businesses have truly come into their own.
At the start of business activities, it is very important to conserve as much of your business capital as possible. A home-based business eliminates the need to rent office space, pay insurance and utilities, and hire employees.
But in order to succeed, a home-based business must be organized with the same care and focus as any other business. There is no room for sloppy planning and unprofessional behavior, even if you are wearing your pink polka-dot pajamas while answering the phone. This is your business and your future; treat it with the respect it deserves.
The first thing that you must do in order to start your home-based business is to inquire about zoning requirements in your community. Each city has its own set of rules about operating a business at home. Much will depend on the type of business in which you are involved. It could be a problem, for example, if you expect lots of deliveries. Your neighbors may not be too happy about truck traffic in your area. On the other hand, if your business involves phone contact with clients, the neighbors are not likely to be disturbed, know, or care whether you are working from home. But rest assured that the city where you live will care whether you are running a business from home. They will want you to obtain a business license, and renew it annually. So make sure that the first thing you do is contact the department that issues business licenses, you don’t want any unpleasant surprises once you have started your activities.
Another requirement in most counties is obtaining a fictitious name. If you are going to be doing business under a name other than your own personal name, it must be registered as a fictitious business name. In most counties, once the business name is registered, it should be published in a local newspaper. This gives notice the public about the person or persons behind the business name.
The next step will be to open a business bank account. Most banks will require that you present the fictitious business name and the city business license in order to open said bank account.
Once you have taken care of those requirements, it is time to think about your work area. How you organize your work environment is very important because it will make a huge difference in your productivity and comfort. If you have to be looking under toys for a work order, it will cut down on your effectiveness. Besides the desk, file cabinet, good chair, and telephone set-up, make sure that you have the best computer, and particularly best printer. I once had a printer (a brand that shall remain nameless!), which made my life a living hell. It would not print more than two pages without a paper jam. It was as slow as L.A. traffic during rush hour, and every few pages it would show the dreaded exclamation point! I hesitated to replace it because it had cost quite a bit of money, and I kept stocking up on ink cartridges, which made me keep postponing the inevitable decision. I kept telling myself how it was bad for the environment to replace something that was relatively new. I kept thinking about all the money I had invested in ink.
Finally I could take it no more. I bought in a new printer, and donated the old one to Goodwill. I do feel a bit guilty about passing on my problem printer to an unsuspecting person, but I console myself with the thought that perhaps that person’s printing needs are not as demanding as mine, and I do have to say that the scanner was awesome! In any case, make your life as easy as possible, have the best equipment that you can afford. Skimp on other things if you must, but your working tools are key.
A business plan is the next item on your planning list. Actually it should be the first. But human nature being what it is, most business owners postpone this step until they are forced by a bank or other institution to prepare one. I have dealt with many start-up operations and I know that 99% of my clients do not prepare one as a first step, and sometimes never. And yet, it is such a useful and important tool that it is hard to understand why most people resist this step.
A business plan forces the business owner to look at all the details of starting and operating a business. It is the reality check of the start-up world. It gets us to look at how much it is going to cost. It makes us focus on our competition and what they offer. This in turn will force us to differentiate ourselves from our competition. We begin to ask questions such as “Why do I want to go into this line of business?” “ How am I different from those many others who offer the same thing I do?” “What niche can I fill?”
The marketing plan, which may be a part of the business plan, or it may be a separate document, is another indispensable step in the planning stage. No market, no business, it is that simple! Make sure that you thoroughly understand your market, and how to spread the word about your product or service. It seems that certain types of businesses utilize particular marketing strategies. While it is desirable to be creative, make sure that you do not ignore the traditional marketing avenues for your particular industry.
The last two points that I will touch on are extremely important. The fact that they are last on the list does not mean that they are not essential, believe me, they are. Make sure that you keep exact account of every transaction. Keep meticulous records of every expenditure, and every penny that you receive from your clients. The IRS is particularly wary of home-based businesses, and it keeps a close eye on them. In case of an audit, you will be grateful that you kept every scrap of paper. The last point is: consult your attorney. Make sure that you are complying with laws and regulations related to your industry, and to business in general.
OK, sorry, that was not the last point. The last point that I will make is to get in touch with your Small Business Administration office . The SBA offers free or low cost education and consulting services. They are a great resource for any small business, whether start-up or ongoing. Take advantage of their knowledge and expertise, you will be glad you did.
In the past home businesses were viewed more as a hobby than a real money making activity. But with the arrival of the Internet; and the ease of communicating; whether through a cell phone, a landline dedicated solely to your business, through e-mail, blackberry, or all of the above, home-based businesses have truly come into their own.
At the start of business activities, it is very important to conserve as much of your business capital as possible. A home-based business eliminates the need to rent office space, pay insurance and utilities, and hire employees.
But in order to succeed, a home-based business must be organized with the same care and focus as any other business. There is no room for sloppy planning and unprofessional behavior, even if you are wearing your pink polka-dot pajamas while answering the phone. This is your business and your future; treat it with the respect it deserves.
The first thing that you must do in order to start your home-based business is to inquire about zoning requirements in your community. Each city has its own set of rules about operating a business at home. Much will depend on the type of business in which you are involved. It could be a problem, for example, if you expect lots of deliveries. Your neighbors may not be too happy about truck traffic in your area. On the other hand, if your business involves phone contact with clients, the neighbors are not likely to be disturbed, know, or care whether you are working from home. But rest assured that the city where you live will care whether you are running a business from home. They will want you to obtain a business license, and renew it annually. So make sure that the first thing you do is contact the department that issues business licenses, you don’t want any unpleasant surprises once you have started your activities.
Another requirement in most counties is obtaining a fictitious name. If you are going to be doing business under a name other than your own personal name, it must be registered as a fictitious business name. In most counties, once the business name is registered, it should be published in a local newspaper. This gives notice the public about the person or persons behind the business name.
The next step will be to open a business bank account. Most banks will require that you present the fictitious business name and the city business license in order to open said bank account.
Once you have taken care of those requirements, it is time to think about your work area. How you organize your work environment is very important because it will make a huge difference in your productivity and comfort. If you have to be looking under toys for a work order, it will cut down on your effectiveness. Besides the desk, file cabinet, good chair, and telephone set-up, make sure that you have the best computer, and particularly best printer. I once had a printer (a brand that shall remain nameless!), which made my life a living hell. It would not print more than two pages without a paper jam. It was as slow as L.A. traffic during rush hour, and every few pages it would show the dreaded exclamation point! I hesitated to replace it because it had cost quite a bit of money, and I kept stocking up on ink cartridges, which made me keep postponing the inevitable decision. I kept telling myself how it was bad for the environment to replace something that was relatively new. I kept thinking about all the money I had invested in ink.
Finally I could take it no more. I bought in a new printer, and donated the old one to Goodwill. I do feel a bit guilty about passing on my problem printer to an unsuspecting person, but I console myself with the thought that perhaps that person’s printing needs are not as demanding as mine, and I do have to say that the scanner was awesome! In any case, make your life as easy as possible, have the best equipment that you can afford. Skimp on other things if you must, but your working tools are key.
A business plan is the next item on your planning list. Actually it should be the first. But human nature being what it is, most business owners postpone this step until they are forced by a bank or other institution to prepare one. I have dealt with many start-up operations and I know that 99% of my clients do not prepare one as a first step, and sometimes never. And yet, it is such a useful and important tool that it is hard to understand why most people resist this step.
A business plan forces the business owner to look at all the details of starting and operating a business. It is the reality check of the start-up world. It gets us to look at how much it is going to cost. It makes us focus on our competition and what they offer. This in turn will force us to differentiate ourselves from our competition. We begin to ask questions such as “Why do I want to go into this line of business?” “ How am I different from those many others who offer the same thing I do?” “What niche can I fill?”
The marketing plan, which may be a part of the business plan, or it may be a separate document, is another indispensable step in the planning stage. No market, no business, it is that simple! Make sure that you thoroughly understand your market, and how to spread the word about your product or service. It seems that certain types of businesses utilize particular marketing strategies. While it is desirable to be creative, make sure that you do not ignore the traditional marketing avenues for your particular industry.
The last two points that I will touch on are extremely important. The fact that they are last on the list does not mean that they are not essential, believe me, they are. Make sure that you keep exact account of every transaction. Keep meticulous records of every expenditure, and every penny that you receive from your clients. The IRS is particularly wary of home-based businesses, and it keeps a close eye on them. In case of an audit, you will be grateful that you kept every scrap of paper. The last point is: consult your attorney. Make sure that you are complying with laws and regulations related to your industry, and to business in general.
OK, sorry, that was not the last point. The last point that I will make is to get in touch with your Small Business Administration office . The SBA offers free or low cost education and consulting services. They are a great resource for any small business, whether start-up or ongoing. Take advantage of their knowledge and expertise, you will be glad you did.
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