Small Business Resolutions

Have you made your business resolutions for 2012? This is a great time to reevaluate what went well last year, what didn’t, and what is worth your time going forward. Sure, year-long plans inevitably get trumped here and there, but you can do a few things in the first quarter to set yourself up for success over the long-term. For the sake of a brainstorm, I’ve listed a few below.

1. Figure out what makes you money. It’s really a simple concept, but if understood, it will guide your decisions. Your business certainly brings in cash, but what does it profit from? What enables you to cover your costs and cushion your bank account? Identifying the products and services that you not only sell the most of, but provide you with the largest margin of profit to work with. Check out this USA Today Money article for more tips.
2. Figure out who makes you money. This is a tip I gained from a mentor of mine a while back. Start listing the referrals and resources that direct business your way, and the type of business you receive. If applicable, continue to map second and third degree referrals directing you business. This too will illustrate where your efforts might best be placed when trying to deepen your clientele.
3. Utilize your contact management system. If you don’t have one, now’s the time to develop it. And if you have one, it’s time to use it creatively. How? The premise is not just about what software to use, but how to develop a system of maintaining relationships with your customers. This Bloomberg Businessweek article explains this premise, and offers a few links to further resources. It’s all about finding a system that you and your team can incorporate into daily routines, otherwise there’s no value to having one.
4. Strategize your marketing plan. A marketing plan starts with telling the story of your business, see this Entrepreneur article for a 60-second pitch guide. Once you know how your business is distinctive and the solutions that it offers, it’s time to build a community with your customers. The key is to think strategically about engaging with the right audience, leverage online tools, and interact by providing value. Here are a few ideas for orchestrating your plan:
   • “Developing a Marketing Plan,” Small Business Association
   • “Want to Make a Killing in 2012? Then Use This 5-Step Cheat Sheet,” OPEN Forum
   • “5 Exceedingly Simple Ways to Get More Traffic to Your Website,” OPEN Forum
   • “10 Small Business Social Media Marketing Tips,” Mashable
   • “5 Advanced Social Media Marketing Strategies for Small Business,” Mashable
5. Know how to close deals. With a marketing plan in place, customers will be familiar with your products and services. However, it all falls flat if you don’t offer incentives and opportunities for them to make a purchase. Knowing how to close the deal is crucial as it is always more expensive to pursue new customers than to retain existing ones. There are a variety of sales methods, and it may take a few trial approaches to find out what works best for your business. Here are a few articles showcasing the options available:
   • “5 Tips for Closing a Sales Deal,” Discover
   • “10 Tips to Kick-Start Your Sales Skills,” Entrepreneur
   • “The Mental Game of Sales,” MHT

Take a moment to think through what proved successful in 2011, and what fell short despite your greatest efforts. We often get caught up with trying to do everything at once and immediately in an attempt to capture opportunities we think will prove fruitful. With a little strategy and foresight, your 2012 business resolutions just might prove even more successful and profitable – and it might not be worth doing everything either. Enjoy the process and don’t forget to celebrate the little milestones along the way.

Photo courtesy of Accessories.

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The business of the holidays

The holidays are officially here. And for many businesses, it’s one of the biggest marketing and sales opportunities of the year. But have you thought about utilizing this time for improving your business relationships? This Small Business Support Network article, “The Business of Christmas,” got me thinking about how the heightened degree of social gatherings and merriment during the season is a prime opportunity for bolstering your business and personal relationships, as well as making new ones.

Sure, as a business owner, ‘receiving’ a boost in business during the holidays is a great mood enhancer. It’s something many count on. But through the old adage of ‘giving,’ you can also view the season as a time to build upon lasting relationships with colleagues, partners, vendors and the like. This has less to do with giving presents as it does with giving your attention and time. And in the end, your generosity towards others will hopefully strengthen your base of business activity throughout the next year. As an example, reuniting with someone and strengthening your relationship can lead to a strategic alliance that previously didn’t exist. Here are some easy ways to foster relationships during the holidays:

• Attend another company’s holiday party. Particularly if your business is compatible with the host company, this will grant an opportunity for you to interface with more people than your main point of contact. Plus, every host appreciates a crowd at their own party.
• Host a holiday party. A holiday party is a great way to say ‘thanks’ to those who have worked hard to support your business’ success over the year.
• Follow-up. Collect business cards and remember the people you meet at various holiday occasions. This is a great time to connect and reconnect.
• Give referrals. Listen for how you can help others and give referrals that solve problems.
• Appreciate your customers. A simple “thank you” goes a long way, and this is the time of year to let your customers know how much you cherish their business. Notes of gratitude, VIP sales opportunities, catered service, etc. go a long way.
• Send holiday cards. This is yet another touch-point to keep you and your business top-of-mind.

Enjoy the holidays and enjoy rekindling friendships. Though the holidays will surely be busy in many respects, taking time to focus on others will undoubtedly be rewarding. And if you don’t make it to the party, try to connect with someone for five-minutes each day. Sometimes it’s reaching the mini-goals that help champion our greater efforts.

Photo courtesy of Tiny Prints.

Will Bake for Food: Charitable Bakers

This weekend, I was fortunate to participate in an annual baking charity event called “Will Bake for Food.” It’s a bake sale orchestrated by Jenny Miller and Jenny Richards, and comprised of a community of Seattle food bloggers selling their sugared sweets to support the Emergency Feeding Program of Seattle and King County. Supporters not only came in droves to buy holiday sweets, they also contributed canned goods; in total the bake sale brought in $2,571 and several huge barrels of food to donate. Pretty impressive for a four hour bake sale!

As far as bake sales go, this was certainly one to attend. There were homemade marshmallows, pumpkin cheesecakes, brown-butter Nordy bars, savory and sweet popcorn bundles, bread pudding made with apple-fritter donuts, and chorizo caramel sauce. But what I appreciated most was all of the unique gluten-free items for sale. Because I do not eat gluten myself, I notice these things.

Gluten-free baking has become big business these days. This Reuters article offers a great aggregate summary of recent gluten-free business opportunities – did you know that gluten can be found in McDonald’s French fries and some lunch meat and lipstick? Making gluten-free products presents huge profitable ventures these days and the nation’s largest food conglomerates are looking to cash in on what was once a tiny niche. Though it is impressive to see how what was once a small business is now capturing corporate interest.

So what did I make to contribute to the bake sale? I made a salted birdseed brittle, perfect for human consumption. I adapted a recipe by Jess Thomson in the November 2011 issue of Edible Seattle magazine. What caught my attention was that brittle is a great sweet treat that simply is gluten-free; it’s made from sugar, butter, and a crunchy filling. So often gluten-free baking is an attempt to make common gluten-filled food without the use of wheat, barley, rye, etc. – and it just doesn’t compare.

Now for the recipe. My only adaptions from the original Edible Seattle recipe were to exclude emmer (as it is a wheat grain), increase the volume of the quinoa, millet and sesame to compensate, and generously salt the surface of the brittle for a sweet and salty flavor combination.

Salted Birdseed Brittle – Directly adapted from Jess Thomson’s recipe in Edible Seattle

1 1/4 cup quinoa

1 1/4 cup millet

1/4 cup sesame seeds

1/4 cup bonus mix of quinoa, millet and sesame seeds, or substitute sunflower seeds – in lieu of emmer

2 cups sugar

1 cup light corn syrup

1/2 cup water

2 sticks (1 cup) unsalted butter, cut into 1/2″ pieces

1 teaspoon baking soda

1 teaspoon sea salt

Preheat the oven to 325 degrees Fahrenheit.

Spread the quinoa, millet, and sesame seeds evenly on a baking sheet. Toast seeds in the oven until lightly browned and fragrant, 10-12 minutes, stirring once or twice during cooking. Remove from the oven and set aside to cool.

Combine the sugar, corn syrup and water in a large sauce pan. Cook over medium heat, stirring until the sugar dissolves. Bring to a boil, then stir in the butter. Cook the mixture over medium high heat, stirring occasionally, until it measures 290 degrees Fahrenheit on an instant-read thermometer. Stir in the toasted seeds and the baking soda, then return the heat and cook until the mixure boils again. Immediately pour the mixture onto two rimmed baking sheets, dividing it evenly between each sheet. Working quickly, use a small spatula to spread the mixture into an even layer about 1/4″ thick. Generously sprinkle the sea salt over the surface of the mixture. Let it cool until completely hard.

Break the brittle into bit-sized pieces, then store in airtight containers at room temperature, up to 2 weeks.

This is an easy treat to make over the holidays and nice to bring to parties and potlucks too. Enjoy the brittle and continue to think of how to support others in need.

Engaging Millenials

Millenials. There is no clear definition to the bracket age range of Generation Y, or the Millenial generation, but it is said that they were born sometime between the mid-1970s to the early 2000s; they are the children of baby boomers and are thus also called ‘Echo Boomers.’ And in the U.S., there are a lot of them. In fact, in a recent Harvard Business Review article, the new Coca Cola CEO, Muhtar Kent, stated that the U.S. in particular is a great growth market for Coca Cola because: “It’s the only Western nation with a young demographic that is growing. By 2040 only a quarter of the U.S. population will be over the age of 60, compared with 30% in Europe and 40% in Japan. It’s a diverse, enterprising, entrepreneurial population.” I love that last sentence.

Here’s the tough part, Millenials have faced the highest unemployment rates among the nation’s four living generations and they are more likely than other generations to report a recent job loss; add in two wars and the threat of global terrorism. Moreover, according to the Pew Research Center, because they’re still developing their core values, these effects can be pretty influential.

Yet, the huge wave of Millenials flooding the workplace remains incredibly optimistic and driven. They are digital natives, they are accustomed to ongoing dialogues about their integration in the workplace, and they expect coaching in different forms and with several people. Most importantly, they see education and learning as a currency to cash in for opportunities – and if an organization does not have a pipeline of next steps for career succession, Millenials are willing to move on, even if they have yet to conceive of a Plan B.

On the subject of leaving, a recent study by Mercer noted that nearly one-third of U.S. workers are at least considering leaving their present employers and that younger employees (under age 35) are most at risk in the current environment — 40 percent of employees age 25-34 and 44 percent of employees age 24 and younger are considering leaving. On the flip side, a Towers Watson report indicated that most organizations surveyed expect employees to work more hours than before the recession, and that over half expect this to continue – it also mentioned that organizations underestimate the effect work-related stress and work/life balance have on employee retention, and do not recognize the significance of job security in attracting top talent. There’s a win-win to be found in the integration of reward and talent management programs, now’s the time to get creative and really understand your business, your future, your employees, and a succession plan for all.

Here’s a list of articles to read as a quick bootcamp for engaging the Millenial generation and harnessing their talent:

• “5 Coaching Suggestions for Engaging Millenials,” OPEN Forum
• “OMG – Managing Millenials,” The Company Line Blog
• “America’s Lost Talent and How to Get it Back,” Harvard Business Review
• “The Millenials: A New Generation of Employees, A New Set of Engagement Policies,” Ivey Business Journal
• “Leveraging the Link Between Corporate Volunteerism, Employee Engagement and the Bottom Line,” Deloitte

Millenials truly believe in the total work experience and how it impacts their career succession and personal aspirations, in addition to opportunities for influencing the future growth of their employer and the communities to which they live in. It’s a full-sweep bottom line approach given the social and financial perspectives, but a differentiated approach as to how an organization can retain and attract talent as well. The Millenials are certainly changing the game in many realms, it’s time to utilize their strengths.

Photo courtesy of The Millenials, a documentary by two Clemson seniors.

Debit card merchant and usage fees

FYI. As of this month, merchants will now be paying higher merchant fees for debit card transactions. The cost of transactions has jumped as of October 1, 2011 as merchants must now pay the maximum allowable fees under federal law for purchases under $15; 21 cents to 24 cents, instead of  6 cents to 7 cents per transaction. What does this mean? These fees may end up coming out of your wallet.

Debit cards have been under hot debate lately. At issue is the fee that retailers pay to banks to process electronic debit card payments, otherwise known as interchange fees. Previously, interchange fees were set by the payment card networks, such as Visa and Mastercard, as part of the contracts that allowed merchants and their banks to use the networks to process electronic payments. The networks argued that interchange fees helped pay for the electronic processing, fraud prevention and convenience that go along with accepting a debit card payment. Merchants used to pay interchange fees of about 1 to 2 percent of each transaction, or about 44 cents on the average purchase. Now, the credit card networks have eliminated the interchange fee rate schedules and the merchant discounts on small-dollar purchases and set all rates at the maximum allowed by law.

And if you think you might fair better opening a merchant account with a small regional bank, you might ask further into their policies. Apparently, banks with less than $10 billion in assets are exempt from the debit card swipe fee limits, but that doesn’t mean that they’re not opposed to charging fees. Thus, these small banks can charge higher interchange fees for using their cards, particularly as they’re finding it harder to generate loan income otherwise.

What about all the press on the ‘customers’ of banks paying more for using debit cards? That’s true too. Banks are now charging ‘activity fees’ for accessing your own money, the New York Times recently ran through a few banks’ fees as well. Check out the new debit card swipe fee rates in effect.

• Chase: $3/month service fee on debit card use.
• Wells Fargo: $3/month “debit card activity fee” charged to GA, OR, WA, NM and NV customers a part of a test program.
• Bank of America: $5/month for debit card use, starting in 2012. Cancelled as of November 1, 2011!
• SunTrust: $5/month for debit card use, starting in 2012.
• Citibank: No fee, as it would be a source of irritation for its customers.

President Obama is blasting Bank of America for charging fees. Banks are trying to defend their position. Retailers are on the road to discriminating against debit cards. And small businesses may end up scrapping credit card transactions all together in favor of cash. Regardless, accessing money this days costs money. Finding the most efficient way to do so is the name of the game, but at what cost to your business?

Photo courtesy of BizMology.

Price Matters

For all the statements about product mix and customer service, in this economy, price matters. And for small businesses, price really matters. Customer culture these days encompasses all forms of comparing, contrasting, searching online, hemming-and-hawing, and pretty much analyzing a purchase to death sometimes. What to do?

Well, doing research can help get your bearings. Research what your competition is doing. Research the worth of changing prices. Also, try taking the focus off pricing and research options beyond price changes to improve your margins or consumer behavior. Here are a few resources for each:

Researching your competition:

• From an Inc. article on writing a business plan, “Most people set prices based on what their competition does, which is a big mistake. The key is to focus on how much you want and where you want to be.”
• “10 Tips on How to Research Your Competition” and “How to Conduct Competitive Research,” Inc.
• “Inflations Pressures Grow on Main Street,” CNN Money

Researching the worth of changing prices.

• “How to Avoid Falling into a Price War by Focusing on Value, ” Small Business Association
• “Competing on Price is Bad for Small Businesses,” Understanding eCommerce
• “5 Ways to Win on Price,” Small Business Trends

Researching other options beyond changing prices.

• “Forget Competition it’s Time for Co-petition,” Small Business Association
• “Five Steps for Small Business Owners to Reduce Operating Expenses,” PR News Wire
• “6 Tips to Improve Your Gross Margin,” More Business

These resources should help you to gauge where your business stands on price and how much that rank matters. In the end, you’ll likely understand your business much more thoroughly, which isn’t a bad thing either. Because your pricing contributes to your business’ brand, it’s important to know your reasoning behind it – and your reasoning behind changing prices if that’s the route you wish to go.

Photo courtesy of Mediabistro.

Setting the Stage

I recently attended an event at which two very prominent and successful executives had the opportunity to speak with a group of young adventure seeking and career aspiring individuals – I am just that individual. The tough part about developing a career is that it often times can’t be planned. I was once told that a “career” is something you look back upon in hindsight. That perspective makes sense, but knowing that tangential circumstances are what presented the open doors for many successful people to walk through doesn’t give me the confidence to charge forward. What does make sense is that everything I do sets the stage for what’s next to come. And with that frame of mind, I have a lot of props at my fingertips, and I have a lot more to go out and build.

I also realized that I am on the stage. I am, and have been, acting out my song and dance – I might as well make each and every act fun right? (Enter the cast of Glee here.) I have been perceiving my life in the future for as long as I can remember, forgoing the value of what was happening in the present moment; the crowd will never give an applause if there wasn’t a show to begin with. It’s time to bring out the jazz hands and enjoy the spotlight!

What does this all mean for business? As a business owner, you have fans, you have an audience, you have customers who are watching your song and dance right now. You wouldn’t have started your business unless you had the props to do so, and in doing so, you’ve likely developed a few more to further your story line and enhance your performance.

Strategic planning is a fantastic exercise, but it’s only worthwhile if you are capable of acting out the day-to-day successfully. Take the time to cultivate your identity and camaraderie, and the magnetic qualities that excite your employees and attract your customers. Your passion, creativity, and tenacity brought you to your entrepreneurial success. But it’s your existing operations that provide a daily report card for you to constantly tweak so that you can continually engage your customers. Do a S.W.O.T. analysis, set S.M.A.R.T. goals, but use them as a guide. You’ll never achieve the end result if you don’t take that first step and nurture the process.

Be the lead in your own life, draw a crowd to your business, and bask in the limelight on your own stage. You’ve got gumption and the cameras are rolling, make it a great scene.

Photo courtesy of Un-Cabaret.

Social Networks and Baby Boomers

I recently read this article, “Social Networks Are Not Just for the Young,” in The Chronicle of Philanthropy. What made me even more interested in the fact that people older than 50 years of age were using social networks, more than before, was how the article presented the information. The article closed out with the following:

“What does this mean for nonprofit groups? For groups that appeal to older supporters, it means that they can no longer assume that their supporters aren’t using social networks. For other organizations, it might be time to experiment with messages and conversations that are likely to engage older people—and to make sure that they aren’t using language tailored to young adults.”

Consider how this data is applied – such as in the nonprofit world. Reaching out to an organization’s membership requires a strategy beyond a simple e-mail here and there. Social networks provide the capability of having a presence where people already spend their time; why not engage your demographic in your cause at the same time?

Facebook continues to be the most visited site for social networking across the ages (see this great chart), but that doesn’t mean that you shouldn’t discount the social media network suite of Facebook, Twitter, and LinkedIn. With a tactical communication strategy that supports your goals, each medium can enhance your ability for reaching your demographic. What this Pew Internet & American Life Project survey presents is the opportunity available to organizations for revised marketing tactics and community engagement vehicles. Baby Boomers are just one demographic leaping into the mix, consider your target audience and capture their attention!

Photo courtesy of Netsocializing.

Accounts Receivable Riskiness

Sales growth is only part of the equation when thinking about expanding your business; getting paid is the obvious other priority (and it just might be the biggest one). After all, if you’re not able to collect on your accounts receivables, it’s pretty hard to pay employees, manage operational expenses, or even consider planning for the future.

I’ve previously written about “Ensuring Customer Payment” and the importance of due diligence on a business owner’s part for following up with customers and making transactions more seamless. But have you ever analyzed the diversity of your ‘accounts receivable risk?’

OPEN Forum recently posted an article about accounts receivable risk and determining your accounts receivable concentration risk ratio. This ratio basically maps out who owes you what, and how much each value is relative to everyone else. It’s a great exercise for both economics geeks and, well, the rest of us who just want to get paid. Because accounts receivable risk refers to the likelihood that a particular customer becomes unable to pay what they owe, the goal is to have a ratio that is less concentrated so that your business is not dependent on the impact of one company failing to pay. (Check out the formula for calculating your business’ concentration ratio here.)

Reducing your concentration ratio is the next step.  This can happen by selling more to new customers or incentivizing your largest customers to pay faster through discounts for early payments or other benefits.  If you have leverage with your customers, you can also mitigate the risk of non-payment by acquiring credit insurance or using accounts receivable factoring companies to purchase your receivables in order to give you immediate capital. Although, factoring companies only give you a percentage of your accounts receivables, the capital inflow to your company is immediate and this type of small business financing can give you the jolt that is needed to kick-start your company.

At the end of the day, it always comes down to money. With the right information at hand, you’ll know which accounts need more hand-holding than others – and hopefully, a few tips for how to influence faster payment at the start.

Photo courtesy of Breakmould.

The Food Truck Business Model

It’s an understatement to say that food trucks are all the rage because it’s literally a “movement.” And really, this isn’t surprising as small businesses and entrepreneurial start-ups are thriving in this economy. Food trucks are the epitome of small, mobile, adaptable businesses going after their target markets.

Notably, a GPS-oriented Food Truck App launched this spring, debuted by the company that leased Kogi BBQ its first truck and helped kick off the nouveau food truck craze. Roy Choi of Kogi BBQ is also one of Food and Wine‘s Top Chefs of 2010 (check out his business tips). Additionally, the Food Network is premiering its new show Food Trucks later this summer on August 15, 2010. So it’s already been a big year for food trucks! And as cities across the county take pride in their favorites, this national sensation not only bolsters the local economy, tourists flock toward them too.

So what does it take to run a food truck? Well, the biggest seller for jumping into the market is mobility and a somewhat lower initial capital investment – over a brick-and-mortar restaurant. But as every entrepreneur will tell you, it’s easy to run after tangents that spider off of an original business model, that is if you have one. Inc.com posted an informative article about “How to Open a Successful Food Truck,” which also included a number of operational considerations such as city permits, insurance, and parking fees. New York Magazine also published an article on “How to Start Your Own Food Truck,” noting start-up operating costs and acquiring/retrofitting a truck as significant measures to acknowledge.

Probably one of the most influential contributors to the making of a successful food truck culture in any city are the street vendor licensing and permitting requirements. The Seattle Times recently posted an article in its Retail Report about how the Mayor plans to recommend street food rule changes to the City Council. “Street Vendors” are even qualified as a characteristic of a thriving business district by the Seattle Office of Economic Development. Yet, a number of strict regulations imposed in the 1980’s have limited Seattle’s street food scene to a minimal number of trucks and a battalion of hot dog, popcorn, and espresso vendors. Check out the main changes being proposed here. There’s a mixed emotion for the relaxed rules, given the potential for increased business competition. And there may be a few learning opportunities from Portland’s street food scene.

Regardless, food truck entrepreneurs have mastered the use social media to create consumer demand and a loyal following. They’re experts at building relationships and communities of fans – who wouldn’t want to discover their tricks? (See Mashable‘s video and Forbes‘ article.)

In Seattle we’re fortunate to have a wealth of fresh, local, and creative food – it will be interesting to see how a bigger food truck scene reflects this. And with our successful farmers market culture, I wonder if the mobile CSAs of New York City will make their move West – will truck farming be the next movement?

Photo courtesy of ibeginz.