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Low Cost Ways to Test your Business Idea

So you’ve got a great idea for a new product or solution and you think it’ll be a sure-fire hit.

Not so fast. To find out if your idea has traction, you need to test it.

It’s an often-overlooked step that can help you refine your offering and ensure a successful go-to-market strategy. So before you put pen to paper and write your business plan, get out there and assess the validity of your product.

Here are six low cost tips on how to best test your business idea.

Find your Idea’s Fatal Flaw

SCORE offers some great tips on how to validate your idea. In this article, guest contributor, Daniel Kehrer, stresses the importance of banishing the idea that your product or solution is perfect. It isn’t. It may have one, two, or multiple flaws. Ask yourself:

What am I missing? What possible pitfalls am I not seeing? How might my competitors respond? What…makes me think that my business or product idea will work when…others don’t?” Once its flaws have been identified, find a way to fix them.

Related: Corporation or LLC? What’s Best for Your Company?

Test Outside your Network

There’s a lot of advice out there about testing your idea on friends and family. Not always. Also writing for SCORE, Jeanne Rossomme, recommends that entrepreneurs refrain from soliciting input from their immediate network, including their team. Instead focus on those whose opinion matters – your target market.

One way to do this is to crowdsource your market research. Form a focus group. This can be done virtually or in-person. Simply advertise for volunteers (Craigslist is a good place to start). Then provide these people with free samples of your product to test. Alternatively, assemble your focus group in one place and have them try out your product, alongside the competition’s, and see what results you get.

If your idea is less tangible or you don’t have a prototype in place, walk the streets and find out what people want. What’s missing in their market? What is the competition not providing? If your solution was available to them, would they take advantage of it?

3. Tweak It, But Not Too Much

As you test your idea you’ll encounter lots of feedback. In many cases, it can be overwhelming. This is especially true if your trying to get investment or are pitching a concept or prototype to a new client (particularly one who promises to buy it in bulk). It can be tempting to edit your idea to the point where it becomes so customized to the needs of a single customer, that you rule yourself out of the rest of the market, or waste precious resources trying to check all boxes.

Instead focus on the must-haves that translate well across several markets or customer profiles. There’s plenty of time for customized flavors of your idea down the line once you make a profit and can start diversifying.

Related: Marketing Tools Entrepreneurs Should Keep Handy

4. Perfect your Elevator Pitch

You see this all the time on TV show’s like Shark Tank. You need to pitch your idea in 30 seconds or less. What challenge does your product address, how? How is it different to the competition (what’s your differentiator?). And what is the outcome for the buying customer. People buy outcomes, not products. Your elevator pitch is something you will take with you for the lifetime of the idea – whether you’re pitching to investors, customers, manning a tradeshow booth, or briefing a marketing agency.

5. Create a Mini Version of your Idea

Creating a full-blown version of your idea can be expensive. Smart Passive Income’s Pat Flynn, has some great ideas for creating a mini-version of your idea to test the market. He uses the example of the food truck industry, which is often used as a platform to test an idea, concept, and menu before the owner commits to building a bricks and mortar restaurant. But the theory can be applied to other industries too. If you run a hair salon and want to start a massage therapy business at a new location, you could test demand by starting small by dedicating a small area of your current location to provide the new service on a part-time basis.

Likewise, if your product can be experienced without launching a full-fledged version, such as a piece of software, music, literature, and so on, test it as such.

Related: Tax Obligations for New Businesses

6. Run Dummy Marketing Campaigns

This is an increasingly popular and effective way to gauge market demand. Promote your idea for a product or service as if it’s already available on the market.

One way to do this, suggests entrepreneur advisor Evelio Pereira of Epicster.com, is to create a landing page to promote your idea. This could be hosted on your website or on a new domain. Include sales information, product/solution features, etc. Be sure to include a “Buy Now” or “Learn More” button.

Obviously you have nothing to sell yet, so when the site visitor clicks through take them to a page featuring the message that the product isn’t available yet, but if they fill in the form they’ll be notified when it’s launched.

You can use various outlets to promote the page – run an email marketing campaign to your existing customers. Or, if you have the budget, invest in Facebook ads (targeted to your geo-location and demographic) or Google Adwords or Bing Ads.  Your click through data will also provide valuable insight into whether your idea is in demand!

Related: Productivity Tools You Need In Your Toolbox

Credit: Caron Beasley via Small Business Association

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CMG Business Group…. Propelling Industry to New Heights!

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How to Name Your Business

 

What’s in a name? A lot, when it comes to small-business success. The right name can make your company the talk of the town. The wrong one can doom it to obscurity and failure. Ideally, your name should convey the expertise, value and uniqueness of the product or service you have developed.

Some experts believe that the best names are abstract, a blank slate upon which to create an image. Others think that names should be informative so customers know immediately what your business is. Some believe that coined names (that come from made-up words) are more memorable than names that use real words. Others think they’re forgettable.

In reality, any name can be effective if it’s backed by the appropriate marketing strategy. Here’s what you’ll need to consider in order to give your small business the most appropriate and effective name.

Enlist Expert Help to Start

Coming up with a good business name can be a complicated process. You might consider consulting an expert, especially if you’re in a field in which your company name may influence the success of your business. Naming firms have elaborate systems for creating new names and they know their way around the trademark laws. They can advise you against bad name choices and explain why others are good.

The downside is cost. A professional naming firm may charge as much as $80,000 to develop a name. That generally includes other identity work and graphic design as part of the package, according to Laurel Sutton, a principal with Catchword Brand Name Development. Naming services that charge as little as $50 do exist, but spending a reasonable amount of money early for quality expert advice can save you money in the long term.

Related: Your Startup is up and running. What now?

What’s in a Name?

Start by deciding what you want your name to communicate. It should reinforce the key elements of your business. Your work in developing a niche and a mission statement will help you pinpoint the elements you want to emphasize in your name.

The more your name communicates to consumers about your business, the less effort you must exert to explain it. According to naming experts, entrepreneurs should give priority to real words or combinations of words over fabricated words. People prefer words they can relate to and understand. That’s why professional namers universally condemn strings of numbers or initials as a bad choice.

On the other hand, it is possible for a name to be too meaningful. Common pitfalls are geographic or generic names. A hypothetical example is “San Pablo Disk Drives.” What if the company wants to expand beyond the city of San Pablo, California? What meaning will that name have for consumers in Chicago or Pittsburgh? And what if the company diversifies beyond disk drives into software or computer instruction manuals?

How can a name be both meaningful and broad? Descriptive names tell something concrete about a business — what it does, where it’s located and so on. Suggestive names are more abstract. They focus on what the business is about.

Consider “Italiatour,” a name that was developed by one naming company to help promote package tours to Italy. Though it’s not a real word, the name is meaningful and customers can recognize immediately what’s being offered. Even better, “Italiatour” evokes the excitement of foreign travel.

When choosing a business name, keep the following tips in mind:

  • Choose a name that appeals not only to you but also to the kind of customers you are trying to attract.
  • Choose a comforting or familiar name that conjures up pleasant memories so customers respond to your business on an emotional level.
  • Don’t pick a name that is long or confusing.
  • Stay away from cute puns that only you understand.
  • Don’t use the word “Inc.” after your name unless your company is actually incorporated.

Related: Hobby or Startup? Important When Filing Your Taxes

Get Creative

At a time when almost every existing word in the language has been trademarked, the option of coining a name is becoming more popular. Some examples are Acura and Compaq, which were developed by naming firm NameLab.

Coined names can be more meaningful than existing words, says NameLab president Michael Barr. For example, “Acura” has no dictionary definition but the word suggests precision engineering, just as the company intended. NameLab’s team created the name Acura from “Acu,” a word segment that means “precise” in many languages. By working with meaningful word segments (what linguists call morphemes) like “Acu,” Barr says the company produces new words that are both meaningful and unique.

Barr admits, however, that made-up words aren’t the right solution for every situation. New words are complex and may create a perception that the product, service or company is complex, which may not be true. Plus, naming beginners might find this sort of coining beyond their capabilities.

An easier solution is to use new forms or spellings of existing words. For instance, NameLab created the name Compaq when a new computer company came to them touting its new portable computer. The team thought about the word “compact” and came up with Compaq, which they believed would be less generic and more noticeable.

Related: 10 Small Businesses to Start With Little To No Money

Test Your Name

After you’ve narrowed the field to four or five names that are memorable and expressive, you are ready to do a trademark search. Not every business name needs to be trademarked, as long as your state government gives you the go-ahead and you aren’t infringing on anyone else’s trade name. But you should consider hiring a trademark attorney or at least a trademark search firm before to make sure your new name doesn’t infringe on another business’s trademark.

To illustrate the risk you run if you step on an existing trademark, consider this: You own a new manufacturing business that is about to ship its first orders when an obscure company in Ogunquit, Maine, considers the name of your business an infringement on their trademark. It engages you in a legal battle that bankrupts your business. This could have been avoided if sought out expert help. The extra money you spend now could save you countless hassles and expenses further down the road.

Final Analysis

If you’re lucky, you’ll end up with three to five names that pass all your tests. Now, how do you make your final decision?

Recall all your initial criteria. Which name best fits your objectives? Which name most accurately describes the company you have in mind?

Some entrepreneurs arrive at a final decision by going with their gut or by doing consumer research or testing with focus groups to see how the names are perceived. You can doodle an idea of what each name will look like on a sign or on business stationery. Read each name aloud, paying attention to the way it sounds if you foresee radio advertising or telemarketing in your future. Use any or all of these criteria.

Keep in mind that professional naming firms devote anywhere from six weeks to six months to the naming process. You probably won’t have that much time, but plan to spend at least a few weeks on selecting a name.

Once your decision is made, start building your enthusiasm for the new name immediately. Your name is your first step toward building a strong company identity, one that should last as long as you’re in business.

Credit: Start Your Own Business, Fifth Edition – Entrepreneur Press

Related: Marketing Tools Entrepreneurs Should Keep Handy

CMG Business Group…. Propelling Industry to New Heights!

 

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Tax Obligations for New Businesses

If you’re new to business, then wrapping your arms around your tax obligations can seem like an uphill task. The first question you need to ask yourself is which tax laws impact your business from the get-go? It may be safe to assume that your tax obligations kick in once you start making a profit. Not necessarily. Each business is different.

If you hire employees, you’ll have payroll tax obligations. If you operate a retail business, there’s sales tax to deal with. Then there are quarterly estimated tax payments (the self-employed equivalent of withholding).

To help you navigate the business tax landscape, here’s a quick overview of key tax obligations that may impact you.

Related: Behaviors of Successful People

Understand how your Business Structure Impacts your Tax Obligations

How you legally structure your business will affect your tax situation. For example, if your business is an LLC, the LLC gets taxed separate from the owners. While sole proprietors report their personal and business income taxes on the same form (Form 1040).

At the state level, you will encounter several tax obligations – sales tax, property tax, income tax, unemployment insurance tax, and more. The SBA offers more information on how your business structure determines your tax obligations (plus links to the necessary forms and portals for registering your business with the right tax authority):

Get a Federal Tax ID

An Employer Identification Number (EIN) is the business equivalent of your social security number. It’s is required by businesses who have employees, operate as a corporation or partnership, and other obligations. For the most part sole proprietors don’t need and EIN and can operate using their social security number. Does your business need an EIN and how do you get it? Learn more.

Related: Make The Entrepreneurial Difference

Pay Estimated Taxes

This one is easily overlooked, especially if you are new to business and previously had all your income tax payments taken care of through withholding. Each quarter, self-employed business owners must estimate their federal and state income tax payment and send a check to the IRS and their state treasury. This “pay-as-you-go” model applies to sole proprietors, partners, and S Corporations who expect to pay $1,000 in income tax in one year. The threshold drops to $500 for Corporations.

To help you calculate your estimated tax, check out the IRS Estimated Tax guide. Consult your state’s treasury office (you’ll find website links for each U.S. state here) to get the appropriate tax voucher or pay online.

It’s very important that you set aside sufficient to meet your estimated tax payments or you risk a cash flow problem. And don’t forget to keep good records of your income and expenses. The latter can be used to offset how much estimated tax you pay.

Sales Taxes – Does It Apply to You?

Sales tax applies to certain retail products (rarely services) and if your business has a physical presence in a state, such as a store, office or warehouse, you must apply for a sales tax permit and collect applicable state and local sales tax from your customers. That tax is then passed on to your state revenue office on a monthly or quarterly basis. Determining whether your business qualifies as having physical presence in a particular state (say, if you own a warehouse in Virginia but sell your services in Pennsylvania) and the implications on sales tax collection can be confusing. Certain states are exempt from sales tax including Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.

Related: Marketing Tools Entrepreneurs Should Keep Handy

Employment Tax – Withholding and Matching

If you start your business and immediately have employees on payroll, you’ll need to withhold Social Security (FICA), Medicare and federal and state income taxes from their salaries. You must also match your employees FICA and Medicare taxes and pay this matching along with your employee’s tax.

The IRS Employment Taxes guide has all the information you need to understand how you deposit and report employment taxes, key due dates, and more. Take a look at this guide to hiring your first employee too.

Working with Freelancers and Independent Contractors? – Know your Tax Obligations

Bringing on a self-employed contractor brings with it additional tax ramifications, especially if your business accidentally or deliberately misclassifies that individual as an employee. Read more about why it’s important to know the difference and how it can impact your tax situation.

Bookmark Tax Reporting Season in Your Calendar

The new year brings with it several tax obligations for employers. While you’re busy thinking about getting your income tax return filed, don’t forget your wage reporting obligations (W2s must be filed) and 1099 forms must be filed and issued to independent contractors you’ve worked with during the tax year.

Related: Corporation or LLC? What’s Best for Your Company?

Property Tax

Your local government (town, city, or county) collects property tax for business assets such as vehicles, computer equipment, software, and more. Likewise, if you do business in a commercial real estate location, the state will collect property tax on it. Check with your local tax authority to find out what you need to do to register your property and the process for assessing and making payments.

Additional Resources

For more small business tax help visit SBA’s Filing and Paying Taxes guide. The IRS Guide to Business Taxes is worth a bookmark too.

Related: Productivity Tools You Need In Your Toolbox

Credit: Caron Beasley via Small Business Association

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CMG Business Group…. Propelling Industry to New Heights!

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Ready for Office Space? Things to Consider First.

The contemporary startup garage is often the founder’s living room, a friend’s spare desk or a coffee shop with reliable WiFi. As cozy and cash-efficient as these setups can be, in time — and with revenue or a successful fundraising — your growing team needs a legit space.

For a growing team, securing an office has traditionally required signing a multi-year lease — often with extra room secured up front to accommodate future growth. In other words, it’s a long-term cash commitment for more than what you need now. I’ve been there. During my first stint as a CEO nearly 16 years ago, I recall how uncomfortable it felt to have to guess whether we’d need space for 50 or 500 people three years down the road. Entrepreneurs today are fortunate to have more options and flexibility than ever before in securing professional office space.

The commercial real-estate industry is undergoing a dramatic transformation, offering new solutions that better fit the needs of fast-growing companies. It may surprise you to learn that shorter-term leases do not necessarily require a premium for the flexibility they afford. If you’re in the market for a new office, this means you can approach your search differently today than was possible in years past.

Related: Looking for Your Dream Office Space? Don’t Go It Alone.

1. Think on your own timeframe.

Leading landlords, in particular those in cities with high startup activity, are increasingly offering shorter-term office rentals — even as short as month-to-month. These building owners have recognized that high-growth startups crave flexibility and are willing to bet that the 10-person team that needs 1,000 square feet today may quickly mature into a sustainable business with hundreds of employees.

You likely have a good sense of what your headcount and space needs are for the next three, six or 12 months. Sign an agreement for the length of time you feel comfortable, and preserve your ability to reevaluate your needs down the road.

2. Play the whole field.

Despite the headlines about rising rents in the major tech markets, there are more space options today than ever before. You’ll find successful, growing companies in a variety of places — in co-working spaces, office business centers, sublets from later stage startups and traditional office building rentals. While your primary search criteria may be factors like location, cost and amenities, there are now more types of spaces to consider that may match your unique needs, style and budget.

Related: 100 Great Questions Every Entrepreneur Should Ask

3. Click around town.

It’s commonplace now to source and transact travel, lodging, software and even professional services online. Commercial real estate is coming out of the dark ages, and you may be surprised to know that your office search can start and be completed online.

My company, LiquidSpace, is the real-estate network for startups and growing teams. Follow target neighborhoods and properties to be the first to know of new office availability, evaluate spaces, and schedule tours from your phone or browser, connect directly to landlords and companies with space to share, and when your space decision has been made, make it yours with a click — no lease, no hassle.

4. Do the deal on your terms.

You don’t sign a lease when you rent a hotel room. You shouldn’t need to for short-term office space either. If you come across a short-term option, you can use a simple space license agreement to avoid the headache and legal fees of a traditional lease. The license agreement we use across our network is in the public domain and free for anyone to use.

The only folks who lose are the lawyers. Unless they’re looking for space, too.

Related: The Case for Office Space: Choices for Every Stage and Need

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CMG Business Group…. Propelling Industry to New Heights!

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Generate More Leads!

Every person reading this blog has some sort of business goal they want to accomplish in 2016. Maybe it’s a revenue goal. Maybe you want to work with more “ideal” clients or customers, rather than the accounts you’ve been serving.

Regardless of what industry you’re in, there are probably certain business objectives you want to achieve this year.

I’ll let you in on a little secret: To achieve those goals, you are going to need a certain number of leads!

Inbound marketing has become a primary way for businesses of all shapes and sizes to obtain the quantity and quality of leads they need to achieve their goals. In fact, 93 percent of businesses using inbound marketing see an increase in lead generation.

Related: Seven Secrets of Self-Made Millionaires

Lead Generation Offers

However, not all inbound marketing offers are created equal. Some offer formats perform better than others at converting leads. For example, what’s more valuable: a white paper or an ebook?

Here are the types of lead generation offers, in order of effectiveness, that generate the most amount of leads:

  1. Ebooks or guides
  2. Free templates or presentations
  3. Research and reports
  4. White papers
  5. Workflows and helpful kits
  6. Live webinars
  7. Pre-recorded video series
  8. Blog subscription
  9. Ecourses
  10. Demo requests

Note: It’s important to test different types of offers with your audience to determine what works for you. While ebooks score high on our list, you may find that reports, videos, or other formats work better for you.

Inbound marketing can help you eliminate the challenging and awkward aspects of growing your business like cold calling. Get the year off to a good start. Don’t wait until you’re desperate for leads to consider how you can use inbound marketing to grow your business.

Related: Behaviors of Successful People

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CMG Business Group…. Propelling Industry to New Heights!

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How to Conduct Market Research

If you don’t know your customer, then you don’t know your business. You won’t know how to respond if you see changes in your sales patterns. And because it’s so hard to hang on to customers you don’t know intimately, you will forever be chasing new ones.

Unfortunately, though most business owners like to think they know their customers, many are really only guessing. And when it comes to forecasting sales — in fact, when it comes to virtually every aspect of business planning — an empirical understanding beats gut instinct almost every time. Now is the time to get the facts.

Professional market researchers generally divide their work into qualitative studies (interviews and focus groups, with free-flowing and open-ended discussions) and quantitative studies (usually surveys). In a perfect world, you would probably do both, using qualitative research to create a survey, the results of which might in turn be interpreted using another focus group. Given limited resources, though, it generally makes sense to go quantitative. After all, says Steve Sprague, a marketing consultant in Marion, Iowa, “some data — any data — is better than none.”

Related: Improve Business Profits and Make My Business More Profitable

Building a Better Survey

1. Define Your Survey Target
First, identify the customers to survey. In general, it makes sense to focus on your best customers. “You want to look at the upper 60 percent of your customers by sales,” according to Sprague. Naturally, this is easiest for companies that track purchases and customers individually: Rank your customers by sales and lop off the bottom 40 percent. Alternatively, your sales or accounts receivable staff ought to know who your most reliable buyers are.

Retail shops and other establishments in which purchases are small and buyers tend to remain anonymous may have to settle for a smaller sample from a broader range of customers. But even these businesses can identify their best customers by encouraging customers to fill out a postage-paid postcard with very basic information or by asking them at the register for a Zip code, which can then be used to create a demographic profile. (See “Decoding Demographics.”) You might also institute a frequent-customer program, in which you offer a discount or other incentive in exchange for a small amount of personal information and an opportunity to contact the customer later. Newsletters and e-mail updates are also an opportunity to identify whom to contact later; ditto the prize drawing that requires a business card to enter.

Sometimes you will want to study specific customers. If, say, sales are flagging, you might study lapsed customers. “Identifying characteristics of your attrition market may help you develop new customers and clients,” notes Nancy Ulrich, a marketing research consultant in suburban Jacksonville, Florida.

Related: Staying on Top of Your Social Media

2. Decide on a Format
There are basically three ways to administer a survey: by mail, by phone, or online. A highly personalized letter is best when the survey population is hard to reach (physicians, say, or senior executives). A phone interview serves well for complex and probing questions that demand interaction between interviewer and subject, but it normally requires professional assistance. Most businesses, though, will do very well with an online survey. Many survey companies (Zoomerang.com, for one) offer inexpensive tools and complex branched questions, in which a specific response to one query generates a specific follow-up. And they are fast — you can see results in real time.

Experts say that a written survey should take from five to 15 minutes to complete. Divide your questions between customer satisfaction and customer demographics, weighted toward the former. And keep it short, says Sprague, who includes fewer than 10 questions when he writes surveys for his clients. “By limiting the number of questions, you improve the response rate,” he says. “And it forces you to think about what’s important.”

Be personal, and begin by praising your customer and highlighting the importance of the survey. At the end of the survey, you should offer some sort of reward or incentive — the longer the survey, the more generous the reward.

Related: How to Name Your Business

3. Probe Customer Satisfaction
When writing survey questions, take care to avoid introducing a bias that telegraphs the answers you hope to receive. Avoid trade jargon or abbreviations, or at least make sure they are well defined.

Ask open-ended questions. These let respondents ruminate about what they like about your company and what might improve the relationship. Be sure, says Ulrich, that the text boxes allow space for lengthy responses. Follow these with a multipart rating question and a corresponding multipoint scale to review your business’s specific processes. Ulrich believes that respondents more easily understand descriptive words (excellent, fair, poor, etc.) than a numbered scale.

Calculate your net promoter score. Ask respondents how likely, on a scale from 0 to 10, they are to recommend your company, product, or service to others. The net promoter score is derived by subtracting the percentage of “detractors” (customers who rate the business from 0 to 6) from the percentage of “promoters” (who rate the company 9 or 10). The greater the difference, the more likely that your company can convert the enthusiasm of current customers into new customers. Sites like Net Promoter (netpromoter.com) offer more information about these scores and comparisons with leading companies. Or simply view your score as a useful general indicator of your customers’ feelings about your product or service.

Ask for suggestions. Sprague likes to conclude the customer satisfaction portion of a survey with a query like: “What could we do to make your next experience with us extraordinary?” “It stretches their mind and your mind,” he says. “It’s going to help you think of things you haven’t thought of before.”

Related: The Art of the Pitch

4. Dig for Demographics
The demographic information you seek will depend on which attributes drive your business — these may include age, gender, marital status, educational attainment, household income, and leisure pursuits. Some of these are sensitive topics, and you don’t always need to broach them. For instance, if you know a customer’s Zip code, you can get a rough idea about income and education. If you know the address, you can refine that further by sorting customers into what are called census block groups, says Jeffrey DeBellis, director of marketing and research services at the University of North Carolina’s Small Business and Technology Development Center. (See “Decoding Demographics.”)

When your customers are businesses, you want information about their size by number of employees and revenue. (If your customers are reluctant to share that information, formulate the responses as a series of ranges.) Also, try to get the NAICS (or North American Industry Classification System) or SIC (or Standard Industry Classification, which has been replaced by the NAICS) code. This can help you identify similar companies in the area.

5. Test the Survey First
Before you make the survey available to your customers, ask family members and friends to test it for time and clarity, and whether the questions mean what you intend them to mean and are free of bias and the like.

Related: Seven Secrets of Self-Made Millionaires

Using the Data

Once you tabulate the results (which happens almost immediately with e-survey programs), patterns should emerge. “If you have 20 answers, and you don’t see definite trends, then you probably don’t have enough data,” says Sprague. You could try to resurvey, using the existing results to write more probing and targeted questions, or you could convene a focus group. Focus groups are also useful for interpreting the results.

Focus, focus, focus. For focus-group testing, it is smart to engage experienced marketing consultants, who will be adept at moderating the conversation. For one thing, your subjects will probably be more reticent if you or your top sales executive is conducting the session. “With a trained focus-group facilitator, you’re going to have someone who will generally script the experience up front,” says Ulrich. Moreover, “experienced facilitators develop a certain amount of intuition when something’s up,” sensing when the dynamic has changed and able to steer the conversation in a new direction if necessary.

The “aha” moment. Ulrich recommends that once you have collected all the data, “find one or two ‘aha’ ideas and implement them immediately. Make sure they’re visible and that they impact the greatest number of people in a positive way.” This will show, she says, that you have been listening to the needs and concerns of your customers — which, any great salesperson will tell you, is half the job.

Related: Productivity Tools You Need In Your Toolbox

Decoding Demographics

The Web offers databases and automated services that can help make sense of the survey data you collect. Some are free, but the most useful involve fees or subscriptions. Check with your public library and local “economic gardening” organizations — such as Small Business Development Centers, chambers of commerce, and economic development groups — to see if they offer free or discounted access.

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Compensation Tactics To Help Retain Employees

 

Guest columnist Ron Volper discusses how a well-thought out compensation plan can help retain your best employeees.

Small and mid-sized businesses that lose top performers incur the costs of hiring and training new employees, but they face an even greater risk: damaging relationships with existing customers and eroding the morale of other employees. Proof of this is that the companies that are the most profitable usually have the highest employee retention.

A study the Ron Volper Group conducted, in 2011, across a range of industries, confirmed that the number one reason for “unforced turnover” is employee dissatisfaction with their compensation. Moreover, 80 percent of employees who voluntarily left their company took a higher paying position with another company.

Here’s how you can use your compensation plan to retain and motivate employees and up your sales in a down market.

1. Pay employees salary and incentives. The companies with the highest employee morale and productivity pay a mix of salary and incentives. The salary compensates employees for performing all the tasks required of them and provides them with a consistent income. The incentive (which can be commission for salespeople and a bonus for others) motivates them to meet and exceed their goals and gives them the opportunity to increase their earnings.

Related: Get The Most Out of Your Startup Team

Pay employees the salary portion of their compensation monthly or bi-monthly. Pay employees the incentive portion of their compensation as soon after they meet their goals as feasible. Thus, quarterly incentive payments are usually more motivating than annual payments and monthly incentive payments are often best.

2. Keep the incentive part of your plan simple. The test of a good compensation plan is that the incentive part measures no more than two to four performance factors, and all employees can accurately explain the plan in the time it takes to walk from the front door of your office building to your receptionist’s desk.

3. Establish SMART goals. SMART goals are: Specific, Measurable, Ambitious, Realistic and Time-bound.

For salespeople, that means establishing monthly and annual revenue goals and/or goals for opening new accounts. For other customer contact people, establish goals for the ratio of customer compliments versus complaints, and/or the number of customer complaints they resolve on the first phone call. For employees in accounts receivable, consider basing goals on how much outstanding revenue they collect against specific targets. For those in manufacturing, consider basing goals on the number of products they manufacture free of defects.

While it’s okay to pay a small part of the incentives based on the team’s overall results, most of the incentive should be based on individual results.

Related: Make The Entrepreneurial Difference

4. Determine what your competitors are paying. One way to attract and retain top employees-and keep them motivated is to pay them as much or more than your competitors. Every few years, you should determine what your competitors are paying and adjust your compensation plan accordingly. You can do this informally by asking employees with other companies that you interview about their compensation plan, or more objectively by hiring an outside consulting firm to benchmark your plan against others and advise you on how to adjust it.

5. Modify salaries based on employees’ geographic location. While the incentive plan for employees working in different cities should not change, you should adjust the salary portion to reflect the local cost of living, so as not to penalize employees who live in more expensive cities.

6. Use merit increases to reward top performers. In a misguided attempt to keep all employees happy, many companies misallocate the funds they budget for annual merit increases by giving all employees essentially the same merit increases. Your first priority should be to retain and motivate star employees, your second priority to retain and motivate satisfactory employees. Therefore, award the largest salary increases to your stars, much more modest increases to satisfactory performers, and no increases to employees whose performance falls below expectations.

7. Provide employees with non-financial rewards. Besides cash, employees are motivated by other forms of recognition and rewards. For example, consider establishing an annual trip to reward employees who have achieved certain annual goals. Besides increasing motivation, company-sponsored trips build camaraderie and teamwork. How you train, develop and manage your employees also drives retention and performance. However, paying them as well as you realistically can — based on their performance — is one of the best ways to heighten their motivation.

Related: Get The Most Out of Your Startup Team

Credit: Ron Volper via CNBC.com

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Dream Big! And Make it Happen!

Did you know that January 13 is National Make Your Dreams Come True Day? While there seem to be days in honor of nearly every occasion (no matter how obscure or seemingly insignificant), I think this particular one has a lot of merit. Entrepreneurs are both doers and dreamers. When they start a business, they aspire to make their dreams of controlling their own professional destiny come true.

With almost the entire year ahead of you in 2016, what better time to take action and fulfill your own small business dreams?

In striving to become a more success entrepreneur, little changes can mean a lot. The following simple habits, for example, can help expand your network, boost your credibility, and improve your performance when made a part of your daily routine:

  • Make at least one new connection every day on LinkedIn – Don’t just send a generic invitation; send a personalized invitation to open the door to dialogue. But be careful about coming across as pushy and salesy. That can be a turnoff and drive potential customers away.
  • Read (and learn from) at least one reputable, highly regarded blog – Choose blogs that will keep you in the know about trends and developments in your industry. The more you know, the more credibility you’ll have and the more trust you’ll earn.
  • Be helpful to another professional – Share an article you believe they’ll find interesting; introduce them to someone they might have an opportunity to do business with; give their business a shout out on social media…the possibilities are endless! By helping others, you’ll make them more inclined to consider you when they’re looking for the types of products and services you provide. And they’ll be more likely to refer business to you.

Related: Make The Entrepreneurial Difference

  • Proofread (and double check tone) of your emails before you hit “send” – I can’t stress this enough! Fair or not, people will judge your professionalism by how well you communicate. While an occasional error will be forgiven, blatant sloppiness in spelling, grammar, and punctuation will make you appear careless and uneducated. Review everything you write carefully to make sure it’s clear and error free. Also read your emails out loud to pick up on any unintentional harsh vibes they might convey. If you find they come across abrupt or insensitive, give them an attitude adjustment before sending them to recipients.
  • Commit to giving your clients no less than your best – This goes without saying, but I’ll say it anyway! When you put your best effort into doing work for your customers, you stand a much better chance of delighting them than you will by simply going through the motions. Bring your “A game” to every client interaction.
  • Start the day with a “can do” frame of mind – A confident state of mind empowers you to work more productively and tackle challenges with greater ease. If you don’t naturally feel that way when you begin your day, consider engaging in some positive self-talk or write down your strengths to reinforce your status as a capable and competent professional.

None of these suggestions requires a great deal of time or energy, so what are you waiting for? In the spirit of National Make Your Dreams Come True Day, put them into practice and get closer to making all of your small business dreams a reality. Stop only dreaming and start doing.

Related: Behaviors of Successful People

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Themes for eCommerce Sites

From merchant accounts to product images, product descriptions, add-on apps and possible integration with your existing website and back-end systems, there are a lot of details to stay on top of when you build an eCommerce site for your small business.

Interestingly however, one of the most critical decisions you need to make is what your new eCommerce site will look and feel like (i.e. its theme). Why is selecting a theme so important? It’s all a matter of cost.

Related: 100 Great Questions Every Entrepreneur Should Ask

The Cost of Customization

The truth is, there are many eCommerce storefronts you can add in minutes. Each of these solutions offers a selection of themes for you to use, some free and some for an additional fee (i.e. premium)

Many of these solutions enable you to customize your theme to some degree (a few even give you full control) however, doing so will take expertise and expertise costs both time and money whether you figure it out for yourself or hire an outside resource to do it for you.

If you’re watching costs, as many small businesses are, then you need to factor in the cost of customization when selecting an eCommerce solution. How? By previewing the free and premium fees as one of your selection criteria:

  • If a solution offers a theme that comes close to your design, that’s a big plus because it will mean less customization efforts.
  • If a solution does not offer a theme that comes close to your design, you will need to explore the cost of customization:
    • How hard will it be for you to learn how to customize your site yourself?
    • How much will it cost to hire an external resource to customize your site?
      • Does the solution vendor provide a list of qualified resources so you don’t have to start from scratch (a cost in terms of time and effort)?

In the end, your ecommerce sites theme is but one of the selection criteria to use when choosing an eCommerce solution, however, it’s often overlooked. Leaving “Compatible Theme” off your checklist can lead to a higher cost, in terms of time, money and frustration, down the road.

Related: Behaviors of Successful People

List of Themes for eCommerce Sites

The more themes a solution offers, or that are offered for that solution by third-parties, the better the odds that you’ll find one that comes close to your design. Start your search for an eCommerce vendor with the following list of themes for eCommerce sites that offer not only great functionality, but also a large selection of both free and premium eCommerce themes.

Shopify

Shopify offers a solid selection of free and premium themes. Its theme store offers many ways to filter and sort their selection including price and industry:

themes for ecommerce sites0

You can also find third-party Shopify themes on sites like ThemeForestTemplateMonsterApolloTheme and RoarTheme.

In addition, Shopify enables you to customize your theme thoroughly and offers a list of experts to help you do so if you chose to go that route.

Related: 10 Small Businesses You Can Start Today With Little To No Money

Bigcommerce

A robust eCommerce platform, Bigcommerce offers a number of free and premium themes today and has big plans to add many more in 2016:

themes for ecommerce sites0

Can’t with for the new themes to be released? You can find third-party themes on sites like TemplateMela and ThemeVale.

Bigcommerce enables you to customize your site’s theme completely and they provide a list of experts to help you design the site you want.

Related: The Art of the Pitch

Volusion

Another robust eCommerce solution, Volusion is perfect for those who want complete control over their site. It has a large selection of free and premium themes and offer customization services as well.

WIX

Born as a simple website creator, WIX has been offering eCommerce functionality for some time. It offers a good set of templates (i.e. themes) for you to use, all of which are included in their pricing plans and many of which were designed for very specific businesses:

themes for ecommerce sites0

WIXs customization functionality is code-free so that’s nice if you want to make changes yourself and not so nice if you want a professional to customize your site.

Related: Words To Get Your Customer’s Attention NOW!

WooCommerce for WordPress

If you want to build your eCommerce site using WordPress, then WooCommerce is a good place to start. While it doesn’t offer a large number of themes on its own, there are hundreds of third-party themes available on sites such as ThemeForest and TemplateMonster.

PrestaShop

PrestaShop is a fully functional eCommerce website solution. It offers many templates, but really shines with the number of third-party themes available on sites like Presthemes, ApolloTheme, ThemeForest and TemplateMonster.

Conclusion

There are many factors to consider when selecting an eCommerce website solution. One of the most critical for small businesses is the number of themes available to use when designing your shop.

Bottom-line: the more themes a solution offers, either itself or via third parties, the better the chance that one will come close to your design. The closer you get, the less time and money you’ll spend on customization.

Related: Improve Business Profits and Make My Business More Profitable

Credit: Matt Mansfield via Small Business Trends

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How to Get a Business Loan

Money is the lifeline of any business, so whether you’re starting a business or running an existing one, securing financing is a major factor, especially for small businesses.  Many budding entrepreneurs find the task daunting and don’t even know where to begin.

Here’s a simple yet practical guide on how to go about preparing to apply for a small business loan.

1.    What criteria do banks look for in making small business loans?

Different banks or lending institutions may have different standards, but in general, in order to consider your application for a small business loan, banks will require:

  • The loan must be for a sound business purpose. For SBA-guaranteed loans, the business must be eligible based on size, use of loan proceeds and the nature of the business (no lending, speculating, passive investment, pyramid sales, gambling, etc.)
  • You and your partner(s) are of good character, have experience and good personal and/or business credit history
  • Ability to pay back the loan- reasonable to strong collateral (personal and business assets) is very important. SBA expects the loan to be fully secured, but we will not decline a request to guaranty a loan if the only unfavorable factor is insufficient collateral. And of course, owners must have personal equity investment in the business/skin in the game.

Related: Seven Secrets of Self-Made Millionaires

2.    What information will you need?

Different lenders may require more or fewer documents, but in general, you will need:

  • Personal and business credit history
  • Personal and business financial statements for existing and startup businesses and as well as a projected financial statements
  • Strong, detailed business plan (including personal information such as bios, education, etc.)
  • Cash flow projections for at least a year, and
  • Personal guaranties from all principal owners of the business

3.    How can you set yourself up from the beginning to make the process easier? (i.e. accounting systems, etc.)

Be prepared; be thorough; be truthful.

  • Choose your lending institution carefully. Larger banks tend to shy away from small loans as they are less profitable and take the same amount of underwriting and servicing. That doesn’t mean large banks do not make small loans; it is just more difficult.
  • Approach banks or lending institutions you have worked with or are a customer of
  • Explore community banks and Credit Unions
  • Talk to a lending officer and find out exactly what documentation they require
  • Be thorough, bring everything they ask. Many loan applications are denied or face unnecessary hurdles because of incomplete applications.

Related: Hobby or Startup? Important When Filing Your Taxes

Even before you start gathering and organizing the information required by lenders to consider your application, you should educate yourself regarding business loans so you can understand and discuss intelligently with the lending officers when the time comes.

4.    What is the typical size of a small business loan?

Small businesses come in many sizes, from a start-up of a one-person company to hundreds of employees, and their financial needs vary accordingly, so “typical” also varies. That said, in the banking industry the median small business loan is about $130,000 – $140,000 with highest around $250,000. SBA small business loans range from about $5,000 (microloans) to $5 million (largest guaranteed) with the average loan around $371,000.

5.    How can you get financing to start a business since many banks want to fund growth?

Start-ups are probably the most difficult ventures when it comes to securing financing. Many start-up businesses seek financing from family, friends and credit cards.  If the credit is sound, the business plan strong and you have enough personal resources to invest and collateral to guarantee, smaller, community banks and  other community financial institutions and Credit Unions may consider lending you money.

Related: How to Name Your Business

Your best bet by far is SBA assistance. Begin by visiting SBA’s website , where you will find a wealth of information not only on how to secure a small business loan but equally importantly, other services and training opportunities to help you succeed.

6.    Are there associations that can help?

SBA works closely with a large network of partners that leverage SBA resources and are just one phone call away and ready to provide extensive help.

  • SBA District/Branch Offices– at least one in every state
  • SCORE– (approximately 300 chapters nationwide)
  • SBDCs – Small Business Development Centers; (approximately 900 locations nationwide; associated with higher education institutions (colleges and universities)
  • WBCs– Women’s Business Centers (approximately 100 educational centers nationwide)

Related: Make the Entrepreneurial Difference

Credit: Natale Goriel via SBA

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