Small Business Center

More and more small business is being conducted in the online world. But taking things online hasn’t changed the basics when doing business and online business isn’t necessarily immune to a tough global economic slowdown. If you are doing business online or thinking of going there, this May 5, 2010 Small Business Trends roundup contains some news and tips for you as well as other key news and information from the world of small business.

Online Marketing

Think online marketing is immune to tough economic times? Think again. As an independent study suggests, even the online B2B market may have shrunk and become more competitive…probably for the foreseeable future. On B2B Marketing

Internet marketing in three simple steps. Here is a basic overview of how to present your company along with a nifty graph. Sound Web Solutions Blog

How to track your brand online. Here’s a look at how to use Google Alerts as an important tool in brand monitoring on the Internet. The Less Annoying Blog

How to use your personal Facebook account to promote your fan page. And is it a good idea to mix business with personal when marketing with social media. Social@BloggingTracker

Business Blogging

Tips for the best business blogging. Here are five plus helpful suggestions on how to create the right blog to market your business. Les Proctor Direct

And do you really need a blog for your business at all? Chris Brogan argues that if you can you should…unless there’s something more important you could be doing. New Marketing Labs

Just because you can blog more, doesn’t mean you should. Why the blogging revolution should not lead to limitless posts. Seth Godin’s Blog

Tips and Trends

Is your business idea totally original? And how important is originality when it comes to developing a company that can be successful in the market. Here’s a discussion about how originality may not necessarily be at the top of the list of ingredients when launching a new venture. Bloggertone

Are you doing more then just selling a product? Perhaps the best businesses, the really great ones, are about building a community. Better Closer

Is it time to “reset” your business? Redefining your company doesn’t simply mean expanding your products or services to survive harsh economic times. It’s about returning to the starting point and picking a new direction. WSJ

Recycling real estate. Small business owners are creative and flexible enough to reuse many things, even the locations of other businesses that have since closed or moved on. WSJ

Policy and Politics

Are big banks keeping their promises of more small business lending? A score card for four of the nation’s leading lenders gives some of the answers. Bloomberg Businessweek

Feds failing in commitment to veteran-owned business. Washington still provides too little work more than a decade after legislation sets requirement. Small Business Trends

Will a home energy efficiency bill spell salvation to struggling small contractors? Or will this prove to be another Washington waiting game? Bloomberg Businessweek

Products and Services

Communications solution offered for small business. Microsoft, other industry leaders partnering on new service to boost communications, productivity. Small Business Trends

Small business is the true engine of economic development and job growth. And today plenty of people, either dislocated in layoffs, finding it difficult to find the right kind of employment in a tough economy or simply yearning to strike out on their own can find some difficulties…but also some opportunities. Look for both ahead in this May 6, 2010 edition of the Small Business Trends roundup.

Policy

Ongoing debt is NEVER good for growth. How is it that despite all the evidence from the credit crunch and the economic collapse that followed, we still haven’t learned that increasing debt is never a good idea? Higher taxes, inflation, zero growth etc. National Review Online

Are you ready for that IRS audit? Sure the government denies it, but small business consultant Gene Marks says he thinks it’s best to be prepared for a potential increase in the audits of small businesses. Gene is suggesting a number of tactics in the event the feds come knocking on your door. Bloomberg BusinessWeek

Trends

Plenty more potential small business owners out there. According to a recent survey, 28 percent of American employees are convinced they could do their boss’s job better than the boss. Also, employees in entrepreneurial companies seem more positive about their workplace. So what are you waiting for, America? Start a business today. Rasmussen Reports

Marketing

The ‘ideal customer” syndrome? Hey, everyone understands the need to profile that perfect customer, the person you expect to be the ideal purchaser of your product or service. But to grow your business, be sure you find who else is using it too. Flying Pig Communications

Time is definitely money. Yes, social media and other online marketing tools are free but they take time to use, time that could be spent on other aspects of your business. So, why not create a budget for your time spent marketing online. It’s an investment you should expect return on as well. M4B Marketing

Franchising the social media. It may or may not be hard to believe, but franchise businesses have been kind of slow at adapting social media in their marketing plans. Don’t worry though. According to Joel Libava, they’re catching up. Business.gov

Sales

How to kill a sale: a small business guide. Do you feel “honored” and “privileged” to have customers or do you feel you “deserve” and are “entitled” to them. The answer to this question can be critical for a small business owner and can be the difference between success and failure in your venture. The Yonatan Maisel Blog

What can Chris Brogan teach you about sales in your small business? Sales and marketing are closely related, especially in small businesses where one or two owners or employees might be handling both functions. Remember the same rules apply as in other aspects of your business, but most importantly remember to always offer your prospects value. The Sales Blog

Finance

Is it time to go local with your banking needs? Small community banks can offer better service and flexibility than their larger counterparts and can prove the perfect partner for a small business. And doesn’t it feel great to support another small community enterprise like your own? But remember. Small community banks have requirements they will expect you to meet as well. Here are some tips about how to go about it. WSJ

Operations

Think those business trips are too expensive? Think again. With a bit of creativity and some thinking ahead even a small business can save some money and do business trips on a shoestring. Stay with family instead of at a hotel. Scrutinize expenses. Try to accomplish several things with a single trip. Read the article and brainstorm for more great ideas. NYTimes.com

Shopping for an SBA loan? Some small business owners would advise you not to bother. You see, others who have gone before you have found that seeking small business financing from the U.S. Small Business Administration can be a full time job. So, before you try to figure out whether you can afford moving forward without an SBA loan, figure out whether you can afford the time away from your business needed to get one. AllBusiness

Technology upgrades on a budget. Technology can be a key tool to help your small business compete. From your Website to other tech tools, you can use it to recruit and contract talent or for many other applications. Here are some suggestions to help you implement solutions to most of your technology needs. And it won’t cost you much at all. smallbiztechnology

You want to be savvy about your social media presence. You know not to ignore your blog for Facebook, but you’re smart enough not to completely write it off either.  So each day you go in and post a Facebook status update that you hope will inspire your fans to visit your site. There’s just one problem – no one’s actually seeing your status updates.

When you post a message on Twitter, that tweet will automatically show up in the feed of those that choose to follow you. You don’t have to do anything special to make sure of that. However, Facebook works a little different. Facebook uses an algorithm called EdgeRank to decide which of your updates will be appear in a user’s News Feed. If they showed everything, you’d probably be swamped. Instead, an algorithm was created to weight the importance of certain updates. This algorithm is influenced by three things:

1. An affinity score between two users (how often they interact, view each other’s profiles)
2. The type of engagement (comment vs a like)
3. The freshness of the content.

That means if you want to make sure your audience is seeing your updates, you need to constantly be creating new content designed to get a reaction.

Here are some tips to help you do that.

Stop automating it

Each time you automate part of your Facebook involvement, you make it harder for the community to trust that you’re there to engage and talk to them. That means even if you’re updating your status daily, if the bulk of your page looks like an RSS feed, you’re going to have a difficult time establishing relationships. Users don’t want to engage with brands and businesses that aren’t really there. Stop automating your social media presence. You’re just shooting yourself in the foot.

Ask questions

We know that the more people engage with your content, the greater an ‘edge’ Facebook will give it, and the greater the chance that update will appear in your customers’ news feeds. How do you get people engaging? Ask them questions!

If you’re an entertainment Web site, ask users what they thought of Tuesday’s episode of Glee (awesome!) or Lady Gaga’s hairstyle. If you’re a local mechanic, ask where customers will be driving their cars this weekend or the lowest they remember gas ever being. The point is to ask questions as a way to drive engagement and prevent your update from becoming an also-rain that no one ever sees.

Polls

An off-shoot of asking questions is to use site polls to get user feedback. Yesterday, Tamar Weinberg blogged about how to use Facebook for business and marketing (bookmark that!) and gave the example of how Ben & Jerry’s was using polls to spur interaction. The ice cream manufacturer simply asked people how they like their ice cream and, 800+ likes and 250+ comments later, you can be sure that update appeared in users’ news feed to create top of mind and get users to visit the page. Asking people for their opinion is a great way to light a fire and make them more invested in your brand.

Ask them to ‘like’ statements they agree with

Sometimes getting someone to ‘like’ something is as easy as asking them to do it. For example, this weekend ask people to Like your status update if they had a great Mom who made a difference in their life. Or ask them to Like your update if they agree that tights are not pants. Agree or disagree-type updates tend to be flooded with not only Likes, but with comments because they force people to take sides on an issue. Even if the “issue” is debating who had the greatest Mom or how awful it is when girls go outside without pants on. Statement updates are a really fun way to lure people out from the corners they usually hide in.

Hold contests

You run a local bakery and you’re trying out new cupcake flavors – why not let your customers name them? Hold a contest via your Status Update asking people to offer up their best cupcakes names based on flavor combination. The winner of the contest receives a free batch of cupcakes and you get hit with so many Likes and comments that Facebook has no choice but to show your update on customers’ home pages. And of course, if they get involved, the update will also show on all the pages of the folks they most actively engage with, as well. What a great way to spread the word about your local bakery. I mean, who doesn’t like cupcakes?

Target them to specific groups

If we know anything about social media it’s that targeting is key. And that rule applies to your Facebook updates as well. Luckily, Facebook now gives you the ability to target a specific update to any group you want. This allows you to create more compelling updates with tighter calls to action.

For example, if you’re a local vet, you may be able to create an update that specifically targets those users with dogs and comments on the new dog park down the street. You know that these users will be more interested in the new park and therefore more likely to Like or comment on the update. Dog people also tend to hang out with other dog people, who will see they commented on the update and be encouraged to visit your page. Because you can target updates to specific friend groups, updates can be better targeted for hot buttons and interest levels. The more you can hone in on a person’s specific interests, the better you can create content they’ll want to engage with.

The worst thing you can do is dedicate time to creating a presence on Facebook that no one ever sees! When you’re creating content, making sure you’re targeting the people who are most likely to be advocates for what you’re saying and that you’re putting content out there that people will want to comment or support. The more interaction you can spur, the more eyes you’re going to get on your page.

I know I was complaining about this earlier this year but I have to say that April was really quiet, as far as small business research goes.

The good news is that there are some real gems among the few releases we had.

Entrepreneurial Geography

In light of the frequently repeated jobs-jobs-jobs mantra, a policy brief out of Harvard’s Kennedy School of Government answering the question “What Makes A City Entrepreneurial?” was both timely and intriguing.

On the surface, the answer to that question is fairly intuitive — although I’ll put it differently than the good researchers at Harvard did. The easier and cheaper it is to start and run a business, and the more room there is in the local or regional economy (less dominated by large companies that crowd out the smaller ones), the more independent small businesses there are.

That matters because these guys found that a 10% increase in average establishment size in a metropolitan area corresponded with a 7% decline in subsequent job growth due to new startups (and you’ll recall that the Kauffman Foundation has pretty well established that startups are responsible for all net new jobs).

For that matter, even new startups that are associated with older, larger, established firms don’t really help. In that situation, there was a 5% decline in employment growth due to new startups.

Conversely, they found that:

In fact, along with January temperature and share of the population with college degrees, an abundance of small, independent firms is one of the best predictors of urban growth, a fact that raises questions about the occasional local development strategy of chasing large employers with generous tax breaks. (Emphasis mine)

Since this is a policy brief, it would have been incomplete without a few policy recommendations. First on their list: lawmakers, stop with the smoke-stack chasing, they say. Those big boys “may provide an immediate headline associated with new jobs,” but for sustained job growth you do better with small business startups.

Another policy recommendation: instead of doing things that government isn’t good at (like playing venture capitalist), policy makers should focus on “quality of life policies that can attract smart, entrepreneurial people” and then, once they arrive, get out of their way.

The Real Voice of Small Business … No, Really

The National Federation of Independent Business (NFIB) came out with a rather bizarre piece of research this month in answer to the question, “Does the NFIB’s research reasonably represent the majority of small business owners?” (The paper can be downloaded with this link.)

In order to answer that question, they performed parallel surveys of their members and a group of business owners discovered by way of DUNS numbers. They found that the responses of the two groups were very close, except that, on occasion, the DUNS group was a bit more conservative. Thus, they concluded, their surveys were a valid voice of U.S. small businesses.

The only problem with that is that small businesses with DUNS numbers are not typical of the majority of U.S. small businesses either. Most microbusinesses, for example, don’t have DUNS numbers. So, given the nature of the DUNS number business population, this research hasn’t really proved anything — or at least, not to anyone who was inclined to ask the question to begin with.

Speaking personally, I don’t really know why the NFIB would care one way or another. They do good, clean small business research, and if their samples tend to better reflect the larger small businesses that would be called medium-sized businesses anywhere else in the world, that’s not a bad thing. Somebody needs to do research on them; they are seriously outnumbered by microbusinesses but they serve an important purpose for the economy, as important in their way as those feisty startups that everybody loves this week.

Microloan Under The Microscope

During the first half of last year, domestic microfinance outfits found themselves at the center of quite a bit of warm and fuzzy attention as one of only a handful of financial services providers still providing loans to small businesses.

In fact, there were some small business owners who would otherwise not have considered for a microloan (being outside their normal target market), who concluded after an experience with a microfinance organization that the typical combination of financing plus technical assistance was the best thing since sliced bread.

The Aspen Institute has been tracking outcomes for U.S. domestic microfinance efforts in an initiative called MicroTest and a recent report looks at five years’ worth of outcomes to get a bigger picture.

The picture is not what you might expect. There were not as many episodes of “build the business from scratch” stories to be had. Over the five years of data that had been collected, the most successful microloan borrowers came into the program with an existing business that was earning something along the lines of $100,000 in average annual revenues.

The five-year survival rate for these firms was 88% and earnings increased over the period (with microenterprise development organization support) to an average of about $170,000 per year. Successful microfinance clients also tended to stay small but they still tended to better-than-double the size of their workforce, on average, over the five-year period (from 2.1 workers to 5.6 workers).

Most significant from this study is its finding that success for these clients is positively related to borrowing. Getting business management training alone is not enough. Given the way that most microbusinesses are undercapitalized, that makes quite a lot of sense but is also only underscores the difficulty that microbusinesses were having with access to capital long before Wall Street crashed and burned.

Have you ever had a day when you wished you had a partner to share the ups and downs of running your own business?

With my last company, I remember having days when I felt like it was me against the world—and the world was winning. Without partners to commiserate with, I often felt alone. That is, until I set up an advisory board.

I used my advisory board as part business guide, part support group. Here are three lessons I learned for setting up an effective advisory board:

1. Pick business owners (not your accountant or attorney)

I found the most valuable advisers were other business owners who had accomplished what I was attempting to do. I still paid for the services of an accountant and attorney when I needed technical advice, but keeping these professionals out of my advisory board meetings allowed my meetings to focus on strategic advice on company building.

2. Shut up and listen

I sent my advisory board a one-page summary of the key questions I was grappling with before the meeting. That way, my advisers were “scrubbed in” beforehand, and I could spend the bulk of my time listening to their advice.

3. Report your action steps within 48 hours

Within 48 hours of a meeting, I used to send a quick email to my advisers explaining which of their ideas I planned to implement immediately and which I intended to table for another time. I wanted them to know they were having an immediate and measurable impact.

An advisory board can also play a surprising role when it comes time to sell your business.  Here’s a video of me explaining the secret to using your advisory board to get a higher valuation for your business:

How do you use your advisory board?

Have you ever encountered one of those life-altering moments that turns your business around? Sarah Shaw had one such experience when a friend introduced her to a die cutter who helped her expand her handbag business out of her dining room and into the big time. Read Sarah’s story and much more in this May 3, 2010 Small Business Trends roundup about the decisions that change everything.

Tips

67 tips that could change your business. Sarah Shaw taps her own unique small business “experts” and gets some game changing suggestions. The Entreprenette Gazette

No matter whether the recession is over or not… These tips from author Stephanie Chandler are good advice for any small business looking to transform and reposition yourself in an ever changing economy. AllBusiness

Growing your business with government contracts. This guide is designed to simplify the process of acquiring government contracts through the U.S. General Services Administration. Open Forum Innovation

One way to take your business to the next level… Find investors! This segment of MSNBC’s Your Business called “Elevator Pitch” gives a great example of how to pitch and land funding for your product or service. Open Forum Innovation

Marketing

Building a great Web presence. Here are some things you probably haven’t really thought about but should when creating an online presence for your business. Chris Brogan

Do you track your SEO? Here’s a review of AuthorityLabs, a software designed to track your keyword rankings and why it matters for your marketing efforts. MarketingProfessor

Raising the stakes. How blogging has gone from an inexpensive marketing technique to a highly competitive part of doing business online. The Yonatan Maisel Blog

So what’s the best blogging platform for your business? Here’s an overview of the big three with a recommendation from a guy who likes his choice so much he became an affiliate. ScottFox.com

Social Media Tools

Like politics, all social media is local. And localization means “adapting all of your communication to different local cultures.” Find out more about just how important this can be for your business. Cindy King

Tweet ups…and downs. Andy Hayes gives a brief tour of the microblogging platform and some tips on dos and don’ts for small business. Travel Online Partners

FB tip for entrepreneurs. Schedule your updates with easy to use tools. The Entreprenenette Gazette

Operations

Sounding off. Why speaking your mind can be a good thing and ultimately sets your business apart from the pack. Winning Workplaces

Release your inner punk rocker. Why playing it safe may be the worst possible strategy for building and running your business. Motivation 101 Blog

Are you building your business for acquisition? With a report this week that Apple Inc. is looking to buy tech startups, always remember the value of your business to larger competitors. Bloomberg Businessweek

The Book Shelf

Are you indispensable? Pierre DeBois reviews the new Seth Godin book Linchpin. We’re all looking forward to reading this! Small Business Trends

On April 28, 2010 the Women Presidents Organization and American Express OPEN announced the winners of the 50 Fastest Growing Women-Owned/Led Companies in North America.

The top winner? Argent Associates Inc., a New Jersey supply chain company that provides warehousing, logistics and product life cycle management services. President and CEO Beatriz Manetta’s 12-year old company saw gross revenues grow more than twelvefold in two years, from over $9 million in 2007 to $115 million in 2009.
Second on the list was BrightStar, a home healthcare and medical staffing company in Illinois. Third was Artech Information Systems LLC in New Jersey.

WPO’s founder and president Marsha Firestone says the group launched its first ranking three years ago in order to combat the stereotype that women-owned companies are primarily mom-and-pop operations in “retail, cookie-making or crafts.” Most of the Top 50 are business-to-business companies, often in traditionally male-dominated fields.

On average, the companies on the list had revenue growth of over $30 million between 2005 and 2009;  revenue of $45 million in 2009; and employ nearly 140 people.

What helped these women entrepreneurs reach such growth? A poll of the winners asked their reasons for success and found these factors in common:

• A commitment to high growth — 71% agreed or strongly agreed that their goal from the very beginning of their leadership of the company was to build a large company
• Inspiring leaders — 64% believe their “ability to motivate employees” is the most important characteristic for being a successful woman entrepreneur
• Surrounding yourself with a skilled team – 78% say “Hiring the right people” was the most important action that contributed to their company’s growth
• Adapting to a changing environment – The strategy most frequently chosen (64%) to meet the challenge of the current economy is to “enter new markets”. Sixty-one percent admitted current economic conditions caused them to change their business strategies

Asked their toughest current challenge, the majority (56 percent) of respondents said it is lower sales. Despite this, an astounding 96 percent expect to add employees this year. No wonder: The majority also said their favorite part of being an entrepreneur was the ability to create jobs.

Companies were ranked according to a sales growth formula that combines percentage and absolute growth. From this list, the 50 Fastest are selected. To be qualified for the ranking, businesses are required to be privately held, woman-owned/led companies in the U.S. or Canada and have reached revenue of at least $500,000 by the first week of 2005 and $2 million in 2009. Find more information at WPO’s website or American Express OPEN (note:  American Express OPEN is a sponsor of this site).