How selling a small town business is like selling a home Part 2

If you have ever sold a home, you can sell your business

Owning a business in a small town has many benefits, but one of the drawbacks is the difficulty of finding a buyer for your business when you decide it is time to move on. The pool of potential acquirers is smaller and capital for buyers is harder to find. But if you understand the process of selling a business, then you can take steps to minimize the barriers to selling your company.

Selling a home and selling a business are remarkably similar tasks. If you’ve ever felt intimidated or confused about the process of selling your company, just think of the transaction in the same way you would if you were selling your home. This is the second in a multi-part series. Read part 1 now.

Step 2: Find an agent

Once you have readied your house for sale, the next step is to find an agent to sell it. Sure, you could sell it yourself, but selling a home is a big financial transaction, and typically an agent earns his or her commission by working to market and sell your home to a broad range of potential buyers.

Selling your business can be an even larger transaction so having a broker represent you professionally is important. A brokers job is to run the selling process so you can keep focused on your business.

So how do you find a broker if your business is in a small town?

Most business brokers work from cities with a population of at least 100,000 so you will need to target your search to the closest city. Brokers work on a commission so before they will be willing to drive to your town to meet with you, they will need to know your business is large enough (and therefore their potential commission big enough) to warrant driving out to you.

What’s big enough? I spoke to Brad Bottoset the owner of Reno-based business brokerage The Liberty Group of Nevada. Brad’s firm often represents sellers from small towns and one of his latest listing is in Fallon Nevada (population: 7536).

“If you have a business with at least $50,000 in profit (after you have pulled out a fair market salary and benefits), it will be worth it for a broker to drive to your town.”

Bottoset explains, “given the recession, the number of good, profitable businesses for sale is down. Business brokers are hungry to represent good businesses and will be happy to drive to a small town to represent a profitable company”.

Next time, we’ll look at step 3 in selling a house or a business: creating the marketing materials.

John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell. Find out if you have a sellable business – and what you could get for it – by taking the 10 question Sellability Index Quiz at www.BuiltToSell.com.

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Why Small Town Small Biz Has an Advantage at Using Social Media Tools

[Liz Strauss has been a friend to Small Biz Survival for... ever, it seems like. She called us SOBs back in our very first year: 2006. We finally met in person in 2008, when we stayed at Sheila Scarborough's house together for SXSW. Liz is a mentor, a friend and a constant fountain of encouragement. -Becky]

By Liz Strauss
I grew up in a small town. My dad owned a saloon. I've been thinking a lot about his social networks and how they relate to what I do online. Truth is what my dad did with his cash register I do with my computer ... the biggest difference is the speed and reach of the Internet. And I believe that entrepreneurial view is what gives every small biz an advantage in establishing a web presence using social media tools. What I mean is that small biz entrepreneurs soon pick up that ...

• a website is a store. If we keep it organized, clean, and focused on our key business, our customers will be able to find what they're looking for in no time at all. They'll want to buy from us because it's easy and efficient.
• a blog is conversation over the counter. If we put out information that answers questions and solves problems, the people who shop in our store get interested in us and what we know. When they have a problem of their own, they'll bring it for advice. When they have a solution, they'll add to the knowledge base, and our blog will be come a meeting place like the old general store or neighborhood coffee shop.
• LinkedIn is a professional group, like the Chamber of Commerce It's our chance to connect with people who run small businesses like ours, but also who run organizations and enterprises that are very different as well. We can join groups, ask questions, share expertise when we show up.
• Facebook is the company picnic. Our families and friends are there with us. Business is more casual and more about sharing events and news.
• Twitter is the world's largest networking event. If we join the room with a friend, soon that friend will introduce us and we'll conversations with people we could never have met any other way.
  
  

Every small town entrepreneur knows that no business thrives without being part of the community that we serve. Social media tools simply stretch that community to give our business some visibility to the world. How do you use social media tools to do the same things online that you've done offline for years?

Liz Strauss is the founder of SOBCon and the author of Successful-blog.com She writes about branding, social media, and entrepreneurship.  

Photo of Liz's dad at his cash register provided by Liz.
She says he grew the mustache for the town's centennial celebration in 1953.

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So, You Are Being Audited?

First rule: Don't panic. You have probably done nothing wrong.

In the past 5 or so years, my clients have received about a dozen of those lovely letters from the IRS. There has been no change for any of them.

The IRS conducts many of what they call "letter audits." These are merely requests for clarification of some entry on the tax return. In the case of self-employed individuals, the IRS is usually looking for evidence that some 1099-MISC has been included as reported in taxable income.


Next: "They can't eat you." This means, what the IRS wants is the money.

It is a long, long way from a letter announcing an audit to you being thrown into jail for tax evasion. To avoid jail, don't EVER commit tax evasion. Report your income; report your expenses; pay your taxes. However, answer all correspondence from the IRS. Do not throw it away. Respond to the issues in any letter from the IRS.


Remember: You probably have not done anything wrong. The IRS just didn't find it (whatever "it" is) in the place they expected to find it. Explain where you reported "it." Tell the IRS where you put it or included it. Case closed.
If it comes down to a face-to-face situation (you and an IRS agent), big, big, big reminder. Listen--that is very important--listen to the question that is asked. Answer only the question that is asked. Volunteer nothing. If you have to go the the IRS office, take only the data requested in the IRS letter directing you to the IRS office.


Finally:You can ask for help.
If you can't figure out what the IRS is asking for, or if you overlooked something, or if you flat made a mistake, or if you don't feel comfortable dealing with the IRS on this close a basis, feel free to contact one of the many licensed return preparers--Enrolled Agents, Certified Public Accountants, attorneys, etc. These people are all comfortable in dealing with the IRS. The IRS does not scare them at all. They know and understand the rules of engagement. Plus whichever one of them you choose, that one is on your side.



Maesz is an Enrolled Agent.

Meet each other in the Basket

Every week, I open a new Basket. I call it the Brag Basket, but it's not really about bragging. It's about sharing. I started this so you can introduce yourself, share some good news, or congratulate a friend.

The basket is open all weekend, from March 26-28, 2010. 

Speak up and add yourself or another deserving soul in the comments. We all cheer, and everyone feels great. It lets you meet each other a bit. Reading each others' stories brings us a bit closer to being a community. 

How does it work? You write a comment on this post, email me, tweet me, or comment on this note on Facebook. You tell something great about your week, or you give applause to someone who did good stuff this week. Or you celebrate something wonderful that you tried that failed.

This is not an ad. (I delete the ads.) It's a conversation with friends. So jump in. And remember to cheer for each other.

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How selling a small town business is like selling a home Part 1

[We're starting a weekly series on selling a business in a small town, with John Warrillow, the author of Built To Sell: Turn Your Business Into One You Can Sell. John did extra research to really understand the small town perspective, and the result is an outstanding series for you. -Becky]

If you have ever sold a home, you can sell your business

Owning a business in a small town has many benefits, but one of the drawbacks is the difficulty of finding a buyer for your business when you decide it is time to move on. The pool of potential acquirers is smaller and capital for buyers is harder to find. But if you understand the process of selling a business, then you can take steps to minimize the barriers to selling your company.

Selling a home and selling a business are remarkably similar tasks. If you’ve ever felt intimidated or confused about the process of selling your company, just think of the transaction in the same way you would if you were selling your home.

Step 1: Staging

When you decide to sell a home, the first thing you do is make sure it shows well. You de-clutter cupboards, replace light bulbs, paint and perhaps rearrange some furniture to project the look or feel you think buyers want.

Staging your business is much the same:

Organize: Arrange your customer records so a prospective buyer has a sense of who your customers are, how often they buy and how much they like what you sell. If you have contracts, standardize and organize them into a neat binder or easy-to-search electronic file.

Fix what's broken: Take an “outside in” look at your business and fix whatever is obviously broken. If your receptionist uses a phone with duct tape holding the cord into the receiver, buy a new phone. If a key piece of machinery needs maintenance, have it refurbished.

De-clutter: If you rarely offer certain products or services, get them out of sight. Remove them from customer-facing communications and eliminate any signs of stuff you no longer sell. The extra clutter will dilute buyers’ attention and distract them from the core of what makes you successful.

Put on a fresh coat of paint: Take a look at your external communications—your signage, website, logo and brochure—and make sure it is all consistently branded. A buyer will likely want to tour your office/shop/plant, so make sure your physical location is smart and tidy. Give employees a half-day away from their regular tasks to de-clutter their work area.

As you’re “staging” your business, remember the old saying: people buy with emotion and justify with logic. Staging your business is about seducing as many prospective buyers as possible to fall enough in love with your business to engage in a negotiation.

Next Wednesday, we’ll look at step 2 in selling a house or a business: finding an agent.

John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell. Find out if you have a sellable business – and what you could get for it – by taking the 10 question Sellability Index Quiz at www.BuiltToSell.com.

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Startups outside of Silicon Valley

You knew that when I saw a session at SXSW on How to Be a Startup Outside of Silicon Valley, I would have to go! It was lead by Ross Kimbarovsky and Mike Samson, the founders of crowdSPRING based in Chicago.

(I owe Ross and Mike a big thank you. They did such an excellent job of presenting in the Core Conversation format, that I copied much of their approach for the Core Conversation that Liz Strauss and I lead later. Thank you, guys!)

They presented five commonalities that startups share, as a framework for the conversation. Because it was a conversation, you'll see comments and advice I caught from the audience and other participants, as well as quotes from Ross and Mike.

Startup Commonalities:
1. The idea
2. The nuts and bolts
3. Execution
4. Presence - building visibility and traction
5. Ecosystem

The Idea
Look for something that is a business, not just a technology.
The idea doesn't matter. You'll change the idea several times along the course of execution.
An Israeli entrepreneur in the audience said he went to an experienced entrepreneur as a mentor. The mentor said he couldn't tell if their idea would succeed, and anyone who said they could tell was BS-ing them.
Look for the ideas that no one else thinks makes sense.
One of the challenges is finding the people who will give you that critical feedback.
Talk with people you've worked with before.
Go to people the idea would help and get their feedback.
Connect with other startups and tech companies in your area for insight into the challenges.
Just started talking to smart people.
Found like-minded people in co-working space.


Nuts and Bolts:
Do lots of prototypes, from whiteboarding through limited function betas. Find out what users will actually do, not what they say they would do. You don't have to be in Silicon Valley to do a prototype.
Made a list of smart people who could advise them. These were also investors. They ultimately raised money from them.
If you're planning on VC funding, incorporate. LLC works if you are not seeking VC.
They took a quick survey in the room. 80 to 90% of the startups in the room did not seek or get VC funding.
Most folks in the room were from metro areas, but outside the Silicon Valley. A few here had Silicon Valley experience.
Find your attorney long before you need them.
Most business colleges have structured programs to help entrepreneurs.
Connect with local startups beyond the big market leaders.
Use meetup, linkedin groups, etc., to connect with the local entrepreneur network.
Tel Aviv, Isreal has a founders club called Tech Aviv, with hundreds of local tech founders meeting once a month.


Execution:
This includes getting offices and workspace.
Co-working and incubators were mentioned by several.
One firm got retail space by making themselves a boutique inside an established retail location.
Mike said CrowdSPRING partnered with a design development firm, and the deal included a tiny amount of office space. This worked for them for nine months.
There is a big difference between working at home, and working with other people who have ideas, connections, networks, invitations to events.

Ross said they made a mistake by not learning what they needed to know to supervise code development. At least find the right advisors, who could help you. Look for your local programming groups. Don't assume that because you are working with someone who *should* know what they are doing, that they do know what they are doing.

Britt Raybould brought up another execution issue. You may have to cut a partner off. She started out with a person who was not equally committed to success. Don't let the fear of having to replace them, make you keep them longer. There will always be someone else to partner with down the road.

When you start creating intellectual property, be sure you have the agreements in place to specify that you (the firm) own the IP.

Presence
Use social media. Use your network. Use your advisors' networks. Be involved locally, regionally in the networks.
Go with some basic public relations, press attention.
Do some public speaking.
VC's networks are excellent connectors. Ross said that crowdSPRING has been able to talk with most of the VC's in the country, without being based in Silicon Valley.
HARO: Help a Report Out is a huge daily compendium of reporter story requests.Get your startup some press by responding to the right requests.

Ecosystem:
Ross said if you want to succeed as a startup outside the existing ecosystems in Silicon Valley, etc., then you have to invest in your local ecosystem. Ross is backing up his words by running a startup bootcamp in Chicago. They also did much smaller things, like buying a ping pong table so they could invite other startups to come play.
We talked about ecosystem throughout the entire conversation. No matter where you are, you can build a startup ecosystem.

Photo of Mike and Ross leading the conversation, by Becky McCray.

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Can you teach entrepreneurship

Being a successful entrepreneur requires some particular skills. Many programs exist to teach entrepenuership in schools, in community organizations and in entrepreneurial support groups, but debate continues over whether entrepreneurship can really be taught. Are you born an entrepreneur, or can you learn to become one?

Marc Nathan (formerly of the Houston Technology Center) and I discussed this at SXSW. Marc is passionate about supporting entrepreneurs and building entrepreneurial communities. He said you really can't teach people to be entrepreneurs. In particular, you can't teach the risk assessment and risk taking. (I love getting to talk with Marc, because he never ceases to challenge my thinking.)

Later the same day, I attended a panel discussion on How to Teach Entrepreneurialism Globally. The panelists were James Barlow, Douglas Richard, Richard Titus, and Sharon Vosmek.

The panelists were mostly in the business of teaching entrepreneurship, so it's not surprising that they said that it is teachable. Oddly, they all also agreed that some parts of entrepreneurism cannot be taught.

What parts can you teach, and what can you not?

Barlow says you can create an environment where people can discover their entrepreneurialism. Then it is a matter of how we provide the tools to give them the best possible chance.

Titus says you can teach some of the core skills, but other internal drivers also play a role. Many of our best entrepreneurs have the same set of drivers that make them a rubbish employee, he said.

Vosmek said that where women succeed in high growth entrepreneurship, it was not the local culture that supported it. It was access to a global network.

One panelist (missed which one said this), said one thing that he looks at is their failure, because he wants to see that they are learning from it. However, in many countries, failure is catastrophic. A single business failure can destroy a person's reputation and their finances permanently.

An audience member drew a parallel with his toddler who refuses to try certain foods and with brilliant technical people who refuse to try being entrepreneurial. Can you teach someone to try? Titus said that while you don't have to be born an entrepreneur, some people are born not to be entrepreneurs. Some people are simply wired against it.

Barlow said that environment is also important. Extending the parallel with toddlers, Barlow said his toddler refuses to try milk at home, but readily drinks it at day care, where everyone is doing the same. He thinks that by putting people in an environment of entrepreneurialism, you can encourage them to try becoming an entrepreneur.

Vosmek said that generally, women hold themselves back as entrepreneurs because they assess their prior experience differently. They tend to discount their experience more readily than men do, thinking that it is not relevant to their entrepreneurial ideas. As a solution to that, she said that women need exposure to the opportunity, a chance to see what is part of the opportunity, and then they can assess their ability to deliver on that opportunity.

Teaching others to make entrepreneurs

Teaching angel investors and potential venture capitalists how to invest is one of the most important things you can do to promote entrepreneurship in Europe, the panel said.

I think this is highly relevant to small towns in the US as well as world wide. If your city or region is founding angel groups and venture capital funds, they can improve their chance of success by providing more training and information to those investors first.

Photo of Marc Nathan and Becky McCray taken by Wesley Faulkner.

Photo of Teaching Entrepreneurialism Globally panel by Becky McCray.

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A Saturday brag basket

Every week, I open a new Basket. I call it the Brag Basket, but it's not really about bragging. It's about sharing. I started this so you can introduce yourself, share some good news, or congratulate a friend.

The basket is open all weekend, from March 20-21, 2010. Yes, we usually do this on Friday, but I've been out of town. Now I'm back, and we're back in business!

Speak up and add yourself or another deserving soul in the comments. We all cheer, and everyone feels great. It lets you meet each other a bit. Reading each others' stories brings us a bit closer to being a community. 

How does it work? You write a comment on this post, email me, tweet me, or comment on this note on Facebook. You tell something great about your week, or you give plaudits to someone who did good stuff this week. Or you celebrate something wonderful that you tried that failed.

This is not an ad. (I delete the ads.) It's a conversation with friends. So jump in. And remember to cheer for each other.

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Solar Charger

Becky is out of town due to a family emergency. I am swirling in the depths of the tax season.

But, here's a little goody I encountered the other day. While not exactly a "how-to-run-your-business" idea, it might help your productivity and improve the quality of your working life.

Novothink has announced that its hotly anticipated Solar Surge iPod and iPhone cases have hit the market and are available for sale!

Touted as the first apple-certified solar iPod cases, ... offering an on-the go way to keep your gadgets charged. Each durable protective casing is emblazoned with a thin-film photovoltaic cell that’s capable of generating 30 minutes of 3G talk time after soaking up 2 hours of direct sunlight. Extra energy is stored in an integrated lithium ion battery, and a set of low-energy LEDs display the device’s charging status.

Both cases are available now at $79.95 for the iPhone model and $69.95 for the iPod Touch model.

If you are interested, check it out.

The 15 year overnight success story of SweetSoaps

Every so often, someone tells a story on Twitter that just needs to be captured and repeated. This is one of those. On March 2, Ellen Cagnassola, aka @SweetSoaps, suddenly started telling the story of her business.

Let me share her story with you, just the way she shared it on Twitter, 140 characters at a time. I've kind of split it into topics, but it's still a collection of Ellen's thoughts, shared spontaneously. [Remember that Twitter is a pretty informal place, so typos, abbreviations, and the occasional curse word are to be expected.]

A dream, creativity and never say die attitude.

My business was started with 0 dollars. A dream, creativity and never say die attitude.
Was started by me in my kitchen as a way 2 work from home to raise these 2 daughters http://yfrog.com/3588315899j
My oldest was 3 years old when SweetSoaps was born. I hoped that after my second child was in school my biz would b profitable.

Truth is I had no idea what I was doing when I started SweetSoaps. I used the Internet to learn everything while at home with my daughter.
Built a small web site selling one product that is no longer even made now.over time learned biz,got more creative ideas, grew slow
My hope was,be fearless,don't listen 2 nay Sayers,create things no one else could dream up,slowly it grew

During the growth life happens,tradgedy. Death of BIL,FIL, [brother in law, father in law] then in 2002 my 59 year old mother passed away.had been taking care of her
2002 was so devestating to lose my mom, we were very close. Thought about quiting soap biz.couldn't pull anymore rabbits out of hats

Then article in Womans Day mag came out. Had my products as great gift on shoestring budget. BOOM! Magic!!!!
Rabbits popping out of my magic hat.. Bunnies everywhere!
Thought someone is listening 2 me when I vocalized should I quit in 2002 after my moms death. Watching over my dad was also priority
So much multi tasking at times took a toll on me physically & mentally as I handmake all products myself! Not kidding very physical job
There were nights I was working til 3 AM then doing life all day 2 kids, grieving father, laundry etc
I stayed the course but everyday asking myself do I want to keep doing this? #normal

2003 sent a sample of my gold monogram soap to Neiman Marcus. 2 weeks later they call me #What! Yes!!!!
Timing is everything, creativity is everything, hard work is everything, #sacrifice!
I get my gold monogram soap in the Neiman Marcus Christmas catalog 2004 plus Horchow cuz they own that too! Double slam dunk!
Am I prepared 4 Neiman Marcus answer no way! Intitial order was 75 pices/sets. Catalog mailed- first week 750 pieces holy sh*t!
First thing I do, not jump up & down, I cry. Think omg what and how am I gonna do this.I call my sister @inspirationsgal she fixes me
Ask can we divide po in half 2 dates so I can do this right she agrees as I'm sure this was huge surprise 2 her as well
So I work harder than I ever have in my life. Hire 2 part timers. Get product out door on time every order. I'm in all catalogs 4 NM/horchow
For a year orders flying in thousands $$$ every week. Very little sleep hard work.
Then small biz customers are finding me as well cuz I put my website on my labels
I grow more. My monogram soap is on gift tv segments with big names like Nike that holiday season, have video soon going on my site
Phone ringing off hook
Like all good things I part ways w/ Neimans as things change & sometimes u don't know why- life goes on
I struggle to replace this loss of customer.so fantastic! Paid on time some of best most savvy buyers I've known.
I've been in sutions catalog, touchstone catalogs, many quality places. Urban Outfitters called me in 2007. Then credit crisis

My point 4 telling this very personal true story the good the bad the ugly. It's life- business is like life u must carry on no matter what
U feel alone, u r not alone. 12 years later I still ask myself everyday Ellen how bad do u want this? It's normal

Feb 2009 I use Twitter and blog for first time. Feb 2010 I have like 6000 new friends. If I need help I tweet= never alone
 2009 bacon soap & candle are born as result of my goofy off handed remark on Twitter--overwhelming response. Huge sales holidays
June 2010 issue of cosmo mag u will see my bacon soap. I again ask myself do I continue this biz? U bet your sweet ASS I am!!!
Moral of the story work harder than u ever thought u could.be kind to others.focus.family.pray. U can do it!
Do I now sit back rest on accomishments? Never, it's never enough.if u want to cut the edge Be ON IT always!

The magic of the Fleur de lis

2005 Katrina hits Nola I have one fleur de lis soap --2 weeks later getting tons of calls from Nola shop owners thinking weird?I then start adding more fleur de lis products-- more phone calls & emails. I hear stories that break my heart of loss from Nola
2005- present have grown many new designs in fleur de lis, ppl in Nola think I'm from there but am jersey girl
Grow very close to my Nola customers.went to Nola in 2007, had wonderful time& feel like I have known this place 4 ever
2009 my logo becomes the fluer de lis& I am the #1 fleur de lis in Nola and other parts of Louisiana.

The role of social media

Social media is not a fad no matter what ppl say. This is an awesome way 2 connect and learn.have met so many wonderful ppl here
@gerirosman got me in an article at The Star Ledger about using Twitter for my biz.then Verizon Fios filmed me for thier channel in NJ
Also other media I was lucky to attract like @spfpatch did a very nice price on me which is on my website they r owned by AOL
My Santas coal soap literally sold thousands !!! At Christmas and in part due to being in Real Simple Mag @realsimple big thnx!
Now my Twitter pal @producergal in Tampa wants to put me on her show when I go to Florida in 3 weeks. Looking fwd 2 meeting u!
So I'm totally addicted to Twitter. In a good way as it enriches my life by friends,biz& just fun time. Find your voice here
If u have been following me u will also know I don't market like this " hey look at this soap now buy it" #fail
What and how u connect must be natural to u or does not work
I am rarely serious so I use humor in real life so it is natural to me. Humor has pulled me out of darkest of days
Know that in the future of your bizsocial media a must, video a must formulate your ideas, practice put yourself out there!Know that I am here I will help u as best I can. Know also I won't yes u if it sucks I tell truth toughen your skin
Need help ideas I'm a tweet away. I ask nothing in return. I become more creative helping others that is my reward
Always pay it forward! #karma
You will succeed because every over night success takes 15 years! #truth 

Thank you, Ellen, for sharing the story of  Sweet Soaps. 

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Why no screening process for entrepreneurship

Our friend Liz Strauss was kind enough to introduce us to Carol Roth. She has a straightforward style that I think you'll appreciate.

By Carol Roth

If you want to become an NFL football player, first you need to be an outstanding college player, usually from a major school.  If you want to become a lawyer, first you need to have excellent undergraduate grades to be accepted into law school, survive school, then pass the “bar” exam.  How about a doctor?  Pre-med courses, med school, internships, etc.

Most careers with big risks and big financial, emotional or achievement-oriented rewards have a screening process, which identifies talent or predisposition for a given career path and also helps those participating in them learn about many aspects of the career before they make a commitment to it. Going through a screening process also ensures you are really, truly interested in that career path. Spending the time and putting forth the full effort that it takes to get through the entire screen helps you demonstrate to yourself that a particular path is something worth pursuing and that it is a good “fit” for you.


So, Here’s the Situation:
Being an entrepreneur is a risk. Starting a small business in a small town is more work than it might seem. Unlike other career paths, you actually have to put your own money at risk (as well as your time and effort) in order to become an entrepreneur.
Sometimes you need to ask not could I be an entrepreneur, but should I be an entrepreneur. 

Why Should You “Screen” Yourself?

The answer is in the statistics.  It is widely known that the majority of businesses fail within a few years. This amount is projected at up to a 90% failure rate within several years of inception. It is impossible to know the actual number, as some businesses go into bankruptcy or some type of receivership, while others close voluntarily when the owners realize they just can’t make the business work. Many more businesses survive, but don’t actually succeed; these businesses just limp along making a modest profit each year, but definitely not an amount commensurate with the effort required to keep that business open. Often, the rewards (financial or otherwise) simply don’t justify the risks.

Where Do You Fit In?

You will fall into one of two categories:

Category A - people perfectly matched for entrepreneurship.

OR

Category B -the majority of the population, who should run (not walk, run) in the other direction from owning their own business. 

Category A people will evaluate the pros and cons, the risks and rewards and ultimately, they will decide that the rewards outweigh the risks.  They will take an educated risk and move forward.  These people have stacked the odds in their favor, per se, by gaining relevant experience, shoring up their financial situation and pursuing opportunities that provide an outcome that is worthwhile for the sacrifices they will be making.

Category B people will react in one of two ways (hopefully!). Then they will either (i) generate a list of areas they need to improve upon in order to increase their prospects for business success and prepare for business ownership down the line; or (ii) seek out a path that is a better fit for them and go on to be incredibly successful in something that they are well suited to pursue, saving lots of money (at least tens to hundreds of thousands of dollars), time and effort. They may even gain a new appreciation for their current job or be invigorated to pursue the next steps in their career.

What Does It All Mean?

Information and knowledge are power.  An entrepreneurship screening process is something that has been so desperately lacking, so that the true entrepreneurs can take educated risks and that the 85-90% of the people who weren’t meant to be entrepreneurs could save their money, their time, their effort and their emotional well being and focus on excelling at something that is a perfect match for them.

How will you screen yourself to make sure that your small business can survive in your small town? 

Carol Roth writes Unsolicited Business Advice (TM) for aspiring entrepreneurs, solopreneurs and other small business owners, at CarolRoth.com. You can find her on Twitter as @caroljsroth.


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Applaud each other this weekend

Every week, I open a new Basket. I call it the Brag Basket, but it's not really about bragging. It's about sharing. I started this so you can introduce yourself, share some good news, or congratulate a friend.

The basket is open all weekend, from March 12-14, 2010. I'm away at SXSW right now (I think that was a brag!), so I need you to applaud each other.

Speak up and add yourself or another deserving soul in the comments. We all cheer, and everyone feels great. It lets you meet each other a bit. Reading each others' stories brings us a bit closer to being a community. 

How does it work? You write a comment on this post, email me, tweet me, or comment on this note on Facebook. You tell something great about your week, or you give plaudits to someone who did good stuff this week. Or you celebrate something wonderful that you tried that failed.

This is not an ad. (I delete the ads.) It's a conversation with friends. So jump in. And remember to cheer for each other.

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Small business time savers

[Denise McGill is back, with another smart guest post. Today, she wants to help you save some time in your day.]

 

How many productive hours are lost in a typical day due to lack of training, standardization or outdated materials? Utilizing time management and having the tools to be productive can cause fewer headaches for business owners and increase employee job satisfaction. Removing the roadblocks and frustrations that employees come across, makes them more efficient.

 

If you or an employee is spending longer than necessary to prepare correspondence or a spreadsheet for a meeting in the morning, then these five tips will increase performance and save time normally lost during the workday.

 

Create templates or master forms for email correspondence – This is a huge time saver whether you are a sole proprietor or a large corporation. For instance if you have a technical support department and find the same questions popping up over and over again, design a standard email response to answer those questions. Of course, you are free to tweak those emails as necessary, but a template gives a foundation to build on. A well thought out email response presents a standardized response, appears professional and eliminates spelling errors as well

 

Include an automatic email signature – Full contact information should be included with every email sent. You can easily utilize this function within your email software. Don’t make customers search for contact information.

 

Learn to use the software on your computer – Hours of productivity and time management can be lost in a day if you have employees that cannot adequately use the basic functions available on a spreadsheet or word document. Not knowing how to format or use basic formulas can have an employee laboring over a project needlessly and ultimately missing deadlines. If the budget is tight, have an internal employee teach the basics of the computer software your company uses – it is well worth the day spent to bring everyone up to speed.

 

Prepare job function manuals – Lose the tribal knowledge mentality. As employees leave the business, they take their knowledge with them. Job descriptions with step-by-step instructions on how to perform the job should be created so new employees can step right in without skipping a beat. Nothing is more frustrating to a new hire than winging it until they figure out their new job the hard way.

 

Delete or archive outdated material on the computer – Are there five versions of the same document on your computer – each with slight variations to them? Using outdated material can cause havoc internally and well as with customers. Be sure to archive or delete information that is no longer in use. It is also handy to use the “view header footer function” in your document to insert creation or revision dates on forms. This assures you are using the most current version of the document.

 

Standardized information, updated documents, and clearly defined job functions are key to a smooth running business. 

About Denise: 
Denise McGill is a freelance copywriter specializing in catalog product description, copy makeovers, web content, landing pages, promotional materials, articles and more. Visit her website at http://mcgillcopywriting.com for more information on giving your business the competitive edge.

 

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You must have imagination

A man to carry on a successful business must have imagination. He must see things as in a vision, a dream of the whole thing.

Charles M. Schwab

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Startup insights from the Entrepreneurship Conference

At the Oklahoma Entrepreneurship Conference, a new feature was the Entrepreneur 360 panel. A group of startup experts offered insight and feedback to two actual start up founders.

I won't get into the details of their businesses, but I will share a few thoughts that apply to any startup.

• Being an entrepreneur is like climbing a mountain. You get to the top and there is a another mountain, and another mountain.

• Investors don't want to give you the answers. They want to know that you have the answers.

• Presentations about your startup need to include your TEAM, not just your product and market.

• Key startup question: Why are you and your team uniquely qualified to dominate this market?

• Investors do not invest in technology; They invest in the team that knows the technology.

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What Third Tribe does for me

As I work on building the business of Small Biz Survival and Tourism Currents, I'm learning and sharing what I learn at the Third Tribe Marketing site.

Besides the interviews and other resources, there is a forum full of some of the smartest people in marketing today: Chris Brogan, Brian Clark, Sonia Simone, and many more.

I was lucky enough to spend some time with Chris when he was in Oklahoma, and we brainstormed several ways to improve Tourism Currents. Now, if we could just do that every month or so, it would be wonderful. That's why I joined Third Tribe. It's a chance to hold those brainstorming conversations not just with Chris, but with a bunch of intelligent people. 

If you are a blogger or social media person who wants to build a business, it's a good deal. It's not as much for small businesses looking to add social media.

Because I'm finding it exceptionally helpful to my business, I'm an affiliate. I believe in its worth that much. Right now, the cost to join is only $47 for a full month. To put that in perspective, you'd pay more than that for just one hour of my consulting time. And I'm far from the smartest person in the Third Tribe.

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Win an HP iPAQ Glisten phone

HP and AT&T sent me a Glisten for a review (which I tweeted). As a follow up, they want to give one to one of you.

You can read about the Glisten's technical specs from AT&T. My take? The screen is bright (like, readable in the sunlight bright), and the battery life beats the heck out of my old Moto. Even for a non-smartphone person like me, it was pretty easy to figure out. I also like the fact that it's a world phone: quad band means it can work on practically any cell network in the world. (In fact, I turned down the last phone I was offered for review because the carrier did not cover my rural corner of the world!)

Check out the sponsors' Twitter accounts: @ATTnews and @HP_PC.

Here's how you enter:

• Send a tweet to me (@beckymccray). Include the hashtags: #HP #ATT. Tell me how using the Glisten would help your small business. 

The one with the most convincing tweet wins! Mom will do the judging, and judges decisions are final. :)

Deadline: Monday, March 8, 2010, 10pm central time.


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Share some good news in the basket

Every week, I open a new Basket. I call it the Brag Basket, but it's not really about bragging. It's about sharing. I started this so you can introduce yourself, share some good news, or congratulate a friend.

The basket is open all weekend, from March 5-7, 2010.

Speak up and add yourself or another deserving soul in the comments. We all cheer, and everyone feels great. It lets you meet each other a bit. Reading each others' stories brings us a bit closer to being a community. 

How does it work? You write a comment on this post, email me, tweet me, or comment on this note on Facebook. You tell something great about your week, or you give plaudits to someone who did good stuff this week. Or you celebrate something wonderful that you tried that failed.

This is not an ad. (I delete the ads.) It's a conversation with friends. So jump in. And remember to cheer for each other.

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Are unpaid internships legal

A big discussion at ChrisBrogan.com about unpaid internships spilled over into the question of whether unpaid internships are legal in the US.

I used to work in the field of workforce development (back in the dark ages), so I wasn't afraid to head to DOL to check. Here's what my research says:
Unpaid internships would not be legal when the intern would otherwise be considered your employee.

Quoting the US Department of Labor: "labor standards will apply in any situation where an employer/ employee relationship, as defined by the Fair Labor Standards Act, exists."

How could an intern be considered an employee?
The basic issue is control. For an employee, you have the right to control the details of how the services are performed. With independent contractors, you control only the results, not the means and methods. This is why interns are more likely to be classified as employees: they are not experienced enough to take full control over their work methods.

The big question:
Are you likely to get in trouble for offering an occasional unpaid internship for a specific project, like Chris did? I doubt it. If you abused the principle with repeated offerings of multiple unpaid internships performing core duties in your business, you'd be at high risk.

For more info on employee versus independent contractor, check with the IRS.

UPDATE: [4/3/2010]
In a New York Times story on internships, more details about internship regulations were provided.

“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the [federal Labor Department] wage and hour division.

Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.
....
Many employers say the Labor Department’s six criteria need updating because they are based on a Supreme Court decision from 1947, when many apprenticeships were for blue-collar production work.

I think it's clear that almost all unpaid internships are not legal in the United States, despite the fact that some unpaid internships are valuable opportunities.

Photo by Becky McCray.

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Cardboard wine racks and profitability

This is a picture of some of the wine racks in the stock room of our liquor store.

You can actually buy specially designed metal shelving and wine racks for liquor store stock rooms. Instead, my mother scrounged up some book cases. Then she used cardboard wine boxes and their dividers to make perfectly functional wine racks. It's in the backroom, so appearance isn't critical.

This may be typical Okie engineering, or it may be small town creativity. Maybe Mom was just too cheap to shell out for the fancy stuff.
But....
This kind of thinking kept her in business, and profitable, for over a decade. I think other business people have a lot to learn from my mom.

We're still using these shelves, of course.  Can I offer you a nice chardonnay?

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Manage your business or it will manage you

Keys to Your Business Managing You

1. Desperately say "yes" to every opportunity.
2. Assume everybody is doing what you told them to do.
3. Assume everybody understood what you said.
4. Procrastinate.
5. Set yourself up as the only person that knows how to do it.
6. Constantly allow exceptions to the rules.

That list comes from David Gaither of HSPG & Assoc. CPAs. At the Oklahoma Entrepreneurship Conference last week, he presented a great session, "Manage Your Business... Don't Let It Manage You." 

His central message was to find the right people to help you in your business. No matter how small or large your business is, you need to build a team of people you can trust and you can count on. Seek people who are honest and capable, willing to ask questions, and driven to succeed, Gaither said.

Small town people are good people
"I grew up in Henryetta," Gaither said. "We have a lot of success in hiring people who came from rural Oklahoma and came through college. Because to them, they are in the big time."

Empowerment is much more than just giving people the tools they need. It's giving them them the responsiblity, accountability and constantly following up, Gaither said.


Finding service providers
You need a really good tax accountant, Gaither said. In his opinion, they give you the most breadth of experience for the least amount of money. They process things through a filter of how it will work on a tax return.

"When it comes to something to outsource in your business, you need to outsource your payroll," Gaither said.

Payroll requirements are always changing, including frequent rule and rate changes. Errors in payroll tax, especially in withholding tax, are extremely serious matters with the IRS, Gaither said.

Unless you have a really unusual situation, you don't need an attorney to write contracts, Gaither said. Your accountant can connect you with someone who has a similar contract that you can plagarize, he said.

He has an engagement letter with every single client. It outlines what work will be done, and what the cost will be. It takes a lot of finger pointing out of future discussions, he said.

IT is another good outsource, Gaither said. Find a good, knowledgeable tech person who knows your network. It's expensive per hour, but worth it. Computer problems absolutely wear you slick, he said.

Get to know a banker long before you need to borrow. They need to know your story. They need to know you. Start with where you do your business banking. Talk to their business banker. Ask them about setting up a line of credit, before you need it, Gaither said.

Accounting
Part time stay at home mom CPAs are the best and brightest, a bargain, and interested in working 25 hours a week, Gaither said. They are a good fit for small businesses. How do you find them? You talk to everybody you know.

You will outgrow your initial accounting setup, whether it's a person or a software package, Gaither said. You will have to get over that and upgrade when you grow.

QuickBooks is easy, has lots of qualified users. He said he recommends it to all his small business clients.

Managing expectations
Any new business starts out with you personally spending a lot of time planning, setting goals, and communicating your direction for the business.

Desperately saying yes to every opportunity is one symptom of your business managing you, Gaither said. You may have to do that at the start, but then it becomes a trait. You get to a place where you don't have to say yes to everything that comes in the door, if it's not in your core competency. You have to develop the ability to evaluate every opportunity. Be willing to say no. People will respect that. They aren't not going to call you next time. If you say yes to every opportunity, your business will run your life.

Chime in
Where do you agree, or disagree, with Gaither?

Photo of the business owner repairing bar stools himself at Carl's Bar in Hutchinson, KS.

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How to track your daily marketing activity

When it's just you in the business, or you're the boss, no one makes you keep hammering away at what needs to be done except you. Marketing may be the most important activity in your business, but it's also hard to be consistent, with everything else you have to do.

Here is one system you can use to keep yourself on track with marketing activity. Start with your revenue goal.

• Divide the total dollar goal into pieces. If the goal is $1000 in the next month, that means ten ads at $100. Or two consulting jobs at $500. Or 100 sales of a $10 item. Figure out what you have to sell in your business to reach your total dollar goal.
• Estimate how many contacts you need to make, on average, to make those sales. A common ratio I've heard is six contacts for one sale. So 60 contacts to sell ten ads. If you've blocked out five days to work on marketing this month, that's 12 calls per day. When you get to this point, you may find that you need to adjust the dollar goals based on a realistic level of activity. Twelve sounds pretty do-able, but 120 means you need to go back and re-evaluate your goal.
• Use the daily goal to make sure you follow through on the marketing. You can track this on your work calendar or a separate sheet or card. You need to make 12 calls, so count your calls until you reach 12.

Here's an old telephone sales activity tracking system you can adapt to track your own activity.

• Your goal for today is 12 calls.
• Make 20 empty spaces: o o o o o o o o o o o o o o o o o o o o.
• Dial the first potential customer, and fill in the dot.
• If you just leave a message, put an M.
• When you speak to the actual person, draw a slash through your dot: /
• When the customer commits to the next step (appointment, sale, further contact, etc.), circle the dot: O

When you have 12 slashes for 12 contacts, you are finished for today!

To make it easy to follow through consistently, I put the o's on a mailing label template, and printed them out. Then I stuck one to each day on my paper datebook.

"When nothing seems to help, I look at a stonecutter hammering away at his rock, perhaps 100 times without as much as a crack showing in it. Yet, at the 101st blow it will split in two, and I know it was not that last blow that did it, but all that had gone before." -Jacob A. Riis

How do you make sure you are consistent in your marketing activity? 

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