ANSWERS TO YOUR SMALL BUSINESS QUESTIONS FROM A SMALL BUSINESS EXPERT
Q:I have begun working to fill the room in Vegas...and man-oh-man....this is a daunting task. Do you have advice of how I could get 25-35 women business owners of $100K businesses to an event? The event is August 24 -25 and I know I need to HUSTLE. You spoke a bit about buying a list and working the phones. Any suggestion on where to buy the list?— Eli
A: Are you a member of NAWBO, the National Association of Women Business Owners? Partnering with local organizations is a useful step and that could include UNLV, University of Nevada at Las Vegas. Since you probably want to appeal to local and out of town folks, lists can come in handy. They can cost from $2K to $6K and mailing your very strong offer to them between four and eight times is often what it takes to drive the registration process.
Nelson Davis, Small Business Expert
Q: I wanted to ask your advice on an upcoming add for a local publication. I get 25 words to "sell" myself and hopefully attract clients. I have challenges getting to the point, as you know. Do you have any advice as to how to capture the attention of readers and what business that do well put in their adds? Jennifer, Los Angeles
A: For doing it yourself, my advice is to first write out several short advertisements. Each one must make a strong offer of whatever you feel is your USP, the unique selling proposition. It may also contain a call to action. Having a look at the late night infomercials can offer you some tips. Here’s a simple example. “You can loose ten pounds in thirty days with our Tiny Waist program. The price is just $49.95 if you call within the next half hour.” That message tells you what it is, the result you can expect and calls upon you to act in less than 30 minutes.
When you’ve written out two or three ads, share them with as many potential customers as you can and listen carefully to their feedback. Ideally, those reactions will help you decide which has the strongest impact on people who see or hear it and how to fine tune your message. Also, there are lots of books to help you understand more about successful advertising and various ads can be seen online.
Nelson Davis, Small Business Expert
Q: "If you're really passionate about what you do, but it's not going to make you a lot of money, should you still do it?"
A: What a great question! It seems like just about everyone who has ever addressed a graduating class of high school or college seniors has said "Do what you love, the money will follow."
Inspiring. But it is true? Couldn't you do what you truly care about and very well go broke, as the question above (recently sent from one of our readers) implies?
Based on the research we did for our book, we're convinced that when you're heading into the unknown, desire is all-important. You simply want to be doing something that you love, or something that is logically going to lead to something you love, in order to do your best work. That desire will make you more creative and more resourceful, and will help you get further faster.
And, it will help you persist. When you're trying something that's never been attempted before — beginning an unusual project at work, or trying to get a new business off the ground — you're going to face a lot of obstacles. You don't want to be giving up the first time you encounter one.
But, let's be real. None of this guarantees wealth, or even financial success.
A friend of ours was hanging out at a bar with a few fellow professional musicians after a recording session, talking admiringly about another musician they all know. One of them commented on how fortunate it was for this musician that his music was commercial. In those four words, you will find an enormous truth. We all have our music and there is no guarantee that anyone will buy it. Absolutely none. These are two entirely separate things.
So this reader question attacks us straight on and says, in essence, "I have the desire, but I am pretty certain it's not going to lead anywhere that's monetarily profitable. Now what? Should I still go ahead?"
Of course you should.
Now let's qualify the answer a bit:
If you can't afford to do the thing you're passionate about — for example, if you do it, you won't be able to feed your family, or it would keep you from graduating college (which is something you think is more important than whatever you're passionate about) — then no, you'd better not bet your economic life on it. A basic principle concerning how you should deal with an unknown future is that every small smart step you take should leave you alive to take the next step. So, make sure you attend to your lower order Maslow needs of food and shelter and the like.
But even this doesn't mean you can't work on your passion a little — even if it's just for 15 minutes a day.
And you should!
Research (such as The Power of Small Wins that ran in Harvard Business Review May, 2011) shows that people who make progress every day toward something they care about report being satisfied and fulfilled.
We're in favor of people being happy. And we're also in favor of provoking people into pursuing happiness. The nice thing about this reader's question is that it might get people who have — by any objective standard — more than enough money to reconsider whether they want to continue to do things that are not making them happy, just because it'll make them more money. More often than not, these people say, "Once I get enough money, I'll do what I really want to do. I won't worry about the money." But somehow, they never get to that point. Time is finite. The question might be enough to get you to reconsider how you're spending it.
And of course, the assumption embedded in the question could be wrong. You might, indeed, end up making money if you engage in your passion, even though you currently think you won't. Remember, the future is unknown. Who knows what people will buy, or what you might invent after your very next act. At any moment in time, you are only one thought away from an insight — an insight that can change everything.
As we said in our previous post, when you are facing the unknown, they only way to know anything for sure is to act. When you are dealing with uncertainty — and whether you are going to make any money from your passion at this point is definitely an uncertainty — you act. You don't think about what might happen, or try to predict the outcome, or plan for every contingency. You take a small step toward making it a reality, and you see what happens.
Who knows? Even the smallest step can change everything.
So take those small steps. You might discover that your passion does, in fact, make you money. After all, who knew you could make huge amounts of money figuring out a way to connect all your friends (Facebook) or make a better map (pick your favorite GPS tool).
Even if you don't, you want to spend part of your day doing at least one thing that's making you happy. Otherwise, something is terribly wrong.
Q: I'm looking to get a job with a small high-tech business in the San Diego area. Several small businesses are jointly putting on a job fair. How can I best capitalize on this? — Ryan
A: Ryan, this appears to be a job fair for some fairly new startup companies to go fishing in a pond of tech oriented job seekers. I think it is very clever on the part of the new business owners to collaborate in finding good prospective employees. I advise you to prepare for this like you are the owner of your own business because in reality that is what you are. Tips: Find out the names of the companies and their categories of business so that you can do preliminary research. To work the room effectively, you need to develop your own personal "elevator pitch" so that you can explain what you do in 60-seconds or less. If alcohol is being served, have soft drinks instead so that your focus remains sharp for the entire event. Before going, have some inexpensive business cards printed (very cheap online) with just your name, e-mail and perhaps a phone number. Don't try to talk to everyone, select those companies or people that excite you. Ask lots of questions of those people that you do speak with. Offer to help them if you can. Your goal is to be memorable to the people you interact with and the best way for them to remember you is as a person who is interested in them and who is oriented toward helping them build the young business.
Wishing you success in business and in life.
Nelson Davis, Small Business Expert
Q: My business has strong prospects for growth but I am struggling to take the business into the next level. I need some help, but need one of my many proposals to get approved so I have funding to work with. - Jesse G.
A: Jesse, knowing that you can't do it all alone but you don't have the money to hire a full time employee is a common problem, but it is solvable. It was one that I had and here is what worked for me after too many fourteen hour days! I hired an administrative assistant two days per week on an hourly basis. Since job #1 for me was handling customers and prospects, her sixteen hours per week was all about administrative tasks and systems. Opening the mail, ordering supplies, responding to miscellaneous phone calls, establishing a usable filing system etc. is what she dealt with. This gave me at least twelve more hours each week to chase sponsors for the TV show and actually produce the product. I was juggling the dollars but had to take a leap. My energy level jumped 20% by giving up some of the "adminis-trivia." When the money came in, I increased her to three days and then five, making her my first full time employee.
Nelson Davis, Small Business Expert
Q: I am part of a small family-owned drywall contracting company, with previous experience in estimating potential projects. My father is the other half of the company, as he has experience in field work. We have experienced some success already, but I’m looking to create structure in our company and lack the experience to do so. What are the steps that I need to take to create clear-cut roles that I should follow? Do my dad and I need to assign responsibilities that we each stick to?
A: Defining roles is always difficult, and is even more challenging when the other party is a family member. Your general goal should be to establish clear spheres of responsibility - and then stay out of each other’s area of expertise.
Gary Naumann, lecturer in entrepreneurship at the Carey School of Business Arizona State University, recommends sorting the critical tasks of the company into functional areas, such as operations, sales, office administration, finance and accounting. Then decide which of you is best suited to overseeing each area.
He suggests dividing and conquering so that you don’t double-dip on every little issue. “In a small but growing business, there is no time for you to confer with each other about all the details of your respective areas of responsibility,” he says. “My experience is that most of what each of you does in those areas should be done independently, thereby reserving the discussion time for those critical issues that require consultation.”
This will become even more essential as you add employees - those who work for you will want to know what is going on and who to consult about various tasks. One tactic Naumann suggests is a “Who Does What” outline that you can hand out to your associates.
“This should not be limited to just the two of you,” he says. “Rather, it should encompass all the key areas of your company so you are able to comfortably delegate certain tasks and everyone in the company knows who the ‘go to’ person is.” This will also help you and your father concentrate on your key tasks.
Of course, with the division of responsibilities will come the challenge of remuneration. Formalizing pay arrangements is a key part of creating an official business structure.
“Compensation of family members is much less likely to be based on any objective criteria,” says Allen Fishman, author of 9 Elements of Family Business Success. “The sooner the family business leader takes control of creating objective standards for dealing with compensation issues, the more likely it is the businesses will survive and flourish into succeeding generations of leadership.”
Fishman recommends putting your policy into writing. “A clearly stated compensation policy often prevents conflict and is the best way to break through the emotional barriers that commonly come into play when discussing compensation,” he says in his book. “It would be best if the family business developed its employee compensation policies to approximate the industry levels to some degree. It’s not at all uncommon for family businesses to employ family members for more than the going rate.”
If your company doesn’t pay salaries and instead splits profits, compensation is generally based on ownership stakes. “From a tax standpoint, you can’t start a business without a document that shows ownership,” Fishman says. “If, for instance, one person runs a warehouse while another runs office operations, the payouts may be the same if they each own 50% of the company - even though their skill sets have different market value.”
Fishman warns that in a very small business, such as a father-son operation, the issue of formalizing ownership stakes often isn’t discussed unless there is a problem - when it’s too late.
“Don’t wait for a feeling of unfairness to arise before you sit down and talk,” he recommends.
“Documenting your visions for the company and how it should be run will help to ensure the company doesn’t break apart in the future.”
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