Protecting Your Small Business

Here are several areas for you to consider to protect your business and reduce the risk of operating a small business.

1. Insurance. Many starting businesses don’t have enough insurance. You should consider liability insurance to protect yourself and your business from large claims or lawsuits. Think also about equipment insurance if you have a large investment in fixtures, equipment or inventory. Think about what all could go wrong and determine if insurance protection is sensible for your needs.

2. Company structure. Many small businesses are sole proprietorships, where the owner operates the business under his social security number. While this keeps things simple, it does introduce risk that some other business structures do not have. Limited Liability Corporations (LLCs) for example have some of the benefits of sole proprietorship with some of the personal protection of a corporation. If your business has any element of personal risk to your employees or customers, you may want to consider some kind of structure other than sole proprietorship or partnership. Although more work and cost is required to set up and maintain an LLC, the protection benefits may be to your benefit.

3. Taxes. As a business, you may be responsible to pay sales and use tax, your own self-employment (Social Security) and medicare tax, as well as payroll and other employment taxes. In many cases, you may need to file and pay taxes quarterly to avoid penalties from underpayment of Federal and other taxes. Check with an accountant for information on taxes.

4. Business Name and Trade Marks. You may have some risk of using a business name that already exists, or having someone else start a business after you with the same name. You may also have issues with your trademarks, logos, taglines or other elements of your marketing tools. At a minimum you may want to do some web searching on your business name and see if anything else is out there. You may need legal assistance to declare and protect logos, trademarks and company names.

5. Web Protection. Photographers, musicians and others who offer their products on the internet need to be careful about theft. Many people who wouldn’t steal from a grocery store will think nothing of ripping off music or images from the internet. Photographers and others who display images should consider the use of flash based websites and watermarks on images to prevent unauthorized use. Authors may want to consider only publishing excerpts of their works, and periodically checking the web for key words that appear in your works to see if they have been copied. Musicians may wish to sign up with a streaming-only service or sign up with an independent online seller to encourage legitimate purchase of your works. You may also want to consider licensing your music for royalty-free use, where the user pays considerably more for the music with the right to use it in their products.

6. Customers. Winning and keeping customers is key to the success of small businesses. Make sure that you are aware of any possibility for your customer records to be accessible to competitors. Note also that employees or contractors could become your competitor next week. You may need to have some kind of non-compete agreement that your employess or contractors sign to keep them from intruding on your customer base after your business relationship ends. If you will be using customer images or testimonials in any promotion, make sure that you have release documents signed by adults. And make sure you have effective and simple customer contracts and agreements to avoid legal and customer satisfaction problems. Note also that anything you post on your website or blog will be read by your competitors and they are free to adopt your ideas.

7. Retirement. If you depend solely on your business for your livelihood, you know how hard it is to have good benefits. There are investment plans for small business owners, and more health plans are showing up to which small business can belong.

8. Information. Make sure your website is secure, particularly any customer and payment data. Back up your business files weekly at a minimum, and store copies away from the computer. Consider service contracts for your computers and other electronic equipment. Spend some time writing down a process that you will follow to establish a working backup system. I recently lost a computer, and fortunately I had a recent backup and was able to reconstruct the core of my business in 24 hours on a new computer. I made a list of 25 actions to rebuild my system. This list kept me focused and productive.

9. Cashflow. It is tempting to get lines of credit or use your personal credit to fund a business. But you can put your entire family’s well-being at risk by extending yourself and your business. Consider running a self-funding debt-free business, where you only invest what you reap from the business. Your growth may be slowed, but the peace of mind you will get from having no business or personal debt tied up in the business is worth more than the money. There are a number of great resources for debt-free business operations. I recommend starting with Dave Ramsey.

These don’t address all of the areas of risk, but hopefully you have increased your awareness of the risks inherent in small business operations, and can make some clear actions to reduce and manage your business’ risk.

Applying Inexpensive Direct Mail Services to Boost New Small Business Sales and Profits

It’s every entrepreneur’s dream, and sometimes the prospect of starting your own business is a startling concept. Especially when the market and consumer’s overall perception of spending less is making the upstart small business owner more skeptical. And advertising with mass media is becoming more and more expensive of an option to obtain that target audience. Wouldn’t it be great if we could all just focus on the specific consumers that are interested in our product or service? That sure would be outstanding, but one can’t help but feel out of place and lost when if comes to finding the right crowd or much less obtaining addresses and phone numbers of these potential clients easily. There are always innovative solutions to find these lists, but how do we get started, and when we do, how can we market what’s on the table and spend as less money as humanly possible? Yes, if does seem a little confusing at first and a little too good to be true; there is an absolutely easy and less time consuming method to inexpensive advertising. I’ll go over the Direct Mailing services that are quickly making huge strides on even the most successful businesses. And we will also look at innovative ways to apply these to other scales of business so that way new entrepreneurs can take advantage as well.

To some, it’s not obvious by the title, but direct mailing is as simple as brushing your teeth in the morning. The great news is that you don’t have to do it everyday, every week, or even every month because the return most businesses achieve can be had every couple months. It just takes that motivation and desire to invest money to make more money. An age old adage to success and profit in today’s professional world, there’s no such thing as a free ride or a sure thing when it comes to instant success. Like most things, direct mailing starts with the initial research, a foundation and a general idea gets the ball rolling. With very little initial investment, one can easily obtain once tough to acquire mailing lists from the net in any desired quantity possible. And so you have this list, who can I refer myself to for starting a direct mail service. Most copy and print outfits have a direct mailing package that caters to all budgets; it’s just a matter of picking the right plan to help address the idea or plan you want to convey to your potential market. Your mailings can be done in a postcard layout, self-mailer/multi-page newsletter, or a simple personalized letter in a mail merge envelope layout. A postcard is quick with loads of information, a self-mailer has pages of comprehensive information that can be flipped through very easily, and a letter is more personalized and looks to contain important notices. In essence, they all make a great choice in delivering a message to a specific audience.

What a copy and print center can do from when you decide which mailer is right for the message is real simple. They can print your advertising, cleanse your address list of erroneous/bad addresses, pre-meter your mailings and send them out within a couple days of execution. One can see how easy that gets as the process begins with handing your mailing list and ad design to the print center. With little time invested on your end and a sure-fire way of grabbing customers to your business, you can easily see the benefit from direct mailing and the effect if can quickly have. Most mailing packages can be completed within a three day period and can make it’s way into the mail stream in as fast as a day. Just think and remember the types of advertising you have gotten in the mail, has any of it hooked you into interest of a product or service? I know I have bought into some of those products! Just think of the endless possibilities an average ten-dollar per person return on your direct mailing package will get you…

For more information and innovative ideas to jumpstarting your new business into a successful venture.

Avoiding the Most Common Errors of New Small Business Owners

The most common errors made by people when they are just starting out revolve around three central themes: preparation/research, time/money and customer relations.

Common Errors In Preparation/Research:

A. Going into business for the wrong reason(s): So many people go into business for themselves based on misconceptions and myths. Before you go into business for yourself you should look into the top myths of home businesses to try and avoid the common traps.

B. Not knowing enough about the business that they are going into: it is important to know about the business you are attempting to start. You should know: what qualifications/legal considerations could affect you, is there a market for your business, who is your competition, how much money can you expect to make from this business, how much money do you need to start the business, etc…

Common Errors In Time/Money:

C. Spending too money: The inclination for some new business owners is to throw money at a new business – to buy all the toys and tools they can get their hands on. This can quickly lead to a cash crunch, which in turn can lead to the failure of your business. There are many great products and services out there to help you with your small business – but it is important to manage your spending – especially during the start-up phase.

D. Spending too little money: Like many things in life – opening a business often requires some investment. The person who sets up a company and then never spends the money to promote and market it – will probably fail. The hard part is figuring out what things are important to start and grow your business and when you have reached the stage in your business when you should be spending money on the important things.

E. Bad cash budgeting: Without proper cash budgeting many small businesses not only fail but lead to personal cash flow problems and bankruptcy for the owners. Before starting a business you should perform a cash budget, which you should update periodically.

F. Errors in setting your product prices and consulting rates: If you set your rates/prices too low then you will not be able to afford to stay in business. If you set your rates/prices too high then you will not be able to get any business. Therefore it is important to do your research and set your rates and prices accordingly.

G. Not optimizing your business processes through continuous improvement: Nobody starts out in business doing things perfectly – the best way to be successful is to make sure that you not only devote time to working on your products or services but also invest the time to improve your business processes – whether it is finding a better way to find clients or a cheaper way to deliver your products or services – it is so important to always be looking for ways to do things better.

H. Working too much and burning out: Many new business owners think that you need to work around the clock in order to make your business work. The smart business owner knows that ideally your business should be making you money 24-hours a day BUT you should not have to work 24-hours a day to accomplish this.

I. Not investing enough time in your business: generally starting a business requires a lot of time and effort. Neglecting to give your new business the time it requires to build it into a legitimate business and maintain it – will quickly lead your business to enter a downward spiral.

Common Errors In Customer Relations:

J. Saying ‘yes’ to every client: some clients are just not worth the trouble, some jobs are not worth the time and some contracts are not worth the cost of the paper that they are written on. It is important to properly vet your customers before entering into a relationship with them. One bad debt or shady client could lead to the downfall of everything you’ve worked for.

K. Turning down too many jobs: While it is inadvisable to take every client and contract that comes your way – you need to balance this caution and selectiveness with a healthy understanding of which clients and contracts you need to take in order to stay afloat and grow your business. For me this has led me to develop two separate lists – the list of things I want from clients/contracts and the things I need from clients/contracts. This means that I will work for clients/accept contracts that do not have all the things I want (for example maybe it involves working long hours temporarily or traveling extensively) but I don’t take contracts that do not give me everything I need (for example if I have doubts about the integrity of the client then I will NOT take the job).

L. Trying too hard to look like a big business: This is an error on two fronts. For one thing many people go into business for themselves in order to escape the confines of the corporate world – working too hard to show yourself as a professional can put you right back where you started. The second way that this can hurt you is that it takes away the ability for you to connect with your clients honestly and openly. If you are projecting this persona then you never connect to your clients on a personal level – even worse when they find out that you are a “one-man show” they can feel misled and deceived.

M. Appearing too unprofessional: The flip side of the last point is that you cannot behave too unprofessionally. Most clients want to know you as a person but some topics should always be out of bounds. Further it is important to show your clients that you take your job seriously – things like having business cards, answering your phones professionally and delivering things on time and on budget are very important.

N. Not creating a business that adds values to your customers: if your services or products do not make your clients’ life better then they will not pay for it. Your business must be focused on adding value to your clients’ personal or professional affairs.

O. Bad customer services and after sales support: many small business owners complete a job and never look back – but great customer service and after sales support means return customers and great word-of-mouth – these are the most valuable forms of advertising out there. A flyer delivered to 1,000 may deliver a few clients who are curious about your business but someone who has dealt with you before or had you recommended to them is “pre-sold” – they already trust you and want to work with you.

The final issue to consider and one of the most common errors made by small business owners effects all three of the categories listed above.

P. Not doing things your way: people frequently get into business in order to “do things their way” and make their own decisions but quickly drop this attitude when confronted with the challenges of working for themselves. It is important to stay true to your own vision, your objectivism your values and follow your “gut” and intuition. This may be hard in the interim but it is critical to establishing a business that works for you.