Monday, August 15, 2011

12 Most Common Mistakes of Small Business

Many of us face challenging economic times with uncertain tax and new mandates that causes business planning challenges. It’s been my experience that success in small business has as much to do with avoiding operational mistakes as it does with doing the overall economic environment. With many small businesses not making it during the past several years, I want to highlight 12 common mistakes made by business owners so that you can avoid them.

1. Focus

A common mistake is lack of focus. Small businesses often do not have the resources to go after multiple markets simultaneously, and if they try, their marketing message is sure to be muddled. Specialization simplifies your life and maximizes your profits. Focus helps you define your customer and minimize competition.

2. No Tracking

Many small businesses do not routinely monitor key business indicators and process measures. This reduces the ability to more timely respond to business issues or to identify problems in the making. Track your lead generation activities as well as your production or service processes.

3. Selling

Another mistake is not spending enough time selling. This is particularly a problem for sole practitioners without a dedicated sales person. If you are a one-person shop, spend at least 25 percent of your time selling. Your business cannot grow without new customers. It’s tough, but you must make the effort to contact new prospects each week. You need to keep the future funnel filled while working on your existing projects.

4. Planning

Without a plan you can’t know where you are going. You normally wouldn’t take a vacation without a plan, so why would try to run something as important or complex as a business without a plan? The plan should be where you document the reasons for your major decisions. You then need to monitor the plan to understand deviations. There is a reason no bank will loan money to persons without a business plan. People who plan are generally more successful.

5. Pricing

Pricing is a key. I see too much discounting. Why sell at a price lower than you have to? Charge for your product or service based upon value to the customer rather than what you think they are willing to pay. Target the customers who can pay for your value. Understand your competition’s pricing put don’t get into a pricing war. A key is to deliver a quality product and service at a reasonable price.

6. Customer

The next mistake is not clearly defining your customer. Without a clear definition of your customer, you cannot be focused, and with a clear definition of your customer, you are much more likely to be focused. Describe your ideal customer profile in specific words.

7. Poor Budgeting

Many small businesses do not create a budget to set goals or plan key expenses. The key is to plan for profit and make sure your revenues and expenses are aligned to support that goal. Too many times, I see profit as a “leftover” versus a specific goal.

8. Repeat Business

Another mistake is not going after repeat business. The best customer is the repeat customer, and many studies show the repeat customer is the most profitable customer. Attracting new customers is expensive and can be time consuming, so avoid this mistake. Maintain a database of your customer’s likes and dislikes and figure out how to sell more products and services to them. Also thank them and follow up in a non-sales mode. Your social media network would be one great tool for this follow up and to stay top on mind.

9. Employees

The first employee mistake is not hiring employees to free you up to do what you do best. Your greatest constraint is time, and the best way to leverage your time is to hire employees and delegate work that can be performed by others. Some of these tasks could be virtual assistant part time positions which is a growing field. Take time to hire the right employee. Mistakes here will cost you dearly, both emotionally and financially. And once you hire someone, clearly define job responsibilities. Write job descriptions beginning with the first employee you hire. You do not want finger pointing or misaligned priorities.

10. Bookkeeping

Financial records provide you with the information you need to manage your business. Data, in particular financial data, should drive your decision making. Operating a business without financial records is like driving a car without a dashboard. Don’t do it. There are a variety of low cost options out there to help you.

11. Technology

Next to employees, your best productivity boost will come from maximizing technology. If you are weak in the areas of word processing, spreadsheets, bookkeeping, and utilizing Social Media tools, take classes. You can outsource these tasks, but computer skills are becoming basic requirements for today’s successful business owners. If you run a retail operation, a point-of-sale system is essential, and a computerized customer database is key for maximizing repeat business and identifying your ideal customer. More importantly, a business without a web presence is potentially losing a lot of leads.

12. Capitalization

Not having enough capital – cash in the bank to support yourself and to get the business off the ground. Your car and mortgage/rental payments still have to be paid. Once operational, sufficient working capital is needed when customers are slow to pay or when you have the dry spells. Working capital becomes even more important to support growth. You don’t want to outgrow your working capital capacity.
What other common issues have you seen
Featured image courtesy of  licensed via creative commons.

Thursday, June 9, 2011

You Never Know Where Your Tweet Will Go #SlumberParty

Several weeks ago I was participating in Dabney Porte's Friday evening #Slumberparty on Twitter.  The sponsor was Michelle Bucaro @1DeVineGal  who markets Lip Shimmers.  This chat has a lot of virtual slumber party engagement activities such as pillow fights, Twister, silly string, DJ music, and generally a scavenger hunt involving the sponsor's products on the Internet.  I did not participate due to personal usage of lip gloss, but I do enjoy the social engagement and fun in the event.

As a quick background, Dabney provides a comprehensive 3 day awareness campaign that generates Twitter Follows, Facebook Likes, and Website registrations for SlumberParty sponsors.  The sponsor is trained on Social Media and has great engagement with an audience that generates large Twitter impressions.  From what I have observed, this engagement continues weeks after the slumber party is over providing additional economic benefits. The sponsor receives a comprehensive analysis package after the event ends.

Tweeting bird, derived from the initial 't' of...Image via Wikipedia
What is interesting about this specific Twitter Chat session is a tweet made by Miles Austin.  I wish I saved the tweet, but what I recall was that "I am giving a presentation and all I see is @DabneyPorte  talking about lip shimmers".  It struck me that Miles, was likely making a presentation that was supported with a big screen.  I responded back with several tweets about Social Media ROI and what this Twitter party was about.

I followed up with Miles after the chat session to learn more about what he was doing.  Miles hosts a "Master Mind" group of executives that meets monthly on Friday evenings. They generally meet in a private room in a restaurant or bar for social networking and learning.  He provides a forum where executives can comfortably learn about social media, social media metrics, and social media tools in a safe environment where they can ask any question.  This helps the executives to discuss Social Media in their companies.  

During this session, Miles was demonstrating Tweetchat as a tool for twitter and he recalled that Dabney Porte's #SlumberParty was the happening event on Friday nights.  So he entered SlumberParty as the hashtag to demonstrate how to use the tool.  He went on to his next topic, but SlumberParty was streaming away on the big screen behind him while he was talking.  He noticed some giggling several minutes later.  After checking to make sure his fly wasn't down, he asked the group what they were laughing about and they pointed to the flying SlumberParty chatter.  Miles turned around, saw the stream and entered his tweet.  He explained how this was creative marketing on Twitter generating economic returns.  While he was talking on this, I was tweeting away on the economic benefits to the sponsors.  So his audience received a double presentation on Social Media Return on Relationships.  It was as if I was in the room tweeting his presentation.

The bottom line, is that you never know where your tweet will go.

You can read more about #SlumberParty written by Jean Parks @GeekBabe on her blog post: Dabney Porte brings you a Twitter Slumber Party — The Shoppinqueen and check out Miles Austin's "Fill The Funnel" here where he provides great insight on a lot of social media tools.

If you haven't done so, please give #SlumberParty a try.  The actual party starts Friday at 10:00pm ET and lasts for an hour.  This party does have a lot of pre and post party activities that are just as engaging.  The Twitter stream moves so fast a hashtag monitoring tool like Tweetchat is recommended.  You can learn about Slumber Party events on Facebook.
Enhanced by Zemanta

#EAv Empire Avenue - Scores LinkedIn

Image representing LinkedIn as depicted in Cru...Image via CrunchBase
Did you know that Empire Avenue provides LinkedIn network scores? As of the date of this post, Klout and Peer Index do not have LinkedIn factored into their influence scores while Empire Avenue does have a network score for LinkedIn.  Klout states that they are working on it. (On June 14, 2011 after this post was written Klout implemented LinkedIn Scoring)

Empire Avenue states that Connections, Recommendations, and Activity are factored into the Linkedin Score.  Connections and Recommendations are easy metrics to derive once the LinkedIn account is hooked up in Empire Avenue.  Activity measurements can be a challenge given the nature of Linkedin.  Activity that shows up on a status update timeline are:  Status Updates, Discussions, Shares, Polls, Group Activity, Question and Answers.  There are also secondary activity measures such as likes and responses made to your questions and discussions.  I started looking at the LinkedIn Scores when I noticed that Stacy Zapar, the #1 connected woman on Linkedin had an EAv LinkedIn network score of 68 and she is one that engages.  At the time, I was scored a 32 and wondered what the highest EAv LinkedIn scores profiles looked like.  Empire Avenue provides the capability to evaluate scores across a variety of dimensions including networks.

Comparison Chart
The following shows the Empire Avenue LinkedIn network scores and LinkedIn metrics as of 6/2/2011.

                           EAv Score   Connections    Recommendations   Activity
Steve Cassady           34              1,200                  10                  1 Day
Stacy Zapar               68            30,000                   11                  1 Day          
Jason R. Martin          75            16,240                   30                 .1 Day
Viveka von Rosen       82            16,000                   61                  1 Day
Neal Schaffer              88            26,000*                 55                  1 Day
Lewis Howes              91            20,000*                147                 .25 Day
Laura Levitan              95           11,000*                 226                   None
Shally Steckerl          100           30,000                  173                 .33 Day

Data Methodology
Linkedin connection counts were provided to me by the users.  For those accounts* that I didn't have the actual connection count, I derived the connection counts from relative positioning of LION accounts that state connections counts in geographic searches sorted in connection order.  Recommendations are listed in the Summary section of the profile.  I used LinkedIn signal to determine LinkedIn network activity over a two week period to be consistent with Empire Avenues two week activity averaging methodology.  I removed Twitter based status updates from the LinkedIn activity since the scoring systems should be removing those duplicitous activity measures.

Bottom Line, is that it appears that the highest Linkedin scores are those users that have recommendation accounts in the mid 100's and above. The highest is Shally Steckerl who is connection count capped out with 173 recommendations. The second highest score is Laura Levitan with over 220 recommendations, but with "only" approximately 11,000 connections. Neither of the two are "active" linkedin users during the past two weeks (being consistent with Empire Avenue's measurement period) as measured by Linkedin Status, Sharing, and Group activity found through LinkedIn Signal. Although their usage may be more like Stacy's for recruiting searches, those activities aren't as "measureable"

It looks like that every 5 recommendations gets you "1" change in the LinkedIn network score.  From a broadness of LinkedIn network scoring, I think Stacy Zapar's engagement with her 30,000 base should carry more weight than Laura Levitan's smaller base and less activity even with higher recommendations.

I have a better appreciation of why it may be taking Klout so long to roll out their LinkedIn logic especially with the challenges of LinkedIn's API and variety of ways to use it.  How do you factor in poll activity and responses, responses to questions, likes of your shares, comments on discussions you initiated, etc. 

My current thinking is that there should be a minimum level of recommendations for a decent LinkedIn network score as a sign of connection validation, but there should be some level where recommendations have diminishing returns.  Especially in the past there have been "Top Recommended Contests" on Linkedin and the range of recommendations from being "substantial involvement" to more "thanks for answering my questions, you must be smart".  I wouldn't go out to get recommendations just to raise my #EAv stock price since that could dilute the personal branding and the quality of your profile on LinkedIn.  You should focus on real authentic recommendations on LInkedIn that have real meaning to clients or prospective employers.

As @Dups, cofounder of #EAv states "We do say we talk about Network Value, and in fact at Empire Avenue, the scores are the algorithmic measurable layer that any API gives us which is fraught with human assumptions, algorithmic issues and technical nightmares, but they do add value, they do give an idea of what's happening in a network."

What do you think about the weight of recommendations in LinkedIn network Empire Avenue scoring?

Enhanced by Zemanta

Tuesday, May 24, 2011

Empire Avenue Game, Fad, or Something Else

What is Empire Avenue?  Is it game, a fad, or something else?  EA promotes themselves as the Social Media Exchange, where you can invest virtual currency in any social media profile by buying their shares, meet new people, unlock achievement badges, and earn virtual cash by being active and social online.

 I joined Empire Avenue over a week ago on May 14 to see what is was about after seeing some tweets about it on Twitter @EmpireAve.  I have also had good discussions with some of my Twitter friends on the merits of Empire Avenue.   With my financial and analytical background, I look at the framework of social media activities as needing to add economic value to ones business model and there is a lot of data out in the "Internet cloud"and many algorithm's trying to measure it.  Empire Avenue does it differently than @PeerIndex and @Klout, by adding an element of fun and Game Theory.

When you join Empire Avenue, you can connect your Social Networking accounts, and they will score activity and engagement in each account and give you a virtual share price.  Depending on the social account, it can take up to five days for your score to calibrate.  The connections you make on Empire Avenue create "value-based" relationships, a deeper relationship than simply "following" someone, in a completely less intrusive context than becoming "friends."   Some of them have now followed me into various Twitter Chat sessions.  Every day, you're on Twitter, talking to friends on Facebook, uploading videos or photos, and writing blog posts. Just for doing your normal activity, you'll earn Eaves –  virtual currency – and  Empire Avenue will give some more virtual cash to your shareholders. 

The stock price structure of Empire Avenue adds a human value based perspective to your social media activity.  The value based approach also encourages you to check out your investments on their multiple social media platforms.  In Game Theory it has shown that People use virtual currency (Eav's in the case of Emprie Avenue) as real money.

While People will utilize Empire Avenue as a game to get the highest market value, they will have to engage in social media activities to drive value.  Trick, invite your heavy social media friends to join early and buy early before their activity is fully factored into the system.  While I may have missed the LinkedIn IPO on its first day, I did miss the investment in Stacy Zapar,@StacyZapar Linkedin's #1 most connected woman and Viveka von Rosen @linkedinexpert, a leading trainer on LinkedIn debut's on Empire Avenue.   This was Legal insider trading.

The key metric on Empire Avenue is your stock price.  Your stock price is influenced by your social media activity, your Empire Avenue activity and buy/sell activity in your stock by your fellow Empire Avenue participants.   Empire Avenue is primarily for those that already have a decent amount of involvement in social media. If you’re just getting started, this isn’t the place to focus until you have built up your other social media platform such as Twitter, Facebook, Flickr, LinkedIn, Blogs, and YouTube.
Players try to increase the value of their profile and also invest in other individuals to earn a return on their virtual dollars, or Eavs, in the game. There are many ways to increase your value and participate in the game. There is a certain appeal to the entire game aspect, trying to get your stock price to rise and betting on those that you know will do well, but there’s a giant time drain factor that can be costly if there’s no real value or return. One of the first things you might notice when you start to participate are the silly things that people are doing to try to get your buy their stock – don’t let the silliness factor be a complete turnoff.  Empire Avenue even places those pitches in a "Buy Me Spam" chat box.
Critics suggest this is little more than an ego boosting toy for social media gurus and wanna be gurus and on the surface you can certainly see why this claim is easy to level.  However, out of all the tools out there, it gives me the most actionable information to monitor and learn from the best.
Of all the tools out there that are trying to measure influence and engagement,  like Klout and Peer Index, I think Empire Avenue may have developed an interesting format to present it.  It  includes a broader away of social media platforms in the scoring than Peer Index and Klout.  It also encourages people to engage on those platforms versus being just a scorekeeper.  I also like seeing the elements of each platform that contributes to overall value. 
The other thing I’ve noticed since playing with it is that it does a very good job of helping me focus on the important aspects of my social media engagement outside of Empire Avenue. Because the game measures the important things I do on Twitter, Linkedin, Blogger, and Facebook, for example, and rewards me in the game for doing them, it has the impact of making active social media participation more fun.

It is also interesting to observe how different users have different mixes of social media platform usage and arrive at similar scores and market effectiveness.  I will be covering that in a separate blog post.  Overall, I think it’s reason enough to recommend you put it on your radar of things to look at.  By the way, you can invest in me here :)

What do you think?
Enhanced by Zemanta

Monday, May 16, 2011

Crowd-Funding Sites Prepare for a Financing Boom #Smallbiz

SECImage via Wikipedia
The Securities and Exchange Commission may adopt rules to let Internet based technologies be used in fund-raising. The agency is considering to let companies use social networks such as Facebook and Twitter to raise funding by tapping thousands of small individual investors for small amounts of money, the Wall Street Journal reported.  The full WSJ post is below. 

The move is part of a larger review by the Securities and Exchange Commission into whether to ease decades-old constraints on how companies can issue new shares to the public. The new funding techniques, known as “crowd funding,” could usher in a new era of capital raising for start ups.  The technique has spread from artists looking to fund their creative works to entrepreneurs trying to bootstrap companies without giving up control to venture capitalists. Typically, a company might raise $100,000 from an Internet site where users could sign up to buy $100 worth of shares.

Crowd funding could be a cheap source of cash, competing with angel investors who specialize in giving seed rounds to start-ups. Since the amounts of money are small, the downside risk isn’t too bad for investors. But the trick will be in protecting the public from scammers who have no intention of following through on promises since many small investments can mean millions of dollars.  The SEC has rules today restricting a lot of these type of investments to "Knowledgeable Investors" who have minimum networth requirements.  Several start-up businesses that I have talked to are interested in this source of funding.
Would you invest in a business start-up this way?

Small Business News: Crowd-Funding Sites Prepare for a Boom -
Enhanced by Zemanta

I just tweeted your business, but nobody was home

Image representing Twitter as depicted in Crun...Image via CrunchBase
I came across the blog below on Social Media Today and found that I have shared many of the same experiences.  A lot of businesses have a Twitter account and actively promote “Follow us on Twitter.” Generally it’s communicated in a lot of areas.  As Mark Fairbanks states in his blog, "Unfortunately many of these Twitter accounts are unmanned or only exist to tweet the latest sale, special or company news."  As I have noticed in my Kansas City Business Tweets list that sources my KC Business Daily Tweets, many of these accounts are broadcast only like a news release.  They are missing the real value of engagement on Twitter. 

I will be sharing some examples of Twitter engagement and the Return on the Relationship or Return on Investment in future blog posts.  Participation in Tweet Chats and monitoring key words on twitter will be some of the methods discussed.

 Luckily, we do have a lot of small business engagement in Kansas City.  What kind of Twitter Engagement do you see?

I just tweeted your business, but nobody was home | Social Media Today
Enhanced by Zemanta

Wednesday, April 13, 2011

The Social Roadmap: Social Media Marketing: The Business Playmaker

It seems that Return on Investment is the hot topic in my Social Media discussions.  There are a variety of view points out there.  Several center on why is there such a big attempt to measure ROI in Social media, while business cards and brochures are not held to the same standard.  My financial analysis background has trained me to look for the return for any kind of investment being money or time.  This blog by Sam Fiorella describes this very well.  The Social Roadmap: Social Media Marketing: The Business Playmaker: "This is the latest post in a series that explores the various social media ROI arguments and philosophies I’ve engaged in with fellow intera..."  The nice thing about Social Media is that there are a lot of tools out there to track.  However, you need to establish goals upfront and set up linkages across your systems to track from activity to final conversion.

And by the way, there is a return on business cards,  How many do you hand out at networking events?  Do they result in leads directly or indirectly, and can you convert those to your opportunities.
Enhanced by Zemanta

Sunday, February 27, 2011

LinkedIn Links to Help You

This is icon for social networking website. Th...Image via Wikipedia
I have found LinkedIn to be a very good tool for networking, sharing information, and business prospecting. Many people who I have interacted with have not leveraged the tool.  I have included links in this post that will take to a variety of helpful sites and articles in using LinkedIn.  There are also a variety of free webinars and twitter chat sessions to help you with your use of LinkedIn.  I thought I would highlight the ones I have used to help further my LInkedIn experience.

  • Linked Into Business has a lot of great helpful hints by Viveka Von Rosen whose Twitter handles is @ LinkedInExpert.  There is also a weekly Tuesday evening LinkedIn chat session #linkedinchat Tuesday nights at 8 PM EST on Twitter where tips are shared and questions are answered.  I recommend you use Tweetchat to participate.
  • Nathan Kievman of Deming Hill has Blog where he shares good LinkedIn information and operates the largest LinkedIn Strategies Group.
  • Sean Nelson provides a lot of good LinkedIn information in his blog.  His blog also covers general Social Media Topics as well as provide Twitter information.
  • Phil Rosenburg is a great Career Coach and his blog has a lot of great LinkedIn Hints in addition to job search information.  Phil also sponsors the below mentioned Greig Wells webinar.
  • Greig Wells generally has a Free Thursday webinar on LinkedIn Hints.  This is actually a free webinar that truly provides real actionable information.
  • The LinkedIn Blog is a good resource to keep track of newly deployed capabilities and technologies on LinkedIn.  LinkedIn tends to not broadly communicate changes they are making to their user base and this is one source of information I have found helpful.

Of course, I will be glad to help any of my readers and friends with their LinkedIn activities.

Related articles

Pricing for Overall Value

Image representing The Walt Disney Company as ...Image via CrunchBase
In my Social Media research, I have read about a lot of places where you can get inspiration for a blog posting.  Going over a Direct TV ad was not one that was listed.  I noticed that a lot of the Disney Channels came in the lower cost plans while other high interest channels were in the higher pricing buckets.  Somehow, this made me think about Disney's pricing strategy.  I don't have any insight as to what they actually do, but this process is one many small businesses should use to create overall enterprise value when they have a family of product offerings.

Lets look at some of Disney's Children oriented segments leaving out their ESPN and ABC segments.  To attact families with children they have:
  • Numerous TV Channels via cable or satellite
  • Theme Parks
  • Disney Stores
  • Branded Products
  • Disney Movies and DVD's
  • Online Disney
Now my children love the Disney Channels and I would pay more to have them if they weren't in the lower priced bundles.  However, by having the Disney channels available to more customers, Disney is generating a brand presence that helps drive demand for their Branded Products that you can find in many retail stores in addition to Disney Stores.  It also helps drive demand for Movies and DVD like the Hanna Montana and Wizards of Waverly Place movies.  If they had priced their channels so that they were in the higher bundle cable or satellite packages, then they may not have as large an audience to drive sales for their other products.

In other words, they could sacrifice a little yield in their TV channels to generate incrementally more sales and margin in their other segments to increase overall enterprise value.  This pricing concept is something small businesses that offer a family of related products needs to consider to optimize their enterprise value.

How does your business balance pricing to drive overall enterprise value?

Enhanced by Zemanta

Saturday, February 26, 2011

Never Say Never

Justin Bieber performing at Nintendo World Store.Image via Wikipedia
I took my daughter and some of her friends to see Justin Beiber's Never Say Never movie.  It was an interesting experience from several aspects besides  the fact that I was the only adult male in attendance.  I was probably the only one watching the movie from a different perspective than everyone else in the audience.

1)  It was interesting to watch the audience engage with the movie as if they were at the concerts and they all stayed until after all the credits have ran wanting to catch every glimpse.  They were really caught up in the movie.  Even the movie had shots of the audience waving the light wands in the audience, all the girls in the theater were waving their cell phones with light screens in unison.

2)  I had heard how Social Media helped his career; especially YouTube and then Twitter.  I think it was fitting for the movie to end with an email snapshot of "check this out" and send being clipped."  It demonstrates how audience engagement can help one utilize Twitter.  I liked it showing the background behind some of his tweets and the response it generated it.

3)  The theme of "Never Say Never" and his approach to life and goal of performing at a sold out Madison Square Garden concert within such a short time frame.  While he had impressed some players like Usher with @Klout, his career moved quickly without the Disney and Nickelodeon teen star production machines behind him which put him in an underdog position that he overcame.

There is a lot a business person can learn from this "teen movie".

Enhanced by Zemanta
Related Posts Plugin for WordPress, Blogger...