7 Keys To Successfully Running a Small Business

 

Small business and marriage have a lot in common, both have a pretty high failure rate (about 50%) and many of the ones that are still running, aren’t particularly happy with its current state.  Yet, there are a small number that thrive and get stronger as time goes on.  These small businesses (and marriages) have figured out how to overcome the challenges, weather the storms and to love their business.

So how do you become that small minority that thrives over the long term?  For me personally, it comes down to a few things that I’ve shared below.  This list may not apply to everyone, but if you can get a grasp on everything below, you will be way ahead of the game and on the road to continued business success.

 

Learning

“Formal education will make you a living; self-education will make you a fortune” – Jim Rohn

The desire to continually learn more.  I personally think this is the single most important skill you can have as an entrepreneur because it affects how well you do everything else on this list.  Your business can’t grow faster than you can, so as your business grows, you need to grow along with it.

Any business owner will tell you that they have to wear dozens of different hats as a business owner.  You need to know how to market your business, manage finances, hire and train good people in addition to every other thing that comes your way in the course of doing business.  That’s a tall order for a business owner and the only way you won’t let all of these things drag you under is to continually educate yourself and get better as a business owner.

One of the most transformative things for me were audio books and podcasts.  Instead of listening to the radio during long commutes, I would listen to an audio book (first on CD, then eventually on Audible.com) and now podcasts whenever I was driving in the car or running on the treadmill.  Lame?  Boring?  Maybe, but not to me since I realized how much I was learning and how much better I was getting at running my business and managing others.

 

Responsibility

“You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of. ” -Jim Rohn

In my pre-entrepreneurial life, I was a fireman in NYC.  I remember my first assignment after getting promoted to Lieutenant, my Captain told me on my first shift, “Just so you know, as an officer you’re never in charge but you’re always responsible”.  Well said Captain Jim, I tell people that quote when they start complaining about employees not listening to them or when they start blaming everyone else for the business problems they are having.

What I have learned over the course of owning my own business for 10+ years and working with lots of other business owners is that ultimately, you are responsible for your business’s successes and failures and almost all problems are your fault.

This doesn’t mean to flog yourself everytime something goes wrong, it just means to look internally for the reason things went wrong instead of copping out and blaming external forces.  That’s the first step to solving problems and growing as a business owner.

When a problem arises, I ask myself, “What could I have done to prevent this?”  Underperforming employees?  Were they trained and mentored properly so they can succeed at their position?  Major advertising fail?  Did I really do my homework and research before signing the contract? Fine print on your lease is coming back to haunt you?  Did I ever read the lease properly or did I abdicate responsibility to my real estate lawyer?

For the small business owner, all roads lead back to you.  Like I said, taking responsibility does not mean beating yourself up every time something go wrong, it means empowering yourself because if you caused it, you can fix it.  People that blame others take no responsibility for their actions and you can’t fix what you don’t own.

 

Delegation

“Trust but verify” – Ronald Reagan

Failure to delegate is the reason why the majority of small businesses cannot grow past the mom and pop stage, where the owner has control over every aspect of the business.  In order to grow your business and take some of the pressure off of you as the business owner, you need to learn how to delegate responsibilities to others.

Most first-time business owners lack experience in hiring, training and mentoring others.  They hire half hazardously, provide little training and get frustrated when their employees underperform.  The fastest way to grow and to take the pressure off you is to surround yourself with good people and give them responsibility. An excellent book of hiring and managing the right people is the book, “First Break All The Rules”.

Another major mistake business owners make is abdicating responsibility instead of delegating.  When you delegate, others are taking charge but you are still responsible for the end result and to ensure it was completed successfully.  When you abdicate, you are giving up ownership and responsibility to someone else, relieving yourself of responsibility and over-site for things you should not.  Like Ronald Reagan said, “Trust but verify”.

 

Marketing

“Good marketing makes the company look smart. Great marketing makes the customer feel smart.” – Joe Chernov

Marketing is the lifeblood of your business, it is how you continually keep the pipeline filled with business.  Without a new stream of customers, your business will slowly die.

On the surface, marketing is pretty easy, in reality, it can be very difficult to make it work economically.  I think many new business owners take marketing for granted thinking if they spend the money the customers will follow.  We’ve all spent thousands on newspaper ads or direct mail campaigns that produced nothing or blown through hundreds of dollars in pay per click advertising without so much as a phone call.  Trial and error, you learn from past experiences and get better as time goes on.

If you want your business to thrive, you need to develop the right marketing mix for your business. Every business is different, what works for someone else may not work for you.  The key with marketing success is not to get it right the first time, but to continually improve over time.  Learn to test and measure and make adjustments as time goes on.  Companies that do this eventually create powerful marketing systems for their business.

Business owners also fall into the trap of trying one marketing/advertising tactic one time and dropping it to try something else.  If you decide to try something, make sure you try it enough to make the determination that it’s not a good fit for your business.  Things like direct mail, SEO and networking take time to develop and to see results.  A business that runs a single direct mail campaign (or anything else) that fails and declares, “direct mail doesn’t work”, is like a person picking up a guitar for the first time, playing a few clunky cords and declares, “guitars don’t work”.  Yeah, they don’t work for you, but they work fine for people that know what they are doing.

 

Discipline

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn

I think one of the major advantages of a franchise over an independent business is discipline.  This discipline evolves out of past experience and successes of other franchisees in the system.  A franchiser may require you to do things you may find excessive and cost prohibitive, such as expanded hours even though you are not busy or requiring front desk staff when you are losing money keeping them there all week.  They may require continued advertising spend when you are not seeing results.  What the franchiser knows is that these things will eventually pay off and make you a more successful business in the long run.  An independent business may look at these as a waste of time and resources and start cutting back before they are able to pay off.

This continual corner cutting often leads to a downward spiral that many small businesses can’t pull out of.

It may be tempting to close early, stop advertising, cut staffing hours or use a cheaper quality material to save a few bucks, but often times they lead to longer term issues of customer trust, brand quality and poor service that leads to a poor business reputation and lost sales.  Sometimes you have to make tough decisions, just make sure you think about the long-term impact on your business before you make them.

 

Finances

“The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem.” – Suze Orman

Most businesses shut down due to financial reasons.  The reasons the finances are in poor shape may be numerous, but lack of cash usually brings a business to a grinding halt.  As a business owner, you need to have a firm grasp on the finances of your business.  If you’re like me and hate financials, you need to get someone you trust to keep track of what is happening with your money.

You’d be surprised how many business owners ignore the financial problems they are having, thinking if they ignore it long enough, things will fix themselves.  What usually happens is that they ignore the financials until it is too late and lack the resources to pull themselves out of the financial hole they dug for themselves.

Not only do you need to understand profit and loss statements, you also need to have a firm understanding of the cash flow for your business.  Many profitable businesses went under, not because they couldn’t turn a profit, but because they had major cash flow problems they couldn’t fix in time.  How does that happen?  Account receivables, slow payers, having to pay for inventory and supplies up front and taking way to long to get paid by customers.  For many businesses, you need freely available cash to fill these gaps and if you take your eye off the ball, that gap can get so wide that you run out of cash.

As a business owner, know how your business works financially and never take your eye off the ball, no matter how bad you want to.  One thing I also learned is that lenders want to lend to you when you don’t need, the second you run into trouble and need money, good luck trying to get a loan.  Secure you lines of credit, financial reserves, etc long before you need them.

 

Balance

“You can have it all, just not at the same time” – Oprah Winfrey

News for you, despite what you read you will never have a perfect work/life/family balance.  It’s a lie.  Oprah Winfrey said it best, “You can have it all, just not at the same time”.  At any given time one part of your life will be dominating everything else, the key is understanding this and making an effort to bring some balance when the time comes.

Just starting a business?  No balance, your new business startup will consume you and take just about all of your time and mental capacity.  Starting your own business is hard work and very difficult so you it will need your full attention.

Crisis at home?  No balance, you will need to direct most of your attention to home life until things settle down.  Family comes first, your business success is pointless if it is at the expense of your family.  With your own business, there is no separation of work/home, it’s not a 9-5 job where you can physically and mentally clock out every day.  It also doesn’t mean that it should dominate your life, it just means that owning your own business becomes part of who you are, which is why you should enjoy what you do.

Don’t feel guilty working an 80 hour week because you have a tight deadline to meet, but also don’t feel guilty taking a day off to spend time with the family.  If you find yourself working 80 hours a week all the time, then there is a problem that needs to be fixed before you burn yourself out.  On the flip side, don’t ignore fires that could seriously hurt your business because you planned on doing some weekend gardening.

One more note, and this is my personal opinion, don’t go out and start a business unless your significant other is onboard with it.  You will hit some serious waves when starting a business and the stress can be unbearable, with the only thing keeping you together is knowing that you both jumped into entrepreneurship together.  This is a whole other article, but thought I would throw it in there.

Here’s to your business success

Continual learning, taking responsibility and never taking your eye off the important things will put you on a path to continued success.   Good luck.

5 Places Where Your Business Is Leaving Revenue On The Table

5 Places Where Your Business Is Leaving Revenue On The Table

Every business wants to generate more revenue.  More (and hopefully better) marketing is usually the solution to that, at least that is how most business owners see it.

 

What business owners don’t see is the mountain of revenue that goes untapped each year in their business.  Right in front of them, all around them, are opportunities to generate more revenue without gaining a single new customer or spending a dollar on additional marketing.

 

So why is the focus almost always on finding new business instead of maximizing the business they already have?  In my opinion, it comes down to the complexity of the solution.

 

More marketing usually means spending some money on advertising to generate interest and leads.  Pretty straightforward, spend some money and get some business.  Yes, a super simple example but you get the point….it doesn’t require a ton of planning/effort on the part of the business owner, only some money in most cases.

 

On the other hand, generating more revenue from missed opportunities in your business usually requires more planning/effort than money.  Figuring out how to generate more revenue with existing opportunities requires evaluation, strategy, planning, and execution……who has time for that?  Many internal opportunities lie in operational inefficiencies, lack of training and lack of managerial oversight.  All things that pretty much place the responsibility and blame on the business owner.

 

Much easier to just spend more money on advertising than to confront these complex issues.

 

So while every business needs to generate a continual stream of new business in order to stay healthy, they also need to look at their existing business and figure out how to generate more revenue from the leads and customers they already have.

 

Below are some common places where businesses continually leave money on the table.

 

Current Customers

Your current customers are your most important source of additional revenue.  You have an existing relationship with these people and they have already proven that they are willing to spend money on your business.  You have already spent the time and money to acquire them, so why not make the most of it?

 

Look at your current customers and see what additional products/services you can offer them.  Many of your current customers may have no idea what else you offer, it is your job to introduce them to these other offerings.  If you sell a one-time product, like a home generator or HVAC system, you can offer a yearly maintenance contract to service it each year.  Look at your current customer list and see who you can offer this subscription service to.

 

If you sell replenishable products, do you know when each of your customers should be running out of product?  Timely reminders and discounts can entice customers to purchase more frequently from you.  If they currently buy from you twice a year on average, imagine what your business would look like if you could get your customers to buy three times a year?

 

From additional sales to more referrals, examine your current customer database to find opportunities to grow your revenue.

 

Upsells

Are you making the most of each sale?  Why do you think supermarkets are full of candy, magazines, beverages and small ticket items in each checkout lane?  Because these are impulse purchases that people make that they probably wouldn’t have if they were sitting there in front of them.  Better yet, train your employees (or build into your checkout process if e-commerce), to offer complementary products/services at the point of sale.

 

If you sell swimming pools, offer a discounted pool chemical package at the time of purchase, they will need it anyway.  You can also offer upgraded filters, pumps, heaters, etc at the time of purchase.  A customer may not even know these upgrades are available and won’t know to ask unless you offer it to them.  If you are a bakery, remind people that it’s cheaper to buy by the dozen or offer a free pastry if they purchase a dozen, it can help push someone only wanting 6 pastries into buying 12.

 

Think about how you can bundle additional products/services at the point of sale to increase your average ticket size. The easiest time to sell to someone is when they have made or are about to make a purchase.  The wallet is out, their wallet is out, make the most of it because you may never see it again.

 

Conversions

I had a client that used to continually say that not getting enough leads was the one big bottleneck in their business. They would say they had a great sales team, support staff and everything needed to grow their business….except they did not have enough leads.  Since transactions happened offline, it was difficult to see conversion numbers but I was told they consistently had a 30-35% close rate once they scheduled an appointment.  That’s a pretty impressive close rate considering they were selling services that cost between $8-30K.

 

Over 3 years we doubled the amount of leads they received each year, but the revenue was barely growing.  So we instituted a new CRM/Marketing Automation package to closely track every lead that came in.  And guess what we learned?  Conversions are actually sitting around 7% and a good chunk of their yearly sales are coming from old, existing referral business where the sales were pretty much automatic.  So much for a well-oiled machine.

 

With a dismal conversion rate, it makes no sense to spend more on marketing until you can fix your conversion issues.  It’s like having a shower with very little water pressure due to a leaking pipe and trying to fix it by cranking up the water pressure.  Yeah, you had a nice shower but flooded your basement in the process.

 

Examine your conversions (if you use your gut, you are 100% always wrong) and your sales process and see where the leaks are.  Increasing your conversion rate by only a few percentage points can have a dramatic impact on your bottom line.  But like I said earlier, it’s easier to spend more money on advertising than it is to repair a broken sales process.

 

Past Customers

Just like current customers, past customers can be a gold mine of additional revenue waiting for you to take it.  Once people stop doing business with you, it’s easy to forget about them or to place them on some generic newsletter until they finally mark you as a spammer.

 

It’s hard work, but maintaining relationships with past customers can keep the door open to new business.  People stop doing business with you for a variety of reasons.  Maybe they no longer needed your services, or finances got in the way, or maybe they decided to try a competitor, the point is that they purchased from you once and some of them will purchase again.

 

Maybe you are offering new products/services from when they were your customer.  Maybe their circumstances have changed and they are now ready to start buying from you again.  You will never know unless you re-open the lines of communications again.

 

I have a client who has a corporate training business that wanted figure out how to generate new business as it was in decline ever since the recession hit in 2008.  We went through his business and discovered he had run over 1500 corporate training events over the past 20 years.  When I asked him what he did to stay in touch with these past customers and to get repeat gigs, you know what his answer was?  Nothing.  Yes, he spent all of his energy trying to figure out how to get new business and completely ignored 20 years of past customers.  Shocking but true and there are many businesses out there that do the exact same thing.

 

Even if they don’t need you anymore, maintaining a good relationship will keep the door open for referrals from them in the future. Go through and find some of your best past customers and start building a relationship with them again.

 

New Offerings

Do you know what your customers want?  Have you ever asked them?  For internet marketers, the most successful strategy going is to build a huge audience (leads for their online business) and then just ask them what they want.  Once the audience tells them, they go out and make it for them and make lots of money in the process.  They actually do the exact opposite of every other business, they build a relationship with their audience and then sell them whatever they are looking to buy.

 

Maybe you need to offer additional products or services to your business.  Maybe you need to bundle your products/services or the opposite, breaking your product/service into smaller parcels for your customers.  Maybe you need to do all of this.

 

Snack packs came about because some people didn’t want to buy a giant pack of potato chips, they only wanted enough for a single serving.  Costco came about because families wanted to buy in larger quantities (at a cheaper price) than they could get at the supermarket.  Online tax services well audit protection services as an add-on because people who do their own taxes are afraid of the prospect of having to deal with the IRS on their own if they get audited.

 

Look at your customers and look at your current offerings and see where there is potential to offer them something new, something old just packaged and presented differently.

 

Go find that revenue

So now you have a few ideas where you can increase revenues without needing new customers or paying for more advertising.  It takes more time and effort, but cashing in on these opportunities can have a huge impact on the financial health of your business.

Things You Need To Do Before Franchising Your Business

How Franchise a Business

Do you own a business and dream of franchising it one day?  Franchising can be one of the fastest and least capital intensive ways to expand a business, but it’s not without its challenges.  Many businesses have collapsed in financial ruin and destroyed their reputation by franchising their business before they were ready.

When franchising, you are using someone else’s capital and commitment to open expand.  These new “franchisees” do not have your experience or expertise and need you to teach them how to be successful business owners.  You basically need to take everything you do to run your business and all of your experience and teach others to be as successful as you are.  That’s a tall order that requires a lot of planning, training and commitment.

Franchising also involves many legal challenges as well, which we won’t be discussing here.  Here we will be focusing on the business challenges involved in getting ready to franchise your business.

If you dream of franchising your business one day, you need to make sure you are prepared before you start.  Below are some important things that you need to have in place before you decide to start franchising.

Create a Flagship Location That Proves The Model Works

You wouldn’t believe how many franchises get launched today without being able to show a single profitable location.  Some franchise concepts  launch without ever creating a location, just selling an idea.  If you want to build a long-lasting, successful franchise system, you need to be able to know the business model works.  If you as the founder of the business can’t make it profitable, what makes you think strangers will?

A flagship location (most likely the founder’s own location) allows you to develop your business model, learn from mistakes and to refine your processes.  It is here where you create your systems, fine tune your marketing and figure out what your customers really want.

Having a proven flagship location also makes it much easier to sell your franchise concept to would-be franchisees as you don’t have to explain how it works, you can show them.

Most likely you have been running your own business for a few years and have a good idea what your business model is.  But are you profitable?  And if so, how profitable?  You have to remember that with a new franchisee, they will not have the same expertise you have and will also be paying an ongoing royalty fee to you (that’s how you make your money), so you need to account for these things when looking at your franchise model.

If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!”
― Michael E. Gerber, The E-Myth Revisited

Create and Document Processes For Everything In Your Business

The majority of small businesses rely on the owner of the business for everything.  They are the ones with all of the knowledge, expertise and experience to run the business.  Employees look to them for guidance and to make decisions.  Do you see why this is not scalable and why most business owners experience burn out within a few years of starting their business?

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If you ever hope to franchise your business one day, a written operations manual is a must.  Written documentation on how you run the business is the only way others will be able to run a successful franchise location since you won’t be there to tell them what to do and to answer their questions.

For a franchise, you will need a very detailed and thorough operations manual that answers every question a franchisee might have about the business, from daily operations to marketing to finance.  You need to show franchisees how to hire and train people, how to clean the facility, how to order supplies…..basically every single thing you do to run your business each day.  All of this needs to be written down and organized into a comprehensive operations manual that will become their bible when starting and running their business.

Most modern franchise operations manuals are housed online and include interactive media like video and audio files.

Create a Marketing Plan That Others Can Replicate

Creating customers and sales are the lifeblood of any business.  Without a repeatable way to generate new customers, your business will soon wither and die.  Marketing is what attracts these potential customers to your business.

If you are going to franchise your business, you need to create a marketing plan that anyone can execute, is scalable and is repeatable.  Somebody buys into a franchise system so they can hit the ground running and in order to do that, they need an excellent marketing plan to generate sales right off the bat.  When it comes to marketing, your job as a franchisor is to show them how they can generate customers and sales on demand.

Look at your current marketing plan, are you a one trick pony?  Do you rely too heavily on a  single marketing source for your business?  Worse, are you relying on contacts and relationships that took years to establish to generate the bulk of your business?  Your marketing mix needs to be comprised of a range of marketing activities, some paid and some free.  But the important thing is that franchisees need to be able to replicate it.

When a franchisee evaluates your business opportunity, they will want to see how successful your marketing is and need to feel confident that they can replicate your success.

Create a Training System For New Franchisees

Most people who buy a franchise have little prior business experience.  They buy into a franchise system to get the support and training they need to succeed inside a business model that has been proven to work.  There will be lots of hand holding, training, and communications required in order to get a new franchisee ready to start their own business.

Poor training and support can lead to disaster for a franchise.  The basic concept for a franchise is to have each and every location look and feel the same.  The food should taste the same, the service should be the same and the branding should be the same.  Whether you like McDonald’s or not, if you eat a burger in California or in Kentucky, it will taste the same.  You can only do that with high-quality training and support.

Initial and ongoing training is essential if you want to each of your franchised locations to look, act and perform similarly to your own business.  The good news is that you can use technology to deliver most of your training.  Webinars, video chat, email and video are all great ways to communicate and train franchisees remotely.

Create a Plan For Growth

As you add franchise locations, you will need to scale the support for them.  Your growth strategy needs to be in place before you grow, not as a reaction to growth.  You will need to make sure you have the appropriate support staff, training resources, and finances in order to ensure your growth doesn’t become a problem.

What resources will you need to have in place to service 5 franchise locations?  What about 10 or 20?  While you don’t have to start making these investments now, you do need to think about how you can add them quickly and efficiently when the time comes.

 

Are you ready to start franchising?

Franchising your business can be a fast way to grow without having to make large capital investments in your business.  But it also means that you need to be much better at training, communication, and marketing as you won’t be directly involved in the running of each location.

Take your time and make sure you have your own efficient, profitable business going before you look to start franchising.

5 Lessons Your Business Can Learn From Franchising

 

Franchises, you either love them or hate them.

Some, like Michael Gerber (The E-Myth), love the systems-oriented philosophy of them, the ability to build a well-oiled machine that can be replicated over and over again.  Others, like Seth Godin, see them as a path to eternal mediocrity, never to produce anything beyond “ok”

How about a middle ground?

You can have set processes and systems in your business and still retain your originality.  Why not take the best parts of franchising for your business and leave the less desirable parts behind?

I like that idea.

For most businesses, the biggest bottleneck to growth is the business owner.  All of the experience, the knowledge and know how are forever trapped inside their head, only leaking out in trickles in the form of unorganized employee training and knowledge transfer.  It’s never enough to satisfy the standards the business owner has set, so in frustration, he resorts back to doing everything himself. That is the day his business stops growing and begins to die.

Eventually this leads to burnout, disappointment and growing frustrations with the business.  The business owner gets tired and worn out from bearing the never ending burden of doing everything himself.

Franchises have the ability to grow and replicate themselves for the sole reason that it’s success does not depend on the owner of the business to succeed.  It depends on a system, a way of doing business.  It is the system that is implemented and improved over time and the people in the business need to learn how to work the system as efficiently as possible.

Take a look at 5 things your small business can learn from franchising and see if you can apply some of these concepts to your business.

A Written Plan

Ever play the game “Telephone”?  It’s when you whisper a message in someone’s ear, and that message gets repeated along a line of people…..until the person on the end has to recite the original message.  It’s almost never the same message at the end as everyone along the chain gives their interpretation of the original message, often with humorous results.

When you don’t have a written plan for your business, that’s what you’re doing, playing telephone with your employees.  Your verbal instructions are not remembered, interpreted differently, or just forgotten…….leaving your employees with varying levels of understanding.

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Do you see the confusion here?  Do you see why everyone does the same activities …differently?   Some may do a great job, others a mediocre job.  That’s not fair to the customer who gets the mediocre customer experience, it’s not fair to the employees who are expected to perform without proper training, and it’s not fair to you, the person who busts his butt trying to build a business.

Having a written operating manual for your business can help to standardize your best practices.  Every employee has access to the same knowledge, the same method to perform the duties that make up their position.  With a written plan, you take the time once to lay out the way you want things done.  This gives every person in your business the same view of how you want things done.  Much easier on you and easier for your employees to understand and reference as needed.

It also allows others in your business to train new hires as the way your want the business run (your system) is now on paper, in an organized fashion for everyone to see.

It’s nice not getting a call on a Sunday morning because your employees were able to go through your step by step guide on how to reboot the credit card terminal because it froze.

Strong Branding

Whether you like them or not, when you see the “Golden Arches”, you know exactly what’s in store for you.  I’m not a fan of eating fast food, but when you’re driving cross country with 4 kids in the car, spotting those golden arches on the horizon is like finding an oasis in the desert.

Wouldn’t it be great if people saw your logo and got all warm and fuzzy inside just thinking about their last visit to your shop?  A strong brand can do that for you.  Franchises understand the importance of branding.  Every customer touch point is carefully designed to remind you of who they are as a company and what their brand stands for.

You won’t see a good franchise substituting black and white brochures they made on their laser printer because they ran out of the color ones.  But I’ve seen that countless times from independent business owners who thought it was no big deal to cut a little corner like this.  Letting your phone always go to voicemail, closing earlier than your posted hours, not responding to customer communications, these are all little things that slowly eat away at the quality of your business.

All of that little “corner cutting” turns into a deterioration of your brand.  Keep your branding strong, even if it hurts the pocketbook in the short run.

Consistent Marketing

Franchises understand the need to constantly feed that machine that is your business.  Without new potential customers coming through your door, you’re business will eventually wither away and die.

Most business do the same thing.  When things slow down (revenue), they cut everything, including their marketing.  Henry Ford Quote on Marketing

Franchises understand that even in tough times, you cannot save money by cutting your marketing budget.  This is something independent small business owners do all the time.  In tough times, they look to save a few dollars here and there, and it’s easy to not place that ad next month or to freeze your Pay Per Click campaign for a month or two.  You don’t see the results of you decision until several weeks later, when you realize that the phone has stopped ringing and nobody new is walking through your door.

oops.

Never stop marketing.  Never lose sight that even if you are busy now, if you stop marketing, the pipeline will run dry.

Most franchises mandate that their franchisees spend a certain % of their revenue on marketing activities because they understand the importance of constant marketing.  They also know if they don’t mandate it, it’s very easy for a franchisee to decide to save a few bucks one month and cut their marketing spend.

Even if it hurts in the short run, don’t turn off your advertising and stop marketing, it’ll hurt you even more in the long run.

 

Standardized Training

When you hire a new employee or train your staff on a new product or service, how do you do it?  If you’re like most business owners, you do it verbally, and when the owner feels like it or when someone screws up.   It might be a team meeting or one on one, or just a “watch what I do” kind of training.   What happens to the employee that was away that week, or the new employee you hire next month, do they receive the same exact training?  Probably not.

Good training can be exhausting.  Often, after you’ve done the same training for several employees, you start to cut corners, leaving out little tid bits of insight that might be crucial for a new employee to “get it”.

This is also why the your employees do the same activity, differently.  They’ve all received the training, only it was slightly different, and left to them to fill in the blanks with their own interpretations.  This is why your business lacks consistency.

It’s important to write things down so you don’t forget the important stuff.  It also allows you to train a manager or key employee to help with the burden of training everyone yourself.

A good franchise will have a detailed training manual so the employee hired today is trained the same exact way the employee hired next month will be.  The next time you set out to train a new hire, bring along a pad and pen and document everything you do so you can refer to it again for the next hire.

Understanding Of Key Metrics

Do you know what your KPI’s are?

If you’re not sure what these are, you’re playing darts in the dark.

Your Key Performance Indicators (KPI’s) are the key metrics that you look to measure of success for your business.  It’s a “snapshot” you can look at and get a quick feel if things are going well or if trouble is potentially brewing.  Every business has different KPI’s, but everyone has them.  Examples of KPI’s are:

  • The number of  leads generated each month
  • New customers acquired each month
  • Number of sales calls made each month

Franchises know their key metrics cold.  They have the advantage of amalgamating the metrics of hundreds or even thousands of individual units and gaining a deep understanding of what metrics are important and where they should be for a successful franchise location.

Find out what your important metrics are and write them on a whiteboard in the office so you and your team can see them every day.

What else can you learn from franchising?

As you can see, having your processes and training in written form will go a long way in creating consistency for you business. It’ll also allow you, the business owner, more time to work on the bigger things for you business.  Keep your branding strong and your marketing consistent to avoid pitfalls many small business owners make.

Don’t slack off or cut corners, even when you think it’s not a big deal.  A strong business and brand takes a long time to build but can be ruined by poor decision-making and training.

11 Questions To Ask When Conducting Market Research For Your Business

 

Before you start a business, you need to be sure that the marketplace wants what you are offering.  Nothing sucks more than pouring your heart and soul into a new business venture only to find out that people just aren’t interested in what you have to offer.

Conducting thorough market research also opens up additional questions you may need to answer about your business and may reveal opportunities in the marketplace that are not currently being met.

Before you start any kind of marketing or advertising campaigns, you’ll need to conduct some market research first.  It doesn’t need to be a seven-month-long process or a 100-page document that you create, but you do need to ask yourself some questions and do some work to find out the answers.

Without a thorough knowledge of the marketplace and existing businesses, you may be putting yourself in danger before you even start. The following questions will help you to identify some important issues in your marketplace, and it will help you to double-check if there are crucial issues that you may not have considered before you start your new business.

Market Research Questions

1- Are there other businesses similar to yours that are currently operating in your market? Existing businesses like yours is not a bad thing, it means there is a market for your business.

2- How do these businesses appear to be doing?  Do they look like healthy, thriving businesses?

3- What are these businesses doing well?

4- What are these businesses doing poorly?

5- What could you do to compete with these businesses?  How would you stand out?  Is there an opportunity to create a competitive advantage here?

6- How much competition is there?  Does the market appear to be saturated?

7- If yes, are there ways that you can alter your business plan to suit a niche market?

8- What kind of people would want to buy your product or pay for your service?  What’s your ideal customer profile?

9- Are there enough of these types of potential customers living in your community to support your business?  Where are they located?  Will they frequent the area you plan to be in?

10- Can the economic profile of the community support your business?  Are you selling a premium service with prices to match?  Can the community support this type of business?  Be sure your product or service matches the economics of the community.

11- Are these people the type of customers who are likely to become repeat customers? If so, why?

Market Research for Small Business Quote

Summary

Don’t think about the above questions as a way to rule out starting a business, they may actually lead you be become even more creative and innovative about your new venture.  usually what happens is that answering these questions opens up new insights and potential opportunities for you.  To get some further insight, have someone you trust answer these questions too, they might have some suggestions you never thought of.

Once you have finished answering these questions, make up a list of additional questions that may have arisen during this research and find answers to them.  Armed with this information, you’ll be able to make better decisions and help minimize mistakes that could have been avoided.

Once you have completed your market research, you can start working on your marketing research.  You can read a previous post titled, Five Steps to Conducting Great Marketing Research for Your Small Business

 

How To Create An Operations Manual For Your Business

 

Having a written plan is important to any business, big or small.  Putting the standards you set for yourself and your business on paper will not only help you create consistency for your business, it will help you to avoid a pitfall that many small business owners face;  Being able to maintain the quality the business owner has set for the business as they grow and hire new employees.  

Operations Manual Template

Operations manual

Too many times a business with a rock solid level of service starts to slowly degrade as they grow and new employees are added to the mix.  A written operations manual will help give you the discipline to stay on track as your business grows.

A Business Plan is Not an Operations Manual

Most likely when you were first starting your business, everyone was telling you that a written business plan is a must. You need to get your vision, your plan and financials on paper so you (and your bank) can see that you have thought things through and have a clear plan of how your business will make money.

Once your business is actually up and running, how many times do you think you will refer back to your business plan?  If you are like most people, the answer is somewhere between rarely to never. A business plan is just that, a plan for your business.  It’s an overview of what your business is about and how it will make money.  It’s your vision of how you see your business now and in the future.  While this is very important, you also need a written plan on how you will run your business, day in and day out.  This is where a written operations manual becomes so important.

The Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.  – Michael Gerber, The E-Myth Revisited

What is an Operations Manual?

An operations manual is something different for every business.  For some it may be a 1000 page, phone book sized manual, detailing every little detail of the business in a step by step guide.  For others, it may simply be a series of checklists that are stored in a binder or as an online document. The only requirement is that you have some sort of written plan that you and your employees can reference when they need to know something. While many operation manuals will be chock full of details such as the company’s mission statement, values, organizational charts and sections for each key component of a business, you do not need all of that.  At least not when you are just starting out.  I think this is the misconception that many people face when it comes to writing an operational plan for their business, it does not have to be large and comprehensive, it just needs to be useful.

“Planning is an unnatural process; it is much more fun to do something. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression” (Sir John Harvey-Jones)

Why Do You Need an Operations Manual?

Purchase our 300+ page Operations Manual Template for only $29.99. Originally sold to franchises for over $1,000. Instant download. Click here to learn more or add to cart now.

There are lots of reasons for having a written operational plan for you business, the ones I feel are most important are:

Create a standard for your business.  For the most part, customers would prefer consistency from a business over random and inconsistent acts of awesomeness when it comes to customer service.  If the owner gives a customer one experience but your employees give that same customer (usually not as good) another experience, it will confuse and diminish the quality of the business in the eyes of that customer. A written plan will make sure everyone knows what expectations you have set for your business and employees.

Better trained employees.  If you are like most small business owners, you probably walk new employees through every step personally, explaining what needs to be done and what you expect from them.  Do you do the same exact thing for every employee that you hire?  Probably not.  What will happen if your manager needed to start training new hires? Would the training be the same? A written training plan will ensure that all new hires are given the same information to help create consistency among all of your employees.  It will also allow you to delegate some training responsibilities to other employees without diminishing the impact of that training.

Easier to scale your business.  To take a quote from Michael Gerber in The E-Myth Revisited, “How is it that McDonald’s can deliver on it’s customer promise in every one of it’s 20K plus restaurants, each and every day, when a small business owner can’t do it with a single location?”  You can say alot of things about McDonald’s but the one thing you can’t say is that they are inconsistent. When operating multiple locations, or even franchising your concept, it’s impossible to deliver on your brand promise without a comprehensive operational plan in place.

Make your business more valuable.  One day, for various reasons, you may need to sell your business. Telling a prospective buyer “This is the way I do it” and “This is what I tell my employees” is much less valuable in the eyes of a prospective buyer than “Here is the way we operate our business”. Nobody is going to want to buy the ideas in your head, they want something tangible, proof that your business is an actual business, not you running around telling everyone what to do. An operations manual will be proof that there is an actual business going on here, something that can run with or without the owner present.  Now that is valuable.

“Reduce your plan to writing. The moment you complete this, you will have definitely given concrete form to the intangible desire”  Napoleon Hill

What Should You Put In Your Operations Manual? The most important thing when writing an operations manual is for it to be useful, otherwise it won’t get used.  Start with the information that you will need to reference the most and would like to keep handy.  Whenever I help to create a written plan for one of my clients, I usually start with the following:

  • A contact list for all employees, vendors, emergency numbers, insurance company, landlord (if you have one) and anyone else that may need to be contacted in case an issue arises and the owner is not present.
  • A series of checklists on the basic functions of the business.  Create checklists for cleaning, opening/closing the business, supplies and any other task that requires easy and repeatable steps to follow.
  • How to guides.  Create simple “how to” guides that you and your employees can reference in various situations.  If the POS (Point of Sale) machine crashes on you in the middle of the day, do your employees know what to do?  Create a quick guide outlining the steps on what they should do if this should happen.  What if an employee needs to call in sick?  There is an injury in your store?  Write simple 1-2 page guides on what needs to be done in each case.
  • Policies.  While i’m not a huge fan of policies (i know they are needed, they are just not always used for the right reasons), outline your customer policies (or promises if that’s what you call them) so all of your employees are on the same page. Refund, exchange and payment methods are all good policies to start with.

Once these sections are complete I like to concentrate on the daily operations of the business.  I start here because this is (hopefully) the first part of the business that you can start delegating to others.   Just like in the “how to guides” above, start creating “mini guides” of your daily operations.  It may include ordering procedures, daily tasks that your manager must ensure is completed every day or anything else that is relevant to your business that needs to be done on a daily basis. If you only created the above sections for your business and stopped there, you should be proud of yourself because most small businesses will go their entire existence and never even get that far.

As you can probably see by now, a written operations manual is made up of a series of short sections that are strung together to create a bigger manual.  It’s actually very easy to start creating one, just start with the sections outlined above and you will be on your way to having your own written plan for your business.

Purchase our 300+ page Operations Manual Template for only $29.99. Originally sold to franchises for over $1,000. Instant download. Click here to learn more or add to cart now.

Resources

Creating your operations manual.  There is no easier way that I know of to create training guides than with Screen Steps. One of the biggest headaches in creating a training manual is inserting screen shots and images, if you use Microsoft Word you know what I’m talking about.  Having to take a screen shot, download the image, insert it in the document and then re-size it is a major pain and consumes a lot of time. Screen Steps let’s you  snap a screen shot of your computer screen and automatically inserts the image into your document in about 3 seconds without having to download the image first.  Screen Steps is the reason that I actually enjoy creating how-to guides for this blog.

Hosting your operations manual online.  I’m a fan of Google Apps and use it for all of my businesses.  What I do is upload the finished documents to my Google Docs account and then create a password protected intranet site using Google Sites to host the manual. It can then be easily accessed by any employee from any computer.  Both products come free with a Gmail or Google Apps account.  I hope to come out with a video tutorial shortly outlining exactly how to set this up so stay tuned.

Three Ring Binder.  After I upload each document, I print a copy to place it in a three ring binder which is left in a spot where employees can easily reference it when needed.  I use page inserts to keep the pages from tearing and use tabs for easy reference.

Start Creating Your Manual

I have outlined why and how to start creating your own operations manual for your business.  As you can see it’s easy to get started, you just have to start. Making it relevant to your business and employees is the key. Your operations manual will never be complete, it will always need revising so don’t think of it as something you need to do all at once.

When you find things that work for your business, take the time to write them down and add them to your manual a little at a time.  It should grow and change over time,  just like your business.  I usually take a few hours quarterly to update and revise my manual. If you have questions about getting started, you can contact me here.

The Small Business Owners Guide to E-Commerce

Ecommerce-memeThere’s a whole world of commerce  happening outside of your local brick and mortar store.  People that live right around the corner from your location are buying the same product that’s sitting on your shelf from a person half way around the world.  Why?  Because they can.

Welcome to the world of E-Commerce. People just love to buy stuff online, not only for the deals, but for the experience of getting stuff delivered to their door, minus the drive, taxes and  the sometimes annoying sales clerk.

No matter what you sell, whether it’s swimming pools or handmade sock puppets, the internet is the perfect place to cast a much wider net than you could ever cast with just your physical store front.

You may think it’s too technical to create an e-commerce store for your business, and five years ago you may have been right.  Luckily today there are so many resources and new technologies that let even the technically challenged business owner create and run a successful e-commerce store.

What we are going to discuss here are two things:

1- How to actually create an e-commerce store for your business, including all of the tools you will need

2- How to successfully market your e-commerce store and turn those eyeballs into paying customers

Why Create an Online Store?

Because it allows you to reach a much bigger potential audience than your local brick and mortar store could ever do.  And because it’s not terribly hard to do, though it does take quite a bit of work.

Think of it as your second store front. You probably spent a pretty penny building out your store, why not spend a fraction of that amount and possibly build a store front that can totally launch your business into a new level of awesome.  If you run your business from home, it’s your opportunity to create that awesome store front you dreamed about at a fraction of the cost.

E-commerce is easy to get into but hard to execute

With an e-commerce store, you don’t have the business owner or salesperson there to answer every objection, to sweet talk the potential customer into making a purchase.  You need to make all of that happen virtually, without ever getting the chance to speak to that customer before they decide to purchase or not purchase.  What this means is that you need to carefully plan how you will take the potential customer from window shopper to customer.

The Tools You Will Need

E-Commerce Software

There are several great e-commerce and shopping cart solutions available to you.  Some of the solutions are called hosted solution, which means they not only provide the software to create your e-commerce store, they also host your website on their servers as part of the monthly fee.  A self hosted solution is where the software is provided to you, but you are responsible for hosting your website on your own hosting account.

Hosted solutions are a great way to get started with e-commerce.  They require little technical knowledge as they handle all of the hosting responsibilities and they are truly a one stop shop when it comes to creating and running an online store.  The down side is that you don’t have 100% control over your site, meaning if you ever decide to leave and switch to a new platform, you may be faced with having to rebuild much of your store over again.

Self hosted solutions are more difficult to setup as you have to manage your own hosting as well as configure several things like your shopping cart and payment solutions yourself.  This is a good option if you are a bit more technical and you are the type of person who wants full control over your own online store.

Below are a few of the more popular e-commerce and shopping cart solutions

Hosted Solutions

Shopify – Create a beautiful e-commerce store without knowing a lick of code.  Hundreds of themes to use, you can get a storefront open in a weekend.  Plans start at $14 a month for a basic store with several options if you’re looking for more.  They run a great blog where you can learn everything you need to get your own store open.

Big Commerce – Another really popular hosted e-commerce solution.  Tons of themes available as well as add-ons and payment options.  Plans start at around $25 a month, though they do not charge transaction fees, which Shopify does for their smaller plans.

Self Hosted

Magento – Magento is one of the most popular e-commerce solutions when you want to host your store on your own web hosting service.  There is a steeper learning curve involved over any of the hosted solutions, but it’s not too difficult once you’ve spent the time getting used to it.  The Community Edition is free to download and is probably all you’ll need.  There are hundreds of third party apps that can extend the functionality of your store.

Open Cart – Another self hosted shopping cart solution that has been around for a number of years and has a good reputation.  They have a large community of developers and it’s easy to find help in building your store if needed.  Open Cart has a GPU license, which means it’s free to use and modify as you see fit.

Woo Commerce – If you’re currently using WordPress or you know that’s the platform you would like to use, Woo Commerce is a great option for building an online store.  It comes from Woo Themes, which has a solid reputation in the WordPress community and is free to download and use, though there are several add-on features that you would have to pay for if you need additional functionality.  It’s not as robust as all of the options above, but a solid choice if you know you will be using WordPress.

Payment Solutions

Paypal – Probably the fastest and easiest way to start taking payments online.  It’s a great option to get started, though yu may want to switch to a different provider if your sales start to grow as the transaction fees are typically a little higher than other options, though they don’t have monthly charges which makes it great for starting out.

Authorize.net – Very popular payment processor that gives you more options than PayPal.  Low monthly fees to use the service, and lower transaction fees than PayPal.  You have more control of the payment process with this method over PayPal, though you have to go through an application process and it’s a little more technical to setup than PayPal.

There are several other payment processing solutions available, you can read more about them here.

Hosting

If you’re going to use a self hosted e-commerce solution then you’ll need to get your own hosting.  The cheapest alternative is known as shared hosting, which will only set you back $5-10 a month to host your website on your own hosting account.  Shared hosting is when you share server space with other websites to reduce costs, kind of like living in an apartment building.

Your next step up would be a Virtual Private Server (VPS) where you are still technically sharing server space, but you are essentially walled off from the other websites and have much greater control and security over a shared hosting account. A VPS will run you anywhere from $20-$150 a month, depending on the hosting provider and features you are looking for.

After a VPS, you’re getting into hosting your own server (Dedicated Hosting)which is probably too expensive for you at this point (hundreds a month) and requires advanced technical skills to create and maintain.

If you run an e-commerce store, you will be required to purchase a private SSL certificate for your site.  This security certificate encrypts communications on your site, which is required if customers will be entering in any kind of payment information during the checkout process.  The cost will run you anywhere from free, depending on your hosting account, to around $50-75 a year.

Technically, if you implement a payment process where the actual transaction occurs off of your site, like how PayPal typically operates, (they take you to Paypal for the payment and then return the customer to your site after the payment is processed) you may not need an SSL certificate, though I still think it’s a good sign of trust to have one anyway.

A Small Orange – Nice independent hosting company that provides reliable service, good support at a great price.  I used to use HostGator, but their service has gone downhill so much I cannot use or recommend them anymore.

WP Engine – If you’re going with a WordPress website, WP Engine provides dedicated and managed hosting for WordPress websites.  A little more expensive than a typical shared hosting solution, but you’ll get better performance and support.

Converting Visitors into Customers

After you’ve learned the technical details of creating an e-commerce store, you’ll be moving onto the harder part, driving visitors to your website and converting them into paying customers.

You’ll have to learn how to:

1- Drive qualified traffic to your website

2- Turn them into paying customers

Between steps 1 and steps 2, you’ll have to manage all of the steps in between and know how to deal with issues like shopping cart abandonment, product descriptions and how you charge for shipping and handling.  These are all issues that need to be addressed as it doesn’t take much for someone to drop everything and leave your online store if they don’t feel totally comfortable during their visit.

You’ll need to educate yourself on how to run a successful online store as well as converting visitors into paying customers.  Below are some great resources that can help you along the way.

E-Commerce

EcommerceFuel.com – Great blog and podcast on creating and running a profitable e-commerce business.  Talks about niche e-commerce businesses, interviews and general tips for e-commerce.

Get Elastic – Popular e-commerce blog that covers pretty much anything and everything you need to know about e-commerce.

Buildmyonlinestore.com – Another blog and podcast dedicated to creating and running an e-commerce store.  Offers case studies and interviews with people who’ve already had success building and running their own stores.

Marketing & Conversions

Conversion XL – Probably my favorite blog when it comes to learning the details on how to convert visitors into customers.  Dives deep on on all the little things that make people want to buy.

Hubspot – This blog offers a ton of marketing research and advice on how to market your business successfully.

CopyBlogger – Great blog on copywriting for the web, creating an audience through thought leadership and fine tuning your website so it gets found online.

PPC Hero – Great blog about Pay Per Click marketing.  Has a bunch of articles on advertising online for your e-commerce store.

The hardest part is getting started

There is a ton of information and a steep learning curve to build a successful e-commerce business, but the thing that stops most people from doing it is actually to start doing it.  It may be confusing at first, you’ll make mistakes, but you’ll also see that after you spend some time doing it, it’s not as hard as you thought.

Why not extend the size and reach of your physical store front by building a potentially bigger and and more successful virtual store front on the web?  Everything you need to get started is above so get going!

There’s a lot of information above, if you have any questions, feel free to contact me here.

What Spending 117K Has Taught Me About Working With Freelancers

Have you ever thought about hiring a freelancer online before?  If anyone could benefit from outsourcing, it would be small business owners, Lord knows us small biz owners have our plates full.

Over the years my web marketing company, 3Bug Media, has outsourced over 100k worth of freelance work.  That’s only counting using online freelancing platforms like Odesk and Elance, it doesn’t include hiring one off contract jobs locally.  I’ve hired online freelancers for things like web development, graphic design, CAD drawings, writers and bookkeeping to name a few.

hiring-virtual-freelancers

While I do have a few in-house employees, when things get busy, it’s a lot easier and more cost effective to outsource the excess work rather then go out and hire someone and have another mouth to feed regardless if you have work for them or not.  It also allows you to hire (temporarily) for specialized skills that you may only need occasionally, like a graphic designer.

Today I’m talking about hiring freelancers online, where you use an online platform like Odesk or Elance to find a freelancer.  When people think about these platforms they think about hiring overseas, when actually you can find freelancers from all over.  More than half of the freelancers I hire are either in the U.S. or Canada.

I’ve made a lot of mistakes and wasted a lot of my time and the time of the poor freelancers that had to work for me in the beginning, but I got better over time and learned how to find exactly what I’m looking for in a freelancer.

I’ve only been burned twice in 5 years doing this and it was for a grand total of $800.  Not bad considering how much I’ve spent over the years.  I’ve found that most freelancers, regardless of where they are from, are generally honest and hard working people.  Do you get some bad apples?  Yes, but no more than you would have if you were hiring people locally.

So for you small business owners out there that would love to be able to outsource some of their workload, here are some of the things I’ve learned when it comes to hiring freelancers online.

If You Pay Peanuts You Will Get Monkeys

No, you can’t get a top notch web designer for $3 an hour.  You can’t pay someone $10 to write a killer 20 page ebook that will be the cornerstone of your sales funnel strategy.  Yes, you can often get a better rate hiring overseas (or outside of your metro area), but you still have to pay them a decent wage if you want quality work.  That actually applies to hiring for anything, you have to pay a decent wage if you want good people.

The beauty of hiring a virtual freelancer is that you have a worldwide job market of skills to choose from at good rates, it’s not about trying to hire someone at the cheapest possible rate.  You’ll be disappointed if this is what you expect to get.  In fact, some of my freelancers get paid more than what I would pay for someone locally to do the same job, they just have the exact skills I’m looking for.

outsourcing-small-business

Write a Crystal Clear Job Posting

Most people new to hiring freelancers create poor job descriptions because is they are not clear themselves about what they want.  Before you create your first job posting, make sure you understand what skills are needed for the position you will be hiring for so you can write a clear job posting  Depending on what type of job you post, you may receive hundreds of applicants for a single job posting.  There are two things I’ve learned that has helped me write good job postings.

1 – Be very specific about what you want.  Remove all superfluous language from your job postings.  A  job description like “I’m looking for a fantastic writer with a passion for the written word” is totally meaningless.  What’s fantastic to you may be awful for the next person.  State exactly what you want, you are looking for the basic criteria at this point and will be looking for style and skill at the next stage when you start whittling down your list of applicants.  Something like “Looking for a writer with experience and in depth knowledge of the mortgage industry, please provide reference links to published articles related to this topic”.

2 – Write about what you don’t want.  Start excluding people you know you won’t hire right off the bat, it’ll save you time going through resumes later.  If you need a specific expertise, be very clear about it.  Something like “I’m looking for someone who has experience maintaining Magento databases, if you do not have experience in this area, please do not apply”

Be courteous with your job posting (you don’t want to sound like a dictator), but also be very clear and concise with what you are looking for in a freelancer.

Be Patient and Thorough When Hiring

Within the first day or two you may get flooded with hundreds of job applicants.  If you don’t have hiring experience and have never had to sift through hundreds of resumes, this can be intimidating.  The quick and lazy method would be to quickly scan through them, look for a friendly face and some good reviews and go ahead and hire.  Wrong! The time you save at this stage will come back to haunt you when you hire the wrong person and spend the next 2 months pulling your hair out trying to get that freelancer you hired to return your emails.

In all of my job postings, I ask for links to previous work and also look through their reviews (more on both of these below).  Make sure you take the time to look at their sample work and read through their reviews looking for anything that jumps out at you and also for red flags.  Also look at the cover letter they send, I’ve had writers apply for positions (asking for $30+ an hour) and it is riddled with grammar and spelling errors.  Not cool, but they saved me the time of interviewing them.

Dig Deeper Into The Reviews

This is something important I’ve learned with working with freelancers online.  You’ll see lots of 4 and 5 star reviews, even for freelancers that are awful.  So if everyone gets high ratings, how can you tell who is good and who sucks?

For most online platforms like Odesk and Elance, both the freelancer and the contractor get the chance to review each other after a job is closed.  So what happens?  You leave a freelancer a bad review for a crap job and they in turn leave you a bad review as revenge.  So what happens most of the time, even if the job was not satisfactory, many contractors will still give a freelancer a 4 start rating just so they will get one in return.  Other times the contractor feels bad because the freelancer was nice (but did a crap job), so it’s easier to give a good review and be gone rather then cause any friction.

It’s important to read through the reviews and look for clues

  • 5 star reviews but no supporting text or a one liner like “good job”. When I see this,  I discount it.  If a freelancer really did a great job, most people will take 10 seconds to write a few words of thanks.
  • If a new contractor only has 1-2 reviews and they are excellent.  I might take it into account if their are detailed words of praise for the freelancer, but if they are like the above, I will discount them.  This mainly applies to overseas freelancers (IMO) but sometimes they will hire themselves for 1-2 small jobs with another account and leave great reviews for themselves to get started.
  • Look for communication problems in the reviews.  Nothing is more frustrating than having a freelancer miss a hard deadline and then ignore your emails for the next 2 weeks while you go crazy.  If I see comments like “I don’t know what happened, she just stopped responding to my emails”, I know it’s time to move on.
  • Look at the timing of reviews.  If you see some bad reviews but they were from two years ago, it may not negate the several great recent reviews they have.  On the other side, if a freelancer has dozens of great reviews but the last 3 were mediocre, maybe you need to question them about what’s going on before you consider hiring them.

Don’t Trust Sample Work Unless You Can Verify It

I always ask for published work that can be attributed to the freelancer when possible.  Sometimes freelancers mislead people with their work experience and sample work so you need to look for verifiable sample work.  Just because they sent you a Word Doc with some articles in there or have screenshots of dozens of websites they built doesn’t mean it’s theirs.

Take the time to investigate their writing or websites they claim to have created, sometimes you’ll find another author actually wrote the article or an agency actually built the site they are claiming credit for.  Most of the time it’s impossible to verify, but it’s still good to investigate for obvious signs they are misleading you.  And don’t be afraid to ask more questions or to ask permission to contact the website owner to verify they created the site or wrote the article Their reaction to this request will usually give you the answer you’re looking for.

Be Very Clear About What You Want

I can’t stress this part enough.  When you work with a freelancer, be very clear about what you want.  If it’s a logo they are designing for you, please do not email them asking them to ” make something nice”.  Be clear what you want and give examples whenever possible.  When you communicate with your freelancer make sure you:

  • Use exact language.  “I would like a Helvetica font or something closely related” rather than “I want a really classic looking font”.  The more exact your language the easier it is for the freelancer to understand what you want.
  • Ask for hard deadlines.  Mutually agree on a hard deadline to finish the work and how often they should give you a progress report. Something like “So we both agree that you will have the Ebook finished and delivered by the 31st of this month.  And you will send me a progress report every Friday and also let me know if you think you may not be able to meet this deadline”
  • Have them repeat back to you the instructions you just gave them.  This is really important, especially for more complex projects.  If you are on a Skype call and you give instructions on the project, ask them to repeat it back to you in their own words to be sure they understand what you want.  You’ll be surprised how many times it’s different from what you actually wanted.  Usually this is more of a lack of clear communication on your part.  As time goes on, you’ll learn how to give laser focused instructions with little room for interpretation.
  • Only give one task at a time.  Don’t give them 10 different things to do at once, that’s the quickest way for things to get screwed up.  Give one task with specific instructions, when they have finished that task, have them start on the next one.  Every email I send to any freelancer only has a single task in it.

Take Baby Steps When You Start With a New Freelancer

When you first start working with a freelancer, take baby steps.  Don’t unload an entire project on them as a first step, ease them in.  Even with really good freelancers, you’re going to go through a breaking in period where there might be misunderstandings that need to be worked out or expectations that need to be set.  If I hire someone to write a 30 page ebook for me, I will usually have them start out by writing a blog article for me just to get warmed up.  It’s better to clear up misunderstandings and mistakes on a 700 word blog article than a 20,000 word ebook that doesn’t sound anything like you wanted it to.

You’ll become a better communicator

You’ll make some mistakes in the beginning when you first start hiring freelancers online, but they shouldn’t be that painful if you go slowly.  The best thing about learning to communicate with freelancers online?  You actually become a very good communicator because you aren’t there to look over someones shoulder and correct them, you have to be clear from the start.  This has made me a better communicator with my employees that I work with face to face.

So that’s it, hopefully you picked up some tips and are ready to give it a shot,  If you have any questions, feel free to shoot me a message.

Resources:

Odesk – Online platform for finding freelancers from around the world.

Elance -Similar to the above (same company owns both) for finding online freelancers.  Unlike Odesk, Elance lets you search by city in case you want to work with someone locally.

Virtual Staff Finder – A service from a very credible guy, Chris Ducker, who will help match you with a fantastic virtual assistant.

The Four Hour Work Week – Has a lot of info on outsourcing.  Never read it?  It can change your life.

5 Ways To Reduce Operating Costs For Your Business

Reducing costs for small business in recessionWhat are your plans for improving the bottom line for your business?

To increase your bottom line you can do two things:

1- Increase revenue

2- Decrease expenses

While finding ways to grow your revenue should be at the forefront of your planning,  taking a look at how you can streamline your expenses can also have a direct impact on that bottom line.

You generally want to have an “increase revenue” mentality rather than a “reduce expenses” strategy for your business, but recent economic conditions have made that a challenge for business owners.  Sometimes when times are good, we can get sloppy with your expenses, now is a good time to evaluate your business and look for opportunities to save without sacrificing quality.

Below are 5 things you can review in your business that can put more money into that bottom line, where us businesses owners have to live and survive.

Reduce your operating hours

If your business allows for it, and does not need to be open for set hours, consider reducing your operating hours, or even closing for an entire day.  One client of mine, an  upholstery cleaning business, decided to close on Fridays to reduce payroll hours and operating expenses.  We chose Friday as that was his slowest day of the week.  He was able to shave off over $900 a month in expenses and it had no effect on his revenue as almost every customer was happy to schedule for a different day.  He was also able to free up a day where he could work on strategic planning for his business instead of servicing customers all day.

Co-Sharing Workplace

Do you lease/own a physical space?  You pay rent on that space regardless of how many hours you’re operating each month.  If your business allows for it, why not see if there is opportunity in sharing your facility with another business.  A hair salon I know leases a room in the back of their salon to a woman who offers relaxation massages.  She was previously working out of her home because leasing a space by herself proved to be too expensive.  If you lease office space, why not see if you can find another business to occupy your office when you’re not there.  Startups with young entrepreneurs and businesses that deal with overseas customers usually do not operate in the normal 9-5 realm, maybe you can offer them your space after hours.

Review your suppliers

You may have had suppliers for several years, maybe the same ones since you opened your business.  Maybe it’s a good time to look at your purchase history and see if there are better alternatives or opportunities to work out a better deal.  If you’re a good customer, they won’t want to lose you.  If you’re not able to get better terms, then maybe it’s time to look for other suppliers.  Last year I reviewed my business insurance policy after being with the same company for the past 5 years.  By showing my current insurance company 4 quotes I received, I was able to reduce my monthly premiums by almost $200 a month, by doing about 60 minutes of work on my end.

Instead of pay raises, look for value adds for your employees

If you’re not in a position to hand out raises for your employees, but are concerned about losing key talent, try looking at value add opportunities for them.  Despite what you may think, it’s not always about the money.  Things like flexible work hours, more opportunities to contribute, and greater autonomy can lead to greater employee satisfaction that will keep them sticking around even though you can’t offer more money.  Pay them fairly and create an atmosphere people love to work in.

Cut your administrative costs

Take a look at your current processes, are there opportunities to streamline or remove processes that are costing you time and money?  I worked with a real estate agency that was spending almost $2000 a month in printing costs.  An endless cycle of printing, faxing (and re-printing again) and document printing were running up office expenses and creating an environmental nightmare.  They hired an office organizing professional who helped to streamline the communications with their agents and cut their printing costs in half.  They were also able to save about 10 hours a month in filing time as most documents were now stored electronically, being printed only if necessary.

How can you reduce expenses for your business?

All of the suggestions above can help save you money without reducing quality for your customers.  What ways will you look to send more money to the bottom line for your business this year?

Tools To Help You Create A Business Operations Manual

Suddenly the job he knew how to do so well becomes one job he knows how to do plus a dozen others he doesn’t know how to do at all. ~Michael Gerber, The E-Myth

How consistent is your business?

Do you, as the business owner, deliver a different experience for your customers than your employees?  Why is that?  It can be a number of things such as experience, attitude, training, etc.  One of the things that customers like from a business is consistency.  Don’t get consistency mixed up with mediocrity, as you can consistently deliver a fantastic experience….if you plan for it.

When it comes to delivering a fantastic experience, repeatedly, for your customers, look to franchising.  Wait, what?

Who wants to run their business like a fast food chain?  Before you draw up your mental images of what you think franchising is all about, let me remind you that the Fours Seasons Hotel and Resort chain is a franchise.  So is Ruth’s Chris Steakhouse.  Franchises come in all shapes and sizes.

There are many advantages and disadvantages of being a franchise owner.  But one of it’s biggest advantages over independent businesses is that they have a written operations manual that is distributed and used across hundreds (sometimes thousands) of individuals franchise locations.  This is one of the reasons they are able to open and operate thousands of locations…….and you struggle to manage a single location.

As Michael Gerber said in the E-Myth, “how is it that McDonald’s can deliver a consistent experience across thousands of locations, when the average small business owner can’t do it for just one?”

So how do you, as an independent small business owner, go through the arduous task of creating your own written operations manual?

To get a better understanding of what an operations manual is and what needs to go in there, check out this article I wrote on how to create an operations manual.  Once you’re familiar with what you’re supposed to do, I wanted to show you some of the tools I use in actually creating the manual.  These tools can also be used for creating an employee handbook, or just about any other documentation you need for your business.

Purchase our 300+ page Operations Manual Template for only $29.99. Originally sold to franchises for over $1,000. Instant download. Click here to learn more or add to cart now.

Screen Steps

This is my go to tool for creating any sort of “how to” or step by step guide.  Screen Steps is a simple to use desktop program (kind of like Word) that lets you create documentation for anything you need.  It’s relatively inexpensive and will save you loads of time if creating documentation is something you do for your business.  I do warn you that you may get carried away with it…..I created a “How to unclog the toilet” guide for the office, complete with images.  Yes, I do get made fun of.

Use Screen Steps to create an operations maual

Examples of how I use it

  • Operations and Employee manuals
  • “How To” process guides for specific tasks
  • Documentation for software and hardware we use in our business

What makes Screen Steps so much better for this type of work is the way you can grab screenshots on the fly and automatically insert them into the document.  No more downloading and uploading images….a real time saver.  Also, you have the ability to create dozens of short documents/processes and can later merge them into a single PDF document.

Evernote

Perhaps my favorite service of all time.  Evernote is like having a second brain, a sort of junk drawer for your ideas and documents.  You can save just about anything from text notes, images, voice recording, and have them all fully searchable from just about anywhere through their Web, Mobile and Desktop apps.

Use Evernote to store your operations manual ideas

I have an almost paperless office, scanning most paper documents and sending them to Evernote for easy retrieval later.  When it comes to creating an operation manual, I use Evernote to store all of my ideas, notes and images using the mobile app on my phone.  When I’m in the middle of creating a new process, I can record via audio and/or take snapshots that I can later use when I sit down and create a proper document.  Everything is stored permanently so I don’t have to worry about losing that piece of scrap paper that I decided to write my ideas down on.

The video below is a short guide on using Screen Steps and Evernote together.

Jing

I use Jing for most of my screen shots and screen recording.  When creating an operation manual for your team, It’s important to use visuals as a single image can make more sense to someone than 500 words of explanation.  A good manual will incorporate visual guides, and if it’s a digital version, possibly video or audio explanations.

Use Jing to grab screenshots for your operations manual

Jing is a desktop program that you download onto your computer, so that means you can take screenshots of items on your desktop as well as web based screenshots (web based screenshot tools only let you take screenshots within your browser).

Google Drive and Google Sites

Use Google Drive to store operations manual documents in the cloud

While I’m not a raving fan, I am a fan of Google Products, though the free version of Google Apps is no longer available.  Google has created a host of great tools for small business owners, most of which are free or low cost.  I store all of my completed documents created from Screen Steps in Google Drive (their online competitor to Microsoft’s Word) for safe keeping and easy retrieval.  I use Google Sites (easily create external and internal websites) for creating an internal intranet for my business where everyone can access the operations manual online, via a list of links to each document in Drive.  I organize these links in a logical format, exactly how you would create a table of contents.

Sample table of contents-The Small Business Playbook

Binders

An operations manual is only good if people use it.  When will employees refer to your operations manual?  When they are new and in training, and when they need to learn how to do something.  Easy access is very important and an operations manual for your business is useless if it’s inconvenient for your employees to access it.

organize operations manual with binders

I always keep an electronic version of it stored online and also a paper version, stored in color coded binders.  For some processes, we have them posted on the wall for easy reference, you see this a lot with food franchises where employees are working in an assembly line manner.

Purchase our 300+ page Operations Manual Template for only $29.99. Originally sold to franchises for over $1,000. Instant download. Click here to learn more or add to cart now.

It’s only good if you use it

People always ask me what’s the best way to go about creating an operations manual for their business.  I always advise them to start slowly and think of it as a living, breathing documents that you will add to (and take away) as your business evolves and changes.

All it really is is a series of written checklists and how to’s, gleaned from best practices and mistakes you’ve made along the way, pieced together into one big binder.  Make sure it’s organized, up to date and easily accessible to everyone and that you take the time every once and awhile to look it over with your employees to make sure everyone knows it’s there.

Have a question about creating an operations manual or about your business in general?  Contact me here, I’m happy to answer any questions.