Tag Archives: Business
Tax time is no one’s favorite time of year. But for small business owners, this year’s filing deadline at least comes with the promise of better rates ahead: Many of the changes included in the Tax Cuts and Jobs Act, passed by Congress in December, are going into effect.
As entrepreneurs, we should expect to benefit–at least, temporarily–from the new tax plan. My company, Manta, conducted a poll in January and found that 83 percent of business owners anticipate their companies will be positively impacted by the changes. Nearly as many, 80 percent, said they support the Tax Cuts and Jobs Act.
Some are already feeling the benefits of having more money in their pockets, according to another poll we conducted last month. 34 percent of small business owners said their business income had increased as a result of the tax reform, just three months into the year. 42 percent have already changed their budgeting or financial planning because of the new tax law.
It’s time to start preparing for the changes–if you haven’t already.
For the most part, the provisions of the Tax Cuts and Jobs Act that benefit small businesses go into effect this tax year — meaning they won’t impact the returns that are due this month.
The 58 percent of small business owners who have not yet adjusted their budgets should get started, however. While that big refund check may be a year away, it’s not too early to plan accordingly and make sure you take full advantage of the potential savings.
The first step is to review your company’s legal structure and determine how it will affect your taxes. One of the most important changes in the new tax law allows pass-through entities (such as S corporations and LLCs) to deduct up to 20 percent of their business income.
However, this doesn’t apply to certain professional services firms. Review your situation with a tax professional or attorney–you might be able to adjust your business structure to take advantage of this deduction.
Make the most of your company’s tax savings.
The Tax Cuts and Jobs Acts allows businesses to immediately write off the full cost of new equipment and other property, instead of depreciating the expense over five or more years. The new law also protects these write-offs from being rescinded in the future.
This is great news for business owners who want to invest in their growth. According to our polls, 28 percent of small business owners plan to use their tax savings to invest in new technology and 21 percent plan to open a new location or expand. The immediate write-off should make these investments (and your cash flow) much more manageable in the short term.
Just check with your tax advisor before making a major purchase–you could run into unforeseen obstacles. For example, the depreciation rules for “heavy” SUVs–those with a gross vehicle weight above 6,000 pounds–are different than for light trucks and vans. You want to be prepared for the potential impact on your taxes.
Streamline your expense tracking and tax prep.
Make sure you accurately track and document all business expenses. Our polls found that 21 percent of small business owners still use paper receipts to track expenses.
Think about that for a second. It’s messy and inefficient, and you risk losing receipts or miscategorizing expenses.
Hiring a pro is probably the best way to ensure that you take full advantage of the new deductions and stay on the right side of the law. The U.S. tax code is confounding to even the most experienced business owners–20 percent of poll respondents told us they didn’t understand all the deductions available to them. Whatever else Congress accomplished with the Tax Cuts and Jobs Act, they definitely didn’t simplify things.
Use a mobile application or accounting software to scan and save digital copies of your receipts and categorize the expenses. Then, when tax time rolls around, you can output a well-organized report or import the data directly into your tax prep software. And if you use an outside accountant or tax preparer, they’ll greatly appreciate you providing a digitized expense report instead of handing over shoeboxes full of paper receipts.
I was in the first 24 months of my first startup, a B2B services business. My team and I had been pursuing a contract at one of the highest-profile early stage companies in the United States, and to our amazement we actually won the deal.
Our revenues tripled overnight, and it put our company on the map. As excited as we were to win the business, had I known then what I was about to experience I would have managed things very, very differently.
Winning this deal nearly became a death sentence for my business. Here’s why:
Servicing the account consumed all of our resources.
Winning this deal was akin to the dog catching the car: we latched on to the bumper and quickly realized that we had zero control over what would happen next.
I knew that this account would require us to marshal most of our resources – cash, time and people – to deliver on our promises. Quickly we realized just how understaffed we were in order to meet expectations, and pulled nearly everyone into the mix; we more than doubled the company’s headcount within 60 days of the program going live.
Our cash funded the headcount growth, our new hires consumed all of our management time, and our inability to do anything but service this customer prevented us from developing the systems and processes that would have made the model replicable. Our lack of bandwidth also prevented us from winning any new business, which became problematic down the road.
This customer knew they were our biggest account by far, and they took full advantage of that dynamic. Every meeting request, every late night phone call, every weekend email barrage — we couldn’t say no.
Customer concentration put our balance sheet under immense stress.
I didn’t have the bandwidth to service new business, and I didn’t have the cash flow to expand the sales team to add more business. In fact, the last thing I wanted at the time was another account to service. This was flawed thinking, as I came to find out soon enough.
Our customer’s business was growing exponentially, and our relationship with them grew in lockstep. It was exhilarating, but it was during this time that I learned a priceless lesson about hyper-growth: it’s a cash furnace.
Our billings with the customer doubled, we doubled our headcount, and our payroll would also double. The payroll debits hit every two weeks, but our customer’s checks came every 60 days. Before I knew it, I was tapped out on a $ 1 million line of credit (personally guaranteed, of course) just to float our customer’s growing receivables. They weren’t aging more than 60 days, but they were growing so rapidly that my credit line couldn’t keep up. I nearly grew myself out of business.
Losing the business was catastrophic.
I received the call two years into the relationship at the contract renewal: this company was bringing these operations in-house. There was no hint that this result was going to happen. Over forty percent of my revenue evaporated overnight.
We hadn’t done the work to diversify the business (we were cash poor, after all) so I had nowhere to put all of these now-idled people. In one of the toughest days of my entrepreneurial career, I had to send 20 amazing individuals packing on little notice. It was one of those soul-crushing moments that hardens you as an entrepreneur.
About those receivables: the customer’s interest in paying us in a timely fashion for services already billed dropped precipitously after the cancellation. I spent the next six months fighting off the bank while I worked to get this now former customer to pay their outstanding invoices. On more than one occasion, I tapped personal savings (including a 401(k) loan) to make payroll. It was a decidedly not-fun experience.
Looking back on this entire episode, the mistakes that I made are glaringly obvious. Seeing only massive revenue gains, I failed to anticipate the negative impact on our operations. We didn’t add new customers, because we didn’t have the cash flow or bandwidth. I was naive about setting a customer credit policy.
Sometimes, landing the whale can be the worst thing possible for your business. In this case, the worst thing for my last company became the best hard-knock education as an entrepreneur that I’ve ever received.
I have talked with hundreds of people about starting a business. People often tell me would love to start a business–then follow up with a list of reasons why they aren’t able to take the first step. From “I’m not good enough” to “not enough savings” and everything in between, there are many reasons starting a business can feel impossible.
And I understand. Starting a business feels overwhelming. Though I knew from my first lemonade stand that startup life was for me, it took me years of hesitating before I finally took the plunge. Here are the seven common reasons you might be hesitating–and seven ways to overcome these fears.
1. I don’t know how.
The beauty of business is that you can learn everything as you go from web resources, books, and peers. Most libraries have a business desk staffed with knowledgeable librarians who specialize in helping people just like you get started with business planning. Many libraries have free online access to the Lynda.com training database so you can learn online free and at your own pace. When I first started my company, Google was my best friend–anything I didn’t know was only a few clicks away.
With increasing numbers of people working for themselves, chances are you know at least one person who is self-employed. Take them for coffee, ask them how they got started. It doesn’t have to be in the same industry. Ask for introductions to other entrepreneurs they know.
2. I’m too young or too old.
I hear twentysomethings say they’re too young and sixty somethings say they’re too old. But it doesn’t matter. The average American will change careers 5-7 times. That’s careers, not jobs. Age is truly one of the most meaningless measures of readiness. You can learn new things, you can adapt to change, and you can start a business at any age. You’re never too young or too old do change your life and start something you’re proud of.
3. What if I fail?
I fail frequently and you will, too. Get comfortable with the reality that 99 percent of everything you do won’t work. But the 1 percent that does work is magical.
4. My parents don’t support my startup dreams.
There are a lot of difficult dynamics at play when discussing your life choices with parents. But unless you’re asking your parents to bankroll your startup, it’s not really up to them. You only have one life, build one that you’re proud of without worrying about the opinions of others.
5. I don’t have the cash.
It’s a common misconception that you need a lot of capital to start a business. If you have access to a computer and the internet, you can start any number of businesses. I started my business with a $ 500 credit card loan and a hefty chunk of student loans. A lot of the software you need is available free and there are a variety of businesses you can start small. As you start collecting payments, you can grow your business.
6. What will my friends or partner think?
If your friends or partner don’t support your dreams, get new ones. Seriously. It’s hard to let friends and lovers go, but if they are only contributing negatively to your dreams, it’s time to let them go. Practice now by telling your friends about your business idea–they might surprise you.
7. I’m not good enough.
Stop it. You know you’re wrong about that. It’s going to be scary, but no one else is better equipped to make your ideas and dreams into reality.
Running your own business is a lot work and there are many stressful moments. But the real rewards of building something you’re proud of far outweigh the imagined obstacles. Now you’re ready to start a business–no excuses!
Video: Microservices and containers: Eight challenges to this approach
We love containers. And, for most of us, containers means Docker. As RightScale observed in its RightScale 2018 State of the Cloud report, Docker’s adoption by the industry has increased to 49 percent from 35 percent in 2017.
All’s not well in Docker-land
There’s only one problem with this: While Docker, the technology, is going great guns, Docker, the business, isn’t doing half as well.
For users, this isn’t that much of a problem. Whatever Docker the business’ future, Docker the technology is both open source and a standard. Docker could close up shop today, and you’d still be using Docker containers tomorrow.
Of course, it’s a different story if you have a contract with Docker. But, while that would prove annoying — not to mention an ugly mark on the balance sheet — it shouldn’t impact your business flow. Containers are now a well-known technology. Securing and managing them continue to be troublesome, but deploying and running them? Not so much.
Still, you should be aware that all’s not well in Docker-land.
What’s the business plan?
Docker’s problem is simple: It doesn’t have a viable business plan.
It’s not the market. According to 451 Research, “the application container market will explode over the next five years. Annual revenue is expected to increase by 4x, growing from $ 749 million in 2016 to more than $ 3.4 billon by 2021, representing a compound annual growth rate (CAGR) of 35 percent.”
But to make that revenue, you need a business that can exploit containers. So, Google, Microsoft, Amazon Web Services (AWS), and all the rest of the big public cloud companies, earn their dollars from customers eager to make the most of their server resources. Others, like Red Hat/CoreOS, Canonical, and Mirantis, provide easy-to-use container approaches for private clouds.
Docker? It provides the open-source framework for the most popular container format. That’s great, but it’s not a business plan.
Confusion is not what you want
Docker’s plan had been, according to former CEO Ben Golub, to build up a subscription business model. The driver behind its Enterprise Edition, with its three levels of service and functionality, was container orchestration using Docker Engine’s swarm mode. Docker, the company, also rebranded Docker, the open-source software, to Moby while continuing to use Docker as the name for its commercial software products.
Read also: Docker appoints industry veteran as new CEO
This led to more than a little confusion. Quick! How many of you knew Moby was now the “official” name for Docker the program? Confusion is not what you want in sales.
Mere weeks later, Golub was out, and Steve Singh, from SAP, was in.
Docker has never explained why Singh was brought in from outside to become the leader, but it doesn’t take a genius to see that core container technologies were becoming commoditized. The Cloud Native Computing Foundation (CNCF)‘s Open Container Initiative (OCI) standard turned today’s container fundamentals, including Docker containers themselves, into open standards. There wasn’t much value-add that Docker could offer its enterprise customers.
As Dave Bartoletti, a Forrester analyst, told The Register at the time: “The poor guy has to figure out how to make money at Docker. That’s not easy when a lot of people in the community just bristle at anyone trying to make money.”
The rise of Kubernetes
When your main value-add is container orchestration and everyone and their uncle has adopted another container orchestration program, what can you offer customers? Good question.
Docker has also been dealing with internal changes. Solomon Hykes, a co-founder and former CTO, was kicked upstairs to vice chairman of the board of directors and chief architect. Hykes, a controversy lightning rod, was also the public face of the company. He’s been far more quiet lately.
Red Hat’s answer was to buy Docker’s chief rival, CoreOS. That gave Red Hat not only its own container platform, but its own enterprise Kubernetes platform: Tectonic.
Docker really needs cash from customers
So, what should you do if you depend on Docker the company’s support? I’d look to my operating system and cloud vendors for help. After all, most of them, Red Hat, AWS, Google Cloud Platform, Microsoft Azure, SUSE, VMware, etc., already incorporate Docker.
Read also: Docker, IBM expand partnership
In the last few months, Docker raised another $ 75 million in venture capital. This brings the total capitalization of Docker to a rather amazing $ 250 million from ME Cloud Ventures, Benchmark, Coatue Management, Goldman Sachs, and Greylock Partners. That’s a lot of money, but I still don’t see how Docker will pay out.
Cash from investors is great, but what Docker really needs is cash from customers.
For most enterprise users, there are no real worries here. Docker or Moby, the container standard is both open source and an open standard. For Docker investors, well, that’s another story.
I wear the same thing every day. My banking is 100% automated. Once a year, I go to Costco and stock up on an entire year’s worth of essentials. My wife thinks I’m a little OCD (and you probably do too!) … but I firmly believe systematizing my life has made me more successful.
I run my life the same way I run my company: with streamlined systems and processes to guarantee success. You can’t go in blind and expect to land in the right place; you need to be planful, create a vision, and establish actionable ways to achieve your goals. It’s not for everyone, but I believe we all can benefit from implementing systems into our day-to-day lives.
There’s a System For That
Entrepreneurs spend so much time building out processes to keep their business running like a well-oiled machine. These systems are the nuts and bolts of everything the business does; without them, the whole thing would fall apart.
Few of us apply the same mentality to our personal lives. Most people are insanely busy all the time — myself included. I run four companies, I have three kids, and I value my personal time, too. The more tasks I can systematize, the more time I have to focus on everything that matters.
Take packing, for example. Most people make a new list every time they pack, but that’s just not efficient: not only are you wasting time on a repetitive task, you also run the risk of forgetting something. I travel a lot so I have a ready-made list that I use every time. This way, I don’t have to overthink it and the process is more efficient. Systematizing my life is about being purposeful with my time and never wasting a minute.
Systems Are Reliable — and Fixable
I’ve always believed in Michael Gerber’s sentiment, “People don’t fail, systems do.” Systems are meant to function cohesively and to set you up for success; if something goes wrong, it can almost always be traced back to a glitch somewhere.
I schedule my working days down to the minute — from the moment I wake up to when I go to sleep. This allows me to maximize my time so there’s never a second wasted, not even my commute: my assistant schedules all my phone calls for when I’m driving, so I can be just as productive enroute as I am in-office. (Don’t worry, I’m always hands free!). If I tried to squeeze calls into my office hours, I’d never get anything done.
It comes down to your mindset: when you start looking at each aspect of your life as a distinct system, it becomes easier to identify, address and streamline for the future.
A Systematized Life is a Simplified Life
Over the years I’ve learned that the less complicated the system, the more likely it is to work. That’s why our systems for our businesses are incredibly simple — as in, they fit on one page. Anyone who reads our operations manual can run a successful franchise. I apply this same philosophy to my life.
How’s this for a simple system: I wear the same jeans, T-shirt and Chucks almost every day. It’s my way of removing an unnecessary step from my life. The less time I waste on decisions like what to wear, the more time I have for more important things like my family and the business.
Maybe it’s because I’m a minimalist, but inefficiency is one of my biggest pet peeves. I swear it’s not just an oddball quirk; being efficient lets you spend less time working and more time living. After all, a simple life is a happier life.
Identify theft is a topic and headline that has attracted many headlines over the past few years, with individuals, large corporations, and government organizations falling victim to identify theft and data breaches. Identity theft and data breaches are always a risk, but can be even more prevalent during tax season, when information is at a premium, and business owners are already under extra pressure.
A study conducted by IBM identifies the average cost of a data breach at $ 3.62 million, and while this figure will obviously vary from organization to organization, the implication is clear. Data breaches and identify theft can have a large negative effect on your business, and lead you to spend large amounts of time and energy repairing the damage caused. Drilling specifically to smaller business, a study by Verizon identifies the following statistics for small businesses and data breaches:
- Average cost is between $ 84,000 and $ 148,000
- 60 percent of small business go out of business within six months of an attack
- 61 percent of all data breaches impacted small to medium size business in 2017
This is a topic that definitely should be taken seriously, but it shouldn’t result in paralysis by analysis — there are things you can do today to protect yourself and your business from identify theft.
1. Set up a virtual private network for your business.
Wi-fi can be convenient, but using an unsecured wi-fi connection is one of the easiest ways for hackers and other criminals to obtain your personal and business information. A VPN network is not a guarantee of securing your personal and business information, but it is more secure than wi-fi, and relatively simple to set up.
Setting up your business VPN, if you feel comfortable setting up a business email account and profile, is something you can do over a weekend, and is well within your budget.
2. Review your business credit report.
Setting up and improving your business credit is a process that many entrepreneurs overlook, but in addition to giving your business the financing it needs, is also something you need to monitor on a continuous basis.
You are entitled to a free credit report from each of the three major credit bureaus, and can request them either from the credit bureaus or from annualcreditreport.com. Even better, you can configure you account to send you automatic alerts and messages to keep you current on changes to your business credit file.
3. Consider identify theft insurance.
Insurance is a thing that you hope to never use, but it’s something you should certainly give serious thought to getting. This is even more true when it comes to protecting the identify and credit of your business — imagine only finding out that someone has taken out loans in the name of your business when you are looking to expand or grow your business?
There are lots of different options out there, so be sure to work with your CPA or financial professional to find a policy that is a good fit for your budget, and your business.
4. Remember that the IRS will never initiate contact except by mail.
As a CPA one of the most common questions I get, especially around tax time, is whether or not a small business owner should respond to a phone call or email from the IRS. Getting an email, or listening to a voicemail that sounds like it is from the IRS can be intimidating, stressful, and even a little scary, but the answer is a definite no — the IRS will never begin correspondence in any way but via mail.
In other words, never provide personal or business information over the phone, via email, or to an online portal without receiving official confirmation that the request is legitimate.
5. Secure your mobile devices.
It’s easier than ever before to conduct business and engage with customers via your phone, tablet, or other mobile device, but that doesn’t mean your security procedures should be any less vigorous than on your desktop computers.
Passwords are a great first step, but some other suggestions including the following, and can be set up for free.
- Log out completely from any banking or payment app when you are done using it
- Avoid downloading any unnecessary apps, or apps that request permissions that seem out of the ordinary, such as access to password/confidential information
- Watch for shoulder surfers, i.e. be aware of your surroundings and anyone who appears especially interested in your phones content.
Identity theft is a real issue, and can cost you time, damage your reputation, and impact your bottom line. That said, taking a few simple steps today can help you secure you and your businesses information, and won’t break the bank.
In 2018, running a remote company is not as difficult as it may seem–and it is quickly becoming a necessity. According to the Bureau of Labor statistics, 22 percent of employees work at least partially in a remote environment and the number–as well as the demand for remote positions–continues to increase. As the market shifts to accommodate this new style of work, it is crucial for businesses to understand how to operate successfully in an online environment.
The key is having the right tools… and knowing how to use them. After testing dozens of platforms with my fully-remote company, these are the select few that have stood the test of time.
Trello CEO Michael Pryor uses an analogy to describe what his product does: If you go camping in the forest, you need a map to navigate out of the forest and a walkie-talkie to communicate with your team.
Trello is designed to be your map. It is a project management tool that is simple in its workflow and user interface–it allows you to lay out tasks and clearly document what needs to get done, who is doing it, and what the current status is. Although simple in nature, Trello offers a tremendous amount of flexibility with integrations, Power-Ups, and customization via their API.
Communication is essential when running any company, and without a physical office, communication can be infinitely more difficult. Slack is your walkie-talkie.
Slack helps build team culture in a remote environment by providing streamlined, instant communication with your entire team. Beyond just communicating, it integrates with Zapier and hundreds of other apps to do everything from scheduling automated reminders to increasing morale with animated GIFs. At Leverage, we have automated reminders for team meetings and notifications that remind a contractor that they need to follow up with a client. A handful of Slack apps add another layer of functionality and help our remote team feel like a real community.
There is a key distinction between Slack and Trello. Trello is a project management software for “to-dos” while Slack is for communication. While you can communicate via comments in Trello, the purpose is to use these comments to facilitate work on a specific project, not simple day-to-day conversations. Pro tip: Slack is for internal communication, email is for external.
Even with Slack, there is still an important communication component that is missing–the classic conference-room style meetings. For that, we use Zoom.
Zoom is a simple video conferencing program that can handle everything from huge team meetings to small one-on-ones. The simplicity lies in the way that it ties urls to meeting rooms. You can easily send a meeting url to your team to get everyone in the same place at the same time. Each individual account also has their own designated meeting url–add in a custom domain like “meetwithXXX.com” and conducting conference-style meetings is a breeze.
Zoom allows for recordings, as well as a fantastic webinar platform. It also has an app that lets you take your video conferencing on the go.
4. Process Street
Every successful company–no matter how big or small–has processes in place to keep things running smoothly. It is incredibly important to document all of the processes within your company so that if an employee is sick or leaves unexpectedly, another team member can easily complete their tasks. Process Street can be used to document anything from the simplest three-step process to the largest, most complex process you can dream up. It can also integrate with Zapier, so you can automate entire checklists or various parts of a process. At Leverage, between Zapier and Process Street we have completely automated many core processes–like our hiring system, for example.
It’s not just having the tools, it’s how you use them.
The most important part of any tool is how you use it–if you’re not using best practices when it comes to these four tools, you may be actually hurting your business.
With Slack, it is important to set up proper channels with the right people. Too many unnecessary people in one channel? You’ve got too many cooks in the kitchen and a bunch of people getting notifications–distractions–they don’t need.
Trello is invaluable for organizing large projects, but if you aren’t using it correctly it can do the exact opposite. Knowing when to separate a project into multiple cards and limiting boards to a minimal number of lists is essential to keeping things clean, simple and organized.
Zoom is a great tool for talking face-to-face, but it should only be used when a face-to-face meeting is absolutely necessary. A remote team has the benefit of eliminating the distractions of a physical office–so keep distractions to a minimum by using these meetings strategically.
Process Street can offer more than just documentation. By having other team members review documented processes you can easily pave the way for innovative breakthroughs. As a rule in our company, anyone who works on a recurring process must have another team member rotate in once per month. That way, we have a second set of eyes looking at every process within our company and pointing out any faults or inefficiencies that others may have missed.
Websites are famous for being your storefront in the digital age. Every expert will tell you you must have a website to capture leads. And that’s true…if you’re building an e-commerce or online business. For other types of service based business, having a website can be a distraction from the real work you need to be doing: getting clients.
Below I explain how you get clients without a website in order to create a successful service-based business.
1. Build your network before you quit your day job.
Like many people in 2010, I drank the lifestyle design Kool-Aid and got wasted. Freedom over my schedule? Flexibility to travel? Working for myself??! Sign me up. High off Four Hour Work Week, I resolved to leave my job. I had a rough idea of my next steps when my friend and author Vanessa Van Edwards said to me, “Don’t do that.”
Confused, since she herself was already a successful lifestyle entrepreneur, I said, “What? Why?!”
“Don’t quit your job. You’re about to make a lot of mistakes. Trust me. Make mistakes while you still have a salary.”
Turned out, she was right. I had no idea how to prospect, write proposals, package up services, or price things properly. I spent the next 6 months building up a side-hustle that let me make those mistakes with a safety net (my day job).
In that time, I attended as many events as I could, listened to every podcast on sales and entrepreneurship, wrote a ton of terrible proposals, got rejected by prospects I shouldn’t have been rejected by, and made a lot of bad cold sales calls and cold email pitches.
Listening to Vanessa’s advice saved me tens of thousands of dollars in burnt runway cash and a lot of mental anguish. By the time I was ready to go full time, I was confident in my skills as a consultant and sales person – and even had some glowing testimonials under my belt.
2. Get out of ‘transactional’ thinking.
You know the daunting 3% completion rate on online courses? I’m the 3%. I love learning, reading, and homework; So when I discovered the MOOC world, I couldn’t get enough.
One of the best courses I took was Earn1K, by the author Ramit Sethi.
With a Bachelor’s in Literature and a Master’s in Psychology, I’d had zero business training in my life, save for some memorable conversations with my dad who is an entrepreneur. Until that point, I believed business wasn’t “for people like me.” In my mind, business was for people who were “numbers people,” money hungry, and didn’t care about changing the world or doing good.
Turns out, none of those things is true.
In Sethi’s course, he taught us to think about business in terms of “solving problems.” It wasn’t transactional, like I’d thought. Business was about “adding value” to others.
This was an enormous mindset shift for me.
Sethi taught me to stop thinking about what I can do and start thinking about what people need.
That changed everything.
In the academic world, I’d been trained to think about myself. My interests, my research, my goals, my credentials, my my my….In the real world, I needed to learn how to make a case as to why anyone should care.
From that point on, every interaction I had changed from “Here’s what I can do!” to “What do you need help with?“
3. Learn to shut up and listen.
When I implemented the “What do you need help with?” approach, everything changed. I wasn’t pushing my services onto anyone. I was pulling their problems out and offering to help them solve them.
Before I took Sethi’s course, I’d sit down with prospects and spend 30 minutes talking about myself – what I could do and why I have the answers. It was annoying at best, unprofessional at worst.
Learning to shut up was one of the most effective sales tools I’ve learned to date. My close rate shot up exponentially because I learned the subtle art of asking questions.
I made prospects do the talking instead of me. Then, I’d restate what I heard. “It sounds like you’re struggling with XYZ. And you need help with ABC, does that sound right?”
Prospects eyes would light up, “YES! That’s exactly it. Can you help me?”
Because when you articulate someone’s problem, they credit you with the solution.
In those initial consults, the goal wasn’t to sell my service – it was to get the prospect to trust me. Listening and asking questions gets people to trust you.
And when people trust you, they buy from you.
4. Focus on sales generating activities instead of ego-boosting ones.
There was a technique Sethi advocated called “Direct to the source” and I used that almost exclusively for my 3+ years in business.
The idea was to go directly to the people who had a problem that you could solve instead of focusing on things like “building your brand.”
As someone who worked in branding and marketing, this was sacrilege.
Still, the idea made sense to me: first, see if you can get someone to say “yes” to hiring you; then, worry about having business cards.
I gave myself a 3-month deadline to test out this approach before I threw it out. My plan was to focus exclusively on getting clients by finding out what problems people had and selling them a solution.
No business cards, no logos, no stationary, no case studies, and no website. All of those things would be a distraction from what I needed to do: Get paying clients.
Three months turned into three years of going directly to clients. That turned into a steady stream of referrals and eventually having to tell people no.
In all that time, only one person ever asked for case studies or my website. And that person had no money to hire me. Go figure.
5. Remember that everyone is a prospect.
If you’re reading this thinking, “But how did you get people to sit down with you in the first place?!” I will tell you: It was that 6-months of learning to endure the discomfort of doing a bad job. Of failing. Miserably.
I got used to pitching myself and doing it wrong (really, really wrong). And doing it again. And again. And again. Until eventually, I sucked a little bit less.
In that time I discovered the key: everyone is a potential prospect or referral source. Everyone.
And when you combine that insight with the “How can I help you?” approach, you begin to see business opportunities everywhere.
For the next three years, I focused all my attention on getting clients, until I finally hit a point where two things happened.
First, I was commanding higher rates and started to need more credibility indicators to bolster my trustworthiness. Second, a good friend told me she wouldn’t refer me anyone until my online presence was “less sketchy.”
That’s when I knew it was time for a website.
The business of e-commerce is booming. And considering how easy it is to build a website, starting an online business has become very competitive. Right from identifying a product with the right target audience, then analyzing its potential, and making a strategic business plan, it involves making many decisions.
A recent report on e-commerce trends revealed more about the growth of e-commerce sales, and insights into the behavior of online shoppers, including:
- E-commerce is growing at a rate of 23 percent every year. Still, 46 percent of small businesses in America do not have a website
51 percent of Americans shop online, while 49 percent prefer to shop at physical stores
Online orders increased 8.9 percent in the third quarter of 2016, while the average order value increased only 0.2 percent.
Of all online shoppers, only 23 percent are swayed by social media references.
Do you notice anything here? Although online sales are increasing, there are many people who still rely on offline shopping. And of those who do shop online, very few are influenced by social media.
So what does it take to convert your website into a highly profitable e-commerce business?
There is no denying the fact that starting an e-commerce business is easy. But scaling up, and making it more profitable than your competitors can be difficult. Here’s a multiple choice question: What do you think is needed to set up a highly profitable e-commerce store?
Directing more traffic to your site,
Improving your conversion rate,
Increasing customer loyalty.
An effective growth strategy actually includes all three of these. And so, that one thing you need to build a more profitable e-commerce business is an effective growth strategy. Let’s take a closer look.
Increase traffic to your website to get noticed.
In the ever-growing space of e-commerce, it can be difficult to get noticed. But there are a number of ways organic traffic techniques that can help drive traffic to your website, including:
Search engine optimization (SEO) – increase your ranking in search engines like Google for more visibility.
Social media marketing – post on Instagram, Facebook, and Twitter, and create YouTube tutorials to reach a wider audience.
Email marketing – drive traffic to your website with email newsletters to keep your subscribers informed about new products and promotions.
Another option is paid ads, which may include:
- Buying ads on Facebook
- Marketing with influencers
- Advertising on Instagram
Improve the conversion rate of your website to increase sales.
If you’ve used the above two techniques effectively, your conversion rate will automatically improve. However, there are some other easy things that you need to take care of in order to increase your e-commerce conversion rate, like:
Make your website mobile friendly and ensuring minimal loading time.
Stop making assumptions about your customer’s needs. Instead use A/B testing to know what they actually need.
Use high quality product images to attract more and more customers to convert them.
Build a user-friendly interface which should include an easy checkout and navigation system.
Use customer retention tools to boost your customer loyalty.
Building a positive user experience isn’t enough. You also need to retain your customers. Acquiring new customers is always a priority for brands. And yes, it is important. But can you afford to lose your existing customer base? No, right?
So once you have customers who have shopped on your website, concentrate on retaining them. No matter how awesome your product or service is, it is your job to make sure your customers are happy and satisfied so that they continue to choose you over your competitors.
A few customer retention strategies that can work for your e-commerce business include:
Introduce loyalty programs and give reward points for repeated sales.
Offer support systems to resolve customer issues and handle their grievances.
Use a customer relationship management (CRM) tool to keep a track of the entire journey of your customers.
An effective growth strategy is key to building a more profitable e-commerce business. In addition to the three main components above, you should keep a track of your performance data to help you make improvements when needed.
There are many business degrees and classes you can take as an aspiring entrepreneur. However, not all of these courses will be able to teach you valuable lessons only an experienced business owner would know.
Owning a business isn’t easy. It takes a lot of different skills and experience to lead an entire team, meet deadlines and complete several day-to-day tasks.
Whether you’ve recently launched a business or are in the process of opening your own company, there are important lessons you need to know. It can take years, even decades to grasp an idea or strategy that can help you and your business grow.
Here are just a few lessons I’ve learned along the way:
1. Family comes first.
The first lesson is the importance of family. Yes, your business is your baby, but you have to prioritize the people you love.
When you’re at home, focus on relaxing with your family and spending quality time with them. Time can fly by when you have a million things going on at work.
Use your time with family to rest and make the most of every minute. Family time is precious because at the end of the day, they’ll always be there for you during the good and bad times.
2. The lows are rock-bottom lows.
Many entrepreneurs will go through rock bottom lows. Whether it’s losing your biggest client or struggling to put food on the table, your lows will force you out of your comfort zone and push you to your limits.
You may experience “make or break” moments. You must power through, no matter how difficult it is.
Over 20 years ago I failed miserably on the first business that I opened. I had clients and cash coming in, but I had to close the business. I didn’t understand cash flow, operating expense, budgeting, or any of the other numbers.
Understanding the language of business–including financial statements–is essential.
The great thing about these rock bottom lows is you can use these tough lessons to embrace the suck and become a wiser person. There’s always a light at the end of the tunnel.
3. The highs are extremely rewarding.
Just like you may experience rock bottom lows, you may also experience extreme highs. Winning a client, expanding your business or being able to afford your own jet are just a few of the many successes you may experience as a business owner.
I’ve been fortunate with my success. My business has expanded to include speaking, online training products, books, webinars, and conducting mastermind groups, all as a way to serve more clients and keep up with demand.
Celebrate the wins and take note of what got you to that point. Learning from your best experiences are just as important as learning from your worst.
4. Little victories can turn into major victories.
Have a new customer? Made a new friend at the networking event? Hired a sales coach? If so, that’s fantastic.
Small victories can go a very long way. You never know when new customers will tell all their friends and bring you a lot more business. The new friend you made at the convention may bring you more prospects than you ever dreamed of.
I’ll say it again: Celebrate the little victories. You don’t know what new opportunities they may bring.
5. Mentors are necessary.
Whether it’s an executive coach or a former boss, mentors are necessary for ultimate success. To reach your full potential you’ll need someone there to guide you on your path.
Owning a business isn’t easy. Having someone always available to give you advice and keep you accountable will give you the support you need to achieve your vision.
6. There’s no “9 to 5.”
Your office hours may be 9:00 a.m. to 5:00 p.m., but that won’t always be the case for entrepreneurs. You can certainly devote yourself to work strictly during these office hours but you can’t expect to not work outside that time.
Some clients may expect you to be available or be able to answer urgent questions at any given time. A crisis may erupt at 6:00 a.m. and you may have to jump on it. It’s important to balance your work and home life but as a business owner, you must understand the term “office hours” may not apply in some situations.
These are just a few of the many lessons I’ve learned throughout the years. Unfortunately, some lessons are best learned with experience but hopefully I’ve saved you some trouble while you work your way towards success.
Never give up if something becomes tough, just power through it, surround yourself with support and you’ll always end up learning and becoming a smarter business owner. Best of luck!