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What’s a Facebook Like Worth?
Sep 16th
Facebook and comScore recently published a white paper on “How Brands Reach and Influence Fans Through Social Media Marketing.” The document is full of some pretty interesting case studies on Starbucks, Southwest and Bing, with regards to how they use their Facebook Pages to generate interest, buzz and business.
How to Measure a Like
What’s interesting to me is that we’re finally getting away from measuring ROI for social media in the terms of “this interaction = this in sales.” It’s about time. According to the white paper, Facebook fans can be valued in several ways:
- By increasing the depth of engagement and loyalty of fans
- By generating incremental purchase behavior
- By influencing friends of fans
So you can see, it’s hard to put a dollar amount on any one of these values, yet they are all tremendously valuable.
Why Friends of Fans Are Important
Another tidbit I learned from this report is the importance of friends of fans of a brand’s Facebook Page. If you’re a fan of, say, Starbucks, there’s a pretty good chance your Facebook friends might be interested in the brand as well. And brands realize this. According to Facebook, in looking at the top 100 brand Pages, they determined that for every brand’s fan, there are another 34 friends of fans that the brands can reach. So exponentially, you can reach a lot more people than just those who click “Like” on your Page.
From the report: “Starbucks’ Fans and Friends of Fans showed the highest average propensity to visit the brand website, with Fans 418 percent more likely to visit Starbucks.com and Friends of Fans 230 percent more
likely.”
Getting More Eyeballs to Your Page
According to the report, for brands that post updates five days a week, an average of 16 percent of Fans are reached. It’s all about what appears in that person’s feed when they’re on Facebook. Post too rarely, and your content won’t be seen. Post too often, and you irritate people. The report suggests that to increase the likelihood of reaching your fan base, you should focus on highly relevant content that your fans will want to read and share, and to post more regularly:
A Facebook analysis suggests that each incremental day of publishing branded content from the Facebook Page increases the reach among Fans by approximately 2.5 percent.
That’s good advice any brand, small or large, can use in marketing on Facebook. The report had some other great statistics, so I suggest you check it out for yourself.
View full post on Small Business News, Tips, Advice – Small Business Trends
What’s Your Ideal Sales Process?
Sep 6th
I write quite frequently about sales and how important it is for everyone to be able to articulate what they do and sell. Isn’t it unfortunate that the image of a hyped-up, intrusive, snarky, used car salesman still permeates our perceptions? Why is this image still so prevalent? Because of that “predatory” salesperson, the one who just sells something to someone for the sport of it, many people lack adequate respect for the sales profession.
And profession it is. In fact, professional sales is becoming part of the degree curriculum of more and more colleges and universities. I have great respect for high-level professional salespeople. I was one for 24 years in broadcast radio. In many ways, sales today is very different than it was even five years ago!
Developing the Process That Works for You
When was the last time you had someone ring your doorbell to sell you something, or just stroll into your office or place of business to sell anything other than flowers?
I found a great article from Business News Daily, “How to Conquer the Fear of Selling,” by Dave Mattson, CEO of Sandler Training. In it, he talks about selling as a science in developing an “ideal sales process” and says anyone can be trained to have one.
I believe that. Over the years I have hired, trained and worked with salespeople from many walks of life. The ones that believe in what they sell, love sales and work on their own unique process are the ones that do the best long term.
Today’s entrepreneur and small business owner must embrace a “sales mentality” to succeed. The sales process has changed very little over the years. It’s still fundamentally about building that “like, know and trust” with people so that you can move your goods and services, to help them, for a fair price.
Don’t get intimidated by this. Rather, get empowered by the opportunities there are to:
- find a prospect
- qualify the prospect
- analyze their needs
- match their needs with your solutions
- negotiate
- consummate (close) the sale
- provide customer service and retention
When you think about it, today offers us all so many more ways to accelerate this.
Passion has power
If you love what you do, love what you sell, and love how it can benefit and has benefited others, then simply focus on that “selling approach” and make it your ideal sales process. There is power in that passion!
To help you, here are the Top 50 Sales Blogs from BlogRank. Some awesome resources for today’s new face and language of sales!
What’s Your Ideal Sales Process?
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart: What’s Happening with Angel Investing
Aug 9th
Last year, the dollar value of angel investments increased 11.7 percent from a recent low of $18 billion (measured in 2010 dollars) the year before, according to analysis by University of New Hampshire’s Center for Venture Research (CVR). While this increase marks the first rise in angel dollars invested in real dollar terms since 2006, the amount put into companies in 2010 remains below that in every year from 2003 through 2007. In 2010, the amount invested by angels was only 5.6 percent higher in real dollar terms than that supplied in 2002.
Click for larger chart (in new window)
The trends are very different for the number of companies financed by business angels. Despite a slight dip between 2007 and 2008, the CVR reports a consistent increase in the number of angel-backed companies. Between 2002 and 2010, the number of companies financed by business angels rose 71.9 percent, according to the University of New Hampshire research group.
The result of these divergent trends is a steep drop in the size of the average angel investment from $528,000 in 2002 to $325,000 in 2010 (in real dollars).
Why angels dropped the average size of their investments 38 percent in real dollar terms between 2002 and 2010 remains an important unanswered question. Any thoughts?
Source: Created from data from the Center for Venture Research.
Chart: What’s Happening with Angel Investing
View full post on Small Business News, Tips, Advice – Small Business Trends
Now That I’ve Incorporated: What’s Next? The Most Frequently Asked Questions After Incorporation
May 20th
Over the course of my career, I’ve helped over hundreds of thousands of small business owners incorporate a business or form and LLC. And certainly there are many questions leading up to the process, such as, What type of business should I form? What’s the difference between an S Corp and a C Corp? But I’ve also found there can be just as many questions after incorporating a business or forming an LLC.
I’ve put together some of the more commonly asked questions to help you navigate life after the incorporation or LLC formation process:
I used to be a sole proprietor and I had a Federal Tax ID number. Do I need to get a new Federal Tax ID number now that I’ve incorporated/formed an LLC?
The answer here is yes. An LLC or corporation is its own separate entity (remember, an LLC or corporation can sue, be sued, get a loan…) and as such, it needs its own Federal Tax ID number, also known as an Employer Identification Number (EIN). Think of business formation like the birth of a child. Once a child is born, it needs its own Social Security number. The same holds true for your business.
As a sole proprietor, you’re able to identify your business with either your Social Security number or an EIN. However, if you’re operating your business as an S Corporation, LLC, C Corporation or other legal entity, you must obtain an EIN for that entity. Otherwise, you will not be able to open up a business bank account or file your business tax returns properly.
After I incorporate or form my LLC, what happens to my sole proprietorship?
This question needs to be answered on two fronts:
- From a tax perspective: you should consult your accountant/CPA about when is the best time to close the books on your sole proprietorship and open them on your corporation/LLC. This decision can have some pretty hefty tax implications and some professional advice can go a long way.
- From an entity standpoint: if you form the corporation/LLC under the same name as your sole proprietorship, you can start conducting business under the corporation or LLC. In this case, you can either cancel the DBA (Doing Business As) that you had set up with your sole proprietorship, or just let it lapse.
If I have a bank account as a sole proprietor, can I convert it to the corporation or LLC, or do I need to open up a new bank account?
No, you will need to close the books on your sole proprietorship (again, remember to check with your CPA/accountant on the best time to do so) and then open a new bank account under the corporation or LLC.
Once I form a corporation or LLC, is my name automatically protected in all 50 states?
No. Your name is not automatically protected in all 50 states upon the formation of your corporation or LLC in one state; you are merely preventing another from filing as a corporation or LLC in that same state.
What you are inquiring about is trademark protection. You’re not actually required by law to register a trademark. Use of a name instantly gives you common-law rights as an owner, even without formal registration. However, you should consider trademarking your name for proper legal protection — after all, you’ve spent untold hours deliberating on the ideal name, and you’ll be spending even more cultivating brand recognition. Trademarks registered with the U.S. Patent and Trademark Office (USPTO) enjoy significantly stronger protection than common-law (unregistered) marks. In a future post, I’ll discuss the topic of protecting your business name and brand in more detail.
If I am doing business under multiple names, are all my names, including my website, protected under my newly formed corporation or LLC?
If, like most businesses, you’re going to be operating under any variation of your official company name (i.e. CorpNet vs. CorpNet.com vs. CorpNet, Inc…), you will need to file DBAs for each of the variations. You should have your corporation/LLC file the DBAs so they operate under your corporation/LLC.
The same holds true even if you’re going to operate multiple ventures (for example selling handmade soaps, knitwear, jewelry…) under the same company. You can establish one main company (i.e. Susy’s Corp) and then have Susy’s Corp file multiple DBAs for each of the specialized brands (i.e. Susy’s Soaps, Susy’s Knits…). This way each of the smaller companies can reflect the branding and presence best for their specific markets, yet still enjoy the legal protection of the main holding company.
Do I need to do anything else to keep my LLC/Corporation in good standing?
I’m going to address this issue in detail in my next post, but the short answer is yes … your work isn’t entirely done after you submit that initial paperwork. For both the LLC and corporation, you’ll need to file an Annual Report (requirements vary by state). In addition, you’ll have to stay on top of any major changes (for example, did you authorize more shares? Did a board member leave?) by filing Articles of Amendment. Stay tuned for my next post to learn more about how to keep your LLC or corporation compliant.
Now That I’ve Incorporated: What’s Next? The Most Frequently Asked Questions After Incorporation
View full post on Small Business News, Tips, Advice – Small Business Trends
What’s Wrong With Groupon (and How to Succeed Anyway)
Apr 22nd
The first wave of reaction from retailers to Groupon was overwhelmingly positive. Where else could you get hundreds of people to buy from your business so easily? The second wave wasn’t so positive. Businesses were losing money on the deals, and didn’t have the staff to accommodate the customers.
So where do we fall now? Is Groupon inherently evil, or is it a fantastic marketing tool? The answer, I’m afraid, is up to you.
The Problem
In looking at the businesses that suffered from their Groupon (and similar deal sites) offers, the connection seems to be a lack of preparation and unrealistic expectations. Restaurants simply didn’t have the staff to take care of the steady flow of traffic they’re likely to see after a deal.
Then there’s the revenue (or lack thereof) generated from the deal. Word has it that Groupon takes 100 percent of any deal under $10 (the assumption is that once customers visit your business for the deal, they’ll spend more than the $10). Many smaller coffee shops suffer because the average bill is $10 or less. It turns out that Groupon fans are cheap, and don’t really like spending more than the value of the deal.
And there’s the matter of Groupon users who never comie back as repeat customers. If you lose money on the first visit, your hope is that people will come back for more and bring their friends. That’s not happening.
The Solution
Groupon’s not for everyone–and if you don’t execute a unique strategy for how you’ll handle the deals, it won’t work for you. Try these tips to get more out of Groupon:
1. Plan for the surge. You can put stipulations on days people can use the Groupon and give it an expiration date. Then plan to have extra staff on hand based on the number of deals sold.
2. Capture the customers. Sure, you can give them their “free” muffin and bid them adieu–or you can encourage them to connect with you via social media and Foursquare for more good deals, as well as ask for their email addresses when they check out. Give them as many ways to connect as possible (with a benefit to them, of course) to keep the relationship sticky.
3. Calculate your costs. If your average bill is under $10, you might not want to do a deal with Groupon. But if your average sale is more, then shaving off $10 shouldn’t put you in the red. Know how much your costs are, and base your deal on what you can afford to lose.
4. Look beyond Groupon. Local and specialized deal sites like Spaphile and Juice in the City are sprouting up everywhere, and they may offer you a better cut of the profits than Groupon does.
What’s Wrong With Groupon (and How to Succeed Anyway)
View full post on Small Business News, Tips, Advice – Small Business Trends
After Tax Time: What’s Next for Your Business?
Apr 19th
Another April 15 (or April 18 this year) has come and gone, and you’ve dutifully sent in your tax forms for one more year.
If you’re self-employed operating as a sole proprietor, tax time can be yet another reminder that you haven’t addressed your business structure yet. Maybe you started your business as a side project, and a sole proprietorship made sense. But now, filling out that Schedule SE and paying all those self-employment taxes make you cringe. And maybe your tax advisor has mentioned that you could reduce your taxes by forming an S Corporation.
The end of tax time is a perfect time to reassess what’s next for your business. Is it time to take that next step and create a legal structure? Here are some things to consider:
Are you looking to lower your payroll taxes (self-employment taxes)?
The S Corporation can help business owners reduce their self-employment or Social Security/Medicare taxes. As an S Corporation, you’re able to split your profits into two payment types: salary and S Corp distributions. You pay Social Security/Medicare tax (i.e. 15.3 percent) only on the salary portion. Meaning, if your business made $100,000 in profit and you pay yourself $50,000 in salary (and then $50,000 in distributions), you’ll only need to pay the Social Security tax on the first $50,000.
Of course, you can’t just go ahead and pay yourself $5,000 in salary and $95,000 in distribution. The IRS looks for “reasonable compensation” for any shareholder who is employed by the business. And they do watch this closely. This means you need to make sure you’re paying yourself market rate for the services you provide to the S Corporation.
Bear in mind that every business has a unique financial situation and it’s always wise to consult with a tax advisor or CPA on your own situation.
Do you want to protect your personal assets?
Without incorporating your business or forming a Limited Liability Company (LLC), your own personal savings and property are at risk to settle any debts of the business. Once your business is an S Corporation, C Corporation or LLC, it becomes a separate legal entity. This means that the corporation or LLC (and not you) is responsible for all of its debts and liabilities.
I know you don’t anticipate angering clients or defaulting on any payments. And most likely, you’ll never encounter this kind of trouble. But things do happen. A legal business structure gives you peace of mind that your retirement savings won’t be wiped out by your business venture. And since creditor judgments can actually last a total of 22 years, forming an LLC or corporation can protect the assets you’ll have in the future, not just what you own today.
When’s the right time to incorporate?
Your corporation’s “start date” is not retroactive. Any tax benefits you might receive apply from the date you incorporated. If your corporation receives a filing date of April 30, 2011, you’ll still be required to file your taxes as a sole proprietor for the first few months of the year up till April 30, 2011; then you’ll file a corporate tax return for the remainder of the year.
However, if you’re concerned about liability protection or your CPA is advising you to incorporate, there’s simply no reason to wait. Now’s a great time to invest a little effort in getting your legal structure squared away and your business set for many tax days to come.
After Tax Time: What’s Next for Your Business?
View full post on Small Business News, Tips, Advice – Small Business Trends
10 Charts That Illustrate What’s Wrong With the America
Mar 16th
Image: Lisa Yarost/Flickr
The American economy is in flux, to put it mildly. Especially if you compile individual conditions, like high unemployment and food-stamp usage, into a bigger picture. That’s just what we attempt to do with the 10 graphs in this post.
We’re All Unemployed
T
Chart source: Calculated Risk.
If you need any more proof that we’re in a big, fat recession, the unemployment numbers above should do the trick. 43.9% of unemployed people counted as long-term unemployed as of February 2011, meaning they’d been without work, but looking, for 27 weeks or more, according to the BLS. That translates to 6 million people. 8.3 million people are working part-time jobs because that’s all the work they can get.
One million people count as “discouraged workers,” people who have looked for jobs but, due to lack of opportunities, have given up their search. Note that the government doesn’t apply these people to the unemployment rate, because people who aren’t looking for jobs, no matter the reason, don’t count. Our true employment rate is probably closer to 11% of the population than the official 9%. These “missing workers” mean that the labor force participation rate is around 64%.
Here’s a BLS chart on the labor force participation rate:
A Record Number of People are on Food Stamps
Chart source: Zero Hedge, 44.1 million people were receiving an average of $134/month in food stamps in December 2010.
The government initially created the food stamp program in 1939 as a way to help unemployed people eat. Now, most of a century and one full circle later, everybody’s unemployed again–and food stamps are hot.
“Food stamps” are more of a food card now: If your income is below the federal poverty line, or hovering at it, you can get a debit card with a $100+/month, government-paid food allowance. In 2009, 20,000 new people a day were getting them, a record not seen since the Great Depression.
With even supposedly high-falutin’ Orange County and Forsyth County residents clamoring for stamps, government-subsidized grocery shopping has gone mainstream. Roughly 50% of Americans receive food stamps at some point before they hit the age of 20, according to Washington University research cited in this New York Times article. More than one-fifth of the people living in Washington, D.C. and Mississippi use food stamps, according to Democracy Now.
Our Child Poverty Rates Are High
Chart source: Child Poverty League
Poor kids are more likely to be unhealthy. Thanks to the ‘paradox of hunger and obesity,’ they’re also more likely to be poor. With expensive medical care, that poor health only feeds poverty and debt, creating a vicious circle.
Here are some more jarring child poverty statistics, from the National Center for Children in Poverty:
* Children comprise 25% of the US population, but 36% of impoverished people.
* 41% of all children (25.4 million) live in low-income families.
* 46% of toddlers (5.9 million) live in low-income families.
America is in Serious Debt
The Wikimedia Commons chart above shows countries’ foreign reserves minus their external debt. The charts below show how sharply our debt has increased during recent years.
Can you imagine the interest that comes with that debt? To cover it, we either need to print more money (a la QE1, 2 and 3) and/or increase taxes. In a sense, inflation is an “invisible tax,” too. When everything gets more expensive because of said interest payment management systems, we foresake spending money on other things. In a consumer spending-driven economy like ours, this makes me wonder how we’re going to pull off economic improvement at all.
We Heart Consumer Debt
Chart source: Zero Hedge
We, the indebted citizens of this indebted country, are taking on reams of individual debt to support the consumer spending that props up our indebted nation. Cashing out on refinances and home equity lines of credit fueled this problem in the noughties. More recently, consumers have been closing credit card accounts and saving money, mostly to fortify themselves in the face of steady unemployment and inflation, and also because it’s harder to get a loan from the bank or a HELOC. You might think this would hurt consumer spending, but the truth is that in an economy with as uneven a distribution of wealth as ours, the people on top who hold most of the money can actually bolster consumer spending more than the shrinking pool of middle-class savers.
We Don’t Perceive Inequality
Chart source uncertain, but it was featured in both Mother Jones and the Washington Post.
Americans have always been an optimistic bunch. But does the deluded belief that a thin crust of people at the apex of the wealth pyramid don’t actually hold most of the country’s wealth, that it’s more evenly distributed than that, count as optimism? Or is it more of a foam pad to keep us from realizing that our country is actually a plutocracy?
If you’ve ever wondered why everyone around you seems to be downwardly mobile, but Wall Street keeps going up, the chart below might explain it.
(Chart source: Business Insider)
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What’s An Entrepreneur’s MBA Degree Really Worth?
Mar 9th
I’m an entrepreneur. The last time I was an employee was in 1983. So what did I get from my MBA studies? 
It wasn’t about earning power. I quit the fancy high-paying MBA job I’d recruited into just a few weeks after graduation. I went back to the consulting firm I’d worked with while I was at business school, before I graduated. And I was self employed less than two years later, and I’ve never worked for anybody else since then. I was an employee of the company I founded and owned.
So was it worth it? Yes, many times over. Because of business school, as I developed my own business, I had a general idea of all the parts and how they came together. I knew enough about finance, accounting, marketing, sales, and administration to do it all myself in the beginning. Later on, as the company grew, I had experience and some knowledge about each of the key functions in the business.
Nobody taught me entrepreneurship. I didn’t learn that in school. What I did learn, though, was enough about business to make starting, running, and growing a business conceivable. Maybe I would have made it anyhow, but I doubt it. Knowledge is power. And it gives you the confidence to take risks and move forward.
Is the value of an MBA degree the income with the degree less what it would have been without the degree, less the cost of the degree, and the earnings sacrificed while studying? What’s education worth? Do you measure it in salary? The value of studying literature is the earning power gained? Fine arts? Philosophy? What about business or engineering?
I don’t think so.
What’s An Entrepreneur’s MBA Degree Really Worth?
View full post on Small Business News, Tips, Advice – Small Business Trends
What’s a Newsletter Good For, Anyway?
Mar 7th
After browsing our newsletter subscriber numbers, I found that a relatively small proportion of our newsletter subscribers open their newsletters and click through to the featured articles.
I can relate. I get a whole bunch of newsletters. A number of them disappear into my spam folder; I have labels for others–and I never jump into the trenches to actually read them. I generally don’t unsubscribe because a) I’m too lazy, b) I think the newsletters might be useful some day (hoarder mentality), or c) the marketing software behind the newsletter makes it impossible to opt out (the diabolical strategy).
I do read a couple of newsletters. One of them only comes quarterly, but is so rich in useful information that I feel like I’ll be missing something if I don’t read it. Another has essential resources for my field, and comes every two weeks. Another one I open sometimes, because I know exactly what to expect from it, and I read its information if I feel the subject is something that could be useful.
In online marketing, newsletters are seen as valuable tools, yet in my experience the minority of people use them right. Why are companies so excited about their newsletters? We already know what they do wrong, but what works?
Why Companies Want Newsletters
“Newsletter guru” Jim Palmer writes that:
1. Newsletters increase brand awareness.
2. Newsletters help build relationships with customers and potential customers.
3. Newsletters are an awesome way to introduce new products or services.
4. Newsletters can enhance your reputation as an expert in your industry.
5. Newsletters have a longer shelf life than other types of marketing have.
6. Newsletters are often read by multiple readers.
7. Newsletters are a great way to differentiate yourself from larger businesses, which typically don’t do a customer newsletter.
Sounds decent enough. But what makes consumers actually open newsletters? How do you harness them?
Online marketing expert Bryan Eisenberg, who has excellent input on the topic, says that “the real value of a good list is the participation it stimulates between the subscriber and your business…Worthwhile interaction truly engages your audience.”
He also writes:
* When people opt in, treat it like a sacred trust. Their time (and yours) is extremely valuable.
* Be transparent with your list. A list is an opportunity to build customer relationships based on open, honest interaction, not an opportunity to strut and posture before prospects.
* Offer true value: to your subscribers; relevant content and meaningful offers. No fluffy content or gimmicky offers. Not sure what readers perceive as value? Ask them!
* Let go of unengaged subscribers after a reasonable amount of time. Sometimes, prospects lose interest. It happens.
* Stop pretending you have control. Give customers more choices of how they get and use your content.
* Ask yourself: would you want this e-mail in your inbox? Be brutally honest.
He also says to set up expectations right away. Send a welcome email to every subscriber making it very clear how often you send the newsletter, and what you write about. He says to kick unengaged subscribers off your list periodically (send them an email to re-opt in if they haven’t been active in 3 months or so). That way, you cultivate a newsletter that’s useful to your most engaged readers, who are the ones you really care about anyway.
Does the Business Pundit newsletter measure up?
We do a summary newsletter, which Blue Sky Factory says provides “attention generation hub if your source content is valuable.” It’s basically a sum-up of what happened in business this past week, plus our best tips, humor posts, interviews, and book reviews from that week.
Would I want to read it? Yes, I love good news summaries, because I don’t have time to catch every major detail during the week (not for business, but in terms of international politics, science, and other topics that we don’t focus on here).
Is there fluff? Nope, unless you consider the stuff that’s on the blog fluffy. The missing link here seems to be letting go of unengaged subscribers, and giving existing subscribers more options on how they receive their emails.
We’d also like more feedback on the kind of newsletter that works best for our business-minded audience. I provide you with what I would want, but I’m not 100% certain that’s what you’d want, too. Please leave feedback in comments below so that I can get a better idea of how to create a newsletter that you’ll love.
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What’s Really Inside Decaf
Mar 1st
Fake Science clarifies what differentiates decaf and regular coffee:
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