September 29, 2006

News! Minority Grant And Minority Small Business Development Opportunities

Senator Kerry introduced a bill today to assist aspiring and existing minority entrepreneurs in achieving success in the marketplace.

"Minority entrepreneurs are underrepresented at the helm of America's small businesses, which means that they are not accessing the opportunities, the financial stability and the sense of pride that business ownership can offer," said Kerry, who serves as ranking member of the Senate's Committee on Small Business and Entrepreneurship. "By investing in minority entrepreneurship, we can ensure that these hard working Americans have every opportunity to pursue the American dream of owning a successful business."

African Americans represent 12.3 percent of the population but only 4 percent of all U.S. businesses. Hispanic Americans represent 12.5 percent of the U.S. population but just 6 percent of all U.S. businesses. Kerry's bill would create an Office of Minority Small Business Development at the Small Business Administration to increase lending and contracting opportunities for minority small businesses. The head of this new office will work with SBA's partners, trade associations and business groups to identify more effective ways to market to minority business owners.

The bill also establishes a grant program at Historically Black Colleges and Universities (HBCU) and at Hispanic Serving Institutions to steer students toward entrepreneurship as a career option. "To get at the heart of the racial disparity in entrepreneurship, we've got to excite these kids about owning a business," said Kerry. "This program targets high achievers at these institutions, giving them the skills, knowledge and desire to succeed in business."

The bill also creates the Minority Access to Information Distance Learning Pilot Program to create distance learning programs for small business owners interested in contracting with the federal government.

Finally, Kerry's proposal reauthorizes the Socially and Economically Disadvantaged Business Program, which provides a Price Evaluation Adjustment for Socially and Economically Disadvantaged businesses as a way of increasing their competitiveness when bidding against larger firms

Contact: Brian Rice of the Senate Committee on Small Business and Entrepreneurship, 202-224-7834

Posted by David at 1:22 PM | Comments (0)

April 3, 2006

For Small A Business Owner Who Wants To Increase His Income

Here are eight way a small business owner can increase income.

Few business owners analyze the comparative value of their customers, then cater to, sell to, price to different customers differently.

Few business owners carefully analyze the comparative contribution to net profit of different products, services, sales reps, employees, departments, their own activities, then keep some, jettison others accordingly.

Few entrepreneurs manage their time half as militantly as I do.

Why?

Because few business owners ever get that they are in the money business. If they did, they'd be constantly equating everything to money, measuring everything in monetary terms, making decisions based on the money.

There are eight main money factors to think about constantly in business, to be constantly trying to improve:

1. Price
2. Customer Value
3. Transaction Size
4. Business Value
5. Margin
6. Income Extracted
7. Frequency or Continuation Of Purchase
8. 80/20, 95/5 Rules

With PRICE, we look at elasticity, premium levels or add-ons, even target markets that might accept higher prices.

With CUSTOMER VALUE, we measure the value of each customer in gross, contribution to net; try to improve many; clone the best.

With TRANSACTION SIZE, we look to up the average. In volume businesses, even dimes back differences. In fast food, it was Super-Sizing. In the hotel business, the 50-cents added to the bill for the newspaper, the $2.00 local phone access charge, the $3.00 bottle of water consumed all bump the total, average transaction size.

With BUSINESS VALUE, we look to create proprietary goods, intellectual properties, location, systems or other advantages, as well as control of customers, continuity of income, etc. to equate to equity. We must also focus on the INCOME EXTRACTED by the business owner, because captive dollars are non-working and at-risk dollars; illusion.

With MARGIN, we look to control costs, raise selling price, create the greatest possible spread.

With INCOME EXTRACTED, we look at the long term value of each customer by optimizing the maximum value that can be extracted from the relationshp over time.

With FREQUENCY or CONTINUATION, we either have continuity, or we monitor and work to increase frequency, which may mean sourcing more products, creating more offers, communicating more often.

Stay tuned for more about the 80-20 and 95-5 rule.

Dan Kennedy

Posted by David at 4:39 PM

March 26, 2006

Small Businesses And The Parthenon Principle Of Multiple Streams of Income

Small Business Owners Better Be Prudent And Build Multiple income streams. It's All About Mitigating Risk.

“Don’t put all your eggs in one basket” — no doubt you’ve heard this adage many times before, especially as it applies to the investment world. A diversified portfolio of stocks, bonds and cash is often touted as the best way to protect your assets by minimizing downside risk. What is true of investment, however, is just as true in business.

A business especially a small business may focus on delivering a single product or service. You may not have the overhead that larger businesses sustain; you can therefore dedicate yourself to selling your offerings at a reasonable price, while aiming like a laser at your target market. However, nothing is certain, and economic cycles will come and go. It is wise, therefore, to focus on developing multiple streams of income for your business as a hedge against any possible market downturns.

One practical application of this idea is in selling what are commonly known as “bread and butter” items on the side, while you keep selling your main products. For example, consider the case of a store that sells, and services, personal computers. The computers represent their main product line. However, the store also sells “accessories”.

These accessories come in the form of cables of every variety, printer cartridges, CDs, and so forth. While these are certainly small ticket items, it is fact that they have some of the largest profit margins. Therefore the store wisely stocks up on a wide assortment of accessories—their bread and butter items—while continuing to sell and service personal computers.

The smaller products may not be protection against as catastrophic a risk as complete business failure, but they help bring in extra streams of income to bring in a consistent cash flow during times that the main revenue streams fluctuate.

Look for a way to spin-off your main income-generating business into multiple revenue streams. Perhaps, in addition to providing your main service, you can also derive extra income by imparting what you know to others. You may be able to conduct—and charge for—seminars in your line of work, or work part-time at a community college, vocational school or business college.

Think of the big, wide world of information products as well. You could write an ebook selling important information related to your line of work, and sell it from your company’s web site. While you’re on the web, consider the lucrative side profits that can be generated by affiliate programs. Find companies with products that complement your own, and become their affiliates. Some affiliate programs provide high commission rates that can earn you a tidy income on the side.

The key is to think in terms of what kinds of new, but related, income-generating products can be derived from your core business. A catering service, for example, can put together a series of cookbooks, and sell those to its customers as well. The same business might even engage in a concentrated Internet marketing campaign, selling its services from its website and even contributing to various ezines, sharing their expertise with consumers on the world wide web.

It’s important, however, that you do not treat your web site or Internet marketing campaigns as nothing more than glorified advertisements. In order to sell on the web, you will need to provide quality, usable information, time and again, that people will come to rely upon. This method of ‘soft selling’ will qualify your prospects, and make them all the more eager to buy into your products or services.

Are you a service professional, such as a computer programmer, writer, or graphic designer, for example? One popular way these days to market your services is by joining the increasingly popular ‘reverse auction’ outsourcing web sites, such as Elance.com. These sites function as talent auctions, drawing buyers and providers from around the world who post, and bid upon, various projects.

The advantage that the outsourcing sites provide for service providers is that they are usually low-cost venues in which they may market their services. Sometimes only a small monthly fee is charged; apart from this, no money is spent on advertising. You may wind up networking with important business contacts in these sites who can take your business to a whole new level.

However, you will have to know what your minimum hourly rate is, and how efficient you can be in delivering the end product to your buyer. A fixed-bid approach does not allow for much flexibility, should the project scope change during the course of the work. Therefore, you will need to be clear about requirements, communicate often, and know how to work quickly while maintaining a decent standard of quality.

None of these ideas may evolve into anything more than supplemental income. But imagine if you have multiple ideas going at once. Each of these income streams becomes like the multiple tributaries of a river; little by little, you will be bringing in extra wealth, and who knows where one or more of those tributaries may ultimately extend.

David
Small Business Resource

Posted by David at 7:27 AM

November 21, 2005

Small Business Development - Building Long Term Relationships Is Key

Buliding long-term relationships with customers and employees is key to developing a thriving small business that depends less on active efforts to sustain cash fow and profitability.

I once worked for a digital consultancy that developed web sites for UK and USA top 100 companies. The company's portfolio included some of the most prestigious companies in the world. But despite this valuable asset, the company was always struggling with to grow and to increase profits. Problem was: the company spent 90% of its time pitching for new business instead of building long-term relationships with its existing customers.

Here's another example of how important it is for you to build long-term relationships with your customers and employees:

DD is a bit of genius. When it comes to thinking about business, he has few peers. This natural gift has given him an advantage over his competitors. He can often find brilliant, money making solutions where others find obstacles.

DD makes a lot of money as a business development consultant. In all the years I've known him, there's never been a 12-month period during which he's made less than a million pounds. And I've known DD for 15 years.

So you'd think he was in the "too-rich-to-worry" category of wealth, wouldn't you? Oddly enough, he's not. He's still struggling to earn a living. In his fifties - still youthful but on the declining slope - he must work as hard to support his lifestyle as he did when I first met him.

This is not the way it's supposed to be. As you get on with your career, everything should gradually become easier. It should be easier to get the work done, easier to handle the problems, and easier to make the money.

So what is DD doing wrong?

In a nutshell: He is not able to develop productive, long-term business relationships.

This wasn't always apparent to me. I used to think that DD's problem was some version of attention deficit disorder (the modern psychological plague). While it's true that he has never been great at staying focused on one subject for any length of time, he could have overcome this problem by surrounding himself with people who could.

That's what a smart small business person does:

1. Identify what it is that you do well and put 80% of your efforts into doing that better. Make that skill your major contribution to your business. (In this case, coming up with marketing solutions has and would be LC's contribution.)

2. Identify what you do poorly and align yourself with people who do that well. (In DD's case, that would mean people who could handle details and follow through on projects that he initiated.)

When successful business people accept awards, they invariably thank their team. I used to think such gratitude was political. Now I believe it comes from the heart. Because to achieve anything of importance, you must not only possess a spark of genius and a ton of drive, you must also be smart enough to surround yourself with people who can do well what you do poorly.

DD is aware of his shortcomings. And he has attempted - many times - to find people who can help him build his small business. But, for some reason, those people never stay around very long. Instead, they stick with him till they have learned enough to make it on their own ... and then they seem to disappear.

That leaves DD in the worst possible situation: with a deflated small business and the unhappy prospect of having to find another potential superstar and start all over again.

If this had happened only once or twice, I could rack it up to bad luck on DD's part. But it's happened consistently for years. Which has led me to the inevitable conclusion that, despite his personal charm and intellectual faculties (see Word to the Wise, below), DD doesn't know how to maintain long-term business relationships.

Think of it this way: DD has spent his life as a high-income earner, but he's never built a small business. What is the difference? In a word, "equity."

In the context of this conversation, I think it is fair to say that one purpose of a small business is to establish equity. Equity is a form of wealth. It is stored value. The equity in anything (a business, a car, a house, etc.) is, roughly speaking, its net worth - the difference between what you can sell it for and what, if anything, you owe on it.

If DD had been able to train people to convert his talents and skills into products and services that other people could produce, his businesses would have equity.

But that's never happened. His small businesses continue to depend on his ongoing work to produce income. Almost as soon as his good people figure out how to do what he does, they leave him.

From DD's perspective, it may appear that his proteges keep "stealing" his equity from him. And there is certainly some truth in that. But the real problem is that DD lacks the skills to maintain long-term relationships with his key employees.

There is nothing I'd like better than to see DD sail into an easy retirement, with his proteges running his small businesses for him and sending him fat monthly cheques. That is not going to happen, however, unless he figures out what he's doing wrong - what is driving them away - and adopts a new strategy to keep them.

DD needs to study the theory of compound returns as they apply to his knowledge. Here, I'm talking about the effects of compound returns with people. DD never enjoys the benefits of compound returns on his relationships, because they don't endure.

That doesn't have to happen to you. If you want to become rich and continue to get richer and richer with less and less effort, make it a priority to not only find superstars ... but also to develop long-term relationships with them.

David
Small Business Resource

Posted by David at 11:42 AM | Comments (0)

September 21, 2005

Small Business Owners Should Not Make These Mistakes Over Contract Tendering

There are two basic business rules that a small business should not violate when it comes to contract tendering. These classic rules are illustrated is the following "Hurricane Katrina" and "Iraq" cases:

In awarding two big contracts related to Hurricane Katrina, the Bush administration has violated two very basic rules:

1. Don't give somebody a contract without at getting at least one other competitive bid.
2. Don't agree to cost-plus pricing.

The contracts, for temporary housing, were both awarded to politically connected companies: Fluor Corp. and Bechtel National Inc., a division of Bechtel Group Inc.

One can understand why a novice business owner would make this mistake: You are eager to get the business going and don't want to delay progress by reviewing bids. You trust the company you favor not just to do a good job but also to price it fairly, so you opt for one-stop shopping.

We've all done it and, for most of us, experience taught us why the rules against doing so were created in the first place. A vendor that knows it's getting the contract, however well intentioned, will naturally take less time in studying the project before it bids on it. That lack of early analysis leads to not just sloppier pricing but also less creative approaches to solving problems. Cost-plus pricing means mistakes will be paid for by the customer (in this case, the U.S. government) and not the vendor. Again, that means less attention is paid to the process.

If this were the first time the Bush administration made this mistake, you might be able to forgive them (and that's a stretch). But this is exactly what they did in Iraq, where many billions have been spent with such disappointing results.

Normally I don't make political comments but if you're a small business owner, the above are good examples to bring to your attention. We learn from our mistakes - just you remember not to make the same mistakes in your business dealings.

David Davis
Small Business Resource.

Posted by David at 1:47 PM | Comments (0)

May 24, 2005

Growing Your UK Small Business

The outlook for UK small business for the coming year is optimistic. In fact, many small business owners in the UK believe their businesses will perform better in 2005 than in previous years. This is encouraging news considering the economy suffered a bit of a decline last year. As the world’s fourth largest economy, the UK handled the recent economic hard times better than most other countries.

UK small, mid and large business owners attribute much of their positive outlook to recent goals made by the Government to keep inflation and borrowing under control. In fact, many UK small business owners plan to increase their recruitment and hiring efforts in the coming months. Already at all-time highs, the employment picture looks promising. To read several current articles about the outlook of the UK economy, visit Britainusa.com

If you’re a UK small business owner planning to hire employees in the upcoming months, you’ve got some things to take care of, especially if this is your first time hiring employees. It’s true that once you hire employees, you’ll have others with whom you can share your workload. But at the same time, you’ll be creating a whole new type of work for yourself. With employees you’ll have payroll responsibilities, health and safety responsibilities and general employee-related responsibilities such as writing job descriptions, scheduling, and performing periodic performance reviews.

UK small business owners, especially those who hire friends and family or who have only a few employees on staff often make the mistake of assuming that these employees are capable of working without any policies and procedures in place. Other UK small business owners know they need written policies and procedures, but don’t have time to assemble these types of documentation. If you are nodding your head in agreement with either of these scenarios, stop nodding and take action. If you don’t take steps to control your employees, you’ll soon find you’re not in control. And worse, you could find yourself involved in costly litigation that could put you out of business.

There are plenty of books, software products, and companies available that can help the UK small business owner with these types of employee-related issues. If you’re going to invest the time to put together these types of guidelines and procedures, you want to make sure you do it right. One valuable source of information is DTI . Here you’ll find information about motivating your employees, offering employee training programs, creating flexible work environments, effective ways of dealing with employee diversity and more. Plus, you’ll find additional links to help you through the employee management maze.

Spare yourself from hearing those dreaded words, “That’ not my job!” or “You never told me I was supposed to be at work at exactly 9:00 am!” or any of the other spine-tingling outbursts employees are known for. As the owner of a UK small business, you owe it to yourself and your business to remove any and all potential for employees to make assumptions!

David
Small Business Resource

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March 16, 2005

At Last A 2005 Budget That'll Cut Red Tape For A Small Company

The Chancellor is set to announce in his coming budget a number of measures that will finally alleviate the red tape that's a burden to small business. His speech is expected to focus on reducing the multi-billion pound burden of regulations of red tape blighting the energies of entrepreneurs.

Over the past 20 years small businesses have been promised more than thirty times by different British governments that they are going to address the problem of red tape that stifles small businesses. This budget it seems will finally address this long standing issue.

Gordon Brown has promised to get rid of unnecessary regulation that stops small companies from progressing by bringing the UK into line with the Dutch enterprise model based on cutting red tape through targets.

The Director General of the British Chambers of commerce who met with the Chancellor last week said he was encouraged at the chancellor's promise to cut the excessive red tape burden faced by small businesses.

While this is good news for small business owners, the federation of Small Business says small businesses will be skeptical until they see Mr. Brown delivers on his promises.

Reasons to be hopeful that the Chancellor is not making empty promises include the following:

. Gordon Brown visit to China put into focus the burden faced by small business in the UK. In China the whole emphasis is on deregulation.

. He is also due to announce the creation of an executive body to oversee future regulations in a new "one in, one out" approach to business compliance. The body, known as the Better Regulation Executive, will implement recommendations made under last year's Hampton Review, which set out to examine inspection and enforcement regimes.

Mike Warburton, senior partner at Grant Thornton said "If the government's desire is to encourage entrepreneurship, then it must provide tax incentives that are genuinely fair to people who are starting up on their own by introducing tax rates that are lower that apply to company employees," he said.

"At present, there is no level playing field. Lowering the tax rates for small companies would be an incentive to ordinary people to break the mould of being an employee and help them to do extraordinary things."

Based on Sunday Times article

David
Small Business Resource

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March 8, 2005

How Small Business Owners Can Take Advantage of Market Trend

Spotting market trends early can give small businesses a competitive advantage but real benefits come from being second to market on the coat tails of a larger company that has done all the research and development.

So how do you spot market trends?

Take fashion goods, many big companies use North Eastern England as their testing ground before deciding whether or not to roll out on nationwide basis.

David Lewis who runs a marketing consultancy said: Key to success is to find out what's going on in the marketplace and this means being out in the filed and listen to what people are saying.

It's no secret amongst savvy Internet marketers that when considering developing a product or service you can research the Internet to find out the keywords people are searching on the search engines and by going to book stores and looking at magazines that people are spending money on.

David Lewis said big companies employ people called "cool hunters" to find out what's going on in the market place and owners of small companies have to be their own cool hunters.

Lewis also said to find out what customers are thinking you need to do what they do: read the same magazine, join the same clubs and frequent the same places they do.

Once you've done your discovery in identifying a trend the next step is to get the timing right and this often means being second to market. Being second rather than first to market means you let the big company prove the market and incur the development and marketing costs from which your small small company can reap the benefits.

For more information on how small businesses can take advantage of market trends read the full article
on How to take advantage of a new market trend

David
Small business Resource

Posted by David at 8:46 AM | Comments (0) | TrackBack

March 3, 2005

How A Small Business Owner Can Make Money By Loving People

The Financial Times in its "Business Life Enterprise" column of 2nd March 2005 dedicated half a page on the business successes of Emma Harrison, a successful entrepreneur who has many mottos one of which is: "Be ruthless on the issue and kind with people". A motto based on her father's advice.

As I read the article my main thoughts were on how on earth she was able to get such awesome publicity: Half a page in the FT broadsheet that's read by hundreds of thousands of readers some of whom will undoubtedly turn into customers. Such publicity is worth its weight in gold!

Publicity aside, the article elaborated on Emma Harrison's baptism into business life after working in the public sector. Ms Harrison was named woman entrepreneur of the year in 2003 by Inner City 100, a government backed scheme.

So what can you as a small business owner learn from Ms Harrison's entrepreneurial successes and mottos?

Ms Harrison believes, and I quote "I am not trying to make a load of money, but trying to do something worthwhile." So Ms Harrison is more interested in people rather than making money. It's easy to say that when you're sitting on a £55 million fortune. But let's focus on her practical entrepreneurial insights that small business owners can implement and grow their business. These include:

1. Don't make the mistake in thinking that you are a big hairy spider sitting at the centre of the web, thinking the whole depends on you: Ms Harrison starts businesses and play the role of absentee owner. Instead of mothering her babies, she employs others to nurse and manage them while she distance herself from the day-to-day operational concerns.

3. Practice the art of delegating: Ms Harrison says "One of the mistakes many small businesspeople make is to think that they are the big hairy spider sitting a the centre of a web twitching away, and thinking that the whole thing depends on them. It does not." Taking advice from her own mentors she has recruited both chief executive and non-executive directors to fill the gaps in her knowledge, such as finance and accounting.

3. Embrace mentoring as being natural to entrepreneurship. Ms Harrison's first mentor was her father who taught her how to run a launderette and a small industrial training establishment. Ms Harrison will soon be competing against other mentors who'll feature on Channel's 4 answer the BBC's Dragon's Den - a reality TV series called "Make Me A Million" in which budding young entrepreneurs will be helped in turning £60,000 of start-up capital into £1m.

4. Diversification is key: Ms Harrison own several businesses and does not believe in putting all her eggs into one basket. What Jay Abraham call the "Parthenon Principle." Ms Harrison's new invention is targeted at asthma suffers who are allergic to bed mites. Apparently 25% of the weight of your bed pillow is bed mites. Other business include management of £300m retraining and small business support contracts through 100 offices for public sector clients. Small business also use her A4E's services.

Her A4E company was one of four foreign companies to be picked to run the first welfare-to-work schemes in Israel.

5. Hire a publicity expert or invest in an excellent publicity course that teaches you the are of getting publicity (preferably free).

There you have it, an insight into the entrepreneurial skills, practices and motto of one of the UK's small business entrepreneurs.

What's you view on Ms Harrison's entrepreneurial style and motto? Also, do you include free publicity as part of your marketing strategy?

David
Small Business Resource.

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