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We hope you find this arcthve useful. A subscription to The Small Business Advisor Newsletter is free. Subscribe now - it's easy! The Small Business Advisor Newsletter for June, 1998 CONTENTS
NOTES/TIPS/etc MEDICAL INSURANCE is always a problem for small businesses. However, if you are a member of USAA, check out what they provide via the USAA Health Insurance Agency at 1 (800) 235 8375. Coverage is not available in all States and will not be available in HI, KY or NY. FTP CLIENT. I have been a fan of "WS-FTP" for quite a while but check out "ftp voyager" at http://www.ftpvoyager.com. Highly recommended. Free 30-day trial download (1.8M). Shareware cost is $30. TAX TIPS. Here are a few things for small and home business owners to remember. (They are all taken from the excellent "TaxTalk" newsletter. See details at http://www.isquare.com/tax3.htm) 1. If you conduct business in your home, the cost of your security system is deductible, subject to the usual home office deduction limits. If you can show that the security system would not have been installed except f or the business use of your home, you may deduct its entire cost! 2. Starting in 1998 you may use the standard mileage rate deduction even if the care is leased. 3. You may expense purchases of new equipment up to $18,500 in 1998. Don't forget to consider taking an "abandonment loss" for equipment that becomes obsolete or is no longer of any value to you. TRAVELING?
Check these three very informative and useful travel sites: SMALL BIZ INFO. In a previous newsletter we listed small business resources available from the Government Printing Office (GPO). The Small Business Administraton (SBA) also has a number of inexpensive and useful publications and videotapes available. Write for their catalog to SBA Publications, POB 46521, Denver, CO 80201-46521 or visit their website at http://www.sba.gov/library/resource.html THINK YOU'RE ALONE? According to the National Federation of Independent Business, entrepreneurs started 4.5 million businesses of which 3 million were home-based. It's also interesting to note that nearly 3 million U.S. companies do business via the Internet and it's expected to grow another 1 million within a year. Amazing. WINDOWS TIP. That key on your keyboard with the little windows logo is pretty useful. Try these handy shortcuts - depress this key along with… E to bring up the Explorer R to open the Run dialog F1 to get to Windows help menu F to open the files Find dialog box REVIEW: PAINT
SHOP PRO 5; Simply put, this is a must-have application for ANYone designing graphics for any reason. It is inexpensive and contains nearly as many features as other graphic design software costing five times as much. Furthermore, you can download it for a free 30-day trial evaluation. It is easy to learn and the interface is very intuitive. Version 5 includes numerous new features and tools but the addition of layer support (the ability to build graphics consisting of separate layers) alone is worth the upgrade. The manual is quite useful, as is the on-line help system. Also included is the Animation Shop client which allows you to easily build animated graphics using a Wizard interface. A separate manual is included for Animation Shop. Jasc also offers the reference, "Creating Paint Shop Pro Web Graphics," a 350 page book that covers topics such as web graphic basics, creating simple and advanced graphics, using layers, creating transparent gifs, to name a few. The cost is a whopping $49 ($34 if you join the no-cost Paint Shop Pro Users Group). Considering the completeness of the manual and on-line help, we suggest you save your money. I would have preferred a book that simply contained hundreds of specific graphic design examples. DO YOU NEED A
BUSINESS LICENSE? Depending on the type of business you are starting, you may be required to obtain local, county, State or Federal licensing. It is important to determine which of these will be required before you start conducting any business since heavy fines are usually associated with conducting a business without proper licenses and permits. Most small and home-based businesses will only require a local business license or permit. It is easy to determine what your local licensing requirements are. Simply call or visit your city or county government offices (usually in the courthouse) for information about licensing requirements. Nearly all businesses will require a county or city license to operate. The license is easy to obtain and normally only requires a short visit to the local courthouse. Fees, if any, are small. If you intend to operate a business from your home, be sure to also check local zoning requirements (again, at the courthouse) as well as any property covenants. Zoning requirements are those laws that regulate how property can be used and in some cases, some activities may not be allowed. Certain businesses and professions will also require a State license. Examples include attorneys, barbers, contractors, dentists, most businesses serving food, and social workers. Each State has an agency dealing with these types of businesses. Determine if your business requires a State license by contacting your local government offices. They should be able to give you information as to whether your business will require State licensing. In some cases, these licenses can be expensive. For a very few businesses, Federal licensing is required. Examples would be a business that is engaged in providing investment advice or dealing with firearms. In general, Federal licensing is required if the business is highly regulated by the government. It is best to consult an attorney in these cases. Each State has different business licensing requirements. A good source of State specific information is your local library. Most libraries now provide a "small business" section that includes informative brochures from the local government agencies. Ask at the reference desk. FREQUENTLY ASKED
QUESTIONS ABOUT SMALL BUSINESS Here are a few of the more commonly asked questions we are asked about starting and operating a small or home based business. Maybe you have wondered about these same questions. Q: I'm starting a home based mailorder business that involves the buying and reselling of Musical instruments. I am the only employee and I have obtained a DBA certificate for my business name. Do I need to do anything with the IRS at this time? Should I obtain a federal tax ID number or just my own social security number? A: You do not need to get an EIN (federal tax ID or Employer Identification Number) from the IRS if you are a sole proprietor without employees. You can open your business bank account with your DBA name using your social security number (SSN). You will file Schedule C at the end of the year with your personal tax return, and if you have made a profit, Schedule SE (for self-employment tax) as well. Q: What's a DBA? A: DBA is an acronym for "Doing Business As" (also known as a "Fictitious Name."). Most states require that sole proprietorships and partnerships that are conducting business under a name other than the owner(s) must file for a DBA certificate in the county where business is conducted. The DBA certificate is generally obtained at the Clerk of Court of the county in which business will be conducted. Fees are typically $10 or less and most courthouses have records that may be searched to determine if your suggested name will be unique. Q: I have an idea for a small business. How do I go about finding out if there is a need and what the specifics of that need would be? Do I conduct my own marketing research, and if so, how can I find out the proper questions to ask? I'm sure a company that does this for you would be costly. A: You are right about the expense of market research companies. In general, this can be an expensive approach but there are some things you can do yourself to make a market determination. Basic questions you must answer include: Who are likely customers? How can you reach these customers? How much will these customers pay for your product or service? How should the product or service be marketed? Who is the competition? How to find the answers: Contact your local SBA office (check specific STATE information for contact information) Contact your local SCORE office Check out the Bureau of the Census website (http://www.census.gov) Browse the web for the product or service using major search engines. (this is a POWERFUL approach) As you start this process, you will be led to additional sources of information. It will snowball quickly and you will end up with plenty of data upon which to make your decision. Q: What's special about incorporating in Delaware & should I do it? A: First of all, you may incorporate in any state regardless of where your business is physically located. Delaware has been a favorite in years past due to their very liberal incorporation statues. However most states now have corporation statues similar to those in Delaware. Also, if you incorporate in a state other then where you are located, you may have to qualify to do business in your state as a foreign corporation. Furthermore, you will be subject to taxes in both your home state and the state in which you are incorporated. There is generally no reason to incorporate in a state other than your own. Before you make a decision, consult your legal advisor. WORKING WITH
EMPLOYEES Dealing with employees (contracted or yours) is always challenging and will tax your best management and leadership skills. The following listing, based on a good deal of experience, are 13 suggestions to consider that will help keep you out of trouble when dealing with your employees: 1. Be willing to pay for the best. Remember, you get exactly what you pay for ... no more and no less. 2. Everyone has their own way of doing things. We all seem to forget this and insist it be done "our way." A better approach is to give instructions as to what is needed and allow the individual to provide the method. 3. Remember to always criticize in private and to praise in public. 4. Remember that EVERYONE needs to feel appreciated. Talk to your employees and make certain they know they are providing a valuable service. 5. Stay visible. Make certain all your employees see you at least once a day. Your employees need to know you're involved and interested. 6. Keep your promises. If you say you're going to do something, do it! There are no good excuses in the eyes of your employees. 7. Ask your employees for suggestions on a regular basis. Do this personally ... not just with a "suggestion box." 8. Allow your employees to fail! It is well documented that successes are generally preceded by one or more failures. The employee who is afraid to fail will be less likely to be innovative. It is up to you to see that none of these failures is fatal to the business. 9. Every employee must know exactly what their responsibilities are and what authority they have for carrying out these responsibilities. This usually is accomplished by very precisely written job descriptions. 10. Manage by objectives. Each of your employees should be assigned (by mutual agreement) specific goals to be obtained within a certain period of time. These goals must be measurable and you will periodically review them so that corrective action, if needed, may be taken to get back on track. Managing by objective stresses real results as opposed to a job description, which only lists the individual's responsibilities. 11. Constantly motivate your employees to do a good job. Talk to them about their job and its importance to the business. Maintain an "employee-of-the-month" program with an appropriate certificate and a traveling trophy. Make the monthly presentation with fanfare. 12. Implement an effective training program to encourage promotion. Any employee who thinks they are in a dead-end job will not perform up to expectations. 13. Remember the "Peter Principle"... to paraphrase: Everyone rises to his or her level of incompetence. See that this does not happen in your organization. WHAT'S A NICE
PERSON LIKE YOU DOING IN THE NEWSLETTER BUSINESS? First, a little history. For about six years, my partner and I operated a full-service video operation in the Grand Rapids, Michigan area. We offered everything from complete in-house production to tape duplication to film transfers to PAL/NTSC/SECAM conversions to equipment rental and blank cassette sales. In spite of the dubious economic conditions one finds here in the Rust Belt, we managed to show a 40 percent growth every year. We attributed that growth to several factors; we ran lean and mean (maximum of five full time employees); we worked long hours; we weren't afraid to do whatever the client desires, whenever the client would like it done. And, most importantly, we promoted ourselves like a couple of crazy men. In addition to a large-scale Yellow Pages campaign, and seasonal newspaper and magazine advertising, we decided to publish a quarterly newsletter. Several reasons: it's a relatively cost-effective way to reach both existing clientele and people you'd like to have be your clients. It's a great way to tout your challenging projects, your rates and services, your fantastic clients, and introduce the various personalities that make up your staff. And importantly, it's a communications tool that can provide you instant feedback --feedback that can make a real difference in your bottom line. We published six editions of "The Volume" --one every quarter for a year and a half. It was bulk-mailed to an ever-growing list of clients and prospects --around 1,500 the last issue. And it was VERY effective. In fact, our first issue resulted in $20,000 worth of sales. When you consider the fact we spent about $1,000 for designing, creating, producing and mailing that first issue, it provided an awesome return on our investment! What do you write about? Basically, anything you can think of that will be of interest to the reader. We took half of the front page one issue to let people know we had just added in-house PAL-NTSC-SECAM conversions. We regularly reported on production, giving people an idea of the scope of the projects we work on --both small and large. We introduced our employees and their specific areas of expertise, given news on facility updates and equipment upgrades, and given case histories on unusual film transfer projects and the like. Just take a look around your business; there's probably half a dozen stores waiting to be talked about at this very moment! We tried to keep production simple, too. We settled on a four-page, 8-1/2" x 11" newsletter, folded for mailing convenience. We normally used two colors --always black, and a second color that either supported our main story, or had some sort of seasonal tie-in --green for spring, yellow for summer, that sort of thing. We used as many pictures as possible --ones taken on location, or in our facilities --and we tried to keep the tone of "The Volume" breezy, personal and upbeat. If our business was going down the tubes (which, fortunately, it isn't), we'd never let on to our readership. For many readers, the newsletter is a very real indicator of your corporate success and your individual personalities, and you shouldn't be broadcasting your flops and foibles. So, interested? Let me give you some Rules for Successful Newsletters. 1/ Establish a regular publishing schedule and stick to it! People appreciate stability and regularity --and if you do a good job with a newsletter, you'll find your audience starts to look forward to them. 2/ Be a name-dropper! Oh sure, I know --your competition will read the newsletter and start calling all your clients. Well, if you've done a good job keeping said clients happy, there's no problem. And we've found that clients are like everyone else --they love to see their names in print. It helps build loyalty --and loyalty is hard to buy these days. 3/ Include useful information! We told people why film and slide transfers make great holiday gifts...why they should buy good tape, and tape in SP speed...and give them helpful hints to follow when they're preparing to produce a video. As well as tell them when we're ready with our new rate cards. News they can use. Eighty percent of your newsletter should be benefit-oriented information that your clients can use to their advantage. 4/ Don't get too technical! Everyone in the video business knows what a DVE does, and how to use a vectorscope. But do the people that buy videos care about this information? What ALL clients are looking for is results! In most cases, they're really not interested in whether our cameras have one, two or a dozen chips. They simply wanted to know if we could get their VP of Marketing on tape, and do it right the first time. 5/ Use a return card! Never EVER send out anything --a letter, a rate card, a refrigerator magnet or a newsletter --without asking for the order, and making it easy for prospects to respond to you. Otherwise, you're just wasting money. And while we're on that thought... 6/ Make yourself accessible! We included a postage-paid return card with every newsletter we mail. On it, we asked people to let us know what they'd like to hear more details about. We asked if we should call them and, if so, when is the best time to call? We mentioned our phone numbers in nearly every article, and told readers specifically whom they should contact to get more info on our various services. Don't forget your email address and your URL, if you have a website, too. 7/ Give them away to everyone you know! It does you no good to print a few thousand newsletters to take up room in the editing suite. Give 'em to your friends, your family, your clients, your clients' friends, your kids; mail copies to every editor of every newspaper and magazine in your area. For that matter, send a copy to every regional and national trade publication that you read. Put a copy in every order you fill, every box you mail, and give one to every person that walks in your doors. Remember that just one good order can pay for the newsletter many times over --and you never know where that order is going to come from. 8/ Use pictures! I recommend a minimum of one per page. Black and white reproduces best, unless you're printing in four-color, of course. And don't forget to ALWAYS put a caption under (or next to) the picture. People read these things. Take pictures of your equipment, your staff at work (especially on location shoots), and your clients. It's really pretty simple to put a newsletter together. Here's how we do it. As the official company writer, I kept an open file for possible stories and topics. When I got an idea --maybe it was a case history of a client, or an interesting client product we just shot for a production, or a marketing-related idea that our readers could use --I throw it in the file. When it was time to write the newsletter, I simply sat down and wrote it directly on my word processor program. Spell-check it, print it out, look it over, and decide on photos. If you've got some experience in desktop publishing, you can easily put together a newsletter. In fact, most publishing programs provide templates for such things already. At the time we were publishing our newsletter, I was reasonably ignorant of such programs, and so I simply handed a finished (and all the photos) to a desktop publisher who put the thing together for us. We'd then proof it again, make any changes, and send it over to the printer. When it was done, dried and folded, it went to our mailer for addressing and mailing. It's as easy as that. Well maybe not quite that easy. But the bottom line is that thanks to computer technology, a self-promotional newsletter can be assembled relatively easily and inexpensively. And you'll find that overall, it also can be one of the most profitable sales tools you can use. Steve Yankee is an independent copywriter and sales consultant. Reach him at syankee@springlakemi.com. INCREASE YOUR SALES
AND PROFITS WITH THIS 3 STEP MARKETING PROCESS I've used the following 3 step marketing process with many businesses. It always achieves highly profitable results. This procedure is simple, easy to implement and it keeps expenses to a minimum. Let's take a look at each of the 3 steps in this process. STEP 1 The objective in this first step is to generate inquiries (requests for more information) from qualified, interested prospects. You can get inquiries by placing classified ads online or in print publications serving your targeted market. You can also get inquiries by printing the same classified ad message on a simple postcard and mailing it to a list of prospects known to have the characteristics of your target market. Prospects who request information about your product, service or opportunity are identifying themselves as likely buyers. They want the benefit they can gain from your product, service or opportunity. They'll go through your sales material with a high level of attention. These are prospects who will seriously evaluate your offer and consider taking a buying action. STEP 2 In this step you deliver your sales material and try to close the sale. It's the sales presentation in personal sales, the sales literature and tapes in direct marketing or the visit to your store in retailing. Step 2 is whatever you normally do with an interested prospect to try to convert him or her into a customer or client. STEP 3 Step 3 is your follow up procedure with previous prospects who didn't take buying action in Step 2. You saved their name and contact information... Didn't you? Research has shown that it may take as many as 7 contacts before a prospect becomes a customer or client. This third step (follow up) can produce very profitable business because there's no expense involved in finding the prospects for it. You already have their names and contact information from prior communications. I discovered a technique for follow up messages that gets them noticed and read every time. I begin with a personalized opening such as, "Hello again. Remember me?" Then I repeat the same benefit promoted by the original ad the prospect answered. Here's an example you can copy and use for any business: Hello again Remember me? Several months ago you requested and received information from me about (insert the benefit stated in the original ad or message the prospect responded to in Step 1) I have a Special Offer concerning this. If you'd like to receive free details about it, simply (insert what you want the prospect to do in response to this message) Remember to keep your message brief and use a simple delivery format such as email or a postcard. Either format with a message like the above will be noticed and read by your prospect. I learned by trial and error that 3 months is the most productive interval between follow up messages. It's short enough that the prospect doesn't forget who I am. It's long enough that the prospect doesn't feel hounded. It's also long enough that whatever circumstances prevented the prospect from buying in the past may no longer exist. I delete a prospect's name from my file only after sending 7 or 8 follow up messages without getting a response. You can use this 3 Step Marketing Process in your business to increase both the number of sales you get and the amount of profit you make. It guarantees a continual flow of new prospects and maximizes your potential profit from each of those prospects. (Bob Leduc, Sales Consultant, has several publications available. Contact him at BobLeduc@aol.com or (702) 658 1701after 10AM Pacific time)
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