Business Alone

We've been discussing the futility of buying into many of the so-called "business in a box" solutions that are available to the online entrepreneur.

It seems they are everywhere today and many are being promoted (and even developed) by folks that have never been involved with a successful business.

In the previous post, I gave you four good reasons why you should avoid these one-size-fits-all business packages and why they just don't work.

Here are some additional reasons (continued from yesterday's post) why you should avoid them:

OK. I've given you a bunch of reasons why you should NEVER rely on a business startup package that seems too easy, guarantees your success, is the same for everyone, and prescribes the subject of your business.

They are pretty much doomed to failure even before the owner makes her very first sale!

Nationwide small business start-up statistics show that after one year of existence, only one in five new start-ups (20%) are still actively doing business.

And of the 20% of start-ups that make it after one year, only one in five is still operating after five years.

Everyone that goes into business as a solo operator needs to develop a certain amount of "creativity" or non-traditional thinking. Why?

Business in today's world is extremely competitive, full of dime-a-dozen copycat boring companies that survive marginally (or not at all), but always willing to reward fresh thinking combined with outstanding execution.

You don't have to be creative in the sense that your ideas are revolutionary or Nobelian.

In fact, my definition of being creative, in the business sense, might go something like this: the ability to transcend the usual thinking and commonplace practices of most businesses.

You don't have to have one-in-million ideas; you just need to discover ways to add value, merit, worth and importance to your business, especially in the eyes of your targeted customers.

It's a nasty name, "swipe files," but it's an idea you should implement immediately if you haven't already gotten yours started!

If you're like me, you run across great little ideas and tidbits on the Internet every day.

But if you don't record that idea, or web site, or reference, or "how to" hint for later recall, you will have forgotten that even existed within a day or two.

If you've been involved in copywriting, direct ad creation, web site development, graphics creation, email headlining, and any number of other online business tasks, you've probably heard the term "swipe files."

That's kind of a nasty or unpleasant term, but the concept is smart and the results of you building such files will be significant as you venture into your new information business.

If you don't know what a "swipe file" is, or you're not convinced you need one (or several), read on.

Often magazines and news articles about self-employment include tests or checklists that you can review to see if you possess the traits or qualities that are necessary to become a profitable business owner.

You might wonder how accurate such "predictors" are of future success.

My experience in studying a number of these tests is that results vary somewhat depending upon the audience polled and the skill of the survey designer and the results analyst. Nothing is black and white.

So are these predictors useless? Do they have any value to aspiring solo business owners? Here's my take:

Indicators or predictors are just that - they give us some clues about what might be - based upon probabilities captured in repeated tests. There are always exceptions and cases that fall outside the expected range of results.

In the previous post I suggested that there were some personality traits that were commonly measured (through self analysis testing) that seem to be indicators of the entrepreneurial mind set and qualities necessary for future business success.

I also cautioned that if you don't possess all these qualities, and still desire to begin a business venture, you should not be swayed from your decision on the basis of apparent lack of "the right stuff."

Some traits can be "learned" or acquired over time and some may not be quite so relevant to success in certain types of business that a solo operator may have chosen.

This can be one of the most perplexing and difficult decisions you have to make as you decide to create a business.

Here are some questions to ask yourself that may help you to come up with the right decision for YOU.

Obviously, there is no "one best way" to enter self-employment. The choice you make on how to do it will most likely depend upon your current state of affairs: your employment situation, your tolerance for risk, your family size and makeup, and your ability to take care of your financial obligations possibly without a regular paycheck.

There is some wisdom in not rushing things at the outset. Quitting your full time job and putting your loved ones at risk can be a very scary proposition.

If you lose your medical and life insurance coverage, will you be able to afford these new out-of-pocket costs?

How long will you be able to last if your daily and monthly living expenses have to come from your savings account?

Creating a new business is like preparing for a wedding: there are a thousand details that must be planned and executed.

It's easy to overlook some of the steps that are important to a business - especially when they are often perceived as being distasteful, expensive, and sometimes purely nonsense.

So it is with securing the necessary permits and licenses to make your business legal, keep you out of hot water, and legitimize your company.

Every county will have its own procedure and you may find that this is the place to begin tracking down all the licenses and permits that you need. This is the place I started, but was told to register my business name with the State first . . . so that's what I did.

The County Clerk's office will usually be helpful in getting you pointed in the right direction. They'll be able to send you to the proper window to pay your fees.

The type of business you're creating will have a lot to do with the licenses and permits you'll need from the County government.

Picture yourself leaving on a journey to a far away place you've never been to before. You're not quite sure how to find this place, but you think you can ask questions of the locals along the way so you'll be able to zero in on your final destination.

Let me ask you: "What's the single best resource you could take with you on the journey if you had your choice?"

Would it be lots of money to buy your way in to the directions you need? Maybe.

Would it be a detailed map that showed you the exact way to your destination? Maybe.

What would you want to take on your journey?

Regardless of your business structure (sole proprietorship, partnership, or corporation) you should apply for an EIN (employer identification number) if you want to be seen as a legitimate business.

Yes, sole proprietors can get by without one. Social security numbers are acceptable on income tax filings for persons without employees. But often those who would do business with your business, i.e. suppliers and vendors, want to see an EIN as a way to verify that you really are in business.

Your EIN will be assigned to your business by the Internal Review Service. It's your taxpayer ID, so to speak, and it will be used by federal, state, and local governments.

Most of the professional solo businesses that I am aware of have followed a very traditional model in how the business is set up and operated.

Most attorneys, doctors, counselors, and accountants design their practices around the way their predecessors did business before them.

They may decide to locate in a single office or they might opt for a group setting where several others of their practice get together to take advantage of a single building with a common reception area, staff of office assistants, and shared billing system, parking lot, and rest rooms.

Each professional is in business for himself, but his business only thrives as he is able to apply his trade.

He bills at an hourly rate, sees whom he chooses, and sets his own schedule, although his assistants really handle the appointments and flow of work throughout the day.

For many years, solo businessmen worked among the ranks of the self-employed as "organizers" or facilitators of groups of like-minded people.

They held titles such as "consultants," "coaches," "mentors," and "instructors." Sometimes they operated strictly as solo entrepreneurs being the only source of expertise in their company.

Others banded together to form a "team" or group that offered the same type of service but included the perspective and experience of multiple experts that often worked together on one project to provide the service.

These workers would organize their own curriculum, design their own delivery approach, and earn their fee by teaching or coaching their clients either in a one-on-one setting or small group atmosphere.

Since the beginning of time, solo business persons have opened and maintained retail stores that sold products to walk-in customers.

Sometimes the stores featured only specialty items, like a bike shop or bakery. Others carried a range of goods (like a mercantile) but remained small enough that one person could man the shop by himself and perform all the daily functions necessary.

There would be goods to order from manufacturers or wholesalers, shelves to stock, customers to wait on, books to be balanced, and cleaning at the end of the day.

Remember how difficult it was to be 13?

Everybody was always on your case trying to get you to do things you really didn't want to do.

Taking out the trash was a simple and easy enough chore that I was assigned. But oh, how I loved to "forget" to do it.

I wasn't much for raking leaves, pulling weeds, or my least favorite job - cleaning up after the pets.

I was constantly on the lookout for ways to avoid the daily tasks that needed to be done around the house.

There are actually dozens of smart and effective ways to begin the business creation process that will reduce the risk of a new venture for the owner.

I'll focus on what I call the ten "B"s. These are logical and practical ideas you can follow in your own business startup mode to reduce your risk.

They're not theoretical or academic guesses; but tried and proven ways of protecting your assets, both time and money.

Before you take this step, I would encourage you to do a little research and study into the practice so you'll at least be aware of the laws, regulations, and tax consequences of this practice.

Should you pay your children (or the neighbor's kids) with cash to help you in your business and not call them employees so you can avoid the laws governing child labor standards? I won't answer that - it's your decision.

Generally, no youth under the age of 16 is permitted to work more than four hours in one school day. They can't be employed before 5:00 am or after 9:30 pm (unless the following day is a non-school day.) You can't hire a youth for more than 8 hours in a 24-hour period.

Youth that are 14 and 15 can be employed in certain situations and businesses that are non-hazardous like restaurants, janitorial services, fast food chains, landscaping firms, etc.

Digital information is not unlike written information, except that it exists in the form of little data bits that consist of "1s" and "0s."

Every character and many symbols that we use in our language can be represented "digitally" and transferred electronically over wires and cables and even through the air waves.

Those characters are developed or "written" in software programs like MS Word and others but are "saved" as digital files which can then be transferred to other media and output types.

Often, when a new businessman enters the market, he often forgets or totally ignores the cost of support for his products and services.

Depending upon the type of business you operate, that could be a very costly mistake. Why?

Because if you don't understand fully the expenses of doing business in its entirety, there is a good chance you will have a good portion of your profits consumed by these "hidden costs."

Especially in online information sales, the tendency sometimes is to assume that you won't have to deal with very many customer issues.

Let's face it, many folks that start their own solo business are first time entrepreneurs. They have no history, background, or training in small business development or operation.

That presents a great challenge - one that can certainly be overcome - but one that must be recognized and met head-on.

You see, operating a business is like most other professions. You don't just declare that you want to be in business for yourself and all of a sudden possess all the skills and knowledge that you need to be successful.

Preparation for business success can come in many ways.

Some follow a regimented career path through college and possibly graduate school to learn the art and science of becoming a business owner.

Others choose to get their education from home study courses, books, tapes, and other media presentations.

Most businesses are started by folks that don't have formal training in business. The school of "hard knocks" is their educational backdrop.

We're discussing the steps you can take as a business owner to make yourself and your company a professional, trusted, "real" business; not some sloppy and suspect half-hearted attempt to grab a few customer dollars.

Here's the next step: Search out one or more experienced mentors to guide you in your business.

If you can find experienced business people that are willing to provide you some direction, advice, and counseling, you will be miles ahead of the pack of those who simply "go it alone" with no additional help.

There is a critical business principle that you need to learn and implement in your solo Internet business that will serve you extremely well. In all digital businesses it will become either an invaluable friend or a nightmare of an enemy.

Some stay in business for years and spend a lot of valuable daily time on managing this area of their business, while others adapt and implement an automated system that does almost all of the manual work for them.

I'm talking about implementing and operating a system of records and data keeping that will aid you in maintaining your business and your customers.

Every business needs to establish and maintain professional working relationships with suppliers, distributors, vendors, service providers, and outsourcing companies.

You may think that just because you're running a solo operation and you are developing all your information products in-house you don't need to worry about on-going relationships.

Every business will need to establish partnerships (or relationships) with an Internet service provider, a bank or other financial partner, tax consultants (even if you prepare your own returns), insurance providers, possibly an attorney, and most likely some online service providers (like a merchant account company to provide for credit card transactions).

Businesses have to communicate in a variety of ways, but I've noticed that many of the online businesses (that I assume are run by solo owners) these days provide no address or telephone number for the company.

I am guessing that the business owners of these web sites have full time employment away from home and just figure that since they can't be around to answer the phone, it's better to just not list a number.

I won't deal with businesses that don't allow contact. Do you?

Was it tennis star Andre Agassi that proclaimed, "Image is everything!" in his popular commercials?

Your business image is an important tool for your success because it can either add to the overall perception your customers have about you or it can leave prospects wondering if they really want to take a chance on dealing with such an amateurish or careless business.

Image results from a lot of characteristics and visual clues about your business, but we're going to mention just two of the more important things you can do to portray your desired message in this post.

I don't know of a large profitable corporation that doesn't regularly seek professional advice on a whole range of business issues.

As a solo business owner, you may have a tendency to rely strictly upon your own knowledge and skill for all your business needs. You may figure that since you're in business for yourself, it's up to you to find answers to your questions and problems.

In actuality, the smart business owner is one that recognizes and admits he has limitations in certain business areas and will seek out professionals who can advise and help him over the rough spots.

I get a number of calls every week that go something like this:

"I want to start a business. I have a wonderful idea. I have no money but so and so told me there were government grants available for new businesses. Can you help me get $50,000 so I can start right away?"

Not wanting to burst the bubble immediately, I might say something like, "What do you want $50,000 for?"

"That's how much I need to rent a building, make some improvements, and set myself up in business. I figure I'll make it all back in the first year."

Many businesses are simply little fish in a big ocean, swimming and scurrying about hoping to be noticed or "chosen" by those customers that want what they have to offer.

That is no way to run a business.

Getting noticed involves a lot of positive, pro-active, and planned steps that lead to incremental wins or successes. Typically, the process of being noticed and spreading the word about your products is an expensive and drawn out affair.

But there are things you can do every day in your business to create "buzz." And according to author Richard Laermer, in his great little book Full Frontal PR, this one characteristic of your marketing (creating buzz) is often the difference between success and failure in your total effort.

Late in 2005 (December), several PR experts gave presentations at the Utah Information Technology Association's (UITA) gathering that was labeled: "PR Tips from the Trenches."

I was quite interested in the event because of my belief that public relations strategies are:

(1) often ignored by small solo businesses,

(2) assumed to be too expensive or too complicated and out of reach of the "little guy,"

(3) seen by small businesses as exclusively the tools or resources of the large and well-connected companies,

Have you ever noticed a shopping cart full of groceries sitting next to the checkout stand at the supermarket?

I've seen it happen a few times and usually figured that someone simply left their wallet or purse at home and would be back soon to claim their abandoned goods.

It's not a big problem since most stores are accommodating about the oversight.

But online, shopping cart abandonment is a huge problem! No one really knows the extent of this loss to e-tailers, but I have seen some estimates that suggest fifty percent or more of all online sales processes are never completed.

By now you understand that the solo information business strategy discourages dealing in physical products that require shipping and handling. These products require human intervention and a lot of financial costs that are the antithesis of the one-person solo Internet home business model.

Nevertheless, many of you will continue to do business in a physical delivery world because of the types of products you sell.

So I have a few suggestions about shipping products that will hopefully help you in your business to avoid the pitfalls and traps that some solo businesses have fallen into in the past.

Today's solo business owners have an amazing array of tools at their disposal to share their story and their wares with customers compared to days bygone.

Now I'm not an expert in the use of this strategy by any means, but I'd like to mention to you one tool that is easy to put your hands on, and learn how to use, that will open the door to greater customer loyalty and put your web business in front of a growing audience.

I've always believed that business owners should stay on the leading edge of technology available to businesses in order to profit from new advances and efficiencies.

It may be something you do as a matter of routine, but I've seen enough sales letters and web site catalogs that don't do this that I'm convinced some sellers just don't know what they are missing.

I've often spoken of the need to do everything within your power to garner the trust and confidence of your prospects in online selling.

Lots of people are still a little skeptical about doing business online.

And even though many have moved beyond the fear that credit card numbers will be stolen and used illegally, they still have a certain natural tendency to not give their full faith and trust to a new Internet company they have never dealt with in the past.

Every new technology faces the same uphill battle when it comes to public acceptance and dispelling people's fears that something bad will happen to them as a result of some unknown or unanticipated problem.

Many people say they are hesitant to make a purchase online because the either fear the process or they fear that their money will be lost forever because the seller will "take the money and run."

I'm too young to remember the early days of inventions like the car, the radio, and the telephone, but there were great fears among the public about what these new devices would do to society.

Many people were slow to adopt and embrace change. It wasn't until they actually saw and understood the advantages and noticed other folks were using the inventions without harm that they decided to give them a try.

Years ago there were some business characteristics that, if exploited, propelled a small business into the limelight and fueled its growth for years into the future.

What were some of these characteristics?

If your business had the undisputed lowest price in town, you were often rewarded with lots of sales and the revenue to expand your operation.

Some businesses grew quickly because they had access to unique manufacturing processes - those that allowed them to produce products faster and at a lower cost than the competition.

Big Madison Avenue advertising agencies need to know what customers think about specific companies (their clients) and the products and services they sell.

They create branding messages, images, and positioning for these companies that affect how the business is perceived by the general public.

Such information can be helpful to a small business as well; however, most small businesses are not in a position to be able to afford this level of outsourcing and detail in their marketing.

Still, there is an easy way to check on consumer sentiment about the companies that do business in your niche.

Owning a small business is the new American Dream. A recent national survey found that nearly 60% of Americans listed owning a business as high on their wish list of things to accomplish, even higher than owning a home.

But how many of those same folks are going to see their dream happen this year, or next, or the next . . .?

If you have this same dream of creating and owning a small business, there's a very high probability that no one in your lifetime is going to step up and hand you your own business.

If you're waiting for the right opportunity to come knocking, I doubt that you'll recognize it.

You see, that opportunity is standing in front of you right now, staring you right in the face.

You may not have this problem - I hope you don't. If you're super focused and well disciplined, you should be able to avoid digital dust.

I haven't. I fight the curse constantly and usually give in to my quest for that next great resource that's going to propel my business into the heavens.

Digital dust is what all those business tool software and information products turn into over time. It's pretty much worthless, and often turns into a total waste of your business budget.

I guess maybe I'm just a succor for a good sales pitch. I'm the kind of guy a smart product developer can sniff out in a crowded room. Maybe "gullible" is permanently stamped into my forehead.

You've probably noticed the proliferation of "how to" content sites and businesses that have sprung up in every niche across the Internet.

The popularity of this business model is undeniable. Find a niche that has customers craving how to do something that is not generally understood and you might just be swamped with more prospects than you can handle.

The reason for all this commotion in the "how to" circles? It's simple - everyone wants to find good solid information that is readily available that can solve a problem that they are having.

You want to know how to diversify your stock portfolio without paying a securities broker? Go online and do some research.

Online business in today's marketplace has many advantages that the small business has never had in the past.

The challenge for the business owner is to take advantage of these advances and use them to grow his business in ways that direct competitors either don't know about or are too lazy to set up.

The advances are only an advantage if they're put to good use. That's why they are so powerful to you - because you know the strategies and can implement them into your business and others in your niche won't.

I'll have to be careful with this post because some business owners will think I'm giving some very poor and bad advice about growing a solo business.

Nonetheless, I need to warn you of a temptation that appears before almost every new business owner that gains some traction and realizes some measure of success in his solo business.

Here's the temptation:

How many ways are there for a small business to fail?

Don't try to count them . . . life is too short as it is . . .

I want to talk a bit about one of the dangers of solo Internet business.

I have always preached the message of niche specialization for the solo business owner. I say you should dig down deep and become an expert in a very tightly focused market.

The folks over at the Better Business Bureau commissioned a study in 2007 of the adult online shopper's most important issues.

It seems that approximately 60% of those surveyed are primarily concerned about two things: (1) that their personal information could be stolen and sold online or reused by someone else, and (2) that their credit card information could be hijacked by some unscrupulous operator (59%).

One of the most frustrating aspects of web business is trying to figure out problems to customer response rates on your web site. Why are my customers getting lost online? Why are they not responding to my ads? Why are my offers being ignored?

The challenge of this puzzle is figuring out what parts of the web site need to be fixed.

Is it the offer itself? Are my navigation signals unclear? Is my offering price too high? Is my offer language boring or uninspiring? Is there a problem with my ordering system?

You see, it seems that there are an endless number of little variables that could be hindering sales at the web site. Often, trying to figure out where the roadblocks are is a difficult and frustrating exercise.