6 Keys to Small Business Success

Running a small business can sometimes feel like a juggling act. No matter the size of your team, you need all the help you can get to run sales, marketing, operations, finance and human resources. And this is just to keep the status quo. How can a business owner find the time to grow their business with all this activity going on? Having the right technology in place can help answer that question. This will help any small business do what they do best – but even better and with more profit – and free up time to focus on growth. Think about your current systems and processes with the following six ideas in mind.

1. Make Processes as Efficient as Possible Efficiency is not just a buzzword from consultants. It is an idea that should always be in the back of your mind when developing new business processes or review existing ones. Take a lesson from manufacturing and look for scalable, repeatable processes in your business that keep your team in mind. Don’t treat your staff like robots, but keep them from doing tasks in ways that don’t make logical sense.

2. Get All Your Data In One System Small businesses frequently grow in fits and starts and their systems often follow that pattern. Some activities even exist outside those systems. It used to be called paper, but now it is impractical to look up customer invoices on a paper report, because no one accesses to the billing system. The customer record lives somewhere else. And don’t forget about those business cards from the last trade show gathering dust on the corner of your desk.

3. Communicate Across Teams Unless your small business is so small that everyone is in the same room (and I’m not talking about a loft with an open floor plan), you need simple ways to communicate with each other. Sure, email works, but it is an interruptive process. And what happens when you need to add someone to the message thread? Now they have read back through a thread with strange indents and lots of email signature lines. And what happens when you need to dig that information out of your email? Who was it from? What customer was it about? Teams need to communicate in a way that captures that information and connects it to the right customer or vendor.

4. Everyone Needs to Be Accountable Do you or your boss walk around the office checking in on everyone’s progress toward their goals? The sales team might have a leader board on the wall, but what about the human resources team? Are they meeting their hiring goals? Managers need more than anecdotal data to know that the business is on track. Centralized reporting is needed to understand all aspects of your business, especially growth. If you could have one screen with a series of dashboards tracking key metrics, what are the ones that show that your business is achieving its vision?

5. Working Together is Better Than Working Apart Some people like to put headphones on, focus on their own projects and leave at 5:00 on the dot. Small business managers wear many hats, and very often the best workers in a fast-growing environment operate the same way. This means ad hoc project teams form for short periods to get things done. The people on those projects go back to their regular tasks afterwards. Collaboration systems need to support regular and temporary teams in ways that make sense.

6. Customize Your Tools to Work for You Not everyone has the luxury for a fully customized, large-scale computer system implementation. Even if budget were no object (which it always is), this is not always the best solution for your business needs. Some would even say it never is. Regardless of budget or scope, nearly any system you choose allows for some level of customization. Make sure you consider how even small changes can make a big difference in operations.

Top 5 Mistakes for Small Businesses

Nearly half of all new businesses don’t make it past their fifth anniversary, according to the U.S. Small Business Administration. That makes it crucial for mom and pops to get basic strategies right from the get-go.

Even though economists tell us the recession has been over for four years, banks remain as stingy with business loans as ever. There’s little room for error. So it’s important that small-business owners recognize the pitfalls that await them and learn how to avoid them.

There are five common mistakes that stand out as potentially crippling problems for small businesses:

1. Trying to Do It All

In a small business, everyone pitches in and does tasks that fall outside the lines of their job descriptions. But no matter how eager you and your employees are to do it all yourselves, know when you’re in over your head.

Don’t be afraid to outsource tasks that your team can’t handle. Your new venture demands that every aspect is handled by someone, who understands what they’re doing. And no amount of good intention will turn an IT specialist into a good bookkeeper.

2. Assuming a Product Will Sell Itself

Your business might sell the most revolutionary, indispensable product in the world, but it won’t sell if nobody knows it exists. Develop a comprehensive marketing plan to make potential customers aware of your business.

Nothing generates more business than word-of-mouth. But cultivating a customer base to generate that kind of buzz takes in-person marketing that goes beyond social media. Promote your business actively within your community so your neighbors know who you are and what your business does.

3. Not Understanding Finance

Some entrepreneurs excel at broad, big-picture concepts. Others are great at the hands-on delivery of their product or service. But few are interested in the essential minutiae of running a business such as finance. Unfortunately, no business can make good decisions without having an understanding of the numbers.

How do you know that your number one seller is actually the product with the most growth potential? It may be that your attention would be better focused on growing another product. Yet there are businesses you’ll see on “Crowd Rules” that just do not have that data. And without those numbers, it’s impossible to make good, informed business decisions.

4. Ignoring the Most Profitable Aspect of a Business

If your business isn’t doing as well as you’d like it to, it’s easy to become impatient and try to shake things up with a new approach or a new product. It’s very easy to chase this dollar of revenue here, this dollar of revenue there, without actually determining which sale is optimal.

Businesses that do well stick with what they do best. If you can just find a focus in business and not be distracted, you’ll find the way to succeed. Find something to focus on and go after it.

5. Going In Without Enough Capital

Running a small business brings challenges that you won’t anticipate no matter how prepared you are. That’s why it’s essential at the outset to start out with enough capital to see a business through its infancy and initial growing pains.

Important questions to ask include: What will your production costs be? Will you need to rent warehouse space? How many employees will you need? Once you know the answers to these and other questions, you can start to build the capital you’ll need to get your business off the ground.

 

7 Biggest Small Business Trends of 2013

1. Franchising as a career alternative is set to explode.

Franchise consulting firm FranNet saw business booming in the latter half of 2012. As of December, the company expected to finish the year at an all-time high, with about $14 million in gross revenue, up 44% year over year. FranNet had a 30% to 40% increase in clients looking to open their own franchise, says president and COO Jania Bailey.

The company expects 2013 to be another record year.

“We do not foresee a surge in hiring from corporate America,” Bailey says. “We expect the high unemployment to continue due to the uncertainty of new regulations, tax issues and mandated health care. Many former executives are realizing that they will not have the job they have been looking for over the past several months. These executives are turning to franchise ownership as a career alternative.”

There is also a lot of interest in franchising from younger people due to the lack of jobs. “These young people are getting out of college and cannot find employment. We see a lot of parents exploring franchising for their college graduates,” Bailey says.

The International Franchise Association is not quite as optimistic. The trade association predicted the number of franchise establishments in the U.S. will increase by just 1.4% in 2013, short of the 1.5% growth in 2012, from 746,828 to 757,055 units.

Franchise output is expected to rise 4.3% this year to $802 billion, down from 4.9% growth in 2012, according to the IFA.

Franchisors and prospective investors are cautious given the turmoil in Washington as well as a mediocre macroeconomic outlook, the IFA says.

“The basic indicators of the health of the franchise sector will show a slight slowdown,” the IFA said in December. “Yet the franchise sector will continue to do well within the industries where franchise businesses are concentrated.”

To be sure, financing also continues to be a challenge, Bailey says, particularly for high-end concepts, yet “we have seen lending start to loosen in many areas of the country and we are hopeful this will continue to improve,” she notes.

2. Are you prepared for the 1099-K?

While the Internal Revenue Service took measures last year to ease burdens placed on small businesses by 1099-K filing requirements, that form is still causing loads of stress.

“Small-business owners need to be prepared for the 1099-K form. It shows what their revenue for the past year has been. If the revenue figures reported by a business in their tax return do not match the 1099-K, it is a trigger for the IRS to issue an audit. As we all know, audits are no fun! So it is crucial to make sure your tax return numbers match your 1099-K,” Outright.com CEO Steven Aldrich says.

Additionally, starting this month, payment processors have to withhold taxes at 28% for any small business that does not have a tax identification number. This is because they can’t issue 1099-Ks to people without TINs, Aldrich says.

“As we can see, the 1099-K is just as crucial in 2013 as it was in 2012. It is imperative that small-business owners keep track of it and ensure their records are in order,” he says.

3. Going “glocal.”

The term “glocalism” means the adaptation of a product or service to each location or culture in which it is sold. Glocalism also signifies how regional businesses can be altered by events that take place far away,” according to a report by Colloquy.

“The country’s sluggish economy and ongoing stagnation have slowed growth, particularly in the food-service industry, and also profitability, as customers demand more for less. It’s harder to increase sales in the U.S.,” says Andy Axelrod, president of Love and Quiches Desserts in Freeport, N.Y.

“The flip side is that the weaker dollar is good for exporting, which is booming. For companies such as mine that have an active exporting division, this is a continuing and growing opportunity in the face of a lackluster domestic economy,” Axelrod says.

Going glocal presents challenges as well as opportunities.

Tracy Benson, CEO of On the Same Page, a consulting firm, says companies doing business globally need to invest time and energy to understand how to make their products and services relevant to their customers in specific countries.

The thinking also applies to global workforces. “Understanding local needs, customs and perceptions allows leaders to customize changes, processes and initiatives that resonate with the people carrying them out,” Benson says.

4. Health = wealth

Changing demographics and rising health-care costs have created a health-and-wellness economy. What separates aging baby boomers from previous generations is that they will live for a much longer time and continue to be a viable part of the spending economy.

Companies are already nudging and rewarding employees to live healthier by implementing wellness programs.

The trend also creates opportunities to partner with retailers and brands to support healthy customer behaviors with related rewards for small businesses, a Colloquy report says.

Customer initiatives can, for example, offer access to a free tai chi class or a coupon for calcium supplements, Colloquy says.

5. Customer service gets back to the basics.

Jerry Nettuno, founder and CEO of Schedulicity, a tool that allows small businesses to offer online appointment scheduling, says “old-fashioned customer service” will once again become en vogue for small businesses that are supported by digital tools.

During the rocky economic environment of the past four years, small-business owners turned to risky, and untested, marketing methods, such as partnering with daily deal companies, in an attempt to garner new clientele,” Nettuno says. “In doing so, customer service began to take a back seat to customer acquisition.”

This year, there will be a “steady return to traditional, old-fashioned client service, empowered with new digital tools, such as mobile scheduling and coupons, online sentiment tracking and mobile credit-card processing,” he says.

The tools will expedite non-core business functions and allow service professionals to focus 100% on delivering great client service, he adds.

Dan Wernikoff, senior vice president and general manager of Intuit’s (INTU) Financial Management Solutions division, says more small businesses will use customer feedback to drive the bottom line.

“With the presence of more social media channels than ever, in 2013, small businesses will start using customer feedback gathered through Facebook, Twitter and others, to influence business decisions. By harnessing the power of their networks, small businesses will be able to make small- to large-scale changes to give their customers what they really want,” Wernikoff says.

6. Major clouds ahead

“The businesses that were up and running shortly after tornadoes and hurricanes were those that did most of their business online,” while those that had their information stored on computers in their offices lost nearly everything,” says Barry Sloane, CEO of Newtek (NEWT). “Look for businesses and families to put most of their critical information online where it’s safe and easily accessible.”

According to the IBM 2012 Tech Trends Report, which surveyed 1,200 professionals who make technology decisions for their organization, nearly two-thirds of respondents plan to increase their company investments in cloud-based technology.

“We expect cloud to become even more ubiquitous among [small businesses] over the next year,” says Ed Abrams, vice president of marketing and strategy for small businesses at IBM (IBM).

More and more, small businesses are seeing the cloud as a way to grow business and access advanced technologies that once seemed affordable only for larger competitors, Abrams says.

The tools can be delivered with so-called usage pricing models, which means small businesses don’t have to pay for the cost of the software upfront and can essentially rent these advanced tech tools on a monthly or annual basis, Abrams says.

Small businesses will be armed with “insights and capabilities once only available to corporate giants, creating new ways to operate more efficiently, find new customers and improve bottom-line results,” he says.

Additionally, by implementing a cost-effective, flexible, scalable platform, businesses can shift budget and resources to more strategic business investments.

“All of this is critical over the next 12 months as [small businesses] look to drive their own business security and growth, and as they look to differentiate themselves in an increasingly crowded marketplace,” he says.

7. Tablets will become must-have devices for small businesses.

 Mobile technology in general, but specifically tablets, like the Apple (AAPL) iPad mini and Google’s (GOOG) Nexus 7, will be a big priority for small businesses in 2013.

“While mobile technology and solutions have taken center stage in 2012, the prevalence of tablets in 2013 will alter how small businesses manage day-to-day tasks,” according to Intuit.

 According to a recent Intuit survey, about one in five entrepreneurs would like a tablet for their business. “Leveraging tablet apps that can complete multiple tasks, such as accepting payments on the go, creating invoices and reconciling [accounting] books, will help small businesses save time and money in the new year,” Wernikoff says.

10 Success Secrets for Business in a Bad Economy

1. Value Before Brand 

Focusing your time and money on your “Brand” may increase name recognition however it doesn’t generate revenue. Showing customers what value your product or service provides will generate revenue.

2. Stop Scaring Customers Away

Most corporate websites scare customers away. Your website wasn’t cheap and most likely was developed to attract new customers. If you are not converting 10% of your visitors into leads, then you need to revise your website content.

3. Catch Amnesia 

Forget how great you and your business performed last year. The past is the past. This year it’s a new game. The rules have changed and the players are different. What worked last year, will not return the same results. Constantly re-evaluate your industry, competition and economic conditions. From this research, modify your strategy to improve sales and profitability.

4. Walk Away 

When times are tough it’s easy to say yes to new business so you can achieve your sales goals. However, not all new business is good business. If the new business does not meet your minimum profit expectations, say no and walk away. Don’t waste your time and resources on non-profitable business.

5. Keep Score

Measure and monitor your key business indicators at least weekly. How do you know where to improve if you don’t know how you’re performing. Do you measure your Customer Conversion Ratio, Tradeshow ROI, Closing Ratio, Marketing ROI, Advertising ROI, Sales Cycle Times, Calls to close a Deal, deal size, etc.

6. Refresh Your Herd

Stop milking your old customers over and over again. Like a dairy farmer, you need to refresh your herd to increase production. To grow your business you need to start focusing on new customers. One of the best ways to refresh your herd is to pick up the phone and start calling new prospects.

7. Work On It, Not In It 

Business owners and executives need to pull themselves out of the day to day issues. When times get tough, they spend more time in the details. By doing this they lose sight of what is most important, focusing on how to improve the business performance in a changing competitive environment.

8. Hire Slow, Fire Fast

Most business owners and executives do just the opposite and pay the price. Spend more time hiring the best person for the job. Let go of your non-performers quickly. If you don’t, your costs per sale dramatically increases while revenue decreases.

9. Don’t Generalize, Specialize

Customers will buy more and at a higher price from someone who is a specialist, rather than a generalist. If you are having heart trouble, would you go to a $500 per hour cardiologist or a $100 per hour family doctor. Transform your company, products and service into a specialty.

10. Hunt Now Or Be Eaten Later

To grow your business you need to be a Hunter. Think and act like a hunter in your business. If not, you are the prey. Eventually, you will be eaten and out of business.

Arzo Enterprises