dress up diva

Remember when you were a kid and pretending to be someone else was just a fun game? You can use the same idea in your small business to get to know your customer, up close and personal.

Knowing your customer is critical to the success of your business. You cannot create effective products, marketing copy and materials, processes, or ideas that will delight your customer if you don’t understand her life, her worries, her skills, her dreams, and her goals.

Some years ago I read an article about a company that served aging customers. To give their employees the opportunity to get into the customer’s head, they had them spend time wearing gloves and special glasses that impaired their vision.

I thought of this recently at the grocery store, as three young employees stood around chatting while an older woman in front of me struggled to put her overloaded plastic sacks into her cart. I stepped ahead and loaded the woman’s cart for her.

If grocery stores were to give their employees the opportunity to spend a few hours working with glasses that impaired their vision, gloves that make their fingers fumble, and arm weights that make them difficult to lift, might they be more likely to help an older woman struggling in the future? I would be happy if they even learned the difference between weight and volume when they are loading a grocery bag to the splitting point!

Pretending to be your customer doesn’t have to be a physical experience. It’s even more fun to play Let’s Pretend mentally.

Spend the day pretending to be someone else, to not know what you know, to try out someone else’s dreams and worries. Look at your products with a stranger’s eyes. What ideas for your small business come to mind? What questions do you have? What tasks could you easily accomplish as yourself but might puzzle your customers?

In your small business, the idea of playing Let’s Pretend could seem like a waste of time. But you may be surprised if you immerse yourself in the game.

By going about your day as your customer, you will not just improve your current products, your marketing copy, or your web site; you may also generate profitable new small business ideas that will delight your real customers.

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creatively insecure small business woman

I had a déjà vu conversation with a woman who just might start a small business. Advice on what steps to take in starting a small business was not the déjà vu; it was the creative insecurity that was so familiar.

I have been fortunate to work with and observe many types of creative people in my career, and it’s clear to me that we have one characteristic in common: We are all tone deaf to our own creativity.

Whether it is art, writing, design, building, business ideas, or another creative endeavor, when we evaluate our own creative product — especially early in the process — it’s usually not a favorable evaluation. And when we measure our own product against that of others, our work suffers by comparison. I’ve seen it happen with my creative friends and I’ve experienced it myself.

This tendency can prevent us from creating at all, depriving the world of our talent and us of the joy that comes with expressing creativity.

Now, I do not equate creativity with artistic ability. That’s one avenue of creativity, but certainly not the only one.

I, myself, am not artistic. I could not produce a piece of art if I was being held hostage until I did. However, I do consider my writing and coaching to be creative. In fact, to me, creativity is essential to my joy in life. If I am not creating, I might as well be dead.

In fact, in my case, I believe my creativity has helped artists bring more beauty and joy into the world. And helped other talented people express themselves in a small business. Maybe, my creativity multiplies the creative talent in the world.

So, I think about this: When it comes to small business, advice says that you need to be confident about your products. You need to be able to sell. You need to be able to convince your customers to buy your product.

And yet, so many talented people I know are not confident in their creative product. And it seems to me, many of the people who are confident are not as talented as those with creative insecurity. And get more attention.

What do you think? Do you see yourself as more creative or more confident? Is creativity or confidence more important to small business success?

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green plus signsIn the news, a story about the oldest cancer specialty hospital in the country embracing alternative medicine (also called complementary medicine), along with the traditional western practices. It started me thinking about how hard we often fight against ideas, advice or practices that seem contradictory in our small businesses, instead of embracing the Genius of the AND.

In the landmark book, “Built to Last,” Jim Collins wrote of the Genius of the AND. Collins showed that companies that prospered over time learned to embrace practices that were seemingly contradictory or mutually exclusive. As Collins put it:

A truly visionary company embraces both ends of a continuum: continuity and change, conservatism and progressiveness, stability and revolution, predictability and chaos, heritage and renewal, fundamentals and craziness.”

Failing to embrace the AND leads entrepreneurs to believe there is one right way to do business, one successful model in an industry, one way small business should be done.

Big mistake.

Today’s fast-changing business environment rewards different methods, alternative perspectives, and inclusive, not exclusive ideas.

So, where can you use the Genius of the AND to prosper in your small business?

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small business checklist

Our culture, here in the U.S., is rife with tales of the great idea. We are fascinated by the inventor, whether it is a historical Edison, Bell, or Einstein, or a contemporary Gates. We view idea generators as icons of success.

What our culture doesn’t celebrate is implementation, even though it often takes more time, sweat, and smarts to make something happen than to dream it up. In fact, we view doers, somehow, as lesser beings than so-called ‘visionaries.’

I do believe that ideas and theories are important. But maybe it is time to celebrate the real work of getting it done in small business, and advice for making things happen, instead of this myth of the great idea. Especially when starting a small business, ideas are nothing unless you can make it happen.

Perhaps, being more of an implementor myself, I am biased. Because I believe the test of a great idea is this: Can it be translated into something useable? Is it applicable and beneficial? Can you make it happen?

Through the Wall: Idea to Implementation

When I worked for a global ad agency, we had a saying: “Strategy is everything, implementation is everything else.” It illustrated the recognition that big ideas are important, but implementation is just as (sometimes more) critical.

What blocks many of us from taking an idea to fruition is the shift in thinking and energy that is needed to move from ethereal to corporeal. In fact, that shift can feel like trying to walk through a wall — a bit like Patrick Swayze’s first attempts to rearrange his molecules to slide his ghost-body through the closed door in the movie, Ghost.

The thinking shift is from your Connective intelligence — the intelligence of creativity that allows you to make connections between seemingly unconnected things — to Ratilinear intelligence, which is the rational, linear, logical thinking needed to plan and implement.

I’m not saying that these two intelligences cannot work in tandem, because they can, but it takes a thinking process that encourages both, and the practice and skills to move through that wall.

This shift is why it is so difficult in a typical staff meeting to move from agenda items to brainstorming or vice versa. The meetings aren’t set up to encourage thinking shifts. It is also why it’s so much easier to daydream about starting a small business and much harder to do the daily work it takes to make it happen.

Here is one tool that any small business person can use to help your brain team the intelligence of Ratilinear with that of Connective.

The Map It Tool

Map It lets you get your ideas onto paper without forcing you too early into linear thinking. To Map It, place your central idea in the middle of the paper, using a picture (even if you can’t draw, like me). Draw lines radiating from the center and put your main ideas or categories, on those lines. Then place sub-ideas or related ideas on shorter lines attached to those main lines. It helps to encourage your creativity if you use colors and pictures, as well as words, to record and express your ideas.

Michael Gelb and Tony Buzan have both written books about mind mapping, if you’re interested in learning their techniques. I’ve adapted their ideas to my own thinking style. In fact, I used a series of maps to generate and think through ideas for my book, Brain Power (Wiley, 2002).

There is lots of small business advice about generating ideas especially for those starting a small business. Isn’t it time we celebrated the doers, instead of just the thinkers?

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Young small business diva at work

Strategy #1: Treat Your Small Business Employees Like Interchangeable Pegs

Just like wooden pegs, employees can be yanked from one spot and shoved into another. After all, if you’ve seen one peg, you’ve seen them all. Treat employees like inventory, perhaps using the first-in-first-out rule—each time a new employee is hired, fire the most senior employee. The beauty of this rule is that it also saves costs by replacing a high salary with a low one. Or, why not borrow from the clean-out-your-clutter gurus and get rid of any employee you haven’t seen in six months?

Strategy #2: Never Define Expectations

One of the best small business ideas for management is to be as vague as possible when asked for explanations or expectations. If you never define expectations, you will never be wrong. Create secret standards and then punish those who don’t live up to them. If questioned, employ a useful phrase like, “You know what I’m looking for” or “A good employee would figure it out.”

Strategy #3: Believe Your Own Press

Assume that people have ceased disagreeing with you because of your sudden attack of brilliance—not your positional power. If someone does dare to express a difference of opinion, be sure to make an example of them. Public floggings are a preferred method.

Strategy #4: Treat Your Small Business Distributors and Vendors with Disdain

When you get the idea your small business is in vogue, use it as an opportunity to throw your weight around, dictating terms to anyone who has an idea for doing business with you. After all, you never really believed that old saying: “Goes around, comes around.”

Strategy #5: Never Admit Mistakes

If someone dares to accuse you of making a mistake, use the “everyone else does it” defense. Mom surely wasn’t talking about business when she said, “If everyone was jumping off a cliff, would you jump, too?”

Strategy #6: Yes, Virginia, There IS a Silver Bullet Solution

If a solution can’t be explained on a single piece of paper, it’s obviously too complex to be successful as an idea for your small business. Instead, hold out for those silver bullet solutions, the ones that solve every problem in the business with one tiny, inexpensive change.

Strategy #7: Don’t Invest in Anything if You Cannot Calculate ROI

If you can’t see it, touch it, control it, and crunch the numbers, it’s obviously a poor investment. Intangibles, intellectual property, and social media are economic myths, sure to be debunked at any moment.

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magnifying glass for small business nicheA niche is the specific, well-defined segment of a population that a small business serves. Niche refers to the service or product that meets a special area of demand. You can think of it as a small corner of a market or a specialty.

In ecology, a niche refers to the place or position of an organism or a population within an ecosystem. It defines the role the organism or the population plays in the general scheme of things. The niche dictates the ability of the species to survive. It is the one which determines whether an organism or a population will perish or thrive.

As in ecology, niches are important, especially when starting a small business. Niches can determine if a business will survive and thrive, particularly for a business that needs to demonstrate expertise, compete online, or build authority to succeed.

Niches may be based on demographics, such as age, education level or marital status, or on psychographics, which are attitudes, interests, or lifestyle choices.

Niche marketing is the process of finding market segments that may be small, but are profitable. One of the great things about niche marketing is that it allows you to be unique and one-of-a-kind. Instead of being forced into a crowded marketplace, competing against larger, more established marketers, you can build a strong, profitable business based on your niche.

The ability to reach your niche market is an important consideration in choosing and defining a niche. It does not help a business to serve a specific niche if there is no avenue for marketing to those customers.

Using the web and social media, niches can be more profitable and easier to reach than ever before. Because customers who are passionate about a niche can easily connect to and pass along information to other people who share their passion, businesses that  focus on a niche can thrive online.

Gauging the potential of a niche before starting a small business is essential. Test marketing, competitive research, and market research can all help to determine the potential of a niche. Unlike in the old days when seeing competitors in a marketplace would discourage someone from starting a small business, today seeing existing businesses that target a niche is a good sign that the niche is profitable. Of course, evaluating the competition and having a competitive advantage is still important.

About the Small Business 101 Series from Small Business Divas

There is plenty of expert advice on small business available, but often the basic questions aren’t answered. And for someone new to a subject, it’s difficult to understand the information without a good understanding of the basics. The Small Business 101 Series is all about the basics: what, why and how.

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Starting a Business as a Sole ProprietorFor many, the American Dream includes starting a small business. One of the first steps toward the dream is to decide what legal form your business will take.

The simplest structure, and therefore most popular, is a sole proprietorship. Yes, it may be the most difficult to pronounce and spell, but it is the simplest legally!

You do not have to file legal papers to become a sole proprietor. If you are doing business and you do not have another type of legal structure, you are considered a sole proprietor. About 70 percent of businesses in the U.S. are sole proprietorships.

However, like any other business, you must file for the proper licenses/permits required by your state and local governments when starting a small business, as well as any industry requirement. Every state and locality has their own rules about what you need to file.

If you are not operating under your given name, you will likely have to file a fictitious name, trade name, or “doing business as” (also known as a DBA) with your state government. It is important to do some research for your business name to ensure you are not infringing on a trademark or another business name. You will need the paperwork from this filing in order to open a bank account under your business name. You may also need the proper local certifications.

In some areas, you need to file with the state, then county, then city. In other places, the city comes before the county. But, you will usually need to start with the state, even if you are operating under your own name.

One of the easiest ways to find out the laws in your area is to call your bank and ask them what you need to open a business account. Many state and local governments now have information online. Also, your local Small Business Development Center (part of the federal Small Business Administration) can help you sort out the local regulations. Their assistance is free and they are located throughout the country. Visit sba.gov and click on Local Assistance. There is an interactive map to help you find your local resources.

As a sole proprietor, you will be paying taxes on your overall earnings. However, you will be deducting your business expenses from those earnings, according to the federal, state, and local tax codes. Your “salary” as a sole proprietor is not considered a business expense and you don’t have to decide what your salary will be in advance.

Since you won’t be paid as an employee, no income tax will be deducted from whatever you withdraw your business earnings.  What you’ll have to do is file an estimated tax return (and possibly pay estimated taxes) on a quarterly basis. Check with the IRS for Publication 334, Tax Guide for Small Business. An accountant or bookkeeper is very helpful for estimating taxes and understanding the complex system for what you might need to pay quarterly.

Here are a few of the advantages to consider when starting a small business as a sole proprietor:

It is the easiest and least expensive business structure to start. Legal costs are minimal.

You have full control over all business decisions. You don’t have to consult a partner or shareholders on decisions or changes you want to make.

Tax preparation is not significantly more cumbersome than filing your regular income tax. You will use a Schedule C to report your income/loss to the IRS, and most states have similar forms or use your federal information. You will need to file an extra form if you have a profit to report and pay self-employment taxes.

Here are a few of the disadvantages to consider when starting a small business as a sole proprietor:

Your personal assets are more at risk as a sole proprietor. Because there is no legal separation between you and your business, you can be help personally liable for the debts or other obligations and that includes liability for any legal actions.

It can be more difficult to raise money as a sole proprietor because you cannot sell stock to investors and banks may be more reluctant to lend money to a sole proprietor.

Next up: Small Business 101: What is a C Corporation?

About the Small Business 101 Series from Small Business Divas

There is plenty of expert advice on small business available, but often the basic questions aren’t answered. And for someone new to a subject, it’s difficult to understand the information without a good understanding of the basics. The Small Business 101 Series is all about the basics: what, why and how.

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key to success cmptFranchising is a type of business where an existing business licenses its business model, brand, trademarks and methods to another business person. Franchising is sometimes referred to as a “business in a box.”

There are advantages and disadvantages to buying a franchise versus starting an independent business.

Some advantages may be:

  • Start-up advice and expertise
  • A ready-made business model
  • Access to a well-known brand
  • Proven marketing strategies
  • Employee training
  • Assistance with site selection

Some disadvantages may be:

  • Less flexibility in business model
  • Restrictions in territory
  • Up-front costs for purchasing franchise and equipment
  • Sales quotas
  • Exclusivity in suppliers

Generally, there are two types of franchises. In the first type, the business selling the franchise owns the rights to a name/trademark and sells that right to a franchisee. This is known as “product” or “trade name” franchising. In the second type, the business selling the franchise expects to have an ongoing business relationship with the franchisee, and provides services such as training, startup consulting, help with site selection, marketing guidance, product suppliers, and so on. This type of franchising is known as “business format” franchising.

Before deciding to purchase a small business franchise, you should do some detective work. Research the primary business and their current franchisees. Talk with other franchisees about their experiences. Compare the costs of the franchise against the costs of an independent startup.

The law requires that potential franchise sellers provide certain pieces of information to potential buyers.

Here are a few questions to ask while investigating a franchise:

1-What can the franchise/franchisor do for you that you cannot do yourself?

2-How many years has the company been in business?

3-Is the franchising firm adequately financed?

4-Does the franchising company have an experienced management team?

5-Does the company offering the franchise have a reputation for honesty and fairness among the current/past franchisees?

6-Has the franchisor provided certified financials indicating profits/losses of one or more of its franchisees, and have you checked out the financials?

7-How many years does it take the average franchise to become profitable?

8-What services does the company franchisor offer its franchisees? Are there additional fees or costs for any of the services?

9-Have you had an attorney review the franchise contract and discuss the ramifications with you?

10-Under what circumstances can you end the franchise contract, and at what cost to you?

Buying a franchise is not a guarantee of small business success. It can provide a measure of security and a leg up. Surveys show that fewer than 20 percent of franchise businesses fail, while the overall failure rate for new businesses is between 60 percent and 80 percent.

About the Small Business 101 Series from Small Business Divas

There is plenty of expert advice on small business available, but often the basic questions aren’t answered. And for someone new to a subject, it’s difficult to understand the information without a good understanding of the basics. The Small Business 101 Series is all about the basics: what, why and how.

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brick wallOur culture in the U.S. is rife with tales of the great idea. We are fascinated by the inventor, whether it is a historical Edison, Bell, or Einstein, or a contemporary Jobs or Gates. We view idea generators, especially those who grow a small business to a big one,  as icons of success.

What our culture doesn’t celebrate is implementation, even though it often takes more time, sweat, and “smarts” to make something happen than to dream it up. In fact, we view doers, somehow, as lesser beings than so-called “visionaries.”

I do believe that ideas and theories are important. But maybe it is time to celebrate the real work of action, instead of this myth of the great idea. Because I believe the test of a great idea, in small business or large, is this: Can it be translated into something useable? Is it applicable and beneficial?

When I worked for Saatchi & Saatchi, we had a saying: “Strategy is everything, implementation is everything else.” It illustrated the recognition that big ideas are important, but implementation is just as (and sometimes more) critical.

What blocks many of us from taking an idea to fruition is the shift in thinking and energy that is needed to move from ethereal to corporeal. In fact, that shift can feel like trying to walk through a wall — a bit like Patrick Swayze’s first attempts to rearrange his molecules to slide his ghost-body through the closed door in the movie, Ghost.

The thinking shift is from your Connective intelligence — the intelligence of creativity that allows you to make connections between seemingly unconnected things — to the rational, linear, logical thinking needed to plan and implement. I’m not saying that these two intelligences cannot work in tandem, because they can. But it takes a thinking process that encourages both, and the practice and skills to move through that wall.

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Ideas are not organic things that are simply born out of a brain fully formed. They are edited over and over again and go from lumps of clay to masterpiecesEvery so often, a book comes along that’s not just a great read; it’s a must do. For small business owners, The Impact Equation is a great read and a must do.

I was fortunate to get my hands on an advance copy of the book by Chris Brogan and Julien Smith (you can buy it now!). I’ve been a fan of the authors since their bestseller, Trust Agents. For me, Trust Agents was on one of those books that crystallized how to be human online as a business.

So when I got my hands on The Impact Equation, I had high expectations. And even my high expectations were exceeded.

In The Impact Equation, Chris and Julien once again take a complex concept and brilliantly translate it into an actionable formula. This time, the formula we need as small business owners to get the attention of our customers, their influencers, and the world around them.

The formula is made up of six elements: contrast, reach, exposure, articulation, trust and echo (yes, it does spell ‘create’).

What’s cool about this equation is that the ingredients are not all that different from those you need to consider when you are working on a small business plan. Take, for example, articulation. High articulation, in this equation, means “an idea is like a sword, cutting through the fog of the brain, and hitting you in exactly the right place to make you understand it.” For many small business owners, articulation is a tough challenge. But it is one that must be conquered to get the attention of our most important audiences.

Fortunately, Chris and Julien not only explain how the ingredients combine to make impact, they also tackle the ingredients of the equation and show how to develop each of them.

You’ve heard some or all of these ingredients before in relation to your business, but in this context and combination, it’s a whole new ball game.

How important is impact for small business? Let’s say you have an idea for a business that would change the lives of thousands. If you can’t get the attention of the thousands, or those who influence them, your idea remains…just another idea. Enter The Impact Equation. You work on each of the ingredients — contrast, reach, exposure, articulation, trust and echo – and voila: watch your impact expand.

In fact, my favorite quote from the book relates to ideas: “Ideas are not organic things that are simply born out of a brain, fully formed. They are edited over and over again and go from lumps of clay to masterpieces.”

Now that I’ve read The Impact Equation, and understand the formula and its ingredients, I’ll be hard at work on my Impact Equation. How about you?

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