Business Building Tips Weekly Round-Up: October 17, 2014

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 The One Mistakes That’s Killing Your Business

In this article for Entrepreneur, Alex Banayan explains why focusing on brand building isn’t going to help most small businesses succeed and argues instead that they need to focus on the strategies used by direct marketers. According to Banayan, when marketing a small business you should:

  • Always in include an offer
  • Give a reason to respond right now
  • Give clear instructions
  • Focus on tracking, measurement, and accountability
  • Only do no-cost brand building
  • Always follow up
  • Make it look like mail order advertising
  • Strengthen your copy
  • Focus on results
  • Go on a strict direct marketing diet.

To get all of the details, click the article title above.

 

Go Guerilla! 5 Unorthodox Ways to Market Your Brand

In this article for Entrepreneur, Mike Trigg discusses some of the most successful guerilla marketing campaigns in recent years and how you can utilize some of their strategies to promote your own business. According to Trigg, you should:

  • Have a hook
  • Be provocative
  • Sell an idea, not a product
  • Make it tangible
  • Take a risk

Click the article title above to get all of the details.

Top Startup Mistakes: Not Properly Handling Money

In this week’s New Venture Mentor article I remind us, yet again, of the importance of properly managing your startup’s or small business’ money if you want to succeed. Click the article title above to see some of the most common money mistakes new entrepreneurs make, so you can avoid them.

 

The 25 Tools Every Entrepreneur Should Know About

Who doesn’t want to find inexpensive or free tools to make your life as an entrepreneur easier? In this article for Entrepreneur, Sujan Patel shares 25 of his favorites.

 

The Art of Setting Your Price

Figuring out what to charge for what you have to offer can be one of the most difficult decisions for new entrepreneurs. In this article for Inc., Eric Holtzclaw gives you some pointers for choosing the right price point including:

  • Start with your direct costs
  • Take into account ALL of your costs
  • Ignore your competition
  • Cover your opportunity costs
  • Evaluate prior projects

To get all of the details, click the article title above.

 

5 Things You Must Do To Successfully Launch a Business

In this article for Entrepreneur, Christopher Hann reminds us of some of the very basics you need to make sure are covered before you can become a successful startup founder:

  • Validate your idea
  • Shore up your plan and budget
  • Build the right team
  • Establish a support system
  • Respond to feedback and refine your model

If you’d like to learn more, click the article title above.

 

 

 

Top Startup Mistakes: Not Properly Handling Money

I post tons of articles that I find around the web and think will help you all move your businesses forward. Often, people write in asking me to elaborate on pieces of those articles so I’ve started a series to do just that. I recently posted an article from Entrepreneur about common mistakes people make when launching a new company. The next of those big mistakes: messing up your money!

One of the biggest mistakes new entrepreneurs make over and over again is making a complete mess of the company’s money. You would think we would all understand how important money management is given that a business exists to make money, yet we all too easily let things slide that we shouldn’t or forget to track certain things and end up with a huge financial mess on our hands.

I’ll be going a bit more in depth with quite a few of these in future posts because you really can’t expect to succeed without keeping the essentials in order. For now though, let’s just give a quick overview of the top ways new entrepreneurs mishandle their money:

Of course #1 is simply spending too much. Whether you’ve gotten outside funding or you’re bootstrapping on your own, it’s tempting to want to hire a team and advertise your tail off. You have to be strategic with your limited budget, however, and make sure you’re only spending on things with high ROI.

#2 is just the opposite of number 1: not being willing to spend enough. If you’re not the type that’s tempted to overspend, you’re very likely the type to refuse to spend on anything. But refusing to spend a penny and doing everything yourself is not the most efficient way to build your business. Again, you have to look at the ROI you’ll get for any money (or time) that you decide to commit to a project and sometimes it really does pay to hire an expert.

Another big way that new entrepreneurs mess up their money is just general sloppiness: their records are out of date, they’re not properly tracking, they don’t create budgets or do any forecasting, they don’t get the help of an expert, and they sometimes co-mingle funds between their personal and business accounts. All of that disorganization is common, but it’s also a disaster waiting to happen.

A fourth, very common mistake that entrepreneurs make that messes up their finances is the mis-classification of those that work for you and other HR no-nos. The IRS is not someone you want to get in trouble with so be sure you know who should be an employee vs. who should be a contractor, follow the rules if you’re using unpaid interns, properly pay out your employees’ for un-used sick or vacation days when they leave, make sure you don’t borrow from the money needed to pay your share of employment taxes, etc. You don’t want to be in hot water with the IRS so just follow the rules from the beginning. This is a case when maybe spending some money for expert help would make the most sense.

Finally, a major mistake many new entrepreneurs make is not understanding the best structure for their business and the tax consequences of the structure they do choose. If you’re not a CPA or a tax attorney, get some advice about the best option for you and your business.

Don’t screw yourself from the beginning by fumbling financially. It’s overwhelming to launch a new company and it’s easy to let the financial management basics slip through the cracks, but if you make a mess of your money you’re only creating headaches for your future self.

If you liked this video, please share the love by giving it a thumbs up on YouTube and Facebook and sharing it with your friends and colleagues. Also, don’t forget to subscribe to my channel and get yourself on the list for email updates so that you never miss the latest tips and info to help you plan and launch your new business. 

Top Startup Mistakes: Screwing Up Hiring

I post tons articles that I find around the web to help my followers move your businesses forward. Often, people write in asking me to elaborate on pieces of those articles, so I’ve started a series to do just that. I recently posted an article from Entrepreneur about common mistakes people make when launching a new company. The first of those big mistakes that I want to address: getting the hiring process wrong. 

When you’re building a business, your team is everything. Who you hire will make or break your success. A great hire can add incredible value to your company and free you up to focus on your real strengths while a bad hire can tank your business by costing you time, money, and customers. That’s why the phrase “hire slow; fire fast,” is so popular.

Despite knowing this, however, messing up the hiring process is one of the most common causes of stress and even failure for new businesses, so here are some tips to prevent you from blowing in your business:

Firstly, make sure you’re not getting into the hiring process until you’re really ready for it. Sometimes when new entrepreneurs first get started building their businesses or they’ve recently raised funding or gotten a revenue infusion, they want to run out and hire a huge team. This could be because the entrepreneur lacks confidence and feels he or she needs to bring in a ton of experts to succeed or it could be because the entrepreneur wants the ego boost of having a bunch of people on the payroll. Either way is a bad reason to hire. The only right way to do hiring is to hire to fill gaps in company needs and to improve the efficiency of the company. Before you begin hiring anyone, assess whether what they bring to the table is more or less valuable than what you’ll have to pay them + the time spent training and managing them + the other costs of hiring like taxes, benefits, and payroll. If someone will have a negative ROI, don’t hire. It’s as simple as that.

Secondly, if you have decided that you’re ready to hire, make sure you hire the right person! New business owners spend most of their time feeling like they need to put out a million fires and that there isn’t nearly enough time in the day to get even fraction of their to do lists done. That means that once it’s time to hire, they often feel like the sooner they can get someone into the position and take some of the load off, the better. However, putting too much weight on getting someone onto the team quickly is a great way to end up with even more headaches because you’ve chosen the wrong person. Taking the up-front time to assess if a candidate is really the right person for the job will pay immense dividends down the road.

When you’re going through the hiring process, of course, look at the skills and experience of your applicants because you need someone who knows their stuff and can hit the ground running. However, perhaps even more important than the candidates’ skills are the candidates’ personality, work style, commitment to your company, and long-term goals. Finding someone who is a good fit for your company’s style and culture is just as make or break as finding someone with the technical skills you need.

Additionally, make sure you play by the rules in the hiring process and beyond. The last thing you need is a migraine-inducing lawsuit because you violated employment law or didn’t clearly document your compensation agreements. This is especially important if, after bringing someone onto the team, you realize that you’ve made a mistake and need to let that person go.

Remember the adage “hire slow; fire fast.” Hire slow means add roles only when necessary and take the time needed to find the best candidates for those roles. Fire fast means don’t let a bad hire poison the well with a negative attitude or sub-par work. If you made a mistake in hiring, rectify it quickly.

Making a mess of hiring is an incredibly common – and incredibly damaging – mistake made by all too many entrepreneurs. If you follow these tips, you’ll be ahead of the game and can save yourself a lot of future stress.

 

If you liked this video, please let me know by giving it a thumbs up on YouTube and Facebook and sharing it with those in your network who could benefit. Also remember to subscribe to my channel right here by clicking at the end of the video and get on the list for email updates so you never miss the tips and info you need to help you plan and launch your business. 

 

Startup Nomad Interview with Tenecia Brown (Houston)

This week Startup Nomad is catching up Tenecia Brown, the Founder of Gradeness, a mentor at Yes We Code, and the leader of Houston’s Ms. Tech Group. We talked about leaving corporate America, choosing co-founders, being a woman of color in tech, and the entrepreneurial ecosystems in Houston and Austin. Check out the video below to hear what she had to say.

Financial Sins of Startups and Small Businesses: Mis-Classifying Workers and Other HR Mistakes

I post tons of articles that I find around the web to help you all move your businesses forward. Often, people write in asking me to elaborate on those articles so I started a series to do just that. I recently posted an article from Entrepreneur about common financial sins entrepreneurs make. The next of the big financial sins is the mis-classification of employees.

Some of the biggest mistakes that new entrepreneurs make are mistakes that, if they’re honest, they know they’re making while they’re making them but they just feel so busy and over-whelmed that things slip through the cracks. Other super common mistakes, however, are made completely accidentally, without the entrepreneur even knowing a major mistake is being made. These unknown mistakes aren’t any less harmful because you didn’t realize what you were doing, however, and one of the huge ones that the IRS, the Depatrment of Labor, and others are cracking down on lately is the improper classification of workers and other major HR no-nos in your business.

There are a few big oopsies that happen over and over again here, so let’s take a look one by one.

First up is the issue of classifying certain of your workers as independent contractors when they should be classified as employees. You all know I’m a big fan of bootstrapping and utilizing independent contractors is one technique to help entrepreneurs accomplish that. However, it’s important to remember that, while the use of independent contractors can be of great benefit to businesses in certain situations, you need to make sure that these independent contractors are actually independent contractors and not employees whom you’re just avoiding classifying as such.  This is such a big issue lately that I actually did another post just about distinguishing between employees and independent contractors. Stick around until the end of the video or head over to CateCosta.com, if you’re not already there, to get the link.

Next up is the improper use of unpaid interns. Again, as a huge advocate of bootstrapping I’ve talked about the value you can get from unpaid interns in the past. However, it’s important to realize, before you launch an internship program, that there are strict rules you need to follow in order to not run afoul of employment law when doing so. If you want to implement such a program, your best bet is to speak to an employment lawyer so you’re clear on all the rules in your state. The basics, however, are that the internship needs to be about the intern learning and gaining experience, not about your business benefitting. If you don’t have the time or inclination to mentor and nurture interns, if you don’t want to do the paperwork necessary for them to get university credit for their time as interns, or if you expect them to contribute to the team in a way that an employee would, an unpaid internship program is not right for your business.

Thirdly, there are bunches of other major HR no-nos that you need to be sure to avoid in your business:

  • Follow the rules in the hiring process so that there will be no issues of discrimination
  • Follow the rules in the firing process for the same reason
  • Take any reports of or complaints about issues in the workplace very seriously and follow the mandated procedures to protect your workforce
  • Abide by OSHA requirements
  • Don’t be slow or stingy about paying out workers who leave the company for unused sick or vacation leave

The list could go on and on, but the message should be clear: follow the rules and you’ll avoid future headaches.

If you liked this video, please share the love by giving it a big thumbs up on Facebook and YouTube and sharing it with your networks. Also, don’t forget to subscribe to the channel and to email updates so you don’t miss any tips or info to help you successfully plan and launch your new business.

Sloppy Financial Management Is Like Death by 1,000 Paper Cuts for a Small Business

I post tons of articles that I find around the web and can help you all move your businesses forward. Oftentimes, people write to me asking me to elaborate on pieces of those articles so I started a series to do just that. I recently posted an article from Entrepreneur about common financial sins entrepreneurs make. I’m going to roll a number of those sins up into one for this post here, and that’s general sloppiness when it comes to managing your business’ finances.

Whenever we talk about financial management it seems a bit silly because, for the most part, we all know what we should be doing. Every business owner is aware that the finances really are the business itself and that making a mess of the money means making a mess of the whole company. In practice, however, we all tend to get so busy with other things that seem more pressing that we can very easily let our financial management practices slide. I’ve done it, you’ve probably done it, almost everyone does it from time to time, but it’s an incredibly destructive habit that can sneak up on you and kill your business.

We’ve all heard the phrase “death by a thousand paper cuts” and sloppy financial management is the perfect example of this happening. In general, no single financial mistake or bit of financial management laziness is going to sink your business. However, if you consistently make little mistakes and frequently let things slip buy, all of those little “paper cuts” build on one another and eventually you’ve got a financial problem too big to solve and your business crumbles.

Clearly, none of us want that, so let’s remind ourselves of the top 4 sloppy financial management practices that entrepreneurs fall victim to.

First up is not keeping up to date records. Nobody likes the drudgery of tracking receipts, balancing the books, and keeping up on accounts payable and receivable, but these things are  the foundation of your business. It’s important to set a system in place that basically doesn’t allow you to not keep your records up to date. Use services that automatically update and apps that track your receipts for you. Do whatever you need to do to make sure you’re staying on top of this. One of the most common – and disheartening – reasons that small businesses fail is cash flow problems and you can nip any cash flow problems in the bud by staying up to date with your record keeping.

The second major bit of troublesome financial management laziness is not budgeting or forecasting. I get that it’s tempting to just figure stuff out as you go along and you probably have the mindset that if you just only buy things that you really need, you don’t need to bother with budgets. That’s a terrible way to look at building your business because it keeps you focused on the short term instead of creating a long-term strategy that will keep your business successful for years to come.

Thirdly, lots of brand new entrepreneurs don’t use the services of an accountant or bookkeeper because they’re trying to save their limited money upfront. I didn’t use an accountant when I started out. If you don’t know what you’re doing, however, you simply have to invest in someone who does. You’re shooting yourself in the foot if you try to take on a task that is so integral to the success of your business but that you don’t enjoy and don’t have experience with. A good accountant will save you major headaches in the future and will often save you enough on your tax bill to nearly pay for themselves.

Lastly, and this is a big one, is the co-mingling of funds. I’ve talked about this a few times before in a few different New Venture Mentor videos but it’s an issue that I see over and over and over again. Money is tight at the beginning of building a new business and things are generally totally unorganized. Sometimes you run to the store and forget to bring the right debit card and sometimes you need to cover a bill for just a couple of days and can put the money right back. It doesn’t matter what the excuse you’ve made up for yourself is. You cannot co-mingle your personal funds with your business’ funds. You need to have separate bank accounts, separate debit cards, separate credit cards, separate everything. Not only does co-mingling your personal money and your business’ money make a mess of things for you in terms of accurately tracking what’s going on, it creates a lack of division between you as a person and your business as a separate entity that will come back to bite you if your company is ever sued or when you’re trying to do your taxes if your company isn’t a pass through entity. If you’re currently mixing funds, resolve today to stop immediately. Take a look at the accounts, zero everything out to where it should be, and NEVER mix the two again.

These financial boo boos may seem minor, but if you add multiple of them up over a period of time, you’re creating major trouble for your business that will give you migraines in the future and could cost you your business altogether. Responsible financial management is the only way to keep your company healthy, so stop committing these sins today.

If you liked this video, please let me know by giving it a thumbs up on Facebook and YouTube and don’t forget to subscribe to my channel and sign-up for email updates so you never miss any tips or info to help you successfully plan and launch your company.