A Customer Database is Essential

I’ve been saying for quite some time that every business, startup or established, must have a web presence. A website is the online equivalent of a business card, brochure, and yellow pages ad all rolled into one. No matter what your business is, you must have a web presence. There is one other thing that every business, big or small, just starting out or in business for years must have: a Customer Contact Database.

Now, don’t let the word database throw you into spasms of “not more software” and “it’s too complicated.” In its most simple form, your customer contact database could be a box full of index cards with each customer’s name and contact information. At least, if you decided to do a mailing or promotion, you would know how to contact people.

There are a number of slightly higher tech solutions available, and the more specific the software, the more features you are likely to have.

• Keep contact information in your eMail software.
• Keep contact information in a spreadsheet.
• Use a contact management software such as ACT!
• Use a commercial service to manage your list (such as ConstantContact or VerticalResponse).
• Hire an outsourcer to manage your list.

I don’t care which method you choose to manage your customer contact information, but please choose one and start gathering that information now!

Starting a Business? Start Here. Go Far. LaunchX.com

Missed Opportunity to Connect with Customers

Recently, I attended a cooking demonstration at a local store. They did an excellent job. The demonstration covered exactly what it was advertised as. There weren’t too many people, so everyone could see what was being prepared. They kept everyone engaged for the full hour, and the samples at the end tasted as good as they looked.

The presenter used less than five minutes to display new products that were used in the preparation and point out where to find them in the store — not intrusive or distracting at all. So why do I bring this up in a blog post? Because they did make one major mistake. At no time in the entire process did the store get my name, number or email address. Not when I signed up for the class. Not when I arrived for the class. No “evaluate the class card.” No nothing.

Every business, no matter what you are providing to your customers must have some way to stay in contact with those customers. I’ve never purchased anything from that store yet, and while the class made me more inclined to go back and browse and shop, the store has no way to remind me of my great experience, no way to thank me for coming, no way to notify me of upcoming classes, and no way to connect with me.

Of course, not everyone who attends a class or demonstration will be willing to share their personal information. But you never know until you ask! Don’t put the time and effort into providing a high quality experience without remembering to ask for information and then put that information into your contact database. Don’t have a database? Tune in tomorrow for some thoughts on that!

Starting a Business? Start Here. Go Far. LaunchX.com

Startup Flub = Accounting Mess

I recently read this article at Entrepreneur.com and was struck by one of the “flubs” cited by the featured startup. #2 was “Instead of setting up a business account, they used their own money and ended up with an accounting mess.” This is so easy to do when starting a business. You start using your own cash in the very beginning, since you may not have your entity registered yet and can’t open a business account. However, opening your business bank account and setting up your accounting software should happen immediately after you have your entity registered. Don’t wait!

Mingling personal and business funds can cause all kinds of headaches — from not knowing exactly how much you have put into the business, not knowing how much you have spent, and not having accurate records at tax time. If your business is based on a partnership, these headaches are multiplied exponentially…leading to disagreements as to how much each partner has contributed and how much each deserves.

Using a real business accounting software from the beginning helps you keep track of all your income and expenses, all your owner contributions, and makes growth so much easier. We include Peachtree Accounting as a part of the LaunchX System (a complete business startup kit) because getting your finances in order from the beginning is so important, and Peachtree allows for easy, GAAP compliant growth.

Starting a Business? Start Here. Go Far. LaunchX.com

Possible Tax Credits for New Hires

The U.S. Senate recently passed a bill that would provide tax credits and incentives for businesses to add new hires, especially those who have been unemployed for some time. Specifically, if the bill becomes law:

• Employers that hire a worker who has been unemployed for at last 60 days would be exempt from paying the 6.2 percent Social Security payroll tax this year.
• The employer would get a $1,000 tax credit for 2011 if new employees remain employed for a full year.

Effectively, this cuts your hiring cost by the 6.2% of the tax — money you can use to pay a higher wage, pay benefits, or to help add staff within your current budget. So many startups put off initial hiring until it is too late — hopefully these tax incentives will get your business moving in the direction of hiring when you need help rather than when your business is already suffering!

Starting a Business? Start Here. Go Far. LaunchX.com

Pet Peeve of the Week – Empty Domains

I’m taking a break from my usual posts and getting on my soapbox today with my pet peeve of the week — domain names with nothing there.

While coaching an entrepreneur who is starting a new business, we tackled the issue of a company name for them. Using the process we provide in the LaunchX System, we had created a dozen good to great names and they had cleared the trademark and general search hurdles.

We then set about looking for appropriate internet domain names (because every business must have a website). What we found was over half our list of prospective names had the domain names taken. Most of those had “parking” pages. A few had nothing at all, but when we did a whois search, found that they were owned.

Now, I have no problem with a new business snagging their domain name immediately and then putting up a website later (in fact, I recommend it), but these names were snagged one, two, five years ago and there is still nothing there. 

I think that the rules should be changed so that the purchaser has a fixed amount of time to use a name (either put a site there or have it point to an active site), or it reverts back to the pool of available names. Ok….exiting the soapbox now.

Starting a Business? Start Here. Go Far. LaunchX.com

Are You Leading the Pack?

There is an old adage…”If you aren’t the lead dog, the view never changes.” This is true in business, as well. If you aren’t leading the competition in some area, then you are always trying to play catch-up to the leaders. How do you know if you are in the lead? One way is that if your competition is copying you, then you are in the lead in that area. Have you noticed how all the other sub sandwich chains are now offering “toasted” sandwiches?

This doesn’t mean that you have to be out ahead of your competition in every aspect of your business, but that you have something that makes you better than your competition. And, it means that you need to constantly evaluate whether your unique selling proposition (USP) is still unique in the marketplace. Once your competition starts copying you, you’ll have to change or improve to stand out again.

Starting a Business? Start Here. Go Far. LaunchX.com

Now is a Great Time to Start a Business

Why is right now, in the middle of a significant recession, a great time to start a business? I’ll tell you why…the economy provides opportunities to get into business for a much lower entry cost now and the opportunity to grow a business, both during the recession and during the economic recovery that will come. It is a lot like the stock market adage — “Buy Low, Sell High.” And this economy provides the opportunity for entrepreneurs to “buy low.”

Startup Costs – Everything from retail space leases to commercial vehicles to equipment and supplies are at historically (and sometimes unbelieveable) low prices. Those businesses that supply your business are competing for customers, liquidating inventory, and working hard to be successful. They want you to be able to start a new business, both for the immediate sale and for the long term potential.

Hiring Costs – Unfortunately for the millions without a job, unemployment is at a record rate in many markets. Fortunately for you (and for your new hires), that makes hiring employees to staff your new business easier than ever. Labor prices have dropped some, but more importantly, many high quality, very reliable employees are looking for a job and can start immediately. Instead of spending months looking for the right fit, it may only take days or weeks!

Competition – While many of your competitors are struggling with too high rents, too much debt, and too much unsold inventory, you will be able to open without those problems. All boats seem to float when the economy is expanding and growing. When the downturn came, however, many businesses that had poor financial management and planning, poor marketing planning and execution, and just overall poor management, were not able to hold on. If you can do it better, you can win their old customers and some new ones of your own.

The reality is that if you have ever thought of starting a business, right now is a great time to follow-through on that idea. Use the advantages you find in this recession to get your business started and growing, and develop the right habits so that when the recovery comes, you are in the right position to ride the wave!

Starting a Business? Start Here. Go Far. LaunchX.com

Why Do Entrepreneurs Not Choose a Franchise?

My last blog post provided a number of reasons that entrepreneurs choose a franchise. There are plenty of entrepreneurs that choose to start a business of their own and not purchase a franchise. Some of the reasons they give are:

• Not enough independence. Franchisees are required to open a minimum number of hours per day and days per week. You must operate the business exactly the way you are taught — no add-ons to the menu or improvements for efficiency.
• The initial franchise fee and ongoing franchise payments cut too far into the profit margin. One entrepreneur said, “If I am going to spend that much money for them to tell me how to make a sandwich, I may as well spend a month or two learning to do it on my own and pay myself with that fee.”
• For most franchises, even with a “national brand”, your individual store’s customers are only a few miles from your store. So you still have to do local marketing and advertising.

For some entrepreneurs, a franchise is the best way to own their own business. For others, after evaluating the alternatives, starting up on their own is the best choice. Whichever you choose, it is true that owning your own business is the best way to create long-term personal wealth.

Starting a Business? Start Here. Go Far. LaunchX.com

Why Do Entrepreneurs Choose a Franchise?

There are a number of reasons that entrepreneurs choose to purchase a franchise instead of opening their own independent business. Some of the main reasons given by entrepreneurs that own francises are:

• While you are in business for yourself, you aren’t in business by yourself. There is a “corporate” there to assist you, especially with the operations of your business.
• You get detailed instructions in how to do the operations of the business. If it isn’t a field you are familiar with, this provides a quicker start than learning on your own.
• There is the power of the existing brand recognition and the ability to rely on some “field of dreams” customers. (If you build it, they will come because they already know and like the brand).

Tune in to my next blog for the reasons why entrepreneurs choose not to purchase a franchise.

Starting a Business? Start Here. Go Far. LaunchX.com

It’s a Joy to Come to Work…

One of the most frequent sentiments I hear among business owners is that it is a joy to come to work because I know the business is mine! It is far easier to put in 80 hour weeks, deal with unhappy customers (especially those that are unhappy before they get to your business), and juggle all the balls at work when you are the owner because you know that you will reap the rewards.

Historically, owning your own business is the best route to personal net worth and financial independence. If I told you that in five years you would never have to worry about money again, would you be willing to work for half-pay, twice as long, for those five years? Many people wouldn’t. Those that are willing make great business owners! Ready for the most demanding and most rewarding job you’ll ever enjoy going to? Start a business and get on the road to independence and wealth!

Starting a Business? Don’t Know Where to Start? Start Here. Go Far. LaunchX.com