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How to Get Paid What You Are Worth

By Melinda Emerson on May 17, 2012 in Cash Flow & Finance, SmallBizChat, Starting A Small Business

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with Alfred Edmond @AlfredEdmondJr is SVP/Editor-at-large of Black Enterprise. He is a content leader, brand representative and expert resource for all media platforms under the Black Enterprise brand, including the magazine, television shows, web site, social media and live networking events. From 2008 through 2010, Edmond was SVP/Editor-in-chief of BlackEnterprise.com, helping to lead the transition of Black Enterprise from single-magazine publisher to digital-first multimedia company. From 1995 through 2008, Edmond was chief editor of Black Enterprise magazine. He also hosts The Urban Business Roundtable on WVON-AM in Chicago and Money Matters, a syndicated radio feature of American Urban Radio Networks.

SmallBizLady: How can a small business get paid what it is worth?

Alfred Edmond Jr: To get paid what it is worth the first thing a small business must do is understand that profits don’t happen by accident, or just by being a good, nice person or passionate about your business. To turn a consistent profit requires research and planning, so you can establish what your goods and services are worth, and then have the entrepreneurial conviction to price and sell to earn a profit on purpose and without apology.

SmallBizLady: You once wrote a blog called “Why I hate the hook-up” can you explain your idea behind this?

Alfred Edmond Jr: The “hook up” is when entrepreneurs give away their valuable goods and services to family, friends and others in their community free of charge, as a show of community support, cultural solidarity or friendship. This is very common among African American entrepreneurs, who are often pressured or guilted into hooking people up. The problem is, entrepreneurs devalue the quality of their goods and services when they routinely sell them at a loss, or give them away, which is why many of those businesses struggle and fail. The purpose of a business is to sell goods and services for a profit. If you don’t do that, you’re not in business. That’s why I hate the hook up–it weakens and kills businesses.

SmallBizLady: How should a start-up go about setting pricing?

Alfred Edmond Jr: There is a cost per unit of goods or service. There is a maximum price you can charge for that unit and still be competitive in the market place. The difference is your profit. You should know all three of these numbers at all times, and market accordingly. To figure this out, you need to break down the costs per unit to the penny, taking into account raw materials, labor, time and expertise, etc. You also need to know what customers are currently paying to others for the goods or services you provide. Price too much lower, and you won’t make a profit. Too much higher, and you’ll lose out to lower priced competition.

SmallBizLady: How often should pricing strategy be evaluated?

Alfred Edmond Jr: Pricing should be evaluated more frequently for many types of businesses. You should always be aware of what your competitors are charging, and why, especially if it is higher or lower than the prices you are considering. And remember, the competition is not just those who sell what you’re selling. They also include those selling substitutes and alternatives to what you sell.

SmallBizLady: Can you explain value-based pricing?

Alfred Edmond Jr: Value-based pricing is a business strategy. It’s when you price your product based on the value it creates for the customer. This is usually the most profitable form of pricing, if you can achieve it. Trading your skills for an hourly rate can often have you on the loosing end of the deal.

SmallBizLady: How and when should you give a discount?

Alfred Edmond Jr: Discounts must be strategic and should never be given unless they can deliver a measurable result in at least one of three ways: increase sales volume and net profit, reduce costs or some combination of these. Remember, your profit comes from having income or sales greater than your costs of doing business. Discounts that spur revenue generating behavior include those to reward loyalty (i.e. 10 visits to the dry cleaners entitles customer to 11th visit at a discount), referrals (a 5 percent discount for every new paying customer referred by a customer in a given month), or to spur purchases of higher priced items (discounting cost of fries because they will spur higher sales of sodas, which have higher margins that will offset the discount).

SmallBizLady: What is a reasonable profit margin for a professional service business?

Alfred Edmond Jr: There’s no single profit margin that can be deemed universally redeemable for a service business. It can vary widely by type of business and market area and other variables. The answer to that question can’t just be Googled or look-up; it must be researched and constantly monitored, with margin goals being adjusted by the entrepreneur.

SmallBizLady: Why are so many small business owners afraid to talk about pricing?

Alfred Edmond Jr: Many small business owners are afraid to talk about pricing for the same reason some people don’t like to take tests. They haven’t done their homework, so they can’t price with confidence. The key to pricing is doing enough research to know it, not just guess at it. Entrepreneurs who are experts in their industry, not just their business, know prices and can talk about them with confidence. The others? Those are the ones who drop their prices at the first sign of competition, or as a substitute for actually selling the customer on the value of their wares.

SmallBizLady: Why do so many business owners avoid numbers?

Alfred Edmond Jr: Many small business owners have a hard time with numbers because once you know the numbers, you have to do something about it. Numbers aren’t impressed with your title, your business cards, your passion for your business. Either you’re turning a profit or you’re not. It’s amazing how many entrepreneurs do all they can to avoid that reality check. Great entrepreneurs love numbers, because they know that business is a competition and profit is how you keep score.

SmallBizLady: How can you market yourself in a way to prove you are worth what you want to charge?

Alfred Edmond Jr: The best way to market that you are worth what you want to charge is to get your satisfied customers to do the talking for you. Go out of your way to wow your customers and then get the most influential among them to sing your praises, both via word of mouth and social media. If you are as good as you say you are, they won’t hesitate. And if they do hesitate, you need to find out why, so you can make the changes necessary to inspire them to do so.

SmallBizLady: What are your top 3 tips for raising price without losing customers?

Alfred Edmond Jr:. Tips to raise prices without losing customers:

A. Don’t let a price hike be a surprise to your best or most loyal customers. Tell them up front that it’s coming, be honest about why, and communicate how it will improve the quality of your products or services for them. Also tell them when it’s coming, to give them time to adjust.
B. If possible, delay the price increase for your best (highest spending), regular customers.
C. Show evidence that your increased price is still lower than your competitors, or that you are adding improvements and features others are not offering with their price hikes.

SmallBizLady: What is your opinion of MLM or multilevel marketing businesses as a real way to generate profit margin?

Alfred Edmond Jr: My opinion of the MLM business is the same for any business: focus on the numbers. No matter the compensation system, you will occur measurable costs to participate, and that includes the cost of the product you buy for yourself, even though you’ll get credit for those purchases. (Forget the argument that those purchases aren’t real costs because you would have bought those beauty products from someone anyway. As an entrepreneur, not just a customer, EVERY cost counts.) Also add in the value of your time–because no matter what you’re told, selling takes time and nothing sells itself. Know what your costs are and how much product you have to sell before you recoup what you’ve spent. If you can turn a consistent profit with an MLM business great.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. Here’s how to participate in #Smallbizchathttp://bit.ly/S797e

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.

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5 Ways Color Can Improve Your Small Business

By Melinda Emerson on April 16, 2012 in Branding & Marketing, Grow Your Business, Starting A Small Business

SPONSORED POST

Ever since color television was invented in 1953, color has been critical to telling a visual story. Whether you are a start-up or established business, spending the extra money on color images or color ink may seem out of the question when you are launching a marketing campaign. But using color could mean the difference between whether your marketing materials get read, or tossed into file zero—the trash. Putting it simply, color gets noticed. Printing in color can improve retention, productivity and generate significant financial returns. A recent Xerox Color Survey reported that 76% of respondents said they could find information faster when printed in color. So as you think about developing collateral materials for your small business — think color.

Here are 5 ways color can improve your small business:

Create a color logo: There are five common principles of logo design. A logo must be simple and memorable which means it is easy to recognize. A logo must also be versatile & appropriate. This means it can be scaled to any size and it must be right for your type of business. You wouldn’t use an elegant font for a pizza joint. Good logos feature something unexpected or unique without being over the top. An effective logo should be timeless and stand the test of time. Always use at least two colors in a logo and hire a professional to assist you. Your company name in a stylized font is NOT a logo.

Colorful business cards: You want your business card to be memorable. Use at least two colors in your business cards. Even consider using a strong background color to stand out. My business cards for my company Quintessence Multimedia are red, and people always comment on their uniqueness. Invest in a quality paper stock as well. You want your attention to detail to be noticed. Do not order business cards that are free off of the internet. It’s printed on the back that they were free and that could hurt your credibility with the person you give them to.

Smiling Color Headshot: Anyone in business should have a professional headshot. This is a must have for all your social media profiles and could be used on your website and in your marketing materials. You need a friendly, smiling headshot because – remember you are selling yourself as much as your product or service. Investment should be around $300 – $500 to get one taken.

Color flyers: You should have a color one-sheet or two–sided flyer to promote your products and services. Consider glossy flyers, they always look more expensive and polished. Great flyers include a headline, which describes what you specialize in, your company logo, great color photos of you, your employees in action or your products. Also be sure to include at least a partial list of your offerings.

Color Direct Mailer: Have you ever received a black and white mailer from someone looking for business from you? What did you think about the business who sent it? Not much, right? Don’t make that mistake. Design a direct mail piece that represents you well. It should feature color pictures of your products or services being used or performed in action. Make sure it includes your color logo, complete contact information and a special offer as your call to action. For example, include a promotion of “10% off if you mention this flyer when placing an order.”

Want to take your materials to the next level? Engage a professional when designing your materials; it can make all the difference. Eight-seven percent of respondents in a recent Xerox survey said professional graphics used in marketing materials such a brochures was a key ingredient in the success of a product or service.

Your investment in quality marketing materials will speak for you when you are not around to sell yourself. Keep in mind, you don’t have to do this yourself there are resources available like, Openforum.com or your printer’s free templates for download. Xerox.com also offers great free resources.

- For flyers: http://www.office.xerox.com/small-business-templates/flyers/enus.html
- For business cards templates: http://www.office.xerox.com/small-business-templates/corporate-identity/acrobat/enus.html
- For direct mailer templates: http://www.office.xerox.com/small-business-templates/direct-mail-design/enus.html
Color is not that expensive anymore, so go for it. You want every advantage when you are trying to close a customer.

If you are thinking about a new copier/printer/scanner/email and fax machine, how about the Xerox ColorQube 8700

Disclosure: Melinda Emerson produced this content as a paid contributor to Xerox. The content is the author’s opinion and does not necessarily reflect the views of Xerox.

Do you have more great ways that you use color in your small business?

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.

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How to Get New Customers Part II

By Melinda Emerson on April 3, 2012 in Branding & Marketing, Grow Your Business, Melinda Emerson @SmallBizLady, Starting A Small Business

There are numerous ways of getting new customers but not all methods are applicable to all businesses. I also need to remind you that getting repeat business from your existing customers is far easier than attracting new customers, but it is important to have a strategy for getting new customers in the door. In Part 1 of this series, I provided a philosophy and an approach for obtaining more business. Choosing your best customer acquisition strategy will be driven by why your customer is buying, their purchase frequency, and how they collect purchase information. In Part 2, the focus is on specific strategies and tactics to create a stampede in your small business.

Here are 7 strategies for getting new customers:

Start advertising: You want customers to know you exist – If you have a storefront business that depends on local customers. Consider investing in local online advertising, direct mail, flyers, or local penny-saver ads. You can also do pay per click ads online too. Use calls to action in each advertising initiative to get prospects to contact you. Do not start any advertising program that you can’t maintain for at least six months.
Start building a prospect list. One of the key ingredients in a business is having an active prospect list. One of the best ways to build your list is through your website. You should have 3-5 ways to engage web visitors to get them to give you their contact information. Create a coupon or giveaway from your website. It could be a special report, free chapter of a book, or audio interview, a 10% off coupon, a free estimate or a giveaway for the first X number of new customers who download the giveaway.
Launch a public relations campaign: Your PR campaign should have a story behind it. The fact that you open your doors is not compelling enough. Consider having a PR tie-in a local charity, cause or group. For example, my neighbor got a front-page story in our local community paper as a donor of care packages in support of our troops. The article also highlighted her business and her contact information. You can always donate a portion of net proceeds to charity and get a tax write-off too.
Use incentives: Give your current customers referral incentives – everybody likes a deal. If an existing customer gets a special discount, cash, or free stuff for recommending a new customer to your business, it creates a winning situation for everyone. Interestingly enough, when you give a surprise benefit to an existing client, like a free pizza after so many purchased or a “no charge” for a regular dry cleaning customer, or free shipping and a discount on future business, customers tell others about these unexpected bonuses.
Develop a social marketing strategy: – Like it or not, we are in a digital age and ignoring free marketing tools, such as social networking sites is just plain foolish. You must be googleable! It used to be that all you had to do was build a website, now you need a blog and to have a social media footprint to go with it. No one uses the yellow pages any more. It is pretty common that if we want to know anything about anything we go to the internet. If your business is not there, it can really impact your visibility. Read, read, read and seek out a professional to get you started with social media marketing. Check out my book “Become Your Own Boss In 12 Months” to get more insights on building an online brand.
Use Success By Association – Become a part of your industry trade organization, local Chamber of Commerce, Rotary Club, community service organizations, and other groups both local and national. My active membership in the National Speakers Association led to some outstanding business contacts for me. It is very satisfying to learn from peers and fellow business owners.
Create recognizable value – If you are in a business where you can provide informational value through articles or newsletters that provide tangible customer benefit, it can lead to getting a new customer and development of a “following”. Media is always looking for content to sustain itself and to grow. If you have a message of interest, write an article for your local media outlet, notify your local TV or radio station about your unique business and the benefit it brings. Don’t keep your better mousetrap a secret.

Getting the word out about you and your business will take planning and hardwork and you will sell your faith in your enterprise. It is not always easy to do, but persistence will get you to success.

Do you have any other tactics to share on getting new customers?

Enter the #SMBSolidInk Twitter Sweepstakes! Your Chance to Win a New ColorQube 8700 for Your Small Business! Follow @Xeroxoffice for details http://bit.ly/HsA9Xt

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

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How Do I Get New Customers Part 1

By Melinda Emerson on April 2, 2012 in Branding & Marketing, Grow Your Business, Melinda Emerson @SmallBizLady, Starting A Small Business

So often I am asked about how to get new customers that I decided to develop a two part series on the topic.

No customers, no business. A simple and obvious fact, which leads new business owners to ask the question “How do I get customers to see and buy from my business?” The first question to ask yourself is: Who are your customers and how do they like to buy the kind of products you’re selling? You want to be able to see the “face” of your primary customer. Is it a child, teenager, senior citizen, a techie, “do-it-yourself” person, a woman, a man, or some other demographic? If your target customer is Hispanic, it would not make much sense to advertise your product in an Irish magazine or Jewish website. Knowing your target customer lets you tailor your message to who’s buying.

Is your business a “brick and mortar” storefront? Online? Industry specific? Are you selling pizza, hats or doing software consulting? Your approach to creating “buzz” for your enterprise will vary in each case. If I am selling pizzas, I’ll advertise locally via the web and direct mail to announce specials, offer coupons, and give great friendly service. This business is built on the perception of competitive value-pricing, tasty meals, and ease of ordering on-line or by phone. Your likely customer will be within a few miles of your store and wants quick pick-up or available local delivery. Specials will get new customers in the door, but quality, value and taste will bring them back and get them to tell their friends. Having an online presence is important because it makes it easier for customers to order and to see all of your menu items.

If you are selling hats, you have several marketing options. You can offer hats online showing a variety of styles, perhaps with a buy-one get-one 50% off and free shipping. Consider partnering with local women’s organizations on fashion show fundraisers where you offer a discount on the hats shown. Or you can partner with a local boutique to help them accessorize their outfits — with special prices on your hats.

If you are developing a software consulting business you must position your business carefully. How unique are your programming skills? How much demand is there for what you know? Is a business built on reputation, contacts, networking or SEO? You must have a very targeted audience. You might start by creating a website and brochure outlining your skills and experience and distribute it to your network of contacts online and offline. Look through Information Technology magazine want ads to look for good matches to your qualifications. Sometimes a company looking for an employee might be willing to outsource the services to a company instead.

The underlying philosophy in getting new customers is trying to get them to buy when they have a need or are “in market.” We are “in market” for groceries when we run out of food, or for a new washing machine when the old one finally breaks down, or for another car when the cost to fix our current car is just not worth it anymore. The key is the right offer at the right time to increase the chances that customers will call or come in ready to make a purchase. Some offers must have a seasonal flavor, you don’t sell snow shovels in July, some are timed to days of the week – 30% off on Tuesday or after 3pm, restaurant deals for slow mid-week periods geared to seniors for example. It is also true that sometimes a customer being “in market “ is dependent on future plans for example a home renovation, creating a web site, deciding to plant a garden, to join a gym, or take a vacation. All of these activities typically mean that money is going to be spent and not surprisingly, cost-conscious customers still want that great deal. Now that we have covered the framework for getting new customers, Part 2 of this series will get into specifics of attracting new customers. Remember, choosing your best customer acquisition strategy will be driven by why your customer is buying, their purchase frequency, and how they get their purchase information.

Do you have any ideas to share about how to get new customers?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog.

Melinda F. Emerson, known as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.

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How to Be Successful as a Franchise Owner with Dina Dwyer-Owens

By on March 22, 2012 in Mompreneurs, Q & A Interviews, SmallBizChat, Starting A Small Business, Women in Business

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with @DinaDwyerOwens. She’s the Chairwoman and CEO of The Dwyer Group www.dwyergroup.com over such well-known service brands as Mr. Rooter, Aire Serv Heating and Air Conditioning, and Glass Doctor. She is also a past chairwoman of the International Franchise Association in Washington D.C., the world’s largest advocacy group for franchising. She’s the author of Live R.I.C.H.: How to build success in your company and your life with a proven Code of Values. And many people now know her form her appearance earlier this year on the CBS hit reality show “Undercover Boss” where she went on the front lines of her business in search of her company’s Code of Values at work. For more information www.dinadwyerowens.com

Smallbizlady: What exactly is franchising?

Dina Dwyer-Owens: Franchising is a business strategy – a method of distributing products or services. The “franchisor” lends a trademark, trade name and business system. The “franchisee” pays an initial fee and ongoing royalty for the right to do business under the franchisor’s name and system.

Smallbizlady: Where do I start if I want to buy a franchise?

Dina Dwyer-Owens: The best place to start is by finding something that you’re passionate about — something that you can look forward to doing every day. That is true of any career. But it is even more powerful when you plan to be your own boss and invest in a franchise! There are over 825,000 franchise businesses across 300 business lines, so the key is identifying which franchise opportunity best fits you and your personal and professional desires.

Visit www.franchise.org – the website for the International Franchise Associate to look at franchise opportunities.
Talk to existing franchise owners of concepts that interest you.
Request a Franchise Disclosure Document (FDD), a document required by law that details the franchise opportunity.

Smallbizlady: What does a franchise cost?

Dina Dwyer-Owens: Investment levels range from $5,000 to multi-millions. There are home-based businesses and then there are large retail opportunities. There is something for everyone and your ability to finance an opportunity will also help define the franchise that is right for you.

Smallbizlady: Am I more likely to succeed with a franchise?

Dina Dwyer-Owens: Franchising is not for everyone. And buying a franchise does not automatically guarantee business success. The system works IF you work the system. You should not expect to join a recognizable brand and sit back and expect the customers to find you. A good franchise owner is still proactive about marketing the business and following a system that has been proven and replicated across a successful brand. The most successful franchises still require hard work and dedication.

Smallbizlady: What are the biggest advantages of owning a franchised business versus being an independent business?

Dina Dwyer-Owens: There is a popular saying that franchising is about being in business for yourself, but not by yourself. The advantages to joining a franchise include: (1) buying power with vendors that command a better price for things needed to run your business, (2) national branding and name recognition, (3) support and training from your franchisor, (4) peer-to-peer networking to share best practices with others who know your business and are not your competitors, and more.

Smallbizlady: What are a few important things people should know about franchising?

Dina Dwyer-Owens: A franchisee is not completely independent. The franchisee will pay ongoing royalties and advertising fees to the franchisor for the rights to operate under that business. The term of a franchise agreement is usually limited until that time that it comes up for renewal. And, likewise, there is often a well-traveled exit strategy at a time that a franchisee wants to retire or desires to sell his or her business.

Smallbizlady: Are there special programs to help assist in purchasing a franchise?

Dina Dwyer-Owens: There are several. Two that come to mind are VetFran (which was started by The Dwyer Group) and MinorityFran. VetFran is now supported by the International Franchise Association and the US Department of Veterans Affairs and the Small Business Administration. Today, more than 450 franchisors offer military veterans their best financial discount on purchasing a franchise, and more than 2,100 franchises have been awarded through the program.

MinorityFran provides one convenient place where minority prospects can explore franchise opportunities from companies actively seeking minority franchisees. The program partners with Small Business Development Centers, Urban League chapters, and Minority Business Development Agencies among others.

Then there are also franchisors (like at The Dwyer Group) that assist in providing financing.

Smallbizlady: What are some of the latest trends in franchising?

Dina Dwyer-Owens: In today’s economy, it’s increasingly difficult to secure a loan for a small business – even for people with perfect credit. Yet small businesses in America are what have led our country through tough economic times again and again. As bank lending remains tight, franchisors and franchisees are working together to help people into business. At The Dwyer Group, we have always offered financing to qualified prospects. And there is a growing number of people across franchising who are taking advantage of programs like VetFran and other discounts, because together we are making the business world stronger.
Smallbizlady: You have coined the phrase “Live RICH” Can your define that?

Dina Dwyer-Owens: At The Dwyer Group, we operate our businesses with a Code of Values, based on the themes of Respect, Integrity, Customer Focus and Having Fun in the Process. That is what it means to Live RICH, and it’s at the heart of our corporate culture. I consider it a big reason why we are successful across our brands. We do not claim to be perfect, but our values provide us a roadmap to follow that allows us to do our very best. And I’ve written about it to share it with others in my book Live RICH.

Smallbizlady: You are the second generation in your family to run your company, in a male-dominated industry, no less. How do you do it?

Dina Dwyer-Owens: I surround myself with a great team, and each team member brings strengths to our organization that work together to create a great company and successful service brands. As for being a woman in my industry, I am also the target customer for our service brands. I am the woman of the house who hires our service brands in a majority of the jobs our franchisees perform. That is a wonderful perspective that we have embraced across our franchise family in putting “Customers First.” For the woman of the house, concerns go beyond just a service repair. There’s a branded van, a service professional in a clean uniform, booties worn in the house, a doormat with a logo and so much more that enhance the customer experience. Being a woman is a win-win in leading an organization that supports this level of service.

Smallbizlady: How did you define success in your 30s and How do you define it now?

Dina Dwyer-Owens: In my 30s it was about proving myself capable in the tasks of leadership. It was about attracting private equity and getting back to our roots in focusing on our core service brands. I traveled a lot. I was away from home a lot. But all the work by our team laid the foundation for an even stronger future. In my 40s, success is about growing our team and our brands to the next level with our next private equity partner. It’s championing what we know, which in fact has given me more time to prioritize. I still work hard, but I make more time for my family and my faith on a regular basis. I have more balance today, which I call a huge success.

Smallbizlady: If you could stand on a roof and shout small business advice to the audience below what would you say?

Dina Dwyer-Owens: Small business is empowering, and we need much more of it. Small business is the future. We’ve heard enough about the ills of Wall Street. Now it’s time to get back to Main Street and honor the men and women who are truly the backbone of our economy. More people want to be their own boss, want to determine their own destinies, want to create desirable workplaces and do things they are passionate about. Small business is championing those answers.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. Here’s how to participate in #Smallbizchat http://bit.ly/S797e

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her one of the Top 20 women for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)

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Five Reasons Your Company Should Have a Platform

By Melinda Emerson on March 13, 2012 in Guest Articles, Social Media, Starting A Small Business

These days, you can’t go five minutes without hearing someone talk about platforms. The term is almost a buzzword. As I explain in The Age of the Platform, a platform is merely a structure made up of “planks,” or integrated features. For instance, Google in 1998 wasn’t a platform; it was a really neat search engine. By adding planks such as Gmail, Maps, Docs, Voice, YouTube, and countless others, it became a true platform.

By comparison, a traditional business based on a 20th-century model produces one or more closely related products or services, then uses marketing to try to attract customers. This business model can no longer compete with 21st-century, platform-based companies that have learned how to integrate an ever-widening universe of consumers and partners into their ecosystems. Consumers are driving today’s economy—not enterprises. Consumer-driven platforms matter more than ever.

Wondering whether to investigate — and invest in — the platform as your company’s business model? Here are five benefits that may motivate you:

Increased Innovation

All companies face limits; not even Google has infinite resources. But you can dramatically expand those limits. Building a powerful platform lets you cultivate an ecosystem of developers, partners, users, and other collaborators who contribute to — and may drive — innovation at your company.

Think of Apple’s app tsunami. By inviting thousands of users to develop apps for its iPhone and iPad, the company generated billions in new revenue. It has tapped into an endless stream of inventors and innovation.

Tip: Offering tools such as application programming interfaces (APIs) and software development kits (SDKs) only gets you halfway there. You have to create incentives for prospective partners to extend your platform and build different planks for your mutual benefit.

Quicker Response Times

Platform companies move faster than their traditional counterparts. When your core products and services frequently change, it forces your employees and your organization to embrace change quickly. Bad habits are less likely to get ossified.

Think of Amazon. First it sold only books. Soon it started selling virtually everything. In 2007 the company launched the Kindle. In 2010 it started publishing books to read on the Kindle. In 2011 it introduced the Fire, to compete with the iPad. The Fire brings everything together — shopping, reading, and consuming media — and introduces more e-commerce and social networking opportunities. Can the company handle all this change? No problem!

Tip: Find employees who are comfortable with change. To build a platform, you can’t rely on people who consistently resist new ways of doing things.

Reduced Risk

What if your company only does one thing, as mine did in 2008? What if the market for that thing suddenly dries up? Platforms encourage diversification and thus reduce risk.

Imagine if Apple had remained only a maker of stylish but expensive computers? Chances are it would be struggling for its very existence right now. But with its multi-pronged platform extending into music, telecommunications, media, commerce, entertainment, and education, Apple is beautifully positioned to withstand any surprises the market sends its way.

Tip: Try to find potential partners with complementary interests—and don’t be greedy. Grow the pie together.

Greater Brand Awareness

Platforms and ecosystems mean that customers are out there extending your brand in innovative ways.

Facebook is a beautiful example. Although it began as a social networking site for college kids, Facebook, through continual growth and invention, has expanded its offerings to include business and marketing sites, community gaming sites, email, instant messaging, groups, blogs, advertising, consumer data mining, and much more. More than 50 million Facebook “likes” are clicked daily, and by some estimates one out of every eight people on the planet will be a Facebook user soon.

Tip: Think about innovative ways to extend your brand. Survey trusted customers and clients to find out what services or products they wish you offered.

A Bigger Customer Base

This one is simple. More products and services mean more customers.

Tip: No, a local butcher can’t also offer ballet dances. But what if he creates an app? What if he blogs about recipes and cooking tips? What if he cultivates a tribe?

About the Author

Phil Simon is the author of four management books. His fourth, The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business, is his most ambitious yet. A recognized technology expert, he advises companies on how to optimize their use of technology.

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In Just 365 Days You Can Become Your Own Boss

By Melinda Emerson on January 9, 2012 in How to Start, Starting A Small Business

If you have always wanted to become your own boss, now is a great time. I realize that you are probably saying to yourself a year, Really? But trust me, 12 months is a reasonable and realistic timeframe to make your transition from employee to entrepreneur. You will want to take the time to plan your success; otherwise you could create a business that feels like a noose around your neck. You can mess around the kill the thought of something you used to love to do. I know that it is so tempting to just quit your job today, but try these steps first before jumping into the shark infested waters known as small business ownership. The reason why I call the waters shark infested is because when you are an entrepreneur, you must kill for your dinner everyday. Here are 6 steps to Become Your Own Boss in 12 months. I also call it the Emerson Planning System.

Develop a life plan: You really need to spend some quality time with yourself. Create a life planning journal so that you can examine how you life, what you love, what makes you laugh, and what you need to learn. Get clear on how much money you need to make to be happy. Find out what you want out of life and build a business that aligns with that.

Examine your personal finances: Develop a financial plan. Your ability to save has everything to do with your ability to start a business. BYOB stands for be your own bank. Make sure your credit score is 700 or higher and get rid of any debt. You will need to have money to live on while you pursue your entrepreneurial dream. And you need money to launch the business too.

Validate your business concept: Make sure there is a paying customer out there willing to buy your product or service. Test market your idea. Do not start a business people need, start a business people are willing to pay for. Be sure you know what skills you have and need to run your business as well. Don’t start a restaurant if you have never worked in one.

Start with a marketing plan: You need to make sure you know who is going to buy from your company and why? Develop a niche target customer. People want to hire people who specialize in solving their problem every day. If everyone can use your product or service no one will. Pick a niche and own your niche.

Write a business plan: If you want your business to have the best potential chance for success, you need a plan. The best way to create a business plan is with software. There many free options such as www.enloop.com or you can invest in top the line solution such as businessplanpro.com. After you take a crack at it, sign-up for a business plan course make sure that you can complete it. The finances are usually the toughest part, the course will help you get your initial costs and budget done correctly. You want to make sure you understand how much profit is in every sale.

Start your business as a side-hustle: Start your business while you are still working, if you can. It takes 18-36 months to breakeven in a small business. If you start before you quit your job you’ll be closer to making money before your cut off your paychecks. Learn on someone else’s dime. If there are skills or connections you need to learn to run your business such as computer skills or gaining key industry contacts many times you can get those from your current employer. Plan your escape from corporate America.

If you follow these simple steps, this time next year you’ll be open for business.

What three things will you do for your business today to make sure you eat tomorrow?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

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How to find a manufacturer for your small business product?

By Melinda Emerson on December 12, 2011 in How to Start, Starting A Small Business

I have been talking to quite a few small business inventors lastly, and the most common question that keeps coming up is how to find a manufacturer for your small business product. Most of the business owners in my network use foreign manufacturers, so that is where my advice is centered. Here are some tips I have gathered from interviewing a few successful entrepreneurs about small business manufacturing. They all made a few universal comments: Look for word of mouth recommendations from other small business owners. There are US companies who specialize in sourcing foreign manufacturers. Try to have a prototype built in the U.S. With a foreign manufacturer, you always want approaching them with a prototype.

Work directly with the factory. Try to remove the middleman. Working with an agent, representative or distributor is really a bad idea. Those people make 5%-40%, and it will slow down the decision making time and increase pricing. Keep in mind, you need to have certain dollar amount and quantity volumes to work directly with the factory as a house account. Factories are interested in producing 10,000 items at one time and not 300 pieces a month. They will try to push you to use a broker if your quantity is too small.

You must be prepared to be the problem solver. If there is a problem, the small business owner has to come up with a solution. All factories do is to make the products based on a pattern that is provided. It’s ok to send someone to the factory to get it right. A hands-on approach could be the best and only solution.

Do you homework on your manufacturing partner. Ask for client references and check them. Ask them for banking references as well.

Have someone on the ground doing quality control: You must have someone inspecting your merchandise! Make sure that damaged goods or incorrect items are not

shipped to the you.

5 Key questions to ask a perspective manufacturer:

Can the manufacturer deliver on your timeline? You want to know up front that they have the capacity to produce your product.

What are the payment terms? How will they take the order, what percentage do they need up front? Who responsible for the banking fees? Many manufacturers require 30% down and full payment before shipment.

What are their quality control policies? You want to know what are their policies for quality control inspections, and need to understand a policy about returns.

Where is their factory located? You need to travel to see the factory in person.

Who is going to warehouse the goods? You need to know if the manufacturer will store finished goods or if you have to have a warehousing facility.

Partnering with a foreign manufacturer could cut costs significantly in your small business. Just be clear about your expectations, and make sure that you provide examples of everything you want them to do, and how you need the finished product.

Do you have any other tips for finding a manufacturer?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com

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Do you have an idea for the next great tech start-up?

By Melinda Emerson on November 14, 2011 in How to Start, Social Media, Starting A Small Business, Technology

Last night, CNN debuted Black in America 4 with Soledad O’Brien, which featured 8 African-American tech entrepreneurs who went out to Silicon Valley this summer to participate in a business incubator with the hopes of landing seed capital to catapult their entrepreneurial dreams. It was an amazing mix between MTV’s the Real World and Donald Trump’s Apprentice. These business owners had the opportunity to sit at the feet of tech masters in Silicon Valley and learn the art of “the pitch.” The whole goal of the program is position participants to secure venture capital or angel investment for their consumer driven app or websites to launch their businesses.

I had the opportunity last week to interview Wayne Sutton, North Carolina based tech entrepreneur, publisher of the tech blog SocialWayne.Com, one of the founders of the New Media Accelerator . He along with co-founder Angela Benton,CEO of BlackWeb20.com the leading online publication for African-Americans interested in Technology and New Media.

Here’s to my three minute video interview: http://www.youtube.com/watch?v=153x4QxP8LQ

Applications to be in the second class of the New Media Accelerator are due by Dec 16, 2011 so not delay. If you are a minority or women tech entrepreneur this could be the opportunity of a life time.

After the documentary aired last night CNN’s Tech guru Mario Armstrong host a live panel discussion on the web with seasoned veterans of the innovation space to further discuss how a pipeline of minority techpreneurs could be cultivated. The panel included Terry Jones, Syncom Venture Partners, Christian S. Johnansson, Serial entrepreneur & Secretary of Business & Economic Development State of Maryland, Dave Troy, Venture capitalist & 410Labs.com, Hank Williams, Tech entrepreneur, founder Kloudco.com, Wayne Sutton, Newmeaccelator.com , Ellen Hammerly, Exec Director UMBC Research and Technology Park. You can watch a replay of the webcast of the panel discussion on http://www.marioarmstrong.com

Some of the key takeaways from the webcast:

You do not need to go to Silicon Valley to hit it big as a tech start-up.
Use the tools of technology to build the relationships to learn what you need to know for your business.
Build a PLN, a Personal Learning Network
Look at the state you are in to see if there is any seed money for tech start-ups. Maryland has a great program check out www.ChooseMaryland.org.
Learn on someone else’s dime
Check out the book The Lean Startup by Eric Ries and I would highly recommend my own book too Become Your Own Boss in 12 Months by Melinda F. Emerson.
We should all seek inclusive excellence. Everyone can live their entrepreneurial dreams.

Additional resources to launch your technology start-up:

Codeacademy.com They provide expert instruction, mentorship, and an immersive environment to learn how to code.

Startupdigest.com Kauffman foundation’s tech website.

Namde.org National Association of Multicultural Digital Entrepreneurs (NAMDE), a one-of-a-kind Washington-DC based trade association

Activateprogram.org ACTiVATE is an applied tech entrepreneurship program for experienced women.

Alice.org Free scripting and prototyping environment program for 3D object behavior.

Scratch.mit.edu Scratch is a programming language for everyone. Create interactive stories, games, music and art – and share them online.

Do you have any suggestions for helping minority and women tech entrepreneurs?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.

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5 Things Wrong With Your Business Plan

By Melinda Emerson on November 7, 2011 in Branding & Marketing, Cash Flow & Finance, Starting A Small Business

If you’ve taken the time to develop a business plan for your start-up business, you are on the right track. You have a roadmap that will help you with decision-making in your new enterprise. Take the time to be sure your business plan doesn’t contain any of the following shortcomings that will prevent your business from being effective. If you need help, check put my three part series on how to write a business plan for even more advice.

You haven’t researched your market. Many business owners don’t have enough information about who is buying their products and why. You need to find out who your ideal customers are, what their income is, what their buying habits are, and how they make purchasing decisions, for a start. You can do this by conducting surveys or polls online, interviewing people you consider potential customers, and searching for existing data on your demographic. Organizing the results will give you a clear picture of your customers’ perspective. This is an advantage when you develop messaging and begin to “talk” to them. All public relations and customer communications should center around customer pain points.

You haven’t researched your competitors. Know who your competitors are and stay up to date on their activities not only helps you make strategy decisions, it is a learning experience as well. You should know who has the best quality product or service at what price and who has the least, what customers are saying about the company, any financials made publicly available, and what kind of marketing or advertising they do. As you follow your competitors’ movements, you will be able to observe the rewards and consequences of their decisions on many levels, and adjust your own strategy to expand, advance, or target your market in new ways.

You haven’t planned for growth. A business plan is an action plan. It’s hard to motivate yourself, your employees, and your investors with research and projections. Be sure your plan outlines an actual plan for at least one future scenario. I say at least one because you should make plans for factors beyond your control that may derail your first plan.

You don’t know your numbers. Running a business is all numbers. Sales projections, production yields, profit estimates and more can swallow the heart of a business plan: the viability of your business model. Don’t get so focused on month-to-month numbers that you lose sight of whether your business idea, operations, and strategic decisions will allow those numbers to be actualized.

Your business plan is not up-to-date. If your plan is outdated, you will not be able to use it to run your business. Most business plans are created before launch. When your new business meets the real world, however, you often need to make adjustments that aren’t incorporated or reflected in your written plans. If you haven’t looked at your business plan in a while, ask yourself why. Is it because you’ve made so many changes to daily operations, or your numbers don’t correlate with what’s on paper at all? Take the time to sit down and go over your business plan once again and decide whether you need to make changes or make a new one that will better reflect your business’s current direction.

Do you have any other common business plans mistakes for small business owner?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

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Is Your Life Plan Working For You?

By Melinda Emerson on September 12, 2011 in How to Start, Starting A Small Business

I am a firm believer that you need a life plan before you ever write a business plan. Your life plan is your big picture vision for your life. Your reasons for starting your business should be to fulfill your life plan. It’s also a step in business planning that is often overlooked.

Why is life planning important?

Many people dream about owning a small business. You may be one of those people who have had a “notion” for years that someday you would be president of a company, successful beyond your wildest dreams. Turning that dream into reality is an evolutionary process. It involves not only having a solid business idea but also knowing the “business of running a business.” You will need to get your arms around stuff like accounting, marketing, and operations, but before you dive into crunching numbers for your business plan, consider this:

Entrepreneurs who don’t get clear about what they want from life run the risk of starting a business that might not be a good business for them.

A life plan is your personal strategic plan for your life goals. Before you develop a business plan, you must first have a life goal. Everyone should take the time to evaluate how they live. Then, develop a plan to achieve how they really want to live. Other elements include things like “Where are you a rockstar?” “What makes you laugh?” “What do you love to do?” “What do you dislike doing?” And “What do you need to learn?” With the answers to these questions you will be clear about what your passions are and how you really need your life to work in order to be successful as an entrepreneur.

Do not make the mistake of assuming what the entrepreneurial lifestyle will be like. Not everyone is cut out to be a small business owner. You will go from doing up to 3 jobs at once in corporate America to doing 10-14 jobs overnight for your own business. And guess what? Every job is important. The best way to stay motivated in your business is to know you are working towards your personal life goal.

To really get a good picture of your life plan as an entrepreneur, answer the following questions:

What kind of lifestyle do you want to have as an entrepreneur?
How big do you want your business to get in terms of profits and staff?
Will you have employees?
How many hours a week will you work?
Do you need to meet the school bus every day or take off every Friday?
Are you willing to work seven days a week? If so, how long can you keep that up?
Will you need a partner and could you handle working with one?
How will you fund your household while you start your business?

If you still need help with developing a life plan try my life planning journal. It’s a dynamic 74 page downloadable PDF which will allow you to enter your information right in the document and then print it for your records.

You may have a great business idea, but you must determine if it’s a good business for you and your family. Do not trade a soul-sapping job for a business that feels like a rope around your neck. With a life plan you will have a goal, then you can develop a business that will align with your personal goals and professional success.

Do you have a life plan for yourself? Tell me, is your Life Plan working for you?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her the #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)

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How to Interview For Your First Employee

By Melinda Emerson on September 7, 2011 in Grow Your Business, Starting A Small Business

Choosing the right person to do the job can be a challenge. It all comes down to your interview process. Once you have reviewed the resumes, its’ time to get in touch with your prospects. You should interview at least 5 people for every available position. A great candidate will have a strong match between their skill set and your position requirements. For example, if you are looking for a salesperson and your candidate does not have an engaging personality, they may not be the best candidate for that position.

The interview is one of the most important stages in hiring your first employee. As this is the first time that you’re having an interactive conversation with a potential worker there are a few tactics that may be helpful to you in the process. There are five things to keep in mind when conducting an interview:

Be a good listener
Know how to redirect a conversation to the areas you consider important
Take notes during the interview
Go with your gut instinct (if something doesn’t feel right, it’s not right)
The candidate is also interviewing you, so be ready to answer questions too.

Interviewing potential employees is a 7-step process:

The Selection Process

Phase 1: The Google Test: You should put every candidate’s name and city in a search engine to see what your candidates do online on their own time to determine if you even want to have them working for you. Judgment and discretion is important.

Phase 2. The Phone Screen: Before inviting a potential candidate to your office schedule a 30 minute phone interview. You want to see if the interviewee is worth face time. You also want to see if have chemistry with the prospect and to make sure that what you are reading on paper matches up with who you are speaking with on the phone. .

Phase 3. The Face-to-Face Interview: If the candidate passes the google test and phone screen, it’s time to meet in person. This is your chance to evaluate the prospect’s appearance, communication style and preparedness. You want them to arrive with questions for you too. It’s also your opportunity to discuss the qualifications for the job in-depth.

Phase 4. The Reference Check: This is a step many busy entrepreneurs miss, but you need to know what the person was like at their old job. Ask the relationship of the reference to the candidate. You need to make sure the best friend or brother isn’t the reference.

Phase 5. The Follow-Up: No matter how confident you are in a candidate, don’t make the job offer without conducting a follow-up. You should run a background check, credit check and if necessary a drug screening. You might not want to hire a delivery driver with a drug problem or a secretary with an un disclosed criminal record. Be safe and do not invite trouble in the door.

Phase 6. The Job Offer: Now that you’re ready to bring in your first employee you want to make a verbal offer by phone and then make the offer in writing. Be sure to outline the compensation plan and when they will become eligible for any benefits. I recommend not making employees eligible for benefits until after 90 days of employment. Once the candidate signs the offer letter, it’s official you have your first employee.

Phase 7. The Onboarding Process: Your must create an official orientation process for your new employee. No one can teach your business better than you. It’s your responsibility to get your first employee up to speed. Develop a new employee handbook and a daily check list of action items for your new worker. Be sure to delegate things you need to get off your plate too.

Do you have a process that you use to hire new employees?

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her the #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)

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9 Reasons Why Boomer Businesses Fail

By Melinda Emerson on June 13, 2011 in Ask Smallbizlady, Business Inspiration, Customer Service, Featured Post, Grow Your Business, How to Start, My Recommendations, Starting A Small Business

Baby Boomers Businesses

I know a woman (let’s call her Sarah) who was a vice president at a major Fortune 500 company. She was a sassy 48-year-old single MBA who was very successful climbing the corporate ladder. She worked in marketing, managing a brand at her company and making a handsome six-figure income. Then one day she decided that she wanted to start a business.

She did her research and decided to invest in a food franchise. She learned that franchises are 10 percent more likely to be successful than startups, so she decided to go for it. She hired an attorney to look over her franchise agreement. She spent weeks finding the perfect location and then hired an architect and contractor to develop her space. She gave notice at her job and invited everyone to her grand opening. She was so excited. She had prepared a thorough marketing plan and invested in local advertising through a coupon mailer.

Within two years, Sarah was back working in corporate America, grateful to have a job. I bumped into her and asked her what happened. She said, “I cannot be a slave to anything — especially something that does not fulfill me, and on top of that I hate teenagers and that’s who my employees were. I am grateful to be back at work with a regular paycheck.”

For baby boomers, making the transition from having a job to starting a business can be a tough road, no matter how successful you were in your previous life. Some of the issues that come up may have little to do with how well the business is doing financially.

Here are nine common trouble spots that cause baby boomer businesses to fail. These are the things that can destroy your entrepreneurial dream if they go unaddressed.

1. Not being coachable
To be successful in business, you must be a life-long learner and understand that you can learn something from anyone, even your interns and teenage employees. You also must be able to seek out– and take — advice from mentors and other entrepreneurs. Sometimes when you’ve been successful in the corporate world you might ask yourself “How hard could it be to run a small business?” Don’t be fooled; the hard work is endless!

2. Not developing a life plan
You need a life plan before you ever write a business plan. Take the time to think about what you want out of life, and then build a business around that. You need to know things like “How much money do I need to earn to be happy?” and “Is day-to-day variety important to me?” You do not want to start a business that is NOT a good business for you and your family.

3. Not having the energy
You must be honest about what you are willing to do to make your business a success. One of Sarah’s complaints was that she could not be a slave to anything. But that’s what it takes. In the first few years of running a business, your business owns you: 14- to 16-hour days are common, especially if you open a retail business that has long store hours. Can you physically sustain working seven days a week?

4. Not having a network
As a startup business, your network is your net worth. People do business with people they like, know and trust. You had no problem getting calls returned when you had a big corporate job, but once you are on the outside pounding the payment, it might be another story. Before starting a business, spend at least a year cultivating the market. If you are not good at making friends or are one of those people who never keeps in touch, entrepreneurship might not be for you.

5. Not willing to scale back your lifestyle
When you’ve been working a long time, and making good money, chances are you spend what you make. When you decide to become an entrepreneur, the first thing you should do is end your addiction to your paycheck. You must scale back your lifestyle to the essentials — and you need to cut back at least 12 months before you start your business. If you are someone who regularly enjoys retail therapy, eating out, extensive travel or indulging in the latest electronic gadgets, you might not adjust well to the entrepreneurial lifestyle.

6. Not saving enough money
In my book, Become Your Own Boss in 12 Months, I outline three pools of money that you should ideally have before starting a business. First, make sure you have the money to start your business. Then set aside enough resources so that you can survive for up to two years without a salary. On average it takes 18 to 36 months for a small business to break even, let alone replace your corporate salary. The third pot of money is your emergency savings. Your car may need to be replaced, your air conditioner may die, and your children may need college tuition. Your ability to start a business has everything to do with your ability to save money.

7. Having competing priorities
After age 40, you may have aging parents and perhaps a first grandchild that you’ve welcomed into the family. If you need to stay on top of your mother’s doctors’ visits or help out your daughter and son-in-law with the new baby, it may be really tough to get a new business off the ground because you will not have any spare time.

8. Lack of a niche target market
Too many small-business owners sell to anyone they think has money. Define your niche customer and make sure you know why your customer will buy from you. It is so much easier to develop a marketing strategy when you know who you are trying to reach. You have limited time and limited resources. Customers want to hire businesses that specialize in solving their problem.

9. Lack of personal and fiscal discipline
If you do not run your household on a budget, you likely will struggle to run your business on one. You must make business decisions based on up-to-date financial information. Will you make money decisions without consulting your budget? How will you focus on tasks that generate money? Will you raid the cash register whenever you need money? You should know in advance how much money you are making on each sale; otherwise, you might have an expensive hobby.

If you focus on these nine areas as you are planning your midlife transition, you are far more likely to start a sustainable and profitable small business.

Melinda F. Emerson, known as the SmallBizLady, is an entrepreneur, professional speaker, small business coach and the author ofBecome Your Own Boss in 12 Months. In 2010, Forbes magazine named her as one of the Top 20 Women for Entrepreneurs to Follow on Twitter.

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9 Reasons Why Boomer Businesses Fail

By Melinda Emerson on June 13, 2011 in Ask Smallbizlady, Business Inspiration, Customer Service, Featured Post, Grow Your Business, How to Start, My Recommendations, Starting A Small Business

Baby Boomers Businesses

Here are nine common trouble spots that cause baby boomer businesses to fail. These are the things that can destroy your entrepreneurial dream if they go unaddressed.

If you focus on these nine areas as you are planning your midlife transition, you are far more likely to start a sustainable and profitable small business.