Word of Mouth Marketing? Trust But Verify…

Many small businesses don’t advertise at all – they rely on word of mouth advertising. But more and more people are turning to the Internet to verify recommendations from even friends and family.

As I mentioned in an earlier post (Where Do Moms Go For Advice Online?) many women get product recommendations from mom bloggers online.

According to  new research from Cone consumers are even turning to the web to investigate product recommendations from family and friends.

Before deciding whether to purchase recommended products or services, more than four-out-of-five consumers (81%) will go online to verify those recommendations, specifically through
researching product/service information (61%), reading user reviews (55%) or searching ratings websites (43%).

Of those who go online to check out a product’s reputation, 77% say that they are more likely to purchase products or services when they can find additional recommendations about them.

And these aren’t just high-cost products, either. While 82% go online to check out cars, 72% will check out recommendations for a movie or a restaurant on the web and the numbers are even higher for the 25-34 age group.

What they find there, either good or bad, highly influences their decision on whether to purchase.

What this means for small business is that, just like the big guys, you need to get your product or service to social networks, bloggers, review sites, etc. prior to a major advertising campaign so potential buyers have someone else’s word for it rather than your own..
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Can You Be A Successful Entrepreneur?

In Micheal Gerber’s book The E-Myth Revisited he breaks down small business owners as technicians, managers and entrepreneurs.

In our business I tend to be the manager/technician and my brother is the entrepreneur. He can’t look at much of anything without a business model popping up in his head.

So, are you cut out to be an entrepreneur?

Daniel Isenberg had a couple of posts in the Harvard Business Review on that very subject. The first – Should You Be An Entrepreneur? Take This Test has about 20 yes/no statements to determine your affinity to run a business. Statements like: Read more

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Survey Shows Where To Advertise Local Business

If you are a local business owner and are running a special on one of your products, should you advertise in the local paper or on the web?

According to the latest AdWeek Media/Harris Poll it depends on your target market. The specific question the survey asked was “When you are looking for a bargain, which of the following types of advertising, if any, do you believe is most likely to help you find one?”

Of the over 2,000 adults surveyed 23% say the best bargains are in newspapers and magazines, 18% say the Internet is best and 34% say it makes no difference.

But, when you break it down by age groups…

When looking for the best bargains, different age groups have different ideas of where to look. Those 18-34 are more likely to say online ads (22%) and television commercials (17%) are the best places to go while those 35-44 years old go online (26%). The older one is, the more likely they are to use newspaper and magazine advertisements, as 24% of those 44-54 and one-third of those 55 and older (33%) say those are media most likely to help them find the best bargain.

In other words, if your product is slanted at a younger age group, you’ll get a better response with online ads. If you are targeting an older group your newspaper ad may get a better response.

Females had a slightly higher bias toward newspapers/magazines/catalogs, men had a higher preference for online ads.

29% of college graduates chose online ads for bargains while only 12% of high-school grads did.

So it pays to know your target market. While the difference isn’t all that much, you should gear your print ads toward products for older women and online ads for younger, college-educated males..
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The Need To Outsource

Most small business owners start out doing everything themselves. If you continue doing everything, your business can’t grow. That leaves two options: outsource or hire local employees.

The do-gooder government has made hiring local employees a real hassle. pay requirements, Equal Opportunity, payroll taxes, and the possibility of getting sued if you try and fire someone, just to name a few.

Your other option is outsourcing. It’s just like hiring the services of an independent contractor and in the new digital age that contractor can be local, national or international. Contractors can by hired for a specific project or for continuing operations.

Here are the advantages of outsourcing: Read more.
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Starting An Online Business – Incorporation

We’re approaching the start of a new year and many of you are looking into starting an online business. One of the steps is deciding whether or not to incorporate your business.

As a small or home office business, you have four main choices for your business as a legal entity in the United States (for those of you in other countries you will have to check on your own business tax laws):

* Sole Proprietor
* General Partnership
* Limited Liability Company (LLC)
* Subchapter S Corporation

Of the other possible options, a “C” corporation is generally for large businesses and Limited Partnerships can be complicated, so I won’t get into them here.

Also, don’t forget your local business licenses. You may have to register your business in the city, county and/or state where you live. You should also set up a separate bank account for your business.

In general, your main considerations are going to be liability, taxes and how you intend to finance your business. Read more.
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Is Google Chrome OS Right For Small Business?

Google Chrome OS is not right for everyone, nor is it right for every computer. What Chrome OS does is put the “net” in netbooks.

These are small, lightweight computers (I wouldn’t even call them laptops) for use on the road or for quick access to the Internet. The operating system is really an advanced web browser.

The advantages are faster boot and load times and less computer power (read battery power) to operate.

The disadvantage is everything is done on the web. No programs or files are stored on the computer.

Now, a cynical person might think that Google is leading everyone into cloud computing, especially Google Apps. But the trend is probably headed in that direction anyway.

Google Chrome OS is set to release an early ‘bare-bones’ version of the OS. I don’t recommend getting in too early. They will be continually updating the OS until it has reasonable functionality over the next year.

But, for planning purposes, small businesses need to see whether they can integrated it into their IT structure.

If your business uses Microsoft Office or other computer based software to do most or your work (Outlook sharing, Word documents, etc.) then you may want to stay with something like Windows 7 Starter edition to integrate with the other office applications.

If your business is moving into the cloud for most of its applications then Google Chrome OS may be worth a look for your road warriors.

Further Reading:

Google’s Chrome OS: Will you give up desktop apps?

Chrome OS will give Microsoft a run for their money

Is imminent Chrome OS launch reckless?

Small Business and the Cloud

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5 Items For A Memo From Myself to Myself

With the end of the year coming up it’s time to review what has happened last year and what will happen next year.

Harvard Business School asks CEO’s to write a memo to their Board each year summarizing lessons learned and plans for the new year. For a home office or small business owner you may not have a Board of Directors, but the principle remains the same.

So, what I recommend is writing a memo to yourself.

I’ve taken the liberty of modifying the list from Harvard, so here are the five things I recommend you actually write down in a memo…

1. Lessons learned in the past year
It’s okay if strategies or tactics didn’t work out as long as you realize why they didn’t work and correct it in the future. By the same token, write down what did work.

2. Top priorities for the next year
You should have 3 – 5 goals for the next year. Don’t add a new goal during the year unless it is replacing one has been completed.

3. Set parameters for those goals
Actually create a timeline for your objectives with earliest and latest completion dates and the top and bottom limits you want to spend to achieve them.

4. Lay out strategies
Sure, your goal is to make more money, but how? Create a new product, expand your mail list, improve customer service?

5. Review your memo regularly
Don’t just write it and forget it. Drag it out every month and see where you are. Are you on schedule? If one is near completion, what’s next?

There’s all sorts of gurus and coaches out there that will tell you to write your goals down. Why? Because it works! It only takes a few minutes and is well worth your time..
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From Small Business To Big Business – One Man’s Story

A lot of clients ask us “how do I get started with an online business?” Thomas Heath, a columnist for the Washington post, just wrote a column about one man’s rise from small sales on eBay to a 5 million dollar a year company.

Find your niche. The man in question is a U.S. Marine named Jeffrey Morin. He started in the niche of “challenge coins”, memorabilia coins that commemorate service in a military unit or exercise. He saw them on eBay selling for around $10 – $15 and knew he could buy them for around $5. A small business was born.

Grow your sales. After about six months he got an email asking if he could he find a coin dedicated to mothers with sons in the Marine Corps. No, but he could sure make one! Read more.
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