Michigan Business Review – MLive.com:

It’s always hunting season for the next great idea.

The Edsel and the smartphone have vastly opposite records of success, but they both came from the same source: an idea.

In their book “The Idea Hunter,” Andy Boynton and Bill Fischer observe that the key ingredient for discovering great ideas comes less from genius or off-the-charts creativity and more from persistent searching and observing what is happening around them.

Entrepreneurs and other leaders in Southwest Michigan are no strangers to the search for great ideas. Some of these ideas, such as the Kalamazoo Promise, have gained national prominence. Read more.

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BBC News:

One of the big issues for ambitious small firms looking to grow is how to attract new customers.

You know you have a great product, or offer a good service, but how do you best make yourself known to would-be buyers?

Here Ganesh Selvarajah, an advisor at Business Link, the government-funded business support service, looks at how to best target your advertising or marketing spend.

Question
Matthew asks: “We are a small road-marking company based in East Anglia.

Our company has been running for approximately two years, purely from word of mouth and recommendations.

We are now looking to increase our revenue and would like some pointers as to the best advertising investments.

We already have a website and are listed on most directory sites, but realise it is an unusual area to market. Thanks in advance for any ideas or advice you can offer.”

Answer
“As the road-marking industry is a very niche market, all your advertising and marketing would need to be targeted at the correct audience to maximise your spend,” says Ganesh Selvarajah of Business Link.

Continue reading…

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BusinessWeek:

1. Keep Selling. Purchasing agents are reporting sharp drops in weekly sales calls across many industries, Rauseo says. That means less competition for your products or services. “It’s easier to get a commission-only sales force going today” with so many individuals looking for jobs, he says. “Give your salespeople the tools they need and have them redouble their efforts.”

2. Evaluate Marketing Effectiveness. Don’t cut your advertising and marketing budgets, but put tight controls in place that allow you to gauge the response and adjust your expenditures on a weekly basis, Rauseo recommends. If something’s not working, make changes sooner rather than later.

3. Anticipate Opportunities. In whatever form it takes, there will likely be a large influx of government money this year as part of President Obama’s economic stimulus plan. “With that much money flooding into the economy, of course there’s going to be an effect,” Rauseo says. “Prepare a strategy for tapping into it and you can take advantage of it.”

4. Create a Rapid Response Team. Set up a recession-busting committee that can anticipate the effects of the downturn and react quickly. “If there’s an item on your menu that no one’s buying, get rid of it. If you’ve got trucks returning from runs empty, schedule a third stop where they can pick up goods and eliminate empty miles,” Rauseo says.

5. Get Creative. Brainstorm innovative solutions to your business problems. “We had a client making hinges for the auto industry and they were going down the tubes. Now they’re making hinges for caskets and they’re recovering,” Rauseo says. “Stop panicking and get on with business.”

More tips here.

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Financial Post:

The recession has become the consuming priority for small business owners, who don’t have the clout to lobby government for billion-dollar bailouts. But help is out there. Just look at this press release that was received the other day at my friend’s uncle’s cousin’s barber shop. (If only they had included a phone number or return address):

There’s help for recession — weary small businesses! Niagara Falls entrepreneur Columbus D. Pression is launching a trade show to motivate and invigorate Canadian business owners.

“Recessions aren’t just about layoffs, panic and despair,” Mr. Pression says. “There are also opportunities in pharmaceuticals, used cars, collection agencies, counselling services for financial advisors and so much more. It’s all in your attitude. Recession World will persuade worried entrepreneurs that their empty glass is half full.”

Recession World will tour Canada for 10 weeks beginning on Feb. 29, taking place in under-booked arenas, an innovative trade show targeting small business. “This is the last growth market in Canada,” he says. “Look at what this slowdown is doing to General Motors and Magna. Now more than ever, it’s clear that any business can be a small business.” More.

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seattlepi.nwsource:

* Clear, unrelenting focus around purpose and goals.

* Flexibility and openness to new approaches, roles and ways of getting work done.

* A climate of learning, creativity and a proactive approach to finding opportunities to improve (even when stressed).

* Trust, cooperation and open communication.

* Senior leaders open to employees’ input and influence.

In contrast, rigid, bureaucratic organizations with choking politics, “red tape” and a control-oriented leadership mentality will often fail to adapt effectively when faced with hardships. In general, the greater the bureaucracy, the greater the difficulty responding to challenges, like trying to turn the Titanic around to miss the iceberg. Rigid bureaucracy is frequently the biggest impediment to agility. Words like, “It’s always been done this way,” or, “not in my job description” can stop needed responsiveness and innovation in its tracks.

Leadership is key to improving any organization’s resiliency. Though creating a resilient organization won’t happen overnight, here are some guidelines:

* Don’t lose sight of core competencies. Address these questions: What are the business/team “strengths” and strategic advantages? What is working in your favor that you can build on? How can the team leverage the fundamentals that make your team and business strong?

* Examine work processes and the “big picture” to encourage responsiveness in the face of changing conditions. How and where does communication flow (or not)? Are there bottlenecks? What does it take to get a decision? Is there duplication? Are we burdening people with too much information or checkoffs? Focus on simplifying and “clearing the path.”

There’s much more here.

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smSmallBiz:

Slash Expenses
Streamlining your business can help you stay in the black even when customers make fewer purchases. Be sure to call in overdue accounts receivables, sell off unsold inventory and analyze expenses such as office space, supplies and even your company’s phone bills.

“Cut your costs viciously,” says Cloutier. For instance, if you’re long-time delivery vendor isn’t fulfilling orders on time and it’s costing you money, cut them loose. The same is true for employees who aren’t pulling their weight. You might even need to do away with some benefits. While having to let go of a trusted staff member or business partner is never ideal, when the economy sinks, business owners need to make tough calls.

Eliminate Unprofitable Operations
Consider spinning off unprofitable business segments, suggests Victor Cheng, a small-business consultant in San Francisco. “Focusing on your core business”—especially if your other divisions are losing money—will serve you in a downturn, he says. To help you figure out what’s working and what’s not, schedule an appraisal of your business’s operations.

Seek Alternative Funding
Some business owners take on a second job. Others use consulting to pad their wallets. One thing is for certain: If you’re relying on a credit line to float your business until, say, after the holidays, now’s the time to create a backup plan. “Don’t assume that line of credit will be there,” says Cheng. “If you are in that kind of situation, you either have to have a back up financing source or back up revenue source.”

Embrace Incentives
As the nation’s unemployment rate ticks up, business owners should think about restructuring their company’s compensation, says Dave Waddell, president of Waddell & Associates, an investment firm in Memphis, Tenn. He suggests linking more employee pay to variable incentives such as commissions, which are payments linked to specific sales targets. For instance, if 20% of an employee’s compensation stems from commissions, make it 50%.

While commissions generally work well for sales staff, linking bonuses and other financial incentives to a company’s performance is another compensation technique, which generally goes for everyone. “If employees hit goals for the firm, the firm is going to do well even in tough times,” says Waddell.

Cut Production Costs
“The only way to make it through a recession is to be a low-cost producer,” says Bob Prosen, a small business management consultant in Dallas. Think about it this way: Inefficient competitors can survive for a time at their current cost structures, but in the end, they’ll have to either raise prices or go out of business. In contrast, a low-cost producer may try lowering prices to attract added sales, says Prosen. “You’re better off taking a little less profit to keep the business going.”

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SmallBusinessTrends:

1. The Nine and Zero Effect. People associate the number nine with value and zero with quality. Look at the difference between fast food and a gourmet restaurant. A burger meal can sell for about $4.99 while a gourmet entree at the best place in town may go for $30. So the psychology of pricing isn’t so much about gaining additional sales because the price appears to be lower, it’s about what the price communicates about your offering. So which do you want to communicate? Value or Quality? Now you can price accordingly.

2. Payments to Promote Satisfaction. Anyone who has ever paid for a gym membership and quit the second month has been part of this pricing strategy. If you offer a one-time payment, customers will perceive the item free after a while and not use it as often — thereby limiting satisfaction. Customers who pay more frequently for a product or service use it more often and perceive more satisfaction. So you’re better off charging monthly rather than a one time fee.

3. Prestige Pricing: Higher prices connote higher quality. Luxury brands are the perfect example of this strategy. A latte at Starbucks has a higher perceived value than a basic coffee with cream. Simply improving the look, packaging, delivery or promise of your product you can justify a higher price and support a prestige pricing strategy.

4. Anchor Pricing: When consumers are unfamiliar with a product, they will use the highest priced model within a category as an anchor. Private Label brands in the supermarket are a good example of this strategy. They are placed close to the branded product and the price is typically 15% lower.

5. Quantity Suggestive Pricing: Consumers are receptive to purchasing items in suggested quantities. This is the strategy that is responsible for my eating too many Arby’s sandwiches. The offer typically reads “5 for $5.” When you suggest how many you want your customers to buy and give them an attractive price, they will do what you tell them.

More pricing strategies here.

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CRM Buyer:

Have you been bumped from a flight? Belittled by a hotel clerk? Or stewed in a doctor’s waiting room? Then Rupert Barkoff wants to hear all about it.

By day, Barkoff is a lawyer at Kilpatrick Stockton in Atlanta and a national expert on business franchising. But his hobby — his golf, as he puts it — is dissecting customer service horror stories, starting with his own.

The 60-year-old “self-appointed expert on customer service” is on a mission to collect 1,000 customer service stories. Barkoff created a Web site http://www.anecdatabook.com/ to collect the tales, and he aims to write a book about the findings, a how-to tome that coaches people (and businesses) about how to right customer service wrongs.

Do the Right Thing
He has co-authored a book on franchising and was a technical adviser on Franchising for Dummies. Those subjects are limited, however. His current project is universal because everyone is a consumer who has endured shoddy or hostile service.

“Maybe we can teach people to do the right thing and be noisy about it,” said Barkoff, a frequent traveler and somewhat of a serial letter-writing complainer. “You’re doing a disservice to the business if you don’t complain.”

Constructive complaining is a lost art, he said. Customers often get nasty or, more often, shrug and walk away, figuring it’s not worth the effort to right a wrong. Or they think no one cares. Businesses can be tin-eared when hearing complaints. Or they can even aggravate customers more when they respond.

Case in point: Barkoff ordered his wife a dozen roses. They arrived dead. He complained to the florist, who quickly offered Barkoff a cash refund. Barkoff was put off. The man should have immediately sent out a replacement arrangement, he said, even if he had to get it from a competitor. Barkoff says he brings maybe US$400 a year in business elsewhere. Carry on reading.

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U.S. News & World Report:

Running a small business can be a life-consuming process, so sometimes small-business owners miss the forest for the trees. Maybe that’s why only about 16 percent of businesses with fewer than 50 employees in the United States have 401(k) plans. Small-business owners are so focused on developing their businesses that some do not realize that those assets can grow at a much faster rate for their retirement under the right plan. An October survey by ING DIRECT’s ShareBuilder401k, which designs 401(k) plans for small businesses, found that “not enough employees” was the top reason cited by small-business owners as to why they do not have a 401(k) plan. That’s despite the fact that even sole proprietorships with no other employees can have 401(k)’s.

Of course, that’s not to say that small-business owners can’t use other retirement plans like IRAs. But there are some unique benefits to 401(k)’s. In 2001, Congress changed the laws in a way that allowed self-employed people to put more money into their 401(k)’s. Today, a business owner under 50 with a 401(k) can invest up to $46,000 a year into the account, with up to $15,500 ($20,500 if over 50) coming from his or her own income, and then up to 25 percent of the business’s profits under the “profit sharing” provision. Regardless of the size of the profits, the total amount cannot exceed $46,000 (or $51,000 if you’re over 50), but that can make a huge difference. That $46,000 “can drop you a tax bracket,” says Stuart Robertson, general manager of Sharebuilder401k. “That is a great tax shelter for these folks.”

But if, like many small-business owners, you’re not very familiar with 401(k)’s, what do you need to know before you get your own plan started? Read on…

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East Valley Tribune:

“Going Green” is a hot topic and one of the most popular places in town to talk about how to do it is Green Drinks.
Green Drinks is a social gathering for “people interested in the planet,” according to event organizers at a.k.a. Green, a building and resource center in Scottsdale that focuses on environmentally friendly products and sustainability.

It actually began about three years ago, but attracted mostly people in the homebuilding industry who were interested in business networking.

“It grew a bit, but then interest seemed to wane,” said Mick Dalrymple, owner of a.k.a Green. “When it started taking off again, we were seeing people from all kinds of industries with all different backgrounds.”

The first Tuesday of every month the store coordinates this event to help “green” professionals network, share ideas and support each other in their businesses and organizations.

The event has been growing exponentially since it started, Dalrymple said, but seems to be gaining momentum as more businesses owners and individuals take an interest in eco-friendly practices. At the upcoming event they are expecting around 200 people, he said.

“We are actually running into the problem of finding locations to hold it that we don’t overwhelm,” he said. The event moves each month to make it convenient for people.

Beyond business networking, people are using Green Drinks for social networking, too. There have been some love connections, organizers said, and people make friends and meet people who live in their part of the Valley who share a common interest. Full article.

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BusinessKnowHow:

1. Obtain free or low cost business cards at a company such as www.VistaPrint.com.

2. Have a new or rebuilt shopping center opening in your town? Attend the grand opening and chat with the business owners and staff and hand out your free or low cost business cards.

3. Create flyers with your phone number on tear off tabs and place them at the library, grocery store, coffee shops, etc.

4. Hold a contest. People love freebies.

5. Write an article that would appeal to your target audience such as small business owners, add a four to five line biography with your e-mail address and web site address.

More ways here.

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Forbes.com:

1. Tax credits make it easy to get started: Businesses with fewer than 100 employees, but at least one besides the owner, qualify for a $500 tax credit to offset the administrative costs of the plan for each of the first three years, providing a cumulative savings of more than $1,500 to each business.

2. A tax shelter of $15,500, plus any matching: This amount is three times greater than what can be expected from a traditional IRA and also allows for a catch-up of an additional $5,000 for individuals 50 and older. Businesses that choose to match their employee’s contributions also gain additional tax-deferred savings on those amounts and can deduct matching from their company’s taxes.

3. Self-employed workers can shelter up to $46,000 annually: The Solo 401(k) is a great option for one-person businesses as it allows participants to: contribute $15,500 to their plan, and make additional employer contributions that defer up to $46,000 based on the amount they earn.

4. Profit-sharing that provides flexibility: A 401(k) can make it easier for employers to share their success with employees when they have good years and to a lesser degree or not at all during the lean ones. As an added benefit, profit-sharing is typically tax deductible up to 25% of the amount each business contributes.

5. New Roth 401(k) feature allows for after-tax contributions: That’s right. New regulations now enable small businesses to make after-tax contributions with no income level restrictions–unlike the popular Roth IRAs that have income limits that restrict eligibility. This means that employees with a Roth 401(k) will have the advantage of tax-free withdrawals, earnings and all, when they use these funds in retirement. Employers can choose to put all, part or none of their personal contributions into their Roth. The caveat here is that any company match you do must be made on a tax-deferred basis and not into your Roth.

Don’t let 2008 deadlines sneak up on you. To ensure maximum tax benefits in the year ahead, it pays to get started sooner than later. With that in mind, there are a couple important 401(k) deadlines to be aware of.

If you have employees and are willing to provide matching contributions, the “Safe Harbor” deadline is Sept. 15. A safe harbor match provides the best of both worlds: the ability to contribute the maximum allowed to your individual account and to avoid the time and hassles of government plan testing. Businesses not interested in matching or those that are self employed have until December to get set up.

While worrying about money is a year-round experience for most small-business owners, this time of year provides the perfect opportunity to alleviate some of the stress associated with taxes. Before businesses close their books on another tax season, they should take a look at some proactive ways to be better prepared for next April 15. A 401(k) is one way they can put their money to work for them. It’s a small investment in time that can pay big dividends now and when they retire.

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Franchising.com:

HR executives observe that the two most challenging groups of workers to retain are those at the beginning and those at the end of their careers. Each group requires a unique set of strategies to get them to stay put, according to MRINetwork, the world’s largest search and recruitment organization.

“Some HR managers refer to younger workers as ‘hummingbirds,” says Michael Jalbert, president of MRINetwork, “because they so often flit from job to job. At the other end of the spectrum are the ‘golden agers,” people whose years of experience and institutional knowledge are valuable assets to their companies.”

Jalbert says that companies have to do a better job of understanding the needs and motivations of each group in order to retain them. The hummingbirds, for example, respond best when their managers:

* Initiate face-to-face interaction. Gen Xer’s want one-on-one feedback about their performance. Although they’re very comfortable with technology, they highly value face time with their bosses.

* Provide short-term incentives. Flexible work schedules, performance-based bonuses and other programs that reward them immediately earn high marks with the younger generation. Long-term benefits, like 401(k) plans, aren’t as effective in either recruiting or retaining younger workers.

* Ask for their opinions. Surveys of younger workers indicate that they place a premium on management that ‘listens.’ They’re more likely to stay in positions where they feel their opinions are valued.

* Give them some autonomy. Effective managers help them establish their goals and time frames, and then allow them to reach those goals according to their own individual styles.

Those workers nearing retirement require a different set of incentives, says Jalbert… read on.

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You know who you are. But do your customers? Are you who you were last year? If not, have you communicated how you’ve changed?

Many emerging growth companies struggle with how to position their companies and communicate what they stand for. If you don’t do it right, the market doesn’t know whether to buy from you, whether you have the knowhow it seeks, or whether you’ll follow through and meet its needs.

Positioning is the process of distinguishing yourself from competitors in specific ways in order to be the preferred provider for certain market segments. It’s the act of designing your company’s offer and image so it occupies a distinct and valued place in the targeted customer’s mind. The main benefit of clear positioning is that it controls how the market perceives you and helps make your products and/or services more attractive. Here are my five steps to improving your company’s positioning:

1. Assess where you are right now. Start with this exercise: Ask a customer, a competitor, and a journalist for the three adjectives they would they use to describe your company, products, and overall image. Then ask yourself the following questions: What’s working with my current position? What isn’t? Do I want to change my position to increase sales? Secure a new or different customer profile? Revamp my product line?

2. Determine how you want to be perceived. This is an intentional act. When you determine the specific position you want to occupy in your target customer’s mind, you can craft your products, marketing messages, and image to convey and reinforce it. What are the meaningful differences between you and your competition? Take the time to do this right, as significant expenses will result when you redesign your Web site, marketing collateral, and product packaging, as well as if you overhaul your staff training process.

3. Select your target customers. All too often companies tell me their target customers are anyone who’s willing to buy what they sell. But this approach conveys desperation and a lack of focus. Craft a strategy that takes into account the following important questions: Will you benefit from making your image more exclusive and inaccessible or more of a commodity and more accessible? How does your target market define value? How do those people choose among vendors?

4. Factor in current trends. You’ve probably heard the expression, “If you want to be a market leader, find a parade and jump in front of it.” Countless companies are jumping in front of the environmental/sustainability movement with “green” products and services, and advertising their socially conscious business practices. What trends are on the way that might tie in with your company? Which should you distance yourself from, since they are on the way out?

5. Formulate your four levels. Repeat after me: Your business objective drives your business strategy which drives your market strategy which drives your positioning strategy. For instance, if your business objective is to have fewer customers who spend more per sale, your business strategy must reflect this in the products or services you will be offering. Your market strategy will consist of how to find those new customers and how to communicate with them. Your positioning strategy will determine the messages you communicate to your target customer to drive sales of your more costly product line.

If you aren’t happy with how people perceive your business, or you want to stretch to the next level of revenue or update your profile, you’re ready to reposition your company. Let’s examine the specifics of the positioning process. First, it will take you about two months to position your business if you are starting from scratch. The marketing team should be in charge of this process, and you can outsource a fair chunk of the research work. Here are the steps:

•Determine emerging trends on which you can capitalize. This will yield your vision viability assessment.

•Determine core competencies. This will yield your competitive threat assessment.

•Clarify the problem/pain you are solving. This will yield your target markets and analyses of them.

•Articulate the benefits/drivers/impacts of your products and services. This will clarify how your customers buy and who they listen to/are influenced by.

Positioning is best done with a blend of internal marketing staff, outsourced research, and an outside marketing consultant versed in positioning practices. It’s tricky to see clearly how we are perceived and what specifically we need to change. I’ll share more ideas in future growth strategy columns as I go through the reinvention and repositioning process in my own business.

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