This last Friday, Steve Strauss, founder of The Self Employed website and author of The Small Business Bible, took part in a live Q&A for The UPS Store on Facebook. An abundant amount of valuable information was shared from social media and marketing on a small budget to revenue and innovation. In case you missed it, we’ve culled together some of the highlights for you to review! If you have any additional questions, share them in the comments section below.
Q. There are a lot of social media tools out there. How can a small business owner know which one(s) to use?
A. This is a great question, and it's one I hear from a lot of small business owners. The basic answer I think is this: follow your customers. What I mean by that is that you do not have to master EVERY social media platform out there (Pinterest, Facebook, Twitter, etc.). Instead, master the one your customers use most — and you find out by asking them. Social media is one of those huge changes that cannot be ignored. Back in the day, you could just run your business, but no more. Today you have to be one part entrepreneur and one part techno-geek. Mastering social media is the key tech thing these days.
Q. I want to own my own business, but I have no idea where to start. How can I pick a business that's a good fit for me?
A. There are two ways to start a business. One is where you love something so much that you want to do it every day. For instance, the musician opens a music shop or teaches piano. The other is where you have a great idea and just have to run with it. It won’t let you go. Think of Jeff Bezos and Amazon. His brainstorm was to sell online, not necessarily books. So the thing is, first of all, come up with an idea that fills a market need. That is the No. 1 thing. Then do your research. Speak with other owners. If the thought of starting out so fresh is scary, then becoming a franchisee is a great way to go because you get so much help.
Q. I struggle with finding good content to post. What resources do you recommend to help augment meaningful social media posts?
A. This is a great question. There are many places to go to find content to share, but the two I like a lot are AllTop and StumbleUpon. AllTop is a site made by Guy Kawasaki (you may have heard of him). It’s like a giant Internet newsstand. The other, StumbleUpon, is a site where you can find content from all over the web on every conceivable category.
Q. How should someone decide whether to start a business while working their current job or if they should quit their job to start a business?
A. Great question. Starting a business is a risk, plain and simple, but your job is to take as much of the risk out of it as possible. The way to do that is to keep your job as long as possible. Do the business part time for a while – on weekends. Test it. Make sure it works. Save your money. Get some funding. Have six months of living expenses in the bank. Once you have done all of that, then you can think of quitting. Great entrepreneurs are savvy risk takers, not wild, crazy risk takers.
Q. I am a SB owner that provides consultation services to clients. I have been in business for 3 years with a steady income and steady stream of clients. What are the common mistakes that people like myself make when their business is in a “juvenile” stage of development.
A. The biggest mistake I see is that people don’t diversify. It’s like the stock market. You would never own just one stock because it may go up, BUT it may go down. Instead, people are always told to have a “balanced portfoilio.” The same is true for your business. You need multiple profit centers. Think about Starbucks… First, they sold hot coffee, but coffee sales go down in the summer. So then they added Frappuccinos and music and food. When hot coffee sales are down, icy Frappuccino sales will be up. Small businesses need to do the same. Create two or three additional ways to make a buck. Balance your “portfolio.”
Q. What percent of revenue should I spend on marketing?
A. The answer is – as much as you can afford! The SBA says at least 5% of profits but I think it should be much more – not necessarily more money though, but more marketing. There are all sorts of ways to market your business that don’t cost a lot of money. I would suggest that you check out the new small business web portal that our friends here at the UPS Stores just launched. It's terrific. There is a lot of valuable marketing info there, among other things.
Q. Do you recommend separating the business income and expenses from your personal account?
A. Yes, yes, yes! It is a huge mistake to 1) not incorporate your small biz, no matter how small, and 2) to comingle personal and business assets. By creating a corporation, you create a separate legal entity. That then protects your personal assets from business debts and liabilities. (The recovering lawyer in me comes out!)
Q. Could you tell me a little bit about your perspective on innovation?
A. I once wrote a book on innovation called The Big Idea. I loved that book, even if it didn’t sell all that great (not everything we entrepreneurs do always is a homerun, eh?) But the thing is, innovation is great because it sets you apart, fires up the team, gets you excited, and has the chance to really make your business unique. I think the important thing is to innovate, but keep it simple, and really be sure you are solving a problem that no one else is solving. Kitty Litter was a first, Post Its were first, Teflon was a first. Innovation takes time, and is hard, but it can be a game changer.
Q. I'm 27 and just getting into the career I went to school for, but the grind of office politics has made me think a lot lately about going back home to start a business, like a bar/restaurant by the lake in my hometown. Is that really feasible for someone with who would need to borrow most of the capital and has no real management experience?
A. Yes it is possible. Think about it – as you drive down the street, every business you see was once someone's dream. They had to figure out how to get the money, draft a business plan, get customers, keep customers, the whole enchilada. If they did it so can you. And when it comes to funding there are a lot of options these days. Check out my book Get Your Businesss Funded. Look to things like crowdfunding, microfinance, friends and family, business plan competitions. But most importantly, HAVE A PLAN for how you will be able to repay the money.
Q. How do you recruit talent that is likeable? I own a small (less than $1m annual sales) retail business?
A. I think likability is a very underrated, and incredibly important thing when hiring. Your staff is on the front lines; they deal with customers, and each other. If people like them, they like you and they like your business. Will you want to work with this person every day for eight or nine hours? Yes… IF they are likeable. So the thing is to have interviews that are un-standard, that draw out people's personality.
Q. What's the easiest way to deal with cash fluctuations for small business owners (especially with long payment terms for some clients these days)?
A. I hate to use the B word, but the thing is you simply have to Budget. I know a guy who owned an ice cream store. He made a killing his first summer, but was out of business by February because he didn’t budget for slow seasons. For normal fluctuations instead of a budget, try calling it a plan. What is your plan for your money? Make a list of all expenses for two months, and then see how you like it. It’s your money, your plan. Change it and spend it differently. And of course plan for slower times of year.
Q. I'm graduating from law school soon but like the idea of owning a business. What are my options?
A. I did that – I started a law practice. First I worked for the big firm (hated it!) but it did teach me how to do my profession. I really think that doing your homework is critical. Speak with people who have started a business like the one you want to start. What do they think they did right and wrong? What would they do differently? Then write a business plan.
Q. What are the most underrated cities to start a business?
A. I know that Forbes had a list of best cities for small business back in June. But also, one of the great things about doing business today is that, really, you can do it from anywhere. e-Business is growing at a clip of 10% a year. That's pretty remarkable. If yours is to be a brick and mortar business, smaller towns are good. Some great cities to consider…
- Provo, Utah
- Portland, OR
- San Antonio and Austin, TX
- Charlotte, NC
Q. How will the election impact small business owners? Seems like there is a lot of money waiting to see what happens?
A. The great thing is that both candidates are talking a lot about the value of small business. We can only hope their love of us lasts beyond November. The fact is 99% of all businesses in the US are small businesses and more than 50% of all employees work for a small business. And also, every big business you see started out as a small business. HP was started in a garage by two friends. Jeff Bezos did the same thing. Small is the new big. Whoever wins, small business will get plenty of attention, I am sure.
Q. I want to start a small business, but I’m not sure where to start. Where can I go for help?
A. There is always a lot of talk about “passion” when starting a business. And yes, passion is great, but it doesn't pay the bills. Begin first by deciding if you are even an entrepreneur. Here is my handy dandy quick quiz to see…
Does the thought of leaving your job, benefits and paycheck scare you more or excite you more?
If you said it gets you excited, then you are likely an entrepreneur at heart. If it scares you, that is good to know too. So I say, go see a SCORE counselor. SCORE gives free, confidential business counseling online and in their many offices. Start there.
Have any additional questions? Take a minute and share them below!