Fewer customers is not necessarily a bad thing
For small business owners, the drive to build a bigger customer base can be very strong. It is important, however, to remind yourself that getting more customers is not necessarily always the best move for your business.
Every customer comes with an opportunity cost
Developing a customer base comes with a variety of costs, including the cost of marketing, invoicing and billing, the cost of running your website, all those little non-paying things that you have to do to keep your business running. Each and every customer you have takes a certain amount of time, money and effort to maintain. You should [...]
Why you should always pad your freelance estimates
Pricing is, and will always be one of the most difficult challenges for freelancers and independent contractors. One thing many freelancers forget to do, however, is pad their quoted hours.
The process of quoting
A freelancer or independent contractor will, at some point, need to provide time estimates. This could happen during a simple conversation between friends at a coffee shop, or it could be a formal quoting process that the potential customer has set out. No matter what the process, the potential customer will describe the project and ask you what you would charge for that project. The level of detail [...]
Save money by giving yourself a break
It can be very tempting to try to maximize every moment in your day, bringing in more money to pay off debt, build an emergency fund or save for a goal. Keep in mind, however, that slowing down and giving yourself some time off can actually save you money.
The dollar costs of always working
Financially, always working can be a stress. When you spend time always working, you could end up spending quite a bit of money. You will spend money on food that you may need to purchase, instead of make for yourself. You will spend more time and money [...]
High number of violations revealed in FTC probe of funeral homes
The Federal Trade Commission recently conducted a probe into the funeral business, to see if funeral homes were complying with federal rules related to their trade. The FTC found evidence of major violations in a significant number of funeral homes.
The business of death
Funerals and burials were an $11 billion industry as of 2008, according to Businessweek. Like any industry, a number of operators fleece customers because they can get away with it.
To guard against funeral homes exploiting the bereaved, the Federal Trade Commission has a set of regulations, dubbed the Funeral Rule, which mandates people receive itemized lists of costs [...]
Why small business tax cuts do not create many jobs
It’s a political refrain that gets repeated time and time again: small businesses create jobs. A bill making its way through Congress would help cut taxes to those small businesses, but the number of jobs created by the bill is under heavy dispute.
The small business tax cut
A bill scheduled for vote on the House floor today would help cut taxes on small businesses. The one-year measure is estimated by the Congressional Budget Office to cost $46 billion out of the federal budget. The bill would allow small business owners to deduct 20 percent of their business income directly off of [...]
Debt collectors still being caught posing as police officers
The Federal Trade Commission recently shut down a debt collection operation in which collectors from call centers in India would pose as police officers on the phone. The debt collection industry is continually being given a bad name by bad apples that refuse to abide by the law.
Second case in as many months
A rogue debt collection operation has just been shut down by a court-ordered injunction from a Federal Trade Commission lawsuit, according to Time magazine. The debt collection companies had farmed out collection calls to call centers in India, and collectors were engaging in illegal practices.
It is the second [...]
How a Groupon can make or break your business
Groupon and daily deal sites are projected to be worth more than $4.2 billion by the year 2015. With dozens of daily deal sites out there, a business has many options; all of which can be a great thing or a horrible nightmare for a business owner.
Basics of a daily deal
Running a daily deal usually means structuring a deal that is at least 50 percent off of your usual charge for a product or service. The amount a customer pays for that coupon is split between the company running the daily deal and the merchant. Once credit card processing fees [...]
How freebies can increase profits
For business owners, finding a way to increase sales is always a challenge. Though it may seem a bit counter-intuitive, giving things away is a solid business strategy for a variety of reasons.
The psychology of a giveaway
Human beings are social animals, and the psychology behind that includes a reaction called reciprocity. When someone does something for us, especially when we do not expect it, we are much more likely to do something for them in return. One study found that the little gifts included in nonprofit solicitations increase donations by 75 percent. Another study, carried out in the 1970s, found [...]
Making use of the anchoring effect
When we are deciding on the value of any item, we tend to use all the supporting information we can find. The psychology of this, however, can be manipulated to create what is generally known as the anchoring effect.
The basics of anchoring
Simply put, the anchoring effect is when a number is put into our minds as the benchmark of value. This could be a restaurant pricing one thing on their menu at $40, when everything else is $50. That $40 item may be macaroni and cheese, but we are willing to pay it because it is a “good value” at [...]
The basic recurring costs of business
Running a business means having a good handle on the costs that you will be incurring to keep your business running. Even if you are in a low startup cost business, such as an online or service-based business, there are certain expenses you will need to pay on a regular basis.
Licenses
Business licenses are not only a startup cost, they are a recurring cost of doing business. Depending on which state, county and city you are doing business in, business licenses could be a recurring cost. When you apply for your business license and certifications, double-check their renewal dates and costs. [...]
The basics of business bartering
For the most part, most businesses run on cash or cash-equivalents. There has lately been a rise, however, in the popularity of business bartering, which can be very effective if done properly.
Know the value of your products
No matter what product or service you are selling or bartering with, you should know the true value of your products. This means having a pricing structure that you are entirely comfortable with, and pricing your time in such a way that you make a profit instead of just breaking even on the time that you spend making your product or servicing your clients. [...]
Basics of licensing your business
There are hundreds of possible reasons for starting a business, from tax protection to keeping your hobby business legal. No matter what the reason, the basics of starting a business are generally the same, and doing so can help you protect your money.
Why you should get licensed
Federally, the government doesn’t care if your business is licensed or not; if you make more than $400 without paying taxes, then you will need to pay up come tax time. Being licensed on a state and local level, however, legitimizes your business in the eyes of the IRS and prevents you from paying [...]
Intrapreneurship gaining speed in rough economy
Being an entrepreneur is a tough road to follow, with long hours and endless to-do lists. Some people with their own business ideas are choosing to go a different route – intrapreneurship.
Intrapreneurship defined
Intrapreneurship is proposing and starting new businesses from within the confines of an already-existing business. Intrapreneurship is a name that has been applied to everything from encouraging new ideas in a business to full-on supporting a new business startup within an existing corporation. An intrapreneur could be the person who comes up with new business ideas and hands them off to their employers, but more often they are [...]
More business owners choosing to finance their own businesses
A new survey by European firm Bibby Financial Services has found that more small businesses are relying on personal savings for business financing. For the most part, these business owners are not even applying for loans.
Early stage entrepreneurship
Most entrepreneurs, in the beginning stages of their business, put up money of their own in order to start the business. In 2011, early-stage entrepreneurship jumped in 75 percent of developed countries. Most of this entrepreneurship came in non-high tech ventures, such as service industry, restaurants, dry cleaners, grocery stores and information-economy jobs such as writing and photography. Many people are coming in [...]
Four things no small business owner should pay extra for
Most small businesses face a few very big, potentially expensive challenges. With just a smartphone, however, there are several things that no small business owner should go without.
Business phone numbers
A separate number for your business can help you keep your business and personal lives separate and make you appear more professional the public. There are several tools that allow for more than one number to be run through a single phone. Services such as Google Voice allow you to piggyback a business phone number on a personal cell phone, eliminating the need to carry and track two phones.
Credit Card Processing
It [...]
Benefit corporations now allowed in seven states
Legally, any corporation has a duty to its shareholders to try to maximize profit, which means managers can be prosecuted for making any decision that is not financially based. In seven states, however, companies can now register as “benefit corporations,” which are allowed to focus on something other than profit.
What it means to be stockholder-owned
For many companies, being publicly traded means there is a legal duty to try to maximize profit. This could mean anything from reducing costs by using cheaper suppliers to selling a product for a higher price. Some companies that try to make decisions on a mission-based [...]
Top 10 small business tax deductions
Owning and operating a small business comes with a wide variety of responsibilities and benefits; around tax time, those benefits can add up. For small business owners, there are 10 everyday business expenses that are at least partially tax-deductible.
1 – Startup expenses
The money you spend on starting up or expanding your business is tax-deductible. This cost is deductible only during the first year of your business, otherwise it is not deductible until you sell or liquidate the business.
2 – Professional dues and publications
Many professional organizations charge a fee or membership for belonging to the organization or receiving their publication. These [...]
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