Regulatory Requirements Growing

In their desire to increase tax revenue, improve oversight, and strengthen its regulatory grip on small businesses, governmental agencies are close to adding major regulatory requirements.

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Designed also to help identify companies being used to spy on American companies to gain trade secrets, efforts to date for informing small business leaders have been spotty at best.

Let’s start with the change already law and which estimated 20+ million American small businesses are already in violation.  Charged with implementing these new requirements is the Financial Crimes Enforcement Network (FinCEN).  Under the law that went into effect January 1, of this year, FinCEN is bringing into new databases registered information which more substantially disclose who are the beneficial individual owners of the millions of small businesses.  Failure to comply, can result in hefty fines.

Approved by Congress in by the 2021 Corporate Transparency Act, individuals can no longer hide under opaque private companies, foreign entities and other subterfuges when owning, investing, or managing small businesses with less than 20 employees.  Companies must provide additional background, verifiable personal data, and financial information on any person who benefits from the operation of a small business.

In the first months of 2024, only about 400,000 of the nation’s estimate 22 million small businesses had complied with the law’s requirement.  FinCEN intends to step up its educational efforts after the April 15^th Tax Deadline.

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While this registration program poses additional burdens, perhaps the more worrisome issue facing small business leaders is the expanding effort by the Department of Labor and the IRS to further limit the use of casual workers.  It is estimated that in 2022 more workers received 1099s forms than W2 forms.  The former wage reporting mechanism reports to the government of wages earned but requires no contributions to social security or other deductions usually taken from paychecks of full-time employees.

The definition of who is a full time worker and who can claim 1099 status has been under attack for 10 years and the latest series of proposed regulations go far forward of anything previously proposed.  These changes are currently up for review and it behooves any small business leader to become aware of them quickly.

Plus there are two other regulatory issues threatening small business employer-employee interaction. The first concerns franchise workers.  There the Department of Labor is still trying to dictate that an individual franchise owner is part of a large company made up of franchises.

The second, and more ominous, is extending its authority into such areas as home-based childcare and Uber-type businesses.

Staying abreast of these trends is another management requirement facing small businesses this year.  Stay tune, more may be coming.

The Time For Robotics In Small Businesses Is Now

Smart small business leaders are already arming themselves with the knowledge and tools to make robotics work in even the smallest enterprise.

Today, smaller companies in the manufacturing, assembly and distribution areas are reaping savings possible through robotic applications.

In other sectors including hospitality, restaurants, service centers, etc. businesses are employing units for many repetitive interaction with the public and their clients.  Given time, these and many other sectors will see broader categories of robotic units customized for individual company needs.

Supplier entrepreneurs are taking their experiences with the internet to quickly make robotic applications that are easily customizable, which hastens the adoption rate. That appears to be the goal of more and more start-ups today.

Rather than seek to totally replace workers in all of their tasks, many of these far-seeing entrepreneurs believe adding a few robots at a time can make the small business workplace better for customers and employees.  In this scenario, everyone wins when even the smallest company embraces robotic enhancements to the workplace.

Here are a few main areas where robotics at today’s standards can help a small business:

1. Menial repetitive tasks can be off-loaded to robotic machines; reduced worker involvement in these tasks can contribute to higher profits.
2. Workplace safety (tasks that are hazardous) is often greater with robotic elements, according to recent studies; safer employees are often happier and more productive.
3. High tolerance, precision fitting are often done by robots with fewer errors; improving quality and output.

Additional benefits:

1. Displaced workers can be re-assigned to tasks critical to company success, such as customer service; rewards for higher valued work contribution, may mean more money in worker pockets.
2. Embracing innovations that prioritize your people will strengthen your company culture. Improved worker appreciation means higher workplace morale.

The time to begin looking at robotic help in your company is now.  If not, your competitor may beat you to it and benefit.

 

Making Social Media Work For Your Small Business

Social media can be an effective promotional tool for any small business.

The secret is finding the right combination of internal resources and external talent.

Few companies are equipped to drive social media efforts alone.  Those that try often run up against a wall of mounting experience required and limited internal resources available.  That is not to say having an internal leader driving the social media efforts can’t work.

Take for example MuscleEgg, a Utah company offering consumers an enriched and flavored egg white product.  The company was not satisfied with its social media partner and hired Joe Gonzalez to come in-house and direct their efforts.

In three years, Gonzalez has totally revamped MuscleEgg’s social media effort delivering robust returns to their promotional efforts.

But for every MuscleEgg success story, there are numerous failures in this rapidly changing social media landscape.

Experts say small companies need to concentrate on their products and let the full-time devotees of the craft pound away at the social media landscape.

For those small businesses contemplating hiring or replacing their social media agency, here are some things to consider:

1. Who is your audience? In short, what group of people or businesses are most likely want or need your product or service.
2. What social media avenues does this audience most use? Identifying the one or two or three top social media tracks is important to choosing how to reach them.
3. What are the best ways of reaching this audience through these channels? Some agencies or groups are better than others and identifying them can lead to superior results.
4. How much money can you devote to this effort? Having the resources to wage a skillful return often requires a commitment higher than originally contemplated.
5. When is the timetable for results? Remember despite what others might say social media takes time to develop and deliver results.
6. What are the deliverables you want and the agency can provide? Without clear, mutually agreed upon measureable goals, no effort can truly succeed.
7. Are you comfortable with the people you will work with? Without mutual trust and comfort nothing will happen.
8. Is the social media campaign compatible with other parts of the marketing effort? Social media is one component of the marketing effort.  Insure it adds to the over marketing effort and not distract from it.
9. Is the company building on the information social media provides? Social media is an interactive channel providing much information management needs to absorb, digest, and act upon in real time.  Good agencies provide feedback to improve the product/service and the social media campaign.

Social media is one of the most effective promotional tools ever handed small businesses.  It is up to management to make the most of it.

Small Business Hiring in Today’s Changing World

The latest employment data once again demonstrates small businesses hiring is greater than that of large corporations.

At the same time, surveys of small business leaders indicate they expect to hire more and more workers as the year progresses.

While good news, it also highlights a growing problem for smaller firms: finding qualified employees.

As the nation’s unemployment rate ticks under 5% the number of unfilled jobs is increasing.

This is occurring despite the nation having an estimated 94 million people who have dropped out of the job seeking sector who are just now starting to return to the labor force.

Many of these individuals had skills and experience in older, less technical functions or in declining industries.

Concurrently, the rise of cloud-based services eliminates the need for many in-house functions such as accounting, payroll, invoicing, and social media.  This outsourcing means remaining employees must be more and more specialized.

With specialized talents needed and despite this apparent large pool of candidates, many small businesses still say they can’t find individuals capable of doing many tasks important to their company.

Experts say there are several reasons for this but the major factor is many individuals are unprepared for today’s marketplace.

One reason is many corporations no longer provide training programs for young talent.  According to some experts, the evolution of technology is replacing repetitive entry level positions such as data entry, order taking, and distribution assembly with robotic tools or artificial intelligence.

Even in-person sales training programs have been curtailed replaced with auto-generated phone call marketing and customer service programs with scripted messages.

This was particularly true during the past eight years, leaving a void in the 28-35 year old age group of talent capable of first- and second- level management roles.

But that explanation is too simple.  For many small businesses, identifying good candidates requires time and the use of a wide number of possible sources.  Many job boards such as indeed, simplyhired, ziprecruiter among others have sprung up offering a multitude of possible sources.  Often, they generate hundreds of candidates which must be sorted and evaluated, including background checks on all hires to ensure you are getting what you expect.

And herein lies the opportunity for small business leaders.

Finding the best “fit” for a potential employee can mean extra dividends for the employer.  But this requires some flexibility on the part of the employer.

For instance, the employer should look for the passions of possible employees rather than just their experience or education.

Many moms returning to the workforce are equipped with the experience of multi-tasking which can be valuable in a smaller organization.  Veterans are another pool of candidates to consider; their disciplined training makes them reliable.

Asking to test a future employee with a paid project is another way of learning if he or she could become a valuable employee.  This approach is gaining acceptance with so many people opting for a “gig” type of working arrangement, where they prefer moving from project to project rather than full time employment.  A paid project can be an effective tool to finding the right person and filling your business need.

The world is changing enabling small businesses to expand their sales territory to the world.  So too, they should expand their employment horizon.  The results may be a positive surprise.

Small Business Social Media Marketing In the Age of Trump

Donald Trump’s presidential victory can be a new road map for small business marketers in regards to social media.

In particular, more traditional marketing channels appear to be more important than some social media gurus would have marketers believe prior to the election campaign.

While social media as a cost-effective information channel is well-proven, doubts about its effectiveness as a deal closer are seeping into the marketers’ consciousness.

The presidential election seemed to demonstrate the validity of this hypothesis.  Hillary R. Clinton used social media and other mass communication channels to inform its visitors of Trump’s unsuitability.  Her efforts in this media could not convince voters to cast their ballots for her.

While many reasons are being given for her defeat, Clinton’s heavy reliance on social media and television advertising may have been a factor in her falling short.

Prior to the vote and because experts and her campaign leaders talked so much about the vaunted Clinton social media campaign, its failure eases the pressure on smaller companies to embrace social media as their major or primary marketing force.

Rather, Trump’s ground game of locally focused turn-out-the-vote policies seem to have won the day.  It is an important lesson for small businesses with limited budgets and defined marketing areas.

Never particularly happy with social media as the driving force of their small business marketing, company leaders can now have justification for once again considering other opportunities and channels.

That other heavy marketers have been questioning their heavy reliance on social media can be shown in some recent events involving social media providers.  For instance:

• Facebook has confirmed its trending algorithms are at times flawed and not reflective of real events.
• National advertisers are demanding more transparent data reporting from providers as doubts of true effectiveness surface.
• Many of the variables allowed in shaping campaigns are being tweaked or eliminated, i.e. race.

While there is no doubt social media has a place in today’s marketing mix, small businesses are now being encouraged to re-examine other channels.

For instance, increasingly some experts are comparing location-based messages designed to be sent to a mobile device when a potential customer is in a store against already in-place signage that promotes purchases.

Another important point to ponder is the message itself.  What is said also needs to be considered in the light of how it is communicated.

Equally as important, where items or messages are placed in a retail establishment, website page, or outdoor space are still important motivator to additional sales.

Clinton did not put money in residential, commercial or roadside signs.  Trump’s people often tried to tie local candidates to their front-runners name on physical signs.  Because Trump was on the ground, he had more local visibility than Clinton.  While not a deciding factor, it was still an important harbinger of victory for the upstart.  So too, a small business needs to stay local where possible.

Since most small businesses in today’s world are upstarts, it is important to get their message in the hands of their customers at nearby locations.  Social media can’t be the only media used.

Social media helps but other media, especially in-person and local advertising, seals the deal.

 

This Summer, Grow Your Business and Refresh Yourself

Summer is the time for growing your small- and medium-size business, not slumbering away hot days.

For many, summer is the time for slackening efforts in the face of hot days and vacation schedules.

For smart small- and medium-size business leaders these months can be used to add sales, expand operations and prepare for year-end efforts.

While competitors slumber in the summer doldrums; it may be an opportunity for your business to steal sales.

At the least, July and August workdays can be used to plan fall campaigns, review year-to-date results, recharge employees, and make changes necessary to close year-end business ahead of plan.

Here are five suggestions for making your business more productive this summer:

1. Review your business’ first six months results and identify what worked and didn’t work during this period. Include, expand the best performing efforts in the final year-end push.
2. Take advantage of the slower period to reach out to current and former customers with new ideas, promotions. There is less clutter during this period and the message may stand out better.
3. Develop a business program for hitting the bricks in September. Customers view this month as a fresh beginning, offer them something innovative.
4. Use this time to refresh the company’s inner-communications with informal gatherings and perhaps a picnic. Casual Fridays are nice but perhaps a Thursday pizza party or adding flex hours will appeal to your staff.
5. Above all, for small- and medium-size business leaders used to 24/7 work weeks it is important to recharge their own batteries. Leave the business alone for one day a week and let others take charge. The results will most probably surprise those leaders.

Happy Summer!

This Summer, Grow Your Business and Refresh Yourself

Summer is the time for growing your small- and medium-size business, not slumbering away hot days.

For many, summer is the time for slackening efforts in the face of hot days and vacation schedules.

For smart small- and medium-size business leaders these months can be used to add sales, expand operations and prepare for year-end efforts.

While competitors slumber in the summer doldrums; it may be an opportunity for your business to steal sales.

At the least, July and August workdays can be used to plan fall campaigns, review year-to-date results, recharge employees, and make changes necessary to close year-end business ahead of plan.

Here are five suggestions for making your business more productive this summer:

1. Review your business’ first six months results and identify what worked and didn’t work during this period. Include, expand the best performing efforts in the final year-end push.
2. Take advantage of the slower period to reach out to current and former customers with new ideas, promotions. There is less clutter during this period and the message may stand out better.
3. Develop a business program for hitting the bricks in September. Customers view this month as a fresh beginning, offer them something innovative.
4. Use this time to refresh the company’s inner-communications with informal gatherings and perhaps a picnic. Casual Fridays are nice but perhaps a Thursday pizza party or adding flex hours will appeal to your staff.
5. Above all, for small- and medium-size business leaders used to 24/7 work weeks it is important to recharge their own batteries. Leave the business alone for one day a week and let others take charge. The results will most probably surprise those leaders.

Happy Summer!

Market Globally, Target Locally

While the average sales footprint for a small business expanded more than 33% in the past four years, smaller enterprises are still earning 85% of their sales on average from purchasers domiciled less than 25 miles from their physical location.

Therefore smaller enterprise marketers need to think globally but also focus locally.

To accomplish this two-sided goal, marketers need to blend Internet marketing tools with more traditional media channels.

Using Internet marketing channels have their appeal because of lower costs and ability to concentrate the marketing effort into very narrow niches and/or over a wider footprint.

However, studies are popping up indicating email marketing is plateauing as a marketing tool because of the vast volume of unsolicited emails cluttering mailboxes.

This trend means smaller enterprises need to be more selective and creative when it comes to marketing on the internet.

Happily, technology advances as well as new service offerings are helping even the smallest company accomplish these goals.

For instance, there is a growing ability for list providers to target potential clients by geographic location down to the neighborhood levels through using “big data” techniques email lists with postal routes.

As potential customers come physically near locations advertising messages can be sent to cellphones when they are near or even in the store.

Recent studies have also shown smaller enterprises are demonstrating a growing sophistication in the utilization of home grown email lists as a key component of their marketing program.

Local merchants of all types are encouraging customers to give their email addresses in return for the possibility of receiving discount coupons or advance word of sales and other money saving tips.

The trend to use social media as a marketing tool is permeating the small business sector.

Our studies at Information Strategies, Inc. suggest billions of dollars are being invested in the next two years by small businesses in social media channels alone.

No one disputes the need to encourage customers to “like” or “follow” their company, create location-based outreach programs, and a myriad of other electronic approaches.

Devoting part of their budget to social media makes sense for smaller enterprises. However, there are some other trends to consider while building a profit-making marketing effort.

They include using local radio advertising, a return to newspaper advertising, community outreach efforts and even creating books and consumer guides.

Smart small business leaders are developing a blend of tactics enabling them to expand their sales footprint while keeping a strong presence locally.

These efforts take time and thought but can translate into added profit dollars.

Small Business Killers – Protect Your Company

There are many ways a business dies.
The specific causes of each business’s death may differ.
However, generally they fall into five main categories: lack of cash; lack of a plan; disloyal, devious employees; dissatisfied customer with big voices; poor promotional effort.
Let’s take them one at a time and delve deeper.
Cash flow: Four out of five smaller businesses fail for lack of cash. More specifically, owners/managers fail to properly control costs; parcel out funds; keep the company going when events impact cash receivables. It is important to manage cash so the company can continue to survive. As one expert said: “In a crunch, pay only the bills that will close you down.”
At all times, negotiate longer payment terms with suppliers while attempting to improve collection of accounts receivable. This requires a balancing act but is often the key to survival and eventual growth.
Have a plan: This is an often neglected source of business success and failure. Without a plan, no business can survive. A plan offers a roadmap for management and employees. It begins with a clear definition of what the business is; how it will conduct its affairs; what are its goals; how will they be accomplished; and most important, what is the exit strategy.
Many small businesses start with an idea. But ideas are born every minute. How these ideas translate into actions leading to success. Every small business needs a plan to measure their progress. It is also important to review each plan on a regular basis recognizing no plan survives contact with reality.
Disloyal, devious employees: While seldom mentioned, bad employees can bring a small business to its knees. We know of an instance where a long-time employee was siphoning off sales into her own competing firm.
Businesses are vulnerable to long-term, trusted employees and those that appear to be living beyond their salaries. It is important to keep a careful watch on these employees.
Dissatisfied customers: Social media has made companies at the mercy of disgruntled customers. Bad reviews, if not dealt with can destroy a company. Unfortunately, many small businesses are also not dealing well with social media both as a reputation killer and a marketing venue.
Promotional acumen: A recent study indicates small business failures due to lack of social media acumen is on the increase. 2014 promises to be the year social media marketing will become the marketing mainstay of even the smallest business.
Without becoming adept in the social media arena such as utilizing geo-marketing to promote the company, many small businesses may be in danger.
Facing a new year fraught with many uncertainties, it is important to review if your small business is vulnerable to one or more of these business killers.

Is it time to bring on board a digital expert?

Small businesses have always faced the problem of choosing the right vendor.
Making the wrong decision can severely impact a small business.
A mistake can lead to disaster because smaller enterprises operate so much closer to the edge.
The growing importance of digital media to all size companies is a critical factor into the purchase and sales equations.
While companies believe that digital media is needed to be competitive, currently they do not have the staff in-house to be competitive and do not fully trust their outside advisors/vendors often because of bad experiences.
Information Strategies, Inc.’s digital research for mid-size companies (50-500 full-time employees) based on 1,117 respondents and small-size companies (under 50 full-time employees) based on 1,341 respondents on these areas shows:
1. Percentage of mid-size companies that believe they need digital media to be competitive: 78% of all companies (92% consumer facing companies; 51% of B2B companies; 38% of industrial, manufacturing companies.
Percentage of small-size companies that believe they need digital media to be competitive: 53% of all companies (71% consumer facing companies; 47% of B2B companies; 16% of industrial, manufacturing companies.)
2. Percentage of mid-size companies that do not have the staff in-house to handle digital needs: 89% believe they do not have enough in-house resources; 89% believe they do not have strategic plan.
Percentage of small-size companies that do not have the staff in-house to handle digital needs: 87% believe they do not have enough in-house resources; 64% believe they do not have strategic plan.
3. Percentage of mid-size companies that do not trust the digital advisors/vendors they use: 61% have had bad experiences with outside providers; 31% do not trust their current outside advisors.
Percentage of small-size companies that do not trust the digital advisors/vendors they use: 69% have had bad experiences with outside providers; 58% do not trust their current outside advisors.
Is it time to bring a digital expert in-house to steer your firm’s critical digital needs?
But herein is another challenge—who is the right digital advisor?
Some of the key elements in choosing an in-house resource are:
1. Do they understand or can learn the key drivers of your medium- or small-size business?
2. Are they capable of melding the company’s needs within a framework, budget that delivers results?
3. Do they have a track record of delivering results for other firms in your industry and/or of your company’s size?
4. Do they possess the talent, background to build an effective digital program?
5. Do they have a wide digital network to stay on top of marketplace changes?
6. Are they good communicators and can they listen to current staff?
7. Are they inclusive and able to incorporate current marketing efforts?
8. Are they there for the long-haul to accomplish the company’s goals?
9. Can they train current staff so that there is a reservoir of expertise within the company?
10. Is there added value worth the added expense?
Business leaders need to look at the total picture before bringing in outside talent.
There is no doubt specialized talent is need in this digital area. Bringing it in-house offers both a short- and long-term solutions.