Is Social Media Killing Your Business?

from Duct Tape Marketing by John Jantsch

I know today’s short post might come as a surprise to regular readers of this blog, but even though I promote the heck out of social media use for small business, I see a dangerous side as well.

Some small business folks equate busy with business. The problem with social media usage is it can keep you really, really busy, without producing a dime of business.

Don’t get me wrong, this is not a post for all those social media is a load of crap folks, this is a post for all those folks that are hiding behind the monitor tweeting away when they really should be out shaking hands, making sales presentations, and attending networking events.

It’s all too easy to get sucked into building a big blog readership or twitter following and then wonder why your phone isn’t ringing.

Social media for the small business is a catalyst, a tool, a way to create awareness and deeper engagement – it’s not a way to take orders.

At some point you’ve got to take orders. If you can’t convince someone face to face of the value of your proposition, don’t expect to do it in 140 characters or less.

Stop using social media as an excuse to be busy and get out there and sell something.

There, I feel much better now.

Get Customers First and Then Write a Business Plan

from Wil Schroter's BIGGER Blog - Go BIG Network

If you’re thinking about starting a company, please don’t write a business plan. Stop, put the keyboard down, and step back. You’re wasting valuable time.

Don’t get me wrong, I’m not suggesting that you run aimlessly into the startup abyss. What I want you to avoid is the black hole of planning that most entrepreneurs get into when starting a company. They get sucked into a time warp where a formerly great idea gives way to months upon months of “thinking” about the idea instead of just making the damn thing happen.

If Nobody Buys, it’s Not a Business

The first step, before writing a plan, is to validate the concept. If nobody will ever buy your product, it’s unlikely that a business is ever going to form. Focusing on the product first, and more specifically the customer’s willingness to buy that product, is by far the most valuable time you can spend early in your business.

In addition to validating your concept, selling the product early allows you to prove some key assumptions in your plan before you begin writing it. For example, wouldn’t it be helpful to know what someone would pay for your product before you built it? You would be surprised how much information you can gather from potential customers just by asking them what they would pay for a hypothetical product. “If you build it, they will come” might have worked for Kevin Costner in the movie Field of Dreams, but it’s a formula for disaster in a startup.

The Prototype Company

Sometimes finding out early that your idea isn’t as viable as you thought is a blessing. Instead of spending months writing an elaborate business plan on a completely unproven idea, try putting together a “pre-business plan” that consists of only about five pages that quickly communicates your idea and focuses on the key assumptions that drive your business. These key assumptions are often questions like “Will people buy the product as I’ve defined it?”, or “what will they pay?”, or “how much would it cost me to sell this product?”.

Imagine that the first few months of your business are really more like a great big “prototype company”. Focusing strictly on the sale of the product and proving your assumptions, even on a small scale, will allow you to write a far more comprehensive and viable business plan when you are ready to formalize your thoughts. Additionally, you will be able to make much more accurate forecasts on the business when you get a sense for what it really takes to market, sell and deliver the product.

Your Business Plan is Not an Application for Capital

It’s a common misconception that investors want to see a business plan before they will consider investing in a concept. That’s not entirely true. What investors want to see is that you can demonstrate your ability to sell the product to paying customers. Ask anyone (even yourself) who you would rather invest in – a startup company that is making money without a plan or a business plan that isn’t making any money? Writing long, elaborate papers might have impressed your instructors back in college but it won’t win you any points with investors. They want results, not ideas.

Keep the Plan Simple (and listen!)

Despite what you may have heard, most of the best business plans are as simple as possible. It’s far more important for you to demonstrate that you can solve one market need incredibly well than being able to show you’ve thought of every possible market niche and have included it in your plan. Think quality over quantity.

The process of writing your business plan isn’t to show off how much you know about a concept. The most important aspect of writing your plan is to become a voracious listener. Listen to what your potential customers are telling you they want in a product. Listen to what they are not getting from the existing products. Listen to what investors are looking for in the companies they put money into. Your business plan should read more like a record of all the valuable information you have heard, presented in a meaningful way that makes the case for your company’s potential success.

Put Down Your Pen and Pick Up the Phone

You’re much better served to do your business planning by picking up the phone and asking customers to buy than you are

If Craigslist cost $1

from Seth's Blog by Seth Godin

Some things are better when they're not free.

If Craigslist charged a dollar for every listing, what would happen?

Well, the number of bogus listings and repetitive listings would plummet, making the site far easier to use.

The number of scam artists using the site would go down, because it's more difficult to be anonymous when money changes hands.

The revenue of the site would soar, which means that the people running the site could get (far) richer, or fund digital journalism or change the economy of an emerging nation.

Money creates a sort of friction. In the digital economy, magical things can happen when there is no friction. You can scale to infinity. On the other hand, sometimes you want friction.

If you lead a group that allows anyone to join, for free, your group might be large, but it's not tight, it's not organized to make important change. Commitment slows things down in the short run, but ultimately aligns interests.

Startuppable Markets

from Trakin' the india business buzz by Arun Prabhudesai

[Guest post by Abhijeet Vijayakar]

What environmental factors are necessary for startups to flourish?

This question has been examined by several authors, and most have come to the conclusion that a place that looks a lot like Silicon Valley is the natural answer. In other words, take a couple of technologically sophisticated cities such as San Francisco and San Jose, a high-quality university such as Stanford, mix with a generous dollop of military funding, and startups will emerge spontaneously.

(I define a startup as a small company that has the potential to grow explosively rather than incrementally. Every small company is not a startup.)

While this answer is true, I think it focuses on only one aspect of a developing startups, the supply side. In other words, the question is generally posed as trying to find the most nurturing environment to generate startups, while assuming that the environment to consume the product of those startups (the demand side) already exists.

Is this always true? It would seem that the organizations best equipped to meet the needs of the market are large companies that can invest significant resources in market research and product development. And indeed, in most parts of the world this is the case.

Specifically in India, large companies like the Tata and Reliance groups are still the dominant Indian players for most products, from “old school” products like salt to Internet properties like blogging sites. There are few Indian companies that have emerged from the ground up to become big on the strength of their products in the domestic market.

So, what about the demand side? What are the characteristics of startup-friendly markets – markets in which startups can successfully compete with much larger players?

I can think of at least three characteristics:

1. The markets must be large, or growing rapidly on a moderately large base. Targeting a $5 million market growing at 100% will mean that your startup will have to wait for over 4 years to be in a viable $100 million market. By then, your company is likely to be dead.
2. The markets must be new, or at least changing rapidly. If this were not so, large incumbents would already have completely satisfied the market, leaving no space for new companies to come in. In developed countries, there are not many startups in the grocery store industry for this reason.
3. It must be possible to create the products that the market needs with small amounts of capital and high leverage. A low level of capital is typically necessary since startups have only a limited amount of money to prove themselves – usually much less than large companies – before dying. High leverage is the same as low marginal cost — once the product is created, there must be hardly any incremental cost in creating thousands or millions of the same item. Software products are the classic example of low-capital, high-leverage products, and so most startups (not all, but the majority) produce software.

There won’t be many startups in the nuclear power plant industry because of the low capital requirement. Similarly, a single hairstylist won’t be able to create a startup because of the high leverage requirement, no matter how distinctive his style, unless he is able to cheaply pass on the essentials of his style to other apprentices.

One of the reasons in which restaurants like McDonald’s were different from those who came before them is because they were able to distil the essence of their product into an easily replicable (and hence leverageable) process.

How do Indian markets fare on these parameters? Are they startup-friendly?

The good news is that the Indian market for many products is large, and getting larger rapidly as the country becomes richer. As many people have remarked, the threshold of $1000 per capita GDP, which is roughly where India is right now, marks the “take-off point” for consumer spending.

Around this level, a large section of the population has their basic needs taken care of and has disposable income for other products. These markets also change rapidly as new consumers with new preferences enter the “consuming class”. So the first two factors certainly hold for India.

I think it’s the third factor that makes the Indian market challenging for startups. The products that Indians consume, by and large, are not startup-friendly. The market for soaps, TVs and motorcycles is growing rapidly, but these are not products that startups can cheaply make.

Similarly, the markets for plumbing or electrician services are also likely to be growing rapidly (hard data for this is difficult to find), but these are not high-leverage products.

So until Indian consumers evolve to a point where they consume low-capital-cost, high-leverage products (broadly, software) in large quantities, startups will have a hard time succeeding in the Indian market.

Till this happens, it probably does make sense for venture capital firms to behave like private equity investors, and be a source of equity capital for medium sized, non-technology companies.

Although the leverage in these “brick and mortar” sectors is much lower than in technology – indicating that Indian VCs will almost never match the percentage returns of their non-Indian counterparts – the sheer size of those markets makes them attractive to be in.

When will India become a large market for startup-friendly products?

I believe in the very near future. India’s GDP today is roughly where China’s was in 2000, and China in this decade has witnessed a huge increase in both the number of Internet users, and the technology services they consume. Shanda, Baidu, and Tencent are only some of this decade’s success stories in that country.

As the Indian market rapidly turns “startupabble”, their Indian versions are not far away.

[Abhijeet Vijayakar is the founder of Nunook Interactive Pvt Ltd, a game startup in Mumbai and Chennai. Nunook is currently developing BrainNook (http://www.brainnook.com), India's first online, educational virtual world for kids, parents and teachers. In a previous life, Abhijeet developed 3D graphics engines (and games) at Electronic Arts in the San Francisco Bay Area. He is surprised that sushi is not more popular in India.]

How to Figure Out If You're Dealing With a Nutcase from How to Change the World

How to Figure Out If You're Dealing With a Nutcase

from How to Change the World by GuyKawasaki

Have you ever wondered about who you’re interviewing for a position, buying something from on Craigslist, dating (or, even worse, who your kids are dating)? You can do a Google search, but there are many people with same name. I discuss a service that enables you to enter a person’s email address and find his or her presence on more than fifty sites at a time. Click here to read it—before it’s too late

Getting serious about your meeting problem

by Seth Godin

Do you have one? Some folks are going to eight hours of meeting a day. At Ford, they used to have meetings to prepare for meetings, just to be sure everyone had their story straight.

If you're serious about solving your meeting problem, getting things done and saving time, try this for one week. If it doesn't work, I'll be happy to give you a full refund.

1. Understand that all problems are not the same. So why are your meetings? Does every issue deserve an hour? Why is there a default length?
2. Schedule meetings in increments of five minutes. Require that the meeting organizer have a truly great reason to need more than four increments of realtime face time.
3. Require preparation. Give people things to read or do before the meeting, and if they don't, kick them out.
4. Remove all the chairs from the conference room. I'm serious.
5. If someone is more than two minutes later than the last person to the meeting, they have to pay a fine of $10 to the coffee fund.
6. Bring an egg timer to the meeting. When it goes off, you're done. Not your fault, it's the timer's.
7. The organizer of the meeting is required to send a short email summary, with action items, to every attendee within ten minutes of the end of the meeting.
8. Create a public space (either a big piece of poster board or a simple online page) that allows attendees to rate meetings and their organizers on a scale of 1 to 5 in terms of usefulness. Just a simple box where everyone can write a number. Watch what happens.
9. If you're not adding value to a meeting, leave. You can always read the summary later.

This is all marketing. It's a show, one that lets your team know you're treating meetings differently now.

When should a startup pull the plug?

from Trakin' the india business buzz by Sriram Vadlamani

Started in 1981 Infosys was on the verge of collapse after 8 years when a joint venture with Kurt Salmon Associates (KSA) has collapsed. The Infosys-KSA joint venture was Infosys’s attempt to break into American market. If Mr. Murthy has accepted that as a failure and moved on, there wouldn’t be any Infosys. Murthy along with his co-founders decided to stay on. The rest is history which everyone is part of.

The story of Infosys is an inspirational one. But, the times have changed since then. The gestation period for a startup has come down drastically. 8 years is not a long time then, but anything more than 3 years is a long time now.

A startup which is 3 years old and doesn’t have a profits or break-even will go down unless its Twitter.

Pulling the plug though looks and sounds fashionable, is really difficult to do. There is a lot of emotional attachment. But, sound logic should overcome that attachment and say these three words - This is it. If you fail, it is not the first time someone has failed. If your startup fails, again this is not the first time a startup has failed. Besides, there is no such thing as a failure until you stop learning from these things. There are always learning’s.

The startups mentioned here have done just that. They have pulled the plug on a specific idea but not on the entrepreneurial spirit.Tripmela.com an online travel deal aggregator went was sold on ebay fro 112,000.

Reason is the aggregator is not cut for Indian markets as there weren’t many hotels offering deals.Rohit Agarwal’s Tech Tribe a networking startup which received VC funding shut shop after 3 years of operations. Reason again is the changing business conditions and bigger players with more capital at their disposal. Rohit moved onto to online education space.

Kesava Reddy’s MyDuniya offers  email-via-SMS service. The concentration on individual users instead of corporates did not work very well and instead found a new start-up called Numo Solutions. It offers customized SMS solutions for corporate’s.Bookeazy.com a movie ticketing service was doing good but the founders pulled the plug on it as it is taking too much of their time. They came up with Lipikaar a translation and transliteration product.

In all these startups there is a trend :

1. You pull the plug, Accept failure and go into oblivion or a day job.
2. You pull the plug on this idea, go on to a different idea and succeed. It is statistically proven that entrepreneurs get second time lucky.
3. You start something up, you start something else along with it, work on them in parallel and then you decide to pull the plug on one of the things which isn’t working.

The first option does not seem likely as I believe in this saying - Once an entrepreneur always an entrepreneur.

I still have some questions left. What if a startup stays on the course to become the next Infosys? Should a startup have a  contingency plan or an exit strategy?  When do you think startups should pull the plug?

The Loaded Carriage Analogy

from Personal Growth Map by Haider

One of the main reasons why we don’t make the progress we can make in life is that we expect to acquire all the knowledge and skills possible in any endeavour before we make a move.

Rather than start a business, or a business venture, we want to learn everything there is to learn about the economy, finance, business, marketing, advertising, etc, etc.

etc.

Before we make any changes to what we eat, in order to improve our health, we feel the need to read up on nutrition, proper exercise, supplements, etc.

We want to know how to write the best articles possible before publishing anything that can be seen by a set of eyes other than our own. After all, we don’t want to expose our weaknesses or make any mistakes, and in order to be successful, we need to be known for being the best.

At least, that’s what we say to ourselves.

This approach is like going on a journey and trying to load everything we can possibly need or might find a use for onto our carriage before making a move. We go to great lengths to find the resources we need before we venture out, and continue to pile our belongings for fear that we might leave unprepared.

After finally deciding that we are ready enough to make a move we realize that the carriage is too heavy to pull!

We end up staying where we started, without making any progress and without making any use of the resources we amassed.

If you’ve been collecting books to read about business before getting your feet wet in a business, or trying to perfect a skill - such as writing - before putting it to practical use, then you need to bear this analogy in mind.

Having a loaded carriage isn’t a virtue. It’s what’s holding you back.

You might make much more progress with a backpack than with all the resources you will find on that burdened carriage.

Loading Up a Moving Carriage

Rather than collecting resources before making a move, you can load your carriage along the way.

This helps you determine exactly what you need (and not to burden yourself with heavy resources for hypothetical needs), you will be making progress as soon as possible (and with the little resources you might have now), it exposes you to opportunities you wouldn’t have been exposed to had you remained where you started and you would have developed momentum that allows you to make progress without much effort.

The sole need for the resources we collect is using them for the journey. Therefore, it’s important to focus on the journey and not the resources.

By loading a moving carriage, you will develop the appropriate focus and make the appropriate use of your resources!

The Value of Neatness

by GuyKawasaki

In "Order vs. Disorder: Surroundings Matter" Roger Dooley explains how disorder can affect the behavior of people. He cites a study where 13% of the people snatched an envelope with clearly visible a five-Euro note in it from a mailbox. When the mailbox was covered with graffiti, 27% snatched the envelope. Does this mean that a well-organized store would experience less shoplifting? Or that people will buy more stuff from a neat store? The value of neatness is something to think about.

Creativity 101

GUY KAWASAKI OF HOW TO CHANGE THE WORLD 

I just came across an interview called “The Hidden Secrets of the Creative Mind” with psychologist R. Keith Sawyer, author of the book Explaining Creativity: The Science of Human Innovation. Sawyer’s research examines the secrets to the creative process, and the interview makes four great points that every small businessperson should take to heart:

1. Give yourself permission to think up many ideas. Creative people have tons of ideas, but most of the ideas simply don’t pan out. That’s okay because even though most of your ideas will suck, they help you get to the great ones. The trick is to let your mind wander and come up with many ideas and then cull the good from the bad. Nobody has only good ideas. (Almost everybody has selective memory, though, so they might think they had only good ideas.)
2. Keep chewing on the problem. Creativity is not about the rare giftedness of a “visionaries” and “geniuses” with their Eureka! moments. Research shows that most ideas are the result of thinking about a problem over a long period of time Creativity is about big numbers and hard work, so don’t feel frustrated if you haven’t had an epiphany yet. Certainly don’t believe that if you aren’t “gifted” (whatever that means), you’ll never come up with good ideas.

3. Build on ideas that came before. The iPod isn’t a miracle that came out of the blue—it was built on the Sony Walkman’s concept of a shirt-pocket device coupled with early MP3 players from other companies and the online store of a company like Amazon. The concept that creativity is built on what came before has important ramifications: consume information voraciously, go outside your market niche, and don’t be too proud to steal inspiration.

4. Put yourself in environment that will use different parts of your brain. Often this means taking a break. Sawyer refers to the three Bs—bathroom, bus, and bed—as places that stereotypically produce groundbreaking ideas. If you’re stuck on a project, try something that will get you to find new creative paths. One way to do this, for instance, is to schedule time for unstructured conversation with your peers. Personally, I get my best ideas while driving; this has led me to believe that if I bought a better car I would be more creative because I would drive more, but I digress.

If you do these things, some day an author like Sawyer may feature you in a book about creativity, and then you can claim that you’re a gifted visionary whose ideas come in flashes of brilliance during your regular ole awesomeness. Only you and I will know the truth. And if you like to read about innovation and creativity, check out Innovation.alltop.

Report on Obama's Use of Social Media

from How to Change the World by GuyKawasaki

"The Social Pulpit" is a very interesting analysis of how the Barack Obama campaign used social media. The folks at Edelman compiled this report, and there are many lessons that businesses can also apply, so check it out.

HP Introduces Small Business Marketing Tools

from Duct Tape Marketing by John Jantsch

This content from: Duct Tape Marketing

HP Introduces Small Business Marketing Tools

HP launched something called MarketSplash this week and I think it looks very promising and presents a very interesting path for the computer giant. No longer content to depend solely on computers and printers, this initiative allows them to go much deeper into the small business world by provided marketing services.

The MarketSplash program uses HP’s design capabilities brought on through the LogoWorks acquisition and adds the ability to design and print directly from MarketSplash. Business Cards, Letterheads, Rubber Stamps, Web sites and postcards all appear on the initial interface.

“MarketSplash helps small businesses create the high impact look of a big company without requiring the resources of one,” said Vyomesh Joshi, executive vice president, Imaging and Printing Group, HP. “As part of our Print 2.0 strategy, MarketSplash helps customers easily and affordably access professional design services from the web and print how, where and when they want.”

Once you select and personalize your designs you get several printing options including printing from their own printer, receiving their order via mail delivery, or picking it up at any Staples Copy and Print center in the United States.

Planning Fundamentals are Business Fundamentals

N)

Planning Fundamentals are Business Fundamentals

by Tim Berry

How do absolute business fundamentals relate to planning fundamentals? I really believe that's a critical question. Business planning has to relate to the real business principles.

I can think of five key business fundamentals that should underlie good business planning:

1. It's about results. It's not planning for the sake of truth or beauty. It's not planning for the sake of the document, or formatting. It is about what you need to improve, manage, and plan your business.
2. Form follows function. What's included in a business plan isn't necessarily anything more than what you need to understand and manage your business strategy (the heart) and work out what's supposed to happen when, and how much it costs, how much it brings in, and who's in charge of it (the flesh and bones). It might never get off of your computer. Or, if you need a so-called business plan, or a summary memo, or presentation, or elevator speech, then that is output from the plan on your computer. It's not the plan, it is output from the plan.
3. Metrics and tracking equal accountability. Plans should be concrete and specific. How will you know, after time goes on, whether or not you are implementing your plan? That's a matter of things you can measure, and having the discipline to measure them, and track them. And the result, when it's done right, is accountability.
4. Planning assumes change. You don't plan the next year so you know what to do regardless of what happens. No, instead of that, you plan the next year so you know what the plan was as you track results, and changing assumptions, and then manage that plan.
5. Planning isn't accounting. Accounting starts today and goes backwards into time, in ever increasing detail. Planning starts today and goes forward into time, in ever increasing aggregation. The tables look the same, but the concepts are very different. Furthermore, while accounting is about profits, planning is about cash flow.

That idea became last Monday's webinar called Back to Fundamentals, which I gave as a free contribution to Global Entrepreneurship Week, and which Palo Alto Software is now rolling out on the Web in four 10-12 minute segments, one per day, plus a final one for questions and answers.

Before I tell you where to click to view those recordings, I should warn you that you have to input an email address, or the click doesn't work. Having said that, you can click here to get to the page and then you add your email address and click the "watch the video" button to view it.

The Truth about Pricing

The Truth about Pricing

Any Entrepreneur that's ever tried to bring a new product to market has had to deal with one frustrating fact – no one knows what to charge for it! No matter how well you think you can predict the market or how much research you've done, until people start paying for your product you're still just guessing.

Even then, when people are actually forking over their hard earned cash for your product, you still don't know if you've optimized for the best possible price to generate the greatest number of sales.

Fortunately there are some simple strategies you can employ to quickly arrive at a happy medium and give yourself a little piece of mind.

The Binary Nature of Pricing

The first pass you'll want to take at pricing is to eliminate all of the people that weren't going to pay you to begin with.

What may shock you is that when it comes to a consumer's perception of pricing, it's not always the actual amount that scares people; it's whether or not they have to pay at all. Pricing is more or less binary for consumers – they are either going to pay or they won't – the actual price is incidental.

Having launched ten companies myself, all in different industries ranging from automotive to financial services to television casting, I've found that in each case you get a group of consumers that are willing to pay just about any reasonable price for the product, and a group of consumers that won't ever pay a penny.

There's something that goes off in a customer's head when they have to pull out their wallet. Up until that point the value you were providing may have gone relatively un-noticed. But when the customer has to break out their credit card and start typing in those 16 magical numbers, they think twice about the value of your product.

Instead of developing your pricing to lure the group of people that just aren't willing to pay for your product, focus on maximizing the yield of the customer who will pay for your product. It's a lot easier to get someone to pay 10% more for your product than it is to reduce the price of your product and get more people to pay for it.

The "Freemium" Model

Next you'll want to figure out how to separate the paying customers from the non-paying customers, without alienating either.

Leave it to the overzealous Internet nerds like me to invent a word like "Freemium" to explain a basic price gateway model. Freemium is a word used to describe giving a portion of your product away for free in order to attract interest, then charging the most passionate customers for premium benefits.

I'm not entirely sure, but I think this model was pioneered by Baskin Robbins every time they handed me a free sample of chocolate ice cream in order to convince me to buy an entire cone. These days the freemium model appears when I want to sample a song on iTunes but have to pay to download the whole song onto my iPod.

The beauty of the freemium model is that allows you to test two pricing strategies simultaneously. You get to see how many customers would be interested in your product for nothing at all to gauge the overall interest in your product. It then allows you to learn exactly what about your product people are most interested in paying money for.

Try every Possible Price

Once you've separated the paying customers from the non-paying customers, you still need to settle on the right price to charge them. There's one simple answer here: try every possible price.

I'll give you an example. At Swapalease.com, a site that allows people who want to get out of a car lease to connect with people who wanted to get into a car lease, we charged people to post their car leases on-line. The problem was, we didn't know how much to charge them, so we tried every possible price.

Our early estimates figured we would probably get around $24.95 per posting on the site. We constantly tried new pricing strategies to figure out what would be the right price that consumers would accept.

Wouldn't you know that after six months of testing we found out the number was over $100 per post!

The only thing that kept us from simply making four times as much per sale was our willingness to test the sensitivity of price. Had we gone with our gut instincts we would have vastly undervalued the product and left a whole lot of money on the table.

It Pays to Try Everything

The only thing you can rely on when picking the price of your product is having to change it – a lot.

If you can develop a system to test as many possible price points with as many consumers as possible, you can hopefully uncover that hidden gem that is your perfect price. Until then, keep trying something new. It's the only surefire way to win.

-----------------------------------------------------------------------------

Wil Schroter is the Founder and CEO of the Go BIG Network, the largest network of startup companies and entrepreneurs at www.goBIGnetwork.com. He is also the author of the new book "Go BIG or Go HOME".

How To Select Accounting Software For Your Small Business

Posted by:Business week online on September 16

Here’s a step-by-step approach to help you decide which program can best serve your business accounting needs:

1. Determine and create a list of the specific types of accounting functions you want to perform. At a minimum, the software should handle cash disbursement and cash receipts, post all charges to the profit-and-loss statement automatically, and offer a complete reporting package. Reports should include a detailed general ledger, balance sheet, income statement (profit and loss), and cash-flow statement, as well as specific function reports for payroll and job costing.

2. Don’t pay for features and functions you won’t use. The typical small business writes fewer than 100 checks per month, makes 10 to 20 bank deposits per month, and produces 20 to 100 invoices per month. It doesn’t take a major accounting program to handle these functions, and it’s not worth it to buy a program that has lots of features you won’t use and that end up making the program more difficult to operate.

3. The most important step is to talk with other people in businesses similar to yours about what accounting software they use and what they like or don’t like about it. There is no better source for finding out about a program than those who have been using it for a while.

Gene Fairbrother
Business Consultant
National Association for the Self-Employed
Dallas

Small is the new big by Seth Godin

Small is the new big by Seth Godin

Big used to matter. Big meant economies of scale. (You never hear about "economies of tiny" do you?) People, usually guys, often ex-Marines, wanted to be CEO of a big company. The Fortune 500 is where people went to make… a fortune.

There was a good reason for this. Value was added in ways that big organizations were good at. Value was added with efficient manufacturing, widespread distribution and very large R&D staffs. Value came from hundreds of operators standing by and from nine-figure TV ad budgets. Value came from a huge sales force.

Of course, it's not just big organizations that added value. Big planes were better than small ones, because they were faster and more efficient. Big buildings were better than small ones because they facilitated communications and used downtown land quite efficiently. Bigger computers could handle more simultaneous users, as well.

Get Big Fast was the motto for startups, because big companies can go public and get more access to capital and use that capital to get even bigger. Big accounting firms were the place to go to get audited if you were a big company, because a big accounting firm could be trusted. Big law firms were the place to find the right lawyer, because big law firms were a one-stop shop.

And then small happened.

Enron (big) got audited by Andersen (big) and failed (big.) The World Trade Center was a target. TV advertising is collapsing so fast you can hear it. American Airlines (big) is getting creamed by Jet Blue (think small). BoingBoing (four people) has a readership growing a hundred times faster than the New Yorker (hundreds of people).

Big computers are silly. They use lots of power and are not nearly as efficient as properly networked Dell boxes (at least that's the way it works at Yahoo and Google). Big boom boxes are replaced by tiny ipod shuffles. (Yeah, I know big-screen tvs are the big thing. Can't be right all the time).

Today, little companies often make more money than big companies. Little churches grow faster than worldwide ones. Little jets are way faster (door to door) than big ones.

Today, Craigslist (18 employees) is the fourth most visited site according to some measures. They are partly owned by eBay (more than 4,000 employees) which hopes to stay in the same league, traffic-wise. They're certainly not growing nearly as fast.

Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly.

Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

Small means you can tell the truth on your blog.

Small means that you can answer email from your customers.

Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.

A small law firm or accounting firm or ad agency is succeeding because they're good, not because they're big. So smart small companies are happy to hire them.

A small restaurant has an owner who greets you by name.

A small venture fund doesn't have to fund big bad ideas in order to get capital doing work. They can make small investments in tiny companies with good (big) ideas.

A small church has a minister with the time to visit you in the hospital when you're sick.

Is it better to be the head of Craigslist or the head of UPS?

Small is the new big only when the person running the small thinks big.

Don't wait. Get small. Think big.

True Story: Missing Assets Equal to A Year's Sales

from Planning, Startups, Stories by Tim Berry

You don't think finance and accounting matter in small business? Here's a true story, and it's about a small business like the ones I write about, in fact one I was involved in, not a large publicly traded company. $3 million worth of assets went missing, but nobody took them. Where do you think they went?

It is sparked, I admit, by news of Dell, Inc. Last week the New York Times reported Dell to Restate More Than Four Years of Earnings. Here's a quick summary of that story:

Dell said that it would restate its financial statements for 2003 through the first quarter of 2007, concluding an internal investigation into accounting errors.

Dell said that the restatements would shave off between $50 million and $150 million in cumulative net income.

I know, that seems like standard large-company stock market stuff, but here's a true story of Creative Strategies International, which was then a medium-sized high-tech research and consulting company owned by Business International and based in San Jose, CA. Call it CSI. I should add that this story preceded the change in ownership to the Creative Strategies that is now the brainchild of Tim Bajarin, still exists, and is still in San Jose, CA.

I need to emphasize this, because I like Tim Bajarin and he's done a great job with the company since he took it over. I'm pretty sure the corporate entity even changed, I know the ownership changed, so I assume there's no harm in telling an old story. And I think there might be a lesson here.

Shortly after I started to work there, there was an audit called by the parent company in New York. And, as you suspect from reading the title of this post, assets were missing. In fact, quite a sizable chunk of assets. In a company of 20 or so employees, selling $4 million or so per year, roughly $3 million worth of assets had disappeared.

Needless to say, the parent company was not amused. But there was no theft, no embezzlement, just bad accounting.

What do you think happened? Of course you have no idea, but let me give you a hint first, then think about it. The assets were accumulated research, not chairs or tables or computers or gold bullion, but research. Does that tell you the answer?

It turned out that CSI created what we called group studies, research studies that we'd design to cover some interesting new market in high tech, develop, finish, and then sell to multiple buyers. For example, a study in telecommunications would be created and developed and sold to 10 or 20 or more companies in the telecommunications markets. If you could sell a study that cost $25,000 to 20 companies for $5,000 each, they got a good study -- market forecasts, competitive analysis, etc. -- at a great price, and CSI made a healthy profit.

So have you figured this out? As the studies were created and developed, consultants were paid real money to research markets. They took real checks home and cashed them and paid mortgages and things. They also took planes to places and interviewed people, and purchased some secondary research, sometimes developed primary research, all of which cost money.

All of this spending should have been expensed as product development expense. It was just like computer programming in terms of tax treatment and standard accounting. You aren't really building an asset, you're incurring an expense. Product development is almost always an expense, even though it sometimes generates technology that goes into products that get sold for money.

Somebody doing the numbers assumed that since this would be cost of sales when the studies were finished and sold, and instead of calling this money development expense and subtracting it from profits, they'd call it assets, as if it were inventory, and subtract it from profits as direct costs.

It may have seemed logical at the time, but over time many of those group studies were started but not sold. If the sales were disappointing, instead of spending the full $25,000 and finishing the study when only two clients signed up for $5,000 each, they'd just dump the project.

And there's the rub: nobody went back to those supposed assets, the accumulated investment in product, and wrote it off. It remained on the books as assets, for several years, until the parent company audited. Nobody had purposely or intentionally done anything wrong, there was no fraud, no charges, no money recovered; just several very unhappy people.

I guess I'm some kind of weirdo, particularly as I was a literature major and journalist-writer before I got into business, but I like the business numbers and I think they're important. Maybe it's from stories like this one. No, I wasn't the accountant, I was one of the researchers, but I was also a vice president and those were bad times for all of us, not just the bookkeeper.

--Tim

I dont know who wrote this ......

“GOOD morning, ladies and gentlemen. We are delighted to welcome you aboard Veritas Airways, the airline that tells it like it is. Please ensure that your seat belt is fastened, your seat back is upright and your tray-table is stowed. At Veritas Airways, your safety is our first priority. Actually, that is not quite true: if it were, our seats would be rear-facing, like those in military aircraft, since they are safer in the event of an emergency landing. But then hardly anybody would buy our tickets and we would go bust.

………………………………………...

Your life-jacket can be found under your seat, but please do not remove it now. In fact, do not bother to look for it at all. In the event of a landing on water, an unprecedented miracle will have occurred, because in the history of aviation the number of wide-bodied aircraft that have made successful landings on water is zero. This aircraft is equipped with inflatable slides that detach to form life rafts, not that it makes any difference. Please remove high-heeled shoes before using the slides. We might as well add that space helmets and anti-gravity belts should also be removed, since even to mention the use of the slides as rafts is to enter the realm of science fiction.

Please switch off all mobile phones, since they can interfere with the aircraft’s navigation systems. At least, that’s what you’ve always been told. The real reason to switch them off is because they interfere with mobile networks on the ground, but somehow that doesn’t sound quite so good. On most flights a few mobile phones are left on by mistake, so if they were really dangerous we would not allow them on board at all, if you think about it..."

The list is endless (plastic forks, etc.) but the lesson is subtle: every business does this. From the standardized layout of a doctor's waiting room to the forms you fill out at the bank, we subject our clients and prospects to a little show that is not directly related to what we're doing for them. We're all doing theatre. We want our waiter to be better dressed than us, and the stockbroker's office to be as far away from an off track betting facility (or a laundromat) as possible.

Of course, the show is related to what we're selling. It's related for the same reason that the price of a cup of coffee varies by a factor of 120 depending on who made it and where you consume it. You don't have to like the fact that a show is going on, but you're part of it. The most successful organizations understand this and work hard to put on a show that works. One that doesn't get in the way of what we set out to purchase in the first place.

We won't be undersold

If you have a won't be undersold motto, the very best thing that you can do is find customers who find a better price somewhere else... and then give them the discount. Why? Because it proves you're not lying, and it spreads the word. Those customers are heroes.

Compare that approach to this one from Jason found at cou+rant.com. It appears as though Best Buy had a secret Intranet site that looked just like their regular site... except with higher prices on it. So, if you came in claiming that the store was being undersold by the website, it's alleged that employees would show you a site that sure looked like their site...exept you were 'wrong.'

Yikes.

I dont know who wrote this ......

The more you think about business as being a community service, the more successful you become. What I've told newspapers -- when they've asked -- is that newspapers used to be in the community service business. Now they've been positioned as cash cows."

I dont know who wrote this ......

Dynamic content creation is a necessary part of your overall web strategy. Blogs and RSS feeds are being used by small businesses everywhere. Unfortunately, this has caused a bit of stagnation on the static portions of the site, namely the home page. If your home page never changes, the search engines will grow tired of visiting your site.

From a search engine standpoint, not to mention most users, the home page is still the first look. You can't simply blog and call content creation done. If your home page has been indexed by the search engines, you can dramatically improve the search results for your home page and thus your entire site, by adding or changing that content every two weeks or so.

You don't need to mess with the page design, titles, headlines or meta tags, just change out some portion of the body text content with new relevant, keyword rich content. This little practice tells the search engines that this page had something new, this page changes often, - this alone will improve your search results.