IRS Audits Increase for Small Business

According to a recent article on Inc.com, the IRS has been given additional funding for enforcement. This means that small businesses will likely feel the effect of increased scrutiny and audits. You can read the article here:

http://www.inc.com/criticalnews/articles/200512/audits.html

Now more than ever, it's important to keep accurate records of all your financial transactions as it relates to your self-employment and small business. I know it's a daunting task for many, and many put off entering all the revenue and expense numbers into a ledger (paper or electronic). It's a case of divide-and-conquer: do it weekly and the stacks of paper will never get overwhelming.

Great Article - 10 Ways To Grow Your Business

As a small business coach, I've been spending the month of December with all my clients, helping them re-design business and marketing plans for 2006. This is a perfect time of year to take a closer look at your business, and creating ways to make it grow in the next 12 months. I encourage all small business owners to take time each year to re-visit current year business and marketing plans, and do some projections and goal-setting for the next year. Having clear intentions of what you're trying to create over the next 12 months will set the wheels in motion to making it come true.

Karen Spaeder has written a good article that's perfect for this time of year: "10 Ways to Grow Your Business." You can view it here:

http://www.entrepreneur.com/article/0,4621,315446,00.html

Pet Peeve: Marketing in Holiday Cards

Call me anti-Grinch.

I love when I receive holiday cards from vendors, colleagues and other business contacts. What I hate, though, is never receiving any other communication from them all year, and then when they finally do send a holiday card, there's a promotion for a sale or a discount coupon. I mean, really people!

I received a holiday card today from a vendor that I haven't heard from all year. In fact, she had the wrong address on the envelope because she didn't know we had moved our business in August. Inside was a coupon for a discount on her service. So, she ignores me all year, doesn't keep up with major changes in my business, then tries to sell me something in her holiday card. Yuck.

The card went right into the trash.

Don't these folks understand that sending the card from the business, without any other marketing message, is a great way to market? It builds rapport and trust. It's a subtle way to say, "I believe in the power of abundance so much, that I don't need to send you marketing messages at the end-of-year holiday season. Instead, I simply wish you joy, happiness and success in the New Year."

Whatever happened to creating friendships with our clients, customers, vendors and other business colleagues? A holiday card is a chance to connnect, a chance to build rapport, and a chance to share warm wishes with another human being. Don't smear it with crass commercialism. (Wait until AFTER New Years, then send them your offer!)

I'll get off my soap box now.

Happy Holidays!

“Ground Truth” and the Importance of Market Research

I know. I know you’re excited about your new business. I know you have a great idea and when you tell others about it, they think you have a great idea, too. A great idea is the birth of a new small business.

But as a self-employed small business owner, you can’t afford to take chances on ideas without getting more information about what your entire market audience wants and what they’re willing to pay for it. Talking to 10 or 20 other people isn’t enough. You’ve got to talk to thousands.

In the military and in NASA, they use a term called “ground truth.” While they can observe things via satellite and other distant monitoring devices, nothing beats getting down on the ground and seeing what’s really happening in real life. Here’s NASA’s explanation of how they use Ground Truth:

http://asd-www.larc.nasa.gov/SCOOL/groundtruth.html

So, how can you get ground truth about the viability of your business idea? The answer is market research. Market research is a study of your consumer’s preferences and your competition. Sometimes you’ll hear it called a “feasibility study.”

Through surveys, literature research, internet research, and other information gathering techniques, you can learn the trends in your industry, as well as individual preferences of your potential customers. If you’re in a well-defined industry, like toy manufacturing, you might find that your national professional organization has already conducted research studies on behalf of the members of the organization.

Why is market research necessary? Because we all have different tastes, different ideas about what’s important in our lives, and different ability (or willingness) to pay a particular price for what we want. Often the small business owner thinks they have a great idea for a new product or service, only to discover that people either don’t want that service or product, or they’re not willing to pay the price that the small business needs to set in order to be profitable.

Sometimes they discover, joyfully, that not only do people want this new product or service, but that these same people can suggest other new products and services that would work well with the new idea, allowing the small business owner to see future growth into new areas. Or maybe they discover through their market research that if they made a small change in their product or service, for instance, making a product with a red cover instead of a blue one, that people would buy it more often.

Another purpose of market research is to discover what your competition is doing. Say that you want to create a new type of office product and you think your idea is unique. Take a look at what’s on offer at the Staples, OfficeMax and Office Depot websites, and you might discover that your competitors have already created a product to solve the same problem as your product solves. Does that mean you should then give up the idea entirely? No, not necessarily. What it means is that you now have some ground truth about what you’re up against if you want to go head-to-head with these competitors.

You need to know the ground truth about your ideas before you spend countless hours and money taking a new product or service to market. I know that it feels like it’s putting a damper on new business idea creation, but in fact, it’s just the opposite: I’m encouraging you to find out what your customers want, and what they will pay for it, so that you can ensure future success.

Some (dark) Small Business Humor

Sometimes a helping of "de-motivating humor" can really cheer up your day.

Yesterday, I received a catalog (a real one!) from Despair, Inc. Despair's premise is that motivation only comes from within and all those motivation speakers and posters do diddly-squat to motivate employees and small business owners. So they've come up with their own line of posters and notecards which are hilarious!

They have ones like:

"CHANGE: When the winds of change blow hard enough, the most trivial things can turn into deadly projectiles."

and

"APATHY: If we don't take care of the customer, maybe they'll stop bugging us."

Some of these are so funny, I was laughing out loud in the car reading the catalog. It helps, sometimes, to see the darkly humorous side of the motivation industry! As a small business coach, I can definitely appreciate a laugh at my own expense.

Their website is http://www.despair.com./