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Cracking the Government Contract Code, Part II: Eight Insider Tips from Small Business Experts

Cracking the Government Contract Code, Part II: Eight Insider Tips from Small Business Experts

by Reed Richardson.

In Part I of this series we explored some of the compelling reasons small businesses might want to branch out into government contracting and some of the marketing and operational nuances involved if they do. Here in Part II of our series, we distill some of those larger themes into concise, actionable advice from experts in the field.

Tip #1: First, get your red tape in order. Here are five quick and easy administrative steps a business owner should complete before embarking on any quest for government contracts.

Get a nine-digit DUNS number for your business.
Know your business’s NAICS codes.
Complete the federal government’s free Central Contractor Registration (CCR) and certify your small business as specially designated (e.g. veteran-, woman-, or minority-owned), if applicable.
Obtain an active Marketing Partner ID Number (MPIN) from the CCR.
Use your MPIN to register and certify your business using the Online Representations and Certifications Application (ORCA).

Tip #2: Conduct market reconnaissance. To find out which agencies have recently bought what your business is selling, look through the statements of work on current federal contracts, which can be found on the FedBizOpps website, explains SCORE mentor Jean Jolkovski. “Then go find similar projects in those same agencies nearby.”

Tip #3: Get listed (wisely). The federal government has dozens of industry-specific catalogs that its employees and project managers use to find pre-approved vendors from which they can buy. Getting your small business listed in these catalogs, which are called GSA Schedules, isn’t so easy, however, and if not done right it can turn into a big headache. “I always tell small businesses to hire someone to negotiate the process for getting listed with the GSA,” explains small business contracting expert Marc Amtower. “Otherwise you can end up with too low a price or, like a lot of companies, eating the shipping cost.”

Tip #4: Understand your competition. The government makes it fairly easy to see what other vendors are out there selling in your market space, notes small business contracting expert Marc Amtower in his book Selling to the Government. The primary method of doing this involves running a report called the GSA Schedule Sales Query (SSQ). Amtower estimates that the top five percent of vendors on each GSA Schedule reap somewhere between half and two-thirds of all contracts, while the bottom two-thirds usually share a measly 10 percent. “This provides you with a baseline on the food chain for your niche.”

Tip #5: Get free inside information and contract assistance. There are two key resources a small business owner should connect with to begin their search for government contract business—Procurement Technical Assistance Centers (PTAC) and Offices of Small and Disadvantaged Business Utilization (OSDBU). While PTACs are government-funded, third-party partnerships established to help connect buyers and sellers, OSDBUs are funded and staffed from within each government agency. “The people staffing an OSDBU don’t have any contracts and they don’t have any money,” notes Jolkovski, “but what they do have is lots of information.”

For example, the OSDBU at the federal Department of Transportation (DOT) offers a handy online contact list of procurement assistance specialists, broken down by individual DOT agency. Other OSDBUs, like the one at the federal Department of Labor (DOL), run quarterly Vendor Outreach Sessions, where entrepreneurs can market their capabilities directly to DOL managers in face-to-face meetings. Local PTACs also offer matchmaking events and procurement training seminars to help small businesses.

Tip #6: Tell the government what you can do. To successfully market your small business to government buyers, it’s imperative to create a concise, one-page summary of your company’s qualifications. Known in the contracting world as a Capability Statement (CAPE), this document should include a brief description of a company’s products or services, past industry performance, and staff or leadership. “This CAPE should also be in a pdf or jpg format,” notes counselor Kenneth Larson, “so it can be quickly attached to an email and then easily opened.” (For more on how to write an effective CAPE and to see some successful, real-life examples, check out Larson’s blog on the topic.)

Tip #7: Make it easier for the government to do business with you. Marketing expert Amtower recommends that every small business make its online presence more government contract-friendly by dedicating a separate web page to government purchasing and by accepting payments from the GSA SmartPay credit card. “And don’t forget to include the GSA SmartPay logo on your website, alongside those of other accepted credit cards like MasterCard and Visa,” he adds.

Tip #8: Get clearance to double the size of your potential market. Because more than half of all government contract money is spent on classified projects, Jonkolvski points out that obtaining a security clearance can open up an even wider range of potential new business. To learn more about the process, check out the Defense Security Service’s Facility Clearance Checklist. There, you’ll find an important first step involves being sponsored by either a government agency or another cleared company.

Apple Capital Group, Inc.

Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the WorldCracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

This is Part I of a two-part this series about how small businesses can enter into the government contracting market. In Part II of our series, we distill some of the larger themes explored below into concise, actionable advice from experts in the field.

For entrepreneurs looking to expand their customer base in a struggling economy, finding new customers becomes critical to survival. So, why not go after what is inarguably the biggest customer of all, one that is almost guaranteed to have a need for whatever product or service a company may be selling? After all, as government contract expert Kenneth Larson points out, “There isn’t much that Uncle Sam doesn’t buy.”

Of course, it’s not just what the federal government buys that should get a small business owner’s attention, but how much and from whom. “The major reason to go after government contracts is purely the size of the market. Federal, state, and local government spending accounts for more than 30 percent of GDP,” explains Marc Amtower, author of Selling to the Government. “So, why wouldn’t small businesses want a piece of that?” And thanks to federal guidelines, that small business piece—targeted to be 23 percent of the nearly $500 billion allocated each year—is substantial, totaling $97.9 billion in newly awarded contracts in fiscal year 2010. Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

“The U.S. government market represents the single largest market in the world,” Amtower explains in his book. “[Anyone] can play in it. But not everyone will, and of those who do, most will not succeed. Why?”

Patience is a virtue (and a necessity)

A common reason that small businesses fail to crack into the government contract market involves lack of patience and dedication. “A lot of them think that they can somehow expedite the process of getting that first government contract,” Amtower says. “But then, after they get six months in and still have nothing to show for it yet, they give up.”

For early stage entrepreneurs, six months may indeed seem like an excessively long time investment with no payoff, but most experts say that landing an initial government contract usually takes even longer. In fact, a recent survey of active small business contractors found that it took them, on average, nearly 20 months to land their first federal contract.Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

“It’s not for people who want a quick hit,” advises Amtower. But the payoff, once a business does get its foot in the door, can be lucrative. The same study also found that, of those small businesses listed as an approved government vendor, fully four out of five now have more than $1 million in annual revenue, with about half of that amount coming directly from federal contracts.

To build early momentum, shoot for small victories

For a small business’s first foray into the government market, jumping into a bidding war over a long-term prime contract is likely a bridge too far. So, after checking off the necessary administrative steps to sell to the government, a better first-time goal might involve getting approved for one of the General Services Administration (GSA) Schedules. Though somewhat confusing in name, the federal GSA Schedules don’t involve timelines or calendars, but instead function like vast catalogs of government-approved business vendors, broken down by products and services.

For example, federal employees in need of, say, a new office chair can pull up the appropriate GSA schedule and shop for different models by their features and prices just as he or she would at any commercial, office-supply store. To purchase, they simply charge it to their government-issued SmartPay credit card, sometimes known as a P-card. (Federal expenditures for less than $3,000 do not require bidding or prior approval—what is known as “paperless procurement.”) The main benefit of selling through the GSA Schedule is that most transactions are of the instantaneous, credit card variety. government contracts

“For a small business just starting, these micro-purchases can be a great place to get your feet wet,” Amtower explains. Though small, all these incremental purchases can add up to a staggering sum. According to the GSA, there were 98.9 million SmartPay credit card transactions in fiscal year 2010, which rang up to a total of $30.2 billion. “I’ve got a small business client right now that makes $3 million a year just from government credit card sales,” Amtower says, adding that this company’s average SmartPay transaction is only $1,500. This nickel-and-dime sales profile runs counter to many pre-conceived notions about securing multi-year, multi-million-dollar government contracts, he acknowledges, but sometimes pursuing the former instead of the latter makes more sense for entrepreneurs.

“You’ll never be a major player by doing it that way, but maybe you don’t want to be,” Amtower says. But he’s also quick to point out that getting one’s small business products or services listed on the GSA Schedule still doesn’t guarantee anything in the way of actual sales, you still have to market your business effectively. “It’s just another tool; think of it as a fishing license rather than the fish.” Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

Selling is selling

“Selling to the government is really no different than in the commercial world,” explains Phoenix, Arizona-based SCORE mentor Jean Jolkovski. “One, you need to establish what you’re selling and two, why they should buy it from you instead of someone else.”

This requires small businesses seeking to land a prime or even a subcontract to take an active role in marketing their products and services. To do that, Jolkovski says, entrepreneurs must thoroughly investigate which government agencies and large private contractors might make good potential customers and partners, respectively. But once these contacts have been identified, don’t assume your small business status is enough to land you the deal.  Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

“There are 600,000 small businesses registered with the federal government,” Jolkovski points out. “So, if you begin a sales conversation by saying ‘Use me, I’m a small business’ that’s a big red flag to most government contractors, because then they think that’s the only thing you have going for you.”  Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

Instead, he recommends using a more typical sales pitch, one that starts off with a focus on your business’s unique sales proposition. “You have to find somebody who wants what you’re selling, then get a face-to-face with the project people who will need what you’re selling.” Only after all that, Jolkovski says, do you want to bring up any certifications your small business might have.  Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

No guarantees

“You don’t jump into becoming a prime contractor right away,” explains Larson, who doles out his decades of government procurement expertise on his blog “You usually sort of ease into the business with the intent that you’re going to learn and grow. Often, small businesses position themselves with larger organizations as a Team member or subcontractor.”

“Teaming,” as it’s commonly referred to in the government contract world, can be tricky, however, and small businesses, in particular, must constantly be on their guard. But even if a small company becomes a Team member on an ultimately successful bid, Larson says this doesn’t necessarily mean they’ll reap the expected rewards. “Prime contractors are notorious for walking all over their subcontractors,” he warns. “Sometimes they’ll promise the world but then keep 95 percent of the work for themselves, giving the sub the minimum amount of work to fulfill the terms of the contract.”

In addition, Larson points out another big caveat that small businesses must consider when dealing with federal contracts. “The federal government usually contracts on a five-year basis, but it budgets on an annual basis,” he explains. So, even if a small business finally inks that lucrative multi-year contract, Congress must still allocate the necessary money every fiscal year to fund it. “If it doesn’t, you could be stuck.” As a result, most experts caution entrepreneurs to avoid putting too many of their eggs in the government contract basket.

Still, government contracts can be an excellent source of cash flow, Larson notes, providing a small business with that steady stream of income necessary for it to achieve real, sustained growth. As an example, he points to one of his former mentored companies, the California-based IT firm VSolvIt. “When they started five years ago they had nothing, but last year they landed a five-year, $14.5-million contract with the USDA,” he says. With that kind of regular income, he adds, thriving, rather than merely surviving, now becomes the goal.

“It’s really an art form,” Larson reiterates, “but once you understand the nuances of how to market and sell to the government, it can definitely be worth it.” Cracking the Government Contract Code, Part I: Start Selling to the Biggest Market in the World

Apple Capital Group, Inc.

Website Essentials for Small Businesses

Whether you think of it as a virtual storefront, an online brochure, an information resource or an e-store, a website has become a necessity for most small businesses. If you already have one, are considering creating a new one or building one from scratch, the following are some tips to make your website successful.

Defining your online presence

First, define the purpose of your website, because this will dictate the type of site you have, as well as the content and functionalities it should include. Are you selling products online? Are you seeking to replicate your bricks-and-mortar presence? Do you want to raise your profile as an industry expert by blogging on issues that interest customers? Will your site serve as a database of related resources?

To DIY or not to DIY

Once you determine what type of site you want, the next big question is whether the technical requirements of your site are within your capabilities. You may need to hire a website designer or even an interactive advertising firm. Designing your own site using platforms like Go Daddy or WordPress can cost as little as $250, but can take 30-40 hours depending on your skill level and will require at least a basic understanding of html. If your site will be content heavy and require regular updates, using a content management system such as Drupal or Expression Engine will enable employees to post new content regularly and easily.

Alternatively, if you hire a designer, you can look to pay anywhere from $1,000 to $50,000, but will most likely have a more professional-looking company logo; a sophisticated design; a multi-layered site architecture; the inclusion of html-, Java- and Flash-based features; advice on domain names; site maintenance; guidance on search engine optimization and more. Unless you’re working with a full-service agency, you may need to hire a separate programmer for custom components such as online forms, e-commerce capabilities and customer relationship management tools (expect to spend approximately $85 to $125 an hour; if you decide to use Flash, the cost may be 25 to 50 percent higher.)

Finding a host with the most

Where your website resides on the Internet is key. Before getting references, narrow down your list of hosting companies by considering which capabilities are most important to you, (e.g. responsive customer service; 24/7 technical support; reliability of email system; Internet security; scalability, etc.). You should expect hosting fees to range from around $8 to $50 per month for a shared host; $25 to $250 per month for a merchant plan, and $125 to more than $1,000 per month for a dedicated server. Another option is “cloud hosting,” which is a newer, faster type of hosting that allows websites to be housed on an online infrastructure of servers.

Website visitors.pngSelecting a domain name

This applies only to small businesses that don’t already have a website. In choosing a domain name, it’s important to stay as close to the name of your business as possible. If the name is too difficult to remember, or includes numbers, dashes, acronyms or abbreviations, you may drive customers away. If someone already owns the domain name you want to use, it’s usually better to opt for a shorter version rather than a longer. In fact, 63 characters or fewer is often recommended. Unless you’re a non-profit or a university, “dot com” is still the preferred suffix for your domain name.

Additional considerations

The following are the major components small businesses should keep in mind about their website.

To increase customer trust, include a physical address and a list of major company executives with a brief biography and photograph.
If your site includes e-commerce, consider carefully whether it will be off-putting to ask customers to register their personal information before making a purchase.
If your site is primarily an e-commerce site, it may be a good idea to use a third-party vendor to design your shopping cart and payment options.
Evaluate whether bells and whistles (e.g. video and music) are necessary to enhance the user experience, or whether they will delay load times unnecessarily. However, using images to break up the text is almost always a good idea.

As a small business owner, you wouldn’t go to a meeting without a business card. Or, expect customers to commit to long-term relationships with your company without the details of what you sell. Neither would you subject them to long-waiting times in your physical location. Customers and prospects who visit your website will expect the same type of treatment they receive in person. Your website may be the only association a person has with your company – make sure that it’s a good one.

Apple Capital Group, Inc.

Four Decisions to Make Before Leasing Equipment

equipment leasingMany small business owners say that overhead costs are one of the leading concerns and equipment leasing, or even barriers, to starting or growing a business. Most of those costs are associated with office space and other equipment. Today, however, business owners have the option to lease on a monthly or annual basis virtually anything from computer software and printers to delivery vans and specialized production machinery. There are many advantages of equipment leasing – tax, operating, and cash flow just to name a few.

Equipment Leasing “Renting”, as opposed to purchasing outright, can deliver important benefits to small business owners. First, leasing creates greater financial flexibility by enabling you to get what you need for your business without having to pay for it up front. Rather than having to pay thousands of dollars all at once, you will have a manageable payment, which frees up cash and credit to invest in growth and other priorities. Moreover, since you do not have to wait to buy critical equipment until you can afford it, leasing the equipment can help you move quickly to take advantage of emerging business opportunities and help preserve your competitive edge.

Second, in a small business environment of continuous innovation, access to the latest technology can be integral to the long-term success of a company. Leasing enables business owners to update equipment as necessary, without having to worry about disposing of, and accounting for, depreciated older technology.

Is Equipment Leasing Right For You?

While there are definite advantages to equipment leasing, there are several considerations you should take into account when determining the right arrangement for your particular needs.

When to lease equipment – The decision to buy or lease is specific to each piece of equipment and owner. Generally, factors worth examining when evaluating whether to lease or buy include cost, availability of capital/credit, nature of equipment and how long equipment will be needed. For example, in some instances it might make sense to invest in certain equipment (e.g., heavy machinery that will likely not change much) versus computer hardware, which requires frequent enhancements and updating.

Equipment Leasing or Renting of leased equipment – In a true or operating lease, your rental payments do not entitle you to any rights or ownership interest in the equipment. You only have the right to use the equipment until your term in the true lease contract is over. The upsides of a true lease are lower monthly payments and the potential to have the lease qualify as a tax deductible operational expense.

On the other hand, a financial lease or capital lease is used to finance the purchase of the equipment, allowing you to spread out payments over the equipment’s life cycle rather than paying in one lump sum. At the end of the agreement, you will own the equipment.

Terms of equipment lease – Equipment leases can be structured to include various conditions regarding installation, essential maintenance and training as well as options for when the lease expires (e.g., extend, purchase at either fair market value or fixed amount) or simply return what you have leased.

Selecting the right leasing partner – Credit history requirements and other criteria (e.g., age of company, type of business, amount of lease) differ by leasing company and can impact terms and pricing. You should compare lease packages from several different companies to ensure that you are getting the best deal possible. Once you select a provider, be prepared to negotiate.

The factors outlined above are essential to consider, and understand, prior to leasing any equipment. Make sure that the lease best serves your business needs. Do you have any suggestions for leasing equipment? Also consult with you CPA or experience bookkeeper in the tax advantages of equipment leasing.

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Marketing on a Shoestring: How To Achieve a Big Impact With a Small Budget

Marketing on a Shoestring: How To Achieve a Big Impact With a Small Budget
Posted by SBOC Team on Aug 18, 2011 9:47:17 AM

White-in-article-portrait.jpgby Reed Richardson.

It’s an age-old predicament for entrepreneurs: Sure, you may have built a fabulous new product or developed the next killer app, but if you don’t also do a good job of marketing it to customers, your business can still end up failing. So, how can small, local businesses, a majority of which spend less than $2,500 a year on marketing according to a recent Merchant Circle survey, overcome this problem? The first step, say many marketing experts, begins with a change of mindset.

Put Marketing First in Your Mind

“For most small business owners, marketing is viewed at best as a nice add-on or at worst as some kind of foreign science whose secrets are locked away in an ivory tower somewhere, writes John Jantsch in his popular book Duct Tape Marketing. “Small business marketers need a totally different definition of marketing—one that’s honest, relevant, and more like real life.”

To get a sense of how this new definition plays out, Jantsch has developed a handy graphic about the purchasing process, something he calls the Marketing Hourglass. In a recent blog post about his Marketing Hourglass’s seven steps, Jantsch notes that “the most fundamental shift of all in marketing is the need to logically and systematically move prospects along the path of know, like, trust, try, buy, repeat, and refer—this is the entire game these days.” He adds that “any business that fills each of these seven touchpoints will be well on its way to finding and keeping customers.”

Pull-Quote.jpgProfile Your Target Customer

One common mistake among inexperienced marketers involves rushing ahead without a clear idea of which customers your small business is trying to reach in the first place. “Often, my small business students try to begin with tactical decisions, like whether they should put an ad in a newspaper,” explains Glynns Thomas, a small business marketing instructor who teaches an online course entitled “Small Business Marketing on a Shoestring.” “Instead, I try to pull them back a bit and get them to define their target market. By thinking about their strategic foundation first, that will then feed what kind of tactics to use later.”

Skipping this crucial step, Thomas adds, means a small business is likely to end up with a scattershot marketing plan—a Yellow Pages ad here, an email campaign there—that doesn’t tie together and nets little in the way of return on investment. “Small businesses really have to paint the picture of who their ideal customer is, where they can be found, and how they behave, and get really specific about it,” she explains. “If you try to market too broadly to, say, 1,000 people, you may only get 10 sales, whereas if you focus on 100 really well-matched potential customers, you may actually net 50 sales. It’s kind of counterintuitive, but by going smaller, you can actually get more in the long run.”

One low-cost tactic that Thomas favors involves marketing partnerships. As an example, she cites the experience of one of her students, the owner of a Greek restaurant located in a shopping mall’s food court. To expand beyond the primary customer base of mall foot traffic, Thomas suggested that the restaurant—whose menu focuses heavily on freshly prepared ingredients—partner with a nearby gym that has a similar, health-conscious clientele. In return for offering an initial discount to the gym’s members, the restaurant gained the ability to run a free ad in the gym’s monthly member newsletter, giving it hundreds of exposures to a like-minded audience. “It’s all about finding other businesses that are complementary to your mission without being competitive.”

Match Message to Market and Don’t Forget to “Sell the Hole”

Once you’ve identified your business’s key customer constituencies, then it’s time to craft a marketing message that fits your market and also speaks to its needs. This doesn’t have to be a complicated or expensive process, says small business marketing consultant Bob Wiltse, but if you don’t address both the former and the latter in your pitch, you’ll likely get little bang for your buck.

“A big mistake I see from a lot of small businesses is that they need to stop selling their product and start selling what their product can do for their customers,” explains Wiltse, who also writes a small business marketing blog called 390 Main Street. “For example, if your business is manufacturing power drills, don’t sell customers on the drill, sell them on the hole it makes. After all, that’s what the customers really want to use the drill for anyway. Likewise, if your company website just offers me a list of products without telling me why they’re better than your competitors, you’ve just commoditized yourself and left me little choice but to compare your products to others based on the only other piece of data I have, which is price.”

To boost your marketing profile and draw in more potential customers to your company website, you should consider a number of best practices, like adding embedded videos—for things like product demonstrations—and search engine optimizing (SEO) your website’s text content. If done right, these steps can be a very effective way of drawing people in through online search sites like Google, Yahoo, and Bing and then keeping them there once they arrive. What’s more, these steps are not so complicated that, given some time and dedication, a small business owner can’t handle it by him or herself. (For a more detailed look at SEO, check out our article on the topic.) Even better, free tools like Google Analytics can track this search traffic and see who is visiting your website, where they’re coming from, and what they’re looking at once they get there. This data can then be used to refine your target market even more and further hone your sales message.

New marketing tools like these are increasingly popular, but not universally known, Wiltse says, and so he says he often sees frustrated small business customers come into his office saying the same thing: “Everything I used to do isn’t working anymore.” For example, he points out that buying a costly, static ad in a Yellow Pages directory may have a diminishing return in an increasingly digital world and that many small companies would be better off establishing an online presence on local business search sites like Yelp, Yahoo Local, and Google Places. (In a perhaps telling move, the Yellow Pages Association recently changed its name to the Local Search Association.)

These local search sites typically charge nothing for their basic listing service. What’s more, they offer a much more dynamic and interactive platform, allowing businesses to provide more detail about their products and services while letting customers share reviews about their purchasing experience. And as smartphones and mobile tablets become increasingly popular conduits for finding businesses, having a robust local search presence online will become even more important. (For a good first step in checking your business’s current local search status, Wiltse recommends using the listing consolidator

Use Social Media to Keep ’Em Coming Back (and Bring Their Friends)

Once you’ve sold a customer, enticing them to repeat their business and refer your business to others becomes the final step in the marketing process. And when it comes to maintaining and strengthening your existing customer relationships, social media has proven to be a revolutionary platform. “Social media makes it so much easier to stay in contact with customers and keep your business top of mind,” Thomas notes, adding that its interconnected nature and “share” features makes asking for customer referrals much easier (and less uncomfortable). But, she cautions, building out your business’s social media presence should still be done with due diligence.

“I always recommend to small business owners that they start off small, with one or maybe two social media platforms, like starting a Facebook fan page and maybe a Twitter account for their business. And even before you formally set them up, I suggest they use the sites for a few months to get a sense of how they work and what people’s expectations are,” Thomas explains. During this trial period, she suggests that entrepreneurs create a list of several dozen sample Facebook posts or tweets that would be both appropriate and interesting. These will be the templates for future posts once their business social media is up and running.

“Often, I get small business owners who’ve already started with social media coming to me saying ‘I have no idea what to post,’” Thomas says. “That can lead to trouble because the whole idea of small businesses using social media is to engage with your customers, not just to tell them, ‘Buy my stuff!’” This kind of hard selling can be a turnoff, no matter what the media platform or message and it runs counter to the whole point of effective, shoestring marketing, Thomas notes. “When your target market and message are defined well, they meet the right person at the right time, and when that happens, marketing is no longer intrusive or annoying, it’s helpful, and that’s exactly what you want.”

Leadership for Small Business Owners 101

Leadership for Small Business Owners 101

Posted by SBOC Team on Jul 15, 2011 9:22:05 AM
leadership.pngThe typical leadership style of successful small business owners may be different than what some people envision. While small business owners have varying approaches to running their company, there are several best practices to motivate employees and expand business operations. What makes the difference between the 50 percent of small businesses that succeed and the 50 percent that fail within the first five years? 

The following are some leadership characteristics of successful small business owners.

  • Stay calm.  While entrepreneurs may have more of an appetite for risk and adventure than the general population, small business owners need to remain calm and collected while navigating a high-pressure environment. In fact, small business owners score 45 percent higher than CEOs at large companies when it comes to “performance under pressure,” according to a recent study from Inc. magazine.


  • Remember that you are not your company.  While many high-profile Fortune 500 CEOs have become the “face” of their companies, this often does not work as well in the small business world.  Arguably, Steve Jobs is the face of Apple, but he has an organizational infrastructure that enables him to focus on promoting Apple’s vision.  While the idea of high-profile leadership may be tempting for a small business owner, the reality is your company must extend beyond a brand based primarily on your image.
  • Use support, not intimidation to motivate. While entrepreneurs may encourage employees to work now for a payoff later, small business owners represented by the Inc. 500 score 82 percent higher than the general population in their capacity to offer support and encouragement.  They do not micromanage.  Instead, they succeed by helping employees and partners reach success and feel ownership of the company.
  • Eleanor Roosevelt quote.pngKeep the finish line in view. Similar to an Olympic athlete, a successful small business owner needs to have a clear vision of success. Remaining dedicated to achieving your company’s goals over time will ensure long-term success.
  • Find a way to be happy every day.  If the dream you had for your company made you happy, you should find a way to sustain that happiness as your company develops and grows.  There are ways to lead your company that will nurture you in deeper ways – be honest and authentic about why you started the company.  Hire employees who enjoy autonomy, are not afraid to speak up, and share your vision for the company. Tap into the meaning behind your business and the contribution you are making to your employees, customers and community. In the words of Eleanor Roosevelt:  “The future belongs to those who believe in the beauty of their dreams.”

Brought to you by Apple Capital Group, Inc.