Monday, September 21, 2015

How to handle marketing and advertising for your small business

Unless you are a marketing or advertising expert, one of the most difficult and expensive issues for a small business owner is how to handle those tasks.  This is a crucial issue for a start up and one a potential business owner must figure out before opening a new business.

No matter how great your product(s) or service(s) are, your business won't be successful if people don't know you exist which is why marketing and advertising is so important for a start up.  If your new business is service based and your overhead and personal needs are minimal, then you may be able to get away with organic growth and word-of-mouth advertising.  For everyone else, you need to have a solid marketing plan which should involve some expert advice.

The marketing plan is part of most business plans and the more detailed, the better.  Who is your target market?  How will you find them?  How will they find you?  Will you have a storefront?  Does the location fit your target market?  Do you need a ecommerce website?  Who will develop it for you?  What kind of promotional materials do you need?  Have you developed a comprehensive brand?  These are all questions a start up needs to answer and hiring an expert to guide you is recommended so you don't make mistakes.

Once you have your plan developed, you will want to track the results.  You should be asking every customer/client/prospect how they found you and track this information on a spreadsheet or database or CRM program so you know what is working and what is not.  Marketing and advertising will always require some trial and errors but tracking results will eliminate a repeat of the errors.

Starting up a new business is usually expensive and many entrepreneurs try to reduce costs by doing it themselves.  Skimping on advertising and marketing can be a mistake unless you have the working capital and time to grow your new business slowly.  Get some bids from your marketing consultants and make sure you have a good fit with whoever you select.

Like most of our previous posts regarding how to successfully launch a small business, the key to successful advertising and marketing is planning and tracking.  A successful entrepreneur plans carefully, tracks the numbers, data, metrics and adapts accordingly.  Even though many people dislike this part of running a small business, it is a key to success.

Friday, September 4, 2015

Should you hire friends and family to work in your small business?

Many small business people turn to friends and family to fill their employment openings.  This is usually a bad idea.  Many people find it difficult to act as boss to friends and family and many friends and family find it difficult to act as employee to someone they are friendly with.  This often ends a friendship and puts strains on a family relationship.

The main difficulties people experience with hiring friends and family is separating the personal relationship with the professional.  Your sister may not look at you and see her boss, she sees the big sister who always bossed her around. Your friend is used to being an equal and you may find it difficult to act as boss.  If you have other employees, a friend or family member may undermine your authority.

If you do decide to hire friends and family, consider the skills you need for the position you are filling and select the person with the best fit.  Using a family member who offers free labor is not a good idea if they lack the skills needed to be successful.  Putting together a job description with skills required for the position is a great way to determine if your friend or family member has the necessary skills.  Having a written contract and using a three month trial employment period is a good way to make the relationship formal.  Have everyone fill out the normal new hire forms, whether they are friends, family or a regular employee.  Understand that if you have other employees and you offer them paid holidays or sick leave or paid vacations, then you must offer this to friends and family as well.  You must not offer your friend or family members more than what you are offering regular employees either.

There are tax benefits to employing family members.  If the business is a sole proprietorship or a partnership where both partners are spouses, then children, spouses or parents are not subject to FUTA (federal unemployment tax).  Children under the age of 18 are not subject to FICA taxes (social security and medicare).  All are still subject to income tax withholding.  On a federal level, children of small business owners are not subject to as many limitations as to the number of hours and days they can work.  You should check with your state regulations as they may differ.

Consider all the pros and cons carefully before hiring a family member or friend to work for your small business.  While you may think they will have greater loyalty to you and our business than a stranger would, the personal relationships may complicate the work relationship to an extent it is crippling.