Home Based Business Success

As a home business owner the worst case scenario for you is that the design of your site keeps your site from ranking highly in the search engines. In that frightening scenario, you won’t even have the chance to market to prospective customers. A better problem to have is not converting any of your visitors. In that case, a bit of redesign can turn those visitors into buyers or subscribers.

Here are some business website design mistakes you must avoid to help ensure success of your home based business.

Small Business Website Design Mistake #1
Too busy and cluttered, with no clear message. People on the web have very limited attention spans. You need to make sure they get your message instantly. If they can’t tell what your site is all about, you’re doomed. You need what’s known as a unique selling proposition, and you need to effectively communicate it almost instantly to your site’s visitors. If you can’t show your visitors why they should take the action you want them to in about 5 seconds, and compel them to do so, you’ve lost the battle.

Lay out your site in such a way that not only can they get the message quickly, but can also go right down the path you want them to without distractions. Take advantage of web surfers notoriously short attention spans by using lists with bold headings and other design features that are easy to read quickly.

Small Business Website Design Mistake #2
Having sound start automatically when a visitor reaches your site is, in most cases, a huge site design mistake. A large percentage of web users are surfing the Internet at work. Your audio blaring from their computer’s speakers can get them in trouble. That’s not smart. According to the 2006 Websense web@work survey 93% of workers report surfing the Internet at work, with a large portion, 24% of that time being spent for visiting non-work related sites. Furthermore, the 2006 edition of the same survey showed that 46% of employees report fearing for their jobs due to their web surfing.

From the examination of my server logs I can tell that the number of people who visit my sites and blogs is much greater during normal work hours than on weekends or in the middle of the night or early morning hours. This is true for all my sites and blogs, no matter the subject matter, so I would imagine it’s much the same for most websites.

If your visitors are visiting your site while at work, the last thing you want to do is get them in trouble for it. Their at-work surfing may not be a good thing for their employer, but it is a great thing for you. You need to thank them for their visit, not get them fired for it. Having what you think is great music, or more recently, a trendy message from you, start blaring from their speakers the moment they land is a sure way to make that happen.

Small Business Website Design Mistake #3
Another common business website design mistake is failing to give your visitors an easy way to give you their contact information and permission to contact them. The most common way to do this is by having them sign up for a newsletter or exclusive subscriber content on your site. It is important to comply with the FTC’s 2003 CAN-SPAM act, so you have to get approval before you send emails to people, or face severe criminal penalties. From a business perspective, you want people to want to subscribe and feel they are getting value for their subscription.

Why is so important to get your visitor’s contact information? (Especially as you’ll notice there’s no way to do that here) Because, an oft repeated bit of marketing wisdom states that it takes 7 contacts for the average customer to buy something from you, weather that’s on-line or off. If you’re providing your subscribers with solid value, you’ll have repeated opportunities to sell them things now, and for years to come.

You’ll be doing something that’s the hallmark of every successful business, building a relationship. By so doing, you can create a group of loyal, repeat customers. It is much more difficult and expensive to obtain a customer than it is to retain one. The longer you keep a customer, the higher the return on your marketing expenditures. Building a good list is one of the most powerful ways to keep your customers, and more importantly, keep them buying from you.

 
Small Business Website Design Mistake #4
Not offering any content, and more to the point, not offering any content that has value to your visitors, and is regularly updated. This is important for three reasons.

1 - The first is to build value for your visitors, which will keep them coming back.

2 - The second reason to offer valuable and regularly updated content is that it will help you rank highly in the search engines. Google and Yahoo look to your sites content and the frequency with which it updates as one of the major determinants of your site’s ranking. The content should be built around the keywords that you hope to be listed for.

            3 – The third reason to offer great content is that it will get you that one thing that can                       build your business for free; referrals. Positive word of mouth is the single best thing                   that a business owner can get besides huge profits, and usually you can generate                       those profits if your get positive referrals from your visitors.

These are some of the small business website design mistakes to avoid when you’re building or redesigning your website. A great website can, and often is, the difference between record sales numbers and going back to your real job. What’s it going to be?

Posted by HomeBusBlog at 01:44 PM | Permalink | TrackBacks (2)

As a business owner you may have noticed some of the talent spewing forth from our public school systems is sometimes somewhat less than you find desirable. In fact time and again, business owners, when rattling off a litany of problems they face in the course of operating their businesses, place finding high quality employees near the top of the list. Many place the blame squarely on the shoulders of our public school systems, and point to the quality of education received in other parts of the world as an example of how we need to prepare future employees in this country. Witness the explosion of H1B visas to supply American tech industries with the staff they need to be successful (getting high quality employees on the cheap notwithstanding).

Well, if the some of the concepts being promoted in some of the schools in our country are an example of what educators deem necessary to properly prepare our students for the rigors of life in the workplace, things may well get worse before they get better. I speak specifically of a concept embraced at one of my children’s schools in Washington State.

This one is known as “inventive spelling”. Just what is inventive spelling, you may well ask? I’m glad you did. Inventive spelling is sadly all to close to exactly what it sound like; letting our children, in the very beginning of their educational careers, spell words in inventive, new ways. Why might our schools, who are supposed to be instructing our kids in the finer points of the English language, allow such a practice?

Because, and Rush Limbaugh will absolutely love this one, being told they are spelling some of their words incorrectly is bad for their self esteem. No, you really heard me correctly. From the same people that brought you noncompetitive sports, we now have noncompetitive academics.

For example, although Webster’s lists the proper spelling of the word that means delighted, pleased or glad as “happy”, the kids in Washington schools may actually prefer to spell it “hape”, because well, it looks like you could maybe spell it that way. After all, it kind of sounds that way, if  you use a long e. We learned phonetic spelling in kindergarten and 1^st grade, now they get to take it one step further with inventive spelling. The feeling of those in the halls of knowledge is that, and you’ll just love this, kid’s will all have access to spell check at some point anyway. I am not making this up, really.

American inventiveness, when used to develop interchangeable parts, the light bulb, the assembly line or transistor is exactly what we need more of. However, when it is applied to the fresh, young minds in such a fashion as to allow them to actually learn things incorrectly, because we don’t want their self esteem to suffer, that’s just plain wrong. I’m sure this is all supported by reams of study data from the finest minds in academia, but is it any wonder that business owners feel that they’d rather hire their computer engineering staff from India than Indiana? What’s next? 2+2= oh, whatever you’d like, as long as you feel good about it. I think it’s finally time to stop the madness.

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One big mistake made by many entrepreneurs when they’re first getting started is treating their business like a hobby, instead of like a real business. If you want to ensure maximum profitability, long terms success and legally facing the lowest possible tax obligations, you need to make sure you’re structured like a real business, even if you’re a one person show operating out of your spare bedroom. You need a real business structure, separate bank accounts, a support team of professionals for taxes and accounting, and a comprehensive business plan. Making a mistake when initially setting up your business can be a real pain, not to mention costly, to fix down the road.

It is a good idea to protect yourself and your business by setting up your business as a separate legal entity, such as a corporation. This provides some measure of protections against lawsuits, but contrary to popular belief, doesn’t provide complete immunity, especially for small businesses, which tend to be viewed as “closely held” corporations by the law.

In such cases, it can be a relatively easy matter for a good attorney to do what’s called “piercing the corporate veil” and getting access to your assets. That’s why it’s vital to use a good attorney and accountant to determine what the proper business structure is for your business. The business structure you choose will depend upon many things, such as your individual goals, lifestyle, the type of business, where you do business, and your exit strategy.

Make sure you set up separate bank accounts. If you’re going to be accepting credit cards using a merchant account, you’ll have to do this anyway. It’s also needed so you can take checks in the company name. You should have a personal banker that knows your business well. They can be invaluable when it comes to structuring your finances, keeping a smooth cash flow, and securing additional financing. A separate business bank account will make managing your day to day finances much easier.

In small businesses, cash is king, so proper cash management can be the difference between success and failure. If you have high overhead, you can be profitable on paper and still go out of business due to poor cash management. This scenario is far more prevalent than most people would believe. The estimates vary, but a large percentage of businesses that go bankrupt were actually profitable on paper. This illustrates why it is so important to do all that you can to properly manage your cash flow. Such diligence will also make sure you’re in a better position to advantage of vendor specials and discounts when they present themselves. These can do a great job at decreasing your cost of goods sold.

So, weather you’re just getting your home based business started, or if you’ve been chugging away for a while now, treat your business as just that, a business. You’ll make more money, be under less stress, and have more free time, and isn’t that what it’s all about?

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Business funding is broken into two broad categories; debt or equity. A third category, grants, could be added as well. Debt financing is borrowing, or going into debt for the funds or assets. Equity financing is trading a part of the ownership, or equity in your business in exchange for the funds or assets. Which route you decide to take will be determined by many things, not the least of which is your personality. Many business decisions, especially at the home and small business level are dictated in large part by the personality of the owner, and where to get money is certainly no different. In a perfect world the decision on how to finance your small business would be made purely on an analytical level, but that's rarely the case.

From a business standpoint, which financing route makes the most sense? Which will enable your business to get the capital it needs at the lowest cost while retaining the highest level of flexibility? In many cases the business owner will self finance, or bootstrap to get the company off the ground. In bootstrap financing, additional capital is generated by business operations and no additional capital is required. The advantage with this funding approach is that the business has no debt and 100% of the equity stays with the original ownership group. The disadvantage with bootstrap financing is that there  will probably be insufficient funds to maximize the  growth potential of the business. Some business owners are willing to make this trade off in order to retain 100% ownership and control. Others would rather maximize profit potential and so will take on additional sources of funds.

Often the decision on which direction to take is dictated by the type of business as well as the desires of the ownership group, weather that group is a single owner, a family or some other mix of individuals. For example, some business are more capital intensive than others. If you are running a small consulting or marketing business out of your home, you may not need too much additional capital. On the other hand, you may be running a construction, small manufacturing company, or a business such as a bakery, in which case you'll likely need additional funds for capital assets, employees and marketing.

It is possible to bootstrap a very large company, and I personally know a couple who grew a construction business that they started right out of college that they later sold for $200 million. They bootstrapped the entire thing, never taking on any debt, over the course of almost 30 years. That is obviously the exception, but it does illustrate the possibilities of bootstrap funding. Weather or not they could have grown the business larger, faster, or both by getting additional financing is a question that will never be answered.

If you either don't want to wait 30 years, require additional funds for capital expansion, or are experiencing operational cash flow problems due to growth in your business you'll have to make the choice on how to finance.

Debt Financing – Credit Cards -
Probably the most common source of small business financing, is debt financing in the form of credit cards. While easy to get and flexible, there are disadvantages to credit cards as a source of business funds. The primary disadvantage is that, as unsecured credit, they tend to be expensive. Another disadvantage is that, depending on the level of funding required, it may not be possible to get sufficient funds by going this route. If you run a landscaping business and you'd like to outfit a few additional crews, a credit card is probably not the best solution. The advantage is that it is fairly easy to get credit card(s) in the business name, even if the owner will have to personally guarantee the card. Credit cards definitely have their place in business, however. In many cases, credit cards are perfect for financing some day to day operations such as fuel, web hosting, Internet advertising, and so on.

Debt Financing – Small Business Lines of Credit -
This is another flexible financing alternative for small or home businesses. The advantage to a line of credit over a credit over a credit is that it is usually less expensive and has a higher limit. It is not uncommon to get small business line of credit, especially for a business with a solid track record, of $250,000 or higher. This is sufficient capital to fund expansions and smooth the cash flow issues that can be created by a growing  and/or seasonal businesses.

Debt Financing – Small Business Loan
The most common small business loan is a loan that is guaranteed through the Small Business Administration. Think of it as a student loan for your business. As a student loan is guaranteed by, but not taken from, a government agency, so is an SBA loan. You will receive your funding through a conventional lending institution, such as bank. Because the government guarantees they will repay the loan if you default, the interest rate is very favorable.

You may think that because the government is guaranteeing the loan you won't need collateral, but you'd be wrong. You'll typically need security for the loan, which in most cases turns out to be the deed of trust to the borrowers house. Default on the loan and the government owns your home. I speak on this from personal experience. I was a principal in a firm that had a $250,000 SBA loan. We foolishly entrusted the repayment of the loan to an employee that turned out to be inadequately supervised. Needless to say, that employee didn't have the same priorities as those in the ownership group who had their homes as collateral for the SBA loan. In short we had to come up with $92,000 in cash in 30 days to repay the balance of the loan. We did so, but it was a frightening time. In short, don't mess with the government.

If your business is advanced to the point where you have sufficient assets and revenue, you may be able to use part of your business for security on your SBA loan. In the case of using assets for security, you'll be required to complete a UCC1 form. This form gives ownership of the pledged assets to the lender until such time as the terms of the financing agreement are fulfilled. As a side note, you should be using UCC1s as well if you extend credit to your customers for product you've sold them. You can use the funding for many things, such as plant and equipment, real estate, inventory, leasehold improvements, and additional staffing.

You can also get a non-SBA business loan, but usually the interest rate will be higher and the loan will be more difficult to get unless you have truly impeccable credit or a healthy amount of security. A loan can be a great source of funds of your business. A loan can allow your business to grow and reach the goals you've set without giving away ownership, which may be just as you'd like.

Debt Financing – Vendor Financing-
This is an extremely common source of funding for small and home businesses. It is normal for distributors, manufacturers and other vendors to extend credit terms to businesses to finance their inventory or services. You will usually receive some sort of incentive to pay early, or with cash. The terms will be stated in terms such as 2/10, n/30. This simply means that the invoice net is due in 30 days, and you'll get a 2% discount for paying tit within 10 days. The advantage of vendor financing is that it is usually free and easy to get. The disadvantage is that it's very short term, and can only be used for financing from the specific vendor.

Equity Financing -
Equity financing is a very common source of funds for small and home businesses. The normal progression of equity financing, even in businesses that are now very large, begins with what's known as the “friends and family” round. These investors will receive some level of ownership in the business for their investment. A round of financing is simply an instance of acquiring capital. The next round is typically used by businesses that will be growing to the point where ownership in the business is attractive to investors. The second round is usually made by small investors or investor  groups based on current and expected future revenue. Sometimes this is referred to as the “angel” round because the investors are termed angel investors.

The third round, if your business gets that far, (if it is a home business, it won't be any more), is the series 'A' round. This is usually funded by private equity and VC firms. They'll look at your business with a fine toothed comb during a process known as due diligence. These rounds are usually in the multi-million dollar range and will be based on many things, including your business plan, current and expected future earnings, business model, the expected market for your products and services, and more. They will receive series A preferred stock for their infusion of capital.

You may use any, all, or none of these sources of small business funding. One thing's for sure though, if you provide no funding, you'll probably get no return.

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One of the advantages to operating on the Internet is that things happen much faster than in the off-line world. That gives you the ability to test everything you do for effectiveness and see the results fairly quickly. You can then switch your resources to support the most effective strategy. This  is true for virtually all your marketing efforts, including ad copy, headlines, the type of advertising you’re using, the products/services you are selling, your target market, and any geographic or temporal targeting you may be using.

Selling online gives you the ability to what is referred to as split testing. Split testing is the technique of changing one variable in your marketing efforts and measuring against a metric. For example, you may change the headline in an ad, and then run both variations of the ad at the same time, in an equal split (hence the term “split testing”) and measuring the metric that you’re testing for. The metric may be anything that you are trying to increase, such as ad response, sales, conversion ratio, and so on.

In the world of Internet marketing you are able to quickly determine the efficacy of seemingly small changes in your marketing efforts and then use the more effective marketing methods. You can effect significant changes in your total sales rather quickly by doing so. The great thing is that you can, and should, test virtually all aspects of your marketing campaigns, and you have the ability to do so in most cases.

If you are using pay per click advertising you can very quickly determine differences in ad wording, headlines, and geographic targeting by running simultaneous ad campaigns. The variable you’re testing is the only difference. For example, you can test two different headlines against each other in Google Adwords by running two different ad headline variations and checking for click-through rates. You should also use Google’s feature that lets you check conversion ratio of the ads. This is the number of clicks that actually result in sales.

You may find that although one headline resulted in a higher clickthrough rate, those visitors were more interested in looking than buying so the ultimate conversion rate was lower. I’ve seen fairly large differences in clickthrough percentage from seemingly small changes in PPC headlines. I’ve also seen the headline have a dramatic effect on the conversion ratio.

When testing ads, test two ads against each other. Use the winning ad or headline, then test the winner against another variation. Keep detailed records of the testing results. In a short amount of time you can determine what is the most effective. If, for example, your clickthrough on a PPC campaign went from 1.8% to 2.2% by effecting a one word change in the headline (a result I’ve personal seen), you just increased your clickthrough rate by 22%.All else being equal, that will probably also increase your sales by a similar amount.

If you’re using PPC ad campaigns, something else that you have to test, or risk losing your shirt, is the conversion rate of all your keywords. Some are just not profitable, and you need to identify which ones are and which ones are costing you money. You can then eliminate the unprofitable keywords from your campaigns, and use those funds for profitable keywords.

If you're an affiliate marketer, you should extend your testing procedure to the products you sell. In nearly every case, you'll find that some vendor's programs are better than others. Some will convert your traffic to sales at a higher percentage, and some will give you few returns, while others will generate many more. You should check your conversion rates between your vendors and your EPC (earnings per 1,000 clicks). Some vendors will convert at a lower rate, but more than make up for it by offering you a higher payout amount. In time you will develop a solid portfolio of vendors that offer high EPC and low return rates, but you must test and examine the results on a regular basis in order to get there. 

It only takes a few percentage points one way or the other to make a significant difference in the success or failure in your marketing efforts. In many cases, testing will yield results that are much greater than a few percentage points. You can double or triple your sales, but you must use one of the greatest advantages of Internet marketing, the ability to split test everything and quickly measure the results. A solid testing procedure will give your business a healthy increase in ROI and sales, and make your smile even larger.

Posted by HomeBusBlog at 01:41 PM | Permalink | TrackBacks (1)

In may last post I discussed some great, but more traditional ways to increase online traffic. In the last year or two, there has been a great furor over so called “Web 2.0” and how it can be used to greatly increase web traffic as well. Web 2.0 refers to the growing number of extremely popular user generated content sites, such as facebook, youtube, digg, reddit, del.icio.us, and myspace. In addition web 2.0 can include other businesses that could only exist in the online space, such as eBay, Google, and Yahoo.

Web 2.0 offers some amazing traffic generation possibilities and can generate tremendous interest around a site, blog post or on-line article in a very short time. In the past you’d have 2 choices to get targeted raffic to your site;

1)                          Wait for your page to get indexed, get links to build traffic and page rank and let the organic traffic come in. In time you could build up huge amounts of nicely targeted traffic this way, but it took time, sometimes months or years.

2)                          Use PPC or other forms of on-line advertising to send traffic to your site. This method is very effective, but can also be very expensive. The number of marketers that have lost copious amounts of money using PPC advertising is large and distinguished.

 Web 2.0 offers a way to circumvent the old traffic generation methods and get a huge amount of traffic to your site in hours or minutes, instead of months or years. The best part for marketers and business owners is that it is free. You won’t have that huge drain on  your marketing budget that PPC advertising can bring. Obviously free targeted traffic mean ROI is infinite.

If you are setting up a site these days, one of your first orders of business after it goes live and content is built out to the point where the site offers value to the visitor, is to get exposure on some of the web 2.0 sites, such as digg, del.icio.us, or stumbleupon. If visitors feel your content is valuable they’ll vote to drive it to the front or top of the appropriate site. That will create a (cliché alert) veritable traffic explosion for your site and a big smile for you. In future posts I’ll go into greater depth on just how to use these web 2.0 sites to drive more traffic to yours.

<a href="http://technorati.com/claim/x5scmv924" rel="me">Technorati Profile</a> 

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That being said, just how do you get more targeted traffic? If you are on a budget you may be more interested in free methods to drive more traffic to your site. After you are more successful, you may want to investigate paid methods. On the other hand, you may well be successful enough with free traffic sources.

1)      Get more links in
Traffic to your site will come from two sources; search engine results pages (SERPs) and links on other sites back to yours. In fact, those links back to your site do far more than generate traffic to your site. They play a primary role in garnering better search engine rankings as well. That being the case, a solid linking strategy is one of the single best things you can do. You’ll be rewarded with robust traffic from both the links themselves and the search engine results they help generate.

Here are some great ways you can get links to your site.

A)    Ask other site owners – this isn’t as easy as when the web was young. There is more crap out there today and site owners are less likely to give you a link just for the asking. If you do ask for a link, send them the preformatted html code. Not only will it be easier for them, but it will allow you to achieve specific search engine benefits, as I discuss in greater detail below. Be professional when you ask. Remember they’re established, and you’re not.

B)     Write articles – This is a powerful strategy that can get you many links from authority sites for nothing but some time spent writing. You want original articles, either ones you’ve written yourself, or those you paid someone else to write for you and you retain the exclusive rights to. You can submit these to article directories, such as ezinearticles.com, articledashboard.com and goarticles.com.

Other site owners and ezine publishers that want content can then syndicate the articles. You’re given a resource box where you can put information about your company, yourself or any other information that may entice people to visit your site. You get to include the all important link back to your site to facilitate the whole thing. Not only will the article give you a link, but it will help establish you as an expert in your field, giving people yet another reason to visit your site.

    C)    Submit your site to directories, such as Yahoo and the Open Directory Project (DMOZ.org). These will get you traffic on their own, and are viewed as authority sites by the search engines. Always remember, you want to link with a dual purpose in mind; search engine juice and the traffic generated by the links themselves.

    D)    Blogging. A blog can be a great way to get links. One of my blogs has over 1,400 links in to it from other blogs, and that doesn’t count websites linking to it. Many bloggers have far more than that. It is kind of like the good old days when the web was young…. I digress. You can use a blog as a great marketing tool, to showcase your products or services or pass along information related to your business. It helps you build a community, something that’s extremely valuable. After all, business is about relationships, and a blog is a great relationship builder. You can build some long lasting relationships and get some great links to your main site at the same time.
 

2)      Make the link structure correct

You want as many links in to your site as possible, but you can’t just go getting links willy nilly from anywhere. The search engines, and Google in particular, look for two main things when evaluating how the link will affect your site’s ranking; the authority of the page your link comes from, and the link’s anchor text. The anchor text is the text that is actually displayed that you click on in the link. It’s essential that the keywords that you’re trying to get ranked for are in the anchor text. Don’t just use the name of your site as the anchor text. That’s a terrible waste. Who cares if your site is well ranked for it’s own name?
 

For example, if you have a site on digital camera accessories, you don’t want to have the links that point to your site just be www.yoursite.com. You’ll get minimal benefit from that. Instead link to the page with the terms that you want to found for. In this case, you might have a page on SD memory cards. You’d like people who are looking for SD cards to buy them from you, right? In most cases, the more specific, the better. As an example you’d make the link so that the anchor text would read “1MB SD memory cards”.

You want to do a little keyword research first to find our exactly which phrases people are actually searching for. Wordtracker or Google’s keyword tool are great for this. You can then match your anchor text to the exact search terms people are typing into the search engines. That’s not just good for you from a search engine perspective. It gives value to your visitors, because you are actually giving them exactly what they’re searching for.

You should do everything with an eye toward value for your website’s visitors. The more valuable you make their visit, the more likely they are to make visiting your site a regular occurrence and tell others about it. If they own a website, they may even give you a link. The more value you can provide to your visitors, the easier it will be for you to get links from complementary sites, establish affiliate relationships, and form a long term bond with your visitors. Ask any marketing expert; it’s much easier to retain visitors and customers than it is to generate new ones.

Remember, give it time. In a few months or so you can start to see the fruits of you labor pay off. Stick with it, it will pay off. Persistence was the missing ingredient in many failed businesses.

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Starting a home based business is an exciting, yet scary time. You're staring opportunity right in the face, but at the same time, looking at changing your whole life paradigm. For many people that's just not an easy thing to do. If you make the leap you'll get hit with setbacks, frustrations and delays, but the rewards can be so well worth it. Just the excitement of making your first sale, landing your first job or signing your first contract is a rush that, if you're entraprenuerally minded, you'll get nowhere else.

There are many things you must do before you start your business. The most important being your business plan. The plan will lay out all aspects of your business, fmor your sources of financing, your product/service, your marketing strategy, growth plans, resource requirements, and (something often overlooked) your exit strategy. If you are going to seek outside financing, you simply must have a business plan, and if you are going to start a real business, it's is one of the keys to success. Without a formal, written, business plan you are just creating a hobby that may take all of your time, yet make little money. If you do make money, you'll have no plans on how to use it to grow your business, and better yet, how to make even more.

In future posts I'll cover creating business and marketing plans, how to pick the perfect product or service for your business, plus tips and trick for your success. Most importantly, I'll talk about ideas and insight that can make you money, and isn't that one of the real reasons you want to start your home business in the first place? From Internet marketing to running a sales or service business out of your house, you'll find all sorts of gems to help you on the road to business success.

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