Small businesses are more mobile today than ever. No longer are we tied to physical locations, or limited by technology in communicating with partners all around the world.

This is extremely exciting on one hand – great freedom for the business owner, larger reach, and an opportunity to work with the best and the brightest from literally around the world.

On the other hand this freedom offers up a real challenge when it comes to collaboration.

Assembling Virtual Work Teams

What is the best way to put together a work team that may not be centrally located to where you do business?  How do we build teams, and transfer necessary information across work groups? 

These are questions I think many small businesses owners are asking themselves. And the good news is that many online collaboration tools are now available to help facilitate the new way in which we do business.

What to Look for In Online Collaboration Tools

There are many choices, and numerous advantages in using an online collaboration tool. Here are the five main things you need to look for when deciding which provider is right for you.

#1 Security

Got to put this at the top of the list. If you are going to be putting a lot of your work, confidential or proprietary information, onto the web in order to collaborate you need to be sure the provider you choose is secure. Do they auto backup data?  Do you have the option for enhanced security on your pages (https)? Don’t let a breech in their security become a breech in yours.

Do your homework – Online Security Safeguarding Your Business (via3.com white paper)

#2 Flexible and Reasonably Priced User and Storage Options

You want an online collaboration solution that offers enough storage for all the documents and files you expect to be sharing across your work teams.

Also you want to be sure you can add user accounts as your work teams grow. Most providers will offer graduated pricing based on the storage you need and the number of users. Look around until you find one that looks like it will allow you to grow as your business grows without any hidden upgrade fees, or sky high pricing.

#3 A Robust Suite of Tools

The basis of online collaboration is to collaborate, right?  You’ll want to be sure your provider offers a suite of collaboration tools to fit your needs.

The basics should include:

• Tasks management
• Contact management
• File sharing and storage
• Private messaging
• Chat
• To do lists
• Message boards
• Email integration
• Calendars

The sky is the limit when it comes to features, you’ll also find that some providers offer:

• Blogging
• Polls
• Photo sharing
• RSS feeds
• Wikis
• Social media tools

Pick the one that offers the right selection of tools you’ll actually use. All the bells and whistles sound nice, but if you’re not going to use them you could be paying more for these features just to have them sit there.

#4 Simplicity of Design and Function

Using online collaboration should make your life easier, not more stressful. Look for a simple to use tool that encourages users to, well, use it!  If it is too hard to understand, too cumbersome to work with, and more trouble than the end result, you’re going to have a hard time rallying the troops to make the switch to online work groups.

#5 Offers a No Obligation Free Trial

You really don’t know what you’ll be getting from any provider until you are in there using the software day in and day out. Do not sign up for something until you’vehad a chance to test drive the product and make sure it works for you and your business. Most will offer at least a 2 week trial so you can get the feel for how the system works before committing.

What are the Choices?

The choices are vast, and you will need to do your research. Early this year Business Pundit put out a great article, The 10 Best Collaborative Web Tools for Business , which should help you in your search.

They list their top 10 providers, as well as pros and cons of each, and a comprehensive overview of the software and service. OfficeMedium (latest sponsor of this blog) was rated as the #1 choice.

If online collaboration is something you’ve considered we recommend you head over there and check them out, see if what they offer is right for you.

Final Thoughts

The world is getting smaller, and we small businesses owners are able to do business in places we could only dream of a few short years ago. Online collaboration could mean a greater reach, with more efficiency to the small business. If you’re considering getting your teams together virtually, do your homework on the options out there and try out some of the solutions that look like they could work for you. 

Photo Credit: lumaxart

 
It has been a fun week collecting entries to win our HP iPaq Glisten smart phone. This feature rich phone looks awesome, and now it’s time to give it away to one lucky reader!

To Recap

To quickly recap how our contest worked, in order to be entered each contestant had to:

1. Leave a comment on the contest post so that we know you found out about the giveaway through this article, and tell us how this phone will help improve your busy life, and/or make your more efficient. You needed to leave us your Twitter user name for part 2…

2. Follow @HP_PC on Twitter, and send the following tweet to your followers:

I just entered to win a new HP iPaq Glisten from @HP_PC and @Smallbizbee, here’s how you can enter to win too http://tiny.cc/Q3wTf

The above got you one (1) entry into the contest. You had to do both to get the one (1) entry

Then, if you wanted extra credit you could post about the contest on your website or blog, and once you let me know you made the post we gave you three (3) more entries.

The maximum number of entries from any one person was four (4).

And the Winner Is

The list of entrants was loaded into Random.org, randomized, and the person at the top of the list is our winner.

Congratulations

Our winner is Kasey Armstrong, who said that the Glisten will help simply life as a student an make things a lot easier.

Kasey, we’ll be contacting you via email to arrange shipment of your new HP iPaq Glisten.

A Big Thanks

A big thanks to HP and HP_PC  for making this giveaway happen. And also a big thanks to everyone who entered.

Until next time… 

 In this guest post Brenda Harris shares her thoughts on the pros and cons of outsourcing for the small business owner.

It’s an issue that is kicking up a storm today because of the high rate of unemployment – President Obama has on his agenda the issue of moving jobs back to the USA from India, China and other countries where they’ve been outsourced to take advantage of low costs and a capable workforce.

It’s the larger corporations that are now in the line of fire – they’re being called tax evaders who have moved much of their operations overseas so that they’re able to make huge profits. But if you take a closer look at this phenomenon called outsourcing, you’ll find that almost all businesses are guilty of it at some time or the other.

Outsourcing is Out There

For example, banks outsource debt collection to private agencies or individuals who buy the loans from them at a slightly lower rate. Telecommunication and other service-oriented companies outsource their customer service and troubleshooting operations to smaller organizations. And even the U.S. Defense Department is guilty of outsourcing auxiliary military duties to contractors in Afghanistan so that US military personnel are free to take care of “core” tasks.

Outsource Something, Not Everything

So even if you’re a small company, there’s no guarantee that you’re never going to outsource any of your operations. In fact, if you’re a small business, it makes sense to outsource, especially those tasks that are routine and not tied explicitly to the operations of your company. Most small organizations outsource their annual audit and tax preparation or their technical programming/coding process. This is because they don’t have customized needs for these operations, so they’re bound to get them cheaper from companies who are dedicated to tax preparation and offering technological solutions for fields like customer service, business intelligence, data mining and so on.

Be Selective

One aspect that most companies forget to take into consideration when they outsource is to check the difficulty of the integrating the result of the task they are delegating to other organizations with the entirety of their own operations. The task itself may not be that hard, but when the finished product is in, it may have compatibility issues with the rest of the operations of the organization.

As a simple example, if you outsource your customer service and later find that the company who takes care of this aspect for you is at the receiving end of a host of negative criticism, it is your organization that loses face and repute, not the one that you outsourced your customer service operations to.

Final Word

In general, it is not wise to outsource critical or sensitive operations – those that are essential to the existence and survival of a company, and those that require the highest level of security. Also, if you don’t manage your outsourced operations and ensure that they are compatible with your in-house operations and that quality is at the highest level, all the cost benefits that you gain through outsourcing tend to be lost in the resultant confusion.

This guest post is contributed by Brenda Harris, who writes on the topic of executive mba programs . She can be reached at her email id: brenda.harris91@gmail.com .

Want to be our next guest author?  You can! Click here for details.

Photo Credit: foundphotoslj

The following is a guest post by Sean Harper, one of the co-founders of TransFS an online comparison shopping website that helps business owners quickly and easily compare credit card processors. Here Sean shows you how to be an informed shopper when shipping from credit card processing. 

The majority of businesses now accept credit cards, and for many it is the most important financial service – the one that is most mission-critical and most expensive.  Unfortunately, the majority of business owners get a really lousy deal on their credit card processing.  According to a Federal Reserve publication (P.20) The Merchant-Acquiring Side of the Payment Card Industry: Structure, Operations and Challenges businesses with less than $1M in credit card receipts / year pay between 0.69% and 1.82% more than the wholesale (interchange) price that Visa and Mastercard pay for transactions.  Here are my 5 steps for getting a good deal on your credit card processing.

1. Be Professional and Know What you are Looking For

If you need a particular processing setup to work with your POS system or internet gateway know that in advance, you will sound like you know what you are talking about and it will screen out processors that are not expert at dealing with that situation (which costs more in both the short and long run). 

2. No Cancel Fee

Never, ever, ever agree to a cancellation fee.  The majority of processors will waive their standard cancel fee to seal a deal.  Having a cancel fee which often range from $300 to $several thousand gives the processor a terrible incentive to provide you good service and keep your fees constant.

3. Interchange Plus Pricing

- there are a number of structures for credit card processing contracts.  Interchange plus is the best because you are charged the visa/mastercard "interchange" or wholesale rate and then a predetermined, constant markup above interchange.  It’s like buying a car for a set markup over the invoice price, you know that the car dealer is selling you the car for $500 more than they bought it from the manufacturer so you know you are getting a decent deal. 

As a friend of ours who runs a software company said: "saying interchange plus is like saying – ‘I know better, so don’t try to rip me off’".  Steer away from ERR (Enhanced Recover Reduced) and Tiered pricing schemes.  This blog article has some quotes from an executive at Global Payments, a bit credit card processor, about how they make less money on interchange-plus because it is less confusing . 

4. Shop Around

Interchange plus offers are easy to compare to each other, so shop with at least 5 processors, make sure they understand that you are shopping around and they need to be competitive.

5. Don’t Rent or Lease Equipment

For the most part credit card processing equipment is quite cheap now.  Those little black terminals that you see in small retail stores usually cost $100 – $300 and a full-fledged POS system is a little more than a desktop computer, less than $2000.  If you own your own equipment there is less chance for them to sneak in extra profit by padding your lease payments and it also makes it easier to switch if something goes wrong in the relationship.

Want to be our next guest author? Click here for details…

Photo Credit: Andres Rueda

I ran across an older video from 2008’s Blogworld Expo featuring Gary Vaynerchuk. It was a short interview, only about 6 minutes, but in it he summed up what it takes to build your personal brand, stay motivated, and ultimately succeed.

Gary Vaynerchuk is known for his popular videos on Wine Library TV. Regardless of what you think of Gary, you can’t debate his success and he will be the first to tell you it didn’t happen overnight.

Tips on Personal Brand and Motivation

1) Content

It all starts here, with what you are producing or what service you are providing. You have to be good – Your content  has to be good.

2) Community

Building your community is what will take you to the next level. Interact with those around you, bring them in to what you are doing and go to where they are to interact. 

3) Hard work for Big Goals

You need to be willing to work hard enough to achieve big goals. Putting out one video, or blog post, or one comment is not going to get you to where you want to be. As Gary puts it a lot of people are “half pregnant”. Not willing to do the big work to achieve the big things.

4) Only as Good as You

We’ve talked about this here many times. Most of the time in business people are buying you, not necessarily your product or service. If you believe in yourself you can sell anything. Customers will recognize your conviction, and that translates into trust.

5) Think Legacy

Think about your legacy. It’s not all about the money. Think about your great grandchildren watching what it is you are doing. What are they going to think of what you are doing?

6) Have Pride in What You Do

With legacy in mind -  do something you are proud of, you will believe in it and you’ll be able to monetize it. Being proud of yourself, what you are doing, and what you are leaving behind will be a key motivator in achieving your goals and becoming successful.

7) Do the Hustle

The hustle is the whole game, you have to be willing to work your A$$ off in order to win.

Photo Credit:melanie_hughes

Netflix Inc., the largest U.S. mail- order movie-rental service,  reported they added 1 million subscribers last quarter.

Add that to the ~13 million subscribers they already have and you’re talking real numbers.

Only a few short years ago everyone went to the video store to get their movies. Blockbuster recently annouced their plans to close up to 960 stores nationwide by the end of 2010.

Yep, the game has changed. But what does that have to do with your business?

Does Your Business Risk Being Netflixed?

Back in Blockbuster’s heyday they were a video force to be reckoned with.

Not so long ago if you lived in or around a major city, chances were you went to a Blockbuster to get your rentals.

Then the Internet got a little quicker, and doing stuff online became easier, and then Netflix came along and said “order online – larger selection – we ship free both ways – you don’t pay late fees” and people said “hmm, for the price of two rentals at Blockbuster I can get a month subscription to Netflix and get more movies for less – I’m in”.

And so, becuase of this Blockbuster is left scrambling to catch up to the forward thinking Netflix, and is slowly going the way of the Dinosaur.

Today is Tomorrow’s Not So Long Ago

Not so long ago if you wanted shoes you went to a big box retailer, tried to find something you liked, hoped they had your size and purchased.

Then Zappos.com came along, and destroyed every barrier to buying shoes online.

“It takes to long to get something you order online” – Enter next day shipping
“Getting it quick cost to much” – Make that next day shipping free
“Well if it doesn’t fit what do I do?” – How bout you send it back to us for free too?

“Okay, but what if something goes wrong, those online places don’t give much customer support?” – Zappos is now the customer service standard by which all online retailers are held.

Not so long ago phone had cords and you kept them in your house.

Not so long ago you went inside the bank to make a withdrawal.

Not so long ago I didn’t see the need for a laptop computer.

Not so long ago…

What’s Our Point Here?

Every small business owner should be asking themselves if they are at risk of being Netflixed, or Zappo’ed.

Is the product or service you’re selling – or the way in which you’re selling it – going to be tomorrow’s “not so long ago”?

It doesn’t have to be. But you’ll need to start thinking about what the next curve is for your business. Don’t let somebody else see where your business is heading before you do.

That’s what Blockbuster did and now they’re playing catch up.
That’s what the shoe stores did and now they’re playing catch up.
That’s what the phone companies did and now they’re playing catch up.

Ketchup is a condiment, not a business model.

Photo Credit: jcestnik

The collective wisdom of our readership never ceases to amaze me.

Over the past couple weeks we’ve been asking for your Best Business Tips for 2010, and the responses did not disappoint.

And, as promised we selected one of these great tips at random, and that person won a $25 Amazon gift card courtesy of Smallbizbee.com (you’ll have to read to the end to see who won).

A big thanks to everyone who contributed – Here’s to taking your business to a new level in 2010!

What’s Your Best Business Tip for 2010?

Jason O’Neill

Website: www.pencilbugs.com

Don’t sit on your ideas because doing nothing will guarantee nothing.  Everything takes effort.

Bob Baylor

Website: www.ccca.org

Whenever possible, always try to give your prospect — and customer — more than they’re asking for. Under promise, but over-deliver; they’ll appreciate it, and keep coming back.

Trevor

Website: http://twit101.com

Don’t hesitate, but make plotted decisions.

Nick Leung

Website: http://feedbackjar.com

Not only should you listen to customer feedback, but engage them on how you could improve your products and services.

Cindy Miller

This is something simple I learned from my days with Mary Kay Cosmetics….always carry your business card with you and each time you get into conversation with anyone (at the grocery store, at a restaurant, etc.), introduce yourself and hand them your business card. Have them handy (in your pockets; not your wallet or purse). Make it your goal to hand out a minimum of five business cards a day! Oh yeah, keep record of your mileage as you are making your errand runs since you are going to be discussing business.

Jamie Glass

Website: www.artfulthinkers.com

Identify three groups, associations or networks that you can join in 2010 that have your target market decision makers as members.  Look for opportunities to join groups that your competitors wouldn’t join so that you can definitely stand out and influence them over time.

Gail Sideman

Website: www.publiside.com

Continue to communicate coherently, consistently and credibly.

Jessie Burke

Website: www.posiescafe.com

For new businesses: Make sure that there is actually a real need for your business (just because it will make all of your dreams come true is not a good enough reason… unless you have the money for that).

For existing businesses: Know that everything is renegotiable, especially in a tough economy (rent rates, vendor pricing, etc.)

Jenna

Website: www.verticalresponse.com

Fill in your small businesses pot holes. With things like social media sticking around, it is going to be more and more important that each customer’s contact with you is an experience. In order to make it an experience you need to have all your bases covered. Make sure you know what happens to your customers the second they step in the door until they no longer have a need for you if and when that happens.

Manning Hanser

Website: www.postsurgerycomfort.com

Have a good plan and stick with it. Change is bound to happen, so make sure to incorporate it into your plan. Work your plan, and plan your work!

Anita Campbell

Website: http://smallbiztrends.com

If you run an online business, stop wasting time looking at stats and surfing around.  Set goals: sales goals, profit goals, and other achievement goals.  Tell your spouse your goals, or hire a business coach and share you goals with your coach — you need someone else to hold you accountable for meeting your goals.  Give it respect as a business.

John Carroll

Website: http://trescoach.blogspot.com

Keep it simple – don’t over-complicate the work that must be done in 2010 to ensure your success.

Brian J. Smith

Website: www.scanmonkeys.com

One of the best tips is to get everything in writing before you begin a service or deliver a product of any significant size.  This includes expectations for both parties.  If everything is laid out properly up front, there are less chances of things veering off course.  Clients tend to be happier when you hold up your end.  You tend to get paid easier making it a win-win. (Oh and coming through on your promises is good for business, too).

Chris Taylor

Website: www.CustomPlanet.com

Embrace Social Media. Businesses, both with or without a web presence need to get next to the idea that sales and conversations about their brand or product are occurring whether they are present online or not. These conversations are happening millions of times per day on social media sites. Businesses that recognize this will be more successful.
Recently, we were hired to print custom t-shirts for an upcoming event for a cheer team. We posted the design to their facebook page and sold 30 more shirts, not to mention that we exposed our brand to 600 new potential customers that were fans of their facebook page. These people would have never heard about us otherwise.

Michelle Mangen

Website: http://www.thevirtualasst.com

For marketing on a “shoestring” I would highly suggest you do two things which can have a significant impact on your business 1) get a WordPress site and begin to blog 2) join the social media craze
Both of these things will take time but you will find, if done properly, can have an amazing impact on your business and bottom line

For great free software I have so many but will limit my suggestions to only two.

1. Free online accounting software www.outright.com

2. For remote screenshare sessions www.crossloop.com

There are so many great things out there that can help you and your business succeed – and the most important one is “other people’s knowledge”. So start building your relationships now!

Michelle @mmangen on Twitter

Ken Conn

Website: http://www.dataprojections.com

Postal mail your customers hand written thank you notes once a project is complete.  With customer service becoming more and more automated or outsourced it is valuable to show your customers that you are there for them and to treat them more like a partner and not just another customer.

Simon Paul Louw

Small and medium sized business entrepreneurs should not allow themselves to be bullied by some of these big conglomerates, but look at effective ways to grow their businesses. Now with this downswing of the economy world-wide they should take the opportunity and race ahead with their marketing, creating a niche market for them. Take good care of the meager finances you and don’t splash on anything that is unnecessary.

Lynn Strand-Meyer

Website: www.OutsideKnowledge.com

When face to face networking, remember to be a good listener. Too often, we spend time giving “our pitch,” and forget to listen to what the other has to say. You will be surprised what listening can do to help your understanding of what the other person might need.

Kathy Drewien

Website: http://SweetTea-StraightTalk.com

Get comfortable with business planning in the midst of chaos. Planning is good – but when you spend your time saying “going to do” and “learning to do” you are not doing. Implement. Test. Measure. Revise. Rinse. Repeat.

Ken Shenkman

Website: http://www.bulkcandystore.com

Reinvigorate yourself every so often. It’s human nature to become complacent when things are going well. Every now and then find a reason to push yourself to bring your business to the next level. For me, it was an article about how well a competitor was doing. That article forced me to push even harder and double our our online business this year.

Dave Kollasch

Website: http://greenerbilling.com

People can go to many Web sites, can use numerous similar applications … but they will remain faithful to the business that supports them and their needs.  Before launching a business, it is imperative that you assess the level to which your customers will be in control.  Some of their needs may not deliver a high return on investment (monetarily), but if those result in a flurry of positive word-of-mouth advertising, then it has paid for itself!

Kamau Jackson

Website: http://www.internetknowledgesolutions.com

Building a local search engine presence– with optimized listings, online coupons and customer reviews– will give you a competitive advantage. Especially so when you don’t limit yourself to Google alone. The tight integration with social media makes it even more powerful.

Peg Kelley:

Website: www.meetingtoolsandjewels.com

Have only the meetings you really need to have.  One of the biggest complaints of businesspeople is the time wasted in meetings.  Therefore, have fewer of them.

Ask yourself a few questions such as: 
Does the size of the group make a meeting feasible?

Is the knowledge required for any problem solving dispersed among several people?

Is the commitment of several people or groups necessary for successful implementation of the results? 
Are there likely to be conflicting points of view that need to be reconciled? 

If the answers to this are YES, then a meeting makes sense.  If not, then consider email or phone calls instead. 
Always respect the time used in a meeting and give a second and third thought to your first impulse to call a meeting. 

Merchant Account Provider

Website: www.ampyourcashflow.com

Find creative ways to trim your bottom line. This could include finding new vendors for cell phone service, Internet, web hosting companies, and merchant account providers (to name a few). A little bit of research could pay good dividends for your business.

Kristi Hines

Website: http://kristihines.com/

Be honest with potential clients.  Even if it costs you one sale, you will gain their trust.  If they recommend you to others, you will benefit with many more sales and loyal clients.

Julie

Dedicate yourself to entrepreneurial reading materials at least 1 hour a day and applying at least one insight within the next week.

Timothy Kioko

Website: https://twitter.com/CRMBrussels

2010 is the year of relationship building… segment your customer base and build a one on one relationship with the customers in the most profitable segment… do not forget the other segments…. success

Daniel Watson

Website: http://uniqueinsights.com.au

What’s your best business tip for 2010? Read all 26 business articles published at http://uniqueinsights.com.au and apply the relevant advice to the areas you know your business can improve. The hour or so invested in reading and absorbing the article will pay dividends many times over for your business.

Andy Hanselman

Website: www.andyhanselman.com

Think in 3D! That means be ‘Dramatically and Demonstrably Different’ in your chosen market places. In ever more crowded markets, and massive customer choice, remember ’same as’ sucks!

Matt | Small Biz Bee

Website: http://smallbizbee.com

Set specific goals for what you want your business to accomplish in 2010 – and make sure they’re SMART goals!

And the Winner is…

All the business tips were great, that’s why I had to pick a winner of our $25 Amazon Gift Card at Random. The winner is…Cindy Miller! Congratulations Cindy, we’ll be in touch to send you our gift of thanks for your contribution.

Your Turn

If you think a small business out there could benefit from these tips, we appreciate you sharing this post with your network.

Have a tip you want to share?  The comment section is waiting…

Headline Photo Credit: rachaelvoorhees

I don’t know about you, but I love free…especially when it comes to free tools I can use to make my business better.

Since I’m cheap a good steward of financial resources I was pretty happy to stumble across this collection of online resources, put together by Shiv, and posted on Slideshare (for free!).

Top 50 Online Tools for Startups

Your Turn

What free online resources do you use?  Share them with us in the comments below.

Photo Credit: Cappellmeister

The debate will continue in 2010 about the value of using Twitter for your business, and if you jumped on the Twitter wagon in 2009 I’m sure you have your own conclusions as to its effectiveness.

I found myself asking how valuable Twitter was as a business tool, and what I found is the main things I learned from using Twitter in 2009 were business lessons brought to light from the Twitter medium.

So if nothing else the value of Twitter for business, at least for me, was the learning that took place through the application about business in general not just business on Twitter. Here’s my top 8.

1. Communicating beats selling

On Twitter as in life communicating gets you farther than selling. Those constantly pumping their products on Twitter – we ignore. Those constantly pumping their services at the mall – we ignore. Talk to me, provide some value in the conversation – okay, now you’ve got my attention.

2. 10 is better than 10,000

Ever notice there is a core group of your followers on Twitter who really dig what you’re doing? They’re always there, retweeting your stuff, talking up your service, and gushing about your products. That’s what you’re looking for, on and off Twitter. Those people make your business better.  I’ll take the 10 people obsessed (we’re talking tattoos of my logo on their chest obsessed) about what I do, than 10,000 casual “fans” any day. 

3. Relationships take time

No brainer, but often neglected. Want to get the most of out your business?  Just like on Twitter, relationships take time…but

4. They are worth it

If you’re creating those obsessed fans we talked about above, the weeks, months, and years you take to create the relationship will pay you back 10 fold.

5. No magic bullet

If you jumped on Twitter thinking it was going to solve all your sales problems you’re probably disappointed today. There really is no magic bullet, nothing is going to turn your business around overnight or take it to the next level other than hard work.

6. Marketing is the sum of its parts

Much like the “magic bullet”, no one piece of marketing or advertising is going to be “the one”. Some of your campaigns may work better than others, but your marketing is the sum of all its parts. This includes your advertisements, your service, and your relationship with your customers. 

7. Unfollowing – not just for Twitter

Customers are unfollowing you all the time if you don’t meet their needs. On Twitter we can see this because our follower count goes down, in the real world it’s less visible. What are you doing to make sure you’re not being unfollowed?

8. First it’s about you, then it’s about them

Why someone followed you on Twitter is probably about you, why they continue to follow comes down to them.

As a small business owner you make or break your business. We’ve talked about how most people are buying you, not necessarily your product or service. At first you attract the customers…but then the dynamic shifts… your business becomes about them. Your success or failure lies in their hands.

Your Turn

What say you?  Any Twitter reflections from your experience?  Put’em in the comments below…

Photo Credit: magerleagues

It seems like a lifetime ago that I started my first business, maybe that’s because it is.  I learned a lot of lessons from that first venture, most about what not to do.

My First Business

The year was 1984 and I was 7 years old. I was the sole proprietor of a newspaper distribution company, call it old media, but newspapers were my game.

This was back in old days, before the internet, when people would get their news by reading words written on actual pages – don’t laugh, but many people would actually pay to get their news this way, including my parents.

At 7 I knew enough to know that I wanted some money, I was sure if I could get my hands on some cash I’d be out on my own in a couple years living the good life.

I also knew that these things called “papers” would stack up for a couple weeks before my parents finally took them to the trash.

An Idea is Born

I thought if my parents were reading these papers, and paying for them, the neighbors probably were reading them too, but maybe not all the neighbors.

I asked my mom how much a paper cost, then asked her if I could have the old ones, she said ”you can have the old ones, but don’t go leavin’em laying around the house!”

My business is born!  I would go door to door with the old papers my parents had and see if I could sell them for less than a new paper to any of the neighbors.

I thought maybe they didn’t get the paper so would happily pay for mine, or possibly they missed an issue and would want to catch up. If they didn’t have this thing called a “subscription”, heck maybe I could sell them a paper everyday.

My distribution mechanism was simple. I loaded up the papers in a duffel bag and headed out, knocking on every door within the neighborhood within my limits.

At that time I had boundaries set by my parents that I wasn’t supposed to cross. I was the paper czar of nearly 5 square blocks – I was in business!

5 Lessons Learned from My First Business

So that is how I spent everyday after school the two weeks I was in business. Knocking on doors trying to sell yesterday’s paper (or sometimes yester-weeks paper).

As I think about it now, it seems silly. As adults, we all can spot the flaws in my thinking, and even though I wouldn’t try something similar today – I made money!

Being able to make money selling old news taught me a lot about business, here’s five things I learned:

Lesson #1: When You’re in Business People Buy You as Much as Your Product

I was a moderately cute kid, with tons of ambition, and nothing but confidence in my paper business. When I talked to people at their door step they felt that. When they bought a paper from me, they were buying me, not the news that happened 6 days ago.

This lesson is as applicable today as it was then. Although we may not all be fresh faced kids anymore, people will sense when you are passionate, confident, and believe in what you are doing – and that’s what they’ll be buying a good portion of the time.

Lesson #2: Great Entrepreneurs Think on Their Feet

I learned quickly that in order to sell these papers, that weren’t as desirable as I thought they’d be, I better have answers to their questions – which mean’t thinking on my feet.

I remember on that first day being asked, “Why would I want to buy yesterdays paper, that stuff’s already happened”…I replied with “Well, today’s paper is filled with stuff that already happened too, but mine’s cheaper.” He bought a paper. My mom said I was being a smart aleck, I politely disagreed.

If you want to be a great entrepreneur you need the ability to think quickly on your feet. Responding to demands, making quick (good) decisions, and dealing with the numerous curveballs are essential to success.

Lesson #3: Competing on Price Alone is a Tough Game

My only selling point, and the only way I could sell even one of the old papers was to give discounts. At the time I thought this was shrewd, now I think it’s dangerous.

I had no competition in my neighborhood, and probably never would have selling old news, but what if another 7 year old (or a super bright 6 year old) had of come up with the same idea?  We’re both knocking on doors, how do we compete with each other?  Most likely price, which means it wouldn’t be too long until the pennies I was making didn’t justify the trouble, and I’d have a hard time making it up on volume.

Same goes later in life. You may be the only game in town now, but what happens when you’re not. Will you be competing on price alone, or do you bring something to the table your competitors don’t?

Lesson #4: Think About Scale Early in the Startup

I gave this absolutely no thought. I just wanted to sell some papers, and beat myself ragged going door to door I guess. If this venture had been a huge success I would have had no way to meet the demand – shoot, my parents only let me go about 5 square blocks, I would have been sunk right there.

The lesson here is that early on begin to think about how you may scale up if you’re business becomes successful. How will you reach more people?  Who will do the additional work? Can you scale? If you charge per hour, there are only so many in a day – how do you get more revenue without raising your price? If you sell a physical item, how many can you get and how can you distribute to more people? Just ask yourself these questions early, and prepare for growth going in.

Lesson#5: It’s Hard to Overcome a Flawed Business Model

We can all see the problems with my business model. Yeah, I sold some papers, but long term the flaws were going to bring my business down. If you’re not going into a venture on solid business foundations, you’re house is going to start leaning, and eventually fall over.

The Long Defunct Newspaper Distribution Company

I’ve been out of the newspaper distribution business now 25 years, but some of the lessons I learned back then are still with me today.

The real lesson in all of this is it doesn’t matter if you sell newspapers when you’re 7, lemonade when you are 10, or run a multimillion dollar company when you’re 40, the fundamentals of business don’t change.

Keep moving forward while learning from the past and you should be okay. And for anybody thinking about it, I can’t suggest you getting into the newspaper distribution business!

Photo Credit: Meanest Indian

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