Monthly Archive for October, 2010

Serving customers online is not an option, it’s an imperative

Continuing the series on small business responses to poll questions on our e-newsletter and website, recently we asked this question about e-commerce (aka online sales, aka Internet sales): How much of your small business’ annual revenue comes from online sales? Here is what our respondents said:

·  Five percent said all revenue came from e-commerce.

·  Fourteen percent said more than half of their sales came from the Internet.

·  A little more than half said e-commerce represented less than 50% of total sales.

·  One fourth said they had no online sales at all.

E-commerce has been around for a big chunk of the commercial Internet age, which began in 1995 when unencumbered access to the Internet was fully allowed. But in terms of historical marketplace practices, e-commerce is just a baby.  So I’m actually quite pleased with the mix of responses we received, indicating that 75% of small businesses are generating some e-commerce revenue.  But over the next five years, there will be significant increased pressure to generate online sales.

According to the research firm, Forrester, online sales will reach $248.7 billion in the next five years, accounting for 8 percent of total U.S. retail sales by 2014. But the next statistic may be more important (read: ominous) for small businesses.

Forrester also predicts that by 2014, over half of all retail sales will be influenced by online product and company research before customers make a purchase.  The reason this stat is so significant is because of another piece of research that produced this astonishing number: Half of small businesses DO NOT have a website.

Regardless of size or industry, no business can expect to be successful in the future without a web presence. Even if you don’t sell online, you MUST be available online so prospects can find you the way people are looking today. Here are two words that make having a website even more of an
imperative: local search.

Local search is increasingly replacing the phone book or dialing 411. Even when customers don’t expect a business to have e-commerce capability, like a restaurant or dry cleaners, they do expect to be able to find you online, with product offerings, directions and a clickable phone number.

If you don’t have a website, get one; today you can actually get a simple one for free. And unless you sell nuclear products or Stinger missiles, please, find a way to offer e-commerce to your customers; It’s not free, but it’s no longer cost-prohibitive.

Serving customers online is not an option, it’s an imperative

The Many Faces of Fear

Aviation in itself is not inherently dangerous. But to an even greater degree than the sea, it is terribly unforgiving of any carelessness, incapacity or neglect.

As a pilot, this anonymous quote became more than just familiar words - it is a fact that I took to heart. But I suspect that reading these foreboding words created a level of fear that caused many prospective pilots to discontinue their pursuit of a license - the risk being just too great.

With a slight variation, this admonishment has also served me well as a small business owner. Ownership in itself is not inherently dangerous. But to an even greater degree than employment, it, too, is terribly unforgiving of any carelessness, incapacity or neglect.

The Benefits Of Fear

Everyone who has contemplated forsaking the perceived, if not real, security of employment to start a business has recognized the possibility and dangers of “crashing.” Indeed, countless prospective owners discontinue their pursuit of ownership for fear of losing too much - the risk being just too great.

As a prospective or real business owner, have those words of warning ever created a level of fear for you? I hope so, because in aviation and in business, fear can be a good thing.

Not paralyzing fear - the kind that comes when a person is ignorant of how to prevent or recover from a potentially dangerous situation. But rather the kind of fear that motivates you to be aware, knowledgeable, capable, prepared, decisive, and effective. Once you are armed with fear-fighting tools, fear becomes not only manageable, but actually can be a productive stimulus.

The Many Faces Of Fear

There is one thing about fear that is insidious: It is a shape-shifter - capable of appearing in many different forms. The challenge for us is to recognize fear in all of its shapes so we can employ our fear-fighting tools whenever it morphs.

Here are some of the faces of fear, followed by how it might sound, and then a fear-fighting tool. First on the list is the big daddy: unremitting, cold sweat, cottonmouth fear, in its default shape.

Fear - “What if I can’t cut it as an owner?” Before you became a successful employee you had to get an education and some training. It’s the same for ownership. If you can demonstrate the background for ownership, exercise it. Performance is the best tonic for fear. If you can’t perform because you don’t have the capability, background and/or strength-of-will, your fear is well founded and trying to give you good advice.

Fright - “What if I order all of this stuff and no one buys it?” It could happen, but it’s not likely if you did the proper research before you ordered. Remind yourself of the steps you took to determine what your customers want. If you didn’t take those steps, your fright is justified.

Terror - “What if I’m buying the wrong business?” This thought won’t occur if you are buying a business that sells something you know about AND on which you have conducted the proper due diligence, including the market and its industry. That means before you sign on the dotted line you know as much about the business’ past and present as the seller does, and more than the seller about the future of the business. If you don’t, you will become well acquainted with real terror.

Panic - “What if my pricing for this bid isn’t competitive? I need this business!” You should know almost as much about your competition as you do about your company, and more than they do about what the customer needs. Even if you think your price isn’t going to be low, don’t submit a bid for less than you can live with. The only thing that causes more panic than missing a sale you badly need is not being able to deliver the business you fought to get.

Dread - “I hate having to fire an employee.” No one likes terminating an employee. But too often small business owners get themselves into this problem by not doing a professional job of hiring in the first place. The only thing more time and resource consuming than an effective hiring protocol is an ineffective hiring protocol. Hiring willy-nilly is a season pass to the game of dread.

Trepidation - “I don’t think I can get a bank loan.” A self-fulfilling prophecy if you don’t understand that banks are businesses and, just like yours, have procedures for doing business. Knowledge is power, and knowledge of how banks make loans is a powerful lever in getting a loan. Oh, one more thing: A banker won’t eat you or have you arrested just for asking for a loan. They will only say yes or no. Better odds than you’ll get in many of your other small business activities. Besides, your banker might be feeling trepidation that you won’t come by. And we can’t have that, can we?

Anxiety - “How will I ever be able to compete with the Big Box competitors?” Your life will be miserable if you wring your hands about losing business you never had a chance of getting in the first place. Here’s a market truism: You never had a chance of getting everybody’s business! That’s also the good news for small business because it’s true for ALL businesses, large and small. David defeated Goliath by using the tools he had to the maximum advantage. You can avoid a lot of anxiety by using your strengths to deliver products and services in ways that the Big Boxes can’t. And that makes customers happy because they really would rather do business with a David than a Goliath.

Shock - “What do you mean our best customer has signed a contract with the competitor?” The only thing shocking about this scenario is that you had “A” best customer. You shouldn’t let yourself get into a position where the loss of any one customer is devastating. If more than 80% of your business is coming from less than 20% of your customers, you are in danger of getting an ugly shock.

In any of its many forms, fear can be either an immobilizer or a motivator. The only way to make sure it’s the latter is by being armed with the fear-fighting tools: awareness, knowledge, capability, preparedness, decisiveness, and effectiveness.

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