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It’s good to be a business owner

The military has produced many acronyms, one of which is RHIP, which stands for, “Rank Has Its Privileges.”

RHIP is the unofficial way to point out when a person accrues some benefit by virtue of their position. Mel Brooks’ character said it another way in his comedy “History of the World” with, “It’s good to be the king.”

In that spirit, here’s a new acronym for small business owners: OHIP, which standsfor “Ownership Has Its Privileges.” Let’s look – sometimes with tongue-in-cheek – at a few business ownership privileges.

By virtue of being the owner, you have the privilege of working all you want. That means you’ve earned the right to work half-days. And as an added bonus, you get to choose which 12 of the 24.

If you so choose, you can brand the company with your name, which can be pretty rich ego food. But it also helps a plaintiff’s attorney – the one who represents the customer who “slipped and fell” in your business – to identify at least two of the co-defendants in the lawsuit: the legal entity and its founder.

When getting a bank loan, almost all small business owners are afforded the high honor of signing their name twice on loan documents. Having perfected the belt-and-suspenders approach, banks provide you with this special moment to acquire not only the business assets as loan collateral, but also your personal estate as a double guarantee.

But seriously folks, as Mel Brooks might say, here are a few real ownership privileges.

Structure your small business as a Sub Chapter S Corporation (S Corp) or a Limited Liability Company (LLC), both non-tax-paying entities, and accrue the benefit of having business income or losses pass through to shareholders or members, respectively. These two legal entities are handy because personal tax rates are typically lower than corporate rates, plus you avoid double taxation of dividends. Additionally, S Corps and LLCs allow owners the privilege of sheltering personal assets from liabilities that may befall the business.

Finally, there is something I call the stealth benefit of business ownership: owning the real estate your business operates in and leases from you.

For example: John Jones owns the property at 21 Enterprise Blvd. and leases it to John Jones, Inc. John receives rental income, tax advantages and asset appreciation. Plus, as long as it can be justified, John can raise the rent instead of giving himself a pay raise because, as passive income, it avoids payroll tax.

So are you taking advantage of all of the “privileges” of business ownership?

It’s good to be the owner.

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Be sure to listen to my segment below from The Small Business Advocate Show. I talk in more detail about “OHIP” and how it effects small businesses.

OHIP: Ownership has its privileges

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Are you an Internet dynamo or a dinosaur?

Sometime during the spring of 1995, you and I were given access to the Internet for the first time.

Since then, related innovations have produced a new marketplace where businesses of all sizes turn prospects into customers in a virtual, parallel universe. Here is a short list of the significant innovations:

  • E-commerce – the ability to buy and sell online
  • High-speed internet replaced dial-up
  • Search engines indexing a gazillion online offerings
  • Mobile computing from convergence of mobile networks and smartphones
  • Social media transcending websites by connecting participants in online communities

After 10,000 years of the traditional marketplace, these innovations have at once produced unprecedented opportunity and disruption in less than 20 years. But here’s good news for small business: Part and parcel with the new capability is the incrementalization of virtual resources, which means they’re available in units and pricing that fit our focused (niche) applications and diminutive budgets.

We wanted to know how well small businesses are adopting the handy and affordable virtual marketplace tools, so in our online poll we asked: “How much of your sales can you attribute directly or indirectly to your online strategy?” Here’s what we learned:

Only 5% of our sample reported that 100% of their business resulted from an online strategy, while double that percentage said they did “more than half” of their business in the virtual marketplace. Just a few more, 12%, allowed that they got “about half” of their revenue from the Cloud, while our big group, 55%, said “less than half” of their business came from the Internet. And finally, almost one-in-five said the Internet produced “zero” business for them.

It’s good news that 81% of our respondents are experiencing some business from their online strategy. Twenty years after the telephone was introduced in 1877, I wonder how many businesses had adopted that proto killer app?

But another way to look at small business’s virtual marketplace adoption is that almost three-fourths of our folks still associate less than half of their business in any way to an online strategy. Sadly, that troubling news could foretell the unnecessary extinction of way too many small businesses.

After almost 20 years, customer expectations are increasingly evolving in the direction of more virtual interaction. Which way is your business trending?

Don’t act like a dinosaur – execute an online strategy.

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Check out my recent interviews with Anita Rosen. Anita is a keynote and radio speaker. She is also the author of the author of Project Management Question and Answer Book and E-Commerce a Question and Answer Book.

Learn Facebook marketing lessons from big business - with Anita Rosen

Facebook marketing is all about building community - with Anita Rosen

Why Facebook marketing is only for consumers - with Anita Rosen

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Small business lessons from big business mistakes

Here is a true story from which several business lessons can be learned.

A while back, I needed to reach a friend who worked in the local office of a national company.Searching the phone book and online, I found only a toll-free number that connected to an answering system for the entire company. That’s right – this business didn’t publish a local number anywhere. And incredibly, this automated system did not offer an option to connect to any local branch or person. I’m not making this up!

Lesson 1: Don’t create barriers to customers. Even if you think you don’t have barriers, look anyway, because you might. Ask employees and customers to help you find them.

Undaunted, I finally acquired the local number (yes, they had one), but the person who answered said my friend, who was in sales, had been laid off. It turns out that this publicly-traded corporation was losing money, so in order for the CEO to impress Wall Street analysts, who influence the stock price, almost 2,000 employees across the company were told to hit the bricks.

Never mind how valuable these employees were or if those cuts would hurt the company’s long-term performance; the quickest way to increase profits was to cut payroll.

Lesson 2: Performance goals are important for planning, but customers don’t always buy on your schedule. Don’t let short-term expense pressures cost you sales, and worse – long-term customer relationships.

I learned that my friend had been a top producer, but since he was the last one hired he was the first to go. He’s no longer a payroll drain on his former employer, but one of their competitors quickly snapped up this winner.

Lesson 3: In the 21st century, seniority doesn’t trump performance.

So what if this big business CEO had simply installed a phone system that made sure customers could connect to his local offices? The answer is that my friend and several hundred others may not have been fired.

And who knows? By simply eliminating one customer barrier, this company might have needed to hire more employees to handle all of the business that went elsewhere.

Lesson 4: How you run your business – including people, systems, technology and policies – is not more important than the ever-evolving expectations of prospects and customers.

By the way, that big business that taught us these valuable lessons is no longer in business.

Think you don’t have customer barriers? Neither did that big business CEO.

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Be sure to check out my segments on The Small Business Advocate Show with Ilise Benun. We discussed how to break down barriers and connect with customers through 4 content marketing tools.

Use content marketing to connect with prospects and customers - My interview with Ilise Benun

Use these 4 content marketing tools to connect with customers - My interview with Ilise Benun

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!




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