10 Things Small Business Owners Need to Know
By Rieva Lesonsky
1—Millennials & Small Business
America’s Small Business Development Centers recently released its America’s Voice on Small Business survey, conducted with millennial expert Jason Dorsey and the Center for Generational Kinetics. The survey looked at millennials and their entrepreneurial aspirations and challenges. Some key findings:
- 62% of millennials have a dream business in mind that they would love to start
- 49% intend to start their own business in the next 3 years
- 61% believe that the best job security would come from owning your own business
- 41% of Americans would quit their jobs and start a business in the next 6 months, if they had the right tools and resources
You can check out the white paper here. And be sure to look at the infographic below.
2—Millennial Shopping Report
CouponFollow just released a fascinating report on millennial shopping behaviors. Millennials are expected to spend more than $200 billion annually starting this year.
Some highlights of the report:
- The Future of Retail Requires a Hybrid Approach. To make a tangible impact, retailers must bridge the gap between online and offline experience.
- Brands are Seen as Providers—Not Peers. Millennials are willing to engage with brands but only when relevant to the transaction or shopping experience.
- 60% of millennials search for coupon codes before shopping. Younger consumers are feeling the challenges of adulthood and are actively looking for ways to preserve resources.
While millennials have a reputation for being fixated on technology, as a generation they still make most of their purchases from brick-and-mortar stores.
- 53% make most of their purchases offline
- 31% make most of their online purchases via desktops
- 16% make most of their online purchases via mobile devices
- 79% say finding the best deals impacts their purchasing decisions when shopping online
- 69% search for coupon codes online
There’s so much great info in the report. Make sure to download it here.
3—Many Unhappy Returns
Obviously, the more products consumers buy online, the more they’re going to return. This says Narvar, an enterprise-grade post-purchase experience platform, means the “online returns process has become a critical moment in the customer experience.” According to Narvar’s report, Making Returns a Competitive Advantage, this is particularly true for affluent shoppers and those under 30.
As Amit Sharma, Narvar CEO, says, “An online return is a critical moment in the customer journey. Retailers have an opportunity to impress and delight customers. If retailers can meet these high expectations, they can use returns to improve customer satisfaction, inspire loyalty and fuel new revenue streams.”
Some highlights of the report:
- 47% of millennials say returns are a hassle
- 60% of millennials say they keep purchases they dislike because they don’t want to deal with the hassle of returning them—18% higher than shoppers over 30
- 50% check a retailer’s return policy before buying
- Women under 30 and high-income shoppers are most likely to “bracket”—order multiple items, intending to return some
- Millennials are more likely to return an online purchase in-store—55% say it’s easier to return an online purchase in-store because they like to shop for other items on the same trip (38%) or get an immediate credit (40%).
The Living Room is the New Fitting Room
Online shoppers today are buying to try, with the intention of keeping their favorite item and returning the rest. This trend, called “bracketing,” is most common among millennials, high-income and female shoppers. This represents a significant opportunity for retailers to transform returns into an experience catered toward the consumer’s needs. It also signals that returns are not the end of the customer relationship, and can drive both loyalty and new revenue.
- 44% of women surveyed have done this in the past year, compared to 30% of men.
- Bracketing is most common for apparel and home goods.
4—Controlling Company Data—5 Ways Small Businesses Fail
Guest post by David Zimmerman, CEO and Founder of LC Technology
For a business of any size, data loss is a crippling event. Whether it involves a three-person bike shop that loses its customer list or a 20-person ecommerce firm that loses customer data to hackers, the damages to brand and revenue can be severe. For small companies the fallout from a data loss can ruin the business, as they do not typically have the cash reserves or accumulated brand history of a bigger company.
The causes of data loss fall into certain categories, which make it easier to proactively plan for such events.
- Failure to backup data. Perhaps the most common cause of loss is also one that’s exceedingly easy to fix. Physical and cloud-based storage are inexpensive, especially when compared to the risk/reward of losing data. External hard drives of up to 8 terabytes are available online for less than $200, and this is a massive amount of data capacity that should be plenty for any small business. Cloud storage is reliable and inexpensive, and provides the benefits of accessing data from any internet connection. Small businesses should mix cloud services with external drives to create “backups of their backups” with automated rules for sending files to both storage types. Small business owners should review how staff (and themselves) hold data locally on laptops, thumb drives, or SD cards, and create strict rules on using the cloud instead. All it takes is one unexpected natural disaster or dropped laptop to cause a data loss nightmare.
- Using advanced settings. Small businesses typically do not have in-house IT staff, so that means workers are often on their own to try to “fix” hardware or software. One frequent problem occurs when staff try to modify the “advanced” settings on their computers. They might try to update the BIOS (Basic Input Output System), the motherboard chip that tells the computer what to do during power on. But updating these types of settings should only be done by people that really know what they’re doing, otherwise there’s a risk of causing a failure and then losing all the computer’s local data. Small companies should consider having an on-call relationship with an IT firm that can troubleshoot problems remotely or in person.
- Hardware failures. It’s 2017, and companies should embrace the benefits of cloud storage, however many companies still rely on local devices. Unfortunately, a laptop or external drive can be broken from a fall or a spill, and sometimes they just stop working due to failing flash memory or a hard drive mechanical error. Consider a small business salesperson who is on the road doing sales and they drop their laptop. If they stored all the past month’s contracts on the laptop, then they’ll need to go back to the customers and ask for new documents. If they use the cloud, then the backups are already there, and the salesperson can simply buy another laptop and get back to business.
- Lax security protocols. Small companies are often successful because they break with convention and routine. People want to work in non-bureaucratic settings with minimal rules. However, rules are necessary when it comes to data management. Small businesses should mandate staff to use strict password controls, not open email from unknown people, and avoid banner ads. If staff frequently use passwords such as “admin” to setup a database for customer data, then they’re exposing the entire operation to a data breach. Provide guidance on creating complex passwords, restricting the sharing of credentials, and taking other steps to protect information from loss.
- If hackers gain control of a small business network through a staff person’s passwords or through a download, then they can hold the information hostage until a ransom is paid. They typically use an encryption key that must be purchased to “unscramble” all the company’s vital data. Firms can avoid such ransomware by updating their security tools, and training staff on unsafe procedures. Small companies should also consider working with an IT firm for insight into how to separate some technology systems from the data warehouse that contains the most sensitive records.
5—Are You Paying Your Salespeople Enough?
A new study by Peak Sales Recruiting shows 70% of companies do not have proper sales compensation plans in place to recruit and retain A-level talent and only 6% of salespeople feel “extremely satisfied” with their compensation plan.
The 2017 Peak Sales Compensation Study shows that “developing a winning sales compensation plan is critical to attract and retain top talent and is among the most difficult tasks business leaders face,” says CEO of Peak Sales Recruiting Eliot Burdett.
Among the many findings, the study shows that effective sales compensation plans must be above market average, easy to understand and timely.
5 Facts on Base vs. Commission
Respondents were asked how they prefer their compensation split:
- 68% of salespeople are more satisfied with a compensation package where most of their earnings come from a base salary.
- The split with the highest satisfaction (36%) is 60% base and 40% commission.
- The split with the lowest satisfaction is 0% base and 100% commission.
- Compensation plans with uncapped commissions were correlated with higher levels of satisfaction (33%) versus capped commissions (14%).
- Most people surveyed who meet or exceed quota currently have a 60% base and 40% commission split.
Key Takeaway: Offer a 60/40 base vs. commission split and do not cap commissions.
5 Most Frequent Answers on How to Improve Compensation Satisfaction
In an open-ended question, respondents were asked what could be done to improve satisfaction of their current compensation plans:
- 20% Fair and Achievable
- 18% Easy to Understand
- 13% More Bonuses
- 12% Timely Payment
- 10% Higher Base
Key Takeaway: Make your plan fair, simple, clear and timely.
Perception of Compensation Plan Compared to Market Value
Respondents were asked how they view their compensation plans compared to the market value:
- 47% felt their compensation plans were at the industry average.
- 37% thought their compensation was below industry average.
- 33% of top performers (those who achieved 100% or more of their quota the previous year) felt their compensation was below industry average.
- 33% of employers risk losing their top performers to competitors by offering a non-competitive compensation plan.
Key Takeaway: Offer an above-market compensation plan to retain your best salespeople.
Compensation Plan Revision Frequency
Respondents were asked how often they prefer their compensation plan to be reviewed:
- 58% prefer an annual review.
- 26% prefer a semi-annual review.
- 9% prefer a review every two years.
- 7% prefer quarterly review.
Key Takeaway: Employers should schedule annual compensation plan reviews.
6—Why Document Management Beats Micromanagement: Handling Office Control Freaks
Guest post by Jesse Wood, CEO, eFileCabinet
How to Handle the Proverbial Office Control Freak
If there’s a word that captures the pain of modern office life, it’s “micromanagement.” The term harnesses so many prevalent frustrations in contemporary work life: Resentment, unduly subordination, and insistence on paying attention to or devoting one’s time to unimportant tasks that neither advance individuals’ careers nor the future of the companies for which they work.
Everybody dislikes micromanagement. The worst part of all? Most micromanagers are not even aware of their tendencies to micromanage. This means, despite reading this blog in hopes of finding a micromanagement solution for your organization, that you could be a micromanager without even knowing it!
It’s not all for naught, though.
The National Center for Biotechnology Information (NCBI) recently published a study on micromanagement, noting it’s only beneficial in short-term situations, as is the case with training new employees, increasing the productivity of underperforming employees, and controlling myriad high-risk issues.
Despite the suggested balancing act modern research suggests, how can we eradicate micromanagement for the long-term betterment of our organizations? Keep reading to see why document management beats micromanagement as a solution for small, mid-sized, and even large organizations.
Why Document Management Beats Micromanagement: Stress Reduction
A study conducted by the Indiana University’s Kelley School of Business, mentioned in the Chicago Tribune, even found that people in very demanding roles with little control over their workflow were almost 20% more likely to die during the trial period in comparison to other workers in less demanding jobs.
Micromanagement-induced stress is native to some of the most document-intensive industries and workflows. For instance, industries with high turnover and frequent new hires will experience greater levels of micromanagement due to the prevalent training demands these scenarios cause.
For instance, the services sector retains employees for less frequent durations of time, and the document-intensive aspects of these services make information management difficult.
However, micromanagement needn’t be the go-to technique with services sector technology that prevents these issues, and this pertains mostly to training and onboarding new employees.
If we want to prevent micromanagement over the long haul, we’ll need to properly train employees at the beginning of their tenures with their given companies.
Given that most training processes are documentation intensive and require accurate recordkeeping, it’s in the best interest of any company in high stress industries like finance, accounting, insurance, healthcare, manufacturing, and law to manage documentation before it manages them, and this is just one of the reasons why document management beats micromanagement.
Until these suggestions are reified, stress will further embed micromanagement into the business practices of any organization, regardless of its size or purpose.
Streamlined Communication Strategy and Sentiment
If you find your employees speak their minds too often, micromanagement is probably the cause. The frustration that inevitably stems from trying to manage others’ work too intensely boils over in to body language, and in later stages, tacit verbal expression of these feelings.
And when employees do speak their minds about issues affecting their performance, the negativity breeds hostility and discontent, even among some of the most positive employees.
This is yet another reason why document management beats micromanagement: The document management technology itself handles a considerable portion of the organizing efforts once only overseen by management personnel, simply tracking, tracing, and identifying project workflows within a given system.
In result of using document management solutions, most executives, leaders, and managers will be able to tend to more important aspects of management; for instance, curating talent, providing accurate feedback on performance, and giving employees the motivation they need to succeed in their jobs without a micromanager breathing down their necks.
Document Management Simplifies Delegation
If there’s one thing that all micromanagers have in common, it’s that they have trouble delegating tasks and trusting employees with responsibilities.
But in employees’ defense, it’s nearly impossible to complete unclear tasks. And although tasks and projects can be made very clear in detail, finding the documents and information needed to complete tasks thoroughly and accurately is a challenge with outdated information management mediums, like filing cabinets, shared drives, flash drives, or simple Windows folder structures.
One of the reasons all these mediums make completing delegated tasks difficult is the fact that they elicit minimal collaboration from internal and external teams alike.
Document Management Eliminates Task Silos
At its essence, micromanagement stems from a belief that one can control everything. Although control is an important aspect of task completion, it should never be the sole responsibility of a human being.
This is yet another reason why document management beats micromanagement: It alleviates the human burden of control in an age dominated by information chaos.
After all, over 90% of the world’s data and content has been created within the past 5 years. Any organization or small business trying to harness this data through human intelligence alone is going to fail, even if one has the IQ of an Einstein.
Not only does document management eliminate task siloes, it frees up room for collaboration that reduces the effort that every individual on a team must make to reach a goal—increasing the synergy of the group as a whole—instead of demanding more from each siloed employee.
Document Management Identifies Real Barriers to Great Performance
The final reason why document management beats micromanagement is fear of underperforming and micromanagement, which almost always coincide. Although usually well-intentioned, most micromanagers fail to realize the import of their habit’s effects on their employees.
What managers oftentimes forget is that to overcome micromanagement, one must zero in on the ways to improve a team’s performance without having to oversee everything the team does, and this will always entail working smarter, not harder.
When paper is removed from the office and put into a traceable system where workflow and activity are identifiable and measurable, managers can spend less time micromanaging employees, because they will be able to more easily identify actual issues in productivity and allocate resources toward solving those issues as they arise, drastically increasing efficiency and pinpointing the hang-ups in their workflows.
Otherwise, management and executives will have to merely postulate or guess what the issues surrounding productivity are, and they’d likely achieve better results playing darts in the dark. And, to the chagrin of the organization, micromanagement will only continue to grow and harm productivity.
7—Do You Have a Pet Policy?
While, as customers, it’s not uncommon anymore to see animals in stores or at businesses, many small businesses believe animals are not meant to be at the workplace. But in a survey of small business owners, Manta found a small percentage of small business owners believe pets can be helpful for their office culture. However, even as large corporations work to encourage pet inclusion, many small businesses owners will likely keep their businesses pet free.
- 29% of small business owners allow employees to bring their pets to work
- 36% allow customers to bring pets into their stores
- 10% have gotten complaints from customers about animals at their businesses
- 41% think having a pet in your office/work environment is helpful
- 11% think it’s distracting
- 48% thinks it’s a little of both
- 81% allow emotional support animals
8—Hiring the Best
Most small businesses don’t have HR departments, so the hiring decisions are often left to the business owner. Check out this article on the Wonolo blog with hiring tips from 29 HR experts.
9—Get More Insights
Total Merchant Services, a leader in payment services and solutions, is partnering with Womply to offer Groovv Insights, a technology and data platform that helps merchants grow, protect, and simplify their businesses.
Small business merchants today are busy juggling a lot of responsibilities to stay competitive. In addition to managing daily business operations, merchants must monitor what customers say about them online, engage with customers in digital forums, keep their websites up to date, understand their customers’ spending tendencies, and more.
Groovv Insights monitors vital aspects of a merchant’s business automatically so business owners can better understand their revenue, customers, and competing businesses. It uses data dashboards and message prompts to help merchants act on critical tasks such as tailoring promotions to top customers and managing online reviews on popular sites like Yelp, Facebook, and Google from a single place.
Total Merchant Services’ says the Groovv technology portfolio is designed to help merchants respond to the growing complexities of doing business and staying competitive. Groovv Insights will complement existing payment and promotions solutions by enabling merchants to easily access important business information and make better decisions. With Groovv Insights, merchants can compare their revenue to similar businesses in their area, manage and respond to online reviews, create customized customer feedback programs, gather market intelligence, and more.
10—Help for Local Businesses
YP, the publisher of yellowpages.com, the YP℠ app and The Real Yellow Pages® Directory, just launched ypWebsite Pro, a website offering that helps local businesses earn top rankings in organic search results and get found on local directory sites. With ypWebsite Pro, local businesses get a mobile responsive, content-rich website supplemented by a full range of SEO services designed to improve rankings on Google and other leading search engines. The product also enables local businesses to claim, update and manage their business listings across more than 60 search, social and directory sites to ensure accurate and consistent information across the web.
The move is part of an investment by YP to provide better integrated solutions that enable local businesses to build their presence and expand their reach through a variety of print and digital offerings. For more information, visit biz.yellowpages.com.