19 Things Small Business Owners Need to Know
By Rieva Lesonsky
1—Online Holiday Retail Sales are Strong
According to the results of Internet Retailer’s analysis of the holiday season thus far, including Thanksgiving weekend sales, it looks like it’s going to be a strong online holiday season, thanks to strong e-commerce growth, national consumer confidence and consumers’ willingness to buy online. Click here for full charts and analysis.
Key highlights:
- E-commerce sales grew 19.2% to $22.55 billion during Cyber 5
- 76% of shoppers plan to purchase more than 25% of their gifts online this year
- E-commerce accounted for 15.2% of all retail sales during the weekend
- 60% of consumers will shop on marketplaces during the holidays
2—Black Friday = Huge Success
Consumer enthusiasm drove online sales to new heights this Black Friday 2018 weekend at $18B in turnovers just in the United States. This trend reflects globally as well, as more retailers across Europe and Asia adopt the occasion to promote sales. As you can see in the graphic below, mobile shopping is on the rise. You can check out the other holiday shopping trends in the thorough report from ContactPigeon.
3—Holiday Social Strategy
It’s a bit late, but there’s so much good information in The Shelf’s Step-by-Step Social Media Strategy, a downloadable playbook from The Shelf. You can check it out here.
4—Home Services Businesses Need to be on the Alert for the Holidays
While holiday shopping stress is over for 73% of Americans, according to a recent survey from Verizon Connect, holiday stress is still present for 40% of us who expect to make more service calls during this holiday season than any other time of the year.
The biggest concern for 27% of Americans is needing a plumber to fix frozen pipes during the holidays, which is especially true for Midwesterners (30%). About 15% are concerned TV they’ll need a technician to fix their cable. In addition to emergency repairs, 90% of Americans rely on key home services during the holidays with heating ventilation and air conditioning being relied on the most (28%) followed closely by trash removal (27%).
Americans expect more from service providers at the holidays
If you own a home services business, you should know that 53% of Americans expect their service provider to be open with at least regular business hours, if not extended hours, during the holidays.
Expectations are high—consumers expect their service providers to be cost effective and fast. Cost was the top considerations for 67%, with 26% saying the time a service provider takes to arrive or the amount of time it takes them to finish a job was most important. Most (76%) have higher expectations for a service provider making repairs during a holiday party than a driver delivering food for a holiday party.
5—Christmas and the Future of Your Family Business
Guest post by Rochelle Clarke, global strategist and founder and CEO, Succession Strength
It’s the most wonderful time of the year! Right now, kids are jingle belling, well-wishers are spreading good cheer, and family members are gathering to enjoy what Andy Williams styled “the hap-happiest season of all”. But amid all those happy meetings and holiday greetings, there’s one conversation topic that’s likely to rob the glow right from your loved ones’ hearts—the family business.
There’s something of a perennial disagreement among us and our colleagues in the family business consulting space. For some, the holidays should be a “no-fly zone” for conversations about the family business. Let family time be family time, they say. Don’t let the business creep in and pollute these pure moments of family comradery.
We get that, and we agree that the holidays are an important time for families to come together as families. But at the same time, we can’t help but contend that refusing to talk about the family business during this time represents a huge missed opportunity.
Why not talk about the family business?
For one thing, such talk can feel exclusive for those who aren’t personally involved with the business. For those family members, nothing is worse than watching the dining room turn into a cozier version of the conference room down at the office.
Fair enough, but that’s not what we’re after here. We’re not suggesting you trade your coffee for eggnog and bring the Monday Morning Huddle over to Aunt Margaret’s house. Instead, we’re after something much more profound, with the potential to bless you and your family business for the entire year to come.
Tell the old, old story: Every family business has a story, and that narrative is often the glue that holds the organizations together. This isn’t just sentiment; a team of strategists in the UK has detailed the strategic power of narrative in supporting family business succession.
Stories unite rather than divide. They give every family member at the table something to grab on to—whether they’re “in” the business or not. If you want your conversations about the business to be fruitful, start there. “Grandpa’s” story about opening up a store and “accidentally” becoming a pioneer in coffee blending—to take Lavazza as an example—is about more than the start of a business.
Grandpa is Grandpa—this is his story. And because it’s his, it’s ours.
How to intentionally frame story time: If your family is assembled at a formal gathering like dinner and you’re the host, we suggest you set a simple set of tracks for the conversation to run on, beginning with something like Michael Hyatt’s “One Conversation Rule.”
The rule is simple: only one conversation at a time. No side chats allowed—period. This may sound strict, but a rule like this one will ensure everyone can be heard and feel validated. That’s how real connections are forged between family members. It’s also how you keep the non-business members of the family from tuning out.
Next, give the conversation a historical frame by focusing on the past, present, and future. You don’t have to ask these exact questions, but do use them to guide your time:
Where did we come from? Getting in tune with their origins can help family members recover a common core of vision and values—a necessary element in establishing cohesion, especially if family business succession is on the horizon.
Where are we today? You’ve talked about where you’ve been; now it’s time to talk about where you are. Again, this isn’t a board meeting, so leave your spreadsheets in your briefcase. Instead, focus on the personal elements of everyone’s experience in and around the business.
Where are we going tomorrow? Family businesses that fail to plan for the future are planning to fail. The beauty of this part of the conversation is that you can use it to open up a hopeful, non-threatening opportunity to dream about what things might look like when future generations take over the business.
Not to put a damper on the happy season, but the cold, hard fact is that 70% of first-generation family businesses will fail to transition into the second this year. And one of primary reasons they’ll fail is because of a lack of communication.
But if you can use the holiday season as an opportunity to come together and retell the story of your family business, you’ll turn the holiday into a wonderful season of renewed unity and vision. More important, you’ll create a precedent for open and honest communication between relatives—a rare commodity in many family-run businesses.
6—Holiday Cybersecurity
Infoblox Inc., a leader in secure cloud-managed network services, recently released new research revealing how retailers across the globe invest more in cybersecurity during the holiday period than at any other time of the year due to a seasonal increase in social engineering attacks. The research also found that threats, such as unpatched security vulnerabilities, insecure IoT devices, and the online consumers themselves are a risk to retailers this time of year.
The report, Retail Risks Revealed: Cybersecurity Threats at All Time High During the Holidays’, details the findings from a survey of consumers and retail IT professionals in the UK, Germany, Netherlands and the U.S. on their experiences and attitudes towards online data privacy and security while shopping online during the holidays.
In the UK and Germany 62% of retailers claim to increase cybersecurity measures during the holiday season. In the U.S. 35% of retailers cite a rise in social engineering attacks (34% in the UK, 30% in Germany). Other kinds of attacks in the U.S. include:
- Social media scams: 19%
- DDoS attacks: 7%
- Ransomware: 12%
Implementing new technology makes 44% of U.S.-based retail IT decisionmakers more concerned, yet 44% of retailers plan to implement IoT devices like Amazon Alexa and Google Home in stores within the next 12 months.
While the majority of global consumers shop online to some degree,17% of shoppers do nothing to protect their data while shopping online. Infoblox says to prevent unwanted network activity and vulnerabilities during peak online shopping seasons, retailers need to gain complete visibility into their network. Intelligent DNS security solutions can help detect vulnerabilities by identifying unusual and potentially malicious network activity and provide deeper control at the infrastructure level. To stop sophisticated attacks like phishing, social media scams and social engineering, retailers need network monitoring solutions that leverage machine learning and artificial intelligence to identify malicious actors and potential cyber-attacks.
To view the full report and findings, download the report here.
7—Small Businesses Embrace Crowdfunding
Small businesses are increasingly relying on crowdfunding, according to new survey data from SCORE, the nation’s largest network of volunteer, expert business mentors. In 2018, U.S. businesses raised $1.04 billion, a significant increase from the $915 million raised in 2017.
Check out SCORE’s latest infographic, sponsored by Nav, below.
8—Corporate Social Responsibility: More than the “Right Thing to Do”
Guest post by Kathy Bernhardt, managing director, Tangram Business Resourcing
It seems like the holiday season gets marketed earlier with each passing year. This year, I had barely closed the door on my last trick-or-treater when I started seeing and hearing ads announcing that the holiday season, or rather shopping season, had arrived!
In today’s competitive economic environment, and perhaps especially during the holiday spending season, companies are focused on gaining new customers, hoping to convert them into loyal customers and improve their bottom line.
To help them outshine their competitors and attract more consumers, companies employ a variety of strategies, but there is one strategy that many companies fail to employ, making it the best kept secret in consumer marketing—leveraging the benefits of corporate social responsibility to tap into the market represented by individuals with disabilities.
So what exactly is corporate social responsibility (CSR)? One of the best definitions I have seen comes from the McCombs School of Business at University of Texas, which states, “Corporate Social Responsibility, or “CSR,” refers to the need for businesses to be good corporate citizens. CSR involves going beyond the law’s requirements in protecting the environment and contributing to social welfare. It’s concerned with protecting the interests of all stakeholders, such as employees, customers, suppliers, and the communities in which businesses operate (McCombs School of Business (2018). Corporate Social Responsibility. Ethics Unwrapped).”
It’s wonderful to see more and more companies adopt CSR practices, but companies should view CSR as more than just the “right thing to do.” Done well, CSR can be a powerful business tool. At Tangram, we are dedicated to helping businesses create CSR practices by expanding and diversifying their staff to include the market segment represented by people with disabilities.
Individuals with disabilities represent $220 billion in spending power, are brand loyal and are an integral part of every major demographic nationally. Unlike other target populations, disability knows no bounds—cutting across age, gender, ethnicity, income, region and almost all major categories important to business.
In North America alone, there are 54 million people with disabilities. According to Charles A. Riley II of the International Center for Corporate Accountability, that’s a bigger demographic than Latino, LGBTQ and African-American markets combined—and people with disabilities have twice the spending power as the coveted market of teens and 17 times that of tweens. The disability market size increases when you add in friends and family—people who care deeply about diversity and disability issues and make purchase decisions accordingly (Riley II, Charles A. “Handshakes, Not Handouts: Building the Business Case for Inclusion”).
Furthermore, Riley writes that, “The American Association of People with Disabilities and Public Opinion Research Inc. reports that more than 70% of members choose to buy from retailers that support people with disabilities, while a similar survey from the Center for Social Development and Education at the University of Massachusetts at Boston noted that 92% of participants with disabilities felt more favorable toward companies that hire individuals with disabilities, and 87% would give their business to those companies, according to the 2006 edition of the Journal of Vocational Rehabilitation (Siperstein et al. 2006).”
People with disabilities are just like any consumer—they choose where to shop, where to eat, which product to buy, what hotel to stay in, which vehicle to buy, what airline to fly and the list goes on!
Being intentional in marketing strategies goes beyond using people with disabilities in just visual marketing; it also includes understanding their needs. People with disabilities want what everyone else wants—products they can use, places they can visit that are ability friendly (beyond just physical ability), accessible websites and much more.
Marketing is a great place for companies to begin their strategy for tapping into this market, but it is just the tip of the iceberg when it comes to corporate social responsibility. As we face a new year and a clean slate, I challenge companies to make other facets of corporate social responsibility a focus in 2019—including making a commitment to disability inclusion in hiring practices and using influence and resources to help build inclusive communities. I’m confident this approach will lead to a very bright 2019 for both businesses and their communities.
9—An Insider’s View of Employee Theft
Hiscox, the international specialist insurer, recently released the 2018 Hiscox Embezzlement Study™: An Insider’s View of Employee Theft, which found that 79% of embezzlement cases involved two or more people. The study also shows 70% of embezzlement schemes were carried out for more than one year.
This is the fourth iteration of the annual Hiscox Embezzlement Study. The 2018 study surveyed a targeted group of chief financial officers and professionals in accounting or controller roles who have worked in a company where embezzlement has occurred.
“By surveying a select group of individuals who have experienced embezzlement firsthand, we were able to learn revealing information about the prevalence and impact of employee theft,” says Doug Karpp, Crime & Fidelity Product Head at Hiscox. “This is a pervasive issue for companies of all sizes, and the goal of our study is to underscore the importance of having a plan in place to protect a business, its employees and its customers from the far-reaching repercussions of embezzlement.”
The real cost of embezzlement: The average amount embezzled was $357,650. Unfortunately, those companies only recovered 39% of the embezzled funds, on average. Furthermore, 39% of those who experienced an embezzlement saw more than one case in their careers.
When an employee is on the take, a company has much more at risk than just the funds being stolen—29% of companies were forced to lay off employees as a result of an embezzlement scheme, and 26% lost customers.
Embezzlers behind the scenes: Embezzlement comes in all shapes and sizes and can be difficult to spot, even cropping up where businesses may least suspect it. While the majority of schemes are carried out by a team of more than one person, the average embezzler had been an employee at their company for eight years, and 85% of cases were perpetrated by someone at the manager level or above. One-third of embezzlers worked in the accounting or finance department, and the most common method of embezzlement was billing fraud, used in 18% of cases.
How businesses can protect themselves: While the survey confirmed that businesses of all sizes, and in all industries, are vulnerable to employee theft, three-quarters of respondents say the companies they work for do not have insurance to cover embezzlement. Businesses should take the following steps to ensure they are covered in the event they are victimized by embezzlement:
- Prevent embezzlement before it happens by instituting a system of checks and balances. Small businesses, for example, are more likely to give end-to-end responsibility for a money-centric function such as payroll to a single individual, making it easier to steal and cover their tracks.
- Detect fraud early to keep a small instance from becoming a larger incident; knowing what to look for is critical in spotting an embezzler. In 65% of cases, the embezzlement scheme was uncovered by an employee, rather than an external whistleblower, such as an auditor, bank or law enforcement.
- Mitigate the impact to your bottom line by insuring your business and pressing charges against the employee who steals from your business.
10—Keep Your WordPress Site Safe
Guest post by Jessica Ortega, website security analyst, SiteLock
WordPress is one of the most robust and commonly used content management systems (CMS) available for SMBs to build and maintain a website. In fact, with its intuitive design and lightweight installation, it’s no surprise that WordPress now powers more than more than 31% of active websites today. However, building your website with WordPress comes with its own set of security risks, such as frequent updates and possible vulnerabilities in the open source platform. Here are a few tips that any small business owner can use to ensure their WordPress site remains secure and free of vulnerabilities or malware.
Automate security updates: WordPress allows users to set core application updates to be applied automatically as soon as they’re released. If possible, it is best to use this setting ensuring that vulnerabilities are patched in a timely manner. However, some automatic updates to the WordPress core software may break themes and plugins installed on the site. If your site uses sensitive add-ons, it is best to use a surgical application patching service. These services automatically apply security updates to individual files, protecting themes and plugins so website owners can plan full version upgrades in their own time.
Always source responsibly: Select themes and plugins from reliable sources like the WordPress plugin repository. Never download or use free versions of premium or paid plugins, as these pirated copies often contain malware that could infect your website or visitors. Additionally, you should only install the plugins and themes absolutely necessary to the functionality of your website and completely remove any that are not actively in use.
Update plugins and themes: While the WordPress core software can be set to update automatically, in most cases your plugins and themes cannot. Schedule time at least once per month to review and apply any security updates for your site’s addons that have been released. This will ensure your site does not become vulnerable to attack.
Protect your dashboard: WordPress now allows users to implement 2-factor authentication on their WordPress admin panel. Enabling this feature means that even if a cybercriminal is able to guess your password, there is an extra layer of security between them and your site’s sensitive data. Additionally, it is recommended that you change your WordPress admin URL, preventing cybercriminals from being able to find your login page to guess your password.
Be proactive with security: While there are a lot of great DIY tips and tricks like those above to keep your WordPress secure, your website is your life line and it’s best to proactively invest in its security. Using a malware scanner that automatically scans for and removes malware detected on your site is the most effective way to ensure your site remains clean and online.
11—How We View Aging
BMO Wealth Management (U.S.) recently released a report revealing Americans’ views on aging and exploring their top concerns tied to family and wealth. The report, The Aging Economy: Improving with Age, is based on a survey of Americans aged 55 and older and highlights the benefits of a comprehensive wealth plan to help mitigate the worries that many seniors encounter throughout retirement.
Increased life expectancy among Americans—currently 76 for men and 81 for women—has extended the average retirement period to 18 years. As a result, many boomers are remaining in the workforce longer in order to grow their retirement nest eggs, meet retirement and estate planning goals, and stay active. They’re also thinking more than ever before about how to ensure they will live a comfortable life now and in the future.
Key survey findings
Boomers’ top concerns about a lengthy retirement are healthcare costs and quality of life (46%), being a burden on family members (45%), and running out of money during retirement (44%).
Spouses and partners often have different opinions about long-term financial goals. The discrepancy cited most frequently among couples was when and how much to save for the future (28%), followed by retirement goals (27%), and how personal assets and possessions should be distributed to heirs (25%).
Respondents identified their most significant investment and retirement issues as a desire to maximize retirement income (22%), fear of outliving their savings in retirement (21%), and the impact of long-term care costs on personal finances (19%).
Tania Slade, National Head of Wealth Planning, BMO Wealth Management (U.S.) says, “It’s crucial that people approaching retirement work closely with financial planners, spouses, and family members to come up with a viable, long-term strategy that supports them throughout their elder years and enables them to leave the legacy they desire.”
Tips to help alleviate common concerns during retirement from BMO
Make sure your financial plan is up to date: Living longer means planning to 100. If your financial plan is based on average life expectancy rates, you may be underestimating your needs. The older you get, the more likely it is that you will outlive the average.
Make sure your written estate documents are up to date: They should match your current objectives, provide for unforeseen contingencies, and be flexible enough to withstand potential tax and law changes. If this is not true, an update is warranted.
Consider your working years’ “after-life”: You may need to work longer to provide for living longer and to meet the needs of your anticipated lifestyle. Even if you would just like to keep active, having a strategy can help you prepare for a smooth transition.
Know your personal and family medical history and the effects it could have on retirement spending: Medical costs represent some of the biggest expenses people encounter after retirement. Be sure you fully understand what the transition from a privately funded, employer-sponsored health plan to something else (i.e., Medicare) is likely to entail, including additional out-of-pocket expenses.
Keep your investment policy statement up to date: As your reliance on your invested assets increases with age, your risk tolerance will likely change as well. Ensure that your investments are managed in line with your changed investment risk and that your wealth manager understands and acts accordingly.
Have end-of-life discussions with your spouse, family and/or support network: Spouses need to reach consensus regarding lifestyle, finances, and estate planning. Meanwhile, informing family members and supporters of your wishes now (and changes going forward) will ensure that your desires are followed and they won’t need to guess in trying times.
Consult professionals: Just as you consult with doctors and dentists to care for your physical health, you should engage with attorneys, accountants, and wealth advisors to ensure your financial health and help you navigate the legal, tax, and investment complications of living longer.
12—Managers are Cracking Under Pressure
A new study by researchers at VitalSmarts, a top 20 leadership training company, shows a manager’s ability or inability to communicate in high stakes, stressful situations directly impacts team performance. Specifically, managers who clam up or blow up under pressure have teams with low morale; that are more likely to miss deadlines, budgets, and quality standards; and that act in ways that drive customers away.
And unfortunately, too many teams are victims of a manager better classified as a “hothead” than “smooth operator”. According to a recent survey, at least 1 out of every 3 managers can’t handle high-stakes, high-pressure situations. Specifically, when under stress:
- 53% of managers are more closed-minded and controlling than open and curious.
- 45% are more upset and emotional than calm and in control.
- 45% ignore or reject rather than listen or seek to understand.
- 43% are more angry and heated than cool and collected.
- 37% avoid or sidestep rather than be direct and unambiguous.
- 30% are more devious and deceitful than candid and honest.
This abrasiveness coming from management not only affects key success metrics, but also has a major domino effect on a manager’s direct reports. The research shows teams led by hot-headed managers tend to also react poorly to stress. Specifically, they are:
- 62% more likely to consider leaving their job than teams that are managed by someone who can stay in dialogue when stressed.
- 56% more likely to shut down and stop participating.
- 49% less likely to go above and beyond.
- 47% more likely to be frustrated and angry.
- 40% more likely to complain.
David Maxfield, vice president of research at VitalSmarts says this study indicates just how impactful a leader’s communication style really is. “No one works in isolation. When under pressure, our actions have enormous power to tip the scales for good or bad,” says Maxfield. “When we react poorly, we don’t just hurt others’ feelings or egos, we hurt their results—we impact their ability to perform.”
The study also highlights an opportunity for positive change. Managers who can stay in dialogue, despite external pressure, see better results from their teams. When a manager practices good communication in high-stakes situations—is calm, collected, candid, curious, direct and willing to listen—their teams are not only happier and more engaged, but they tend to:
- Meet quality standards 56% more of the time than teams whose manager does not achieve dialogue.
- Act in ways that benefit customers 56% more of the time.
- Meet deadlines 47% more of the time.
- Improve morale 47% more of the time.
- Improve workplace safety 34% more of the time.
- Achieve budget 25% more of the time.
And contrary to popular belief, a manager’s ability or inability to deal with high-stakes, stressful situations has nothing to do with age or gender. Neither factor correlated with the skills and behaviors of dialogue under pressure. And researchers say this is a key finding.
Tips managers can use to improve their style under stress
Speak up early. When we anticipate stress or pressure, most of us decide whether or not to speak up by considering the risks of doing so. Those who are best at dialogue don’t think first about the risks of speaking up. They think first about the risks of not speaking up. They realize if they don’t speak up early and often, they are choosing to perpetuate and often worsen the situation—and their reaction to the situation—as they begin to work around the problem.
Challenge your story. When we feel threatened or stressed, we amplify our negative emotions by telling villain, victim and helpless stories. Villain stories exaggerate others’ negative attributes. Victim stories make us out to be innocent sufferers who have no role in the problem. And helpless stories rationalize our over- or under-reactions because “there was nothing else I could have done!” Instead, take control of your emotions by challenging your story.
Create safety. When communicating while under pressure, your emotions likely hijack your positive intent. As a result, others get defensive to, or retreat from, your tirade. As it turns out, people don’t get defensive because of the content of your message, but because of the intent they perceive behind it. So, when stressed, first share your positive intent. If others feel safe with you, they are far more open to work with you.
Start with facts. When the stakes are high, our brains often serve us poorly. To maximize cognitive efficiency, we tend to store feelings and conclusions, but not the facts that created them. Before reacting to stress, gather facts. Think through the basic information that helped you think or feel as you do – and use that information to realign your own feelings and help others understand the intensity of your reaction.
13—3 Reasons to Start a Business Before the End of the Year
If you’re planning to start a business in 2019, Guidant Financial, a leader in small business financing, says it’s not too early to begin the process now, especially because there are big benefits to getting started on a business ownership journey before the New Year. Here are some tips from Guidant about the advantages of starting now from a funding perspective.
“People often assume that it is a good idea to wait until the beginning of the year to start a new business, when in fact there are clear advantages to starting now. Each year we are able to assist entrepreneurs in December, making real differences in helping them achieve success with their new business moving forward,” says David Nilssen, CEO of Guidant Financial.
Top 3 reasons to start before the New Year:
- 401(k)s are at their highest annual value at year’s end. The market is moving into a period often referred to the “Santa Claus rally,” when 401(k)s may be near their highest annual value. Even with taking into account the recent volatile market activity, it remains near all-time highs. If using your retirement funds to buy a business (401(k) business financing) is of interest, the end of the year may be the best time to get started if a person wants to make the most of the funds in a nest egg.
- Interest rates are still affordable. SBA loans continue to be an extremely affordable way for business owners to secure capital, with prime interest rates just over 5%. Even with rate hikes this year, rates haven’t been this low since the 1950s. In fact, Guidant’s been averaging a 96% closing rate on SBA loans.
- Sellers are more motivated to make a deal. If you’re interested in buying an existing business, now may be the best time to negotiate a deal. Many entrepreneurs who are selling their businesses around the holidays are hoping to close their books by the end of the year. If a person is able to move quickly to close the deal, the seller may be willing to lower the price or offer other perks.
Starting now also allows you to Take advantage of end-of-year savings. It’s not just consumers who can benefit from the many sales and coupons offered this time of year. As stores prepare to clear inventory, business owners can save on office supplies for the new business.
When a person is ready to take advantage of these benefits and start on the entrepreneurial journey, securing business financing should be the first step. Similar to buying a home, getting pre-qualified early in the process allows a person to scope out the perfect business that fits their budget and lifestyle.
To learn more about pre-qualifying, Guidant Financial can help. Go here.
14—All About Patents: An Entrepreneur’s Guide
Guest post by Solomon Ali, cofounder, Revolutionary Concepts
What entrepreneur looking to hit it big isn’t searching for that next “patentable” idea? Your appetite has probably been whetted just reading that first sentence. Thoughts of unending royalty streams pouring into your bank account, the opportunity to create generational wealth and leaving your indelible mark on humanity all make obtaining that next big patent an irresistible and worthy goal.
On the flip side, history is riddled with brilliant minds who broke new ground, and swiftly had their inventions stolen out from under them because they failed to secure the right patent at the right time. Women and minorities have been particularly vulnerable to this throughout history. A 2013 Mother Jones article, Ladies Last: 8 Inventions by Women That Dudes Got Credit For, cites women who broke new ground, inventing everything from the ability to solve mathematical equations using computers to the iconic Parker Brothers’ game, Monopoly.
The when, why and how attached to patents can make or break your dream of turning that lightbulb idea into currency. The costs associated with patenting your technological or creative boon, successfully bringing your product to market and compelling larger companies to come to the table and negotiate a royalty deal rests in how you proceed.
Below is a “How To” guide for successfully navigating the world of patents.
Master the art of trend forecasting (or onboard someone to do it for you): Staying ahead of market trends in your industry, and forecasting what will be in demand in the coming 5-10 years is a non-negotiable skill. Having a team member whose sole job it is to forecast industry trends and bring them to your attention for potential patentability and profitability is key.
Determining if your idea is patentable: There are some key questions regarding patents that must be answered before moving forward. The questions below will establish patent viability:
- Does my idea meet a specific demand?
- Does my idea solve a current or emerging problem?
- Is my idea in line with where my industry is going?
After answering the above questions, onboarding a seasoned patent attorney who can act on your behalf to do proper research, filings and acquire a patent from the U.S. patent office would be your next step. There are different classifications of patents, including but not limited to; provisional patents, utility patents and design patents. Your attorney should be able to advise you on which type of patent to use. Another important patent classification to take note of is a “Closed” patent versus an “Open” patent. If your plan is to be able to augment an existing patent in the near future, using claims, you will want to file for an Open patent. If you choose to file for a Closed patent, you will not be able to add to that patent simply by filing a claim. You will have to acquire other patents through a legal acquisition process in the case of a Closed patent, to add the original patent. A patent attorney can advise on whether an Open patent or a Closed patent is the right decision for your idea or invention.
Know your path to monetization: A solid strategy for monetization equals potential profitability. Patents can be licensed, sold or directly brought to market. In certain cases, parties that infringe upon your existing patent can be converted into licensees. The best-case scenario is a licensee whose sole job it is to monetize your patent on your behalf.
Options for choosing a patent attorney or going it alone: The most seamless way to file patents correctly is to have an experienced attorney assist you in the entire process. The most effective way to find the right patent attorney is through your personal or professional network. Seek referrals for an attorney if one is not available directly available to you. The most important element is an attorney that has relevant experience and a proven track record in delivering results. Ultimately, you get what you pay for. Avoid paying any fees upfront until you have an idea of the track record of the professional that you are using. And beware of professional stall tactics which elicit fees before anything tangible is delivered.
Alternatively, you can search AmericanBar.org to locate pro bono intellectual property attorneys in your area to see if there may be a pro bono patent attorney who is able to conduct research on your behalf and assist you in filing your patent. The website Nolo.com provides some step-by-step How To information for those who choose to apply for their patent directly through the United States Patent and Trademark Office.
Bringing large companies to the table (negotiating your royalty deal): A patent provides a means to protect your intellectual property. Your attorney’s goal is to establish barriers to entry, wherever you intellectual property is infringed upon. The end game is to establish licensing relationships, whereby other parties pay for the right to use your patent/intellectual property. This party (or parties) would be serving as a licensee of your technology/intellectual property. Not for the faint of heart, many licensing agreements are born out of litigation or the assertion to litigate. Your patent attorney will act against anyone that may be infringing upon your intellectual property rights. Once this precedent is established, your attorney should be ready to initiate litigation proceedings to bring anyone to the table that might be infringing on your technology. One possible outcome of litigation is that the infringing party or parties would then negotiate to legally use your technology by licensing it. Licensing means royalty income streams.
Licensing your patent and collecting royalties: Your team, including a knowledgeable patent attorney, will This not only creates a revenue stream, but also ensures that there is an on-going process of adding additional intellectual property to the original patent, creating a perpetual licensing income stream. This methodology not only adds value to the original patent but creates opportunities for licensing to additional companies. Companies approached may be multi-billion-dollar behemoths. It is only by following the methodology above can a company blunt efforts to take their technology and can proceed forward to prosper in the ultra-competitive world of patents.
If using an open patent, then additional intellectual property can be added using claims to add more intellectual property to the patent. Other ways that patents can be added to your financial portfolio is through acquisitions – in plain English, buying up other people’s patents. This is typically a way of adding additional intellectual property to a patent portfolio (collection of multiple patents). This is the primary methodology that is utilized when dealing with a closed patent. A technology belonging to a third party is identified, they are contacted, an agreement is made for the acquisition of the stated patent
How does a startup use this information on their business strategy?
The preliminary business strategy must be based upon addressing a need or solving a problem. This provides into a place for this product within the current market. It also addresses a potential need that might also arise as the marketplace evolves. The information above will guide how you take the technology to market, monetize or even deal with competitors within the market space. How to build a team that allows you to capitalize on patents. Most importantly within the business strategy is a focus on team building which will allow for the completion of all components associated with the getting a patent and monetization. Team building is essential for creating patents.
Patents and A.I. technology: A.I. allows for more information to be gathered for your end customer. More information can be gathered to create a truly personalized experience that meets the needs of the individual consumer. More devices will inevitably be connected to the internet that feed information to the A.I. on the user preferences, needs and wants (Samsung – allows you to connect 250 devices). Along with the AI expect faster access to the internet. More information gathered over a shorter time. Based on increased information the technology will be able to anticipate what you need. The technology becomes an extension of the individuals need, wants and expectations.
Quick Takes
15—Vote for Main Street
Independent We Stand, a national small business movement , is asking business owners, Main Street organizations and consumers to nominate and vote for local Main Streets across the country in an online contest beginning February 25, 2019 and ending with the announcement of the winner on June 3. The winner of the annual America’s Main Streets contest $25,000 in cash and additional sponsor-related prizes for Main Street improvements. Contest timeline:
- Nominations & quarterfinalists voting: February 25 to April 21
- Semi-finalists Voting: April 29 to May 26
- Winner announcement: June 3
- Winner event: on or around July 4
To nominate your favorite Main Street and begin voting, go here, but you have to wait until 10 am EST on Monday, Feb. 25.
16—Don’t Worry, Be Happy
Check out this list of the happiest U.S. cities to live in.
Cool Tools
17—Managing Expenses
Expensify, expense management software, just launched two new plans, Track and Submit, for individuals looking to store and organize their receipts. Freelancers, entrepreneurs, real estate agents, and those who need to track their business expenses for Schedule C tax deductions will love Expensify’s Track plan, which allows users to keep their receipts in a central repository accessible by their accountant. Employees frustrated with their current expense process can sign up for Expensify’s Submit plan to send receipts and expense reports directly to their manager, even if their company doesn’t currently use Expensify.
Kelly Johnson, National Practice Leader, Business Services & Outsourcing at BDO says, “Expensify’s new offerings allow our self-employed clients to quickly create a repository of SmartScanned receipts and expenses that can be easily shared with our team in real time, saving both parties countless hours of manual entry and streamlining accountant-client communication.”
In addition to the two new plans being offered, Expensify updated their Team and Corporate plans to Collect and Control respectively to more accurately convey who each plan is meant for.
“Track, submit, collect, and control are four key actions that focus on the role of the two most common types of Expensify users—individuals and administrators—and makes obvious the relationship between the two and how they interact with the product,” says David Barrett, founder and CEO at Expensify. “With our new nomenclature, we’re confident that our users are better equipped to make smart decisions about what plan and functionality suits their needs best as related to their expense management goals.”
While Expensify’s Collect plan is for administrators who are looking for a simple receipt and expense solution for their growing team, Control provides accountants additional audit and compliance features needed for big companies.
All four plans—Track, Submit, Collect, and Control—offer a curated set of features for solving a particular goal, as described by the plan names. For more information on plans or to sign up, go here.
18—Connecting Big Business and Freelancers
Microsoft just launched its Microsoft 365 freelance toolkit and is working with Upwork as its launch partner. The toolkit is an integrated workforce collaboration solution that helps enterprises work with freelancers at scale and is powered by Microsoft 365 and Upwork Enterprise.
Enterprises are increasingly recognizing the need to transform the way they work in order to compete in a global economy. While enterprises today spend $3.5 trillion on contingent labor, existing models for engaging external talent are outdated and restrictive.
The toolkit provides tools, templates and best practices to help organizations effectively launch, execute and scale an enterprise freelance program. Built-in product features and integrations with Microsoft Power BI, Teams, SharePoint and Flow guide enterprises through the freelance engagement process.
You can read more about the collaboration here.
19—Free Image Compression Tool
Compress PNG/JPG is an online free tool which helps you compress your images (jpeg or png). Most of the time using image compression tools not only reduces the size of an image, but decreases its quality too. This tool enables you to keep the quality as is, while decreasing image size.
Business stock photo by SFIO CRACHO/Shutterstock
