10 Things Entrepreneurs Need to Know
By Rieva Lesonsky
1) The Rise of the Freelance Workforce
According to SCORE, the nation’s largest network of volunteer, expert business mentors, 34% of the U.S. workforce (54 million people) consists of freelance workers. Many freelancers rely on online talent marketplaces, mobile apps and co-working spaces to help them work more efficiently. And 69% say the Internet and social media have expanded networking opportunities.
The ages of freelance workers vary widely. Of the total freelance population:
- 30% are Millennials (age 21-34)
- 33% are from Generation X (age 35-50)
- 29% are Baby Boomers (age 51-68)
- 8% are seniors (age 69+)
What are the benefits of independent employment?
- 61% like controlling their own schedules
- 58% enjoy the flexibility
- 54% like being their own boss
- 48% like doing what they love
- 38% appreciate the extra income
Of course there are challenges for freelance entrepreneurs. In addition to facing higher taxes than salaried employees (because they’re taxed as both an employee and an employer) other challenges include:
- Lack of steady income (50%)
- Trouble finding work (47%)
- Unpredictable payment schedule (31%)
- Uncertainty about what skills are in demand (23%)
- Trouble finding affordable benefits (21%)
2) SMB Marketing Budgets
SMBs are optimistic about the economy and their sales outlooks over the next 12 months, according to Thrive Analytics’ 2016 Local Pulse Report. The bi-annual study revealed local marketing budgets continue to rise with 42% of SMBs increasing theirs. Top growth areas include mobile marketing (49%), online display (44%) and paid search (44%) up from 33% last year.
Social Media is a must-have for local business marketing
While only 60% of SMB survey respondents have a website, 80% use social media including Facebook (70%), Twitter (32%) and LinkedIn (26%). SMBs expect social media to:
- Generate leads (70%)
- Build awareness (57%)
- Engage their customers (57%)
But only 19% have paid for social media advertising.
Mobile=high growth area
Although 49% say mobile marketing is their top growth area, nearly half of their websites are still not mobile optimized and most do not have a mobile strategy. Additionally, SMB adoption of mobile payments continues to lag—only 38% of businesses can accept mobile transactions.
Other study findings:
- SMBs will allocate on average 14-15% of their total expenses to marketing-related activities
- Currently 36% of businesses utilize online ratings and reviews
- SMBs biggest hindrances to growth:
- Lack of funding (43%)
- Lack of resources (32%)
- Not investing enough in marketing (29%)
3) The Ultimate Guide on How to Open a Restaurant
So many entrepreneurs want to open a restaurant. If you’re one of them OpenTable, the world’s leading provider of online restaurant reservations, wants to help you. It recently released an ebook How to Open a Restaurant: The Modern Restaurateur’s Guide to Starting & Growing a Restaurant Business, to provide prospective restaurant owners with a roadmap for success.
The restaurant business is not an easy one—60% of restaurants fail within the first year and 80% within five years.
OpenTable partnered with Alison Arth, founder of hospitality consulting firm Salt & Roe, to create this essential guide of do’s and don’ts
You can read highlights from How to Open a Restaurant on OpenTable’s blog Open For Business, which helps aspiring and current restaurateurs succeed with fresh ideas, best practices, tips and resources.
In the guide you’ll find information about:
- Business planning & funding
- Finding a location & signing a lease
- Branding, designing & construction
- Staffing & training
- Purchasing, pricing & menus
- Technology & OpenTable
The company is also launching its OpenTable Restaurant OPEN 2016 contest, which offers restaurant industry professionals the chance to get their concept off the ground by winning the “Ultimate Restaurant Starter Kit.” Restaurant professionals nationwide may participate in the contest by downloading the ebook and submitting their idea(s) via an online entry form for a chance to be selected as a finalist. Submissions will be from now to April 1, 2016.
OpenTable will select three finalists based on the entries received by the deadline. The finalists will then launch a Kickstarter Project to raise funding for their restaurant concept, and the Project which raises the most funds will win the “Ultimate Restaurant Starter Kit.” The Kit is valued at close to $40,000 on top of any Kickstarter funding raised, which has a goal of $35,000.
4) Good Things Come in Fancy Packages
Does packaging make a difference to ecommerce shoppers? According to a survey from Matt Zajechowski of Digital Third Coast and Shorr Packaging, only 11% of ecommerce customers are completely satisfied with the packaging they receive. This matters because your packaging is the first tactile experience an online customer has with your brand, so it is important to make a positive first impression. The survey also shows returning customers spend on average 67% more than first-time buyers, making that first impression all the more important. Premium shoppers (customers who spend more than $200 a month) place added value on custom packaging design. Infographic courtesy of Shorr.com.
5) Main Street is Feeling Strongly Optimistic
In its recently released first study of America’s small business sector, the Allstate/USA TODAY Small Business Barometer shows a strong climate for small businesses in the country overall and a groundswell of optimism among local entrepreneurs with 53% saying rapid innovation and an improving economy make now the best time ever to own a small business.
The Allstate/USA TODAY Small Business Barometer produced an overall score of 61 for the country’s small business sector, which rates as “strong” on the Barometer’s 0-100 scale. That ranking was reflected in the majority of cities across the country, with scores in 25 major markets ranging from 57 in New York to 64 in Indianapolis and Orlando.
The Barometer evaluated small business owners’ outlook in: capital, commodities, customers, innovation, labor, regulation, technology and optimism and weighted the scores to determine a final ranking based on the following ranges: “excellent” (81-100), “strong” (61-80), “solid” (41-60), “fair” (21-40) and “challenged” (0-20).
With a national score of 79, optimism received the highest total of any of the eight indicators. In particular, the Barometer revealed optimism to be extremely high among black business owners (100), Hispanic business owners (87), other minority business owners (92) and women business owners (85).
Some key findings:
Optimistic & confident
- More than 50% say there’s never been a better time to own a small business
- 89% believe the benefits of owning a small business outweigh the challenges.
- Optimism is especially high among women (85) and minorities (92)
- 52% tried a new business practice in the past three months.
- 38% tried new technologies, but reported that financial barriers—higher costs, taxes and regulations got in the way
- 80% say their businesses have grown in the past year
- 61% say their businesses are doing “well” or “very well”
- 31% plan to hire workers within the next three months
- Get tremendous enjoyment from being their own boss 49%
- Flexible work hours 35%
- Get satisfaction from creating something all their own 22%
- Following their passion 22%
- Motivated by money 20%
- Getting new clients 54%
- Not taking a salary 41%
- “Burdensome” regulatory climate 40%
- Frequently missed spending time with family or friends 40%
6) Workplace Satisfaction & Productivity
Employee turnover is an expensive problem for U.S. businesses ($11 billion in losses annually according to Bloomberg BNA) and this issue is likely to continue into 2016. Dissatisfied workers who leave their jobs cost employers additional time and resources spent on staffing and training.
To address this issue, employers need to identify what their workers’ pain points are. According to recent research revealed in the 2016 Industry & Productivity Perspective Report, commissioned by Bolste:
- 28% of working Americans will consider changing jobs this year, with an additional 15% speculatively looking for new opportunities
- 26% are unhappy, unmotivated, not stimulated, bored and stifled, or indifferent with their current job
- 22% say half or more of work emails they get are irrelevant to them
- 20% don’t think their employers value their ideas
- 14% say new employees at their companies are faced with too many meetings
You can download you copy of the report here.
7) State of Women & Small Business
A revealing report from American Express OPEN shows that while 78% of women business owners say growth is a priority for them, they are not following through with hiring (58%) and capital investment plans (64%) at the same rate as their male counterparts (61% and 77% respectively).
On average, women business owners have been in business 17 years, employ 12 employees, have experienced 19.8% revenue growth over the last three years and had yearly revenues of $1,130,000 in 2014.
The women entrepreneurs who plan to make capital investments will invest in:
- Computer and systems software/additional software licenses (37%)
- Office furnishings and equipment (22%)
- Manufacturing/production equipment (21%)
- Real estate (16%)
Women business owners are far less likely to invest a substantial amount of personal finances to grow their businesses (62%) when compared to small business owners overall (68%) and male business owners (72%). However they are very likely to invest a significant amount of personal time to grow their businesses (89%). And 57% spend a larger percentage of time working on their businesses to drive growth rather than in their businesses managing details.
The top ways they plan to grow are expanding their product/service offerings (43%) and expanding the market for their current products and services (33%). So in the next six months they plan to sell more of the same products/services and to introduce new ones (20%, each).
Challenges to Growth
The biggest challenge faced by women business owners:
- Uncertain economic conditions (24%)
- Cash flow
- Don’t have enough cash on hand to win new business (18%)
- The ability to accurately track cash flow (15%)
- Accounts receivable (14%)
- The ability to pay bills on time (12%)
- The ability to meet payroll (7%)
Access to Financing & Credit Cards
- 91% are confident they can access the funding needed to grow their businesses
- 74% say credit and charge cards are an important tool
- 78% who use credit cards for business expenses say credit card rewards are important to their businesses. The most valuable rewards:
- Cash back (76%)
- Airline miles (31%)
- Travel discounts (27%)
- Gift cards (27%)
8) How SMBs Can Implement Sponsored Social
Guest post by Ted Murphy, founder, CEO and Chairman, IZEA
Understand Your Target & Goals
Small businesses looking to leverage Sponsored Social should first outline what their goals are—is it to drive awareness, sales, site visits, etc.? As part of this process, businesses should know their target consumer inside and out. Everything from who they are, where they live, how old they are, which social platforms they are on, their personality characteristics, interests, and so forth. Sponsored Social can be highly effective with very niche audiences, and is most effective when social influencers are able to tap into a clear audience.
Allocate Budget to Social
For small businesses, it is often daunting to allocate budget to Social as it can feel like there are other marketing or business initiatives that deserve priority budget. However, it is no longer possible to deny the influence of Social Media. Sponsored Social continues to grow in popularity. It’s an incredibly effective way for small businesses to reach their target consumer in an authentic way. In fact, according to IZEA’s 2015 State of Sponsored Social Study, consumers are noticing sponsored posts daily—up to 3 per day—and also perceive these messages to be more effective than any other form of advertisement.
Pick the Right Creators
When choosing who will represent your brand online, choose wisely. Conduct some recon on the creator’s social networks and blog to make sure their content is relevant, meaningful, and in a voice you are comfortable with. Do they look like they would be your consumer target? This will also give you some insights into their followers to ensure their audience is the right match for your brand.
Also, check out the creator’s reach and engagement. Reach is an important factor, but reach alone can be misleading. The goal should be to touch a niche, specialized audience, and do so with quality engagement. Creators that foster strong, dynamic engagement are often the key to how a campaign builds momentum and buzz outside of the Creator’s owned social networks.
Reap the ROI
As small businesses continue to look for ways to effectively target and reach consumers, Sponsored Social and content marketing will only continue to rise. Sponsored Social is effective because it’s authentic and breaks through the clutter—it opens the doors to tap social creators who have built-in credibility, creativity and engagement.
9) The Joys of the Employee Break Room
What’s the point of having a solid business strategy if you have unhappy employees in charge of its execution? A good strategy matters—a great culture is essential. This is especially important to the influx of Millennials who are constantly changing the workforce as we know it.
What is the secret to creating a company culture filled with happy and productive employees? How can you attract and retain top talent? Well, according to Howard Chapman, Royal Cup, Inc.’s Office Beverage Division president, it all starts with the break room. Chapman, who works with businesses across the country to tailor break room solutions to fit the needs of the culture they’re creating, has identified a few break room essentials that almost instantaneously boost office morale and positively contribute to a culture befitting of a highly successful organization. Take a look:
Free Beverages: Providing beverages like coffee, water or tea as a perk is a relatively small investment that yields a significant return. For example, caffeine increases attention spans, improves focus and boosts mental energy so your employees will get more done and feel rewarded while doing so. Plus, stocking your break room prevents time loss while employees travel off-site to get their coffee fix.
How to differentiate: Your employees are consumers, and consumers’ expectations have shifted over time. A standard pot of black coffee won’t excite anyone who purchases more complex, milk-based coffees or loves cold or nitro-brewed coffee. Offices with the most competitive break rooms provide high-quality single serve or “bean-to-cup” systems where employees can interact with a digital interface, grind beans on-demand and create their own signature drinks, whether it be a latte or mochaccino. And remember, what’s “cold” is “hot” right now—iced tea, iced coffee and simple purified water will help set your break room apart.
Condiments: What’s the point of offering sensational coffee if employees can’t have it the way they want it? Providing creamer, sugar, cups, stirrers, alternative sweeteners and even flavor shots can go a long way in fostering a great break room culture.
How to differentiate: A powdered creamer is better than no creamer, but to set your break room apart you must have flavored liquid creamers and real half and half. Additionally, stocking high-quality paper cups made of eco-friendly materials will be appeal to environmentally-conscious employees and visitors to your break room.
Snacks: A well-rounded snack offering is a perk that your employees will truly appreciate. Healthier snack options can be a sure fire way to avoid the sharp spike in insulin and inevitable crash that tends to follow eating sugary snacks. This allows workers to curb their hunger and improve productivity while avoiding the mid-afternoon rut.
How to differentiate: Over the past few years, over 30,000 businesses differentiated themselves by have installing micromarkets within their office break rooms. These free-standing, self-service “shops” create an environment where employees can choose from number of healthy, fresh items, quickly checkout and then begin socializing with their colleagues.
10) Need an Accountant?
At one point every small business needs an accountant. Countup, the first dedicated online marketplace for accounting services, aims to make the search for one easier. Last summer cofounderNodar Janashia laid the groundwork for Countup by curating a network of 150 startup-experienced small business CPAs. The company, depending on your needs, will “match” you with several accounting professionals for you to choose from. The process is free.