The 4th Industrial Revolution is upon us!
How are we going to do that?
You have a 4-year college degree. You’ve got a good job working for a company. You are ascending the corporate ladder. You think your future looks bright.
Here is an inconvenient truth. Your college degree is only the beginning. If you are to be successful in this new and changing economy, you must continue learning new things for the rest of your life. And…you’re on your own.
Our modern Colleges and Universities are busy educating students to work at a job for some type of organization. What happens to you if those jobs are no longer there.
There are two trends under way right now that pose huge challenges to almost every worker in the U. S. Economy.
Number 1: The Rise of Robots and Technology
The current political mantra peddled in the media today is that globalization and foreign trade are causing huge losses in the U. S. Job market.
It isn’t true.
Yes, the U. S. Economy lost manufacturing jobs from 2000 to 2010. But, studies reveal that 87% of those job losses were due to improvements in productivity generated by technology. ( http://ow.ly/IQTn30cMTh1 )
It gets worse. According to Futurist, Thomas Frey, ( http://ow.ly/Ax3z30cOxnM ), there are 2 billion (yes, that’s Billion) jobs disappearing by the year 2030. That represents 50% of all the jobs on the planet. To be done by robots and new software technology.
Number 2: The Rise of Freelancers
According to Forbes Magazine ( http://ow.ly/zGDB30cOxQi ) there are 53,000,000 freelancers in the U. S. Labor force today. By 2020, 50% of the labor force will be freelancers. 50%!
Even big companies like IBM and NASA are starting to do this today.( http://ow.ly/pNev30cWysR)
Does this mean we’ll all be unemployed?
No! And this is not meant to be a doomsday report. But, it is intended to be a wake-up call. Almost every job holder in America is going to be affected by these trends. Knowing what’s coming gives you an opportunity to be prepared. Fore warned is fore armed.
Here is the good news.
First, Robots will not replace everyone. There will still be plenty of jobs for humans, but they are going to change.
According to a report published by the Pew Research Center (http://ow.ly/poHm30cOz7R ), there is an argument that, “many jobs require uniquely human characteristics such as empathy, creativity, judgment, or critical thinking—and that jobs of this nature will never succumb to widespread automation.”
This is where the new jobs will come from. Those jobs don’t exist today. And…the chances are they will be taken by Freelancers. I believe Freelancing is the career of the future.
How do I do That?
Yes, I know the idea of becoming a Freelancer can be frightening. The first time I went out on my own it was 1983. I was totally unprepared emotionally. I panicked when I realized I was no longer getting a paycheck. The project didn’t go well at all. I eventually went back to working for a big company.
Today it’s different. If you educate yourself and prepare emotionally, you should be fine. Our economy is rapidly becoming a “gig” economy. That means you will be working from one gig to the next.
You should start by educating yourself.
The Advantages of Lifelong Learning.
Let’s start with what you are doing now. I am going to assume you like the job and industry you are in. You have spent years learning about it and you are good at what you do.
What are the aspects of your job or industry segment that could be automated? Think about all the repetitive grunt work that could be done by a robot or a computer software program. Think hard about the people that could be replaced. Get wild with it.
Now, what are the aspects of your job that need human contact? What about judgment? Listening to customers, clients, or other departments? Deciding how to improve the computer programs? What about creativity? Thinking up new ways for the software programs to accomplish new things? Consulting with companies on picking the latest technology to use?
How many people could be displaced?
Make a list.
Go to the Library. Use databases at the library to find research papers.
Go to Amazon. Get books.
Google trade magazines, white papers, and case studies.
Find MOOCs (Massive, Open, On-line, Courses) in your field and take them.
You have to become the expert in how companies in your industry are going to employ the latest technology. Because when the changes start to come, it won’t be just the company you are working for now. It will be every company in your industry. If you are a Freelancer, you can hire out to lots of them. At a very good price.
And…you can’t stop. Freelancers have to be involved in lifelong learning. You have to stay ahead of the curve. You have to keep reading, keep thinking, keep interacting with other Freelancers in your field.
It is estimated now that the entire body of human knowledge is doubling every 13 months ( http://ow.ly/Tg6J30cWD7v ). IBM estimates that in the near future, this doubling will occur every 12 minutes.
It’s All up to you
Here is your challenge. It’s up to you. You have to do this on your own.
You must start today. If you wait, you’ll be one of those out on the street wondering what the hell happened.
You can’t go to school for this. Our education system is woefully behind on these issues. They don’t have classes for jobs that don’t exist today. Creating those classes could be your one of your jobs.
There are huge opportunities here. If you start now, think now, read books and papers now, develop ideas now, you’ll be the one getting the well-paid gigs.
It’s a race. And to the victor belongs the spoils.
Why are Social styles important?
This is the 4th post in the series on Social Styles. In my previous posts, we discussed how essential understanding these styles is to building trust with prospects, customers, clients, employees, and partners. Your success depends on these relationships.
Today I want to discuss the Analytical Social Style.
What is the Analytical Social Style?
The Analytical Social style is the most easily described and may be the most misunderstood of all the styles. Think of a scientist, an engineer, or an accountant.
Analyticals are totally task focused and will ask a lot of questions. They are fact gatherers and number crunchers. They want to make sure they have all the information before they make a decision. This tendency sometimes makes them seem indecisive because there is always more to know.
They are reserved. Their speech is proper, formal and deliberate. They make few gestures. They are good listeners.
They take the time to develop personal relationships.
They are excellent planners and organizers.
Analytical tend to move slowly and with precision. They tend to think the process of reaching a decision is as important as the decision itself.
Their goals are making the right decision in the right way. They want to enhance their reputation as a technical expert.
If you try to move them too quickly, it will make them very uncomfortable and may damage the relationship.
Analyticals have much in common with Drivers and Amiables. As you can see from the grid, they are diametrically opposed to Expressives.
What is dialogue with an Analytical like?
Analyticals love slow, orderly, fact-filled presentations. Here’s what you can expect:
- They expect you to be prepared
- Ask detailed fact-oriented questions
- Stay focused on the topic
- They want flexibility. Give them time to consider alternatives to what you present.
- Give them facts supported by data.
- Listen carefully and take notes. Give them time to finish and ask follow up questions.
- Offer confirmation of what you bring to the relationship.
How do you approach an Analytical?
Approaching an Analytical may seem difficult as they often appear remote. But, doing a little homework will smooth the way.
- Do some research before you go. Find out as much about their situation as you can.
- Don’t engage in a lot of small talk in the beginning.
- Adopt a predictable, slow, task oriented approach
- When you make a proposal, try to make sure it aligns with their current belief
- Support your proposals with a lot of facts and figures. The more data the better.
- Try to state your opinions in the form of a question, “What are your thoughts about X?”
As business owners, you will be dealing with all these Social Styles. Understanding the ways to engage them will deliver amazing results in the form of profits on your bottom line.
Note: The material in this blog was developed from information featured in “The Social Styles Handbook” To find out more, please click on the link below to order Larry Wilson’s great book
(Full disclosure, I am a Powell’s affiliate)
Social Styles are important because?
In my two previous posts ( http://ow.ly/Zfpn30bKoSK ) (http://ow.ly/1HcK30bYKwv) we have discussed the importance of understanding social styles. If you are engaged in business learning to successfully communicate with your employees, prospects, customers and clients is the key to your success. Knowing your social style and the attributes of the other social styles is vital in building solid relationships.
Today, I want to discuss the Expressive style.
What is the Expressive Style?
Expressives are…expressive. They are open, energetic, excited. They love to share visions and ideas. They love to talk about themselves. They like an audience and applause. They love to tell people what to do. They are people oriented rather than task.
They are risk-takers, competitive, creative and enthusiastic. They love to get results through people. Relationships are very important to them. They love the exchange of ideas and want to get to know you personally.
Their primary motivation is recognition. They want to stand out from the crowd
Expressives want to know the big picture. They want a good grasp of the situation before getting down to the details. They want to know the essential details, but don’t care about getting too deep into them. They want to collaborate with you on things that support them.
Expressives have much in common with Drivers and Amiables. They are diametrically opposed to Analyticals.
What is dialogue with an Expressive like?
Here’s what you can expect when engaging with an Expressive.
- You should find out about their visions and how they expect you to help.
- Find out what other people need to be involved in accomplishing their vision.
- Expressives are usually very open about sharing information they think you need.
- They like a fast paced, focused discussion.
- They are casual about their use of time.
- Watch for openings in the conversation where you can slide in questions.
- Figure out a way to show support for their ideas and decisions.
What is the most effective approach to an Expressive?
When approaching Expressives, you need to quickly establish who you are, what you offer, and what they have to gain by working with you.
Other things to include are:
- Stories about people you both know.
- Share “exclusive” information
- Reinforce their vision and enthusiasm
- Take time to develop a personal relationship
- Leave time for socializing
- Talk about their goals and ideas they find stimulating.
Learning how to effectively communicate with other social styles is a simple, yet amazing way to build trusting, solid relationships with your clients. Try it. You’ll be stunned at the results.
Note: The material in this blog was developed from information featured in “The Social Styles Handbook” To find out more, please click on the link below to order Larry Wilson’s great book
(Full disclosure, I am a Powell’s affiliate)
As business owners, we know how tough it is to convert prospects into clients. Here’s a great post by Gregory Ciotti illustrating 7 studies showing you how to do it.
7 Social Psychology Studies to Help You Convert Prospects into Paying Customers
When it comes to converting more prospects into paying customers, it all boils down to how well you understand your buyer’s mind and what they want from your business.
The thing is, your time can’t scale in every circumstance, and there may come a point where you aren’t able to know each and every one of your customers personally. When that’s the case, what’s to be done?
The answer is to turn to rigorously tested research in social psychology.
We’re all different, but in many instances our brains are prone to respond in a very similar manner, and understanding these common elements in the human mind can help you find more ways to ethically move more buyers towards saying “Yes!” to your products or services.
Below you’ll find 7 such studies that will help you understand what makes many of your customers “tick”, and what you can do to create a more effective selling experience.
1. Play the devil’s advocate
Are you familiar with how the term “devil’s advocate” came to exist? It’s actually from an old process the Roman Catholic church used to conduct when canonizing someone into sainthood.
A lawyer of sorts was instructed to be the devil’s advocate for the candidate, taking a skeptical view of their character in an attempt to find holes in their arguments for why they should be considered.
The marketing world has an important lesson to learn from this process.
According to research by social psychologist Charlan Nemeth (and his colleagues), the role of devil’s advocate certainly plays a part in persuasion, but it is not one of creating dissent.
Nemeth concluded that when people are confronted with someone who truly appears to oppose their position (true dissenters), they begin to try and understand their perspective.
Those playing devil’s advocate? They actually increase the effectiveness of the original argument! This is because group members do not take the critiques from the devil’s advocate as seriously, and since the group is now bringing up (and dismissing) possible alternatives or flaws, they are more confident in their original stance.
For marketers, this offers an opportunity: playing devil’s advocate for your own products can actually enhance your persuasive efforts as people see their concerns addressed (and dismissed) before they buy.
The Takeaway: Playing the role of devil’s advocate has been found to increase people’s resolve in their decision making, not hinder it. Be your own devil’s advocate and back up typical objections with solutions for your offerings.
2. Use urgency … the smart way
Creating a sense of urgency in your copy is one of the oldest tricks in the book … and still one of the smartest. To top it off, Cialdini lists “scarcity” as one of the 6 pillars of influence, and it’s easy to see why: great demand leads to great sales.
In spite of this, I have some research that explains how urgency can completely backfire on you and ruin your meticulously written copy.
How can this be? More importantly, how can you prevent it from happening to you?
The research comes to us from a classic study by Howard Leventhal where he analyzed the effects of handing out tetanus brochures to subjects.
Leventhal handed out 2 different pamphlets to participants, both sparing no detail on the horrid effects that the tetanus disease can have on the body.
The difference was that the control group received a version of the pamphlet that had the effects of the disease … and nothing else.
The second group received a similar pamphlet, but theirs had minimal information that indicated where they could schedule an appointment to get vaccinated.
Those who had the second pamphlet (with the sparse follow-up info) were muchmore likely to take-action: the rate that they followed through to get vaccinated was vastly superior to the first group. They were also more engaged with the tetanus information they received.
Even though the follow-up information provided in the second pamphlet wasn’t at all comprehensive, Leventhal concluded that our minds are susceptible to blocking outinformation that evokes a sense of urgency if there aren’t any instructions regarding what to do next.
Those in the first group were prone to convincing themselves that, “I don’t need to worry about this because it won’t happen to me anyway,” whereas those in the second group had less incentive to feel this way because they had a plan to take action and couldn’t put it aside as easy.
The Takeaway: Urgency can be “blocked” by your customers minds if you don’t give them specific instructions on how to solve the problem that you’ve identified. Don’t give vague instructions, tell your audience exactly what to do when the time comes.
3. Highlight strengths by admitting your shortcomings
Is it ever a good idea to admit to your faults? After all, people don’t really want the “real” you, right?
Research from social psychologist Fiona Lee would assert that it is, and in fact, it may be the best strategic decision to highlight your strengths.
The study she conducted looked at companies who admitted to missteps and examined what effect (if any) these admissions had on stock prices. Lee and her colleagues had experimenters read one of two fictitious company reports (both reports listed reasons why the company had performed “poorly” last year).
The first report placed emphasis on strategic decisions. The second placed emphasis on external events (economic downturn, increased competition, etc.).
So what were the results?
The test subjects viewed the first company far more favorably than the second.
Interestingly, Lee found (after examining hundreds of these types of statements, over 14 real companies) that the companies who admitted to their strategic faults also had higher stock prices the following year.
Her conclusions were that admitting to shortcomings in areas like strategic thinking showcased that a company was still in control, despite their faults. Blaming external forces (even if true) created a sense that the company didn’t have the ability to fix the problem (or were creating excuses).
The Takeaway: Customers still don’t want you to overshare irrelevant details. But admitting to honest errors helps your customers understand that you are in control of the situation and not prone to making excuses.
4. Embrace the power of labels
You might think I’m referring to brand labels, but far from it: I’m telling you to label your customers!
Sounds like bad advice, right?
As it turns, the research has shown us that people like being labeled, and they are more likely to particpate in the “group’s” message if they feel included in it.
The study examined the voting patterns of adults to see if labeling them had any effect on their turnout at the polls.
After being casually questioned about their normal voting patterns, half of the particpants were told that they were much more likely to vote since they had been deemed to be more politically active.
(This wasn’t actually true, these people were selected at random)
The other half of participants weren’t told anything.
Despite this random selection, the group that was told they were “politically active” had a 15% higher turnout than the other group!
Our brain seeks to maintain a sense of consistency (even if it’s artificial), and this is why the foot-in-the-door technique works so well even on prepared minds. We enjoy being consistent so much that if we feel apart of a group by being told that we are, it’s still likely to affect our response.
For instance, smart people are obviously going to be interested in an internet marketing course that’s made for smart people, right? The label is at work to make you realize you’re part of a desirable group.
The Takeaway: Even when given an artificial connection, people tend to take action in order to maintain a consistent image if they are labeled as being apart of a group. Don’t be afraid to label, people like being members of groups that they approve of.
5. Make their brain light up “instantly”
There are few things that our brains love more than immediate stimulation.
In terms of your customers, you’re actually looking to do the opposite: in this case the gratification is about getting instantly rewarded by doing business with you, and your copy should remind customers of this benefit at every turn.
When your customers are on the verge of purchasing a product from you (or about to sign up for your email list), they are heavily influenced by how quickly they can receive their desired outcome.
Several Magnetic Resonance Imaging (MRI) studies, including one on nicotine addiction, have shown that our frontal cortex is highly active when we think about “waiting” for something.
On the other hand, our mid-brain is the one that lights up when we think about receiving something right away (that’s the one we want to fire up!).
Words like “instant”, “immediately”, or even just “fast” are known to flip the switch on that mid-brain activity that makes us so anxious to buy.
Researchers have noted that the key to these words is that they allow us to envision our problem being solved right away; whatever pain point we are seeking to fix by buying becomes more enticing if we know we won’t have to wait very long.
The Takeaway: Our brains love “instant gratification” and light up when thinking about eliminating pain points instantly. Let people know that they will be rewarded quickly and they will be more likely to make the purchase.
6. Know how to sell to your 3 types of buyers
Every business (no matter the industry) is going to have to deal with the 3 types of buyers out there.
All other aspects aside, these 3 groups are defined by the “pain” that they receive when purchasing something. Neuroscientists have defined human spending patterns as a process of “spend ’til it hurts!”, so understanding these different levels of paint points is essential to increasing your sales.
According to the research, all customers are grouped into the following categories:
- Tightwads (24%) – people that spend less (on average) before they hit their limit
- Unconflicted (61%) – average spenders
- Spendthrifts (15%) – people that are able to spend more before they hit their limit
Guess who the hardest group of people to sell to is? Since they take up nearly a quarter of your potential customers, you should learn some of the smart techniques to minimize buying pain for your “tightwad” customers.
Fortunately, the secret boils down to utilizing well-written copy.
According to some remarkable neuroimaging studies, minimizing buying pain for “tightwads” (and everybody else) can be accomplished successfully by incorporating the following strategies…
1. Re-frame the value
If I told you that my product costs $1,000 a year, you’d definitely approach with a little hesitation, right?
Right. That’s because $1,000 isn’t peanuts.
What if I told you instead that my product costs $84 a month? Not bad right? If you got enough utility out of it for your business (or for yourself) every month, it would be a very worthy purchase.
The thing is, that’s the same as $1,000 a year!
If you’re offering something that has a recurring cost or that could be broken down into smaller increments, look into how you might be able to incorporate this into your pricing.
2. Reduce pain points through bundling
Neuroeconomics expert George Loewenstein has noted that all customers (but especially conservative spenders) prefer to avoid purchasing multiple accessories if there is an option to complete their purchase in one swoop.
He cites our willingness to upgrade from different car packages, but how difficult it is for the brain to justify each individual upgrade (“Yes, I will pay extra for the navigation… and leather seats… and…”, etc).
Lowenstein would assert that these individual purchases create individual pain points, whereas a bundled purchase creates only one pain point, even if the price is much higher.
3. Sweat the small stuff
We know that “don’t sweat the small stuff” isn’t all that applicable to copywriting, but just how small of a change matters?
In what I’ve named the goofiest bump in a conversion rate that I’ve ever seen, research from Carnegie Mellon University University reveals to us that even a single word can affect conversions.
Researchers changed the description of an overnight shipping charge on a free DVD trial offer from “a $5 fee” to “a small $5 fee” and increased the response rate among tightwads by 20 percent!
Has the word “small” ever felt so big? With a single added word increasing conversions by that amount, I think it’s safe to say that the devil is definitely in the details.
The Takeaway: No matter what business you’re in, you will always have 3 types of customers. Know how to sell to tightwads, they make up a large base of your potential buyers and you can reduce their buying pain with the right choice of words.
7. Make an enemy
In the business world, meaningful connections are paramount to your success.
That being said, you still need an enemy.
Why? When could this ever be a good thing?
Turns out, it’s a great thing if you’re looking to achieve a cult-like addiction for your brand.
In a hightly controversial study entitled Social categorization and intergroup behaviour, social psychologist Henri Tajifel began his research trying to define just how human beings were able to engage in acts of mass hatred (such as the Holocaust).
His findings were shocking to say the least.
Tajifel found that he could create groups of people that would show loyalty to their in-group and outright discriminate against outsiders … all with the most trivial of distinctions!
In the tests, subjects were asked to choose between two objects or people that they had no relation to (one test had people picking between 2 painters). Despite these trivialities, when it came time to dole out REAL rewards, subjects had a huge bias towards their in-group and avoided handing out rewards to the so-called “other guys.”
The thing is, you don’t need a physical enemy, you need to be against a belief or an idea. Copyblogger would assert that real publishers are self-hosted and that well-written content is the centerpiece of the web.
Solidifying your unique selling proposition is as much about deciding who your ideal customer is not as much as it is about defining who they are.
The Takeaway: You’ll never find your brand’s true voice without something to stand against. This doesn’t have to be another brand, but in order to divide your ideal customers into your “camp,” you need to be against some ideal, belief, or perception, the way Apple was against “boring” PC users in their ads.
Bonus Tip: Keep ’em on their toes
Since you’ve made it all the way to the bottom, I’d like to surprise you with a beautiful, free e-book revealing more insightful data on your audience and customers.
All courtesy of the Help Scout team, we hope you enjoy it!
Thanks for reading, I’d also love to hear your thoughts, specifically: which of the above studies did you find the most surprising?
See you in the comments!
Gregory Ciotti is the marketing strategist at Help Scout, the invisible email support software for small businesses who love taking care of customers. Get more data-driven content from Greg by visiting the Help Scout blog.
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You’ve started a business. Now your challenge is to build your brand to attract new customers. Here is a great post by Annetta Powell that tells you how.
5 Effective Brand Building Strategies to Attract Customers
Brand building is an integral aspect of personal and business development. It not only increases the voice and consumer awareness of a brand, but it also gives it an identity and worth. The advent of participatory and interactive platforms has given many businesses the chance to enhance brand awareness and equity. If you have been thinking of building a personal or business brand, then it is important for you to know that brand building takes a great deal of time and resources. In the section that follows, we shall define brand building and also look at different types of brands and the steps to create a successful brand.
What Is Brand Building?
There is no one definition that actually captures the essence of brand buildingin its entirety. Many people think that brand building is all about communicating and exposing your brand. That is just one side of it. The best way we can define it is that it is a process of creating value to consumers. It encompasses all things that consumers know, feel, and experience about your business in its entirety.
Having defined brand building, we shall now look at 3 popular types of brands and what they stand for.
- Service brand- this brand is built on knowledge, culture, and experience that one has with the service delivering agency/company/people. Think of Geek Squad or Molly Maid.
- Retail brand- this brand is built on a mixture of products and service experience. Think of Chick-fil-a, Kroger, or KFC
- Product brand- is built on the experience that one has with a specific product. Think of Nike, Ford, or Sony.
Having looked at the 3 popular types of brands, we shall now proceed to look at steps involved in brand building.
1.) Define Your Brand
The first stage in brand building is defining your brand. This is a very critical step as it ultimately determines what your brand truly stands for. When defining your business brand, you should create a checklist of its core strengths. Similarly, if you’re defining a personal brand, you should look at the skills and expertise that you possess especially those which stand out. On the same token, you also need to know what your brand stands for and what is important for your brand (brand values). Your values should in one way or another show that you are contributing to environmental, social, and economic well-being of consumers. You may not realize some of these important aspects of brand building immediately, until you look at them objectively.
2.) Differentiate and Position Your Brand
Before embarking on brand building, you have to take time to differentiate it so that you can attract attention and stand out from competitors. To differentiate your brand, you have to create a unique advantage in the mind of consumers not merely getting attention by brand building colors or logos or other superficial elements. Once you come up with a unique value proposition, you should use a good branding strategy to position your brand in a way that will help consumers see and appreciate the greater value of your brand over competing ones in the market.
3) Build and Expose your Brand
As I indicated earlier, brand building is not a one off thing. Building a unique and powerful personal or business brand takes time and consistency. To build your personal brand, you have to keep reinforcing your values and skills by taking up new roles and assignments that will give you more exposure. Alternatively, you can use promotional channels, blogs, forums, and social media (LinkedIn, Twitter and Facebook) to create a voice for your personal or business brand.
When building your brand, you should also endeavor to develop brand personality (what people know, think, and say about you). This is what drives or motivates people to identify with and engage with your brand. The truth is; if you execute your brand building strategies consistently, then you will easily establish a pattern that will forever be associated with your brand name.
4.) Personalize your Brand
If you want your brand building campaign or brand to be successful, then you have to personalize it. It is important to give your brand an identity. Let consumers see and experience the personality of your brand in its entirety. Look at your brand as something that a consumer wants to identify with pretty much as they would with their favorite cars, cellphones, or computers.
As you engage in brand building, you should also invite customers to be co-creators of brand values so that they can feel that they also own it and relate with it. Top brands encourage consumer-brand interaction by personalizing products to meet the needs and preferences of consumers. When you personalize your brand, you give consumers reason to participate and engage with your brand for a lifetime.
5.) Review Your Brand
Your brand is not static; it will go through a range of motions in its lifetime. Depending on your brand strategies, your brand will either grow in strength, or remain dormant, or recede with time. In the brand cycle, new events, changes, and circumstances bring challenges and opportunities to enhance the value of your brand or re-establish it. All these possibilities should give you the impetus to take charge of your brand building activities.
As your brand name grows, so do the responsibilities and expectations to continue with brand building. The best way of ensuring brand growth is reviewing your activities and evaluating your successes through metrics such as levels of brand awareness and levels of engagements. Regular reviews will help you seize and exploit new opportunities while upholding your commitment to remain true to your vision and brand strategy. It will also help you steer your brand in the right direction and keep it relevant as you move into the future.
As you can see, brand building is not a one off thing. You have to define your brand, differentiate, present it, and review what your brand stands for from time to time. It is very important to be clear about your branding strategies and how you’re going to implement them. You should also adopt brand strategies that will add value to your consumers and help them develop the right impression of your company and what it truly stands for.
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Running your small business by yourself can be a lot of fun. But, if you grow, sooner or later you will have to hire some help. Here’s a great post to help you decide if the time is right.
Is It Time to Hire an Employee?
If you own your own business and find that you simply don’t have enough time on your hands to be able to do all the things you need to do, you may be asking yourself should you hire an employee?
If you’ve already got employees, your question will be similar, when is the right time to hire another employee? Regardless of the structure of your business, there will be times when you need to make this decision and it’s not always as simple as acknowledging there’s too much on your plate…
To help you figure things out, we asked entrepreneur Kurt Johnson, a Los Angeles resident who has created several businesses including his most recent fitness venture, Swollforlife.com, to help us figure out what to consider before hiring.
Start with a list of advantages and disadvantages
Figuring out whether the time is right, may be as simple as making your own pros and cons list. This is a good first step before you look into cash flow, last year’s financials and your workload. Consider this testing the waters. Here’s an example list:
Advantages of hiring a new employee:
- You’ll have more help to handle the tasks that are overwhelming you.
- A new employee can breathe new life into your business and generate new ideas.
- Someone will be there to share those exciting moments. As Johnson says, you’ll have “someone to high five” when things go right.
Disadvantages of hiring a new employee:
- An employee costs you money.
- There are more tax forms to juggle.
- A new employee requires a big time investment upfront.
- You’ll carry added stress of another person being dependent on your business.
- You’ll need to manage and monitor the new employee.
Once you’ve created your list, and perhaps once the advantages outweigh the disadvantages, you can move on to the next step – genuinely trying to work out whether or not you should hire a new employee.
Should you hire a new employee?
Administrator of the SBA, Maria Contreras-Sweet, believes there are 4 things to consider before you take the plunge:
- What is your vision for your business? Do you really need staff or additional staff or could you do just as well with virtual assistants or temporary workers? At this stage you’ve got to be honest with yourself – do you want to keep the business small or do you want to become a larger business?
- Where do you need help? Review your workload and your project pipeline. Is there anything you could offload on a new employee and if so, what ‘type’ of employee does this work suggest you need to look for? Perhaps a sales rep? Maybe a cashier? Or what about an accountant? Even if your goal is to hire in order to free up your own time, make sure you have a good handle on where that time should be spent so that you can look for someone with the appropriate skill set.
- Can you manage people? This is an important consideration. What have your past experiences taught you? If you believe you’ve got the ability to manage, what about the ability to make a good hiring decision? Do you need help?
- Can you afford it? Right, so this is probably one of the trickier parts. Take the time to build a picture of the costs and overheads your business will incur as a result of a new employee. Some things to consider: wages, unemployment tax, workers compensation insurance, medicare and social security taxes, recruitment and training costs, benefits, payroll costs, new equipment, software licenses, etc. Once you’ve got a realistic idea of the potential cost of a new employee, try to align this cost with the benefits you’ll get from that new employee. How much new work will you be able to take on? Take a look at your income and expenses from the previous year to assess whether you have the capacity to afford someone. If it looks possible and profitable, consider your pipeline and cash flow. Can you live with not being profitable in the short term or will this cripple your business?
If you’re still unsure about whether or not you can justify hiring an additional employee, it may be worth sitting down to to see if you can pinpoint those signs that say you really should bite the bullet.
Four signs you’re ready to hire
1. When you turn down work
If you have to turn down work because you can’t fit another project into your schedule, it’s a good indicator that your business is ready for help.
“If you’re growth is being inhibited by the hours in a day that you can work, then it’s time to start thinking about another employee so you can retain all available revenue,” Johnson says.
No business owner doesn’t want to earn more money, but some don’t want the added work or complications that come with hiring someone new. Again, you’ll need to be honest with yourself.
2. If you identify a new revenue stream but need additional skills
Diversifying your business is a smart move. Along the way, you’ll probably find a new source of revenue that you could tap, but might lack some of the skills necessary to really dive in.
“Sometimes you will come up with great business ideas that you are just not personally equipped to execute on,” Johnson says. “This is a great problem to have and the right employee can truly make the difference in taking your business to the next level.”
3. If complaints are rolling in
If you’re spreading yourself too thin, it shows.
If customers start complaining about your work or about your timeliness, it’s a sign that you’re spread too thin. If you’re not able to commit yourself to each and every project, you’ll want to hire an additional employee. Bad word of mouth can damage your reputation and revenue, so you should hire someone soon if this is happening at your business. Even if you are just bringing someone in to answer your phones, field emails, or tackle your accounting practices, you will get those hours back to commit to clients.
4. When you have a steady stream of revenue
It takes a while for businesses to gain a steady stream of income, and you don’t want to take on an employee until that happens. An employee can help your business grow, but before making any staff additions, you’ll want to make sure you have the revenue available to pay him or her.
Weigh your options
If you decide that your business is ready to hire an employee, you do have several options. You can hire someone full or part time as a W2 employee, or you can hire someone on an as needed basis as a 1099 employee. If you hire someone as a W2 employee, you are responsible for paying taxes. If you hire via a 1099, the employee is responsible for his or her own taxes.
Johnson suggests starting with a part-time 1099 employee to see how much help you need and how the additional employee works within your business. Once you’re ready to bring on a full time employee, Johnson suggests consulting an attorney to make sure your business complies with all tax and healthcare regulations.
If you began your business on your own, when did you decide to hire your first employee, and what made you decide? Share your stories and advice in thecomments below.
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Lisa Furgison is a journalist with a decade of experience in all facets of media. Follow Lisa on Google+
As small business owners, it’s hard to know just when to hire that first employee. Here’s an article with 7 key items you should consider before making a decision.
7 Keys to Hiring Your Start-up’s First Employee
Hiring your first employee is a huge step for your start-up. In addition to the sudden sense of responsibility (you’re now in charge of someone else’s livelihood!), it’s a strong signal that your company has real merit: Someone has chosen to turn down other opportunities to help make your idea happen. And in many cases, he or she is embracing a significant amount of risk to do so.
But the most fundamental way in which it changes your business is bandwidth. A new person dedicating all of his or her time and focus to the company means that suddenly you get to move faster. A lot faster.
At my company, ReWork, it took over a year to get to the point where we were ready to bring someone else onto the team. We didn’t read any here’s-how-to-hire-someone books, but instead relied upon our observations of other start-up experiences, and advice from our Unreasonable mentors. And after three months, 30 applicants, and a steep learning curve, we were able to find exactly what we were looking for. His name is Shane Rasnak, and he is awesome.
Based on our experience (and that of other founders we’ve talked with), here’s the advice we’d give anyone else in this boat.
1. The Sooner, the Better (If You Can Afford It)
Hire someone as soon as you know that you need them and can afford them, even if it’s tight at first. The extra oomph that another person gives in brainpower, creativity, and sheer legwork is totally worth it. Things that would otherwise take you weeks will be doable in days. Entire work streams will disappear from your to-do list.
In many cases, founders who are reluctant to hire even when it’s clear they’re overworked end up kicking themselves later when they realize how much they weren’t getting done while they delayed. We sacrificed our own pay to make room for Shane, and it was more than worth it.
2. Hire for Potential, Not (Just) Track Record
One key trait of a skilled hiring manager is the ability to see potential, not just evidence of past success. Look for someone who has a strong interest or passion for causes or missions that are similar to yours, and, separately, evidence that the person is really good at what he or she has done before (even if that’s a variety of different things).
Unlocking potential has to do with marrying someone’s skills and passions, so even if a person hasn’t yet found a way to truly unleash herself, if your position can do it for her, you’ll likely see results. We turned down applicants with Master’s degrees and 10 years of experience because we sensed that Shane had immense potential to excel at our company. Also, it was clear that he was interested in punching above his weight.
3. Have Applicants Demonstrate Skill or Aptitude
Many people know exactly how to answer interview questions in a way that instills confidence in a hiring manager. In short, it’s (relatively) easy to bullshit. So, research shows that the best way to vet someone is to have him or her complete a task for you—for example, if you’re hiring a salesperson, ask them to sell you something. We had our applicants create an outreach strategy to reach our target audiences, giving them relatively little direction to see how they would tackle the assignment without guidance. The results were telling, and those that clearly didn’t put the time or energy into making it quality were removed from the running.
4. Have Everyone on the Team Interview the Stars
Finding a cultural fit for your team is tricky. Just because Person A and Person B get along, and Person B and Person C get along, doesn’t mean that Person A and C will get along (let alone work well together). As three co-founders with quite differing personalities and work styles, it was important that each of us would work well with our first hire. So we interviewed him four times, twice after we knew he was our top choice. That may seem excessive, but we needed confidence that he’d fit in well. When each of us felt that we’d have a productive working dynamic with him, we knew we had the right guy.
5. Invite Them, Truly, to be Part of the Team
Once you hire someone, you have a choice: You can consider him an employee, in the sense that you issue him directives, evaluate his work, and compensate him for his time. Or, you can consider him a member of the team that has chosen to dedicate his time to making your vision a reality, including learning alongside you and experiencing the ups and downs of your venture. And the latter is one of the main reasons why people join start-ups in the first place. We made it a point from day one to show Shane that he was part of our team, and that intention has already paid dividends.
6. Design an Onboarding Process
While we did some things right during the hiring process, there are others we would have done differently. For example, the extent of our “official” onboarding for Shane was a two-hour conversation on his first day on the job. Other than that, we tried our best to show our culture and expectations over the course of many smaller conversations. And though the result has been fine, we’d definitely do it differently next time—we would put together a series of sessions ranging from our culture and intent to company history and strategy. At the very least, having all these things spelled out means that everyone who joins the company will have the same experience.
7. Have Your Legal Ducks in a Row
Here’s a bold admission: We didn’t have an employment contract for Shane for the first six months that he was working for us. As a young business, we just hadn’t prioritized our legal documents. Again, though everything has turned out fine, I do not recommend this approach. Not having a contract in place (or terms discussed with advisors and lawyers) meant that both Shane and our team were legally unprotected. Fact is, not all hires work out. And when you’re laser-focused on revenue and market development, the last thing you need is a legal headache. Knowing that everyone is officially taken care of means that you can focus on what matters most.
Your first hire is a huge step in the life of your company. Take the time to do things the right way, and you’ll make sure that your first employee will be there for the long haul—and be one of the greatest things to happen to your company in its early days.
Check out more from Start-Up Week at The Daily Muse!
As Small Business Owners we know growth is the name of the game. But, did you know you can grow too fast? Here’s a great post warning you about what can happen.
5 Dangers of Overly Fast Small Business Growth Strategies
By Suzanne Kearns
Posted in: Small Business
When you start your own small businesses, you immediately start thinking about growth. Maybe you just dream of eventually opening a second store, or you might envision becoming a huge conglomerate or one day franchising the business.
Growth isn’t just admirable – it’s expected. But often, small business owners don’t consider that growing a business too quickly can eventually cause the company’s demise. You can easily find yourself lacking working capital, which is one of the biggest contributing factors to the failure of one in six new small businesses.
You and your business can avoid the dangers of overgrowth. By managing your business correctly and scaling up at a good pace, you’ll guide your company on the path to success. Whether you’re running a home office or a company with many employees, the key is planning.
Make sure you know the five biggest risks associated with sudden, unexpected growth.
1. An Overbearing Debt Loan
If you don’t plan properly for an increase in business, you can wind up taking on far too much debt. Growth takes money, and especially during the early stages of growth, working capital will be low. Many business owners take on massive debt to feed the growth machine, and a vicious circle begins. Increased orders require you to take on more debt, and so on. Too often, the cycle breaks only because the debt becomes so high that it topples the business. Even though more money is coming in, you owe even more and can’t cover debts.
For example, if you owned a housecleaning business and suddenly began to get more customers, you’d need to purchase more supplies and probably hire some more help. These positive developments would involve a lot of cash flow, and they can quickly turn negative by eating up all of your reserves. The new business is good, so you give incentives to your existing customers to send you referrals, leading to even more customers. Again, you need more staff and supplies. Perhaps you go as far as adding a company car with your logo to spread the word and support the increased workload.
Your working capital completely depleted, you take the next logical step: getting a loan. At first, it looks like the increased profits will more than cover the credit payments. But while the client list is growing, the debt is piling on more quickly, and keeping up with payments becomes a struggle. The growth was good, but it came too quickly and caught you unprepared as a business owner. Better fiscal management would have allowed for controlled growth based on revenue and profits.
2. Being Unable to Satisfy Your Customers
As a small business owner, you’ll be thrilled to be in high demand. But you need to be sure that you can supply the level of service your customers expect. Personal attention is a key selling point that attracts customers to a small business, especially when you’re involved in an active local community. In the face of unexpected growth, you’ll face the challenge of maintaining quality with the increase in quantity.
Consider the case of the home cleaning service. With a manageable number of clients, you can easily give each one the personal attention that makes your company special. In fact, that personal touch is what got everyone talking about you, spurring the recommendations and the increase in business. While it’s inevitable that the bigger a business grows the less interaction the owner will have with the clientele, unless you manage expectations, some clients may end up feeling put out – and they’ll stop coming to you.
The answer to this problem is – again – managed growth. Calculate how many new customers you can take on without turning your back on the clients who got you started. As you grow, bring on a customer support staff to promptly attend to all of your clients’ needs.
3. Forgetting Your Original Goal
In an effort to expand your business, you’ll be tempted to move into somewhat related – but unexplored – territory. The housecleaning business, for example, could be growing at a comfortable pace when a satisfied residential customer encourages you to bid on the contract to clean a commercial building. It’s tough to resist the prospect of big contracts and new opportunities, but straying from your original business model too quickly can create a volatile situation. While you’re striving to succeed in an untested aspect of your business, you’ll be forced to turn your back on the duties and client base that got you started in the first place.
Entrepreneurs naturally want to try new things, and success often requires taking a risk on new ideas in unproven areas. But you have to carefully consider how much time you can devote to a new plan, and budget accordingly. More importantly, make sure you maintain the safety net of your current customers and business model. If your expansion effort doesn’t pan out, you need to be able to rely on the original concept.
4. Losing Employees
Any small business owner will tell you that your best employees are the lifeline of the business. But when a business experiences quick growth, lines of communication can break down. If you’re surprised by your business’s growth, you’ll get preoccupied with keeping up, and if your employees aren’t ready for it, you’re in trouble. You need to let your employees grow with the business, but training them for management and leadership positions takes preparation. If you catch your staff members by surprise, and you’ll likely lose them. For a small business, losing employees – especially longstanding ones – means losing institutional memory, customers, and money.
In the case of our cleaning business, getting wrapped up in all the new business could easily alienate an unprepared employee in charge of the residential aspect of the business. Without guidance and support, that staff member is left in the field guessing at what decisions are best for the company. Since this employee isn’t trained for management and doesn’t have your insight into the business model, you’re probably going to be unhappy with those decisions, and your customers will be dissatisfied too.
5. Focusing on the Short Term
It’s amazing to watch a company in the middle of a growth spurt. Cash rolls in and business owners think that they’re on the way to the top. Profit and loss sheets look good, and it starts to look like worrying about bills and cutting business operating costs and expenses will be a thing of the past.
But a dangerous trap lurks in these bright days. In the search for good news, you can make the easy mistake of looking only at short-term profits. Instead, consider the plans that you’ll have to implement to sustain long-term growth and success. Don’t lose control just because you see a few good weeks and months in store. Making rash decisions to boost one day’s profits can cost you something – your cash reserves. And if you’re unprepared, those good days will suddenly end.
Remember that company car with the cleaning service logo? It may have been a little premature to have taken on the expense of a brand new car and decal work. Celebrate your success, but don’t overindulge.
For your small business to succeed, the name of the game is growth. But growth is very complex. It’s hard enough to grow in the first place, so make sure that you handle it properly when that success comes. Keep your eye on three areas of the business: your systems, your staff, and your cash reserves. Successful growth requires taking the time to plan and prepare to sustain all three as your business increases.