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Subscription-business-article.pngby Robert Lerose.


Magazine publishers have known for years that their best source of reader-generated income comes from renewing current subscribers rather than acquiring new ones. Renewal series are cheaper to mount than new subscriber promotions and provide a steady stream of instant cash. More and more businesses in different sectors are discovering that this same subscription-based model makes sense for them and for their bottom line, too. Netflix, Amazon, and even unorthodox companies like Zipcar, have used this model to dominate their niche.


“The relationship between people and businesses, and the products and services they use, is no longer a one-time event,” notes Tien Tzuo, CEO of Zuora, a Silicon Valley-based subscription billing company. (For a list of other subscription billing and service companies, like PayPal and Chargify, check out this blog post.) Tzuo was formerly chief marketing office at, a company that shook up its industry several years ago when it chose to offer lower-priced, monthly software subscriptions to its clients instead of charging them high, one-time licensing fees upfront. Going forward, Tzuo says modern companies should find similar ways to build long-term relationships with their customers. “And with these long-term relationships come a recurring, predictable revenue stream,” he says. “That is the subscription economy.”


Pull-Quote-Tall.pngBut you don’t have to be a Goliath to take advantage; almost any type of business can put together a subscription plan. For example, online business guide Investopia explains that subscription plans—which are also known as passive income streams—“could incorporate a low monthly fee for on-demand customer service or maintenance, subscription access to exclusive coaching, or a newsletter with interviews, book reviews, and market analysis on your industry.” Combine any of these options with a customer’s fondness for the certainty that a subscription plan provides and you wind up with a near perfect way to keep the money flowing, even in an uncertain economy.   


More predictability for business and customer

Red Hat, the leading provider of Linux and open source solutions, adopted a subscription model almost 10 years ago because of its convenience and high customer value. “A subscription model is incredibly simple and predictable for customers,” says Lars Herrmann, director of strategic marketing for the North Carolina-based company. “They know exactly what they have to plan for, exactly what they have to budget for, and what they get at any point.”


Red Hat’s offerings are enormously flexible. In the case of Red Hat’s Enterprise Linux program, for example, subscribers get access to the software channels and the customer portal where they can download the products, along with available updates and fixes. In addition, they can choose from a variety of support tools, depending on the subscription plan they buy.


Building brand loyalty is another key feature of the subscription model. To that end, Red Hat constantly seeks ways to expand its portfolio of products in order to provide more choices for customers and more revenue streams for the company. “The subscription model forces the vendor to deliver a great experience every day because the money is not made upfront at the sale,” says Herrmann. Instead, he emphasizes, “the money is earned every day.”


Generating a predictable revenue stream helped Red Hat maintain a robust bottom line during the current financial crisis. For the completed 2011 fiscal year, the company took in $773.4 million in subscription revenue—an increase of 21 percent over the prior year.


Red Hat focuses on giving great value to the customer, Herrmann says. “We are not depending on new license fields every day in order to report fantastic numbers to our shareholders. We depend on delivering great service and driving customer satisfaction.” At renewal time, customers receive an automated notification that their subscription is about to expire with instructions on how to renew. They can choose to renew their subscription as is, or upgrade or downgrade it. The feedback from customers, Herrmann says, has been extraordinarily positive.


“They love the subscription model. It’s easy to handle from an accounting point of view. The customers know very well which services they get. They have the flexibility to move their subscription from one system to another and they like the simplicity of managing it. If they don’t want to have a renewal event every year, they can avoid it by buying into a three-year subscription.”


Building long-term relationships means higher customer retention

Boutique firm Kroll Bond Rating Agency may be only one-year-old, with just 24 employees, but it rates nearly 18,000 entities, from savings and loans and insurance companies to credit unions and the top 1,000 corporations. In its first year, the company has already seen good results from its subscription offerings, says Kroll managing director and head of the subscription business, Tawanda Seifert.


“Most of our clients like the subscription model because they know what they’re going to get, they know the product, they know the timing,” says Seifert. And she emphasizes the important role a subscription model plays in maintaining good customer relationships. “Client satisfaction is an implied or unstated component of the subscription-based model. They know that they can call and ask questions and we’re going to answer the phone”


By using a subscription agreement that lasts for the lifetime of the relationship, Kroll has been able to retain about 90 percent of their clients so far. That certainty takes a lot of the anxiety out of planning for future budgets—for both Kroll and its clients.


“You’re not asking are we going to do 15 deals this year and how much revenue will that bring us? I think you have a more constant stream” of revenue, Seifert says. “There are months when our invoiced amounts are less and then there are months when our invoiced amounts are very high. Since you know these cycles, it helps you plan and budget your income statement or your P&L.”


Replacing uncertainty with predictable revenue and brand loyalty is just one reason that subscription-based business models may be the best arrangement for you and your customers in an unpredictable economy.

Digitally-Dressed-Article.jpgMake sure your website and other digital tools are as effective as possible


By Sherron Lumley.


Nowadays, the morning commute may be a sideways roll out of bed, then a flex of the index finger to power on the computer. We can attend a conference call in pajamas and chat online with a client over a bowl of cereal.


So what does it mean to be dressed for success when we don’t necessarily have to get dressed? The nature of interaction between businesses and customers has changed in the digital world, but the one thing that hasn’t changed is the power of a first impression, a three-to-seven second event. A typical website visitor stays about 44 seconds then moves on unless this first impression presents a reason to stay longer.


“I call that short attention span theater,” says Stephen Goebel, Creative Director and owner of ToeShark Visual Communication in Henderson, Nevada. “Marketing must be crystal clear to engage people instantly and keep them around long enough to continue the conversation,” Goebel says.


Dressed-Sidebar.pngKnow Your Netiquette

In the 1975 bestseller Dress For Success, author John T. Molloy popularized the concept of power dressing to convey authority and competence. Today, this competitive edge is just as relevant as it was then. “Your site can help position you as an authority—and you should aim for that,” says Drayton Bird, author of Commonsense Direct and Digital Marketing. “Since most people seek information on the web, those who seem better informed are seen as better.”


Although content is fundamentally important, the brevity of website visits means that the visual element is crucial. An effective website is visually digestible, clean, simple and clear. It is focused and includes a value statement, so people know what the message is. “The human mind loves order,” says Goebel, who holds a masters degree in Visual Communication from the Pratt Institute in New York.


Beyond the Website

Although a company website is usually the most significant element of the digital marketing mix, as in all marketing plans, the medium should fit the objective. “I am all about results and top line revenue, more people through the door, more calls on your phone,” Goebel says. However, not all of his clients need or want a website. There are other digital resources available that are increasingly mainstream and easy to use.


“Social media is imperative now. I drag my clients into it. Setting up Facebook and Twitter is a must, and then you have to use these tools,” Goebel says.


Charles Hobson, founder of Vanguard Documentaries, has seen numerous technology changes come and go over the last four decades, but that has not changed his underlying love for documentaries and storytelling. His award-winning company has launched a website, Facebook page, LinkedIn and Twitter accounts and he regularly uses Skype for phone calls and videoconferencing and Google Docs for digital document sharing.


“I was always into technology,” Hobson says. “I’m what’s known as an early adopter.” Nowadays, he uses Skype’s free videoconferencing and Google Docs to communicate with colleagues abroad and he currently has about 1700 followers on Twitter. “My phone is always beeping,” he says. Twitter is a viral marketing medium, the modern day word-of-mouth, so it’s important to keep in mind that digital communication is not a one-way street.


Encourage feedback

In The New Handshake, by Joan C. Curtis and Barbara Giamanco, the authors talk about how to properly toe the netiquette line. “Do not talk constantly about yourself or your business,” they write. “Online, you listen by responding to other people’s Tweets and by joining a conversation in the LinkedIn discussions,” they say. Being able to listen to customers is one of the most useful aspects of interactive media. A company can know, practically instantly, customer response, and from this a business can learn and improve.


This consumer participation is what makes digital marketing so revolutionary. Therefore, providing an opportunity for interaction is going to be a top desire of a successful web strategy. The Vanguard Documentaries Facebook page features a preview of a work-in-progress documentary about the Flat Iron Building in New York. Visitors can watch the short film, make comments, send a link to others, and if they want, become backers of the film for as little as five dollars. The page is linked to Kickstarter, a funding platform for creative projects.


Figure as a rule of thumb that the annual marketing budget for a small business should be ten percent of the gross revenue for the year. To get in the game with a professionally designed website of eight to ten interlinked pages will cost about three thousand dollars.


When hiring a professional to design a website, it pays to shop around. To check credentials or find a website designer, head to the American Institute of Graphic Arts website.

By Jen Hickey.



This is Part II of our two-part series on green technology and the small business. Part I (click here to read), focuses on the return on investment for green products and technology.


More and more people are greening their purchases when it makes sense to do so. The entrepreneur that can provide a green product or service that has clear benefits and can help consumers save money at the same time will find the market wide open. According to a 2007 Simmons study, the number of “behavioral greens”— consumers with the greenest behaviors and attitudes — has risen to 34 million, or 31 percent of the U.S. population. What’s more, as the price differential between green and non-green products has shrunk significantly, increasing numbers of consumers are losing their inhibitions about buying “green.” And despite the recession, the trend toward green continues. According to a 2009 Global Green Consumer survey conducted by the Boston Consulting Group (BCG), there were more purchases of green products in 2008 than 2007 and many consumers said they are even willing to pay a higher price for green products if they are of higher quality.

Opportunities are particularly good for businesses that can distinguish their product from the competition while communicating a clear message about what it means to be “green.” Although sales for Clorox’s GreenWorks have dropped off in the last few years, those of household-product brands like Method and Seventh Generation rebounded in the double digits in 2010. While these products can cost as much as 25 percent more than their non-green competitors, the companies that produce them have a committed record of environmentally sustainable business practices, which tends to attract and retain customers. As the BCG study concluded, consumers not only expect added value when purchasing a green product, they tend to trust the claims of those companies that practice what they preach.

Going_gree-quote.pngGreen Franchises

While the market for green products may seem saturated, franchise opportunities abound for the entrepreneur looking to sell niche products and services directly to the consumer. Founded by Beth Remmes, an environmentally conscious mom looking to do more than recycle, Zola Goods operates on a home-party model that is organized by “coordinators,” who help educate and sell affordable green household and party products directly to family and friends. A start-up kit costs just $149, and coordinators are paid 20 percent on all sales. OnlyGreen4Me offers exclusive dealerships to entrepreneurs looking to open their own on-line Eco-Stores, selling a broad range of green products, with a focus on the office. A setup fee of $2,500 includes the first year hosting and maintenance fee of $1800, with ongoing hosting and maintenance fees of $150 per month in subsequent years. Dealer commissions on products sold range from 10%–30%.

As Glenn Croston, PhD, scientist, committed green practitioner, business adviser and author of 75 Green Businesses and Starting Up Green, notes, business opportunities exist for everyone, whether your background is in sales, finance, education, law, health, art and design, construction trades, or manufacturing. “While the downturn has been challenging, there are businesses that have grown and have even been helped by it. Small green businesses that have done well are those that have found a better or more efficient way to do something that helps homeowners and businesses save money.”

An example of this is America's first zero-waste pack-and-move solution. In 2005, after seeing how much waste he produced when he moved his small office across town, Spencer Brown created The Recopack (Recycled Ecological Packing Solution) from 100% post-consumer trash, from which his Rent A Green Box venture was born. Recopacks and other recycled packing material are rented for two-week blocks. The rental fee includes free drop off and pick-up. Replacing cardboard boxes with reusable Recopacks can save movers up to 50 percent. After perfecting his business in the Los Angeles area, he is selling franchises across the country.

According to Croston, the successful businesses are those that are meeting the demands of the “conserver economy.” Many homeowners and businesses are willing to pay to save on water and utility bills. Green Irene offers self-paced, online Green Business Bureau (GBB)-certified training and marketing support in the growing field of Eco-Consulting for $150 (home consulting; $29.95 annual renewal) and $350 (home and business; $49.95 yearly renewal). Pro Energy Consultants offers HERS Energy Rater Certification and BPI Building Analyst Certification franchise opportunities ($29,900 total investment) as an energy auditor. 


A Solar Boom

With the help of the continuation of the federal Section 1603 Treasury program, declining technology costs, and the expansion of new state markets, the solar industry has boomed throughout the recession. According to U.S. Solar Market InsightTM report, published jointly by Solar Energy Industries Association (SEIA) and GTM Research, solar market value grew 67 percent from $3.6 billion in 2009 to $6.0 billion in 2010 and was the fastest growing energy sector in the country. Grid-connected photovoltaic (PV) installations have more than doubled in the past two years alone. “Becoming a solar broker is a way for someone with a sales background to break into the solar industry at fairly low cost,” Croston notes. Prime Solar Network, a one-stop shop for all that is solar, offers regional licensing ($75,000-$150,000 in capital) and brokering opportunities, as well as consulting services and training for those looking to get into the renewable energy market.


As Tim Cassidy, CEO of Prime Solar and its brokerage affiliates Empire State Solar and, explains, “we do the shopping, from researching multiple panel options and competitively bidding on installation and design,” saving his clients time and money. Although Section 1603 is set to expire at the end of this year, more than half of all U.S. states have mandates in place for 15 to 30 percent of all energy to be generated from renewable sources over the next 20 years, and with the breakthroughs in solar thermal storage and innovation in thin-film technology, opportunities abound for those with contracting, construction, engineering, financial, and skilled trades backgrounds.


Have a Plan

Wanting to “do the right thing” is not enough, the “ecopreneur” must find the means to produce, market, and sell his/her idea. To do that, you need a plan., Tim Cassidy’s consulting service, offers assistance to entrepreneurs looking to start a green business as well as those existing businesses trying to incorporate green standards into their operations. While SBA Express has streamlined the process, loan officers “want to see personal investment, demonstrated sales and strong background,” Cassidy cautions. “With passion comes overconfidence, to succeed you must have a realistic, staged plan for growth.”


Additional Resources

Green Products

Zola Goods Sell green products that everyone needs as a home-party coordinator. Start-up kit costs just $149, and coordinators earn 20 percent on all sales.

OnlyGreen4Me Open on-line Eco-Store, offering a broad range of green office and household products. Initial setup fee $2,500, with hosting/maintenance fees of $150 per month after first year. Dealer commissions on products sold range from 10%–30%.


Green Services

Open a Rent A Green Box franchise in your area and help movers save up to 50% by renting/selling reusable plastic moving boxes and other packing material.


Become a GBB-certified Eco-Consultant Green Irene for $150 (home consulting; $29.95 annual renewal) and $350 (home and business; $49.95 yearly renewal) and help people green their homes and offices.


Energy Auditor

Become a HERS Energy Rater and BPI Building Analyst Certified Pro Energy Consultants franchisee ($29,900 total investment) and help homeowners reduce their utility bills by making their homes energy efficient. 


As a Prime Solar broker affiliate or regional licensee ($75,000-$150,000 in capital), you will have access to a network of installers and exclusive access to territory in this growing industry.

Going-green-part-1.jpgBy Jen Hickey.


The following is Part I of our two-part series on green technology and the small business. Part II (click here to read), focuses on business opportunities catering to the “green” crowd.


Situated across the harbor from the gleaming skyscrapers of Lower Manhattan, in the once rough and tumble waterfront of South Brooklyn, Linda Tool has not only survived the continued contraction of New York City’s manufacturing sector (down 8 percent over the last decade) but has expanded, adding four employees since September 2008. Established in 1952, Linda Tool manufactures precision components and assemblies for a number of major aerospace and industrial concerns in the U.S. While it would not be considered “green” in some circles, Linda Tool’s president, Mike DiMarino, believes the integration of green practices and technologies into workplace operations makes sense not only for business, but also for the health and well being of his employees.


“The skilled employee base, or ‘human capital,’ needed to succeed in any business is hard to sustain,” DiMarino says. “Creating a safe and healthy work environment, coupled with a livable pay scale and a menu of benefits, helps to ensure that Linda Tool will have that skilled workforce for years to come. Linda Tool has not had a layoff since 1983, a record we are proud of.”


One Company’s Path to Green

Among the several clean technology steps that Linda Tool has taken are the installation of an air conditioning system with HEPA filtration and mist collectors on every machine tool and the switch to water-based machine fluids and lubricants to help reduce waste. DiMarino sees these as a “tremendous benefit for employees and I believe it is greatly appreciated.” In addition to recycling employee-generated waste, Linda Tool reuses packaging material and recycles all chips from machine operations, which saves on both labor costs and the purchasing or re-purchasing of packaging materials.


These steps are all laudable, but the crown jewel of Linda Tool’s sustainable business practices is the company’s “green roof.” With the help of a Department of Energy (DOE) “cost share grant” of $250,000—bringing Linda Tool’s share of the project to 44 percent—the factory’s 12,500-square-foot tar top was replaced with a patented soil blend of recycled polystyrene and local compost created by Paul Mankiewicz of the Bronx-based Gaia Institute. In place of a long, black, uninviting slab, a lush, wild garden now blooms. This green roof better insulates the building as well as absorbing rainwater that would otherwise run into sewers. Intrigued by the long-term benefits of the project, a team from Columbia University has installed a combined sewer overflow (CSO) device atop the roof to monitor its effects.


Since completion of the project in 2009, Linda Tool has seen savings of 40 percent on air conditioning costs and a 20-percent reduction in heating oil consumption, explains DiMarino. “The temperature in our facility is now very stable 24/7, 365 days of the year…a constant 74-degree atmosphere with a 35 to 40 percent relative humidity,” he notes. Not only has the green roof produced immediate savings for Linda Tool, but it’s also made the building more efficient by keeping the shop environment more stable, which “is important for the products that we make.”


Starting Small

While a large-scale project such as a green roof may seem daunting, the Small Business Administration (SBA) and U.S. Environmental Protection Agency (EPA) offer information and resources to small businesses looking to take more incremental steps on the road to “going green.” Making your business more energy efficient is a good place to start. Simply turning off lights and machines when not in use, sealing up those energy-depleting leaks to the outside, replacing incandescent light bulbs with compact fluorescent light bulbs, getting rid of those old fax machines (faxpress has made them obsolete), replacing outdated equipment with Energy Star products, and reducing paper usage by recycling can all measurably cut utility costs. There are also federal incentives and various state programs in place to help offset pricier clean technology and retrofit costs.


Green Irene, the country’s fastest growing eco-consulting service, and the Green Business Bureau (GBB) have joined forces to help small and midsize businesses adopt sustainable business practices through a green standards certification process. For more comprehensive changes, offers business plan assistance to companies that want to green their operations. “Of the 100-plus business plans developed in the last few years, well over half have been to incorporate green business practices,” CEO Tim Cassidy points out. His consulting company has helped restaurants, demolition and construction companies, gyms, and salons go green. “From a branding perspective, the value of being green outweighs the initial costs,” says Cassidy. For example, “it costs only two to three percent more for a builder to be LEED certified.”


For Linda Tool’s DiMarino, going green has not only been good for the bottom line, but also good for business. “It is a very good selling tool. People are interested in this, and I think it shows that Linda Tool is a forward thinking company. It makes clients realize we are there to look out for their best interests.” Linda Tool’s factory goes almost unnoticed nestled in the industrial blocks between a mega Fairway Market, housed in a Civil War-era warehouse along the waterfront, and a 35,000-square-foot IKEA store that now sits upon a once busy dry dock. While the longshoreman have been replaced by tourists disembarking from the Queen Mary 2, Linda Tool remains, carving a new “forward-thinking” path for Red Hook’s economic future.

Pull-Quote-Tall.pngby Reed Richardson.


For those companies that are open only a few months during the year, all the normal obstacles to achieving small business success can be multiplied several times over. Yet a common misconception is that seasonal small business owners have it easier, spending half the year simply relaxing rather than working hard on their ventures.


“People think I make money all winter long and then just go golfing all summer, but that’s a big myth,” explains Davey Pitcher, whose family has owned the Wolf Creek ski area in southwestern Colorado since 1976. “Like most other small businesses, we have expenses year-round, but our cash flow comes in over just 160 to 170 days. So it becomes a management challenge to prioritize resources the rest of the year.”


And because seasonal businesses must cram a full year’s worth of revenue into just a few short months, getting everything in place for a fast start often can make the difference between finishing in the black or running in the red come closing time. In an effort to help you do just that, we’ve gleaned from entrepreneurial experts and real small business owners eight pieces of advice you might consider to get your own seasonal business off on the right foot.


1. Start thinking about tomorrow today

Sometimes, the best time to start preparing for your next opening day occurs the moment you close for the season. For example, Pitcher and his maintenance crew began dismantling one of Wolf Creek’s ski lifts on the last night of the 2010–11 season, while the gear oil in the machinery was still warm from hauling skiers up the mountain earlier in the day. “Because the part we had to replace was so expensive—$150,000—and because the lead time on ordering it was so long—close to 8 months—it was imperative that we start the process of preparing for next season as soon as we could.”


2. Keep ’em coming back (your employees, that is)

“One of the most important things seasonal business owners can do to be successful is to keep their employees coming back each year,” explains Moren Levesque, a professor of business strategy at York University’s Schulich School of Business. “One way to do this is, just before the end of the season, you offer to share some of next year’s profits with your key employees if they commit to returning next year. Or, maybe even make that same offer for next year at the start of this year’s season to get them to buy in early.”


David Gretzmier, who used to own two complementary seasonal businesses in Fayetteville, Arkansas—a lawn care company and a Christmas-light decorating venture—took a somewhat similar approach. He says he gave his employees “convenience pay” that was roughly half of their regular hourly wage during the slow periods in the early fall and late winter. This extra income stream, he found, prevented them from looking for additional work and helped him retain a higher percentage of his employees year-round. Though he was essentially paying them not to work, Gretzmier says the strategy paid dividends in the long run, when the time and opportunity costs associated with not having to train new employees and better customer service were factored in. 


3. Don’t assume what worked last season will work this season

“The most dangerous aspect of running a seasonal business is that it detaches itself from the market for a while,” notes Yuval Deutsch, an entrepreneurial studies professor at the Schulich Business School. “Because of this, businesses that, say, closed last spring should get out there early before they re-open and collect information on what the market is doing now.”


Even those small businesses that rely heavily upon a repetitive customer base or that are in fairly traditional industries might want to undergo a more in-depth strategy review before opening their doors this year, says Deutsch. “Especially in today’s volatile financial conditions, re-opening a seasonal business that’s been dormant for nearly half the year can be in many ways similar to launching a brand new start-up,” he explains. “You may want to re-do your entire market research in the off-season to see where your advertising focus should be.”


4. Business owners need time to mentally change gears for opening day

“For me, there is definitely a period in the weeks before opening day where I have to change my mindset,” explains Pitcher. From working a hectic six out of seven days during the season, he acknowledges that his operational pace does slow to working one out of four days in the middle of summer, with a long family vacation usually scheduled for early August. “But once I get back from that, I’ll have more regular meetings with my staff and start seeing lots of things that need to be taken care of,” he says. “And the panic button gets pushed once we have that first freeze and I wonder why we still have all this junk in the parking lot,” he says, laughing.


5. Open seasonally, market daily, learn constantly

When Gretzmier decided to start his Brite Ideas lighting franchise to complement his lawn care business (which he subsequently sold off a few years ago), he expected to easily convert many of his 300 lawn care customers into clients of his new venture. But Gretzmier says he quickly learned that the rudimentary marketing methods he used for his existing lawn care business didn’t carry over—his first winter he only had 10 takers for his lighting service.


“When you’re in the lawn care business, you can basically knock on doors while wearing dirty jeans and sign up a customer that will last 10 years,” he explains. But because his new Christmas-light decorating service involved one rather large upfront fee—anywhere from $800 to $4,000 for the set-up—rather than a series of smaller, weekly $50 payments, potential customers were more hesitant to come on board. “Instead, I had to spend thousands and thousands of dollars all summer long to get new lighting customers,” he says. “It took direct mail postcards, which had a response rate of only about one to two percent, getting references, and showing up on someone’s doorstep wearing a nice jacket before I got the sale.”



6. Unravel that red tape now to stay in the black later

Whether you run one, two, or several seasonal businesses, there will always be some amount of paperwork and regulatory requirements to fulfill. To stay on task during your business’s selling season, why not tackle the red tape before you open the doors again? As one might imagine, a ski resort that also includes a restaurant and bar will have a plethora of licenses, health and safety inspections, and insurance policies that must be updated or redone each year. And while many of them must be complete before the first skier schusses onto a lift, others could be done in-season. “Still, I try and have Wolf Creek fully licensed by mid-September of every year,” Pitcher says. Doing it this way, he adds, allows him to open as soon as the snow cooperates and, for a seasonal business, squeezing in just a few extra open days can sometimes be the difference between a good year and a great one.  


7. Start pulling in revenue before you open your doors

In another bid to extend the revenue-generating period, Wolf Creek starts selling full-season passes in early October before the mountain typically opens to skiers. This injection of pre-season money, Pitcher explains, is often instrumental in bridging the gap between the end of last year’s revenue and the start of opening day, and allows Pitcher to handle any unexpected, last-minute maintenance issues.


For his part, Gretzmier’s four-month-long holiday lighting business is now reliably profitable, yet, just as before, he’s started to look at ways to bring in cash during the off-season. Rather than return to running a second business, though, he’s started going after wedding and event lighting projects during his off-season to bring in the extra revenue and keep his company’s name and message more current.


8. Try to avoid going ‘all in’ early on

To hedge against making a potentially disastrous miscalculation right out of the gate this year, Deutsch also recommends that seasonal small businesses should thoroughly revisit any long-standing vendor relationships and purchasing strategies prior to opening day. “The way things are in this economy, it may be a huge mistake to buy an entire season’s worth of inventory upfront,” he points out.


Instead, Deutsch says a business owner might be better off waiting a while to see what customers are buying before committing all of his or her capital. Once there’s enough data to identify some sales trends, a business owner could then devote any held-back cash to purchasing and marketing those products that are selling well. “If all your competitors are stuck with lots of high-end product, but only the low-end stuff is selling, the ability to transition your business’s focus to that latter segment could become a big advantage.”


by Robert Lerose.


Webinars, or online presentations, are a cost-effective way to generate revenue, build brands, demonstrate products and services, provide leads, and position your company as the authoritative source that customers turn to first. “A lot of [my clients] see 70-percent or 80-percent return on investment and sometimes more,” says Leslie Davidson of Davidson Direct, a longtime consultant and provider of webinars and audio conferences.


Prices for setting up and executing webinars vary. Even though it might seem counter-intuitive, many businesses can come out ahead by outsourcing the operation instead of managing the process internally. For example, Davidson gives a price break for volume contracts that can make it more worthwhile for budget-conscious businesses.

Before putting on a webinar, Davidson recommends the following:


  1. Select a timely topic. The best topics are those where there’s a new law or regulation from the government that your customers need to know about and apply to their businesses. “So-called nice-to-have topics work well, too, as long as they’re something of interest to your readers.” Davidson cites “Cybersecurity Best Practices:  Reducing Risk Across Your Enterprise” for IT departments as a recent example of this type of topic.   

  2. Find speakers who really understand the topic and are appropriate. “If you don’t have anyone [on staff] who has contacts in a particular industry, start with an Internet search.”

  3. Market your webinar with a good email list. If you don’t have an email list, Davidson recommends partnering with associations that have members who would be interested in your topic in exchange for a member discount. “You can add [these names] to your list and use them going forward.”

  4. Earn money with sponsored events. If you offer the webinar for free, try to get someone else to sponsor it. After the session, follow up with a phone call to try to sell your product.

  5. Send a lot of emails in a short time. “Webinars and audio conferences are impulse buys,” Davidson says. “You’re going to get 30 percent to 50 percent of people signing up in the last week before the event. I usually start three weeks out, sending one email a week, followed by two to three emails in the days leading up to the webinar.”

  6. Offer combo deals for extra revenue. Selling the webinar as a CD or DVD can usually add another $50 to $100 to the original sale. Webinars can also be used as premiums in other promotions or sold as audio downloads.

  7. Follow up with a survey. “[On my survey, I’ll ask them to] give me the names and email addresses of everybody in the room,” Davidson says. “I’ll send them a free transcript or another incentive. It helps me build my email lists and also find out what people are interested in seeing in the future.”


Outside speakers boost a company’s credibility

Business Valuation Resources (BVR), a provider of products and services to the business valuation profession, puts on about thre

e webinars a month. On average, they get 100 people for their paid webinars and between 300 and 400 for their free sessions.


“Within the first 90 days of a free webinar, we’ll convert about 5 percent of them to paying customers, which is really good for us in this market,” says Lucretia Lyons, president of BVR.


Free events have helped sell their immense product portfolio—from guides and sourcebooks to searchable databases—with an average sale of about $1,500. Some of their webinars soft-pedal a particular product, while others could feature many products related to the webinar’s theme.


Maintaining relationships with the thought leaders in their profession has been key to finding good speakers. BVR will get an outside expert to present on their products or services. Then, the names of those who registered for the webinar are turned over to BVR’s internal sales force.

“We’ll tap into a short list of experts for the webinar,” Lyons says. “We don’t want to make it a 100-percent pure sales play. Our market is savvy enough to know that, of course, we’re marketing a new product. But they also have enough trust in us that they know they’re getting one of their peers to give their take on this new product.”


BVR has been experimenting with webinar pricing, dropping it from $249 to $139 for a 100-minute session in an effort to go for larger volume. They’ve also had success with series-driven programming for topics with recurring content, which has led to a steady stream of revenue. One of their fastest-growing products gives unlimited access to all of their webinars for only $995.   


Customized webinars generate revenue

Business owners are also using webinars to provide value-added services for their existing clients. Du-All, an environmental health and safety-consulting firm, tailored a training program to meet one client’s specific needs.

“We might do a one-hour or two-hour webinar on warehouse safety hazards. If we have a national client, we can reach all their locations and provide some kind of remote training,” says Joe Moulton, manager of environmental services. A one-hour class might cost $450 to $650 depending on the number of attendees.


Du-All has just started rolling out with a second webinar series to generate new clients and new revenue. These webinars inform decision makers about new rules coming out and how to comply with them—and then pitch Du-All's services at the conclusion as one way to comply.


The webinars are free and last no longer than 30 minutes. Subject matter specialists host them, followed by a short sales pitch at the very end.


Low overhead, the ability to reach a large audience and increased revenue make webinars well within the reach of almost every business owner. Or, as BVR’s Lyons says, “Webinars offer the chance to really showcase your company in sort of a three-dimensional way and get people from a distance on board.” 

There is a lot of disagreement about what’s meant by the term “influence.”   In the old bricks-and-mortar world, influence referred to the ability to sway people’s beliefs or actions.  The people wielding the influence were usually recognizable names.


Defining Influence


Influence in the online world still has to do with impacting behavior, but influencers – now sometimes called “e-fluentials” – can be almost anybody.  Further, social influence doesn’t just affect buying habits, it can be used to educate, entertain and build brands.


What does that have to do with you as a small business owner?  You may want to network with influencers who will help you do your “word of mouth” marketing.  Or, you may want to become an influencer yourself in order to drive traffic to your website and customers to your business.


Attracting an influencer’s attention and getting him or her to start talking about your company is particularly appealing to small business, which usually don’t have large advertising budgets.


Identifying Influencers


Finding influencers who are knowledgeable about your industry involves some legwork, but you should already be engaged in this type of research.  Read blogs and tune in to webinars by subject matter experts in your industry.  Start conversations with potential influencers via LinkedIn, Twitter or other social network.  Send influencers links to new product offerings or articles you’ve posted online. The process of getting the influencer to comment on your company may happen organically, or you may reach a point in your (online) relationship where you feel comfortable asking directly. Another avenue for finding influencers is via social analytics companies like PeerIndex and Klout, which can tell you who is likely to be in synch with your company, its products and its corporate philosophy. 


Becoming an Influencer


What if you decide that, instead of reaching out to others to promote your business, you’d rather become an influencer yourself?  One of the most effective – yet still largely misunderstood – ways to become an influencer is to launch a blog.   “Bloggers are quite authoritative voices on certain things,” says Azeem Ashar, founder of PeerIndex. “Authority [is] moving away from institutions.”


Of course, gaining followers and making an impact on your bottom line through blogging takes time.  You can start out with an outline of topics you’d like to blog about, but as time passes, you shouldn’t be so rigid that you aren’t paying attention to what’s happening in the world that affects your industry.


Azeem Ashar, PeerIndex.pngThere are several tips that experts and fellow influencers say you should remember as you seek to build influence with a blog:


  • Do make sure you have an eye-catching headline.  If you don’t grab readers immediately, they will have already moved on.


  • Don’t be afraid to be a little controversial and don’t be too formal with your language. While you may be talking about business, potential customers have a lot of information to wade through in their daily lives.  If you’re too cautious, you run the risk of being boring.


  • Don’t hold back on sharing a little of your personal information (but only information you would feel comfortable sharing in-person to a stranger).  Your followers want to know something about the person they are following and why they should trust you.


Whether you get external influencers to talk about your company, or you write your own blog, it is important to pay attention to the ultimate type of influence you seek – the influence of your online brand.    You need to know what percentage of your content is driving sales and whether people who read a blog about your company or follow you on Twitter are actually converting into customers. 


One way to measure brand influence is through the many social analytics tools currently available, including Twitalyzer, which provides hard data on a company’s Impact, Engagement, Velocity and Reach; Crowdbooster, which tracks and analyzes who your most influential Twitter followers are; and Klout, which gives a company a social influence score between 1 and 100.


“Influence” may mean different things across the social media landscape.  It can be a third-party endorsement, a loyal blog readership or Twitter following, Facebook “likes,” or the currency of your online brand. However, there is one thing that is constant across all channels:  Influence isn’t just a number.  Pay attention to more than the quantity of your retweets, LinkedIn connections or Klout score.  Read what people are actually saying about you and your business.  You may discover you have much more influence than you think.


Do you have any relationships with influencers? Has it impacted your business in any way? Share your thoughts with the SBOC community in the comments section.

by Reed Richardson


By necessity, most small business owners quickly become creative problem-solvers, finding unorthodox means of survival and alternative pathways to success. After all, almost all entrepreneurs launch their businesses with a shortage of funds and a lack of support staff, meaning that they must not only figure out how to build that better mousetrap, but also produce it on a shoestring budget and then advertise and sell it using low or no-cost marketing tactics. 


But for all their resourcefulness, there is one potentially powerful asset that small businesses all too often overlook or underestimate; it’s the same one that fills their cash register everyday—their customer. So, if you think that your small business’ current customers are only good for occasionally buying your products or services, it’s time to readjust your expectations and start leveraging their value for greater prosperity and growth.


1.  Turn them into sales prospectors for your business

Those satisfied customers going in and out of your front door everyday—or clicking to and then away from your website—could be some of your best salespeople, if only you would ask them. But far too many businesses simply forget or intentionally avoid systematically asking for customer referrals. Even the simple, passive act of putting up a sign in your office or on your website that says, “If you like our widgets, please tell a friend!” rarely occurs at most small businesses.


During research on this topic for his recent book, The Referral Engine, author and “Duct Tape Marketing” guru John Jantsch conducted an informal survey of thousands of small businesses. From his results, he found that more than 63 percent of the small companies he surveyed received a majority of their business from referrals, yet nearly 80 percent of those same businesses acknowledged that they had no system in place to consistently generate such referrals. “If you don’t feel strongly enough about the value you or your products deliver to expect that your clients will voluntarily make an effort to see that others receive it,” Jantsch writes in his book, then it’s time to “get to work on creating a brilliant system that’s focused on getting results for your customers.” Doing so might be the difference between getting or losing a majority of your future business.


2.  Enlist them into your advertising and marketing plan

With the advent of social media, the playing field has significantly leveled when it comes to extending a small business’ brand. Encouraging happy customers to “like” your business on Facebook or re-tweet product offers and updates you post on Twitter means you can unleash a digital army of marketers for little or no money. But it does require time and careful effort to build these relationships properly. A dormant Facebook wall or, conversely, a constant barrage of unengaging Twitter posts will quickly burn up any word-of-mouth goodwill between you and your customers.


Investing in and fostering these fans of your business eventually pays dividends, according to this recent survey by social media consultant Syncapse. Its results estimated that the average annualized value of a Facebook fan to a business was roughly $138 and that each fan spends an additional $72 on products they “like” online versus those they don’t. What’s more, the Syncapse study found Facebook fans are 28% more likely than non-fans to stick with a brand and also 41% more likely to recommend that brand’s products to others. That’s a powerful way to extend your reach and feed the referral engine.


3.  Tap their knowledge of your business as a source of innovation and R & D

Entrepreneurs, so focused on rolling out their new product or their latest service, routinely fail to take into account the input of the end user—the customer. But by seeking out your customer’s advice and suggestions—before, during, and after a rollout—a small business owner can often avoid a disastrous product launch, refine their existing platforms, and add successful new companion services to their offerings.


Indeed, it pays to think of your existing customers as kind of a never-ending focus group. You may think you know why your customers are purchasing, but unless you ask them you may never know the real reasons. By distributing a steady stream of customer surveys—whether it’s in person, by mail, or online—you can arm your business with a rich database of information about everything from sales frequency to price points to marketing effectiveness to packaging and shipping preferences. Even if you find out that you do have an accurate read on why your customers like your current products or services, it’s worth taking the extra step to find out what else they might like or want to see you provide them. And once you do, be willing to enlist your loyal customers’ help in trying out, or beta testing, these new offerings before you execute a full launch. Such a gesture will convey the trust you have in them and will further cement their loyalty to your company, while, at the same time, your business will reap the real-life, unbiased opinions of the marketplace, making your new endeavor more profitable.


4.   Transform them into a vendor or subcontractor of your business by discovering what mutually beneficial talents they possess

Stare at a financial spreadsheet for too long and it’s easy to start viewing your business’s customers as little more than lines on a graph or numbers in a table. That one-dimensional approach fails to consider the talents or skills that your customers possess, talents and skills that just may benefit your business, if only you knew about them. So if your retail business is looking for permanent back-office help like, say, an accountant to do your books, or even someone to handle a temporary project, like a freelance graphic artist to design new promotional materials for your business, it’s a good idea to put out the word to your customers first, both in your store and on Facebook. While you probably won’t find an exact match each and every time, you’re still likely to get at least a few good references.


Mining your existing customers for vendor or subcontractor help has an additional benefit—it opens up the possibility of bartering for those products or services, an old-fashioned business tactic that is making a comeback in an era of near universal belt-tightening. Most of the more popular small business barter exchanges, like ITEX, BarterQuest, and NuBarter work by matching up pairs of entrepreneurs and other businesses or individuals, based on correlating wants and offerings. Because these barter exchanges involve larger networks, they have the advantage of offering a more expansive menu of products or services available for barter. However, thanks to their larger size, they almost always match up barter partners that are unfamiliar with one another and, therefore, some risk is involved in the process, even if the exchanges are careful to put policies in place to mitigate that. But bartering with your customers means dealing with someone with whom your small business already has an established relationship, making questions about reliability much less of a concern.


5.   Provide more ways for them to pay for what you offer

Small businesses looking for better ways to turn their current customers into greater cash flow should think beyond getting paid at the point of purchase. Instead, develop creative ways to bring in revenue more consistently, through mechanisms like subscriptions, automatic bill pay, and even layaway.


“The last 10 years have seen a dramatic increase in companies using the subscription model to offer everything from music, movies, and textbooks to even cars for a monthly fee,” explained Tien Tzuo in a VentureBeat column last summer. Tzuo, CEO of the online billing company Zuora, points to the recent rollout of Apple’s iPhone 3G as an example of why savvy subscription pricing beats one-shot-sales thinking in the long run. “When the iPhone 3G was introduced, AT&T dropped the price of the iPhone by $100 and simultaneously raised monthly fees by $10. In doing so, they were able to sell more iPhones (lower entry fee) but earn more money over the life of the two-year contract.”


By building up your customer’s paying “habits,” you’re also building up their loyalty to your business and making it less likely they will stop buying altogether or move on to a competitor. And by linking automatic bill pay capability to a subscription model, you’re less likely to deal with late or missed payments, meaning your business can enjoy greater consistency in terms of cash flow. If your business sells big-ticket items that aren’t a good fit for a subscription model, help your customers avoid dealing with missed or late payments on their credit cards by offering them a layaway plan. Layaway, which is also experiencing a resurgence in the marketplace, gives your business a few weeks or months of steady revenue while turning one big sale into a series of smaller transactions. Here again, your business is getting paid outside the point of final sale, but is also making it increasingly comfortable for a customer to think of him or herself as a repeat customer.


6.  Convert them from mere customers to trusted employees

Just as when you invited your customers to work with your business as a vendor or freelancer, don’t overlook asking them to work for your business when you need to hire more staff. Loyal customers make for a great initial pool of job candidates for several reasons: They’re familiar with your products or services, they likely know your staff if not you as well, and they already like what you do enough to spend their money with your business. That you won’t have to engage in a lengthy and expensive job search is yet another advantage to hiring from your customers.


Of course, simply hanging a “Help Wanted” sign above your cash register or on your front door is a good start to this process, but don’t forget to post the same sign on your business’s online doorways, like your company website and Facebook page. Why? Because those online friends of your business aren’t just interested in your next product launch or discount offer; increasingly they are looking at your company’s social media sites for news about hiring. In fact, according to this CareerBuilder survey from last August, an online job posting is now the No. 1 thing—cited by 35 percent of respondents—someone visiting your business’s social media site wants to see. That kind of interest can turn a valued customer into an even more precious commodity—a good employee.

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