This week I will not be able to make the Champaign-Urbana Freelancer Meetup group get-together at Crane Alley at 8:00pm (upstairs) on July 22nd as I will be out of town in St. Louis. However, I did want to contribute to the scheduled discussion on business cards and related marketing techniques.
Over the last 12 months I have accumulated a number of links about business card and their marketing impact specifically, so I wanted to share a few of those links. Not all of the links or videos I will be including here I necessarily agree with, but they are thought provoking and they might get you to think about your business card in a totally different way.
First up let us look at the creative possibilities of business cards. The following links should demonstrate what is possible with business cards. They really don't have to be boring:
Second I wanted to point you in the direction of a blog post about business cards. Lots of varied opinions and ideas included in the comments: Business Cards: The Trickle Down Theory of Cool.
Lastly I wanted to show you a very animated (and highly opinionated) talk about business cards by some guy on YouTube (you may or may not agree with him, but he might get you thinking a little differently):
Hopefully this provides some food for thought at the CU Freelancers Meetup this Wednesday even if I can't be there:( Feel free to comment about your thoughts on any of these links below.
Resources
Below are a list of places online that you can order all types of business cards from:
Having a good business identity is very important for any startup. Once you have created a rough draft of your business plan (for yourself in bullet point format or whatever format you are happy editing and revising as needed), organized or incorporated your business entity, registered for a new FEIN, opened up your bank account, submitted applications for bank loans or maybe secured Angel or VC funding you need to start thinking about how you will brand your business and what identity you want to create for your new business.
This business identity is often overlooked by many small business owners when starting out and this mistake can be costly. Before you get your logo, business cards and stationary done, you really need to think about the following first:
What is your doing business as (DBA) name? This might be the same as your legal entity name, but sometimes it doesn't make sense to do that. Consider what will work for your audience.
What is your business' vision, mission and position? Make sure this is clear so that you do not give off signals that are different to how you want your business to be perceived by your target audience.
What is your business' unique selling point (USP)?
What are your business' core competencies?
What visual characteristics do you want your business associated with? For example, do you want a clean iconic look that is easy for consumers to recognize after only a few impressions of your logo (great for consumer/individual oriented businesses)? Or perhaps if you are selling primarily to business you want a logo that instills trust, experience or high quality.
Once you have specified the above, you should look at business identities in your field (or related fields) that you think would be a good match for your new startup. What have they done well? Also make a short list of business identities that are a bad fit for your startup's mission and vision. Note down makes them a bad fit for your startup. Sometimes the logo is very nice (i.e. not the graphic designers fault), but it gives off the wrong impression for your stated mission and vision. These are the mismatches to focus on.
This process gets you thinking about your identity and branding so when you hire a graphic designer to create your business identity you can be clear with them about what type of identity you want for your business and they will be able to come up with something even better.
Identity/Logo Resources
To get you started below are some low cost companies that can create your logo, business cards and stationary designs (and sometimes print them for you). The starred entries I have personally used and can vouch for their quality:
Networking events: Go to professional or consumer events that would be interested in your offering (product or service). Get your name out and your business cards out, but don't be that sales person jerk who only wants to pressure people into buying something from him/her. That will not build you karma points. Getting your name out there and leaving a pretty good (it doesn't have to be fabulous) impression will do wonders. I know, I know, I suck at this too, but you must do it.
Press Releases: Writing and sending out press releases are very important if you really want to get real press coverage. Having news contacts at the newspapers, magazines or journals you want to get press in (and ones that would want to cover your story) is very beneficial, but don't lose hope as you can still get coverage without them. Check out any Jay Conrad Levinson book that contains public relations material as a good guide. If you don't know who he is, then you had better start reading at least a few of his books.
Advertising Materials: flyers, business cards, newspaper ads, magazine ads, classifieds (where relevant), billboards (ok, it might be out of your price range for a startup and effectiveness is questionable, but there are some really great billboard signs that work, like the Chicago Metra's billboards around the CTA stations - it always got me thinking I wanted to live nearer a Metra line so I didn't spend 45 minutes traveling just 5 miles, ugh!).
Your Contact Book: Use your contacts and just tell people you already know what your startup business is about (if it isn't secret). Tell people and be as enthusiastic as possible about your plans. Don't try to sell them anything directly, just let them know. Just tell people about your business and give them a few extra business cards to give to others they may know if they are interested. You'd be surprised how much advocating people you already have a good relationship with are willing to do on your behalf when they meet people that would be good prospects for your new business. Even if you do not know people very well, but have only had positive interactions with are usually willing to let people know about your new venture if a related subject comes up conversation.
Online Strategies
Microblogging (e.g. Twitter, Facebook statuses): The idea behind using microblogging platforms such as Twitter to promote your products and services is to provide useful/helpful tips or solutions to other Twitterers who are in your target market OR would be retweeting your helpful tweets to followers that are in your target market. You can use your Twitter account to tweet about new blog posts you have published as well to get people to your startup blog, but also make sure there is a good reason for Twitterers in your target market to follow your tweets on Twitter (or other platform if applicable). So share useful links that would be of interest to your target audience. I plan on writing a blog post dedicated to using Twitter for startups in the next couple of weeks to expand on this.
Social Media Photos (e.g. Flickr): Put photos of your product or office space or store front on social media photo sites. Tag the photos with relevant labels and add context to the photo (like in Flickr) where relevant. Add geotags too! Even just 35 people that find your photos randomly each month could remember your business name and if/when they come across it again, the image of the company in their minds will be much stronger. If you put up interesting photos you can bet some people will forward it to their friends. Make sure the type of "interesting" contained in the photo meshes with the image you are trying to promote for your business.
Social Media Video (e.g. Vimeo, YouTube): Create videos or even screencasts (great for demoing software, websites or showing off your programming skills) that demonstrate your product or services in some fashion. Always link back to your business or product home page in the blurb about the video or show the URL in the credits of the video. Do not try to create a TV advertisement and put it up because everyone can see through that, but be real on the video. Show a real person using the product and perhaps even explaining some things they found confusing about the product at first, but then figured it out. Have them explain what they figured out. Now the viewer actually has it figured out so the barrier really isn't there any more and the video was honest. Web/Video 2.0 really is all about honesty and humor. If you can supply at least one of those in your video which would appeal to your targeted audience, then you are one step ahead of all those blatant ad-driven YouTube channels.
Create a Startup Blog: You can create a blog in many different blogging engines or CMS platforms. I'll leave that decision up to you. Whatever engine or CMS platform you choose, it is secondary to creating a meaningful and useful blog for your business. This blog is more of a personal blog, since I don't make money from coaching entrepreneurs and freelancers, I just want to see more people leave the false security of W2 employment, because I think it is the biggest con, especially in the 21st century where job security is a misnomer. For a business blog if you provide services (like consulting, etc) you should offer readers small but useful tips related to or in your area of expertise. This way when they want to get a more complex project done using that skillset and they found your tips helpful, they will think of coming to you. If you offer products, you might want to showcase new products or product enhancements on your blog. Or alternatively you could offer a special promotion to get your readers in to your store (if that is what you have) in person.
Business website: Normally this would be #1 on the list of online marketing strategies for most people, but I personally think you need to have an open dialog with your customers online first before you invest tons of money in a good website. Initially get something basic up there. Forget the Flash intro and the business buzzword dense marketing speak. It doesn't make people want to buy from you. Talk on the same level as your customers/clients. For example, if your customers are Joe Schmoe the consumer, don't talk down to him and don't talk on a higher level! These mistakes are all too common. For businesses whose clients are looking for a little more sophistication, then use language at that appropriate level, but drop the pretense. Just cut the BS.
Listings (e.g. Craigslist, Facebook events/groups/marketplace, other local online calendars for events/launches, etc.): In my first two years of consulting you would be amazed just how much interest I received from just posting my resume outline on Craigslist in one location once. It gave me enough work for quite a while. That was 2001-2002, things have changed...a little. You might not get as many prospects from Craigslist as you once used to because now everyone is posting either their resume (for freelance work) or their products and services on listing sites like Craigslist. Plus now there is quite a lot of spam on Craigslist in a number of these sections, so people aren't using it quite as much in those sections (housing, jobs and for sale sections seem pretty popular still though). So now you need to be looking at the new places people are going to without so much spam in those relevant sections. Look for local online calendar sites if you are doing a grand opening or creating some kind of meetup event. You might want to also have a look at creating Facebook Groups, Pages or Events in the relevant category or possibly using the Facebook marketplace feature (I think that is what it is called). Keep an eye out for similar features on social networks that are most appropriate for your business. For example, a B2B business might want to join or create a relevant LinkedIn group and answer posted questions or ask questions to those that might want to buy your products or services what they specifically look for.
SEO: When you do get a more official website up and running you will need to think about search engine optimization, not just for your website, but also on how to promote your social media profiles better. You should want to promote your profiles within the social networking site and have the profile accessible by search engines too (if they truly are "public" profiles - don't forfeit your personal Facebook account if you want to keep that for real world friends and family).
Squeeze Pages & Building Mailing Lists: Now people start running away from me when I suggest you start building mailing lists. I am not a spammer, but to start a previous business of mine I used (and will use) a mailing list I grew from squeeze pages and sidebar "Subscribe to our newsletter" forms. These are opt-in mailing lists. You do not email people who do not sign up for your newsletters. That would be SPAM and there is no getting out of that. However, when I had a new offering in a previous business I included it in my regular newsletter at the top. Usually with a promo code to give the newsletter subscribers a discount. I found it to be very effective.
Podcasts: Even though I have a Podcast Network client currently, I put this last, because podcasting (or vodcasting aka video podcasting) requires a lot more time to get right. You want to do a podcast if you can create a useful audio or video show on a regular basis. The benefits of podcasting for your business would be that you establish yourself as an expert in the topic of the podcast. For example, a business attorney could start a podcast that gives tidbits to people that want to start their own business. A software developer (like Ryan Bates does very well on Railscasts.com) could create screencasts to show how to do something to newbie developers, technical managers or tech entrepreneurs who heard the buzz about Ruby on Rails (in this case) and wanted to find out more. Who do you think those people will think of if they want to hire someone to develop a Ruby on Rails site first? And do you think Ryan Bates gets asked to speak at conferences too? You bet! Ryan also has a ranking of 15 out of 14085 Ruby developers registered at WorkingWithRails.com.
Every startup needs to get the word out when they are nearing their public launch date. Whether you are an online entrepreneur or a local bricks-and-mortar retail outfit, the same principles apply.
Even if you aren't getting outside advice or consultants to help you with your marketing, you should spend a little while getting a plan down on paper (or one some kinds of private wiki or whatever tickles your fancy). It doesn't need to be written well, just well enough. It should be written to help you communicate to yourself and to your partners (or who ever will be working with you on implementing the plan) the what, who, why, how and where of your plan. It is that simple. You can even just keep a list of bullet points for each section of the plan document. It is only useful if it is in a format that you will want to read and maintain as your plan evolves (and good marketing plans always evolve).
The most important thing to remember about writing a marketing plan is that it is just a tool to help you organize and collect your thoughts in one place using a tried and tested structure. Feel free to change parts of the plan around or remove sections that aren't very relevant for your business or product/service offerings.
Most marketing plans look something like the following:
Executive Summary: write this last, just highlight the most important bits from the next sections. To be perfectly honest this is only useful if you need to distribute the plan with others. If you are the only person reading the plan, you can pass on to the next sections until you need to give the plan to someone else.
Goals: outline products, services and targeted markets and then list how you will measure success of your marketing plan. For example, a goal might be to sell 10 more t-shirts each day (or hour or whatever) directly from marketing efforts detailed in this plan. You might want to note here (for yourself) that you will somehow need to "track" the source of each new purchase from the marketing efforts described in this plan (e.g. affiliate URLs, promo codes, coupons, etc.)
Situation Analysis: contains the following subsections... Company Analysis
Goals
Focus
Culture
Weaknesses
Market share
Customer Analysis
Number (find multiple sources for data to support this number and give a conservative estimate if doing this only for yourself)
Type
Value drivers
Decision process
Concentration of customer base (branch out by specific product or service offering you will provide)
Competitor Analysis
Market position
Strengths
Weaknesses
Market shares
Collaborators: list out all the partners, JVs, businesses, consultants or contacts you will utilize to implement your plan, include contact information so you have it all in one place. Again this is most useful for organizing yourself around your marketing plan.
PEST Analysis: Political, Environmental, Societal/Cultural, Technological analysis of the macro-environment (big picture stuff).
SWOT Analysis: [Internal] Strengths & Weaknesses mapped against [external] Opportunities and Threats.
Markets: for each market you want to target describe who is in the market (it's somewhat ok to generalize based on data, but NOT stereotypes), what they want from the product/service offering, projected percentage of sales from the market, their requirements and their price point.
Marketing Strategies: list all the kinds of things you plan to do to market your products/services. For example, if you sell medical equipment you might take out ads in medical journals or trade magazines that are read by clinic and hospital managers. Make sure to list the publications, contact information for marketing dept at publication, cost of ad(s) and what the ad would look like (e.g. full-page, full-color ad or black and white text box 3in by 2in). If your business is purely online *consider* some offline marketing strategies in areas with high concentrations of your primary target audience if your budget can afford it. Conversely if you are a purely offline store (for example) consider getting listed in local online directories, etc. as part of your marketing plan. You need to be thinking about both online and offline techniques together in this day and age.
Costs & budget: list all costs and figure out if these all fit in your preferred budget or not. If not, is it within 5% of the budget? If so, can strip out any items without changing quality of the plan too much? If not, can you get the extra 5% to cover the overage? If much more than 5% over budget, think about what will give you the most impact and do that first until you see results from that campaign and then perhaps you'll have the money from extra profits generated to implement the rest.
Once you have organized your thoughts you MUST make sure you EXECUTE the plan!!! Even if you spend weeks developing the most kick ass plan ever, it means nothing unless you follow through. That is why it is really important to keep the plan simple, just touch on all the relevant sections of the plan above to help you organize and collect your thoughts on marketing strategy, plan and timeline.
I will be posting a follow-up post listing a few online and offline ideas to get your started if that is where you are stuck in this process.
What structure do you use? What writing format (e.g. paper, wiki, etc) works for you?
Note: I will return to the legal entity series next week when I will talk about S-Corps and LLCs.
In the last blog post we looked at the main types of legal (business) entities that can be formed in most states of the US. Today I wanted to take a brief look at how you would choose whether to incorporate as a C-Corp or not.
If you are a Venture Capital (VC) funded startup with IPO exit strategy then you will almost always want to incorporate as a C-Corporation (or C-Corp for short). In fact, it is likely that you will not find any VCs to pony up dough for your startup if you have incorporated or organized your business as anything other than a C-Corp and specifically a Delaware C-Corp (we will get back to the Delaware part later). This even applies to S-Corps.
The reasons are mostly that S-Corps are only allowed to have one class of stock and all shareholders must be natural persons (not other corporations). This doesn't sit well with VCs who almost always want a separate class of stock with "higher" powers (aka "preferred" stock) and they want the interest in your company to be in their firm's name, not the individual board members as they usually represent a large collective of private equity investors not just themselves. S-Corps also have a limitation on the number of shareholders in the corporation, which means it takes a lot more legwork pre-IPO to convert an S-Corp to a C-Corp before you can make your initial public offering. Thus incorporating as a S-Corp for gazelle style businesses that VCs tend to fund is undesirable on multiple levels. So go with C-Corps from the start.
There are a number of disadvantages to C-Corps that do not make them ideal for smaller startups that do not expect to go IPO soon or even get bought out by Google or Yahoo! such as:
Double taxation: the business gets taxed on it's income before dividends are paid out and then each shareholder that receives dividends must pay taxes on the dividends. This is known as "double taxation" of C-Corps.
Paperwork complexity: generally there is more paperwork to file with the state(s) Secretary of State and Department of Revenues (or equivalents) and the (federal) IRS. Especially if you compare it to organizing an LLC where only owners are working for the company because you will not need to run a each payroll/SUTA/FUTA reports/filings with the state and federal government agencies EACH QUARTER, which can be a pain.
Costs: Even though the state filing fees of a C-Corp might be much less than organizing and maintaining a LLC, the costs of hiring an accountant or payroll servicing firm to file all the necessary filings/reports, etc is likely to be more than that for LLCs if you are starting out small with just the owners working for the company initially. Many people overlook this and just focus on the state organization/incorporation and annual maintenance fees.
Now there is the question of where to incorporate your C-Corp (assuming you think this is the legal [business] entity for you). Usually attorneys and accountants have a number of suggestions in this area.
I have heard professionals suggest Delaware every time and then you would need to create the "foreign" C-Corp in the state you will primarily be conducting business. The state of Delaware is very business friendly, so if a customer, client or vendor files suit against your corporation they will need to do it in the Delaware courts.
Other professionals advocate incorporating in Nevada or Florida. The latter is really only due to having zero state taxes and low filing fees and requirements, whereas Nevada's benefit also includes these plus the potential benefit of "privacy". Our good friends in the Nevada state government are generally more restrictive of the information they pass on to the federal government (including IRS) than other states. However, whenever you incorporate you must file at least one form with the IRS (called SS-4). Yet some attorneys and accountants seem to think this is still worth the extra hassle of dealing with another party (assuming you are not primarily conducting business in Nevada) after your own state. In addition, Nevada is quite business friendly. I don't know how it compares to Delaware in a nitty gritty legal sense though. You will need to consult your business attorney for more details.
Note: I have only heard attorneys in Florida suggest incorporating in Florida (even if you are out of state), just so that we are clear. However, I have heard non-Delaware and non-Nevada attorneys recommend both of those states, especially Nevada for LLCs and Delaware for C-Corps and S-Corps.
I hope this gives you a basic outline of C-Corps in the US. If you want to proceed further with incorporating your own C-Corp below are some worthy links to get you started seriously and mostly pretty cheaply:
[Lawyer Finder Service] Find a business lawyer online - this is an online service that will allow you to find a qualified lawyer for your purposes usually for a small fee.
[Filing Preparation Service] Incorporate with SimpleFilings - incorporate or organize your LLC, use a secure online form to incorporate your business or non-profit organization.
There are basically six types of legal entities (or five if you merge LLCs and LLPs together) available (mostly) throughout the US:
Sole Proprietorship: an "entity" for a business owned by only one person that has no separation from the owner in terms of liability or taxes. In a nutshell if your business pisses off a customer or vendor (and they have legal grounds) they can come after your primary residence (if it is in your name).
Partnership: an "entity" for a business owned by more than one person that has no separation from the collective owners in terms of liability or taxes. In a nutshell if your business pisses off a customer or vendor (and they have legal grounds) they can come after each partner's primary residence (if it is in their name).
Limited Liability Company (LLC): a legal entity that in many states of he US can be owned by just one person or by multiple people or even one or more LLCs. This type of legal entity is governed by state law (the state it was formed or organized in), but there is a general consensus across the states that there is at a minimum some liability protection for the owners of an LLC (assuming the members or managers do not "pierce the seal" - more on this in another post). An LLC on a federal level can be taxed as a sole proprietorship, partnership or as a corporation as designated by the LLC. Some states also allow the formation of Series LLCs, which allow an "umbrella" entity over multiple "cell" businesses where each cell is given extra liability separation from the others in the series. This cuts down on filing and fees for such Series LLC structures.
Limited Liability Partnership (LLP): a legal entity that does not have the same flexibility in terms of taxes as a Limited Liability Company, but does provide the same liability protections (or at least virtually the same). This is usually formed by professionals such as attorneys so they can protect their personal assets if something goes amiss.
S-Corporation (aka S-Corp): a corporation entity that avoid "double taxation". You may have heard it referred to as a "pass-through" entity, which means profit/loss and deductions are carried over to the shareholders tax returns based on their proportional ownerships in the entity. There is more paperwork to file for S-Corps as compared to LLCs and LLPs, especially if your business will not have employees for some time.
C-Corporation (aka C-Corp): the type of legal entity that nearly all VC funded startups in Silicon Valley form because their exit strategy is almost always IPO or getting bought out by a public company. There is a little more paperwork headache as compared to an S-Corporation. It almost never makes sense to form a C-Corp if you are just looking to start an entity to freelance through unless somehow you plan to make an IPO within a few years.
It is so important that you think twice about who you hire as your accountant for your new business. Just because someone passed an exam, it doesn't mean they are a good fit to handle your business' accounting requirements.
I want to note that many people really just need a bookkeeper with experience managing a similar business' "books". You don't always need a CPA, but it depends on your situation.
It isn't easy avoiding some pitfalls when starting your business. One potential hazard you can try side step is choosing an accountant in a smarter way. Below is my top five list of things to do (or not to do) when picking your accountant or bookkeeper:
Howdy Partner! Consider your accountant as a business partner, even if he/she isn't getting a percentage of the profits like a business partner normally might. Your accountant must be someone you trust and someone your gut instincts say has a compatible work ethic and professional style to yours. A number of people I know (including myself) when starting their first business made the mistake of not listening to their gut instincts about an accountant. They all regretted it! If there is a rush to get something filed and you don't have time to shop around initially, then deal with the urgent matter at hand (e.g. file state/fed papers on time to avoid penalties, because often there are really ugly late fees/penalties). Once you have completed that specific task at hand, you should make sure you find another accountant who gels more with your work ethic and professional style.
Interview at least three. Make sure you arrange interviews with three or more accountants in your area that are recommended by some body or small business group in your local area. For example, groups that you might ask for referrals include the local chamber of commerce, special interest groups (SIGs) in the industry/area you plan to start your business in (e.g. a real estate investors club if you want to start a business to hold your real estate assets) or the local office of the Small Business Bureau.
Scope it out. Scope out what financial analysis/bookkeeping projects or tasks you need your accounting partners to do for your business. You should also determine how often you need your partners involved (e.g. prepare payroll filings every quarter or just annual state and federal tax filings for your business). Specify all these things out before you meet or interview with any partner candidates. Remember you are shopping for the best partner for your needs at your preferred price point. Ask the candidates what they charge and exactly what they do for that price. You might find service discrepancies you may not have noticed if you don't ask specific questions about exactly what it is they provide for the price they quote. Do not think you must go with the accountant your Uncle Jessop recommended even though he has never started his own business and only knows the CPA through a bridge club. Your Uncle Jessop's bridge friend might be a really good fit for some businesses or people, but he/she may not a good fit for your business needs or budget.
Check them out. Always ask for referrals from other small or startup business owners with similar types of business models. For example, if you are starting up as a web design freelancer with an LLC you should ask for referrals from any type of consultant that is organized as an LLC in the same state you are in. Please remember to call up these people. I know it can be terrifying, but honestly it is the best way to find out for sure. Do not just assume that because the candidate gave you these phone numbers, postal addresses and/or email addresses that they will give him/her glowing reviews.
Be dumb! Ask questions you (mostly) know the answer to, so you can see how they communicate with you. You do not want to work with an accountant that makes you terrified of asking (even stupid) questions. Different people consider different responses more preferable to others, so you should decide before interviewing the candidates what are acceptable responses so you can measure their performance more objectively.
Now that you have met all your candidates you should have a clear picture of which of the candidates will be able to handle your business accounting needs best for this stage of your business.
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