One question I get asked on a regular basis is how a business should be structured. Not necessarily business entity and what type should be chosen, but if one has a “complicated” business model, how should it be structured. The question of subsidiaries (should I or shouldn’t I) is often the subject of discussion.
Since I am an attorney, my answer is usually complicated and full of ifs, ands, or buts; here are a couple of client scenarios that led me to advise my client to use subsidiaries or not.
Disclaimer: Although inspired in part by a true incident, the following story is fictional and does not depict any actual person or event. #LawAndOrder
Same Business Different Liability
It’s Not Me Company is an online streaming business that decided to add a brick and mortar retail business. The streaming company had little or limited liability in the type of work that it conducted. Expenses were mostly tied to human resources and the purchase of equipment. It’s Not Me, decided to “merge” with a startup company that was a brick and mortar gaming company. Instead of housing both companies as one, we decided to create a parent and subsidiary relationship.
Rational: It’s Not Me had a lot to lose if the start-up when bust. Separating its assets from the start-up allowed it to limit its own liability. If the start-up goes belly up, then the only thing It’s Not Me loses is its investment. If the start-up does well, It’s not me increases its value by having a profitable subsidiary, not to mention potential dividends.
Different Business Different Liability
Janet Jacobson owns multiple businesses. She has an adult day care, an assisted living facility and a home health care agency. On the surface, they seem like the same or similar businesses. But the liability and regulations are very different. Licensing requirements mean that ownership is closely monitored. Therefore, we decided to have three separate companies with no connection with one another.
Rational: Each company, though service the same or similar community, has a different set of legal requirements and reporting. Having three separately owned entities by Janet created the ability to adjust to the varying requirements of governmental oversight. In addition, we were able to create service contracts between the entities to allow them to work with one another and receive payment for services.
Different Business Same Liability
Same liability is a misnomer here, I simply mean that the liability risk is no greater or less than the other businesses. In this case Barbara Bennett and her husband want to invest in various companies. Instead of having multiple businesses in their name, they have decided to create a company that “houses” the various investments. In this case, we decided to go with a “step-parent” company that owned percentages of other companies.
Rational: Barbara and her husband did not want all the business ventures tied to their name and assets. To give them another layer of protection, we created an entity that could sufficiently invest and own other companies. These companies would not be wholly owned by the investment company. In most cases, the company may decide to fund other ventures or partner with certain companies. This will allow all passive income to flow into the investment company.
Okay, I am just going to say it, if you did not plan for 2017 in 2016, you are already behind. I know you are excited for the New Year. So am I! I, like so many others had a tumultuous 2016. If 2016 was a movie, it would be called The Good, The Bad and the Really Ugly! Despite all the drama that was 2016, in October I was busy planning for 2017. Getting things in place to hit the ground running. There is still more to do, mind you, but I have a plan. So should you.
If you are waiting for January vision parties and high-fives from your virtual friends, your 2017 may not be as great as you hope it to be. So if you have your plan, great! If not, call me. We need to talk. Now, here are a few things that you need to focus on to make your 2017 plan work and have a great start to 2017.
Connect with Collaboration Partners
I am going to talk more about this in future posts, but collaboration is going to be imperative for your small business to survive. Collaborations can take on many forms, but for today, just know that collaboration means that everyone wins. This is not the type of partnership where one person is strong and the other is not, it is where both are equally strong and are able to enlarge each other’s territory. Why is it important?
Let me give you an example. I recall a particular good collaboration between two flooring companies. They were distinctly different companies and each had multiple locations. They came together to jointly advertise their business. They ran multiple TV and Radio ads for about the course of a year. It worked well. It increased business for both companies. More importantly, the collaboration allowed them to achieve something that they may not have been able to do alone. That is true collaboration. Two (or more) strong companies who are equally strong on their own, who came together to be even stronger.
Listen to your customers
I know! You do this already, but this is more than simply asking our customers which colors they prefer. That is important, but really understanding your clients to the core. Have you heard of Big Data? More importantly, do you know how to use it?
There is a lot of information to be had and known. You have to consider what you need to know. For example, if you are a personal trainer. You know that the 1st of the year when everyone promises to lose weight. What you may not know is how people make those decisions. Meaning, do they see something online? Do they go with well-known brands? Do they find a fad diet on the internet? How those decisions are made are just as important as the fact that they are made.
In addition, you can trace patterns and your client’s behaviors to understand where things are going in the future. Or, you can be ahead of the curve and create something new. The point is that you have to be in touch with your customers and the trends that you customers like the ones you have are moving towards. If you wait too late, this time next year those same customers may not be yours.
Explore funding options
In 2017 there are a wide variety of financial options out there. Even the not so new and hip Crowdfunding option has changed substantially. Therefore, worrying about whether or not you can get a bank loan should not stop you from doing what you need to do. From factoring to venture capitalists your options are limitless. However, you cannot just expect money to fall out of the sky. And you also cannot expect to get something for nothing. Meaning, that your business needs to have some level of stability. The risk being that if you get a loan, you need to pay it back. If you are successful with your crowdfunding venture, you need to be able to fulfil your prizes. If you get an investor, you need to be able to show them you can make the business work.
These are decisions that you can make on the fly, they need to be carefully planned out and prepared for. So now is the time to explore and find out what you need.
I will be the first to say that I did not reach many of my goals in 2016. It wasn’t for lack of trying or planning. But as I think about it, I really did not have a sustainable plan. My plan had a lot of assumptions and theories. There was no real data or methodology to back it up. In that way I think that I failed to meet the goals that I set out. I did not act with intention. I did things without really breaking down the how and why.
Honestly speaking, I should know better. I see that happening with a lot of small business owners. You set a goal of increasing revenue, clients, expanding locations, but there is no real intention behind the actions. Planning is great; but without intentional actions, good plans go to waste. This is how you can be intentional and ensure you meet the goals you set out for your business:
Everything you do should be with intention!
Let’s say that you have a goal of increasing your gross income by 20%. For easy math let’s say that the 20% income increase is $20,000.00. So the question is why do you need or want the additional 20K. Yes, simply making more money is a good goal. But understanding the why behind the goal will ensure that the goal does not get lost throughout the year.
Is it that the increase is going to result in the ability to scale, increase profit, increase pay for the owner or employees? This why matters because it is going to determine the how. If you are looking to increase your gross income because you need to scale, you are going to want to do this in a way that is not going to significantly increase your costs. If you are, increasing because you want to increase pay for yourself as the owner and employee, you are going to want change or adjust your financial and tax planning. This may mean an increase in expenses not in the year of the increase but the years after.
The how is just as important as the why.
This means that you must figure out how you are going to reach your goal now that you know why the goal is important. Going back to our example, if you are increasing revenue to support scaling the business in the future, you want to utilize what you have to see if it can be supported. That means you may do a lot of testing in markets where you may want to go.
If you want to increase pay, then you are going to have to get the current employees involved to make that happen. If they are on board (increased pay for everyone) their increased workload will not make them angry and frustrated. It will also allow those with initiative and foresight to flourish and provide you with the support you need in the future.
Each task should lead to a particular goal and each goal should lead to something bigger.
Now that you know how and why, you need to know what you are going to do to get there. Your daily and monthly tasks are the things that you do to get to your ultimate goal. Don’t treat goals and tasks as the same thing. Making 10 phone calls in a week is a task. The goal of making those 10 phone calls is to get a client. You may need to make 10 phone calls to get 1 client.
What I find to be the case when goals are set is that we haphazardly do things in an effort to reach it. Someone says you need a new website, branding changes or increase advertisement, however, without a direct connection to the why, the task falls short. That is why everything should be linked. If you have a list of tasks, they should directly lead to a goal. That goal should lead you to the vision that you set out for your company.
Any financial planner worth his or her weight will assess their clients “risk” tolerance. The truth is that risk tolerance is a variable based upon experience. If you have never done anything before or have limited experience, your risk tolerance may be lower because you may not understand it. You may avoid certain things because you have experienced it and never want to again. Investing in a business venture may seem simple and your acceptance of whatever happens may not be much of a risk. However, trying the new Sushi restaurant on the corner may cause you to panic due to the fear of the unknown.
The point is risk is subjective and personal. That is why when you talk about taking risks in business, you have to have perspective. What is the riskiest thing you have done in your business? Why did you take that risk? After you took it, how did you feel? Notice, I am not asking if it paid off or not. I am asking you about your reaction to it. How do you assess risk?
Risk is about the reward and the penalty
There are several things I would never do (and by never, I mean never) voluntarily. Jumping out of an airplane, bungee jumping, scaffolding. I mean, if my life depended on it, I may just decide that my life up until that point has been amazing and it is just time to go. I think about the penalty and it is not worth it to me. Regardless of the reward.
There are some who only think about the reward when it comes to the risks. I have had clients who made decisions which I thought were insane, based upon the possibility of everything going right. They don’t consider the negative effects at all. I had one client who made the decision to take out several loans to maintain the operations of the business. My client felt that it would be better to use someone else’s money to fund this portion of the business. It worked well for a while until the business encountered some compliance issues which affected its income. Since the business had obtained significant debt, any change in the cash flow of the business greatly affected the stability of the business. Ultimately the business became embroiled in several lawsuits.
My client felt it was worth it because the business would have never gotten as far as it did without the loans. Despite the current problems, the risk was worth it. My client made the point of saying he would do it again. While it made my stomach hurt to hear that, I understood the point. He knew what could happen, next time he would take better precautions to prevent the same problems from occurring. For him, the reward greatly outweighed the penalty.
Risk isn’t about flowing with the wind.
It is easy to assume that risky people just go with the flow. As stated earlier, you understand the reward and the penalty and you make decisions accordingly. That means you do your research. Some risks are more easily defined than others. Apple’s risky iPhone gave people something they didn’t even know they wanted. That is harder to assess. Most of your business decisions will not be on that scale.
If you are only considering the great things that can happen, you are doing yourself and your business a disservice. Gut reactions are good, but you should also check it with research. Make a credible determination of what can happen, whether it is good or bad. What does that mean? Do your homework.
Are you hiring a new consultant for your business? Don’t just look at the cost (yes, that is important), also consider the long term benefits of having help. Maybe it cannot be monitored in terms of dollar and cents. Maybe it is monitored in terms of dollars and peace of mind. Whatever the risk and whatever the reward, assesses and make a determination about what is best for you and your business.
A business that takes no risks is doomed to mediocrity.
As I stated before, risk is relative. Depending upon your experience dipping your toe in the water could be a risk. The more experienced you become, the further out in the water you will be willing to go. The further you go in the water, the riskier it becomes. When you first start a venture it is easy to take small risks. But the longer you are in business, you will find that some risks are not actually risks. They are just a part of business. Your tolerance for risk changes and you are more willing to dive in head first.
You should always test your ability to take risks. As a business owner, you should encourage yourself, your employees and advisors to push forward. Without doing so, you will become mediocre. Mediocrity is worse than failure. That means your business is no different from every other one that exists. If you are not different, why are you in business?
2016 has been a crazy year for me as well as many people I know. Maybe it is a reflection of the time, political season or a result of a polarized nation. Things aren’t necessarily bad, but they are not great either. As many people have decided that no matter who is elected president, the apocalypse is coming, I have decided to take on a more positive attitude.
Please note this is not my normal demeanor. I typically imagine the worst things that can happen and work my way back from that view point to get to a “happy place.” But being surrounded by people and messages that sound the death toll on a regular basis makes you rethink some things. As the saying goes “a chain is only as strong as its weakest link.”
Negativity can never be as strong as positivity. Positive thinking gives way to positive results. Here are a few words and phrases I am banning from my vocabulary!
1. Broke. When used in context, it usually means a temporary lack of funds. How temporary depends upon the individual. It is not actually a sign of poverty which is linked to a more permanent and long term state of being. Broke, when used in context means you are making money, but you still lack money. It’s cyclical. There is never enough to go around.
Yes, there are bad habits that we can break and things we can do better to unhinge from the state of brokenness. But really, when you say that you are broke, you are saying more about your state of mind than you are your financial situation. It is frustrating being broke. It is more frustrating knowing that you are broke and feeling like you cannot do anything about it! The ultimate result is that you begin to make poor decisions because you are broke. Being broke makes you desperate and you spend or don’t spend based on your temporary situation.
Replacement word: Possess. Used as a verb, possess means to have an object. Something that belongs to you. Instead of referring to what I don’t have (or lack), I am now referring to what I do have. No, I may not possess enough money to pay for the website upgrades or marketing guru, but I do possess a computer and access of the internet. No, I don’t possess a million dollars in my bank account, but I do possess the skills and talent to obtain it. Possess is always connected to something that is separate from your state of being. What do you possess?
2. I’m not good at that. None of us are great at everything. There are some skills that we excel at and some that we simply cannot grasp as quickly as others. I am no mathematical genius. To be honest, there are not words that can equate to my disdain of mathematics. But as one who works with small business owners, understanding of financial statements (yes, I know that is not math), ROI as well and profit margins, means that as much as I cringe when I look at numbers, I must understand them.
When we say that we are not good at something, we automatically create stress about the matter. It becomes harder than it needs to be because we are assuming truths that are not there. I have business friend that is petrified of dealing with operations. She doesn’t want to hire anyone because she does not want to deal with having employees or contractors. That is because she is not good at managing people. It’s true, she is not, but that doesn’t be she couldn’t be better than she is now. Maybe she will never be one of the great business leaders of our time, but does that mean she has to be the worst?
Replacement words: I am working on being better. As I stated before, no one is great at all things. I certainly do not believe in staying ignorant of certain business processes and just letting a professional handle it. How do you know if that person is any good or not? In addition to math, marketing confounds me. My mode of thinking is not typical and I find it strange that I have to take a course in psychology to get to understand and know my customer. I am working on being better at marketing. Because I must! Even if I hire a marketing person to handle my business, how will I know if they are doing a good job? How will I know if what they are saying makes any sense or not? I have to be better.
3. Branding and Expert. Two for the price of one. Both are meaningless these days. The buzz words are a particular pet peeve of mine! Frankly, I do not understand why we bother to have a dictionary anymore if words no longer have meaning. But, I digress. Branding? What is that anyway? Raise your hand if you have needlessly paid a branding expert to give you a pink, red or blue color scheme? Sigh. I feel bad for true professionals who have seen their skills usurped by novices that think color schemes and fonts are all that matter in branding. True professionals understand that branding is a strategy. Colors, fonts, logos are all a part of a strategy that should lead somewhere.
The same goes for so called Experts. How many experts are out there who have never (and I do mean never) done any of the work that they claim to be an expert on? Call yourself what you want, but expert used to mean that the person had some unique training or skill set. Not anymore! Now it means that you read enough articles to charge other people who haven’t read those same articles. It is a sad reality and frankly, I it is a disservice to all industry professionals who know what they are doing.
Replacement words: Presence and Professional. Stick with me! I realize these are not cool words, but that is the point. Do I want to brand my business or create a presence in my field? Same thing? Maybe. But really what speaks volumes is not the buzz word that everyone wants to hear, it is the result that I want. I do not need a pink business card to make my business stand out. I need to create a presence that cannot be ignored. The same thing goes with being an expert! Professional still has meaning in context. There is an expectation that you will get a particular type of service and knowledge from a professional. I find these words have real meaning and are not hollow and flashy adjectives. My business has substance and I want the words I use to reflect that as well.
Before I get started, let me say that diversifying your business does not mean that you have multiple businesses that you run. Being a serial entrepreneur is different than having one business with multiple streams of income. Please note that I am talking about the latter not the former! Now that we have cleared the air, let’s talk!
Gone are the days of having one big client and one service or product to make you successful in business. Yes, you can make quick money doing anything. Long term success? Not so much. Especially in this economy, small businesses need to find ways to create multiple streams of income. This can be done through diversification. For the small business owner, this means creating or offering new products and/or entering new markets.
Sometimes you can offer various product types and forms. Think of an author. Their one book may come in audio, e-book and print. Those are various forms. But they may also take that same book and make a workbook, create a video series, or offer seminars. This is routinely known as repurposing content. This is a quick and easy way to diversify product.
Virtual vs. Physical. There are some that only offer online product and some that offer physical product. Another way to diversify product is to create something new that fits the same type of audience. Take that same author, as discussed above. Now let’s add wearables. T-shirts, mugs and bling that may pair well with the current audience and create a new audience.
Yes, I know that you have spent several months, maybe years figuring out your target audience, but you can have more than one. That is especially true if you have multiple products. Different people react to different products. But think about how you can reach a different audience. If you only offer products and services to women, can you also offer it to men? Or, can you segment your audience. Business women vs work at home mom, etc.
There are business, friends and business partners. Then there are strategic alliances. The concept of alliances (aka joint ventures) is usually limited to, marketing when it comes to small business. But you can use them for so much more. How about packaging your product or service with another company? Even if you take a little less money per unit, you can make that up with volume. In addition, you can consider licensing your product or service or vice versa. This will allow you to use another business or brand to grow your customer base and expand your revenue. It also increases the ways that your business makes money.
Ultimately, your business can survive the ups and downs of the economy if it is successfully diversified. You do not have to offer 100 different products or services to be profitable. What is necessary is that all of your income is not coming from one particular source. Whether it is a product or client, if one goes belly up, you should be able to rely on something else to keep the business afloat.
One of the things I have noticed is that I am invoicing less and less these days. With new mobile payment systems, I have been able to increase the speed at which I get paid without having to submit traditional invoices. As an avid QuickBooks user, I used to provide invoices to my clients on a regular basis. But I have realized that over the past two years, I have not submitted as many invoices. At first glance I was not sure why that was the case. I went back and took a look at my receivable and realized an interesting trend.
Invoices don’t get paid.
I realized that I have a lot of outstanding invoices. These invoices are accumulated over time and are not indicative of anything in particular, except that I realized it created an “I’ll get to it later” attitude with my clients. I have never used a paper quoting system, but that was beginning to happen with my invoices. Clients would call, we discussed price, and I would send an invoice and wait for payments to arrive. Weeks, months or years later the invoices would not be paid. So I stopped sending them unless specifically asked.
Create pay now policies.
As a service provider I took a product payment model stance. I will give you a receipt for payment. I did not consciously move into this direction, but it naturally progressed. I started using a contract with an immediate way to pay. This worked better and customers paid quickly if not immediately. Mobile payment systems helped tremendously and allowed me to charge for services in full as opposed to creating a payment system.
Provide receipts and document
As a service provider, clients want to know what their money is being used for. If it is a flat rate, I provide receipts for service and documents when it is completed. If it is an hourly service, I provide Trust Statements that show how and when the money has been utilized. That is the typical standard practice. I also provide updated invoices to show when services were completed to ensure customer satisfaction.
Track for tax purposes.
Since I rarely use invoices and quoting systems documentation of income sources is much more significant. That is why I rely heavily on my banking institution which allows me to track incoming funds. The use of online banking that allows me to access 12 months (or more) of deposits is extremely helpful. Notations on checks, credit card payments and transfers help to track who paid and when. At the end of each year, I go back through my accounts to ensure that everything has been properly tracked and accounted for.
Have a final destination.
One problem with having multiple payment systems is that you can easily have the money go in different directions and it could be very difficult to track. Therefore, it is important to have one bank account that receives all of the transactions. Even if that account is not your “operating account,” you need to know when and where your money is being deposited. This will allow you to track customer payments without having to search through all the various payment portals and keep an accurate track of payments made.
I have attended several conferences and seminars this year. Inevitably, at each conference someone asks “How do I establish myself as an expert? Naturally, there are other “experts” that are all too ready and willing to tell you how. It all begins with spewing knowledge wherever possible. Create a blog, write a book, get a podcast and get published. That is the American way to become an expert!
But does that really make anyone an expert? More importantly, does this make being an expert irrelevant? I ask this question because as I have listened to this discussion, the one thing I never hear as a way to become an expert is learning.
Everyone wants to sit next to the “Straight A” student and be in study groups with him or her. Other students seek them out because when they study, they comprehend and are able to show the teacher (expert that they know the information). Does any student ever clamor to teach the class?
It is assumed that the person that wants to be an expert is knowledgeable about whatever subject they are discussing. But if you are already knowledgeable, do you really need to establish yourself as an expert? Experts aren’t experts because they said they are. Experts are experts because others say they are.
The term expert (as most words in the English language) has become meaningless. Overused and overhyped to the point that saying you are an expert is as pointless as saying you read a book once. The new term being used to distinguish experts from the truly knowledgeable is influencer. But is that really a distinction?
I rarely hear (if ever) anyone asking to become the most knowledgeable person about a subject matter. How do I study more and learn? Who can I watch and follow to become better at my craft? How can I be the best at what I do, not just make people think I am? Aren’t those the things that that an expert should be asking?
In the never ending quest to be heard, the art of listening has been lost. Why isn’t anyone asking how can I become the most knowledgeable? Is it too much to ask that our experts actually know something? Not just know, but possess a true understanding?
The dictionary describes knowledge as meaning “well informed.” Confucius said “real knowledge is to know the extent of one’s ignorance.” Are we afraid of becoming knowledgeable because we will realize we know nothing at all? Do we resist being well informed because it ultimately means that it is impossible? (Please note my restraint from using Jon Snow as a reference).
Who can claim that they are the most knowledgeable or more informed about a subject? So we relegate this inference through words like experts and influencers. The truth is those words imply something that simply isn’t true. That is, the person who claims to be so, is so.
Thanks to LinkedIn’s Influencer status, many people are clamoring to be “the Influencer.” Is the Influencer the new Expert? Does being an influencer or expert mean that you actually know anything? As social media will have it, those things mean popularity. When you want to be seen as an expert, are you really saying that you want to be popular? Is popularity more important than knowledge? Are we confusing popularity with knowledge? I suppose one can argue that we as a society confuse opinions for facts. So why not confuse popularity for knowledge?
During my work advising small business owners, I have had to have more than one conversation about downsizing. Many of my clients have a hard time accepting this as a problem solving solution. Clients mistakenly believe that downsizing is a sign of failure. It is not! Downsizing, is a type of restructuring and every business needs that from time to time.
When I first started my business I was not sure what I wanted my firm to be. I fluctuated between having a large firm to a small boutique firm. As my practice began to grow, I had law clerks and assistants. I also worked with a few other attorneys. It was great, it was also causing me to work in areas that I really did not care to in order to keep the lights on. The bigger my firm got, the more I wished I could go back to the smaller boutique firm that I considered at first. So, I did. It was for the best and I am much happier because of it.
I have seen it with some of my clients as well. I had a client that owned an assisted living facility. The client owned multiple facilities which housed over 30 people. The client had several employees and contractors to manage as well. At one point the business was not as successful as it once had been. Due to the loss in revenue, debts were mounting and they began to borrow more and more. It got to the point that the business could not recover and had to close. I spoke to my client several years after we shut the business down. She began leasing the properties that she owned to other businesses who run assisted living facilities. She also began consulting them as well. We had a great time talking and she mentioned how happy she was.
I live in Texas and our motto is bigger is better. However, that is not always the case. Sometimes you can make more money by staying small and specializing in a certain service or product will allow you to charge more. It can also make you more nimble.
If you are looking to downsize your business before it downsizes itself, here are some tips:
1) Make a plan. I know you hear me say this all the time, but a good plan makes the difference in your life. How do you want to downsize? What is the business going to look like when it downsizes? Which employees are you going to keep and which are you going to let go? These are the things you need to consider before you downsize. A good plan will help your business survive.
2) You are not a failure. It is okay to downsize and let things go. If you have employees be honest with them that you are downsizing, but you don’t want to make everyone panic and leave on mass. Listen to your employees and contractors. They may be upset about the changes so you should take that into consideration as you are downsizing.
3) Make real changes. It is not enough just to cut expenses. You need to change how your business operates. That may mean culture and climate, it may also mean executive management. Are you the best person to continue running the downsized business? Is it time for you to start grooming someone new?
Don’t wait until you are forced to downsize. Small business owners tend to hold on too tightly to their business. Not being able to see the forest through the trees is not a good thing when it comes to business ownership. Throughout the process you want to maintain a positive demeanor and help keep employee morale up. Know that this is the right thing to do for you and your company. Sometimes downsizing is for the best!
By now you should have begun planning for 2017. Ideally you are looking at the things that worked and did not work in 2016. You are probably looking at the “hot trends” and figuring out how to incorporate those trends into your business. But before you finish planning, there are some things you need to know and prepare for.
1. 2017 is going to be crazy!
If you think things will be calm once the 2016 US election is over, you are mistaken. The US is in the middle of a political battle the likes of which it has never experienced in its young life. This is clearly going to cause shifts in the markets and create customer uncertainty. Depending on your business model, you should expect fluctuation. With the Republicans already threatening to upend the political system if Clinton wins the presidency and Democrats attempting to make an impact on young idealized voters, you can expect more division not less. This means that every month, week or day, there could be new that causes panic. Be ready to ride the roller-coaster.
2. Innovation is necessary!
No, you do not have to be the next Steve Jobs. You just need to think outside of the box. Expand your mind and your horizons. This means you must look toward the future and find out what is “new” in your industry. It starts with understanding your customer base and what they want. How can you implement those things? How can you do it better? Innovation is not about creating something new, it is about improving what exists. You should always be focused on this. And if you cannot, you should allow employees to focus on it. Too often, business owners are focused on the here and now. That is important. However, knowing where your customer is going in the future means that you will be the head and not the tail!
3. Collaborate and consolidate!
If you are looking to expand, consider using an existing business to do so. There is a reason that large businesses merge. They do so in an effort to be ahead of the completion and creating a competitive market immediately. Expansion can come in the form of buying another business, merging or collaborating. The baby boomer generations is entering into retirement and selling their businesses. This allows younger business owners to expand through purchase and also have help in the way of outgoing owners. In addition, merging or collaborating with like businesses can help expand your market and reach more customers.
4. Consider making your own app!
For those of use that are technologically challenged, this seems overwhelming and difficult. It doesn’t have to be. How can you make it easier for your customers to deal with you? Can they pay online? Can the schedule their appointments? There are a few App creators available on Google Play and iTunes. There are also other sites that provide for free App building. To the extent that you can add this feature to your business, you should.
5. Be a connector!
Even with all of the information out there, it is difficult to distinguish the good from the bad. While many “do it yourselfers” (including myself) like to do their own research, ultimately they will go to someone to ask for help. Even if you provide certain goods and services directly to consumers, consider adding connecting to your business model. Whether you charge or offer it for free, it will be a necessary part of your business model.
Shahara Wright is an experienced and highly sought after business law attorney and business strategist. She is the author of From Entrepreneur to CEO and host of the CEO Collaboration Circle. Shahara founded The CEO Effect, LLC to work with small business owners who want to implement strategy to build capacity.