Business Concepts, Inc. congratulates President Kate Hyland Mercer on her achievement!

Empowered, which features one of Kate's articles, was named #5 on New York Best Sellers List!

Reorganizing a Small Startup into a Scalable Company

SUMMARY

The way a small business is organized when it first starts out can be very different from a large corporation. Businesses that wish to grow must organize themselves in a way that allows for efficient and defined expansions.

AG Salesworks faced this challenge when moving from a 5 year ‘start-up’ organization to a young company working with Fortune 500 clients. Business Concepts helped them reorganize themselves and grow from revenues of $2M to $8M.

CHALLENGE

AG Salesworks is a B2B teleprospecting and marketing services firm providing value for technology, media, financial services, and communications companies. They were originally a small, boutique organization without a well defined structure. In order to grow, they needed to change their business to have a clear sense of organization and goals.

Specifically, they needed to:

  • Evaluate their strategic initiatives
  • Improve the efficiency of internal operations
  • Better define the roles of the owners and key employees

SOLUTIONS

Business Concepts stepped in to evaluate the areas AG Salesworks needed to change and assisted with every aspect of the business’ growth. We looked at the company as a whole as well as the individual goals we defined.

Strategic Initiatives

AG Salesworks needed to define where they wanted to go and create a plan for how to get there. Providing a clearer strategy was the first step in reorganizing the business to prepare for its future. A few of the ways Business Concepts helped was to:

  • Define Strategic Changes and Growth
  • Assist in rebranding and strategic messaging campaign for differentiation and national recognition
  • Review and revise Quarterly Bonus structure
  • Analyze and review annual and quarterly budgets, assisted with Board meetings and preparation

Define Organization’s Roles

“Kate assisted us in really taking a hard look at our entire organizational infrastructure, positioning us and positioning people in the right place and time to grow our organization dramatically.” Peter Gracey, President, AG Salesworks

A clear organizational structure was important to allow the company to grow under the current management. This allows new employees to understand what is expected of them, new managers to know what their responsibilities are and structured training to give everyone the same understanding of their job. AG Salesworks was reorganized through:

  • Redefine the partner’s responsibilities and jurisdictions and clarify each owner’s role
  • Assist in the re-defining and clarification of job duties throughout the organization
  • Analyze new employee and CSR training/reviews/rewards to ensure A players were attracted and retained

Internal Operations

Once we were able to get a clearer sense of where AG Salesworks planned on going, we were able to organize their operations around those goals. Well defined internal operations are key to creating a scalable business. The bigger the business gets the more important it is that these operations are clear and efficient. A small loss of time or money in a $2M company could result in a huge loss in a $20M company. A few ways Business Concepts and AG Salesworks accomplished this goal was to:

  • Reorganize all operational aspects of the business (HR/Finance/Accounting/Quality/CSR/Production/Vendor Relations, etc.)
  • Restructure management for a proper reporting structure to assist with supervisory and employee leadership functions including Director and Quality Assurance level

RESULTS

After working for over 2 years, AGSalesworks moved from a small boutique company to a 60 person market dominating player. They have moved from a $2M company well on its way to hit $8M in revenue and has a higher than average (for their industry) client retention rate. BCI helped them improve business processes and increase their return on human capital and sales and marketing investments.

“We’ve grown our revenues as a result of working with Kate from $2M last year to $8M in the current fiscal year. I attribute my relationship with her and her organization as the driving factor in achieving this success.” Peter Gracey, President, AG Salesworks

Tweetables

Click to Tweet these quotes from the case study:

“Well defined internal operations are key to creating a scalable business.”

“Businesses that wish to grow must organize themselves in a way that allows for efficient and defined expansions.”

“Providing a clearer strategy was the first step in reorganizing the business to prepare for its future.”
 
 

Tips to Expand Your Small Business

Richard Branson, business guru and founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, and Virgin Mobile, recently posted an article on Entrepreneur.com which provided six tips on expanding and growing an established small business:

“First, know your mission. At Virgin this was often about shaking up the established markets and providing something of great value and service. In Innocent’s case it was about creating great juices to help people lead healthier lives – and doing this in a fun way.

Second, make sure you get the basic structure right. Know what you are going to do. Many times partners can provide the back office, the infrastructure or the raw materials. By building strong relationships with such suppliers, you are free to scale the operations without heavy calls on your capital.

Third, get the right team at the top. It’s hard to get this right first time. Many small businesses fail to grow because they don’t identify team members who can no longer keep up. It’s sometimes necessary to part company with senior managers who cannot develop the businesses, painful as that may be.

Fourth, a strong purpose and a sense of ethics give the company a solid foundation. In Innocent’s case the focus was on leaving the planet a little better than they found it. This simple but effective message resonates with both staff and customers, whether they number 10 or 500 people.

Fifth, no matter how big you are, details count. Just as I remain obsessive about traveling on our planes and visiting our businesses with my notebooks to chat with staff and check the little touches that make our experience unique, Richard Reed and his partners do the same. They regularly check everything from the lids on their bottles – which ask customers to “enjoy by” and not “use by” a certain date – to the carpets in their offices, which are a distinctive Astroturf.

Finally, listen to your customers and act on what you hear. I’ve always asked our staff for their views and now I track our social media channels to see how our business and brand are doing. Innocent makes a virtue of asking their customers for their views. They use the feedback to inform growth and keep them connected.”

Branson also recommended remaining focused on great service and happy employees, but to also maintain a forward-thinking mindset in order to expand your small business.

Readers, what strategies have worked for you when expanding your small business?

Marketing Through Your Customers

Sales and marketing can be a challenge and time-consuming task for some small business owners, who may have to juggle several responsibilities at once. Check out the following strategies below that encourage your past, present, and future customers to help you advertise your business – for free!

Social Media – As you end a meeting or project with customers, invite them to ‘Like’ your company Facebook page or tweet about your company on Twitter. Every time you are mentioned online, your small business will reach a network of others who may need your services. According to the Social Skinny, a website for all things social media, 27% of small businesses are using social media for business, which is an increase in 10% from last year.

Review Websites – Resources such as Yelp or Angie’s List are popular and well-trusted among many online users. Maintain your company’s profile regularly on review websites, and also ask customers to post testimonials of their experience with your team.

Word of Mouth Referrals – Don’t be afraid to ask your customers to act as referrals for future projects. When initiating a new relationship or project, be prepared with a list of contact information of individuals you have worked with in the past.

Readers, how do you use your customers to help market your business? Share some of your best tips and tricks!

Book Review: Little Black Book of Connections

Nationally recognized Jeffrey Gitomer has written another straightforward, in-your-face book that has extremely applicable information to anyone involved in business. In his Little Black Book of Connections, Gitomer dissects the fundamental issues of why people network, how successful people work their connections, and why connecting with others can enrich our lives and our businesses. He starts his book by asking powerful questions like “Who do I know?”, “Who knows me?”, and “What do I want?”. He then uses the rest of the book to explain how clear answers to these questions can determine the level of success we can expect when we start and maintain our ‘connection process’.

Gitomer’s style is comical and practical, so regardless of your level of experience in networking for business, his ideas will inspire you to evaluate your networking plan through new eyes. Most people think, “Planning? Who actually plans their networking strategy? and who has time to take the process slowly?…I need the business NOW!” However, Gitomer’s philosophy is so simple. He lays out all of the quick and easy steps for you right in the book. Using humor, he demonstrates the value of being disciplined and dedicated to continuously creating connections.

Connecting with others is a skill that is built over time. No one does it perfectly all of the time, so the author shares some personal stories of successes as well as failures. While some of his examples are a little outrageous for the average business owner and sales professional, his fresh ideas spur us on to take chances and create our own ‘new ideas’ of how to connect with others. Gitomer’s style is big and bold, but even the timid can take away the following two important nuggets from the book: 1) I can connect with others MY way, based on my personality and what feels comfortable for me, and 2) commitment and a disciplined approach to the lifelong connection process will eventually lead to mastery. For the ambitious reader, Gitomer includes numerous side notes of where to find more information on topics and ideas covered on nearly every page. I give the Little Black Book of Connections the grade of B+.

Independent Contractors Versus Employees

Many small business owners find themselves outsourcing for their staffing needs, and hiring independent contractors. Rather than hiring part-time or full-time employees, independent contractors can help owners save on payroll and overhead costs such as utilities and office space. However, the IRS has outlined specific conditions that determine the differences between an independent contractor and an employee. Be sure to contact your attorney and/ or CPA to determine the correct category for those that you choose to hire.

Check out the table below for more information:

Independent Contractor

Employee

Taxes and Fees
  • Paid the amount allocated by the contract with the company
  • Responsible for paying own taxes and fees, such as the  self-employment tax
  • Must calculate and remit income taxes directly to the IRS
  • Submits a W-9 form to employer which contains: contractor’s name, tax identification number, and the type of business structure the contractor operates

 

  • Federal, state and local income taxes withheld from paycheck
  • Employer can also take retirement savings, medical benefits and tax-deferred medical reimbursement money from a paycheck
  • Submits a W-4 form to employer which contains: employee’s name, address, filing status, number of exemptions, request for additional withholding and attestation as to whether the taxpayer is exempt from tax liability
Equipment
  • Provides own equipment
  • Buy own supplies
  • Purchases updates to maintain quality of work
  • The small business owner purchases and maintains equipment and materials that will help employees perform and improve regular tasks
Training
  • Responsible for industry training
  • Employer pays for any general or specific training expenses
Work Environment
  • Creates flexible work schedule and culture, including attire and times of work
  • Schedule and work habits are dictated by the employer and, if violated in some cases, is terms for termination
Benefits
  • Not entitled to any benefits
  • Permitted to deduct certain health insurance premium costs from their income when they file their tax returns
  • Typical benefits include group health care benefits, short-term disability insurance, employee assistance programs and retirement income savings accounts

 

Small business owners, do you hire employees or independent contractors? Why does this decision work for your business both in the long and short term?

The Importance of Record Keeping

Small business owners often have several different types of records that are pertinent to the business. It’s essential to understand what documents are necessary to keep versus those that can be discarded. Storing records will help you to complete the following tasks more effectively:

  • Monitor financial activities, including keeping track of debtors and creditors
  • Prepare your annual income tax and tax returns
  • Understand the past, current, and predicted condition of your business
  • Assist in making educated business decisions
  • Manage cash flow and meet deadlines
  • Demonstrate your financial position to banks and other lenders, as well as to prospective clients

In 2010, The Massachusetts Society of Certified Public Accountants released The Record Retention Guide – check it out to get a more specific idea of which documents to keep and when to discard them.

Social Media Marketing Ideas for the Small Business Owner

Every small business owner should continually promote services to their target or prospective audiences. While some marketing campaigns can be expensive and time consuming, many have found social media, including Facebook and Twitter, to be a quick and cost effective method to reaching out. Follow these tricks to recruit and engage new customers as well as invite repeat business:

Share Internal Updates: Did you recently purchase a state-of-the-art piece of equipment or hire a new member of your team? Let your followers or fans know through your social media websites! A quick status update will raise top-of-mind awareness and increase transparency of your small business.

Offer Free Tips: Post a piece of information that is relevant that time of year – for example, if you are CPA, provide some ideas of how to submit taxes efficiently.

Invite Customers to a Local Event: If you happen to be sponsoring your community’s annual road race or having a table at the local county fair, invite your customers to come and say hello. There’s nothing better than face-to-face interaction to remind customers they need your services again or engage new business.

React to Current Events: Follow your industry’s top headlines and respond to any major news via status update.

Express Gratitude: Offer a discount to give thanks to your customers for their loyalty – everyone likes to be appreciated!

Create a Contest or Giveaway: Gather information about your fan or follower base by asking your customers what their favorite product or service is or what they do for a living. Provide an incentive by entering each response into a drawing for a complimentary half hour of work, for example.

Check out HootSuite to learn how to post to multiple social media platforms through only one click, as well as how to track and strategize posts.

Readers, how do you use social media to help with the marketing for your small business? What made you realize which method worked better for you than another?

Negotiation Tips for Small Business Owners

Whether you work with customers, vendors, or employees on a regular basis, it is important to be able to negotiate various agreements. Keep reading to learn some tricks to improve your negotiating skills:

Develop a strategy: Do you research and create the appropriate strategy to walk away from the negotiation with what you want or the ‘best alternative.’ Study a vendor’s website, for example, so you understand their rates, client list, and general business culture before speaking with them. Know what is negotiable versus what terms are set as firm.

Identify your objective: Before you begin a conversation, know your limits whether it be a certain number of hours or amount of money you are looking to earn. What is your bottom line?

Choose a ‘best alternative’: There’s a chance that you may not receive exactly what you want – what is the next best thing? Consider this as you create the strategy for your negotiation.

Learn to read others’ behavior: Pay attention to the other person’s reactions and nonverbal body language. Are they showing discomfort or a particular emotion when you mention something in particular? Understand how to correctly read others in order to steer the negotiation in your favor.

Be ready to walk away: In some negotiations, it’s considered tactical to essentially end a conversation and leave the room. ‘Walking away’ from a potential deal denotes power and confidence – and don’t be surprised if the other party contacts you at a later time, agreeing to your terms! As always, use your best judgment.

Listen and speak clearly: Explain your demands carefully and clearly, and then listen when the other person reveals their requirements. A negotiation is like any other form of communication, so remember to be always be respectful and do not interrupt another’s thought.

Confirm the decision: At the end of the negotiation, verbally confirm the agreed upon terms. Make sure that one of you has agreed to create a follow-up written statement as well.

Hi readers, share some of your negotiation stories – what strategies have worked for you?

 



Creating a Partnership Agreement

Although 72% of all small businesses are sole proprietorships, many find that forming a business partnership may produce better overall results. Partnerships offer more freedom for business owners as well as the potential to earn greater profits. The Small Business Association (SBA) defines the three different types of partnerships:

General Partnerships assume that profits, liability, and management duties are divided equally among partners. If you opt for an unequal distribution, the percentages assigned to each partner must be documented in the partnership agreement.

Limited Partnerships (also known as a partnership with limited liability) are more complex than general partnerships. Limited partnerships allow partners to have limited liability as well as limited input with management decisions. These limits depend on the extent of each partner’s investment percentage. Limited partnerships are seen as attractive to investors of short-term projects.

Joint Ventures act as general partnership, but for only a limited period of time or for a single project. Partners in a joint venture can be recognized as an ongoing partnership if they continue the venture, but they must file as such.

If you decided that a business partnership agreement is the right next step for you, follow these tips when negotiating a business partnership:

Share your (honest) business goals: Make sure you and your partner understand each other’s priorities regarding the business and that you have discussed its future vision. This will avoid further confusion or disagreement in years to come.

Define responsibilities: Who does what, and when? Talk about how all necessary tasks will be completed, and expectations for one another. How do you classify quality work?

Take advantage of a shared financial commitment: It can be easier for two people, rather than just one, to secure credit or bring together savings to help the business grow.

Maximize each other’s skills: According to the SBA, business owners can “utilize the strengths, resources, and expertise of each partner.” In turn, there is the potential for new ideas to be generated and effective processes to be implemented.

Finally, before entering into a business partnership, the SBA also advises to talk though:

  • Restrictions of authority and expenditures
  • Partners pay and compensation
  • Distribution of assets on dissolution
  • How profits and loss will be shared
  • Amount of equity invested by each partner
  • Length of partnership
  • Provisions for changes or dissolving the partnership
  • Dispute settlement clause
  • Settlement in case of death or incapacitation

Small business owners, what tips and tricks can you share for a successful business partnership?

The Art of Social Commerce

Social media has become one of the most convenient and effective marketing tools in today’s technology age. Websites such as Facebook and Twitter offer small businesses the opportunity to create an electronic storefront, or Facebook page. This allows for owners to then post coupons and promotions, sell goods or services, and otherwise interact with clients. Giving clients the opportunity to place orders, schedule consultations, or purchase items online is an excellent way to engage in social commerce.

Social commerce is a fairly new concept established to designate online purchasing in the world of business. According to Brilliant Noise, a European digital strategy firm, social commerce is defined as:

The use of social media in business, specifically relating to customer acquisition and new commercial models made possible by social media. In terms of customer acquisition, the opportunity is seen as either:

  • Direct: Customers making purchases in social media spaces, responding to promotions or using tools to guide purchase decisions.
  • Advocacy: Customers recommending a service to their friends / social networks.

Learn more about the 6 C’s of Social Commerce.

F-commerce is a term specific to businesses selling goods and services on Facebook. Sucharita Mulpuru, a retail analyst at Forrester, explained how small businesses have been finding more success on Facebook than larger companies. According to the New York Times article “Small Retailers Open Up Storefronts on Facebook Pages,” a start-up called Payvment provides support for Facebook shopping transactions. The social commerce platform has 170,000 clients and is signing on about 1,500 stores a week, most with fewer than five employees. Try the following techniques to successfully sell your goods or services on Facebook:

How do you engage in social commerce? What strategies can you share for buying and purchasing online?

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