Monthly Archives: December 2016
The first step to creating your small business is choosing the right name. The name should represent your industry, field or expertise while being catchy, memorable, and relevant to your customers or clientele. However, there are a few simple steps to consider before registering an official name for your future business.
Although you might already be infatuated with the name of your small business, you must ensure someone else hasn’t already claimed it. This helps you verify your company’s name is unique. Otherwise, it could violate trademark law by being too similar to the name of an existing business, in your state or any other, and whose operations are in close relation to your product or service.
Conducting a thorough due diligence check before registering the business entity or buying the domain name will help you avoid future costs in marketing, rebranding and even a possible lawsuit.
Before conducting even the simplest of searches, brainstorm a short list (preferably of five to ten) of possible business names. If you’re stuck, use different words and phrases to say your business name. Get creative! Play around with adjectives, nouns, and adverbs. Not only will this list help you search for pre-existing business names, it will also come in handy if someone else has already claimed your business name. To be sure that you are in no danger of encroaching on a business name or trademark, also add variations in spelling or wording of your potential business names.
Search for companies with similar names
Now it’s time to conduct a basis online search with a major search engine, because similarities to your chosen moniker will likely show up here. You should investigate further to see if that business offers a product or service comparable to yours. If there are no readily apparent matches, it does not necessarily mean you are in the clear.
Condense your search to specific databases
Continue your investigation by entering your business name in more specific and targeted databases. For instance, consider searching in the following business databases, which offer ways to locate a matching or similar business name before you commit to it:
- U.S. Securities and Exchange Commission
- Network Solutions
- U.S. Patent and Trademark
When you are nearly certain you can use your business name, go to the Small Business Administration’s website and find the contact information for each state’s secretary of state’s online business registry database. Search your selection as well as variations in each one. If there are no matches, then move to checking with your county clerk’s list of Doing Business As (DBA) names.
Contact the appropriate government offices
Don’t panic if your preferred name is already taken. You may still be able to use it if you are offering a clearly different product or service or are in different states. You can contact your state’s secretary of state’s corporations division. They can work with you to determine that you meet the legal requirements to still use the name.
Once you have a confirmed business name, register it right away, even if you are not ready to conduct business operations. The name may not be available six weeks or six months from now, and the small cost of ensuring it is yours to use early in your preparation will be worth it.
You can register your name through your state government. Procedures will vary depending on your chosen type of legal entity (sole proprietor, LLC, corporation, etc.). Most states require you to at least register as a DBA if you are conducting business under any name other than your given legal name.
Your business name will be the cornerstone of your marketing efforts. By protecting it from the beginning, you ensure it will stand strong against any branding or legal challenges along the way.
For any e-commerce retailers, shipping is one of the biggest and most pressing business concerns. Modern consumers are accustomed to instant gratification when they shop on their computer or mobile device, and they expect the companies they patronize to send out their orders just as quickly. This puts a lot of pressure on companies to streamline their order fulfillment and delivery processes — while still keeping costs low for customers.
“When it comes to customer loyalty, shipping speeds and costs are more important than ever,” said Tom Caporaso, CEO of Clarus Commerce, a provider of e-commerce and subscription commerce solutions. “Most shoppers still choose ‘free’ over ‘fast,’ but with a growing number of retail outlets — Amazon, eBay, and others — now combining those options, retailers of all sizes have to find ways to cater to every customer’s interests.”
Whether you’re just starting your business and don’t know where to begin with shipping, or you just want to make your shipping operations more efficient, here are the most important things retail businesses need to know about the process.
Factors that affect shipping
There’s a lot that happens between the time an item leaves your warehouse and the time it reaches the consumer. Getting a package from point A to point B requires numerous vendors, service providers and technologies, whether you’re directly involved with them or not.
“With shipping rates about to rise, small businesses in particular need to be sure they’re up-to-date on the most efficient, effective delivery processes,” Caporaso told Business News Daily. “Researching and implementing the best techniques can take time, but the savings — and loyalty — they can gain in the long run is worth it.”
Caporaso outlined a few of the major factors that can affect your shipping process:
- Sales volume: What is the approximate number of daily, weekly, seasonal and annual sales you make?
- Handling costs: What materials do you need to package your products — boxes, packing materials, labels, tape, etc. — and how much do they cost you?
- Drop-off/pickup times and rates: How long does it take you to prepare orders for shipping? Can you save money if you pack orders at night and drop them off the next morning?
- Distance from each vendor: How much will you save if you have to drive across town during rush hour to drop off shipments?
- Shipping speeds: How many orders are time-sensitive? Can you save money and satisfy customers by choosing the slowest delivery times?
- Range and average weight of shipments: How much will customer order weights vary, and how much might that affect your costs?
- Tracking ability: Can you (and your customers) monitor the progress of your shipments?
Once you’ve determined the answers to these questions, you’re ready to find vendors that suit your business’s shipping needs and budget.
Choosing your vendors
When you first start your business, you may have a small enough sales volume that you can just rely on FedEx or UPS to handle all your shipping needs. As you grow, however, you’ll likely want to look into multistep and vendor shipping options to get your deliveries out faster.
“Small businesses should take the time to identify the right shipping mix for their business needs,” added Amine Khechfe, co-founder of shipping solutions company Endicia. “FedEx and UPS are only a part of the shipping mix. While using just one carrier may seem like a simple solution, it may not be the most cost-effective one.”
Khechfe recommended that e-commerce businesses consider the U.S. Postal Service (USPS) as an alternative to private carriers, especially if they regularly ship bulky products. Business owners should take surcharges into account for services like weekend or rural delivery, and use this information to determine the most economical options for meeting customer delivery expectations, he said.
Drop shippers and other third-party logistics (3PL) providers can also reduce shipping costs for small e-commerce businesses. Drop shipping — in which a retailer sends customer orders to a manufacturer or wholesaler that then ships the product out from its warehouse — is a particularly attractive option for businesses that want to boost their shipping volume without increasing the space needed to store their inventory. Similarly, 3PLs can leverage the combined inventory volume of a group of smaller merchants to offer better shipping alternatives, said Jose Li, CEO of shipping insights and analytics firm 71lbs.
Smaller online retailers won’t have the resources to build warehouses or contract drop shippers all across the country, but building smart, strategic relationships and using technology can help these businesses find the right balance of price and convenience.
“The little guys have to act like the big guys,” said Frank Poore, founder and CEO of online merchandising and fulfillment platform CommerceHub. “They have to do things systematically to minimize costs and transit times.”
For instance, Poore said, depending on the package weight, your fastest, least-expensive delivery method might be to have a private carrier take it part of the way, and have USPS make the final delivery. He also suggested looking for suppliers and drop shippers in areas that are closest to your customer base, to minimize the distance between the origin and the destination.
Shipping technologies and analytics
Shipping has come a long way in recent years. Thanks to technology, businesses can now carefully monitor every step of the delivery process, and update their customers on a shipment at any given time. This not only benefits the customer, but ensures that you’re not held liable for any errors that occur after your product leaves your business.
“One of the biggest challenges is knowledge of what has been happening all along the supply chain and being able to confirm it,” said Hedgie Bartol, retail business development manager of networked surveillance solutions companyAxis Communications.
Traditionally, if a customer reported an incorrect or damaged product showing up, you really could only take their word for it. Now, Bartol said, businesses can use video surveillance, real-time scanning/tracking and other analytics tools across their entire supply chain, and can even add some intelligence behind the system that can offer object recognition, bar code readers and other tools. You can use this information to optimize your system and reduce discrepancies and inefficiencies that slow you down.
Providing tracking details for customers is crucial, as they want to know exactly where their purchases are, said Jarrett Streebin, CEO of shipping solutions provider EasyPost. He advised focusing on getting your orders packed and shipped within 24 hours whenever possible, and sending out tracking numbers immediately.
Caporaso said retailers should evaluate their shipping strategy every six months to ensure that it’s operating at peak efficiency and delivering the best possible value to customers at the lowest possible cost to the business. An ongoing program of data collection and analysis is an invaluable part of that effort, he said.
Other shipping considerations
Packaging. In 2014, FedEx and UPS switched to a dimensional pricing model, meaning that shipping costs are determined by both the package weight and its size for ground shipments. Kevin Lathrop, CEO and president of shipping company Unishippers Global Logistics, said that many businesses made a lot of adaptations to optimize their packaging for this reason, and if your business has not done so, now is the time to start thinking about it.
“You want to use the minimum amount of space you can,” Lathrop said. “Package for safety and density, and put [your items] in an appropriate box for the load.”
Lathrop also said that if you’re shipping multiple items on a shrink-wrapped pallet, it’s important to label each individual box in case the load is broken up before it reaches its final destination.
Return policies. Because they’re unable to test or try on items they purchase on your site, Caporaso noted that e-commerce customers are more prone to returning their purchases than in-store shoppers are. Creating a customer-friendly return policy that includes free return shipping may cost more up front but could go a long way in creating customer loyalty.
“You don’t want to absorb more costs, much less encourage ‘frivolous’ returns, but offering free return shipping, especially to your best customers, will give them greater confidence, knowing that you stand behind your products,” Caporaso said.
Customer expectations. Your customers’ expectations should be at the core of every shipping decision and deal you make, Caporaso said. A carrier that saves you money in the short term but provides poor service will cost you customers, and therefore money, in the long term.
“Online shoppers practically demand free shipping these days, and if they can’t get that, they expect — at the very least — that their orders will show up on time and in excellent condition,” Caporaso said.
Regardless of whether you offer free shipping, you need to set and manage your customers’ expectations. Your shipping policy should be easy to understand, and easy to access on your website. Caporaso also cautioned businesses not to promise more than they can deliver, especially during peak times like the holiday season.
“Establish firm, achievable shipping deadlines, and stick to them,” he said.
According to the Small Business Administration, half of businesses fail in the first five years, while more than 20 percent fail in the first year. Those are some pretty startling statistics, but they don’t have to be discouraging. While there’s plenty of room for failure, there’s even more for success.
In order to succeed, however, your startup needs a strong foundation on which to build. Below are five of the most important components a new business needs, and how to gain each one.
1. A strong peer-support network
For new entrepreneurs, a network of peers and mentors is of greater importance than product and finances.
“If I had to name the single characteristic shared by all the truly successful people I’ve met over a lifetime, I’d say it is the ability to create and nurture a network of contacts,” wrote Harvey Mackay in “Dig Your Well Before You’re Thirsty” (Currency Doubleday, 1997).
Will Foussier, CEO and founder of Ace-up, said a strong network is key because it connects you with a talent pool, potential talent, industry experts and people who can provide legal advice.
“My advice for new entrepreneurs would be to think about the environments that are going to help you build momentum, get visibility, develop connections and have access to resources,” he said.
How to build a support network
- Find a business innovation lab. Foussier highly recommends business labs as a way to connect not only with young entrepreneurs at the startup stage, but also with successful businesspeople and serial entrepreneurs who are interested in mentoring the next generation. Check with local colleges or look for online groups like WeWork.
- Join a professional organization for your industry.
- Join the Chamber of Commerce or other local business organization. “It can enable you to get quality feedback on what you’re doing and see if there’s a real demand for the type of products you’re building,” Foussier said.
2. A product people want
This may seem obvious, but one downfall of a new business is developing a product that, although a great idea, does not answer a compelling need or inspire enough people to spend enough money to make it profitable.
“Be mindful of the problem you’re solving for your users. When aware of the problems of your specific customers, you can have a better idea of your market set,” said Brad Matthiesen, founder and CEO of ClassForward, an education tech company based in the Harvard Innovation Lab.
How to build the right product
- Conduct market research. Foussier recommends spending half your time in product development and half your time in finding and engaging your target market. Talk to your target consumers. Run ideas past them. Learn their pain points and how you can help them. Not only do you increase your chances of building a product in line with their needs, you also build a pipeline of interested consumers.
- See it through the eyes of your consumers. “Your consumer sets the rules – it is a startup’s responsibility to fully understand what they want – not how they see your product,” said business coach Graham Gilley.
- Test before you invest. This is more than testing to make sure the product works. It means testing the product with your ideal users to make sure it does what they want. Doing this early in the process can help you find your direction.
“If [your product] fails in a testing process, then it’s [easier] to correct it than if you spend two years building up a product to have it fail,” said Jodi Goldstein, a serial entrepreneur and managing director of the Harvard Innovation Labs.
3. The right location
Real estate is not cheap. In addition to buying or renting your work area, you have to consider utilities, upkeep and insurance. According to an article in AZ Central, 1.2 to 8.9 percent of a small business’ sales go to pay the rent. If you pay more than that, you should reconsider your space.
Online “locations,” as defined by domain name, are cheaper, but still require consideration. For example, you’ll want a website name that describes your product or purpose well enough to show up in a search. That way, you’ll find new customers searching for a solution who don’t know you. (You can also purchase more than one domain name and have them point to the same website.)
How to make the best use of your space
- Research before you rent. “Your physical location can still be an important factor in the success of your business,” business consultant Larry Alton said inSmallBusinessComputing.com’s blog. Your locations, both physical and online (as defined by your website and social media), need to be convenient for your target audience and those businesses or people you need to network with. Price is a factor, but must be weighed against customer convenience.
- Go virtual. While it’s exciting to have a storefront or office for your team, a virtual space might suit you better. “Opt out of renting an office. Until you’re established, you can run your startup from your apartment and coffee shops. Or you can have a virtual office, which is cost-effective and great for startups with team members all over the world,” according to the Young Entrepreneur Council in Forbes. Cloud-based programs like project management software andvideo conferencing tools can enable everyone to share information and communicate with ease.
By the same token, a virtual store can help you build a customer base without having to spend a small fortune on non-inventory essentials, like displays and shelving, cashiers and other service personnel.
4. A plan for profit
Every business is interested in profit – but what exactly does that entail? Are you profitable if you can pay your business bills and have some left over for yourself, or when you’ve paid off your business loans? Or is it when you start making as much as the salary of the job you left to go on your own? Having the goal firmly in mind can help you determine if or when to declare defeat.
Whatever your definition of profit, no startup makes it without funding, and, in fact, Gilley recommends that you have a fully capitalized business plan before getting started.
How to get funding
These days, there are plenty of ways to get funded. Here are a few of the most popular.
- Small business loans are simply loans for businesses. There are commercial and government-sponsored loans, so be sure to check all angles when applying.
- Crowdfunding sites, such as Kickstarter or Indiegogo, let you ask for donations in return for prizes, which can be everything from shout-outs to promotional gear to pre-orders. If your product is unique or quirky and you have a good social media presence, this can be a good way for startup funds.
- Angel investors. These are usually millionaires who are looking to invest in the Next Big Thing or to promote an industry they have an affinity for. “Angel investors used to be a difficult group to find ― not so any longer,” according to Entrepreneur Magazine. There are investment events, online networks and groups of investors you can contact. You can also check with your local network.
For more financing methods, check out this Business News Daily guide.
5. A brand presence – online and off
Even before you have a product to sell, you need to start making yourself known. This helps you find potential customers, beta testers, even people who may work with you in the development of the product.
How to get publicity on a budget
- Maximize your online potential. With a proper use of keywords that identify your company or service, you can target your ideal customer base. In addition, social media – including blogs, social media sites and directories like Yelp – provide a free or cheap source of publicity.
- Hang out where your customers are. Find blogs, Facebook groups, forums or other places where people with the interests your company shares, and join in the conversation. Don’t jump in with promotions, but rather develop relationships. Kevan Lee, director of marketing at Buffer, wrote about six popular ratios for social media content on the Bufferapp blog. All of them lean heavily toward sharing content with others and retweeting as opposed to posting self-promoting content. However, he also said, “Self-promotion can work when you add value and engage.”
Attend industry conventions your customers go to. Foussier said these are good places to talk with potential talent for your team, in addition to meeting with investors and customers. Even if you don’t set up a booth, bring cards and brochures to share.
- Become a known expert in your field. Becoming a trustworthy source gets you followers, increases your network and makes people more likely to purchase from you rather than an unknown. Chris Myers, CEO of BodeTree, suggests writing articles for magazines and developing relationships with reporters who write about your industry. Guest blogs and guest lecturing accomplish this, too. Finally, you can “borrow” expertise by sharing applicable articles, infographics and memes that pertain, even peripherally, to your product or service.
Starting a new business is risky, but if you begin with the essentials in place, you stand a better chance of success. Those essentials include more than a good idea and enthusiasm. With a strong network, publicity, funding, a way to reach your audience and, of course, the right product, you can set up the foundations for a successful venture.
The United States government spends over $4 trillion per year with large and small businesses. While the government places extra emphasis on awarding its contracts to small businesses in general (about a quarter of all contracts), there are also set-aside contracts for small businesses owned by women, minorities and veterans, including military personnel with disabilities.
Paul Karch, president of SelltoGovernment.com, which helps small businesses earn government contracts, said that the application process is a lengthy one, so now is the time for small businesses to start laying a foundation. If you’re launching a small business or want to start landing government contracts as an existing small business owner, read on to learn how you can take advantage of these special opportunities.
How to begin getting government contracts
There are several steps that small businesses should take in order to land a government contract.
The first step is to identify what you want to sell, using the codes of the North American Industry Classification System (NAICS). Those codes are listed on the North American Industry Classification Systems Association’s website. The codes classify the economic sector, industry and country of a business. Be aware that you may need to have several NAICS codes, depending on your product offering or service capabilities, so look carefully. Make sure that your business has that NAICS code, because it’s one of the first things that the government will look at to determine your eligibility as a government contractor; contracts aren’t awarded without one.
The Small Business Administration also recommends that businesses interested in securing a federal contract obtain a free Dun & Bradstreet D-U-N-S Number — which is a unique, nine-digit identification number for each physical location of a business — as well as an Open Ratings Past Performance Evaluation. These evaluations are an independent audit of customer references and calculate a rating based upon a statistical analysis of performance data and survey responses.
In addition to a NAICS code and D-U-N-S Number, small businesses applying for a government contract will need to obtain the following to help identify their business, industry and product categories: a Federal Employer Identification Number (FEIN) for filing taxes; Standard Industrial Classification(SIC) code; Product and Service Codes (PSC); and Federal Supply Class Codes(FSC).
Once you know your NAICS codes and D-U-N-S Number, register with theSystem for Award Management (SAM) website, which is the federal government’s primary database of vendors that are doing business with it. According to the Small Business Administration, the Federal Acquisitions Regulation (FAR) system requires that all prospective vendors be registered in SAM before the contract is awarded or a purchase agreement is made.
Finding contract opportunities
Once you have all of your codes, you can start looking for contracting opportunities on the government’s site, Federal Biz Opps. Registration is free, and you can sign up for notifications as well. Using the site’s search function, enter your NAICS code to find solicitations for contracts for which your business may qualify and that you would be interested in pursuing.
Take a close look at each solicitation. While relevant-seeming ones may display one or all of your NAICS codes, there may be other restrictions. For instance, that solicitation may be set aside for an 8(a) contractor — a special certification that must be applied for and awarded. If you are not an 8(a) contractor, your bid will not be considered, even if you can offer the lowest price or the best value.
When you identify an opportunity you want, prepare and submit your bid or proposal. Each solicitation will have detailed information about what should be in the proposal, how to assemble it and the method of submission (electronic or hard copy by mail). Be careful to follow the instructions exactly. Government processors will disqualify noncompliant proposals at the beginning of the evaluation process.
Finally, get your infrastructure in place, so that you will be able to fulfill your contract when you receive the award. Small businesses that overpromise and then underdeliver may suffer serious consequences when they’re pursuing future government work.
Knowing that the government does not move at a breakneck speed, Karch advises small business owners to be prepared for an extensive process and not expect immediate results.
“You have to be in it for the long haul,” Karch said. “If you’re not, don’t do it.”