Business Lessons of the Fair

Well, I survived the Oregon Small Business Fair and now it’s time to share what I learned with you good people. First of all, if you have one of these in your area I would highly recommend going. Surprisingly, I learned quite a bit. As I’ve mentioned, the main reason I attended was to network and promote, the learning was secondary. It turned out to be just the reverse though, as I only handed out maybe five business cards. After the first workshop, I realized that these were much more than consultants trying to get clients, they were loaded with valuable information. So I attended as many of them as humanly possible, leaving little time for networking in between. It was my intention to make up for that at the end, but unfortunately, everyone scattered after the last workshop. A mad rush to the parking garage ensued and escaping was nothing short of pure, grade-A, insanity!

It was definitely an action-packed day. I overslept so had to rush to get there and find a parking spot. Then rushed to get checked in and get to the first workshop. Then rushed around as many booths as I could in between workshops. Then rushed out to my car for a breakfast bar for lunch (which is all I had to eat for the day) and hustled back for the lunch-time workshop. There was alot of really good workshops going on at the same time, so I would sit in one long enough to get the hand out and then rush over to a different one to get their info. Then, as I mentioned, at the end of the day I saw everyone scrambling for the door so I desperately rushed to beat the herd…which did NOT happen. I almost had to throw down with an old lady, but that’s another story.

Alright, I guess that’s enough of an intro, lets dive into what I learned yesterday. I’ll talk about the most important business lessons (in my opinion) from each workshop.

Workshop 1: Home Business … Home Office … Tax Issues

She started off by recommending that you don’t have an office in your home. It can really complicate matters and it’s difficult to keep the two separate. She then proceeded with some good tips if we decide otherwise.

  1. If you want to claim an in home deduction on your taxes, make sure that your home office is used exclusively for business purposes. So, for example, if you have a closet full of clothes and you have to step through your office to get to them (i.e. no other way), then you’ve broken the exclusive rule and you can’t legally claim. You don’t necessarily need walls to determine your office boundaries. There are other barriers you can try (e.g. shelfing, book cases, etc.).
  2. Measure your entire house and then measure your office and determine what percentage of your house your office represents. You then use that percentage for all indirect expenses (utility/garbage bills, general repair/maintenance, etc.). Anything you do directly to your office, however, represents a direct 100 percent expense.
  3. A nice benefit to a home office is claiming mileage on your car. If you don’t work out of the home, you can only claim 35 business trips/year if leaving directly from home. If you do work at home, it’s unlimited. Here’s the kicker: you just have to make sure that you step into your home office before heading out to your car. So don’t go directly from kitchen to car, step into office first (class giggles). You also have to be sure that the first place you stop is a business related stop. From there on out you can claim every other stop on your route, business or not. She pointed out that she has a friend that always make it a point to have a business purpose before leaving her house (class giggles again).

Workshop 2: Be Found – Getting Your Web Site To Your Customers

Most of this I was already aware of because I’ve studied search engine optimization tactics, but maybe you haven’t, so here goes. These are techniques to help your site receive visits from people that are visititing indirectly (i.e. you didn’t send them there, they searched on Google).

  1. Figure out what you want your keyword combinations to be. What words will your potential customers search with to find you? You can find out how popular a keyword combination is by using this tool.
  2. Next you need to make sure that these keyword combinations appear at least twice in the readable text on your page. Be sure you don’t use more than four combinations per page. You also want your keywords to show up in the page title and in your meta tags.
  3. You can build pages aimed exclusively at the search engine robots (i.e. not made for human consumption). This is useful if you have a ton of keyword combinations and, for obvious reasons, don’t want them all appearing in your main content. Once you build these pages, link to them with a sitemap, and link to that from your homepage (in small text at bottom somewhere).
  4. Get people to link to you! This increases your ranking on Google, especially if the other sites are relevant to yours in some way. So it would be effective for me to get other “Portland” or “Entrepreneur” or “Web App” sites to link to me rather than irrelevant sites. There are also tons of free directories out there, so Google “Free Directories” and start getting yourself linked up.
  5. Zack side note: Remember though, quality is more important than quantity. One link from a popular site is worth much more than many links from random, non-popular sites. So you should focus your efforts on obtaining quality links to your site.

Workshop 3: Marketing Your Small Business

This guy was pretty funny. In fact when he got up to the podium, the microphone fell over and made a loud thud. He reacted with a “JESUS!”, then realized he said it right into the microphone and responded with a “how’s that for an intro”. His material was a bit scattered though, so it was hard to take notes, but here’s some key points:

  1. It’s not about what you sell. It’s about the experience!
  2. There are too many products and not enough customers. Therefore, you really have to work hard these days to obtain them. Mass marketing is out; consumers want their buying experience to be personalized and they want to feel important. They are more demanding, better informed, and much more value conscious.
  3. Marketing is the art and science of finding customers, then satisfying them, then growing them, then keeping them. And all at a profit.
  4. Give it to them right, fast, easy, cheap, and personalized! Satisfied customers are vulnerable, you have to consistently exceed expectations.

Workshop 4: How To Advertise Your Business

This guy was hilarious as well. He was super old school and you could tell he’s been in the ad business for a long time. He kept going off on tangents about what’s wrong with the world today and how we are entirely too brand conscious. Probably the funniest moment was when he was handing out examples of good advertising from magazines and he came to one that displayed a woman’s torso and legs. At which point he commented “look at this, this is a great ad … I mean graphically IT’S TERRIFIC”. Then he said “well, that’s it, they’re never going to ask me back again”. Good stuff!

Other than that, I didn’t get much out of this one because he passed around these ad-boards, and people kept getting confused as to which direction to pass. Simply put, it was complete chaos! Here’s an excerpt: “did you already see this one guys…how about his one…which direction is this one going…here you take this and I’ll…no wait…I don’t think I’ve seen that one yet…here, maybe if we keep passing them in front of Zack his head will explode.” Here are a couple things I took away from it however…

  1. It’s much harder these days to get a consumers attention. It used to be a one-to-many platform (i.e. television commercial) and now it’s a many-to-one platform. And in this “MTV world” (this guy was great) people want it extremely fast. Take a look at the difference in movies nowadays, each scene is three seconds. Old movies had much longer scenes and consumers had longer attention spans.
  2. All goods and services in a given industry are parity items (pretty much the same), the difference is how they are perceived. That’s where good marketing comes in.

He closed with a quote by Leo Burnett: “The secret of all effective originality in advertising is not the creation of tricky words and pictures, but one of putting familiar words and pictures into new relationships”.

Workshop 5: Controlling Your Advisers

This guy used to be an accountant and is now a lawyer, so he had lots of good information. He mentioned that advisers grade their clients from A to C. You want to be an A client, so don’t be too difficult by yelling, asking for things to be free, etc.

  1. The primary differences between other advisors and Lawyers: Lawyers are the only people that are authorized to draft up legal business documents and they have access to the legal system. Sure you can have others draft up business documents, but they aren’t supposed to.
  2. The first thing you should do is find a good accountant! You will need them throughout your daily business activities. Then go find a good lawyer. You will need them when your are forming your business and when you are in trouble.
  3. Know what you will need from your advisor before you see them (lawyers charge around $275/hour) and make sure you get a written engagement letter spelling out the exact agreement. Don’t just waltz in and say “I’m buying a business” and expect the lawyer to know what to do at that point, because there are several things they could do. So have a plan of action.

Workshop 6: Cash Flow or No?

This was another great workshop and I actually got a cramp in my hand from writing so fast. It was a nice refresher course from my accounting courses in college. She started out very simply with two statements: “Stuff Has Value” and “I made more than I spent”. These statements represent your balance sheet and income statement respectively. So now I’m thinking, ah this is a refreshing change of pace. Before I even finished that thought, she dived in and started talking extremely fast. I think I actually heard my hand start to cry. Let me try to pull out the key points for you.

  1. The balance sheet shows where you are in terms of worth, the income statement shows where you are in terms of profitability, and the cash flow shows where you are in terms of usability.
  2. There are many very talented people that have no business being in business. Before you start a business you should find out if you have deep enough pockets. Ask yourself: If I don’t make money for one year, what will I live on? If you can’t figure that out, don’t start a business! Because you shouldn’t live off the business you are trying to build.
  3. If you plan to hire an employee and you can’t afford 1.5 times the rate you’ll be paying them, then you can’t afford them. This is her rough estimate that she uses to account for taxes, social security, etc.
  4. You should hire a professional accountant when you first setup the books, a few months after to make adjustments, and before you show your financial statements for the first time.
  5. Do not use Quicken for your business. This is a good program for personal checks and income statement type transactions, but is useless for the balance sheet. She recommends QuickBooks.
  6. You’ll probably have a loss the first year, and this shouldn’t be because of cash flow but because of non-depreciation. The IRS wants you to have a profit within the first 5 years though. They won’t punish you for not having one, but the point is why are you in business if you are still losing money?
  7. A cash flow analysis will help you figure out what you’ll need to charge for your goods/services. You should do this before you go into business to ensure you can afford it. Hint: Double your rates! “You’ll lose clients, you’ll sleep more, and you’ll make just as much”.

I’ll close the same way she did: If you analyze your progress, find problems, and don’t make modifications to fix them, you are insane! “The definition of insanity is doing the same thing over again and expecting the same result”.

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