Small Business Trends

Every year Edelman releases its Trust Barometer report (Executive Summary) to measure consumer confidence in business and, if we’re taking a cue from Chris Brogan and Julien Smith, identify the biggest ‘trust agents’ helping them to make their decisions. This year the findings are getting some people wondering about the overall impact on social media.

Social media has always “worked” because people trusted the advice and recommendations of people ‘like them’ over the cold marketing they were accustomed to. They trusted that their friends and people who valued the same things were better able to help them make decisions than the absent CEO or marketing department of a company. However, thanks to the flood of noise and the emergence of large, impersonal social networks, people are losing trust in social connections and those ‘like them’. Instead, they’re leaning more towards experts, with a strong rise in the transparent CEO.

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What these findings tell me is that the huge growth in social networks and “fake friending” have caused consumers to trust these circles less. Trusting your Facebook friends was a lot more certain when your network was made up of everyone you went to high school with. Now, we friend brands and people we just barely know in order to not appear “rude” and grow inflated friend networks. Naturally that’s going to corrupt the circle.

As a result, we’re looking more toward ‘experts’ to help us make decisions and, increasingly, toward the new CEO who has likely embraced the Social Web and become more open.

How do you take advantage of both of these?

You start blogging.

Blogging as a small business owner allows you to make yourself an expert in your field and also allows you to take advantage of the perks of being a transparent CEO. By allowing your customers to see inside your organization and what you’re about, you allow them to trust what you’re doing and become better acquainted with your brand. You bring them into your story and your every day. And that’s what customers are looking for. In the Executive Summary for the report, it’s noted that this year’s finding proved that trust and transparency are MORE important to corporate reputation than the quality of products and services. Yes. It is more important that you are open with customers than how well the product actually performs. Chew on that for a moment, will you?

If consumers are looking less at one another in order to build that trust…then it’s up to you as the small business owner to build it yourself by establishing yourself as an expert and letting people inside your organization. What better way to do that than with a blog?   If you need some blogging ideas, we can help you with that, too.

The survey does cast an interesting picture on social media, in general. If more and more users are becoming distrustful of the medium then it’s going to be interesting to see how this will affect the medium as a whole. Will review sites start to fall out of favor and become more suspect? Will people be less accepting of marketers in social media? Interesting implications all around.

Everyone loves getting something for free, right?  Of course you do.

So we’ve decided to implement a new feature here at Small Business Trends.  Each month we plan to hold a drawing and give away stuff to you.

There will be something different every month.  Whatever it is, it will be something of interest to entrepreneurs and small business leaders.

This month, we have 8 copies of the book, “Build a Green Small Business: Profitable Ways to Become an Ecopreneur” by Scott Cooney.  We’ll hold a random drawing and choose 8 people.  Each will receive a book.  This particular drawing is open to anyone anywhere in the world.  The deadline to enter is February 24, 2010.

To learn more: Visit the Small Business Trends giveaways page.

Bookmark the  giveaways page, where we list each month’s contest or drawing.  We’ll also include discounts and special offers.  Check back often to see what’s new.

Many small businesses continue to experience cash flow problems – the majority, in fact, according to a survey by the Discover Small Business Watch.

That cash flow is an issue right now for small businesses might sound obvious to most of you that run your own businesses, but a worsening trend might not be. So here’s a chart that shows what has been going on with small business cash flow over the past three years.

The figure plots the percentage of respondents to the Discover Small Business Watch monthly survey of a random sample of 750 small business owners who answered “yes,” they are experiencing temporary cash flow issues. Although there has been a slight down tick over the past two months, the chart shows a (noisy) trend towards an increasing share of small business owners experiencing these problems. (The thick blue line is the actual data; the thin black line is the linear trend plotted from it.)

I tried to see whether other patterns fit the data better than the upward linear trend. Unfortunately, they don’t. An increasing share of businesses experiencing temporary cash flow problems is closest to what has actually happened over the past three years.

Many economists believe that the Great Recession has ended and the economy is now growing again. While that might be true, it doesn’t appear that the recovery is strong enough or broad enough to have fixed the cash flow problems in the small business sector, at least not yet.

I’ve always loved jingles. I’ve always wanted one for my web site. I found one that I thought was perfect for Ancestry.com once. I sung it to myself every time I heard their name.

So I was inspired by a small business that started over the holidays. People like case studies about how small businesses succeed with social media. Here is an example of a business that was started with social media. It was started, get this: over this Christmas and New Year’s, by a musician in Sweden who has never had a business online.

His name is Love Harnell and he’s a musician

I found out about Love Jingles through an email (great blogger PR) and then I called and got an interview with Love Harnell. I’m not used to calling men other than my husband Love but he let me know the Swedish pronunciation which is more like Louve (as in the Paris art museum).

He writes and performs jingles for brands. He makes a video of his performance and then promotes it. His story has been on Mashable and Adrants. Yahoo! has signed up to celebrate their 15 year anniversary with a jingle. So has a 12-step program (it booked 14 days to tell their story in song).

The idea is decent but it’s the way he markets it that people talk about

If you’ve heard of the Million Dollar Homepage or IWearYourShirt.com, this is in the same style. Here’s how it works – each day of the year you sign up to have a custom-made jingle and every day the price goes up. So on January 1, 2010 it cost $1 and then on January 2 it is $2. I got in for $85. You can upgrade to have your logo added on the video and on the blog post.

Time to Market and Costs

Time to market: a few weeks.

Cost to start: good luck, connections and talent.

Advertising: his friend Nils at Pronto Communication emailed 10 bloggers (which is how I found out about it), told his clients and the word started to spread.

Potential revenue if he sells every single day at the minimum price: $67,000.

How LoveJingles Works

Everyone gets a live recording of their jingle on YouTube, and a blog post with their video (in other words, customers help create the content). Then it’s promoted on Facebook, Twitter and Flickr. Even though it’s less than a week old just type Lovejingles.com into Google to see how many references there are to the site already (over 5,000). This is the new advertising.

LoveJingles.com was started in an industry that has been bleeding – music. It’s a perfect example of making something worthy of talking about (all done word of mouth). It has viral built right into it (meaning it markets itself by the great stories from the various people who’ve purchased jingles).

What can your small business do in 2010 to leverage social media and get a lot of buzz? It’s more about your imagination than your budget. Love has definitely Crushed It. Let this case study inspire you to do the same.

It’s great to get recognition for your small business and it’s even better if that recognition comes with great prizes. This list of competitions and awards for small businesses is updated every two weeks and brought to you as a community service by Small Business Trends and Smallbiztechnology.com.

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Mom Invented:  California Product Search
Enter by February 20, 2010

Anna’s Linens, a leading home goods retailer and seller of the entire Mom Invented® family of products, is in search of the next great product — invented by you. We’re looking for you to submit your most creative product ideas for a chance to win $1,000 and see your product sold at Anna’s Linens stores.

There will be three  in-person pitch events at Los Angeles area Anna’s Linens stores where you’ll get to talk about your new product idea face to face. They encourage you to submit your idea online, then bring your emailed submission form and any supporting prototype samples or images to one of the live events. If you can’t make it to one of the in-store events you can submit your product idea online or by mail.

Cisco Heroes of the Human Network Contest
Enter by February 27, 2010

CDW announces the Cisco Heroes of the Human Network Contest, designed to give big recognition to three small businesses across the U.S. The contest will spotlight businesses that have had success streamlining business processes, enhancing the customer experience, and improving employee efficiency – all key ingredients to staying afloat during tough times.

The grand prize winners will be featured in a video case study documenting their experience and will receive a $1,000 CDW gift card to spend on Cisco Small Businesses products, as well as a Flip MinoHD video camera. Judges will select winners based on a 250 word essay describing how a Cisco Small Business Solution and the use of Cisco Small Business technology has helped applicants propel their business.

Small Business Strategy Award at Small Business Summit 2010
Enter by March 1, 2010

Has your business set milestones and thrived in spite of the severe economic downturn? If so, we’d like to hear from you. We’re looking to honor one business with the Small Business Strategy Award 2010 to recognize entrepreneurial strategic excellence that has led to significant increased profits, expanded market and/or improved market position.

Our Award committee will select the three finalists and the winner will be recognized and receive the award at the Small Business Summit in New York City on March 16th.

Intuit’s Love a Local Business Contest
Enter by March 3, 2010

In a nationwide effort to help support the growth of small businesses, Intuit is hosting the “Love a Local Business” sweepstakes. Fans of local small businesses can nominate their favorite hometown haunt, which will make them eligible for a drawing to win a $1,000 Intuit Growth Grant, which includes a $500 Visa gift card and $500 in Intuit business services, such as Intuit Websites and Web Listings. One of those five winning local businesses will receive a grand prize of $5,000!

In addition, each business that is nominated will appear on a custom Google Map displaying favorite businesses from across the country. The more nominations a business has, the more chances they have to win a grant. Intuit has already awarded $55,000 in small business grants. Now it’s time to show support for your favorite neighborhood shop! Go to Love a Local Business for more information.

B2B Social Media Integration Case Study Challenge
Enter by March 12, 2010

This is your chance to join an expert panel at the B2B Forum session. How did your company boost ROI by integrating social media into your marketing strategy? Tell us your success story, and you could be telling it to the B2B marketing world in May. Complete this form and tell us your story!

The winner will become a panelist in the “Case Study Swap Meet! Proven Success Stories Integrating Social Media into Overall Strategy” session at the B2B Forum taking place on May 4-5 at the Seaport World Trade Center in Boston, MA.

The Rhode Island Business Plan Competition
Enter by April 5, 2010

The Rhode Island Business Plan Competition, open to everyone, seeks to promote entrepreneurship and development of start-up and early stage companies. Winners and finalists in the 2010 Competition are expected to receive more than $130,000 in prizes.

The Better Way Challenge from Verizon
Enter by May 31, 2010

Sign up for a free 30-Day Trial of the Verizon Collaboration Center and be automatically entered to win a Flip MinoHD video camera; 15 per month will be given away randomly to those who sign up for the trial.

There is also a separate video contest: submit a video describing the challenges you face as a small business getting your whole team on the same page and you’ll receive an additional six months of the Verizon Collaboration Center for free.

If Verizon and Cisco select your video, you could be entered to win an exclusive business consultation to help you take your business to the next level in one of these two prize levels:

Grand Prize: An exclusive two-hour business consultation with entrepreneur Guy Kawasaki plus a $2,000 reward card.

2nd and 3rd Place Prizes: An exclusive one-hour business consultation with the Cisco Internet Business Solutions Group – an organization that provides customers with innovative approaches to complex business opportunities – and a $1000 reward card.

Click here for official rules and to enter.

The Shopify Build a Business Contest
Runs January 1 – June 30, 2010

This contest is open to legal residents of the United States who are at least 18 years of age and starting a new business. To enter you must open a new store on Shopify.com. The winner will be selected based on their two best selling months between January 1st, 2010 and June 30th, 2010. The store with the two best selling months will win $100,000. Achieve the same for your store category and win $5,000 as a runner up prize.

The Cleantech Open Ideas Competition
Opens for Entries July 2010

The Cleantech Open runs the world’s largest clean technology business competition and is looking for the best clean technology ideas from around the world. Just for telling your idea, you could win a prize package of services worth $100,000 to help you start a business to grow your idea! Winners of each individual National Competition, get to represent your country as a Global IDEAS finalist at the annual Cleantech Open Awards Gala on November 16, 2010 in San Francisco.

There, your idea will be presented in a five-minute pitch in front of a crowd of 3,000 investors, entrepreneurs, sponsoring companies, corporations, members of academia, press, and others interested in hearing your ideas and getting involved.

The crowd will vote via text message for the “People’s Choice” and you could win $100,000 in marketing support, legal advising, conferencing services and more to help launch your business!

The competition will open in July 2010. Sign up to receive the newsletter to get updates.

iNGie Award from Cabinet NG
Enter by August 15, 2010

Cabinet NG will recognize our customers who have best used CNG-SAFE software products to improve their bottom line and at the same time operate their businesses in a more environmentally friendly manner. “iNGie” awards will be presented at the 2010 Collaborate Conference in Huntsville (dates and location to be announced soon).

Awards:

* The first 20 companies to apply receive 2 free passes to 2010 Conference in Huntsville (approximately $500 value).
* Winners get a $1,000 credit which can be applied toward annual maintenance or CNG products.
* Winners will also receive an Amazon Kindle™.
* Recognition at the 2010 Conference dinner.

Award categories and online applications can be found here.

To find more small business events, contests and awards, visit our Small Business Events Calendar.

If you are putting on a small business contest, award or competition, and want to get the word out to the community, please submit it through our Small Business Event Form (We do not charge a fee to be included in this listing — it is completely free to list your award or contest.)

Please note: The descriptions provided here are for convenience only and are NOT the official rules. ALWAYS read official rules carefully at the site holding the competition, contest or award.

Whoever thought that economics could be fun?  Well, it IS fun when Stephen Dubner and Steven Levitt put their “freaky” spin on the myriad decisions and assumptions that we make.   I read the original “Freakonomics” and enjoyed it so much that I purchased “SuperFreakonomics” as soon as I saw it.

The reviews are mixed on “SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance”. There are people who have read “Freakonomics” and were disappointed because “SuperFreakonomics” is more of the same.  And then there are those who loved it because it was more of the same.

Personally, I enjoy Dubner and Levitt’s writing style and storytelling.  Reading “SuperFreakonomics” to me was like eating lobster.  I loved it the first time.  I’ll certainly have it again.  But I don’t think I’d want to eat it every day.

Like its predecessor, “SuperFreakonomics” is filled with timely and unusual questions like:

• How is a street prostitute like a department-store Santa?
• Why are doctors so bad at washing their hands?
• How much good do car seats do?
• What’s the best way to catch a terrorist?
• Did TV cause a rise in crime?
• What do hurricanes, heart attacks, and highway deaths have in common?
• Are people hard-wired for altruism or selfishness?
• Can eating kangaroo save the planet?
• Which adds more value: a pimp or a Realtor?

I mean, how do you even get to asking or wondering about this stuff?  Some of the fun in reading this book came from the interesting cast of characters:  economists, hip and cool “dude-like” scientists and prostitutes.  These folks all had enough curiosity and open-mindedness to put their assumptions and choices to the test.

SuperFreakonomics Makes You Stop and Think

Perhaps the best thing about “SuperFreakonomics” is that it makes you think about how easily we are blinded by our assumptions and what we THINK is true rather than what data really show.

My favorite example of this came in Chapter 4 where they talk about a fatal childbearing condition, puerperal fever.  Doctors had no idea what caused it.  And it took the persistence and curiosity of Ignatz Semmelweis, a young Hungarian-born doctor, to pull together potential causes, collect the data and to discover that by simply washing their hands, doctors could virtually wipe out puerperal fever and deliver more healthy babies.

There are dozens of stories just like this one.  Each story features different intuitive assumptions that we all make and each assumption is proven wrong by simply collecting data and analyzing it.  Over and over, Dubner and Levitt’s stories punch their point home; don’t assume you know what’s happening and why.  Look at your existing data.  Reverse your assumptions. Open yourself up to other answers you may not have considered.

Read SuperFreakonomics For the Fun

At a time when “it’s all about the economy” this was a fun, entertaining and educational read.  While I wouldn’t say that there are explicit action items that you can take away from this book to improve your business, I would say that each story will make you think and wonder about what you see is true (or not true) about your business.

I just had the best cookie!  Yes, you read that right  — I’m writing about cookies.  And no, this is not turning into a recipe blog.

This post has an entrepreneurial connection — bear with me, and I’ll tell you about it.

Today I got a package from FedEx. Turns out it was a box of delectable goodies, from Wow! Cookies! of Shaker Heights, Ohio.  I opened the outer packing box to discover this gift-wrapped box:

It was so beautifully wrapped, I was intrigued.  In fact, I was so intrigued that I hated to tear into the paper.  So I took another photograph instead. (I’m not a very good photographer and rarely take photos, so please excuse the quality of these — they look much better in person.)  

Finally I opened the box.  There I found a gift card (I’ll get to that in a moment) and this luscious sight:

Cookies!  The package with the pink ribbon turned out to be chocolate chip cookies.

I ate one immediately.  Who could resist?  (Certainly not me!)

They are delightful — crispy edges and soft centers, with loads of chocolate chunks.  You can taste the butter and quality ingredients.  They taste homemade — better than homemade, actually.  I don’t think I could bake a cookie that good (and I’m no slouch in the kitchen).

In addition to the cookies, there are 4 brownies.  I haven’t tried one of those yet, but, hey, the night is young….

So, where’s the entrepreneurial connection, you ask?  Well, there are two.

First, inside the box was a card that said “Anita, We LOVED your presentation!”  Just like that — got the inflection right.  It was from the folks at COSE (Council of Smaller Enterprises) and their Social Media Leaps team.  I am on the Board of the tech arm of COSE, and had given a webinar earlier this week about social media, highlighting the Social Media Leaps program.   Social Media Leaps is a website and social media training program that offers tutorials for small business leaders on how to use social media — and I highly recommend it.

But the main entrepreneurial story here is about Wow! Cookies!  Seeing the bakery’s website address on the flyer inside the box, I had to check it out.  The website is simple, yet compelling … compelling because it puts the cookies front and center.

And I realized that the box I received looked exactly like the ones pictured on the website.  So did the cookies — and that’s unusual.  Mail-order baked goods usually look much better on the website. The real life equivalent is too often disappointing.  Not so with Wow! Cookies!

Reading the About Us page was compelling too.  There I learned about Penny Parker, the owner. Here is her “business story”:

Who put the WOW in WOW! Cookies?

In 2004, Penny Parker left her position as the sales and education director of a major Fortune 500 company. Instead of sitting back, she decided that retirement just wasn’t her style. After some soul-searching, she decided to turn her love of cookies into a business.

Penny began by scouring the city’s great bakeries in search of the ultimate cookie. What she found was a dismal array of bland cookies and a vanishing population of bakeries making homemade items. Now, even more determined to provide the Cleveland area with an incredible homemade cookie, Penny founded WOW! Cookies!. Her challenge was to create a unique product that used high-quality ingredients and could be delivered fresh, with a home-baked presentation.

The answer? A line of cookies made with farm-fresh eggs, creamery quality butter and milk products, imported French and Belgian chocolate, naturally dried fruits, perfectly roasted nuts and the highest quality bakery flour and oats. Penny has stated that her, “business is intended to satisfy the cravings of Cleveland’s most discriminating cookie connoisseurs.”

Wow! Cookies!  is a wonderful example of an entrepreneurial venture of the kind I’ve spoken about as a being a good start-up in 2010:  a specialty foods business.

It’s also an example of how small businesses can compete in today’s age.  The basic products — cookies and brownies — are classic.  Nothing unusual about cookies and brownies, right?  What sets this business apart is the quality of the product — it’s definitely high end.  Another differentiator is the creativity of the packaging.

You don’t need to invent some never-before-heard-of new technology.  You don’t need to necessarily even have a big product line.  Just be outstanding at delivering a few things to customers.  Do it so well that you set your product line apart from what’s on the market.  Then you will have a premium product that others (like me) feel compelled to tell people about, and you can charge a premium for your product.

Here’s a cartoon I did a few years ago, and with the launch of the iPad I thought it was a good time to dust it off.

I remember I was getting ready to buy a new computer and I could’t decide between a notebook computer (the word “netbook” hadn’t yet emerged) and a tablet.

So I wrote them down on a piece of paper to make a pros and cons list. Seeing the two words next to each other I thought it was odd that we were relating such high technology to simple paper products, and the above popped into my head.

Your business will need a lot of cash if you’re paying for stuff before you sell it. If you’re growing fast, this negative cash flow cycle can cause a catastrophe. It almost did for technology giant Dell back in the ’90s.

Verne Harnish explained to me how Dell used to inventory parts and pay suppliers for the gear they kept on hand to make computers when customers called. The company ran short of cash and almost choked on its own growth. Galvanized by the near-death experience, Michael Dell himself set out to remake his company’s cash flow by charging customers before buying the bits and bobs needed to build the computers they ordered. By reversing the typical cash cycle, he was able to use his customers’ money to fuel his growth, which meant he required very little external money to grow the business.

Positive cash flow cycle businesses are more fun to run — and their also way more valuable. If you would like to sell your business one day, you’ll get more for it if you have a positive cash flow cycle. Positive cash flow businesses are worth more because:

1.) acquirers do not need to commit their capital to funding their day-to-day operations and;

2.) the bottom line is fatter because positive cash flow businesses do not incur financing expenses and they often have some investment income to juice the revenue line.

Highspot is a small, Toronto-based publishing consulting company that charges upfront for everything it does. Co-founder Ross Slater explains the company’s payment policy:

“In the beginning, the cash flow helped us get started without a lot of financing. Now we see prepayment as a mutual commitment to the success of the relationship we’re creating with our clients. By paying upfront, the client commits to participating in the process, and we commit to providing value and delivering on the trust they have placed in us.”

Wonder how he gets away with it? Slater explains,

“We have a clear, staged process that outlines how we operate and what a client receives. The fees for each stage are right on our website, which filters out the tire-kickers. We invoice immediately, then do what we say we’re going to do. We insist that this is the way we do business. We’ll walk away from a situation where a potential client won’t agree.”

Watch the short video below where I explain the cash flow positive model.  When you charge upfront, your company will be worth more when you go to sell — and more fun to run in the interim.

The acceptance of mobile coupons was included in Paul Rosenfeld’s Five Can’t-Miss-Mobile Marketing Trends for 2010. We saw Google Honeywell survey conducted by Harris Interactive found that while mobile coupons ARE catching on, they’re not doing so at the speed many small business owners may have hoped. In fact, adoption is still pretty slow.

According to the study, customers are still hesitant to take advantage of mobile coupons as we roll out of the recession. The study found that just four percent of users surveyed had redeemed mobile coupons and that only 10 percent of users surveyed said they felt comfortable storing coupons on their mobile phone as opposed to printing them out. Not surprisingly, younger consumers are more likely to use mobile coupons.

And that really seems to be the trend. While most Americans still look to print for savings and find magazines the ‘most helpful’ form of advertising, younger shoppers are headed to their phones.

eMarketer noted:

Adults ages 18 to 44 preferred online ads for bargain hunting by a margin of at least 5 percentage points. The oldest respondents were the most likely to favor print, though they still thought Web ads were better for deal-seeking than direct mail or TV.

While current adoption numbers may be low, the signs for growth are there and offer interested retailers some hope. Sixty-six percent of younger adults said they were at least somewhat likely to try mobile coupons, with 31percent of overall respondents said they’d be willing to give their mobile number to a retailer in order to receive coupons. Not surprisingly, that number grew to one-half when talking to 18- to-34 year olds. And this echoes much of what we’ve seen with social media. Customers are willing to ‘friend’, ‘fan’ and ‘follow’ your brand if you’re willing to offer them discounts for doing so.

Though the numbers look bleak, I think the key takeaway here is that mobile coupons are catching on, especially for businesses targeting a younger demographic. Mobile coupons are still the new kid on the scene, with more companies, restaurants, and grocers starting to launch mobile coupons each month. Exposure is growing and with that comes adoption. As people get more comfortable shopping via their mobile devices and looking up information the go, mobile coupons become a natural extension of that.