Written by Dave Lavinsky on Friday, June 22, 2012
In today's business environment, you absolutely must outsource to stay competitive. No, I'm not talking about outsourcing your core competencies. But I am talking about outsourcing those business functions and activities that someone else can do faster, cheaper and/or more easily than you.
Unfortunately, when they start outsourcing, most entrepreneurs and small business owners make several mistakes. In this essay, I'm going to outline the 10 most common mistakes made when outsourcing work or projects to freelancers or other service providers not on your internal team [note that I use the term "freelancers" below to describe folks to whom you outsource].
Feel free to print this out as a quick checklist to run through when setting up your next outsourcing project. For each of these, think of how you will address or avoid these mistakes in advance to ensure smooth sailing.
Mistake #1: Define the task/project clearly
This is something I would do before even posting the project [i.e., to find the outsourced candidate]. Because you need to really understand the project in order to write an accurate job description. The process of defining the task/project clearly will also help you to estimate the costs, time frame, and skills needed from the person you hire.
One way to do this is to write down a very clear and descriptive explanation of the task. Another way is to record yourself speaking the description. Finally, another great way is to take a screen recording of yourself doing the work you wish to outsource (or taking a video of you doing the work if it's not computer based). Try using a free screen recording program like Jing to make a quick video.
Mistake #2: Not having a well-planned estimate of costs
The more clearly you can define exactly what you need done by breaking it into parts, the better you can estimate how much time it will take - and therefore how much it will cost at the person's typical hourly rate. You don't want to just hand a bunch of work to someone and then get surprised when you get their bill and/or incorrectly assume they took too long to complete a project.
If the project you need completed is something that requires specialized knowledge, describe the project to potential freelancers and get their opinion on what is really involved and how long it should take. If there's no typical hourly rate for the work they're doing, then just get a solid estimate of the total project cost and consider it to see if it makes sense compared to the revenue it should generate (or costs it should save).
Mistake #3: Know your timeframe for starting and finishing the work
If you've ever provided services for a client in a rush, you know how stressful it can be to drop everything at the last minute and make their emergency yours. The people you outsource to are no different, and it will benefit you to plan and begin things in advance and not at the last minute.
So for whatever work it is you want to do, figure out how long it will take and when it absolutely has to be completed. You'll come out with a rough idea of when the work needs to commence. Then, give yourself a week or two before that to post projects, screen candidates, and choose the right person...maybe more.
Mistake #4: Hiring someone without enough experience
Nothing is worse than the blind leading the blind. When I hire someone to do something that I do not know how to do personally, they need to know how to do it - period. They need to educate you on their chosen skill set, not the other way around.
Your role is to describe the end result you want, ask for and listen to their suggestions, and rely on their expertise and talent to achieve it according to your description.
Mistake #5: Not screening or testing enough freelancers
In choosing the right candidate, I would rather have more options to choose from than fewer. If you run a project only on Elance, for example, you are only going to get a few providers from Elance bidding on your project. This might be enough, but suppose you posted this same project (copy and paste) on Guru and ODesk as well? [Elance, Guru and ODesk are 3 of my recommended websites for finding freelancers and outsourced help]
I would rather have 30 applicants and choose from among the top three than to have 10 applicants and choose from among the top one.
Also, your goal is to build a list of qualified people to contact whenever you need them for projects or ongoing work. So even if you post a project and only hire one person, keep tabs of the runner-ups so to contact or test later on for future projects.
Mistake #6: Choosing someone with no room to grow
If you are outsourcing a project (e.g., graphic design) that you know you'll need again in the future, you want to have one eye on the present project and your future needs. Think about what similar services you'll need in the future and to what extent?
Or, if you have a freelancer build something that, once done, needs maintenance, then be sure to ask them about their work hours and schedule. Find out if they have enough time left for your needs in addition to their other clients. It's terrible to go back to a great freelancer later on who is apologetic but too busy to help you.
Mistake #7: Outsourcing your weakness
If your business is weak in a certain area, it may also be weak at managing someone performing the work outside of your company, too. Think about it... every worthwhile endeavor requires some basic knowledge and strategy, as well as some understanding of how to perform the work and measure the results.
At least get this working knowledge upfront so that you can be effective at managing your freelancers. It doesn't matter if someone else is doing the work or not, if you don't start the project with a clear outcome and strategy, and continue to stay on top of it (not washing your hands and hiding somewhere) it will fail regardless of the skills and intelligence of your outsourcers.
Mistake #8: Lack of communication
You heard of management by walking around... well, this here is called seagull management. A seagull manager will be gone for days on end and suddenly come sailing in with the wind, squawking and dropping tons of work on everybody, and then flying away never to be seen again for days or weeks on end.
What seagull managers don't realize is that you have to constantly be there for your team. This doesn't mean it needs to take a lot of time, but they would appreciate fast responses just as you like them from others.
Again, just because someone else is performing the work does not mean you can abdicate your responsibility to support and manage them to achieve the result.
Mistake #9: Insufficient feedback
If you plan on using your freelancer for more than just a few quick tasks, then you will want to invest in your relationship with them from the beginning. Your job as a manager is to coach them and help them to do things exactly as you want over time.
You should expect them to make mistakes and encourage them to fail quickly so you can give feedback and show how to do it the right way. Don't be a perfectionist, and don't make them afraid or hesitant to admit challenges or mistakes and then blame them later.
Many managers just assume that the people who are working for them can read their minds and know all the little details without being told. This is not true, even when the person is highly intelligent. It's your job to communicate clearly and often.
Mistake #10: Underutilizing hired talent
This probably keeps most entrepreneurs and small business owners from outsourcing in the first place. As entrepreneurs, I have to admit that we can have some pretty big egos. While this helps in the vision and confidence departments, it can also lead to the "no one can do it as well as I can" syndrome.
Maybe not, but I would still rather have 10 people who are 80% as good as me doing 90% of the work. Think about it! Besides, with proper coaching and support, you can make a good person great-as long as they are coachable and motivated to grow.
And even when you are outsourcing work to someone, don't miss opportunities to give them even more work once they have proven themselves with some smaller task. I like to list all the work required on a consistent basis and check the sub-items off as I outsource them, one at a time.
Implement these suggestions and your outsourcing experience will be a lot more effective and hassle-free!
Suggested Resource: If you don't outsource, you can't compete. The math is simple...if your competitors are outsourcing and only pay $X to complete a task, and you pay $3X, $5X or $10X, your competitors will eat your lunch. You simply must outsource to stay competitive. Outsource the right way using Growthink's Outsourcing Formula. Learn more by clicking here.
Written by Dave Lavinsky on Sunday, June 17, 2012
Normally, if I were to ask an entrepreneur or business owner how they could double their sales, they'd propose increasing their sales force, trying to get customers to buy twice as much, or doubling their advertising budget.
But often, a superior strategy can get the same results with less effort. In this case, your pricing strategy might be this superior strategy.
There are several pricing strategies to choose from when offering a new product/service or trying something new with one you're already selling.
Making even minor price changes to find the "sweet spot" where the most people will buy can massively increase your results. Think back to economics class, when they covered the Price Elasticity of Demand. Now, if you're still awake, remember how you might raise your product's price down or up and lead to an increase in sales.
Price it too high, and your margins will be great, but you'll generate less revenue because fewer people buy it. Don't price your product too low, for obvious reasons, but don't be afraid to try going lower (even temporarily, like during a promotion) and observe the results.
Test this enough and you'll find the sweet spot that works the best for customers and your bottom line.
Changing your price (and therefore the number of units you sell) can affect your other expenses, so take these into consideration and work it to your advantage.
For example, say you lower the price of your widgets and sell many more of them. You have more sales, but the cost to create and deliver your widget stays the same (meaning lower margins on each widget sold).
This would be a great time to negotiate a volume discount with your vendors and suppliers, since you are bringing them more business. Then your customers get a lower price, you make and keep more revenue, and the vendor does more volume-everybody wins.
Another key consideration is your customers' perception of your product-or, more importantly, how you want it to be perceived. If you price a premium item too low, customers may not believe the quality is good enough. They are accustomed to paying more to get more-and trust me, this is not necessarily a belief you need to go about changing.
On the other hand, if you price something too high, customers will go elsewhere to buy it for less, unless it has something very unique and beneficial.
Some additional pricing strategies to consider are ...
Based on Competition
With this strategy, you'll need to gather the top competitors' prices to use as a starting point.
Determine if they are positioning their products to be on the low end, high end, or right in the middle, and compare that with your own positioning strategy. Also assess whether their product or service is of higher or lower quality than yours?
Consider market trends and your product or service's value, and either price it a little under or a little over that of your competition. Having one or two advantages over the competition can lead to more sales, especially when the price is near the same as those with fewer benefits.
Based on Cost, Plus Markup
In this strategy, you determine your product or service's costs to create and fulfill, and then choose a price above this amount based on the gross profit you want to make when selling each item.
Loss leaders are products or services that you offer at or below your cost, in order to attract more first-time customers who you hope will buy higher-ticket items or a variety of items over time.
The hardest sale to make is the first one, so sometimes it's wise to make the offer so irresistible (by undercutting the competition) that you get to start a relationship with more new people-knowing that you'll recoup your money in the future.
My advice is to also have a plan for what you will upsell them, when, and how. Ideally, it will be as soon after the time of the first purchase (or perhaps as an upsell or cross-sell at the same time as the first transaction), so your cash flow is not affected as much.
Higher Perceived Value
Some products come out of the gate with higher prices, to take advantage of the premium image and psychological positioning. Make sure the quality really is high when you do this, though it doesn't have to be the absolute best product on the market.
Make sure you don't arbitrarily raise the price of your existing products, because people will note the change and not see the justification for it.
Also called "liquidation sales," you can try this strategy when you have excess inventory. Your goal here isn't to generate the most profit-it's to minimize your costs of continuing to store the items, or throw them away. Though it isn't a long-term strategy, it can get you out of a cash flow crunch when needed and/or clear out old inventory.
This is a way to reward people for making larger purchases from you. Offer discounts on bulk purchases, such as "Buy two, get one free." Or, make special deals with the repeat customers who bring you the most volume.
Like the above, but applicable when a customer buys several different products from you-not several of the same ones. You can offer these bundles and their pricing at the time of the sale to sweeten the deal, or you can make it the focus of a marketing campaign.
Some speakers and trainers package together a group of related books, courses, and seminars so that the total price if you buy now is much less than getting them all separately, or at different times. It's a great way to build urgency into your offer, if customers know they'll have to act now to get the savings.
You see this pricing technique used often with services, or technical products like software and apps. With this, you sell the same product in two or three different versions. The trial version (often called Basic) is usually priced very low or is even free. Think of it as the loss leader that gets people in the door and wanting to expand to the full functionality that it offers (often called the Premium, or Gold/Platinum version).
You would then offer upgrades or additional features and services at a higher price. A good example of this would be Tom's Planner-a simple online software for making charts to schedule project-related tasks. You can create one chart with the free version (I used it to make a few charts, one at a time) or upgrade to the paid version where you can make unlimited charts. Think about how you might apply this to your products and services-especially the ones with monthly, recurring income.
So there you have it -- eight proven pricing strategies at your disposal. Make smart use of these pricing strategies and your bottom line will soar!
Suggested Resource: Want more ways to increase your profits? Check out our "Double Your Profits" training. You'll learn tons of quick, proven tactics that will grow your revenues and profits right away. Check out the "Double Your Profits" training here.
Written by Jay Turo on Sunday, June 17, 2012
The depressing and high-anxiety inducing combination of punchless public equity markets, historically low interest rates, and significant inflation risk has fueled desperate pleas for new, workable, and performing investment ideas and strategies.
Any reader of these pages know the author's enthusiasm for private equity investing, both for the entrepreneurial spirit it represents and demands and because as an investment class it has outperformed all others by a wide margin.
But unfortunately poor public market performance has adversely affected its return profile substantially.
Quite simply, 14 years of flat public markets has just cast a big pall of “blah” over the entire equity investing landscape - private and public.
Entrepreneurs have responded well to this “contagion” - via innovations such as electronic secondary marketplaces like SharesPost and Second Market, and via the coming new world of investment-based crowdfunding.
These innovations in turn have made one of the most overlooked yet best returning forms of private company investing more viable and attractive for investors of all sizes than ever before.
It is commonly described as project financing, but a more accurate description of where the real smart money is being deployed these days are in Discrete, Opportunity- Based Investments, or “DOBIs.”
DOBIs differ from traditional private equity investments in that - like project financings – they are not based in investing in a company as a whole.
Rather, like a real estate project or an investment in a movie or a television show, DOBIs involves financially backing a discrete – in kind and scope - business initiative where a) the payoff timeline is measured in months, not years and b) the investment return flows not from a third party purchase of the underlying investment security but rather from the generated cash of the project itself.
The concept is not new. But the types of opportunities being funded and the speed and their level of performance certainly are.
DOBI examples include social media “harvesting” - where investors fund pay-per-click and other forms of marketing that drive “freemium" giveaways, with investment return then being generated through high margin residual sales within a few months or even weeks of the initial campaign.
Or, as has been increasingly seen on crowdfunding sites like Kickstarter, rapid product prototyping and development driven projects that offer both in-kind return consideration, and an effective level of coupon return most typically associated with accounts receivables financings through factoring.
While DOBIs have the technology, market, and execution risk factors of any investment, they also offer many mitigating, "walk before you run" features usually unavailable in the traditional “you are in or you are out” private equity investment form.
And, nicely because the time horizon of DOBIs are so naturally short, the ability to gather multiple points of performance data is naturally much easier.
How to find them?
My favorite places to look are sights like the aforementioned Kickstarter, along with peer to peer lending sites like Prosper.com and Lending Club.
While the “on the board” opportunities there are often good enough, smart and hard-working investors will go deeper and invest not just at the “rack rate” but rather connect directly with the entrepreneur or project team to see if a “one off” deal can be made.
Quick and easy to do? Of course not.
But for those investors tired of the variously weak choices offered through traditional channels, the out-sized and often-times pretty quick returns offered by DOBIs are often well worth the risk and more.
Written by Dave Lavinsky on Tuesday, June 12, 2012
In the great movie "A Bronx Tale," protégé Colagero asks the gang leader Sonny, "Is it better to be loved or feared?" Sonny replies, "That's a good question. It's nice to be both but it's very difficult. But if I had my choice, I'd rather be feared. Fear lasts longer than love."
When running a business, some entrepreneurs don't know how to act. Some think they get the best results when they are feared. Others want to be loved, but are concerned with being seen and/or becoming a pushover.
In either case, including variations of each (e.g., you desire to be slightly feared), entrepreneurs who run companies must mentor their employees in order to get them to excel.
Typically, when people think of mentoring, two things come to mind-someone outside your company showing you the ropes, or some kind of apprenticeship program. However, I believe you can and should be a mentor and friend to your own employees and team, and not just a boss. This article will show you what mentoring is, why it works, and who in your organization you should spend time mentoring.
My favorite definition of mentoring was created by Bozeman and Feeney, who defined it as "a process for the informal transmission of knowledge, social capital, and the psychosocial support perceived by the recipient as relevant to work, career, or professional development...
...Mentoring entails informal communication, usually face-to-face and during a sustained period of time, between a person who is perceived to have greater relevant knowledge, wisdom, or experience (the mentor) and a person who is perceived to have less (the protégé)."
So How Do I Mentor My Team Members?
A leader who is also a mentor cares about their protégés and teammates, and approaches work from the eyes of a servant, not a commander. They know that educating and improving the skills of individual team members will help them and their company be happier, more productive, and more successful.
Mentoring also adds a degree of friendship and affection to the workplace. This makes work a lot more pleasant for all employees, and also makes for a work environment that is more conducive to learning, admitting mistakes, and personal growth.
To mentor someone, you should invest time with them one-on-one in order to:
1) Teach them their job position's skills
2) Assess what they need to improve and measure their growth
3) Infuse leadership in them, so they are more empowered to solve
problems and figure things out on their own without waiting for your answers
Why the Need for Mentoring?
Mentoring has been shown to have a positive effect on one's career. One study by Gerard Roche (1979) found that mentored employees were more satisfied with their work and careers than their non-mentored counterparts.
It has also been found that mentoring facilitates the socialization of new hires into the organization, reduces turnover, minimizes mid-career adjustments, and enhances the transfer of the entrepreneur or business owner's vision, knowledge, and values.
These are the exact things you want - better, happier, more skilled employees who are committed to the vision of your company! This is why mentoring is such a high-leverage practice to include in your leadership activities.
Who Should be Mentored?
The traditional wisdom is to invest the most support and training in your best and brightest employees. But Delong & Vijayaraghavan (2003) reported that it's a wiser move to support the large middle-base (your team's B-players):
"Like all prize-winning supporting actors, B-players bring depth and stability to the companies they work for, slowly but surely improving both corporate performance and organizational resilience... They will never garner the most revenue or the biggest clients, but they also will be less likely to embarrass the company or flunk out... these players inevitably end up being the backbone of the organization."
This makes sense to me, however, I prefer to invest more in the hiring process so you only hire "A" players. Then, you can mentor your "A" players and turn them into "A+" players that allow you to dominate your market.
As the leader of your business, you are more than just the boss, the visionary, the founder, and CEO. You also play the role of coach and mentor for your team. Because you cannot mentor everyone in your company, particularly as it grows, choose 5 or so employees that you can comfortably mentor. And then have them mentor 5 employees beneath them. Etc.
At times in your business, you'll have to be a player yourself in order to score points, win the game, and get results. But over time, you'll see your time allocation changing to include less time spent "playing," and more time spent coaching and mentoring your players to perform under your direction.
Written by Jay Turo on Monday, June 11, 2012
The recent defeat of the recall effort to oust Wisconsin Governor Scott Walker should hearten those that wish to see governments at all levels benefit from the efficiencies and accountabilities that businesses utilize every day to innovate, execute, and thrive.
While attaining these disciplines is painful at times for sure – think about how hard it is to lose weight or to stick to a workout regimen and multiply that challenge a thousandfold for organizations as complex and multi-stakeholdered as modern government – doing so is no longer an option given how intense and global the competition is for cities, states, and yes even countries to retain and attract the people and capital that pay the taxes that fund their governments.
This competition is fought on fronts including the quality of public education, and the simplicity, fairness, and reasonableness of regulatory and tax policies.
Now the really GREAT thing is that on all of these fronts, we are seeing agreement across the political spectrum that efficiency best practices ported from the world of business are no longer ideological choices, but just plain, modern common sense.
You see, because just like in the technology industry where decades of high efficiency competition have brought the cost of computers down over 99% in real terms, so too are market forces working their “tough love” magic on governmental effectiveness.
So ignore the side show that is politics as it is presented in our Drudge Report and our Huffington Post age.
The real game in government and politics these days is happening well below the radar.
It is happening in the little innovations, the little loosenings, little efficiencies that politicians and technocrats are implementing daily.
And it doesn’t matter whether they want to make these changes or not.
They have to because access to the spigot of deficit financing – after so many years of profligacy – has been turned off the world over.
They have to because of ongoing demographic changes – where as societies get wealthier they face worsening ratios of younger “inputters” into their tax systems.
And they HAVE to because if they don't people and capital will just vote with their feet and leave.
To less regulatory onerous pastures, to lower tax seas.
To places that just work better.
This is great cause for cheer and enthusiasm for entrepreneurs and executives looking to start and grow businesses.
Why? Because their partners in government – and whatever one’s political persuasion government is and will remain a key partner that must work well if business is to thrive (see Greece, Argentina, et al.) – have to and are working better.
The process is slow. It is painful. It is cynical-inducing.
But it is happening.
Hooray, Hooray, Hooray.
Written by Dave Lavinsky on Tuesday, June 5, 2012
Hopefully you collect your customers' (and prospective customers') email address so you can send them tips, announcements, and special offers. Because email marketing is a highly effective way to stay in touch with your customers and generate revenues.
Depending on what emails you send, they can lead to customers calling you, buying something online from you, walking into your store, telling a friend about you, becoming more interested in purchasing from you, etc.
But, most entrepreneurs don't achieve these results. Why? Because they don't methodically track and improve their email marketing tactics.
Rather, to succeed, you must track certain key metrics and modify your strategies based on what you learn. Fortunately, tracking these metrics is simple using most email delivery/management services like ConstantContact, iContact, aWeber, etc. These services all have a tracking section where you can look at previous emails to see their delivery rates, open rates, and clickthrough rates.
Here are certain elements you must track.
You might think that if you have 1,000 people's email addresses and press "Send," that 1,000 emails will all arrive in the Inboxes of those people. Unfortunately, it doesn't happen that way. Emails don't all get delivered because they get sent to Spam folders on accident, get lost in transit, and for other reasons.
Typically, 5-10% of your emails won't get delivered. To improve deliverability, make sure people get removed quickly (or automatically) when they unsubscribe from your list. Also, don't send out irrelevant emails. Both high unsubscribe and low open rates can hurt your email delivery through certain email providers that your subscribers use (e.g., Gmail, Yahoo mail, etc.).
Your email management service will tell you how many emails were opened, and what percentage of the total delivered emails that number represents.
Your open rate can vary a lot-mostly depending on the subject line. That's what people read in their inbox to decide if they want to open the email or not. You've only got about 55 characters (depending on the recipient's email provider), so choose your words carefully and persuasively.
If you send out 3 emails to promote a product of yours, and notice that more people opened one of the three than the others, it suggests that the headline was more effective. This would be a subject line to reuse in the future, or add as an autoresponder message that every new subscriber receives.
Or use the same language in your subject lines as in ads you run to generate leads. After all, you know it already gets the attention and interest of people in your target market.
Importantly, if you see your email open rates go down over time, it means you are not providing your subscribers with value in your emails. And as a result, people stop opening them. The ideal is for subscribers to be excited to open your emails each time they arrive.
Your email management service will also show you how many recipients clicked on a link (or links) that you placed in the email, and what percentage of opens and total recipients this represents (this "click" rate is known as the clickthrough rate).
You want to know your total clicks so you can estimate in advance how much traffic you'll get to the webpage you're promoting. And the percentage of people who click after opening is the main indicator of how persuasive the language was in your email body.
Another idea: Try sending an email with the same subject line to three groups of recipients, but use a different email body in each one. The open rates will probably be the same (because you used the same subject line), but the clickthrough rates will give you an apples-to-apples comparison of which email copy was more effective. Cool, huh?
When people click on your link, they will all visit the webpage to which you chose for them to be directed. What do you want to happen once they get there? Do you want them to read a blog post? Make a comment? Share on Facebook? Buy something?
Whatever you choose, there's a metric involved and a way to track it. You can use Google Analytics to see how much time visitors spent on your page (hopefully several minutes if you want them to read a post). You can count the comments on your blog. Your Facebook "share" button will tell you how many people shared your page. And your shopping cart service will tell you how many people made a purchase from that page. And if your goal was to get phone calls coming in, you can count the phone calls and ask what prompted them to call.
So know what actions to measure, because that's the whole purpose of sending your customers or readers email in the first place.
Importantly, if your goal was to generate sales, then you'll have a dollar amount for the revenue created as a result of sending out your email.
If you email 1,000 people and make $100...congratulations! You have revenue of $0.10 per subscriber. Now imagine if you had 10,000 and ask yourself if it's worth spending a few hundred or thousand dollars on building your email list.
In addition to these metrics, I track:
- New subscribers: how many new people have joined my email list
- Unsubscribes: how many people unsubscribed to my list (and then I look at the recent emails I've sent to see what may have caused this)
- Email revenue per subscriber per month: this is an important metric. If you know, for example, that the average email subscriber is worth $1 per month to you, and the average subscriber stays for 12 months, then you can consider marketing tactics to build your email list, and perhaps pay $1, $2 or even $6 or more per subscriber since you know you'll earn a good return on this investment.
Email marketing is a highly effective marketing tactic. But, you must track your results carefully and improve based on this market feedback.
Suggested Resource: Want to learn my complete strategy for methodically maximizing the success of your email marketing, plus get more online traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System.
Written by Jay Turo on Monday, June 4, 2012
Why the full future for Facebook and the performance of its stock is yet to be written, as of today it is selling at prices significantly less than at which it traded on popular, private secondary markets like SharesPost and Second Market as recently as three months ago.
This startling fact is just the latest example of the "existential" questions that have been raised for quite some time now regarding the whole purpose of traditional public equity markets for investors and companies alike.
For growing companies as recently as 15 years ago, whether or not to go public was a pretty easy decision: if you could go public, you did go public.
Why? Well, for starters, it was usually the purest and best way to raise growth capital.
Back then, equity finance was dominated by fundamental, long-term investors that had strong biases toward the clean and easy pricing of public stocks and the uniform reporting and disclosure requirements imposed by the major exchanges.
So lots of companies went public - 1,272 of them from 1990 to 1996 - and Wall Street was very much about "long" promotion of companies' growth potential and as "analog" distributors of their stocks.
Compare that to today's financial markets.
Fast, and high-volume computerized trading combined with the utilization of extremely high leverage has made Wall Street trading profits to be many multiples greater than those generated via traditional underwriting, promotion, and distribution of long positions in stocks.
To this, add-on ongoing onerous regulatory and civil litigation bias against stock promotion and distribution and what we have now is the double whammy of traditional equity underwriting not just being unprofitable, but highly risky as well.
So it should be no surprise that not a lot of companies go public anymore.
And when they do, the performance of their stocks has gotten mostly caught up in the malaise that that has seen the major indices trading at levels basically where they were 12 to 14 years ago.
Now, if the public markets are not good for companies nor for investors, then what really are they good for?
Well, the elephant in the room answer to this question is that those with big stakes in the existing order - i.e. Wall Street and the business media built around it - don't want anyone to know is not a whole heck of a lot.
It is not too much of a stretch to say that a good analogy for today’s public markets infrastructure is that of travel agencies in the 1990s.
As Internet-based travel bookings began to take hold and become more and more efficient and easy-to-use, travel buyers and sellers just one day looked up and said why do we need these guys anymore?
Now Wall Street and the business media that feeds off of it are a lot more powerful than travel agents ever were, but the tides of history and technological change are similarly not on their side.
While the Facebook IPO debacle is an extremely high profile example of the hollowness of their current value proposition, smart investors and companies seeking liquidity and growth capital have been voting with their feet for many years now.
They have been eschewing the public markets for liquidity via acquisition and for raising growth capital via private equity, hedge funds, and global funding sources.
And sophisticated buyers and sellers are increasingly getting together on the new, clean, and far less friction - filled private stock secondary exchanges like SharesPost and Second Market.
Look in the coming months and years for smart investors and entrepreneurs to do more and more of the same.
And the Facebook IPO debacle will only accelerate this sometimes disturbing but ultimately inevitable and yes welcome trend.
Written by Dave Lavinsky on Thursday, May 31, 2012
There are some marketing methods that take continual effort and persistence in order to pay off someday. This is NOT one of those. And for those of you without a website or for whom internet marketing can seem overwhelming at times...you don't even need a website to use this lead generation method.
I want to give you a quick tip today on listing your website (or just your contact information) in business directories so that people can find you online in ways they otherwise couldn't.
I'm not talking about ranking your site in the search engines, or paying for online ads. I'm talking about going to a website like Yelp.com, Manta.com, MerchantCircle.com, or other sites that list businesses by category with their contact information.
Not everyone searching for something on the internet is necessarily typing in a search for it in Google, Yahoo, or Bing. Sometimes people go to these directory sites and scan for local businesses there. Your goal is for them to find you!
And sometimes the pages about you in a business directory will come up in search results when people are searching for your keywords.
Not as good as having your actual website in the first page of results, I know, but getting your name and contact info in front of people's eyes is definitely a good thing.
Plus, being listed in an official directory can add credibility to your company in the same way that being listed in the yellow pages can set a local business apart from fly-by-night operations.
So without any further ado, here's the quick-and-dirty way to help prospective customers find you through this unique online marketing method:
Step #1: Determine your outcome
You've got to begin with the end in mind. Why are you going to list your business profile on these websites-for backlinks? Or do you want direct traffic from the sites' visitors?
Let me explain...If you list your business information on a directory (I'll describe how in a minute), you will be asked at some point to type in your website address (URL).
Your goal might be to have people find you in the directory and then visit your site at some special page for visitors (called your "money" page, which could be your homepage, your best-selling product's page, or a page designed to collect email addresses or elicit a phone call). If this is the case, then just enter in the URL of that specific page.
But, if you're listing your business in directories to get links to your site to rank higher in the search engines, then you would want to use the keyword you're trying to rank for in the business profile, the tags, and in the link to your website.
This latter method is done assuming you have a search engine optimization (SEO) plan in place, and know what keywords to rank your site for, and how. I can't explain all of that here, so if you're not currently trying to do SEO, then I suggest you just enter the URL of your "money page."
Step #2: Create a list of directories to submit to
I've already done this for you. I put together the below list for you of the Top 23 business directories for local marketing. Copy them into a spreadsheet, or print them out and check them off as you list your business information on each of them.
1. Yahoo Local Listings (listings.local.yahoo.com)
2. Switchboard Super Pages
5. Bing / MSN Local Listings (bing.com/businessportal)
19. Google Profiles (profiles.google.com/me)
Step #3: Enter your business profile into each directory
The task now is to list your business' information manually into each directory, one at a time. This is as straightforward as it sounds-find each site and look for a "list your business" section on it somewhere. Then follow their directions to set up your profile.
You'll enter your business name, address, phone numbers, emails, website, business category, and can often write a description of what you do. I would store these in a Word document somewhere and paste them the same way each time.
This is very simple to do but also very tedious in large amounts, to be perfectly frank. That's why I gave you a list of the top 23 to start with (there are over 200 total). Take 5 minutes after reading this to pick a free one and list your business there.
That wasn't so bad, was it? Now, for the rest of them, you can block out some time to knock them all out in one sitting, do one a day for a month or so, or pay an assistant or contractor to set them up for you by pasting in the business information you give them.
Step #4: Track your results over a few months
When you've listed your business on these 23 directories, you can sit back and do nothing and will probably see some great results within a few months.
Or, you can add to your list of directories and list your site on more of them. It's up to you. But whatever you determined your desired outcome to be, find a way to measure it. If your goal was direct traffic, then you'll want to use Google Analytics or your website's tracking software to see how many visitors came from each of the directories over time.
If it was worth it, go get listed in some more directories. Then evaluate if they were worth it. Keep this up until you start to experience diminished returns-meaning that the directories you're getting listed on have very little traffic and are no longer worth the time to get set up on them.
But worst case, follow these directions and in a few hours, you'll be visible in 23 more high-traffic places on the web than before. No need making it more complicated than it is...just do it!
Suggested Resource: Want to learn my complete strategy for methodically maximizing your online traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System.
Written by Jay Turo on Tuesday, May 29, 2012
Unfortunately, lost in too much of the "dramatic" coverage of the Facebook IPO has been the real lessons to be learned for those interested in successful technology and growth company investing.
Part of the confusion is understandable. An IPO is a purposely dramatic event - made so by Wall Street needing both to justify fees and to "arouse" investors from their varying states of boredom, apathy, discouragement, and distraction.
And for a uniquely high profile deal like Facebook, the media also plays a less than "innocent" role.
Let's call this the Oprah Winfrey Network effect - or the idea that a good majority of the public just isn’t all that interested in hearing the "mom, peaches and cream" Mark Zuckerberg success story over and over again.
Rather, tales of trading "irregularities" and of the "little guy" being taken advantage of by “big banks” makes strangely addictive and popular TV viewing and blogging and tweeting.
And, as long as we recognize it for what it is, a classic "bread and circus" distraction, a little bit of is mostly harmless.
But, when it rises to a level where this is where most of the coverage is focused, well that is both a problem and a huge lost opportunity to communicate the essence of value and wealth creation in a capitalistic economy.
It is that the value of a company is solely based on the quality and quantity of its future growth prospects.
This is what has been playing itself in the mostly downward gyrations of Facebook stock since its IPO - sophisticated reviewers deeply questioning whether the company can fulfill on its insanely high growth expectations.
So high, in fact, that for investors in at the IPO price to realize even a market rate of return that Facebook’s future growth expectations will have to be such as to value the company greater than that of any company in the history of the world.
This, of course seems like way too tall a mountain for any company to climb, to say nothing of one majority managed and controlled by a very bright but also very inexperienced 28-year-old.
From this perspective, the central investment lesson of the Facebook IPO should be that earning alpha returns requires identifying and investing in companies that are priced below their true growth expectations.
Now, most unbiased observers - i.e. those not making markets in or commissions on trading stocks - argue almost unrefutedly that doing so is impossible in a high profile, high valuation stock like Facebook.
And that the same can be said for virtually any public company part of a major index - Dow, S&P, NASDAQ 100, etc.
Luckily however, there is now a wide, deep, and increasingly liquid world of investable companies that can be bought at prices below “true” expectations.
They exist within the legion of start-up, small business and middle market companies that make up the beating heart of entrepreneurial America.
Once, a long time ago (in terms of development, if not years) Facebook was one of these companies.
And those that invested in it then made returns beyond any and all expectations.
This, identifying and investing in companies with growth prospects to the moon but priced only to go to the corner market, is the game worth playing, isn’t it?
Hard to do? Of course.
But as the story of Facebook's dramatic rise should teach us so well, far from impossible.
Written by Dave Lavinsky on Sunday, May 27, 2012
To help you to be more productive (and stress-free) during this new era of "crowdsourcing," I put together a list of 23 websites and services that let you harness the power of the crowd, or otherwise help people more effectively work together through the Internet.
Most of these are hubs that brings a wide variety of people together from around the world with some sort of value to exchange. It's amazing to see how this has been done in matching freelance service providers, and now business funding from multiple donors online.
What's also interesting is to see how specialized a lot of these sites are. It used to be that Elance and Guru were the only two places to go to hire people. Now it seems there is a site for every specific kind of niche freelance needs, as you'll see.
So here are 23 virtual platforms and tools that are gaining in popularity and also stand out for their uniqueness, ideas they provoke, or just plain being cool.
- Elance, Guru, and Odesk - These are the 3 old favorites for finding contractors that still got it. I suggest posting a project on each of these and hiring the best from among the total responses.
- OnlineJobs.ph - A subscription site that gives you access to hiring skilled workers in the Philippines directly, often for $300-400 per month full-time!
- Amazon's Mechanical Turk - this is a marketplace where you can request tasks requiring human intelligence-tasks from getting questions answered to writing product descriptions for you.
- Fiverr - It amazes me all of the things you can get from people here for just $5. Professional voiceovers, fast logo designs, and all kinds of writing and search engine marketing gigs are available here.
- 99Designs - a great place to get multiple designs or logos made BEFORE choosing a provider to pay. This is valuable if you've ever paid someone to make a design you didn't like.
- Hatchwise - This site is nearly the same as 99Designs. I've used them both but have no real preference. Both are worth checking out.
- Etsy - this is the "Ebay" of handmade goods. Many entrepreneurs and small businesses test-market new products here first to see what sells better before investing more in promoting it elsewhere.
- Kickstarter - The largest crowdfunding platform for creative projects and endeavors. It uses an all-or-nothing funding system, where donors' funds will not be transferred until you reach your funding goal, and reimbursed if it isn't.
- IndieGogo, RocketHub, FansNextDoor - These sites operate just like Kickstarter.
- DonorsChoose - Backed by Oprah Winfrey and Stephen Colbert, this site makes it easy to donate (as little as one dollar) to any one of a long list of charities, with total transparency.
- 8-bit funding - a crowd funding site specifically for video game developers. Probably not your specialty, but see how there's a niche for everything? Google "your industry + crowdfunding" and see what's out there. Appbackr is a similar site, but is specifically for mobile phone apps.
- RetailMeNot - this is a site where you can get (or post) coupon codes for business services and supplies at significant discounts, like office supplies or even press release submission services.
- ChaCha - A question answering service you can text your questions to get answers on your mobile phone in a few minutes. It's helpful when you're super-busy and don't feel like looking something up.
- 37signals - Probably the simplest and best Customer Relations Management software I've seen for the price (Highrise) and also project management (Basecamp). With everyone on your team able to make and access notes, files, tasks, and emails about a customer or prospect, it makes life a lot easier.
- Skype - a must-download if you hire anyone overseas, for their audio or video chat feature, but also because their Instant Messaging system is just plain handy. It's nice having a record of every conversation with someone in one place, as opposed to a bunch of archived emails.
- TomsPlanner - A good way to manage projects if you're visually-oriented without having to learn to use Microsoft Project. By the way-if you're in business, you manage projects. It allows you to list action items and schedule them in order, in a printable Gantt chart that gets everyone on the same page about who does what and when.
- Quickbooks Online - If you're still using an older version of Quickbooks, consider getting the online version. The monthly cost isn't fun but it's worth it with the time you save. It imports your online bank transactions right into the register so there's not a lot of re-typing.
- SaneBox - This one will change your email experience by making it sane again-a lot faster than by organizing and checking a bunch of folders yourself. There are even timed folders like @SaneNextWeek and @SaneTomorrow that will make your emails re-appear when you're ready to deal with them.
If you want to raise capital,
then you need a professional
business plan. This video
shows you how to finish your
business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
to watch the video.
The Internet has created great
opportunities for entrepreneurs.
Most recently, a new online funding
phenomenon allows you to quickly
raise money to start your business.
to watch the video.
"Barking orders" and other forms of
intimidating followers to get things
done just doesn't work any more.
So how do you lead your company
to success in the 21st century?
to watch the video.