Running a Business

Microbusiness organisations

by Kev on 8 November, 2011

There are a few organisations out there claiming to support microbusinesses – I’m interested to know what experiences you have of them. If you’re a member of any organisation, please add a comment to this blog entry to say which one you belong to, what you think of it, and specifically what you feel you get out of it. Please put your comments into context by including information about your business- especially its size and nature.

I’m particularly interested in organisations that require you to pay if you join up but if you want to include the various free-to-join groups out there that’s also fine.

And if you’re not a member of any organisation (like me – hence my interest) I’d like to know why, what you’d look for in any prospective group and how much you’d be prepared to pay. I’m not going to be launching my own organisation, this isn’t a marketing exercise – I’m just interested to find out what fellow businesspeople think.

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“we’re doooomed” – the Dad’s Army of media commentators

by Kev on 2 November, 2011

I am utterly fed up with the way the current economic climate is being reported by the media. This came to a head yesterday when better than expected GDP growth was reported in the UK. Growth of 0.5% in a quarter is more typical of an economy in normal growth rather than one that’s struggling. Now, I don’t pay much attention to figures from single quarters – just as the tiny growth in the previous quarter didn’t phase me.

However, given the predictions of Armageddon that accompanied the next-to-zero growth in the previous quarter, you might expect somewhat brighter reporting of the latest figures. Not a bit of it. Every single report I heard started with a phrase like “GDP grew by a higher than expected amount in the last quarter but…”. There would then follow a whole host of reasons why, in fact, the figures were NOT good, despite the fact that they actually WERE.

All this doom and gloom is being spread by economists and journalists. The tone changed completely when actual business people were interviewed. Over lunchtime on BBC 5live, after the usual negative reporting, three business people were asked how they were doing. Of the three, one was doing brilliantly thank you very much, one was doing ok and one was complaining that he can’t offer Chinese-level wages to UK workers. In other words, exactly the sort of responses you’d get from a random set of three businesspeople at any time. Later, after qualifying the good figures by saying manufacturing in this country is doomed, the head of an manufacturers’ organisation came on and was asked what he thought of the outlook. His answer was that it was looking very positive in the medium term and that while some aspects of the figures were poor, others were much better.

Don’t get me wrong. I fully accept the difficulty of the current climate. Of the four limited companies I currently own, one has collapsed, one has seen profits dive, one is doing well and one is growing exponentially. Of course, I’d love it if they were all doing as well as the last two but I’m not sure I would ever expect that to be the case. These are challenging times and for some businesses, the current difficulties will prove too much.

However, this constant negativity is driving me round the bend. I am not asking journalists, economists and commentators (who don’t run businesses) to hide uncomfortable truths from us but simply to give balanced reporting. Maybe they feel that the role of  an “expert” is to dampen down enthusiasm. Well, I can reassure you all I wasn’t planning to run down the street naked in celebration of one quarter of modest growth. I just want figures to be reported objectively with a proper mix of caution and hope.

Continually running down our businesses and economy generates false negativity, making people feel less secure about spending and becomes, therefore, a self fulfilling prophecy. It isn’t big or clever to be a prophet of doom and whilst I don’t advocate blind optimism, a little positivity would go a long way.

Let’s face it, the economy today is, according to 5live, 96.5% the size it was before the banking crisis. In other words, very nearly as big. That’s still a whole lot of business to play for. Businesspeople are, by nature, optimists but it’s a shame we tend to be the only voice of hope in a climate of doom.

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Email Marketing: MailChimp

by Kev on 23 June, 2011

Mailchimp email marketing

I’ve used a number of email marking services over the years – most notably GetResponse.com and AWeber but MailChimp is my favourite.

Just as every business needs a decent website, every business should have an list of people happy to receive their emails. How you go about generating this list is a wider topic but MailChimp is by far the easiest to use in my experience. If you’re on my mailing list, you’ll be experiencing MailChimp first hand. You might have noticed how tightly it’s integrated into my website but, for me, its key advantage is the speed with which I can set up new email campaigns, autoresponders (emails sent in a set sequence) and lists.

Mailchimp has a sophisticated dashboard, and nicely designed too

MailChimp operates in very strict adherence to SPAM regulations which means that your messages are all the more likely to get delivered. This also encourages you to prune your list on a regular basis to remove old or poorly responding subscribers.

They have a very generous free plan which allows you to store 2,000 email address and send 12,000 emails per month – plenty to allow you to get used to the system and make sure it’s right for you. Across my accounts I have well over 4,000 active subscribers and gaining and managing has been (almost) a joy with MailChimp. In fact, the only major criticism I have of them is that it’s impossible to move an email address from one list to another (for example from “prospects” to “customers”) although they do encourage segmenting within a list so it’s not a major problem.

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Dinosaurs alive and well in the corporate marketing department

by Kev on 10 June, 2011

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Picture the scene. You work for a corporate marketing department with, of course, a limited budget. You’re launching a new product and considering how to market it.

Traditionally, you’d buy print advertising space in newspapers and magazines. To run a small colour ad in the Guardian costs around £4,000 per day for a circulation of around 250,000. If 5% read your body copy that’s 12,500 reads at a cost of 32p per read.

Alternatively, you could spend your £4,000 on creating a Facebook game. A good game will get at least 100,000 plays at a cost of 4p each. Not only is the cost a fraction of a single day’s print advertising in a single newspaper but the quality of the interaction is massively higher. A user might spend, say, 10 minutes playing a game related to your product. Imagine that, 10 minutes fully engaged with your product for 4p – including a direct link for ordering that product.

As far as I am concerned, this is a complete no-brainer. And if you’re wondering where I got my Facebook figures from, they’re actual figures from a real game.

So why don’t corporate marketing departments commission more of these games? Two reasons. Firstly, ignorance of online media. This is, of course, unforgivable in so-called “professionals”. The second is even more unforgivable and can be summed up in the sentence “no-one ever got sacked for running a print advert”. In other words, keep doing what you’ve always done and no-one can criticise you. And that, my friends, is why working in a corporate department is a mug’s game. I know, I’ve been there.

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How turning around the signup process quadrupled my conversion rate

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by Kev on 25 May, 2011

Any marketer worth their salt will tell you that “the money’s in the list”. What they mean is that, over a period, you can convert many more visitors to buyers by having a mailing list. Sometimes this means broadcasting to all subscribers when you have news or information to relate but usually these lists also use an autoresponder that sends out emails in a set sequence.

I recently set up a membership site which offers free membership with paid upgrades. At the end of the process, the member was automatically added to my Mailchimp mailing list – they would then, of course, have to confirm that they wanted to be on the list because “double opt-in” is a requirement of all respectable lists. The problem is that even with a freebie thrown in as an incentive to complete the process, only 1 in 4 of the people who became free members signed up to the list.

Now, you might ask why I did it this way around and the truth is that it was simply because this was the way Wishlist Member (the WordPress membership plugin I use) did it.

Why was it important to get people on the list? Because I know that I will get a much higher conversion rate for the paid memberships if I remind and prompt people to upgrade over the following days. It’s also worth building up a list because a targeted mailing list has a value.

So, on Monday, I reversed the process. I set things up so that when the user visited the site they were invited (using the Popup Domination plugin) to sign up for a free membership via the mailing list. They then get the double optin confirmation at which point they are directed to the page containing the registration box for getting their free membership of the site. This way, I guarantee that they’ve signed up to the list before they get access to the site. Sure, they could easily unsubscribe but then those sorts of people would be unlikely to buy in any case.

The results so far has been impressive. A slight drop in the number of free members but the percentage of daily mailing list signups has quadrupled. Next week, I should see this improvement in mailing list conversion translate into paid upgrades.

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How to get CDs and DVDs produced professionally for next to nothing

by Kev on 6 May, 2011

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Presentation is everything in business and if you offer your customers CDs or DVDs either as products in their own right or as part of your marketing, there’s little point unless they are produced professionally.

I’ve produced CDs for two of my businesses. For one, I was acting as a mini duplication company for a client and for another the CD was part of the product. Our options were either to have an external company produce the CDs on CDR and using inkjet printing on the surface for the label or to buy in the equipment to do the same ourselves. We opted for the latter and it was profitable enough. [click to continue…]

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Business Records Checks: what the Small Business Owner needs to know

by Kev on 1 April, 2011

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My accountant is trying to drum up business for their “Tax Investigation Insurance Scheme” which is fine. What isn’t fine is that they’re mixing it up with the proposed Business Records Checks which are another thing entirely. It’s nothing short of scaremongering to link the two together but that’s a matter between me and my accountant. For now, let’s look at BRCs and what they might mean for us.

I’m not, at this point, going to get deeply into the government justification for BRCs (indeed, they claim it’ll help us make more money, a-ha-ha-ha) because it can be summed up as this: money. They claim that they’re missing out on billions of pounds of tax revenue because poor record keeping amongst small businesses almost always results in lower tax bills. Or at least, so they say. It seems to me that if the problem is simply poor record keeping, it would be just as likely that this would result in paying too much as too little but reading between the lines they believe small businesses are deliberately keeping poor records to reduce their tax bills. [click to continue…]

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Shafted Again – the government’s support for small business exposed

by Kev on 23 March, 2011

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This coalition government (which I broadly support) has again disappointed today. George Osborne trumpeted the importance of small business to the economy and, as evidence of this, the drop in corporation tax rate. What a pity, then, that the 2% drop in the main rate does NOT apply to small businesses with profits of less than £300,000 per year. For us living in the real world, the rate drop is only 1% (or half as much).

George, if you really want Britain to be the best place to “start, run and grow a business” then you must reward small businesses first. Companies of all sizes generally start out small so getting low tax rates on their profits at the beginning is vital. What a missed opportunity.

So, the focus for all responsible small business people is to minimise their net profits (yes, really) and, in that way, minimise their tax. The simplest way to do this is to employ yourself (and your partner if possible) in the normal way at a rate equivalent to the personal allowance (just over £7k from April). By doing this, that part of your income is tax and NI free. Your profits are also reduced by that amount and you therefore pay less corporation tax.

If possible, you should also see if you can benefit from the new tax allowance for research and development. The best option is to talk to your accountant but, essentially, you could get a big allowance for innovation. Worth a look.

Otherwise, it’s back to normal – grinding away trying to make money on a day to day basis whilst trying to handle the idiots at HMRC (I recently had a demand for £0.00 threatening the bailiffs if I didn’t pay). Good marketing and cost cutting can more than offset the effect of the monkeys in the government.

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Facebook ads: waste of time?

by KevPartner on 1 February, 2011

BusinessInsider.com produces a series of “charts of the day” based around different topics. This morning’s chart shows the Most Successful Facebook Ads and it makes for very interesting reading.

Take a look at the bottom of the chart for the best performing ads. Clickthrough rate is in red and cost per click on the right. There’s a typo in “tabloids and blogs” because I think it should read 0.165%. So, the best performing Facebook ads have a clickthrough rate of around 0.15% and a cost per click of around 20c. Of course, we don’t have conversion rate information so we don’t know how many of those clicks resulted in sales – my experience has been that, at best, Facebook ads perform somewhat below the conversion rate of Google’s Display Network (Adsense).

A clickthrough rate of 0.15% for the BEST performing ads is woeful. This means (if my maths is correct) that over 600 people see the ad before a single one clicks. For the worst performing ads, this is nearer to one in every 9,000 views. Even though Facebook is a huge network, you’re going to struggle to get any meaningful traffic with those numbers.

How does this compare with other forms of advertising? Well, the closest Google analogy is the Display Network (formerly the Content Network) which, like Facebook Ads, is interruption marketing. If I were to run a Display Network campaign with 0.15% CTR, I’d shut it down – it would simply not be worth the time. I’m looking for CTRs of at least 10x that figure to make a campaign worth running.

Google Adwords is a different kettle of fish. Because the ad is only displayed when the searcher types specific keywords in, then as long as you choose the right keywords you should get much higher CTR. I look for a minimum of 5%. In other words, I can expect roughly 450 times more effective marketing using Adwords than Facebook- where do you think I concentrate my efforts?

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Making money from a website: Membership sites

by KevPartner on 18 January, 2011

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I’ve spent the past couple of months creating a new version of Passyourtheory.co.uk, my driving theory test website. PYT has been running successfully since 2005 but with the government’s decision to stop companies licensing the official questions coming into force soon, we’ve bitten the bullet and are changing things.

The original PYT was created from scratch and, I reckon, cost around £15,000 to build 5 years ago. It’s repaid that investment many, many times over since then but I was keen to find a cheaper method of development this time around (albeit that I can reuse many of the existing elements). One of the big changes in the web “landscape” since 2005 has been the widespread popularity of “frameworks” – software that allows you to create sites quickly by providing the underlying structure. [click to continue…]

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