This Week In Business

5 Things Every New Business Should Know

Starting a new business? There are probably some things that you find uncertain, and others you just don’t have the hang of yet. While there’s no cookie-cutter approach we can offer budding entrepreneurs, there are some general tips to keep in mind. Here are five:

Failure/Rejection (on small scales) are probably in your near future, and that’s a good thing. There are more lessons to be learned in rough waters than when it’s smooth sailing. Remember Newton’s First Law: An object at rest stays at rest unless acted upon by an outside force. A little adversity here and there will not break your business — depending on how it’s handled, it can actually help your business grow. There’s something to be said for a healthy amount of risk-taking, too.

The first 2 years are usually the hardest. This is a good stat to keep in mind as you develop your business plan, especially budget-wise. Remember — if things don’t go the way you planned, don’t worry. It’s fairly common for businesses to struggle in their early, formative years.



Don’t be afraid to ask for help. As a small business owner, you’re probably used to doing things on your own. However, that doesn’t mean you need to isolate yourself. There are lots of resources for small business owners. Remember to ask people in your network for advice.

Take a look at our post on Automating, Delegating, and Outsourcing to develop ways to include others in your day-to-day work life.

Show, Don’t Tell. To build both your business’ trust and reputation, showing is better than telling. Marketing and advertising are important to spread the word about your business, but performance and delivering quality products and services are more important. No amount of advertising makes up for a poor product, and there’s no substitute for trust.

Learn to be efficient with your time. It can be easy to become a martyr for your business. But isn’t it better to work smarter, not harder? Part of this involves delegating and outsourcing as mentioned earlier. Take charge of your schedule in a way that’s productive but keeps your sanity intact. Develop systems, stay organized, and jettison anything that doesn’t serve a purpose.

Here are some posts we’ve written regarding efficiency, including systems and getting organized.



Automating, Outsourcing, & Delegating

Being independent means you are in charge of doing it all, right? Sure…if you want to go crazy and lose sleep/hair over it.

The truth is, you may think of yourself as a “one man show” but this kind of attitude can a) get pretty lonely when things get tough, and b) can actually hurt your business rather than help it. Here are three ways you can let other people/businesses/services help you, so you can keep doing what you love and help your business thrive:

Automating

Automating is for the truly mindless things that no one needs to do in a real way. There is a love/hate relationship with automation in the content marketing world, but I think there’s room for compromise. You can’t automate everything, but you should automate some things.

Some non-marketing things you can automate for your business include:

  • recurring bill payments (i.e. utilities)
  • frequent orders (if you’re running a restaurant and go through a certain amount of napkins, salt, avocados, etc every month)
  • scheduling/booking
  • accepting payments
  • tracking purchases

Online, you can automate your social media content. We use social media scheduling software to get content ready for posting ahead of time. However, it’s really important to update/refresh content and log in to these accounts to stay up to date on activity. What if someone comments on one of your scheduled posts and no one has answered them? Every now and then you might want to update people with something time relevant like specials, recent orders, seasonal things-whatever you can think of. For more tips on automating social media, take a look at one of our old blog posts When Automated Marketing Goes Wrong. There are also tools like Zapier and IFTTT which can help you connect things up (ex: when someone fills out your contact form and opts in for email updates, they automatically are added to your email marketing list).



Delegating

Delegating is for something you’d like to keep ‘in the family’ but don’t want to do yourself. If you have employees or even part time/freelancers that you work with, delegating can be a great way to move some work off your plate so that you can focus on other things to grow your business. Going back to the social media updates, you could delegate the logging in and responding to inquiries to another person entirely.

Some things you can delegate include:

  • tasks you are inefficient at (ex: scheduling meetings)
  • tasks you need regularly
  • tasks that have little to do with your business (ex: cleaning the office bathroom)

Some business owners tend to feel a bit guilty and/or bottle-neck when it comes to certain tasks of the business. The tough love answer for bottlenecking is, unless you’re okay with limiting growth of the business, it’s not going to serve you well. For new hires and relationships with freelancers, you should definitely have a trial/training period, and set up some sort of annual (or other frequency) review process. When it comes to the everyday tasks, though, it’s better to hand over the ropes and be available as a resource without limiting the flow of work that gets done.

And if you feel “guilty” about delegating, think back to the early days of your business when it was you performing the gruntwork AND trying to grow a business. You’ve been “in the trenches” before, and I’m going to assume you’d be willing to jump back in if you needed to. The thing is, in order for you to take your business to the next level and keep growing, at some point you have to hand those things off to someone else (and be okay with it).



Outsourcing

Outsourcing is for things you either can’t efficiently or shouldn’t logically do in house. There are some things that are generally a pain, and that you’ve probably had to handle on your own in the early days of business. But at some point, there are certain tasks you can straight up outsource so that you don’t have to be in charge of them anymore. Some things you may want to outsource include payroll, logo design, bookkeeping, etc.

Think of the things you can do but maybe don’t enjoy doing or maybe just don’t love doing. Is it possible to hire someone else to take care of it for you? Again, don’t let guilt or the feeling of “well, I’m the business owner so I should care/be doing this myself…” stop you from outsourcing. It’s one of those things that will free up your time, which can go into other areas of your business. Outsourcing, just like delegating, prevents you from spreading yourself too thin and stunting the growth of your business as a result.

Stay tuned for our other posts about Independence and Business this month!



Cross Selling With Others

So you’ve been reading our posts about selling more and I know what you’re thinking: “I want to make more money without creating the complimentary product/service myself; what are my options?”

The good news is, you can sell more online without the responsibility of creating a whole new product/service! Here are a few ways you can cross sell while working with other businesses or non-profits:

Figure Out Referrals

Looking through your contact form inquiries, social media comments, and email inbox, I’m sure there are some things that people are asking you for that you are unable or unwilling to do.

Let’s say you are a greenhouse but you get lots of comments asking where people can get sod. What you could do is contact companies and get their information and make it available on your website. “Hi Debbie, thanks for asking us about sod. We don’t sell it but Company X and Company Y both do. Here is a link on our website about their services, price points, and more: thewebsite.com/faq/all-about-sod.”

You can create a more formal relationship with a complimentary business in the way of an affiliate relationship, partnership, or joining a referral networking group like BNI.

No matter how formal or informal, working with complimentary businesses means you can steer your customer (or potential customer) in a good direction so they still feel taken care of by you and hopefully, that other company appreciates and reciprocates, either with a portion of the sale you generate or by sending referrals your way, too.



Consider The Subscription Box

Let’s say you sell something that goes well with other somethings… but you don’t necessarily want (or need) to carry it in your retail shop. Consider making a subscription box, where customers subscribe for a monthly price (or slightly lower quarterly/annual) price to get a box of stuff around a theme.

An excellent example of this is Willie Wags right out of Bangor Maine. They send out boxes of stuff collected from different businesses celebrating women entrepreneurs (they’ve recently moved to a retail location in downtown Bangor too but they could have kept it subscription box only if they wanted I’m sure).

Maybe you sell stationary and have connections with others who sell cool pens, stickers, etc. You could probably make some boxes including the products of your business friends (and yours) at a price that is lower than retail but allows you to get in front of new customers. (Aside: I’m not sure why no one has done a ‘Bar Harbor Box’ yet, I think that would kill!)


Host an event together

Events take a lot of bandwidth but they are good ways to attract new customers whether it’s an open house, a workshop, or something else.

Finding a complimentary business to help you host an event is a great way to not only divide the work but make the event more fun. For example, if you are a hardware store but you don’t do party rentals, it may be cool to have a cookout/block party with sales going on while you have a few rental pieces of equipment (bouncy houses and slush machines anyone) set up too. There’s also a likelihood of more attendees because you get the draw of two (or more) businesses- customers of one business may show up and decide to become customers of the other business, too (especially if there’s a bouncy house involved).

In other words, cross selling doesn’t just have to be your stuff. It actually works well when it isn’t. By figuring out ways to work with other entrepreneurs in a complimentary space, you can all win together.


“For a Dollar More, You Can Get a Large”- Upselling 101

We’ve covered selling in a general sense and gone into detail about cross-selling, the next item on the list is upselling.

With upselling, you’re selling a person a better, more expensive version of whatever they were initially planning on buying. If you’ve ever been to a movie theater or fast food restaurant, you’ve probably experienced upselling in the form of “For a dollar (or so) more, you can get a large.” You were already thinking of getting this meal anyway- the upsell increases the quantity of popcorn you were planning to get, and the movie theater makes more money.

Back to the baby registry example I used in the cross-selling post, Amazon also has a subtle upselling option. You can see “Customers Also Viewed…” which will offer a similar product from different brands at different price points (I say subtle because some options are cheaper and some are more expensive). Another potential upsell on Amazon is the comparison chart that appears with some products. I definitely poured over these, and the reviews, when creating my registry.

Again, just like with the cross-selling example, you can offer upselling options on your own website in a similar way.




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General Facts/Tips for Upselling

While the whole concept of “For a dollar more you can get a large” may feel weird or gross to offer customers, it’s been argued that it can actually increase customer loyalty/retention. But how?? You’re just tricking them into spending more money, right? Not really. This article gives an example of upselling a service (car insurance). While the customer was calling their insurance company for a tow truck, the company mentioned “Hey, you’ve been a customer for X number of years and are now eligible to upgrade to a better insurance plan”. Since the person had been a customer for such a long time, and they had to wait for the tow truck anyway, they said “Yeah, why not.”

How does this create customer loyalty/retention? Knowing that you are eligible for greater benefits as time progresses increases the chances someone will stay on as a customer for longer (provided there’s already a value in the service/product). Additionally,  the same article suggests upselling should be a win-win- your customer should feel like they are “winning” (but not in the Charlie Sheen sense).

An example of upselling where the customer doesn’t feel like they are winning: when a cable company tells you you’re eligible for a month long trial for 100 extra channels (yes, please!) but you unknowingly stay signed on and have to pay additional fees the next month. Not cool, don’t do this to people.


How to Upsell

Unlike cross-selling, it’s a little trickier to upsell after the sale has happened (unless the customer decides to return their purchase for something more expensive, which is pretty inconvenient when you think about it).

Here are a few ways you can help make the upsell happen.

Educate your customer.
 Comparison charts, videos, blog posts, and other methods to educate them about the difference between different products/services (and subtle justification of price differences) allows the customer to be open to be upsold.

Be ready to bundle.
If you want to upsell your kayak tour consumers with optional $10 Otterbox rental and $15 gourmet lunch, it makes sense to bundle products together for a lower price point when it makes financial sense.

Show your bestsellers.
Kissmetrics has pointed out that upselling happens fairly infrequently (4% of sales), but one of the ways to increase your odds is by recommending the most-sold items in your store. It’s probably a social thing- I will second guess my purchase if I see that the majority of people are buying this other thing. Even if I end up sticking to my guns, I’ll at least check it out.

Start with current customers.
Upsells work much better for existing customers. A recent example of this is me getting up-sold on for Beachbody Coaching. I had been using their on-demand workouts anyway as a result of not being able to run, but when asked if I wanted to become a coach at a greater cost to get some additional perks, I agreed. Why? Because I already knew the value of the stuff I was paying for, so I was okay with paying a little extra a month for things I was already going to use anyway. To me, it was a win-win.

Offer packages, including one very high end one.
An example of this is from a pinup photographer in Texas who offers four packages from $450 to $2250. Her most popular package is $850, which people feel much less bad spending money on when they see they could be spending more than double that. Most consumers buy the mid-tiered price item so give them options.



Setting Up Upselling Online

Use Your Existing Ecommerce Software
To implement upselling on your own ecommerce site, Woocommerce has a pretty straightforward interface for upselling (very similar to what they use for cross-selling, actually). Check with your ecommerce software’s FAQ section with how it is set up in your software.

Use Your Website Content To Help People Choose
If you have a list of services on your website at higher price points that people hem and haw at (and opt for the cheaper option), you can educate people in a few ways:

  1. Set up an FAQ page to make sure people know exactly what they’re getting and can determine what is beneficial to them.
  2. Create a multiple choice “Should I choose X or Y?” Some websites do this with a quiz, others with a features comparison chart. This allows a side by side comparison of two (or more) options.

Going through this process shows that you are invested in what the customer actually wants and what would work best for them: “Sell the benefit, not the product.” In other words, you may see the benefit for a person to buy the higher priced item but you may have to help them realize the value your product/service will add to their life.

Make It Exclusive
If you feel like creating a little mystery, allowing only certain people to buy a higher level item (think credit card companies with certain credit cards only a very exclusive group of people can apply for) can add to its mystery.

Think About Your Website Design/Copy
There are certain ways to make your website work better for upselling. One way is to run A/B tests with different designs/copy and see which give more sales. This is called working smarter, not harder! Learn more about A/B testing here.

In short, upselling is not a sleazy practice but one that builds customer loyalty in addition to benefiting your business.  



Lessons From The Side Hustle

I think it’s safe to say that both Kassie and I are addicted to Side Hustle School, a podcast by Chris Guillebeau. I started listening because I thought it was interesting to have this short podcast, non-interview format. Most podcasts are 20-40 minutes with an interview and this one is typically 5-8 minutes with Chris being the only voice. I was curious how he’d keep it interesting… not to mention learn from the kinds of businesses he profiles.

The idea of the side hustle is it’s something you do outside your day job to earn a bit of extra money. Sometimes it becomes a full time thing of course (ex: the company website this blog post is on started as a side hustle while I worked at a newspaper). Mainly though, a side hustle is just that a fun, income generating, part time project.

I’ve conservatively listened to 75% of the daily episodes so here’s what I’ve gleaned so far.


Build it as they are coming (or even only build it if they pay you up front).

In a lot of cases, marketing for the side hustle started WAY before it was ready. In one case, a woman began collecting email addresses before her cookbook was even ready… so when it came time to sell it, she had an audience waiting to buy. In another (which I can’t seem to find on the site) a guy studying for some kind of exam given to doctors made a landing page where people could pre-buy his study guide. He didn’t make the study guide but when enough people were interested, THEN he pulled it together.

So get your marketing ready even before your product or service is ready so you can start building excitement… and collecting potential customer contact information.


If people keep asking for it, it might be an upsell.

If people keep asking if you deliver your homemade cookies, chances are you may be able to upsell a delivery service with your cookies.

You want to look for this feedback coming from different places, not the same group of friends. For example, when our web host friends, web developer friends, and clients started complaining about how annoying it was to keep Wordpress website software up-to-date, we started a Wordpress Insurance service for $25/month.

What are your customers complaining about or asking you for? This might be a place to start.

Controlling as many things as you can keeps things in control but it does limit your profit/scale.

One of the companies profiled was a cleaning service created by a student. There was a point in business growth where he realized he’d make a lot more money if he worked with other reputable people who helped clean the houses… but it also meant he had to create systems and other ways he could control the quality of work being done by other people. Keeping things in house, like if you are manufacturing your own candy hearts with custom messages, you are limited by how many you can stamp out in a day… but that might be ok. Just know there are tradeoffs, always.


If it doesn’t work the way you want it to, be flexible.

There are certain kinds of businesses that seem sexy to open: bars, coffee shops, restaurants, etc. The problem is most people can’t go from zero to their own cafe, financially or otherwise.

When two friends wanted to open a distillery and saw all the regulations, they decided to make homemade gin kits… and were a success. If they had been inflexible about how they were going to get artisinal spirits to the masses, they would have lost out.

Most careers, if you really think about them, have a way that you can step into them… because the idea with the side hustle is…



Risk as little as possible.

Yes, you should spend time building or trying things,  but don’t sink thousands of dollars or hundreds of hours into something. Look for a quick win, even if it’s small, which can encourage you to stay on the right track. For example, an orthodontist as an experiment spent $500 on Facebook ads but rather than just ‘boosting’ them to make more of his friends see them, he used them strategically to attract patients seeking braces with a $400 off coupon. He didn’t build a whole new section of his practice or do anything crazy; he just tried something small and when it was a win, he could adjust other things accordingly and move onto the next win.

If you’re interested in small business development, making extra money, or just hearing people with cool ideas, listen to Side Hustle School. Whether you have never had a business or run several, I guarantee it’ll give you ideas for moving ahead.


Would You Like Fries with That? Cross-Selling 101

Back in January and December, I was spending a lot of time on Amazon trying to create a Baby Registry.

As a first timer whose Mom didn’t necessarily use the internet to create a baby registry, I was on my own figuring this out.

Fortunately, hundreds (or thousands) of moms-to-be in recent years have used Amazon to create a registry, so Amazon has plenty of guides for people creating a registry from scratch.

One of the helpful tools that Amazon has as you are viewing a specific product is “Customers who bought this also bought…” (and “…also viewed” and “Sponsored Products related to this item”).

 

As someone who needed a little bit of handholding during this process, this feature was greatly appreciated. It’s also known as “cross-selling,” or selling a different product/service to an already existing customer.

If I was shopping on a specific brand’s website, cross-selling would look  a little different. Say for instance I’m looking for a crib. Common cross-sells would be crib sheets, a blanket, and maybe a mobile. Other times you may have seen cross-selling in action include “Would you like fries with that?” and “Who wants to see a dessert menu?” (Guess where my brain is at today?).

Your business may not be quite as big as Amazon, but you can still implement cross-selling techniques on your own website.


General Facts About Cross-Selling

Since it involves selling to someone who is probably already a customer, or even in the middle of a purchase, cross-selling really is a “nothing to lose” scenario. In order to get the most out of your cross-selling , there are a few things you’ll want to keep in mind.

First- cross-selling is relevant. If someone is buying a baby stroller, Amazon doesn’t offer a Keruig as a suggested purchase- they offer other baby products and/or different baby strollers by other brands. While you could argue that a Keruig is sort of related to someone gearing up for a baby, that’s too much of a stretch for a good cross-sell.

This article suggests using “you” in cross-selling pitches, because it feels more personal. Amazon does this using “Recommended for You,” or in some cases, “Recommended for [your name].” My advice is to go with your gut on this one- during an in-person transaction, I’d probably feel closer to the sales-person and more likely to make a purchase if they were using my name, but knowing that a website is using an algorithm to produce my first name doesn’t elicit that same response (and some people are creeped out by this). Sticking with the general “you” might be the safer way to go.

Shopify also offers the suggestion of adding products that people would generally be familiar with as cross-selling options, because it’s more likely more people will make a purchase if they know what the product is.

Another tip- keep the cost of cross selling items relatively low. The actual suggestion is to keep the overall cost of the order within a 25% increase of the original order (i.e. whatever the customer was planning to order before adding on), while Forbes suggests 35%. Either way, that’s more money than you would have made otherwise.



Cross-Selling Before/During Checkout

Odds are, your website is not as robust as Amazon (the idea of creating that website makes my head spin). However, depending on what type of cart software you have, you may have the ability to add cross-selling into your cart.

Woocommerce comes built with the ability to add cross-selling options to your cart, whereas Shopify requires you to get an add-on app through their website. Investigate the software you use for ecommerce- it may require an add-on or already be built in, but it’s usually fairly simple to set up afterwards. This requires some data entry and thoughtfulness on your part, as you go through your products and think of relevant recommendations (remember- you don’t have to have a cross-sell option for each one of your products- just where they make the most sense).

Don’t be afraid to think outside the box here, either- you can cross-sell services for your products, too. For instance, if I were purchasing a crib, maybe the cross-sell service would be delivery + assembly for people who live within 25 miles of the store. Other examples of services you can add to products include 24 hour support, 1 year warranty, insurance, and so on.

Even if you don’t have a product/service on your website that you’re trying to sell, you can still offer something similar. A lot of the blogs I read will offer suggested posts based on the one I’m currently reading, and they’re usually related to the topic at hand (it’s also a great way to remind people of your older content). If you have a Wordpress website, WP Beginner suggests these 5 “Related Posts Plugins” that can set this up for you.



Cross-Selling After the Sale

Although cross-selling typically happens as a person is shopping or as they are checking out, there is still a chance that they’ll be interested in a cross-sell after the fact. This can double as a customer service follow-up after a purchase.

For instance, if someone buys a lawnmower from you, sending them an email newsletter following up about the quality of their product is never a bad idea. You can include some cross selling items in that newsletter, such as a bagger that stores the cut grass as you’re mowing. Maybe at the time of purchasing the customer didn’t see a need for this, but after a few weeks and seeing the email they will think, “Hmm, I have had to spend a half hour raking after I mow, this could really cut down my time…”- in other words, the value is now apparent.

This isn’t quite the same as a checkout cross-sell, but you get points for customer service follow up and it’s a good chance to get customer service points, and you may make another sale.

Stay tuned for more posts about selling more online this month!