Business Information for Entrepreneurs by an Entrepreneur

Entrepreneurs of today must face sometimes drastic choices in order to keep their small business alive and thriving. In many cases, business may turn to outsourcing particular areas in their company. Business outsourcing is one of the best ways to help with cash flow and money management.

As a small business owner, you obviously have many responsibilities to your company. If you hire employees, that responsibility covers them as well. While you probably want to avoid choosing outsourcing in favor of downsizing, there are many practical benefits of outsourcing certain portions of your business activities.

When you are thinking about business outsourcing, the main issue to consider is whether outsourcing not only saves you money, but puts your small business in a better position in the competitive playing field.

Benefits of Outsourcing

Business outsourcing can provide many benefits. A few of the most important ones are:

• Lower Your Labor Costs - While you may want to be able to hire more workers to help solve the unemployment problem, you simply may not have enough full or even part time work available. Rather than hiring piecemeal, you can keep your labor costs lower by outsourcing many of the in-house tasks noted below.
• Reduces Capital Expenditure - In order to keep business activities in-house, it may require expensive capital outlay. Small business outsourcing of certain functions can help you reduce your total capital expenditure budget, including costs for software, equipment, bigger office space, etc.
• Better Efficiency - It takes a village. And running that village can create inefficiencies when trying to form and refine processes. Outsourcing helps you gear up for better efficiency.
• Focus on Your Business - Outsourcing provides you with less on your plate so you can do more of what it is you are best at - running your business.

Business Outsourcing Options

So what should you outsource? Essentially anything that you don't want to do, are not great at doing, or don't have the capital to do in-house. Here are 8 of the most common small business outsourcing functions.

1. Distribution
   

   You don't need your own fleet of trucks to get your products to retail stores. Outsourcing distribution is one of the most common tasks that any size of business will choose.

   There are many distributors in all states and regions, and likely you will have a choice. Be sure you pick a distributor who ultimately gets your product to more stores and brings more money to your bottom line.

2. Labor
   

   As mentioned, small business outsourcing of your labor can be a good idea, especially if you don't have full-time capacity for specific jobs. That may include on-and-off assembly, overhead jobs like accounting and filing, and even seasonal employees.

3. HR
   

   Managing your own human resources can be time-consuming and confusing if you are not familiar with labor laws, especially if you have numerous employees. Outsourcing this function can free up your time and provide your employees with the necessary support for their HR needs.

4. Janitorial
   

   Most small business owners and their employees don't want to be bothered with tasks such as emptying the garbage, cleaning out the fridge, vacuuming, or especially bathroom cleanup duty. These types of functions can easily be outsourced. Most communities have a choice of private janitorial and cleaning services available.

5. Security
   

   If you have security needs that require 24 hour surveillance, or even just regular checks during off-hours, consider outsourcing that security duty to a local company. These outfits do their own background checking of their employees, and they provide quality service that you likely could not afford or coordinate on your own.

6. Accounting/Bookkeeping
   

   In many small businesses, bookkeeping is easily outsourced. Independent contractors with bookkeeping training, experience, and even CPA certification are a better choice than trying to maneuver through accounting laws yourself.

7. Social Media
   

   You can easily find someone experienced in social media marketing to take charge of your needs. This can be done remotely anywhere so you are not limited to finding someone in your local community.

8. Copywriting
   

   Your marketing material, email newsletters, and even product documentation should be done by a professional copywriter. There are plenty of freelance writers available in the US, and since this function can also be performed remotely, you have a wider choice of writers to choose from who match your requirements and budget.

Running a small business may not be everything you imagined. Company ownership requires a massive time commitment, eternal promotion, and top-level leadership. While starting a business may be the objective of many enthusiastic entrepreneurs, running a small business may not be on the ultimate career plan. When a business is running at full speed and at full efficiency, that may be the time that some entrepreneurs consider succession planning.

Succession planning is the systematic implementation of establishing and transitioning new leadership, which can happen for a number of reasons. Here are the most common:

• First-Time Entrepreneurs - Some first-time entrepreneurs are so involved with their business idea that they don't see the weaknesses of their leadership. It is easy to assume that no one cares as much as you or has more passion for your business idea. However, that doesn't mean that you are the best match or even the best interest for running a small business.
• Plateau of Business Activity - After successfully starting the business from scratch and building it into a smoothly operating company, you may find that running a small business has reached a plateau and is not seeing any further growth.
• Starting is More Fun that Running - Some entrepreneurs find that the energy, adventure, and challenge of starting and building a business provides more rewards than actually running a small business.
• Skill as a Business - Many entrepreneurs start their own company because they are very good at what they do, be it accounting, baking, sewing, you name it. However, the actual activities required for running a small business is overwhelming, and the owner wishes to get back to doing what they enjoy most - their skill or craft.
• Too Time-Consuming - Some small business owners find that the job of business owner is much more time consuming than they imagined. They may have started the business as a part-time venture, or have other obligations that doesn't allow them the full time capacity necessary to running a small business.
• Owner Gets Sick - Lastly, what if you were to become unavailable to run the company due to sickness, injury, or worse? Is your team ready to carry the company forward based on your goals and plans?

Forming a Succession Plan

Succession planning is a good idea if the small business owner fits into one of the above categories. The purpose of that plan is to either pave the path for a current top management to take over, or hire a new and experienced individual who can come in and take the reins.

Form Discussions with Staff

If you feel that there is one person on your current management team that is capable of operating the company as well or better than you, hold meetings with your staff to lay out your feelings and succession plans. First of all, if you do plan to go separate directions, your management team should know about it with as much lead time as possible.

Approach your chosen successor and make sure he or she is up to taking the job of running a small business. If that person is open and acceptable to the challenge, lay out a plan to get the ball moving on a start date, and determine how long the transition will be before you actually step down. There will likely be some time where you show your successor your processes, and you will want to observe them performing the duties of big cheese.

Next, tell your management about your plans. Share with them the transition plan and what to expect. Be sure to ask if they have any questions or concerns and address them as best you can.

Talent Search

In many cases of succession planning, the obvious choice will be to hire a new leader from the outside. Again, be sure you talk to your management team about your plans to leave and your intention for someone else to take over.

There are plenty of experienced individuals who have gained expert status from running a small business of their own, or even from the corporate world. The best way to find the right candidate is to ask around. Get the buzz through your network of contacts, and if that doesn't turn up the right candidate, post for a job in trade magazines.

Before hiring, be sure to do a thorough background and resume check, and conduct a lengthy interview. Succession planning requires more than an hour interview. Take the time to have a long discussion, walk them around your business, introduce candidates to your workers, etc. You want a good feeling about the person who takes over company, so take the time to find the right person who will move the company forward.

You may get weary of hearing the question: "do you have a social media marketing plan for your small business?" However, the question is asked frequently because it is important and many small business owners do not give the proper priority to answering or fulfilling it.

Social media should not be your only small business marketing outlet. Nor should you ignore the potential of social media marketing. The reasons to consider developing a social media plan for your small business are extensive and include:

• Discover an untapped market - Social media for business can help you discover yet untapped markets for products or services you can develop.
• Discover new niche markets - Tying in to untapped markets, you could also find a new niche within your industry and adjust your product/service offering accordingly to fit your social media plan.
• Widen the scope of your target market - Rather than market to locals in your neighborhood, social media for business allows you to expand your current market to potentially limitless customers around the world.
• Improve online sales - Small business social media can help you achieve your online sales goals by expanding your audience reach and engaging with customers as well as prospective buyers on their preferred methods of communication (e.g. Facebook, Twitter, LinkedIn, etc.).
• Improve online sales conversions - You can also improve the actual conversion rate of visitors to buyers on your website with a social media plan. Small business social media allows you to nurture leads and engage with customers in real-time thereby increasing the likelihood of converting a follower/fan to a customer.
• Retain loyal customers - Of course, you'll want to keep in the minds (and hearts) of current and past customers so they will become repeat business. Social media enables small business owners and entrepreneurs to keep in contact with their current customer base, maintaining a valuable relationship and providing constant support.

So how do you formulate a proper and useful social media plan for your small business? Here is our recommended outline:

Define Your Small Business Marketing Profile

Start with your own small business profile. Define your current operations. Some simple questions to answer are:

• What type of business are you (i.e. retailer, manufacturer, professional services)?
• What is your product or service?
• Do you operate out of a retail or office space?
• Do you currently have a website?
• Does your small business currently use social media?
• Which types of social media do you use and how are they working for you?
• Who does/will your website serve?

Set Overall Goals

Next, define the overall goals you want to achieve through social media. You don't have to get too specific - that comes later! Examples of social media marketing goals may include:

• Improve branding
• Improve online presence
• Increase customer base
• Increase website traffic
• Improve search results
• Increasing revenue
• Reduce advertising costs

Outline Your Target Market Profile

In this section, you will want to describe your general customer. Get as specific as you can. For instance, a restaurant may attract local neighborhood married couples with higher incomes who prefer wine over beer. You could cater your unique product to other businesses (B2B) for use in housing construction. Overall, you want the reader to have a good idea of who will be buying your product or service.

Use your target market profile to identify who your customers are, what type of social media they use and how you can interact with them on these communication channels.

Note Concrete and Quantifiable Objectives

Next, write down your small business marketing objectives through social media. You will want to be not only specific, but quantifiable. For instance, don't just say you want to increase web traffic. Say you want to improve traffic by 50%, or by 1,000 visitors per week.

Perhaps you are more interested in using social media marketing to help reach your desired online sales conversion rate of 20% within 6 months. Reach a specific monthly sales objective. Or even achieve a higher per sale average of $15.

Estimate a Hard Figure Budget

While some social media marketing is free and only costs you time and effort, others require a budget. Get real with your financial spending for social media purposes. Include items such as web site design or improvement, costs for social media content like photos, videos, or podcasts, paid social media ads, or even costs for special software needed to create graphics and banner ads.

Determine a Way to Track ROI

And finally, your social media marketing plan should define the way you will track results and determine your ROI. Remember, your advertising costs, whether traditional or online, should help improve your sales and result in a positive ROI. Spell out how you will use customer feedback, social media tools, and website statistics to determine the effectiveness of your social media marketing campaigns, and whether the sales attributed to those efforts result in your desired ROI.

Social media marketing should be taken just as seriously as any other traditional advertising efforts. Take the time to formulate your social media marketing plan so you make the most of your time online.