Jake Snelson - Vyde

Save Time & Stress Less – Process Automation

Entrepreneurs and small business owners are often one-man shows. But just because your headcount is small doesn’t mean that your business has to be. In fact, you can save time, stress less and earn more by spending a little bit of time thinking through your daily tasks and implementing process automation where you can. For many small business owners, process automation sounds like something that’s only for large corporations or businesses that have exponential growth – but we’ve seen that process automation doesn’t just cut down on stress and save time, it also helps businesses grow – and grow quickly.

What Process Automation Can Do For Your Business

Just so that we’re clear, they type or process automation we’re talking about is anything that brings structure to repeated tasks or eliminates additional work. If you’ve created your business from the ground up, you probably either remember the days (or are still in them) where you’re crafting the same emails over and over, or feeling like you’re reinventing the wheel for every client, new product launch or customer service issue. The start up phase of any business is so focused on bringing in enough cash to support the business that we spend a lot of time spinning our wheels.

Why Process Automation Helps You Grow?

The simple answer – it frees up your time so you can focus on other tasks. But it also helps in a bunch of other ways. Process automation can save you money. For example, we have lots of clients who tell us that they’re super busy and need to hire an assistant. But when we look at their books, we can see that they might not be able to pay an assistant and that the income their brining in doesn’t seem to match up very well with the hours they tell us their spending. Hiring an assistant seems like a great way to reduce stress, but it could actually increase it. Instead, we recommend taking a brief look at the work you’re completing every day. Are you still drafting out customer service emails when needed or do you have a file of templates that you can tweak as needed? Do you process and package orders individually or do you batch tasks? You can see that answering a few simple questions and then putting together a little bit of a structured plan can quickly convince you that you actually don’t need an assistant you need process automation.

How to Get Started with Process Automation

We touched on this slightly above – the first step is to stop and look at what you’re doing over and over again. If you feel like you’re having to recreate the wheel, chances are you’ve got an area of your business that could benefit from process automation. Before you rush out and buy new equipment or purchase expensive software – make sure you stop and see if there isn’t an easy fix. Here’s our short list of process automation ideas that don’t require spending a bunch of additional money, but rather just a little bit of time:

emails – dig through your sent email box and pull out those you’ve already drafted and that seem to need to be written again and again. Make a file of email templates, even save them in your drafts folder right there in your inbox and then make sure to just cut and paste and tweak as necessary. Even if you only have a template or two, you’ll be saving yourself at least a half hour each day.
batching tasks – it’s one of the first things people suggest but also one of the last suggestions people actually take. But the time you can save by batching tasks is amazing. And it also simplifies your work day so that you’re not stressing about the fact that you didn’t get much done. Take 20 minutes and brainstorm all the areas of your business. You may only answer customer service emails during lunch time, and spend mornings picking product, packaging and getting it ready to ship. If you find yourself constantly brainstorming ideas for marketing or new products – schedule time to do it once a week rather than every day.
bring in technology only when it’s needed – it’s true, tech and additional software can help streamline a process, but learning that software or implementing it can take time. If it’s a good trade off, then by all means bring on the tech, but if it’s going to take longer to learn/implement than the time it will save – it might not be worth it, at least not at this point. We find that lots of our clients have purchased software in hopes to save a buck and DIY their own taxes and monthly bookkeeping – we’ve also found that most save more money by outsourcing it to us than they ever did trying to do it themselves with a fancy software program. This isn’t always the case, but hiring an expert or specialist might be a better fit so don’t rule it out before you’ve checked into your options.
buy in bulk & subscribe if possible for repeat purchases – when your business was new, you might have saved a buck or two by buying only what you needed right then. But a great way to cut cost and time is to buy in bulk. Packaging materials or raw material you use for product/services is a great place to put this method to practice. If you’re constantly shipping goods, consider purchasing larger quantities of packing material from a supplier rather than picking up just what you need at a retail store. If you’re a service based business requires that you keep certain tools or equipment on hand (like if you’re window washer and you know you’re going to need cleaner, rags and window cleaning tools) plan to not only buy in bulk but utilize a subscription option for your products if it’s available so you don’t even have to spend time filling your shopping cart with the needed products each month.
keep a history – writing down how you do certain tasks while you do them will help you figure out what processes need or could be automated. It will also help you streamline how you attack events that happen over and over again in your business. Product launches, marketing campaigns, seasonal tasks – they’re all important but they might happen more infrequently than the day to day tasks. Keeping a history of what you did and then referring to it when it’s time to do it again will help save time and even help you pinpoint areas where you want to improve.

So what areas of your business could use a little streamlining? We’d love to hear what areas you’re going to add process automation to first!

5 Quick Ways to Get Debt Free as an Entrepreneur

Being an entrepreneur means you’re bound to take risks, even if they’re well calculated and justifiable and when it comes to running or starting a small business taking out loans or racking up debt are usually a large part of that risk. The smartest entrepreneurs we know are those that take the risks and then set up a game plan to make sure the odds fall in their favor. We’re sharing a few easy ways to get debt free quickly.

Have an Emergency Savings Fund

It may seem almost counter-productive to say that the best way to pay off debt is to save money, but we’ve found that it’s one way small business owners make sure they can survive. Setting aside, even a small amount, every month as an emergency fund means that you’ll be prepared to keep your business open and running in case problems arise. This means you’ll still be open so you can bring in an income and it also means that you’ve got cash you can use when an emergency comes up so you won’t have to rob your creditors by cutting down the amount you pay each month or not paying at all.

Always make Minimum Monthly Payments

After the emergency fund, committing to always making minimum monthly payments is the best way to pay down debt. When you’re starting a business plan to operate on the lean side right from the start. By doing so, you’ll be able to guarantee that you can make minimum monthly payments because you’ve played it safe from the beginning. Of course it’s better to pay more than the monthly minimum payment if possible, but always paying the monthly payment – and paying it on time – means you’re making a dent in the debt you’ve already accrued.

Create a budget and remove extraneous items

If you haven’t already created a budget – do it now. Not having a budget may have put you further into debt to begin with, but it’s always better to set things right now than to let them linger on. Having a budget allows you to see where the money is going each month. You may have to adjust your budget after a month or two if you’re just starting out, but having an idea of how much you spend and when is a good start to getting things paid off and knowing what you can afford.

If you’re wanting to pay off debt even faster, take a look at your budget and see where you might be able to cut back. A great place to look first would be in the petty cash and miscellaneous expenses – these are often “extras” that are easy to cut out. Then, take a look and see if you can eliminate extra cost – can you move to a less expensive plan for your phone bill or internet provider? how about cutting back on the amount of overhead you carry? do you have too many employees or too large of a retail space? Looking to cut back in every category makes you hyper-aware of what you have, and conscientious of what you really need. Even if the answer is “no, we can’t cut that” you can watch that area over the next month or two and really be able to see if that’s true.

Prioritize Debt Payments

It’s also known as laddering, stacking, or a debt avalanche, but no matter what you call it – it does the same thing. Prioritizing your debts is something that is just plain smart and incredibly useful in managing both small business and personal finances. To accomplish it, list out all your outstanding debts. Then you’ll be able to see which have the highest amounts and the highest interest rates. Now you’ll decide which debt to attack first – you can pick the one with the highest interest rate, the one with the highest balance or the one that you know you can pay off fairly quickly (this option is great for helping you to feel a quick surge of success which can fuel you to continue paying off debt!). From there the process is simple, you continue to aggressively pay the debt of your choice while paying just the minimum for every other debt you hold. Then when your selected debt is paid off in full, you roll the payments you were making there onto the next debt.

The key to this method is sometimes forgotten – for the debt avalanche to work, you need to make sure you’re covering all your necessary expenses month to month. Putting these on a credit card or not paying them at all, only increases your problem rather than helps solve it.

Increase your Income

When the debts start piling up, it’s easy to focus on what you owe rather than what you earn. Spending some time looking at ways to increase your income is one of the easiest ways to pay down debt especially when it comes to your small business. What market haven’t you tapped into, could you run a sale or promotion to drive sales, is there a product you’re ready to launch that might bring in additional revenue without raising your costs too much? Maybe you need to pick up a second job or an additional revenue stream? Looking for ways to increase your income is a great way to pay down debt – because whatever additional income you generate can be put directly to paying off your debt.

What other ways have you quickly paid down debt? Tell us in the comments.

FAQs: Getting Debt Free as an Entrepreneur

1. Why is having an emergency savings fund important for paying off debt?

An emergency savings fund helps ensure you can keep your business running and handle unexpected expenses without needing to reduce debt payments. It provides a financial cushion that keeps you from missing payments or increasing your debt further.

2. How can always making minimum monthly payments help reduce debt?

Making minimum monthly payments consistently ensures that you are at least covering the interest on your debt, which prevents it from growing. Paying more than the minimum when possible will reduce the principal faster, but maintaining the minimum payment is crucial for steady progress.

3. What should I include in my budget to help pay off debt?

Include all income and expenses, and categorize them to track spending. Look for areas where you can cut back, such as petty cash, miscellaneous expenses, and non-essential services. Adjust your budget as needed to maximize debt payments.

4. What does it mean to prioritize debt payments, and how does it work?

Prioritizing debt payments involves listing all debts and focusing on paying off one at a time, usually starting with the highest interest rate or the smallest balance. This method, known as laddering or stacking, helps reduce overall interest paid and provides a sense of accomplishment as each debt is paid off.

5. How can increasing my income help with debt repayment?

Increasing your income provides additional funds that can be used to pay down debt more quickly. This can be achieved through exploring new markets, running promotions, launching new products, or even taking on a second job. The extra revenue helps accelerate debt reduction without cutting into essential business operations.

Top 3 Business Strategies That Will CHANGE The Way You Do Business

There are many different types of consultants. Business, IT, HR, Marketing, etc. IT consultants can fix hard drives, cloud problems; HR consultants can protect you from wrongfully terminating an employee and teach you how to hire in order to get the best candidate for the job; Marketing Consultants can help you launch a product. Business Consultants offer strength in business strategy and an overall picture. Without a doubt, professional Business Consultants help clients by utilizing at least some form of these 3 analytical assessment tools: SWOT, SLEPT, and Value Chain. Below, we discuss what these are, and how YOU can start streamlining your business for success today!

SWOT (Inside your company: Strengths, Weaknesses; Inside Your Industry: Opportunities, Threats)

This analysis is often the hardest for an owner/manager to do on their own company as we are either our company’s harshest critic, or biggest fan. This analysis asks what are your company is good at and what could your company improve upon. It also asks what opportunities industry has to offer, and what threats do working inside that industry entail?

Challenge: Always remember strengths, especially when you are feeling like you just can’t get ahead. Never forget that weaknesses can become strengths when you identify and fix them. Take advantage of the opportunities in the industry you are in. Turn your threats into opportunities by doing what it takes to become first to market or research to fix the mistakes other companies have made launching their product ahead of yours.

SLEPT (Inside your Industry-Social, Legal, Environmental/Economic, Political, and Technological factors)

This tool helps to analyze the industry within which you are competing, in order to find Opportunities and Threats in the areas listed above. For example social trends play a huge role in opportunities available in an industry just based on what large percentage of purchasing target markets are wanting to pay for. Legal generally has to do with threats due to regulations of the area or industry. Environment and Economy play a huge role in whether a product or service is sustainable or affordable and if that happens to be an opportunity or a threat to the position your company is in. Politics plays a large role in what is available as tax rates either skyrocket or are given a break to business owners. Technology is either a disruption or offers an opportunity base on what industry, skills, and commitments are needed.

Challenge: Taking 5-10 mins per day for a week to read a few top articles/posts on what is going on in the world that affects your industry. This can be immensely important to staying ahead of competitors.

Value Chain-(inside your company)

This one goes a little more in-depth than the others do. It focuses on the Support Activities (what helps the business run: Infrastructure, HR, Technology, Inventory) and what’s called Primary Activities (minutia, details of how the business runs: what happens when stuff comes in and out of the company, how the product is created, what marketing and sales pieces are applied, how customers are served).

Challenge: When you are able to analyze what you are doing well and what you are struggling with in each of those areas, the next step is to take a look at the rest of your industry and even other industries. Do they have ways they have fixed those issues you have? Is there another way to perform business or support the company that will lead to lower costs and higher return on investment? Once you have made these considerations, take a look at 1-3 items your company can improve on. Open up ideas to the members of the company and get some cross functional answers. Implement changes in a steady and consistent manner.

These tools should be performed biannually, scheduled just before the annual company meeting and the 6-month check in meeting. It’s also a good idea to follow up on progress of the changes at quarterly meetings. As with any business strategy, it’s best to get a professional outside opinion, and have courage to follow through consistently on your specific goals.

How to Get a Tax ID for Your Small Business

What is a Tax Identification Number?

A Tax Identification number is the same as an Employer Identification Number (EIN). The IRS uses this number to identify your business entity, just like they use your Social Security Number to identify you for your personal taxes. Applying for a Tax ID is simple and can be done online. Don’t be fooled by companies offering to file for a Tax ID for you – it’s a simple process you can accomplish on the IRS website for free and most people don’t need any help to complete the application.

Do You Need a Tax Identification Number?

Figuring out if you need a Tax ID is just about as simple as applying for one. The IRS says that you need a Tax ID if:

your business operates as a corporation or or partnership
you have employees
you without taxes on income others than wages paid to a non-resident alien
you have a Keogh Plan (tax-deferred pension plan); or
you’re involved with organizations including:
- trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- estates
- real estate mortgage investment conduits
- non-profit organizations
- farmers’ cooperatives
- plan administrators

In addition to filing taxes you may also need an EIN to open a bank account or apply for a credit card in the name of your business. Even if you’re business entity is currently a sole proprietorship you can still get an EIN and use it the same way, although it’s only required for those businesses that fall under the details listed above.

What You’ll Need to Apply & What to Do With Your EIN

Now that we’ve established what an EIN is and if you need one, lets talk about the nuts and bolts of securing your EIN from the IRS. You can apply for an EIN by fax, phone or email but the quickest way, and the way the IRS prefers, is online. The process will take only a few minutes, but you’ll need to have the answers to a few questions beforehand:

the type of EIN are you applying for – sole proprietorship, corporation, LLC, partnership or estate
the reason why you are applying for an EIN – it can be as simple as starting a new business or banking purposes or any number of other reasons
your legal name and Social Security Number

With the online application you’ll have access to your newly generated EIN as soon as you submit your application. The IRS provides an official document that you’ll download to your computer – make sure to save this digitally as well as print a paper copy to save with your other business records.

How to Offer Health Insurance as a Small Business Owner

When it comes to running your own business – the sky is the limit. You’re in charge of your hours, the size of your business, how much you bring in as profit and whether or not you bring on employees. But even though the list of perks is long, there are parts to running your own small business that seem difficult , time consuming, and complex. Offering health insurance to your employees or even making sure you have your own health insurance because you self-employed can seem daunting. Even though it takes some time to complete, offering health insurance as a small business owner brings benefits in many ways and is well worth the effort.

Do You Need to Provide Health Insurance as a Small Business Owner?

When it comes right down to it, offering health insurance to your employees is required by law if the size of your company meets the laws specifications. At the point of this writing, whether you feel like you’re a big company or not, you are required to provide health insurance to your employees if you have 50 or more full-time employees or the equivalent. You can search for a company to provide health insurance for your small business on your own or work with a broker. Using a broker can save you time and they can help you complete the paperwork required and provide you with all the ins and outs of the plans you’re considering. however, brokers earn their living by making a commission and you’ll be footing that bill – it’s well worth it if you’re looking to make the process as easy and painless as possible but worth considering going it alone if you’re working on a budget.

Finding insurance for your business will take some money in addition to time and effort but there are benefits that come by offering health insurance to your employees.

What You’ll Need to Apply for Health Insurance Coverage Plans

Apply for a health insurance plan for your small business is similar to applying for a business loan -the company requires documents and paperwork to complete the process. Gathering these items up in advance will make the application process easier, so here’s what we suggest you gather to get started:

employer name
business address (needs to be a physical street address, not a PO Box)
list of employees to be covered (if you’re covering one full-time employee, you’re required to cover them all)
Tax ID or Employer Identification Number (EIN)
Business start date
Payroll records (this will prove that you pay out salaries over $50,000 as stated in the law and also will help come tax time)
Industry Code (SIC)

You’ll also want to pull together information on your employees because you’re looking for group coverage. The health insurance company uses this information to decide on premiums and other costs to match your employee risk levels. Information to include here are:

names
ages
number of dependents
zip codes

How to Figure Out How Much Coverage You Need

Once you’ve decided if you need to legally offer health insurance, whether or not to use a broker, and have gathered up the necessary documents and information, you’ll also want to spend a few minutes looking at your financials to be sure you know how much you can spend. Now is a great time to check in with your accountant or bookkeeper if you’re not sure how much money you’ve got available for this. If you’re going it alone, you’ll need to consider the number of employees you have, how much you pay them, and how much you can afford to pay per employee each month for health insurance. The answer varies based on company but if you’ve got more questions, we’re more than happy to answer them.

How Offering Health Insurance Coverage Benefits You as a Small Business Owner

We’ve given you the details of why and how and now it’s time to let you know how offering health insurance as a small business owner can bring you big benefits. Here’s our list:

you can qualify for a tax credit(up to 50% of your contributions based on the specifics of your business) – to do so you need:
- fewer than 25 full-time employees or the equivalent based on working hours ( this is where paying attention to those that work part-time comes into play
- pay salaries of less than $50,000 per full-time employee, on average, each year
- front at least 50% of the premium cost of the small business health insurance
you can write-off health insurance premiums you pay as tax deductions – saving even more money
with a little bit more paperwork, you can set up your small business health insurance so that your employee can pay their portions of the premium with pre-tax money – that means they save cash and are more satisfied making it a win-win!
employees that have health insurance are more likely to go to the doctor when they’re sick and get yearly checkups – they’re healthier and that means less sick days and more productive employees

Now it’s time to start shopping for health insurance plans!

5 Ways to Attract Your Niche Market

If you’re running a small business or are looking to jump in and start your own venture, understanding how and why you need to attract your niche market will help make your business a success. Sure there are lots of moving parts to a successful small business, but without a clear picture of your potential client and how your product or service will help them, you’ll find it hard to make many sales. Today we’re covering the 5 top ways to attract your niche market and why it’s so important to do so.

First, lets talk about what a niche market actually is. A niche market is a subset or smaller group of a market with it’s own particular needs or preferences. You can define your niche in many ways but doing so makes the marketing process far easier and much more effective because you’re tactics should should speak to the needs and wants of your market and help them solve a problem. Here’s an example:

Lets say that you’ve got a great idea for a window cleaning business. Because your business is fairly new and you’re working on building your clientele, you’re willing to clean anybody’s windows, but that’s a huge market. So lets break it down based on the types of windows you might be willing to clean – residential, office buildings (this can be broken down into 2 categories or more – skyscrapers downtown, smaller office complexes, or even strip malls, etc.), restaurants, interior windows like in a mall or larger office complex, and so on. To break it down further, you might also want to define a geographical area – your small business is based in your hometown, so picking up a client that wants their windows cleaned in the neighboring state or even 3 states over isn’t your ideal audience, at least at first. Once you’ve narrowed down your niche, you’ll be able to figure out their needs, wants, and problems to be solved and can then market and cater your services and products to them, here’s how:

Pick a Unique Group

There are plenty of niche markets out there for everyone, but you’ll want to make sure you’re selecting one that doesn’t already have too many players offering your product or service. For example, you may have a dream to open up your own snow cone shack. It’s a great idea and could be rather profitable, but take a look around first. If you reside in a hotter climate or a beach town you may already have quite a few snow cone shacks in the market. That’s not really a problem, just look to see how else you can define your niche – maybe it’s by looking at the geography of it all and finding the one spot in town that needs a snow cones but doesn’t have them, or maybe your product quality is something that differs – you offer umbrellas, fancy straws, color changing spoons, and a variety of creams toppings with your snow cones.

Whatever you do, make sure you’re not just jumping into the “me too” niche because if there are too many players already the odds of being successful aren’t as high.

Address a Problem

It seems like defining a niche should be enough when it comes to marketing, but streamlining your message is going to help in growing your sales as well. Once you’ve defined the group you’re hoping to sell to, it’s time to look at how your product or service can help solve a problem that group has. You may not have a huge budget (or any budget at all!) for market research to start. Don’t worry, figuring out the needs, wants or problems to be solved for niche groups isn’t as bad as it sounds. If you can find a couple of people that fit your niche to talk to you’re off to a great start. But even sitting down and brainstorming for a few minutes on possible needs will do the trick. You can start by asking yourself questions like these:

what type of problems do people in my niche market have? (We’ll use the window cleaning example – they may have limited budget, need their windows cleaned after business hours, have hard to reach windows, or have a security system that previous window cleaners have set off)
how will/can my product or service help? ( You offer a 3 month package or monthly deal for a lower price, your hours are extended and you work on weekends, you have equipment that allows you to reach high places, your window cleaners are trained on how to clean without setting off alarms, etc.)
which of the problems to be solved seem to be the most common? (you’ll want to choose these because they’ll speak to the largest group within your niche and attract the most clients)

Communicate Through Established Channels

This one seems to go without saying, but we’ve found that often times small businesses are so excited about marketing their products they don’t stop to think about finding out which channels or mediums for communication are best. Before you start getting your product or service out there, you’ll want to find out how those within your niche communicate or consume information. There’s no reason to pay for a TV spot if your niche market isn’t watching much TV. For the window cleaning business – a TV spot might be the right choice if you’re looking to really drill down and attract home owners, but dropping off a flyer at the local chamber of commerce, attending the next meeting of local business owners, or even stopping by local businesses might be the better choice if you’re looking to clean windows for local businesses and office complexes.

If you’re not sure what channels your niche market is using, do a little market research. It might be as simple as searching the internet or it may require that you find a few people that fit your niche and ask them for ideas.

Ask Questions, Listen & Generate New Ideas

Once you’ve got your business up and running and attracting clients from your niche market it’s time to start asking questions. You’ve done quite a bit of work already to understand your niche market, but asking questions and listening to the answers will help you generate new ideas for products and services or even come up with a way to better your existing offerings and attract more clients within your niche. Not sure how to start? Here are a few ideas on how to start asking questions of your clients:

offer a bonus for existing clients or a coupon for discounted services if they’re willing to answer a few questions
make giving feedback easy – follow up calls after a job, an email with a link to a survey, a website link at the bottom of your invoice where they can go and make comments and suggestions
periodically poll a handful of clients – tell them you’re looking to improve your service, offer new products, or expand and then tell them you value their advice and their business – you might be surprised at all the good info you get

Once you’ve gotten your feedback, make sure you sort through it and start brainstorming. You may even want to give those that provided you feedback a chance to try out the service first or a special discount for helping you.

Help Them Grow or Provide Them With Education

This seems like a stretch but we know that it’s a great way to attract your niche because we’ve used it ourselves. In our own business, we write a blog where we offer accounting advice and even explain quite a bit about what we do so that others can DIY their small business taxes and bookkeeping. That might seem like we’re giving it away for free, but we’ve found that it usually builds a relationship with potential customers before they even buy, which makes working with them even easier. We’ve also found that providing information and education our niche markets establishes us as an expert – those that give it a try and DIY it on their own have learned some new skills and they come back for more and might even buy later on. More often than not, we find that many of our niche market clients consume our blog posts and then decide to buy even if it does seem to stretch their budget a little. But lets say that a blog doesn’t work for your business or service, who’s ever heard or read of a window washing blog (we’ll use our own example), right? You could:

leave a flier or send an email about how to extend what you’ve just provided them with – for the window washer, we’d suggest a flier that gives a few ways they can keep their windows cleaner for longer, etc.)
teach a class – this can be online or even on a special day
sell your products – it might seem like you’re giving up a job but if you offered special microfiber clothes and your cleaner that helps repel dust for clients to use between visits you’d be making more cash with selling your products and still be keeping the job to do the deep cleaning
ask your clients what they’d like to learn or how you can help
create a social media account that offers helpful tips and let your clients know

What other ways are you attracting clients? We’d love to hear about it in the comments below.

Frequently Asked Questions

1. What is a niche market, and why is it important for my small business?

A niche market is a specific, smaller segment of a larger market that has distinct needs, preferences, or interests. Identifying and targeting a niche market is crucial because it allows you to tailor your marketing efforts to address the unique needs of that group, making your campaigns more effective and efficient. By focusing on a niche, you can better understand your potential clients, improve your product or service offerings, and reduce competition by catering to a specific audience.

2. How can I determine if a niche market is too competitive for my business?

To assess the competitiveness of a niche market, start by researching existing businesses that offer similar products or services. Look for the number and size of competitors, and evaluate their market presence and offerings. If the market is saturated with many established players, consider finding a unique angle or differentiator for your business, such as a specific geographical area, unique product features, or exceptional customer service. This can help you stand out and increase your chances of success.

3. What are some effective ways to identify the problems or needs of my niche market?

Identifying problems or needs within your niche market involves several strategies:

Conduct Direct Research: Talk to potential clients within your niche to understand their challenges and requirements.
Survey Existing Data: Look at industry reports, online forums, and reviews to gather insights into common issues faced by your target audience.
Brainstorm Solutions: Think about how your product or service can address these problems and prioritize the most common or pressing needs to appeal to a broader segment within your niche.

4. How do I find the best communication channels to reach my niche market?

To find the most effective communication channels for your niche market:

Conduct Market Research: Determine where your target audience spends their time, whether online or offline. This might include social media platforms, industry-specific websites, local community boards, or trade shows.
Engage with Your Audience: Directly ask current or potential clients about their preferred communication methods.
Monitor Competitors: Observe how other businesses in your niche market are successfully reaching their audience and consider using similar channels.

5. What are some ways to gather feedback from clients and use it to improve my business?

Gathering and utilizing client feedback involves:

Offering Incentives: Provide discounts or bonuses to clients who complete surveys or give detailed feedback.
Simplifying Feedback Mechanisms: Use follow-up emails, online surveys, or feedback forms to make it easy for clients to share their opinions.
Regular Polls: Periodically ask for feedback on services or products to stay updated on client needs and preferences.
Implementing Changes: Analyze the feedback to identify common themes and make improvements based on client suggestions. Consider acknowledging and rewarding clients who contribute valuable insights to foster loyalty and engagement.

How to Define A Niche Market & Why It’s the Best Thing for Your Small Business

Odds are that even though you run a small business, you’re not a professional marketer or some type of marketing guru – unless, your business is marketing and then this post probably doesn’t apply to you. But for the rest of us hustlers and small business owners, learning everything we can about marketing is going to make growing and promoting our small business that much easier and that’s a win in our book. Today we’re talking about niche markets – what a niche market is, why you might want one and how to define a niche market for your business.

Lets get started.

What is a Niche Market?

A niche market is a subset of a larger market with it’s own particular needs and preferences. Often times you’ll hear marketers talk about market segments and although that’s similar to a niche market it’s usually more generic in purpose meaning that we segment by age, gender and so on. These same segmenting tactics are used in defining a niche market but they help us to pinpoint a group of people who are not only similar in general but also in specific details. For example:

Segmenting a market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags

Defining a niche market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags AND they also want a stylish boutique-level diaper bag that keeps them highly organized and falls within a moderate price point.

Basically, defining a niche market is drilling down until the particulars are highly defined making it a super-powered version of segmenting.

How Do You Define a Niche Market?

Defining a niche market really isn’t as difficult as it may sound or look. To do so, you’ll take any current market segments you have and then take it one step further. Some of the most common ways to define a niche include:

geographic (the buyer’s precise location – this can be a physical location or it can be a way to purchase – big box store, farmer’s market, craft fairs, holiday boutiques, etc.)
price (high, moderate, discount)
demographic (gender, age, income level, education level, employment, etc)
quality of goods (premium, high, moderate, low, cheap)
psychographics (values, interests, attitudes)

Remember a niche market is a subset of a larger market or market segment that has particular needs and preferences. While you’re looking to drill down to your niche market with the items bulleted above, you should also be asking yourself what the needs and preferences of this particular group are. You want to figure out what problem you can solve for them, or what need doesn’t seem to be being met by other products that are out on the market. This will help you target your niche market and outline the ways you’ll promote your product or service to them – by helping them with a problem or fulfilling a need!

Tip: Once you’re drilled down and gotten the specifics on your niche, the best way to define a niche is to basically write up a potential buyer profile. It sounds a little intense to make up a bio for an ideal customer, but we’ve seen it work dozens of times. An example would be:

Heather is a young mom who works part time. She has 2 small children – Sarah (2) and Aiden (6 mos). She’s at work a few hours every day so she drops her kids at a babysitter in the morning. She loves working out, so the kids also get to hang out with friends athlete gym play place why she works out 4 times a week. In addition, Grandma watches the kiddos on Friday mornings while Heather is at work, because that’s her babysitter’s day off. Heather is extremely organized and she’s a great mom because her diaper bag always has a change of clothes for each child, extra diapers, snacks, any medications they may need, and a variety of small toys or educational activities in case the kiddos need a change of pace. In addition, Heather loves high style, and because she’s often out and about with the kids she’d like a diaper bag that displays a sophisticated look but still is made of child-friendly fabrics so that it’s safe and effective for the kids. She’s looking for a superhero diaper bag – stylish for mom, organized so that everything has it’s place, not to big, not to small, easy to clean, and cost effective.

Why a Niche Market Can be Good for Your Business

We’ll cut straight to the point on this one and you don’t have to look far to see why a niche market can be good for your business. Here are just a few:

it’s a great way to attract new business
great way to increase in sales
simplifies the process of promoting, pricing and distributing your product or service
lowers the cost of promotion, pricing and distribution of your product or service

What niche markets are you going to serve? We’d love to hear about them in the comments.

What to Do if Your Business is Operating at a Loss

It happens to everyone. Small businesses, entrepreneurs, and even giant corporations have products that fail, launches that never happen and spreadsheets that show tanking finances and little to no cash flows. It’s important to make smart choices but a savvy businessperson knows that even the best decision making can still sometimes lead to operating at a loss.

The important thing is to know how to come back from it.

So what do you do if your business is operating at a loss? We’ll, we’ve got 3 simple answers – but first lets talk about what operating at a loss really means.

How do I know if my business really isn’t making money?

Simply put, your business is operating at a loss if you’re spending more money than your business is bringing in. Most businesses, especially small businesses fall into this category at the beginning and many do so during periods of growth. Operating at a loss for a short period of time, really isn’t a problem if you’ve got enough cash flow to cover your expenses until your income starts to grow.

In fact, you’ve probably heard experts or even other entrepreneurs talk about cash flow problems – which is just a business-like way of saying they’re short on cash or that their money is tied up in product, office space, and equipment. The real issue comes when you operate at a loss for too long – but how is a small business owner or entrepreneur supposed to know when that is?

Well, if you projected start-up costs as you started out there shouldn’t have been many surprises on what your business was going to cost. If you did project start-up costs, you hopefully also put together a cost analysis that includes the general cost of rolling out your product/service or starting your business. In that same line of thinking you should be looking to estimate or project the number of sales you’ll be making. Where those 2 lines cross will be your break even point (where the income from additional sales is profit as opposed to covering the costs you incurred while setting up your business).

Understanding the technical side of things is good, but focusing on how you can bring in more cash flow is the best thing you can do.

So what do you do if your business is operating at a loss? We’ve got 3 simple answers.

No. 1 – Reduce Your Expenses

All businesses, even those that are strictly service-based or online, have some business expenses. One way to help free up some cash is to go back through your operating costs and see if there are places you can eliminate the expense or at least cut back significantly. Keep in mind that while cutting costs is an effective way to loosen up your cash flow, you won’t want to cut back so far that it’s difficult to do business or handicaps your abilities to provide quality service and marketing of your product.

No. 2 – Increase Your Sales

Before we talked about that line on your start-up projects that estimated the number of sales (and the associated revenue) you thought you’d bring in. When you’re tight on funds, looking to increase your sales is always a surefire way to increase your bottom line. Taking a hard look at your projected sales numbers will help you decide a couple of things:

whether or not you can do a promotion to drum up sales an still bring in more cash
if you’re hitting your sales goals and if those goals need to be raised to insure a steady cash flow
if you need to adjust the price of your product or service

If you’ve got employees, it might be the right time to introduce a little friendly competition and award the winner with the most sales a special prize – which may even be the bragging rights of having the top numbers or a coveted parking space.

No. 3 – Seek Advice from an Expert

We live in a world where the DIY approach is becoming more and more common. But there are times when seeking expert advice will make things simpler in addition to making sure they’re the best long term strategy. When it comes to operating a business at a loss, seeking expert advice from your accountant will ensure you’ve got all the financial answers you need. In addition, they’ll be able to help you turn your finances around so you’ve got more cash flow and even help you figure out what deductions you can take come tax time.

Remember, it’s normal to have cash flows be slow or even non-existent at first. Just keep up the good work and make sure you’ve got a handle on your sales numbers, your operating costs, and how they effect your bottomline.

Have more questions about operating your business on a loss? Send us a note – our experts are more than willing to answer your questions!

FAQs for Operating at a Loss in Business

1. How do I determine if my business is operating at a loss? Your business operates at a loss when expenditures exceed income. It’s common initially or during growth phases, manageable with sufficient cash flow until income increases.

2. How can I gauge when operating at a loss becomes problematic for my business? Monitor your start-up costs, project expenses, and sales estimates. Recognize your break-even point where additional sales generate profit, not just cover initial costs.

3. What strategies can help a business dealing with a loss? Reduce Expenses: Assess and cut non-essential expenses without hindering operations or service quality. Increase Sales: Revisit sales projections, consider promotions, adjust prices, and foster healthy competition among employees to boost sales. Seek Expert Advice: Consult with an accountant or financial expert to strategize, manage cash flow, and identify potential tax deductions.

4. How vital is it to focus on increasing cash flow during a loss? Increasing cash flow is paramount. Balancing operating costs and sales figures aids in ensuring financial stability and sustained business growth.

5. What should I do if my business continues to experience slow cash flow? Persistently manage sales figures, operating costs, and seek expert guidance to optimize finances. Maintaining vigilance helps weather initial challenges in business operations.

How to Calculate Start Up Costs for Your Small Business

Running a business takes work, but it’s not always as hard as it looks. We find that most new business owners are often hesitant because they’re not sure what start up costs will be, not to mention how to figure out when they might break even or what’s all involved in making sure their business is profitable.

Today we’re sharing the same info we provide clients who are starting a new venture. They’re general rules of thumb but they’re a great start to figuring out what the start up costs will be for your small business.

Why knowing what it will cost helps you in the long run?

It seems like calculating start up costs is only for those that are risk adverse, but we’ve seen time and time again that those that figure out these start up costs, rather than those who just grab their business loan and start running, are more likely to be successful.

Totaling up the start up costs of your business helps you have a handle on your finances (and as accountants we think that’s a pretty good idea). Here’s how knowing your start up costs will help you:

you’re better able to estimate profits
you can secure loans – banks want to know the nuts and bolts of how your business will run
save money with tax deductions – knowing your costs will help your accountant (or you!) come tax time
you’ll be able to figure out when your business will break even and project profits

So what all goes into calculating your start up costs? We’re glad you asked.

Define Your Business Type

This sounds like something that you should be doing to figure out what licenses and permits you need. But it also plays into your overall business costs. When it comes to business type there are essentially 3 different categories. What category you fall under helps you figure out what expenses you’ll need to consider. The 3 general categories are:

Brick and mortar
Online
Service

And the general expenses you’ll need to consider are:

office space
equipment and supplies
communications
utilities
licenses and permits
insurance
lawyer and accountant
inventory
employee salaries
advertising and marketing
market research
printed marketing materials
making a website

Start Shopping Around

Once you’ve decided what business type your side hustle fits under and you’ve made your list of possible expenses, it’s time to start shopping around. You won’t be buying anything just yet, but it’s good to start pricing out what it all will cost. Check into plans for utilities, estimate rental payments for office space and equipment, and check into the cost of internet, phone, and printing your marketing materials.

Tip: A hidden cost includes hiring the individuals to help you with marketing, design, finances, legal, etc. It’s possible to do these tasks on your own, but it may not be worth your time. If you’ve got friends who already run small businesses ask them for advice – they may have some great recommendations on who to hire or even suggestions on how you can decrease your costs with DIY options.

Grab Your Calculator

If you’re into planning, you might want to sit down at a computer and work up a spreadsheet that shows costs by month. If not, you can leave that to your accountant or bookkeeper and just grab your calculator or put pen to paper. Here’s where we start totaling up numbers to provide you with a general estimate of your start up costs.

Tip: To keep things organized, split your expenses into 2 groups – monthly expenses and one-time expenses. One-time expenses are things that are only needed once, like buying equipment or hiring a designer to create your logo and business cards. These expenses can usually be deducted for tax purposes – SO SAVE YOUR RECEIPTS! Monthly expenses are employee salaries, utility bills and rent on your space. Count at least 1 year of monthly expenses when you’re tallying up your start up costs ( if you can afford to add in more than a year – all the better).

Making Connections To Start Your Business

If you’re taking on a larger venture, just dipping into your savings or taking out a personal or business loan probably isn’t going to cover your start up costs. Here’s where you’ll use your business savvy to make connections with investors or secure a loan with the bank. Having your projected start up costs organized will make you look professional and on top of your game, not to mention it’s proof that you’ve got your ducks in a row and that makes investors feel comfortable.

Tip: Create a formal presentation of your start up costs as well as include the spreadsheets to those that you’re hoping will invest. Keep things clear and simple. Most investors and loan officers want to see start up costs and then compare those to projected revenue before making their decision.

Now that you’ve got a general idea on how to calculate start up costs you’re ready to start planning. Happy small business starting!

FAQs about Calculating Startup Costs for Small Businesses:

Why is knowing startup costs important for long-term business success?

Understanding startup costs provides clarity on financial obligations and helps in estimating profits, securing loans, maximizing tax deductions, projecting break-even points, and planning for profitability, contributing to overall business stability and success.

What factors should small business owners consider when calculating startup costs?

Business owners should consider expenses related to office space, equipment, utilities, licenses, insurance, legal services, inventory, salaries, advertising, marketing, market research, and website development based on their business type (brick-and-mortar, online, or service).

How can small business owners obtain accurate cost estimates for startup expenses?

By researching and obtaining quotes from vendors, service providers, and suppliers for various expenses like office space rental, equipment purchase, utilities, communication services, and marketing materials, business owners can compile accurate estimates of startup costs.

What’s the significance of organizing startup costs into monthly and one-time expenses?

Categorizing expenses into monthly and one-time helps in budgeting and tax planning. One-time expenses, like equipment purchases, can be deducted for tax purposes, while monthly expenses, such as salaries and utilities, provide insights into ongoing operational costs.

How can having well-organized startup cost projections benefit small business owners seeking funding?

Well-organized startup cost projections demonstrate professionalism and preparedness to potential investors or lenders, instilling confidence in the business’s viability. Clear presentations of startup costs and revenue projections enable investors and loan officers to make informed decisions regarding funding.

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Author: Jake Snelson