VirtuaClass

One of the more common mistakes a small business owner can make is that of co-mingling personal and business funds. This mistake could potentially cause an LLC or corporation to lose its “liability” veil, thereby allowing a creditor the opportunity to come after a business owner’s personal assetts. The easiest way to fall trap to this mistake (of co-mingling funds) is by failing to get a separate credit card for your business expenses. Just think about all of the little expenses you do or will incur, which must be paid be credit card, i.e. domain name registration, site hosting fees, etc.

Using a dedicated credit card for business purchases also makes it easier to itemize expenses for accounting purposes, and helps to build “credit” for your business. Many business owners also find that use of a cash back credit card allows them to save up to 5% on many company expenditures.

Of course, the disadvantage of acquiring a business credit card is the potential of its abuse. To be an effective financial tool the credit card must be managed properly. Here are a few suggestions for effective money management:

1) Most important - You must avoid late payments! All advantages of business credit card are quickly over shadowed when high interest rates and late fees plague a business owner.

2) Do not sign up for too many cards in an effort to take advantage of some special offer. Opening up too many lines of credit can have a negative effect on your credit score.

3) Don’t use the cash advance feature. Cash advances come at the cost of high interest rates and heavy fees.

In sum, be moderate and responsible! I would also advise that you really shop around too find the right credit card; one with a helpful reward, low interest rate, and user friendly terms. There are many informative credit card comparison sites online, which can help to make the research process fairly fast and easy.

As you may know, many companies are now extensively using the power of blogs to drive traffic to the web site. One of the opportunities blogs provide is to key in on long-tail keywords, which may not justify their own web page. The blog gives web masters the ability to go after a not-so-often-searched-for long tail keyword phrase like how do I back up my blog.

So for all of you VirtuaClassers here are several tips to keep in mind when blogging:

Make sure your headlines include some link-bait-
What is link-bait you ask? Useful or entertaining web content which compels users to link to it.

Make sure blog content is unique, researched, and engaging-
These three adjectives really separate articles which rank and get traffic from those that do not.

Internal Linking-
Generally include one link in the top third of the article. This link of course should point to a page of your website. It is ok to have more than one link but be careful not to do over it.

Use Pictures -
The Rocky Mountain Mattress Blog www.rockymountainmattress.com/blog is a great example.

Use Videos -
Another good example for RMM http://youtube.com/user/eplanit

Include Customer Reviews -
Particularly in-depth reviews versus short testimonials make for good blog posts

Comparisons -
Compare your products or services to the leading companies or brands in your industry.

Solutions-
Every industry has associated problems, so blog about the solutions.

Back Up Your Blog-
Most bloggers are unaware that one of the risks of blogging for free with the mainstream hosting providers is that if your blog were accidentally erased, or if in the unikely event hosting was ever interrupted there would no way to recover your blog. Consider the emotional or financial loss the the blogger that under goes this type of “blog loss.” We recommend using a service like Bloggled to back up your blog.

For any small business the daily tasks associated with management of the money can be overwhelming. For most small business owners they have to deal with customers, partners, employees, marketers, and a slew of others during the course of their day and unless they hire an accounting firm to handle their finances the reality is the accounting will probably be left as the last thing on the “to-do” list. And, not only do you have to consider your business finances, but you have to also do you personal finances and accounting as well…WOW, I’m starting to get stressed just writing this.

Anyway, business account aside, I would recommend checking out a new money management program offered by Finicity.com. Finicity is a new financial social site online that aims to help users “enjoy their money” by helping them manage it more effectively. The social side of their site is excellent in allowing you to network with others, form groups, chat, and share all on the topics of personal finance. Then couple that with their award-winning household budgeting software, formerly known as Mvelopes envelope budgeting system, and you have a great solution to help you take care of your personal finances so you don’t have to stress about those anymore. If only they could offer something in the like for business owners it would be a perfect solution for both your home finances and business finances. You can see a screenshot below of their software program.

Most small business owners start out with running their business from home. An advantage of running your business from home is that you may qualify for taking a tax deduction for the business use of your home. There are several qualifications that you must meet in order to qualify for this deduction.

The first requirement you must meet is that your “office space” or the room you use for your home office must be used regularly and exclusively for your business. When you use the space “exclusively” for business you are stating that this is the only thing you use the space for. It is important to keep in mind that if you use the space for anything else, such as an exercise or TV room, it does not meet the exclusively test. If it does not meet this test you cannot take the deduction.

However, there are a few exceptions to this rule. The exception you as a small business owner would find most valuable is storage. You will be allowed to take the home office deduction even if the space is used for both personal and business storage. If you use the space for storage for your business as well as storage for personal use you will be allowed to deduct the storage space as a home office deduction as long as you do not have another principal place of business. However, you will need to allocate the space between personal and business use.

Your home office will need to meet at least one of the following criteria in addition to the “exclusively” test in order to qualify for the deduction; your home is your principal or main place of business, it is a place where your customers meet with you in the normal course of your business, or it is a separate structure that is detached from your home that you use exclusively for business.

To figure out the percentage of your home expenses you can take as a deduction you take the total square footage for the area of your home you use exclusively for business, including any storage space you may use. Divide the total square footage of the area of your home used exclusively for business by the total square footage of your home. This number is the percentage of business use of your home. This is the figure you will use to calculate the amount of expenses you can deduction for your home office deduction,
You will need to divide all of the expenses incurred to maintain your home and home office for the year into two categories, direct and indirect. Direct expenses are specific expenses to your home office and are not related to any other portion of your home. All direct expenses are deductible. An example of a direct expense would be repairing a fixture that is only in the space you use for your home office. Most of the time you will only have indirect expenses. Indirect expenses are the expenses that will benefit your entire home such as utilities and property taxes. These expenses will be multiplied by the percentage of your home used for your home office and be allowed as a deduction.

To date, there are 38 states which have laws regulating unsolicited commerceial email (”spam”). Although, each state’s law is ‘unique’ as there is no uniform state law, the majority of the anti-spam statutes prohibit false or deceiving information in the message subject line. Many of the states also proscribe the sale of software designed solely to misrepresent the point of origin or routing information of an email message. There are also “must do’s” such as labeling requirements for adult content.

Here is a succinct list of many email campaigning do’s and dont’s;

• Failing to provide an easy “opt-out” option
• Sending messages to those who have already opted out
• Including false or misleading content
• Including false information in the header (source, path, subject line)
• Failing to include :ADV as the first item in the header
• Use of another internet domain name without permission
• Violating e-mail service provider policies

To determine whether your state has an Anti-Spam statute visit the National Conference of State Legislatures website here: http://www.ncsl.org/programs/lis/legislation/spamlaws02.htm.
For more information related to Spam laws, including details on the national CAN-SPAM Act please attend our next VirtuaClass presentation of Internet Legal Compliance.

I typically get asked by my clients, “How do I reach my target market better through the web?” My reply is usually one that sparks a huge task for the client, but at the end, they find they not only have a “target market” but actually several other targets contained in that single target market. Let me explain….

Let’s say you are a website selling quality every day makeup products. At first glance most would assume their target market is women. But let’s break that down a bit further. You could very easily have younger ladies looking to purchase your products; you could have senior women looking to purchase your products. How about those women in the north vs. the southern more humid regions? What about the men who are looking to purchase a gift card for their lovely ladies? You see where I’m going with this.

The wonder of the web is that you literally could have x number of consumer pathways to address the specific needs of each of these “sub-target markets”. For example you could literally ask your visitors on the home page what their age is? WHAT?!?……no just kidding. I don’t think I’d ever recommend a site geared towards women to ever ask their age or their weight. However, you could create imagery to associate a product line, which is for the younger crowd vs. a more senior one. If you have a photo of a gracefully aging elderly lady on one side, with “So and So’s Silver Line of Products”….chances are the visitors to your website who are senior in their years will look at the photo…say she looks great for her age….and then proceed to that section of your website. In that section you could show photos of an elderly generation of women, speak in terms they associate with, speak/show how your products rise above the rest, and then hopefully make a sale. Your “teen line” of products could almost be the same pages, just replace the photos and the content with what younger teen-aged girls would associate with. You now have 2 specialized ’stores’ within your single store and have just increased your chances of converting 2 very similar….yet very different customers.

This is much more difficult for a brick and mortar store to achieve, and one you can do fairly easily. So now go take a piece of paper….draw a circle….put some smaller circles inside of it and break up your target market into more segments based on age, region, gender, race, etc. Then see how you can modify a few sequence of pages on your website to cater to them. So have fun!!!

You always hear people talking about the importance of using social media sites like MySpace, Facebook, Digg and Stumble Upon (just to name a few) because there are literally thousands of social fronts to become a part of use for marketing purposes. I would suggest sticking with the ones that are fairly bigger and more well known until you really understand how social communities work.

I often get asked about how to really market on Facebook because it is so centered around college kids, and just does not have the normal feel of other social media websites. Also, Stumble Upon seems to be difficult for some to grasp (when it comes to marketing opportunities) My suggestion is simple and has two parts.

1. You need to do a better job with your Facebook profile page and letting people know who you are, what online communities you are a part of, and what websites are yours. For example, Facebook gives you opportunities to include what are called “mini feeds” that will automatically update your RSS feeds that you want to include. This gives you an amazing opportunity to get your blog posts, products, content and whatever else in front of all the Facebook users (and friends you have made) that come across your profile.

2. Target the right demographics by taking advantage of the advertising programs Facebook and Stumble Upon offers. Many do not realize the amazing advertising program right in front of you on these sites. If you click on http://www.facebook.com/ads and http://www.stumbleupon.com/ads you will see the advertising programs, but what you may not know at this point is that they will allow you to target specific genders, ages and pretty much anything else you want to. Why is this a big deal? Think about this, if you are selling baby goods and products for infants, then you can target women ages 18 - 35 (or whatever you want it to be etc) but you get my point, you can target the specific people that are most suited for your products, or whatever you are offering on your site.

This is probably one of the best marketing avenues (or methods) that you could pursue if you are trying to market on these two sites. They are pretty cheap too, because both advertising programs start at 5 cents a click. Talk about some amazing cheap traffic that is about as targeted as you can get.

I would also suggest that you make sure to build up your profiles on each of these sites including adding friends, voting for the stuff they like and take advantage of all the features these sites have to offer. You will be more successful with your social media marketing on Facebook and Stumble Upon by using these marketing methods mentioned above and to really know if you are seeing results you need to make sure you have a great web analytics software installed so you can actually track your traffic instead of relying on what they are telling you, or what you are assuming.

It amazes me how often when talking to a small ecommerce business owner they can never answer my simple questions about web analytics. I might ask a simple questions like “how much traffic are you getting?”, or “have you logged into your analytics lately to see where your traffic is coming from?”…and nearly always the response I get is a blank stare and a I don’t know. These are business owners that either don’t have a clue, or don’t know the importance of a great analytics software.

A business owner that was in the know could respond to those questions very easily with something like, “we average about ### visitors a day, and most of it seems to come from Google because our main keyword phrases are blank and blank.” First thing first though, you have to install a software and know where to log in to check your data. Once that is done it’s as easy as checking your email and you’ll be an in-the-know business owner.

A great web analytics software will tell you information such as: total visits, unique visitors, entry pages, exit pages, route traveled, referring URL, searched keyword, visitor computer platform, browser, and a wealth of other valuable information. This would be like if you owned a local store in your area that sold ski equipment and every time someone walked in they filled out a form saying where they came from, why they came, what they are looking for, what isles in your store they were going to walk down, etc. No one would fill that form our cause it would take too long, but they instantly give all that information to you online. Why not them make use of it and better optimize your site and your conversion by studying the data and making changes to improve. Exactly how to do that is a whole different post, but here are some programs I recommend that I have used.

Google Analytics: This is a free program that anyone can use and is simple to sign up for and install. While I still use Google Analytics I have noticed some inaccuracies in the data and so I don’t fully trust it. Although for a free program, you can’t beat it.

Mint: Mint offers a relatively inexpensive analytics program that shows you the much-needed data you want. It has to be installed server side so you need full access to your website. It always shows the data in a slightly sexy manner compared to other softwares out there.

Omniture: If you are looking for the best of the best web analytics software then you will find it with Ominture. Based off of my research and use, Omniture is the best and has the most trusted accurate data on the market, although you’ll pay a hefty price tag for it.

If you’re reading this and thinking, “do I have a web analytics software installed”, hopefully I’ve given you enough info to get filled in on the subject. Good luck and happy data mining!

An Interview with Terrence Campbell

Background:

Terrence Campbell serves as the Chief Marketing Officer for Privacy Wear, a clothing company recognized for its philanthropic policy to return 10% of all sales to breast cancer research and organizations.

Privacy Wear’s story is certainly a touching one that showcases how a company dedicated to give back found success along the way. The company’s CEO, Carolyn Jones, lost her mother to breast cancer. As an entrepreneur, Jones wanted to find a way to pay tribute to her mother’s memory while making a difference in the search for a cure for breast cancer.

The company maintains an established unique selling position focused on, 1.) giving to breast cancer awareness programs year-round, and 2.) directly addressing the “lack of attention to detail in the fit of premium and young contemporary denim.”

Goals & Objectives:

Identifying and discovering a company niche
Defining an effective unique selling position
Effectively using the press
Establishing strategic alliances
Developing an attitude of business persistence

We sat down with Privacy Wear’s Chief Marketing Officer for a candid look at the company’s unique success story, and to discover how their unique marketing approaches have worked outside of some of the more standard strategies.

Implementation

What is Privacy Wear’s niche, and how did the company develop that niche?

Privacy Wear’s main niche is with young, socially aware fashion trendsetters. This niche market recognizes the company’s philanthropic efforts and unique clothing fit. From its inception, the company’s core audience has been breast cancer supporters, which Campbell says “has supported us and continues to support us throughout the years.”

What is a unique selling position, and how does Privacy Wear use that position?

The USP should answer the question “‘Why should I do business with you instead of your competitors’” For Privacy Wear, a two-fold USP includes the company policy to donate 10% of all sales to non-profit breast cancer organizations and the attention to detail in the fit of its denim clothing. In fact, Privacy Wear found that it is the only company to give back such a considerable amount on every sale to breast cancer awareness.

What about media coverage? How can companies use the press to succeed?

Recognize the formula that goes into capturing the attention of the news media, and use it. When an event or subject has significant impact on or importance to large audiences, it is generally considered to be newsworthy. For Privacy Wear, photos of high-profile celebrities such as Eva Longoria wearing their clothing have been used to capitalize on press coverage.

What is a strategic alliance?

Campbell described the strategic alliance as “anytime two or more parties undertake an economic activity together.” Privacy Wear uses “in store marketing” strategies and other joint ventures. The company partners with other companies, individuals, and organizations in working relationships that benefit both entities.

Did Privacy Wear just get lucky? Or did business persistence pay off?

In the company’s early days, the Privacy Wear team passed out t-shirts with the company name printed on the front with persistence, and by the time their Website launched with basic t-shirts and hats, the company had already developed a loyal customer base. The t-shirt story “illustrates how we built our business and continue to build our business.” The company maintains the concept that a company should “never be to big to grow your business.”

Results

So how well have all of these strategies worked?

Privacy Wear’s unique marketing approach has helped it garner an image with virtual celebrity status. Many well-known celebrities proudly wear and showcase Privacy Wear attire in public, further establishing the company’s image and success.

Often people believe that a contract must be in writing in order for it to exist or for it to be enforceable. Although, it is probably best practice to reduce your contractual agreement to a writing, this is not required in most instances. However, under the Statute of Frauds, six types of contracts must be written and signed. These contracts include:

1. Contracts in consideration or marriage
   1. This applies to your typical premarital contract
2. Contracts which cannot be performed within 1 year
   1. For example, some large construction projects can take up to 5 or 10 years in order for the structure to be complete and the contract to be fully performed.
3. Contracts for the transfer of an interest in land
   1. Real Estate contracts, purchase agreements, etc.
4. Contracts by the executor of a will to pay a debt of the estate with their own money.
5. Contracts for the sale of goods over $5,000.
   1. This applies to the entire contract. For example, if you are selling skateboards at $100 dollars each, then most of the time you won’t need a written contract for it to be enforceable. However, if a certain buyer wants to buy 51 skateboards (making the total purchase price $5,100), then the contract must be in writing for it to be enforceable.
6. Contracts in which one party becomes a surety (acts as guarantor) for another party’s debt or other obligation
   1. Co-signing on a car, loan, home, etc.

Although, by law these six contracts must be in writing to be enforceable, there are other good reasons to put your contract in writing. For example, if the contractual agreement is complex and detailed, then a writing will probably be more reliable than your memory. In addition, verbal communication can sometimes be misleading and difficult. Two parties could leave a contract negotiation with different perceptions about what was decided or have some confusion about minor details. However, with a well-written contract, it is difficult for the other party to claim that they had a different understanding or expectation.