The Older Self-Employed Are Optimistic, Profitable

A recent study released by the Association of Retired Persons (AARP) gives us a snap shot of self-employment among older adults. In effect the self-employed are business owners, even if they are the only employee in the business.

The study looks at all workers 45 to 74 years of age. Of these, 15%e are self-employed. But thousands of others are poised to join their ranks. According to the study, 10% of older wage-earners plan to start a business once they retire.

Among these older entrepreneurs, men start more businesses than women, but only by a slight margin (53% versus 47%). This is proportionate to the distribution of men and women in the American workforce, where the percentage of women is also about 47%.

What is particularly striking is that encore entrepreneurship is a lifestyle chosen predominantly by whites. In more than 80% of the cases, "later-in-life" startups are begun by whites. Blacks, by contrast, account for only ten percent of these startups, and Hispanics account for a mere seven percent.

The businesses in this study were generally quite small. Eighty-three percent of them had fewer than ten employees. This accords with census data which suggests that three-fourths of American businesses have only one employee, the owner.

Of all businesses owned by people 50 or older, about 20% were begun by someone in retirement. Another 30% were launched by someone who had lost a job.

Overall these businesses are reasonably profitable. Seventy-two percent of them reported a profit in 2011, in spite of a struggling economy.

In addition, encore entrepreneurs are an optimistic lot. Only one in ten foresees the possibility having to give up self-employment because of income challenges.

As for where the self-employed perform their work, the report shows no clear preference for operating a business from home or basing it elsewhere. While the number of home-based businesses in the study was a bit larger, the split was basically 50-50.

The fuller report, which goes on to compare differing outlooks and attitudes between the self-employed and those who are salaried, can be downloaded from the AARP website.

The Marketing Pay-Off From Building a Good Email List

The business plan for every startup should include a strategy for capturing email addresses sooner rather than later.

Despite the rising use of texting and all of the grumbling about spam, email marketing done well remains a powerful tool. In terms of converting prospects into buyers, email has a higher conversion rate than search engines and social media. Significantly higher.

According to a report recently released by the Ecommerce Quarterly, conversion rates for email campaigns are 3.19%.

This compares with a 1.95% conversion rate for sites found through search engines and a 0.71% conversion rate for social media.

In other words, even with all the hype in recent years about social media, old-fashioned email is the real workhorse of online traffic conversion.

But it takes time to put all the elements in place for successful email campaigns. And the first element is an email list which serves your purposes.

For an email list to be viable as a marketing tool, it must meet three requirements.

  1. The list must be large enough for conversion percentages to work in your favor. At a 3.19% conversion rate, an email list of 100 names will not bring you much business. That's why you want to start building your email list from the very first day of your startup. It's going to be a while before your email list is extensive enough to be effective in leading to sales.
  2. The names on the list must be people who have a genuine interest in what you offer. This makes it vital to build your own email list. There are scores of companies online who will lease you an email list to use. But you have no idea how many people on these lists are prospects for your product. When you build your email list around customers and others who have expressed interest in what you sell, then you are creating an email list that will serve you well.
  3. The people on your email list must have a high level of trust in you. Since trust builds over time, start periodic emails long before your email list is long enough to be an effective sales tool. Begin building trust with the names already on your list, even while the list is limited to only a few names.

These early mailings to a limited list should not aim at making sales. Rather, your goal is to develop credibility. This means that these emails should be designed around practical, helpful information which the recipients will find valuable. Keep the email concise and crisply worded. Your goal is to condition your recipients to welcome your email when it appears in their inbox.

Starting periodic emails early in your startup also lets you practice the art of writing great email content. Most people underestimate how much time it takes to put together a carefully-crafted, truly professional email. Don't wait until vital sales are dependent on your email campaigns before honing your email marketing skills.

Owning a Business May Bring Out the Best In You … Or the Worst

In the May 2013 issue of Inc Magazine Meg Cadoux-Hershberg reports on her study of the personal impact that entrepreneurship has on people.

Her findings are summed up in the sub-title of her article: "Entrepreneurship changes people — and not always for the better."

Launching a business, she found, often reveals hidden strength in a person's character. In other instances it uncovers hidden weaknesses.

"Many people I spoke to for this column," she writes, "confessed that launching a company, for whatever reason, made them less tolerant and more competitive, rigid, demanding, and critical."

Falling In Love With Your Business

She theorizes that this danger is particularly acute for entrepreneurs who fall in love with their business or their business idea. They can be so enamored of their entrepreneurial venture that they have more affection for it than they do for their own family.

If the business then fails, they are left with nothing to dream of. Bereft of aspiration or dreams, they are less prone to put a check on a more negative, cynical, and critical side of their personality.

People who have never owned a business cannot imagine the personal stress it can create.

From my experience I've seen another side of this problem. Most people who have never owned a business before cannot imagine the personal stress involved once salaries and loan payments are dependent on cash flow.

Many business owners manage stress well. Others not so well. And when we are not managing stress well, the ugliest side of our personality tends to gain the upper hand. Unfortunately, our families are the ones most likely to experience the brunt of that ugliness.

I've particularly observed that highly introverted business owners become even more inwardly-focused when stress begins to overwhelm them. As introverts, they are given to working through issues inwardly, not in discussion with others.

But as they go inside more and more to cope with their stress, they simultaneously cut off communication with their mates and children. The family experiences it as withdrawal of interest, involvement, and even affection.

Meg's article reminds us that starting a business is a family affair, even if members of your family are not going to work in it. You can see her entire piece at Inc Magazine Online.

Do New Employees Understand the Importance of Customer Service?

Recently I went to lunch at a restaurant owned by a long-time friend. While waiting for my family to arrive, I was standing outside the front door.

Right by the entrance, just steps from where I stood, was a prime parking spot, unoccupied. But it was not empty for long. Very shortly a car driven by a young woman pulled into it.

As she locked the door, I realized that she was wearing a T-shirt that is part of the outfit for servers in the restaurant. I presumed that she must be dashing in to pick up something quickly.

But by the time my family arrived, several minutes later, she had not returned to her car. And when I went into the restaurant, she was busily waiting tables.

In fact, she was our server. And was quite good. But all the while her car was parked in a choice spot that should be reserved only for customers.

Putting Customers First

Toward the end of the meal, the owner came in, spotted us, and dropped by our table to visit. Later, as we were paying our bill, I took him aside privately and mentioned what had happened.

Business owners should never assume that new employees understand customer service

He was taken aback, to say the least. It had never dawned on him that one of his employees would take up such a preferred spot, especially since dozens of parking spaces were open in the heart of the parking lot.

He commented that she was a new employee, but did not offer that as an excuse. Thanking me, he said that he would take the matter up with her at his first opportunity.

As I said, I've known this man and have frequented his business for a long time — almost 30 years, to be exact. He has succeeded over these years because he consistently provides a quality product and friendly, exceptional customer service.

Indeed, customer service is so much second nature to him, that it did not cross his mind, when orienting this new employee, to tell her to park a short walk from the restaurant and leave the nearer spots to the customers.

Spelling Out Customer Service Standards Explicitly

There is thus a moral in this for all of us. Most people who start small businesses know that their livelihood depends on keeping every customer satisfied. For us as small business owners, customer service is almost instinctual.

New employees, however, may not have these same instincts. They may not yet be looking at their role in the business through the customer's eyes.

In our orientation of new employees, therefore, we should never assume that they are customer-minded. We should spell out our customer-service standards and expectations explicitly and in detail.

And then the employee should see us live up to these standards and expectations ourselves, so that their is no question in his or her mind that customer service is our driving concern.

Your Startup Idea Does Not Have to Be Unique

The key to startup success is not so much a unique idea as much as value-added innovation on an existing idea

There's a prevailing myth that to have rousing success, your business startup should be based on a truly unique idea.

The truth is, if you want to increase your odds of failure, start a business around an unprecedented product or service. The history of modern business is littered with the obituaries of companies who were the first to bring a revolutionary product or service to market.

Who, then, makes staggering profits from new concepts? Typically it's the second, third, or fourth company to develop products around a given concept.

Apple was hardly the first company to market a personal computer. Nor the second. Nor the third. But today only the most devoted computer buff is likely to recall the names of their predecessors.

It's Unique Innovation, Not Unique Ideas That Count

As with Apple, what makes for success is not a unique idea, but unique innovation on an existing idea. Apple succeeded because it made unique innovations in how the user engaged its product.

When Apple launched the first MacIntosh, there were other personal computers on the market which were faster, more powerful, and more robust. But none of them engaged the user in a way that closely duplicated the MacIntosh experience.

Amazon did not develop the concept of selling books. It innovated the way in which the customer bought books. Netflix did not create the idea of renting videos. It innovated the way in which the videos were actually delivered.

When looking for an idea for a business startup, therefore, don't worry about finding the right unique idea. For one thing, if an idea is genuinely unique, then there is no proven market for it. And because the concept is so novel, you must devote a tremendous amount of energy and marketing dollars to building awareness of your product and its benefits.

In an established market, by contrast, people already understand the value of your product. Now you can focus your efforts and advertising on helping them see the way in which your innovation makes the product more useful, more convenient, more cost effective, etc.

And because you don't have to expend the resources it takes to introduce a revolutionary concept to the market, you can devote yourself more intently to enhancing the innovation and making improvements to it continuously.

Don’t Wait to Get a Web Domain Name

Every year I counsel dozens of people who are putting their toe in the water of business ownership. Many of them are months or even a year or two into giving part-time effort to an idea or service that they believe has the potential of becoming a thriving business.

But it soon becomes apparent that they do not yet understand one of the cardinal principles of marketing — especially for startups: Do everything you can to build credibility early. Without credibility in the eyes of potential customers, you will never gain enough buyers or clients to make your business a going concern.

Your Business Card Should Build Credibility

How do I know that these people do not yet fully grasp the cardinal rule of credibility-building?

Encore entrepreneurs need a business card that gives them credibilityFirst, because they hand me a business card printed on an ink jet printer using relatively light-weight card stock bought in sheets of eight cards per page at an office supply store.

Both the weight of the card and the quality of the printing shout, "Not a professional operation!"

The second give-away is when I look at the email address on the business card and see that its a Gmail, HotMail, or Yahoo address. What? No web site? No domain name with a personal email address?

Again the words shout out, "Not a professional operation!" And they also shout out, "Rookie! Brand new to the business, with no track record!"

A Domain Name Says You Mean Business

When I ask these aspiring entrepreneurs why they have not yet secured a web domain name, I usually get one of two answers. Either getting a web domain is too much money. Or they are not yet ready to bring up a web site.

But the truth is, securing a domain name costs less than having a box of business cards professionally printed, even if you use one of the higher-priced domain vendors.

Second, you don't have to be ready to bring up a web site in order to own a domain name. An vendor who sells you a domain name will allow you to "park it" at no cost until you are ready to use it. But in the meantime, usually for less than a dollar per month, you can have an email address on that domain.

In the background, at the level of the technology itself, email account management is a completely different system from web site management. The same internet hosting service provides both. But you are free to use either service without using the other.

Having a domain name thus lets you have a more professional sounding — and credibility-building — email address. This email address, in turn, sends a message that you really mean business, that you're serious about your undertaking. A Gmail, HotMail, or Yahoo address says of your business venture, "I'm not real sure this will go."

Domain Age Builds Credibility with Search Engines

In addition, securing a domain name early has a hidden benefit that most people are unaware of. When you do launch your web site, there will be a distinct advantage if you have owned that domain name for quite a while. One of the factors that Google takes into account in determining how to rank a site is the age of the domain. I have domains that rank fairly well primarily on the basis of the fact that I have used them continuously for over twelve years.

So don't keep making excuses. Find that domain name today. Then create an email account for yourself using that domain.