Tuesday, February 28, 2012

Good Marketing Research Will Help to Create a Better Market Strategy

imageThis article was written by Michelle Russillo, SCORE Orange County Management Counselor

A marketing strategy will help you in define business goals and develop activities to achieve your short and long term marketing plans. Your marketing strategy is a concise description of your business’s products, anticipated sales and position comparative to the competition. Your marketing plans are the specific actions you're going to undertake to achieve the goals of your marketing strategy. Furthermore, market research is extremely beneficial; the information gathered can provide a more accurate base for making profit and increase your profit potential.

Your business will not succeed just because you want it to succeed. Determining if there is a market for your products or services is the most critical item of planning. Once you decide on your product or service, you must analyze your market -- a process involving interviewing competitors, suppliers and new customers. Knowing your market is one of the biggest factors. Write down the benefits of your products or services. Describe your company's unique selling proposition.  Answer these few questions.

· Who are your customers?

· Where are they located?

· What are their needs and resources?

· Why do your customers buy from you?

· What benefits could you offer that would entice more non-customers?

· How can you sell to more of the loyal customers?

· If you add features or services, will people pay more for them or will they attract more customers?

· Is your service or product essential in their day-to-day activity?

· Can the targeted consumer afford your service or product?

· Where can you generate a demand for your service or product?

· What areas within your market are declining or growing?

· Describe how you will position your products or services. Can you effectively compete in price, quality and delivery? What is the projected profit? In addition, define your current marketing methods.

· Knowing your competition is another​ critical step in creating a marketing strategy.

· How many competitors provide the same service or product?

· What is the overall market trend and how are you holding up in terms of market share and profit position?

· How do you really rank against competitors?

· What substitutes are there to your products and how much of a threat are they?

Measuring your marketing strategy is the next step. Measuring will let you know if what you are doing is working. Analyzing the marketing strategies helps you to figure out where the customers are coming from. Don’t keep doing the same old thing without measured results. It's about what your target audience desires and you being able to deliver before your competition. Make sure your marketing message is aimed at fulfilling that desire.

Define your target market to aid in the organization of marketing plans. Market strategy assists you in the development of critical short/mid-term goals and knowing your market's profit boundaries. Next critical element is having a budget. It is important that you have a budget developed for your marketing plan By revisiting your marketing plan and your measured results at least once every quarter, you can make revisions to your budget necessary based on your targets. Marketing is an investment, a budget is necessary. Knowing your next steps you can increase your market share and make decisions whether you will advertise, use Internet marketing, direct marketing, mobile marketing or public relations?. Make the changes based on the general economy of your service or product area.

Once you have obtained and analyzed this information, it will become the foundation of your business plan. Marketing research is important because it supports the basic assumptions in your financial projection and creates your marketing strategy. Know the changes necessary to meet your customers' socio-economic conditions. To be successful, a small business owner must know the market. Market research is merely an orderly, objective way of educating yourself about people -- your current position and your customers.

The Fourth Level of Leadership: People Development

By John C. Maxwell, in Success Magazine, March 2012, reprinted by permission

In the February issue, I wrote about the third level of leadership, Production, from my book The 5 Levels of Leadership. This month I want to acquaint you with Level 4, People Development, which few leaders achieve. On this level, leaders gain influence by developing others to become effective leaders. People follow because of what you’ve done for them personally.
Here are a few insights to help you to understand and work toward this level:

1. People development sets you apart from most leaders.
To expand your organization and its potential, focus on growing leaders. You must value their dreams and believe they are worth investing the time, effort, energy and resources needed to develop them. As you search for people to develop, look for individuals with leadership potential who are open to growth and instruction, regardless of title, position, age or experience.
Becoming a Level 4 leader allows you to serve people in a special way. To help people reach their potential, get outside yourself and adopt the attitude of speaker and master salesman Zig Ziglar, who said, “If you will help others get what they want, they will help you get what you want.”

2. People development assures that growth can be sustained.
If you want your organization to thrive without your continuous personal involvement, you must develop leaders. This is a lesson I learned after I left one organization and many things I built ceased to thrive—or in some cases, even to exist—after my exit. As a Level 4 leader, you can ensure the future of your organization when you:
• Transfer ownership of work to those who execute the work.
• Create the environment for ownership where each person wants to be responsible.
• Coach the development of personal capabilities.
• Learn fast yourself and encourage others to learn quickly.
Leadership is the art of helping people change from who they’re thought to be to who they ought to be. By helping your people reach their potential, your organization will reach its potential.

3. People development empowers others to fulfill their leadership responsibilities.
Many organizations are limited by leaders who hold leadership positions but can’t lead. Because they can’t empower and motivate, their area of responsibility suffers and their people go nowhere. There is another kind of leader who also limits an organization: the competent person who won’t share responsibility.
People development shares responsibility for getting things done. It invites people into the process of leadership, and that’s good because many things can be learned only through experience.
When established leaders focus on people development and empower others to lead, everybody wins. The first benefit comes to the people being led. When new leaders are developed, they become better at what they do and help everyone who works with them to do the same.
The second benefit comes to the organization. Every developed leader adds more horsepower. Expanding leadership also enables the organization to increase its territory and take on new initiatives.
The final benefit comes to the leaders doing the developing, because new leaders share the load of responsibility.
To empower others, leaders must set the right expectations. Level 4 leaders take responsibility for providing training, tools and opportunities while creating an environment conducive to development. The up-and-coming leaders take responsibility for their growth through their choices, attitude and commitment.

4. People development empowers the leader to lead larger.
Insecure leaders worry about their position and standing. They have a hard time investing in others because they fear someone will take their place. If you have insecurities, you must overcome them to reach Level 4.
Many leaders don’t want to share responsibility because they don’t want to lose any of their power. But when good leaders share power, it doesn’t take anything away from them. It actually gives them something valuable: time. Level 4 leaders are freed to do important thinking, envisioning and strategizing, which will take the team to the next level.
Delegating can be difficult, especially if you believe the person won’t do the task as well as you would. It’s short-term thinking to do the work yourself rather than developing others to do it, however. Here’s my test for delegating: If someone on my team can do one of my tasks at least 80 percent as well as I do, then I give him or her the responsibility. To be an effective leader, you must move from perfectionist to pragmatist.
Your goal isn’t to make others think more highly of you. It’s to get your people to think more highly of themselves. Set your ego aside so team members share their ideas. Give your team members credit so everyone shares a sense of pride.

5. People development provides great personal fulfillment.
In the organizations I have led, developing people has been a high priority. I tell the leaders who work for me, “Your job is to work yourself out of your job.” I want leaders to figure out how to do the job with the highest level of excellence, recruit a team, develop each member, model leadership, find a potential successor, train and develop that person, and empower him or her to lead in their place. They’ve worked themselves out of a job and are ready to move up to the next job.
Not only does people development bring the organization success, and them advancement, but it also gives them great satisfaction. We are most fulfilled when we forget ourselves and focus on others.
In addition, we are often closest to people when we help them grow. In the process, they often become lifelong friends.
Helping others grow and develop brings joy, satisfaction and energy to a leader. If you can achieve Level 4, you will create a sense of community where victories are celebrated, gratitude is evident, and loyalty is shared. Level 4 is the sweetest of all levels a leader can achieve.

Women’s Business Owners Conference, Friday, March 23, 2012

In Southern California, women business owners are increasingly becoming more successful. According to the Bloomberg News, private businesses owned by women have grown in numbers and hired more workers than male-owned businesses. The U.S. Department of Commerce notes that women-owned businesses have swelled in the last few years, adding revenue and jobs to the local and national economy.

Donna A. James, Chair of the National Women’s Business Council, states women now account for 35 % of total entrepreneurial activity and closing this gap further will require improving the existing infrastructure for startups, enhancing efforts to nurture innovation, and promoting high growth business models for women. Events such as.the Women Business Owners Conference can help to do this.

SCORE OC is committed to helping women business owners develop the skills to grow their business knowledge and revenues. The Women Business Owners Conference is an ideal venue for networking while discussing the unique challenges and issues related to managing a business in today’s economy. The conference offers female entrepreneurs an opportunity to hear from leading authorities how enterprises can survive and thrive in this economy as well as share new ideas and enhance their leadership capabilities. It will be an excellent opportunity to improve business skills and increase marketing insights.

Well informed speakers will address conference participants, and high-quality leadership and skills-building workshops will help women business owners to learn how to apply newly acquired skills, benefit from available expertise on critical topics for marketing goods and services and discover opportunities to win a competitive advantage. Topics to be covered would include social media, global marketing, and government contracting; among others. Local entrepreneurs will share inspiring success stories.

For more details, and to register for the conference visit:

http://www.wboconference.com/about.asp

Six Mistakes Entrepreneurs Make When Seeking Venture Capital

By Catherine Clifford, Entrepreneur Magazine, January 17, 2012, reprinted by permission

Pitching venture-capital investors to launch or grow your business is a delicate process, so you need to tread carefully. There's an art to making a successful pitch, says Aaron Levie, cofounder and CEO of Box, an online content-sharing company based in Palo Alto, Calif. He has raised $162 million in five rounds of funding and estimates he has pitched investors a few dozen times. "You should have a fully refined, bulletproof story," Levie says.

Making an effective pitch is more important than ever, as venture capital remains relatively scarce. In 2007, venture-capital firms raised more than $31 billion to invest, according to data from Thomson Reuters and the National Venture Capital Association. But they raised only slightly more than $18 billion last year. "Our cottage industry is indeed getting smaller still and that will impact the startup ecosystem over time," Mark Heesen, president of the association, said in a statement.

To take your best shot with venture capitalists, avoid these six common blunders:

1. Don't contact every VC in Silicon Valley. Blindly reaching out to VCs with a generalized pitch is not going to improve your chances of getting funded, according to Brian O'Malley of Battery Ventures in Menlo Park, Calif. Not all investors are interested in the same kinds of companies, nor do they all invest the same amount of money or at the same time in a company's life cycle.

Research the VC you plan to pitch, figuring out the kind of companies it has invested in and at what stage in a company's growth. This basic, yet useful, information can often be found on the investor's website. "If people don't display the most basic sales characteristics, then I worry about their ability to be successful as an entrepreneur," O'Malley says.

2. Don't overdo the PowerPoint presentation. Some entrepreneurs create lengthy PowerPoints that leave investors bored and with little time for questions and answers. John Backus, founder and managing partner at New Atlantic Venture Partners in the Washington, D.C., area, recommends a maximum of 15 slides for a one-hour meeting. That number of slides will take up about half the meeting, he says, leaving 30 minutes for questions. Also, make the slides as visual as possible. "We are not going to remember a list of data,” Backus says.

3. Don't disregard questions that come up. VCs will likely have questions that interrupt your presentation, and you may be tempted to hurry through them to get back to your rehearsed pitch. Instead, always answer questions as completely as possible. After all, if you secure funding with a VC, it's likely going to be a long-term relationship – and communication is key. "When I invest in your company, we are going to be married for five to seven years," says Johnathan Ebinger, investment partner of BlueRun Ventures in Menlo Park, Calif. Sometimes "it is like they are playing whack-a-mole with my questions," he says. "Let's try to have a conversation."

4. Don't exaggerate. While VCs are hunting for the next Google, Facebook or Twitter, they don't want to hear unrealistic pitches. "There are probably five companies out there in the world that have gotten to $10 billion, $20 billion, $30 billion," Backus says. "Be realistic and tell me how you are going to win." One way to make your pitch credible: Identify your potential rivals and explain your competitive strategy. "There is always competition," Ebinger says. "You have to be open to the fact that the world is going to get by without you."

5. Don't try to raise money just for the short term. O'Malley often hears entrepreneurs say they're trying to raise cash to cover expenses for a period of time, usually 12 to 24 months. But he discourages short-term thinking. Instead, he urges entrepreneurs to raise money to hit milestones, such as reaching 500,000 downloads of your software or application, hiring a vice president of marketing or signing a distribution deal. Also, raising a bit more money than you'll need is better than too little. "Of my seed investments I have made, half of them wished they had raised more money," O'Malley says. "None of the others that raised more than they needed ever regretted it."

6. Don't rush to disclose what you think your company is worth. You will need to discuss how much money you are seeking, but don't immediately share what percentage of your company's value that represents. "I have talked to a lot of my venture friends, and it turns them off when they see the value of the company" declared too soon, says Lori Hoberman, chairwoman of law firm Chadbourne & Parke LLP's emerging companies/venture capital practice in New York.

Instead of putting your estimated valuation in the presentation, allow it to come up naturally in conversation. The valuation will be “a very hotly negotiated point between you and the investor," Hoberman says. The issue usually surfaces at the end of the first meeting, she adds, when you discuss what percentage of the company you are selling for the investment.

Wednesday, February 1, 2012

New Labor Laws for the New Year

imageThis article was written by Robin Noah, SCORE Orange County Management Counselor

California Governor Jerry Brown has signed a number of new employment bills making significant changes in California employment law, requiring reviews of employer human resources policies and employee handbooks. The new laws are effective January 1, 2012, unless otherwise indicated. The three discussed in this article are considered the most significant for small employers.

Pay Notice: AB 469, the Wage Theft Protection Act of 2011, amends the Labor Code to add Section 2810.5, which requires employers to provide a written notice to nonexempt employees with specific wage information at the time of hire.

The law also requires employers to notify employees in writing of any changes to the information in the notice, within seven calendar days after the time of the changes, unless the changes are reflected on a timely wage statement or other writing required by law.

The written notice includes the rate of pay, the amount of allowances (such as meals or lodging), the designated payday, the employer’s name and any fictitious business names, the physical address and telephone number of the employer's main office, information regarding the employer's workers' compensation insurance carrier and any other information the California labor commissioner might determine is necessary. This law also increases penalties for wage violations

The Notice to Employee form can be found at www.dir.ca.gov/DLSE.

Public employers need not worry about this - they are exempt from the requirement! Most employees covered by a valid collective bargaining agreement also are not entitled to the notice (if they make more than 30% more than minimum wage).

Pregnancy Leaves: California will require more employers to continue health care coverage for women on pregnancy disability leave under a new law.

Senate Bill 299: the mandate for this bill is that group health coverage is extended for pregnancy leaves. It requires an employer to maintain and pay for coverage under a group health plan for an employee who takes Pregnancy Disability Leave, up to the entire four month duration of the leave, and under the condition that coverage would have been provided had the employee remained continuously employed.

The extension of health coverage will apply even if there is not entitlement under the federal Family Medical Leave Act.

This subject is lengthy and has many variables. It is recommended that you access the text of the bill for complete knowledge and understanding regarding compliance. Insurance Providers will be a great resource with the new mandates.

Independent Contractors: Another issue that has endlessly vexed employers, and more than a few lawyers, is whether a worker should be treated as an employee or an “independent contractor.”

Currently California uses the "California common law" test for Independent Contractor income tax withholding, unemployment insurance and disability insurance. With this test, "the most important factor in determining the correct classification is the right of the principal to control the manner and means of accomplishing a desired result". Basically, the more control the employer has, the more likely the worker is liable to be classified an employee. The www.IRS.gov web site has information regarding the process for determining if the individual is correctly classified as an IC.

The new bill SB 459 imposes a civil penalty of between $5,000 and $15,000 for each violation on a person or employer that willfully misclassifies an individual as an independent contractor. Willful misclassification is defined as avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. The penalty increases to between $10,000 and $25,000 for each violation if the person or employer has engaged in a “pattern or practice” of willful misclassification.

The law also subjects paid, non-attorney advisors to joint and several liabilities with the employer if they knowingly advise the employer to treat an individual as an independent contractor and the individual is not found to be an independent contractor.

Extra Construction Industry Penalty: California’s licensed contractors are in for extra pressure.  Any final determination of misclassification must be sent to the Contractors’ State License Board which “shall” initiate disciplinary action against the contractor within 30 days.

Employers can improve their position and protect themselves financially by acquiring information on the new laws and the relevant compliance issues. It is recommended that employers seek legal counsel as needed.

6 Ways to Engage your Customers with Video!

imageThis article was written by Pete Lisoskie, Founder, BeLocalGroup.com

Using video content to teach, build trust, and engage customers is still an under-utilized strategy with many business owners. By learning how to do this, you can quickly set yourself apart from your competition. It is relatively inexpensive to create the video content. Video can be your “virtual” personal connection to your customer, help you stand out from your competition, build your personal brand, show a product or service in action, and hold attention longer. Even more powerful is video content can be leveraged in many different through social media.

The most common question we get at beLocal Group is: How do we best use video to engage our prospective customers? Here are 6 powerful video applications:

1. Use Video to Tell Your Story: Video is a very visual and compelling way to communicate emotion about you and your company. If you are passionate about your company and its products, that comes across in your video. All you need is your computer, a webcam, and clarity in your message.

2. Content Delivery Video: These types of videos provide your prospective customer a step-by-step demonstration of your product or service so they can fully experience you prior to purchase. These videos should always end with a Call to Action to tell the customer what to do next after watching the video.

3. Testimonial Videos: These days, written testimonials are commonly mistrusted because anyone can write one, put a fictitious name on it and call it a testimonial. Video testimonials provide a real and genuine connection to the prospect. And if you prospects to think, “That’s Me,” then you have them as a customer!

4. Video Humor Goes Viral: The most heavily trafficked videos on the internet usually involve some type of humor. People love to laugh and if you can show yourself, your product or service in that light, chances are you will snag a lot of traffic to your website.

5. Before and After Videos: Showing a before and after of a product or service is a powerful way to demonstrate value and makes your product or service more believable. Customers can actually visualize how your product or service will work in their lives and you can build emotional desire at the same time which stimulates the purchase.

6. Webinars: Webinars are PowerPoint presentations in a video format with you talking about each slide. Webinars are very powerful as they provide educational marketing. They teach and inform and are rich in content.

Video doesn't have to be hard. Here are some quick tips when making your own video. Keep your videos 2 – 4 minutes in length. Your prospects are both time and attention challenged in this technical day and age. Get to the point quickly. Present one specific top per video. Make your video believable and humorous. And, no matter what, always have a Call To Action! Ask them to call, email, text. Direct them to the next step in your sales process.

Video equipment is also simple. All it takes is a video camera, a simple script of what you are going to say, and a YouTube channel.

And it's a well-known fact that video makes a website "stickier", which means longer site visits, lower bounce rates, and higher conversions from prospects to customers. While Video Marketing is just one piece of the Authority Marketing principles we use at it can be very effective in getting your business in front of thousands of customers. It’s time you chose Video Marketing as your medium to add to your marketing arsenal. Here’s to making you the Authority in your local marketplace!

Research for a Better Marketing Strategy

imageThis article was written by Michelle Russillo, SCORE Orange County Management Counselor

A marketing strategy will help you define your business goals and develop activities to achieve your short-term and long-term marketing plans. Your marketing strategy is a concise description of your business’s products, anticipated sales and position compared to the competition. Your marketing plans are the specific actions you’re going to undertake to achieve the goals of your marketing strategy. In creating both your strategy and plan, market research is extremely beneficial. The information you gather can provide a more accurate foundation for making decisions and increase your profit potential.

Your business will not succeed just because you want it to succeed. Determining if there is a market for your products or services is the most critical item in the planning process. Once you decide on your product or service, you must analyze your market—a process that involves interviewing competitors, suppliers and new customers. Knowing your market is one of the biggest factors in success. Write down the benefits of your products or services. Describe your company’s unique selling proposition. Answer these questions:

  • Who are your customers?
  • Where are they located?
  • What are their needs and resources?
  • Why do your customers buy from you?
  • What benefits could you offer that would entice more non-customers?
  • How can you sell more to your loyal customers?
  • If you add features or services, will people pay more for them, or will they attract more customers?
  • Is your service or product essential in your customers’ day-to-day activity?
  • Can the targeted consumer afford your service or product?
  • Where can you generate a demand for your service or product?
  • What areas within your market are declining or growing?
  • Describe how you will position your products or services. Can you effectively compete on price, quality and delivery? What is the projected profit? In addition, define your current marketing methods.

Knowing your competition is another critical step in creating a marketing strategy. Be able to answer these questions:

  • How many competitors provide the same service or product?
  • What is the overall market trend and how are you holding up in terms of market share and profit position?
  • How do you really rank against your competitors?
  • What substitutes are there for your products and how much of a threat are they?

Measuring your marketing strategy is the next step. Measuring will let you know if what you are doing is working. Analyzing your marketing strategies helps you figure out where your customers are coming from. Don’t keep doing the same old thing without measuring results. It’s about what your target audience desires and you being able to deliver it before your competition. Make sure your marketing message is aimed at fulfilling that desire.

Define your target market to help you create a marketing plan. Market strategy assists you in the development of critical short/mid-term goals and knowing your market’s profit boundaries. The next critical element is having a budget. Develop a budget for your marketing plan. By revisiting your marketing plan and your measured results at least once every quarter, you can make the necessary revisions to your budget based on your targets. Marketing is an investment, so a budget is necessary. Knowing your next steps will help you increase your market share and make decisions such as whether you will advertise, use Internet marketing, direct marketing, mobile marketing or public relations. Make changes based on the general economy of your service or product area.

Once you have obtained and analyzed this information, it will become the foundation of your business plan. Market research is important because it forms the foundation for the basic assumptions in your financial projection and creates your marketing strategy. To be successful, a small business owner must know the market. Market research is merely an orderly, objective way of educating yourself about your market.

The Language of Business – Why You Need to Understand Accounting

imageThis article was written by Jim Chamberlain, SCORE Orange County Management Counselor

On January 31, SCORE presented a new workshop for entrepreneurs, managers and consultants who want to learn the basics of accounting. The purpose of the workshop is to familiarize individuals who want to achieve a fundamental understanding of the most important accounting concepts.

How does a business executive know whether his company is earning profits or incurring losses? How does management know whether the company is solvent or insolvent and whether it will be solvent, say, a month from today? More importantly, how does management know when they will achieve a sustainable cash flow position and when this will be accomplished? The answer to these questions in one word is accounting. Accounting provides the critical information for making business decisions which will enable management to guide the firm on a profitable and solvent course. What business decisions could be intelligently made without the use of accounting information? Examples would be difficult to find.

All business concerns large and small, in every kind of industry, find it necessary to record transactions and prepare periodic financial statements from accounting records. As a result of attending this workshop, you will learn how to “read” the numbers for the purpose of seeing potential threats to the business that might not be apparent to the owner. You will also learn the key performance measurements that will add value to the company.

Topics covered in this workshop include the accounting equation, accounting terms, bookkeeping vs. accounting, cost accounting, financial statement preparation, analysis, ratios, journals, debits and credits, ledgers, cash vs. accrual, depreciation methods, and budgeting.

Should Your Business Go Completely Wireless?

This article was written by Heather Clancy January 6, 2012 in ZDnet,Reprinted by Permission

Summary: Before you decide to ditch your wireline connection completely, understand the tradeoffs in bandwidth, access speed and hidden costs.

I had a conversation with an IT services company in December that I haven’t been able to get off my mind, especially since I have had my share of Internet connectivity challenges in the past two months.

I was talking to this executive about whether or not software as a service was catching hold with his small-business clientele and was shocked to find out that many of his customers are resisting such a notion. Philosophically speaking, many of them don’t like the idea that they won’t “own” the application they are using. But the even bigger challenge is this: some of them — even in major, major cities — still don’t have reliable high-speed Internet access.

Yep, the next time someone in New York or California or Georgia or one of the other states where broadband Internet deployments are happening most quickly whines about spotty access or slow connection speeds, they might want to consider what it might be like if they lived somewhere in rural Kansas or Iowa or other states where progress is happening more slowly.

This particular executive, who happens to hail from St. Peters, Mo., related to me a story about how the local telecommunications company wanted one of his clients to pay at least $10,000 for a reasonable Internet connection in its new offices. The even more shocking revelation: this wasn’t some historic building that hadn’t been refurbished. This was a relatively new office building.

Which brings me to the point of this particular commentary. The severe weather in northern New Jersey over the past three months has really got me thinking about my own Internet access options. I’ve had to improvise a number of times because of wireline outages, sneaking down to the local coffee shop and library, and also relying on the mobile hotspot service that is part of my iPhone data contract. That has allowed me to tether my notebook computer in a pinch.

Back in early November, after the freak snow storm in the Northeast AND after a service person told me I needed to have all the wires in my house replaced because of squirrel damage and water leakage (I kid you not), I decided to splurge on a mobile wireless hotspot device running on a 4G network and ditch my hard-wired contract. I decided to pay for both for a month or two, before dropping my cable modem entirely.

Long story short, I am glad I waited. There are several reasons why, all of which you should consider if you’re contemplating how to get a better handle on expenses related to your Internet connection.

  • Are you impatient? One of the biggest frustrations that I have personally encountered over my experiment with cutting the cord entirely was the connection speed. I don’t care what they say about 4G, the fact is that it will be slower than your typical wired high-speed Internet connection.
  • How much data do you really use on a monthly basis? The hotspot contract that I purchased was for 5 gigabytes of data, which seems like a lot except that it really isn’t. If you have an iPhone, for example, that needs to update mobile apps with a WiFi connection, it will eat that plan up awfully fast. If you have an iPad, too, suddenly it is mid-month and you will be faced with spending $10 per extra gigabyte of data consumed.
  • Do you use a landline phone line? I wasn’t trying to angle for special pricing treatment, but when I called to cancel my cable Internet service earlier this week, with some reservations, I was surprised at how flexible the pricing suddenly became. For starters, the company lopped $20 off my monthly fee. (I don’t get any sort of special pricing right now, because I don’t watch television and don’t need that service.) Then things got really interesting. I have been thinking for some time about ditching my home office line, which I use very rarely. I had briefly considered Internet telephony but just kind of got lazy about doing the research and was vaguely worried about the cable line problems I seem to have at least twice a year because of rodents and oak trees in my neighborhood. Yet, I pay roughly $75 per monthly for monthly telephone service, separate of my cable connection. I’m changing that next week, by rolling everything together. I’ll be keeping my Internet connection and adding telephony service. Yes, I am taking a bit of a risk. Although, the line problems that I had back in November have mysteriously disappeared even though I didn’t pay hundreds of dollars on rewiring. (We’ll see if that lasts.) That will make that one bill go up by about $35 per monthly (after the set-up feel and the charge for moving my number). I’m giving it a try, despite a bit of worry over the reliability of my wiring.
  • Understand what you will really save. If you factor in the fact that I am still paying for my mobile hotspot, I will still save at least $45 per month under my new communications scenario. That is because the mobile hotspot will enable me to drop two other fees I have been paying for wireless access. If my line DOES go out again, the mobile hotspot will keep me at my desk instead of roaming around my neighborhood. And, because it can run off battery power, it is a good backup option if the power goes out.

I challenge small businesses to really sit down at the beginning of 2012 and understand what they are truly playing in Internet and mobile data access fees. Chances are, you really don’t know what you are paying because some of those bills are being paid by the telecommunications department, some might be run through your IT organization and some might be hitting your travel and entertainment budget line. That latter expense is particularly important to consider, as wireless carriers begin changing their policies for unlimited data plans.

Like me, you might be tempted to go completely wireless, but there will absolutely be tradeoffs in connectivity and the switch might not be as cost-effective as you think.