Five “Ancient” Marketing Ploys That Still Work in the Internet Age

With the advent of Internet marketing people have been quick to abandon the wide range of advertising avenues made available to them prior to the web.

While forward thinking is certainly is not a bad idea, failure to incorporate surefire, time-tested strategies into modern marketing is a failure to utilize state-of-art technology to its fullest effect.

The following are five marketing techniques that sound like they belong in the old school, but are certain to find their audience in the Internet Age:

Kitsch/Camp
Old-time salesman who huffed and puffed their sales pitch from town to town had to think of ways to catch peoples attention. This often led to eccentric character development, obnoxious paint jobs, and memorable monologues. Today this marketing ploy continues to exist in the form of viral kitsch; stuff that’s so bad it’s good. Examples include the efforts of
Vat19.com, a site dedicated to showcasing the most awkward of products via even more awkward YouTube videos, and the marketing success of the Snuggie.

Promotional Products
T-shirts with a company’s name printed on them and
custom coffee mugs remain hot items for marketing your brand. You just have to get a little creative with them. Instead of brandishing an uninteresting corporate logo, brandish a fat QR code on the side of a mug or the back of a T-shirt. That way you invoke a reaction, which can result in an action, which would obviously be people scanning these items and being taken to your website via their mobile device.

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Author: Chris Birk

Developing a Business Idea

Conventional wisdom says that your big idea for a small business will gradually develop into the exact replica of what you imagined when you came up with the idea. The reality for many business owners is that the first idea only serves as the kernel for the one that will eventually fly.

Chances are by the time you actually launch the business, your idea will be molded by market research, customer input, cost of development, and other information you learn in the research process. For this reason, it is important in the set-up stage not to become discouraged if you have to abandon part of your business idea, or even your entire idea. You will need flexibility and perseverance to keep your business afloat once you start, so applying it during the startup phase is good practice.

Unfortunately, some potential business owners abandon their ideas too easily believing that if an idea has flaws, the concept is unsalvageable. To help you avoid this trap, use the five instances of idea-roadblock listed here to determine how you can keep going if your idea isn’t perfect.

You’re hardly the first
Problem: Lots of people are already running businesses doing what you planned on doing.

Solution: Examine the field and see if there is still room for you. Often, lots of businesses cater to the same customer, but leave some small niche underserved. For example, if you planned on starting a dance studio and you find that there are already too many in town, there may be a market for someone who goes to private parties and teaches large groups of people who don’t have time to go to a dance studio. To find an underserved niche, look at the current offerings of your future competitors and think about what narrow markets you may be able to serve that they are overlooking.

Too late?
Problem: You are too late to market

Solution: Just because other companies beat you to market doesn’t mean you won’t be successful. In fact, the first company to market has to spend a lot of money educating buyers about why this new product or service is worth purchasing. You can also learn from the mistakes of your predecessors. For example, look at how Microsoft came into the spreadsheet market and took over with Excel after Lotus had been dominant with its 1-2-3 product.

Flat industry
Problem: Your research tells you the industry is flat.

Solution: See if you can look at the business a totally new way. For example, a recent article in the Harvard Business Review talked about a movie theater owner in Europe who recently entered a market that was saturated and suffering from a lack of customers. However, by starting a movie theater with huge comfortable seats, lots of parking, and other amenities that transformed the movie-going experience, he was able to pack his theater night after night.

Prohibitive costs
Problem: Set-up costs are too high.

Solution: Start out as a contractor to a business that you want to create. For example, if you really want to own a bakery, but you cannot afford rent, start out by baking a few goods and supplying them to existing bakeries. Over time you can save enough money to have your own store.

Lack of information
Problem: You can’t find information about the industry to determine if your idea is viable.

Solution: The best way to learn about an industry is to talk to small business owners who are in it. Many entrepreneurs will be willing to share a few hours with you to explain how they got started, how the business works, and industry pros and cons. As long as you are not potentially direct competitors, you will find many entrepreneurs helpful. You may need to call 50 people to find five who will help.

Making a Deal. Can you ignore your overhead?

hankshakeIn a production environment, when the manager, the accountant and the top salesperson meet to discuss a special order, sparks sometimes fly, tempers explode, and both the customer and the company can suffer. You might think the writer is out to lunch when the suggestion of ignoring your overhead costs is considered possible, but please continue reading. Everyone knows that all costs must be recovered if a company is to succeed. However, if a customer requests special pricing for a particularly large order, the normal costing – pricing strategy would result in a substantially different price than what to customer is requesting. Let’s look at an example.

Widgets-Is-Us is well known in the industry, has a strong customer base, and production totals around 100,000 units per month. Per unit costs break down as follows:

Direct Material: $4.00

Inbound Freight: $0.75Total Direct Costs: $4.75

Indirect Costs:

Warehousing: $0.37

Insurance & Taxes: $0.28

Spoilage: $0.08

Utilities: $0.02

Billing: $0.01

Other Overhead Charges: $1.47Total Indirect Charges: $2.23

Corporate Overhead Charges: $2.28

Total Unit Cost: $9.26

Mega mart, a prime customer has approached the company with an offer to purchase 90,000 units, with delivery over the next six months, for their brand new Extraordinary Mega mart, opening in Houston. List price on this item is $37.00, with the lowest price for a 10,000 piece order set at $17.95, with the salesperson earning a 10% commission. Mega mart’s offer is $12.95 each with payment terms of 2%, net 10 days from verified pick up date. Mega Mart will use their own trucks to pick up each shipment as they are deadheading back to the distribution center. Now, would you accept the order?

Before you answer the question, you need a few more facts. First, the plant’s capacity is 100,000 units per month, but is operated at 80,000 units to avoid excessive wear and tear. Second, all pricing is based producing 80,000 units. Third, the salesperson, recognizing the potential coup for his or her career, is willing to accept a 6% commission on this order. Finally, sales over the previous 18 months have floated between 77,500 units to 82,500. Now, what is your decision?

If answered no, you are probably in the majority. However, you just lost a rather profitable order. First, since overhead charges are calculated based on normal monthly production runs, each additional unit produced costs you only $4.86, plus the sales commission of $0.777, plus the cash payment discount of $0.259 for a grand total of $5.896. Your net profit is $7.054 each, $105,810 per month or a grand total of $634,860. The key here is to identify those costs directly affected by the order. Direct materials will not change. Utilities, spoilage and billing will not change. All other costs are immaterial as they are covered by the standard production run. You may incur some additional repair and maintenance costs, but you could negotiate lower raw materials pricing. If a customer asks for a special order, with special pricing and terms, look at the whole picture, not just the numbers on the accountant’s ledger.

What are Employment Taxes?

tax1.jpg

Small business owners often have great responsibilities while operating and managing a business. Before you become an employer and hire employees, you need a Federal Employer Identification Number (EIN).If you have employees, you are responsible for several federal, state, and local taxes. As an employer, you must withhold certain taxes from your employees pay checks. Employment taxes include the following.

  • Federal income tax withholding
  • Social Security and Medicare taxes
  • Federal unemployment tax act (FUTA).

Federal Income Taxes/Social Security and Medicare Taxes

You generally must withhold federal income tax from your employees wages. To figure how much to withhold from each wage payment, use the employee’s Form W-4 and the methods described in Publication 15, Employers Tax Guide and Publication 15-A, Employers Supplemental Tax Guide.

Social security and Medicare taxes pay for benefits that workers and families receive under the Federal Insurance Contributions Act (FICA).  Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA.  Medicare tax pays for benefits under the hospital insurance part of FICA.  You withhold part of these taxes from your employee’s wages and you pay a matching amount yourself. 

Which form do I file to report federal Income Taxes, Social Security, and Medicare taxes?

  • Form 941, Employer’s Quarterly Federal Tax Return
  • Form 943, Employer’s  Annual Federal Tax Return for Agriculture Employees (For use by farm employers)

Federal Unemployment (FUTA) Tax

The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs.  You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax.  You pay FUTA tax only from your own funds.  Employees do not pay this tax or have it withheld from their pay.  Report FUTA taxes on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. 

Depositing Taxes

In general, you must deposit income tax withheld and both the employer and employee social security and Medicare taxes (minus any advance EIC payments) by mailing or delivering a check, money order, or cash to a financial institution that is an authorized depositary for Federal taxes.  However, some taxpayers are required to deposit using the Electronic Federal Tax Deposit System (EFTPS).  For additional information, refer to our Employment Taxes for Small Businesses page.

Certain Taxpayers May Now File Their Employment Taxes Annually
To reduce burden for certain small business taxpayers, employers who have an Employment Tax liability of $1,000 or less for the year will now file Form 944, Employer’s Annual Federal Tax Return, instead of Form 941, Employer’s Quarterly Federal Tax Return.  Eligible taxpayers will be notified by mail.

 For references, related topics and more information visit the IRS website.

Have Tax Questions?

tax.jpg With tax season upon us many small business owners need assistance getting organized and prepared for April. The IRS has compiled a Tax Center to answer some of these questions.

On the IRS website you can find common forms and publications or use the Electronic Federal Tax Payments (EFTPS) to pay your taxes online. If you prefer meeting with someone in person you can locate your local tax office or the Taxpayer Advocate Service that can help taxpayers resolve problems with the IRS and recommend changes that will prevent problems.

The IRS also offers answers to deduction questions, business expenses, Employer Identification Numbers (EINs), and information regarding self-employeed individuals. Also educate yourself on tax scams, how to spot them and avoid them. To get more information on these questions and other common issues visit the IRS Tax Center by clicking here.

Find and Finance Sales to Foreign Buyers

We are pleased as punch to be offering this fantastic opportunity for your business. If you are a small business owner interested in exporting, we strongly advise that you attend this event. The Export-Import Bank of America will be discussing the financial assistance they can provide, so that you can do business with foreign buyers. 

TRADE SYMPOSIUM
DATE: May 24, 2007
TIME: 8:30 – 12:30
LOCATION: 3209 S. Staples RM 167
REGISTRATION: Call (361) 698-1021 to register. Cost: $39
Sign up online now!

Discover how to find international buyers and use trade finance tools to win international sales and grow your business.

Let trade and export finance professionals guide you through the maze of export challenges and demonstrate how to obtain valuable trade or research information, enter new markets, minimize risks, improve cash flow, and effectively ship your products to market.

Designed especially for U.S. exporters, this half-day interactive symposium will review the many products and services available from the Department of Commerce (U.S. Commercial Service), the Small Business Administration (SBA), the Export-Import Bank of the United States (Ex-Im Bank).

During this event you will learn how to:
· Identify New Buyers and Markets
· Locate and screen buyers, distributors, and partners to meet your business needs
· Tap into foreign market information from experts in 84 countries
· Use e-commerce tools and on-line export declaration filing
· Secure Export Financing Support
· Obtain working capitial loans to fulfill your sales orders
· Offer competitive credit terms to your foreign customers
· Obtain Financing Support for You and Your Buyers
· Protection against nonpayment
· Get Your Products to Market
· Look at the macro view of global logistics

“Reserve your seat now before this Symposium sells out!”
Claiming your seat at our "U.S. Trade Symposium" on May 24th in Corpus Christi is easy…

 
 
You’ll be finished and registered in less than 2 minutes…
 
And I’ll contact you shortly to verify the details.
 
Or, if you prefer, you can call 361-698-1021 and let me know that you’d like to register for our "U.S. Trade Symposium" in Corpus Christi, and I’ll help you complete your reservation by telephone.

Need Cash to Prosper?

If your small business needs a bit of money, there are plenty of options available.  You could visit your personal bank, tap into a credit card, or visit Prosper.com.  I was recently made aware of this site, and I thought I’d shed a little light on this site, because it might be of use to local small businesses.  Basically, Prosper connects lenders with people who are in need of a quick loan in an eBay style environment.

       Prosper.com is definitely an attractive alternative if you are looking to raise small amounts of money, and the terms are also pretty reasonable:

  • no collateral needed
  • no prepayment penalty
  • a fixed rate over three years

So, how does Prosper work?  Well, people who need money request it, and other people bid for the privilege of lending it to them. Prosper makes sure everything is safe, fair and easy. According to Inc Magazine, “Borrowers sign up for a free membership in Prosper, which performs a basic credit check and assigns each member a credit rating. Next, borrowers post loan requests, listing the desired loan amount (up to $25,000), the maximum interest rate they are willing to pay, how they intend to use the loan, and the duration of the auction (between three and seven days), along with a credit score and debt-to-income ratio provided by Prosper. Borrowers then sit back and wait for lenders to offer loans at interest rates either at or below the preset cap. If a loan is fully funded, Prosper combines the bids with the lowest rates into a single loan and deposits the cash in the borrower’s bank account within a few days. Prosper handles all the back-office work, including payment collections. In return, borrowers pay 1 percent of the loan amount up front and lenders pay an annual fee of half a percent.”Please note that landing a loan on Prosper won’t always be easy. Here’s how one business owner navigated the process.