Nolo's Small Business Legal Blog

The talk of clouds in business is everywhere--mostly recently with the unveiling of iClouds for iTunes music storage. What is it? Simply put, with cloud computing, you pay to access an Internet-based service which hosts the software, hardware, and other resources you need to run your business. This eliminates the need for you to run software or other applications on your own computers; the cloud network handles everything. You use your own computers simply to access the system, and all your files and information are stored and managed and accessible through the cloud network.

The President and CEO of The Small Business Authority, Barry Sloane predicts that cloud computing will be the next big trend in the business community. "There is no doubt that business owners will embrace the cloud concept and over time gravitate towards its massive benefits. . . . Business owners will need to understand what the cloud is and what it can do for their businesses in the areas of cost control, data security, data protection, accessibility, efficiency and productivity to facilitate a smooth running technological platform for their business."

There is certainly a lot of cost saving and work efficiency potential for small businesses with cloud computing. Users would have access to their files anytime and from anywhere and it features shared usability. It is also designed to be scalable so that businesses can purchase only what they need, at the scale they need, and then the services can grow as the business and its needs grow. Fees for these services are usually charged on a month-to-month or annual basis.

Unless you've been living in a cave for the past few months, you've probably heard of Amy Chua's infamous book, Battle Hymn of the Tiger Mother. After reading the book, small business owner and mother Barbara Taylor wondered if there were parallels between how the Chinese raise their children and how they run their businesses. For her article, Battle Hymn of the Small-Business Tiger Mother, Taylor talked to a number of Chinese business owners in the U.S. What did she learn? In essence, successful Chinese businesses are steered by two principles. The first, avoid debt and manage expenses. Second, expect and demand excellence.

There's a good article on Mashable by Meaghan Edelstein on how small businesses can do social good and at the same time create goodwill and publicity for their company. It walks you through creating a social good campaign step by step and has some great ideas. A social good campaign is a great way to market your company without spending a lot of money--and it's good for the community too.

Small businesses can no longer afford to ignore the importance of online reviews, blogs, local search sites, and other social media. Word of mouth, the Yellow Pages, and other traditional marketing tools are no longer what people rely on when making decisions about where to shop, eat, or visit. As reported in an article by Kermit Pattison in the New York Times, "84 percent of Americans say online reviews influence their purchasing decisions." Don't get left behind--or worse, find out too late that you haven't properly managed your online reputation.

What to do? First, find out what is out there already, advises Pattison in "Managing an Online Reputation." Do a Google search of your business name and see what comes up. What impression would the search make on a customer? Are you easy to find? If there's not much there, list your business on local search sites like Yelp, Citysearch, and others. Then, get active and engaged in the online community. Stay on top of the online buzz with Google alerts and do your own online browsing to see what's out there and what people are saying about you and your competitors. What do people think about your product or services? Are there changes you should make to better serve your customers? Respond to reviews to show you care and listen to what people have to say.

Figure out what sites are popular in your area and learn to use others like Twitter and Facebook. Try to develop your own following and stay up to date. Finally, never, ever post fake reviews or do anything false or misleading solely to make your business look better or to harm a competitor. You could face fines from the attorney general's office or worse, ruin your hard-earned reputation.

To learn more about using online social media in your marketing efforts, see Nolo's article Increasing Traffic to Your Website.

Here's the tenth and final big-picture strategy from my save your business list:

10. Work with, not against, your competitors.

One of the best ways to lower overhead expenses is to combine operations with another business. For instance, sharing office space and a receptionist with a similar business can save a lot of overhead costs. The Sharing Solution, by Janelle Orsi and Emily Doskow (Nolo), offers some great ideas for businesses interested in sharing space and equipment with other businesses.

Here's the ninth big-picture strategy from my save your business list:

9. Don't overwork long hours and drag your business down with you.

Growing a successful business is like running a marathon, not a hundred-yard dash. If you can outlast the recession, you will outlast your weaker competitors, and after the recession your business will have the opportunity to grow larger and more profitable than before. But working 80 hours a week for months on end probably isn't help you survive the recession--and it may take away the down time you need to focus on new ideas and innovations. The best ideas often come to you when your brain has had a breather. If you run yourself ragged with hours and hours of busy work for a year or two, you won't be poised to innovate and take advantage of market conditions as they improve. So while sales are down, cut your overhead and labor costs where you can, batten down the hatches, and even consider taking some R & R while things are slow--who knows what new ideas you may come up with? 

Here's the seventh big-picture strategy from my save your business list:

7. Don't waste your money on ineffective marketing.

Spending money on conventional advertising, including radio, TV, and newspaper ads, usually isn't worth the money because these ads are broadcast to a general audience, most of whom probably won't be interested in your product or service. It makes more sense to use your marketing dollars to pay for selective listings, like a yellow pages ad or an ad in a trade journal, which are more narrowcast to an audience you know is already interested in your products or services. If you have a good-sized website, you might also investigate search engine marketing, which is paying to have people click to your site when they enter certain keywords into a search engine. But search engine marketing can be expensive if you don't spend time on it, says today's blog entry by Doug Williams at Web Design, SEO, Blog Marketing and Social Media Marketing for your Business.

Here's the sixth big-picture strategy from my save your business list:

6. Identify your customers to focus your marketing efforts on them.

Your customer list is one of your most valuable assets. After all, your existing customers have already told you they are interested in your product and they are the easiest to reach Yet many small businesses concentrate their marketing efforts on the more difficult task of finding new customers.When dollars are tight, why not spend your marketing money developing offers to existing customers and developing additional products and services they'll appreciate? What's the best way to determine whether your current customers are interested in additional products or services? Simple: Ask. One way to do it is to email customers asking for suggestions about new and improved services. If you don't have their email addresses yet, now is the time to get them. Hand customers a postcard or short form asking for suggestions and their email address (ensuring them that you won't sell their email address to third parties). Here are some ideas from Laura Wheeler at Good Marketing Ideas for how to market to existing customers.

Here's the fifth big-picture strategy from my save your business list:

5. Innovate on a shoestring.

In a recession some small business owners cut back to the core, slashing new development and going back to the tried and true. That's not necessarily going to help you in the long run. Consumer buying habits aren't necessarily going to go back to the way things were before the downturn, so you probably need to make some permanent changes in your product or service offerings. To come up with ideas for new directions, services, or products, try brainstorming with your advisory board, employees, and family members, and solicit suggestions from your customers. You never know where you'll stumble across good ideas. In this month's Costco Connection magazine, there was a collection of reader ideas on how small business owners were adjusting their business strategy to the recession. One of readers had a great example of how adding profitable services to a retail store can bring revenues back up. Suffering from poor sales, a Texas bird shop added a "jungle room" for children's birthday parties, complete with a parrot show. The jungle room has created more revenue for the shop as well as free exposure to a new audience and more customer traffic (plus a bunch of kids who are begging their parents for a pet bird!)
In the same article, a business owner wrote in that he had had a lot of success by asking some business acquaintances in his area to get together and help each other brainstorm some innovative and creative strategies to survive the recession. It provided a great sounding board, new ideas, and even business leads. See if you can pull together a small group to come up with new ideas, and choose the most promising ones to implement.

When a downturn hits and small businesses have to cut costs to survive, many small businesses trim everything but their core competencies. They cut all research and development and put the brakes on the very projects that they were started to diversify the company's revenue streams and grow it in ways to help it survive. Here's a blog post from HarvardBusiness.org by Freek Vermeulen, asserting that companies are better off exploring new sources of income and experimenting with innovative ideas, two ideas we talk about in our new book on saving your business. One idea we suggested is to reap the benefits of an employee brainstorm by asking employees to write a "5/15" report -- a report with employees' suggestions for improving the bottom line, that takes no more than 15 minutes to write and 5 minutes to read. Another idea that Freek talks about is to look for innovative ideas in the ways people have changed their shopping habits to save money (for example, resurfacing kitchen cabinets instead of buying new ones).

To learn more about helping your business survive the challenges of recession, see Save Your Small Business, by Ralph Warner and Bethany Laurence (Nolo).