Small Business Owner Insights

If you buy something from me one time for $10, that represents $10 of value to me. And that is where most business owners stop. However, if you come in my shop 4 times a month and do so for a year, that is $480 you represent to me.

Once you look at it like this, several things become immediately apparent.

• It is to my advantage to try to get you to come back because I only had to market to get you in the store once. If it costs me, on average, $1 of advertising to get a new customer, that means if you come in one time, my marketing costs are 10%. However, if you become a repeat customer for a year, that means my marketing costs are less than a half a percent (this, in case you did not know, is a good thing).

• If I know I have an average net profit of 10%, that means I can spend any amount up to $48 in a given year to make you ecstatic and still not lose any money.

• If I have a choice between marketing to get new customers and marketing to my existing customers, the later has a higher payoff by many orders of magnitude.

In order for any of this to work, you must have a firm grasp of the numbers in your business. If you don’t, stop everything right this minute and don’t do anything else until you understand where every dollar is going.

Yesterday, I wrote about my frustration that I could not find a small business that would sell me breakfast and let me pay with my debit card. I want to riff on that for a moment, if you don’t mind.

If you run a business, you have the right to decide up front how you want to do business. For many of us, the ability to make those sort of decisions was why we went into business in the first place. However, if you decide that you only want to do business with one eyed midgets that speak Rumanian, do not be upset when the chain store that wants to do business with everyone takes all your business including the Rumanian midgets.

There are hundreds of reasons for someone to NOT do business with you or your firm. I do not understand why you would want to add another one. In any shop I ever ran, I was more than happy to take any form of payment you wanted to give me, as long as I had a reasonable hope of being able to deposit it. My thinking was that it is always easier to sell to someone the second time than it is the first time.

You see, the business owner was thinking short term: He was looking at losing about 50 cents off a $7 transaction. However, that is false economy: Over the course of a year, I spend about $900 on breakfast in greasy spoon diners, and now none of that will be spent in any of those three places. He saved 50 cents, but lost $900.

I like breakfast. A Lot.

About twice a week, I will throw the latest book I am reading into the messenger bag and head off to a greasy spoon, Mom and Pop diner to get some scrambled eggs, sausage, grits and toast.

This morning was such a morning. However, because my regular place was closed due to a death in the family and I do not carry cash, I was unable to buy breakfast. I drove to three different places, any of which would have been fine with me, but because I was not willing to do business their way (pay cash), they did not get my business. Instead, in frustration (and hunger), I ended up going to McDonalds, where I spent much less than I was planning on spending, got worse food than I wanted, yet they let me do business with them my way.

I know all the justifications for not accepting plastic:

• There is a 3% fee
• There is a .25 cent charge per transaction
• Increased admin time
• 2-3 day delay in getting the funds

You know what? I don’t care. Every reason you could possibly have for not accepting credit cards has to do with you, the business owner. None of them affect me, the customer, at all.

I like Seth Godin. A Lot. So I was excited when I found an interview with him that I was unaware of, and even more excited when I saw it was not a rehash of his standard fare. There is solid gold here, with him broaching subjects I have never heard him talk about before… his childhood, his passion as a child for Radio, his college career and much more.

I may not always agree with Seth, but he always makes me think; I like thinking.

Go read the interview.

You may also be interested in his free eBook on bootstrapping.

As someone who makes all (or virtually all) of his income online, I am dependent upon PayPal. It is the online currency of the internet, for better or worse.

The frustrating thing is that there is NO alternative to PayPal. Not a real alternative, anyway. Why? Market share.

According to eBay (who owns PayPal), over 90% of eBay sellers accept PayPal. If you try to sell on eBay and do not take PayPal, you are virtually dead in the water. Because it seems the entire world is a registered eBay user, almost everyone (in the US and Europe, anyway) has a PayPal account.

Why is this a problem?

Because PayPal sucks.

It is simple and if affords a great deal of buyer protection. But, if you have ever had the experience of having PayPal seize every dollar in your account because it just thinks you may have committed a transgression, you know that PayPal is just broken. Last summer, my account was down for almost 6 weeks (with about $7,000 in it) while they “protected me” from suspected fraud.

Superblogger Seth Godin recently had a wonderful (not) experience with PayPal customer service. I feel his pain and recognize every step of resolution he talked about. I do wonder if he got it resolved faster than I did.

Well, I have learned a lot over the past few years I have been blogging. For example, I have learned how to drive local customers to a store with a blog and how to market yourself and achieve your goals through blogging. Pretty much any success I am now enjoying professionally is a direct result of my blogging.

Because of blogging, I have met some awesome people and made great friends. I want to share some of that, to talk about the lessons I have learned and still am learning and how we can use the blogging medium, as well as the Internet itself, to market our small businesses and achieve our goals. I want to talk about small business in general, about how owning a small business can help you achieve your dreams, as it has for me. And, I want to hear your voice as well; I want to build a community of small business owners and those who want to be, to be a resource for them, to help them find their souls again, to engage their passions again.

I have a reputation for being politically incorrect; you can expect that to continue. I see myself as a change agent; sometimes that gets messy and requires some sacred cows to get grilled. That’s OK, I can take the flak. Regardless, I will be out here, flailing away at windmills with my scruffy toothbrush, talking about blogging, small business, making your own way and living your own life. After all, the reason you went into business was to be able to meet life on your own terms, to find your own definition of success. I have found what mine looks like; perhaps we can help you find yours.

For a living these days, (barring investment income and residual income) I make money in two ways: I help people with blogging, with everything from setting up a blog for you from scratch to writing content to just getting you on the right track. The other way is as a freelance writer, doing everything from writing websites about golf to doing press releases to writing biographical articles for the not yet rich and famous. It is tough, it is gritty and it is the most fun I have had with my clothes on in years! I am living my dream, and I owe it all to the internet. I truly feel I am a lucky man.

About 2 months ago, I tackled about 7 big projects all at once, the biggest being a move across the country to Raleigh, North Carolina. It has been an interesting ride…

I will be open and honest with you: I almost quite this blog. It may have seemed to so of you as if I HAD quit this blog. Over the past 6 months or so, I struggled to find my voice, to find something to say in a unique way. I wanted to be able to ad to the conversation, not just regurgitate what everyone else is saying. I think the last thing the world needs is another link blogger.

A lot has changed in my life. For one thing, I closed my biggest business and entered into the wild and woolly world of freelance writing and blogging for pay. Yes, it is ironic; about the time I quit blogging over here, I started blogging for a living. I have helped launch about 6 blogs for clients now, and regularly contribute content to 5 more. I intend to talk more about this in a future post, so I will provide some links to the blogs that aren’t ghost written then.

For several years I have made some part of my living from writing, but I wanted to see if I could make a healthy living from just my writing and, while healthy may not be the word for it just yet, it is a living. I am managing to piece together a patchwork quilt of income from blogging for pay, from adsense, from Text Link Ads (Google can Kiss My Butt!) and full blown writing gigs, such as articles, web content and press releases. Nothing sexy or stuff you can use to pick up chicks in the bar with, but respectable, all the same.

My dear readers: I know I have jerked you all over the map the last few months. I am very sorry for that; life got in the way.

The fact that I have not lost more RSS subscribers simply amazes me. That I still get linked to regularly blows my mind. You guys are simply the best.

Anyway, I am alive, and I am back! Next time, I will talk more about just what that means, and where I want to go with this blog. Stay tuned!

As I am sure you have noticed by now, there are lots of changes going on here.

We have a new url, a new theme, a new mission, heck, a new name.

I have about 10 posts lined out, but want to make sure there are no hiccups with the new design. I will be testing throughout the rest of the week, so expect to see some strangeness.

One favor: If you linked to me in the past at http://www.hughhollowell.net/blog, I would really appreciate it if you would change the link to reflect the new site: http://sboinsights.com.
Thanks for sticking with me through this, and I look forward to seeing you on the other side!

Obviously, there is a lot changing here. (If you are on RSS, you will want to click through to see what I mean…)

Some of this is what I was alluding to last week, and some of it is new. I am still tweaking and testing, but all the internal links should be working…

Bear with me and all will be revealed soon.

Life has a way of changing. It was John Lennon who said that life is what happens while we make other plans, and the older I get, the more I think John was right. As I look back across the winding road that has led me to this point, I see many places where had I done just one thing different, my entire life would have changed. Sometimes, I think life all comes down to a handful of choices we make.

About 2 and a half years ago, I took up blogging for the first time. I was about to do a major change in the way my store I owned at the time operated and I thought that a blog would be a way to keep customers updated on the progress.

A good friend was a problogger, so I had some exposure to the field, but to be honest, I did not have high expectations. I went over to blogger, put my fingers to the keys…and fell in love. I liked the cathartic experience of getting it out there, I liked the feedback from readers, I liked the community of people I met and got to talk to.

Fast forward a few years (and a few blogs, to be honest), and we come to spring of this year. I had some ideas for an edgy, in your face sort of business blog, one where we did not truck with bullsh*t, one where we spoke the truth. In this blog I envisioned, it would be no place for sissies. Here people would hear about how hard business is, what it takes to persevere and how to take control of their lives.

Dear reader, I want to apologize to you, for I have failed you. Let me explain.
Over the last 4 weeks, I have thought a lot. Some of you know, but I am going through huge life changes right now. I closed a business, moved across the country and am in the middle of starting another. My life is a bit nuts, to say the least.

I find that it is in these times that we look inside ourselves, that we become more introspective, that we take stock of how things are working out, that we look inside ourselves for insight, for answers. Well, I did, and when it came to this blog, I felt like I was coming up short.

Not counting this one, I have exactly 87 posts on this blog. There are only 25 that are worth anything, and less than 6 or 7 I am actually proud of. The rest is filler: blog memes, writing contests, admin stuff…filler. I have failed with the promise I made all of you when I started this blog, and for that, I am sorry. All of that is about to change.

What does the future hold? Well, I have some plans that will be unveiled next week, but for now, let me just say that big things are underway. For me, Very. Big. Things. Stay tuned and hold on.