Cottage Industrial Revolution is a U.S. based company, offering Consulting Services to the United States and Canada.

The Hourly Rate Trap

Hourly rates have become a standard in employment, both for pay to employees, and for subcontractors as a method of charging for their services. It is rather surprising to me how many people just accept that this is the only way to earn.

Hourly rates are a trap. Because in any given industry, a person will ask, "What do you charge per hour?". Then they comparison price based on that figure. Some are willing to understand that many people who charge more, do the work faster (or better), so it is worth hiring them. But the vast majority will only exceed the standard rates for that industry by a small margin before they seize up and go somewhere else. You are capped at how much money you can earn per day. There is a solid ceiling above which you cannot go. This is the hourly rate trap. And this is the thing that is SO EASY to overcome, once you understand how, and it is NOT by selling "online courses", or other info-products (which has its own set of problems, and its own limitations, and a good deal of work without pay before you ever DO get paid, IF you ever do!).

When we developed our web services, we did it differently. I always quoted a flat rate for everything. I had a fairly good idea of how much time it should take, and I added a buffer for those jobs that are unpredictable (where one time takes 5 minutes, the next time takes 2 hours, due to unforeseen complications - and with web development there were a LOT of those!). I quoted the rate, and stood by it.

At first, I did this because I was a work at home mom. It is hard to track hours when you are constantly being interrupted, and might have to go feed the baby at any time, or other things where it is hard to start and stop the clock. Tracking hours was a practical impossibility. So flat rates were really the only way I COULD bill for services.

Over time, this proved to be one of the most liberating things we ever did! It opened up earnings possibilities like you cannot imagine. It had only two drawbacks, and those were pretty much containable.

The advantages:

1. I did not have to run a clock, and stop it and start it during work hours. I was free to pick up the phone, attend to a child, go to the bathroom, whatever I needed to do, and NEVER WORRY about whether I was cheating the customer or not.

2. I could offer a better price over time than my competitors. There is a reason for that, which is the next thing on this list.

3. Over time, I was well motivated to get FASTER at every task I did. I have good analytical skills, and was able to isolate the areas of time wasting, and eliminate them. The faster I got, the more I made. There was no ceiling on how much I could earn.

4. I was no longer trapped by the hourly rate limit. My income was determined by my ability to produce the work, and not by someone else's idea of what was expensive.

5. My rates were predictable. The customer knew EXACTLY what it would cost them, no exceptions, and the rates ended up being very reasonable within the industry. Since my target was small businesses, they appreciated not having open ended tabs running on every task, where they did not know what something would cost until it was done.

6. Quoting by the task made me look at our services very carefully, to ensure that I NEVER did anything for the customer that would not make them money, or that would waste either my time or their money. We analyzed everything we were doing for effectiveness, and left out those things that simply were not worth the time, so that when we quoted a full service, we knew what was most important to include, and what was not worth including. When segmenting those services, we were then able to tell customers what things they should not pay for separately, because they were not worth their money. That gave us a HUGE advantage over our competitors, because most of them continued to charge for many useless services, and we were the only company telling them they were not needed, and explaining why.

7. I got very good at estimating time and potential problems, so I could quote a service I had never done, and be fairly close. Sometimes I got stung - I'd under-quote. Sometimes I'd over-quote, but the customer always thought it was reasonable anyway, since everyone else was over-quoting on it also on their hourly estimates (and usually charging for that anyway). But within 1-2 times of offering the service, I'd know exactly what to charge for it.

The only two disadvantages were that it could sometimes be confusing to quote on a service for the first time, leaving that potential to get stung if I did not research well, and the one drawback that I never did find a solution for - that if I hired a subcontractor, they would refuse to take the pay that I offered, which was according to the time it would take me to do the task. Because I learned to work faster, those who charged by the hour would not work for me, because they never bothered to learn to work fast enough to make good money at it. Sad, because if they had applied themselves a little, they could have made FAR BETTER money at what I paid them than they could by billing $50 an hour.

Over all the years of providing those services in that manner (close to 20 years now), I only ever had ONE customer INSIST on an hourly rate. And sure enough, when I told her what I made per hour on our services, she ran as fast as she could to find someone less skilled. I explained to her that we did NOT charge by the hour, but by the task, and that I worked faster than my competitors, so she would be paying for services at an effective rate of $50 per hour for highly skilled work, but that if she insisted that I bill by the hour, I'd have to bill $150 per hour. She bolted, aghast that I would have the audacity to charge her such a rate! Her corporate mentality was incapable of comprehending that an hourly rate is NOT a good means of determining value!

Having done this, I'd never go back. I'll never lock myself into a cage that is built of someone else's idea of what I should earn per hour. I'll also never hire an employee by the hour, or a subcontractor, for anything I cannot oversee in person, because otherwise it is just an invitation to them to treat my time in a casual manner. There is nobody who is so motivated to get the work done, and do it right, as someone who gets paid when it is done correctly, and who only gets the amount agreed upon. That employee, who is paid by the piece, or by the task, will work hard, and will become extraordinarily proficient at the job, as soon as they understand that if they do, their income will increase dramatically.

I am always fair about what I pay those who work for us. I always want to ensure that if I can do it in THIS amount of time, then I will pay them enough to earn really well if they do it competently, but a little more slowly than I do, and so they can earn exceptionally well if they work as fast as I can. But I won't pay them enough to earn well if they don't bother to learn to do the task proficiently. They are the ones then, who determine their own earnings potential, and they decide whether they want to earn minimum wage by doing a marginal job, median wage if they do an adequate job, or high wage if they do an outstanding job.

This is the one thing we did from the start, that made the biggest difference in our business model, as far as earnings potentials were concerned. It was a small choice, made of necessity, which influenced so very many things about how we did business. And it was probably the best choice we have ever made.

Effective Frugal Marketing

Every small business wishes they could just pay a fee to someone, and have customers come in - say you pay $2, and for that $2 you are guaranteed one sale. What business owner would not like that?

Unfortunately, marketing does not work like that. There are all kinds of marketing methods, some that work, some that do not. I'll go over a few here, and then I'll tell you how WE make sales. The same way we have been making sales for the last 15 years. Because in all that has changed in marketing, what we do is still working, is still something we don't pay for, and it is still the most effective method of marketing I've ever encountered for frugal businesses, and that includes methods that cost much more.

So... I'm only going to hit the basic online methods, and a couple of offline methods that cannot be equalled online.

1. Business cards. They work. Get your name out. But you have to work them, not just splatter them around.

2. Local networking. It works too. Even for online businesses. People buy from people they know sooner than they buy from people they don't.  Develop relationships. They are especially important for service businesses and B2B.

3. Blogging. It works if you do it right. You have to publish things people WANT to read, or view - photo blogs are just as good as text blogs, but they are more powerful when you have a good description of the image. It still has to be good stuff - otherwise you are wasting your time. You also have to have it as an integral part of your website, OR crosslink it with your website and run product promotions in the sidebars, or you are wasting your time. Blog posts are permanent in a way that social media is not. Put your effort here before you put it behind a company FaceBook Page, it will do you more good, and your efforts will have lasting effect.

4. On-Site content. Instructional resources, reviews, industry standard explanations, etc. Whatever your customers want to know that makes them a better more educated customer. This works. It works in the short term and in the long term. The right information not only results in contacts, but it delivers people to you who are already persuaded that they not only want to buy, but that they want to buy from YOU.

5. Social Media. If you can use it appropriately. It doesn't work quite like you think it will. The vast majority of small business owners I know don't make a dime from promoting through FaceBook. Some make money indirectly from Twitter (using it to attract visitors). A very few make something from a presence on LinkedIn. But honestly, other than automating a feed for Google bait, you are better off spending your time doing other things! Social Media is so temporary that your efforts can be better applied to things that are permanent in effect and that build over time. Social Media can suck you dry and leave you gasping in exhaustion just trying to maintain an active presence so three people a week can comment and nobody ever goes from the page to your website to actually buy anything! There are just too many WAY more effective things that don't rely upon being the most exciting thing or persuading a person with the attention span of a gnat to elevate your product to the status of most necessary impulse purchase for the moment. I'd rather market to people than gnats. Feed your articles in. The thinkers will read, the gnats won't.

6. Online Networking. This used to be very powerful. Lately though, nobody really engages online or thinks of other people online as real people. It has lost most of the power to draw long term customers, this, in part because the old forums have disappeared, and been replaced by transient environments where everything is temporary, and people are seeking the latest bit of titilation. Not very effective for solid businesses.

7. Ads on blogs. This can work. So can blog reviews if you can actually get someone to do one on your product. If the blog is reputable, gets good traffic, and is relevant to your product, it can work well, BUT... most blog ads are overrated, and WAYYY overpriced. They bring more traffic than customers. To be worth money, they have to result in paying customers. The vast majority of blog ads are worth about $10 per month, or $25 to $50 IF they can bring in sufficient traffic to not just PAY for themselves, but to MAKE good money. Be aware that it can take 2-3 months for an ad to really pay for itself, so give it a good chance. But after 3 months, if you can't see customers paying you because of the ad, ditch it.

8. Pay Per Click. Forget it. It takes thousands of dollars to work it to the point where a positive balance can be realized from it. When you are working with small monthly budgets, you can't blow it all on something with a horrendously high fraud and false clickthrough rate either. I've used several types of this. None have resulted in a single sale. Not one sale. The bounce rate on my website is the only thing that went up with any of it (clicks where someone comes in and immediately leaves because it was not what they wanted). If you don't have a hefty budget, plus a very significant startup (work out the bugs) budget, PPC will never work for you.

9. On page LEGIT SEO. Search Engine Optimization is a valid science - unfortunately, many people who sell it as a service are still in the dark ages, perpetuating false practices, keeping myths alive, and even doing things to your site that are downright harmful. I've had to rescue many sites from SEO vandals who destroyed search engine rankings using tactics such as keyword stuffing, and completely wrecking content. The BEST SEO revolves around your content, and the writing on your site. If it is done well (so people love to read it and so people understand it), then SEO takes care of itself! And that is the real trick to GOOD SEO. All the rest - all the garbage about changing search engine algorithms, all the trash about link formats and domain names and all that are irrelevant. If your content is good, and people like reading it, and people understand it, and if people can find their way around your site easily, then YOU GOT IT NAILED! Nothing else is needed, everything else is a waste of time, and nothing short of a scam because it won't make you one more penny of money. NOTE: SEO alone won't get you traffic. It has to be partnered with a content building and link building strategy, or you are still dead in the water.

10. Blog comments. This can work, but you have to be real, and you can't spam. Don't leave a URL in the comment area! ONLY post a URL in the URL field where you are invited to do so - generally it will link to your name. Not all blogs allow this, some are friendly to it, some are not. If you post helpful comments, your own experiences with the topic, or a valid question, it will be published. If you are stupid about it, you get deleted. Expect to drop 50 comments to get one comment that really pulls people to your site. But posting those 50 is worth it for the one that pulls because it will keep doing so month after month.

WARNING: Don't pay a company to do "article marketing" for you, or to get backlinks for you. Don't pay anyone to write your content unless you know their writing personally. There are third world companies out there (and some in developed countries) who hire non-native language personnel, who write trash articles, and they HURT your reputation and do not help it. Some can actually cause liability issues for you (I've seen this). If you hire writing, expect to pay for it - $50 an article or more, for GOOD writing that people enjoy reading. Anything else is injurious to your business.

So... what works for us? A combination of strategies. It isn't something that would work for a lot of people, because it requires that you have someone on board who can produce regular writing on topics which appeal to your audience. But it works well for us, and it works for every business that we've been able to teach to do it well.

1. We write. Everything we write is published to one of our own websites, or our blog, sometimes on other websites as a guest blogger. We do not publish articles on article database websites.

2. We have personal presences on several social media sites. We set up a section on each website that we are promoting, as a blog, so that it has RSS and will ping blog directories. This way, if we post an article there, we can auto-feed the article straight to social media. That gets a few views, but it has more power with search engines than it does with people, so it gets us more indirect traffic than direct traffic. We do NOT have business pages set up. They are too time intensive to manage, and they no longer get useful views unless you pay for visibility, which I won't do because it is not worth it.

3. We network our own websites. We generally have a dozen or more websites on related topics at any one time. Some are content only, some are content and cart. Publishing on ONE of the sites will indirectly benefit all the other sites. Increases in traffic on one site will increase the traffic on all of them. Once people get into our network, they tend to float around for a while in it. The key here, is content, and a box on each website called "Related Sites", where we place links to the other relevant sites that we own. Many businesses cannot afford multiple websites, so this does not work for everyone.

4. We optimize through content, primarily. We produce information that our customers and clients are interested in.

5. I search for blog posts with similar topics, and I leave comments. I don't do this on a schedule, but I will go hunting blogs every few months to leave comments, and these result in a fair bit of traffic that converts. I've had customers tell me that they bought from me because everyone else on a blog was being negative about a topic and I was encouraging and explained what made it work right.

6. We do pay or barter for a few select ads on blogs. It is worth doing, but only with caution. In general, ONE article, posted to any one of the sites in our network, gets 10 times the traffic (or more) that a paid ad gets. The ads get some traffic. The articles get more.

That last thing is something we've only done in the last year. All the rest of our business building has been done through websites and content.

Our backlink building strategy is also wrapped up in those articles, because when you write content that people like, they link to it. A good portion of our traffic comes from people who linked to us on their blog or website. And every link there gets us even more search engine traffic.

Building traffic without spending a fortune is kind of slow to start. Generally if you don't have a network to plug a new site into, it will grow fairly slowly without some major work hustling links and customers through personal contact.

But once it gets going, it has a lot of power, and a lot of permanence. It tends to grow year by year.

There are definitely low cost marketing methods that work, and those that are a waste of time. There are also high cost methods that work for some businesses, but which are a waste for small businesses.

The best ones center on good writing skills, and rely on a sound basis in integrity.

Small Cottage Business For Sale

Small Cottage Manufacturing Business with Established Customer Base and Good Google Ranking

Requires someone who is passionate about Whole and Natural Foods.

This is a SERIOUS INVESTMENT! The purchase price of this business, plus the additional funds required to make immediate improvements is between $45,000 and $55,000, depending on how the new owner chooses to operate the business and how they choose to market.

Small established customer base that is growing steadily, functioning website with shopping cart that ranks well with search engines.

This business requires someone who wants to make a product at home, and does not mind the repetition of making and perfecting a small product. Good hand skills required, must be able to use scissors, knives, and other small tools. Drill press required.

Profit margins are running approximately 60% of sales. This business makes a regular income, requiring several hours per week at this stage to operate. As the business grows, the time involved will increase, but the opportunities to make several of the processes more efficient will also increase.

Income is currently a part time income (for part time work). Please understand that this website has NEVER BEEN MARKETED! Owner has fed articles from the site into FB and Twitter, and THAT is ALL. It has grown slowly and steadily since they opened their doors, and is continuing to grow. If they had the funds to properly market this business, the growth would be far greater. It has the potential to provide a VERY GOOD full time income, without requiring so much work that the owner is always dragging and trying to keep up. Long term growth potential is limited only by the effort of the owner.

Why is the business being sold? Because the owner operates several small business lines, and the other lines are beginning to take more time and energy. This line needs someone who is passionate about the product, and who wishes to be involved in it full time in the future, not as a sideline.

The business currently offers a range of original products (including some unique inventions), which are popular within the niche it occupies. The target market for the products are very excited about the product, and LOVE that it is made in America by hand. Many of the products are in various stages of improvement, and the current business owner will assist the new owner in understanding how to implement those improvements.

This sale includes the website, domain name, some of the tools required for the business (except those common to every household, and the drill press), and all molds, templates, patterns, supply sources, branding, etc. There is NO inventory to convey with this business - items are made by hand, and need to be created by the new owner. Current owner will send instructions for all tasks, with photos. If a payment plan is used for the purchase, the owner will withhold key items which are not necessary for day to day operations but which ARE needed to sustain the business long term, until the final payment has been made.

For information on this Business for Sale, please use the Contact Page on this site to inquire. We'll put you in touch with the owner, who will be happy to provide you with more information.

When Your Website Is Not Making Sales

There are many reasons why a website might not make enough sales to pay for itself. While there are a range of issues that can CONTRIBUTE to this problem, the largest reason by far for lack of sales on a website is TOO LITTLE TRAFFIC.

And the number one reason for too little traffic is LACK OF EFFECTIVE MARKETING. This is the case about 80% of the time.

Often, a business owner will either create a website, or pay for someone else to create it for them. They'll work hard on making sure that the colors are right, the pages show the products well, and that the cart works.

And then they walk away and wait! They assume that building a website is like setting up shop on the main street downtown - where people will see the signs, peek in the windows, and be compelled to come in and see what you've got.

Unfortunately, a website is more like opening up a store 10 miles from the nearest house, down a lane out of sight of the main road, off on a thin trail through the deepest woods, and then hidden in a cave where not even the light shines out to indicate that something is inside! Yes, it is like THAT!

Usually, after a few months, the business owner realizes that their site is not doing anything. They usually conclude that the logical thing to do is to hire someone to optimize the site, so the "search engines can find it".

SEO (search engine optimization) IS important - not in the way people think - and not the KIND of SEO that people think. But a site with poor SEO and good marketing will outdo a site with good SEO and bad marketing every time. And the BEST SEO isn't keyword optimization, or anything that shows up on any kind of computerized analysis of the site - it is just good writing. Good writing that appeals to your customers, tells them clearly what you have, in words they understand. It is as simple as that. If that is done, your SEO IS DONE!

After the business owner completes the SEO routine, they sit back and wait some more. And nothing changes! Still no sales!

In the hundreds of websites we've either owned, or managed for our clients, we noticed some patterns that hold pretty true for every website. One of them pertains to traffic and marketing.

It takes about 2-300 site visitors (on a site that is reasonably well done) to get ONE customer that actually buys something. Now, some sites can do it with fewer, some will require a few more. But usually it falls within this range.

Most initial customers to a website get there from PERSONAL contact from the site owner.

To get a site to really earn, you have to get it out there so people can find it without you having to make personal contact with each and every customer. You want THEM to start coming to YOU. To either CALL, or to BUY.

If you fail to market your website, the search engines will pick it up, and somewhere around 200 site visitors per month, the traffic will simply stop growing. Only BARELY enough to get ONE customer per month on exceptionally good sites. Not enough to get even that on the average small business website.

If you do not market the site, it will sit there, FOREVER, and NEVER increase in traffic.

Search engines KNOW it is there. No amount of optimization will make it any better. They'll only send you the traffic that does not match any other site (and that is almost nothing), or you'll get people who dig 10 or more pages deep in the search engines.

You need a few additional things to make them pay attention enough to actually SEND traffic to you.

1. Backlinks. A backlink is a link on another site that points back to your website. These can be from social media (Twitter, FaceBook, LinkedIn, Pinterest, etc), on other websites or blogs (including ones you own yourself, IF they are good quality), or even in Gmail.

2. Activity that the search engines notice. This may include blog pings (from making blog posts), or periodic new content (even new product listings counts).

3. Something no one else has. It may be good product descriptions, a wider assortment of topics (including less common ones) related to the product or service, answers to questions nobody else is answering, information with humor and personality, or other unique bits that are distinctly different than your competitors. Search engines like what is unique, and so do people.

All of these things can be done fairly simply using a blog. Post new information on the blog on a periodic basis, send the RSS feed from the blog to your social media sites (you can do this so it is sent automatically every time you publish a post to your blog), and make sure the posts are fun and informative, and that they are written JUST for your blog (don't use recycled information). This is probably the simplest and most effective "no cost" marketing method for small businesses.

You HAVE to market your business. Either YOU do it, or you need to pay someone to do it. If you do not, you will never earn from the site. It will sit there with 200 visitors, never making a sale, and you'll wonder why you bothered to set it up in the first place.

There is no fast fix for marketing. It is something that has to be done, week after week, to keep the customers coming.

If you get the combination right, it will slowly start to pay off, and will then build momentum. Think about it like this: Suppose each post you write for your blog has the potential to bring you 1 customer per month (often it is more or less than that, but the concept still holds). It isn't much at first, but as the cumulative power builds, it ends up being really powerful.

In reality, some blog posts are more or less powerful than others, both short and long term. But the cumulative power still builds over time.

You HAVE to market. As a business owner, you have to make sure the marketing you do is effective for the long term.

Give anything you try three months before you decide it is not working, and make sure you take a hard look at your stats before you make changes - make sure that you aren't stopping something that is working (some things build slowly, but the stats will show that it is doing something before it results in customers). Website stats can also give clues to what should be adjusted when adjustments are needed.

The only time you need to look at other reasons for no sales, is if you have 1000 or more visitors per month, and are still making no sales.

If you have less traffic than that, get to work on marketing!

Business is NOT a Zero Sum Game

Let's say the kids in the neighborhood get together to play baseball. You know, like they did in the days before Little League, when it was all just for fun. They divide into teams, but before they can start playing, someone says, "Hey, I know, lets limit the points. Let's say that there are only 20 points available. No matter which team earns the points, no matter how hard we play, we can only total 20 between both the teams, so if one team earns a point, that is one less point that the other team can earn."

THAT is a Zero Sum Game.

Another way of putting it is to offer the winning team a pie to divide up between all the players on the team. They'll get a very small piece.

How many kids do you think would be on board with that plan? Or do you think maybe they'll come up with a way for the players who earn more points to get more pie, and those who earn fewer points to get less?

That is also a zero sum game. No matter how you divide it, it is just one pie.

Business is NOT a zero sum game. It is like real baseball. Each team can earn as many points as they are able to earn, in spite of the competition. Each PLAYER can earn their OWN pie. Or MORE than one pie if they have the energy and gumption to do so.

There is not a finite amount of wealth. Wealth is infinite. The more we practice good business principles (which are NOT selfish principles), and the more we seek to make sure that everybody in the picture has a chance to profit well from their efforts, the better EVERYBODY earns.

We have very negative attitudes about both competition, and pay hierarchy that get in the way of true prosperity. Those attitudes put us into a business mindset of the Zero Sum Game.

The backlash is that when a person views business in this way, they LIMIT THEMSELVES right along with limiting everyone else that they deal with.

The lack of meaningful merit based pay in most major companies is one of the things that inhibits prosperity both at the bottom of the pay hierarchy, AND for the entire company. When each person is motivated to EARN more, by more hard work, they work harder. EVERYBODY in the company, all the way to the top, profits MORE, not less.

The lack of cooperation with competitors and complimentary businesses is another inhibiting factor. Rather than saying, "I'll take this segment, you take that segment, and we'll refer each other and BOTH do better.", companies fight over the same customers, which hurts them both. There is far more scope for cooperation among competitors than is ever utilized.

We have a competitor whose supplier violated their customer confidence, and told us some inside information about our competitor. We would have liked to have informed the competitor so they could address the issue with their supplier - the information we were given has the potential to harm our competitor in the long term, if we choose to use it against them. We cannot contact the competitor though - they are so negative about their competition that they'd be rude to me if I tried to warn them. Their fear stands in the way of our being able to help them. We would be happy to cooperate with this competitor in other ways as well, but they would not ever be open to doing so.

This concept applies to the economy as a whole. When individuals are both allowed to profit from their efforts, and required to do so, the economy grows without limits, and personal prosperity is increased for the entire nation. When we think of wealth as ONLY equating to more dollars, we get into a trap that makes us think that if we do not have MORE dollars than someone else, we are not as wealthy. Wealth has more to do with how far the dollars stretch, and the kinds of comforts one can attain than it has to do with numbers. This kind of thinking equates to chopping up the pie into smaller and smaller pieces, and calling each piece a whole pie.

When we get into the trap of thinking that we have to grab a bigger piece of the pie than our competitors, or when we think that if WE earn more, that someone else has to earn LESS to compensate, we limit ourselves to a rather pathetic portion of what is possible when we stop fighting over a piece of someone else's pie, and start earning our OWN pie.

Local Business Strengths

There was a period during the late '90s when many business marketing experts decried the death of the small local business, predicting that due to the popularity of the internet, local businesses that did not ship product or provide services long distance would simply become obsolete. This has not been the case - in fact, as the internet has grown, local small businesses have found ways to profit from having a local presence. Small businesses that serve a local market have some incredible strengths that national chains simply cannot compete with, online or off.

I have often heard the complaint that companies like Wal-Mart "drive small businesses out of town". This is absolutely NOT true. The small businesses drive themselves out, by failing to build on their strengths and to provide something that Wal-Mart cannot provide. The real problem with the strengths of small local businesses is that many business owners fail to realize what those strengths ARE, and they try to compete in ways that fail every time.

When you have a national online business, you are competing with millions for a tiny share of the big pie. When you have a small local business, you are competing with a much smaller market, for a larger share of the smaller pie. The potentials are just as great, perhaps greater, for a well managed local business.

They tend to try to compete in three ways, which always fail:

1. Price. Customer loyalty is never about price. Competition on price alone always fails, because someone else can always offer a lower price, and it drives your profit down so that you either cannot survive, or barely survive. Your prices should be COMPETITIVE, but they should be based on VALUE, not on some unrealistic goal to have the lowest price.

2. Variety of stock. This, again, is something small businesses simply cannot compete with big business on. Doesn't work. Wal-Mart specializes in carrying a wide variety of bestsellers. If you try to compete with Wal-Mart by carrying the same variety they carry, they'll outdo you every time. If you specialize in carrying what they DO NOT carry, and only those things that sell well for you, you can have a thriving business with more than enough revenue to keep you fat and happy.

3. Advertising dollars. Often a small business owner thinks that in order to compete with the big guys they have to have advertising money to spend. Not true. There are so many ways to market that do not require a large budget, and they are ways that the larger companies DO NOT DO WELL. Never compete with a large business on THEIR terms. Always compete in a way that is to YOUR advantage.

So, where IS the strength of small local business? What do you do to take advantage of the strengths and build your business successfully?

1. Create unique VALUE. Price and value are two different things. I can order a tool online for less than I can purchase it at the local hardware store. But I can't ask questions about it, I have to pay shipping, and I can't get it NOW. All of these things add VALUE to my purchase for me. Other things may add value as well - perhaps the tool online is made in China, and the one in town is made in America. Perhaps the tool in town comes with a better warranty. Maybe the tool in town has some other value point, particular to that store, which the one online does not have. Think about what you customers WANT, and NEED, and find ways to give them solid value for the price. Creating value that is NOT automated or standardized, but which is specific to the needs of your particular customers, is one way in which small businesses can outshine large ones every time.

2. Specialize in a NICHE. Find out who is NOT being served well in your town. Don't do what everyone else is doing! Do it differently! Sell things they AREN'T selling, but which the local people WANT. Too often, people are either selling the same things, or selling things nobody really wants badly enough to go to a separate store for them. Find the things people want badly enough to go out of their way for. Those are the things that will survive no matter how many Wal-Marts come in.

3. Make your marketing PERSONAL. The most effective marketing methods for small local businesses are very personal. Corporate does not do personal well at all. Personal marketing methods are far more effective than ad blasts anyway. They take hands-on work, and the repetition of hands-on work, but they are powerful and effective. Be helpful and kind, and carry business cards with you everywhere. Get out and network, print up sale or event flyers to scatter around, and go shake hands and smile at people. Set up a booth at trade fairs and have samples, business cards, and product to sell. Offer presentations through the Chamber, local groups that are interested in what you sell, or offer classes through a local college enrichment program.

4. Be there all the time. Ok, so you can't do that. But YOU and a WEBSITE can do that. A website can help a local business that is on a growth track, simply by being there when you cannot, with a good description of what you offer, pictures of your product or service, and contact information, business hours posted, etc. This kind of 24-7 presence can really help local businesses that have short or unpredictable hours, but it can also help those that have more standard hours. I do recommend that you stay open in the evening at least one day per week - if you are only open 9-5:00, you will shut out everyone who works during those hours, and they'll go to the big box stores instead - they won't get what they REALLY want, but you will leave them with no choice. More people go to the internet to search for local business now than those who use the Yellow Pages. So make sure when they search for your products in your town, that they can find YOU.

Local businesses have unique strengths, in presence and in personality, that long distance businesses and big box stores can rarely compete with. Take those strengths and build on them, instead of beating yourself with the limitations, and you'll open unlimited potential.

Spending Money to Validate Your Business Credibility

I can't count the number of times I have heard small business "experts" recommend that small business owners buy this thing, or start that service, to "validate their credibility". Usually they hand them and affiliate link to make the purchase, or sell them the product or service directly. I've heard people state that as a reason to build a website, get business cards, purchase an 800 number, get a merchant account, buy a postage meter, form a corporation or LLC, and any number of other costly purchases.

Now, at the right time, and for the right reasons, any of these things might be GOOD decisions. But if the only reason you are investing in it is to "validate your credibility" as a business, don't do it!

The myth is that they somehow convey to the world that you are a serious business owner, regardless of your need for them, or their benefit to your business. IT IS JUST A MYTH!

The thing that validates your credibility as a business, is whether you WORK the business. If YOU take the business seriously, then other people will. If YOU demonstrate integrity, it shows. THAT is what makes you credible.

If you haven't got that, then no one gives a rip whether you have a website, hand them a business card, or have T-shirts with your logo printed on them. Those things mean nothing without a leader at the helm.

The rule is this:


  • If you are sending out mail every day and the trips to the post office are getting burdensome, then a postage meter can save time -  it is only a wise investment if the time you save is time that is ALREADY costing you business.
  • If you market to individuals, business cards are not only wise, they are a must. If you don't, if your business is strictly online and you never mention it to anyone in person, then forget the business cards.
  • If you have an online business, a website is pretty much required. If you can potentially reach a significant portion of your local audience online, or if they are the kind of people that like to look up your site, research your product or service ahead of time, and then call later, a website is a good investment. But don't invest unless you can see how it is going to actually bring you more paying customers. If the web designer can't tell you that - in a way that does NOT require that you change your business model (for example, that does not require that you ship things through the mail if you are not already doing so), then DON'T BUY! If the designer can't justify the expense in actual reasonable cash returns, they don't know their business well enough to help you anyway. Not every business needs a website. Purchasing one to validate your business credibility is a waste of money, because it won't ever pay for itself. (In general, the combination of website and marketing costs should be able to pay for itself within 1 year - most should do so 2-3 times over.)

Evaluate each expense based on solid business principles. Validating credibility is NOT a solid business principle - it is the mantra of people who don't understand business well enough to give you trustworthy information. Do the math and see if the item really CAN pay for itself, and what it would take for it to do so. If the numbers don't add up, or do not look reasonable, give it a pass, and focus on more effective uses of your resources.

Wise management of your business, and fair treatment of your customers or clients will gain you far more credibility than any nifty gadget or service. They'll get you earning at a profit sooner too.

I Grew Up But I Still Won't Share

Oh, I'll share my french fries, and my lemonade. I'll even share my chocolate ice cream and bacon.

But I won't share ownership of my company. I'm married to a great guy, and I WILL share it with him, after all, we are supposed to "be one". But I won't share it with other people, and I have very good reasons why I will not.

When I choose to launch a business, it is unique. I have a vision for that business that departs from the typical business. We did not have a web development company that was like other web development companies - we made ours special. Our farm is different than other farms, and we operate it with rules we have developed around our individual convictions. Our marketing consulting methods are different than others, and they center on particular principles that are fairly rare in the marketing world.

This is MY vision... One that my husband usually "gets". But it is one that other people usually do NOT get. Our customers and clients respond to it specifically because it is different. But other individuals in the business world rarely truly grasp the thing that sets us apart. They THINK they do. But they don't. They take the words that we use to describe what we do, and the run it through their "filter of familiarity" and what comes out is pretty much the same thing every other business of this type is doing.

Consequently, if I partner with someone, I invariably find that they do not really understand what I am going for. When you partner with someone, they have a good deal of influence over what your business becomes.

If you get a business loan, or receive funds from an investor, or even if you form a corporation with several other individuals, or go public with shares, you find that your business is now not only FUNDED by these people, it is also, to a large degree, CONTROLLED by these people. They are invariably people who only understand the common. They rarely grasp a truly individual idea. Sad, but true.

This means that as soon as your wonderful and unique business concept gets in the hands of other people who have the right to approve or disapprove of your methods, they will systematically strip it of everything unique! You will end up having a company just like all the rest, without a grain of genius left. It isn't that they MEAN to do this... they actually LIKE the idea of doing it differently. But when presented with the REALITY of doing it differently, it feels too risky to think outside themselves, so they withdraw to what they associate with being "safe". And they unconsciously torpedo any chance your shiny new idea has of succeeding, because the world does NOT need another business like all the rest. It needs something new and fresh.

I've provided services to a number of non-profit organizations, and participated in various committees to attempt to affect change. In every instance, a problem is presented, ideas are tossed around, including some VERY good and original ideas. By the time the committee finally reaches an agreement on a course of action, they are agreeing to do the same thing to solve the problem that they tried last time that didn't work, because it was the only solution that contained enough common elements for everyone to agree upon. They name it something new, but it is the same thing anyway.

More people being involved in a concept almost always dilutes true brilliance. It DOES work to consult with many individuals, and to take the best ideas from each, and to fashion them into TRULY new processes. But when ONE individual who ALREADY has a truly new process puts that process up for review before the committee, it invariably works in reverse. The new thing is stripped of originality and watered down to mediocrity.

I don't share ownership. I don't seek business loans, I don't have advisory boards, and I don't form business entities that place my daily operational choices in the hands of other people who may have so much experience with their idea of my business that they can't ever really see MY vision of what it needs to be, nor understand how this might actually work BETTER than their "low risk" recommendations.

We have found that when we stuck to our guns, the unique idea that we formulated DID in fact work better. While our ideas were NOT suitable for EVERY customer, they were superior for OUR target market. Because for every handful of people looking for "the usual" solution, there is one that wants the very difference we can provide - and THEY are our target market. A market that is typically large enough to provide us with all the business we can handle.

Why would I want to sacrifice that, and give up the wonder and delight of really helping people who would not be helped otherwise?

Small business is amazing specifically for the capacity to reach vast numbers of people who fall through the cracks of the corporate service and product world. Big business operates on the "lowest common denominator" principle, and does not sell one of anything unless they can sell millions. Small business, on the other hand, can do a whopping good annual turnover serving a tiny fraction, and can do it better, and more personally, specifically to those customers whom big business thinks are beneath their notice.

If you involve a committee of big business advisors though, you will end up with a clone of a mega corporation, in miniature, which is doomed to failure because it CANNOT compete with big business.

What is unique is what is ESSENTIAL to the success of small business, and it takes looking at things from a different angle to bring that from concept to success. When I have "those" kinds of ideas, I want to KEEP them fresh and original.

Ownership of my business, and my ideas are things I do NOT share.

Would I File as a Corporation Again?

We owned a Sole Proprietorship for many years. We then filed as a Corporation, which we held for almost 5 years, before reverting back to a Sole Proprietorship.

Having been there, I have to say I we will choose from this point forward to avoid filing as a Corporation again. Since we reverted, I have learned that the reasons why we initially chose to go back to a Sole Proprietorship are only a handful of the many reasons why we would not now file as a Corporation.

The reasons commonly given for needing a corporate structure are completely false. The most common reason is that it offers "more legal and financial protection".

This is actually not true. There are in fact very few instances in which it offers more than a Sole Proprietorship, and in those instances, there are simple ways to replace that protection with something equally, or even more effective, and a whole lot less expensive.

Let's consider...

Liability. Company decisionmakers are often named personally in liability suits. Protection gone. Insurance can be purchased to do the job more effectively.

Bankruptcy. Only relevant if your company carries fairly significant debt, AND if your company is over three years old, AND if your company actually has a good credit rating. Prior to three years (more on many debts), a garantor is required - that's right, YOU assume the risk, not the company. No protection. None. And if you DO have an older company, and the company liquidation fails to yield sufficient to pay the creditors, they will often go after decisionmakers personally, in a personal lawsuit. Avoidance of debt eliminates the need for concern, and it is easier to start a company without debt if it is NOT a corporation.

What a corporation does, is increase your costs.

Taxes are more complex for corporations, and corporations must pay employment taxes on everybody, including the owner, which are not required for Sole Proprietors. If you do not hire employees (and there are many ways to expand without doing so), you are still forced to go through all the hassle of HAVING employees with a corporation, simply because that is what YOU become when you own a corporation.

Regulations are more complicated for corporations as well, which increases costs and time for compliance. Typically corporations will actually take on more of a regulatory burden than they need to as well. The profit hit from this can be minor, to monstrous.

Liability insurance costs more. A lot more. Because people are more likely to sue a corporation than a Sole Proprietor.

The ONE benefit we found, was that SOME customers took us a little more seriously, and thought that the "inc" legitimized us more so it was easier to make the sale with those people. This difference was small enough that the additional costs did not make it worth it.

We got more calls from sales people, more time wasted by charities calling for handouts, and more time wasted by people wanting to network but not knowing what it really meant (in other words, they wanted to take advantage of us without offering anything in return).

So why does everyone say that you get more protection as a Corporation? Very simply... their information all comes from the same four sources:

1. The Government. The government PROFITS from corporations more than from sole proprietorships. They have a motive for recommending them. Schools, colleges, the SBA, and most other "official" sources that you search will use information originally produced by the government. State governments also make more from corporations, and may not even have a fee for sole proprietors.

2. Lawyers. It costs about $500 (probably more now) to have a lawyer draw up Articles of Incorporation. What he does is this... He hands your info to his secretary, who opens up a standard boilerplate document, puts your name in the name field, sticks the date in the date field, puts the officers names where they belong, and the corporate address where it goes, prints that out, and sends it off to the Capitol of that state with the required fee. Nice profit on 5 minutes of work. Really! Of COURSE they are going to recommend that you incorporate, there are no legal fees for a sole proprietorship.

3. Accountants. The bookkeeping for a corporation is much more complex than for a sole proprietorship. The majority of sole proprietors do their own books. Follow the money. There is a definite financial motive for accountants to recommend a more complex business structure.

4. Specialists, Experts, Consultants, and other assorted writers, all of whom have received their information from one of the above three sources. None of them have actually done the research to see if it is true, they simply assume that it MUST be true. Even if they suspect it is not, they will not have the courage to say so... after all, most of them make more money from corporations. Sole proprietors hire consultants less often, and pay much less for them.

Now, I know some good accountants. Unfortunately at this time I can't say I know ANY good lawyers, though I do know OF a few that I'd trust with my life. This is not a condemnation of anyone in particular, just pointing out that once a statement is made about business, and endorsed by someone with the power to proliferate it to everyone that has the power to say so, the statement is taken as fact, even when it is far from true. This is the case with MANY business concepts, methods, and recommendations.

So no, I would not file as a corporation again. I will not hire employees, and I will continue to make money more efficiently, and keep more of it for the needs of my family.

Been there. Don't want to go back.

Break the Income Ceiling

Most business people find themselves trapped in a situation at some point where there is simply no way to earn more. They may be working long hours to get product out, and see no way to earn more, because there are no more hours in the day. They may be charging for services by the hour and be at the top of what they can charge without losing their target market.

There are many teachable strategies which can help business owners move past this kind of income ceiling into a place where they have strategies to increase their income dramatically, and to increase their output more than they thought they could.

Each of these strategies includes a concept, and then the application of the concept within your business. They can be adapted to all businesses, but the way in which they are used varies widely with the type of business.

We have owned and operated more than one kind of business, and have found that there is almost always a way to achieve three simultaneous goals:

  • Better value for the customer
  • Less work for the business owner
  • Higher income for the business owner

We earned more and produced a better product or service for our customers, and it was less of a hassle to produce it. We were then able to teach these strategies to our clients and students. If I had not seen it in effect in more than one area, I'd not believe it - but I do, because I've seen it work over and over.

Manufacture At Home

When people see the product we make, they are amazed that it is made at home. It is as though they cannot imagine that a product CAN be manufactured at home unless it is made of yarn or wood.

We make an airlock lid for canning jars. Our work involves drilling holes in plastic lids, trimming the rough edges off the holes, and inserting a one-way valve into the hole. There is no source for the one-way valve. THIS is the part that makes our product unique. We invented the valve, and invented the process to manufacture it at home.

If you want to make a product at home, you need to not only know how to make the product, you also have to be able to obtain, or make, the tools to make the product.

In our case, that meant I had to create a mold for a product that had never before been seen. Before I could create the tool to create the part, I had to find a way to make the part without the tool!

In this instance, I went hunting through a hardware store, just looking for things that could be used to make something like what I wanted. And I found them! We took them home, created a prototype, tested it, and then made a mold from it.

Making the mold was a little more complicated than just making a cast of the item, since it required a multi-part mold, and a way to pour in the silicone without the need of injection equipment. That took some creativity, and some experimentation.

This process was the beginning for us, of really helping us realize the potential for home manufacturing as a form of home business. And to help us realize the many benefits it provides.

The regulatory burden on our business is very light, keeping our costs down. Our tax burden is similarly light, which further reduces costs. We distribute direct to the customer, so we do not have to take a reduction in earnings to sell wholesale so they can be mass distributed. In fact, our profit margins are at a point that most companies would consider to be impossible to achieve.

Our business is "green", because we not only eliminate a great deal of unnecessary transportation (by selling direct from the point of manufacture), but we also use equipment and a setup that is environmentally friendly. Just a corner of the livingroom, and a few common shop tools.

What we did is actually NOT that extraordinary! The kinds of things that can be made at home are far more than anyone realizes, and many of the specialty tools for doing some really cool stuff, are less costly than we think. It is possible to build a pretty amazing business on a fairly low budget, and bootstrap your way up - purchasing better equipment and making the processes more efficient as you go.

Our first molds were pretty rough. We periodically think of ways to improve them, and ways to improve the methods we use for making the other products we make alongside the lids. Each product we have chosen to make has followed that same procedure - first figuring out if we CAN make it, then devising a way to make it fast enough to actually earn good money from doing it, then gradually improving on that as sales increase.

We have done this with every business we have owned, and have found that there is almost ALWAYS a way to do something, and there are usually ways to improve from there, so that the longer you are at it, the more you can earn.

You really can't quite grasp what I'm talking about if you have not either attempted this process, or seen someone else go through it. It is a series of miracles and innovations, leading to something deceptively simple. And it is possible to achieve it for virtually any product, though some would be too impractical to adapt.

Products do not have to be developed in a research lab, and they do not have to be manufactured in a factory.

If you've got an idea for a product, and you know you can never afford to have someone make it for you, then consider how you might go about making it yourself, with tools on hand. Find other crafty or mechanical people to brainstorm with and see what you come up with. The results may surprise you, and you may just be on your way to a whole new way of earning from home.

Take the First Step

Ready to ask a question or discover your options?

Call 435-263-1425, or Email us.

Helpful Books

MicroBusiness Growth Industries for 2014

17 industries with growth trends in spite of the economy


Most Wanted
Mushroom Products
for 2014

Hot Markets for Mushroom Farmers


Also check out our other books for information on Selling Mushrooms, Raising Pigeons (and selling them), Growing Microgreens, and more.


We are business professionals, offering suggestions and skills training for traditional business operations methods. We are not lawyers, and we do not offer legal advice. We are not accountants, and we do not offer financial advice. We do share information for some business practices that are sometimes handled by a lawyer or accountant, but which many business owners choose to handle themselves.

Business is a risky thing, and no one can provide a magic formula for success. The concepts, skills, and strategies taught by us are sound, and have the potential to yield significant benefits, but individual results will vary, and positive outcomes are not assured. Your success may be influenced by your attitude, your understanding of the material taught, political or economic factors, or even natural disasters. We strive to present accurate and helpful information, but offer no guarantees.

We claim our First Amendment rights to refuse service to anyone for any reason, with or without stating that reason.

Copyright © 2013. All Rights Reserved.