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5 Reasons to Love Micropreneurs—The Best Traits the Smallest of Small Business Owners Share

Posted: 20 Jan 2020 01:30 PM PST

Even though I’ve taken a full-time role writing content for a fintech company, I’m still running my content agency part-time. I will always be an entrepreneur at heart—nay, a micropreneur, which I’ve written about many times.

A micropreneur (or microbusiness) is one that operates on a very small scale, with no more than five employees. We micropreneurs are a breed all our own, and there’s plenty to admire about us. So let’s pat ourselves on the back, shall we?

Whether you are a micropreneur yourself or are thinking about hiring or partnering with one, here are some of our best traits:

1. We’re dogged about finding solutions

When there’s no one around to help you solve a problem, what do you do? Solve it, of course. Micropreneurs rely on themselves to git-‘er-done, and that makes us strong. It’s funny—now that I’m working with an extraordinary team of people in my new job, I realize how long I’ve been problem-solving on my own. I’ve gotta say, it’s kind of amazing to find people whom I can also trust to help find a solution as good as (or better than) what I would have come up with on my own. And the fact that I’ve been doing that solo for so many years makes me a great asset to the team.

The drawback to this trait: I guess in my personal life, this isn’t always an asset. Sometimes my friends just want to vent about a problem they’re having, and I’m already on top of trying to solve it!

2. We see possibilities everywhere

Once a micropreneur, always a micropreneur. I don’t know one person who has owned a business, shut it down, and never started something new. I myself can count at least five businesses I’ve started (going back to college when I launched Snazzy Baskets, a custom gift basket brand that didn’t make it long). I know in my heart I will start more businesses in the future; it’s exciting to wonder what they’ll be centered on.

It’s like our brains are wired to find opportunities. Saying we’re opportunistic isn’t accurate; it’s more that we find gaps in existing solutions or come up with new and better ways to do things. And that is what makes for the innovation that the world turns on.

The drawback to this trait: We are never, ever satisfied. There’s always a better way, and looking for it can be exhausting (see #1).

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3. We have a unique way of doing things

Ask 100 micropreneurs how they manage their daily tasks, and you’ll get 100 answers. Maybe 102. That’s because we don’t prescribe to how others do things; we need to forge our own paths. For me, my day consists of constantly being pinged by Google Calendar tasks, as well as Alexa shouting reminders to me from the kitchen. Sometimes, just for fun, I’ll write things on paper.

I love that we micropreneur types are unique and that we don’t take the path most traveled for anything we do. I love hearing how other business owners manage things and sometimes modify their solutions.

The drawback to this trait: Ever heard the phrase “Don’t reinvent the wheel”? Well … we can’t help doing exactly that, over and over.

4. We work well alone and as a team

Being a micropreneur doesn’t mean we are always isolated (though, yes, it sometimes does). We don’t need guidance, which makes us uber-productive in our home offices away from other humans. But when we are part of a team, we also thrive. We’re like the kid in your school group project who essentially carried the slackers. Because we have such high expectations for our own work, we apply the same diligence when we’re working with others.

The drawback to this trait: It’s probably hard to have such a go-getter on a team for those who don’t operate the same way. It can be easy for us to dominate a project. It’s the Type A in us coming out.

5. We tend to be very curious

So, on a personal note, I’m single. I have engaged in more dating app conversations than I care to count, and despite advice telling me not to ask this (apparently, it’s a very cliché thing to do), I actually like asking what people do for a living. Because I’m genuinely curious.

Ooh, you’re an engineer in the aerospace industry? What sort of technologies are we launching into space?

A doctor involved in stem cell research? Tell me more!

I like understanding what people do and what attracted them to that role. I’m the same with my marketing clients: I want to know what makes their businesses tick so I can make it shine through words.

The drawback to this trait: Again, I think a saying communicates it all: “Curiosity killed the cat.” When we spend so much time being curious or going down a research rabbit hole (I know about those), we are less productive.

Micropreneurs are entrepreneurs, certainly, but they’re also creatures of their own design. If you are a micropreneur, what other qualities do you love about yourself?

RELATED: Take the 4-Week Micropreneur Challenge to Bring Your Small Business to the Next Level

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5 Helpful Pointers for First-Time Business Founders

Posted: 20 Jan 2020 01:05 PM PST

Starting your own business can be a stressful, complicated, and yet rewarding endeavor. However, if you don't have much experience launching and growing a company, you surely have more questions than answers.

Increase the odds of your startup's success by considering these five key elements of growing a new business:

1. Be sure you understand every aspect of your business

Every entrepreneur has a bent toward one or two specific areas of business. Some people like the creative side of things and prefer to spend time on marketing, branding, and design. Others are more analytical and enjoy programming and data. But regardless of your interests, you have to be involved (on some level) with every aspect of your business.

Over time, this will change. As you hire people and the company grows, it becomes healthy to step back and release control. However, the early days are different. You need to understand how your company works and the only way to do this is by being directly involved in sales, marketing, logistics, manufacturing, payroll, management, etc.

2. Set your business up with the right legal structure

Business ideas can develop slowly over many months. And before you know it, your idea has become a reality. In the process, it's easy to forget how important it is to add the proper layers of legal and financial protection.

Experts recommend legally incorporating your business. Incorporating will protect you from personal liability from any business debts and obligations, and can provide tax advantages as well. To learn more, see Why Your Startup Should Be a Corporation.

Do your research and find out the best type of legal entity for your business and goals. Options include LLCs, corporations, and even nonprofits.

3. Seek advice from other successful entrepreneurs

No matter how many books you read or podcasts you listen to, there's nothing more valuable than having one-on-one conversations and relationships with other entrepreneurs. And believe it or not, most are generous enough to help young entrepreneurs who are bold enough to ask.

"Sitting down and speaking with other founders who have already been through the process is invaluable and will save you from making unnecessary mistakes," writes Kolton Andrus, founder of Gremlin. "I couldn't be more grateful to the numerous people who have served as mentors, providing advice and helping to calibrate the direction of my company, and now I feel a strong responsibility to pay that forward."

You can find other entrepreneurs and business owners in your own personal network, on LinkedIn, in local business groups and startup clubs, etc. The key is to put yourself out there and take chances.

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4. When you’re ready to grow, hire strategically

You'll eventually outgrow yourself and need to bring on other team members and employees. And once you start hiring, your growth potential goes through the roof. However, you must hire strategically.

Some business owners and venture capitalists say good founders should spend at least half of their time hiring (meaning networking, recruiting, vetting, and interviewing). If you're not dedicating at least a few hours per week to onboarding the right people, you're not setting your company up for success.

People make a business. Don't hire strictly on past experience or degrees. Get to know people and find out how to identify passion, drive, discipline, and selflessness. These are the qualities you want in your startup team.

5. Stay open to pivots and new ideas

Every entrepreneur has a certain amount of pride baked into the business. Admitting that your idea might not be successful or profitable can be sobering. However, the most successful founders remain open to pivots.

Whether it's two weeks from now or two years down the road, keeping the door open to a pivot allows you to embrace the best opportunities and maximize your chances of success.

Set yourself up for success

Success means different things to different entrepreneurs. But for the purposes of this discussion, we'll assume that it means starting and growing a profitable business that adds value to all stakeholders: you, your employees, and your customers.

If you want that kind of success, you need a plan. Hopefully this article has given you some ideas and techniques that you can use to put your young business on the right path.

RELATED: 7 Startup Mistakes That Will Doom Your Small Business

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The Benefits of Helping Your Business Competition—Yes, Really

Posted: 20 Jan 2020 12:27 PM PST

By Alex M H Smith

Generally speaking, what's bad for our competitors is good for us.

Any slip by them—any scandal, piece of mismanagement, or boardroom turmoil—we'll tend to welcome with glee, seeing it as an opportunity to take a few slivers of precious market share from them before the dust settles. All sounds pretty reasonable right?

What if I were to tell you that this perspective, common sense as it may seem, is actually built on a flawed assumption and may not be the right way to think about this at all? Indeed, what if I were to then tell you that, in reality, you should be cheering and supporting your competitors, rather than wishing for their demise? Sound implausible? Then let me explain.

A race to the bottom in order to keep afloat: A commodity market

The desire for your competitor's failure is rooted in the idea that you can take their customers. However, if we go one level deeper there's an admission here: the admission that both you and your competitor have heavily overlapping customer bases, and that if push came to shove, those customers would happily shop with either of you.

Where you see this dynamic played out most acutely is in commodity markets. If you sell a commodity, then your customers genuinely don't care who they buy from, so long as the quality and price are right. In a commodity market, the problems of your competitor do genuinely represent a great opportunity—and so you should celebrate their demise.

However, as we all know, a commodity market isn't a nice place to operate. Margins are razor thin. The graft is endless. You have to engage in a race to the bottom in order to keep afloat, culminating in a scrap between a bunch of undifferentiated, unprofitable businesses.

Bottom line? If your competitor's challenges represent a big opportunity for you, that's a sign that you're operating in a commodity market. A sign that you and your competitors are too much alike, and that neither of you have a defensible position from which to make a strong profit.

Divide up the pie rather than compete for all of it: The decommodified alternative

So what's the alternative?

Well, at the opposite end of the spectrum from a commodity market is a market which is divided up, very neatly, between different brands looking after different segments. In other words, a group of brands that divide up the pie, rather than compete for all of it.

To give you a hypothetical example, imagine if the only four car brands in the world were Ferrari, Skoda, Rolls-Royce, and Jeep. In this scenario, although you could argue that on paper the car market is "highly competitive" with four brands "battling" for market share, in reality it wouldn't be competitive at all. Each of these brands brings such a different value offering to the table there will almost never be a comparative decision for consumers to make. Nobody is going to ask, "Hmm, shall I get the Ferrari or the Skoda, or the Rolls-Royce or the Jeep?" In each case, the question would answer itself, based on the consumer's need.

That's what happens in a heavily decommodified market. Each brand cares for its own segment, little competition occurs, and high profits are reached due to freedom from the attritional costs of competition. This is the kind of market you want to operate in.

Stop fighting over the same pool of customers and monopolize a chunk of the market

In a fully decommodified market, not only are your competitors' troubles not much use to you (because their customers won't be particularly interested in your differentiated offering), but you actually in some ways rely on your competitors to act as counterpoints which strengthen your own position.

Think about the relationship between Häagen-Dazs and Ben & Jerry's. Although both are seemingly very tight competitors, they actually strike a remarkable balance with each other in their category. Häagen-Dazs makes almost exclusively "classic" flavors (vanilla, strawberry, etc.), while Ben & Jerry's specializes in "innovated" flavors they have invented (Phish Food, Chunky Monkey, etc.).

Brand wise, Häagen-Dazs speaks for quality, luxury, and refinement, while Ben & Jerry's is casual, silly, and a touch political. Add it all together and you actually get two brands that somewhat thrive on each other's existence, like yin and yang, or Kirk and Spock, or whatever other mutually reliant odd couple you can think of.

When you have a "counterpoint relationship" with another brand like this, the correct strategic approach is simply to do the opposite of whatever they do. In doing this, make no mistake, you'll be doing them a favor. You'll be driving their customers (the ones who appreciate their value offering) into their arms.

But in return you'll also be further strengthening your own position; making it clear to people who are into what you do that you're the only plausible option. And the rewards for monopolizing a chunk of the market like that are profound.

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As you can see, the gains from attacking your competitors, while not non-existent, are cheap gains for cheap businesses, with no long-term prospect of success. However, the gains from propping your competitors up, in order to drive a wedge between you so that you no longer fight over the same pool of customers, are profound and long lasting.

You can get a more in depth look at some of these ideas, and how you win when you refuse to compete, via this TEDx talk I delivered recently:

Video Thumbnail

Love your competitors – how great businesses do strategy | Alex Smith | TEDxFolkestone

By Alex M H Smith Generally speaking, what's bad for our competitors is good for us. Any slip by them—any scandal, piece of mismanagement, or boardroom turmoil—we'll tend to welcome with glee, seeing it as an opportunity to take a few slivers of precious market share from them before the dust settle

In the meantime, just take a look at your competitors. How would it look if you were to give them some breathing room? To make yourself unappealing to their customers, and thus make them unappealing to yours? Such thought experiments are well worth your time as they can uncover strategies that culminate in you leading your category.

RELATED: 5 Ways Business Automation Can Help You Outsmart Your Competition

About the Author

Post by: Alex M H Smith

Alex Smith is the founder of Basic Arts and is well known in the strategy industry for his counterintuitive takes on business future. Having spent his career advising brands such as The Economist, Innocent, and Hello Fresh on their positioning, he began to see flaws in the normal way we approach strategy, and so he developed a new way of doing things by distilling the lessons of the elite few brands that get it right. Alex now works with some of the best talents from a combination of backgrounds to bring these ideas to every business.

Company: Basic Arts
Website: www.basicarts.org
Connect with me on Twitter and LinkedIn.

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A Simple 6-Month Plan to Help You Build Business Credit

Posted: 20 Jan 2020 10:00 AM PST

While your resolutions as a small business owner probably include things like "grow my business" or "hire my first employee," I'm guessing "build business credit" didn't make the list. That's a shame because putting energy into your business credit can actually help you realize the other goals on your list!

Your business credit is one factor lenders, investors, and credit card companies look at when deciding whether to lend you money or invest in your company. The better your business credit is, the more qualified you are for certain types of financing. It may also help you get better rates and even land lucrative business deals.

If your business credit is poor, or even nonexistent, make a goal this year to work on changing that.

Month 1: Check if you have a business credit report

Find out whether your business is on the radar of major business credit reporting agencies. There are three primary U.S. business credit bureaus:

  • Dun & Bradstreet
  • Experian
  • Equifax

If you can't locate a credit report with these entities, it may be because you haven't yet obtained accounts that are reported to these bureaus.

Month 2: Check your credit scores

If you didn’t find a report for your business with any of the credit reporting agencies, then skip this step and come back to it in a couple of months after you’ve taken the next steps.

But if you do establish you have a business credit report with these agencies, you might notice that you've actually got several business credit scores; each bureau can create its own score for your business.

The tricky thing is that your score will be different with each, because each has its own proprietary scoring system, and because not every lender or credit card company you borrow from reports to the same agencies.

If you have a small business credit card, for example, your monthly payments might be reported to Experian but not the other two. It's unlikely you'll know which reports or scores lenders are going to check, so staying on top of your scores from all three major bureaus is helpful.

Month 3: Review vendor reporting

It gets more complicated (not really). You likely have accounts with vendors or suppliers who allow you to pay on say, net-30 terms. Some report those payments to business credit bureaus, some don't. No company is required to report to credit bureaus, which means that your decades of on-time payments with the office supply store down the road may have done nothing to help you build your credit.

First, start by finding out whether the vendors you work with do report to credit agencies. Simply looking at your business credit report will tell you this. Sort of. Since business credit reports don’t list the names of companies that report, you may have to surmise which is which based on account details.

If your vendors don't report to credit agencies, consider switching to vendors that do. Opening tradelines with vendors that offer you payment terms like net-30 and that report those payments to credit bureaus is the first step to building your credit history. As you pay your bills on time, you will begin to build up your credit history and scores.

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Month 4: Clean up your report

It doesn't always happen, but sometimes there are discrepancies on your business credit reports. Maybe you closed a business credit card three months ago, but it still shows up as open on your report. Or worse, accounts that belong to a different business could appear on your report.

It's important to regularly monitor your business credit report to ensure it's accurate. If it isn't, the following links will tell you what to do to report errors:

Month 5: Apply for a business credit card

It's wise to have a separate credit card for business expenses rather than using your personal card. It will not only help you build your business credit over time, but it will also make filing your taxes easier.

Look for a card that has features that are important to you, whether it's:

  • No annual fee
  • Rewards (travel or cash back)
  • Low interest rate
  • Employee card controls

Remember: you'll likely continue to improve your credit if you pay your credit card bills on time, and when you can, pay in full.

Month 6: Pay balances in full

Certainly, this should be an ongoing practice, but if you've just been paying the minimum due on your business credit cards (if you have them), start working toward paying off the full balance before the due date each month. Not only will this help you as you build your business credit, but it will also reduce or even eliminate those pesky interest costs.

If you can't afford to pay your balances in full, consider where you're charging expenses and see if you can pull back to better fit your available budget.

Next steps to build business credit

After you've taken this journey, you should be in a great position to qualify for financing, should you decide to apply for a small business loan or line of credit. Doing so can allow you to expand into bigger office space, buy more inventory to meet growing customer demand, or hire more help.

And if you're not ready for financing, you're still in a great place. Some potential clients (particularly for B2Bs) will check your business credit before deciding to do business with you. If they get a glowing credit report, you'll win the business!

Either way, continue to monitor those business credit scores so they grow with your business.

RELATED: 6 Easy Things You Can Do To Boost Your Business Credit Score

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