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LinkedIn is a good tool. But it’s boring. When was the last time you found something funny in LinkedIn? Yeah. There are articles talking how to use LinkedIn. But most of them are equally boring laundry lists of all LinkedIn can do. Not something that will be useful to you. Some just waste your time. “Talk to [people] on phone” lists LinkedIn’s own blog as one of the things you can do using LinkedIn. That list has no meaning for a small business. As a small business owner, my priorities are simple. Generating revenue is one of the highest priorities I have. Can LinkedIn contribute to that? How?

Using LinkedIn is about how you get in touch with people, and do business with them in various contexts. Below are some practical ways to help you in your small business.

Account opening and lead generation

If you have list of target customers (individuals), titles or companies, search them. You can search by industry, current or previous titles, current or previous companies, within a postal code etc. Get your target list of individuals in this search. Then figure out the most trusted route to those individuals. The most trusted route is the connection to the target through a first degree connection. You could preferably ask for a referral and you have a leg-in the company.

Finding the decision makers and influencers

When you sell to large corporations, understanding who you are talking to and who the decision maker/influencer will help you strategize your sale. There’s no use selling to someone who can’t do much. Using LinkedIn, you can find out who the decision maker is and could have alternative ways to reach them. You can do it by looking at job titles in an organization. But very often, that gives you partial and incorrect information. You can get more accurate and ‘tacit’ information by gathering information from others in the company.

Accumulate reputation and make referrals long lasting

Recommendations feature in LinkedIn has an eBay or p2w2 effect on your reputation. All your contacts can see it and are on for a long time. It’s an accumulation of your online reputation. When you delight a client, ask them for a LinkedIn recommendation. Those who visit your profile can see your reputation. In the offline world, a referral you get can only fetch you a few contracts. But here, you can make the recommendation long lasting and touch many more than just a few referrals.

Follow your customers and de-risk from personnel changes

With LinkedIn, when your clients shift from one company to another, they move with you because you connect with the person – not the company. That’s good for you. With your contact’s move, there’s a known person in the new company that gets your leg into the company (that’s assuming you have good terms with the client. If you have bad reputation, it moves across companies too.)

Using the same strategy to know the ‘influencers,’ i.e. making your connection wide within the company so that when your key contact leaves the company, you have others to fallback on. You de-risk your account from personnel changes.

The above are the ways you can generate revenue. If you are keen on exploring more about this, I suggest you read this eBook (Can LinkedIn increase your sales) published by Jill Konrath. Pages 5-8 have the crux of what this eBook has to offer. It’s worth the read.

Tap into push button expertise; position yourself as a subject matter expert

LinkedIn Answers has been reasonably successful. We wrote about it in our previous post (5 good marketing and HR websites for a small business). If you ask a question related to your business, you can be reasonably certain that you get multiple good answers. As a small business, you have many questions and few answers. You can use LinkedIn Answers to tap into expertise of many people. Just ask.

Alternately, you can position yourself as a subject matter expert in the subject you want to be viewed as an expert and answer questions posed by others. The more ‘best answers’ you accumulate, the better you will be treated an expert in your subject.

In my opinion, the above covers the ‘high impact items’ of how LinkedIn can help small businesses. That gives you 80% of the value understanding 20% of the items. If you are really interested looking for a laundry list (other other 80%) of all you can do on LinkedIn, here are a few links that will help you do just that.

20 Ways to Use LinkedIn Productively

Ten Ways to Use LinkedIn

The Right Way to Use LinkedIn

Picture credits: 1. LinkedIn (top): Mario Sundar 2. Enlightening (middle): Jurvetson 3. Sunset & the Thinker (bottom): Esparta

Small businesses have different DNA. If you are a small business, you are small, with limited budgets and they have a lot to do. You constantly have this urge to ‘scale up’ – in revenue and people. You have meager resources and employees. And face high risk. So want stuff to work out-of-box and give you returns.

That’s why we have put together 5 great resources for small businesses that will help you. These resources will give you strategic assets. Like if your employees use Manager Tools, they will be far better employees right away and that improves the quality of employees you have without having a pay a bomb to a soft skills trainer. The other resources below are equally good.

Marketing voices

Marketing Voices is one of THE best Internet marketing podcasts I have ever heard. Jennifer Jones, the host, interviews the who’s who of social media marketing and you get to hear the cutting edge of Internet marketing. Of late, the podcast has become shorter and better. Jennifer Jones hits the nail on it head and gets it over with. There are no long conversations. She does not look to fill the time as much as she wants to give the most within the shortest span of time.

SpyFu.com

SpyFu is a very different resource. It’s a website where you can key in a competitor’s website and get great competitive insight on PPC (pay per click) and Organic search results. E.g. You can get how much ad budget your competition spent, on which keywords, who the major competitors for certain keywords are, and on which keywords does the website rank high in organic search results.

Manager-Tools

Manager-tools is a podcast that gives ‘tools’ to managers. Michael Auzenne and Mark Horstman strike a conversation every week about soft skills – how to manage your time, how to leave voice mails, how to have one-on-one conversations with people who work for you. What I like about the podcast is that the suggested behavior is sensible and practical. Though they do talk about what managers do wrong, they do that well and only enough to make the point.

If you wanted a mentor who taught you or your employees what to do, you can find one in Manager-tools. If used well, Manager-tools can convert ordinary employees into strategic assets and can influence the culture of your company positively.

LinkedIn Answers

You may know LinkedIn but am not sure if you know the power of LinkedIn Answers. Whatever questions you face in your business, you can pose that in LinkedIn and get very good responses to your questions. What’s even more wonderful is that you can search the archives and see if someone else posted the same question and check out what the responses have been. It gives you insights from multiple experts (or not so experts) at the same time and saves you time.

Entrepreneur.com

You can find many articles of topics important to you entrepreneur.com. What I like about entrepreneur.com is sensible advice. E.g. Check out this article - How to Sell in 60 Seconds. The author upgrades your selling capability. There’s a large archive of such articles.

I hope you enjoy these resources. If you know some other resources that are as good as or better than these websites, please let me know. Many small businesses read this blog. You will be able to help them by telling me.

Picture credit: tanakawho

You may find it a little hard to believe — at least I did in the beginning — that one of the biggest challenges faced by small business owners is not lack of demand or depressed sales but a poor choice of where you source capital and where you deploy it.

Nearly 84% entrepreneurs don’t make smart choices about their funding source. That’s the finding of recent survey done by UK-based Bibby Factors Northwest.

The outcome is that nearly half these ventures fizzle out within the first three years of operation. Just imagine — what a colossal waste of someone’s time, money and dreams!

Picture credit: http://www.flickr.com/photos/amagill/

After a careful analysis of this situation, I came to the conclusion that at the root of this problem is not economics but psychology.

At the first sign of trouble, a typical response of a small entrepreneur is either to get his bank overdraft extended, or dip into his savings. Both are big mistakes, yet 84% businessmen respond to a cash crisis in this knee-jerk fashion according to the Bibby researchers.

As I understand it, this happens because, a small entrepreneur, who often has a lot of his personal savings at stake in the venture is typically inward-looking and averse to taking big exposure, usually to his own detriment. Unfortunately, this kind of “tunnel vision” on capital issues does not help him in the long run. Instead of insulating him from risk, it turns out to be a costly decision.

“Let me tide over this crisis” seems to be the response as opposed to tackling more permanent funding source of deployment issues.

Cash flow crisis is typically caused not because of lack of funds but because of incorrect way of:

• Where the funds came from
• How the capital was deployed

Short term source of capital puts pressure on your cash position

Bank overdraft is short term capital. If you dip into savings, they last only for a short time. If you buy machinery by taking a short term loan, the machinery will only pay you back in a few months if not years. But the bank overdraft will not wait until so many months. It has to be paid off immediately. Similarly, if you buy the machinery by dipping into your savings, that cash will get locked in.

In both cases, if you change the underlying business economics, you don’t have to dip into your savings or draw from bank overdraft.

To understand the business dynamics and to figure out which source of funding is more appropriate for your business, I would suggest the following resources to small business owners:

• Turn to accounting and financial professionals. A quick review of financial statements by a trained eye can help detect slow collections, poor financial management, overextended accounts payable or other warning signs, early before the house gets on fire
• Financial institutions. Visit a bank for assistance with a line of credit, an accounts receivable loan, or factoring or other such vehicle to ease the cash crunch
• Join Business groups. They are the best source for peer consultation. Get peer consultation.

Track your cash flows to get early signals

How many aspiring entrepreneurs venture into a business without so much as a primer course in business accounting?

Yet proper financial management is crucial to your business’ survival. Do your Receivables and Payables play nice with each other? Are expenses rising faster than profits? Is one skill more in demand than the other? How much do you need to meet your monthly expenses? Can you take a paycheck this month? All the answers lie in the numbers.

Let’s face it — as businesses grows; cash difficulties are bound to arise. This is especially true of start-ups, during sudden growth spurts, or during shaky economic times.

The real danger lies in failing to plan for such crisis, which can result in over-trading.

Other key causes of cash flow problems could be inadequate budgeting of income and expenses, not watching receivables, not setting goals, and trying to handle the company’s financial management single-handedly. Whatever be the reason, companies that are cash flow negative are simply spending more than their earnings.

Here are a few practical tips to avoid cash flow issues

Negotiate better terms with your customers

When taking on longer-term projects or clients, negotiate in advance for regular payments. Ask for payment at the beginning of projects and ‘front load’ invoices rather than ‘back loading’ them. Offer discounts for quick payment. Bill promptly and avoid slow pay/no pay customers. And finally, exceed customer expectations so they don’t have any reason to withhold payment!

If your customer does not pay on time, consider penal interest and implement it. It saves a lot of time and hassles, if all business terms, especially payment terms are discussed well in advance with a partner, especially an overseas partner, with whom disputes are harder to settle due to the distance issue.

Renegotiate or postpone payments

Check out if you can postpone your payments by either part paying the amount or by postponing it all together. If you have good relations with your vendors, and if you had helped them before, they will be willing to help you by allowing you to pay later.

Some of your payments can be brought down into monthly cash installments instead of a large cash payout.

Do background search and reference checks on new customers

Look before you leap. Perform credit checks on every customer you acquire. Ask for — and check out — credit references from past clients. This is quite an acceptable practice and no one minds it. Call other businesses that have had a relationship with the client. Keep your ears tuned in for any discordant note, a moment’s hesitation, and reluctance to speak about the client. These could be dead giveaways on the client’s past conduct in the marketplace.

Refinance your loans if it makes sense

Lookout for cheaper funding sources. Suppose you took loans on different interest rates from various sources. If your credit limit permits it, club these into one account on the lowest rate of interest with one lender. Or, you may be able to consolidate two or more loans into a lower-interest account and improve your cash flow. Explore these options.

Profit does not mean cash flow

Remember that you may be profitable – accounting wise. But if the invoice you raised is sitting with the customer, then your cash flow gets affected. In a bad situation, you may be unable to pay all the bills or salaries on time. Profits are important, but every decision has to be carefully weighed against its effect on cash flow.

Hold on to cash

Spending is easy. Earning is difficult. When you have cash, don’t take that easy decision. If you are spending a lot on expenses that are not necessary you can save on your cash. Are you spending on office décor, on full page color ads, on a color laser printer when an ordinary one would suffice? Don’t. You might trip and fall on the other side of the gorge. Hold on to enough cash reserves so that you can fight unforeseen cash flow issues.

Opt for credit insurance

Credit insurance can help mitigate the risks by protecting your bottom line against nonpayment–or even slow payment–of invoices, especially while dealing with overseas partners. These days, there are unit linked plans (cheaper than the usual insurance instruments) for every risk. However negotiate for better terms with at least two three insurance providers to cut the most cost-effective deal.

Try barter

You could reduce the strain on your immediate cash if you need goods or services from someone and can barter goods or services in return. Supposing there is a copywriting project posted by a team of website developers. They are looking for someone to write content for their site. Since they are

professionals like yourself, instead of cash payment for your services, you could opt for services in kind — get them to do some good graphics for your website that would boast your business. Of course, this option can be used only in limited circumstances.

The ideal situation for you would be to not even hear about a cash flow crisis. But that is not how real world is. You will run into cash flow issues. You have to think about strategic cash reserve so you can never run into crisis. Remember, when things get tough, the tough ones get going. If you have to become tough, plan for it.

Picture credit http://www.flickr.com/photos/crazyneighborlady/

Welcome to this week’s p2w2 Small Business Links (p2w2-SBL) post. In p2w2-SBL we bring you the best resources available on the Internet on this topic. Today, I focus on how twitter can help your business.

Create unbelievably valuable network, meet potential collaborators and find extraordinary business leads

“Just by way of writing, reading and responding to each other’s tweets, unbelievably valuable networking contacts have become familiar workday presences. I’ve met and hired 3 subcontractors for my business, met numerous potential collaborators and even found extraordinary new business leads. I’ve been to numerous networking and social events (lifesavers for a WAHM in a new city!). Interesting, creative, challenging, thoughtful and very deeply caring people have come into my life. New ones seem to appear every week. Twitter has served up answers, opinions and inspiration.” (Laura Fitton: Ode to twitter)
“Do you have a brick and mortar business? Connect with your local clientele by using TwitterMap.com or TwitterLocal.net. These sites will show you all the Twitter updates happening in any given geographic area. Sign into your Twitter account and enter “L: city, state” and then visit TwitterMap or TwitterLocal to find “Twits” near you.”(Carrie Hill: Small Business Owners Need Twitter and LinkedIn)

“How could I hire a stranger to work on an important project? Simple. I knew enough about her from Twitter to be confident she could do the work. Her authentic behavior in the [Internet] told me she was intelligent and articulate. When we briefly stepped into the real world, I quickly confirmed this. And her work was outstanding.
The most valuable social networks, and the most valuable contacts within those networks, are based on trust. Most of my Twitter friends are people I have never met in person and with whom I had no connection prior to twitter. Twitter provides exactly the right environment in which to build trust.”(Joel Postman: twitter is the new anti-metaverse)

twitter is the new discovery channel

“Twitter has become my best way to discover. Discover cool websites….discover blogs, podcasts, even breaking news… It has been an amazing and inspiring resource.” (twitter is new discovery channel)

“We also combine the power of our collective news/intellectual interests. I get the “best of” ideas that various Twitter friends read or create, any given day. This magnifies the depth and breadth of information I consume.” (Laura Fitton: Ode to twitter)

Twitter is a sounding board. Get advice, directions and support

“Twitter is a sounding board. CEOs of large companies ask questions about products and strategy. Small businesses can do the same.” Joel Postman

“I use Twitter to ask for advice, directions, support, and to ask others for their open-ended interpretations to general questions.” (Chris Brogan: Newbies guide to twitter)

Build traffic; Engage your customers and get insights into your business

Martin Bowling

Twitter helps engage your customers by offering them valuable information and insights. By talking to your customers in a high trust environment, you can get insights into your own business with unmatched depth and volume.

“Building links to a small business Web site? Follow people who can help you out, engage in the community and when they call for help/suggestions, offer yours” (Carrie Hill: Small Business Owners Need Twitter and LinkedIn)

Twitter is Answers (like Yahoo! Answers), a chat room, a water cooler, an advertising tool and more rolled into one.

If you realized twitter’s potential the first time you saw it, you may be a genius. Because, not even Evan Williams, its founder, could have guessed how useful twitter was going to be. Lots of people, including me, can’t figure out the first time why they should use twitter.

“Frankly, twitter went from “what the heck” to “how the heck did I live without this?” very quickly.”

“I began to see how creative/productive Twitterers can inspire. I used it to surround myself with role models. I started getting to know people, and to enjoy the company, humor, conversation and great links.” (Laura Fitton: Ode to twitter)

Twitter is Answers (like Yahoo! Answers), a chat room, a water cooler, an advertising tool and more rolled into one. You can derive value out of it by spending time and connecting with people on it.

Picture credit: Sitting on the toilet http://www.flickr.com/photos/cambodia4kidsorg/

A month after a young lad had been hired, he was called into the manager’s office.
“What’s this?” the manager asked. “When you interviewed with us, you told us you had five years experience. Now we found out this is your first job!”

“Well,” the young man explained, “in your ad you said you wanted someone with imagination.”

Get to the right advice. Small business hiring is not that difficult

Hiring in startups and small businesses is not easy either. You have no brand, no money, no perks, nothing.
What’s in it for the new recruit? Why should she join you? Even if she wants to should you hire her? There are many questions that a small business faces. But there are few implementable answers out there.
“Hire great talent,” does not tell you how to do it.
Excuse me. I certainly want to. But how do I ‘hire great talent’? Where will I find them? How do I tell if THAT person is “great talent” or not?
Sadly, there are very few good answers. Very few. That’s why I thought I will do a post on this topic. This is a p2w2 Small Business Links (p2w2 SBL) post that brings the power of great articles to you.

Offer responsibility, access to management and flexibility

Employees of large companies crave for what small businesses can offer. “By offering prospective employees real responsibility, access to management, and work schedule flexibility, your small business can compete in today’s competitive hiring market.”

Tap your network, attend conferences, and post on your website

For a start up or small business, the best way to reach out is through your own personal network. Ask friends and relatives who might know the person or who may have friends in the target network (like if you want a software developer, then a community of software developers) you are looking for.
Second, attend conferences and meetings where your target recruits network. Posting in social networking websites where your target recruits network is also a good idea.
Third, something that most overlook, post the job description of the jobs you are trying to hire for on your website. Those who want to join your company, look at your website. Are you there to pick it up?

Realize that hiring is all about probabilities

“Hiring is all about probabilities. When we evaluate a candidate, we are basically just trying to predict whether that candidate will be a success in the position being filled. We’re trying to know the future, but we have no prophets and no Oracle. So, we use various indicators that we believe will be correlated with future success. But there are no certainties. Sometimes all our indicators are positive, but the employee just doesn’t work out.” Eric Sink

If you own a butcher shop, don’t hire vegetarians. Hire people with passion for your mission

“Hire people with a passion for your mission,” says Robert Kiyosaki
“One of the reasons Steve Jobs is the entrepreneur of the era is because he has missionaries inside his company as well as outside–Apple Computer’s customers are missionaries, too. Jobs is successful because he is true to his personal mission and demands the same from his staff. Jobs’ mission is at the core of Apple Computer.”

Hire better than yourself. Hire infected people

Guy Kawasaki says:

Hire better than yourself
“I have come to believe that we were wrong–A players hire A+ players, not merely A players. It takes self-confidence and self-awarness, but it’s the only way to build a great team.”
Hire infected people
“Is the candidate infected with a love of your product? Because all the education and work experience in the world doesn’t matter if the candidate doesn’t “get it” and love it.”
Apply the Shopping Center Test
“Suppose you’re at a shopping center, and you see the candidate. He is fifty feet away and has not seen you. You have three choices: (1) beeline it over to him and say hello; (2) say to yourself, “This shopping center isn’t that big; if I bump into him, then I’ll say hello, if not, that’s okay too;” (3) get in your car and go to another shopping center. My contention is that unless the candidate elicits the first response, you shouldn’t hire him.”

Date before you marry

“Try before you buy” says Dharmesh Shah. “You should make it a practice to have people work for the company before you hire them. Though hiring an employee you don’t know is not quite as big a commitment as getting married, it can often be almost as risky from a startup’s perspective. (Apologies for the metaphor, it is almost 2:00 a.m. here in Boston and I can’t think of anything better). In this model, potential employees (especially those in the technical ranks) are considered to be in a “probationary” period (what I would call the “dating” period) for some length of time. During this period (which was usually 60-90 days in my case), either party has the ability to declare that the relationship is just not working out and move on – with no misgivings on either side. This is made clear very early in the process.”
There are implementation issues but the concept makes sense. You can use ‘probationary’ period more effectively. I suggest you read not only the article but also the comments below it because they give you a perspective of differing views on this topic.
There’s enough juice in all these articles to think about. Do think about it and pen your thoughts in the comments.
Picture credit: http://www.flickr.com/photos/marcogomes/