Using Instagram To Tell Your Story

“I hate doing the social media thing.”

My friend Sam and I sat at the pub, munching on loaded cheese fries. Sam is a content editor for a small, independent publishing company. The company wasn’t doing well. It believed in the works it published but had trouble finding buyers for the material.

“It just doesn't feel right. I’m not a salesperson. I know we have to let people know we’re out there but it just seems so….shallow.”

As in most small businesses, Sam wore more than one hat. In addition to editing, she was tasked with managing the business’ social media accounts. This was her problem: She believed that selling, and by extension social media, didn’t reflect the goals of their brand. She saw social media as being vanity focused.

It’s true: Social media is filled with pointless ego stroking and unrelenting consumerism.

But here’s the reality: If your small business is adding to that noise, then you’re doing Social Media wrong.

Our day is filled with advertising from every angle. We are exposed so much to it that we have become inoculated against it. We resist it. We click to close, scroll past, and tune out.

I don’t like being ‘sold’ to, especially not while browsing social media. I use these platforms to connect to people I’m interested in. Why should it be any different for my business?

Businesses with bad social media strategy forget our presence on these platforms is an extension of who we are as people. Would you sell, cajole, offer discounts or promote obnoxious suggestions like “Rainy Mondays are the best days to get a latte!” if you were posting on your personal feed?

Hopefully not!

So why do we act differently when managing a business account? We spam post because we feel pressured to promote. Or, just as bad, we post infrequently until something comes up, like Small Business Saturday or a big event. We respond with a flurry of poorly-timed sales material only to hear the sound of crickets in response.

It isn’t the platform isn’t to blame for the awkwardness- small business owners are missing the point of social media. Like my friend Sam, they misunderstand the possibility because they are responding to the pressure. This reactive nature causes them to miss out on the relationships social media was designed to build.

In this article, I’m diving deeper into Instagram. Right now, it's the best platform for creative businesses who shudder at the thought of direct sales.

Is your business right for Instagram? Check out my Instagram Essentials article covering what type of business’ thrive on this platform, the basics behind reading your analytics, and tips on creating responsive content.

Instagram is NOT a sales platform.

It’s a marketing platform.

“That sounds suspiciously sales-y.”

- You

You have three things in your business working together to help you reach your best clients and create income:

• You Brand, or message (Here’s why Strong Branding is important)

• Advertising, AKA that ‘hard sell’ we don’t really like to do in small business (and why traditional methods don’t work well for us anyway)

• Marketing, or communicating your brand

Some social media platforms, like Facebook, lend themselves well to both advertising and marketing. Here’s why spending money on Facebook Adverts works.

Instagram? It really doesn’t.

Why? Instagram wasn’t designed to be monetized.

Instagram is a place to showcase, tell stories, and build your brand.

Only recently has Instagram’s parent company, Facebook, connected the platform to Adverts and started to push sponsored content on the platform. Facebook also changed the platform’s content display from showing posts chronologically to….whatever crazy metric of the week they feel like.

Even with these changes, Instagram’s design is still too simple to be monetized well. Posts show up in the feed as a single image with caption text that requires additional action to see if it exceeds 140 characters. In addition, Instagram’s users choose this app because its streamlined layout doesn’t work with online direct sales methods. There are no banners or pop ups. It doesn't draw you into an endlessly scrolling sales funnel.

The platform isn’t set up to sell and the user base doesn’t want to be sold to.

What is Instagram good for?

Storytelling.

Or- marketing. Instagram is a visual serial-novel that connects, builds, and binds you and your fanbase together.

Here’s how to use it to tell a story that draws dedicated fans into your business.

How to use Instagram to create your ongoing story.

There are many strategies you can use a strong Instagram account.

I like this method because it:

• Engages me on a personal level, even though I’m managing a public brand

• Keeps me consistent, even when I’m uninspired

• Never leaves me wondering “what now?”

Step One: Choose Your Themes

Crafting an engaging Instagram is like writing a novel. Your main plot is what your business does. Social media strategies that work aren’t focused solely on telling this one story- especially when your ‘main plot’ is obvious.

Maeva’s Coffee sells coffee. If we only post photos telling people to “buy this seasonal latte” or “come to this coffee event”, our Instagram becomes pointless. Users quickly become uncomfortable when they come across inauthentic accounts on their personal feed- and just as quickly block them.

Instead of focusing on your “main plot”, choose 3-5 themes to focus on in your posts.

Here’s what I have for Maeva’s:

Only one of these has anything to do with a coffee shop. The rest could be themes from any shop or anyone’s personal Instagram.

Here are three common questions I get when consulting with small businesses on how to build an engaged social media audience.

Question 1: “How do I find a good theme?”

Choose something you care about. How?

Scroll through your camera roll and look at what you take photos of. The things that cause you to stop, pause, and capture an image are going to be an extension of you- and, by nature, your business.

Authenticity is an extension of what we organically engage with.

Question 2: “But all of my photos are of my kids and dog. Should I really use those?”

People buy from people- not businesses. Showcasing your behind-the-scenes life might fit perfectly in your business.

My favorite local example of showcasing the family aspect of business ownership is McNelly’s Farmhouse Love on Instagram.

At first glance, “kids”  and “furniture construction” don’t seem to go together. But Laura’s story shows the hidden side of what it’s like to build a production business and raise a family. The dynamic is beautiful.  

Question 3: “Although I’m in charge of our social media, I’m not really in charge of the business. How do I choose themes for a non-profit or small company where I don’t personally own the brand?”

Let’s take the principle taught in question one and reverse it.

Instead of looking through your camera roll, look at the photos your business is tagged in. Ask yourself how these photos communicate what people are experiencing in your business. What are they looking for? How do you fit into their story?

Treat this like a plot twist. Traditionally plot twists are designed to answer questions before the reader thinks to ask them. By finding out what people communicate your business with you find out the story people want to tell with it.

Step Two: Write down a few key words to describe each theme and its audience

Plants are a theme in the Maeva’s Instagram. How does that fit in with a coffee shop?

Most coffee shops frame their Instagram around customers or, more specifically, having a lot of them. Who wouldn’t want to showcase how busy their shop is? It feels good on your ego!

The busy times are great but my favorite moments behind the counter are when I witness moments of solitude. When I see someone nestled into a corner, reading a book, or just looking out the window at the sky with a warm latte in their hands.

I cherish those moments in my own life. Knowing that I’ve created an environment where other’s enjoy creative solitude feels like a private achievement.  

Plants connect us to that same experience of solitude, steady growth, and understated beauty in life. The “plants” theme on the Maeva's Coffee Instagram carries this theme throughout the entire experience. This includes captions with minimal text to tell a simple story of quietness, stream of thought, and the human-stuff we experience on a deeper level.

There’s no need to explain this to our audience. The people who connect with these visual moments already feel it.

If you read this and think that not everyone on your list is going to like this type of engagement...

Remember: Not every post fits every follower!

Look at the number of followers you have. Is it 100? 1,000? Can you wrap your head around how many extraordinary, dynamic, multifaceted, different individuals you’d have if they were all gathered in a room?

Using themes to showcase different aspects of your own business’ personality will help you connect with different groups of people in your base.

Going for widely accessible posts, either with the hope of blanket-attracting a larger fan base or appealing to the greatest portion of your existing base, is a sure-fire way to post a flop.

Why?

We are in a niche economy. As mentioned in the start of our social media series, your social media goals shouldn’t include getting more fans, but building ongoing relationships with the right people for your brand.  

Step Three: Rotate through themes day by day.

Never post two photos of the same theme back to back.

If you go through creative spurts where you take 100 plant photos all at once, save those photos in a file to use when you aren’t feeling creative. Having a file of material to draw from is a great way to create a consistent, balanced story.  

Remember a balanced story is an honest one.

 

The Honest Story Teller

Does all this attention paid to crafting a story take away from its authenticity?

I’d say not. A social media account is only as authentic as the person behind it.

The methods you use won’t make you more or less ‘real’ in the eyes of your base. Choosing to be an honest story teller is what will set you above the sponsored content and needy-sales posts in Instagram’s feed.

In college, I played classical music at a semi-professional level. I was even paid to sub in some well-known regional orchestras. Classical music is 99% behind the scenes- hours spent in a practice room or at rehearsals that drag late into the evening. We’d invest hours to hone a piece, perfecting the phrasing and working together create a work of art that connected emotionally with the audience. Did the audience think our music was inauthentic because it was created with intention? No. On the contrary, I’m sure we there would have been some raised eyebrows if we had just “winged it”.

Authenticity in social media should be a big concern for small business owners.

We feel guilty for promoting things we are proud of, and feel pressured to use live video or Instagram stories to balance any doubts.

‘Live feeds let the viewer get an unfiltered experience with our business. I’ve been told that’s great for authenticity!’

-You

No one cares.

There will always be fiction and nonfiction.

An absence of detail isn’t a lie. Remember, a great biography isn’t fake because it doesn’t include every exacting detail of a person’s life.

Great stories use detail to draw us in. The right amount brings flavor to the story but leaves space for the reader to connect the story to ourselves.

When we categorize Instagram as a tool for storytelling rather than selling, we create opportunities for real, human connection through our business’ social media experience. You are writing the greatest biography you will ever live- the story of you and your business. Don’t be afraid to tell it!

Are Your Labor Costs Out Of Control?

Imagine this,

You own a little cafe or a brick and mortar shop on a good street. You’ve got a handful of staff. They’re all good people.

Business seems fine. You have traffic; you’re busy on weekends. In fact, sometimes you’re so busy you kick yourself for not putting more people on the schedule because the busiest hours have you bursting at the seams.

But then you sit down to payroll and find the numbers don’t add up. You process payroll and hope your weekend deposits hit the account before the checks clear on Monday.

Everything seems to be going so well...so why is payroll such a killer?

You don’t want to pay your staff less. They work hard and you want to give them the best you can. But you know you can’t go on like this- skipping your own paychecks, putting your own money in to boost cash flow, and juggling expenses on credit cards hoping you’ll catch up later.

“I don’t have to imagine this….I live this!”

I’ve been there.

A lot of variables affect staffing in small business. Even worse, under or over staffing often masks deeper issues like poor process management or undertraining.

All good business practices begin with data, the right data. Yet, finding the right staffing balance for your business is tricky without a guide to follow.

When we started Maeva’s Coffee, I found nothing to help me understand the ins and outs of staffing.

The successful businesses I looked to held their numbers close. And the unsuccessful ones? You know the ones. They look great on social but are bleeding money through overstaffing while quietly racking up bad reviews because of slow service.

They just went of business.

In the end, all I had were general articles stating “labor costs for food service should be around 30% of revenue” and, my sister, a career barista, telling me that standard barista wages for our region were $9/hr plus tips.

Those variables are a good starting point for hiring and evaluating your year-end P&L, but if you’re losing money through

• overstaffing

• inefficient service

• or high turnover

you can’t wait a year to make scheduling adjustments.

In our business, a single hour over-staffed means we have to bring in an extra $26 in revenue to break even. If four hours are wasted a day, which is easy in a shop with both a morning and evening shift, that adds up to an extra $3k in sales needed per month just to do as well as an optimally staffed business.

So what’s the solution?

How many people should I have on schedule?

I’m going to show you a calculation you can use to optimize your shop’s weekly schedule.

If your business is retail-only store, where you aren’t assembling or producing anything, the calculation is simple.

First, find the industry standard for your business’ niche.

Here’s how it would work if you ran a clothing shop:

Industry standard for annual labor (as a percentage of gross revenue) is 15.1%

If your staff’s wages are $9/hr, $9 is about 15.1% of $60.

This means any hour in which you sell $60 or less, you should only have one person on staff. That’s your breakeven point.

When do you add a second person? It depends on your business model.

Let’s dive further into our clothing shop example and pretend we have a boutique dress store. Formalwear requires more customer attention and additional services, like fitting for tailoring. You might decide to add a second staff member on any hours averaging more than the minimum ($60) to make sure your customer service is top notch.

It’s a risk though. You can’t predict exactly how much you’ll sell in a given hour. If you have two people on staff and sell less than $120 in revenue/per hour- you’re losing money.

Most small businesses assume some loss in labor cost. We value customer service more than our corporate counterparts. We cover this loss by hiring staff who perform better than industry standard.

Niche small businesses attract staff who have great energy, a knack for multitasking, and we invest more in training.

In our formalwear example, a veteran staff might be able to serve three prom-dress seeking customers without a problem. If this is so, we might not decide to schedule a second person until sales are averaging $300-500/hr. That’s an incredible boost to the bottom line over industry standard!

Let’s take this back to a simple clothing boutique, one that doesn’t have time consuming services like tailoring, etc. To maintain good customer service and lessen the chance of employee burnout, I recommend adding a second person at 1.5x the volume of the previous.

Assuming that each staff made $9 per hour:

<$60 revenue (sales) per hour                 1 staff

$61- 90 revenue per hour                         1 staff

$91- 180 revenue per hour                        2 staff

Those are the basics. Here’s how I take this a step further and fine tune to take into account behind-the-scenes labor when creating weekly schedules.

A Look At Maeva’s Labor

At Maeva’s, our small and mighty coffee shop at The Milton Schoolhouse, we have three staff in our kitchen. They come in for a couple of hours a day to create our fresh baked goods. In addition, I pay myself for office work, scheduling, etc.

Both of these payroll expenses need to be considered when thinking about how much money we have to budget for staffing behind the counter.

I need to remove these non-shop payroll expenses from our industry standard to determine how many people per hour we can afford behind our counter during operating hours.

Industry standard for coffee shops is 30%- but the number is 30% of total revenue. Our kitchen and office work comes at large intervals throughout the week- we don’t have a constant payroll expense for these. I may have a $50/hr payroll expense on Mondays when our shop is open and our kitchen staff are hard at work receiving deliveries, making soup stock and prepping food for the week. But Mondays are our slowest day- we’d never see the $150 sales hours to account for it!

We can’t work with the 30% industry standard hour by hour to staff our counter. That is why we need to find out:

1. what percentage of our weekly labor is accounted for in the kitchen and office

       and

      2. subtract it from industry standard

to find a true percentage-per-hour on which to base our scheduling.

Last week, our kitchen and office payroll was $960.86, or, 37.6% of our payroll total.

Let’s forget the actual payroll expense and gross revenue of our shop and use a nice round number to find the percentage we should be using to calculate how many people to staff our counter by hour.

Assume revenue was $1,000 in one week and 30%  ($300) was spent in total payroll.

37.6% of that $300 was kitchen and office work ($112.80) - leaving $187.20 for your counter staff. $187.20 is 18.7% of total revenue.

We can now use this 18.7% to calculate hourly staffing in the real Maeva’s Coffee.

The average hourly wage of our staff is $9.50/hr. If I add an additional staff member at 1.5% the breakeven volume, staffing would look like this:

$0-76.5 / hr in sales revenue                 1 staff

$76.5 - 153 / hr in sales revenue            2 staff

$154 - 229 / hr in sales revenue             3 staff

$230 - 306 / hr in sales revenue            4 staff

Note: This is a VERY LOOSE calculation that doesn’t take into account your processes, your shop’s layout, how much automation your shop has, etc.

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If you haven’t already put the processes and expectations in place for your staff to handle what you’ve calculated….and you find you are overstaffed... you MUST implement changes slowly.

Getting your current staff up to performance standards won’t happen overnight. You’re setting yourself up for disaster if you expect your current staff to be handling 20-50% more an hour on the next schedule without communicating these expectations and giving them the resources to do so.

Help! I’ve overstaffed. What do I do?

You’ve struggled along for years making very little profit from your business, knowing payroll is out of control. But you’re also anxious about putting fewer people on staff.

Will they be able to maintain good customer service if you set the bar higher?

What if they just don’t have the skills to handle the increase?

12 months ago, I was in the same boat with Maeva’s Coffee. I was fine working long shifts by myself, confident in my ability to multitask during fast-paced hours. During slower times, I always kept busy with extra cleaning and organizing.

One surly barista complained they didn’t like closing by themselves because it was too much work. I reacted by overstaffing. I didn’t want to be an inconsiderate, hard-ass boss after all!

The effect was instant. Overstaffing lead to boredom. In only took a few weeks morale began to slip.

One night, I was covering for a staff member and realized there was nothing to do. By the time our evening shift came on, there was literally nothing extra to stock, to dust, to wash. I was only on shift for an hour and I was dying!

I scaled back to where we had been immediately and was relieved when our disgruntled barista moved on.

After the experience I took a more critical look at our numbers to see what we could do better. Our shop labor expenses were averaging 22.3%- 3.6% above where we should be according to industry standard.

Here’s how I brought payroll costs under control without stressing out our staff:

I tested the staff’s efficiency.

I ran a speed test on our baristas after business hours. Using a series of order tickets from the day’s business, I had our baristas make the drinks while being timed. To make sure quality wasn’t sacrificed, our staff took turns tasting and temping the drinks being made by each other during the test to verify consistency.

This wasn’t able to show how they could multitask on a solo shift but it gave me data to support my assumptions of who my strongest staff were.

I didn’t fire or discipline low-performing staff. As I had expected, newer staff were slower at making drinks. I paired them with our strongest performers during our highest volume shifts; shifts where we naturally had two people on behind the counter. I asked our best staff to take time to share their own insights, tips, and tricks with our lowest performing staff. At the next testing, average production hovered just under a minute and a half with a deviation of 6.3 seconds. No one was lagging behind.

I met with staff and started a conversation-

about their own individual strengths and weaknesses. My full time staff and I talked about how making a commitment to longer solo shifts would leave more room for hourly wage increases and paid time off.

Think about it: My best staff can work by themselves happily and perform well above industry standard, working $80-100 sales hours without any problem. By putting them on shifts that stretch into our daily rushes just a bit, they typically save me $38 per day in labor. I saw an opportunity to split the savings as an incentive. Our best performing staff make 23-27% more than our new or slower performing staff.

Pro Tip: Conversations like this work at Maeva’s because, if you haven’t already noticed through this blog, I’m open with numbers. My staff are smart people, most of whom are in school for business or have aspirations of someday running a business of their own. They understand that even a simple business like our small coffee shop is full of complexity. By creating an open environment where our staff have access to many of the same financial reports I use, I’m able to make changes to our business model more easily because we’re all on the same page.

I made changes to the schedule gradually.

I knew our baristas could handle more traffic. Pacing, flow, multitasking, etc have to be learned by practice. However, much like weight lifting, you’ve got to work your way into the challenge.

On shifts I found we had been overstaffing, I started to schedule myself as that second person.

My staff all know that, in addition to Maeva’s, I run operations at The Milton Schoolhouse incubator and consult as well. I’d tell the barista on bar upfront “Hey- I’m super busy. I’m going to sit over here and work on x but, if you need help I’ll be right there.”

At first, I’d jump right in at the first sign of stress. Gradually, I’d let them work through longer ticket lines on their own. They began to find their flow. After a week or so, I’d get up to help and they would motion me to sit back down. “Hey, you keep working on what you’re doing...it’s only a couple of drinks. I’ve got this!”

The key to making this successful is framing your intent. I wasn’t sitting in the corner waiting for them to stress out so I could patronize them for not being able to handle the workload. I was their spotter at the gym, jumping in as they grew comfortable pushing their limits in a safe environment. When they changed their workflow and discovered new ways to multitask, we’d celebrate together.  

Keeping your payroll expenses under control is critical to growing as a healthy business.

Maybe you’ve run these calculations and still aren’t seeing the results you want for your business. Perhaps your brand isn’t up to your standards of quality, customer service is still poor, or profitability isn’t high enough. In my next article on staffing, I’ll help you troubleshoot these issues as we talk about

• How to schedule with the happiness of your staff in mind

• Creating an efficient shop layout and automating your process to increase productivity

• And lowering your labor costs by offering better training and higher wages

Case Study: Financial Lessons from a Rogue

Do you know the biggest barrier first time business owners face?

Money.

Money is cited as the biggest barrier to starting a brick and mortar, but lack of capital doesn’t have to stand between you and your dream.

The Milton Schoolhouse is filled with success stories that began with budgets under $10k. What follows is a case study of our favorite bootstrap story of 2017- The Rogue Theatre.

The Rogue Theatre is a nonprofit startup. It was completed in six months for just $7.5k. What’s even more impressive is that, from their very first show, The Rogue Theatre has been a successful, full-fledged entertainment center for the Alton community. It not only operates in the black, but provides paid opportunities for actors and entertainers.

Are you interested in learning non-traditional funding strategies that can get your business started and operating in the black in under a year?

Join us on February 11th for our Business Plan Class (link to Class Sales Page). This class has been fully updated for 2018. When you attend, you’ll get access to our brand new expansion- The Guerilla Capital Guide.

In this class we'll cover:

• How to tailor your business plan toward non-traditional funding
• Creative ways to find and save capital
• And the nitty gritty behind planning and executing a start-up that grows without crippling debt.

Early Bird Registration is now open!

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Does Non-Profit have to mean No Profit?

When Jay and Chantel Harvey decided to begin The Rogue Theatre, they wavered between starting a for or non-profit structure.

Using a non-profit structure would cement their brand as a true community-focused organization and make it easier to acquire grants and gifts. However, for-profit structures are easier to manage. If they organized as a for-profit business, they wouldn’t need worry about potential vision-clash between a  Board of Directors and the paid staff of the organization. They make decisions for the business without strings, including major financial decisions like their salary. 

Although they wanted to affect their community in a way that fit the character of a non-profit organization, two things bothered them about the non-profits they had been exposed to:

• Being forced to compromise their brand and vision to appease donors

• Terrible financial waste

Non-profits have bad reputation for making ineffective financial decisions. A Board of Directors can have clashing personalities, egos, and motives that make it difficult to utilize funds wisely.

Jay and Chantel did decide to organize The Rogue Theatre as a non-profit, but they mitigated the potential for impassable financial stress with great habits from the start. The lessons behind this theatre’s start-up are a smart move for any entrepreneur looking to create a dream on a dime.

Lesson One: Start with Good Financial Habits

If you take away only one thing from their story, let it be this:

starting with good financial habits is critical to the growth of any business.

If you are like most entrepreneurs you are accustomed to balancing our personal or household budget, but not much more. When you add multiple zeros to any budget it’s easy to lose perspective on how spending practices affect the bottom line. Cultivating money management skills from the start will not only grow your business faster, it will also put you leagues ahead of the competition when the time comes to make next-level growth decisions.

Good financial management can be tricky for a non-profit. Jay and Chantel dealt with this by carefully vetting, curating, and editing their decisions for their Board of Directors by looking not only for skill and network, but financial acumen.

This led to a high level of collective accountability that allowed them to build a fully operational theatre on such a small budget. In one conversation with me, Chantel recalled scrutinizing everything from envelope purchases to props, “triple thinking everything that was purchased”, to make the most of their limited funds.

A for-profit start up doesn’t have a board of directors or volunteer force putting pressure on your purchasing decisions, but you do have friends, family, and staff who all want to be a part of your start. It feels great when people are excited about your new business, but remember how you run your business is your decision. You are responsible for making this business viable, and that means saying “no” or “not right now” to expenses that don’t progress your business’ initial launch.

One key thing Chantel recommends, and I second, is limiting access to the business account. If you are starting a business with a partner, copy this strategy by keeping your cards in a desk- not your wallet.

If you authorize multiple people to make purchases, set firm boundaries of what is and isn’t allowable as a business expense at the start.

 

Lesson Two: Begin with the Long Term

Like most entrepreneurs, Jay and Chantel had a list of reasons that drove the decision to build The Rogue Theatre. Yes, they wanted to provide entertainment that pushed beyond the limited opportunities available in their small town.

But….their reasons for starting were also personal- and financial.

The couple has a big family, nine children under the age of eighteen. They took an honest look at the market and realized if they want support their family and pursue their passion, they would have to set out on their own.

In its first year of operation, Jay and Chantel Harvey plan to balance their day jobs with their roles at The Rogue Theatre. But their ultimate goal is to create an organization that can afford to hire them both full-time for their work.

You need to outline your long-term goals. Outlining your long-term goals will make it easier to keep your decision making grounded during the glamor of starting up. Goals keep you accountable to your spending practices.

Spending an extra $300 for props may not add much to a single stage production, but spending that $300 to reach a new market could have a huge affect on growth. Interested in knowing how you can grow your business’ market for such a small amount? Here’s how we do it with our brick and mortar.

Do you dream of starting a small business?

If so, what for? Do you want more time for family, travel, the freedom to choose your course? Or do you want your business to fund your retirement or provide a safety net?

Think about what your business needs to earn to achieve those goals. Use this number to guide your business forward and base your spending decisions off of them.

Lesson Three: Work at Night and Borrow Like a Rogue

The Rogue Theatre had little personal capital to invest in their project.

The organization had $5k from a no-risk loan gifted by a private investor and about $2.5k through community fundraising. Despite their small budget, they were able to renovate and furnish a space for their theatre without overspending.

How? Two things: Volunteer labor and donated materials.

For six months, Jay, Chantel, and their 15 year old son Gabe, worked nights and weekends renovating the commercial space. Other members of the Board of Directors pitched in hours, too, alongside friends and family.

I’ll be honest: the work is not easy. But you can lessen the capital cost of your start-up by building and investing your time.

I explore this approach in depth in the Guerilla Capital Guide you get when you attend our Business Plan Class.

The Rogue Theatre built out their operation on less than $10k. We started a $200k coffee shop with only $60k in capital- and still came in underbudget. You would be surprised how little your dream business could cost if you’re willing to invest your time.

Chantel became a master at coordinating The Rogue Theatre’s needs with community collaboration. By making specific needs known, she was able to find awesome seating, props, and construction materials below cost if not free. In doing so, she saved the organization thousands in their startup.

Specificity is key. Large or vague requests are difficult to respond to. The lack of expectations or clearly defined limits makes people anxious to help, donate, or pitch in. When you narrow your request you make it easy for people to either say ‘yes’ or refer you to the person who can.

Starting or expanding your brick and mortar will always require capital- but the barrier is not be as high as you think. The best way to determine what you actually need is to write a business plan.

A business plan will help you lay out the financials. Having a clear view of the financials makes it easy to weigh real assets against real costs.

Want to learn more? Join us on February 11th at Build a Kick Ass Business Plan. The course includes the start up costs, projected income statements, and entire financial plan behind Maeva’s Coffee, The Guerilla Start Up Guide, and personal instruction on the step by step process you can take to go from dreamer to doer.  

Are you ready? Finally get started on your business in 2018!

The Year of the Entrepreneur

Remember the last time you believed you could be anything you wanted?

Perhaps it was when you still colored with crayons. Maybe it was when you graduated. You were confidently outfitted with a piece of paper and an inspiring commencement speech. You were going to live an inspiring life, doing what you love and changing the world.

Then life hit and none of that happened, at least it didn’t if you were like me.

Here’s what I, and probably most of you, went through. I found a corporate office job. Then the recession hit and I was laid off. I scraped by juggling two part-time retail gigs during the holiday season. When that finished, I looked for full time employment for six months. I ended up getting hired to manage a video store.

I felt ...stuck. I was thankful to be employed but I left work every day feeling like there was just so much more I could be making out of life. Despite the economy my desire didn’t feel unreasonable.

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” - George Bernard Shaw

Why do you work hard for someone else who hassles you when need time off for family?

Have you looked for work but found nothing that excites you? Or do you have a degree in something you love but can’t find a opportunity to use your best skills?

In 2009, I was fed up with pouring my life into a job that didn’t challenge me. That’s when I decided to do something unreasonable. I jumped full time into working for myself.

It was completely unreasonable. It was both physically and financially dangerous.

In hindsight, I would’ve done things differently.

But it worked. I became part of a duo that saved a condemned building. In four years I built a brick and mortar business that now puts $200k back into my community every year and I’ve created space for over two-dozen other aspiring entrepreneurs to succeed.

Let’s Get Started.

Your life has probably changed since you last dreamed of being anything you wanted. Family and financial obligations, physical limitations, and the sensibility of holding on to your 9 to 5 may be holding you back.

But, as George Bernard Shaw said, unreasonable people persist on finding ways to adapt the world to their passions.

Will 2018 finally be the year you turn your passion into your profession?

If you’re thinking of taking the leap and starting your own business, you have your reasons why. Entrepreneurs assume risk because we want flexible time for family and travel, a career we can control, and meaningful work.

But there are mental barriers that stop people from taking the first steps. These thoughts shouldn’t stop you:

1. I don’t have enough money.

You don’t need a $100k bank loan to start a small business. The Milton Schoolhouse is full of success stories that started on less than $10k.

In 2017, we watched as The Rogue Theatre built an entire entertainment opportunity and event center in our incubator with $5k in private investment and $2.5k in funds raised from the community. Two people and a tiny crew of volunteers built an entire theatre that can cover its operating expenses and pay its actors...all for less than $10k.

How did they do it? The Rogue Theatre became masters at collaborating, used their personal time as a substitute for capital, remained flexible with their plan, and rallied the community behind their vision.

(Coming soon! I’m currently writing a case study on the financial genius of this small and mighty non-profit.)

When you write the financials for your idea, you will be shocked by how little investment you need when you begin to think creatively. If financials frighten you, join us on February 11th for Build a Kick Ass Business Plan (link to page) and get access to the real 2014 start up financials for Maeva’s Coffee, as well as the new 2018 Guerilla Capital Guide.

2. I don’t have a business degree.

I have a business degree. It led to one thing: The corporate office job that convinced me to work for myself.

Most successful entrepreneurs, if they do have a degree, don’t have one in business. The degree isn’t important. What is important is knowing your industry, your market, and having a strong brand.

There’s proof of this all across the spectrum, even in big corporate- check out this month’s issue of Harvard Business Review. Only 29 of their top 100 ranked CEOs in the world in 2017 have MBAs.

A formal education opens doors, but entrepreneurs use drive, skill, and focus to create their own.

3. I don’t have enough time.

Everyone is busy- it’s not an excuse.

The Rogue Theatre, again, is an impressive example of what you can get done if you’re willing to make sacrifices. Jay and Chantel Harvey, the force behind The Rogue Theatre, not only have full-time day jobs teaching special needs students...they have nine children of their own! They paid for their dream with their nights and weekends. They gave up up six months of free time to build a theatre.

4. I don’t know where to start.

Getting started doesn’t need to be difficult or scary. No one expects you to go into work tomorrow and slap your two weeks on your boss’s desk.

The first step is getting things out of your head and down on paper. Even if you aren’t seeking outside investment, a business plan is essential to ensuring your success and personal well-being. Take a few weeks at night and create your own step-by-step guide for your business that will:

• Give your dream structure

• Allow you to wrap your head around the logistics

• Keep your vision focused

Creating a business plan makes your business 16% more likely to succeed and gives you peace of mind that comes from clarity when embarking on this incredible life-changing event.

Let’s make 2018 the year you make real steps toward becoming an entrepreneur.

On Sunday, February 11th, we’re hosting the Kick Ass Business Plan Course at Maeva’s Coffee, inside The Milton Schoolhouse. This two hour session covers everything you need to know about creating a concept plan and financial strategy to start a small business- or to grow an existing business. You will learn how to

• Bring clarity to your ideas and develop focus to create an actionable plan that makes them reality

• Write a business plan that puts potential investors and collaborators on your side from page one

• Understand your strengths and weaknesses in relation to your market so that you can launch with a solid strategy for success

• Answer the most important questions about starting a small business, like how much capital you need and how to find it

Because of the continued lack of support for small business loans in the banking industry, I’ve written a new guide to Guerilla Capital that comes included with this course.

This guide is based on studies and strategies we’ve used with start-ups at The Milton Schoolhouse, as well as techniques I’ve learned working with clients this last year. The new Guerilla Capital Guide pulls back the curtain on how you can tailor your plan towards non-traditional start-up funding and how to save money by rethinking your business’ financial strategy.

Learn more about our Kick Ass Business Plan course here and take the first step towards turning your passion into your profession.

The Small Biz Guide to Direct Mail: Creating Genuine Connections and Real Returns

This post is part of a series on advertising for today's small business. This series will challenge you to rethink your views on the effectiveness of traditional advertising for start-ups.  I'll be highlighting responsive, low cost alternatives that,

• expand your market

• find true fans for your start-up or small business

• and make the most of every dollar you spend

These alternative methods have produced results in my own ventures- or those of my close colleagues- and all cost under $2,500.

Note: If you are an artist, entrepreneur, or small business with insight to share- email me at meredith.elston@gmail.com. I’d love to hear what has worked to make you successful!

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Direct Mail.

Nothing conjures the unflattering attributes of traditional advertising better than direct mail. Think about the direct mail you’ve received this week. It’s been nothing but obnoxious  political ads, car dealership hype, and a menu for the local Chinese restaurant. As a small business trying to create real, responsive relationships with customers, these make terrible role models.

Wait...weren’t we looking for alternatives to traditional advertising? Direct mail has been a corporate favorite for years. We’ve been watching our grandparents and parents toss stacks of it into the trash without so much as a second glance. Why would you waste your money creating a direct mail campaign for your small business when it has such a terrible reputation?

In most cases, you’d be right. However, there’s a different way of thinking about direct mail. When used with insight and smart design, direct mail actually can create genuine connections and reach the best new clients for your brand.

Keeping focus on those goals- genuine connection and a narrow market- is essential to succeeding with any of the advertising methods highlighted in this series.

The problem with direct mail isn’t the method, it’s how most people approach it.

In this post, I’m going to share with you how you can use direct mail in a way that new and existing customers will actually respond to it. I’ll also share the results of our most recent direct mail campaign for Maeva’s Coffee. Are you looking in suspicion at the stacks of wasted, glossy cardstock on your kitchen counter? Consider our numbers from our September 2017 direct mail campaign for Maeva’s:

We spent $367 on our last direct mail campaign and have an estimated return over two years of $25,000. Those numbers seem impossible but they aren’t. It’s easy to create these numbers from a direct marketing campaign with a little extra planning and insight from you into your customer base.

Direct Mail Done Right

Any successful advertising campaign (low cost or otherwise) is going to be built on the tenants of strong branding and the focus of reaching and connecting with your best market.

Think of direct mail as a way to extend use the power of gifting, which we talked about here at the start of this series.

This focus is key. Most traditional advertising uses Return on Investment (ROI) to calculate the success of an advertising campaign. What is ROI? When looking at advertising, ROI is simply:

How Much Did You Spend vs How Much Did You Bring In

It’s a cut-and-dried way of simplifying the numbers to determine the success or failure of a campaign.

The problem with this focus is that you are always chasing immediate sales. Marketing firms who encourage car dealerships, Walmart, other big box brands to use this number will do anything to get a large immediate return. They use massive discounts, disruptive in-your-face radio ads, and clip-art filled direct mail campaigns that do nothing to create long-term attraction to their brand.

You’re a small business. You are relationship-focused in both brand and reach. This is why you should be using Customer Lifetime Value (CLV) when calculating risk and return in your advertising and not ROI.

CLV can be calculated differently depending on your business market. To calculate, you need to know:

1. The average revenue per customer transaction

2. The frequency of transaction

3. How length of time you can rely on them being your customer

To give you an idea, here’s how we calculate CLV for Maeva’s:

    $10 (average revenue) X 2x/week X 2 years = $1,040

“Why only a two year lifetime for our customers?”

We set our standard on our customer base with the highest turnover: students. Most students will be in the area for 3 or 4 years, but by calculating a two year relationship we keep our estimates conservative.

“I spend more than $10 a week at Maevas, why only $10?”

Again, erring on the side of caution. Our core group of customers spend, on average, $17.42/week at the shop- but we can’t assume that all of the new people we reach through direct mail are going to become core customers. It’s better to underestimate than overestimate!

Using CLV instead of ROI to calculate your goals for your direct marketing campaign will not only give you a better long-term picture of how advertising affects your business, but will help you focus on the right people to reach and how to reach them.

List Making and Risk Taking

Before spending any money, you’ll want to determine who you are trying to reach.

In this article, we went over how to use your best customers to determine your target market. Now that you’ve written down some characteristics of the people in your target market, narrow your focus to a specific market you want to reach by direct mail. This will help you buy the best list for your campaign.

There are a lot of online companies that sell mailing lists. My current go-to is GeoSelector (and no, they aren’t sponsoring this). I like them because:

1. They don’t have a minimum purchase

2. I like the ability to draw specific geographical boundaries on the map rather than using a radius focus.

My focus for the 2017 DM campaign at Maeva’s was to reach students/teachers of the dental school who lived within walking distance. I wanted to initiate a relationship with people who hadn’t visited before. GeoSelector’s features allow me to focus on the residential neighborhoods where this market is more likely to be- and draw a boundary eliminating our local Walgreens, CVS, etc.

Here's the neighborhood outline we used for this campaign:

Being able to set your own geographic boundaries is particularly helpful if you know your neighborhood.  Other mailing services only allow you to set boundaries via radius or mailing code- which might mean you’re purchasing addresses you don’t need for your mailing.

GeoSelector has options to narrow by demographic, too. This isn’t 100% accurate but it helps when purchasing a small mailing list. You can set age ranges, whether a property is rented or purchased, gender, average household income, political identity, racial identity, religious identity- as well as lifestyle choices such as whether or not they own a dog or have an interest in classic cars. Narrowing down your list to as close to your target market is the best way to stretch your dollar.

Tip: Most lists specify how many times they can be used for commercial outreach. If you plan to reach the same market in that period of time, you can save money by not having to repurchase the list. A single-use license for 300 names/addresses costs $20-35 depending on the service you choose. A year-long license may be double, but worth it if you plan on quarterly outreach.

“How do I know the list is good/accurate?”

Reputable list-services will guarantee a certain level of accuracy. We had a return rate of <1% on our last mailing. Also, I knew the demographic sorting was accurate when about 10% of the list were dedicated customers I could identify by name. This is pretty spooky but it does show the database is up to date.

Tip: If you are already an established small business catering to a specific geographic location like Maeva’s, buy a list that is 30% larger than what you intend to use and cross reference it with the names on your POS system’s credit card sales report. By highlighting people who are already customers, you can use the same list to create two focused campaigns: one for dedicated customers and one for potential new customers.

Designing A Successful Direct Mail Campaign

A successful design must be true to your brand and congruent with how you want to connect.  

There are a ton of ways to go about creating a direct mailing campaign that wont end up in the trash. Instead of giving you a “how-to”- here are my favorite tips to help guide you in creating something unique to your own personality:

1. Gifting as Incentive

Your campaign needs some sort of actionable incentive- even car dealerships know this. However, instead of some lame “see if this key unlocks your new car!” campaign that readers see right through- use this opportunity to utilize the power of gifting. One thing you should always avoid is discounting. In small business, discounting signals the opposite of what most of us want for our business.

A discount signals:

• You’ve overpriced your product/service to afford the discount you’re giving

• Your product/service is lesser quality than your competitors

• You’re desperate

Giving something away signals:

• Hospitality and gratitude

• You’re business is successful- you can afford to be generous!

• You’re so confident the giftee is going to love your product/service, you’re willing to treat them on your own dime

Consider offering an incentive that is both generous and welcoming rather than gimmicky.

2. Keep it Simple

You’re already intruding on someone’s personal space and asking them to respond to a commercial request. Keep it simple, ok? No contests, no “if this then you get”s. Don’t ask them to like your social media or sign up for your mailing list. I don’t even add expiration dates on my mailings. If it takes someone a year to finally take that postcard off their fridge and bring it in for a free drink, we’re still going to be here- and we’re happy to give it to them.

Remember we are growing relationships. You can’t do that with expiration dates and cheap ‘act now’ gimmicks. By affording people the chance to use our gift when they are ready we are meeting customers when the opportunity works for them.

3. Non-design Design    

I’ve given up spending hours in Adobe Illustrator or Canva trying to create a postcard mailing that fit our image, didn’t feel sales-y, and still had the chance of attracting attention in the mailbox. The solution was so obvious that I felt like slapping myself when it hit me.

My friend Jennifer sends me actual postcards wherever she travels- and I love them. The chance of getting a real piece of mail is the only thing that keeps going to the mailbox special.

So why not actually send a real piece of mail?

In February, I visited Peru and used photos from the trip to highlight South American coffee culture. Our goal at Maevas is to be a brand focused around exploration, particularly in central/south america. Why not use postcards from Machu Picchu?

Some might argue that I’m wasting valuable space on this direct marketing campaign. 50% of the card doesn’t say “Maeva’s Coffee”. It doesn’t have a flashy slogan or talk about coffee at all! But what it does do is give an impression of who we are and what our brand is. This Non-design Design concept works: on our last three direct mail campaigns, people have brought the card in reluctant to exchange it for a free drink if it means giving up the card! (We happily cross out the “free drink” stamp and allow them to take it back to hang on their fridge)

4. To name or not to name?

Mailing lists will give you first and last names associated with the address. Should you use them? It’s up to you.

Personally, I think using a name can make offers confusing. In this campaign we focused on rental properties around the dental school where, yes, students are likely to rent but also where the resident is likely to change. Although adding a name is a wonderful personal touch, I usually save it for reaching out to customers I know. Not adding a specific name on the postcard makes anyone who receives it feel comfortable in redeeming it.

5. Personal touch

Whatever you do, don’t skip the personal touch! I always hand-address my postcards and include at least a one-sentence note. Do you have bad handwriting? It’s no excuse. Enlist someone who has nice handwriting to take care of this for you. Our coffee shop has eight staff and addressing postcards is a great way to fill lulls in-between rushes.

How Successful Is This, Really?

So now you have the inside scoop on how we use direct mail for our brick-and-mortar, Maeva’s Coffee. As a small business, we use the method differently than our corporate counterparts. Does it work? Absolutely! Here are the numbers behind our September 2017 campaign.

 

Setting up the Campaign

First, determining cost. I wanted to spend <$500 on an outreach to students and teachers of the dental school who live within walking distance of Maeva’s Coffee.

I purchased 200 classic Machu Picchu postcards for $60 and made a custom list for $24 through GeoSelector. Our postcards were oversized and cost $.49/pr to mail.

Our campaign also allowed the receiver to order one free drink, any drink, no strings attached. I know that, historically, our direct mail campaigns have a <20% return rate. Just to be safe, if 30% of our cards were returned and each visitor bought our most expensive drink, it would cost us $300.

Calculating out our estimated cost:

List $24 + Postcards $60 + Postage $98 + Estimated Product Cost (60 x 5= $300) = $482

 

Campaign Return

We had 37 cards of 200 returned to the shop. The average cost of a drink was far less than the $5 budgeted, most visitors wanted drip coffee or simple lattes. Our total cost came in under budget at $367.

Calculating the Campaign's Success

Let’s calculate the success of this campaign. Since my goal was to introduce Maeva’s to new customers, I eliminated customers on the mailing list that I recognized by name. Still, there are a lot of visitors who come to Maeva’s that I don’t know by name and it’s likely some of these postcards were sent to them. People who have visited the shop before are more likely to return a postcard than a completely new visitor, so to play it safe, we’re going to estimate that 30% of the cards returned were actually existing customers who received cards. The estimate is conservative, but the results are still amazing.

We received an 18.5% return on our direct mail campaign.

According to JMW Business Services, the average return rate on direct mail is .5-2%. As a small business, when we followed good practices of targeted list making and generosity-focused, brand-building design, we substantially outperformed the big box stores. At a CLV of $500 per customer per year, our campaign will boost annual revenue $12,500 over the next twelve month and $25,000 over the lifetime of the customer. That means for every dollar we spent on this direct mail campaign, we’ll earn $68 in return.

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When done right, direct mail is an incredible, low-cost tool for small businesses. It can be used to reach new customers, new markets, reposition yourself in the community, or to reconnect with lost customers. All you have to do is apply thoughtfulness and commitment to your brand message.

Note: Direct mail, like any form of outreach, should never make up the entirety of your strategy. It is most effective when used with other outreach methods such as collaboration, sponsorship, event outreach, and social media advertising.  

This article is part of a larger series on rethinking your advertising strategy as an artist, start-up, or small business. Subscribe to the RSS feed on the right or follow The Milton Schoolhouse to learn the how to use other non-traditional methods to create a successful advertising strategy for your small business.

She is Success.

Do you remember autumn 2012? I do. Milton had a room open for rent in the basement.

Now we call the lower floor the “garden level”. It’s friendly and lively, with delicious smells from our bakery that fill our other renovated studio spaces. In 2012, it was undeniably a basement. The classroom-turned-studios were spartan and had two selling points:

1: They were affordable.

2: They had ceilings...?

At the time, the hallway leading to the studios had an exposed ceiling made up of rusty boiler pipes and old wires. Two fluorescent lights plugged into extension cords flickered irritably whenever you walked through. The lights revealed webs gone old and dusty from spiders that had abandoned them for better locale.  

There was a need in Alton for reasonably priced commercial space. Despite this, I didn’t imagine this as the first choice for a family photography business. Little did I know...

Carrie Carpunky had been using her in-laws basement as a photography studio. Not having access to private space for clients, not to mention room for her props and backdrops, was becoming a problem. Plus, she knew there was only so much her business could grow without testing the limits of even the most gracious family hospitality.

Surprisingly, Carrie wasn’t the only photographer looking at the open basement room. I didn’t know anything about either potential tenant. They both seemed like they’d pay their rent...and that was about as far as my own sense of judgement had developed. I was still green myself at running a then-fledgling incubator.

I also hate choosing sides…

So I told them both “I’ll rent to whoever gets here first.”

Carrie’s apprehension gave way to her ambition. Check in hand, her eyes began tearing up as she signed the lease on her first commercial space.

She now had a six month trial lease and plans to shoot enough family Christmas card portraits to make it work through the winter.

If you had told Carrie in 2012 that her business would be what it is today- she would’ve thought you were out of your mind. Like most new business owners, she faced the same fears we all do. We all say the same things to ourselves:

I don’t have a business degree- how can I run a business?

Am I charging too much? I’m so new, why would anyone pay for this when there are so many other photographers?

Will I be able to make my rent? What if I’m lying to myself?

But 2012 Carrie had the one quality in spades that indicates future success: determination.

Year One...Her business grew. She traded for better props with other photographers until she could invest in buying them herself.

Year Two...Her business grew. She reinvested in herself, learning from the industry’s leading professionals how to constantly become better.

Year Three and Four...Her business grew. She moved to a better space inside The Milton Schoolhouse- and then upgraded a second time.

How many small businesses can tell the same story of growth year after year? Only small businesses ran by people determined to turn their passion into a profession. Entrepreneurs like Carrie.

Two stories stick out to me when I think about Carrie and our business together these last five years.

The first, was a cancer scare.

Carrie had beat cancer just prior to starting her business.  She went in for an annual evaluation and they found something. She had just moved to a higher cost studio inside Milton and came to me preparing for the worst.

Her business was doing good but she couldn’t sustain paying rent without working. For me, it was the first time I realized that my commitment to providing a space for small businesses came with a greater moral responsibility.

Facing what could’ve been a six month gap in rent, there was no choice to make. Here was Carrie, who - just like me - had thrown everything into starting a small business. It was just starting to take off. I wrote in my journal that night,

“I’ll do whatever I need to- this should be the least of her worries.”

Fortunately, the scare was false and her business continued to flourish without gap.

I admired her determination. It was contagious working alongside someone also passionate about their work. Carrie’s presence challenged me to define my mission at The Milton Schoolhouse. I knew I wanted to be more than “a landlord”. The Milton Schoolhouse was meant to help Alton grow successful small businesses.

The second story happened soon after Carrie committed to leasing our premiere studio (the current studio down the hall from Maeva’s).

Her business had grown so much more than she projected that she had found out her quarterly tax payments weren’t going to cover what she owed. Can you imagine growing so much you surprise your accountant?!

I can’t remember the amount but it was some four-figure number that would’ve made anyone freak. Carrie didn’t freak. She rolled up her sleeves announced a surprise mini session weekend.

She booked that weekend full and worked her butt off. The next week, I remember her grumbling about “so much editing”. I did my my best not to burst into laughter. I wanted to throw my arms around her and say,

“Oh my god, do you realize what you’ve just done? You were able to handle something that could’ve paralyzed or shut down an entrepreneur. Your business has made it- you’ve made it!”

And she is still making it today. It’s be an incredible privilege to be the place Carrie chose to turn her hobby into a full time profession. Having her personality in my life, day after day, has been a blessing beyond words.

That’s why it makes me happy to echo the announcement that Carrie’s studio will be moving next month to a storefront location in downtown Alton. It’s a huge move for her business- she’ll be taking on a space that is double in size of her current studio and offers great amenities for the moms and babies who adore her.

When she told us privately I was shot back in time to 2012 when she had that same wide-eyed and breathless look signing her first lease. Five years later, maybe we both have a little more wisdom around the eyes. As she humbly stated, “I hope it’s a good move- I hope it works.” my gut response is “Of course it will.”

Carrie Carpunky Photography is the fifth business that has started inside The Milton Schoolhouse and successfully grown beyond our walls, and the third to relocated to a larger studio in Alton. When new business join us, I’m proud to state that we have a 82% success rate of our start-ups surviving longer than 3 years. These statistics are fantastic and we get them by offering opportunities that no other commercial property in this region does.

With growth comes the bittersweetness of saying “au revoir” to an amazing part of our Milton Schoolhouse family as Carrie Carpunky grows into her new space- and the fresh excitement of knowing there is now another space in our building for someone else’s passion to come alive.

Collaborate & Conquer : Using Collaboration for Genuine Growth and Success

Last week, in “Just say No to the Newspaper", you were challenged to rethink your views on the effectiveness of traditional advertising for small business.

This post is part of a series on advertising for today's small buisness. I'll be highlighting responsive, low cost alternatives that will

• expand your market

• find true fans for your start-up

• and make the most ofevery dollar you spend

These alternative methods have produced results in my own ventures- or those of my close colleagues- and all cost under $2,500.

Note: If you are an artist, entrepreneur, or small business with insight to share- email me at meredith.elston@gmail.com. I’d love to hear what has worked to make you successful!

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What do you think advertising is?

Most new business owners miss out on great advertising opportunities because they aren’t thinking about what advertising actually is.

Advertising is a part of marketing and branding as a whole that envelopes anything providing reach into a market.

Simply put: if you’re doing something and it increases awareness of your business- it’s advertising.

Erase for a moment your thoughts of print, half-off coupons, and windshield fliers. Think of every interaction you’ve had that has brought someone to your business. That’s advertising. Now think of every interaction that someone else has had that has brought someone to your business. That’s also advertising.

Anytime you reach to a market- it’s advertising.

The old marketing phrase “word of mouth is the best form of advertising” is cliche. However, it rings true when  it challenges us to think beyond the box of a print ad and consider every interaction that has brought a client to our business. If you can retrain yourself to think of all reach as a form of advertising, you will have tapped the powerful underlying truth that has made thousands of small businesses thrive without a single dollar spent on traditional advertising.

The Best Free Advertising

Collaboration is the most powerful form of advertising you can leverage as a small business. When done well, it can connect you to more customers than you will ever need. It’s also brand enhancing, giving you reach without a reputation for being salesy or cheap. Best of all for those start-up shoe-string budgets- it’s free.

Collaboration works equally well for brick and mortars focused on a geographically localized market as it does for artists and ecommerce based businesses. It’s focus is different than networking. The goal of collaboration being to create mutually beneficial opportunities for both you and your collaborators to reach into each other’s market.

In networking, the goal is to advance your own brand, reputation, or position by connecting with industry players ahead of you in the game. Collaboration is about create alliances between equals, banding together to advance together.

While creating an effective collaboration strategy doesn’t need to cost money, it does cost time. To prevent burnout and still use this method effectively, collaboration needs to be a part of a balanced overarching brand and marketing strategy.

Before starting this process, evaluate how much time you have and what your time is worth. Just like determining the ROI of a traditional or social media ad campaign, you should have a clear expectation of what outcome you expect from using collaboration as advertising. By keeping track of the “dollar worth” of your time, and the return it brings, you can make adjustments to your strategy to find what has the best return on your time. As with any practice, the more you see its success the more likely you are to stick with it.

Whether you are starting from scratch as an unknown in your market, or are a successful small business looking to deepen your market share, there’s no better time than now to start creating collaborative opportunities. Investing in collaboration produces results in compounding return.

If you’ve never used collaboration as part of your advertising outreach, start small. Expect it to take 2-3 months to begin establishing a strong base. As you grow your partnership base and create consistent collaborative opportunities, the “cost” of pursuing collaboration lessens in proportion to the return.

Finding Your People

One of the best aspects of collaboration is it’s non-salesy, genuine approach to creating connection in your community. Reaching out to others to create opportunities for collaboration taps the Power of Gifting. Focusing on your willingness to give potential partners access to your market, as well as gifting them a genuine reason for them to reconnect with their own, creates a dually beneficial relationship.  

Collaboration creates an association between you and your partner from the view of your market. Be wise and choose partnerships and opportunities that don’t violate the trust of your current market or distract from your brand. Collaboration should not only expand your market reach, but strengthen your brand.

Protect your brand. Strong branding is vital to the longevity of your business and collaboration must support this focus.
 

Here's how to start brainstorming a list of great collaborators for your venture:

1. Look to Your Market

One of the strengths of collaboration allowing your business to access crossover markets that might not otherwise be accessed by direct word of mouth. Before zeroing in on potential partnerships that are great for this purpose, you must know what those secondary markets are in your own business.

Make a list describing in broad terms what your current customer base is and weight them into either your target or secondary market. Not sure what a target market is? Learn more here.

For Maeva’s Coffee, our market looks like this:

Don't you just love beat-up coffee shop scribble notes?

Most businesses outside the food and beverage industry will have a more focused list. In most cases,  you’ll discover your business has one of two primary people types who make up 75% of your existing customer base with a few profiles that encompass your other clientele. This is similar to the principle put forth by Italian mathematician Pareto, who posited that eighty percent of results come from twenty percent of a group that engages with it.

The more narrow your target market is, the more likely you already have a strong, organic word-of-mouth advertising connection happening in that market. To make the most of collaboration, look for opportunities focused on your secondary market.

2. Find Partners with Market Overlap

Choose a market from your list and start looking for blogs, podcasts, neighborhood associations, non-profits, and other businesses whose target market overlaps with a section of your own market analysis.

Make sure you’re approaching markets that have access to your business, especially if your business a brick and mortar. For instance, Maeva’s is a non-corporate, non-franchise coffee house with a single location so I focus on partners who have reach within our own geographic concentration.

Occasionally, in our coffee business, I do reach out to partners beyond our locale- for example, we feature product from guest roasters who may be thousands of miles away. However, these partnerships are meant to build brand awareness, enhance industry education, and provide an elevated experience for existing clientele- not build our market as a whole.

3. List Focused Ideas for Each Potential Partnership

Ideas can range from article or audio content, to merchandising opportunities, events, or cross promotion. The opportunities you present to potential partners should play towards their strengths. Personalizing your ideas towards the very characteristics that attract you to working with them is a surefire way to collaborative success.

For instance, with Maeva’s Coffee, my current collaborative list looks like this:

1. Market: College Student/Dental School

Partners: Alton Tattoo Co., Cobra Kai Ink

Idea: Limited Release Seasonal Merch Design

2. Market: Female Home/PT Career

Partners: Honey+Clove Co.

Idea: Article Pitch

3. Market: White Collar Professional

Partners: Bin 51, Cleveland Heath, Goshen Coffee

Idea: Winter Palate Immersion Series
 

And it goes on. If you have an idea that you’ve never seen done in your area, as long as it fits the perimeter of strengthening your brand and reaching into a new market, don’t be afraid of pursuing it. Not all partnerships or opportunities will pan out, but creating a big “dream” list is the first step towards great relationships with area partners.

4. Make an "A" and "B" List to Start Focusing Your Time

Time matters. All entrepreneurs know that. Make a commitment to reach out to 2-3 potential collaborators a month and start getting things on the calendar.

Reaching Out

If can be nerve wracking to approach someone with an idea and ask for a “yes”. This is doubly true if your community or industry doesn’t have an existing history of collaboration. Creating an environment of collaboration has to start somewhere- and usually that means with someone. Whenever I get nervous, I look to neighborhood building business rockstars like Lynne McDaniel, Chicago based vintage furniture dealer who revitalized an entire district in her city by fostering a network of businesses on her street.

Read more about Lynne’s active approach to collaboration here. 

My favorite take away from collaborative geniuses like Lynne? Don't Be A Stranger. Making time to know people will make collaboration a breeze. Show up to grand openings. Click through on local blogs. Make the time to show your support by leaving genuine comments or supportive clicks on social media. Set an example of support before you think of, or need, collaboration.

Of course, you can pitch to potential partners you don’t know, but taking a moment to build familiarity not only creates a healthy microeconomy in your community, it makes it easier to collaborate in the future.

My go-to method is reaching out by email or Facebook message. Approaching in-person is great, but if you’ve built familiarity, writing allows a potential partner to consider your ideas on their own schedule. I love my colleagues and small business partners, but knowing how crazy things can get in my own business, who knows what’s happening in theirs? Most community creators prefer written communication, especially if the idea is something that needs consideration.

Before I show you a sample of an email I just sent to the ladies who run Honey+Clove Co., remember that your communication, and idea for collaboration, should be:

• Genuine

• Generous (always give more than you’re asking for!)

• Unique and specific to their strengths

• Great for both your market and your potential partner’s market

Here’s my message:

Hey Stacey!

(No-Brainer Tip #1: Use their name! Talk to you potential partner as you would want to be approached)

I’ve been following your blog for a the last couple of months and I noticed your “Eats + Drinks” Section. The farmer’s market blackberry mojito? Heck. Yes.

(Before sending this email, I’ve met Stacey and her partners before. They’ve supported our business’ kickstarter, we’ve hosted them at our small market, I’ve bought cool pieces from their shop for our business’ decor. We’ve had a relationship that is internally supportive- now I want to extend the invitation for us to take that support into each other’s markets through collaboration. Also, their mojito recipe is genuinely tasty. Check it out.)

I don’t know how far out you are scheduling content, but I wanted to get your feedback on doing a guest post from Maeva’s in the fall.

At Maeva’s, we craft all of our flavored syrups from recipes I’ve developed. When the weather cools off, Pumpkin Spice is on everyone’s mind and I would love to share the recipe for our secret Maeva’s pumpkin spice latte syrup. It’s super tasty in dessert bars and baked into pancakes- I’d love to see how your readers decided to use it!  

(Here’s where I’m offering to provide content that no one else has access to that I think their target market would really enjoy. When I share my shop recipes, they are usually covered by an NDA. Offering to release this popular content is something special, uncommon, and only something I can gift.)

Let me know what you think and when you have space in your posting schedule.

(This is me being considerate of the behind-the-scenes business commitments they have that I’m unaware of. I’m contacting them 6-8 weeks before this content would be at its most relevant so they have time to think about this opportunity on their own terms without feeling rushed)

Keep being awesome!

Meredith

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Collaboration remains my favorite free form of advertising. When done well, it becomes the perfect illustration of glorified community phrase "a rising tide floats all ships". In running The Milton Schoolhouse small business incubator, I truly believe that strengthening your own business while sincerely growing the microeconomy in your surrounding market works to create success in all definitions of the word. However, collaboration, like any form of outreach, should never make up the entirety of your strategy.

This article is part of a larger series on rethinking your advertising strategy as an artist, start-up, or small business. Subscribe to the RSS feed on the right or follow The Milton Schoolhouse to learn the how to use other non-traditional methods to create a successful advertising strategy for your small business.

Next, is it possible to be generous and still make a good return on investment? Absolutely! Learn how to turn your natural altruism into business growth the smart way by supporting good causes and local non-profits.

Just Say "No" to the Newspaper

Do you ever wonder why certain small businesses thrive without spending money on traditional advertising while other businesses with big budgets struggle to stay in the black?

The answer will surprise you.

Marketing is no longer transactional. In the old days you bought an ad and waited for customers to walk through your door. The world moved on. Social happened. Targeting happened. The internet increased access and options for small businesses. Traditional ads didn’t keep up. That brings us to the truth magazines, newspapers, and other media outlets don’t want you to know.

Traditional advertising doesn’t work for small business.

Don’t believe me? Consider this before committing to a several thousand dollar strategy: What does the newspaper or radio do to attract new customers to your business?

Traditional ads for newspaper and radio advertising promise:

• Increase in name recognition

• Drawing customers to your business through incentive

It doesn’t make sense for small business. Here’s why:

1. Reach

The radio is everywhere so everyone will hear it. Newspapers are delivered to the doorstep of thousands in your area. It sounds great. These outlets will try to sell you on their reach, saying they can put your businesses name in front of a multitude of potential customers.

But how many of those customers are actually a good fit for your business?

Let’s look at Maeva’s Coffee and its 3,000 weekly visitors. When our customers found us, most googled “coffee shop Alton”. They were actively looking for our shop.

When was the last time you were stuck in traffic and looking for a new beauty salon? How many of your current customers can only be reached by the daily newspaper? Sure, your name might flash past thousands of people- but, dollar for dollar, your advertising potency is diluted because it isn’t reaching the right people at the right time.

National brands make traditional advertising work because they spend thousands of dollars for exposure. As a small business owner, you can’t afford to pay for the amount of exposure you need to make a difference in your revenue.

2. Incentives

Most advertising incentivizes listeners with special offers or a coupon.

Coupons are a terrible way to promote your small business. You think you’re doing something smart, giving people a tantalizing offer they can’t refuse.

This is the problem: 99% of small business owners already operate with a tiny profit margin because they are undercharging for their product or service. When you offer a coupon, you’re communicating to your market that your product isn’t worth what you normally ask.

This isn’t just a problem with traditional advertising. Even small business owners who are savvy enough skip the newspaper ad don’t understand the psychological way coupons kill business. My Facebook newsfeed is full of local businesses offering “$1 this” or “half off that”.

Coupon clipping doesn’t work for small business!

If you want to entice someone into trying your small business- give it to them.

The Power of Gifting

This is the most powerful advertising advice I was ever given: If you can’t afford to give it away for free, don’t give it away at all.

Think about the difference between giving something away for free vs. giving someone a discount.

A discount signals:

• You’ve overpriced your product/service to afford the discount you’re giving

• Your product/service is lesser quality than your competitors

• You’re desperate

Giving something away signals: 

• Hospitality and gratitude

• You’re business is successful- you can afford to be generous!

• You’re so confident the giftee is going to love your product/service, you’re willing to treat them on your own dime

An advertising strategy that is welcoming, generous, and confident? Absolutely! It sounds great, but most small business owners don’t utilize the power of gifting because of risk.

Gifting and Risk

Gifting something for free can feel like a huge risk when compared to giving a discount. If the customer never returns to purchase, you’re out 100% of cost rather than just a portion.

The key to turning gifting into an acquisition rich advertising strategy is to do it thoughtfully. Here’s a quick breakdown on how to create a winning, generosity-focused advertising strategy:

1. Think about your best customer

Take a moment to jot down a few notes about your best customer. This is the customer who loves your business. They visit so often, you know them by name and have their order half prepared as they walk through the door. Or they book your service out months in advance. This is the customer you want more of- and they’re called your target market.

What does your target market look like- what is their age, personality type, gender, or income level? What do they like to do? Mapping out core attributes will help you zero in on who you want to reach and how.

2.  Reach out to ONLY your best customer    

Don’t waste energy or time developing a strategy for a market that isn’t your best. By focusing in on your best potential customers, you reduce your risk of gifting product or services to people who aren’t as likely to become true fans.

This seems like common sense, but, have you ever given something from your business out of guilt or expectation? I have. Our coffee shop is petitioned for school program ads, gift cards for silent auctions, and baskets for fundraisers at least three times a week. In the beginning, I felt like I had to give to everything or a wasn’t a good community business. Now, I decline most of the time. Why? Giving to community causes is another way to advertise. As an awesome business owner, it's your responsibility to weigh the cost of the reach against its viability.

For example, if your target market is professional females, perhaps it makes sense to give a gift basket for the silent auction at the local women’s empowerment conference. Better yet, connect with the conference coordinators and offer a free gift card for preregister packets. However, giving to the local animal shelter might not as closely align with your desired reach.

My strategy for guilt-free fielding of donation requests? Either set an annual budget OR choose in advance which charity you’ll support for the year. By deciding in advance, you make it easy to gracefully decline requests. When arises that isn’t in your perimeters, thank the person for the opportunity and say , “I appreciate you thinking of us! This year, we’ve chosen to support the (________) foundation as our non profit this year.”

No one is going to hate you for not giving them a free gift card. As a small business owner, you have to make the decisions that align best with your market.

3. Determine your budget- and stick to it

This is ultimately how you reduce your risk in a gifting strategy.

When a local college approached us about putting materials in their new student welcome packets, I saw a brilliant opportunity to reach a new market. I wanted to give away drinks (not discounts) and was willing to gift $250 as 50, $5 gift cards to incoming students.

The college wasn’t keen on it because they wouldn’t have enough cards to give to every student. They suggested $1 off coupons instead. I declined and secured permission to give the gift cards (along with a map that detailed our hours) away by hand on campus.

The result? That semester, our week night traffic was booming with a healthy population of students seeking free wifi and a quiet place to work.

Before handing out anything, I knew the total advertising cost for this was going to be $250 - plus a few printed cardstock maps. $1 coupons would’ve compromised our brand and wouldn’t have packed the punch of a fully comped drink. Offering enough gift cards for each student’s welcome package was out of our budget. By reducing our reach, dollar for dollar, we saw a great return and hit our perfect market.

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Reconsidering traditional advertising but still want a way to get your business in the hands of your best fans?

Check out “Does Spending Money on Facebook Really Work?” and watch for my upcoming post on how to craft awesome non-salesy advertising strategies for your small business.  

One Coffee Shop and the $15 Minimum Wage

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Article Summary

In May, a bill to increase minimum wage passed through the Illinois state house and senate- and waits for Governor Bruce Rauner’s signature.

We’ve faced minimum wage increases before but none have been so feverently debated as this: the largest increase the state has ever considered. The $15 minimum wage would be factored over the next five years and, at over double the federal minimum, would make Illinois the highest minimum wage in the country.

Click here to read SB81.

The economics of minimum wage make for a complicated conversation. This article lays out the effect this bill will have on our small business, Maeva’s Coffee, and projects a probable path we would take if it were to be signed into law.

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Business As Chess

In Thinking Fast and Slow, Daniel Khaneman explains how chess is a rare place true intuition can exist. All of the information regarding both your position and your opponent’s- as well as all possible outcomes- can be known by any observer. Unlike poker or politics, there are no hidden variables.

In chess, there are instances in which a player finds himself in either an unbeatable or an unwinnable position. But, more often than not, chess falls in a spectrum of grey where advantage results from careful attention. Luck has little place in chess.

Perseverance can transform terrible positions into a win.

I play business with the same calculated optimism and perseverance as I do chess.

Look at the entire board.

Choose the best move.

Keep looking until you find the answer.

With every option in plain sight- the solution to any situation is also in plain sight. A game is never over until it is over.

I recently read The Art of Learning by Josh Waitzkin, in which this internationally ranked master focuses on the art of managing the psychological and emotional effects of competitive chess. These aspects of chess are not as pure as managing the information on the board but act as a cautionary tale for us too in business when we are faced with change. During the game, a subjective reaction to a mistake can lead to a compounding series of mistakes that result in defeat. The willingness to address a weak position with determination can lead to a landfall win.

Like chess, for a small business owner, the minimum wage debate also has a duality: the numbers vs. the humanity.

This post is broken into two parts.

The first part is an objective breakdown of how, if passed:

• the $15 minimum wage will be implemented
• how it will affect our shop
• and what we will do to accommodate the change.

It’s the chessboard. Just moves and position.

The second part of this post is a human hypothesis on how the minimum wage increase could  play out in the microeconomics of our community.

Our Shop Structure

If you are reading this and have not visited our shop, let me explain our position.

Our shop is located inside an old schoolhouse in a post-industrial town on the Mississippi River, just inside the Illinois border. We own the building in which we operate mortgage-free - a huge advantage to our three year old operation. Our location is surrounded by middle class residential neighborhoods with an average household income of $40k-$75k annually. Not a wealthy neighborhood, but a good one comprised of young families and older retirees who have raised their own families in modest 2-4 bedroom single family homes on small plots of land. Our shop is a few blocks from a well-attended satellite dental school campus for a major state university.

Our location creates limitations on our potential for creating revenue. Our shop is built out inside a classroom of the old schoolhouse and its brick structure renders it impossible to expand our current seating capacity. The structure is also split level and sits up from the elevation of the road about 10 feet. This makes the addition of a direct drive thru addition cost ineffective and unlikely.

We recently celebrated our third year as a bustling community coffee shop. As people have discovered us and come to love this place, we’ve seen an increase of traffic as well as an associated growth in revenue.

By my projections, I believe we will continue to see a slow and steady increase in revenue as we continue to become a foundational part of this community.

I see that growth potential limited by our structure- and don’t project more than a 20% increase over the next five years.

Current Financial Position

Maeva's Coffee employs seven front of house staff, two kitchen staff, and two owner/operators. Three of our ten active staff are full time, with our seven remaining staff working between 15-35 hours per week.

The separation between house and kitchen staff is significant due to how both the federal tip dispersion law and the minimum wage laws are authored.

1. Tipping: 

   Regarding tipping: Federal law doesn’t regulate how tips are dispersed if an employee is being paid at least minimum wage and all tips are distributed completely and only to tip eligible employees. An employee eligible for tips is one that works on shift and that is being tipped by our customer.

   In short: This means neither our kitchen staff, nor my business partner, who do not work on shift in the shop, are eligible for tips.

2. Fiscal Insecurity 

   No minimum wage law offers wage protection for business owner/operators- a fact that comes at its own cost to entrepreneurs. This, in theory, means we can make as much as we want as entrepreneurs. However, the practice is often reversed. Most small business owners sacrifice a good deal of time, under or unpaid, to start and operate a business.

Quick Look at the Numbers

In 2016, Maeva’s paid out 38% in gross revenue as wages to staff.

$18,900 of this was distributed as Officer Salaries (owner/operator wages). As mentioned, my business partner doesn’t work in the shop but does receive a stipend for ongoing maintenance. In 2016, I averaged 35 hours per week in the shop between both shifts and office management, putting my hourly wage for 2016 at $7.70 pr/hr prior to taxes.

$32,000 of this was distributed to kitchen staff for an average hourly wage of $9.50 per/hr.

The remaining $73,700 was distributed to house staff who made, prior to tips, on average $9.10 per/hr. However, an additional $28,000 in cash tips were dispersed to these staff. This brings our average shop wage to $14.13 per/hr.

 

Game Variation 

Like a game of chess, if SB81 were to become a law, we have several pieces we could move to better position our business for survival. In all likelihood, it is not the use of a single variable that will keep our business running- but a combination of pieces on the board.

Here are some of the possible pieces we can adjust in our small business to accommodate for the $15 hour minimum wage increase.

1.  Federal Tip Policy

   We assume that customer tipping habits at Maeva’s are unlikely to be negatively affected by the minimum wage increase. Assuming tipping remains static to our revenue, we have options available for tip redistribution to alleviate loss.

   Federal law regarding tipping practices states that with staff making at least minimum wage, tips must be 100% distributed to tip eligible employees. But it doesn’t mandate how. Business owners in the service industry have the freedom to choose whatever method they wish, whether it be tip pools, weighted tip pools, or even incentivised bonuses. Likewise, we would be allowed to redirect the $27,000 +/- of cash tips into payroll for house staff*.

   This would allow us to cover some increase should SB81 become law- but only for house staff. Any increases necessary for kitchen staff, or to owner/operators, would need to be sourced from another aspect of our business.

2. Tax Credits

   As SB81 is being considered, its supporters are claiming it will not hurt small businesses due to the tax credits offered in the legislation.

    

   Quick Note: If you have never been a business owner, you might not be aware that a tax credit isn’t a check the government hands you- but rather a credit against the taxes you owe.

   The particular tax credit offered by SB81 appears to be a general tax credit against the reported profits of a business with fewer than 50 employees when they file their yearly taxes.

   Here is the excerpt from the bill regarding tax credits for small businesses:

   Tax Credit

   The amended bill creates a credit against the withholding tax liability of employers with 50 or fewer employees at any time during the applicable payment period, for each qualified employee, in an amount equal to the maximum credit multiplied by the number of hours the employee worked during the reporting period. The credit (or credits) may be taken against payments due for reporting periods that being on or after January 1, 2018 and end on or before either:

   1)    December 31, 2025 for employers who employ more than 5 employees during the applicable payment period; or

   2)    December 31, 2027 for employers that employ no more than 5 employees during the applicable payment period.

   The amount of the credit is: (1) $0.75 per hour for standard minimum wage workers; (2) $0.45 per hour for tipped workers; and (3) $0.53 per hour for youth workers. The credits can be claimed on employees who make up to $0.25 more than the minimum or reduced minimum wage and have been employed with the employer for at least 90 consecutive days; provided, that those employees could not have had their wages reduced in order for the employer to earn the credit. 

   This credit does have limitations, as for each reporting period, the employer may not claim a credit or credits for more employees than the number of employees making less than the minimum or reduced wage for the current calendar year during the last reporting period of the preceding calendar year. Additionally, an employer shall not be eligible for credits for a reporting period unless the average wage paid by the employee per employee for all employees making less than $55,000 during the reporting period is greater than the average wage paid by the employer per employee for all employees making less than $55,000 during the same reporting period of the prior calendar year.

   Further, the credit cannot reduce the employer’s obligation for any payment due under the Section by any more than the percentages laid out below:

   1)    For reporting periods that begin during the calendar year 2018, 25%;

   2)    For 2019, 20%;

   3)    For 2020, 15%;

   4)    For 2021, 10%;

   5)    For 2022, 5%;

   For Calendar years 2023 through: (1) December 31, 2025 for those employers that employ more than 5 workers during the applicable period; or (2) December 31, 2027 for employers that employ no more than 5 employees during the applicable payment period, the total amount of credits awarded to a taxpayer in each calendar year shall be equal to the total amount of credits awarded to the taxpayer in calendar year 202

 

In short, if a business isn't making a profit, a common situation in the first 3-5 years of startup, this credit won’t help to close the gap in the wage increase.

Why I Mention This:

Last year, Maeva’s reported a $16,000 loss due to essential reinvestment needed in equipment for both our upstairs operation and kitchen. Our revenue has seen slight growth in our first quarter but remains on track to see a $16,000-20,000 net income this year. If the minimum wage increases our payroll liability to extend beyond this amount, the tax credit will not apply to our business.

3. Tax Adjustment and Price Increases

Another piece to adjust is pricing.

At the moment, Maeva’s Coffee is incredibly competitive on pricing. We pay a premium on our most essential supplies to provide a product that is noticeably higher in quality than franchise competitors. Yet, our prices are equal to if not lower than your neighborhood Starbucks.

Our menu is currently priced as “tax included”- a decision that allows us to shave time off of our service (it is easier to count in increments of $.25 instead of pennies). However, this means a customer who is paying for a $4.50 16oz mocha is actually only paying less per beverage- the difference is more substantial for retail. There is not another coffee house, franchise or independent, in our surrounding area that uses this method of pricing.

In addition, non-franchise locations often tack on credit card processing fees to displayed menu pricing or have a minimum purchase amount for orders. These credit card processing fees are higher for businesses processing small ticket orders at a smaller annual revenue than franchise locations.

To keep up with the minimum wage increase proposed in SB81, we could keep our menu prices “the same” but reconfigure our point of sales system to add on state/city sales tax and processing fees. If that wasn’t enough, we could raise our base prices.

4. Reinvestment Reduction

As a new business located in a historic building, there is always a need for structural repair or improvement.

In 2016, we reinvested $16,000 of our net income into our kitchen facility. This year we anticipate spending between $3,000-5,000 in adding a second restroom to our main level.

If necessary, we could slow or stop improvements to account for rising labor costs. It is possible that declining margins would begin to outpace depreciation costs with aging equipment over the course of several years.

Less frequent maintenance also creates a risk of service interruption due to failure of essential equipment.

5. Employees Under the Age of 18

SB81 does not offer as substantial of a raise in the minimum wage for employees under the age of 18 who work fewer than 650 hours annually. This law is intended to help seasonal operations- such as summer camps and public pools.

Some year-round operations might try to skirt the intention of the law by hiring employees under the age of 18 and terminating their employment prior to the 650 hour limit.

However, the coffee industry requires a greater level of technical training. The cost of training a new hire for Maeva’s is around $400, and can rise to around $800 when training a new barista who requires product to burn and learn.

The financial aspect of this strategy, coupled with the poor impact it would undoubtedly make on staff morale, doesn’t make it an option I’d consider for my business. However, it may be something we see in franchises operating in Illinois should this change to minimum wage become a reality.

6. Staff Reduction

SB81’s biggest critics cite the inevitable loss of jobs this bill would cause. However, “loss of jobs” associated with this bill could mean several things. 

• Some businesses will not be able to support the increased cost of employment. This may be the “straw on the camel’s back” for businesses that are unhealthy for reasons other than the increase burden of labor. They may close, but one could argue this is only expediting their inevitable demise. That being the case, one could argue that currently struggling businesses shouldn’t be factored into numbers regarding job loss when considering the impact of the minimum wage increase.
• As margins grow thinner, older business owners may decide to retire earlier than planned. Closing businesses could create a decrease in the number of jobs available.

Again, one could argue that these businesses were going to close anyway. However, retiring business owners may be counting on the sale of their business, its equipment, or property to sustain them in their twilight years. Without a positive economic market in which to sell their business, a rippling effect may be seen 10-25 years after this increase with heightened strain on our medicare/medicaid system. Is this a measurable effect? Business owners make up a small percentage of the general population.

The financial cost might not be measurable, but the perception of the entrepreneurial experience may be. The more difficult it becomes to survive and thrive on a personal level as an entrepreneur today- the less likely candidates for entrepreneurial ventures will be to start businesses of their own.

• Some job loss will be reduction. Small business owners will have to balance the demands of their current operation, make sacrifices to service, or pare down operational aspects to support fewer staff. Owner/operators entrepreneurs may choose to increase their own workload to alleviate the payroll increase.

Just like a chess game in progress, it is not a single move that will aid a small-town coffee shop in its adaptation to a $15 pr/hr minimum wage but a combination of these variables.

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SB81: The $15 Minimum Wage & Its Implementation

SB81 would raise the minimum wage to $15 per/hr over the course of five years. The bill outlines its implementation as follows:

July 1, 2010 through December 31, 2017 every employer shall pay to each

of his or her employees who is 18 years of age or older in every

occupation wages of not less than $8.25 per hour, and from

January 1, 2018 to December 31, 2018 every employer shall pay

to each of his or her employees who is 18 years of age or older

from January 1, 2019 to December 31, 2019 every employer shall

pay to each of his or her employees who is 18 years of age or

older in every occupation wages of not less than $10 per hour, 

and from January 1, 2020 to December 31, 2020 every employer

shall pay to each of his or her employees who is 18 years of age

or older in every occupation wages of not less than $11.25 per

hour, and from January 1, 2021 to December 31, 2021 every

employer shall pay to each of his or her employees who is 18

21 years of age or older in every occupation wages of not less

than $13 per hour, and on and after January 1, 2022 every

employer shall pay to each of his or her employees who is 18

24 years of age or older in every occupation wages of not less

than $15 per hour.

The conversation surrounding small business and minimum wage is complicated. For the sake of simplifying this analysis, the projected experience of our shop and a $15 minimum wage increase below assumes the following:

1. That we experience no more than a 20% projected increase of growth over from 2018-2022 and experience no drop in revenue
2. No increase to our CoGS for this period
3. No increase to State or City Sales Tax for this period
4. No equipment repair/purchase exceeding $10,000

While it would be nice to say those things are possible, the reality is one or more of these variables to our business will change before the minimum wage reaches its final increase in 2022. Although calculating every potential possibility would make the hypothesis in this post more mathematically comprehensive, I wanted to create an article that spotlighted the effects of SB81 with as little complication as possible.  

Here is the plan of change we would most likely follow if this bill were to be signed into law:

2018: Year One

The first year of this bill’s affect- 2018- we wouldn’t have to “feel” much financially. The bills states that:

From January 1, 2018 to December 31, 2018 every employer shall pay to each of his or her employees who is 18 years of age or older in every occupation wages of not less than $9 per hour.

With the exception of one new hire, all of our staff currently make at or above $9 per hour. The loss of being able to hire in at the current minimum wage, and then giving a wage increase after training, would cost around $270 per year, assuming three new hires annually (.75 increase x 120 hours x 3 hires = $270)

The True Cost of Leveling the Playing Field

The main detriment to our current business would be competitiveness. Since opening for business, we’ve made it a priority to have both a better atmosphere and better wage for employment than franchise competitors. With minimum wage raising to $9 per hour, our current rate no longer gives us a hiring advantage.

Looking forward into 2019, my first move to adjust our small business to this state law would be to start a new redistribution of tips through payroll- raising the wages of staff above the $9 per hour increase so we can continue to offer higher wages than our community standard. We’d increase new hire wages to $10 per hour- with veteran staff wages rising proportionally to compensate for their experience and dedication to our business.

2019: Year Two

In 2019, if made a law, SB81 would increase minimum wage to no less than $10 per hour beginning on January 1st.

This being two years out in operation, I plan to realize a 10% growth in revenue by the end of the second quarter in 2019.

Between 2015 and 2016, we saw a 14% increase of revenue with only a 1% increase in CoGS (our kitchen investment has allowed us to reduce our waste and streamline our supply). CoGS, or cost of goods sold, does not include labor. As sales increase, it is expected that the labor hours required will also increase (ours raised 10% for this 13% overall increase).

Using those values, to keep our current staffing at two people on shift throughout all open operating hours, we can expect a 10% growth in revenue would cause a 7.7% increase in labor.

In 2016, we paid out:

8,113 house labor hours

3,360 kitchen labor hours

11,437 total labor hours

With a 10% increase in revenue, this would cause an increase of:

624 house labor hours

258 kitchen labor hours

As mentioned before, the house hourly increase can be covered by tip distribution. However, kitchen staff are not eligible for tip distribution. With the $10 pr/hour minimum wage in 2019, we would see a rising payroll burden of around $1,800-$2,000 annually.

This burden isn’t too great yet. However, I don’t want to sacrifice service or our brand- so I would likely begin to shift the schedule so there would be one barista on shift for the last hour of the night instead of two.

This change would cover the payroll increase for kitchen staff as well as competitively raise wages for veteran staff.

2020: Year Three

If enacted into law, SB81 would raise minimum wage in 2020 to $11.25 per hour.

At this point, we can no longer rely on current tipping practices to cover our rising labor costs for house staff.

We would need to budget an additional $1.73 pr/hour for kitchen staff and $1.25 pr/hour for house staff, amounting to an additional $15,900 annually for labor. If we wished to stay competitive by continuing to reward trained/veteran staff with proportionally higher wages- and continue the practice of hiring new staff in at more than minimum wage- that cost raises to $29,900.

Had we not reinvested into our kitchen in 2016, Maeva’s Coffee would have shown a net income of just over $12,000. Factoring in a projected 12% increase in revenue over the next three years, we can estimate in about another $1,000 to this number. Without any changes made to pricing, material costs, staff, etc- this net income is the “cushion” we have to accommodate increased labor costs.

Now pieces on the chess board must be developed into a position.

At this point in our hypothetical situation, we’ve been fortunate enough to not really “feel” the impact of rising minimum wage as other community businesses may be experiencing. Year three would be the point wherein the variables mentioned above would have to be changed to cover the rising labor cost and maintain a safe margin for unexpected equipment repair or emergency operating expenses.

First, we would begin charging state and city sales tax, as well as credit card processing fees, in addition to our current menu pricing. With a projected revenue of $370,000, that would bring in:

$300,000 x .0175 = $5,250

$70,000 x .0785 = $5.485 ($10,745 taxes)

$370,000 x .6 = 222,000 (approximate credit sales) x .025 = $5,500

Total Increase of $16,245

These numbers assume no increase in city or state sales tax through the end of the 2020 fiscal year.

By no longer offering our product with prices including tax, and assuming a net income of $13,000, we have working capital of $29,245 with which to cover the minimum wage increase and continue to provide competitive wages for our staff. This would negate any income or “cushion” for any unexpected equipment needs or emergency problems, or our available funds for growth or improvements to the business.

At this point, I believe it's be reasonable to increase pricing. If you are already going to change the way you pricng works (no longer using increments of $.25), one could also add a percentage increase across the board to cover the wage demands of the state. By increasing prices by an addtional 5%, we would cover rising costs and still have an income of approximately $17,000- a pool necessary for emergency expenses and repair. This would be an increase that is surely noticable to the customer.

2021: Year Four

In 2021, if enacted into law, SB0081 would increase the Illinois state minimum wage to $13 pr hour. If labor hours were to stay static to our 2020 calculations, this would increase payroll by $21,600.

At this point- having already exhausted our tip cash flow and freshly “increased” pricing in the minds of customer- it would be time to look at staff reduction.

For our current level of traffic, we don’t need the level of staffing we maintain. I employ additional staff because I feel it does lighten the workload and keep customer service exceptional during our heavy hours- as well as give everyone a morale boost during slower times.

I would evaluate my staff on speed, consistency, and service to find who could carry heavier traffic hours with minimal effects on quality or timeliness. In looking at our current scheduling matrix, I’ve determined our “break even” point for having two staff on shift is $60 in sales per hour. Realistically, if the bar is fully stocked, an experienced veteran can handle around $90-100 in sales per hour. However, multiple hours at this rate can lead to inventory shortage behind the bar, mental fatigue, and order inaccuracy (product waste). With this in mind, I would create a schedule based on our hourly sales trends collected to that point, raising the bar to scheduling two members on staff at the $80 benchmark from the $60.

I realize this would put strain on our staff and could lead to an environment where discontent is more likely. Also, realistically, when I look at my current staff, I believe only a percentage could handle the additional load.

How I Plan to Ensure Quality and Morale

To incentivize my best staff, I would split the difference between the labor savings. Instead of just telling them to work harder for the wages they’ve already been earning- a path Starbucks was recently criticized for taking -  I’d offer those who could handle the load a substantial raise. For instance, a staff member who was able to handle $80 solo sales hours well would be saving me at least the $13 per hour I would typically pay a second person to be on. I would offer staff capable of this an hourly rate of $17 pr hour, reducing our labor hours and saving $9 per hour.

Shaving 25 hours per week by scheduling solo shifts, and accounting for the pay raise for our most capable staff, would free up an additional $11,500 per year to put towards the $21,600 gap with the $13 minimum wage.

At any given time, we typically employ 2-3 high school or college students who work 15-20 hours per week around their school schedule. A reduction of 25 hours per week would eliminate two of these part time positions at Maeva’s coffee- bringing our house staff to 6.

This leaves a $10,000 gap to close with the 2021 minimum wage at $13 per hour.

The Truth Behind Being an Owner/Operator

In 2017, on average, I (as an owner/operator) work 2 shifts per week in Maeva’s Coffee averaging 12 hours/wk or 612 hours annually on shift. I spend on average another 13 hours/wk or 663 hours annually on office work, running errands, and behind-the-scenes work. In the prior years of operation, I was clocking in between 45-80 hours per week but, thankfully, our shop has grown from a fledgling startup into a smooth operation.

Having the extra hours available has allowed me to concentrate my other 50 or so work hours per week on our business incubator at The Milton Schoolhouse. Without my attention, our growth had stagnated in 2014-2016. However, this year, we’ve seen the influx of two new startups and the expansion of an existing business in our first quarter alone.

Should Maeva’s Coffee require me to step in to cover additional shifts, we risk seeing a slowing in our growth once again.

Facing a $10,000 gap, I could reasonably work an extra shift per week without jeopardizing our growth completely. If I were to take on an early weekday morning shift- say an opening Monday shift that wouldn’t necessitate a second staff member, I could lighten the payroll load by $26 per/hr. At 7 hours a week, that’s 357 hours annually or a $9,300 payroll reduction.

That 7 hours a week would also eliminate the need for another part time staff member, bringing our house staff to five employees (not including myself). The remaining gap caused by the minimum wage increase for 2021 could be taken from net income without putting Maeva’s at critical risk should unexpected expenses arise.

2022: Year Five

In 2022, if enacted into law, SB81 would raise the minimum wage in Illinois to $15 per hour.

To determine the additional $2 per hour burden on our payroll costs, we are going to assume our business has hit the 20% projected revenue growth by this point.

This would mean:

2022 Revenue = 390,000

Payroll increase of 15.4% or 13,200 labor hours paid out. This is a 7.36% increase from our last revenue increase of 14% in 2020.

Raising minimum wage by $2 from the year prior would mean an additional payroll burden of $26,478 per year.

In 2016, Maeva’s Coffee made 66,500 beverages. Factoring in a 20% projected increase, we can hope that by 2022 that number is around 80,000. If we were to increase all beverage pricing by $.32, we could realize a $25,500 gain that could be used to close the $15 minimum wage gap. If we instituted a similar $.15 increase for food items, we could realize another $1,098. This (on average) 8% increase in beverage prices and (average) 6% increase in food prices would allow us to cover the $15 minimum wage increase.

Five Year Strategy Summary

In analyzing how SB81 would be implemented if signed into law, the five year increase to a $15 minimum wage in Illinois would cause the following changes to our coffee shop’s current business model:

• A 43% reduction in house staff, or, the elimination of the equivalent of 3 part time positions, or, a 30% reduction of staff overall

• For remaining staff, an average 14% increase in pay prior to taxation over the five year period

• A 30% on-shift workload increase for Owner/Operator

• An pricing increase of approximately 15.3% on food and beverages over the five year period as compared to 2016 pricing

I believe we would continue to survive and operate at our current level through this period.

However, after five years of increasing labor burden, eliminating available positions, and increasing costs, we wouldn’t realize any increase to our business’ current valuation.

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The Psychology of Competitive Chess & Minimum Wage

Anxiety runs high while playing competitive chess.

Familiarity brings comfort. When playing a friendly game with a regular in Maeva’s, I’m relaxed. There is very little at stake. Familiarity brings comfort because it creates an easy environment for experimentation and growth.

Playing tournament chess is a different beast.

Seated across from a strange face, the clock ticking in an unfamiliar environment, I’ve often played games that aren’t my best. Once a game has ended, there is a dizziness from the sheer level of effort and concentration involved.

On the human level of this pending change,  I anticipate small business owners will find themselves facing the next five years of implementation with a dizzying anxiety. Those of us who don’t loose position early on will look up in 2023 with elation found only from having survived ourselves.

Not knowing the plays, the traps and tactics each industry would afford during this change, I am sure I will be surprised by those who resign from their business and those who continue on once the law has been fully realized.

For me, as many of my colleagues, our business is our life. We don’t look at change and consider whether we should or should not play. We hope to find ourselves in the best position possible to pursue that dynamic American dream of entrepreneurialism. But if SB0081 became law no longer would we be free to experiment, try new things, and increase value without increasing cost. Instead we would face those tournament conditions and be forced to continue to play for survival in place of growth.

Social Smart: Instagram Essentials

Quick Note: This post focuses around entrepreneurs and business with

• fewer than 5,000 followers on Instagram

• who are looking to grow their income

• by creating meaningful relationships with real people

What NOT to expect: I DON’T endorse strategies that “buy” followers or implement “follow for follow” techniques.  

The plans I develop for my clients- and our businesses at The Milton Schoolhouse- focus on organic growth. The purpose of a successful SMM plan is to put your business in the hands of the people who enthusiastically support it.

If you are looking for quick-fix influencer techniques, there aren’t any in this post.

These are real social media tactics for solid, sustainable growth.

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The 10,000 Person Myth and The Problem with Growth for Growth's Sake

The biggest problem entrepreneurs face on social media is losing site of the big picture. Clients say, “I want to grow my Instagram following to 10,000” and my first question is always, ‘Why?”

Focusing on growth for growth’s sake is superficial. Having more followers doesn’t automatically equate to a boost in revenue. A great social media marketing plan is a tool for business success- which typically means:

• Finding new fans

• Creating and Deepening Relationships

• Selling

Different industries, different applications- the goal of every social media strategy is ultimately the same: to create income by creating relationships.

Maeva’s Coffee is a local, community coffee shop. We have one location and no ecommerce. When I set the goal of hitting 1,500 followers on Instagram in January, it seemed laughably small. Instagram is a powerful social media platform, and I’ve coached other start ups into curating five figure fan bases in months!

What made my goal different was that I limited myself to finding followers who lived close enough to become patrons. If I had a million followers but none of them could visit the shop, my ego may be pretty happy but it wouldn’t have actually helped Maeva’s grow financially.

@MaevasCoffee on Instagram remained at a steady 1,350-1,400 followers for six months. I wanted to grow that number. Adapting the strategies I use to manage larger accounts, I was able to organically hit our 1,500 goal in seven weeks. Four months out, our following has continued to grow and is set to hit 1,700 this week.

 

The True Value Of Organic Growth

1700 seems small but consider the impact.

How would an extra 200 customers affect your business?

An extra 200 people visiting Maeva’s Coffee once per month is a $24,000 increase in revenue annually. If they frequent more often, as most people do, it becomes enough to provide full time employment for another member of our community. Small gains on social media have big impact!

Instagram’s Social Media Power

Thousands of entrepreneurs and artists use Instagram as their only business outlet and succeed. For niche businesses, or businesses focusing on a market of less than 25yrs, Instagram is a natural choice.

90% of Instagram’s users are younger than 35, and 60% of its 400 million users log in daily.

Instagram is perfect for businesses and entrepreneurs who aren’t tied to a geographical location. If you’re an artist, freelancer, or e-commerce entrepreneur who can sell and deliver worldwide, this is an excellent platform for growing a world-wide following in your niche. 75% of Instagram’s users reside outside of the United States; an incredible opportunity to connect with true fans around the globe.  

For a brick and mortar like Maeva’s, and for larger e-commerce based businesses, I recommend choosing 2-3 social media platforms to reach your market, concentrate your focus on those platforms, and ignore the rest.

With Facebook’s recent integration with Instagram, using both platforms in tandem is an easy way to broaden your reach.

A word of caution: Don’t think of Instagram as an abbreviated Facebook. Reposting from one platform to the other without considering their separate audience is a big mistake. Look for more on making the most out of using both platforms in an upcoming post. In the meantime, dive into Facebook’s strengths here.

Is Instagram Right for You?

Don’t think you must use every social media platform to have a solid social media outreach. When I work with a client and establish new social media accounts for them, I focus on Facebook and one other platform relevant to their brand model.

How do you know if Instagram is a good platform to choose for your business?

Instagram, works well for brand platforms that have one (or more) of these characteristics:

• Highly Visual (Think: Photography, Visual Art, Theatre, Dance)

• Personality Based Brands (Think: Cosplay, Gamers and Geeks, Life Coaches, Fitness Experts)

• Social and Shareable (Think: Meme Congregators, Political Commentary, Social Activists, Personal Wellness)

• Entertaining or Inspiring (Think: Comedy, Travel Hackers, Musicians & DJs)

• Niche (Think: Female Cigar Lovers, Northern Native American Tribal Beadwork, Geographically Restricted Brands, Specific Historical Interests)

Instagram isn’t for you if you don’t have relevant and interesting visual information to post 5-7x weekly.

The good news- you can take advantage of Instagram’s adverts to reach clients. Through Facebook’s advertising for business, you can now redirect clients to your Facebook page or website. This is GREAT if you have a special event or a niche product to promote but don’t want the upkeep of an ongoing account.

For success inspiration, here’s a list of incredible people who use Instagram as their primary social media platform- ranging from historians to artists to brick & mortar businesses:

PreciousCreature (Pet Preservation & Taxidermy) 14.1k followers

DrLindseyfitzharris (Medical Historian & Author) 105k followers

Strangelovely1 (A Beautiful Brick & Mortar Vintage Shop in Chicago) 3k followers

PhilJarvis (STL based Sign & Muralist) 95.K followers

PetitesLuxures (French Artist- Line Drawings/Negative Space Art of Sex and Sexuality) 736K Followers

Strange Donuts (STL based funky donut business) 37.2K followers

QueenofLuna (SFX Artist Cosplay) 368k Followers

Skoll_and_hati_custom_armory (Traditionally Made Viking Axes & Weaponry) 34.9K

The Shadow Ban

If you currently have an Instagram account but aren’t making the most of it, using the guides in this article will cause an increase of activity for your account.

This will make your account vulnerable to the Shadow Ban.

A Shadow Ban is the act of blocking or limiting a user’s reach from their audience without notifying them. It’s different than having your account reported (and blocked) for posting material that violates a community’s content regulations. When you’ve been blocked, you are sent a message with the repercussions and actions you can take to restore your account. Shadow Bans aren’t as cut and dried.

Twitter, Facebook, and Instagram justify shadow banning as a way to cut down on spam in their community’s content, However, there is question that the real motivation is financial. By building a quality social media account that is thoughtfully curated, creative, and strategically tagged- you’ll be getting exposure to the community for free. Shadow banning is increasing on Instagram as paid exposure has become available through Facebook Adverts. Those who have been victims to a shadow ban believe it is the platform’s way of forcing users to pay for reach.

By connecting with your following through your content, your account’s activity will increase. If you then experience a sudden drop in traffic, likes, or comments, your account may have been Shadow Banned. You account will no longer searchable to users who aren’t already following you-  and you won't receive exposure from hashtag or username searches.

To learn more about the Shadow Ban on Instagram, how to avoid it, and how to check if your account has been placed on Shadow Ban, check out this article by Benjamin Chacon.

 

 

Content: Perfect Vs. Responsive

In the first post of this series, we looked at the cornerstones to crafting content across any SSM platform that makes you human.

With Instagram, just as in any social media platform, there is no such thing as perfect content.

You may envy accounts where every photo is pristinely staged or cleverly captioned- but your perfect content is responsive content. If you are getting an engagement rate of over 6%, your content is on target.

Instagram is a tool for communicating your brand. Whatever language or visual perimeters it takes to connect with your fans is the content you want to create.

What makes for responsive content on Instagram? Here are four qualities your content MUST have on Instagram if you want to make the most out of this platform:

1. Be Honest

   Your audience is following your brand because they want to know what it is and who you are. Your content MUST be original and authentic. Don’t send mixed signals by jumping on trends or changing your style thoughtlessly. Commit to your brand and create content that communicates your message.

   Strong brands work. Read why having a strong brand creates small business success here.

2. Dialogue Oriented/ Process Oriented

   By showing work-in-progress or involving your audience in the creation of upcoming events, you’re inviting them to interact with your brand.

   @happydartist talks here about overcoming the fear of showing incomplete works on Instagram- and how her community fell in love with her work through her work-in-progress posts.
3. Consistant

   Even more than Facebook or Pinterest, Instagram requires consistency for organic growth and revenue creation. If you are using this platform, commit to releasing content 5-7x per week.

   Beware, though, of smothering your fans’ feed. Posting multiple days per day increases the  risk of post cannibalization. Simply put: multiple posts will split response (one post will ‘cannibalize’ the attention of the other) and reduce the impact of your work

4. Timing- the BIGGEST secret ingredient for creating successful, responsive content.

   Instagram currently presents content in the order it was posted. Unlike Facebook, which ‘weights’ your business’ content according to the platform’s metrics  and determines your follower’s potential level of interest, for now, Instagram still shows your entire follower base all of your posts.

   To get the best place in your follower’s feed, post when they’re most likely to be browsing. Discover when this is by using an analytics tool and doing a little experimentation with your content.

   Well-timed mediocre posts outperform poorly timed awesome content. Marrying timing and great content together will create the perfect environment for Instagram success.

 

 

Posting To Be Seen.

If you just started your Instagram account- or if your social media management style has been lackadaisical- finding your best time to post is essential to creating momentum on your account.

Step One: Sign up for a free analytics service.

I use Iconosquare. I find their paid service wonderful for managing account, but they have a great free two-week trial to get you started.

Now put on your social media lab coat and start collecting some data!

Step Two: Create a hypothesis.

Write down some guesses on when you imagine your followers are most likely to be browsing on Instagram.  

Think about your market. For a 25-35/yr old market, Instagram is most browsed at the office (think 10am-3pm). For a younger market, weekdays between 10pm-1am might be your best shot.

If you’re a brick-and-mortar based company, experiment first in your location’s time zone.

If you’re an ecommerce platform or an artist, do some searching through your sales history and look for location patterns. Do you ship more product to urban areas? Are they concentrated in a city in particular?

Step Three: Post, Post, Post.

For the next two weeks, post two Instagram updates per day.

Don’t worry about post cannibalization at this point - fan loss due to oversaturation. Your fan base will start growing when you have collected the right data and quickly correct for any collateral damage.

Post the first post within a cycled morning range, and the second within a cycled evening range.

    This might look like:

    Day One: 9am; 1pm

    Day Two: 10am, 2pm

    Day Three: 11am, 3pm

    Day Four: Noon, 4pm

    ….etc.

Too much to think about? No worries! Apps like Iconosquare allow you to schedule posts. In an hour, you can gather and create your content, schedule ALL of your posts for the week, and get back to running your business.

The more data you have, the more accurate your study will be. I recommend 10-14 days before looking at your data.

Step Four: Look at your App’s Analytics.

Iconosquare has a section simply titled “Best Time to Post”.

That’s it. If you have a few different times that seem to be getting good response, you may not have a large enough following to really determine the best time to post. Continue to post once per day, but mix up your scheduled content to fit the times you’ve discovered base on your experiment.

Look at your data at least once a month or every 1,000 followers to hone your timing as your reach grows.

 

 

A Hashtag Secret

Hashtags are how Instagram users search content. Using them well is the best way to introduce your brand to new fans.

There is no perfect way to use them. However, the way you format them, the quantity you use, and the tags you choose will affect the way your brand is accessed and accepted by browsers.

My favorite format for hashtagging is to use them separately below my post caption rather than inline. I feel inline hashtags disrupt the flow of valuable conversational real estate. Their standout color and extra character (“#”) is a visual distraction. But, this is purely subjective. Some freelance artists and entrepreneurs find it difficult to think of good tags to use at the end of their caption and, much like highlighting a textbook, enjoy the ease of tagging important words inline.

Here's an example of what my preferred spacing looks like:

More Isn’t Better.

The more hashtags used for an Instagram post, the more searchable that post is. By that philosophy, it would make sense that adding an enormous block of tags below each post would be an advantage to increasing your reach.

Not so. Using large amount of hashtags doesn’t lead to organic follower growth. In fact, using too many hashtags can backfire- leading to a greater number of spam or bot followers or priming your account for getting flagged as spam itself.

5-10 highly relevant hashtags will have a better impact than two dozen unfocused tags.

Save yourself the headache of hashtagging every Instagram post with every search term imaginable. Instead, tag smarter on Instagram by choosing hashtags tailored to the individual post and your brand.

When a user searches for a hashtag, most recent posts with that tag are shown first with older posts following. Increase your staying power- and your brand’s uniqueness- by using tags with a lesser popularity.

Instagram makes this easy by showing how many posts are currently associated with a hashtag as you type it. Hashtags with 80+ million posts associated are popular, but may not connect you with focused fans.

Finding solid fans is as simple as using specific hashtags- for example, look at this Maeva’s Coffee post. By choosing #coffeeshop, I'm more likely to reach followers who enjoy coffee at coffeeshops rather than choosing the more general hashtag of #coffee, which could include someone drinking instant stuff from a machine at home. Plus #coffeeshop has been used around 3mil x while #coffee has been used around 70mil x. This means a post with the hashtag #coffeeshop is more likely to stay within the first few finger scrolls of a search for the next couple of days. 

Focus On Your Market

The second secret to growing your following on Instagram is knowing your brand focus- and consistently tailoring your tags towards that market.

For instance, Maeva’s is a community brick and mortar location, not a franchise or a shop with product accessible multinationally. For that reason, I often use region specific hashtags such as #altonillinois, #stl, or even #midwest.

Also, Maeva’s Coffee is a Latin/Central/South American inspired shop with ties to those cultures. Instagram is an incredible platform for accessing international and immigrant communities, with over 300 million users residing outside of the United States. Using relevant Spanish hashtags and Spanish captions has allowed us to reach out and welcome representatives of those cultures in our local community...as well as connect with coffee lovers in the most coffee centric regions of the world.

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Crafting authentic content, a little data analysis, and a bit of hashtag strategy is 90% of what you need to see success on Instagram. The ease of access to an incredible community of users, the app’s aesthetic and authenticity, and the variety of free/inexpensive tools available to make it convenient makes Instagram my top choice for social media platform.

Interested in more social media tips? Watch for the upcoming post in this Social Smart series on combining multiple platforms to create an amazing social media strategy!

Social Smart: Does Spending Money on Facebook Work?

Facebook gets a bad rap from small business owners.

The metrics change so often that, even writing this, I know the tutorial aspects of this post may not be relevant next year. Long term users of Facebook's business pages are quick to grumble about the old days when every fan saw every post you made without pay-for-exposure...or even the early advert days when $5 would buy you more reach than you could ever need.

Although Facebook has changed drastically in the last decade, the current version isn’t impossible to conquer. The platform has a bright side: with over 1 billion active users every month, Facebook is still the best platform to reach most markets.

Facebook as a Foundation to Your SMM 

Each social media platform has its unique strengths when to comes to connecting you with your market. Facebook is a great jack-of-all trades for connecting to all markets, however, it is a powerhouse for entrepreneurs and business owners looking to:

• reach a geographically localized market

• reach an economically affluent market between the ages of 25-55

• Reach a primarily female market

I recommend businesses choose 2-3 social media platforms that best reach their market, concentrate their focus on those platforms, and ignore the rest. Even with the popularity of other platforms rising, Facebook’s influence is still too big to ignore. I have never created or consulted on a social media strategy that did not use Facebook as a cornerstone platform.

Remember that, as a entrepreneur, you’re using this platform as part of a social media marketing strategy- not a sales strategy. Solid marketing and sales are crib mates but they are not the same.

Marketing is about communicating your business and brand to your audience, building relationships, and creating revenue through these relationships. The stronger your brand is, the more focus you have on your best market, and the more success you'll have on any social media platform.

A word of caution: Knowing how to use analytics and Facebook Adverts won’t help you at all if you aren’t producing consistent, good content that reaches out and connects to your market. These tools deliver the message, but whether they work or not largely depend on the quality and focus of your content.

Here are some great ideas on how to start creating responsive content for your fans. 

Facebook Insights: The Data Doesn't Lie

Facebook has a decent data section for business pages under the “Insights” tab. If you’re not a “numbers” person- don’t let that deter you. The tab is packed with information. But, if you're looking to create a SMM (social media marketing) strategy for your business, there are only three things you need to look at right now.

The first is under the “Posts” section on the left hand tab under insights.

1. Know WHEN to talk to people

You might not know what your fans like, but you can know when they are available.

This screenshot from Maeva's Coffee's Facebook insights shows that our 4.7k followers are most online from noon-2pm and from 7pm-9pm CST. As far as days, our traffic is steady through the week with a slight uptick in activity Sunday-Wednesday. 

How is this helpful? 

We could dive into the in the metrics, algorithms, and black magic of how Facebook determines if your post is shown to a fan. However, this is the most basic explanation of how knowing when to post helps your business:

1. The more (often/recently) a fan interacts with your page, the more likely your update/post will appear organically in their feed

2. By posting when they are most likely to be browsing, they are more likely to see it/interact with it

3. The faster/greater number of people who interact with new material on Facebook, the more likely it is to "go viral" on Facebook. Facebook will begin to show your post to people that only occasionally interact with your page...and then spread to fans who never interact with your page...and finally people that might want to be fans of your page. 

So, posting great, responsive content when people are online is the first step in not having to pay for exposure on this platform. 

2. Know WHAT people want to see

I'm embarrassed to admit this but when it comes to managing my business' SMM...I'm the laziest business Facebook-er in the world. A quick glance at this recently published post list (also under the "Posts" tab of Facebook Insights) will show these weaknesses: my posts are infrequent, haphazardly strategized, and predictably result in around 20%+/- reach. 

Instagram is my preferred SMM platform for Mavea's Coffee. But, back to Facebook.  

This view shows which of your previous posts have caused the best response from your fans.

Don't hit that "Boost Post" button!  Before we move on to paying for anything- take a look at these two posts. We're going to come back to them when I show you how to make Facebook Boost/Adverts actually work to reach your market. 

3. Know HOW you stack up

One final piece of Facebook insights you should be using: The Pages to Watch. It's located on the "Overview" tab, all of the way down at the bottom of the page. 

Here's what we have set up for Maeva's Coffee:

Facebook allows you to "Watch" other pages to see how your page is preforming comparatively.

It's good to know what's normal!

If you can't think of any direct competitors (Maeva's Coffee doesn't have direct local competition), this is still an incredibly useful section. We've added both Old Bakery Beer and Shiver's Custard. Neither of these businesses are coffee shops, but we share a lot of the same customers. Plus, both of these awesome local businesses have very responsive Facebook SMM going on in our local market. Use this section to motivate yourself. Add businesses you want to model your SMM after- don't just creep. 

We also have Rise Coffee on our "Watch" section because they have what I consider to be the most responsive SMM for any single location, non-franchise coffee house in the STL area. 

Under "Pages to Watch", add direct competitors, but also businesses that:

• have similar a similar market

• serve your same location

• do this Facebook thing better than you do

• are the exact same thing as you are- or want to be- but in a different location

If you're looking for a secondary analytical tool for Facebook, my favorite free service is Komfu. Check out this is a screenshot from the Maeva's Coffee Facebook analysis:

This first box, "Fan Penetration" is roughly the same as "Reach" on Insights. Our reach down 9.56% because we haven't posted much recently. However, our overall penetration is 23.26%. Average penetration is 16%. You're off to a good start if your numbers are higher. 

The second highlighted box is "CTR" or Click Through Rate. Of the people who saw your post while scrolling through your feed, this is the percentage that interacted in some way (this includes "likes", comments, click through to page, etc). Anything over 10% is rated "very engaging". 

The third highlighted box we're going to use in this upcoming section....

Are Facebook Adverts and Boosts Worth a Damn?

Yes?

Again, nothing will work if you aren't creating the right content. Most people who say that "paying for Facebook doesn't work" have whittled away their budget with with content created around the wrong outcome. 

Social Media Marketing is not the same as traditional advertising. Traditional advertising seeks to covert on short term occurrences and one-off placement. Good SMM seeks connection that builds life-time customers.  "Likes" do not equal sales and SMM strategies that use this as a measure will not succeed. 

Social media is a tool for your business to create relationships with admirers, find the dedicated people who will ultimately be the core of your business, and create organic market growth. 

To that end, paying for Facebook reach can be worth it if it's done correctly.

Under the "Published Posts" in Facebook Insights, you will see that Maeva's Coffee has boosted posts and ran adverts three times in the last six weeks. Why so few? I don't boost posts often because they are marked as "sponsored" in the feed...and that feels inauthentic to me. Secondly, Maeva's brick-and-mortar traffic is nearing full capacity without any additional advertising (!). 

What $10 in Post-Boosting Gets you on Facebook

Let's take a look at Boost.

Presumably, boosting a post will allow you to reach a larger audience more quickly, with the end goal of launching it into that "viral" level of engagement on Facebook's platform. 

Here is the post I boosted two weeks ago- as it appears to on our page.

This post is GREAT content- according to the data we have accrued over the last couple of years on our fan base. It is:

• A rare occurrence. We don't do new flavored lattes every week at Maeva's. This was a spontaneous act, inspired by a customer, that was relevant to a widely-celebrated current holiday (Mardi Gras). 
• A real product shot. We've been on Facebook long enough to know that the people of Maeva's like two things most: Tasty drinks and our resident shop cat, Buford. Posts focusing on either of these things are going to perform in the top 20% when they don't occur more often than once per week.
• An Environmental shot. Our data has shown that our base prefers photos taken in shop over photos taken anywhere else. 
• Posted at the RIGHT time. 11:38am on a weekday is prime-time for people who have mentally checked-out at work and are browsing Facebook while they're waiting for lunch break. 

Also note- this isn't professional photography! This photo was taken with an iPhone 6s near nice, natural light and uploaded direct to Instagram. Great content doesn't have to be professional but it must be authentic. 

This post has all of the right characteristics to make it responsive content without paying to boost. 

However, we spent $10 to boost this post and here's the result:

(Komfu)

(Facebook Insights)

This post reached 6,210 people (a number that extends beyond our current "like" base), received 230+ likes, and had 15+ comments. According to our Komfu, it was ranked both "viral" and having a high penetration (65%!).

Facebook shows us via the orange bar how much of that reach was organic (not a result of our paid boost) and inorganic (a direct result of our paid boost). The reach was 50/50. This post would have worked about half as well had we not boosted it. 

Was the boost ultimately worth $10? Yes.

What Facebook doesn't show you was that Thursday afternoon's after work rush vs. previous weeks. Over a dozen frozen Bananas Foster lattes walk out the door in the hours following this boosted post- with many more people coming in for their regular order because they had seen the post and started thinking about the reward of an afternoon coffee stop. 

In short, if you have something really awesome that you're proud of or excited for- your fans are going to love it, too. In those cases, use some of your anticipated revenue to get that cool thing in the hands of the people who are going to want it. 

Before we move on to Adverts, take a look at this other boosted post from February. 

The $5 we spent on this post didn't go so far. Most of reach was organic- meaning that we would've reached those fans is we hadn't have spent the money. This is because a smaller portion of our market is interested in local politics than those who are interested in treats.

As a entrepreneur, if you begin to collect data on your SMM and respond to what it says, you'll find that data doesn't lie.

You might spend some money on Boosts or Adverts that, in spite of your keenest hunch, don't produce the results you expected. That's okay! Poor performing posts and bad returns tell us just as much about what to post as our best posts do. Fortunately, Facebook boost is a great platform for a budget-minded business to micro test before launching large scale advertising. 

Using Facebook Adverts the RIGHT way

If you want an amazing Step-By-Step guide on using Facebook Adverts, check out Neil Patel's blog here. 

If you're tried to create a Facebook advert and it hasn't done anything for your business, you're probably missing a couple of key pieces of information.

Here are the two important things you can easily fix to get started the right way:

1. Change your Presets!

Facebook's presets are automatically set to make sure they max out whatever budget you've set. They want your money. 

Under "Create Ad", you'll find a range of presets you can change that will focus the goal of your advertisement so you are paying only for what response you choose.

First, make sure you choose the right objective. Most of my Adverts for Maeva's fall under "Engagement"- and then "Page Likes". I don't want to spam people who already follow us but I don't mind spending money to introduce ourselves to new people.

Changing your objective will change the options available to you from the onset of Ad creation. Be clear about what you want to achieve with this ad. 

Follow Neil's lead when it comes to selecting and audience, but there's a critical piece under "Budget & Schedule" that you MUST change that Facebook doesn't really want you to find. Look for the title "When You Get Charged" and make sure it's set for your action not per impression. 

Don't pay for impressions! Pay only for the action you want. 

Changing these presets when creating an Advert will make the most of the dollars you budget for each ad. 

2. Me Language vs. Them Language

Moments ago, I was listening to a client tell me, "I want them to know it's high quality. I want them to know it's legacy. I want..." 

Why does everyone miss this?

'Me, me, me' doesn't sell! If your advertising story starts with "I want..." "We are..." "We have..."...people will scroll right past it. It's boring. It's needy. No one wants to hear it. 

This isn't about you- it's about them.  

We are being asked to do things for companies, people, customers, clients, etc. all day, every day. Your Advert is going to be nestled in between their college friend's status asking for help moving furniture this Saturday and their ex's dog's GoFundMe.

How many times have your heard "Like our page?" A ton. How many of those pages have you actually liked? 

To find a good strategy, begin by asking: What are you advertising that is going to fix a problem, give your fans a little happiness, or let them escape for just a moment?

If you approach a stranger, which question is most likely going to illicit a positive response?

a) "Can you spare me a dollar?"

b) "Can I help you carry that?"

Make your message them centered through your choice of visuals and copy. 

or.....

Ask not what your fans can do for you- but what you can do for your fans. (Apologies, JFK) 

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Take a moment to look through your own business' Facebook data and make a few changes- let me know what you find!

Now that you have a few basics on using Facebook to connect your business to your market, we'll be adding Instagram to the mix. The next piece in this series will focus on my favorite platform for visually-rich businesses...and tactics for hash tagging your way into the hearts of the most social media savvy market on the planet. 

Social Smart: Beginning Steps on Social Media

Your favorite restaurant just posted an amazing picture and, in minutes, it has a dozen likes and comments.

How do they do that?

As a small business owner, you know your social media game could be better. However, you hate it when companies clog up your news feed with useless chatter. You value your customers too much to do the same.

Facebook, Instagram, and Pintrest are essential tools for business. However, their seemingly magical metrics and unpredictable results are a huge source of frustration to small business owners.

This is the first in a series of articles covering :

• How to choose the best platforms for your business (and ignore the rest)

• What goes into creating responsive content on each platform

• How to use these tools to put your business in the hands of your biggest fans

Whether you are a local bakery or an online information seller, this series will show you how to create real revenue by generating relationships with the people who love your business.

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Your Purpose on Social Media

You follow people with tens or hundreds of thousands of fans- but does it really generate a return?

Online marketing gurus would have you believe social media success is all about acquiring likes. However, recent studies show the “mere act of liking a brand on facebook does not affect a customer’s behavior or increase purchasing, nor does it spur purchasing by friends.” (1)

Corporations spend millions trying to increase their social media following. But you’re a small business, and you don’t have millions to spend. If you’ve ever spent money on Facebook adverts and thought it was a waste: you’re right. Standard social media practices focusing on rapid growth alone don’t have any affect on the real revenue of your business.

“Getting more followers” is the not the right focus for an entrepreneur wanting to connect with and grow their business.

Kevin Kelley revisited his 2008 article “1,000 True Fans” in Tools of Titans last year. In a world focused on quantity of followers, Kelley makes a good argument for artists and small business focusing instead on a small, dedicated following for success. The principle has been true in the businesses we’ve developed at The Milton Schoolhouse. It was 228 people who made Maeva’s Coffee possible through its first crowdfunding campaign. Furthermore, the coffee shop hosts between 1,500-2,500 visitors a week. That number is relatively small compared to our potential market, but grossed over $300k in sales in 2016.

Reframing your goal with the “1,000 true fans” mindset will change how you create content for your social media outreach.

Use your chosen platform to communicate your image in the best way possible. By creating and communicating a strong brand image, social media becomes less about selling and more about building relationships. Weak brands shout and undersell themselves to attract attention. Strong brands who communicate well have a minimal advertising budget and generate an organic connection with others. Creating long term relationships with your best customers will ultimately drive the revenue you seek.

To read more on why strong branding works, click here!

Start Getting Social

Now that you aren’t chasing after millions of fake “likes”, here are a few ways to start creating content with the purpose of connection. These are good areas to create within no matter what platform you are using. This is not an exhaustive list. But, by creating a variety in your content you will find what your fan base values more quickly.

Content that Makes You Human

Position yourself apart from the sea of faceless corporate businesses by adding a human element to your social media. People love seeing into the lives of others. This could include environmental shots of your workspace, profiles and candid shots of staff, or insight into your morning rituals. Always keep your content related to your business, however loosely.

• Content with a Cause

If a local cause related to your business or industry arises, promote it to connect to your audience. If you feel passionately about a cause, chances are your most important customers have similar interests. Spread cause-related content with a levelhead- don’t risk harming your brand with brash or angry commentary that you may later regret. However, if a cause is strongly related to your core business principles, don’t be afraid to take a stand. 

• Content with that Sets You Apart

Do you have a recipe you’ve developed exclusively for a product? Does your work support fair trade? Create content that highlights what makes your business or services one of a kind.  

• Content for Aesthetics

Break the noise of  sales and requests by creating content simply for the sake of making someone’s social media experience more beautiful. Environmental shots of your business or hometown, details around your workspace, or artistically created close-ups of your process all subtlely romanticise your business when offered without a pitch.

• Content that Connects

Connect your following to the most interesting content being created by suppliers, competitors, or other followers. Is your competition doing something you appreciate? Give them a shout out! Did your business’ web designer just build a revolutionary non-profit? Share it. Be the first to connect your followers with something they would love to share.

• Content that Educates

Create content with informational value. A florist might spotlight unusual varieties of roses during Valentine’s as a mix-up on a holiday classic. A holistic center might showcase a mineral a week and expound on its unique properties. Keep information short, easy to remember, and interesting. Always pair educational posts with quality copyright-free photography to encourage sharing.

When establishing a social media strategy, test a variety of posting formats, tags, and times.  Collect data on your postings through an analytics app appropriate to your platform (Facebook analytics, Iconosquare, etc.).

Ready to learn more about specific ways to use each platform as part as your social media strategy? Up next: how you can start using Facebook, Instagram, and Pintrest to create real relationships with customers who love what you do and will pay you what you’re worth.

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(1) "What's the Value of a Like?" Leslie K John; Daniel Mochon; Oliver Emrich; Janet Schwartz Harvard Business Review April/March ed 2017 

Sales Talk: Conversation in Small Retail Spaces

This is the final installment of a three part series on our 230 sq ft retail experiment- Bourgmont- inside The Milton Schoolhouse business incubator. If you’re looking to expand from pop-up markets to a retail location, or are considering a retail start up, check out our financials and projected income of this business model and our small space merchandising discoveries.

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Within hours of opening our experimental gift shop I realized that everything I knew about sales was completely wrong. Admittedly, my only prior experience in selling anything directly to a customer was in Maeva’s Coffee. It seems obvious- coffee shop is nothing like a 230 sq ft pop-up retail. I went home that first day at Bourgmont sheepish. The differences in selling wares in a tiny retail location and in a beverage/food establishment hadn’t even crossed my mind.

In the coffee shop, the customer was there “to lose”. Each visitor at Maeva’s enters already intending on making a purchase. As long as the environment and service facilitate a good experience, a sale is guaranteed. In Bourgmont, the customer had to be won.

It was the holiday season and I had shopping to do as well. I began to pay attention to other successful retail locations and adapt my observations to our brand. However, the tiny size of our shop presented the challenge of balancing an intimate environment with needed personal space. I soon found ways to navigate the flow of traffic through the shop and ultimately “win” sales by creating conversation perimeters unique to our space.

These are the simple discoveries that turned Bourgmont into a tiny selling success:

Create action through invitation.

300-700 visitors to the building walked by the entrance to the retail shop everyday. However, the doors to Bourgmont were set back just a few feet from the main hall. To attract attention, I created a large sign and set it on a stool just outside in the hall. I burned copal near it, knowing that the faint rising of smoke and unusual addition to our incubator's main hallway would at least cause people to pause.

It worked! People would stop, look at the shop, and look at me. But then they would walk away.

Admitted introvert that I am, it took three days of operation to discover they weren’t coming into the shop because they were waiting for me.

People are naturally curious, but they aren’t natural explorers. People wanted permission to come in- and a hearty “Hey there! This place just opened!” was enough invitation for them to step outside their normal footpath.

Make the most of each word.

A customer entering into a retail space is naturally on guard for “sales” talk. You have only a sentence of two to capture their interest and gain their trust. Don’t waste your words with box store sales phrases like “How can I help you?” And don’t say the same thing to every customer!

Every customer deserves a unique experience in your space. Keep your conversation from becoming stale by adapting to each individual who visits.

Get rid of questions with one-word answers.

“Can I help you?” No thanks, just looking. “Are you shopping for anyone specifically?” Nope.

This ties into making the most of each word. Your questions need to lead to conversation- or at least more information on how you can matchmake the goods in your shop to the customer’s needs.

Steer away from questions that can easily be answered with a “no”. These questions not only give you no further information about your customer's needs, but leaves a negative impression in the customer’s mind. “No” you can’t help me and “no” I’m not looking for anything specific fosters the subconscious impression that there won’t be anything in our shop they will want or need.

Give the customer a story.

Is the customer lingering on a product? Have they picked it up? If it has an unusual story- share it! A few simple pieces of information can create a connection between the product and the customer and set your shop apart from big-box stores.

These are some stories that helped Bourgmont wares on their way out the door:

“That was made by our friend Micah in Edwardsville. He’s a local woodworker we met at festival last year.” (Story: Unique product created by a local artist)

“My father loves that soap. Maybe the packaging reminds him of his days in the Navy. I love it because the company supports wounded veterans.” (Story: Product geared towards a hard-to-shop-for market with an altruistic business model)

“Those journals are made in Amalfi, Italy- a region famous for its paper. The edges are hand marbled and the leather is meant to become more interesting as it becomes worn.” (Story: Concentration on the long-term relationship the user will have with the product)

Tell people about other people.

In the previous post on merchandising, we talked about how customers didn’t want to be the first one to “mess up” a display. In the same way, a customer’s desire to find something special is often at odds with their desire to know their purchase is something others think is also a good choice.

Using sincere phrases that point to the popularity of a certain product or style can help an anxious customer make confident decisions.

If possible, leave a element of choice in your suggestions, especially if the customer is shopping for someone else. You don’t want to rob the customer of the experience of choosing something on their own for someone special to them.

Here’s an example of how this worked with the best-selling Cavallini printed posters we carried in Bourgmont:

People loved the low cost of these pieces and the unique choices available, often buying them as posters for others. Wall art is a tricky buy for someone, it has a personal element of style- but is also intended for public display.

If a customer was having difficulty deciding what to purchase as a gift, I would mention that the maps and the butterfly types were the most popular. Each type had two or more styles associated within. This information allowed customers to feel their draw to these pieces was valid, but also gave them room to make a choice that was personal to them.

More Tips for Small Spaces:

• Choose staff that are not loud or intimidating, who smile frequently, and who use open posture when talking to customers. There is no room for error with a small space. Any unwelcoming body language will end a customer’s experience immediately.

• Don’t box yourself in! We used an old school desk as our “check out” in Bourgmont. It was fine to sit behind the desk with a single customer shopping, but as other customers entered into the tiny room I found myself stepping over some customers to get to others. Awkward. When merchandising, give yourself natural “nooks” to place your body out of the way that also allow quick mobility.

• Your shop is an experiment! Pay attention to what sales language works for your customer base. Don’t be afraid to try something and change it as you go along.  

Do you have sales tips you’ve discovered while running a retail shop? This seven week retail experiment was a fascinating experience and I’d love to hear more from experienced retail entrepreneurs. If you would like to be featured in upcoming articles on retail-based small businesses, send me an email to meredith.elston@gmail.com.

Retail Art: Merchandising for Success

The Marco View of Small Retail Merchandising

Merchandising is an art. Understanding how humans experience traditional forms of visual art can provide solid principles for merchandising. Growing up, my mother’s enthusiasm for art shaped my vision from a young age. I loved discussions on how elements of a painting could be ordered or emphasized in ways to create narrative.  

In business, brand is the narrative. Merchandising, marketing, and the sales script are the entrepreneur’s equivalent to an artist’s color palette, choice of form, and style. I recall studying focal points in galleries, shutting and reopening our eyes as we listed aloud where our eye fell first, second, etc. This practice lead me to understanding how important the visual path of a consumer is.

Pay attention to the visual path. 

When merchandising for non-convenience retail- a shop where efficiency isn’t of primary importance as it is in a pharmacy or a grocery- the key is to create a space where the eye does not stop. The more time a customer spends looking in your space, the more likely they are to become invested and, ultimately, make a purchase.

Above all else, avoid stopping the eye when a customer first enters the space. We want to create a big picture experience with customers before they notice details.

Successful shops, both large and small, tell great stories. Ikea’s showrooms draw us into the economic simplicity and stress-free lifestyle of clean, minimal design. Local retailer Where They Roam in Edwardsville, a child-oriented home goods store, gives design-loving parents a narrative of how a grown-up taste for quality can co-exist with a desire to provide comfort and child’s sense of imagination.

The single biggest mistake that I’ve seen in new retail is ot investing in enough items to visually fill the space. Volume and diversity of product is essential in convincing the customer that your shop is worth exploring. The problem is a visual one: lack of product creates unattractive negative space that gives the impression of sparse inventory. An unplanned stop in the visual story and the eye will stop on that gap. If this happens within the first few seconds of walking in the door, it will be difficult to draw your customer back into your narrative.

In addition to creating a continual visual path, the pattern of of that path is also important. When creating a painting, typically an artist focuses on a particular subject. The viewer’s focus is on the subject, jumps to non-focal point areas and back to the subject- using the non-subject areas of the painting as context for framing the subject. This means that even a viewer who is not interested in the subject can look at the painting very briefly and still walk away with its most basic idea (“That’s a painting of an important rich man.” “That’s a painting of the birth of Christ.”).

Vermeer’s Girl with the Pearl Earring is an excellent example of a piece of visual art with a single focal point.

In retail, we want the eye to do the opposite when the customer is first observing the shop. Create a visual path that with a pattern that bounces off regular intervals from a series of graded focal points before finding an area at attracts specific engagement.

We want to create retail in which the eye has a similar pattern to Kandinsky’s Composition 8. The painting does have a major focal point (upper left hand corner) but a series of smaller focal points are also present. The eye connects these many points in order of priority with even smaller objects that create movement and fill the space.

Here are ways to translate this principle into your merchandising:

• Plan on stocking 30% more product than you think you need.

The single biggest mistake in independent retail, especially new retail, is not investing in enough items to visually fill the space. We underestimate just how many things- and the variety of things- needed to create merchandising that convinces the customer your shop is worth their time.

• Create layers and dimension

Depth is important. Mix between placing core merchandise on the front/eye level to attract initial attention and placing it in “out of the way” areas. This funnels attention deeper into a display or towards another area.

• Exploit contrast

Color, texture, size, and emotional response all exploit contrast. Contrast creates interest. Accent a single, unusual large item with an asymmetrical grouping of standard items to one side. Heighten the experience of common stock items by placing them near or in context of more exciting items.

• Don’t ignore height

Your most frequently purchased products will be at eye level, but leaving inappropriate amounts negative space near the floor or of ceiling creates the risk of stopping the eye. Plants, large focal items (we had to taxidermy mounts), fabric, rugs, visuals of how smaller products can be assembled or displayed, etc. help fill in and create an illusion of fullness.

Selecting Product 

Selecting product is easy once you’ve:

committed to a clear brand

and

committed to your target profit margins.

Keep these things in mind while selecting product to increase your success:

• Follow the 20/60/20 rule of product price range

Determine the average amount your customer spends per item in your shop. 60% of your product range should fall within that average amount, while 20% should be less than that (typically upsells or impulse items) and 20% should be “large ticket items” that are above this range.

• Seek out small, unique impulse purchase items to fill time at check out

• Plan your displays and design around “focal” items

When purchasing or curating items, keep in mind how unique or “one off” items will fit into your display. Large, expensive, or unusual items may not sell fast but they are important for creating interesting context for more saleable SKUs.

• Remember your secondary market

After defining your target market, reach out into secondary markets with crossover items.

In Bourgmont, we planned the shop to be a masculine giftwares store for the holidays. We focused around men who enjoy natural history. However, the Alt Market (all gender identities who enjoy oddities, identify as pagan, or generally think of themselves on the fringe) also enjoy natural history products. Squid tentacles in small antique glass vials appealed to both and became a natural bestseller in the shop.  

Sensory Engagement

In a Japanese parable, the student of a master gardener has just completed caring for an area of the emperor’s immaculate garden. Every plant has been precisely trimmed. Each rock has been placed in the most pleasing way. Everything is in perfect symmetry and in perfect balance. The master gardener comes to oversee the final result. Reaching up to a low hanging branch of a cherry blossom tree, he gently shakes a few of the delicate blooms onto the carefully raked sand path. “Now it is complete.”

This parable demonstrates a critical element of solid merchandising for non-convenience retail:

Merchandising should invite interaction.

Just as not allowing the eye to settle draws the customer into the space, a display that invites the customer to interact with the product further invests them in your narrative.

While sight might be the first sense used to observe your shop, touch is the most powerful. The element of touch is the reason customers purchase something in a physical location over shopping online, and customers who handle a product are more likely to purchase. However, just as the perfect Japanese garden isn’t complete without a few errant cherry blossoms on the ground, customers shy away from disrupting display that is too sterile.

Here are some tips for creating touch-oriented merchandising:

•  Product packaging matters!

  As you choose product for your shop, keep in mind that ordinary items with excellent packaging will sell exponentially better- and for higher margins- than extraordinary items with poor packaging.

My favorite example in Bourgmont was a product line by the name of Duke Cannon. As a retailer, their most brilliant decision was to print the their primary text horizontally on one side and vertically on the other. This gave me flexibility in my merchandising. Plus, when given as a gift, it was always “right side out” no matter how it was wrapped or opened.

To our customers, Duke Cannon’s engaging copy was peppered with interesting facts (“manufactured in the same factory that supplied the GIs during the Korean War”), subtle irony (“twice the size of feminine bar soaps”) and engaging altruism (profits from the sales support wounded veterans). Nothing was easier than selling Duke Cannon’s bar soaps. Once a customer had their hands on the product, it made it to the register.

• Use texture to invite touch.

  Using texture to compliment and contrast product invites customers to feel the differences. I enjoy using this concept when creating relationships between the display and the product. In Bourgmont, I used an assortment of dried beans to display small products with a hard surface. The smaller size of the bean was proportional to the product, but the contrast of a bean’s natural variation and organic roughness against a metal tin ornament or the sleek quill of a porcupine made the product stand out.

• Use curiosity to invite touch.

  My favorite method of setting this up is by partially obscuring the product with the display itself. For example, one of our best selling products were small specimens from a local taxidermist inside antique glass bottles and vials. These products were pushed slightly down into the display so that about 30% of each piece was obscured. Every customer who who purchased one of these pieces spent time pulling out each bottle, revealing the mystery of each unique item.

• Create the illusion that someone else has already touched the product.

  Again, customers may feel hesitant to touch a display if they feel they are going to “mess it up”.

In Bourgmont, we sold beard oil in three different scents. For display I stacked the multiple types of each scent in orderly rows- much like one would expect to see at a box store. The secret to getting people to pick the product up? Casually skewing just one of the the front bottles. The illusion that another customer had already handled the product gave current visitors permission to do the same. There was even an instance where a particularly tidy customer picked up the bottle to straighten it and ultimately purchased it after being caught by the copy on the label.

Scent, sound, and taste may also play an important role in merchandising the specific products your retail business. These senses are usually engaged by providing samples. If you have a business in which you are providing samples, make sure your methods are simple. Sample product should be easy to access, sanitary, and are not too bulky or messy as to prohibit a customer’s interaction with other product during their visit.

Good Maintenance Practices

As Christmas neared and the end of this tiny retail experiment came to a close, Bourgmont faced a problem. It is the same problem I see many retail spaces face near the end of the holiday season: dwindling inventory. Good merchandising practices allowed us to keep our seasonal shop looking full while product continued to sell out.

An ongoing retail store would have product in back stock- mitigating much of the problem. If you do find yourself in this situation, my best advice is to manage your negative space.

When product sells, make sure you cluster remaining items. Do not spread them out. If needed, fill in negative space with visual non-sale items that make sense within the scope of your brand. In Bourgmont, we used open cigar boxes filled with beans to display small wares. As larger pieces sold, I found more wooden cigar boxes to artfully stack and visually “fill” to avoid negative space.

Compressing remaining product into logical groupings can also be helpful. We started with our Duke Cannon product and our Tradesmen Beard Oils on separate shelves, with scents and product types within those lines being further separated and arranged. As product sold, it became more of a general Beard Oil and Duke Cannon section- merchandising remaining product as a cluster. In the end, they were combined to create an overarching “grooming” area with shave sets and other final shop pieces to fill in.

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If you’ve enjoyed this article on our 230 sq ft retail experiment, make sure you check out the first article on Bourgmont where we break down the numbers for Bourgmont to show how a tiny shop can be turned into a successful part time job. The final piece in this series will cover sales scripts and how I was caught completely off guard by what customers wanted from me in their purchasing experience.

Small & Mighty Retail: A 230 sq ft Shop Experiment

Have you been thinking about setting up shop in 2017? Curating a retail location holds the promise of making a living by sharing your style and helping others find their own.  Before branch out from pop-up shops and you sign a lease on your very own location- stop and consider the mightiness of small.

The schoolhouse gives us constant reminders on the power of space, the joy of experimenting, and that impact and success are not tied to size.  Last year, we began to search for a perfect tenant for our tiniest space inside The Milton Schoolhouse- a 230 sq ft studio that is part of a divided classroom. We felt the space would be great for a start up retail. Its entranced sat at our most highly trafficked area, it had a low rental cost ($200 per month, utilities included), and gorgeous distressed wood floors and abundant natural light.  However, as we searched for a renter, eight potential tenants passed for one reason: It was too small.

Busy holidays aren’t a great time to find a new tenant. So, on November 1st,  we made the decision to throw together a holiday pop-up shop to test the hypothesis of the “too small” argument for ourselves.

This post is part one of a series discussing the financials of the shop, merchandising discoveries, how the small space created powerful connections with customers. Below you’ll find the data from our seven week operation and what financial success you might expect if you choose to create a similar business. 

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Small Space Strategy

After 24 days spread over seven weeks of operation, we sold $2,654 of product in our shop. What sold me on this experiment was it’s near zero-risk. Part of this came from the space’s location inside The Milton Schoolhouse business incubator. Our building, like other brick-and-mortar incubators, focuses on providing low cost rental studios for start ups that include utilities, taking the guesswork out of overhead. Plus, nestling our tiny retail start up among other small businesses gave us the advantage of their network as well. In the end, just $345 was invested in stock to get the shop off of the ground. How?

Using consignment to boost retail stock for no upfront cost is standard practice in the small retail world. Two things made Bourmont’s situation different:

• Limited space meant focused, cohesive curation

• My set up time was crunched! I was asking artists to take a risk by consigning their limited stock during their busiest season of shows and sales- weeks before the holiday season

I knew I needed to provide the artists I wanted with an incentive to take a risk with our untested business. 40% commission is a standard industry rate for galleries and shops who feature handmade works. This would be my advantage: the overhead of this space was as tiny as it’s footprint. By mixing commission-based stock with higher margin items, I could afford to take half of the going commission rate. Of five artists I approached with a 20% commission rate, four enthusiastically agreed.

50% may be a standard markup for retail. However, making that a blanket rule for every product line limits flexibility when creating business strategies. Our highest volume item by both quantity and dollar sales had a 70% margin. Creating a mix of high margin goods allowed me to pay artisans 20% more for commissioned goods. This was good for the artists and the first win for the experiment.

Lesson learned: Industry Standards are good, but your focus should ultimately be on your unique market position. 

Long Term Success

The percentages above look fantastic for the few weeks of data collected; yet the ultimate goal was to prove if a shop this small could be a sustainable and worthwhile part-time gig for a retail oriented entrepreneur.

The labor costs calculated above were for outside labor. I did not pay myself during this experiment, but I paid to have someone watch the shop during 25% of operating hours. For someone considering retail, these numbers are artificially low. Additionally, sustaining a shop beyond the holiday would mean reinvesting 25-40% of profits to acquire new inventory. This would have left $579 to pay myself. I would have made 32% less than minimum wage!

Fortunately, I used Bourgmont as a swanky well-merchandised office in which to conduct operations for our other two businesses- compensating my time through other work. Without this, revenue would have to be increased to make this tiny retail space work.

Pairing your brick-and-mortar with an online platform is a power duo for small retailers. 

Moving stock online is a low cost way to increase revenue and doesn’t have to include building a website. Depending on your market, setting up shop on Etsy, eBay, CafePress, or ArtFire are great ways to reach out to customers. With the right set up, an entrepreneur can maximize their downtime during business hours by photographing, adding, marketing, and shipping goods to their virtual customer base.

I ran a successful Etsy shop that grossed $45,000 between 2010 and 2013. For the projected earning potential of this business, I used an average of first-year sales numbers coupled with the average profit margin of the wares carried by Bourgmont.

If we add in those numbers, our little shop has a conservative potential earning more like this:

These numbers assume the entrepreneur working 75% of the total open retail hours of the shop and hiring out the other 25%. Adding online retail raises the entrepreneur’s take home from under $6/hr to to just under $16/hr before taxes- or earning you about an extra $10,000 per year for an extra <15 hours per week of work.

Not bad- but could it be better?

By adding the element of time, the answer is “yes”.

The graph above is a conservative estimate of what one could with this business model in a similar space during the first year of operation. During my first year on etsy, I sold around $1,200 worth of goods every month. At the height of my Etsy shop, my average was around $3,000 per month. Using the numbers from my second year of online shopkeeping would result in figures like this:

Conservatively, one could anticipate earning around $15,000 per year for that same <15 hrs per week by nature of the growth that naturally occurs with an establishing business. That’s $15-25 per hour.

Committing to anything part-time is no get-rich-quick plan. 

However, not all of us are looking for a traditional 9-5. I consult with potential entrepreneurs all of the time who are looking for a gradual transition from full time employment, who want a part-time source of income because of family commitments, medical limitations, or other lifestyle desires.

If retail is your passion, committing to a small space is a low-stress, low-risk way to add a little extra cash to your pocket.

Does this post have you thinking? Up next, more discoveries on how to make small work: creating a compelling visual story in your space through merchandising- and how I discovered that standard retail sales talk just won’t work in a 230 sq ft space.

The Devil in the Details: Why Strong Branding Works

From Brand to Bustle: A New Course in Maeva’s Community Business Series

I’m thrilled to be compiling my tips and tricks on business branding into a new Community Business Series Course premiering Aug. 21st at Maeva’s Coffee. From Brand to Bustle: Building a Business People Want was inspired by the frequent questions asked in my Business Plan Basics course. This course addresses the biggest area of neglect I have seen while helping dozens of small businesses clients succeed. If you’re ready to hone your business’ identity and craft a dynamic marketing plan to find your best customers, join us! $27 Pre-registration ends this Monday, Aug. 1st, at midnight, $45 before Aug. 19th.

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During a recent meeting, my copy editor made the observation on how all Chinese take out businesses- small town, metropolitan, west coast to east coast- look the same. From the chop stick wrappers, the collection of decorations, signage...even down to the 90’s clip art on the menu. We had a good laugh about there being a mythical warehouse somewhere through which you could order “One Complete Chinese Restaurant” but really, doesn’t every industry have its share of cliche?

For example, how many coffee shop logos have a coffee cup in them? It’s easy for new business owners to rely on long-standing industry standards or to copy someone else when it comes to creating a brand. A business’ brand sends a message to its market, setting expectations on the sort of quality, price, and service they are likely to receive by stepping through its doors. Plugging your name into a Vistaprint template and ordering up 5,000 cheap cards is really the entrepreneur’s version of another cheap Chinese takeout restaurant. Lazy branding tells potential clients to expect average quality at a cheap price point.

On the opposite end of the spectrum, St. Louis’ most respected independent coffee shops- Sump, Blueprint, and Rise to name a few-  all have resisted the temptation to include some version of a little steaming clipart cup in their logo. None of these shops have a name that features the word “coffee” or makes use of cute coffee-related word play. By the name and logo alone, we are setup to expect something original.

With everything demanding your attention as you start or run a business, you may be tempted to put your brand on the backburner. When it comes to reducing risk of failure, your brand is the most important aspect of your business. Here’s why:

Targeted Brands Attract the Best Customers

Choosing to depart from industry norms attracts a different type of customer: one who is willing to pay you what you’re worth (or more) because they anticipate your product or service will match the attention you’ve given to your brand overall. These are customers who don’t lowball you, who aren’t attracted by BOGO sales, and who crave the type of service or product that will inspire them to create loyal relationships with your business.

Honest Brands Build Relationships

With strong branding, growth becomes less about selling and more about building a relationship. Weaker brands have to shout, beg, and undersell themselves to attract attention. Businesses with weak brands attract customers are only interested in what sort of deal they can find.

By creating a brand that draws quality clients, you rely less on “Now 25% OFF!” Facebook Adverts and more on natural, honest relationships. Strong brands know their client base and organically grow a deeper connection with their market. As an entrepreneur with a honest brand, you have freedom to focus on your business without having to run sales that cut into your profit, spend money on wasteful advertising, or beg for attention.

Timeless Brands Create Longevity and Lower Upkeep Costs

Every time another pallet wood bar is installed in the St. Louis area, I die a little inside. If you think that’s harsh, check out this article on Industrial Chic design from NPR.

You cannot build a lasting brand on an existing trend.

It’s ok to be inspired by other amazing brands- but directly copying core elements from industry or current design trends makes your business dull and dated. Fresh or timeless branding interests dedicated clients for the long term and naturally attracts enough attention provide steady growth over several decades. Dropping thousands of dollars to rebrand and remodel every ten years is only something large corporations can afford. As a small business owner, you will find that a brand woven with original fibers will have superior longevity and cost far less to maintain.

A Business You Inspire Inspires You

Building a targeted, honest brand unique to your business will play a critical role in your personal success as a small business owner. Creating a brand you love will motivate you to own it, share it, and to be enthusiastic about your business even during the rough days you’ll face.

Maeva’s Coffee does not embody every element of my own style or personality, but there is an immense pride and happiness from having co-created such a beautiful place. After 2+ years of operation, I still find myself falling in love with her just as I had at the start. That feeling is one that stays with me through unexpected equipment repairs, staff changes, and the hectic pace of a high volume shop. Without that connection to the brand, I would’ve quit many 80 hour-work-weeks ago and would not have made it to the point where she is successful and strong without my constant attention.

If you are starting a business and want to see it making money, or your current business now has become stagnant, you need to take a closer look at the strength of your brand.

The course I will be teaching in late August covers the how-tos of all of the above, plus the logistics of putting it into practice by creating a targeted low-to-no cost marketing plan. It is specifically designed for small business owners and aspiring entrepreneurs, with a class size is limited to 10. Because I adore helping small businesses in my hometown, I always stick around for as long as you want after to discuss the specifics of your situation.  Check out the details here!

The Emotional Cost of a Precarious Economy

In 2014, over 53 million Americans described their employment as freelance- with 38% of these workers being millennials.

In May of 2015, the US Department of Commerce reported the temporary service industry had also reached a record high, with 2.9 million Americans employed as temporary labor or office workers.

Our economy has shifted from a post WW2 system of expansive corporations who “hired to retire”, employing both laborers and white collar workers through their lifetime, to a labor force that will hold dozens of “jobs” throughout their employable years. As the freelance economy grows, its freedom, challenge, and meaningfulness are hailed as the new American dream. Millennials between the ages of 19-33 are particularly quick to accept this new form of project-based employment that offers the freedom of choice and focus around an individual's talents and interests.

Words like “liberated” and “fun-employment” have become the catchphrases for a new generation of self-employed, with discussion beyond this new work way’s positive propaganda still much a social faux paus. Why envy those still stuck in the ice age practices of corporate conglomerates, laboring 40 hours a week under soulless florescent lights in grey cubicles, when one has the opportunity to be their own boss? While we praise the new wave of independence in the American economy, there is a dark underbelly that I fear will lead to an increase of mental and social health issues and a decrease in overall civil stability if left unaddressed.

This new economy has been labeled as the “precarious economy” by those studying our employment shift. In a recent discussion with Dr. Charles Heying, Professor of Urban Studies and Planning at Portland University, he noted that a “continuously-employed” labor force is incredibly vulnerable to unfortunate circumstance. With no retirement, no benefits, no overtime protection, and often meager healthcare, this growing sector of a freelance labor force is susceptible to challenges that threaten the most basic survival needs. In the precarious economy, artisans, entrepreneurs, freelancers, temp and service workers do not have the protections of an industrial society afforded to the labor force throughout most of the 20th century.

Even more frightening, as Maeva’s Coffee continues to become an office and sanctuary for the self-employed in our community, I’ve noticed the societal stigma associated with discussing these negative aspects of our current shift. As discussions are curated to romanticize the lifestyle of the self-employed, my neighbors and friends admit quietly to feeling ever alienated and emotionally exhausted by the stress of uncertainty.

“Our population has been conditioned to believe we are no longer risk averse. We are taught to love challenge and that there is a lot of value to challenge….that may not necessarily be the case.
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— Josh Boykin, Intelligame.us

What could be more rewarding than a career without limit? Freedom is often billed as the biggest gain of being self-employed or employed on a contract basis. Choice is often more burden than reward with the stress of risk not far behind.

While speaking to fellow entrepreneur, friend, and former Maeva’s staff Josh Boykin, who spent several years on-and-off in tech-related contract employment before launching his own business, I was struck by his assessment of challenge. Challenge has always been billed as something we should meet with enthusiasm. In a traditional workplace, challenge may come as welcome temporary climax, ebbing back into a normal pace after a season or business decision has passed.

However, those working on a freelance basis are often faced with multiple stressors with no end to this heightened state of emotion. In a corporate structure, marketing, bookkeeping, client management, staffing, production, and growth are managed by multiple specialists. Not every self-employed entrepreneur or contract worker has the talent to keep up with all of these areas, leading to setbacks causing increased levels of anxiety and depression.

After the deaths of Aaron Swartz (Reddit) and Jody Sherman (Ecomom) in 2013, discussion the emotional cost of entrepreneurship slowly began to surface. The assumption that those who are brave enough to set out on their own also have the fortitude to “shake off” setback without experiencing lasting pain is prevalent in an economy which glamorizes those who push beyond their limits to buck the corporate conglomerate way of life. The stigma of anxiety and depression often prevents contract workers and the self-employed from seeking external help, wherein problems are compounded by a snowballing effect of lowered physical care, poor sleep, and self-medication through alcohol or drug abuse.

As freelance work gains momentum and those who partake become a larger share of the electorate, the issue has become a platform of political debate. Democratic presidential candidate Hillary Clinton criticized the growing freelance economy’s inattention to labor rights, vowing to “crack down on bosses that exploit employees by misclassifying them as contractors.”, using recent litigation against companies such as Uber and Lyft examples of how traditional democratic party principles concerning the labor market are relevant in this growing issue. Meanwhile, republican candidates continue to hail the emerging “gig” economy as a the new frontier for American innovation. To those ground-floor participants of the precarious economy these debates fail to convey the urgency of our situation and lack actionable solution to the immediate the difficulties we face.

Sara Horowitz called out in a The New York Times article last Labor Day for a reassessment of our current labor benefits. While waiting for the political world to catch up to this modern movement, she suggested the creation of a ‘portable benefits program’ administered by modernized unions and other community organizations that would collect payments and distribute benefits to freelance labor as needs occur. I believe the volatility of the freelance labor force may lead to the creation of an entirely new industry- manifesting an opportunity to create a business or a business service that acts as part safety net, part insurance, and part emotional support covering the most basic needs for our lives as we depart from the protections afforded to us in a dying era of corporate employment.

Driving such a solution is the candid discussion of stress, anxiety, and the challenges we face as freelance laborers, artists, entrepreneurs, and small business owners.

The life of a laborer in the precarious economy is just that- precarious. It is difficult to heal from the wounds of failure or rebound from the scares of insecurity, especially without the traditional safety nets of unemployment or workman’s comp. Residual stress and anxiety from difficult times build up over the course of our career, making us hypersensitive to potentially stressful projects or business moves and incrementally stunting our ability to succeed.

While the greatest protection we can give ourselves as freelance laborers is the ability to set realistic goals and create our own financial safety net, sometimes our starting point must be even more humble.

We must remember that our self-worth is not our net worth.  

As coveted as our freedom-driven work-and-play lifestyle might be, we must allow ourselves the time to sleep, to enjoy good food, to engage in companionship, and to cultivate human interests and curiosities beyond what our employment can grant.

Resources:

Brent Cebul,  “Liberated as Hell: The Autonomous Worker and the Hollowed Workplace” The Hedgehog Review, Spring 2016

Jessica R. Nicholson, “Temporary Help in the US Labor Market,” (ESA Issue Brief No. 03-15) July 1, 2015, US Department of Commerce, Economics and Statistics Administration; http://www.esa.doc.gov/sites/default/files/temporary-help-workers-in-the-us-labor-market.pdf

Louis Hyman, “Temps, Consultants, and the Rise of the Precarious Economy”, The Hedgehog Review, Spring 2016

http://www.inc.com/magazine/201309/jessica-bruder/psychological-price-of-entrepreneurship.html

http://www.cnbc.com/2015/07/13/in-economic-address-hillary-clinton-calls-out-gig-economy.html

http://www.cnbc.com/2016/04/22/the-politics-of-the-gig-economy.html

http://www.nytimes.com/2015/09/07/opinion/help-for-the-way-we-work-now.html?_r=0

Neighborhood Wealth Beyond Capital

Alton Main Street recently hosted a networking event for creative entrepreneurs in the area. The event providing an exhilarating look into the hearts and minds of our community on the topics of growth and revitalization in our area. While connecting with local entrepreneurs, self-employed artisans, and part-time small business warriors the theme of financial hurdles was prevalent throughout the evening. Growth, it was stated, was often slowed or stalled due to lack of capital.  While banks, crowd funding, and donor/investor support were offered as solutions, even if those solutions are able to be obtained often they take a large investment of time before funds become available. This post will show you the basics of how you can build your business and add to your brand using low or no-capital wealth you already have.

Our definition of ‘wealth’ often misleads us into believing we only deal in numbers relating to monetary gains and losses. However, when we start to think of ‘wealth’ as any soluble resource, you will find that your wealth and the wealth of your venture is more than the sum of your debts and assets in the bank. Your wealth includes your skills, your knowledge, your goods, your time, and your character. Our personal economies are rich in raw material- and the moment we set out to use these materials, turning them into financial capital or other goods, services, or skills- we become entrepreneurs with deep roots in our community economy.

You- as an artist or small business owner- have at your disposal, right now, a dynamic “account” of non-capital based wealth you can use to augment your business. With a little ingenuity, you may find yourself using your raw resources well enough that your business will grow organically without the capital fertilization of that bank loan.

Step One: What do you want?

Think beyond financial capital to your actual end-goal. Typically, you’d be using extra cash to accentuate your business in some way. This could be hiring a designer to create a solid branding image, creating or revamping a website, upgrading your equipment, making a change to your product packaging, or hiring a someone to help lighten your workload.  

After making a list of the areas you’d like to expand or improve upon in your business, you’ll have a direction to work towards in your exchange of wealth.

Step Two: What do you have?

Non-financial assets. Do you own or rent a space? If that space isn’t used 24/7, a little out-of-the-box thinking might reveal opportunities to exchange your non-use times to other entrepreneurs and artisans. Space might include not just the inside of your establishment but your parking lot, lawn, or patio. Do you provide a service? That service can be exchanged for other services you might not otherwise be able to afford. Make a list that includes physical assets (space, waste supplies, materials), intellectual assets (industry know-how, event or cross branding ideas), and skills (physical labor or your services). Now you have a clear vision of what you can offer.

Step Three: Create Wealth.

Having a list on paper or in the back of your head will make it easier to find opportunities in your day-to-day business transactions to create wealth. Remember that your clients or customers are just as valuable in the creation of the community economy as other artisans or small business owners. When ‘wealth’ is exchanged locally, every avenue creates a stronger community microeconomy.

Here is an illustration of a multi-level wealth exchange that has been taking place at The Milton Schoolhouse in the last few months***:

As for our involvement, you can see that we’ve exchanged space (in the form of the community garden facilitated by our awesome neighbor Clifford Clark and student Dana Wynn) and about 10-20 gallons of waste coffee grounds from Maeva’s. In the short term, neither of these will produce any capital for either The Milton Schoolhouse or Maeva’s but neither of these resources are costing us any capital either. By trading coffee grounds to Senior Services Plus, we’re investing in the production of worms and compost our neighbors will need for the community garden in our back lot. The better the community garden is, the more produce it will be able to provide for our neighborhood and for Maeva’s Coffee to sell, fresh and delicious, in the form of our seasonally crafted quiche. Working with Senior Services Plus and our neighbors on the community garden strengthens the bond between us and the folks they are able to reach; thus allowing us to introduce more potential coffee lovers to our little schoolhouse coffee shop.

Raw non-capital wealth, when exchanged, creates trust and support among existing neighborhood businesses, artisans, and residents. Strong community bonds encourage the creation of new ventures and the expansion of current participants, growing our community’s micro-economy without financial debt.

Momentum is building in Alton for the creation of good venues of exchange- Farmer’s Markets, Garage Sales, the Holiday Bazaar at the local high school… Challenge yourself to think beyond “shopping local” and into “exchanging local”. Money may be a part of creating wealth, but it doesn't have to 100% of the transaction. Goods, space, skills, and services can all be turned into financial capital as well as other goods, skills, etc. that will enrich your venture.

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This coming Tuesday, Maeva’s Coffee will be hosting Market! Market!, an experimental community market. This event will be an uncurated exchange of wealth. If you’re an artist, crafter, lover of antiques, gardener, stuff seller, vintage lover, or have a service to exchange, you are welcome to join us on Tuesday 17th. For $10, we will set out a table and give you our space and wifi to sell your art, wares, produce, services, or stuff. Or, simply join us by walking around and exchanging your money, skills, or services with your friends and neighbors.

For more information and to reserve a table at Market! Market! click here. 

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***Please remember that most barter is taxable and should be reported in your financials. Make sure you check the state and city laws in your area to determine whether the exchanges you make in your business practices are subject to taxation. Plus, in bartering with nonprofits, your exchange can often be written off as a donation to offset profit- bonus! Talk to your accountant or legal advisor for more information regarding your specific arrangements.

Glass Slippers and Ceilings

The Atlantic posted an article last April about the rise in entrepreneurship among women- with women business owners far outpacing the growth of other ownership types in the small business world. The article notes the disparity in revenue between organizations owned by female entrepreneurs compared to their male counterparts, echoing the wage gap of the corporate world we’ve been familiar with for over a decade. With women’s interests being on the forefront of the news, emphasized by dynamics particular to this upcoming presidential election, articles highlighting all-too familiar challenges of being a woman in business are becoming ever more frequent.

Like the changes to our domestic labor market during the labor shortages of WW2, we are experiencing a second wave of Rosie the Riveter. Except, instead of donning a handkerchief and punching a timecard in a factory, women are pushing out at the ground level to directly cause economic growth through the starting of small businesses.

In Maeva’s, I’ve witnessed this change locally. I’ve met several high school girls who have turned to their own creativity as an alternative to traditional employment. Impressively, they’ve taken to crafting soaps, stickers, and jewelry. Some of whom, such as Anna Dixon or Sarah Minier, we’ve supported by providing an occasional outlet for their wares. Female college graduates sip black coffee while creating freelance career paths in the wake of an economy that caused corporate options to shrink. Dozens of female entrepreneurs in their late 20s to 30s, who began their self-supplied career when unemployment struck their family’s primary breadwinner in our most recent recession, use Maeva’s as a place to meet with clients in lieu of burdening themselves with the overhead cost of a physical storefront or office.

In spite of the undeniable barriers women face, such as finding funding for their businesses, navigating local bureaucracy, and overall revenue discrepancies in their respective industries, women owned businesses are growing with unstoppable momentum.

“While women continue to work for progress toward being true equals, we also have to play the hand that we've been dealt and get things done in the short-term.” Sara McGibany, Alton IL

The challenges of creating and operating a small business are incredible. Being a woman in business further compounds the stress. In my own work, examples abound- ranging from subcontractors who have asked to speak “to the man of the house” on arrival to an alderman who told me the “men around here will take care of these things”  after I first spoke in front of the city council. These instances are startling but have been few in comparison to peers and mentors who have been navigating these waters for the last few decades. In truth, day to day, I don’t think of myself as a woman entrepreneur but as another human entrepreneur. I’ve never felt pause in making any bold decision to create, to produce, or to grow a business on the basis of my sex.

Likewise, I don’t know a successful woman in business whose sex is on the forefront of their agenda. Female entrepreneurs are doing things because things need to be done- not out of some feminist assault on the norm. In a sea of media profiting from incendiary patriarchal sexism and explosive feminist backlash, the motive of the female entrepreneur is often misrepresented.

Local leader and community catalyst Sara McGibany is one of those dynamic women I have looked to for inspiration during the last several years of progress at The Milton Schoolhouse. She has thrown herself into one Herculean task after another- creating community change by starting, organizing, and supporting nonprofits in the riverbend area. If trying to create change with a sustainable economic plan wasn’t difficult enough, she does it with volunteer effort and, yes, she is a woman. Sara has been responsible for turning our once unimpressive local farmer’s market into a dynamic downtown attraction, the catalyst behind a crowdfunded local grocery store, and is tirelessly pushing behind-the-scenes of Alton Mainstreet for a small business and artist-driven revitalization of Alton’s downtown district.

When asked about how being female affects her work, Sara echoed the experiences of myself and so many of my colleagues. It’s a reality: the web of government, business, and social networks to be navigated when creating movement of significance are predominantly male and often unfriendly towards female involvement. These barriers are not impenetrable- and women like Sara continue to show us this by their own continual action. Where the world would rather divide us into pro-this and con-that, strong female leaders continue to answer the imperative for community and economic change by choosing to find away around the present barriers to achieve their goals.

I increasingly find myself surrounded by phenomenal women leaders. Many far surpass men of similar qualifications in their respective industry in terms of tenacity, creative problem solving, and market intuition. It is possible these glass ceilings that have slowed the progress of female equality has resulted in a stronger, more adaptive force of entrepreneurs and community leaders?

“They’ve tried to use intimidation- but it’s lost on me. Demand respect.” Lynne McDaniel, Chicago, IL

Lynne McDaniel is an entrepreneur who reaches beyond the realm of her own gorgeous vintage furniture shop to build a network of success in her Chicago neighborhood. Her involvement in the W.o.W. (West of Western) District of Chicago has not only been an inspiration, but a model for my own approach to encouraging entrepreneurs in the Alton community. Lynne has been an entrepreneur for over two decades and her immeasurably valuable advice has made her the go-to guru for entrepreneurs everywhere.

Lynne made the commitment to actively surround her business with other extraordinary businesses by, in her words, “handpicking gladiators” for her neighborhood. She attracts and aids entrepreneurs as they take the leap by helping them overcome their fears, negotiate leases, and fostering a local support network among owners. When asked whether being a female entrepreneur lent her advantages in her work, she responded that a significant component to her success- creating, molding, and maintaining relationships- was due to her natural transparency. “It’s more difficult for men, I think, to be completely transparent. They have their own expectations. Showing people your heart and being welcoming creates unbreakable relationships with customers and in your network.”

Lynne described herself as a “sweetheart- but an alpha dog in business”- a thin line that may be the crux of this incredible rising tide of business women. The ability to aggressively tackle financial, legal, and logistical decisions with the added element of matriarchal respect and care is a dynamite recipe for success in post-Fordist economies increasingly driven by relationship-centered business practices.

In respect to fostering growth in the microclimate of Alton, women are an underutilized resource. Our town could see dynamic benefits, economically and socially, of the rise of female leaders in for-profit and non-profit business. What is keeping more women from taking the entrepreneurial plunge in Alton and how can we create an environment more conducive to success of these businesses?

This is a challenge that cannot be solved with a single solution. As an issue that warrants ongoing and inclusive community discussion, it is one we will need to approach together with mutual respect and openness. I have further ideas on how Alton could be created into a dynamic artisan-driven economy that thrives from the increase in and unique value of minority owned businesses, but those will need to wait for another day.

In the meantime, what actionable solutions would you suggest?

Working Yourself Out of Your Business

When we dream of beginning our own business, we envision the freedom of having creative control over our lives. We imagine working on our terms, spending days doing what we love and working for our dream rather than someone else’s. We get excited about the beginning and look forward to its success, imagining the years ahead in which we will be happily making a living doing something we love.

Thinking about retirement or selling a business at the start sounds terribly unromantic. However, when we plan for the eventual transition of ownership a business will undergo from the beginning, we create a business with a strong investment value and a structure that will live beyond its creator. This article is not about crafting an exit strategy, but implementing a framework that will allow a business to become a legacy.

Unlike most coffee house owners, it has never been my ambition to own a coffee shop. Our patrons often ask why we have built Maeva’s and I know they are looking for that beautiful story in which a life-long dream has blossomed into success. The reality is I knew nothing about coffee when we decided to undertake this venture. My passions do not lie in owning or operating food service businesses like the grand restaurateurs that dazzle me in every city I visit. We built Maeva’s because it was a sound investment; because The Milton Schoolhouse needed a business with heavy foot traffic to support our other start ups and our neighborhood needed a gathering place to grow.

As Maeva’s continues to blossom, I already look forward to new ventures beyond this beautiful shop. From the beginning, my business partner and I have had a plan to transition Maeva’s to a new owner (or to a full time operations manager) within five years- allowing us the time to dedicate to new ventures in our community. Whether you are hoping to start and sell your business quickly or wish to be involved for decades, one of the greatest things you can do to ensure the longevity of your work is to make your operation attractive to its next owner and do everything you can to enable their success.

Paperwork

This is an essential part of creating a seamless transition to an Operations Manager or new owner. When someone buys a franchise, they are given months of training and hundreds of pages of information outlining everything from sales techniques to pricing strategies to safety processes. If you’ve built your business from scratch, you know the ins and outs of how you make decisions for your company- but does anyone else? The pieces listed below are essential for not only selling your business but peace of mind if you were ever to face a crisis in which you were required to be on hiatus from its operation:

Employee Handbook:

This is a personal manual outlining the expectations and general rules of conduct for staff. Each staff member should be briefed on this manual and sign a written statement of their understanding. This manual should cover your company’s sexual harassment policy, dress code, any employee benefits, job expectations, and other general conduct policy. Keep signed records of any modifications you make to your manual to show that staff have been briefed on evolving policies. Don’t forget a signed release of name/voice/and likeness if you intend on using photos that include your staff for promotional purposes. If any financials, recipes, trade secrets, etc. are available to your staff, a signed statement of confidentiality should also be included.

While there is no law regulating the requirement of an employee handbook, having a clear handbook of policies can provide some legal protection in unemployment and workman’s comp cases.

Most corporate handbooks are available online. Instead of starting from scratch, find handbooks from companies in similar industries to your own and use them as a template for your business’ handbook.

Process Manual:

This manual should be essential information available to staff and managers. It’s exactly what the name implies; a detailed outline for every possible thing someone may have to do in the general care and maintenance of the shop. The Maeva’s Coffee Process Manual includes stated methods for sanitizing the ice bin, how often food is ordered and in what quantity, technical manuals for trouble shooting our equipment, maps for emergency water/electrical shut offs, and basic shop troubleshooting. Include MSDS sheets for any chemicals used in your operation and the appropriate response for potential accidents. Check this link if you are unsure whether or not your chemicals require MSDS sheets to be made readily available to your staff.

Operations Manual:

This manual is private information, reserved for an operations manager or owner. It should include account information for each of your suppliers, up to date material cost sheets, contacts for subcontractors or people you often work with in your local business network, hiring and termination guidelines, information on scheduling and payroll, as well as contracts and outstanding leases. This manual may also include trade secrets such as exclusive food and beverage recipes.

Brand Management Manual:

This manual may be reserved for an operations manager or released to the entire staff depending upon the openness of your business structure. It should be a brief description of your company’s history and influences, the core principles of what you represent, and guidelines for how that brand is kept fresh. Our brand management manual outlines how often and when seasonal specials are released, how often and what types of events are hosted in the shop, and information on how and what to post on our Facebook, Instagram, and Website.

You should also have your tax records, annual P&L and Balance Sheets, any past or current business plans, and staff files in order as well.

Having a Strong Internal Culture

Creating a culture of internal collaboration will keep your business from becoming stale. When you hire staff who work together and cultivate an environment that encourages communication, new ideas and better processes will become a constant in your business. Staff you are able to trust and who can facilitate projects without constant management are a valuable resource when a business undergoes a change of ownership. A strong culture can easy the rockiness of leadership change and prevent your company’s growth from stalling. Whether your business is six months or sixteen years old, vivacity, clarity, and strength in a business’ culture will make your business attractive to prospective buyers and increase the chance of its survival once you are gone.

Becoming Unnecessary

The start-up phase is thrilling. As an owner, you have your hands in everything. You and your first few staff wear a thousand hats, taking on responsibilities defined by necessity and circumstance, not necessarily skill. There will be a point in your company’s growth where and honest evaluation will show that you do not have the talent in your current team to grow further. It can be a difficult situation to face but at some point in your wild success you will no longer be able to wear all of the hats.

Accounting is my weakness. It’s taken me twenty months of operation to admit it, but as much as I want to be able to do everything for Maeva’s, the day to day numbers don’t come naturally to me. Accounting is stressful; it’s something I dread. I put it off and cripple my ability to calculate decisions when I can’t readily access current data. This year, I’m resolving to hire a local accountant to handle our books so that I can concentrate on strengthening our business in the ways for which I have a true talent. You can’t be an expert in everything; use your energy to be a better expert in areas in which you naturally excel and hire an expert to take care of your weaknesses.

This stage in your business’ growth may be just as difficult for staff. Bringing in outside help to evolve your business can create friction among veteran staff who may view it as intimidating or insulting to their efforts. Our first autumn of operation, Maeva’s was growing faster than our infrastructure could handle. Our lead barista was appointed as a stop-gap Operations Manager to help manage ordering, scheduling, and shop duties. The position was set out at the start as a temporary one and she disliked the responsibility overall. And yet, when it was time to hire an actual Operations Manager- her feelings were mixed. Going back to her position as lead barista sounded as much a relief as a demotion and our shop dynamic was never the same

Just as an owner should understand if not be able to perform all aspects of a business, there should be an outline, if not a staff member trained, to perform the vital processes the owner oversees. If you intend on selling your business through traditional avenues rather than coaching someone to operate it in your stead, make sure you not only have a process manual in place but have trained your staff in how to take care of each of your responsibilities.

Instilling a Vision Beyond Yourself

The first time a business changes hands it takes an incredible risk in failing due to loss of direction. Great companies are built by great leaders; you’ve worked to instill your passion in your work and your staff. Corporate examples abound- Apple’s struggle with the loss of Steve Jobs or Starbucks bringing back Howard Shultz after the company was on the verge of failure. Small companies face the same challenge.

Create a vision for your company and coach your staff to follow that vision- not you. The vision of your business should be a permanent, core reason for its existence, the foundational value supporting every decision made during its life. Maeva’s vision is to bring quality coffee and revolutionary community to our neighborhood. The strategy for achieving this beyond my time of leading her is highly entrepreneurial; I seek to create a culture of collaborative staff, teach them how to listen to the needs of our community, and give them the confidence and power to make decisions regarding those needs.

Like every small business, Maeva’s Coffee has been a deeply personal venture. More than just time and money, she is a product of the talents and personalities of its owners, staff, and the community she serves. It’s my responsibility and privilege to do everything possible to ensure whomever comes after me steps into a strong culture and every available resource to take her beyond my own abilities. This duty guides my current operating decisions but also insures her financial stability and success- ultimately allowing her to fund the creation of new ventures in our community.