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It must be a Triangle Scheme…

September 13, 2018

Source: One of the most common at-home business opportunities is the direct sales network marketing of products and services offered by a parent organization. Many of these network marketing companies utilize a multi-level marketing and compensation structure as their business model. Multi-level marketing has received a bad rap, where advocates and adversaries share their pros and cons about this popular and controversial business model. So what are some of the controversies of the industry?

Chances are, you’ve experienced a friend, family member, or neighbor who approached you with “The opportunity of a life-time” to get in on a business that has unlimited growth. What happens when the commentary sounds so convincing (or you just want to appease your friend), and you agree to view a video or attend a meeting where a presentation related to the product and opportunity are explained? The video, full of luxury lifestyle perks and energized individuals sharing their rags to riches stories, piques your interest and entices your human nature. Before you know it, you agree to get involved and become one of the network marketers for the parent company.

Then reality sets in. Month after month of attending meeting after meeting, with potential prospect after prospect, and you become discouraged and doubtful that the lavish lifestyle advertised could never be yours. You decide not to write one more check for an auto-ship product, marketing materials, or to attend any future events. After investing a few hundred or even a few thousand dollars, and your time, you decide to call it quits after the latest prospect says “no” to the product line or to the business opportunity. Because it did not work out in the time frame of your personal expectation, you think it’s one of those “pyramid schemes.”

After a self-evaluation, you come to your own perceived conclusion that the multi-level marketing opportunity was nothing more than hype. It was the people at the top that were making all the money, and all of the flash and excitement was nothing more than showmanship to steal your hard-earned money, free labor, and network connections. But is this really true about most multi-level marketing business opportunities?

According to Black’s Law Dictionary, the legal definition of a pyramid scheme is a scam which is usually carried out on the general public by making promises of high returns in a short period of time; a system that is based upon paying off the early investors first and the long-term liabilities later on. Similar to a Ponzi scheme, one person recruits another person to “invest” into the scheme, then that new recruit duplicates with new recruits, and so on. Usually, each person pays a fee to join, and the only people to make money are the very first people to get involved. These schemes involve no product ownership, no defined compensation plan, and usually crumble under their own weight.

Many people, when hearing of multi-level marketing opportunities, think of the triangle or pyramid scheme because there is usually an up-front cost or investment for the new recruit. What makes the multi-level marketing business opportunity unlike the pyramid scheme is that the new recruit’s initial membership fee is pledged toward an initial commitment to purchase the parent’s company’s products. At the end of paying the fee, the new recruit has product or service in their hand in exchange for money.

The perception that all multi-level marketing opportunities are pyramid schemes derives from the fact that many multi-level marketing companies focus most of their attention on having new network marketing recruits build out a “downline”, and when you review the downline behavioral organizational chart, they do, in fact, look like a pyramid. What many people don’t know, however, is that a recruit is often not required to build a downline. A recruit can choose to solely focus on product or service sales. Unlike Ponzi or pyramid schemes, whose recruits only hope in making anything is based on the recruitment of new investors, multi-level marketing provides earnings within the compensation plan via product sales commissions.

Another common belief is that only people at the top of the triangle in multi-level marketing make all of the money, leaving those at the bottom nothing for their financial investment, time, or labor. There are two sides to every multi-level marketing company. The executive-administrative side to the company is the parent organization that either developed, manufacturers, and/or distributes the product; and the sales development side to the company, or the multi-level marketing side of the business, promotes both the product lines and the business opportunity. The corporate side can be owned by one founder or by a group of founders; however, this same principle would apply to any large or small business or corporation. And yes, for their hard work and investment, they would gain a return on all of the businesses positive gains.

The compensation plan written for the multi-level marketing side of the business is usually developed so that every person who enters the business has the same opportunity and the exact same compensation plan afforded to them as everyone else. In most cases, network marketers that have large downlines make more money than those with smaller downline organizations. This has not always been the result of the direct efforts or successes of an individual, but of the efforts and successes made by members in their downline organization.  In order to dispel this issue, many multi-level marketing firms have begun to cap how much benefit a network marketer can receive from their downline and/or cap how many levels deep compensation will be paid on. Within some multi-level marketing organizations, some of the very first network marketers to sign up in the company are now making less money, while others in their downline are earning more.

Many individuals also perceive that the parent company offering the product(s) and business opportunity abuses and uses people without compensating them for their efforts. However, many network marketing companies do have decent compensation plans in place. Network marketers are compensated for product sales, similar to other sales positions in traditional companies, minus receiving a “base salary” while building a customer base. Ultimately, a network marketer is confined to a compensation plan that only pays when sales are made and new distributors are recruited and assisted in reaching sales goals.

The outlook that multi-level marketing businesses do not work is a belief that is not in line with the financial results that have proven themselves over time. In 2015 alone, network marketing business opportunities grossed $36.12 billion dollars in retail sales just in the United States alone.

Multi-level marketing organizations have been viewed as cultish or a form of religion. The industry of multi-level marketing is far from a cult or religion; but, as many small businesses or large corporations do, most of these organizations do possess a strong sense of company culture, which is a reflection of their core beliefs, values, code of ethics, goals, mission, and vision.

If you are still skeptical of multi-level marketing business opportunities, then I encourage you to continue to perform additional research or to stay tuned for my follow-up article, “It’s a Pyramid Scheme.”

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration.

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What is Network Marketing or Direct Selling?

August 21, 2018

Source: One of the most common at-home business opportunities is the direct sales network marketing of products offered by a parent organization. Direct sales or network marketing has received a bad rap in the past, where advocates and adversaries share their pros and cons about this business model. We take a look at what networking marketing and direct selling opportunities are.

Network marketing/direct selling companies offer their products and/or services by employing a business model that includes a number of independent representatives or marketers who promote the parent company and its product line. The first method in which network marketers earn an income is based on sales commissions for product sales of the affiliated parent company. This applies to both single-level and multi-level marketing business models. Network marketers can then earn additional income from building an “organization” or “downline,” which consists of a network of other individuals they recruit to also sell the parent company’s products, making this the “multi-level” business model.

Multi-level marketing organizations have been pitched under a number of monikers. Some of the most common other names for multi-level marketing are network marketing, direct selling, community marketing, referral marketing, pyramid selling, person-to-person marketing, and relationship marketing. Network marketing or direct selling have been the most common terms dubbed since multi-level marketing has been associated with negative perception of the industry as a whole.

Some of the most successful and longest standing direct selling businesses include Avon, Amway, Primerica, May Kay Cosmetics, Legal Shield, and Shaklee. Within the past 40 years, the number of network marketing companies that offer products and services have exploded to an all-time high. There are well over 50 companies today that dominate the multi-level marketing landscape, and there are no signs of the industry slowing down.

Billions of dollars in product and service sales have been made for these companies as a result of this business model. In 2015, the industry posted $183.7 billion dollars in sales worldwide. Collectively, these companies claim that over $73.4 billion dollars (roughly 40 percent) of gross revenue was paid directly to “distributors,” who are the network marketers themselves. The majority of the industry’s sales were collected in the United States, with 20 to 30 percent of all sales having taken place stateside. The industry also did well in China, which is the industry’s second largest market, followed by South Korea, Germany and Japan.

So what makes the industry so attractive? Career marketers will tout there are multiple benefits to becoming involved in network marketing organizations. Network marketers claim the main reason for their decision to join network marketing is because of its unique business model and the flexibility the industry offers.

Network marketers can earn unlimited commissions with most multi-level marketing companies, as well as paid performance bonuses when sales goals are met. They are also paid a percentage on sales from their downline. A common claim of advantage in network marketing is the sense of owning a business without the hassle of a brick and mortar location, so very little financial investment is required in comparison to the capital necessary to start-up a traditional retail or service oriented business. Network marketers have the flexibility to create their own schedule, and are not limited to any one geographic location.

Other terms coined for the sales force of independent sales people who make up a direct selling organization include: distributors, marketing consultants, promoters, representatives, independent business owners, independent contractors, marketing directors, and relationship coordinators. Some of these terms have been viewed by former network marketers as misleading, because the network marketer does not directly own part of the parent company; and many of the network marketers do not operate their venture in an official business structure (such as a corporation or limited liability company). Instead, network marketers are encouraged to register a business name and obtain a tax identification number, so the parent multi-level marketing company can pay a business entity versus paying an individual. This is where the phrase “getting into the business” was developed.

Traditionally, network marketers would introduce the parent company’s products and/or services to potential consumers directly by word of mouth advertising. Some of the most popular forms of this word of mouth advertising would come in the form of “home parties,” where the network marketer would set an appointment to host a home party (or have a family member, friend or acquaintance host the party for product discounts or gifts), and invite guests to attend the party. At the home party, family and friends would gather to share in refreshments and would view the presentation made by the network marketer, who would also showcase the parent company’s product lines and take orders from the invited guests that attended. Once the product orders were available, the network marketer would deliver the products to their customers.

With the coming of the information age, the digital age, and the age of mobile devices, network marketing has become far more complex, with a host of new direct marketing tools and techniques. Individuals can now sell products and recruit members for their downline from anywhere in the world that the parent company is set up to do business with. Social media have given rise to the growing number of network marketers, where one may expect to see the latest pitch in their news feed or receive a private message from someone who is trying to share the multi-level product line or opportunity that they have chosen to partner with.

Just as the methods in reaching potential customers and recruits have advanced, so have the systems used by both single-level and multi-level marketing business models. Most of these companies now offer direct ship programs for their products, so the network marketer no longer has to hand deliver personal orders to customers. Multi-level marketing companies have also integrated back offices, online dashboards and apps, allowing for the network marketer to go paperless while managing their organization or downline. They have also made many of their tools available online to their network marketers, eliminating the need to purchase clunky marketing kits for personal use. They have become more transparent in recent years, providing financial reports, sales commission reports, and earnings in real-time for network marketers to review.

Even with the advancements in technology, marketing tools, training, and the many success stories throughout the network marketing industry, the multi-level marketing industry and business model is still viewed negatively by many. Some claim that network marketing companies are nothing more than pyramid schemes that prey on people who are hopeful and looking for a remedy for their financial duress or other personal challenges. It is important to note, however, that some of the most successful multi-level marketing companies are also those that have come under the most criticism.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration.

As Seen on TV

August 7, 2018

Just when you thought the deal could not get any better, just wait, there’s more . . . call now and your order will be doubled . . .  In “As seen on TV,” we review some of the most successful infomercial campaigns and why they did so well.

We have all experienced at some point in our lives, while flipping through the television channels, that moment when we came across a presentation of the latest and greatest widget, gadget or contraption, with a deal we just could not pass up. From products like OxiClean and the George Forman Grill, to exercise equipment and other inventions that seemed like no one would ever buy, infomercials have catapulted sales and brand recognition for a number of inventors and marketers, resulting in millions of dollars in returns on their ideas and inventions.

Not all infomercials or products reach the success of the Thigh Master or the Snuggly, however each product that is pitched on television infomercials has a life cycle that assures the product continues to get exposure. As of recently, specialty retailer stores have sprung up to showcase product offerings once seen on television. Walmart and Target have even dedicated shelf space to offer products that were once pitched on infomercials, offering a second chance to connect with consumer audiences.

Some of the most successful infomercial products include the exercise device called the Thigh Master. The Thigh Master was a simple contraption made up of two metal loops joined by a spring mechanism in the middle that was designed to assist consumers in toning legs, hips, and their waists. The pitch was that a consumer could operate the Thigh Master while attending to other activities such as reading, watching television (other infomercials), or just about any other activity that did not require the use of one’s legs at the time of using the Thigh Master. Thigh Master achieved huge success in sales, grossing over $100 million. The Thigh Master incorporated the celebrity endorsement of television personality Suzanne Somers to help pitch the device to would-be consumers.

Another well-known infomercial product that has transitioned to shelf space at your local retailer is OxiClean. OxiClean was pitched by Billy Mays, who would claim, “I’m not yelling, I’m projecting,” as he would hook viewers to stay tuned with the line, “but wait, there’s more.” Billy Mays’ unique, raspy voice and the multitude of scenarios presented on how OxiClean would solve every cleaning situation as the latest miracle for your household grabbed consumers to gross over $500 million dollars in sales to date. Part of the success of OxiClean is its transition from infomercial to its placement on shelves at selected retailers.

“Set it and forget it,” was the tag line for the device that would promise steamed vegetables piping hot; meats cooked to be tender and succulent. The Ronco Rotisserie Oven, also known as the Showtime Pro, steamrolled its way to the top by having the inventor and marketer Ron Popeil invite celebrity guests to accompany him in infomercial sessions. The Showtime Rotisserie raked in over $1.2 billion dollars for Popeil, putting Ronco at the top of infomercial success. The oven is still available today, and continues to be sold on television, Amazon, and in selected retailer outlets.

Richard Simmons not only had you Sweatin’ to the Oldies and managing your meals; he had consumers dole out over $200 million dollars for his fitness programs, making Simmons one of the wealthiest fitness gurus ever. Sweatin’ to the Oldies was a series of exercise regimens coupled with music to entice baby boomers to want to engage into a healthier life. Over 20 million of these programs were sold. Simmons targeted the “regular” person as part of his campaign, which attracted tens of millions of out-of-shape people who might have never taken the time out to visit a gym or hire a personal trainer. The business plan worked, branding Simmon’s as a fitness expert and television personality for life.

Then there was the blanket you could wear called the Snuggie. If you doubt anyone would spend their money on this product, you are highly mistaken. Tens of millions of Snuggies have been sold. In essence, this body-length blanket with sleeves was advertised that it could be worn by anyone, anywhere, anytime, and even boasted that it would bring people closer together if they all had a Snuggie. Sadly, it did the opposite, as the Snuggie was designed for a single person to use at a time. The Snuggie would rake in over $400 million dollars can still be found in selected retailers, on the internet, and on the infomercial, which still airs from time to time.

The infomercial product industry is a multi-billion dollar per year industry, and since its inception, the infomercial product world has grossed over $250 billion dollars in sales to date. With the widespread use of additional digital media, television is not the only medium used in pitching a message to would-be consumers. Digital social media platforms allow for a plethora of video content to be made readily available and stream to almost any mobile device, bypassing the conventional television set.

It is estimated there are over 500 products that have been initially developed and marketed specifically for infomercials. One of the largest companies in the infomercial product sector is Telebrands, located in Fairfield, New Jersey. Telebrands is responsible for launching over a hundred products alone, and has been doing so since 1983.

Based on these metrics, you wonder why more products don’t go down the infomercial path. Not every product is a good fit. The more technical the product, and the higher the investment a consumer must make, the less advantageous it becomes for the product to be featured on an infomercial. Typically, products marketed on infomercials are similar to the impulse buy at the register of a retailer; where consumers feel comfortable with the risk they are taking. Most infomercials offer a risk-free money back guarantee.

Infomercials have been rumored to get a bad rap. Complaints from consumers include inferior or poor quality in the manufacturing of the product itself, or products that claim they will last a lifetime, but don’t. Some products seem so far-fetched that some people don’t believe they can actually function as advertised. As a result, the Federal Trade Commission has taken aim at infomercial marketers, bringing an average of five cases to court each year.

Some infomercials can be outright comical, as they might pitch a product’s suggested use or durability in situations that a consumer might never intend to use the product. When was the last time you purchased Tupperware to have an elephant stand on it? The next time you mock an infomercial, just remember it’s the inventor and marketing company that is getting the last laugh.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is the author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

 

Waste Not, Want Not

July 30, 2018

More than once, my grandma mentioned that “waste not, want not” phrase. She also frequently reminded us that there are people starving throughout the world, so we’d better appreciate our food by cleaning our plates. Grandma would probably be horrified to learn that today, the United States is one of the worst culprits when it comes to wasting food; food waste is estimated at between 30-40 percent of the food supply. The percentage comes from the United States Department of Agriculture’s (USDA) Economic Research Service of 31 percent food loss at the retail and consumer levels, which corresponded to approximately 133 billion pounds and $161 billion worth of food in 2010 (usda.gov/oce/foodwaste/faqs.htm).

Reading stats like those immediately conjures up news footage of starving children and adults in our own country and globally, as well as all the earth’s resources such as water that’s used to produce food that’s ultimately never consumed. Grandma’s “waste not, want not” words immediately echo in my head, but instead of feeling guilty, let’s look at some solutions to help reduce food waste:

Don’t overbuy: This tip might seem obvious, but it can take real discipline to avoid buying on impulse, or loading up because the item is such a great deal. Be conscious and consider whether you will really use up that 10 pound bag of potatoes that’s on sale; if you waste half the bag, it’s not such a good deal after all. Do you need only one carrot for a recipe? If so, don’t buy a whole bag. Most produce departments offer loose items, so you can buy only what’s needed. Try not to shop when you’re in a hurry, as that can further lead to impulse buys.

Consider what lasts, and what doesn’t: With an abundance of summer fruits in season, it’s easy to want to grab them all, considering that Wisconsin’s summer growing season is so short. But unless you plan to preserve that bushel of peaches, or make lots of pie or freeze that box of beautiful Michigan blueberries, buy small. Blueberries keep better than raspberries, which can go bad in what seems like minutes.  Unless you plan to eat raspberries right away, choose fruit that keeps longer and that you can still enjoy later in the week.

Don’t be afraid of ugly produce: We’re conditioned to think tomatoes have to be perfectly round and red, or that carrots aren’t supposed to have legs, but nature produces lots of shapes and sizes. Some imperfect produce might look weird at a glance, yet these items are still flavorful and safe to consume.

Try “kitchen sink” smoothies, casseroles and quiches: Produce on the verge of going bad can still make tasty additions to dishes and drinks. Slightly mushy fruit can be tossed into smoothies, juices, or mashed, heated and sweetened with a little sugar or honey to make ice cream topping.  Chop that wilted broccoli or spinach to use in a quiche or casserole.

Don’t toss those veggie tops: Did you know that wispy green carrot tops taste remarkably like parsley? I didn’t, until I talked to a chef who tipped me off as to how he uses vegetable tops to jazz up dishes. Instead of lopping off and tossing carrot tops, use them in place of parsley or to flavor soup stock. Beet tops can also be sautéed and seasoned to eat in place of greens.

Compost: Despite our best efforts to reduce food waste, there will still be that occasional tomato that rolls to the back of the refrigerator, or a few potatoes that go bad. If you have the space on your property, start a compost pile. I have a small city yard, so I use a compact rotating compost bin with a latching door. It fits discreetly into the corner of the yard near my garage, and every spring, I have rich, nutritious soil to add to the garden. Not a gardener? Compost anyway, and give the product to your gardener friend or relative, or contact a local composting organization like Kompost Kids (kompostkids.org) or a community garden to see if they can use your food scraps.

Sheila Julson is a freelance writer and regular contributor to Natural Awakenings magazine.

Small Business Ownership vs Entrepreneurship

July 24, 2018

Source: So, which are you – a small business owner or an entrepreneur? We compare the similarities and differences between the two, so you can decide which category you best fit into.

Both the small business owner and the entrepreneur have significant impact on our economic system. They are both creators of opportunity for others, they both offer a product and/or service, and they both contribute to the success of the economy. So how do you know which one you are? There are some stark differences between being a small business owner versus being an entrepreneur; although both add great value to society.

Small business ownership usually means that a person owns a business that is tied to a limited geographic area, whereas an entrepreneur’s value proposition is not limited to any one community or location. Both the small business owner and the entrepreneur offer a product or service that others may need. The size of the audience in which each respective marketer serves is dictated by their reach, location, and vision. Small business owners are usually centered and consider themselves as the local authority for their respective town, city, community, or even county. The entrepreneur knows no boundaries, no boarders, no defined geographical lines, but rather focuses on the demographic of their market reach.

Both the small business owner and the entrepreneur take a risk to start their venture. They are equal in the aspect that they must invest hard financial investment, their time, their skill sets, and sweat equity in order to upstart their enterprise. The difference between small business ownership and entrepreneurship risk is the amount of risk one is willing to take and the scope of risk one is willing to endure. A small business owner’s ability to take risk may be limited to how much capital they have available. They rarely ask for others to invest into their local business. Most small business owners will put their personal assets on the line to drum up the cash needed to start their business. The return on investment and risk is limited to the size of the market in which the small business owner provides their product or services.

The entrepreneur is a larger risk taker, willing to not only put all of their money and time on the line, but he or she also has a business plan that allows for others to take a risk or invest into their idea as the growth plan evolves throughout different phases. The ability to gain a return on investment has far more opportunities because the entrepreneur’s offering is not limited to any one market. The entrepreneur sets higher sales goals, and extends their market reach to higher aspirations, therefore in order to achieve these goals, the entrepreneur needs to put even more at risk. For instance if the entrepreneur visions their product or technology being utilized worldwide, they will need more capital and resources to launch their idea.

The small business owner focuses on a proven business model that they can personalize and put to work. Most small businesses have a standard business model. Say you desire to own an auto parts store, hardware store, or hair salon; these types of businesses have an industry standard business model that fits the geographic locale in which that intended business is to service. A local retail business such as a hardware store or grocery market does not invent anything, they supply a local community with a select array of product offerings which they can purchase from a wholesale supplier. Even the planogram of the retailer’s store location has a standard recipe in line with their industry.

An entrepreneur follows a different path. The entrepreneur has to develop their own road map for taking their invention or idea to market. An entrepreneur may offer a product, technology, or unique service proposition; however, they are usually either the inventor or have a partnership with the inventor to take the product or device to market. This includes all the steps of research, development, manufacturing, distribution and service, while marketing and advertising the value proposition through all of the phases of its entry into the market place.  If the product, technology or service does not yet exist, the entrepreneur must develop the methods and practices for each step in the process of creating, manufacturing and delivering their offering to market. This requires the ability to envision each moving part of the business when there may not be a business model that yet exists.

Even the style of planning and leadership is distinctly different between the small business owner and the entrepreneur. Small business owners plan a day-to-day schedule, a plan that may extend up to months at a time as their business model requires. Most entrepreneurs with a new idea to the market must plan for years ahead, because their market strategies may need far more time to develop. A small business owner may have to micro-manage their business enterprise due to the limited staff their business employs. Entrepreneurs can delegate more tasks from the to-do list to others as their enterprise grows. Entrepreneurs are also involved in more of the technical aspects of their value proposition, where they are part of the product or invention development process.

A study by The Quarterly Journal of Economics revealed that most small business owners are involved in businesses that require manual talents, verses the entrepreneur, whose enterprise is based on high-level cognitive skills and creativity. The study further provides that entrepreneurs are naturally larger risk takers and their offering is not yet common to the market. Most small business owners are either merchants or service providers of specific needs relevant to a geographic market.

What makes the small business owner and the entrepreneur character so unique? They both share passion for their value proposition.  Both types of business leaders feel their product or service offering will be of great benefit to the audience they are serving.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

 

Who are the Voices for Small Business?

July 16, 2018

Source:When the small business owner needs a voice, where do they go? We provide a host of some of the largest organizations that advocate for the small business community.

Small businesses are the lifeblood of the U.S. economy and account for half of the total number of jobs and persons employed. Small businesses account for the majority of local economic engines. When Small businesses need support or a voice to stand up for their concerns, there are a number of organizations they can rely on to advocate on their behalf. Here are a few organizations that have received positive rankings from small business owners:

Association of Washington Business: Since its formation in 1904, Washington’s oldest and largest business association continues to serve as the state’s chamber of commerce as well as the manufacturing and technology association. AWB advocates on behalf of businesses of all sizes and from all industries, working to unify and find solutions to issues facing Washington employers, their employees and communities. AWB is located at: 1414 Cherry St. SE, Olympia, WA 98501, toll-free number: 800-521-9325, e-mail: members@awb.org. Additional information can be found on their website: https://www.awb.org.

Entrepreneurs’ Organization: Founded in 1987, EO is a global business network that enables business owners to learn from each other by providing numerous resources to assist in educating and inspiring personal and professional growth. EO has international locations in Singapore, Belgium, Panama, and Canada, EO’s global headquarters is located at: 500 Montgomery Street, Suite 700, Alexandria, VA 22314, telephone: 1-703-519-6700. Additional information can be found on their website: https://www.eonetwork.org.

Minority Business Development Agency: MBDA is an agency of the U.S. Department of Commerce. Their focus is to assist in the development and growth of minority-owned businesses, utilizing private and public sector programs, policy, and research. Additional information can be found at: https://www.mbda.gov.

National Association for the Self-Employed: Since 1981, NASE has been the nation’s leading resource for entrepreneurs, utilizing publications, media relations and a foundation with which entrepreneurs and their small businesses can benefit from. It is the largest nonprofit, nonpartisan association of its kind in the US. NASE is located in Annapolis Junction, MD 20701-0241, telephone: (US) 1-800-649-6273 and (AK & HI) 1-800-232-6273. Additional information can be found on their website: http://www.nase.org.

National Business Association: The NBA has been working alongside small business owners for 35 years, providing resources and benefits needed for business owners to succeed. The NBA can be reached by telephone: 1-800-456-0440. Additional information can be found on their website: nationalbusiness.org.

National Federation of Independent Businesses: Founded in 1943, the NFIB is the largest small business association in the U.S., working to defend the right of small business owners to own and operate their businesses without undue government interference. NFIB has offices in all 50 state capitals, including Washington, D.C., with its headquarters in Nashville, Tennessee. They can be reached by calling: 1-800-NFIB-NOW, or 615-872-5800. Additional information can be found on their website: www.nfib.com.

National Minority Supplier Development Council: NMSDC is a nonprofit organization that advances business opportunities for certified minority business enterprises and connects them to corporate members, building long-term strategic partnerships which encourage economic commerce between large corporate interests and locally developed small businesses owned by minority men and women. NMSDC also assists minority owned small businesses to obtain their certifications. NMSDC is located at 1359 Broadway, 10thFloor, Suite 1000, NY, NY 10018. You can also call NMSDC at (212)-944-2430 or through the NMSDC website: www.nmsdc.org

National Retail Federation: The NRF is the world’s largest retail trade association, representing retailers from over 45 countries, including the US. Their mission is to use advocacy, communications and education with which to promote the best interests of the retail industry. The NRF is located at 1101 New York Ave. NW, Washington, DC, telephone: 1-800-673-4692, or 1-202-783-7971. Additional information can be found on their website: https://nrf.com.

National Small Business Association: Since 1990, the NSBA, Inc. has provided small business owners, their employees, and retirees access to innovative services, resources, and benefits, such as collegiate scholarship awards to eligible NSBA members and their families. The NSBA is committed to small business advocacy and public awareness. Telephone: 1-888-800-3416, and email: contact@nsba.net. Additional information can be found on their website: http://www.nsba.net.

Owner Operators Independent Drivers Association: Starting in 1973, the international OOIDA represents the interests of independent owner-operators and professional drivers on every issue affecting truckers in all 50 states and Canada. OOIDA seek to ensure that truckers are treated with equality and to ensure highway safety and responsibility among all highway users, as well as improve the business climate for all truck operators. Located at 1 NW OOIDA Drive, Grain Valley, MO 64029; telephone: 1-800-444-5791. Additional information can be found on their website: http://www.ooida.com.

Small Business Administration: Founded on July 30, 1953, the U.S. SBA focuses on four main venues with which it works: assistance to capital, entrepreneurial development, government contracting and advocacy for small business across the United States. The SBA provides millions of loans, loan guarantees, contracts, counseling sessions and various other forms of resource and assistance to small businesses. The SBA has several key locations, with a toll-free number: 1-800-827-5722. Additional information can be found on their website: https://www.sba.gov.

Small Business Association of America: Since 1964, the SBAA has provided insured benefits, discount benefit plans and services to its members, who included small business owners, those self-employed, individuals and families. Monthly dues are required. SBA is a non-profit organization located in Washington DC. Additional information can be found on their website: https://www.sbaamerica.com.

Small Business International: SBI provides guidance and resources when a small business entertains the possibility of connecting with international partners, including matching products and services with over 80,000 other members. Business can find out more information about importing or exporting, trade laws and compliance, and more. Visit Small Business International at www.smallbusinessinternational.com

Small Business Owners & Professionals Association: SBOAPA of Canada is a nonprofit organization founded with the mission to provide small business owners, their employees and retirees access to a wide variety of services, programs, information and benefits, such as sponsorship activities, networking opportunities, scholarships, and advocacy, all to aid in the success of their businesses. Additional information can be found on their website:http://sboapa.org.

United States Association for Small Business & Entrepreneurship:  The USASBE is an organization that seeks to assist the entrepreneurship community through teaching, scholarship, and practice opportunities. The USASBE includes members who are teachers, researchers, program directors and practitioners. Located at: 1214 Hyland Hall, 800 W. Main St., Whitewater, WI 53190, telephone: 262-472-1449. Additional information can be found on their website: http://www.usasbe.org.

U.S. Chamber of Commerce: Founded on April 22, 1912, The U.S. Chamber of Commerce is the world’s largest business organization representing the interests of over 3 million businesses with 3 main areas of focus: advocacy, community, and leadership. Members include mom-and-pop shops, local chambers, large corporations and leading industry associations. The USCC is located at: 1615 H Street, NJ, Washington, DC 20062-2000, telephone: 1-800-638-6582. Additional information can be found on their website: https://www.uschamber.com.

Young Entrepreneurs Council: YEC provides all the tools needed for its members to become successful business entrepreneurs. The YEC staff utilizes their extensive knowledge, networking opportunities, media exposure, and personal branding development to bring their members from novice to polished professional. YEC is located at: 745 Atlantic Avenue, Boston, MA 02110, email: info@yec.co. Additional information can be found at: https://yec.co.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.

 

Effective Crowdfunding Techniques: Part Two

July 9, 2018

Source:When it comes to raising money for your business online, there are several platforms available depending on your business’s value proposition, but getting an audience to review and take action in becoming a donor is the more difficult goal. Here are a few of the most effective techniques that will assist your business with its crowdfunding goals.

Kickstarter, Indiegogo, and GoFundMe are three of the most popular fundraising platforms for pre-launching a unique value proposition online. The most popular campaigns consist of book projects, market disruption technologies, and other products designed to satisfy a need or solve a problem. Hundreds of entrepreneurs have utilized online crowdfunding platforms to get their offering to market. Not every campaign launched is a success. Some of the latest and greatest well-thought out ideas fizzle out due to the lack of integration of methods in promoting the campaign itself and/or lack of audience engagement. Here are a few of the most effective crowdfunding practices that can enable your campaign to be a bigger success:

1). Set reasonable goals. Not every crowdfunding campaign will be able to sell out every perk and end up with millions of dollars at the end. It is better to set reasonable and obtainable financial goals based on your current business audience and following. It is always better to set a lower financial goal, offer many perk packages, and overshoot the expectations. When a goal is considered unrealistic, most campaign contributors will skip over and move onto the next campaign in fear that in the event your campaign does not reach its goals, it will not be in a position to deliver on the perks it offers.

2). Maximize the term of the campaign. Crowdfunding campaigns need plenty of time to be marketed, showcased, and shared with an audience of potential contributors. Setting the length of the term of the campaign to at least 60 days will allow for your campaign to be seen by more people. The longer a campaign is open, the more opportunities you have to update the campaign and adjust posts and project progress with your following audience. As the number of contributors climbs, more people will be open and willing to contribute to the campaign. A campaign that has attracted traffic has more reach and draws even more attention. Allow yourself enough time to work out the formula for success.

3). Don’t be afraid to tell your story. Crowdfunding is an opportunity to share your “why” behind the project and the “what” the value proposition is.  It is wise to share how you came to the idea you did (your motive and intention); and a clear description of the deliverable (the what). Contributors like to feel like they are helping someone out that has lent their struggle to solving a problem with their value proposition. Contributors want to believe in the people behind the perk as much as they desire to believe in the value of the perk itself. It is fine to be passionate – this is where you also get to pitch you.

4). Be clear in describing what is in it for the contributor. Any time a potential consumer contemplates to part with their money, they analyze a series of self-discovery questions. “How will this change my life?” “Do I really need the perk?” “Will this product/book/technology really help people?” “Will they (the campaigner) be able to deliver?” And most of all, “What’s in it for me?”  Ask yourself, if you were the potential contributor, do you really need this in your life? And then ask yourself, if you do purchase the perk, what will the perk really do for you? Your perk packages should be something everyone wants or can appreciate. A true and clear representation of the value of your perk will often determine how much risk a contributor is willing to take. Is it something anyone can get in a local store, or is it unique and limited?

5). Engage the crowd. Crowdfunding was designed to have two functions:

  • To raise money for a cause
  • To collect feedback from potential consumers

The more engaging a campaign with a group of followers is, the higher the probability is that your campaign will have more contributors. Crowdfunding allows for both the inventor/entrepreneur and for the market to have an early conversation about the product offering. This should also give the campaigner valuable data to improve the make and model of their concept when necessary. Don’t be afraid to answer questions, provide test results, and make changes according to the positive feedback you receive. The more information you can share in an open dialog the more willing a contributor will be in supporting your cause.

6). A great marketing strategy drives every well-funded campaign goal. Effective marketing and advertising methods can assure that a larger audience views your campaign. Your marketing strategy should employ a mix of marketing tools, many of which have little or no cost. Make sure the marketing of your crowdfunding campaign includes a mix of social media, blog content, press releases, video content, photo content, search engine optimization, articles, testimonials, endorsements, product/book reviews, back link integration, and some use of traditional advertising. You will need to monitor and update marketing metrics, so you can adjust your marketing mix according to how potential contributors respond to your message.

7). Perform your due diligence. There is nothing new under the sun, and the same goes for crowdfunding. Even if your product is the first of its kind, there may be a similar market solution or competitor in your industry space. Research the “problem” and review the “solutions” other entrepreneurs have offered to the market. Then research how many of those entrepreneurs employed crowdfunding to upstart their enterprise. Chances are that there will be a number of campaigns that were very successful and some campaigns that were utter failures. Make a list of the techniques that were most effective and the mistakes made that caused a campaign to flop. Compare these techniques against the list of practices you desire to employ in sharing your campaign.

8). Have a complete understanding of your potential audience. You must have a clear understanding of the audience you desire to enroll in your campaign. The demographics of the audience and the geographic location of potential campaign contributors can have an effect on whether your campaign is a success or failure. For instance, most digital or complicated electronic devices are more popular with younger generation donors. In contrast, if you have a very traditional product offering, then you need to identify, and target your campaign to, the audience that will have the most interest in your value proposition.

9). Be transparent with how you plan to spend your campaign funds. Campaign contributors want to know if you have a financial plan in place for spending or saving the money in which they have pledged. Most campaigns have best succeeded by using the campaign contributions to fulfill actual product orders. Most campaign contributors want to pre-pay for the unreleased product or book before everyone else in the neighborhood has it. Be prepared to plan to give back all of your campaign contributions in the event you do not meet your goals.

10). Set a reasonable timetable of delivery. Truth is your value proposition should be almost market ready. Crowdfunding should not be the only source for funding your project, nor should your campaign’s success or failure determine if your product is going to ever be manufactured. Set a reasonable delivery date that campaign contributors can expect their perk. In the event your project takes longer than expected, it is important to share with your contributors about the delay and updates of progress until the project orders are fulfilled.

11). Show that you are willing to invest into yourself. Most campaign contributors want to see that the entrepreneur has some of their own risk involved. There are two basic types of investment you are going to be required to make in your own project. The first is monetary. You must have some of your own capital at work. Having the ability to share with potential donors the actual amount of hard cash investment you have at stake before asking for outside financial resources always strikes a positive cord. The other investment you will have to make is sweat equity. Provide detail with contributors how much time you have invested and how much work you have put behind the project. You can share with the audience the functions and tasks you are personally responsible for. It is also good to provide some back story of your experiences and regarding your abilities to deliver upon those said tasks.

Each crowdfunding campaign has its own unique value proposition, and brings with it each entrepreneur’s story. The more thought you invest into each of these areas of your campaign, the greater the probability that a larger audience will take notice and interest in your campaign.

Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who currently lends his expertise as a consultant firm to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is the author of The Race to Protect Our Most Important Natural Resource-Water, and Main Street Survival Guide for Small Businesses.