How To Run a Virtual Business

June 8, 2010 by Leave a Comment

I hate to call our business a virtual one, but that really is what it is. We don’t have a bricks-and-mortar office location (unless the post office counts) besides our home offices. Some clients might consider it unprofessional but by running our business remotely, we are able to operate more efficiently and at a lower cost. We have created systems to allow us to operate our virtual business with the same effectiveness if we had an office full of people.
The Advantages of Operating in a Virtual Business

  • The biggest advantage of running a business is the significant cost savings. Without having to pay tens of thousands per month in rent, we have more flexibility in our cash flow and a much lower overhead costs.
  • We can run the business remotely. We are not tied to a particular location. We can quite literally work from anywhere in the world.
  • No one has to be in the same location. For instance, I study in the US and only come home occasionally but the business still runs smooth! We talk often and e-mail several times a day, but we aren’t forced to be in the same location. We can also hire employees and sub-contractors from different locations.
  • You can live wherever you want. This is similar to the last one but it’s a bit different. When I come back home I do not want to live in Nairobi. If our office was based there, this would not even be an option.

Running our Virtual Business
Creating a virtual business was a necessity based on how we started – part time. If we weren’t working on the business full-time, there was no way that we could have justified creating a bricks-and-mortar office for a business in which we almost never meet our clients. Once we went full-time, there was no need to change what worked. Here are some of the simple steps we took by necessity and now, by choice, to run our “virtual busines”.

  1. Don’t Look like a Virtual Business – A business without an office, doesn’t always inspire the most confidence in potential clients, so make sure that you have all the outward appearance of a professional business. This is pretty easy and usually just means having office phone lines, publicly displayed physical offices (which my actually be your dad’s), normal office hours, etc.
  2. Always Choose Online Software – By necessity, we have always gone with online applications as opposed to desktop applications so that we could access the same information from multiple locations. For example, we are a huge fan of Google Apps over any of the other applications. We are also thinking of going with the online version of Quickbooks over their standard desktop applications. One of the other advantages is that it provides more dependability. Even if a computer crashes, we have nothing to worry about since it’s just a web site away.
  3. Make Sure Your Tools Work Remotely – Similar to the last point but one of the first things that we did when setting up our business was to get a VoIP business line. It’s not that big of a deal now but it was pretty new then. We wanted something that we could operate from anywhere and that was configurable and accessible from the web. We also use tools like eFax so that we can both receive faxes and we have an online version, which is much easier for us to operate with. We also have e-mail accessilbe phones so that we aren’t tied to our computers (which need to be laptops, of course!)
  4. Keep Soft Copies of Everything – Again, by necessity, we have been forced to keep things online instead of printing them out and dealing with them by hand. Instead of filing cabinets, we try to keep everything on an online back-up site.

The Future of Our Remote Business
Someday, we may get a formal office location, and that’s only because it will be more cost advantageous when we bring some of our outsourced work in house. However, that doesn’t mean that we won’t still run a virtual business. Since I’m so lazy, there is no way I will be able to make it into an office everyday or have less than 2 vacations a month. Therefore, we will still need to run everything remotely.

Filed Under: Internet Culture, Make Money, Small Business, Tips Hacking and Reviews Tagged With:

How To Increase Revenue By Decreasing Effort

June 3, 2010 by Leave a Comment

Work?When Sergey Brin and Larry Page founded Google, they created the original search engine based on a research project that they did at Stanford. Once they thought they had a real idea to work with, they rented out the garage of a house to begin their business and to continue working on their search engine. This was all occurring around 1997 and 1998. Google didn’t start making any money until almost 5 years later. However, the Google co-founders spent most of that time working on their business and not programming their search engine.

The lesson with their story is that they realized that they couldn’t continue building their product – they needed to build their business, even if there was no revenue coming in (there were investors to provide them with cash to survive on). If they continued to work IN the business instead of ON the business, the company would not have been the success it is today.

I’m not sure what specific actions they took to build the business but they had to implement systems and processes so that other people could work in the business (building and improving the search engine) while they could grow the business (getting financing, hiring people, creating systems to generate revenue).

As a small business owner, the only way you can have a truly successful business is by stepping outside of your everyday activities and create a self-sufficient business. It might seem like it will cost you more money but in the end, it is the only way to drastically increase your revenues while decreasing the effort you put into the business:

1. Create a Manual
No matter what task you are doing for your business, write down the steps you take in a manual. It might seem like more work without any direct benefit but this step is probably the most important thing you can do for your new business. The next time you do the activity, it makes it that much easier because you just have to follow the steps that you wrote down. It also makes it easy to hand it off to someone else to do in the future.

2. Outsource as much work as Possible
This doesn’t mean that you have to ship your entire business to India. It just means that you have to find someone to do a lot of the tasks that you do yourself. It could be something as simple as distributing marketing materials, doing weekly bookkeeping activities, or providing support to existing customers. It’s very easy to hire a virtual assistant to get stuff done for you.

If you completed Step #1, you just have to hand it over to someone else to complete. It might seem like a waste to pay someone Kshs 5,000/- to do something that is so easy for you to do but imagine if you can spend that saved time on 1 thing that will increase your revenue by Kshs 20,000? You increase your revenues and there is less work that you have to do.

3. Define a Sales Process
If you don’t have a defined sales process and just wing it with every new lead or visitor to your web site or place of business, you are missing out on a significant amount of business. You are reinventing the wheel each time you get a new prospect so you are spending too much effort on that initial sales effort.

It also means that you are not perfecting your sales process so that you can increase the effectiveness of your sales process. By finding a system that works, you can constantly apply that and make changes to increase the effectiveness of it. It also minimizes the human element so that you are not as reliant on a superstar sales person (whether it’s you or someone else). By having a sales process in place, you will increase your conversions and increase your revenues without any additional work on your end. You are just replicating what has already worked.

4. Automate Your Sales and Operational Processes
This draws on much of the first 3 steps. Once you have created a manual and have systems that are beginning to work, you need to work on automating processes as much as possible. If you’re automating your sales process, maybe you send the same basic e-mail to potential leads through an e-mail auto-responder. If you call to set sales appointments with leads, maybe you can hire someone to do that part of the process for you.

As far as automating your operational processes, software is often the best way to do this. See if you can purchase a product that will automate part of your process. It might even be worth it to hire a developer to build a program to help you automate part of your set-up or service delivery process.

5. Act on Regular Tasks Less Frequently
Start setting aside time each day, or week, or month for specific processes. I used to get in the bad habit of working on accounting tasks every day. Not that it’s so bad to stay on top of that stuff, but by focusing my attention on it once per week instead of each day, saved me a tremendous amount of time. I love checking on the status of some of my marketing efforts but I must force myself to wait until my regular time each week so that I’m not repeating the same thing every day.

Increase Your Revenues and Decrease Your Efforts
Creating a new business requires a tremendous amount of upfront time and effort. Successfully growing your business means creating systems and processes so that other people can work in the business while you grow it by working on the business. This is the only way that you can significantly increase the revenue in your business while decreasing your effort. In fact, it’s the only way to really build a business. Otherwise, you’re basically just a one employee company and you will never get much bigger than that.

Photo courtesy of eneas.

Filed Under: Make Money, Small Business Tagged With:

Why It’s Better to Make Money “Offline” than “Online”

May 31, 2010 by 1 Comment

There’s a lot of friends and fellow Kenyans who are looking to make money online. Is it possible? YES! But you need to get into it knowing full well what you’re going in for. Hence this article.

There are ton of great websites, blogs, and programs out in the Internet about how to “Make Money Online“. Many of them have great ideas, and I read some of the better ones on a regular basis. While there are many different variations on this, there are basically 3 different ways to make money online:

  1. Content Sites – Having good content and a lot of visitors and then selling advertising on the site. This is the reason for 90% of the blogs out there (my own guess)
  2. Affiliate Sites – Sites set up specifically to refer visitors to purchase products sold by other people/companies, in which the referrer gets a percentage of the sale.
  3. eCommerce Sites – Sells niche products and often through drop-shipping. This way, the operators don’t have to handle any inventory.

If it Looks Too Easy, It Probably Is
The problem with these methods isn’t that they are bad ideas. The early adopters for most of these methods made (and continue to make) a decent amount of money because they were there first. The problem is that they are TOO easy to implement and get started. In economic terms, the barriers to entry are extremely low, and there becomes a flood of “entrepreneurs” who are looking for a quick buck.

When looking at new ideas or tools, one of the first things I take notice of is how easy it is to implement. If anyone can do it in almost no time, then it’s not worth doing. For example, there are tools that allow you to create niche websites based on a list of keywords that you have. It can literally create thousands of sites/landing pages for you. The problem with a tool like this is that if you can easily use it and implement it, then so can thousands of other people – thereby eroding any possible value in the tool. (Not to mention the fact that this “spamming” will quickly be a “no-no” in the eyes of Google and if it’s not already detected and blacklisted, it soon will be).

Defensible Position
The problem with tools like I just described is that you have almost no “defensible position”. What I mean by defensible position is something that others cannot easily copy. If someone else can easily (and cheaply) buy the tool I described above, you have virtually no defensible position. Google or Amazon are examples of companies with extremely strong defensible positions. While they compete against the likes of Yahoo and Buy.com respectively, it would be next to impossible for all but a few people in the world to create something to compete against them. And to do that would require an incredible amount of resources of time.

The Advantages of the “Offline” World
When I refer to the “Offline” world, I use the term pretty loosely. I’m really referring to any type of company that isn’t making money via the “Online” methods I listed above. Often times, these are more traditional companies with more traditional structures. For example, Salesforce.com is totally web-based but I consider that an “offline” company and the same goes for small software companies that sell some sort of product or service on the web. Or you could just sell something old economy – like paper.

1. You Have a Defensible Position – Usually this is some sort of product or service that someone cannot create by spending 3 hours on a Saturday to set-up. This doesn’t mean that there are no competitors but it also means that hundreds of people can’t start up a web-site just to test the waters.
2. You Have Real Clients – With online marketing, you do have “clients” but they are very fluid. You can use methods to get them to your site quickly and easily but there is no strong relationship formed there. Real Clients are those who chose your product or service for a reason and you have established your “brand” with them. They may recommend you to other customers or hopefully are repeat customers.
3. You Aren’t at the Mercy of Others – Every business should have an exit plan. That exit plan might be to use the business as a cash generator for years or to sell it once it reaches a certain income level. If the business is at the mercy of suppliers, which is really the case of all the ways to Make Money “Online”, whether it’s supplier of the products you sell or the supplier of the traffic and ads for your content site, then any future is very uncertain. But if you have a regular business that cannot be easily disrupted, it is much more valuable and more likely to be viable in the future. It is a much more valuable business.
4. You Can Make More Money – This one can vary a bit based on what you’re trying to sell. I know a lot of Internet Marketers who make a ton of money selling products and services offline and probably more than if they sold it as an offline product. The reason I say this one is that an online world, the easy of entry invites more participants, and with more participants, it in essence becomes a commodity product, and with a commodity product, it just becomes a race to the bottom (look at web hosting since that is so easy to become a reseller).

Will I Still Continue to Make Money Online…. Of Course!
Our main business and main ‘strategy’ of making money online in Kenya is to use the internet to drive up sales…in the offline world. This article describes it somewhat. It is sort of an online-offline hybrid of a business and we are always continuing to make it more “online” because we believe that if you can build an online business with a real defensible position, you’ve hit the jackpot!

But will I base my livelihood around a single content site or some affiliate Adwords arbitrage site? Of course not. Not because I don’t think there is any potential value in there. But because I know there are thousands of people out there who can easily come up with a better mouse-trap with very little time and effort and erode any possible value there for me.

I would rather spend most of my time focusing on the things that will create the most value for me in the long run. Those are the things in which I can gain a strong “defensible position” and more often than not, they are “offline” and not “online”.

How about you? I love feedback!

Filed Under: Make Money, Small Business Tagged With: ,

Lessons learnt while dyeing my hair

May 31, 2010 by Leave a Comment

For a while now, I’ve been trying to get my hair purple. I’ve dyed it three times, and it ended up blacker than when I started. Aside from being terribly frustrated, I’ve learnt a few lessons for life and business.

1. Always do your research

I went to five or six shops looking for the perfect shade of purple. Turns out shops in Nairobi don’t stock much beyond brown, black, blonde, and grey.  Apart from realising that someone should stock strange hair colours – even if it’s only on demand – I discovered that Nakumatt and Uchumi sell half a litre of Ooh yoghurt at 73 bob while Ukwala sells it at 95 shillings. Interesting.

2. Get dizzy-proof

The thing with servicing clients, no pun intended, is that sometimes, you’ll go round in circles and end up right where you started.

The first colour I bought was aubergine, and after several sessions using varying degrees of it, and going through black, red, blue, and several purples, I’ve ended up with plain old aubergine. Come Saturday, I’ll put it on my hair undiluted, and drive my hairdressers off the edge of sanity.

In business, be prepared to spin on the spot with a client, and when you walk past the same signpost for the millionth time and client says ‘that’s exactly what I want!’ do some yoga, smile, and remember that it’s worth it in the end.

3. Failure isn’t always a bad thing

On the assumption that the Saturday dyeing will work, it will have taken me two weeks, four sessions, three thousand shillings, 6 to 7 hours, and six pairs of gloves to get my hair the right colour. But, I now know 3 ways not to dye my hair, and next time, I can do it using 200 bob and one go.

4. Improvise

At one of the shops I went to, they didn’t have purple dye, but they suggested I try powder food colour. I laughed at the idea, but apparently it’s a popular one, and it gives you a much wider colour range. Plus, it’s temporary, so if it doesn’t work out, it’ll be gone in a few weeks.

As a business person, you should always give the client what he wants. But if you don’t have it, sell them a Plan B. Just be sure it’s one that works.

5. Know when to stop tweaking

The thing with artists is we never know when to stop. We always want to put in one more word, take a comma out, change the shade of blue, twist a bit of code, make everything just perfect.

During my multiple sessions, I started out ultra-violet black, which was too dark, so I added some aubergine, which was too light. I put in a bit of food-colour purple … which took me back to black. Very frustrating. If I’d just left it at bright purple, it would have darkened with time.

Good business is like dyeing hair; you get your hands messy, you don’t know what to expect, you use a lot of resources [and water] and your hands get really, really hot.

So remember to have a tank, a long fuse, a borehole, a source of emergency capital and a brilliant assistant, even if that assistant is you.

And always, always, always wear gloves.


Crystal Ading’ is a professional author, editor, rock lover and mother. Her work is available through www.threeceebee.com.

Filed Under: Miscellaneous, Small Business, Tips Hacking and Reviews Tagged With: ,

9 Steps to Start Your Own Business

May 24, 2010 by 6 Comments

A lot of people have dreams of making it big with their own business and they think they have some great ideas that they want to act on but they don’t know what to do, so they don’t do anything. And that’s their biggest mistake – they don’t do anything. The first step to starting a small business is to take the first step. Take some action.

So whether you’re thinking of selling a product or providing a service, these are the 9 Steps to Starting a Small Business

  1. Take Action – Don’t just talk and think about your idea. Do something. I guarantee that if you’re successful, it will not look anything like you originally imagined. It is IMPOSSIBLE to think of all the different possibilities so just do something to start and worry about making changes as you go.
  2. Get Money – Most people are going to hate this one but I think it’s necessary. I think the question I get asked the most is what to do if the person has no money. It’s hard enough building a business with plenty of money and it’s nearly impossible with no money.
    Even if it’s just money that you have saved, set an amount aside so you have something to start with. Trust me, trading time for money is a VERY hard way to go and I don’t recommend it at all.
  3. Register the Business – This one scares everyone because they think it’s a ton of work filling out complicated government and tax forms. The reality is that it is almost too easy. Just register your business and get it done with. It makes everything else so much easier down the road when you have a registered business. Here’s how to do it.
  4. Set up a Bank Account – I was going to include this with the previous step because it’s so small but I realized that it’s too important to skip. If you’re working from a bank account, it’s much easier to manage your money, receivables, and taxes. Again, it’s a one time thing that makes everything else easier down the road.
  5. Create a Two Page Business Plan – I’m not a big fan of business plans. I once created a 40 page document and realized that I went into so much detail that I was better off just doing what I was talking about. I also think that their main purpose is in the formation of capital (i.e: getting money from other people) and most small businesses aren’t trying to get that type of money. However, I do think it’s good to get your ideas on paper and if you just go off and write 2 pages of your ideas, it’ll help make your thoughts much clearer. Don’t worry about getting it perfect – just get your ideas on paper.
  6. Create a Scorecard – I know it sounds minor, but along with getting money before I started, the lack of a scorecard was the biggest hindrance to our early success. A scorecard is a spreadsheet to track how your business is doing in different areas of your business. It allows you to focus on specific areas of your business and measure how well your business is doing. For example, I know how much it costs me to generate a new customer, so I use that information when I determine whether a new campaign is effective or not.
  7. Create a Manual – In my mind, this replaces the long business plan. Until you start creating a manual for your business, you will not be successful. By putting on paper the exact steps to run each part of your business, you are creating a recipe for success. Without it, you cannot create a consistent experience for your customers and you waste your time reinventing the wheel each time you need to complete a task.
  8. Create the First Draft of Your Product – If your plan is to create a new product or service, build it for the first time. Determine what needs to be done to manufacture the product or complete the service. If you’re just distributing a product or service for a supplier, go through that process to determine what needs to be done to go from sale to successful delivery of your product. Oh yeah, and make sure every detail is recorded in the manual.
  9. Test the Market for the Product – Go out and try to sell your product or service. This is where some of that money that you set aside comes in. You don’t want a full-blown campaign but you want to see what type of response you will get on your service. You’re almost definitely going to lose some money here but you’ll start getting some data points (which will show up in your Scorecard) that you can start making decisions off of.

The most important step in starting a small business it the first one – take action. You can come up with a ton of different scenarios in your mind but until you take some action to begin testing out your idea, you will never know. Some ideas you think will be great will be horrible and ones that you think will be a waste, are your best ideas. Don’t just go at it halfway. Create some sort of structure with the steps above and you have something to start testing and growing.

Filed Under: Small Business Tagged With: ,

Generating Business With Social Media Marketing

May 19, 2010 by 1 Comment

I bet you’ve noticed how “social media” has become such a huge and ubiquitous buzzword.

Every business owner who heard of the Makmende story probably started to think: how can I use social media to improve my business? The great thing about social media is that it is usually free to use. Unfortunately, it takes time and commitment. More often than not, people go into social media without any idea of how to do…anything.

Hubspot have just released a nice little mini book on how small businesses can use social media.

The book answers these questions:

  1. How does social media drive business revenue?
  2. How do small business owners resource the time needed for social media?
  3. How can blogs drive small business leads?
  4. How does the B2B application of social media for small businesses work?
  5. How can social media support offline marketing activities?
  6. How do small businesses get started using social media and keep generating content?
  7. How is the cost of customer acquisition lower when using social media compared to outbound methods like direct mail and print advertisements?

Click here to Download the book (PDF)

The book is an interview done on four small businesses to understand how they were using social media to have a direct impact on business growth. The eBook includes detailed information to explain how small business owners can get started in social media as well as strategies that have been proven in the “real world.” This eBook isn’t about a company preaching the wonders of social media; instead, it tells the story of how four different businesses found their own successful social media strategies.

Filed Under: Small Business Tagged With:

Business 302: Weathering the storm

May 15, 2010 by 2 Comments

Running your own business is a lot like being stuck in Nairobi in 2010. El Niño, La niña, miracle babies, global warming, and several unnamed cults have urged the gods to kill our weather patterns, so no one really knows when it should rain anymore. It’s mid-May, and our showers of blessings are yet to slow down. This unpredictable weather comes with both blessings and less-than-blessings.

Rain means filled up dams, which logically equal lower electricity bills. It also means more greens, less dust, less hunger, and more umbrella sales.

But the rain has some downsides too. Tomato and onion gardens are being flooded, so they’re not maturing well and are getting pricey. In my neighbourhood, I buy one [fairly large] tomato at ten bob, which is ridiculous really.

The roads are getting eroded, and so is our good sense; have you tried moving in the CBD when it’s raining? Don’t even get me started on the burst sewers. Nairobi is a lot cleaner and greener than she used to be, but we still clearly has a massive drainage problem.

Business is sometimes like that. We all itch and ache to go entrepreneur and do our own thing, but when we get there, it’s not quite what we expect. When we are starving in drought, we beg for rain, but when it gets here, we have to deal with wet feet, muddy shoes, and malaria.

When you work for ‘the man’, you may have a crazy boss, but you can always transfer or quit. When you’re working for yourself, you often have annoying customers, but they’re paying the bill. And no, you cannot bash your clients on twitter.

But just as you enjoy rain while cringing at the potholes, you can harvest your business as you hide from giant mosquitoes.

Yesterday, I got stuck in the rain, and learnt a few lessons that can help you build your business. So here are my survival tips for rain – and business – in 2010.

  1. Always  trust your instincts: When I looked at the sky at 4.30 yesterday, I considered staying in the office and waiting it out, then decided to try to beat the clouds instead. Had I stayed at work, I’d have been stuck until 8.00. But then I’d also have been warm and dry, and got a lot more work done.
  2. Always have a backup plan: I carry a big blue knapsack everywhere I go. It’s loaded with endless junk, cables, a bottle of bubbles, a yoyo, three novels, purple lipbalm, spare bullets, ten teabags and three handsets. But nooooo, it doesn’t have an umbrella. ‘Nuff said.
  3. Wear sensible shoes: You never know when you’ll need to have an emergency meeting in a high class restaurant with a new client. Or when you’ll need to run in the rain.
  4. Learn from others, but don’t envy them: I have always admired girls that can walk in high heels, and I’ve even toyed the idea of ‘upping my business image’ by getting some skirt suits and Louis Vuitton. But yesterday, I saw good-looking ladies in litty-bitty power-skirts surviving the cold and rain while I breezed it in my Northstars and jeans. Score one for the tomboy!
  5. Always have an emergency fund: You never know when you’ll need to kill some rain-time by having a hot pizza instead.
  6. Timing is everything: When I finally got to my bus stop, the rain was pretty bad and there was a shortage of matatus, so I hung out in the semi-shelter for a couple of hours. I saw some people rushing off to Bomb Blast to get transport, but they had to get soaked through and use some serious rugby skills to get there. I waited until the rain was a drizzle before I calmly headed that way, and I found a matatu ready and waiting. Yay!
  7. Stay positive: If you have to be stuck in the rain, it helps to have a big red jumper, heavy blue denim, canvas shoes, and a waterprof hairstyle. But even without the protection, try to keep smiling. The bad times, like the rain, will turn to rainbows eventually. Just ask Donald Trump and Noah.

Crystal Ading’ is a professional author, editor, rock lover and mother. Her work is available through www.threeceebee.com.

Filed Under: Small Business Tagged With: ,