Missouri Small Business and Technology Development Centers Blog

In our last post, we discussed how to set rates for freelance work, specifically if you are planning to charge by the hour.

But what if you want to charge by the project? Here are some things to consider if you’re not sure which is best for you.

Charging by the hour may be a good way to go with steady clients who bring you a regular and predictable work flow. It can be an easy way to predict revenue and time needed to complete each project. But, if you are particularly efficient with your work, and it takes less time for you to complete each project, you may be better off charging a set fee for each one.

A per project price is good for things you can produce quickly. But it’s not the best way to go with a new client or a new project. It often takes time to establish a way to work with each new customer, and until you have a sense of how efficiently you can satisfy each client’s demands, you should protect yourself with an hourly rate. “Project creep” can rear its head, causing you to add more hours of work to a project without being able to recoup the cost.

Experienced freelancers have learned to clearly define the scope of their services ahead of time to avoid misunderstandings. For instance, if you are a freelance writer given an assignment for an in-depth article, consider how much research you are willing to do, how long it will take to produce a first draft and how long it will take to incorporate the client’s edits and changes. Consider how many edits and revisions you are willing to do up front. Make it clear to your client that if the piece involves more revisions than originally itemized in the scope of work that you will add an additional charge for that service.

Clear expectations upfront can help you avoid awkward negotiations later. By putting some parameters around the project, the client can agree to a clear scope of work at a fixed price.

Freelancing offers innumerable benefits, not the least of which is flexibility in your work schedule, the excitement and challenge of new projects and the opportunity to do a variety of work. However you decide to charge for your services, don’t underestimate your value. Just because you may not keep “regular” hours doesn’t mean they are not valuable hours!

In our work, we see a lot of neat entrepreneurial ideas come across our desks, or show up in our reading…and sometimes we just can’t help telling you about one.

But if you aren’t a dog lover, this one won’t make much sense to you. For those of us who build our lives around dogs, it’s an “Of course! Why not?”

If you live in New York City and own a dog, chances are you need a dog walker. And there are hundreds of folks willing to oblige, for a fee, of course. But now this courtesy service has reached an entirely new level, thanks to Swifto, a dog walking service – now with GPS and a mobile app!

Swifto’s walkers will take your canine companion for exercise at any time of the day or night in Manhattan, but with Swifto, you can see for sure that your dogs are being walked, where and for how long. You can follow along using the mobile app. You receive a text message when the walk begins, and then you can track your buddy as he makes his rounds in the neighborhood, meeting and greeting and delivering his (non-dog-owners, turn away from the screen!) pee-mail to his four-footed network.

At the conclusion of the walk, you receive a text message that captures the details of the excursion, so you know for sure that Spot is getting what you paid for.

It’s $20 per walk with Swifto, but there are discounts for 20 walks or more.

This gives new meaning to the adage, “Do you know where your children are?”

www.swifto.com

It’s the last week before Christmas, and according to information from the Missouri Economic Research and Information Center, 1/3 of consumers are still buying last minute holiday gifts. Those, apparently, are the folks who didn’t finish up their shopping last weekend, which are traditionally the two busiest shopping days of the season. The nation is expected to top $447 billion in holiday sales this year. Gift cards make up about 6 percent of that amount.

24 percent of shoppers started their gift buying at 4 a.m. on Black Friday, the Friday after Thanksgiving. It’s estimated they spent about $45 billion that day, and 55 percent of that was spent on clothing or accessories.

This year, online purchases on Cyber Monday, the Monday after Thanksgiving, were the largest in history — more than 1 billion. 90 million of us planned to shop online that day.

In spite of a trend toward artificial trees, all 50 states still produce live Christmas trees. In 2009, according to MERIC, there were $250 million in Christmas trees sold nationwide. In Missouri, it’s expected that the 134 tree farms covering 1,596 acres will produce 276,000 trees.

And a bit more interesting holiday trivia:

• Shopping malls spend an average of $20,000 on holiday decorations each year and it takes an average of five days for the mall staff to complete the decorating.
• Our friends in the postal service will process an average of 661 million letters, cards, packages each day during the holiday season, and will eventually handle 15.8 billion pieces of mail. December 20 was their busiest day.
• The postal service has been delivering holiday greetings for 235 years.

Here’s hoping your holidays are everything you want them to be.

It’s been interesting in recent weeks to see all of the political campaign advertisements touting candidates’ experience with or support for small business. The importance of entrepreneurship for job creation and long-term economic stability is finally getting the attention it has long deserved. In our program, we sometimes say, paraphrasing the country song, “We were in small business before small business was cool.”

But for those just now catching up with the powerful train that will carry our nation into economic recovery, we thought we’d share the latest information released just this week by the U.S. Small Business Administration and several other federal agencies and foundations.

The SBA defines a small business as any independent business with 500 or fewer employees. Obviously, that’s a huge sector of our economy. In our programs, the Small Business & Technology Development Centers and the Procurement Technical Assistance Centers, we work primarily with companies on the smaller end of that sector. In addition to helping individuals start businesses, our sweet spot is the 10 to 100-employee company. (more…)

In recognition of National Small Business Week, Dan Danner, president and CEO of the National Federation of Independent Business, released the following statement:
“New research from the Pew Research Center shows that 71 percent of Americans say small businesses have a positive effect on the way things are going in this country, more than any of the 13 sectors the group asked about. At the bottom of the list are large corporations (64 percent said negative), the federal government (65 percent), Congress (65 percent) and banks and financial institutions (69 percent negative).”

In a recent article in the Wilson Quarterly, Margaret Graham notes that two generations ago, folks like Steve Jobs and Bill Gates — entrepreneurs who built monolithic organizations — would have been viewed as marginal, even perhaps disreputable figures. Today, they are heroes of industry, having taken their entrepreneurial creativity to a new level in corporate America. They made the corporation entrepreneurial. Beneath the big umbrella that is Apple or Microsoft are hundreds of inter-relationships with small firms, creative units and enterprising individuals.

Could it be that the little guys have taught the big guys a thing or two? The fact is that all through history, it’s been the entrepreneurs who gave birth to the revolutionary ideas that revolutionized a nation. Think Thomas Edison and Henry Ford. Whereas the emphasis in that era was to grow big, create systems of mass production and take those innovations to an eager nation, the emphasis now is on agility, response to innovation and adapting to new market demands. The idea of entrepreneurship as a disruptive force has gone from a negative connotation to a positive one.

Regardless of the time, generation, economy or environment, whether they are viewed as villains or heroes, entrepreneurs have changed the course of history in more ways than we can fathom.

The news that IBM will be opening a technology support center here in central Missouri, creating more than 800 jobs with an average salary of $55,000 each, is certainly great news for our region. Mid-Missouri has a higher than historic unemployment rate, and many of those individuals are highly skilled workers who have lost well-paying positions due to plant closings, down-sizing, out-sourcing and the overall economic malais. We can only hope that they will find new opportunities with the big business soon to be our neighbor here in Boone County.

The even better news, at least from our perspective, is that this renewed earning power will enhance the spending power of mid-Missouri workers, and that’s great news for the area’s small businesses. As more disposable income enters our marketplace, we can also hope that it spawns healthier bottom lines for our region’s entrepreneurs. After all, it is these firms that give our community its color, diversity, fabric and interest — the qualities that attract a big concern like IBM in the first place and keep it here for the long haul.

Better days are here again — for all of us!!!

According to a poll conducted by American Express, nearly half of small business owners plan to make capital investments in their businesses this spring. That’s up 6 percent over about six months ago. Nearly 28 percent plan to hire new staff, up from 23 percent last fall. Although in general entrepreneurs are not feeling overly positive about the economic situation, there are a few, represented in the increasing numbers above, who must be doing something right. Just what is that?

Seems it boils down to cash flow. Which includes getting paid faster. More than 56 percent of growing firms report they generate enough revenue to cover working capital needs, while 33 percent feel they are just staying afloat and another 13 percent believe they may be captaining a sinking ship.

The growing firms indicate that only a few customers are taking more time to pay. One reason for that is faster-growing firms likely have online payment capabilities, which makes everything easier — and faster.

The business and personal services sector seems to have weathered the downturn better than other sectors. The firms that are only holding their own or in decline are most likely in the retail sector and — no surprise — construction.

A good many companies — some 64 percent — said the difficult conditions in which they find themselves have forced them to examine processes, streamline operations and examine management practices. Many report that they have cut spending on marketing and sales. And, many hiring decisions have been put on hold while owners opt instead for part-time workers or contractors for specific project.

Facilitating cash flow and running a lean machine appear to be keys to sustainability. In reality, those are good practices — not just in a time of economic challenges, but always.

As I sat in a legislative hearing the other day regarding economic development and job growth, I heard a theme emerge in the discussion — a deep concern for small businesses, particularly in rural communities. Whether referred to as “Mom and Pop” operations or Main Street businesses, these small firms make up the fabric of these small, rural communities, but their very existence continues to be threatened by recessionary times and larger stores that sell on low price and volume.

We are seeing some ideas and trends emerge around rural entrepreneurship. One of the primary messages these days is the importance of the upcoming 2010 census, which has the potential to affect rural small businesses for years to come in terms of infrastructure and tax base. If you’re an entrepreneur in a rural area, it might serve you well to join in on the canvassing activities to ensure that your community receives its fair share of funding for valuable services and amenities that keep customers in your area.

“Shop Local” campaigns have been around for a while, but they are seeing a new resurgence as communities vie for limited spending money from their residents and fight the big box and online battles. If your community doesn’t have some sort of reminder to residents to look locally first, start one. It’s as easy as printing up a few window stickers or flyers and posting them in all of the local establishments. These “resident companies” — the ones that are born, grow and support our communities — create more jobs than all of the big guys combined. We need to keep them strong.

There are lots of construction, refurbishment and rehab projects going on in rural communities as a result of the stimulus funding. If you are a local firm that could have a role in those projects, find someone to assist you with government contracting and sign up to get your fair share of the dollars.

In addition to record numbers of Baby Boomers starting businesses, many are forecasting that they will also be moving to small towns to enjoy a slower pace and healthier lifestyle. Consider what goods and services they will want in their retirement locations, and provide them!

One of the most common questions I get in our community is, “Are people starting businesses during this recession?” I typically get a surprised reaction when I say that they are. There are many reasons for that, but among them is that as larger companies downsize, there are many highly capable, experienced and talented workers looking for work. And many of them are deciding to create their job instead of simply find another one.

Entrepreneurs are the up and coming workforce in our nation. Our economy is changing from one with a corporate and industrial basis into one with an entrepreneurial foundation. Many workers who have been burned by layoffs from a larger company are eager to take their futures into their own hands.

To make this even more interesting, here is some information from the Bureau of Labor Statistics. While from the fourth quarter of 2007 through the fourth quarter of 2009 the total number of non-agricultural self-employed people decreased, the number of self-employed African Americans increased by 5.7 percent. Self-employment among Whites decreased 3.4 percent, and self-employment among Asians also decreased by 10.5 percent. Self-employment in the Latino population has remained level.

Interestingly enough, this is actually reflective of national trends in the months and years preceding the recession. Entrepreneurship in the African-American community has been increasing for several years. Although no one knows for sure what is behind that trend, some speculate that it has to do with the industries in which entrepreneurs of different backgrounds seek self-employment.

It’s an interesting trend to watch. After all, regardless of where the jobs are created, we know that net new job growth is greatest among small businesses, and they will be the force that leads our nation into economic prosperity once again.

My friend has a daughter who is all about fashion. In her mid-20s, she is convinced that among the necessary expenses of everyday life are housing, food, transportation, phone and fashion. She would rather shop for shoes than eat I suspect. But even she is feeling this economic crunch, and it’s been interesting to see how her buying habits — and those of her millenial generation — are changing.

Millenials have always cared about fashion. But where before it was best to wear designer labels and celebrity-branded items, now with less disposable income, it’s chic to be more conservative and to wear environmentally conscious garments. Less labeling — more authenticity.

Millenials are driving less and biking and walking more. Better yet, they are using technology to do their traveling for them.

Stores like Whole Foods are seeing an increase in sales as millenials (and others) are cooking more and eating out less.

And rather than have an MP3 player, a camera, and a phone, this age group is streamlining in terms of gadgets and going with the Apple iPhone or some other device that allows them to have all the technology they need in one in one handheld wonder.

Keep an eye on these consumers, and they’ll tell us where to head next. Then our challenge is to keep up.