By Joanna Avellana | October 19, 2016
We have always been 50/50 owners of the business, and it has always worked out well. We even have equal titles: I am President and he is Chairman. My concern is for the future. We have been approached by a couple of investors, and while nobody has come up with an offer we are willing to accept, all of them have asked that one of us be the majority owner of the business so that decisions can be made if the two of us ever disagree.
Frankly, I don’t see that ever happening, and if it did I would place family over business. But do you know any creative way we can make prospective investors happy on this point if and when the right offer comes along?”
First of all, congratulations on building a successful business with your brother without any friction – that is a very rare achievement in this day and age.
When small businesses are first launched, fights between the owners rarely happen. This is because there is usually nothing much to fight about at that point.
As the business grows, however, the likelihood of disagreements between the owners multiplies exponentially because now there is something – usually a quite substantial something – to fight over. Each of the owners looks at the other and says to himself or herself “I am the reason this business is successful, and this other person is getting 50% of the profits. That’s not fair!” Often that attitude is fueled by family members who were not present, or did not care much about the business, when it was first formed – spouses, boyfriends or girlfriends, children, in-laws. Everyone thinks they know what’s best for a business once it’s proven itself, and these unsolicited “consultants” can wreak havoc with an organization that isn’t broken and doesn’t need fixing.
You are wise to place family first in a situation like this – your prospective investors should realize a big part of the business’ success is your ability to work well together. But your investors are also wise to be cautious about a 50/50 ownership structure. If you and your brother ever disagree, there’s a risk the business will be “deadlocked” and cannot move forward.
There are no easy solutions here, but there are a number of ways to get around this you should consider, without having to “flip a coin” to decide who gets the 51% and who the 49% of this business. For example:
- if the two of you are directors of the corporation or limited liability company (LLC) that runs the business, one of you could be given an extra vote “solely for the purpose of breaking any tie in a board vote”;
- you and your brother could sign a “mediation agreement” requiring any dispute between the two of you to be submitted to mediation by an acceptable third-party mediator (when I do these, I usually include the name of a person, and two alternates, who are “pre-approved” by the two of you – for example, your father, the company’s accountant, or a mutual friend the two of you both respect);
- you and your brother could agree to add the investor as a third board member – the risk here, though, is that gives your investor a “swing vote” that would enable him to play each of you off against the other; or
- you could enter into an agreement dissolving your company if the two of you disagree and can’t resolve the dispute within a reasonable time (for example, 90 days).
I personally prefer the last choice, because it puts real pressure on both of you to resolve any disputes without the involvement of third parties. Neither of you will be willing to “kill the goose that’s laying the golden eggs” supporting your families, and you will be more willing to compromise to keep the company alive. Also, this approach guarantees that both of you will be nagged to death by your spouses (if not your investors) not to be unreasonable.
Of course, your investors may not be comfortable with such a “ticking time bomb” provision in the company paperwork because they are afraid they will be left out in the cold. One way to ease their concerns is to add a provision that if the “dissolution” provision is ever invoked the investor’s ownership stake would be converted into debt, allowing them to get their investment money back before you and your brother get any of the proceeds.
The most important thing for the two of you right now is to continue communicating closely on all management decisions the way you always have. In the words of country/western songwriter Keith Whitley, “we disagree but in the end but there will never be two closer friends, and brotherly love is something we all need.”
Cliff Ennico (firstname.lastname@example.org) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com. COPYRIGHT 2016 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC.
By Kate Hornsby | September 23, 2016
When Treasuries first arrived on Etsy back in 2006, it was promoted as a way for sellers to celebrate and promote the work of other sellers. The idea, at the time, was to make Etsy into a community that would help members come together to encourage each other and also provide sellers with a chance to collaborate with others.
While the idea was loved and embraced by many, Etsy now reports that they are removing Treasuries because buyers rarely look at them and analytics have shown that few buyers actually purchase when they do take the time to view them. Etsy states that instead of putting resources in continuing to support Treasuries on their website, they will move to more proven marketing efforts with the hope of increasing the exposure to their seller’s shops.
Although this perhaps makes sense in a bottom-line sort of way, Etsy sellers who support Treasuries are not going away quietly into the night. Instead, a petition to save Treasuries has been started, which had been signed by over 1200 people yesterday. Comments below the announcement not only draws attention to the fact that there is a petition, but sellers have been quick to point out the flaws in Etsy’s analysis and decision.
One seller who opposes the loss of Treasuries tells Etsy that perhaps one reason buyers aren’t viewing Treasuries is because buyers can’t find them. She suggest that since Etsy killed off the front page Treasury, many buyers don’t even know the Treasuries that are still on the site even exist.
So…what will happen to the Treasuries that sellers have already created? According to Etsy, although they do not plan to remove them from the site, as of October 5, 2016, sellers will not be able to edit them nor will they be able to create any new ones. They also mention that they won’t do away with the external links to Treasury pages and that they will still continue to function, but for all practical purposes other than that, Treasuries appear to be coming to an end.
What do you think about the end of Treasuries? Have you signed the petition? Leave a comment below.
By Kate Hornsby | September 20, 2016
Although the holiday season doesn’t officially kickoff until November, it’s never too early to get a head start on your holiday marketing. Here’s some ideas that can help you get the most out of your holiday marketing.
Provide coupons as sign-up incentives
Buyers love coupons and one great way to kick-start your holiday marketing is to offer them to individuals who sign up for your website’s newsletter. This not only can help get them into your store, but the newsletter provides a great way to market your holiday sales.
Remind international buyers about shipping deadlines
International buyers typically have shorter shipping deadlines to order and receive items when their packages are sent by sea mail. You can often get some pre-holiday sales by reminding buyers that the deadline for purchasing items from across the pond is quickly approaching and time is running out.
Consider a loyalty program
Dollar and percentage-off offers are great, but you can also take loyalty shopping a step further by providing your best buyers with additional savings. Black Friday discounts, free gifts with purchase, or even free gift-wrapping can all help to keep buyers coming back time and time again.
Offer free shipping
Although many sellers rightly feel that free shipping eats into profits, many buyers don’t understand if you don’t offer it. One way some savvy sellers have gotten around this is by offering free shipping, but only when buyers make multiple purchases at one time. Buyers will often purchase additional items to meet buying requirements, so offering free shipping on orders of $50 or more, or when two or more items are purchased at the same time, can often work as effectively as offering every item to ship for free.
Call them by name
Did you know that you can often create a closer relationship with buyers by simply calling them by name? When corresponding with a buyer, make a point to address them by their first name. You can also make it a bit more personal by adding a hand-addressed thank you note with their purchases that uses their first name as well.
How do you maximize your holiday marketing? Leave a comment below.
By Kate Hornsby | September 16, 2016
“In this world nothing can be said to be certain, except death and taxes.” ~ Ben Franklin
Although April is usually considered the official month for tax season, some online sellers are more familiar with another date – October 15. For those that don’t know, this is the deadline date for those who have filed extensions. Whether your with the former or latter crowd, as this year begins to draw to a close, it’s a good time to think about how you can make the process simpler for next year. Here’s some ways that can help.
Create a dedicated area for tax stuff.
Whether you prefer an organized file system or like to just toss receipts and other paperwork into a desk drawer to deal with later, the first step toward simplifying the process is to create a dedicated area to keep your tax stuff in. Terry, a longtime eBay seller finds that the best way for her to keep up with receipts and other papers she may need is to take them straight out of her purse and put them into the top drawer of her file cabinet. Although she says there is still some organizing to do whenever tax season rolls around, everything is in one place which makes the process a whole lot easier.
Use a designated bank account for your online business.
Creating a separate bank account for your online business may seem like some extra work for bookkeeping, in reality, it actually makes the process easier. Instead of having to sort through personal and business purchases, you can simply view your bank statements to know exactly what you spent for business and what type of income you had. Keep in mind that although it’s not mandatory for you to have separate accounts as a sole proprietor, if you choose to become a corporation or LLC, you do need separate accounts, so if you are just getting started and think that you may incorporate in the future, it’s best to go ahead and open a business account right off the bat.
Make bookkeeping part of the routine.
While it’s easy to procrastinate and make taxes a low priority, you can save a whole lot of time and stress by making your bookkeeping a part of your daily or weekly routine. Even though April (or October) may be months away, dealing with it a little at a time can keep tax preparation from becoming a big ordeal as time ticks away. To make the process even more simple, consider using Quicken, Quickbooks or another type of bookkeeping software that will import bank records and sales totals right into files on your computer.
How do you simplify the tax process? Leave a comment below.
By Kate Hornsby | September 13, 2016
Marketing can not only help you increase the traffic to your online store, but when done correctly can assist in maintaining customer loyalty and could even raise your sales. Unfortunately, many sellers put off performing the marketing portion of their online business because they think that it will take up too much of their time. In reality, you can often get positive results, even if you only work on it for 15 minutes a day. Here’s some ideas that can help.
Create a blog
Many online sellers continue to put off creating a blog because they either don’t know what the blog should be about or they don’t know what type of content they should write. Since search engine are constantly looking for new content, however, maintaining a blog can help boost your search results and draw attention to your store. To maximize your blogs potential, aim to create content that is relevant to the types of products you sell or promotes what your site is all about. As an example, if you sell cooking utensils, you could provide tips on cooking or even recipes that use the types of utensils that you sell.
Lights, camera, action
Creating short videos on YouTube that include a link to your website in the title is a great way to market your online store. Videos are extremely popular right now and search engines just love them. Google will even index your website higher in their search results if it contains a video.
Maximize your Facebook presence
Although there are some mixed opinions about how well Facebook Business pages (also known as a fan page) do, it’s still a good idea to have a Facebook page that is devoted to your online business. Make a point to post something there at least once a day.
While some sellers tend to post nothing but the items they sell on their Facebook page, mixing it up a bit with some personal stuff or articles about your particular niche can help keep your followers from feeling that you are doing nothing but spamming them.
Tweet, Snap, Post and Chat
Play around with other types of social media to see which ones are the best fit for your online business. If you’re selling to the millenial crowd, you may find that marketing on SnapChat or through Instagram is more successful than posting directly on Facebook or Twitter. To keep from getting overwhelmed with your marketing, try and master one social media website before advancing to the next. Make a point to track which sites do better and you can then concentrate more of your effort there.
How do you market your online store? Leave a comment below.
By Kate Hornsby | September 9, 2016
Change is coming to Amazon (again). Maybe not today. Maybe not tomorrow. The word on the “street” (or should that be banks of the river?) though is that sometime soon the change is coming.
What change you ask? Well, a couple of weeks ago it kind of started slipping out that Amazon is no longer going to accept receipts of purchases for proof of anything. The emphasis here is on anything because this is not new. Amazon has slowly, but surely been refusing receipts from purchases made at retailers, even refusing to accept receipts for places like Coach and Nike.
Although most sellers have been seeing the “writing on the wall” for quite some time now, the surprise came a couple of weeks ago when the rumors started swirling that the new policy would happen sooner than later and most likely, in October. This would mean that sellers who have already been feeding the Amazon FBA beast in an effort to get ready for the holidays would most likely be up the creek, or rather, river — without a paddle.
Still, it’s important to realize that on the official side of things, Amazon states that they have no immediate plans to change how they are accepting receipts. It’s hard to speculate on when it will happen, but sellers are hopeful that the company will at least wait until after the holiday season before putting it into place.
Why the big change? Really, it’s all about keeping the customer happy. Although you go out and buy items new from retail places to resell, Amazon sees them as actually being used. They have realized that a good deal of the complaints the company receives from buyers are actually coming from arbitrage sellers. Unfortunately, quite a few sellers send in items that are dirty, missing pieces, or have other problems. Since the buyer is expecting new, as promised, they are returning the items and making complaints.
Where this will all ultimately lead remains to be seen, but it’s a fair bet that if arbitrage shuts down at Amazon, sellers will shift back over to eBay to sell these kind of items. Buyers will then have to follow as well, since the marketplace will become the place for discontinued and new items that can only be found in retail stores.
Will a new receipt policy affect your Amazon FBA business? Leave a comment below.
By Kate Hornsby | September 6, 2016
Although the official start of fall isn’t until September 22, many people consider the unofficial end of summer to have “officially” started this week. For many sellers, the day after Labor Day not only means summertime is over, but that it’s also time to kick-start the holiday season (even if it is a month or two early to be getting out those winter coats).
So, what is one of the first steps for getting ready for the holiday season? Getting your eBay items “gift ready” for the holidays. In other words, there are some things you can do to make the items you already have in your store more giftable. Let’s take a look how.
Tweak your keywords
First, take a good look at the titles of your listings. Are there ways to incorporate keywords that could make the item a better fit for the holiday season? As an example, if a whimsical coffee mug would make a good co-worker gift, you can add “co-worker gift” or “Secret Santa.” Think about who the buyer could be purchasing your item for. Add details to your listing that can help make the item seem more personal, so that it is attractive as a gift for a close friend or family member.
Think about the people in your life. How much would you spend for a gift for your son’s teacher, a coworker, or a brother or sister? Setting prices within the $10 to $25 range can make them more appealing as gifts for office parties or a white elephant gift exchange, since presents for these types of get-togethers normally have a price cap. Also organizing items by price can help buyers quickly find gifts that are within their budgets.
Sell gift sets
Many buyers like gift sets because it takes some of the pressure off them when they are gift shopping. As an example, if you sell products such as homemade soap and hand creams, you could sell some of the more similar items together. Not only are buyers more likely to get them since it’s a complete gift, you can also often get a higher price by selling a set than if the person was buying just a single item from you.
Create a seasonal theme for your store
Okay, it might be a little early to bring out the snowflakes and dancing snowman, but adding a holiday theme to your photos as you bring in more inventory can save you time when the holidays draw near. For instance, you might show a necklace in a gift box or draped over a Christmas stocking, so that buyers can envision how the item will look when the recipient opens it (however, make sure to let buyers know that the stocking and/or box are not included though unless you are providing them as part of your holiday marketing!).
Are you preparing for the holiday rush? Leave a comment below.
By Kate Hornsby | September 2, 2016
It’s that time of year again. Time for the dreaded eBay Fall Seller Update. Although it will take a while for everything to shake out, it appears that once again eBay is moving closer and closer to trying to be the next Amazon and as always, the question is how it’s all going to affect eBay sellers.
Here’s the latest:
Seller Performance Standards : Some good news here. EBay is going to give more time to sellers who have fallen below the required performance standards. This means that instead of a suspension or showing you to the door, you will have 3 months to improve your transactions. As long as each month is better than the previous, they will continue to work with you.
Structured Data: In another, “do as monkey do” move, eBay is pushing for newly created listings to have at least one type of product identifier. They say that you will no longer have the option of using NA or “Does not Apply.” Some categories will continue to be exempt, however, so there is still hope for those selling vintage and other one-of-a-kind items that normally wouldn’t have any type of coding for you to use even if you wanted to.
Turbo Lister going bye-bye: This one isn’t exactly new news, since eBay had already announced plans to move sellers over to a new Seller Hub, but there are some final dates set now. As of June 2017, eBay will no longer support Turbo Lister and in the spring it will no longer support Selling Manager or Seller Manager Pro. They are emphasizing though that this new shiny Seller Hub is free to use, and you can get optional additional features for $15.99 a month. (Free to Premium or Anchor Store subscriptions)
Shipping and Returns: eBay states that they are making it easier for sellers when it comes to offering replacements and exchanges. As of October, sellers can automate the process, or will have the ability to offer replacements and exchanges whenever a return request is started, even if the seller didn’t set this feature up when they initially created the listing.
New categories and classifications: No surprise here as this seems to happen ever so often anyway. EBay states that the new and revised categories will arrive this October.
What do you think of the Fall Updates for eBay? Leave a comment below.
By Kate Hornsby | August 30, 2016
Last week, we started discussing some mistakes that Etsy sellers commonly make and how buyers could often stop those types of mistakes if they only knew about them ahead of time. This week, we continue to discuss some more of these common mistakes and how to correct them.
Shiny object syndrome. Running an online business is hard. Sometimes shop owners make it even harder on themselves by developing Shiny Object Syndrome. SOS typically happens when a shop owner keeps shifting from one idea to the next all in an attempt to increase their business. Yet, because they are constantly moving on to the next idea – nothing is really happening. If you are making this common mistake, you should attempt to focus on only one task at a time and give each new idea a chance to develop before moving on to the next big idea.
Not having a business logo. Your business logo may not seem like a big deal, but it is actually one of the first things a buyer sees when they visit your shop. While a lot of sellers put off getting a logo because they think it will cost hundreds, if not thousands of dollars, the actual fact is that this simply isn’t true. Many graphic designers will create a logo for you at a very low cost. The website fiveer.com even has graphic designers who will make a logo for you for $5. With prices so low, there really is no reason not to have a logo for your shop.
Not spending enough time on social media. Spending time on social media websites, such as Facebook and Twitter may seem counterproductive to doing what you really need to do (like creating new designs, listing products, etc.), but it really is a necessary evil. Today’s consumers want to feel like they know the person they are buying from and social media helps them to do that. Use social media management platforms, such as Hootsuite to help promote yourself across multiple platforms and manage your advertising campaigns.
Although these common mistakes may at first seem small in the grand scheme of things, it is actually these tiny details that can sabotage and ruin all your hard work. Taking a little time to objectively look at your store and how you run it, can go a long way to helping you avoid these mistakes and may help you to increase the traffic and sales for your Etsy shop.
By Kate Hornsby | August 26, 2016
The old saying “time is money” is never more true than when you’re running an online business. If you’re not listing, you’re not selling and you’re not making money. If you’re not buying inventory, you have nothing to list, so you’re not listing and you’re not making money. Yet, in between trying to do all that, you still have to ship your items, take photos, create listings, and so on.
Hiring an assistant to help you with your online business is the obvious choice, but it’s important to remember that not all assistants are created equally. Whether you are hiring a virtual assistant or someone to work as an employee, it’s still important to find the right fit.
Here’s some tips that can help:
Decide what you want your assistant to do. A lot of sellers know that they need help, but then when they bring someone on board, they really don’t know what it is that they want the person to do. Having a clear idea in mind of what tasks you want to delegate to your assistant can help ensure that you and your assistant are the right fit.
Ask your network for referrals. If you’re looking for an assistant that can physically come in and work, it may take a little more due diligence to find a good employee. If you are using a virtual assistant, however, it’s usually fairly easy to get feedback on what people or companies are good and are bad by visiting some Facebook groups or forums devoted to online selling.
Check their references. A good assistant won’t mind sharing the contact information of previous clients or employers. It can be a little more tricky if they are still working for someone else and want to move on, but usually you can at least talk to a personal reference or two and still get an idea of what type of person you are hiring.
Find someone who knows the business. Although the type of assistant you hire will depend on what you want the assistant to do, it is generally a lot easier transition if the person already understands how an online business works and what the listing process is all about. Fortunately, if you’re going the route of a virtual assistant, there are companies out there that are familiar with the process and a few of them even specialize in helping online businesses that use platforms, such as eBay and Amazon.
Request a trial period. There is always an adjustment period when you bring in someone new. In some cases, the person will fit in almost right away and you know the arrangement is going to work. If you’re new to working with a virtual assistant or having an employee, however, you should expect a learning curve for both you and for them. Some online sellers discover that while they need the help and even want the help, the arrangement itself just does not work. Perhaps they like to micromanage too much, or what they thought the virtual assistant or employee would do and what they are doing, just really aren’t the same thing. If you have request a trial period, you can easily end the arrangement and either try someone else or take another approach.
Do you have an assistant to help with your online business? Leave a comment below.