Fri, 30 October 2015
Did you travel for your small business this year? As a blogger you might have attended a business conference. As an Etsy seller, you may have travelled a long distance to showcase your beautiful handmade products at a big craft fair. So which travel expenses can you deduct on your taxes?
Press Play on the Podcast Player Below to hear from Sarah, CPA and Small Business Tax Expert
The IRS defines travel expenses as the ordinary and necessary expense of traveling away from home for your business profession or job. This is travel away from your tax home, which is defined by the IRS as your principal place of business.
As always, remember to keep records and receipts while you travel. The IRS will want you to have these!
If you travel by air or train you can deduct the cost of the plane or train ticket. If you rent a car, you can deduct that cost.
If you drive your own car you can use the standard mileage rate. For instance, if you drove 500 miles round trip to a conference, and the standard mileage rate for the year was .50 per mile (this just a round number as an example, in 2015 the mileage rate was .575), you could deduct $250 as a mileage deduction on your tax return. Learn more about business mileage expense in Episode 69.
If you need to stay overnight, you can deduct the cost of the hotel room. If you use rewards points for your hotel or airfare, and did not actually spend money, you cannot deduct that as a business expense
Other ordinary and necessary expenses of travel such as taxis, tips, or parking are also tax deductible.
Meals are really the only exception. Meals are subject to a 50% limit. So if you are traveling away from your tax home, and you purchase a meal while you are traveling, only 50% of the cost is allowed as a tax deduction. This holds true for non-traveling business meals as well. If you and your partners have a business meeting at a restaurant, only 50% of the cost is deductible as a business expense.
So that's it. If you are legitimately traveling for business, you can deduct all of your expenses. Meals are the only exception with the 50% limit.
The IRS outlines these guidelines in publication 463. The information provided here is a summary of the IRS guidelines, so use your judgment when applying my summarized information to your particular tax situation.
Did you learn something new about business expenses during travel? I'd love to hear your thoughts in the comments!
Tue, 27 October 2015
Have we told you lately that we're obsessed with Blab? It's true! Blab is a live-streaming video platform that allows for up to four people to chat on video at once. This past week, we Blabbed with Mei Pak of Tiny Hands Jewelry & Creative Hive Co. and Cheri Tracy of Orglamix Cosmetics. Both women have partnered with influencers on Instagram multiple times to grow their following, their email lists, and ultimately gain more loyal customers and sales.
Press play on the podcast player below to hear the (slightly edited) version of the chat we had. Or, if you'd like to see the whole thing uncut, you can play the Blab video player at the bottom of the notes.
Mei Pak is a serial entrepreneur who started Tiny Hands Jewelry, a handmade scented food jewelry business in 2006. She now teaches other creative entrepreneurs about business at Creative Hive Co. Cheri Tracy sells colorful, cruelty-free cosmetics at Orglamix.com.
Growing an Instagram Following
Mei confessed that she grew her jewelry business account on Instagram from 0-1000 followers by buying those followers. She doesn't recommend doing this after having done it herself! It helped build up credibility early on but those followers were fake and unengaged. Mei started a second Instagram account for her newer business @creativehiveco For her new account, Mei has collected a list of hashtags that she knows her ideal customer is using. For every 50-70 likes she gives out to potential customers, a small portion will notice her, head to her profile, and if they like what she's doing, they'll follow her. Mei has 3500 Instagram followers for her @creativehiveco account that is only 3 months old! Mei doesn't follow people unless she finds really great stuff from them, but instead she likes and comments on others' photos to get them to take notice.
Cheri has primarily reached out to influencers to grow her Instagram account. She's reached out to accounts with 1500 followers all the way up to 100,000 followers. Cheri's Orglamix account is about to hit 10,000 followers as of October 2015.
Early on, Cheri also pushed her new Instagram account everywhere. She told her email list. She told her fans on Facebook. She connected with bigger names in her industry on Instagram to get noticed.
Pay attention to the time you post and how it performs. Cheri does a morning post, a lunchtime post, and an evening post around 8 PM. Her night-time posts get the most interaction.
Other ideas for growth: Loop Giveaways, or reaching out to accounts that feature handmade sellers.
Beth Anne has grown the @brilliantbizmom account to 2100 followers as of October 2015. She found relevant hashtags in her niche and liked and commented on recent photos. Then she would also find newer accounts interested in blogging or handmade business and like their photos along with following that account. Iconosquare helps her to unfollow the users who aren't following you back. Her current strategy is to post every day and use relevant hashtags in the first comment. (You can post up to 30 hashtags in one comment.)
How an Influencer Can Make an Impact
Mei started off with a great example of just how effective a partnership with an influencer can be. She found an influencer on Instagram one day who had a style and fashion sense matched hers perfectly. This woman was a musician on The Voice. Mei found her email address, introduced herself, told her she loved her style, told her about her jewelry, and offered to send some as gifts for her and her friends and family.
The email landed in the singer's publicist's inbox. The publicist relayed the information, and the woman chose several pieces that she really wanted. This woman then took a photo of all the jewelry laid out on the table and tagged her, and within 48 hours Mei had 2,000 new followers on Instagram.
Mei wants to note that these followers are completely different from paid followers. These are people who saw the photo of her products, genuinely liked them, and took the time to check Mei and her business out and choose to follow her. These are potential customers for Mei that she can build a relationship with.
How to Reach Out to Influencers
Cheri sends a direct message on Instagram to an influencer she wants to work with, and about 8 times out of 10, she receives a positive response back.
Whether the influencer wants free product, a gift card, or cash depends on the person and the size of their account.
Details to Consider
Use specific hashtags when working with an influencer (to draw in more viewers to the post) and specify the amount of time the post is going to stay up. Cheri thought her sponsored posts would stay up indefinitely, but then a larger influencer told her it would be $100 for 5 hours. So you have to specify whether the post will be up permanently or for a certain time-frame. Once a post is deleted, the hashtags and its ability to be found all disappear.
Do you ever send a cold package to Influencers?
Mei has heard of a brand who makes high-end chocolates. If they truly believe the person they're planning to send something to will love their products, and they can't get in touch with them via email or social media, they will go ahead and send out a blind product and that has worked for them.
For Mei, however, she always sends a pitch first to ask for their permission, and then they get to decide which of Mei's pieces they would like the best. Mei says of sending cold packages, "don't be afraid to do that with people who you think will fall in love with your stuff."
Mei is dying to get in touch with Ree Drummond of the Pioneer Woman. We all had ideas for sending the perfect care package to her!
What should you say when you pitch an Influencer?
Cheri keeps her pitches really short and sweet, 3-5 sentences, and includes her email address if they'd prefer to get back to her that way versus Instagram direct messages.
Cheri will always find a connection or compliment she can give where she mentions a blog post she loved or an Instagram post she connected with. This lets them know she's a real person and genuinely likes what they do.
Focus on what you can do for them and their customer base and not what they can do for you. For example, Cheri can focus on someone who is an advocate for cruelty-free products.
Mei had several tips to share too:
Don't make the pitch feel like a favor. Make it all about them.
Don't be formal with your greeting. Don't say Hi Ms. So-and-so. That feels spammy. Call the influencer by their first name.
Mei keeps her pitches at 10 lines max.
Don't just read their latest blog post. You have to do your research. They will sniff you out if all you did was read the first post.
Mei also recommends including a P.S. note at the bottom of your emails, because people tend to read and pay attention to that P.S. note!
Mei reached out to an editor of Girl's Life magazine, and that editor had mentioned a band she liked. Mei was able to include a P.S. that she loved this band too and went to college with them!
Do Instagram Direct Messages Work?
Does an Influencer have to be following you in order to see your messages? No. You can direct message any account that you personally follow.
Whatever you would say in an email, Cheri sends in a direct message. She gets responses almost immediately for many of her pitches.
Cheri sent a message to Sue B. Zimmerman (the Instagram Expert) the other week and she received a response back within 5 minutes!
Most influencers get back to Cheri within 24 hours, and about 8 out of 10 pitches get back to her with a response. Cheri believes this response rate is much higher than if she were to email them. People who are on Instagram are really active and they're on there all the time. And direct messaging is still under-utilized so it's a quick win right now.
Note: If someone isn't following you on Instagram, your message will show up as a notification at the top of their inbox. The person receiving the message can click the notification and choose to allow messages from that person or not allow. So as long as they allow the message to come through, you're good! And either way, they should see that notification right at the top of their inbox.
How to Identify Influencers to Work with
Mei looks for as large a following as possible, but she also looks for great engagement. Her general rule of thumb is to have 5% or more engagement on each posts. For example, an account with 1,000 followers should have 50-100 likes or comments with each post.
If you have a list of hashtags that you know your customers are using, you can see the top 9 most popular posts for that hashtag. Chances are one of the top 9 photos was posted by an Influencer in your niche.
Finding the right Influencers involves some elbow grease. As you explore Instagram and interact, you'll run across Influencers and you can write them down and keep track of them on a spreadsheet.
Cheri also looks for accounts that have high engagement. She searches for relevant hashtags as well and keeps a running list of her favorites.
How to Weigh Follower Counts versus Engagement
Although 5% engagement might be hard to find, it tends to be way more worth it for Mei to find those accounts to work with versus just finding the biggest possible account.
Cheri agrees that she tends to get better results with smaller accounts because they tend to be more engaged.
In addition, larger accounts often require a cash payment of $250 or more, versus a smaller account who may accept a free product or a gift card.
When Cheri first started working with influencers she would provide the photos or they'd take one off of her website, but she's seen way better results with lifestyle shots - even if the influencer just shares the package they received. Natural shots right from the influencer perform much better than a generic photo from your site.
Mei says it's not impossible for influencers to use photos from your website. A lot of larger influencers charge more if you use their photo and less if they take their own photo (they got a free product from you.)
How much does it cost to work with an Influencer?
Cheri says that larger accounts look for a cash incentive. She's found prices anywhere from $10 up to $5,000 for a post that would stay up for 5 hours. (That account had about 300,000 followers at the time!)
Cheri always starts by offering free product of the influencer's choice, then she'll offer a $50 or $100 gift card. But many influencers just want cash. Cheri has found prices to be about $50-100 per 50,000 followers.
If a private account has representation, they may have rates posted. But Cheri has found that everything is negotiable.
Mei also stressed the importance of negotiating: "Just because we're women doesn't mean we have to always play by the rules," she says.
Mei always chooses to send free product first. Next, she chooses to pay for features where it's anywhere from $40 to $200 with discounts for multiple features, and extra fees to also do a giveaway or keep the post up forever. At $300 you're normally getting a "package" of posts and benefits.
Another option: Working with feature accounts. These are accounts on Instagram that only post photos from other people's accounts within a very specific niche (such as planners, handmade items, skateboarding, you name it!). You don't know who they are or where they're located, but some of them get great engagement with their followers within their niche.
Tips for Streamlining on Instagram
Mei hired a Virtual Assistant who re-posts much of Mei's old content on Instagram. This system works because Mei's time is limited, but her engagement has gone down a bit as a result. She used to get over 1,000 likes with just 10,000 followers because she was posting fresh content and it was posted by her - the maker. Mei now gets 600-900 likes on a photo, and her account has over 20,000 followers. Mei tends to push posts from Facebook over to Instagram.
Hiring a virtual assistant for her main business Instagram account also has another added benefit: Mei gets to avoid the drama that can happen there. (Apparently heated words were exchanged over a bacon necklace...made with clay, not real bacon.)
Cheri pushes posts from Instagram over to Facebook to populate her page more often. Facebook and Instagram work well together because you can use a square photo on each so you don't have to edit and re-size.
In general, both ladies (along with us!) found that the followers they have on Instagram aren't usually the same people who follow them on Facebook. You're reaching a new audience when you grow on Instagram.
How to Track Sales from Instagram
Cheri uses a bit.ly link in her profile that is linked to a landing page on her site. Her goal with Instagram is not necessarily to get direct sales but to gain email subscribers. Cheri knows the lifetime value of a subscriber so she can track how well sponsored campaigns are working based on how many new subscribers she may get on a certain day when a campaign is live.
Cheri also recommends doing a featured post in combination with a giveaway because your engagement will be much higher. In addition, you can offer a custom discount code to that community and this will allow you to track the success of that feature based on how many customers use that code.
Mei recently moved over to Shopify, but before that she used a self-hosted e-commerce platform. She asked each customer how they found out about her. The majority of her customers came from Facebook, with Instagram coming in at a close second. So even though Mei couldn't directly track Instagram sales she could easily tell that many of her customers were coming from the platform.
Mei reminded us that there are many marketing strategies that you can't directly track - for example, giving out business cards at a craft show or a friend telling another friend about your shop.
There's another barrier to marketing on Instagram - you only have one clickable link which is in your profile. However, Mei says you can counter this resistance by selling directly on the platform. You can ask followers to comment with their Paypal email address to purchase an item and be invoiced via Paypal. Beth Newitt has successfully done this as well.
Spreesy.com allows you to bring your entire shop over to your Instagram profile, and you can do this on Facebook as well. It counters the barrier of only having one link to click on.
Link your Spreesy account to Instagram or Facebook and when someone comments with their paypal email address to purchase the product, you don't have to manually send them an invoice, spreesy just automatically sends the invoice to them and tells them how to check out. You're meeting people where they're already hanging out and not forcing them to leave a social media platform.
With Spreesy, people can subscribe to any new product that you're adding to your Instagram profile as well so they'll be notified when you come out with new items.
Check out Jill from Rustic Cuff's interview where she shared how she sends her products to Influencers for publicity and exposure.
A few Instagram accounts who feature handmade products that might be worth checking out. For many of these accounts, a feature that stays up forever costs just $25.
Find Cheri and Mei online!
Cheri Tracy: Orglamix.com
@Orglamix on Instagram
Mei Pak: CreativeHiveCo.com
Direct download: Episode2011520Instagram20and20Influencers_mixdown20final.mp3
Category:general -- posted at: 3:30am EDT
Thu, 22 October 2015
When you purchase a computer or camera for your business, are you unsure about how much you can deduct as a business expense since you use them for personal reasons as well? The answer to that tax question awaits you below!
In Episode 107 we talked about Assets and Depreciation, and that information was the background information needed to help you understand this episode a little better. Here's the cliff notes version. An asset is something that provides benefit to your business for more than a year. Computers and Cameras are assets, but paper and ink are not.
Normally when you purchase an asset, the IRS wants you to depreciate it, which means you record the expense over the period of time that you will be using the asset instead of recording the entire expense in the year you purchased it. Splitting up the cost over several years is called depreciation.
Computers and Cameras
When it comes to some smaller "entertainment use" equipment, the IRS has some different rules. These items - such as computers, cameras, and video recording equipment - are called "listed property" by the IRS.
Business Use vs. Personal Use
The first thing you need to do is determine what percentage of the time you are using that equipment for business versus personal use.
Let's take the example of a camera that you purchase for your business. You might use the camera for personal reasons such as taking pictures of your kids, but you also use that camera for product and blog photography. The IRS wants you to create a log and track how much you use your camera for your business and how much you use the camera for personal purposes.
This splitting up of business and personal use for purchases was also discussed in our episode on Business Expenses for Bloggers, specifically materials and supplies.
As an example, let's say we purchase a camera for $2,000 and use it 75% of the time for the business. Normally you would take 75% of the cost of the camera, $1,500, and depreciate that amount over the next several years. The $500 is personal so that is not a tax deduction for your business.
But, if you use the camera over 50% of the time for your business, and in our example we did, the IRS has a rule where they will let you take that full business expense portion as a tax deduction in the year you purchased the item, instead of depreciating the cost over several years. They call this a Section 179 Deduction. All this basically means is that you can expense the business portion of the cost of the equipment all in one year, instead of spreading it out over several years through depreciation.
What if you don't use the equipment over 50% of the time for your business? You can still depreciate the business portion, but you can't elect the Section 179 Deduction to take the expense all in the first year.
If you have a computer that you keep exclusively in your IRS qualified home office, then 100% of that computer cost can be taken as a Section 179 deduction. You can deduct the full cost of the computer as a business expense in the year you buy it, instead of depreciating it over the next 5-7 years.
A second example: Let's say you buy a laptop for your business, but because it's mobile, you don't use it exclusively in your home office. We'll say it cost $1,000, you keep a log, and you use it 90% of the time for business. Because you use it over 50% of the time for business, you can elect the Section 179 deduction at the end of the year. So 90% of the cost, or $900, can be deducted as a business expense on your tax return in the year you purchased the computer, instead of depreciating it and spreading out the cost over the next few years. The 10%, $100, is just a personal expense, and is never a business tax deduction.
Electing Section 179 deductions takes place on Form 4562. There is a maximum Section 179 deduction, but the maximum was $500,000 for 2014!
Don't get worried about all of these rules and forms. If you use tax software (such as H&R Block or Turbo Tax) or use a tax professional, they will know what questions to ask you and what forms to fill out.
What you need to know is that when you buy equipment for your business, you need to determine how much you are using it for business purposes, and how much for personal reasons, so that you can take advantage of the tax rules.
I bet most of you are buying equipment, using it mostly for business, and not taking a deduction on your business taxes. You are just eating that cost with your personal funds. Don't do that now that you know you have a legitimate tax deduction!
Converting to Business Use
Let's say you bought an asset before you started your business. You bought a $2,000 camera in 2014, but you didn't start your business until 2015. Keep track of how you now use it for business and personal use. The portion that you use for business, you can depreciate based upon the item's current fair market value (fmv). So if the camera is now worth $1,000 in 2015, but you use it 75% of the time for your business, that's $750 you can depreciate over the next several years and get that tax deduction.
It will take time to track business and personal use of your equipment, but it is well worth it to legitimately save some money on your taxes.
What do you think? Do you have any new deductions you can claim on your taxes this year?
In accordance with IRS Circular 230, we advise you that any discussion of a federal tax issue in this communication is not intended to be used, and cannot be used by any recipient for the purpose of avoiding penalties that may be imposed on the recipient under US federal tax laws.
Tue, 20 October 2015
Do you have a hobby that you'd love to turn into a business? Listening to Addi may be just the boost you need to get going! Addi had a hobby blog for several years, but one day, she decided it was time to get serious. Did she ever! In four months' time, Addi figured out how to boost her blog traffic from 10,000 pageviews per month to 100,000 pageviews a month. Now she averages over 500,000 pageviews each month.
On the Podcast
00:49 - How an Outlet Turned into an Income
Note: We use affiliate links in this post. This means, at no additional cost to you, we earn a commission if you decide to purchase a product. Affiliate links are noted with an asterisk *
Press Play on the Podcast Player Below to Hear Addi's Full Story
How an Outlet Turned into an Income
Addi began her first blog, Frugal Fanatic, about three years ago. It started as an outlet for her as a new mom who wanted to share about saving money and motherhood. After two years of blogging just for fun, Addi got more serious about blogging and decided to turn it into a real business. She soon found she loved blogging and had a passion for it. Not long after, Simply Blogging Along, her second web site, was born!
Simply Blogging Along... or is it?
Once Addi grew Frugal Fanatic into a successful blog, she received a lot of questions about blogging and business. Although she wanted to share what life was like as a mom blogger and small business owner, she knew her core readership at Frugal Fanatic likely wouldn't be a fan of her new focus. They were used to content about motherhood and money saving tips.
So Addi decided to start a new blog where she could share about blogging and business and Simply Blogging Along was born.
We love the title of Addi's new blog, because she shares blogging tips that are honest, and genuine. She's simply blogging along - growing as she goes. But in other ways, blogging isn't simple at all! Addi confessed that she has found it very tough to run two blogs at once. She forgot about a lot of the little things involved in setting up a new site such as social media and networking with bloggers.
We were curious about whether Addi's past experience in successfully growing a blog made growing her new site a piece of cake, or whether it still felt like she was starting from scratch.
It's not as though Addi's entire audience at Frugal Fanatic came right over. She did grab a core group of readers, but she still has to work hard to gain new visitors to her site. The other challenge that any site owner will face: getting to know your new audience and serving them well. In order to grow her site, Addi knows she needs to provide her audience with the content they're looking for and not just write whatever she feels like writing that day.
Isn't that great advice for all of us? Whether you're brand new or years into online business, you have to get to know your audience well and serve them well. And... if you're thinking about starting a brand new site with a brand new focus, just remember, it will still take a lot of time and work to make it successful.
Splitting Time Between Two Blogs
Although building Simply Blogging Along is new and exciting Addi has to remember that Frugal Fanatic is her “bread and butter” so she can't ignore it. Balancing her time between both sites has been a struggle but Addi sticks to a schedule every week that helps her stay on track.
Addi has time blocks to work in the morning, during nap time, and in the evening. Addie always uses her evening time block to write (she's trained her brain to do this!) She creates a “must do” task list daily and uses this to guide each time block.
75% of Addi's time is spent on Frugal Fanatic and only about 25% on Simply Blogging Along. This is because her new blog is more relaxed, doesn’t have ads yet, and is growing only as quickly as she allows it.
Sticking to a schedule has been the most important way that Addi balances both blogs.
Posting Frequency + Blog Traffic
Addi used to post 6-7 articles per week on Frugal Fanatic but has cut that down to focus on writing higher-quality posts. Now Addi posts about 3-4 times per week on Frugal Fanatic.
After Addi decided to get serious about blogging, she was able to grow her site from 10,000 pageviews to 100,000 pageviews in just four months!
18 months later Addi now averages about 500,000 page views each month. She attributes her fast growth to using Pinterest to promote her blog. By putting in the time and having a solid plan, she has grown her blog readership and believes others can too.
Addi attributes a lot of her growth in traffic to Pinterest. Here's what she does.
Addi has over 31,000 followers and 89 boards for Frugal Fanatic!
This is Real Life, Folks!
Although Simply Blogging Along is more focused on blogging and how to make money online, Addi found that it was important for her to include her “mom” life here as well.
When you're a mom, growing a business from home just isn't quite the same. There's a huge balancing act at play, and Addi knows that struggle firsthand.
Addi wants to help her audience with their home lives, their parenting, and the entire balancing act of being a mompreneur. And, she wants to acknowledge that although it's tough to be a work-at-home mom, it's very possible! So Addi shares real life. She shows others how she balances running her household, being a mom, and running her business all on Simply Blogging Along.
Addi says her kids even help her with her blogs on occasion, and her oldest son now tells people that he's going to work from home when he grows up!
The Number One Tip for Bloggers
Write amazing content! Write something that your readers will not only relate to, but will be compelled to share.
Provide value by solving your reader's everyday problems.
You may be able to entice someone to click over from Pinterest by simply using a great photo and a catchy headline, but they'll leave just as fast as they came if you don't have solid content to with which to back that pin up.
If you want to build a loyal readership and grow your email list, focus on posting less often but posting quality work.
Launching an E-Book
In June of 2015, Addi launched her book, Breakthrough: The Complete Guide to Growing your Platform and Blogging your Way to a Full-Time Income* She shared several things she learned along the way.
Why you Should Sell an Audiobook
We don't usually tell you "you should do this!" We tend to be more balanced in our approach. But in this case... I really think most of you reading this page should sell an audiobook! Listen and read on to figure out why.
Addi has made the most sales by selling her book on her own site and through affiliates she works with. On Amazon, Addi's e-book doesn't sell all that well, and she thinks she may need to learn a little more about Amazon SEO.
But here's the kicker: Addi has sold about 200 copies of her Audiobook, and that version has only been out for 6 weeks (as of our interview date).
At first, Addi never considered selling an audio version of her book, but after getting numerous requests, she's so happy she took the time to create it. She has sold about 200 Audiobooks in just 6 weeks of having it live on Audible* with very little promotion.
Addi found a woman on ACX Exchange and paid her $20 an hour to record her book which was 3.8 hours in length. So in all, Addi paid just under $80 to create the Audible version of her e-book! That included the editing done by her narrator to format the book for Audible.
Here's Why Selling Audiobooks Might be a Great Idea:
Using Woo Commerce
Addie sells her e-books and products by using the Woo Commerce Plug-in on both of her sites.
Woo Commerce also has a landing page template that has lots of short code options so Addi can customize it. It looks the same as Addi's old landing page that she paid for.
Shoppers can land on the landing page, or they can click and go straight to the cart. Addi has been testing both options to see which converts better. Overall, it seems like her customers like the shorter option better!
Then...we all proceeded to compare and contrast long versus short landing pages, the psychology of selling, and $1,000 courses :) It was an interesting conversation!
Addi's Embarrassing Mom Moment
Addi's embarassing mom moment is something we've all experienced! Oh boy... kids will be kids! Tune in to hear the story!
Find Addi Online!
Sat, 17 October 2015
This past week, Sarah and I tried out our first Blab, and it was so much fun! Blab is similar to Periscope in that it's a live video streaming platform, but the fun thing about Blab is that you can have up to four people streaming at one time. So... it's kind of like a Google Hangout on steroids!
You can follow people on Blab, invite others to be on the video with you, and viewers can chat live and ask questions.
We plan to Blab each week with a different brilliant business mom to answer questions and brainstorm how she can grow her business. Head right here to follow us on Blab!
Press Play on the player below to watch and listen to our first Blab, and we can't wait to see you live in the chat the next time around!
Ideas for Podcast Growth
Resources Mentioned in the Blab:
(Apparently the ideal length is 22 minutes, ideal format is weekly, and best day to air your episode is Tuesday.)
(We love the way she has kids call in and talk about their favorite books.)
Direct download: Episode2011220Blab-20How20to20grow20a20podcast_mixdown20final.mp3
Category:general -- posted at: 2:06am EDT
Thu, 15 October 2015
This week, we're trying something new here at Brilliant Business Moms! Sometimes, after the podcast interview officially "wraps" this is when we all breathe a sigh of relief, and we just start chatting freely!
We had such a great chat with Erica Richards of Rainey's Closet that we wanted you to hear what happens "after the episode".
On the Podcast we Chat About:
Tue, 13 October 2015
People will pay for convenience. If you add saving money to that convenience equation, then you've struck gold in your business! Erica offers both convenience and savings to customers of Rainey's Closet - an online rental company for kids' clothing.
Not every family will splurge for a full photo shoot complete with fancy outfits, but the ones who do know that pairing the right dresses and accessories can be a challenge. Add to that the incredible cost of those dresses and accessories, and Rainey's Closet is there to fill in the gaps.
Erica has such a unique business model - complete with its own challenges. But I know you'll find inspiration when you listen to her story. Whether you're reminded to head back to the trenches and spend more time with your target market, or you discover a brand new way to solve someone's problem, you won't want to miss hearing from Erica and what she's doing at Rainey's Closet.
On the Podcast
01:41 - How the Quest for Perfect Photos Led to the Perfect Business!
Press Play on the Podcast Player Below to Hear from Mamapreneur Erica Richards
How the Quest for Perfect Photos Led to the Perfect Business!
Erica Richards worked in marketing and public relations before deciding to be a stay at home mom once her daughter was born.
When Rainey was about 3 years old, Erica began receiving offers for various jobs but nothing seemed worth going back to work. She began looking for a creative outlet and way to use her talents.
Erica's light bulb moment came after a frustrating experience of spending a lot of time and money preparing her family for a photo session. She wanted gorgeous photos, and she searched and searched for the perfect outfits for her daughter. She ended up spending a lot of money on that outfit and accessories, and of course, after the shoot it just sat in Rainey's closet. It felt a bit wasteful.
Erica realized that finding and coordinating great outfits for children - particularly for their family photos - was a problem lots of moms were having. She came up with the solution of Rainey’s Closet. Erica had used “Rent the Runway” in the past for special occasions for herself, and she thought, "why couldn't this model work for kids' clothing as well?"
Rainey’s Closet started as a part-time side hustle and quickly grew to a successful full time business.
First Steps to Building a Business and a Website
In October of 2014, Erica began buying her inventory. She found that fall was a perfect time to start buying clothing and accessories for her business as there were many sales, and many moms were selling their clothing after completing their own photo shoots.
Erica then created a Facebook page, bought her domain name and set up her website. Intially, Erica got quotes for a custom website, but discovered that that option would be extremely expensive. So she and her web developer got creative. They found a great program to use as the base for their site. It was designed for clothing rental companies, so it had the right tools for inventory management and scheduling an order built right in. From there they customized the overall look, and Erica began adding inventory.
Erica admits that it took weeks and weeks of late nights getting photographs of all her inventory and adding it to the site. This has been the most time consuming and labor intensive part of her business, but it has certainly been worth it!
Partnerships with Vendors
Erica buys a lot of kids' clothing and accessories from Etsy shops and small boutiques. For this reason, she purchases the majority of her items at full price and pays up front for them.
For many handmade items, there's simply no discount on the amount of time it takes a Mamapreneur to make the item. And because the items are handmade, Erica also needs to give the vendors a month or more of lead time for an order of, let's say, 15 flower crowns, for example.
However, there are a few companies that offer wholesale prices to Erica, such as Tutu du Monde.
How to Find the Best Items
Erica finds her vendors by looking at trends in kids' photography and fashion and watching what other photographers are using. Pinterest, Instagram, and Facebook are all great places to find out what's trending, what moms are talking about and seeking out when it comes to fashion, and what everyone is drooling over!
The Initial Investment
Erica has invested tens of thousands of dollars into her inventory over the past year and far underestimated the investment that would be required! But once she and her husband realized that the business would work and there was enough demand for their service, they felt confident enough to keep buying more items in order to keep growing.
As long as Erica purchases at a rate that stays consistent with demand, her business remains profitable. Since so much of her money is tied up with physical inventory, she feels confident that if necessary, she would be able to recover her money and liquidate easily. Thankfully, this isn't necessary and the business is doing great!
Having a large inventory in the clothing rental business is essential to attracting and keeping customers on her site. It is important that a customer is able to find the size, style, and availability they need.
The Rental Process
Clothing rental might seem like a foreign concept to some customers! We asked Erica to explain how the process works.
Customers browse the site to find what they want then choose the appropriate size and the dates needed. Rentals are available for either 4 or 8 days. Customers pay the rental price and a $6 flat shipping fee that includes a prepaid return shipping label for convenience. The shipping stays at $6 no matter how many items the customer orders.
For example, if you have an event or a photoshoot planned for October 10th, you would choose October 8th for your delivery date. So then you'll have two days to try on outfits and pair accessories, use it on the 3rd day, and return your items on the 4th day.
Erica does not charge customers for normal wear and tear, such as a bit of sand or one sequin falling off. But she does have a detailed terms and conditions page that outlines a 200% charge for an item that is not returned or is damaged beyond repair.
The Best Part of Erica's Job!
In addition to being a brilliant business woman, Erica has the added benefit of being a stylist in her job as well. She often gets questions from customers on which accessories will pair well with certain dresses or outfits. She gets to offer exceptional customer service by providing great recommendations, and, let's be honest, it's pretty fun to play stylist too!
Erica also gets to style items for her own photo shoots and social media as well.
Getting Great Photos
Erica has dozens of gorgeous photos on her site that really showcase how her clothing can be used. So.... does Erica have to schedule her own photo shoots each month to get all of these incredible photos?
Nope, they're actually a mix! Erica takes some of the product photos herself or with a photographer she hires, but some of her larger vendors like TuTu du Monde and Nelly Stella create campaigns specifically for their sellers to use.
At the same time, customers tend to prefer the less “styled” photos so they can see the items on a “real” child and see how the item will fit and get a sense of its true colors.
How to Determine a Price
For her clothing, Erica has a general pricing formula that she uses for her rentals. She takes into account how many times she will be able to rent each item before it is no longer usable. She needs to make her investment back on the product after "X" number of rentals - a number she's comfortable with that allows for a reasonable customer price, and a reasonable profit for her.
Overall, renting from the site costs a mom about 25% of what a full outfit would cost if purchased outright. Renting also prevents a lot of waste and buying items that will only be worn once.
For example, a Tutu du Monde dress can cost $160-$230, add a cape for $100, a flower crown for $50, that adds up to a minimum of $310. But you can rent all of this from Rainey's Closet for about $60. So you've just saved yourself $250, or just 19% of what you would pay at full retail price.
This dress, shrug, and headdress would cost close to $400 at retail. Or you can rent all three from Rainey's Closet for $52. That's an 87% discount. Photo by B Couture Photography.
Where do Customers Come from?
A lot of Erica’s customers come from either photographers referring moms or photographers themselves. Photographers don't want to shoot the same-old, same-old. They know that a styled shoot will turn out better and showcase their work. On the other hand, they don't want to tell a parent that they need to spend hundreds of dollars in addition to their photography fees! Rainey's Closet offers the perfect solution.
About 50% of Erica's business comes directly from photographers who rent out the items for families to offer them exceptional customer service and guarantee great photos. The rest of her customers are moms. Customers find Erica on Facebook, Instagram, Pinterest, and also when searching for specific brands. Erica has some styles that are hard to find because they're from last year and the brand no longer sells them. Moms who are looking for that "one perfect dress" can often find it on Erica's site.
Knowing your Target Market
When Rainey was about 2 Erica began getting involved with the “closet mom” world. She finds popular brands by watching what moms are talking about on social media. Moms also start Buy, Sell, Trade Facebook groups around certain popular brands. There are so many boutique brands who only make a limited quantity of each item, so moms go hunting all over the place looking for them or offering to buy them from other moms for hundreds of dollars!
Erica also looks at what photographers are using in their photo shoots. She has done a great job of immersing herself in the world of her target market as a way of staying current with what they are looking for.
Erica began joining Facebook groups and interacting on brand pages so that when moms were looking for something that was hard to find she could send them to her page. She quickly realized that this is not allowed in most Facebook groups, so she has had to change her strategy.
Now, Erica has her own private Facebook group for marketing and selling her “older” items. It's a great way to get rid of inventory she doesn't need and attract her ideal customers who are able to use her group to buy and sell items as well. Erica's group has over 1,000 members, and she knows it will continue to grow.
I love that Erica didn't let one marketing set-back get her down. She just decided to create the perfect marketing tool for herself instead!
Erica also counts on word of mouth marketing from her customers. They'll often comment on her Facebook posts and tag their friends saying, "this is the business I was telling you about!" Erica always goes the extra mile for her customers. For example, if an item suddenly becomes unavailable because it was damaged, she'll quickly go pay full retail price for that item to keep her customer happy and give them what they want.
Making Smart Business Decisions
Since Erica orders in the spring for her fall season, she has found that predicting what will be popular is quite difficult. Because of this, Erica often tests the market first by ordering just one item. If that dress or accessory becomes popular, she then goes back and orders more.
There's no better way to figure out what your target customer wants than to simply put something out there and see how they respond! Armed with information and sales, Erica can make smart business decisions.
Erica’s “Secret Weapon”
Three times in the past year Erica has run into an issue with a customer not returning an item. While this can be extremely detrimental and devastating to small business owners Erica’s husband is a lawyer. When an issue comes up with a customer Erica is able to have him send a legal letter out and begin the legal process with no high costs and hassle. So far she has recovered the items thanks to her “secret weapon”.
Erica's Funny Mom Moment
You'll have to tune in to hear how Erica's strong-willed little girl Rainey has leveraged that will into a way to make an income at just four years old. We were cracking up!
Find Erica Online!
Tue, 6 October 2015
What if you could expand your business by putting yourself in a box and reaching more people? It may sound like science fiction, but in many ways, Lisa has found a way to do this very thing! It comes as no surprise that a professional organizer and productivity nut would find many unique ways to reach more people without spending more time to do it.
On the Podcast
00:54 - 9 Businesses with One Thing in Common
Press play on the podcast player below to hear Lisa's best organization tips and to learn how she helps more people in less time with her business, Organize365.
9 Businesses with One Thing in Common
Lisa comes from a long line of entrepreneurs. Her great-grandmother went to college well before that was the norm for women and ultimately owned her own floral shop! Her dad's side of the family had a similar bent towards owning their own businesses.
There was never any question that Lisa would go to college, but she knew that in the end she'd be an entrepreneur. Lisa viewed college not as a way to get her ideal job (she could create that all on her own!) but to get her MRS. degree. Yep, she knows it's not politically correct and confesses that she should have come of age in the fifties!
Lisa was a teacher before she had kids, but she also did direct sales. Once her children came along, she quit her teaching but continued on with direct sales. She then added tutoring, cleaning houses, and scrapbooking to her list of entrepreneurial endeavors! Lisa's business ventures got so crazy that at one point she had 9 schedule C's on her tax return! (My head is spinning just thinking about it!)
Finally, in 2012 after a really rough time period for her immediate and extended family, Lisa sat down to think about what she really wanted to do. She knew she was great at sales, but the question was, what did she want to sell? Where did her gifts and passions lie?
Lisa found the common thread in all of her business pursuits: organization! She got her teaching job because her co-teacher was so disorganized they needed Lisa to come in and organize the classroom. She then went on to organize the whole school!
Lisa's scrapbooking business was so productive for her and her clients because she helped them get organized first.
Lisa even wrote an e-book on direct sales called: How to Organize the Business of Direct Sales.
She had it! Lisa starting a professional organizing business and launched her website Organize365 in January of 2012.
Becoming a Pro
Lisa knew she was good at teaching and coaching, so she used that skill to create great content on her blog that would help others.
Even though she was passionate about helping others get organized, Lisa still hadn't realized she was "expert enough" to call herself a professional and get clients. Instead, she was making money by doing direct sales and hosting parties for organizational supplies.
Lisa's house parties were huge, and she couldn't figure out why so many people wanted to attend just to buy some plastic bins! Her friend said, "Everyone wants to know what a professional organizer has to say!"
It finally dawned on Lisa that she was a pro at this, and she'd better start acting like it. In April of 2012 Lisa started doing professional organizing full-time and her business was profitable right away.
In January of 2013, Lisa added her first team member to her in-home organizing team. In the Fall of 2013, she hired another person to work in her business, and she's hired several other team members since then.
There are a Million Ways to Monetize!
It's easy to look at other bloggers and think that replicating their business model will work for us. This isn't always the case! We each have different strengths, different tools at our disposal, and a different audience we're serving.
Lisa quickly grew her in-person organization business, but she wanted to monetize her blog too. She saw lots of bloggers making money from couponing, advertising, and working with brands.
She tried these methods a bit, but they didn't seem to work well for Lisa's audience or her skill set. She realized that she's better as a teacher, so she created more e-books to sell.
In 2012, Lisa wrote 10 steps to organize paper. Next, she wrote an e-book about her Sunday basket. Then Lisa got the rights back to her first published book called the ABC's of the Bible.
Continuing with her model of teaching, Lisa added a podcast just over a year ago.
And finally, Lisa maintained her skill at direct sales, but she took a different, more modern approach. Rather than host home parties and assembling teams of sales people, Lisa used these great companies as affiliates on her blog.
Lisa in a Box!
If you're a great teacher or coach, I bet some of your clients have wished they could package you up in a box, order you online, and have you right there with them! Well, Lisa has done just that with her first physical product!
It's called Get All Your Papers Organized in One Weekend.
Lisa combines the knowledge you need to get started, the motivation in the form of her walking you through each step via audio CD, and the tools needed shipped right to you. There are quick-start guides so you don't have to read the full e-books if you don't want to, 3 sets of slash pockets and 2 ONE clips (both of these are a big part of Lisa's organizational system, so you don't have to hunt them down at the store), Sunday planning printables, and Organize 365 printables.
Could you come up with a way to help your long-distance customers by packaging yourself in a box? I bet you could!
3 Keys to Lisa's Success
Lisa points to 3 key strategies that help her grow her business and keep it profitable.
(Lisa's strategy for managing her time and new business ventures sounds so similar to Rachel Coley's. Sarah and I both agree that it's a great approach, and we use it for our business too! We can't do it all.. as much as we'd like to!)
Think Outside the Box with Outsourcing
Lisa highly recommends the book, Virtual Freedom by Chris Ducker. In the book, Chris tells readers to make 3 lists.
Lisa is a productivity nut! She wants to squeeze an extra task out of the hour and an extra minute out of every hour!
Lisa says that mompreneurs often miss important things they can outsource that would give them more time for their business. She has a list of 10 household tasks you can outsource.
You might feel guilty about this at first, but you have to think outside the box. If you outsource cleaning your house for $60-120 a week, you'd save yourself 5 hours a week of work. So Lisa looks at it this way: can she make at least $120 in that 5 hours of extra time? The answer for her is an absolute yes because she can work with a home organization client for $300 during that time.
Ask yourself, "How much does it cost me to do that task, and how much does it cost someone else to do that task?"
Another creative outsourcing solution:
Lisa says, "don't outsource your parenting," but she does recommend getting help with the kids when they're little. Lisa used to hire a nanny on Wednesdays from 8 AM to 6 PM. Lisa was able to get 10 hours of productive, quiet work time for just $120. That was totally worth it! And in 10 hours of dedicated time, Lisa was able to plow through a ton of work versus working every naptime for 1.5 hours each day and feeling like you're not getting anywhere. If you don't have any funds for a sitter, consider swapping with a friend. You take her kids one day a week, and she takes yours on another. Then, you both get dedicated work time, and your kids have fun with their friends!
How to make the most of your work time:
Lisa recommends creating a work basket. As you think of tasks to do for your business, write them down and put them in your work basket. If you think of something to tell your business partner, just write it down and put it in the basket. Emails you have to respond to? Put them in the work basket! Then, when you've got your dedicated chunk of time, you know just what to tackle without getting sidetracked or distracted. You can plow through those little to-do's much faster than you realize when they're all in one place waiting for you.
Validation as Mamapreneurs
Another important mental aspect of having a dedicated time to work is that it gives your job some validation. It's earned a place on your calendar. You've made room for it. It's not just a casual gig anymore.
Sarah and I had our own esoteric discussion here about validation as Mamapreneurs. When Sarah filled out the paperwork for her daughter's orthodontist appointment, she put homemaker as her occupation. But she thought to herself today, "I should put self-employed!"
I agree, and I laughed and confessed that I've put "self-employed" on every bit of paperwork I get the moment we decided to launch our podcast!
It often takes quite a while (and maybe it will never happen!) for others to recognize your home business as valid, but that doesn't mean you shouldn't recognize it as such. (It's valid, brilliant business mom! We believe in you!)
Organization for Mamapreneurs
Lisa says it's so important for Mamapreneurs to write down their biggest goal for the week, and then no more than 3 top goals for each day for the home and for their business. She's created a free printable for you to try to organize those top tasks as well as get your week organized each Sunday!
When you start planning your top goals, you'll realize that email and social media don't often make the list, but without a plan, those tasks easily creep into the first place spot each day.
Lisa also blocks off one work day each week to spend 6-8 hours on something that will grow her business to another level. So, for example, getting her products on Amazon, or creating new videos or a new product.
The Sunday Basket
Lisa's main method for organizing paper involves something called, "The Sunday Basket. It's a basket, box or bag that you keep on your kitchen counter. Every bit of paper that you receive, along with other simple to-do's goes into this basket. For example, a bill that doesn't need to be paid right that second, paperwork from the kids' school, an item to return to Walmart.
On Sunday after the kids are in bed, take out every single thing, touch it and ask, "can this wait until next Sunday or does it need to be done this week?" Everything that must be done that week should have a plan for action. In this way, all of your paperwork and to-do's are in one, manageable place, and you only tackle the things that need to be tackled, without forgetting anything along the way.
How Blogging Brings Clarity
Once you start blogging regularly, you'll quickly realize that it can clarify what you're good at and what your readers respond to.
Lisa quickly realized that she was constantly talking about organizing paperwork, and her audience really responded. A bonus of this is that Lisa ranks really high in Google for terms related to organizing paper because no one talks about it! People discuss going paperless or they simply pretend all that paper doesn't exist.
Lisa has dug deep when it comes to organizing paper. Here's what she recommends:
A Simple Method for Efficient Blogging
When Lisa started blogging in January of 2012, all she knew was that she needed to be consistent, she needed to have a niche, and she needed to create content.
She came up with the idea of a series in order to be consistent and help others get organized right along with her. The challenge is called: 40 Weeks, One Whole House.
Lisa divided her house into 40 zones, and she tackled a different zone each week. The next year, Lisa did the challenge with her readers again, but this time she hired a professional photographer to take better photos of her work. The year after that, Lisa did the 40-week challenge again but this time she added a podcast so her readers could hear her talking as though she was right there with them helping them organize their homes.
Sarah and I both LOVED this genius strategy of creating awesome, helpful content but just adding a bit more each year. Lisa says there are only so many ways you can organize a laundry room. So rather than write 16 fluffy blog posts on the topic, she writes one killer post that motivates her readers to take action.
Paying for Emails?
This year, Lisa decided to offer her 40-week challenge as an email auto-responder series as an added help for her readers. The problem was, she was using Mailchimp, and when she received new participants, they could start at week 1, but they couldn't skip ahead and join the whole group of challengers if they wanted to.
Because Infusionsoft is quite expensive, Lisa knew she had to justify this expense. She charges a one-time fee of $40 for the 40-week email series. Once you pay for the series, you'll get it forever until you unsubscribe.
Bloggers can Sell on Etsy too!
Lisa's not a handmade maven, but she does have a lot of digital products (and a physical one now too!) that she wanted to sell all in one place. Lisa decided to open an Etsy shop as the hub for her products.
If you're a blogger struggling to create a beautiful storefront for your products, consider opening an Etsy shop and linking right to it from your blog. It's so easy to get started, and Etsy makes the shopper experience a bit more user-friendly and streamlined than many of the cheaper apps you could use on your own site.
If you're a coach or expert in a given field, Etsy can be the perfect place to make more passive income. Lisa took all of her coaching and teaching knowledge and turned it into digital products. Not everyone can afford to use her as a coach, and not everyone lives close enough to have Lisa organize their home in person, but with digital products and Etsy, Lisa can serve her audience in more ways.
Lisa is always looking for ways to better serve her audience and make life easier for them. In the Spring of 2015, she decided to have an app developed for her 40-week organizing challenge.
Lisa paid $2,000 for the app and pays $50/month for hosting. Her app is available for both android and ios. Inside the app, Lisa's challengers can find the podcast and blog post related to that week's challenge without searching and without being distracted by all the other content on her site.
The coolest thing about this app? Lisa can send out push notifications whenever she wants! She can tell people, "hey it's week four, tell me if you're going to sell or donate your items this week!" Their app will show a red circle to let them know there's something new to see.
From the app, Lisa's challengers can link straight into her Facebook group and chat with each other. LIsa says, "it's so hard to organize your house by yourself. The community aspect really helps."
How's the app going? Lisa says she has about 3,000 users right now, and they're equally split between android and ios. She's still not sure if the app itself will be a revenue generator or not. At this point, she doesn't charge for it.
Right now, the app is just serving her current audience better and allowing her to connect with them in a new way. Lisa believes that all of the 3,000 users were people who were already on her email list or listening to her podcast. They haven't found her organically at this point, but the app has only been out for 6 weeks.
We can't wait to see how the app continues to grow and serve her audience! What a cool idea!
Lisa's Awesome Mom Moment
When your teenage son respects what you do, you know you're on the right track! Tune in to hear what Lisa's son told her recently!
Stay in Touch with Lisa!
Lisa has created a special page just for Brilliant Business Moms Listeners. It has the Sunday basket printables to help you organize your week and a checklist for anyone interested in becoming a professional organizer.
Other links mentioned in the episode: Our super secret freebies page for our email subscribers.