5 Ways to Make Sweet Music for Your Business

Corrections & Amplifications

If you’ve ever walked into a retail store and wondered why certain music is playing, there may, in fact, be some rhyme and reason to the selection.

Research has shown that consumers shop longer and make more purchases when they’re exposed to music. You can use music to make your store so appealing people may want to return -- even if they don’t have any buying plans. “We're often told that because of our atmosphere, customers come into our shop on days when they need a pick-me-up or to simply relax and recharge,” says Ann O'Shields, owner of The Nest Egg, a home-furnishings shop in Fairfax, Va. “We play upbeat music and enjoy seeing our customers singing along as they shop.”

Of course, it’s important to make the right musical match with your target customers. For instance, if you’re selling upscale products, the best choice is probably classical or jazz.

In addition, music can help engage employees. “Ongoing research shows that music can boost performance in the workplace by reducing employee stress and depression, improving employee retention and saving companies significant amount of money,” says Joe Lamond, president and CEO of the National Association of Music Merchants, a music industry nonprofit in Carlsbad, Calif.

Related: 5 Ways to Organize Your Office -- Stylishly

Here are five tips to help you choose the right kind of music for your customers and employees:

1. Keep the melody in the background. Consider music an ambience enhancer, not the focal point of the mood you’re trying to create. “Customers shouldn’t really be aware of the music you’re playing,” says Kurt Mortensen, an expert on motivational psychology and author of Persuasion IQ. (AMACOM, 2008) “The music shouldn’t be overpowering. Rather it should be merely an atmospheric presence.”

2. Strike a balance between soft and loud. You want to keep your store’s music at the right volume so you don’t risk driving them away. Some youth-oriented stores like Abercrombie & Fitch turn the volume quite high, but most stores should aim for moderation. “Loud music can be a major deterrent specifically if the retailer is targeting a demographic older than 25,” says Patricia Norins, a specialty retail expert and publisher of Gift Shop magazine. “A softly played, lively and upbeat tune can put shoppers at ease and create an environment that’s warm and fun.” On the other hand, don’t keep the music too low. “Our shoppers are mostly women and they’ll come in with a friend,” O’Shields says. “We know they don’t want people to hear their conversations so music is a great buffer.”

3. Don’t get too lively. Beat matters as much as volume. The faster the store music is, for example, the more people may feel stressed about how long they’ve been waiting on line. “To some extent, slower-paced music may make people feel calmer, and they may spend more time in your store,” says Lars Perner, assistant professor of clinical marketing at the University of Southern California’s Marshall School of Business.

Related: Apple Retail Stores and the 'Buying Brain'

4. Rethink your hold music. When you put customers on hold, the last thing you want to do is make them wait silently or force them to listen to cloying music. When Ian Aronovich, cofounder of GovernmentAuctions.org, a website about government auctions of merchandise, realized he was losing people after just two minutes spent on silent hold, he knew he had to find a way to keep them on the line longer. “We spent $230 on a hold-music machine and noticed an immediate change,” he says. “We discovered that people actually waited for us to get on the phone. Turns out, they really like the music we play.”

5. Make music a motivator. If your goal is to motivate and energize employees, you may get the best results by personalizing the music and using it to recognize their achievements. At Cardinal Web Solutions, an Internet marketing agency in Atlanta, each of the 10 employees has a designated favorite song. When one of them closes a sale or comes up with an innovative idea, that person’s song is played for all the staff to hear. “This idea came about organically,” says cofounder Alex Membrillo. “We’re all under 30, we all listen to a lot of music and we use music to break up the day. When someone comes up with something great, we play their song. It gets people up on their feet and, instead of reenergizing on Facebook, they dance around and, inevitably, more ideas come to the table.”

Related: Six Design Mistakes to Avoid in Your Store

 Corrections & Amplifications: An earlier version of this story misstated the name of the Fairfax, Va.-based home furnishings store. The correct business name is The Nest Egg. 

Did you find this story helpful? YesNo Thanks for making Entrepreneur better for everyone.

Lambeth Hochwald is a freelance journalist, whose stories have appeared in magazines such as Coastal Living, O The Oprah Magazine, Real Simple and Redbook. She is also an adjunct professor at NYU's Arthur L. Carter Journalism Institute.

View the original article here

How to Know Which State to Incorporate Your Business (Video)

Sorry, I could not read the content fromt this page.

View the original article here

Zipcar: Two Moms, a Business Idea and $68 in the Bank

Zipcar founders Chase Chase and Danielson Danielson, both 42, met when their children attended the same kindergarten class. At the time, Chase, a stay-at-home mom who had a master's degree in business administration, wanted the flexibility that came from having her own business, while Danielson was looking into how other countries reduced car trips for a Harvard energy-research project.

Danielson penciled out the business opportunity of car sharing, but didn’t have the business knowledge to run a company. Danielson’s husband suggested she connect with Chase.

In 1999, Chase began work on a business plan for a proposed start-up to offer a car-sharing service in Cambridge, Mass. Meanwhile, Danielson investigated the technology they would need and tapped contacts from her car-sales days. Their research showed that the car-sharing market was poised to explode.

Flexcar had applied for federal funding, which meant its application -- complete with budget figures -- was a public document. Danielson studied it, but disliked the government-subsidy model Flexcar used, which kept hourly rental rates too low at $3.50 per hour. While setting fees higher, her plan kept the average rental below the typical $45-a-day rate charged by traditional car-rental companies.

After a few months, Chase and Danielson were ready for some feedback. Chase approached her former mentor, Sloan School of Management Dean Glenn Urban. Danielson and Chase went to Urban’s office for a meeting.

Related: How Limos.com Became a Multimillion-Dollar Business

The pair expected Urban to poke holes in their model, or to say Americans wouldn’t take to car sharing. Instead, he told the women their idea was too big for Cambridge. Car sharing had huge potential. Chase recalls, “He said, ‘Your business plan is way too slow. You’ve got to sale it up by a factor of three.’ We were really shaken by it.”

Apparently, the car sharing business wouldn’t fulfill Chase’s dream of launching a small start-up she could fit around family responsibilities. For several days she “moped and mulled” around the house, wondering what to do.

The answer came from her 12-year-old daughter, who noticed mom’s quiet mood and cornered her in the kitchen one night. Chase explained how successful the company could be, and how car sharing might positively impact the planet, but that it would likely mean round-the-clock work hours for a while. Her daughter knew the family donated some of what it made to children’s causes.

“And she said, ‘Are you kidding? You could make more money and save so many children’s lives if this succeeded. You should absolutely do it,’” Chase recounts.

Finding the right name for the business involved considering dozens of potential names. But the website URLs for many early favorites were already taken.

Eventually the list narrowed to five, three of which were notable: Wheelshare, U.S. Carshare and Zipcar. Chase wrote the names on 3x5"cards and started taking consumer polls. Wherever she was --n coffee shops, in the bank line, at her children’s swim meets -- she would get out her cards. Then, saying nothing about the planned business idea, she’d ask people what thoughts each name evoked.

She learned fast. Wheelshare made people think of “wheelchair.” U.S. Carshare tested poorly, too. About 40% of consumers disliked the word “sharing.” Also, that URL was taken, with the site owner willing to sell only if he could receive a 10% stake in the company. Zipcar tested best. Chase also tested another small pack of 3x5 cards with five slogans. The winning tagline was: “Wheels when you want them.”

It was time to build the reservation and car security technology and to lease the initial cars, which meant time to raise money. Chase began talking up Zipcar to alumni, businesses, environmental groups, and her local networks. In February, she had one Sloan classmate and her husband over for dinner, hoping for a little advice.

Instead, the woman turned to her husband and said, “What do you think, honey? Should we invest $50,000 in Chase’s company?” They became Zipcar’s first funders. The funding was structured as a loan convertible to Zipcar equity once the company’s valuation was established in its first venture-capital fundraising round.

Related: Startup has Sky-High Aspirations for Roadable Aircraft

In all, Zipcar would raise $75,000 pre-launch, a figure Chase looks back on as laughably low. Technology costs were substantial and quickly consumed almost the entire amount. Their first engineer had to be persuaded to work for equity. As quick as money came in, it disappeared. As launch time neared, Chase found the company with just $68 in the bank.

There was an unpleasant surprise when it came to negotiating the car leases. After financing the first car with Chase’s home as collateral, the car leasing companies wanted a $7,000-per-car deposit for each additional vehicle, as this was a business start-up that could fail. Worse, U.S. insurers were uninterested in covering the start-up’s vehicles. Chase was beginning to doubt the company could launch on time when she had a breakthrough.

“I was at a cocktail party in Boston for the opening of Salesforce.com and ran into an angel investor I had been talking to,” Chase recalls. “He says, ‘How are things going?’ and I said, ‘I really need $25,000, and I need it by tomorrow.’” By 10 a.m., the angel sent Chase a check for $25,000. She was able to lease the two additional cars Zipcar needed for its launch.

As of May, the company had 700,000 members and a fleet of more than 9,000 vehicles.

This article is excerpted from How They Started: How 25 Good Ideas Became Great Companies by Carol Tice (Crimson Publishing, 2012).

Related: The Method Vision: Green Consumers Want to Have Fun, Too

Did you find this story helpful? YesNo Thanks for making Entrepreneur better for everyone.

View the original article here

Why Congress Shouldn't Fund Business Incubators (Opinion)

Sen. Sherrod Brown (D., Ohio) recently introduced the Business Incubator Promotion Act, which would provide federal grants for the formation and expansion of business incubators in areas with higher-than-average unemployment. But Congress should reject the bill because incubator supporters have failed to make a case for such funding. No one has identified a failure of private markets that could justify such grants to incubators, and no studies show that incubators create jobs.

Government intervention is needed when free markets fail to operate properly. Take, for example, basic research. Because many businesses cannot capture a large enough financial return from basic science, they do not invest enough to produce necessary technological advances. To remedy this problem, the government runs research laboratories and provides grants to academic researchers. Such research provides the basis for many useful technologies -- the Internet being a case in point -- that wouldn’t have been developed without government funding.

Before policymakers intervene in the incubator market, they need to ask what the “market failure” is that requires government support. The National Association of Business Incubators defines “business incubation [as] a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services."

Related: Lowering Taxes on Manufacturers Won't Help Small Business (Opinion)

So, Congress should demand evidence that the private sector fails to provide such support before committing taxpayer dollars to business incubators. But economic theory and common sense hold that private-sector investors should provide this support as long as the assistance accelerates the development of new companies. And if the private sector readily provides these services, then there is no market failure necessitating government intervention.

Advocates of business incubators argue that they create a lot of jobs. The NBIA, for instance, cites a study conducted for the Commerce Department’s Economic Development Administration by consulting firm Grant Thornton, which showed that for “every $10,000 in EDA funds invested in business incubation programs, an estimated 47 to 69 local jobs are generated.”

While these numbers sound good, they are fundamentally flawed. No study has ever shown that business incubators cause startups to create more jobs than they otherwise would have. To determine the job impact, researchers would have to conduct experiments, randomly placing some companies in incubators. If the companies in incubators employed more people than the other businesses, then the only difference between them -- being in the incubator -- must be the reason for the extra jobs.

Related: The JOBS Act Doesn't Mean You Should Run Out and Raise Equity

Instead, studies in support of business incubation estimate the total number of jobs created by multiplying incubator company employment by a standard multiplier that accounts for jobs created indirectly, as well. The flaw here lies in assuming that the incubator should get credit for producing new jobs. If advocates can’t show that being in the incubator causes companies to add employees, then they shouldn’t credit it for the job creation.

What about the incubator advocates’ argument that incubator companies have lower failure rates and higher employment than other companies? That would be true even if incubators do nothing to help entrepreneurs. Being a good entrepreneur means figuring out how to save money, and incubators save business owners money by providing rent and services at below-market prices. If talented entrepreneurs know how to stretch a dollar, then the better performance of incubator companies can be entirely explained by the more talented entrepreneurs (whose companies would be more likely to survive and hire anyway) entering incubators to take advantage of government largesse, with the incubator experience accounting for none of the difference.

Before Congress spends money on business incubators, it should first ask for convincing evidence that a market failure exist -- that the private sector fails to provide incubation services -- and for evidence that incubators cause companies to create jobs. Otherwise, there’s no justification for Sen. Brown’s bill.

Related: Should American Entrepreneurs Favor Tariffs? (Opinion)

Did you find this story helpful? YesNo Thanks for making Entrepreneur better for everyone.

Scott Shane is the A. Malachi Mixon III professor of entrepreneurial studies at Case Western Reserve University. His books include Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live by (Yale University Press, 2008) and Finding Fertile Ground: Identifying Extraordinary Opportunities for New Businesses (Pearson Prentice Hall, 2005).

View the original article here

3 Insurance Gambles That Put Your Business at Risk

Much like sunscreen, business insurance is one of those things you don’t realize how important it is until you’ve been burned: A lot of entrepreneurs don’t have it, and those who do, may not be fully covered.

While large corporations have staffers specifically trained to be sure the business is protected adequately, small business owners are often not aware of the risks their business faces.

“Smaller businesses tend not to get the right amount of coverage,” says Loretta Worters, vice president of the Insurance Information Institute, an industry trade group that aims to educate the public about insurance. “They will get too little or not the right coverage.”

Here, three of the most common mistakes to avoid when deciding on business insurance.

1. You view insurance as one-size-fits-all. Think again. There are four basic types of insurance that all businesses need, according to Worters. Property insurance protects the building that your business is housed in and the inventory, raw materials and computers that you own. Liability insurance protects you against lawsuits. Business vehicle insurance covers any autos owned by the business. Finally, in every state except Texas, a business with employees must have workers compensation insurance should an employee be injured on the job.

Related: Do You Need a Full-Timer, Contractor or Outsourced Help?

In addition, every industry has its own specific risks and your business may require a specialized policy. “You need to get an agent that understands your line of business,” says Worters, noting that you should talk to an agent before just signing up with one. Ask a local business group or association for a recommendation.

2. You think you're covered by another policy. “The biggest mistake [business owners] make is they assume they don’t need coverage,” says Ted Devine, CEO of Dallas-based Insureon, an online small-business insurance agency. He says business owners often falsely believe their company is covered by their client's policy or they're no longer at risk when a client leaves. Not true, according to Devine. A client can come back and sue you years after an event or transaction occurs, he warns.

And don't think your homeowner's policy will bail you out, either. Even if you have a home-based business, a homeowner's policy won't protect it should you get into any legal issues with employees or business litigation. Whether the homeowners’ policy will protect your business property in your home depends on the policy, says Devine.

Related: Does Your Home Business Need Insurance?

3. You think you're invincible. Worters says many businesses don’t even consider what is called either business income or business interruption insurance. If a natural disaster hits, for example, and your business closes, your revenue can be immediately shut off for an undetermined amount of time, and that can really threaten the life of your business.

Related: Top Seven Mistakes Business Owners Make Filing Insurance Claims

Readers, do you think business insurance is important for your company? Why or why not? 

Did you find this story helpful? YesNo Thanks for making Entrepreneur better for everyone.

Catherine Clifford is a staff writer at Entrepreneur.com. 

View the original article here

Here's a Cheap Business Idea: Ikea Hauling

Dustin and Jennifer Culton started an Ikea-hauling business.

If you have an entrepreneurial itch but aren’t ready to quit your job or cash out your IRA, you may find another low-risk, low-overhead way to start a business.

Dustin Culton and his wife, Jennifer, of Omaha, Neb., did just that about a year ago, when they started Omaha Modern, an “intensive” part-time venture that netted them roughly $30,000 in the first year.

The Cultons’ business is based on their 13-hour round trip drives to the nearest Ikea store, in Minneapolis, to pick up furniture, placemats, flatware and other items with umlaut-bearing names for customers in Omaha and other Midwest cities far from the Swedish big-box retailer.

“The odds of Nebraska seeing a store locate here in my lifetime are virtually zero,” Dennis Culton says, citing a population that’s apparently too sparse for the retailer. “However, Ikea products are very stylish and have a high demand, even in markets without easy access to purchase them.”

Customers ordering directly from Ikea’s website don’t have as vast a selection as those visiting stores, and shipping costs can run higher than the product itself, Culton says, so his customers can buy more and potentially save significantly on shipping.

“We basically take the entire Ikea website and catalog and open it up to our clients,” he says.

For the Cultons, both 37 and working in the insurance industry, the business grew from their own trips to Ikea to buy items for their home. They initially made one trip a month to Minneapolis for customers and recently added a second. Dustin has made the last few trips without Jennifer, who is eight months pregnant.

The Ikea runs involve spending six to 10 hours in the store, six to 10 trips through the checkout line to buy 150 to 200 items, and filling up a 6-by-10-foot enclosed trailer that they haul with a used Cadillac Escalade. Trips can consist of $6,000 to $11,000 in volume and 15 to 25 customers’ purchases.

The couple pack their Omaha Modern trailer with goods from Ikea's Minneapolis location.

Culton estimates Ikea saw about $100,000 in sales from his business in the first year.

“In total over the past year we've had over 300 orders, so quite a bit of activity,” he says.

With a typical 30 percent to 35 percent pickup fee, Culton estimates the business has generated approximately $35,000 before expenses, $27,000 to $30,000 after. He estimates expenses amount to $400 per trip, excluding a monthly $400 vehicle payment. The trailer, which Culton had before starting the business, originally cost $2,000.

“Ikea has basically said they like that we do this, but we can’t use their logos,” Culton says.

Ikea spokeswoman Mona Liss told Entrepreneur.com: “Although the vast majority of Ikea’s sales happen in the store, we recognize and appreciate that customers far from Ikea stores want to buy from us." She added that Ikea is "working on meeting the needs of these customers by expanding our e-commerce range, reducing our e-commerce delivery prices and adding stores in new markets.”

The Cultons aren’t the only people running private businesses that deliver and assemble Ikea furniture, but it’s unclear how many make such long hauls. Last year the St. Louis Post-Dispatch profiled a couple who made similar runs from St. Louis to an Ikea in Chicago for their business, Expedite St. Louis.

As for Culton, “I'm one of those guys who has had several different ideas for products, businesses … and have always wanted to see one take off," he says. "I don't need to be rich from it, but be able to live off of something I love.”

Did you find this story helpful? YesNo Thanks for making Entrepreneur better for everyone.

View the original article here