Business 101: Ethics of Outsourcing

Published on Aug 31, 2010   //  Business Topics

In order for your business to reach its utmost potential, you need to ensure that the business model is scalable. You are just one person and, eventually, you won’t be able to do the entirety of the job on your own. That’s only natural and to be expected. It’s also a good problem to have.

However, you will then be faced with the ethics of subcontracting and outsourcing. This is especially true when it comes to service-based industries like advertising agencies, freelance writers, and other creative types. When a client approaches you, they usually expect that you will be doing the work. That may or may not always be the case.

So, how do you handle these situations? When a customer approaches a large company with a task, he usually doesn’t expect the CEO and Founder to do the majority of the work, but what about smaller businesses? It’s not unusual for a large ad agency to outsource its work and profit from the difference. It’s common practice.

In this way, you do need to tread carefully when you reach this juncture in your entrepreneurial career. The professionals that you hire for the subcontracted or outsourced work have to be up to your own standards, first and foremost, so that your clients will not be disappointed with the results. Whether you choose to disclose the subcontracted nature of the work to your clients, however, is an ethical question that you’ll need to answer on your own.

Business 101: Expenses without Receipts

Published on Aug 24, 2010   //  Business Topics

Let me preface this by saying that I am not an accountant nor do I claim to be. It is always in your best interest to consult with your tax professional for confirmation and advice, but this post may prove very useful for all the small business and home-based business owners in the audience.

What happens when you purchase something for the purposes of your business, but you do not have a receipt to record the purchase? Can you still “write it off” like any other expense that your business may incur over the course of its daily operations? The short answer appears to be yes, but it comes with several caveats. It is always easiest if you are able to get some sort of proof of purchase, even if it is just a hand-written receipt from the seller, but this isn’t always possible.

In order to “write off” this expense, you have to ensure that the transaction is properly recorded in your books. Note the date of the purchase, the name of the seller (whether it is an individual or a business), the contact information of the seller (if available), the product or service being purchased, the effective sale price, and any other information related to the transaction. You can hand-write a note to document this, as well as entering it into your books.

If you take care to note as much as possible about the transaction, you can then show this information to the government in case you get audited. This information can also be forwarded along to your accountant, who can then have it included as part of your annual tax files.

Business 101: The Ethics of Bait and Switch

Published on Aug 17, 2010   //  Business Topics

You see it everywhere, so it must be effective. So many companies offer a range of different promotions, all of which are designed to lure customers into their fold, attracting them away from suitable alternatives and competitors.

With cell phone companies, you oftentimes see the offerings of free or severely discounted (subsidized) mobile phone handsets in exchange for lengthy service contracts. With home Internet service, you can oftentimes see a promotional rate that is only good for the first six months, after which the “regular price” is substantially higher. They bait you and then they make the switch.

Is this ethical? On the one hand, it is very attractive to see promotional prices that are substantially lower than the regular price of the next competitor, but it is very upsetting when the promotional price ends. This is especially true of consumers who don’t bother to look up what the regular price will be at the end of the promotional period, particularly if they lock themselves down into a multi-year contract.

Should the “regular price” be more prominently disclosed up front? Or is all fair in love, war, and marketing? Should the onus fall on the consumer to perform the suitable research needed or should the responsibility fall on the businesses to offer full disclosure?

Business 101: Home Address on Home-Based Business Card?

Published on Aug 10, 2010   //  Business Topics

More and more people are working out of their homes and an increasing number of these people also happen to own their own businesses. They may be independent real estate agents, freelance writers, or professional web designers. Whatever the case, they have legitimate businesses and many have business cards for this reason.

When it comes to most conventional business cards, a standard set of information is included: name, company name, job title, phone number, office address, and email address. That much makes sense, but what if your home also happens to be your office? This could run into some privacy concerns, melding the personal and work worlds a little too much. Do you want your clients and colleagues to know where you live?

On the one hand, you want them to have a mailing address where you can receive letters, shipments, parcels, and the like. On the other hand, it is advisable to separate your work and personal lives just a little bit. One way to overcome this conundrum is to rent a post office box somewhere or to use a mail receiving service of some sort. These are added expenses, however, that not every business owner is prepared to absorb.

And here’s where we turn to you, the Bluefur community: What do you think about the matter? If you own a home-based business, do you include your home address on your business cards?

Business 101: Incentivized Brand Exposure

Published on Aug 3, 2010   //  Business Topics

One of the biggest keys to success for your business, whether it is online or offline, is to increase your brand presence in the marketplace. The more people who are aware of your brand and what your company has to offer, the better.

There are countless strategies that you can consider to achieve this end and I discovered an interesting one on a recent hike in Vancouver. As I reached the top of the Grouse Grind, I saw two options for taking the gondola back down the mountain. I could pay the full price of $10 per person or I could buy a bottle of Whistler water and get a reduced price of $5 per person.

The bottle of water cost $3 (though it sells in supermarkets for a little more than a dollar). By buying the water and the reduced gondola ticket, my net price was $8. That’s still two dollars cheaper than regular price and I gain an extra bottle of water to boot.

Now, I’m not entirely sure what sort of arrangement was forged to allow for this promotion, but it put the Whistler Water bottles in the hands of more people than it would have otherwise. Many of these people may not have ever purchased this product nor may have they have had any intention to do so in the future. However, by using this promotion, these people are more familiar with the brand, they get to try the product, and the hope is that they will now be more motivated to buy Whistler Water later on.

Can you come up with a similar idea for your business, brand, the product?

Business 101: A Downtown Address

Published on Jul 27, 2010   //  Business Topics

Generally, all companies want to increase their brand presence in the marketplace. They do this with advertising, Twitter accounts, and marketing campaigns. They also want their brands to be perceived as trustworthy and legitimate. They do this with professional logos, professional web domains, and professional press releases. One other way they do this is with choice of address.

For better or for worse, there is a certain extra air of legitimacy when it comes to businesses that come with a downtown mailing address. This offers the perception of being for real and being reasonably profitable. If a company can afford to have an office in a downtown highrise, they must be doing something right, right? Well no, not necessarily, but that the perception that many people may have, even if it is not a conscious perception.

So, what does this mean for smaller businesses and sole proprietorships where downtown rent simply is not possible? Well, it is possible to look into co-working spaces in your area. The Network Hub, for instance, is a great Vancouver example that not only offers coworking office space, but it also has a mail service. This way, you can say that your company is “located” at a “suite” in the Network Hub’s downtown Vancouver address.

Contrast this to an address that would place your company in the middle of a highly residential suburban neighborhood, an area where you might live and work if you happen to work from home. That gives away some personal information and it may confuse some clients when they are attempting to send something to your “business” address in the ‘burbs.

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