Seven Common Business Formation Errors

Many new business owners make several mistakes during and after the registration process that can come back and bite them later.One common formation error is that the registering agent fails to include an entity identifier in the name, such as LLC or Inc. Once registered, many LLCs fail to produce an operating agreement. Many S-corps fail to adopt bylaws, appoint a board [...]

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Harness the Power of Expectations and Price

A business associate of mine once used to charge $5,000 per day for his consulting services. I asked him once how he came to that rate and he said he heard someone was charging $4,000 per day and he wanted to be sure he was the most expensive option available. At the time he billed out about two hundred days per [...]

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Harness Our Need to Compare and Decoy Prices

As a rule, faced with two similar options and one dissimilar option, behavioral economics says that most people will discard the dissimilar option and choose between the similar options based on our hardwired need to compare two like things. Furthermore, behavioral economics shows us that by contemplating a number, which in fact can be quite arbitrary, we [...]

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Harness the Power of Free

Remember when Blu-ray and HD DVD were competing head to head and it became clear that Blu-ray was going to emerge as the standard? Savvy retailers, knowing that buyers respond in irrational ways to the word “Free”, began to offer HD DVD players that sold in the neighborhood of $400 a piece with “Five Free DVDs with the purchase of [...]

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Use Behavioral Economics for Profit

Economics assumes that an individual provided with all the facts will respond rationally and make good buying decisions. Behavioral Economics recognizes that our brains are hardwired in certain ways that make us respond, often quite predictably and irrationally, in ways contrary to logical economic rules. With a better understanding of just a few hardwired behavioral economic rules, small business owners will [...]

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Do You Leverage Group Think?

New government policies and news events affect group-thinking, which also creates sales opportunities. For example, recent talk of potential gun legislation caused a run on guns and ammo. Movement, whether economic or emotional, creates opportunities for small businesses who can spot them and react more quickly then larger companies. Savvy small business owners look at external events that will create [...]

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The Power of Free Samples

I was walking through Sam's Club the other day with a shopping list. Nowhere on my list was cheese or ham patties. But as I walked up and down the aisles grazing on samples, I ended up with cheese and ham patties my cart. There is no way I would have looked at either of these products and said “why [...]

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