Why? ICs are a handy way for small businesses to expand and contract their workforce as needed.  But it’s easier (and more lucrative) for the tax authorities to collect withholding taxes from one employer each quarter than to hope—and hope is the operative word—for ICs to pay in that same revenue when they file their tax returns months later.

This happened to a client (for illustrative purposes we’ll call them “SB Training”). SB Training hired a colleague on a handshake as an IC to deliver a training program. SB Training paid the IC when the assignment was completed.  But when the IC filed for unemployment insurance (because the IC had been let go from her full-time job), she named SB Training as a place where she had worked in the previous year—and unwittingly sent SB Training down the rabbit hole.

SB Training said “She’s an IC!” The IC said, “I’m an IC!” The taxing authorities said, “Too bad—the IC didn’t have an independent business because she worked full-time elsewhere … so wasn’t a proper IC.”

And because they now have integrated computer database networks, the Workers’ Compensation and Disability agencies were salivating like hyenas ready to pounce on an injured zebra, awaiting the final determination.

To preclude this type of situation in your business and keep tax enforcers at bay, you’ll want to document all agreements with ICs. The IC determination process is complex, and you should seek expert help, but here are a few standard issues every IC agreement should include:

1. A clear description of the task.

Define the work to be performed, the time-frame for doing the work, and the IC’s specific responsibilities and reporting requirements.

2. Payment terms.

There should be no confusion here.  State how much the IC will be paid, when payment will be due, and how payment will be transferred.  Clearly state that no employment taxes are being withheld and that the IC is responsible for paying any taxes due.

3. The contract term.

The agreement should provide for termination of the contract, either at a pre-determined date or by a decision of either or both parties.

4. Confidential information and intellectual property (IP) rights.

If the IC will be privy to any of the company’s confidential information, or if the IC’s work could contribute to the production of new proprietary assets for the company, the agreement should confirm your ownership of that information and assets against any claims of the IC.

Tip:  The IRS and many states have announced increased enforcement of IC misclassifications.  There are a number of factors that agencies consider when weighing wither a worker is an employee or independent contractor.  Be familiar with them as you structure your work assignments.

For more about the 20 different factors that the IRS looks at, read my article, “How Independent Contractor Agreement Protect Your Pocketbook.”

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As Socialbrite.org suggests, data is transforming conversations. “These days everyone is releasing it, visualizing it, aggregating it, and mashing it up. And for good reason. Data is so much more than a stack of numbers or a server filled with client outputs. It can justify the work that your organization is doing, help others understand why it is critical, and offer exciting new ways to motivate others to help solve the problems your organization is working on.”

Here are 10 practical steps to help you plan, conduct and utilize market research data in your business:

1. Determine Your Purpose

What do you hope to gain from your research? Do you want to improve an existing product or service? Are you preparing for a new product launch? Start with your main objective  and then predict what you think the data will reveal. This helps you determine next steps to take, and provides a comparison of how you view your offering and how other perceive it in the marketplace.

2. Establish the Type of Market Research You Want to Use

There are two main types of market research. Primary research is taken directly from the source, such as current or potential customers. Primary research, when done right, can be very reliable.

Secondary research is data collected from existing research conducted by others. People usually gather secondary research data from government agencies, trade associations, local chambers of commerce, and other credible sources.

3. Confirm Your Target Audience

Make sure you have a target market in mind. Your target market is the group of people that are most likely to buy your product or service. For example, if you want to develop an eco-friendly baby sling, your target market would consist of mothers of young children, and you would probably want to choose a research method that doesn’t require a lot of time due to their busy schedules, such as a short online survey.

4. Conduct Primary Market Research

There are several different ways that you can conduct your own research. Online or mail surveys, face-to-face or telephone interviews and questionnaires are all effective ways to collect data from your target audience. You can use tools like Qualaroo, SurveyMonkey, and QuestionPro.

Questions may include factors customers consider when purchasing your product or service, appropriate prices, likes or dislikes about current products or services on the market, and areas of improvement. If you do not have the time to conduct it yourself, you can outsource your study to a market research firm.

5. Conduct Secondary Market Research

The bulk of your market research will usually come from secondary research. U.S. Census data, trade associations, professional journals, and community organizations offer data that may be relevant to your study such as: market trends, regional trends and information on your competitors.

Secondary research is easier to conduct because the data you’re collecting has already been analyzed and published. However, all of your data should not come from secondary research. A balanced mix of both secondary and primary research will ensure the credibility of your findings.

6. Determine the Reliability and Validity of Your Data

After you gather your data, weed out data that isn’t reliable. High quality data will be valid (i.e. you can trust the integrity of your data), reliable (i.e. the claims you assert about the accuracy of your data is correct) and be subject to triangulation — cross-examined through the lens of multiple independent sources of data to establish the truth and accuracy of your claim.

If you need to cut costs immediately, consider these nine tips:

1. Ditch the physical location.

“Unless you’re in a field that needs a storefront, ditch the office and save money on rent by working digitally. You’ll also open yourself up to hiring talent that may not be located in your immediate area.”

- Dale Galiniak, CEO of Txt2Teach.me: @txt2teachme

2. Outsource relentlessly.

“Entrepreneurs often think that ‘doing it themselves’ is an effective way to cut costs, but you’ll often waste tons and tons of time trying to learn enough to do something effectively. Elance is a great tool for outsourcing, but there are tons of others out there – spending all your time trying to get better at selecting great talent is much more cost-effective, time-effective, and, ultimately, it is scaleable.”

- Jayme Self, Founder of English Edits: @EnglishEdits

3. Monitor your office space needs and payroll costs.

“Most businesses spend more on rent/leasing and payroll costs more than any other expense. The best way to cut these costs and increase profits is regularly monitoring your office space needs and consistently reevaluating the number of employees necessary to carry out the business’s operations. Streamlining these large expenses will not only help to reduce monthly overhead costs, but if done right will also improve operational efficiency, leading to a larger bottom line.”

- Michael Raanan, Founder and President of Landmark Tax Group: @LandmarkTaxGrp

4. Hire independent contractors.

“I’ve worked with the same designers and programmers for 10 years now, but they have the freedom to do other work, and I only pay them for the work they do. We have a great relationship and low overhead. I pass the savings on to clients, and clients love working with me and my team!”

- Heidi Koontz Oleska, President and Branding/Marketing Strategist of Vintage Juice Brand Marketing: @VintageJuice

5. Operate like a startup and think “lean.”

“If you’re making profits or have raised a large investment round, it’s easy to feel that you can throw a few thousand dollars at a marketing campaign just to give it a shot. Before you make any decision, really think it through. Work out the benefits of the campaign and consider where the money could be better spent. A lot of cost-cutting will simply come from being constructive with your capital and ensuring that if you’re spending a lot of money, you’re spending it in the right way.”

- Anthony Ng Monica, CEO of Swogo: @AnthonyNgMonica

So without furthering the hype, what does this mean for you as an entrepreneur? Derived from extensive Hispanic research panel studies and panel, check out these 5 facts that may make you rethink your next product or service offering:

1. Hispanics comprise 16% of the U.S. population

Fifty-two million is the estimated Hispanic population of the United States as of July 1, 2011, making people of Hispanic origin the nation’s largest ethnic or race minority, according to the Census Bureau.  So what does that mean to you as an entrepreneur? If your product or service is not “Hispanic-friendly,” you are losing a big piece of the pie. How big you ask?

2. Hispanic buying power is worth $1 trillion

The Hispanic population is expected to grow another 50% to $1.5 trillion in the next 5 years, according to a new Nielsen report. It also found that Latino households earning more than $50,000 are projected to grow at a faster rate than the total number of households.

I thought that number would grab your attention, but maybe you are still unimpressed because you are an entrepreneur that focuses on B2B sales; not B2C sales. The next figure may interest you, then.

3. Hispanic-owned business generated $350.7 billion in receipts

According to the American Immigration Council, “Latino-owned businesses had sales and receipts of $350.7 billion” in j2007. This is up 55.5% from 2002. So, B2B entrepreneurs, you can’t ignore the Hispanic market either. Are you an entrepreneur going after a younger market? You should be paying to the Hispanic population too — for the following reason.

4. 27-years-old was the median age of the Hispanic population in 2012

This compared with 36.9 years for the population as a whole.  So, if your product or service is going after a younger demographic, you better make sure you are thinking of the Hispanic population. If your product or service is going after an even younger demographic, you better listen up as well.

5. 26% percent of children younger than 5 are Hispanic

All in all, Hispanics comprise 22% of children younger than 18. Thinking of releasing the next slinky? Make sure you have the Hispanic population in mind.

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Mario Xavier Carrasco is the co-Founder of ThinkNow Research, a full service Hispanic market research agency. He is an accomplished entrepreneur and a Hispanic market research expert. His blog has been featured on Huffington Post, Hispanic Business, and Quirks Market Research directory.

The thing is that successful entrepreneurs are aware of and apply these five smart outsourcing moves:

1. Know when and why to outsource.

Outsource because you want to and not because you’ve heard of other companies doing it.It will work only when you have a need for it without creating an artificial requirement just to be able to jump onto the outsourcing bandwagon.

2. Destination matters, unless you have an inner goblin that craves strife.

Choose a country that has a stable, pro-development, and pro-outsourcing government, is fairly free from ethnic and political violence, and above all, has an abundant talent pool of English-speaking professionals.

So, say you want to outsource several skills and build an entire virtual team of mixed skills professionals. In that case, a great outsourcing destination that boasts a rich repository of talented experts will ensure that all your remote resources are working together, if not from the same office then at least from the same time zone.

3. Know which outsourcing partners to utilize.

Differentiate between a freelancer, a project outsourcing company, and a virtual employee– understand who suits your requirements the best. Smart entrepreneurs are only too aware that the most common landmine behind the maximum number of outsourcing disasters is ignorance about the choice of anoutsourcing partner.

A freelancer is totally unfit for long-running and complex tasks while a project outsourcing company may be way too expensive for an SME (small to medium-sized enterprise) or a startup that doesn’t have either the necessary volume of work or the resources to foot their expensive bills. A virtual employee may suit only those who wish to work with dedicated and permanent remote resources with whom daily and ongoing tasks can be outsourced.

4. Know when to retain control and when to relinquish control

Nobody likes a “hovercraft” employer, irrespective of whether the employee sits in the same building or a couple of continents away. So, if you have outsourced work that doesn’t place too many demands on your time, intervention, and inputs to an offshore freelancer, then just let the remote resource get on with it.

Don’t hover over their heads 24/7 because not only will it be a waste of your time, but it may just backfire if the freelancer decides to just up and leave due to needless interference. On the other hand, taking a laid back attitude while outsourcing work that is crucial to your overall business on the premise that the outsourcing service provider will take care of everything might also prove to be disastrous.

5. Always have a backup plan ready in case something does go wrong.

Even the most wise do stumble and it is no big deal if an outsourcing venture does go awry. Don’t panic, but just calmly lift the curtains off Plan B and get on the road again.

So, outsource the smart way by using the blueprint that successful entrepreneurs have created.

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Daya Mukherjee is Head of Content at a remote staffing outsourcing company in India, that helps clients set up their own offshore office in India at zero investment cost. Learn more about how virtual employees are an alternative to local hiring and expensive offshore outsourcing.

As the economy has struggled and business has become increasingly competitive, consumers have watched customer service standards slide. Many online business owners think that doing business over the Internet is supposed to be inherently impersonal.

Others simply spend less on customer service because they argue that service can’t be measured accurately and, therefore, doesn’t provide a legitimate return on investment. While measuring the value of service isn’t an exact science, its value is evident when sales are lost due to a lack of service.

The perplexing thing, though, is that we know without a shadow of a doubt that it’s much cheaper to market to our current customers (resulting in repeat purchases) than it is to attract new customers.

Bain Consulting has suggested that it’s over six times cheaper to retain customers than to attract new ones, and that repeat customers spend more than two times as much as new customers. Looking at the numbers, it seems obvious that businesses would do well to invest in customer service that will drive repeat purchases. Yet we frequently see businesses reducing service standards while simultaneously spending a fortune attempting to attract new business.

Providing Better Online Customer Service

The key to creating a better customer experience online is connection. Consumers who want the lowest price and an impersonal shopping experience can take their business to Amazon.com or Walmart.com. These sites can get away with not connecting with customers on a personal level because of their breadth of product availability and low prices.

The rest of the online business world has to instead compete on service or be driven out of business by one behemoths. Small e-commerce businesses must absolutely develop a connection with customers in order to keep them from leaving for the cheapest alternative (i.e. Amazon).

Here are a few simple ways that online business owners can offer better customer service and build a connection with customers:

1. Consistently provide order updates.

Customers hate being left in the dark in regards to the status of their orders. Make sure customers have an easy way to check on the progress of their orders–especially when the product is “made to order”.

2. Properly educate your customer service team.

There are few better times to develop a human connection with customers than when they call customer service to ask about a product. There are also few better ways to lose customers than to have customers feel like they know more about your product than your customer service team does.

3. Skip the customer service script.

Let your customer service representatives spend as much time as it takes to answer a customers’ questions. Many companies aim to minimize time spent on the phone with customers due to the cost.

However, you might consider looking at the cost of lengthy phone calls as an investment in customer retention. Zappos has a cult following for this exact reason — it believes that spending time on the phone helping customers in any way possible is going to drive repeat sales (even if that means spending over 10 hours on a marathon call with a customer).

4. Be available.

Provide a direct line for customers to get in touch with you if they need to follow up for any reason. One surefire way to make a customer feel disconnected from your company is to make him use an automated phone system. Small online businesses can win through good customer service, and making customers talk to a computer (as if they’re calling a large corporation) is certifiably bad service.

It’s easy to get caught up in cost-cutting and focusing on efficiencies when running an online business that never actually meets customers in person, but be wary of scaling back customer service. Great service may not be explicitly measurable, but it’s the best way to build a loyal following and drive repeat purchases which are, after all, the most valuable of all sales.

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Tyler Shearburn is the CEO and Founder of Comfy Sacks, an online retailer of over-sized beanbags. In order to really know his products, Tyler owns every size Comfy Sack his company sells. On the side, Tyler consults with e-commerce platforms on their structure and strategy. He encourages readers to reach out to him on LinkedIn and Twitter.

There are plenty of viable and creative ways to market your business with relatively low out of pocket expense. So we’ve asked entrepreneurs to reveal their secrets on how to market your businesses on the cheap — here is what they had to say:

1. Actively put yourself out there.

“By joining professional groups and boards, going to events, donating your time to charities, speaking at public events, giving presentations and guest lectures, we make it seem like we are everywhere at all times. The more we put ourselves out there (and are seen) the more name recognition we earn on our way to becoming a household name and gaining that incredibly important third party validation. Even if a potential client has never met you, you have the backing of trusted sources that confirm your credibility.”

- Shaun Walker, Creative Director of HERO|Farm: @herofarm

2. Form smart partnerships.

“No matter what industry you are in, forming smart partnerships is the best way to drive growth. Any company that has access to your prospects is a potential partner for growth. For the low/no income startup, flexible partnerships that trade value in a balanced way, without monetary concern, are very powerful.  We’ve partnered with several brands to trade advertising or access to our base in exchange for something similar on their end, and it’s a win-win for all.”

- Cory Jones, Founder and CEO of DINKlife: @wcoryjones

3. Offer something for free.

“In my experience, marketing my business for free was always best done by offering free things. People love free things. For example, social media contests with a prize for the winner, free ebooks or guides on marketing, setting up a table and giving out free food or accessories, or even giving a free lecture to a business, school, etc. The lecture works especially well as it’s a great way to establish your credibility.”

- Chris Crompton, Owner and Co-Founder of StartSmall Marketing: @startsmallmktg

4. Hangout with your customers.

“To market your online business for free you need to think like your customers. Pinpoint your customers’ interests and hang out where they hang out. Social groups and market-specific forums are great places to start. Establish yourself as part of the community and then people within those communities will listen when you speak!”

- Dave Hermansen, Co-Founder of Store Coach, Inc.: @StoreCoach

5. Utilize free online directory services.

“Add your business to as many websites you can that allows you to do it for free. Make sure you and your friends click on the link at least once per day. This way your information becomes relevant. Also, add keywords that are relevant to your business (where and when allowed) so that search engines find you.”

- María J. Torres-López, Owner of Notary @ Your Door

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“Yankelovich, a market research firm, estimates that a person living in a city 30 years ago saw up to 2,000 ad messages a day, compared with up to 5,000 today,” according to 2007 statistics. This figure has undoubtedly risen as marketers vie for top of mind presence of on-the-go consumers. The result: a hyper-competitive, cluttered marketplace–infused with incessant messaging.

This is why it is important, more so now than ever, to identify your ideal customer (i.e. target audience). Not only can you better determine demand; you’ll also position your small business to improve message relevance, effectiveness, and cost-efficiency. Targeting will hone and deliver your marketing efforts towards specific people who will most likely patronize and make use of your products and services. Because, what good is it to spend your hard earned marketing dollars talking to people who aren’t interested?

Identifying ideal customers can be challenging. Instead you may find yourself “throwing [insert trend here] marketing tactics on the wall to see if they stick.” Regrettably, this hit and miss approach has the potential to drain valuable time, energy and money.

Imagine if your marketing efforts resulted in one fluid motion that allowed you to concentrate fully on your target and hit the mark every time.

Discover your Ideal Customer

Your ideal customer is a targeted segment of the overall population that you want to sell to… what problem are you solving and for whom? Targeting helps you create a clearer picture of this buyer. The best way to start is to create a customer profile, fueled by demographic and psychographic data.

Demographics

Demographics generally refer to age, gender, income, education, location etc.

For example, if you own a prestige skincare line then you may target women at different stages of aging. Example: College Educated Women Age 35-54 with a HHI 75k+ residing in the U.S.

Quick & Dirty Tip: Gather demographic statistics by metropolitan area, county, ZIP code, census tract, and state using U.S. Census Bureau data, then dig deeper using the County and City Data Book.

Psychographics

Next, uncover the personality, values, attitudes, behaviors, interests, and lifestyles of your ideal customer. Demographics alone are too broad, which is why you need to gather valuable consumer insights to zero in on the customers who will drive sales. While demographics tell you who; psychographics can tell you why.

In the prior skincare company example: Based on your research you may target city dweller women with access to financial resources that compliment your price point, enjoy health and wellness activities, are passionate about civic involvement, enjoy wine tastings, read Beauty and Fashion online blogs and magazines and support certain causes, etc. Your research will unearth various types of clues.

Quick & Dirty Tip: Gather abstract consumer insights by visiting online forums, reading competitive product reviews and taking an active interest in customers using surveys and informal focus groups. Then use VALS™ (a consumer psychographing system) to further develop your customers’ profile. Lastly, use Nielsen Segmentation Tool and ZIPSkinny to evaluate market segments by linking consumer behaviors for shopping, financial, media and much more.

Once you complete your customer profiles, you may find that you have more than one “ideal customer.” If this is the case, prioritize each target by assigning weight (i.e. 50%, 75%, etc.) representative of their potential market size and revenue. This can guide your marketing strategy (i.e. where you’ll reach your ideal customer), tactics (i.e. how you’ll actually do it) and spending levels.

I can hear it now … the sounds of Frank Sinatra swooning … “Luck be a lady tonight,” and the thoughts of sugar plum VC fairy’s dancing in your head.

Often when an entrepreneur considers financing they think of OPM – “other people’s money.” In other words, their in search of the proverbial VC or angel “Daddy” Warbucks.

And why not? It appears easier than pulling yourself up by your bootstraps, operating on a shoestring budget, and finding creative ways to make it work. Who would blame them? Read the latest startup headlines and you’ll get a daily dose of: Bright young thing closes Series A funding round for $2 million, new VC-backed company claims it’s the match.com for your pet, high-risk friends-and-family investment hits pay dirt, etc.

But hidden beneath the headlines is the not so glamorous side of VC funding, in particular. You know – VCs not hesitating to fire the founder of the company if they find him/her incompetent, the realities of venture debt, or the fact that your business is not VC fundable at all.

Is OPM a spawn of all things evil — of course not. But the reality is this: many successful companies launched with an idea and a founders’ personal investment of time and money. Those not-so-sexy bootstraps have paved the way — and could do the same for you.

What keeps entrepreneurs from investing in their businesses?

As Peter Shallard, the shrink for entrepreneurs, suggests, “There is only one type of investment that can be made within a business: The kind that brings in revenue. That adds to the bottom line. That makes money. In other words, when we put money (or time!) into our own businesses, there needs to be a return.”

It’s often a hard decision to make, parting ways with your hard earned dollars to chase a dream, especially for new entrepreneurs who feel as though they’ll put everything on the line.

How can savvy entrepreneurs bootstrap their businesses?

Before you start hounding local VC’s or your local business banker, consider this: people want to invest in traction – proven success. Most people want to invest in a founder who is truly – emotionally and monetarily – invested in their vision. In practical terms, if you refuse to invest your own money into your business, why should anyone else?

This is why savvy entrepreneurs will invest in their future by first investing and then re-investing into their business early on. In fact, there are numerous companies that are bootstrapped, profitable and proud. You can be one of them. Here’s how:

1. Focus on cash flow – not profitability.

Launch your small business with a creative outlook – bootstrap it all the way to success, or at least cash flow. Guy Kawasaki notes how important it is for startup to focus on cash flow instead of profitability. Kawasaki suggests, “the theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow. If you know you are going to bootstrap, you should start a business with a small up-front capital requirement, short sales cycles, short payment terms, and recurring revenue. It means passing up the big sale that take twelve months to close, deliver, and collect. Cash is not only king, it’s queen and prince too for a bootstrapper.”

CEO branding is the new corporate branding. People want an emotional connection to the brands they are invested in, so it’s important for those brands to have a face — and that’s where CEO branding comes into play.

CEO Branding — The New Corporate Branding

CEO branding is the process of aligning your face with your corporate brand. This process includes public relation activities, media interviews, philanthropy, articles, books, speaking engagements and company culture.

It requires integrating the CEO’s brand DNA into how the company is viewed publicly. In a competitive marketplace, it is a differentiating factor. Though it happens naturally, CEOs need to be forward-thinking when it comes developing their brand — or proactive in managing it.

Consider these survey results compiled by Burson-Marsteller, one of the world’s largest PR firms, that illustrate the importance of a CEO’s reputation to the success of the company.

The results indicated that, based on a CEO’s reputation:

95% of those surveyed decided whether or not to invest in a company
93% would recommend a company as a good alliance or merger partner
88% recommend the company as a good place to work

Sara Blakely, the founder of Spanx and the world’s youngest female billionaire, is a walking example for the power of CEO branding. In her company’s early days, she had no money for advertising, so she hit the road with her new product. She was the heart, soul and face of Spanx. Blakely took her passion and propelled Spanx to phenomenal heights.

Blakely also stands firmly by her personal beliefs about how business should be done. In the recent CNBC Town Hall Event, “Getting Back to Business,” Blakely responded to venture capitalist Kevin O’Leary’s statement, “Business is war,” by saying, “I have only been focused on my own quality – what can I offer that’s the best and give value.”

It’s not just the words, but also the CEO behind them that the audience responded to so enthusiastically. Her authenticity is noticed by customers, investors, employees, and the general public, and it influences their readiness to connect to the Spanx brand. That’s the power of CEO branding.