Davinci Virtual Blog



Could Your Web Site Handle a 200% Traffic Spike?

Consider the headline—and don’t answer too quickly.

You may not even readily know the answer without making a call to your Web host or talking to your IT guy (depending on how big your company is). However, if you are like most small businesses, the answer is no.

A Neustar survey reveals that 75 percent of small and mid-sized businesses across the country could not handle a 200 percent spike in online traffic without making changes to their Web site. And that number leaps to a disturbing 93 percent when discussions of a 300 percent traffic spike come up.

The bottom line: the vast majority of small businesses are not prepared to deal with rapid business growth, even from short-term promotions.

According to Alex Berry, senior vice president of Internet Infrastructure Services at Neustar, the most common reasons why a small businesses’ Web site could not handle these traffic spikes are (1) a lack of true scalability, (2) Web site downtime.

One key factor in this equation is DNS management, the foundation of a company's Web presence. Every online visitor relies on the DNS to engage with any Web site.

According to Neustar, 38 percent of the respondents say they use the DNS service provided by their ISP, while another 24 percent rely on a 'do-it-yourself' setup, and 16 percent count on a free, hosted option. While some of these services have come a long way, Neustar says most simply don't have the scalability or stability required to keep an online business running through rapid spurts of growth.

"Many small businesses, particularly those powered by online marketing and increasingly dependent on e-commerce, know they might see spikes in online traffic anytime, but they're not ready for it," says small business consultant and columnist Gene Marks. “These firms have become accustomed to free services with limited capabilities, and this becomes a serious problem when they need to scale up in a hurry. The market needs more DNS solutions that are simultaneously affordable, scalable, stable and secure."

So why wait? Check with your host—or your IT guy—about uptime guarantees, bandwidth allotment, security bells and whistles, DNS management, and other issues that could cause your Web site to crash in the midst of your next promotion.

Charlie Sheen Sheds Light on Marketing Mistakes

A living object lesson for entrepreneurs. That’s what Forbes columnist Steven Berglas is calling Charlie Sheen.

“With his foray into monology Charlie Sheen has become a living object lesson for entrepreneurs. In a matter of months he took a product, himself, responsible for the success of the #1 rated CBS-TV sitcom Two and a half Men, and destroyed the grip he had on a thriving customer base,” Berglas writes.

Of course, we know the story all too well. We also know how Sheen became an overnight social media sensation. Sheen is still making some news headlines by crashing Drew Carey’s improv show and heading out on his own tour. But his hit series Two and a Half Men, the series from which CBS fired him, ran for eight years and helped revive his celebrity. There's no gaurantee of winning as he goes out on his own with his new attitude.

But as Berglas sees it, Sheen imploded—and there’s lessons in it for entrepreneurs. What were those mistakes? I’d recommend reading Berglas’ column to get the full story, but here is the take away in a nutshell: Sheen violated Peter Drucker’s marketing laws.

Here are some quotes from Drucker to chew on:

  • “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

  • “The leaders who work most effectively, it seems to me, never say 'I'. And that's not because they have trained themselves not to say 'I'. They don't think 'I'. They think 'we'; they think 'team'. They understand their job to be to make the team function. They accept responsibility and don't sidestep it, but 'we' gets the credit.... This is what creates trust, what enables you to get the task done.”

  • “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.”

  • “Making good decisions is a crucial skill at every level.”

  • “Rank does not confer privilege or give power. It imposes responsibility.”

  • “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

Check out this video where Sheen denies he's bi-polar. He says he's bi-winning.


Could a Controversial Name Help Your Business Succeed?

Fat Ho. That’s the name of a new burger joint in Waco, Texas.

Lakita Evans, the 24-year-old African-American owner of Fat Ho Burgers, is just trying to be funny.  Her restaurant serves up dishes such as the Supa Dupa Fly Ho with Chz, the Bad Mamajama, the Toasty Ho, and the Sloppy Ho Brisket. Fat Ho Burgers opened on March 22 and has become a smash hit, even though it’s named after an obese, loose woman.

The web site reads: “We take pride in our exceptional southern homemade cooking, especially our hot...juicy...fat homemade burgers that are all the rage! Since its grand opening, people have traveled from all over to enjoy our delicious homemade menu items such as the Supa Dupa Fly Ho burger, Sloppy Ho brisket sandwich, and much more! Come see us soon for Waco's best hamburgers and homemade cooking!”

But not everybody is hip on the Fat Ho name. Indeed, the nearby Gospel Café, a religious-themed café and bookstore, doesn’t like it one bit.

With that in mind, what should you consider as you name—or rebrand—your business?

Entrepreneur magazine published 8 Mistakes To Avoid When Naming Your Business back in 2005, and these pointers are still good to keep in mind today. You can read the full article in Entrepreneur. Here are the tips in a nutshell:

Mistake #1: Getting the "committee" involved in your decision.
Mistake #2: Employing the "train wreck" method of creating a name.
Mistake #3: Using words so plain they'll never stand out in a crowd.
Mistake #4: Taking the atlas approach and using a map to name your company.
Mistake #5: Turning your name into a cliche.
Mistake #6: Making your business name so obscure, customers will never know what it means
Mistake #7: Taking the Campbell's soup approach to selecting a name.
Mistake #8: Choosing the wrong name and then refusing to change it.

Check out this video on the controversy surrounding Fat Ho Burgers.


Death, Taxes and the Small Business Owner

The 2010 tax deadline is just a week away. That could mean some long nights ahead if you still haven’t finished getting your receipts together. Or, it could mean preparing for a heavy tax bill if you didn’t plan correctly.

But whether you waited to the last minute or have been prepared for April 18, 2011 since Dec. 31, 2010, it’s likely that you felt the impact of federal tax issues in some way, shape or form. That’s because tax codes are complex and inconsistent.

So much so, in fact, that the National Small Business Association figures that dealing with the administration of federal taxes is depleting small businesses of their time and money. In other words—and here is where the “death” part of the headline comes in—dealing with taxes is killing a measure of productivity and profits.

"One in three small-business owners spends two full work weeks every year dealing with federal taxes, and the overwhelming majority (87 percent) are forced to pay an outside accountant or other tax return preparer," says Larry Nannis, CPA, NSBA chair and shareholder at Levine, Katz, Nannis + Solomon, P.C. "The federal tax code is a massive resource drain for small businesses."

What’s the worst part of dealing with federal tax issues? Most small businesses point to payroll taxes as the most burdensome task, both financially and administratively. In fact, only 44 percent of small businesses report using an external payroll company. Even small businesses that use a payroll company spend plenty of time dealing with payroll taxes.

Sixty-three percent of small businesses handle payroll internally—and the new W2 reporting requirement that begins in 2012 will make dealing with federal tax issues even more draining. That’s because new W2 reporting requirements demand employers report health care spending.

But wait, it gets worse (as you already know). What happens when there is an IRS audit? Despite the fact that new research shows the IRS misappropriated an undue responsibility of the tax gap upon the small business community, audits are rising. Most small business owners don’t even take the deductions they could on their return for fear of an audit. Only 47 percent of eligible small business owners use the home office deduction, primarily due to concerns it will "red-flag" their return for an audit.

"The time for a serious debate on broad tax reform is now," says NSBA President Todd McCracken. "The ever-growing patchwork of credits, deductions, tax hikes and sunset dates is a roller coaster ride without the slightest indication of what's around the next corner. This is unsustainable and unacceptable."

Check out these tax deduction tips and advice:


Small Businesses Benefit from ‘All in the Family’ Hiring

Who would you rather hire? Your brother in need or a complete stranger?

A Hiscox study answers the question for you. Well, sort of. The small-to mid-sized business insurer conducted a survey of 1,000 small business owners to track family hiring practices. The results: 21 percent employ a family member. Of that group, 43 percent cited the downturn as a reason for recruiting a relative.

Nearly a third (30 percent) of family-run businesses choose to employ a relative to help them find work and 11 percent say it was to help those who had been made redundant. But the benefits were hardly one-sided. A whopping 94% believe that a family hire benefits their businesses.

Let’s drill down into the advantages:

  • 57% say it came down to trust

  • 45% cite reliability as a benefit

  • 44% know their family members “will work hard”

  • 40% point to relevant experience

  • 16% say it creates a recognized family brand

"The silver lining of the tough financial climate has been the discovery of the 'family talent pool'. The trend of SMEs turning to trusted family members who may be available and have the right experience has strengthened their businesses,” says John Heaney, an SME insurance expert at Hiscox.

With advantages, of course, come drawbacks:

43% say there is a danger associated with work-life balance
25% are concerned it will bring family politics into the business

“Understanding the risks to your business means that you can put strategies in place to ensure they don't become a problem,” Heaney says. “For example, think about succession planning and set out a long term strategy so all employees within your company are clear on their role and expectations for the future.”

The conclusion of the matter?

Grant Gordon, director General of the Institute for Family Business, says family firms are a proven breeding ground for entrepreneurship and working in a family business encourages greater resourcefulness as well as teaching family members valuable lessons.

"Overall the family business sector has weathered the recession well and fostering a spirit of entrepreneurship in family members should ensure these firms remain competitive as we emerge from the downturn,” Gordon says.

Check out this video on how to hire top performers.