en Small Business Innovation Research Program (SBIR): How it Works and How to Qualify <p>Small businesses are the key to advancing America&rsquo;s economy by bringing cutting-edge, high-impact technologies to the marketplace that improve health care, strengthen our military and protect the environment. However, small businesses often have difficulty competing with larger technology companies due to lack of capital for research and development (R&amp;D) work that is critical for moving products from the planning to deployment stages.&nbsp;</p> <p>To help entrepreneurs successfully commercialize their products and services, the federal government established the <a href="" title="link to">Small Business Innovation Research/Small Business Technology Transfer</a> program, commonly known as SBIR. Eleven federal agencies including the departments of<a href="" title="link to Health and Human Services site"> Health and Human Services</a>, <a href="" title="link to Defense site">Defense</a> and <a href="" title="link to Energy site">Energy</a> participate in SBIR, which provide small businesses competitive funding for projects that meet government research needs and boost technological innovation in the public and private sectors. The <a href="" title="link to related SBA page">Small Business Administration</a> doesn&rsquo;t directly administer the SBIR funding awards, but it oversees and manages the SBIR program by coordinating with other agencies, reviewing progress and reporting to Congress.</p> <p>Much like the product development process, SBIR is structured in phases:</p> <ul> <li> Phase 1 establishes the technical merit, feasibility and commercial potential of products or services and lasts for six months.</li> <li> Phase 2 supports continued R&amp;D efforts and extends up to two years. Funding levels are based on the success of Phase 1 work.</li> <li> Phase 3 enables the small businesses to commercialize products or services. Although SBIR does not fund Phase 3, some federal agencies may provide additional financial assistance for products and services that help achieve government research goals.</li> </ul> <p>To be eligible for SBIR assistance, businesses must:</p> <ul> <li> Be organized for profit and be located in the United States.</li> <li> Be at least 50% owned and controlled by U.S. citizens or permanent residents. &nbsp;</li> <li> Have no more than 500 employees.</li> <li> Not be controlled by a venture capital firm, hedge fund or private equity firm that owns a majority of the stock.</li> </ul> <p><a href="" title="link to eligibility requirements">Learn more about eligibility requirements</a> and <a href="" title="link to solicitations site">explore open and future solicitations</a> from agencies throughout the federal government to find SBIR funding opportunities for your small business. Also, <a href="" title="link to">go to</a> for more information about the program including <a href="" title="link to success stories">small business success stories</a>, <a href="" title="link to webinars and events">free upcoming events and webinars</a> and <a href=";pop=t" title="link to email updates from the Small Business Administration">email updates from the Small Business Administration</a>.</p> Small Business Cents Financing Mon, 07 Jul 2014 12:43:26 +0000 plester 1095521 at Business Capital and Electronic Payments: Insights from National Small Business Week 2014 <p>As a small business owner or entrepreneur, you know how important access to capital is to success. And we know it, too! During last month&rsquo;s National Small Business Week (NSBW) events, which were held across the country and online, it was a topic addressed by our speakers and panelists as they shared experience and insights. One of those speakers was Janet Zablock, Head of Global Small Business at Visa, who talked about using electronic payments for your small business. Here&rsquo;s a look at what she had to say.</p> <p>Whether you&rsquo;re a looking to start a new business or running an existing operation, Zablock starts, entrepreneurs face challenges when it comes to access to capital &ndash; an understood foundation to success, given that so many cite lack of funds as a reason for failure in the first few years. But the second piece to this access-to-capital puzzle? The <em>flow</em> of capital on a daily basis, or the &ldquo;lifeblood&rdquo; of small businesses, as Zablock puts it.</p> <p>Citing Visa&rsquo;s recent quarterly survey of small business owners, in the top five concerns of small business owners is how to manage cash flow. &ldquo;If a small business lacks a secure, reliable and convenient way to pay and be paid, there&rsquo;s a good chance you&rsquo;ll be in a tough place,&rdquo; Zablock says. You won&rsquo;t have funds you need to buy inventory, meet payroll or pay bills. And no matter how great customer service is to bring in good business, without capital flow, it can be a recipe for disaster.</p> <p>That&rsquo;s where using electronic payments can come in to help. Zablock touts this method as a way to meet daily needs and to address a lot of pain points she&rsquo;s heard from small businesses. There&rsquo;s time <em>and</em> cost savings associated with not having to handle cash or checks; not needing to count money; and skipping trips to the bank and avoiding cell phone use for deposits.</p> <p>Zablock mentioned another interesting finding from the survey &ndash; that the top desire of small business owners is to attract new customers and grow their businesses. Until recently, the most important thing on business owners&rsquo; minds was to simply stay afloat, not necessarily grow. In more optimistic economic times, entrepreneurs are broadening their looks ahead.</p> <p>So what&rsquo;s the connection between wanting to grow your business and electronic payments? Zablock points out that an entire customer base &ndash; young adults &ndash; are much more inclined toward electronic methods than their parents&rsquo; generation of cash or check. Many don&rsquo;t carry checkbooks or even cash, so supporting electronic payments opens your business up to a different kind of customer. This is increasingly relevant when you consider the use of mobile technologies as well (smart phones, tablets, etc.)</p> <p>The potential benefits of electronic payment that Zablock mentions are clear: efficiency, cost savings and growing your business. So it may be worth researching further to determine if it&rsquo;s something you should implement for your small business venture. SBA is also here to help if you have questions about capital. Check out <a href="">a district office near you</a> and get in touch if you&rsquo;re looking for financial guidance.</p> <p>Interested in more insights and stories from National Small Business Week? If you missed the excitement last month, don&rsquo;t worry &ndash; you don&rsquo;t have to wait until next year! We&rsquo;ve got a <a href="">recap here with a highlights reel</a> you can check out to hear from our guests and small business experts.</p> Small Business Cents Financing Wed, 18 Jun 2014 17:00:16 +0000 kmurray 1090081 at Three Popular Start-Up Financing Options <p>Thinking about starting a business? Recent studies and reports have shown that entrepreneurs are <a href="" title="link to blog post">more optimistic than in recent years</a> when it comes to the state of their businesses this year, and that&rsquo;s great news! But always high on the list of concerns for starting a business &ndash; even in optimistic times &ndash; is financing. Here&rsquo;s a roundup of some ways, aside from avenues such as <a href="" title="link to loans information">SBA-backed loans</a>, to finance your business.</p> <p><strong>Credit Cards</strong></p> <p>According to expert Marco Carbajo, <a href="" title="link to blog post">credit cards are a major source of financing</a> for small business owners, with statistics even showing that more than 65% of small businesses using them on a frequent basis. It&rsquo;s a popular approach, but you should be sure to do your research to determine if it&rsquo;s the right one for you. Here are some tips from <a href="" title="link to article"></a> to help:</p> <ul> <li> Unless your business is incorporated &ndash; so if yours is a sole proprietorship, for instance &ndash; <em>you</em> are guarantor of all debts. So if your sales are slow and you fall behind on payments, you risk your personal credit rating and ability to borrow.</li> <li> It varies by state, but your credit-card issuer might still require that shareholders with significant ownership guarantee the line of credit &ndash; even if your business is incorporated.</li> <li> Potentially bringing on partners? Make sure your agreement states that they&rsquo;ll accept personal guarantees on all <em>existing</em> business debt. You need to address this specifically because in many states, new partners aren&#39;t automatically responsible for previous debts.</li> <li> Read the fine print. Don&rsquo;t accept an offer without checking into the details, understanding the terms of use and evaluating risks. Don&rsquo;t hesitate to ask a professional for guidance.</li> </ul> <p><strong>Friends and Family</strong></p> <p>Asking friends and family to borrow funds to help finance your business sounds like it could get awkward, but it doesn&rsquo;t have to. Treat the process just as professionally as you would an engagement with a bank. If you done right, you can potentially gain quicker access to the cash you need and jump through fewer hoops &ndash; after all, your friends or family already know you. Read more about borrowing from friends and family in <a href="" title="link to blog post about borrowing funds">our article here</a>, but think about these highlights as you consider this option:</p> <ul> <li> Think carefully about who you&rsquo;ll approach and make sure they understand the risks (and rewards) of getting involved. Keep in mind if your business doesn&rsquo;t work out and you can&rsquo;t repay your obligations, relationships could suffer.</li> <li> Be realistic about how much money you need. Instead of asking for the maximum, consider what you need to get you to a certain point in your business plan. Once you show you can repay that initial investment, you&rsquo;ll be in a better position to ask for more money if you need it.</li> <li> Write it down. You might think a verbal agreement with your friend or relative is sufficient given the personal relationship, but this is business. <a href="" title="link to">Consider this advice</a> from &quot;Any time you take money into a business, the law is very explicit: You must have all agreements written down and documented. If you don&#39;t, emotional and legal difficulties could result that end up in court. And if the loan isn&#39;t documented, you may find yourself with no legal recourse.&rdquo;</li> <li> Communicate. Show your business progress and share updates along the way, even if it&rsquo;s correcting mistakes you&rsquo;ve made with your business strategy. Checking in and sharing information shows that you&rsquo;re taking seriously the role others are playing in your venture and demonstrates professionalism.</li> </ul> <p><strong>Crowdfunding</strong></p> <p>Increasingly, crowdfunding is becoming a popular way for people to get startup financing for their businesses. You&rsquo;ve probably heard of Kickstarter campaigns &ndash; that&rsquo;s crowdfunding. It works through a collective cooperation of people who network and pool their money and resources together, usually online, to support efforts initiated by others. So it gathers multiple, smaller investments as opposed to a single source of funding. You can read more about <a href="" title="link to blog post">the details here</a>, but here are three other key considerations from <a href="" title="link to article"></a>:</p> <ul> <li> You should begin working on your crowdfunding campaign six months before you want to launch your project. When your campaign starts, you should&rsquo;ve already made a significant effort in letting people know about it collecting email addresses so you can really hit the ground running when you open the gates for your campaign.</li> <li> Set your funding goal as low as you can manage because some crowdfunding platforms, like Kickstarter, are &ldquo;all or nothing.&rdquo; For instance, if you set a goal of $1,000 and you meet it, then you get the money. If you raise only $500, you won&rsquo;t get anything. Read the fine print about the platform you choose so you can be strategic about your funding request.</li> <li> Don&rsquo;t forget to award your donors. You&rsquo;re asking people to take a risk on your business venture &ndash; there are no guarantees. So thank them and show your appreciation by offering your product or service at a discount when the time comes.</li> </ul> <p>You can also learn more from our online Learning Center course, &ldquo;<a href="" title="link to Introduction to Crowdfunding for Entrepreneurs article">Introduction to Crowdfunding for Entrepreneurs</a>.&rdquo;</p> <p>Beyond a &ldquo;traditional&rdquo; track of securing a loan from a bank, there are quite a few avenues to consider for financing your business. And with passion, professionalism and planning, you&rsquo;ll establish a good foundation for success down any of these paths.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="" title="link to 6 Tips for Borrowing Startup Funds from Friends or Family article">6 Tips for Borrowing Startup Funds from Friends or Family</a></li> <li> <a href="" title="link to Crowdfunding – Is it Right for Your Business? Where Do You Start? article">Crowdfunding &ndash; Is it Right for Your Business? Where Do You Start?</a></li> <li> <a href="" title="link to 5 Ways to Help Young Entrepreneurs Finance Their Business Ideas article">5 Ways to Help Young Entrepreneurs Finance Their Business Ideas</a></li> </ul> Small Business Cents Financing Starting Wed, 21 May 2014 11:59:01 +0000 kmurray 846801 at What to Know About Small Business Investment Companies (SBICs) <p>When it comes to financing, you probably already know that SBA doesn&rsquo;t lend money <em>directly</em> to small business owners and entrepreneurs, but has <a href="" title="link to programs">various programs</a> to help get small business ventures financed through local lenders. But did you also know that the <a href="" title="link to Small Business Investment Company (SBIC) Program info">Small Business Investment Company (SBIC) Program</a> has been helping small business access capital for more than fifty years?</p> <p>&nbsp;</p> <p><strong>What&rsquo;s the SBIC Program? </strong></p> <p>The Small Business Investment Company (SBIC) Program is a multi-billion dollar program that, in fiscal year 2013 alone, invested $3.5 billion in financing dollars to small businesses! So how does it work?</p> <p>SBICs are privately owned and managed investment funds. They&rsquo;re licensed and regulated by SBA and use their own capital plus funds &ndash; borrowed with an SBA guarantee &ndash; to make equity and debt investments in qualifying small businesses.</p> <p>The SBA doesn&rsquo;t invest <em>directly</em> into small business through the SBIC Program, but provides funding to qualified investment management firms that are experts in certain sectors or industries. For every $1 an SBIC raises from a private investor, the SBA will typically provide $2 of debt capital (with a cap of $150 million). Here&rsquo;s a look at how it works:</p> <p><img alt="SBIC flow chart depicts private investor funds and SBA funds funneling into SBICs funneling into small businesses" src="/sites/default/files/images/SBIC.png" style="width: 653px; height: 155px;" /></p> <p>Firms combine their own capital with funds borrowed from the federal government at low rates. In turn, they invest these funds in promising new ventures. And it&rsquo;s all done with zero taxpayer dollars!</p> <p>&nbsp;</p> <p><strong>What are the benefits of the SBIC Program? </strong></p> <p>There are benefits for the SBICs <em>and</em> the small business recipients!</p> <p><strong>Small businesses</strong> that qualify for assistance from the SBIC program can receive equity capital, long-term loans and expert management assistance. SBICs benefit small business owners by opening up greater access to equity capital and expert guidance they may not otherwise get through traditional venture capitalists.</p> <p><strong>Investment managers</strong> participating in the SBIC program can add to their own private investment capital with funds borrowed at favorable rates through the federal government.</p> <p>And ultimately, the national economy benefits from the SBIC program as the small businesses financed by SBICs continue to create jobs and generate tax revenues over the program&rsquo;s life.</p> <p>&nbsp;</p> <p>Want to learn more about the SBIC Program? Visit the <a href="" title="link to SBIC program pages">SBIC Program pages</a>, including the <a href="" title="link to SBIC frequently asked questions">FAQ</a>. Still have questions? Email <a href="" title="link to SBIC email"></a>.</p> Small Business Cents Financing Wed, 09 Apr 2014 16:43:23 +0000 kmurray 818001 at SBA's Disaster Loan Program Explained <p>Did you know that in the wake of a disaster, SBA provides low-interest disaster loans to homeowners, renters, businesses of all sizes and private, nonprofit organizations? In the aftermath of hurricanes, floods, earthquakes, wildfires, tornadoes and other disasters, SBA is the primary source of money from the federal government for long-term recovery assistance.</p> <p><strong>Am I eligible? </strong></p> <p>SBA&rsquo;s Disaster Loan Program is <em>not</em> exclusively for small businesses. These low-interest, long-term loans are available for damage to private property owned by individuals, families, businesses of all sizes and private nonprofits not fully covered by insurance.</p> <p> While property owners usually have some insurance coverage, often it does not cover all losses or even the <em>type</em> of hazard that caused the damage. And that&rsquo;s where a disaster loan comes into play.</p> <p><strong>What can I use the loan for?</strong></p> <p>There are actually a few different types of disaster loans available. SBA can provide up to $2 million in disaster assistance for businesses.&nbsp; This includes loans to cover <a href="" title="Go to business disaster loans page ">physical damage</a> and <a href="" title="Go to economic injury loan page ">economic injury</a> losses. Some applicants will qualify for <em>both</em> an economic injury loan and a physical disaster loan.&nbsp; Meanwhile, the dollar limit for the combined loans is $2 million.</p> <p><strong>Physical damage</strong> is probably what you think of first when it comes to a disaster &ndash; the more tangible damages done during a disaster. Businesses and nonprofit organizations of all sizes can apply. A physical disaster loan can address losses not fully covered by insurance and can go toward repairing or replacing:</p> <ul> <li> Real property</li> <li> Machinery</li> <li> Equipment</li> <li> Fixtures</li> <li> Inventory</li> <li> Leasehold improvements</li> </ul> <p><strong>Economic injury </strong>means that because of a disaster, you&rsquo;re unable to meet your business obligations and pay ordinary and necessary operating expenses. So, an economic injury disaster loan (or EIDL) provides the necessary working capital (of up to $2 million) to help your small business or private nonprofit organization survive until normal operations resume after a disaster.</p> <p><strong>Renters can also apply for disaster loans of up to $40,000 to repair or replace their disaster damaged personal property (like furniture, rugs, clothing, appliances&mdash;anything damaged by the disaster).&nbsp; Homeowners may borrow up to $200,000 to repair or replace disaster damaged real estate, plus an additional $40,000 to cover personal property losses.</strong></p> <p><strong>How does the process work? </strong></p> <ul> <li> After a presidential disaster declaration, first register with <a href="" title="link to FEMA">FEMA</a>. In most cases, you&#39;ll be referred to SBA for possible loan assistance. Then you should <a href="" title="link to online application">apply online</a>, which is the fastest way to receive a decision about your loan eligibility.</li> </ul> <ul> <li> Your loan processing is next. SBA will conduct a credit check and an onsite inspection to determine your losses. A loan officer will work with you to approve or decline a loan.</li> </ul> <ul> <li> Generally, within five days of signing SBA&rsquo;s loan closing documents, your first disbursement is made. A case manager will work with you to meet all your loan conditions and schedule the rest of your disbursements until you receive the full loan amount.</li> </ul> <p>So when disaster strikes, remember that SBA is here to help. <a href="" title="link to disaster video">Check out this short video</a> to learn more about how, and get <a href="" title="link to disaster assistance program information">more details here</a> about the disaster assistance program.</p> Small Business Cents Financing Managing Mon, 31 Mar 2014 15:53:00 +0000 kmurray 812171 at How to Calculate the Cost of Food for Your Culinary Business Venture <p>Are you hungry for information about launching your food-service small business? While there&rsquo;s a lot of shared <a href="" title="link to information about starting a business">information to get started across all industries</a>, the food industry poses unique opportunities and questions. One of the most common we see is how to calculate the cost of food.</p> <p>Here&rsquo;s one approach from small-business expert Sam Ashe-Edmunds, who dishes out <a href="" title="link to food cost article">food-cost calculations</a> into nine steps to help ensure that you&rsquo;ll be able to keep a consistent menu, please customers and remain profitable. Here&rsquo;s what he has to say:</p> <p><strong>Step 1</strong>: Pick a dish to start and list all of its ingredients &ndash; even condiments and garnishes. You&rsquo;ll want to make sure that the portion for each dish is the same so that it always <em>costs</em> the same.</p> <p><strong>Step 2</strong>: Calculate the cost of each ingredient. Take a head of lettuce, for example. If it costs 75 cents and you get 30 leaves, the lettuce cost for a dish that includes <em>one</em> lettuce leaf would be about 2.5 cents. Ashe-Edmunds reminds us to include a proportion of any expenses directly related to purchasing foods, such as delivery fees or interest.</p> <p><strong>Step 3</strong>: Add up the costs of all the ingredients for the dish, but don&rsquo;t include costs for labor or actually serving the dish.</p> <p><strong>Step 4</strong>: To start figuring out if you&rsquo;ve priced the meal right, divide the menu price by the food cost to calculate the percentage of the price that comes from food. If you charge $10 for a meal for which food costs are $5, then your food cost is 50 percent.</p> <p><strong>Step</strong> <strong>5</strong>: Now, you&rsquo;ll want to determine overhead cost per meal, which includes everything <em>not </em>related to food that&rsquo;s required to run your restaurant. This includes things such as labor, rent, marketing, taxes, etc. So, consider what it will cost to run your restaurant on a daily basis &ndash; then divide that number by the number of customers you think you&rsquo;ll serve every day. If your overhead is $1,000 per day and you have 200 customers each day, your overhead <em>per person</em> is $5.</p> <p style="margin-left:.5in;"><strong>TIP</strong>: Keep employee meals and food theft in this overhead figure as well, because they&rsquo;re not included as direct costs to serve a meal but can&rsquo;t be left out.</p> <p><strong>Step 6</strong>: Using your overhead costs as a guide, decide your ideal food-cost percentage. If you charge $10 for a meal and your overhead cost is $6, then your food costs can&rsquo;t be more than $4 to break even. Want a $2 profit per meal? Then you&rsquo;ll have to charge $12 for that particular dish.</p> <p><strong>Step 7</strong>: Take a look at the prices listed in your menu to figure out if they&rsquo;ll cover your overhead and food costs &ndash; and if you&rsquo;ll be able to make a profit. So if you&rsquo;ve calculated an ideal food-cost percentage of 20 percent and a dish uses $4 of ingredients, you can&rsquo;t sell that dish for any less than $20.</p> <p><strong>Step 8</strong>: You <em>may</em> need to calculate different food-cost percentages for different services or items, such as a breakfast menu versus dinner menu, because of different requirements &ndash; some less, some more &ndash; to satisfy each dish.</p> <p><strong>Step 9</strong>: Finally, examine your sales by item to determine if your food-cost percentages are adequate to keep your restaurant in business. If it turns out you&rsquo;re selling at primarily a low cost, you might need to raise prices (or lower food costs) to be profitable.</p> <p style="margin-left:.5in;"><strong>TIP</strong>: Get a more complete picture of your food costs by checking out total food costs per service and dividing them by total sales. Then you won&rsquo;t have to calculate the actual cost of each menu item.</p> <p><a href="" title="link to food cost article">Ashe-Edmunds&rsquo;</a> offers just one approach to determining the cost of food. You can explore these additional resources from around the web for more insight:</p> <ul> <li> <a href="" title="link to How to Make Food Costs Projections For Your New Restaurant article">How to Make Food Costs Projections For Your New Restaurant</a></li> <li> <a href="" title="link to A Quick Guide on Pricing Restaurant Menu Items article">A Quick Guide on Pricing Restaurant Menu Items</a></li> <li> <a href="" title="link to Restaurant Operations: Food And Menu Pricing For Your Restaurant article">Restaurant Operations: Food And Menu Pricing For Your Restaurant</a></li> </ul> Small Business Cents Managing Starting Wed, 19 Mar 2014 12:03:21 +0000 kmurray 807951 at Business Loan Opportunities for Military Veterans in 2014 <p>The service of veterans has done a tremendous amount for the United States &ndash; on our own soil and around the world. Many continue their contributions to the country by channeling their skills and leadership into entrepreneurial endeavors that help strengthen our economy.</p> <p>And now through the rest of the fiscal year, SBA&rsquo;s Express Loan Program will make it easier to get loans in the hands of veterans so they can succeed in their business ventures.</p> <p><strong>Loan fees</strong></p> <p>Through the end of September, SBA has set the borrower upfront fee to zero for all veteran loans authorized under the SBA Express program, which supports loans of up to $350,000.</p> <p>Additionally through the end of the fiscal year, fees on all loans (and not just for veterans)<a> </a>$150,000 and under are set to zero.&nbsp;</p> <p>These initiatives make the loans cheaper for the borrower, which is just another way SBA is looking to serve small business owners &ndash; and those veterans who have served us &ndash; as they look for ways to access capital.</p> <p><strong>About the Express Loan Program</strong></p> <p>One great feature of the <a href="" title="link to Express Loan Program">Express Loan Program</a> is that it has an accelerated turnaround time for SBA review. You&rsquo;ll receive a response to your application within 36 hours.</p> <p>With a fast turnaround, streamlined process and easy-to-use line of credit, this program is SBA&rsquo;s most popular loan delivery method &ndash; nearly 60 percent of all 7(a) loans over the past decade being authorized through the program. Since the program began, it has also been one of the most popular delivery methods for getting capital into the hands of veteran borrowers.</p> <p><strong>Getting started</strong></p> <p>Interested in exploring loan options to get your business started? Check out <a href="">these loans</a> that fall under Express Program standards. Our <a href="" title="link to business loan checklist">business loan checklist</a> can also help prepare you for the application process, in addition to taking a look at the <a href="" title="link to credit factors information">credit factors</a> lenders will consider when you apply for an SBA-backed loan.</p> <p>In the transition from military service to customer service, you&rsquo;ll find great resources from SBA to help you find success. And if you&rsquo;re looking for funding to get your business off the ground, these loan perks may make it possible to do just that.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="" title="10 Tips for Veteran-Owned Businesses Seeking to Sell to the U.S. Federal Government blog post">10 Tips for Veteran-Owned Businesses Seeking to Sell to the U.S. Federal Government</a></li> <li> <a href="" title="Leaving Military Life for Entrepreneurship – 5 Essential Resources That Can Help blog post">Leaving Military Life for Entrepreneurship &ndash; 5 Essential Resources That Can Help</a></li> </ul> Small Business Cents Financing Wed, 22 Jan 2014 11:03:00 +0000 kmurray 790271 at Financing Your Small Business With a Microloan <p>Are you starting or expanding a business, and in need of a loan to help make it happen? While there are some larger loan options available, many entrepreneurs &ndash; particularly freelance, online and home-based businesses &ndash; require only a few thousand dollars to get started. If this is the case for you, consider a microloan.</p> <p><strong>What&rsquo;s a microloan?</strong></p> <p>Microloans are loans in what would be considered &ldquo;smaller&rdquo; amounts than conventional business loans. SBA&rsquo;s Microloan program, for instance, provides loans of up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.</p> <p><strong>What can I use a microloan for?</strong></p> <p>Microloans can be used for a number of things, including:</p> <ul> <li> Working capital</li> <li> Inventory or supplies</li> <li> Furniture or fixtures</li> <li> Machinery or equipment</li> </ul> <p>You <strong>can&rsquo;t</strong> use funds from an SBA microloan to pay any existing debts or to purchase real estate.</p> <p><strong>What are the terms and interest rates?</strong></p> <p>Microloan repayment terms vary according to several factors, including:</p> <ul> <li> Loan amount</li> <li> Planned use of funds</li> <li> Requirements determined by the intermediary lender</li> <li> Your needs as a small business borrower</li> </ul> <p>The maximum repayment term allowed for an SBA microloan is six years.&nbsp;</p> <p>Interest rates vary, depending on the intermediary lender and their costs from the U.S. Treasury. In general, these rates are between 8 and 13 percent.</p> <p><strong>How can I get a microloan? </strong></p> <p>SBA provides funds to certain intermediary lenders, which are nonprofit community-based organizations with experience in lending, management and technical assistance. These intermediaries manage the Microloan program for eligible borrowers. So you don&rsquo;t go directly to SBA for a microloan &ndash; you work with <a href="" title="link to lender list">your local lender</a>.</p> <p>Each intermediary lender has its own lending and credit requirements. Typically, they require some type of collateral as well as the personal guarantee of the business owner. You may also have to fulfill training or planning requirements before a lender considers your loan application.</p> <p><strong>Learn more</strong></p> <p>For more information about microloan and if one might be right for you, contact your local <a href="" title="Go to SBA district office page ">SBA District Office</a> or check out this <a href="" title="link to lender list">list of participating microloan intermediary lenders</a>.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="" title="link to 6 Step Guide- How to Get a Business Loan blog post">6 Step Guide- How to Get a Business Loan</a></li> </ul> Small Business Cents Financing Managing Starting Wed, 15 Jan 2014 12:35:50 +0000 kmurray 787261 at How Small Businesses Can Get Tax Deductions for Charitable Giving <p>Most small businesses make charitable donations. In fact, <a href="" title="link to survey">surveys have shown</a> that about 75 percent of small business owners donate some portion of their profits &mdash; about 6 percent on average &mdash; to charitable organizations each year.</p> <p>As we&rsquo;re in the midst of the holiday season (and tax season looms), many small business owners are likely considering charitable contributions and wondering how such donations might impact the bottom line in terms of tax deductions. First, it&rsquo;s important to choose the right charity and avoid certain pitfalls that could leave you in a bind.</p> <p><strong>Choosing the right charity</strong></p> <p>Only certain types of contributions qualify for a deduction (more on that later), so if getting the tax benefit is part of your goal, it&rsquo;s important to properly research any organizations to which you plan to donate. However, you might also think about other potential benefits (aside from the great feeling you get from helping others) such as how the donation aligns with your public relations strategy for corporate social responsibility and how meaningful a volunteer project or fundraising initiative might be for employees.</p> <p>Although tax deductions and the rewarding benefit of helping those in need are often goals in charitable giving, you should also consider that such acts also open up an opportunity to showcase the good work you&rsquo;re doing in the community to potential employees and customers. <a href="" title="link to study about company philanthropy">85 percent of consumers have a more positive image of companies who are philanthropic</a>. Employees who have a favorable impression of their company&rsquo;s philanthropic program are <a href="" title="link to article about company philanthropy">five times more likely to remain with their employer</a>.</p> <p>For more on aligning your charitable giving strategy with your business strategy, <a href="" title="link to five tips from Small Business Trends">follow these five tips from Small Business Trends.</a> You should also consult <a href="" title="link to the FTC’s checklist for avoiding charity scams">the FTC&rsquo;s checklist for avoiding charity scams</a>.</p> <p><strong>Getting the deduction</strong></p> <p>Again, not everything qualifies. But by following these general guidelines and consulting your accountant or tax attorney, your small business should be set to get credit.</p> <ul> <li> <strong>Identify an eligible charity</strong>, usually a 501(c)(3), using <a href=";-Non-Profits/Exempt-Organizations-Select-Check">this IRS search tool</a></li> <li> <strong>Make an eligible donation</strong>: cash, volunteered services, sponsorship of a charity event or the donation of inventory or services</li> <li> <strong>Understand that each category has its own limitations</strong> (for example, you can&rsquo;t deduct the value of your volunteered service, but you <em>can</em> deduct expenses incurred such as supplies) &mdash; <a href="" title="link forms and information from the IRS">links to all the related forms and limitation information are available from the IRS</a> (see also: <a href="" title="link to IRS Publication 526">IRS Publication 526</a>)</li> <li> <strong>Ensure the donation is paid in full by the end of the tax year</strong> and reported through <a href="" title="link to Form 1040, Schedule A">Form 1040, Schedule A</a></li> <li> <strong>Take your deduction,</strong> but remember that the IRS limits the amount of charitable donations that can be considered tax-deductible to 50 percent of your adjusted gross income</li> <li> <strong>Keep records </strong>&mdash; you&rsquo;ll want them in the event of an IRS audit. Generally, an organization should give you a written statement if it receives a contribution from you</li> </ul> <p>Charitable giving boils down to determining your strategy, properly researching the organization to which you wish to donate and following the IRS&rsquo; guidelines for giving. Do those three things, and your small business will be well on its way to giving back.</p> Small Business Cents Financing Managing Taxes Mon, 16 Dec 2013 12:53:47 +0000 jdelung 778891 at The Truth Behind Government Grants for Small Businesses <p>Financing your small business ventures is likely one of your biggest concerns as an entrepreneur. One route you might be considering is to apply for grants, but there are strict guidelines when it comes to being eligible for any government grants. There <em>are</em> some instances that might make you eligible, but it depends on what kind of business you&rsquo;re in and what the government and taxpayers may receive in return for their investment in your endeavor. Here&rsquo;s what you should know.</p> <p><strong>Is my business eligible? </strong></p> <p>Federal and state governments <strong>don&rsquo;t</strong> provide grants to:</p> <ul> <li> Start a business</li> <li> Pay off debt</li> <li> Cover operational expenses</li> </ul> <p>Grants from the federal government are authorized through bills passed by Congress and signed by the President &ndash; and grant authority varies widely across the various agencies (such as SBA, USDA, DOE, etc.).</p> <p>Federal grants are typically aimed at specific industries and causes identified by the government. These usually include scientific and medical research, conservation efforts, and so on.</p> <p>Sometimes at the state government level, business grants or &ldquo;discretionary incentive grants&rdquo; are available, but they&rsquo;re still closely tied to the agency&rsquo;s agenda. These grants usually serve to advance regional economies and promote causes, such as clean energy development. Unfortunately for small businesses, however, state grants are often geared toward large businesses. They may also require that the grant be matched or combined with other forms of financing such as a loan.</p> <p><strong>Research-and-Development Grants</strong></p> <p>If your small business is engaged in scientific research and development (R&amp;D), you may qualify for federal grants under the <a href="" title="Small Business Innovation Research (SBIR)">Small Business Innovation Research (SBIR)</a> and the <a href="" title="Small Business Technology Transfer (STTR)">Small Business Technology Transfer (STTR)</a> programs.</p> <p>SBIR and STTR programs encourage small businesses to undertake R&amp;D projects that:</p> <ul> <li> Meet federal R&amp;D objectives</li> <li> Have high potential for commercialization</li> </ul> <p>You can explore <a href="" title=""></a> to learn more about specific SBIR and STTR programs and opportunities throughout the federal government.</p> <p><strong>What&rsquo;s the bottom line? </strong></p> <p>The bottom line is that if you&rsquo;re looking for free money, you won&rsquo;t get it from the government. Unless you can fill a specialty area, you won&rsquo;t have luck securing funding from a federal grant. In general, if you&rsquo;re looking to start or grow your business, you should consider exploring other options like <a href="" title="link to loans information">loans</a> or maybe <a href="" title="link to crowdfunding information">crowdfunding</a>.</p> <p>Want to learn more? Check out <a href="" title="link to website"></a> &ndash; a centralized hub of more than 1,000 different grant programs across all federal grant-making agencies &ndash; to find out more and apply for federal funding opportunities.</p> Small Business Cents Financing Mon, 09 Dec 2013 15:12:47 +0000 kmurray 775011 at SBA's 7(a) Loan Program Explained <p>Obtaining financing for your business ventures is often challenging for entrepreneurs. From being in the startup phase to growing your business, you may face difficulties with the requirements of traditional bank loans. But the 7(a) Program may be able to help &ndash; it&rsquo;s SBA&rsquo;s primary and most popular program. Here&rsquo;s some insight to see if this is the right option for you.</p> <p><strong>Am I eligible? </strong></p> <p>If you can demonstrate a need for funds and have a sound business purpose in mind, you&rsquo;re on the right track. To be considered eligible for the SBA 7(a) Loan Program, your business must meet SBA&rsquo;s <a href="" title="link to size standards article">size standards</a> and be considered small within your particular industry, operate for profit and you must have reasonable equity to invest.</p> <p>You&rsquo;re also required to do, or propose to do business, in the United States or its possessions. Another eligibility requirement is that you must have tried to use other financial resources, including personal assets, before applying for a loan.</p> <p><strong>How can I use 7(a) funds?</strong></p> <p>The 7(a) Program lets you get loan amounts (up to $5 million) to fund startup costs, buy equipment and more. Here&rsquo;s what else you can do with 7(a) funds:</p> <ul> <li> Purchase new land (including construction costs)</li> <li> Repair existing capital</li> <li> Purchase or expand an existing business</li> <li> Refinance existing debt</li> <li> Purchase machinery, furniture, fixtures, supplies or materials</li> </ul> <p><strong>What are the benefits?</strong></p> <p>The 7(a) Program offers flexibility, longer terms and potentially lower down payments compared to other financing options. There are also specialized programs for individuals interested in <a href="" title="link to exporting article">exporting</a>; those located in <a href="" title="link to rural business loans article">underserved communities</a>; members of the <a href="" title="link to military programs article">military community</a>; and small businesses owners looking to meet their <a href="" title="link to capital needs article">short-term and cyclical working capital needs</a>.</p> <p><strong>What are the repayment terms?</strong></p> <p>Most 7(a) term loans are repaid with monthly payments of principal and interest. For fixed-rate loans, the payments stay the same because the interest rate is constant. For variable-rate loans, the lender can require a different payment amount when the interest rate changes. &nbsp;</p> <p><strong>What else should I know? </strong></p> <p>Keep in mind that SBA doesn&rsquo;t fund these loans directly to small business owners, but banks receive a guarantee that the SBA will repay a portion of the loan if you default on payments. If you think you&rsquo;re suited for a 7(a) loan, check out <a href="">these resources</a> and a checklist to help prepare your loan application.</p> <p>&nbsp;</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="" title="General Small Business Loans: 7(a) article">General Small Business Loans: 7(a)</a></li> <li> <a href="" title="Other Financial Assistance article">Other Financial Assistance</a></li> </ul> Small Business Cents Financing Starting Wed, 30 Oct 2013 11:49:45 +0000 kmurray 756233 at The 504 Loan Program Explained <p>Are you looking to expand or modernize your small business? If you&rsquo;re exploring your financing options, then SBA&rsquo;s 504 Loan Program (or Certified Development Company (CDC) loan) may be for you. Designed especially to help small businesses grow, you can use funds to make purchases for real estate and equipment, just to name a few. Read on for more details to see if this is a good option for you.</p> <p><strong>Am I eligible?</strong></p> <p>In addition to operating your business for profit, you&rsquo;ll need to have a feasible business plan and relevant management expertise to be considered eligible for a 504 loan. As with any business seeking SBA&rsquo;s financial assistance, you&rsquo;re also required to do business in the United States or its territories. And you must have tried to use other financial resources, including personal assets, before applying for a loan. Here are some other requirements to consider:</p> <ul> <li> Your business must have a tangible net worth of less than 15 million dollars.</li> <li> Your business must have an average net income less than $5 million after taxes for the preceding two years.</li> <li> You must have the ability to repay the loan on time from the projected operating cash flow of your business.</li> </ul> <p><strong>How can I use the funds?</strong></p> <p>Loan funds can be used to:</p> <ul> <li> Purchase land;</li> <li> Purchase existing buildings;</li> <li> Purchase long-term machinery and equipment;</li> <li> Purchase improvements (including grading, street improvements, utilities, parking lots and landscaping); or</li> <li> Build new facilities or modernize, renovate or convert existing facilities.</li> </ul> <p>A 504 loan cannot be used for:</p> <ul> <li> Working capital or inventory;</li> <li> Consolidating, repaying or refinancing debt (although for a portion of the project, you may refinance debt associated with buying or renovating equipment or facilities); or</li> <li> Speculation or investment in rental real estate.</li> </ul> <p><strong>What are the amounts and repayment terms?</strong></p> <p>Maximum loan amounts are determined by <a href="" title="Link to page about loan amounts">how they&rsquo;ll be used</a> &shy;&ndash; if they support goals associated with job creation, public policy or small manufacturing. The loan terms also vary. For land and buildings, the loan term is 20 years; it&rsquo;s a 10-year term for machinery and equipment.</p> <p>Think the 504 Loan Program might be for you? <a href="" title="Link to Local Assistance tool">Find your local CDC</a> and learn more about the <a href="" title="Link to application process page">application process</a> today.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="" title="SBA 504 Loan Program: Helping Businesses Grow and Create Jobs video">SBA 504 Loan Program: Helping Businesses Grow and Create Jobs</a> (video)</li> <li> <a href="" title="CDCs and CDCs: Community Development Corporations and SBA Certified Development Companies article">CDCs and CDCs: Community Development Corporations and SBA Certified Development Companies</a></li> </ul> Small Business Cents Financing Mon, 21 Oct 2013 11:39:06 +0000 kmurray 754926 at 5 Steps to Help You Decide What Salary to Pay Your Employees <p>If you&rsquo;re a growing small business and need help, there are a number of non-employee options available to help you staff your business (<a href="" title="Staffing Your Growing Business blog post">explained here</a>), but if you do choose to move forward with part- or full-time employees, what should you pay them?</p> <p>The general rule of thumb is to pay a salary based on experience, location and the available talent pool. But how do you bring all these factors together and come up with a number that potential candidates will find attractive (and you can afford)?</p> <p>In this <a href="" title="link to online video about pay range">quick online video</a>, Brad Farris, a small business advisor and managing editor of <a href="" title="link to"></a> (a service of Anchor Advisors, Ltd., a Chicago small business consulting firm), offers some useful tips for helping find a solid pay range to advertise your job and attract strong candidate pools.</p> <p>Here&rsquo;s what he recommends:</p> <p><strong>Have a solid job description</strong></p> <p>If you don&rsquo;t know what you&rsquo;re looking for, it&rsquo;s going to be really hard to find it. In particular, when you&rsquo;re looking at pricing a job there is often a wide range of jobs that have the same title. So you need to be really specific about the range of duties and responsibilities of the job.</p> <p>The problem for many small businesses, as Farris explains, is that they are often piecing together jobs based on the work that needs to be done in the organization, which means that these job descriptions are often for jobs that don&rsquo;t exist in the real world &ndash; which makes it hard to figure out what that job is worth. Farris suggests trying to build a job description that aligns as closely as possible with what other organizations advertise (search online for job description templates). This will make it easier to price the job.</p> <p><strong>Look around &ndash; What is the industry paying for that job?</strong></p> <p>Do an online search for the job you&rsquo;re looking to create to try and gauge how the market is pricing that job. For example, search for &ldquo;social media and content management specialist salary range.&rdquo; Then narrow your search to your region or city: &ldquo;social media and content management specialist salary range Boston.&rdquo; What you&rsquo;re looking for are local guides or salary surveys that can help you better understand the market for this job in your area.</p> <p>Next, search trade magazines or sites potential candidates might visit. These often publish their own salary surveys.</p> <p>Ask around &ndash; talk to other business owners what they pay for jobs like the one you&rsquo;re trying to hire for. Try to compare apples to apples, so get into the specifics of the duties involved.</p> <p><strong>Conduct advanced searches on job sites</strong></p> <p>Even after completing this type of research, you may just find you still haven&rsquo;t found the market guide price that fits your job description. One way to drill down a little more is to query online job sites like CareerBuilder, Monster or Using the advanced search tool, you can really drill down into specific job keywords, categories, (exclude location for now, you&rsquo;ll come back to that later) that match your needs &ndash; and if you can, exclude jobs that don&rsquo;t show salary information in your search. Your search results will give you a good picture of the current market &ndash; what employees are paying, right now, for jobs like yours. Browse the results and search for the job descriptions that best match yours; print these out and narrow down your list to the ones that are the closest. What you should see start to emerge is a salary range &ndash; some jobs may have more responsibility, some less &ndash; but keep that range in mind.</p> <p><strong>Do a cost of living comparison</strong></p> <p>Farris next recommends using a salary relocation calculator (easily found online) to further narrow your search. So, say your printed list of comparable job descriptions includes a good fit but is for a job based across the other side of the country. The cost of living calculator will give you a good indication of what an equivalent job commands in salary in your city or neighborhood, further narrowing the salary range that you had earlier.</p> <p><strong>Advertise a salary range</strong></p> <p>Instead of picking a number and sticking with it, Farris recommends keeping that narrowed down salary range in mind, and even including it in your job advertisement (for example, &ldquo;salary range - $25-30,000 commensurate with experience). Then take a look at some candidates at both the low and high end of the range. Ask yourself if you&rsquo;d be able to pay $5,000 more to get a candidate with greater skill or experience. If you don&rsquo;t see the value, then go ahead and hire them at the low end of the range.</p> <p>The key is to remember that having a salary range gives you the flexibility to bring in a solid pool of talent; then assess individually where they are against the market.</p> <p><strong>Related Blogs</strong></p> <ul> <li> <a href="" title="5 Tips for Setting your Salary as Business Owner article">5 Tips for Setting your Salary as Business Owner</a></li> <li> <a href="" title="4 Tips to Hiring your First Employee article">4 Tips to Hiring your First Employee</a></li> <li> <a href="" title="7 Ways to Lead and Empower Your Team – Because Satisfied Employees Make for Happy Customers article">7 Ways to Lead and Empower Your Team &ndash; Because Satisfied Employees Make for Happy Customers</a></li> <li> <a href="" title="Employee Benefit Plans – What’s Law and What’s Optional article">Employee Benefit Plans &ndash; What&rsquo;s Law and What&rsquo;s Optional</a></li> </ul> Small Business Cents Managing Mon, 23 Sep 2013 14:11:23 +0000 Caron_Beesley 753932 at 6 Step Guide- How to Get a Business Loan <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Money is the lifeline of any business, so whether you&rsquo;re starting a business or running an existing one, securing financing is a major factor, especially for small businesses. &nbsp;Many budding entrepreneurs find the task daunting and don&rsquo;t even know where to begin.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Here&rsquo;s a simple yet practical guide on how to go about preparing to apply for a small business loan.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">1.&nbsp;&nbsp;&nbsp; What criteria do banks look for in making small business loans?</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Different banks or lending institutions may have different standards, but in general, in&nbsp;order to consider your application for a small business loan, banks will require:</span></span></p> <ul> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">The loan must be for a sound business purpose. For <a href="">SBA-guaranteed loans</a>, the business must be eligible based on size, use of loan proceeds and the nature of the business (no lending, speculating, passive investment, pyramid sales, gambling, etc.)</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">You and your partner(s) are of good character, have experience and good personal and/or business credit history</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Ability to pay back the loan- reasonable to strong collateral (personal and business assets) is very important. SBA expects the loan to be fully secured, but we will not decline a request to guaranty a loan if <em>the only</em> unfavorable factor is insufficient collateral. And of course, owners must have personal equity investment in the business/skin in the game.</span></span></li> </ul> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">2.&nbsp;&nbsp;&nbsp; What information will you need?</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Different lenders may require more or fewer documents, but in general, you will need:</span></span></p> <ul> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Personal and business credit history</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Personal and business financial statements for existing and startup businesses&nbsp;and as well as a projected financial statements</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Strong, detailed business plan (including personal information such as bios,&nbsp;education, etc.)</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Cash flow projections for at least a year, and</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Personal guaranties from all principal owners of the business</span></span></li> </ul> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">3.&nbsp;&nbsp;&nbsp; How can you set yourself up from the beginning to make the process easier? (i.e. accounting systems, etc.)</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Be prepared; be thorough; be truthful.</span></span></p> <ul> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Choose your lending institution carefully. Larger banks tend to shy away from small loans as they are less profitable and take the same amount of underwriting and servicing. That doesn&rsquo;t mean large banks do not make small loans; it is just more difficult.</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Approach banks or lending institutions you have worked with or are a customer of</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Explore community banks and Credit Unions</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Talk to a lending officer and find out exactly what documentation they require</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Be thorough, bring everything they ask. Many loan applications are denied or face unnecessary hurdles because of incomplete applications.</span></span></li> </ul> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Even before you start gathering and organizing the information required by lenders to consider your application, you should educate yourself regarding business loans so you can understand and discuss intelligently with the lending officers when the time comes.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">4.&nbsp;&nbsp;&nbsp; What is the typical size of a small business loan?</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Small businesses come in many sizes, from a start-up of a one-person company to hundreds of employees, and their financial needs vary accordingly, so &ldquo;typical&rdquo; also varies. That said, in the banking industry the median small business loan is about $130,000 - $140,000 with highest around $250,000. SBA small business loans range from about $5,000 (microloans) to $5 million (largest guaranteed) with the average loan around $371,000.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">5.&nbsp;&nbsp;&nbsp; How can you get financing to start a business since many banks want to fund growth?</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Start-ups are probably the most difficult ventures when it comes to securing financing. Many start-up businesses seek financing from family, friends and credit cards.&nbsp; If the credit is sound, the business plan strong and you have enough personal resources to invest and collateral to guarantee, smaller, community banks and&nbsp; other community financial institutions and Credit Unions may consider lending you money.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">Your best bet by far is SBA assistance. Begin by visiting <a href="" style="font-size: 12px;">SBA&#39;s website</a> , where you will find a wealth of information not only on how to secure a small business loan but equally importantly, other services and training opportunities to help you succeed.</span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><strong style="font-size: 12px;">6.&nbsp;&nbsp;&nbsp; Are there associations that can help?</strong></span></span></p> <p><span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;">SBA works closely with a large network of partners that leverage SBA resources and are just one phone call away and ready to provide extensive help.</span></span></p> <ul> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><a href="">SBA District/Branch Offices</a>&ndash; at least one in every state</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><a href="">SCORE</a>&ndash; (approximately 300 chapters nationwide)</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><a href="">SBDCs</a> &ndash; Small Business Development Centers; (approximately 900 locations nationwide; associated with higher education institutions (colleges and universities)</span></span></li> <li style="margin-left: 0.5in;"> <span style="font-size:12px;"><span style="font-family:arial,helvetica,sans-serif;"><a href="">WBCs</a>- Women&rsquo;s Business Centers (approximately 100 educational centers nationwide)</span></span></li> </ul> Small Business Cents Financing SBA News and Views Starting Wed, 04 Sep 2013 21:53:27 +0000 ngoriel 752768 at Resources to Help Your Woman-Owned Business Succeed <p>According to the <a href="" title="link to survey of business owners">U.S. Census 2007 Survey of Business Owners</a>, women owned 7.8 million businesses, representing almost 30 percent of all companies in the country. It&rsquo;s also worth mentioning that the growth of women-owned firms has outpaced the growth of other types, having increased by just about 44 percent between 1997 and 2007.</p> <p>So, what can you do to join the ranks of these successful women business owners? Are you exploring your options for capital? If you&rsquo;re looking for help to finance your business venture, check out these resources.</p> <p><strong>SBA Loan Programs and Online Loan Search Tool</strong></p> <p>Although no government loan programs exist exclusively for for women business owners, the SBA is one of the largest loan guarantors in the country and offers a variety of <a href="" title="SBA Loan Program Information">loan programs</a> to small businesses.</p> <p>Keep in mind that the SBA doesn&rsquo;t lend the money directly; it provides a guarantee to banks and lenders for the money they lend to <a href="">small</a> businesses owners. This protects the lenders&rsquo; interests by promising to pay a portion (the percentage varies by the type of loan) if the business owner defaults on the loan, so the lender is more likely to take the risk if it wouldn&rsquo;t have without the guarantee.</p> <p><strong><em>Did you know?</em></strong> SBA loans are three to five times more likely to go to women than non-SBA loans. SBA&rsquo;s leading loan programs include <a href="" title="SBA 7(a) Loan Information">7(a)</a> and <a href="" title="SBA 504 Loan Information">504</a>, but women-owned businesses often need small-scale financing, so <a href="" title="link to SBA microloans">SBA microloans</a> are another option to consider.&nbsp;In fiscal year 2011, a little more than half of all microloans went to businesses owned in whole, or in the majority, by women.&nbsp;</p> <p><strong>Online Resources from</strong></p> <p>With Business USA&rsquo;s <a href="" title="link to Business USA financing search tool">financing search tool</a>, you can find out about loan programs based on your business profile and needs. The <a href="" title="link to loans and grants information">Loans and Grants</a> section of is also great to explore to learn more about the loans and grants that may be available to you.</p> <p>You can also check out the online courses, videos and chat sessions available in <a href="" title="link to SBA’s Learning Center">SBA&rsquo;s Learning Center</a> that are tailored to helping small business owners understand financial options, loans, processes, etc.</p> <p><strong>Women&rsquo;s Business Centers</strong></p> <p>Overseen by SBA&rsquo;s Office of Women&rsquo;s Business Ownership, <a href="" title="link to Women’s Business Centers">Women&rsquo;s Business Centers</a> (WBCs) can guide women through the process of finding and applying for an SBA loan. They also offer regular training seminars on financing topics. You&rsquo;ll find that some WBCs also provide access to alternative capital financing programs. And with 110 offices across the country, you&rsquo;re bound to find one nearby. WBCs are a great resource if you&rsquo;re looking for other types of counseling and training as well, so check out a location near you to get the help you need to start or grow your business.</p> <p><strong><em>Did you know?</em></strong> SBA <a href="" title="Link to data source">data</a> has shown that businesses that receive assistance from WBCs have significantly better survival rates than those that don&rsquo;t receive similar support.</p> <p><strong>Other Financing Options</strong></p> <p>Have you considered options like <a href="" title="link to crowdfunding article">crowdfunding</a> or peer-to-peer lending? These avenues for funding allow you to make your business case to others &ndash; usually online &ndash; with the hope that someone will make an investment. Given the tough times entrepreneurs are also facing with the current economic climate, methods like crowdfunding have become a popular and alternative method of raising finance for a business.</p> <p><strong>Additional Resources</strong></p> <ul> <li> <a href="" title="link to SBA Local Offices"><strong>SBA Local Offices</strong></a>: Another in-community go-to resource for business counseling, training and loan information. These offices oversee the delivery of SBA&rsquo;s programs, including loans, nationwide. You can also locate your office on Twitter and Facebook <a href="">here</a>.</li> <li> <a href="" title="Women-Owned Businesses information"><strong>Women-Owned Businesses</strong></a>: Learn about the wide range of federal programs available to help women owned small businesses start up, grow and succeed.</li> <li> <a href="" title="link to National Association of Women Business Owners"><strong>National Association of Women Business Owners</strong></a> (NAWBO): A membership organization that provides resources and networking opportunities for women in business.</li> <li> <strong><a href="" title="link to the National Women's Business Council website">National Women&rsquo;s Business Council</a></strong>: <span class="st">Advisory panel to the President and Congress on economic issues important to women business owners.</span></li> </ul> Small Business Cents Financing Tue, 03 Sep 2013 12:01:11 +0000 kmurray 752573 at Bookkeeping Basics, Part 2: How to Set Up and Manage Accounts Receivable <p>If you&rsquo;re new to business or are out-growing your current spreadsheet-based accounting system, it might be time to look at establishing a more formalized accounts receivable process. In part one of this two-part series on bookkeeping basics, I covered the <a>steps you need to take to set-up and manage accounts payable </a>(i.e. the bills you need to pay) and using it as a tool to help you manage cash flow and inform your overall budgeting management process. As a new business owner, whether you are a freelancer or multi-employee company, it&rsquo;s equally important to keep track of who owes you money!</p> <p>A professionally managed accounts payable system not only ensures you can track and manage what you are owed, who has paid you and what&rsquo;s outstanding; it will also give your business a professional image and ensure your figures are in order when it comes to tax season.</p> <p>Here are some tips for setting up a workable accounts receivable system that will streamline your billing and receipts.</p> <p><strong>Setting Up Your System</strong></p> <p>Whether you are using a traditional spreadsheet or an online accounting program such as QuickBooks, Outright, or Expensify, you&rsquo;ll need to start collating all your open invoices and balances. You may also want to integrate your time sheet into the same system &ndash; certain software lets you streamline the process by auto-generating invoices from electronic timesheets.&nbsp; Automating the entire billing system is another option &ndash; if you are generating more than 5-10 invoices a week, then it may be worth looking into. Read this blog for tips: <a href="" title="blog about online software for billing processes">Going Beyond the Spreadsheet &ndash; Automate Your Billing Process with Online Software</a>.</p> <p><strong>Establishing Your Terms of Payment</strong></p> <p>Each piece of work you undertake is likely to be different &ndash; if you&rsquo;re an independent contractor, your hourly rate may vary, and perhaps you charge one project by the hour but others for a single project fee.&nbsp; You may also have a regular set of clients whom you invoice or it may change from month to month.</p> <p>All of these variables will impact the structure of your accounts receivable. So it&rsquo;s important that both you and your client are in agreement as to how often they will be billed and the schedule for payment. Some clients may insist on 30 days; others may be more favorable to paying you in 15 days. So establish these ground rules in your contract and be sure to include a reminder in your invoices and as a note in your receivables system.</p> <p><strong>Invoicing Like a Pro</strong></p> <p>Use your invoice wisely. The goal is to give the client enough information for them to be able to approve and process it quickly. It&rsquo;s likely that the invoice will need to be rubber-stamped by more than one person &ndash; usually your point of contact for the work, as well as accounting and even the CFO or business owner. Have a clean, professional template that includes your logo and other business information. State your payment terms clearly and be specific. For example &ldquo;Payment due in 30 days&rdquo; is less vague than &ldquo;Due upon receipt.&rdquo; Include the hours worked (and the hourly rate as a reminder) and the specifics of your service. If the project is ongoing, break down what portion you are billing for this month.</p> <p>If you are an independent contractor, state clearly who the payment should be made to &ndash; especially if you operate under a &ldquo;Doing Business As&rdquo; or trade name, but retain a bank account in your own name &ndash; you want to ensure the check is written to you.</p> <p>If you incurred any expenses that are billable to the client (and pre-approved as such) also include these as separate line items.</p> <p><strong>Collecting Passed Due Invoices</strong></p> <p>Like death and taxes, not getting paid on time is inevitable, so be prepared for this. There&rsquo;s often a valid reason for non-payment. The invoice could have been misplaced, or the client needs to iron out some kinks with their purchase order system &ndash; who knows!</p> <p>If the invoice is only a few days past due, reach out to your client contact with a gentle reminder. Ask them if they actually received the invoice and if they have any questions about it. Your goal here is to get a confirmation that you&rsquo;ll receive payment by X date, so that you can manage and plan your cash flow accordingly. So keep plugging away till you get this assurance. Remind them of your agreed payment terms and ask if you can speak to accounting if you&rsquo;re not getting the answers you need.</p> <p>If matters don&rsquo;t get resolved, SBA guest blogger Barbara Weltman offers some additional collection and tax write-off strategies here: <a href="" title="blog about tax strategies">Getting Stiffed: What Can you Do?</a></p> <p>In addition, if a client starts to become a repeat problem, tackle the issue head-on with a meeting to review matters. Try to be as flexible and courteous as you can as you work towards resolution; it could be a simple resolution such as shifting your invoicing to the middle of the month.</p> <p><strong>When it&rsquo;s Time to Get Help</strong></p> <p>According to a 2009 survey by finance systems specialists,&nbsp;<a href="" title="link to finance systems specialists">CODA</a>, 25 percent of small and medium businesses estimate that at least $5,000 a month in income is delayed due to invoicing errors, with 17 percent&nbsp;seeing payments amounting to $50,000 delayed due to invoicing errors.</p> <p>While you want to ensure you are keeping an eye on your receivables, if you are spending too much time in the weeds billing clients, what are your options?</p> <p>Well, a bookkeeper can help you keep your records straight, or an accounts receivable can help you handle billing and collections so that you don&rsquo;t have to. An attorney or legal advisor is a good resource to have lined up in advance, should clients not pay up on time. If you have an accountant, seek out their advice on the best options for your business as well as your long term financial health. You can also get free advice and mentoring on accounting processes from organizations like <a href="" title="link to SCORE">SCORE</a>.</p> <p><strong>More Information</strong></p> <p>For more business accounting tips, check out SBAs free online learning course: <a href="" title="link to learning course about accounting">Introduction to Accounting</a>.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="" title="Managing Small Business Cash Flow – Answers to 10 Commonly Asked Questions blog post">Managing Small Business Cash Flow &ndash; Answers to 10 Commonly Asked Questions</a></li> <li> <a href="" title="3 Basic Financial Statements You Need to Keep Track of Your Money blog post">3 Basic Financial Statements You Need to Keep Track of Your Money</a></li> <li> <a href="" title="How to Build and Use a Business Budget That's Useful All Year Long blog post">How to Build and Use a Business Budget That&#39;s Useful All Year Long</a></li> </ul> <p>&nbsp;</p> Small Business Cents Financing Managing Starting Mon, 26 Aug 2013 11:30:12 +0000 Caron_Beesley 751892 at Bookkeeping Basics, Part 1: How to Set Up and Manage Accounts Payable <p>If you&rsquo;re running a business, it doesn&rsquo;t matter whether you&rsquo;re an independent contractor or a growing company, managing accounts payable is a key part of your everyday business administration.</p> <p>Simply put, accounts payable is the process of tracking money owed by your business to suppliers. As a new business owner or sole proprietor, this can be done with a simple spreadsheet. But as your business grows, so does the complexity of your accounts payable process.</p> <p>Here are some tips for setting up a workable accounts payable system that will scale with your business and help you get a better grip on cash flow and other financial reports.</p> <p><strong>Setting Up Your System</strong></p> <p>Whether you are using a traditional spreadsheet or an online accounting program such as QuickBooks, FreshBooks, Harvest or Expensify, you&rsquo;ll need to start collating all your receipts, credit card expenses, and incoming bills from suppliers and enter them into your system.</p> <p>For spreadsheet users, you&rsquo;ll need to set up your file to capture the following line items:</p> <ul> <li> Supplier&rsquo;s/biller&rsquo;s name</li> <li> Account number</li> <li> Expense type (e.g. office supplies, raw materials)</li> <li> Date the invoice was received</li> <li> Amount owed</li> </ul> <p>If you&rsquo;re not sure whether to make the move to an automated program, as a general rule, if you&rsquo;re receiving more than two bills a day, or your expenses are racking up, then it&rsquo;s a good idea to look into automation as an option to help you keep track of your bills. Many of these tools are free or available on a trial basis. If you need some training to get you up and running, <a href="" title="local assistance link">contact</a> your local Small Business Development Center, Women&rsquo;s Business Center or other local small business assistance resources about training opportunities.</p> <p><strong>Entering Data</strong></p> <p>So, what data goes into accounts payable and when?</p> <p>Start a daily regimen of entering incoming bills (note the payment due date and any other account information that streamlines the payment process your end). If you incur a business credit card expense, enter it on the same day. Employee expenses should also be entered (avoid fraud and streamline these by using automated expense entry programs or consolidate all employee expenses on a single credit card). Don&rsquo;t forget to keep and securely store paper copies of all your documents too.</p> <p><strong><em>Tip</em></strong>: Make sure you own your own accounts payable system until you feel comfortable handing over the data entry to someone else (even then, be prepared to check it daily &ndash; you should know what&rsquo;s going on with your money).</p> <p><strong>Scheduling Payments</strong></p> <p>Make a habit of paying your bills on a weekly basis and establish a window of payment that aligns with your supplier&rsquo;s terms. If their terms are 30 days, don&rsquo;t wait the 30 days to pay them; mail out the check or make the direct deposit payment a few days in advance of the deadline. This way you&rsquo;ll maintain good relations with your vendors.</p> <p>When combined with your accounts receivable system (incoming payments) your accounts payable system will help you stay on top of cash flow and inform your overall budgeting management process, i.e. plan for busy periods when outgoing costs outweigh incoming cash.</p> <p><strong>Managing Problems</strong></p> <p>It&rsquo;s inevitable that there will be times when cash flow is tight and paying bills on time can be challenging. Try not to bury your head in the sand; instead, be proactive. Refer back to all your suppliers&rsquo; terms to see if their payment windows allow for any wiggle room (for example, if you&rsquo;ve been paying bills every 30 days, but in fact their terms are 45 days). If you know you can&rsquo;t cover a payment this month, call your supplier and be honest: tell them you&rsquo;ll make a minimum payment this month, and X amount next month until it&rsquo;s paid off. While it&rsquo;s not an ideal situation, and you may have to pay interest, it demonstrates to the supplier that you are proactive and serious about making payments. If you have a strong record of past payments, remind them of that fact and do whatever you can to reassure them of your business viability.</p> <p><strong>When to Hire an Expert</strong></p> <p>If your accounting system is taking up too much of your time, then you may want to enlist an assistant to help with some basic bookkeeping, or hire or outsource to an accountant.</p> <p>As your business grows, you might even want to consider the services of a full- or part-time CFO. More than just a bookkeeper, payroll administrator or keeper of P&amp;L and cash flow statements, a Chief Financial Officer (CFO) can help you plan, model, forecast and make better business decisions. A CFO looks at your business holistically &ndash; this includes people, processes and systems &ndash; and ensures that together you have accurate financial information to plan for the future. Read this blog for more tips: <a href="" title="Is it Time to Hire a CFO and Where Should You Look? blog post">Is it Time to Hire a CFO and Where Should You Look?</a></p> <p><strong>Stay tuned for Part 2 in this series: How to Set Up Accounts Receivable.</strong></p> <p><strong>More Information</strong></p> <p>For more business accounting tips, check out SBAs free online learning course: <a href="" title="introduction to accounting course">Introduction to Accounting</a>.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="" title="Managing Small Business Cash Flow – Answers to 10 Commonly Asked Questions blog post">Managing Small Business Cash Flow &ndash; Answers to 10 Commonly Asked Questions</a></li> <li> <a href="" title="3 Basic Financial Statements You Need to Keep Track of Your Money blog post">3 Basic Financial Statements You Need to Keep Track of Your Money</a></li> <li> <a>How to Build and Use a Business Budget That&#39;s Useful All Year Long</a></li> </ul> Small Business Cents Financing Starting Wed, 21 Aug 2013 13:30:25 +0000 Caron_Beesley 751652 at 5 Ways to Help Young Entrepreneurs Finance Their Business Ideas <p>Today is International Youth Day &ndash; so what better way to celebrate than to talk about the incredible potential of our young entrepreneurs? In 2012, young entrepreneurs ages 20-34 comprised more than a quarter of the total new entrepreneurship activity in the United States (according to the <a href="" title="link to Kauffman Foundation research">Kauffman Foundation</a>). That was 26 percent of first-time entrepreneurial efforts being led by the youngest age bracket.</p> <p>Entrepreneurship can be an exciting adventure, and it can be easier than you might think for the young. The barriers &ndash; including cost of entry &ndash; are low (working at home, online, etc.), and younger people are often unconstrained by the commitments of family and marriage.</p> <p>So, do you have a winning idea on which you want to establish a business? While you don&rsquo;t need a business degree or years of experience to succeed, you will likely need financing to get your idea off the ground. Here are some tips to help you secure the funding you need to launch &ndash; or ease the burden of trying to finance &ndash; your small business.</p> <p><strong>1. Deferring student loans</strong></p> <p>If your student loan repayments are preventing you from starting your own business, the&nbsp;<a href="" title="Student Startup Plan">Student Startup Plan</a>&nbsp;(through the <a href="" title="White House-led Startup America Initiative">White House-led Startup America initiative</a>) enables college graduates, including those looking to start a business, to lower student loan repayments. Its Income-Based Repayment (IBR) Plan can help you keep your loan payments affordable with a sliding scale to determine how much you can afford to pay on your federal loans. This can give you the freedom you need to take risks with new opportunities.</p> <p><strong>2. Borrowing startup funds from friends and family</strong></p> <p>With a lack of strong credit history, it&rsquo;s sometimes challenging for young entrepreneurs to obtain traditional loans through banks or private lenders. In these cases, it&rsquo;s not uncommon to reach out to friends and family &ndash; those who know and trust you already. This is a definite pro, but the flipside comes if something goes sour with repayment or terms and the potentially compromising situation that may develop for you. <a href="" title="How to borrow from friends and family blog post">Check out this blog post</a> for details about best practices and how to work with your friends and family in this capacity.&nbsp;</p> <p><strong>3. Consider crowdfunding</strong></p> <p>An increasingly popular method to obtain financing is crowdfunding &ndash; a collective cooperation of people who network and pool their money and resources together, usually online, to support efforts initiated by other organizations. Crowdfunding gathers multiple, smaller investments as opposed to a single source of funding. Learn more about crowdfunding <a href="" title="crowdfunding blog post">here</a> and in this other <a href="" title="crowdfunding blog post">recent blog post</a>.&nbsp;</p> <p><strong>4. The peer-to-peer potential </strong></p> <p>Like crowdfunding, peer-to-peer (or P2P) lending allows you to make your business case to others with the hope that someone will make an investment. The biggest difference between the two approaches is that P2P lending typically focuses on one individual lending to another (versus the &ldquo;crowd&rdquo; of lenders). P2P sites allow you to determine how much you need to borrow, define the purpose of the loan and post your listing online. Read about how to prepare your request in <a href="" title="peer to peer blog post">this blog post</a>.&nbsp;</p> <p><strong>5. Avoid overinvesting </strong></p> <p>If you&rsquo;re relying on your cash reserves, credit cards or savings to start a business, try to avoid some of the overinvestment traps that young entrepreneurs fall into &ndash; whether it&rsquo;s a swish office, computer systems or inventory overload. Focus instead on building a good product and a positive customer experience. Starting a business from home or online are cost-effective ways to avoid some of these pitfalls. These two guides from SBA can help you get started:</p> <ul> <li> <a href="" title="How to Start an Online Business">How to Start an Online Business</a></li> <li> <a href="" title="Starting a home-based business">Starting a Home-Based Business</a></li> </ul> <p>One little known option for setting up your new business is to <a href="" title="purchase government surplus link">purchase government surplus products</a>. Just about anything you can think of that your business might need is sold by the government at or below cost, or fair market value.</p> <p><strong>Additional Resources</strong>:</p> <ul> <li> <a href="" title="SBA's Young Entrepreneur Guide">SBA&rsquo;s Young Entrepreneur Guide</a> &ndash; resources and financial support information for young entrepreneurs</li> <li> <a href="" title="Young Entrepreneurs guide">Young Entrepreneurs: An Essential Guide to Starting Your Own Business</a> &ndash; an online training course to help young entrepreneurs turn their business ideas into reality</li> <li> <a href="" title="20 questions to ask yourself before starting a business">20 Questions Before Starting</a> &ndash; ask yourself these 20 questions to make sure you&rsquo;re thinking about the right key business decisions</li> </ul> Small Business Cents Financing Starting Mon, 12 Aug 2013 11:32:31 +0000 kmurray 751067 at Crowdfunding – Is it Right for Your Business? Where Do You Start? <p>Heard the buzz about crowdfunding but not sure how it can help you finance your business? Is crowdfunding even right for you?</p> <p>Here&rsquo;s some information and tips that will help explain crowdfunding concepts and how you can take advantage of them to fund your business.</p> <p><strong>What is crowdfunding?</strong><img alt="crowdfunding image" height="192" src="/sites/default/files/images/pic.png" style="float: right;" width="328" /></p> <p>Crowdfunding is a collective cooperation of people who network and pool their money and resources together, usually via the Inter&shy;net, to support efforts initiated by other organizations. Unlike angel investments, in which an investor takes a large state in a small business, with crowdfunding, you can literally attract a &ldquo;crowd&rdquo; of people &ndash; each of whom takes a small stake in a business idea by contributing towards an online funding target. This spreads the risk among backers and creates a strong network of support for your business. If you offer equity as part of your package, your investors can also become ambassadors for your brand.</p> <p>With the tough economic climate, crowdfunding has become a popular and alternative method of raising finance for a business, real estate investments, projects or ideas and has become popularized online by sites such as Kickstarter, Wefunder, crowdfunder and RockthePost.</p> <p><strong><em>IMPORTANT</em></strong>: Large crowdfunding investments are currently limited to SEC-accredited investors. Change is coming, however, and soon the investors like you and I will be able to enter the crowdfunding market. Currently, the amount an un-accredited investor can invest is capped at 5-10 percent of your income. More on this below.</p> <p><strong>Crowdfunding to become a lot easier for small businesses</strong></p> <p>Following up on from my last point above, it will soon become a lot easier for small businesses to raise money online via crowdfunding thanks to the signing into law of the <a href="" title="Link to more information about Jobs Act">JOBS Act</a>&nbsp;by President Obama in April 2012. However, the SEC is still in the rule-making process and is due to publish final regulations before non-SEC-accredited investors can start financing small businesses. Final rulings are expected this summer.</p> <p>What does the JOBS Act enable? Well, businesses seeking crowdfunding will be able to raise as much as $1 million a year without having to do a public offering &ndash; a step requiring state-by-state regulations. Previously, small businesses were also limited to seeking investment from SEC-accredited investors only; non non-accredited investors (you and I) can invest in start-ups.</p> <p><strong>How to prepare your business for crowdfunding</strong></p> <p>While the JOBS Act should be implemented soon, here are a few things you can do to get ahead while you wait.</p> <ul> <li> <a href="" title="business incorporation link"><strong>Incorporate your business</strong></a> &ndash; It&rsquo;s possible that only C corporations will be in a position to take advantage of crowdfunding opportunities. This is because S corporations have a 100-shareholder limit, effectively precluding the use of crowdfunding. Talk to a lawyer or a local small business organization like your <a href="" title="local resources information">SBA District Office or SCORE</a> to help you explore and select the right entity.</li> <li> <strong>Start writing or refining your business plan</strong> &ndash; This will help you determine the amounts of financing you are looking to raise. It can also help you outline your business expectations and alleviate any concerns potential investors may have about how valid your venture is and how serious you are about it. SBA&rsquo;s <a href="" title="build your business plan tool"><strong>Build a Business Plan</strong></a> tool can help you walk through these steps. It&rsquo;s an easy-to-use interactive online template that you can work on, save anytime and download when you&rsquo;re finished.</li> <li> <strong>Get your accounting records in order</strong> &ndash; Part of the new JOBS Act will require entrepreneurs to follow SEC-compliant guidelines in regard to providing accurate, transparent and up-to-date financial statements and due diligence reports. Balance sheets, cash flow statements, financial projects and more will help you build your credibility with potential investors and are required before you even launch your fundraising campaign, so be prepared.</li> <li> <strong>Get your CPA or accountant involved </strong>&ndash; Be sure to consult with a qualified CPA to stay on top of legislation. If you&rsquo;re seeking between $100,000 and $499,000, then then you&rsquo;ll need to have your financial statements reviewed by an independent public accountant. Over $500k? Then you&rsquo;ll need to have those statements audited. It&rsquo;s never too early to get started with this process.</li> </ul> <p><strong>Tips for successful crowdfunding</strong></p> <p>One key to getting what you want from crowdfunding is understanding the commitment it entails. This means having a careful strategy. Start by perfecting your pitch. Keep it simple. If your pitch doesn&rsquo;t connect with your target investors, then crowdfunding may not be for you.</p> <p>Next, make sure you have the resources in place to promote your pitch daily (and keep it simple &ndash; you want to make it easy for prospective investors to connect with your idea). Create and maintain momentum by being responsive; take calls, answer emails, use social media or an email list to help you meet your target.</p> <p>Think about ways to create a buzz around your business. Find out who your potential investors are well in advance of your listing and find out what entices them to invest.&nbsp;</p> <p>Be prepared for questions from investors now. How do you plan to spend the money? Do you have an exit strategy? What are your short- and long-term goals? What insurance protection do you have in place for your business and investors? Have you completed the due diligence process? Do you have trademarks, patents or copyright in place?</p> <p><strong>Some tips about crowdfunding sites</strong></p> <p>Existing crowdfunding sites are probably your best option when it comes to raising funds. If you want to set up your own crowdfunding portal, you&rsquo;ll need to get SEC approval.</p> <p>Remember, third party sites are essentially middlemen; they make points of fees by matching up companies or individuals to raise funds. To ensure you are doing the right due diligence, it&rsquo;s well worth consulting both an accountant and a lawyer to protect your interests.</p> <p><strong>More Information</strong></p> <p>For more tips, check out SBA&rsquo;s <a href="" title="crowdfunding introduction">Introduction to Crowdfunding for Entrepreneurs</a>, an online, self-paced overview of the topic that also includes some useful next steps for those interested in the process of crowdfunding.</p> Small Business Cents Financing Starting Mon, 08 Jul 2013 11:50:14 +0000 Caron_Beesley 712861 at How to Build and Use a Business Budget That's Useful All Year Long <p><img alt="Business budget" src="/sites/default/files/images/352503520_1775daeaa5.jpg" style="float: right; height: 280px; width: 300px;" />Budgets are difficult to plan and maintain at the best of times &ndash; unexpected events, cash flow problems, supply chain issues and more can all reap havoc with even the most thoroughly planned business budgets. The other problem with budgets is that many of us set budgets in our business and personal lives at the beginning of the year, and then file them away until the year-end rolls around once more.</p> <p>And this is where the problem lies: your business is never static, and your budget shouldn&rsquo;t be either.</p> <p>Here are some tips for developing and managing a dynamic budget that can keep you on course all year long.</p> <p><strong>Why Budgets Are So Important</strong></p> <p>Budgets are enormously important to the operation of your business; not only do they help you manage your costs, but they also help you determine whether you profit goals are within reach and keep you on the right road from month-to-month. In its simplest form, a budget is a detailed plan of future receipts and expenditures. Think of a budget as a tool for providing control. For example, by looking at next quarter&rsquo;s budget you can anticipate peak periods and schedule stock and labor to handle the sales volume. You can also plan vacations, marketing activities and inventory taking for slow periods.</p> <p>Most small business owners generally use a budgeting method that starts by identifying the profit they want to make and then listing out the expenses they&rsquo;ll incur in order to reach their goal. There are several resources at the end of this article that can help you build your business budget.</p> <p><strong>Update Your Budget Monthly</strong></p> <p>If your budget is going to work for you, plan on revisiting it on a monthly basis with your management team and update it based on your business performance and expenses for the prior month. Take a look at your sales forecast &ndash; how&rsquo;s your pipeline looking? Are there any indicators that you need to make changes to your budget to cover additional inventory or staffing needs? Look at your expenses &ndash; are they as projected, or do you need to cut back in certain areas to ensure you stay on track?</p> <p><strong>Make Changes That Can Have a Positive Impact</strong></p> <p>Based on your monthly review, make changes to your budget and then wait to see what impact these have to your income and profits &ndash; by month and by year. For example, perhaps you are under-investing in marketing &ndash; adjust your budget and see what happens to your pipeline next month or over a six-month period. In your next review cycle, look to see if you are a getting good return on marketing dollars spent per sales lead. Then use this information to inform future planning decisions about where best to allocate your costs.</p> <p>What about receivables? Are there ways you can speed up your invoicing and payment cycles to keep cash flowing into the business?</p> <p><strong>Respond to Unexpected Changes</strong></p> <p>Use your budget to help you adjust to the unexpected. Say, for example, an important client cuts their own budget and reduces the amount of business they do with you. Take a look at your budget and how this reduction in revenue affects your cash flow and for how long &ndash;- meaning how long will it take to find a new client to replace that important revenue source and what will it cost you in terms of marketing or hiring costs to help you uncover new business?</p> <p><strong>Tie Incentives to Budget Performance</strong></p> <p>A great way to get everyone on-board with the idea of focusing and interacting regularly with your budget is to tie performance bonuses to it. So, at the beginning of the year when you plan your annual budget, set parameters for performance tied to profit, but also other categories such as return on investment in marketing dollars, keeping expenses at or lower than plan and so on.</p> <p><strong>More Information and Templates</strong></p> <p>For more information on crafting a budget for your business, check out this easy-to-follow guide &ndash; <a href="" title="How to budget for a small service firm guide">Budgeting in a Small Service Firm</a> &ndash; from SCORE that explains how to create, manage and adjust a small business budget. SCORE also provides a downloadable and editable <a href="" title="12-month budget template">12-month budget template</a>.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="" title="Tips for creating a marketing budget">How to Set a Marketing Budget that Fits your Business Goals and Provides a High Return on Investment</a></li> <li> <a href="" title="Financial statements you'll need">3 Basic Financial Statements You Need to Keep Track of Your Money</a></li> <li> <a href="" title="How to project business cash flow">Projecting Your Business Cash Flow, Made Simple</a></li> <li> <a href="" title="Tips for managing business cash flow">Managing Small Business Cash Flow &ndash; Answers to 10 Commonly Asked Questions</a></li> </ul> <p><em>Image courtesy of <a href="">Casey Konstantin,</a> Flickr</em></p> Small Business Cents Managing Starting Mon, 03 Jun 2013 11:34:00 +0000 Caron_Beesley 650511 at 8 Ways the U.S. Government Can Help You Finance Your Small Business Exports <p><img alt="Export Loans" src="/sites/default/files/images/ExportLoans.JPG" style="float: right;" />Looking to expand into overseas markets?</p> <p>Whether you are entering the export market, looking to upgrade your equipment or facilities in preparation for exporting, or helping your international buyers do business with you &ndash; there&rsquo;s a U.S. government financing program that can help.</p> <p>With two thirds of the world&rsquo;s purchasing power residing outside the U.S., the SBA is acutely aware that these global consumers play an important role in the long-term success of America&#39;s small businesses, and SBA is working to help small business owners across the country grow their businesses in this global economy.</p> <p>In fact, small businesses now constitute 34 percent of total export dollars, and comprise approximately 97.8 percent of all exporters. Of course, success in exporting doesn&rsquo;t just lie with financing.&nbsp; SBA also provides counseling and training (via <a href="" title="U.S. Export Centers">U.S. Export Assistance Centers</a> and SBA&rsquo;s online <a href="" title="SBA Learning Center">Learning Center</a>) to ensure that small businesses have the tools they need to tap into the global market. Since FY 2009, SBA has guaranteed 6,400 loans to small business exporters worth over $3.3 billion, generating over $6.3 billion in exports.</p> <p>So what financing programs are available? Both SBA and the <a href="" title="Export-Import Bank">Export-Import Bank</a> (the official export credit agency of the United States) offer flexible loan and credit programs. Here&rsquo;s what you need to know:</p> <p><strong>SBA Export Loans &ndash; Financing Your Working Capital Needs, Export Transactions, and Facility Upgrades </strong></p> <p>Let&rsquo;s start with the simplest and quickest loan product that the SBA offers &ndash; the <a href="" title="SBA Export Express"><strong>SBA Export Express Program</strong></a>. This loan program offers eligible small businesses up to $500,000 in financing. As with all SBA financing programs, SBA doesn&rsquo;t lend business the money directly. Instead, it provides a guarantee to the lending bank or institution that in turn lends your business the money &ndash; alleviating the investment risk for the bank. What this means is you will work directly with your bank to obtain your loan. Assuming everything is good with your application, loans can be approved by the SBA within 36 hours or less.</p> <p>You can use these funds for any export development activity &ndash; including financing specific export orders or expanding production facilities. You can also purchase equipment, inventory or real estate and translate marketing literature into a foreign language. It&rsquo;s also the only government loan that funds participation in tradeshows or trade missions.</p> <p>Learn more about the program and eligibility requirements on SBA&rsquo;s <a href="" title="More information about Export Express">Export Express Loan Program</a> page.</p> <p>If you are already in a position in which you are able to generate export sales and need additional working capital to support these sales or ensure you don&rsquo;t lose them, take a look at SBA&rsquo;s <a href="" title="Export Working Capital Program"><strong>Export Working Capital Program</strong></a> (EWCP). EWCP loans again are provided through banks, and fund export transactions, including labor and materials, from purchase order to collections. They can help you even out cash flow as you support longer export sales cycles. Loans are available up to $5 million and can support short-term needs such as a single contract of ongoing export sales over 12 months. <a href="" title="More information about Export Working Capital Program">Read more here</a>.</p> <p>If you need to upgrade your facilities or equipment and are adversely affected by import competition, you might be eligible for SBA&rsquo;s <a href="" title="International Trade Loan Program"><strong>International Trade Loan Program</strong></a>. It provides up to $5 million to acquire, construct, renovate, modernize, improve, or expand facilities and equipment in support of exporting. You can also use the funds to refinance an existing loan. However, they can&rsquo;t be used as working capital. Read more about <a href="" title="International Trade Loan Program eligibility and applications process">eligibility and the applications process</a>.</p> <p><strong>U.S. Export-Import Bank &ndash; Financing For Your International Buyers and More</strong></p> <p>The <a href="">U.S. Export-Import Bank</a> (Ex-Im Bank) is an official U.S. government credit agency that assists businesses of all size with their export financing needs. Ex-Im Bank essentially fills gaps in trade financing and assumes credit and country risks that many commercial lenders are unable or unwilling to accept.</p> <p>Like the SBA, Ex-Im bank offers a <a href="" title="Working Capital Guarantee Program"><strong>Working Capital Guarantee Program</strong></a> for small business exporters through lending partners with whom it has agreements. There is no limit to the loan amount (unlike SBA&rsquo;s Working Capital Program, which caps out at $5 million).</p> <p>Ex-Im Bank also offers financing for your international buyers, for example, if your purchasers need financing to purchase U.S. goods and services and no other financing is available or interest rates aren&rsquo;t in their favor. Financing may also be available for refurbished equipment, software, certain banking and legal fees, and other in-country costs and expenses. Three programs are offered:</p> <ul> <li> <a href="" title="Ex-Im Bank Loan Guarantee Program">Ex-Im Bank &ndash; Loan Guarantee Program</a> &ndash; Gives you some level of risk mitigation against non-payment by a foreign buyer or having the order go to a local competitor. Your foreign buyer is the lender and they must service the debt.</li> <li> <a href="" title="Ex-In Bank Direct Loan Program">Ex-Im Bank &ndash; Direct Loan Program</a> &ndash; Provides fixed-rate financing to creditworthy buyers.</li> <li> <a href="" title="Ex-Im Bank Finance Lease Guarantee Program">Ex-Im Bank &ndash; Finance Lease Guarantee Program</a> &ndash; Guarantees lease financing of U.S. goods and services to creditworthy international lessees.</li> </ul> <p><strong>Other Export Financing Sources</strong></p> <p>The USDA also provides export financing to your international buyers by providing credit guarantees to foreign banks to encourage food and agricultural exports to buyers in countries where credit is necessary to maintain or increase U.S. sales, but where financing may not be available without the guarantees. Read more about <a href="" title="USDA Export Guarantee Program">USDA Export Guarantee Programs</a>.</p> <p><strong>More Information</strong></p> <p>For more information about any of these loan programs, contact your local <a href="" title="U.S. Export Assistance Center">U.S Export Assistance Center</a>. These offices are staffed by officials from SBA, the Export-Import Bank and other organizations that can help you find the right financing for your needs. To help with your wide exporting goals, take a look at <a href="" title="">;s</a> variety of programs and support.</p> <p>Also check out this useful <a href="" title="Compare export assistance financing programs">side-by-side comparison of U.S. government export assistance financing programs</a>.</p> <p><img alt="Compare Export Loans" src="/sites/default/files/images/Export_Comparison.JPG" /></p> Small Business Cents Financing International Tue, 28 May 2013 11:24:58 +0000 Caron_Beesley 640711 at Starting a High-Tech Business? You May be Eligible for Government Funding <p><img alt="" src="/sites/default/files/images/Tibbetts.JPG" style="width: 329px; height: 230px; float: right;" />Looking to start or grow your high-tech entrepreneurial venture? Need financing to help fund research and development (R&amp;D) efforts and realize your business potential? The U.S. federal government can help!</p> <p>In fact, in 2012, nearly 5,000 small businesses <a href="" title="SBIR Past Awards">received over $1.8 billion</a> in federal government grants and contracts to help them carry out the R&amp;D necessary to develop and bring high-tech products to market.</p> <p>So how can your small business get in on the act? Here&rsquo;s what you need to know:</p> <p><strong>What Can the Government Do for the High-Tech Small Business Sector?</strong></p> <p>If you are starting or already operate a high-tech startup, high-growth or high-impact firm, you <u>may be</u> eligible for grants and contracts that help fund R&amp;D and product commercialization under the federal government&rsquo;s <a href="" title="SBIR information">Small Business Innovation Research Program (SBIR)</a>.</p> <p>The risk and expense of conducting serious R&amp;D efforts are often beyond the means of many small businesses. But, by reserving a percentage of federal R&amp;D funds for small business, SBIR helps small businesses to compete on the same level as larger businesses. In turn, SBIR helps the federal government meet its own R&amp;D needs in areas such as defense, healthcare, environmental protection and more. Eleven federal agencies set aside a portion of their budget each year to fund the SBIR program, with the SBA acting as the coordinating agency of the program.</p> <p>Companies such as Symantec, Qualcomm and ViaSat all got a kick start from SBIR funds in their early years.</p> <p><strong>How does the SBIR Program Work?</strong></p> <p>The federal government has specific scientific and technological R&amp;D goals and priorities, all of which are reflected in these <a href="" title="SBIR solicitations">solicitations</a> from participating agencies and federal grants (listed at <a href=""></a> or on individual agency sites). You can search and explore these solicitations and grant opportunities to see where your R&amp;D efforts may align with the government&rsquo;s needs. Then follow the application process described below (see &ldquo;How Do I Get Started?&rdquo;). Each agency reviews proposals based on technical merit, qualifications and potential benefits to industry and society. Once agencies grant awards to small business, they embark on the R&amp;D process.</p> <p><strong>The Awards Process</strong></p> <p>SBIR awards are structure in three phases to reflect the R&amp;D development cycle:</p> <ul> <li> <strong>Phase I:</strong>&nbsp;These awards are usually below $150,000 and cover a timeframe of less than 6 months. During this initial stage, the small business and sponsoring agency explore the feasibility of the project in order to get a better sense of its commercial potential and technical requirements.</li> <li> <strong>Phase II</strong>: These awards are only available to small businesses that already received Phase I awards. Phase II enables a longer-term commitment. Awards can be made for up to $1 million for two years. During this period, R&amp;D is expanded and commercial viability can be assessed.</li> <li> <strong>Phase III:</strong>&nbsp;During this stage, innovations transition from the lab to the market, and small businesses begin the search for private sector investment. Keep in mind that the SBIR program <em>does not</em>&nbsp;fund Phase III; funding comes from private sources or other government grants.</li> </ul> <p><strong>Who is Eligible for SBIR?</strong></p> <p>The eligibility requirements for SBIR are straightforward &ndash; your business must be for-profit, have less than 500 employees, be independently owned and operated and located principally in the U.S. It must also be majority-owned (51 percent) by U.S. citizens or permanent resident aliens and the principle researcher must be an employee of the company.</p> <p>As you can imagine, SBIR is a highly competitive program. Check out this <a href="" title="Directory of SBIR awards">interactive directory of SBIR awards</a> for a review of past awards, proposal abstracts and more.</p> <p><strong>How Do I Get Started?</strong></p> <p> includes <a href="" title="SBIR application information">information for applicants</a>, but, as mentioned above, the application process starts with research:</p> <ul> <li> Check the list of <a href="" title="Open SBIR solicitations">open solicitations</a> at Each solicitation explains the areas of R&amp;D that agencies are interested in.</li> <li> If you have questions, contact the individual agency. Refer to this <a href="" title="SBIR awards agency contact list">contact list</a>.</li> <li> Register your business with <a href="" title="SBIR company registration">SBA&rsquo;s Company Registry</a> prior to submitting an application.</li> <li> Get <a href="" title="Tips on how to apply for SBIR program">tips and training</a> on applying to the SBIR program.</li> <li> <a href="" title="Search for grants on grants ">Search for grant opportunities</a> on</li> <li> Submit a proposal. Typically, an SBIR Phase I proposal submission package has the following components: a business plan, executive summary, cost and technical proposal.</li> </ul> <p><strong><em>Tip</em></strong>: <a href="" target="_blank"></a>&nbsp;is a good place to start looking for SBIR/STTR program opportunities. Just type &quot;SBIR&quot; in the basic search, and off you go!</p> <p><strong>Additional Resources</strong></p> <ul> <li> <a href="" title="SBA District Offices ">SBA District Offices</a></li> <li> <a href="" title="SBIR website">SBIR Website</a></li> <li> <a href="" title="SBIR FAQs">SBIR FAQs</a></li> <li> <a href="" title="Education and counseling programs for high-tech small businesses">Education &amp; Counseling Programs for High-Tech Small Businesses</a></li> <li> <a href="" title="Loans for technology and other high growth businesses">Loans for technology and other &ldquo;high-growth, high-impact&rdquo; businesses</a></li> </ul> Small Business Cents Financing Government Contracting Starting Mon, 20 May 2013 12:40:39 +0000 Caron_Beesley 632041 at Turning Your Tablet into a Point of Sale System – Is it Time to Make the Switch? <p> <img alt="POS " src="/sites/default/files/images/POS.jpg" style="float: right; height: 250px; width: 250px;" title="Image courtesy of Belal Khan, Flickr" />Considering upgrading your business&rsquo; point of sale system (POS) to one that runs on a mobile device or tablet?</p> <p><a href="" title="Article about use of mobile platforms for processing payments">Mobile payment platforms</a> that turn your tablet into a credit card processing device have become increasingly popular with small businesses, thanks to offerings from companies like Square, Intuit and PayPal. But mobile POS is evolving beyond being a convenient way to swipe credit cards on-the-go. The next generation of POS systems will not only turn your tablet into a cash register, they offer fully-fledged business management tools including CRM services, inventory tracking, loyalty program integration and employee management tools &ndash; all made possible thanks to the power of cloud computing.</p> <p>So what are the advantages of a tablet-based POS system for small business owners and what factors should you consider when making the switch? Here are some benefits and points to consider.</p> <p><strong>Cost Savings</strong></p> <p>Traditional POS systems typically involve an up-front fee of around $3,000, with some running as high as $50,000 (<a href="" title="StreetFight magazine">according to Street Fight magazine</a>). In addition, you can expect to pay an annual software license fee per register and a yearly maintenance fee of 18-20 percent for upgrades. And, since costs are paid up front, chances are you&rsquo;re stuck with the system you choose even if you don&rsquo;t like it.&nbsp; &nbsp;&nbsp;</p> <p>Cloud-based tablet POS systems, however, can be up and running for as little as $1,000 or less, with no upfront fee. Cost-savings also extend across the lifetime of the service &ndash; you pay a low monthly fee (which also includes instant software upgrades, support, back-up and upgrades) and can cancel at any time.&nbsp;</p> <p><strong>Easy Integration of Sales and Marketing Tools</strong></p> <p>In this age of ubiquitous information, many of us have come to expect instant, anytime, anywhere access to the data that matters most to us. Cloud-enabled tablet POS systems make this a reality with fingertip access to sales and inventory data &ndash; whenever you need it. Some also offer advanced integration with loyalty programs, accounting tools, as well as coupon and gift card generation options. You can even take advantage of marketing outreach features, such as auto-generated thank you emails to new customers and &ldquo;poke&rdquo; emails that encourage dormant customers to stop by. Other tools let you track sales volume by employees and manage inventory and restaurant seating. Others also offer integration with mobile card reader platforms such as Square and Intuit GoPayment.</p> <p><strong>Ease of Management</strong></p> <p>Not only does cloud-based POS cut the costs involved in managing your systems, it also streamlines their management. All the software upgrades are instant; trouble-shooting is taken care of by the system provider, and your applications and data are securely backed-up and stored within the cloud. No need to invest in additional service contracts or IT headcount.</p> <p>If you think about the cost and time involved in managing your own POS and any downtime or system issues your run into &ndash; the appeal of a mobile POS system starts to catch on.</p> <p><strong>Things to Watch Out For</strong></p> <p>Benefits aside, there are some things to look out for when considering a tablet POS:</p> <ul> <li> <strong>Migration </strong>&ndash; Migrating any system can be tricky. Put this on your due diligence list and screen providers to see what migration tools or services they provide. Many will be able to handle a simple inventory and customer data import from a spreadsheet.</li> <li> <strong>Internet Downtime </strong>&ndash; You&rsquo;ll need a good internet connection to process transactions and manage your data. If you are worried about outages, then this type of POS may not be for you. The good news is that some providers are offering off-line services that let you sync transactions when you come back online.</li> </ul> <p>To help you in your research, check out Street Fight&rsquo;s comparative guide &ndash; <a href="" title="7 Cloud-Based POS Systems for SMBs">7 Cloud-Based POS Systems for SMBs</a>.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="" title="Turning your mobile device into a cash register">Payments On the Go &ndash; Turning Your Mobile Device Into a Cash Register</a></li> <li> <a href="" title="Are online payment services a good fit for your business">Online Payment Services &ndash; Are They a Good Fit for Your Small Business?</a></li> <li> <a href="" title="Cloud computing- what can it do for your small business">Cloud Computing &ndash; What Can it Do For Your Small Business?</a></li> </ul> <p><em><a href="" title="Flickr">Image courtesy of Belal Khan, Flickr</a></em></p> Small Business Cents Managing Marketing Starting Mon, 13 May 2013 11:43:40 +0000 Caron_Beesley 620711 at More Than Just a Sales Portal – 5 Ways to Jazz up Your Online Store <p>What does your online storefront look like? How are you attracting customers to purchase a product they can&rsquo;t touch, feel or try until it arrives on their doorstep?</p> <p>This is a common, yet often overlooked, problem for small business owners who sell exclusively online through their own site or a third party site like Etsy or eBay. You might sell the most exquisite artisan product, but if you don&rsquo;t present it effectively, shifting inventory might be harder than you think.</p> <p>The lynchpin of small business success, whether online or off, often comes down to your differentiators &ndash; things like your core values, customer service and responsiveness, unique products, and community involvement.</p> <p>But without a physical storefront or face-to-face contact with customers, how do you weave all this into your online marketing strategy? Here are five ways to jazz up your online store.</p> <p><strong>1)&nbsp;</strong><strong>Tell Your Story</strong></p> <p>One of the easiest ways to connect and appeal to online consumers is to tell your story. If you&rsquo;ve planned your business and marketing strategy, then you should know enough about your target market to know what resonates and from there develop an online content strategy that they will respond to. For example, say you run an online store that sells organic cupcakes, sourced from locally produced ingredients; you could showcase the inspiration behind the business using the &ldquo;About Us&rdquo; section. You could also elaborate from there to showcase the vendors that you work with to source your ingredients.</p> <p>Don&rsquo;t forget to introduce yourself and the team behind your business. What&rsquo;s your story/passion? What did you do before this? How did you get started? What are your goals?</p> <p>Use plenty of images and videos if you can. For example, post a quick video intro or welcome message to virtually greet your customers.</p> <p><strong>2)&nbsp;</strong><strong>Use Polished and Engaging Images</strong></p> <p>Images are an essential part of any online store. Consider hiring a professional photographer or even a friend who&rsquo;s good behind the camera to take good quality photos of the products you sell. Spend some time ensuring the photos are user-friendly from a flow and lay-out perspective; that they can be easily shared on social media; and are truly representative of your brand.</p> <p>What about your logo? What does it say about your brand? Is it memorable? Again, it&rsquo;s worth spending time and money getting it right.</p> <p>Check out this <a href="" title="Google and SBA video">quick video from Google and SBA</a> that shows how Harlem, NY-based small business &ndash;&nbsp; <a href="" title="Make my Cake website">Make My Cake</a> &ndash; transformed its website and increased sales through the use of stylish imagery.</p> <p><strong>3)&nbsp;</strong><strong>Build Community</strong></p> <p>Use social media to extend your online presence. Go where your customers are and give them the opportunity to interact directly with you &ndash; whether it&rsquo;s Facebook, Pinterest, Twitter, LinkedIn or online forums and message boards. Promote your social media presence on your website, in emails, etc. You can even branch out and extend your online store to Facebook. Read more in these blogs:</p> <ul> <li> <a href="" title="Social media tune-up for your website">Social Media Tune-Up for your Website</a></li> <li> <a href="" title="Learn how to get started on social media">Don&rsquo;t be&nbsp; Social Media Skeptic &ndash; Learn How and Where to Start</a></li> <li> <a href="" title="How to sell your products on Facebook">The Social Storefront &ndash; How to Sell Your Products and Services on Facebook</a></li> </ul> <p><a href="" title="How to sell your products on Facebook">​</a><strong>4)&nbsp;</strong><strong>Ask for Feedback</strong></p> <p>Another effective way to engage with your customers beyond the transaction itself is to seek feedback. Online surveys, polls, and social media discussions all afford an opportunity to better get to know your consumers. Consider adding product rating or review options to your online store and keep an eye on your third party review listings (Yelp, OpenTable, Google+ Local, etc.).</p> <p><strong>5)&nbsp;</strong><strong>Blog!</strong></p> <p>Blogs are incredibly important to online businesses &ndash; they improve your search engine rankings, personalize your website, give people a reason to keep coming back, and give you an indirect way to promote all that you do.</p> <p>What should you write about? How do you get started? These blogs have loads of tips and are some of the most popular blogs on</p> <ul> <li> <a href="" title="Tips to Help you Start and Maintain a Business Blog">Thinking of Starting a Blog? Tips to Help You Start, Maintain &amp; Grow a Small Business Blog!</a></li> <li> <a href="" title="8 Tips for Keeping your Business Blog Current, Relevant and Fresh">8 Tips for Keeping your Business Blog, Current, Relevant and Fresh</a></li> <li> <a href="" title="How to Find and Work with Guest Bloggers">Give Your Blog a Boost &ndash; How to Find and Work with Guest Bloggers</a></li> <li> <a href="" title="How to Get More Tweets, Likes and Shares on your Blog Posts">How to Get More Tweets, Likes and Other Shares on Your Blog Posts</a></li> <li> <a href="" title="Never Run out of Blog Ideas - Here are 36">Never Run Out of Blog Topic Ideas: Here are 36</a></li> <li> <a href="" title="10 Often Overlooked Ways to Get Traffic to Your Blog">10 Often Overlooked Ways to Get Traffic to Your Blog</a></li> </ul> <p><strong>More Tips</strong></p> <p>For more tips for creating an engaging online experience, read guest blogger, SmallBizTrends&rsquo; Anita Campbell&rsquo;s article: <a href="" title="8 Ways to Develop Content for your Business">8 Ways to Develop Online Content for Your Business &ndash; Even if You Hate to Write</a>.</p> Small Business Cents Marketing Mon, 29 Apr 2013 11:42:19 +0000 Caron_Beesley 595971 at Greening Your Small Business – Which Steps and Investments Should Your Business Make? <p>Interested in greening your business? Today is <a href="" title="Earth Day website">Earth Day 2013</a>, so what better time to consider ways in which your business can play its part in saving the planet and reaping the cost benefits of operating more sustainably.</p> <p>But where do you start and what sustainability measures are right for your company? With more and more consumers choosing to &ldquo;buy green&rdquo; and many of them willing to pay higher prices for it, environmentally friendly business practices are here to stay. For the savvy business owner, the trick is knowing which green initiatives will pay off for your business and which may not be worth the time or expense.</p> <p>For answers, I turned to Michelle Goodman&rsquo;s excellent article in Entrepreneur magazine from the fall of 2012, <a href="" title="Link to Entrepreneur article">How to Determine which Eco-Friendly Changes your Business Should Make</a>, and to tried and tested tips and information from the Environmental Protection Agency and Department of Energy&rsquo;s joint venture &ndash; <a href="" title="Energy Star website">Energy Star</a>.</p> <p>Here&rsquo;s what they suggest:</p> <p><strong>Start with the Obvious &ndash; Use Less of Everything and Track Savings</strong></p> <p>Using less of everything &ndash; water, electricity, fuel, paper, printer ink &ndash; makes common sense. Similarly, ask yourself some basic questions: Can I recycle? What about introducing a lights out policy in meeting rooms that aren&rsquo;t in use and in the building at night? Does it make sense to let my employees telecommute?</p> <p>As you look for areas where you can make savings and be greener, try it out for a month and compare your business expenses to previous months. If you can demonstrate clear dollar savings, then getting the entire company behind you is going to be a lot easier. You can also use the savings you&rsquo;ve made to fund bigger sustainability improvements.</p> <p>If you run a service business such as a hotel, implement a towel re-use policy or a key-card activated energy-saving system that powers down the room when a guest exits. These can reap huge savings.</p> <p>Look for areas that make sense to your business. For example, can you dispose of less by buying re-usable versions of the same product? Goodman cites a California hair salon that switched from using disposable latex gloves worn by stylists to color hair &ndash; which set them back nearly $3,000 a year &ndash; to investing in heavy-duty reusable gloves at a cost of a couple of hundred dollars.</p> <p>Check out these &ldquo;<a href="" title="Energy saving tips">Sure Energy Savers</a>&rdquo; tips from Energy Star for ways to realize quick savings now.</p> <p><strong>Invest Now to Save in the Long Term</strong></p> <p>If you lease a facility, then it may not make sense to spend money greening your building&rsquo;s infrastructure, aside from easy-to-implement fixes like using energy efficient light bulbs or equipment. However, if you intend to be in the space for several years, then it&rsquo;s worth crunching the numbers to see if It&rsquo;s worth making longer-term green fixes such as upgrading your AC system. If you are going to be in a facility for five years and it will take two years to pay back, why not do it?</p> <p>Even modest changes can make a big difference and be paid off quickly. Fixes such as improving insulation and capitalizing on natural light by using frosted windows instead of blinds has the potential to reduce your electric bill by up to 80 percent &ndash; a massive saving for small businesses.</p> <p>Of course this all depends on your location and other variables, but quick fixes such as these do have the potential to generate 15-20 percent in savings, green marketing consultant Shel Horowitz tells Entrepreneur magazine.</p> <p><strong>Get Help Ascertaining the Savings of Pricier Sustainability Upgrades</strong></p> <p>You don&rsquo;t have to go it alone; there are many organizations that can help you determine which sustainability measure will help you reap the best return on your investment.</p> <ul> <li> The <a href="" title="Energy Star small business resources"><strong>Energy Star for Small Business</strong></a> website offers free information and technical support for small businesses, including a <a href="" title="Guide for analyzing and upgrading your facilities">How To Guide for Analyzing and Upgrading your Facility</a>, tips on preparing an energy strategy and more.</li> <li> <strong>Call your utility provider</strong>. They can provide free surveys and help you determine what you can do differently.</li> <li> Find out if <strong>financial incentives</strong> are available from your local or state government for installing energy efficient HVA systems, windows, appliances and lighting. Check out for links to <a href="" title="Tax credits and rebates by state">tax credits, rebates and savings available by state</a>.</li> <li> <strong>Third party green certification organizations</strong>, like The <a href="" title="Green Business Bureau website">Green Business Bureau</a> and the <a href="" title="Green Business Bureau">Green Business Network</a>, provide onsite and online assistance, marketing support tools, and certification confirming the credibility and authenticity of your green initiatives.</li> </ul> <p><strong>The Bottom Line</strong></p> <p>While green measures and investments can have both short- and long-term financial payoffs, the benefits aren&rsquo;t just in dollars saved. If your company places a high value on green practices, the feeling that &ldquo;we are all doing good&rdquo; can really set you apart both to your employees, your customers and community as a whole.</p> <p><strong>Related Resources</strong></p> <ul> <li> <strong><a href="" title="SBA Green Business Guide">SBA Green Business Guide</a></strong> &ndash; Includes essential information for greening and marketing your &ldquo;green&rdquo; business, including considerations such as green certification and eco-labeling, <a href="">environmental grants and loans</a>, and more.</li> </ul> <p><strong>Related Blogs</strong></p> <ul> <li> <a href="" title="Online course - Tips for running a green busines">New SBA Online Course Targets Green Entrepreneurs; Offers Tips on Adopting Green Business</a></li> <li> <a href="" title="How to use green marketing">How to Use Green Marketing Effectively in your Business</a></li> </ul> Small Business Cents Financing Managing Marketing Starting Mon, 22 Apr 2013 11:46:07 +0000 Caron_Beesley 582221 at Managing Small Business Cash Flow – Answers to 10 Commonly Asked Questions <p>Cash flow is the lifeblood of a business and critical in its growth. Small businesses are hugely dependent on their cash flow, and must either cut costs or scramble to find alternative funding when they are not being paid on time. With money tight and bank loans hard to get, a cash-strapped company can easily be pushed to the brink.</p> <p>But what are the basics of good cash flow management? Are there any cash flow templates you can leverage? Where does your breakeven analysis fit in? And, what strategies can you use to ensure cash is flowing, whether you are in the startup stage or looking to grow an established business?</p> <p>To find answers to these questions, I checked out an archived SBA Web Chat on &ndash; <a href="" title="Cash Flow Management Webinar">Cash Flow Management</a> &ndash; hosted by <a href="">Julie Brander</a> a business consultant and mentor with <a href="" title="link to SCORE">SCORE</a>.</p> <p>Here are Julie&rsquo;s answers to a series of cash flow questions posed by individual small business owners (but which are universal to us all):</p> <p> <strong>Q: Would you recommend that a start-up venture in the early stages do a cash flow chart and why?</strong></p> <p><strong>A:</strong> A cash flow is the single most important aspect of your business because it focuses on the actual cash that goes in and out of your company. Make a list of all the startup costs or one-time expenses, your monthly fixed and variable expenses, and project your sales to see if this business is feasible. Without knowing your costs and expenses, you will not be able to project your income needed to make a profit in your business.</p> <p><strong>Q: I struggle just coming up with a template to use to project out my cash flows. I use Excel, but don&#39;t use it well. I can look at last months and know where cash went, but I want to look out to the week, one month, one year. Do any tools or templates work better than others?</strong></p> <p><strong>A:</strong> Take a look at this <a href="" title="cash flow template link">Cash Flow Template</a> from SCORE for a 12-month cash flow. There are other resources online; some are free and some are not. Look into accounting software for this feature as well.</p> <p>(For more specifics on what to include and why, read: <a href="" title="projecting cash flow blog post">Projecting your Business Cash Flow, Made Simple</a>)</p> <p><strong>Q: If you are unable to secure credit and credit has been cut or credit lines have been closed, how do you keep the doors open to your business?</strong></p> <p><strong>A:</strong> You will need to sell the inventory that you have and pay cash for all inventory and services that you need until you can build up your credit again. Managing your money with your cash flow chart will help so that you are aware of all expenses. Cutting expenses and increasing sales is always the goal.</p> <p><strong>Q: How important is it for start-ups to calculate their break-even point and what is the easiest way for a non-financial person to do it? </strong></p> <p><strong>A:</strong> Create a simple spreadsheet that lists all the income from sales each day, week, month and year and all the expenses that the company has to pay out. ( has more information on this topic here: <a href="" title="breakeven analysis page">Breakeven Analysis</a>.) There are templates online that you can use; for example, SCORE offers a free <a href="" title="Breakeven chart from SCORE">Breakeven Chart</a> that you can use.</p> <p><strong>Q: I have a hard time getting clients to pay on time. If they don&rsquo;t pay on time, I have a hard time meeting our expenses. Any suggestions on how to get paid quicker?</strong></p> <p><strong>A: </strong>You can offer a discount for COD (cash on delivery) or net 10 days; it could be 2% off for paying more quickly. Otherwise, the only way to get paid quicker is to call weekly and remind your customer that money is due and offer to take a charge card over the phone. (For more tips, check out these blogs: <a href="" title="Tips to Collect from Nonpaying Clients blog post">Tips for Collecting from Non-Paying Clients</a> and <a href="" title="Invoicing blog post">How to Get Paid Faster With a Better Invoicing Process</a>.</p> <p><strong>Q: I am in the process of opening a coffee shop. How much inventory should I purchase for startup so that I do not overbuy?</strong></p> <p><strong>A:</strong> With your financial projections, you can guess about how much you will be selling. Buy as little as possible to start&mdash;but make sure that you can get a quick delivery, as you never ever want to run out of anything. This is something that you will learn as you are in business.</p> <p><strong>Q:</strong> <strong>Is there a set percentage to mark up the prices for merchandise? Also, if I can get a discount from a vendor for purchasing a higher volume, do I sell it at a discount or should I sell it at the price I had before the discount?</strong></p> <p>A: A mark-up can vary depending on your overhead costs. Higher overhead would require a higher mark-up. Always sell your merchandise for as much as the market will bear. If there is a higher perceived value, people will pay more. The discount from the vendor means more profit in your pocket.</p> <p><strong>Q: What options do micro businesses (mom &amp; pop) size have in obtaining periodic help needed with small loans to help with cash flow?</strong></p> <p><strong>A:</strong> A line of credit is the easiest way to have money available as needed. You would have a limit and use it as needed and pay only for what you use. If you are not able to get a line of credit, you need to make sure that your sales increase to create cash flow. Give your customers incentives to buy more or offer discounts.</p> <p><strong>Q: At what point should you consider using a collection agency to help you collect on past due receivables?</strong></p> <p><strong>A: </strong>Collection agencies take 30%, so try to collect on your own by calling and offering credit terms or returns or credit card payment. If the company does not have the money, you will not be getting paid so your only hope is to take back the merchandise if you can.</p> <p><strong>Q: What is the formula to determine how much cash reserves a business should hold?</strong></p> <p><strong>A: </strong>Always have enough cash reserves to cover your slow months in business. You should be safe if you can have 3-6 months or more to cover all unknown or variable expenses that may come up. Always consider increasing your sales and moving your inventory as quickly as you can.</p> <p><strong>More Information and Learning Opportunities</strong></p> <p>For a full transcript of the web chat and answers to other questions about cash flow management, check out the <a href="" title="link to complete chat session">complete chat session</a> on <a href="" title="link to Learning Center">SBA&rsquo;s Learning Center</a>.</p> <p>Follow SBA on <a href="" title="link to SBA on Twitter">Twitter</a>, <a href="" title="link to SBA on Facebook">Facebook</a> and <a href="" title="link to sign up for weekly email updates">sign-up for weekly email updates</a> to learn more about upcoming web chats and other learning opportunities.</p> Small Business Cents Financing Managing Mon, 15 Apr 2013 11:38:01 +0000 Caron_Beesley 571621 at What Home-Office Deductions Can Your Small Business Claim and How? <p>More than half of all U.S. businesses are <a href="">based out of an owner&rsquo;s home</a>, and with this year&rsquo;s tax season deadlines fast approaching, you may be wondering if your business qualifies for the deduction.</p> <p>To help business owners understand more about this important deduction, SBA sat down with IRS tax expert, Phyllis Grimes, about what is and what isn&rsquo;t deductible. This interview is part of a series of <a href="">short online videos</a> hosted on SBA&rsquo;s <strong><a href="" title="SBA Small Business Learning Center">Small Business Learning Center</a></strong>, which offer tips and facts about all aspects of business financing.</p> <p>Here&rsquo;s what you need to know.</p> <p><strong>Evidence That Your Home is Your Principal Place of Business</strong></p> <p>In order to be eligible to claim the home office deduction, your home must be your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients or customers in your home in the normal course of your business&mdash;even though you also carry on business at another location&mdash;you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients or customers.</p> <p><strong>Distinguish Between Personal Home Expenses and Home-Based Business Expenses</strong></p> <p>To claim the home office deduction, an area of your home must also be used exclusively and regularly for business use. This is an important distinction, because both conditions must apply. For example, consider this scenario &ndash; a home-based attorney uses the den of his or her home to write legal briefs or prepare clients tax returns but the family also uses the den for recreation. So the den is not used exclusively in the attorney&rsquo;s profession so he or she can&rsquo;t claim a business deduction for its use.</p> <p>If, however, you have a separate room or blocked off area that is identifiable as being used solely for business purposes, such as an office space or work area (and you use it &ldquo;regularly&rdquo;), then this would qualify you for the deduction.</p> <p>(Note that if you regularly operate an in-home day care, the &ldquo;exclusive&rdquo; rule does not apply. Find more details on this exception&nbsp;<a href=",,id=108138,00.html" title="Link to IRS website">here</a>.)</p> <p><strong>What Expenses Can You Deduct?</strong></p> <p>If you meet all the criteria to claim the home-based business deduction, you&rsquo;ll next need to understand how the IRS permits eligible business owners to claim <strong>ordinary and necessary expenses</strong> related to the business. Essentially, an ordinary expense is an expense that is common and accepted in the taxpayer&rsquo;s trade or business (in the case of a home business, an ordinary expense could be an installation fee for a business telephone line). A necessary expense is one that is appropriate for the business (such as the cost of your email marketing software). Deductible expenses might also include the business portion of real estate taxes, mortgage interest, rent, utility, insurance, depreciation, utilities, painting and repairs. Refer to IRS&nbsp;<a href="" title="Link to IRS Form 8829">Form 8829</a>&nbsp;for a complete list.</p> <p><strong>How Much Can You Deduct?</strong></p> <p>Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities. To calculate this amount, you&rsquo;ll need to calculate the total square footage of your home and then the total square footage of the space you use for your business.&nbsp;IRS&nbsp;<a href="" title="Link to IRS Form 8829">Form 8829</a>&nbsp;also helps you figure out this calculation.</p> <p>A common error is to deduct expenses for a portion of the home that is not regularly used or exclusively used for business. For example, the telephone service charge, including taxes, for the first phone line into a home is a nondeductible personal expense. However, charges for business long-distance phone calls on that line&mdash;and the cost of a second line used exclusively for business&mdash;are deductible business expenses.</p> <p><strong>How to File Your Home Office Deduction Claim</strong></p> <p>Use&nbsp;<a href="" title="Link to Schedule C Form 1040">Schedule C Form 1040</a>&nbsp;to report income and expenses and the deductible amount for the business use of your home (which you calculate using&nbsp;<a href="" title="Link to IRS Form 8829">Form 8829</a>).</p> <p><strong>Additional Information</strong></p> <p>For worksheets and additional information on computing the allowable home-office deduction, <a href=";-Self-Employed/Home-Office-Deduction" title="IRS information on the home office deduction">check out these resources offered by the IRS</a> and refer to <a href="" title="IRS guide to deducting home business expenses">Publication 587, Business Use of Your Home</a> for a full explanation of tax deductions.</p> Small Business Cents Managing Taxes Mon, 01 Apr 2013 11:38:03 +0000 Caron_Beesley 554131 at Which Tax Form Should You File? Schedule C or the (Easier) Schedule C-EZ? <p><img alt="Schedule C" src="/sites/default/files/images/ScheduleC.JPG" style="width: 317px; height: 209px; float: right;" />If you are a sole proprietor, any earnings you make or expenses you incur as a business owner are included as part of your individual annual tax return (Form 1040). To calculate exactly what to report on Form 1040, you must itemize all operational income and expenses on one of two forms &ndash; Schedule C or Schedule C-EZ.</p> <p>But which one should you use and how do you file? Here&rsquo;s what you need to know.</p> <p><strong>Who Should Use Schedule C?</strong></p> <p><a href="" title="Schedule C Form">Schedule C (Form 1040) Profit or Loss from Business</a> is the federal tax form filed by most sole proprietors or one owner businesses. The form is used to report both income and losses during tax season.</p> <p>Sole proprietorships are often considered new to business ownership. However, the truth is that over 70 percent of U.S. business are owned and operated by sole proprietors or sole traders.</p> <p>Business owners who make very little, or even those who are trading at a loss, can also use schedule C.</p> <p><strong>What is Schedule C-EZ?</strong></p> <p><a href="" title="Schedule C-EZ Form">Schedule C-EZ</a> is a simplified and abbreviated version of Schedule C (hence the &ldquo;EZ&rdquo; in the title) and can save eligible business owners time and trouble when reporting business income and expenses on the 1040 federal income tax form.</p> <p><strong>Should You File a Schedule C or Schedule C-EZ?</strong></p> <p>Businesses that are eligible to use the simpler Schedule C-EZ must meet the following criteria:</p> <ul> <li> Your expenses are not greater than $5,000</li> <li> You have no employees</li> <li> You have no inventory</li> <li> You are not using depreciation or deducting the cost of your home you can use Schedule C-EZ.</li> </ul> <p>If you can check all these boxes, then Schedule C-EZ can make tax season a lot easier.</p> <p>If you run a home-based business, to take advantage of the <a href=";-Self-Employed/Home-Office-Deduction" title="Information from the IRS about claiming the home office tax deduction">home office deduction</a> you&rsquo;ll need to use Schedule C. It may take longer, but the tax savings will be worth it.</p> <p><strong>What is the Process for Filing a Schedule C?</strong></p> <p>Start with good records &ndash; something you should be doing as a business owner from the get-go. Every expense, payment, receipt, tax form and loss needs to be recorded and kept separate from your own personal financial records (separate credit cards, for example, will ensure you can easily identify and track business costs).</p> <p>Schedule C itself is filed annually as an attachment to <a href=",-U.S.-Individual-Income-Tax-Return" title="For m 1040">Form 1040 &ndash; Individual Tax Return</a>. The quickest and safest way to file is by <a href="" title="IRS e-file information">IRS e-file</a>&mdash;either online with commercial tax preparation software or through a tax professional who is an authorized IRS e-file provider.</p> <p><strong>Don&rsquo;t Forget to Make Quarterly Estimated Payments</strong></p> <p>As a Schedule C filer, you also need to make quarterly estimated tax payments to cover your income tax (federal and state), social security and self-employment tax. This article explains the process: <a href="" title="Information about how to calculate and make estimated tax payments">How To Calculate and Make Estimated Tax Payments</a>.</p> <p><strong>Additional Information</strong></p> <p>These tips were drawn from the <a href="" title="SBA Small Business Learning Center">SBA Small Business Learning Center</a> video series on financing topics (specifically <a href="" title="Schedule C Training">Schedule C Profit or Loss from Business</a>). Check out the Center for more free self-paced online training courses, quick videos, web chats and more to help small business owners explore and learn about the many aspects of business ownership.</p> <p>Also check out SBA&rsquo;s <a href="" title="SBA Guide to Filing and Paying Taxes">Filing and Paying Small Business Taxes Guide</a> and the <a href=";-Self-Employed/Small-Business-and-Self-Employed-Tax-Center-1" title="IRS Small Business and Self-Employed Center web page">IRS Small Business and Self-Employed Center</a> for more advice on tax matters.</p> Small Business Cents Business Laws Managing Taxes Mon, 25 Mar 2013 11:41:32 +0000 Caron_Beesley 550051 at Need Financing to Buy or Grow a Franchise? New Franchise Industry Programs Can Help <p>The franchise industry, like all businesses, was not immune to the economic crisis of 2008 and the ensuing credit crunch. But the vital signs of a recovery are there. According to the <a href="" title="Link to International Franchise Association website">International Franchise Association</a> (IFA), many of the country&rsquo;s business sectors currently starting to show growth mirror those sectors expected to be the leading drivers of employment in franchising this year. These include food service, health care, hospitality and construction&mdash;all sectors with a high concentration of franchise businesses.</p> <p>&ldquo;For those Americans dealing with long-term unemployment or a lack of growth opportunities in their current jobs, franchise ownership offers a viable way to be in business for yourself, but not by yourself,&rdquo; said IFA President &amp; CEO Steve Caldeira.</p> <p><strong>The Franchise Industry Tackles the Credit Crunch Head-on</strong></p> <p>Despite these indicators, financing remains a problem for potential franchise owners.&nbsp; According to Entrepreneur magazine (January 2013), there&rsquo;s still an 18 percent lending shortfall in the franchising industry. In a bid to boost franchise ownership, many franchisors are taking matters into their own hands and offering financing programs of their own. Meineke, The UPS Store, Gold&rsquo;s Gym, Masasge Envy and Instant Imprints are just a few examples of franchisors now offering financing to qualifying first-time and multi-store franchise owners.</p> <p>Want to know more? IFA President and CEO, Steve Caldeira offers the following tips (courtesy of Entrepreneur magazine) to would-be or existing franchise owners looking for an alternative to traditional financing options.</p> <p><strong>Which Franchisors Are Offering Financing Programs?</strong></p> <p>Approximately 75 to 100 franchisors are offering or working on offering creative financing programs for start-up franchise owners or those looking to expand. Programs range from zero-percent financing for a limited-term, lower license fees, reduced royalties and minority stake ownership by franchisors in multi-unit outlets. Each brand has its own offering, so down payments and collateral requirements will vary.</p> <p>In addition, the franchise industry is also experiencing a growth in companies dedicated to helping franchise owners secure financing. Two such firms are <a href="" title="Boefly website">BoeFly</a> (which matches borrowers to lenders online) and <a href="" title="Franchise America Finance website">Franchise America Finance</a> (who provides custom lending solutions for franchisees and works with franchisors such as The UPS Store, Popeyes, and Jersey Mike&rsquo;s).</p> <p><strong>Always Do Your Franchise and Financing Due Diligence</strong></p> <p>If you are new to franchise ownership, be sure to do your research and due diligence about the franchise system you&rsquo;re interested in (<a href="" title="Tips on investigating a franchise opportunity">get tips on that process here</a>). Study the Franchise Disclosure Document (required by law) and speak to other franchisees about the brand and the financing program on offer. Next, try to understand what your financial responsibilities as a franchise owner will be. This blog offers some pointers on this: <a href="" title="Link to blog about the cost of buying a franchise">Buying a Franchise &ndash; How to Determine What it&rsquo;s Going to Cost You</a>.</p> <p><strong>Other Franchise Financing Options</strong></p> <p>Many banks and credit unions offer financing for franchise purchases, so be sure to compare any franchisor lending rates and terms with these.&nbsp;When you approach a bank, be prepared to disclose all your financial information. While your credit rating is important, you&rsquo;ll also need to provide a personal financial statement, copies of tax returns and information about the source of your down payment funds.</p> <p>You should also be aware that your choice of franchise will influence a bank&rsquo;s decision to fund you. Franchises with strong brand names, a track record of consistent profits and cash flow&mdash;plus an ability to perform well across a variety of diverse locations&mdash;are going to stand you in good stead when you meet with your bank manager.</p> <p>If your bank is hesitant about a particular franchise system&rsquo;s performance, or your finances aren&rsquo;t as strong as they could be, you might want to consider an&nbsp;<a href="" title="Information about SBA loans">SBA loan.&nbsp;</a>SBA doesn&rsquo;t lend to business owners directly; it provides a repayment guarantee to banks and lenders for money they lend to small businesses, making it less risky for the banks. Use this&nbsp;<strong><a href="" title="Loans and Grants search tool">search tool</a></strong>&nbsp;to find the right SBA loan for you.</p> <p>&nbsp;</p> Small Business Cents Financing Mon, 18 Mar 2013 11:33:42 +0000 Caron_Beesley 540371 at The Social Storefront – How to Sell Your Products and Services on Facebook <p>Have you ever considered extending your small business storefront to Facebook?</p> <p>According to <a href=";_r=1&amp;">The New York Times</a>, small retailers are having more success than their larger counterparts when it comes to selling socially with Facebook storefronts proving to be a successful outlet for small businesses with less than $100,000 in revenue and fewer than 10 employees.</p> <p>Yet Facebook storefronts present business owners with a number of challenges. For example, if you have a business page on Facebook, you do not own it; Facebook does, and as such, it is free to change the look, feel, security and functionality of your page when it sees fit. Furthermore, many consumers may be reticent about conducting financial transactions on social media.</p> <p>If your small business is interested in exploring this new revenue stream, here are some tips to help you get started building your social storefront:</p> <p><strong>1.&nbsp;</strong><strong>Build Your Facebook Storefront</strong></p> <p>Facebook storefronts are wholly independent of Facebook and are enabled by third party apps and services from companies such as <a href="">Ecwid</a>, <a href="" title="BigCommerce website">BigCommerce&rsquo;s</a> <a href="" title="SocialShop application">SocialShop application</a> and <a href="" title="VendorShopSocial website">VendorShop Social</a>. Alternatively, you can also have an app developer build you a custom storefront. &nbsp;</p> <p>These apps offer a number of social shopping features that you can add to your Facebook business page. Some are free, with options to upgrade for increased functionality, while others charge a low monthly subscription fee. (<em>Note</em>: The Facebook store provider market is an emerging one with new start-ups popping up regularly. Furthermore, established players are increasingly targeted for acquisition. So do your due diligence on this one. Look for providers with a good customer service track record and try not to get locked into time-bound contracts.)</p> <p>Whichever app you choose, getting started is quite easy. Once your app is installed, you can add product listings; a welcome page to showcase certain products and promotions; a shopping cart; and a variety of payment options such as PayPal. Some apps also include tools to promote your storefront to your fans, via email, your blog or website.&nbsp;</p> <p><strong>2.&nbsp;</strong><strong>Personalize Your Storefront</strong></p> <p>Next, personalize your storefront to reflect your brand and appeal to the fans and customers you are hoping to engage with and sell to. Think about adding a human element to your banner image&mdash;this will help connect you with your potential buyers. To maximize your Facebook sales, look for ways to engage and connect&mdash;post tips that relate to your industry; share articles, images and blogs that might be of interest; and have a dialogue with your fans. Above all, inject some personality into your page&mdash;this is a huge differentiator for small businesses, so use it!</p> <p>The New York Times also suggests pinning and tagging status updates and photos to attract fans and keep your page dynamic. For example, you could run a contest that encourages customers to tag your products in the photos they post on their Facebook page. In doing so, you&rsquo;ll get free visibility on that person&rsquo;s wall for all their friends and followers to see. You can also use the pin feature to highlight a product of the week or a special discount.</p> <p><strong>3. Be Social, Build a Community</strong></p> <p>Make your page an active one&mdash;treat it as you would your own bricks and mortar store. Meet and greet fans, and engage with them. Encourage them to post by asking open-ended questions in your status updates; comment on and like the interaction that follows.</p> <p>You can also grow your community outside the confines of our own page. For example, follow business pages that relate to your products, industry or neighborhood and interact with folks on those pages (without being overly promotional). For example, if you own a retail store on Main Street, look around and find out who else is on Facebook&mdash;your local coffee shop, library, community newspaper? Give them a like (using your business page profile) and join in the conversation with other business owners and their customers. Your business will appear on their wall and help increase your visibility and likeability!</p> <p><strong>4. Don&rsquo;t Put All Your Eggs in One Basket</strong></p> <p>It&rsquo;s unlikely that Facebook will ever be your only sales channel. So test the waters before you set up your store and ask your fans and customers if they&rsquo;d be interested in buying from you via Facebook. Then, once you are up and running, don&rsquo;t ignore your website or retail location. Small businesses are known to get as much as 15-30 percent of their sales from Facebook, but remember that not everyone is on Facebook, and not all are comfortable doing business there.</p> <p><strong>5. More Reading</strong></p> <p>For some real-world examples of how small businesses are using Facebook storefronts, check out this article from The New York Times: <a href=";_r=1&amp;" title="New York Times article - Small Retailers Open Up Storefronts on Facebook Pages">Small Retailers Open Up Storefronts on Facebook Pages</a>.</p> Small Business Cents Managing Marketing Starting Mon, 11 Mar 2013 11:12:49 +0000 Caron_Beesley 528741 at