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Don’t Be a Social Media Marketing Skeptic – Learn Where and How to Start

By Caron_Beesley, Contributor
Published: January 3, 2013 Updated: September 23, 2016

There’s no doubt that social media marketing is a proven and established platform for connecting with customers, building a community and generating business. Yet, despite the evidence of its effectiveness as a marketing tool, surveys and studies say few small businesses are making active use of social media platforms like Facebook, Twitter or LinkedIn to promote products and services.

A report by eMarketer found that just 24 percent of small businesses have integrated social media in a structured way in their businesses. The report also references findings from Constant Contact that only 49 percent of small businesses consider social media marketing effective.

Why the skepticism? Here are a few reasons and excuses I’ve heard:

  • “I don’t know where to start”
  • “I’m too busy”
  • “I don’t know which social media site is right for my business”
  • “I tried it but it didn’t work”
  • “I’m struggling to build engagement”
  • “I don’t have enough updates to keep my site looking active”

Knowing where to start is perhaps the number one obstacle holding many small business owners back. Knowing what to do when you get there is next. For example, should you use social media to generate leads? For branding? Customer service? Marketing? 

There are numerous blogs on the SBA.gov Community offering tips for getting started in social media marketing. One consistent piece of advice runs through them all: find out where your customers are, start small, and, as you learn, grow out from there.

How?

Last year, I wrote a blog called: How to "Pull Your Head Out of the Sand" and Use Social Media in Your Small Business where I summarized some of the great recommendations from a social media panel at the 2012 National Small Business Week Conference in Washington, D.C. The panel featured experts from Twitter, Constant Contact, Yelp, Google and others. Here’s a summary of their recommendations, a great baseline for getting started:

  • Which Platform is the Right One? Erica Ayotte, social media manager with Constant Contact, recommends businesses start with one channel to test and nurture it. Then try to diversify: “Spend a little time each week exploring new platforms and figure out if they might be for you.” GrowBizMedia’s Rieva Lesonsky recommends: “...find out where your customers can be found, go there first, and then spread out from there… if you run a restaurant, yes, you probably should be on Twitter, but you should really be on Yelp first.”
  • How do You Find the Right People to Engage With? Use search tools to identify and follow people who are influencers in your industry. For example, if you are in the restaurant business, identify food bloggers in your region, give them a follow, and slowly you’ll start to build and grow your followers and influence. The panel also stressed connecting your social media activity to your loyal email subscriber list. Send them an email to let them know about your social media presence and generate new follows from those who are already engaged.
  • What’s the Best Way to Engage with Followers? This is the one area that takes time. Start with interesting information. Google’s Jeff Aguero recommends starting with quality content – something you do really well – then amplify it with social media. Web chats, contests and surveys are great ways to engage, but the panel cautioned small business owners to resist this form of heavy interaction until their new social efforts have had time to grow. “Once you’ve established awareness and trust, then look to step up your approach,” suggested Constant Contact’s Ayotte. “Don’t let perfection be the enemy of progress,” she explained. “It can take some time to figure out what content is going to resonate with an audience… Try something new if no one responds to your Facebook posts.  It’s OK.  Tweak your posts until you find your sweet spot.”

Don’t Forget to Integrate Your Email and Social Media Marketing

Email is still the preferred method of communication among consumers, and Constant Contact predicts that in 2013 it will remain their preferred marketing channel as well. Email is also a key element in driving social media success, “…using both together to support one another can boost a campaign and bring greater collective benefits, as opposed to using just one or the other,” advises Constant Contact.

Learn from the Experts

There are myriad webinars, ebooks, blogs and other tools that can help you learn the tricks of the trade. Small business organizations like SCORE, Small Business Development Centers, and others also offer advice and seminars on this topic (use this interactive map to find resources in your area).

Here’s a selection of SBA blogs that can also help with key areas of your social media strategy:

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

What Will 2013 Look Like For Franchising?

By FranchiseKing, Guest Blogger
Published: January 3, 2013 Updated: July 5, 2016

Will great things finally start to happen in franchising in 2013?

Should you become the owner of a franchise business in 2013?

What are some of the trends in franchising?

Let’s dig in...                                         

 

Employment

Jobs aren’t what they used to be. The days of working for the same company for 30 years are over. A lot of today’s corporate employees move from job to job. And it’s usually not their fault. Divisions close down. Companies restructure. As Guy Kawasaki* says, “Shitake happens.”

A lot of people I talk to are sick of getting downsized*, right-sized and just plain outsized. They want to have some semblance of control back in their professional lives. That’s one reason that a lot of downsized workers look into franchise ownership.

The effects of the recession still linger; some of those who’ve lost their jobs aren’t even in the job market anymore. They’ve essentially opted out*.

The sheer amount of people that have opted out of job-seeking could be a boon to franchising, which has not seen a lot of growth the last couple of years.*

 

Opportunities

If you’ve opted out of the job market, you’re probably open to other ideas...like owning your own business. If so, franchise ownership may be worth a look.

Just make sure that you’re right for the franchise business model. Make sure that you’re 100% on-board with following rules. Make sure that your family is on board with this idea of yours, too. It’s important to have their support.

 

Is Now The Time?

There are three very positive things happening for today’s future franchise owners.

1.      Small business loan rates have been very reasonable.

2.      Franchisors are aggressively discounting some of their fees

3.      Commercial space (depending on your area) is readily available

If you feel that you have what it takes to become the owner of a franchise, and you can leverage those three things, 2013 may be your year.

Just don’t forget to do a great job on your due diligence. Because if you don’t do a thorough job with your research, and don’t use the plethora of small business resources that are readily available these days, 2013 may not be your year.

In other words, take your time. And don’t do it alone.

 

Franchise Trends

If you’re going to look into franchise ownership in 2013, it wouldn’t hurt to start noticing and learning about the current business and franchise trends.

One of the biggest trends taking place—and it’s affecting everything we do—is mobile communications and technology.

According to one study*, 47% of consumers confirm they use their smartphone to search for local information such as a local store they want to visit. Forty-six percent of consumers look up prices on a store’s mobile site and 42% check inventory prior to shopping in the store.

If you’re thinking of becoming the owner of a franchise that requires a physical location, you really need to keep an eye on the latest trends in mobile technology and mobile marketing, like these*.

Interestingly enough, most of the top franchise trends for 2013 involve franchise opportunities that do require a commercial space. Again, pay attention to what’s happening in the world of mobile technology.

2013 could shape up to be a great year to become a franchise business owner.

There’s good commercial space available. Small business loan rates are decent. Some franchisors are aggressively reducing up-front costs. Fantastic business tools and resources are easily accessible.

You just have to use them.

*Non-US Government links

About the Author:

FranchiseKing
Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.

Contract Law – How to Create a Legally Binding Contract

By Caron_Beesley, Contributor
Published: January 2, 2013 Updated: September 23, 2016

Whether you are entering into a relationship with a customer, a vendor or an independent contractor, contracts are a fact of business. You need them because they serve as legally valid agreements protecting your interests.

But aren’t contracts laden with legalese? Don’t they have to be blessed by an attorney to ensure their validity? Not always.

In fact, I’ve seen contracts come across my table that are less than one page in length, in plain English, and still legally binding. How?

Generally, to be legally valid, most contracts must contain two elements:

  • All parties must agree about an offer made by one party and accepted by the other.
  • Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.

In addition, certain contracts are required by state law to be in writing (real estate transactions, for example), while others are not. Check with your state or with an attorney if you are unclear, but it’s always good business practice to put every binding agreement in writing.

Here’s how your small business can comply with these requirements and ensure your contracts are legally valid:  

1) The Ins and Outs of Reaching an Agreement

The point when two parties come to an agreement can be a little fuzzy. For example, many businesses will put a standard contract template before an independent contractor and expect it to be signed without any discussion. At that point – and the law is clear on this – a legal contract exists only when one party makes an offer and the other accepts all terms of that offer. So in this example, the contractor is still free to rebut any of the points in the contract and make a counter offer, until an agreement has been reached.

How Long Should an Offer Stay Open?

Offers are rarely accepted immediately and further discussions or amendments may be required. Unless the offer has a deadline for acceptance, it can remain open. It’s good practice to include an expiration date to ensure you have room to maneuver should you wish to change the terms or revoke the offer before a certain date.

Offers that are subject to an expiration date – known as option agreements – are typically price-driven or give the buyer the opportunity to mull the decision without fear of losing out to a competing buyer. It’s important to understand that a seller can place a fee on option agreements. For example, if you decide to give a buyer 30 days to think over a purchase, you can charge him for that. This typically occurs when the product or service is of high value or when the seller pledges not to sell that product to another customer during that 30-day option period. Likewise, a seller can’t revoke the offer until that 30-day period ends.

What about Counteroffers?

Bargaining or negotiating can often lead to a counteroffer. Once made, the legal responsibility to accept, decline, or make another counteroffer then shifts to the original offeror.

2) The Importance of Exchanging Something of Value

In addition to ensuring both parties are in agreement on the terms of an offer, the second element that ensures a contract is legally valid is that both parties exchange something of value.  This is important since it differentiates a contract from being a one-sided statement or even a gift. “Something of value” might be a promise to perform certain services by one party while the other party agrees to pay a fee for the work performed.

Most business transactions are based on this exchange of promises. However, the act of doing the work can also satisfy the exchange of value rule. For example, if you contract with a vendor to provide you X and Y, but you decide you need to add Z to the final deliverable, the vendor can create a binding contract by actually doing Z – something which you can’t quibble or get out of if you change your mind.

More Information and Resources

For more information about the legality of any agreements, consult a lawyer or attorney.  

For insights into what a contract should look like, check out available contract templates from SCORE. Use the search field to find “contract agreements” or other keywords for the type of contract you are looking to create. Also check out these blogs for additional tips:

 

 

 

 

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

4 Tips for Hiring Your First Employee in 2013

By Caron_Beesley, Contributor
Published: December 31, 2012 Updated: September 21, 2016

Are you turning down work because you simply don’t have enough time or hands on-board to take it on? Thinking of hiring your first employee? Congratulations – your business is doing well!

But before you advertise for a new employee, proceed with caution. Hiring staff is a commitment to the future, and should be made in the context of your long-term growth plan and whether you really want to be an employer. Here are some points to consider, plus some tips for determining whether you can afford to hire your first employee.

1. What is your vision for your business?

When faced with too much work, solopreneurs are often encouraged to hire up, but is that what you want for your business? Is it your goal to become a larger business or remain a sole proprietor? Could you farm off work to independent contractors or outsource certain functions to take some weight off your shoulders? Could you team with other businesses to complement your services? For example, a graphic designer or web designer could “partner” with a marketing consultant to offer customers a range of full-service solutions.

Virtual assistants are another non-hire staffing option and can help you with administrative and even basic sales and marketing tasks. Temporary workers might be a short term option, but be aware: many laws and regulations that apply to full-time employees also apply to seasonal or part-time employees.

The following article offer some tips for alternative source of labor:

2. Where do you need help?

If you’ve decided to bring an employee on board, your first step is to project your business workload and identify areas where you need help. What does your workload or pipeline look like for the next 30 days, 90 days and six months, and which jobs do you need help with? What are you doing now that you could offload or have an employee augment? Perhaps you need skilled labor out in the field, or a sales rep to help you grow your business. Or, maybe you simply want to free up your time to concentrate on bringing in and fulfilling business orders.

3. Can you manage people?

Don’t overlook this important consideration. If you’ve managed employees in another occupation, how successful were you at making good hiring decisions? How many bad ones have you made? 

4. Can You Afford It?

Working out whether you can afford to hire is a common stumbling block. Start by building a realistic picture of the costs and overheads that your business will incur. These include:

  • Wages
  • Unemployment Tax – State unemployment taxes vary by state, so check with yours. Federal unemployment tax is 0.8 percent on each employee's first $7,000 of earnings.
  • Workers Compensation Insurance – For new employers, this figure depends on your industry and the job performed. Again, check with your state about your expected rate.
  • Medicare and Social Security Taxes – Currently, Social Security tax is 6.2 percent on wages up to $113,700, and Medicare tax is another 1.45 percent.
  • Recruitment and Training Costs – These can run into the thousands, but, you can reduce them by using networking and referrals to uncover candidates.
  • Benefits – Optional!
  • Payroll Costs – It takes time and money to administer payroll and calculate taxes and withholding. Examine the cost of payroll software that can help streamline this task.
  • New Equipment – Computer, desk, other tools.
  • Software Licenses and Phone Data Plans
  • Insurance for Company Vehicles

Next, look at last year’s income and expenses and factor in the projected annual cost of an employee and the extra income one might make possible. Then, consider your pipeline and cash flow. Can you afford to live with reduced profitability for a few months as your business ramps up? Calculate what you can put into generating new business if you are freed up.

You don’t have to do this all on your own. Organizations like SCORE, Small Business Development Centers and Women’s Business Centers have resources and experts on hand to help small business owners navigate this process. Find assistance in your community here.

Additional Resources

 

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

How to Up the Ante and Start Selling to Big, Corporate Clients

By Caron_Beesley, Contributor
Published: December 27, 2012 Updated: September 16, 2016

Want to secure your first million-dollar deal in 2013? Crossing that threshold will probably mean that you'll have to start selling to large corporate clients for the first time. It can be tough for small businesses, but not impossible. So what does it take? Here are some tips for upping your ante and selling to big, corporate customers.

Do Your Homework

Breaking into a new market or new client base requires planning. Start with identifying your new target market and then defining the value your small business can offer them.

Use online research to identify businesses that might be the right fit for your products or services. Specifically, try to identify potential weaknesses or threats they may be facing by reading press releases, reviews, media coverage, and financial reports. This will help you determine potential pain points. Check out what your target’s competition is up to – what are they doing that your target client isn’t?

Consider ways in which your business can help these prospects with their pain points and challenges. How can you help them succeed, be more efficient, save money or achieve their business goals? Don’t forget to assemble proof points and examples of how you’ve helped other (perhaps smaller) companies do the same.

Be Clear About Your Differentiators

Now that you know your target clients, what is it about your business that will make you stand out? Build a picture of your company – its culture, values, existing customers, products and services – and think about ways these combine to differentiate you. This blog can help guide you through this process: 5 Tips for Using Differentiators to Increase Your Small Business Sales.

Getting a Meeting

Getting that all-important first meeting will take time and there are many ways to go about it. Which combination of tactics will work really depends on who your customers are and what influences them. Which conferences/networking events do they attend? What information are they seeking online to help them make informed purchasing decisions (this will help define your web-based calls to action)? Which media do they read? You may also want to consider hiring a sales rep with experience selling to larger corporations.

Some techniques to consider include:

For the best result, integrate your chosen techniques so that your messaging and your end goals are consistent across each tactic.

Making Your Pitch

This is your chance to make your homework work for you. Concentrate on your prospect’s pain points. How can your business help them ease their problems? Your pitch should be less about the product and more about why you are different, the value you bring and how you can make your client’s life easier and more profitable. Remember, larger corporations can be reluctant to switch vendors and may think it risky to work with a small business, so it’s vital that your business case focuses 100 percent on why it makes sense for your client to make the switch from another vendor to you.

Be Prepped and Ready for Questions

Aside from the points you make in your pitch, one of the most effective ways to stand out from your competitors is to come ready and prepared for all questions. Your meeting may include senior management and staff from pricing, contracts, legal, operations and procurement, so expect a diverse range of questions about your product, pricing, and terms, and be ready to answer promptly and clearly. If you can’t, quickly state that you will get back to them with a response within 24 hours, or one business day.

Alleviate Any Concerns About Your Being a “Small Business”

Small businesses can be a risky investment for corporations. They may be worried you can’t scale to their production needs or that you may go out of business or be acquired during the life of the contract.

Don’t ignore this concern. Be prepared for it and use your pitch to emphasize the benefits of doing business with a smaller company. Stress your agility, responsiveness, ability to customize products, etc. Mention any partners that can fill gaps that may leave them vulnerable. Act like a larger business by having a product road map or timeline that clearly shows what will happen when and when you anticipate your client will start to see results. By doing so, you’re already starting to prove your value before a contract has even been drawn up.

Have you upped the ante and started selling to larger, corporate clients? Share your experiences below.

Related Blog

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Why and How to Implement a Health and Wellness Program for Your Employees

By Caron_Beesley, Contributor
Published: December 24, 2012 Updated: December 24, 2012

As you look forward to a new year and new business opportunities, is the health and wellness of your employees at the forefront of your 2013 business plans?

According to a new study of more than 1,000 small-business owners by Humana and the National Small Business Association (NSBA), 93 percent of small businesses consider their employees’ physical and mental health to be important to their bottom line, and 54 percent say it’s “extremely important.” But despite that, only a third of respondents are confident they can manage employee health care needs, citing gaps in information and employee interest.

(Note: This survey defined health and wellness programs as initiatives to encourage employees to make healthier choices, such as getting preventative care, eating right and exercising.)

So what health and wellness issues are small business owners concerned about?

  • High employee stress is the number one concern for small business decision-makers, especially at smaller companies, with stress levels rating more than triple other employee well-being concerns.
  • Employees working when they are sick is second – 57 percent reported that their employees show up for work when they should be taking a sick day.

As this study shows, health and wellness programs can be a win-win situation for small businesses, fostering healthier people and healthier profits. So what’s holding small business owners back from implementing programs?

Employee Interest

A key factor in whether or not to introduce a health and wellness program rests with employee interest. For example, start-ups (many with younger employees) lead the way in providing wellness programs and their employees prefer it this way. In fact, 85 percent of start-ups say wellness programs are worth the investment and 63 percent are already adopting such programs. Interestingly, these start-ups say these programs aid in recruiting and retaining employees.

So with employees actively seeking health and wellness benefits, these programs are likely to become an increasingly important part of any small business owner’s hiring and personnel management strategy.

Employers Need More Information

More than half the small business owners surveyed maintained that insufficient information is available about introducing health and wellness programs at a small business. This is something healthcare insurance providers are increasingly aware of and are seeking to correct by providing tools and resources to help small business owners develop health and wellness programs. The reward for both is healthier employees and a healthier bottom line.

Tips for Implementing Health and Wellness Programs in Your Small Business

So how can you go about planning and implementing a program that makes sense for your business, with the limited resources available to you? Health and wellness plans don’t have to break the bank. With a bit of creativity there are many things you can do to keep employees health and happy.

Here are a few tips:

  • Talk to your employees. Find out what aspects of an employer-sponsored health and wellness plan they would value most. It could be discounted gym memberships, quarterly sponsored walks/runs, or employee-led healthy cooking workshops. maybe it’s just more awareness of free or low-cost preventative care options covered by your healthcare insurance plan.
  • Get ideas for your wellness program. This blog from former SBA guest blogger, Dawn Rivers Baker, offers some creative and engaging ideas for a low-cost or no-cost employee wellness program.
  • Get help structuring specific programs. The Centers for Disease Control provides some great online tools to help you design and structure your wellness programs. For example, CDC LEAN Works is a free web-based resource that can help employers design effective worksite obesity prevention and control programs, including an obesity cost calculator to estimate how much obesity is costing your company and how much in savings your company could reap with different sorts of workplace interventions.
  • Consult your healthcare insurance provider. Many now offer tools and resources to help employers develop programs. Familiarize yourself with the types of programs that make sense for your business.
  • Get help from small business assistance groups. Check in with your local Small Business Development Center or Chamber of Commerce. They may have resources or seminars that can help you build the right program for your business.

Have you implemented a wellness program? Has it improved your bottom line? Have any tips for other small business owners? Leave a comment below.

Related Blogs

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Hurricane Sandy: Tax and Financial Implications for Your Small Business

By BarbaraWeltman, Guest Blogger
Published: December 21, 2012

The storm that hit the East Coast of the U.S. on October 29 created devastation for individuals and businesses. Many companies were forced to remain closed for days or even longer because of damage to business facilities, employees being unable to get to work due to the failure of public transportation systems, closures of bridges and tunnels, power outages and long gas lines. Here is what companies should know about tax and financial opportunities to help recover from this storm and the lessons for everyone going forward.

Tax relief

The IRS has made a number of pronouncements in the wake of Hurricane Sandy to provide relief to affected businesses as well as to those who want to help hurricane victims. Here is a brief roundup of some key items:

Extensions for filing returns and paying taxes. The deadline for filing tax returns and paying income taxes otherwise due from the time of the storm through the end of January 2013 is extended until February 1, 2013. This means that the fourth installment of 2012 estimated taxes for corporations (otherwise due on December 17, 2012) and for self-employed individuals (otherwise due on January 15, 2013) can be made up to February 1, 2013.

Relief applies automatically to businesses within declared disaster areas. Businesses outside these areas that have been impacted by the storm (e.g., records are stored within a disaster area) can call the IRS and request relief at 866-562-5227.

Technically, the IRS has no authority to extend the deadline for depositing payroll taxes and excise taxes. However, it has provided relief nonetheless by waiving any late deposit penalties as long as the deposits are made by November 26, 2012.

Disaster losses. Businesses in an area eligible for FEMA assistance (an area declared to be a disaster area by the president) that have uninsured property losses can opt to deduct them on their 2012 tax return or claim them on a 2011 return. Taking the loss on a 2011 return requires filing an amended return, which can produce a tax refund more quickly than waiting to file for 2012. Before opting to do so, consider:

  • Which year will result in the larger tax savings (based on overall income and deductions for each year)? You may not know this until your 2012 return is being prepared in 2013.
  • Taking the loss on the 2011 return does not reduce self-employment tax for that year. The 2012 disaster loss only impacts income taxes in 2011 if the loss is carried back to that year.

If you’re eligible for a disaster loss deduction, work with your tax advisor to determine the better year in which to take the loss.

Property losses

Victims of the storm may recoup some of their property losses and get back to business by insurance recoveries, assistance from FEMA or other agencies and organizations, and through SBA disaster loans (explained later).

Property damage. If your business property was damaged or destroyed, your business owner’s policy (BOP) can provide relief to the extent of the coverage you carry (minus your deductible). Watch for limits on the policy, such as payments for flood or hurricane damage; talk to your agent about this.

Lost profits. If you have business interruption coverage, you may be reimbursed for expenses you have during your recovery period, such as rent, payroll, and utilities. The coverage also pays for lost profits (defined in your policy). It may also pay for replacement space, such as another office that you use until your own can be repaired.

If you don’t have such coverage, discuss this with your insurance agent to determine whether to buy it now for protection in case of future disasters.

Disaster relief grants. If your business receives any disaster relief grants, they are fully taxable. Unlike such help for individuals, disaster relief payments to businesses are always taxable.

Other relief items

Even though you are outside of the affected areas, your business may help with disaster relief efforts. If your business has a leave-donation program where employees can donate unused vacation, sick, or personal days to charity, there is a special rule for donations to storm victims. Usually, the donated leave is taxable to employees, but for donations for Hurricane Sandy relief, the unused leave is tax-free. Employees cannot take a charitable contribution deduction; employers can. Alternatively, employers can opt to treat the donated leave as compensation. The funds must be forwarded to an IRS-approved charity no later than December 31, 2013.

If your business obtains a disaster loan from the SBA  for physical damages or economic injury, the loan proceeds are not taxable. Interest payments are tax deductible.

Conclusion

Natural disasters are devastating for those impacted by them. They also serve as warnings to businesses outside affected areas to become better prepared for future events. Work with your tax and insurance advisors to review your disaster preparedness and recovery plans.

About the Author:

BarbaraWeltman
Barbara Weltman

Guest Blogger

Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BigIdeas4SB or at www.BigIdeasforSmallBusiness.com

Free Sources of Market Data and How to use that Data for Business Planning

By Caron_Beesley, Contributor
Published: December 20, 2012 Updated: September 9, 2016

The federal government offers many tools to help small business owners understand their markets, but where do go to find that data, and how do you use it once you’ve got your hands on it? 

First, conducting market research doesn’t always have to involve hiring a research firm or commissioning focus groups; much of the information you need may be at your fingertips.

This research can impact and inform all areas of your business, from where you locate your business to the color of your logo. Even a small amount of analysis can help you gauge the receptivity of your target market to your idea. Check out this blog for a quick overview of the type of data you can draw from these sources: Conducting Market Research? Here are 5 Official Sources of Free Data That Can Help.

But how will you use this data effectively? Here are some tips for finding data you need and translating it into information you can use in a business plan or simply to inform your strategy:

Sources of Market Data

So, where do you look?

  • Free Government Market Data – One of the best sources of data is the U.S. Census Bureau. The information there is vast, and among the easiest to navigate. Thanks to a variety of Data Access Tools such as the 2010 Census Interactive Population Map, you can pinpoint census data to the block level and compare one community to another. Census data can help you answer many questions that come up during the business planning process, such as:

o   How do we know the size of industries and businesses?

o   How can we determine the economic activity of communities large and small?

o   Where should I place a new business?

o   What products in my industry are growing?

o   What materials are purchased by my industry?

o   What industries purchase my products?

  • Competitive Data - Want to know how your business stacks up against the competition? Where your potential competitors located? The best places to advertise? These are all critical inputs for your business plan and can also support your financing applications. SBA’s new SizeUp tool lets you crunch millions of data points to get customizable reports and statistics about your business and its competition. Enter your industry, city, state and other details. The tool then runs various reports and provides maps and data related to your competition, suppliers and customers. It also highlights potential advertising opportunities.
  • Use Your Own Data – Don’t just rely on external data sources. As your business grows, use your own data to analyze consumer profiles, buying behaviors and so on.

How to Use the Data

Here are some ways you can use the data you uncover in your market research to build your business plan or inform your strategy:

  • Get to know your target market – If you are seeking investors, they will want to know that your market is sizable and that you have researched and understand its opportunities and its limitations. Is your market definable? Is it sufficiently large that you can reach it efficiently (for example, are population or demographic shifts likely to play to your advantage)? Where do your competitors fit in? Can you segment that market further? Above all, is there a niche you can carve for yourself?

As you prepare your business plan, think about providing: 1) A description of your target market, 2) the trends that impact that market and 3) strategic opportunities for your business in this market.

  • What is going on in your industry? – Few businesses are immune to industry trends. If consumer spending is down or unemployment is on the rise, this may affect your plans and your budget. Use economic indicator data to assess trends and market forces that can help you succeed. If your industry is in flux, could you use this fact to your advantage and position your business for future growth? Investors will want to see that you understand the factors that affect your business’ success. Be sure to include in your plan: 1) a description of your industry, 2) industry trends and 3) strategic opportunities in your industry.
  • Analyzing the competition – SBA’s SizeUp Tool can help you zoom in on exactly who your competitors are – use this information wisely.  Include a description of your competition in your business plan. What market share do they command? Who are their customers? What barriers to entry do they represent for your business? What opportunities are there? The SizeUp tool is very visual; consider using screen caps or charts to back up your data. Knowing your competition will help you better position yourself against them and reach your target market more effectively.

Bonus Tip: use SBA’s Build a Business Plan tool to help guide you through the process of creating a basic, downloadable business plan

 

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

You Have to Know Your Numbers

By Tim Berry, Guest Blogger
Published: December 19, 2012

The other day I had coffee with a former student, now in her late 20s, whose first taste of startups and entrepreneurship was in a class I used to teach at the University of Oregon. The class included—of course—a hard look at cash flow and business numbers. But she told me she had no idea how important the numbers were until she actually started her own business.

“Back then, in class, it seemed like theory to me,” she said. “Like the business numbers were something that the bankers and accountants worried about, while the rest of us were out selling.”

“You can bet that changed,” she added. (And for the record, quotes are paraphrased from memory.)

Rose (not her real name) explained how getting her own business seemed to be swallowing her life. She was always worried, always wondering, playing over in her mind the next month what would she have to pay, where would the money come from. There were always questions about if and when she should add people as employees, offer more services and so forth.

Instead of drifting slowly off to sleep, she’d play over the worries in her mind. And instead of dealing peacefully with the rest of her life, she’d fill her spare moments with work—and work worries.

And for her, at least, she was much better with all this after really learning to know her numbers. In her case (I’m proud to say), she had some residual idea of business numbers still lingering from the classroom experience. So she knew where to start looking. She dug up some old explanations of cash flow, and dug into her online bookkeeping, and began to pull apart her last year or so of sales, costs of sales, running costs, fixed costs and cash flow.

She spent some time digging into the details of her business-to-business sales that required delivering an invoice and waiting to get paid. She took the extra effort to figure out the gross margin (sales less direct costs) for each of her three lines of service sales. And she looked at the difference between the clients who paid on time, or in some cases early (prepayments), compared to clients who paid late. And she looked at some supplies she was buying at a lower rate in bulk, but the real costs of storing the bulk.

“It’s been a real positive change,” she announced, proudly. “Now I have a pretty good idea, day by day, of where I stand with cash, receivables and payables.”

Not that she no longer worries. “At least I know now when I have something to worry about -- and here’s the good news -- when I don’t. So it’s way easier now to turn the worry off when things are okay. And when they aren’t okay, I know that early now, so I know when and why to worry and what’s the problem when I have one.”

And that’s a lesson I’d like to share in this space. I learned that myself, just like Rose did. My first degree was literature, my second Journalism, and although I did get the MBA later, I’m by nature a words and concepts person. But if you’re going to run a business, and you also want a life, then you should know your core business numbers: sales, costs, expenses, burn rate, balance sheet and, by far the most important, cash flow. 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

“Made in the USA” Can Make Good Business Sense, But Watch Your Advertising Claims

By Caron_Beesley, Contributor
Published: December 19, 2012 Updated: September 20, 2016

Does your business source or manufacture all its goods in the USA? The “Made in the USA” tagline can be a powerful marketing tool, but it can also make good business sense.

According to the Washington Post, manufacturing in the USA can be a smart investment, even in the face of cheaper offshore alternatives. The article, written by Los Angeles-based small business owner Nicholas Ventura, cites “Five ways ‘Made in the USA’ can cut your company’s manufacturing costs.” Ventura is co-founder of Youth Monument Clothing, Inc.

Made in the USA” is what built my business to what it is today. When starting your new business, ask yourself how you can harness the benefits of domestic production, too. You may be pleasantly surprised…” Why? Ventura cites the following advantages of US-based manufacturing:

  • Inventory can be cut tremendously – Importing inventory often requires larger production runs to meet minimum orders that can tie up capital and cash flow in stock. But it’s a fine balance, as Ventura explains: “…missed sales due to lack of inventory is worse than having too much inventory in the first place. By being made in the USA, we can fulfill these orders and maintain a skinny inventory because turnaround times are quick.”
  • Domestic supply chains are quicker – Turnaround time from overseas factories can be substantially slower than domestic suppliers. Sourcing domestic goods can help you meet demand more quickly.
  • Forecasting becomes much easier – “The larger minimums and longer turnaround time forced us to buy production runs in large numbers and forecast trends with little confidence in our predictions,” explains Ventura. Domestic production increases agility and allows you to “react on the fly to the market” without “sitting on a ton of dead inventory.
  • You may save money – “Looking back, we would have made a better investment in developing our supply chains here in America rather than trying to cut costs from the onset,” says Ventura.
  • “Think of your national pride!” – “Made in the USA” is a hot trend for a reason. “Production equals jobs – it’s a simple equation that many Americans ignore.

Be Careful About “Made in the USA” Claims

If you are a U.S. manufacturer or are looking to promote your goods as “Made in the USA,” be sure you have a clear understanding of what this means. The Federal Trade Commission (FTC) is charged with preventing deception and unfairness in the marketplace and has the power to take law enforcement actions against false or misleading claims that a product is of U.S. origin.

If half your product is made in the U.S while the other half is manufactured in China, you cannot claim it is "American-made." To comply with “Made in the USA” standard, the FTC requires that all products advertised as American-made must be "all or virtually all" made in the U.S. Even if you don’t expressly state that your products are made in the USA (for example, in advertising or product labeling), giving the impression that your product is of U.S. origin (such as use of a flag or geographic reference) can get you into trouble if it is not accurate. Both of these types of expressed or implied statements are subject to FTC enforcement.

To learn more about potential red flags and how to ensure your “Made in the USA” product labeling, advertising or other claims are compliant with the law, check out this SBA blog: Made in the USA Labels: Information for Manufacturers, Retailers, and Consumers and be sure to refer to the FTC’s guide for business owners: “Made in USA.”

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About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

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