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Sponsoring or Hosting an Event this Holiday Season? 6 Ways to Maximize Your Return

By Caron_Beesley, Contributor
Published: November 8, 2012

Autumn and the holidays are the high season for events, from holiday parties and private shopping events to turkey trots and fall festivals. It’s time to consider hosting or sponsoring an event this holiday season as a way to stand out from the crowd during this busy time. But how do you get the best return on your investment? Here are six tips:

1. Sponsor events that matter to your customers

If you sponsor an event this season, pick something that matters to your customers. Who attends the event? What are their interests? If they don’t care about what you’re selling, then you’re wasting your time. For example, my hometown hosted an end-of-summer kids’ fun run. The chief sponsor was a hugely successful local orthodontist business known for its great customer service, commitment to family values and a fun and informal, even jazzy, atmosphere. A kids’ fun run fit perfectly with its brand and aligned the business directly with its target market.

2. Choose events that create an experience that reflects positively on your business

If you are planning on sponsoring an event, whether it’s your local Little League tournament or your town’s annual community health drive, you need to have clear goals and you’ll want to partner with events that reflect positively on your brand. If people are having a good time, then it’s likely that experience will rub off on your business through association. Consider events with a good track record that will attract the kind of customers you’re targeting.

3. Pick events that are well run

This may go without saying, but it can be easily overlooked. If the event is badly run it will reflect directly on your business. Talk to other business owners who’ve participated in the event and target events that have a good track record of participation and success. Remember that quantity isn’t always better than quality – if the event doesn’t play to your brand, no matter how many people attend, your return on investment will suffer.

4. Understand sponsorship levels

Many events offer different levels of sponsorship. While it’s important to know exactly what you’re getting for your investment, be sure to select a sponsorship that plays to your strengths. For example, a gold sponsorship may come with all the frills but if you can’t scale or provide the right resources to take advantage of it, go for a lower sponsorship tier and up your own marketing efforts to raise awareness of your involvement.

5. Don’t just show up – engage

Think about ways to become an integral part of the event.  Align your tactics with the event’s goals. If all you can afford is logo placement, it might not be worth participating. Be creative, offer discounts to attendees, offer branded giveaways, get your logo on the event host’s giveaways (for example, branded water bottles) or host a contest or other experience that gets attendees interacting with your business.

Bring your employees along, too. Encourage them to get involved, both as staff and as participants. Whether it’s running in the turkey trot as a mascot for your business or bringing their kids for a photo opportunity with Santa Claus.

6. If you’re hosting a private event, invest in your VIPs

Private events are a great way to make your valued customers feel special. Whether you host a private in-store sale or an invitation-only holiday party for your loyal customers, you’ll get more from your investment with a little research and a plan of action. Here are a few tactics:

  • Offer customers the opportunity to bring a “plus one.” This will make them feel more comfortable and help you reach new buyers.
  • Do some customer research. Use your CRM tools, social media conversations, and email marketing responses to gauge what your VIPs are interested in or have purchased lately. This will arm you with conversation starters.
  • Use the event as an opportunity to refine your mailing lists and outreach efforts. Find out how your VIPs prefer to hear from you, whether it’s email or social media.
  • Send out thank you notes and follow-up with a special offer, just for your VIPs.

Have you hosted or sponsored any events lately? How did you ensure you got the best possible return on your investment? 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 Update 2: SBA Standing Ready to Help Businesses, Homeowners and Renters Recover

By James Rivera, SBA Official
Published: November 7, 2012 Updated: August 18, 2015

Many business owners, homeowners, and renters along the East Coast are coming back to find physical damage to their buildings and property as a result of Hurricane Sandy.  In addition, thousands of businesses are dealing with the economic blow caused by power outages, damaged inventory, and lost profits from being closed down.

The Small Business Administration stands ready to help.

How does SBA help businesses, homeowners and renters recover? Three main ways:

1. Businesses and nonprofit organizations of any size can apply for a low-interest disaster loan of up to $2 million to repair or replace damaged real estate or inventory.

2. Small businesses and nonprofit organizations of any size can apply for Economic Injury Disaster Loans, also up to $2 million.  With all of the power outages and evacuations, we know that many small businesses made it through the storm, but they’ve lost significant amounts of business.  In many cases, these businesses will be eligible for EIDL loans to help cover their working capital needs, regardless of whether the business suffered property damage.

3. Finally, homeowners can apply for loans of up to $200,000 to repair damaged real estate.  Homeowners and renters can also apply to borrow up to $40,000 to repair or replace personal property damaged by the storm.  In addition, we can sometimes increase a loan by up to 20 percent to make structural improvements that lessen the risk of property damage by future disasters of the same kind.

Once the disaster declaration is made for your area, there are several ways to apply:

As of last night, more than 292,607 disaster survivors from Connecticut, New York and New Jersey have applied for federal disaster assistance, and more than $277 million in Individual Assistance has been approved. 

If you are a survivor, it’s important to take that the first step is to register with FEMA, by calling 1-800-621-FEMA or going online to www.disasterassistance.gov on your computer or mobile device.

Already, we have disaster recovery personnel conducting damage assessments and many more disaster reservists ready to mobilize.  In addition, business owners can get free help completing applications and creating plans to rebuild at our local Small Business Development Centers. To find the location nearest you, visit www.sba.gov/local-assistance.

Our commitment at SBA and throughout the Administration is that we will be there until we get the job done – and we will get it done right. For more about the government-wide response to Sandy, visit www.usa.gov/sandy.

Related

Superstorm Sandy Update: SBA Coordinating with Our Federal Partners

About the Author:

James Rivera
James Rivera

SBA Official

James Rivera was named Associate Administrator for SBA’s Office of Disaster Assistance in November 2009 after serving for several months as Acting Associate Administrator. In a typical year, his office approves about 20,000 loans totaling about $1 billion. This is the SBA’s sole direct lending program.

How Sweeping Changes to the U.S. Patent System Will Impact Your Small Business

By Caron_Beesley, Contributor
Published: November 7, 2012 Updated: September 21, 2016

If you hold patents, have patents pending or are thinking of filing a patent, then it’s time for you to get to know the details of the most significant reform of the U.S. patent system in more than a century.

On September 16, 2012, the Leahy-Smith America Invents Act (AIA) of 2011 was signed into law, signaling an historic overhaul of the patent system. According to the U.S. Patent and Trademark Office (USPTO), the provisions of the AIA will “spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality.”

So what does this mean for small business owners to whom patents are valuable assets? Here’s what you need to know:

You and Your Competitors Can Now Give Input on Pending Patent Applications

For the first time in the history of U.S. patent law, third parties can now come forward and challenge patent applications. For example, if you know of someone who is trying to file a patent on a product that would interfere with your business, you now have an opportunity to provide information to the patent examiner to help them determine whether the innovation in the application is patentable. 

By introducing third party input into the examination process for the first time since the inception of our nation’s intellectual property system, we’re able to expand the scope of access to prior art in key areas like software patents,” said Undersecretary of Commerce for Intellectual Property and Director of the USPTO David Kappos in this press release.

To support this change, in October 2012 the USPTO launched a crowdsourcing tool – AskPatents – to solicit input on patent applications. If you are concerned about a particular patent, you can post questions and challenge patent applications online. USPTO patent examiners will take these comments into consideration when reviewing applications. Inventors can also check the site to see if their idea is patentable.

Resolving Patent Disputes Just Got a Whole Lot Easier

In the past, if you were to contest a patent or a competitor filed a patent dispute against your business, you could expect the process to involve costly legal fees and drawn-out litigation in district courts. Under the provisions of the AIA, however, the USPTO offers a “timely, cost-effective alternative to district court litigation for challenging the patentability of a claimed invention in an issued patent.” Under this provision, the USPTO handles post-grant reviews (for a fee), resolving disputes more quickly and saving small business owners the hassles of dragging a patent dispute through the courts. 

In a nutshell, these provisions “…establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs,” said USPTO’s David Kappos.

More to Come

Look for additional provisions to come from the AIA in March 2013, when the U.S. patent system moves from a first-to-invent to a first-inventor-to-file system. This will bring the U.S. in line with other nations and make it more important than ever for small businesses to consider filing a provisional patent application and engage a patent lawyer as soon as possible.

Read more about the new and upcoming changes on the USPTO website: Historic Patent Reform Implemented by U.S. Patent and Trademark Office.

Related 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

Set Goals Before You Start Your Franchise Business Search

By FranchiseKing, Guest Blogger
Published: November 6, 2012 Updated: August 18, 2015

If you’re searching for the right franchise to buy, it’s important to set some goals. One reason that you’re going to want to have some specific goals set up is this: There are over 3,000 franchise opportunities to choose from! With that many choices, it’s way too easy to get lost and flounder around aimlessly, trying to find that perfect opportunity.

My aim is to make the franchise discovery process as seamless as possible. (Actually, it’s my goal.)

Goal #1- Budget

You need to decide how much you’re willing to write a check for. In other words, how much of your own money (before any business loans) are you willing to risk? For example, if you’re looking at a franchise that has a total cost of $200,000, how much of that $200,000 is going to come from the money you have on hand?

If you need help figuring out your finances, the SBA has 10 questions just for you. The goal here is to come up with a budget that you can live with.

Goal #2 - Time

Choosing, researching and buying a franchise can take a while. You need to come up with a time frame; otherwise your search for an opportunity to become your own boss may be never-ending. And before you say “Hold on, Joel; I’ll spend as much time as I need to find a franchise to buy. This is a major decision, and I want to be choosy,” hear me out.

I understand that you want to be careful. That’s what most of the articles I write here are designed to help you do. But if you go into your franchise search with no goals, in this case, no time-frame goal, you may end up in a never-ending circle of “looking.” And, looking…

In other words, having no time frame could mean making no decision. Six months from now, do you still want to be “looking?” Or, do you want to be “doing?”

Goal #3 - Use professionals

Make it your goal to use business professionals before you start searching for a franchise business opportunity. And yes, you’re going to have to invest some of your money to do this. Notice that I used the word “invest” instead of “spend.” That’s because using competent professionals is an investment in your future.

For example, most franchise agreements (contracts) are 10 years in length. That means that if you buy a franchise, you’re going to own it for 10 years. That’s a long time. And unless you’re an attorney, you’re going to discover that the legal documents that franchisors are required to send you (that you’ll be required to sign) are pretty complex.

There’s no reason to try to figure out the intricacies of these documents all by yourself. Hire a franchise attorney. They’re used to reading, and even writing, franchise documents. An accountant that’s familiar with small business-and small business taxation-should also be on your list of professionals to contact and hire.

Finally, there are several small business resources that are available at no-cost to you. Check out The Small Business Administration’s local resource page

If your goal is to someday become the owner of a franchise, have some goals set up before you start your search.

 

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.

6 Tips to Rein in Spending and Be a Lean Start-Up

By Caron_Beesley, Contributor
Published: November 5, 2012 Updated: September 29, 2016

The average cost of starting a business is $30,000, according to a 2009 study by the Kauffman Foundation. But whether your cash comes from savings or financing, watching how you spend your money is critical to the success of your venture. This means establishing boundaries and habits that ensure you spend your money wisely and operate as a lean start-up.

Here are six ways to rein in spending as you start and grow your business:

Work from Home, Co-Working Spaces or Serviced Office Space

This one may sound obvious, but not all new businesses need to jump into a commercial office lease right away. Setting up a home office is a low-cost alternative (and can save you tax dollars).  If you find you need a more social setting, consider a co-working space. These facilities are available in many cities and offer great opportunities for you to mingle with like-minded entrepreneurs. These workspaces are often also a lot cooler than any space a new start-up could ever afford. Talk to your local Small Business Development Center about co-working spaces in your area or hit up Google.

If you really do need your own office space, consider renting a serviced office or executive suite. Usually located in busy business districts, these premises are fully equipped and managed by a facility management firm. The rental agreements are often more flexible than commercial leases and give you the option of easily scaling up if you need to. Typically, a serviced office broker can help you locate the right space.

Buy Surplus and Barter

Save money by buying used equipment and office supplies. Check Craig’s List or eBay or buy government surplus equipment (a little-known but very cost-effective way to equip your business).

Bartering – exchanging goods and services directly with another party – is also an underutilized business practice among start-ups. Think about ways you could barter to reduce costs. For example, if you run a painting business and you need to purchase a business vehicle, could you barter a discounted price from the dealer in exchange for a new coat of paint in his showroom?  Read more about bartering from SBA guest blogger Barbara Weltman.

Don’t Hire Employees Until You Can Keep Them Busy

Offer interns work experience or hire independent contractors or even friends and family on an hourly or project basis to keep your costs low. If you need them to work alongside you in an office space, introduce a hot-desking policy so that your workers can share a space on a rotating basis without you needing to lease more space. For more tips, read “Chief Everything Officer” No More! – 6 Options for Staffing your Growing Business.

Be a Budget-Conscious Marketer

Invest in marketing and promotion thoughtfully and have a game plan. Think about low-cost tactics (you’ll find some here) and don’t overdo it on the glossy marketing materials – are they really necessary? If you and your staff have a clear elevator pitch and can engage and follow up enthusiastically with targeted prospects, there’s a good chance you’ll get a similar return on investment as the big guys with their glossy slicks and advertising budgets.

To help you stay on track, create a plan for the year or quarter and calendar it out. This way you’re more likely to follow through, stay on-budget and be less burdened by the need to come up with last minute marketing tactics. Don’t forget to monitor ROI to help you make informed decisions about what works and what doesn’t. This can be as simple as asking and tracking how customers heard about you.

Check these blogs for more tips:

Safeguard Your Personal Assets

If you think you are likely to incur debt during your start-up phase, consider forming a limited liability company (LLC) to protect your personal assets – your finances, car and house. Forming an LLC will ensure you are not personally liable for debts or judgments brought against your business as a result of a lawsuit.

Don’t Be Afraid to Negotiate

Whether it’s a contract with a supplier or a new customer, you should master the art of negotiation. Many new business owners skip this important best practice in their early years, but practicing negotiation early will help you establish relationships that save you money now and over the long haul. Just be sure not to nickel-and-dime the fair offers that come your way, and work to build relationships with these vendors through repeat business and referrals. Get more tips in 6 Tips for More Seamless and Fruitful Business Negotiations.

 

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

On Measuring Social Media ROI For Real Business

By Tim Berry, Guest Blogger
Published: November 2, 2012

Warning: this post is all about the questions. It doesn’t include the answers. Asking the right questions is a good first step to getting the answers.

Theoretically we should be able to measure the ROI (return on investment) of anything we do in our business. We talk about ROI, and return, and payback when we look at an ad campaign, direct mail, product development, purchasing some big-ticket item. We make assumptions about ROI all the time. But it’s not always easy, and our assumptions are not always correct.

What about social media ROI? I’ve been searching the web. Some smart people are working in this area, of course. But it’s a hard nut to crack. Everybody seems to like the idea, but is there a formula to apply? I’m not sure.

I think of social media as 1.) amplified word of mouth; 2.) earning a voice instead of buying a voice (a reference to the fact that with social media you can engage large numbers of people based on the value of your content, rather than on how much you paid for the advertising); and 3.) a new addition to business marketing that should follow basic fundamentals.

Wikipedia defines ROI as:

(gain from investment - cost of investment) / cost of investment

We talk about ROI in percentages. For example, if we bought the share of stock for $10 and sold it for $20, then ROI is (20-10)/10 = 100%. Or if we spent $25,000 on a direct mail campaign that generated $35,000 in sales, the return is (35,000-25,000)/25,000 = 40%.

Technically, ROI calculations ignore time. Doubling our money in a day is 100% ROI, but so is doubling it over 10 years, also 100% ROI. But the return on the 10-year doubling is only about 7% per year. So that’s why the more technical measurements, like net present value and internal rate of return, take the amount of time into account. In this post, however, I’m talking just about ROI, not those more sophisticated analyses.

Problem 1: Measuring the gain

What’s the measurable business impact of social media? In dollars? Ultimately it’s obviously an increase in sales or a decrease in costs. But how do you measure an increase in sales if social media generates new customers walking through a physical door? How do you measure a decrease in costs if you can’t track which parts of the costs were cut by using social media? Maybe the advertising you didn’t do?

Take the example of the taco truck using Twitter to broadcast locations hour by hour: Obviously this increases sales, but can you pin that down to specific numbers?

There are some business types that lend themselves to measurement: Web traffic leading to web visits and conversions, for example.

Some businesses build measurement into the social media content, by using promotion codes or specific ties to Facebook likes or ads.

Problem 2: Measuring the costs

The social media platforms are mostly free. Facebook, Twitter, LinkedIn (depending on options), Google+, and Pinterest. But the time you spend isn’t free.

As a general rule of thumb, an employee costs a company per hour but 1/1000 of the annual gross salary. That’s because the overhead costs double the annual cost, roughly; and then you divide by 12 months, 52 weeks, and 40 hours per week. Overhead costs include payroll taxes, work  space, computers, electric power, bandwidth, etc. So the $50,000-per-year employee costs the company roughly $50 per hour.

So, if nothing else, the cost of social media is the cost of the time invested.

Conclusion

  1. We can’t measure everything that’s valuable in business.
  2. We can’t rule out social media because it’s hard to measure
  3. But we can, if we focus on getting the right information, and using realistic estimates, get a very useful estimate of social media business ROI. 

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 .

6 Steps to Assess Your Small Business’ Readiness to Export

By Caron_Beesley, Contributor
Published: November 1, 2012 Updated: March 2, 2014

export plannerBetween 2009 and 2011, U.S. exports grew by 40 percent and the federal government is pressing to provide programs and resources that help U.S. companies succeed internationally.

Making the decision to export, however, is significant. Is your product marketable overseas? Can your business tolerate the benefits versus the trade-offs of exporting?

To help you assess your exporting readiness, take a look at SBA’s Export Business Planner. This invaluable, hands-on exporting guide provides a roadmap for creating an export business plan, discovering foreign markets, developing a marketing plan, exploring financing, costing your product and more.

Here’s what the Export Business Planner has to say about assessing your business’ readiness to export – backed by a series of useful worksheets to help you work through this important exercise.

1. Determine the Benefits and Trade-Offs of International Market Expansion

Start by brainstorming a list of benefits and trade-offs for expanding your market internationally. For instance, one benefit might be a reduced dependence on domestic markets. Trade-offs? You may need additional financing, or be willing to use short-term profits to ensure long-term goals, or hire additional staff.

Your list of benefits and trade-offs should be based on your current assumptions about 1) your company, 2) your company’s products and 3) market knowledge.  

2. Perform a Business/Company Analysis

Next, you’ll need to perform an in-depth analysis of your existing business to determine the feasibility of growth. This entails evaluating your company and its attributes. Check out page 32 of the planner for a worksheet that can help you with this exercise.

3. Conduct an Industry Analysis

Once you have examined the status of your own company, the next area for consideration is your overall industry. How is it currently involved in the global marketplace? This review will help you to capture key aspects of your industry that will affect your exporting decisions. Again, check out the worksheet for this exercise on page 34 of the planner.

4. Identify Products With Export Potential

Part of the overall analysis of your current business involves identifying products that may have export potential. These have sold successfully domestically or maybe have had marginal success in the U.S. but potential for high demand overseas. Many small businesses make 100 percent of their sales in foreign markets.

Start by listing the strengths and weaknesses of products/services you believe might have export potential. Then, select the most exportable products/services to be offered and evaluate them. The worksheet on page 36 can really help you narrow down your product focus.

5. Marketability: Match Your Product/Service with a Global Trend or Need

Once you’ve identified products/services with export potential, the next step is to identify the most profitable foreign markets for those products. This means gathering foreign market research. Work through the worksheet that starts on page 39 to narrow your choices to the three most-penetrable markets. Ask yourself:

  • Which countries are best-suited for your product?
  • Which foreign markets will be easiest to penetrate?
  • How does the quality of your product compare with competing in-market goods?
  • Is your price competitive?
  • Who could your major customers be?

To help you with this exercise and to continue to explore these top three markets in-depth, pages 25-27 of the planner provide links to essential resources that can help you determine your product’s marketability overseas. There is also information about regulatory and political considerations that can affect your exporting decisions.

6. Define Which Markets to Pursue

Once your research has revealed the largest, fastest-growing and simplest markets to penetrate for your product or service, the next step is to define which markets to pursue. Here are some tips to bear in mind (and refer to the worksheet on page 42 of the planner for guidance):

  • It’s best to test one market and then move on to secondary markets as your expertise develops. SBA data shows that new-to-export businesses often tend to choose too many markets at first. For most small businesses, choosing one to three foreign markets initially is recommended.
  • Focusing on regional, geographic clusters of countries is more cost effective than choosing markets scattered around the globe, especially when you undertake trips or marketing events.

What’s next? Once you’ve determined your export readiness and investigated foreign market options, refer to the SBA’s Export Planning Guide for more tips and worksheets to help you plan, finance and execute your small business exporting strategy.

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

Superstorm Sandy Update: SBA Coordinating with Our Federal Partners

By James Rivera, SBA Official
Published: October 30, 2012 Updated: March 7, 2013

Many communities are still feeling the effects of Superstorm Sandy, including power outages and flooding. The importance of listening to instructions and safety information from your local officials and FEMA cannot be understated.

Federal response teams are already providing assistance to affected communities. SBA is closely coordinating with our federal partners to share information in the immediate aftermath of the storm.

  • For the latest on the Federal government’s response to Sandy, you can read FEMA’s blog or follow updates on Twitter.
  • If you need emergency shelter, you can download the Red Cross Hurricane app, visit the Red Cross web site, or check your local media outlets. You should also register on the Red Cross Safe and Well website, a secure and easy-to-use online tool that helps families connect during emergencies. Finally, you can download the FEMA smartphone app or text SHELTER and your Zip Code to 43362 (4FEMA). Standard rates apply
  • If you’re not in an affected area, please consider donating blood, because numerous blood drives have been canceled as a result of the storm. To schedule a blood donation or for more information about giving blood or platelets, visit redcrossblood.org or call 1-800-RED CROSS (1-800-733-2767).

SBA plays an important role in disaster recovery efforts for businesses and homeowners. As disaster assessments and declarations are made, various SBA disaster recovery loan programs become available to eligible applicants. We will continue to highlight these programs as communities turn to longer-term recovery efforts.

For more information about SBA’s disaster assistance programs, visit www.sba.gov/disaster or call our disaster assistance center at 1-800-659-2955.

About the Author:

James Rivera
James Rivera

SBA Official

James Rivera was named Associate Administrator for SBA’s Office of Disaster Assistance in November 2009 after serving for several months as Acting Associate Administrator. In a typical year, his office approves about 20,000 loans totaling about $1 billion. This is the SBA’s sole direct lending program.

How to Avoid Losing Money on Your Next Coupon Campaign

By Caron_Beesley, Contributor
Published: October 29, 2012 Updated: September 28, 2016

Think you can build your business with coupons? Think twice.

Coupons have their place for many businesses, but they also carry the irksome problem of attracting the wrong kind of buyer. We all know them – the over-eager coupon clipper who stalks only those businesses that offer a special deal. This customer is often a one-time buyer and not the kind of consumer who is going to help you build your business. Even worse, you may incur couponing losses.

So when is couponing right for your business? How can you protect yourself against extreme couponing? Here are a few simple guidelines that can help protect your business.

Are Coupons a Good Fit for Your Business?

in themselves coupons are not money-makers for your business. However, they can be useful to help you build awareness of your in new markets and to new customers. Build awareness and you can hope to up-sell and generate repeat customers. Here are some other considerations:

  • Is your business a good fit? – Coupons work best for location-based, product-oriented businesses where local customers can realize quick and easy savings. Good matches are restaurants, hair salons, hotels, spas, pet grooming services, yoga studios and so on.
  • Can you scale quickly? – Can your business scale up to meet the potential demand surge the coupons may trigger? Whether you operate online or street-side within four bricks and mortar walls, it’s important that your staff is trained and your operations can scale quickly and seamlessly to deal with a jump in new foot traffic.
  • Can you afford the discount? – Make sure you can afford the discount for the duration of its validity. Weigh your long-term goals and how coupons can benefit them. Do you have enough profitable business coming from other product lines or time periods to overcome the costs of offering a discount or special offer? This is a top consideration, especially if you are exploring social or group-buying coupon sites that typically take 50 percent of the revenue you get from your advertised offer.

Develop a Firm Couponing Policy so You Don’t Incur Losses

Once you’ve weighed the pros and cons of couponing and determined that special offers have a place in your marketing strategy, be sure to develop and communicate a coupon policy. This will help keep you from being a slave to coupon clippers, losing money and undercutting your brand value.

Entrepreneur magazine offers these excellent tips from Bob Phibbs, author of The Retail Doctor’s Guide to Growing your Business, for doing just this:

Don’t Allow Combined Promotions – This is a biggie and one that many larger brands have clamped down on. The biggest to avoid is accepting buy-one-get-one-free promotions (also known as BOGO) combined with other coupons. Accepting multiple combined coupons simultaneously is a huge risk for small business owners who may find they are literally giving merchandise away.

Eliminate Identical Coupons – Suppose a customer walks into your restaurant with four $5 off coupons – how do you deal with this? Or perhaps that customer chooses to use the coupons over several visits? Either way, you’re going to lose money on that customer. There are a number of ways for dealing with this:

  • Limit the number of identical coupons that a consumer can use per purchase.
  • Limit the number of identical coupons per customer.
  • Limit the number of identical coupons that a consumer can use over a certain time period (although this can be harder to track).

If you can, use your point-of-sale system to track coupon code usage, and don’t forget to advertise your policy and the expiration date on the coupon

Accept Your Competitor’s Coupons Cautiously – Many large stores such as Walmart, Home Depot, Petco and Staples gladly accept competitor’s coupons. If you accept other retailers’ coupons, make sure you develop a policy outlining limits for their use at your store. For example, are you going to match the coupon or tighten up the conditions? Always check expiration dates and other limitations that your competitors may have placed on the coupons to ensure you don’t get burned by out-of-date or invalid offers.

Post Your Policies and Educate Your Staff – Make sure you advertise your couponing policy on the coupons themselves and at the point of sale. This can help deter extreme couponing practices before they happen. Educate and train your staff on these policies and how they should deal with potentially over-zealous coupon clippers.

For more tips on using coupons in your small business and how to build a coupon-based campaign, check out my earlier blog on coupon practices as well as How to Build Exposure for Your Small Business with Social Coupons.

  

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

Meet Patti Guttmann, Economic Development Specialist and HUBZone Liaison in St. Louis, MO District Office

By janied
Published: October 26, 2012 Updated: November 5, 2012

When a friend or family member asks what you do to help small businesses, what do you say?  I say I work for the Small Business Administration and we are the best resource for someone starting or growing a business.  Our SBA office partners with the SCORE Association and we have a counselor in our office every day between the hours of 9 and 3 who will sit down and listen to your idea and thoughts.   I can mail you a free startup kit that contains valuable information for starting or developing a business.  Here is my card, call me!Patti Guttmann

 

What’s your favorite thing about what the SBA does for small businesses?  There are so many things, but first and foremost, is that we are THERE for the small business person.  Whether it is a question about loan, lender or certification, we are there to help.  I am proud that with seven people in our medium office that we answer the phone every day with a live person.  If we cannot answer the question, we make sure we put them in touch with the proper resource, i.e. SCORE, SB&TDC, Veterans Business Resource Center or the Grace Hill Women’s Business Center.

 

Is there a particular small business “success story” that comes to mind when you think about how the SBA helps people?   We recently held a National Encore Entrepreneur Event and it was very well attended.  I had calls after that event with people upset they could not attend for one reason or another.  I counseled with them, offered to send them our startup kit and put them in touch with a SCORE counselor.  They have been most appreciative and had we not done the National Encore Entrepreneur Day, they might not have found us at SBA.   

 

Do you have any advice for entrepreneurs and small business owners out there? Yes, stay away from the “free grants” and “pay for certifications and contracts”.  SBA is a truly free resource.  We succeed when our business owners succeed and we want businesses to know that SBA is the best resource for them. 

Anything else to add? In my 36 years at SBA I have worked with as many as 50 in our office and yet today we are doing more with seven great coworkers so I like to think of us as the little office that could.  I am proud to work at SBA and I am passionate about helping and seeing small businesses succeed.

Quick story, five years ago when my daughter got married, I told her we were only buying from a small business.  We went to a bridal fair, and I drove her crazy because I asked every vendor if they were a small business or large and walked away from the large.  Well, she got married and I was so proud that everyone we hired or bought from represented a small business and not a chain.  I have six kids and six kids who prefer small business!!!  I love it!!!

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