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September 22nd, 2008The ongoing financial crisis in the United States has led to tightening of lending standards, including those for small businesses. Many small businesses are being affected, but it doesn’t need to mean disaster for you.
One of the most important steps to weather the storm is to develop and maintain good relations with your business banker, according to Sovereign Bank marketing manager John Merrill. Much like a bank gaining confidence in a small business, confidence can be built in an experienced banker who has experienced various economic cycles.
A continuation of this theme is in the form of transparency. The more informed your banker is about your business and its plans, the better they can help. Bankers and small business people have the same objectives in mind, seeing your business succeed.
In addition to financing, a banker can help a business with something that is often overlooked, especially in good times. And that is retaining an adequate amount of net worth to weather tougher times. While credit is important, the banker can also offer advice on alternatives and tips on improving cash flow and financial condition.
However, before any plan is developed, a business and their banker must evaluate favorable and unfavorable conditions to provide sound solutions. Identifying hurdles to stability and profitability are vital to setting your small business on that course.August 15th, 2008While family owned businesses may seem insignificant, they account for over 1/3 of Fortune 500 companies and for 80% of all new job creation, 60% of employment, and 50% of gross domestic product.
Marketing a small family business and focusing efforts around those attributes is a strategic marketing choice and not so much done to save money or resources according to small business marketing and management writer Joanna L. Krotz.
She writes first and foremost that connecting family values to your company is a sign of stability and responsibility to potential clients, which has become more valuable in recent times, especially following the aftermath of major corporate scandals such as Enron.
"The family-ness factor works well in marketing," says Ira Bryck, who directs the Family Business Center at the University of Massachusetts in Amherst. "Just as long as the business is treated like a business and the family is treated like a family."
One family style marketing success story of recent history features Columbia Sportswear company owner Gert Boyle, whose parents founded the company in 1938. The ad campaign portrays "Mother Boyle", an aggressive but humorous character that emphasizes the matriarchal standard "One Tough Mother" and later "Don't forget who makes the pants in the family."
Techniques abound for promoting and marketing a family image for smaller, newer businesses. Highlighting history is a good method and has been used successfully by small businesses borne out of historical events such as natural disasters and Prohibition for example. Other methods include publishing company history in marketing materials.
However, family or no-family, nothing takes the place of a good business and marketing plan. In the end, customers will judge your business on the merits, so pricing, quality, and service are absolutely essential issues.July 28th, 2008Besides e-mail and the Internet, cell phones may be the best invention since sliced bread. Small business owners are able to stay within reach if they're out of the office, and cell phones provide a certain level of personal security.
However, many have forgotten proper manners when discussing their business on the phone. How many times have you seen someone having a personal conversation in the middle of a crowd? Or, ever been in a movie when someone's phone rang?
These and many other transgressions are detailed by small business writer Joanna L. Krotz, a native New Yorker, who admits that a problem does exist. I find this almost stunning, considering their high tolerance of urban chatter and in-your-face attitude.
So, how do you make sure you're following proper cell phone etiquette? Some of it is common courtesy, such as shutting your phone off during a meeting, movie, show, etc. It's amazing how many people will not do this, and even actually answer the call!
According to Synovate, a market research group, 72% of Americans agree that the worst cell phone habit is having loud conversations in public. This leads to another etiquette point. Be at least 10 feet away from anyone or find a private spot before taking or making a call.
It is also suggested that you use an earpiece in high-traffic areas, which amplifies your voice so you do not have to speak so loud. And if you must take a call, keep it brief and to the point. Also, demand "quiet zones" or "phone-free areas" at work and in public spaces.
Finally, let all your friends know you have adopted proper cell phone etiquette and please, encourage them to do the same!July 15th, 2008By most accounts, the U.S. economy is experiencing a tough time with the credit crisis and skyrocketing energy prices. The possibility exists, if it isn't happening already, for the nation's first recession since the September 11th tragedy.
Steps can be taken to protect yourself and your company from this, and be at the forefront once the economy recovers and more business returns.
First, and most important, is the protection of your personal assets. Some businesses will inevitably fail during a recession. If you are a sole proprietor or partnership, it may be wise to form an LLC or corporation to protect your home, car, etc. from creditors looking to satisfy their claims in the event your business does not make it.
Next, the difference between surviving a recession and going under depends a lot on cash flow, so keep a close eye on that. Be careful who you extend credit to for services and review and revise your collection policy.
Also, if your company is sound, you may want to apply for a line of credit if your business does not have one already.
Slow times are also no reason to slack off on marketing. Ask for referrals from current customers by offering discounts, or also get feedback. But be sure to reward them for their participation!
Beyond the above mentioned, trimming overhead and remaining optimistic can help you weather the storm. With soaring energy prices, upgrading equipment to more efficient models or making improvements to facilities are also important things to consider.July 7th, 2008A recent survey by Business Owner's Toolkit indicated that while small business owners remain wary of current economic conditions, they are pretty optimistic about their current outlook.
By an overwhelming majority, 83% of small business owners plan some sort of expansion to their business in the next year. Half of those are pretty optimistic while the others are more cautiously optimistic. Out of 1300 businesses surveyed, 85% stated that they have not seen a decrease in demand for their products and services.
Nearly 70% of respondents expect demand for their products in increase in the next six months while only 5% stated they expect their demand to decrease.
However, business owners surveyed indicated some concerns. These include: economic conditions (52%), energy costs (42%), materials cost (26%), taxes (23%), and access to credit (21%).
"Small business owners have heard messages of gloom and doom, but the majority aren't experiencing it," said Troy Janisch, publisher of Business Owner's Toolkit.
These concerns though reflect the growing trend in improving operational efficiency. A majority of small business owners are seeking information on how to effectively market their products, manage finances, market their business using the Internet, improve planning, and build personal wealth.
The next survey of members of the Business Owner's Toolkit, numbering over 60,000, will occur this August.June 13th, 2008With the rise of niche social networks, many business owners are considering whether a specifically branded social network fits for their businesses and industries.
Unlike general social networks such as Facebook and MySpace, branded networks are built for users to connect and communicate about topics related to their industries. Examples include Shelfari.com for book enthusiasts and ImSaturn for Saturn owners.
Considering a branded network to foster discussion about your industry and promote more traffic to your site? There are some factors that you need to address in order for the benefits to outweigh the costs in time and money.
Business writer Scarlet Pruitt suggests the following points to creating a successful niche social network.
The first and most important issue to address is to ensure there are enough active users before even considering beginning a networking site. To achieve this, you will need to offer a wide platform of topics beyond just your brand and include discussions on how your industry affects the world at large.
Once a cadre of dedicated users is secured, you can move on to obtaining the needed software. There are a few companies out there that specialize in social networking platforms, such as Ning and ONEsite, and offers wide ranging options from inexpensive basic software plug-ins to entire Web 2.0 platforms. You can cut some costs by establishing a revenue-sharing agreement with the provider or by including ads.
Finally, integrating the networking site into your main website will take a little more time and money. But once you have everything up and running, engage your community through blog posts, networking with your community, and sharing information with other sites.
April 25th, 2008At some point, every business has to consider whether they should buy or rent their office space. The decision can vary for different types of businesses. There are several points to consider when making this decision in order to maximize the bottom line.
Many of the considerations of whether to lease or purchase office space is the same for individuals looking for a home. For example, initial cash outlays are much different for each option. Renting something only requires a relative small upfront outlay while purchasing can require a large down payment and other associated closing costs.
However, leases are more subject to the whims of the market when your lease term ends. Especially with a fixed-rate loan, costs are more predictable from year to year when you own the building.
It's important to consider future growth and the need for new space. Purchasing a building that meets your needs now can be advantageous if you're able to lease the space when you move.
But, it also means you're in a second business, real estate investing. And it is entirely possible that can become a bigger hassle and financial drain than simply leasing.
Of course, taxes are a big consideration as businesses can deduct the entire amount they pay in rent while owners have some limitations. It may be better to create a separate Limited Liability Company and then rent the space to your company, according to Joseph Anthony, a Portland, Oregon tax professional.
So, should your small business buy or rent office space? Depends on your circumstances and if you are able to manage the property in addition to running and growing your business. Consult with your tax accountant and attorney to best determine the implications of owning vs. renting.
April 9th, 2008Government contracts can be fertile ground for a small business to grow but earning their business takes a little education and legwork. The first and most important step to obtaining government contracts is to do your homework.
Different government entities have varied processes and rules for bidding. For federal contracts, the Small Business Administration provides a solid overview of their policies and procedures. The National Center for Small Business Information offers courses to entrepreneurs on government work at all levels.
In order to even bid on federal government contracts, a small business must register with the Central Contractor Registry, which is an electronic system that provides automatic payment transfer when a contract is awarded. The registry requires a business to submit a brief profile summarizing capabilities, etc. so it is important this is the best it can be.
Preparation is also key to winning government contracts since the bidding period can vary. Sometimes, the open bid period is less than a month. Not streamlining your paperwork can result in you losing money if you have to "reinvent the wheel" advises Greg Brooks of West Third Group, a Plattsburg, Missouri consulting firm.
Brooks also advises that procurement and contracting officials do not necessarily accept the lowest bid and in fact, is pretty low on their list of considerations. It is more important to demonstrate experience since past performance is scrutinized much more so than price.
Networking is also a big component of not only winning government contracts but good business period. Gary Beckert of the NCBSI says that most small business get their start in government contracting by teaming with someone else. He advises, "A small business isn't going to succeed without a network of peers, economic development organizations and other contacts."
And don't expect a major windfall from government contract work. Many contracts set a 15% profit limit and some are as low as 10%, which is nothing to dismiss but not the golden egg some might expect.
Government contract work can be very beneficial for your small business if you know the basics and are prepared.
March 20th, 2008Strategic planning is an important tool for organizational success. It involves the development of schemes that are followed by the entire organization to reach a goal. Strategic planning guidance can be used in any coordinated effort involving more than one person.
Strategic planning has traditionally been heavily used in military operations and government activities. In the business world, strategic planning provides direction in finance and marketing, human resources, information technology, and the general orientation of the company.
Many guidelines exist for embarking on a strategic planning process for your organization. Expert author Jennifer Bailey identifies six important factors to consider including:
- Organizational Mission - How and why it should be achieved.
- Situation Analysis - Examine the organization's current state.
- Vision and Strategic Goals - Identify expectations and performance indicators.
- Strategic Issues - Identify the issues and barriers facing the organization.
- Plan-of-action - Formulate a plan to deal with strategic issues.
- Program Planning - Translate strategies into concrete, well thought out actions.
Strategic planning guidance should never be considered as a guidebook or secret formula for success according to Jennifer Bailey. Rather, it should involve the evolution of simple steps working toward a coordinated, time-bound planning process.
e-StrategicPlanning is an informational resource for strategic business planning, non-profit strategic planning, strategic media planning and more. Having good information is key to formulating a workable plan for your organization.
November 15th, 2007Technology makes everything move faster. Marketing trends are introduced and morph within a matter of months.
Emerging technology meets tradition and your business has to keep up. After all, you've got to have a base knowledge (at the very least) of the new tools and tricks of the trade.
When all else fails and you're pressed for time and need to learn about the latest marketing tactics quickly, download an ebook, special report of audio recording. These educational resources make it easy to keep up with such marketing trends as search engine optimization and social marketing as well as gain new insights into more traditional avenues. They are inexpensive too. Simply download and read or listen at your leisure for a knowledge boost.
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