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// by OnDeck / Nov. 12, 2015 0 comments
Business Loan

It is very important that a business owner understand key commercial lending terms when he or she decides which loan or even which lender is the right fit.

With that in mind, here are 21 terms we’ve tried to make easy-to-understand and that every borrower should be familiar with before they sit down with a lender. (These definitions shouldn’t be considered the legal definitions for these financial terms, but might be helpful when going through your loan documents. Make sure and ask your loan officer to explain any term you aren’t familiar with.)

1. Assets: Within the context of a small business loan an asset is something of value, owned by the borrower, which can be used as collateral by a lender.

2. Balloon Payment: The unpaid balance due at the end of a term loan for loan types that don’t fully amortize over the term of the loan. The balloon payment is due at the end of the loan to pay the balance in full.

3. Cash Flow: The total amount of money being transferred into and out of a business that is used to pay for day-to-day expenses.

4. Collateral: An asset, or assets, a borrower offers to a lender to secure a loan. The lender can acquire these assets if the borrower defaults on the loan.

5. Current Liabilities: Debt obligations owed by a business to creditors within a 12-month timeframe.

6. Default: Failure to make agreed upon periodic payments on a loan.

7. Fixed Asset: A “tangible asset,” like property or equipment that can be used as collateral.

8. Gross Profit: What is left over when the total cost of goods is subtracted from the total revenue.

9. Holdback: Within the context of a Merchant Cash Advance, the holdback is the percentage of the daily credit and debit card receipts that are withheld every day by the provider to pay back the advance.

10. Interest-Only Payments: Making only interest payments on a loan without paying anything on the principle. At the end of the term, the borrower will either need to refinance or pay back the principle in a lump sum.

11. Liabilities: A business’ debts or obligations, which can be resolved in the form of payments or the transfer of goods or services.

12. Line of Credit: A revolving loan that provides a fixed amount of capital that can be used, repaid, and then used again as needed.

13. Loan to Value Ratio: The ratio of a loan to the value of the purchased asset. It’s on of the metrics used to evaluate risk on a potential loan.

14. Merchant Cash Advance (MCA): An advance based upon a company’s daily credit card receipts into their credit card merchant account.

15. Net Income: A business’ total income after deducting the costs of good, taxes, and other expenses.

16. Overdraft: A deficit caused by the withdrawal of more money from an account than the account currently holds.

17. Principal: The amount of money being borrowed excluding interest payments and fees.

18. Profit and Loss Statement (P&L): A report maintained by a business that shows income minus expenses.

19. Secured Loan: A loan where the borrower puts forth collateral in the event they should default.

20. Term Loan: A loan that is repaid in regular periodic payments over a specified period of time.

21. Unsecured Loan: A loan where the borrower is not required to put for collateral to secure the loan.

This isn’t a comprehensive list of the terms a lender may use in the course of a loan discussion, but it’s a good starting place. Nevertheless, you should always read your specific loan terms and definitions carefully, and consult a trusted advisor if you have any questions.  If your lender uses a term you are unfamiliar with, always ask him or her to explain the meaning. If your lender can’t or won’t, it might be time to look for a new lender.

OnDeck
by Ty Kiisel
SCORE Corporate Patron
Ty Kiisel contributes to the SCORE blog from OnDeck. OnDeck offers business loans and business lines of credit to small businesses across the United States. OnDeck analyzes businesses differently than traditional lenders, which means that they can make more loans than traditional lenders, and they can fund businesses within hours or days – not weeks or months.
// by Micah Fraim / Nov. 11, 2015 0 comments
Accounting

Q: If an accountant’s wife can’t get to sleep, what does she say?  

A: “Tell me about work today, dear.”

Welcome to Round 2 of Accounting 101. In another article, I talked about inventory timing and the effect that can have on your tax bill each year. (Absolutely fascinating stuff, I know.) A similar phenomenon can occur based on the whether a business uses “cash basis accounting” or “accrual basis accounting”. As with inventory accounting, theoretically and over time these differences even out, but timing differences can cause unexpected issues.

Cash Basis Accounting

First, what is cash basis accounting and what is accrual basis accounting? What’s the difference between the two? Cash basis accounting is simple: when you receive money you recognize it as revenue and when you spend it you recognize it as an expense. Money in equals sales. Money out equals an expenditure (assuming it actually was a business expense, of course).

Accrual Basis Accounting

Accrual basis accounting is a little different. Under accrual accounting, income is recognized when it is earned and expenses are recognized when they are incurred. The actual date of the receipt or disbursement of cash is not taken into consideration.

Throughout the year this doesn’t make a ton of difference. You receive a bill in January and pay it in February or a customer pays you in April for an invoice you sent out in March. Who cares? But variances towards the beginning or the end of the year can affect your tax return.

For instance, let’s say you are an accrual basis company and send out a number of invoices totaling $20,000 on December 31. There is no chance that you will receive that money before the year is done, but by virtue of invoicing (and thus demonstrating that you have earned the income), the entirety of that $20,000 is taxable in the current year. If you were having a bad income year to begin with, you probably don’t mind. But if you were already having a bumper year then the last thing you want is more income! It means the tax is due today vs. a year from now and you’re quite possibly paying it at a higher rate. More tax and sooner. Not good.

Cash basis is a little more straightforward but it can trip you up as well. If a business were a cash basis company and invoiced out late in 2014, all of the income is taxable when received in 2015. You might predict this for a December 31 invoice, but what about an invoice from September that a customer doesn’t get around to paying you until February? Since the payment was so late, you might have forgotten it was income for the current year.

None of this is overly difficult to cope with, but it does take appropriate planning. If you just use your bank balance as a barometer for your taxes, you could be in for a world of hurt come April 15th. That’s where proper planning (and sometimes expert advice) come into the picture. Without it you could very well be paying costly and unnecessary taxes.

Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.

Micah Fraim
Owner
Micah Fraim, CPA
Micah is a CPA specializing in small business and tax advisory services. By handling each client himself, he is able to give personal attention and consultation while keeping overhead at a minimum. Micah's experience allows him to coach owners for success in every facet of their businesses.
// by Rieva Lesonsky / Nov. 10, 2015 0 comments
Buyers

If you own a B2B company, you know that the process of turning a lead into a sale can be long and challenging. What’s the best way to guide a prospect through the purchasing journey? A study of B2B decision-makers conducted earlier this year and reported in eMarketer offers some useful insights.

First, the days of educating a clueless buyer about your product in person are largely over. B2B buyers are well educated on their options, because they do most of their research ahead of time before ever contacting a vendor. According to the study, Selling to the Information Driven Business, 63 percent of B2B buyers surveyed don't contact a salesperson until they've actually made a purchasing decision. In other words, at the point you talk to a buyer, they've already formed their own opinions of your product or service.

That means your goal is to be there when they’re doing the research and help shape their opinions with the content you share. Providing the right content starts with your business website. Some 81 percent of buyers in the survey say they trust the information on vendor websites, so it's important to provide as much data as possible about your products and services there. That can include spec sheets, case studies from satisfied customers, comparison charts (among your products and services, and among your offerings and your competitors'), product and service descriptions, informational or testimonial videos, and downloadable e-books and white papers.

However, don't stop with the information available on your website. Some 79 percent of B2B buyers rely on public product review sites when making their decisions. Encourage your customers to review your businesses’ products or services on relevant industry review sites. (You should also link to these reviews from your own website so they're easier for prospective customers to find.)

And don't forget the time-honored tactic of obtaining publicity, such as mentions in industry journals, on trade association websites or by respected bloggers in your industry. Independent content is the second-most trusted source of information when researching B2B purchase decisions, cited by 86 percent of the survey respondents. If you can obtain a product mention, product review or get quoted as an industry expert in a trusted media source, you greatly increase your chances of making the sale.

But what tips the scale after all of these marketing tactics have been tried is the opinion of B2B buyers’ peers and colleagues. Not only do a whopping 95 percent cite this as their most trusted information source, but when it comes to making the actual purchase decision, recommendations from professional networks and colleagues are the number-one influencer—far ahead of industry experts or even internal influencers.

How can your business influence the influencers? Of course, the marketing methods I mentioned above all help to create a positive impression of your business. However, if you really want to make your mark, you need to be active in social media. I'm not talking about just promoting your business, either. The ability to "listen" to what prospective customers are saying, to learn their needs, challenges and questions, is one of the biggest benefits of social media.

With so much chatter out there in social media, however, you'll need some extra help. Social media management and monitoring tools such as Sprout Social, Hootsuite and Mention can help you sort, categorize and track who is saying what. But even more important than what people are saying about your business are the questions they're asking about their businesses. If someone in a LinkedIn Group asks about a problem your product or service could help with, make a suggestion (without making a hard sell). Is there an ongoing discussion on Twitter about a widespread business challenge that your product or service could help companies solve? Get in the mix and share some ideas for a solution (one that you can aid in).

Today, buyers are doing their own research ahead of time, and reaching out to salespeople only when they're ready to buy. That means it's more important than ever to keep your eyes and ears open and know when someone needs the kind of help that only your company can provide.

Do you need more guidance in getting a grip on social media listening? Your SCORE mentor can help. Visit www.score.org to learn more.

Rieva Lesonsky
Columnist and CEO
GrowBiz Media

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship. 
GrowBizMedia.com | @rieva | More from Rieva

// by SBA / Nov. 9, 2015 0 comments
Veteran

The federal government and non-government organizations provide all sorts of information to help Veterans start and grow businesses. According to the Department of Veterans Affairs, veterans are 45% more likely than their civilian counterparts to become successful entrepreneurs.

Getting Started

If you want to start a business, but don’t know where to begin, the SBA’s Business Plan Resources is a great place to start. It walks you through how to set up an organizational and management structure, develop marketing and sales plans, and provides information on  how to request funding and create financial projections. SBA also offers information specifically tailored to veterans such as growing a business, mentoring and training and selling to the government.

Veteran-Owned Businesses

Veteran Business Outreach Centers

SBA Veteran’s Business Outreach Centers: VBOCs provide veterans with entrepreneurial development services such as business training, counseling and mentoring. The Veterans Business Outreach Program (VBOP) is designed to provide entrepreneurial development services such as business training, counseling and mentoring, and referrals for eligible veterans owning or considering starting a small business. The SBA has 15 organizations participating in this cooperative agreement and serving as Veterans Business Outreach Centers (VBOC).

Boots to Business

Boots to Business, an entrepreneurial education and training program offered by the SBA as part of the Department of Defense’s Transition Assistance Program (TAP), is offered at 165 military installations around the world. The program offers curriculum to help entrepreneurs understand the steps to use when evaluating business concepts, how to access start-up capital and additional technical assistance.

Veteran Fast Launch

The Wal-Mart Foundation sponsors the Veteran Fast Launch Initiative. It provides: SCORE’s mentoring program, where Veteran Fast Launch participants are assigned, a highly experienced mentor to guide them every step of the way. Services such as computer software and business services are free or significantly discounted. Organizations such as the American Institute of Certified Public Accountants also support this initiative.

Veteran Entrepreneur Portal

The U.S. Department of Veterans Affairs has a Veteran Entrepreneur Portal that provides information on starting a business. The portal includes an online tool that guides you through a series of questions and ultimately provides information that’s tailored to your needs. The tool will provide you with specific information on how to conduct market research, what business licenses and permits you may need to secure, guidance on how to build a business plan, articles, and finally a link to find business counselors that work nearby.

Government Assistance

Each federal agency sets participation goals for small businesses in procurement contracts. Regulations require Federal purchases over $3,000, but less than $150,000 to automatically reserve, or set-aside, a portion of the contract dollars for small businesses. There are exceptions--full details are available on the SBA website. These contract set-asides allow government agencies to easily procure products and services from certified veteran-owned businesses. To become certified, a veteran-owned business must submit an online application to the VA Center for Evaluation and Certification (CVE). Once certified, the veteran-owned business is qualified to compete for work and limit competition to only veteran-owned businesses.

GSA’s outreach efforts are demonstrated through a "21-Gun Salute" strategy, an action plan to help the agency meet and exceed procurement goals for SDVOSBs. Other Federal opportunities for veteran-owned businesses can be found on one of the government’s largest databases for procurement opportunities, Fedbizops.

Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)

Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) provides tools, courses and ongoing mentorship to women who are already in business, and a start-up track for potential entrepreneurs.

VetNet

Syracuse University offers the VetNet Entrepreneur Track, +Institute for Veterans and Military Families (IVMF), the first national center in higher education focused on the social, economic, education, and policy issues impacting veterans and their families post-service.

SBA
U.S. Small Business Administration

The SBA is an independent federal agency that works to assist and protect the interests of American small businesses. The agency delivers the answers, support and resources small businesses need to start-up, grow and succeed through district offices throughout the U.S. and a network of resource partners including SCORE.
www.sba.gov | Facebook | @SBAgov | More from the SBA

// by Bridget Weston Pollack / Nov. 6, 2015 0 comments
Small Business Saturday

Are you ready for Small Business Saturday? What started as an effort to encourage local shopping at the height of the recession in 2010 has become a mainstay of the holiday shopping season. Shoppers celebrate the Saturday after Thanksgiving by “shopping small” at businesses in their neighborhood, town or city. Are you, as a business owner, ready for this exciting day?

This year is set to be the best Small Business Saturday yet, after amazing results in 2014: 88 million shoppers spent 14.3 billion dollars. Awareness is spreading quickly, with 67 percent of Americans aware of the holiday and 47 percent of Americans participating last year.

The impact of Small Business Saturday goes beyond shoppers buying holiday gifts -- or a little something for themselves -- locally. When you shop in your community, $68 of every $100 spent stays in your town. When you shop at a national business, only $43 of that $100 stays in the community.

As a business owner, you surely know the benefit of having those extra dollars in your community. It means you can pay for additional staffing during the holidays, offer events and promotions to engage with your community, and ensure your business will thrive in your neighborhood for years to come.

Three ways to prepare for Small Business Saturday

Although November 28 is approaching quickly, there’s plenty of time to prepare your small business for success.

Start planning social media posts to let followers and fans know you’ll be open and participating in Small Business Saturday. Last year, 387,000 tweets included #SmallBizSat or #ShopSmall. Be sure to include those hashtags to make sure interested shoppers in your town know how to find you.

Sign up at the official Small Business Saturday website to gain access to free marketing materials to use online or post in your business. By alerting customers to your participation now, they’re more likely to remember you when the big day arrives!

And it’s not too late to ask a mentor for advice. Our local chapters have hundreds of volunteer mentors with experience in the wide world of retail, and you’re sure to learn a few new tips for promoting your business as the holiday season kicks off.

Learn more about Small Business Saturday in this SCORE infographic.

Bridget Weston Pollack
Vice President of Marketing & Communications
SCORE
Bridget Weston Pollack is the Vice President of Marketing & Communications at the SCORE Association. In this role, Bridget is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies for the organization to facilitate the growth of SCORE’s mentoring and trainings services.
// by OnDeck / Nov. 5, 2015 0 comments
Credit Score

A good personal credit score often leads to more favorable loan terms and lower interest rates. Credit.com recently introduced a Lifetime Cost of Debt calculator that gives you visibility into what credit might cost over your lifetime depending upon your personal credit score. They make some average assumptions (which you can adjust within the tool), but here’s how the lifetime cost of debt numbers pan out for a 30-year-old man living in New York:

  • Fair Credit (620-679):                     $606,086
  • Good Credit (680-739):                  $523,039
  • Excellent Credit (740+):                 $481,390

It’s amazing how the bump from “Fair” to “Good” reduces the cost of credit over a lifetime by $83,047. And, an excellent credit sore reduces the cost by $124,696.

Even more expensive, the lifetime cost for a poor credit score (550-619) is a whopping $759,490 and a bad credit score (below 550) is almost $1 million dollars ($915,754).

The credit.com calculator doesn’t take into consideration the costs for a small business owner, but they are there. At the very least, lost opportunity costs. Many small business owners borrow capital to fuel growth and expansion so anything that hampers their ability to access capital can become very expensive. Possibly even more expensive than the extra interest he or she might pay over the lifetime of a small business loan.

Following these three suggestions may not only help you build a strong personal credit profile which could save you money, they may also help you qualify for a small business loan to help your business grow and thrive.

  1. Make sure the credit bureaus are telling the right story: It’s not uncommon to find errors on your personal credit report. And, left uncorrected or ignored, they can lower your score. Fortunately, all three of the major personal credit reporting bureaus (Experian, Equifax, and Transunion) have formal dispute processes that allow you to correct any verifiable mistakes on your report. Additionally, if there are extenuating circumstances like a prolonged illness, death of a spouse, or divorce that may have contributed to a less-than-perfect score, all three of the major bureaus will allow you to append up to a 100-word statement that explains the situation.
     
  2. Get current: Probably the biggest single thing that will improve your score is getting current with your obligations and staying current. There is no shortcut to improving a poor credit score. While it might take time, a dedicated effort to get and stay current can yield visible results in 12 months. While you might not be able to go from poor to great, it could be enough to help you move from fair to good or from poor to fair. Slow and steady wins this race.

Try to get your credit usage down too. 30 percent of your personal credit score is directly related to how much credit you use compared to how much credit you have available. A good rule of thumb is to shoot for around 15 percent.

  1. Use credit wisely: This might sound obvious, but for many of the same reasons mentioned above, this could make a difference in your score. However there’s a little more to it than lowering your credit balances. First, don’t cancel any of your current credit accounts. The length of your credit history is important and older accounts help your score—roughly 15 percent of your score.

    It’s also important to demonstrate that you can use different types of credit accounts, which amount to about 10 percent of your score. In other words, don’t max out your available credit and don’t always use the same credit card.

Building a strong personal credit score (or rebuilding a blemished score) doesn’t happen overnight. Avoid the temptation to shuffle your credit usage between different accounts. It’s very apparent to the credit bureaus and won’t do anything to improve your credit—and my even hurt you. Beware of anyone who claims to have a quick fix for a bad credit report. There is no quick fix. What’s more, it’s unlawful to charge an upfront fee for credit repair services so anyone who wants to charge you prior to helping you should be avoided. You should also know that using a different social security number or creating a different alias could land you in legal hot water.

Following these three suggestions will not only help you build a strong personal credit profile which could save you tens of thousands of dollars over your lifetime, they may also help you qualify for a small business loan to help your business grow and thrive. 

OnDeck
by Ty Kiisel
SCORE Corporate Patron
Ty Kiisel contributes to the SCORE blog from OnDeck. OnDeck offers business loans and business lines of credit to small businesses across the United States. OnDeck analyzes businesses differently than traditional lenders, which means that they can make more loans than traditional lenders, and they can fund businesses within hours or days – not weeks or months.
// by Micah Fraim / Nov. 4, 2015 0 comments
Accounting 101

“An accountant is someone who solves a problem you didn’t know you had in a way you don’t understand.”

OK, that old line, as with many jokes, contains a certain amount of truth. You’re a business owner and you’re an expert in your particular field. You’re not supposed to know the intricacies of accounting and taxes. So yeah, there can be “problems you didn’t know you had” and to be sure, that’s where a good accountant comes in. But solving it “in a way you don’t understand”? I’m not sure that’s the wisest approach. Do you need to become an accounting expert? Of course not. Again, that’s your CPA’s job. But I do think that it’s healthy for you to have a general understanding of what problems can exist, and ultimately how an advisor can best solve them for you.

I don’t usually write “Accounting 101” type articles. Normally I focus on the tax code, business strategy, and other things in that same vein. But based on some business tax returns I’ve seen recently I thought it might be good to write a few articles focused on some key accounting principles that can have a huge effect on a company’s profit and loss in a given year. If you have at least a decent working knowledge of these matters, it becomes a relatively easy process for us together to plan around them accordingly. If you don’t have this basic understanding you can find yourself with unexpected pain come tax season.

And keep in mind, these are not comprehensive or exhaustive discussions of the intricacies of accounting. Trust me, you probably wouldn’t want me to write anything that long or detailed (unless you happened to be suffering from insomnia, in which case an in-depth treatise on business accounting would probably be just what you needed). Instead, these quick recaps will simply serve as an effective “heads-up” about certain important issues and will help you to see whether a more serious look into your business accounting practices are needed.

For this article we’re going to talk about inventory timing.

Year End Inventory and Cost of Goods Sold

Constantly keeping track of inventory is a pain. Unless you are a retail operation and keep up with specific items for reordering purposes or are a company that bills material costs back to the customer, many people just put the entirety of a purchase straight into Cost of Goods Sold (COGS). And for a lot of small or incidental items, this can make practical sense. No one wants to put 100 $1.00 widgets into inventory as separate items and then reduce the inventory count one at a time each time you sell one for $2. For small businesses, and in particular for small dollar and small quantity inventory items, there is the assumption that these will be used in short order and the purchase just goes straight to COGS.

The only issue with this is the tax calculation for COGS and how this can impact larger inventory purchases. For tax purposes COGS is calculated in this way on an annual basis:

Beginning of Year Inventory

Plus: Purchases

Less: End of Year Inventory

Equals: COGS

 

Really, that makes sense if you think about it; it is Cost of Goods SOLD after all. Inventory is an asset and shouldn’t be expensed until used. If your inventory stayed constant and level year to year this would be fine. But think about a scenario where a company started the year with $10,000 of inventory, had purchases throughout the year of $300,000, and ended with $40,000 in inventory:

Beginning Inventory

$10,000

Plus: Purchases

$300,000

Less: Ending Inventory

$40,000

Equals: COGS

$270,000

 

This company legitimately spent $300,000 throughout the year (and has the lack of cash on hand to prove it) but is only getting $270,000 of expense when tallying taxable profits. That could easily be an additional $10,000 in taxes they did not plan for – for this tax year at least.

This of course swings both ways. If we reverse the beginning and ending inventory the above scenario then the company had COGS of $330,000 for the year. Theoretically and over time this all evens out. But year to year it has the potential to wreak havoc on a company’s profit and loss. Furthermore, extremely large swings in a given year could potentially move the company’s profits into a higher tax bracket due to an artificially overstated profit in that year, something that might not balance out next year.

Any potential surprises are easily avoided keeping an eye on this and consulting with your tax advisor a few times throughout the year. It is a bit of extra work and money, but both are well spent given the alternative of a large and unnecessary tax bill.

Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.

Micah Fraim
Owner
Micah Fraim, CPA
Micah is a CPA specializing in small business and tax advisory services. By handling each client himself, he is able to give personal attention and consultation while keeping overhead at a minimum. Micah's experience allows him to coach owners for success in every facet of their businesses.
// by Rieva Lesonsky / Nov. 3, 2015 0 comments
Customers Value

What are the top things that consumers value most in a brand? A recent survey by Spong asked customers to name the three things they care about the most. Here's what they said:

  • Overall quality of a product or service (70 percent)
  • Value of a product or service for the money (67 percent)
  • Customer service (41 percent)
  • Organization’s integrity (28 percent)
  • Treatment of employees (14 percent)

How do consumers assess these factors—in other words, where do they get their information about brands? The study had some surprising results. Only 23 percent of respondents rely on advertising, just 15 percent rely on the brand’s own website to find information, and a mere 14 percent rely on editorial/news coverage of brands.

So what sources do consumers trust? A whopping 74 percent say personal experience is the most reliable source for getting information about businesses. Nearly six in 10 (59 percent) use family members, friends or colleagues as a trusted source, while 48 percent believe reviews of products or services are valuable sources of accurate information.

What do these results mean for you? Some of the things consumers value aren’t surprising at all, such as the quality of the product or service, and the value for the  money. You're probably already emphasizing these factors in your marketing materials. Nor should it be surprising that customer service is a key issue for consumers choosing which businesses to patronize.

However, the fact that nearly three in 10 consumers care about a company's integrity and 14 percent consider how it treats employees when making purchasing decisions are somewhat surprising. Think about how your marketing and advertising can emphasize these aspects of your business (if they apply):

  1. Make sure any guarantees are prominently accessible on your website, displayed on your product packaging or included in your service contracts.
  2. Consider creating a mission statement that encompasses your commitment to integrity, and sharing it with customers.
  3. Promote your company culture as a good place to work in your marketing and public relations efforts. For example, you can create an "About Us" page on your website that shares your workplace philosophy, features photos and bios of your employees, and conveys a sense of what it's like to work at your business.
  4. If you receive any awards or commendations for your workplace, such as being listed in a local business publication’s Best Places to Work, be sure to promote the achievement to local media.

What about customers’ reliance on personal experience and word-of-mouth when choosing a business? Does that mean your marketing, advertising and social media outreach have no value? Not at all — but keep in mind that the ultimate goal of all of these marketing efforts is to boost your profile among real people, to get them talking about your business to their friends and families, and to spread the word among potential customers.

In other words, all of your marketing efforts must work together to promote your ultimate goals. By developing a well-rounded marketing plan that takes all these factors into account, you'll achieve what every business owner wants: becoming the talk of the town in a good way.

Your SCORE mentor can help you develop and execute a marketing plan that will work for your business. If you don't have a mentor yet, visit www.score.org to find one.

Rieva Lesonsky
Columnist and CEO
GrowBiz Media

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship. 
GrowBizMedia.com | @rieva | More from Rieva

// by Jeanne Rossomme / Nov. 2, 2015 0 comments
Planning Sessions

Late fall is the time many CEOs and Executive Directors bring together their teams to create plans and priorities for the coming year.  Team leaders, key employees, outside experts, investors and even key partners or customers may be invited to contribute.  Even if the people and meeting place are local, these events have real expenses in time and money.  But the biggest costs come if the planning session fails, and the new fiscal year is fraught with missed sales targets, over-budget spending and team frustration.

So the stakes are high for this important meeting.  But in my experience the biggest reason that planning sessions fail is due to something that is completely in the control of the leader: setting clear goals for the planning session.  Often meeting goals are too nebulous or intangible to create a meaningful destination.  General “growth” or even a 20% revenue increase is no more than an aspiration – and even then, not an inspiring one for the rest of the team.  Planning meeting goals need to be created with time and purpose to get at the real core of what needs to be accomplished.  Here are questions that are useful in guiding the process:

  • What are the top problems or issues you need to address in the coming year? 
  • What are the one to three metrics on which success depends?  They may be the few numbers that are important to your investors, or milestones that you committed to partners.  Or maybe your spending is out of control or constrained cash flow is slowing down your reaction to opportunity.  Focus on the few big numbers by which to measure real progress.
  • What do you want to walk out if the room with?  If your goal is brainstorming, you will want to narrow down the result to a prioritized list.  If you have staff plans prepared, your desired output may be to redistribute projects so the team is not overly crammed in one month.  Think about a tangible chart or list or other receptacle that would be a useful outcome for your meeting.
  • How do you want the members to feel?  Does each person need to feel heard?  Do you need to motivate for the upcoming year?  Do you need to support or foster innovation? If you had a fly on the wall after the meeting what would you like to hear?

After setting initial meeting goals consider letting them percolate or requesting reactions from other people who get the vision of your company.  Then you are ready to assemble the invite list for your planning event.

Jeanne Rossomme
President
RoadMap Marketing

Jeanne uses her 20 years of marketing know-how to help small business owners reach their goals. Before becoming an entrepreneur, she held a variety of marketing positions with DuPont and General Electric. Jeanne regularly hosts online webinars and workshops in both English and Spanish.
www.roadmapmarketing.com | @roadmapmarketin | More from Jeanne

// by Bridget Weston Pollack / Oct. 30, 2015 0 comments
Hobby

A hobby can often seem like a natural path to small business. You love your hobby, and you probably know enough about it that you could chat about your hobby for days. You’ve received compliments for your work. Could making money from your hobby be your next step?

Not so fast! Turning a hobby into a business involves more than simply spending more time creating your product or service. Without research, planning, and help from seasoned experts before launching your business, you could find yourself resenting the hobby you once loved.

Before you expand your hobby into a full-time small business, think about these three questions.

1. Can you channel your hobby into profits?

It’s not enough to be passionate about your hobby. You’ve got to know how to turn your skills into a consistent revenue generator. If you have small business experience, you may feel comfortable examining essential business calculations like cost of goods sold, profit and loss, and cash flow. If these terms sound foreign to you, start reading before you start printing price tags.

The Simple Steps for Starting Your Business online workshop series offers an overview of the business startup process in five short modules. There’s even a free downloadable workbook to help you organize your thoughts and plans as you learn about potential paths for your hobby.

2. Is there a viable market?

Inquiries from family and friends can indicate that your hobby product or service could become a full-fledged business. But before you embark on the journey, take a look at your competition. Who’s doing similar work in your city or town? Is the web saturated with products that look just like yours?

If your friends and family have shown interest in your hobby, use them as a research group. “Engage family, friends and potential customers to provide critical feedback about your product,” SCORE mentor Nancy Strojny recommends. “Ask what they like most about your product, how it helps them solve a problem, and what they might pay for this product.”

Their answers can help you determine whether your hobby is ready to grow into a business, or whether it’s better suited for a part-time venture. Strojny recommends asking at least 25 people this same set of questions.

You may also want to consult trend-tracking services, which can help you learn more about buying patterns, along with key demographics for different products and services.

3. Can you separate the business from the personal?

Sharing something you’re passionate about with the public is exciting! But it can also come with negative feedback. Think about how you react when receiving compliments or criticism related to your hobby. How will you feel if you’re ever faced with a bad Yelp review, or encounter a customer who just won’t stop emailing you until they get a refund?

Negative feedback can dampen your drive, making it harder to focus on building your company. It takes internal strength to overcome the challenges of starting your business.

Do you have a great idea for a hobby-turned-business? Take your idea to a SCORE mentor to start planning for success.

Bridget Weston Pollack
Vice President of Marketing & Communications
SCORE
Bridget Weston Pollack is the Vice President of Marketing & Communications at the SCORE Association. In this role, Bridget is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies for the organization to facilitate the growth of SCORE’s mentoring and trainings services.