By Rieva Lesonsky
If you’re thinking of running your small business virtually, you’re not alone. Most small business owners today understand the benefits of not having to house all your employees under one roof. Even a small business lender can see the financial advantages you’ll reap, and the working capital you’ll save. But what are some of the biggest hurdles you’ll face? In addition to maintaining some kind of organizational structure and system of accountability, you’ll most likely be hiring some workers sight unseen. Here are some ways to make your virtual business work:
Do your homework. Think about how your business would work with virtual workers. You may want to discuss this with an advisor or another business owner. How will being virtual affect your clients? If you’re moving out of an office, how will it affect your staff? If you’re ready to make the leap, consider transitioning gradually to work out the kinks, perhaps by moving a few employees at a time home or having your employees work at home one or two days a week.
We have the technology. Luckily, today the technologies that are essential for working virtually are readily available and affordable. Pay special attention to security and compatibility. Keep most of your work stored in the cloud so you and your staff can access information from anywhere. Make sure everyone is equipped with the necessary equipment such as scanner/copiers, webcams and microphones, or whatever else is needed to get the job done.
It’s all about communication. It’s especially important to keep everyone on the same page when you’re working remotely—it’s too easy to let things slip through the cracks when you’re not in the same office. In addition, you want to avoid feelings of isolation and being out of the loop. If your staff lives close enough for face-to-face time, make sure you schedule occasional meetings or social lunches. Invest in project management programs such as Liquid Planner, 5 pm and ZOHO Projects. You might also want to use Skype or some other videoconferencing system for online video chats.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
One of the most commonly asked questions I get is “what are the most common mistakes that small business owners make when looking for financing?” If you work with small business owners then please comment here if you have a mistake that you commonly see that isn’t covered here.
Let me begin by saying that this is intended for the following groups. According to statistics compiled by Clate Mask about small business owners, which he talked about in detail for Small Business Trends:
•83% are Solopreneurs (1-2 people) & bring in less than $100,000 a year in annual revenue
•6.1% make between $100,000 - $300,000 in annual revenue
•6.8% make between $300,000 - $1 million in annual revenue
So for these amazing & hard working small business owners, which make up over 95% of all the small business owners in the U.S., what are the 2 most common financing mistakes they make?
Mistake #1 – Not Knowing Your Business Financing Options
This is where it all starts. You can’t know what to do or the best course of action unless you know what the options are. Most small business owners who haven’t been in business for several years think that there are options that simply don’t exist. It’s one of the reasons we put together the free eBook on the 16 Best & Most Common Business Financing Options for your Small Business.
There are really only about 10-12 debt financing options and 3-4 equity financing options that make up the list. One of those financing options that we've all heard of are SBA loans. SBA loans are a great option for some people. In fact, we have a variety of companies and lenders we work with who are highly involved in SBA lending. To better understand SBA loans, let’s look at some recent statistics.
This information helps us understand who is a good candidate for SBA financing. It is true that only about 1/5 of 1% (0.002%) of the small business owners in the U.S. get approved annually for SBA loans. The chart shows the average loan amounts but it's a bit deceiving. You'll see that in 2011 the average SBA loan was $365k but when you take out the Patriot Express loans to veterans that average jumps up to over $600k.
Bottom line on SBA: They are great loans but unless you're a veteran then any requests for less than $250k & where you don't have experience in your business & collateral are going to be tough. For most people, SBA loans become a good option after you can show good earnings & need over $250,000.
Mistake #2 – Not Treating Your Credit as an Asset
We see several hundred requests for financing every month. These are good people who are looking to start, build, and grow their businesses. They have dreams. They have goals. They want to either get started or get to the next level. Why can’t we quickly get everyone low-cost financing so they can go after those goals and dreams? Read more about this topic on the Dun & Bradstreet Credibility Corp. blog here.
Two credit-related reasons dominate this discussion.
A) You have a late payment or late payments on your credit
Did you know???
***A late payment only shows up on your credit report if it's 30 Days Late!! Although we don't recommend it, if you pay your bill 29 days late it should not report late on your credit report.
***Many people have late payments that they didn't know about or that are not accurate!
Find out what's on your credit report and what's not. If you're married and in business with your spouse you may want to check out some "insider" tips from my article an SBT. If it's an asset then you should want to protect and preserve it and possibly even make it more of an asset. If it's a liability then ask yourself what you can do to turn that around and make it an asset.
B) Your credit card utilization % is too high (balance to limit ratio)
If you owe an excessive amount on your personal credit cards then this is an area you want to quickly learn more about. It looks like this:
●You owe $20,000 on your credit cards
●Your credit limits (total available credit) add up to a total of $30,000
●This means you are 66% utilized. That's too high so ask us how to solve this. We can help.
The calculation will include all your personal and business revolving accounts that are showing up on your personal credit report. This is why it’s important to know which cards report to your personal credit and which ones do not. It’s no longer good enough to just use a business credit card for example. Read more here.
So utilization is a big issue because credit cards are so vital to small business owners - and especially the "Solopreneurs" out there. Like about anything else, there is a right way and there's a wrong way to go about using credit cards. What are the right and wrong ways? Ask us or let us know if you have any questions.
These are the 2 most common issues facing Solopreneurs who want or need financing to grow their businesses. There's absolutely nothing wrong with being a solopreneur. However, do you want to grow your business and bring in over $100,000 in annual gross revenue? Or maybe you have bigger goals and that's fine if you do.
If you learn to not let these mistakes get in your way you'll have a much clearer path to your success!
By Rieva Lesonsky
Don’t let a little thing like not knowing what a title tag is stop you from increasing your website’s SEO. You probably didn’t know all the terminology involved when you went looking for seed capital or a small business loan, but that didn’t stop you from asking for funding. Entrepreneurship is all about learning, so here we go.
Title tags are Web page codes that search engines use when they crawl the Web looking for sites. The title tag shows up in the title bar at the top of your Web browser. Why does this matter to you? Because you can make a big difference in your search ranking results by making a few changes to your website’s title tags. Here’s how to optimize your website’s title tags:
- Use and lead with keywords you believe you’ll be highest ranked for. For example, the keyword you want to rank first for should appear first, then the second-most-important keyword, then the third-most-important keyword and so on.
- Keep title tags short. Search engines like Google read just 90 characters of your title tag, so keep the length at about 80 to 90 characters.
- Don’t forget to use singular, plural and variant spellings of keywords. If you own a donut shop, for instance, you should use “donut,” “donuts” and “doughnuts” in your title tag.
- However, do not repeat keywords more than three times in the same title tag (this includes both singular and plural versions of the same keyword).
- Don’t use the same title tag throughout your site. Every page in your website can have a different title tag, and using individual tags will allow you to work in more relevant keywords.
- Search engines aren’t case sensitive, so you can capitalize your title tag however it looks best to readers.
- Don’t get carried away. The title tag should make sense grammatically because it will show up as text if users add a page to their bookmarks or favorites in their Web browser. Use a title tag that would make users click on the page.
Luckily, title tags are not static and can be changed if they’re not working. Be sure to regularly monitor the performance of your website and adjust your title tags when needed.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Wondering if you need to spend precious working capital to hire a social media guru for your small business? Before you deplete all your seed capital, take a look at the following seven tools to help you get your social media strategy under control:
TweetDeck: If there are still any Twitter novices out there, you may have already realized you’ll need some sort of organization tool to keep up with all the followers, tweets, messages, etc. that joining Twitter has brought you. Before you try to wrangle this enormous platform on your own, check out TweetDeck by Twitter. It’s a social media app to help you get a better grasp of your feeds, schedule your tweets and help you search through all your messages. Most entrepreneurs are trying to manage not just one Twitter account, but many, and TweetDeck can help with that, too. (To manage multiple accounts or even better scheduling tools check out HootSuite as well.)
48ers: Has someone ever told you they read something bad about your business on social media? The small business owner is always the last to know, but you shouldn’t be. To find out all the hot gossip, check out 48ers, a search engine for social media platforms only. Keep tabs on what’s being said about your business, competitors and your industry. (Brandify is another good tool to check out.)
Mashable: You may know about Mashable, but consider this a reminder to check in every once in a while to find out what’s trending on this highly regarded website. One of Technorati’s 12 Top Blogs, Mashable is one of the top sources for social and digital media news. Find out the latest news on all the social media platforms including Google+ and YouTube—and see what the Mashable team predicts the next big thing will be.
Vertical Response: If you’re ready to take your social media marketing to the next level with industry-related content, all-encompassing campaigns and more, check out Vertical Response’s Social Media Marketing. You can learn new ways to engage your audience, offer coupons and get actionable reports on your campaign efforts.
ePrize: Social media is all about engagement and if you’re trying to offer your customers new ways to interact, ePrize wants to help. From polls to sweepstakes and even video contests, ePrize helps you create a campaign, including making sure your efforts stays on the right side of the law. ePrize can create campaigns to capture your mobile audience, too, including mobile coupons and loyalty programs.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
By Rieva Lesonsky
Starting your own business from the ground up is a daunting task, especially if you’re creating your own management, marketing and operation systems. Instead, many small business owners decide to go with a turnkey operation that offers expert (and ongoing) support, by buying a franchise. In fact, franchises account for close to 800,000 business establishments in the U.S. alone. When searching for a small business loan, you might be surprised to know that the government has specific loans set aside to help people buy franchise business opportunities. Here are three websites to help you in your research:
International Franchise Association (IFA)
The oldest and largest organization representing franchising worldwide, the IFA says its mission is to “protect, enhance and promote franchising through government relations, public relations and educational programs.” Always a vital stop in franchise research, the IFA reports the latest news in franchising, holds events around the country (the next IFA Annual Convention is in New Orleans on February 22-25, 2014), and provides information on over 1,100 franchises in its online directory. Check out the IFA’s special programs for veteran, women and minority franchisees.
The Franchise King
Joel Libava is a franchise guru, a franchise advisor and actually, the Franchise King®. Author of Become a Franchise Owner!: The Start-Up Guide to Lowering Risk, Making Money, and Owning What you Do, Libava’s website offers straightforward information about franchising, including a popular blog, a franchise quiz to help you determine if franchising is the right path for you, a free Intro to Franchising guide, an e-newsletter and more. If you want personal advice, Libava is also available for advisory services (which come with a money-back guarantee).
For a plethora of franchise information and lists of franchise opportunities, check out FranchiseDirect.com. Franchises are categorized by industry and then narrowed down even further by business type. If you see something you like, you can click directly from FranchiseDirect to request more information. Also helpful are links to franchise attorneys, franchise consultants and special reports on categories such as food, fitness and beauty franchises.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
By Rieva Lesonsky
What’s in your inbox? Emails from your small business loan officer? Emails from clients? What about helpful e-newsletters that can help you grow your business? If you’re looking to keep up on what’s hot and other important information relevant to your small business, consider subscribing to these five winners:
eMarketer.com: You can’t grow your business without the marketing skills and knowhow only the experts can give you. Subscribe to the eMarketer newsletter and you’ll quickly learn what works and what doesn’t. You can spend hours reading all the material available or only a few minutes to learn the latest, like how to market to teens online or what industries have the best websites. You also get access to reports, studies and ebooks you can download for more detailed information.
US Business Law/Taxes: Staying on the right side of the law starts with knowing what laws apply to your business. Subscribe to The US Business Law/Taxes newsletter to keep up on important issues, such as laws for employees, legal structure and what you can and can’t write off on your business taxes.
NRN.com: If you own a restaurant, a mobile food truck, a business that carries food products or a catering company, sign up for Nation’s Restaurant News newsletters to get the latest industry news and trends. Choose from 13 different e-newsletters with specific subjects such as casual dining, desserts or overall trends. Frequency varies from daily to weekly.
VentureBeat: Created by a venture capital journalist, this site and newsletter covers news and information related to the venture capital industry. If you want to keep up on where investors are putting their money and what’s the latest happening in industries, subscribe today. The site is organized by news topic and covers mobile technology, social networking and environmental issues. There’s also an Entrepreneur’s Corner with information targeted to business owners.
TrendCast from SmallBizDaily: This e-newsletter is close to my heart, because it’s mine. I love reporting on new trends affecting America’s entrepreneurs and always have my eye out for what’s new and hot. Each week, subscribers receive information on a current trend that may affect their businesses. Trends range from food trends to hot products and industry news.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Posted by
Ty Kiisel on Wed, May 08, 2013 @ 07:00 AM
Finding capital to fund a startup is no easy task, which is why so many entrepreneurs turn to bootstrapping their dream, at least for the first couple of years. When you consider that only 10 percent of the small business owners that go into a bank are able to leave with a small business loan, it’s no wonder concepts like crowd funding are so popular today. What’s more, despite the popularity of television shows like Shark Tank, only about two percent of startups get any venture capital. VC firms are looking for the next sexy tech startup like Facebook or Twitter and aren’t really interested in what I would call a Main Street business idea.
Despite what the bank might tell you, the reason your loan application was denied likely boils down to three common reasons:
1. Your Business is a Startup: Despite how brilliant your idea may be, bankers are incredibly risk averse and seldom lend to anyone in the first year of business. Additionally, alternative lenders are looking at things like cash flow, which is often problematic for a brand new entrepreneurial venture. Your banker is looking at the success rates of business older than two years and the number of businesses that fail in the first two as he’s looking at your loan request. With that in mind, even if you don’t have much to report, file your business returns starting with your first year to establish your company’s age right from the start.
2. Your Personal Credit isn’t Good: Although you may be trying to establish business credit, when you’re just getting started, lenders look at your personal credit and will likely seek a personal guarantee if they offer you a loan. I recently heard from a small business borrower who defaulted on a very large business loan. The real estate he had used for collateral had significantly dropped in value since the loan was first funded and would only cover about half of the loan balance. His attorney dropped a bomb when he warned him that he should prepare for the worst—the bank would likely take everything he owned. However if you have great personal credit, there are lenders that will offer you financing for your startup. Particularly when talking startups, your personal credit score is every bit as important as your business credit score. Particularly when talking startups, your personal credit profile is going to prove to be more important than your business credit profile.
3. Your Lender Doesn’t “Get” Your Business: Maybe they think your business is in too volatile an industry—they do pay attention to that kind of stuff. The restaurant business is a good example. If you want to start a restaurant, you should look for a lender who is familiar with the business and may even know how to help you stay in the black. Trying to build a relationship with a lender who doesn’t understand your industry can be a real problem.
This doesn’t mean you’re stuck and won’t get the funding you need, but it should give you some suggestions about what you need to do to prepare before you start looking for a loan. Over the last couple of years small business owners, even startups, have had access to a lot more options than they once did. With that said, no lender treats what they do as a trip to Vegas. Make sure your ducks are in a row, that you’re prepared, and can demonstrate that you are “safe” risk.
Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business best practices, tips and advice accessible by weaving personal experiences, historical references and other anecdotes into relevant discussions about leading people, managing a business and what it takes to be successful. Ty also shares his passion for small business every week on Forbes.com. Follow Ty on twitter @tykiisel.
By Rieva Lesonsky
With all the work you have to do as a small business owner, staying organized and on top of everything is never as easy as you would like it to be. Having your data available in the cloud reduces the time it takes to access a project, a file or information about your small business loans because your data is accessible wherever you are, whenever you need it. Here are some helpful cloud-based tools that won’t deplete your working capital and can keep you on track:
Workspace no longer has to mean a physical location. WorkSpace is a cloud-based solution that helps you organize all your communication portals (voice, data, voice mail, instant messaging, file sharing, calendar, etc.). It works great for businesses with employees located in different buildings, cities or even countries. Wherever you and your employees are, you can access your information. WorkSpace is subscription-based, charges you by the number of users, and is designed to work with familiar Microsoft Outlook applications.
If you need help in the marketing strategy department, Act-On Integrated Marketing Program has a cloud-based integrated marketing solution design especially for small businesses. Act-On includes simple email marketing solutions, designing tools, prospect-qualification tools, social media integration, sales tracking and customized reports to analyze your efforts and determine if campaigns working. Want to use webinar marketing? Act-On can help.
You don’t have to worry about trekking to the nearest post office with pbSmartPostage™. This shipping and mailing service from Pitney Bowes saves you time and money by letting you print shipping labels anytime directly from any PC. The fact it’s cloud-based means there’s no need to download any software. You can download addresses directly from your computer’s contact list, track packages and save on USPS Priority Mail and Express Mail.
Do you rely on text messages to keep you up to date with your business and personal life? Then you may be getting so many texts it’s easy to miss some and even harder to find them later. Or what if you break your phone or change carriers? Are your texts gone forever? Uppidy is an app designed to organize and store texts in the cloud. You can search for a text using a dashboard on your Web browser. To never lose a text again download the app for any mobile device.
How many times have you forgotten a password? If you’re like most people the answer is too many to count--especially since security experts agree it’s important to change your passwords every three months or so. LastPass.com is a password manager that helps you organize and remember passwords on your desktop, laptop or smartphone. If you have a staff and you’re trying to manage their passwords as well, LastPass keeps track of when your employees log in and out, helps organize password expirations and makes sure passwords get automatically changed when an employee leaves the company. Only employees with passwords can access the data, and everything is encrypted.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
By Rieva Lesonsky
When you’re struggling to make every penny of your working capital count towards growing your small business, it’s easy to ignore the things that are right in front of your face—like your website. If it’s been two or three years since you launched or redesigned your website, most marketers would agree that it’s time to make some changes. Even if your site is doing relatively well, a website makeover can attract new customers, reinvigorate old customers and add power to your SEO efforts. And the good news is this is completely affordable—you won’t need a small business loan to revamp your site.
Look for these warning signs that it’s (past) time to give your website a makeover:
- Outdated graphics and fonts
- You’ve changed the products you sell or services you offer
- Slow upload times
- Not of mobile-friendly
- Poor ranking in the search engines
Or maybe you’re just bored. Here are some areas on your website to consider updating:
Overall look: Have you checked out your competitors lately? What do you like and dislike about their sites? What kind of feeling does the design portray? Casual or formal? Fun or serious? What do the colors used express? Then look at sites not in your industry to see what elements you might want to borrow.
Simple goes a long way: If you’re redesigning, see if you can clear away some of the clutter. Fewer images and words are more inviting (and easier to look at on a mobile device). It’s especially important to be simple on your homepage. Think visual. Think clean.
The right words: When you are creating your content, use keywords that customers use when they’re searching online. Use keywords in your product descriptions, blog posts, image descriptions and headlines. If you aren’t sure what the important keywords are for your industry, try a keyword tool like Google Keyword Toolbox which allows you to type in a word, phrase or website name. The Tool will then show you a list of similar keywords with a count of how often each word is searched.
Whatever the reasons you decide to make over your website, this is one area in your entrepreneurial life where it would benefit you to ask an expert (or several experts) for their feedback. You can outsource to a Web designer with SEO experience or make an appointment at your local SCORE office for a free one-on-one mentoring session with a Web expert.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Do you know about the sandbox you’re playing in? In other words, if you’re an entrepreneur or small business owner then it would probably help you to know some data about being a small business owner in the United States. From the outside looking in it will sound and appear very difficult. However, let’s also shed some light on what makes small business owners successful.
According to Michael Gerber who authored the highly popular book, The E-Myth, 80% of small businesses will fail within the first 5 years. That might now sound so great but we’re not done yet. He goes on to further explain that of the remaining 20%, another 80% of those small businesses will be out of business by year #10.
Additionally, according to Clate Mask who founded the highly successful Infusionsoft, 83% of the 28 million small business owners in the United States are solopreneurs. What is a solopreneur? It is someone who owns a business and does less than $100,000 in annual sales or revenue.
So before you get too discouraged, let me ask you which of these business owners is more likely to succeed
So we learned how tough it is to succeed as a small business owner but which of these two owners is more likely to succeed? If you answered #2 then some of the answers for how you should spend your time and what some of your objectives should be are there. Learn more about the ones you don’t understand. Develop the areas that need to be developed. Ask yourself where you want your business to be in 3-5 years. Then what can you do in the next 12 months to be on track for those 3-5 year visions you have? Then, when you know what needs to be done in the next 12 months you break it up and create 90 day goals or objectives. That’s where you focus your time and effort for the next 3 months.