Author: Pamela Swift

Categories
Sales & Marketing

Holiday Essentials for Small Retail Businesses and Startups

As a small business or startup, the holiday season is a great time to watch your revenue grow — it’s estimated consumers will spend $1,536 each on holiday goods and gifts. But you have to plan ahead and develop the perfect holiday marketing campaign before you can reap the rewards. Here are eight holiday essentials for small retail businesses and startups.

1. Plan a Holiday Marketing Campaign

The holidays are about more than selling your items. You need different messaging and tactics to tug at people’s heartstrings and remind them of your brand name. Your holiday marketing campaign such include SEO, emails, influencer marketing and display advertising. Don’t forget to adapt those messages whenever an event or a holiday happens to bring in even more customers.

2. Create a Personalized Experience

During the holidays, you can choose to increase your revenue by bringing in more customers, or you can increase profits through quality, loyal customers. Neither way is wrong, but choosing to focus on loyal customers may pay off in the long-term. Try to make your business approach personalized to keep those customers coming back. Hand-write thank you notes for purchases that are shipped or create an email campaign that targets repeat customers to keep people coming back.

3. Take Advantage of Big Shopping Dates

The last quarter of the year is typically when the biggest shopping dates hit. Throughout October, November and December you need to plan for Columbus Day, Halloween, Veterans Day, Thanksgiving, Black Friday, Cyber Monday and Christmas. Also look at some of the big online spending days to figure out when you should be pushing paid advertisements and more.

4. Decide on a Return Policy

This one isn’t as exciting, but you should decide on a return policy and payment options before you get a rush of customers. Some online and offline stores offer more liberal and extended return/exchange policies during the holidays. Consider what is best for your store and how it will impact sales. You can also consider accepting other payment options such as PayPal.

5. Offer Multiple Delivery Options

Another important aspect of holiday shopping is delivery. Holiday shopping is important to consumers, and you want to keep them coming back by offering multiple delivery options that will allow their package to get their on-time. Whether it’s FedEx, UPS, USPS and more, check out the drop-dead shipping dates to know when the last possible day you can ship something is.

6. Pay Attention to Pricing

All sellers know that consumers will buy during the holiday season, no matter what the price of the product. However, good sellers will drop or increase the price of an item at just the right time based on many factors. Either watch the changes yourself or use dynamic repricing tools that use an algorithm to price things accordingly.

7. Make a Few Site Improvements

The last thing you want is for consumers to have a cart full of items that disappear if your site crashes. Factors such as site speed, slowdowns, content issues and overall stability will impact whether or not you make a sale. Take some time before the holiday rush to see what you can do to improve your site and make it more user-friendly for individuals who prefer to shop online.

8. Decide Where to Advertise

Not every advertising channel is the same, and you need to craft different messages depending on where you’re advertising. The more targeted you get with your promotions, the more people will buy. Do your research ahead of time to see where your competitors are advertising. Will a Facebook campaign work best? What about PPC on Google? Find the best ways to reach your audience this season to realize the biggest rewards.

Have Fun While Doing It

The holidays can often seem stressful, but they don’t need to be. As a small business or startup, you should have fun experiencing the holidays along with your customers. Help them find the perfect gifts for friends and family and do it with a smile on your face. The holidays are about giving, so give back with a cheerful attitude especially when the sales start to pile in.

Categories
Finance & Capital

Think Social To Fund Your Startup

Building a startup is an exciting undertaking, but it’s also an expensive one – and most founders don’t have the funds to go it alone. So where does the money come from? While the occasional developer has the type of idea that attracts venture capital, the majority will have to pull together funds from a variety of sources, including crowdfunding and peer-to-peer lending. In other words, to build a business, you need to think socially.

The Rise Of Startup Crowdfunding

Crowdfunding is a vital part of today’s economy, funding everything from health emergencies to product development, but in the startup sector, the platform that really got everything going was Kickstarter.

Launched in 2009, Kickstarter was specifically designed to fund creative projects, whether that was a film or a product, like the fidget cube. Many companies have used the platform to fund early production of multiple products, and because funding is only released if the project meets its goals, the platform minimizes risks for investors and helps founders get a sense of how successful their ideas would be if they got them to market.

Another advantage of crowdfunding is that factors that can prevent founders from accessing a loan, such as credit history, just don’t matter. That means if you have poor credit or limited history, crowdfunding could help you get the money you need to launch your business. Crowdfunding also lets you build an alternative reputation for success, as most display prior successful campaigns – and those can be at least as important in swaying funders as a traditional credit history.

The Peer-To-Peer Model

While crowdfunding is a great option for businesses that need to fund a product concept, for those starting more traditional businesses and need to rent office space and get permits, they aren’t always the most helpful; these businesses need a less-directed funding framework, though they may not need as much money as a startup that’s launching a product. These are the startup founders who can benefit most from peer-to-peer lending.

Peer-to-peer lending, which has had a major public presence since about 2014 when Lending Club went public, is a model that uses a variety of data points to assess creditworthiness. Then, based on this scoring system, approved borrowers can borrow small amounts at low-interest rates from other members of the network. Each individual investor is able to assess approved applicants’ profiles and decide whether, and how much, to lend, but because there are numerous lenders on each project, the group minimizes their individual risk.

Compared to crowdfunding, individuals relying on peer-to-peer lending to fund their startup typically need a better credit score and a more structured business plan; while crowdfunding relies on traditional social networks – your friends will toss some money towards your new endeavor and share it with their friends – peer-to-peer lenders are private individuals whom you’re unlikely to have a personal relationship with. They’re lending from a place of goodwill, but it’s conditional. Your project needs to deserve it.

Whether you choose crowdfunding or peer-to-peer lending to fund your startup, the key is to find an audience that your idea appeals to – your crowd – and master the intricacies of the platform. Study successful projects and talk to investors about what they look for in a business plan. Even if this is your first foray into the business world, you need to put your best foot forward.

Categories
Starting Up

What’s the Best State to Start a Business In?

New entrepreneurs can start a business in practically any state they choose, but each state offers advantages and disadvantages to business owners, sometimes in surprising ways. If you want your business to have the best overall chance of success, you’ll want to choose a state that’s favorable to you, but is there truly a “best” state in which to start a business?

How States Treat Structures Differently

We can start answering this question by examining how states treat business structures differently. When you create an LLC or corporation, you’ll be subject to laws, rules, and restrictions associated with that state. For example, starting an LLC in Delaware is different than starting an LLC in Montana.

You can note the differences in the following categories:

  • Taxes. Most states have a unique corporate income tax rate, and some apply a fixed tax rate to LLCs. Some states have unique tax advantages or perks associated with starting a business in that state, to incentivize more entrepreneurship.
  • Liability. For the most part, liability works the same for businesses of the same type, no matter where you’ve started them. However, different states may offer varying levels of protection for LLCs or corporations based on local rules.
  • Fees. Some states, instead of having a tax rate for LLCs, instead impose a flat, recurring fee for keeping the business alive. For example, you might pay $300 a year to keep it active, or you might pay nothing—it all depends on the state.
  • Annual reports and paperwork. States also frequently have specific demands for annual reports, especially for LLCs and corporations. Some states require you to submit a specifically formatted annual report (and/or other paperwork) at regular intervals, while others may be more lenient with the paperwork required.
  • Incentives. States may also individually offer unique perks or incentives for entrepreneurs to start a business in their territory. For example, you might have access to a lower tax rate if you meet certain requirements, or you may have more grants and loans available to you.

Starting a Business in Another State

It is possible to structure a business in a state other than the one in which you live, but it isn’t always advantageous. For example, in some cases, you may end up paying taxes both in your home state and in the state in which your business is incorporated, or you may be forced to comply with the regulations of two different states. Consider the pros and cons of operating a business in another state, and all things equal, lean toward the state in which you plan to reside.

Other Factors to Consider

There are some other factors you should consider when planning where to start your business, such as:

  • Startup activity. Some states simply have more startup activity than others, resulting in a feedback loop that attracts more entrepreneurs and keeps that local economy thriving. Generally, states with high entrepreneurship rates are more favorable to new entrepreneurs; there tends to be a better environment for mutual support.
  • Overall survival rates. You can also look up survival rates for new businesses in a given area. Some will have a much higher rate of success due to local conditions. This shouldn’t be the only factor you consider, clearly, since you could always be the exception to the rule, but it could help sway you in a tough decision.
  • Economic productivity. How does the state’s economic growth rate compare to the national rate? Generally speaking, a state with a higher rate of economic growth will have more opportunities for entrepreneurs in practically all industries, and at all levels. Again, your mileage may vary.
  • Employee options. It’s also worth looking at the available talent in a given state (and in the big cities within those states). States with good higher education opportunities tend to have better-educated and more skilled employees available for higher. That said, they also tend to demand higher salaries, so you’ll have to strike a balance here.
  • Cost of living. If you plan to reside in the state in which you’re forming your business, you should also consider the cost of living. If you make twice as much money but pay three times as much in everyday costs, it may not be worth the move.

Is There Truly a “Best” State?

As of 2018, some of the commonly cited “best” states include New Hampshire, Massachusetts, Wyoming, Nebraska, and South Dakota, but you’ll find different answers depending on which sources you review, and of course, your individual priorities and preferences should influence your decision.

Accordingly, there’s no such thing as a true “best” state in which to start a business, but some states will be more favorable for your business than others. Do your research before you finalize your decision, and make sure to take all these factors into consideration.

Categories
Franchise

These Signs Will Tell You It is Time to Try Franchising

Franchising could be the perfect way to start a business instead of starting from scratch. When you take on a franchise, you are getting everything that you need plus the name of the brand. You will continue what they already started and also find a way to grow the business. You might be a bit hesitant though given the franchise fees. If you see the following signs, you need to grab the chance despite the cost.

Industry growth 

If you are contemplating buying a franchise in a growing industry, you will be on the right track. You want to invest in a business that has a bright future. You need to analyse the behaviour of the market and see if the industry is on an upward trajectory.

Support from the franchisor 

Before you purchase a franchise, you need to know first if your franchisor will support you. You might need to ask questions, follow up through emails, and have a personal conversation with the franchisor. If they will provide you with all these things from the start without any problem, it is a good sign. For some franchises, even just setting up a meeting with the franchisor can be a challenge.

Great management 

The number of years in the industry will tell you if there is good management behind the franchise. It wouldn’t have lasted that long if it had not had good management. You need to see if the leadership team is sturdy enough to lead the company in the right direction. As a franchisee, you will still heavily rely on the parent company.

Strong advertising 

You might be planning to be a franchisee, but you are still a customer for now. You should know if the company is doing well with advertising. If it is, you can count on the franchisor to support you in advertising the business. The good thing about franchises is that you get support for advertising and you don’t need to spend a lot of money on it.

Satisfied franchisees 

You can speak with other franchisees and find out what they feel about the franchise. If they give positive feedback, you can pursue the plan. Otherwise, you need to think twice. These people have experienced how it is to work with the franchisor. If you do not get enough positive feedback, you might have a hard time if you decide to pursue being a franchisee.

Good potential earnings 

You want to make money out of the franchise. You are willing to invest a considerable sum of money for the franchise fees, but you also need a return for your investment. If the other franchises are doing well, it shows that your business could also do well if you give it a try. Some of the financial records are available publicly, so you can check them out.

After considering all these points, you will be ready to decide to buy a franchise, or not. If all the signs are positive, you might feel that you will be in good hands and the endeavour will most likely end well. It is still possible that things don’t go your way, but at least you will have minimised the risk.

Categories
Finance & Capital

Are You Financially Ready to Start a Business?

Starting a business could be your next step toward financial and personal freedom. But obviously there’s a lot to think about before in dive in.

First of all, is this the lifestyle you want to pursue? Second, do you have enough money to get started? Use the financial essentials below to help you determine whether launching a business makes financial sense for your future.

Look at Your Personal Financial State

If you’re trying to open a company, you’ve probably been setting money aside. Even if they’ve been doing this, most business owners still have to take out a loan, but your savings should substantially reduce the personal financial burden.

Along with evaluating your savings, check the state of your credit. Most entrepreneurs have to take out a business loan to get underway, but if you have bad credit, that step can be a challenge. If your credit ranks below 680, many financial institutions will not grant you a loan.

Thankfully, some online lending options will allow you to take out a startup business loan, even if you have poor credit. But it’s still a smart move to focus on improving your credit anyway.

By making on-time payments and building up your savings, you can erase much of the factors that have negatively affected your credit, which sets you up for a more secure financial future, both in your business and personal life.

Calculate Startup Costs

Once you know how much money you have to work with, calculate where you need to be. The Small Business Administration estimates that the average entrepreneur spends about $30,000 at startup.

The array of typical expenses involved in launching a business includes:

  • Rent or mortgage for the building
  • Utilities
  • Website and other digital expenses
  • Marketing, both traditional and digital
  • Legal costs of incorporating the business
  • Interest on your loans
  • Equipment and office supplies
  • Insurance, licenses, and permits
  • Technological expenses

There may be a few more. You should make a thorough list with the anticipated cost next to each item.

This will determine how much you need to save. Add a contingency of at least 10 percent to the total to make sure you have all your bases covered if an unexpected cost arises.

Determine Living Expenses

Now that you know how much you need to spend on your business, figure out how much you’ll need to live on. You might keep your day job during the initial stages of your startup, but most people find they can’t do both for long.

Eventually, you may quit your day job, even before you start to make a profit with the new operation. Many entrepreneurs go at least a year before they’re able to pay themselves.

It’s always a wise idea to calculate your living expenses before you quit your job. You may want adopt a more frugal lifestyle, because, as mentioned earlier, it can take several months of operation with a new business for the owner to see a paycheck.

This might mean cutting cable and getting used to ramen noodles at meal times, but most business owners find the adjustments are worth it if higher profit potentials could be the end result. Save enough to sustain your lifestyle for at least six months.

Once you’ve hit that mark, quit the day job and go for it!

Understand the Tax Situation

Taxes are much different for small businesses from what they are for individuals. Suddenly you don’t get your taxes removed from your paycheck automatically. You have to pay self-employment taxes, and submit quarterly payments to meet federal and state requirements.

Every January, April, June, and September, you’ll write a substantial check to the IRS for taxes on your anticipated profits. If you miss payments, you may become subject to a hefty fine from the IRS. If you haven’t saved enough for these payments, tax season will be miserable for you.

Assess Your Prospects for Success

While you’re calculating how much it may cost to make your business happen, factor in what you could potentially take home. Begin by evaluating the market, and look at the number of competitors as well as the demand for your products or services.

If you see a lot of firms shutting down in your region, it might not be the best time to launch a new business. If you perceive that you could fill a much-needed gap, however, you’re could be set for success.

The financial considerations are vital, of course, but think as well about the non-financial benefits. For example, you’ll get to be your own boss and enjoy a sense of accomplishment from creating a company from scratch.

For many entrepreneurs, that’s worth a pay cut from what they were making at their previous job. Every operation is different, and only you can determine whether or not it makes good financial sense to start a new one.

You’ll weigh your potential costs and earnings to determine whether your profits stand a decent chance of outweighing your expenses. If your answer appears to be in the affirmative, it could be time to quit your day job and start building your business!