Top 10 Marketing Books for Small Business Owners

Unlike big business owners, small business owners have the burden of taking care of every single aspect of their business – recruitment, marketing, finance, accounts, managing employees to managing vendors, and so forth. But here we focused only on books that can help you gain marketing knowledge and skills. Here are the top 10 books on marketing which we believe are helpful for new as well as established small business owners.

Book # 1: The New Rules of Marketing & PR – David Meerman Scott

In the new marketing scenario, the methods such as ad copy, etc. do not bring results for your business. With the popularity of smartphones and other devices and proliferation of the Internet, new methods, rules, etc. of marketing have evolved. This book discusses the importance and benefits of using such techniques.

David M Scott provides fresh examples of success from various industries and businesses across the world. He highlights the new tools and techniques that marketers should use to communicate with their buyers directly – Twitter, Facebook, LinkedIn and YouTube. In short, this book is a guide that offers actionable strategies and insider tips that can be implemented immediately.

Book # 2: Word of Mouth Marketing: How Smart Companies Get People Talking – Andy Sernovitz

This book by Andy Sernovitz emphasizes the use of word of mouth marketing for businesses. The book elaborates purpose of blogs, social media, viral emails, etc. – when to use them and how to make them work.

Word of mouth is an effective tool to share information quickly and easily to promote businesses. It is an effective tool that can promote your business via your customers, friends and relations.

Book # 3: Guerrilla Marketing: Easy and Inexpensive Strategies for Making Big Profits from Your Small Business – Jay Conrad Levinson

This book furnishes strategies for Internet marketing, tips on using technology like pod-casting and automated marketing, programs for targeting prospects, cultivating repeat, referral business, management lessons in the age of telecommuting and freelance employees, etc. – exclusively for small businesses.

Book # 4: Duct Tape Marketing: The World’s Most Practical Small Business Marketing Guide – John Jantsch

John Jantsch is a well-known expert in small business marketing. In the book, he discusses all the proven tools and tactics together in a step-by-step marketing system. This road map helps small business owners in knowing what they need to do to market their businesses.

Book # 5: Smarter, Faster, Cheaper: Non-Boring, Fluff-Free Strategies for Marketing and Promoting Your Business – David Siteman Garland

This book provides strategies for building, marketing and promoting businesses. These techniques are smarter, faster, cheaper and therefore save your time and money. The book is equally helpful for start-ups as well as those who are already in the market for sometime.

Book # 6: Marketing Shortcuts for the Self-Employed: Leverage Resources, Establish Online Credibility and Crush Your Competition – Patrick Schwerdtfeger

This book provides effective practical strategies and tactics – a complete tool kit to use resources sensibly, to establish online credibility. If you apply these strategies, you can get good results for your business within a brief span of time.

Book # 7: Ultimate Small Business Marketing Guide – James Stephenson

This book is an essential guide for every business owner. James Stephenson presents in this book 1500 great marketing ideas that are sure to boost your sales revenue, profits and customer loyalty and also to help you stay ahead of your competitors.

Book # 8: Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth – Stephanie Diamond

Marketing for small businesses was difficult in the past. But today, it is not the case. Web marketing enables small businesses to take advantage of marketing opportunities and win new customers.

The book ‘Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth’ focuses on different ways of marketing with a detailed strategy to put them into action. The main content of the book comprises checklists – niche, brand, story, search, content, social media tactics, traditional tactics and results. This book helps you implement web marketing strategies.

Book # 9: Likeable Social Media: How to Delight Your Customers, Create an Irresistible Brand, and Be Generally Amazing on Facebook – Dave Kerpen

This book is a key to unlock the door to new opportunities. It tells you about how to build brand awareness by engaging customers in social networking sites like Facebook, Twitter and other social media networking sites.

Book # 10: 500 Social Media Marketing Tips: Essential Advice, Hints and Strategy for Business: Facebook, Twitter, Pinterest, Google+, YouTube, Instagram, LinkedIn, and More! – Andrew Macarthy

This book is a guide to small businesses. It provides 500 social media marketing tips covering all the web’s biggest players like Facebook, Twitter, Pinterest, Google+, YouTube and others. These tips will help you build brand awareness in social media networks, attract and engage your customers and ultimately help you increase sales.

Knowledge-4-success.com is a website mainly dedicated to small businesses. It offers small business owners a wide range of insightful and informative articles covering various topics on business planning, books to read, self-development, technology, marketing and many more that could help small businesses survive and succeed in today’s competitive world.

3 Sources Where Your Small Business Can Get A Loan Today – Yes, Even Your Small Business

Now, when we talk about small business loans, we mean just that – small business loans. We are not talking about a $1 million loan to purchase some commercial real estate or $500,000 to buy some investment property. We are not talking about a $3 million credit line just to show capital on a balance sheet. And, we are not talking about a $250,000 equipment loan for a regional construction company.

We are talking about true small business credit – loans under $150,000. Capital amounts that the 22 million small businesses in this country could use at some point in time for working capital, to renovate their location, purchase inventory, marketing, meeting payroll, developing new products or to simply have the capital on hand to acquire and satisfy customers (what business is really about).

But, we have heard ad nauseam that banks are just not lending to small businesses – claiming there is too much risk in smaller firms. So, many small companies are not even applying for credit anymore out of fear of being turned down. And, as a result, we are seeing small businesses not reach for or obtaining their full potential – essentially letting profitable opportunities slip by.

However, just because banks don’t see the true value of small companies, that does not mean that others don’t – others who are willing to do what they can to fund your business.

The Benefits Of Small Business

There are some 22 million small businesses in the U.S. and they are quite the power house.

According to the Small Business and Entrepreneurship Council, small businesses;

Provide two-thirds of all new jobs in the nation.
Contribute almost 50% to our Gross Domestic Product.
Account for 97.8% of all exports. And,
Create 16.5% more innovation than larger firms.

All items that help make America the country that it is.

But, if banks think these firms are too risky, that is OK, because given the entrepreneurial spirit in this country, other financing firms (lenders) are stepping up to cover the small business loans that banks and traditional lenders will not. So now, you don’t have to be afraid of being turned down anymore.

3 Sources That Will Fund Your Small Business

1) SBA Loans: Sure, SBA loans have to go through banks – which are not lending. However, banks might not be lending for their own loan portfolios but they are lending under the SBA’s programs.

Did you know that over the last three years, the SBA has been growing the number and dollar amount of the under $150,000 loans they back – even given that banks (who originate these products) are not approving them?

From the latest SBA data;

In 2012, the SBA guaranteed 14,520 under $150,000 loans for a total loan amount of over $802 million. In 2014 (two years later), the SBA increase the number of these loans to 16,043 with a total volume of $955 million – with a down year in 2013.

Part of this increase is the fact that the SBA has reduced or waived its fees on these smaller loans. From the SBA’s website:

“The SBA determined to eliminate the fees on loans of $150,000 or less after conducting a review of the 7(a) Loan Program. As a result, a small business owner obtaining a $150,000 loan will save more than $2,500.”

Bottom line – the SBA is actually doing what it can to fund small businesses in this country – including yours.

Programs to look for:

The 7(a) program offers nearly any business loan under the sun from working capital to commercial real estate.

The CDC/504 program only focuses on real estate and equipment lending. But, if your business needs either one of these under the $150,000 amount – including renovating your location – then by all means as this is a great program.

And, the express program – which is capped at $350,000 – is a great program. Quick and easy access to needed capital.

Now, for some quick benefits of SBA loans. The SBA’s guarantee does several things:

By capping interest rates and fees, these products tend to be cheaper in the long-run for the borrower.

Lower down payment requirements – meaning that you can keep more of your own money in your own business.

Long loan terms also allow payments on these facilities to be more affordable. Just image which loan payment would be easier to make on a $100,000 loan at 10% interest. A bank may require the loan to be repaid in 36 months – making the monthly payment $3,227. While the SBA could extend the term to 6 years (72 months) making their monthly payment $1,853. The lower the payment amount, the easier it is to cover with current cash flow, making the overall loan less risky and easier to get approved.

Express programs can significantly speed up funding as some traditional business loans can take months to close while those under the express programs can be funded in the matter of weeks.

If you have been fearful of applying for a SBA loan, knock it off and go apply!

2) Alternative Lending: Alternative loans (non-bank loans) from factoring and business cash advances to revenue based loans have really picked up steam over the last 5 plus years.

These lenders are focused solely on small businesses and as such have created products that allow them to approve more loans to companies that traditional lenders will not touch – by not using old and outdated underwriting standards but by focusing more on technology.

Most alternative lenders – especially the leaders in this space – have seen their loan volumes (thus their approval rates) – increase by 150% or more year after year.

A couple of examples: According to the SBA, their largest lender – Wells Fargo – approved and funded just over $266 million in small business financing last year. However, OnDeck Capital, a leading revenue based lender, nearly doubled that amount over the same period. Further, CAN Capital claims to have funded over $800 million in 2013 – far out pacing even the top 100 SBA lenders combined.

While these loans are high-cost loans, they offer several benefits like approvals when other lenders say “no” as well as quick (in the matter of days) funding.

3) New Players: Peer-to-peer lending is know for its ability to match regular people who have extra money to lend with regular people who need to borrow. These loans are typically personal loans that can be used for nearly any purpose – like starting or growing a small business.

However, just this year, Lending Club – the leader in P2P lending – has begun to offer a true small business loan product where businesses can borrower anywhere from $15,000 to $100,000 at low rates. And, their approval and funding is not based on some standard cookie cutter formula that most businesses just do not meet but comes from regular people who listen to your story and decide for themselves the merit of your financing request.

Conclusion

Capital for your business is still available.

Don’t always believe what you hear. Sure, small business lending is tight – when compared to the hey days of the mid-2000s. But, that does not mean that you still cannot get the funding your small business needs to start, grow and succeed.

To truly know if your company is qualified for business loan all you have to do is one thing – and that is to apply. But, if you don’t apply, you will never know for sure and then all you can do is reflect on how far your business COULD have gone.

Small Business Project Management: Six Pros and Cons

Growth hungry small businesses today in the UK and indeed throughout the world face the challenge of balancing two competing objectives. Firstly, businesses must maintain and standardise current business processes in order to give your business the chance to get really good at what it does through experience curve effects. Greater business efficiency normally translates into a better customer experience and higher profits. Secondly, businesses must transform business operations in order to survive and compete in the future. How well we are able to achieve the right balance for our business will ultimately determine if we survive and go on to thrive or go the way of so many small businesses into market irrelevancy and insolvency.

You may well be thinking right now what has this got to do with project management? To understand that we first need to understand the fundamental differences between projects and day to day business operations. Whilst many of the skills required to manage your “business as usual” activities are the same as those needed to manage projects, there are some crucial differences. Amongst the most significant differences are that project work tends to be at least cross functional and often cross organisational and every project will be unique in some way rather than following the predictable pattern of business as usual. These characteristics of projects introduce opportunities and risks over and above those encountered in business as usual. In short, projects are riskier than day to day business, and therefore need a different management approach.

Projects are the means by which we introduce change in organisations. All businesses that are making any attempt to adapt to face future challenges have projects. Common examples of projects in small businesses may include setting up a company website, establishing the office in a new location, or implementing a new product but it can be any temporary activity or set of activities that have a specific output associated with it. Businesses increase their productive capacity one project at a time. Indeed, for ambitious small companies looking to grow and expand, the need to initiate the right projects and achieve the desired results is even more vital l than it is for huge national and multi-national businesses

Despite the obvious need for a project management (PM) approach, most small businesses don’t bother. This constitutes a huge missed opportunity as effective project management impacts the bottom line. For example, research by the CBP shows that project management improvement initiatives improve project performance by up to 50% for the first project and can continue for each new project if the business offers ongoing project management tools and support. We could emphasise this point further by citing the Standish Group, who in their CHAOS Report conservatively estimates that 20% of money spent on projects is wasted because companies don’t have a consistent approach to project management.

Let’s take a look at six reasons I often hear from small business owners that choose not to bother with project management and then critically address the misconceptions behind these reasons.

1. Project management practices take more time

Having a process to follow may add time to the duration of an activity. Doing something properly will almost always take a little bit more time than adopting a slapdash approach. However, if you where building a house, would you rather have a quality end result that took a little longer, or would you prefer to have it done quickly but with lots of problems? Given that poorly executed projects can be completely de-rail a small business if they go badly, doing it well is essential, and PM processes help ensure things are done well.

2. Project management eats into the cash that I need to grow my business

A common misconception is that it is hugely expensive to implement PM process. The reality is that there are many free or low-cost sources of advice, techniques, tools, templates and project management services readily available and accessible through the Internet. If done correctly, any small business can implement PM processes, techniques and tools with very little cost. The likelihood is that small business owners are already using software and other tools that can be used for project management. For example, certain email software, spreadsheets, and other common software applications offer good templates for project management, especially if used in collaboration with some of the low cost project management services available for small businesses

3. Project management requires skills that I don’t have and cannot afford to hire

Although it does require specialised skills and experience to be an accomplished project manager, these are skills that can be learned over time. To move further up the learning curve faster, it is possible to take a PM course in as little as four or five days. Most small business owners tend to possess the knowledge needed for project management, and courses such as the Prince 2 Practitioner course would build on these skills while introducing the specific theories, tools, and processes essential for project management. Whilst business owners might not emerge from a course as a project expert, they would certainly learn valuable skills to apply to their small business.

4. I don’t need the hassle or paperwork of project management.

Every entrepreneur that starts their own business will, at some point, need to do a risk assessment, a marketing campaign or apply for finance. Being knowledgeable in project management and applying associated tools such as stakeholder analysis, communication planning and risk management will not only assist in many of these tasks, but will provide your small business with a competitive edge over competitors who do not approach.

5. Project management will slow me down and I need to stay agile.

Modern PM methodologies all acknowledge the importance of a tailored approach to project management. If your project requires speed, the right methodology can enable you to move quickly. Just as important, however, it will provide you with techniques to understand whether some proposed projects are worth pursuing at all. Rushing into situations without thoroughly understanding your environment is hazardous to the health of any project and potentially to the health of the business as a whole

6. I am an expert in my industry, I don’t need project management.

Most small businesses are started by a person who already has some expertise in their industry. This is unquestionably an advantage; however, project management should still be used to convert plans into reality. The main reasons for project failure tends to be poor planning, lack of capital, and lack of management. Project management, while not a cast-iron guarantee of success, will assist the small business in mitigating some of the common risks that so often cause project failure amongst small businesses.

Even a brief look at the reasons often posited by small business owners for failing to approach projects in a systematic and different way that recognises their inherent riskiness and addresses some of the more challenging aspects of project work shows them to be of dubious merit. Without question, the quality of project outputs would be greatly enhanced and the cost of and time taken in delivering project benefits using a project methodology appropriate to the scale of the project.

Small Business Management

Running a small, start-up business has it share of ups and downs. When I launched my company nearly nine years ago, running my own small business has been both rewarding and challenging. It has enabled me to establish greater balance in my life as I have reduced the administrative burden that corporate America places on each of its employees and replaced it with more time spent on developing content for my clients.

Given the choice, running my own small business is the best option for me at this stage of my life. I can work out of my house, see my kid on a regular basis, focus my work effort on content, rather than administration, and yes golf a tad. That being said, I am asked continually by others “what is it like to be in business for yourself?” as they contemplate the leap from corporate to sole proprietorship.

While it is not for everyone, here are some of the points of consideration that one should mull over before making the jump to starting your own small business:

One Stop Shop: One of the benefits of being a small business owner is the autonomy of “calling the shots”. You are the boss and clearly can steer your company as you see fit. Many think they relish this set-up but in reality, when it comes to being the self-motivator that is required to be successful – the “guy” to go to – lots fall short. Before you read any further, ask yourself if you are cut out to be the “go to guy”. If not, you can save yourself a lot of time and frustration. Simply stay in the corporate world.

Develop A Business Plan: So, why is business planning so crucial? In a word, it provides “clarity”. Investing time to develop a plan provides precise clarification of the company vision. In addition, it provides a mechanism to gauge the results of the business and provides the foundation for future growth plans. In the long haul, it enhances the company valuation through fiscal responsibility, which provides the story of opportunity to any future investor or employee. Business planning is one-part strategy and one-part tactics – but where the sausage actually gets made is in the execution. Execution comes in the hard work necessary to carry out a plan and the accountability for your activities by tracking them.

Understand Tax Burdens: Regardless of the political rhetoric surrounding the tax code and its impact on small business, the fact of the matter is that these entities are levied with a myriad of taxes. I am shocked by how many budding entrepreneurs fail to understand the taxes that small businesses pay. My company has essentially one of the easiest business operating models that a small business can have. I invoice a few clients per month; receive a few checks a month; pay a few bills a month; and have very little inventory and/or depreciation of capital assets. Despite that, my tax return was 84 pages last year. Filing as an S-Corp, my outlay on taxes is between 25% and 39% of federal taxes; North Carolina state income taxes ranging from 6.0% to 7.5%, social security and medicare (twice as a matter of fact for employer and employee) of 15.3%, so nearly 50% of all income goes to taxes and fees.

Replicate Yourself: Given the fact that you are a one stop shop, a small business owner needs to replicate themselves wherever possible. Tools such as social media and the acceptance of telecommuting through online collaboration have enabled small business owners to be in many places at one time. In order to be successful, small business owners need to tap these tools to maximize their exposure to potential clients as well as reaching customers outside of their immediate trade area. Prior to these tools being readily available, my business was limited to the state of Illinois (where my company was originally based). Since I have utilized these tools to replicate myself, I have had clients in thirteen different states.

Navigate Third-Party Challenges: A small business owner wears many hats and relies on third-party entities for key alliances. When Go Daddy had their website and email server outage in September, roughly 5.3 million small business websites and emails were knocked out. Small business owners rely on these support companies and at times, are held captive when issues arise. While my company does not conduct a lot of commerce via my website, many small operators lost online revenue due to the outage.

Be Wary Of Scams: Lastly, where there is a small business owner, there is a criminal waiting to prey on the unsuspecting operator. In fact, this past week, I received a letter from a group claiming to represent the State of Illinois. Having been in business nearly nine years, I am keenly aware of all of the annual expenditures that my company pays. As an Illinois corporation (operating in North Carolina), I received a letter stating that I needed to send in a $125 fee for my “Annual Minutes Records Form”. I didn’t recall ever doing this, and when I contacted my CPA, he shared the following press release with me:

In short, starting and running a small business may be the best decision you may ever make. Having the facts in advance of that decision are critical to ensure that you are positioned for success. Once you fully vet your decision-making for starting your small business, the rewards can be amazing…

Barrier Busters of the Top 6 Most Common Misperceptions of Mobile Small Business Apps

The trends are very telling – mobile small business apps is the smart way to reach your audience.

The latest research shows that the primary reason small business continues to place traditional advertising such as their annual yellow page listing is because everyone else does.

With the sharp downward trends of traditional advertising it’s time to go where your audience already is. Let’s examine closer where you can improve a much higher promotional ROI with your mobile apps for small business investment.

First Steps Toward Mobile Apps for Small Business

1. Know your current ROI.

What is your yellow pages (or other print) actual ROI?

How many new customers came to you through your print listing?

What was their average purchase amount?

Does your incremental sales margins cover the cost of your print ad?

2. Start small. Take just say 10-15% of what you are already spending and pilot some of the mobile small business apps.

3. Leverage both. For example, use your yellow page listing to include a promotion that drives traffic to free Facebook business page such as opting in for a discount coupon.

The Most Commonly Perceived Barriers for Mobile Small Business Apps

Anything new and different always has initial barriers.

Let’s explore whether they are fact or fiction so that you can decide if this exciting and fast growing medium is right to consider for your business.

We’ll start with the most common perceptions.

Time – Overwhelmed business owners have little time to research new technology for mobile small business apps and consumer tastes.

Fact- Customizable templates offer turnkey solutions for even the most non-technical business owner.

Cost – Normal development costs for mobile apps can be costly. Typically $4,000 to $15,000. Don’t forget multiple technology formats and future software changes create additional costs.

Fact – Affordable options are now available for the smallest promotional budget.

Branding and Customization – Mobile app templates don’t allow me to express my unique brand, benefits and features for my business.

Fact – Menu driven templates allow you to choose which small business apps functions will engage your target audience the most. You can even choose your own logo, color, look and feel that mirrors your web site and print collateral. This custom menu approach saves you thousands of development dollars.

Technology – How could I ever keep up to be sure my mobile small business apps can be viewed on Android, Apple iOS, Blackberry and Windows smartphones. How about all the different tablets?

Fact – Exciting cloud based solutions mean all that back office technology stuff is done for you so your business apps are always easily accessible to your customers, no matter what device is in their hand. More importantly your information is secure.

ROI Tracking and Control – How do I keep up with a repeatable tracking system for my mobile apps?

Fact – You select the measurable traffic and customer conversion indicators you want to track and the system does it for you. Once you decide what you want you can maintain your system in less than 15 minutes a day.

Type of Business – My business isn’t about connecting with local mobile shoppers like restaurants and Realtors. I don’t see how mobile business apps would work for me.

Fact – If you have a product or service that provides additional value to help people with solutions they need there are mobile business apps waiting for you to connect to. Because of the widespread use of smart phones across all demographic groups (1 billion by 2016 globally!) every business has a sizable audience to reach.

Think outside your local market. With mobile apps it’s time to consider regional, national and even a global reach.

While this article emphasized smart phones don’t forget to include tablet users, another exploding mobile platform many small to mid-size businesses are not effectively connecting with.

With a world gone mobile the time is now to rid all the barriers in helping your mobile small business apps connect with growing your business.

How to Get Financing For Your Small Business

In today’s hostile economic environment, access to capital is the primary differentiating factor between those businesses which have been able to expand and gain market share versus those that have experienced enormous drops in revenue. The reason many small businesses have seen their sales and cash flow drop dramatically, many to the point of closing their doors, while many large U.S. corporations have managed to increase sales, open new retail operations, and grow earnings per share is that a small business almost always relies exclusively on traditional commercial bank financing, such as SBA loans and unsecured lines of credit, while large publicly traded corporations have access to the public markets, such as the stock market or bond market, for access to capital.

Prior to the onset of the financial crises of 2008 and the ensuing Great Recession, many of the largest U.S. commercial banks were engaging in an easy money policy and openly lending to small businesses, whose owners had good credit scores and some industry experience. Many of these business loans consisted of unsecured commercial lines of credit and installment loans that required no collateral. These loans were almost always exclusively backed by a personal guaranty from the business owner. This is why good personal credit was all that was required to virtually guarantee a business loan approval.

During this period, thousands of small business owners used these business loans and lines of credit to access the capital they needed to fund working capital needs that included payroll expenses, equipment purchases, maintenance, repairs, marketing, tax obligations, and expansion opportunities. Easy access to these capital resources allowed many small businesses to flourish and to manage cash flow needs as they arose. Yet, many business owners grew overly optimistic and many made aggressive growth forecasts and took on increasingly risky bets.

As a result, many ambitious business owners began to expand their business operations and borrowed heavily from small business loans and lines of credit, with the anticipation of being able to pay back these heavy debt loads through future growth and increased profits. As long as banks maintained this ‘easy money’ policy, asset values continued to rise, consumers continued to spend, and business owners continued to expand through the use of increased leverage. But, eventually, this party, would come to an abrupt ending.

When the financial crisis of 2008 began with the sudden collapse of Lehman Brothers, one of the oldest and most renowned banking institutions on Wall Street, a financial panic and contagion spread throughout the credit markets. The ensuing freeze of the credit markets caused the gears of the U.S. financial system to come to a grinding halt. Banks stopped lending overnight and the sudden lack of easy money which had caused asset values, especially home prices, to increase in recent years, now cause those very same asset values to plummet. As asset values imploded, commercial bank balance sheets deteriorated and stock prices collapsed. The days of easy money had ended. The party was officially over.

In the aftermath of the financial crisis, the Great Recession that followed created a vacuum in the capital markets. The very same commercial banks that had freely and easily lent money to small businesses and small business owners, now suffered from a lack of capital on their balance sheets – one that threatened their very own existence. Almost overnight, many commercial banks closed off further access to business lines of credit and called due the outstanding balances on business loans. Small businesses, which relied on the working capital from these business lines of credit, could no longer meet their cash flow needs and debt obligations. Unable to cope with a sudden and dramatic drop in sales and revenue, many small businesses failed.

Since many of these same small businesses were responsible for having created millions of jobs, every time one of these enterprises failed the unemployment rate increased. As the financial crisis deepened, commercial banks went into a tailspin that eventually threatened the collapse of the entire financial system. Although Congress and Federal Reserve Bank led a tax payer funded bailout of the entire banking system, the damage had been done. Hundreds of billions of dollars were injected into the banking system to prop up the balance sheets of what were effectively defunct institutions. Yet, during this process, no provision was ever made that required these banks to loan money out to consumers or private businesses.

Instead of using a portion of these taxpayer funds to support small businesses and avert unnecessary business failures and increased unemployment, commercial banks chose to continue to deny access to capital to thousands of small businesses and small business owners. Even after receiving a historic taxpayer funded bailout, the commercial banks embraced an ‘every man for himself’ attitude and continue to cut off access to business lines of credit and commercial loans, regardless of the credit history or timely payments on such lines and loans. Small business bankruptcies skyrocketed and high unemployment persisted.

During this same period, when small businesses were being choked into non-existence, as a result of the lack of capital which was created by commercial banks, large publicly-traded corporations managed to survive and even grow their businesses. They were mainly able to do so by issuing debt, through the bond markets, or raising equity, by issuing shares through the equity markets. While large public companies were raising hundreds of millions of dollars in fresh capital, thousands of small businesses were being put under by banks that closed off existing commercial lines of credit and refused to issue new small business loans.

Even now, in mid 2012, more than four years since the onset of the financial crisis, the vast majority of small businesses have no means of access to capital. Commercial banks continue to refuse to lend on an unsecured basis to almost all small businesses. To even have a minute chance of being approved for a small business loan or business line of credit, a small business must possess tangible collateral that a bank could easily sell for an amount equal to the value of the business loan or line of credit. Any small business without collateral has virtually no chance at attaining a loan approval, even through the SBA, without significant collateral such as equipment or inventory.

When a small business cannot demonstrate collateral to provide security for the small business loan, the commercial bank will ask for the small business owner to secure the loan with his or her own personal assets or equity, such as equity in a house or cash in a checking, savings, or retirement account, such as a 401k or IRA. This latter situation places the personal assets of the owner at risk in the event of a small business failure. Additionally, virtually all small business loans will require the business owner to have excellent personal credit and FICO scores, as well as require a personal guaranty. Finally, multiple years of financial statements, including tax returns for the business, demonstrated sustained profitability will be required in just about every small business loan application.

A failure or lack of ability to provide any of these stringent requirements will often result in an immediate denial in the application for almost all small business loans or commercial lines of credit. In many instances, denials for business loans are being issued to applicants which have provided each of these requirements. Therefore, being able to qualify with good personal credit, collateral, and strong financial statements and tax returns still does not guarantee approval of a business loan request in the post financial crisis economic climate. Access to capital for small businesses and small business owners is more difficult than ever.

As a result of this persistent capital vacuum, small businesses and small business owners have begun to seek out alternative sources of business capital and business loans. Many small business owners seeking cash flow for existing business operations or funds to finance expansion have discovered alternative business financing through the use of merchant credit card cash advance loans and small business installment loans offered by private investors. These merchant cash advance loans offer significant advantages to small businesses and small business owners when compared to traditional commercial bank loans.

Merchant cash advance loans, sometimes referred to as factoring loans, are based on the amount of average credit card volume a merchant or retail outlet, processes over a three to six month period. Any merchant or retail operator that accepts credit cards as payment from customers, including Visa, MasterCard, American Express, or Discover, is virtually guaranteed an approval for a merchant credit card advance. The total amount of cash advance that a merchant qualifies for is determined by this three to six month average and the funds are generally deposited in the business checking account of the small business within a seven to ten day period from the time of approval.

A set repayment amount is fixed and the repayment of the cash advance plus interest is predetermined at the time the advance is approved by the lender. For instance, if a merchant or retailer processes approximately $1,000 per day in credit cards from its customers, the monthly average of total credit cards processed equals $30,000. If the merchant qualifies for $30,000 for a cash advance and the factoring rate is 1.20, the total that would need to be repaid is $30,000 – plus 20% of $30,000 which equals $6,000 – for a total repayment amount of $36,000. Therefore, the merchant would receive a lump sum of $30,000 cash, deposited in the business checking account, and a total of $36,000 would need to be repaid.

The repayment is made by automatically deducting a pre-determined amount of each of the merchant’s daily future credit card sales – usually at a rate of 20% of total daily credit cards processed. Thus, the merchant does not have to write checks or send payments. The fixed percent is simply deducted from future credit sales until the total sum due of $36,000 is paid off. The advantage to this type of financing versus a commercial bank loan is that a merchant cash advance is not reported on the personal credit report of the business owner. This effectively separates the personal financial affairs of the small business owner from the financial affairs of the small business entity.

A second advantage to a merchant credit card cash advance is that an approval does not require a personal guaranty from the business owner. If the business is unable to repay the merchant cash advance loan in full, the business owner is not held personally responsible and cannot be forced to post personal collateral as security for the merchant advance. The owner removes the financial consequences that often accompany a commercial bank business loan that requires a personal guaranty and often forces business owners into personal bankruptcy in the even that their business venture fails and cannot repay the outstanding loan balance.

A third, and distinct advantage, is that a merchant credit card cash advance loan does not require any collateral as additional security for the loan. The future credit card receivables are the security for the cash advance repayment, thus no additional collateral requirements exist. Since the majority of small businesses do not have physical equipment or inventory that can be posted as collateral for a traditional bank loan, this type of financing is a phenomenal alternative for thousands of retail businesses, merchants, sole proprietorships, and online stores seeking access to capital. Such businesses would be denied automatically for a traditional business loan simply because of the lack of collateral to serve as added security for the bank or lender.

Finally, a merchant credit card advance loan approval does not depend upon the strong or perfect personal credit of the business owner. In fact, the business owner’s personal credit can be quite poor and have a low FICO score, and this will not disqualify the business from being approved for the cash advance. The business owner’s personal credit is usually checked only for the purpose of helping to determine that factoring rate at which the total loan repayment will be made. However, even a business owner with a recently discharged personal bankruptcy can qualify for a merchant credit card cash advance loan.

Since the cash funds being lent on merchant credit card advances is provided by a network of private investors, these lenders are not regulated or affected by the new capital requirements that have placed a constraint on the commercial banking industry. The merchant cash advance approvals are determined by internal underwriting guidelines developed by the private lenders in the network. Each loan application is reviewed and processed on a case-by-case basis and approvals are issued within 24 to 48 hours from receipt of a complete application, including the previous three to six months of merchant credit statements.

Dialing In on Mobile Apps for Small Business For More Fans to Become Customers

Once our mobile apps for small business are designed smartly for our industry it is time to turn our attention to our highest priorities – fans.

These are the people who may be today’s customers. With the right strategy you can soon develop tomorrow’s prospects. You can even expand geographically if it makes sense.

Target Audience – Target Needs

There are few businesses that can meet every type of group’s primary needs. Successful smaller firms often have an innate ability to attract a particular demographic group.

One of the keys to successfully using mobile apps for small business is to know the specific profile of your strongest demographic group.

Consider age, gender, income or even race, ethnic or faith considerations.

Next, are you primarily trying to reach current customers who already know your business and equip them to introduce your offerings to others?

Or, do want to engage a totally new group from the start?

Mobile apps for small business can easily be designed with loyalty and repeat business criteria.

Most mobile apps for small business primarily lead with something fun and engaging. Just be sure to keep the most dominant felt need your target audience is likely experiencing the most frequently.

Not sure what this is yet? This will be much easier to determine from your target demographic profile.

For example, a studio photographer targets early bird specials for high school juniors for the senior portrait market. Their mobile apps for small business targets busy working parents with attractive referral discounts as well.

One felt need that is often overlooked for mobile apps for small business surrounds status. Be sure to include a social forum where your fans can share what they are most proud of accomplishing.

Examples can include recognizing local sports teams and their fans championship season with a picture gallery. How about proud grandparents sharing their favorite pictures of special times with their grand kids? Don’t forget area alumni, chamber or association groups for posting professional awards and designations.

What Zip Codes Do You Want to Reach?

What is exciting about mobile apps for small business is that with a minimal budget you can literally reach anywhere in the world. Just think of the popular social media tools today that are a growing global phenomenon. Facebook is closing in on 1 billion registered users. Smart phones are forecasted to be at 1 billion users by 2016.

At the same time you can much more quickly become a local leader in your market with the right mix of mobile apps for small business.

In fact Silicon Valley recognizes this area as one of the hottest investments in the social, local, mobile market.

Here are some tips to help you grow your footprint as big as you want to.

Local – The local audience is fleeing traditional print sources such as yellow pages in droves. Instead the explosion of smart phone use makes mobile apps for small business the ideal place for your audience to find you. Be sure to really refine your unique brand and niche. The more you make it positive and interesting the more likely your new fans will want to share it with their friends.

Regional – If you have identified an unmet need with your brand and have an exceptional level of product and service why not look regionally? Do some important due diligence on the competition. Reach out to some local affiliate partners that can help you get off to a faster start.

It is often wise to have a clean and simple front door like a welcome or offer page on a regionally branded web site or landing page. Just be sure your regional brand identify is reflected throughout what you offer.

National – With e-commerce growing fast on the web more people are used to buying products from anywhere. Build on this with your mobile apps for small business. Once again 3rd party affiliates will be important to your success. Just be sure they have a strong established national reach and your product or service brings real additional value to what they already provide their current customers.

Other important factors in choosing the right mobile apps for small business include your ability to offer a unique enough product or service at the right price that will trump local offerings.

Any major change in geographic coverage requires thoughtful planning. Always make sure you can deliver what you promise with timely delivery and service. The reward of building confidence with your customers comes with equipping them with the right mobile apps for small business that they will want to share with their friends about what benefit you provided them.

Think Globally and Grow

With select products and services on the web it’s now more common for small firms to have a national and even global presence. Simply leverage that in your unique way with the right suite of mobile apps for small business. Just be sure you do the due diligence on complying with international commerce and taxation regulations.

Finding new fans you can turn into customers is made much easier with the right mobile apps for small business strategy.

5 Secrets That Will Thrust Your Small Business Into the Big League

There are 28 million small businesses in the US. The sad reality is that most of them fail within the first few years of operation. The small percentage that survive stay small forever. A select few manage to grow into huge businesses. But why them and not the others? What are the factors that enable unknowns to become household brands? One thing for sure that it takes much more than hard work, luck, and timing. Read on to see if your small business has what it takes to make the leap into the big league?

Systems

Many small business owners’ lives are chaotic due to lack of systems. Systems are hard, but they enable small businesses to scale. Systems are not glorious like sales, marketing, or research and development. Some say that systems are boring, after all, it is a back office function. Systems separate struggling small businesses from those that grow by leaps and bounds. Creating systems can be a daunting task, and for many, the prospect of taking on yet another project is out of the question. For some, it is a catch-22 situation. You may say “How do I carve out extra time from my already hectic schedule.” The correct way to think of systems is that creating them is an investment in your business.

One of the greatest challenges that small business owners face is that the they are perpetual decision makers. The owner is involved in everything from sales, customer service, research and development, bookkeeping, so an and so forth. Creating systems is the first step toward a business where not every decision is dependent on the entrepreneur. Systems allow people to plug in and go. Systems include operating procedures and manuals that can bring a new team member up to speed in no time. It is what takes small out of small business.

Franchise businesses are often more successful than independently operated ones simply because they are built on systems. The franchisee may be paying a premium in upstart costs compared to an independent business, but it makes sense for many because they don’t have to worry about developing systems. Someone already went ahead and created the necessary systems for success. When you buy a franchise you are taking a system that has been proved to work. Does it mean that you have to buy a franchise to succeed? Absolutely not, but you have to think of your own independent business as a franchise. Create procedures for everything. Don’t leave anything to guesswork.

Most small businesses do without systems, but it doesn’t mean that it’s a good idea. While you might get away with it in the beginning the lack of systems will create huge bottle necks down the road. The lack of systems will reduce your profits. Why? Because you and your employees will have to reinvent the wheel day in and day out. systems minimize the element of surprise. With systems in place your team is able to deliver consistent service. Businesses with consistently good service will outperform those with fluctuating quality service.

In addition to making your life easier, systems also increase the value of your business. Buyers want to buy businesses that are built on systems. The presence of systems tell buyers that the business doesn’t entirely rely on you. Creating systems help you create a turnkey operation, appealing to buyers. Business systems are assets that enable your company to run without you.

Scalability

Investors love highly scalable companies because they have the potential to multiply revenue with minimal incremental cost. You simply can’t substantially grow a business without cracking the scaling code. Some business are built to scale while others are forever destined for small business status. Unfortunately, many professional service providers are not scalable because they rely on personal output. So, if your goal is to build a big company avoid consulting types of businesses. A software company, on the other hand, is a highly scalable business model. Once the software product has been completed it can be sold millions of times with minimal costs. In other words, their increased revenues cost less to deliver than current revenues. What this means is that a scalable business will be able to increase the operating margin as revenue grows.

A highly scalable business requires small variable costs that the company can control. Variable cost changes with the volume of business. Fixed costs do not vary with sales. For example, for a software company fixed costs include the cost of the office location, computers, and furniture. These cannot be quickly added or liquidated. Salaries on the other hand are a variable cost since workers can be hired and fired relatively fast.

Most consulting businesses like marketing agencies are not scalable because they are unable to substantially increase their revenue without greatly increasing their variable costs. Such businesses are considered poor investments.

To build a scalable business you should start with a scalable idea. Scalable businesses have high margins. They require low support and staff expenses. Scalable businesses allow you to work on your business as opposed to working in your business. If you find yourself constantly working in your business your business is either not scalable or not yet ready to scale.

Truly scalable businesses are highly automated. Automation helps you reduce variable costs such as labor. It is at this point when scaling and systems begin to work together. If you truly want to become a market leader or dominate your industry, scalability is the only way to do it without a miracle.

Board of advisors

If your goal is rapid growth, you must have a board that you can rely on for your big audacious goals. The life of an entrepreneur can be a lonely one. Often you feel like you are all alone with all the decisions you have to make. Your board will share some of the burdens of making key decisions and it will tell the outside world that you are systematic about your business, and that you understand that you need to surround yourself with people that are smarter than you. Your board will help you with large strategic goals. It can help with your overall business plan, policy issues, financial questions, strategic partnerships, and more.

Your board shouldn’t be utilized to deal with routine tactical challenges. Don’t waste the boards time on daily employee issues or what color the chose for your new office. Rather, let your board help you with strategic advice, or by helping you with making introductions to strategic partners and recruiting talent.

Fellow entrepreneurs and business leaders make excellent board members. Before you build your board you should have a clear understanding of what areas you need help with. Ask yourself what skills do you currently lack that you need to take your business to the next level? Is it marketing, intellectual property, or finance? Whatever it is you need help with should influence the ultimate makeup of your board. You could hire a recruiter, but they are expensive. It is best if you perform the search yourself.

Your board is not a group of your closest friends. It is a group of professionals, each with a respective specialty. One might be an IP attorney while another a retired CEO. You are not looking for a group of yes men. If you build a great board, each member will have more experience than you and each will know much more than you. If you feel like the dumbest person in the room, you are on the right track.

Your board of advisors will not join you for the money, but there are costs involved. It is a good idea to compensate your advisors. At least, you should cover their expenses. Do they need to travel to your board meetings? Are there hotel and other expenses? It is also advisable to pay a per meeting fee that might be a few hundreds or a few thousand dollars. In addition to monetary compensation, you could chose to offer stock as payment.

IP (Intellectual Property)

Most small business owners care most about time and money. Some understand that IP is as good as money in the bank. It is considered one of the most important assets of some of the most valuable companies in the world. Even though IP is an intangible asset, it’s almost impossible to build a hugely successful business without it. If you are going to dominate your industry or at least be one of its key players, IP is a must. You can often read about huge business acquisition deals structured around IP. Often, IP is the reason companies are bought and sold for huge multiples.

Simply put, IP makes your company more competitive. Without IP you end up competing on price and efficiency, a tough way to build your business. When you compete through IP you often set your own price, a luxury most businesses never experience. Since innovation is the main driver in business, developing IP should be a key objective for all companies that want to enter the big league.

If you are an early stage company wanting to attract investors, your IP might be what closes the deal for you. Investors look at IP with regard to the level of income it may generate through its life. Some companies bet their futures on IP. Richard Thoman, the CEO of Xerox, declared that the “management of IP is how value added is going to be created at Xerox.” An excellent example of IP management is IBM; it managed to generate about $1 billion from IP by 1990. IP is the intangible asset that can become your free cash flow.

When IP is properly managed it can prevent your competitors from copying your products or services. You can avoid wasteful investment in R&D. IP is a revenue generating profit machine that makes your company more valuable and competitive, getting you ever so closer to market domination.

Brand

Many small business owners, wrongly believe, that brand building is reserved for giant corporations. But, building your brand should be a key focus from the very early stages of your company’s life. Your brand is another intangible asset you can’t build a market leading company without. It is your brand that may enable your business one day to avoid competing on price only. It is your brand that may one day help you dominate your market. It is through the power of your brand that you will be able to minimize your new customer acquisition costs.

Successful brands are easily recognizable. Virtually all fortune 500 companies have managed to build a strong brand image. Powerful brands instill certain images in consumers from tradition, to quality, to innovation, to any number of thoughts and feelings. As competition increases, so does the importance of building credible brands.

Brands are not born out of thin air, they are strategically developed. Building your brand is no less important than developing your sales strategy or R&D. The process of building your brand is a never ending job. There is no such thing as a finished brand. Finished brands are for businesses that are finished. You can never think of brand building as a project with a beginning and an end.

While advertising is important it is not advertising that creates your brand. Your brand is a reflection on everything that your company does. Your brand is the quality of your product or service. It is also the way you treat your customers, and even your employees. Your brand is shaped by how the world perceives you.

The value of each brand fluctuates. Your company scores big on your latest product and the value of your brand rises. One of your employees publicly ridicules one of your upset customers and your brand suffers. The good news is that for the most part, you are in charge of your brand’s destiny.

Even the worlds greatest brands are not always on an upward trajectory. Strong brands can help your company survive disasters. Recently, the Toyota brand had been plagued by millions of recalls, yet the company managed to come out of it all with an even stronger brand.

It is true that not each small business wants to become an industry leader. But, it’s also true that there are no accidental market leaders. Most small businesses are family owned and operated, and there is nothing wrong with that. You can be happy, fulfilled, and wealthy running a small business. But, if your choice is to grow your business into a true market leader you have to build your business on systems. You have to be able to crack the scaling code, so you can dramatically increase your revenue with minimal expenses. You will need trusted advisors that are smarter and more experienced than you. It will be an uphill battle, or perhaps even impossible without proper IP management. Your brand will soften the blow when you are hit with disasters. Of course, there are other factors such as luck and timing that transform small businesses into huge success stories, but the above five make for a good start.

The Small Business Myth of Job Creation

I have been a small business owner for my entire business career. Most of those small businesses have been real estate ventures of come type such as real estate brokerages, property management and owning different types of real estate. But I have also owned and been involved in insurance, restaurants, bars, garment factories, hotels, building and general contracting, convenience stores, food marts and gas stations. I was a partner in my first small business, a diner, at age 18. Even while I worked as an employee in someone else’s small business, I owned and operated several of my own at the same time.

I have only worked for one large corporation, and I hated every minute of the time spent there. I was employed for less than a month before I quit. I felt as if I were in prison. My boss was someone who had been in his position for many years, and he was counting the days so he could begin his impending retirement. Some of my co-workers were spending more time thinking up ways of not doing their jobs than actually performing their jobs. I was a nameless and powerless spoke in a wheel. When I realized that I had more authority and responsibility in my after-school jobs than in that behemoth of a business, I knew that I wanted to be my own boss at all costs even if it meant never playing with the big boys in the corner offices. So when you hear someone say a “mom and pop” operation, I am that business owner.

Some of the businesses I had were out-and-out financial disasters. Others became very lucrative. Most, though, just allowed me to make a decent living. I never started one in my garage that ended up being an Apple Computer. All of my businesses were just small operations. A few times when I felt the business was becoming too big, I either sold it or cut back. I wanted to know everything about the operation. Even if I did not possess the skills to do every job myself, I wanted to be able to at least understand what was needed to succeed in performing that particular job in my shop.

Why does someone like me decide to toil as an owner-operator and chief bottle washer than pursue a career with IBM? There are several reasons for taking the plunge into a life of entrepreneurship. When I was growing up most of my family, including my parents, were owners or employees of small businesses. My father went from owning a bar to being a bartender for someone then owning another bar again sometimes within weeks. That is why today I understand that failure is not defeat if one learns and tries again. We were a working class first generation and immigrant family looking to earn a decent living. For someone without skills or fluent in English or familiar with American customs, owning your own small business is the only way to grab for the brass ring. Small business ownership is in my genes. Even though I went to college and could have gone a different path, my personality and characteristics nudged me toward entrepreneurship.

Small business ownership is not for someone who doesn’t want to sweep the floors or carry out the trash. It is not for someone that wants to go home after their shift and leave business worries on their doorstep. It is not for someone that wants a guaranteed two week uninterrupted vacation each year or a pension or health insurance. It is not for someone who doesn’t possess a little of the dreamer in his soul. To be a successful small business owner, you need to be a romantic pragmatist, with a strong ego who can get out of bed in the morning day after day, week after week and year after year. You need to be self-motivated and confident that whatever happens, you can handle the day’s problems.

During this crazy political season, the four candidates for president and vice-president are extolling the virtue of small business people as job creators and the backbone of the United States’ middle class. They poetically tell the electorate that this policy or that policy is what is needed. It would be nice if one of them had ever owned a small business. The only person that states he had a job in a small business is Congressman Ryan. In high school, college and for a short time after graduating while waiting to be employed by the federal government, young Paul toiled at McDonalds, as a waiter and a trainer.

Mitt Romney at least made a fortune in the private sector. I guess you could call his boutique firm, Bain Capital, a small business. But I bet he never swept the floor trying to save the money on a cleaning person. He may have built that fortune but it wasn’t with the proceeds of his house being mortgaged to the hilt to allow him to pursue that dream. He had contacts and referrals from his father and mother. Governor Romney went to Harvard Business School and Law School. He worked hard and diligently for everything he accomplished. But Mitt is certainly not one of the guys from the neighborhood who made good. I doubt he can understand what it is like to be sweating out collecting what is owed to you so you can pay your employees that week.

President Obama apparently didn’t even have a job while in high school or college. Harvard and Yale is where he learned about private enterprise. He never experienced being a stock clerk at the corner hardware store or the kid that delivered the pies from the neighborhood pizzeria. His knowledge of small business comes from being a customer. He never invested his savings into opening a dry cleaner or even a law office. While his running mate, Joe Biden, might speak as if he knows how it is to work the factory line, he has been in politics his entire adult life. His greatest financial risk is if the Republicans shut down the government and he misses his paycheck.

The myth, we hear from our candidates, is that as small business people we are going to add jobs to the economy, that we are the job creators. It has and continues to be my firm belief that hiring additional employees is the last thing any smart small business person wants to do. I would much rather work harder and keep that person’s salary. I would much rather spend money on technology to be more efficient. A robot or computer program never walked out or didn’t come into work. Small businesses are not Fortune 500 companies. A small business owner has no bruised ego with not having thousands of employees under him. It might sound good to say I own a company that has 10 employees but I would rather have 5 employees and have more money in my pocket. That is the only way I will ever have a raise.

That is not to say that I don’t hire additional employees. I am not going to lose business over staffing issues. Additional employees have to have a benefit directly to me… not the macro economy of the U.S. It is true that small businesses hire the bulk of American workers. It is also true that small businesses jettison the most workers because most small businesses fail. The great thing about the United States is that failing is no barrier to trying again. Small business people get up, analyze why they failed and open a new business.

Another myth is that small businesses will expand by hiring more employees. That may be true for a very few business startups like Microsoft, but for the vast majority growth is measured in increases of one or two employees not hundreds. If I open a 24 hour a day 365 day convenience store no matter how successful it is, I will only employ so many workers. Even if I buy another store a mile away and staff it; have I increased the number of people working? The answer is probably not. Because if I hadn’t open that convenience store someone else would have. Sometimes, especially for small businesses, it really is a zero sum equation.

Our politicians need to stop making scape goats and heroes and concentrate on facts. The first fact is, Mr. President, I did build that business by my own ingenuity and hard work. However, Mr. Romney, I needed to count on the government to provide security, infrastructure and the rule of law to be successful. When I opened my first business more than 40 years ago, I never worried what I would pay in taxes if successful, I only worried about success. The tax rate never stopped me from going into business. Going into business is what I do just like an actor acts and a clergyman prays. What I so need of my government is consistency in laws, and tax rates and regulation. For my planning purposes I want to know what I can expect, today, tomorrow and next year.

I don’t mind being regulated. I’ve been a New York City property owner and building manager, I have lived with the stupidity of rent regulation. I’ve succeeded and prospered in spite of it. What I want to see is smart regulation. Any regulation or law that requires thousands of pages to explain its meaning becomes meaningless. Simplicity is the key to enforcement. It is not productive for the economy to have lobbyists, congressional staffers and attorneys writing arcane laws and regulations. That only ends up employing people in those nonproductive occupations. At the end of the day, it adds no new products to the American economy.

I think most Americans and the majority of small business owners agree with my sentiments. I would like my elected officials to reflect the American electorate. Perhaps we need fewer graduates of Harvard, fewer lawyers and career politicians running for office. Harry Truman was a farmer, a citizen soldier and a failed small business man before turning to elected offices. A little practical world experience would make for a better president.

Settle Your Small Business Taxes With a Peer-To-Peer Loan

Like the saying goes, “The only things certain in life are death and taxes.” Unfortunately, small businesses know this saying all too well.

Unlike employees who look forward to their refund every April, small businesses loath the approaching spring, knowing they will have to pay Uncle Sam its share of their profits. Each year, small businesses struggling to turn a profit in an increasingly competitive business environment must pay taxes in order to keep their doors open.

With dwindling profit margins and tightened lending restrictions, however, many small business owners find themselves between a rock and a hard place when it comes time to pay the tax man. Although a business may have steady sales and revenue or thousands of dollars in inventory, banks and traditional lending institutions simply aren’t handing out small business loans like they were in year’s past, leaving small business owners with few funding options to pay their tax bill.

Thankfully, peer-to-peer lending, or social lending, has solved this growing dilemma. These modern social lending marketplaces have connected millions of borrowers with individual investors. Borrowers receive low-interest, fixed-rate loans that can be paid off in two to five years, while investors are able to benefit from decent returns in an economy with sinking bond and savings rates.

Thus, it’s a win-win situation for both small business owners in need of immediate funding and investors looking to make a small profit while helping others.

From Desperation to Exultation: One Man’s Venture into Peer-to-Peer Lending

John Mitchell is an Ohio-based small business owner who found himself in such a predicament just last year. As the owner of the only hardware store in a small town, John’s store flourished the first few years it was open.

After getting his inventory levels, pricing models, and management just right, he decided to expand his business by opening a second location in a neighboring town. John sunk all of his profits into opening his new store, which meant he was short on funds come tax time. However, knowing the success of his business, he thought he would simply get a small loan from the bank that housed his accounts and provided him with the initial loan he used to launch his business four years earlier.

Unfortunately, he witnessed first-hand the effect the recession has had on lending regulations as the banker he’s known for years denied his loan application. If he couldn’t get a loan there, where could he?

On the brink of despair, John took to the Internet to research loan options. After digging through forums and trying a few different searches, he ran across peer-to-peer lending. In less than a week after going through the quick and easy application process, he received a personal loan at a low rate for the amount he needed. A week later, John sent a check for the full amount to the IRS, and less than eight months later, he was able to pay off the loan with the profits from his new store!

If you are a small business owner who has found yourself in a similar circumstance, peer-to-peer lending can do the same for you as well, but how does peer-to-peer lending work?

How Peer-to-Peer Lending Works

A breakthrough product or service emerges every generation, and in the early 2000’s, the emerging breakthrough was social networking. From helping in the organization of overthrowing political regimes to staying in touch with friends and family members, social networking has had a profound effect on our daily lives. Now, it’s changing the small business financing landscape as well.

Peer-to-peer lending is a modern social networking solution for small businesses in search of a way of securing alternative funding. The goal of peer-to-peer lending sites, such as Prosper and Lending Club, is simply to connect individual investors with those in need of funding, and these sites are becoming an increasingly useful tool for small business owners who are unable to secure funding from traditional lenders.

Rather than jumping through endless hoops only to be denied by a bank, small businesses can receive funding via peer-to-peer lending in no time at all by following three simple steps:

Step 1: Create a Profile and Loan Listing

There are a myriad of peer-to-peer lending networks to choose from, so your first step is to research the best ones and create a profile and loan listing on the site you choose. The loan listing is essentially a cost-free ad that indicates the amount of money you need and your desired interest rate.

Step 2: Let the Bidding Process Begin

After your listing goes live, investors have the opportunity to begin bidding on your listing, providing you with the interest rate and loan amount they are willing to offer you. A major advantage of this bidding process is the fact that it can intensify as more and more lenders begin competing for your business.

When this happens, interest rates will begin dropping, potentially allowing you to obtain a much lower interest rate than you expected. It’s important to note, however, that your credit score, income, and debt-to-income ratio plays a role in the lending decision process.

Step 3: Funding and Paying Back the Loan

Another benefit of borrowing from peer-to-peer lenders is that you can accept several bids to receive your requested loan amount. For instance, if you ask for $10,000 in your loan listing to pay your business taxes, you can acquire the amount from collecting $2,000 from five different borrowers.

This makes it much easier for borrowers to receive the money they need. However, instead of making five separate payments, you would only make one payment, because the peer-to-peer lending site is responsible for dispersing the money to lenders until loans are repaid in full. They simply charge a small fee for this service.

With increased lending regulations, banks are tightening their purse strings more than ever before, making it much more difficult for small businesses to receive the funding they need to expand their business or even pay their taxes. Thankfully, peer-to-peer lending has proven to be a worthy competitor in the small business lending marketplace. If you are a small business owner and find yourself unable to pay your taxes as April approaches, or backed taxes for that matter, a peer-to-peer loan is an ideal option.

The need for a viable way of borrowing money to pay small business taxes is very important to many business owners today, including the author. The small business owners in search of a reasonable financial solution for effectively meeting their tax debt obligations should take a hard look at peer-to-peer loans as a cost-effective way to resolve this pressing debt issue. Readers interested in learning more about P2P lending and how it can help confront the complicated issues surrounding small business debt tax can read here [http://diysociallending.com] about the benefits of Peer-to-Peer personal loans.