Four Reasons Why Small Business Fail To Plan and Why They Need To Think Again

It is so widely acknowledged that a robust business plan is one of the key ingredients in small business success, it seems remarkable that anyone serious about their business could considerable it optional. For example, Business Link say, “It is essential to have a realistic, working business plan when you’re starting up a business”. A recent survey showed that small businesses were twice as likely to be successful with a written business plan as compared with those without one. The Times in their annual round up of 100 up and coming UK businesses suggest that “poor business planning” is a key reason for failure. Indeed, it’s almost impossible to find an authority that would advocate the opposite idea, a clear signal that this idea is accepted wisdom. Despite this, a recent survey shows that two thirds of small business owners run their businesses on gut instinct alone.

I had a very interesting discussion about this a couple of days ago with a good friend of mine who has run several successful small businesses in which he posited the idea of a “planning gene”. He felt that the only possible explanation for the lack of proper planning in small business was genetic.

According to his theory, the majority of people are born without the “planning gene” and this explains why so many people don’t have any written business plan, despite the overwhelming evidence of a high correlation between a robust and vigorously implemented business plan and business success. The majority of us are simply not biologically and genetically wired to plan.

This is certainly one explanation, although I have to say I have a few reservations as to the validity of his theory. I talk with small business owners about planning every day. I’m part of a small business myself. I’ve owned several small businesses over the last ten years each with varying degrees of success. In all those conversations and all that experience, this was the first (semi) serious discussion I’d had about the planning gene.

If I was to aggregate the results of the conversations I have had with actual and prospective customers on this topic, four distinctive strands emerge explaining why small business owners fail to plan. Whilst I have heard a few other explanations for the lack of effective small business planning, I am treating these as outliers and focusing on the most significant.

I’m Too Busy To Plan – More often than not, the small business owners we talk to tell us that proper planning is a luxury that only big business can afford. For them, business planning, if done at all, was a one-time event that produced a document for a bank manager or investor which is now gathering dust in the furthest recesses of some rarely opened filing cabinet. There just aren’t enough hours in the day and if forced to choose, they would do the real, physical work and leave the mental work undone, which seems to be the poor relation at best, if it is even dignified with the status of work at all.

Traditional Planning Doesn’t Work – The “I’m too busy to plan” excuse is often supplemented with this one. I’ve heard the stories of the most legendary construction overrun of all time, The Sydney Opera House, originally estimated to be completed in 1963 for $7 million, and finally completed in 1973 for $102 million, more times than I can remember. Sometimes, this idea is backed up with some actual research, such as the fascinating study by several eminent psychologists of what has been called the “planning fallacy”. It seems that some small business owners genuinely believe that mental work and planning is a bit of a con with no traction on physical reality.

My Business Is Doing Fine Without Detailed Planning – A minority of small business owners we speak to are in the privileged position of being able to say they’ve done pretty well without a plan. Why should they invest time and resources into something they don’t appear to have missed?

Planning Is Futile In A Chaotic World – Every once in a while, we hear how deluded we are to believe that the world can be shaped by our hopes and actions. This philosophical objection to planning is perhaps my favourite. It takes ammunition from a serious debate about the fundamental nature of the universe and uses it to defend what almost always is either uncertainty about how to plan effectively or simple pessimism. This is different from the idea that planning doesn’t work as these business owners have never even tried to form a coherent plan, but have just decided to do the best they can and hope that they get lucky as they are knocked hither and thither like a steel ball in the pinball machine of life.

As with all of the most dangerous excuses, there is a kernel of truth in each of these ideas and I sympathise with those who have allowed themselves to be seduced into either abandoning or failing to adopt the habit of business planning. Most small business owners feel the same dread in relation to business planning as they do to visits to the dentist, so it’s unsurprising that so many simply don’t bother. However, by turning their backs completely on planning, they are in danger of throwing the baby out with the bathwater. Taking each idea outlined above in turn, I’ll attempt to show why business planning is critical, not just despite that reason but precisely because of that reason.

I’m Too Busy Not To Plan – Time is the scarcest resource we have and it is natural that we would want to spend it doing those things that we believe will have the greatest impact. Of course, we want to spend most of our time producing, but we should also invest at least some time into developing our productive capacity. As Stephen Covey pointed out in his seminal work, “The Seven Habits of Highly Effective People”, we should never be too busy sawing to sharpen a blunted saw. Planning is one of the highest leverage activities we can engage in, as when done effectively it enhances the productive capacity of small businesses, enabling them to do more with less. Nothing could be a bigger waste of precious time than to find out too late that we have been using blunt tools in pursuit of our business goals.

If we as small business owners weren’t so busy and time wasn’t so scarce, then we wouldn’t have to make choices about what we did with our time and resources. We could simply pursue every opportunity which presented itself. However, for the busy entrepreneur, the decision to do one thing always has the opportunity cost of not being able to do something else. How can we be certain that our business is going where we want it to go without pausing regularly, scanning the horizon and making sure not only that we are on track but also making sure that we still want to get to where we are heading? I believe more time is wasted in the single-minded pursuit of opportunities that are not right than is wasted by over thinking the opportunity of a lifetime.

In short, small business owners are extremely busy and their time is precious. So much so that to waste it doing the wrong things with the wrong tools would be tragic. Small business owners that cannot afford the luxury of making expensive mistakes simply must regularly sharpen the saw through continuous business planning.

Traditional Planning Doesn’t Work, So We Need a New Approach That Does – There are some fairly large question marks over the effectiveness of traditional business planning techniques. In an age where business models are becoming obsolete in months rather than years, a business plan projecting five years into the future cannot be viewed as gospel. Nobody has a crystal ball and if they did, they probably wouldn’t be writing business plans but using their remarkable predictive powers to some more profitable end.

Dwight D Eisenhower said “plans are useless, but planning is essential”. Whilst producing a document called a business plan is far from useless, the real value lies in the process by which the plan is created in the first place. If this process can be kept alive in a business then the dangers associated with traditional planning can be minimised or avoided all together. In an environment of continuous business planning, small businesses can be flexible and adaptive to the inevitable changes and challenges they will face. Rather than quickly becoming obsolete, their plan will simply evolve with the changing circumstances.

Accepting that the plan is a living thing that will evolve necessitates a change of approach to business planning. An effective business plan is the response to the repeated asking of the questions what, why, how, who and how much. It is not a 20 – 30 page form to fill in for the benefit of a bank manager or some venture capitalist, who will probably never fully read it. A business plan should help you, not hinder you, in doing business. If traditional business planning doesn’t work for you, it’s time to embrace the new paradigm of continuous business planning.

My Business Could Do Even Better With Effective Planning – If you are one of the lucky few whose business has thrived despite an absence of traditional business planning, then I say a sincere well done. I hope that you can say the same thing in five years time.

Business life expectancy in Britain and across Europe and indeed the world are in rapid decline. A study done at the end of the eighties and then again as we marched into the new Millennium showed that life expectancy had more than halved for British businesses in those ten years, from an average of 9.7 years to 4.1 years. Just because a company once enjoyed market leadership does not mean that its future is assured. Many high street institutions have fallen victim to the recent recession. Five years ago it was inconceivable that UK retail institutions like Clinton Cards, Game, Borders, Barratts, T J Hughes, Habitat, Focus DIY, Oddbins, Ethel Austin, Principles, Allied Carpets, Woolworths, MFI and Zavvi/Virgin Megastore would all be either out of business or teetering on the brink of oblivion in 2012. Yet that is exactly what has transpired.

Any business from the smallest to the greatest is not impervious to the winds of change. A new competitor, a technological breakthrough, new laws or simply changes in fashion and consumer preference can all re-write the future of a company regardless of how bright that future once seemed. It is precisely because these risks exist that business planning is critical. To survive in business is extremely hard, but failing to effectively plan for the future or adapt to current realities surely makes it impossible and failure inevitable.

Of course, it is not necessarily the absence of plans that did for these companies but the quality of their plans and most especially the quality of their implementation. Even a poor plan vigorously executed is preferable to the finest planning and research left to rot in a drawer. Continuous business planning is effective business planning because it emphasizes implementation and regular reviews of real results as part of what should be a continual process of improving company performance rather than simply attempting to predict the future and wringing our hands when our prophecy fails to come true. We believe, like Peter Drucker, that the best way to predict the future is to create it.

Planning Is Essential In A Chaotic World – We sometimes feel small and insignificant as we try against all odds to translate our dreams into business reality. It’s easy to feel all at sea when we consider some of the challenges we face. However, whilst it is true that we cannot control the direction of the wind, we can adjust our sails and change the direction of the rudder. Difficult and challenging circumstances may come in our lives, but we can control the outcome of these circumstances by choosing which path to take.

The truth is that we are fundamentally achievement orientated as human beings. When this is taken away, we lose much of the energy and motivation that propels us forward. There have been numerous studies carried out on life expectancy rates after retirement, which show that when clearly defined goals and daily action moving in the direction of those goals are removed from our lives, the result is literally fatal. The individuals studied who failed to replace their career goals with a new focus for their retirement simply shriveled up and died. The implications for small business owners are clear. Those business owners with clear goals who take action daily that propels them in the direction of their goals are far more likely to thrive and survive than those who take any old goal that comes along or move from day to day with no defined objective other than survival.

It seems to me that precisely because life is so chaotic and challenging that effective planning is essential. Without continuous business planning, our businesses and the small business owners that work in them may find that bit by bit they are atrophying and on their way to becoming another business failure statistic.

There undoubtedly exists an antipathy for business planning felt by many small business owners. Clearly, this cannot be fully explained by the lack of a “planning gene”, but it equally cannot be fully justified by the reasons most commonly put forward by small business owners to not engage in the business planning process. These reasons must be critically re-evaluated and a commitment made to a continual and never ending process of improving the condition of their small businesses. Without such a commitment, the future for small businesses in the UK is uncertain.

21 Top Marketing Mistakes Small Business Owners Make

The analogy between marketing and a business is similar to the relationship of body and food. Marketing is the heart of the business. Every business is different so each business has to offer marketing and development, which fits each unique business’s need. There are many ways of developing and marketing for any business, but first let’s find the true concept and definition of marketing.

Marketing definition:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.

1- Thinking advertising is marketing:

The biggest mistake most of the business owners make is to think advertising and spending money is the only marketing way exist. This group only focuses on advertising, which when the desire result is not achieved at the end of the month, they complain of how much money they wasted away. Advertisement is merely one of many ways of marketing.

2- You don’t enjoy what you do:

As stated above Marketing has many ways and approaches. The main marketing for your business is to love what you do. Nothing is better than your “Love what you do” attitude since it brings out your creativity, shows your talent and tells everyone how devoted you are to your business. Your daily positive attitude defines the successful future of your business. The love of your business construe in your daily interaction with new clients, employee’s moral and making important and effective marketing decisions. To be a good marketer for your business, first rule is your love for what you do.

3- Don’t have a good business plan:

What is business plan?

“A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement”.

Having a business plan is like having a map. Many businesses start their business ignoring this very effective tool and get lost in the middle of the road. Every business plan states the exact details of the business’s concept and outlines clearly the marketing strategies, profit and loss, demographic, place of business, finances and targeted niche market. In order to make a solid business plan:

A) Know your business inside and out

Knowledge of your business is important to know the answer to all the categories of business plan. If you do not know the concept of your product or service, business plan and the pillar of your business does not exist.

B) Study, analyze and scrutinize

When you know the back and forth of every detail in your business, you can access all the required information needed to project your business in a business plan. In order to access all this information you need to study, analyze and scrutinize every file and information in libraries, city records and valid informative site on the Internet.

C) Print it and have it accessible

When you put all the info together and created your fully detailed business plan, print a copy and keep a file handy and accessible.

Your projected analysis for the business works as a map to your success. Don’t drive to an unknown destination, not having a map on hand.

4- Don’t have any plans:

Marketing and developing its strategy is vital for every business. Marketing works as fertilizer to boost the lawn of your business. Even more importantly, marketing acts like sun to shed light and direction to your business for finding leads for the potential clients. Marketing is like having your open sign on in the dark street. I think I emphasized enough and you understood how important marketing is for any business, small or large.

5- Not analyzing the market for correct pricing.

Every business offers products or services. Then producing and providing the products and services involves certain cost and fees. Setting the price according to the market is very important and cause for a major failure for small businesses if done without market awareness. The root and source to find a perfect price is your business plan. It is necessary for every small business owner to investigate:

A) The demographic income of the targeted niche and audience:

The business plan states the average income of the targeted audience and the niche market. Set prices based on the factual statistic and spending ability of potential clients.

B) Market needs and economy balance:

An involved business owner is always aware of the market needs and the economy balance. Based on your niche market, be on top of the factors of change in economy that can impact your client’s ability to spend. If you deal with bankers and investors, keep up with stock market news and its daily changes and adjust your prices regularly.

C) Competitive market prices:

A business person is always on a lookout for its competitors and is aware of their side of story. It is necessary to know your competitors and adjust your prices based on their offering and similar services.

D) Demand of the product or service:

Investigate the demand before putting the price tag on your product and service. You can find this information through the data in your business plan. Balance your prices based on the market demands;

If you projecting a good volume of sale, price it lower than competitors.
If the demand is lower and the project of volume is slow, price higher to accommodate the distance between each sale.

E) Uniqueness of the product or service:

A unique product and service in the market attracts more attention. Price it higher than other regular products.

F) Acceptable profit margin range in the area:

Profit margin’s acceptability is always decided based on the market and economy as well as the market demand for the product.

Consider a big city. If you have a product or service that is unique, but projecting a high volume of demand, based on the economy and your targeted niche, the profit margin should set higher than normal.
In a small community, If you are investing on a product with limited demand, go conservative on your profit margin.

6- Not having any budget

Many small business owners make a big mistake and do not place any budget for daily, monthly or yearly marketing plans. Whatever the profit and loss data projects on your business, it must include certain amount of budget for marketing plans that are realistic and traceable. Unfortunately small business owners mostly have no budget and deduct the cost of marketing plans from their profit data. This particular budget assignment is very effective in the future of business growth. Increase the marketing budget with business slowly reaching the peak of demands for your product and services.

7- Spending money on non-traceable ads

As the market changes, so as the marketing plan, pricing and target audience. Invest and assign marketing plans that are traceable. Traceable marketing means follow-up charts to analyze data.

The worst mistake of marketing is to spend money on a plan that cannot be traced and measured. This marketing mistake is wasting money or in other terms is shooting in the dark.

8- Do not trace the result

Many businesses have assigned a budget for the traceable marketing plan but sadly do not follow-up on the result and do not trace it. This is just the same as spending wasteful money on non-traceable.

9- Think in a closed box:

Each business is unique. Even if the business offers a same product as other business few streets down the road, the two are still unique and different in many ways. The biggest mistake small business owners make is to follow other businesses’ footsteps. Marketing and its strategies should not have any limitation. Think of marketing out side of the box and do not limit the marketing strategies to a cliché approach others do. Be creative and design a plan unique and suitable for the very business.

10- Don’t know what plans to set:

Everyone is familiar with the word marketing. The first conversation when opening a new enterprise is “Lets do marketing!” But do we all really realize the core meaning of it?

I compare marketing strategies and its unique approach to our fingerprints, which is distinctive. Many understand the word marketing but are not familiar with how to set the strategy and the game planning related to the business.

It is a big mistake not knowing how to set the strategies while being fully aware of marketing important role in the business. Since setting the marketing plan requires research, analysis and knowledge of he market, hire a professional researcher and marketer to create the necessary game plan.

11- Assuming the product or service will sell itself:

One of the biggest marketing mistakes is to assume your product or service is going to sell itself. This assumption is misleadingly translating marketing into advertisement. I have met many small business owners who declared that quote-to-quote “I don’t spend money on the marketing, to me I only rely on word of mouth”.

Word Of Mouth is the strongest way of marketing. So what this small business owner was under impression that he does not do any marketing because he thought marketing was spending money on advertisement. So he was counting on the most effective marketing, the word of mouth. Word of mouth consists of two factors:

A) Product or service:

People have to like the product or service to continue talk about it and refer their friends.

B) Customer service

Another major difference between businesses is the level of customer service. I didn’t say the level of good or bad. What I mean is each business owner or employee that has been fully trained to look after a client as a customer service has his or her own charm. This specific charisma and character make the business unique to others and is a major influence for word of mouth.

Let me give you an example of how powerful the word of mouth and spreading the word is to any business. While ago, I worked as a junior manager in an up-scale restaurant. The general manager identified his target niche as young professionals in downtown area. So he hand-picked few employees in the same age range as the targeted niche to use public transportation and talk about the restaurant among each other. His decision, although was not directly traceable, but yet had an amazing effect. How did I analyse the result and witness the proof?

The restaurant offered comment cards, asking “How you hear about us?” and many without any surprise responded via word of mouth in public transportation.

Even if the business owner is avoiding any advertisement cost, they still rely on spread of word about their service and product via the community and the word of mouth marketing.

12- Don’t know the target audience:

To plan and set a marketing strategy, any small business has to have a direct target niche as an audience. Analyze everything about the niche audience. The list certainly is not limited to the audience’s income, age, interest ratio to the product, sex, education, commitment ratio and their loyalty.

13- Don’t know the competition:

The best way to analyze the market is to get familiar with the competition and rivals. It might sound cliché but as the Godfather movie suggested, “Keep you enemy close”. Or if I may rephrase ” Keep your competition close and be aware of their moves”.

This is especially important for small business owners in small community to have a good relationship with other competition. To share my experience in the same restaurant I used to manage, the general manager always encouraged me to go to other local restaurants and dine. He even offered to pay the bill. All I had to do was to analyze everything from the greeting, staff knowledge, manager’s presence, client’s relation and the overall quality. My report helped him to understand his competition strengths and weaknesses.

14- Hiring wrong person to do marketing:

Many small business owners out of desperation and lack of networking, hire wrong people to do their marketing. As we said earlier, every business has unique offering and services so must focus on unique planning for its marketing strategies.

It is the small business owner’s responsibility to hire a professional firm who can relate to the business’s need and offerings.

A good reputable marketing firm whose focus is to promote books and authors in not a good fit for a small local bistro.

15- Underestimate the value of existing clients:

A good businessperson always knows the value of the existing clients;

The best way of follow-up with the existing clients is to create informative data about them. Many small business owners lack this very important source of information. To avoid this mistake, keep a record of every client’s information. If the information requires certain personal data, keep it in a safe and secure place.

A client whom already has experienced your product and service knows about the quality of it. Always do follow-up calls and do not be afraid to ask how they liked the product or service. Even if the client responses back with dissatisfaction is a perfect opportunity for the business owner to fix the problem.

Gain a new customer is costly. I am gong to explain this by an example:

“Nancy enters Joe’s café because of a coupon she found in a local magazine offering 10% discount. She solely relies on a menu attraction, prices, quality of the food and customer service. Joe the owner spent lots of money and time for marketing after analyzing the community needs, price affordability and the targeted niche market.

Joe has three ways to collect emails or phone calls for follow back:

A) placing a note pad in front of the cashier’s desk asking new clients to write email or contact info for special promos.

B) Placing a glass bowl by the cashier’s desk offering the weekly draw of free lunch from dropped business cards.

C) Offering comment cards and asking for contact info.

Joe has three ways to accumulate client’s information and follow-up with them. So everyday he goes through all the information and creates a secure data.

Nancy finds the place charming and the food great but not a good customer service. It is Joe’s responsibility to follow-up and gain back Nancy’s business once again to avoid spending all the money and time all over to attract another new client.”

Existing clients are the perfect way to promote every business. Send special offering, communicate with them and even ask them to share your business with their friends. Respect the boundary between proper communication and spamming.

16- Not offering giveaways and novelty items:

One of the most effective ways to attract clients is to giveaway your product or service for free.

A) Test run: Offer a monthly test run of your product and service and giveaway a free sampler. People love to get samplers. It gives them information about your business and its quality.

B) Propose monthly contest: Proffer a monthly contest and giveaway prizes based on participating in your business. People love contest and it excites them to know they can win something. If it didn’t work, Lottery and Casinos didn’t exist.

C) Give out novelties like mugs, pen, key chain, notepad, calculator, shirts and hats with the business information printed on it.

17-Wrong niche:

As a business owner recognizing correct niche market target is necessary for further marketing planning and budget assignment.

To explain this better lets picture a shoe store that carries high-end fashion shoes for women. The first thing that comes into the mind, high-end fashion niche is only younger generation and teenagers. A good business owner will explore the possibilities to analyze further more into the data from business plan to understand the local community needs.

If selling high-end, then its higher quality and higher prices. A teenager on a student living budget cannot be a direct and only target niche. So the correct niche is a professional and higher income spender who is more interested in quality without considering the price tag.

This example clears how a business owner distinguishes the certain target audience by analyzing the local market data from business plan. With enough knowledge in market research, the business owner avoids wasting the marketing budget on a wrong niche.

18-Not participating in community:

“Every big things has small beginning”

Regardless of the geographical target of any business, whether global or corner store in a small village, it all begins with local community.

Who are the first people you would share news with in your everyday life? Family and friends are the strongest link to marketing and spreading the word. It starts from friends and family and spreads to their friends and family and before you know it, is a snowball effect and cumulative.

The local community is the test run before spending a time and money on a dead-end marketing plan.

19- Do not own an informative and representative website:

Internet plays a great deal of connection in people’s life everyday. Many customers use the Internet to search and review local businesses. No matter what kind of business, it requires an informative and user-friendly website. A good business website is a gateway that welcomes customers to enter and experience the business offering.

Many small business owners making mistake and assume their line of business does not need a website. With daily development of technology, people get more connected via Internet and do their shopping online. Search engines get stronger everyday by developing codes and programs to bring up the exact and precise inquiry.

20- Do not appreciate the value of the Internet:

With a vastly growing competition on the Internet and the increase in demand for business development, simply having a website that offer information is not enough. Popular search engines are only producing websites in their search result, which have better ranking. Many small business owners simply making a big mistake by avoiding the presence on the Internet and ignore the growing highway to success. Every business must have an informative website and optimizes the business on search engines, social media and popular relevant forums. This subject of Internet marketing and its highly effective marketing plans is a lot of subject to cover in this article.

21- Expecting too much in short time:

Do not expect too much in a short time. There is always cause and effect but it requires proper time period to produce best effect. A seed needs time to open the surface and grow to a strong tree. But it requires water and good fertilization. Marketing is the water and fertilization to the business. It takes time for a good marketing plan to spread the roots and make a strong holding ground.

“Rome was not built in a day”

It took generations and much hard work of skilled engineers, planning and proper budgeting to build the mega city of Rome.

Can you hold a roof without building the pillars and the walls?

Marketing is the pillar of the business. Without marketing and planning, business lacks a foundation.

Many business owners place the marketing and development in their last page when the business opens its door to the public. Marketing starts when the business idea takes shape. It begins before the business is even called a business. Avoid making marketing mistake and start your marketing with knowledge and strategy.

Marketing is the heart of every business and keeps the health of the company in balance. But treat the heart right. Eating healthy, exercise and lack of stress are keeping the heart healthy to beat the life into our body. Practicing and implementing the right marketing strategies keep the business in shape. Don’t make mistake if you had a good run. Many small business owners get too excited for this temporary beat of recognition and look at it as everlasting. To keep a good balance in business, marketing and planning should match the flow of the business. Increase your strategies as your business grows and increases.

Marketing is the pillar of every business and is the only foundation to go further, faster. Imagine a boat with no engine crossing the Atlantic. The marketing to a business resembles the engine to a boat. The planning and strategy of the marketing to the business is the safety gear of the boat that keeps it balance and not to tip over.

7 Things Successful Small Business Owners Do

If you’re stuck wondering how to be a successful small business owner, know this: running a small business often simply means making good use of successful small business ideas. Successful small business owners face many ups and downs throughout their work. They know that small business ideas cannot turn out successful unless they use the proper approach and strategies.

If you want to be one of the few successful small business owners, remember that having a good strategy is crucial. Without the right strategy and a proper approach, you are not likely to achieve your goal.

Some small business owners manage to overcome their everyday challenges, while others seem to give up after a while. So, let’s find out what successful small business owners do differently from the unsuccessful ones. Let’s turn their experience into your success through your small business ideas.

1. MAKE ANNUAL REVISIONS OF YOUR BUSINESS PLAN AND BUDGET

Every business goes through changes every now and then, including your small business. For this reason, your business plan and budget should be somewhat flexible to bear such changes along with your business goals. Without revising your business plan and budget, you shouldn’t expect your business to flourish and expand.

The flexibility of your business plan will help you avoid and overcome the eventual unpleasant surprises on the market. Also, such flexibility will give you some time to adjust to certain changes you may experience on your way.

Every business experiences both success and failure points each year. In order to detect and estimate these points, you should revise your budget and business plan every year. While revising, you should check if you are still going in the right direction. If not, you may need to make some changes and adjustments to achieve better results in the upcoming period.

Successful small business owners don’t hesitate to reallocate funds, if that is what it takes to achieve success. In order to increase profits, after they conduct a business revision, smart business owners define and implement the necessary changes immediately.

2. UPDATE YOUR OFFER AND ADD VALUE TO IT

People change, as do their needs and habits. As soon as you notice that you aren’t selling as much as you used to sell before, it is time to make changes. If people aren’t purchasing what you currently have to offer, that’s a clear hint that something needs to be done.

A simple price cut may be the first thing that comes to your mind. As much as lower prices may seem more appealing to your customers, they also point to a devaluation of what you offer. Devaluation of your products or services is never a good thing, so try doing just the opposite – add value to your offers.

The best way to update and add value to your products and services is by developing new offers. If possible, try to offer something completely new to your customers. You could offer product bundles, training programs and workshops, and so on.

3. DARE TO BE DIFFERENT

Most successful small business owners believe in daring to be different. They know their target consumers. Trying to target everyone and anyone as a consumer will get you nowhere fast. Instead of trying to make products for the masses, focus on a clearly targeted community and grow with it. Once you target your consumers, it is easy to understand their needs.

Understanding your consumers is the secret to a successful business. When you know their needs, you can modify your products and services in order to satisfy them. Satisfied consumers will not only become your regulars, but they will also spread the word about what you offer. This may become the best marketing strategy for your business.

Spreading the word about your products or services is called a referral marketing strategy. It’s been proven that most of the faster growing small businesses turn to this kind of marketing rather than relying on traditional advertising.

4. KNOW YOUR COMPETITION

Successful small business owners know their competition. They know that keeping an eye on the competitors and understanding their policy and pricing is crucial to the business. It is wise to consider your direct competitors in your area, as well as indirect competitors.

A direct competitor offers the same primary services to the same target group as you, and they are easy to follow on the market. However, an indirect competitor company offers the same or similar products as a segment of a wider product or service offering.

In some cases, the indirect competitor may offer a product that is an applicable substitute for the original product. Successful small business owners know how to position their company against the indirect competitors. They take both types of competing companies seriously and they account for them in their annual business plan.

5. HIRE THE RIGHT PEOPLE

Even though hiring the right people for your business sounds obvious, it can be a really tough job for small business owners. Also, not hiring the right people could be a huge downfall for a small company. People who don’t share the concept of your business approach and goals are not the type of people you want to engage in your business.

Candidates who don’t have the right temperament, skills, or talent for the job position that you offer can be too pricey for your company. Having the right people in the right job positions can make your company outstanding. Exceptional companies recruit exceptional people.

6. ACCEPT TECHNOLOGY CHANGES

Technology changes on a regular basis nowadays. Successful business owners are very well aware of that, so they change accordingly. Doing things the way they were done years ago will not provide the same success nowadays.

Accepting technological improvements can help your company become more effective and efficient. Keep yourself informed about the latest in new technology, and the improved solutions it brings. Choose the most appropriate ones for your business and adopt them. Your customers will be grateful and you’ll experience great benefits.

7. TRUST YOUR INTUITION

If you believe your intuition has been serving you well so far, listen to your inner voice carefully. Your instincts can lead you a long way. If you still feel strongly about something, regardless of the lack of facts or data – act on it. What seems right for other businesses doesn’t necessarily mean that it will work for you as well.

Relying on intuition is often the first step out of your comfort zone, and the first step towards becoming a leading company on the market. While you watch your business grow and spread, remember that having faith in yourself and the business you are running is crucial. Being aware of your inner voice can lead you to making business decisions with more confidence and a greater success rate.

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.