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10 Mistakes Entrepreneurs Make With Investors

mistakes_unpreparedSeeking money for a start-up from friends, family, angel investors, venture capitalists or lenders is an exercise fraught with pitfalls. Many first-time entrepreneurs approach it with great optimism and belief in their business idea, only to fall flat on their face.

Reasons vary, but often it’s just that the entrepreneur hasn’t taken the time to study up on how to approach investors, including what to do and what not to do. The Young Entrepreneurs Council (YEC) – an invitation-only group of top young entrepreneurs – recently asked some of its most successful members to name the dumbest mistake they could think of that entrepreneurs should avoid when pitching investors.

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Here’s our take on the top 10 mistakes they came up with (in no particular order):

1)    Making it all about the money: “When pitching an investor, you’re not just pitching your great idea. A relationship with an investor goes beyond the ROI and it’s important to focus on selling yourself as well as your business plan,” says Raul Pla, Founder & CEO of SimpleWifi.

2)    Being unprepared: This is an unforgivable sin. The entrepreneur, of all people, must have the details completely buttoned down. “Even if you get an investor interested, nothing will bring the conversation to a screeching halt quite like not knowing how much you want to raise and what you’ll do with it,” says Jason Evanish, co-Founder of Greenhorn Connect. You must show you can lead a business.

3)    Asking for an NDA (non-disclosure agreement): Only a rank amateur would do this. “Chances are, you’ll be laughed out of the meeting room if you ask investors to sign an NDA,” says Michael Tolkin, CEO of Merchant Exchange. “Ideas are cheap.”

4)    Being overly pushy: Investors accepted the meeting because they saw something in you or your business. But if you push too hard, most investors will shut down. “Be cool and confident, but not like a used car salesman,” says Ashley Bodi, co-Founder of Business Beware.

5)    Meeting your best prospects first: Keep this in mind, says Christopher Kelly, co-Founder of Convene: “Your pitch only gets better with time. You will achieve the best odds by saving the best for last.” Make a note of recurring questions and concerns after each pitch and revise your materials accordingly.

6)    Promising too much: “Go in with what you know, not what you think you can do. Investors will lose faith in you – that is, if they don’t see through you immediately,” says Jordan Guernsey, CEO of Molding Box.

7)    Rushing the pitch: “As nervous as you might be, try to calm down and speak from the heart,” says Logan Lenz, Founder of Endagon. “Speaking more slowly not only allows listeners to register what you’re saying, it also makes you sound more confident and knowledgeable.”

8)    Failing to leave time for Q&A: This is the flip side to #7 above.  You can’t take too much time and not allow questions at the end. “No matter how organized a pitch is, it will fail to answer questions your audience has,” says John Harthorne, Founder & CEO of MassChallenge.

9)    Making all projections and no plans: “Don’t put a hockey-stick graph in the middle of the presentation and expect everyone in the room to swoon,” warns Brent Beshore, CEO of Adventur.es. “Projections are guesses that rarely come true. What’s more impressive is your plan to get there. Investors know a strategy means a lot more than pretty pictures.”

10) Coming off as desperate: “People like to invest in and be connected to winning projects,” says Raoul David, CEO of Ascendant Group. If you come across as if this investment is the only way your business can move forward, it seems too needy and will turn off many investors. This also sets you up to be taken advantage of. “You’ll end up giving away more equity than you should.”

Copyright © 2000-2013 BizBest® Media Corp.  All Rights Reserved.

7 Awesome Accounting Apps for Small Business

AppsEvery year, The Sleeter Group – a firm that helps business owners and accountants work together – conducts a competition to identify the best tech and software solutions for small business accounting and finance. Some are add-ons to QuickBooks, while others are stand-alone products that can make your life easier, and help improve profits.

In order to qualify for what Sleeter calls its “Awesome Add-On” awards, the product or service must come from a solid company with a reputation for outstanding customer support. The product must also show superior design, implementation and features, integrate effectively with QuickBooks and other software solutions, and conform to good accounting principles.

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These six recent winners are worth considering for a small business:

1. Bill.com Receivables:  This service, which is an upgrade ($5/month) to a Bill.com Payable account, is great for any business that sends invoices to customers and wants to offer the option to pay electronically, online. According to Sleeter, it’s “a perfect example of how the web is revolutionizing small business.”

By allowing businesses to manage the entire accounts receivable process in the cloud, Bill.com has taken a big leap forward. In addition to sending electronic invoices and reminders, you can receive payments online and by credit card, and customers can access their own portal (for free) to see their invoicing and payment history.

2. Bill & Pay, from Skyhill Software, is great for small businesses that want to streamline their receivables process online. Bill & Pay automatically uploads invoices from QuickBooks, Peachtree, Great Plains and other accounting software into a web portal where they can be tracked and managed. There’s also an “Easy Invoice” feature that lets you create your own invoices without using any accounting software.

Bill & Pay integrates with several merchant accounts (including Intuit Merchant Solutions) so it doesn’t require extra steps for batching deposits into your bank account. Cost is $16.95 per month, plus 55 cents per payment transaction.

3. QQube, from Clearify, is for business owners who want more powerful or complex reports and dashboards than QuickBooks can create by itself. This can be especially helpful in developing data analytics. Says Sleeter, “Although there’s a learning curve, once you get the hang of it you’ll be amazed at how much you can do with this tool. This is a game changer.” Cost is $425 for the single user version.

4. If your business ships 20 or more packages daily via UPS or FedEx, ShipGear provides a simple way to manage those packages, update QuickBooks invoices to include freight charges and eliminate double data entry in the two systems. As each package ships, ShipGear generates a personalized email notification to the customer. Cost is $225 for QuickBooks Pro version, from V-Technologies. Also integrates with Peachtree and others.

5.  ViewMyPaycheck, from Intuit, lets QuickBooks payroll users upload paycheck information to the cloud where employees can securely access pay stubs, vacation/sick time balances and W-2 forms. Employees can view, print or download copies of their payroll information anytime, from anywhere. This is free for QuickBooks Payroll subscribers at all levels, including Basic.

6.  ExpenseWatch.com is a web-based time and expense reporting tool that helps you streamline the process of time tracking, expense reporting, as well as purchasing and invoicing.  ExpenseWatch includes modules for expense reports, purchasing and AP invoice management that you can subscribe to individually, or as a fully integrated expense control suite. Costs ranged between $16 and $35 per month, per user.

7.  AvaTax Certs, from Avalara, is a life-saver for businesses with customers who are sales tax exempt. This typically includes industries such as manufacturing, tech, education, wholesalers and some types of retail. AvaTax Certs limits your audit exposure on non-taxed transactions by helping you manage customer exemption certificates end-to-end. The online wizard automates paperless certificate collection and ensures you only collect valid certificates. Starts at $375, plus $249/year.

Copyright © 2000-2013 BizBest® Media Corp.  All Rights Reserved.

6 Preventive Steps That Could Save Your Business

preventionIn our fast-paced, ever changing business world, the notion of “prevention” – which generally means doing something you don’t absolutely have to do right now – often gets lost or set aside. But with so much riding on how smoothly things run at your business, that ounce of prevention can indeed far outweigh a pound of cure later on.

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Think of some of the threats your business faces: computer viruses and other tech malfunctions, on-the-job accidents, employee theft, shoplifting, lawsuits, machinery downtime and broken equipment. All of these things can slow you down, cost you money and even put you out of business.

Here are six key areas where prevention can really make a difference to your business success, along with some preventive solutions.

1) Theft and Loss Prevention: Whether it’s stealing client lists and confidential data, fudging expense reports or stealing merchandise and materials, employee theft and fraud is a serious threat to small businesses. Shoplifting, employee theft and other types of “inventory shrinkage” can eat away your profits. Installing a loss-prevention program will help minimize losses. Include background checks on employees as part of your system. The National Association of Professional Background Screeners (www.napbs.com) can help.  Conducting regular audits or “checkups” can help you detect fraud or theft and also serve as a deterrent. The Association of Certified Fraud Examiners (ACFE) helps companies of all sizes detect and deal with workplace fraud. Visit www.acfe.com.

2) Lawsuit Prevention: A lawsuit is a huge drain on your time, money and energy. The story is all too familiar: A small business owner and a partner (client, customer, investor, etc.) have a business dispute they can’t seem to resolve. No one will budge. Threats of legal action, emails and letters are exchanged. Everybody is upset, and productivity suffers under the stress. If a lawsuit results, things get even worse. Solution? Use arbitration and mediation to avoid a legal morass. It’s user-friendly (usually avoids lawyers), inexpensive and helps resolve thousands of business disputes yearly.

The American Arbitration Association (ADR.org) and the National Arbitration Forum (arb-forum.com) can help. Judicial Arbitration & Mediation Services, or JAMS (jamsadr.com), offers dispute resolution services, and can do it via videoconferencing.  For preventive help keeping your business in legal compliance, visit LegalWorkplace.com.

3) PC Problem Prevention:  Both Microsoft and Apple offer free security updates — but you have to download and install the latest versions and fixes. Get what you need at the Microsoft Download Center (Microsoft.com/downloads). For Mac OSX, go to the Apple menu and select “Software Update” to check for updates. Microsoft has some good preventive maintenance advice on its website at www.microsoft.com/athome.

4) Accident Prevention: Keeping things safe in the workplace is vital to a successful business. It’s not just good business, it’s also the law. For free information, the Occupational Safety and Health Administration (OSHA) is actually a good source for business owners. From the OSHA homepage at www.osha.gov, click on the “Small Business” tab on the upper right. There you’ll find quick links to small business safety resources, help with compliance, web tools and FAQ.

Many companies sell safety products and training materials, including the Workplace Safety Store (safety.1800inet.com), Northern Safety (www.northernsafety.com) and All Safety products (www.allsafetyproducts.biz).

5) Preventive Facilities Maintenance: If your facilities and equipment fall into disrepair, your business will suffer. Grainger (www.grainger.com) is the top provider of maintenance, repair and operating supplies to businesses in North America. And since there are a gazillion products and parts you might need (Grainger carries over 800,000), their online product search is super helpful. If your biz is big enough, consider outsourcing maintenance. USI Building Services, for example, (www.usibuildingservices.com) is a single provider for all maintenance needs. They take care of supplies, equipment management, scheduling and reporting.

6) Data Loss Prevention: You’ll find helpful virus protection and data backup solutions at MacAfee.com and Symantec.com. For web-based backup and data protection solutions, consider SystemSafe (www.systemrestore.com), Iron Mountain (www.ironmountain.com), Intronis.com and RestartIT.com. Carbonite.com is a low-cost service that offers non-stop, automatic backup over the internet for as little as $5 monthly. Imation.com devotes considerable attention to small business solutions, with helpful tips, advice and product information to help get you started.  Second Copy (www.secondcopy.com), from Centered Systems, is inexpensive software for Windows that automatically makes a backup of your data files to another directory, disk or computer across the network.

Copyright © 2000-2013 BizBest® Media Corp.  All Rights Reserved.

 

Obamacare Small Business Quick Start Guide

Obamacare.v2Whether you’re angry, happy or just plain confused about how “Obamacare” (a.k.a. the Affordable Care Act, or ACA) will impact your business, my best advice is this: Get over it!

Official start date is January 1, 2014, but some provisions are already in place (such as healthcare tax credits for small biz) with more coming soon. Time to buck up and figure out what it means for your business, what steps you need to take and how you’re going to deal with the changes.

Many business owners and entrepreneurs are still in “wait and see” mode. That could be a mistake if you end up overpaying for existing coverage, or want to get first time coverage and face health expenses before getting your coverage in place.

Details Unfolding

Details of healthcare reform are starting to unfold. The U.S. Small Business Administration, for example, has launched a new website (SBA.gov/healthcare) and blog (sba.gov/blog) devoted exclusively to explaining it for small business. And while the SBA’s take on ACA is certainly biased to the upside, this new resource does offer a helpful gateway to information about how it will work.

Keep an eye out for something called the Small Business Health Options Program or SHOP. This program, launching in October, is designed as a (relatively) hassle-free way for you to find health insurance. If it works as promised, you’ll be able to choose the coverage level you want, what portion of employee costs you want to pay and tap available tax credits. You can sign up to receive email updates about SHOP at the HealthCare.gov website.

Starting in 2014, you or your small business can also get insurance through a new type of non-profit, consumer-run health insurer called a Consumer Operated and Oriented Plan (CO-OP). As with other co-op setups, these insurers will be run by their small business and self-employed customers themselves. Such CO-OPs are meant to offer consumer-friendly, affordable health insurance options to small businesses and must meet the same state and federal quality and financial standards as other plans. You can find more at the HealthCare.gov website.

Here are some key provisions based on the size business you are, from self-employed to 50+ employees.

Self-Employed

Health insurance coverage for the self-employed will be in place and available through a new competitive health insurance marketplace in each state no later than January 1, 2014, with open enrollment starting October 1, 2013. You’ll be able to choose from four levels of coverage that pay different percentages of your costs.

Under 25 and Under 50 Employees

One provision already in place is a tax credit (way better than a simple deduction) for small businesses with fewer than 25 employees that pay a portion of employee health premiums and meet other criteria. Right now, the credit maximum is 35% of what you pay for coverage and that will go to 50% in 2014.

Small Business Majority, an advocacy group for small business, has a handy Health Care Tax Credit calculator on it’s website. You’ll see it on the right side of the homepage at: SmallBusinessMajority.org.

Also starting in 2014, businesses with fewer than 50 employees can use the SHOP system to secure coverage. The assumption is that competitive pricing and pooled purchasing will lower costs significantly, although that’s yet to be seen.  Right now, small businesses pay about 18% more on average than big companies for equivalent coverage.

50 or More Employees

This is where mandates kick in. Starting in 2014, businesses with more than 50 full-time (defined as working 30 or more hours weekly) employees must offer health insurance or pay an “assessment.” The details of this “Employer Shared Responsibility” and other ACA tax provisions are available on the IRS website at IRS.gov. See Affordable Care Act Tax Provisions under “Hot Topics.”

Starting in 2016, businesses with up to 100 employees will be able to buy health coverage through SHOP.

Here three other helpful features available on the HealthCare.gov website:

  • Timeline for implementation: What you need to do and when.
  • State-by-state breakdown of new healthcare options for small businesses.
  • A glossary of healthcare act terminology.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

5 Low Risk Ways to Fund Future Business Growth

Funding growthHere at BizBest, a common concern I often see from business owners and start-up entrepreneurs is where the money will come from to fund future growth. For some, that might require outside investors, which in turn can mean giving up partial ownership or control.

But most businesses can grow successfully by using one or a combination of other financing approaches that don’t require major commitments or outside investors.

The idea is to prepare and position your business for growth so you don’t miss out on growth opportunities when they arise. A big part of that is not only keeping your current balance sheet in shape, but also lining up potential funding sources.

It starts with understanding the different options, and that alone can be challenging. For example, an American Express survey found that 34% of business owners believe – incorrectly – that a business “term loan” (funded immediately for a set term and amount) and a “line of credit” (which you open and tap as needed) are essentially the same. And nearly 40% believe it’s a good idea to apply to as many lenders as possible when seeking a loan, when the opposite is true. (Multiple applications can harm your credit rating.)

Here are five ways to position your business for all the future funding you’ll need:

1. Reinvest your profits

The best source of “venture capital” for an existing business is money you’re already generating. This is “patient” capital that builds value in your business without debt and without giving up shares to others.

Many entrepreneurs miss growth opportunities by spending profits in unproductive ways. Others take the opposite extreme, pumping every penny into the business while taking nothing for themselves.

Both can backfire. If you do need to seek a loan, lenders will prefer that you pay yourself a reasonable salary. They want to know the business can be profitable even if those running it get paid.

2. Tap into trade credit

“Trade credit” is a way to put off payment for goods and services your business purchases from suppliers and vendors. You may find vendors more than willing to sell on credit to a growing business – and even to a startup – if you can strike a long-term deal to buy from them.

And from your perspective, trade credit is also one of the safest forms of business borrowing. Bank debt is dangerous because payments are still due even if sales drop. But if sales drop so will your orders, so your level of trade credit drops too.

Trade credit may also be more readily available than bank or other types of loans. And it lets you spread payments over months or even years with little or no down payment and generally favorable rates.

3. Line up a credit line

The time to establish a line of credit is when you have the ability to qualify for one and might not really need it.  Having a line of credit can help you grow by providing ready financing when opportunities arise. A line of credit is also vastly preferable to using credit cards that carry much higher interest rates and other onerous terms. But use your credit line cautiously. Lines are meant to be tapped as needed, then paid off so they are available again the next time.

Establishing a credit line is cheap, you only pay interest on what you borrow and you can use the line for almost anything. Start small – basically with whatever size line a lender is willing to provide.  The important thing is to get a foot into the bank financing door. Once you have it, put it to use and pay it off diligently and always on time.

4. Expand your banking relationships

If you have accounts with only one big bank, consider opening additional accounts at a regional or community bank (or vice versa). That will give you more options when it comes time to look for loans, lines or other services to support your growth plan.

5. Consider alternative sources

A few options include credit unions you may be eligible to join, accounts receivable financing (also called “factoring”), and so-called “peer-to-peer” lending. Peer-to-peer (or person-to-person) lending is handled online through a variety of web-based services that function as intermediaries, including Prosper (www.prosper.com) and Lending Club (www.lendingclub.com).

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

Why Marketing Metrics Matter to Your Business

Metrics.horizWhen it comes to measuring marketing success, many business owners (and professional marketers) prefer to think that results are more magic than math. But that’s just not so. The digital era – with it’s easy (relatively) access to analytics – has introduced a whole new way of thinking.

Using real data, business owners can now take a “show me the money” approach to measuring marketing success. Marketing metrics – as opposed to, say, website metrics – can show what works and what doesn’t with far more clarity than ever before.

If you aren’t using some type of marketing metrics or analytics, your business is flying blind. Your goal is to confidently identify which marketing efforts are delivering the best financial returns. Only then can you make the right strategic moves to improve your results over time.

With marketing dollars scarce, business owners and startup entrepreneurs are moving to methods where they can most easily measure and quantity success – or the lack thereof. Meanwhile, test-and-learn marketing (A/B testing) and other marketing tools are helping even the smallest businesses glean valuable insights into what customers and prospects actually DO rather than simply what they SAY.

Marketing Metrics vs. Website Metrics

Don’t confuse marketing metrics with simple website metrics such as page views per visit, time on site, back-links and others. The marketing data important to you includes such things as total traffic, action rates, leads, conversion rates and – ultimately – sales. Whereas web metrics focus on what’s happening with your website overall, as well as specific pages, marketing metrics are mostly about human actions – your customers and prospects.

Metrics-focused marketing starts with three main activities:

1)    Setting goals and targets up front. These should include such things as how many incremental sales are generated, how much revenue each sale produces and the gross margin. In short, you want to know precisely what impact your marketing efforts are having on revenue.

2)    Designing or selecting your marketing programs to be measurable in the first place. You’ll want to know the incremental contribution of each individual marketing effort you undertake in order to compare results.

3)    Focusing on decisions that will improve your marketing results. The idea is to adapt and make changes along the way.

Here are three key marketing metrics to consider:

  • Lead Conversion Rate: Lassoing lots of leads is great. But converting them to sales is what really counts. Your conversion rate is the percentage of leads that ultimately become sales (10 sales from 100 leads = a 10% conversion rate). This also produces insights into lead quality and how revenue can react dramatically to even small changes in conversion rates.
  • Revenue Per Customer:  Once you know how much the average customer is spending, you can make better decisions on whether to focus on new customers, selling more to existing customers, or both.
  • Customer Acquisition Cost: This boils down to what it costs you to gain a new customer. It’s a critical number to know for deciding what you can spend on your marketing efforts. If your revenue per customer is higher than your acquisition cost, you’re at least on the right track.

Metrics Missteps to Avoid

  • Vanity metrics: Avoid relying on “feel good” measurements that sound good but don’t actually measure business outcomes or improve profitability. Common examples include PR impressions, Facebook “likes” and names gathered at trade shows.
  • Focusing on quantity, not quality: The main metric of lead generation is usually quantity. But focusing on quantity without also measuring quality can lead to marketing programs that look good initially but don’t deliver profits.
  • Activity, not results: Marketing “activity” is easy to see (costs going out the door), but results are harder to measure.
  • Efficiency instead of effectiveness: Know the difference between effectiveness metrics (doing the right things) and efficiency metrics (doing – possibly the wrong – things well).
For example, having a packed event is no good if it’s the wrong people.

Lenskold Group, a marketing analytics firm, has a helpful, and free, online tool for calculating the return on investment (ROI) of your lead generation. Just put in the numbers for nine different variables and check the results. Look on the website under “ROI Resources”.

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8 Essentials of Successful Discounting

Discounts.horizThese days, if you aren’t offering a discount of some kind (or at least the appearance of one), you might not be selling much of anything. Pervasive discounting by businesses both big and small has caused buyers to demand deals on anything and everything.

In the midst of all this, how can business owners and entrepreneurs craft a financially sound strategy for offering discounts? The knee-jerk reaction is sometimes to cut prices willy-nilly. But don’t rush into a discount strategy. It pays to start with a plan, making certain the discounts you offer will actually help grow your business long-term, rather than shooting yourself in the foot.

No matter what, be sure to monitor and measure the results of a discount strategy. If you sell more but still lose money, it’s not helping your business.

Here are eight keys to successful discounting:

1. Make the discount relevant

Devise an offer that not only will appeal to your clientele, but also one that jibes with how those customers buy from your biz. For example, a “buy one get one free” offer might appear strong on the surface. But if you sell something that customers wouldn’t typically buy multiples at the same time, it’s not likely to work well.

2. Commit to your campaign

Whether you use social media, search engine marketing, postcards, coupon packs, email or other ads, frequency and consistency count. Prospects may see an offer but not respond right away.  Consumers look for an offer that’s appealing and has value, and may respond immediately. But with big ticket, high-commitment items they are likely to take more time to consider the offer and wait until they need to make the purchase.

3. Balance strong discounts against your bottom line

Structure discounts that get customers in the door, but still make money for your business. “Look at your product mix and look at your margins,” says King. “Because if you don’t, that’s where you’re going to get burned.” Evaluate carefully what you can reasonably offer, and don’t be afraid to exclude specific items that don’t fit the discount model (see tips below on crafting a profitable offer).

4. Set goals and measure your results

Balance results with objectives. Was your goal to generate new customers? Drive more phone calls or website visits? Promote a new product or service? Don’t just file away coupons you use to promote your discount. Take a little time to analyze the transactions. Did customers merely buy the discounted items or did they spend more while they were at your store or website? Well-planned discounting typically (though not always) prompts customers to spend more.

5. Don’t forget to prepare

Some businesses that offer a discount for the first time aren’t properly prepared for the response. If you attract customers to try your product or service, but you’re not able to serve those customers at your best level, you’re shooting yourself in the foot. Be sure to inform your staff about your discount strategy, and provide any information they need about coupons or offers. Customers may have questions, and you’ll need the answers.

6. Don’t treat discount buyers as “second rate” customers

Make every customer feel wanted, welcomed and appreciated. Training your staff to handle promotions is just as important as the offer itself.  The reason is simple: Treating people well is the key to repeat business after the discount deal is gone.

7. Don’t target only new customers

Offer extra discounts for repeat business: One way to turn new customers into repeat customers is to establish loyal customer discounts of some type. Loyalty cards (buy 9 get the 10th one free), birthday discounts and referral rewards are several examples.

8. Avoid hot water

Be careful with the wording of your discount and on-sale offers. Clearly label what’s “on sale” and what isn’t. If you advertise discounts of, say, “Up to 50% off” the Better Business Bureau suggests that at least 10 percent of the items be offered at the maximum amount off.

Profit-boosting tips for crafting a discount coupon offer:

  • Know your marginal cost: Deep discount offers work best for businesses with low marginal costs, where the price of producing an additional “unit” to sell, over and above fixed costs is low.
  • Be patient: Discount offers can hurt short-term profits but pay off later as new customers return and pay full price.
  • Block multiple purchases: Research shows that profitability drops greatly when customers are allowed to purchase multiple coupons.  Disallow multiple purchases if possible (although there’s nothing to stop buyers from setting up multiple accounts to buy your coupons).
  • Gather purchase data: If possible, find out if customers who bought your discount coupons have purchased from you before at full price. You might start by simply asking them.  Remember that coupons can re-active old customers who’ve forgotten about you or moved to a competitor
  • Consider fees: Stiff pay-to-play fees charged by Groupon and others also curb coupon profitability.  Groupon, for example, takes up to half of the coupon price, although the fee drops to 10 percent if your offer only appears following user searches and not in Groupon’s daily email.
  • Query customers: Capture as much information about coupon customers as possible, including names and email addresses, and follow up with further offers.
  • Cross-sell and up-sell: Coupon customers might buy other full-price items as well. To facilitate this, be sure to specifically offer them related items.

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13 Business Resolutions for 2013

2013Here they are, along with some of our best tips and strategies to help you pull each one off:

Resolution #1: Fix my website!

Here are 10 things that are probably wrong with your site, and how to fix them: 10 Things Wrong With Your Website

Resolution#2: Improve our customer service!

Here’s how: 8 Ways to Earn True Customer Love

Resolution#3: Be a better tweeter!

Here’s one way to do it: The Right Way to Retweet

Resolution#4: Boost my social influence!

These 16 tools can help: 16 Sweet Social Marketing Tools You Gotta Try

Resolution#5: Nurture our leads!

Become a lead nurturing pro: 9 Steps to Lead Nurturing Success

Resolution#6: Find a business mentor!

Here’s how & where: 8 Places to Find Your own Free Business Mentor

Resolution#7: Launch a new product or service!

And when you do, here’s how to market it! 14 Ways to Market a New Product or Service

Resolution#8: Try A/B testing!

Here’s what you need to know:  The Magic of Test-and-Learn Marketing

Resolution#9: Keep better books!

These basics will get you there: The 10 Bookkeeping Basics You Can’t Ignore

Resolution#10: Get serious with Facebook!

Can’t go wrong with this Facebook cheat sheet: A 10-Step Facebook Cheat Sheet for Biz Owners

Resolution#11: Network more!!

These tips will really help: 9 Ways to Make your Contacts Really Count

Resolution#12: Review our pricing!

There’s more to pricing then you think: What Every Business Should Know About Pricing

Resolution#13: Innovate more!

Here’s how to make it happen: 4 Rules for Fostering Innovation in Your Business

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

6 Things that Growing Businesses Do Right

growthWhat sets growing businesses apart from their biz brothers and sisters whose revenues are flat or falling? Based on a recent study that compared small firms with rising revenues against their counterparts with flat or declining sales, here are the six practices that stood out:

1. Planning Ahead

Business owners who managed to grow in the face of economic weakness were adept at planning for what might go wrong, rather than simply reacting to trouble. When times were good, these well-prepared businesses squirreled away cash reserves and opened credit lines that helped them weather tough times without having to make cutbacks.  In contrast, owners with declining revenues found themselves madly rushing to slash expenses as difficulties mounted.

2. Borrowing Strategically

Growing businesses understand that borrowing can be a good thing (especially since interest is tax deductible) if the money is put to good business use.  And the use that has paid off best for growth firms is R&D. About 58% of high-growth small business owners report that R&D type investments yielded the most positive returns. On the other hand, borrowing to open new offices, build production facilities or add new capabilities was more likely to correlate with a DROP than an increase in sales. Likewise, borrowing to add staff was generally a money-losing endeavor.

3. Sharpening Management Skills

Professional development also leads to more income. Business owners who improved their skills at strategic planning and money management, for example, had a better chance of achieving revenue growth than those who didn’t.  But the most compelling results came from those who got better at hiring the right people. Team building skills, it turns out, are great for boosting a bottom line.

4. Getting Good Advice

Business owners have always relied on advice from friends and fellow entrepreneurs. That never changes.  But the best of them also make sure they plug into a savvy accountant or other financial advisors to provide the kind of professional fiscal advice that every business needs, no matter what size.  For example, 68% of businesses with rising revenues sought out financial advisors, while only 51% of those with declining revenues took that step.

5. Balancing Business and Life

Revenue-boosting business owners tend not to be all-consumed by their businesses.  They’ve learned to balance involvement with family, friends and their communities.  In short, they run their businesses – not the other way around.  Conversely, business owners whose revenues decline tended to be more fiercely independent and obsessed with their companies at the expense of other parts of their lives.

6. Sharing Vision

There’s also a strong correlation between success (in terms of revenue growth) and business owners who were strong leaders and adept at sharing their vision with employees, colleagues and others.  In addition, it was critical for business owners to demonstrate commitment to the business and inspire teams to perform at their highest level.

If you’re not among the ranks of revenue risers, take these six differentiators to heart as you plan your year ahead. By following in the footsteps of success, you’ll have a better chance of increasing revenues no matter what’s happening in the economy around you.

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The 10 Bookkeeping Basics You Can’t Ignore

Millions of business owners and startup entrepreneurs are masters at creating great products and services, building awesome teams and winning over customers. Many of them, however, would probably flunk basic bookkeeping.

But if you don’t understand the different types of “accounts” your bookkeeper uses to organize your finances, measuring the success (or failure) of your efforts will be futile.  Being deft at digital marketing, for example, isn’t enough if you don’t have a clear financial picture of your business and run headlong into cash flow problems.

What do your accounts receivable look like? Are you constantly paying your own bills late? Not sweating the small stuff like understanding your own books is trouble in the making, says Lita Epstein, who designs online courses about reading financial reports and is the author of Bookkeeping Kit for Dummies (Wiley, 2012).

Here are basics of the 10 most common types of bookkeeping accounts for a small business that you should know:

  1. Cash. It doesn’t get more basic than this. All of your business transactions pass through the Cash account, which is so important that often bookkeepers actually use two journals—- Cash Receipts and Cash Disbursements — to track the activity.
  2. Accounts Receivable. If your company sells products or services and doesn’t collect payment immediately you have “receivables” and you must track Accounts Receivable. This is money due from customers, and keeping it up to date is critical to be sure that you send timely and accurate bills or invoices.
  3. Inventory. Products you have in stock to sell are like money sitting on a shelf and must be carefully accounted for and tracked. The numbers you have in your books should be periodically tested by doing physical counts of inventory on hand.
  4. Accounts Payable. No one likes to send money out of the business.  But it’s a little less painful if you have a clear view of everything via your Accounts Payable.  Good bookkeeping helps assure timely payments and – importantly – that you don’t pay anyone twice.  Paying bills early can also qualify your business for discounts.
  5. Loans Payable. If you’ve borrowed money to buy equipment, vehicles, furniture or other items for your business, this is the account that tracks what’s owed and what’s due.
  6. Sales. The Sales account is where you track all incoming revenue from what you sell. Recording sales in a timely and accurate manner is critical to knowing where your business stands.
  7. Purchases.  The Purchases Account is where you track any raw materials or finished goods that you buy for your business. It’s a key component of calculating “Cost of Goods Sold” (COGS), which you subtract from Sales to find your company’s gross profit.
  8. Payroll Expenses.  This is the biggest cost of all for many businesses. No matter how much you beg, few people want to work for nothing.  Keeping this account accurate and up to date is essential for meeting tax and other government reporting requirements. Shirking those responsibilities will put you in serious hot water.
  9. Owners’ Equity.  This account has a nice ring to it. Basically, it tracks the amount each owner puts into the business. “Many small businesses are owned by one person or a group of partners; they’re not incorporated, so no stock shares exist to divide up ownership,” says Epstein. “Instead, money put into the business is tracked in Capital accounts, and any money taken out appears in Drawing accounts. In order to be fair to all owners, your books must carefully record all Owners’ Equity accounts.
  10. Retained Earnings. The Retained Earnings account tracks any of your company’s profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total of money that has been retained since the company started. Managing this account doesn’t take a lot of time and is important to investors and lenders who want to track how well the company has done over time.

Many business owners think of bookkeeping as an unwelcome chore.  But if you understand and make effective use of the data your bookkeeper collects, bookkeeping can be your best buddy, helping  you run your business more effectively.

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