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Importance of Location for Your Small Business

Location

If you are thinking of starting a business that benefits from walk-in foot traffic, you have to pay attention to the location you choose. Whether it is a retail store, a motel, a restaurant or a spa, the right or wrong location of the business can decide its fate. Yes, some businesses reach the heights of their success at the oddest locations possible, but it is not very wise to keep exceptional cases in mind while starting a business. So, what role does a location play in the success of a business? Here are some important points for your understanding.

The Foot Traffic Matters

Now, the area you choose must have ample foot traffic for you to take advantage of. Of course, you are a business that benefits from the foot traffic, so you need a lot of it. For this purpose, you first have to look for commercial areas where people normally go for shopping. If there is no place available in the commercial area, you want to explore further to look for locations from where a lot of people pass. Think about your marketing as well. If you are going to use billboards, neon signs or vinyl for marketing purposes, you want them in places where people can see them. The more people there are at the location of your business the more they will notice your marketing signs.

There aren’t a lot of people at the location that you are considering for your business, you are already at a disadvantage. It shows that people don’t naturally walk in that direction when they are looking to do business. It is the same way on the internet. You bid for keywords that have the highest number of searches. You want to put your banner ads on websites that have a lot of traffic. In short, foot traffic matters.

The Buying Power of the Community

Before you choose the location, you must know the type of audience your business attracts. Are you a fine dining restaurant? Will you be selling low-cost meat burgers? You have to decide your location based on the type of business. If you are opening a fine dining restaurant, you want to open it at someplace where people have the buying power to afford expensive foods. It requires a lot of research for you to be able to find such locations, but the time you spend researching will always pay off in terms of a good return on investment.

Businesses in Proximity

A lot of businesses try to avoid having their competitors located close to them. But believe it or not, it is extremely beneficial for small businesses to be located near other big businesses. By doing this, your business benefits from the traffic of other businesses. It solves a lot of problems that can be detrimental to businesses at locations where there are no other businesses. The first benefit is that you already have foot traffic, so you can already move on to the next step of pulling those potential customers into your premises. Secondly, you don’t have to force people to walk away from their daily routes to come and do business with you.

If you already have a lot of similar businesses located around you, people already come there for that type of business. So, if you are opening a boutique in an area where there are many boutiques already, you can rest assured that people already come to this market for buying clothes.

The Expenses of Operation

This item has to be on your checklist of choosing the right location for your business, otherwise, you are going to regret your decision. Sometimes, you find a place that has high foot traffic volume and lots of other similar businesses in the vicinity, but the operating expenses are through the roof. The businesses that have already established might have adjusted according to those expenses, but things will not be the same for a starting business like yours. You want to keep your operating costs as low as possible. What if the area you are going to has private companies providing electricity?

What if the availability of clean water is a challenge at your desired location? What is the rent of the building if you are considering renting a place for the business? A starting business already has very thin profit margins. Add high operating costs to the equation and even those little profits will be gone.

The History of the Location

The location you have chosen has proven to be ominous for many businesses in the past, you have to dig deeper even if everything sounds right. When a lot of businesses have opened and closed at the same location, it is an indication of something wrong but not visible with a casual survey. You will have to be very careful in finalizing such a location. If nothing, it could be the owner of that building that might be an issue for its renters.

Some landlords are overly interested in their profits and do not care how much damage they are doing to a starting business with their demands.

Many small businesses need some favors and flexibilities from their landlords for them to be in a stable position. Some building owners will even lower your rent to allow you to establish first. If the landlord’s reputation is okay, check to see that the place is not a frequent picnic point for robbers.

Final Word

Many of the things mentioned above might sound basic or understood to you, but you will be surprised to know that many new businesses shut down because they fail to realize the importance of these same points. Believe it or not, you cannot take any of the points given above for granted. And while they might sound very understood and intuitive, lack of time and capital can often push you in a direction that you don’t want to go in. Stay tenacious to this checklist because a compromise at this point will give birth to several compromises in the months to come.

 

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How to Do Valuation of Your Small Business

Valuation

When you are looking forward to starting your own small business, you will have to familiarize yourself with a lot of new ideas. One of the important concepts that every business owner must be aware of is business valuation. So, what is business valuation, what is its importance and how do you do the valuation of a business? Read on to know.

Business Valuation

As the name clearly suggests, business valuation is the act of finding the value of your business in the market. It is just like finding the value of a house when you are about to sell it. You can use multiple methods to find the value of your business. However, it is always in your best interest that you hire a professional valuator to do it for you. They know multiple methods of valuation and will make sure that the final valuation is error-free.

The Importance of Business Valuation

The first thing you should know is that it is imperative to do the valuation of your business not for one but many reasons. The first reason that comes to mind is the selling of a business. When you want to sell your business to someone, you have to set a price for it. Sometimes, the owner of a business would want to plan succession i.e. the transferring of shares to an heir. The buy sell-agreement that they use for transferring the shares to their heirs requires them to know the value of the business.

If you have ever pitched your business to an investor, you must be aware of the fact that they always ask for business valuation. They are trying to assess a few different things based on the valuation you give them. First, they want to know how much their investment is worth. Secondly, they want to know whether or not you are fair with your investment demand if you are offering them equity for their contribution.

The Three Business Valuation Methods

Even though there are other business valuation methods as well, you will be reading about the three most common ones.

1. Valuation Based on Market Value

You also call this method the relative valuation method. It is a fairly straightforward way of knowing how much your business is worth. The valuators have to look at other businesses in the market that are similar to yours. They look at their selling prices and determine the value of your business based on those prices. Now, as simple and plain as this method sounds, it does not always work. For example, you don’t find the records of sole proprietorships that easily. So, when it comes to the valuation of a sole proprietorship business, finding records of similar businesses can pose quite a challenge.

2. Valuation Based on Business Future Earning Potential

This is an ingenious way to know the value of a business and one that helps you a great deal when it comes to obtaining investments from interested investors. This is quite a realistic approach but pitching it to investors can be a daring task.

First, you have to make sure that you have done proper calculations based on your current and past records to come up with the future earning potential of the business.

Secondly, you have to stand confidently with your decision because investors would often question you and your integrity a lot when they deem that you have valued your business much higher than you should have.

Capitalization of past earning is quite a frequently used approach to do this type of valuation wherein you look into the past financial reports of your business, smooth out any extraordinary earnings or expenses, and find the product of the normalized cash flow with a number referred to as capitalizing factor. It is not the only method used for determining the value of the business under this category. Another frequently used method is based on discounted future earnings.

3. Valuation Based on Assets

It is clear from the name that in this type of valuation you find the worth of the business based on the assets it owns. Once again, there are multiple ways to approach this valuation too. A common way to do this type of valuation takes liquidation of the business into account i.e. calculate how much money you would have if you sold every asset that your business owns and then subtract every liability from that sum. The other way is based on the ongoing status of the business wherein you look at the total value of your assets on the balance sheet and subtract your existing liabilities from them.

Once again, it is the sole proprietorship that poses challenges when it comes to doing the valuation of a business using this approach. Why the valuation of sole proprietorships is difficult using this method is because the owner in this case does not use the assets for business purposes only but personal as well.

You now know from the information given above that it is imperative for you to complete the valuation of your business. Whether it is for legal purposes or to sell your company at the right price, knowing the right value of your business is crucial. In the end, you should prepare your business financial documents regularly to help you find its value with convenience.

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Common Spending Mistakes in Small Businesses

easy way

There is no denying that running a business is not always easy. There are plenty of challenges that reverse growth or halt progress. Precisely, if these challenges have a direct impact on business finances, it may cause several other risks that your business needs to face. In other words, managing finances is pivotal to stay on top. And if you’re a startup, finance management becomes as important as serving existing customers or finding new leads.

But, if you are like business owners who find managing money or bookkeeping a daunting task, you must know your common spending mistakes to stay ahead in the business domain. This is one way you can mitigate not only financial risks but also monitor the cash flow of your business. In other words, by controlling your spending and cash flows, you improve success chances and your profitability also.

We have enumerated a few common spending mistakes to help you steer clear of the financial management of your business.

Common Spending Mistakes in Small Business

1.     Failure in Keeping Personal and Business Expenses Separate

This might sound trivial to you, but many business owners when entering the business world make this mistake. Remember that you are in the early phases of your business, it is vital to keep the expenses separate. Although sometimes you need to rely on the personal finances to support business expenditures, you need to ensure that you h have a separate budget for your business.  Also, relying on the personal expense to fund business may cause problems in the long-term.

Once your business is operational and starts serving the customers, separate finances by making a separate business credit card. Make sure you have a separate bank account for your business. Doing so can be extremely helpful in managing tax problems and avoiding bookkeeping confusion subsequently.   It will also empower you to evaluate potential or existing cash flow issues and overall business finances before they turn into a major problem.

2.     Not Creating a Budget

You might find easy budgeting, but you cannot deny its long-term value that outweighs all initial stress and effort.

Creating a budget means analyzing how much have you earned and how much you can invest. An organized budget helps you make informed decisions about all business matters that include everything from supplies purchasing, staffing, and training to inventory. Conversely, when you work without a budget, all these tasks become challenging and may cause you significant cash flow problems. This particularly affects your business if it works with seasonal shifts, and you need this cash flow to maintain business operations during the slow months.

Fortunately, there is a wide variety of apps such as Scoro, Centage, and Adaptive insights that can help entrepreneurs not only create but also maintain a budget. Not to mention how these budgeting apps keep track of your business expenses and send you a handy report at the end of the month or year. This allows you to do preparations for tax seasons and review performance.

3.     Failure to do Financing at the Right Time

All business owners know that working capital is an essential thing to operate the business and increase its growth. If working capital runs low, your business might face a lot of issues that not easy to resolve it right away, and that may vary from unpaid bills, mounting fees to lower credit scores.  Not only that but making payrolls also become a challenge while tackling such issues. The situation may create problems when it comes to retaining your potential employees. The problems like staff shortage, inventory, and supply management lead to decreased revenues and unsatisfactory customer services.

Ultimately, the failure to meet your business financial obligations can impact different areas of business. That is why it is important not only to identify but also address the cash flow issues and to prevent poor working capital in a easy way. It is better if you seek assistance about taking control of financial matters before they become problematic for your business.

4.     Ignoring Poor Credit Scores

Recognizing the right time to consider alternative financing options like a line of credit or loan is important. However, your due diligence will not benefit you if you fail to qualify as a borrower. That means, it is essential to be vigilant about both your personal and business credit scores.

It is also important because your credit scores impact your ability to use financing solutions with suppliers or vendors. The arrangements often help business owners easy fill the gaps in their cash flow.  Moreover, with a good business score, you can reduce the insurance premium and interest rate on your loan.

Sometimes, your credit scores contribute to secure many affordable financing terms; particularly when you opt for loans, credit cards, and line of credit.  The phenomenon is confusing for many people since they are advised to keep their personal and business financing separate as an ideal practice.  

However, it is important to understand that when you sign a lending agreement as a primary applicant,  banks use your credits to determine your eligibility, repayment terms, and interest rates.  Customers are sent an annual credit report, and it is good to use it for your advantage.  Although the business credit report is hard to obtain, you can get them through various platforms.

5.     Overspending on Startup

When starting a startup, you are naturally optimistic that your business will produce good revenues if you invest a large amount in it. This optimism sometimes leads to overspending, which is another common spending mistake. To avoid overspending, research carefully about how much inventory or staff you need to take a good start.

Final Thoughts

When running a business, you may face many financial issues, and to plan for all potential scenarios is not easy. However, when it comes to cash flow, various things can be done to avoid cash flow issues. The most important thing is to be proactive in whatever approach you use to manage your business finance.  Besides this, budgeting and healthy credit scores play an important role in keeping business finance issues at bay.

Thus, the given spending mistakes are very common when a business is in establishing phase. However, you can avoid them by planning and evaluating everything in advance.

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7 Tech Trends To Add To Your Small Business Startup To Attract An Angel Investor

Angel Investor

Angel investment is on the rise,and your small business startup needs to capitalize on all the opportunities at hand. Venture capitalists are on the hunt for business startups to invest in that are currently at the cutting edge of technology and taking risks with these advancements’ trends. You find that investors are eager to sink their investment dollars in these technologies so that they can reap the future returns. While the payoff might be big for an angel investor, these tech trends will also help your business startup to attract those funding dollars.

Artificial Intelligence

AI is not new to the scene, but for 2018, it is making a significant headway. By allowing companies to do more with less, AI will turn out to be a fundamental change in the way a company does business today and tomorrow. Startups that integrate AI into the fold will experience a shift in how they are able to perform routine tasks, freeing them up to focus on their customers. Angel investors see this as a win-win as they are able to invest in an advancing technology as well as a startup that is leading the way with its use. Your business startup will do well by having AI as a part of your repertoire and see more funding interest come your way in 2018.

Social Media

The uses of social media to enhance your consumer game is a boon for investors looking to find business startups that are succeeding in their customer engagement. While social media isn’t a newcomer technology, those that have a strong endgame will win big in terms of revenue sales. Social media is proving to be the technology platform that links us all together and gives business startups the recognition they need early on. Venture capitalists are enamored with its use by business startup as they see the power it offers and the benefits a business startup can take advantage of. Using social media to boost your business in 2018 will be key to gaining funding from an investor as they recognize the strengths it offers to your consumers.

Blockchain

Blockchain is another technology on the fringe waiting to bust on to the scene in a fury in 2018. It’s ability to provide a real-time ledger of transactions can give your business startup the transparency it needs to garner the nod of a venture capitalist waiting in the wings. Your business startup will benefit from Blockchain’s ability provide stable and error-free operations while angel investors gain by investing in a technology that has proven its worth. You’ll see funding offers from a series of investors if your business startup utilizes Blockchain to its full advantage within your organization.

Internet of Things

The Internet of Things is advancing at a steady clip for the New Year,and you’ll see IoT virtually everywhere you look. With consumers becoming more connected than ever, IoT offers an opportunity for new products and services that enhance IoT’s capabilities in the home, business,and community. Angel investors are savvy to the draw of IoT and how it is changing the way consumers interact and live their lives. They want to get in with business startups that are using this technology to move their business forward, engage with consumers, and improve their business operations. Count on IoT as a way to entice venture capitalists and secure funding in 2018.

Big Data

Data is everywhere these days,and it will only get bigger this coming year. Business startups such as yours will be able to use big data to understand every aspect, detail,and nuance of your customers, so you can create products and services they desire. With big data changing the way that business startups engage with their clients and provide unique customer experiences, it means plenty of evolution is on the horizon. Angel investors are keen on the possibilities all this available data can provide and know that companies that take advantage of the information can lead their industry in leaps and bounds. Use big data to enhance your business startup operations and stay tuned for venture capitalists to come calling with much interest and fanfare about your company this year.

Cyber-Security

While 2017 was a year that many will remember for its security breaches, this year provides a turn of events as business startup integrate or offer cybersecurity services to better protect their customer data. This cybersecurity will change how companies in all sectors operate and provide the level of security that is needed to protect that confidential information from getting into the wrong hands. Business startups that use cyber-security to protect their company or create products and services for others that help them secure their information will do well in the following year. Angel investors will show interest in these endeavors as the need for secure data protocol is growing without hesitation.

Virtual Reality

Also, on the fringe in 2018 is VR. This technology gives you the ability to engage with your customers in a new and exciting way. Through a more desirable customer experience, VR can help your business startupto increase its customer numbers as well as its revenue as VR improves workflow and access to customers all over your niche. Angel investors want in on AR as an investment opportunity, and your business startup will attract their attention now and into future with this technology at your helm.

Integrating any of these technologies in your business startup shows a strong sense of understanding and initiative to increase your customer base and profits this year and the coming year. Angel investors want to be able to get their hands wet with these new technologies so that they can be where the growth is with these trends. Think about how these technologies can help your business startup succeed in 2018 and secure the funding you need to get off the ground. You’ll be surprised at how much attention you receive by taking the first step with any of these technology trends and reap the rewards of investment into your company by an investor.

 

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What Sets a Small Business Apart from a Large Business?

 

Small Business

In the business world, the size of an enterprise often plays a significant role in its operations and overall perception. Small businesses and large businesses each have their own unique characteristics and face distinct challenges. While large businesses are often associated with scale and resources, small businesses possess their own set of advantages that make them stand out in the market. In this article, we will explore the factors that set small businesses apart from their larger counterparts, highlighting the strengths and opportunities that come with being small.

Personalized Customer Experience:

Small businesses have the advantage of providing a more personalized customer experience. With fewer customers to serve, small business owners and employees can develop closer relationships with their clientele. They can offer a higher level of attention, tailor products or services to meet individual needs, and respond more effectively to customer feedback. This personalized touch fosters loyalty, enhances the overall customer experience, and creates a strong foundation for long-term success.Flexibility and Agility:

Flexibility and Agility:

One of the key advantages small businesses possess is their ability to adapt quickly to changing market conditions. Without the burden of bureaucratic processes and complex hierarchies, small businesses can make decisions swiftly, implement changes efficiently, and capitalize on emerging opportunities. The lack of extensive layers of management enables them to be agile and responsive, ensuring that they can pivot their strategies to meet evolving customer demands and industry trends.

Local and Community Focus:

Small businesses often have deep roots within their local communities. They play an essential role in contributing to the local economy, creating jobs, and fostering community development. Small business owners have a vested interest in the success of their neighborhoods, supporting local causes, participating in community events, and building strong ties with residents. This community focus not only enhances their reputation but also helps them to establish a loyal customer base that values their commitment to the local area.

Niche Expertise and Specialization:

Small businesses frequently find success by specializing in niche markets or specific product lines. By focusing on a particular area, they can develop specialized knowledge and expertise, allowing them to deliver unique and high-quality products or services. This specialization enables small businesses to differentiate themselves from larger competitors, attract a dedicated customer base, and create a strong brand identity.

Entrepreneurial Spirit and Innovation:

Small business owners are often driven by a strong entrepreneurial spirit, which fuels innovation and creativity. They are more inclined to take risks, experiment with new ideas, and implement novel approaches to problem-solving. Small businesses can be hotbeds of innovation, as they have the flexibility to adopt new technologies, explore unconventional strategies, and challenge the status quo. This entrepreneurial mindset helps them to seize opportunities, disrupt established markets, and carve out their own niche.

Conclusion:

While large businesses may have the advantage of scale and resources, small businesses possess unique qualities that set them apart in the market. Their ability to provide a personalized customer experience, adapt quickly to changing circumstances, foster local community ties, specialize in niche areas, and embody an entrepreneurial spirit gives them a competitive edge. Small businesses play a vital role in the economy, driving innovation, and offering a diverse range of products and services. As consumers, let us appreciate and support the small businesses that bring creativity, passion, and a personal touch to our communities.

 

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The Right Way to Arrange and Manage Small Business Funds

Managing funds

The sustenance and growth of a business depends on how well it manages the funds available to it. The first step is to arrange the right funding based on a proper business plan. As a business owner, you don’t want to end up getting more funds than you need because you will then overly spend the money and end up with debt that’s hard to pay off.

The second step is to manage the funds properly and invest them for short-term and long-term benefits both. The biggest challenge for most new businessmen and entrepreneurs is capital. They either don’t know how to raise the money and fund their business or mismanage the funds they have available.

Raising Funds for a Small Business

Looking at how easy it has become to arrange funds for businesses today, there aren’t many excuses left for entrepreneurs as to why they were not able to start their business. The first thing you want to keep in mind when raising funds for your business is to avoid accumulating too much debt. Avoid any kind of debt if it is possible. If you have saved some money from the jobs, you have been doing, use that money to fund your business. If your parents or someone in your family is willing to fund your business, do not be hesitant to accept their help.

Among many good options to arrange funds for your small or starting business you have microloans. Microloans, as the name clarifies, are small loans. Since the amount is not that big, it is easy for the borrower to return this money. In most cases, microloans will not be more than $50,000. The good thing about such loans is that they are easy to obtain even if you don’t have the best of credit score. In many cases, you will get the loan amount credited into your bank account within two weeks after applying. However, the biggest drawback of microloans is that they have a huge interest rate associated with them.

Another way you can avoid burying your business under debt and still receive enough capital to fund the business is by having a partner on board. Rather than starting a sole proprietorship, you should consider making a partner. Making partners is easier when you already have a running business, even if it is a small one. The partner will come with their personal investment and help you fund your business. In fact, you could have a partner on board without offering any investment yourself. You can agree to be the service provider and allocate the partner to fund the business monetarily.

Managing Funds of a Small Business

Once you have arranged the funds for your business, it is time you get a grip on how you will spend that money. The most sensible thing to do here is to ask for investments only after you have created a business plan which clearly states how you will be spending the investment money. You don’t want to spend the invested funds randomly. Here is how you should manage your funds.

  • Separate Business and Personal Account

The first sign of your seriousness with your business is you separating your personal account from your business account. If you have use your personal account for your business as well, you will never know how much money you made from the business, how much you spent back on the business and how much you spent on your personal needs.

  • Be Cost Cutting

You don’t make a business successful by just increasing its revenue. The true art is to reduce the costs of running your business. Work on your B2B connections to partner with entities that can help you reduce the costs of manufacturing and production. Pinpoint the marketing campaigns that produce converting customers and stop spending money on campaigns that only bring in traffic but contribute nothing to conversions. Investors think the money you spend on your operations is money wasted. You want to spend money on productive processes. On the cost cutting side, you should use energy-efficient appliances, all-in-one office equipment, virtual office space, etc.

  • Hire Professionals

Sometimes, you have to spend more to save more. In some areas, it is the professionals who can help you the most. For example, when it comes to tax filing and the calculation of your tax deductions you want to have a professional on your side. Professional accountants can help you reduce your taxable income by working on your business expenses and figuring out any deductions and exemptions that your business qualifies for.

  • Create Cash Reserve

While you are managing your funds and running your business successfully, you want to put some money in cash reserves as well. It will be hard for you to manage a cash reserve amount if you are already making thin profits but the long term benefits of this sacrifice are huge. Your cash reserve saves you from obtaining loans and hence getting buried underneath debt.

Conclusion

Keep in mind that having a lot of money in your bank account does not guarantee a successful business. It does not matter how much money you have, a business owner who does not manage his/her finances properly will end up burning even millions of dollars without making a dime in profits. Use the options you have available today for funding the business. Do not think they will not work for you before you even try them.

Who we are:  Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com

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How Marketing Mix Can Help Small Businesses Grow

4P of marketing

If you are doing all you can to grow your small business but nothing is working, you might want to take a step back and reconsider your marketing mix. Doing the right type of marketing at the right place and at the right time requires some brainstorming, research and analytical approach. Take a look at what marketing mix is and how you can use this concept to grow your small business.

Understanding Marketing Mix

In simple words, marketing mix involves the techniques, tactics and strategies you implement to promote your product, service or brand. The marketing mix consists of four Ps: Promotion, Product, Place and Price. If you research the idea a bit more you will find that people are adding more Ps to the mix but their understanding is not as important as the understanding of these four factors. In the new definition of marketing mix, they have also included other Ps like: people, positioning, packaging and politics. Here is a basic understanding of the four essential Ps of the mix.

Product: It could also be a service—anything that you are selling

Price: The value that you want to obtain when you sell the item.

Place: The exact location where you sell the product.

Promotion: The mixture of activities and campaigns that you put in to spread awareness of your product and increase its sales and additional funds to your business.

To expand your business you have to achieve perfection in your marketing mix. You have to attain a balance in all the areas of the mix for a successful strategy. Working on attaining the right balance right from the beginning will help you lay the foundation of a business that faces least amount of struggle when it comes to expansion and growth.

Using Marketing Mix for Small Business’ Growth

To create the right marketing mix, you have to understand your product at its core. When it comes to the product, you have to have a full understanding of it. What is your product? What problem does it solve? Even if your product solves a problem, have you designed to in a way that a potential customer would look at it and know what it is supposed to do? Once you know your product well, you can get to the other Ps of the marketing mix. Here is a little understanding of how marketing mix works.

  • Tying Product with Price

It can be one of the toughest things for most business owners to do. While it is a job for the marketing department, you don’t always have a dedicated marketing department when you are still a startup. When you are about to price your product, you have to consider a lot of factors. First, what type of audience does your product appeal to? What materials have you created the product with? How much competition you have in the market? What is the buying power of the market for which you have designed the product? It is only after taking all of these factors into consideration can you price your product appropriately. Keep in mind that when you are a new business, you cannot charge your customers for your value because there is no value for customers in buying your product at this stage.

  • Tying Price with Place

You cannot be thinking of one individual component of the marketing mix at one time. You might have created the right product but the question is “are you selling it to the right people?” What if your product is more appealing for teenagers but you are targeting people over the age of 35? What if you know your target audience but are placing the product in the wrong places? Maybe your item is more sellable online but you are putting it on retail store shelves. Now that you know the “place” where you need to sell the product, you have price the item aptly too. For example, a product that you have designed for teenagers should be affordable within their pocket money.

Moreover, your product might be appealing for a niche market but you might have priced it too low. As a result, too few people would buy it and your revenue will not cover your expenses. You have to be sure that you cover your costs within the limited number of purchases that occur.

  • Tying Place with Promotion

When looking at place and promotion as a combination, you have to be sure that you are promoting your product in the right place. Is your product more appealing for women than it is for men? If yes then you should consider promoting it on social networking platforms where women are more active e.g. Pinterest. Moreover, your promotional activities should match the place. For example, if you are promoting in an area where there are Oakland Athletics fans, you don’t want to be wearing San Francisco Giants’ t-shirts and gear.

  • Combining All the Ps

Once you have created the right product, priced it perfectly and strategized your promotional campaigns, you have to bring the product in the right place so all the Ps work successfully. Creating the right product, pricing it right and promoting it with passion but in the wrong place will result in disappointing response. Just because you are good with one of the Ps does not mean you will be successful in others as well.

Now that you have a good idea of tying the Ps together, you should have a complete road plan of how you are going to sell your product. It will require a lot of working at initial stages. You cannot know your market unless you do some surveys and spend time collecting data about the market. At the same time, you have to perform a thorough research of the market to know how you will price your product. When it comes to promotion, you will have to come out of the conventional methods and think more digital. You might as well set up a dedicated team for social media marketing and website analytics.

 

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Some Unnecessary Small Business Expenses to Avoid

Business Expenses

When you start a business, you have to be extra careful with how you spend your capital. There are many ways for small business owners to increase their profits. Reducing their costs is one of the simplest and most effective ones. A lot of the times, entrepreneurs would add costs to their budgets that they don’t necessarily have to make. It might appear to them that these are necessary expenses when that’s not the case. They can add many of these expenses once their business has established.

Expenses That Small Businesses Should Avoid

Excessive Advertising

Yes, advertising is quite important for businesses, but excessive advertisement is not. It still makes sense for large businesses to go full-on with advertising because they have the budget to do so. However, when it comes to small businesses, they must do intelligent and selective advertising only. Their first course of action should be to identify the advertising channels that work best for them. Just because you are a restaurant at the corner of a street does not mean you have to use awnings, vinyls, neon signs, and all other types of materials for advertising purposes. Pick the ones that work and skip what doesn’t.

Too Many Work Hours

You don’t necessarily have to follow the trends of your competitors to compete with them. It does not matter how good they are, even the best ones can make mistakes at times. Many business owners choose to keep their premises opened for customers for long hours. They will open the business early in the morning and close it late at night just so they can serve more customers. However, one must do cost calculation before taking such a step? What if you are getting only five customers in the first three hours of the business and five more at the last two hours?

Now imagine the cost of utility, wages of your employees, etc. Are you covering the costs of keeping your business opened for five additional hours with only 10 customers? Even if you want to continue this way, you better test it for a week only. If the response is cold, you should quit this practice as soon as possible.

Pursuing the Best of Everything

The idea sounds great but is not the way to go about doing business when you are in your early stages. You should spend your money on things you need, not the things you want unless you have the budget to do so. If you are renting space for your office, you should look for a place that you can easily afford. Going for the best location in the most commercial area will cost you a lot of money. You can save your money even when it comes to internal equipment. Why buy new couches, seats and brand new computers when you can do with high-quality used equipment?

Why go for a printer with fancy looks and capacity to print hundreds of pages in a minute when you won’t ever need that many printouts at a time? Go with simple and beautiful when it comes to decorating your office. You don’t want to spend your budget on things that are not going to yield any benefits for your business.

Hiring IT Staff

IT is integral to any business today, tech or non-tech. However, it does not mean you have to have an IT team on board. One of the beauties of modern technology is that it allows you to outsource a lot of the business processes. The best thing about outsourcing business processes is that you can save a lot of money by doing so. Managed IT services are a perfect way for you to save IT costs while benefitting from expertise of the best professionals of the industry. Rather than paying thousands of dollars to three or four IT people, it makes more sense for small businesses to outsource their IT processes for a small monthly fee.

The good news is that you can outsource almost anything IT-related. From basic helpdesk to on-demand data officers, IT outsourcing can cover a lot of ground for you.

Unnecessary Debts

Taking loans when starting a business is imperative for your growth and to have enough cash in hand to support your operations. However, there are more ways to fund your business than you might realize. Many small business owners follow venture capitalists and conventional banks when it comes time to fund their businesses. However, crowdfunding has emerged as an amazing funding option for startups and small businesses. The good thing about crowdfunding is that you do not necessarily have to offer equity to the investors in your business. Sometimes, you can just reward them with a sample of your product.

Hiring Only Full-time Employees

If you own a small business, you might want to consider hiring interns. Interns can benefit your business in many ways. First, you do not have to pay them the salary of a full-time employee. Second, you can ask them to do a lot of the mundane tasks that otherwise affect the productivity of your full-time employees negatively. While it might not be the best practice, in some countries of the world they have free internships as well wherein you do not have to pay your interns. However, that’s not the right thing to do, and you should compensate their work to keep them motivated.

Conclusion

You should consider avoiding these expenses if you are a small business owner or about to be one. You can always take advice from those who have their own businesses to figure out what’s necessary and what’s not. Keep yourself up-to-date with new technological advancements. Taking advantage of modern software and hardware solutions can help you save a lot of money. Take the example of a printer with duplex printing option. You could cut your paper costs in half by printing on both sides of the paper. In the end, look into your current setup and operations to see what some expenses are that you can easily live without.

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8 Silly Ways Small Businesses Waste Their Marketing Budget

Marketing Budget

Irrespective of your business size, your business’ marketing budget is a precious resource. It is your investment, which can help you grow your company’s business and stock value. So you surely want it to give results for the growth of your business.

Large-scale businesses usually have high marketing budgets as compared to small-scale businesses. Small companies normally allocate a small budget for marketing due to their limited resources. It means that if you are a small business owner you do not have the finances to put to waste.

As a small business owner, you need to ask yourself these questions:

“Are you spending your budget on the right tactics?”
“Are you making effective and optimal use of your budget?”
“Is it working for your business?”

To put in simple words, are you wasting away your marketing budget?

Adobe researched how effectively companies spend their marketing budgets. It was not a surprise that most of those companies were not doing a good job.

Do you feel that you also fall in the category of these small businesses that are not spending their marketing budgets the right way?

Then you should continue reading to know the silly ways in which you might be wasting your marketing budget and how to fix them.

Use of social media for building following:

Undoubtedly, social media is a great tool for small businesses to use for their marketing. But most businesses start their marketing on social media without a proper strategy.

Gone are the times when Facebook marketing was free and reach was high. Now you need to invest money and efforts in Facebook marketing thanks to its evolving algorithm. Small businesses need to spend on the paid advertising to make their business ads visible and get their content seen by the target audience.

How to fix this?

The price of Facebook ads is not too high but due to increased competition, it is likely to get higher shortly. This means you may need to spend more money to make your content visible to your followers. Presently, what you can do is use your social media investment to build an email list of your followers. This will allow you to have direct communication with them. Give incentives to your followers for sharing their email addresses.

Expecting instant and high-end results:

Many small businesses begin with a strong ambition, but most of them fail within a few months. The problem lies in their unrealistically high expectations. They want to see results in just a few months following their launch. And when they fail in getting those results, they back out.

How to Fix this?

As a small business owner, you should expect a ramp-up period of two years. If this looks impossible to you, smartly create a marketing strategy to keep your marketing engine fueling and running. Then, create as much influential and informative content as you can afford to create to promote your business.

Inability to understand your target audience:

To grab the attention of your audience, you must understand the behaviors and attitudes of your potential customers. Otherwise, you are just making your marketing budget go down the drain.

A Fix:

KNOW your target audience, their behaviors, and attitudes before you even create a content strategy. Then figure out ways to communicate with them effectively.

Not realizing how you succeeded in attracting your valuable customers:

You can refer to them as your loyal customers or valuable customers who come back to you again and again. You should know what marketing techniques and content brought those invaluable customers to your business. These top 20% of customers may give you nearly half of your business revenue.

Spending a significant portion of your advertising campaign: You can find lots of marketing tactics to give a try. Some of these may perform great, but in most cases, they may not work for you especially when you have a limited budget to give a one-time shot. Small businesses should avoid diving into big-time five-figure spending on marketing campaigns.

What is the Fix?

You need to adopt a test and trial method before investing big. First, invest in $1000 or less. If that particular marketing tactic does not work at an investment of $1000, it is highly likely that it will not work on $1500 or more.

You are not keeping proper track of your marketing investments and efforts:

Many small businesses set up a Google Analytics account, but don’t use it. In case, some are using it they don’t know how to make optimal use of it and get the benefit. Same is the case with Google AdWords for PPC. You may buy the space for ad campaigns, but end up wasting a lot of money without analyzing how those ads performed.

An Easy Fix!

You can easily learn Google Analytics tracking and AdWords through free online courses on Google. Setup conversion tracking for your advertising campaigns in Google analytics. This enables you to effectively see and analyze the activity of your potential customers on your website. If you haven’t done this yet, do it right away!

You are trying to be the jack of all trades:

Small business owners with limited resources often try to manage multiple things alone. You cannot afford to hire a complete marketing staff, but just one or two people for it. You cannot manage the entire marketing strategy all alone.

A simple solution!

Keep your focus on understanding your audience, on which platform you can mostly find them and which marketing tools and content they like.

You are following the same marketing strategy for years:

This is the biggest mistake because the marketing landscape is evolving at a rapid pace, nowadays. While focusing on the above-mentioned things, it is also recommended that you try a few new techniques every year.

The solution:

With the evolution of marketing tactics, you need to evolve as well! Always remain on the lookout for the latest marketing techniques that fit your low budget.

Who we are:  Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com

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5 Outside The Box Ideas For Marketing Your Small Business

ideas

Introduction

If you think you cannot market a product with a small budget, then you are mistaken. To run a successful business, whether it is small or big, you need to implement top-notch marketing ideas strategies. So, it is essential to take the time and plan effective ways to market your product or service. Take note not that every marketing technique requires a hefty budget.

Therefore, you can find budget-friendly ways to target an audience. In the light of this, here are five outside of the box marketing ideas for your small business.

Develop a Loyalty Program

Loyalty program ideas are simple. They create interest based on top of a brand’s value. So, if you love buying a particular brand, and if you’re offered something extra, such as 30% on your next purchase, you will most likely take advantage of the opportunity. Hence, announcing 50% flat off, coupons or different consumer-friendly offers can provide the limelight to your business that it needs. Moreover, consumers love going to the same brand if it sells high-quality products. One of the best ways to develop a loyalty program is to provide better quality so that consumers come back for more. As a small business owner, you need to retain existing consumers along with attracting new customers. This step is crucial to growing your small business further. When you reward your existing consumers, they will likely return and purchase more.

Plus, if a customer returns to your store more often, it will increase sales, brand image, and brand loyalty at the same time. Therefore, opt for customer loyalty programs as they work as a marketing tool as well. If your existing and satisfied customers recommend your brand, it will help you reach a wide market, influence your customer base, and of course benefit your startup in an excellent way.

Promote Customer Engagement

Sometimes a simple tactic like talking to your customer casually can feel engaging to them. You might ask; ‘would you like to see more items in this range?’ A positive response to this is an open invitation to talk to them, ask for their feedback, their thoughts, and how you could probably make things better for them. You can also use social media to boost your customer engagement. Social media profiles allow you to interact with a wider audience in a short time.

You can always use social media profiles to ask for suggestion and answer queries using direct messaging. Moreover, asking your customers to review your official page on Facebook is another quick way to give your small business a boost.

Moreover, when launching a product go live on your Instagram and Facebook profiles and keep your audience engaged. When you stay active and interactive on public profiles, it will let people know about your business ideas. Apart from this, using social media in the right way can benefit your business in numerous ways. For instance, you can engage the audience by starting a selfie campaign, which also encourages them to share or post more. You should customize hashtags and encourage the audience to use them in their post along with tagging. This is also an effective way to target a new audience.

Personalized Incentive

Customers love to be treated well, and this is for those customers that have value. For example, one valuable customer might be a regular one at your outlet, and another might buy bulk items from you periodically. Both types of customers could be justified recipients of personalized gifts from your brand. You can add complimentary items or products in their orders. It will show that you value and cherish your regular customers. Moreover, organizing a giveaway is another fun way to treat your consumers, especially if they are outside the country. You can arrange a giveaway in partnership with another small business to reach new people.

Host a Webinar

Hosting a webinar shows your expertise in your niche. Engaging experts in this webinar will show how connected you are. Also, the more people you successfully invite as participants will also demonstrate how much people already follow you and trust your expertise. Moreover, a webinar can do wonders for your business. According to a survey, 58% of marketers prefer to use webinars for promotion. Many successful marketing strategists even think that marketing on a webinar is great to reach a wider audience.

Data from different surveys have revealed that up to 40% people become qualified leads after attending a webinar as it provides the information they need. In fact, webinars retain 30-40% more attention so there is a chance that attendees will make a purchase.

Elevate content distribution        

Content production and distribution go hand-in-hand, and your content is only as good as your distribution mechanism. Leveraging major social media platforms like Instagram, Facebook, Snapchat, and YouTube is crucial. This technique is ideal to share valuable, relevant, and constant content on your social media.

It helps in two ways that are significant for any small business. First, it helps attract or target your audience. Second, it will help them turn into potential leads. Make sure your content provides information and resonates with the audience.

You should use blogs and social media posts to distribute your message. Also, the content you share should not be the typical advertisement that forces people to make a purchase. It should speak to them on personal level so they trust you and your brand.

Concluding Lines

Marketing a small business may seem a hassle at the beginning. But, if you opt for outside the box marketing strategies, you will get the desired outcome even on a shoe-string budget. For marketing, you only need to develop and leverage top-notch social media platforms and keep them updated. Other strategies like casual interaction are a smart way to identify your shortcomings and work on them to take your small business a step ahead. If you or are planning to launch a small business, try these ideas and make a difference.

Who we are:  Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com

You can review our featured partners to help your success with your business or project.