Category: SME
Can Your Small Business Afford Not to Have a Web Site?
I’ve been accused of being opinionated by more than one person in my life, but try as I might to work on that part of my personality, it remains pretty much the same. So, in this article, I’m going to discuss my ìopinionî on one reason why, even if your target market is strictly local, your small business can’t afford not to have a web site.
A few statistics from Statistics Canada to start us on our way-. In 2003, there were about 12 million households in Canada, and of those 8 million had regular access to the internet from work, home and/or school. Around 60% of the total households had a computer and internet access at home.
Ok, so now we know how many households had access to the internet, but what were they using it for? Almost 90% used the internet for browsing, but more importantly for our discussion- 34% used the internet for purchasing goods and services, and by the way, that’s almost double 1999 figures for purchasing goods and services on the internet.
Industry Canada reports that in 2000, Canadian ecommerce sales were $7.2 billion, a whopping 73% increase over 1999 numbers. And no, it’s not a typo, it really is $7.2 BILLION! I’d say there’s a pattern brewingóinternet usage and sales are increasing rapidly.
And, according to Industry Canada, Canada captured only about 4% of global e-commerce in 2000. Now, numbers may not be my strong suit, so feel free to correct me if I’m wrong, but doesn’t that mean there was 180 billion dollars spent globally in ecommerce?
Let’s look for a moment to the United States. www.tamingthebeast.net reports statistics and forecasts collected during December 2001ó157million online users forecast to spend $47.8 billion in online retail revenue in 2002. By 2006, the forecast is 210 million users spending $130 billion in retail revenue.
The numbers alone will probably convince many people to invest in a small business web site, particularly if they’re in an industry where their target market isn’t restricted to a purely local one.
But, you say, my business is just a little local shop. Why should I get a web site for my small business? What good will the internet do me? I’ve heard that one before. In fact, the guy I’ve heard it from most is David.
He’s the guy with the auto shop in my article ìI Don’t Need a Business PlanóDo I?î Long story short, his mother in law finally convinced him to write a business plan and his business is making some money, but in my opinion, it could do better with some marketing. I’d really like to convince him to spend some marketing dollars (he’s a little cheap sometimes), but so far, no dice. Anyway I digress.
Let’s use David’s business as an example. So, his business is in Saskatoon, a city with a population of just over 200,000 over five years of age and almost 90,000 households in 2001, according to Statistics Canada. Nearly every household has at least one vehicle in Saskatoon, so that means there are around 90,000 potential vehicle problems for David’s shop.
Of course, not every vehicle is going to break down in a year, and David isn’t going to get all of them to use his shop, but you get the idea. And mind you, some of them will break down more than once. A certain 1988 Jeep YJ comes to mindÖ
In Saskatoon, 72.5% of households had access to the internet in 2003, so around 65,000 households had internet access. And that’s not including the rural population surrounding Saskatoon who also have vehicles that need a mechanic from time to time. Now, let’s say David goes marketing-crazy and spends $2500 for his web site (which in my opinion is way too much money for a static small business web site).
But it does no good to have a web site if it isn’t found. Statistically, when people enter a word or phrase into a search engine, they’ll stop looking after the third page. That means, that in order for your web site to be positioned so people will actually click on it, it needs to be in the top 30 web sites for your particular key words or phrases.
So, lets assume that the $2500 David spent includes some good search engine optimization. His web site copywriter makes sure to research and find relevant keywords, and uses them well in his site.
She adds his site to small business directories, and does more of her seo magic, and low and behold, three months in, David’s site comes up #2 in a Google search for ìauto repair Saskatoonî. Now there are a potential 65,000 clients for David’s business because they’ll find it in a search engine.
If he only reaches .1% of those 65,000 (not 1%, but point 1%), he could have 65 new clients, and you know your bill is going to be more than 100 bucks every time you take your car to the shop, but assuming just $100 for an average bill, he’ll gross $6500, making that $2500 web site money well spent. I’d be willing to bet he’d make that much on maintenance alone, never mind repairs.
Now that I think about it, I’ve never approached David about a web site from this angle. I think I might show him this article. He’s a logical sort of guy, and it just might convince him to get one.
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Blend Your Strengths with Small Business Needs
If you are looking to start a small business of your own, there is a proven process that is necessary to start off with. Many creative people have great business ideas, but their approach to planning is ineffective and eventually flops. First and foremost, you have to find a market that is a good size. Now what does this mean exactly? Finding a niche market that is a reasonable size entails pinpointing one that is big enough to make a profit but small enough for the resources of a small business and one that does not compete with large corporations.
Two main mistakes that entrepreneurs make in finding small markets are targeting a market that is too broad and targeting a niche that is already heavily exploited. What you decide to sell must connect product to target audience or you will not be successful.
To start off with, choose your own unique area of expertise. What are you good at? What do you have experience in? Use your education, your skills and the people you know who could help you transform your idea into reality. If you have many areas of interest and are not sure which one would be the most profitable, a little more research will be needed. Consider how it will be possible to convert your education and skills into money-making opportunities. Research your surrounding marketplace to see what is needed in your area.
Now if you are trying to find small markets online, be forewarned that this can be tedious and time-consuming. You will first have to think of a list of possible target audiences, then take your first idea and research an exhaustive list of keywords and keyword phrases that people in that target audience are using for information on their desired product. Next, one must research all keywords and phrases for relevancy and then study which keywords on your list might lead to other niches that will need future researching. Then, you need to compare all your keywords to web pages to evaluate the present competition. You will use all your information to narrow down your list to keywords and phrases that have the most online traffic and those that are the least exploited. If your small market does not appear to be profitable, you must start the entire research process over. If you do find one that seems to be a money maker, you then must focus on finding ideas to profit from.
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5 Key Components Of A Small Business Acquisition Loan
Major Challenges To Securing A Business Acquisition Loan
Qualifying for a small business acquisition loan can be quite an ordeal to say the least.
If the business being sold is very profitable, the selling price will likely reflect a significant amount of goodwill which can be very difficult to finance.
If the business being sold is not making money, lenders can be difficult to find even if the underlying assets being acquired are worth substantially more than the purchase price.
Business acquisition loans, or change of control financing situations, can be extremely varied from case to case.
That being said, here are the major challenges you’ll typically have to overcome to secure a small business acquisition loan.
>>> Financing Goodwill
The definition of goodwill is the sale price minus the resale or liquidation value of business assets after any debts owing on the assets are paid off. It represents the future profit the business is expected to generate beyond the current value of the assets.
Most lenders have no interest in financing goodwill.
This effectively increases the amount of the down payment required to complete the sale and/or the acquisition of some financing from the vendor in the form of a vendor loan.
Vendor support and Vendor loans are a very common elements in the sale of a small business.
If they are not initially present in the conditions of sale, you may want to ask the vendor if they would consider providing support and financing.
There are some excellent reasons why asking the question could be well worth your time.
In order to receive the maximum possible sale price, which likely involves some amount of goodwill, the vendor will agree to finance part of the sale by allowing the buyer to pay a portion of the sale price over a defined period of time within a structured payment schedule.
The vendor may also offer transition assistance for a period of time to make sure the transition period is seamless.
The combination of support and financing by the vendor creates a positive vested interest whereby it is in the vendor’s best interest to help the buyer successfully transition all aspects of ownership and operations.
Failure to do so could result in the vendor not getting all the proceeds of sale in the future in the event the business were to suffer or fail under new ownership.
This is usually a very appealing aspect to potential lenders as the risk of loss due to transition is greatly reduced.
This speaks directly to the next financing challenge.
>>> Business Transition Risk
Will the new owner be able to run the business as well as the previous owner? Will the customers still do business with the new owner? Did the previous owner possess a specific skill set that will be difficult to replicate or replace? Will the key employees remain with the company after the sale?
A lender must be confident that the business can successfully continue at no worse than the current level of performance. There usually needs to be a buffer built into the financial projections for changeover lags that can occur.
At the same time, many buyers will purchase a business because they believe there is substantial growth available which they think they can take advantage of.
The key is convincing the lender of the growth potential and your ability to achieve superior results.
>>> Asset Sale Versus Share Sale
For tax purposes, many sellers want to sell the shares of their business.
However, by doing so, any outstanding and potential future liability related to the going concern business will fall at the feet of the buyer unless othewise indicated in the purchase and sale agreement.
Because potential business liability is a difficult thing to evaluate, there can be a higher perceived risk when considering a small business acquisition loan application related to a share purchase.
>>> Market Risk
Is the business in a growing, mature, or declining market segment? How does the business fit into the competitive dynamics of the market and will a change in control strengthen or weaken its competitive position?
A lender needs to be confident that the business can be successful for at least the period the business acquisition loan will be outstanding.
This is important for two reasons. First, a sustained cash flow will obviously allow a smoother process of repayment. Second, a strong going concern business has a higher probability of resale.
If an unforeseen event causes the owner to no longer be able to carry on the business, the lender will have confidence that the business can still generate enough profit from resale to retire the outstanding debt.
Localized markets are much easier for a lender or investor to assess than a business selling to a broader geographic reach. Area based lenders may also have some working knowledge of the particular business and how prominent it is in the local market.
>>> Personal Net Worth
Most business acquisition loans require the buyer to be able to invest at least a third of the total purchase price in cash with a remaining tangible net worth at least equal to the remaining value of the loan.
Statistics show that over leveraged companies are more prone to suffer financial duress and default on their business acquisition loan commitments.
The larger the amount of the business acquisition loan required, the more likely the probability of default.
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7 Key Tactics For The Small Business Owner
For most folks, owning your own business is a dream come true. The freedom of being your own boss and succeeding to the best of your ability are facts of life for the small business owner. Sure, there’s more stress than what you probably imagined when you were creating your grand plans, but with a little strategy and planning you can overcome any tough spot you get in. There are 7 tactics developed by successful marketers that are sure to make your business as successful as theirs.
1. Create A One of a Kind Selling Point
If you want to stand out from the crowd, create a unique selling proposition that stresses the benefits the customers will receive from doing business with you. Will they get faster service? Go ahead and dramatize it, but keep the customer at the focus…”Get free overnight delivery!” Hey, it tells the customer…you get quick service and a discount on shipping. Two definite benefits in one statement.
Why should someone buy from you and not your competitor? I hate to deal a blow to your ego, but it really has nothing to do with you , your product, or your service. Yeah, its a little self-centered, but customers are attracted by offers that point out the things that benefit THEM.
Don’t go out on a limb to create new products and services to get attention. Just, add a special benefit to the ones you already have… maybe it’s quicker service. The most effective things to emphasize are benefits that your competition cannot or is not willing to give.
2. Use Testimonials
Hey, we all know that business owners think their product or services are the best thing going, but it’s what the current customers think about it that really matters to your prospective customers. They’re the ones who see things from their point of view… what they have to say about the business has an impact.
Testimonials play an important part in advertising – especially for small businesses. Yeah, big businesses with well-known names don’t have to worry about it, but small companies can use testimonials as marketing tools to build credibility.
Think about it…how else can we gain credibility than by creating a group of satisfied customers and shouting what they have to say? Let’s look at some ways we can make testimonials an effective part of our marketing campaigns.
3. Upsell
Upselling is one of the most successful marketing trends today. Everywhere you go, someone is trying to get you to buy more. From McDonalds with its supersize options to clothing stores that try to sell you shoes to match your outfit, everyone’s jumping on the band wagon. Why? It works!
Your customers already know that you have great products and provide satisfactory service. They trust you to come through for them. Think about it… it’s much easier to make sales to someone you already have a relationship with.
Use every opportunity to increase your sales volume within the customer audience you already have. Do you have a product that goes with the one they are purchasing? Offer it to them at the register. It’s a proven and effective method for increasing sales. You may be shocked at the additional sales you can generate from those who are already buying from you.
4. Make Your Price Seem Smaller
Divide and conquer… The old war tactic works in marketing too! When the price seems too steep, break it down into “buyable” size bites. An $120 item is only 12 low monthly payments of $10. A $365 purchase would only cost $1 per day. Now that sounds affordable!
5. Paint The Benefits Pretty
Customers buy because they want to enjoy the benefits of the purchase. A lady might buy a dress because she wants to feel sexy, or a man will buy a book because he finds pleasure in reading. Emotions are the key element that drives purchases.
Use word pictures to stir up the emotions that will instigate the sale. Let them “feel” the benefits, and they’ll be more apt to head for the cash register. Put them where you want them.
6. Create Attention Getting Headlines
Are you ready to capture your reader’s attention with great copy? The headline is the place to start. How often do you scan the newspaper’s headlines before you decide whether or not to read the article? Yeah, that’s where we lose or gain the reader’s interest, so it’s a pretty important part of the advertisement.
A good headline should telegraph its message in twelve words or less. Double check those headlines. Do they make a promise of a positive benefit, or ask a provocative question? Don’t settle for less than attention grabbing statements.
7. Provide An Offer They Can’t Resist
Is your deal too good to pass up? If not, you need to improve it. Hey, I’m not talking about cutting prices even more…you’ve still got to make a profit. You can make the deal sweeter just by increasing the readers knowledge of the value of the product, or adding bonuses that are perceived as valuable, but cost you little.
Motivate buyers with expirations. Yeah, an open ended offer encourages procrastination…which leads …yep, nowhere. When the customer knows he has until Saturday to purchase an item he’ll pay more for on Sunday, he’ll make it a priority to head for your shop.
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Small Home-Based Businesses — Five Simple Steps to Success
Did you know that, in Australia, 60% of small businesses fail in the first twelve months? For those of us who would like to start a small business — maybe even work from home — that’s a very discouraging statistic.
Does that mean that your business idea is doomed to failure? Far from it! There are steps you can take that greatly increase your chances of success. With a little time and some serious research you can hit the ground running. Let’s start from the beginningÖ
The bright idea
First, of course, you need to come up with an idea. Typically, business opportunities can be divided into four groups:
1. Offering an existing product/service in an existing market. 2. Introducing an existing product/service to a new market.
3. Offering a new product/service in an existing market
4. Introducing a new product/service to a new market.
At this stage of the game the only limit is your imagination. Inspiration can come from anywhere — maybe you have a hobby that you’d like to turn into a full-time job; you may be on the receiving end of bad service one day and decide to try doing it better yourself; or you may have a talent that you’d like to capitalise on.
Once you’ve come across something that you’d like to do, it’s time to take a look at the market and see what’s on offer.
Passing the test
So you’ve had a great idea and you’re keen to roll with it; now it’s time to put it through its paces. For the purpose of the exercise, let’s say that you have a passion for healthy living, and that you want to distribute a range of lifestyle accessories that promote healthy living with a do-it-yourself approach.
Ask around: Is there a market for products that promote healthy living? What sorts of products are available? Who would you be competing with and what do your competitors offer? Do you have the necessary skills to run such a business and — more to the point — what would those skills be? Where would your business be located?
Once you’ve answered those questions you should have a fairly clear picture of what your business will look like.
You source some products and decide to do some further research into the range of lifestyle products offered by a company called Vitality 4 Life. Your own life experience plus some work you’ve done as a dietician has given you the necessary skill sets, and you think that you’ll be able to work from home, giving you more time for family. There is an existing market, but there’s room for expansion. Now it’s time to take a closer look.
To be or not to be?
It’s time to get down to the nuts and bolts. You don’t want to jump into something feet first and find out the hard way that the budget just doesn’t work.
To get started, sit down and work out if you need to hire staff, which means paying wages.
If you lease a premises you’ll need to be able to pay the rent, and your location will have to be suitable for your business and target market (which also means that you’ll have to think carefully about just what that target market is). You’ll also need to work out the likely demand for your product/service.
OkÖ you’ve worked out that there is enough demand for good quality juicers, sprouters, water filters and other high end accessories to take a shot at a distributorship as a home-based business opportunity. Now you need to make some marketing decisions.
Look at me! Look at me!
Advertising can be costly so you’ll want to be sure that your advertising budget is spent wisely. That means more market research, this time one-on-one. Profile your customer groups so you can aim your marketing at the right group/s of people.
Draw up a questionnaire (a short questionnaire — people run out patience if you ramble for too long) and hang around outside a few of the local gyms (for our particular example). Come up with a mixture of open questions (What do you think ofÖÖ..?) and closed questions (Do you have a gym membership? Yes/No.); sliding scales can be useful too.
For our health accessories business, a good question might be ëHow did you hear about this gym? Radio, tv, newspaper, word of mouth etcÖ’ Such a question would then give you an indication of the types of media that your target group responds best to.
Choose a business name, print up some business cards, buy some stock and get ready to trade!
Measure it, manage it!
A teacher of mine made the point that, in business, if you can’t measure it you can’t manage it.
You need to be able to plan ahead, and to do that you need to know — or to be able to accurately predict — your total sales. The equation is simple: number of customers x average sale x frequency of visits per customer per year = total sales. Remember it, revise it often, measure your business and you’ll be able to manage it!
Keep an eye on your bottom line and, most importantly, always be aware of your cash flow — the cold, hard cash that you have in the bank. Allow for invoice periods (14 days, 30 days etc) when you’re planning your budget.
The market place has a life of its own, and no one can prepare for every contingency. Put some thought into your idea; make sure that there’s a market for what you’re offering; research, research, research; promote your business effectively; always know what’s going on in your bank account and don’t forget about cash flow!
It’s not perfect but, if you follow these few simple steps, you’ll be miles ahead of many new small business ventures. If you’ve heard of a great home-based business opportunity, or have a product or service of your own to market, you’re off to a great start!
5 Simple Steps to Small Business Success on the Internet!
For years, the website design market used to fall into three separate entities for website design and development: (i) graphics and animation studios, specializing in custom graphic design and creative animations, (ii) website marketing/promotion firms, (iii) Web programming companies specializing in database-driven website development. Nowadays, however, you get to see a fusion of these three entities in several dynamic Web Development and Promotion companies operating from any part of the globe. These web design, development and web promotion firms are virtually allrounders that cater to a diverse range of clientele, include those coming up for creative web design, web databases CRM / ERP as well as for SEO (search engine optimization) needs.
Most small business firms all over the world heavily rely on the services of such web development firms as they usually cater to small business website design by providing web based marketing methods that small companies can afford due to small budgets. Depending on the effectiveness of such web-based marketing, clients often see incredible successful results from clicks to conversion. There are some case studies which show that utilizing their marketing equation; some sites have gone from 10 leads a month to 300 leads. However, to achieve this is easier said than done. Web marketing firms that create a full plan for their clients using both the strategic and tactical methods crafted by specialists/consultants in turn are able to give small or large businesses increased sales. After all, that is the reason one can zero down on in order to be in a business, right? To have more sales and offer value. Therefore, the objective behind any web development or website promotion project is to create a unique selling proposition through your website that can set you apart from your competition so your customers should only think of doing business with you, regardless of price.
Small business firms today look forward to the professional creative website design and strategic web development and web promotion companies for the simple reason that they want their site to have the look and usability of a Fortune 500 company site without having to spend huge bucks for it. Yes, it is definitely considered a plus if the website is designed as a tactical marketing tool that aims to engage and educate their clients in turn. And most of these businesses have a concern in their minds: can their web site provide a means to gather analytical data for them to offer better service for all?
Yes, definitely they can. However, for this, optimal, effective website design strategies need to be incorporated. In a word, small business clients should be enriched with at least some of these features in order to fetch more conversions:
* Cutting-edge small business website design, tailor-made to provide broad market exposure of the products and services to potential clients.
* Highly scalable digital website designs, aimed at boosting up the growth and realization of the full perspective of the small business houses.
* Small business website design strategies including full-featured e-commerce solutions, to help these businesses deploy cost-effective, powerful e-commerce stores.
* Customized search engine optimization services, based upon individual needs and goals.
However, there are umpteen so-called ‘cheap, quick’ solution-providers, and any small business firm must think twice before taking the plunge with them. Ideally, one should always trust a professional web development firm that gathers relevant information about their clients’ business through hours of discussion, clear up ideas about the requirement, nature and goal of the clients’ business. Based on these details, experienced, skilled web designers and developers carry out extensive research to find out the best small business website solution. On the other hand, creative, innovative content writers create specific and unique content for small business website requirements, thereby enhancing business prospects. Finally, website maintenance and search engine optimization techniques that comprise scientifically proven techniques available at a competitive price are sure to give your business a boost. Flash Presentation, Multimedia Presentation, Multi-lingual website development and E-Commerce integration solutions complement these customized website solutions for brightening the online and even the offline image of small business firms.
The Five Steps to Success:
To ensure success of your small business through a unique website presentation, it is important that you develop a five-step process for creating websites that meet your customer’s goals. Whether it is a small business firm eager to generate leads, sell online, provide information about their services, connect their vendors to their company electronically, or start an entirely new kind of service, this five-step process not only takes them from concept to completion, but also is the trademark of any Internet development company. Consulting: Every website starts with an idea. Perhaps you’ve been thinking about developing a website, or redesigning your existing site. At the consulting stage, a professional website development firm would strive to clear all doubts about the clients’ requirements. Consultation for this usually comes free in case of small to medium-sized businesses.
Website Design: After the initial consultation, the website development firm solidifies the clients’ ideas by creating a blueprint for their site by employing something they call “Strategic Design”.
Website Development: The website development project is then handled by a creator’ hive, composed of specialists who handle their own respective pieces of the site development. Remember, for successful website development, it is necessary to be handled by a versatile team of expert graphic artists, content writers, programmers, database specialists and technical personnel. This ensures that a qualified professional handles each task of the given project.
Web Hosting: Since websites are an intricate interplay of graphics, text, programming and computer resources, building your site on a rock-solid web hosting foundation is critical to its marketing success.
Website Maintenance: Once the site is available to the public, it must be maintained with the help of ongoing updates and continued development to the site so that they don’t give clients/visitors of the site a chance to complain about its quality and content.
More info’s and free registrations (restricted to pros), please join our live seminar
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