Friday, 25 May 2012

Starting Small Businesses Has Never Been Easier

I believe that it's easier to succeed with small businesses than ever before. There are more opportunities for entrepreneurs to start small businesses today than at any previous time.
Here are some good reasons for why I believe this is true.
A) With the increase in population comes an increase in opportunities for small businesses.
Generally, a sparse population requires a small business owner to provide a wide variety of goods or services to survive. With a denser population, the small businesses can still survive by providing a very narrow range of products or services.
For example, in a smaller population a small business which provides gardening services would probably need to offer many things. Services could include general garden maintenance, planning, tree felling, lawn cutting, vermin control, pond planning and maintenance, hard landscaping etc.
With a bigger population a small business could thrive perfectly well by providing just one of these services, as there are more people who will need it.
B) The costs involved in starting and running small businesses has never been so low in proportion to income.
Technology has replaced many of the things which people used to do, and technology does the job a lot more cheaply.
Today it's possible to reach literally millions of potential customers around the world very cheaply.
For example, only a few decades ago the cost of mailing to thousands of households was prohibitively high. Unless you had a very good product or service which sold well, a small business just wouldn't risk it.
Another example, business premises security used to involve security guards walking around checking that all was well. Now a good security system can be bought for less than 1 week's pay for that security guard, and it will work 24 hrs per day for years, for no pay.
C) Because modern life is so complex today, small businesses and individuals are open to new ideas, products and services like never before.
This creates a huge market for training courses, information provision services, educational aids, specialised products and services, novelties, etc.
With this great diversity come great opportunities to combine different products and technologies, thus making whole new areas of business possible.
For example, you can combine a low-light camera with wireless communications and a bird box. This means a nest may be watched remotely on a television or personal computer screen.
Another example would be to combine voice-chip technology with passive infrared technology to make it sound as though you have a huge dog indoors whenever anyone approaches your house.

Small Business Software Shopping Tips

Choosing the right small business software for your home-based
internet business can be a confusing undertaking to say the
least. It's a good thing most women love to shop because
otherwise it could be really frustrating. The challenge in
choosing small business software is striking a balance between
what you have to have and what you can afford. There are many
small business software packages that have a number of features
included, even though you may not use all of them. Then, there
are some that are sold in individual modules where you buy only
what you need.
The first step in shopping for small business software is to
distinguish between what you need now, what you want, and what

Working Capital: Financial Options For Small Businesses

Large companies have always had a number of options that they could depend on to raise capital for their businesses. The have always had access to a number of alternatives such as selling stock, issuing bonds, bank loans and accounts receivable financing among others. Looking at the other side of the coin, smaller companies, those that have between $20,000 and $500,000 of yearly revenues, have always had a challenge trying to find capital to operate their businesses.
The lack of access to capital has prevented many small businesses from growing and capitalizing on the many opportunities that are available to them. It is not uncommon for small companies to reject large deals or opportunities because they do not have the necessary capital to obtain the resources to service the account. However, even when small businesses do take on large contracts, they find that they are never paid immediately upon delivery of services. Most contract terms demand that the supplier provide 30 to 60 days for the customer to pay their invoice - in effect, forcing them to extend them with supplier credit. The lack of adequate capital resources, along with the necessity to offer commercial credit to clients, creates a "perfect storm" that prevents small businesses from growing and that is very difficult to avoid.
A number of these issues could be sidestepped if the company had immediate access to working capital. Working capital could enable the business to add employees and resources to serve new clients and larger contracts. It also enhances a company's ability to extend 30 to 60 day payment terms to their customers.
This paper outlines the most common sources for working capital and provides an evaluation of each source. Each source has also been assigned a score, which summarizes the availability and flexibility of the source.
Scoring System
Each working capital source that has been evaluated has been given a score from 1 to 10. The following features where considered when assigning a score:
  • Accessibility to small businesses

  • Requirement complexity (e.g. do they require significant financial reporting?)

  • Flexibility

  • Payment terms

  • A higher score indicates that the source of capital has a positive outlook on a number of these criteria and is available to small businesses. A lower score indicates that a particular source of capital may not be best suited for most small businesses.

    Memorial Day Cause Marketing

    It’s Memorial Day on Monday in the United States, a Federal holiday that recognizes the men and women who served in the military and died. It’s also fair game for cause marketing around military veterans and causes.

    Kroger the giant grocery chain, for instance, is running a year-long campaign on behalf of the USO that has a natural inflection point right now. In-stores the campaign shows as a bunch of splashy well-placed signage, plus notices at every checkout counter asking customers to donate to the USO.

    Regular readers know how much I love those big budget cause marketing campaigns. But, then again, Kroger is a $90 billion (sales) company. They can afford splashy.

    However, Kroger is the 23 largest company in the Fortune 500. While there’s plenty we can learn from the likes of Kroger, the effort at the left is a little more approachable for most businesses.

    Here’s the offer:

    Piano Liquidators will donate 10 percent of proceeds from the week of Monday, May 21 through Monday, May 28… Memorial Day… to the Utah Disabled American Veterans.

    The Utah Disabled American Veterans is the Utah chapter of the DAV, the Disabled American Veterans, a national veterans’ organization with a 91-year history.

    Ten percent of proceeds seemingly means that whatever Piano Liquidators’ profit is for the week of May 21-28, the company will peel of 10 percent of that figure for the Utah DAV. But proceeds is a slippery word. Does Piano Liquidators, for instance, just count the cost of goods sold when figuring proceeds or does it include overhead and other costs?

    Some studies have suggested that companies get better results if they just make a donation and then, in the ad, say, “in honor of our brave and fallen Veterans, Piano Liquidators has donated $5,000 in the names of its customers and friends to the Utah DAV.’ 

    In general cause marketing plays upon the social psychology concepts of reciprocity and social proof.

    Those studies aren't entirely rigorous. But to the degree that they are true, I suspect it's most true at this scale of donations, say, less than $50,000.

    Thursday, 24 May 2012

    Everything You Need to Know About Matching Cause and Sponsor in Cause Marketing

    Here’s everything you need to know about matching cause and sponsor in cause marketing campaigns in 225 words or less.

    Without resurrecting every post I’ve written on the topic of matching causes with sponsors there are basically eight options.
    1. Pick a cause or causes that are a direct fit: for instance, a restaurant or a grocery store sponsoring a food bank.
    2. Pick a cause or causes that are an indirect but related fit: McDonald’s sponsorship of the Ronald McDonald House. In this case it’s related because of the way McDonald’s targets kids.
    3. Pick a cause or causes that are meaningful to important company stakeholders: Many sponsors of the various breast cancer charities fit this criteria.
    4. Pick a cause or causes that have tons of popular appeal: Target’s sponsorship of St. Jude Children’s Research Hospital is an example.
    5. Pick multiple charities with a single theme. JC Penney focuses much of its cause marketing ghving on after-school causes, for instance. Kohl’s cause marketing money goes to children’s health and education.
    6. Pick multiple charities without a unifying theme.
    7. Pick a charity or charities the executives or rank and file prefers.
    8. Pick a charity or charity for no rational reason.