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Small and medium business owners are benefitting from a strong economy but, owing to a lack of qualified workers, are struggling to meet high customer demand. In Q1 of 2018, 30 percent of surveyed medium-sized businesses reported “attracting and retaining a quality work force” as their biggest challenge for the year, and it appears that problem continues unabated. In addition to facing a tight labor market, SMBs have to compete with larger companies for talent. (Some business owners have even recruited still-imprisoned inmates to work for them.)
Almost half of small businesses surveyed (48 percent) are extremely confident their business will grow in 2018.
The majority of small business owners surveyed (60 percent) were in need of financing for growth due to increased demand, and 30 percent of those surveyed thought raising debt financing in the next six months would be easy.
A plurality of small businesses surveyed (39 percent) are planning on hiring 1 to 2 employees in the next six months, but 13 percent of the survey respondents cited the inability to find qualified employees as the main reason for not being able to hire.
Past surveys have shown SMBs were less likely to hire new employees because they were unsuccessful at obtaining outside financing, but now it seems SMBs are ready and able to hire but can’t find employees, especially quality ones. There are some things small and medium businesses can do to help alleviate this issue, and Business Credit Expert Amber Colley has some good recommendations on how to attract and retain quality employees.
If you are unable to hire because you’ve been denied a bank loan, you may be able to get alternative financing. Learn more about alternative lenders and how you may be able to get funding.
Net neutrality rules, which prevented internet service providers (ISPs) from favoring certain sites or content over others, have been repealed by the Federal Communications Commission. Any actual change from the repeal will come directly from the ISPs, and if they begin taking advantage of the rule changes, small businesses and entrepreneurs could be severely affected.
Net Neutrality Changes Impact on SMBs
Net neutrality rules were intended to prevent ISPs from doing three main things:
Blocking lawful sites or apps from customers
Slowing down connections for any legal content
Charging a premium to companies for a faster internet connection
With the repeal, ISPs could restrict certain sites to only premium, high-price packages, cause certain content to load slower, or allow companies to pay for faster connections to their sites. The effects of these changes on SMBs may not be trivial.
It’s not uncommon for consumers to live in an area where they only have access to one ISP, giving them a limited number of options when choosing an internet plan and potentially limiting their access to certain content all together. This can make it difficult for small businesses with less capital to compete against companies who are partnering with ISPs for broad coverage and fast load times. Small businesses, entrepreneurs, startups, and freelancers could have a harder time getting their brand found online or getting their sites to load quickly. Slow load times often equal customers going elsewhere — and that’s if customers have access to the site at all.
Preparing Your SMB for a Post-Neutrality World
SMBs should consider preparing for impending ISP changes and figure out how they can stay competitive in a post-neutrality world. Here are four things you may want to consider doing now that can help protect your business:
It will be even more important to reach your customers where they are if ISPs roll out changes that affect your business. Knowing where your best prospects are primarily located, which sites they prefer to use, and which ISPs they have access to can be crucial in choosing a plan for your business. Do you want to pay for faster load times if your prospects and customers are using a plan that may not include your content? If you don’t already have advanced data and analytics on your target audience, now is the time to consider collecting and analyzing.
Set Up a Strong Nurture Program
You could lose access to your customer base depending on what changes ISPs make, so having a strong nurture program in place before you lose access can be critical. Start by making sure your contacts are up to date (that you have the correct email, address, and phone number for each customer and prospect), and then work on developing to keep your business top of mind with your audience even if you can no longer reach them as easily through the internet.
Optimize Your Website
Faster connection speeds and load times are likely going to become premium options for ISPs post-net neutrality, so having an optimized website can be key for SMBs. Making sure your site is reactive, optimized for mobile, and not bogged down by too many large images or videos can help you succeed, even if ISP changes slow down your site. You may also want to consider your site layout and make sure you’re displaying your most important information in a way that will load quickly and be easily accessible by visitors. If prospects do end up waiting longer for your site to load, they will want to find what they need even faster than before. Consider auditing your web properties to see where you can make improvements over the next few months.
Competing digitally is already hard for many SMBs, and changes as a result of net neutrality being repealed could make it even more difficult. Change in business is constant, however – as we’ve seen recently with GDPR – and companies should always have to find ways to stay resilient. The tips above may help you prepare your business for other future regulatory changes, so bookmark this page for future use!
Small business suppliers and supplier-hopefuls, rejoice! The SBA just announced they are launching a Supply Chain Training Initiative in partnership with Connecticut-based United Technologies (who itself just announced it will invest $19 billion into hiring US small business suppliers over the next five years). According to the official press release, the program will include “events, webinars, and procurement conferences, all in an effort to break down barriers and prepare small businesses to compete for supply chain opportunities with large businesses across America.”
When you start a new business, you can’t completely avoid the risk of losing all of the money you (and potentially others) have invested in it –but you can work to minimize this risk. It’s important to know exactly how much money your business needs to earn to break even and what your return needs to be in the first five years to ensure your investors are satisfied. A strong business plan will help you determine these things.
Odds are your business isn’t going to create an entirely new market, so in most cases, you’re going to be trying to enter a market that’s already home to established businesses. You need to strongly consider how many competitors you’ll be facing and who the biggest players are. How will your business be able to stand apart from the pack?
Do you have a clearly defined market in mind for your products or services, or do you plan on tossing your line into the ocean to see what bites? Knowing your market and exactly who you are targeting is crucial to streamlining your way to success. Ideally, to minimize market risk, your products or services should solve an immediate and pressing need in an under-served sector of a financially growing industry.
When entering your market, you have to have a solid and sensible strategy if you want to compete. But such things as inappropriate pricing, mistargeted marketing, and distribution inefficiencies can greatly increase your market-entry risks.
As a new business owner, you may not yet have the ability to properly gauge new-hire potential. This can lead to hiring employees with inadequate or unsuitable experience and skills, making it difficult to build the talent pool you need. To help minimize this risk, perform background checks on job candidates and verify their previous-experience claims by contacting their references.
Technology is crucial to the upstart small business because it helps protect assets while improving performance. But technology failures can threaten a business in a variety of ways, from preventing the company’s compliance with federal regulations to damaging the company’s reputation in its industry. Having the IT infrastructure to protect against data breaches, cyber-fraud, and network failure are essential for mitigating technology risk.
If your business sells luxury goods, then choosing to start the business during an economic recession can have a significant impact on your profitability. Before launching your business, you should make sure the business outlook of the market you plan to enter is as favorable as possible.
Does your business require any special equipment in order to operate? If it does, then do you have a plan of action ready in the event a key piece of equipment goes down? Failing to recognize your key operational risks can come back to hurt your business at the least opportune time.
Some places just aren’t made to house businesses. For instance, you don’t want to open up a glass factory on a fault line or a paper company in a floodplain. Knowing the environmental risks in your chosen location is a must if you want to minimize losses from potential natural disasters.
Many of the most attractive businesses to new entrepreneurs are those that are the most likely to fail. For instance, businesses in the food-service industry, the consulting field, retail, and the work-at-home fields traditionally have a very high failure rate. Choosing to start a business in one of these fields, or in another with a high attrition rate, will make your risk of failure that much higher. Unless you can confidently identify an advantage your company would have over others in a high-attrition-rate industry, consider entering a market with a lower failure rate.
When it comes to tax preparation, it’s in a small business owner’s best interest to learn as much as they can about staying in compliance and meeting their tax obligations. Even though small business owners may deal with taxes through their in-house accountants or an outside accounting firm, having a working knowledge of tax preparation can still be extremely beneficial.
Keeping poor records and failing to identify all the items that make up gross receipts – otherwise known as taxable business income – are two of the major pitfalls small business owners need to be aware of. Solid record keeping is essential, as it ensures that you’ll have everything that’s needed when it comes time to file company tax returns.
You can learn about business tax regulations and potential deductions by using resources provided by the Internal Revenue Service. Here are three all-important online tax tools to help guide you as a small business owner.
IRS Video Portal
The IRS Video Portal contains an extensive archive of live panel discussions, webinars, and video clips. In this portal, business owners can learn about a broad selection of tax topics directly from the agency tasked with collecting receipts. Topics include starting a business, filing/paying taxes, business expenses, retirement plans, forms, and more. Learn about the tax benefits available to you and how best to avoid common mistakes small business owners often make.
Small Business Taxes: The Virtual Workshop
A subsection of the video portal, Small Business Taxes: The Virtual Workshop, contains nine interactive lessons designed to help small business owners understand and meet their federal tax obligations. The workshop is available online 24 hours a day, seven days a week, and because this is a virtual workshop, business owners can choose the lessons that apply to their business.
Small Business and Self-Employed Tax Center
The Small Business and Self-Employed Tax Center addresses many questions regarding income tax and payroll taxes. A business owner can access additional tax tools, tax information, forms, and updates. You can also find out about small business tax workshops in your area by subscribing to a newsletter. There’s even a desktop calendar tool (IRS CalendarConnector) that provides access to tax-calendar deadlines right from your desktop.
Each of these online tax resources offers valuable information, but it’s important to ensure that the concepts apply to your business. And it’s always a good idea to seek advice from a tax professional before making major decisions about how you prepare your business taxes.
If you find your business in the lookup, then your company has a D&B D-U-N-S Number and you’re already listed within the D&B database (and it’s probably a great time to sign up for alerts to changes in your file using our free CreditSignal* product.)
If you can’t find your business in our lookup, make sure to get a free D&B D-U-N-S Number now so you can establish your business credit profile. And of course, if you have any D&B D-U-N-S Number related questions, don’t hesitate to ask in the comments!