What do you think makes a successful small business owner?
Is it a roll up your sleeves attitude? A willingness to do it all – even if that means coming in early and staying up late?
It’s probably all of the above. We must become marketers, salespeople, and customer support experts. Every day (sometimes every minute) requires us to put on different hats and solve problems.
These traits are key. A limited budget inspires us to be creative and learn about practically every aspect of business.
But this insistence on doing it all can become a liability. Once you have your business off the ground, it’s easy to work too hard and burn yourself out. Even more frustrating: the thought of spending your precious time and energy inefficiently, working on things that sound promising but don’t move the needle in terms of business results.
To make the most of our efforts and ensure our longevity, we need a different perspective.
We need the 80/20 rule.
Understanding (and Applying) the 80/20 Rule
The 80/20 rule, also called the Pareto principle, was discovered by Italian economist Vilfredo Pareto in the early 20th century. It describes the tendency that, for many events, 80 percent of the effects come from 20 percent of the causes.
20 percent of a thing to account for 80 percent of the results.
There are plenty of implications for your business, but Pareto conceived this principle as a broader law of nature. Here are just a few examples of how it plays out:
20 percent of job safety hazards account for 80 percent of the injuries
20 percent of the Italian population owns 80 percent of the land
20 percent of the world’s population accounts for 80 percent of global GDP
How can this help you run your business more efficiently?
If you can pinpoint your top 20 percent activities, revenue sources, and customers, you can optimize your time. Instead of just throwing everything against the wall and seeing what sticks, you can focus on doing more of what’s already working – and less of the ineffective stuff.
Here are four different ways you can apply the 80/20 principle to your business:
Time and Productivity
Your time is your most valuable resource. It’s the only resource of which everyone gets the exact same amount every day. People like Elon Musk and Marissa Mayer have different networks and budgets, but they get the same 24 hours as you do.
So, it makes sense to start there, and assess how you’re spending it. If you’re like most small business owners, you’re trying to put in as many hours as possible. Even at the expense of your health and personal relationships.
How are you spending your time right now?
The only way to know for sure is to track it.
Commit to two weeks of measuring how you spend your workdays. Break down each hour into fifteen-minute blocks, and note which task you’re working on at each time. You can do this with a simple notebook, or try one of the time tracking tools available online (many are free).
This sounds tedious, and it can be. But it’s crucial. Tracking our time is the only way to get a handle on how we’re actually spending it. Otherwise, it’s easy for our minds to deceive ourselves into thinking we’re being more effective than we really are.
Try this out for yourself, and you’ll spot productivity holes immediately. Patterns emerge. Maybe you’re spending a lot longer on those social media breaks than you thought. Simply measuring how you spend your time will give your productivity a nice bump.
Once you have a few weeks’ worth of data to assess, you can figure out which hours of the day are your most productive. They might not be what you thought! Then you can rearrange your schedule so you’re tackling your most challenging tasks (product creation, marketing, etc.) during your peak productive times.
Also, be on the lookout for low-productivity times. These are great for simple (but necessary) admin tasks like invoicing. If your budget allows, see if you can outsource some of these tasks or hire an employee to help you. Then you can take that hour or two to catch up on some sleep or exercise – both great investments for long-term health.
The 80/20 principle states that 20 percent of your customers are responsible for 80 percent of your revenue.
This is mind-blowing, if you really think about it. Through these high-spenders, you have a wonderful opportunity to grow your business.
Every customer deserves a quality experience. But your best customers deserve to feel extra special, because they are.
Have you identified these people? Once you figure out which people are driving most of your business, it’s much easier to sell more to those happy customers than to bring in new ones.
Your top customers deserve some extra attention. This could come in the form of a loyalty program, special discounts, or coupons just for them, or even free gifts. Your options here are only limited by your imagination. It might be something as simple as a handwritten note thanking them for their patronage.
The key thing here is to make them feel valued. They could have taken their business somewhere else. They’re already spent a lot of money with you. And, chances are, they’re willing to spend more as long as they feel appreciated.
Marketing expert Jay Abraham says there are only three ways to grow a business:
Get more customers
Increase the average customer lifetime value
Increase the number of times your customers buy
By paying special attention to your top spenders, you’ll hit the second and third items from the list. It’s a much more cost-effective way to increase revenue without the constant pressure to bring in more customers. Pareto would approve!
Most Profitable Products/Services
It’s always tempting to expand your product line or menu of services. Maybe if you just offered more things to buy, you’d make more money.
This makes sense. It might increase your revenue, but it could also backfire. Every new offering means more time spent managing inventory and assisting unhappy customers. Small business owners can end up so overwhelmed that the quality of their entire product line suffers.
Should you offer more products? Fewer products? The same as you’re offering right now?
You can gain clarity with an 80/20 analysis.
20 percent of your product line accounts for 80 percent of your revenue. If you’re looking to streamline and simplify, you could cut down a few offerings and focus on making the big money generators even better.
This is a business decision, and one that ultimately depends on your long-term goals. But plenty of businesses have become wildly successful by focusing on just one (or a couple) of products:
Basecamp, formerly 37signals, used to multiple software suites before deciding to cut all of their offerings except Basecamp (a project management software). They even renamed their company after their most successful product!
You might know Crocs as those kind of ugly, but super comfy, foam sandals everyone seems to be wearing today. Although the company offers different variations of the sandal, they’ve sold over 100 million pairs focused on that single product alone.
Trader Joe’s only carries around 4,000 stock keeping units (SKU’s) per store. That sounds like a lot, but the typical grocery store chain carries over 50,000!
Most Effective Marketing Techniques
It today’s marketing advice had a mantra, it would probably sound like “more, more, more.”
Everyone is urging us to “be everywhere.” Explore different channels. Try new social media platforms. Become wizards of Facebook ads, SEO, and blogging – all at once.
You can see how this is a recipe for confusion and overwhelm. Yes, some of those tools will work great for you, but it’s highly unlikely that all of them will.
Wouldn’t it be easier to focus on a couple tactics that drive the most results?
It’s time for an 80/20 analysis.
If you haven’t done so already, set up an analytics tool so you can see which sources are driving website traffic. Measuring marketing ROI can be a bit trickier for brick and mortar businesses, but tools like call tracking and discount codes will help.
Measurement is non-negotiable. Once you have data about where your leads and customers are coming from, you’ll start to see patterns. You’ll identify key traffic sources, as well as the ones you could probably do without.
Instead of trying to blog, podcast, and shoot videos, pick the one that’s working best. Instead of dabbling in half a dozen social media platforms, pick one or two that drive the most traffic.
This simplifies the marketing puzzle. Your efforts become more effective because they’re focused on what’s already working. It takes less time to gain a critical mass of followers – and some real traction. That leaves you with more money to re-invest and expand into other channels as you see fit. Win, win!
Free up Time and Grow Your Business
Running a small business is challenging enough already. We can’t afford to run ourselves ragged trying to do every little thing.
An 80/20 analysis will help you focus on what really matters. You’ll spend more time on things that drive results, and less on things that sound good in theory but don’t really increase your revenue. Most importantly, you’ll free up precious minutes in your day you can use on your health and relationships.
Have you ever done an 80/20 analysis on your business? If so, what did you find that surprised you? Leave a comment below and let me know!
Owning your own business is empowering, but it can also feel overwhelming — especially at the onset. To celebrate and support female entrepreneurs and kick off Small Business Month, Mastercard partnered with Create & Cultivate for a conference held in New York on May 4, 2019, to help inspire, educate and help women pursue their entrepreneurial passions.
The one-day, high-energy event attracted 1,500 women in various stages of business ownership. The packed schedule provided a valuable program of workshops, panels, mentor sessions, pop-up shops, photo booths and more.
Women open businesses at a rate five times that of men, contributing more than $3 trillion to the U.S. economy. Mastercard’s partnership in the event underscores its commitment to helping further their success.
Start With the Right Mindset
Cheryl Guerin, Mastercard’s Executive Vice President of North America Marketing & Communications, led a panel called “Priceless Conversations: Meet the Women Making an Impact,” which included advice from Piera Gelardi, co-founder of Refinery29, Jaclyn Johnson, founder and CEO of Create & Cultivate, Kelsea Gaynor, founder and creative director of East Oliva, Bliss Lau owner of Bliss Lau, and Breezy Dotson, designer and cofounder of Coco and Breezy Eyewear.
Women who start a business often have a dream, and they’re inspired by a greater calling, says Guerin.
“Women are equally motivated by both purpose and profits and are willing to trade money today for long-term community impact,” she says. “When you support women entrepreneurs, you’re not only supporting the economy — you are supporting their desire to solve real needs and make a difference in people’s lives.”
Finding the Funding
Great ideas need money to grow. Ginger Siegel, Mastercard’s North America Small Business Lead, navigated the topics of venture capital, negotiation and bootstrapping your business in a panel called “Raise Up.” It’s clear most female entrepreneurs start their business with personal funds and money from friends and family.
“Going outside that circle is intimidating for any business owner,” says Siegel. “The hard reality is that just two percent of venture funding goes to women. Women in the audience were also experiencing difficulty [finding] funding from angel investors and banks [but] didn’t realize it was a problem overall. I wanted them to know you are not alone. This isn’t about you personally or about issues in your business. The problem is across the board.”
Female founders must surround themselves with the right advisors who can fill gaps, Siegel adds. “Make sure your business plan is spotless,” she says. “lf you don’t know how to write one, there are resources to help.”
Mastercard unveiled several ongoing initiatives to help not only the women who attended Create & Cultivate, but female entrepreneurs as a whole.
“Research shows that when we remove the obstacles for female business owners, their impact on society, on communities and on economies is priceless,” says Guerin. “This is why we’re not just making a commitment to this segment; we’re taking action by providing the insights, solutions and resources they need to thrive as business owners.”
Mastercard’s Her Ideas: Start Something Priceless campaign was launched to celebrate women entrepreneurs and their businesses. It spotlights female business owners and shares their journeys, from formulating ideas to founding businesses and the impact they have on their community.
“What I love about this campaign is that every small business starts with an idea,” says Siegel. “It is so encouraging to see these ideas grow, to see the passion that surrounds making these ideas a reality for female founders. It’s the ideas and the passion that surrounds them that make female founders so valuable. ”
The Mastercard Women’s Business Advisory Council brings together the perspectives and experience of successful female founders to share their knowledge beyond the conference through mentorship and guidance.
“These women are very successful and have been through tough times building their business, just like every business owner,” says Siegel. “They can provide excellent advice and guidance around the journey.”
The Advisory Council is focused on helping to ensure the solutions Mastercard brings to market continue to meet the needs of the segment with learnings from their own unique journeys and challenges. “Female entrepreneurs can turn to the advisory council to co-ideate, to get opinions, to build solutions, to get perspectives on what you need,” says Siegel. “This is about pulling up. Having role models and people out there saying, ‘It’s okay; we had trouble, too. I knocked on a hundred doors before one was opened.'”
Mastercard also recently announced a new small business program across Mastercard Business and World Elite offerings that provide entrepreneurs a number of digital resources that owners need to run their businesses successfully and seamlessly.
“Eighty percent of small-business owners have no protection against cyberattacks, and if you talk to cyber experts, you’ll learn that attacks on small businesses are growing rapidly,” says Siegel. “Cyber/ID theft protection is just one of the areas where the business Mastercard can help. We provide tools to business owners to monitor the dark web for business URL’s and up to 50 business email addresses, and if ever faced with a breach we will have a resolution service.”
The Mastercard small business benefits also include a 24/7 business assistant. “Eighty percent of small businesses have one or no employees. They wear many hats and are good problem solvers,” says Siegel. “To provide extra support, the business assistant can help with day to day needs, such as finding a place to fix your technology devices or locating an office if you live in New York City and are having a meeting in San Francisco.”
Other benefits for small business cardholders include discounts on Intuit products, such as QuickBooks and TurboTax, as well as cell phone insurance.
“It’s our goal to [fulfill] as many needs as possible with the tools, resources and mentorship this segment deserves, and inspire others to do the same,” says Guerin.
“Create & Cultivate was a rare opportunity to sit in front of so many female founders,” says Siegel. “Talking one on one with business owners helps us build better solutions and ensures that we are going down the right path. Female entrepreneurs have different needs and struggles. If we can lift them up, they’ll grow faster. If we help them, we help the economy. The best part of what we do every day is develop and innovate solutions that will help them run and grow their business.”
Small business owners are constantly reminded of the daunting challenge to protect their data – including data of their employees, customers, and partners – from online hackers and scammers. The challenge is real and complex, but some very effective solutions are not.
A focus on protecting the “core four” issues that, if unaddressed, can create the greatest vulnerabilities will enable small business owners to sleep at night and know that they are protected from the most likely causes of breaches and related attacks.
Every small business owner should ensure their companies are focused on the following:
Using secure passwords
Automating Security Patches
Stopping phishing in its tracks
Ditching the use of USB drives
Address the Core Four
There are many ways hackers will attempt to crack passwords. Hackers usually work against password lists obtained from breached servers.
One method is the Dictionary Crack, where software is used to check a password list against different combinations of common words/passwords and patterns. If the hackers can obtain personal information about the users, then this speeds up the process enormously. A recent study found that 1 in 50 people use their favorite sports team and the current calendar year as their password.
Creating a culture of strong, resilient passwords is a simple and effective way to improve your cyber readiness.
Secure Password Tip: The best password is a passphrase with 64 characters. Passphrases can be easier for people to remember and they only need to be changed if/when it is breached. Also, people can save the passphrase in their keychain, so they don’t need to type it in every time.
Automated Security Patches
A patch fixes a known vulnerability in a system, application or piece of software. Patches are released by the system operator, but are the responsibility of the user to implement.
One of the biggest challenges organizations face is integrating patching into their processes. Software updates can take time, which makes it harder for you and your employees to make it a priority over your day-to-day work tasks.
Automated Security Patch Tip: Automation (turning on auto-update) is a great way to stay aware of new patches and schedule their installation at a convenient time. Rebooting your computer is also another way to ensure patches get installed.
Stop the Phishers
Phishing emails may adopt the disguise of a person or company you know and try to fool you to take an action, such as clicking a link or confirming sensitive information. For example, a phishing email could take on the guise of your HR officer asking you to confirm your bank account information and that they will withhold your paycheck unless you immediately confirm your identity.
Stop the Phishers Tip: Organizations should educate their employees on what to look for in an email to determine if it is a phishing attempt. If an employee has any concerns, he/she should contact the company’s IT expert. Companies should run basic phishing training on a regular basis.
Keep the USBs Away
Like most cyber attacks, a USB attack is opportunistic. Hackers will infect USB drives with malicious software, such as viruses, spyware, rootware and more. All of these can do irrevocable damage to your network as soon as they are installed.
USB attacks rely on human behavior for success. In most cases, the providers of USBs do not know if the USB is infected. Many people will plug an unknown USB into their computer.
Keep the USBs Away Tip: Adopt an online file sharing system that is access protected so you don’t need to use a USB.
Small businesses are the lifeblood of a community and provide all manner of essential services and support to enterprise businesses and government. The global economic importance of small businesses cannot be overstated, and so it is critical that small businesses are protected from the ever-increasing volume of cyber-attacks targeting them. Because of the interconnectivity of small businesses within the global ecosystem, a successful cyber-attack on a set of small businesses could have devastating impacts more broadly on the sector, geographic region, and across the globe.
Here are the six areas every business should focus on to stay secure:
1. Know What You Have
First things first: Knowing what you have is the first step to better security. Take inventory of all your devices (including desktops, laptops, smartphones and printers) and applications (e.g., email, software, web browsers, websites) so you can take steps to secure them. Keep this list updated as you add or remove devices and applications.
2. Update Your Defenses
When you keep your systems updated, you boost your digital immunity against threats such as viruses, spyware and more. First, go through each device and application in your inventory list to make sure that each is configured for automatic updates. Check the instructions or support pages for any device or application that needs to be adjusted. Check each item off your list as you go and be sure to take this step every time you add a new device or application to your business. Also, using recommended security settings – “configurations” – are usually helpful in establishing proper defenses.
Websites are also at risk of being compromised. Many of the website applications used by small businesses have security problems. Run periodic scans of your website to identify vulnerabilities. Send any identified problems to your web manager (or whoever handles your website) for the appropriate action to be taken.
3. Beyond Simple Passwords
Lock your virtual doors and windows. Just like in the physical world, when you lock everything down, the bad guys may move on. Your accounts and data (such as email, personnel records or client databases) are valuable assets – to you and criminals. Keep your accounts safer by moving beyond simple passwords: use strong passwords and two-factor authentication (2FA) (an additional layer of protection to your passwords). Be sure to set up unique passwords on all your accounts.
4. Prevent Phishing and Viruses
Every year, many small businesses fall victim to costly malware and phishing attacks, which can be difficult to survive. These attacks can infect your systems, resulting in revenue loss, expensive recovery costs, data loss, damage to reputation and more. There are many tools available that help prevent these types of attacks, including DNS security, anti-virus software, and ad blockers. You should consider using one of each of these tools on your devices.
5. Protect Your Brand
Protecting the reputation and brand of your business is critical to your success. You can help do this by implementing tools that ensure your brand’s name and email addresses don’t get used by others pretending to be you. An email standard known as DMARC is an effective way to stop spammers and phishers from using company “domains” (the part of your email address after the “@”) to carry out dangerous cyber-attacks, and may be helpful to see who is trying to impersonate you and sending email on your behalf. It’s a way to verify the sender of an email has permission to use your email domain and send email. A side benefit to using DMARC protection is that it may lead to better delivery of email to your customers’ inboxes instead of to their spam folder!
Trademark monitoring tools give you visibility into whether your business’ name or brand is being misused, allowing you to take action to protect your reputation. Attackers set up “look-alike” domains (slightly misspelled or with a different ending, e.g. BestBusiness.com becomes BestBusness.org or BestBusiness.net) to try to trick your customers to defraud them, resulting in damage to your reputation and brand and harm to your customers.
6. Defend Against Ransomware
Ransomware is software that infects your computer with malware and encrypts (“locks”) your data. The attacker then demands you pay exorbitant sums of money to get your data back. This has become a serious problem for small businesses. Up-to-date backups are critical for recovery from these attacks (and are generally very good business protection). Additionally, make sure your backups don’t stay connected to your computers. Unplug your external backup device once a successful backup is completed.
Together with Mastercard, the Global Cyber Alliance (GCA) developed the GCA Cybersecurity Toolkit for Small Business, a free online resource that small businesses can use to significantly reduce their cyber risk. The toolkit includes a set of tools, reference materials and videos to assist you with all the scenarios outlined above – so you can protect yourself, your business, your customers and stay focused on what matters most: growing your business.
Starting a business is exciting, crazy, exhilarating, and nuts. You’ve got to find investors, perfect your business model, create a marketing strategy, and sell away. But the insanity doesn’t end there. Once you get your company going — starting from your very first sale — you’ve got a major challenge on your hands: customer retention. How do you keep the customers you earn?
Customer loyalty has been spiraling downward for years now — in part because companies aren’t taking care of their most valuable asset. Instead, many companies today focus their attention on acquiring new customers. And if the old customers are forgotten, why wouldn’t they go somewhere else? After all, according to the 2018 Connected Customer Report, 84% of consumers say being treated like a person (not a number) is the key to their business, and 76% say it’s easier than ever to take their business elsewhere.
Can your startup or small business compete with those high expectations? Absolutely. Because while those numbers seem intimidating, today’s smaller businesses are actually better equipped to provide one thing consumers care about: personal relationships. Here’s how.
Create a customer-centric culture.
Young companies are often so focused on the latest-and-greatest customer acquisition strategies that they forget to build customer loyalty efforts into their programs. But companies aiming for responsible growth and long-term success have to put customers at the forefront of every decision. As a small business, you’re able to shape the culture of your company as it moves forward, so build customer success right into the heart of your model. How do you take the first step to putting the customer first? Easy. Listen to them. Hear their needs.
Operate with transparency and trust.
Today’s market is fierce, and even a repeat customer who’s received great service can be lured away by a competitor. If you want to prevent attrition, you have to build your customer relationships on trust and accountability. 95% of consumers say they’re more likely to be loyal to a company they trust. So don’t let your business fall into those metaphorical silos; operate with honest transparency and you’ll build bonds with your customers that go well beyond any customer satisfaction (CSAT) score.
Offer uniquely personal service.
The “customer experience” has been on so many business trend lists this year for a good reason: Today’s consumers want a unique journey. Data shows that 87% of small and medium businesses believe receiving a personalized experience is important to their customers, yet only 33% of SMBs are using technology to manage customer data and offer a consistent flow. That’s a major discrepancy. Consider investing in technology like chatbots and help centers, which help many customers receive quick service, while also allowing your agents to offer personal service to those who really need it.
The common theme: Relationships.
Today’s companies are no longer competing on price and features; the buzzword is customer experience. To win and retain customers, you have to offer personal, ongoing relationships and a transparent experience. How do you do that? A basic CRM system like Salesforce Essentials helps you track customer data, analyze the information that comes in, and ensure every inquiry receives the proper response.
Think about your business. If you were selling your product to family and friends, would you do everything the same way you’re doing it now? If you want to keep your customers, you’ve got to think of them more like friends — close friends. Friends you spend holidays with. That’s how you retain customers and grow your business.
When you start a new business, you have lots of decisions to make. From the name and location of your company to the products and services you offer, there are plenty of things to think about and plan. Don’t overlook your business structure in the process. How you define and organize your business is one of the most important decisions you make because it impacts your tax bill, personal liability, ability to raise money, and paperwork requirements, according to the Small Business Administration (SBA).
Depending on the type and size of your company, one or more business structure may be best for you. Here are the four most common, including their advantages and disadvantages.
Sole proprietorship is the most common structure and the easiest to form. Your business is automatically a sole proprietorship unless you structure it another way. In this business structure, the owner maintains control, making all of the decisions. The business is not considered a separate entity.
If you’re testing your concept, sole proprietorship is a good choice. It requires little to no paperwork, depending on your state’s licensing requirements. And it’s a good fit for low-risk businesses, such as consultants, virtual assistants or tutors.
Income and expenses are recorded on the owner’s personal tax return, using a Schedule C. If your business suffers a loss, which can be common in the beginning, it may offset income earned from other sources, reducing your tax bill. Another advantage, sole proprietor’s business earnings are taxed only once, unlike other business structures.
One of the downsides to this structure is that the owner is held liable for the business’s debts or obligations. If you’re sued or file bankruptcy, the court can seize your home and other assets to settle. Sole proprietors can have a hard time raising money because they cannot sell stocks. Banks are often hesitant to lend to sole proprietorships, which can mean you’ll have to tap into your savings or home equity or find optional sources of money.
If a business has two or more owners, a partnership can be a good structure, with two types: general and limited. A general partnership is similar to a sole proprietorship. Partners have equal control over the operation of the business, sharing in the profits, losses and liabilities. Income and expenses are recorded on the owners’ personal tax returns. While not required, a partnership agreement will set terms on how the business should be run, which can be helpful if one partner wants to sell or exit the business.
In a limited partnership structure, one or more of the partners will have limited decision-making authority while one or more of the partners will be considered general partners. Limited members are investors, and do not run or manage the business. It’s important to have a partnership agreement in place to distinguish the rights of each partner.
Like sole proprietorship, a partnership can be a good choice for businesses with multiple owners who want to test their idea. Also like sole proprietorship, the partnership isn’t directly taxed on its income, passing through any profits or losses to the individual partners.
A disadvantage to this structure is that general partners are personally liable for the business’s debts or obligations. In addition, each general partner can act on behalf of the business, incurring debt or making decisions that affect all of the partners. It’s important to think through scenarios and establish a strong partnership agreement to avoid disputes.
Limited Liability Company
Limited liability company, or LLC, was created in 1977 and provides business owners with the liability protection that corporations enjoy without the double taxation. Similar to a sole proprietorship, profits and losses are filed through the owner’s personal tax return. However, the owners aren’t liable for the business’s debts or obligations, which protects your personal assets in case of a lawsuit or bankruptcy. As a result, it may be easier to get financing from a bank.
LLCs do have disadvantages. Tax treatment varies by state, so if you move you may need to restructure and find an accountant who is familiar with rules of the state. If you want to raise venture capital or investor money, LLCs aren’t ideal as you have no stock shares to offer.
Finally, a corporation is a legal entity separate from the founder and created to conduct business. It can be taxed and held liable in the case of bankruptcy or lawsuits, and it can make a profit. This structure has two main types: C Corp, which is a business owned by shareholders; and S Corp, which is more popular with small businesses.
The biggest advantage to forming this business structure is to avoid personal liability. Since a corporation’s debt and obligations are considered separate from the owner, it protects your personal assets. A corporation can also retain some of its profits, without the owner having to pay taxes on them. And a corporation business structure is better for raising money, as it can sell stock. This is a good structure for businesses that have higher risk of lawsuits, such as a daycare or restaurant, or that may eventually go public.
Corporations have disadvantages. The paperwork is complex and expensive to set up and requires an attorney. There are also extensive record-keeping requirements, and businesses must comply with more regulations. Also, owners of a corporation can be taxed twice if they take certain types of distributions, such as dividends — once on federal and state corporate income tax and again on their personal income tax return.
Set Yourself up for Success
Choosing the right structure will provide you with guidelines that impact other business tasks, like taxes and licenses. Business laws can change, so consult an attorney or tax advisor who can provide personal insights on the best choice for you and your business. Once you cross this decision off of your list you can focus on the success of your business.
This year marked the passage of the JOBS Act 3.0, an attempt by lawmakers to level the playing field for companies of all types who need access to capital. Officially titled “JOBS and Investor Confidence Act,” it was passed in July with bi-partisan support. It’s also one of many attempts to reform the myriad of regulations that may be harming small businesses disproportionately. This newest development gives startups a way to access cash faster than before.
What Does It Entail?
The JOBS Act refers to a bundle of several separate bills. The highlights aim to primarily help entrepreneurs; some of which include:
Clarification of the SEC’s regulation D: Rules to keep small startups from “running afoul of securities laws” when they pitch potential angel investors about possible venture capital opportunities.
Refined definition of “accredited investors”: Where current rules keep those with under $200,000 of annual income from becoming an accredited investor, new allowances will let “experience and expertise” stand-in for some income.
Reduction in the cost of going public: The JOBS Act would loosen some of the reporting requirements that have proven costly to smaller companies.
Loosening of rules for secret IPOs: Old rules only allowed for “an emerging growth company” to perform confidential filings. Now, any issuer has similar opportunities to discuss business with a bigger pool of accredited investors without penalty to retail investors.
New exchange for small businesses: These new “venture exchanges” will allow startups with fewer outstanding shares to join together for trading and get the same level of research and support as the larger players.
How Does It Help You?
Previously, it was difficult for new companies to get the kind of funding needed to make big technological investments, hire rapidly or test new products to bring to market. With the changes mentioned in the JOBS Act, however, many of those barriers to receiving capital have been lowered. Where smaller startups may have turned to crowdfunding in the past, they now have access to interested angel investors and supportive stakeholders without fear that they could be dinged by some of the more stifling securities laws. These rule changes also allow investors with a smaller net worth to get in on the ground floor, potentially opening up a flood of new donors eager to become part of a promising startup.
Companies eager to take the next step in their business plan should start now to research how these changes positively affect funding opportunities. Start revising your marketing materials to appeal to the newest group of accredited investors that will be coming to the market; then, gear up so that you’re ready to impress those new investor pools at networking events.
As the economy continues to stabilize, investors are feeling good about taking on a little extra risk —especially if it means being one of the first to invest in an auspicious, new endeavor. Smart companies will use the regulatory relief of the rule changes and this economic bounce-back period to get the capital needed for the next big phase in the company’s growth.
When it comes to running a business, time is one of your most precious resources. Finding ways to become more efficient can greatly improve your bottom line. One of the easiest ways to improve operational efficiency is by building your digital tool belt. From accepting digital payments to automating your invoicing system, digital tools streamline your efforts, saving you time and money. Here are three benefits digital tools bring to your business.
Speed up Customer Payments
You’ve made the sale, and it’s time to get paid. Shave days (or weeks) off of the collection process by switching to email invoicing. Paper invoices sent through the mail can add weeks to the payment process and are harder to track — it’s not called “snail mail” for nothing. Emails are instant, and they get attention.
You can also boost operational efficiency by using tools that automatically generate bills, storing customer information and sending bills on a set schedule. This eliminates the time-consuming job of creating and distributing bills to customers and reduces the number of potential errors. An added bonus: electronic invoices get approved twice as fast as other invoices, according to the Institute of Financial Management.
Another way to speed up customer payments is to offer digital forms of remittance. In addition to credit card payments, consider accepting mobile payments, such as Apple Pay, Google Pay and Masterpass by Mastercard. Or use payment-portal software to allow customers to pay their bills through your website. The easier it is for customers to pay, the faster they will do it and the more even your cash flow will be.
Improve Cash Flow
When it comes to the success of your business, cash flow is king. Not to mention, more than a quarter of small business startups fail due to cash flow problems. Unfortunately, slow customer payments happen to all business owners from time to time, and that can put a major crimp into paying your employees as well as your own accounts payable.
In addition to getting paid quicker, digital tools help you hold onto your own money as long as you can. Using a credit card to pay for your expenses, for example, lets you take advantage of the “float period” between making a purchase and paying for it. Essentially, you could be getting an interest-free loan for up to 30 days, depending on your statement cut-off and payment date. And depending on your card benefits, using a credit card to pay bills lets you accumulate points that can be used for cash, travel or other rewards, helping you save money.
Using a credit card to pay your bills also allows you to schedule and automate your bills, reducing the amount of time it takes to manage your finances. Automating your payments keeps you current with your vendors and creditors, and that can keep you from being charged late fees.
Finally, digital tools offer you and your customers peace of mind. Digital payment methods use encryption that protects financial information. And mobile payments keep customer information in their wallet, instead of your point of sale equipment, reducing your risks in case of a cyber hack. Digital tools also allow you to track purchases and payments in case of a question or error. Since digital tools are tied to online accounts, you can access information quickly and easily to resolve a problem.
Which Digital Tools Are Right for Your Business?
Digital tools are a business’s best friend. Not only do they help you save time; they improve your level of customer service. Stay up to date with the latest research to determine to determine which digital tools will be the most effective at boosting your operational efficiency.
With so many technology innovations at their disposal, small business owners rarely need to leave the office to collaborate, share expertise, train or even network with their peers.
But nothing compares to getting out of the office and attending at least one or two business conferences a year. You’ll learn and experience new things, benefit from in-person networking, gain professional visibility and get a fresh perspective on how you run your business.
But conferences are busy places, so planning ahead is critical. Here are eight ways to get the most out of a business conference.
Before the Conference
Select the Right Event
Before you register, ask yourself a few questions. Is the conference a good fit with your goals? Are there enough educational sessions of interest to make it worthwhile? Are any of your partners or potential customers attending? The more closely you align the conference with your business goals, the more valuable the experience will be.
Find Ways to Participate
Whether it’s a speaking slot, participating on a panel or roundtable or facilitating a session, conferences offer many opportunities for you to get out there and showcase your expertise. It also allows you to raise your profile with peers and potential customers.
Reach out to Those You Want to Meet
Your fellow conference-goers will have schedules as packed as yours, so it’s best to reach out a few weeks ahead of the event and schedule a time or place to meet. Whether you want to catch up with a vendor or partner, experience a product demo at an exhibitor’s booth or pick the brains of a session presenter, you’ll be more likely to make it happen if you plan ahead.
Have a Schedule
Get the most out of your time by planning your daily activities in advance. Think of the sessions you want to attend, booths that are a “must-visit,” after-hours social events, and leave enough time for getting from A to B. To make things easier, lots of conferences now have a dedicated app for the event that will allow you to customize your experience and stay organized. Download the app ahead of time so you are ready to go when you arrive.
During the Conference
Be a Conference Pro!
Dress, act and network like a pro. Start by wearing the appropriate professional attire for the event. Come equipped with business cards and a finely-tuned elevator pitch. Don’t forget to track your expenses, meals and entertainment so you can also claim your tax deductions like a pro. Apps such as Expensify, Shoeboxed, and BizXpense Tracker are easy to use on the go.
There’s a lot to take away from a business conference, but remembering all of those important learnings and actions can be challenging. This is where good notetaking comes in. Whether it’s capturing key points from a session or noting follow-up actions from a productive meeting, come prepared with a pen and paper, smartphone app or laptop. Tools like Evernote, Apple’s Voice Memos, and Voice Record Pro are all good options. And, make sure you have enough battery backup power to keep you running all day.
Don’t Skip Social Events
Lunchtime and evening social events are a great opportunity to network and connect in a more relaxed venue. Invites often come from existing connections and are a great opportunity to catch up on or solidify those relationships. If you’re looking to form new relationships, opt for smaller venues where starting conversations is easier, or invite people during the day for an informal dinner in the evening.
Try to avoid everyday distractions such as checking your email or worrying about what’s happening back in the office so you can stay focused on the goals you set for the conference. Put your “out of office” on and delegate an employee to cover any must-do tasks while you’re away. You’ll find that you’re able to soak up more knowledge and make the most of your experience.
After the Conference
Post-event actions are just as important as the conference itself. Follow-up with those new contacts, revisit lessons learned and start implementing those best practices into your business.
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The Digital Tool Belt: Helping Small Businesses Thrive
This white paper summarizes a recent Mastercard survey conducted to provide an in-depth look at how high-performing small businesses use digital tools throughout their operations.