21 Top Marketing Mistakes Small Business Owners Make

The analogy between marketing and a business is similar to the relationship of body and food. Marketing is the heart of the business. Every business is different so each business has to offer marketing and development, which fits each unique business’s need. There are many ways of developing and marketing for any business, but first let’s find the true concept and definition of marketing.

Marketing definition:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.

1- Thinking advertising is marketing:

The biggest mistake most of the business owners make is to think advertising and spending money is the only marketing way exist. This group only focuses on advertising, which when the desire result is not achieved at the end of the month, they complain of how much money they wasted away. Advertisement is merely one of many ways of marketing.

2- You don’t enjoy what you do:

As stated above Marketing has many ways and approaches. The main marketing for your business is to love what you do. Nothing is better than your “Love what you do” attitude since it brings out your creativity, shows your talent and tells everyone how devoted you are to your business. Your daily positive attitude defines the successful future of your business. The love of your business construe in your daily interaction with new clients, employee’s moral and making important and effective marketing decisions. To be a good marketer for your business, first rule is your love for what you do.

3- Don’t have a good business plan:

What is business plan?

“A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement”.

Having a business plan is like having a map. Many businesses start their business ignoring this very effective tool and get lost in the middle of the road. Every business plan states the exact details of the business’s concept and outlines clearly the marketing strategies, profit and loss, demographic, place of business, finances and targeted niche market. In order to make a solid business plan:

A) Know your business inside and out

Knowledge of your business is important to know the answer to all the categories of business plan. If you do not know the concept of your product or service, business plan and the pillar of your business does not exist.

B) Study, analyze and scrutinize

When you know the back and forth of every detail in your business, you can access all the required information needed to project your business in a business plan. In order to access all this information you need to study, analyze and scrutinize every file and information in libraries, city records and valid informative site on the Internet.

C) Print it and have it accessible

When you put all the info together and created your fully detailed business plan, print a copy and keep a file handy and accessible.

Your projected analysis for the business works as a map to your success. Don’t drive to an unknown destination, not having a map on hand.

4- Don’t have any plans:

Marketing and developing its strategy is vital for every business. Marketing works as fertilizer to boost the lawn of your business. Even more importantly, marketing acts like sun to shed light and direction to your business for finding leads for the potential clients. Marketing is like having your open sign on in the dark street. I think I emphasized enough and you understood how important marketing is for any business, small or large.

5- Not analyzing the market for correct pricing.

Every business offers products or services. Then producing and providing the products and services involves certain cost and fees. Setting the price according to the market is very important and cause for a major failure for small businesses if done without market awareness. The root and source to find a perfect price is your business plan. It is necessary for every small business owner to investigate:

A) The demographic income of the targeted niche and audience:

The business plan states the average income of the targeted audience and the niche market. Set prices based on the factual statistic and spending ability of potential clients.

B) Market needs and economy balance:

An involved business owner is always aware of the market needs and the economy balance. Based on your niche market, be on top of the factors of change in economy that can impact your client’s ability to spend. If you deal with bankers and investors, keep up with stock market news and its daily changes and adjust your prices regularly.

C) Competitive market prices:

A business person is always on a lookout for its competitors and is aware of their side of story. It is necessary to know your competitors and adjust your prices based on their offering and similar services.

D) Demand of the product or service:

Investigate the demand before putting the price tag on your product and service. You can find this information through the data in your business plan. Balance your prices based on the market demands;

If you projecting a good volume of sale, price it lower than competitors.
If the demand is lower and the project of volume is slow, price higher to accommodate the distance between each sale.

E) Uniqueness of the product or service:

A unique product and service in the market attracts more attention. Price it higher than other regular products.

F) Acceptable profit margin range in the area:

Profit margin’s acceptability is always decided based on the market and economy as well as the market demand for the product.

Consider a big city. If you have a product or service that is unique, but projecting a high volume of demand, based on the economy and your targeted niche, the profit margin should set higher than normal.
In a small community, If you are investing on a product with limited demand, go conservative on your profit margin.

6- Not having any budget

Many small business owners make a big mistake and do not place any budget for daily, monthly or yearly marketing plans. Whatever the profit and loss data projects on your business, it must include certain amount of budget for marketing plans that are realistic and traceable. Unfortunately small business owners mostly have no budget and deduct the cost of marketing plans from their profit data. This particular budget assignment is very effective in the future of business growth. Increase the marketing budget with business slowly reaching the peak of demands for your product and services.

7- Spending money on non-traceable ads

As the market changes, so as the marketing plan, pricing and target audience. Invest and assign marketing plans that are traceable. Traceable marketing means follow-up charts to analyze data.

The worst mistake of marketing is to spend money on a plan that cannot be traced and measured. This marketing mistake is wasting money or in other terms is shooting in the dark.

8- Do not trace the result

Many businesses have assigned a budget for the traceable marketing plan but sadly do not follow-up on the result and do not trace it. This is just the same as spending wasteful money on non-traceable.

9- Think in a closed box:

Each business is unique. Even if the business offers a same product as other business few streets down the road, the two are still unique and different in many ways. The biggest mistake small business owners make is to follow other businesses’ footsteps. Marketing and its strategies should not have any limitation. Think of marketing out side of the box and do not limit the marketing strategies to a cliché approach others do. Be creative and design a plan unique and suitable for the very business.

10- Don’t know what plans to set:

Everyone is familiar with the word marketing. The first conversation when opening a new enterprise is “Lets do marketing!” But do we all really realize the core meaning of it?

I compare marketing strategies and its unique approach to our fingerprints, which is distinctive. Many understand the word marketing but are not familiar with how to set the strategy and the game planning related to the business.

It is a big mistake not knowing how to set the strategies while being fully aware of marketing important role in the business. Since setting the marketing plan requires research, analysis and knowledge of he market, hire a professional researcher and marketer to create the necessary game plan.

11- Assuming the product or service will sell itself:

One of the biggest marketing mistakes is to assume your product or service is going to sell itself. This assumption is misleadingly translating marketing into advertisement. I have met many small business owners who declared that quote-to-quote “I don’t spend money on the marketing, to me I only rely on word of mouth”.

Word Of Mouth is the strongest way of marketing. So what this small business owner was under impression that he does not do any marketing because he thought marketing was spending money on advertisement. So he was counting on the most effective marketing, the word of mouth. Word of mouth consists of two factors:

A) Product or service:

People have to like the product or service to continue talk about it and refer their friends.

B) Customer service

Another major difference between businesses is the level of customer service. I didn’t say the level of good or bad. What I mean is each business owner or employee that has been fully trained to look after a client as a customer service has his or her own charm. This specific charisma and character make the business unique to others and is a major influence for word of mouth.

Let me give you an example of how powerful the word of mouth and spreading the word is to any business. While ago, I worked as a junior manager in an up-scale restaurant. The general manager identified his target niche as young professionals in downtown area. So he hand-picked few employees in the same age range as the targeted niche to use public transportation and talk about the restaurant among each other. His decision, although was not directly traceable, but yet had an amazing effect. How did I analyse the result and witness the proof?

The restaurant offered comment cards, asking “How you hear about us?” and many without any surprise responded via word of mouth in public transportation.

Even if the business owner is avoiding any advertisement cost, they still rely on spread of word about their service and product via the community and the word of mouth marketing.

12- Don’t know the target audience:

To plan and set a marketing strategy, any small business has to have a direct target niche as an audience. Analyze everything about the niche audience. The list certainly is not limited to the audience’s income, age, interest ratio to the product, sex, education, commitment ratio and their loyalty.

13- Don’t know the competition:

The best way to analyze the market is to get familiar with the competition and rivals. It might sound cliché but as the Godfather movie suggested, “Keep you enemy close”. Or if I may rephrase ” Keep your competition close and be aware of their moves”.

This is especially important for small business owners in small community to have a good relationship with other competition. To share my experience in the same restaurant I used to manage, the general manager always encouraged me to go to other local restaurants and dine. He even offered to pay the bill. All I had to do was to analyze everything from the greeting, staff knowledge, manager’s presence, client’s relation and the overall quality. My report helped him to understand his competition strengths and weaknesses.

14- Hiring wrong person to do marketing:

Many small business owners out of desperation and lack of networking, hire wrong people to do their marketing. As we said earlier, every business has unique offering and services so must focus on unique planning for its marketing strategies.

It is the small business owner’s responsibility to hire a professional firm who can relate to the business’s need and offerings.

A good reputable marketing firm whose focus is to promote books and authors in not a good fit for a small local bistro.

15- Underestimate the value of existing clients:

A good businessperson always knows the value of the existing clients;

The best way of follow-up with the existing clients is to create informative data about them. Many small business owners lack this very important source of information. To avoid this mistake, keep a record of every client’s information. If the information requires certain personal data, keep it in a safe and secure place.

A client whom already has experienced your product and service knows about the quality of it. Always do follow-up calls and do not be afraid to ask how they liked the product or service. Even if the client responses back with dissatisfaction is a perfect opportunity for the business owner to fix the problem.

Gain a new customer is costly. I am gong to explain this by an example:

“Nancy enters Joe’s café because of a coupon she found in a local magazine offering 10% discount. She solely relies on a menu attraction, prices, quality of the food and customer service. Joe the owner spent lots of money and time for marketing after analyzing the community needs, price affordability and the targeted niche market.

Joe has three ways to collect emails or phone calls for follow back:

A) placing a note pad in front of the cashier’s desk asking new clients to write email or contact info for special promos.

B) Placing a glass bowl by the cashier’s desk offering the weekly draw of free lunch from dropped business cards.

C) Offering comment cards and asking for contact info.

Joe has three ways to accumulate client’s information and follow-up with them. So everyday he goes through all the information and creates a secure data.

Nancy finds the place charming and the food great but not a good customer service. It is Joe’s responsibility to follow-up and gain back Nancy’s business once again to avoid spending all the money and time all over to attract another new client.”

Existing clients are the perfect way to promote every business. Send special offering, communicate with them and even ask them to share your business with their friends. Respect the boundary between proper communication and spamming.

16- Not offering giveaways and novelty items:

One of the most effective ways to attract clients is to giveaway your product or service for free.

A) Test run: Offer a monthly test run of your product and service and giveaway a free sampler. People love to get samplers. It gives them information about your business and its quality.

B) Propose monthly contest: Proffer a monthly contest and giveaway prizes based on participating in your business. People love contest and it excites them to know they can win something. If it didn’t work, Lottery and Casinos didn’t exist.

C) Give out novelties like mugs, pen, key chain, notepad, calculator, shirts and hats with the business information printed on it.

17-Wrong niche:

As a business owner recognizing correct niche market target is necessary for further marketing planning and budget assignment.

To explain this better lets picture a shoe store that carries high-end fashion shoes for women. The first thing that comes into the mind, high-end fashion niche is only younger generation and teenagers. A good business owner will explore the possibilities to analyze further more into the data from business plan to understand the local community needs.

If selling high-end, then its higher quality and higher prices. A teenager on a student living budget cannot be a direct and only target niche. So the correct niche is a professional and higher income spender who is more interested in quality without considering the price tag.

This example clears how a business owner distinguishes the certain target audience by analyzing the local market data from business plan. With enough knowledge in market research, the business owner avoids wasting the marketing budget on a wrong niche.

18-Not participating in community:

“Every big things has small beginning”

Regardless of the geographical target of any business, whether global or corner store in a small village, it all begins with local community.

Who are the first people you would share news with in your everyday life? Family and friends are the strongest link to marketing and spreading the word. It starts from friends and family and spreads to their friends and family and before you know it, is a snowball effect and cumulative.

The local community is the test run before spending a time and money on a dead-end marketing plan.

19- Do not own an informative and representative website:

Internet plays a great deal of connection in people’s life everyday. Many customers use the Internet to search and review local businesses. No matter what kind of business, it requires an informative and user-friendly website. A good business website is a gateway that welcomes customers to enter and experience the business offering.

Many small business owners making mistake and assume their line of business does not need a website. With daily development of technology, people get more connected via Internet and do their shopping online. Search engines get stronger everyday by developing codes and programs to bring up the exact and precise inquiry.

20- Do not appreciate the value of the Internet:

With a vastly growing competition on the Internet and the increase in demand for business development, simply having a website that offer information is not enough. Popular search engines are only producing websites in their search result, which have better ranking. Many small business owners simply making a big mistake by avoiding the presence on the Internet and ignore the growing highway to success. Every business must have an informative website and optimizes the business on search engines, social media and popular relevant forums. This subject of Internet marketing and its highly effective marketing plans is a lot of subject to cover in this article.

21- Expecting too much in short time:

Do not expect too much in a short time. There is always cause and effect but it requires proper time period to produce best effect. A seed needs time to open the surface and grow to a strong tree. But it requires water and good fertilization. Marketing is the water and fertilization to the business. It takes time for a good marketing plan to spread the roots and make a strong holding ground.

“Rome was not built in a day”

It took generations and much hard work of skilled engineers, planning and proper budgeting to build the mega city of Rome.

Can you hold a roof without building the pillars and the walls?

Marketing is the pillar of the business. Without marketing and planning, business lacks a foundation.

Many business owners place the marketing and development in their last page when the business opens its door to the public. Marketing starts when the business idea takes shape. It begins before the business is even called a business. Avoid making marketing mistake and start your marketing with knowledge and strategy.

Marketing is the heart of every business and keeps the health of the company in balance. But treat the heart right. Eating healthy, exercise and lack of stress are keeping the heart healthy to beat the life into our body. Practicing and implementing the right marketing strategies keep the business in shape. Don’t make mistake if you had a good run. Many small business owners get too excited for this temporary beat of recognition and look at it as everlasting. To keep a good balance in business, marketing and planning should match the flow of the business. Increase your strategies as your business grows and increases.

Marketing is the pillar of every business and is the only foundation to go further, faster. Imagine a boat with no engine crossing the Atlantic. The marketing to a business resembles the engine to a boat. The planning and strategy of the marketing to the business is the safety gear of the boat that keeps it balance and not to tip over.

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Top 10 Marketing Books for Small Business Owners

Unlike big business owners, small business owners have the burden of taking care of every single aspect of their business – recruitment, marketing, finance, accounts, managing employees to managing vendors, and so forth. But here we focused only on books that can help you gain marketing knowledge and skills. Here are the top 10 books on marketing which we believe are helpful for new as well as established small business owners.

Book # 1: The New Rules of Marketing & PR – David Meerman Scott

In the new marketing scenario, the methods such as ad copy, etc. do not bring results for your business. With the popularity of smartphones and other devices and proliferation of the Internet, new methods, rules, etc. of marketing have evolved. This book discusses the importance and benefits of using such techniques.

David M Scott provides fresh examples of success from various industries and businesses across the world. He highlights the new tools and techniques that marketers should use to communicate with their buyers directly – Twitter, Facebook, LinkedIn and YouTube. In short, this book is a guide that offers actionable strategies and insider tips that can be implemented immediately.

Book # 2: Word of Mouth Marketing: How Smart Companies Get People Talking – Andy Sernovitz

This book by Andy Sernovitz emphasizes the use of word of mouth marketing for businesses. The book elaborates purpose of blogs, social media, viral emails, etc. – when to use them and how to make them work.

Word of mouth is an effective tool to share information quickly and easily to promote businesses. It is an effective tool that can promote your business via your customers, friends and relations.

Book # 3: Guerrilla Marketing: Easy and Inexpensive Strategies for Making Big Profits from Your Small Business – Jay Conrad Levinson

This book furnishes strategies for Internet marketing, tips on using technology like pod-casting and automated marketing, programs for targeting prospects, cultivating repeat, referral business, management lessons in the age of telecommuting and freelance employees, etc. – exclusively for small businesses.

Book # 4: Duct Tape Marketing: The World’s Most Practical Small Business Marketing Guide – John Jantsch

John Jantsch is a well-known expert in small business marketing. In the book, he discusses all the proven tools and tactics together in a step-by-step marketing system. This road map helps small business owners in knowing what they need to do to market their businesses.

Book # 5: Smarter, Faster, Cheaper: Non-Boring, Fluff-Free Strategies for Marketing and Promoting Your Business – David Siteman Garland

This book provides strategies for building, marketing and promoting businesses. These techniques are smarter, faster, cheaper and therefore save your time and money. The book is equally helpful for start-ups as well as those who are already in the market for sometime.

Book # 6: Marketing Shortcuts for the Self-Employed: Leverage Resources, Establish Online Credibility and Crush Your Competition – Patrick Schwerdtfeger

This book provides effective practical strategies and tactics – a complete tool kit to use resources sensibly, to establish online credibility. If you apply these strategies, you can get good results for your business within a brief span of time.

Book # 7: Ultimate Small Business Marketing Guide – James Stephenson

This book is an essential guide for every business owner. James Stephenson presents in this book 1500 great marketing ideas that are sure to boost your sales revenue, profits and customer loyalty and also to help you stay ahead of your competitors.

Book # 8: Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth – Stephanie Diamond

Marketing for small businesses was difficult in the past. But today, it is not the case. Web marketing enables small businesses to take advantage of marketing opportunities and win new customers.

The book ‘Web Marketing for Small Businesses: 7 Steps to Explosive Business Growth’ focuses on different ways of marketing with a detailed strategy to put them into action. The main content of the book comprises checklists – niche, brand, story, search, content, social media tactics, traditional tactics and results. This book helps you implement web marketing strategies.

Book # 9: Likeable Social Media: How to Delight Your Customers, Create an Irresistible Brand, and Be Generally Amazing on Facebook – Dave Kerpen

This book is a key to unlock the door to new opportunities. It tells you about how to build brand awareness by engaging customers in social networking sites like Facebook, Twitter and other social media networking sites.

Book # 10: 500 Social Media Marketing Tips: Essential Advice, Hints and Strategy for Business: Facebook, Twitter, Pinterest, Google+, YouTube, Instagram, LinkedIn, and More! – Andrew Macarthy

This book is a guide to small businesses. It provides 500 social media marketing tips covering all the web’s biggest players like Facebook, Twitter, Pinterest, Google+, YouTube and others. These tips will help you build brand awareness in social media networks, attract and engage your customers and ultimately help you increase sales.

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Settle Your Small Business Taxes With a Peer-To-Peer Loan

Like the saying goes, “The only things certain in life are death and taxes.” Unfortunately, small businesses know this saying all too well.

Unlike employees who look forward to their refund every April, small businesses loath the approaching spring, knowing they will have to pay Uncle Sam its share of their profits. Each year, small businesses struggling to turn a profit in an increasingly competitive business environment must pay taxes in order to keep their doors open.

With dwindling profit margins and tightened lending restrictions, however, many small business owners find themselves between a rock and a hard place when it comes time to pay the tax man. Although a business may have steady sales and revenue or thousands of dollars in inventory, banks and traditional lending institutions simply aren’t handing out small business loans like they were in year’s past, leaving small business owners with few funding options to pay their tax bill.

Thankfully, peer-to-peer lending, or social lending, has solved this growing dilemma. These modern social lending marketplaces have connected millions of borrowers with individual investors. Borrowers receive low-interest, fixed-rate loans that can be paid off in two to five years, while investors are able to benefit from decent returns in an economy with sinking bond and savings rates.

Thus, it’s a win-win situation for both small business owners in need of immediate funding and investors looking to make a small profit while helping others.

From Desperation to Exultation: One Man’s Venture into Peer-to-Peer Lending

John Mitchell is an Ohio-based small business owner who found himself in such a predicament just last year. As the owner of the only hardware store in a small town, John’s store flourished the first few years it was open.

After getting his inventory levels, pricing models, and management just right, he decided to expand his business by opening a second location in a neighboring town. John sunk all of his profits into opening his new store, which meant he was short on funds come tax time. However, knowing the success of his business, he thought he would simply get a small loan from the bank that housed his accounts and provided him with the initial loan he used to launch his business four years earlier.

Unfortunately, he witnessed first-hand the effect the recession has had on lending regulations as the banker he’s known for years denied his loan application. If he couldn’t get a loan there, where could he?

On the brink of despair, John took to the Internet to research loan options. After digging through forums and trying a few different searches, he ran across peer-to-peer lending. In less than a week after going through the quick and easy application process, he received a personal loan at a low rate for the amount he needed. A week later, John sent a check for the full amount to the IRS, and less than eight months later, he was able to pay off the loan with the profits from his new store!

If you are a small business owner who has found yourself in a similar circumstance, peer-to-peer lending can do the same for you as well, but how does peer-to-peer lending work?

How Peer-to-Peer Lending Works

A breakthrough product or service emerges every generation, and in the early 2000′s, the emerging breakthrough was social networking. From helping in the organization of overthrowing political regimes to staying in touch with friends and family members, social networking has had a profound effect on our daily lives. Now, it’s changing the small business financing landscape as well.

Peer-to-peer lending is a modern social networking solution for small businesses in search of a way of securing alternative funding. The goal of peer-to-peer lending sites, such as Prosper and Lending Club, is simply to connect individual investors with those in need of funding, and these sites are becoming an increasingly useful tool for small business owners who are unable to secure funding from traditional lenders.

Rather than jumping through endless hoops only to be denied by a bank, small businesses can receive funding via peer-to-peer lending in no time at all by following three simple steps:

Step 1: Create a Profile and Loan Listing

There are a myriad of peer-to-peer lending networks to choose from, so your first step is to research the best ones and create a profile and loan listing on the site you choose. The loan listing is essentially a cost-free ad that indicates the amount of money you need and your desired interest rate.

Step 2: Let the Bidding Process Begin

After your listing goes live, investors have the opportunity to begin bidding on your listing, providing you with the interest rate and loan amount they are willing to offer you. A major advantage of this bidding process is the fact that it can intensify as more and more lenders begin competing for your business.

When this happens, interest rates will begin dropping, potentially allowing you to obtain a much lower interest rate than you expected. It’s important to note, however, that your credit score, income, and debt-to-income ratio plays a role in the lending decision process.

Step 3: Funding and Paying Back the Loan

Another benefit of borrowing from peer-to-peer lenders is that you can accept several bids to receive your requested loan amount. For instance, if you ask for $10,000 in your loan listing to pay your business taxes, you can acquire the amount from collecting $2,000 from five different borrowers.

This makes it much easier for borrowers to receive the money they need. However, instead of making five separate payments, you would only make one payment, because the peer-to-peer lending site is responsible for dispersing the money to lenders until loans are repaid in full. They simply charge a small fee for this service.

With increased lending regulations, banks are tightening their purse strings more than ever before, making it much more difficult for small businesses to receive the funding they need to expand their business or even pay their taxes. Thankfully, peer-to-peer lending has proven to be a worthy competitor in the small business lending marketplace. If you are a small business owner and find yourself unable to pay your taxes as April approaches, or backed taxes for that matter, a peer-to-peer loan is an ideal option.

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7 Things Successful Small Business Owners Do

If you’re stuck wondering how to be a successful small business owner, know this: running a small business often simply means making good use of successful small business ideas. Successful small business owners face many ups and downs throughout their work. They know that small business ideas cannot turn out successful unless they use the proper approach and strategies.

If you want to be one of the few successful small business owners, remember that having a good strategy is crucial. Without the right strategy and a proper approach, you are not likely to achieve your goal.

Some small business owners manage to overcome their everyday challenges, while others seem to give up after a while. So, let’s find out what successful small business owners do differently from the unsuccessful ones. Let’s turn their experience into your success through your small business ideas.

1. MAKE ANNUAL REVISIONS OF YOUR BUSINESS PLAN AND BUDGET

Every business goes through changes every now and then, including your small business. For this reason, your business plan and budget should be somewhat flexible to bear such changes along with your business goals. Without revising your business plan and budget, you shouldn’t expect your business to flourish and expand.

The flexibility of your business plan will help you avoid and overcome the eventual unpleasant surprises on the market. Also, such flexibility will give you some time to adjust to certain changes you may experience on your way.

Every business experiences both success and failure points each year. In order to detect and estimate these points, you should revise your budget and business plan every year. While revising, you should check if you are still going in the right direction. If not, you may need to make some changes and adjustments to achieve better results in the upcoming period.

Successful small business owners don’t hesitate to reallocate funds, if that is what it takes to achieve success. In order to increase profits, after they conduct a business revision, smart business owners define and implement the necessary changes immediately.

2. UPDATE YOUR OFFER AND ADD VALUE TO IT

People change, as do their needs and habits. As soon as you notice that you aren’t selling as much as you used to sell before, it is time to make changes. If people aren’t purchasing what you currently have to offer, that’s a clear hint that something needs to be done.

A simple price cut may be the first thing that comes to your mind. As much as lower prices may seem more appealing to your customers, they also point to a devaluation of what you offer. Devaluation of your products or services is never a good thing, so try doing just the opposite – add value to your offers.

The best way to update and add value to your products and services is by developing new offers. If possible, try to offer something completely new to your customers. You could offer product bundles, training programs and workshops, and so on.

3. DARE TO BE DIFFERENT

Most successful small business owners believe in daring to be different. They know their target consumers. Trying to target everyone and anyone as a consumer will get you nowhere fast. Instead of trying to make products for the masses, focus on a clearly targeted community and grow with it. Once you target your consumers, it is easy to understand their needs.

Understanding your consumers is the secret to a successful business. When you know their needs, you can modify your products and services in order to satisfy them. Satisfied consumers will not only become your regulars, but they will also spread the word about what you offer. This may become the best marketing strategy for your business.

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How to Get Financing For Your Small Business

In today’s hostile economic environment, access to capital is the primary differentiating factor between those businesses which have been able to expand and gain market share versus those that have experienced enormous drops in revenue. The reason many small businesses have seen their sales and cash flow drop dramatically, many to the point of closing their doors, while many large U.S. corporations have managed to increase sales, open new retail operations, and grow earnings per share is that a small business almost always relies exclusively on traditional commercial bank financing, such as SBA loans and unsecured lines of credit, while large publicly traded corporations have access to the public markets, such as the stock market or bond market, for access to capital.

Prior to the onset of the financial crises of 2008 and the ensuing Great Recession, many of the largest U.S. commercial banks were engaging in an easy money policy and openly lending to small businesses, whose owners had good credit scores and some industry experience. Many of these business loans consisted of unsecured commercial lines of credit and installment loans that required no collateral. These loans were almost always exclusively backed by a personal guaranty from the business owner. This is why good personal credit was all that was required to virtually guarantee a business loan approval.

During this period, thousands of small business owners used these business loans and lines of credit to access the capital they needed to fund working capital needs that included payroll expenses, equipment purchases, maintenance, repairs, marketing, tax obligations, and expansion opportunities. Easy access to these capital resources allowed many small businesses to flourish and to manage cash flow needs as they arose. Yet, many business owners grew overly optimistic and many made aggressive growth forecasts and took on increasingly risky bets.

As a result, many ambitious business owners began to expand their business operations and borrowed heavily from small business loans and lines of credit, with the anticipation of being able to pay back these heavy debt loads through future growth and increased profits. As long as banks maintained this ‘easy money’ policy, asset values continued to rise, consumers continued to spend, and business owners continued to expand through the use of increased leverage. But, eventually, this party, would come to an abrupt ending.

When the financial crisis of 2008 began with the sudden collapse of Lehman Brothers, one of the oldest and most renowned banking institutions on Wall Street, a financial panic and contagion spread throughout the credit markets. The ensuing freeze of the credit markets caused the gears of the U.S. financial system to come to a grinding halt. Banks stopped lending overnight and the sudden lack of easy money which had caused asset values, especially home prices, to increase in recent years, now cause those very same asset values to plummet. As asset values imploded, commercial bank balance sheets deteriorated and stock prices collapsed. The days of easy money had ended. The party was officially over.

In the aftermath of the financial crisis, the Great Recession that followed created a vacuum in the capital markets. The very same commercial banks that had freely and easily lent money to small businesses and small business owners, now suffered from a lack of capital on their balance sheets – one that threatened their very own existence. Almost overnight, many commercial banks closed off further access to business lines of credit and called due the outstanding balances on business loans. Small businesses, which relied on the working capital from these business lines of credit, could no longer meet their cash flow needs and debt obligations. Unable to cope with a sudden and dramatic drop in sales and revenue, many small businesses failed.

Since many of these same small businesses were responsible for having created millions of jobs, every time one of these enterprises failed the unemployment rate increased. As the financial crisis deepened, commercial banks went into a tailspin that eventually threatened the collapse of the entire financial system. Although Congress and Federal Reserve Bank led a tax payer funded bailout of the entire banking system, the damage had been done. Hundreds of billions of dollars were injected into the banking system to prop up the balance sheets of what were effectively defunct institutions. Yet, during this process, no provision was ever made that required these banks to loan money out to consumers or private businesses.

Instead of using a portion of these taxpayer funds to support small businesses and avert unnecessary business failures and increased unemployment, commercial banks chose to continue to deny access to capital to thousands of small businesses and small business owners. Even after receiving a historic taxpayer funded bailout, the commercial banks embraced an ‘every man for himself’ attitude and continue to cut off access to business lines of credit and commercial loans, regardless of the credit history or timely payments on such lines and loans. Small business bankruptcies skyrocketed and high unemployment persisted.

During this same period, when small businesses were being choked into non-existence, as a result of the lack of capital which was created by commercial banks, large publicly-traded corporations managed to survive and even grow their businesses. They were mainly able to do so by issuing debt, through the bond markets, or raising equity, by issuing shares through the equity markets. While large public companies were raising hundreds of millions of dollars in fresh capital, thousands of small businesses were being put under by banks that closed off existing commercial lines of credit and refused to issue new small business loans.

Even now, in mid 2012, more than four years since the onset of the financial crisis, the vast majority of small businesses have no means of access to capital. Commercial banks continue to refuse to lend on an unsecured basis to almost all small businesses. To even have a minute chance of being approved for a small business loan or business line of credit, a small business must possess tangible collateral that a bank could easily sell for an amount equal to the value of the business loan or line of credit. Any small business without collateral has virtually no chance at attaining a loan approval, even through the SBA, without significant collateral such as equipment or inventory.

When a small business cannot demonstrate collateral to provide security for the small business loan, the commercial bank will ask for the small business owner to secure the loan with his or her own personal assets or equity, such as equity in a house or cash in a checking, savings, or retirement account, such as a 401k or IRA. This latter situation places the personal assets of the owner at risk in the event of a small business failure. Additionally, virtually all small business loans will require the business owner to have excellent personal credit and FICO scores, as well as require a personal guaranty. Finally, multiple years of financial statements, including tax returns for the business, demonstrated sustained profitability will be required in just about every small business loan application.

A failure or lack of ability to provide any of these stringent requirements will often result in an immediate denial in the application for almost all small business loans or commercial lines of credit. In many instances, denials for business loans are being issued to applicants which have provided each of these requirements. Therefore, being able to qualify with good personal credit, collateral, and strong financial statements and tax returns still does not guarantee approval of a business loan request in the post financial crisis economic climate. Access to capital for small businesses and small business owners is more difficult than ever.

As a result of this persistent capital vacuum, small businesses and small business owners have begun to seek out alternative sources of business capital and business loans. Many small business owners seeking cash flow for existing business operations or funds to finance expansion have discovered alternative business financing through the use of merchant credit card cash advance loans and small business installment loans offered by private investors. These merchant cash advance loans offer significant advantages to small businesses and small business owners when compared to traditional commercial bank loans.

Merchant cash advance loans, sometimes referred to as factoring loans, are based on the amount of average credit card volume a merchant or retail outlet, processes over a three to six month period. Any merchant or retail operator that accepts credit cards as payment from customers, including Visa, MasterCard, American Express, or Discover, is virtually guaranteed an approval for a merchant credit card advance. The total amount of cash advance that a merchant qualifies for is determined by this three to six month average and the funds are generally deposited in the business checking account of the small business within a seven to ten day period from the time of approval.

A set repayment amount is fixed and the repayment of the cash advance plus interest is predetermined at the time the advance is approved by the lender. For instance, if a merchant or retailer processes approximately $1,000 per day in credit cards from its customers, the monthly average of total credit cards processed equals $30,000. If the merchant qualifies for $30,000 for a cash advance and the factoring rate is 1.20, the total that would need to be repaid is $30,000 – plus 20% of $30,000 which equals $6,000 – for a total repayment amount of $36,000. Therefore, the merchant would receive a lump sum of $30,000 cash, deposited in the business checking account, and a total of $36,000 would need to be repaid.

The repayment is made by automatically deducting a pre-determined amount of each of the merchant’s daily future credit card sales – usually at a rate of 20% of total daily credit cards processed. Thus, the merchant does not have to write checks or send payments. The fixed percent is simply deducted from future credit sales until the total sum due of $36,000 is paid off. The advantage to this type of financing versus a commercial bank loan is that a merchant cash advance is not reported on the personal credit report of the business owner. This effectively separates the personal financial affairs of the small business owner from the financial affairs of the small business entity.

A second advantage to a merchant credit card cash advance is that an approval does not require a personal guaranty from the business owner. If the business is unable to repay the merchant cash advance loan in full, the business owner is not held personally responsible and cannot be forced to post personal collateral as security for the merchant advance. The owner removes the financial consequences that often accompany a commercial bank business loan that requires a personal guaranty and often forces business owners into personal bankruptcy in the even that their business venture fails and cannot repay the outstanding loan balance.

A third, and distinct advantage, is that a merchant credit card cash advance loan does not require any collateral as additional security for the loan. The future credit card receivables are the security for the cash advance repayment, thus no additional collateral requirements exist. Since the majority of small businesses do not have physical equipment or inventory that can be posted as collateral for a traditional bank loan, this type of financing is a phenomenal alternative for thousands of retail businesses, merchants, sole proprietorships, and online stores seeking access to capital. Such businesses would be denied automatically for a traditional business loan simply because of the lack of collateral to serve as added security for the bank or lender.

Finally, a merchant credit card advance loan approval does not depend upon the strong or perfect personal credit of the business owner. In fact, the business owner’s personal credit can be quite poor and have a low FICO score, and this will not disqualify the business from being approved for the cash advance. The business owner’s personal credit is usually checked only for the purpose of helping to determine that factoring rate at which the total loan repayment will be made. However, even a business owner with a recently discharged personal bankruptcy can qualify for a merchant credit card cash advance loan.

Since the cash funds being lent on merchant credit card advances is provided by a network of private investors, these lenders are not regulated or affected by the new capital requirements that have placed a constraint on the commercial banking industry. The merchant cash advance approvals are determined by internal underwriting guidelines developed by the private lenders in the network. Each loan application is reviewed and processed on a case-by-case basis and approvals are issued within 24 to 48 hours from receipt of a complete application, including the previous three to six months of merchant credit statements.

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