Thursday, October 25, 2012

Get More for Your Marketing

Most small business owners have to make every dollar in their marketing budget count. Easier said than done in a world that offers such a variety of high-tech and traditional marketing tools. Maximizing the value you get from your investment often depends on your willingness to plan ahead, learn from past mistakes, and to develop and implement a consistent strategy to fully leverage all elements of your program. Here are a few ideas to get you started:
  1. You must have a clear, consistent image in the marketplace. In terms of visual materials, this means there should be a consistent look to all your customer communications. Use the same logo (or company signature) the same typeface(s), and the same design style for ads, print materials, trade show literature, billboards, websites and online communications. This increases cumulative recognition – increasingly important in today’s world where consumers are bombarded with information. For this to work – and for you to get the maximum bang for your buck – it’s important that everyone who develops marketing or sales materials understands the importance of consistency. Having a pre-production sign-off procedure for all marketing materials will ensure that everything is consistent and meets your firm’s guidelines.
  2. If you are promoting the same product or service to many different customers and need print materials, think modular. Develop a basic print layout with sections for the overall information that is useful to all your customers; then reserve a section or two that will have information specific to certain industries or customer segments. The tailored copy can be stripped into the basic layout – as required – in the print production phase. This approach can save significant time and money; and it works online, allowing customers to select tabs with the sections that are relevant to their specific industry or business needs.
  3. Be realistic about what type of marketing material you need and in what quantity. Assess where your business leads are generated and measure the results of past programs. If your audience is tech-savvy and web-focused, your need for traditional print materials might be reduced. However, you might need product data sheets (as well as an e-catalog) accessible online that provide specific product features and benefits. Is your website easy to access and use on a handheld device (smartphone or tablet)? If possible, avoid registration or check-in procedures on your mobile website. They are fiddly and difficult to complete using a smartphone keypad. Make it as easy as possible for website visitors (mobile or not) to request more information by phone, online chat or mail.
  4. If you are a small company and agencies are not within your budget, look for good creative talent in the freelance and self-employed pool. Check online, in professional directories and local Chamber of Commerce publications to identify freelance or self-employed marketing professionals. Review client references and work samples carefully, and make sure that you understand whether you are paying on a project or hourly basis.
Lastly, remember that critics are your best friends. If negative comments don’t reach you early enough, the dissatisfaction might show up in your P&L eventually. Solicit feedback and listen to it – the good and the bad. Find out which marketing tools worked and which ones didn’t, and use feedback surveys on your website to get opinions from your clients or customers.

Tuesday, October 23, 2012

Do You Really Need the New iPhone5?

The question is academic for the throngs who camped outside Apple stores to get their hands on the Apple’s latest smartphone – but do you really need the new iPhone5. First of all, improvements in smartphones have been incremental rather than earth-shattering since the 2007 launch of the first iPhone, which did change the game for all cell phones. This new release is no different. With this in mind, are the new features and benefits worth spending the money to upgrade? The answer depends on how you use your smartphone. Here’s a quick review of the major enhancements and who will benefit most.
If You Feel the Need For Speed

The new iPhone5 has a speedier processor – Apple claims it is twice as fast as its predecessor. If you use your smartphone for calls, messaging and emails, this might not be an issue for you; but if you like to play games or if you think your current smartphone is too slow, then this new model might be just what you need.

If You Use Your Smartphone as a Camera

The new iPhone5 has the same 8-megapixel sensor as the iPhone4S, but Apple has made a few improvements to overall image quality. Perhaps the most significant camera improvement is its speed. Focusing is instantaneous, and you can take shots in rapid succession. The new iPhone will also allow you to take panoramic images. If you recall how the camera functioned in the earlier iPhones, you will be amazed. This one delivers like you expect a real camera to perform.

If You Want a Bigger Screen

Perhaps the most obvious new feature is its bigger screen, expected to entice users who like to stream movies or video. The phone is the same width, but it is about 9 millimeters taller – giving the screen the right dimensions for wide-screen movies. Unfortunately, your old third-party apps will have space to spare until they are redesigned. When they are reconfigured, they will have more screen space, too. Whether the larger screen creates more video-streaming users remains to be seen. The bigger viewing area might not be sufficiently large for those who have the choice of using an iPad or competitors’ tablets.

If You Are Using an iPhone3 and Looking to Upgrade

If you have an iPhone3 or earlier model, you will probably want to bypass the iPhone4 and look at the Siri-voice assisted models. If you like to use your phone to find restaurants or other local services, the hands-free Siri feature is very useful. That being so, it makes sense to go straight to the latest model, which offers all the iPhone4S features plus more speed, a bigger screen, a better camera and a thinner, lighter design.


The phones are expensive. Even though Apple has not increased the price since its last launch, you will be signing up for a new data plan. Buying the phone is just part of your budget planning. Analysts suggest that video streaming on a cellular connection will gobble up a lot of data time, as will using the video chat application. And on that note, some industry experts think that video-streaming apps are threatening to overwhelm current network capacity. These experts have expressed concern that existing high-speed 4G networks will become overloaded if more video users jump on the bandwagon.

Tuesday, October 16, 2012

Act Now on Low Interest Rates

The Federal Reserve recently announced it would keep the federal funds rate at 0 percent to 0.25 percent at least through mid-2015. This nearly three-year timeline presents an excellent opportunity for Americans – both consumers and business owners alike.

Low interest rates make money less expensive to borrow and therefore increase the money supply available throughout the financial system. This currency strategy is designed to help spur the economy out of recessionary conditions.

For a small business, prolonged low interest rates are similar to cutting prices to encourage more foot traffic to a store. Typically, when sales revenues slow down, a firm will hold a sale or quote lower rates in order to drum up more business. Lower interest rates are designed to create a similar situation. By making it easier for you to borrow money at reasonable rates, you pay less money on the loan and invest more in the growth of your business. Significant cost savings can come from locking in a low interest rate loan, particularly if you’re considering making a major purchase that requires financing.

When you borrow money at less than the rate of inflation, it’s basically free money. The beauty behind using a bank’s money to finance purchases is that it enables you to maintain your current assets and investments in higher-performing assets – providing you with more flexibility and liquidity options. For small businesses in particular, the ability to fund high-ticket purchases or increase payrolls and jobs without impacting current cash flow can significantly contribute to a firm’s growth in a short time period.

The current three-year window of low rates provides the opportunity to invest in short-term, revenue-boosting investments for a long-term return. Funded improvements you might want to consider include:
  • Investing in technology to take advantage of social media, multimedia and sales opportunities via the web and mobile technology
  • Equipment
  • Vehicles
  • Commercial real estate
  • New store openings
  • Additional personnel
  • Refinancing of existing debt at lower rates to increase current cash flow
Low-Interest Rate Financing

The Small Business Lending Fund was established by the federal government in 2010 to provide $4 billion in funding to more than 330 qualified community banks. This effort was specifically initiated to stimulate small business lending. The SBLF is designed to give community banks financial incentive to make loans to credit-worthy small businesses with less than $50 million in annual revenues. Loans must be less than $10 million to qualify as small business lending under this program.

Furthermore, the State Small Business Credit Initiative was established in order to strengthen new and existing state programs that support lending to small businesses. This program has made approximately $1.4 billion in funds available to more than 150 state-run programs in 54 states and territories.

Combine Low Rates and Tax Deductions

In addition to enjoying lower rates on business loans, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 amended two tax advantages benefiting small business owners. The Code Section 179 deduction, which applies to leasehold improvements, restaurant and retail property, and new and used machinery and equipment, allows a business to treat the cost of qualifying property as an expense rather than a capital expenditure. The expensing limit is currently $139,000, and the cost of equipment limit is set at $560,000. The first year bonus depreciation deduction is 50 percent through 2012, but two recent proposals could increase the deduction to 100 percent through the end of the year.

Visit the Small Business Administration website to learn more about lending programs for which you might be eligible. The best way to take advantage of today’s low interest rates is to establish and maintain a strong working relationship with your bank or lending institution. It’s also a good idea to consult with your business or financial advisor who can collaborate with other professionals, such as a tax advisor, to help optimize your plans for future growth.

Tuesday, October 9, 2012

Avoiding Business Failure-Learn from Others

According to the U.S. Small Business Administration, more than half of entrepreneurships fail within the first five years of existence. Former small business owners cite a litany of reasons why their business didn’t make it, usually ranging from complaints about banks and the government to their allegedly incompetent partners. Although some of these reasons are legitimate, most small business failures are caused by a lack of planning and focus on the part of the owners – despite the fact that there are many experienced professionals willing to provide assistance.

The most common cause of small business failure is the market, or more specifically, the lack thereof. Surprisingly often, would-be entrepreneurs do not perform enough research to ensure that there is ample demand for their product or service at a price that will create a profit. It is vital that they test the market for their products before losing their savings in a doomed enterprise. Prospective entrepreneurs should start slowly to develop as much certainty as possible that their product will sell and their business will succeed.

Starting slowly is a valuable mantra that also exposes another reason why small businesses fail: excessively rapid expansion. Successful businesses that try to maintain a breakneck growth rate can quickly develop growing pains. Owners become overwhelmed and a once-profitable business becomes damaged by expanding too rapidly into unprofitable markets or taking on too much debt.

Borrowing too much money can also exhaust a new business’ cash cushion. Especially in the early stages of an enterprise, having cash on hand for unforeseeable events can often make the difference between success and failure. Businesses are cyclical, so there will always be up times and down times, but small business owners need to be able to survive the unexpected – a natural disaster, a lawsuit, the introduction of a competitor or the loss of an important customer or employee.

Small business owners also need to control their costs. Materials, software, wages, rent and state and federal taxes take an often underestimated bite out of profits. A solid business plan with realistic cost estimates can help put a new business on the path to success. In today’s business climate, lean companies are at a distinct advantage. The failure to negotiate good terms with suppliers and plan for cost overruns can leave a small business uncompetitive.

Another extremely common reason for small business failure is poor accounting practices. Many entrepreneurs are completely unprepared for the time and effort involved in tracking the income and expenses of their business. Invoices need to be sent out in a timely manner and accounts payable and receivable must be tracked meticulously. In addition, state and federal tax authorities require quarterly tax payments. Many entrepreneurs are unskilled accountants, mistakenly believing they can perform these tasks on their down time or on weekends. Such administrative tasks are not only essential for a successful business, they are also extremely time-consuming. New small business owners often become overwhelmed soon after starting business operations, but finances are ultimately the most important part of a new business. Not only does routine accounting have to be taken care of promptly, but the business needs a financial vision as well – a big-picture viewpoint that sheds light on the months and even years ahead. Many entrepreneurs are reluctant to seek professional help, mistakenly believing that they have to do it all themselves.

Another unfortunate reason for small business failure is the lack of a succession plan. What happens to the business if the owner gets sick or incapacitated? Are suitable replacements available for valuable managers, or will people be thrust into positions for which they are not prepared? Without a well-defined succession plan, power struggles and nepotism can quickly doom an otherwise successful business.

Small businesses fold for many reasons, but entrepreneurs who fail with one business actually have substantially increased chances of success on their next try. They learn valuable lessons about the importance of planning and focus and they realize their weaknesses, contracting with experienced professionals for assistance in helping make their business profitable. Successful entrepreneurs know that getting professional help in running a new business greatly increases their chances of survival.

Seek help from a financial advisor to get your business plan in good working order. He or she will be able to provide you with specific details about your business’ situation. With the right advice, you will be able to develop a small business that thrives.

Tuesday, October 2, 2012

Without Health Insurance? Prepare to be Penalized by the IRS

In June, the U.S. Supreme Court upheld the constitutionality of Obamacare’s individual mandate by concluding that imposing a penalty for not purchasing health insurance is a valid exercise of Congress’ power to tax. As of Jan. 1, 2014, all Americans will be required to purchase either a private health plan or health insurance through a state exchange if they are not otherwise exempt or covered by their employer. The requirement does not apply to Americans age 65 and older who are covered by Medicare.

The penalties, which will be administered by the IRS, will be pro-rated based on the number of months during the year that an individual is not covered by health insurance, although there is no penalty if an individual is not covered for less than three months. Insurance companies will send their plan participants and the IRS a form confirming that the minimum essential coverage was held, which taxpayers will be required to attach to their tax forms beginning in 2015.

For the tax year 2014, the penalty for the entire year will be $95 per adult and $47.50 per child, up to a family maximum of $285 or 1 percent of the family’s income, whichever is greater. In 2015, these amounts increase to $325 per adult, $162.50 per child, and a family maximum of $975 or 2 percent of the family’s income. For 2016 and subsequent years, the full penalties will be $695 per adult, $347.50 per child, and a family maximum of $2,085 or 2.5 percent of the family’s income.

The nonpartisan Congressional Budget Office estimates that 4 million people will choose to pay the penalties instead of buying insurance. The belief is that these will mostly be younger Americans without children who believe they are healthy enough to go without coverage.

Certain individuals will be exempt from the insurance requirement. These include undocumented immigrants, individuals who are incarcerated, members of Indian tribes, people who are between jobs and without insurance for up to three months, and people with certain religious objections. In addition, people who calculate that their premiums will be greater than 8 percent of their family income, taking into account certain tax credits which would be gained from the lowest-quality plans in their state’s health exchange, will also be exempt from the insurance requirement and the penalties. Finally, individuals and families whose income is below the threshold required to file a tax return (currently $9,500 for an individual and $19,000 for a family) will not have to pay the penalties if they cannot prove they hold insurance.

The law states that the IRS cannot initiate any criminal prosecutions for failure to comply with the act, and no liens or levies can be placed on taxpayers’ property based solely on the failure to pay the penalty. The IRS intends to send letters to taxpayers notifying them that they owe the penalty, and it will also have the power to withhold future tax refunds. However, it is still unclear whether failure to pay the penalty will result in late payment penalties and interest imposed by the IRS. Regulations issued by the Department of the Treasury sometime in the next year should clear up this uncertainty.

The Affordable Care Act will still face more obstacles to its implementation as efforts to repeal its provisions intensify. But with the Supreme Court upholding the act’s constitutionality, the odds have greatly increased that the individual mandate will be implemented beginning in 2014.