Starting a new company is an intimidating proposition, and a would-be business-owner's principal concern is cost. Though you may be worried about your cash flow, thorough planning and a careful startup process can help keep your projections on target.
Start small
You may envision growing your company into a large-scale operation one day, but at the very beginning, it's smart to keep things small. The good news? Small is cheap.
Cynthia McCahon, founder and CEO of business-plan software company Enloop says business owners should start with a bit of healthy skepticism.
"A prospective business owner should start planning a small business by simply understanding the potential of the business idea," McCahon told Business News Daily. "What this means is not assuming your idea will be successful."
The best approach is to test your idea in a small, inexpensive way that gives you a good indication of whether customers actually need your product and how much they're willing to pay for it, McCahon said. If the test seems successful, then you can start planning your business based on what you learned.
Estimating your costs
While every type of business has its own unique financing needs, there are some rules of thumb that can help you figure out how much cash you'll require. Entrepreneur Drew Gerber, who started a technology company, a publicity firm and a financial planning company, estimates that an entrepreneur will need six months' worth of fixed costs on-hand at startup.
"Have a plan to cover your expenses in the first month," Gerber said. "Identify your customers before you open the door so you can have a way to start covering those expenses."
When planning your costs, don't low-ball the expenses, and remember that they can rise as the business grows, Gerber said. It's easy to overlook costs when you're thinking about the big picture, but you shouldn't guess at your fixed expenses.
McCahon added that underestimating costs can decimate your company.
"One of the main reasons most small businesses fail is that they simply run out of cash," McCahon said. "Writing a business plan without basing your forecasts on reality often leads to an unfortunate, and often unnecessary, business failure. Without the benefit of experience or actual historical financials, it's easy to overestimate a new company's revenue and underestimate costs."
Projecting cash flow
Another important aspect of startup financial planning is projecting your cash flow, so that you don't go into the negatives early on. Bill Brigham, director at the New York State Small Business Development Center in Albany, New York, advised figuring out cash flows for at least the first three months of your business's life. Brigham said to add up not only fixed costs, but also the estimated costs of goods and best- and worst-case revenues.
If you borrow money, make sure you know not only how much you borrowed but also the interest you owe, Brigham said. Calculating these costs puts a floor on the revenues needed to keep the business viable and provides a good picture of the cash necessary to start.
Gerber recommended starting up without borrowing at all, if possible. Borrowing puts a lot of pressure on any business, and its owners, as it leaves less room for error, he said.
Taking the next step
Once you've determined your costs and cash-flow projections, you'll need to consider how to pursue financing. How you obtain funds will impact the future of your business for years to come. Personal savings, loans from family and friends, bank loans, and government loans and grants are only a few of the many types of potential funding sources. Many companies are financed using a combination of sources.
One place to go for help is SCORE (www.score.org), which advises small business owners. Formerly the Service Corps of Retired Executives, this volunteer organization partners with the Small Business Administration and offers training and workshops for people who want to be entrepreneurs. Most importantly, SCORE offers counseling from people who have been in the business you might want to be in, and who know the specific issues that you're likely to encounter.
More information and calculators
• Enloop provides free and low-cost business plan services.
• SCORE offers assistance with business plans and projections.
• Business startup cost calculator
• Estimating startup costs from Bplans
• Entrepreneur.com startup cost calculator
• Wall Street Journal startup cost calculator
Additional reporting by Jesse Emspak, Business News Daily contributor.
A mentor can be one of the greatest resources for people looking to advance their careers. A mentorship usually involves identifying a more experienced professional in your company or industry and asking that person to impart wisdom that will help you navigate your own career.
A "student-teacher" dynamic is the most common type of mentoring relationship, and it's an incredibly helpful one. Learning from the experiences and mistakes of someone who has been there before can provide you with insights you might never have gained on your own. However, an alternative model — one that could be even more beneficial — is peer mentoring, in which the mentor and mentee roles are less rigidly defined.
"In a peer-mentoring relationship, each person involved can be both teacher and student, and both parties are empowered to shape their learning context," said Virginia Fraser, U.S. marketing manager at Insights Learning & Development. "Professionals receive the support they need from a peer, while getting the perspective from a mentor."
While your peer mentor doesn't necessarily have to be at your exact job level, there is a distinct advantage to mentoring and being mentored by a person who has roughly the same amount of experience you have, said Sarah Callaghan, U.K. marketing manager at Insights.
"You face similar challenges in terms of the work at hand, office politics and ... reporting lines," Callaghan told Business News Daily. "Your peer mentor truly understands your strains and obstacles, and can help you face them in a positive and productive way."
Fraser said that peer mentorships develop organically from trust-based professional workplace relationships. This trust creates an open environment where colleagues feel comfortable offering feedback to one another about behavior, attitude or performance. In turn, recipients of this feedback are more likely to be open to their peers' advice because they know the other person genuinely wants to see them succeed. When this occurs, Fraser noted that teams can establish a system of interpersonal checks and balances that isn't dependent on the group leader.
If you want to start benefiting from a peer mentorship, the first step is to find the right teammate. When you're looking for a peer mentor, consider someone who has a shared work experience but can offer a unique perspective on the everyday and long-term challenges you face, Fraser recommended.
"Often, it's helpful to find someone who has a very distinctive background and view ... to offer an increased level of exposure to diversity of thought," Fraser said.
Another quality to look for in a peer mentor is honesty. You and your mentor should both trust each other and feel comfortable being candid, Callaghan said. It's also important that both of you have similar career goals.
"Peer mentorship needs to have a foundation of trust, respect and similar objectives," Callaghan said. "Use those commonalities as a way to introduce the concept of peer mentorship as a mutually beneficial activity."
Once you've established a peer-mentoring relationship with someone, follow these basic guidelines offered by Fraser and Callaghan to help both of you make the most of the mentorship:
Form a mutual commitment to both giving and receiving feedback.
Establish a mutual respect of each other's expertise and experience.
Start a frequency of communication and preferred way to communicate.
Look for opportunities for dialogue as they arise — any conversation can be an opportunity to mentor each other.
Create ground rules regarding confidentiality and any off-limits topics.
Managers can work to create an environment that encourages peer mentorships by setting a positive example for their employees.
"Managers who build their team's foundation on authenticity and trust will enable mentorships between peers and teammates to form naturally," Fraser said. "When colleagues trust one another, they feel comfortable to be authentic about their strengths, weaknesses, successes and challenges."
The ZTE Grand X Max Plus sports a huge 6-inch screen that gives you lots of room to work.
ZTE's Grand X Max Plus is a solid business phablet at an affordable price. The mammoth, 6-inch (15 centimeters) smartphone offers a bright, colorful display, long battery life and good performance for just $199 off-contract, via lesser-known carrier Cricket Wireless. If that sounds like a lot to pay for a budget phone, consider that buying a smartphone outright — instead of opting for a subsidized phone with a pricey two-year contract attached — can save you a lot of money in the long run. That's because Cricket Wireless offers cheaper monthly data plans than carriers like Verizon or AT&T.
So what do you get for your money? Here are three features that help make the ZTE Grand X Max Plus good for work.
Big display
Is a 6-inch smartphone too big? Not if you want a lot of screen space for work. The appropriately named Grand X Max Plus provides plenty of real estate for screen-intensive productivity tasks like viewing documents and editing spreadsheets on the go. Its 720p screen (720 x 1,280 pixels) isn't as sharp as the displays on flagship phablets like the Nexus 6 or Galaxy Note 4, though. And while many other phablets include multi-window software programs that let you run two apps side by side, the Grand X Max Plus lacks that feature. Still, ZTE's phone provides a huge display for a lot less money than most competitors.
Long battery life
The Grand X Max Plus will have no trouble lasting through the end of the workday and beyond. The phone ran for an impressive 9 hours and 14 minutes on our battery test, which involves continuous Web browsing via 4G LTE. That's a lot longer than the smartphone average of 7 hours and 47 minutes. The Grand X Max Plus also outlasted the Nexus 6 (7:05), but the iPhone 6 Plus lasted longer (10 hours).
Value
ZTE's Grand X Max Plus has some shortcomings, like a mediocre camera — something to consider if you want to use the phone for video chatting with colleagues or clients. Plus, it's not as fast as flagship phablets, and its screen isn't as sharp. But its low price point ($199) makes this phone worth a look anyway. In comparison, the Galaxy Note 4 costs up to $700 off-contract, and the Nexus 6 costs $650. Those prices make the Grand X Max Plus an enticing option for business users on a budget.
Following the most wonderful time of the year is a season that strikes fear in the hearts of many small business owners: tax time.
Shelling out a substantial percentage of the year's income is stressful enough, but tax season also brings with it a great deal of complexity and confusion. Tax laws are constantly changing and being revised, and it can be difficult for small business owners to keep up. And what adds even more stress to tax filing is that even innocent mistakes or oversights can lead to big penalties.
In preparation for the April 15 tax deadline, Business News Daily consulted small business tax experts to find out what business owners should be paying attention to now. Some of these issues involve recent tax changes, while others are issues small businesses should be watching for the future.
Tax extenders
Two important tax breaks for small business have been extended. They are Section 179 and bonus depreciation. Section 179 allows businesses to deduct the full price of any qualifying equipment or software purchased or leased during the year. The tax-extension bill continues the $500,000 maximum deduction for new and used equipment that was purchased in 2014. Bonus depreciation allows business owners to depreciate 50 percent of the cost of new equipment purchased in 2014. The two tax incentives can be used together.
Although the act's passage was a relief for business owners who purchased equipment in 2014, many others had to scramble to make equipment purchases in the final two weeks of the year or missed out on purchases while waiting for Congress, said Miguel Farra, chairman of the tax and accounting department at public accounting firm Morrison, Brown, Argiz & Farra LLC.
"These are great tax incentives," Farra said. "If everyone knew about them during the course of the year, they could have acted."
Also, because the incentives were extended only through the end of 2014, small business owners have no way to know whether these purchases will apply to business purchases made in 2015 until much later this year, said Dennis Brager, of Los Angeles-based Brager Tax Law Group, which specializes in helping companies that are in tax trouble.
Brager advised business clients to buy the equipment they need this year without waiting to find out if the tax breaks will be extended again.
"I always tell my clients to make sure the tax tail isn't wagging the dog," he said. "It's great to save on taxes, but you shouldn't be making decisions based solely on taxes. If you need new equipment, then spend the money. And if the tax savings come along, that's a bonus."
Other notable tax breaks that were extended include the research credit, energy production tax credits, and a deduction for local and state sales tax.
The Affordable Care Act
The Affordable Care Act (ACA) added an estimated 2,400 pages to the U.S. tax code, further complicating the tax landscape for businesses of all sizes. The most notable issue for many businesses is that they could face tax penalties for failing to provide health insurance to employees or for failing to report to the IRS what type of coverage they have provided for employees.
As of Jan. 1, 2015, businesses with 100 or more employees must provide health insurance to 70 percent or more of their full-time equivalent employees, or they'll face a tax penalty of up to $2,000 per employee, said Janemarie Mulvey, former chief economist for the U.S. Small Business Administration's Office of Advocacy. Mulvey, who has published a reference guide for small businesses called "Health Reform: What Small Businesses Need to Know Now!" said that beginning Jan. 1, 2016, businesses with 59 to 99 employees will be required to offer health insurance.
Businesses should also understand the reporting requirements that come along with ACA, Mulvey said. ACA requires employers to report the cost of the health coverage they provided on each employee's W-2 form. A breakdown of what the employer and the employee each paid is required in Box 12 of the form. Failing to report this information could lead to fines of $200 per employee, Mulvey said. Even though the deadline for reporting those figures is not until Feb. 28, 2016, she said, employers should start keeping track of health coverage costs now.
"Because the IRS is now the gatekeeper for insurance coverage, they are going to start collecting info from employers about what kind of insurance they provided," she said. "It's going to be a big regulatory nightmare."
Farra agreed that the ACA insurance and reporting requirements could be burdensome to small businesses. He recommended consulting an accountant or insurance expert now to make sure the coverage you provide meets the minimal essential coverage. In many cases, he said, a skilled insurance agent can also help businesses determine whether it is a better financial decision to provide insurance to employees or just pay the tax penalty.
The New Republican Congress
Republicans now control both the Senate and the House, and that could have an impact on tax reform in 2015, said Zach Olson, founder and CEO of Tax Alli, which provides tax accounting software and services for small businesses. Sen. Orrin Hatch, the new chairman of the Senate Finance Committee, recently released a lengthy report related to tax reform and has said he believes there is "real momentum" for the U.S. tax code to be overhauled this year. If Congress does take up tax reform in 2015, Olson said, almost everything will be on the table. Small business owners should follow news on this closely to find out how that reform might impact their tax burden, he said.
Taxation of online sales
The Marketplace Fairness Act stalled in the 2014 session of Congress, but it is expected to be addressed again in 2015, Olson said. The legislation attempts to level the playing field between online merchants and brick-and-mortar stores by allowing states to require online sellers that gross more than $1 million per year to collect and pay the state sales tax. Not surprisingly, the move is supported by brick-and-mortar stores but faces major opposition from online retailers.
Tax Tips for Small Businesses
Just because tax law can be complicated doesn't mean you have to let yourself get overwhelmed. Here are some tips on how to manage your taxes year-round.
Think about taxes all year long. Small business owners should not treat taxes as a once-a-year event, Olson said. Rather, tax planning should be a year-round activity. Waiting until the last minute makes tax preparation more complicated, and it limits your money-saving options.
Hire a pro. A knowledgeable tax attorney or accountant is well worth the expense, experts say. Tax laws are complex, and they're difficult for many busy small business owners to weed through. A professional can identify tax breaks and deductions you might otherwise miss.
Be aware. Even with the help of a skilled professional, it is the job of a small business owner to keep up with news related to laws. Read the business papers and keep up with Congress' work on tax laws, said Brager, who is also a former IRS trial attorney.
Don't make assumptions. Tax planning, to some extent, is a gamble, Farra said. Although historically, Congress has always passed the tax-extender bill at the last minute, there are no guarantees. Never make business decisions assuming that tax breaks will pass.
Links and Resources
For additional help with your small business taxes, here are some resources:
The U.S. Small Business Administration is hosting a free webinar to help small businesses understand the Affordable Care Act this Thursday, Jan. 29. Click here for information on how to participate.
The IRS website has more information about how the ACA affects small business owners' taxes here.
This Tax Foundation blog offers a complete list of all tax breaks extended by Congress in December 2014.
Measuring the success of your social media ads can be tricky, but Facebook is working on ways to help advertisers better understand the impact of their campaigns.
Facebook recently announced that the company is expanding its conversion lift measurement capabilities as a way to help advertisers determine exactly how ads on the social network impact their bottom line. This expansion will build on Facebook's existing measurement offerings.
Not familiar with conversion lift? It's a measurement that "accurately captures the impact that Facebook ads have in driving business for marketers," the company wrote on its business blog. It works in four steps:
When an advertiser creates a new Facebook campaign, a randomized control and test group are established. The control group are users who don't see ads from the campaign, and the test group are those that do.
Conversion data from this campaign is then shared with Facebook.
From there, Facebook compares conversions in the test and control groups to determine the additional lift generated by the campaign.
Results are then made available to advertisers in the Ads Manager tool.
But why is conversion lift so important? According to Facebook for Business, it "addresses several of the measurement challenges currently facing marketers." These challenges include having an over-reliance on clicks, ineffective testing methods, and the rapid shift to mobile.
These challenges can have a huge impact on the way advertisers measure the success of their campaigns. For example, simply counting clicks doesn't take into account the value of a user seeing an ad, but not clicking through. Additionally, current measurement systems aren't as compatible with mobile devices.
"The technology that supports current measurement systems is not sufficient in a world where people use multiple devices throughout the day and the majority of purchases still happen in a physical store," Facebook explained.
Advertisers who want to see the full impact of their campaigns can now work directly with Facebook teams and their account representative to set up conversion lift studies to see the results.
Facebook noted that while it already offers lift measurement solutions through its own tools and third-party partnerships, this expansion is a way to make lift measurement more available to a wider portion of the company's clients around the world.
"In time, we will look to expand our conversion lift offerings to cover more use-cases and more complex studies," Facebook wrote.
Smartphones aren't the only mobile devices that are getting bigger. Ahead of Apple's rumored giant, 12.9-inch iPad, HP recently unveiled its own behemoth: the HP Pro Slate 12, a giant, Android-powered tablet built for business users.
The HP Pro Slate 12 offers a massive screen, long battery life and enterprise-class computing to help take your business to the next level. It's also compatible with the new HP Duet Pen, helping business users be more productive than ever.
Here's what the HP Pro Slate 12 has to offer and why it makes a great business tablet.
Design and display
Sporting a giant, 12.3-inch, 1600 x 1200-pixel display with a 4:3 aspect ratio, the HP Pro Slate 12 provides plenty of screen real estate, so business users can get more done. The massive display provides laptop-size viewing on a tablet, which is great for accessing documents, working on business applications, surfing the Web and videoconferencing.
Despite its oversize display, the Pro Slate 12 maintains an ultraslim body, at just 8 mm (0.31 inches) thin. For comparison, this is just half a millimeter thicker than the iPad Air. The Pro Slate 12 weighs almost twice as much as the iPad Air, however, at a hefty 1.9 lbs.
HP Duet Pen
In addition to its enormous screen, one of the Pro Slate 12's biggest highlights is that it is fully compatible with the new HP Duet Pen. This digital pen takes productivity up a notch by digitizing handwriting on both the tablet and on paper.
The HP Duet Pen works by using a stylus on one end and an ink pen on the other. Combined with the Slate's technology, it can transform notes, sketches and more into digital content, whether you're using the stylus on the tablet or the traditional ink pen on paper.
The pen also integrates with the Evernote app, making it fast and easy to save your content on the Pro Slate 12 and the Evernote cloud.
Power and performance
The HP Pro Slate 12 can keep up with all your business needs. It boasts a battery life of up to 12 hours, and is powered by the Qualcomm Snapdragon 800 series processor and 2GB of RAM. It also comes with 32GB of storage, a microSD slot and a micro USB 2.0 port.
Cost and availability
The HP Pro Slate 12 will start at $570 when it becomes available; however, HP hasn't announced a release date yet. People looking for a smaller, cheaper version of the Pro Slate 12 can also take a look at the $379 Pro Slate 8, which features an 8-inch screen and is also compatible with the HP Duet Pen.
Running a business demands a lot of the owner's time and energy. To maintain a healthy, balanced life (and your sanity), it's important for you to make room on the schedule for your personal responsibilities and activities, but doing so is especially difficult for entrepreneurs who work out of a home-based office.
With no physical boundaries between work and play, it can feel like one half is constantly encroaching on the other. Baskets of laundry, kids' toys and workout equipment coexist with a desk full of business-related items. Phone calls from clients and vendors interrupt you when you're preparing lunch, and the dog always seems to bark when you're in an important video conference. Even if you're highly organized, it can still be difficult to successfully run a business and a household in the same space.
While it may not be possible for home-based business owners to fully separate the personal from the professional, there are ways to better integrate the different facets of your life. Four entrepreneurs shared a few secrets for improving work-life balance when you work at home.
Get dressed.When you work in an office, part of your normal routine includes changing out of your pajamas and into work-appropriate attire. In an effort to get a jump on the day, some home-based entrepreneurs skip this step and stay in their PJs or sweatpants while they work. But just because you can dress however you want, doesn't mean you should.
"Get dressed every day," said Sara Davidson, founder of online female entrepreneur school Hello Fearless. "Treat [your home] like a real work environment. It makes a huge difference when you feel like [it is]. It changes the culture."
"I'm not suggesting to put a suit on to work from home, [but] make a conscious effort to say, 'This is work, and I need to act and dress accordingly," added Justin Esgar, entrepreneur and author of Appitalize On Your Idea (CreateSpace Independent Publishing Platform, 2014).
Create (and maintain) a designated work space. Much like putting on a proper outfit, committing to only doing work in a defined space, like an office or other sectioned-off area of your home, can help to create a more productive work environment.
"It's critical to commute out of the bedroom to a dedicated workspace that separates work from personal space," said Bob Higgins, co-founder of board game Linknotize. "Once you've commuted to your work space, treat your day as if you've actually left the house. In addition to having a dedicated work area, it is also really important to keep at least one space in the house as a business-free zone."
Leave the house. Another obstacle to work-life balance for home-based entrepreneurs is the feeling of being "trapped" in your home. If you don't have any urgent errands to run, you could find yourself cooped up at home for several days at a time. Davidson encouraged these entrepreneurs to purposely schedule meetings and work time in places that aren't your house, such as a coffee shop, to give you an excuse to get outside and change your scenery.
Christopher Conner, president of Franchise Marketing Systems, noted that entrepreneurs who work at home should make time for personal activities outside the house, whether it's visiting a local museum or taking a short vacation.
"When you are doing something personal that makes you happy, that's when you get the inspiration and drive to start something new in business," Conner said.
Susan Berkowitz, Higgins' wife and Linknotize co-founder, agreed that personal activities should be a integral part of your regular schedule.
"We really find we need to take time away from our business and schedule time to do other things we also enjoy," Berkowitz said. "As an entrepreneur, it's simply too easy to be consumed by the business because success is completely related to commitment. One good tip is to buy tickets that can't be readily changed. This forces you to take a break."
Block out your time to focus on a specific task. Entrepreneurial parents often find it particularly challenging to balance family time and business time. Giving your full attention to a specific task, regardless of which side it falls on, can be tough with all the distractions that pop up throughout the day.
"I want to give so much to my family and I also want to give so much to my [business]," saidMelissa Holland, president and founder of maternity bra line BeliBea. "It can be challenging to divide time between those two loves, especially when working from home."
Holland said that the most helpful way to accomplish this is to set aside specific times on your schedule for personal and professional to-do's.
"Dedicating time to one area helps me stay focused during those moments and ensure I'm giving my all to the task at hand," Holland told Business News Daily. "It's also been extremely helpful for me to find tools to make everyday tasks in life a little easier. I do this with everything from housework to keeping my business organized."
Learn to "turn off" your business. Entrepreneur or not, many professionals struggle with the dilemma of constant connectivity: Mobile devices allow you to check in on work issues 24/7, but if you make a habit of it, others will expect you to be available all the time. As a home-based entrepreneur, one of the biggest challenges you'll face is knowing when to disconnect from your business.
"As an entrepreneur, I never want to miss an opportunity, so I'm always on my phone," Esgar said. "Maybe there's a tweet I should look for, or an article to read. It's hard to turn it off, and I find myself fighting with myself to do so. I have to consciously say to myself, 'Stop working.'"
It's almost impossible to completely shut off "work mode" when you're in charge of a business, but it's not healthy to work all the time. Conner advised creating a separate email address for after-hours issues that may arise, and tell your employees and professional contacts to only use this address for emergency situations. To put your mind at ease about missing anything urgent, check it just once after you decide to stop working for the day, Conner said.
Have a strong support system. When you're running a business out of your house, it's crucial that the people who live with you are supportive of your entrepreneurial endeavors. Whether it's a significant other/spouse, a relative or your children, everyone in your household needs to be on board. Davidson said setting expectations and boundaries for "work time" will help keep your relationships solid and minimize any resentment or misunderstandings.
Davidson also noted that hiring the right team will give you the right mindset and energy to be productive while you're on the clock.
"Hire amazing people who not only do incredible work, but are relentlessly passionate about the business you're building," Davidson said. "It's important to surround yourself with people who align with who you are."
A marketing plan may not be at the top of every new business owner's to-do list, but it should be. While a business plan helps map the direction for your company, a marketing plan helps your company understand how to get there by detailing important steps on the road to creating customer relationships.
"The single most important thing for a small business to include in its marketing plan is a very clear understanding of its customers and its competitors," said Robert Thomas, professor of marketing at the McDonough School of Business at Georgetown University.
Though a marketing plan can be formal or informal, at a minimum it describes who your customers are, where they get information, and how you are going to reach them. Thomas said the development of a marketing plan requires four specific tasks:
Develop a very clear and focused insight into why a potential customer would use your business. More specifically, what is the core need that your product or service will meet? Is it to help your customers get through the day more easily? Do their job more efficiently? Be respected and admired by friends? Your offering should be designed to meet customer needs better than the competition.
Identify your target customers. There are numerous potential customers in most markets, but to succeed faster and better, a small business must study the market to determine the characteristics of its best target customers. The target customer should be described in detail. In doing so, a business also develops a clearer picture of the expected sales revenues and financials.
Identify competitors that would also want your target customers. There is always a competitor — never make the mistake of assuming there isn't. Small businesses seldom take the time to study their competitors in depth. But you must understand who your competitors are, what their core competitive advantage is and how they will respond to your offering (price cuts, increased communication, etc.).
Write down your brand-positioning statement for your target customers. Ultimately, your brand and what it symbolizes for customers will be your strongest competitive advantage. You should be able to write down a simple declarative sentence of how you will meet customer needs and beat the competition. The best positioning statements are those that are single-minded and focus on target customer needs.
While these steps are a good starting point, companies also need to incorporate multiple channels into their marketing plans. Some of the most popular channels for today's businesses include:
Social media marketing
Social media has become an essential part of businesses' marketing plans. Businesses that have yet to realize the opportunities that Facebook, Twitter, Google+, LinkedIn and other networks provide them are missing out. Even though the concept of social media marketing may overwhelm certain small business owners, the process does not need to be a challenge, as more services and companies are popping up more and more frequently.
Brett Farmiloe, founder of Internet marketing company Markitors, advised companies that are just getting started in social media to get to know their customers.
"Figure out where your customers are spending their time and set up shop on those platforms," Farmiloe told Business News Daily. "Develop a content strategy that can be executed internally, [and then] execute your strategy by posting branded content on your selected platforms. While all three steps are key, the biggest one is really determining if your customers are on these platforms."
Email marketing
Though email marketing may not be as new of a concept as social media marketing, it is an effective and popular choice for many small business owners. Companies can implement email-marketing techniques in a number of ways, including newsletters, promotional campaigns and transactional emails. Companies such as MailChimp and Constant Contact make it easy for companies to manage their email campaigns.
Farmiloe noted that companies can set their email marketing efforts apart by segmenting their market.
"Not all subscribers want to receive the same blast," Farmiloe said. "Smart email marketers take the time to segment subscribers at the outset, and then continue to segment based on subscriber activity. Through segmentation, companies reduce the amount of unsubscribes, increase open rates, and most importantly, increase the amount of actions taken from an email send."
Mobile marketing
The popularity of smartphones and tablets has helped to change the way companies target their customers. As a result, companies are looking to implement strategies that reach customers on their devices.
Mobile marketing should not be considered a mere extension of email or online marketing, however. Since many consumers have a mobile device with them at all times, texts and push notifications will almost certainly be seen by the recipient.
"Mobile marketing is interruptive," Farmiloe said. "It's because of this power that a marketer has to let the consumer determine how and when to receive marketing material. That's why almost every app comes with the option to turn notifications on or off. The consumer has to hold the power with mobile marketing."
To optimize your mobile marketing presence, carefully consider how and when you reach your mobile customers. Be sensitive to when and why they use their phones, and offer them information that is pertinent to their situation.
Next steps
Once strategies have been identified for each channel, you need to figure out your strategy. How much are you willing to spend in each channel? What outcomes do you expect to see? What tasks do you need to accomplish for each step in your process? Creating a well-defined list of budgets, goals and action items, with appropriate personnel assigned to each, can help make your marketing plan a reality.
It is also important to decide in advance how you will measure success. Are you hoping to see increased sales or traffic, or new client contacts? Set six-month milestones for each channel, and compare the results against prior efforts and your expectations. If a channel is underperforming, examine the consequences for both abandoning it and for adding more resources. If your efforts have fallen flat as the result of a failure to understand the medium's audience, go back to basics. Asking your customers to complete an email survey about their social media habits in exchange for a coupon or discount may help you learn surprising relationships between customer demographics and your marketing efforts.
More Information
More information and templates for your marketing plan can be found at the following links:
• Creating a Marketing Plan - Entrepreneur.com
• Developing a Marketing Plan - U.S. Small Business Administration
• Marketing Plan Template - WikiHow
• Creating a Small Business Marketing Plan - About.com
Companies trying to figure out the reasons behind their high employee turnover rate should do more than just focus on the relationship between the employees and their bosses. They should also investigate the relationship between those bosses and their supervisors, new research suggests.
Keeping middle managers happy with their bosses is the key to retaining lower-level workers, according to a study recently published in the Career Development International journal.
Ray Friedman, one of the study's authors and a Vanderbilt University professor, said middle managers’ treatment of employees reflects how their bosses treat them.
"If an organization wishes to address issues related to line employees’ work attitudes, it should address behavior and work attitudes from the top down." Friedman said in a statement. "The focus should not just be on employees and their managers, but also on the signals being sent by senior managers every day as they interact with their middle-level manager subordinates.
The researchers found that middle managers' satisfaction with their senior managers related positively to line employees’ satisfaction with middle managers, and when middle managers don't have good working relationships with their bosses, the effects are felt down the line.
This often leads to lower-level employees quitting, which can have a negative effect on the company. Previous research has discovered that high employee turnover lowers customer satisfaction.
"Despite the lack of direct contact between senior managers and line employees, senior managers can have a significant influence on those line employees," Friedman said.
The way female middle managers treat their staff is particularly influenced by how their boss treats them, the research found.
"While the trickle-down effect is general, there may be subgroups especially influenced by the trickle-down dynamic and we have identified women middle managers as a group that is especially affected by the trickle-down effect," Friedman said.
While the research was based on the study of 1,527 full-time employees at 94 hotels in the United States and Canada, the study's authors believe that the results will apply to all industries.
The study was co-authored by Ying Chen, an assistant professor at the University of Illinois at Urbana-Champaign, and Tony Simons, an associate professor at Cornell University.
After conducting extensive research and analysis of shopping cart plugins, we recommend as the best shopping cart plugin for WordPress websites and blogs.
Ready to choose an e-commerce software? Here's a breakdown of our complete coverage:
E-Commerce Software Buyer's Guide
Roundup: The Best E-Commerce Software
REVIEW: Best E-Commerce Software for Small Business
REVIEW: Best Enterprise E-Commerce Software
REVIEW: Best Digital Download E-Commerce Software
Want to start an e-commerce business? With the right tools, anyone can launch an online store. One option is to use a full-featured e-commerce software solution to build your website and set up your storefront. But for those who have limited resources and want to get their online business off the ground as soon as possible, a better option is a shopping cart plugin.
Shopping cart plugins let you set up an online storefront on an existing website without all the fuss and costs of e-commerce software. The best shopping cart plugin goes beyond providing you with an online storefront and payment processor, though; it should also offer many of the same basic and advanced features as e-commerce software, such as task automation, order fulfillment, back-end operations, third-party integration, marketing tools, reporting and more. And this is where WooCommerce can help.
Designed specifically for WordPress, the WooCommerce shopping cart plugin can help you launch a self-hosted, WordPress-based online store in no time. Read on to find out what makes WooCommerce the best shopping cart plugin for WordPress-powered websites and blogs.
Why WooCommerce?
A free, full-featured shopping cart plugin for WordPress websites
Whether you want to start selling products on your existing WordPress website (or blog) or wish to launch a stand-alone online store, WooCommerce can help. This free WordPress shopping cart plugin has everything you need to get your e-commerce business up and running quickly and easily, and is fully supported by the WooCommerce team and community of users and business owners. It's also completely customizable with different themes, extensions and plugins, offering numerous capabilities and options. With WooCommerce, you have an affordable, well-supported solution that lets you create an online store that looks, feels and works exactly the way you want it to.
Best price
The best part about WooCommerce is that it offers vast capabilities — without breaking the bank. Of the WordPress shopping cart plugins we reviewed, WooCommerce offers the most features at the best price.
First, WooCommerce is completely free to download and install, and there are no monthly fees as on other shopping cart solutions.
WooCommerce-powered online stores are also highly customizable in look, feel and function, at no additional cost. This is because it's already packed with features to help you launch and run your online store, and you can add a ton more using website themes and extensions from the WooCommerce website. And because WooCommerce is completely compatible with WordPress, you have even more customization options using themes and extensions from WordPress and third-party developers.
Most WooCommerce website themes and extensions are free, but there are also paid versions that offer more advanced capabilities. Website themes can run anywhere from $79 to $139, depending on the features you want to purchase. Pricing for paid extensions vary, but the small business owners we talked to said that with the massive collection of extensions available, you'll likely be able to find what you need for free.
Another contributing factor to WooCommerce's affordability is that you don't need a merchant account, saving you money from your bank's fees. It directly integrates with PayPal, so you can just use your PayPal account to process and receive payments, and then transfer the funds for free to your bank account.
E-commerce features
WooCommerce has everything small businesses need to turn their WordPress website or blog into a successful online store. Used by millions of brands of all sizes, it offers both basic and advanced features to help you launch, manage and grow your e-commerce business.
Storefront. Build a storefront as part of your existing website or blog, or launch a stand-alone online store. WooCommerce also integrates easily with the free WordPress Storefront theme, so you can create an entire online store in minutes.
Payment processing. Use PayPal to process payments and avoid the hassle and fees of setting up a merchant account with your bank. Or, choose from WooCommerce's wide range of payment gateways to accept credit cards, cryptocurrencies (such as Bitcoin and Litecoin), and even Cash on Delivery (COD). If you offer subscription services, WooCommerce can also handle recurring and auto payments so you don't have to waste time manually processing them yourself. You also don't need to worry about calculating taxes — WooCommerce lets you set tax classes and local tax rates to automatically populate for each customer.
Back-end operations. Perform back-office tasks straight from the WooCommerce dashboard. For example, get a handle on order fulfillment using a wide range of shipping carriers, services and add-ons to make logistics work for your business. WooCommerce also offers inventory management tools and the ability to assign specific team members to certain tasks.
Marketing. Boost sales and grow your business. WooCommerce lets you run several types of promotions, such as discount options, coupon campaigns and free shipping offers. Advanced options include the ability to limit the number of products that customers can purchase at discounted prices, and restrict promotions to select customers.
Reporting. Measure your online store's success. Generate all types of reports, such as incoming sales, stock levels, product reviews, overall store performance and more.
Other benefits
The best shopping cart software lets you build an online store that works for your business and best represents your brand — and this is where WooCommerce shines. The biggest benefit of using WooCommerce is that it offers nearly endless customization options to make your WordPress-powered online store look, feel and function exactly the way you want it to.
Just like the entire premise of the WordPress platform, WooCommerce lets you build a tailor-made online store in two ways: using themes and extensions.
Themes. Choose from WooCommerce's vast collection of e-commerce themes and hundreds more offered by WordPress and third-party developers. Personalize them by adding your own logo, headers and other branding.
You can further customize these themes via built-in options. For instance, use drop-down menus and color pickers to change colors, and one-click buttons to change layouts and navigation. You can also add widgets and, if you're a little more tech-savvy, shortcodes and HTML/CSS.
Extensions. From payment processing to order fulfillment, accounting, analytics and many others, WooCommerce's massive library of free and paid extensions lets you integrate different business apps and functions that work best with your business.
Compared to other shopping cart plugins that force you to use their own services or limit your back-end choices, WooCommerce lets you better streamline your operations in a way that works for you, while giving you more control over how you run your online store and business. Popular extensions include UPS and FedEx for shipping; PayPal, Amazon and 2Checkout payment processing; Xero and FreshBooks accounting software; and Zapier automation.
To give you even more options, WooCommerce works seamlessly with extensions and widgets offered by WordPress and third-party developers. These extensions give you a wide range of customization options, such as personalized deliveries, PDF invoices and packing slips, custom product and order numbers, Google Analytics integration, the ability to incorporate affiliate programs into the platform and more.
Customer support
Need help using WooCommerce? From installation to setup, Web design, extensions, plugins and more, WooCommerce offers a plethora of resources to help you resolve any issue.
To start, if you need one-on-one help, WooCommerce's help desk can connect you with customer or tech support. Simply submit a help ticket with your issue and contact information, and a representative will get back to you. When you submit a ticket, the system will require you to choose a category to ensure your ticket reaches the right place.
If you prefer to troubleshoot issues yourself, there are many ways to find the help you need:
FAQs. The FAQ section has answers to the most common questions users have about WooCommerce and the WordPress platform. It covers general questions, presale and account questions, licensing, extensions, plugins and more. For more in-depth answers, check out the Knowledgebase.
Knowledgebase. Visit the Knowledgebase and find hundreds of articles and tutorials on how to install and manage WooCommerce, troubleshoot issues, customize extensions, use the iOS app and more.
Community. Ask fellow WooCommerce users in the Community section for help, or search through existing posts for similar issues.
Documentation. Search WooThemes Documentation to find reference materials, tutorials and other documentation for everything about WooCommerce. This includes WooCommerce extensions, WooCommerce themes, storefront extensions, WordPress plugins and coding references. It also features a Getting Started guide (which covers installation; settings and options; adding and selling products; shipping; order management; and sales reports); API documents for developers; presales questions; and a troubleshooting section for common issues.
Videos. Don't feel like reading? Check out the videos section for video tutorials on all things WordPress, such as how to install plugins like WooCommerce, settings and configurations, and how to design your online store, add widgets, use the dashboard and more.
To further help you troubleshoot problems, WooCommerce has published this help guide, which features step-by-step instructions on how you can efficiently find solutions before contacting the company's help desk. You can also use this page to ask questions and quickly solve problems.
Limitations
The biggest limitation to using WooCommerce as a shopping cart solution for your WordPress-powered website is that it is simply a plugin. This means it only powers the e-commerce part of your website, so you'll still need to set up everything else.
Unlike full-featured e-commerce software, WooCommerce doesn't provide the infrastructure for your online store. You'll still need to find your own Web host, purchase a domain name and set up your WordPress account and website. The upside to this is that you have complete control over where you host your website and from which registrar you purchase your domain name. The downside is that this requires you to consider additional costs and time it will take before you actually get your online store up and running.
Another limitation of WooCommerce is that there may be a learning curve for some merchants. For instance, the platform doesn't have a drag-and-drop website builder, so you'll have to learn and rely on whatever options your theme and extensions offer to change your store's look and feel. (If you're already familiar with the WordPress platform, however, WooCommerce will be very easy for you to use, as it works the same exact way as WordPress does.)
Alternatively, you can hire a WordPress or WooCommerce programmer to do all of the tweaking for you. Again, that requires additional costs. For reference, small business owners we talked to who outsourced their website said that it cost them anywhere from $97 to $200 to set up their WooCommerce online store.
Furthermore, WooCommerce is obviously tied to WordPress. It's a great option for those who are just starting out or already have a WordPress site. But if you find that you no longer want to use WordPress for your store, or that your operation is outgrowing WordPress' capabilities, you'll have to deal with the hassle of switching to a different platform. This will require an considerable investment of time and money than if you had started with a full-featured e-commerce software on a non-WordPress website instead.
We chose Shopify from a pool of the dozens of payroll services we considered. To read our full methodology and for a more comprehensive list of payroll services, visit our best picks page here.
Performance reviews allow you to praise employees, correct what they're doing wrong and discuss their growth and future at the company. Credit: Shutterstock
As a manager, you need to give your employees constructive feedback to make sure the business is operating at its peak. Annual or semiannual performance reviews give you the opportunity to praise employees for what they've done well, correct what they're doing wrong, and discuss your vision for their growth and future at the company.
"The ideal outcome for a performance appraisal is for managers and employees to have meaningful, reflective conversations together," said Julie Rieken, vice president of marketing and customer experience at evaluation software company Trakstar. "It's a chance to document the year's accomplishments, journal about accomplishments, understand expectations and celebrate progress."
While face-to-face conversations and regular informal feedback should always be included in the review process, the written review is an important tool to help your staff find out where they stand. An employee can refer back to this document to make sure he or she is staying on track between now and the next review period. For this reason, it's especially important to make sure the reviews you hand your team members are thorough, well-written and easy to understand.
Business News Daily spoke with human resources administrators, managers and executives, and based on their responses, we've compiled a list of the best tips for writing an effective performance review.
Make it comprehensive
A good written performance review covers all the bases of an employee's work. It shouldn't be all positive or all negative — a healthy balance of both is necessary to help your team members evolve in their roles.
"[In] a formal evaluation ... the feedback should be relevant and specific, with examples for both the good and bad points," said Don McIver, COO of 5W Public Relations. "Employee strengths should be acknowledged, and corrective action needed in weak performance areas should be identified."
In addition to highlighting strengths and weaknesses, a review should establish performance goals for the upcoming year, and cover the employee's role as part of a collaborative team. Bill Peppler, managing partner of staffing firm Kavaliro, also advised providing employees with a formal objective of the evaluation beforehand.
"A good manager will explain the purpose of the review, what they will go over and how frequently performance reviews are given," Peppler said. "This manages employee expectations and helps everyone involved be more fully prepared for the meeting."
Recap regular, informal feedback
Formal review periods shouldn't be the only times employees receive feedback about their performance. There's no need to call a meeting for every individual issue that comes up, but there also shouldn't be any surprises when workers read their reviews from the boss.
"Employee feedback [should] be given throughout the year as performance issues, good or bad, arise," McIver said. "A formal evaluation is ideally a recap of things that have been addressed during the year."
When there is a problem with an employee's habits or actions, address it as soon as possible after the incident occurs to avoid bringing that tension into the evaluation. If an employee's behavior (positive or negative) doesn't warrant immediate feedback, make a note of it and use it as a reference point during a formal or informal performance discussion, Rieken advised.
Give honest, constructive criticism
It's never easy to tell an employee what he or she needs to do to improve, but giving constructive criticism about your workers' performance is an important part of the review process. Be as clear and direct as possible about any shortcomings and mistakes, but also take the time to provide solutions to those problems.
"Fully explain what the issue is, and then expand on options for improvement," Peppler suggested. "If you see a problem in an employee's work, then he or she should have a solution to how it can be fixed. Also, let employees know where this improvement can take them, such as a promotion to a management role."
If there have been any serious performance issues, Reiken said that the best approach is to ask the employee open-ended questions, such as "How did you see it?", "What would you suggest?" or "Did you get the result you wanted?"
"Most employees work hard and [want to] do the right thing," Reiken told Business News Daily. "Asking open-ended questions can start an honest conversation that allows both sides see each other's perspective and realize why the other reacted in a certain way. Questions can create positive discourse when two sides see things differently."
Encourage discussion about the review
Most managers agree that it's frustrating when an employee has nothing to say in response to his or her performance evaluation. You don't want your staff to fight you on every point, but you also don't want to meet with silence if you have suggestions. Push your employees to give you feedback on the issues you raised. The written review should be a brief but direct overview of discussion points, making for a more nuanced face-to-face conversation; this requires employee feedback.
If the conversation starts to get heated and you want to avoid saying something that you might regret, put the dialogue on hold. You can continue a more serious discussion later via email or in another meeting, after the employee has had a chance to cool down.
End on a positive note
Always end performance reviews on a positive note. Encouraging your employees and letting them know you appreciate what they do for the company will give an added boost to a primarily good review, or lift your employee's spirits after a somewhat negative evaluation. Positive phraseology and reinforcement can go a long way in giving workers the confidence and drive they need to perform their jobs even better.
Additional reporting by Katherine Arline, Business News Daily contributor.
Job seekers with attitudes focused on learning have more success finding their dream jobs, according to a joint study from the University of Missouri and Lehigh University.
"In our study, we found that job seekers who have a 'learning goal orientation' or a natural disposition to learn from every situation in life, tend to be more successful in achieving their career goals," Daniel Turban, one of the study's authors and a University of Missouri professor of management, said in a statement.
Researchers surveyed approximately 120 college seniors at different points during the job search process. They discovered that job seekers who had a strong desire to learn from the situation put more intensity in the search process, compared with those who weren't as focused on learning.
Additionally, when the process was going well, those with a high focus on learning were able to maintain or increase their intensity, while those who didn't have the same attitude decreased their drive.
The study's authors attribute part of the results to their belief that individuals who try to learn as much as they can from each situation they're in deal with stress better than those who don't.
"With the right amount of stress, individuals with a high [learning goal orientation] increased their intensity, and as a result, were more successful with reaching their goals," Turban said. "We always think stress is bad, but that's not the case. Feeling a moderate amount of stress can be very motivating."
The good news is that individuals who aren't naturally focused on learning from their situations can learn techniques or behaviors to help them improve their attitude so they handle stress and failures better.
"Job seekers can be trained to improve their [learning attitude]," said Serge da Motta Veiga, lead author of the study and an assistant professor at Lehigh University. "Such training could help them realize that the stress and failure they experience while searching for a job is not a bad thing, but instead represents an opportunity to learn from the process and determine how they can be successful at it."
Based on their research, the study's authors believe it's best when job seekers spend time reflecting on how they are doing, and that the more intentional job seekers are about learning from the process, the more successful they're likely to be in finding a job they really want.
The study was recently published in the journal Organizational Behavior and Human Decision Processes.
After much research and analysis of e-commerce software, we recommend Shopify as the best overall e-commerce software for small businesses.
If you want to start an online store, you'll need an e-commerce software. E-commerce software can make your life easier by helping you launch your website, run your online store and automate your operations so you can focus on your customers and growing sales.
The best e-commerce software offers everything from website hosting and design to an online storefront, payment processing, merchant tools, third-party integration and other capabilities. Shopify provides all of this and more, so you can get your e-commerce business up and running in no time.
Read on to find out what makes Shopify the best e-commerce software for small business and why it's our top choice for an e-commerce platform.
Why Shopify?
A full-featured, easy-to-use e-commerce software for any small business
Whether you're launching your first business or you have a brick-and-mortar store and want to sell online, Shopify can help. Shopify is one of the most liked e-commerce software among the e-commerce small business owners we spoke with, and for good reason: It's packed with tons of features to help you launch and manage your online store, and it's supereasy to use because it doesn't require any tech skills to get started. The platform also offers both basic and advanced capabilities, so it grows as your business grows.
Best price
Of the e-commerce software we reviewed, Shopify offers the best and most affordable packages for small businesses.
What we really liked about Shopify is that it offers several subscription packages for any stage of your e-commerce business. For instance, if you're just starting out and only have a few products to sell, Shopify has a "starter plan" that costs $14 per month, allows you to list up to 25 products, and provides 1GB of hosting and unlimited bandwidth. To sell unlimited products and take advantage of more advanced features, you can sign up for one of Shopify's regular plans, which start at $29 per month.
We also liked that, with Shopify, there are no hidden fees. When we called Shopify, the customer service representative confirmed that there are no transaction fees, and added that there are no transaction fees if you use Shopify's payment gateway. Note that this is separate from credit card processing fees, which range anywhere from 2.25 percent plus 30 cents per transaction to 2.9 percent plus 30 cents per transaction, depending on your plan.
Ease of use
To test e-commerce software, we signed up for our own business account on several platforms. We found Shopify to be supereasy to use, and we were able to set up our account in seconds.
When you sign in to Shopify, you'll be greeted with a simple dashboard with a side navigation menu, which makes it easy to get around and quickly get to a specific task. The dashboard home page also has shortcuts to commonly used features, so you don't have to waste time going through each section — for instance, to add products or edit your website.
Using Shopify, you can launch your online store in three steps: add products, customize the look of your website and set up your domain. Adding products is as simple as entering details like product descriptions, pricing and options (size, color, model, etc.), and then uploading product images.
Plus, you don't need any tech skills to build, design or edit your website. You can choose from more than 100 ready-made themes, and then just add your logo and pick colors that match your branding using a color picker. You can also customize its look and feel using menu options located in the Themes section or with HTML/CSS if you're a more advanced user.
E-commerce features
In addition to letting you create a professional storefront, Shopify offers all the tools you need to manage and grow your e-commerce business. These includes an online shopping cart, reports and analytics, marketing tools and mobile access.
Shopify's online shopping cart lets you easily accept credit card and PayPal payments, as well as automate sales to save you time. First, the service has its own payment gateway, so you don't need to set up any third-party processors. The sales rep we spoke to said this means you can start making sales as soon as your online store launches and get paid fast into your merchant account.
Shopify also automates sales while giving customers fast, painless checkout. Products are saved into shopping carts, and when customers are ready to check out, all they have to do is choose their shipping method — preset by you or by using automatic carrier shipping rates — and enter their payment information. Everything works in the background, and orders are automatically added to the Orders section of your dashboard, so all you have to do is take care of shipping your products to the right customers.
In addition, Shopify offers all types of merchant tools to help you run and grow your online business. For instance, you can use its reports and analytics tools to measure the performance of your store and website. There's also a search engine optimization (SEO) wizard that helps potential customers easily find your store, and individual products on Google and other search engines.
Shopify also features several marketing tools to help you find and retain customers, including the following:
Discount code and coupon generators
Custom gift cards
Social network integration
Facebook selling
Targeted email marketing
Product reviews
Google ads
Facebook ads
Need to access your store from a mobile device? Shopify Mobile for iOS lets you run your e-commerce business wherever you are. Get order notifications by text or email whenever new orders come in, fulfill orders straight from the app, and even manage inventory and product or pricing information using your iPhone.
Other benefits
One of the biggest benefits of using e-commerce software is that you can easily run your entire business without having to purchase additional solutions or worry about the back end or IT aspects of running an online store.
First, Shopify is an all-inclusive e-commerce software that provides much more than an online store and shopping cart. It also offers the following:
Customer relationship management (CRM) tools to help you manage customers
A content management system (CMS) so you can enrich your website with multimedia, additional pages and even a full-featured blog
Third-party integration so you can connect apps you already use
Second, the company takes care of the infrastructure and security side of your online store and website. We were told that its servers are not only fast, but also guarantee a 99.94 percent uptime, so your store is always live and accessible. In addition, upgrades are installed automatically, so you don't have to worry about manually installing the latest features and updates.
When we asked about data accessibility and security, Shopify confirmed that the company automatically performs daily backups of all data — which includes product information and inventory, orders and customer information — in its secure servers. Shopify also keeps your business's and customers' information safe with 24/7 monitoring, Level-1 Payment Card Industry (PCI) compliance for secure credit card processing, and 256-bit SSL certificate for data protection.
Customer service
If you need help using Shopify, the company provides a variety of resources to solve any issue.
For those who want to get in touch with a live person, Shopify's dedicated support team is available 24/7 via email, live chat and phone, so there's always someone there when you need assistance. The small business owners we spoke with said Shopify's customer service is always fast, accessible and friendly, which we also experienced when we called the company, posing as an e-commerce startup.
For those who prefer to resolve problems themselves, Shopify's library of self-help resources include the following:
A knowledge base of frequently asked questions, and a collection of user guides and tutorials from the Shopify Manual
Discussion forums to connect with the Shopify community, ask questions and get answers from fellow Shopify users
An "E-commerce University" filled with e-books, videos, webinars and more to teach you the ins and outs of selling online
You can also find one-on-one help to assist you in growing your online business. Known as "Shopify Experts," these partner designers, developers and marketers have been approved by Shopify to hold your hand as you build your online store, boost engagement and grow your customer base.
Limitations
Although Shopify is our top pick for the best e-commerce software for small businesses, it does have some drawbacks.
One major limitation is that it can be difficult to customize your online store for some users. Although you have several options to change the look and feel of your website, one thing missing is a drag-and-drop website builder that lets you fully tweak templates and design your online store by simply moving things around with your mouse. This was a popular feature small business owners we talked to wished Shopify had.
Another issue we came across relates to Shopify's coding. Many of the small business owners we spoke with said they found it difficult to get the more advanced customizations they wanted without touching its code. Not only is that a problem for non-tech-savvy users, but the difficulty is within the language itself.
This is because Shopify uses ".liquid" programming, a templating language most users don't know. To get around this, one option is to hire a website programmer who knows the coding to tweak your website for you. Another option is to use the simpler HTML/CSS feature to override any template coding.
Keep in mind that these issues apply primarily to those who require advanced customizations for their stores. Shopify offers more than 100 templates, many of which will already fulfill your online store's needs.
When you're looking for a job, the best way to increase your chances of getting hired is to include the right qualifications on your resume and online profiles. While the specific job requirements for any position vary by industry, there are a few broad skill sets that are useful to employees in any field. Career experts and hiring managers weighed in on today's most in-demand job skills and how to improve them.
Self-management. Many job hunters, especially in the tech field, aspire to work in a startup setting. In this type of work environment, companies are eager to find employees who are able to keep themselves on track without excessive supervision or micromanaging.
"At a quickly growing firm, [managers] don't have time to stand over employees' shoulders and make sure they're doing what they're supposed to do," said Bryan Lewis, chief operating officer of business research company Cognolink. "[They want] to give them a task and have them do it."
Cristin Sturchio, Cognolink's global head of talent, noted that hiring managers are able to tell when candidates can manage themselves, based on the way they conduct themselves and respond during the interview. To improve your ability to self-manage, she recommended asking for regular feedback from your supervisor about your performance.
"When you do something, ask the person, 'How did I do? What could I have done differently?'" Sturchio said. "Any skill improvement is about being brave enough to ask for feedback."
(Real) social media skills. In recent years, "social media" has been a popular item in the "skills" section of many job seekers' resumes. But what does it really mean to be skilled at social media? It's more than simply having an account on LinkedIn, Twitter or Facebook, to name a few. You need to be able to show an interviewer that you're active on these networks and understand the nuances of each one's distinct community.
"Be involved in groups," said Kerry Hannon, job expert for AARP and author of "Love Your Job: The New Rules of Career Happiness" (Wiley, forthcoming 2015). "Chime in on discussions and post articles. A personal [blog] URL also shows your understanding of [social media]."
Hannon also advised job seekers to show off some related tech savvy by setting up news alerts about the company and slipping it into your conversation with a hiring manager.
"If you can say, 'This [company news] came up on my Google Alerts,' it shows you know something," Hannon said.
Data analytics. According to the Bureau of Labor Statistics, some of the fastest-growing occupations between now and 2022 will be information security analysts (37 percent), operations research analysts (27 percent) and statisticians (27 percent). This means that candidates with a strong background in data science and analytics will have a real advantage in the job market. Rowan Gormley, CEO of customer-funded winery NakedWines, said that smart employers are looking for people who understand data and its value to a business.
"It takes a special kind of person to analyze [data], build a test plan, measure results and implement winning ideas," Gormley said. "Part of this is easy to obtain — go and take a class or two about databases, learn SQL, etc. The other piece of the puzzle is knowing how to use that data. Managers ... want the people who can look at a wall of data and say, 'There's one number here that matters.'"
Dan Finnigan, CEO of recruiting platform Jobvite, said that open online courses through companies like Coursera and EdX will allow you to affordably take courses in these areas with some of the country's top universities.
Creative problem solving. Knowing how to analyze and use data is important, but it takes a combination of those strong analytical skills with the creative vision to apply it to the "big picture." Having both of these traits greatly enhances your ability to come up with effective solutions for a company, and makes you a great asset to a team, Gormley said.
"We look for the people who are very creative, but they have a tendency to be less organized [and pay] less attention to detail," Gormley told Business News Daily. "And we like the analytic data types, but we want them to know when to turn analysis into action so they don't get carried away looking at the data and forget the bigger picture."
Even if you currently have these skills, it's important to remember that there's always room for improvement. Your education didn't stop when you received your diploma or completed that certification course for your first job. A thirst for knowledge is and always will be one of the most prized qualities in an employee.
"In today's job market, the candidates who succeed are the ones who continue training and building new skills," Finnigan told Business News Daily. "Take advantage of your current employer's continuing education or training program, if it has one. Build new skills on the weekend or during your commute with open online courses. Strive to understand what skills your next job will look for, and make sure you stay up to date."
Launching and running a small business is not a cheap endeavor. Whether it's money to get up and running or cash to invest in inventory or buy new equipment, it's likely you're going to need more capital than you have in the bank at one point or another to keep your business moving in the right direction.
The question is, when you need money and don't have it, where do you turn? Small businesses today have a variety of options when it comes to finding a lender. There are government-backed loans and loans from banks, merchant service providers and alternative lenders, which include an assortment of online lending services that don't come with those same guarantees as those backed by the government.
Before you start applying for loans, you first need to answer several critical questions that will push you in the right direction, including:
What do you need the money for?
How much money do you need?
How long will it take you to pay it back?
How long have you been in business?
What is the current financial shape of your business?
How much collateral, if any, do you have to put up for the loan?
How quickly do you need the money?
Answering these questions will help determine if you should pursue a government-backed SBA loan, a loan or line of credit through a bank or other financial institution, a cash advance from a merchant services provider, or a loan from an online alternative lender. All offer types of loans that you can use for an array of purposes, such as smaller working capital loans for day-to-day expenses, or larger loans to buy new equipment or real estate. Each type of loan varies greatly in how much interest is required, how much money you can get and how quickly it needs to be paid back.
Once you know how much money you need and how it will be used, you have to figure out the best place to get it from.
Small Business Administration
One of the first places small businesses often turn to for capital is the government for a Small Business Administration (SBA) loan. The SBA offers several loan programs designed to meet key financing needs for a wide range of business types.
The most important thing to understand with these loans is that the government isn't directly lending small businesses money. Instead, the SBA sets guidelines for loans that are made by its partners, which include banks, community development organizations and microlending institutions. Businesses have a variety of loan types to choose from when pursuing an SBA loan, each of which comes with its own parameters and stipulations on how the money can be used and when it must be repaid.
Javier Marin, a consultant with the Florida Small Business Development Center at the University of South Florida, said the biggest positive of SBA loans are the government guarantees that come with them.
"The SBA provides a guarantee that enables the bank to extend credit it would have otherwise declined," Marin told Business News Daily. "This is true for startups, companies with a tight cash flow stream, and business owners with borderline, not bad, credit scores."
That government guarantee, which typically covers between 75 and 90 percent of the loan, eliminates much of the risk for the lender, said Lynette Newman, president of Newman Business Loan Consultants Inc.
"The business works with the [lender] and then the [lender] asks the government to guarantee or co-sign with the business for the loan," Newman said. "If the business fails to repay the loan, the lender handles [it] like any other type of defaulted loan."
It's only after unsuccessful attempts to recover the amount owed, either by collecting on collateral or personal guaranties, that the lender will ask the government to honor the guaranty.
"The [lender] will then take a loss on the unguaranteed portion," Newman said. "The U.S. government, of which SBA is a part, can then attempt further recovery, generally by a tax refund offset."
The terms of an SBA loan also tend be more favorable to borrowers, Newman said.
"If the SBA guarantee is applied, the bank/lenders can lend more, or perhaps with less collateral," Newman said. "It may also not need as much cash injection, or may have longer repayment terms than it could without a guaranty in place."
Marin said another positive of SBA loans is that the repayment terms are longer than non-government-backed loans. SBA loans are extended to 10 years for certain types of loans and 20 years for others, giving the business more time to pay if needed. Additionally, there is no prepayment penalty on loan terms under 15 years.
SBA loans aren't without any downsides, however. Since the government is involved, you can expect the process of applying for an SBA loan to be much more complex than when applying for a conventional loan through a bank or an alternative lender.
Newman said there is additional paperwork to be filed and there are extra fees that need to be paid. The length of time it takes to get approved, or denied, is also lengthier, she said.
"It takes longer to have a guaranty placed on a business loan than a non-guaranteed loan would take," Newman said.
When applying for an SBA loan, small business owners are required to fill out forms and documents for the specific loan they are trying to get. In addition, the SBA encourages borrowers to gather some basic information that all lenders will ask for, regardless of the loan type. Among the required items are:
Personal background and financial statements
Business financial statements
Profit and loss statement
Projected financial statements
Ownership and affiliations
Business certificate/license
Loan application history
Income tax returns
Résumés
Business overview and history
Business lease
The SBA also advises small businesses applying for a loan to be prepared to answer several questions, including:
Why are you applying for this loan?
How will the loan proceeds be used?
What assets need to be purchased, and who are your suppliers?
What other business debt do you have, and who are your creditors?
Who are the members of your management team?
Small business owners can find SBA loan applications on the SBA website.
Banks
While banks are often the sources of SBA loans, they also are lenders of conventional loans. The biggest difference between SBA bank loans and non-SBA conventional loans is that the government isn't guaranteeing that the bank will get its money back.
Conventional bank loans also give you a little more freedom on what you can do with the money. While a specific plan is still needed to get approval, bank loans don't come with such stringent use terms that each of the SBA loans do.
Rohit Arora, CEO and co-founder of Biz2Credit, said there are a number of reasons a conventional non-SBA bank loan is a good choice for small businesses in need of funding.
"Conventional bank loans come at good interest rates, and because a federal agency is not involved, the approval process can be a little faster," Arora said.
Just like the other lending sources, there are some negatives to pursuing a conventional bank loan. Marin said bank loans typically include shorter repayment times than SBA loans and often include balloon payments. This can force small business borrowers to refinance the loan in 3 or 5 years because the money is due.
Additionally, Arora said it's often difficult to get approved for a conventional bank loan.
"Even though approval rates have increased, big banks approve [only] slightly more than 20 percent of the loan requests they receive," Arora said. "Smaller banks approve a little less than half of the loan applications they receive."
When applying for a bank loan, you'll be required to share all of your financial details. You'll need to provide your lender with all the financial background on your company, future growth plans and often your personal financial information. This allows a bank to gain an understanding of your complete financial situation.
The more information you have to illustrate that you've run your business well gives banks the confidence they need to invest in you for the future. The more information you provide, the easier it will be for your loan officer to get your loan approved.
In addition to proving that you won't have trouble paying back the loan, you will also need to show details on how you plan to spend the money. Don't skimp on specifics with banks. Show exactly how you will use the requested funds and how much you need to accomplish your goals.
Lenders appreciate attention to detail and preparedness when it comes to the facts. For example, if you are looking to purchase a new piece of equipment, provide quotes on the exact costs, how much capital you need to facilitate this purchase, and specifically how the new equipment will help grow your business.
Credit: Anita Rahman
Alternative lenders
If you don't want to deal with a bank, for either an SBA-backed loan or a conventional loan, there are a large number of alternative lenders you can turn to for money. Examples of alternative lenders include the online sites Lendio, Kabbage, OnDeck Capital and Biz2Credit.
Alternative lenders are particularly attractive to small businesses that don't have a stellar financial history.
"Many businesses do not qualify for bank financing," said Darren Schulman, chief operating officer of business financing provider AmeriMerchant. "Either their credit scores are too low, the business is new, or there is no collateral that banks would want."
Even if a business owner does qualify for a bank loan, the process may move too slowly for their liking. For this reason, alternative lenders are becoming a popular choice for startups and established businesses alike.
"Small business owners have an entrepreneurial mentality, which means when they see an opportunity, they want to move fast," said Scott Brandt, vice president of marketing at online payroll services provider SurePayroll. "So if a traditional venue for seeking capital is slow or difficult, nonbank alternative lenders are an attractive option. In most cases, what used to take weeks or months can now be done almost instantly online. "
The downside of using an alternative lender is that interest rates can be significantly higher than what's charged by a bank. Arora said alternative lenders sometimes charge between 30 and 40 percent interest on their loans.
"While a borrower is able to get money quickly, he or she pays a premium for that in the form of higher interest rates," Arora said. "Alternative lenders are more willing to provide money to companies that might not have great credit ratings. The increased risk the lenders take is reflected in the interest rate charged."
When considering an alternative lender for your financing, experts recommend taking several factors into consideration.
Interest rates: Small business owners should know that they can pay off the loan relatively quickly to avoid hefty interest charges.
Fees and policies: Be sure to speak with each lender's representative about any fees that may apply when the loan is funded, and how the payback will affect your cash flows, to make sure that you can run your business while paying back the loan.
The lender's ratings and review: There are many companies today who say they are an alternative lender, but Schulman advised finding a company that has an A+ rating with the Better Business Bureau. Additionally, you can research online reviews from other customers and speak with small business owners who have used that particular lender, Brandt said.
Even though it can be easier to obtain a loan from an alternative lender, you still have to provide them with an array of personal, business and financial information. Each lender, however, varies in what it asks for. Some pieces of information that could be requested include a plan for how the money will be used, your credit history and a verification of your income and assets.
Types of loans
In addition to knowing the sources for loans, it is also critical to better understand the types of loans each offers. Here is a rundown of the various types of loans each lender offers.
Currently, the SBA offers four separate types of small business loans:
7(a) Loan Program: This is the SBA's primary lending program to help startups and existing small businesses obtain financing. 7(a) loans are the most basic and most common type of loan, as well as the most flexible. The money can be used for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, purchasing or renovating land and buildings, leasehold improvements and debt refinancing. 7(a) loans have a maximum loan amount of $5 million. Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. Borrowers can apply through a participating lender institution.
Microloan program: The SBA offers very small loans to newly established or growing small businesses. The loans can be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery or equipment. The loan cannot be used to pay existing debts or purchase real estate. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit organizations with experience in lending and technical assistance. Those intermediaries then make loans up to $50,000, with the average loan being about $13,000. The loan repayment terms vary based on several factors, including loan amount, planned use of funds, requirements determined by the intermediary lender and the needs of the small business borrower. The maximum repayment term allowed for an SBA microloan is six years.
Real estate and equipment loans: The CDC/504 Loan Program provides businesses with long-term fixed-rate financing for major assets, such as land and buildings. The loans are typically structured with the SBA providing 40 percent of the total project costs, a participating lender covering up to 50 percent and the borrower putting up the remaining 10 percent. Funds from a 504 loan can be used to purchase existing buildings, land or long-term machinery, construct or renovate facilities, or refinance debt in connection with an expansion of the business. These loans cannot be used for working capital or inventory. Under the 504 program, a business qualifies if it has a tangible net worth of less than $15 million and an average net income of $5 million or less after federal income taxes for the preceding two years before the application. The maximum amount of a 504 loan is $5 million. Generally, the project assets being financed are used as collateral and personal guarantees of the principal owners are required. CDC/504 loans are available with 10- and 20-year maturity terms.
Disaster loans: The SBA provides low-interest disaster loans to businesses of all sizes. SBA disaster loans can be used to repair or replace real estate, machinery and equipment, and inventory and business assets that were damaged or destroyed in a declared disaster. The SBA makes disaster loans of up to $2 million to qualified businesses.
In addition to the SBA loans, banks and alternative lenders also offer some similar loans, as well as funding options that the SBA doesn't offer, including:
Working capital loans: Working capital loans are designed as short-term solutions for businesses in need of money to help run their operation. These finds can be used to pay bills, make payroll, purchase inventory, etc. Working capital loans are not designed to make large equipment or capital purchases that would require a lengthy payback term. Working capital loans are available from both banks and alternative lenders. The advantage of a working capital loan is that it gives small businesses the ability to keep their operations running while they search for other ways to increase revenue. Some downsides of a working capital loan are that they often come with higher interest rates and have short repayment terms.
Equipment loans: In addition to the SBA, both banks and alternative lenders offer their own types of equipment loans. Equipment loans and leases provide money to small businesses for office equipment, like copy machines and computers, or things such as machinery and tools. Instead of paying for the large purchases up front and all at once, equipment loans allow business owners to make monthly payments on the items. One benefit of equipment loans is that they are often easier to obtain than some other types of loans because the equipment you're purchasing with the loan serves as collateral. That means that if you fail to make your loan payments, lenders can seize your equipment to satisfy repayment. Another positive of equipment loans is that they don't require a large down payment, so they preserve cash flow. In addition, they offer some tax advantages, like write-offs. The biggest disadvantage of using equipment loans to finance a business is that these loans can be used only to purchase equipment. Even if you end up not using the equipment you purchased, you'll still have to pay for it.
Merchant cash advance: A merchant cash advance (MCA) is a loan made to a business based on the volume of its monthly credit card transactions. Businesses can typically receive an advance of up to 125 percent of their monthly transaction volume. The terms for repaying a merchant cash advance vary by lender. Some take a fixed amount of money out of a business's merchant account every day until the advance is repaid with the agreed-upon interest, while others take a percentage of the daily credit card sales. The best candidates for merchant cash advances are businesses with strong credit card sales, such as retail merchants, restaurants and service businesses. The advantages of merchant cash advances are that they are relatively easy to obtain, funding can be received as quickly as in a few days and the loan is paid back directly from credit card sales. The biggest downside of a merchant cash advance is that it is expensive. Interest on these loans can run as high as 30 percent a month, depending on the lender and how much money is being borrowed.
Lines of credit: Lines of credit are similar to working capital loans in that they provide small businesses money for day-to-day cash flow needs. Not recommended for larger purchases, lines of credit are available for as short as 90 days to as long as several years. Typically, traditional banks and financial institutions offer lines of credit. One benefit of a small business line of credit is that you only have to pay interest on the amount you use. Lines of credit are comparable to credit cards, in that the bank will let you borrow up to a certain amount of money. This gives you the ability to take only what you need and pay interest only on what you use and not the entire amount. Other advantages are that these loans are usually unsecured and don't require any collateral, have longer repayment terms and give you the ability to build up your credit rating if you make the interest payments on time. The downsides of lines of credit are the additional fees that are charged and that they put small businesses in jeopardy of building up a large amount of debt.
Professional practice loans: Professional practice loans are specifically designed for providers of professional services, such as businesses in the health care, accounting, legal, insurance, engineering, architecture and veterinary fields. These types of loans are typically used for purchasing a practice, buying real estate, renovating office space, buying new equipment and refinancing debt.
Franchise startup loans: Franchise startup loans are designed for entrepreneurs who need financing to help open their own franchise business. These loans, offered by both banks and alternative lenders, can be used for both working capital and to pay franchise fees, buy equipment and build stores or restaurants. They are usually only offered when the entrepreneur is interested in opening a franchise from an approved franchisor.
Once you understand the lender and the type of loan that best fits your needs, the next step is making sure you can get approved for it. The loan approval process can be a difficult situation for many small businesses owners. To give you the best chance of getting the money you need, Visa Small Business and America's Small Business Development Centers offer 10 tips to help guide small business owners through the process of obtaining funding.
Credit score: Since it's one of the first things a lender looks at when reviewing a loan application, it is important to know what your credit score is. FICO scores range from 300 to 850. It's challenging for a business with a score of less than 600 to secure business credit from a financial institution.
Understand your options: It's important to identify why you're borrowing money and to account for any product or marketplace changes. Review and revise your budget and make sure to borrow only what you know you can pay back.
Financial statements: Have a professional analyze your financial statements before asking for a loan. They can help you clean up simple mistakes and eliminate unnecessary red flags for potential lenders.
Have a repayment plan: It is critical to have a plan to pay back your loan. Business owners should prepare projections with expenses and earnings and incorporate the new loan payments into their plan. Additionally, including a safety plan in case projections fall short will show lenders you're committed to repaying the debt.
Provide collateral: Since collateral is essential to business lending in today's market, small businesses owners should be willing to provide a collateral package to their lender. Without collateral, a lender relies solely on future performance or existing cash flow to repay the debt. That often translates into higher risk and interest rates for borrowers.
Know your industry: It is critical to make sure your business is not grouped into industry trends that fail to adequately reflect your company's future. Explain to lenders what's happening within your industry and how you're approaching future opportunities.
Personal guarantees: In order to send a clear message that you stand behind your business and its performance, provide your lender with a personal guarantee. It raises a red flag to lenders when questions arise about the development of a corporation to protect personal assets.
Increase cash flow: A recent survey revealed that nearly half of small business owners say cash flow would be the most beneficial process improvement. This indicates owners are struggling with cash flow more than any other business process. Turn to reliable and convenient ways to pay and be paid, such as electronic payments, which don't require cash or checks to be handled, counted or deposited.
Be on time: Paying bills on time will help improve credit ratings and increase credit capacity. As a result, you may get better interest rates, loan terms and e-payment acceptance costs.
Business credit cards: While small business owners may be tempted to use personal credit cards, the best bet is to use a business credit card to limit personal liability and make it easier to track business expenses.
In addition to obtaining loans through an SBA partner or your local bank, there are an assortment of alternative lenders that offer loan programs or loan-matching services to small businesses. Here is a full list of alternative lenders and a summary of what each company claims to offer.
Accion: Accion is a small business microloan lender. The company provides two types of loans — one for established businesses and the other for startups. Loans up to $50,000 are available to established and profitable businesses and $200,000 loans are available for start-up businesses. Both loan options feature fixed interest rates. us.accion.org
American Express: American Express offers merchant financing to small businesses. The service is only available to businesses that accept the American Express card. The financing offered is a commercial loan, not a purchase of receivables or a cash advance. A business must repay the loan in full, together with the loan fee, regardless of its future credit/debit card charge volume. americanexpress.com
Balboa Capital: Balboa Capital offers several small business loan products. These include working capital loans, merchant cash advances and flexible small business loans. The company makes quick credit decisions, offers loans up to $250,000, has fast processing and no restrictions on how you can use your loan. balboacapital.com
Biz2Credit: Biz2Credit is an online marketplace for small business funding. The company connects small businesses in need of funding with lenders. Biz2Credit can help small businesses obtain a variety of loans, including SBA loans, equipment financing, business acquisition loans, commercial loans, lines of credit, franchise loans, real estate financing, disaster loans and merchant cash advances. biz2credit.com
BoeFly: BoeFly is an online marketplace for small business loans. The site is a loan exchange that connects small business owners with more than 4,000 business lenders. BoeFly is a subscription service that does not charge any transaction fees. boefly.com
Business Financial Services: Business Financial Services offers both small business loans and merchant cash advances. The company provides small business loans to a wide range of industries, including but not limited to restaurants, retail stores, service providers, manufacturers and wholesalers. Business Financial Services offers loans ranging from $4,000 to $2 million. businessfinancialservices.com
Can Capital: Can Capital offers small businesses loans and merchant cash advances. Loans through Can Capital vary anywhere from $2,500 to $150,000, with a range of four to 24 months in maturity. No personal collateral is needed and funds can be transferred in as little as two business days. cancapital.com
Dealstruck: Dealstruck provides a variety of small business funding options, including business term loans, revenue-secured term loans and asset-based lines of credit. The company offers loans between $50,000 and $250,000. Businesses approved by Dealstruck need to be profitable, with annual sales of at least $250,000 and more than one year of operating history. dealstruck.com
FastUpFront: FastUpFront provides completely unsecured business cash advances up to $250,000. All businesses that accept credit cards are eligible for a cash advance from FastUpFront. The company's unsecured cash advances are based on future sales, not credit. www.fastupfront.com
Fundera: Fundera gives small businesses access to multiple loan offers through one application. Fundera does not loan money directly to small businesses, but rather connects small businesses with different financing options. Types of loans the company helps set up for small businesses include small business loans of up to $1 million, merchant cash advances, equipment loans, factoring, 401(k) rollover funding and lines of credit. fundera.com
Headway Capital: Headway Capital offers $5,000 to $30,000 lines of credit to small businesses. Once they are approved, businesses can borrow as much money as needed, whenever it’s needed, up to the available credit limit. With each draw, a business can select the repayment schedule that best suits its needs. In order to be eligible to apply, your business must have been in operation for at least one year, and it must be located in one of the following states: Florida, Illinois, Missouri, North Carolina, Pennsylvania, Virginia, Washington or Wisconsin. headwaycapital.com
Kabbage: Kabbage is a provider of working capital loans to small businesses. Kabbage leverages data generated by dozens of business operations to understand performance and deliver fast, flexible funding in real time. Kabbage can support any small business by analyzing various data sources that you use every day to run your business. kabbage.com
Lending Club: The Lending Club offers loans to most types of businesses in 45 states, including professional and personal services, retailers, contractors, health and wellness providers, automotive, wholesalers, manufacturers and restaurants. Its loans can be used for a variety of purposes, including business expansions, buying inventory or equipment, working capital and refinancing. lendingclub.com
LendingTree: LendingTree connects consumers to lenders who compete for their business. LendingTree lenders offer an array of loan types, including business loans. The loan amount a business is approved to borrow is based on several key factors, such as how long it's been in business, the company's annual revenue and credit score. www.lendingtree.com
Lendio: Lendio is an online service that helps small businesses quickly find the right business loan. Lendio makes business loans by matching qualified small business owners with active banks, credit unions and other lending sources. lendio.com
Merchant Advisors: Merchant Advisors offers an assortment of loan types, including small business loans, working capital loans, restaurant loans, bad credit loans, cash advances, SBA loans, restaurant equipment leasing, lines of credit, franchise financing, 401(k) business funding and home-based business loans. onlinecheck.com
National Funding: National Funding serves small businesses by offering a range of financial services and products, including working capital loans and merchant cash advances. The company's small business working capital loans require no pledge of personal assets. nationalfunding.com
OnDeck: OnDeck is a lender of loans to small- and medium-size businesses. The company uses data aggregation and electronic payment technology to evaluate the financial health of small- and medium-size businesses when determining whether or not to approve a loan request. The company's proprietary credit models look deeper into the health of a business, focusing on overall business performance rather than the owner's personal credit history. ondeck.com
PayPal: PayPal offers working capital loans to small businesses that already process payments through PayPal. In most cases, the maximum loan amount is up to 8 percent of the sales a business has processed through PayPal in the past 12 months. When applying for a PayPal Working Capital loan, businesses select the daily repayment percentage, which is the portion of future sales that will go toward repaying the loan balance. The loan balance is repaid automatically as businesses make sales through PayPal. paypal.com
Prosper: Prosper loans are not traditional small business loans. Its personal loans are based on applicants' credit scores and they are issued to individuals, not businesses. These loans are desirable in a variety of cases, such as when a business doesn't yet have a proven track record. Prosper loans are unsecured and don't require any collateral. prosper.com
SBL Group: SBL Group offers loans ranging from $5,000 to $1 million. Funds are typically available within 24 hours, with repayment terms varying from between three and 24 months. To qualify, businesses must have been in operation for more than three months, have income of more than $100,000 over the past 12 months and have a credit score of more than 500. www.smallbusinessloansgroup.com
SmartBiz: SmartBiz offers SBA loans up to $350,000 with interest rates between 6 and 8 percent. After completing the application, businesses can receive funds in as fast as seven days. Loans between $151,000 and $350,000 typically take longer: from four to six weeks. SmartBiz is a joint effort of Golden Pacific Bancorp and Better Finance. Golden Pacific is a member of the SBA’s Preferred Lenders Program and Better Finance is a financial technology company that provides leasing and credit solutions. smartbizloans.com
Small Business Loans Depot: Small Business Loans Depot offers an assortment of loan types, including Bank statement loans, small business loans, working capital loans, equipment loans and equipment refinance loans. Loans are available from $5,000 to $150,000. The amount for which a business can qualify depends on things such as business and personal credit, time in business, the amount of equipment owned and the business’s gross sales. smallbusinessloansdepot.com
Square: Square offers small business funding to its customers that have an active credit card processing account with them. Square capital can be used to increase inventory, buy equipment or open a new location. Businesses make loan repayments to Square automatically as a fixed percentage of their daily card sales. The payments are tied directly to card sales. Businesses pay more when sales are strong and less if things slow down. squareup.com
Are you an alternative lender that would like to be added to this list? Please feel free to contact Chad Brooks at cbrooks@purch.com.
