7 Steps to Launch Your Small Business

The entrepreneurial spirit is alive and well in America today. Increasing numbers of people are opening their own small businesses in an attempt to gain economic freedom and command their own destiny. Unfortunately, statistics show that ninety-five percent of new businesses don’t last past ten years. New restaurants have even a worse record: fifty percent of them will close within the first year of opening.

Many of these failed business owners might have succeeded if they’d planned and followed an organized process on how to start a business. Even more starkly, there are thousands upon thousands of Americans who never take the risks of entrepreneurship – not because they lack the ideas, but because they don’t know where to start. As Suzy Kassem has told us, “Fear kills more dreams than failure ever will.” In order to help ease fear and mitigate the risk of failure, here are seven steps you should follow before your launch your own new business:

1. Research Your Idea
Ask yourself if there is a market and a demand for your business offering. Your intuition says that there is, but remember that you are unique, and your desires and excitement may not be indicative of the greater population. If research shows there isn’t a sizable market, stop. Go no further. Without demand, there are no sales and your business is doomed. Trying to create a demand for something new is extremely difficult and expensive. “A business that doesn’t make money is a hobby” (Dave Ramsey).

2. Choose a name
Pick a name that describes you and your business. Make it descriptive, distinctive, and eye-catching. Once you’ve picked a name, check with the CIPC to see if the name is available. If so, register it. Keep in mind that the name you choose will help in your reputation building as an owner and successful business person. You will want to register a domain name for your website that matches your business name. It is important enough to match the business name to the domain name that you may want to choose a business name based partially on which domains can be easily and cheaply obtained.

3. Write a Business Plan

Every new enterprise should have a business plan to guide you through the launching process and into the first year of operation. There are many resources that provide outlines and sample business plans you can study. Entrepreneur Magazine has this helpful guide to creating a business plan. Having a detailed plan will help you know what you need to do at every point in your journey.

4. Pricing Your Product or Service 
You need to determine the cost of producing your item before you can peg an asking price for it. You might have the best idea for an item since sliced bread, but if you can’t bring it to market at a competitive price, your business will fail. Study your competition to see what the costs of alternatives might be.

5. Finance Your Venture
The dirty secret of business financing is that the SBA Loan is the cause of most business failures. Debt of any kind is a stranglehold on a business at any stage, and especially in its vulnerable infancy. Successful businesses typically finance their growth and operations organically, meaning they pump profits back into the business repeatedly until it becomes self-sustaining.

6. Legal Structure
You should consult a tax or business advisor to determine what legal entity you should operate under. Your choice of a sole proprietorship, a partnership or a corporation could be instrumental in the taxes you pay and the long-term life of your business. What you learned about ownership structure in business classes was probably overly simplistic compared to the complicated structure of the business tax code.

7. Determine Your Cash Flow Needs

Cash is king in business, especially if you are going to manufacture an item to wholesale to a retailer. Many small businesses have failed who had a great product but didn’t have the cash necessary to produce large quantities of their product for buyers who only paid on extended terms. Try and secure a line of credit from a bank that will allow you to borrow money for short periods of times in order to cover these periods in between shipment and payment.

There are obviously many other factors you need to consider when opening a new business other than the seven offered above. If you follow these steps, however, and plan, plan, and plan, your chance for success should be greatly enhanced.

 

Rachael Murphey is an entrepreneur and writer on topics of business, finance, leadership, and self-improvement. She has written for Idea Cafe, Reputation Building, and the Odyssey. Rachael currently lives in Denver, CO with her dog Charlie.

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7 Steps to Launch Your Small Business

Five Best Chat Programs For Your Small Business

If you work with a small business team, you know the importance of communication. Oftentimes, you quickly need to get an idea across to someone who’s not in the room. Rather than relying on calling, which is time-consuming, and texting, which some can see an invasion of their personal digital space, many businesses now rely on an internal digital chat system. There are many to choose from, depending on your team’s needs. Here are the most effective chat solutions for your team.

Skype: The Old Standby

Of all the apps and programs on this list, Skype is the most established, having been one of the big players in online communication for more than a decade. With all that time to refine their product, Skype offers a consistent experience across nearly all platforms, including adaptability with many enterprise systems. While Skype specializes in international voice calling, video chats, and group chat, there aren’t many other killer features. Still, these functions should be just fine for small businesses that are looking for a no-frills chat client.

Google Hangouts: The New Standby

While Google Hangouts doesn’t offer many more features than Skype, it should be the preferred chat client for businesses that have gone Google. Besides compatibility with other Google products such as Calendars, and Google Docs, Hangouts does have one pretty cool feature: Hangouts On Air. With this feature, users can broadcast live to the public or even host a talk on a private channel. If you’re looking for a new way for your business to connect with its customers, you might want to take a look at this feature.

Slack: Making Waves in the Chat Solutions

Slack is a relatively new mover and shaker in the digital communication sphere, but it’s quickly winning over hearts and minds with its setup. Rather than having your team focus all their communications on one or two chat groups, Slack suggests making separate channels for each project you’re working on. Channels can be set to viewable by everyone or made private for certain members. If you’re willing to change the way you do messaging, your team may just find this option more efficient.

Basecamp: Tons of Features for Getting a Project Done

Live chat is a huge part of Basecamp, but that’s not the only thing this platform has going for it; Basecamp is also a full-fledged project management system. Among its features are a message board for posting announcements or ideas, automatic check-ins that pose regularly-scheduled questions to team members, and boards for documents and other files.

Kik: The Up-and-Comer in Chat

You may not associate this chatting app with business use, but if you’re part of a team that’s looking for less distractions and more communication, this may just be your option. By default, Kik is available for mobile only, but this can be inconvenient for businesses that don’t rely on mobile communications. However, this doesn’t mean you can’t use still use Kik from your computer.

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Five Best Chat Programs For Your Small Business

Sponsored – Staples Back to Business Survey Finds Small Business Owners Are Ready to Rock in 2017

This is a sponsored post on behalf of Staples. All opinions are mine. They just paid me to give YOU my opinions. It’s a win!

This survey by Staples came out just as small business owners are getting back to business in 2017. In it, Staples asked small business owners a number of questions to gauge their mindset as 2017 kicks off. And that mindset is pretty positive, according to survey recipients. People plan to hire more staff. They plan to invest more in their business. And though I didn’t take the survey, I agree with the 67% of people who think that business tax reform should be the administration’s top priority this year. As a small business owner myself (there are only three of us here), I still get quite clobbered by taxes and would love the ability to continue thriving as an owner in coming years.

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Sponsored – Staples Back to Business Survey Finds Small Business Owners Are Ready to Rock in 2017

Top Challenges Facing U.S. Small Businesses in 2017 [Infographic]

WaspBarcode has published their annual State of Small Business Report for 2017. This is their third annual survey analysis of over 1,100 small business owners and executive leaders across a number of fields. See the full report with visuals at the link above.

Small businesses are more optimistic going into 2017 and expanding hiring and marketing spend. I am highlighting the above image from their research because businesses are making their plans now.

52% of small businesses plan to hire in 2017Click To Tweet

I find it interesting that hiring new employees ranked above increasing profit, employee healthcare and growing revenue. This could indicate a shortage of digital marketing experts or workers with other specialized skills. I wish we had more details about what kind of new employees they are concerned about.

See the State of Small Business Report highlights in the infographic below and extensive details in the full report. Click To Tweet

Topics covered by their research include:

• Revenue Expectations for 2017
• Strategies to Improve Revenue Growth
• Employee and Staffing Plans
• How much they invest in marketing and where they spend it
• Inventory and Asset Management

Annual WaspBarcode State of Small Business Report 2017 [Infographic]

State of Small Business Infographic Highlights:

Revenue Growth

• 69% of SMBs predict revenue growth during 2017
• 31% of SMBs predict revenue growth of 1-4%
• 26% of SMBs predict revenue growth of 5-10%
• 12% of SMBs predict revenue growth of 11% or more

Confidence in the 2017 Economy

• 42% of companies with 11-50 employees believe the economy is better now than in 2016
• 39% of companies with 51-100 employees believe this
• 47% of the largest small businesses with 101-500 employees are confident in the 2017 economy

Top Strategies to Drive Growth

40% improve customer experience and retention
36% launch new products or services
32% invest in new customer acquisition
30% expand into new markets

Who’s hiring?

52% of all SMBs plan to hire in 2017
57% plan to hire 1-5 employees
39% plan to hire 6 or more employees

IT Spending in 2016

42% of all smbs plan to increase IT spending
36% of companies with 5-10 employees plan IT spending increases
42% of businesses with 11-50 employees
54% of businesses with 51-100 employees
49% of businesses with 101-499 employees

IT Priorities

29% upgrade wireless infrastructure
33% upgrade network
33% upgrade server infrastructure
37% upgrade network security
38% replace computer hardware

Their full research is worth reviewing. You can see their post summarizing the report and review the full report here. There is no cost and you don’t have to provide any personal information.

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Top Challenges Facing U.S. Small Businesses in 2017 [Infographic]

Credit Card Fraud, Now Serving Small Business

This is the first of a 2 part series on common but under-reported and often unknown types of fraud that many merchants experience. Part 1 will consist of specific example scenarios and types of fraud that merchants experience often without knowing it. Part 2 will consist of ways to prevent, minimize, and identify types of fraud that may be occurring.

Credit card fraud gets talked about a lot, but most of the time the focus moves to card holder protection or a large data breach.  We hear little about the credit card scams that fraudster’s use against the small business owner because it’s hard to sensationalize one business who had a little bit of fraud. In this article we are going to go over some common approaches fraudsters use to go after business and ways your company can protect itself.

Pre-authorized transactions

If I hear about a card holder telling a merchant that they called their bank and got prior approval for a large transaction it immediately sets off my internal fraud alarm. For many people, this statement makes sense, we have all had one of our cards turned down for a completely legitimate transaction, so why wouldn’t a card holder call their issuer if they know they are about to process an abnormally large transaction. Also as a small business owner, a large sale can be a great thing and so it’s easy to get enticed by the sale and want to comply with the customer to make sure it happens.

Whatever you do, don’t take an authorization code from anyone other than your processor.  EVER!!!

I can’t stress this enough, EVER!  You need to control how the authorization code is obtained. Normally your point of sale (POS) transparently takes care of this for you during the transaction process, and rarely, you may need to contact your processor’s voice authorization system for approval. In both of these scenarios there is an electronic trail from your merchant account, through your processor, to the card issuer and back again.  An authorization code will not be valid unless there is a trail connecting your sale to the authorization code.  I also want to highlight that if you call the number on the back of the credit card they should not ever issue approval codes to you. The only authorization code you should ever trust is one obtained through your credit card terminal or POS system or if you call into “your” processor and obtain one over the phone.

So what do you do when presented with this scenario?

Taking any form of payment at this point is a likely business risk. I strongly advise you only accept cash from that customer if anything at all. You can simply tell the customer that your store policy states all authorizations have to come electronically from the terminal/POS (this should be your policy anyway). If you do decide to accept a credit card for the transaction and process it in a normal manner, there is still a measurable chance that the customer is still trying to defraud you. Know that there will be a substantially increased chance of receiving a chargeback. At the very least, make absolutely sure that the customer is the person who’s name is on the card and make sure to swipe the card through your terminal, get a signed receipt, and make sure it matches the signature on their card if there is a legible one. This is such a red flag for a deliberate fraud attempt, it would usually be appropriate to simply turn you customer out the door. The chances are better than not they are attempting to defraud you.

I need to return this

How often do you have a customer who wants to do a return for a refund?  If the original purchase was made on a credit or debit card, without using a PIN number, then you should only refund to the card that was used to make the purchase.  I hear from merchants quite regularly about someone coming to do a return but want cash instead of a credit to their card.  Many times the customer says they just don’t have the card on them, or that it was a gift and if it gets refund to the card, then the cardholder will know their gift was returned. The unfortunate truth is sometimes you get this request its coming from a fraudster.

It’s a simple scam, the merchant takes back the product, gives the customer their cash refund, and the customer then calls their card issuer and disputes the charge saying the business refused to give them a refund. Of course the business will receive the chargeback notice, and respond that they gave a full cash refund, but there won’t be any electronic proof for that refund. The card issuer is basically forced to side with the card holder and the merchant will usually lose. It will then be on the merchant to take legal action against the fraudster. To make matters worse, the merchant’s loss is essentially twice the sale amount. They lose the chargeback, and they lose the money they gave for the refund.

This scenario only applies to credit based transactions.  When you run a PIN debit transaction things are a little different.  Some processors will allow you to do a debit return, however you are going to have to swipe the original card, and the customer will need to re-enter their PIN number to complete the transaction.  Alternately as long as the card has a Visa, MasterCard, Discover, or Amex logo you can do you a normal credit return, without needing the card or the cardholder present.  If the card does not have a major card brand logo on it, you only remaining option is a cash refund.  Keep in mind that card holders can still dispute a PIN debit transaction, however it’s much more difficult.

To hedge your risk, you can offer an in-store credit to the customer. This allows the business to retain the money from the original purchase so if there is a dispute you are not losing a return and chargeback.  If the card holder has not used their in-store credit you can revoke it or any remaining portion.  Unfortunately if they used all of their remaining credit you will have lost the chargeback and a product, however your hard cost on that product will hopefully be less than having issued them a refund and paying for a chargeback.

A really large order

Let’s say you have a small hardware store, and you have a customer walk in and say I need 5,000 chainsaws. Your first thought might be something along the lines of “Cha Ching!”, and sometimes the idea of such a large sale clouds your vision as you have a quick dream of the vacation you will finally take when all that money comes in. Well come back down to earth and get your guard up as this should be the Chernobyl of red flags.
You need to start asking yourself some questions like the following, and try to look at them as an unbiased third party.  Here are just a few quick examples.

• Why does this guy need 5,000 chainsaws?  This is an abnormal purchase for just about anyone.
• In your experience does anything feel off about this customer?  Let your gut feel be your guide.
• Do they seem to care about price?  When people buy in bulk they expect the price to drop, if they don’t, something probably is not right.  If they don’t even ask about price, or are willing to pay a premium, it’s even more of a red flag.
• Why is he/she wanting to buy them from me?  This can be a hard question to not show your bias.
• Are there more oblivious, easier, cheaper, etc. ways for this customer to obtain what they want?   This is more of an extension of the previous question.
• Can my business survive if this sales turns out to be fraud?  Make sure you don’t take on more risk than your business can handle.
• Are they asking for the quickest shipping method possible?
• Are they shipping to a forwarding or foreign address?
• If I were going to legitimately purchase 5,000 chainsaws as a consumer, is this the way I would do it?

Admittedly this example sounds to be on the ridiculous side of things, but this actually happened to a small hardware store. Things that sounds too good to be true usually are. These questions will help keep a realistic view of the situation, and will give ideas as to what questions you want the customer to answer.  If you are not comfortable with the situation you should probably not continue with the sale, or if you do, make sure you only accept cash or equivalent method that protects you from later disputes. I have seen businesses that refused to take this advice, and accepted credit card payment even after being specifically told by their processor not to. Sometimes the loss to the business is so bad, they had to close their doors after their transactions charged back.

Stay tuned for the next edition where we further discuss how to identify, prevent, and minimize the losses from certain types of retail fraud.

The Merchant Account Blog

Credit Card Fraud, Now Serving Small Business

Enter to Win $50 Amazon Gift Card: United Healthcare Is the Easy Choice for Small Businesses #ad

See details on how to enter for a chance to win a $ 50 Amazon Gift Card at the end of this post.

Unfortunately, my birthday is right at the end of January. Twenty-five days after the Affordable Care Act was implemented, I turned 26. I therefore became too old under the new law to be covered through my parents.

I was 25 when Obamacare went into effect. I had been off my parents’ health insurance plan for some time and had already had some adventures in trying to find affordable coverage on my own.

Finding affordable health insurance has been a consistent frustration of my adult life. I have only had one job that provided coverage for me, and my employer only offered it for a short time. Consequently, a job that pays a decent wage while also offering health insurance would be extremely attractive to me, as it would be to many job applicants.

In fact, a recent LinkedIn survey found that one of the primary reasons why people leave their jobs is dissatisfaction with pay and benefits. Given this situation, it’s in the interest of any organization to do what it can to offer its employees affordable health coverage. And one insurance company making it easier for small businesses to do just that is United Healthcare.

A New and Simpler Way to Shop for Health Insurance

United Healthcare has created a new site particularly suited to the needs of small businesses. Instead of going through the hassle of talking to an associate on the phone or sifting through piles of paperwork, businesses with 2 to 50 employees can shop for healthcare coverage online. Through the site’s self-service system, you as a business owner can easily evaluate various plans and quotes. Rather than merely looking at estimates, you’ll be able to see the actual prices you will be paying based on the information you enter. In turn, your employees will be able to choose from multiple healthcare options, and in some cases, from as many as 27 different plans.

Getting Started

When you first access the site, you will get an overview of what the entire process will be like. Then you will enter your ZIP code, as well as the number of employees you will be covering, including yourself. Your next step is selecting the options you want to provide for your employees. You can determine the coverage you want to offer based upon a variety of factors, including cost. Once you select your plans, your employees will be able to choose which ones are best for them.

This flexibility is extremely helpful since some employees will need to cover spouses and dependents, while others will not. The setup also provides for people who have health issues that are more demanding than those of their coworkers.

Preview Your Actual Expenses

One of the most helpful features of United Healthcare’s new site is that you can calculate your actual costs before purchasing or even signing up for an account. When you begin evaluating your choices, you’ll input your employee information, either manually or by importing it from another application, such as Excel, QuickBooks, or Xero.

At this point in the process, you can create an account if you wish or wait to do so until later. Once you’ve entered your employee data, you can then view your cost per employee. That will help you determine the amount you want to budget for each one. You can set the amount you wish to pay for each employee as a fixed dollar amount or as a percentage of the total cost. Do note that this option depends on the state in which your business resides. United Healthcare enables you to view a couple different breakdowns of your expenses. You’ll be able to see the total fixed amount you will be spending on health insurance each month. You’ll also be able to see the total range your employees will be spending, depending on the plans they choose.

On the other hand,  you can also see what you’ll be paying per person, in addition to what each individual will pay based upon his or her plan choice. And if you realize you need to make adjustments to any of your information, you have the ability to go back and do so until you come up with the budget and plans that work best for your situation. You will need to create an account at this point if you have not done so yet, after which you will be able to view a diagram that lays out all of the details of your package. Then all you need to do is fill in the necessary information to check out and pay.

Assistance and More Customization

If you need assistance at any point, there are links throughout the shopping process to help you. There is also a “Contact Coverage Advisor” button at the top right corner of the webpage. Once you have completed your purchase, your employees will be able to easily choose health plans tailored to their needs.

They will also have access to videos and how-tos that will make the shopping process simpler for them. What’s more, in December United will roll out a feature that will make the system even more customized.

With this addition, when employees log in to evaluate their healthcare options, they will answer questions about their lifestyles and personas. Their answers to those questions will help them to select coverage best suited to their unique situations.

Where Can You Take Advantage of the New Site?

United Healthcare’s new site is currently available in the following 15 states:

• Arkansas
• California
• Florida
• Illinois
• Indiana
• Kentucky
• Maryland
• Michigan
• North Carolina
• Ohio
• Pennsylvania
• Tennessee
• Virginia
• West Virginia
• Wisconsin

The company plans to increase the site’s availability throughout the country in 2017.

Self-Service at Its Finest

Everyone is busy and, truth be told, most people are not overly excited about shopping for health insurance. For this reason, it’s highly beneficial to have a resource that provides an excellent user experience and makes shopping for insurance as simple and convenient as possible.

With this in mind, check out Enter to Win $50 Amazon Gift Card: United Healthcare Is the Easy Choice for Small Businesses #ad