Start by understanding what your customers and prospects are worried about so you can tailor your marketing message accordingly:

• A Gallup poll conducted last month reports that for consumers with incomes under $24,000, the costs of food and energy were the biggest concerns (cited by 81 and 80 percent, respectively), with healthcare costs (70 percent) and taxes (67 percent) close behind. Lower-income and middle-income consumers are being hit hard by the expiration of the payroll tax cuts in January, which cut about $1,000 in take-home pay from someone making $50,000.
• Upper-income consumers (with incomes of $90,000 and up) were more likely than lower-income consumers to be worried about longer-term issues such as taxes (cited by 79 percent) and the federal debt ceiling (66 percent).
• If you’re a B2B business selling to small business owners, know that they’re worried about the same costs consumers are. A recent Wells Fargo/Gallup Small Business Index survey found small business owners say taxes, energy costs and healthcare costs are hurting their businesses more than anything else.

So what kinds of marketing approaches will resonate with each of these groups?

Lower and middle-income consumers are worried about the short term. Their paychecks just got smaller while their cost of living is rising. As a result, they’ll be responsive to marketing that offers:

• Immediate discounts. Draw them in with sales, coupons, stock-up-and-save specials or two-for-one offers.
• The ability to stretch a dollar. Position your business as an advocate, helping them save for what’s important to their households. That could include offering flexible payment plans or layaway programs to help them afford bigger purchases.
• Understanding. Emotion is important in purchasing decisions. Your marketing should appeal to these customers’ desire to provide for their families, treat themselves and have fun without breaking the bank.

While upper-income consumers have some of the same short-term concerns, they are more focused on long-term issues such as how taxes and government regulations will affect their future income and savings. As a result, they’ll be responsive to marketing that offers:

• Flexibility. Upper-income consumers want to splurge when they can, but to do this they also need to save when possible. The three-tiered pricing strategy works well with this group. Develop a silver, gold and platinum package in the low, mid-priced and high-end range. Often, customers who might normally go for the lower price will be more open to buying a midrange package when there’s a higher-priced option, because they feel like they’re still saving money.
• Value. Your product or service doesn’t need to be rock-bottom priced if you can convey its ultimate value. In other words, is what you sell worth the cost because it saves time, saves money in the long run or will last 20 years?
• Understanding. For this group, focus on the longer-term benefits your product or service offers, such as how it protects their investments in their homes, helps them become better at their jobs so they have more job security, or helps them create lasting family memories.
  

  About the Author

  Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She’s been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

For many businesses, the biggest obstacle to growth isn’t poor sales, financing or tough competition; it’s often the business itself!

So, if you find yourself operationally ill prepared to grow, what can you do about it? Here are some strategies that can help you break through some of the common barriers to growth that many small businesses experience.

1. Watch the indicators for growth

Before you embark on any growth strategy, step back and take a look at some key business indicators to help you decide whether you are actually ready for growth!

Are you successful in a current market and want to open a new location? Are you about to clinch a big sales deal? Is your sales pipeline full? Is product development success opening the door to new opportunities?

These are all important indicators that will drive growth and should be constantly monitored to ensure you are able to effectively prepare for that growth. Study your pipeline, conversion rates and market trends in dashboard form every day.

2. Keep one eye on your competition, but always think big picture

Underpinning any growth strategy should be a deep knowledge of where you stand against your competition. A simple SWOT analysis, reviewed quarterly, can help you determine where you fit in relation to your competitors and areas of opportunity to exploit your strengths and their weaknesses. Likewise, it will give you a good view of any threats to your growth and guide you towards developing a plan to fix or compensate for these.

Then take a look at your market – your potential customers. Do some market analysis to find out how your customers view your business and what they see in the competition that would make them buy from them instead of you.

Look for ways to differentiate yourself – how does your competition position itself in the marketplace relative to your business? How does your business/product/service contrast with theirs? Why would a customer buy from you and not them? The answers to these questions will help you see your strengths, exploit market opportunities, and execute a tactical plan to get ahead in areas that you don’t measure up to the competition.

3. Always be recruiting talent

Setting the stage for growth has to involve superstar employees. Even if you can’t afford to right now – keep looking for talent and bring them on part-time or on a contract or hourly basis. Another option that can help guide your growth is to work with an organization like SCORE. SCORE provides free business mentoring services and can partner you with someone with business management experience to help you steer your business on a path to growth. Whether you need help across the entire business, or are looking for help with functions such as business planning or marketing, SCORE can pair you with a mentor for free.

Get more tips in 6 Options for Staffing your Growing Business.

4. Constantly assess risk

If there’s one thing being a manager or business owner teaches us all, it’s that we must always anticipate and manage risk. Look ahead—what variables could occur that might compromise or damage your growth plans? These could be supply chain issues, hiring and training problems, competitive activity, cash flow, or patent infringements. Include these in your SWOT analysis and develop a plan to prevent or manage any issues.

5. The bottom line

If there’s a common thread here, it’s the importance of being prepared. This, of course, means having a plan. Never embark on a growth strategy without a plan. It doesn’t have to be encyclopedic, but it should contain the key elements discussed above.  Break your plan down into chunks – have one strategic plan that contains your market findings and helps inform where you are and where you want to be. Then assemble smaller plans. For example, have a day-to-day operations plan, a hiring plan and a marketing plan, each of which lay out the tactics for using your business resources to accomplish your strategy.

If you don’t have a business plan, check out SBA’s Build your Business Plan Tool. This step-by-step online tool guides you through the process of creating an actionable plan.

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

The following are common questions that small business owners have about SBA loan programs and the loan application process.

1. How do SBA loans work?

While the SBA does offer numerous loan programs to help small business owners finance their businesses, it doesn’t actually lend businesses the money. Instead, a bank makes the loan, which is backed by the SBA. This allows the bank to take a little more risk than they otherwise might.

So this means that if you are seeking a business loan and don’t qualify for a traditional bank loan, perhaps because you don’t have the collateral or years in business to justify the loan, the government can help – although you still need to work primarily with a bank.

2. Who makes the decision that an SBA loan is right for my business?

If you’ve been turned down for a traditional bank loan, or are curious about SBA loan programs, where should you start? Should you go to the bank and ask for an SBA loan, or would they instinctively guide you towards one?

While your local SBA district office can help explain the available loan programs and determine your eligibility for them, you’ll need to find a local SBA lender to kick-start the application process. These banks and financial institutions can help you determine which loan program might be right for you, whether it’s a traditional bank loan or an SBA-backed loan. They are also your point of contact for processing your loan application.

3. How do I determine which SBA loan is right for me?

The SBA offers numerous loan programs depending on your business profile, financing needs, growth plans and so on. There are a number of ways to identify the right loan program for your business.

If you are in the early stages of exploring your financing options, check out the SBA’s Online Loans and Grants Search Tool. Answer a few quick questions about your business and the tool will suggest government financing programs for which you might qualify.

Once you’ve done your research, consult your local SBA District Office and ask them to steer you towards a few SBA lenders in your area so that you can be sure you’re getting the right loan program for your business – and the right bank!

4. How should I prepare for my meeting with the bank?

Preparation is key and it’s important to understand some of the criteria that might influence your eligibility for an SBA loan. These include credit factors – such as making timely debt payments (payment on existing credit relationships, both business and personal, is considered an indicator of your ability to repay a loan), cash flow projections and your debt-to-worth ratio. Collateral and working capital are other factors that may impact eligibility.

SBA offers guidance on all the factors that lenders look at here.

You’ll also need to ensure you are in good standing with your state treasury and the IRS (i.e., you’ve paid all taxes owed).

And don’t forget the most important document – your business plan with at least three years of financial projections; a view of what you’ll do with the proceeds of the loan; and solid proof that you know your industry and target market. This is particularly important for start-ups that don’t have a financial history. The bank will base its decision on your industry experience and future plans.

If you don’t have a business plan, check out SBA’s Build your Business Plan Tool – a step-by-step guide to help you get started. You can save the plan as you go and download it when you’re done.

5. What do I need to complete my SBA loan application?

An incomplete loan application won’t do you any favors with the bank and could slow down the entire loan process. Familiarize yourself in advance with the key components of the loan application – from the right forms, to the necessary background information. Refer to this SBA Loan Application Checklist to ensure you have all your i’s dotted and t’s crossed. SBA also offers a free online training course: How to Prepare a Loan Package.

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

This blog covers one of the most common myths we’ve seen out there: All businesses will be required to provide health insurance to all of their employees.

Fact: Employers are not required to provide coverage to their employees under the Affordable Care Act.  However, starting in 2014, some businesses that do not offer health coverage to their full-time employees may be subject to a shared responsibility payment under the health care law.

How do I know if I may be subject to an Employer Shared Responsibility Payment?

Businesses with 50 or more full-time or full-time equivalent (FTE) employees that do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees (and dependent children under the age of 26 starting in 2015) may be subject to a shared responsibility payment if at least one of their full-time employees receives a premium tax credit in an Affordable Insurance Exchange, or Marketplace.   For the purposes of these provisions, a full-time employee is one who is employed an average of at least 30 hours per week.

Businesses will not be affected by these provisions if they already offer affordable health coverage that provides a minimum level of coverage to their full-time employees, which is the vast majority of these businesses.

Businesses with fewer than 50 full-time or FTE employees are generally not affected by these provisions.  However, it’s important to know that if companies have a common owner or are otherwise related, their total combined number of employees is used to determine whether each separate company is subject to these provisions — even if none of the member companies individually employ 50 or more full-time or FTE employees.

How can I find out if I meet the threshold number of 50 or more full-time or FTE employees?

To assist employers, the IRS has developed a helpful set of Q&As on the Employer Shared Responsibility provisions. The IRS has also issued a set of proposed rules relating to the Employer Shared Responsibility provisions, and is accepting written or electronic comments by or before March 18, 2013.

Honesty is the best policy. Adopting an attitude of being clear and upfront has many benefits in life, from reduced stress to better relationships, but it can also be valuable in your business and key to converting leads into real customers. SCORE mentors will tell you that developing an open and honest relationship with your leads is important for several reasons:

- Honesty creates trust. If a lead feels comfortable sharing their needs and concerns, you can address them directly. – An honest dialogue will determine if your business is well suited for addressing their needs. – When choosing from multiple providers, a lead will choose the one that makes them feel most comfortable and capable of fulfilling their needs.

If you are able to honestly communicate your business’ capability to the leads, it brings you much closer to closing the sale and gaining a customer. Converting leads into sales is really about being a good match for client needs and effectively communicating that pairing. Here are some tips for effectively communicating your business to your potential customer:

KNOW YOUR COMPETITION AND KNOW WHERE YOU STAND If you’ve positioned your business correctly, then you offer something different than your competitors. But it’s important to stay on top of how your competitors are changing and evolving their products and services. Check out their websites, follow them on social media and stop by their retail location. This will allow you to communicate your uniqueness to your customers in an informative way.

SEE WHAT YOUR CUSTOMERS SEE Remember – you are a consumer too. Put yourself in your customers’ shoes and think about things like “What’s the first thing I would want to see upon walking into a specific business?” If you’re having trouble seeing from that perspective because you are too close to your business, ask your friends, family and colleagues for their opinions.

TAKE ONE STEP FURTHER If you’ve effectively communicated your business to a lead and their needs align with what you can offer—but they are still hesitant, you must nurture that lead. If this is your first time in sales, and for many small business owners it is, this can be an uncomfortable proposition. Think of lead nurturing efforts as friendly reminders. Here are some tactics for lead nurturing. See which works best for your customer base and your personality. 1. Be concerned 2. Be persistent 3. Remind of benefits

GET FEEDBACK It is crucial to take stock of how your lead conversion efforts are working and modify as necessary. Solicit feedback from both successful and unsuccessful conversions to see what you’re doing right and where there’s room for improvement. For unsuccessful conversions, ask questions like, “Did we effectively communicate how we could meet your needs?” and “What caused you to choose another provider for this product/service?” For successful conversions, ask questions like, “What made you choose our business as your product/service provider?”

As with most things in life, honesty about you and your business is the best policy.

But how can you ensure your existing customers move with you and how can you go about attracting new customers to your new location? Here are six tips:

1. Communicate Pre-Move and Post-Move

First, be sure to use every available touch point to communicate with existing customers about your impending move—and well in advance. Utilize e-mail lists, your website, direct mail, flyers, blog, social media, advertising, press releases, in-store signage—the works. Be sure to include directions, information about what else is going on in that neighborhood and, if your move is for positive reasons, be bold and share those details. For example, if you are expanding, include a message that thanks your customers for their patronage and stresses your commitment to providing top notch service.

If you haven’t been keeping a record of your customer emails and mailing addresses, use the news media and other avenues (see below) to spread the word about your move.

Don’t forget to leave flyers with your neighbors after you’ve moved and request that they display them in their windows or at the point of sale.

2. Update Your Online Listings

Search engines are increasingly locally-centric in their search results. For example, if you enter “Italian restaurant” into a Google search, it will automatically display local businesses in your area first. So update (or create if you don’t have them) your online listings, whether they are on Google+ Local, Yelp, Yellow Pages, Facebook, Trip Advisor or others. And, of course, don’t forget to update your own website “Contact Us”, “About Us” or “Find Us” page.

3. Use Location-Based Services to Attract Passersby

Don’t forget to take advantage of mobile technology. Promoting your small business to passersby using mobile apps that target consumers in the vicinity of your business isn’t that difficult. Groupon, Living Social, FourSquare and ThinkNear, among others, let you post information about your latest offers and limited-time deals to consumers within a certain distance of your business. You can also schedule deals to get delivered during key hours—for example, if you’re looking to boost foot traffic during off-peak times.

4. Give Existing Customers an Incentive to Visit You at Your New Location

Your customers are your livelihood, treat them that way. Offer them incentives to stop by your new location. Make sure the offer is time-bound so they have a reason to check out your new digs soon!

5. Host an Event to Attract New and Existing Customers

Give customers a reason to fall in love with your store—not just for its products, but as a place to get together. Retail stores, bars, restaurants and other food service businesses, in particular, can benefit from hosting events. These can be educational in nature (bring in a guest speaker from a vendor or supplier if you don’t have much to say yourself) or appreciation events (offer a sneak preview of your new location to your top customers). Events can also be tied to themes (date night or wine night) or holidays.

6. Don’t Forget Customers That May Not Have Checked You Out for a While

Your new location might be more convenient to some of your older customers. So consider running a campaign that targets not only your active customer base, but those who may not have purchased from you in a while. Special offers or other incentives specifically targeted at that group and paired with a, “we’d love to see you again,” message may just do the trick.

“For those Americans dealing with long-term unemployment or a lack of growth opportunities in their current jobs, franchise ownership offers a viable way to be in business for yourself, but not by yourself,” said IFA President & CEO Steve Caldeira.

The Franchise Industry Tackles the Credit Crunch Head-on

Despite these indicators, financing remains a problem for potential franchise owners.  According to Entrepreneur magazine (January 2013), there’s still an 18 percent lending shortfall in the franchising industry. In a bid to boost franchise ownership, many franchisors are taking matters into their own hands and offering financing programs of their own. Meineke, The UPS Store, Gold’s Gym, Masasge Envy and Instant Imprints are just a few examples of franchisors now offering financing to qualifying first-time and multi-store franchise owners.

Want to know more? IFA President and CEO, Steve Caldeira offers the following tips (courtesy of Entrepreneur magazine) to would-be or existing franchise owners looking for an alternative to traditional financing options.

Which Franchisors Are Offering Financing Programs?

Approximately 75 to 100 franchisors are offering or working on offering creative financing programs for start-up franchise owners or those looking to expand. Programs range from zero-percent financing for a limited-term, lower license fees, reduced royalties and minority stake ownership by franchisors in multi-unit outlets. Each brand has its own offering, so down payments and collateral requirements will vary.

In addition, the franchise industry is also experiencing a growth in companies dedicated to helping franchise owners secure financing. Two such firms are BoeFly (which matches borrowers to lenders online) and Franchise America Finance (who provides custom lending solutions for franchisees and works with franchisors such as The UPS Store, Popeyes, and Jersey Mike’s).

Always Do Your Franchise and Financing Due Diligence

If you are new to franchise ownership, be sure to do your research and due diligence about the franchise system you’re interested in (get tips on that process here). Study the Franchise Disclosure Document (required by law) and speak to other franchisees about the brand and the financing program on offer. Next, try to understand what your financial responsibilities as a franchise owner will be. This blog offers some pointers on this: Buying a Franchise – How to Determine What it’s Going to Cost You.

Other Franchise Financing Options

Many banks and credit unions offer financing for franchise purchases, so be sure to compare any franchisor lending rates and terms with these. When you approach a bank, be prepared to disclose all your financial information. While your credit rating is important, you’ll also need to provide a personal financial statement, copies of tax returns and information about the source of your down payment funds.

You should also be aware that your choice of franchise will influence a bank’s decision to fund you. Franchises with strong brand names, a track record of consistent profits and cash flow—plus an ability to perform well across a variety of diverse locations—are going to stand you in good stead when you meet with your bank manager.

If your bank is hesitant about a particular franchise system’s performance, or your finances aren’t as strong as they could be, you might want to consider an SBA loan. SBA doesn’t lend to business owners directly; it provides a repayment guarantee to banks and lenders for money they lend to small businesses, making it less risky for the banks. Use this search tool to find the right SBA loan for you.

New Options for Health Coverage through the Affordable Insurance Marketplaces

Under the Affordable Care Act, self-employed business owners now have more options than ever to find affordable health coverage.  Beginning in January 2014, self-employed individuals and other consumers will be able to purchase their insurance through new Health Insurance Marketplaces (also referred to as Exchanges).

Health insurance plans offered in these new insurance Marketplaces will offer a core package of benefits, known as “essential health benefits.”  The plans may vary according to the percentage of costs the health plan covers, or “metal levels”: 60 percent for a bronze plan, 70 percent for a silver plan, 80 percent for a gold plan, and 90 percent coverage for a platinum plan. Issuers may offer catastrophic-only coverage, which includes free prevention and several primary care visits, to young adults among others.

Self-employed individuals may qualify for premium tax credits and cost-sharing reductions on a sliding scale, based on income, to purchase coverage in the Marketplace. Increased access to quality, affordable health care will make it easier for potential entrepreneurs to go out on their own instead of staying at larger firms simply because of “job lock” or the lack of access to affordable insurance outside of work.

For more information on individual tax credits offered through the Marketplaces and to stay connected with the latest information visit healthcare.gov.

Find Insurance Options Today

To find an insurance plan that meets your needs today, check out the U.S. Department of Health and Human Services (HHS) insurance finder tool.  By answering just a few simple questions, you’ll be able to locate health insurance plans in your state and explore whether there are local facilities in your area that provide free or reduced-cost health care.

To learn more about health insurance available to self-employed individuals, visit healthcare.gov. 

New Insurance Coverage Requirements: Individual Shared Responsibility

The Individual Shared Responsibility provisions of the Affordable Care Act call for each individual, beginning in 2014, to have:

• Basic health insurance coverage (known as minimum essential coverage) for each month,
• Qualify for an exemption, or
• Make an Individual Shared Responsibility payment when filing a federal income tax return starting in 2015. 

Minimum essential coverage includes employer-sponsored coverage, coverage purchased in the individual market, Medicare, Medicaid coverage, Children’s Health Insurance Program (CHIP) coverage, veteran’s health coverage, TRICARE, and others as identified by the U.S. Department of Health and Human Services.

Individuals will not have to make a payment under the Individual Shared Responsibility provisions if:

• Coverage is unaffordable
• They spend less than three consecutive months without coverage
• They qualify for an exemption for several other reasons, including hardship and religious beliefs.

To learn what  Individual Shared Responsibility requirements and exemptions may apply to you, refer to this Fact Sheet from the U.S. Department of Treasury, as well as these helpful Q&As from the Internal Revenue Service, or consult with your tax professional.

For more information about other provisions affecting self-employed business owners under the Affordable Care Act, go to sba.gov/healthcare.

However, there are instances where a lender will require a personal credit check as part of the overall risk assessment. In these cases, it is in the best interest of you, the business owner, to have a positive credit rating with the consumer credit agencies.

If credit scores currently fall below 680, then focus on taking positive steps to improving those numbers.

With good fico scores, you have a much greater selection of funding options to choose from. Even if a lender is allowed to check a credit rating, once approved, the creditor may only report the debt and payment history to the company’s credit files – not the files of the owners.

If you decide to apply for business credit with a lender who requires a personal credit check, you should know what the scores are beforehand.

FICO is the most widely used credit scoring system in the world. The majority of lenders will use this system to obtain scores to determine the credit risk of an individual. Each score is based on the information that each consumer credit agency keeps on record.

First, you should visit the MyFico website and determine his Transunion and Equifax credit scores. They will provide a detailed explanation on the positive and negative factors affecting the scores.

Secondly, order the credit score from Experian at the main website. Currently, Experian offers a credit report and credit score that includes a breakdown of factors that raise and lower scores.

Once you receive your scores and reports, you should look for any errors, inaccuracies or outdated information. If any questionable items are uncovered with any of the reports, then initiate a dispute n immediately with the agency containing the errors.

• For Equifax – Go to Equifax.com and click on the “Dispute Errors on My Report” text link. You can initiate a dispute online, but you will need to supply a confirmation number that can be found on your Equifax credit report.
• For Transunion – Go to Transunion.com and click on the “Credit Disputes, Alerts & Freezes” tab. You will need to create an account first, but once you log in you will be able to initiate a dispute, check your dispute status and trigger a credit freeze if needed.
• For Experian – Go to Experian.com and click on the “Disputes” text link located at the bottom of the page. You will need a report number that can be found on your Experian credit report. On this site, you can start a new dispute, check the status of an existing dispute and view results of a completed dispute.

It is vital to monitor personal credit and ensure all information being reported is accurate and up to date. Just one mistake can impact credit scores and cost hundreds, if not thousands, of dollars in additional payments and interest that a business owner should not be paying.

About the Author

Marco Carbajo is CEO of the Business Credit Insiders Circle (www.businesscreditblogger.com), a step-by-step business credit building system providing lines of credit, trade credit and funding sources.

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