14 Things Entrepreneurs Need to Know
By Rieva Lesonsky
1—Are You Stuck in a Rut?
It’s so easy for small business owners to get stuck. But all too often we’re not even aware we’re stuck. Here are 11 signs you’re stuck in a rut and tips for (as my friend Barry Moltz says) getting unstuck from NetCredit.
2—Are SMBs Still Optimistic?
While SMB CEO optimism declined slightly from its decade-high at the end of 2017, according to the Q1 2018 Vistage CEO Confidence Index, CEOs of SMBs are “optimistic about their future financial prospects and plan to invest and hire more this year.” (The CEOs were also a little more optimistic in Q1 of 2017.)
Why the dip? Dr. Richard Curtin, director of research at the University of Michigan, who analyzed the data, says, “Some [CEOs] have moderated their expectations for the national economy’s growth this year, which is why their confidence dipped slightly this quarter compared to last quarter.” But, despite this, the CEOS are “bullish” about their own 2018 outlook. As Vistage Chief Research Officer Joe Galvin points out, “The majority of CEOs plan to hire next year, and they are responding to the talent shortage by investing in employee training, wages, and benefits.”
There’s lots more information in the infographic below.
3—How SMBs Can Stay Cybersafe
Jessica Ortega, Product Marketing Specialist and Technical Writer of small business website security firm SiteLock, attended last week’s RSA conference, a conference mostly for security professionals at large enterprises. But she uncovered some relevant information for SMBs, which she shares below.
Q: RSA is targeted toward large companies. What tactics from RSA can small business owners use in their everyday operations?
Jessica Ortega: It’s true that RSA primarily targets large enterprise companies, but the lessons learned at the conference are important for businesses of all shapes and sizes. One of the key takeaways from RSA is that security is a 24/7/365 job and businesses must be vigilant with their proactive security practices. Ongoing security awareness training for employees, leveraging a website security solution, and protecting your internet connected devices are all strategies that SMB owners can implement to protect themselves as well.
Q: What are the most common attacks faced by SMB websites and how can they prepare for them?
Ortega: There are several types of attacks that are becoming increasingly common against SMB websites including:
- Ransomware: Ransomware is a cyberattack that deletes or encrypts key website or local files and requests a fee to get the information back. It is becoming alarmingly common for small business websites to be the target of these types of cyberattacks. In order to prepare and protect yourself from a ransomware attack, it is recommended you implement a backup plan. Full and incremental backups of all integral website and customer files should be backed up in at least 3 locations: local, cloud storage, and on physical media. In the event you are the target of a ransomware attack, you will not need to pay the fee. You can wipe and restore your content on the fly.
- Malware Infections: Recent SiteLock data reveals the average website is attacked 44 times per day. Many of these attacks have the goal of infecting websites and their visitors with various types of malware ranging from phishing kits to backdoor files. Malware is becoming more stealthy and sophisticated by the day, requiring constant vigilance to protect your website from it. In order to prepare for malware infections, it is recommended all websites have a malware scanner in place, scanning for malicious content daily. We personally recommend using a malware scanner capable of automatically removing malicious files to mitigate the impact any infection may have on your business.
- DDoS Attacks: Distributed Denial of Service (DDoS) attacks have been a thorn in the side of small business websites for years and that threat isn’t going anywhere. DDoS attacks are comprised of automated floods of traffic designed to slow or crash the target website. These attacks are particularly alarming because Google recently found that 53% of customers will leave a website if it takes longer than 3 seconds to load. Web Application Firewalls (WAFs) are important in preventing and preparing for a DDoS attack. We recommend choosing a WAF that offers specific mitigation for DDoS attacks.
Q: Are there privacy issues relating to emerging technologies that create vulnerabilities for SMB owners?
Ortega: As the Internet of Things (IoT) continues to evolve, it will become inevitable that small businesses will venture into automation and internet connected devices to make their businesses more efficient. Many connected devices use default passwords and wake words that leave them vulnerable to compromise. It is important for small businesses to take precautions when incorporating IoT devices into their businesses, by ensuring they’re patched and password protected.
Q: How can SMB owners create a viable website security strategy?
Ortega: Website security is a critical part of any small business budget, but it doesn’t have to be expensive or intimidating. Every SMB should have a formal incident response plan that includes website backups, malware scanners, and a WAF. Malware scanners should offer automatic daily scanning and malware removal—some also offer website application patching for added benefits. The WAF plan you choose should include DDoS protection, and many are bundled with website scanning plans. With easy setup and high-quality support, implementing a proactive website security strategy and incident response plan is accessible for businesses of any size.
4—Support for Mobile Apps
A new survey from The Manifest, a B2B news and how-to site, shows 46% of small businesses use in-house staff to develop and support their mobile apps, 41% use a freelancer or consultant to develop their apps. An additional 39% use a design or development agency and 38% use a do-it-yourself (DIY) app builder.
The resources small businesses use for mobile apps depends on their goals for the mobile app, their budget, and extent of available expertise within their company. Businesses that cannot rely solely on in-house staff should seek external help, say industry experts.
“If it seems like it will take ages to create your mobile app because you have no such expertise or because your capacity is limited, then [you should] hire an external agency or consultancy to help,” says Peter Mezyk, COO of Nomtek, a mobile application development agency in Poland.
Small businesses can also consider DIY app builders — software that enables people to easily create apps with drag-and-drop functionalities and pre-set templates. The drawback is that DIY app builders are more limited in their capabilities.
App development costs run high: 48% of small businesses spend less than $25,000 to design, launch, and build their mobile apps, and 37% spend between $25,001 and $100,000.
The survey’s full report offers advice to small businesses as they build their plan of action for a mobile app development project.
5—Do SMBs Understand the New Tax Act?
Reliant Funding, a leading small business finance provider, recently released the results of its latest survey about the 2017 Tax Act. The survey also looked at how SMBs use social media to reach their customers.
Key findings:
- 53% of SMBs are confused about the 2017 Tax Act and will seek expert advice.
- 25% of SMBs have plans to capitalize on the Tax Act.
- 22% of those surveyed don’t know about the bill; 43% understand the Tax Bill and plan to take the savings and contribute to an emergency fund; 31% will use the savings to give employee bonuses or salary bumps and 27% plan to purchase new equipment.
- 44% of SMBs are optimistic about the state of their businesses, a slight decrease from the 50% of those from our previous Fall Report.
- In the Reliant Funding Fall Report, 19% of those surveyed had no plans to invest in the following six months. This jumped to 47% in the Spring Report.
- Marketing is still the top area where SMBs want to invest.
- 66% of SMBs surveyed invest in social media to market their business.
- In the Fall Report, the top challenges were finding skilled workers, cash flow and competitors. The latest report shows finding new leads, customer spending and evolving technology are now top challenges.
6—Do You Have a Business Continuity Plan?
In its most recent Risk Index survey, The Travelers Companies, Inc. found that 43% of the business leaders surveyed cited business interruption as their biggest weather-related concern. However, nearly 40% of respondents do not have a business continuity plan in place and about 10% were unaware if one exists.
“Considering the high number of natural disasters in 2017, it’s more important than ever for businesses of all sizes to take the proper steps to protect employees, property and assets,” says Scott Humphrey, Second Vice President of Risk Control at Travelers. “Preparing for the unexpected, including the impact of severe weather, is fundamental to an effective risk management program.”
Not only are businesses not prepared, many lack the appropriate insurance coverage if disaster does strike. According to Marshall & Swift, a building-cost data provider, 75% of commercial businesses are underinsured by 40% or more. This aligns with the results of the Travelers Risk Index, which found that 70% of business leaders are not very confident they are properly insured and 63% do not conduct periodic reviews of their insurance coverage with their agent or broker.
To help prepare for possible spring storms and other severe weather events Travelers recommends business leaders take these steps:
- Develop or update your business continuity plan, outlining the strategy for keeping your business running during an unplanned event like a natural disaster.
- Shore up your supply chainby maintaining regularly updated and tested contingency plans, including a list of potential backup suppliers.
- Regularly review your insurance policies and limitsto ensure you are properly covered.
There are more tips and resources on ways to help protect your business here.
7—Do You Want to Sell Your Business? Here’s the Good News
According to BizBuySell.com, the internet’s largest business-for-sale marketplace, there was continued strong business-for-sale activity in the first quarter of 2018, with record-breaking sales prices and transactions. You can see the complete results in BizBuySell’s Q1 2018 Insight Report.
Here are some highlights:
Small businesses sold for a median sale price of $245,000 in the first quarter of 2018, the highest sale price since BizBuySell started tracking the data in 2007 and up 3.4% from a year ago.
The median asking price of sold businesses also hit a record high at $262,000, up 4.8% from 2017. BizBuySell says small business owners should take note of the record prices, and at least contact a broker to see how your business stacks up against the overall market.
While business owners are getting more for their business, it does not necessarily indicate a sellers’ market. As evidenced by the 0.92 sale-to-asking price ratio, buyers are willing to pay higher prices but that may be due to the financial stability attached to these businesses and a strong optimism for continued growth.
Median cash flow is often considered the best indicator of a business’ success. The median cash flow of businesses sold in Q1 increased to $120,000, up 2.3% over the same time last year. Additionally, BizBuySell’s latest small business owner poll shows that 72% of owners believe financials will continue to rise in 2018.
With owners entering the market to capitalize on rising prices and buyers willing to spend more for healthier businesses, the net result was 2,678 businesses sold in the first quarter of 2018, up 13.1% from this time last year and the most businesses reported as sold in a quarter since BizBuySell began collecting this data.
Similar to the number of businesses sold in the first quarter, businesses placed on the market increased 6.9%. These businesses also boast growing financials, suggesting there is still a large amount of healthy businesses available for interested buyers. “Both buyers and sellers are in a really good position right now,” says Bob House, president of BizBuySell.com and BizQuest.com.
8—Creating Social Ads That Drive Awareness, Engagement & Action
Sprout Social’s latest data report shows 27% of consumers’ opinions of social media advertising has declined in the past year. Sprout Social says this “proves that not only are marketers battling the clutter, they are also at a disadvantage because consumers are predisposed to view the mere existence of ads in a negative light.” And the current climate isn’t helping, with 39% saying recent political events have decreased their trust in social ads.
So how can marketers navigate these challenging perceptions and cut through the clutter? Key findings include:
- Above all, consumers want to be entertained—41% of respondents say entertaining content makes them more likely to engage with a social ad.
- Among the chief complaints of consumers whose opinion of social advertising has declined are uninteresting content (31%) and irrelevance (26%).
- Embrace the CTE (call to education). One third of people are more likely to engage with social ads that teach them something, and 65% of consumers will click through to learn more.
- A discount is the one advertising tactic that never gets old—37% of people across generations are more likely to engage with social ads that save them money.
9—Small Business Roundtable Launches
The nation’s leading small business and entrepreneurship organizations just banded together to form the Small Business Roundtable (SBR), a coalition dedicated to advancing policy, securing access, and promoting inclusion to benefit the 30 million businesses at the heart of the American economy.
Members of SBR are organizations committed to improving the entrepreneurial environment and include the Small Business & Entrepreneurship Council (SBE Council), National Association for the Self Employed (NASE), National Association of Women Business Owners (NAWBO), National Small Business Association (NSBA), the U.S. Black Chambers, Inc. (USBC), and the Asian/Pacific Islander American Chamber of Commerce & Entrepreneurship (National ACE).
“Washington responds most to organized interests, and today marks a step to better organize the small business community,” notes long-time small business advocates Rhett Buttle and John Stanford, founders of SBR. The group is chaired by Karen Kerrigan, President & CEO of the Small Business & Entrepreneurship Council.
The coalition was founded to give the small business associations a more cohesive voice on public policy. It will allow small business leaders a place to share information and increase their influence.
You can learn more about SBR here. SBR will be reaching out to additional small business associations to join their ranks in the coming months.
10—Independent Workers & Taxes
Everlance, a San Francisco-based mileage and expense tracking app, released survey findings showing how independent workers and entrepreneurs view and handle annual tax requirements set forth by the IRS.
Findings include:
- 49% find taxes “stressful” or “extremely stressful” as an independent worker compared to being an employee (28%)
- The number of people that replied that taxes were “extremely stressful” as an independent worker (18%) was nearly three times higher than when those same individuals worked as an employee (7%).
- 46% had saved money in 2017 for retirement.
- 44% sited “income volatility” as to “what’s the most difficult part of being an independent contractor”
- 52% prefer to stay independent as freelancers or entrepreneurs; while 48% say they would “take an equivalent W2 / employee job over freelancing if given the option.
- 57% have been in the independent workforce for two years or less; 33% have been in this category for more than three years.
Quick Takes
11—The State of Online Shopping Fraud: 2017
According to a new report from Experian, online shopping fraud grew 30% last year. You can check out the whole report, but here are some highlights:
- 53% of fraudulent transactions took place through an internet browser while 29% happened on a mobile device
- Shipping fraud (when the delivery address used for stolen purchased items is the criminal’s) increased 37% in 2017. The West region saw a nearly 60% increase.
- Billing fraud (when the victim’s address is tied to the payment account used to purchase the stolen goods) increased 34%. The North Central region saw a 50% increase.
- $855 wasthe average amount lost per zip code for online shopping fraud in 2017.
- Credit card fraudwas the most common form of identity theft (133,015 reports), according to the FTC. Among the fraudulent transactions, 92% of those used a credit card, while 7% happened through direct billing, third-party transfers or prepaid gift cards.
12—Parental Leave
It would be very difficult with the typically lean staffs found in small businesses for them to offer parental leave. Sadly, most bigger businesses don’t offer it either. If you want to know more about parental leave, take a look at this study from FairyGodBoss and The DataFace. The report shows legal firms offer the strongest maternity leave options, and “The U.S. remains the only developed country without federally mandated, paid maternity leave.”
Cool Tools
13—Award-Winning Printer
With its smart and simple design and all-new smartphone-like user interface (UI), the Xerox WorkCentre® 6515 Color Multifunction Printer (MFP) has won a prestigious 2018 iF DESIGN AWARD from the International Forum Design GmbH.
The WorkCentre 6515 won in the highly competitive Computer category with more than 6,400 entries from 54 countries, featuring printers, scanners, copiers, laptops, tablets and even robotics.
“This award affirms our creative ability to blend innovative design with uncompromising ease-of-use—a necessity for customers who rely on their MFPs to drive efficiencies in their office environments,” says David Parsons, director, Experience Design Group, Xerox.
Capturing the attention of the competition’s global selection committee was the device’s tilting UI, accessible for users sitting or standing, multimodal feedback including visual and audio cues, and an emotive LED display featuring behavioral responses and machine status. The innovative UI is also built into Xerox AltaLink® and VersaLink® devices.
Global research conducted by Xerox and Fuji Xerox during the product development phase found that participants who value their office aesthetic stated good design helps improve employee productivity and morale.
The WorkCentre 6515 supports mobile and cloud platforms and prints at speeds as fast as 30 pages per minute.
14—Digital Certificates
A large number of existing Symantec SSL certificates have been “distrusted” by Google Chrome as part of its removal of Symantec root certificates. This distrust event started last week, and means Symantec, Thawte, GeoTrust, and RapidSSL certificates issued before June 1, 2016, and still in use will be greeted with warning messages in the Chrome. The stable release is the consumer version and the one most used.
DigiCert has offered free replacements for holders of affected certificates, which extends trust on DigiCert roots through the end of the original validity period. DigiCert explains it all here.
