16 Things Small Business Owners Must Know
By Rieva Lesonsky
1—Entrepreneurial Women Lead the Way
It’s still National Women’s Small Business Month and to salute that SCORE, the nation’s largest network of volunteer, expert business mentors, has gathered stats showing show how 11.3 million women-owned businesses are making an impact on the American small business landscape. Data shows that women are currently majority owners of 38% of U.S. businesses, up from 29% in 2007, with these businesses employing nearly 9 million people and generating more than $1.6 trillion in revenue each year.
Check the infographic below for more details.
2—Entrepreneurial Women: Making an Impact
And in honor of National Women’s Small Business Month, let’s take a look at the impact women-owned businesses have had on the U.S. economy. According to this year’s American Express OPEN State of Women-Owned Businesses report, women are starting an average of 1,072 new businesses each day. Since the recession, the number of women-owned firms has grown at a rate five times the national average (up 45%, vs. a 9% increase among all businesses).
And , last March the SBA announced the federal government met its 22-year old goal of awarding 5% of federal contracts to women-owned businesses for the first time in history. This landmark achievement is another sign that the success of women business owners isn’t slowing down any time soon.
Check out these tools from American Express:
- ChallengeHER: a partnership between American Express OPEN, the SBA and Women Impacting Public Policy (WIPP), provides women business owners with the opportunity to make valuable connections with government agencies and experts and to learn how to grow their business through federal contracting.
- The free 50 Fastest Growing Women-Owned/Led Companies Guide to Growth, recently published by the Women President’s Organization and American Express, offers tips and tricks from successful female business owners highlighting tried and true methods.
3—115 Facts You Must Know About Social Media
Did you know 85% of Americans get their morning news from Twitter and Facebook? There’s lots more interesting facts about social media in the infographic below.
4—Scary Legal Myths
Guest post by Charley Moore, Founder & CEO Rocket Lawyer
Myth 1: Businesses Will Get Sued for Not Providing Employee Health Coverage
97% of small businesses in the U.S. are not required to provide health insurance for their workers. The employer mandate under the ACA only applies to businesses with more than 50 full-time staff. But, if you are a SMB with a large number of part-time workers you need to calculate the number of hours they worked collectively to figure out the full-time equivalent of part-time employees. You do this by adding up the number of hours worked by part-time employees in a given month and divide the total by 120 (30 hours a week is considered full-time). If the number sum of full-time employees, plus the full-time equivalent of the part-time employees is 50 or over, you may be considered applicable.
As for being sued, the government will not sue for not supplying health insurance, but you will be dinged in your taxes.
Myth 2: I do not need to consult a lawyer when it comes to naming my company.
According to the last U.S. Census there are 27.9 million small businesses in the U.S., and the likelihood that one of will have your name could be quite high. A horror story is waiting to happen if you pick a name legally protected by another company. No matter how clever or “different” your company’s or product’s name may be, you should always take preventive measures to ensure they have not been used and then take the steps to legally protect them. Investing in legal counsel to protect your name is far more cost effective than being used for trademark infringement.
Myth 3: Small business assets are protected if they incorporate. While this is partially true, there are many situations where this does not apply:
- Don’t be fooled into thinking that just because you own a business you are not personally responsible for the assets you acquire. Most likely you will have to cosign and if you default it’s your personal pocketbook that will feel the pinch.
- Mixing Business with Pleasure: A Dangerous Cocktail: Using company funds for pleasure purposes can expose you to the dark side of the IRS.
- Death & Taxes: Failing to pay income taxes and employee Social Security and Medicare taxes draw the attention of the IRS and, rest assured, the tax man will come.
5—Small Businesses for Sale
The number of small business transactions jumped 15% from this time last year, reaching levels not seen since Q2 of 2008, right before the recession hit, according to a new report from BizBuySell.com, the internet’s largest business-for-sale marketplace. At the same time, the number of total business listings reached a record level and grew 5.1% above last year’s inventory. These changes indicate a market shift, and suggest both buyers and sellers are eager to take advantage of hot and more balanced market.
Other key findings from this quarter’s report include:
Businesses sold in Q3 took an average of 171 days to sell, a 4.5% decrease from 179 days in Q3 of 2015 and a steady drop from 188 days in Q1 of this year. The median sale price in the Q3 of 2016 increased nearly 7.6% from $185,000 last year to $199,000.
BizBuySell also just released its annual confidence index, which looks at small business buyers and sellers’ sentiment of the current business-for-sale environment. The survey found sellers continue to feel more confident than prospective buyers in today’s market. Nearly 60% of respondents feel confident they would receive a price that met expectations if they sold their businesses today. Buyers remain less confident in the market than sellers. Naturally, buyers are suspect of the other side as 60% believe small businesses for sale are currently overvalued, compared with just 4% who believe they are undervalued.
6—Stop Wasting Time in 2017
More than 80% of small/mid-size businesses (SMBs) want to cut paper out of the way they invoice, report financials, manage legal and human resource forms, and handle other time consuming processes, according to a Xerox survey. And many of these businesses expect to make the change and digitize their paper processes during the next 12 months.
Half of the U.S. respondents confirmed that a significant amount of time is wasted on paper-intensive processes and 6 out of 10 view this as having a major impact on their bottom lines.
As SMBs prepare to digitize, most will turn to experts for recommendations since only 1 in 5 respondents are aware of existing paper-free solutions in the market. The study shows 47% will go to an office equipment dealer, 37% will turn to the product manufacturer and 25% will look to their IT reseller
“Change can be overwhelming for SMBs, but there are many ways to evolve in the right direction,” says John Corley, president, Channel Partner Operations, Xerox. “As SMBs embark on their digitization journey, it’s important to understand how technology, such as apps on printers and managed print services, can support their vision and strategy to achieve successful digital transformation.”
Priorities driving business decisions
The survey shows increasing productivity is a top priority for SMBs, along with growth and reduced printing costs. Other findings include:
- 28% say they are well advanced with respect to implementing their plans to digitize paper processes
- American SMBs are lagging in their plans to digitize processes with 41% citing they have just started, compared to the average (37%)
- 12% of all SMBs are one to three years away from implementation
In addition to focusing on digitization and automation, SMBs are also exploring other areas to improve productivity, including:
Managed Print Services (MPS): Of the SMBs surveyed, 42% have an MPS contract, while 40% plan to put an MPS contract in place within the next year. 66% spend more than $1,000 each month for printing activities, a significant cost of doing business. Companies with MPS contracts cited reduced costs, decreased paper consumption and improved tracking of print costs as top benefits.
Mobility: By the end of 2017, 23% of SMBs believe mobile devices will be completely integrated with their workflow processes. Today, 66% of SMBs include mobile printing in their mobility initiatives, while 27% plan to within the next year. The main drivers include increasing productivity of mobile workers, meeting customers’ needs for remote information, and improved and faster customer service.
Security: It’s becoming increasingly important for SMBs to secure business-critical information across all technology with the rapid growth of data. As a result, 56% of SMBs currently include printers and/or multifunction printers in their security strategies.
SMBs in the United States and Western Europe spend $40 billion annually on office equipment and related print services. And Xerox has introduced has introduced a variety of solutions to help SMBs automate processes, improve mobility and reduce printing costs through MPS. Xerox’s ConnectKey® technology automates manual paper-dependent processes and makes it easier for mobile users to collaborate and work more effectively, even outside of the office.
7—Get Online with Help from Google on 10/26
As we enter the throes of the holiday shopping season, you need to make sure your business is online—since that’s the primary way local customers are going to find you. It’s important to take care of this now since 61% of shoppers start researching holiday purchases before Thanksgiving.
Google and its partner network is hosting hundreds of events across the U.S. to provide hands-on help to 10,000 SMBs so they can get their businesses online and growing before the holiday shopping surge.
And they’re partnering with the SBA to host a 90-minute livestream event on 10/26 at 1 pm ET/10 am PT to help an additional 30,000 SMBs this #SmallBizSeason. Businesses can find out more, sign up to attend a holiday prep workshops, or watch the livestream at gybo.com/holidays.
Google says 55% of you don’t have a website (that’s over 15 million businesses that can’t be found online). That is simply unacceptable. If you’re in this group, you need to know:
- 85% of consumers use the internet to find local businesses
- 76% of people who search for something nearby on their smartphone visit a related business within a day—and 28% of those searches result in a purchase.
- “Near me” searches spike 55% during both Christmas and New Year’s
8—The Demand for Mobile Wallets Increases
After several years of slow adoption, mobile wallets are finally starting to gain real traction with consumers, but many still need an extra push to turn their mobile wallet use into a true habit, according to a new study The State of Mobile Wallet Loyalty and Engagement from Points, a global leader in powering loyalty commerce. The study “identifies consumer pain points and desires for mobile wallets in order to offer insights into how loyalty programs, developers and merchants can create an optimal and engaging mobile payments experience.”
When it comes to mobile wallets, consumers are looking for an all-in-one solution. The study says while adoption for mobile wallets has been gaining steam, loyalty is the missing piece to help users stay engaged for the long haul. And, the integration of loyalty into mobile wallets presents an incredible opportunity for loyalty programs to make their currencies more ubiquitous and more deeply engage their member base in a new way.
Christopher Barnard, President of Points, reports on the key findings of the study:
Loyalty and Commerce Are Intertwined: Loyalty has become an important part of consumers’ everyday lives. It’s no longer an add-on, but an expectation. Consumers are looking for more ways to earn and burn loyalty points, miles, rewards and experiences everywhere they go and with every transaction.
- 68% of consumers have a rewards-collecting credit card
- 85% of respondents want to engage with loyalty programs where they shop most often. Consumers are most interested in redeeming their rewards at:
- Grocery stores (38%)
- Travel: flight/hotel room (20%)
- Gas stations (18%)
Consumers Have Growing Expectations for Mobile Wallets: Mobile wallets are gaining traction. In fact, 64% of consumers have used a mobile wallet in the past year. But, there are a number of key features developers and providers should incorporate to encourage continued adoption and long-term use:
- 94% of respondents are interested in a mobile wallet that allows them to exchange points and miles between loyalty programs to grow balances
- 49% want to see more relevant deals or offers from merchants via mobile wallets
- 60% prefer to access all loyalty programs through one app
Loyalty Drives Engagement: Across the board, consumers are much more likely to engage with brands that offer as much flexibility as possible. It can be as simple as adding lots of options for loyalty program members to earn and redeem rewards—especially through everyday purchases like filling up their gas tank or buying groceries.
- 90% of respondents are likely or extremely likely to shop with retailers that allow them to earn points and miles in their favorite loyalty programs
- 76% are more engaged with loyalty brands when given more opportunities to earn and redeem loyalty points
- 65% would choose to shop at one retailer over another if they had the option to earn loyalty rewards in their favorite airlines, hotels or travel brands on purchases
Looking at the different loyalty features consumers want in their mobile wallets, one trend is clear. Consumers want loyalty programs to be a one-stop-shop for accessing, organizing and utilizing their rewards. Mobile wallet developers and providers should keep consumers’ demand for loyalty top-of-mind—addressing concerns including security, convenience and ease of use. And likewise, now is the time for loyalty programs to be more flexible with their currencies by increasing their ubiquity to make them readily available in mobile wallets as adoption continues to gain traction.
9—Quality of Life at Work: How David Can Catch Up with Goliath
Guest post by Denis Machuel, CEO of Benefits & Rewards Services Sodexo
Investing in Quality of Life yields improved productivity, enhanced company reputation and reduced turnover, according to new global report.
In order for businesses to reach their goals, employers must find solutions to two key questions: How do we create a work culture that simultaneously drives loyalty to bottom-line performance and engagement with the company? And how do we instill an urgency to deliver consistent, quality work while inspiring happiness among employees? Finding that equilibrium is—or should be—the goal of every business, from the largest multinational to the smallest strappy startup.
For all businesses, regardless of size, the economic landscape continues to evolve—with increased urbanization, a workforce becoming more multigenerational and changing capital flows just a few among today’s challenges. One thing that hasn’t changed, though, is the pressure to innovate the work environment; it remains ever-present among companies. Small and medium sized enterprises (SMEs) that may not have the scale and access to resources of larger counterparts can feel the stress to an even greater degree.
One way that SMEs can level the playing field is to pay attention to what may seem like an inconsequential thing: employee well-being. Already, more than two-thirds of U.S. employers include wellness programs in employees’ benefits packages, according to the Society for Human Resource Management. However, there is a noticeable gap in the offering based on company size. A recent survey by the Kaiser Family Foundation reports just 49% of companies with fewer than 200 employees offer wellness programs compared to 81% of larger businesses.
So how exactly can small business compete with big corporations to recruit and retain talent in the face of relatively limited resources? And what measures can and should an organization implement in order to reach their HR goals?
At Sodexo, a leader in Quality of Life services and the world’s 19th-largest employer, we find through our collaboration with clients across industries that a crucial factor to attracting and retaining top talent is prioritizing worker well-being. That encompasses such initiatives as offering healthy onsite subsidized meals, investing in practical and pleasant work spaces and high-tech equipment, improving staff purchasing power, and rewarding high performances with bonuses, vouchers and awards.
Companies of all sizes, but especially SMEs, report a connection between programs that make it easier for employees to manage balanced lives and reward them for their performance, and an improvement in corporate productivity, reputation and revenue.
According to a 2016 comprehensive survey among 4,800 leaders of SMEs in seven countries by Sodexo Benefits and Rewards Services, 91% of SMEs believed that improved Quality of Life ensured a better work climate, and nearly three-quarters of companies surveyed held that it boosts their attractiveness as an employer.
And it’s not just a matter of perception within the C-suite. Employees share this sentiment.
For example, new data from the American Psychological Association shows more than nine in 10 workers say they feel motivated to do their best (91% vs. 38% of those without leadership support of well-being initiatives), are more likely to recommend their company as a good place to work (89% vs. 17%), while fewer said they intend to leave their job in the next year (25% vs. 51%).
Our survey uncovered that the more Quality of Life measures or employee recognition programs introduced in the workplace, the more improvement is seen in employee productivity, employee recruitment and financial turnover. On average the employers in the report implemented five company-wide initiatives, such as flexible work hours, performance bonuses, ease and efficiency around purchasing company-required travel and other expenses.
Of those small business owners who only implement one to three programs, 44% say they’ve noticed an improvement in productivity, compared to 65% of those who implement eight to 10 programs. The same effect occurs when considering recruitment: just over one-third (39%) of business owners who offer one to three programs see an improvement in recruitment, compared to 57% of small businesses who offer eight to 10 programs. In other words, the more a company invests in these areas, the bigger returns they will see.
When businesses focus on the individual and the human factor, HR challenges such as increasing staff loyalty, empowering employees to learn new skills, reducing absenteeism, fostering innovation and initiative among workers and recruiting and attracting top talents, become more manageable—easily achievable even.
A business model that puts human beings at the center recognizes this ultimately winning HR insight: Today’s workers want to know their employer cares about them. They view it as human relations, not human resources. The companies that know how to create that type of environment will be the ones pushing their industry forward with engaged, happy, innovative thinkers.
10—New Small Business Resource Center Launched
Hiscox USA, a top small business insurer, recently launched its Small Business Resource Center, including strategic brand partnerships with other businesses to offer solutions and services, as well as knowledge and insights, to business owners who visit the Hiscox Small Business Resource Center. The new partners include:
Fundera—Simple and transparent online service that helps small businesses shop and compare loan offers from dozens of the country’s leading lenders, offers free credit score monitoring, and provides free tools to help entrepreneurs better manage their finances.
Licenselogix—Streamlined business licensing service helping businesses become licensed and compliant with the law by taking over the research, assembly and filing processes.
Magisto—Service that assists businesses in creating professional-looking videos with custom branding, styles, captions and commercially licensed music.
Square—Credit card payment processing and a full point of sale that helps sellers track inventory, do real-time reporting, invoicing and more.
Incorporate.com—Online platform that will help a business become a legally recognized company status, such as a limited liability company or corporation.
And according to Hiscox’s 8th annual DNA of an Entrepreneur report, U.S. small business owners reported growth in revenue, profit and new customers, despite facing many financial and operational challenges and these offerings should help entrepreneurs overcome some of the obstacles they face.
11—Small Business Optimism Rises
The small businesses that harness automation are more optimistic, expect to increase revenue and add staff according to a survey conducted by Infusionsoft. Approximately 96% of those surveyed are optimistic about the future of their businesses, and 82% expect their revenues to increase and more than 52% expect to add an employee within a year.
Clate Mask, CEO and co-founder, Infusionsoft says, “The survey showed those who use automated marketing are confident in their abilities to grow revenue and add staff in the coming year. This is not a ‘shot in the dark’ guess, but rather an informed assessment of their business’ vitality, prospects and the power of the technology within their grasp.”
Adopting Technology: According to the survey, small businesses are both fully aware of the value of technology and their technology adeptness. 82% or respondents say technology was very important to the success of their businesses, but 55% only gave themselves a “B” (on an “A” – “D” scale) in terms of tech proficiency. This shows there is a gap between where small businesses are regarding tech savviness, and where they know they need to be.
Embracing Ecommerce: More than half of survey respondents claimed to have digital storefronts. Of this group, 41% say over 75% of their sales come from online.
Overall, Infusionsoft says, “The results of this survey show a great deal of promise within the small business sector. Businesses are optimistic about their ability to grow revenue and staffing.”
12—And So Does Small Business Confidence
First Citizens Bank recently released the results of its 2nd annual Small Business Forecast survey, showing a strong entrepreneurial spirit and optimism toward economic conditions among U.S. small business owners. Overall, small business owners are confident about their businesses and their future success—despite recent local and global events. Many believe the upcoming year will be their most successful yet.
Of those surveyed:
- 71% are optimistic about the economic conditions in the next three years, a 7% increase from 2015.
- 36% of baby boomer small business owners indicated that the presidential election was one of the top three factors affecting the growth of their business in the next two years.
- 69% of small business owners say their businesses were successful in 2015, including 20% who considered them very successful.
- Social media (60%) is now on a par with word of mouth (60%) as the most popular resource to learn about small business trends.
- The top motivator for starting a business (87%) was to realize their dreams, up 13% from 2015.
- More than 75% plan to grow their businesses in the next six to 12 months.
- The percentage of Millennials who considered their businesses successful dropped 13% from last year, while Baby Boomer and Gen-X saw a double-digit increase.
- 67% believe the state where their businesses are located is a great place to start a small business.
13—Win a Coaching Session with Barbara Corcoran
OnDeck, a leader in online lending for small business, just launched its annual Seal of Approval contest, open to U.S. small businesses. Three lucky winners will get to take home a $10,000 prize and a one-on-one personal coaching session with Shark Tank investor and real estate mogul Barbara Corcoran.
This is the second year OnDeck has teamed up with Corcoran to help three small businesses owners with one of the biggest hurdles they face: access to capital. Obtaining capital can be a time-intensive process for American entrepreneurs. In fact, according to the Federal Reserve Bank, business owners spend on average 33 hours searching and applying for credit from traditional sources—with no guarantee of approval.
Anyone with an existing business can enter to win. Go here to review the official rules and enter the Contest by describing how you would use the $10,000 and advice from Barbara Corcoran to grow your business. Small business owners can also show their passion, drive, and vision by including photos of their business, along with sharing links to their social media pages (including Twitter, Facebook, or LinkedIn.)
The Contest is open through November 14, 2016 at 11:59 p.m., ET.
14—Going Global
American Express released its first-ever Grow Global survey, which shows 80% of small and mid-sized U.S. businesses that sell globally report higher revenues compared to one year ago, and as 26% of that revenue growth can be linked to international sales alone on average. Plus, 76% of the companies surveyed anticipate 30% growth in revenue over the next five years from selling goods and services internationally.
Of course, as with great opportunity, challenges always exist. Notably, vulnerability to IP theft and patent or copyright infringement are some of the most pressing concerns (68%), followed by exposure to fraud (65%).
Ed Marsh, exporting advisor to American Express says, “Small businesses are catching the export bug. Among companies that currently export, more than half of those with less than 100 employees began exporting within the last nine years. This reflects a general increase in global trade as well as the impact of new technologies: half of companies surveyed chose to start exporting to specific markets based on the location of buyers who found them online.” Marsh adds, “One third of small business exporters started exporting ‘accidentally’ when buyers found them online, rather than as the result of a formal, strategic initiative. That may be why small businesses tend to focus on the Americas or markets where they have language and cultural comfort and therefore spend less energy overcoming those hurdles.”
In another survey from America Express, global companies feel positive about plans for future trade activity with the U.S.—this, according to Terms of Trade: Understanding Trade Dynamics in the U.S. new research conducted by the Economist Intelligence Unit on behalf of American Express. In fact, 66% of respondents anticipate their company’s trade with the U.S. will increase over the next five years and 43% expect an increase of more than 10%.
Similar to what U.S. companies experience, companies trading with the U.S. face a number of challenges to navigate. Exchange-rate volatility presents the largest issue for companies, with 41% citing this as a concern and 32% cite both transport costs and delays, trade-related infrastructure and making payments as their top challenges.
15—Debate Headache?
Did watching the presidential debates give you a headache? Apparently they did for many Americans, but according to Talkwalker, an international social media analytics firm, but pain reliever Excedrin’s sponsored hashtag: #debateheadache trended during the debate with approximately 46,000.
Most important to the brand were mentions of Excedrin, which increased by 3100% compared to the previous day, and 360% compared to the previous week mostly due to debate activity.
This isn’t really relevant to small business, but I thought it was interesting—and does show the power of social media.
Cool Tool
16—Faster Credit Card Processing
First Data’s debut of the new Clover Go contactless reader—the latest addition to its Clover family of products—enables businesses to accept payments with or without a headphone jack connection, which is significant given the new launch of the new iPhone 7. Better yet, the reader is able to process EMV transactions in less than 3.5 seconds, making it twice as fast as previous Clover Go solutions.
You can learn more about it in this blog post and video. Also, check out the infographic below.
