5 Ways Small Business Can Use Social Media

Social media is hard to avoid these days – everyone seems to have at least one account on a social media website. So when marketing your company – whether big or small – you have to go where the people are. You may think that only big name companies can be successful on websites like Facebook or Twitter, but social media is the ideal platform for small businesses running marketing campaigns on tight budgets. Here are 5 ways small businesses can use social media successfully to market their companies.

Customer Service:

Social media is all about connecting, engaging and interacting with customers and it puts customer service on a whole other level. Facebook and Twitter gives users the ability to post or tweet comments or questions directly to you, which allows for a more informal and real-time approach to helping customers. Asking for customer feedback, suggestions or comments will help to start the conversation flowing if you’re finding interaction to be one-sided. And, it’s important to respond to ALL customers, whether positive or negative. Keep the communication honest and open and your customers will appreciate the effort.

Networking:

For small businesses, networking is a great way to generate leads and find prospective customers. Social media sites liked LinkedIn make it easy for small businesses to network professionally from the comfort of their computers. Connections are made first through people you already know but from there you can find mutual connections, follow companies, join discussions, and take part in Q&As. All of this gives you a continuously expanding professional network at the tip of your fingers.

Advertising:

For small businesses that are wary of the enormous costs associated with traditional media like print, radio and television, social media gives you an inexpensive and measurable alternative. And again, because everyone is already using social media, it’s become the best place to advertise. The Facebook and LinkedIn advertising platforms are web based, easy to use, and cost effective. Your budget is up to you, you can start, stop and modify your ads at any time, and you only pay when someone clicks. On top of that, you can easily measure the results of your campaigns through metrics that allow you to analyze impressions, clicks, click through rates and spend while your campaign is running.

Inbound Links:

If you’re thinking about using social media for your business, chances are you’ve got a website already. Inbound links are links from external sites that bring traffic to your website. The more your website is linked on outside sources, the more traffic or referrals you’ll get. Plus, inbound links help increase your ranking in major search engines if the inbound links are relevant and of good quality. So posting information to your blog which links to your website, then posting to Facebook and LinkedIn, and tweeting it on Twitter can create direct clicks, shares, or re-tweets – all of which contributes to inbound traffic to your website.

Branding:

Get your name out there! I’ve said it twice and I’ll say it again – go where the people are. You might find social media intimidating (“what if no one ’Likes’ us?”) but it’s all about interacting and building relationships, no matter how many people are watching. Don’t expect major results over night and don’t try to compete with the big guys, but stay active online by posting relevant, interesting and fun information on a regular basis and eventually you will have built your own community within the larger social media framework.

Since social media is still relatively new to most people and seems to be constantly changing, it’s a good idea to keep on top of the latest trends and to pay attention to what other businesses are doing. Regular research helps to keep your business in the know when current social media platforms make significant changes or when new platforms are released. A good way to stay on top of the trends is to subscribe to RSS feeds from reliable tech news sources such as Mashable or Social Media Examiner. Tech blogs and Twitter trending topics can also give you an idea of the latest in social media development.

When it comes to social media the key is to watch what other people are doing, stay on top of what’s current and, most importantly, have fun with it!

Why a small business needs an ecommerce site

In the era before the internet, it used to be that small businesses would market their services locally through networking or word-of-mouth. Their marketing strategy was to provide great customer service, and grow organically until they could buy advertising in tv, radio or even print newspapers.

Today it may still be a good way to market, however, with the ease of creating an online presence, there is no excuse not to have your own website or an ecommerce store. It is a given that every brick and mortar retailer MUST have an ecommerce website, a social media profile on Facebook and a blog. If you don’t, it is reflected in your dwindling sales.

The internet has created so much efficiency that it has affected every aspect of your business, from:

• merchandising,

• pricing,

• marketing,

• promotions

• and even sales!

The true power of the internet is that you can automate one-on-one interactions to many people without having to lift a finger. This allows you to provide personal service to thousands of people from your location, without having to increase your staffing needs or even in some cases, technical know-how.

Some other advantages in having an ecommerce site are:

• Level the playing field between large and small businesses. With the right technology, you won’t be able to see the difference in service or performance.

• It saves you money. Keeping operating expenses down is a main factor as to why you should start an online store

• Reach more customers around the world. With a storefront in your neighbourhood that is already doing business, why would you even want to have an ecommerce website? Opening a brick and mortar store restricts you to your local area that you target. However, with an ecommerce site your market expands beyond your neighbourhood. You now have options to target any country that you want to... Done well, a business could double their profit margin just from their online business alone.

• Track everything your customer does online and on your store. The internet allows you to get a deeper understanding of your customer’s purchasing habits, all the way down to the individual client. All this data can be used to create brand loyalty, upsell more products for a higher profit margin and get into new markets.

By selling online, your company size doesn’t matter. All that matters is the shopping experience and whether the product is great! As mentioned before, ecommerce creates a level playing field where small businesses can compete effectively against the big boys.

Financing Options for Start-ups

One of the biggest challenges for many start-ups is to find money to keep the company running. Break even point has not been reached and with expenses exceeding sales revenue , a CEO will soon need to look for financing options.

Where you get your financing depends on:

• what kind of business you are starting and industry you’re in,

• how much money you need to raise and

• what you will use the money for

Here are some of the financing options:

Family, Friends and Personal Savings

Personal savings are one of the easiest ways to finance your business. This option may be the best option in the earlier stages of the business, especially when you don’t have a product or clients. You don’t have to answer to any outside investor who only cares about how soon they are going to make their money back and not about the company. This may be your only choice if you aren’t able to attract investors. Family or friends can also be an alternative source, however be careful if they invest in your business. Is it worth losing the relationship if your business fails?

Angel Investors (early stage)

Angel Investors are investors who invest only in early stage start-ups and have been known to invest between $15,000 to $500,000 for equity in your business. Angels mostly invest once a business has been proven and has made some revenue. In certain industries, angels invest as a group, especially when they see a great opportunity.

Incubators

Incubators became popular during the dot-com boom, where they provided office space, access to mentors and IT infrastructure in return for a percentage of a business. They have become very popular recently, with an increasing number of incubators popping up around the world. Incubators work very closely with entrepreneurs by mentoring them in every aspect of the business from sales/marketing to operations. This is why many successful start-ups come from incubators. However, the success of an incubator depends on the experience of its board of directors and investors.

Venture Capital

Venture capital has become a popular option for many start-ups, however it is difficult to get financed by VCs . They are very selective in the investments they make, investing in as little as 1 start-up for every 100 proposals they receive. Due to the fast returns expected, VCs look for high growth potential start-ups that can provide them with a quick exit and a return on their investment in a short amount of time. If you feel that your start-up has a lot of potential for a VC, the best way to get in front of a venture capitalist is to network and get introduced by a mutual acquaintance.

Business Loans

Approaching a bank for a business loan is a standard path to fund a start-up. However, with the financial chaos affecting economies, many banks have become extremely risk averse. Although the benefit of getting a loan is that you keep ownership of your business – getting a loan will depend on things such as:

• the type of business that you run,

• the industry you’re in,

• and your credit rating.

However, if your business plan is solid and shows the loan officer how quickly you will produce revenue and break even, you may be able to get financed by a bank. In many cases, businesses use credit lines to manage their cash flow, and business loans to make large purchases such as equipment.

Most businesses will use a mixture of financing instead of depending on just one source. For example, as a start-up you might invest your own money for market research, then pitch investors to invest in the early stage of the company and then obtain a loan from the bank to purchase equipment. Once your company has grown, you may approach venture capitalists to finance your expansion into a larger company.

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The Business Plan and why you need it

As a business owner, you have to be aware of and work with so many variables – like creating a compelling product, building a great team, generating sales and keeping your customers loyal. Writing a business plan helps you as it will guide you in understanding how your company operates. The process of writing a business plan, will help you learn how to forecast any challenges, understand what resources you would need and even manage your own company more effectively.

What does a business plan consist of?

First and foremost, when writing a business plan - you should be aware as to who your audience is. Depending if you’re pitching a VC or asking your banker for money, you should tailor the plan to what they are interested in. In general, every business plan are composed of these sections:

• Executive Summary: Placed in the front of the plan but written last, this allows the reader to quickly understand whether want to read the rest of the plan or not. It will provide them with a concise idea of what your business is, where the opportunity lies and how you plan to solve it.

• Description of Business and revenue model: This is a deeper analysis in your business. What is the problem you’re solving, how are you providing a solution, and how can the business be sustainable over the long term and make a profit.

• Industry Description: What industry are you competing in? Do you research and find out who the main competitors are and why are they failing or doing well. Present your company in a way that outlines how you plan to capture market share.

• Market Research: This is a deep analysis into defining who your customers are and whether they are interested in your product or service. By doing your market research, you may find out that your potential customers may want something else entirely.

• Operating Plan: How are you going to deliver your product or service to your customers? Make sure you account for every detail including customer service, manufacturing, sales and human resources.

• Management Team: For any business, it’s the management team that will make or break the company. Include a summary of each team member’s experience, what their responsibilities are and how they will help the company succeed.

• Financial Analysis: The most important aspect of any business plan, the financial analysis will show others if your company is going to make a profit. It will outline when you will break even and how long will it take to profitability.

Tips on a successful business plan

When you are raising money for your startup – it’s your business plan that will grab the attention of potential investors. Make sure that you have no spelling or grammar mistakes, it is printed on good quality paper, and most importantly, your financials are solid. Mistakes in your plan will make a poor impression to anyone who’s reading as they will wonder if you will make same mistakes in running your company.

As mentioned earlier, understand who the plan is for. If your plan is for your partners or employees then it would reflect more on the operations side. Likewise, a plan written for a loan officer, they will be very interested in your financial analysis. Did you make realistic projections? Will your potential sales revenue cover the loan payments over time?

Your business plan is one of the best methods to show investors that your company is worthy of their investment. By keeping your plan clear and realistic you will be able to show them that you can make it happen.

What to look for in a business partnership

Just like a marriage, a business partnership is a joining of two people working towards a common goal, sharing the same values and vision before it can move forward. These partnerships however, can take a variety of forms, ranging from joint ventures to long term commitments. Here are some tips on what makes a strong business partnership:

Sharing a common vision: It’s extremely important to define where you envision your business to be. Ask yourself questions such as; what type of clients do you want and what kind of service/product you’d like to offer? If your vision of the company is different than that of your partner, you will encounter problems down the road. To avoid this, sit down with your partners and discuss where you see the business heading. Ask yourself, what drives you and excites you about the business? Do not leave the table until you’ve come across an agreement.

Know what you bring to the table: Make sure that your partner has a skill set that is complementary to yours. By having an honest discussion on both your strengths and weaknesses, this will help you understand if both of you can create a successful partnership or require someone to fill in the gap.

Create both individual and company goals: Start creating company goals and then your individual goals. Your individual goals should support company goals. By measuring and holding each other accountable in achieving them, you should have no problems in being committed to the long term success of the company. It is also important that you meet on a weekly basis to review the status of your goals and discuss any challenges that may have come up.

Nip problems in the bud quickly: Like any marriage, partners will argue. To make it a successful partnership, what’s important is how you resolve those issues. Instead of letting a problem or an issue affect you or fester, make sure that you immediately discuss them with your partner. By meeting regularly to discuss this, everyone can address their concerns, create a plan to solve it, and find a resolution quickly.

Create accountability: This is the most important aspect of any business partnership! One of the major issues between partners is a lack of clarity around job responsibilities. Without clearly defining your tasks and responsibilities, there will be some confusion on who is actually running the business. So ask yourself these questions: Are your tasks and responsibilities clearly outlined? Do you know what your job is, what you’re responsible for and how you’re measured? All tasks should be clearly defined and assigned. Make sure that they support the long-term company goals and should also include clear metrics that measure the success of the job. This will measure your progress and help you be accountable to yourselves, to each other and to the business.

Creating a contract - protecting yourself and your business

In business, a well designed contract protects you from any unknown variables, much like an insurance policy. You pay for the policy, hoping that you’ll never have to use it. More specifically, a contract helps you manage and avoid potential risks. Due to the unpredictability of the business world, smart professionals create contracts to reduce any unnecessary costs and minimize all risks.


Why should you use a contract?

A contract is a legal document used between multiple parties to outline a business relationship. The contract becomes valid only when the parties involved agree to the terms and conditions by signing the document. It should detail the:

• expectations of the stakeholders;

• the relationship between all parties;

• the nature of the transaction;

• and the next steps of the relationship including any recourse in case of disputes.

It is often used for:

• During the hiring of freelancers/vendors/suppliers

• During the purchase of goods or services

• Real estate transactions

• Business partnerships

• Non-compete, non-disclosure or confidentiality agreements

With a contract between parties, all issues can be outlined in detail, thereby avoiding any problems that may happen in the future.

Things to be aware of in creating a contract

Don’t be vague, make sure the contract is detailed – The ideal contracts are detailed and focused. Make sure that the terms and conditions are simple, specific, and that avoids any uncertainty. The more specific you are in your expectations or terms, it becomes very clear on what is to be done by all parties and by what time.

Identify all concerns you have – Make sure that all your concerns are outlined and are answered. You don’t want to find out the hard way in a situation that could have been avoided.

Understand the laws – Make sure that you know your provincial and even local laws that can affect the contract. This is especially true for any real estate transaction where the laws change by province. It is best to consult a lawyer who is knowledgeable about your industry and can advise you on the proper stipulations.

Review the contract with a lawyer - Never sign the contract until you’ve gone over it with a lawyer. Many people make the mistake of only going to the lawyer after the agreement has been signed or when a problem came up.

A contract is meant to be used as a way to protect yourself and facilitate any business transaction. It creates a common platform from where all parties can move forward in consummating a business relationship. It also is used to protect yourself from any harm or legal problems and can be one of the best decisions you’ll make for your business.

Small business financing - tapping into Ottawa's R&D tax incentive program

SRED is known as the Scientific Research and Experimental Development (SR&ED) Tax Credit program. According to the Canadian Revenue Agency – the SRED program is meant for the businesses that conduct research and development in Canada. It is the largest source of funds from the government in regards to R&D programs that supports industrial research.

In terms of the amount of credit received, the SRED program offers:

• For a Canadian controlled private corporation (CCPC), they can earn a 35% federal credit on their first $3 million in R&D expenditures.

• For large companies that exceed certain taxable income or capital limits, the federal credit drops to 20%.

For a small business, this means that you can claim up to 65% of your engineering team’s overhead – especially those involved in R&D. As an example - if you spend $2 million in salaries for your R&D team, you receive $1.35 million refundable tax credit, when the overhead rate is included in the calculation. So when you are considering outsourcing your R&D, consider that the government will pay YOU money to keep the intellectual research in-house!

What qualifies for the tax credit?

To determine whether your company qualifies for the tax credit, ask yourself these questions:

• Do you deal with challenges of a technical nature – software, hardware or industrial.

• Did you spend money to solve the technical obstacles?

If you said yes to both questions, you qualify for the credits. They can also be claimed on any work that meets these criteria:

• Experimental Development- to create or improve materials, products or processes.

• Applied Research- to advance knowledge with a specific application.

• Basic Research – to advance knowledge without a specific application.

• Support work for the above.

As you can see, the scope of what can be claimed is broad and could probably apply to most Canadian business.

Tech company start-ups know that they can file for the SRED claims, and for many, these refunds help them get through to the early stages of the company. Almost all of a start-up’s expenses can be claimed for R&D credit and are highly encouraged. This doesn’t mean that engineering, architectural, and programming firms cannot apply for the SRED credit, even if they are under contract from clients. They should be filing their claims immediately if they have been contracted to provide R&D services.

Check the Canadian Revenue Agency site, as it has all the information regarding contracting for services, including contract requirements. The best way to determine if you qualify is to download one of their industry specific guides that will outline the SRED application process.

Is owning a franchise right for you?

In the last few years, the popularity of the franchise business model has skyrocketed. Many people are attracted not only by its proven business model but also the ease in owning one. While the success rate for franchises is somewhat higher than owning independent businesses, there is still the possibility that an individual franchise won’t succeed. So, before purchasing a franchise opportunity, ask yourself these six questions:

Are you ready to run your own business?

As an entrepreneur, you can be expected to work more than 60 hour weeks, doing all the dirty work; such as mopping floors, emptying the garbage and handling upset customers. If you are willing to put in the work in the early stages, and see it through, you have a higher chance of success.

Are you willing to completely follow the franchisor’s system?

The most important part of a franchise’s success is the brand consistency that customers find from one franchise to another. By being a franchise owner, you are following a particular system determined by the head office. If you’re an entrepreneurial person, think twice before purchasing a franchise as you may not like to conform to a formula and may chafe against the restrictions.

Are you able to afford it?

Understand what your financial requirements are going to be and then double it! One of the major causes of failure for franchises is being poorly capitalized. Do your research – ask your franchisor what your start-up costs will be, including any detailed expenses such as equipment financing and rent. You will not only need money to open your franchise, but also to manage it until it becomes profitable. And for some franchise businesses, it may take up to a year to break even.

Does the corporate headquarters have a history of success?

You should do your research into the owners of the company, including their business background and successes. Work with an accountant and review the finances of the franchise. Is it solid? Don’t be afraid to ask questions, as it’s their support and experience which will guide your success.

Do you like the franchisor’s staff—those people with whom you will be working?

A chain is only as good as its weakest link. Which means that you should investigate the staff that provides support for your franchise. Make sure that you’re comfortable with them and are able to build a good relationship.

Is your family behind you?

This applies to all entrepreneurs – starting a business, be it a franchise or an independent, will require a lot of sacrifices. Especially in your personal life. For this reason, communicate clearly to your family that you will be busy, and set some boundaries. They will need to be supportive of your decision and are willing to compromise.

Finally, hire the expertise of professionals, such as an accountant and a lawyer. By creating a team, you’ll be well prepared to face any challenges that may come upon you. By evaluating the franchise you want to purchase and your own strengths and weaknesses, you’ll have a pretty good picture whether you’re ready to take the next step in owning a franchise business.

How to manage work/life balance as an entrepreneur

Choosing the life of an entrepreneur is not for the faint of heart. It can become hectic, with the line between family and work being non-existent (including those who run home-based businesses). Maintaining a healthy balance between your home environment and work can be difficult, especially when you are always “on”. Especially when clients, suppliers and employees are able to reach us at all hours. You can get so bogged down with work that you will forget what it is like to have free time and can neglect your family and friends!

So what can you do to maintain a great work /life balance? How can you juggle your work and keep it from interrupting your family or social life? Our tips will help you maintain that balance while also helping you grow your business.

Manage your time

The most important part in managing time is not being able to schedule your hours, but in how to set priorities. Your work/life balance depends on what your life goals and passions are. Once you know what your priorities are, you must then analyze those items that compete for your attention. Decide what you want to focus on and discard what is not important in your life.

Be ready to communicate your expectations to people - which sometimes requires you to say “No” to certain activities. You have to help them understand that being an entrepreneur means working long and crazy hours. Have a discussion with the people close to you and plan for re-scheduling conflicts.

Make a schedule for your day - end your day at the same time, and try to stick to it. It’s not always easy as there is always work to be done. In some days, you might find yourself fighting fires with no one to help you, and you’ll be up late into the night. You must have strong self-discipline as there is no one who is going to be looking over your shoulder telling you what to do.

Delegate

Although doing everything yourself makes financial sense when you start out in your business, you should consider hiring contractors, consultants and employees when the time is right. Micromanaging is a straight path to not only stress, but also making mistakes which can affect your business. The benefits of delegating outweigh the risks and costs, so giving others the responsibility of doing minor tasks from writing a blog to your accounting, you’ll focus on what you’re good at – which is growing your company.

Focus on your health

No matter how busy your schedule is, always make time for fitness. Even if it means going for a long walk around the block, just do it on a regular basis and get your heart pumping. A good workout:

• Helps reduce stress ,

• Allows you to maintain a routine,

• And focuses your mind.

Be it going to the gym or playing a sport, physical activity helps your body create endorphins which is known to keep people’s mood up.

Being unreachable

Running a small business means dealing with all kinds of issues and putting down fires. Your employees, suppliers and clients are constantly vying for your attention by phone and email. To avoid being overwhelmed by the constant barrage of emails and calls, unplug yourself from any communication device at certain times of the day and focus on getting your work done. Block out some time during the day to respond to emails or voicemails.

Get a life

It’s very easy to get sucked into the life of an entrepreneur. You are passionate about your business and you work hard to make it successful. In the first few years, you may need to work around the clock to get your business off the ground, but it will catch up to you, leaving you with high blood pressure, broken relationships and more.

To keep a balance, you must be able to walk away and spend time on things that you enjoy. As much as you put your focus on work, put the same on your recreational activities. Don’t forget about the most important relationships in your life – keep your lines of communications open between your family and friends so that you’re not isolating yourself from them.

Being an entrepreneur requires you to make many sacrifices; however, you have to realize the bigger picture –you want to be able to enjoy the fruits of your hard work. If you don’t pace yourself and schedule regular fun time, you’ll definitely burn out.