10 Great Ideas for Getting Your Local Business Ready for the Holidays by Sue Pitts

The good news is that holiday spending is forecasted to increase by 4% for the 2019 holiday season (National Retail Federation). The bad news is that online shopping is becoming more and more popular and is a threat to small local businesses.

Small Business Saturday and shop local campaigns are great and a big help. But in the end, the customer is looking for the perfect gift or a special experience. Here are some tips to help you stand out from the crowd and offer a local experience that customers will not be able to resist:

1.  Decorate, Decorate, Decorate! – whether you are a restaurant, retailer or service business, turn up the volume and offer a festive experience for your customers that reflects your brand.

2.  Categorize your merchandise displays – Display items according to type of gifts your customers are looking for. Have sections for “The Perfect Gift For Dad” , “What Teen’s Want in 2019”, “Gifts for under $20.00”, etc.

3.  Be aware of holiday gifts and decorating trends – Offer these services and products to your customers. In 2019, gnomes are the new red truck. And have you noticed that Advent Calendars are everywhere? How about a 12-days of Christmas hair care package?

4.  Work with other local business to host a shopping event, contest, etc.

5.  Invite local makers into your service business – Imagine getting the perfect holiday hair cut and being able to find unique gifts made locally at the same time.

6.  Offer convenience – Online stores, major retailers, and restaurants are equipped to offer undeniable convenience. There is no reason a local business cannot compete with this. Offer online purchases from your website or an app with local store pick up, or as a restaurant, join food delivery services to offer home delivery.

7.  Up your content and social media game – Online “window shopping” is a thing. Post your gift guides and gift categories along with tips for the holidays on your blog, Facebook, and Instagram. When your customers search for these things online they will be able to find you.

8.  Consider special hours for the holidays – Big box stores always extend hours and Amazon is open 24/7. What can you reasonably do to add a bit more convenience for your customers? Maybe one evening opened later will suffice?

9.  Take advantage of community holiday festivities – Consider participating in some way. Maybe extending hours to be open during the event or participating with a pop up shop at the actual event.

10.  Collect customer information – This is valuable information to have for future promotions and next year’s holiday season. If you already have this information, check in with them and email them your latest blog posts, gift guides, and tips.

 

 

About The SBDC and the Author
The Iowa SBDC provides no cost technical service and advice for Iowa Small Businesses and individuals looking to start a business. The 15 centers through out Iowa are run by small business experts and counselors who have the experience and expertise to confidently help on a number of topics

Sue Pitts, Regional Director for the Iowa Western SBDC in Council Bluffs has been in the position since 2004. Sue has become the state expert in Digital Marketing and Website Content. She teaches small businesses on these topics on the local level as well as at regional, state, and national conferences.

Summer for Small Business

This summer has been hot.  With many days climbing into the upper 80’s and 90’s, it’s hard to find motivation to accomplish any amount of work.  All you want to do is hop in the pool, or sit on your couch with a fan.  It can even be hard to run a business in this heat.  Customers may not want to walk or drive to your store to avoid the heat.  Your employees may lose productivity as they take vacations or simply daydream about being outside in the fresh air.

However, you can still improve your business in the summer months.  Here are four ideas to help you keep your business running smoothly when even the air conditioning is struggling.

  1. Take advantage of “rainy days”.

I know many people still use the adage “I’ll save it for a rainy day.”  Generally this means they’re saving some money for when it’s tight, but it also means sometime when a job can be accomplished.  Luckily for us, this summer has brought many rainy days to accomplish tasks.  However, you don’t need to watch the sky to know if it’s a rainy day.  A rainy day can be any time that you can accomplish a task.  Is your business often quiet before 10 am?  Then schedule some time in the morning to work on that bookwork that’s been piling up.  Do five people call on Tuesdays compared to 20 the rest of the week?  If so, start using that day to update your client profiles.  “Rainy days” can happen at any time.

  1. Make sure all your systems are running smoothly.

This one is especially true if your business involves a lot of outside work or has many pieces of equipment.  The summer months are the best time to fix anything that may be broken on your office building or within your machinery.  Take this one from me as I have had to set fence posts into the cold ground on Christmas Day and also demolish a building in mid-May.  I would much rather demolish buildings all summer then set one fence post in December.  Your employees will thank you if you accomplish outside tasks during the warm summer months.

  1. Plan an employee or customer appreciation night.

This one can help you express your gratitude to loyal employees and customers.  Rent a park, picnic shelter, or even just offer up your house one night (assuming it can hold all your employees).  Your customers will appreciate the gesture, and it can help build comradery between your employees.  It can also be cheap, especially if it’s an outdoor employee potluck or barbeque.

  1. Take a class

This is a page right out of your college handbook.  If you get behind on your degree, take summer courses.  Running a business is no different.  If you’ve been running your business for a long time, taking a class that is focused on your business can give you new perspective on how to attract customers, create marketing schemes, or simply get you up to date with new rules and regulations.  There are many classes for business owners offered in the summer months.  If you are interested in this, check out www.iowasbdc.org/workshop-calendar/ for different classes, workshops, and seminars offered around the state of Iowa.

Studying vs. Learning in Entrepreneurship

Students.  The children, teens, and young adults out there in the world trying to learn as much as they can in order to succeed in life.  As I am currently one of these, I can say that studying and learning is my job.  As I write this post, I am well aware of the fact that I have three to four hours of homework waiting for me at home, and I can’t say I’m excited about that fact.  Some business owners may understand my pain as you have piles of bookwork stashed away to be tackled when you have time.

But this blog isn’t for the people who already have a business started.  It’s for all of the people who are reading this, hoping to gain more information on how to be a business owner so they can become one too.  You’re doing your homework, so to speak.  Reading entrepreneurship articles for hours, trying to understand as many concepts as you can to ensure that your vision can come to fruition.

I realize that I’m still a student with very little “real world experience”, but I can say that I understand homework and studying.  It’s tedious, your hand cramps as you write yet another research essay, and you can’t cram any more accounting information into your head.  Studying is legal torture, and you cannot convince me otherwise.

I’ve also heard that you never stop learning.  But I’m beginning to realize that we have confused studying and learning.  Many students study for hours to simply regurgitate what they memorized onto a test, and then forget it immediately after.  They haven’t really learned anything, just passed the test.  Most of you are probably wondering what this has to do with business, but I’m not just talking about formal education here.  Many people have goals and visions for a future company.  They spend hours researching on sites like Forbes, Entrepreneur, and The Wall Street Journal hoping to eventually figure out exactly how they should put this idea into action.  They study, and while this isn’t bad, it’s not learning.

Growing up on a farm, I never studied how to check cattle.  There was never a website that I logged onto to figure out how to unlatch a gate, or read a magazine article on how to carry a hay bale.  But I learned a lot.  It was informal, and often painful as I would get kicked or stepped on, but I learned a lot about how to properly handle an animal and farm work that I couldn’t have learned through a book.

One Entrepreneur article says that many people have the knowledge to become business owners, they have studied so much that they have “information overload” and don’t know where to go.  They haven’t turned their hours of studying into learning.  The article goes on to encourage aspiring business owners to take action, and start the business.  You can’t fail if you never start, but you can’t succeed either.

I doubt that most of you will have to worry about stampeding cows if you open your business, but there are other things that will be difficult.  You may struggle finding loans, creating a customer base, or marketing your product.  However, I would have never learned how to jump over a fence if I never had the cattle in the first place.  Maybe it’s time for you stop studying entrepreneurship, and start learning about entrepreneurship.

If you’re ready to take the next step but are still uncertain on exactly where to go, the Iowa SBDC is here to help.  Visit http://iowasbdc.org/ to schedule your free and confidential advising appointment.

 

Springtime for Small Business

The time around the changing of the year is commonly used for reflection and revitalization. We make promises of things that we will change about ourselves, or we set goals for the year, tough goals, that we may or may not reach. Today, I want to focus on something much more practical. With the longer days and warmer weather, you will probably be preparing to rid your house of the clutter that has accumulated over the past year. This is a great opportunity to do the same for your small business. Small business owners should take some time to perform some spring cleaning on their businesses.

What do I mean by that? Spring cleaning is all about getting rid of clutter. “Clutter” is anything that is inhibiting you from creating value for your customers.  For your business, “clutter” may be the Britannica-sized stack of papers on your desk. It may be the product line that isn’t selling. It may even be the employee who shows up late, drags their feet, is rude with customers, and adds about as much value to your business as the pen you’re fiddling with while you read this. Whatever it may be, it is disrupting processes and decreasing revenue. Spring cleaning is all about eliminating these things.

Why do I believe this is a good activity for your business? Because I’ve seen your desk. Not your desk specifically, but the desk of a small business owner. It is a desk that bears less resemblance to a desk than it does the Amazon rainforest. As a small business owner, you have a plethora of responsibilities, and when these overwhelm you it can lead to disorganization and waste. Spring cleaning gives you a great opportunity to ask yourself questions like “how much time am I wasting on everyday tasks?” and “what can I do to change that?” You don’t need to find drastic pivots to make to your business model or philosophy. Save that nonsense for New Years. The goal is to look for simple improvements to make to your business and your daily routine.

Why spring? No particular reason, just tradition. Also, with this being around tax time, you may already be getting ideas for things that need to be cut or changed. More than anything, the end of another long winter often makes for an influx of productivity from Midwesterners, who are weary of hiding in their caves to escape the cold. Now, you can obviously choose a different time to do your spring cleaning, although then it will just be “cleaning,” and no one likes boring ol’ cleaning. Whenever you do your “spring” cleaning, the important thing is that you are setting aside time to identify and eliminate the clutter in your business.

The Amazon…or your desk?

Remember, spring cleaning is not another opportunity to make sweeping resolutions about the direction of your business. You should be looking for small, tangible changes to make that immediately increase productivity or improve business processes. Most importantly, your focus should be on eliminating, not adding. This is a time to get whatever is worthless or inhibiting out of your business. So for Pete’s sake, clean your desk.

Great Coaches, and What They Teach Us

Football. America’s most popular sport. Most of us who will watch the game on Sunday will look for big plays from stars like Rob Gronkowski, Fletcher Cox, and Tom Brady. However, we will pay little attention to the chess match occurring between the men roaming the sidelines. In our star-driven sports leagues, we often miss the valuable lessons that great coaching can teach us. The way a coach runs a team can be a great model for how a small business owner runs their organization. As Super Bowl LII approaches, let’s see what we can learn from three of the greatest masterminds in NFL history.

Vince Lombardi

“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.”

Lombardi’s Packers dominated the NFL in the 1960s, going 98-30-4 and winning five championships in nine seasons. From day 1, Lombardi made his players commit to excellence. He established a culture of winning in Green Bay, bringing in veterans like Emlen Tunnell to provide the necessary leadership, and jettisoning players who didn’t fit his mold. He brought attention to detail, spending hours watching film to gain an advantage, and expecting his players to do the same. More than anything, he communicated to his team that he expected hard work, dedication, and discipline from them, and embodied all of those qualities himself. The success of his strategy is plain to see.

Lombardi’s success was built on a culture of hard work, determination, and “individual commitment to a group effort.” Your small business should be, too. There was nothing innovative about Vince Lombardi’s offense. It relied on a power run game and efficient passing, just like most offenses of that era. Your coffee shop relies on great coffee and a warm atmosphere, just like most coffee shops of today. So what will make you successful? Communicating your vision to your employees in a clear way. Being the type of worker you expect your employees to be. Creating buy-in by rewarding exceptional performance. In short, a winning culture.

Before becoming Green Bay’s head coach, Vince Lombardi was the offensive coordinator for the highly successful New York Giants. He won two championships with New York in four seasons. At his first team meeting as Packer’s head coach, Lombardi famously looked around at his players and told them “I have never been on a losing team, gentlemen, and I do not intend to start now.” Sure enough, the Packers would never have a losing season under Lombardi.

Chuck Noll

“Champions are not champions because they do anything extraordinary but because they do the ordinary things better than anyone else.”

In 1969, Chuck Noll became head coach of the Pittsburgh Steelers, a franchise that had been around for 36 seasons, and only had a winning record in eight of them. They had never won a championship. They had never even won a playoff game. However, over the course of four seasons, Noll turned the Steelers from losers into winners. He accomplished this by emphasizing fundamentals. He spent time in practice focusing on things like footwork, stances, and proper tackling, things you wouldn’t expect professional football players to need much brushing up on. He was famous for emphasizing that football is about blocking and tackling, and avoiding the media spotlight both during his career and after retirement. He also developed a defensive scheme that built the Steelers into 4-time Super Bowl champs in the 1970s. In all things, Chuck Noll was controlled, intellectual, and understated.

Noll brought a singularity of purpose to the Pittsburgh Steelers that the franchise had never known. In emphasizing the details, he focused his players on one goal: winning. Everything else he tuned out. This is a valuable lesson for small business owners. The best companies aren’t always the ones that are constantly innovating, or continuously pivoting to explore new opportunities. They capitalize on their current opportunities by focusing on fundamentals. Quality products. On-time deliveries. Customer service and retention. Consistency and efficiency. These are the things that make a business successful long-term.

There aren’t many quotes from Chuck Noll on the internet. As a coach, he wasn’t a motivator, and he wasn’t one for long-winded speeches. He didn’t give many interviews with the media. He let his work speak for itself. 23 years, 209 wins, and 4 Super Bowls later, he quietly rode into the sunset as one of the NFL’s all-time greats.

Bill Belichick

“If you sit back & spend too much time feeling good about what you did in the past, you’re going to come up short next time.”

In case you haven’t heard, the New England Patriots are in the Super Bowl again. This isn’t just the second time in two years. This is the eighth time since 2000, when Bill Belichick became their head coach. This was the 16th time in 18 seasons that the Patriots finished with double-digit wins. This nearly-unparalleled level of success can be attributed the Belichick’s simple, but profound philosophy: “No Days Off.” After winning his fifth title last year, Belichick pointed out that “as great as today is, in all honesty, we’re five weeks behind 30 teams in the league in preparing for the 2017 season.” Belichick wasn’t about to take time reveling in his massive success. He didn’t want to. He was ready to get back to work.

We all need time to rest. However, business owners simply can’t afford as much time as most people. To successfully build a company from the ground up, it takes a type of drive and work ethic that most of your friends might see as crazy. But to you, it may not even seem like work. “I don’t see this as work, this actually beats working,” says Belichick. The old adage goes something like “if you do something you love, you’ll never work a day in your life.” Of course, even the most passionate of entrepreneurs have those days when running a business feels like a grind of epic proportions. But few would trade it for something else.

Belichick is preparing to coach in a Super Bowl for the eleventh time in his career, his eighth as a head coach. Over the course of his storied tenure, he has never taken his foot off the gas pedal. Most coaches would have retired by now, being satisfied with their millions of dollars and notoriety. But some live for the grind, and wouldn’t be happy doing anything else.

 

Owning a business isn’t always as clear-cut as coaching a football team. However, just like movies, sports are often a great metaphor for life. There are valuable lessons to be learned, both from playing, and from watching the great ones. For small business owners especially, many of the traits that win out in sports, win out in life. So as you watch on Sunday, don’t merely be a spectator; be a student. There’s plenty to learn out there.

The Value of Small Business

Where did you spend your time growing up? What are your favorite memories of your hometown? For many of you, the answers to these questions will involve a local business. I was fortunate enough to grow up working in a family coffee shop. I saw firsthand the benefits a small business can provide to a community, and they go far beyond your morning cup of coffee. They give your town personality, provide superior service, and make a greater economic impact than chain stores.

 

Identity

Small businesses are often the defining aspect of your community’s identity. Whether it’s the coffee shop where you and your friends meet every weekend, the bookstore where you buy your kids’ Christmas presents, or the thrift store where you design your wardrobe, local businesses create the environment that is your town. They give the community places to gather, they provide goods and services from trusted sources, and they probably gave you your first job. Almost every town has “their spot,” the place to which you immediately refer visitors to show them what your community is all about, and some lucky towns even have more than one. These businesses give their communities life, and occupy an important place in our hearts.

 

Personalized Service

In a similar vein, there is something special about supporting a business owner that you know. This is even more true when you know you are going to receive personal, sincere service, something that superstores and online outlets just can’t match. The tailor-made service you receive at a local business comes from real relationships forged between the owners and their customers. My parents used to sit down and talk with customers for extended periods of time, showing genuine concern for what was going on in their lives. The relationships they forged with their customers were irreplaceable. While this may violate one of Don Corleone’s most important rules (“It’s not personal. It’s strictly business.”), it ultimately means a better experience and a better product for the people in the community.

 

Local economic development

For every $100 spent at a local business, an average of $68 stay in your community, compared with $43 out of every $100 from non-local businesses. This local spending includes wages, local supplies and services, and community donations. Additionally, small businesses are likely to be the first job for many of the kids in your community. This gives the added benefit of providing work experience in what is likely to be a friendly environment. I remember working with a lot of my friends from high school at my family coffee shop. In addition to economic benefits from supplies and wages, small business owners are more likely to support local booster clubs and events, providing additional value for the community.

 

Small businesses and the people who run them are irreplaceable in a community. That’s why America’s SBDC Iowa’s mission is “to support the collaborative economic development of Iowa by providing entrepreneurs and businesses with individual consultation and educational resources necessary to assist their businesses to succeed.” If you need help growing your business, or have a new idea you want to test, let us know. Consultations are free, and we have 15 centers conveniently located throughout the state. Let us help get you off the ground.

 

iowasbdc.org

iowasbdc@iastate.edu

515-294-2030

 

Special Thanks: Leah Pitts

3 Affordable Marketing Methods

Everyone knows marketing is essential for businesses, especially small businesses. Without the help of media exposure that larger firms experience, it can be difficult to spread the word about your business and your service. Also, it often seems that the price you pay isn’t worth the benefits you receive. Furthermore, marketing is a constantly evolving sector of the business world, making it hard to keep up with competitors. What every small business needs is an affordable way to stay relevant in their communities. Below, I will outline three ways you can spread the word about your business without breaking the bank.

Social Media

This is an obvious one. As a matter of fact, most if not all of you reading this now probably implement social media as a marketing channel. But aside from the bare minimum of occasional Facebook posts, how can you use social media to market your business?

  1. Ask for feedback: Facebook, Twitter, and Instagram all serve as direct lines of communication between you and your customers. Why not take advantage of that to see what they think? A simple “how are we doing?”-type question on one of these platforms lets customers know you’re interested in their opinions, and want to improve their experience as much as possible.
  2. Utilize hashtags: Hashtags help your posts show up in searches on social media sites and in Google. They are especially useful for Twitter and Instagram. Try to use phrases that are commonly searched. These can also be used to start a conversation about your business, or involving your business.
  3. Content, content, content: Jeffrey Hayzlett, former CMO at Kodak, writes in a 2016 article for Fortune that “Developing quality content should be the rule, not the exception, regardless of industry.” For small businesses, this means pictures and videos of your business, customer testimonials, blogging, and above all a consistent online presence. Being active, active, on social media is the easiest way to reach customers of all types in 2017.

Email

In a 2015 article for Entrepreneur, Kabbage CMO Victoria Treyger advises making email a “heavy hitter.” “Not only is it effective,” she says, “it’s also desired. In study after study, consumers regularly say that email is their preferred channel for brand communications.” Emails can be used to inform customers of upcoming sales, new items in stock, or new plans for the businesses future. All of these things help keep your customers engaged.

When emailing customers, make sure your message is clear and concise. Just because people like email marketing doesn’t mean they want to read an essay. Make sure the design is clean, and add something interactive, such as a website or Facebook link. If you are promoting a deal on your website, something like an “Order Now” button would be appropriate.

Consider utilizing a marketing platform such as Campaigner for this tactic. These services are very affordable, and help you design email templates, automate the process, and maximize the effectiveness of your email campaigns. Considering the already heavy burden on small business owners, services such as these can add a lot of value to your marketing. 

Texting

Texting is a fast and easy way to reach customers, especially those in their teens and early twenties. In some cases, it can be even more effective than email marketing. Texts are easier to open, and take less time to read, making them an ideal marketing channel for young consumers.

A brief note before I can go on: spam texting can cause problems with the FCC. Minda Zetlin, in an article for Inc.com, advises business owners to “make sure customers really do want your texts – and you can prove it.” In other words, make sure you have a record of customers who have opted to receive your marketing texts.

One of the biggest keys to successful text message marketing is to offer something of immediate value. KeySplash Creative CEO Susan Gunelius, in a 2012 article for Entrepreneur, advises that since “text messaging is an instantaneous medium, you should include real-time offers. Whether you’re providing information about a sale or a new product, the message should describe the benefits of acting now.” Gunelius also advises users to identify themselves when communicating with customers, to avoid “the spam treatment.”

Remember, marketing your business doesn’t mean you have to break the bank. There are plenty of ways to affordably communicate with consumers. Oftentimes, these are just as effective, even more effective, than other traditional marketing channels, such as radio or print ads. The tactics outlined above would mean more work for the owner, but would go a long way in freeing up capital to compensate employees, expand your business, or improve your products.

 

For further reading:

Best SMS Marketing Software – fitsmallbusiness.com

 

6 Ways to Market Your Business for Less Than $100 – Entrepreneur

 

101 Small Business Marketing Ideas – The Balance

 

Cybersecurity, Part II

Last time, we looked at some reasons to start thinking about cybersecurity for your business. You may have found yourself asking, “Ok, how can I protect myself?” Below is a high-level overview of three fundamental aspects of cybersecurity, as well as some resources for further study. This technology doesn’t take a genius to understand, just a little patience and willingness to learn. Your business’s survival may depend on it.

Firewalls

“Firewall” may be a term we are all familiar with, but many of us don’t know what exactly a firewall is. According to cisco.com, “A firewall is a network security device that monitors incoming and outgoing network traffic based on a defined set of security rules.” Basically, a firewall will use filters to keep certain pieces of information out of your network. Most firewalls will let you choose which filters you want. In a post on their website, Comodo explains that firewalls can be configured to “prevent access to certain websites,” “prevent employees from sending certain types of emails,” and “prevent outside computers from accessing computers inside the network.” Some operating systems have firewalls built-in, including Mac OSX and Microsoft Windows. According to Microsoft, setting up a firewall is “the most effective and important first step you can take to help protect your computer.”

Firewalls can often act as your router, and even have “more advanced features that are designed to offer a superior level of [defense],” as opposed to a normal router, according to Manx Technology Group. For this reason, they recommend a firewall for a small business, rather than a traditional router. MTG goes on to list various features you will want when choosing a firewall. These include:

  • “Internet connection support”
  • “Wireless support”
  • “Antivirus”
  • “Intrusion Prevention Service”
  • “Web filtering”
  • “Reporting”
  • “Virtual Private Networks (VPN)”
  • “Technical support”

Popular vendors of firewalls include Cisco, Fortinet, and Sophos.

Antivirus software

Geeks On Site offer the following explanation of antivirus software: “Antivirus software, sometimes known as anti-malware software, is design to detect, prevent and take action to disarm or remove malicious software from your computer such as viruses, worms, and Trojan horses.” They go on to list the three scanning detection processes antivirus software uses:

Specific Detection, Generic Detection, and Heuristic Detection. Specific Detection “works by looking for known malware by a specific set of characteristics.” Generic Detection “looks for malware that are variants of known ‘families,’ or malware related by a common codebase.” Heuristic Detection “scans for previously unknown viruses by looking for known suspicious behavior or file structures.”

In a March 2007 article for TechRepublic, Erik Eckel lists 10 thing to look for in an antivirus application. These were:

  • “Potency”
  • “Low overhead”
  • “Centralized administration”
  • “Email protection”
  • “Compatibility”
  • “Effective reporting tools”
  • “Technical support”
  • “Certification”
  • “Simplified licensing”
  • “Reasonable cost”

Techradar offers suggestions on which antivirus software to use for your business: http://www.techradar.com/news/best-business-antivirus-8-top-paid-security-tools-for-small-businesses

Data backup

Losing data can be the ultimate business killer. According to atlantatech.net, “the cost of lost or stolen data access is estimated at $1.7 billion per year,” industry-wide. Backing up your data is the simplest step you can take to avoid these huge costs. In a 2014 article for CIO, Paul Mah advises that businesses use the “2+1” strategy. “For critical data,” he says, “businesses should make two full copies, maintained on separate physical devices. In addition, a third copy should be kept offline, preferably stashed at another location.” He points out that having one copy in a different location “protects a business from fires, floods and other localized natural disasters.”

Cloud backup solutions are gaining traction among small business owners these days, with companies like Carbonite, CrashPlan, and Backup Blaze being major players in the field. The previously mentioned Atlanta Tech article gives the following as factors to consider when choosing a cloud backup provider:

  • “Is Public, Private, or Hybrid Cloud the Best Bet for Your Business?”
  • “Which Type of Backup Schedule is Best for You?”
  • “Do They Offer Sufficient Flexibility for Your Storage and Scalability Needs?”
  • “How are Their Uptime Guarantees?”
  • “Do They Offer Sufficient Data Security and Compliance?”
  • “Do You Have Adequate Bandwidth?”
  • “Is There an Opportunity for Unified Business Communications?”

While cloud backup is the hip thing to use, Paul Mah recommends tape storage technology for your backup.

There are plenty of options out there for Cybersecurity. It all may seem a little overwhelming at first, but the important thing to do is educate yourself. Below, I’ve listed some resources that can be very useful in learning what security you need, how that security works, and what the options available are. Be sure to check them out, and ask your SBDC counselor about the Cybersecurity Workbook.

For further reading:

https://www.cio.com/article/2378019/small-business/how-to-build-a-storage-and-backup-strategy-for-your-small-business.html

https://www.techrepublic.com/article/10-things-to-look-for-in-an-antivirus-application/

http://www.techrepublic.com/blog/10-things/10-things-to-look-for-in-a-hardware-based-firewall/

https://www.comodo.com/resources/home/how-firewalls-work.php

Cybersecurity, Part I

Why should a small business need to worry about cybersecurity? Sure, there are hackers and data thieves out there, but they only go after big corporations, right? Some of the numbers regarding the threat to small businesses may surprise you. While you shouldn’t let these statistics paralyze you, or shy away from the competitive advantage technology can provide, you need to be aware of the risks that exist. Let me outline for you why you need cybersecurity, and give you some numbers for perspective.

Organizations are relying more and more on cloud services. While this provides extra convenience, it is also a great target for potential hackers. Additionally, any device connected to the internet can be attacked. Munichre.com reports that “one-third of U.S. consumers experienced a computer virus, hacking incident or other cyber attack in [2016].” Clearly, attackers are more active now that they know the pool of potential victims is growing. Not only that, but they know that businesses are viable targets as well. On October 31 of last year, nudatasecurity.com reported that “64% of companies have experienced web-based attacks.” Unfortunately, the increased convenience and capabilities that come with cloud storage, digital technology, and the like, also bring increased risk in the form of viruses, ransomware, and data breaches.

These attacks can damage your business in any one of a number of ways. The most prominent form of damage among small businesses, however, is financial. A 2015 report by juniperresearch.com estimated that “the average cost of a data breach…will exceed $150 million by 2020.” Now, this number is inflated by the cost of breaches to major corporations. Still, a recent Poneman Institute study revealed that small businesses (less than 1,000 employees) spent an average of $879,582 recovering from data breaches (between May 2015 and May 2016), because of theft or damage. Also, revenue losses among businesses breached averaged $955,429. This can be absolutely devastating for your business. According to the study, 60% of small businesses who experience these attacks go out of business within six months.

At this point, it may seem obvious that there is a serious threat to small businesses from cyber attackers and data thieves. According to smallbiztrends.com, “43% of cyberattacks target small businesses.” That number is staggering, considering the number of large firms and individuals who could be targeted instead. In a June 2, 2017 article for Business News Daily, Sammi Caramela observed that “The…reason small businesses make such appealing targets is because hackers know these companies are less careful about security.” Most small business owners underestimate the threat to their businesses. As Caramela points out, “small businesses fall into hackers’ cybersecurity ‘sweet spot:’ They have more digital assets to target than an individual consumer has, but less security than a larger enterprise.”

You don’t have to live in fear of a cyberattack on your business. But you shouldn’t be naïve either. Next week, we’ll go over some valuable tools you can use to protect your business.

Also, be sure to get the Cybersecurity Workbook from your SBDC Adviser.

Crowdfunding: Pros and Cons

Crowdfunding has become a popular way of obtaining capital among entrepreneurs. Everything from movies to bottle cutters have gone through the financing process on sites such as Indiegogo and Kickstarter. Many have achieved success this way. Others have failed. Today I want to explain what exactly crowdfunding is, and what the pros and cons of using this method are.

According to investopedia.com, “Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.” The purpose of crowdfunding is to increase the availability of funds for entrepreneurs by putting them in contact with a larger pool of potential investors. On the other side of the equation, investors can avoid the risk of putting large sums of money into a single venture, and instead only donate amounts as low as $10. Entrepreneurs are required to provide updates to investors periodically, protecting the investors’ interests. Crowdfunding is sometimes rewards-based, meaning investors will “get to participate in the launch of a new product or receive a gift for their investment,” according to Investopedia. Equity-based crowdfunding is another option. This option works more like a typical investment, where funders become partial owners of the company. Equity-based funding is fully regulated by the SEC.

Crowdfunding comes with its own set of problems. According to floship.com, there’s “a huge amount of uncertainty when it comes to the accounting rules for funds raised through crowdfunding.” Because crowdfunding doesn’t work like a typical investment (such as a loan), there is confusion as to whether funds received in this manner should be declared as capital or income. Additionally, each state will have different rules on taxing this money. Some legal experts are also concerned that the lack of regulation will lead to scammers using crowdfunding sites to grab free money (Forbes). This is due to the businesses seeking funding not being required to provide financial statements to investors. This may cause many investors to put a lot of money in the hands of irresponsible business owners. There are other problems with crowdfunding, but these are some of the most widespread.

Despite the risks, crowdfunding has considerable benefits that come with it. After all, there have been a number of successful ventures that have used crowdfunding to reach their goals (onlinemba). Notably, all-or-nothing crowdfunding platforms have no participation fee, and return funds to investors if the project doesn’t reach 100% of its goal. It can also be a valuable marketing tool. According to Tanya Prive on Forbes, “an active crowdfunding campaign is a good way to introduce a venture’s overall mission and vision to the market, as it is a free and easy way to reach numerous channels.” This is because “many crowdfunding platforms incorporate social media mechanisms, making it painless to get referral traffic to your website and other social media pages.” Another attractive aspect of crowdfunding, according to nibusinessnessinfo.co.uk, is that “your investors can often become your most loyal customers.” After taking part in the financing process, it is likely that they will not only buy whatever you are selling, but also will refer their friends to the product or service. This makes your investors your marketing team, minus the salary expense.

Like all investments, there are considerable risks and benefits that go along with crowdfunding. When done the wrong way, investors can waste considerable amounts of money, and business owners can lose customers and develop a negative image. When done right, however, it can result in visionary products being developed, and benefit everyone involved in the process. If you decide to invest in a crowdfunded project, be sure to proceed with caution. If you decide to use crowdfunding to obtain funds, make sure you keep your investors informed, and develop a plan beforehand. Despite the criticism, plenty of businesses and entrepreneurs have used crowdfunding successfully, and you can as well.

For further reading:

https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-crowdfunding

https://www.cnbc.com/2015/09/15/how-to-crowdfund-successfully-tips-from-experts.html