5 Big Benefits of Email Marketing for Your Small Business

What channels does your small business use to promote its products or service and interact with its audience? Even if your small business operates locally, you should consider using email. Email marketing offers several benefits that can help your small business succeed.

#1) Customer Service

You can use email marketing to improve your small business’s customer service. It offers a direct line of communication between your small businesses and its customers. Maybe a customer wants to know if your small business has a product in stock, or perhaps a customer wants to when your small business will be open. Regardless, you can use email marketing to communicate with customers while achieving a higher level of customer service.

#2) High ROI

Email consistently tops the charts as offering one of the highest return on investments (ROIs) of all marketing channels. One study found that the average ROI of email marketing is 3,600%. If you spend $1 on email marketing, for instance, it may generate $36 in revenue for your small business. You won’t find that kind of ROI with other marketing channels.

#3) Long-Lasting

Email marketing is long-lasting. Once you’ve convinced a customer or prospective customer to sign up for your small business’s newsletter, you can send him or her emails. Newsletter signups imply permission. Customers and prospective customers will give you permission to send them emails upon signing up. And you can continue to send them emails for as long they stay subscribed.

#4) Personalization

Another benefit of email marketing is personalization. Rather than sending the same generic emails to all customers and prospective customers who sign up for your small business’s newsletter, you can send them personalized emails. Personalized emails are customized with information that’s unique and specific to each recipient. You can mention their names in the emails, or you can mention the products or services they’ve purchased. Regardless, email marketing makes it easy to create personalized correspondences such as this.

#5) Measurable

It’s worth mentioning that email marketing is measurable. As a form of digital marketing, you can track the results of your small business’s email marketing campaign. You can see how many recipients opened your small business’s emails, how many clicked the buttons or links in those emails, and you can see how many recipients converted by making a purchase. Email marketing is completely measurable, which makes it easy to optimize and improve.

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Top 5 Biggest Challenges Encountered By Small Businesses

Are you planning to start a small business? According to the U.S. Bureau of Labor Statistics (BLS), one in five small businesses fail during their first year of operations. Statistics such as this can be disheartening, but there are ways to increase your small business’s chances of success. By understanding the biggest challenges encountered by small businesses, for instance, you can plan ahead.

#1) Insufficient Capital

Insufficient capital is an all-too-common challenge encountered by small businesses. Regardless of what you intend to sell, your small business will need capital. Capital includes cash and credit that you can use to cover business-related expenses. Small businesses often have limited access to traditional forms of financing, including bank loans, which can make it difficult to start or grow their operations.

#2) Time Management

Many small business entrepreneurs struggle with time management. They essentially juggle dozens of different tasks, ranging from sales and marketing to operations and financing. And by performing all of these tasks, they struggle to manage their time accordingly. If you’re going to start a small business, you’ll need to emphasize time management.

#3) Accounting

We can’t talk about common challenges encountered by small businesses without mentioning accounting. All businesses, regardless of size, must keep records of financial transactions for tax purposes. Unfortunately, many small business entrepreneurs have poor accounting skills. They either assume it’s not necessary, or they wait until it’s time to file their taxes. Accounting software like QuickBooks, however, can help you overcome this challenge. With QuickBooks, you can easily record and track all of your small business’s financial transactions.

#4) Recruiting Employees

Recruiting employees is a common challenge among small businesses. Unless you plan on running a sole proprietorship — a business structure in which you are the only worker — you’ll probably want to recruit employees. But where do you find these employees, and how do you determine whether they are a good fit for your small business? Recruiting employees can be challenging for reasons such as these.

#5) Acquiring Customers

In addition to recruiting employees, you’ll need to acquire customers. All businesses have customers. Business-to-consumer (B2C) businesses sell their products or services to consumers, whereas business-to-business (B2B) businesses sell their offerings to other business owners. Regardless, both types of businesses have customers. When starting a small business, you’ll need to invest in marketing so that you can acquire customers and, thus, sell your business’s products or services.

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6 Mistakes to Avoid When Creating a Business Plan

You can’t ignore the importance of a business plan. With this formal document, you’ll know exactly what you need to do to achieve your business’s goals. At the same time, a business plan will help you secure financing, as many lenders require it. There are several otherwise common mistakes, however, you should avoid making when creating a business plan.

#1) Skipping the Executive Summary

Don’t skip the executive summary when creating a business plan. Business plans, of course, consist of multiple sections. The executive summary is typically the first section. As the name suggests, it offers an overview or summary of the contents of the business plan.

#2) Unattainable Goals

There’s nothing wrong with being optimistic, but you should set attainable goals when creating a business plan. You don’t want to set bold, unattainable goals that are beyond your business’s reach. If the goals described in your business plan are unattainable, they’ll set your business on a path to failure.

#3) Overlooking the Competition

Another common mistake to avoid is overlooking the competition. Business plans require a competitor analysis. You’ll need to specify and analyze your business’s competition in your business plan. Without a competitor analysis competition, you won’t be able to convey a unique selling proposition that distinguishes your business from other businesses in the same market.

#4) Making It Too Long

You should be conscious of the length of your business plan. Long business plans aren’t necessarily more effective than short business plans. On the contrary, if your business plan is too long, prospective investors, lenders and other professionals may not read it. How long should a business plan be exactly? Most experts recommend limiting the length of business plans to no more than 20 to 25 pages.

#5) Spelling and Grammar Errors

Don’t forget to proofread your business plan for spelling and grammar errors. Typos are bound to happen. Research shows that the average person has a typing accuracy rate of about 90%, meaning for every 10 words you type, you’ll probably make one typo. Allowing spelling and grammar errors to go unnoticed, though, can harm your business plan.

#6) Not Including Risks

Risks are an important part of a business plan. All businesses have risks. When seeking financing, investors and lenders will probably want to know about your business’s risks. You can convey potential risks in your business plan.

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What Is a Personal Guarantee for a Business Loan?

When applying for a business loan, you may have to make a personal guarantee. They aren’t required for personal loans. Business loans, though, often require a personal guarantee. Whether you’re trying to obtain a business loan from a bank or alternative lender, you may be required to make a personal guarantee.

Personal Guarantees Explained

A personal guarantee is a binding pledge or commitment that guarantees a business loan with the borrower’s personal finances. Business loans, of course, are intended for businesses. If you own a business, you can obtain a business loan to finance it. You can then use these borrowed funds to expand into new territories, invest in marketing, develop new products or otherwise grow your business. But the lender may require you to make a personal guarantee.

By making a personal guarantee, you are placing your personal finances on the line. As long as you pay back the business loan according to the lender’s terms, nothing will happen to your personal finances. If you default on the business loan, however, the lender may claim ownership of your personal assets.

Is a Personal Guarantee Necessary?

Many lenders require a personal guarantee for their business loans. Lenders must evaluate a borrower’s risk of default. If a borrower has bad credit, the lender may require him or her to make a personal guarantee. It’s the equivalent of collateral. A personal guarantee will provide the lender with recourse if the borrower defaults on the business loan. The lender can claim ownership of the borrower’s personal assets to make up for the lost money.

Of course, there are instances in which you may not be required to make a personal guarantee. If your business has good credit, for instance, lenders may not require a personal guarantee. Good business credit is a sign of trustworthiness. It indicates that lenders can trust your business to repay its debts, including its loans.

Even if it’s not required, a personal guarantee offers advantages. It can help you achieve a lower interest rate. Lenders may offer lower interest rates on business loans if you make a personal guarantee. A personal guarantee can also speed up the approval process. Lenders may approve your application more quickly, resulting in fast cash for your business.

In Conclusion

A personal guarantee is a commitment to repay a business loan using your personal finances. Many lenders require it, especially for businesses with bad credit.

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The Importance of PCI Compliance

If your business accepts credit and debit card payments, you’ll need to comply with the Payment Card Industry (PCI) standard. In the past, it wasn’t uncommon for businesses to exclusively accept cash payments. But this is no longer the case with modern businesses. Research shows that roughly two-thirds of all transactions involve a credit or debit card. You can’t ignore PCI compliance, however, when accepting credit or debit card payments.

What Is PCI Compliance?

PCI compliance involves the implementation of safeguards that are designed to protect the privacy and information of cardholders. Cardholders are customers. If your business accepts credit and debit card payments, you’ll have to access to sensitive information. Among other things, you’ll know cardholders’ names, addresses, card numbers and more. PCI compliance is all about protecting this information by following a set of rules.

It’s Required

PCI compliance isn’t optional. Assuming your business accepts credit and debit card payments, you’ll have to comply with the PCI standard. Otherwise, you could lose your ability to accept and process card payments. All of the major card companies require businesses to comply with the PCI standard. Failure to comply with the PCI standard could result in your business losing the ability to accept and process card payments.

Protects Against Data Breaches

Another reason PCI compliance is important is that it protects against data breaches. Data breaches can strike businesses of all sizes. While some people assume that only large businesses suffer data breaches, small businesses often have higher rates of data breaches. This is because small businesses have weaker security, so they are viewed as low-hanging fruit by attackers. Regardless of your business’s size, you should comply with the PCI standard. PCI compliance will protect your business from data breaches by improving its overall security.

Preserves Reputation

To preserve your business’s reputation, you need to comply with the PCI standard. PCI compliance will protect customers’ information. Customers will be able to make credit and debit card payments without fear of having their information stolen and used for nefarious purposes. As a result, your business will maintain a positive reputation. Neglecting to comply with the PCI standard, on the other hand, could result in data breaches. Customers’ information could be exposed, in which case they may have a poorer and more negative perception of your business.

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5 Tips on Pitching Your Business to Investors

When seeking financing for your business, you may have to step in front of investors. There are different forms of financing, including debt and equity. Debt financing is the act of borrowing money from a lender. Equity financing is the act of selling an ownership stake in your business to an investor. If you’re going to use the latter financing method, you’ll have to pitch your business to investors.

#1) Convey a Unique Value Proposition

Conveying a unique value proposition will help you secure equity financing from investors. There are nearly 32 million small businesses in the United States, according to the U.S. Small Business Administration (SBA). As a result, you must show investors that your business has a unique competitive edge over its counterparts. This is where a unique value proposition comes into play. A unique value proposition is something that distinguishes your business from the rest.

#2) Highlight Case Studies

In addition to a unique value proposition, you should highlight case studies when pitching your business to investors. Investors want to see data backing up your idea for a successful business. Assuming your business is new and still in the early stages of being rolled out, you may not have any data on hand. However, you can always use existing case studies that you find online. Look for case studies that reveal similar businesses and their respective level of success.

#3) Keep It Short

You should keep your pitches short and concise. Investors are busy people. They have to research prospective businesses to determine which ones to invest in, and they have to provide advice and recommendations to the businesses in which they invest. If you’re going to pitch your business to an investor, keep your pitch short and concise.

#4) Speak With Confidence

The way in which you speak when pitching your business to investors will influence your chance of securing financing. Speaking with confidence will increase your chances of success. Investors want to know that you believe in your business. With a confident tone, they’ll feel more comfortable buying an ownership stake in your business.

#5) Offer Realistic Projections

You should offer realistic projections when pitching your business to investors. Financial projections are an important part of a pitch. They provide insight into how much revenue your business is expected to generate in the future. Offering realistic projections shows investors that you are honest.

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5 Common Myths About Business Credit You Shouldn’t Believe

As a business owner, you should closely monitor your business’s credit score. Business credit scores can fluctuate. With a high business credit score, you’ll have an easier time securing loans and other forms of debt financing. A low business credit score, on the other hand, can pose financing challenges. And without financing, you may struggle to grow or even run your business. Nonetheless, there are several business credit myths that you shouldn’t believe.

#1) Same as Personal Credit

Business credit is not the same as personal credit. Business credit refers to the credit worthiness of a business entity. Personal credit refers to the credit worthiness of an individual person. They are both measured in numerical scores. Business credit is simply associated with a business, whereas personal credit is associated with an individual person.

#2) Buying Things on Credit Will Improve Your Score

In a perfect world, all goods and services that your business purchases on credit will improve your business’s credit score. Unfortunately, this isn’t always the case. Only some vendors may report your purchases to a credit bureau. These reported purchases should improve your business’s credit score. Credit-based purchases that go unreported, though, won’t impact your business’s credit score.

#3) Only Late Payments Will Harm Your Score

Like with personal credit, failing to pay your business’s bills by their due date may harm your business’s credit score. With that said, late payments aren’t the only thing that can harm your business’s credit score. Hard inquiries can have a negative impact on business credit scores. If your business has an excessive number of hard inquiries in a short period, your business’s credit score may drop.

#4) Business Credit Isn’t Necessary

While some businesses may not need it, most businesses will, in fact, need a good credit score to succeed. As previously mentioned, it affects financing. Lenders will check your business’s credit score, and they’ll use this information to approve or reject your application for a loan. Interest rates are also affected by business credit. A high business credit score will help you secure a low interest rate, meaning you’ll pay less over the term of a loan.

#5) Not Available for Sole Proprietorships

Some business owners believe that business credit isn’t available for sole proprietorships. The truth is that all businesses are eligible for business credit. Whether your business is an S-corp, LLC or sole proprietorship, you can build credit for it.

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In-House vs Outsourced Payroll: Which Is Best?

How many employees does your business have? While some small businesses are structured as sole proprietorships, most are structured as either a limited liability company (LLC) or an S-Corp. And research shows that small businesses in the United States have an average of 10 employees. Whether your business has more or fewer employees, you’ll have to pay them. The process of paying employees, of course, is known as payroll. You can perform payroll in-house, or you can outsource your business’s payroll to a third party.

Benefits of In-House Payroll

You’ll inevitably save money by choosing in-house payroll. In-house means that you perform it internally within your business With in-house payroll, you’ll be responsible for tracking employees’ hours and, ultimately, paying them for their work.

By choosing in-house payroll, you’ll gain a better understanding of your business’s operations. You’ll be able to see firsthand how many hours your business’s employees worked as well as how much money those employees earned. With outsourced payroll, a third party will handle this data.

In-house payroll is easier than you may realize. There’s dedicated payroll software available that you can use to pay your business’s employees. Alternatively, you can use QuickBooks. QuickBooks offers an in-house payroll service at

Benefits of Outsourced Payroll

There are reasons to consider outsourced payroll as well. If your business only has a few employees, in-house payroll may suffice. For a larger business with more employees, though, you may want to choose outsourced payroll. Outsourced payroll will allow you to focus on running and growing your business rather than payroll-related tasks.

You won’t have to worry about filing fax forms with outsourced payroll. Taxes, of course, are a component of payroll. When you pay employees, you’ll have to withhold some of their earnings, and you’ll have to submit this information to the Internal Revenue Service (IRS) at the end of the respective period. Outsourced payroll eliminates this burden. By outsourcing your business’s payroll, a third party will take care of these tax forms.

Mistakes are less likely to occur with outsourced payroll. Providers of this service specialize in payroll. They know how to track employees’ hours, pay employees and file all of the necessary tax forms. This doesn’t mean that mistakes never happen. When compared to in-house payroll, though, mistakes are less likely to occur with outsourced payroll.

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What Is Liquidity Ratio in Accounting?

When seeking financing for your business, there are certain metrics you’ll need to know. Liquidity ratio, for instance, is an important metric. Many lenders will consider your business’s liquidity ratio. With a good liquidity ratio, you’ll have an easier time getting approved for financing. What is liquidity ratio in accounting exactly, and how do you calculate it?

The Basics of Liquidity Ratio

Liquidity ratio is a measurement of your business’s assets relative to its liabilities. Assets are items of monetary value. There are tangible assets, and there are intangible assets. Regardless, they are all items of monetary value that your business owns.

Liabilities, on the other hand, are financial obligations. Any debt that your business owes to a lender, organization or individual is a liability. Liabilities are essentially the opposite of assets. Assets represent value, whereas liabilities represent debt. With liquidity ratio, you can compare your business’s assets to its debt.

Calculating Your Business’s Liquidity Ratio

As long as you know your business’s assets and liabilities, you can calculate its liquidity ratio. There are several different formulas available for liquidity ratio. The simplest formula involves taking your business’s assets and dividing it by your business’s liabilities.

There are other formulas you can use to calculate liquidity ratio, but they all require knowing your business’s assets and liabilities. Assets and liabilities are the foundation of liquidity ratio. With this information, you can determine the correct liquidity ratio for your business.

What Liquidity Ratio Reveals About Your Business

Liquidity ratio lives up to its namesake by revealing your business’s liquidity. In other words, it’s a measurement of how easily your business can pay its debts.

Nearly all businesses have debt. Research shows that most small businesses have about $10,000 of debt. Larger businesses often have over $100,000 of debt. As your business takes on debt, though, you’ll need to ensure that you’re able to repay it.

You can use liquidity ratio to determine the ease at which your business can satisfy its financial obligations and, thus, repay its debt. A high liquidity ratio will give you peace of mind knowing that your business can repay its debt. It means your business has a lot of assets relative to its debt. And you can probably use some of its assets to pay down the debt.

Lenders may also look at your business’s liquidity ratio. Since it’s a measurement of how easily your business can repay its debt, many lenders will take into account liquidity ratio when determining whether to approve your business for financing.

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Why You Shouldn’t Mix Business and Personal Finances

One of the most common accounting mistakes small business owners make is mixing their business and personal finances. Rather than using two separate accounts — an account for their business finances and another account for their personal finances — they use a single account. They’ll use this single account to receive money from their business’s customers, and they’ll also use this account to pay for both business- and personal-related expenses. While mixing business and personal finances may sound harmless, it can lead to several problems.

Missed Tax Deductions

Mixing personal and business finances can result in missed tax deductions. As you may know, most business-related purchases can be deducted from your taxes. Whether it’s cleaning supplies, shipping services, insurance, inventory, etc., you can typically deduct them from your taxes. You’ll need to identify them, however. And with mixed personal and business finances, you may overlook some of these tax deductions. The end result is a higher tax liability that cuts into your business’s annual profits.

Increased Risk of Tax Audit

Speaking of taxes, mixing personal and business finances can increase the risk of a tax audit. The Internal Revenue Service (IRS) doesn’t explicitly prohibit business owners from mixing their business and personal finances. It does, however, require them to maintain complete accounting records. Mixing business and personal finances can make it difficult to create complete accounting records. All of your business-related transactions will be tied to the same account as your personal transactions. The end result is messy and incomplete accounting records that place you at a greater risk of a tax audit.

Unprofessional Brand Image

Another reason to avoid mixing personal and business finances is that it creates an unprofessional brand image. You may need to write checks on behalf of your business. Maybe you’re purchasing inventory from a supplier, or perhaps you’re refunding a client or customer. Regardless, if you mix your personal and business finances, you’ll have to write checks from your personal account, which will also be used for your business-related transactions. The supplier, client or customer will see your personal name on the check rather than the name of your business.

The bottom line is that you should use separate accounts for your business and personal finances. Mixing these finances together under a single account can lead to missed tax deductions, an increased risk of a tax audit and an unprofessional brand image.

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