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Management January 28

Small Business Budgeting For The New Year

You have seen in recent times how uncertain the future can be, and how seasonal fluctuations can affect your business. Fortunately, after a couple of years at the helm of your business, those fluctuations can be anticipated to a certain degree; making it possible for you to plan and budget accordingly. Here are five things you can do to make budgeting business expenses easier. 1. **Don’t put it off – create a plan:** Look at the next 12 months with the business peaks and valleys in mind. Create a strategy and a plan for how you will prepare for the slack times when revenues are good. Your strategy will help you stay focused in the heat of the battle. 2. **Stick to the plan:** If budgeting for future expenses is an important first step and creating a plan is the second, you will need to stick to the plan for it to be successful. That’s not to say you should adhere rigidly to a plan if situations change, but make sure you consider the plan and the ramifications of deviating from it in those situations. 3. **Establish benchmarks and goals:** Poor cashflow management is one of the biggest causes of small business failure, so establishing practices and strategies for properly managing your cash flow should be a priority. Make sure you’re on top of your cash flow metric and consult an accountant if you’re not sure of the best approach to take. 4. **Stay on top of your customers:** If you bill your customers by invoice and offer them 30 days to pay their bill, it doesn’t take very long for a slow-paying customer to eat up all the profit you may have had – making your busy season less profitable and putting your business at risk in slower times. To speed things up, you might offer your customers an additional discount to pay today or have a credit/debit card on file you can charge against at the end of the month. The goal is to avoid the inevitable cash flow challenges associated with slow-paying customers. The quicker you have access to that cash flow, the easier it is to manage. 5. **Start saving:** Setting aside a little cash for a rainy day doesn’t just apply to your household budget. There are a lot of unexpected business expenses that could be addressed with some money in the bank. A good goal to shoot for is 3 to 6 months of operating capital, but anything is better than nothing. Some of the smartest business owners regularly set aside some of their profits to ensure they have at least 3-to-6 months cushion should an unexpected event occur. As we get ready to start the next year, there isn’t a better time to take a look at how you did this year and project a budget forward based on this year’s results.

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Sales January 28

3 Effective Sales Tactics for Small Businesses

To run a business effectively and efficiently requires a lot of upfront effort. Efficiency demands processes, protocol, and foresight in every aspect of your business. This endeavor cuts across strategy, operations, marketing, finance, and especially sales. Here are 3 sales tactics you should master to increase your sales effectiveness. 1. **Believe in what you’re selling:** For business owners, this isn’t too big of an ask because you are intrinsically devoted to and passionate about your own businesses. You should have an easy time selling your business because you truly believe that you are the best and that what you provide is unparalleled in excellence. 2. **Scarcity principle:** For service-oriented businesses, you may encourage clients and/or potential clients to be decisive or risk having you move on to sell the services to another client, thus becoming unavailable by the time they get back to you. Using scarcity is a little different if you sell products rather than a service, but you can apply this method using the concept of promotional pricing or if you have a limited number of items in stock. 3. **Make the experience enjoyable for the customer:** When on the phone with a client, give them undivided attention, ask questions so you can learn about them, and then try to swing the casual talk towards subjects that they are familiar with and enjoy talking about. Almost every conversation you have with a potential client should end with ‘Thank you so much for giving me your time, I really enjoyed speaking with you.’ Even you don’t make the sale, you have secured an image in the client’s mind about your brand, and the quality of your services. You never know when that can turn into a referral or a potential client down the line. One of the biggest compliments your business can ever get is when someone who isn’t even a client refers you with the same confidence that your existing clients will, solely based on either an interaction with you or feedback from your existing clients. Whether you’re a lone soldier or you have a team of sales agents, incorporating these 3 sales principles will allow you to have a stronger, more efficient sales conversations. The more effective your conversations are, the fewer calls you’ll need to make and after all, better results with less effort is the true definition of efficiency.

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Operations January 28

11 Tools You Can Use to Maximize Time and Increase Revenue

Finding the right tools to help automate your processes is not always as easy as it seems. Here are a few of our favorite software products that’ll keep your business on track and ahead of your competition. Make sure these tools are right for your business with demos and free trials before committing to any contracts. #### Project Management [Trello](https://trello.com): Every project has a workflow, imagine if you could post you project plan or stickies online and further customize it for every project. No longer do your employees need to waste money on office supplies or search for stickies that fell off the wall. Trello allows your business plan and track all your projects, whether tiny or big. Do you need to quickly change something in your plan or outline, no need to worry! [WorkflowMax](https://www.workflowmax.com): Historically, project management is a mess of paperwork, folders files, whiteboards, calendars, etc. WorkflowMax works in conjunction with other tools, like Trello, to keep track of every project, who’s working on it, due dates, etc. It. Will. Change. Your. Life. #### Communication [Slack](https://slack.com/intl/en-gh/): Ever come up with an idea, but everyone’s’ calendars are already packed for the day? Plus, haven’t we established how much we all hate meetings? Slack is an amazing tool to help you stay in touch with your team, it’s a simple app, but does a lot for your productivity. [x.ai](https://x.ai): This may be my favorite thing ever. Every business owner needs a personal assistant if for nothing else, to manage their appointments. x.ai is an artificially intelligent assistant who communicates between you, your calendar, and your appointment requests without skipping a beat. All you need to do is… nothing. #### Sales/Administration [Yesware](https://www.yesware.com): Getting leads is one thing, but making sure you’re doing the best you can to convert them is another. Straight from your inbox, you can create automated nurture streams, templates, get notified about responses, and see who clicks links or downloads content. You’ll be able to easier track who is moving through the sales funnel and who is getting stuck. This tool will save you time and lower your stress levels. [QuickBooks](https://quickbooks.intuit.com): Since nowadays everything is online, so is QuickBooks! The best part of QuickBooks? It integrates with almost all small business tools, so you don’t need to copy your data into another program, they’re already there. #### Marketing [MailChimp](https://mailchimp.com): One thing I’ve learned as a marketer is that as much as we think we hate getting emails, people still read them, and even if they don’t, they at least see who is sending them emails. So, getting into your potential, current, or past customers’ inbox is a joyous thing that you should take seriously. MailChimp allows you to create automated email campaigns, so you need to do the work once, and let them do the rest for you. [AgoraPulse](https://www.agorapulse.com): Social media; some business owners love doing it, others hate it, all recognize it’s good for business. Love it or hate it running your social media is time-consuming, but AgoraPulse helps you plan your posts to a schedule that works best for your customers’ schedule and gives you your time back. [Instapage](https://instapage.com): Running a special? Offering a new product or service? Whatever it may be, you can easily create targeted landing pages and track their results easily without redesigning your website. You can quickly make multiple versions of pages to optimize your landing page success rate. #### Customer Service [Zendesk](https://www.zendesk.com): Customer happiness is the holy grail of the small business world. Happy customers tell other people about your business and create more loyal, satisfied customers. Zendesk gives you the flexibility to offer different options to best serve your customers’ needs. [Groove](https://www.groovehq.com): Here’s one place where you can quickly and easily set up all the customer service options, you’d want in one place. It focuses on helping small business grow through their offerings. If more extensive programs like Zendesk are too much for your business, this is a great option to keep your customer service simple and effective. Your business will benefit from anyone or any combination of these tools and tips. Your employees will be happy because you’re saving them time and effort. Your customers will be happy because you can make things happen faster and more effectively than before. You’ll be happy because you’ll have happy customers and happy employees, which in turn creates more revenue. And let’s face it, isn’t that why we’re all here?

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Sales January 28

5 Cost Effective Small Business Marketing Ideas

As a small business owner, you can’t afford not to invest in some form of marketing. But considering there are nearly as many ways to promote yourself as there are people, how do you know which small business marketing methods will pay off in real ROI and which ones will waste your resources. #### Perfect your elevator pitch You should always stand ready to talk about your business. Spend some time crafting a brief elevator pitch, meaning a summary of your business in a condensed version, that not only details what you do, but also gives the listener a reason to want to learn more. Typically, you only have about 8 seconds to grab their attention. Once you have them interested, you’ve got about another minute to sell them. Practice your pitch until the words flow freely. #### Request an online review or testimonial It does not matter what industry you serve, online reviews matter. It’s hard to find a customer nowadays who hasn’t checked online reviews about a business at least once. This means it’s highly likely some of your prospects have already scoped you out before they appeared on your radar. Ask your best clients to rate your business or leave a review on social media pages. Incentivize them with a high profile prize drawing, or offer a coupon or other small reward to everyone who participates. #### Ask for referrals Referral marketing is possibly the single most cost-effective marketing tactic you can employ, costing you as little as zero cash and a few minutes of your time. However, there are a few dos and don’ts when it comes to asking customers to share their contacts with you: - DO only ask happy, satisfied customers for referrals. - DO provide an incentive to both the referral and to the person referring if their lead converts. - DO make it a regular habit to ask for referrals. - DON’T continually badger the same clients for referrals. They may feel that’s all they mean to you. - DON’T let hot leads get cold. Follow up on all referrals immediately. - DON’T ask yes-or-no questions to get a referral (ex. Do you know someone who might be interested in this service?). Keep questions open-ended. #### Create sticky customers Studies show it costs 4 to 10 times more to gain a new customer than it does to keep an existing one, so don’t forget to allocate some of your marketing budget to the people who already like you and know about your business. Talk to your current customers about other products and services you offer. The key is to provide value in as many different ways as possible so you can remain their go-to choice whenever they need something you offer. Creating a sticky customer is a bit different than typical customer retention. While you don’t “lock in” a customer to your services, you do get them invested in multiple parts of your business that makes it a little more difficult for them to jump ship and switch to your competitor. #### Use social media marketing Nowadays, you’d be hard pressed to find a business of any size that isn’t established on social media in some way. Maintaining a consistent social presence can help attract new customers and retain loyal customers by keeping yourself top of mind and sharing the ins and outs of what makes your business great. And, contrary to popular belief, social media marketing does not always involve a hefty time commitment. Stick to these small business marketing secrets to stay on track: - Only set up social media accounts on channels where your target audience is likely to be. You don’t have to be everywhere to get noticed. - Start with one or two platforms and work from there – you may find that’s all you need, or all you can responsibly handle. This helps avoid the time-consuming, resource-draining “Social Media Fatigue” that plagues many small businesses who eventually determine that social media isn’t worth the effort. - Use a scheduling tool like Hootsuite or Buffer to schedule posts on your behalf. This way, you can touch your social marketing less frequently yet still provide fresh content on a regular basis. - Use Paid Ads to get directly in front of your target audience, and no one else. You set the amount to spend (even as little as five dollars!) and your social media channel goes to work putting your information in front of the people who most likely need it.

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Operations January 28

5 Cash Flow Tips for Freelancers

Having a healthy freelance cash flow comes down to ensuring you have money coming in consistently, despite the unpredictable nature of the business. That sounds easy enough, but you’d be surprised at how many people struggle in this area. Here are five tips to help you avoid being one of them. #### Get serious about budgeting This first tip is the simplest, yet perhaps the most important. As a freelancer, you can’t afford to not have a firm grasp on your finances, so budgeting becomes even more critical than for some other professionals. The idea behind creating and maintaining a budget is fairly straightforward. All you need to do is: - Compile a list (or better, a spreadsheet) of your past income and expenses. - Based on that information, make educated estimates for your future income and expenses. - Allot future funds towards necessary spending, both for your work and living expenses. - Track your cash flow so you remain aware of how much money you currently have available, how much you can expect to bring in over the next month, and what upcoming costs you need to cover. - An updated budget should tell you precisely how much money you’re spending each month so you can see where you can cut expenses. It can also help you predict how many projects you need to take to cover rent, health insurance, and other recurring costs. It’s simple enough to create a budget using basic formulas and a spreadsheet. However, you can also find many templates online to help get you started if you want further guidance. #### Expand your client base Unless you have a long-term contract with a client that pays you handsomely, you probably shouldn’t limit yourself to only one project at a time. If a customer flakes on you and they’re your only source of income, you’ll be in the fast lane to a negative freelance cash flow. The problem is, handling more than one project at a time can be difficult, depending on their complexity. As a freelancer, you’re wholly responsible for managing your own time, so it’s essential to determine how much work you can handle. To play it safe, you want to have at least two sources of income at any given moment. If you have one client whose projects eat up several hours each day, you can work around this by taking on smaller, fast-paying gigs to pad your savings. Another mistake many freelancers make is forgetting to secure leads for future work before they’re done with their current projects. This can result in a lot of downtime between clients, leading you to burn through your savings. You can avoid this by signing up for email lists for sites such as Upwork or Indeed. This will help you source leads efficiently, and avoid forgetting to job hunt even while you’re working on longer projects. #### Avoid large payment windows when possible In an ideal world, clients would always pay you the minute you finished a project. However, if you’ve been freelancing for a while, you know that’s almost always never the case. Some clients might pay after a couple of days, others will make you wait a month or even longer. Many businesses pay contractors on what’s called a ‘Net-30’ basis. This means that they have a 30-day window following your invoice submission in which to send your payment. Other companies may even have Net-60 or Net-90 payment windows, giving them almost three months to send the money they owe you. This can make it extremely difficult to maintain a positive freelance cash flow. Fortunately, if you’re attentive, these windows shouldn’t come as a surprise as clients will list them in their terms. When you start a new project, you should also have your own contract in place that breaks down your desired payment schedule. At this stage, you can attempt to negotiate shorter payment windows. Clients may not be willing to budge any lower than Net-30. However, some freelancers have had success offering ‘discounts’ for quick payments. You can also go the opposite route and add late payment fees to your contract. It all depends on the approach you want to take and what your relationship with each client is like. #### Negotiate upfront payment for large-scale projects The more time a project will take, the more important it is you see at least part of the money before it’s finished. This is a quick way to reduce risk on your end and ensure the client is committed to following through. However, this can sometimes be a tough sell for clients. If you’ve worked for someone in the past, negotiating an upfront percentage becomes simpler since they likely already trust the quality of your work. For new clients you don’t have relationships with, you need to show you know what you’re doing and that you’re reliable. The best way to paint yourself in a positive light from the get-go is with an excellent freelance portfolio. Once you start negotiating with a potential new client, you need to assess the scope of the work they need from you. That will inform your decision of how high to set your rates and what percentage to ask for upfront. All this information should be part of your proposal. In most cases, you and the client should agree on an upfront payment of between 20 and 50 percent of the final cost before setting it down in your contract. Showing a willingness to negotiate at this step can be vital to assuaging new lead’s doubts, so make sure you listen to what they need and explain how you will deliver. #### Don’t be afraid to take out a loan (with favorable terms) It’s not uncommon at all for businesses to take out loans to cover expenses until clients pay up. This isn’t the same as running out of money because you didn’t budget. It’s just a matter of getting enough positive freelance cash flow, so you don’t have to stress about expenses while working on longer projects. As we mentioned before, as a freelancer you need to think about yourself as a business. Taking out a loan isn’t something to do in desperation. However, if you have excellent credit and can secure a reasonable rate from your bank, this practice can help you stay afloat. Many people fear debt, even though we use credit all the time during our day-to-day lives. The difference is that a loan will likely provide longer repayment terms, which works in your favor if you’re in the middle of a project that’s going to take a while to complete. You will take a slight loss while repaying the amount you borrow, so it’s not something you should rely on all the time. However, it can be an excellent way to give you some breathing room when needed. As a freelancer, you have to take a more active role in managing your finances than most people do. You can’t always rely on timely paychecks, so you need to become better at budgeting and dealing with financial setbacks if you want to succeed.

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Growth January 28

5 Small Business Trends for 2021

If 2020 was a year of disruption and transition for small businesses, 2021 will be a year of continued evolution. To help you prepare, we have looked around to see what business experts are saying. Here are five business trends and changes to look out for: **Remote work will be the new normal** Remote work can be challenging when it comes to collaboration and communication, but the majority of remote workers appreciate the flexibility working from home provides. Plus, remote work means fewer overhead costs. Without an office space to pay for, you could build up your business savings or reinvest money back into your business by upgrading your software or increasing your digital marketing. **Digitization will accelerate** Many businesses were forced to digitize their operations and services this year to accommodate customers, but the bar will even be higher in 2021. Not only do customers expect businesses to have a greater online presence in 2021, they also expect a seamless digital experience. That’s especially true for Millennials and Gen-Zers, the majority of whom prioritize convenience over brand. To create a convenient experience for your customers in 2021, it’s crucial to operate with a digital-first mentality and provide options. Depending on your business and industry, you could: - Offer mobile ordering and contactless delivery - Build an ecommerce platform for your products - Expand in-person payment options to include digital wallets like Mobile Money - Create a mobile-friendly website - Add an online scheduling system to your business’ website (ex. Calendly) - Expand customer service assistance beyond phone calls **Empathy is the gold standard** After the stress and uncertainty of 2020, customers are looking for more than just quality products and services from businesses – they’re looking for compassion and empathy. Forging that connection means addressing your customers’ needs and fears. To do that, you may have to tailor your products or services, re-examine your customer service policies, or use a more compassionate voice in your marketing materials. **Financial focus will shift from growth to profitability** As businesses recover from revenue losses and budget cuts in 2020, many business owners will take a more conservative approach to their financials in 2021. Financial transformation projects like automating administrative tasks, consolidating software services, renegotiating supply and vendor contracts, or outsourcing tedious tasks can help reduce costs, and keep cashflow steady. **More consumers will prioritize shopping small** One major trend since the pandemic and leading into 2021 is the drive of consumers to support small businesses and local economic growth. Consumers are gradually recognizing their ability to grow their own local economies in cities and countries. For business owners, capitalizing on this trend requires investing in local marketing and community growth whilst boosting your social media presence with local hashtags and campaigns. **Get prepared now** Regardless of how your business fared in 2020, it’s critical to begin preparing for 2021. To set yourself up for success, set aside time to evaluate what worked well—and what didn’t—about your business model, financials, and customer experience. And don’t be afraid to ask for help along the way. If you need to free up your cash flow, consider a loan from Credit Locus. Applying is easy, and you can get a decision within minutes.

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