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Web.com Small Business Toolkit: Build Your Business Plan (Business Plan Tool)

January 9th, 2013 ::

SBA’s Build Your Business Plan

If you never got around to writing that business plan, the Small Business Administration now has a tool to make the process a lot easier. Your business plan should outline the route a company intends to take for the next three to five years and includes revenue projections, marketing strategies and more. The SBA’s Business Plan Tool provides the business owner with a step-by-step guide to get started. You can save your plan as a PDF and update it at any time. Then take your plan to a free mentor at one of the SBA’s partners (SCORE or a Small Business Development Center) to get one-on-one advice.

 

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Posted in Capital Access, Raising Capital, Resources, Small Business, small business | No Comments »

Make a (Business) Plan for the New Year

December 27th, 2012 ::

By Maria Valdez Haubrich

As 2012 draws to a close, how are you going to make sure 2013 is an even better year for your small business? One way is to pull your business plan out of the drawer (or up from your laptop) and take a look at it.

Many of us write a business plan when we first start our business, then put it away and never look at it again. Or perhaps you started your business without writing a formal plan, and it caught on so fast you didn’t need one (or so you thought). Unfortunately, without a “compass” for your business, you may find yourself ending up other than where you planned.

While in the past writing a business plan was a dreaded task, it’s become a lot easier with the advent of easy-to-use business plan software. (Check out MasterPlans, one of this site’s partners, for starters.) If you’ve never written a plan for your business, plugging your business’s information into these tools will give you a feeling of accomplishment and whet your appetite to actually complete your plan.

If you have written a business plan in the past, pull it out and go through each of the sections:

  • Company Description: Is this still accurate as to your form of business? Update your company history and any other information. If your business model has changed, spell out how and why.
  • Product or Service: Is the description of what you sell and the benefits to the customer still current?
  • Market Analysis: If your market, competition and target customers have changed, which they undoubtedly have, you’ll need to do some new market research and update this section.
  • Strategy and Implementation: Again, make sure your business strategy and the steps you will take to implement it is accurate and detailed, including dates, budgets and responsibilities of the management.
  • Management Team: Update this section as needed to reflect current roles, responsibilities, skills and accomplishments. Your team probably has a lot more under your belts than when you started your business.
  • Financial Analysis: Make sure financial statements are current and accurate.

Last, but not least, go through your Executive Summary and make sure it clearly reflects your business’s current position and future goals.

Still can’t bear to do your own plan? Get help from MasterPlans, one of this site’s partners, to have your plan professionally written or updated.

With your new plan in hand, you’ll have a useful guidebook to get you through 2013 in a more profitable fashion.

Image by Flickr user Calsidyrose (Creative Commons)

 

 

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Small Business Optimism Takes a Nosedive Post-Election

December 13th, 2012 ::

By Maria Valdez Haubrich

The recent presidential election seems to have put small business owners into a tailspin—at least, it has if the latest Wells Fargo/Gallup Small Business Index is any indication. In November (post-election), the Index dropped to -11, down from 17 in July. Entrepreneurs have not been this pessimistic about their businesses since July 2010.

The Index measures small business owners’ current feelings about their businesses, including financial status, ease of getting capital and credit, sales, cash flow, number of jobs. In the first two quarters of the year, small business owners were becoming increasingly optimistic, and the Index hit a high of 23 in May. (For comparison, before the Great Recession hit in 2008, the Index was almost always above 100.)

In November, small business owners’ future expectations for their financial situation, cash flow, capital spending and hiring during the next 12 months all worsened significantly, Gallup says. Specifically:

  • One in five small business owners (21 percent) believe the number of jobs at their company will decrease over the next 12 months. That’s the highest percentage Gallup has measured since the Index began in 2003.
  • One in three (34%) predict their company’s capital spending will decrease over the next 12 months — the highest percentage since July 2010.
  • Some 30 percent of small business owners expect “poor” cash flow during the next 12 months — the highest Gallup has measured to date.
  • Some 28 percent expect to be in a “poor” financial position 12 months from now — the highest Gallup has measured to date.

While future expectations were primarily responsible for the overall drop in the Index, the small business owners’ assessments of their current operating conditions also declined in November, falling 9 points to -10.

The results suggest small business owners, who were previously fairly neutral about current operating conditions, have become pessimistic not only about the future but the present as well.

“As entrepreneurs, small-business owners tend to be optimistic by nature, and relatively more optimistic about the future than the present,” Gallup’s results note. Will the small business owners’ outlook lead to a weakened economy going forward? If small business owners live up to their plans to cut capital spending and reduce the number of jobs at their companies, it could do so.

How do you feel about the results? Do they jibe with your outlook?

Image by Flickr user M Hildingh (Creative Commons)

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Posted in Accounting and Taxes, Capital Access, Compliance, Raising Capital, Small Business, small business | No Comments »

Small Businesses’ Credit Profiles Are Improving. Is Yours?

November 20th, 2012 ::

By Karen Axelton

Ask any small business owner who’s been trying to borrow expansion capital, obtain working capital or simply get a line of credit from a lender, and they’ll tell you it’s become far more difficult since the recession hit. However, a new study by Direct Capital Corporation suggests that the tough times may have actually had a beneficial effect on small business owners in one way: Since the recession hit in 2008 and during the past few years of recovery, small business owners’ average credit profile actually improved in 45 out of 50 U.S. states.

Direct Capital Corporation, a nationwide lender to small businesses, reviewed credit data for over 23,000 small businesses nationwide during the past 12 years. Where do small business owners have the strongest average credit profile? Nebraska topped the list, followed by Alaska, South Dakota, Indiana and Oklahoma.

The states where small businesses’ average credit profiles have declined in the past four years are Washington, DC (which had the lowest average credit profile), followed by Rhode Island, New Mexico, Montana and Texas.

Direct Capital Vice President of Marketing Stephen Lankler says one reason for the surprising change is that business owners have a heightened awareness of how important it is to keep their credit score high. “Business owners today are much more aware of how important it is to maintain a strong credit profile,” he said. “That was not the case five to seven years ago when it was much easier for a business to access credit.”

Lankler says growth in the number of products that give businesses on-demand access to their credit profiles has also contributed to the higher credit scores. “As a result of the financial crisis, major lenders – including banks – have become much more restrictive in extending credit to business owners,” Lankler said. “In response, business owners have become more vigilant in maintaining strong credit profiles and a flood of products have been introduced to help them do so.”

What are some ways you can keep your business’s credit score high?

  • Pay your bills on time and if you cannot, talk to the vendor to work out a payment plan.
  • Monitor your business’s credit report to note any errors and take steps to correct them.
  • Don’t mix personal and business funds. Use business, not personal, accounts for business purchases.
  • Use business credit cards carefully, being sure not to overutilize credit. Ideally, pay off your balance in full each month, but if you can’t, keep your balance under 30 percent of your available credit.
  • Even if you never plan to use it, make sure you keep enough available credit (through business credit cards and other options) to get you through an emergency if need be.

Image by Flickr user ThirdLegReviews (Creative Commons)

 

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Posted in Capital Access, Raising Capital, Small Business, small business | 3 Comments »

Bad News for Small Business: VC Investments Decline

November 15th, 2012 ::

By Maria Valdez Haubrich

Recently, we posted here about the growth in angel capital investments. Now, there’s some not-so-good news for small businesses about venture capital. The most recent MoneyTree survey from PricewaterhouseCoopers and the National Venture Capital Association reports that in the third quarter of 2012, VC investments shrunk both in terms of overall dollars (down by 11 percent from the second quarter of 2012) and in terms of deal volume (down by 5 percent from the second quarter of 2012).

VC dollars and deals also declined year over year. What’s behind the shrinkage? PWC and the NCVA say that venture capitalists are exhibiting extreme caution with the capital they have available. Instead of making new investments, they’re focusing on the companies that are already in their portfolios. Compounding the problem, there are fewer new venture funds, which is cutting into the amount of capital that can be invested.

Of course, the bad news may not affect you if your small business is in an industry that finds it easier than average to attract venture capital. Here’s a closer look:

  • As of Q3 2012, software companies were still the most popular type of VC investment, accounting for $2.1 billion invested in 304 deals. (That’s still a 12 percent drop from Q2 2012, however).
  • Life sciences (which includes biotechnology and medical devices) investing increased in terms of dollars but declined in deal volume compared to Q2 2012.
  • Internet-specific investing (companies whose business model depends on the Internet, regardless of industry) declined by 12 percent in dollars and 8 percent in deal volume compared to Q2 2012.
  • The clean technology sector (alternative energy, pollution and recycling, power supplies and conservation) had a 20 percent decrease in dollars but a 2 percent increase in deal volume.
  • Financial services, healthcare services, business products and services, and retailing businesses saw increasing dollar amounts invested in Q3 compared to Q2.
  • In contrast, companies in the media and entertainment, semiconductors, telecommunications and IT services sectors all saw a decline.
  • Companies in the software, media and entertainment, and IT services industries received the most first-time rounds in Q3 2012.

Your industry isn’t the only thing that matters when you’re looking for VC investments. Where your business is located matters more than you might want to think. Over half (58 percent) of VC funding in Q3 2012 went to businesses in California, Massachusetts and New York.

Image by Flickr user Horia Varlan (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business, Venture Capital | No Comments »

Is Angel Funding Taking Wing Again?

November 6th, 2012 ::

By Karen Axelton

Small business owners seeking financing from private investors can take heart from the latest data from the Center for Venture Research at the University of New Hampshire. The quarterly study of angel investors found that, as of the second half of 2012, the angel investor market seems to be on the rebound. The total dollar amount invested, total number of investments, and total number of investors all grew compared to the same period in 2011.

For the first two quarters of 2012, total dollars invested reached $9.2 billion, up by 3.1 percent compared to the same period in 2011. Investments were made in a total of 27,280 entrepreneurial businesses–a 3.7 percent increase from the same period in 2011. And the number of active investors hit 131,145 individuals, up 5 percent from the same period in 2011. In the first half of 2012, the average deal size hit $336,390, holding fairly steady with 2011’s average deal of $338,400.

Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics, says that while many of the figures are holding steady, the survey shows a “steady recovery” of the angel market since 2008.

While the percentage of investments focused on seed and start-up stage investing held steady at 40 percent (compared to 39 percent last year), there’s good news for existing business owners: Expansion stage financing grew to 22 percent of investments in the first half of 2012, up from 13 percent in the same period of 2011.

What industries are most likely to find angel funding? Healthcare services/medical devices and equipment accounted for 24 percent of investments, followed by software (14 percent), biotech (12 percent), retail (10 percent), IT services (7 percent) and media (6 percent). Interest in the industrial/energy sector, which had been one of the top six sectors since 2009 due to an interest in clean tech, dropped in the first half of 2012. Meanwhile, retail and media have “solidified” their place in the top six sectors, driven primarily by investments in social networking-related businesses.

One interesting trend: The percentage of women angel investors nearly doubled in 2012 from the same period last year (from 11.7 percent of angels to 21.8 percent). Meanwhile, 18.4 percent of companies seeking angel investment were women-owned.

Minority angels are less represented, accounting for just 4 percent of the angel population. Similarly, minority-owned firms accounted for only 7.1 percent of the companies that sought angel capital.  Although minority-owned businesses got angel financing at a similar rate to all businesses, the study says the fact that so few are seeking angel capital is cause for concern.

Image by Flickr user GeishaBoy500 (Creative Commons)

 

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Web.com Small Business Toolkit: FedEx Small Business Grant Program (Contest)

October 17th, 2012 ::

FedEx Small Business Grant Program

You could win a grant of up to $25,000 from FedEx. In its first-ever nationwide small business grant competition, FedEx will award a total of $50,000 to six U.S. small businesses. Be able to tell a compelling story about your business and explain how you will use the money to grow.  The top winner will receive a $25,000 grant and the remaining five winners will receive grants of $5,000 each. If your business has fewer than 100 employees, you can enter by completing a profile to be voted on by Facebook users. Voting has already begun and will end on November 24, 2012.  In December, FedEx will review the entries and select and announce the top 100 finalists based on their contest profile and the number of votes they receive from Facebook users.

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Web.com Small Business Toolkit: EarlyShares Small Business Challenge (Contest)

October 9th, 2012 ::

EarlyShares Small Business Challenge

EarlyShares, an equity-based crowdfunding platform, has launched a contest asking small business owners to pitch ideas on how their business model can help create new jobs and stimulate the U.S. economy. Entrants compete for a $25,000 grand prize; second- and third-place winners receive $15,000 and $10,000, respectively. In the spirit of crowdsourcing, the public will vote on the top pitches (although a panel of judges also contributes to the selection process). The contest runs through October 31st, with crowd voting taking place November 2-7. Winners will be announced on November 9th.

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Is Your Small Business Struggling With Cash Crunches?

October 2nd, 2012 ::

By Karen Axelton

Despite their best efforts to manage their companies’ cash flow, half of small business owners have suffered a sudden cash crunch in the past 12 months, according to a new survey from Citibank.

The Citibank Small Business Pulse found that weak sales were causing cash flow concerns for the majority entrepreneurs. Even though 73 percent say they personally manage their cash flow daily—not trusting the job to anyone else—30 percent say they are still struggling with challenges such as slow or delinquent receivables and customer bankruptcies, and 24 percent say late or non-payments have caused their companies an unexpected cash crunch.

Despite their awareness of the importance of cash flow management, small business owners in the survey admit that they struggle to crack down on customers. Some 78 percent say they’ve extended customers’ payment terms in the last 12 months, and nearly one-fourth say that “making a collection call” is the most uncomfortable aspect of managing their business finances.

The cash-flow issues these businesses faced weren’t all due to slow-paying customers. Forty-one percent of entrepreneurs blamed “lackluster consumer spending” for their cash crunch, while 28 percent said it was due to expected sales failing to materialize.  Overall, the need to maintain sales was the number-one concern small business owners expressed, cited by 78 percent.

Still, small business owners in the survey feel hopeful about their own business finances, even if they don’t feel as rosy about the economy as a whole. While 85 percent think the nation might still have a double-dip recession, 43 percent think their business’s 2012 sales will top last year’s, and 56 percent expect their businesses will either meet or exceed their 2012 revenue goals.

Small business owners have reason to feel confident. To achieve those sales goals, more than half of companies surveyed say they have “reinvented” their businesses in the past year, either adding new products or services, overhauling their technology, or both, in order to become more competitive in a tough marketplace.

What can you do to keep your cash flowing? Small business owners in the survey are doing all the right things—except for one. It’s tough, but following up on late-paying customers and doing all you can to ensure you get paid is essential if you want to keep your business in the black.

How is your business’s cash flowing?

Image by Flickr user Alan Cleaver (Creative Commons)

 

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Web.com Small Business Toolkit: Expand My Brand Startup Competition (Social Media Competition)

September 17th, 2012 ::

Expand My Brand Startup Competition

The Expand My Brand Startup Competition is a startup competition and symposium bringing top brands and emerging social media startups together to explore how technology is shifting the brand marketing and advertising business.  The event takes place in New York City on September 27, 2012, and one lucky business will win expansion capital. Five social marketing tech startups will pitch to a panel of brands to prove how their tools will “expand their brand.” The winner gets to go through an incubation program and receive $30,000 in startup assets. Purchase your tickets to participate in important panel discussions and presentations.

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Posted in Capital Access, Events, Marketing, Raising Capital, Small Business, small business, Social Media, social media, Technology | No Comments »

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