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4 Small Business Risks and How to Reduce Them

It doesn’t matter what kind of business you run, there will always be risks involved. Whether you’re worried about financial struggles, safety issues, legal pitfalls, or simply the ability to stay afloat in changing markets, managing risk is part of being an entrepreneur. But how much risk is out there? And what do successful businesses do about it? The most important thing to know is that startups are more affected by risks than established companies, which is why 44 percent of small businesses don’t survive their first 5 years. The real strategy behind minimizing risk is to have a strong business plan from the very start. When business owners underestimate or fail to adequately research the potential for things to go wrong, they’re unprepared for both small and large crises. Here are 5 of the most common risks to almost every business and easy ways to make sure you can manage them.

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1. Lawsuits

It may seem like getting sued is more likely to happen to large corporations, but that’s actually far from the truth. Research by Bolt Insurance Agency states that nearly 60 percent of annual lawsuits are filed against businesses making less than $1 million annually. They say that over a third of small business owners has, at the very least, been threatened with legal action. There are many ways to reduce the chance of a lawsuit, including getting everything in writing and following through on customer complaints and feedback. But you may not always be able to avoid them, so finding further information on the right kind of insurance for your industry to protect against personal injury and property damage is essential. And professional liability insurance will pay your court costs whether you win or lose.

2. Overspending

It’s not uncommon for businesses to fall victim to the trap of trying to do too much too soon. Running through your capital too quickly is usually the fault of a bad business plan with too many large goals and not enough short-term ones, and where expenses may be underestimated. Estimating revenue, pricing your marketing strategy, and budgeting for staffing and operating expenses can be a tall order, which is why smart businesses hire great professionals. New companies sometimes think hiring an accountant or bookkeeper is extravagant, but it may be the most important decision you can make. You have enough to worry about with everything else that goes into running a business. Getting help for the complicated financial planning involved will actually save you a lot of money down the line.

3. Skipping Diversification

Most companies have a plan for growth, but not all companies have a plan to diversify. When your business expands, the range of products and services you are willing to offer your customers should expand with it, not only because your success will thrive off of new ideas, but also because the markets are constantly changing. Look at America’s most successful business, Apple. Now that the mobile phone industry is becoming more stagnant, where everyone has a cell phone and prices are quickly dropping, how do they stand out? They offer ipads, ipods, and other products that their competitors don’t offer, putting them at the forefront of expansion. You can take that simple idea and use it for almost any industry or size of business. You never know when prices will fall or a certain product will turn out to be a trend or lose public favor. That’s why it’s important not to put all your eggs in one basket the second the can possibly avoid it.

4. Ignoring Warning Signs

Business requires a high level of proactive behavior from its founders, and no matter what kind of problem you are facing, acknowledging it will help you discover the root of where it came from. Often, businesses will gather customer feedback through surveys or other means, but they’ll ignore the negative responses. When your customers are complaining, listening to them matters. When your employees never last beyond a few months, you need to find out why. And when your sales numbers suddenly drop, it’s worth it to put the research into investigating it. Virtually no companies fail without ample warning signs, and if you can take the right action to solve minor crises before they become major ones, you just might ensure your business sticks around for the long haul.

The greater the risk, the greater the reward, isn’t that what they always say? In business, it can be much more complicated than that. Risk management should be a vital part of your business plan, and you should never more ahead with a company unless you have adequate insurance, accurate bookkeeping, and the right team on your side. There’s nothing you can’t face head on with the right preparation.

About the Author: Author Karen Boyarsky is an avid blogger. You can follow her on Twitter @Boyarsky_kareni.

Why Your Promotional Flyer Is Going Straight In The Bin – And What You Can Do About It

You have spent a lot of money on a promotional flyer to advertise your business, you have printed it on good quality paper and you have paid a distributor to hand them out all over your city. Unfortunately, as soon as your flyer is pushed through the mail slot of 99% of doors, it will be headed straight to the rubbish bin or recycling box. All of your hard work has gone to waste to create something that will probably only used by your customers to line the bottom of their birdcages.

Why are your promotional flyers destined for the bin? Is there anything you can do about it?

Take a Close Look at Your Flyers – Are They the Best They Can Be?

Take a look at the flyers that you have been distributing and ask yourself whether you can really blame your customers for throwing them away without a second thought. Do they stand out from all of the other advertisements, or are they boring and ordinary? It can be difficult to look at your flyers objectively because you are emotionally invested in your business, but try to look at them from the perspective of someone who has never heard of your company or what you do. Would the flyer pique their interest?

Unfortunately when you are distributing flyers for your business you will have a lot of other promotional mail to compete with. Unless your flyer has a great offer or is very interesting and eye-catching, you can’t really blame most people for recycling it with the pile of other junk mail.

Tips for Improving Your Flyers

The good news is that there are a number of ways you can improve your flyers and make it more likely that your customers will pay attention to them and save them. Here are a few tips to apply to your flyers to help them avoid a one-way trip to the rubbish bin.

Make the largest text eye catching. The headline or the largest text on the page should be something that makes the reader look twice. Too many flyers simply state the name of the company, which won’t catch the customer’s interest.
Use a large and impactful font for this big headline, which will make it more readable and make it stand out in a pile of papers from across the room.
Most of the time, people look at images first and then read text. Use an interesting main graphic or a vibrant colour image to grab the attention of the reader. Make sure that it is obvious how the image is related to the text.
Follow up the headline with strong and simple points that outline what you have to offer. Focus on the benefit of your product or service for the customer… what’s in it for them?
Avoid too much text. People will get bored reading the flyer and you will lose their interest.
Include a call to action at the end. Perhaps you want them to visit your website and sign up, or request a free report, or order a free trial. A leaflet or a flyer with no call to action is a wasted opportunity.
Take a random sampling of all of the other common flyers that come through your door. Does your flyer look like every other one? Think about how you can make it stand out, such as using an unusual colour or printing it on a shiny or textured surface.

These are just a few of the main ways that you can make it less likely that your promotional flyer will end up going straight in the bin and instead be read by your potential customers.

About the Author: Paula Whately is a blogger and entrepreneur in London who recently had a new flyer designed for her business. With the new design in flyer distribution, London customers were calling her at a much higher rate than usual.

What Your Small Business Needs To Know About Outsourcing Payroll

Running a small business is no small feat; there are lots of administrative tasks to tend to, especially if you have multiple employees. Instead of doing everything on your own, you have options to outsource some of these tasks to companies who focus on nothing but these services. Payroll is one such commonly outsourced service and if you are considering this route, here are a few things to consider in the decision-making process.

What Do Payroll Service Providers Do?

Payroll service providers offer a range of services. A basic package consists of calculating payroll and taxes owed, producing reports and printing and giving out checks. They may offer related services for additional fees. Some may not only calculate your taxes, but handle filing and payment; providers can also handle direct deposit, sending out W-2s, manage employee benefits and make 401(k) deductions.

Do You Need Payroll Services?

There are certain signs that outsourcing your payroll services is the right move for you. If any of the following situations apply to you, it may be time to start scouting companies. Do you lack confidence in your calculations? Are you sending in deposits late? The IRS can levy late deposit penalties up to 10 percent—no small chunk of change. Do the number of employees you have make it difficult to keep up with the work load? Is handling payroll taking you away from more important activities that will contribute directly to expanding your business?

Benefits

Companies that handle payroll are doing so for many businesses, which means they can offer competitive pricing for these services; if you have less than 20 employees, it is likely that you can find a plan that will cost less than what you are currently spending on handling payroll in-house. Filing taxes incorrectly can result in big-time fines from the IRS and small businesses are particularly vulnerable. Payroll companies are experts, and they know all the latest rules, regulations, required forms, withholding rates and the like. Since you are getting the service for a fixed cost, you can better manage your business expenses.

Choosing a Provider

There is no shortage of payroll outsourcing services to choose from, and you must tread carefully. You need to pick a reliable company. No matter what, correct filing ,and proper payment of payroll taxes, is ultimately your responsibility; you will not be able to shift blame to the provider. Referrals are always a good place to start; besides talking to other business owners, talk to your accountant or someone at your local Small Business Development Center. Determine what you need upfront so you can work on negotiating a flat rate. Find out how the company delivers payroll data to you after it is completed. As far as filing goes, you need to find out some important information. If they file incorrectly, will they assume the penalty fees? Do they provide assistance with local tax filing? Inquire about customer service—what hours and through what means can you reach someone? What are average response times? Ask for references, and more importantly, follow up on them!

About the Author: Kelli Cooper is a freelance writer who blogs about all things business.

6 Business Documents You Must Have Translated If Doing Business Internationally

International business offers wonderful opportunities for your business to access new markets and grow your profits. It can be the key to your business’ success. But, being able to communicate with your business partners and potential clients is key no matter where they are located. When you are doing business internationally, accurately translating core documents is essential.

An accurate translation does more than just translate your document word for word. It translates the intent of your document because let’s face it, every country has its own social nuances. Talking about a donkey in one country may get you a chuckle and in another it may get you punched in the face. It is vital you have these six documents correctly translated when you are doing business internationally. Because, no one wants to get punched in the face.

1. Financial Documents

Do you think numbers are the universal language? Hold the calculator. There is a lot more to financial documents than just ones and fives. Financial documents tell the story of your business’ financial record. While they do use balance sheets and expense reports, they also have:

Statements of change that explain why your business’ equity has changed throughout a given period.
Statement of cash flows that outline what your business’ cash flow has been throughout a given period.

Are ones and fives used in these? Yes, but sentences are too. And, once sentences come into play, language nuances control whether or not your audience or international business partners understand you and your business.

2. Instruction Manuals

Nearly every product sold comes with an instruction manual. Why? Because your customers need to know how to use it, down to the very last little gizmo attached. When you are selling products internationally, not all of your customers are going to speak the same language, but they are all going to want the same information in a language they can understand.

3. Marketing Materials

You are in business to sell. If you are doing business internationally, this is no different. While marketing in many countries has seen dramatic changes, consumers’ purchasing behaviors are still affected by marketing. If your potential consumer can’t understand your marketing materials, chances are pretty good they won’t be able to understand your product and will not buy it.

4. Informational Brochures

Informational brochures are significant piece of your advertising success in today’s Social Media driven market. They provide the raw details consumers are now demanding. Whether your brochure is shared online or through hardcopy, it needs to do more than just tell your audience to buy – it needs to educate them. To do so, it needs to speak their language and paint pictures they can understand everything correctly.

5. Contracts

A contract is a legally binding document stating each party’s obligations and the consequences for not meeting those obligations. When you are dealing with someone from another country, even if they speak the same language, their interpretation of the law can differ. Your contracts need to be translated so they make sense culturally. So, make sure that you have business translation done on any contracts that you want to make sense to your customers or business associates who speak another language.

6. Insurance Documents

Insurance protects your business against unfortunate events. If you are doing business internationally, don’t you want to be protected there too? Protecting yourself in one country and not the other is a lot like only buying auto insurance for your head and not the rest of your body.

About the Author: The writer of this article, Nicole, is a freelance writer who has been writing about international business practices for years.

10 Tips For Running A Successful Crowdfunding Campaign

Crowdfunding is a new vehicle for raising money for projects and business ventures. During 2012, $2.7 billion were raised employing the use of crowdfunding. This method of fundraising usually takes place over the Internet. Supporters that believe in projects can now respond to crowdfunding campaigns by donating to entrepreneurs’ and artists’ projects. The most popular crowdfunding sites are IndieGoGo, RocketHub, Kickstarter, GoFundMe, GiveForward, Crowdfunder and Crowdtilt. These sites represent only a small fraction of the crowdfunding sites in operation worldwide. It is estimated that there are currently about 308 active crowdfunding sites.

As banks have tightened restrictions for small business lending, crowdfunding is growing as a viable option for entrepreneurs. While this method for raising money has proven to provide a pathway to success for many, other entrepreneurs have not been successful utilizing crowdfunding platforms. It is important for participants interested in raising money in this manner to make their offer as appealing as possible. There is a lot of competition for donations.

Below are 10 tips learned along the way by both successful and unsuccessful participants.

1. Commit to the necessary time to prepare the best campaign possible. The more complete and clearly stated the campaign project is, the more likely it is that financial supporters will respond. It is not uncommon for an entrepreneur to spend weeks or even months preparing to launch a campaign.

2. Clearly state your financial goals and why the target amount needed is necessary. It is particularly important that monetary goals be justified for higher amounts. Be sure to give careful thought to the amount of money required so that you can intelligently answer questions that donors might have about how the money will be spent.

3. Use provocative videos and photos to sell the project. Videos have proven to be a compelling force for keeping the attention of viewers. With this fact in mind, a poorly produced video could backfire and make a negative impression. If you decide to produce a video, be sure you can make a quality product that looks professional. Being able to keep a person’s attention for two to four minutes is not as easy as it sounds. If you do not have the resources or talent to create a first-rate video, then be sure to place photos in the campaign information for full impact.

4. Test your campaign out on trusted friends and family members to get feedback before taking the campaign public. Use feedback to improve the campaign.

5. Keep your backers “in the know” by sending them updates about your progress on the campaign.

6. Get publicity for the campaign. Advertising or writing an article for a related blog is one good idea for getting some attention. Using social media is another way to create some buzz and get interested donors to check out your offering.

7. Give donors a valuable and memorable keepsake in thanks for donating.

8. Spend money on marketing. Buying an email list or hiring a PR expert can make all the difference in a campaign’s success. Donors must be aware of your campaign before they can give.

9. Get a budget together for starting and marketing the campaign to increase your odds for success.

10. Send out press releases.

About the Author: Adam Smith is currently blogging for Startup Valley. He loves to blog about different crowdfunding platforms and how to create an effective crowdfunding campaign.