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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.

Investing In Public Relations Could Save You Money

Public relations (PR) is important for any business. Businesses are no longer completely separated from their consumers. They no longer just offer consumers a service. Nowadays, businesses have to build networks and personal connections with their consumers. PR is the interaction between your organisation and your target market. The interaction is achieved using online methods, the media, and direct communication. Competition between brands and businesses is extremely high (and getting higher), thus, it is always important to keep your brand a cut above the rest.

PR is important as it has a direct link to the amount of sales a business can make. Sales are largely determined by the number of satisfied customers. Thus, bad press can also be responsible for decreasing sales in many businesses. It is always important to keep an eye on how the public responds to your products, and that is why having a person responsible for PR is important, especially for growing businesses.

Relationships are important

Information spreads easily, so it is important to always make sure that the information being spread is vital and informative about your business. PR will ensure this happens.

The biggest public relations tool is word-of-mouth. When a consumer is satisfied with a service, they will tell a friend, their family, hairdresser, and anyone else who is willing to listen. Good service on its own is not enough, however. Consumers have to be made aware of your successful efforts; public relations officers take care of this.

If your business has a strong online presence, it is important to be consistent in your communication with your online users. For instance, if a customer lays a complaint online, it is best to have someone on stand-by to attend to them as quickly as possible. This helps build a strong relationship between the brand and the customer, and can be the difference between never having that customer again and having that person bring three more people with them the next time they visit you.

Because your PR department will also deal with the media, it is very important that they are consistent when submitting your promotional items to media professionals. This also fosters a good relationship with the media houses.

Making plans

A good PR consultant or department will have a PR strategy that plans a year ahead in terms of campaigns and activities. The strategy should outline the goals and objectives for the year, and show how they plan to keep people talking about your business. There should also be a focus on how the business aims to utilise social media to its own advantage.

Honesty is key

The relationship formed between customers and the businesses should be one of complete trust. The PR department should not be there just to cover up problems and represent the company in a good light. It should rather be there to put matters into perspective for current and potential clients.

New businesses

It is important for all businesses to have a PR department, but sometimes new and small businesses cannot afford the expense of hiring a professional. Doing your own PR maybe an option, but you will need to dedicate the appropriate amount of time to it. Make sure you interact with people on your social media accounts, and regularly update your accounts with interesting news, photos, and information that are industry specific. Contact relevant newspapers, magazines, and journalists, and start your own blog just to show your audience that you know what you are talking about.

The idea behind PR is to influence your consumers into buying into your brand. Good PR can help your brand shine above all others and bring you potentially loyal customers.

About the Author: Zimasa Mpemnyama is just starting out in the world of digital marketing and PR, but already she can see the important interplay between traditional PR strategies and modern techniques that use social media and other online forms of communication.

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.

Planning a customer loyalty programme? Try these

Customer loyalty programmes are one of the most innovative ways to show to your customers that you value them. Businesses that have always aimed at keeping their customers coming back for more without actually letting them wait, know what these programmes can bring to them. Customer loyalty programmes play an instrumental role in helping you gather relevant information about the customer demographic. These are the kind of programmes that go on to boosting your marketing efforts by also helping you fetch the best outputs in the long run. Loyalty programmes outperform several other strategies and campaigns but still a lot of businesses seem to overlook its growing importance.

However, only realising the benefits that these programmes can bring to your business is not enough. Planning them with care and getting them right should be the concerns that follow. We believe that the key to creating a well thought out and successful customer loyalty program is its accessibility and user friendliness.

If you’re planning to start a customer loyalty programme soon, here are the tips that can help you get the most out of it and finally plan it according to your expectations:

# Your first loyalty punch card

The punch card formula is a great way to give it a start. Make sure that you design a card that is specific to your business and aims at offering FREE and attractive gifts after a particular number of purchases being made by the customer. Suggest them to carry the card and let them know the benefits they can gain from the card, well ahead in advance.

# Opt-in programmes

Encourage your customers to avail the benefits of the sign-up in the form of plenty of offers and rewards. Let them share their email addresses with you and you can then add them to your opt-in list. This can be either done online or right at the time of sale. Email sign-up options will ease out the pressure on the application processes and your customers won’t have to download apps every now and then. They won’t be required to share all the personal information, as in most cases, they are denied by the customers.

You can then choose to send them a draft on the attractive and personal offers as well as the regular communications that can only be availed by the loyalty customers. If the recent surveys are to be believed, email campaigns that have mostly been targeting the loyalty members have gradually emerged as an amazing source of revenue. Additionally, these are also easy to track; you can’t deny that you wanted something like this.

# Premium loyalty programme

This is where you can bring the customer relationship management software into use. Track most of the higher value purchases, study them and invite specific customers to join the programme. Find out the customers who have been contributing majorly to boosting up your sales and invite them to join the programme.

# Branded loyalty membership cards

With the help of loyalty card services, you can design branded cards that are specific to your business, activities and brand. They will paint a brighter picture of your image; such services can largely help you in tracking and managing the customer behaviour and lot more. You can track the number of customers that have actually visited your store. The customers that spend a good amount for making a purchase with your store and that too frequently must be noticed.

These loyal members can also be chosen for sending targeted emails; you can also text the campaigns to them. Services that you’re going to add can also include branded gift cards and much more. Think about your brand, its activities and what you would want from your customers in the present scenario and you will see an influx of unique ideas good enough to boost your sales.

# Adding the digital component

All your customers may not be digitally savvy but we still believe that most of them would be and this is what brings the incorporation of digital component into picture. It is important for the businesses to cater to the growing demands of customers addicted to apps which indicate a mobile loyalty trend growing with time. There are plenty of apps that can be tapped into for a fee or for free!

This is getting more important for the businesses that are already involved with the mobile payment platforms. Make sure that you explore all the available options and finally hop onto the services that can also offer a seamless social media integration. Get liked, shared and consider the pace of your progress with the help of online reviews as they also get you a slice of some honest feedback.

# Choice of incentives

The incentives or rewards you have for your customers should be as unique as your business. Make it appealing and moreover – a desirable one. You can go for experiential awards that can serve the purpose of actually ‘rewarding’ your loyal customers. A hair salon can always try and offer interesting monthly workshops to its loyal customers where they can be offered free makeover tips.

These are the kind of experiences that go on to building communities, adding value to the lives of your customers and assisting your business to stand out from the crowd. Don’t forget that these opportunities can be utilised for offering your customers amazing reason/s for coming back.

# Regular communication with customers

If they are your loyal customers – they deserve special treatment. Segment out this section of your customers and don’t forget to communicate with them more often than not. Share the upcoming events with them, let them know about the incentives and lastly – don’t forget their birthdays. Make them feel special at each stage and you can also consider offering them something unique in their birthday months. They deserve a great treatment – after all they are your loyal customers!

About the Author: Michael Evans is a passionate blogger and he occasionally writes for Rope-barriers.com, a leading UK based budget post and rope barriers manufacturer and supplier.