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10 Tips to Scale from a Startup to a Huge Company

Most entrepreneurs dream of making it big and turning their startup idea into a huge success. As hard as they try though, they never seem to make it to the next level. Those that do are rare, and the lucky one who grow their small startups into large, successful companies are the rarest of all.

Entrepreneurial leaders have always been eager to share the secrets to their successes. If you’re looking for some insight as to how the most successful business leaders reached their goals, here are ten tips that business leaders have shared that helped them on their paths to success.

Always Think Bigger

Don’t think only one, two or even three steps ahead. As the size of your company grows, it’s up to you to determine the direction in which it will grow. When you reach the milestones in your business growth and decide your business is ready for expansion, don’t just think about it in the short term. Spend some real time trying to envision what you want your company to be like down the road, and ask yourself what are the steps you’re going to have to take now so that you don’t have to worry again in a couple of years about the same things.

Let’s take real estate as a good example of how you can think far enough ahead to make sure your business can grow bigger. In this example, your business has outgrown its current space. You have two options available to you, one that’s a perfect fit just inside your price limit, and one that’s much larger than you need, just outside your price limit. It’s logical to go for the lower priced location, since it’s within your budget and it will suit your needs perfectly. If you’re thinking bigger, though, go for the larger space. Worried that it’s more than you need? Sublet the space you aren’t using and use the income to cover your lease. If you don’t want to be a landlord, hire a management company to take care of the details. Then, when you’re ready to expand, you already have the space right next door. And, of course, if you expect to need a larger office or work space down the line, paying more for a bigger space now will likely save you moving fees and lost work time in the future, so you’re likely to at least break even, if not profit from the forward-thinking decision.

Keep It Simpler

In the open-air food markets of Southeast Asia, you can find vendors who make only one dish. In fact, they may even be the third or fourth generation in the family who has been making only one dish. These dishes have been elevated to perfection by the proprietors painstakingly preserving the idea that the dish they prepare is the best that they can make it, each and every time. The stalls have their regulars who have been coming and eating the same thing for years or even decades, as well as aficionados who make their favorite food vendor the first stop when they arrive in town. That’s the kind of brand loyalty you’re trying to build for your business.

You may be tempted to grow your business laterally, that is, diversifying your products and services. There is a well-known phrase that refers to someone who can do a little bit of everything. They’re called a “Jack of all trades.” But not too many people are familiar with the second half of that saying: “Master of none.” Be a master.

Keep Your Employees Happy

Google has a corporate culture that is the envy of startups and established businesses alike. Employees of Google like working there. They feel like the company takes care of them and has their best interests at heart. And that’s true; they do. Google has found that their employees work better and produce better results when their employees have fewer outside concerns that they need to worry about. Their employees stay at their jobs longer than average and are overwhelmingly positive about their employer and the work environment.

When an employee leaves, they take with them their experience and knowledge. While there are usually efforts to retain the knowledge, there is little if any effort to retain the employee. Once they’re gone, no matter how much training and experience the replacement may have, they’re going to have to start over, relearning the idiosyncrasies of the position, making the same mistakes over again, and so on. If your employee turnover is high, your company is going to stay stuck in the same place, making the same mistakes over and over again, preventing you from moving your company forward.

There is a management idea that you don’t try to retain an employee who wants to leave, since they’ll be able to use the threat of leaving as a bargaining chip. As a smarter entrepreneur, it’s up to you to create a work environment where they don’t want to leave in the first place.

Make Your Customers Happier

Everyone knows who Jeff Bezos is. As the founder of one of the most successful dot com enterprises, Amazon is the gold standard for online ecommerce success. In 1997, Bezos sent out a letter to his shareholders, outlining his simple formula for the continuing the growth and success of Amazon.com. In it, he wrote:

“[C]ustomer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand.”

Another well-known personality in the technology explosion at the end of the last century is Bill Gates, the co-founder of Microsoft. He wrote, “Your most unhappy customers are your greatest source of learning.” While you can’t please everyone all of the time, you can learn from your customers’ experiences and strive to always improve their experience so they keep coming back.

Schedule Your Time Better

If you’re familiar with the hit Broadway play Rent, 525,600 minutes is all we get in a single year. How you spend each of those minutes will determine how successful you are in that year.

Are you spending all your time growing your business? You can bet that the most successful entrepreneurs are. They are always focused on their business. Every action, reaction, and transaction has already been looked at through the prism of, “How is what I’m about to do good for my business?” If it isn’t, they’re only too happy to walk away and focus on the next thing. They see their time as a precious commodity, to be spent only when there is a guaranteed return on that investment.

Do you really think that all the executives who spend their time on a golf course do it because they like golf? Absolutely not! They go to find investors, customers, clients, and business opportunities. By spending a few hours in the company of people who can help their business grow, they are planning for the future of their company by investing their time wisely, even when it might not look like it at first glance.

Work Smarter, Grow Smarter

There are many reasons why your company might do something a certain way. Most of the time, it’s because of inertia. It worked once one way once upon a time, and it evolved into procedure. It might not matter that it duplicates work and takes twice as long as it should, that’s the way it’s always been done. There are plenty of reasons, but not particularly good ones.

When your company grows you must find the best ways to nurture that growth, and that means finding ways to scale your business processes in a way that doesn’t create chaos or waste time.

Great Ideas Aren’t Always the Best Ideas for Your Company

On your road to success, you’re going to be presented with numerous ideas from people, both within and from outside the company. It never hurts to listen, but you have to gauge the value of the proposition against what the short-term and long-term goals you’ve set for the company. Only you know what they are, so only you can judge whether an idea has enough merit to warrant further investigation.

It’s your company and ultimately your decision.

When You Need Help, Get Help

No one is successful by themselves. There are always people that help you on your road to success. Some people have the notion that asking for help is in some way an admission of failure. Nothing could be further from the truth.

Money is a great example of getting help when you need it. If you already had the money, you wouldn’t necessarily be in business. Most of the time, growing businesses need financing to help them reach their goals. As a company owner, you may have approached banks or other lending institutions to secure a loan. The financing you receive from a bank is exactly the kind of help you need to make your business grow.

Navigating government regulations is another common place where getting help from people who understand the system will make things easier for you and your business. The same goes for legal advice, medical advice, structural engineering, and a whole host of other professions. As the owner of your business, you should be focused on knowing your business down to the last detail. But that doesn’t mean you need to become an expert in everything the business needs in order to succeed. In fact, it would be impossible.

There are experts in every field that can help you realize your goal. Don’t be afraid of asking for help when you need it, because it will only help you reach the top more quickly.

“Shortcut” Means “Compromise”

When someone starts out at a gym, they can’t immediately lift hundreds of pounds of weights. Even attempting it could cause serious harm and injury. They have to start out slowly, building up their bodies so that with enough time and effort, they can reach their goals, until what seemed impossible a little while ago is now just one more goal they achieved.

There is an old adage among mountain climbers; “There are no shortcuts to the top.” Safety ropes and harnesses might slow a climber’s ascent, but no mountain climber in their right mind would even consider starting their climb without them. This is just as true in business. Everything you want to accomplish for your business is going to take time and hard work.

If you find yourself faced with a decision to make between two paths that will reach the same goal, you need to ask yourself why the easier one is easier, and why the harder one is harder. You’ll need to train yourself to look at both opportunities, and if you conclude that one is too good to be true, avoid it. The materials may be cheaper, the vendor might recommend cutting corners, but ultimately this is going to hurt your business more than help it.

Stay Tuned In

As your company continues to grow and succeed, your responsibilities are going to take you away from the day-to-day operations of the business. While your presence is required at high-level meetings, you will feel like you’re starting to lose a connection to the roots of your business. It’s important for you to remember that no matter how big your company gets, it’s still your company. It is therefore your responsibility to make the effort to stay in touch with how the company is doing internally, not simply by what the reports say that cross your desk. This might mean scheduling town hall style meetings or walking the floor of the various departments to hear about how the company is doing from your employees’ perspective.

When Microsoft was in its explosive growth stage, it was well-known that although Bill Gates was the CEO of what would become the largest technology company in the world, he still found some time to work on the programming of the Windows operating system software, fixing bugs and updating features. He never forgot that it was his initial hard work on the original software package that gave his company the foundation to grow into the megalith it is today.

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Credit Cards vs. PayPal For An eCommerce Site

The question of how to accept payments on your ecommerce site is not a simple one to answer. Credit card payments and PayPal payments are the two most popular ways to accept payments online, but they each have advantages and disadvantages (as do most things in life). This article will take a closer look at the advantages and disadvantages of accepting PayPal and credit cards on your website, both for you as a business owner, and for your customers.

The Contenders: Credit Cards vs. PayPal

As your parents probably taught you before you got your first credit card, when you use your card, you are essentially creating a promise between the merchant, the credit card company, and yourself. You authorize your credit card company to pay the merchant up front, and then you will pay the credit card company at the end of the month. If you can’t make the payment, the credit card company will simply charge you interest on the outstanding balance until you can pay off the money for your purchase and the accrued interest.

As compared with credit cards which were invented in 1950, PayPal has been around since the late 1990s. Best known as the default payment service on eBay, PayPal is now an independent company with 286 million users worldwide and over US$15 billion in revenue in 2018. PayPal users typically maintain a balance in their accounts, backed by one or more credit cards or bank accounts to handle any overdraft if your purchase exceeds the balance available in your account.

Why Credit Cards are Good for Consumers

Credit cards are available to consumers with good credit, bad, credit, or even no credit. Credit card companies are (almost) always willing to give out cards to new customers. After all, for the amount of interest some cards charge, it’s almost as if they want their customers to run up a credit debt.

Credit cards are often a more convenient and safer alternative to carrying cash. Running to an ATM every time a customer needs money can be seen as a tremendous inconvenience and can make someone a potential target for criminals. And, if a credit card is lost or stolen, one phone call can cancel the card and have a new card on its way, while any purchases made with a stolen card are generally not the responsibility of the victim. With cash, once it’s gone, it’s gone.

Consumers can use online web sites or mobile apps to manage their credit card statements. Customers often earn rewards in the form of points, air miles, or cash back that gives them an incentive to use their cards more.

Why Credit Cards are Good for Merchants

Taking credit cards is the most common thing that a merchant can do to make it easier for customers to pay for their purchases, both online and offline. Credit cards are so ubiquitous that it’s rare to find a merchant that doesn’t accept them, and consumers have come to expect this convenience from their favorite merchants. Merchants might even find that they lose sales opportunities if they don’t accept credit cards and the customer doesn’t have enough cash on hand to pay for their purchase.

Credit card companies deposit money directly into the merchant’s account, relieving them of the need to deal with customer checks or moving large sums of cash from the business to the bank.

More people have credit cards than PayPal accounts, by a wide margin. Therefore, t’s more likely that your customer has a credit card than a PayPal account.

Why PayPal is Good for Consumers

PayPal is already online. All a consumer has to do is enter their PayPal credentials and their transaction is complete. Consumers can make purchases anywhere; at home, at school, at work, or at the beach. They don’t have to pull out their card and enter long strings of digits every time. PayPal works as a debit system, so you can’t spend more than you have available, keeping you out of debt.

PayPal has a very strong purchase protection policy that their customers can rely on to prevent fraud or being scammed by unscrupulous people online. If someone is a frequent user of eBay, they’re familiar with the purchase protection that PayPal provides. Ebay merchants are very cautious to maintain a positive rating with their customers, and will be quicker to provide a refund than have a protracted argument with an unhappy customer. In addition, customers have zero liability for fraudulent charges.

Why PayPal is Good for Merchants

Paypal payments show up in a merchant’s account almost instantaneously. They don’t have to wait days or weeks for payments to be posted to their bank. And, transferring money from your PayPal account to your bank usually takes a day. PayPal’s reporting system is very convenient for merchants to be able to track their transactions.

Many people consider money in their PayPal account as disposable income. For people who accept PayPal payments from friends or side businesses, the money in their PayPal account isn’t typically thought of as part of a person’s finances. So purchases made with PayPal are much more likely to be luxury or nonessential purchases. If a customer doesn’t have to deliberate whether or not they can afford a purchase, chances are they’ll complete the transaction more quickly and with less likelihood of having buyer’s remorse.

PayPal was conceived as an online payment system, well before ecommerce became as popular as it is today. That means integration of PayPal with your web site is usually going to be easier to accomplish than integrating a credit card payment gateway.

PayPal does not have any signup fees or monthly fees for maintaining a PayPal account. They do take a percentage of a transaction, but this is comparable to the service fees that credit cards charge per transaction. For a new or small online business, PayPal is more affordable than credit cards when it comes to startup costs.

Why Credit Cards are Bad for Consumers

Credit card users can be easily drawn into making too many purchases and creating a debt load that is hard to dig out from under. This may give them pause before completing an online purchase by asking themselves if they really need whatever it is they’re buying.

If your online customer is sitting at their computer, with their credit card in another room of the apartment or house, they may not be compelled to get up to get their credit card in order to enter the information to complete the transaction. They’ll abandon their purchase or leave their items in the shopping cart to finish “at another time” which might not come at all.

Credit card fraud is one of the biggest problems facing online ecommerce transactions today. In case you didn’t know, a credit card number is an algorithm, or a formula for generating the number. That means that given the right digits, a credit card number can be guessed, or “tumbled.” While the secondary number, often called the CVV2 number, helps to prevent that type of fraud, it isn’t always effective.

If a credit card is tumbled, lost or stolen, the credit card company will hold the customer liable for $50 worth of the unauthorized purchases. This might be seen as unfair by consumers who are being held responsible for something they may have had no control over.

Why Credit Cards are Bad for Merchants

When a customer uses a card that offers rewards, the credit card company actually charges the merchant for the cost of the incentive. So, in addition to the monthly cost for the merchant account at the bank, the transaction fee, and the percentage of the purchase that the merchant has to pay to the credit card company cuts into the merchant’s profit from the sale. If you’re a large company with hundreds or thousands of credit card transactions per month, the volume of sales can help to mitigate those costs, but if you’re a small business just starting out, those costs could add up to a significant amount.

Setting up a payment system on your online ecommerce site may not be simple. You typically have to use a payment gateway, which may involve an additional expense in order to set it up and get it working, if you don’t have the web development skills to do it yourself. If your merchant bank account doesn’t come with an online payment gateway, you may need to incur an additional monthly expense, making it less cost-effective to accept credit card payments online.

Why PayPal is Bad for Consumers

PayPal, for all of its benefits, is still a company, not a bank. It is not regulated the way banks are, and that can be bad for their customers. If PayPal suspects anything improper about an account, they can suspend that account, effectively freezing the money. A consumer’s only course of action is to provide PayPal with whatever information they require in order to unfreeze an account. There is little if any legal recourse available to the consumer.

Banks offer interest on accounts that maintain a balance, which means that the money in a bank account has the potential to earn more money. This doesn’t happen with money in PayPal. It simply sits as a balance until used, without any earning potential.

Fraud exists in PayPal, and accounts can be hacked and the money depleted without the customer’s knowledge. Banks are required by law to be insured, so in the event a bank is robbed, the money deposited into bank accounts can’t be lost. This isn’t the case for PayPal; they avoid strict and protective bank regulations by not being a bank. Additionally, PayPal is a publicly traded company, which means that if controlling interest in PayPal changes at some point in the future, the terms of service may change without PayPal customers having any recourse.

Why PayPal is Bad for Merchants

As mentioned earlier, PayPal is well-known for siding with the purchaser over the merchant. They do this to maintain their reputation as an honest broker for online transactions, a reputation that is well-deserved. This means that any dispute occurring between a merchant and a customer means the burden of defending the transaction lies with the merchant. It’s usually easier for a merchant to forgo the dispute, rather than potentially causing a disruption to their business in the event PayPal chooses to suspend the activity of an account.

As with consumers, PayPal can freeze a merchant’s account for suspected fraudulent activity, causing thousands of dollars to be frozen without any recourse other than to do whatever PayPal says in the hopes of restoring the account to active status.

Because PayPal isn’t a bank, there are no regulations in place that protect your money held your PayPal account. Effectively it is their money, and they are just permitting you access to it. That privilege can be easily revoked or tied up in bureaucratic red tape.

Advantage: PayPal

PayPal has one advantage over traditional credit cards: you can use your credit card to make payments through PayPal. If you are ready to check out on an ecommerce site that takes PayPal, and you want to use a credit card because of the rewards, because you have no balance in your PayPal account, or you want to make a purchase for your online business and your accountant insists on you using your business credit card for all business purchases, you can. PayPal accepts credit card payments in lieu of using your PayPal account. Credit card companies can’t provide the same convenience. This gives PayPal an edge over traditional credit cards when deciding which service to offer your customers.

It’s always a good idea to provide choices to your online customers, so they can be comfortable doing business with your company the way they want to. When choosing whether to offer credit cards or PayPal as the payment fulfillment system for your online business,

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7 Exercises to Help Build Team Collaboration and Communication

You’ll rarely find a successful business operating without teams that collaborate and communicate effectively. Studies have shown that companies with effective communication are more likely to retain top employees and have lower employee turnover than organizations in which communication is lacking.

With 86 percent of employees blaming workplace failures on poor communication and a lack of collaboration, it’s clear that it’s an area that you can’t ignore. Unfortunately, many teams do. Over one-third of employees feel that there isn’t enough collaboration within their organization.

It’s imperative that you continuously work to improve communication between employees to give your team an edge against the competition. The following are seven exercises you can perform with your team to enhance collaboration and communication on all fronts.

1. Discuss Roles and Expectations

A significant amount of miscommunication between team members is due to confusion around roles. Often, employees are unaware of their responsibilities, those of their colleagues, and the goals of the team as a whole. It may not be the most exciting team-building activity, but regularly discussing the roles and expectations of team members is one of the most effective ways to improve collaboration.

Ensure that task delegations are clear. Conversations between team members become much more efficient when they know who they should be talking to about specific subjects.

As a team, create short-term and long-term goals that you’d like to accomplish. Make these goals public to all members and revisit them often. A Salesforce study found that an incredible 97% of employees and executives contribute a lack of team alignment to negatively affecting tasks and projects.

When employees feel as if they’re part of a team working together toward a common goal, collaboration becomes easy. The tone of conversations shift from “me vs. you” to “us vs. the goal.”

Utilize performance reviews as an opportunity to pinpoint and fix communication issues within your team. If you notice an employee struggling to collaborate effectively with the rest of the group, these reviews are an opportunity to address that issue. Communication evaluations may seem obvious, yet only 18% of employees seem to receive them.

2. Visit the Local Watering Hole

Social gatherings are a great way to facilitate better collaboration in the office. When team members get the opportunity to connect through something other than work, they become more helpful, are less hesitant to ask questions, and become overall better collaborators.

Now, we’re not saying to get your team sloppy drunk every Thirsty Thursday. But grabbing one or two drinks after work a couple of times a month allows employees to loosen up and get to know each other in a more relaxed setting.

Work talk must stay to a minimum during these social outings; the collaboration is for the office, not the bar. If your team has trouble coming up with talking points that don’t involve work, you could try to follow in Evernote’s footsteps. The note-taking software company spun up Evernote University, comprising of interest groups and clubs that employees could join. With shared interests, employees have plenty of non-work topics to discuss.

You don’t need to restrict social outings to bars either. You could have a team lunch one day a week or schedule longer team outings each quarter. If you do choose a bar, emphasize that the event is optional, so non-drinkers aren’t uncomfortable.

3. Participate in Volunteer Work

Doing volunteer work as a team provides a whole host of benefits. Primarily, it’s another exercise that helps boost camaraderie between teammates, which inevitably leads to better collaboration. Don’t believe us? Over eight out of ten employees who have participated in volunteering through their workplace agree it strengthened relationships with their coworkers.

Similar to team happy hours, volunteer activities allow employees to bond outside of the workplace. Managers, interns, employees – everyone is on the same level while volunteering. Therefore, lower-level employees shouldn’t feel as intimidated as they normally would to strike up a conversation with someone higher up on the corporate ladder. Improving those vertical relationships are vital in ensuring that the communication channels back in the office are as transparent and efficient as possible.

The advantages of volunteering expand beyond improved communication and collaboration, though. A study by UnitedHealth Group reports that eighty percent of employees who volunteered in the past year feel better about their employer because of it. Additionally, allowing employees to apply their abilities outside of their work environment broadens their skill set and improves their leadership abilities.

Additionally, there’s a sense of internal gratification that many teams feel when volunteering their time. And alongside everything else, the business receives goodwill for giving back to the community. Employers prefer working at companies that give back, and 85 percent of customers prefer businesses that support a charity they care about.

Taking a holistic view, we can see that when teams volunteer together, it’s a win for everyone involved.

4. Choose the Proper Communication Tools

It’s impossible to collaborate productively without proper communication tools. A 2015 Alfresco survey found that 83 percent of professionals utilize communication tools to work with their team. Because the world is significantly more digital today than it was in 2015, we can safely assume the percentage is now even higher.

Failing to incorporate the communication tools that are best for your team leads to considerable collaboration challenges. In the same Alfresco survey, 59 percent of employees responded that they experience difficulties with the tools that their employer has in place. When employees are spending ample time on communication tool issues, they don’t have time to collaborate.

Identifying a poorly fit communication tool is the easy step. Figuring out which tool your team should use instead may take some time. As with the other exercises, choosing the right collaboration tools needs to be a team effort.

Sit down as a team to analyze problems with the current tools and talk through what ideal communication mechanisms would be. Fortunately, most (if not all) communication options offer a free trial period during which team members can see if it fits their needs.

Remember, each person has particular preferences. Millennials tend to communicate through different means than baby boomers, for instance. You need to find a communication tool that the entire team feels positively about using.

5. Play a Team Sport

Even if your team isn’t filled with athletes, going outside to play a team sport every so often could lead to tremendous collaborative and communicative benefits. (And don’t forget about the standard advantages of outdoor activities and exercise, as well.)

Once again, this team-building exercise provides your employees with a chance to learn more about each other. It gets colleagues not only talking about the sport you’re playing but also about any other sports they may play or watch. Two employees may find something in common that they otherwise would have never discovered.

Additionally, team sports put into practice much of the communication and collaboration skills that the workplace requires. Let’s see how it translates to soccer, for instance:

In soccer, players have to be clear on what player or portion of the field they’re guarding (delegating roles and responsibilities). They also have to let teammates know when they’re open (communicating bandwidth), need help on defense (asking questions), and see a scoring opportunity (discussing strategy).

When you break it down to fundamentals, a sports team is simply a group of people working together to achieve a common goal – winning. In sports, individuals need to put away their egos for the greater good of the team. The same logic applies to business.

6. Get Trapped in an Escape Room

We admit it, using an escape room as a team-building exercise may be a little cliche. But cliches exist for a reason.

If you haven’t heard of escape rooms, they’re effectively live-action puzzles that lock you and your team in a room for an hour or two. The goal is to escape using clues from around the room before the time runs out.

Escape rooms contain every aspect of collaboration that you would expect in a team-building exercise. Communication, rotating leadership roles, high-pressure situations, creative problem solving – escape rooms have it all.

While playing sports improves collaboration through physical exercise, escape rooms do so by stretching your mind. The rooms force you to brainstorm, communicate ideas, and build off each other’s suggestions to find solutions to the clues.

Having a time limit further tests your team by adding a layer of pressure to the puzzle. It simulates a high-stress environment similar to one that you’d find in the office during a busy season or product release, for example.

Escape rooms are ideal for smaller teams as they typically limit the activity to around ten people. Because the focus of this exercise revolves around leaving the room, teammates won’t have a chance to discuss much else. So, you may want to combine this event with a happy hour or team dinner to give participants that opportunity.

7. Start a Book Club

Book clubs are an excellent way to get employees together and talking in a group setting. You may not touch on collaboration too much during book club meetings, but participant’s communication skills will definitely improve.

The success of a book club is wholly determinant on the questions you ask and discussions you facilitate. Don’t just ask yes/no questions or probe for a summary of the reading. Instead, pose open-ended questions that get contributors thinking analytically about their answers. Get employees talking about how they can apply lessons from the book to their work. If you can, prepare these questions ahead of time.

As a moderator, ensure that everyone participating gets to speak during the discussion. Encourage those who are typically less talkative to share their opinion. As they become more comfortable in that role, you’ll see that confidence transfer to workplace communication as well.

For your book club, choose books that are relevant to your business. One month may be a book about general business practices while the next focuses on your industry. Some of the books may even be on communication and collaboration themselves.

You don’t want this book club to feel like homework. Keep the atmosphere laid back, and don’t chastise someone if they didn’t have time to do the reading.

Most Importantly, Spend Time Outside the Office

You’ve probably already noticed, but most team collaboration and communication exercises occur outside the office. The best thing you can do to improve team collaboration is to enable colleagues to feel more comfortable around each other.

Every team (and team member) is different. Some people may enjoy happy hours while others prefer volunteering. It’s crucial that you open a dialog with your team to discover what works best. Likely, you’ll rotate through multiple collaboration and communication exercises.

It doesn’t matter which exercise you end up choosing, as long as your team becomes more comfortable around each other and each individual improves his or her collaboration ability in the process.

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6 Useful CRM Techniques That Can Help in Marketing

Having a Customer Relationship Manager system is an invaluable asset for any small business. A CRM can take care of the automated communications for your business so that you are free to handle more complex and critical business tasks. It can help increase the visibility of your business by engaging customers through email and social media channels. Salespeople love CRM software to help them track their successes. The wealth of data and information that is stored in your CRM can be used to help you figure out your next online marketing strategy.

Only 65% of new businesses start using a CRM within the first five years. For those that do, the difference is remarkable. They can grow more quickly and create loyal customers more quickly. In modern business markets, companies are looking for every edge that will help them succeed, yet over one-third of them completely overlook the one tool that makes it all happen: a CRM.

Your CRM is worth more to you than you might realize. There is a wealth of data in your CRM that you can use to help you with your next marketing strategy, and the one after that. Unleash the marketing power hidden in your CRM by utilizing the features you’ve been overlooking and you’ll be pleasantly surprised by the results.

Consolidate Your Sales Funnel

Experienced salespeople have their own methods for handling their sales leads. While it’s generally a good idea to encourage your sales team to be successful according to each team member’s style, it’s hard to determine the cost to benefit ratio if you can’t compare your sales team’s efforts using the same scale. One salesperson may seem like a good performer, but in reality, he or she may be spending twice as long on the phone, in meetings, and on the road in order to make the sales quota. A new sales associate may perform sporadically, because they don’t keep track of how they achieved their sales.

You can configure your CRM to allow your salespeople to record what stage of the sales process they’re at with their active customers. As customers move through the pipeline, the CRM can trigger different events, including emails, alerts and schedule meetings, so your salespeople can see at a glance how/when they need to follow up with a lead. You can then use the metrics that the CRM stores to study where the bottleneck or choke points are in your sales pipeline are and focus your attention on how to overcome these problems.

According to a study done by Salesforce, a CRM platform can increase sales by up to 29%, and boost sales productivity by up to 34%. Not only does having a CRM for your sales team gives everyone the same advantages, but it can also shorten the sales cycle by up to 14%. That’s more than one additional customer for every ten new customers you onboard. And, every one of those customers is one that you snatched away from your competition.

Automate Your Email Communications

A top-quality CRM software package will have email functionality built right into it. By teaching the system how to respond to incoming email queries by responding with specific templates, you don’t have to spend countless valuable hours copying and pasting emails to countless potential leads that may not amount to anything. You can set your CRM to respond to requests based on choices that visitors make in their inquiry, add them to your newsletter list (you have a newsletter list, right?), and remarket valuable incentives to them in order to convert them to customers.

A customized email message is a gateway to your entire online presence. Whether it’s useful articles or links to your social media channels, giving your customers a way to engage with your company online is essential for any small business. Create a light but effective email template and use it in your CRM to send targeted messages to different segments of your customer base. Offer your customers incentives they can only receive by validating their purchases with codes they can only get from their email. Send loyalty rewards to good customers. Get creative with your email.

Email is still one of the strongest and most reliable online marketing tools available to any business. It’s cheap and easy to track engagement with your email subscribers. You aren’t limited to small advertising boxes or five-second video clips that can be easily ignored.

Drive Customers to your Social Media Channels

When your customers decide to sign up with your company, your CRM should be able to record and track their social media accounts. You can correlate the types of customers with the different social media channels they use and use that information to market specifically to them on those channels.

Let’s say you have three different tiers of a product; you can sort out which customers have social media channels based on the product tier they’ve purchased and direct your cross-marketing efforts to different social media channels depending on their purchase history. If most of your low-tier customers have Twitter, and most of your high-tier customers have Facebook, you might consider focusing your high-tier cross-marketing efforts on Facebook. This works in reverse as well; if your high-tier customers haven’t identified which social media channels they’re on, you might consider pushing your Facebook presence to them to get them to like your business’ Facebook page.

Don’t forget the emerging social media marketplaces, either. Companies are offering their products and services directly in their social media channels so customers can make purchases however they’re most comfortable. If you find that a growing portion of your sales fulfillment originates in your social media channels, you might consider using more company resources for building that marketplace, rather than your “tried and true” methods that are slowly becoming outdated.

Social media has created an entirely new way of looking at and working with business-to-customer communication, marketing and sales. Instead of aiming for the broadest markets, you can now target specific customers in well-defined markets, using social media outlets as an effective and relatively inexpensive marketing tool.

Track Your Customer Experience

A CRM that can interface with your visitor analytics is a wealth of information that can help you improve your customers’ online experience. How visitors reach your site, where they go, how long they stay, and whether they convert to sales is all part of any analytics package. Your CRM can help you determine where your marketing efforts are best spent, and which marketing strategies should be revisited at a later time.

One example scenario starts with an email sent out by your company through your CRM. The email has a link to a specific page. When the page is visited, your CRM can track which customers have clicked on the link, and which pages they have visited once they reach your site. Another example would be to set up a tracking link for your social media channels, so you can see which customers have followed you through which social media platform. This can help you decide where to invest marketing and advertising dollars most effectively.

Online users are always wary of how web sites track their online behavior. They feel that it’s too intrusive and a little creepy. The truth is, when you take your customer behavior as a set of data, you can find patterns of behavior that will help you with your marketing strategy without compromising your customers’ private or personal information.

Use Your CRM Data for Predictive Analysis

One of the newest buzzwords is predictive analysis. It’s a method of determining future performance based on the current data of your business. It’s a business metric methodology that’s been around for decades, but recent innovations in programming technology have made predictive analysis algorithms accessible to small businesses.

Businesses have always used sales data for prediction. If your business has seasonal offerings and you’ve already been through one season, you already know you’re going to need more staff, more products, more of everything, in order to handle the seasonal increase in volume. That’s predictive analysis in a nutshell, but it’s more complex. You can feed it different data sets in order to get more detailed and sometimes surprising insights into the sales behavior of your business.

Let’s take swimsuits as an example. If you have any familiarity with retail, or swimsuits, you are probably thinking that swimsuits are a popular pre-summer item, and you’d be correct. Using predictive analysis tools in conjunction with your CRM data, you might notice that there is a modest increase of inquiries (search terms, communication keywords) just after the new year as well. This would tell you that people who are interested in going somewhere warm for winter vacation are querying your site for swimwear. Knowing this in advance by using predictive analysis with your CRM data can prepare you to create a marketing campaign for swimsuits when it wouldn’t necessarily be intuitive.

Predictive analysis relies on data that you’ve gathered in order to make predictions on how your business is going to perform in the future. Luckily for you, your CRM is a wealth of data about your customers, your marketing campaigns, your sales pipeline, and your customer’s behavior that can give you the edge over your competition in ways you never even thought of.

Sort Your Customers into Markets

Not all customers are created equal. It’s not a very popular opinion, but that doesn’t make it less true. The fact of the matter is that some of your customers are the “good” kind, with loyalty demonstrated through multiple purchases, positive online ratings, and other social engagements. Other customers were only engaged once, and you never heard from them again. Don’t spend time chasing after business that’s hard to get, focus on your markets that have given you their business happily and repeatedly.

Wouldn’t supermarkets love to be able to change their displays to attract each individual customer that walks in the door? What if you knew that the next customer who walked into your shop always headed for the gourmet coffee shelf first? Maybe the next customer who comes in always heads for the discount items, but never seems to buy anything? Fortunately for you, online marketing is much easier to tailor to your specific customers. Each of the examples mentioned above demonstrates a different type of customer who would respond to vastly different kinds of marketing approaches.

Your CRM can identify and sort out your different customer types so you can send marketing materials that speaks to each one individually, so you can make decisions on who you’re trying to target and how to target them. The coffee connoisseur might get a rewards program email, while the casual browser might only receive end of season clearance emails. Your CRM does the hard part for you.

Use your CRM to create tags for different customers, based on their behavior patterns. This way, you can target them more accurately when it’s time to run a campaign. Do you have customers that open almost every email? What about customers that consistently use your hashtags? Or customers that share your posts? Those are three very different types of marketing, and with your CRM, you can tailor your efforts to engage your customers the way in which they prefer the best.

Having a CRM for your business that consolidates your data gathering can help you decide on your next marketing strategy. Whether you’re using it to streamline your sales process, keep in touch with your customers by using automated emails, improve audience engagement with your social media, learn more about your users’ behavior and browsing patterns, try to determine your plan for the coming business year, or managing your customers by their purchasing behavior, your CRM is a key element towards giving you a competitive advantage, and making your business thrive.

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7 Tools to Increase Ecommerce Sales

There are no magic tricks when it comes to increasing ecommerce sales. As a small business owner, you need to put in a tremendous amount of time and effort to grow your business. Increasing sales is only one of the many different tasks you need to juggle in order to make sure your business is growing well.

That doesn’t mean you are at the mercy of the whims of your customers to grow your business. As a small business owner, you’ve probably learned more than a few tricks to keep your ecommerce cash register ringing, but in order to grow your business, you’ll need to expand your arsenal. Fortunately, there are plenty of amazing tools available to increase your ecommerce sales.

We’ve evaluated both the services you’ll need and the specific tools you can use to effectively increase ecommerce sales without compromising your work on all other aspects of running your business.

Email Marketing Newsletter

Email newsletters aren’t only the granddaddy of all online marketing initiatives, but they’re a tried and true method of increasing sales for businesses of all sizes. Personally-crafted messages deliver your sales pitch directly into your customers’ email inbox, where a large majority of consumers still spend their time every day.

Use incentives in your emails to track the effectiveness of your campaigns. By offering a discount on purchases made by using a coupon code that your customers can only get from the email, you can see how many people have opened and clicked on the links to the discount embedded in the emails, in order to evaluate the effectiveness of your email campaign.

Use personalization to connect with your customers on a more informal level of communication. By collecting first name, last name, and date of birth, you can customize the email so that your recipients can feel like you are addressing them personally. Sending a redeemable gift or other incentive on a person’s birthday is one of the more-clever – and effective – ways of building customer loyalty.

The downside to email is that your personal, meticulously crafted message is only one click away from the trash. People that receive too many emails often don’t have time to read them all, and simply send unimportant email messages to the circular file without looking at them. This makes your job harder to make your message powerful enough to give your message a second look.

Email has been around as long as the internet. That doesn’t mean it’s outdated, rather, that email is one of the best and most recognizable systems for message delivery available.

Our top picks for small business email marketing services: MailChimp, Constant Contact, AWeber and GetResponse.

Social Media Management

Communicating with your customer base on a regular basis is one of the keys to keeping your customers engaged. The trouble is, remembering to do it on a regular basis is not always convenient for a busy small business owner. Fortunately, there are many tools that can help you schedule your social media management and make the otherwise time-consuming task much more manageable.

There are, in fact, several companies that provide services that allow you to schedule your messages to be sent at a specific time, on a specific day. They typically allow you to register with several social media platforms at a time, so you can broadcast your message to multiple platforms simultaneously. You might even find, to your surprise, that you get more response on a social media channel you hadn’t been giving enough attention and create a completely unexpected boost in your online ecommerce sales.

If you’re not the kind of person who likes to plan ahead, using social media management tools to improve your ecommerce sales might be harder for you than necessary. Having to think about your brand message to attract ecommerce sales weeks or months in advance might not be your specialty, but you may find that after a few times, planning a few months in advance gives you more time to plan and refine your ecommerce strategy, leading to higher sales.

Planning your social media messaging is necessary in order to stay on brand and on message. By using a social media manager application, you can plan days, weeks, or even months in advance to guarantee that your customers are seeing the right messaging at the right time.

Our top picks for social media management tools: Hootsuite, Buffer, CoSchedule.

Customer Relationship Manager

Having a tool that can track your communication cycle with your customers is one of the most underutilized software platforms that can make a huge impact on your ecommerce sales. Did your competition just start growing exponentially? Chances are they went out and purchased a CRM software package, giving themselves a significant advantage over you and the rest of their competition.

Having a CRM for your small business is one of the best investments you can make to increase your ecommerce sales. With it, you will be able to track leads, sales, products, marketing campaigns, your sales pipeline, and customer communications. You will be able to automate many of the repetitive, redundant tasks that take up so much of your time, leaving you with more time to take care of the things in your business that really matter.

If you want to go the extra mile for your customers, make sure your CRM has a way to communicate with your web site. Hire a professional developer to link the two together, so you can provide your customers with a real-time service portal on your web site.

If you feel like you’re losing ecommerce business because things are falling through the cracks, invest in a CRM. It will help your small business immeasurably to shore up many of the cracks in your sales pipeline and customer communications.

Our top picks for CRM software: Salesforce, Zoho CRM, Monday.com.

Traffic Analysis Tools

Knowing how your visitors are arriving at, traveling through, and exiting your site are important elements of business intelligence that can help you improve your online ecommerce strategy. Fortunately, web sites have been logging statistics since the early days of the internet and have only improved over time.

There are numerous packages available to help you analyze your web site traffic patterns. With them, you can see where your customers come from globally, what the busiest days and times of day are for your site, what platforms they’re using and what devices they’re using to view your site. Your statistics can show you any errors that have been logged for missing pages, what search terms your visitors used in the search results that your site appeared in, and other interesting aggregate information. Tools like Google Analytics can show you the flow of traffic of visitors through your site, including which page they use to enter, which is especially useful information if you use landing pages to track advertising campaigns.

As a small ecommerce business owner, you need to be constantly studying your customers’ traffic patterns to figure out how to best get them to convert from browsing to make the sale. Using a traffic analysis provider will take the guesswork out of what your online visitors are doing, so you can concentrate your efforts on increasing ecommerce sales where they will be most effective.

Our top picks for traffic analysis tools: Google Analytics.

A/B Split Testing

When you have an idea for a marketing campaign but you aren’t sure which way to approach it, you can (and maybe should) always let your customers decide. A method known as A/B split testing is a useful tool to have in order to help you increase ecommerce sales on your web site.

An A/B split test randomly shows one-quarter of your customers your first advertising concept, and one-quarter of your customer the other concept. After a predetermined period of time, such as an hour or a day, you tally up the reactions to each of the advertising concepts. Whichever does better gets shown to the other half of your customer base. In this way, you can target your market with the more effective campaign.

If you have WordPress or some other popular web site platform, look for a plugin or extension that can provide you with this functionality. A/B split testing is also available on most of the popular email campaign sites.

Learning about what your customers like and respond to when you advertise will help you save money by focusing your campaign on what they like, rather than what you or your graphic designer think might be effective advertising.

Our top picks for A/B testing tools: Google Optimize, Unbounce, and Optimizely.

AI Chatbot

One of the newest tools in the online ecommerce sales toolkit is an artificial intelligence, or AI chatbot. This is a program that is taught how to respond to particular questions from customers that visit your web site.

For more than the last two decades, web sites have been the ultimate sales tool for businesses. Always available, always able to recall everything they were ever told, never out sick or on vacations, company web sites were terrific employees. The only thing that was really lacking was the element of human interaction.

Then along came artificial intelligence. Recent advancements in AI and machine learning technology have enabled web sites to have the ability to communicate with human customers through the use of chatbots. A chatbot is software designed to learn through teaching it about whatever it is your company wants the chatbot to know, and then be able to converse with customers using natural language. If your employees are constantly returning calls and emails of the same questions over and over again, investing in setting up a chatbot will give them more time to focus on more critical elements of their jobs.

Your customers will appreciate the effort your company makes to communicate with them in a way that is comfortable and familiar. Implementing a chatbot system to serve your customers and answer their pre- and post-sales questions will show them that you care about them and how they want to do business with you, which means more business for you.

Our top picks for chatbot services: Zendesk, Liveperson.

Predictive Analysis

Sometimes, when you know what’s happening with your business, it’s already too late. Wouldn’t it be better if you knew what was going to happen before it happened? That’s what predictive analysis tools can help you do: learn what is going to happen to your business based on what has already happened.

In addition to chatbots, machine learning, another aspect of artificial intelligence, is being used to help small businesses predict how their sales are going to perform based on the valuable data that has been collected over the course of time. While the math that handles predictive analysis isn’t important, what is important is knowing the projections for your business, whether it’s ecommerce sales or some other aspect of your company.

In recent years, the availability of predictive analysis models and techniques have become available to small businesses. Find an online company that can offer you the type of predictive analysis you need for your small business. If you already have data for your ecommerce business, you can use it to predict what is going to happen.

One of the drawbacks or predictive analysis is the time that it takes to refine your prediction model to give you the most accurate forecast for your small business. If you’re considering using predictive analysis to improve your online sales, it’s best to start as soon as possible to give you enough time to get accurate predictions.

Our top picks for predictive analysis tools: Domo, Sisense.

Technology tools that were once only available to large corporations are now accessible to small business. There are many different tools that small business owners can use to improve their ecommerce sales. By using some or all of them in combination, you can give your business the power it needs to reach your customers, handle communications, and analyze different parts of your small online business. Don’t wait too long to start using these tools, so you can get ahead of your competition.

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What is Responsive Web Design & Why it Matters

Research has shown that over the last few years, businesses interact with their customers and potential customers more and more on mobile devices, such as phones and tablets. If you’ve already built a website, you’ve probably already invested thousands of dollars making your customer’s online experience with your company a pleasant. professional one. Imagine their disappointment when they come to your site, and the text is illegible, the buttons are too small, and they have to scroll left-to-right in order to see everything on the page. That type of experience is enough to turn away even loyal customers, who would rather do business with your competition than have a disappointing user experience. What can you do to ensure that your visitor’s experience isn’t a nightmare?

Unfortunately, adding to the problem is the fact that mobile phone manufacturers have created dozens of different sized mobile devices with different size screens. This makes the job of the developer that much harder. Developers need a way to create a web site that looks good no matter how large, small, tall, or wide the screen might be. And since they can’t predict what size the newest phone’s screen is going to be, they need a way to determine the screen size, and make the site work on the maximum number of possible devices.

The solution is to create – or convert – your site to use a responsive design, so when someone visits your site, whether it is on their phone or their laptop, they can easily navigate and find the information they’re looking for, and continue to do business with your company.

When mobile device users visit your company’s web site, they expect that their experience will be valuable and user-friendly, regardless of how they connect with your site. If you ignore the growing need to build a mobile-friendly website, you’re essentially closing off your business to a significant percentage of customers.

What is Responsive Design?

Simply put, responsive design is the coding of the design for your web site that responds to the screen upon which it is being seen. If you view your web site on a laptop or desktop computer, your monitor is longer than it is wider. This is commonly known as landscape or having a horizontal aspect ratio. Your tablet or phone, on the other hand, is usually held upright, making the screen taller than it is wider. This is known as having a vertical aspect ratio or portrait layout.

Smaller mobile devices, by virtue of their size, have a smaller viewable area, also known as smaller screen real estate. Responsive design would be used to hide unnecessary elements or transform elements so that the more important information is visible more clearly, while secondary information is moved aside or hidden behind clickable elements.

Depending on which device your visitor is using to view your web site, the pages that they see need to be optimized for that device, showing the information they’re looking for in a clean, readable format.

The Purpose of Responsive Design

The function of responsive design is to provide your web site viewers with the most comfortable and pleasant experience. Different elements on your site – such as your logo, a search bar, your navigation, and so on – will need to be adjusted in order to fit properly on the screen. On a smaller screen, the logo would need to be scaled down or perhaps a different version would need to be shown. Likewise, the navigation, which on a desktop machine may run across the top of your site, would have to be adjusted to fit on a vertically oriented screen, and might be hidden behind a menu button in order to maximize screen real estate.

Responsive design is used to display the elements of a web page so the user can view the information easily, and interact with the site in a way that is intuitive and easy to manipulate.

The Mechanics of Responsive Design

The basis of the technology for responsive design is Cascading Style Sheets. Developed for web designers in the mid-1990s, CSS allows designers and developers to use style directives to manipulate every element of an HTML page.

When mobile devices were first able to display web pages, designers and developers were faced with a problem displaying web pages that were designed for landscape viewing on vertically-oriented screens. They solved it by using CSS to determine the size and orientation of the screen displaying the page. Depending on the size and layout of the page, designers and developers could manipulate the web page being displayed to show the elements they wanted to show in the orientation that the person viewing the site was using.

Properly created responsive design sites will take into account various screen widths in order to determine which elements should be shown and how. For example, if your site has three information boxes on the home page sitting side by side, the responsive version of the site might stack them vertically. That way, users can simply scroll down and still see the same information. Scrolling down, on a phone, is considered a natural behavior, so mobile users wouldn’t consider an extra flick of the thumb as a nuisance.

One of the more important technical aspects of a site that uses responsive design is the ability for elements on the page to resize fluidly, depending on the size of the screen on which they are being shown. That means your developer needs to know how to code the elements of your page so that they can grow or shrink to match the environment in which they are being seen.

Building Your Site Using Responsive Design

When designing or redesigning your web site, it’s important to make certain that the person or company who is performing the work understands that responsive design is not optional. If they’re professionals, they will be able to provide this without charging too much extra, if any. Many web page template designs are built with responsive design in mind, so it might make sense to start from there.

If your designer insists on creating a design from scratch, make sure they provide you with mockups of what the site will look like on mobile devices, and that when your site is delivered it does in fact work on multiple mobile platforms. Similarly, your developer should understand the specification of creating the code for every page on the site so that they all work properly on different size mobile screens.

Having a mobile-friendly, responsive web site for your customers is non-negotiable. Your technical team should not dictate your company’s user experience. Have them build the site the way you want it to be, for your customers’ benefit.

The Positives of Responsive Design

As discussed earlier, having a web site that is responsive to the mobile devices your customers are using is a benefit, as it provides a positive user experience. It’s also important to stay competitive in your market by making sure your site is up to date on technology that has been around for quite some time.

Google will identify sites that provide a mobile-friendly, responsive version of the web sites that is displayed to visitors who visit the site on handheld devices. If in a search on a person’s mobile device your site and your competitor’s site are both shown in the results, that person will be more likely to click on the return result for the site that Google flagged as being mobile-friendly. In fact, Google will weigh the results of a mobile-friendly site, so a non-responsive site might not appear well in the search results.

You can use metrics from your site’s statistics to determine the percentage of your visitors that use mobile devices. If you have been considering creating a mobile app to supplement your business, having a high percentage of mobile visitors may help you make the decision whether or not to invest in creating the app.

If your rate of mobile visitors is high enough, you might consider redesigning your site to focus on mobile users, rather than desktop users. PayPal, an online payment system, recently redesigned their web site with a minimalist look and feel that works for both desktop users and for customers who don’t have their mobile app installed or readily available.

The Negatives of Responsive Design

Responsive design is not without its drawbacks. Because your designers and developers have a much smaller screen with which to work, they will present you with options about what you do and don’t want to be seen on a mobile device. While your first instinct would be to include everything, that might not be the most efficient or user-friendly decision. You will need to decide on each and every element in your web pages whether it improves or enhances your user’s experience on the mobile version of your site.

Having a version of the site that displays differently on desktop computers and mobile devices also means that you will need to make sure that both versions work correctly. That means the quality assurance for your web site is going to have to be twice what it was. Testing both versions means that it will take longer to roll out new features on your site, in order to make certain that everything is working as it is supposed to.

Having a web site that can adapt easily to your user’s viewing environment is an essential component of commerce in today’s competitive online market. Whether your visitors are simply coming for information, or they are looking to transact business with you, their experience on your site is going to determine whether or not they stay on your site or visit your competition. By implementing responsive design, you can control your user’s experience no matter what device they use. A responsive site created by professional designers and developers will help with your rankings by letting search engines know that your site is mobile-friendly. If you haven’t already done it, it’s time to audit your own site to make sure your customers have the best experience on your site that you can give them.

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21 Business Loan Requirements You Should Know

At some point in the life of your business, you’re going to need more money than you have on hand. It may be to cover payroll during the busy season, or a capital investment in newer technology that give you the edge over your competition.

When applying for a small business loan, whether it’s for a small amount to tide you over during a tight season, or a larger loan that will help you grow your business, there is a lot of information that your lender will need, whether you’re borrowing from a bank or from an alternative lender. Here’s a comprehensive list of twenty-one things you’re going to need to bring with you when applying for a small business loan.

Loan Amount

How much do you need? That’s a very good question (and a seemingly obvious one), and one of the first ones a bank of lending institution is going to ask you when you apply for a small business loan. This isn’t a number that you simply make up; you’re going to have to provide details to the banks you approach when you decide to apply for a loan. In some cases, you may need to prove why you need a specific loan amount based on existing debts, or you may be asked to show a price list for the expenses you’re looking to take on.

Loan Type

As discussed in previous articles, there are numerous ways that a bank can give your small business a loan. You will need to review the different types of loan offerings that are relevant for your business and determine which one is the best option. Whether it’s an unsecured small business loan, a secured small business loan, a small business line of credit, invoice factoring or a business credit card, knowing what to ask for will show the loan officer that you’ve done your homework and will make sure that you get the best loan possible.

Loan Purpose

You need to be up-front and honest with your lender regarding the purpose of the loan. They aren’t going to simply give you a loan because you need “stuff and things.” Identifying the purpose of the loan will also help you focus your attention on the essentials, giving you a more accurate number to present to the loan officer when you apply for your loan.

Make a very detailed accounting, and if you can’t give precise numbers, estimate. Factor your estimates conservatively, meaning on the high side, so you don’t wind up with less than you need and create a financial crisis.

Business Credit Score

If you have ever applied for a personal or a small business credit card, chances are you’ve already seen your credit score. In short, your business credit score is a number determined by several factors that help banks and other lending institutions determine whether or not your company is a credit risk. Having a recent credit report will give you an idea of how banks will look at you and your business, as well as give you an opportunity to correct any issues on your reports that might affect your score negatively.

Go on one of the big three credit reporting agency web sites and request a credit score report for your company. Go over the report and try to resolve any outstanding issues that might still be on your credit report, so when you approach lending institutions, you will have a better chance of securing your small business loan.

Personal Credit Score

Banks will want to see your personal credit score and credit report as well. They want to see that they’re considering lending money to someone who is financially responsible in their personal life as well as in business. Like your business credit report, get a copy of your personal credit report and work to resolve any issues that might be negatively affecting your credit score, so you can show the bank that you are a good credit risk.

Business Plan

Having a business plan for your small business is like having a roadmap of where you’re going with your business and how you plan on getting there. And the lending institutions you visit to apply for your small business loan are going to want to see that plan.

Have a copy of your business plan ready to go, and make sure it’s up to date, accounting for any changes in the plan you’ve had to make in order to accommodate real life getting in the way, for better or worse. Go over the numbers in your business plan a few times so you’ll have them at the ready when the loan officer starts asking questions.

Business Permits

If your business operates legally, chances are you have had to apply for, and receive, permits for your business. Make sure your permits are all current, and that you have copies of all the permits your business requires to operate in your city and state. If any of your employees require certifications or permits in order to work in your industry, make sure those are up to date as well. It’s a good idea to call any regulatory agencies that you need to report to and make sure that your business is current with any regulatory obligations you may have.

Balance Sheets

Small businesses use balance sheets to get periodical snapshots on how the business is doing financially. Have a record of your company’s balance sheets available so you can show the lending institutions how your business has been managing. Go back as far as you can and make notes on anything that might raise concern when they are reviewed, such as a slow month or seasonal profits.

Bank Statements

You may have kept painstakingly accurate balance sheets and accounting statements in your accounting software, but the banks where you want to apply for a small business loan are going to want to independently verify that your bank statements reflect what your other financial paperwork says. The more bank statements you can provide, the better the loan officer can determine whether your business is going to be a good candidate for a small business loan.

Tax Returns

As part of your financial footprint, your tax returns are going to be a vital element in helping determine whether or not your business is successful enough to be given a loan. Bank officers will see that you’ve been diligent in submitting your business’ taxes, and whether or not your business demonstrates profitability.

Lease or Deed

Businesses that are well-established tend not to move around so much. Have a copy of all of your leases or property deeds available for review, so the lending institution can see that your business is going to be around for years to come. If you are trying to secure a small business loan for a newer, larger, or better property, bring a copy of the potential lease so the bank can evaluate the viability for your new location.

Business Age

The longer you’ve been in business, the more comfortable banks will feel about lending you money. Obviously, this is counterintuitive, since it’s usually younger businesses who tend to need small business loans to help them expand to the next level.

If you’re a relatively new business, you might find banks to be somewhat hesitant to lend you money at a more favorable rate. Remember though, this is a negotiation; the bank is going to be making money on the interest you pay on the small business loan. You might have to look a little harder, but eventually you’ll find the best loan terms that your business can manage.

Accounts Receivable Statements

Money is constantly moving in and out of your business. Your balance sheets might show money that hasn’t been paid yet for products or services your company has already provided, but it’s a good idea to have a folder ready with copies of any outstanding invoices you’re waiting on for payment.

Accounts Payable Statements

The same way banks want to see any money your company hasn’t collected yet, they want to see any bills that you haven’t paid yet, either. Your accounts payable statements will show the lending institutions that you can manage your expenses responsibly, and that you can pay your bills on time.

Collateral

Your business may have assets that you can leverage as collateral for your loan. These might include vehicles or properties that your business owns that you can offer to the bank as security for your small business loan. Not only will this show the bank that you’re willing to shoulder some of the risk in order to secure the loan, but it will also help you negotiate for better terms and a better interest rate for your loan.

Debt Schedule

If your small business has outstanding debt from a mortgage, previous loans or investments, showing the lending institutions or banks your debt repayment schedule will give them an idea of what your fiscal responsibilities are, and how much a small business loan will add to your business’ debt load.

Revenue Forecast

After being in business for a few years, any small business owner should be able to forecast how well they expect their business to perform, based on past performance. While both you and the banks know that it’s only speculation, a decent revenue forecast for your small business can help persuade the bank that your business will be financially viable for the foreseeable future.

Payroll Records

Payroll is probably the biggest expense for your small business. Your payroll records will show the bank that you are managing your human resources properly, and that you are up-to-date with your payroll taxes and other obligations, such as pensions.

Personal Assets Statements

One of the more uncomfortable things the bank may ask for are statements of your personal assets. This is to determine whether or not you have personal assets that you can provide as collateral to secure the loan, in addition to your business assets. Banks will be more willing to lend you money if they know you are sharing the risk.

Business Continuity Plan

If your business is in a high-risk location that may be subject to natural disasters such as earthquakes, tornadoes, or flooding, the banks will want to see your plan for how you will maintain your business should disaster strike. Alternate work locations, offsite data backups, and other plans for maintaining business continuity will show the lending institutions that if the worst should happen, you will be able to minimize the impact it will have on your business, and that you’ll be able to continue to provide your customers with the services and products that your company provides.

Business Insurance Information

Your business probably has insurance to protect against damage, theft, fire, and other possible calamities that any business might face. Have copies of your insurance policies for all of your business assets, properties, as well as any insurance policies that protect your business from damages or loss.

Banks make money by providing loans to small business and receiving the interest on those loans. However, they have to be responsible about who they provide with those loans. While it might seem bordering on crazy, the information they will ask you to provide will help them get a clear picture of your business from the perspective of potential risk. If your business has been fiscally responsible and careful, following a well thought out plan, and making sure you’ve met all of your financial obligations, you will be considered favorably as a low risk, and be able to secure a loan to help you reach the next stage of growth for your small business.

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When to Outsource and When to Hire In-House: A Guide

When it comes to managing the staff of your small business, it seems that it’s always difficult to figure out what the best way of bringing in new employees should be. On the one hand, having more full-time employees means you have people that you can rely on, who are “your” people, and who will learn to do things the “company way”.

On the other hand, outsourcing business tasks to freelancers or service businesses means you don’t have to invest in the infrastructure to support the task. Just as importantly, overhead you typically have with employees isn’t an issue, and as outsourced service providers, they’re always trying to make sure that you’re happy with their work.

In some cases, it’s obviously impractical to hire in-house. For example, i you manufacture products, setting up a factory that your company owns might be financially impractical, when factories already exist and can manufacture your products for a fraction of the cost. For other businesses, the exact opposite is true. You can’t really run a restaurant by outsourcing your labor in the kitchen and on the floor.

The only rule is that there aren’t any rules. You don’t need to make an absolute decision about hiring in-house or outsourcing everything. You need start by evaluating each task that needs doing, then deciding which are more practical to fulfil with full-time employees, and which can be done by a freelancer.

Determining when to outsource tasks and when to hire in-house is a complex balancing act that can mean the difference between the smooth operation of your business and constantly simply trying to make it through another day without a staffing catastrophe.

Look at You Core Business

Whatever your core business is, that’s where you need to make the hardest choices on whether or not you should hire in-house or outsource. It’s at this level where the decisions you make will have the greatest impact on your business.

Let’s say you run an online retail business. You may not manufacture the product in-house, but you will probably want to consider bringing in web development people to help you maintain your online presence. If you’re trying to build and maintain your online brand, you don’t want to cycle through freelancers who will want to constantly upend what the last person did. In this case, it is your online presence that is really your core business and bringing in the people to support that should be your priority.

There are some business tasks that you will probably need right from the beginning even though they might not have anything to do with your core business. Bookkeeping is a classic example. You need someone on staff to be responsible for tracking the day-to-day income and expenses for your business. Do you hire someone and pay their salary even though they might have a light workload in the beginning, or do you outsource your bookkeeping and plan to bring it in-house in the future?

Graphic design is an aspect of business where outsourcing might be more practical, depending on your business. If you’re in financial services, law, or other professional businesses, you may need someone to design business documents, presentations, and so on. Having someone on staff to do design work, when there isn’t much design work to be done, could be a waste of resources that ends up costing your company more than it’s worth.

Consider one of the newest transportation business models, peer-to-peer ridesharing. Uber, Lyft, and Gett are all well-known examples. None of these companies are actually in the business of transportation. They are all in the business of building the technology that provides the logistics for people to either order rides or provide ridesharing services. None of them actually hire drivers as employees; the drivers are all outsourced. They don’t even own their own technology infrastructures; that’s outsourced as well. These companies focus on their apps and ensure that their ridesharing business can always be at peak performance.

Even though your business might be defined by something else, you need to properly identify the core business tasks that your company performs in order to correctly staff your business with the right people.

Loyalty

One of the less popular things to talk in small businesses is employee loyalty. Years ago, employees were hired at low-level positions and through years of hard work and dedication, they would rise through the company ranks, earning a well-deserved retirement pension at the end. Nowadays, this employee model is becoming more and more rare. Companies are much less likely to hire for the long-term. Workers know this and have adjusted their expectations to match accordingly. Even your best, most-dedicated employees might decide to leave if they find a better opportunity. It’s up to you to make sure that your company remains attractive to the people you want to retain.

The cost for recruiting, hiring, and training a replacement employee has been estimated to cost up to as much as three-quarters of that employee’s annual salary. That’s why businesses work hard to keep their employees happy; retention is cheaper than finding new hires. Hiring employees with the right work ethic means that you’ll be getting someone who is more loyal to your company than a contractor could ever be. If employees see that their company is willing to invest time and money into their education, wellbeing, and job satisfaction, they will be more inclined to stay with a company longer.

As harsh as it might seem, outsourced freelancers and contractors are mercenaries. They are loyal to their own businesses first, and that can work in your favor. As long as you keep your freelancers happy – namely, paying them on time and giving them enough work to do – they will continue to provide excellent service. As with employees, if you treat them poorly – if you don’t pay them on time, if you constantly change your working arrangement with them, or don’t give them enough work to do, they will eventually stop working with you and find easier clients to work with.

Still, it’s worthwhile to note that sometimes change can be good for a company. Google is one of the more notable companies that doesn’t focus on employee loyalty. They’re known for perks and incidental benefits, and not for employee longevity. According to an article at Next Level Performance, they suggest that a higher turnover might actually be to Google’s advantage. By bringing in new employees constantly, they may actually increase their capacity for innovation, something that is very important to the foremost technology innovator in the world.

Space

It’s nice to think that everything will magically grow along with your company. Reality, however, is somewhat different. You might find that one of the things you have to weigh when deciding whether to hire employees or bring in contractors is a simple, practical one; your physical space. If you’re starting out, or have a small boutique business, you might not have the physical space to have too many people working in-house. After all, just because your company is growing doesn’t mean the space you’re in currently can grow along with it. You might be in a spare room or an office building; it doesn’t matter. You have to be prepared to either make do with what you have – which might mean outsourcing to people who don’t have to work on site, or get a little creative with your space management. In companies with shift-based schedules, hot-swapping desks between two or more employees would be a reasonable solution. Or maybe just rearranging your layout would free up some space for a new person.

Time

Along with physical space considerations is often whether the time is right or not. Check your lease to see what provisions are made for leaving your space early. Maybe your landlord will be willing to swap if they have a larger space available. Perhaps upending your company and packing it into boxes isn’t practical at the moment because you’re on a deadline that must be made.

It’s not only a matter of when. Sometimes, it’s a question of how long something will take. When you hire an employee, there’s usually a period of time when they have to learn the ropes of the company before they can become a productive member of the team. If your company is working on a deadline, there might not be time to bring the new hire up to speed, and it might actually impact the company’s schedule. If your new employee is integral to a project’s success, it could impact the delivery schedule while they are getting acclimated.

They say practice makes perfect. With a full-time employee, once they’ve been properly trained, can repeat the same task in less and less time, until they are fully proficient, taking the least amount of time possible to complete the job. If you constantly have to outsource the same task to different contractors, it will always take the same amount of time, with no significant improvement. This concept works especially well in assembly-line manufacturing, where repetitive tasks are done quickly and efficiently.

It’s not unreasonable to assume that someone with more experience may be able to perform a more complex task in less time than it would take someone who hasn’t been working as long. It’s also not unreasonable to expect that someone with more experience will charge more to perform the same task. This is in fact very common among freelancers. Depending on your own business schedule and the importance of having your deliverables ready on time, it may be smarter to outsource the task to a more experienced – and expensive – freelancer so you can get what you need on time.

Money

Salaries are probably the single largest consideration when making the decision whether to hire or outsource.

Typically, freelancers charge well above the rate an in-house employee costs your business. The benefit, however, is that you only pay an outsource service for the work that they perform, which is less than what it would cost to bring on a full-time employee.

If your company doesn’t have the budget to hire a full-time employee, including benefits and training, you’ll need to consider outsourcing the work where there are no additional costs. Likewise, if your company can’t afford to pay the rates that freelancers are charging, you’ll need to hire someone for less and have them do the job you would normally have an outsource company do, working up to the level of proficiency that an experienced freelancer can provide.

There are some business models that work very well by relying on outsourcing the majority of their work. They can manage their labor costs without having the overhead of having to pay employee benefits.

Quality

Your customers expect a certain level of quality from your company, whether you provide products or services. Compromising on that quality should never be an option. You expect the people who work for you to be able to consistently provide the level of quality your business is known for, so that your brand remains consistent and your customer experience remains positive.

When deciding on whether to outsource or hire in-house, consider which will be able to provide the same high-level quality you’ve spent so much time cultivating and maintaining. Bringing in talent in-house will give you the opportunity to control the quality level on-site, as well as provide you with an opportunity to use their skills and talents to innovate and improve. Anything done by an employee of a company is considered the intellectual property of the company, including any patents or copyrighted work that comes from them. Companies often provide handsome bonuses to employees who contribute in this manner. Outsourcing gives your company access to resources that may have more experience and be able to provide the quality you want, but you won’t be able to have the same level of control over the process.

If you’re more confused now than you were before, don’t get frazzled. Use the guide above to weigh the pros and cons of hiring in-house or outsourcing the work you need to get done, and you’ll be one step closer to making a smarter, more efficient decision to propel your business forward.

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B2B Tips for Working with Big Companies

Landing a contract with a big company can feel like a huge victory for your company. Aside from the financial opportunity, working with a large company can provide excellent exposure and can help you land other clients in the future.

But larger companies do not operate like small businesses, and they often expect their service providers to have a big company mentality even when they’re still a small team. Consequently, you may have to adjust the way you work with big companies in order to keep them happy and keep you sane.

Let’s start by asking an obvious question: Why would bigger companies look to hire a small business services in the first place? Why not just do the job in house? Or hire a big company that can meet their own big needs? It could be a variety of reasons. Big businesses have to watch their bottom line and hiring an outside company doesn’t come with the overhead that a full-time employee has. Perhaps their in-house talent is swamped with work, and they need someone to pick up the slack so they can meet their internal deadlines. Maybe the service you’re providing to them is specialized enough that they didn’t really have a choice but to hire you for your expertise. Or it could be that the city they’re in is providing tax incentives to work with small businesses.

Whatever the reason may, there are a few things you should consider when starting to work for a big company so that your relationship can continue pleasantly and profitably for years to come.

Learn the Lingo

Every company has its own internal language it uses to describe procedures, reports, departments – pretty much anything goes. It’s a good idea to familiarize yourself with the way your client refers to things, so that you have clear communication with them. Nothing could be more embarrassing than a mistake based on a misunderstanding. You’ll wind up looking unprofessional, something you want to avoid at all costs.

When you begin as a new vendor for a big business customer, don’t pretend that you understand something that you don’t. Confirm what the various acronyms and abbreviations they’re using mean, write them down, and make flash cards if you have to in order to memorize their jargon. Remember, the faster you can talk the talk, the quicker you’ll be able to provide service.

Follow Procedure

Along with learning how to speak the corporate language, you’re going to have to learn how things work. From security to get into the building all the way through a project completion meeting, your big company client is going to have a particular way of doing things, and you’re going to have to adapt to it.

When you first start working with your first big business, go over the correct company procedure for any action that you’re required to perform. If the client always wants a follow-up email to phone conversations, that’s what you do. If the client has a specific format or code structure for invoices or bills of lading, make sure to follow the format. If anything comes up while you’re working with your big business clients, don’t assume anything; call your liaison and make sure you’re clear on the procedure you need to follow. And don’t forget, procedures can change without any warning, so it’s a good idea to “refresh your memory” to make sure you don’t get caught by surprise.

See if you can get a copy of the company policy manual so that you can review it to make sure you can comply with their internal employee requirements even though you’re not an actual employee. You might find yourself face-to-face with a stickler for the company rules and being able to acknowledge that you are 100% in compliance with company policy will definitely impress everyone.

Having to tell your company point of contact that something is going to be delayed because you failed to follow a company procedure properly won’t reflect well on you, so take the time to learn how to do things the company way.

One word of caution: don’t go overboard with gifts, especially if it’s commonplace in your industry. Gifts such as holiday gifts might seem innocent enough, but some companies, especially ones that have government regulation, might not be able to accept them as it might show favoritism or be seen as bribery. Make sure to double-check what is and isn’t acceptable before bringing anything to your client. They’ll be gracious enough to accept it, but it could create unforeseen problems in the future.

Dress to Impress

Your company may or may not have an official dress code, but many large businesses do. They expect their employees to look and act professionally while on company premises. While it may be okay in your office to wear cutoff jeans and a t-shirt, it would be better to dress to your client’s standards when visiting their offices, if for nothing else then as a show of respect to their corporate culture.

The same holds true when your clients come to visit you at your offices. Try to give your staff enough notice to dress to your customer’s standards when expecting a visit from them. It’s not going to kill anyone in your office to wear nice clothing every once in a while, and you might even find that the office feels a little more “professional” when everyone dresses up for work.

Who knows? Now might be the time to formulate your own dress code, now that you’re playing in the big leagues.

Embrace Your Size

Small business are known for being able to adapt quickly to rapidly changing markets and especially technology. Big businesses are slow to respond to change, since they can’t adapt as quickly, so they look to smaller businesses to be able to take advantage of changes that they themselves can’t handle short-term. If you’re doing work as a proof of concept (also known as being a guinea pig), be prepared to make a presentation to the higher-ups if you are successful.

Big companies know that they move at a much slower pace than smaller companies. Some of it is due to corporate culture, where people are hesitant to change the way things work. The approval process probably moves more slowly as well, with layers of management having to sign off on contracts, projects, or purchases. Small businesses, on the other hand, can make decisions more quickly, since the only person that has to make a decision might be you. Being able to decide instantly whether or not your business can fulfill the requests being made of it makes big businesses a little envious.

Speed, adaptability, and flexibility are all hallmarks of small business. You are a small business, and that’s an advantage, so make sure to use it.

Bill Early, Bill Often

In large companies, it’s highly unlikely that the people you’re working with are the same ones that are going to be writing the checks to pay you for your services. Unless you’re working for the finance department, that is. Navigating the system in order to get paid is one of the things you’re going to have to learn about your new customer.

Go over the procedures that you will need to follow in order to submit your invoices properly. Familiarize yourself with any forms, government and tax filing information, or anything else you need to do in order to make the billing procedure go smoothly. Get the contact information of anyone in the finance department who might be able to help you as well, since your point of contact might not know the answers to your questions, and you don’t want to pester them unnecessarily.

One good tip is to arrange with your contact to bill at the beginning of a project cycle, so that by the time you’re finished, you can get paid without having to wait for another billing cycle in order to be paid for the work you delivered more than a month ago. Many companies use what’s called a net/30 billing practice, which means they will pay the balance due at the end of 30 days.

Don’t wait too long between sending bills, either, since that will create problems in your cash flow. Once you are ready to send an invoice, send it quickly, so it can reach the people who need to process it as soon as possible.

Be Prepared

Let’s say you’ve talked to a representative from a big company, and things are going well. They mention a product quantity they need, and you respond with absolute certainty that you’ll be able to fill the order. Then, when the day the purchase order comes in, they’ve requested three times the amount that you discussed. Now what?

As a conscientious and well-prepared small business owner, you’ve already gone to your bank to talk to them about opening a business line of credit or small business loan. You’ve spoken to your manufacturer and told them to be ready to gear up for a bigger order than usual. You may have even spoken to your shipper, customs agent, delivery company, and anyone else that might need a heads-up that things are going to get hectic. Then when the order does come in, no one in your supply chain should be scrambling to find shipping containers, warehouses, extra trucks, extra shift workers, or any of the pieces to the puzzle that could impact your scheduled delivery date.

The same holds true for any type of company, whether you are a construction contractor or provide offsite file archiving. Study your business workflow. Check for choke points or bottlenecks. Prepare a contingency plan. If you gain the reputation as being reliable and able to handle unexpected situations with calm, measured professionalism, your customers – large and small – will stay with you for a long, long time.

Balance Your Business

Don’t rely too heavily on your big business client for your income. Even the best big business clients move on. They may have determined that it is more cost-efficient to hire employees to perform the services you provide. Or, a new corporate policy might have come into effect without you knowing. If your big business client accounts for too much of your accounts receivable, and then decide to stop retaining your services or purchase your products, your previous victory could become a crisis for your business.

Go over your books with your accountant. Try to determine what your business finances would look like if you didn’t have your big business client. Then work out your course of action to take if the worst should happen and you lose your major revenue source. You might even want to hunt down new smaller business opportunities, to reduce the overall percentage of your income that your larger client accounts for.

Keep Communication Lines Open

Check in with your point of contact at your big company client from time to time. Don’t be afraid to ask about new opportunities that might be available within the company where you can provide the professional level of service equal to their needs. Your call might remind them of something requiring your services or could be the prelude to a new project. There are plenty of things that go on at the company, and your quality of service may have been noticed by colleagues of your liaison. You’ll never know unless you ask.

Drop names

Don’t be afraid to advertise or mention that you are a vendor for a big business, unless you’ve signed a contract stating that you won’t. It will give your business a tremendous amount of credibility with other businesses. More importantly, it will show other big businesses that you can provide services to the high standards that larger companies require.

Landing a big company as a client or customer can be the stepping-stone your business needs to take it to the next level. You’ll be nervous at first, but if you’re confident you can deliver, then go for it! It could be the best thing that ever happened to your company.

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What Is SSL and Why Does Your Website Need It?

Securing your web site is the most critical element in protecting your website and its customers from hackers and other cybercriminals. Securing the connection between your site and your visitors is the best way to prevent anyone from spying on your traffic and stealing sensitive information such as usernames, passwords, and credit card numbers.

To protect websites, web engineers use what’s known as a Secure Sockets Layer, or SSL, to safeguard the information being transmitted through the connection.

Why Do We Need So Much Security?

When the World Wide Web was first conceived, it was created by academics who didn’t concern themselves too much with online security. This isn’t their fault; they simply didn’t see the need for it at the time. Nowadays, there is literally nothing more important than security for anyone who owns a website. To combat this, engineers from a wide spectrum of internet technologies have devised several methods of online security that work at different levels to minimize the exposure of servers to attack. Much of these rely on securing the transmission of information, or data, in a way that only the intended recipients can view. In order to provide the security that the modern web requires, various methods have been implemented that are centered around cryptography, which is the science of encoding, or rendering messages illegible without a key to decode, or revert the coded message back into legible content.

Since a considerable portion of the traffic is between browsers and web servers, a robust and powerful method had to be devised so that the traffic can be secured without impacting the speed at which data was sent between recipients.

Understanding Web Traffic, Simplified

Every time you click on a link or submit a form on the Web, you create what’s known as a request. This request is then sent from your computer to the Web site you’re accessing, divided up into little bits called packets. It’s divided as a method of preventing data loss, since smaller packets are more likely to arrive. Once the request packets are received by the server, they’re reassembled into the complete request, which is then fulfilled.

When the packets are traveling from your computer to the destination server, they can be read by anyone who is connected to the path between the end points while the packets are on route. If information is transmitted in plain text, also called clear text, it can be read by anyone who can see the packets.

How can people see the packets? Most commonly, an unapproved computer is connected to your wifi or wired network, and programs called packet sniffers can see all of the traffic on the network. This can take the form of a compromised computer, or a small, unobtrusive device that was smuggled into the office and hooked into the network surreptitiously. Alternately, bad actors can set up a malicious computer or router somewhere that traffic is sent through and read the packets as they’re traveling through. This is also known as a man-in-the-middle attack. Attacks using a man-in-the-middle attempt to capture the traffic and respond as the server you were expecting to reach by sending bogus responses disguised to look real.

By using SSL, your browser and the server agree to scramble the messages they send back and forth with a special type of key, known as a cryptographic key. A cryptographic key is a long string of random characters that, when used to scramble, or encrypt, a message, only a matching key can unscramble, or decrypt it.

SSL, An Overview

The inner workings of SSL are intricate and complex. That doesn’t mean you shouldn’t have at least a basic understanding of what it is and how it works. As an example of how SSL works, the following is a human-style interaction between a browser and a server:

Browser: Knock knock. Request for you. Please open the package slot.

Server: I can’t let you use the mail slot unless you have a key. The package slot only takes packages that have been packaged and locked with a key.

Browser: I don’t have a key to send messages through the package slot, can you send one to me? Also, how do I know you’re the right Server?

Server: I’m going to send you two things. The first is proof that you’re really sending the package to the right Server, and then I’m going to give you a one-time key so you can then make a new, shared key we can both use to lock and unlock packages. Passes one-time key through package slot.

Browser: Okay, I’m going to use your one-time key to lock our shared key in a package. When you unlock it, we’ll be able to use the shared key for packages. Sends shared key in a package locked with the Server key.

Server: Sounds good. I’ve unlocked the package, and now we can use the shared key to lock and unlock messages.

Browser: Okay, I’m putting the message into a box and locking it. Since the package slot is so small, I’m going to chop it up into packets and slip them through one at a time. Starts sending packets through the mail slot.

Server: Once I have all of the packets, I’ll put it back together and then unlock the whole package with my copy of the shared key. I’ll send the response to your package through the package slot, also locked with our shared key.

Cybercriminal: I can see the packets that the Browser is pushing through the package slot to the server, and I can even see what’s written in the packets, but I can’t read what they say, they’re all gibberish – I’ve been foiled again!

While the following might seem over-simplified, it’s an accurate depiction of how a browser and server negotiate a secure connection. And even though it seems long-winded, the back-and-forth takes place within fractions of a second.

The certificate that the Server sends to the Browser in the example is tied exclusively to the domain name of the server, which is independently verified by another company. For instance, you the reader couldn’t set up an SSL certificate that uses the domain name Amazon.com, because you would have no way to prove that your server is actually the Amazon server. This connection between the server and the domain name of a web site is one of methods SSL uses to ensure the security of your web site.

The Business of SSL

In the above example, the server (which is your server), uses a certificate and cryptographic key in order to encrypt and decrypt messages with the browser. You get these components from a company that verifies the existence of your company, for which you pay a fee, that, at the time of writing, was around $100.

The companies that have built up their businesses as distributors of SSL certificates have gone to great lengths to be considered reputable for providing them. The alternative had been to create your own certificate, but these “self-signed” certificates are considered less trustworthy, since the only person willing to verify that you are who you say you are, is you. The market for obtaining SSL certificates was limited to buying a commercial certificate from a trusted SSL vendor.

That is, until the Electronic Frontier Foundation stepped in.

The Electronic Frontier Foundation, or EFF, is an organization dedicated to promoting the freedom of information on the Internet. They promote the development and distribution of free, Open Source software, and assist companies who do not have the legal means to defend themselves against corporations who take advantage of smaller companies.

A few years ago, the EFF took on the responsibility of issuing valid SSL certificates to anyone who wanted one, without having to pay for it. The mechanism they use to issue SSL certificates relies on the company being able to reliably prove that they are in control of the domain name for which they want an SSL certificate. This has lowered the barrier of entry for every single domain to receive an SSL certificate that is issued for that domain name. As a result, more and more traffic on the web has become encrypted, making it harder for malicious actors to intercept and read data packets that weren’t intended for them.

Typically, the companies who issue the certificates must they themselves be recognizable and accepted as valid certificate authorities. Because of the high profile and recognition of the EFF as an honest broker, their authority to provide SSL certificates has been accepted as beyond reproach.

Security Beyond Browsers

The fact that SSL certificates are used largely for encrypting web traffic doesn’t mean that it’s limited to that use exclusively. As long as you have an SSL program to encrypt and decrypt, you can use it to protect files that you want to keep secure. Fortunately, there is a number of powerful and freely available programs that your business can use to protect its most important data assets, so even if your network is compromised, the data will be encrypted and useless to anyone who doesn’t have the password.

More and more companies are relying on cryptographic methods for securing their information. Modern cryptography programs are designed to encrypt whole directories or even entire disk drives with little effort on the part of the user. In this way, even if a computer is stolen from an office or lost in a taxi, the data that is present on the computer is safe from all but the most determined cyber thieves.

SSL Is Good for Business

Every day the news is full of reports of companies that have been compromised by malicious attacks on their networks. While many of the newsworthy ones are about large companies targeted by well-coordinated bad actors, many smaller, less notable websites are successfully penetrated.

The first place attackers are going to start looking when they have you in their crosshairs is your web site. The reason for this is because web attacks are some of the most vulnerable and common types of intrusions that attackers have available to them. Without properly securing your web site, you’re essentially giving them a means to attack it with impunity.

When new visitors come to your web site, the first thing they’ll notice is whether or not your site is secured using SSL. The convention for indicating whether or not a site is secured is by displaying a small padlock icon next to the address bar of the browser. In fact, in mid-2018, Google announced that its browser, Chrome, would by default assume that a web site is secure, and issue a warning when it wasn’t. This prompted many people to update their web sites to use the HTTPS, or secure web protocol that employs SSL encryption as a security measure.

No one is completely safe from attack online. In fact, if you ask your IT people, you’ll find that your site is more or less under constant attack, but the nature of the attacks are so rudimentary that it’s not even worth bringing to your attention. If you are a small business owner, you need to make digital security a priority for your business. Speak to your tech consultants and come up with a plan and a budget for making sure your online assets are secure from any serious attempts to compromise them.

Your customers rely on you to protect the information they give you. Often, that data is sent through your web site. Make sure your site is secured using SSL, so that the data they send you is secure from prying eyes. SSL gives them that security and peace of mind knowing that your company is treating their information properly.