The 10 Most Common Project Management Mistakes to Avoid

Project management is a messy business. As a small business owner, you likely find yourself putting out fire after fire without any time to strategize and accomplish the goals you initially set out. Unfortunately, that sporadic management process not only leads to personal stress-level elevations, it also roadblocks the overall success of your business.

Sometimes, though, project management mistakes aren’t apparent. To find the gaps in your business, you need to take a step back, analyze your processes, and remedy any faults that you find. The following are ten of the most common project management mistakes you may discover. We take a look at how they could surface and provide tips on fixing them (and preventing them) as well.

1. Unclear Goals

Setting unclear goals is one of the most detrimental project management mistakes you can make. Confusion among employees about objectives leads to miscommunication and an environment of continual head-butting. When employees misunderstand a project’s goal, they often perform unsuitable work that doesn’t follow the mission you have in place.

If your business is experiencing this issue, you’re not alone. A Geneca study of 600 business and IT professionals found that only about half of all respondents had a clear understanding of their business objectives. Even worse, 78 percent of those professionals stated that their project’s goals usually don’t align with the purpose of the company.

With unclear or misaligned goals, your projects are dead before they begin.

Solution: Instead of passing down objectives to your team, work with them to establish goals. Make sure the goals are transparent, understandable, and align with your overall business strategy. There should be no confusion as to the objectives you’re working to accomplish.

2. Poor Communication

It’s a tale as old as time. Poor (or even worse, no) communication has plagued every business at one point in time or another. Whether it’s missing communication tools, groupthink, a fear of speaking out, or siloed work environments – the causes of this issue are nearly endless.

Communication is a vital part of project success. So it shouldn’t surprise you that ineffective communication hurts a project’s success over 50 percent of the time. Don’t let your business become part of the statistic.

Solution: Foster an environment of open dialog, transparent communication, and constructive criticism. Employees need to feel comfortable speaking their mind and asking questions in a productive way.

If you don’t already utilize a project management tool, implement one. Several are available that provide helpful functionality such as task delegation, team chat threads, document sharing, goal setting, and scheduling, among several other features. They’re vital in getting everyone on the same page.

3. Unsatisfactory Onboarding

After interviewing for the job, an employee’s onboarding is the first experience (s)he has with your business. If this experience is less than stellar, it could significantly affect the success of the projects on which they work.

The longer it takes for a newly-hired employee to become a contributing team member, the more significant the risk of missing deadlines for the projects with which (s)he’s involved.

Solution: As part of the onboarding process, pair up new hires with veteran employees to help them get settled and answer any questions they have. A Human Capital Institute (HCI) survey discovered that 87 percent of companies who instituted a buddy/mentor program experienced a reduced time for new employees to reach proficiency.

Project Management

Orientation, team meetings, and one-on-ones with senior leadership also help reduce employee onboarding time. | Source: Human Capital Institute

The chart above provides some additional strategies. Check-in meetings, orientations, and job shadowing all give new employees the knowledge they need to contribute effectively.

4. Constant Re-Prioritization

As a project manager, the ability to adapt to the changing business landscape is vital. However, continuously shifting your team’s priorities to reflect those changes is likely having the opposite effect of what you’d like.

Project failures

A change in priorities/objectives represent the two most popular reasons that a project fails. | Source: Workamajig

When you pivot priorities partway through a project, employees are left wondering about the purpose of their work up to that point. Multiple re-prioritizations tend to discourage team members and chip away at their motivation.

Solution: Take additional time up-front to ensure that the objectives you set are genuinely the ones you should be striving towards. Taking an extra day or two to solidify your strategy today could save you weeks of unusable work later.

Once you kick off a project, see it through to the end. It may be difficult to ignore the attraction to a shiny, new objective. But it’s necessary if you want to keep your team satisfied.

5. Lack of Delegation

Delegating tasks, especially as a small business owner, can be difficult. But trying to do everything yourself has definite disadvantages.

Employees with minimal tasks and responsibilities feel less motivated in their work and leave jobs at a faster rate than their peers. Because current employees are, on average, more productive than new hires, projects (and your business) suffer in this scenario.

The most impactful drawback to poor delegation, though, is owner burnout. A Xero survey found that over three-fourths of all small business owners feel burnout at some point while they’re working. So, even if you don’t feel thinly stretched yet, the odds predict you will soon – unless you focus on delegation.

Solution: Trust your employees; you hired them for a reason. If you’re worried about the quality of tasks you aren’t completing yourself, you have a couple of options to help put your mind at ease.

A simple solution is starting employees out on a probationary period with new tasks. Another option is to have them shadow you for some time, say a week, and slowly transition responsibility to them over time. You could even combine both mechanisms.

Once you’ve passed the reins, however, remember that the task is no longer your responsibility. Give the employee the necessary space to work. Which brings us to our next project management mistake…

6. Micromanagement

Even if you solve your delegation issues, you may still run into another problem – micromanagement. The ability to effectively dole out tasks to employees is one skillset; not hovering over their shoulder while they perform them is something entirely else. Often, managers who have trouble delegating also find themselves struggling with micromanagement after the fact.

When you micromanage, you strip away the autonomy that employees need to complete their work effectively. The downsides are no different from those that a lack of delegation causes – decreased motivation and increased employee turnover.

Solution: Again, trust your employees. If you don’t have faith that they can handle the responsibility, you probably shouldn’t have hired them in the first place.

Rather than overtaking a project when an employee makes a mistake, use it as a learning opportunity for everyone. The more you view mistakes as a chance to teach employees something new, the better off your business will be.

7. Inaccurate Budgeting

You could have the most efficient team in the world. But, if you don’t produce accurate budgets, you’ll always end up in a losing scenario. On average, projects wind up going over their budget by 27 percent, and one in every six projects will overspend by at least 200 percent. For most teams, those overages are considered failures.

Simply put, going over budget creates undue stress on your team, yourself, and the business as a whole.


Project management mistakes plague almost every organization. | Source: Hive

But you shouldn’t only worry about the accuracy of your fund budgets. Underestimating the time you need to complete a project could do just as much harm. Setting impossible to reach deadlines causes teams to cut corners, rush quality checks, and create workarounds all for the sake of finishing before the deadline.

Solution: Creating accurate budgets is a skill that takes years to cultivate. Keep diligent records of your past budgets, whether you were under or over, and the reasons why. Over time, you’ll begin to see patterns and future budgets should become more accurate. It’s also wise to include a buffer when budgeting funds and timelines to account for any unexpected expenses.

If you have the cash, it may be worthwhile to hire someone who specializes in budgets to at least review your work as well.

8. Failure to Plan

This mistake may seem like an obvious one to avoid, but planning involves much more than setting up a project Gantt chart. Project management planning is a continuous process, involving the creation of objectives, deadline setting, budgeting, task delegation, prioritization, and people management, among several other activities. It’s effectively a culmination of much of this list.

Failing to think through any one of these activities could potentially disrupt your project, your business, or both.

Solution: As a business owner, you need to schedule time to work through your overall business strategy. It’s vital that part of this working session includes the activities we’ve outlined above. Once again, project management tools help immensely with this process.

But that’s not all. You should also create contingency plans in the event that an unexpected problem arises. They always do.

9. Unestablished Procedures

Onboarding, communication, delegation – unestablished business processes affect them all. Without comprehensive procedures in place, employees spend an unnecessary amount of time figuring out how to accomplish even the most menial of tasks.


Most organizations don’t implement standardized processes across departments. | Source: Workamajig

While tribal knowledge (e.g., non-written procedures) works fine for small teams, larger organizations need written documentation to which members can always look back and reference. Otherwise, employees get stuck in a game of telephone in which they must rely on solely their memories and the memory of their peers.

Solution: Thoroughly document all of your processes. Your team should know your procedures so well, it’s like they’re on autopilot when they work.

Besides improving the productivity of current employees, establishing and documenting procedures also assists the onboarding process. It gives new hires a constant resource that they can reference without having to interrupt the work of those around them.

10. Scope Creep

Scope creep – the project management mistake that every manager fears, yet few seem to avoid. Scope creep is an inadvertent process in which you slowly add tasks to a project as your team is working on it. While it may be necessary to sparingly add action items to adapt to changes in business requirements, many organizations overdo these additions.

Scope creep demoralizes teams because it effectively moves the goalposts for a successful project. Team members feel as if they’ll never accomplish the goals they set at the start. Like re-prioritization, scope creep prevents teams from getting into a productive project flow as well. Scope expansions inevitably cause shifting priorities, leading to a distracted team.

Solution: Whenever you plan to expand a project’s scope, take additional time to analyze whether the addition is necessary. If you can wait to include it on the next project you kick off, you should do just that. You’ll have a better motivated team that’s accomplishing more than it would have otherwise.

Improving Your Project Management Aptitude

Fixing these project management mistakes isn’t a one-day process. And some project management problems that don’t exist now will likely pop up sometime in the future.

Similar to building your overall business acumen, remedying project management mistakes is an ongoing process. As long as you continuously work to prevent (or remedy) the problems in this list, your business will continue to thrive.


Invoice Factoring | What Is It and How Does It Work?

What Is Invoice Factoring?

Invoice factoring is a transactional process in which a business sells its unpaid invoices to a factoring company at a discount. You may also hear people refer to it as accounts receivable factoring or even just factoring on its own. Some also refer to it as invoice financing; however, that is an entirely different process (more on that below).

Why Would a Business Sell Its Invoices?

Cash flow. Invoice factoring enables small businesses to free up working capital and improve their cash flow. Often, a business needs additional cash to cover unexpected expenses or to expand operations. Because invoices typically have a 30- to 90-day payment period, a company may have the money it needs, except that it won’t receive it for three months.

Invoice factoring provides an alternative to taking out a bank loan, or a worst-case scenario, overdrawing your bank account. Depending on your situation, factoring could cost significantly less than other financing alternatives.

In this guide, we break down:

  • How Does Invoice Factoring Work?

  • The Numerous Types of Invoice Factoring

  • The Positives and Negatives

  • How to Choose an Invoice Factoring Company

  • The Top Companies

  • Conclusion

How Does Invoice Factoring Work?

To provide a comprehensive explanation of invoice factoring, we need to start at the beginning of the invoice process. Before factoring is even in the picture, there are two parties of which you should be aware – the business (you) and the customer.

As a business, you provide a product or service to the customer for some amount of money, let’s say $1000 in this example. You send the customer an invoice which states that she has 90 days to pay you the balance.

Unfortunately, you have a machine break down 30 days after sending the invoice. It’s going to cost $900 to fix, but the business only has $200 of cash on hand. At this point, you have a few options. You can:

  1. Hold off on fixing the machine until you’ve received enough money from outstanding invoices. In doing so, you’ll likely miss out on sales opportunities due to one of your machines being out of commission. You may also fail to deliver on some of the sales you’ve already made.

  2. Overdraw from your business’s bank account. An overdraft could put you in bad standing with your bank and lead to substantial fines. It’s also possible that the bank blocks your overdraft attempt.

  3. Take out a short-term business loan. It’s possible that taking out a short-term business loan is your best option. Business loans are generally cheaper than invoice factoring (4% to 13% APR) but require a good personal credit score and a certain level of business revenue.

  4. Choose a form of alternative financing. Other types of funding, such as cash advances or credit lines, have distinct advantages. However, the average rates for these options are quite high, sometimes reaching well over 100 percent.

  5. Sell your invoice to a factoring company. As you can guess, we’re going to dig deeper into this one.

The Invoice Factoring Process

When you sell your invoice, a new player enters the mix – the factoring company that buys it. When the factoring company purchases your invoice, they generally pay you 70 to 90 percent of the invoice value up-front (the advance rate). Continuing our example, you sell the $1000 invoice to a factoring company for an 80 percent advance payment, giving you $800.

Combining the $800 with the $200 you have on hand provides you with enough cash to fix the machine (and $100 leftover).

Fast forward 60 more days to the end of the invoice term. Because it now holds the invoice, the factoring company receives the $1000 payment from the customer. The factoring company then pays you the remainder of the loan ($200) minus a factoring fee.

The factoring fee varies depending on your industry, how many invoices you factor, the size of those invoices, and the creditworthiness of your customers. And it usually comes as a weekly (or sometimes monthly) percentage rate. Therefore, your final fee largely depends on the payment period length of the invoice you sell.

The Numerous Types of Invoice Factoring

The example above showcases a simple factoring process. However, there are actually a few different ways the process can play out.

Spot or Whole Ledger

In the earlier example, we walked through the scenario of a spot factor. In spot factoring, you sell a single invoice to a factoring company. It’s a one-time transaction without any long-term commitments.

On the other hand, whole ledger factoring involves selling all of your invoices to a factoring company over an agreed-upon timeframe.

Factoring companies will almost always give you better terms and rates when choosing the whole ledger option. Be wary, though, as they normally charge a hefty fee if you decide to cancel your contract early.

Recourse or Non-Recourse

Another attribute to know when considering invoice factoring is whether the factor is recourse or non-recourse.

In recourse factoring, you, as the business, take on the risk of the invoice. If the customer fails to pay their invoice, you’re responsible for paying the balance to the factoring company.

Non-recourse factoring is the opposite, placing the risk on the factoring company. In the case of non-payments, the factoring company eats the costs.

Not surprisingly, out of the two, non-recourse factoring contains worse terms and higher fees as the factoring company is taking on greater risk. So, if you have clients that consistently pay on time, recourse is the way to go.

Is Invoice Factoring the Same as Invoice Financing?

Although some individuals use invoice factoring and invoice financing interchangeably, they’re technically different concepts. While factoring is the process of selling your invoices to another entity, financing involves utilizing your invoices as collateral to secure a loan. It’s a small but vital difference you need to understand before deciding on a financing option that’s right for your business.

The Positives and Negatives

As with any financing decision, invoice factoring has both its advantages and disadvantages. The type of your business, the amount of funding you need, and your payment timeframes all affect the feasibility of factoring your invoices.

The Positives

Invoice factoring is more immediate than other financing options. Although a factoring company may take a week or two to set-up and approve your account, you’re able to access funds within a few hours of selling an invoice.

Your customers gain payment flexibility. Because you’re now receiving payment shortly after sending an invoice, you can provide more flexible payment terms to your customers. You can offer, say, a 90-day turnaround, rather than a 30-day, without having to worry about your cash flow.

The Negatives

Not every business can factor invoices. Factoring companies limit their partnerships to large, business-to-business (B2B) companies. If you sell directly to consumers, it’s unlikely that you’ll find a factoring company with which you can transact your invoices. And if you’re B2B but lacking a few big-ticket customers, you’re going to have trouble as well.

Invoice factoring costs more than other financing options. This financing option tends to lean towards the expensive side when looking at the overall fees. It’s more pricey than a traditional business loan but significantly less costly than opening a line of credit or taking a cash advance, most of the time.

The Neutral

You customers’ finances are more important than your business’s. Depending on your business and your customers, you may view this fact as either a negative or a positive. Most factoring companies analyze the creditworthiness of your customers’ to determine whether they bring you on as a partner. Although some lump in your business’s revenue into the equation as well.

How to Choose an Invoice Factoring Company

Deciding on invoice factoring as a form of financing is a significant business decision on its own. However, choosing the right factoring company to work with is just as important. When evaluating companies, the following topics are worth researching.

Before you begin your search, figure out which types of invoice factoring would be best for your business. Do your customers typically pay their invoices on time? If so, recourse factoring is your best bet as you’ll receive better factoring terms. If you’re planning on factoring most of your invoices, you should look for companies that offer whole ledger factoring for a discount.

After determining the factoring types that suit you best, search for companies offering those services. Most factoring companies provide similar services, but their terms can vary drastically.

Here’s What to Watch out For:

In your company comparisons, the essential attributes to consider are the factoring terms. As we outlined above, you ideally want the factoring company with the highest up-front payment and lowest factoring fee. Don’t forget to include any whole ledger discounts.

The terms aren’t the only factor you should consider, though. Some invoice factoring companies charge additional (and sometimes hidden) fees. When you reach out to potential partners, ask them if they require a minimum number of invoices each month. Some factoring companies do and charge a fee when you don’t reach the minimum.

Additionally, see if there are any monthly maintenance fees or due diligence fees for checking the background of your customers. If you plan to sign a long-term contract, inquire about the cancellation fee for ending the contract early.

You may find that, after considering all of the additional fees, the company that seemingly provides the best terms isn’t your most desirable option after all.

The Top Companies

A simple Google search for invoice factoring companies will reveal no shortage of options at your disposal. The following are three of the top companies you may want to consider:


Fundbox is one of the most highly rated invoice factoring companies with a 9.6 out of 10 rating on Trustpilot. The company offers factoring with a 1.0% to 3.3% fee for invoices ranging between 15 and 90 days. Additionally, the application process is relatively straightforward, taking only a few minutes. When you apply, Fundbox assesses your customers but doesn’t implement any credit checks or require paperwork.


Lendio’s invoice factoring option (which they call accounts receivable financing) provides loans for up to 80 percent of the value of your invoices. You can receive loan terms of up to a year and get your money in as little as 72 hours.

Surface-level, Lendio is significantly pricier than Fundbox, charging a minimum of 5% as the factoring rate.


BlueVine is another notable option in the invoice factoring space. The company provides factoring for up to $5 million and charges fees as low as 0.25% per week. The BlueVine application process is speedier than many other competitors – just a 24-hour turnaround time. The BlueVine advance rate sits between 85% to 90% of your invoice.


If you’re company specializes in B2B sales and your client list contains some heavy hitters, invoice factoring could be a great way to improve your cash flow position.

Before jumping in, though, it’s imperative you weigh your financing options and ensure invoice factoring is best for you. While its benefits are clear (quick turnaround, no debt, flexibility), it’s one of the more costly financing options. As with any business decision, analyze the numerous options available and make a decision only once you’ve sufficiently researched the benefits and costs of each one.


5 of the Most Common Ways a CEO Can Ruin a Business

While we often hear about dynamic CEOs, like Mark Zuckerberg and Elon Musk, catapulting their businesses to success, it’s much more common for a CEO to cause failure. Half of all small businesses fail within five years of launching. And since the CEO is the person steering the ship, (s)he is directly to blame.

Fortunately, we can attribute the majority of business failures to a small set of CEO mistakes. The following are five common ways a CEO can ruin a business. Take notes and make sure to avoid them to keep your business on the track to success.

1. Putting Team Development on the Back Burner

Your team is one of the most influential determinants of the success of your business. Ensuring that you devote ample time to developing current employees as well as bringing on suitable hires is a must. You can’t expect that these things will happen on their own.

Make sure your recruiting department understands the type of employee that is best for the company and doesn’t settle for anyone who fails to meet those criteria. A less-than-ideal hire can quickly roadblock previously productive teams. So while the business may feel some pain when holding out on hiring a critical position, doing so is better than rushing to hire someone who isn’t a perfect fit.

With the hiring process costing over $4,000 per hire on average, you want to spend your time and resources on bringing in only the best recruits.

Your job doesn’t stop at the hiring process, though. Your team development efforts should be present in every aspect of employment from your business’s recruiting efforts to the day an employee leaves.

A 2016 Gallup study revealed that 87 percent of millennials (and 69 percent of non-millennials) view “professional or career growth and development opportunities” as an essential aspect of their job. So employee development is not something you can afford to ignore.

How to Build the Best Teams

Building spectacular teams is a never-ending process. It starts with a potentially slow but deliberate hiring strategy. After hiring the best people, you also need to provide them with comprehensive onboarding. Doing so enables new employees to become valuable contributors quickly while also improving the likelihood that they’ll stay with the company. Nearly 70 percent of employees are more likely to stay with their company for at least three years if they experienced stellar onboarding.

To foster employee growth after onboarding: match up novice employees with more experienced mentors, provide ample learning opportunities, and guide employees along their desired career paths. All these activities will not only improve the productivity of your employees, but they’ll also continue to keep your turnover low.

Additionally, set aside time each quarter for team building activities. Improving your individual employees’ skills is worthless if they don’t work together well as a team.

2. Delaying the Removal of Bad Apples

There’s no way to sugarcoat it; you need to fire toxic employees as soon as you discover them. Slackers, know-it-alls, gossipers, lone wolves, bullies – keeping any of these types of toxic employees will eventually harm your business in a major way. Almost half of all employees that interact with someone toxic spend less time at work as well as decrease their effort while they’re there.

Those decreases in work attendance and effort add up. A Harvard Business School study found that firing, or avoiding hiring, a toxic person can save your business around $12,500. So refusing to fire those with a problematic streak does nothing but cause money to bleed from your company.

Destructive employees also lead to increased rates of employee turnover. According to a study by Cornerstone OnDemand, “good employees are 54% more likely to quit when they work with a toxic employee.”

How to Avoid Bad Apples

The most straightforward strategy to keep toxic employees out of your company is never to hire them in the first place. As we mentioned earlier, it’s critical that you don’t rush the hiring process. While a recruit’s skills and experience are important aspects to consider, you also want to prioritize how their personality fits in with your company culture.

Even with an immaculate hiring process, however, it’s possible that some bad apples still slip through the cracks. When they do, though, you need to terminate them as soon as you discover their toxicity.

When you decide to terminate an employee, there are a few precautions you should take to reduce the risk of residual damage. Most importantly, document any inappropriate incidents regarding the employee as soon as they happen. You should have a company-wide standard of procedure for this process that’s available to all employees. Doing so ensures that you have the proper documentation to warrant firing the employee and (s)he can’t turn around and sue you for wrongful termination.

3. Refusing to Adapt (Or Doing It Poorly)

We’ve seen it time and again. Whether it’s Sears failing to update stores, Blockbuster ignoring the streaming era, or Polaroid avoiding the move to digital, CEOs that refuse to adapt will inevitably run their businesses into the ground.

Attempting to stick with “tried-and-true” business strategies are likely to cause you to lose ground to young and disruptive newcomers.

But adapting to external changes shouldn’t be your only priority; you need to evolve with the internal changes to your business as well. As your company grows from a small, scrappy startup to a worldwide enterprise, your management style cannot stay the same.

Without a proper change management strategy in place, you could be setting yourself up for failure. Companies with well-thought-out change management practices are 3.5 times as likely to outperform similar companies without them.

How to Adapt Quickly and Effectively

Keeping a pulse on the industry should be a company-wide effort from the CEO down to the lowest rung on the ladder. Your salespeople, marketing team, engineers, recruiters, etc. all bring a unique perspective on what changes are happening in the business landscape. If you create an environment of open communication, you’ll become better informed of the changes that you may not have known about otherwise.

Depending on the size of your company, you may find it worthwhile to establish a strategy team with a dedicated mission to discover potential industry shifts and create adaptation strategies.

Unfortunately, there’s a fine line between adapting effectively and unnecessarily changing course every time the wind blows. It’s tempting to chase every new product, market, etc. that comes across your table; however, doing so almost always spreads your business too thin and leads to detrimental results. Make sure the opportunities that you choose to pursue align with your company’s mission. Which brings us to our next common CEO mistake…

4. Not Setting (or Following) a Clear Company Mission

A CEO’s indecision can bring down any company, no matter the size.

Whether you’re just forming your company or are running a long-standing business, you need to set, and follow, a clear company mission. CEOs that refuse to do so become indecisive, scattered, and overall ineffective – attributes that can quickly ruin a business.

Without a steadfast mission, you and your employees will continuously run into problems during the decision-making process. It’s incredibly challenging to choose between different business opportunities without a set of guiding principles from which you can form an opinion. A mission gives your business those guiding principles.

A strong company mission also motivates employees and gives them a solid reason to stay onboard. Over three-fourths of employees who “strongly agree that they know what their company stands for and what makes it different from competitors” plan to stick with their company for at least a year.

If your company doesn’t have a clear path to success, don’t be surprised if your best employees leave for another company that does

How to Set and Follow a Company Mission

Your company mission should be an overarching guideline you and your employees refer to when making business decisions. Some notable ones you can use for inspiration include:

Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. (Patagonia)

To put people at the center of enterprise software. (Workday)

To offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses. (Warby Parker)

You can bet that everyone involved with those companies has those missions on the back of their minds as they go about their workday.

Once you have your mission in place, publicize it to the entire company. There shouldn’t be a single employee who doesn’t have it memorized.

As a CEO, you also need to create concrete strategies, goals, and tactics that align with your mission. A well-intentioned mission is useless if you’re not actively implementing plans to accomplish it.

5. Building a Culture of Non-Transparent Communication

Poor communication is a $37 billion problem that plagues every business at one point in time or another. Your goal as a CEO is to reduce the instances of it and the magnitude of damage it causes when it rears its ugly head.

More often than not, malicious intent isn’t the cause of non-transparent communication. Typically, it comes in the form of groupthink, in which individual team members are hesitant to speak out against group ideas or decisions. They would rather reach a group consensus than fight for a plan in which they believe. Facilitating this type of behavior hinders innovation and prevents your business from successfully evolving.

You’re not doing yourself, or your business, any favors by surrounding yourself with a bunch of “yes” men (and women).

Non-transparent communication also leads to confusion regarding roles and responsibilities. Without a transparent delegation process, it’s likely that two employees end up working on the same task while others go unattended.

How to Foster Transparent Communication

As CEO, the most effective strategy to foster transparent communication is to lead by example. Send out regularly scheduled memos to employees that outline the health of the business as well as the overall strategies the company is pursuing. And always provide the reasoning, or the why, behind your decisions.

The benefits of transparent CEO communication aren’t just subjective. The Holmes Report found that companies with “highly effective communicators” as leaders brought 47 percent higher returns to shareholders over the previous five years than businesses with the least effective communicators at the helm.

Additionally, you should encourage employees to challenge ideas, ask questions, and give constructive criticism when necessary. You want them to be comfortable having those difficult conversations to avoid groupthink.

Work with your team to implement communication tools that fit in well with your operations as well. Many of those tools enable you to publicly show the company mission, task delegations, strategies, milestones, etc.

Other Ways a CEO Can Ruin a Business

As you can imagine, there are plenty of additional ways a CEO can ruin a business that we haven’t covered in the list above. Focusing on non-profitable markets, not understanding the needs of the customer, refusing advice – any of these activities can lead a business to ruin.

However, if you apply the lessons from this article to the additional aspects of your business, you should have no problem protecting yourself. And if you avoid the five common CEO mistakes from above, you’ll be in great shape.


Best Unsecured Business Loans: 9 Options to Secure Your Loan

Whether your cash flow is running thin, you have an unexpected expense, or you’re looking to expand, securing a business loan online is probably one of your top priorities today. Finding a business loan online may seem like a daunting task. However, the process is more straightforward than you may think.

Many businesses don’t have the collateral required to qualify for a loan at their local bank. Fortunately, there are lenders that do not require collateral in order to secure a loan. These loans are often referred to as unsecured loans.

Unsecured loans are suited to small business owners seeking quick and easy access to small business funding. When faced with a need to cover unexpected expenses, an unsecured loan may be just what you need to help your small business grow. There are many forms of unsecured loans, including business lines of credit, SBA loans and peer to peer loans.

Before beginning the process, though, you should ask yourself whether securing a loan is a necessity for your business right now. Business loans often come with significant hidden and administrative fees in addition to the typical annuities. If you can figure out a way to continue doing business without taking a loan, it may be better to hold off.

Once you’re confident that a loan is in the best interest of your business, you need to research your options. Loan terms, funding process times, fees, and other impactful properties greatly vary from company to company.

Fortunately, we’re here to help. We’ve compiled a list of the top nine options to secure a $10,000 business loan online, providing you with details on each to help you make an informed decision. Use this list as a jumping-off point to see which online business loan offering is right for you.


BlueVine provides business term loans up to $250,000, so a $10,000 loan is well within the company’s limitations. To apply, you need a FICO score higher than 600, over $100,000 in revenue, and to have been in business for at least six months.

[element-for-review-cta id=1424 text=”$5,000 – $5M fast funding for your business. Apply online and get approved in as fast as 20 minutes”]


Loan rates at BlueVine start at 4.8 percent and terms follow a six- or 12-month payment schedule.

If you’re looking for a less traditional type of loan, BlueVine also offers lines of credit as well as invoice factoring. The credit lines maintain the same maximum loan amount ($250,000) and starting rate (4.8 percent) as the term loans, whereas invoice factoring lines can reach up to $5 million with a starting rate of 0.25 percent per week.

BlueVine does not offer unsecured loans. However, BlueVine does not require any specific amount, type or value of collateral and no appraisal or specific assets are required. Financing is secured by a general lien on the assets of the business and backed by a personal guarantee. BlueVine does not take personal assets as collateral.


Getting a term loan on BlueVine is quick and (relatively) pain-free. You can apply online with limited personal and business information as well as a connection to your company’s bank account. Within five minutes, you’ll have a decision on your application.

If your application is approved, the funds typically reach your account the same day, likely within a few hours of approval.

BlueVine maintains transparent pricing with a single flat fee on term loans, invoice factoring, and credit lines.


Similar to BlueVine, Kabbage offers business loans up to $250,000 online. And depending on your type of business, you may find Kabbage’s loan requirements slightly more obtainable.

[element-for-review-cta id=1393 text=”Small business funding options that fit your business. Qualify in 10 minutes for up to $250,000 line of credit”]


To qualify for a Kabbage small business loan, your business needs to be at least one year old and have over $50,000 in annual revenue. If your business only recently started taking off, Kabbage allows you to replace the $50,000 requirement with a minimum of $4,200 in revenue over the last three months.

Kabbage loan terms are either six, 12, or 18 months. Instead of receiving the entire loan amount upfront, you’re able to collect it as you need it. Each month, you pay back an equal portion of your loan principal plus a monthly fee that ranges between 1.5 to 10 percent.

Kabbage offers unsecured, or uncollateralized, loans to small business owners looking for quick access to funds. This form of small business financing does not require any collateral prior to receiving funds and is therefore ideal when faced with new business opportunities that you are eager to pursue.


Kabbage focuses on making the loan application and repayment process as straightforward as possible. The company has published Android and iOS apps from which you can apply for a loan, manage your account, and use your funds directly.

Its website also contains a business loan calculator to help you determine what your fees and total loan costs would be without having to go through the application process.


Unfortunately, loans through SmartBiz range from $30,000 to $5 million, so you won’t be able to obtain a $10,000 loan from this platform. However, we’ve still chosen to include it on this list because it’s one of the largest online business loan facilitators with over $1 billion in loans.

[element-for-review-cta id=1471 text=”SmartBiz helps businesses secure SBA loans and working capital loans”]


Loans on SmartBiz are targeted towards more established companies as they require over two years in business. Additionally, it requires tax returns and financial data that proves you have enough business and personal cash flows to make the loan payments.

SmartBiz specializes in Small Business Administration (SBA) loans, a long-term, low-interest rate, government-guaranteed loan option. There are two types of SBA loans available through SmartBiz.

The first, meant for debt refinancing and working capital caps the loan amount at $350,000 and charges an interest rate of 8.00 to 9.00 percent. SmartBiz grants the second type of SBA loan for commercial real estate purchases and refinancing. These loans cap out at $5 million and come with 6.75 to 8.00 percent interest rates. All SmartBiz SBA loans occur over a 10 to 25 year term period.


SmartBiz is one of the few online business loan platforms that supplies SBA loans. Even if you disregard the commercial real estate loans, the company provides loan amounts that are significantly higher than many of its competitors.

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You have two loan options at your disposal using OnDeck – fixed term and line of credit. For either type, OnDeck requires that you have been in business for over one year, have a 600 FICO credit score, and have annual revenue greater than $100,000.

[element-for-review-cta id=1431 text=”A+ rating with BBB, 9.8/10 customer ratings at TrustPilot. Relaxed eligibility requirements and transparent Information for fast financing solutions”]


The fixed term loan amounts start at $5,000 with a maximum of $500,000. The annual interest rate (AIR) begins at 9.99%, and you may have some additional fees thrown in as well. OnDeck offers flexible loan term lengths depending on your business needs.

OnDeck lines of credit range from $6,000 to $100,000 with annual percentage rates (APRs) starting at 13.99 percent. The company also charges a monthly maintenance fee to businesses that take out a line of credit. However, it waives this fee if you withdrawal $5,000 within the first five days of opening your account.

OnDeck does not require specific collateral and makes loan approvals to small businesses based on business fundamentals like cash flow, credit history, and other metrics that demonstrate a healthy business. When a small business takes a term loan from OnDeck, a general lien is placed on the business’s assets until the loan has been paid off. In this way, business owners can get funding in as fast as one business day without needing a specific amount of real estate, inventory or other hard assets


Like BlueVine and Kabbage, OnDeck’s advantage is in its turnaround time, often providing funds within one business day of successfully applying. When you apply, you also gain access to OnDeck’s SMART Box loan comparison tool, which outlines the terms of your loan agreement in an easy-to-understand way.


With well-known branding and over $28 billion in loans, LendingClub is one of the most popular options for online business loans.

[element-for-review-cta id=1430 text=”Business Loans up to $300K, funds in as little as a few days”]


Like many competitors, LendingClub requires that you’ve been in business for at least a year and have over $50,000 in annual sales to take out a loan. Additionally, you need to own at least 20 percent of the business and have at least a fair (>600) personal credit score.

LendingClub business loans start as low as $5,000 and can reach up to half a million. The repayment terms last anywhere from six months to five years with a total annualized rate of 9.77 to 34.98 percent. LendingClub doesn’t charge any fees for paying off your loan early.


Ninety-five percent of LendingClub clients state that they would recommend the platform to friends and family. And although the application and funding process through LendingClub isn’t as quick as some of its competitors, it’s still relatively speedy. You can apply in under five minutes and receive your funds within a few days.

Seek Capital

Seek Capital, an arm of Seek Business Capital, provides a host of loan options for businesses of all types. The company’s offerings include term loans, lines of credit, invoice financing, startup loans, equipment financing, short term loans, merchant cash advances, SBA loans, and personal loans for business.

[element-for-review-cta id=1492 text=”We love Seek Capital because of their diverse loan types and willingness to help new businesses get funding”]


For the sake of brevity, we’ll only cover the term loan details here. As a business, you can receive a term loan of $5,000, $500,000, or anything in between. The length of the loan term varies but tends to stick between one and seven years. Seek Capital effectively matches you with a lender, so your interest rate, origination fee, and any other fees will differ as well.


Over 92 percent of qualified businesses who apply through Seek Capital are approved for a loan. So, if you have trouble getting a loan through a few of the other companies, Seek Capital may be right for you.

Once again, Seek Capital maintains a relatively quick turnaround time. You’ll generally hear back about your application within a few hours.


Credibly offers working capital loans (short-term), business expansion loans (long-term), and merchant cash advances. To receive a working capital loan or merchant cash advance, you need a FICO credit score of at least 500, six months in business, and $15,000 of average bank deposits. The business expansion loans require more stringent attributes of over three years in business, a 600 FICO score, and a $3,000 daily average balance in your bank account.

[element-for-review-cta id=1474 text=”Customized financing solutions to meet your short-term needs. 24 hour approval for up to $250,000 in small business funding”]


Working capital loans and merchant cash advances have a maximum loan amount of $400,000 and factor rates starting at 1.15. The factor rate is a unique Credibly calculation that equates to the payback amount divided by the funding amount. Business expansion loans come in 18- or 24-month options with interests rates beginning at 9.99 percent.

Credibly charges a one-time fee of 2.5 percent on all loan types.


Credibly’s three distinct online business loans provide specialized advantages, no matter the state of your business. As you could probably guess by now, Credibly decides on your application status within 24 hours. And you’ll likely have funds in your account within one business day upon approval.


Fundation provides term loans for up to $500,000 and lines of credit for up to $150,000. The platform charges an interest rate that varies depending on a few business criteria, such as:

  • The number of years in business,
  • Credit history,
  • Amount and type of debt,
  • Profitability,
  • And growth, among a few other data points.

Fundation doesn’t charge any prepayment penalties if you decide to pay off your loan early.

[element-for-review-cta id=1485 text=”Credit solutions to small and medium sized businesses. Loans up to $500K, extremely competitive terms and fees”]



The Fundation customer service team has won several awards from Business News Daily, so you can expect quality service during every step of the loan process.

Funding Circle

Rounding out our list is Funding Circle. Like SmartBiz, Funding Circle requires a minimum loan amount greater than $10,000 but has a stellar enough reputation that we felt it belonged. Small business loan amounts range from $25,000 to $500,000 and have rates starting at 4.99 percent per year. The payback period is flexible at six months on the low end up to a maximum of five years.

[element-for-review-cta id=1488 text=”Fast and affordable finance to help your business. Quick application, dedicated account manager and fast decision”]


Although Funding Circle doesn’t post business requirements publicly on its site, it states you need to provide:

  • personal tax returns,
  • business tax returns,
  • bank statements,
  • business debt information,
  • and a signed guarantor form for any person with at least 20 percent ownership of the business.

As with most competitors, Funding Circle doesn’t charge a prepayment penalty.


Funding Circle has a Great 4-Star rating from TrustPilot with over 5500 reviews. Additionally, the company’s website is straightforward, transparent, and provides helpful tools like a loan calculator to see how much potential loans would cost each month.

Regarding turnaround time, Funding Circle is somewhere in the middle in comparison to competitors. The application process takes a few minutes, and you’ll get a decision in as little as one day. However, funds take at least five days to reach your account.

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Online Business Loans – Final Thoughts

Fortunately, most of these online business loan platforms provide free quotes with a soft credit pull. Therefore, you’re able to shop around and see which terms are best for your business without having to damage your credit score. The more you talk with potential loaners, the better leverage you have when given the opportunity to negotiate.

Now that you have ample knowledge about all the best options, get out there and start talking to them today.

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Tips and Tricks Creating a Website Terms and Conditions Page

It’s not the most exciting aspect of starting a business, but publishing a terms and conditions (T&C) page is something that all business owners should do. Whether you’re an enterprise-level SaaS company or a local barbershop, having terms and conditions on your website limits the liability of your business. They set boundaries for your users, establish legal jurisdiction, and can protect you if a customer ever takes you to court.

Before digging into the required steps surrounding terms and conditions, though, let’s start with the basics.

What Are Terms and Conditions?

Terms and conditions define how a person is allowed to use your website, and they act as a disclaimer to reduce liability for your business. You probably know it better as that long page a legal wording that you (almost) never read. It’s also referred to as terms of service or terms of use.

This document varies dramatically from company to company, but there are a few overarching topics that it typically covers.

User Limitations

For apps, SaaS products, and any other websites involving registration and substantial user interaction, setting user limitations in your terms and conditions is a must. The constraints you define may be the longest portion of your page. This section outlines the rules for users on your website and describes what they’re not allowed to do.

Setting and enforcing user limitations helps protect you from users that may use your website to break the law or act in a way that you deem unacceptable. Because you’ve set these rules in writing, you have grounds to remove users that break them, according to your termination clause.


The termination clause explicitly states that you will ban a user from your website or product if they break any of the rules set in the terms and conditions. Although this section may not apply to simple landing pages, it’s necessary for SaaS products and user apps with a registration process.


The copyright section of your terms and conditions informs users that your logo, brand, and any other creative material on your website is the property of the business. Therefore, users aren’t allowed to copy or steal it as it’s all protected by copyright law.

Privacy Policy

If you gather any information from your users, you need to include a privacy policy in your terms and conditions. Simply put, a privacy policy lets your users know:

  • what data you’re collecting,
  • how you’re using it,
  • and whether you’re sending it to other entities.

With recently-passed laws like the General Data Protection Regulation (GDPR), it’s imperative that you provide a comprehensive and accurate privacy policy. Failing to remain compliant could cost you hundreds of thousands of dollars in fines.

Governing Law

The governing law section of your terms and conditions defines the country (or state/province) from which your website operates. It tells users which region has jurisdiction over the laws regarding the agreement.

Liability Limitations

The limitation of liabilities shields you and your business in the case of a lawsuit. This clause effectively states that your business isn’t responsible for errors on your website or through any associated third-parties.

Does Your Website Need a Terms and Conditions Page?

Legally, probably not. If you’re not collecting any information or data from your site visitors, you probably don’t have a legal obligation to provide terms and conditions. Even without the legal requirement, though, you should strongly consider including a T&C page on your website.

We’ve stated it above, but it’s worth emphasizing. If you collect any user data, you need to publish a terms and conditions document that includes a comprehensive privacy policy. Choosing to skip this basic yet vital activity could ruin your business before it gets off the ground.

Here’s Why You Should Have a Terms and Conditions Page

The benefits of having website terms and conditions far outweigh the time and monetary expenses of creating them. And, providing them has become a standard in almost all industries. Let’s take a look at some of the advantages.

Abuse Protection

First and foremost, terms and conditions allow you to document rules for your users, which you can then enforce to prevent them from abusing your products or services. From a legal standpoint, the user limitations you define protect your business from malicious actors wreaking havoc on your site. Without them, a user could claim ignorance as they continue to perform abuses.

For this reason, your terms and conditions must include an explicit termination clause. There should be no doubt in a user’s mind that you will terminate their account if they fail to follow the limitations you’ve outlined. Without this clause, a user may have legal precedent in court to claim that you falsely terminated his or her account.

Legal Protection

Getting sued is one of the most detrimental events that a business can go through. Even a court case in your favor could cost you hundreds of thousands of dollars in legal fees.

A terms and conditions page carries protections for the intellectual property of your business. Even though your creative content is likely already shielded by copyright law, explicitly claiming ownership in this document grants you another layer of legal safeguarding.

But copyright aspects aren’t the only legal benefit. By limiting your liability in the terms and conditions, you fight against frivolous lawsuits from the get-go. It’s unlikely that a lawyer will take on a case that blatantly disregards clearly defined liability limitations.


Regarding compliance and regulatory measures, it’s best to take a better safe than sorry approach. Whether or not you collect user data, including a terms and conditions page on your website ensures that you’re in the clear. Doing so also keeps you a step ahead in case regulators decide to implement stricter rules around website usage in the future.

Five Tips for Creating a Website Terms and Conditions

Although the actual content of a terms and conditions document can be complicated, creating it shouldn’t be. Follow these five tips to ensure you have a smooth experience adding one to your website.

1. Don’t copy from another website.

It may be tempting, but copying a terms and conditions page from another website may land you in legal trouble. Although unlikely, the business you plagiarize from could sue you, citing infringement on unique content (i.e., the T&C).

More importantly, however, copying another business’s terms and conditions defeats the point of creating the document in the first place. The language for this document differs significantly across industries. Using a dentist office’s terms and conditions on your SaaS website is about as useful as publishing a blank page.

Copying terms and conditions from a similar business to your own isn’t beneficial, either. It likely doesn’t cover liabilities specific to your company, outlines an entirely different business model, and includes a host of irrelevant information. You need to craft terms and conditions specific to your business to minimize your liability risk.

2. Start with a free T&C generator.

Most businesses, especially ones still starting up, don’t need an in-depth, 100+ page terms and conditions document. Instead, begin with a template or utilize a terms and conditions generator. Most generators are free, or at least relatively cheap, to use.

Terms and conditions generators typically collect information about your company, such as:

  • The type of business,
  • Whether your users create accounts,
  • What products you sell,
  • Any content your users create,
  • And several other pertinent details.

After you provide your company’s information to the generator, it creates relevant terms and conditions based on the specifics of your business. The entire process typically takes less than half an hour.

After generating the document, read through it carefully, checking that each section applies. Remember that these generators are effectively templates, so it’s impossible for them to cover every detail. Therefore, you may also need to add some additional information. In doing so, you should consult a lawyer.

3. Hire an attorney (if necessary).

Sometimes a terms and conditions generator doesn’t cut it. Once your business grows to a certain size, or if you’re collecting ample user information, it’s probably time to hire an attorney.

Unfortunately, lawyer costs vary drastically depending on the lawyer and the complexity of your business. On the low end, a simple document could run you a few hundred dollars. For more comprehensive terms and conditions, though, you’ll likely pay more than a few thousand.

If you have the budget, hire an attorney. Just as copying another company’s terms and conditions won’t cover the intricacies of your business, a generator is bound to miss some specifics as well.

4. Browsewrap or clickwrap your terms and conditions.

To ensure your terms and conditions are enforceable, you need to make users aware of their existence. You have a couple of ways to do so – a browsewrap or clickwrap agreement.

A browsewrap is the less obtrusive of the two agreement options. It exists as a small link, typically at the bottom of your website, that navigates users to the terms and conditions page.

On the other hand, a clickwrap agreement requires some action from the user to state that he or she agrees with the terms and conditions. Most commonly, websites accomplish this action through an “I agree” checkbox. Another option is to place a statement like, “By clicking ‘Sign Up,’ I have read and agree to the website’s terms and conditions.”

Because there is no legal need for a terms and conditions document, there are no requirements on how to present it to users. However, an agreement that you display through a clickwrap will have a much higher likelihood of holding up in court due to the requirement of user action.

5. Notify users of terms and conditions updates.

You’ll inevitably update your website terms and conditions several times throughout your company’s lifecycle. When you do, you need to notify your users, so they have the opportunity to opt-out if they don’t agree with the changes.

Treat a terms and conditions update the same as you would the initial publication. When you update the document, notify your users via email, outline updates through a clickwrap/browsewrap agreement, or perform some combination of both.

Terms and Conditions – Create One Today

If you don’t already have terms and conditions on your website, there’s no better time than now to add them. At a minimum, begin with something simple. Having a basic T&C page is better than having no page at all. TermsFeed and Shopify offer solid generators that you can use as a starting point.

Even if you currently have terms and conditions, take half an hour out of your day to read through it and make sure it covers everything we outlined above. A small amount of preparation today could save you a significant amount of time and resources tomorrow.


Exit Strategies | What Are They and Does Your Small Business Need One?

Whether you’ve been running your small business for ten years or are just beginning, an exit strategy may be on your mind. You have a lot to consider, from your preferred lifestyle to your business’s industry, when considering whether an exit strategy is right for you.

Here, we dig into what an exit strategy is, what exit options you have available, and a few pointers on how to decide whether an exit strategy should be on your radar. Let’s get started:

What Is an Exit Strategy?

As the name implies, an exit strategy is a plan of action to leave (i.e., exit) your small business in some capacity.

In the startup community, for instance, ideal exit strategies usually proceed as acquisitions or initial public offerings (IPOs). In both scenarios, investors (and owners) have the opportunity to sell their equity and ‘exit’ the company. Although startup exit strategies are generally the most publicized, any business owner can perform an exit. And there are multiple ways to do so.

The Numerous Kinds of Exit Strategies

While some exit strategies are more popular than others, there’s no single plan you need to follow. For high pace startups with ample venture capital funding, IPOs and acquisitions are generally the best bet. Smaller companies and service-oriented businesses may want to consider equity sales instead.

The following are a few of the most popular exit strategies businesses are utilizing today.

Initial Public Offering (IPO)

It’s likely that if you’re even considering an IPO, you’ve grown well past the small business stage. In an IPO exit, you sell shares of your business to institutional and retail investors as stock on the public stock market. Because IPOs heavily involve retail investors, you don’t have much leverage in negotiating the value of your business.

IPO exits are generally the most lucrative, but they require approval from the Securities and Exchange Commission (SEC). Additionally, you’ll need to contract the services of numerous lawyers, investment bankers, and accountants if you choose to go the IPO route. These services and additional regulatory steps cost a substantial amount of time and money. So, for small businesses, IPOs are usually out of the question.


Chances are, regarding exit strategies, you’re most familiar with acquisitions. In an acquisition, one company (typically the larger of the two) purchases, or acquires, another company. Even within acquisitions, there are a variety of outcomes.

Your level of interest in remaining with the business is the most influential determinant in how your acquisition plays out. Some owners don’t want to leave their company, so they’ll opt to stay on as an employee, typically at a manager-level role or higher. Others choose to move on to their next endeavor, handing over the reins entirely to the acquirer.

With an acquisition as your exit strategy, the exit terms are ultimately yours to decide. If you don’t agree with an acquirer’s valuation of your business or oppose their employment offering, you can simply reject the deal.

This flexibility does come at a price, however. Negotiating with your acquirer may take months (or even years) to reach an agreement. Be prepared to continue operations throughout the acquisition process.


Like an acquisition, an acquihire involves another company purchasing your business. The motivation behind the acquisition, though, revolves around you and your employees rather than other company attributes.

In an acquihire, the acquiring company is interested in the unique skill set that you and your team offer. After the acquisition, the new company may liquidate everything else. If you’re interested in keeping the legacy of your product or service, an acquihire may not be right for you.


A cousin to the acquisition, a merger unifies two businesses to create a new, single organization. Whereas an acquisition contains a buyer and a seller, businesses participating in a merger are on equal footing. The newly established company won’t retain the name, branding, business registration, etc. of either of the former businesses and will contain a leadership team comprising of employees from both of the previous companies.

Equity Sale

It’s not uncommon to have a personal exit strategy for a relatively successful small business. Sometimes you want to retire or move on to another project. In an equity sale, you effectively sell your ownership in the company to another person. There are a few common scenarios in which this sale takes place.

If you have partners, you may sell your stake in the company to them. This option is referred to as a partner buyout and leads to a relatively straightforward exit and turnover. Because your partners already know the ins-and-outs of the business, operations shouldn’t stall much during, and after, the sale.

Another option involves selling your equity to an employee. Doing so is a common choice for solo business owners as it allows them to place their business in the capable hands of someone who already understands it well. Like the partner buyout, this exit strategy should cause relatively few hiccups during the transition.

You may want to keep your business in the family. With 5.5 million U.S. businesses operating as family-run, you won’t be alone. In that case, you would simply perform an equity sale to a relative.


Sometimes you have no better option than to close down shop and liquidate your assets. Only half of all small businesses make it past year five, so you shouldn’t feel upset if you fall into this category.

Additionally, liquidation may not be a negative outcome for your particular situation. If you’ve lost interest in running your business, and don’t want to deal with a sale, liquidation provides you with some final cash from your venture.

When liquidating, there are a few things to remember. First, notify your customers and employees well ahead of time that you plan on closing your business. Failing to do so is not only unethical, it could also tarnish your reputation when starting your next company. Most people forgive a company that shuts down; however, you lose people’s compassion when you rip the rug out from under them.

You should also pay back any loans, outstanding debts, and investors (if any) before paying yourself. If you don’t, you could likely end up in court.


Bankruptcy is a worst-case scenario for your small business. Unlike the previous exit strategies, there’s not much planning you can do for bankruptcy as it often comes unexpectedly.

You have three options when filing for small business bankruptcy – Chapter 7, Chapter 11, and Chapter 13.

Chapter 7, business bankruptcy, is a type of liquidation to pay off your debts. Many owners file for chapter 7 bankruptcy when their business debt becomes insurmountable. In this scenario, a trustee will come into your business, take control of your assets, and divvy them up to your creditors.

If you’re a sole proprietor, you have no obligation to your debts after bankruptcy. However, when part of a partnership or corporation, you still have some debt responsibilities.

If you think you may be able to turn your business around, Chapter 11, business reorganization, is worth looking into. In a reorganization, you provide a plan on how you’ll fix the company and work with your creditors to agree on a revised payment schedule. If your proposal is approved, the business continues to operate under a trustee.

Your last option, Chapter 13, or personal bankruptcy, only applies to sole proprietorships. Once again, with Chapter 13, you need to submit a repayment plan to the bankruptcy court. Differing from Chapter 7 and Chapter 11, Chapter 13 bankruptcy ties personal assets with the business’s, so you run the risk of losing items such as your car or house when filing.

Do I Need an Exit Strategy for My Small Business?

Sometimes the best exit strategy for your small business is no exit strategy at all. Many successful entrepreneurs choose to run lifestyle businesses in which they have no desire to leave or sell the company. If you’re content without some big, fanciful exit, this strategy may be right for you.

However, those types of businesses owners are the exception. No matter which stage your business is in, it’s wise to formulate at least a basic exit strategy. Before you bog yourself down with details, though, you must ask yourself a few questions:

Are you comfortable watching someone else run your business?

  • How important is it for you to be your own boss?
  • Are you tired of running a business or just tired of your business?
  • What do you hope to achieve with your exit?
  • When do you want to accomplish your exit?

All of the above questions will help you discover which type of exit strategy is best for you. If you want to exit your business quickly, an IPO or merger is likely out of the picture. If you can’t stand working for someone else, you can rule out an acquihire. And if seeing someone else run your company is going to give you anxiety, you may steer towards a liquidation.

Don’t limit yourself to these questions, either. Exiting your business is one of the most monumental transitions in your life, so take some time to think long and hard about it. Dig into your motivations and think through different scenarios. You can never be too prepared.

Stay Flexible With Your Exit Strategy

Having one exit strategy is fine, but you should at least be open to multiple. Just as adaptivity is a vital part of running a business, flexibility is crucial for a successful exit.

There are several factors out of your control which affect the exit strategy that would be best for you. For example, you can’t predict the industry landscape, market health, or actions of your competitors – all of which affect your exit options.

It’s best to maintain a few exit strategies in case your first choice doesn’t work out. You may want another company to acquire you, but that only happens if you can find another company that’s on board. It’s possible that there’s no interest in the market and you’ll be forced to liquidate. You don’t want to be caught off-guard if that’s the case.

Tying yourself to a single exit strategy has unintended consequences as well. Executing on an exit strategy take up time. If you’re spending hours on end trying to find an exit that fits in your plan, your core business will suffer. Staying flexible allows you to work on your departure while keeping your business thriving.

Additionally, pigeon-holing yourself into a single exit strategy diminishes your negotiation leverage. If an acquirer or potential equity buyer knows that you’re not considering other options, they’ll likely try to strong-arm a better deal for themselves.

Start Planning Today

Don’t wait until you’re interested in exiting to begin forming an exit strategy for your small business. As with most things in life, it’s best to plan ahead and be prepared for when the opportunity arises. You now have enough exit strategy knowledge to get started on one – at the very least, a basic one. Start planning for the future today.


10 Easy Ways to Make Your Customer Service Amazing

There’s no doubt about it. Customer service has the potential to make or break your business. Customers are willing to spend 17 percent more, on average, with companies who provide excellent customer service. And, 96 percent of consumers worldwide place customer service as an important factor when picking a brand.

But not all businesses are taking note. According to an Accenture study, American companies have lost a combined $1.6 trillion due to customers switching to competitors after a poor customer service experience. We can assume that the rest of the world follows a similar trend.

Providing outstanding customer service not only increases the amount that customers spend at your business, but it also helps you grow your customer base. Here are ten simple activities you can follow to give your business an edge and make your customer service amazing.

1. Create a Customer Service Mantra and Set Goals

It’s impossible to accomplish stellar customer service without forming the procedures to implement it. Work as a team with your employees to create a customer service mantra and brainstorm associated attributes you feel are essential to the success of your business.

Take Southwest Airlines, for example, a company with notoriously great customer service. The Southwest mission is “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” Whenever a Southwest employee is faced with a difficult customer service decision, we can be sure that this mission is at the front of their mind.

Following the creation of your customer service mantra and procedures, ensure that you document them, and any other relevant information, somewhere that’s easily accessible to all employees. Many businesses go so far as to post this information around their office as a constant reminder of how to act in customer interactions.

2. Understand Your Customers

To best help your customers, you need to practice empathy. Discover their likes, dislikes, motivations, and try to look at your business through a customer’s viewpoint. Crafting customer journey maps is an excellent exercise to gain this perspective.

When mapping out a customer journey, include every interaction the customer has with your company, from the first touchpoint (e.g., advertising or inquiry) to the last (e.g., support or return). Try to discover areas in which you can surprise and delight your customers.

Don’t create these journey maps in a silo. Talk to your customers and gain an understanding of their specific experiences. You’ll quickly begin to see patterns emerge. As you learn more about your customers’ wants and needs, you’ll be better prepared to provide them with the customer service that they expect.

3. Train Your Employees

Every one of your employees needs to go through customer service training as part of their onboarding process. Creating procedures that surprise and delight your customers is pointless if your employees don’t follow them.

Educate your staff on proper workplace etiquette and what to do when different customer scenarios arise. It may even be worthwhile to roleplay certain events as part of the training.

Customer service training shouldn’t stop after onboarding, either. Continuously monitor your employees and teach them innovative ways to improve their customer service skills. Providing perfect customer service is an unobtainable goal towards which you should continually be working.

Find ways to reward employees for following your customer service mantra. You may want to praise them publicly, give them a raise or promotion, award them additional vacation days, or perform some other act of gratitude. Everyone responds differently to specific rewards mechanisms, so you may find yourself changing your strategy depending on the employee.

4. Respond Quickly and Courteously

Customers view response speed as one of the most influential factors of customer service, especially for online businesses. Three-fourths of customers expect a response within five minutes of making contact with online support.

Ensure that your support team isn’t understaffed and has the appropriate resources to respond to customers in a reasonable timeframe. Although hiring another support staff member or two comes with an upfront cost, a better customer service experience typically leads to more sales revenue down the road.

Look into online chat software, such as LiveChat, to help your customer support team manage multiple conversations at once and become more efficient.

Having a quick response time isn’t enough, however. You need to be courteous as well. In an American Express survey, 68 percent of respondents attributed a pleasant representative as a pivotal contribution to their positive customer service experience. Your procedures need to include specific wording and phrases to keep your employees’ tone respectful which, in turn, leaves customers feeling satisfied.

5. Help Customers Help Themselves

As the business world becomes more digital, customers are turning towards self-service options to solve their problems. Over 60 percent of U.S. consumers opt for self-service tools to resolve simple issues, and almost 90 percent of B2B decision-makers prefer reordering through a self-service tool rather than speaking with a sales representative.

If you haven’t done so already, add self-service tools to your customer service offerings. These tools can range anywhere from basic frequently asked questions (FAQs) and knowledge base guides to more advanced services such as a community forum and AI chatbots. Most importantly, customers should feel comfortable interacting with your business. So the more self-service options, the better.

Other than improving the customer experience, implementing self-service tools has the additional benefit of reducing your customer service costs. The simpler it is for customers to find answers to their questions, the fewer resources you need to dedicate to your support staff to help them.

6. Listen to Customer Feedback

Diligently collecting and listening to customer feedback is one of the best ways to improve your business. Often, feedback will reveal issues in your customer service process that you hadn’t known existed.

Don’t wait to hear from customers, either. Only one out of every twenty-six customers let businesses know about a negative experience; the rest silently switch to competitors. By the time a customer is disgruntled enough to complain, it’s typically too late to make any meaningful changes. Reach out to customers and actively gather feedback about their experiences – the good, the bad, and everything in between.

There’s no shortage of tools at your disposal to collect this information. SurveyMonkey is a cost-effective option to collect high-level feedback through mass surveys. Client Heartbeat measures your customers’ sentiment over time. And, Reevoo focuses on gathering customer reviews.

As you collect feedback, analyze responses for trends and insights. You need to implement changes based on your findings and communicate those changes to your customers. Half of all shoppers don’t believe that their feedback reaches decision-makers. So emphasizing how customer feedback drives changes in your organization will set you apart significantly from the competition.

7. Add Some Personalization

Making your customers feel special is another underutilized yet straightforward strategy in providing fantastic customer service. Increasing customer retention by five percent can improve profits by 25 to 95 percent, so you should be doing everything in your power to keep your current customers happy.

Let’s take a look at another stellar customer service example. In 2015, DonorsChoose, a non-profit organization for education funding, ran an experiment to test the effect that personalization has on donations. The organization effectively split their donors into two groups. One group received personalized thank-you notes after donating. The other set of doners didn’t.

The following year, DonorsChoose discovered that the thank-you note group donated $41 more per person on average than the group without the personalized touch. With 75,000 donors in the thank-you note group, this experiment led to an additional $3 million in donations.

Depending on your business, hand-written thank-you notes may be overkill. But, you should still look to DonorsChoose as an example of the positive effects customer personalization can bring to your business.

8. Resolve Customer Issues Correctly

Resolving customer issues on the first try may seem like an obvious best practice, yet many companies don’t follow it. Seventy-two percent of people who report poor customer service cite having to re-explain their problem as the crux of their negative experience.

A lack of product and service knowledge seems to be at the heart of this issue. When an employee is unsure of how to answer a customer’s question, they either:

  1. Pass off the customer to another employee, or
  2. Even worse, inadvertently tell them false information.

Both scenarios leave a bitter taste in the customer’s mouth. Educating your employees on all aspects of your business does wonders to resolve this problem.

Your staff should eat, sleep, and breath your product or service. Except in rare instances, a customer should never bounce between customer support employees because of a knowledge gap.

Just as you log customer service procedures, you need to document every detail of your product or service. Additionally, record the common issues that customers face, so employees are well-prepared no matter the situation and can resolve issues promptly.

Collect information on the customer issues that employees mishandled, and try to pinpoint what caused the inefficiencies. From there, you can educate your staff on what to do if that situation arises again.

9. Admit to (and Fix) Your Mistakes

Whether it’s a misplaced order, false charge, or subpar shopping experience, your business will inevitably experience some blunders. Instead of trying to sweep mistakes under the rug, take responsibility for your faults.

A mistake or two won’t kill your business. In fact, a recent study by Glance found that 70 percent of unhappy customers would return to a store if their issues were resolved successfully. But you shouldn’t stop at a simple financial compensation to resolve the conflict. Customer satisfaction doubles when you include an apology as well.

View your mistakes as another opportunity to win the affection of your customers. You don’t just build brand loyalty when everything is going smoothly. It’s the rare moments when your processes break down that you can really prove to customers that you care.

10. Exceed Customer Service Expectations

For many consumers, customer service now tops price and product offerings as the deciding factor in picking one brand over another. Businesses are shifting toward utilizing spectacular customer service as a way to differentiate themselves from the competition.

Not so surprisingly, customer service expectations among consumers are already high. Seventy-two percent of consumers, for instance, expect a customer service agent to know who they are, know what they’ve bought, and have information about their previous contact with the company.

Fortunately, the payoff from exceeding your customers’ expectations is worth the additional time and resources. Over 70 percent of customers will tell six or more people of a positive experience they have with a business. Doing some back-of-the-napkin math, providing a great experience to just 100 customers has the potential to reach over 400 additional people. Even converting a small percentage of those 400 potential customers could have significant implications on the success of your business.

Never Stop Improving

Continuously enhancing your customer service process needs to be a cornerstone of your business philosophy. As competing products continue to become more interchangeable with each other, companies will find increasingly innovative ways to stick out from a customer service perspective.

It’s an area in which you can’t afford to get left behind, so get started on those improvements today.


All You Need to Know About Credit Card Processing Fees

No matter the industry you’re in, your ability as a business to accept credit card payments is paramount. As the world continues to shift away from checks and cash, more customers expect to have some type of digital option come payment time. A recent survey by Square found that 84 percent of consumers feel it’s important that a business has a credit card payment option. By excluding credit card payments, you’re effectively turning down business.

But, accepting credit cards does have some downsides – namely the processing fees. On average, those fees cost a business around two percent of each transaction. In this guide, we break down what you need to know about credit card processing fees and give some guidance on how you can keep them down.

What Are Credit Card Processing Fees?

Credit card processing fees are simply the charges you incur when accepting credit card payments. The total credit card processing fee you pay throughout each month contains several smaller fees. Some of those fees are transactional, occurring with each transaction, while others are a flat monthly charge.

Before we dig into the specific fees, though, it’s essential to understand the journey of a credit card transaction. A simple payment follows these steps:

1. A customer swipes a credit card at your point-of-sale (POS) terminal or pays online.

2. The terminal or website sends information about the transaction to a payment processor.

3. Then, the payment processor relays the information to the appropriate credit card network.

4. From there, the card network passes along the transaction details to the issuing bank.

5. Next, the issuing bank checks that:

a. the customer is using a valid card,

b. the transaction isn’t fraud,

c. and that the account has enough available funds.

6. If everything returns valid, the issuing bank sends an approval code back to the card network.

7. The card network then passes along the approval to the payment processor, which in turn, tells
the POS terminal or website.

8. After that, the sale is complete.

9. At the end of the day, the card network will transfer the appropriate funds from the issuing bank to the payment processor.

10. Finally, the payment processor transfers those funds to your business.

Unfortunately for you, the intermediaries at each step of the process take a fee that your business ultimately pays. The following are the credit card processing fees you should know about:

Interchange Fees

Issuing banks (i.e., your customer’s bank) charge acquiring banks (i.e., your business’s bank) interchange fees. And, in turn, the acquiring bank passes along some, or all, of these fees to your business. These fees cover the transaction risks, the costs of handling the transaction, and most importantly, enable the issuing bank to turn a profit.

Interchange fees typically comprise the most substantial portion of credit card processing fees and are out of your control as the credit card networks set them. They usually contain a percentage component in combination with a fixed amount per transaction. The amount of the fee varies, depending on the issuing bank, type of card, method of payment, amount, and your business type.

Assessment Fees

Card networks such as Visa and Mastercard collect fixed-percentage assessment fees. Assessment fees are typically lower than interchange fees and may vary depending on your monthly volume.

Payment Processor Fees

Payment processors like Stripe and PayPal charge payment processor fees in exchange for their services. With some payment processors, you pay these fees alongside the interchange and assessment fees, while others include all costs in what they charge you. It all depends on which payment processor you choose.

Out of all the credit card processing rates and fees, you have the most control over the payment processor fees. Often, you can negotiate more favorable terms. When working with a payment processor, try to avoid long-term contracts. You should also inquire into any discounts they provide at certain transaction volume levels.

Incidental Fees

Most payment processors charge incidental fees on top of their regular service fees. Incidental charges cover cases like chargebacks, non-sufficient funds, and cardholder disputes. Once again, these fees differ depending on which payment processor your business implements.

Credit Card Processing Fees of Popular Payment Processors

There are hundreds of payment processors with which you can do business. Each one contains its own set of strengths and weaknesses, so it’s essential to evaluate them according to the needs of your business. You want to consider aspects like ease-of-use, customer support, accepted payment types, fees, and integrations, among other things.

To stay on track with the theme of this article, though, we’re going to stick with outlining only the credit card processing fees of popular options.

Stripe – Credit Card Processing Fees

Stripe charges a straightforward 2.9% plus $0.30 for each credit card transaction. If you accept a credit card payment through a physical Stripe terminal, however, the fee drops down to 2.7% plus $0.05 per transaction. The cost for a terminal starts at $59.

If you accept international credit cards, Stripe charges an additional 1% for each transaction. And if the transaction involves a currency conversion, there’s a 1% fee on top of that as well.

For large volume businesses, Stripe is more flexible, allowing you to negotiate a contract with their sales team.

A successful chargeback on Stripe will cost you a $15.00 penalty.

PayPal – Credit Card Processing Fees

Similar to Stripe, PayPal charges a standard 2.9% plus $0.30 per credit card transaction (in the U.S.). From there, the companies begin to differ.

For international purchases, PayPal ups the processing fee to 4.4% plus an additional flat fee. The flat fee follows a rate table and depends on the currency of the transaction. Additionally, PayPal levies 2.5% for any currency conversions.

For in-store transactions using a PayPal card reader, you have a flat 2.7% fee when a customer swipes a card. When you enter the card details manually, PayPal increases the fee to 3.5% plus $0.15 per transaction.

If you’re a 501(c)(3) charitable organization, PayPal offers you a discount. Your typical credit card percentage fee lowers to 2.2%, and the international rate falls to 3.7%. You’re still required to pay the full amount of the additional flat fee, though.

Regarding successful chargebacks, PayPal takes slightly more than Stripe – $20.00.

Square – Credit Card Processing Fees

Square’s credit card processing fees are mainly contingent on the POS hardware you choose. The company’s most basic options, the Square Readers, come with a 2.75% fee for each transaction – no additional flat fee.

Using the Square Terminal, you’re charged 2.6% plus $0.10 on each transaction. The Square Register, rounding out the hardware suite, will cost you 2.5% plus $0.10 per transaction.

While the Square Reader is free for your first device, the Terminal and Register cost $399 and $999, respectively.

Identical to the two previous payment processors, online credit card transactions run a 2.9% plus $0.30 fee. Additionally, credit cards that you manually enter cost 3.5% plus $0.15 per transaction.

Square is unique in that it has no chargeback fees.

Helcim – Credit Card Processing Fees

Helcim’s model for credit card processing fees differs significantly from the above service providers. To start, Helcim charges a flat monthly rate of $15 for physical systems and $35 for online access.

Concerning actual processing fees, Helcim implements an interchange plus fee model. The company effectively tacks on anywhere from 0.10% to 0.45% to the standard interchange fees.

The amount of your Helcim fees is dependent on your monthly volume and the average size of your transactions – the larger your transaction sizes and higher the monthly volume, the lower your rate.

You’ll owe Helcim $15 on successful chargebacks.

How to Reduce Credit Card Processing Fees

Because non-negotiable interchange fees comprise the majority of credit card processing fees, strategies to reduce costs for your business are relatively limited. However, there are a few approaches you can take to reduce your credit card processing fees.

Negotiate, Negotiate, Negotiate

There’s hardly any downside in negotiating with payment providers. Shop around and reach out to various companies to see what type of deals they can cut you. Most payment providers would rather give you a discount to have you as a client than lose you to a competitor.

If you’re a high-volume business, ask about receiving lower rates when hitting certain transaction volume thresholds. Often, providers are willing to bring down their rate if you can guarantee a certain level of volume.

Another area of flexibility you have is the contract length. It’s advantageous for your business to implement a shorter-term contract so that you have more opportunities to re-negotiate better terms once the timeframe is up.

Don’t Wait to Settle Transactions

To guarantee the lowest processing fees, settle your transactions at the end of each day. The longer you wait to do so, the higher your interchange fees will be. If you’re accustomed to settling transactions once, or even a few times, a week, switch your routine to make the activity a daily occurrence.

Reduce Fraudulent Transactions

At $15 to $20 a pop, chargebacks and fraudulent transactions can quickly become a considerable expense. Take additional precautions to fight against these things.

For in-person transactions, ensure that your POS terminal includes EMV support. EMV transactions require customers to insert, rather than swipe, their credit cards and utilize the chip found in most cards today. Chip cards help to reduce fraud because they’re challenging to clone and contain advanced data encryption. Mastercard found that, since implementing EMV payments, card fraud has fallen around 60 percent on the Mastercard network.

Besides improved security, you typically receive a lower processing rate for EMV transactions from payment processors.

If you have an online business, it’s worth looking into an address verification service (AVS) to help lower instances of fraud. An AVS requires customers to enter their address when making a payment. It then checks that the address matches the one on file at the issuing bank. If the address doesn’t match, the payment fails, and you save yourself from an incidental fee.

Incentivize Cheaper Payment Methods

Your credit card processing fees can vary greatly depending on which transaction method a customer uses.

Most payment processors charge a significantly higher fee for manually-entered credit card transactions than ones that you execute via swipe or insert. With an additional markup of one to two percent per sale, numerous manual payments could severely curb your profits.

Bring in the Experts

Sometimes it’s worth hiring a credit card processing consultant to find additional ways to reduce costs. They know the ins-and-outs of the industry and usually have connections at several different processing companies. Consultants can often help to negotiate contracts and get you the best deal possible.

The Good News

You’ve already taken the correct first step. The best way to keep your credit card processing fees down is to educate yourself. The more you learn about the system, the easier it becomes to find areas where your business can improve.


How to Research a ‘Golden’ Business Opportunity

So, you think you’ve found your golden ticket – the perfect business opportunity. Before quitting your day job or taking out that business loan, though, you need to do some research. Twenty percent of small businesses fail in their first year, and that rate jumps to about half of all companies by year five.

There are a few precautions you should take to ensure that this opportunity is worth pursuing. Perform the following research strategies to get a better idea of your business opportunity and lessen the chances of becoming another statistic.

Complete the Business Model Canvas

The first, and most important, step of your business opportunity research process is to complete the Business Model Canvas. The Business Model Canvas is a one-page supplement to the traditionally long, 30+ page business model.

The canvas forces you to think about essential business criteria such as your value proposition, cost structure, revenue streams, and customer segments, among other aspects.

Make sure you fill out the entire canvas. If you don’t know what to put in a section, it’s perfectly fine to write down your best guess. As you continue your business opportunity research, you’ll discover those answers and adjust your canvas accordingly. It should be an ever-evolving document.

Helpful Tips

One session maximum. Limit yourself to one sitdown session to fill out your Business Model Canvas for the first time. It’s more beneficial as an exercise to start you thinking about the questions it asks rather than writing your answers done in stone.

Don’t fear change. Throughout the research process, you might find that many of your assumptions were wrong. That’s fine. Update the canvas accordingly and use that information to tweak your business further.

Calculate Your Rough Financials

Knowing to estimate the amount of money it takes to start up your business should be a no-brainer. Your start-up costs will determine if you can bootstrap the business yourself or if you need to find funding. It also helps to cement how big of a risk you’re taking. It’s much more challenging to get started if your initial costs are outside of your budget.

Don’t forget to include professional services costs (lawyers, bookkeepers), operating costs (office space, equipment), and potentially substantial marketing costs depending on your business. This research step is also an excellent time to consider whether or not you should bring on a co-founder or need to make any first hires. Both decisions affect your costs.

Part of your financials research also includes figuring out the size of your potential market. A common approach involves calculating your TAM, SAM, and SOM. To explain further:

  • TAM (Total Addressable Market) is the total market demand for your product or service. It’s the amount of revenue you would make if you sold to 100 percent of potential customers.

  • SAM (Serviceable Addressable Market) equates to the total number of target customers multiplied by the average annual revenue for those customers.

  • SOM (Share of Market) is a realistic percentage of the SAM that you can capture. You won’t have 100 percent market share, and it’s highly unlikely that your SOM will reach even half of your SAM.

At this research step, figure out what you can expect for your revenue streams as well. You’re probably not making money yet, so these figures can be ballpark estimates. You need to have an idea of how long it will take (and what traction you need) to break even. Any potential investor will be looking for these numbers, but you should also know them for your benefit anyway. It’s a fool’s errand to pursue a business that can’t be profitable.

Helpful Tips

Keep it simple. There’s no need to figure out exact numbers at this point. Costs will change as you move along, so just worry about getting in a reasonable range.

Include some wiggle room. There are bound to be expenses that you miss in your estimates. Add anywhere from 20 to 50 percent on top of your initial forecast.

Perform a SWOT Analysis

It’s beneficial to maintain a SWOT analysis during every stage of your business growth, including the research phase. In a SWOT analysis, you examine your business’s:

  • Strengths (internal): Positive aspects and differentiators of your business

  • Weaknesses (internal): Gaps in your business and areas you fall behind competitors

  • Opportunities (external): Underserved markets, media potential, and emerging needs

  • Threats (external): Rising competitors, unfavorable regulations, and negative press

Following your SWOT analysis, you can begin to form short- and long-term goals. Discuss those goals with your team and figure out what action items you need to complete to accomplish them. Just as your SWOT analysis will change over time, your objectives will shift prioritizes.

Helpful Tips

Be brutally honest. A SWOT analysis is useless if you refuse to acknowledge weaknesses or threats. Lay everything out in the review, even if it makes you uncomfortable.

Take action. Performing the SWOT analysis isn’t enough. You need to capitalize on your opportunities and strengths while working to mitigate threats and remove weaknesses.

Meet With Potential Customers

When researching a business opportunity, the most beneficial activity you can do is talk to potential customers. The advantage of doing so is two-fold.

By talking with your customers, you primarily gain further insight into the problem that your business is solving. You can discover what products or services people are currently using, what they like about those businesses, and where they’re falling short. Often, you’ll find a customer issue that hadn’t even crossed your mind.

Almost as beneficial, though, are the strides you make in building your initial customer base. By meeting with people during the research phase, you establish relationships that could quickly turn into sales. The potential customers you meet with are more likely to buy your product or service because they had a critical part in creating it.

As you talk with potential customers, you’ll begin to see patterns in their thought processes, behaviors, and pain points. To take your customer research a step further, create personas that represent your target market based on the patterns you notice. These personas should resemble real-life people with names, backstories, motivations, etc. Humanizing the personas enables you to refer to them later and helps to put yourself in the customer’s shoes.

Helpful Tips

Meet face-to-face. Talking in-person helps to create rapport and allows you to dive deep into topics that pop up. You can’t get that level of personalization through email.

Ask open-ended questions. You want the person you’re meeting with to do the majority of the talking. Avoid yes/no questions or ones that try to lead them to a particular answer.

Talk to the Experts

Don’t be afraid to reach out to other, more experienced entrepreneurs about your business opportunity. They can provide a treasure trove of invaluable advice. If you’re worried about them stealing your idea, you shouldn’t be. Most are too busy working on their own business to take the time to build yours.

The entrepreneurship community is generally quite helpful. Experienced business owners will often tell you about the mistakes they’ve made to (hopefully) prevent you from doing the same thing in the future. If they’re okay with it, take down notes that you can refer back to as you talk with them. Unless you have a perfect memory, there are likely to be valuable tidbits that you won’t remember.

Additionally, try to find some experts in the same industry in which your opportunity resides. They’ll not only know the ins-and-outs of the market but can also guide you on what you may need from a licensing and regulatory perspective. You’ll still need to hire a lawyer down the road, but talking to industry experts is a low-cost way of getting an idea of what’s involved.

Similar to customer research, the more people you network and meet with, the better. Who knows? You may find an advisor or two in the process.

Helpful Tips

Offer value. When reaching out, try to offer something in return. Everyone’s tired of getting their coffee bought for them. Leverage your particular skillset to avoid a one-sided relationship.

Keep in contact. One meeting is great, but a lifetime relationship is even better. After meeting, ask the other person if you can stay in touch or add them to your company update list.

Analyze Your Competition

You know the adage, “Keep your friends close and your enemies closer?” Well, the same idea holds in business. An in-depth competitive analysis needs to be part of your business opportunity research. Determine who your competitors are and, more importantly, what sets you apart from them. Ideally, your product or service has at least one aspect that’s ten times better than any of your competition.

After talking to potential customers and experts in the industry, you should have a good idea of the competition you face.

Other than noting the particular products and services your competitors offer, discover how they position themselves in the market. Try to position your business differently. When starting out, it’s significantly easier to carve out your own niche than it is to steal competitors’ business.

Helpful Tips

Not every company is a competitor. A business being in the same industry as you doesn’t automatically make them a competitor. Look for potential partners as well.

Never stop researching competitors. You should always have your finger on the pulse of your competition. Have an understanding of what they’re up to and where they’re heading next as a company.

Don’t Limit Yourself

Many entrepreneurs, especially first-timers, trap themselves into a “my way or the highway” mindset as they research new business opportunities. They become so in love with their idea (solution) that they end up missing the opportunity (problem) right in front of their face.

Keep an open mind as you research your business opportunity. Instead of working to validate your solution, try to understand your customers’ problems as best as possible. Wait until you have an in-depth appreciation for the issues your customers are facing before forming business solutions. Unfortunately, that process is easier said than done.

But Most Importantly, Do Something!

The biggest mistake new entrepreneurs make when researching a business opportunity is to stay in the research phase indefinitely. It’s easy to get stuck in analysis paralysis, in which you overwhelm yourself with so much information that you become incapable of taking the next steps.

In the end, nobody has all of the answers. The best you can do is start working with the information you have and keep learning along the way. Good luck!


10 Simple Ways Your Small Business Can Save Money

Operating a small business is often an everlasting battle to keep your cash flow ahead of expenses. In fact, a SunTrust survey discovered that 75 percent of small businesses face cash flow fluctuations each year. And, if your costs aren’t in check, even a small change could bring doom to your business.
Even if you’re one of the few businesses with steady cash flow, cutting expenses where possible should be a priority. It doesn’t hurt to make your business more profitable, and you never know when unexpected cash flow problems will pop up. The following are ten simple cost-saving strategies that you can implement for your small business.

1. Regularly Audit Your Expenses

It’s imperative that you take a look through your expenses each month. You’d be surprised at what you’d find. Often, significant charges go unnoticed for months as they slowly drain cash from your bank account. You want to make sure you account for every dollar you spend.
Every three months, perform a deep-dive audit of the previous quarter. Identify areas of excessive spending and create a strategy with concrete action items to cut down on unnecessary expenditures.
It may seem obvious, but you need to create and follow a budget. When you audit your expenses each month and quarter, identify which categories you overbudgeted, which categories you underbudgeted, and why you did so. Even if all you do is budget and track your spending, you’ll likely discover significant cost savings within the first couple of months.
To help with this process, connect your business bank accounts to expense management software. Freshbook, Quickbooks, and Gusto are all great options. They allow you to split up your expenses into categories automatically and most provide useful documentation when tax time comes around.

2. Utilize a Website Builder

Many small business owners wrongly assume that they need to hire a web developer to build out a website for their business. A quality developer costs anywhere between $35 to $150 per hour and can take several months to build your site.
Instead of hiring an expensive contractor for this work, consider creating the website yourself using a website builder. Website builders enable anyone to quickly, cheaply, and easily create a website – no programming experience required. With minimal training, you can create a website within days.
You have a wide range of website builders at your disposal. Some builders, like Squarespace or Wix, offer complete website templates in which you only need to change images and text while others, such as WordPress, provide you with full customizability. A few website builders (Unbounce is one) focus on tracking customer conversions and allow you to A/B test different layouts.
Most importantly, though, a lot of the available website builders use a freemium model in which you can use a scaled-down version of the builder for free. As you grow your business, you’re able to upgrade to get more features and still pay less than $100 per month.

3. Manage Customers With CRM Software

Switching to a Customer Relationship Management (CRM) platform to document leads and clients could significantly reduce the number of employees you need on your sales force. CRM software makes your team more efficient by recording client notes, dates of contact, sales funnel steps, and other important information all in one place.
Marketing and sales are two sides of the same coin, so many CRM platforms also include, or integrate with, popular marketing tools.
The efficiencies that CRM software provides are unmatched. A 2014 survey by Nucleus Research discovered that companies implementing a CRM system receive a return on investment of $8.71 for each dollar they spend on the new software.
If you’re worried about additional spending in the short term, you shouldn’t fret. Many CRM software companies offer a free version or trial, so you can test it for your business to see if it’s a right fit before even paying a dime. Hubspot and Salesforce are two popular CRM platforms into which you should consider looking.

4. Outsource Your Payroll and Bookkeeping

According to Zenefits research, the payroll process takes an average of seven minutes per employee each pay period for small businesses, Outsourcing your payroll with helpful software could bring down your total costs by almost 20 percent.
Other than bringing down your process times, outsourcing payroll and bookkeeping reduces your risk of paying penalties for noncompliance. The United States has thousands of pages of tax codes, so it’s difficult for a busy small business owner to ensure that the company is following everything to a T.
And you definitely want to stay compliant. The National Small Business Association reports that noncompliant businesses pay an average of over $30,000 in fines over five years of operation.
By leaving your complex payroll and bookkeeping to the experts, you minimize the risk of needing to pay those exorbitant fees. While outsourcing bookkeeping may cause additional expenses in the short term, it will save you an abundance of money in the long run.

5. Explore Alternative Advertising

As the digital marketing space becomes more crowded, advertising through mediums such as Google and Facebook are turning more costly and less efficient.
If you see the results of your regular marketing channels begin to plateau, don’t be afraid to test some “outside-the-box” ideas. Guerilla marketing techniques are challenging to make viral, but they’re usually inexpensive, so you can try out numerous creatives options to see what sticks.
Some businesses are even switching back to more traditional advertising like billboards due to their lower costs.
You can also reach out to other businesses to do communal advertising. Some advertising options when partnering with other companies include cross promotions, mailing list sharing, and referral deals, among others.
Exploring inboard marketing like search engine optimization (SEO) and blogging is another low-cost option. This strategy is especially beneficial if you’re in a niche or local market as those sectors typically have low keyword competition and a lack of written resources.
Moz and Ahrefs provide a bunch of free SEO tools and educational resources to learn more about what Google looks for when creating rankings.

6. Be Economical With Website Hosting

Unless the website for your small business is receiving a monumental amount of traffic, there’s no need to splurge on premium website hosting or a dedicated server.
When it comes to web hosting, it’s best to start small, ideally using a shared hosting provider. You can usually get up and running for as little as $10 per month.
HostGator and SiteGround both offer inexpensive shared website hosting that you can later upgrade if you need to. Some website builders provide bundled hosting services as well.

7. Go Virtual

If you require all of your employees to be in the office each day, you may be robbing yourself of a cheaper (and just as efficient) workforce. Office provider IWG reports that 70 percent of people around the world work remotely at least once a week.
With productivity tools like project management software, messaging platforms, and video chat services, distributed teams are as efficient as ever. Between Slack, Microsoft Teams, Google Drive and Hangouts, Zoom Video, and Dropbox, your communication choices are nearly endless.
Project management software facilitates virtual teams and makes your business more efficient overall. Platforms like Trello and Asana allow you to set goals, delegate tasks, create deadlines, and track the progress of different action items transparently, keeping your entire team on the same page. Doing so cuts down meetings times and the necessity for other events to bring your team up to speed.
Unless the size of your team is creeping towards the triple-digits, nearly all of these software products are free.

8. Automate What You Can

“Time is money” may be an old adage, but there’s a reason that it’s stuck around for as long as it has. Any time that you or your employees waste on menial, repetitive tasks chips away at other opportunities to make more money.
Take stock of all your business processes, and find areas that you can automate. Implement time clock and mileage tracking software that hooks into your payroll process to avoiding manually calculating those figures each pay period.
If you rely on social media and email marketing, utilize online tools like MailChimp and Buffer to create campaigns ahead of time, and schedule them to go out automatically after specific customer touch points. Both platforms offer a free tier to get you started.
It may even be worthwhile to hire an external consultant to analyze your processes and offer automation suggestions. An outside pair of eyes usually spots the inefficiencies that people who are too close to the business (i.e., you) may miss.

9. Educate Your Customers

It’s easy to waste a ton of time and resources on customer support. Do everything in your power to make sure that your customers have the material and knowledge base to succeed. The more confident your customers are in using your product or service, the less they’ll contact you for help, which in turn, saves you money.
To help your customers, set up a Frequently Asked Questions (FAQ) page that’s continuously updated as new questions arise. Why answer the same question numerous times when you can document the answer instead?
Other tools that help support customers include live chat and help desk software. Live chat capabilities enable your support staff to assist several customers simultaneously and are generally more efficient than email and phone support.
Help desk software combines live chat, FAQs, knowledge base documents, customer forums, and numerous other tools into one package. You may find the customer forum especially helpful as customers will answer other customers’ questions, lightening the load on your support staff.
Zendesk and Zoho Desk both offer a suite of help desk tools for small businesses.

10. Take Advantage of Free Software

The Internet is a treasure trove of free software for small businesses. With a little hunting, you can find free versions of most of the software we’ve listed in this article. While you’ll eventually need to upgrade to paid versions, the free alternatives are incredibly beneficial when you’re first starting your business.
Depending on the size of your small business, you may never need to upgrade to a paid product.
Open-source software is another option that you should research. Although these products typically don’t come with customer support, they’re always free to use.

Don’t Be Afraid to Ask Around

You should never stop working to reduce your small business expenses. The landscape is constantly evolving, and unique opportunities will continue to pop up.
Outside of your own research, talk with other small business owners to see what’s working for them. You may find invaluable cost-saving strategies that you would have never imagined.