In many ways, the moniker small business is a misnomer. When you consider that the average entrepreneur takes on the tasks that a big business parcels out to hundreds if not thousands of employees, a small business doesn't feel so small. The consensus among most small business owners is that big-box competition is a real threat to the small business owner. However, the things that make a small-business owner unique is what makes winning the big-box battle possible.
Behemoth retailers with their ability to monopolize distribution channels, spend more on marketing than you make in a year, offer loss leaders at will and enjoy volume discounts do make it hard for the small business to thrive, especially when the business is a startup. Big-box competition can also be a problem for start-ups because it takes some time to be recognized and accepted in the marketplace. However, small businesses are everything that big businesses aren’t. Generally in a big-box store, you’re lucky to find help and when you do, the employee often doesn’t even know if the store has the item and there’s no guarantee of the quality of the product. Go into a small retailer, however, and you can enjoy speedy, personalized service and higher quality products.
Many small business owners feel that the key to keeping a small business thriving is relationships. Businesses that survive over the years are the ones where the owners and employees develop relationships with customers. Small business owners should also engage customers with services like Groupon and Living Social to compete with big-box retailers. Getting customers into your business and building a relationship with them can keep them from jumping on the big-box bandwagon.
Building relationships with your local government can also work for your small business. Businesses that get the most support from local governments are the ones that reach out and become a staple in the community. Making an investment in your local community is bound to positively affect your business. For example, join the Chamber of Commerce, be a fixture at community events, volunteer to serve on local boards – all of these will help you obtain more support from your local government.
Keeping these things in mind can help your business thrive as you work to attract and build relationships with customers and your community.
Getting a small business bank loan is never easy, and it’s been especially difficult since the financial crash of 2008 and the lingering credit crunch. Even though small business lending is rebounding somewhat, it is still virtually impossible to get a loan to open a new business because lenders want to see a financial track record for your business that demonstrates your ability to repay the money they’re lending you.
What are your options for financing if banks aren’t willing to lend without knowing if your venture will be successful enough to make good on your obligation? Most entrepreneurs start their businesses with savings; they put startup costs on credit cards or get loans from family and friends. The void in bank lending has spurred the growth of alternative lending, which can be costly but gets money to entrepreneurs quickly and without a lot of hassle. One example of this is crowdfunding through websites such as Kickstarter and Indiegogo.
Some niche alternatives that have sprung up are less well known. For instatnce, culinary businesses can apply to the Whole Foods Local Producer loan program, which lends money to businesses making local food products. Many franchisers also help prospective franchisees with financing after home equity, which was once a common source of startup cash, plunged in many parts of the country.
Perhaps a more realistic option for you is connecting with a nonprofit microlender. A microlender is an organization that makes business loans to individuals. They typically charge higher-than-average interest rates and their maximum loan amount is usually $25,000.
Once your business has been operating for two to three years, a bank loan may be a realistic possibility. Showing your business has a proven business model with steady, paying customers can make the loan officer’s job easier when deciding if your business is a good risk. Don’t be afraid to take the plunge when it comes to starting a new business – inform yourself of the options available to you to launch your business and you’ll be up and running in no time.
Bean Counters Bookkeeping is a virtual bookkeeping business; so that you can focus on what is important, your business. www.thebeancountersbookkeeping.com