The Benefits of Social Media for Small Businesses

Social media marketing (SMM) and networking is a new wave of socializing, keeping up with friends, meeting new people, and developing new business contacts, and it all happens online. The networking takes place in the clouds over the Internet and allows people from halfway around the world to be at the same place at the same time.

For example, most people have been exposed to Facebook or Twitter in some way or other. This type of networking brings businesses and consumers together in a way that allows for timely, nearly instant responses and reactions that in the past would have taken days.

The world of today is about the fast flow of information one can put out and receive, and how quickly that can be accomplished and using social medias to network affords this opportunity for businesses big or small.

Everyone knows and recognizes the big brand names like Pepsi, Virgin, or L’Oreal for a number of reasons but the most apparent is that we see them all the time in magazines, billboards, commercials… anywhere they can attach their logo. Why? How? Extremely large budgets. This is not something most small businesses have. Therefore, they have to think smarter – not harder.

This is where the social networks come into play. The main reason is that it is essentially virtually free exposure.

The 2011 Social Media Marketing Industry Report, now in its third year of publication, surveyed more than 3,300 business marketers, of which nearly half were of the category of self-employed or small business. The results showed that during the three years of the report’s existence, using social medias for marketing purposes has gone from a niche idea to ‘we need to get on the bus’ to ‘this is the only marketing one needs.’ Now if I may backtrack slightly, one must understand that the variety of small businesses out there range from freight to personal care to international funding groups, so there’s quite a distance from A to Z. This in turn provides a way for the small businesses not only to generate exposure for their brand but to also stand out to a defined consumer base.

What social media networking and marketing has allowed small businesses to do is to put them out into the market with the “Big Boys” and be competitive on an equal playing field and succeed sometimes simply by tweeting something to the effect of, ‘hey, we are at First and Main…See you there.’

Another key factor to the success of this type of marketing and networking is the amount of time (quality time) spent cultivating an online presence, which can markedly improve brand awareness and organic ranking results. The 2011 Social Media Marketing Industry Report states that 58% of marketers are using social media for six hours or more each week and that an experienced social media user (three years or more of experience) spends upwards of ten hours devoted to social media marketing.

The same report goes on to note that those who spent at a minimum of six hours per week working the social media scene saw double the amount leads versus those who spend five hours or less. While certainly there are circumstances under which less time spent may concede equal or better results, nevertheless a commitment of six hours per week produces far better results.

The main and most important goals of social media networking is to increase the businesses exposure, more importantly increase brand awareness, and also increase web traffic and generate more (high quality) leads and conversions. The benefit of social networking is that it can allow small businesses to carve themselves out a piece of the proverbial action where they may not have been able to do so via traditional marketing methods. This is why it is worth the effort to invest in social media marketing, however small or large the effort one puts forth.

In fact, nearly two out of every three marketers surveyed from the 2011 Report indicated an increase in their search engine placement from their time spent on social marketing, which in this internet world is where all businesses what to be… first page of the search engines, top of the food chain.

The Point of Budgeting In Small Business

Too many small businesses operate without budgets. And many small businesses that do have budgets aren’t getting as much out of them as they could. We’ve seen it time and again.

It isn’t because the mechanics are difficult to manage. Everyone knows the basics of how budgets work: you track money coming in, you track money going out, and you do your best to plan for the future. In fact, the very simplicity of that formula is what leads some small-business owners to consider budgets not worth the trouble.

Therefore, what we’ll discuss here isn’t what budgeting entails, because if you don’t already know that, you can find it out with ease. We’re more interested in why you should budget in the first place. Our suggestion, to put it plainly, is that budgeting is a way to amplify the very creativity and adaptability that allow small businesses to thrive.

Budgets’ Reputation

You don’t become an entrepreneur because you have a burning love of spreadsheets. At least, not usually. Being an entrepreneur isn’t supposed to be about budgeting. It isn’t supposed to be about paging through endless columns of variable costs or putting caps on spending. It’s supposed to be about having the freedom to blend innovation and risk-taking with passion and expertise. It’s supposed to be about removing barriers, not building them.

That being the case, small-business owners often see budgets as antithetical to the very spirit of entrepreneurship. According to this perspective, budgets impose stifling limitations. They’re artifacts of mega-corporate culture devised by clammy-handed people in windowless rooms with poor lighting. They may be necessary evils for sprawling, inhuman conglomerates, but when it comes to organizations that rely on individual personalities and individual decision-making, budgets are more burdensome than helpful.

You might say the constraints imposed by budgeting make small businesses less nimble. Since nimbleness is one of their main advantages over larger rivals, budgets actually decrease small businesses’ ability to compete.

Or so the story goes.

Some of it is accurate. For instance, it’s true that passion and innovation go hand in hand with entrepreneurship. It’s true that small businesses should strive to leverage their size into a competitive advantage. And it’s true that budgeting for small businesses is much different from budgeting for colossal corporations.

What’s not true is that budgets impose constraints. Budgets don’t actually impose anything. They merely describe constraints that are already present. Perhaps more importantly, they describe a business’s ability to cope with and even manipulate constraints placed on it by forces internal and external.

Constraints and Entrepreneurial Creativity

If you’re an entrepreneur, you’re aware that your business doesn’t operate in a vacuum. It’s part of a staggeringly complex system. For instance, you have your relatively immediate concerns, such as your employees and your local government. You also have your relatively big-picture concerns, such as national debt and foreign trade policy. No matter what, when you start a small business you’re going to be hemmed in by laws, regulations, and unavoidable economic realities, all of which will have a major impact on how you operate.

In other words, no small business starts out in a position of unfettered freedom. The very conditions that allow small businesses to exist also impose a variety of constraints. Working capital, interest rates, the minimum wage, the minimum competitive salary for professional employees-there are countless factors that limit what you can do and how much money it takes to do it.

You can acknowledge the reality of these factors, but if you don’t have a budget, then you might not know the exact ways they’re affecting you. What particular constraints does a business in your industry have to deal with? Are there some that have a disproportionate impact on you because of the way your business functions? Can you make changes to reduce their impact? Are there constraints that you handle in an especially productive way? Can you turn this productivity into an advantage over your competitors? Do you approach some constraints the way everyone else does, even though you could be doing a better job with them?

These are the sort of questions a budget helps you answer. It doesn’t create limitations that weren’t there before. Rather, it gives you a way to assess the pre-existing limitations that every small business in your industry has to deal with. The more thorough your assessment of those limitations, the greater your ability to work within them, work around them, or in some cases, make them work for you.

Making limitations work for you is where entrepreneurial creativity comes into play. If you have enough details on your business’s limitations, then you’ll be better able to turn those limitations into innovations. A budget will help you marshal your creative energies and find the opportunities for profit embedded in the market’s constraints. It tells you exactly what assets you have to work with, and helps you map out how those assets can be put to the most productive use given the rules of the industry.

After all, most of the market-based constraints you experience will be shared by your competitors, who also have limited amounts of money and freedom. Which of you comes out on top won’t be determined by who has the fewest constraints, but by who does the best job of manipulating common constraints to find the possibilities they hide.

Speed, Spontaneity, and Profit

Small businesses, precisely because they’re small, tend to be better than their larger competitors at taking quick, decisive action. It’s one of their vital advantages. By the same token, it’s one of the challenges that all entrepreneurs are bound to face. You’ll be forced to react on a moment’s notice to emerging opportunities or perils in the market-that’s a given.

What’s less certain is the profitability of your reactions. Obviously, acting or adapting fast doesn’t do much good if it yields a loss.

So what information will you use to make your quick decisions? Do you have a detailed, practical breakdown of your business’s strengths and weaknesses? Do you know exactly how many resources you can afford to redeploy at a moment’s notice? Do you know how efficiently different aspects of your business tend to use the resources you devote to them? Are certain aspects of your business already strained? Are certain aspects flush with the potential for expansion?

A budget gives you a diagnostic readout of your organization. It tells you how much stress the business can handle and which areas can handle it. Hence, it helps you decide whether acting conservatively or aggressively in the short term will enhance your performance over the long term. Without a budget, you’ll be relying too much on guesswork, and many of your quick decisions may be needlessly risky.

Supply-chain Relationships

A budget not only helps you assess yourself, but also helps you assess your relationships with other entities, like vendors and subcontractors. This will be especially important when the market is in flux.

As you know, successful entrepreneurship entails evaluating the vast array of forces that constitutes the market and determining where-for someone in your industry, someone with your passion and expertise-the opportunities and roadblocks lie. But no one can predict with any certainty how the market will behave tomorrow. There will be surprises. Sudden chances and sudden setbacks.

We’ve already noted that the way you respond to these inevitable surprises will play a critical role in the profitability-or survival-of your business, and that your ability to make the right call at the right time will be drastically greater if you have a budget in place. This is not only because a budget tells you about your own resources, but also because a budget helps you deal with other organizations that affect you.

Let’s say you experience a sharp increase in demand for your product. It’s good news, but it brings up questions: Do you have enough working capital to provide your product to a large number of new customers/clients? What are the current resources of each division of your business? How many more resources does each division need if it’s going to ramp up its activities? How efficiently does each division tend to use its resources?

These are all internal questions that may well lead to others, such as: What do your vendor accounts look like? How much new inventory can you afford to purchase? What type of sales will you need if you’re going to pay off the new purchases on time? Can you afford to hire subcontractors to help with the push?

And, of equal or greater importance: What’s your plan for a downturn in demand? Will you find yourself in a precarious position with your vendors? Will you be able to keep promises to new customers? Will you be able to pay your subcontractors for the hours they’ve put in?

Indeed, budgeting can provide invaluable support for all your relationships. As noted on Inc.com, “your suppliers are in all likelihood mapping out their expectations for the year and you can help them do so by providing your outlook. As a best practice, you should share your budget and the variety of scenarios you might face to see whether they can handle each level of demand” (Field 2010).

Since your business is one element in a network of other businesses, it’s important for you to be able to communicate both your capacities and your expectations to the people you rely on. A budget serves as a tool for facilitating such communication. It gives you a concrete way of describing not only where you stand, but also where you will stand in a given scenario. Thus, it helps foster strong partnerships and avoid uncomfortable conversations.

This doesn’t mean sharing every detail of your budget, nor does it mean sharing some details with everyone. It simply means that guarding your budget like a state secret takes away some of its efficacy. You can use select portions of your budget to assist you in negotiating with critical partners-i.e., you can be prudent about the information you divulge without being obscure. How much do your current business partners know about your budget? Is it enough for them to understand your capacities and your needs?

The Bank

Speaking of business relationships: you don’t want to mess around with the bank. Plain and simple. This is a relationship that should be as friendly and open as possible. And what do bankers like? Budgets. As the American Bankers Association (ABA) says, “You are flying in the dark financially if you don’t have a budget for all income and expenses.”

Come to them without a budget, and bankers are going to feel like you’re wasting their time. They’re certainly not going to be interested in loaning you money (or more money). “Prepare for your financial review with your banker,” says ABA. “Have current inventories, cash flows and balance sheets ready.”

When your banker asks you how your debt is structured, and whether you have an imbalance between long- and short-term debt, what are you going answer? Trust us: if you show up to that meeting with a budget, you’ll be glad you did.

Flexibility

Just as the market’s unpredictability makes budgets useful, it also makes them fallible. A budget is like any plan: it will contain inaccurate predictions and require ongoing revision. That’s simply a condition of commerce; some academic models are predicated on entrepreneurs having perfect foresight, but we all know that’s not the case. Businesspeople, even the world’s most celebrated financial prognosticators, get it wrong sometimes.

That doesn’t render planning completely useless. Even if your plans don’t entirely match the way reality unfolds, they serve as benchmarks against which you can assess your progress. They record where you wanted to go, where you actually went, and why the two didn’t coincide. In that way, they indicate which areas of your business are performing well, and which need to be modified in order to meet next quarter’s goals.

When it comes to small-business planning, certainty is off the table. Nothing is guaranteed, including budgets. But setting expectations and monitoring progress remain indispensable to long-term survival. They help small-business owners analyze why they’re drifting off course, and also help them formulate corrective measures.

How do you see a budget? As a static report that turns old news into flimsy predictions? Or as a series of living documents that records how you adapt to change?

Personnel

Thorough budgeting calls for a great deal of effort, and many small-business owners can’t spare the necessary time or energy. Frankly, while the minutiae of budgeting are of interest to the entrepreneur, they are not the entrepreneur’s main job. If they were, then a good head for numbers and a background in financial analysis would be prerequisites for entrepreneurship. Yet plenty of small-business owners have succeeded without an affinity for mathematics or statistics. Entrepreneurs don’t all begin as certified public accountants.

That being the case, most small-business owners hire a bookkeeper. A bookkeeper collects and organizes your financial information, which, again, is time-consuming and requires close attention to detail. Too much time and too much attention for small-business owners to sacrifice. But even if you’re not involved with gathering and sorting your financial information, you needn’t remain aloof from it. To get the most benefit from budgeting, you’ll want to be accustomed to reading your financial statements and locating important data in your financial system. When you meet with your bookkeeper, are you talking about his or her methods? Is he or she showing you how your financial information is organized? Are you able to navigate your bookkeeping software on your own, so as to pull up specific pieces of data without your bookkeeper’s assistance?

Proper bookkeeping is important, but it rarely goes far enough in the analysis department. You’ll notice that the bulk of our discussion has revolved around using budgets to orient yourself in the market-i.e., using them to take advantage of opportunities and to minimize risks. That requires more than tabulating numbers; it requires interpreting them. It requires fitting your numbers into a larger picture.

Is there anyone in your organization besides you who (1) monitors your finances on the close-in, detailed level, and (2) relates the details of your finances to your big-picture performance? If not, chances are you’d benefit from a dedicated financial person. Someone whose duties involve painting a comprehensive picture of your financial universe-more comprehensive, that is, than the picture you’re able to paint on your own, simply because you have other things to do.

As with most aspects of running a small business, getting the most out of budgeting requires skillful delegation. If a budget is going to inform your decisions at major turning points, then it’s a good idea to have someone to consult with, someone who’s been looking at the same numbers as you while also looking at the same problems.

Takeaway

The value of a budget doesn’t rest on the accuracy of its predictions or the stringency of its cost-cutting. Instead, the value of a budget rests on how well it articulates your business’s financial strengths and weaknesses. A budget exists to help you balance risk against opportunity, to help you determine whether aggressive or conservative action is the right thing for the moment. It also exists to help you communicate with your business partners-to, in other words, cultivate healthy, mutually beneficial relationships with the organizations you rely on.

Above all, a budget exists to de-mystify, or express in concrete terms, the limitations imposed on your business by the market. Thorough budgeting, especially when undertaken with the right personnel, can enhance your creative initiatives and merge adaptability with profit. In short, budgeting is a way to sharpen, not blunt, a small business’s advantages.

Citations

American Bankers Association. Ten tips for small business owners during tough financial times. http://www.aba.com/Press+Room/PR_Small_Business_troubledtimestips.htm.

Field, Anne. 2010. How to budget and manage inventory for 2011. Inc. http://www.inc.com/guides/2010/10/how-to-budget-and-manage-inventory-for-2011.html.

What Small Business Owners Are Missing Out On By Not Having a Website

Small business owners seeking to make their business more profitable or stable need not overlook the benefits of creating a website. Websites for small businesses offer amazing new opportunities that are otherwise unavailable. We have put together a list of what you are missing out on my not having a website for your small business.

Gaining credibility on a larger scale – Small business owners may have established their credibility with their regular customers or within a radius of a few miles. If they wish to build more credibility and share their expertise with more people than ever before, establishing a website where they can provide this information through articles, blogs, and videos is a great way to do this.

Molding Identity – Maintaining a website is a great way for a business to effectively mold how they would like to be perceived by patrons and others in the industry. It allows a company to have more control over the information that is provided on them and to have a better look into what people are saying about them.

Housing their own community – Unless they’re a coffee shop, providing a place where customers can get together and offer advice and share ideas can be pretty tough to accomplish. Having a website for a business can provide a place for patrons to do this easily by offering chat space, instant messengers, and comment room for company blogs and articles. This proves to be important because it gets people discussing a company’s products and services.

Generating more leads – It can be difficult to generate leads as it is, but the web can make it a lot easier. When a business establishes a website, they then establish an incredibly effective way to build leads. There are some great ways to do this: developing a social media following, gaining blog followers, providing forms on the website to collect submitted information, and building successful email marketing campaigns.

Establishing more professional contacts – Networking with others in the industry is crucial to a company’s success. The ability to share information and ideas with other professionals and build a relationship with them is key to building a successful company. When a company has a website they are able to create more contacts quickly and easily by letting everyone know who they are.

Interaction with more customers – A company positively interacting with their customer is imperative to maintaining and gaining loyal patrons. Customers have the right and a want to feel connected on a personal level to the company they are spending their money with. Having a website where they can interact with a company easily and directly communicate with them lays the ground work for a great business. Tying social media accounts in with a website is suggested if a company wants to optimize their relationship with their customers. Social media sites like Facebook, Twitter, and LinkedIn have provided superb platforms for companies to take advantage of.

Internet Marketing For Small Business: 3 Ways To Increase Revenue

Internet marketing for small business is becoming more and more in demand. If you own a small business, then you must know that your company can increase revenue by having an internet marketing plan attached to it. Online advertising, if done right, will bring in significantly more sales than traditional advertising. Many people don’t fully understand the concept of how large their business can get using web marketing strategies. A company or individual can increase revenue by 6 or 7 figures a month for using what I am going to show you here. Here are 3 ways to boost your profits using the internet alone.

Search Engine Marketing

This, in my opinion, is the best way to get tons of targeted traffic to your company website. When using internet marketing for small business, advertising on search engines, like Google, Yahoo, and Bing, is key to learn. Just targeting one keyword or keyword phrase the right way, will bring you thousands of people to your business website everyday. (See Example)

Example: Lets say you have a local golf store located in Atlanta and you want to advertise online. You post pictures of your products, and market them on your website. So lets say you want to target the keyword “best golf clubs in Atlanta.” If you target this keyword phrase right, you will get tons traffic from people living around the North Georgia and Atlanta area. You will also make sales from people who never entered your store. There are many ways to advertise online, this is just one examples of how you can market anything using search engine marketing compared to just using traditional marketing.

There are free methods and paid methods of marketing to the search engines.

Free Methods:
This is search engine optimization or SEO. By knowing what keywords to target and how to target them, you can get tons of free automatic traffic of people looking for exactly what you have to offer. Google is the number 1 information site in the world, and the top 3 websites in the world. If you can get on the first 3 pages of Google alone, you have a profitable business.

Other ways to free search traffic: These are free strategies that will bring you more SEM traffic.
Article Marketing
Video Marketing (YouTube) (Others)
Press Releases
Social Bookmarking

Paid Methods:
There successful paid marketing methods that will bring tons of sales to your company. The first is PPC or “Pay Per Click” ads. You can Google AdWords and build an account. These are the ads found in the shaded area or to the sides of Google, Yahoo, and Bing. This is the most common method many marketers perform. You have to be careful with this, because if done wrong you will lose the shirt off your back. However, many online adversing companies or self-employed marketers get page one of Google, by only paying pennies for a keyword. This is something I can you can learn in a minute.

Content Advertising is another effective way to market your products or services online. This is where you place ads on websites that have to do with your company or products. You can also do this inside Google AdWords.

Blogging To The Bank

You might be thinking, “My company already has a blog!” that’s great, but how is it set up, and how much traffic are you getting? Are you using traditional marketing to get a mass amount of people, to your blog, who don’t care, or are you using internet marketing strategies to get target people who care about you and how you can solve their problem? Blogs are powerful, and this can increase revenue for your small business more than you can imagine. It’s not about just having a blog, but about the content as well. This also goes along with free advertising on the search engines. You can learn to optimize your blog and get free traffic. A blog needs to the heart of your web marketing campaign in your small business.

You can also put an opt-in form on your blog. Give away an incentive for people who subscribe to your newsletter. This is important, because you will have these leads forever. They may not buy from you right then, but putting them on your subscribers list is a good way to keep them your mind. Also updating them with coupons keeps will eventually bring new customers from that email list.

Social Networking Sites

If you’re going to use internet marketing for your small business, having a Facebook fan page is important. This will psychologically build relationships with people, much like your blog. Here, you can offer tips and free incentives to people just for being a fan. People go on Facebook at least 3 times a day. Updating messages there will keep them in touch with you. This is also a good way to bring leads. People may not buy your product right away, but getting them to become a fan on face is just like having them on an email list. You can update post on your fan page more than your blog, because people visit Facebook more than blogs.

To get people to your fan page, you can do several things. First you can put social widgets on your blog. When people find your blog from, lets say a search result on Google, you can have a Facebook, twitter, YouTube, and rss icons for people to join you. You can also advertise through Facebook’s paid advertising, and have a link to your fan page. I like the first way better.

These are just 3 of many ways to market your small business using the internet. There is more of a technical side to getting the pieces to fall in place for you. It is the learning curve that is hard to get past, and most people really never get past it. Internet marketing for small business is more in demand. If you are left behind still using traditional marketing strategies, than you are leaving millions on the table.