Taking Your Small Business Global – Benefits and Pitfalls

The African American Chamber of Commerce of Western Pennsylvania represents over 500 owners of minority and supporting businesses. While most are active only in the United States, Chamber president and CEO Doris Carson Williams does, nevertheless, get her share of requests for assistance from members seeking growth beyond national borders. That is one reason for her recent week-long business opportunities group tour of China, meeting with key officials and entrepreneurs.

China: the International Trade Mecca

According to Export.gov, “… a total of 30,394 U.S. firms … exported merchandise to China …” Better still, the International Trade Administration’s Small & Medium-Sized Exporting Companies: Statistical Overview, 2008 notes that “… SME’s merchandise exports to China [were] … higher than the SME share of overall U.S. merchandise exports ,,,.”

A chart from the U.S. Office of Trade and Industry Information, shown here, pegs the total dollar amount exported to China by SME’s for 2014 at $69.6 billion. The figure has ballooned to more than three times the 2007 figure..

Pitfalls for Small Business in the Global Economy

For Dennis Unkovic, partner with law firm Meyer Unkovic & Scott, doing business on a global scale is routine by now, but always exciting. A substantial amount of his practice involves Pacific Rim countries and India. His vote for the prime sin of omission by small businesses is failure to secure an international letter of credit BEFORE buying and selling abroad. “They forget to secure it [the letter of credit] ,” says Unkovic, “and it is the main way to guarantee your payments” internationally.

Small businesses also need to line up “… a bank that has a good working relationship with a bank or banks in the countries” in which those businesses plan to buy, sell or both. With those relationships in place, Mr. Unkovic notes that a firm’s confirmed letter of credit will best insure timely payment, and in some cases, any payment at all. For instances in which a businessperson needs to sue a foreign client, “you need to be aware in advance that international contract disputes are settled by arbitration, not in the courts.”

International Business for Small Businesses: More Crucial Things to Know

Carl Knoblock, district director of the Small Business Administration’s Pittsburgh office, suggests that small business owners be aware of several issues in going global. These issues, Knoblock says, include: being sure to immerse yourself as much as possible in the culture(s) of the markets into which you plan to sell; making your Web site multilingual and at least beginning to get your workforce to think and act globally BEFORE landing in country X . Knoblock believes that two often overlooked information sources are foreign students attending American universities or the universities themselves, which often have foreign campuses or strong relationships with universities in other countries.

Accounting and financial issues should also be reviewed. Daniel Phillips is a CPA and shareholder with Schneider Downs & Co., an accounting firm with offices in Pittsburgh PA and Columbus OH. Phillips boasts extensive international tax planning and compliance experience. Keeping up with often bewildering array of tax issues in international trade, says Phillips, is a job best entrusted with one’s accounting firm.

Schneider Downs and other firms can and often do belong to associations such as IGAF Worldwide, that have one or more member firms in the major trading countries, Phillips notes. This type of association gives member firms a longer reach that crosses borders. Those on-site firms can prepare some of the tax forms for a foreign trading firm themselves and keep track of changes in the accounting rules in their countries. Taxes are also obviously a major issue. Many countries, he noted, have some version of a VAT (value added tax) in place. Should a small business enter one of those markets without being aware of the VAT, the additional costs/expenses can be significant.

What Role Will Small Business Play in Global Business Going Forward?

The United States chalked up export revenue of $1.15 trillion in 2017, based on data crunched by NationMaster.com. The number of small businesses involved and the total revenue in play have so far done nothing but increase.

However, the State of World Tradereport from the U.S. Chamber of Commerce notes that “according to the [World Trade Organization], there are 262 free trade agreements in force around the globe … but the United States has FTAs with just 17 countries. There are more than 100 bilateral and regional trade agreements currently under negotiation …while … the United States is participating in just one …..”

Overall, a mixed bag of successes and dangers. The bottom line for small firms beginning global operations would seem to be: do as much homework, gather as much information and as many information sources as possible, work you bank(s) and their international partners up front, and check for all of the business-saving international documents that you will or may need.

Getting a Small Business Licence in the US

Several individuals start off their own little business every year in the US and a major concern in this direction is acquiring a small business licence. There are many important steps to follow when one gets down to starting a small business. Licences, registration, taxes, state laws – these are the basics that one has to know about. But getting a small business licence is like getting a pass key to trade.

What is a Business Licence?

A business licence is a certificate that provides a person the right to carry out trade or business operations in a certain state. It is imperative to have a licence before starting the operations.

An entrepreneur.com article titled “Business License” states that a business licence is basically a legal document that provides a person the right to operate a business in his or her city. Also, as per this article, not just a business licence, other certificates and licences also have to be acquired in accordance to the prescribed business norms for a particular trade.

 Licence Requirements

Small businesses often require certain specific licences that an individual has to acquire from the authorised sources. As per a sba.gov article titled, “Get Licenses and Permits,” a state business license is one of the chief documents that are needed for tax purposes and for proper functioning of other business activities. It has been mentioned that many states have put up small business assistance agencies that can help entrepreneurs to obtain their licence and also guide them regarding other state business norms.

Certain state licensing norms are specific to the product being sold. For instance, small businesses dealing in items like lottery tickets, liquor, gasoline or firearms; need to obtain special small business licences from the state to sell these items.

Hazards of Not Having a Small Business Licence

Not having a business licence can strike right at the foundation of a business plan. In the entrepreneur.com article, it stated that if someone fails to comply with licensing norms and permit acquisition for a particular business, it could lead to penalty payments and operational restrictions amid other issues. These restrictions are lifted only when the prescribed conditions set out by the authorised body are fulfilled.

Besides these issues, there are other problems too. In a homebusinesscenter.com article titled “How to Get a Business License” it was pointed out that not having a business licence can lead to problems like inability to start a new business location and adding items, services or structures. In addition, a location can also be shut down if it is found out that the business owner has not complied with the licensing norms.

Validity of Business Licences

Many people think that a small business licence or legal paperwork of any kind is a way that the government can claim more money from people. But these are essential steps to safeguard public interest.

The entrepreneur.com article states that many of these programs are carried out to protect the common people. To regulate these norms, licence bureaus are set up in many cities, and they keep a vigilant eye on the various trading locations.

Sometimes people complain that obtaining a small business licence and associated permits is a difficult process. A businessman has to go around pursuing various government officials and departments. Also, the amount of paperwork gets cumbersome and confusing at times.

However, there is a solution to this issue if the proper source is found. As the homebusinesscenter.com article stated, one can avoid these problems by using a proper online system for business licences. All that’s needed is a minimal fee for the services provided.

Do-It-Yourself PR for Small Businesses: Get Business Exposure By Becoming a PR Guru

While advertising usually costs time and money, public relations, or PR, costs time and effort. By building relationships with the local community and journalists, business owners can get exposure for their business, products and services. PR for small businesses also helps build credibility and influences customers.

Aside from customers, any interaction with the public is considered public relations, including journalists, bloggers, local charities, celebrities, Twitterers and even vendors. Here are a few ways to use PR to promote a small business.

PR Prose: Writing Press Releases

Have a new product? Won an award? Those are great reasons to write a press release. A press release is a way to let journalists and reporters know about what’s happening with a local business. Generally, press releases follow a template:

  • Lead in (the who, what, when, where, how and why)
  • Quote from someone (normally the business owner)
  • More details about the event, product or item being highlighted
  • Boilerplate (this is the one-minute elevator speech about the business producing the press release)

Do-It-Yourself PR: Hold a Media Event

Expanding the business? Opening a new facility? Testing out a new product? If there is something major happening that would benefit multiple members of the media, then a media event is in order. It’s important to note that media events are seldom used and when they are, it’s for a major announcement. For example, a new sports stadium was recently opened. To create buzz and newsworthiness, a rock band that would hold the first concert in the stadium, the owner of the stadium’s home sports team and the person in charge of overseeing construction of the stadium were all present. The photo opportunities and free concert made the event one of a kind.

PR for Small Businesses: Pitch Local Media

By writing a pitch letter (essentially a letter introducing a potential news story to a journalist), business owners can get the town newspaper to write a story about their company. Another option is writing a press release or just calling a reporter and introducing the company, product or service being promoted. Helping reporters understand a business’ service, product or mission is key. PR for small businesses is all about building relationships.

Get Involved with the Community

Sponsor the local baseball team, hold a fundraiser or join forces with other local companies for a good cause. Community events and charity work help give small businesses a way to give back. Plus, it shows another side to the business, a caring, giving side. Giving back to the community and local charities helps businesses connect to the community and their customers.

Social Media

From Twitter and Facebook to MySpace and Ning, there are hundreds of different social networks and ways to connect with the public. Learn a few tips to get started. Social media isn’t difficult to understand, but it can be overwhelming since there are so many options. Get involved, learn and gradually progress with social media. It’s a great way to gain exposure while also interacting with customers, journalists and other community members.

PR is a matter of building a network and leveraging that group to get exposure for a business. Getting started is easy. Just devote some time and energy to reap the rewards.

Starting a Small Business in a Tough Economy: The Impact of Today’s Economy on Start-Ups

Many entrepreneurs are hesitant to begin a business until the economy stabilizes. Others want to continue with business as usual, but aren’t sure whether it is possible to get the money they need to fund a start-up. Banking expert Thomas Woolway recently answered a few questions about banking and small businesses in the current economy that can help these potential small business owners make a decision.

Has Credit for Small Businesses Really Dried Up?

This question requires a two-part answer. First, in today’s current environment, certain banks have cut-back or completely stopped their lending activities because they have encountered problems with their existing loan portfolios. These actions have contributed to the general feeling that “credit has dried up.” By turning off the lending faucet due to their own problems, these banks are giving the public the impression that credit is tight and it is tough to get a loan. By the same token, there are many banks that have a clean loan portfolio and as are quite active in the lending arena.

The second part of the answer, then, is focused on the small businesses themselves. If a small business is creditworthy there are banks out there that are interested in lending them money. A small business owner has to demonstrate to the bank that they are creditworthy. They need to show to the bank that they have the ability to generate sufficient cash flow to service the requested debt. There needs to be strong primary and secondary sources of repayment. The small business owner has to expect that they will be required to personally guarantee the loan. Assuming the small business qualifies for a loan, there is money available even in these difficult economic times.

Should an Entrepreneur Who Is Starting a Business Now Do Anything Different?

The sector of the business community that has been hit the hardest by this economic downturn has been the retail sector. Almost all businesses that sell directly to the general public are having significant financial difficulties. It is expected that these difficult times will continue for at least another 9 to 12 months. As such, if an entrepreneur is planning to start a retail business now they should make sure that they really want to start the business now as opposed to waiting 12 to 18 months.

If they still want to go forward with the business at this time, they should make sure they have a significant cash reserve available to support the business during this time period. No matter how much time they spend on developing projections, the actual business will likely require more cash to survive than the owner ever expected. Remember that “Cash is King” and once a business runs out of cash it is essentially dead.

Right now, retail businesses are facing a drastic reduction in sales. Obviously, with reduced sales there is less money to pay expenses. For most businesses, there is a significant capital outlay to get a business up and running. If a business owner goes through the effort and expense of getting a business open at this time, they must be aware that they are not likely going to be able to recoup this capital anytime soon.

Do You Have Any Tips for People Who Want to Start a Business in a Bad Economy?

For those that want to start a business now in this economic environment my best advice is to make sure you do your homework and develop a detailed business plan. This exercise will force you to examine all aspects of the new business so that you will eliminate as many surprises as possible. In today’s environment, one mistake can ruin a business.

Try to avoid making mistakes. It might be worthwhile to talk to other business owners who are in that business/industry. Learn from them, as to what works and what does not work. Finally, be prepared to work hard. You will have to spend long hours working the business in order to make it succeed. It is your business – no one else is going to do the hard work for you.

Make a Small Business Family Friendly: Ideas for Attracting Parents to a Business

For most parents of small children, shopping can be a hectic and exasperating experience, especially when the adults need to compare several items to decide which is the best option for them. Some well known big companies have capitalized on the need for parents to shop without distractions by offering full scale child play areas. While few small businesses have a big enough budget to follow suit, there are a few less expensive options that can help them capitalize on a neglected market – parents with kids that hate to shop.

Now Showing

Setting up a movie corner is as easy as gathering together a few comfy child-sized chairs, a DVD player, a television set and a stack of DVDs that would appeal to young children. Make sure that any DVDs you choose are “G” rated to avoid upsetting parents who don’t want to spend their evenings dealing with movie nightmares.

Choosing DVDs that are in the public domain is a smart idea for businesses that want to play it safe, since some movie companies may consider a DVD that is playing in a public area as an illegal showing of their movies. A searchable listing of public domain movies is available through the Public-Domain Movie Database.

Coloring Corner

Set up a child-sized table and chairs, a small bucket of crayons and a few coloring books branded with the company name and phone number. This gives children an area to color in while their parents are shopping and allows the business to advertise to anyone who sees the coloring books after the children take them home.

To avoid a lot of mess and clean up in the coloring corner, don’t put out too many coloring books or crayons at one time. Some children will scribble on one page in every book on the table. Others will decide to upend the crayon bucket all over an aisle floor.

Set Up a Play Area

For companies that have a spare space with plenty of windows that look into the building, a little play area can be a great idea. Talk to the local child care licensing agency to find out what the legal ramifications of a play area are. Anyone who staffs the play area may need to be trained, fingerprinted and licensed.

If a separate play room is too much for the business to handle, set up a shelving unit or large basket in a corner of the store filled with books, puzzles and child safe toys.

Small Businesses can Save Electricity at Work to Save Money

While most people concentrate on saving electricity at home, business owners need to focus on saving electricity at work.

Electricity runs through your business 24 hours a day, seven days a week. How many hours do you and your employees spend at work? If, like most businesses, 40-60 hours per week are spent in the building. Usually off hours or weekends are used for cleaning crews. If you deduct the usual 60 hours the building is occupied from a weeks worth of total hours which of 168, you are wasting electricity in an empty building for 108 hours per week.

Cut back

One of the first things to do to save electricity is monitor the usage when the building is occupied. You can do a few subtle things such as removing every other light bulb in non productive areas, like hallways or restrooms. But, remember not to compromise security, such as lighting in parking lots, these need to be kept well lit. If your building has separate offices, install switches that will turn off the power to the office outlets, or use power strips that can be shut off. It is important that computers and printers are all shut down at the end of each day. You can also install motion detectors which shut off lights when movement is not detected in a room. Look into using LED lighting, it is more economical than conventional lighting.

 Timers

Don’t underestimate the value of using timers in your building. By installing timers on electrical appliances such as soda machines, water coolers, and anything that is only used during working hours, you can make sure they will power off during closed hours. It is interesting to understand that if you put a timer on a refrigerator or soda machine that is set to go off two hours before you close and on two hours before you open your office in the morning, you will save 14 hours of electricity to that appliance, and still keep the items cold. Check with the manufacturer’s instructions or an electrician before you install timers to make sure you will not void the warranty, or cause an onboard computer to reset when it powers up.

Water Heaters, Furnaces, and Air Conditioners

It is important not to heat or cool areas that do not need to be climate regulated. These areas are usually non occupied areas such as basements or storage areas. In winter, you need to make sure water pipes are not in danger of freezing in unheated areas of the building. These pipes can be wrapped in a heating wrap or insulation. In hot weather, vent fans may be more economical in storage areas than air conditioning.

Remember that your building is empty more than it is used during a 24 hour period. Use timers to control healing and air conditioning. Have a timer installed on hot water heaters to turn them off during the night.

Hire a Professional

Be sure to hire a professional to audit and modify your current electrical system. They can give you suggestions on how to save money.

Building Sound Business Foundations Aids Small Business Success, Says Patrick Mackaronis

The following is a guest post to Hotel Merano from Patrick Mackaronis. Pat is the Director of Business Development for New York City-based social network Brabble. In this post, he explains how developing solid business foundations can assist in aiding small businesses in reaching great success.

Small businesses that survive beyond their initial start up phase and become successful businesses with inbuilt sustainability, are generally those which set about building sound business foundations, from day one.

Those that don’t survive their initial start up phase usually fail as a consequence of commiting one or more deadly business sins such as;

  • Financial mis-management,
  • Proceeding with inadequate business management skills,
  • Poor record keeping,
  • Sales and marketing mis-adventures,
  • Critical recruitment mistakes,
  • Unwillingness to seek independant professional advice where clearly desirable, and
  • Personal well being affecting the business owner’s ability to act as the key driver of the business.

Avoid Financial Mis-Management at all Costs

If you are not an accountant, and you plan to develop and operate a small business, one of the first things you should do is set up a business relationship with a good local accountant. This accountant should have sound experience in assisting local small businesses to properly structure their financial systems and financial reporting mechanisms.

Equip Yourself with Adequate Business Management Skills

If you own and operate a small business and you do not have well developed business management skills, the lack of such critical skills will affect your chances of success. You can easily learn business management skills, and ample resources exist to assist the owners of small businesses to upgrade their skills in this area.

Records Management Systems are Critical

At the very least, from day one, a business owner should;

  • Know exactly what records need to be created, kept, and the storage duration required by law,
  • Understand the importance of safe, secure and well organised storage and provide for same,
  • Implement systems to ensure that policies and procedures relating to records management are followed by all, and
  • Provide for back up copies for all critical records.

Sales and Marketing Strategies Impose Discipline

A well thought out and very clear sales and marketing strategy is required to prevent negative cash flows caused by ill-considered and costly marketing and advertising campaigns that fail to deliver anywhere near the sales revenue anticipated.

Proceeding to commit funds to such activities, without the support of a definitive strategy, is a well trodden path to business failure, one that should be avoided at all costs. A strategy provides the necessary discipline to prevent costly mistakes.

Choose the First Employees Wisely

Initial hiring decisions are often the cause of a lot of subsequent pain for a start up business. Often expediency rules and little thought is given to the core essentials such as;

  • Formalising roles with role statements, position descriptions and selection criteria,
  • A structured recruitment and selection process that satisfies all legal requirements,
  • Formal letters of offer of employment containing all agreed terms and conditions,
  • Ensuring that the business cash flow can actually support full time employees plus their considerable overheads,
  • Recruiting the skills required by the business right now, rather than recruiting people with skills that may be helpful in the future but come at a high cost for little return in the short term, and
  • The capability of those employed, to grow with the business and become part of the desired business culture.

Utilise the Services of Professional Business Advisors and Management Consultants

The services of business advisors, management consultants, legal advisors and financial advisors can be the difference between success or failure for a small business, especially where the owner is not completely competent in all aspects of operating a business.

A general attitude of many small businesses in their start up phase is that they cannot afford to engage the services of professional advisors and business consultants. The reality is, that few can afford not to engage such professionals, as it is the providers of these professional services who can ensure the correct alignment of the business objectives with the resources available to the business and also validate that the business is operating within the relevant legal constraints.

Looking After Number One

In the start up phase of any business, the business owner is a critical resource. It is therefore beholden upon the business owner to ensure that they are initially fit for the journey ahead, and that they institute a plan to ensure that they do not burn out before the business has a chance of achieving business success. These actions will ensure that the owner remains part of the business foundations and can contribute effectively towards the business building process and the creation of long term sustainability in business operations.

Key Elements of Building a Sound Business Foundation

The key elements involved in building a sound business foundation to aid in future business success are;

  • Utilising the services of an accountant as a key business partner,
  • Ensuring that the management skills of the business owner are adequate,
  • Identifying record keeping requirements and implementing a complying records management system,
  • Introducing the discipline of a sales and marketing strategy,
  • Formalising selection and recruitment policies and processes,
  • Investing in the services of professional business advisors and/or management consultants, and
  • Ensuring the ongoing health and well being of the business owner.

By making sure that each of these elements are key components of the business foundations, the chances of being a business owner who successfully negotiates the start up phase, and then goes on to reap the benefits of owning and operating a sustainable and profitable business, are greatly increased.

Amber Grant – Up to $1000 for Women for Small Business Financing

Readers on the Internet are inundated with ads for free grants. The idea is appealing; getting a grant is “free money” and receiving this cash can help small business owners to launch a new company or strengthen and expand an existing one. How can readers figure out the difference between a grant scam and a legitimate grant program? Throughout this series of articles readers can learn about free grants for women, small business financing, and how to find grants for small business that are real. Read on to learn about the Amber Grant, which awards amounts between $500 and $1000 four times per year.

Free Grants for Women

Started in 1998, the Amber Grant program is designed to help female entrepreneurs to start new businesses, expand existing companies, or upgrade equipment and services. At $500 to $1000 these free grants for women won’t make a huge difference for female owners of companies, but the money is enough to help with small business financing and to give women owners a boost.

Finding Free Money for Small Business Financing

Many free business grant programs involve extremely complicated applications, requiring over one hundred pages in the application, including a business plan, letters of reference, financial statements, and more. The Amber Grant is different, fortunately. The application is simple, and applying for this source of free money for small business financing involves a simple web form. The application can be completed in under an hour, and if the applicant wins, that is quite a return on time invested.

How to Apply for the Amber Grant

To apply for the Amber Grant, female entrepreneurs need to meet a few basic requirements:

  • Age: must be 18 or older
  • Newsletter: automatically subscribed to the Women’s Net newsletter when submitting the application

The entire application process can be completed online for this grant for female business owners. A few important tips:

  • Don’t rush when applying for small business financing. Write a first draft of the application answers and wait a day or so. Return to the application and proofread.
  • Be specific when applying for this grant for women. Give exact timelines for business goals.
  • Be truthful. Don’t try to claim to have experiences or credentials that aren’t real.
  • Don’t sit around waiting for an answer. Move on to the next grant for small business owners.

The Amber Grant is given four times per year, and applicants must reapply for each new quarter’s awards; applications from one grant period to the next are not saved. That’s four times per year to have a chance at a $500 or $1000 award that can help felame owners launch or build a new small business.

As with any venture, search for new grant and funding opportunities from information found in print and online. To learn more about other grants for women, please continue reading.