Content about Small business

LONG BEACH, Calif. — Brian Wallace, president/CEO of the Coin Laundry Association, was given a daunting task: to capture the audience’s attention during the final hour of a regional dry cleaning and laundry trade show in sunny Southern California.

But his task was no more challenging than one faced by every self-service laundry operator: to successfully market his or her store(s) in an environment where potential customers have access to information almost instantaneously and from a variety of sources.

On top of all the other “hats” that a laundry owner “wears”—customer service, maintenance, production, human resources, accounting—he or she can add one more hat to that mix: director of marketing, Wallace told attendees of Fabricare 2012.

“You work incredibly hard for your business, but the fact of the matter is things have changed. … We’re all trying to reinvent ourselves on the fly, trying to deal with the new marketplace. I think that trying to come to grips with some of the new marketing techniques is really an important part of that overall process.”

You may worry about not having the time and money to boost your laundry’s marketing profile, says Wallace, but you shouldn’t.

“What I’ve found exciting about social media, digital media, web, all these different things that have come along the last couple of years, these are almost all low-cost or no-cost opportunities.”

Thus, Wallace ran down a list of ways in which a laundry operator could promote his or her business today. Here are No. 6 through 10:

6. SEND AN E-MAIL NEWSLETTER

Use the e-mail addresses that you gathered from your contests [see Part 1] to update those customers with a newsletter about your business. It’s cheaper to distribute such newsletters via e-mail instead of printing and mailing them.

What should your newsletter include? Share print-to-click coupons, store news, and announcements of upcoming special events. Position yourself as a garment care expert by sharing laundry tips. Write a blog.

“What do people do today when they get a great coupon via e-mail?” Wallace asks. “Forward it to their friends and family. You used to mail a coupon. They had one coupon and one person redeemed it. What happens now? Maybe that coupon goes out to everybody on my e-mail list, all my friends on Facebook, anyone who follows me on Twitter. All of a sudden, this coupon that you sent to one regular customer just went out to maybe another couple hundred people.”

Wallace recommends keeping an e-newsletter short and easy to scan, designing it for the “preview pane,” creating a strong subject line, and selecting a reputable e-mail marketing service (Constant Contact, MailChimp, AWeber, etc.) to maintain and deliver your newsletter.

7. ADVERTISE WITH GOOGLE ADWORDS

Use “search advertising” to find customers when they’re in need of laundry services, says Wallace, and a high-profile method is advertising using Google AdWords. “We want to do everything we can to let people find us organically, but this is where we cover our bet. This is where we pay for placement.”

You create ads and choose keywords, which are words or phrases related to your laundry. When people search on Google using one of your keywords, your ad may appear next to the search results. Plus, you can set local parameters such as ZIP code and a radius search.

Google AdWords can be cost-effective, Wallace says, because you establish a budget for the campaign and control your ad spending. “The impressions are free; they can see that your results are there. You’re only paying if they click. There’s a process here, that you can view on your own, whereby you bid on certain search terms, and you’re paying per click.”

The amount you spend is entirely up to you, and there’s no minimum. Wallace used $25 per month as an example. When your ad has drawn the number of clicks that exhausts that budget, you have the option to end the campaign then for the month or to add funds to keep it going.

“What’s a regular customer going to spend with you in a year?” Wallace asks. “The average Laundromat customer is going to spend 500 bucks a year, probably closer to a thousand. … You can go the extra mile. There’s a cost associated with it, but it’s a low cost.”

8. INCENTIVES WITH FOURSQUARE AND GROUPON

The service called foursquare allows users to “check in” via a smart phone app or SMS. Users share their location with the public while collecting points and virtual badges

A business benefits from foursquare because the activity attracts new customers, rewards loyal customers, and provides another outlet for offering specials, mobile coupons, and prizes or discounts.

“It’s works well where people are going on a regular basis. … It’s the frequent flyer model. It’s the punch card from the sandwich shop. As the business owner, you give them different perks, different discounts, different things to attract, mobile coupons, and you’re rewarding them for being a regular customer. It’s the oldest idea in retail.”

Groupon is a “deal of the day” website that features discounted gift certificates offered for a limited time that a customer purchases online and then presents at the business. Groupon offers small businesses big exposure and measurable marketing, Wallace says; 91% of businesses report seeing new customers from their promotions.

But critics say the new business generated by a Groupon campaign is short-lived and doesn’t result in repeat customers.

“Among a lot of the small-business people I talk to, the jury is still out,” Wallace says. “It definitely generates leads. You get people that use the service. You’re basically asked to give about a 50% discount, splitting the other 50% with Groupon. But you’re getting people in the door.”

For example, a Laundromat sells $15 worth of laundry service for $7, or does 25 pounds of wash, dry and fold service for $20.

9. GET SOCIAL ON TWITTER

Twitter is the fastest-growing social network, with 300,000 people joining every day. Its users number 200 million, Wallace says.

The microblogging site enables users to send and read posts of up to 140 characters called “tweets.” Unregistered users can read tweets, while registered users can post tweets through the website, SMS, or a range of apps for mobile devices.

From a business perspective, Twitter is used for customer service, sharing immediate information, gathering real-time market feedback, generating leads, building customer relationships, marketing, and sharing coupons and discounts.

“It’s a great way to stay in communication, but it’s the same principle. It’s word of mouth. It’s peppering out information about your business and asking people to follow through on it.”

Wallace described a Laundromat owner based in Ohio who tweets that his machines are open or offers a free soda or box of soap to the first 10 customers to show up. “He said that every time he tweets during slow times, he gets customers.”

10. GETTING FOUND BY GPS

Increasingly, people are using the search functions of GPS units commonly found in today’s vehicles and smart phones to find local businesses. There are two main information providers—Navteq and Teleatlas—and businesses can register their sites for free with those companies, Wallace says.

“I’ve had members tell me that this is great, it’s like the best tip they got when we first shared this a year or so ago,” he says. “Is it going to revolutionize your business? No, but it may find you a few new customers.”

Whether you try out only one or two of these tips or all of them, it’s absolutely vital that you become more proactive in promoting your business, Wallace advises.

“A lot of this talk is about ‘grabbing the wheel,’” he says. “A lot of this is happening either with you or without you. As a small-business owner, I’m saying, ‘Grab the wheel.’ Have an impact on what’s happening with the way your business is being viewed online and through social media.”

Click here for Part 1!

WASHINGTON — Cash flow issues continue to plague a significant number of America’s small businesses, according to the results of a new survey by the National Small Business Association (NSBA).

Access to Capital Survey findings show that nearly half (43%) of small-business owners report that they needed funds at one point in the last four years and were unable to find any willing sources.

“Not only have small-business owners been unable to find new credit over the last four years, nearly a third had their existing credit slashed and one in 10 had their loans called in early,” says NSBA President and CEO Todd McCracken.

Among the small-business owners who reported some change to their credit, 60% stated that the reason given was the bank’s internal risk assessment. Fifteen percent said they were given no explanation for changes to their credit.

Only small community banks and credit unions received a majority overall positive rating among small businesses asked to rate various lending institutions.

More than one-quarter of respondents changed banking institutions in the last four years, most often due to feelings of mistreatment.

On a positive note, 19% stated they are more likely to seek investors as a result of the crowdfunding exception included in the recently passed JOBS Act.

“While small businesses’ ability to garner financing has broad implications on the U.S. economy, nearly one-third use personal property—such as their home—to secure financing,” says NSBA Chair Chris Holman, CEO of Michigan Business Network.com and president of The Greater Lansing Business Monthly. “The financing issues small-business owners face don’t end when they close up shop for the day.”

CHICAGO — Credit is the oil that lubricates the machinery of business. Whether it’s a loan to buy supplies, to support expansion, a capital purchase, or just the need for a short-term loan to meet payroll or other operating expenses, most coin-op laundry owners need to depend on credit at some point. Unfortunately, the upheaval in today’s economy has resulted in a credit crunch that seems to have made it tougher than ever for business owners to swing a loan.

Still, for those in the know, there are enough options available to make the task a little easier. Money may be tight, but business loans are being made every day to those who know how to ask.

What Happens When the Bank Says No?

When your best efforts fall on deaf ears at your local banks, all is not lost. Here are some alternate sources of business financing that may meet your needs:

State Government Programs — Most states have loan programs designed to provide small-business financing. Some of these programs provide loans at lower-than-market interest rates, provided the business will create jobs in the state.

Some states have collaborated with local banks in lending arrangements designed to attract, retain and expand businesses. Typical of these is a partnership between the State of Ohio and Huntington Bank. Known as the Ohio Huntington Business Loan Program, it has provided more than 2,000 small and medium-size Ohio businesses with loans totaling $465 million.

For information on small-business financing programs in your state, contact the office of your state representative or state senator.

Federal Government Programs — The federal government also has loan programs available to assist small-business owners. The most popular of these is the Small Business Administration’s guaranteed loan program that guarantees as much as 80% of the loan principal. This program gives your bank an incentive to lend to a borrower who does not otherwise meet the bank’s lending guidelines.

Among other SBA loan programs available to small-business owners is the 504 loan. Established in 1980, the 504 Loan Program provides long-term, fixed-rate financing for major fixed assets, such as real estate, facilities construction or expansion, or other fixed-asset needs.

If you decide to seek an SBA loan, your best bet is to work through a certified or preferred lender. The SBA’s guaranteed loan process is rather complex, so you want a lender who has experience working with them. To find certified or preferred lenders, visit the SBA website or call your local SBA office for guidance.

The SBA has local and regional offices in every state. You’ll find their phone number in the federal government section of your local phone directory. For detailed information on all SBA programs, log on to sba.gov.

Small-Business Investment Companies (SBICs) — SBICs are private investment firms licensed by the SBA to provide investment financing and long-term loans to small businesses. Some SBICs make only equity loans, others provide debt loans, and some provide both. As a rule, SBICs will require the same level of collateral and credit ratings as banks.

For information on how to contact an SBIC, check with your local SBA office or log on to sba.gov/inv.

Local Economic Development Organizations — Your local Chamber of Commerce or other business group may have some revolving loan funds available to businesses specific to your community. Generally, these funds come from local resources and have specific guidelines for their use.

Begin by contacting the director of your local Chamber of Commerce to see what help might be available for the specific purpose you have in mind.

Angel Investors — When conventional financing options seem out of reach, many business owners have had success seeking out individuals or commercial lenders willing to invest in a business expansion, with either debt financing or by taking an equity position in the business. When you find an “angel” investor, you’ll probably find that this option is more flexible than a bank loan or government program.

If you don’t know anyone with the economic firepower to fund your loan, don’t give up. There is an entire industry of professional investors looking for opportunities to invest in growing businesses. For more information on how to match up with an investor who might be interested in your situation, log on to entrepreneur.com/article/52742.

Keep in mind, though, that unless you’re willing to give up an equity position in your business, working with a professional investor is not for you.

When All Else Fails

Depending on the size and economic health of your business, the only source of expansion money available to you may be what you can dig up on your own. Be advised, however, that each of these money sources carries special risks.

Friends and Family Members — If you have a friend or family member able to help finance your growth, you may find this to be the easiest type of loan to obtain.

But use caution. Most financial experts agree that mixing business and personal relationships can lead to destructive problems in both your business and personal life. If you do take a loan from a friend or family member, make sure that all details are carefully spelled out in a written contract.

Credit Card Financing — If your needs are modest, you may have credit cards with lines of credit substantial enough to fund all or part of your financing needs. While it can be tempting to simply charge everything, this is arguably the riskiest and least desirable of all financing methods. The burdensome interest rates charged by credit card issuers these days can become impossible to meet if your business hits even a minor bump in the road. The result could be a severely damaged credit rating — or even the loss of your business.

When you need to raise money for your business, say most experts, a thorough and detailed business plan is the key to the safest and most desirable types of financing. While other than conventional sources of money may seem the easiest to find, they are seldom the wisest choice.

WASHINGTON — Small businesses have a new source of financing backed by the U.S. Small Business Administration (SBA). The administration has funded 20 community organizations to enable them to start making loans up to $200,000 to qualifying small businesses.

Authorized under the Small Business Jobs Act of 2010, the new Intermediary Lending Pilot Program (ILP) will provide direct loans up to $1 million to 20 community organizations or intermediaries in fiscal year 2011, which in turn will use those funds to help finance small businesses, mostly in underserved markets.

Designed to expand access to capital to small businesses and drive economic growth and job creation, the program will fund 20 additional community lenders in fiscal year 2012. The program has an additional year of authority after that, subject to appropriation by the U.S. Congress.

“The Intermediary Lending Program is an important new tool to support businesses in underserved markets,” says SBA Deputy Administrator Marie Johns. “Partnering with community lenders will increase points of access to capital for startups and businesses that have been disproportionately affected by the recession.”

One goal of the pilot program over the next two to three years is to assess the intermediary model as an effective tool for increasing lower-dollar lending to small businesses and startups, particularly those in traditionally underserved communities.

Click here for more information about the ILP program.

WASHINGTON — As part of the U.S. Small Business Administration’s (SBA) mission to ensure that small-business owners have access to accurate, timely and helpful information, a newly redesigned website has recently been unveiled, featuring the launch of SBA Direct, a tool with a variety of personalization features designed to help with business startup and growth.