The State Of The Small Business Community

February 3, 2016 by

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Taxes Due are just around the corner and  tax breaks, deductions and the cost of doing business are, if done properly a financial break to your business. You should take advantage of those deductions by talking to an accountant that knows your business well. An accountant is one of the people around your business that you should be very acquainted with, and your business should be of importance to them.  Getting the best advice — if not cheaply- can be to your advantage.

Follow the links for more news about this and other topics.

The Top 6 Small-Business Trends on the Rise

Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »

2016 is a promising year for small business owners and entrepreneurs. The development of modern business technology gives small businesses the opportunity to develop low-cost, enterprise-quality products and services.

Social media, Internet marketing and ecommerce empower your business to reach potential customers in untapped markets all over the world. Staying informed on the latest trends in small business is crucial to maintaining relevance in the ever-evolving world of commerce.

Here are six small business trends you should be aware of in 2016.

1. Millennials

With its oldest members now entering their early 30s, the millennial generation is reinventing the way businesses manage the workplace and its employees. A report published by the U.S. Chamber of Commerce Foundation describes the social and economic impact posed by the people born between 1982 and 1999.

Small business hiring rebounds, despite rough 2016 start

Despite the worst January for the stock market since 2009, plummeting oil prices and concerns about an economic slowdown in China, U.S. small business hiring bounced last month, according to the Paychex-IHS Small Business Jobs Index.

The index, released Tuesday, rebounded 0.28 percent to 100.65 from December, matching the highest rate of small business hiring since May and offsetting the growth-rate declines of 2015. A reading above 100 indicates growth.

Marty Mucci, president and CEO at Paychex, said there was “nice growth” across the U.S., adding “most regions and states saw a bump up.”

Texas lost 0.47 percent to cede first place among states to Washington, with the impact of depressed lower oil prices taking their toll. Despite a 1.28 percent drop in January, Dallas maintained its top ranking among metropolitan areas for the 16th consecutive month.

Small business bill one step closer to passing

Small businesses are one step closer to having a say at the table of the Securities and Exchange Commission, or as it is more commonly known as, the SEC.

Monday the House of Representative passed the SEC small business advocate Act of 2015.

The bill was introduced by Delaware Congressman John Carney.

If successful, the bill would establish an office of the Advocate for Small Business Capital Formation and formalize a Small Business Advisory Committee.

Essentially what that means is it would offer a clear avenue of communication to SEC leadership on issues affecting small businesses by having a designated representative to advocate their needs.

Top 20 Tax Deductions for Small Business

On Wall Street, there’s a saying that past performance is no guarantee of future results. When it comes to taxes, however, past performance is a great indicator of the types of deductions that businesses typically take each year.

Last winter the IRS released data on Schedule C filers. Here are some of the most popular tax deductions for small business that were claimed by sole proprietors as determined by the dollar amounts, starting with the largest category. The same types of deductions can be claimed by other entities — C corporations, S corporations, partnerships, and limited liability companies (LLCs) (although there may be slightly different rules for some deductions). See which of these tax deductions for small business apply for your 2015 tax return.

Top Tax Deductions for Small Business

Car and Truck Expenses

Most small businesses use a vehicle, such as a car, light truck or van. The cost of operating the vehicle for business is deductible only if there are required records to prove business usage. In deducting costs, the need to keep records of cost (e.g., gasoline, oil changes) is eliminated if you rely on the IRS standard mileage rate of 57.5 cents per mile in 2015 instead of deducting your actual outlays.

Salaries and Wages

While payments that sole proprietors, partners, and LLC members taken from the business are not salaries (they are nondeductible draws), payments to employees are deductible.

Cyber Security: Keeping Your Small Business Safe

These days, the only way to successfully run a small business is to be connected, and we do pretty much everything digitally. This means that we are using a number of devices in small businesses, and a lot of sensitive information is being stored on these devices. Is your sensitive information safe from hackers? Because they don’t always have a lot of money to invest in sophisticated security software, criminals are targeting more and more small businesses. They know that security is minimal, and that they can steal money, information, and more. Here are some tips you can use to improve cyber security for your small business.

    • Identify All Sensitive Data – It is important that you identify each and every piece of company data that is sensitive. This includes any financial records, employee records, consumer information, etc. You need to know exactly where this information is stored on all devices and severs, and that you have the proper protection in place to keep all of your data safe.
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Ohio’s Economy

January 27, 2016 by

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At the beginning of 2016, and even at the end of 2015, the global market has lost trillion of dollars, and the end of it doesn’t seem to be near.  The U.S economy and Ohio’s economy cannot do better than what is happening globally.  It is not surprising then to know that the unemployment rate increased in December of 2015, and with the quarter of a percent increase in interest rates, small business owners are a bit hesitant about hiring new employees, and have the challenge of meeting payroll month after month.

For more news about this and other topics, follow the links below.

Ohio jobless rate climbs to 4.7% in December

Ohio’s unemployment rate ended 2015 by going in the wrong direction.

The state reported on Friday, Jan. 22, that the jobless rate rose to 4.7% in December from 4.5% in November.

Nonagricultural wage and salary employment increased 15,200 over the month, to 5,451,500 in December from a revised 5,436,300 in November, according to data from the Ohio Department of Job and Family Services.

However, the number of workers unemployed in Ohio in December was 269,000, up 14,000 from 255,000 in November. The number of unemployed has decreased by 23,000 in the past 12 months from 292,000, the state said. A year ago, in December 2014, Ohio’s unemployment rate was 5.1%

Goods-producing industries, at 900,000, added 3,500 jobs over the month, as job gains in manufacturing (+3,200) and construction (+500) outweighed job losses in mining and logging (-200).

Ohio ranks in bottom third nationally for financial stability of residents: CFED Scorecard

CLEVELAND, Ohio – Ohio ranks in the bottom third of the nation when it comes to the financial stability of its residents, according to a scorecard released Monday.

The 2016 Assets & Opportunity Scorecard ranks the 50 states and Washington, D.C., in a range of areas, from financial assets and income to businesses and jobs to education. Ohio ranks 36th out of 51. The Scorecard is done by the Corporation for Enterprise Development in Washington, D.C., or CFED, which is focused on empowering “low- and moderate-income people to build wealth.” Ohio ranked 35 last year.

The Scorecard refers to such measures of financial stability – most often based on analyses of government data — as outcome rankings. Of 61 outcomes, Ohio performed below the national average on several of them most often crucial to ensuring financial stability for a state’s residents, according to Lebaron Sims, research manager at CFED.

Small-business lending: The next fixed income frontier?

​Forget the U.S. government — how about lending to your neighborhood dentist instead?

That’s what firms like Direct Lending Investments aim to allow investors to do, albeit indirectly. The $450 million fund buys loans from nonbank lenders, and packages them in portfolio form for consumption by accredited investors (although it is attempting to transition into a more accessible closed-end fund).

The potential opportunity arises from a few different factors. Over the past several years, traditional bank lending has slowed, and yields on Treasurys and other ultrasafe bonds have fallen, which has increased the demand for nontraditional loans, resulting in outsized yields.

For instance, even as Treasury bonds returned basically nothing in 2015, Direct Lending Investments delivered an 11.7 return. This as the default rate on loans in the portfolio ran at 4.6 percent.

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Retirement For The Small Business Owner

January 19, 2016 by

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Are you thinking about retiring soon? Are you financially prepared? If you are a small business owner or  self-employed, are you selling your business? There are many questions that as a small business owner or self employed you have to answer before you want to retire. If you are prepared financially, are you prepared to hand the business over to a family member or business partner? If that is something you haven’t thought about, talking to a small business consultant to help you with the succession of your business may be a good idea, especially if you are thinking about staying involved in the business.

For more relevant small business news follow the links below.

Making retirement plans for a small business

Q. I have a small business and I’m finally ready to start a retirement plan. I’m the only employee. What’s the difference between a 401(k) and SEP-IRA?

— Small biz

A. It’s great to hear you’re ready for a retirement plan.

You do have several choices, and the best plan for you depends on how many employees you have, how much money you’re able to save each year and how much the plan will cost to administer.

First, let’s talk about the benefits of 401(k) plans and SEP-IRAs.

Contributions to both of these retirement plans are tax deductible by the business and neither has a minimum amount that you must contribute each year, said Laurie Wolfe, a certified public accountant with Lassus Wherley in New Providence.

“Both of these plans offer flexibility with regards to timing of contributions, which makes sense for a business with profits that tend to fluctuate from year to year,” Wolfe said. “Both plans need to be set up by Dec. 31 of the year you wish to make contributions, but deposits can be made all the way up to the filing deadline of the tax return — including extensions.”

Can chambers of commerce stay relevant for small business?

For years, chambers of commerce have proven valuable for small businesses across the nation. But unless they keep up with social media and other technologies, chambers will struggle to stay relevant.

​For years, chambers of commerce have proven valuable for small businesses across the nation. They act as a collective lobbying voice for businesses, while enabling small business communities to seek and share advice, join events and network with peers.

But the U.S. Chamber of Commerce was founded more than one hundred years ago, long before the Internet and social networks changed the face of small business.

Today, one might question the necessity of the chambers, especially those that have not stayed relevant by adequately using the Internet or available social technologies.

YouTube Appeals to Small Businesses. Will They Spend Money With Alphabet Inc.?

A Homer Simpson video targets local advertisers. The market is huge, and big digital players such as Alphabet and Facebook are eyeing an increasingly bigger share.

YouTube, part of the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) empire, rolled out a video last month starring the Simpsons characters that targets small businesses as advertisers on the popular Web video platform. The move highlights what’s soon to become a major battlefield for the big online players such as Google and Facebook (NASDAQ:FB)and the ad tech they’ve been developing.

The video, which plays off Homer’s famous scheme to start a snowplowing business, shows the character trying to get his “Mr. Plow” business off the ground by tucking promotional leaflets beneath car wipers, only to see them all blown away by gusting winter winds.

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How Is The Economy Doing In Ohio and The U.S?

January 12, 2016 by

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For many people the U.S economy is recovering,  while for others we are stagnant.  BP and Yahoo have announced a 5% and 10% workforce cuts respectively, while others assured us the U.S workforce added close to 300,000 thousand jobs in December.  It is no surprise then that Americans are ambivalent as to the state of the economy, but hope that the new year bring our small business a better one than last year.

For more business news follow the links below.

Workers in high demand in Ohio, Springfield

applicants in Ohio is as robust as it has been in the past five years, particularly in the trucking and nursing industries.

Ohio saw more online advertised job openings in one month — from Oct. 14 to Nov. 13 — than at any time since the state began tracking online job postings five years ago, according to a recent report from the Ohio Department of Job and Family Services.

Statewide, Ohio had 240,000 posted openings between those dates. In Springfield alone, more than 1,420 jobs openings were listed Monday on OhioMeansJobs.com, an online state-run help wanted page.

Locally, the areas where workers are most needed closely follow statewide trends. In the 12-county West Ohio area that includes Clark, Greene, Miami and Montgomery counties, heavy and tractor-trailer truck driving was the occupation with the most job ads, 1,912, according to the state’s monthly report.

The Key to Success, Revealed: Leveraging Business Intelligence Tools in 2016

Even with the proliferation of innovation in recent years, there are still business owners using Excel spreadsheets, pencil and paper, and manual logs to track business developments and record data. 

These business owners are so comfortable with their old ways of doing things that they’re afraid of making changes.

Sound familiar? If you’ve put off adopting business intelligence (BI) tools up until now, it’s time that you finally reconsider.

The Value of BI Solutions

There’s no clear or consistent definition for business intelligence, but some definitions are better than others.

According to datapine, a provider of one of the leading self-service BI tools, “Business intelligence tools are designed to help business people draw insights from past performance, predict future events and avoid obstacles even before they have taken place.” In other words, BI is about using past performance and data to predict future outcomes and conclusions.

BI is viewed pretty highly in corporate circles. This means you aren’t going to meet many business owners who are firmly against these tools. Nobody will stand outside your building picketing and protesting the implementation of a BI solution. The issue is that some business owners don’t fully understand the value of these solutions.

Workforce also grows across U.S; wages flatten

WASHINGTON — The U.S. economy entered 2016 with strong momentum as employers added 292,000 jobs in December, pushing the annual number last year to 2.7 million. 

The full-year number was slightly below the 3.1 million jobs added in 2014 but, taken together, they are the top two years for job growth since 1999.

Unemployment held steady in December at 5 percent and workforce participation rate rose slightly last month, to 62.6 percent from 62.5 percent, the Labor Department said Friday. The rate remains near a 40-year low.

Wage growth was mostly flat last month following some improvement over the second half of 2015. Looked over a 12-month range, worker pay grew slightly faster than the rate of inflation, in effect stretching workers’ earnings a bit further.

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Entrepreneurship – What Kind of Smart Are You?

January 11, 2016 by

business (7)There used to be only one kind of “smart”.  You took a test which measured your intelligence quotient (IQ) and were assigned a number based on the results.  The higher the number, the smarter you were and the more likely you were to be a success.  Fortunately, that way of thinking is now known to be flat out wrong.

We all know someone who is book smart, but no one can work with her because she’s completely clueless on how to interact with people.  Then there’s the charming, personality guy who doesn’t know how to turn a profit.  There are many kinds of intelligence. 

Word smart

Word smart people know how to communicate their ideas, visions and goals, which inspires others to support them. They’re able to create loyalty in employees, sell customers, write business plans, teach using funny and interesting stories, influence important people and raise money from investors.

Words matter.  Lack of communication, across the board in all industries, is the biggest complaint workers have about their bosses. It’s a fundamental part of human nature to want to know what’s going on and, more importantly, how we’re going to be affected by it.

Self smart

One of the abilities of the self smart person is the capacity to understand herself (i.e. motivations, limitations, strong points, fears, hopes, wants vs. needs, drives) through others’ eyes.  It’s impossible for us to see ourselves as others see us, we all have blind spots.  Some peoples’ spots are much larger than others – you know who they are. 

Successful entrepreneurs welcome people who challenge them, who “call them on their s***”.  Self smart people seek out feedback from others, it gives them insight, which they use to learn, grow and move forward. 

Number smart

Successful people comprehend profit, loss and margins.  They use financial information to make decisions and do their planning.  This occurs over the life span of the company, beginning with start-up costs and ending with exit strategies.

The lack of number smarts is the biggest problem most entrepreneurs have.  It’s estimated that 80% of businesses fail in the first 5 years because the owners weren’t aware of or didn’t care how vital it is to know and do the math. 

People smart

This kind of smart is having good social or people skills. It’s being able to read and interact with all types of individuals.  These are people who’re energized by and like to work with others. 

Their knack of effectively interacting with people shouldn’t be confused with an ability to communicate (word smart).  They often talk at, rather than with others.  They’re the personable “glad handers” who can efficiently work a group without really saying anything.

If you want to be a successful entrepreneur it helps to know which kinds of intelligence are your strengths and which are your weaknesses.  You can focus on your positives and learn to overcome or compensate for your negatives.  The more you know about them the better chance you have of achieving your goals. 

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2016 Small Business Outlook

December 30, 2015 by

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What’s your outlook for 2016? Did the interest rate increase change your outlook for 2016? Have some of the business decisions for next year changed, because of this increase?  Many business analysts believe small business owners are looking forward to a better 2016 despite the rate increase and a slow economy that didn’t see an increase in their revenues. At the end of the year though when many small business owners are reflecting about what they did right and what went wrong during the year, they are also planning about the next year, and so far the outlook is positive.

For more about this follow the links below.

Paid Leave Policies Can Level the Playing Field for Small Business

The fourth quarter is the busiest time of year for most small business owners. Many of them are working overtime to meet the holiday rush and tie up loose ends before the new year–which means they’re leaning more than ever on their employees to help get things done. This busy season reinforces what small business owners already know: good employees are their best assets, and keeping workers happy and healthy is key to a strong bottom line. Small business owners can take many different steps to retain talented and productive employees, like offering higher wages or health insurance. But what many people may not know is that paid leave can be an effective benefit to help attract and retain a talented workforce.

Paid leave has been a hot topic at the national and local level. Lawmakers around the country are weighing initiatives to allow workers to earn paid sick days or implement family medical leave insurance pools. Maryland’s Montgomery County recently approved a law allowing employees to accrue a limited number of paid sick days, and in the beltway, D.C. is weighing a law that would establish an insurance pool to provide up to 16 weeks of paid family leave.

Small Business Owners Bullish on 2016 Outlook

Small business owners are charging full speed ahead into 2016 despite some concerns over growth in the last year.

The Wells Fargo/Gallup Business Index, which is measured each economic quarter and measures small business owner optimism, says the overall index score fell by several points in 4Q. The report attributes the decline to a drop in the number of small business owners reporting increases in revenue.

While small business owners may feel somewhat negative about their progress (or lack thereof) in 2015, The Bank of America (BAC)Small Business Report says 78% plan to grow their business over the next five years, compared to 67% a year ago.

“There was a marked jump over a year ago, and while Millennials continue to be the most optimistic generation, there was notable increase across the board,” said Bank of America Small Business Executive Robb Hilson.

With 2016, we small-business owners get another chance to do it better

For all the good that happened in my business this year, 2015 also brought its share of frustrations.

Twenty-fifteen, you’ve been a good year, but I can’t say I’m altogether sad to see you go.

We had some great times, like the September afternoon when a client called from out of the blue to propose a much bigger contract. Wow! I felt on top of the world that day.

You also taught me some key lessons about business, and I finally broke free of a vendor relationship that simply wasn’t working for me. Looking back, I wonder why I stayed so long, and I am now much happier in my new arrangement.And then there was the economy. I can’t speak for others, but 2015 was the year I finally saw the unmistakable signs of a robust recovery, not the slow gains I’d seen in previous years emerging from the Great Recession.

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Small Business Tax Breaks

December 23, 2015 by

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For the small business owner, a tax break can mean a little savings that go back into their pockets and not to the IRS.  Buying new computers, printers or machinery that they have postponed buying, can mean that their productivity level might increase thus giving them a better year overall.  Some of the “Tax Breaks” for the small business owner are so minimal that they do not impact their well being or the well being of their business, let us hope some of these tax breaks can affect them positively this coming year.

For more about this topic, follow the links below.

Small Businesses Get a Permanent Tax Break on Buying Equipment

Tucked inside the mammoth tax and spending bill passed by Congress this month is a much-anticipated provision that will lock in a large tax break for small-business capital investments that has been temporary until now.

The break is intended to make it more affordable for small companies to buy up to $500,000 a year worth of equipment like computers, machinery and vehicles.

Known as the Section 179 deduction, the tax provision allows qualifying capital items to be written off immediately on a business’s taxes, instead of being depreciated over a number of years. That has the effect of lowering a business’s taxable profits, sometimes significantly.

The deduction is essentially limited to small and midsize companies. It begins phasing out when a company spends more than $2 million a year on qualifying purchases, and is eliminated entirely for those that spend more than $2.5 million.

Small Businesses Need to Act Fast to Get This Huge Christmas Present

But the new “section 179” deduction limits will last into 2016 and beyond

The bigger deduction, aimed at stimulating the economy, covers computers, furniture, vehicles and machinery. Under the provision, small business owners can deduct the full purchase price in the year they bought it.

“It’s one of the most immediate, tangible things most small businesses do in some form,” said John Arnsmeyer, founder and CEO the Small Business Majority, a network of 42,000 small business owners. “It has a very immediate benefit for them.”

Small Business “Tax Holiday” Could Be In The Works

TALLAHASSEE (CBSMiami/NSF) – A Senate Republican has proposed creating a sales-tax “holiday” for small businesses on the Saturday afterThanksgiving, one of the busiest shopping times of the year.

The bill, filed by Sen. Rene Garcia of Hialeah, is similar to a measure filed last month by Rep. Jay Fant of Jacksonville, and Rep. Ed Narain of Tampa.

The bills, which will be considered during the upcoming legislative session, would create a “Small Business Saturday” tax holiday on Nov. 26 next year. If approved, small businesses would not be required to collect sales taxes on items priced at $1,000 or less.

Lawmakers considered such a proposal during the 2015 session, but it did not get approved in a final tax package.

The News Service of Florida contributed to this report.

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Interest Rates and Small Business Borrowing

December 17, 2015 by

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Many believe that the increase in the interest rate will have a minimal effect in consumers wallets, and others believe small business borrowing will have no change despite this.  Borrowing for the small business owner  they believe is not a matter of whether the interest rate is high or not, but whether the small business owner believe borrowing can benefit their business or not.

For more about this and other topics follow the links below.

Everything You Need To Know About How The Rate Hike Will Affect Your Wallet

For the first time since 2006, the Federal Reserve has announced that it will raise interest rates by 25 basis points. This means that it is increasing the target for short term interest rates to a range of 0.25% to 0.50% from a range of 0% to 0.25%.

Within minutes of the Fed’s decision Wednesday, Wells Fargo, JPMorgan Chase and US Bancorp became the first banks to announce that they would increase their prime rate, a rate used for consumer loans like mortgages. Effective December 17, the prime rate at Wells, JPM and US Bancorp will move from 3.25% to 3.5%. Later in the afternoon, Citibank announced a similar move; many other banks are likely to follow suit.

Yet despite this and despite all the hubbub surrounding the Fed’s decision – journalists and Fed watchers have literally been talking about a rate hike for years – the immediate impact to consumers’ wallets will be virtually indiscernible. Fed chair Janet Yellen even said as much in her Wednesday afternoon press conference.

Small businesses like Nick’s Roast Beef may be easy targets for the IRS, says expert

Nick’s Roast Beef, a small family-owned business in Beverly, was federally indicted Monday and charged with reporting false tax statements.

As it turns out, Nick’s may be just one of many small businesses the IRS keeps a close watch on, according to Forbes.

Small businesses that run cash-only operations make easy targets for the federal government, defense attorney Joel Androphy told Forbes. All the while, bigger, more sophisticated businesses get a pass because the work to prove evasion can be more complicated, requiring more time and work, he said.

Many of the cases the IRS works on come from the “Whistleblower” program and involve small businesses with claims under $2 million, which is small in comparison to what some large corporations may be hiding, according to Forbes.

Don’t expect Main Street to accelerate borrowing overnight

What’s more relevant to small business lending appetite is optimism.

As years of low interest rates start to wind down, don’t expect Main Street to accelerate borrowing overnight.

There can often be a disconnect between the Fed and smaller businesses, which are driven by other variables including cash flow, business opportunities and loan availability and terms. If you’re a growing business, you’ve likely already signed onto loans. For the rest of the smaller guys, however, it’s likely borrowing will ramp up gradually to stay ahead of higher lending rates. And if anything can trigger more borrowing for small companies, it’s a more upbeat mood about business prospects.

“Business credit is so different than consumer credit. It’s driven far less by rates and far more by availability in terms of both loans and market opportunities,” said Jeff Stibel, vice chairman of business researcher Dun & Bradstreet. “Rates are almost irrelevant.”

The Federal Reserve, as widely expected, approved a quarter-point increase in its target funds rate on Wednesday. It was the first rate increase in nearly a decade.

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A Way to Limit Common Management Mistakes

December 14, 2015 by

64510516You’ve probably heard this saying, “Insanity is doing the same thing over and over again and expecting different results.”  It’s commonly attributed to Albert Einstein, but that’s a mistake – the exact origins of the quote are unknown. However, as mistakes go it’s a “no harm, no foul” one.

Like this one, some mistakes are little ones, and then there are those big enough to close businesses.  The ones big enough to close businesses usually are the result of the owner’s and manager’s repetitive, unproductive behaviors (i.e. insanity).  The kind of mistakes that they repeat over and over, regardless of facts which show the behavior isn’t working.

Maturation in humans and animals is the process of being able to learn from our mistakes, which results in positive behavior changes.  That’s what we call experience – I tried this, it didn’t work, I learned from it and will try something else that’s hopefully better (and repeat). 

There are several common management mistakes which most people make.  However, there’s a simple time tested way to avoid or minimize the damage from them.  A way which has evolved over centuries and has the power of experience behind it – ask for help. 

The majority of small businesses start because the owner knows something about the product or service.  He’s worked in a specific field for someone else and then gone out on his own.  He’s good at what he does and knows his product, but what he’s not good at is the “other stuff” (i.e.  marketing, accounting, legalities and regulations, human resources, taxes). 

Nor should he be.  While those areas are important in running a successful business, no one has the level of expertise or experience to understand them all.  He shouldn’t expect to be good at or knowledgeable about everything it takes to run a profitable company.

Yet, overwhelmingly small business owners expect just that of themselves.  They won’t ask for help, because they see it as a personal failing.  They believe they can and should figure it out for themselves.  However, they get sidetracked by trying to do the things they aren’t good at and lose focus on their strengths.

One of the best ways to limit mistakes in business (and life) is being willing to learn from others.  Learning from other’s mishaps saves us from having to go through the costs and hardships of making them ourselves.  There are more than enough chances in life to mess up, why not take the opportunity to let someone else do it for you when possible.

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So You Want to Buy an Online Business?

December 4, 2015 by

business (2)There’s a cycle in the development of any new technology and how it enters the business community.  Part of the growth process for any new idea is to be a good enough model to establish a business around it, and have that business become valuable enough to resale.

In the small business community we’re beginning to see the maturing of the online business market.  Up until very recently when people talked about owning an online business they were talking about starting one.  But, that’s beginning to change – small online businesses are trickling into the business-for-sale market. 

Owning and running an online business, like any business, has its positives and negatives.  The way to increase the positives and decrease the negatives begins with the buying process, nothing takes the place of solid due diligence.  Here are 2 vital areas to consider.

Technical

An online business is in a volatile and rapidly changing industry.  How much technical knowledge do you have and how much is needed for the business?  Do the ideas of regularly tracking site traffic metrics, developing SEO tactics, rooting out plagiarized content and maintaining your legal/ethical responsibly for security excite or bore you?

If you can’t or don’t want to manage the day to day technical issues you should have answers to these questions – who will, how much will they cost and how hard are they to find?  The problem of attracting and retaining qualified people is an on-going issue that’s not going to be resolved any time soon, if ever.

Financial

Be sure to assess the company’s actual value, risk and outlook.  Traffic totals are routinely unknown, manipulated and lied about.  Traffic is money, so don’t accept guesses or vague numbers.  The financial information should line up with the site’s metrics, all of which should be hard numbers gathered over a realistic time period.

If you aren’t an expert hire someone who is, someone who knows the industry’s past and current benchmarks.  As well as, someone who understands and has the data for the future outlook specific to your product or service.  Over inflated forecasts for the financial potential of online businesses are legendary.

Don’t be swayed by the hype.  The process of buying an online business is the same as buying one in a more established area (i.e., retail or food store, machine shop, insurance agency).  Taking your time and doing the due diligence is still the key. 

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