E-commerce giants like Amazon have disrupted the business retail industry, leading many to predict the demise of traditional brick-and-mortar stores. However, physical stores are not going away anytime soon. Instead, they are evolving to compete with online retailers and meet changing consumer needs.
Here are some of the ways that brick-and-mortar stores are adapting to stay relevant in the age of e-commerce:
Providing a unique in-store experience:
Brick-and-mortar stores focus on creating an experience that cannot be replicated online. This includes offering personalized services, interactive displays, and immersive experiences that engage customers and make shopping more enjoyable.
For example, Nike has opened “House of Innovation” stores that use cutting-edge technology to enhance the shopping experience. Customers can use their smartphones to scan products and learn more about them, and the stores have interactive displays that allow customers to design their shoes.
Offering convenient and flexible options:
One advantage of e-commerce over physical stores is convenience. To compete, brick-and-mortar stores offer customers more flexible options, such as online and in-store buying, curbside pickup, and same-day delivery.
Target has been particularly successful with these options, with over 95% of its online orders being fulfilled from its physical stores.
Leveraging data and technology:
Brick-and-mortar stores use data and technology to understand customer preferences and behavior better. This allows them to tailor their offerings and create a more personalized shopping experience.
For example, Sephora uses its app to collect customer purchase and preference data. It then uses this data to recommend products and provide personalized beauty advice to customers.
Investing in sustainability:
Consumers are increasingly concerned about the environmental impact of their purchases. Brick-and-mortar stores are responding by investing in sustainable practices and products.
Patagonia is an excellent example of this, with its stores offering repair services for clothing and equipment and a trade-in program allowing customers to swap out used gear for store credit.
Building community:
Brick-and-mortar stores also focus on building community among their customers. This includes hosting events, workshops, and classes that unite people and foster a sense of belonging.
Lululemon is an excellent example of this, with its stores offering free yoga classes and other fitness-related events. This has helped the brand build a loyal following of customers who see Lululemon stores as more than just shopping places.
In conclusion, brick-and-mortar stores are far from dead. Instead, they adapt to meet changing consumer needs and compete with e-commerce giants. Physical stores are staying relevant and thriving in the digital age by providing a unique in-store experience, offering convenient and flexible options, leveraging data and technology, investing in sustainability, and building community.
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To successfully land funding, you need to think like investor when reviewing the business plan. If you were considering lending money to a business what would be one of your first concerns? Naturally it would be the chances of the business failing. An investor lends money with the intent on getting a return on that investment. So it makes sense that the business plan should be evaluated from the same perspective by the business owner.
Small businesses have a high rate of failure according to the Small Business Administration. There have been many studies done to determine why this is so. These studies have identified common errors that businesses make, so you want to consider these problems before they ever become an issue. Realistically, potential investors will have them in mind before agreeing to lend money so being prepared to respond is important.
Typical reasons for small business failure include over-expanding to prove growth to investors, underestimating expenses or overspending, assuming too much debt based on revenues and cash flow and underestimating the competition. Also included on the list are choosing a poor location and lack of capital. The likelihood of these factors occurring in your business will be considered by investors evaluating a business plan.
If you have already thought through the reasons for failure, investors will recognize that fact. For example, location is high on the list of reasons for small business failures. Presentations to investors, therefore, should address the choice of business location and explain the competition and accessibility by customers. Making sure you address the reasons why your business could fail is an important step towards ensuring it doesn’t.
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More and more businesses are looking for investors to fund a global expansion. More and more investors are looking for businesses ready to go globally. The business landscape is changing rapidly, and small businesses are expanding internationally right along with the big corporations. The internet can probably be named as the primary motivator for this trend because it made it so easy to communicate with people around the world. Orders can be placed with a click of the mouse. Governments recognized the opportunities this created and have created laws and regulations that promote global business.
Naturally, investors want a piece of the action. They are looking for companies that can successfully expand through globalization because the opportunities are unlimited. Of course, participating in international trade can be expensive so it’s not a decision made lightly. Yet there are so many advantages to expanding internationally that it makes sense.
What are those advantages? For one thing, a business can increase sales and thus profits which makes the company more attractive to investors. Other reasons include gaining greater market share, spreading risk by expanding market access, stabilizing seasonal sales cycles and establishing a foundation for unlimited growth. All of these reasons are exactly what can make a business attractive to investors.
Of course, expanding globally takes money. There are import and export fees, expanded production costs, higher shipping costs and the expenses associated with new promotions like marketing and travel. Investors will balance the higher costs to the expected increase in revenues and profits before making a decision. Investors will also weigh the risks associated with the global expansion. This balancing act though is one that the business should have already mastered in the business plan.
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The ideal business plan is composed of more than just history, marketing and financial sections. It should also convey the value proposition to the angel investors you approach about business funding. Typically, angel investors are sought after a business has been established so it’s possible to show real products, actual customers and a working business model. However, the angel investors will want to know how you define the company’s value proposition.
The business value proposition is developed with the marketplace in mind. The value proposition defines why people in the target market should buy your products or services. It defines what benefits purchase of the goods or services will provide or what problem will be solved by product or service use. It sounds like the statement would be long, but it should be kept short which forces the business owner to concisely explain the value the company is bringing to the marketplace and the relevance of the product to the customer. If it takes a long winded explanation then there’s good chance the business owner has not fully developed the business concept.
The value proposition is important to the angel investor because it concisely differentiates the business among its competitors and reflects an alignment of business operations with the market. The value proposition must also reflect specific results or performance and is not a generalized statement that any business could use. For example, a consulting business could say that it can help customers get a high return on investment , but that would be a weak value proposition. A strong value proposition would say that the business can demonstrate customers will experience an improvement of 15% Return on Investment (ROI) by using the company’s state-of-the-art proprietary software.
Angel investors expect a business plan to have a value proposition that quantifies market results and also states the source of its competitive advantage. That should never be a problem if a company is serious about success.
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How do you convince investors your business idea is worth the risk of investing money? You may have the most innovative and creative idea ever put forth, but that doesn’t mean anyone is going to invest in it. Even a good idea can flop if it’s not implemented correctly. Of course, the most well-known example in business history is the 1958 Edsel. The car had a poor name, a poor pricing strategy and was manufactured during a recession. It remains to be seen if the modern-day Chevy volt will be classified as the “new” Edsel for similar reasons.
Investors are willing to accept risk, but they will do everything in their power to ensure they understand how much risk is involved. Investors are not the same as business speculators in most cases because they want a value proposition that includes a very good probability of earning positive returns. There are many different factors investors will consider to determine risk, and you should assess them first.
Risk is a function of management competencies, available collateral, market acceptance of the business idea and time. To convince investors your business idea is worth the risk of funding, you will have to first prove that the people implementing the plan are fully competent and capable of running a business. Investors will also want reliable collateral. You need to show that the product or services can be efficiently brought to a willing market. Finally, the investor will want to assurances that the payback agreement in terms of time will be met. Payback in terms of money is taken care of by the other factors of competency, market success and collateral.
You can convince investors to fund your projects by developing a sophisticated business plan that clearly and carefully shows the level of risk the investor is assuming. The good news is that the time spent developing a business plan in the first place reduces risk right away.
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Branding is one element addressed in the marketing section of the business plan. It’s also the image presented to angel investors when searching for business funding. Contrary to popular belief though, branding is not just about a trendy logo or elaborate advertising. It’s the element that represents you as the business owner, the quality of your products, and the level of customer service. Brand is composed of your individuality and your company’s value.
Branding is a complex concept which is one reason why it’s often reduced down in people’s minds as being mostly about advertising. The assumption is that if the target market is aware of your logo, then branding efforts have been successful. However, it goes much deeper than advertising, which is why your business plan must present more than an advertising plan to potential angel investors.
Business brands is about the quality and value that underpins the entire business. It’s the projected image, but more importantly it’s the tie-in for everything the company does or will do. business brand is a broad brush that covers marketing, pricing, the level of customer service and the business culture. Branding pervades the business plan and is not simply one element in the marketing plan.
Common question angel investors ask always concerns brand. What do you want your brand to project to the marketplace? Is it quality, innovation, creativity, problem solving or all of the above? Branding is important to startup companies as well as established companies. In fact, branding for startups can perform an important job for startups on limited budgets by making advertising efforts more effective. Clear and distinct branding differentiates the company in the minds of customers, thus giving the company more value for marketing dollars spent.
Before preparing a business plan to present to angel investors, make sure the brand is well defined. Branding is not just advertising. It’s the element that ties your entire business together.
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Getting into a business partnership has its benefits. It allows all contributors to share the stakes in the business. Depending on the risk appetites of partners, a business can have a general or limited liability partnership. Limited partners are only there to provide funding to the business. They have no say in business operations, neither do they share the responsibility of any debt or other business obligations. General Partners operate the business and share its liabilities as well. Since limited liability partnerships require a lot of paperwork, people usually tend to form general partnerships in businesses.
Things to Consider Before Setting Up A Business Partnership
Business partnerships are a great way to share your profit and loss with someone you can trust. However, a poorly executed partnerships can turn out to be a disaster for the business. Here are some useful ways to protect your interests while forming a new business partnership:
1. Being Sure Of Why You Need a Partner
Before entering into a business partnership with someone, you need to ask yourself why you need a partner. If you are looking for just an investor, then a limited liability partnership should suffice. However, if you are trying to create a tax shield for your business, the general partnership would be a better choice.
Business partners should complement each other in terms of experience and skills. If you are a technology enthusiast, teaming up with a professional with extensive marketing experience can be quite beneficial.
2. Understanding Your Partner’s Current Financial Situation
Before asking someone to commit to your business, you need to understand their financial situation. When starting up a business, there may be some amount of initial capital required. If business partners have enough financial resources, they will not require funding from other resources. This will lower a firm’s debt and increase the owner’s equity.
3. Background Check
Even if you trust someone to be your business partner, there is no harm in performing a background check. Calling a couple of professional and personal references can give you a fair idea about their work ethics. Background checks help you avoid any future surprises when you start working with your business partner. If your business partner is used to sitting late and you are not, you can divide responsibilities accordingly.
It is a good idea to check if your partner has any prior experience in running a new business venture. This will tell you how they performed in their previous endeavors.
4. Have an Attorney Vet the Partnership Documents
Make sure you take legal opinion before signing any partnership agreements. It is one of the most useful ways to protect your rights and interests in a business partnership. It is important to have a good understanding of each clause, as a poorly written agreement can make you run into liability issues.
You should make sure to add or delete any relevant clause before entering into a partnership. This is because it is cumbersome to make amendments once the agreement has been signed.
5. The Partnership Should Be Solely Based On Business Terms
Business partnerships should not be based on personal relationships or preferences. There should be strong accountability measures put in place from the very first day to track performance. Responsibilities should be clearly defined and performing metrics should indicate every individual’s contribution towards the business.
Having a weak accountability and performance measurement system is one of the reasons why many partnerships fail. Rather than putting in their efforts, owners start blaming each other for the wrong decisions and resulting in company losses.
6. The Commitment Level of Your Business Partner
All partnerships start on friendly terms and with great enthusiasm. However, some people lose excitement along the way due to everyday slog. Therefore, you need to understand the commitment level of your partner before entering into a business partnership with them.
Your business partner(s) should be able to show the same level of commitment at every stage of the business. If they do not remain committed to the business, it will reflect in their work and can be detrimental to the business as well. The best way to maintain the commitment level of each business partner is to set desired expectations from every person from the very first day.
While entering into a partnership agreement, you need to have an idea about your partner’s added responsibilities. Responsibilities such as taking care of an elderly parent should be given due thought to set realistic expectations. This gives room for compassion and flexibility in your work ethics.
7. What Will Happen If a Partner Exits the Business
Just like any other contract, a business venture requires a prenup. This would outline what happens in case a partner wishes to exit the business. Some of the questions to answer in such a scenario include:
How will the exiting party receive compensation?
How will the division of resources take place among the remaining business partners?
Also, how will you divide the responsibilities?
8. Who Will Be In Charge Of Daily Operations
Even when there is a 50-50 partnership, someone needs to be in charge of daily operations. Positions including CEO and Director need to be allocated to appropriate individuals including the business partners from the beginning.
This helps in creating an organizational structure and further defining the roles and responsibilities of each stakeholder. When each individual knows what is expected of him or her, they are more likely to perform better in their role.
9. You Share the Same Values and Vision
Entering into a business partnership with someone who shares the same values and vision makes the running of daily operations considerably easy. You can make important business decisions quickly and define long-term strategies. However, sometimes, even the most like-minded individuals can disagree on important decisions. In such cases, it is essential to keep in mind the long-term goals of the business.
Bottom Line
Business partnerships are a great way to share liabilities and increase funding when setting up a new business. To make a business partnership successful, it is important to find a partner that will help you make fruitful decisions for the business. Thus, pay attention to the above-mentioned integral aspects, as a weak partner(s) can prove detrimental for your new venture.
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Many of us have this dream of becoming self-employed. One way to turn this dream into reality is to use your savings as investments to run a successful business. Part of accomplishing this goal is making your financial standing-worthy. No doubt, stable credit scores play a vital role in building this creditworthiness.
That is to stay; good business status scores come with a slew of benefits that mostly include supplier financing, lines of credit, easily available business loans, and business credit cards. In addition to these advantages, good credit scores help you with lower insurance premiums and higher credit limits. It attracts plenty of financial opportunities for entrepreneurs from existing suppliers and lenders.
However, not all entrepreneurs can reap these benefits due to poor financial status scores. This often happens when business owners commit small mistakes while using their business credit cards. Although these mistakes are petty and committed unknowingly, they may damage financial standing when reported to financial agencies.
If your business also faces this issue, you might be making the following mistakes.
Mistakes That Damage Business Credit
Co-signing Loan with Someone Else
You might know that co-signing a loan for anyone, including your friend or relative can bring disastrous results to your financial standing. It happens when the borrower fails to meet the terms and conditions of loan repayment. It is important to remember that, when you co-sign a loan for a relative or a friend, you share a partial responsibility of the borrower. That means when the borrower fails to make the repayments, it automatically affects your commercial loan scores if you also do not make the payment. Being a co-signer of a loan can be potentially disastrous for your business.
How to avoid that?
The easy way to avoid that is to become selective for the people you decide to co-sign a loan for. Plus, don’t forget to investigate the borrower’s history that includes his/her financial stability to repay the loan amount. Go through the options that the borrower will use to make the payments. Determine whether or not these options are viable and will not cause you problems in the future.
Ignoring Credit Problems
How many times have you tried to cross-examine your financial reports? No wonder if the answer to this question is “never.” Most small business owners rely on the yearly report for all the details. And this one of the mistakes that you do when it comes to maintaining good financial standing. Taking out time to check monthly financial reports is always beneficial to ensure its impeccability. If you wait long, checking out the errors will become hard. Remember that, even the minor errors in your report can be damaging and will lead to poor financial status rating. The other warning signs include missing payments, zero-rated business credit cards, and not allowed to make big payments.
How to avoid them?
You can prevent this by taking prompt actions or keeping your standing scores in check.
Closing non-functional Accounts
You might feel disposing of your old-fashioned sneaker is the right way to get rid of old things. It is because you will not be using them in the future. However, this is not the case when it is about your credit cards. That means, if you cancel your old credit cards, you might lower your financial standing scores. It is because those cards might have a good financial standing history. But when you decide to do away with those credit cards, all good financial standing history that contributed to your existing scores is automatically removed.
How to avoid it?
Retaining your old credit cards or keeping those accounts open, you can save your good payment history. Even if you are not using a credit card, don’t close it as it could affect your business financial standing scores.
Late Payments
Keep in mind that your timely payments are one of the major factors used to determine your financial standing scores. If you are a late payer or delay paying your bills, it affects your standing scores. Every time you make a late payment, it negatively impacts your standing scores. Even a single late payment denies your good financial status ratings and classifies you as a late payer.
How to avoid it?
It is obvious that how could you avoid this problem. You have to ensure that you make all your necessary business payments by either vendors or creditors on time. In case you miss out on a payment to the supplier for any reason, you may settle it through an agreement. Request the supplier to not report to the business financial agency and make up for the payment.
Max out Credit Cards
Maxing out a credit card is another vital mistake that many business owners do. Doing so raises the ratio of financial utilization. With a high credit ratio, you are always at a high risk of losing your credit rating. Many entrepreneurs believe that as long as they are paying off, the maxed-out amount on their business credit card will not affect the credit rating; which is not the case. No matter if you pay off the credit amount, it will have an impact on your credit scores. Credit bureaus interpret high utilization of ratio differently.
How to avoid it?
Financial agencies generally expect users to use only 30% of their credit limit. When this credit limit is surpassed, it indicates that your business is facing financial trouble. One way to avoid this is to use your debit card occasionally to make payments. This will keep your financial standing utilization ratio low.
Final Thoughts
In a nutshell, using business credit smartly is essential to improve your credit scores. And good credit scores translate into several financial benefits that may help you strengthen both your business investments and revenues. It presents you as a reliable candidate in front of banks and lenders.
Thus, avoiding the mistakes mentioned above is of paramount importance if you don’t want your business credit scores to be damaged. Think of alternative ways and solutions that can help you avoid these costly mistakes.
Places like Credit Karma can be one of many free options to monitor a couple credit reports that business credit might be attached to a personally signed business account.
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In the United States, it is very common for people to save up by opening retirement accounts. The problem with this kind of set-up, however, is that the money is expected to stay in the account until you reach retirement age. But what would you do in case of emergencies? Of course you can take out your money from your retirement account even if you are not yet retired. But you have to understand that this would lead to penalties and other tax deductions.
Most of the time, people open an employer-based or an individual retirement account that would be tax-free once they reach 59 and a half. The catch, however, is that if you decide to take some money from your retirement account before you reach your retirement age, it would usually be subjected to state and federal taxes on top of a 10 percent penalty. Yes, withdrawals will have tax deductions because these are considered as “incomes.”
Withdrawing your money before your retirement age is similar to pulling out an investment at the worst possible condition of the market. It’s like selling equities in a down market, a move that would nonetheless cut the probability of earning more from your business.
Thus, before meddling with what’s in your retirement account, you should try to look into other alternatives such as applying for a home equity loan, taking a line of credit, or asking a friend or family member for some money to borrow. These three are great alternatives, especially if you are expecting something some income in the future.
Aside from these, one must think about an intra-family loan which is a really good option since the interest rates set by the Internal Revenue Service are very minimal. In August, for instance, the interest rate was at a measly 0.3 percent for loans that will run for three years. For loans that will for more than nine years, meanwhile, Continue reading “Make the Right Choice: Should You Use Your Retirement Savings?”
Angel investors are playing a larger and larger role in the business investment community for obvious reasons. The banks are making it more and more difficult, due to a tightening of credit policies, for an entrepreneur with a new business idea or an early stage business expansion plan to find funding. Yet you can’t keep a good entrepreneur down. Angel investors see a need in the marketplace they can meet while businesses can see a need for investment fulfilled.
It’s a win-win arrangement.
Planting Seeds for Business Success
Finding adequate funding will probably always be one of the greatest challenges a business must meet. On the other hand, investors need a good place to invest their money to increase returns. The tight credit market has created the ideal forum for bringing businesses and private investors together. By investing in companies like yours, angel investors can earn a higher rate of return while your business gets the much needed capital injection required to move forward.
One of the nice features of this type of funding is the fact startup businesses can attract the angel investors when they could not attract venture capital or equity partners due to lack of financial history. The angel investors are known for being willing to give young companies with exciting new ideas, concepts or methods opportunities they would not be able to find elsewhere.
How big is the angel investor market? According to the Center for Venture Research at the University of New Hampshire, in the first two quarters of 2010 (latest numbers reported) angel investors invested $8.5 billion. As many as 25,200 entrepreneurs obtained this type of business funding. Many people are not aware of the size of the private investment market that includes angel investors, venture capital and equity partners.
Harvesting Success
Angels are committed to providing startup funding and even money for small business expansion. Business loans are made in numerous industries too including:
Healthcare
Energy
Industrial production
Green technologies
Retail
Biotech
Software
Computer equipment
Originally angel investors tended to be sole financiers or loose groups of investors willing to make business loans for new business ventures on an informal basis. Today there are formal investing groups able to offer larger amounts of business funding to new enterprises if the entrepreneurs have solid business plans. In fact, the angel investing industry has grown to point where they have their own trade association called the Angel Capital Association.
One of the most common questions asked is: What makes angel investors different from venture capitalists? Though there are no formal definitions, angels are more likely to invest in startup businesses or existing businesses that are still in the early stages of operation. These are the types of businesses that often have difficulty finding traditional loans. Angels will also invest smaller amounts. In fact, the news reports are full of stories of angels making microloans.
Venture capital, on the other hand, usually invests in businesses that have been in operation for a while or have a proven financial track record of some kind. Another difference between angels and venture capitalists is angels invest their own money while venture capitalists usually invest money from formal funds created for investment purposes.
Making Good Sense
If you are searching for startup funding, approaching angel investors makes sense. This is a group of investors more open to funding entrepreneurs ready to get their small businesses up and running.
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