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• New Treasury Guidance Provides Safe Harbor for PPP Loans
• Navigating the 5 Phases of the Product Design Process: Getting From Idea to Finished Product
• 5 Smart Ways to Use Webinars as a Marketing Strategy
• 4 Retirement Plans Designed for Small Business Owners
• 10 Proven Strategies to Increase Employee Productivity
• Indirect Marketing: Learn What It Can Do for Your Business That Direct Marketing Can’t
• 5 Smart Advertising Strategies During the COVID-19 Crisis: Why You Should Be Spending More Right Now
• Forget About Social Media Influencers—Here’s How to Better Market Your Business With Brand Advocates
• How to Manage a Gap in Your Income During the Coronavirus Crisis
• How to Negotiate a Business Acquisition Letter of Intent

New Treasury Guidance Provides Safe Harbor for PPP Loans Posted: 16 May 2020 04:46 PM PDT As small business owners begin looking towards applying for forgiveness of their SBA Paycheck Protection Program (PPP) loans, the Treasury Department issued highly sought-after guidance on May 13, providing a "safe harbor" from audits or penalties for companies that received a loan under $2 million. The new guidance was posted in an updated version of PPP loan FAQs. The guidance states the following: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity. Previous to this guidance, many companies were worried that under the "good faith" certification requirement on the PPP lending application, they would be subject to SBA or Treasury audits and potential penalties and damages. The PPP loan application requires the borrower to certify in "good faith" that they are requesting the loan due to "economic uncertainty," and that they have no access to credit elsewhere. Traditional SBA loans require written documentation that the borrowed tried and failed to access credit from other sources. With no real definition of "good faith" or "economic uncertainty" in a business environment that no one in either the private or public sector has seen before, business owners were concerned about their future legal exposure. While it defied credulity that the government would have the bandwidth to audit many loans or the political will to narrowly define "economic uncertainty" after it shut down the economy, business owners were nevertheless concerned. This anxiety was further exacerbated by media reports that publicly traded companies and major brands like Shake Shack, Sweetgreen, the LA Lakers, and Harvard University received PPP loans when seemingly they would have access to capital elsewhere. Many of these companies and organizations returned the funds, while others did not. The negative press also had a chilling effect in which the flow of loan applications and amounts requested slowed down, leaving many billions of dollars left in the program, for better or worse. This is partly because smaller firms are finally in the queue for PPP loans, which is good, but the entire point of the program was to introduce liquidity into the economy and to protect workers' wages. Therefore, having this money sit on the sidelines is not helpful to businesses, workers, or the U.S. economy. Other Articles From AllBusiness.com: Small Business Relief: COVID-19 Resources for Startups Financial Help for Freelancers and Independent Contractors Affected by the Coronavirus Crisis What Advice Are Venture Capitalists Giving to Startups in Light of the Coronavirus? 5 Ways to Improve Employee Communication During the COVID-19 Crisis Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know It is worth noting that these larger brands met the requirements of the PPP program but still faced pressure from the court of public opinion. Arguably, the shutdown of the NBA season caused plenty of "economic uncertainty" for the Lakers, along with no real end in sight for social distancing, making attending sporting events unlikely well into the future. The team is not, however, a mom-and-pop corner shop, so perhaps the backlash was justified. Based on the new guidance, businesses with loans under $2 million no longer have to worry about an audit or possible penalties for not meeting the "good faith" requirement. And, while loans over $2 million might be scrutinized or audited, there will not be severe penalties or criminal charges, outright fraud excepted. The worst-case scenario would be a request to repay the loan with interest. The new guidance did explain that for all borrowers, there could still be scrutiny that the loans were used appropriately to meet the forgiveness requirement: 75% for payroll and 25% for expenses such as rent, mortgages, utilities, and interest payments, tracked for 8 weeks immediately after receipt of funds. If lenders or the government determine the borrower did not use the funds as such, a portion of the loan could potentially not be forgiven and could convert into a 2-year loan at 1% interest. However, banks do not want to carry small, 1% loans on their balance sheets, nor does the government want to encumber small firms with debt, so the overwhelming majority of these loans should be forgiven if administered correctly. Despite this much-needed safe harbor, many questions still remain about PPP loan forgiveness, which will hopefully be answered in future Treasury guidance. Meanwhile, on May 15 the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, a new relief bill worth $3 trillion. The legislation does look to change some of the PPP requirements that have elicited objections from small business owners. This includes expanding the current 8-week period to use the funds to 24 weeks instead; reducing the 75% payroll requirement; extending the PPP program through the end of the year; and making 501c(6) organizations like chambers of commerce as well as small media companies also eligible for PPP. And, if the Republicans in the Senate have their way, any new legislation will include a new safe harbor for potential lawsuits against companies based on Covid-19 along with no additional funds for PPP until the current round is exhausted and its benefits measured. One additional relief measure on the horizon is the Main Street lending program. This will look like a traditional loan and have an application process with lending institutions with standard due diligence. The loan amount will be a minimum of $500,000, so it is aimed at larger firms. Eligibility requirements for the Main Street program are still evolving. In the meantime, this new safe harbor will hopefully lead to many more small businesses feeling more confident about applying for and receiving PPP funds, with less worry about problems down the road. RELATED: Loan Forgiveness Under the PPP and SBA EIDL Programs: 10 Things Small Businesses Need to Know The post New Treasury Guidance Provides Safe Harbor for PPP Loans appeared first on AllBusiness.com. Click for more information about Neil Hare. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

Navigating the 5 Phases of the Product Design Process: Getting From Idea to Finished Product Posted: 16 May 2020 11:22 AM PDT By Kirk Grathwol For inexperienced and seasoned entrepreneurs alike, the product design process can be tough to get through. After coming up with what they believe to be a worthwhile idea, many entrepreneurs get discouraged when they realize that thinking of the idea was the easy part of the journey, and a lot more work is required to achieve success. Having a product design plan is important if you want to create a successful product. Whether your product idea will be sold on shelves in a physical store or will be accessed digitally, following this process is a surefire way to arrive at your goals quickly and with minimal stress. Understanding the product design process The product design process is a way to take an idea from being a mere thought on paper to a functional, manufacturable, and sellable product. It is not a linear process; it consists of five phases, each having a specific purpose that can be returned to later to adjust the course of the process moving forward. Product design stages are: 1. Research and ideation The first step when taking a product to market is conducting research and collecting data on user and market trends. It will provide valuable insight into competitors and predict how your product or design will perform once it’s released into the industry. Understanding who your customers are, how your product will fulfill their needs, and evaluating the broader market will allow you to determine your competitive advantage. 2. Concept development and control art creation Concept sketching is the next step to getting you idea down on paper and later into a digital CAD design. During this phase, you will want to create an industrial design that is able to translate into the manufacturing process as well as speaks to the problem you are addressing. 3. Prototyping and validation When creating a product, multiple rounds of prototyping will take place as the control art is made into a tangible product. A rough prototype often transforms through rounds of iteration to solidify size, design, and function. 4. Testing and refining Testing your prototype is necessary to ensure proper function as well as market fit. Involving other people in your testing process ensures your judgement isn’t clouded by the desire to complete this phase. 5. Execution/manufacturing Ultimately, you need your idea to come to life. The more work that’s done in the previous steps will allow for a seamless transition into manufacturing. As your product is being sent for production, begin implementing your marketing and distribution strategy so you can obtain feedback, preorders, and start the sales cycle so you can turn inventory as soon as it’s ready. Importance of the product design process The process can quickly become overwhelming, thanks in part to its collaborative nature. Although you may know exactly what you want to see in the end, there may be a lot of other people involved, so it’s important everyone understands your vision. Getting every person on the same page will help prevent unnecessary changes or revisions later. It’s also crucial that everyone’s work is completed in a timely manner to prevent delays. Failure to do so can become a big issue later in the process when deadlines truly matter. For example, if you don't deliver on the expected launch date, you may tarnish your own brand's reputation before your product is even in the customers' hands. Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business Getting through the process Here are tips to successfully navigate the product design process: Ask the right questions. Although getting to the end product quickly is important, getting to the end with the perfect product is your true goal. If you reach the finish line and you don't have the product you envisioned, it will take a lot of work to figure out where your team went wrong, and a complete reconstruction may be in order. No one wants to start from square one after months of time and energy already spent, so during each  phase of the process, don't be afraid to ask questions if anything is unclear. Inquire about specific details that will clarify how the phase works, identify what you can expect at the end of the phase, and identify what may be needed from you in order to proceed to the next step. Get ahead. It doesn't hurt to stay on top of things. As you do your own research and work ahead, you will be better prepared to discuss your goals with your design team to help move things along. However, working ahead does not mean attempting to complete the next phase yourself and expecting the rest of the team to catch up or go along with what you've done. If you've hired a professional team of designers, you should be willing to take their advice and take advantage of their skill sets. Keep the user in mind. There are only a couple times in the product design process when your product users are explicitly mentioned: during the "research and ideation" and "testing and refining" phases. However, you are building a product for the user, and every action taken should reflect their needs and desires. The work that’s done at the very beginning during the research stage will lay the foundation of what to think about as you navigate the process and make small and large decisions about your product design. Don't be afraid to go back. As discussed earlier, the product design process is not as simple as a linear model. Completion of one phase does not prevent you from returning to another phase for reference or revision. This especially applies during the testing and refining stage. You may need to test your product multiple times to get all the necessary information from consumers and to make sure the product functions correctly. You may also need to return to previous phases to create new prototypes for consumers to test. Returning to a previous stage doesn't mean taking steps back. In fact, returning to a stage and refining your work can put you ahead and prevent mishaps from occurring in the future. Don't stress. Navigating the product design process can be challenging, whether you are building your first or your fifty-first product. And because every product is different, each product design plan will also be slightly different. Use these tips as you work through each phase to help the process run smoothly and to avoid any hiccups that could set you back in terms of time and money. Remember that this is a complex process involving many different people with many different skills. If you can keep a level head and work through difficulties, you'll get closer to transforming your product idea into a reality. RELATED: 3 Tips for Evaluating the Commercial Potential of Your New Startup Idea About the Author Post by: Kirk Grathwol Kirk Grathwol is VP of Design at Jupiter Design, and has over 25 years of design experience with companies both large and small, including Hasbro and Sevan Design & Marketing. Kirk is a leader in cutting-edge packaging, product, and branding design trends and has led the development of thousands of successful current and past products in retail. Company: Jupiter Design Website: www.jupiterdesign.co The post Navigating the 5 Phases of the Product Design Process: Getting From Idea to Finished Product appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

5 Smart Ways to Use Webinars as a Marketing Strategy Posted: 16 May 2020 11:13 AM PDT In these socially distant times, businesses want to find new ways to connect to customers, fans, and potential leads. Most digital marketing tactics are as relevant as ever, but one that seems as though it's set to surge is conducting impactful webinars.  Before the coronavirus pandemic, people were already aware of the power of webinars. According to a report from InsideSales.com, 73% of marketing and sales leaders said webinars are the second most effective way to generate quality leads. Only "small executive events" ranked higher (77%)—and right now, no one is holding such events.  Webinars, when done right, are an effective way to expose your business to a large audience—whether your business is B2B, direct-to-consumer, or anything in between. Now, as we are collectively stuck at home (as well as in the future, when business regains a sense of normalcy), webinars allow for intimate and real-time interaction. You can explain complex topics, connect with your audience, and demonstrate the value of your business in a short time frame.  In other words, webinars are vehicles for building your brand—and trust and loyalty along with it. If you're new to the concept of the webinar as a marketing and lead generation tool, let's review some key ways to get a return on investment for your webinar. The first steps you'll need to take are to set up your webinar infrastructure. That means creating a landing page where you can collect email sign-ups (emails that can be used for future marketing endeavors), testing your technical equipment, and creating a slide deck to present your case.  Once you're ready to start broadcasting, here's how to glean marketing value from your webinars:  1. Build your brand with timely presentations When it comes to webinars, you want to read the room. What’s on the minds of your existing and potential customers that your business can speak to? A perfect example is the novel coronavirus outbreak. If you run a B2B business, how can you channel your expertise into a presentation that informs, reassures, or otherwise provides value to other business owners?  A webinar that is more evergreen—a topic that will have value a year from now as well as today—is a good idea, too, but you may find more traction on social media and through search with a topic that people are looking for information on now.  Of course, pick a topic that aligns with your brand and expertise—the more authentic you can be, the better. Focus on the part of your business that relates to the topic, lay out goals you want the webinar to achieve, and prepare to answer questions that relate to both what your business can provide as well as the topic more generally.  Tackling questions in the moment may present a unique challenge, but this real-time response helps to build your brand as a thought leader and your business as a conversation driver.  2. Collect emails for follow-up engagement One of the main reasons why any business should hold a webinar is to collect email addresses. Email marketing is effective—it has one of the highest ROIs of any digital marketing tactic; email addresses serve as the gas in your tank here.  Access to your webinar should go behind a "gate," where you ask for an attendee's email address (as well as name and other demographic information such as age, industry, location, etc.) before granting them an invite. You can add their email to an existing email newsletter list or create a new email campaign to market your business specifically to webinar attendees.  Once the webinar is over, take the time to follow up with the most engaged and curious attendees. Remember, each one is a potential lead, or at the very least a brand ambassador who can attest to your dedication and passion.  Reach out to participants and provide a deeper explanation to questions they asked. Did someone in the audience offer a suggestion or criticism that you'd like to learn more about? Contact them and get them to elaborate.  3. Team up with affiliated partners and brands If you think you might have trouble building an audience for your first (or first few) webinars, identify a company you can partner with to co-brand and co-host the webinar. This helps introduce your business to a new audience, as well as ease the burden of planning the event. Make plans for both parties to help promote and market the webinar before, during, and after.  Not only will this boost overall attendance, but you'll have an opportunity to build a relationship with another brand, as well as introduce yourself more intimately to their existing audience.  Having guests speak at your webinars can accomplish similar goals. Bring someone from outside the company to offer new perspectives. Or, invite another member of your team to leverage their specialized knowledge.  Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting a Business 4. Convert skeptics with “deminars” Showcasing your brand's expertise on a particular topic is great, but it doesn't always mean the viewers will understand exactly what your business does or what products or services you offer.  Consider creating an additional webinar focused on how your business works, geared specifically toward people who are interested in learning more. Sometimes referred to as "deminars," their appeal is that they have the feel of a private demonstration for customers who may be on the verge of making a purchase. The format is also handy for showing current customers new products you have just unveiled. In both cases, attention to detail is perhaps more crucial than with a standard webinar. If you don't feel comfortable using a live demonstration to showcase a product, incorporate videos—which brings us to our last suggestion . . .  5. Break down your webinar into new content Another advantage of creating webinars is this one piece of content can actually be turned into several ways to reach your audience. Think of the event as a giant piece of information that can be broken apart and repurposed in smaller pieces across your various digital platforms. A webinar can power several entries for your company's blog, which you can then spread across social media. Best practices include creating a blog post (or repurposing one from your website) related to the webinar's theme, and using paid media to target a specific audience on the platform. Of all the platforms to choose from, LinkedIn may offer the best way to leverage your business's webinar content. That product demonstration we mentioned earlier? Put it on your business's YouTube channel, which has an audience that gravitates toward how-to videos.  And, you don't need to limit yourself to video. Any charts and graphics that you reference in your webinar can be useful starting points for creating a blog post or a standalone tweet. Unless your webinar is extremely timely, you should be able to find ways to repurpose your webinar content for months to come. The bottom line Webinars are an effective marketing tool and can offer your company a chance to have personal interactions with current and potential customers without expensive, time-consuming, and in some cases, logistically impossible travel. You can use the time you save by not traveling to in-person meetings to prepare a presentation on a focused topic to engage with your audience. Webinars provide the opportunity to answer questions, gather meaningful feedback, and compile leads—all without needing to leave your office (or your home).  RELATED: How to Leverage Social Media to Drive Insane Webinar Attendance The post 5 Smart Ways to Use Webinars as a Marketing Strategy appeared first on AllBusiness.com. Click for more information about Meredith Wood. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

4 Retirement Plans Designed for Small Business Owners Posted: 16 May 2020 11:09 AM PDT By Kehan Zhou Running a small business is challenging. From generating revenue to managing your employees, it's easy to forget to take care of the most important person of all: you. Retirement, a distant worry, is not a priority for many small business owners. However, it's hard to deny that retirement requires planning. Fortunately, there are several retirement plans which are designed specifically for small business owners (with or without employees) to meet their unique retirement needs. Retirement plans for smaller businesses When you are an army of one, your time is precious, and you never seem to have enough of it. From accounting to marketing, all the burdens fall on your shoulders. That's why saving for retirement should be simple and convenient. A solo 401(k) plan and a SEP-IRA are both great options designed to meet the retirement needs of solo entrepreneurs and business owners. Solo 401(k) plan As its name suggests, a solo 401(k) plan is designed for solo entrepreneurs. If you work for yourself with no employee,s you are eligible for a solo 401(k). If you have employees, you aren't eligible for this type of retirement account. The only exception is given to your spouse, who may also work for your company and participate in this plan. With a solo 401(k) plan, you can contribute up to $57,000 in 2020 to your retirement. Moreover, you can contribute to your solo 401(k) with either pre-tax dollars or post-tax dollars. A pre-tax contribution grants you tax-deferral on your savings, but you must pay taxes later when you withdraw during retirement. With after-tax dollar contributions, all your earnings and income are wonderfully tax-free. Additional features: You can contribute up to $19,500 as an “employee” (in 2020). As an “employer,” you can make an additional contribution as high as 25% of your compensation or your net self-employment income. Sole proprietors and partners of LLCs need to use their net self-employment income instead of compensation to account for self-employment taxes and plan contributions. Your spouse's contributions follow the same rules. This allows you to potentially “double up” on contributions as your spouse has the same limits. SEP-IRA The SEP-IRA or Simplified Employee Pension Individual Retirement Arrangement is a retirement plan designed for small business owners with fewer than 100 employees. One immediate benefit of a SEP-IRA is that this plan is easy to set up, with no filing requirement from the employer. Upon closer inspection, SEP-IRA allows for a generous contribution limit of $57,000. You can contribute to your SEP-IRA as both the employee and employer. However, there are two caveats to your contributions: First, your contributions as an employee will use the same contribution limit of all your IRA type accounts, a total of $6,000 in 2020. Second, when you contribute to your own SEP-IRA as the employer, you must contribute the same percentage for all your employees. Because of this contribution rule, entrepreneurs tend to avoid SEP-IRA if they have employees. However, SEP-IRA's generous contribution limit works great for solo entrepreneurs. Additional features: As the employer, you can contribute up to 25% of your compensation or $57,000 (whichever is lower). All employees over age 21 and who have worked for you for three of the last five years must be eligible for employer contributions, if they receive more than $500 in compensation in the current year. You must contribute the same percentage to your employees' SEP-IRAs as you contribute to your own (e.g., if you contribute 10% of your salary to your plan, you must also contribute 10% of your employees' salary to their plans). Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business Retirement plans for growing businesses Solo 401(k) and SEP-IRA plans work great when you have no employees. However, as your business grows, you need other plans to effectively cover you and your team. While you can consider a traditional 401(k), it comes with many administrative burdens. A SIMPLE IRA plan can be a great alternative for you. SIMPLE stands for Savings Incentive Match Plan for Employees. There are two types of SIMPLE plans: SIMPLE IRA and SIMPLE 401(k). They are mostly similar with a few differences to cater to different business needs. SIMPLE IRA The SIMPLE IRA is an easy-to-use retirement plan and is available to employers with 100 or fewer employees. Setting up an SIMPLE IRA is easy. All you need to do is to sign an initial document and share an annual disclosure with your employees. The rest is taken care of by the financial institution you choose to oversee the IRA assets. Both employees and employers contribute to SIMPLE IRAs. While employees can skip contributions, employer contributions are mandatory. Additional features: Employees may contribute up to $13,500 (in 2020). If you are age 50 or older, you can make an additional $3,000 catch-up contribution. Under a SIMPLE plan, employer contributions are mandatory. You can choose to match employee contributions up to 3% of their compensation. Or you can choose a flat 2% nonelective contribution for each employee for the first $285,000 of their compensation. SIMPLE IRA is easy to set up with minimal administrative burdens. SIMPLE 401(k) Similar to SIMPLE IRAs, SIMPLE 401(k)s are designed for businesses with less than 100 eligible employees. The contribution rules for SIMPLE 401(k)s are almost identical to SIMPLE IRAs. While the SIMPLE 401(k) has more administrative requirements, it also allows the employees to take out loans on their 401(k) savings. Additional features: Employees may contribute up to $13,500 (in 2020). If you are age 50 or older, you can make an additional $3,000 catch-up contribution. Employers with SIMPLE 401k plans can choose between a 3% matching contribution or a 2% non-elective contribution. Both contributions are subject to the $285,000 compensation cap. You must file a Form 5500 each year Loans are permitted. It’s easier than it seems Having a retirement plan for your business not only automates your retirement savings but also gives you valuable tax benefits. Additionally, offering retirement plans to your employees may encourage them stay longer with your company. While setting up a retirement plan for your business can seem daunting, it is easier than it appears. With the help of these four small business retirement options, you can quickly set up a plan that works for you and your schedule. RELATED: Best Retirement Investments That Produce Income About the Author Post by: Kehan Zhou Kehan Zhou is a financial market expert and entrepreneur with years of experience in investment banking and fintech ventures. He is the founder of Wall Strategies, which offers light yet insightful investing and personal finance articles written by qualified Wall Street traders, investment bankers, and financial advisors. Company: Wall Strategies Website: www.wallstrategies.com Connect with me on Twitter and LinkedIn. The post 4 Retirement Plans Designed for Small Business Owners appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

10 Proven Strategies to Increase Employee Productivity Posted: 16 May 2020 10:43 AM PDT Every business owner wants their employees to be as productive as possible. For the business, higher productivity means more value per dollar spent on salaries; for the employees, higher productivity means more satisfaction with their work performance when they're able to achieve meaningful results. However, achieving productivity within a team of employees is harder than it seems. You're juggling dozens of variables, including varying employee attitudes and working conditions. Fortunately, there are plenty of strategies you can use to increase employee productivity in almost any scenario. How to increase employee productivity These strategies all have the power to increase employee productivity in your organization: 1. Improve recruiting and hiring Some people are simply more productive and better disciplined than others. Accordingly, one of the earliest and most effective steps you can take to increase your team's productivity is to master your recruiting and hiring. Choose people who seem self-motivated and high-achieving, and make sure they're a good fit for your brand. 2. Give your employees the right tools This includes both hardware and software tools. If your employees are working with decade-old laptops, or if they're using freeware that has limited functionality, they're probably not going to give you their best performance. You don't need to spend an exorbitant amount on new tech, but even minor upgrades can make a major difference. 3. Instill autonomy Research suggests that the most important factor in employee happiness (and by extension, productivity) is autonomy, or the ability to make independent decisions. Depending on your workplace, this could mean allowing employees to choose their own projects, adjust their own schedules, or just work on tasks without close supervision. If you trust your employees, let them take charge of their own work—you'll both be happier for it. 4. Polish your communication Miscommunications and poorly timed communications are responsible for massive productivity loss, and in many different ways. Poorly worded messages can lead employees to incorrect opinions, resulting in wasted time on unnecessary priorities. Similarly, unarticulated expectations are almost impossible to meet. Improve your communication overall, by giving employees more mediums to use, setting standards for relaying certain types of messages, and noting instances of miscommunication that could be improved in the future. 5. Reduce meetings Meetings are a major source of time waste in most organizations, in part because they're held for their own sake, and in part because they involve so many different people. You can improve meetings by appointing a leader, setting an agenda, and reducing tangents, but it's even better to reduce the prevalence of meetings altogether. For example, you can reduce the number of meetings you have and simultaneously reduce the time taken in each meeting. The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business 6. Prioritize health and self-care If employees are sick, unwell, or unhappy, they're not going to work effectively—and they're going to be miserable in their personal lives as well. Try to prioritize health and self-care in your business whenever possible. Allow your employees to take breaks and vacations, and listen to them if they say they feel unwell or uneasy. 7. Improve morale Higher morale is almost always correlated with higher productivity. There are several ways you can improve morale: for example, you can hold regular team building events and bring people together for lunch or after-work drinks. You can also introduce more amenities or benefits to the workplace, like a dynamic break room or more favorable parking spaces. 8. Reward good performances When someone does a good job, reinforce their performance with a reward. Depending on your business, you could offer monetary rewards like bonuses or raises, but these aren't necessary. You can offer plenty of positive reinforcement with a simple, congratulatory message (especially if it's public, so other employees can see). 9. Give regular feedback One of the easiest ways to improve productivity is to let your employees know how they can improve. If they're doing a great job, reinforce their efforts; if they're lacking in some key area, tell them how they can get better. Annual reviews are ideal for this, but you may want to give casual feedback more often. 10. Ask for feedback Feedback is a two-way street. Don't just give your employees feedback; ask them for feedback as well. They may tell you about ways they're dissatisfied with the business, or point out ways you can improve the workplace to encourage more productivity from everyone. Take their opinions and insights seriously. Variables and experimentation Remember, every organization is different, and what works for one team (or one individual) may not work well for another. One of your greatest keys to success will be ongoing experimentation, implementing many different strategies and approaches to see which ones stick. Measure employee productivity consistently, and pay attention when it increases or decreases. Eventually. you will find the right combination of tactics for your team. RELATED: 10 Productivity Tools That Entrepreneurs Can't Live Without The post 10 Proven Strategies to Increase Employee Productivity appeared first on AllBusiness.com. Click for more information about Jayson DeMers. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

Indirect Marketing: Learn What It Can Do for Your Business That Direct Marketing Can’t Posted: 16 May 2020 10:22 AM PDT By Kat Solukova Is there anything more annoying than in-your-face marketing? Pop-up ads, cold calls, and sales emails are all intended to get consumers to buy more from you. Unfortunately, this type of selling is more likely to irritate customers than impress them. In a world where customers have become less accepting of ads, businesses can't afford to be overly blunt with their promotional campaigns. After all, your customers are bombarded with sales materials every day. It's no wonder they get sick of all the commercial offers popping up on every website they visit. So, should businesses give up on marketing entirely? Not exactly. Company leaders still need a way to connect with their audience and convince them to buy. However, you can use a more subtle approach to attract new customers. Unlike direct marketing, indirect marketing focuses on casually creating a connection with your target audience. You can use indirect marketing to retain new customers, increase loyalty, and develop more business. What is indirect marketing? Indirect marketing is a way for companies to advertise their services, products, or ideas without having to spam customers with high pressure (in-your-face) sales tactics. For example, if a company wanted to advertise an upcoming event to a customer directly, they could send an email to consumers letting them know about the event and how to get signed up. On the other hand, if you wanted to get your customers informed about the same event indirectly, you could use a press release to announce your upcoming event, with quotes from your executive team, and perhaps references to previous events, or you could get influencers to share the event across social media. Indirect marketing is a valuable component of both brand recognition and awareness. However, like any kind of advertising technique, indirect marketing comes with both positive and negative attributes to consider. Pros: It's a softer and subtler approach to marketing that doesn't feel annoying or overwhelming to your target audience. It delivers value through useful information that answers customer questions about your brand. It's usually a lot less expensive than direct marketing; you can usually create your own content with ease. You build brand awareness and strengthen your reputation without being overly obvious. You strengthen your relationship with your customers. Cons: Indirect marketing involves casting a wider net, which means you can't always be sure whom you're going to attract with your campaigns. Your profit margins may be lower, as you're using an indirect way of selling your message. It's a long-term strategy that doesn't always yield results overnight. It requires consistent upkeep so that it can continue to deliver results. One major downside of indirect marketing is it's difficult to measure. Indirect advertising is all about building trust and relationships with your audience over time. Unlike direct marketing, where you can instantly see how people are converting based on your ads, you might not be able to see an immediate return on investment with your indirect campaigns. How does indirect marketing compare to direct advertising? Indirect and direct marketing strategies are very different beasts. Direct marketing is a far more obvious way of connecting with potential leads. Through in-person sales calls, print advertisements, sales letters, and more, you chase your customers. The idea is that you continue to present your service or product to customers until they're ready to buy. Common examples of direct marketing include: Pay-per-click advertising and remarketing Direct mail flyers and sales letters Email advertising campaigns Phone sales calls Print advertisements In-person meetings Direct marketing grabs the attention of an audience and entices them to purchase a specific product or service. This advertising strategy is a fairly common practice among businesses. In the race to success, the direct marketing strategy is the hare, designed to rapidly convince potential customers to take action right away. Alternatively, indirect marketing is the tortoise. It's the less in-your-face approach to connecting with customers. While your goal may still be to sell things, you don't have to be as obvious about it. Instead of posting an ad online, you might write a blog about how your product helps people, and publish case studies about specific results. Common types of indirect marketing So, how do you invest in your own indirect marketing strategy? Usually, a good indirect marketing campaign will include a multitude of strategies. To effectively enhance brand recognition and awareness, you'll need to make sure that you're reaching your customers across a variety of channels, including YouTube ads, content marketing, SEO, and more. Here are just a few kinds of indirect marketing that you can consider for your business: 1. Content marketing Content is one of the most effective ways to promote businesses today. With content marketing, you create blogs, podcasts, videos, and other materials to capture the attention and interest of your target audience. While your underlying goal might be to increase sales, you start by offering information and entertainment. The great thing about content marketing is that it gives your customers access to free value. With a blog or a podcast, you can instantly get people engaged with your brand. You may even be able to convince customers to join your brand community by giving you their email address or other contact details in exchange for premium content. There are plenty of companies out there that use content marketing to enhance brand awareness and thought leadership. For instance, Uber Blog publishes city-specific content to provide information that's relevant to a specific audience. 2. Search engine optimization (SEO) Search engine optimization, or SEO, is an indirect marketing strategy that often goes hand-in-hand with content marketing. SEO refers to the activities that a business can take to ensure it shows up as the highest-ranking result when potential customers are searching for services. An SEO campaign will often include on-page strategies that involve things like keyword analysis. Alternatively, you can also look at things like off-page SEO. With off-page SEO, you reference your website in guest blogs and other content to get more attention going back to your site. SEO is how you make your content more discoverable to a greater variety of people. If you can appear at the top of the search engines, your chances of capturing audience attention go through the roof. What's more, most customers see brands at the top of the search engines as more reliable and credible than their counterparts. SEO isn't just for big companies either; in fact, a lot of smaller businesses use local SEO strategies to target their customers, too. Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business 3. PR Good PR has always been a valuable aspect of growing a business. With the right PR, you can ensure that you're improving the overall credibility of your company. After all, while you can always tell people that your business is excellent, that claim is much more believable when it comes from a third party. The benefits of good PR include: Enhanced company credibility Higher sales levels More investors More top industry experts willing to work with you A boost for your SEO through backlinks Effective PR isn't just about connecting with journalists and media outlets. If you want your strategy to work, you need to think carefully about the reputation you are building for your brand, and how you can maintain the right image. You don't just have to do the standard press release either. Companies can get creative and see some fantastic results. Lyft and Netflix worked together to create a sensational PR campaign to promote the second season of Stranger Things.  The two companies immersed Lyft customers in an environment similar to the series’ fictional Hawkins, Indiana, location to create excitement around the brands. Strange Mode: Lyft x Stranger Things By Kat Solukova Is there anything more annoying than in-your-face marketing? Pop-up ads, cold calls, and sales emails are all intended to get consumers to buy more from you. Unfortunately, this type of selling is more likely to irritate customers than impress them. In a world where customers have be 4. Social media Creating a committed social media following is one of the best ways to enhance your indirect marketing campaigns. This strategy makes it easier for companies to stay top of mind with the people who follow them. The trick is to make sure you're consistent and memorable with your social shares. Start by finding out where your audience spends most of their time online. For instance, some companies will get better results with Instagram, whereas others engage more followers with Facebook. Once you've got the platform right, you can think about the content you're going to share. In addition to posts that immediately highlight the benefits of your products and services, make sure you are taking advantage of user-generated content. For instance, Innocent Drinks regularly reposts content from fans on Twitter to highlight the benefits of company initiatives. For example, this post shows off a cute picture, while reminding customers that buying an Innocent Smoothie also benefits charity foundation @Age_UK: Combine direct and indirect marketing Indirect marketing strategies come in a range of flavors. Businesses today can experiment with everything from content marketing to user-generated content and referrals. However, you don't necessarily need to make a choice between direct or indirect marketing. In fact, you could benefit more if you're willing to combine the two. For instance, you might create blogs that convince customers to sign up for your newsletters. Only once your audience has had a chance to learn about your business and build trust with your brand will you start sending out direct advertising messages through email. Striking the right balance between indirect and direct marketing will mean you can strengthen your chances of building relationships with your target audience. Rather than just strengthening connections for the long term, or focusing on conversions in the short term, you can get the best of both worlds. RELATED: How to Create an Integrated Marketing Strategy for Your Small Business About the Author Post by: Kat Solukova Kat Solukova is the Co-founder and Head of Strategy at Engine Scout, a boutique digital marketing agency based in Melbourne, Australia. Engine Scout helps businesses to generate more sales through the combined power of Google and Social Media. You can reach her directly at her website or LinkedIn profile. Company: Engine Scout Digital Marketing Agency Website: www.enginescout.com.au Connect with me on LinkedIn. The post Indirect Marketing: Learn What It Can Do for Your Business That Direct Marketing Can't appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

5 Smart Advertising Strategies During the COVID-19 Crisis: Why You Should Be Spending More Right Now Posted: 16 May 2020 09:21 AM PDT By Wesley Cherisien Many advertisers are experiencing sharp declines in revenue due to the worldwide economic downturn caused by COVID-19, and while 70% of the global population is spending more time on their mobile devices due to mandatory lockdowns, ad revenue in the United States has dropped by 17.2%. Interactive Advertising Bureau, an online ad industry trade group, conducted a poll surveying 400 cross-industry ad buyers to measure the pandemic's effect on advertising plans. Nearly 25% of the polled respondents stated that their advertising budgets for the second quarter of 2020 had been paused. Another 46% admitted to reducing their ad spend with total digital spend for the period March–June projected to decrease by 33%. Total global ad spend is down $20 billion from the beginning of the year, reflecting measures to drastically adjust budgets or slash them completely. Industries experiencing advertising downturns While the story is not the same for every company, there are industries that are more affected than others. When it comes to the global hospitality industry, airlines, cruise lines, hoteliers, car rental companies, and casino promoters have come to a complete standstill. In 2020, global travel was estimated to contribute $711,944 million in GDP; however, that has been adjusted to $568,583 million, which is less than the 2019 total of $685,065.  Additionally, according to marketing expert Neil Patel, conversion rates for industries such as agriculture, construction, e-commerce, education, energy, finance, insurance, manufacturing, real estate, retail, software/technology, telecom, and transportation have all suffered declines since the pandemic. Due to this, many small and mid-size businesses that have traditionally leveraged digital advertising to attract new customers are drastically reducing their ad spending as they struggle through lower conversions driven by customer fear amidst economic uncertainty. Analyzing advertising costs before and during COVID-19 As fewer advertisers compete for advertising space, advertising costs across industries have steadily decreased. Global CPM (cost per 1000 impressions), when measured across 18 industries in Q1 2020 was $0.81 when compared to Q4 of 2019 ($1.88).  Advertisers targeting customers specifically on Facebook have also experienced significantly lower ad costs. In March of 2020, advertisers paid $0.09 on average per click, compared to the beginning of the year when the cost was $0.11, representing nearly a 20% reduction in the first quarter alone. While advertising costs are indeed becoming cheaper, capitalizing on declining ad costs will require a strategic marketing effort with a message that speaks to your target audience in a way that meets their needs during the present time. Other Articles From AllBusiness.com: Small Business Relief: COVID-19 Resources for Startups Financial Help for Freelancers and Independent Contractors Affected by the Coronavirus Crisis What Advice Are Venture Capitalists Giving to Startups in Light of the Coronavirus? 5 Ways to Improve Employee Communication During the COVID-19 Crisis Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know How to manage a successful advertising campaign during the COVID-19 Crisis Given the current climate, businesses will need to adjust their advertising campaigns to reflect solutions that meet the immediate needs of consumers. The following are a few strategies that companies can implement to leverage the new advertising landscape: 1. Understand that consumers want to hear from you during this time While many advertisers may believe consumers do not want to be bothered during a time of crisis, the opposite is true. Consumers do not think that brands should stop marketing during the COVID-19 pandemic and actually want to hear from their favorite brands. When surveyed, over 77% of respondents said they want to see advertisements that explain how the brand is providing value and being helpful during this challenging time.These consumers are looking for solutions and are willing to give brands an opportunity to earn their trust. 2. Focus on serving first and selling later If your marketing was converting a few weeks ago and is now falling flat, the problem isn't your strategy–it's your messaging. Given the current climate, prospective customers are not focused primarily on accomplishing goals, relationships, prestige, or social class. Many people are afraid amidst the current uncertainty and are looking to address their basic psychological needs of food, water, warmth, safety, and rest. This is the framework of the basic human needs that was introduced by Maslow in the "Theory of Human Motivation," published in 1943. Focus on fine-tuning your marketing message to speak to prospective customers where they are right now. Address their current state and find ways to help them meet their most urgent needs.As you provide immense value and become a resource your customer can trust and depend on, the life cycle of the customer journey begins. Over time, you can introduce products and services that will facilitate a move up the hierarchy, but only after you've addressed and assisted in sustaining the essentials. 3. Add and nurture new leads via email to remarket in the future If your business is service-based, local or online, then it is likely that you send emails to engage your customers. As businesses have been forced to slow down operations or shut down due to the pandemic, the time has never been better to shift your email marketing strategy from sales-focused to value-based communication that targets nurturing both old and new subscribers. Email marketing has been shown to have an ROI of $44 for every dollar spent on advertising. Leveraging lower advertising costs, you can create an email list building campaign to attract interest in your brand and increase subscriber sign-ups to your customer database. By building a new target audience, you will have the opportunity to remarket to them in the future, which has been reported to increase conversion up to 51%. An example of this strategy would be companies that sell physical products. Are there any tips you can share that will help customers achieve similar outcomes that your product would yield even if they cannot currently afford to buy from you? Focus on helping people in this time by providing solutions. In the future you can offer your product as an ancillary add-on that helps achieve the goal when you are further along the customer journey. Fitness clubs have also implemented this strategy by emailing their subscribers workout routines that can be done from the comfort of home while still achieving results; the end goal is to ensure that customers return to the gym at a future date, yet the strategy is to provide value that meets the current need. 4. Be patient with running ads that are performing well Starting in March 2020, Facebook announced that due to staffing changes, advertisers were to expect errors and delays as the company began relying more on automated advertising review systems. With a strong belief that many other major players in advertising may follow suit, to avoid delays that might cost you revenue in the long term, it is best to extend the delivery period of your best performing ad sets. So instead of starting a new campaign when making tweaks to your ad, choose to edit your currently running ad as new campaigns are subject to staff review and can be delayed when going live. 5. Create brand awareness by capitalizing on the presence of your online audience In March, the number of consumers online had been increasing by 20% week over week during the shutdown. We know this means there is an opportunity for advertisers to cost-effectively gain the attention of a larger audience. As we've discussed earlier, this is basic supply and demand. Certain companies have seen a 12.7% decrease in CPM from the beginning of the year to March. Instead of focusing on sales and short-term conversions, advertisers should be providing content that adds value and creates awareness around their brand. These elements can include:       Solutions in the form of content and/or tools that solve current problems       Discounts on essential services to alleviate the effects of economic strain       Free challenges that improve the lives of consumers       Campaigns to build positive online reviews  This is especially important for local and small businesses who rely on consumer loyalty. While our current crisis has generated fear and a sense of uncertainty for many advertisers, it has also created an incredible opportunity to build a foundation of consumers who possibly will become loyal to your brand. These are the same customers that will one day need and seek out your product or service, even if they don't necessarily see a need for it at the present time. RELATED: Marketing Your Business in a Coronavirus-Affected World About the Author Post by: Wesley Cherisien Wesley Cherisien is a speaker, trainer, entrepreneur and tech investor and has personally penned hundreds of articles, books, and training guides for organizations in the Fortune 500, consultants, and authors spanning across multiple industries. Chief Editor of WesleyCherisien.com, Wesley is a creative and highly innovative thinker with 10+ years of experience writing for online publications. His work has been featured in Entrepreneur Magazine, Fox News, Business.com, The Good Men Project, Business 2 Community HR Magazine, and CareerBuilder. Company: Mutual Digital Website: www.wesleycherisien.com The post 5 Smart Advertising Strategies During the COVID-19 Crisis: Why You Should Be Spending More Right Now appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. 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Forget About Social Media Influencers—Here’s How to Better Market Your Business With Brand Advocates Posted: 16 May 2020 08:49 AM PDT Most people are familiar with influencer marketing—the concept of using popular social media influencers to help promote your business. Working with influencers can sometimes be beyond a small business's budget. That's where brand advocates come in. What are brand advocates? Brand advocates differ from influencers in several important ways. The influencer's goal in promoting your product or service is to make money for themselves or grow their follower/fan base. The relationship is transactional: If you stop paying them, they stop promoting you—it's that simple. Brand advocates, however, aren't in it for the money. They're regular customers who want to tell others about your business because: They think your business is awesome. They want to help their friends find great stuff. They like to share their opinions. They enjoy being known as the person who always has a recommendation for the best restaurant, best landscaper, or best hairdresser in town. Most brand advocates are already customers of your business, but you can also recruit potential brand advocates in other ways (more on that below). What brand advocates can do for your business Customers know that big-name celebrities and social media influencers are paid to promote the products or services they share on social media. As a result, they may be skeptical about how great the product or service really is. If customers see a friend posting about a product or service, however, they are more likely to pay attention and find the promotion credible. In fact, it won't even seem like a "promotion" but rather just a genuine appreciation of the product. This authenticity gives customer brand advocates a value that money can't buy. Where to find brand advocates There are several ways to find potential brand advocates: Sales records: Your salespeople or sales records (particularly for a B2B or service business) can tell you which customers buy from you most often, who the most loyal customers are, and who spends the most. Social media: Pay attention to your social media accounts and the customers who engage with you there. Use social listening tools to search for posts outside your accounts that mention your business, products, or services. Don't forget about local social media sites, such as Nextdoor. You'll often find people on these sites asking for recommendations to local businesses or services. Search for mentions of your business and you might be surprised who is recommending you. Online reviews: Look at your online reviews to see who's giving you great reviews. (Even customers who give negative reviews can become brand advocates if you reach out and solve their problem, turning them into satisfied customers.) Email marketing: Monitor the analytics of your email marketing campaigns to see which customers always open their emails or always click through their emails, and what they do afterwards. Searching online: You can find potential brand advocates who may not be customers yet by searching for people who frequently post on topics related to your business. For instance, if your business sells housewares, look for people who post a lot about cooking or entertaining at home. (For this type of brand advocate, make sure they fit your target customer profile.) Employees: Your employees can also be brand advocates, but it's important to make sure this comes across as authentic. If your employees genuinely use and love your products—for instance, if you own a hair salon and your stylists love trying out new hair colors—encouraging employees to post and share about your business can be effective. But, if it sounds like your employees are being forced to promote your business, it will backfire. Once you've found some potential brand advocates, reach out to them to make a connection. Engage with them on social media. Comment on or reply to their posts or tweets that are relevant to your business. Send an email or direct message thanking them for their positive thoughts about your business and see if they'd like to further engage. Other Articles From AllBusiness.com: The Complete 35-Step Guide for Entrepreneurs Starting a Business 25 Frequently Asked Questions on Starting a Business 50 Questions Angel Investors Will Ask Entrepreneurs 17 Key Lessons for Entrepreneurs Starting A Business How to make a brand advocates part of your marketing Your connection with brand advocates must be a two-way street, not just about promoting your business. Start by building a relationship that makes them feel special. Treat your brand advocates as an inner circle that you can turn to for feedback and input on your business. If you're considering launching a new product or service, have your brand advocates participate in a focus group about it. Enroll them in your business's loyalty program and give them loyalty rewards in return for their promotional efforts. Give them gifts, discounts, or other incentives for promoting your business. Here are some other powerful tools for brand advocate marketing: Sampling: Send them free samples to try. Depending on the person, they might want to share a short review or just post a video or photo of them using or opening the product. If you have a service business, offer them a free service like a free makeup lesson at your salon or free power wash of their house. You can choose your most popular products or services, new products or services that you're introducing, or products and services that you've put on sale. Sharing: Encourage brand advocates to share your content on social media and make it easy for them to do so. (If you sell to other businesses, reciprocating by sharing their content can help build the relationship.) Discounts: Give brand advocates a discount code they can use and share on social media or by email. Content: Encourage brand advocates to create content around your product or service. This doesn't have to be complicated—just including a photo or quick video will make their posts more appealing. Identification: Remind your brand advocates to include the appropriate hashtags, brand names, and other identifiers with their posts about your business. Using brand advocates can be a great way to build your audience and promote your products with authenticity. Plus, you'll develop closer relationships with your best customers—and that can't help but improve your business. RELATED: 3 Ways to Use Micro-Influencers to Grow Your Business The post Forget About Social Media Influencers—Here's How to Better Market Your Business With Brand Advocates appeared first on AllBusiness.com. Click for more information about Rieva Lesonsky. Copyright 2020 by AllBusiness.com. All rights reserved. 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How to Manage a Gap in Your Income During the Coronavirus Crisis Posted: 16 May 2020 08:33 AM PDT By Baruch Silvermann Regardless of where you live or what industry you work in, you're probably feeling the effects of the coronavirus crisis. The spread of COVID-19 has caused much more than just health problems—it's also affecting the way our economy works. In order to protect people from the virus, many businesses have come to a halt. In many places, all non-essential businesses have been forced to close. As a reaction, global markets have fallen on a sharp downward trajectory since February, when the virus started to spread. At the end of April, the Dow Jones was down 15.1% since the start of the outbreak, and that's after hitting rock bottom in mid-March. This means that day-to-day life for workers has changed dramatically in the span of just a few weeks. For those who work in food, hospitality, or retail, this can mean an indefinite layoff, or at the very least, a loss of work hours. The economic impact is so widespread that even office workers outside of affected industries may be experiencing temporary layoffs due to lost revenue. Freelance and gig workers also have been heavily impacted as many companies don't have the money to spend on non-essential services. Simple ways to cut costs during an income gap If you're experiencing a loss of income right now, there are things you can do to weather this storm financially. This means looking for new opportunities, as well as changing the way you currently spend money. Here are some steps you can take to get through this time of financial instability. The first thing to do is look for ways to cut costs. It's likely that you're already cutting back on your spending anyway, since you won't be going out to eat or shop as much. However, there are plenty of other expenses you can reassess to cut back on spending. For example, now is a great time to look at your transportation costs. You may want to consider temporarily cancelling your auto insurance if you won't be driving, or even switching from a car to a bike. Another way to cut costs is to reassess the way you eat and drink. If you normally stick to prepared foods, now might be the right time to master a few basic recipes. Although many restaurants offer takeout, try to resist the temptation and cook at home instead. Look at your other expenses—which ones are truly necessary and which ones can easily be replaced? Clothing, fitness, and entertainment are all areas to look at when cutting back. Once you've decided where to cut costs, write down a temporary budget for the next few months. Start by writing down your non-negotiable expenses, such as rent, groceries, and utilities. Then add the amount of money you'll have coming in during this time, if any. Once you have everything on paper, you'll be able to determine how much you can spend, or if you're running at a deficit, how much money you'll need to make. Boost your cash flow during coronavirus There are a number of ways you can supplement your income during this time, so that you still have money coming in. If you have savings or an emergency fund set up, now is the time to use it. However, try not to deplete your savings right away; keep in mind that right now we don't know how long the COVID-19 crisis will last or what sort of financial challenges you may be facing in the future. Everyone who has lost work should also apply for unemployment assistance funding. The federal government recently voted to expand unemployment protection. This means that freelancers and other employees who may not have qualified for unemployment in the past will now qualify for benefits under the CARES Act. Related Articles: Financial Help for Freelancers and Independent Contractors Affected by the Coronavirus Crisis Where's the Money? The Top 10 Frequently Asked Questions About CARES Act Loans Small Business Relief: COVID-19 Resources for Startups Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know 9 Answers to Your Most Pressing Unemployment Questions The CARES Act provides an extra $600 per week in unemployment payouts for those who are already getting them, as well as the ability for self-employed and gig economy workers to apply for unemployment. Unemployment benefits may not completely cover your former paycheck, but they are designed to cover basic expenses. Even if you are planning on going back to work as soon as possible, it's worth taking advantage of any benefits you qualify for to help you stay afloat during this crisis. Additionally, you may want to consider taking loans from family or close friends during this time. Although it can be difficult to ask for help, this is a more effective strategy than taking out a loan from a bank or relying on credit cards, because you won't have to worry about interest or any hits to your credit score. If you own a business,consider taking out a zero-interest small business loan from the Small Business Administration to sustain your operations. There are also plenty of ways to make a little bit of extra cash from home with a reliable internet connection. If you've always wanted a "side hustle," now is as good a time as any to get started with a new venture. It's important to be realistic about what you can earn during this time. Chances are, you won't be able to completely replace a paycheck from a full-time job, but you may be able to soften the blow of a job loss. Start by looking for ways to monetize the skills you already have. For example, if you have extensive experience in business, finance, or marketing, you may be able to work as a part-time consultant for brands online. If you like to make jewelry, kitchenware, or clothing, consider selling your wares on an online marketplace like Etsy. There are a number of easier ways to make money from home as well: by taking online surveys, testing apps, transcribing audio files, or even just selling your old items on eBay. It may not make you rich, but those extra dollars can add up quickly. Key behaviors to avoid during the quarantine If you've lost work as a result of COVID-19, it can be tempting to jump at any opportunity for some extra cash. However, there are some things that can actually hurt your financial standing more than they help. Here are some financial risks you should avoid taking during this time. Relying heavily on credit cards. It can be very tempting to open additional credit cards or to use them for all of your expenses. However, this can have disastrous financial consequences later on. It can negatively affect your credit score, particularly if you aren't able to make your payments on time. A poor credit score can make it difficult to rent an apartment, take out a mortgage, lease a car, and more. Credit cards also come with high interest rates, so you'll end up needing to pay back much more than you originally borrowed. Incurring high-risk, high-interest debt. Personal loans, particularly payday loans, come with high interest rates and will negatively affect your credit score if you can't pay them back on time. You should also avoid taking out home equity loans or car title loans, as these loans are directly tied to your essential property. Borrowing from your retirement account or your life insurance policy. These accounts are usually set up to grow over a certain number of years with an investment plan. In some cases, you'll have to pay back the money you borrowed from your account. Since these accounts invest your money, it could be very difficult to replace the funds that were previously in your account. If you have stocks outside of these accounts, you should avoid selling them as well. Even if your stocks are losing value in the short term, it's important to remember that the markets will fluctuate several times before this crisis is over. Chances are, you'll end up with more money in the long run by just riding it out. Panic buying essential items. While it's a good idea to have a few extra toiletries and supplies on hand, don't overdo it. Not only does this make it difficult for other people to get the resources they need, but it also means you're overspending in a time when you just don't have the cash flow to sustain it. Now is also not a good time to make large purchases like a car, expensive electronics, or a vacation. Dealing with a loss of income can be very challenging. Because this crisis came on suddenly, it was difficult for even those with the most stable finances to prepare for. It's important to remember that we are all in this crisis together, and although there will be some tough months ahead, things will eventually go back to normal. Taking steps to adjust your budget and looking for reliable new sources of income can help to soften the blow and keep your finances stable until you regain your income. RELATED: Free Money From the Government for Small Businesses and Independent Contractors: FAQs on the Newly Expanded SBA Grant Program About the Author Post by: Baruch Silvermann Baruch Silvermann is a personal finance expert, investor for more than 15 years, digital marketer, and founder of The Smart Investor. But above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future. Company: The Smart Investor Website: www.infoforinvestors.com Connect with me on Facebook, Twitter, and LinkedIn. The post How to Manage a Gap in Your Income During the Coronavirus Crisis appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

How to Negotiate a Business Acquisition Letter of Intent Posted: 16 May 2020 12:00 AM PDT Revised and updated May. 16, 2020 In acquisitions of privately held companies, a letter of intent/term sheet is often entered into by both parties. The purpose of the letter of intent is to ensure there is a "meeting of the minds" on price and key terms before the parties expend significant resources and legal fees in pursuing an acquisition, and before sellers agree to grant exclusivity to buyers. The purpose of this article is to explore the key issues in negotiating and drafting an acquisition letter of intent. What Is Typically Included in a Letter of Intent? A letter of intent can be short or long, depending on the dynamics of the negotiations and the desires of the parties. Here are the types of items that can be included in a letter of intent, a number of which are discussed in greater detail later in this article: Price/Consideration—Will it be all cash, all or part stock, earnout, or promissory note? Adjustments to the purchase price—Will it be a cash-free/debt-free deal? A working capital target at closing and adjustment mechanism? Treatment of severance costs and transaction fees and expenses? Transaction structure—Will it be an asset purchase, purchase of all outstanding shares, or a merger? Expected timeline for due diligence and negotiating the deal Any escrow to secure the seller's indemnification obligations, how long the escrow will last, and for what items the escrow will be the buyer's sole remedy for claims Whether M&A representations and warranties insurance will be used in lieu of an escrow and who pays for the policy Exclusivity for the prospective buyer—How long will exclusivity last? When can the seller terminate exclusivity early? Access to the employees, books, and records of the seller for the benefit of the buyer as part of its due diligence process Scope of key representations and warranties of the seller (will some key reps be subject to qualification by a "materiality" or "knowledge" standard?) and survival period Incentive arrangements post-closing for employees How seller employee options and equity held by employees will be treated (will they be assumed by the buyer or terminated?) and whether these are in addition to the purchase price Activities prohibited by the seller pending closing Whether any third-party consents to seller's key contracts will be required or sought, as a consequence of the acquisition The confidentiality obligations of the parties concerning the transaction (and ideally a non-disclosure agreement will already be in place by the parties) How seller's employees will be hired/treated by the buyer Continuing indemnification obligations of the buyer for seller's officers, directors, employees, and stockholders, pursuant to any existing Indemnification Agreements or charter provisions Conditions to closing the transaction, both for buyer and seller Whether any non-compete/non-solicit agreements will be required Indemnification obligations by the selling stockholders and the limits and exclusions from  such indemnification provisions How and when the acquisition agreement can be terminated How disputes will be handled and in what jurisdiction Short-Form vs. Long-Form Letter of Intent Long-form letters of intent are more comprehensive and legally constructed, and designed to reach a meeting of the minds on many of the key terms of a potential deal. The key advantages of a long-form letter of intent are: Issues that can be deal breakers are identified early on and resolved, before spending significant legal fees and management resources for both the buyer and seller. Resolution of significant issues early on can make the process of reaching a definitive acquisition agreement easier and more efficient, with resulting savings in time and legal fees. If an important issue surfaces as insurmountable, for sellers it is better to learn that early, rather than learn about it when the seller is in exclusivity and a termination of discussions at that point could be more damaging or difficult for the seller. The primary disadvantage of a long-form letter of intent is that it may bog down the momentum of getting a deal done, as the parties deal with too many difficult issues early on. It may also result in the breakdown of the negotiations that could have been avoided if certain issues had been deferred. A short-form of letter of intent will usually only address the price and perhaps a few key terms (such as any escrow holdback for seller's indemnification protection, length of escrow, and the exclusivity/no shop right for the buyer) and has the advantage of being quicker to negotiate than a long-form letter of intent. The obvious disadvantage is that it leaves many important issues to be resolved later on. The Selling Company's Perspective From the perspective of the selling company, it will typically want the letter of intent to be as detailed as possible on the key issues of the deal. The reason is that once a letter of intent has been signed and an exclusivity negotiating period has been granted to a buyer, the leverage in the negotiations will swing to the buyer. Therefore, the seller will often want to have a complete picture of the price and deal terms before it is locked up and precluded from talking to other potential buyers. And the more detailed the letter of intent, the more likely that a definitive acquisition agreement can be negotiated successfully. The best time to get key concessions from a buyer is when the buyer believes there are competing bidders and where it does not have exclusivity. For common mistakes by sellers in acquisitions, see 22 Mistakes Made by Sellers in M&A Transactions. The Buyer's Perspective From the buyer's perspective, especially where the buyer has considerable negotiating leverage, it will favor a short-form letter of intent which includes a long period of exclusivity in order for it to finish its due diligence and negotiate a definitive merger or acquisition agreement. The buyer typically will argue that it can't agree to some of the key terms of the deal in the letter of intent until it completes its due diligence. (The seller will dispute that argument—the buyer can agree to key terms, but if problems arise in its due diligence, it is always free to renegotiate any provision.) In some situations, it is in the buyer's interest to also have a detailed letter of intent to avoid spending lots of management resources and legal fees on a deal that might not get consummated. Binding vs. Non-Binding Terms of the Letter of Intent The letter of intent will typically state that it is non-binding, except for certain designated provisions. Usually at this stage in the acquisition process, neither the buyer nor the seller are willing to be bound to conclude a transaction. Further, the letter of intent does not contain all the terms that should be agreed upon in an acquisition. Nevertheless, certain provisions are typically designated as binding such as: Confidentiality: The letter of intent and its terms should be agreed to be confidential and typically subject to the non-disclosure agreement between the parties. Exclusivity: The scope and terms for exclusivity granted to the buyer. Expenses: Statement that the parties each bear their own expenses or, in some instances, whether one party (usually the buyer) will cover some of the other party's expenses. Conduct of the Business: Buyers sometimes insist that sellers agree to operate the selling company's business only in the ordinary course and refrain from certain material actions. Dispute Resolution: The parties sometimes agree that any disputes surrounding the letter of intent would be resolved exclusively by confidential binding arbitration. The letter of intent should clearly state which portions are binding and which are not. Lack of clarity on this point might allow a court to enforce (or refuse to enforce) a provision contrary to the intent of the parties. Exclusivity for the Buyer/No Shop The buyer will typically insist on a binding exclusivity/no shop period where the seller and its officers, directors, representatives, advisors, employees, stockholders, and affiliates may not engage in any discussions or negotiations with, provide information to, or enter into agreements with any other prospective buyer. The seller is also precluded from "shopping" the buyer's bid or the company. The exclusivity provision will also typically require the seller to immediately terminate any other sale discussions. The buyer will also ask that it be notified of any inquiry or offers from other potential buyers during the exclusivity period, and the terms thereof (including the identity of the third party). The seller will want to keep the exclusivity period short (for example, 15 days) and the buyer will typically want longer (for example, 30-60 days). Because of the issues surrounding COVID-19, some buyers may request even longer periods of exclusivity because of due diligence issues. The seller should insist on a sentence that allows it to terminate the exclusivity period early if the buyer subsequently proposes a lower price or materially worse terms, or if the seller believes in good faith that the parties are not making sufficient progress on finalizing a deal or the buyer is not keeping up with the time table agreed to by the parties (discussed below). The buyer will, of course, resist giving the seller a basis to terminate exclusivity early since the buyer will begin spending substantial resources on conducting due diligence and preparing documentation. In many instances, the compromise will be an exclusivity period somewhat shorter than the buyer desires. Price for the Acquisition The price for the deal is obviously the key issue, but the letter of intent should make clear: Whether the price will be paid all cash up front. If stock is to be part or all of the consideration offered by the buyer, the terms of the stock (common or preferred), liquidation preferences, dividend rights, redemption rights, voting and board rights, restrictions on transferability (if any), and registration rights. If a promissory note is to be part of the buyer's consideration, what the interest and principal payments will be, whether the promissory note will be secured or unsecured, whether the note will be guaranteed by a third party, what the key events of default will be, and the right to accelerate payment of the note upon a breach by the buyer. Whether the company will be "debt free and cash free" at the closing or whether the buyer will assume various indebtedness. Whether there will be a working capital adjustment and how working capital will be calculated. This is ultimately just an adjustment up or down to the purchase price. The buyer may argue that it should get the business with a "normalized working capital" and the seller will argue that if there is a working capital adjustment clause, the target working capital should be zero. This working capital mechanism, if not properly drafted, could result in a significant adjustment in the final purchase price to the detriment and surprise of the adversely affected party. If part of the consideration is an earnout, how the earnout will work, milestones to be met (such as revenues or EBITDA and over what period of time), what payments are to be made if milestones are met, what protections will be offered the seller to enhance the likelihood of the earnout being paid, information and inspection rights, etc. Earnouts tend be the source of frequent disputes and sometimes litigation. Precision in drafting these provisions and agreeing on suitable dispute resolution processes are essential. Timeline for the Acquisition Sometimes it is useful to set forth in the letter of intent dates by which the parties expect various matters to be completed, such as: When the online data room (the virtual room where the seller's key documents and contracts are housed) will be made available to buyer. When the first draft of the acquisition agreement and exhibits will be presented by one party and when first comments will be provided When due diligence is to be completed by the buyer The expected signing date of the acquisition agreement The expected closing date Limitations of Liability/Indemnification In private company acquisitions, the seller often asks for indemnification from the buyer for breaches of representations made in the acquisition agreement. Indemnification effectively adjusts the purchase price downwards and therefore the terms of indemnification are almost always the subject of lengthy negotiations. The seller (and its stockholders), well aware that their bargaining leverage will decline once the letter of intent is signed, frequently will insist that the letter of intent set forth limitations on the scope of this indemnification obligation. In contrast, buyers will typically resist, asserting that negotiation of the terms of indemnification should be deferred to the negotiation of the entire acquisition agreement, at which time the buyer will be much better informed about the seller's business and liabilities. Although market practice today is to specify the size of an indemnification escrow and the extent to which it might be the sole source of recovery for buyer indemnification claims, it is sometimes difficult for sellers to obtain in the letter of intent additional limitations on its (or its stockholders') indemnification obligations. In some deals, the seller with leverage can take the position that the deal should be structured like a public company type deal—that there is no escrow and that representations, warranties, and covenants expire at the closing. An escrow in private company acquisitions is used to secure the seller's indemnification by placing an agreed amount of the cash purchase price into an escrow. The seller will argue that if the buyer wants additional protections, it can do so through its own careful due diligence and by obtaining the protections afforded by M&A representation and warranties insurance. In the last few years, M&A representations and warranties insurance, in lieu of extensive indemnification provisions, have become the norm (especially with private equity buyers). Indemnification obligations may limited in a variety of ways, such as: The seller should prepare a full and thorough disclosure schedule laying out all required disclosures under the acquisition agreement to reduce the risk that the buyer will seek indemnification for breach of the seller's representations and warranties. If M&A representations and warranties insurance is not available, the seller can seek a short-term limited escrow (5% of the purchase price for 9-12 months) to be the exclusive recourse for breach of the seller's representations and warranties. Of course, buyers will seek larger escrows and longer time periods. Although it has become common for the parties to an acquisition to agree to allow the buyer to seek recovery beyond the escrow (or after it has been disbursed) for breaches of certain "fundamental representations," in every negotiation the seller should carefully consider insisting that the buyer's recourse for indemnification be limited to the escrow. The seller will want "fundamental representations" to only consist of those relating to due authorization, due organization, and enforceability of the acquisition agreement. However, some buyers will argue that representations around capitalization, tax matters, intellectual property matters, and fees owed to advisors also fall in the bucket of "fundamental representations." Sellers strongly resist such a provision. The seller should make sure that survival periods for breaches of general representations and warranties are no longer than the term of the escrow, except with respect to "fundamental representations." To the extent that indemnification may be required by the selling stockholders under the acquisition agreement, that indemnification should be "several" (i.e., pro rata) and not "joint and several" liability (which would make any single stockholder liable for all of the losses alleged by a buyer). In addition, the seller should insist that no indemnifying stockholder be liable for more than the amount of sale proceeds actually received by the indemnifying stockholder. Other limitations that are negotiated include the dollar threshold before indemnity is required, caps on the indemnity, exclusions or carve outs from the indemnity, limitations on what types of losses a buyer may recover, and the extent to which a buyer's knowledge of an inaccuracy in the seller's representations bars indemnification. Representations and Warranties The letter of intent will typically not include a detailed listing of the seller's representations and warranties. But if the seller desires to have certain materiality or knowledge qualifiers for particular representations and warranties, it may be best to negotiate these in the letter of intent. For example, the seller may want to state that any representations and warranties concerning intellectual property infringement issues be limited by a knowledge qualifier. Employee Issues To the extent there are any key employee issues for the seller or buyer, it may be prudent to address these in the letter of intent. Such issues could include: Whether the buyer will assume the seller's unvested employee stock options (and whether that assumption is a deduction of the purchase price). The types of compensation and benefits to be made available to seller's employees by buyer. The hiring of any key executives, the key terms of employment, and the extent to which the closing of the acquisition is conditioned upon such key employees entering into employment agreements with the buyer. Conditions to Closing of the Acquisition The seller will want to set forth key conditions to closing (and ideally will want the letter of intent to set forth the onlyconditions to closing). That way, the seller will have a better understanding of the likelihood of a closing. The typical closing conditions that a seller will allow for the benefit of the buyer include: The truth and accuracy, in all material respects, of its representations and warranties in the acquisition agreement. The compliance by the seller of its covenants in the acquisition agreement, in all material respects. The obtaining of any necessary governmental consents (such as Hart-Scott-Rodino Antitrust approvals). The buyer may also insist on the following closing conditions, among others: The obtaining of consents that may be required from third parties under change in control provisions in key contracts. Absence of any litigation seeking to enjoin the transaction or any litigation material to the seller. The execution of employment agreements with key executives of seller. The execution of non-compete and non-solicitation agreements by the stockholders (venture capital and institutional investors almost never agree to these). No material adverse change in the business of seller between signing of the acquisition agreement and closing (the seller will insist on various exclusions to this condition). The obtaining of financing (sellers will strongly resist this as a closing condition, arguing it introduces too much uncertainty and is outside of the seller's control). Delivery of audited financial statements of the seller to enable the buyer, if the buyer is a public company, to comply with its securities law reporting obligations. Delivery by the seller of the consent to the acquisition by the holders of a very high percentage of the seller's outstanding equity and delivery by such stockholders of support agreements waiving dissenters' rights, agreeing to keep company and transaction related information confidential, and agreeing not to sell their stock except to the buyer. Dispute Resolution It is desirable for the letter of intent to set forth how and where resolution of disputes will happen, both under the letter of intent and under the acquisition agreement. My preference is for a confidential binding arbitration/provision, under the JAMS commercial arbitration rules in existence at the commencement of the arbitration, before one arbitrator chosen by JAMS. In deals involving international parties, international arbitration firms (such as the International Chamber of Commerce) should be considered for this purpose. Such an arbitration provision allows for faster and more cost-effective resolution of disputes than litigation. Litigation can be extremely costly and last for many years during any appeal process. Among the issues to be considered with respect to an arbitration provision are the number of arbitrators, the location of the arbitration, the scope of discovery, the time period for resolution, and who will bear the fees and expenses of the arbitrator. I also typically prefer a provision that states that each party will pay its own legal fees and costs, and 50% of the arbitrator's fees. Conclusion A well-drafted letter of intent can increase the likelihood of an acquisition successfully closing, on optimal terms. To see some sample letters of intent, check out the Forms and Agreements section of AllBusiness.com. Read all of Richard Harroch's articles on AllBusiness.com. Related Articles: The Impact of the Coronavirus Crisis on Mergers and Acquisitions Mergers and Acquisitions: What Managements Teams Want to Know from a Perspective M&A Acquirer 25 Key Lessons Learned From Merger and Acquisition Transactions A Comprehensive Guide to Due Diligence Issues in Mergers and Acquisitions Copyright © by Richard D.Harroch. All Rights Reserved. The post How to Negotiate a Business Acquisition Letter of Intent appeared first on AllBusiness.com. Click for more information about Richard Harroch. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

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