Are you an owner of a small business? Do you want to know some of the advantages you can enjoy by setting up your own small business venture? You may already be aware that the advent and success of the Internet has ushered in a new era of online trading for small businesses – an arena known as e-commerce or e-finance. E-Commerce refers to the buying and selling of goods and services via the Internet.
E-Commerce is basically the trading of goods and services over the Internet, with the main difference being the absence of a physical location. Small businesses are either sole proprietors, partnerships, or corporations that usually have fewer employees and/or lower annual revenue than an average-sized company or organization. Small businesses are also defined in terms of being “small” based on the ability to apply for favourable tax treatment and qualify for government subsidies based on their individual income, assets, production and sales. As small businesses have fewer assets and revenue, they also have lower costs of doing business than larger companies. This is one of the main reasons why credit scores for small businesses have a lower average rating than those of large businesses.
There are many small firms, especially in the United States, that encounter issues when it comes to establishing their own line of credit. The financial needs of most small businesses include not only purchasing equipment and supplies to carry out their daily operations, but also paying for the services of workers and managing payrolls as well. For this reason, most small firms resort to borrowing from friends and relatives, or taking out loans from banks and other financial institutions. Such borrowing and money transactions, however, can create several disadvantages for small businesses.
First of all, borrowing from friends and relatives and taking out loans are very risky propositions for small businesses. Second, financing small businesses with outside financing will almost inevitably lead to failure due to the inherent risk of a new business in the market. Even if a loan is successfully approved, it will be spread among too many parties, and the final price that emerges from the deal will not be that which the lenders bargained for. Third, outside financing will almost always require repayment; therefore, it drains the funds of the firm that borrowed. Fourth, failure to repay outside financing results in the loss of market share, and this can seriously harm the reputation of the firm.
Moreover, some business owners mistakenly believe that it is best to ignore the requirements of banks and other financial establishments. They do so to save on time and effort, and to avoid paying steep interest rates. In fact, small businesses should do everything possible to maximize the profitability of their ventures, and the best way to do so is to get professional assistance with effective market analysis and comprehensive financial planning. This advice can be obtained from specialists who deal with banks, credit unions, financial institutions, and other monetary authorities.
In the United States, the Small Business Administration has been successful in assisting qualified companies with regard to the formulation of realistic plans and strategies on how to reduce costs, streamline operations, improve productivity, and maximize profits. The SBA’s Loan Program started the Consumer Credit counseling services that were originally designed for small businesses during the early 1980s. Ever since its inception, the agency has helped more than sixteen million consumers with a wide range of financial solutions. These solutions have helped the US economy stay afloat during these lean economic times.
The Small Business Administration also offers technical assistance for small businesses that would like to become self-employed. Training seminars, books, and other publications are available through the agency’s website. There are also scholarships and loans that can help self-employed individuals procure their first modest office equipment or hire additional employees. An increasing number of US small businesses have discovered that using grant money can be a cost-effective method for boosting revenues and boosting employee productivity.
Today, many small businesses are using social media to reach potential customers and clients. There are many social media sites that many small businesses use, such as Twitter, Facebook, and LinkedIn. In fact, many small businesses have created profiles on these social media sites so that they can advertise their products and services to current and potential customers. While the internet has provided many small businesses with an invaluable tool for marketing and branding, more US small businesses are recognizing that their brand could be exponentially stronger if they invested a portion of their marketing dollars into social media advertising.