What Google Fiber Means to Small Businesses |  |
- What Google Fiber Means to Small Businesses
- How to Gauge Your Crowdfunding Potential
- Google Drive Now Lets You Chat and See Pics of Collaborators
- How You Can Lower Your Self Employment Taxes
- 42% of April Jobs Created by Small Businesses Per ADP Employment Report
- Top Secret Way to Save 50% or More on Your AdWords Bill
- 3 Counterintuitive Ways to Reach a New Audience Through Partnerships
| What Google Fiber Means to Small Businesses Posted: 02 May 2013 02:00 AM PDT Recently, Google announced the third city that will receive its super fast Internet service. Provo, Utah, will be the third home to Google Fiber, with most residents connected to the grid by the end of this year. "Once connected, Provo will be one of the first cities in the world where access to broadband will flow like water or electricity," Kevin Lo, general manager of Google Fiber said. Kansas City and Austin, Texas are the two other cities slotted to receive the ultra-fast Google Internet. Google Fiber is Google's new ultra-fast Internet service. The cities chosen to receive this service will have access to 1 Gigabit, 100x faster than normal broadband. Google is also offering free broadband service in those areas for a simple $30 installation fee. So What Does Google Fiber Mean to Small Businesses?Well, Google seems to be targeting areas with lesser known, but thriving tech scenes. “Utah is already home to hundreds of tech companies and startups, and many of them are based in Provo,” Google’s Kevin Lo wrote in a blog post. “In fact, the Provo area ranks second in the nation in patent growth, and is consistently ranked as one of the top places to live and do business in the US. We believe the future of the Internet will be built on gigabit speeds." Local companies such as Trafficado are excited about the growth that Fiber will bring to the Provo area. Austin, Texas, is also known as a hub for technology and innovation: "Access to more bandwidth is like rain in Texas — it's good for everyone," said David Bresemann, senior vice president and chief product officer at Silicon Laboratories Inc., a locally based semiconductor company, in Statesman. "Austin's tech-savvy residents and businesses have an insatiable appetite for higher bandwidth." Google’s targeting of areas that already have growing startup and tech scenes will bring even more growth to these areas. Why would businesses care about being part of Google Fiber? It's the next big thing and any chance to be on board at the beginning is a good thing. Plus, with fast Internet you can get things done more quickly. This is especially enticing for SaaS businesses and any company looking to quicken their uploading and downloading processes. It is not known where Google will be taking Fiber next, but they are set on expanding and making this the future of the Internet. The post What Google Fiber Means to Small Businesses appeared first on Small Business Trends.      |
| How to Gauge Your Crowdfunding Potential Posted: 01 May 2013 04:00 PM PDT Crowdfunding is one of the hottest new strategies for small business owners and entrepreneurs to raise capital for their startups, expansion projects or new ideas. This investing style first saw widespread use in 2012, mostly through online platforms like Kickstarter and GoFundMe, and it's still going strong for 2013. What is crowdfunding? Basically, it's getting a whole bunch of people, the "crowd," to believe enough in the concept of your business or idea to donate small amounts of money, often in exchange for rewards that range from acknowledgements to free products or services. The best part? These are donations and therefore, don't have to be paid back. However, there are good and bad parts to crowdfunding on both sides of the equation. Not every business idea is a good candidate for this platform. With crowdfunding expected to double in 2013, how does your business or idea measure up? Crowdfunding Pros and ConsAside from the obvious advantage of not going into debt on your investment, crowdfunding can offer some great benefits. When you use a crowdfunding platform, you're already receiving market exposure before you get off the ground. You can rack up quite a lot of investment capital. For donors, it's exciting to feel like they're helping to build a concept they believe in. The downside is that crowdfunding is still in its infancy and therefore, not regulated. There are no guarantees for entrepreneurs and businesses, and no legal recourse for investors should your concept fail. While it sounds like free money, the fact is that you still have to offer your investors something in return — and if you don't follow through, your credibility is shot. Checklist: Your Crowdfunding PotentialIs your business or idea conducive to crowdfunding? What is your crowdfunding potential? Below are some questions to ask yourself:
If you answered these questions with a resounding “yes,” then you have some crowdfunding potential and crowdfunding could be a great fit for you. If you're not there yet, your best bet is to sit back and watch the crowdfunding landscape and be alert for new or changing opportunities. Will you be giving crowdfunding a try as a financing option for your new business? Crowd Funding Photo via Shutterstock The post How to Gauge Your Crowdfunding Potential appeared first on Small Business Trends.     |
| Google Drive Now Lets You Chat and See Pics of Collaborators Posted: 01 May 2013 01:45 PM PDT Google Drive, which lets you share files online, now makes it easier to chat with and work with collaborators on a shared file or document. And do it real time. We’ve been playing around with the new features a bit the last few days here at Small Business Trends. While they may seem like small changes, we think they add a lot to the give and take of the collaboration process among small business teams. Here's what's changed: First, the profile photos of the other person or persons who are working on documents with you in a session are now visible along the top of the screen. Previously, collaborators were designated by a little colored square. You had to click on the square to see the person's name. The new photo enhancement feels a lot more like Facebook chat, or similar experiences, because you can see the other person’s picture. When you click on the person's picture, it opens up a box with their Google+ profile. You can even add them to your Google+ circles right from that box or see if you are already connected to them. This is great for networking with people you may be meeting for the first time or are not yet connected with them on Google+. The second enhancement is that you can open up a chat session with another collaborator right there in the document. A little chat window pops up when you click the chat icon next to the profile photos. That way, everyone in the session can converse quickly and efficiently as you’re editing or making other changes to a document or file. Of course, you always had the alternative to open another application like Google Talk or Skype chat and run it in a separate screen while in the Google Drive session. But if you were not connected with the person in one of those other services, you had to take time to connect first. On top of that, you would have had to have multiple applications open or glance back and forth between screens. Having the new chat feature built right into Google Drive certainly streamlines the process. Google announced these new updates to Google Drive last week and it took several days to roll out to all users. And also writing on the Google+ page for Google Drive, Software Engineer Eric Zhang says that anonymous users will now be identified in a collaboration group with animal icons. For small business teams that are collaborating, the Google Drive enhancements offer a more efficient way to work with partners and co-workers. The post Google Drive Now Lets You Chat and See Pics of Collaborators appeared first on Small Business Trends.     |
| How You Can Lower Your Self Employment Taxes Posted: 01 May 2013 11:00 AM PDT The end of tax time typically brings renewed interest in business structures. Fresh from filling out their tax forms, sole proprietors and partners in a general partnership are often concerned about self employment taxes and wonder if there's a way to legally keep more of their hard earned money. If you have a sole proprietorship or general partnership, read on to learn if incorporating or forming an LLC for your business can help you reduce self employment taxes. In addition, if you're thinking about starting a business this year, you have an opportunity to start off right with a formal business structure. How You Can Lower Your Self Employment TaxesAn Intro to Self Employment TaxesThe self employment tax is an extra tax that self employed business owners, independent contractors and other independents need to pay. Self employment taxes are how sole proprietors (and partners in a general partnership) pay social security and Medicare payroll taxes. When you're an employee at a company, you split these taxes with your employer (typically, each pays 7.65 percent of eligible wages for the tax). But when you're self employed, you're essentially both the employer and the employee and thus, you're responsible for both contributions. Note that self employment taxes were reduced for 2011 and 2012, but are set to rise to the regular level for tax year 2013. This provides added incentive to take a look at your business structure for the years ahead. LLC and S Corporation: Can They Lower Self Employment Taxes?The LLC and S Corporation are popular business structures for small businesses, freelancers and entrepreneurs. Many small businesses begin as a sole proprietorship or general partnership and then ultimately transition to an LLC or S Corporation. Both entities let you "pass through" your taxes. Meaning, the company itself doesn't pay taxes, but profits and losses are passed on to your personal tax return. This is an important distinction from the general C Corporation that must file its own taxes (and often results in an increase in taxes for the small business owner). For the S Corporation and LLC taxed as an S Corporation, you're able to split your profits into two payment types – salary and S Corp distributions. You pay social security/Medicare tax only on the salary portion. This means that if your business made $80,000 in profits and you pay yourself $40,000 in salary and $40,000 in distributions, you only have to pay social security tax on the $40,000 salary. Sounds good, right? Why not take it a step farther and pay yourself $1,000 in salary and $79,000 in distributions? That way you can really minimize your self employment (social security/Medicare) taxes. However, that type of compensation is not allowed, as the IRS requires you pay yourself a "fair and reasonable" salary and these distributions are watched very closely. You'll have to pay yourself fair market rate for whatever services you provide to the company. Yet even so, small business owners can often significantly reduce their self-employment taxes by setting up as a corporation or LLC. For example, if you're running a sole proprietorship and you're bringing in more in profit than a "fair and reasonable" salary, then it probably makes sense to form an S Corporation or LLC that's taxed as an S Corporation. Bear in mind that with a formal business structure, you're generally required to operate your business at a higher administrative level than with the sole proprietorship (where there's no paperwork at all). If you're concerned about having too much paperwork and legal formalities, opt for the LLC and then elect to be taxed as an S Corporation. In general, the LLC has fewer legal requirements than corporations (S Corporations and C Corporations). The Other Upside: Protecting Your Personal AssetsWhile lowering one's taxes is often the driving force behind incorporating, LLCs and S Corporations offer another significant benefit for the small business. That is, protecting your personal assets. With a sole proprietorship or general partnership, your own personal savings, property and other assets are at risk to settle any debts of the business. Yet once your business becomes an LLC or S Corporation, it exists as its own entity. This offers a shield between your personal assets and the business, giving you added peace of mind. While most small business owners I know have little time to spare, I encourage you to take some time and investigate the various business structures. Speak with a tax advisor to learn more about your own personal situation. As self employment taxes are set to rise back to the pre-2011 levels, it's smart to act now to get ready for your 2013 taxes and beyond. Grasping Money Photo via Shutterstock The post How You Can Lower Your Self Employment Taxes appeared first on Small Business Trends.     |
| 42% of April Jobs Created by Small Businesses Per ADP Employment Report Posted: 01 May 2013 08:17 AM PDT [Click for larger image] Forty-two percent of all jobs created in April came from small businesses, an ADP Employment report released this morning said. Small businesses were responsible for 50,000 jobs out of a total of 119,000 created for the entire job market. And most of the small business jobs (a total of 34,000) were created by the smallest of the small, those with under 20 employees. And when you add in the number of jobs created by medium size businesses with up to 499 employees, we see that small and medium businesses were responsible for nearly 64% of total job growth during April 2013. Service Sector Source of Most JobsOf the small business jobs created, an overwhelming majority, 41,000, were created in the service sector. If you’re thinking that means slinging hamburgers, “service sector” covers much more. It’s a large classification that includes financial, professional and business services, but also includes employees like restaurant workers, housekeepers, teachers, health care workers and retail sales workers. Service jobs were also important to the overall employment numbers among large, medium and small businesses, officials said. “The services sector generated the overwhelming majority of new jobs in April, contributing a total of 113,000, which helped to offset overall softness in the goods-producing sector, which was marked by a loss of 10,000 manufacturing jobs,” Carlos A. Rodriguez, ADP's president and CEO, said with the release of this report. Overall Job Growth Slowed, Says Employment ReportHowever, job growth slowed compared with previous months. Today's report notes that the pace of job growth has hit its slowest since September 2012. There are several factors that are likely slowing job growth, said Mark Zandi, chief economist at Moody's Analytics. It should be no surprise that small businesses saw the most growth over the last month because larger businesses are currently weighing the expenses of providing healthcare to their employees before the end of the year, he said. In 2013, businesses with 50 or more employees will be required to provide medical coverage to their employees or face federal penalties. This uncertain expense is a leading contributor to a lack of new jobs being created from these companies. This, along with tax increases and government spending cuts were leading factors in the weakened jobs market. "Companies that have close to 50 employees, you have some big decisions to make," Zandi said. The rate of job growth in the last month is a sign that U.S. economic recovery is slowing out of the Great Recession, Zandi said. He told reporters Wednesday morning that the rate of growth is not enough to offset unemployment numbers and that similar numbers could be expected over the next three-to-six months. "The ADP number was disappointing. The job market and economy are slowing," Zandi said. "It's OK but it's certainly not enough to generate any declines in unemployment." The post 42% of April Jobs Created by Small Businesses Per ADP Employment Report appeared first on Small Business Trends.     |
| Top Secret Way to Save 50% or More on Your AdWords Bill Posted: 01 May 2013 05:00 AM PDT Do you advertise on Google AdWords? If so, did you know that there's a top secret way to save 50% or more on your monthly Adwords cost if you create awesome ad campaigns? Alternatively, did you know that you might be paying up to a 400% surcharge on your AdWords cost if your ads stink? How does this work? It has to do with an ingenious yet also somewhat confusing billing system that Google AdWords employs when calculating the Cost Per Click (CPC) when a user clicks on one of your search ads. In AdWords, advertisers specify a maximum CPC, which is the most you're willing to pay if a user clicks on your ad. But your maximum CPC is not the same thing as your actual CPC, which is always less. Exactly how much less depends on your secret AdWords discount (or surcharge). Top Secret Way to Save 50% or More on AdWords CostUnderstanding Your Quality Score in AdWordsQuality Score is Google's method of rewarding advertisers that have high quality ads and well structured campaigns, and also penalizing advertisers with lousy ad campaigns. Google assigns a "Quality Score" between 1 and 10 to each of your keywords. It's a grade for your keywords and ads that is calculated based mostly on the Click Through Rate (CTR) of your keywords and ads. Relevance The reason for this is relevance. Google wants to serve up relevant ads that help its users, because then they'll be more likely to keep using Google, as well as to click those ads (which puts more money in Google's pockets). If users are clicking on your ad more often, then there's a good chance that your ad is relevant to those searches. If users aren't clicking on your ad that often, then your ad probably just isn't that relevant to the user's search. To Summarize Google wants to incentivize and reward advertisers to write high quality, relevant ads and pick specific, relevant keywords that earn high Click Through Rates and thus High Quality Scores. The higher your Quality Score, the higher your secret AdWords discount. But how much you ask? The Typical Quality Score DistributionRecently, I did a survey of the average impression-weighted Quality Scores across the accounts of several hundred WordStream clients acquired in 2013. Here's a summary of what I found: As you can see, Google grades all keywords on a curve. Some keywords get a score of 10/10, but others get just 3/10 or 4/10. But on average, the typical keyword Quality Score is 5/10. This means that having an above average Quality Score of greater than 5/10 results in a "discount," and having a below average Quality Score of below 5/10 results in a surcharge. Below are the benefits of having high Quality Score. As you can see in the following table, having a Quality Score of 10 affords you an estimated 50% discount: Alternatively, a Quality Score of 6/10 means you save approximately 16.7% on your Cost Per Click (CPC). Furthermore, having a below average Quality Score of 2/10 means your CPC's are actually increased by approximately 150% relative to the average CPC. The key to getting your big discount is by having a higher Quality Score, which means doing stuff to ensure higher Click Through Rates (CTR) on your ads, such as writing great ads, using negative keywords, being picky in choosing your keywords, leveraging ad extensions and so on. It’s also worth noting that in the last 4 years, Google has become a “tougher grader.” Meaning the average Quality Score grade used to be 7/10 and now it’s just 5/10. This means that a high Quality Score is worth much more than it was four years ago, in that it will result in a substantially higher discount. Are Your Quality Scores Helping or Hurting Your AdWords Cost?This new data illustrates just how crucial good Quality Scores are to your AdWords ROI (Return on Investment), since they can save you up to 50% on each click. So where do your Quality Scores fall in the grand scheme? I suggest using the AdWords Grader to check your impression weighted Quality Score distribution. This free tool shows you what your Quality Scores look like across your account and where the curve should be for better cost efficiency, as shown here: In this case, the advertiser has an average Quality Score of just 3.8/10, which is below the average score of 5/10. According to the preceding Discount / Surcharge Table, they're stuck paying the AdWords surcharge of between 25% and 67%. Are you receiving the top secret AdWords Quality Score discount – or are you paying a surcharge on your Adwords cost? Top Secret Photo via Shutterstock The post Top Secret Way to Save 50% or More on Your AdWords Bill appeared first on Small Business Trends.     |
| 3 Counterintuitive Ways to Reach a New Audience Through Partnerships Posted: 30 Apr 2013 04:00 PM PDT Traditional wisdom teaches small businesses to partner with people whose services complement their own. If you're a wedding planner, partner with a caterer. If you're a landscaper, partner with a house painter, etc. But to truly stay ahead of the competition, small-business owners need to think outside the box by initiating partnerships that dramatically increase the value that they offer their current and prospective clients. Below is a guide to implementing three counterintuitive strategies that will expand your business reach and let you tap into new market segments through business partnerships. Reach a New Audience Through Business PartnershipsStrategy #1: Go Where Future Clients Are Already FansIn 2009, Chicago-based insurance company Aon signed on as the new sponsor of England's celebrated Manchester United soccer team. Commentators questioned the connection. Aon is strictly a business-to-business company, and the most visible part of a Manchester United sponsorship would be the addition of the company's name to team jerseys. But Aon stood by its decision. After all, millions of soccer fans wear those jerseys and the sponsorship would effectively turn them into what the company's chief executive called "walking billboards." Even better, Manchester United boasted a large fan base in Asia, one area where Aon was looking to grow at the time it secured sponsorship rights. This partnership allowed Aon to flood its future target market with its name, thus building brand recognition. How to Make This Strategy Work For Your Small Business Looking to expand into a new market? Join forces with a business that's already serving that market, and you've got a friendly introduction to the people you want to serve. One effective way to do this is to sponsor an event (such as a trade show, lecture series, workshop or conference) where a lot of your potential clients will be in attendance. These potential clients will be open to engaging with you because, in that context, you are not trying to sell to them. You can have an honest conversation and learn where their pain points are, which is information you can use to tailor your services to them down the road. Strategy #2: Find a Partner Who Embodies Your Company ValuesLast month, Insureon, the online business insurance agency of which I'm CEO, launched a partnership with Women's MMA Bantamweight Champion Ronda Rousey. As with Aon, some people questioned the connection between a professional fighter and a company that sells small business insurance. But to us, it's clear. Like the small business owners we serve, Ronda Rousey works hard every day, often by herself, to be the best that she can. Though Ronda has only recently gained major media attention for her success in the ring, she has been toiling at her sport for years. She often faced significant setbacks, including injuries and naysaying from league insiders who claim women have no place in professional MMA. As a product of sheer determination, commitment and talent, Ronda has overcome these setbacks and is changing the face of her sport in the same way that America's small business owners are transforming the face of the U.S. economy. The partnership with Ronda has helped reinforce our commitment to supporting hard-working business owners in their grueling and often lonely journeys. How to Make This Strategy Work For Your Small Business Find a values-based partner to boost brand recognition by sponsoring a local little league team, charity event or community group. Associating your business name with people and events that reflect your values helps you build your image among potential customers and establish yourself as a valuable part of the community. Strategy #3 Share Your Rewards ProgramIn 2012, Chase Bank and Southwest Airlines announced a partnership that let Chase cardholders transfer their points into Rapid Rewards airline miles with Southwest. The partnership came on the heels of a similarly structured Chase-United partnership the year before. Why did this joint venture make sense for both companies? Because Chase and Southwest saw that their respective products (credit cards and flights) have massive target audiences and that their products and services are, in some ways, indistinguishable from what their competitors offer. In that context, increasing the value of a product or service is essential to maintaining customer loyalty and winning new customers. Chase and Southwest did exactly that, and by doing so made it that much more appealing for potential customers to use their products. How to Make This Strategy Work For Your Small Business Just because you're not a major corporate player doesn't mean you can't offer a major rewards program. Make this strategy work for you by setting up a system where clients can work toward a discount or freebie (you've seen this dozens of times as punch cards at ice cream shops), then increase its effectiveness by letting clients get credit for purchases made with your partner. You'll both benefit from increased loyalty and customer satisfaction. How do you reach new audiences? Have you ever launched business partnerships to reach a new target audience or customer base? Manchester United Photo via Blackberry The post 3 Counterintuitive Ways to Reach a New Audience Through Partnerships appeared first on Small Business Trends.     |
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