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Choosing the Right Accounting System for Your Shopify Business

Editor’s Note: This post was originally published in October 2017 and has been updated for accuracy and comprehensiveness.

Whether you’re brand new to online retail and trying to decide how to set up your eCommerce business, or you’ve been around a while and simply reached the point where your DIY accounting solution just isn’t cutting it anymore, Xendoo’s innovative suite of business offerings can help you. Xendoo can get your small business accounting running like a well-oiled machine so you can focus on what’s important – growing your business. To be competitive in the new economy, cloud-based accounting is no longer a luxury; it’s a necessity. Here are some of the best accounting systems for Shopify that can help get your business on track.

QuickBooks Online

QuickBooks Online is the cloud-based version of the popular and versatile QuickBooks business accounting software. Quickbooks Online accounting system for Shopify allows you to access your account information from any web browser, and the API creates a seamless interface that links directly to Xendoo’s platform. That means you can easily organize and sync all of your critical financial data with no tedious manual data entry. Additionally, Quickbooks Online for Shopify allows you to easily create and send invoices, receive payments, pay bills, and manage payroll. 

  • Track income and expenses
  • Capture and organize receipts according to your chart of accounts
  • Download and organize bank account and credit card transactions
  • Print checks
  • Create and send invoices, as well as receive payments
  • Print financial reports
  • Tax organization

A person holds their phone lookig at a recent Shopify order

Xero for E-commerce

QuickBooks is a popular accounting system for Shopify, but it may not be the best choice for everyone. Xero is another cloud-based accounting solution that will appeal to a lot of Shopify store owners. Xero is fast, simple, and powerful. It can sync with hundreds of third-party applications for point-of-sale, inventory, and much more. It also offers a mobile app for convenience and allows customers to create an unlimited number of users. From within the Xero accounting software for Shopify, you can manage your accounts payable, accounts receivable, budget, and category or division tracking. 

  • Customizable dashboard
  • Create invoices and quotes and receive payments
  • Track inventory
  • Bill payment
  • Expense management and project management
  • Create and print financial reports
  • Bank account reconciliation
  • Highly scalable for small or growing businesses

A2X for Shopify

A popular middleware, or “connector,” application that links your Shopify store with your cloud-based accounting system is A2X for Shopify. It automatically posts your Shopify sales and fees directly into QuickBooks or Xero, saving you hours of tedious work each week. That also means no more stressing over why transactions don’t match your bank deposits because A2X eliminates data entry mistakes.

  • Automatically post store data into QuickBooks or Xero
  • Automatically reconcile bank statements
  • Automatically make adjustments for fees and refunds
  • Create and print summarized statements

Coins spills out of a glass jar on a table

TaxJar for Shopify

A major time vampire for business owners who sell on Shopify is state sales tax compliance in the wake of Wayfair, Inc. v. South Dakota (2018), which requires online sellers to comply with sales tax requirements in each state where they do business. TaxJar accounting system for Shopify will streamline your sales tax compliance process by showing you where you should be collecting sales tax according to economic nexus laws and generating return-ready reports. It can even auto-file your returns for you if you want.

  • Calculate sales tax based on each state’s nexus
  • Daily updates allow for timely return filing
  • AutoFile option for automated return filing
  • Display fines and penalties for delinquent filing
  • Compare actual collections to what should have been collected

Shopify Apps

In addition to your accounting software, Shopify offers over 1,000 plug-in applications from their app store to help you with managing inventory, shipping, reporting, and much more. However, we suggest that you fully explore the capabilities of QuickBooks, Xero, A2X, and TaxJar before making any decisions about additional applications. A lot of functionality might be duplicated, and you certainly don’t want to pay for the same thing twice.

In addition to tons of helpful plug-ins, Shopify also features a profit margin calculator. Just plug in your cost of the item and a markup percentage, and Shopify will calculate the sale price, your gross profit in dollars, and your gross margin.

Outsourcing Your Bookkeeping and Accounting

Even though these accounting systems for Shopify can make life much simpler for sellers than even just a few years ago, it can still sometimes feel overwhelming. If you begin to feel like you might be in over your head, you should consider outsourcing your accounting and bookkeeping to a small business accounting firm like Xendoo.

There are a lot of good reasons to outsource your accounting for your Shopify eCommerce business, and it’s more affordable than you might think. Xendoo’s accounting team works with small business owners just like you to provide expertise and insight into the accounting needs of e-commerce businesses. Xendoo can take care of everything from weekly bookkeeping to filing business taxes for you, and our flat monthly fee is less than half of what you’d probably pay an accountant. Xendoo’s mission is to give you the peace of mind of knowing it’s being done right, and free your time to focus on what’s important – growing your business. Sign up for a free trial today.

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

9 Ways for Franchisees to Outrun the Competition

Editor’s Note: This post was originally published in October 2017 and has been updated for accuracy and comprehensiveness.

As we’ve seen, there are a ton of fantastic, low-cost franchise opportunities out there that will give you a lot of advantages in starting up your new business. As a franchisee, you’ll still have the independence of owning your own business and being your own boss, but you’ll gain the name recognition, volume pricing agreements, and support services of an established brand. It’s the best of both worlds, and over 795,000 business owners in the United States have chosen this path. But as much as a good franchise can boost your chances of success, there is one threat to your new franchise which will always be present—your business competition.

 No matter the type or location of your business, whether restaurant, child care center, gym, or staffing agency, you will always have to know how to overcome competitors. Even if you start out in a niche that you have all to yourself in the beginning, you will soon get some competitors because success always breeds imitators. For every McDonald’s franchise out there, there is almost always a Burger King franchise across the street. If there isn’t, there soon will be.  

So how do you stay ahead of your peers in this horse race? Here are a few things you can do to outperform your business’s competition.

Know your business competition

If you don’t know all about your competitors, you can’t know how to overcome your competitors in business. The reality is that a lot of business owners don’t know as much about their competitors as they should. Make a list and call it “My Local Competitors Are….” Write down who you think your strongest competitors are, and then mystery shop them. If you sell widgets, buy a widget from your competitor and compare it to yours. Were the prices comparable? Is the quality as good as yours? Maybe even a little better? Does it have any features that yours doesn’t?

If your business is a restaurant, go and eat at the restaurant across the street. Pay attention to the cleanliness, the service, the food quality, etc. If your competitor is a hotel, spend the night and take a walk through their parking lot at night to look for fleet vehicles that can tell you which companies to make sales calls on. Now you know where you stand in comparison and what you need to do to win customers away from the competition.

Perform a SWOT analysis

If you’ve never heard of a SWOT analysis, it stands for Strengths, Weaknesses, Opportunities, and Threats. In it, you draw a map with four quadrants using those labels and compile a list in each quadrant. First, define clearly and honestly what you believe the biggest strengths and weaknesses of your business are in relation to your competitors. What do they have that you don’t? What gives you an edge over them? Knowing that, you next identify the top opportunities you have to steal business away from your competitors, and which of your competitor’s strengths pose the biggest threat to your business. A SWOT analysis is essentially a high-level business plan because now you know which holes to patch in your ship and which to exploit in your competitors.

A customer interacts with a cashier at a small business

Solicit feedback from your customers

The most successful companies ask their customers to give them feedback about their experience. Have you ever eaten at a restaurant and received a code printed on your receipt for a free drink if you take a survey? Stayed in a hotel and received a survey? Visited a business and seen a sign that says “Tell Us What you Think!” with a QR code that you can scan? The ways to solicit feedback are endless, and you’re only limited by your creativity. You need to know what your customers like and don’t like about your business, and the only way to know is to ask.

Listen to your customers

Soliciting feedback is only half the job. The other half is what you do with it. When receiving negative feedback, many business owners instinctively become defensive and dismiss it as untrue, unreasonable, or uninformed. Sure, there are professional complainers out there and we’ve all run into them at one point or another, but they’re few in number and easy to spot. The vast majority of your customers are being sincere. If you don’t already, be sure to take the time to review and respond to your social media accounts for your business. These may be the first channels that your customers use to voice a complaint or offer a compliment. 

A complaint is a gift and should be treated as such because the customer is giving you an opportunity to fix a problem before going to a competitor. The worst complaint is the one you never hear because that customer just starts going to your competition and you’ll never know why.

Create a service culture around your customers

Do you know who your customers are? Be a “lobby lizard” and spend some time in the front meeting and shaking hands with your customers and getting to know them. It’s important to create a service culture around your customers because they are generally not as loyal to brands or products, as they are intensely loyal to people and relationships where they feel valued. Even in the face of fierce competition, customers are attracted to and will be loyal to companies that put them first.

Customers line up at a small business coffee stand

Sell the product, not the price

Try to avoid price wars with your business competition whenever possible, because that’s just a race to the bottom. Somebody else will always be able to absorb more loss than you until one of you is forced out of business. Instead, focus on creating value for your customer by providing a good product at a fair price combined with great customer service. Cheap isn’t always a bargain, and customers are often willing to pay a slightly higher price if they see a strong value proposition for their money. You don’t necessarily need to be the cheapest, you just need to create the most value.

Know your numbers

We’ve already established the benefits of outsourcing your bookkeeping and accounting to a professional accounting firm, and one of the most important is that you will receive professionally prepared financial statements that will give you an accurate and complete picture of what’s going on with your business. 

Do you know exactly what your margin is? Do you know your year-over-year performance in each category? If you don’t have that information at your fingertips, you’re flying blind. This is where Xendoo can help because we offer a complete suite of affordable bookkeeping and consulting services that can keep you on top of your business competition and help you make the right choices.

Prioritize your time

There are dozens of ways time gets away from us because it seems like there’s always a fire that needs to be put out. Being a business owner means everyone wants a piece of you, and you have to figure out how to balance everything and keep the wheels on the wagon. Start each day by taking five minutes to write down all the tasks that need to be done that day, and then prioritize them. In fact, studies have shown that just writing a to-do list can help reduce your anxiety.

Go down your list by priority and scratch them off as they get done. Additionally, by using technology, cloud software, and business automation, you can eliminate some time-consuming tasks, allowing you to focus on the big picture and beat the competition. 

Only do what only you can do

In addition to prioritizing your time so that the most important things get done first, you need to spend it as efficiently as possible so that you can complete the maximum number of tasks on your list. If you feel like you have to do everything in your business yourself, that means you’re a great employee but a terrible manager. Effective management is about delegation. There are some things that only the owner can tend to, but a lot of things – like accounting – can be either outsourced or delegated to someone else to allow the owner to focus on staying ahead of the competition instead of cleaning windows.

Business competition is a guarantee, but it doesn’t have to be a problem. Did you notice how many of these tips revolve around customers? That’s because, without them, you’re out of business. You may be the business owner, but you work for them because they can fire you at a moment’s notice and go to your competitor. Just remember that as a franchise business owner, you can choose your own destiny by focusing on your customers, creating value for them, and building relationships with them. 

 

Do that, and you will always stay one step ahead of the competition.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Cash Flow Management for eCommerce: 4 Tips for Smooth Sailing

Editor’s Note: This post was originally published in February 2017 and has been revamped and updated for accuracy and comprehensiveness. 

Cash flow is a measure of your business’s liquidity and ability to pay its debts from sales revenue. Cash flow management can be one of the most challenging aspects of being an online business owner. Your business can be profitable but still have a negative cash flow because profit calculation takes into account assets like inventory that you can’t use to pay bills. 

E-commerce businesses have an edge in cash flow management by virtue of the immediacy of the transaction, but that doesn’t mean online retailers are immune to cash flow problems. The customer has to pay you before you ship the item, so that means you don’t have to deal with an accounts receivables ledger full of aging accounts. But you still have operating expenses that can deplete your bank account, and you might end up having a lot of cash tied up in inventory before being sold. Fortunately, there are some things you can do to smooth out the turbulence and keep your cash flow – and your business – on an even keel. Read on to see our cash flow management tips to keep your eCommerce business sailing smoothly. 

Minimize Inventory

If your inventory is sitting on the shelf for more than 30 days, you have too much. You can’t afford to have that much cash tied up doing nothing. Use stock-keeping units (SKUs) to track the sell-through rate for each item in your inventory. The sell-through rate is the ratio of inventory sold during the month to new inventory added. If you see that an item’s sell-through rate is too low, you need to dig deeper and find out why. Are you producing too much of it? Is demand for it falling? Maybe some of the cash tied up in that product can be shifted to a more popular item that’s selling better, or it might even need to be discontinued. Don’t be lured in by bulk discount offers from suppliers unless you know for sure the item will move quickly. The right inventory management software can help you make sense of what is going, out, coming in, and just sitting there. 

Shot of two boxes on a table about to be shipped to customers

Get Creative with Sales

At the risk of stating the obvious, one of the best ways to keep a positively manage cash flow is to get more sales from your eCommerce business. The big question, though, is how to do that. What’s the best way to drive traffic to your site and increase the conversion rate of your visitors, and maybe even do a little upselling in the process? Here are a few ideas you can try for driving website sales.

  • Offer free shipping on larger orders to encourage bigger quantities
  • Create a loyalty program for repeat customers
  • Offer Buy One, Get One (BOGO) on items with a high margin
  • Bundle high-margin products with best-selling products
  • Cross-sell by offering related add-ons at check-out
  • Offer a recurring purchase option for consumable products
  • Offer incentives to “abandoned cart” visitors
  • Use a human or automated chatbot to engage with visitors
  • Implement a Search Engine Optimization (SEO) strategy to improve your site’s rank in search results.

If each of these strategies can increase your site’s average order by just 1 or 2%, that can quickly add up to 10% or more extra revenue coming into your bank account to help ease the cash flow. If you do go the free shipping route, make sure to read our tips on how to reduce shipping costs

Manage Your Payables

The other side of cash flow management is what’s going out to your accounts payable. You need to maximize the amount of time the cash stays in your bank account instead of going to your suppliers. When you set up contracts with suppliers, try to negotiate the terms. Standard terms will typically be 30 days, but some suppliers may be willing to go as far out as 60 or 90 days if you ask. Whatever the terms are, you should generally wait until the end of the term to make the payment so you can hang onto the cash as long as possible. Watch out for late fees, though. However, if your supplier offers discounts for early payment, they may be worth taking advantage of.

Consider an Inventory Loan

If you’ve done your best but still find yourself in a cash crunch and need to restock inventory, an inventory loan may be an easier option than a traditional bank loan. Lenders will look at more than just your credit history and will take into account your sales history and the stability of your business. Inventory loans can be either lump-sum loans or lines of credit with the bank that you can use over time. You won’t be able to finance the entire cost of your inventory, but you can expect to be able to cover around 50% of the cost through a loan.

Managing your cash flow wisely can be the difference between success and failure for your eCommerce business, even if you’re showing a profit on the books. Xendoo’s suite of products and bookkeeping services for small businesses can help you know exactly where your money is going so that you can manage it more effectively. Contact Xendoo today to start your free trial and see how we can help your small business grow.

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

When You Need to Hire a CPA

Bookkeeper? Accountant? CPA? Which one does your business need, or does it need all three of them? Actually, it depends. Staying on top of your business’s finances is key for a small business owner, but you may need more than day-to-day bookkeeping. When you have more questions than a bookkeeper can answer, you’ll probably need to look into CPA services. Fortunately, Xendoo has you covered. Read on to see if online CPA services are best for you and your business.

What is a CPA?

It’s important to understand the differences between a Certified Public Accountant, CPA, and a regular accountant. A CPA is an accountant who has met specific state and education licensing requirements and passed the CPA exam. So, accountants with the title of CPA offer a higher level of financial analysis for you and your business and can act as a fiduciary on your behalf.

At that same time, an accountant can give you tax savings advice, such as when to make capital purchases, what you can deduct, and how to reduce taxes on capital gains. They can answer your questions about financial reports, cash flow, depreciation, and other accounting processes and identify opportunities to improve profit margin and business growth. Additionally, they can help set up business accounting systems, teach you best practices, keep you legal, and prevent missed deadlines and noncompliance penalties.

What does a CPA do?

Certified Public Accounts can be the financial strategist for Fortune 500 companies or advisors to neighborhood businesses.  CPA act as consultants on many issues, including taxes and accounting. Generally, online CPAs services include:

  • Prepare financial statements
  • Identify red flags and growth opportunities
  • Prepare and file taxes
  • Plan capital purchases and other investments
  • Strategize for scaling the business

When should I hire a CPA?

Whether you’re starting or growing your business, an accountant can help set up financial systems and analyze data so that you can make smarter business decisions. They have the power to forecast business success, diagnose financial health issues, and increase revenue—saving you significant money, time, and hassle. 

So while a bookkeeper focuses on the everyday tasks that maintain your business’s finances, accountants consider the big picture strategy to keep your business strong and growing, and a CPA has an even higher level of financial analysis to assure you’re making the right moves at the right time.

How much does a CPA cost?

Budgeting for bookkeeping and accounting services is tough for a small business. Traditionally, bookkeepers have charged an hourly rate; the more time they spend on your books, the more you have to pay. Typical rates are:

  • Bookkeeper — $30 to $90 per hour
  • CPA — $150 to $450 per hour

Or you may only need an accountant for an occasional project such as tax preparation.

  • Tax return (unincorporated) — $200 to $500
  • Tax return (incorporated) — $800 to $1,800
  • Financial statement — $1,000 to $2,500
  • Audit — $2,000 to $5,000

This is why accounting for a small business can become expensive. Plus, you may decide you only need an accountant for an occasional project such as tax preparation, financial statement, or audit, which costs a fixed amount that can add up, or you may not have allotted this in your end-of-the-year budget. A popular option with small businesses is an accounting service that charges a fixed amount every month. It’s easy to budget for, and it can cost less than half what you would pay an hourly accountant for the same amount of service. That’s why Xendoo offers a monthly pricing structure to our clients, charging a fixed amount every month. It’s easier to budget for bookkeeping and inline CPA services monthly and cost less than half of what you would pay an hourly accountant for the same service amount.

The right account professionals for your business

A small business accounting service will file your taxes, but you’ll need to have your bookkeeping in order so you can provide them with the data and reports they need. Xendoo’s online team of bookkeepers and CPAs will handle everything for you – they will manage all of your bookkeeping and accounting and will file the right return for you, right on time. Plus, Xendoo also takes care of all the filing that goes along with your tax return to itemize your business deductions.

Ultimately, it’s best for you and your business to have both a bookkeeper and an accountant. Making Xendoo your financial partner means joining a community of small business owners who love working with Xendoo’s bookkeepers and CPAs. Xendoo’s online CPA accounting services are ideal for small businesses because the more eyes looking out for your business, the better. Your dedicated financial team provides the perspective on your finances that can help ensure you’re able to anticipate problems and have the appropriate solutions ready to go. In gaining a complete picture of your company’s financial health, you can confidently grow your business.

7 Don’t-Miss Tax Deductions for eCommerce Businesses

Why settle for standard business deductions, when there are more opportunities to lower your tax bill, some of them seemingly tailor-made for eCommerce businesses? Before you prepare your return this year, check out this list of possible deductions.

1. Home office.

In order to qualify for this one, you must use at least one room in your home exclusively for business; working on your laptop in the living room doesn’t count. If you meet that requirement, you can deduct a percentage of nearly every house-related expense you can think of, including rent/mortgage, utilities, repairs/maintenance, and insurance premiums. (The percentage deducted is based on the percentage of the house’s total square footage that your office occupies.)

2. Office supplies, equipment, and software.

Furniture, computer, printer, camera gear (if used for photographing your merchandise), postage meter, inventory management software, paper clips — if it’s used in your office it’s usually 100% deductible.

3. Phone/internet.

You can deduct a portion of your phone and internet charges based on the percentage of time that you use them for business.

4. Transportation and travel.

Any car used for business purposes is eligible for deductions; even if it’s also your personal vehicle you can still deduct a percentage. There are 2 deduction options: a flat amount per mile or a total of actual costs such as gas and parking fees.

Other travel-related deductions include airfare, cab fare, tips, meals, and conference tickets.

5. Fulfillment costs.

You can deduct the costs of packaging materials and shipping to customers.

6. Subcontractors.

Whenever you use independent web developers, graphic designers, photographers, content writers, bookkeepers, temporary office staff — anyone not on your payroll — their fees are 100% deductible.

7. Merchant processing fees.

You probably use one or more credit card processors such as PayPal, Stripe, or Square. But did you know you can deduct their fees?

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Inventory Control for eCommerce: Getting the Balance Right

As an eCommerce retailer, you may not have a brick-and-mortar store, or even your own warehouse and fulfillment facility. But that doesn’t mean inventory control has to be more difficult. With the right mix of tools and strategies, you can manage your merchandise supplies and turnover efficiently and cost-effectively.

Decide how much stock to keep on hand.

Your goal is to strike a balance between too little and too much. In most cases, a one-month supply will be enough to meet any unexpected increases in customer demand, without tying up unnecessary working capital or warehouse space.

To calculate your one-month supply, analyze sales and fulfillment information from previous years. If you’re a new startup, research the performance of your product category as a whole.

Allow for variables in your stock-on-hand plan.

Depending on your business, you may need to adjust inventory levels for:

  • Seasonal fluctuations, such as the Q4 holiday shopping season
  • Shipping time from the manufacturer to your warehouse, import delays, etc.
  • Store promotions such as an annual sale

Apply the same variables to fulfillment planning.

During periods of higher sales volumes, you will also need more packaging materials as well as additional employees to do the order processing, packing, and shipping.

Keep a close eye on your inventory — digitally.

Real-time inventory software can save a ton of time and effort. By using bar code identification, it automatically updates your stock levels whenever an item is sold, alerts you, and website visitors when an item is out of stock and tracks delivery to customers.

Keep a close eye on your inventory — manually.

It may seem old-fashioned, but a physical stock count is the only sure way to know what’s in your warehouse. Do it weekly, monthly, quarterly, or annually, whatever makes sense for your business.

Have a plan for out-of-stock incidents.

Your software should notify you in time to replenish stock before it runs out. But in case there are snafus at the manufacturer or in transit, be prepared to respond and keep customers happy:

  • Remove the product page from your website, or add an “out of stock” message letting customers know when it will be available again
  • Take backorders
  • Pay extra attention to stock levels of fast-moving products and reorder them farther in advance

Choose the right business management system.

A system that’s specifically designed for eCommerce is an invaluable asset. For example, it can show order processing and shipping costs in relation to revenues. Even better, it can link inventory management to other operating systems within your business, such as accounting and payroll, greatly reducing administration time and duplication of effort.

Organize your warehouse for a fast response.

Keep your best-selling items on the shelves that are easiest to reach. Slower moving merchandise can go in less accessible areas.

Consider off-site warehousing options.

The advantages of storing some or all of your inventory in other locations include reduced shipping time to your customers and saving on overhead. Check out:

  • Adding regional warehouse locations
  • Renting warehouse space from a national retail chain or postal service
  • Using Amazon FBA (Fulfillment by Amazon) — you advertise your product on Amazon and they handle merchandise storage, order processing, shipping, and customer service

Stay on top of record keeping.

For both current decision-making and long-term planning, “knowing your numbers” is essential. So checking them at the same time every day or week is a great habit to get into. (It only takes a couple of seconds with the right software, just press a button to see inventory status, turnover, and associated costs.) You’ll always have a clear picture of your inventory … and your business.

For successful inventory management, every eCommerce business must find the right balance between too much or too little stock, online and hands-on tools, and on-site or off-site locations. Most important of all, accurate records will reveal what’s working and what isn’t, so that the future will be even more rewarding than the past.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Micro-Influencers and Small Retailers: A Perfect Match

We’ve all seen A-list celebrities endorsing mega brands and stores. This marketing strategy’s price tag (up to $1 million for celebrities like Kim Kardashian) is far beyond the scope of most retailers’ budgets, but there’s another way to get in on the endorsement bonanza: social media micro-influencers.

Social media influencers

They are people who have gained popularity on Youtube, Instagram, or other social media platforms. With the followings in the 6 or 7 figures, what they say about you can have a significant impact on your sales figures and brand awareness.

The top social media influences are so famous that their endorsement fees now rival those of Hollywood stars. What’re more, studies show that the larger the influencer’s following, the LESS effect his/her endorsement has on marketing results. That’s because the followers are such a diverse group of people that the product being endorsed just isn’t relevant for many of them.

Micro-influencers

These are the people who cater to a tightly focused niche, either of subject matter or location or both. They have fewer followers, but a higher percentage of those followers are your potential customers. They still have personal credibility; their opinion is as highly valued as a friend’s. And their endorsement is affordable, usually well under $1,000. For small businesses, it’s a perfect solution.

Find your micro-influencers

  • Run your own searches on social media.
  • Reach out to internet personalities you already follow. (Find their contact info in the channel’s “About” section.)
  • Ask existing customers who they follow.
  • Invite proposals from influencers on exchange platforms such as FameBit.
  • Use a talent management agency.

Analyze the influencer’s performance.

  • How relevant the content is to your brand.
  • How often and consistently content is posted.
  • How much the audience interacts with the channel.
  • How often content is shared.
  • Channel’s growth rate.

Analytics companies such as OpenSlate can help with this.

Strike the deal.

There are many ways to compensate an influencer besides money:

  • Provide them with exclusive content, i.e. behind-the-scenes access or sneak previews.
  • Cross-promote them on your store’s website and other marketing channels
  • More audience engagement through giveaways, contests, etc.

By strategically selecting and working with micro-influencers, small businesses can engage with a highly relevant fan base at an affordable cost. And their ROI will probably be better than what the big box competition gets from hiring Kim Kardashian.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

5 Benefits of Owning Your Small Business Property

Is it time to purchase the commercial property you’ve been leasing?  If you’re a small business owner who currently rents office or retail space, you could be in a position to benefit from becoming an owner.

Of course, the decision to own or rent will depend on a number of factors unique to your business, such as your location, revenue, and business experience.

But there are general positives for your business that come from purchasing commercial real estate.  Here are five of the top benefits you could expect to enjoy should you transition from renter to owner.

1. The ability to build equity in your property

Perhaps the greatest drawback to leasing a commercial property is that every monthly payment simply ends up in the landlord’s pocket.  However, purchasing that space gives you the ability to immediately start building equity in the property.

If that property increases in value over time, you can cash in by selling or leasing the building.

Those who secure a loan to help purchase commercial real estate also have the option to tap into their equity by executing a cash-out refinance.  By refinancing and taking out a larger loan, a borrower can convert their existing equity into cash.  The amount of the original loan is then repaid to the lender while the rest can be used for business improvements or future investments.

2. The creation of additional revenue streams

If you purchase office, retail, or warehouse property that your business can’t occupy completely, you have the opportunity to establish a new revenue stream by leasing the additional space to tenants.

Rental income can play an important role in bolstering your revenue during difficult periods for your business.  This can provide a real sense of comfort for those working to get their small business off the ground. 

It must be noted that taking on tenants requires project management capabilities you may not currently possess.  If you do plan on leasing a portion of your commercial property, consider investing in property management training or hiring a professional to assist you.

3. Tax benefits

Owning commercial real estate puts you in a position to enjoy tax benefits that could significantly impact your bottom line.

As an owner, you can take advantage of depreciation deductions and mortgage interest write-offs that can offset the cost of your original purchase and generally ease the tax burden you may currently feel each year. 

Be sure to consult a tax professional to learn more about the benefits (and potential drawbacks) of owning commercial real estate.

4. Freedom and control

Renting a commercial property leaves you with few options when it comes to renovations or additions.  This can be a real source of frustration for those who enjoy being in control of all aspects of their small business.

Once you own your office or storefront, you have the freedom to truly make it your own.  If you purchase your restaurant’s building, for example, you could finally create more room for tables or redesign the kitchen.  Getting these types of changes approved by a landlord can take ages – by the time you’re able to make a necessary change, your business has already suffered irreparable damage.

With control also comes consistency.  Owners of commercial real estate never have to worry about a landlord’s rent hikes or rule changes that can stunt a business’ growth. 

5. Appreciating value

Commercial real estate investments have a history of strong appreciation.  Besides the general demand increases that come from scarcity in an active market, commercial real estate can appreciate in value based on their ability to generate income.

This means that as the owner of a commercial property, you have a hand in increasing the asset’s value.  By renovating the building or adding rentable space, you can effectively add value to your original investment.  This is one of the main advantages a hard asset like commercial real estate has overstock or bond investments.

Owning commercial property is not without its disadvantages as well.  The purchase price itself may be staggering for those just starting their business.  Additional challenges having to do with building repairs or tenant vacancies can be debilitating for business owners who don’t have the resources to manage them.  

But you may find that the benefits of finally owning your own office or retail storefront far outweigh the potential difficulties.  If you value day-to-day control and have a long-term vision includes both your business and the building it occupies, ownership may be your best bet for success.

If you’re interested in purchasing a commercial property, one of your first steps should be to determine the financing solution that makes the best sense for your business.  Commercial Direct, a division of Silver Hill Funding, LLC, specializes in providing flexible commercial mortgages to small business owners – even those with tax documentation issues that make it difficult to work with traditional banks.  

Learn more about how Commercial Direct can help you own your commercial property here.   

 

Author: Zack North

Zack North is the Director of Marketing for Commercial Direct.  As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Taking Stock and Shaping Up For 2019

One of the most popular New Year’s resolutions is to get fit. We say your business should be as buff as your body — and making it happen will be a lot easier on the muscles! Here are 4 areas of your business that should get a fresh look every year, along with tips on how to get them into their best shape ever.

1. Vision & Strategy

When you originally launched your business, you had a vision of what you wanted it to be one day. How does that vision relate to your current reality — is it your future, present, or past? Your answer will guide your strategy for the year ahead.

Your future: You’re still on track towards your goal, you’re still satisfied that it’s the right goal for you, and you believe it is achievable in current conditions. If this is your situation, your main concern is to keep an eye on your market, including new competitors, emerging trends, and the economic situation.

Your present: You’ve reached your goal and your business is now everything you envisioned back on day one. Congratulations! However, you now face the risk of becoming stagnant and falling behind instead of continuing to grow. It might be time for a revised goal and an updated strategy for how to attain it.

Your past: For one reason or another, your original vision no longer applies so well to your business. Your industry, your customers, or your own interests may have taken you in a different direction, maybe without much preparation. Wait no longer to do your groundwork, with a completely new vision statement and business strategy.

If you’re not sure which of these categories is — or should be — yours, it’s time for an outside view. Ask your best customers, expert consultants, or industry colleagues. Research industry trends and insights. This fresh, objective perspective can open your eyes to unrecognized opportunities for success.

2. Marketing & Sales

Once you’ve nailed down your vision and strategy, use them to create your brand identity. The more unique, accurate, and specific your brand and selling points are, the more effective your marketing efforts will be at acquiring new customers and retaining (or upselling) current ones. For example, any fitness studio can say they help people get fit; but only you can say you’re the town’s best authority on HIIT workouts.

Next, analyze how well your marketing channels are driving sales. If a channel (such as direct mail) is performing poorly, figure out why. Is it the wrong channel for reaching your prospects (who are looking online, not reading snail mail)? Is it the wrong channel for your message (such as a postcard crammed with too many words and images)? Fix or eliminate the losers and put your marketing budget into the winners.

3. Operations

Your business and your industry have evolved since you first opened your doors. Have your workflow processes, equipment, and employees evolved along with you? Or are they now struggling to meet demands they weren’t designed for?

This is the biggest opportunity for significantly improving efficiency and performance — and your bottom line. It also quite often requires an initial investment, whether in new tools, new software, new hires or additional staff training. A bit of cost-benefit analysis should show you whether it will be a smart move in the long run.

4. Finance

We know, it’s not your favorite thing to think or talk about. But it really is essential for business owners to know the state of their financial health, so they can make the right decisions at the right time. Questions to ask yourself include:

  • How often do I receive financial reports, and how current are they?
  • How long does it take my accountant to respond to my call?
  • Does my accountant provide me with insights for planning and growth?
  • Does my accountant spot ways that my business could run more cost-effectively?
  • How much of a hassle is it for me to do payroll and file taxes?

At Xendoo, we understand small businesses and the need for lightning-fast responses to ever-changing environments. Your dedicated team of accounting experts can help get your business into shape for the new year — and keep it that way, day after day,

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

What Type of Entrepreneur Are You?

Not every entrepreneur is made from the same mold. The reasons you started the business, how you run it, and how you define success could be very different from someone else’s.

Why is knowing what category you fall into important? Because you’ll have a better understanding of what drives you, why your business came to be, and ultimately help answer that age-old question… Who am I?

Here’s an overview of the four types of Entrepreneurs. In future articles, we’ll explore each of them in-depth.

The Freedom Seeker.

The Freedom Seeker prefers to work for themselves. They like to make their own decisions, set their own schedule, and above all, control their own destiny.  They also foster teams that can share in the same freedoms by breaking conventional models of how a business should run.

The Legacy Maker.

The Legacy maker wants to build a business that can be passed down to his or her children — and their children. For this entrepreneur, their business is their way of leaving their mark on history.  It’s one of the ways they’ll be remembered after they’re gone.

The Opportunist.

This Entrepreneur spots a money-making opportunity gets buy-in and gets out at the right time. The Opportunists love and excel at marketing and interacting with people. They are confident, optimistic, outgoing, and sometimes impulsive.  They run with those impulses and many times will reap the financial rewards of such perfect timing.

The Innovator

This Innovator starts a business based on his or her knowledge or innovation. The Expert would rather spend all day doing what they love, not actually operating the business. The expert or innovator prefers not taking risks and doesn’t like to have to prove themselves. Their confidence in their product speaks for itself.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.