Networking is vital to a small businesses growth. Typically, small businesses owners rely on their existing networks for initial customers. In addition, small business owners will try to quickly expand their networks in hopes of generating new customers. While this push to increase business contacts is understandable, small business owners should be careful to not alienate contacts. Here are some simple guidelines to professional networking:

The purchase agreement outlines detailed terms and conditions of a transaction. These items include (i) Purchase Price Terms, (ii) Escrow, (iii) Representations and Warranties, (iii) Provisions of the contract that are crucial, (iv) Special Considerations, (v) Indemnity, and (vi) Post-closing covenants / restrictive covenants.

Email marketing might be a good way for you to generate traffic for your website. However, before discussing email marketing, let’s first look at laws governing spam to ensure you don’t break any laws.

The CAN-SPAM Act of 2003 specifies requirements that marketers must comply with in order to be in compliance. Failing to adhere to these laws could be costly as each violation cf the requirements below is subject to a $11,000 fine.

• False and/or Misleading Headers - email’s “From,” “To,” and routing information – including the originating domain name and email address – must be accurate and identify the person who initiated the email.

• False and/or Misleading Subject Lines - subject line cannot mislead recipients about content/purpose of emails.

• Must have opt-out method - must provide return email address or way for recipients to specify that they no longer want to receive emails from you.

• Commercial email be identified as an advertisement - must include clear content denoting that the email is an advertisement and that recipients are able to opt out. And, it must include sender’s valid physical postal address -

In addition, commercial emailers may also be punished for pulling email addresses from websites that have explicitly specified that the email addresses listed on the website may not be used for sending emails.

Now that you are aware of the requirements around email marketing, let’s move on to discussing email marketing and its advantages.

Email marketing provides several advantages:

• Distribution at Low Cost - ability to reach large audience that would be otherwise in accessible.

• Ability to Track (aka Measure Profitability) - given that you are able to track the number of recipients opening, clicking through and purchasing from email campaigns, it is easy to calculate a precise return on investment and profitability on customers.

• Ability to Test on Small Scale - you have the ability to start off with smaller email campaigns to test success across various factors and recipient characteristics (e.g., demographics).

DMA: “The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the U.S., 2006-2007 Edition”, Direct Marketing Association, October 2006.

Key parts of a successful email marketing campaigns include:

• Appealing Subject - given the proliferation of spam and email marketing, many recipients will screen emails based on the subjects of the emails.  Therefore, you should strive to have a subject that grabs recipients’ attention.

• Good and Clear Content - your email campaigns shoud be targeted to specific recipient characteristics (e.g., demographics) and thus, your emails should also have content that is geared to these specific characteristics.

• A Call to Action - your email needs to have clear statement of what you want/expect the recipient to do.

There are a couple key metrics to monitor to help judge the effectiveness of your email marketing campaigns. A few are discussed below:

• Cost of Renting / Buying Names - how much did it cost in total and per email for your email campaign.

• Number of Opens - how many recipients of the email actually opened or viewed the email. If you aren’t getting a lot of opens, potentially your email is being considered spam by recipients and simply deleted without recipients opening it.

• Number of Click Throughs -how many recipients of the total number of emails sent are actually clicking through your link in the email to view the offer or promotion.

• Number of Users Unsubscribing - how many recipients clicked to unsubscribe from your newsletter, email campaigns, etc.

• Number of Purchases (if applicable) - how many email recipients actually made a purchase.

• Average Purchase Amount (if applicable) - for the recipients actually purchasing through the link in the email, what is the average spend per customer.

• Estimated Profit / Purchase - average purchase amount less the cost of the campaign/user and the cost of the goods your are selling.

This is an example indication of interest (IOI) for users to review.

Buyer LLC is pleased to submit this indication of interest to purchase Specialty Retailer, Inc. (the “Company”) in an asset transaction. Based on our discussions with the management team and the information provided, we believe the Company is a good fit with our investment criteria - to invest in growing companies with scalable management teams and infrastructure. We have a strong track record investing in specialty retail companies and are excited about the opportunity Specialty Retailer represents. We believe our background and years of experience building retailers both through organic initiatives and acquisitions makes us a valuable partner in achieving the Company’s strategic growth plans.

If you are starting an e-commerce business or a brick and mortar store, you will likely need transaction processing services.  Many providers exist so the actual process of securing a provider and understanding how things work might be a little confusing.

• If you want to gain a better understanding of transaction processing, here’s a good entrepreneur’s guide to merchant accounts.

• If you are only interested in obtaining a provider at a good rate, we suggest you go to TransFS. It’s a comparison shopping marketplace for small businesses.

There are several different tasks an accounting firm or auditor performs for a company. Typically, accounting firms or auditors review a company’s financial statements on an annual basis. The three types of review are as follows: (i) Audited, (ii) Reviewed and (iii) Compilations.

First it’s important to note that the quicker your website is up and running, the better. By having your website up sooner vs. later, you are giving google, yahoo, miscroft and other search engines the chance to start indexing your website as soon as possible. Even if your website is not perfect, you will be better off in the long run.  Several factors that affect your search ranking include:

• Content

• Meta Tags

• Keyword Tags

• Links - incoming and outgoing

1. Content

• Subject Focus - If your website is only about chocolate chip cookies, you likely will have a good chance of being ranked higher when a user searches for chococlate chip cookies because most of your content will all be related in some fashion to chocolate chip cookies. 

• Unqiue Content - People want to get unique perspectives and learn from various sources - all with different opinions.  it’s important to try and generate fresh and new content.  It will help you establish loyalty with your visitors. 

2. Tags

• Title Tags - a title tag describes the content for a given page. A title tag should contain the keywords for the given page. You should strive to keep title tags to ten words or less.

• Meta Tags

  • Description - approxiately 200 characters (be careful - 200 characters NOT words).

  • Keywords - This should be approxiately 30 words and be the words you think best represent the content on the page as well as the terms that search engine users may search on.

3. Keywords

• Aggregate Keyword Density - be careful not to overuse keywords in the body text of your pages. The percentage of keywords / total words should typically be 5% - 20%. Note that the percentage varies by topic. We will be posting another article soon on this topic.

• Individual Keyword Density - again, be careful not to overuse each keyword in the body text of your pages. The percentage of each keyword / total words should typically be 1% - 6%. Note that the percentage varies by topic. Again, we will be posting another article soon on this topic.

4. Links

There are two types of links - inbound links and outbound links.

• Inbound Links (aka Incoming Links, Backlinks) - These are links from other websites to your website.

  • From Trusted Sources - Search engines value inbound links fairly highly because they are hard to fake, especially inbound links from trusted and popular websites.  Some examples of highly trusted websites include Google, Yahoo and Wikipedia. Be careful of link farms though. These could actually hurt your traffic.

  • Anchor Text - visible hyperlinked text on a page.  This should be on descriptive and relevant to the link. For example, if you are linking to a link about SEO Optimization Factors, a potential anchor text option would be:

    • “You should try to learn more about SEO optimization so you can drive website traffic.” In this example, the “SEO optimization” is the anchor text.

  • Link Stability - Once again, links farms are bad and generally create turnover in links. By having a stable base of links, it helps to validate that your website isn’t just linking to link.

• Outbound Links - These are links from your website to other websites.

  • Link Stability - By having a stable base of outgoing links from your website, it can help your ranking. You should avoid linking to link farms because this will hurt your website in search rankings. And, make sure you test your outgoing links to make sure they are still active.  Users will get annoyed with clicking a link and having it not work. 

5. Trust

A trusted website lets search engines know that the content it is crawling is of high quality. Once again, this is something that is hard to fake. Therefore, websites that are highly trusted such as Yahooor Google are able to simply setup a new page for some keyword and be ranked within a few days. Not sure about you, but I’m not that lucky. It takes a lot of time and investment to build upyour website traffic.

An employment agreement is a formal employment agreement that addresses key terms and conditions of a person’s employment. It’s also commonly referred to as a senior management agreement or SMA. The following issues are usually addressed in an employment agreement:

An engagement letter is a combination of items - it’s a proposal, contract and listing of services to be provided. It basically formalizes the relationships between a customer and service provider (such as consultant). Key items included in an engagement letter include the work to be performed, key project deliverables (e.g., presentation, written work) and timing / structure of any payments.

A letter of intent (LOI) is the preliminary agreement entered into between a buyer and a seller. This document summarizes the transaction terms and conditions that have in principle been agreed to by both parties. Here’s a walkthrough on the key items found in a LOI.

An Indication of Interest (IOI) is a non-binding offer submitted to Seller to indicate valuation in general terms, usually a range of for the consideration the Buyer would pay. Obviously, IOIs may have a different order for paragraphs and information but generally an IOI is contains the following information.

A non disclosure agreement (NDA) is a confidentiality agreement between two parties. This basically prevents one of the parties from disclosing the information specified in the agreement. This helps to ensure proprietary and sensitive material is kept confidential. A NDA usually contains the following key items:

Swift Financial issued a press release highlighting that it raised $20 million in funding today.  This supplements the $6.5 million that Swift had already raised.  According to the press release, investors included Sutter Hill Ventures, Village Ventures, Permit Capital and a subsidiary of Marshall & Ilsley Corporation.

Swift’s motto appears to be KISS - keep it simple stupid. See below for some of items it lists on its website and some comments on its online application. Overall, it basically seems like it’s nothing more than a credit card - just with different marketing spin.

Businesses need capital for a variety of reasons. Generally speaking, below are the reasons capital may be required:

• Startup

• Working Capital

• Expansion / Growth

• Estate Planning

Startup

Now, let’s assume there’s a great product (e.g., innovative) or service that you want to sell. To sell this product or service, you will need some infrastructure and resources (e.g., computers, equipment, people, software, etc). Yes unfortunately, the old adage, you must spend money to make money, is true.

Working Capital

There is typically a lag between the time your product and/or service is sold to a customer and the time you receive payment. This lag depends on the customer but typically is between 30-60 days once the customer is invoiced. But, you likely will have to pay your suppliers / vendors within 15 - 30 days for the raw materials you need to make your product or service. Therefore, you owe money for the raw materials before you have actually received payment from your customers. In addition, some expenses typically are prepaid (e.g., insurance, rent, etc.), which will increase the cash needs of your business.

We will soon be posting an overview of items to consider when negotiating agreements with suppliers and vendors.

here is a general process that holds true for M&A processes. For purposes of this discussion, we will be taking the potential buyers point of view. This walk through is of course a simplified, high-level walk through but it should provide a useful base. We will be adding more details and examples around the M&A process soon. The M&A process can be broken up into a couple segments as shown below. The M&A process includes several documents including:

There are several state and/or federal licenses, permits and/or requirements that you need to be aware of as you start a business. While my list below is not meant to be a complete list, the following items are a good place to start:

According to the National Federation of Independent Business, small business owners cite employer sponsored health insurance as their biggest source of concern. A recent SBA report reported that the two most important factors associated with being uninsured are (i) firm size and (ii) wages. There are a lot of healthcare plan options for business options:

• Group Plans - There are several types of group plans.

  • Traditional Plans- covers reasonable healthcare expenses. Insured may go to doctor of choice.

  • HMO-covers reasonable healthcare expenses but insured must utilize doctors, provides within the HMO’s network.

  • Point of Service Plans - just as it sounds, fees paid as employees receive services. These plans often have additional fees that are burdensome to the plan participants. Therefore, FFS plans should be more of a last resort.

• Medical Savings Account (MSA) Plans - this is a consumer directed plan. It allows a company’s employees to have a tax savings account that may be used for medical expenses. These plans generally have high deductibles.

In addition, to healthcare insurance, there are several types of insurance that a business owner should have a basic understanding of to ensure the business and employees are protected.

There are several types of legal entities to choose from for starting a business. Each legal entity has its advantages and disadvantages but generally, a limited liability corporation (LLC) is the best option when starting a new company. However, it is important to compare the advantages and disadvantages of each legal entity before making a final decision.

Small businesses are predominantly funded by commercial banks. Small business financing is generally provided by those banks located in the same community or in communities nearby. As of June 2006, small businesses owed an estimated $634 billion to commercial banks - yes, $634 billion.

You may find that you prefer to buy a Franchise due to the amount of data that is provided and the operational assistance that you will be given. It is important to note that every franchise offers varying degrees of support and brand value. The costs of franchises vary but the following provides some guidelines when considering if a franchise is right for you: