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How to Build a Website

How to Build a Website

In this video tutorial, our staff walks you through how to build a WIX website, step by step (2019 edition). Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

Small Business Accounting 101

Small Business Accounting 101

An essential part of your business plan is being able to calculate your net income by identifying your business's revenue and expenses. These may include revenues, expenses, gains, losses, and net income. Revenues This is income generated from normal business activities over a period of time. This is typically calculated as the amount of goods/services sold multiplied by the price it was sold for. Expenses The costs associated with normal business activities that are subtracted from revenue. Some examples include rent, wages, and utilities expenses. Gains An increase in net income that is generated from non-business activities. An example includes the monetary gain from selling a piece of equipment at a price higher than what it was bought for. Losses A decrease in net income that is generated from non-business activities. An example included selling a piece of equipment at a price lower than what it was bought for. Net Income For a business, net income is the amount of revenue left after subtracting all expenses, taxes, and losses. Net income is the measure of profitability of a business. To understand your breakeven point, fixed costs, and variable costs, and to determine the best selling prices for your business, check out our Breakeven Analysis Overview video below. If you'd like a more comprehensive lesson, click here. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook Return to Building Strategic Partnerships Continue to Business Registration

Achieving Nonprofit Status

Achieving Nonprofit Status

Most nonprofits are 501(c)(3) organizations, which means they are formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, you first need to form an Arizona nonprofit corporation. Then, you apply for tax-exempt status from the IRS and the state of Arizona. Here are the details on how to become a nonprofit corporation in 9 steps. Please note steps 1 through 3 can be done together; however, they must be completed and approved before moving to step 4. How to Form a Nonprofit Corporation Step One: Select the Name of the Corporation The name of your nonprofit corporation must be distinguishable from the name of other business entities on file with the Arizona Corporation Commission. To see if your proposed name is available or to reserve a name for 120 days, go to the name database on the Arizona Corporation Commission’s website. Reserving a name will prevent another corporation from registering the name while you prepare and file your articles. Trademarks & Service Marks Finding a good name for your new Arizona corporation can sometimes be the most difficult piece of the formation puzzle. Ideally, you want a name that: (i) will afford strong federal trademark protection, but will not infringe on anybody’s trademark or service mark, (ii) will be easy for your customers to remember, (iii) will describe your products or services, and (iv) will allow you to obtain .com, .net., .org, .biz, .info and .us domain names. For information on obtaining domain names, see “How to Obtain a Domain Name that Does Not Infringe on a Trademark.” One way to check if your desired corporate name will infringe on a federally registered trademark or service mark is to search your prospective name and variations thereof on the searchable database of the United States Patent & Trademark Office. Step Two: Prepare the Articles of Incorporation Requirements You can create your nonprofit entity by filing articles of incorporation for a nonprofit with the Arizona Corporation Commission. Your articles of incorporation must include basic information such as: the nonprofit’s name the “character of affairs” it intends to conduct in Arizona whether it will have members or not its business address (physical or street address) if different from the statutory agent address the name and business address of each director the physical or street address of the statutory agent in Arizona, and the name and address of each incorporator. You must submit a Statutory Agent Acceptance form M002 and a Certificate of Disclosure at the time you file your articles with the Corporation Commission. There is an articles of incorporation form for nonprofit corporations on the Corporation Commission’s website. Use this form to create your Arizona nonprofit. Complete and file your articles following the instructions provided. The articles form available from the state has the minimal information necessary to create a nonprofit corporation in Arizona. It does not include language required by the IRS to obtain 501(c)(3) federal tax-exempt status. To receive tax-exempt status from the IRS, you'll need to have additional specific language in your articles, including: a statement of purpose that meets IRS requirements statements that your non-profit will not engage in prohibited political or legislative activity, and a dissolution of assets provision dedicating your assets to another 501(c)(3) organization upon dissolution. For more information on IRS requirements for tax exemption, including sample language, see IRS Publication 557, Tax-Exempt Status for Your Organization, available on the IRS website. Membership vs. Non-membership Nonprofit Corporations The Articles of Incorporation must state whether or not the corporation will have members. An Arizona nonprofit corporation is not required to have members. The choice to have members or not have members is a decision for the founders and depends on the nature of the proposed activities and the desires of the founders. Nonprofit corporations without members are governed by the corporation’s board of directors. How and Where to File File your articles of incorporation, the certificate(s) of disclosure and the cover sheet and pay the filing fee at the following ACC office: Phoenix office: 1300 W. Washington, 1st Floor, Phoenix, AZ 85007. ACC offices are open Monday – Friday, 8:00 a.m. to 5:00 p.m., except holidays. You may mail all the incorporation documents with a cover letter and a check for the filing fee to either ACC office. The ACC does not accept credit cards. Step Three: Complete IRS Form 1023 Whether to File a Form 1023 or Form 1023-EZ First, we must check to see if your business qualifies for Form 1023 or Form 1023-EZ (a reduced application time and fee, but your organization would need to meet specific qualifications). Steps to determine whether your organization would qualify for Form 1023-EZ: Click on the link below and go to page 13 of the worksheet to find qualifications: https://www.irs.gov/pub/irs-pdf/i1023ez.pdf If you answer “Yes” to any of the worksheet questions, you are not eligible to apply for exemption under section 501(c)(3) using Form 1023-EZ. You must apply for Form 1023 (SECTION III). If you answer “No” to all of the worksheet questions, you may apply using Form 1023-EZ (SECTION II). How to File Form 1023-EZ Instructions for the Form 1023-EZ: (If your organization does NOT qualify for 1023-EZ, then do NOT fill out SECTION II and instead move down to SECTION III labeled “Instructions for Form 1023”) Important note: Obtaining an Employer ID Number (EIN) and completing a Form 1023-EZ will trigger other filing requirements, including the requirement to submit a Form 990-series information return each year. Website with more information about the 1023-EZ online Form: https://www.irs.gov/forms-pubs/about-form-1023-ez Steps: If eligible to file Form 1023-EZ, register for an account on Pay.gov. If Form 1023-EZ appears compressed on Pay.gov when using Internet Explorer, you may need to turn on the "Compatibility View." Instructions how to turn on “Compatibility View” based on your version of Internet Explorer can be found at the Microsoft website. Enter "1023-EZ" in the search box. Complete the 1023-EZ form online. Here are two guides with step-by-step instructions to help you through specific questions that might be difficult to answer in the 1023-EZ Form: Simplified Guide: https://www.svdpusa.org/Portals/1/E.%20How%20to%20Electronically%20File.1023.EZ%201518.pdf In-Depth Guide: https://www.irs.gov/pub/irs-pdf/i1023ez.pdf Pay the user fee of $275 with this form: https://www.irs.gov/pub/irs-pdf/f8718.pdf Source of information on user fee: https://www.irs.gov/charities-non-profits/form-1023-and-1023-ez-amount-of-user-fee The Form 1023-EZ fee must be paid through www.pay.gov when the application is filed. Payment can be made directly from your bank account or by credit/debit card. Submit all files electronically on Pay.gov How to File Form 1023 Instructions for the Form 1023: (If your organization DOES qualify for 1023-EZ, then do NOT fill out SECTION III) Please note Form 1023 must be submitted online starting April 30, 2020. Website with more information about the 1023 Form: https://www.irs.gov/forms-pubs/about-form-1023 If you own Adobe Acrobat Version 9, there is an interactive form that is very straightforward & much easier than filling out the regular form: https://www.stayexempt.irs.gov/home/starting-out/interactive-form-1023-prerequisite-questions If you do NOT own Adobe Acrobat Version 9, then follow the steps below: Steps: Download the Form 1023 (https://www.irs.gov/pub/irs-pdf/f1023.pdf) and open it in a computer application where you can save your answers (ex. Adobe Acrobat) OR print the document and write your answers manually. Here is an in-depth guide with instructions to help you through specific questions that might be difficult to answer in Form 1023: https://www.irs.gov/pub/irs-pdf/i1023.pdf Please review the Form 1023 Checklist on Page 27 of the Form 1023 to ensure you have completed everything necessary to submit your Form 1023. After manually filling out the form & reviewing the Form 1023 Checklist (on Page 27 of the Form 1023), you will need to mail the printed & completed Form 1023, user fee payment of $600 (source: https://www.irs.gov/charities-non-profits/form-1023-and-1023-ez-amount-of-user-fee), and all other required information to the address below: Internal Revenue Service Attention: EO Determination Letters Stop 31 P.O. Box 12192 Covington, KY 41012-0192 **Address valid until April 30, 2020. After this date, submit all applications online at Pay.gov.** What to expect after applying for 501c3 Step Four: Select the Corporation’s Statutory Agent Every nonprofit corporation formed in Arizona or qualified to do business in Arizona must have and maintain a statutory agent located in Arizona. The purpose of a statutory agent is to give notice to the public of a person or entity authorized by the corporation that can be served with legal documents as the agent of the corporation. The statutory agent is the person or entity that can be served with a summons and complaint filed in a lawsuit. The statutory agent must be one of the following: An individual who resides in Arizona. A domestic business or nonprofit corporation formed under Arizona law. A foreign business or nonprofit corporation authorized to transact business or conduct affairs in Arizona. A limited liability company formed under Arizona law. A limited liability company authorized to transact business in Arizona. The corporation must notify the ACC if it changes its known place of business or statutory agent. If the statutory agent changes its street address, the statutory agent must give written notice to the corporation of the change and sign, either manually or in facsimile, and deliver to the ACC for filing a statement that includes the new address and that recites that the corporation has been given written notice of the change. Step Five: Prepare a Certificate of Disclosure When you file the articles of incorporation with the ACC, you submit a completed certificate of disclosure (pdf) for nonprofit corporations. All incorporators and all people who are officers, directors or trustees at the time the articles of incorporation are filed must sign an initial certificate of disclosure and file it with the ACC. Signatures must be dated within 30 days of delivery to the ACC. When completing the certificate of disclosure: (i) check yes or no for question A, but if you check yes, you must attach to the certificate of disclosure all information requested in question B. Check yes or no for question C. If you check yes, you must attach to the certificate of disclosure all information requested in question C. If any person becomes an officer, director or trustee of the corporation, within sixty days after delivering the articles of incorporation to the ACC, the corporation must sign and deliver another Certificate of Disclosure to the ACC within the sixty day period. If the incorporator(s) ,of the corporation do not comply with this requirement, the ACC may administratively dissolve the corporation. Step Six: Approval or Rejection of the Articles of Incorporation After the ACC reviews your articles of incorporation, it will mail a notice of approval or rejection of the articles of incorporation to the corporation’s place of business. Your corporation was created as of the date the articles were filed, however if it was rejected, it is terminated as of the date and time the ACC made its decision. The ACC will notify you in a letter why the articles were rejected. You may then correct the problem and resubmit another set of incorporation documents. However, you will not be able to recover your filing fee. Step Seven: Prepare Corporation’s Bylaws Each initial director of a corporation must adopt and sign nonprofit corporation bylaws for the corporation. The bylaws of a corporation may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles of incorporation. Note: Arizona Revised Statutes Section 10-3206 requires all Arizona nonprofit corporations to have Bylaws that are adopted by the nonprofit corporation’s board of directors Do not use for profit corporation Bylaws. or Use Bylaws drafted for use by non-Arizona nonprofit corporations. Step Eight: Hold Board Directors Meeting After incorporating, the board of directors must hold an organizational meeting at the call of a majority of the directors to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting. This organizational meeting must be documented by corporate minutes signed by all the directors. Step Nine: Obtain a Federal Employer ID Number If the nonprofit corporation intends to file an application to obtain exemption from federal income taxation, the corporation must obtain an EIN. Banks require this ID number for bank accounts. If the corporation will have employees and pay wages, it must file payroll tax returns and pay payroll taxes using the EIN. You should apply for an EIN early enough to have your number when you need to open a bank account, file a tax return or make a tax deposit. There are four ways to get an EIN: You can get an EIN over the phone by calling the Tele-TIN phone number for your state, which for Arizona entities is 1-800-829-4933. You can fax a completed Form SS-4 to the appropriate service center (215-516-3990 for Arizona), and they will respond with a return fax in about one week. If you do not include a return fax number, it will take about two weeks. If you apply by mail, send your completed Form SS-4 at least four to five weeks before you need your EIN. Obtain a federal EIN online in a matter of minutes from the IRS website. The online EIN is a provisional EIN, but it will be the permanent federal employer identification number for your business unless voided by the IRS. The IRS may void an EIN obtained online if: (i) the name and social security number of the principal officer do not match Social Security Administration records ii) the business has already been assigned an EIN. Keep a record of your application for an EIN. Be sure to print your SS-4 application after the EIN is assigned and keep a paper copy for your records. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Sources https://www.nolo.com/legal-encyclopedia/forming-nonprofit-corporation-arizona-36051.html https://www.stayexempt.irs.gov/home/starting-out/applying-section-501c3-status https://info.legalzoom.com/requirements-maintain-501c3-status-27073.html https://www.keytlaw.com/nonprofitcorporations/how-to-form-an-arizona-nonprofit-corporation/ https://www.501c3.org/frequently-asked-questions/ Return Home Continue to Build Playbook Return to Business Registration Continue to Loan Resources

Social Media 101

Social Media 101

Social Media is a vital part is reaching out to customers on an online platform. Here the AMI team will walk you through how to set up a social media account for your business! Basics of Instagram for Small Businesses In today’s digital world, entrepreneurs (like you!) have the opportunity to expand their reach with the use of social media: Instagram, Facebook, Twitter, YouTube, and more. The days of the ever time-consuming door-to-door sales and sole word-of-mouth advertising are gone. Expanding your digital footprint will enable your potential customers and other interested parties (think local news stations or local entrepreneur-empowering organizations like us) to more easily find your business. It helps customers understand what your business is all about, and allows you to establish a platform to more personally connect with your customers. This tutorial is the first part of an Instagram mini-series: it will take you through the basics of building and setting up an Instagram account for your business. How to Create an Instagram Account Step 1: Go to your smart device’s app store, look up Instagram, and download. Use the red circles as a guide if needed. If you already have a personal profile, great! However, let’s make a second account specifically for your business. Step 2: Select an email and password that you will remember and use often. Select a username that should clearly reflect your business, such as your business name if it's not already taken. (Hint: if it is already taken, try adding “AZ” to the end of it!) Tip: Unless your business has a number, try to refrain from using numbers in your username. For example, our Instagram is @azmicrocredit, not @ami480. Step 3: Upload a profile picture—this should be a picture of your company logo. Once your account information is created, you will be prompted with some of the following options. If you have contacts with any current or potential customers, it would be a great idea to let them know you have created an Instagram! Also, you should upload a profile picture of your company logo. Step 4: Lastly, you will be taken to your account where you may once again be prompted to sync contacts and/or be given suggestions on accounts to follow. How to Navigate Instagram Setting up Notifications How to Post Posting on Your Page The next section of this article, “Content Creation Tips,” details what you should post specifically. Posting on your Story What is an Instagram Story? Unlike a regular post, an Instagram Story only lasts for 24 hours. You can use this to your advantage by posting about special daily deals or events your business is participating in. Posting on your story is the same process as a normal post, except you will click on the top left icon labeled “Your Story”. Content Creation Tips Branding Your Business Define your brand. What is at the core of your business? What are your business’s values and mission? What do your customers value, and who is your target demographic? These questions can guide how you think about your business. If you run a food business that is centered around delicious meals with a fun and vibrant community, you can showcase your food with bold colors. Occasionally show gatherings of people-centered around your food. If your business is driven by your team and your employees, feel free to showcase your team members and write about the awesome work that they’re doing! Take and edit great pictures. Although you don’t need to be a professional photographer to run an Instagram, it still helps to have clear, quality photos. Make sure that your photos are lit properly, not blurry, and focus on the subject that you want your customers to see. Create compelling captions. Tell a story through your caption—it makes the photo more meaningful, and if your picture needs a bit of explanation, the caption can give your potential customers clarification of what is in the photo. Captions can carry your personality—make them anywhere from punny, whimsical, down-to-earth, informative. Building an Audience Liking, Commenting, Following Instagram is not just about the content that you produce: it’s about the community that you establish on the platform. To begin growing and expanding your Instagram audience, one simple trick is to Like and Comment on the posts of related IG users, and even Follow them as well. For example, if your business is located in the Phoenix area, you can follow @downtownphoenix, @downtownchandler, @downtowntempe, and other cities’ pages. If your business sells food, then you can follow Arizona-specific food Instagrams (such as @azfoodie) to start building the base of users you follow. Interacting with closely-affiliated accounts will help others (your potential customers!) in the community find your business through their Instagram pages as well. Hashtags Another way to build your audience is to search and follow hashtags in addition to using them in your post. What is a #hashtag? A hashtag is a keyword phrase with a pound sign in front of it, and it helps to label and identify your post. It helps other Instagram users find your content easily on that same topic—for example, if you have a food business in Arizona, you can utilize #AZfood #Phoenixfoodie to help steer traffic towards your post. Additional Resources AMI will be continuing our Instagram mini-series to help you establish the best Instagram presence for your small business. In the meantime, we’ve curated a list of some of the best articles that you can continue to read to improve your business’s digital presence. General Business Instagram Tips https://blog.hootsuite.com/how-to-use-instagram-for-business/ https://sproutsocial.com/insights/instagram-for-business/ Content Creation https://www.hopperhq.com/blog/produce-epic-instagram-content/ https://blog.iconosquare.com/create-quality-instagram-content/ Instagram Stories https://later.com/blog/instagram-stories-for-business/ Instagram Analytics https://www.wordstream.com/blog/ws/2018/11/01/instagram-analytics https://www.socialmediaexaminer.com/4-ways-to-use-instagram-insights-to-improve-marketing/ Instagram Advertisements https://blog.hootsuite.com/instagram-ads-guide/ About AMI: Contact Us Arizona Microcredit Initiative is a 501(c)3 nonprofit that strives to empower the underserved entrepreneurs around the Phoenix valley through business instruction, microloans, and consulting. If you have any questions or comments about the article/want to learn more about how to leverage the digital world for your small business, please feel free to contact AMI at info@azmicrocredit.org. Subscribe to our newsletter to keep updated on the Instagram mini-series and receive more educational material for your small business! Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return to Start Here Return to Build

Problem Solving 101

Problem Solving 101

How to Handle Your Business Issues with the Most Efficiency and the Least Stress Learn how to develop your critical thinking skills so you will be able to overcome any problem that may arise when starting a business. Problem-solving is a business skill that often takes time and experience to learn to do effectively – this is just a beginners’ guide on how to structure that process. AMI’s Consultants have robust experience in solving problems, and are willing to help! To work with us 1:1 to solve your most pressing business problems, send us an email at consulting@azmicrocredit.org or schedule a free appointment at www.azmicrocredit.org. This guide has been published by Arizona Microcredit Initiative, 501(c)(3), an Arizona-based nonprofit organization dedicated to supporting underserved entrepreneurs in the Phoenix area through microlending, consulting, and education services. Visit our website to learn more! An Introduction to Business Problems You probably don’t need anyone to explain what a business problem is – you deal with them daily and have a much better understanding of where they come from, how serious they are, and, to a degree, how to solve them. The purpose of this document is to provide you, the prospective or current entrepreneur / small business owner, with tools to structure your thinking about problems so that 1.) you can more smoothly tackle them yourself and 2.) train others on your team who aren’t as involved as you to solve problems on their own. Business problems arise in all sizes and in all aspects of business. Here are a very select few, but the ones you might encounter may be much larger or smaller in size, scope, and importance to your business. This is just a list of examples: My sales this month have been lower than usual The supplier is planning on hiking his prices, which will lower my margins The landlord is planning on increasing rent There's a new competitor opening soon nearby Some customers left negative reviews about my business The fact is, there’s no want for business problems in entrepreneurship. Real, practical, and impactful solutions, though, are much rarer. We at the Arizona Microcredit Initiative can’t guarantee that this guide will lead to the perfect solution to all your problems, but what it can do is give you the tools to maximize your chances that you do find it. The process of identifying a problem could be called problem discovery – it’s the realization that there’s a gap between the businesses’ perfect condition (its ideal state) and where the business is now (its current state). To put it simply, business problem solving is the process of bridging the gap between those two. The Stages of Problem Solving Problem-solving can be thought of as a cycle with five distinct steps, the first of which we’re already familiar with – problem discovery. It’s where we identify what exactly the problem is. The other stages are developing a hypothesis, framing your thinking, research & analysis, and generating solutions. Below is how we at AMI visualize problems that we solve for entrepreneurs. It’s important to remember that problem solving is cyclical – you’ll never run out of problems to solve, but they should be tackled one at a time. You may have heard the saying “smooth is fast, fast is smooth” – that applies to problem-solving, too. Tackle one at a time, and more problems are likely to be solved that way. The Stages Explained Step 1: Problem Discovery This is the stage in which problems should be identified. Some tips we have for stating your problem are the following: •Pick exactly one problem – it’s easy to combine two or three into one, but solving that many at once is more complex •Identify the source of the problem – where is it coming from? Who or what is causing it? This can help identify stakeholders •Know your timeline – some problems you have months solve, some just weeks, and for others you may have just days. Understanding the timeline can help save your efforts in terms of finding a usable solution Step 2: Formulate a Hypothesis This stage feels more academic than it really is. What we’re really doing here is making a claim that we can test about the problem that has been identified. Here’s an example: if the problem is “my revenue numbers are lower than normal,” then an example of a hypothesis could be, “my revenue numbers are lower than normal because my prices are too high.” A hypothesis is an explanation for the problem, which is the most important part. Exercise: My business problem is _______________________________________________________________ My hypothesis is _______________________________________________________________ Step 3: Framing Your Thinking For most people, this stage is the trickiest part of problem-solving. Framing your thinking essentially involves making a list of those factors that would influence your hypothesis (in other words, all the considerations that matter) and prioritizing those factors so you can identify where to start with your analysis. If this sounds abstract, it is; here’s an example to better illustrate: Problem: Revenue has declined this month Hypothesis: Revenue has declined this month because of new competition Framing your Thinking: •What is the number of competitors I have? Is it different than it was before? •What is the pricing level of each competitor? Is it different than before? •What changes did I make internally over this period? Is anything different? • This list is neither perfect nor comprehensive but should give you a flavor for how to make your list of considerations. Next is the task of prioritizing these things. Finding out the number of competitors is easy – a quick internet search would give us that answer. The pricing level of our competitors would need a bit more research. Understanding internal changes would require making a log of business decisions to find what could have triggered this. Exercise: Make a list of all the reasons or factors that could help uphold or disprove your hypothesis •_________________________________________________________________ •_________________________________________________________________ •_________________________________________________________________ •_________________________________________________________________ Step 4: Research and Analysis If Step 3 is the most difficult to understand in this cycle, Step 4 is the most difficult to actually do, because it usually entails the most work out of the 5 Steps. The research and analysis phase consists of doing whatever analysis needs to be done about the factors you identified in Step 3. For example, for the factors outlined above (number of competitors, pricing strategies, and internal changes), the analysis could look like this: Use the internet to understand what competitors are in my area or space now. Is this number different than before? If so, who are the new players? Based on this line of questioning, you might need to do a fresh round of market research. Use the internet, chambers of commerce, professional associations, or other contacts to understand what products or services the competitors offer, and at what prices. How different are these prices from your own? Compile a log of all the business decisions made in the past month. Did any of them have a tangible impact on revenue drivers? Did I make inventory changes? Did I change prices? Did I change the quality of any of my products or services? This phase can multiply quickly if left unchecked. That’s why it’s important to make a fixed list of analyses that you’re going to do before you do them. When AMI begins consulting, we use a document called a “Scope of Work” that outlines what we’re going to do, and by when. This helps us keep problem-solving from getting out of hand. Another tip is to make sure that you’re focusing on conclusions. Knowing the number of competitors is somewhat useful, but knowing the competitors compared to before, identifying their strengths and weaknesses, and knowing where your business needs to change is far more useful. Step 4: Identifying a Solution Now is when you can solve the problem! The reason we recommend doing all the research first is so that less time is spent making changes, which can be costly or risky, and more time figuring out exactly where and what the problem is. When you visit the doctor, they don’t operate on you without knowing what’s causing the issue. As an example, if you saw your revenue falling, the first instinct might be to increase your marketing or lower your prices. But if the real reason for your declining revenue was that the latest batch of inventory had blemishes that caused customers to be dissatisfied with them, then neither of your actions would have solved the problem, meaning you’ve incurred costs without addressing the problem. Using this framework helps address that. The solution stage is the most creative phase and the one in which we have the least guidance. Some tips we can give are as follows: Know what you can reasonably accomplish – if money, time, or support were no object, we could solve almost anything. Entrepreneurs often have runways, however, and finding solutions that fit within our constraints is often challenging Be creative and have alternatives – while your first plan may seem like it checks all the boxes, it’s important to have backups. Have plans A, B, and C, and be willing to try all of them if needed. Having backups is almost never a bad idea. Leverage your network – it takes a community to make a business successful. Think of mentors, professional partners, friends, associates, or any other supporters you may have. The path forward is your decision, but perspective can help. Make a plan and execute – after you make a plan, it’s time to execute it. We recommend thinking through the steps, how long each step should take, and the specific actions you’ll need to take. Breaking things down can make this less overwhelming. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return to Start Here Return to Build

Loan Resources

Loan Resources

This regularly-updated guide gives an overview of funding resources available to small business owners in Arizona. Arizona Microcredit Initiative Microloans Overview Arizona Microcredit Initiative (AMI) is a 501(c)(3) nonprofit that empowers underserved entrepreneurs to start or expand businesses through low-interest microloans that are tailored to fit your business needs. Qualifications Loan funds must be used to purchase revenue-generating assets Fulfill collateral Agree to AMI’s loan schedule Person of good character Application Process Fill out a loan interest form with your basic contact information and business details Meet with an AMI staff member to discuss your business and its needs Fill out a loan application with your personal and business information Include required documents in your application submission Required Documents Personal Federal Tax Return (2016 and 2017) Last 6 months bank statements (personal and business accounts) Active tradeline (utility bill or landlord reference) Employer ID Number or Tax ID Number for business Planned loan budget Complete authorization to pull a credit report form from our partner Marisol (Phase II only) www.azmicrocredit.org/loans Desert Financial Credit Union Small Business Emergency Loan Overview This loan program is designed to help cover operational expenses such as payroll, utilities, rent, and taxes for businesses negatively affected by the pandemic. Qualifications Business must be physically located within Desert Financial’s field of membership. Business must be independently owned and operated. Business must have been established for a minimum of 3 years. A personal guarantee is required Application Process Fill out a loan information request with your basic contact information. A representative will reach out to discuss your options. Walkthrough the loan application process with the representative. Required Documents Information is not available to the public https://www.desertfinancial.com/health/small-business-emergency-loan Kiva Crowdfunding Loans Overview Kiva is an international nonprofit, founded in 2005 in San Francisco, with a mission to expand financial access to help underserved communities thrive by crowdfunding loans. Qualifications Business be based in the United States Must be over 18 years old Loan must be used for business purposes Business must not be engaged in multi-level marketing/direct sales, illegal activities (e.g. gambling, scams), or pure financial investing (e.g. stocks) Cannot currently be in foreclosure, bankruptcy, or under any liens Must be willing to demonstrate your social capital by having a small number of friends and family make a loan Application Process Fill out a loan application If your application is approved, prove your creditworthiness by inviting friends and family to donate to you Go public on Kiva for 30 days, lenders crowdfund in increments of $25 or more Borrower repays the loan based on the repayment schedule and the borrower’s ability Required Documents Business proof Approximate credit score Income Major monthly payments PayPal account www.kiva.org/borrow Growth Partners Arizona Small Business Success Loans Overview Growth Partners Arizona helps nonprofit leaders and small business owners who create change in economically distressed communities gain the operational resources and business guidance they need to improve the lives and economic wellbeing of Arizona residents. Qualifications Do business in Arizona (valid business license and be in good standing with the state of Arizona) Annual revenues in excess of $50,000 In business for at least two tax filing periods; no start-up businesses Minimum FICO score of 660 Priority is given to businesses located in CDFI investment areas Application Process Fill out a loan application with your basic information and loan request details Include required documents in your application submission Before submitting these materials, please contact Lesli Pintor at (520) 382-9218 or Lesli@GrowthPartnersAZ.org for further instructions Required Documents Copy of business license Confirmation of business registration and certification of Good Standing with the State of Arizona Office of the Corporation Commission Two years of historical business financial statements Two years of business and personal federal tax returns Interim business financial statements (current within 45 days of application) Business debt schedule dated consistent with the interim business financial statement Personal financial statement dated with 45 days of application www.growthpartnersaz.org/small-business-success-loans/ U.S. Small Business Administration Disaster Loan COVID EIDL Overview The SBA provides low-interest disaster loans to help businesses and homeowners recover from declared disasters. *Amount Varies Qualifications If you are a small businesses, nonprofit organization of any size, or a U.S. agricultural business with 500 or fewer employees that have suffered substantial economic injury as a result of the Coronavirus (COVID-19) pandemic, you can apply for the COVID-19 EIDL. This loan applies to all businesses based in any U.S. state, territory, or the District of Columbia. Application Process Check disaster loan declarations in your area Apply for a disaster loan on the SBA website Check your loan status online for updates Required Documents Information is not available to the public https://www.sba.gov/funding-programs/disaster-assistance Business Development Finance Corporation Loan Overview We are one of Arizona's most experienced SBA lenders, and we have tools and resources that simplify the SBA 504 loan process. Qualifications Facing immediate pressure because of COVID-19 SBA 504 Eligible SBA 7(A) Eligible Application Process Contact BDFC to have a team leader assist you with our SBA applications and loan process https://www.bdfc.com/small-business/ CARES Act Readiness Program for Small Businesses Overview Arizona Small Business Association and the Arizona Chamber of Commerce & Industry have teamed up to launch a free training program to help small business owners navigate the different programs and relief funds offered as a part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act. The program focuses on financial planning and helps with submitting documents. It is self-guided and can be completed at your own pace, in some cases in less than an hour. Courses are offered in both English and Spanish. Program Details elect either the novice or experienced borrower track based on your experience with borrowing from the Small Business Administration Enroll by creating an account with your basic contact and business information Depending on your selected track, you will go through two to five online classes that can be accessed from a desktop, tablet, or mobile device Upon completing the program, you will receive a Certificate of Participation that grants you access to a live webinar with business experts www.caresactaz.com/ Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook Continue to Elevate Playbook

Small Business Insurance

Small Business Insurance

Small Business Insurance is any insurance policy, singular or packaged, designed to protect your business from external risks. The three main types of Small Business Insurance are: Business Property Insurance • Coverage protects your business’s physical assets (property, plant, equipment, inventory) Business Income Insurance • Coverage protects potential lost income through external factors such as theft or property damage General Liability Insurance • Coverage protects your business from lawsuits related to customer injury, property damage, or negative outcomes in case of a service based business In addition to the main coverages listed above, there are auxiliary policies that provide further protection to your business: Workers’ Compensation Insurance • If your business is large enough to have other employees, this coverage provides benefits to those employees if they are injured on the job Commercial Auto Insurance • If your business requires use of a vehicle, a commercial auto policy can protect that vehicle from theft or accidents Cost of Small Business Insurance The costs of small business insurance are a critical consideration in any business owner’s decision to insure their business, This is information that is sourced directly from the insurance provider, however, as it is calculated on a case-by case basis. Every business’s needs, risk profile, and specific policy composition will be different, and the best way to find information regarding this is to seek free insurance quotes from providers. It is critical to remember that small business insurance can be a great investment in protecting your business, but it must be within the means of the business as well. Purchasing Small Business Insurance Small Business Insurance can be purchased from your preferred insurance provider. Every provider will have a different set of parameters for evaluating your business risk, a different set of coverages, and different package deals, so evaluating multiple different options is recommended. Some insurance providers offer packaged policies, which combine one or more small business insurance policies for total coverage of your small business. Packaging your policies may also allow for cost savings. Arizona Microcredit Initiative, 501(c)(3) is not an insurance provider, but can help you evaluate your options and choose the policy that will provide you with the best protection. For more information, please email info@azmicrocredit.org or visit https://www.azmicrocredit.org/schedule-a-consultation-1 to schedule a free consultation. Return Home Continue to Elevate Playbook

A/B Testing

A/B Testing

Learn how you can test two different advertisements to see which one is the most effective in obtaining consumers. --- COMING SOON --- Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Elevate Playbook

Social Media Advertising

Social Media Advertising

Overview Google Ads Overview Google Ads is the paid advertising that appears on Google searches. If a search matches a keyword, your ad can appear at the top. For example, a bakery may choose keywords like “bakery”, “cake shop”, or “bakery near me." Bid to Display Ad Google determines which ads appear on each search result page from their advertiser’s bidding quotas. For example, if Example Company set a budget of $4 per ad, and their rival, Showy LLC, set a $2.50 per ad budget, the ad for Example Company would appear at the top of the page. However, just because the advertisement appears does not necessarily mean the advertiser will be charged yet. Pricing Options Option 1 Google ads have multiple bidding models, but the most common and intuitive is their pay-per-click (PPC) model. In other words, you will only be charged for your advertisement if and when an individual clicks on your ad. Option 2 Google ads also offers a cost-per-mille (CPM) model, in which advertisers are charged a certain amount per 1000 users who view the ad. Even if no interaction with the ad occurs, advertisers will still be charged if it appears on their search results page. Option 3 Cost-per-engagement (CPE) refers to the bidding model in which advertisers will only be charged if users perform a specific action after clicking on the ad, such as signing up for an email list or filling out a survey. *The average Google Ad cost per click is between $1 - $2. However, more competitive keywords are more costly. Creating Your Google Ad Step 1: Setting Goals Before you begin, it is a good idea to set up a daily budget you will be willing to spend on advertising, in addition to compiling a list of keywords you would like to most associate with your business. Having these in mind before setting up the ads will result in a better designed marketing strategy and budget Next, go to ads.google.com and click Start now. Here you can choose your main advertising goal out of the following options. Please refer to the screenshot below for how this step will appear on the Google Ads platform as well as the exact verbiage utilize on the website. One of their propelling questions as you begin the process is “What’s your main advertising goal?” This question not only prompts discussion on overall goals, but directs the creation of short-term and long-term goals. Step 2: Providing Business Information When prompted, provide your business name as you would like it to appear on your ad. Provide the website link that users will arrive at once they click your ad. Please refer to the screenshot below for how this step will appear on the Google Ads platform as well as the exact verbiage utilize on the website. *The website provided doesn’t necessarily have to be your main page, especially if your business has multiple offerings that you would like to create different ads for. Step 3: Creating the Ad The advertisement must include at least one headline and one description about your business. Further, the ability to customize items from the keywords for the business that matches your ad to searches. Selecting a zip code, city, or region narrows the search and highlights your target audience. Step 4: Budget and Final Review Select your budget option. Google recommends between $9 and $15 per day, but the decision is at your discretion and can be changed at any time. Next, input payment information and confirm! Instagram Ads Overview Instagram is an effective form of driving awareness, reaching a target audience, and sharing your story. Instagram ads are posts and stories that look like regular Instagram posts but identifiable via the label, “Sponsored”. Types of Instagram ads include stories, photos, videos, carousel, collection, explore, IGTV, and Instagram Shopping ads. Each ad serves a specific objective and contain distinct “call to action” buttons. This step-by-step guide to create ads will help navigate through the Instagram ad process, and provide additional resources to improve the effectiveness of your ads. Given Facebook is the parent company of Instagram, you need to use Facebook Ads Manager to manage ads on Instagram. To start, connect your Instagram and Facebook account to Facebook Business Manager. Step 1: Begin the Campaign Process To begin, there are two creation processes to choose from. The default setting, Guided Creation, is helpful if you are new to marketing. In this mode, select the marketing objective that best aligns with your ad goals. Guided creation walks advertisers through the entire ad process. On the other hand, Quick Creation is useful if you have prior experience advertising and provides the user with more control. In this guide, we’ll focus on Guided Creation. Step 2: Identify Your Audience Instagram’s integration with Facebook Business Manager allows you to utilize all of the available targeting tools. You can add a list of customers, visitors, and leads as well as additional demographic information including location, age range, gender, etc. Step 3: Choose Ad Placements Here, you can select the social media platform (Facebook, Instagram, or Messenger) and the type of post. We recommend utilizing Instagram Story Ads to best engage with your target audience due to the lower costs and performance. Instagram stories cover the entire screen, offering fewer distractions to the audience as compared to feed ads. Step 4: Budgeting and Scheduling In this step, you’ll decide how much to allocate towards the ad’s budget and schedule. The Facebook Ads Manager features optimization and bid strategy options adjustable to your campaign goals. These features allow you to set daily/lifetime campaign budgets, bid caps, spend limits, and automated budget redistribution amongst your ads to maximize the value and effectiveness of your campaign. Step 5: Create Content Finally, create your ad content by selecting the format, choosing photos or videos, paying, editing any final details, and then confirming. Facebook Ads Overview The best formatting of an advertisement on Facebook is directly through a business Facebook page. Attached below, within additional resources, is a step-by-step on how to create a Facebook business page and how to create an advertisement on Facebook. Once the business page has been created, we would highly recommend adding some content available on your Facebook page. Step 1: Starting the Ad Process Open the business page and click the blue button on the lower left. Then, please choose the overall objective of the advertising. For instance, some objectives include boosting a Facebook post, increasing website traffic, obtaining more leads, promoting a business page. Step 2: Add Images and Text to the Advertisement Facebook may suggest photos and text, but feel free to upload a new photo or any marketing material you have prepared. Step #3: Target Audience Select the audience or the target demographic for your business. Selections will provide options to select an age range and a location for the customers. Due to the cost and lead time associated with shipping, it is better to advertise to an audience in closer proximity to provide more affordable shipping options and lower lead times. Step 4: Ad Logistics Next, plan a budget that is affordable for your business. Facebook will the user to input the time frame of the ad and the cost of the advertisement. Further, on Facebook Ad Manager, there should be an estimate given for the number of people the advertisement reaches on a daily basis. Please keep in mind is that you will never be charged more than your budget. Please refer to the screenshot which identifies options for the overall advertising budget and duration. The total budget and duration for the advertisement are open to customization as seen from the drop-down and fill in the blank section. Step 5: Approval Process Once the advertisement undergoes the review process and the ad is automatically approved, therefore, it will be uploaded right away. The advertisement can always be edited and paused if it is not performing well, or if revisions need to be made. Additional Resources How to Create a Business Page How to Advertise on Facebook More Information on Facebook Ads Etsy Ads Overview Etsy is an online marketplace primarily utilized for the sale of handmade or vintage items and unique art and craft supplies that are typically not found in other popular marketplaces like Amazon and eBay. The goods bought and sold on Etsy are produced or curated by small businesses and individuals working on niche passion projects. Etsy Ads Sellers can purchase advertisements to display a few or all of their product listings and shops across Etsy’s website and app. Sellers are charged for their advertisements on a cost-per-click basis which means the seller pays the ad fee only if their ad is clicked on and not if it is just displayed online. The cost-per-click is not a stagnant amount i.e. this fee will change from one day to another as per Etsy’s competitive ad space bidding amongst different sellers with similar target audiences for a particular day. Below we have noted a step-by-step guide on Etsy advertisements as the business explores advertising on Etsy. Step 1: Set Up Etsy Merchant Account Create an Etsy account using your business email address, Google, or Facebook account. On Etsy.com, click the Your Account icon in the top-right corner, then click Sell on Etsy. Then, review the Sell on Etsy page for details on seller fees, tools, and testimonials. Once you are familiar with the details, scroll down and click on Open your Etsy shop. The Open your Etsy shop feature allows you to modify shop preferences such as shop location, shop name, product listing details, and billing method Within the Stock Your Shop page, be as robust as possible with the Listing Details by adding multiple keywords to the title and entering details for the optional questions as well. This will lead to maximum engagement from the website visitors. Step 2: Advertising Preferences On Etsy.com, click on the Shop Manager icon in the top-right corner, then click on Marketing, click on Etsy Ads, and select Get Started on the newly opened screen Enter your advertising purpose in the pop-up box. If your business is just starting to establish a presence on Etsy, the Promote new products and Bring more traffic to my shop options are ideal for now. Then click Next, set your budget. Enter a daily advertising budget between $1-$50 in the pop-up box. This can be as low as $1 for the initial month as you get comfortable with Etsy and its advertising methods. Click on Start Advertising once you are satisfied with the settings Step 3: Managing advertisements Refer to the Etsy Ads page to adjust the advertising budget, the selected product listings, and to pause or end the advertisements These adjustments should be based on the advertisement analytics present on the Etsy Ads page as displayed below. The first row of analytics provides an overview of all advertisements for your shop while the filters and analytics in the second row provide a narrowed down vision of individual product listings and their advertisements performance The Shop Manager icon on the top-right corner of the Etsy homepage should be used as a hub for managing everything from listings and advertisements to order shipments and payments. Offsite Ads Etsy buys offsite advertising space from providers such as Facebook, Google, Pinterest, Instagram, and Bing to advertise products from its own platform. While Etsy covers all upfront advertising costs with these external providers, if a buyer clicks on an Etsy seller’s listing on these platforms and purchases the product within 30 days of that click, the seller is charged an advertising fee by Etsy against that order. Sellers automatically get enrolled in the Offsite Ads program, but if they have made less than $10,000 USD on Etsy in the past 12 months, they have the option to opt-out of this program. More information on Offsite Ads can be accessed here. Additional Resources How Does Etsy Advertising Work Fees and Types of Payments on Etsy Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Elevate Playbook

Small Business Registration

Small Business Registration

1. Determine What Type of Business You Want to Register As Sole proprietor: A sole proprietorship is a business that is owned and operated by an individual. This is the simplest form of business entity. The business and yourself are one. This is the simplest and the most common type of business out there. The sole proprietor is responsible for everything the business does. You do business under your own name, with no separation of assets and liabilities. This means that you’ll be held personally liable for any debts that the business incurs, any legal implications, and you are only taxed once for revenues. Partnership: A partnership is the relationship between two or more people who join to do business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. Partnerships comprise two or more people and any profits, debts and decisions related to the business are shared. This does not always mean 50/50 share in the business. Corporation: A corporation is a business organization that has a separate legal personality from its owners. Ownership in a corporation is represented by shares of stock. Think of the big companies like Intel, Pepsi, and Google. The owners, or stockholders, enjoy limited liability but have limited involvement in the company's operations and decision power is based on what proportion of stock you own. Limited Liability Company (LLC): Hybrid forms of business that have characteristics of both a corporation and a partnership. Nonetheless, the owners enjoy limited liability like in a corporation. An LLC may elect to be taxed as a sole proprietorship, a partnership, or a corporation. An LLC is not incorporated; hence, it is not considered a corporation. Starting an LLC also gives you the perk of pass-through taxes, limited liability (obviously), and legal protection for your personal assets. Those who an LLC need not be U.S. citizens or permanent residents. 2. Make Sure You’re Legally Permitted to Use Your Business’ Name Before you start printing out business cards and buying domain names, make sure the name you chose for your business isn’t infringing on the rights of an already existing business. In most cases, you don't need an attorney for this task, as you can perform a free search online that looks at business names registered with the Secretary of State. Considering you can still infringe on someone else’s trademark even if they’ve never formally registered it with the U.S. Patent and Trademark Office, you should also do a comprehensive search into all state and local databases (look for an affordable online service to help you with this). 3. Register a Fictitious Business Name/DBA Remember, your business can operate under a different name than your company name. DBA (Doing Business As) must be filed whenever your company does business under a different name. If you’ve got a sole proprietorship or general partnership, a DBA is needed if your company name is different from your own name. For an LLC or corporation, a DBA must be filed to do business using a name that’s different from the official Corporation or LLC name you filed. For example, if a company is officially incorporated as AMI Goods, Inc., we need to file DBAs for the variations AMIGoods.com and AMI Goods. These are typically filed at the state and/or county level. Visit https://www.azsos.gov/business/trade-names-and-trademarks to file DBAs in Arizona. 4. Get a Federal Tax ID Number To distinguish your business as a separate legal entity, you'll need to get a Federal Tax Identification Number, also called an Employer Identification Number (EIN). Think of this as a social security number for your business. It allows the IRS to track your company's transactions. If you’re a sole proprietor, you are required to get a Tax ID number, but it’s still a good idea to get one so you won’t have to provide your social security number for your business matters. Note: If you're using an online legal service or a business registration advisor to set up your legal business, don’t pay them to get your EIN. Instead, apply online at the IRS website here. You'll have your EIN in minutes without paying their fee. 5. Learn About Employee Laws (Skip if you don’t have employees) Your legal obligations as an employer grow when you have employees. You should spend time researching and/or with an employment law professional to fully understand your obligations. Some of your obligations are as follows: federal and state payroll and withholding taxes, self-employment taxes, anti-discrimination laws, OSHA regulations, unemployment insurance, workers' compensation rules, and wage and hour requirements. 6. Obtain the Necessary Business Permits and Licenses Depending on your business type and physical location, you may be required to have one or more business licenses or permits from the state, local or even federal level. Such licenses include: a general business operation license, zoning and land use permits, sales tax license, health department permits, and occupational or professional licenses. 7. File for Trademark Protection You're not actually required by law to register a trademark. Using a name instantly gives you common law rights as an owner, even without formal registration. However, as expected, trademark law is complex and simply registering a DBA in your state doesn’t automatically give you common-law rights. Registering a trademark makes it exponentially easier to recover your properties, like if someone happens to use your company name. Having the right documentation means you have the legal right to that handle. 8. Open a Bank Account to Start Building Business Credit When you rely on your personal credit to fund your business, your personal mortgage, auto loan and personal credit cards all affect your ability to qualify for a business loan. Using business credit separates your personal activities from that of the business. To begin building your business credit, you should open a bank account in the name of your company, and the account should show a cash flow capable of taking on a business loan. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook Return to Small Business Accounting 101 Continue to Achieving Nonprofit Status

Business Plan Writing

Business Plan Writing

What is a Business Plan? A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a valuable way to think through the critical elements of your business. Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is an intelligent choice. Why is a Business Plan important? A Business Plan will outline your business’s mission, vision, and goals, in addition to expanding on the topics detailed in the Business Model Canvas. The beauty of the Business Model Canvas is that the BMC can directly translate to a full-fledged business plan to tell your business’s story. It gives entrepreneurs the ability to lay the foundation of their business and analyzes each aspect of their business. A business plan will also let the entrepreneur track their goals and measure their success as the company develops. Traditional Business Plan Format Executive Summary The executive summary is an introductory paragraph or two that gives the reader an overview of your business. It contains the business’s “elevator pitch” and explanation of its brand, competitive advantage, goals, and time frame. The executive summary should be written last, after completing all other portions of the Business Plan, so that you can effectively summarize your business. Below is an outline of how you can potentially format your executive summary. Please consider that this is an outline and should be expanded upon in greater detail. [Business name] is a [describe business in 2-3 sentences]. This business is unique in that [elaborate on the value proposition and your competitive advantage in 2-3 sentences]. Our goal is to [describe business goals and future outlook 1-2 sentences]. This document describes the various aspects of the value chain and [Business name] model from a high level. This document will include the following key components of the business discussed in detail: Value Proposition Customer Segment Channels Customer relationships Key Activities Key Resources Key Partnerships Industry Analysis Financial Situation Through discussion of these areas, we believe that [Business name] has a crucial understanding of the entire business process and will be able to compete readily with its industry rivals. Business Overview The business overview is where you get to showcase the operations of your business. It's essentially the “meat and potatoes” of your Business Plan. The business overview section can be broken down into 3 main components: mission/vision/goals, organizational personnel & structure, and operations of the business. Mission/vision/goals This subsection should not be very lengthy, 1-2 pages at the most. Simply list your mission statement and develop your vision and goals for the business moving forward if you have not already done so. The mission statement describes the long term goals of your business by addressing what your business does for its customers and employees and what you want out of your business. Often confused with the mission statement, the vision should describe the future outlook of the business if the mission statement is achieved. The goals or key objectives are specific activities and results that can be measured and tracked. Goals are arguably the most important part here as it conveys a lot about you as a leader and where the business is headed. Organizational personnel & structure Organization – Here, briefly indicate the type of business registration. Additionally, you should outline your business’s organization, essentially how the business is set up. Structure – In this subsection, be sure to showcase any members of the board, owners, founders, and staff roles that you deem relevant and appropriate. This includes background information, qualifications, responsibilities, why that person is a value-add to your business, etc. One way to express the organizational structure is by creating a chain of command diagram Operations of the business In business operations, you should elaborate on all of the components detailed in the Business Model Canvas, excluding cost structure and revenue streams. They are listed below: Value Proposition Customer Segments Customer Relationships Channels Key Activities Key Resources Key Partnerships Industry Analysis and Strategy The Industry Analysis and Strategy sections demonstrate your knowledge of the strengths and weaknesses of the industry and how you hope to capitalize on these opportunities while avoiding threats. The goal is for you to thoroughly understand the competitive landscape and articulate a strategy. Industry Analysis This subsection provides you the opportunity to prove that the components in your business overview are founded on and backed by data, statistics, trends, themes, and more. The types of analyses to consider including in your business plan are listed below: Structural Analysis (Porter’s 5 Forces) – the primary objective here is to understand the intricacies of the industry and convey them through your business plan. This includes how businesses in your industry are succeeding or failing and analyzing your target customers as well. Competitor Analysis – this analysis details the various direct and indirect competitors in your industry by addressing who they are and what they are good at. Here, you can evaluate how your business compares to established and emerging businesses. Be sure to highlight why your business is better than the others. Competitive Strategy After analyzing the fashion industry, your business plan should outline the strategies your business will employ. Be sure to focus on your brand, your business’s differentiation, and the benefits of a particular strategy. The types of strategies to consider are listed below: Porter’s Generic Strategies (Competitive Strategies) Sales & Marketing Strategies Financial Situation In the final section of your Business Plan, you should primarily focus on the bottom portion of the Business Model Canvas: cost structure and revenue streams. For investors, loan associates, or other entities, this is one of the most important sections of your business. In a typical business plan, this section is composed of financial statements and calculated projections. However, since your business is still in the introductory stage, financial statements are not necessarily relevant yet. However, it is applicable and important to discuss your anticipated revenue streams, initial expenditures, and financial goals and expectations. These projections should be founded on research and analysis that you have conducted. Revenue Streams Monthly subscription boxes Product on website Cost Structure (Expenditures) Startup costs, permits/licenses, business operational costs Fabrics, machines, shipping, and packaging Financial Projections & Goals: Anticipated revenue Anticipated profits or alternatively, when you hope to break-even Additional financial goals or expectations you may have Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org.

What Value Does Your Business Offer? The Value Proposition

What Value Does Your Business Offer? The Value Proposition

The Value Proposition is the tangle and intangible aspects of what your business offers. It is comprised of your product or service and the additional value and benefits your customers derive from it. In short, it is the primary reason the customer chooses to pay for what you are selling. The Value Proposition is the first segment in the Business Model Canvas or "BMC" (see blog post here for further information on the BMC). See the following video for a brief explanation using a well-known company, Starbucks: Types of Value Propositions: There are a variety of different value propositions that products and services may have. As a business owner, your business success is largely determined by how well your value proposition satisfies customers’ needs. Your product or service may have one primary value proposition, or it may have several. Listed below are just some of the value propositions your product or service may offer. See if you can come up with examples of each as you read about them. Newness: Some value propositions satisfy an entirely new set of needs that customers previously didn’t perceive because it wasn’t ever an option. A customer who buys your product may simply do so because it is new. Performance: Improving product/service performance is a common way to create value. Essentially, you are offering a better version of an already-established product or service. Customization: Tailoring a product or service to the specific needs of a customer or customer segments. “Getting the Job Done”: Value can be created simply by helping a customer get a job done. Design: A product may stand out because it has a superior design. This is very important in the fashion and electronics industries. Brand/Status: Customers may find value in owning or displaying a product with your brand. This doesn’t necessarily entail simply liking a brand, but rather the value that brand name brings a customer, in terms of outside appearance to others. Price: Offering the lowest price is a common value proposition, but it can also detract from your other propositions by forcing you to skimp on various features or services. Sometimes, a high price can demonstrate added value. There are advantages to appealing to the price-conscious consumer as well as to the high spender. Cost Reduction: Cost reduction is about helping the customer reduce costs. This can largely be in the sense of business-to-business sales, but also can be found in selling to consumers. Risk Reduction/Reliability: Customers value reducing the risks they incur when purchasing products or services. Car dealerships and high-end electronics retailers often do these warranties and service-level guarantees. Accessibility: Allowing people who previously didn’t have access to a product to now have access to a product. (i.e. Timeshares, mutual funds, etc.) Convenience/Usability: Making things convenient and easy-to-use provides immense value for customers. Devices like Apple’s iPod and iPhone are heavily driven by this value proposition. At some point, your value proposition should boil down to whether to not your product or service is solving a problem. For your customer, you need to satisfy a need or solve a problem, even if this need or problem isn’t something that the customer already knew they needed satisfied or solved. Have additional questions? Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. You can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1. Return Home Continue to Build Playbook

How Do I Construct Professional Emails

How Do I Construct Professional Emails

According to McKinsey and Company, reading and crafting E-Mails takes over 25% of the average workweek. With E-Mail being a vital form of communication for business, it is important that you and your brand appear professional and that your E-Mails get read. Proper E-Mail etiquette can create and maintain a good impression. This tutorial provides step-by-step processes to ensure you use proper etiquette. Step 1: Use a Professional Address If your work E-Mail is the same as your personal, be sure the address is appropriate. It should also contain your name so the recipient can easily identify who you are. This example shows an E-Mail in the “To” section, but the general format is a good example of a standard business E-Mail. For example, AMI chooses to create staff E-Mail as [Staff Name]@azmicrocredit.org. Step 2: Create a Clear Subject Line With a multitude of E-Mails people receive daily, a clear, direct subject line will not only draw the attention of your audience, but also give direct context of what information the E-Mail contains. All caps or all lowercase in the subject line can make the E-Mail look unprofessional or similar to spam. In this example, the subject line gives direct indication to its recipient of what information is in the E-Mail. It is also clear that it contains important information, which will ensure it gets read (so that the meeting is not missed). Step 3: Use a Formal Greeting Appropriate greetings include: “Hello, [Insert Name]” , “Greetings, [Insert Name]”, “Hello Everyone” Step 4: Construct your Message In a professional and formal conversation, you do not want to run the chance of miscommunication, therefore, it is essential maintain a professional tone and language in the message. First and foremost, begin with writing in full sentences as well as keeping fonts, colors, and font sizes classic. Next, avoid using too many exclamation points and abbreviations, such as OMG, and limit the humor included in the message as it may be mis-interpreted. Further, when communicating sensitive information, keep private material confidential and instead opt to utilize in-person or phone communication instead. Step 5: Proofread your Message Read your message out loud to ensure that sentences are fluid and all the information included is consumable. Further, check for spelling, grammar, and punctuation mistakes throughout the E-Mail. Since these errors are easy to miss, you can also install a program such as Grammarly for a second pair of eyes to review your message. Visit Grammarly.com to download the application to your device. Step 6: Use a Formal Salutation (Send-Off) Your send-off should maintain professional, similar to the greeting. Some examples include “Sincerely”, “Best Regards”, and “Thank You” followed by a comma. Step 7: Create an Automatic Signature Set up an automatic signature through your E-Mail settings. Your signature should include your name, phone number and other relevant contact information, and your company or organization. This helps your recipient contact you with ease without searching for your information elsewhere. Step 8: Add Recipients Add the recipient(s) E-Mail address(es) last. This will prevent an accidental send without proofreading your message first. TO: The “To” address bar should be filled with address of who the E-Mail is formally typed to (i.e. who is in your greeting). Bcc: The “Bcc” address bar should be used when E-Mailing a group of contacts who do not personally know each other. By not listing them in other recipient address bars, you avoid sharing their E-Mail addresses. Cc: This address bar should be used when E-Mailing a group of people who know each other and all partake in the discussion. Step 9: Respond Promptly When you receive a new E-Mail or a reply, respond within 48 hours in order to ensure the most effective and efficient communication between the sender and receiver. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

Why Conduct Market Research?

Why Conduct Market Research?

The goal of doing market research is to equip yourself with the information you need to make informed business decisions about start-up, innovation, growth, and the 4 P's: Product — Improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance and customer service or warranties. Price — Set a price based on popular profit margins, competitors' prices, financing options or the price a customer is willing to pay. Placement — Decide where to set up and how to distribute a product. Compare the characteristics of various locations and the value of points of sale (retail, wholesale, online). Promotion — Figure out how to best reach particular market segments (teens, families, students, professionals, etc.) in areas of advertising and publicity, social media, and branding. Basic questions to answer with market research: Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational attainment. What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features, and the predominant price points. Why do they buy? Depends on the product and its uses. What will make them buy from you? Use detailed information about markets, sales figures, and consumer buying motivations. Types of Market Research Primary Research The goal of primary research is to gather data from analyzing current sales and the effectiveness of current practices. Primary research also takes competitor’s plans into account, giving you information about your competition. How can you collect primary research? Interviews (either by phone or face-to-face) Surveys (online or by mail) Questionnaires (online or by mail) Focus groups gathering a sampling of potential clients or customers and getting their direct feedback Some important questions might include: What factors do you consider when purchasing this product or service? What do you like or dislike about current products or services currently on the market? What areas would you suggest for improvement? What is the appropriate price for a product or service? Secondary Research The goal of secondary research is to analyze data that has already been published. With secondary data, you can identify competitors, establish benchmarks and identify target segments. Your segments are the people who fall into your targeted demographic--people who live a certain lifestyle, exhibit behavioral patterns, or fall into a predetermined age group. Collecting Data No small business can succeed without understanding its customers, its products and services, and the market in general. Competition is often fierce and operating without conducting research may give your competitors an advantage over you. Types of Research Experimental Research – involves manipulating condition and studying effects Correlation Research – involves studying the relationships among variables within a particular group, and frequently suggests the possibility of cause and effect Survey Research – involves describing the characteristics of a group by means of such instruments as interview schedules, questionnaires, and tests. Two categories of data collection: quantitative and qualitative. Quantitative (Experimental, Single-subject, correlation, causal-comparative, survey) Qualitative (Ethnographic, historical) Observation Techniques Structured Unstructured Controlled Uncontrolled Non-Participant Disguised Participant Common Marketing Mistakes Using only secondary research. Relying on the published work of others doesn't give you the full picture. It can be a great place to start, of course, but the information you get from secondary research can be outdated. You can miss out on other factors relevant to your business. Using only web resources. When you use common search engines to gather information, you get only data that are available to everyone and it may not be fully accurate. To perform deeper searches while staying within your budget, use the resources at your local library, college campus, or small-business center. Surveying only the people you know Small-business owners sometimes interview only family members and close colleagues when conducting research, but friends and family are often not the best survey subjects. To get the most useful and accurate information, you need to talk to real customers about their needs, wants, and expectations. Industry Due Diligence – for comparative purposes, consider: Companies of relative size. Companies serving the same geographic area, which could be global if you are planning to be a web-based business. Companies with a similar ownership structure. If your business has two partners, look for businesses run by a couple of partners rather than an advisory board of 12. Companies that are relatively new. While you can learn from long-standing businesses, they may be successful today because of their 25-year business history and reputation. You’ll want to use the data you’ve gathered not only to determine how much business you could possibly do but also to figure out how you’ll fit into and adapt to the marketplace. Follow these steps to spending your market research dollars wisely: 1. Determine what you need to know about your market. The more focused the research, the more valuable it will be. 2. Prioritize the results of the first step. You can’t research everything, so concentrate on the information that will give you the best (or quickest) payback. 3. Review less-expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative. 4. Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you’re considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business. Don’t pay for what you don’t need. Applications of Market Research Marketing research activities can be divided into 4 main strategic categories: Market Analysis Identifying and evaluating opportunities Competitive analysis Market Segmentation Analyzing market segments and selecting target markets Marketing Strategy Planning and implementing a marketing mix Analyzing marketing performance Steps to complete market research: Formulating the research problem Extensive literature review Developing the objectives Preparing the Research Design including Sample Data Collecting the Data Analysis of Data Generalization and Interpretation Preparation of the report or presentation of results - formal write-ups of conclusions reached Helpful Market Research Tools & Resources Think with Google: Marketer’s Almanac Price: Free Wish you had information on how consumer behavior changes in relation to the seasons, holidays, and other unique events? This tool offers interesting insights into how people browse and buy. American Fact Finder Price: Free A resource for searching U.S. census data. You can filter by age, income, year, race, and location. Business Dynamics Statistics Price: Free It takes census data and allows you to see economic data on job creation, startups and shutdowns, business openings, expansions, and closures. FedStats Price: Free It provides an up-to-date forum for finding data released by federal agencies, including agriculture, education, transportation, and energy. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Sources: https://www.entrepreneur.com/article/241080 https://www.entrepreneur.com/article/217345 Return Home Return to Build Playbook

Business Process Improvement (BPI)

Business Process Improvement (BPI)

The continual practice of reinventing an organization’s routines with the aim of improving efficiency. How to Implement BPI Start Small BPI is a marathon, not a sprint. Trying to improve too many processes at once will likely lead to management and/or employee burnout. Instead, observe some of the processes that occur within your businesses most often, and choose the one that could use the most improvement. Don’t Go It Alone Successful BPI requires support from both management and employees. Be sure to involve all relevant parties in the process of improvement. Create a change-leading team that can help identify and implement solutions. 1. Observe & Document Thoroughly document the process from start to finish. Note all of the following: What triggers the beginning of the process? The people involved in each step of the process (these could be employees, partners, or customers) Any and all decisions that might be made within the process • How long it takes for each step to be completed What marks the end of the process (A product? A transaction? A finished task?) Things that work well in the process Things that do not work well It is important to be as specific as possible when documenting the process as it currently exists. Be sure to speak with every individual involved in the process to understand their roles—their opinions of the process are valuable information as well. 2. Diagnose Inefficiencies, Redundancies, and Waste No process is perfect, so there will likely be room for improvement from the start. However, be sure to look further even after identifying the obvious pain points. Ask why each step is done in that way. Consider which steps are necessary and which may be redundant. Think of how the process might scale as the business changes and grows. If there are multiple improvements to make, order them in order of importance to focus management’s energy on the most vital changes. 3. Identify solutions There are plenty of ways to come up with solutions to a business’s problems, but be sure to view the issue from many different lenses. Consider speaking to other business leaders to see if they have any advice to share. Crowdsource ideas from employees; they have firsthand knowledge of the processes. Research potential services or technology solutions online. Some problems can benefit from outside help, such as consulting (like AMI!) Brainstorm with your team to come up with the best feasible solutions. 4. Set a Plan of Action After identifying the problem and solution, decide how to implement the necessary changes. Who will be required to lead the change? What business functions will it affect? Work with the individuals involved in the process in order to document each step of the necessary change(s), and share the information with all relevant parties. Remember that buy-in from management and employees is key. Be sure to explain the why behind every process change. Set goals for each part of the improvement with deadlines and measurable results. Finally, allocate the necessary time and financial resources. 5. Implement the Change The hardest step in improving business processes is undergoing the change itself. Begin implementing the plan, taking into account feedback from those involved and any relevant metrics to measure success. Document what goes well and what needs more work still. More reinvention might still need to happen—don’t be afraid to go back to the drawing board when a new idea doesn’t work out as planned. Once your improvements have been implemented, evaluate the return on the time and money invested into the project. Hopefully, the process is now faster, more efficient, or more cost-effective. Keep an eye on the outcomes of the process to see how quality changes. Get feedback from individuals the process affects. Use any and all information available to continually make small changes to keep the process current and efficient. Take what you learned from the endeavor to inform how to undergo future process improvement. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Elevate Playbook

Vision and Mission Statement

Vision and Mission Statement

Setting the foundations for the purpose of your operations. Overview Mission and vision statements are short descriptions of a business or organization that articulates the goals, objectives, and values of an organization; this is an important tool for making decisions and plans about a business. An organization can have one complete statement that describes its mission and values or two separate mission and vision statements. Mission Statement vs Vision Statement The mission is what the company is and what they do; vision is what they hope to be. Mission statements are more action-oriented and serve to describe the purpose of a company or organization. It expresses the business’s functions and objectives. Having a developed mission statement is necessary to create an accurate vision statement. The vision statement describes where you want your company to go. It provides insight into a business’s values. An understanding of both of these statements is necessary for developing your company’s brand. Necessary Elements What Goes in a Quality Mission Statement? A good mission statement should be one nice sentence at the most. The mission statement should consider the long-term future of the organization and not be limiting. Employees should be asked what they think of the statement and the organization shouldn’t be afraid to alter the statement if circumstances change. 3 Major Components According to Professor Chris Bart, notable authority of organizational mission and vision statements, a mission statement consists of three essential components: Great Examples AMI "The purpose of Arizona Microcredit Initiative is to empower underserved entrepreneurs to start or expand businesses through business instruction, consulting services, and microloans.” LinkedIn “To connect the world’s professionals to make them more productive and successful.” Amazon “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.” What Goes in a Quality Vision Statement? A good vision statement should also be short like a mission statement. The statement is an optimistic outlook about the current state of the organization as well as the future objectives. The vision statement is goal-setting and it should be what the entire organization’s work is looking to create. It should be inspiring. Common Traits Great Examples AMI “An Arizona where neither a challenging background nor lack of resources can stand in the way of a passionate, entrepreneurial spirit.” Apple “To make the best products on earth, and to leave the world better than we found it.” Shopify “Make commerce better for everyone, so businesses can focus on what they do best: building and selling their products.” Decision Making Based on Statements A mission statement should be the ethos of what your company does, and thus should be emphasized in the actions that the company takes within its culture. Whenever there are decisions that you as a leader of an organization are making, the company’s mission statement should align with the actions the organization is taking. The 3 Steps To Take When Decision-Making Step 1 Ask yourself, Why Are You Making The Decision? Understand what the short and long-term implications of the decision are. Step 2 After evaluating the implications of your decision, ensure that that your decision fits your Vision and Mission Statement. Step 3 Ensure that your decision makes business sense. Ask yourself, will this be a net benefit for my net profit in the long-term? If the answer is no, re-evaluate the decision because the long-term profitability of your business will allow you to sustain your business. Great Example Tomm’s Shoes has the goal of ensuring that every person that needs a shoe can get a shoe. This mission statement is embedded into the ethos of the company and that is why for every pair of shoes a person purchases from Tom’s, another shoe is made for a person in need. Toms was able to do this because they could afford it and they deemed it as a business decision that would increase their long-term profitability. Create Your Mission and Vision Statement Mission Statement Below begin brainstorming what your mission statement might be. Think about the three major components of a mission statement and what those are in your business. Feel free to refer back to the page about what a quality mission statement looks like. Vission Statement Below begin brainstorming what your vision statement might be. Go over the 6 common traits and reflect on what values your business holds. Again, feel free to refer back to the page about what a quality vision statement looks like. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

5 Ps of Marketing Explained

5 Ps of Marketing Explained

In this video tutorial, our staff walks you through the 5 P's of Marketing so that you can effectively market your business. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

Building Customer Relationships- Customer Feedback

Building Customer Relationships- Customer Feedback

Customer feedback is vital for business growth. Your business is, after all, built entirely around your customers. This is why whenever you log on to websites or use an application, you are asked to provide a review or give some sort of feedback: the customer’s opinion is the most important piece of information a business can have. Customer Feedback: Your Greatest Source of Learning What is Customer Feedback and Why Does It Matter? Think back to the last time that a cashier handed you a receipt with the link to a survey at the bottom of it. Or the last time that you bought something online and were sent an email asking you to leave a review for the product. Both the receipt with the survey and the request for a review are examples of companies asking you, their customer, for feedback. Customer feedback is information given by customers about their experience with a company’s products or services. It provides insight into their satisfaction level and paints a picture of how they feel about the product or service that they received. Collecting feedback empowers businesses to improve the customer experience through informed decisions. It allows you to know what you’re getting right and what you’re getting wrong in the eyes of the customer. Everyone loves to receive praise, but negative feedback is especially powerful, as it reveals where there is room for improvement. Microsoft founder Bill Gates took this idea to heart, as seen in the quote on the right. Collecting customer feedback is an essential practice for any companies that wants to put customer satisfaction at the forefront. Collecting Customer Customer Feedback Before you can begin collecting feedback, it is important to identify the reason that you’re looking for feedback. Having specific goals in mind that sets the groundwork for the entire process, it can help you determine how to reach your customers, what to ask them, and what to do with the answers that you receive. After all, data collection is great, but it becomes overwhelming and futile without any idea of what to look for in the data. Some examples of goals include the following: Understanding trends in customer satisfaction Identity customer service issues Uncover product performance deficiencies Improves a specific aspect of the customer experience What to Ask and How to Ask It There are a variety of different tools that can be used to gauge how customers feel about their experience with your business. The best way to measure this depends on what you want to learn from your customers and how you want to reach them (more on channels in the next section). 1. Net Promoter Score (NPS) Net Promoter Score (NPS) measures the likelihood that a person will recommend your product or service. It’s one question with a scale of 1 to 10. NPS is calculated by subtracting the percentage of detractors (customers who would not recommend you) from the percentage of promoters (customers who would recommend you. 2. Customer Satisfaction Score (CSAT) Customer Satisfaction Score (CSAT) measures how satisfied a customer is with a specific interaction with a company. Like NPS, it’s only one question. 3. Customer Effort Score (CES) Customer Effort Score (CES) measures how much effort was required by your customers to get their problem solved. 4. Social Media Monitoring Social media monitoring allows you to learn what customers are saying about your business in an organic way. Tools like Google Alerts and Mention help you identify mentions of your brand on websites like Facebook, Twitter, Quora, Yelp, TripAdvisor, and other third-party review sites. 5. Feature Request Board If your goal with customer feedback is to improve your product, a feature request board is a helpful tool to gauge product feedback from existing customers. It allows customers to submit their own requests and ideas on how to improve the product. How to Reach Your Customers Now that you’ve decided what you will ask your customers, you need to figure out how to reach them. Oftentimes, the ask and the channel are intertwined; some channels are more appropriate or more effective than others for eliciting responses. Point of Service: Asking for customer feedback at the point of service allows for rapid feedback. However, the customer journey may not have ended yet at this point, so information may be incomplete. Email: When customers’ email addresses are collected, follow-ups can be sent requesting customer feedback. These may include surveys (NPS, CSAT, CES) or open-response questions. Typically, incentives are offered for completion. Business Website: For online websites, embedding opportunities for feedback into the business’ website gives customers the chance to respond at any point during the customer journey. Social Media: Integrating opportunities for feedback into a business’ social media presence can be an easy way to generate responses. Many apps, including Facebook, Instagram, and Twitter, have in-app polling abilities. Phone Call: When customers’ phone numbers are collected, customer feedback can be requested via a call. Calls are associated with low response rates, but conversations can open the door to qualitative feedback. Bringing It All Together So, what would generating customer feedback actually look like for your company? Below are three examples of how to execute the methods covered in this guide. They escalate in both implementation difficulty and the quantity and quality of potential insights. Scenario 1: Informal Inquiry at the Point of Service As customers finish their shopping and pay for their products, you can ask them questions about their experience. Documentation and data collection are difficult with this method, but organic conversations are a great way to start receiving feedback. Many businesses use their point to service interactions to encourage customers to leave feedback online through sites like Yelp, Angie’s List, and Foursquare. Scenario 2: Follow-Up Email Survey This method requires the collection of customer emails. After the customer has finished their interaction with your business, send a follow-up email asking for feedback via a survey. Here, you can apply what you’ve learned about NPS, CSAT, and CES. Survey creation tools include Google Forms and SurveyMonkey. This process can be simplified through email automation services such as HubSpot, Mailchimp, and Campaign Monitor. Scenario 3: Social Media Monitoring To effectively monitor social media, you will need to use a tool. Google Alerts keeps you informed of any time your brand is mentioned online, while tools like Hootsuite can help you manage and understand your business’s social media accounts. Data from both can be collected and analyzed for insights. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

Building Customer Relationships- Promotion Strategies

Building Customer Relationships- Promotion Strategies

The best way to grow your followers, and thus your business, is to provide a value-add for them. Ask yourself what would make someone want to connect with your business. For example, running promotions or giveaways from your social media page can provide a benefit to those who connect. What is a Promotional Strategy and why is it important? Promotional strategies are designed to generate interest in your product or band. They use a unique combination of advertising, sales promotion, and promotional platforms, such as social media, to encourage customers to buy your product. It is a useful method to get more people to try your products, keep customers loyal, and identifying potential customers. What are some examples of Promotional Strategies? There are a wide variety of Promotional Strategies that are available for one to use. An example would be the use of coupons, which consumers can go and use to redeem a discount. Another one would be Buy One Get One Free, BOGO’s are a great way for one to get their product into more people’s hands as these deals are often time-sensitive and it will incentive people to get the deal. And lastly, one of the most popular strategies from a consumer’s perspective is a giveaway. A giveaway gives people an opportunity to use a product for the first time. With all of these strategies, ensure that your strategy matches your business’s brand standards. For example, Trader Joe's does not give out coupons but does have seasonal items as a promotional strategy. Everyday examples of promotion strategies In this example, Ritz Crackers has partnered with Costco and is doing a giveaway to get their product into the hands of more people as a Promotional Strategy. In this example, Subway is offering a BOGO deal on their Subs. This is an example of a Promotional Strategy in Action. How to use Social Media to promote your product Social media platforms, such as Facebook and Instagram, can be a useful tool for increasing awareness and generating interest for your products. Introducing promotions on your business’ social media will inform existing customers as well as those already interested in your products of new opportunities to try your products at a discounted rate. This both rewards your loyal customer base and introduces new customers to your business. Reaching your target demographic While using your business’ social media platforms is an effective method of reaching customers, creating targeted ads on social media will enable you to reach more prospective customers. Identifying those who might be interested in your products, either by cites they interact with or recent searches, will reach prospective customers that might not have heard of your brand. You can learn more about how to create social media ads at https://www.azmicrocredit.org/single-post/social-media-ads Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org. Return Home Continue to Build Playbook

Pricing

Pricing

What is Pricing? Pricing is a way for a brand to communicate a product’s value to consumers. Pricing can also help sellers determine their net profit margins, demonstrating how much a business earns from their goods and services. Increased prices can infer a higher quality product, whereas lower prices can target consumers looking for cheap products. To determine the price of a product, you must first establish your target demographic and their preferences. Setting A Price When selling your product or service, it is important to develop pricing objectives, to help determine what price to set for your product. During this process, you must decide what you want to communicate to consumers about the price of your product. When shopping for phones, do you look for the cheapest phone or for one that is high quality? Because different prices appeal to different consumer tastes, buyers are attracted to strategically priced products. There are multiple ways to price a product. A price-competitive product is a lower-cost alternative to competitors, particularly in comparison to more developed brands. While being aware of market prices for similar products is important, you must remain conscientious about continuing to make a profit after costs are incurred. For example, Walmart is known for their price competitive products in comparison to other department stores like Target. Alternatively, pricing higher than competitors can be a pricing strategy. A higher price can communicate a higher quality and more developed brand than competitors. However, you must be careful not to overprice your product. The higher price a product gets, the lower consumer demand it receives. An example would be generic prescription drugs vs brand name drugs. Many people choose generic drugs because of their affordability in comparison to their competitors. It is important to maintain your price at an amount your target demographic is willing to pay. Regardless of your pricing strategy, it is necessary to remain aware of your competitors’ prices. Why is Pricing Important? By using the Profitability Framework, you can break down your profit into two basic components: revenue vs costs. Profit is only able to occur if a business has more revenue than its costs. The difference between a business’ revenue and cost is called the contribution margin. Understanding your contribution margin as a business is crucial to understanding the profitability of your business. Revenues can be further broken down into price, volume, and product mix. Costs can then be broken down into fixed and variable. Here you can demonstrate how price will affect your revenue and then your profitability. There are many effective methods to changing your pricing strategies to increase profitability. Common Pricing Strategies Many pricing strategies are cost-based, meaning they take your cost per unit into account when determining what price you should charge for the unit. Cost-plus pricing and markup pricing are two examples of cost-based pricing strategies. Cost-Plus Pricing - Cost-based pricing are strategies to set a price amount based on the cost to produce each unit. This ensures that you are making a profit on your product. Example: If baking a loaf of bread costs $2.00, a baker will sell their loaves of bread for more than $2.00 to make a profit. To use cost-plus pricing you first need to determine your cost per unit. Next, you add a specified dollar amount to this number to determine your price. (Cost per unit) + (Expected % of return) = price Cost-Plus Pricing In order to calculate the expected rate of return, multiply the potential outcome of profit loss by the probability rate. After taking into account all potential outcomes, you add them all together to get the total expected rate of return. Markup Pricing - Using markup pricing you add a predetermined percentage to the established unit cost. This consistent amount is your markup rate. (Cost per unit) + (Markup rate) = price Markup Pricing Demand-based vs Competition-based pricing Demand-based pricing - based on the amount consumers demand Example: Hotels are cheaper in Arizona in the summer because people want to avoid the extreme heat. With fewer people visiting, Hotels decrease their prices to remain competitive. Example: Airfare is more expensive around holidays due to individuals traveling to visit their family. In order to supply the need for travel, airfare prices increase. Competition-based pricing - based on competitors’ prices Example: Burger King setting hamburger prices based on nearby fast food prices such as McDonald’s. Example: Pepsi lowering their prices to match Coca-Cola’s Using the Right Pricing Strategies Captive pricing - pricing the base product in a product line at a low cost, but increasing the price of necessarily related products. This strategy encourages consumers to buy your initial product and increase profits as they continue to purchase the higher-cost item. For example, printers are relatively inexpensive, but ink cartridges are priced higher. Keurig machines are another example. The Keurig itself is priced lower, but the K-cups needed to make drinks are pricier. Premium pricing - Pricing the higher quality or most desirable product higher than other products in your product line. This communicates to the consumer that the higher price version is the best or most advanced option. It also capitalizes on the customer’s demand for that product. An example of this pricing strategy is TV cable services. The most requested package, which often includes the most channels, is priced higher than the other options. Usually, this is also by a larger margin than other packages. Price lining - Selling goods at certain predetermined prices, reflecting definite price breaks. When using this pricing strategy, customers must often buy your product in quantities and not in individual units. A pack of ties, for example, could utilize this strategy. For one set of four ties, you might be charged $11.99 but for a pack of ten ties, you are charged $21.99. Package discounts are important because the increase in the volume of a product increases revenue which leads to higher profits. Pricing Psychology Odd-number pricing - using odd numbers and prices just below whole dollar amounts, makes consumers more likely to pay more.Ending prices in .99 called “charm pricing” because it makes the consumer believe they are paying less for goods and services whereas they are paying the same amount. Multiple unit pricing - packaging together multiple units of your product and selling them at a single price. Deals like buy one get one free or buy one get one 50% off are ways to use this strategy. This strategy is effective because it creates a sense of urgency by pushing customers to take advantage of the sale and purchase a product or service. Reference pricing - pricing a product at a moderate amount and displaying it next to a more expensive brand. This communicates your product as a lower-priced alternative to leading brands. Grocery stores utilize this when they place their own branded products next to more expensive name brands. Walmart and Kirkland are examples of this. Bundle pricing - packaging two or more complementary products and selling them together. These don’t have to be the same product, but rather two products that might be used in tandem with one another. Cox tv services often offer phone lines and wifi as part of their bundles. Spotify also uses bundle pricing, offering Hulu subscriptions as part of one of their premium plans. Adjusting prices due to changes in consumer demands Special-event pricing - during holidays, or seasons associated with buying special items it might be beneficial to adjust your prices. When selling office supplies, one might drop their prices during the back-to-school season to encourage customers to buy their brand. During Black Friday and Christmas, many companies offer lowered prices for their products. Arizona Microcredit Initiative (AMI) has consulting and microloan support for yourself and your business. If you have any more questions, you can schedule an appointment today through https://www.azmicrocredit.org/schedule-a-consultation-1 or reach out to us at info@azmicrocredit.org.